Finance Management (FM) Questions for RBI Grade B Phase 2 Exam
Finance Management (FM) Questions for RBI Grade B Phase 2 Exam

RBI Grade B Finance Management (FM) Questions for Phase 2

Finance Management Questions for RBI Grade B. RBI Grade B Finance and Management Note PDF. RBI Grade B FM Study Material PDF. RBI Finance and Management (FM) Books, PDF, Previous Papers, Question Set, and study material. As we all know that RBI Grade B Notification 2024 is out. The Reserve Bank of India (RBI) conducted the RBI Grade B Phase I Exam for the post of Grade B (Grade ‘B’ (DR) – (General) & others). It’s the right time when you should start your RBI Grade B Phase 2 preparation at full pace.

If you are preparing for RBI Grade B (Phase 2), you will come across a section on “Finance and Management (FM)” wherein 65 questions will be there carrying 50 marks. Here we are providing you with “Finance and Management (FM) Questions for RBI Grade B” with answers based on the latest pattern of your daily practice.

FM Questions for RBI Grade B Phase 2 | Test-5

1. With respect to shell companies select the correct statements:

  1. Shell companies typically refer to companies without active business operations or significant assets.
  2. In India Shell companies are defined under Companies Act, 2013.
  3. Obscuring ownership, excessive leveraging, rotation in transactions with no apparent business purpose, majority of shares held by other companies and disproportionate investment in shares of other companies are among the characteristics of Shell Companies.
  4. The govt. has set up a taskforce on shell companies which is co-chaired by Arvind Subramanian.
  1. 1, 3 & 4
  2. 1, 2 & 3
  3. 1 & 3
  4. 1, 2 & 4
  5. 1, 2, 3 & 4

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Correct Answer:  C. 1 & 3

Explanation: 1. Shell companies typically refer to companies without active business operations or significant assets.

  1. In India Shell companies are not defined under Companies Act, 2013 or any other legislation.
  2. Obscuring ownership, excessive leveraging, rotation in transactions with no apparent business purpose, majority of shares held by other companies and disproportionate investment in shares of other companies are among the characteristics of Shell Companies.

4. The govt. has set up a taskforce on shell companies which is co-chaired by Hasmukh Adhia.

2. With reference to the Union Government, consider the following statements

  1. The Department of Revenue is responsible for the preparation of Union Budget that is presented to the Parliament
  2. No amount can be withdrawn from the Consolidated Fund of India without the authorization from the Parliament of India.
  3. All the disbursements made from Public Account also need the authorization from the Parliament of India.

Which of the statements given above is/are correct?

  1. 1 and 2 only
  2. 2 and 3 only
  3. 2 only
  4. 1, 2 and 3
  5. None of the above

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Correct Answer: C. 2 only

Explanation: Department of Economic Affairs prepares the Union Budget of India. The disbursments from public account does not require the authorisation from Parliament.

3. Management by objectives is a joint setting of goals and objectives by superiors and subordinates. If you were responsible for setting up an MBO program, which of the following steps would you need to complete before the others?

  1. Do performance appraisal
  2. Implement and maintain self control
  3. Clarify organisational goals
  4. Formulate action plans
  5. None of the above

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Correct Answer: C. Clarify organisational goals

Explanation: Management by objectives is the process of defining specific objectives within an organization that management can convey to organization members, then deciding on how to achieve each objective in sequence. This process allows management to take work that needs to be done one step at a time to allow for a calm, yet productive work environment. This process also helps organization members to see their accomplishments as they achieve each objective, which reinforces a positive work environment and a sense of achievement. An important part of MBO is the measurement and comparison of the employee’s actual performance with the standards set. Ideally, when employees themselves have been involved with the goal setting and choosing the course of action to be followed by them, they are more likely to fulfil their responsibilities.

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4. What is true about the Basel Committee on Banking Supervision (BCBS)?

(i) BCBS is an Indian National Committee of banking supervisory authority.

(ii) BCBS was established by a group of 19 nationalized commercial banks.

(iii) BCBS was established in 1996.

(iv) It provides a forum for regular cooperation on banking supervisory matters.

  1. (i) and (ii) only
  2. (ii) and (iii) only
  3. (iii) and (iv) only
  4. (iv) only
  5. None of the above

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Correct Answer: D. (iv) only

Explanation: Established on 17 May 1930, the Bank for International Settlements (BIS) is the world’s oldest international financial organisation. The BIS has 60 member central banks, representing countries from around the world that together make up about 95% of world GDP.

The head office is in Basel, Switzerland and there are two representative offices: in the Hong Kong Special Administrative Region of the People’s Republic of China and in Mexico City.

The mission of the BIS is to serve central banks in their pursuit of monetary and financial stability, to foster international cooperation in those areas and to act as a bank for central banks.

5. Which of the following is not the assumption of theory X?

  1. An average employee needs formal direction
  2. An average employee intrinsically does not like work and tries to escape it whenever possible.
  3. Employees resist change.
  4. Employees generally dislike responsibilities.
  5. All the above
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Correct Answer: E. All the above

Explanation: All the four mentioned above are the assumptions of theory X given by Douglas McGregor.

Assumptions of Theory X

  • An average employee intrinsically does not like work and tries to escape it whenever possible.
  • Since the employee does not want to work, he must be persuaded, compelled, or warned with punishment so as to achieve organizational goals. A close supervision is required on part of managers. The managers adopt a more dictatorial style.
  • Many employees rank job security on top, and they have little or no aspiration/ ambition.
  • Employees generally dislike responsibilities.
  • Employees resist change.

An average employee needs formal direction.

6. Which team building theory uses a psychological model of behaviours that help teams to understand similarities and differences in order to become more effective and who gave this theory?

  1. Theory of group development, Tuckman
  2. Social Identity theory, Tajfel
  3. Colour works theory, Jung
  4. Team role theory, Beldin
  5. None of these
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Correct Answer: C. Colour works theory, Jung

Explanation: Colour theory is both the science and art of colour. It explains how humans perceive colour; how colours mix, match or clash; the subliminal (and often cultural) messages colours communicate; and the methods used to replicate colour.

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7. What do we understand by F-Jas Model of Job Analysis?

  1. It is a basic and generic approach to discover common elements in different jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, etc.
  2. It is a basic and generic approach to discover common elements in single jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, etc.
  3. It is a basic and generic approach to discover single element in different jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, etc.
  4. It is an advanced approach to discover common elements in different jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, etc.
  5. None of the above
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Correct Answer: A. It is a basic and generic approach to discover common elements in different jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, etc.

Explanation: Job Analysis supports all other management activities including recruitment and selection, training and development need analysis, performance analysis and appraisal, job evaluation, job rotation, enrichment and enlargement, a right job-individual fit creation and regulation of entry and exit of talent in an organization. The process is the basis of all these important management activities, therefore, requires solid ground preparation. A properly performed job analysis is adequate for laying strong organization foundation.

There are various tools and techniques such as O*Net model, PAQ model, FJA model, F-JAS model and competency model that help HR managers to develop genuine job description and job specification data.

Representing Fleishman Job Analysis System, it is a basic and generic approach to discover common elements in different jobs including verbal abilities, reasoning abilities, idea generation, quantitative abilities, attentiveness, spatial abilities, visual and other sensory abilities, manipulative abilities, reaction time, speed analysis, flexibility, emotional characteristics, physical strength, perceptual abilities, communication skills, memory, endurance, balance, coordination and movement control abilities.

8. Which of the following statement is not correct in the context of FRBM Act, 2003?

  1. Prohibition on Central government from borrowing from RBI
  2. Due to Global Financial Crisis, the Act was put on hold in 2007-08 by the Central Government
  3. Restrictions on RBI to subscribe to primary issue of central government securities
  4. All the above
  5. None of these

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Correct Answer: E. None of these

Explanation: The Act provided that the Central Government shall not borrow from the Reserve Bank of India (RBI) except under exceptional circumstances where there is temporary shortage of cash in particular financial year. It also laid down rules to prevent RBI from trading in the primary market for Government securities. It restricted them to the trading of Government securities in the secondary market after an April, 2005, barring situations highlighted in exceptions paragraph.

9. A non banking financial company is a company registered under which Act and what is the minimum net owned fund for a NBFC?

  1. Reserve Bank of India Act, 1935, Rs. 20 lakhs
  2. Banking Regulation Act, 1949, Rs. 50 lakhs
  3. Companies Act, 2013, Rs. 200 lakhs
  4. SARFAESI Act, 2002, Rs. 50 lakhs
  5. Reserve Bank of India Act, 1935, Rs. 100 lakhs
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Correct Answer: C. Companies Act, 2013, Rs. 200 lakhs

Explanation: A Non Banking Financial Company (NBFC) is  a company registered under the Companies Act, 1956 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds hire-purchase, insurance business or chit business but does not include any institution whose principal business is that includes agriculture or industrial activity or the sale, purchase or construction of immovable property. The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI) within the framework of the Reserve Bank of India Act, 1934 (Chapter III B) and the directions issued by it. A company incorporated under the Companies Act, 1956 and desirous of commencing business of non-banking financial institution as defined under Section 45 I(a) of the RBI Act, 1934 should comply with the following:

  1. it should be a company registered under Section 3 of the companies Act, 1956

ii. It should have a minimum net owned fund of Rs. 200 lakh.

10. It is a technique of scientific management that was developed to define employee productivity standards. In this technique, a complex job is first divided into a series of simple tasks. After that, the way these tasks are performed is observed to determine and eliminate waste motions. Which theory is being talked about here?

  1. Differential piece rate plan
  2. Supervision
  3. Time and motion study
  4. Scientific recruitment
  5. None of these

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Correct Answer: C. Time and motion study

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Finance & Management (FM) Quizzes For RBI Grade B

Set-20 Set-19 Set-18 Set-17 Set-16
Set-15 Set-14 Set-13 Set-12 Set-11
Set-10 Set-9 Set-8 Set-7 Set-6
Set-5 Set-4 Set-3 Set-2 Set-1

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FM eBook 203 1

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