Indian Financial System – 50 MCQs for JKSSB Accounts Exams
(Home Academy – Concept Based with Explanation)
These MCQs cover important areas of the Indian financial system such as the central bank, financial institutions, banking structure, money market, capital market, government funds, and constitutional provisions. These topics are frequently asked in JKSSB Accounts Assistant, CA, Banking, and Finance exams.
Question 1
The central bank of India is the **Reserve Bank of India.
A. State Bank of India
B. Reserve Bank of India
C. NABARD
D. SEBI
Answer: B
Explanation: RBI is the apex monetary authority that regulates the Indian financial system.
Question 2
The Reserve Bank of India was established in:
A. 1930
B. 1935
C. 1947
D. 1950
Answer: B
Explanation: RBI was established in 1935 under the RBI Act 1934.
Question 3
The headquarters of the Reserve Bank of India is located in:
A. Delhi
B. Kolkata
C. Mumbai
D. Chennai
Answer: C
Explanation: RBI headquarters shifted from Kolkata to Mumbai in 1937.
Question 4
Which institution regulates the securities market in India?
A. RBI
B. SEBI
C. NABARD
D. SIDBI
Answer: B
Explanation: The **Securities and Exchange Board of India regulates the stock market and protects investors.
Question 5
The banker to the Government of India is:
A. SBI
B. RBI
C. SEBI
D. NABARD
Answer: B
Explanation: RBI acts as banker, agent, and advisor to the government.
Question 6
The banking sector in India is regulated by:
A. RBI
B. SEBI
C. Ministry of Commerce
D. NABARD
Answer: A
Explanation: RBI supervises and regulates banks.
Question 7
The first commercial bank of India was:
A. Bank of Hindustan
B. SBI
C. Punjab National Bank
D. Allahabad Bank
Answer: A
Explanation: Bank of Hindustan was established in 1770.
Question 8
The largest commercial bank in India is:
A. HDFC Bank
B. ICICI Bank
C. State Bank of India
D. Punjab National Bank
Answer: C
Explanation: **State Bank of India is the largest public sector bank.
Question 9
The Indian money market deals with:
A. Long-term funds
B. Medium-term funds
C. Short-term funds
D. Foreign exchange
Answer: C
Explanation: Money market deals with funds with maturity less than one year.
Question 10
Capital market deals with:
A. Short-term funds
B. Long-term funds
C. Foreign exchange
D. Consumer loans
Answer: B
Explanation: Capital market provides long-term finance.
Question 11
Which institution regulates insurance in India?
A. SEBI
B. RBI
C. IRDAI
D. NABARD
Answer: C
Explanation: **Insurance Regulatory and Development Authority of India regulates the insurance sector.
Question 12
The Consolidated Fund of India is mentioned in:
A. Article 110
B. Article 266
C. Article 267
D. Article 112
Answer: B
Explanation: Article 266 of the **Constitution of India establishes the Consolidated Fund.
Question 13
The Contingency Fund of India is mentioned in:
A. Article 267
B. Article 112
C. Article 114
D. Article 110
Answer: A
Explanation: Article 267 provides for the contingency fund.
Question 14
The Union Budget is presented in:
A. Lok Sabha
B. Rajya Sabha
C. Supreme Court
D. RBI
Answer: A
Explanation: Budget is introduced in the Lok Sabha.
Question 15
The Union Budget is prepared by:
A. RBI
B. Ministry of Finance
C. Planning Commission
D. Finance Commission
Answer: B
Explanation: Budget preparation is done by the **Ministry of Finance.
Question 16
Which fund of the Government of India is used for emergency expenditure?
A. Consolidated Fund
B. Public Account
C. Contingency Fund
D. Finance Account
Answer: C
Explanation: Contingency Fund is used for urgent and unforeseen expenditure.
Question 17
The Public Account of India includes:
A. Tax revenue
B. Borrowings
C. Provident funds
D. Capital receipts
Answer: C
Explanation: Public account includes funds where government acts as trustee.
Question 18
Which institution audits government accounts?
A. RBI
B. Finance Commission
C. CAG
D. SEBI
Answer: C
Explanation: The **Comptroller and Auditor General of India audits government accounts.
Question 19
Government accounts are maintained by:
A. RBI
B. Controller General of Accounts
C. SEBI
D. NABARD
Answer: B
Explanation: The **Controller General of Accounts maintains government accounts.
Question 20
NABARD mainly supports:
A. Industrial finance
B. Agricultural finance
C. Export finance
D. Stock market
Answer: B
Explanation: **National Bank for Agriculture and Rural Development promotes rural development.
Question 21
SIDBI provides finance for:
A. Agriculture
B. Small industries
C. Export trade
D. Insurance
Answer: B
Explanation: **Small Industries Development Bank of India promotes MSMEs.
Question 22
Which institution regulates pension funds in India?
A. RBI
B. SEBI
C. PFRDA
D. NABARD
Answer: C
Explanation: **Pension Fund Regulatory and Development Authority regulates pension funds.
Question 23
Treasury Bills are issued by:
A. RBI
B. Government of India
C. SEBI
D. SBI
Answer: B
Explanation: Treasury Bills are short-term government securities.
Question 24
Which market deals in shares and debentures?
A. Money market
B. Capital market
C. Commodity market
D. Forex market
Answer: B
Explanation: Capital market deals with long-term securities.
Question 25
The Indian stock market is regulated by:
A. RBI
B. SEBI
C. SBI
D. NABARD
Answer: B
Explanation: SEBI ensures transparency and investor protection.
Question 26
Which bank acts as banker to banks?
A. RBI
B. SBI
C. NABARD
D. ICICI
Answer: A
Explanation: RBI provides financial assistance to banks.
Question 27
Repo rate is decided by:
A. RBI
B. SEBI
C. Ministry of Finance
D. NABARD
Answer: A
Explanation: Repo rate is a monetary policy tool of RBI.
Question 28
Reverse repo rate refers to:
A. RBI borrowing from banks
B. Banks borrowing from RBI
C. Government borrowing
D. International borrowing
Answer: A
Explanation: Reverse repo rate is the rate at which RBI borrows from banks.
Question 29
Which institution manages India's foreign exchange reserves?
A. SBI
B. RBI
C. SEBI
D. NABARD
Answer: B
Explanation: RBI manages forex reserves.
Question 30
Which committee recommends distribution of taxes between centre and states?
A. Planning Commission
B. Finance Commission
C. RBI
D. SEBI
Answer: B
Explanation: The **Finance Commission of India recommends tax distribution.
Question 31
The term “bank rate” refers to:
A. Interest on deposits
B. Rate at which RBI lends to banks
C. Loan interest rate
D. Tax rate
Answer: B
Explanation: Bank rate is the long-term lending rate of RBI.
Question 32
Which financial institution promotes exports?
A. NABARD
B. EXIM Bank
C. SIDBI
D. RBI
Answer: B
Explanation: **Export-Import Bank of India finances export and import trade.
Question 33
The apex body for regulating mutual funds is:
A. RBI
B. SEBI
C. IRDAI
D. NABARD
Answer: B
Explanation: Mutual funds are regulated by SEBI.
Question 34
Which system tracks government fund flow electronically?
A. GSTN
B. PFMS
C. SEBI
D. RBI
Answer: B
Explanation: **Public Financial Management System monitors government expenditure.
Question 35
Which financial market deals in foreign currencies?
A. Capital market
B. Forex market
C. Money market
D. Commodity market
Answer: B
Explanation: Forex market deals with foreign exchange trading.
Question 36
The first development bank of India was:
A. NABARD
B. IDBI
C. SIDBI
D. IFCI
Answer: D
Explanation: **Industrial Finance Corporation of India was established in 1948.
Question 37
Which bank was nationalized first in India?
A. SBI
B. PNB
C. Bank of India
D. RBI
Answer: A
Explanation: SBI was nationalized in 1955.
Question 38
Which organization regulates pension sector?
A. PFRDA
B. SEBI
C. RBI
D. IRDAI
Answer: A
Explanation: PFRDA regulates pension funds.
Question 39
The apex regulatory body of the banking sector is:
A. SEBI
B. RBI
C. NABARD
D. SBI
Answer: B
Explanation: RBI supervises banks.
Question 40
The capital market mainly deals with:
A. Short-term loans
B. Long-term investments
C. Cash transactions
D. Consumer loans
Answer: B
Explanation: Capital market provides long-term finance.
Question 41
Which institution protects investors in securities markets?
A. RBI
B. SEBI
C. NABARD
D. PFRDA
Answer: B
Explanation: SEBI safeguards investor interests.
Question 42
Which bank is known as the banker’s bank?
A. RBI
B. SBI
C. ICICI
D. PNB
Answer: A
Explanation: RBI provides liquidity support to banks.
Question 43
The Finance Commission is constituted under:
A. Article 280
B. Article 266
C. Article 112
D. Article 110
Answer: A
Explanation: Article 280 of the Constitution establishes the Finance Commission.
Question 44
Which market deals with treasury bills and commercial papers?
A. Capital market
B. Money market
C. Commodity market
D. Forex market
Answer: B
Explanation: These are short-term instruments.
Question 45
Commercial banks mainly accept:
A. Deposits
B. Shares
C. Bonds
D. Taxes
Answer: A
Explanation: Accepting deposits is the primary function of banks.
Question 46
Which body manages monetary policy in India?
A. RBI
B. Finance Ministry
C. SEBI
D. NABARD
Answer: A
Explanation: RBI controls monetary policy.
Question 47
Which institution supervises cooperative banks?
A. RBI
B. SEBI
C. NABARD
D. PFRDA
Answer: A
Explanation: RBI supervises banking regulation including cooperative banks.
Question 48
Which institution regulates pension schemes like NPS?
A. SEBI
B. PFRDA
C. RBI
D. NABARD
Answer: B
Explanation: PFRDA regulates the National Pension System.
Question 49
The Indian financial system consists of:
A. Financial institutions
B. Financial markets
C. Financial instruments
D. All of these
Answer: D
Explanation: Financial system includes institutions, markets, and instruments.
Question 50
The apex institution for rural credit is:
A. RBI
B. NABARD
C. SIDBI
D. SBI
Answer: B
Explanation: NABARD promotes agricultural and rural development.