RBI MCQ Quiz - Objective Question with Answer for RBI - Download Free PDF

Last updated on May 16, 2025

The Reserve bank of India is the largest bank in India. It works as the regulatory authority for the banks. It also works as a banking institution for the government. It works as a bridge between banks and the government also. RBI will conduct surveys and supervision in the area - the right to privacy, right to fair treatment & transparency, fair & honest dealing, right to suitability & right to grievance redress & compensation to regulate the banks and consumers. Various rates ( Repo Rate, Reverse repo Rate), Economic surveys, the currency issue, and much more work done by RBI. The question on RBI contains the Power, Working, and history related to the RBI. The head of the RBI is Known as the governor of the Indian reserve bank. In the current affair section, question about RBI Governer, Recent Policies, and Decisions taken is asked. In the History of RBI, the establishment date and the game-changing decisions were asked. The power of RBI like how it can control and not control the bank and financial institutions, which policies were made, and how it works is asked in the baking and financial sectors.

Latest RBI MCQ Objective Questions

RBI Question 1:

In which year was the Reserve Bank of India established ?

  1. 1930
  2. 1931
  3. 1935
  4. 1940

Answer (Detailed Solution Below)

Option 3 : 1935

RBI Question 1 Detailed Solution

The correct answer is - 1935

Key Points

  • Year of Establishment
    • The Reserve Bank of India (RBI) was established on April 1, 1935, under the Reserve Bank of India Act, 1934.
    • Its formation was a result of recommendations made by the Hilton Young Commission, which aimed to create a central bank for India.
  • Purpose of Establishment
    • The RBI was created to regulate the issue of banknotes, maintain monetary stability, and operate the credit and currency system in India.
    • It serves as the central bank responsible for managing India's monetary policy and financial framework.
  • Initial Setup
    • Initially, the RBI was headquartered in Kolkata, but it was moved to Mumbai in 1937.
    • It started as a privately-owned institution and later became fully owned by the Indian government in 1949.

Additional Information

  • Hilton Young Commission
    • The commission was formed in 1926 to examine banking and financial systems in India.
    • It recommended the establishment of a central bank to improve India's financial structure and economy.
  • Nationalization of RBI
    • In 1949, the RBI was nationalized, and ownership was transferred to the Government of India.
    • Nationalization aimed to ensure better control over monetary policies and align the central bank's operations with government goals.
  • Key Functions of RBI
    • Formulating and implementing monetary policy to maintain price stability and economic growth.
    • Regulating and supervising banks and other financial institutions.
    • Managing foreign exchange and acting as the custodian of India's foreign currency reserves.
    • Issuing and regulating the supply of Indian currency.
  • Other Related Facts
    • The RBI emblem features a tiger and a palm tree, symbolizing India's strength and agricultural heritage.
    • It plays a vital role in India's economic stability and development.

RBI Question 2:

Reserve Bank Staff College is situated at

  1. Mumbai
  2. New Delhi
  3. Kolkata
  4. Chennai

Answer (Detailed Solution Below)

Option 4 : Chennai

RBI Question 2 Detailed Solution

The correct answer is Chennai.

Key Points

  • The Reserve Bank Staff College (RBSC) is located in Chennai, Tamil Nadu, India.
  • RBSC was established by the Reserve Bank of India in 1963 to provide training to its officers.
  • The college focuses on delivering high-quality training programs on banking, finance, and economic policies.
  • RBSC caters primarily to RBI officials but also conducts training programs for other financial institutions.
  • Its location in Chennai makes it accessible to financial professionals in southern India.

Additional Information

  • Reserve Bank of India (RBI):
    • RBI is India’s central bank, established in 1935 under the Reserve Bank of India Act, 1934.
    • It is responsible for regulating the monetary policy of India and managing the country’s currency issuance.
    • RBI’s headquarters is in Mumbai, Maharashtra.
    • The bank plays a crucial role in maintaining financial stability in India.
  • Training and Development in RBI:
    • RBI operates multiple training institutes, including the Reserve Bank Staff College and the College of Agricultural Banking in Pune.
    • These institutes specialize in developing human resources for the banking and financial sectors.
    • Training programs cover topics such as monetary policy, financial management, and banking regulations.
  • Chennai as a Financial Hub:
    • Chennai is one of India’s major financial and economic centers.
    • It houses several banks, financial institutions, and educational institutions specializing in finance and economics.
    • The city is also known for its thriving IT and service industries.
  • Other RBI Training Institutes:
    • National Institute of Bank Management (NIBM), Pune – focuses on banking leadership and research.
    • Indira Gandhi Institute of Development Research (IGIDR), Mumbai – specializes in economic research and policy-making.
    • Institute for Development and Research in Banking Technology (IDRBT), Hyderabad – focuses on banking technology and innovation.

RBI Question 3:

Which of the following is not an area designated by RBI with respect to consumer rights relating to banking services?

  1. Fair treatment and transparency
  2. Fair and honest dealing
  3. Right to maximum interest 
  4. More than one of the above
  5. None of the above

Answer (Detailed Solution Below)

Option 3 : Right to maximum interest 

RBI Question 3 Detailed Solution

The areas on which the RBI will be conducting surveys and supervision are - right to privacy, right to fair treatment & transparency, fair & honest dealing, right to suitability & right to grievance redress & compensation.

RBI Question 4:

Which year did the nationalization of Banks take place in India?

  1. 1952
  2. 1961
  3. 1969
  4. 1978

Answer (Detailed Solution Below)

Option 3 : 1969

RBI Question 4 Detailed Solution

The correct answer is 1969.

Key Points

  • The nationalization of banks in India took place in 1969 when the government of India decided to nationalize 14 major private banks.
  • This move was aimed at expanding banking infrastructure and providing credit to various priority sectors such as agriculture, small industries, and exports.
  • The nationalization was initiated under the leadership of then Prime Minister Indira Gandhi.
  • The main objective was to spread banking facilities to rural areas and to ensure that banking services reached every corner of the country.

RBI Question 5:

The Reserve Bank of India was nationalised with effect from 1st January, _______. on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.

  1. 1971
  2. 1956
  3. 1949
  4. 1955
  5. None of the above

Answer (Detailed Solution Below)

Option 3 : 1949

RBI Question 5 Detailed Solution

The correct answer is 1949.

  • RBI was nationalized in the year 1949.

Key Points

  • ​Reserve Bank of India (RBI):
    • RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935, with the enactment of the RBI Act, 1934.
    • It was nationalized on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.
    • Its first Governor was C.D. Deshmukh.
    • The headquarters of RBI is in Mumbai.
    • Current governor of RBI is Sanjay Malhotra

Additional Information

  • Quantitative/General Credit Control
    • The quantitative credit control consists of:
      • Bank Rate:
        • It is also called the rediscount rate. It is the rate, at which the RBI gives finance to commercial banks.
      • Cash Reserve Ratio (CRR):
        • The RBI (Amendment) Bill, 2006, empowers RBI to prescribe CRR–Cash that banks deposit with the RBI without any floor rate or ceiling rate.
      • Statutory Liquidity Ratio (SLR):
        • It is the ratio of a liquid asset, which all commercial banks have to keep in the form of cash, gold, and unencumbered approved securities equal to not more than 40% of their total demand and time deposit liabilities (ranges is 25‑40%).
      • Repo Rate:
        • It is the rate, at which RBI lends short-term money to the bank against securities.
      • Reverse Repo Rate:
        • It is the rate, at which banks park short-term excess liquidity with the RBI.
      • Open Market Operations (OMOs):
        • Under OMOs, the RBI sells G-securities in the market.
  • Quantitative credit controls are used to control the volume of credit and indirectly to control the inflationary and deflationary pressures caused by expansion and contraction of credit.

Top RBI MCQ Objective Questions

Who is the only Prime Minister to have served as the Governor of RBI?

  1. P.V. Narsimha Rao
  2. Manmohan Singh
  3. Lal Bahadur Shastri
  4. Indira Gandhi

Answer (Detailed Solution Below)

Option 2 : Manmohan Singh

RBI Question 6 Detailed Solution

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The correct answer is option 2 i.e Manmohan Singh.

  • Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI.
  • He was the Governor of RBI from 1982-1985.


Facts to remember about RBI:

  • 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 Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
  • Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
  • The Reserve Bank of India (RBI) is India's central bank, which controls the issue and supply of the Indian rupee.
  • RBI is the regulator of the entire Banking in India.
  • Shaktikanta Das is the current governor of RBI.
  • RBI's headquarters are in Mumbai. The RBI has four zonal offices at Chennai, Delhi, Kolkata and Mumbai.

Reserve Bank of India was established in which year?

  1. 1934
  2. 1935
  3. 1936
  4. 1937

Answer (Detailed Solution Below)

Option 2 : 1935

RBI Question 7 Detailed Solution

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Reserve Bank of India was established in the year 1935 after the recommendation of the Royal Commission under the chairmanship of Hilton Young.

  • It was set up in 1935 under the Reserve Bank of India Act,1934.
  • Until the Monetary Policy Committee was established in 2016, it also controlled monetary policy in India.
  • The Reserve Bank of India is India's central bank, which controls the issue and supply of the Indian rupee.
  • RBI was established in Calcutta but was moved to Bombay in 1937.

Reserve Bank Staff College is situated at

  1. Mumbai
  2. New Delhi
  3. Kolkata
  4. Chennai

Answer (Detailed Solution Below)

Option 4 : Chennai

RBI Question 8 Detailed Solution

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The correct answer is Chennai.

Reserve Bank Staff College is situated in Chennai.

Key Points

  • Reserve Bank Staff College
    • It was established on July 03, 1963.
    • It is in Chennai.
    • It is the apex training college of the Reserve Bank of India, actively contributing to the knowledge enhancement endeavours of the Bank. 

Additional Information

  • The Reserve Bank of India
    • India's central bank.
    • It is a regulatory body.

In which year was the RBI nationalised?

  1. 1971
  2. 1956
  3. 1949
  4. 1935

Answer (Detailed Solution Below)

Option 3 : 1949

RBI Question 9 Detailed Solution

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The correct answer is 1949.

  • RBI was nationalized in the year 1949.

Key Points

  • ​Reserve Bank of India (RBI):
    • RBI was set up on the basis of the Hilton Young Commission recommendation in April 1935, with the enactment of the RBI Act, 1934.
    • It was nationalized on the basis of the Reserve Bank of India (Transfer to Public Ownership) Act, 1948.
    • Its first Governor was C.D. Deshmukh.
    • The headquarters of RBI is in Mumbai.
    • Current governor of RBI is Shaktikanta Das.

Additional Information

  • Quantitative/General Credit Control
    • The quantitative credit control consists of:
      • Bank Rate:
        • It is also called the rediscount rate. It is the rate, at which the RBI gives finance to commercial banks.
      • Cash Reserve Ratio (CRR):
        • The RBI (Amendment) Bill, 2006, empowers RBI to prescribe CRR–Cash that banks deposit with the RBI without any floor rate or ceiling rate.
      • Statutory Liquidity Ratio (SLR):
        • It is the ratio of a liquid asset, which all commercial banks have to keep in the form of cash, gold, and unencumbered approved securities equal to not more than 40% of their total demand and time deposit liabilities (ranges is 25‑40%).
      • Repo Rate:
        • It is the rate, at which RBI lends short-term money to the bank against securities.
      • Reverse Repo Rate:
        • It is the rate, at which banks park short-term excess liquidity with the RBI.
      • Open Market Operations (OMOs):
        • Under OMOs, the RBI sells G-securities in the market.
  • Quantitative credit controls are used to control the volume of credit and indirectly to control the inflationary and deflationary pressures caused by expansion and contraction of credit.

Who is the present Governor of RBI of India (As of Sep 2022)?

  1. V.V. Chari
  2. Raghuram Rajan
  3. Shaktikanta Das
  4. Urjit patel

Answer (Detailed Solution Below)

Option 3 : Shaktikanta Das

RBI Question 10 Detailed Solution

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The correct answer is Shaktikanta Das.

  • He is the present governor of RBI of India.

Key Points

  • He is the 25th governor of RBI. Shaktikanta Das was born on 26 February 1957.
  • He is a retired 1980 batch Indian Administrative Service (IAS) officer of Tamil Nadu.
  • He was earlier a member of the Fifteenth Finance Commission and India's Sherpa to the G20.
  • Urjit Patel was the former governor of RBI.
  • Urjit Patel is an Indian economist, who served as the 24th Governor of the Reserve Bank of India from 4 September 2016 to 10 December 2018.

 The legal provisions governing the management of foreign exchange reserves are laid down in the Reserve Bank of India Act, ______.

  1. 1947
  2. 1934
  3. 1923
  4. 1971

Answer (Detailed Solution Below)

Option 2 : 1934

RBI Question 11 Detailed Solution

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The correct answer is 1934.

  • The legal provisions governing the management of foreign exchange reserves are laid down in the Reserve Bank of India Act,1934.

Key Points

  • The Reserve Bank of India Act 1934, provides the overarching legal framework for the deployment of reserves in different foreign currencies assets, and gold within the broad parameters of currencies, instruments, issuers, and counterparties.
  • The guiding objectives of foreign exchange reserve management in India are similar to those of many central banks in the world.
  • RBI Act was passed in 1934.

Additional Information

  • RBI is known as the 'Central Bank of India' whose primary function is to regulate the issue of Banknotes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country.
  • RBI  was set up on the recommendation of the Hilton Young Commission also called the Royal Commission in 1926.
  • It was established on 1st April 1935.
  • RBI was nationalized on 1st January 1949.
  • RBI issues all currency notes except one rupee.
  • The signature of the RBI Governor on the notes is in English and Hindi.
  • The currency notes except one rupee hold the signature of the RBI Governor.
  • One rupee holds the signature of the Finance Secretary.

Important Points

  • Present and 25th Governor of RBI - Shakthikanta Das (As of March 2022).
  • Deputy Governors of RBI - T. Rabi Sankar, S. M. K Jain, M. D. Patra, and M. Rajeshwar Rao.
  • The first Governor of RBI -  Sir Osborne Smith.
  • The first Indian Governor of RBI - C. D. Deshmukh.
  • The longest-serving RBI Governor - Benegal Rama Rao.
  • Headquarter of RBI - Mumbai.

Who is the "lender of the last resort" in India?

  1. SBI
  2. RBI
  3. NABARD
  4. SEBI

Answer (Detailed Solution Below)

Option 2 : RBI

RBI Question 12 Detailed Solution

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Banks are required to maintain a portion of their demand and time liabilities as cash reserves with the Reserve Bank.

  • For this purpose, they need to maintain a current account with the Reserve Bank.
  • The current account of the banks is opened by the Banking Departments of the Reserve Bank’s Regional offices.
  • The Department of Government and Bank Accounts (DGBA) issues general guidelines for opening the current accounts.

Important Points 

As a Banker to Banks, the Reserve Bank also acts as the ‘lender of the last resort'.

  • It can come to the rescue of a bank that is solvent but faces temporary liquidity problems by supplying it with much-needed liquidity when no one else is willing to extend credit to that bank.
  • The Reserve Bank extends this facility to protect the interest of the depositors of the bank and to prevent possible failure of the bank, which in turn may also affect other banks and institutions and can have an adverse impact on financial stability and thus on the economy.

Thus, RBI is the correct answer.

Which of these institutions fixes the Repo Rate and the Reverse Repo Rate in India?

  1. Ministry of Finance
  2. State Bank of India
  3. Comptroller and Auditor General of India
  4. Reserve Bank of India

Answer (Detailed Solution Below)

Option 4 : Reserve Bank of India

RBI Question 13 Detailed Solution

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The correct answer is option 4:

  • Reserve Bank of India (RBI) is responsible for fixing Repo or Reverse Repo Rate.
  • RBI regulates these rates as a part of its monetary policy.
  • Monetary policy refers to the steps undertaken by the central bank to control the liquidity and supply of money in the market.
  • Repo Rate: It is an Acronym for the Repurchasing Agreement Rate. It is the rate at which RBI lends money to other banks in the country for the short term.
  • Reverse Repo Rate: When banks deposit their surplus funds with RBI for a short term, the rate then offered by RBI is called Reverse Repo Rate.

Reserve Bank of India (RBI):

  • It was established on April 1, 1935, under the RBI Act 1934, but as a private bank.
  • RBI was nationalized in 1949.
  • It is the apex banking institute of India.

When was Reserve Bank of India established?

  1. April 1948
  2. April 1935
  3. April 1945
  4. April 1936

Answer (Detailed Solution Below)

Option 2 : April 1935

RBI Question 14 Detailed Solution

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The correct answer is April 1935.

Key Points

  • The Reserve Bank of India was established in April 1935.
  • The RBI was nationalised on 1 January 1949.
  • The Reserve Bank of India controls the issue and supply of the Indian rupee.
  • It is basically the regulator of the Banking system in India. It strategizes monetary policy in India to control Inflation and money supply.
  • The primary functions of the RBI include-
    • Formulates, implements and monitors the monetary policy
    • Regulator and supervisor of the financial system
    • Manager of Foreign Exchange
    • Issuer of currency
    • Regulator and Supervisor of Payment and Settlement Systems
  • Sir Osborne A Smith was the first governor of the Reserve Bank of India.
  • He held the post of governor from 1 April 1935 to 30 June 1937.
  • Shri Shaktikanta Das is the present Governor of the RBI.
  • He assumed charge as the 25th Governor of the Reserve Bank of India effective from December 12, 2018.

The technique used for printing ‘RESERVE BANK OF INDIA’ appearing on the face of the Indian currency notes is 

  1. Intaglio printing
  2. Micro lettering 
  3. Latent printing
  4. Screen printing

Answer (Detailed Solution Below)

Option 1 : Intaglio printing

RBI Question 15 Detailed Solution

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Intaglio printing is the opposite of relief printing, in that the printing is done from ink that is below the surface of the plate. The design is cut, scratched, or etched into theprinting surface or plate, which can be copper, zinc, aluminum, magnesium, plastics, or even coated paper.

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