MAY 2022 TO JUNE 2022

Prelims 2019 Prelims 2022

The Chairman of public sector banks are selected by
the
(a) Banks Board Bureau
(b) Reserve Bank of India
(c) Union Ministry of Finance
(d) Management of concerned bank
With reference to the ‘Banks Board Bureau (BBB)’, which of
the following statements are correct?
1. The Governor of RBI is the Chairman of BBB.
2. The BBB recommends for the selection of heads for
Public Sector Banks.
3. The BBB helps the Public Sector Banks in developing
strategies and capital raising plans.

Select the correct answer using the code given below:

(a) 1 and 2 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
 Details about Financial Services Institutions Bureau (FSIB)
Establishment Non-Statutory body under Nationalised Banks (Management and Miscellaneous Provisions) Scheme.
Nodal Department Department of Financial Services, Ministry of Finance.
Functions: • Recommend persons for appointment as whole-time directors (WTDs) and non-executive chairpersons (NECs)
on the Boards of Directors in Public Sector Banks (PSBs), Public Sector insurance companies (PSIs) and
selected financial institutions (FIs) such as NABARD, NHB, SIDBI, EXIM, IFCI, IIFCL etc.
• Advise the Government on matters relating to appointments, transfer or extension of term of office and
termination of services of the said directors.
• Advise the Government on the desired management structure at the Board level for PSBs, FIs and PSIs;
• Advise the Government on a suitable performance appraisal system
• Build a databank containing data related to the performance of PSBs, FIs and PSIs
• Advise the Government on formulation and enforcement of code of conduct and ethics for whole-time
directors in PSBs, FIs and PSIs;
• Advise the Government on evolving suitable training and development programmes for management
personnel in PSBs, FIs and PSIs;
• To help PSBs, Fls and PSIs in terms of developing business strategies and capital raising plan etc.
Composition 11 Members (All the Members including the Chairman are part time members)
• Chairperson
• 4 Ex-officio persons: Secretary, Department Financial Services + Secretary, Department of Public Enterprises +
Deputy Governor, Reserve Bank of India + Chairperson of the Insurance Regulatory and Development
Authority of India (IRDAI)
• 3 Expert Members in field of Banking and Financial Institutions
• 3 Expert Members in field of Insurance.
 Practice MCQ No. 11 Practice MCQ No. 12
With respect to Financial Services Institutions Bureau (FSIB), Which among the following are the likely benefits of Setting up of Bank
consider the following statements: Investment Company (BIC) in India?
1. The FSIB has been set up to recommend names of heads of 1. Enhance Government's control over the Public Sector Banks (PSBs)
Nationalised Banks, Public sector insurance companies and 2. Ensure professional Management of PSBs.
selected financial institutions. 3. Reduce the NPAs of PSBs.
2. Unlike the Banks Board Bureau (BBB), the FSIB has been set
up as a statutory body through an act of Parliament. Select the correct answer using the code given below:
3. The FSIB functions under the Reserve Bank of India (RBI). (a) 1 and 2 only
(b) 2 only
Which among the statements given above is/are correct? (c) 2 and 3 only
(a) 1 only (d) 1, 2 and 3
(b) 2 and 3 only
(c) 3 only
(d) 1 and 3 only
 Prelims 2019
What is/are the purpose/purposes of Government's
'Sovereign Gold Bond Scheme' and 'Gold Monetization
Scheme'?
1. To bring the idle gold lying with Indian households
into the economy
2. To promote FDI in the gold and jewellery sector
3. To reduce India's dependence on gold imports
UPSC Mains Question 2015
Craze for gold in Indian has led to surge in import of gold in
recent years and put pressure on balance of payments and
external value of rupee. In view of this, examine the merits of
Gold Monetization scheme.

Select the correct answer using the code given below.

(a) 1 only
(b) 2 and 3 only
(c) 1 and 3 only
(d) 1, 2 and 3
 Practice MCQ No. 13
With respect to Sovereign Gold Bonds (SGBs), consider the
following statements:
1. The money raised through SGBs shall be considered as
part of Government’s fiscal deficit.
2. The Investors does not face any risk of investment in the
SGBs.
3. The SGBs can be used as collateral for obtaining loans.
Practice MCQ No. 14
In which among the following ways does the Sovereign Gold
Bond Scheme benefit Indian Economy?
1. Reduce Gold Imports into India.
2. Enable Investors to redeem the Bond in terms of Gold
upon maturity

Which among the statements given above is/are correct? 3. Bring vast amount of Idle Gold back into Circulation.
(a) 1 only
(b) 1 and 2 only Select the correct answer using the code given below:
(c) 2 and 3 only (a) 1 only
(d) 1 and 3 only (b) 1 and 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
 IBC: Salient Features, Pros and Cons

Mains Question for Practice

Do you think the Insolvency and Bankruptcy Code (IBC) has emerged as game changer in improving
financial health of Banks in India? Give arguments in support of your answer.
Relationship between Financial health of Banks and Economic Growth
Evolution of the Framework to deal with Non-Performing Assets (NPAs)
 Financial Creditors
Meaning Banks and financial institutions which
have lent loans to company
Right to Invoke Insolvency Yes
Right to be members of Yes.
Committee of Creditors
Operational Creditors
Entities that have sold goods and services to the
company and have not been paid
Example: Employees; Companies which have
supplied raw material
Yes
No
Corporate Insolvency Resolution Process (CIRP)
 Practice MCQ No. 15 Practice MCQ No. 16
With reference to the Insolvency and Bankruptcy Code (IBC), Consider the following statements related to Insolvency and
consider the following statements: Bankruptcy Board of India (IBBI):
1. The resolution process for both the companies and 1. It is a statutory body created under Insolvency and bankruptcy
Individuals is adjudicated by National Companies Law Code.
Tribunals (NCLT). 2. It is headed by the RBI Governor.
2. The resolution plan has to be approved by the committee 3. It functions under the Ministry of Finance
of Creditors by at least 75% of the votes.
Which of the statements given above is/are correct?
Which of the statements given above is/are incorrect? (a) 1 only
(a) 1 only (b) 2 only
(b) 2 only (c) 1 and 3 only
(c) Both 1 and 2 (d) 2 and 3 only
(d) Neither 1 nor 2
 Practice MCQ No. 17 Practice MCQ No. 18
With reference to Asset Reconstruction companies (ARCs) in With respect to Pre-Pack Insolvency Process, consider the following
India, consider the following statements: statements:
1. The ARCs are registered and regulated by RBI in 1. The Pre-Pack Insolvency process has been made applicable only
accordance with the provisions of SARFAESI Act, 2002. to the MSMEs.
2. The ARCs can act as resolution applicants under the 2. The restructuring of loans takes place through direct agreement
Insolvency and Bankruptcy code (IBC). between promoters and creditors without any initial public
bidding.
Which among the statements given above is/are correct?
(a) 1 only Which of the statements given above is/are correct?
(b) 2 only (a) 1 only
(c) Both 1 and 2 (b) 2 only
(d) Neither 1 nor 2 (c) Both 1 and 2
(d) Neither 1 nor 2
 National Land Monetization Corporation
(NLMC)
Practice MCQ No. 19 Practice MCQ No. 20
With respect to National Land Monetisation Corporation Which among the following is/are the functions of the National Land
(NLMC), consider the following statements: Monetisation Corporation (NLMC)?
1. The NLMC has been set up as a wholly owned 1. Undertaking monetization of surplus land and building assets of
Government of India company for monetization of PSUs
surplus and unused land of the PSUs. 2. Act as advisory body and support PSUs in identifying their
2. The NLMC functions under the Department for surplus non-core assets.
promotion of Industry and Internal Trade, Ministry of 3. Act as a repository of best practices in land monetization
Commerce and Industry.
Select the correct answer using the code given below:
Which among the statements given above is/are correct? (a) 1 only
(a) 1 only (b) 2 and 3 only
(b) 2 only (c) 1 and 3 only
(c) Both 1 and 2 (d) 1, 2 and 3
(d) Neither 1 nor 2

Mains Question for Practice

Discuss as to how the National Land Monetization Corporation (NLMC) would help Government achieve multi-faceted
objectives and provide fillip to Asset Monetization programme. (10 Marks, 150 Words)
 Mains Question for Practice
Discuss as to how the National Land Monetization Corporation (NLMC) would help Government achieve multi-faceted
objectives and provide fillip to Asset Monetization programme. (10 Marks, 150 Words)
 Mains Question for Practice
Discuss as to how the National Land Monetization Corporation (NLMC) would help Government achieve multi-faceted
objectives and provide fillip to Asset Monetization programme. (10 Marks, 150 Words)

Introduction
The National Land Monetisation Corporation (NLMC) has been set up to monetise non-core assets (land and buildings)
owned by the Government and PSUs by either selling or leasing them to private entities.
 Body
The NLMC would complement the National Monetisation pipeline (NMP) and help Government in its pursuit of Asset
Monetisation. Further, NLMC is expected to have multiple benefits:
Unlock value of Underutilised Non-Core assets: Various Government agencies hold surplus land in around 5 lakh hectares. (Ex:
Railways and Defence Ministries)
Administrative Efficiency: Monetisation of land by individual PSUs would be time-consuming exercise. NLMC would bring in
higher economies of scale, better technical expertise, and higher revenue realisation.
Raise Finances to fund infrastructure projects. (Vijay Kelkar Committee (2014))
Promote development through planned urbanisation, boosting Tourism sector and creating jobs.
Fast track strategic disinvestment: Facilitate monetisation of assets belonging to PSUs that have ceased operations or are in line
for a strategic disinvestment. (Ex: CONCOR)

However, NLMC may face constraints such as lack of reliable land inventory, unrealistic valuation of land, reluctance by PSUs in
identifying non-core assets etc. Hence, these challenges should be addressed through adoption of global best practices such as
Canada Land Company in Canada.
 SEBI’s Framework on Social Stock Exchanges
Importance for UPSC Prelims:
• SEBI’s Framework on Social Stock Exchanges
• Zero Coupon Zero Principal Bonds
• Alternate Investment Funds (AIFs)

Prelims 2020 Prelims 2016

With reference to the Indian economy, consider the following
statements:
1. 'Commercial Paper' is a short-term unsecured
promissory note.
2. 'Certificate of Deposit' is a long-term instrument issued
by the Reserve Bank of India to a corporation.
3. 'Call Money’ is a short-term finance used for interbank
transactions.
4. Zero-Coupon Bonds are the interest-bearing short-term
bonds issued by the Scheduled Commercial Banks to
corporations.
Which of the statements given above is/are correct?
(a) 1 and 2 only
(b) 4 only
(c) 1 and 3 only
(d) 2, 3 and 4 only
With reference to ‘IFC Masala Bonds’, sometimes seen in news,
which of the statements given below is/are correct?
1. The International Finance Corporation, which offers these
bonds, is an arm of the World Bank Group.
2. They are the rupee-denominated bonds and are a source of
debt financing for the public and private sector.
Select the correct answer using the code given below.
(a) 1 only
(b) 2 Only
(c) Both 1 and 2
(d) Neither 1 nor 2
 SEBI’s Framework on Social Stock Exchanges
Practice MCQ No. 21 Practice MCQ No. 22
With respect to Social Stock Exchanges, consider the Which among the following entities are allowed to raise finances
following statements: from the social stock exchanges to be set up in India?
1. The Social Stock exchanges would be set up as standalone 1. NGOs
exchanges on the lines of BSE and NSE. 2. Trusts and Societies
2. Unlike BSE and NSE, the Social Stock Exchanges would be 3. All the companies registered under Companies Act, 2013
regulated by RBI.
3. The Social Stock exchanges would enable only the Not- Select the correct answer using the code given below:
for-Profit entities to raise finances for social sector (a) 1 only
projects. (b) 1 and 2 only
(c) 2 and 3 only
Which among the statements given above is/are incorrect? (d) 1, 2 and 3
(a) 1 and 2 only
(b) 2 only
(c) 2 and 3 only
(d) 1, 2 and 3
 SEBI’s Framework on Social Stock Exchanges
Practice MCQ No. 23 Practice MCQ No. 24
With respect to Zero Coupon Zero Principal Bonds to be With respect to Alternate Investment Funds (AIFs), consider the
issued on Social Stock Exchanges, consider the following following statements:
statements: 1. AIF is a pooled investment vehicle which collects funds from
1. These Bonds do not carry any interest and principal investors to invest in different sectors.
amount need not be repaid. 2. The AIFs are regulated by RBI in India.
2. These Bonds can be issued by both Not-for-Profit entities
as well as For-profit companies. Which among the statements given above is/are correct?
(a) 1 only
Which among the statements given above is/are correct? (b) 2 only
(a) 1 only (c) Both 1 and 2
(b) 2 only (d) Neither 1 nor 2
(c) Both 1 and 2
(d) Neither 1 nor 2 Practice MCQ No. 25
Consider the following statements related to Social Impact Funds:
1. The Social Impact Funds are categorized as Alternate Investment
Fund(AIFs) by the SEBI.
2. These funds provide funding to the Not-For-Profit entities for
social infrastructure projects.

Which among the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2