[Mission 2023] QUIZ : Insights Current Affairs Quiz , 24 June 2022 – INSIGHTSIAS

Solution: d)

Reserve Bank of India (RBI) has decided to increase the existing limits on individual housing loans provided by cooperative banks, taking into account the rise in housing prices since the limits were last revised and considering customers’ needs for larger loans.

Accordingly, the limits for tier 1/tier 2 urban cooperative banks (UCBs) stood revised from ₹30 lakh/ ₹70 lakh to ₹60 lakh/ ₹140 lakh, respectively, the RBI said.

As regards rural cooperative banks (RCBs), the limits have been increased from ₹20 lakh to ₹50 lakh for RCBs.

India Post Payments Bank (IPPB) will offer housing loans through nearly 190,000 banking service providers (Postmen and Gramin Dak Sevaks).

Small Finance Bank also offers home loans.

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Solution: c)

First Narasimham Committee Report:

• Presented in 1991.
• It recommended the creation of a four-tier banking structure with three large banks on top.
• It also introduced the concept of rural-focused banks such as local area banks.
• It proposed a phased reduction in banks’ mandatory bond investment and cash reserve limits so that banks lend money for other productive needs of the economy.
• It introduced the concept of capital adequacy ratio and proposed the abolition of the branch licensing policy.
• The concepts of non-performing assets classification and full disclosure of accounts were also recommended by the first committee.
• By proposing to deregulate interest rates, it brought in gre­ater competition among banks.
• The committee introduced the concept of an asset reconstruction fund to take over bad debts.

Committee on Comprehensive Financial Services for Small Businesses and Low-Income Households (commonly known as the Nachiket Mor Committee) introduced the concept of differentiated banks such as small finance banks.

Solution: c)

The UNECE Convention on Access to Information, Public Participation in Decision-making and Access to Justice in Environmental Matters, usually known as the Aarhus Convention, was signed on 25 June 1998 in the Danish city of Aarhus. It entered into force on 30 October 2001. All of the ratifying states are in Europe and Central Asia.

The Aarhus Convention grants the public rights regarding access to information, public participation and access to justice, in governmental decision-making processes on matters concerning the local, national and transboundary environment. It focuses on interactions between the public and public authorities.

Solution: a)

Inflation is the rate at which prices rise. A 2% inflation implies the general price level in April this year was 2% more than what it was in April last year. A “rising” inflation rate implies that the rate (at which the prices rise) itself is increasing. 

The technical definition of a recession requires an economy to contract for two consecutive quarters; a quarter is a period of three months.

Inflation expectations refers to people’s (or households’ expectation of what the inflation rate will be in the future). And they matter because this expectation is what determines people’s economic behaviour.

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Solution: c)

A credit line is a preset borrowing limit that allows an individual or a business access to credit at any time, as per need. It can be tapped into by the customer till the limit offered is not exceeded. It is like a flexible loan as against a lump-sum loan where a fixed amount is borrowed.

The Reserve bank of India has asked non-bank prepaid instruments (PPIs) issuers to not load these with a credit line, a preset borrowing limit.

The signal from India’s central bank seems to be that it wants to put a full stop to buy-now-pay-later (BNPL) wallets which typically tie-up with banks or Non-Banking Financial Companies (NBFC) and offer credit lines or a short loan into the prepaid wallet. The problem is that many times users don’t realise the wallet amount is a loan and end up paying a high interest for the money spent.

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