DAY – 2 Insta 75 Days Revision Plan-2024: Topic – ECONOMY, Subject-wise Test 13, Textbook-wise Test 2 and June 2023 CA

INSTA 75 Days REVISION PLAN 2024

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• Question 1 of 30 1. Question 1 points Which one of the following statements is/are correct about the Kangaroo Courts? (a) These courts act as the watchdogs of the grassroot units of local self-government. (b) These functional courts in India are beneficial for the health of the democracy. (c) The verdicts given by these courts are adjudicatory in nature. (d) The electronic and print media both act as unofficial Courts. Correct Answer: D Explanation: Option (d) is correct: Recently the former Chief Justice of India had said “kangaroo courts” run by the media are causing harm to the health of the democracy. These are media trials that do not form the grassroots of the local self-government. The media, particularly the print, electronic and social media should behave responsibly when Ill-informed and agenda-driven debates on issues involving justice delivery. It is used to refer to proceedings or activities where a judgement is made in a manner that is unfair, biased, and lacks legitimacy. Recently while rejecting the bail plea of the prime accused in the Lakhimpur Kheri violence case, Justice of the Allahabad High Court had accused the media of running ‘kangaroo courts’. Source: Indian Polity- Role of Media Trend: Indian Judiciary and related terms in news Approach: Only option (d) has a negative context w.r.t Kangaroo courts. Hence, odd one can be the correct option. Incorrect Answer: D Explanation: Option (d) is correct: Recently the former Chief Justice of India had said “kangaroo courts” run by the media are causing harm to the health of the democracy. These are media trials that do not form the grassroots of the local self-government. The media, particularly the print, electronic and social media should behave responsibly when Ill-informed and agenda-driven debates on issues involving justice delivery. It is used to refer to proceedings or activities where a judgement is made in a manner that is unfair, biased, and lacks legitimacy. Recently while rejecting the bail plea of the prime accused in the Lakhimpur Kheri violence case, Justice of the Allahabad High Court had accused the media of running ‘kangaroo courts’. Source: Indian Polity- Role of Media Trend: Indian Judiciary and related terms in news Approach: Only option (d) has a negative context w.r.t Kangaroo courts. Hence, odd one can be the correct option.

#### 1. Question

Which one of the following statements is/are correct about the Kangaroo Courts?

• (a) These courts act as the watchdogs of the grassroot units of local self-government.

• (b) These functional courts in India are beneficial for the health of the democracy.

• (c) The verdicts given by these courts are adjudicatory in nature.

• (d) The electronic and print media both act as unofficial Courts.

Answer: D

Explanation:

Option (d) is correct: Recently the former Chief Justice of India had said “kangaroo courts” run by the media are causing harm to the health of the democracy.

• These are media trials that do not form the grassroots of the local self-government.

• The media, particularly the print, electronic and social media should behave responsibly when Ill-informed and agenda-driven debates on issues involving justice delivery.

• It is used to refer to proceedings or activities where a judgement is made in a manner that is unfair, biased, and lacks legitimacy.

• Recently while rejecting the bail plea of the prime accused in the Lakhimpur Kheri violence case, Justice of the Allahabad High Court had accused the media of running ‘kangaroo courts’.

Trend: Indian Judiciary and related terms in news

Approach: Only option (d) has a negative context w.r.t Kangaroo courts. Hence, odd one can be the correct option.

Answer: D

Explanation:

Option (d) is correct: Recently the former Chief Justice of India had said “kangaroo courts” run by the media are causing harm to the health of the democracy.

• These are media trials that do not form the grassroots of the local self-government.

• The media, particularly the print, electronic and social media should behave responsibly when Ill-informed and agenda-driven debates on issues involving justice delivery.

• It is used to refer to proceedings or activities where a judgement is made in a manner that is unfair, biased, and lacks legitimacy.

• Recently while rejecting the bail plea of the prime accused in the Lakhimpur Kheri violence case, Justice of the Allahabad High Court had accused the media of running ‘kangaroo courts’.

Trend: Indian Judiciary and related terms in news

Approach: Only option (d) has a negative context w.r.t Kangaroo courts. Hence, odd one can be the correct option.

• Question 2 of 30 2. Question 1 points Consider the following statements: The term First Information Report (FIR) has not been defined in the Indian Penal Code or the Code of Criminal Procedure (CrPC). The provision of the Zero FIR in India came up after the recommendations of Justice Verma Committee constituted to suggest amendments to CrPc. Which of the statements given above is/are correct? (a) 1 only (b) 2 only (c) Both 1 and 2 (d) Neither 1 nor 2 Correct Answer: C Explanation: Statement 1 is correct: The term first information report (FIR) is not defined in the Indian Penal Code (IPC), Code of Criminal Procedure (CrPC), 1973, or in any other law, but in police regulations or rules, information recorded under Section 154 of CrPC is known as First Information Report (FIR). Statement 2 is correct: The provision of Zero FIR came up after the recommendation in the report of the Justice Verma Committee, which was constituted to suggest amendments to the Criminal Law in a bid to provide for faster trial and enhanced punishment for criminals accused of committing sexual assault against women. A Zero FIR can be filed in any Police Station by the victim, irrespective of their residence or the place of occurrence of crime, The objective of a Zero FIR is to ensure the victim doesn’t have to run from pillar to post to get a police complaint registered. Source: Indian Polity- Important Statutes and Acts Trend: Specific provisions of Acts and committee recommendations have been asked by UPSC. Approach: Factual/knowledge based question Incorrect Answer: C Explanation: Statement 1 is correct: The term first information report (FIR) is not defined in the Indian Penal Code (IPC), Code of Criminal Procedure (CrPC), 1973, or in any other law, but in police regulations or rules, information recorded under Section 154 of CrPC is known as First Information Report (FIR). Statement 2 is correct: The provision of Zero FIR came up after the recommendation in the report of the Justice Verma Committee, which was constituted to suggest amendments to the Criminal Law in a bid to provide for faster trial and enhanced punishment for criminals accused of committing sexual assault against women. A Zero FIR can be filed in any Police Station by the victim, irrespective of their residence or the place of occurrence of crime, The objective of a Zero FIR is to ensure the victim doesn’t have to run from pillar to post to get a police complaint registered. Source: Indian Polity- Important Statutes and Acts Trend: Specific provisions of Acts and committee recommendations have been asked by UPSC. Approach: Factual/knowledge based question

#### 2. Question

Consider the following statements:

• The term First Information Report (FIR) has not been defined in the Indian Penal Code or the Code of Criminal Procedure (CrPC).

• The provision of the Zero FIR in India came up after the recommendations of Justice Verma Committee constituted to suggest amendments to CrPc.

Which of the statements given above is/are correct?

• (a) 1 only

• (b) 2 only

• (c) Both 1 and 2

• (d) Neither 1 nor 2

Answer: C

Explanation:

Statement 1 is correct: The term first information report (FIR) is not defined in the Indian Penal Code (IPC), Code of Criminal Procedure (CrPC), 1973, or in any other law, but in police regulations or rules, information recorded under Section 154 of CrPC is known as First Information Report (FIR).

Statement 2 is correct: The provision of Zero FIR came up after the recommendation in the report of the Justice Verma Committee, which was constituted to suggest amendments to the Criminal Law in a bid to provide for faster trial and enhanced punishment for criminals accused of committing sexual assault against women.

A Zero FIR can be filed in any Police Station by the victim, irrespective of their residence or the place of occurrence of crime,

The objective of a Zero FIR is to ensure the victim doesn’t have to run from pillar to post to get a police complaint registered.

Trend: Specific provisions of Acts and committee recommendations have been asked by UPSC.

Approach: Factual/knowledge based question

Answer: C

Explanation:

A Zero FIR can be filed in any Police Station by the victim, irrespective of their residence or the place of occurrence of crime,

The objective of a Zero FIR is to ensure the victim doesn’t have to run from pillar to post to get a police complaint registered.

Trend: Specific provisions of Acts and committee recommendations have been asked by UPSC.

Approach: Factual/knowledge based question

• Question 3 of 30 3. Question 1 points Consider the following statements: Short-lived halogens have a lifetime of less than six months in the atmosphere, and are naturally produced in the Troposphere. Short-lived halogens increase methane’s lifetime in the atmosphere by destroying the hydroxyl radicals. Short-lived halogens such as chlorine and bromine cause a cooling effect on the Earth. How many of the statements given above are correct? (a) Only one (b) Only two (c) All three (d) None Correct Answer: B Explanation: Statement 1 is not correct: Short-lived halogens, which have a lifetime of less than six months in the atmosphere, are naturally produced by the oceans. However, human activities have amplified their release into the atmosphere. Halogens cause a depletion of ozone in the troposphere and hence are not produced there naturally. These short-lived halogens increased global methane burden by 14 per cent and 9 per cent for pre-industrial and present-day conditions, respectively. Statement 2 is correct: Short-lived halogens increase methane’s lifetime in the atmosphere by destroying hydroxyl radicals (OH). OH is a sink as it is known to break down this greenhouse gas. Statement 3 is correct: Oceans do more than just absorbing carbon dioxide and moderating the climate. They also cool the planet by releasing short-lived halogens such as chlorine, bromine and iodine. Source: https://www.downtoearth.org.in/news/climate-change/oceans-cool-the-planet-by-releasing-short-lived-halogens-that-contribute-8-10-per-cent-of-cooling-study-90312 Trend: Atmospheric gases, GHGs and climate change related news Approach: Factual/knowledge based question Incorrect Answer: B Explanation: Statement 1 is not correct: Short-lived halogens, which have a lifetime of less than six months in the atmosphere, are naturally produced by the oceans. However, human activities have amplified their release into the atmosphere. Halogens cause a depletion of ozone in the troposphere and hence are not produced there naturally. These short-lived halogens increased global methane burden by 14 per cent and 9 per cent for pre-industrial and present-day conditions, respectively. Statement 2 is correct: Short-lived halogens increase methane’s lifetime in the atmosphere by destroying hydroxyl radicals (OH). OH is a sink as it is known to break down this greenhouse gas. Statement 3 is correct: Oceans do more than just absorbing carbon dioxide and moderating the climate. They also cool the planet by releasing short-lived halogens such as chlorine, bromine and iodine. Source: https://www.downtoearth.org.in/news/climate-change/oceans-cool-the-planet-by-releasing-short-lived-halogens-that-contribute-8-10-per-cent-of-cooling-study-90312 Trend: Atmospheric gases, GHGs and climate change related news Approach: Factual/knowledge based question

#### 3. Question

Consider the following statements:

• Short-lived halogens have a lifetime of less than six months in the atmosphere, and are naturally produced in the Troposphere.

• Short-lived halogens increase methane’s lifetime in the atmosphere by destroying the hydroxyl radicals.

• Short-lived halogens such as chlorine and bromine cause a cooling effect on the Earth.

How many of the statements given above are correct?

• (a) Only one

• (b) Only two

• (c) All three

Answer: B

Explanation:

Statement 1 is not correct: Short-lived halogens, which have a lifetime of less than six months in the atmosphere, are naturally produced by the oceans.

However, human activities have amplified their release into the atmosphere. Halogens cause a depletion of ozone in the troposphere and hence are not produced there naturally.

These short-lived halogens increased global methane burden by 14 per cent and 9 per cent for pre-industrial and present-day conditions, respectively.

Statement 2 is correct: Short-lived halogens increase methane’s lifetime in the atmosphere by destroying hydroxyl radicals (OH). OH is a sink as it is known to break down this greenhouse gas.

Statement 3 is correct: Oceans do more than just absorbing carbon dioxide and moderating the climate. They also cool the planet by releasing short-lived halogens such as chlorine, bromine and iodine.

Trend: Atmospheric gases, GHGs and climate change related news

Approach: Factual/knowledge based question

Answer: B

Explanation:

Statement 1 is not correct: Short-lived halogens, which have a lifetime of less than six months in the atmosphere, are naturally produced by the oceans.

However, human activities have amplified their release into the atmosphere. Halogens cause a depletion of ozone in the troposphere and hence are not produced there naturally.

These short-lived halogens increased global methane burden by 14 per cent and 9 per cent for pre-industrial and present-day conditions, respectively.

Statement 2 is correct: Short-lived halogens increase methane’s lifetime in the atmosphere by destroying hydroxyl radicals (OH). OH is a sink as it is known to break down this greenhouse gas.

Trend: Atmospheric gases, GHGs and climate change related news

Approach: Factual/knowledge based question

• Question 4 of 30 4. Question 1 points Consider the following statements: When a star or supernova explodes asymmetrically When two big stars start orbiting each other. When two black holes merge while orbiting each other. How many of the events mentioned above are responsible for the creation of the Gravitational Waves? (a) Only one (b) Only two (c) All three (d) None Correct Answer: C Explanation: Gravitational waves are invisible. However, they are incredibly fast. They travel at the speed of light (186,000 miles per second). Gravitational waves squeeze and stretch anything in their path as they pass by. The most powerful gravitational waves are created when objects move at very high speeds. Some examples of events that could cause a gravitational wave are: Statement 1 is correct: when a star explodes asymmetrically (called a supernova) Statement 2 is correct: when two big stars orbit each other Statement 3 is correct: when two black holes orbit each other and merge Source: Science & Technology- Einstein’s General Theory of Relativity Trend: General Theory of Relativity and related concepts are a recurrent theme in UPSC’s questions Approach: Basic concepts Incorrect Answer: C Explanation: Gravitational waves are invisible. However, they are incredibly fast. They travel at the speed of light (186,000 miles per second). Gravitational waves squeeze and stretch anything in their path as they pass by. The most powerful gravitational waves are created when objects move at very high speeds. Some examples of events that could cause a gravitational wave are: Statement 1 is correct: when a star explodes asymmetrically (called a supernova) Statement 2 is correct: when two big stars orbit each other Statement 3 is correct: when two black holes orbit each other and merge Source: Science & Technology- Einstein’s General Theory of Relativity Trend: General Theory of Relativity and related concepts are a recurrent theme in UPSC’s questions Approach: Basic concepts

#### 4. Question

Consider the following statements:

• When a star or supernova explodes asymmetrically

• When two big stars start orbiting each other.

• When two black holes merge while orbiting each other.

How many of the events mentioned above are responsible for the creation of the Gravitational Waves?

• (a) Only one

• (b) Only two

• (c) All three

Answer: C

Explanation:

Gravitational waves are invisible. However, they are incredibly fast. They travel at the speed of light (186,000 miles per second). Gravitational waves squeeze and stretch anything in their path as they pass by.

The most powerful gravitational waves are created when objects move at very high speeds. Some examples of events that could cause a gravitational wave are:

• Statement 1 is correct: when a star explodes asymmetrically (called a supernova)

• Statement 2 is correct: when two big stars orbit each other

• Statement 3 is correct: when two black holes orbit each other and merge

Trend: General Theory of Relativity and related concepts are a recurrent theme in UPSC’s questions

Approach: Basic concepts

Answer: C

Explanation:

The most powerful gravitational waves are created when objects move at very high speeds. Some examples of events that could cause a gravitational wave are:

• Statement 1 is correct: when a star explodes asymmetrically (called a supernova)

• Statement 2 is correct: when two big stars orbit each other

• Statement 3 is correct: when two black holes orbit each other and merge

Trend: General Theory of Relativity and related concepts are a recurrent theme in UPSC’s questions

Approach: Basic concepts

• Question 5 of 30 5. Question 1 points With reference to the “Meira Paibis”, consider the following statements: These are also referred to as Imas that belong to the Meitei community of Manipur. These groups are largely led by women of the community. They have led grassroots movements and countered human rights violations. How many of the statements given above are *not correct? (a) Only one (b) Only two (c) All three (d) None Correct Answer: D Explanation: Statement 1 is correct: The Meira Paibis, also known as Imas or Mothers of Manipur, are Meitei women who come from all sections of society in the Imphal valley, are widely respected, and represent a powerful moral force. Statement 2 is correct: The Meira Paibis are loosely organised, usually led by groups of senior women, but have no rigid hierarchy or structure, or any overt political leanings. Statement 3 is correct: “The Meira Paibi was formed in 1977. One of the largest grassroots movements in the world, its initial focus of fighting alcoholism and drug abuse has now expanded to countering human rights violations and the development of society at large. Source: Social movements in news Trend: women led community movements are often asked in UPSC Approach: factual/knowledge based question Incorrect Answer: D Explanation: Statement 1 is correct: The Meira Paibis, also known as Imas or Mothers of Manipur, are Meitei women who come from all sections of society in the Imphal valley, are widely respected, and represent a powerful moral force. Statement 2 is correct: The Meira Paibis are loosely organised, usually led by groups of senior women, but have no rigid hierarchy or structure, or any overt political leanings. Statement 3 is correct:* “The Meira Paibi was formed in 1977. One of the largest grassroots movements in the world, its initial focus of fighting alcoholism and drug abuse has now expanded to countering human rights violations and the development of society at large. Source: Social movements in news Trend: women led community movements are often asked in UPSC Approach: factual/knowledge based question

#### 5. Question

With reference to the “Meira Paibis”, consider the following statements:

• These are also referred to as Imas that belong to the Meitei community of Manipur.

• These groups are largely led by women of the community.

• They have led grassroots movements and countered human rights violations.

How many of the statements given above are *not* correct?

• (a) Only one

• (b) Only two

• (c) All three

Answer: D

Explanation:

Statement 1 is correct: The Meira Paibis, also known as Imas or Mothers of Manipur, are Meitei women who come from all sections of society in the Imphal valley, are widely respected, and represent a powerful moral force.

Statement 2 is correct: The Meira Paibis are loosely organised, usually led by groups of senior women, but have no rigid hierarchy or structure, or any overt political leanings.

Statement 3 is correct: “The Meira Paibi was formed in 1977. One of the largest grassroots movements in the world, its initial focus of fighting alcoholism and drug abuse has now expanded to countering human rights violations and the development of society at large.

Trend: women led community movements are often asked in UPSC

Approach: factual/knowledge based question

Answer: D

Explanation:

Statement 2 is correct: The Meira Paibis are loosely organised, usually led by groups of senior women, but have no rigid hierarchy or structure, or any overt political leanings.

Trend: women led community movements are often asked in UPSC

Approach: factual/knowledge based question

• Question 6 of 30 6. Question 1 points With reference to RBI’s function as a bank of issue, consider the following statements: To ensure the confidence of the Indian currency holders that the currency held by them is a legal tender, the RBI follows Minimum Reserve System for the issue of currencies. Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 2000 crore comprising of gold and foreign currencies. The minimum reserve system does not have any practical connection with the amount of new currencies issued by the RBI. RBI can issue unlimited amount of currency by keeping the reserve. How many of the above statements are correct? a) Only one b) Only two c) All three d) None Correct Answer: b Explanation: The Reserve Bank has monopoly to issue currency notes of all denominations except one rupee notes. Since the one rupee note issued by the Ministry of Finance but distributed by the RBI through currency commercial banks. Thus, RBI is the ‘Bank of Issue’. In India, currencies are issued by the RBI with the backing of reserves comprised of gold and foreign exchange (foreign currencies). For the issue of currencies, the RBI follows Minimum Reserve System at present. The Minimum Reserve System (MRS) is followed from 1956 onwards. There are many objectives of MRS but a few are; To ensure the confidence of the Indian currency holders that the currency held by them is a legal tender and they will receive the value of the currency held by them. Hence, statement 1 is correct. The Minimum Reserve System is a token of confidence to the general public that the Indian government is liable to pay them as per the face value of the notes because the RBI governor promise to the public that “I promise to pay a the bearer a sum of 100/500 rupee.” Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion and foreign currencies. Out of the total Rs 200 crores, Rs115 crore should be in the form of gold coins or gold bullion. The purpose of shifting to MRS was to expand money supply to meet the needs of increasing transactions in the economy. Hence, statement 2 is incorrect. The minimum reserve is a token of confidence and doesn’t have any practical connection with the amount of new currencies issued by the RB Under the Minimum Reserve System, RBI can issue unlimited amount of currency by keeping the reserve. But RBI follows some principle or rule for issuing new currencies based upon economic growth and transaction needs of the people. Hence, statement 3 is correct. Source: Financial Institutions- RBI Trend: RBI’s policy and instruments on Money supply (such as: CRR, SLR etc) Approach: Basic concepts of Indian Financial System Incorrect Answer: b Explanation: The Reserve Bank has monopoly to issue currency notes of all denominations except one rupee notes. Since the one rupee note issued by the Ministry of Finance but distributed by the RBI through currency commercial banks. Thus, RBI is the ‘Bank of Issue’. In India, currencies are issued by the RBI with the backing of reserves comprised of gold and foreign exchange (foreign currencies). For the issue of currencies, the RBI follows Minimum Reserve System at present. The Minimum Reserve System (MRS) is followed from 1956 onwards. There are many objectives of MRS but a few are; To ensure the confidence of the Indian currency holders that the currency held by them is a legal tender and they will receive the value of the currency held by them. Hence, statement 1 is correct. The Minimum Reserve System is a token of confidence to the general public that the Indian government is liable to pay them as per the face value of the notes because the RBI governor promise to the public that “I promise to pay a the bearer a sum of 100/500 rupee.” Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion and foreign currencies. Out of the total Rs 200 crores, Rs115 crore should be in the form of gold coins or gold bullion. The purpose of shifting to MRS was to expand money supply to meet the needs of increasing transactions in the economy. Hence, statement 2 is incorrect. The minimum reserve is a token of confidence and doesn’t have any practical connection with the amount of new currencies issued by the RB Under the Minimum Reserve System, RBI can issue unlimited amount of currency by keeping the reserve. But RBI follows some principle or rule for issuing new currencies based upon economic growth and transaction needs of the people. Hence, statement 3 is correct. Source: Financial Institutions- RBI Trend: RBI’s policy and instruments on Money supply (such as: CRR, SLR etc) Approach: Basic concepts of Indian Financial System

#### 6. Question

With reference to RBI’s function as a bank of issue, consider the following statements:

• To ensure the confidence of the Indian currency holders that the currency held by them is a legal tender, the RBI follows Minimum Reserve System for the issue of currencies.

• Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 2000 crore comprising of gold and foreign currencies.

• The minimum reserve system does not have any practical connection with the amount of new currencies issued by the RBI. RBI can issue unlimited amount of currency by keeping the reserve.

How many of the above statements are correct?

• a) Only one

• b) Only two

• c) All three

Explanation:

• The Reserve Bank has monopoly to issue currency notes of all denominations except one rupee notes. Since the one rupee note issued by the Ministry of Finance but distributed by the RBI through currency commercial banks. Thus, RBI is the ‘Bank of Issue’.

• In India, currencies are issued by the RBI with the backing of reserves comprised of gold and foreign exchange (foreign currencies). For the issue of currencies, the RBI follows Minimum Reserve System at present. The Minimum Reserve System (MRS) is followed from 1956 onwards. There are many objectives of MRS but a few are;

• To ensure the confidence of the Indian currency holders that the currency held by them is a legal tender and they will receive the value of the currency held by them. Hence, statement 1 is correct.

• The Minimum Reserve System is a token of confidence to the general public that the Indian government is liable to pay them as per the face value of the notes because the RBI governor promise to the public that “I promise to pay a the bearer a sum of 100/500 rupee.”

• Under the Minimum Reserve System, the RBI has to keep a minimum reserve of Rs 200 crore comprising of gold coin and gold bullion and foreign currencies. Out of the total Rs 200 crores, Rs115 crore should be in the form of gold coins or gold bullion. The purpose of shifting to MRS was to expand money supply to meet the needs of increasing transactions in the economy. Hence, statement 2 is incorrect.

• The minimum reserve is a token of confidence and doesn’t have any practical connection with the amount of new currencies issued by the RB Under the Minimum Reserve System, RBI can issue unlimited amount of currency by keeping the reserve. But RBI follows some principle or rule for issuing new currencies based upon economic growth and transaction needs of the people. Hence, statement 3 is correct.

Trend: RBI’s policy and instruments on Money supply (such as: CRR, SLR etc)

Approach: Basic concepts of Indian Financial System

Explanation:

Trend: RBI’s policy and instruments on Money supply (such as: CRR, SLR etc)

Approach: Basic concepts of Indian Financial System

• Question 7 of 30 7. Question 1 points With reference to the balance sheet of the RBI, consider the following: Government bonds Foreign currencies Gold Reserves Currency notes How many of the above are ‘liabilities’ of the RBI? a) Only one b) Only two c) Only three d) All four Correct Answer: a Explanation: Assets are things RBI owns or what it can claim from others. Liabilities for the RBI are its debts or what it owes to others. As of March 2023, domestic assets constituted 27.69% while the foreign currency assets and gold (including gold deposit and gold held in India) constituted 72.31% of total assets amounting to a total of Rs.63.45 lakh crore. Assets of RBI Liabilities of RBI Gold Coin and Bullion currency in circulation Foreign Currency Assets ( including SDRs and Reserve position of IMF) Deposits held by governments, banks and other financial institutions in the RBI Investment in Securities, bonds etc. Capital (paid-up capital by the government) Loans and Advances Other Liabilities and Provisions (Contingency Fund etc.) Investment in subsidiaries and associates Notes issued Bills purchased and Discounted (Treasury bills etc.) In RBI balance sheet Government Bonds, Loans given and other reserves are on the asset side. The currency that are under circulation is a liability of RBI since they have issued it with a promise that anyone bringing this currency will be paid equivalent amount. Notes Issued: The currency notes issued by the Reserve Bank are the Reserve Bank’s liability and this constitutes the liabilities of the Issue Department. Total notes issued are the sum of Notes in circulation and Notes held in Banking Department of the Bank. Notes in Circulation: The notes in circulation comprises the notes issued by Government of India up to 1935 and by the RBI since then, less notes held in the Banking Department, i.e. notes held outside Reserve Bank by the public, banks treasuries etc. The Government of India one rupee notes issued since July 1940 are treated as rupee coins and hence are not included under this head. Hence, option (a) is correct. Source: Financial Institutions- RBI Trend: RBI- Assets and liabilities Approach: Basic concepts of Indian Financial System Incorrect Answer: a Explanation: Assets are things RBI owns or what it can claim from others. Liabilities for the RBI are its debts or what it owes to others. As of March 2023, domestic assets constituted 27.69% while the foreign currency assets and gold (including gold deposit and gold held in India) constituted 72.31% of total assets amounting to a total of Rs.63.45 lakh crore. Assets of RBI Liabilities of RBI Gold Coin and Bullion currency in circulation Foreign Currency Assets ( including SDRs and Reserve position of IMF) Deposits held by governments, banks and other financial institutions in the RBI Investment in Securities, bonds etc. Capital (paid-up capital by the government) Loans and Advances Other Liabilities and Provisions (Contingency Fund etc.) Investment in subsidiaries and associates Notes issued Bills purchased and Discounted (Treasury bills etc.) In RBI balance sheet Government Bonds, Loans given and other reserves are on the asset side. The currency that are under circulation is a liability of RBI since they have issued it with a promise that anyone bringing this currency will be paid equivalent amount. Notes Issued: The currency notes issued by the Reserve Bank are the Reserve Bank’s liability and this constitutes the liabilities of the Issue Department. Total notes issued are the sum of Notes in circulation and Notes held in Banking Department of the Bank. Notes in Circulation: The notes in circulation comprises the notes issued by Government of India up to 1935 and by the RBI since then, less notes held in the Banking Department, i.e. notes held outside Reserve Bank by the public, banks treasuries etc. The Government of India one rupee notes issued since July 1940 are treated as rupee coins and hence are not included under this head. Hence, option (a) is correct. Source: Financial Institutions- RBI Trend: RBI- Assets and liabilities Approach: Basic concepts of Indian Financial System

#### 7. Question

With reference to the balance sheet of the RBI, consider the following:

• Government bonds

• Foreign currencies

• Gold Reserves

• Currency notes

How many of the above are ‘liabilities’ of the RBI?

• a) Only one

• b) Only two

• c) Only three

• d) All four

Explanation:

• Assets are things RBI owns or what it can claim from others. Liabilities for the RBI are its debts or what it owes to others.

• As of March 2023, domestic assets constituted 27.69% while the foreign currency assets and gold (including gold deposit and gold held in India) constituted 72.31% of total assets amounting to a total of Rs.63.45 lakh crore.

Assets of RBI | Liabilities of RBI

Gold Coin and Bullion | currency in circulation

Foreign Currency Assets ( including SDRs and Reserve position of IMF) | Deposits held by governments, banks and other financial institutions in the RBI

Investment in Securities, bonds etc. | Capital (paid-up capital by the government)

Loans and Advances | Other Liabilities and Provisions (Contingency Fund etc.)

Investment in subsidiaries and associates | Notes issued

Bills purchased and Discounted (Treasury bills etc.) |

(Contingency Fund etc.)

• In RBI balance sheet Government Bonds, Loans given and other reserves are on the asset side. The currency that are under circulation is a liability of RBI since they have issued it with a promise that anyone bringing this currency will be paid equivalent amount.

• Notes Issued: The currency notes issued by the Reserve Bank are the Reserve Bank’s liability and this constitutes the liabilities of the Issue Department. Total notes issued are the sum of Notes in circulation and Notes held in Banking Department of the Bank.

• Notes in Circulation: The notes in circulation comprises the notes issued by Government of India up to 1935 and by the RBI since then, less notes held in the Banking Department, i.e. notes held outside Reserve Bank by the public, banks treasuries etc. The Government of India one rupee notes issued since July 1940 are treated as rupee coins and hence are not included under this head.

• Hence, option (a) is correct.

Trend: RBI- Assets and liabilities

Approach: Basic concepts of Indian Financial System

Explanation:

• Assets are things RBI owns or what it can claim from others. Liabilities for the RBI are its debts or what it owes to others.

Assets of RBI | Liabilities of RBI

Gold Coin and Bullion | currency in circulation

Foreign Currency Assets ( including SDRs and Reserve position of IMF) | Deposits held by governments, banks and other financial institutions in the RBI

Investment in Securities, bonds etc. | Capital (paid-up capital by the government)

Loans and Advances | Other Liabilities and Provisions (Contingency Fund etc.)

Investment in subsidiaries and associates | Notes issued

Bills purchased and Discounted (Treasury bills etc.) |

(Contingency Fund etc.)

• Hence, option (a) is correct.

Trend: RBI- Assets and liabilities

Approach: Basic concepts of Indian Financial System

• Question 8 of 30 8. Question 1 points Consider the following statements with reference to deposit insurance in India: Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 for both principal and interest amount. Deposits up to a maximum of ₹ 5, 00,000 in branches of foreign banks functioning in India are insured. Deposits in Primary cooperative societies are not insured. Which of the above statements is/are correct? a) 1 and 2 only b) 1 and 3 only c) 2 and 3 only d) 1,2 and 3 Correct Answer: d Explanation: RBI has the responsibility to implement the deposit Insurance Scheme to ensure the protection of deposits of small depositors. Under this scheme, deposits are insured with the Deposit Insurance Guarantee Corporation set up by Reserve Bank of India. Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 (Rupees Five Lakhs) for both principal and interest amount. Hence, statement 1 is correct. All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. At present all co-operative banks are covered by the DICGC. Primary cooperative societies are not insured by the DICGC. Hence, statement 2 and 3 are correct. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. Following are not covered: Deposits of foreign Governments Deposits of Central/State Governments; Inter-bank deposits; Deposits of the State Land Development Banks with the State co-operative bank; Any amount due on account of and deposit received outside India If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank. Source: Indian Economy- Financial Bodies Trend: Features of financial bodies have been asked in UPSC Approach: Basic concepts of Indian Financial System Incorrect Answer: d Explanation: RBI has the responsibility to implement the deposit Insurance Scheme to ensure the protection of deposits of small depositors. Under this scheme, deposits are insured with the Deposit Insurance Guarantee Corporation set up by Reserve Bank of India. Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 (Rupees Five Lakhs) for both principal and interest amount. Hence, statement 1 is correct. All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. At present all co-operative banks are covered by the DICGC. Primary cooperative societies are not insured by the DICGC. Hence, statement 2 and 3 are correct. The DICGC insures all deposits such as savings, fixed, current, recurring, etc. Following are not covered: Deposits of foreign Governments Deposits of Central/State Governments; Inter-bank deposits; Deposits of the State Land Development Banks with the State co-operative bank; Any amount due on account of and deposit received outside India If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank. Source: Indian Economy- Financial Bodies Trend: Features of financial bodies have been asked in UPSC Approach: Basic concepts of Indian Financial System

#### 8. Question

Consider the following statements with reference to deposit insurance in India:

• Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 for both principal and interest amount.

• Deposits up to a maximum of ₹ 5, 00,000 in branches of foreign banks functioning in India are insured.

• Deposits in Primary cooperative societies are not insured.

Which of the above statements is/are correct?

• a) 1 and 2 only

• b) 1 and 3 only

• c) 2 and 3 only

• d) 1,2 and 3

Explanation:

• RBI has the responsibility to implement the deposit Insurance Scheme to ensure the protection of deposits of small depositors. Under this scheme, deposits are insured with the Deposit Insurance Guarantee Corporation set up by Reserve Bank of India.

• Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 (Rupees Five Lakhs) for both principal and interest amount. Hence, statement 1 is correct.

• All commercial banks including branches of foreign banks functioning in India, local area banks and regional rural banks are insured by the DICGC. At present all co-operative banks are covered by the DICGC. Primary cooperative societies are not insured by the DICGC. Hence, statement 2 and 3 are correct.

• The DICGC insures all deposits such as savings, fixed, current, recurring, etc.

• Following are not covered:

• Deposits of foreign Governments

• Deposits of Central/State Governments;

• Inter-bank deposits;

• Deposits of the State Land Development Banks with the State co-operative bank;

• Any amount due on account of and deposit received outside India

• If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank.

Trend: Features of financial bodies have been asked in UPSC

Approach: Basic concepts of Indian Financial System

Explanation:

• Each depositor in a bank is insured up to a maximum of ₹ 5, 00,000 (Rupees Five Lakhs) for both principal and interest amount. Hence, statement 1 is correct.

• The DICGC insures all deposits such as savings, fixed, current, recurring, etc.

• Following are not covered:

• Deposits of foreign Governments

• Deposits of Central/State Governments;

• Inter-bank deposits;

• Deposits of the State Land Development Banks with the State co-operative bank;

• Any amount due on account of and deposit received outside India

• If you have deposits with more than one bank, deposit insurance coverage limit is applied separately to the deposits in each bank.

Trend: Features of financial bodies have been asked in UPSC

Approach: Basic concepts of Indian Financial System

• Question 9 of 30 9. Question 1 points Who was the chairman of the Royal Commission on Indian Currency & Finance? a) James Wilson b) Robert Giffen c) William Petty d) Hilton Young Correct Answer: d Explanation: The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The central banking institution was established based on the suggestions of the “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as Hilton Young Commission. The Hilton Young Commission was a Commission of Inquiry appointed in 1926 to look into the possible closer union of the British territories in East and Central Africa. Hence, option (d) is correct. Source: Indian Economy Approach: Factual/knowledge based question Incorrect Answer: d Explanation: The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934. The central banking institution was established based on the suggestions of the “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as Hilton Young Commission. The Hilton Young Commission was a Commission of Inquiry appointed in 1926 to look into the possible closer union of the British territories in East and Central Africa. Hence, option (d) is correct. Source: Indian Economy Approach: Factual/knowledge based question

#### 9. Question

Who was the chairman of the Royal Commission on Indian Currency & Finance?

• a) James Wilson

• b) Robert Giffen

• c) William Petty

• d) Hilton Young

Explanation:

• The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

• The central banking institution was established based on the suggestions of the “Royal Commission on Indian Currency & Finance” in 1926. This commission was also known as Hilton Young Commission.

• The Hilton Young Commission was a Commission of Inquiry appointed in 1926 to look into the possible closer union of the British territories in East and Central Africa.

• Hence, option (d) is correct.

Approach: Factual/knowledge based question

Explanation:

• The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.

• The Hilton Young Commission was a Commission of Inquiry appointed in 1926 to look into the possible closer union of the British territories in East and Central Africa.

• Hence, option (d) is correct.

Approach: Factual/knowledge based question

• Question 10 of 30 10. Question 1 points With reference to ‘Green Deposits’, often seen in news, consider the following statements: A green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects. Scheduled commercial banks and Non-Banking Financial Companies (NBFCs) can offer green deposits to the customers. Which of the above statements is/are correct? a) 1 only b) 2 only c) Both 1 and 2 d) Neither 1 nor 2 Correct Answer: c Explanation: The Reserve Bank of India (RBI) has announced a new framework to offer green deposits to the customers, aiming at developing a Green Finance Ecosystem (GFS) in India. The framework will come into effect from June 1, 2023. A green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects. Just like a regular Fixed Deposit scheme, the green deposit pays interest to its investors and has a fixed term. The proceeds that a bank gets from deposit holders get earmarked for allocation to green finance. A green fixed deposit, also known as an environmentally friendly fixed deposit, is a financial instrument that encourages sustainable development by channelling funds towards projects focused on renewable energy, clean technology, or other environmentally beneficial initiatives. Hence, statement 1 is correct. The framework is applicable to Scheduled Commercial Banks, including Small Finance Banks, excluding Regional Rural Banks, Local Area Banks and Payments Banks and all deposit-taking Non-Banking Financial Companies (NBFCs), including Housing Finance Companies. Hence, statement 2 is correct. The current framework permits green deposits to be denominated in Indian Rupees only. The deposits raised under the framework are covered by Deposit Insurance and Credit Guarantee Corporation (DICGC) in accordance with the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and the regulations framed there under, as amended from time to time. On maturity, the green deposits would be renewed or withdrawn at the option of the depositor. Source: Current Affairs Trend: Terms in News Approach: factual/knowledge based question Incorrect Answer: c Explanation: The Reserve Bank of India (RBI) has announced a new framework to offer green deposits to the customers, aiming at developing a Green Finance Ecosystem (GFS) in India. The framework will come into effect from June 1, 2023. A green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects. Just like a regular Fixed Deposit scheme, the green deposit pays interest to its investors and has a fixed term. The proceeds that a bank gets from deposit holders get earmarked for allocation to green finance. A green fixed deposit, also known as an environmentally friendly fixed deposit, is a financial instrument that encourages sustainable development by channelling funds towards projects focused on renewable energy, clean technology, or other environmentally beneficial initiatives. Hence, statement 1 is correct. The framework is applicable to Scheduled Commercial Banks, including Small Finance Banks, excluding Regional Rural Banks, Local Area Banks and Payments Banks and all deposit-taking Non-Banking Financial Companies (NBFCs), including Housing Finance Companies. Hence, statement 2 is correct. The current framework permits green deposits to be denominated in Indian Rupees only. The deposits raised under the framework are covered by Deposit Insurance and Credit Guarantee Corporation (DICGC) in accordance with the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and the regulations framed there under, as amended from time to time. On maturity, the green deposits would be renewed or withdrawn at the option of the depositor. Source: Current Affairs Trend: Terms in News Approach: factual/knowledge based question

#### 10. Question

With reference to ‘Green Deposits’, often seen in news, consider the following statements:

• A green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects.

• Scheduled commercial banks and Non-Banking Financial Companies (NBFCs) can offer green deposits to the customers.

Which of the above statements is/are correct?

• c) Both 1 and 2

• d) Neither 1 nor 2

Explanation:

• The Reserve Bank of India (RBI) has announced a new framework to offer green deposits to the customers, aiming at developing a Green Finance Ecosystem (GFS) in India. The framework will come into effect from June 1, 2023.

• A green deposit is a fixed-term deposit for those who want to invest in environmentally friendly projects. Just like a regular Fixed Deposit scheme, the green deposit pays interest to its investors and has a fixed term.

• The proceeds that a bank gets from deposit holders get earmarked for allocation to green finance. A green fixed deposit, also known as an environmentally friendly fixed deposit, is a financial instrument that encourages sustainable development by channelling funds towards projects focused on renewable energy, clean technology, or other environmentally beneficial initiatives. Hence, statement 1 is correct.

• The framework is applicable to Scheduled Commercial Banks, including Small Finance Banks, excluding Regional Rural Banks, Local Area Banks and Payments Banks and all deposit-taking Non-Banking Financial Companies (NBFCs), including Housing Finance Companies. Hence, statement 2 is correct.

• The current framework permits green deposits to be denominated in Indian Rupees only.

• The deposits raised under the framework are covered by Deposit Insurance and Credit Guarantee Corporation (DICGC) in accordance with the Deposit Insurance and Credit Guarantee Corporation Act, 1961 and the regulations framed there under, as amended from time to time.

• On maturity, the green deposits would be renewed or withdrawn at the option of the depositor.

Trend: Terms in News

Approach: factual/knowledge based question

Explanation:

• The current framework permits green deposits to be denominated in Indian Rupees only.

• On maturity, the green deposits would be renewed or withdrawn at the option of the depositor.

Trend: Terms in News

Approach: factual/knowledge based question

• Question 11 of 30 11. Question 1 points Which of the following monetary aggregates represents the total liabilities of the central bank of the country? a) M0 b) M1 c) M2 d) M3 Correct Answer: a Explanation: In India, Reserve Bank of India (RBI), measures the money supply and publishes it on a fortnightly basis. From 1977 to 1998, RBI used five monetary aggregates – M0, M1, M2, and M3 and M4 – to measure money supply. The RBI started publishing a set of new monetary aggregates following the recommendations of the Working Group on Money Supply: Analytics and Methodology of Compilation (Chairman: Dr. Y.V. Reddy) which submitted its report in June 1998. M0 is also known as High-Powered Money, monetary base, and base money. The Components of Reserve Money (M0) are; Currency in Circulation + Bankers’ Deposits with RBI +`Other’ Deposits with RBI. Other’ Deposits with the Reserve Bank, includes deposits of government, deposits from foreign central banks, deposits from multilateral financial institutions like IMF etc. Therefore, M0 represents the total liabilities of the RBI. NM1 (Narrow Money) = Currency with the Public + Demand Deposits with the Banking System + ‘Other’ Deposits with RBI. NM2 =M1+ Certificates of Deposit issued by Banks + Term Deposits of residents with a maturity of up to one year with the Banking System. NM3 =M2+ Term Deposits of residents with a contractual maturity of over one year with the Banking System. Monetary aggregates M1, M2, M3 includes demand deposits and time deposits as well as certificates of deposits which are liabilities of commercial banks. Hence, option (a) is correct. Source: Indian Economy Trend: Basic concepts of money supply in Economy Approach: Knowledge based question Incorrect Answer: a Explanation: In India, Reserve Bank of India (RBI), measures the money supply and publishes it on a fortnightly basis. From 1977 to 1998, RBI used five monetary aggregates – M0, M1, M2, and M3 and M4 – to measure money supply. The RBI started publishing a set of new monetary aggregates following the recommendations of the Working Group on Money Supply: Analytics and Methodology of Compilation (Chairman: Dr. Y.V. Reddy) which submitted its report in June 1998. M0 is also known as High-Powered Money, monetary base, and base money. The Components of Reserve Money (M0) are; Currency in Circulation + Bankers’ Deposits with RBI +`Other’ Deposits with RBI. Other’ Deposits with the Reserve Bank, includes deposits of government, deposits from foreign central banks, deposits from multilateral financial institutions like IMF etc. Therefore, M0 represents the total liabilities of the RBI. NM1 (Narrow Money) = Currency with the Public + Demand Deposits with the Banking System + ‘Other’ Deposits with RBI. NM2 =M1+ Certificates of Deposit issued by Banks + Term Deposits of residents with a maturity of up to one year with the Banking System. NM3 =M2+ Term Deposits of residents with a contractual maturity of over one year with the Banking System. Monetary aggregates M1, M2, M3 includes demand deposits and time deposits as well as certificates of deposits which are liabilities of commercial banks. Hence, option (a) is correct. Source: Indian Economy Trend: Basic concepts of money supply in Economy Approach: Knowledge based question

#### 11. Question

Which of the following monetary aggregates represents the total liabilities of the central bank of the country?

Explanation:

• In India, Reserve Bank of India (RBI), measures the money supply and publishes it on a fortnightly basis.

• From 1977 to 1998, RBI used five monetary aggregates – M0, M1, M2, and M3 and M4 – to measure money supply.

• The RBI started publishing a set of new monetary aggregates following the recommendations of the Working Group on Money Supply: Analytics and

Methodology of Compilation (Chairman: Dr. Y.V. Reddy) which submitted its report in June 1998.

• M0 is also known as High-Powered Money, monetary base, and base money.

• The Components of Reserve Money (M0) are; Currency in Circulation + Bankers’ Deposits with RBI +`Other’ Deposits with RBI.

• Other’ Deposits with the Reserve Bank, includes deposits of government, deposits from foreign central banks, deposits from multilateral financial institutions like IMF etc.

• Therefore, M0 represents the total liabilities of the RBI.

• NM1 (Narrow Money) = Currency with the Public + Demand Deposits with the Banking System + ‘Other’ Deposits with RBI.

• NM2 =M1+ Certificates of Deposit issued by Banks + Term Deposits of residents with a maturity of up to one year with the Banking System.

• NM3 =M2+ Term Deposits of residents with a contractual maturity of over one year with the Banking System.

• Monetary aggregates M1, M2, M3 includes demand deposits and time deposits as well as certificates of deposits which are liabilities of commercial banks.

• Hence, option (a) is correct.

Trend: Basic concepts of money supply in Economy

Approach: Knowledge based question