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Sample 1 Mark Questions for RBI GR B (DR) Phase II 2017

Q1. Floating-rate bonds are designed to ___________ while convertible bonds are
designed to __________.
A. minimize the holders' interest rate risk; give the investor the ability to share in the
price appreciation of the company's stock
B. maximize the holders' interest rate risk; give the investor the ability to share in the
price appreciation of the company's stock
C. minimize the holders' interest rate risk; give the investor the ability to benefit from
interest rate changes
D. maximize the holders' interest rate risk; give investor the ability to share in the profits
of the issuing company
E. None of these is correct.

Solution : (A)

Floating rate bonds:

a) (FRBs) are bonds that have a variable coupon, equal to a money market
reference rate, like LIBOR or federal funds rate, plus a quoted spread (i.e.,
quoted margin). Floating rate bonds allow the investor to earn a rate of interest
income tied to current interest rates, thus negating one of the major
disadvantages of fixed income investments.

b) FRBs carry little interest rate risk. A FRB has a duration close to zero, and its
price shows very low sensitivity to changes in market rates. When market rates
rise, the expected coupons of the FRB increase in line with the increase in
forward rates, which means its price remains constant. Thus, FRBs differ from
fixed rate bonds, whose prices decline when market rates rise. As FRBs are
almost immune to interest rate risk, they are considered conservative
investments for investors who believe market rates will increase.

Convertible bonds :

a) A bond that can be converted into common shares at a pre-specified conversion

ratio. Conversion ratio is simply the number of shares each bond can exchange
into. When the firms stock is doing well, convertible bonds tend to get converted.
Obviously, a convertible bond is more desirable than an otherwise identical
straight bond, hence it tends to carry a lower coupon rate.

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Firms issue convertible bonds in order to save financing cost (i.e., lower coupons)
and signal their confidence about its own future (i.e., higher stock prices). In this
sense, the conversion feature is similar to warrants attached to regular bond issues.

b) Its gives the bondholder both a fixed-income investment with coupon payments
as well as the potential to benefit from an increase in the company's share price.

c) It allows the investor to benefit from the appreciation of the stock price, either by
converting to stock or holding the bond, which will increase in price as the stock
price increases.

Q2. A coupon bond that pays interest annually is selling at par value of $1,000, matures
in 5 years, and has a coupon rate of 9%. The yield to maturity on this bond is:
A. 8.0%
B. 8.3%
C. 9.0%
D. 10.0%
E. None of these is correct.

Solution (c)

When a bond sells at par value, the coupon rate is equal to the yield to maturity.

The Yield to maturity is the *internal rate of return(IRR) earned by an investor who
bought the bond today at the market price, assuming that the bond will be held until
maturity, and that all coupon and principal payments will be made on schedule.
(*IRR : The rate of return on an investment which causes the net present value of all
future cash flows to be zero)
This formula can be used to calculate YTM approximately.

a) If the YTM is less than the bond's coupon rate, then the market value of the bond
is greater than par value (premium bond).

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b) If a bond's coupon rate is less than its YTM, then the bond is selling at a
discount.
c) If a bond's coupon rate is equal to its YTM, then the bond is selling at par.

Q3. A coupon bond that pays interest annually has a par value of $1,000, matures in 5
years, and has a yield to maturity of 10%. The intrinsic value of the bond today will be
______ if the coupon rate is 7%.
A. $712.99
B. $620.92
C. $1,123.01
D. $886.28
E. $1,000.00

Solution (d)
Bond price is the sum of present value of coupon payments and present value of face
value paid at maturity.
Formula :

F (Face Value or Par Value) = 1000,

C (Coupon Payment) at the end of every year = 7% of Face value = 7% of 1000 = 70
t (maturity of the bond) = 5 years,
r (YTM) = 10%,
After putting all value in the above formula, we get
Present Value of the bond = 886.28.

Q4. Consider two bonds A and B. Both bonds presently are selling at their par value of
$1,000. Each pays interest of $120 annually. Bond A will mature in 5 years while bond B
will mature in 6 years. If the yields to maturity on the two bonds change from 12% to
10%,____________.

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A. both bonds will increase in value, but bond A will increase more than bond B
B. both bonds will increase in value, but bond B will increase more than bond A
C. both bonds will decrease in value, but bond A will decrease more than bond B
D. both bonds will decrease in value, but bond B will decrease more than bond A
E. None of these is correct.

Solution (b)
The price of a bond is inversely proportional to YTM and maturity of the bond, as we
have seen in the formula discussed in the previous question. So, the price of both the
bonds A and B will increase when YTM decreases.
The maturity of bond A is 5years and the maturity of bond B is 6 years. So, the longer
the maturity, the greater the price change when interest rates change.

Q5. Calculate Absolute Liquid Ratio of a company from the following information

Liabilities Rs. Assets Rs.

Bills Payable 30000 Goodwill 200000
Sundry Creditors 20000 Land and Building 200000
Share Capital 100000 Inventories 50000
Debenture 200000 Cash in hand 30000
Bank Overdraft 25000 Sundry Debtors 50000
Bills Receivables 75000
Marketable Securities 10000
Cash at Bank 20000

a) 0.8
b) 0.5
c) 0.6
d) 1.25
e) None of the above

Solution: (a)

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A current liability is an obligation that is payable within one year. The cluster of
liabilities comprising current liabilities is closely watched, for a business must have
sufficient liquidity to ensure that they can be paid off when due.
The following are common examples of current liabilities:
Accounts Payable / Bills Payable. These are the trade payables due to
suppliers, usually as evidenced by supplier invoices.
Sales taxes payable. This is the obligation of a business to remit sales taxes to
the government that it charged to customers on behalf of the government.
Payroll taxes payable. This is taxes withheld from employee pay, or matching
taxes, or additional taxes related to employee compensation.
Income taxes payable. This is income taxes owed to the government but not yet
paid.
Interest payable. This is interest owned to lenders but not yet paid.
Bank account overdrafts. These are short-term advances made by the bank to
offset any account overdrafts caused by issuing checks in excess of available
funding.
Accrued expenses. These are expenses not yet payable to a third party, but
already incurred, such as wages payable.
Customer deposits. These are payments made by customers in advance of the
completion of their orders for goods or services.
Dividends declared. These are dividends declared by the board of directors, but
not yet paid to shareholders.
Short-term loans. This is loans that are due on demand or within the next 12
months.
Current maturities of long-term debt. This is that portion of long-term debt that is
due within the next 12 months.
Sundry Creditors. Miscellaneous small or infrequent suppliers that are not
assigned individual ledger accounts but are classified as a group.

The aggregate amount of current liabilities is a key component of several measures of

the short-term liquidity of a business, including:
Current ratio. This is current assets divided by current liabilities.
Quick ratio. This is current assets minus inventory, divided by current liabilities.
Cash ratio. This is cash and cash equivalents, divided by current liabilities.

For all three ratios, a higher ratio denotes a larger amount of liquidity, and therefore an
enhanced ability for a business to meet its short-term obligations.

Absolute Liquid Assets = (Cash in Hand + Cash at Bank + Marketable Securities)

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Absolute Liquid Assets = Rs. 30,000 + 20,000 + 10,000 = Rs.60,000

Current Liabilities = Rs. 30,000(Bills Payable) + 20,000(Sundry Creditors) +

25,000(Bank Overdraft) = Rs.75,000

Absolute Liquid Ratio = 60000 / 75,000 = 0.8

The reason of computing absolute liquid ratio is to eliminate accounts receivables from
the list of liquid assets because there may be some doubt about their quick collection.
This ratio is useful only when used in conjunction with current ratio and quick ratio. An
absolute liquid ratio of 0.5 to 1 is considered ideal for most of the companies. The ratio
of 0.8 is quite satisfactory because, it is much higher than the optimum value of 50%.

Q6. When managers have substantial but not complete confidence and trust in
subordinates and solicit advice from subordinates while retaining the right to make final
decision, Likerts four systems of management describes it as
(a) Participative leadership style
(b) Benevolent-authoritative leadership style
(c) Consultative leadership style
(d) Exploitative-authoritative leadership style
(e) Trait theory of leadership style.

Solution (c)

Rensis Likert and his associates studied the patterns and styles of managers for three
decades at the University of Michigan, USA, and identified a four-fold model of
management systems. The model was developed on the basis of a questionnaire
administered to managers in over 200 organizations and research into the performance
characteristics of different types of organizations. The four systems of management
system or the four leadership styles identified by Likert are:

System 1 - Exploitative Authoritative: Responsibility lies in the hands of the

people at the upper echelons of the hierarchy. The superior has no trust and
confidence in subordinates. The decisions are imposed on subordinates and they
do not feel free at all to discuss things about the job with their superior. The
teamwork or communication is very little and the motivation is based on threats.

System 2 - Benevolent Authoritative: The responsibility lies at the managerial

levels but not at the lower levels of the organizational hierarchy. The superior has
condescending confidence and trust in subordinates (master-servant
relationship). Here again, the subordinates do not feel free to discuss things
about the job with their superior. The teamwork or communication is very little
and motivation is based on a system of rewards.

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System 3 - Consultative: Responsibility is spread widely through the

organizational hierarchy. The superior has substantial but not complete
confidence in subordinates. Some amount of discussion about job related things
takes place between the superior and subordinates. There is a fair amount of
teamwork, and communication takes place vertically and horizontally. The
motivation is based on rewards and involvement in the job.

System 4 - Participative: Responsibility for achieving the organizational goals is

widespread throughout the organizational hierarchy. There is a high level of
confidence that the superior has in his subordinates. There is a high level of
teamwork, communication, and participation.

Q7. The basic method of _______ control is an improvement over _______ control,
because it tries to shorten or to eliminate the delay between performance and feedback
about the performance
(a) Feedback, Feedforward
(b) Concurrent, Feedback
(c) Feedback, Concurrent
(d) Feedforward, Feedback
(e) Steering, Concurrent.

Soution (b)

Concurrent control takes place while operations are going on and is intended to
minimize problems as they occur. Concurrent control is a control type based on timing
that involves the regulation, monitoring and adjusting of ongoing activities that are part
of the transformation process to ensure that they conform to organizational standards.

Feedback control takes place after operations are finished and is intended to correct
problems that have already occurred.

A feed forward control is a control type based on timing that focuses on the regulation
of inputs to ensure that they meet the standards necessary for the transformation
process.

Steering control is a technique used to detect deviations and allow corrective actions
to be taken while the activity is being performed.

Q8. The external environment of an organization consists of the mega environment and
the task environment. Which of the following statement(s) is/are true regarding the task
environment of a firm?

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I. It includes components such as technological, economic, socio-cultural, and

international influences.
II. It consists of specific external elements such as customers and clients,
competitors, suppliers, labor supply and government agencies, with which an
organization interacts while conducting its business.
III. As it depends largely on the products and services offered by the firm and its
business location, it may vary from firm to firm.
IV. While a firm may not be able to directly influence its task environment, it can
certainly influence its mega environment.
(a)Only (I) above
(b)Both (I) and (IV) above
(c)Both (II) and (III) above
(d)(I), (II) and (III) above
(e)(II), (III) and (IV) above.

Solution (c)

Task environment consists of those industry factors which are external to the firm but
have a direct and specific impact upon the organization and are in turn affected by the
organizations operations.
These factors are shown in the following diagram.

Q9. Two approaches can be used for setting objectives the top-down approach and
the bottom-up approach. There is often a conflict among management theorists as to
which is the better method. Which of the following is not true with respect to the top-
down and bottom-up approaches?
(a)In the top-down approach, top-level managers determine objectives for subordinates
to follow, while in the bottom-up approach, subordinates formulate objectives and
present them to their superiors for approval

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(b)As per supporters of the top-down approach, the organization needs clarity in
direction by way of corporate objectives set by the CEO and the board of directors
(c)As per proponents of the bottom-up approach, top management should ascertain
information from lower levels in the form of objectives
(d)Either approach alone is insufficient
(e)These approaches cannot be modified depending on factors such as the size of the
organization.

Solution (e)
Both approaches are equally important and can be used according to the situation and
can be modified depending on factors such as the size of the organization, the
organization culture and the urgency of the plan.

Q10. Delegate means to grant or confer on subordinates certain tasks and duties along
with sufficient authority, to accomplish these. Which of the following points is most likely
to increase the effectiveness of delegation?
(a)Detail how the required tasks are to be completed for the subordinate
(b)Predetermine the desired results and performance standards for the delegated task
(c)Explain the relevance of delegated tasks to larger projects or to department or
organization goals
(d)Maintain the authority necessary to accomplish the main tasks
(e)Retain the decision-making power for the delegated tasks.

Solution (c)
Delegate means to grant or confer. Thus, a manager grants or confers on subordinates
certain tasks and duties along with sufficient authority, to accomplish these. Explaining
the relevance of delegated tasks to larger projects or to department or organization
goals is most likely to increase the effectiveness of delegation.

Q11. Lyman W. Porter and Edward E. Lawler III developed the expanded expectancy
theory model. Which of the following is not true with regard to the Porter and Lawler
model of motivation?
(a)Its built on Vrooms expectancy theory
(b)It means motivation is not a simple cause-and-effect matter
(c)It assumes that satisfaction leads to performance
(d)It emphasizes careful assessment of the reward structure
(e)It assumes that performance leads to intrinsic as well as extrinsic rewards.

Solution (c)

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Lyman Porter and Edward Lawler came up with a comprehensive theory of motivation,
combining the various aspects. Porter and Lawler's model is a more complete model of
motivation. This model has been practically applied also in their study of managers. This
is a multivariate model which explains the relationship that exists between job attitudes
and job performance.

In fact, Porter and Lawler's theory is an improvement over Vroom's expectancy theory.
They say that motivation does not equal satisfaction or performance. The model
suggested by them encounters some of the simplistic traditional assumptions made
about the positive relationship between satisfaction and performance. They proposed a
multivariate model to explain the complex relationship that exists between satisfaction
and performance. What is the main point in Porter and Lawler's model is that effort or
motivation does not lead directly to performance. It is, in fact, medicated by abilities and
traits and by role perceptions. Ultimately, performance leads to satisfaction. The same
is depicted in the figure below.

Porter and Lawler Motivation Model.

The Porter-Lawler model of motivation, which is an improvement of the expectancy

theory, assumes that motivation does not equal satisfaction. It assumes satisfaction
does not lead to performance. Rather, the converse is true: performance can, but does
not always, lead to satisfaction through the reward process. It assumes that motivation
is not a simple cause-and-effect matter. The model advocates that managers carefully
assess their reward structures and also assumes that performance leads to intrinsic as
well as extrinsic rewards.

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Q12. There are various appraisal techniques used in an organization. A performance

appraisal technique that makes use of feedback from supervisors, subordinates and co-
workers, is known as
(a) Work-oriented appraisal
(b) 360-degree appraisal
(c) Informal appraisal
(d) Graphic Rating
(e) Behaviorally Anchored Rating.

Solution (b)
A performance appraisal technique that makes use of feedback from supervisors,
subordinates and co-workers, is known as 360-degree appraisal. 360 degree
feedback is the most comprehensive appraisal where the feedback about the
employees performance comes from all the sources that come in contact with the
employee on his job.

An appraisal made by top management, immediate superior, peers, subordinates, self

and customers is called 360 Degree Appraisal. Here, the performance of the employee
or manager is evaluated by six parties, including himself. So, he gets a feedback of his
performance from everyone around him. This method is very reliable because
evaluation is done by many different parties. These parties are in the best position to
evaluate the employee or manager because they are continuously interacting and
working with him. This method is mostly used to evaluate the performance of the
employees. However, it is also used to evaluate other qualities such as talents,
behaviour, values, ethical standards, tempers, loyalty, etc.
360 degree appraisal was first developed by General Electric (GE), USA in 1992. Today
it is used by all major organisations. In India, it is used by Crompton Greaves, Wipro,
Infosys, Reliance Industries, etc.

Six Parties In 360 Degree Appraisal

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The six parties involved in 360 degree appraisal are :-

1. Top Management : The top management normally evaluates the middle level
managers. However, in a small organisation, they also evaluate the performance of the
lower level managers and senior employees.

2. Immediate Superior : The immediate superior is in a very good position to evaluate

the performance of his subordinates. This is because they have direct and accurate
information about the work performance of their subordinates.

3. Peers / Co-workers : Peer or colleagues also evaluate each other's performance.

They work continuously with each other, and they know each other's performance. Peer
evaluation is used mostly in cases where team work is important.

4. Subordinates : The Subordinates can also evaluate the performance of his superior.
Now-a-days students are asked to evaluate the performance of their teachers.

5. Self Appraisal : In the self-appraisal, a person evaluates his own performance. He

should be honest while evaluating himself. This results in self-development.

6. Customers :Customers can also evaluate the performance of the employees who
interacts with them. This evaluation is best because it is objective. It is also given a lot

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of importance because the customer is the most important person for the business.
Organisations use customer appraisals to improve the strengths and remove the
weaknesses of their employees.

In addition to these six parties, appraisal can also be done by an Appraisal Panel. This
panel consists of 5 to 6 different types of members. Outside Consultants are also used
for conducting appraisals. In some cases, Personnel Department also conducts an
appraisal of employees and managers.360 Degree Appraisal is becoming more popular
because many parties are available for evaluation. Therefore, there is no "bias" or "halo
effect". Hence the evaluation will become more realistic.

360 degree appraisal is also a powerful developmental tool because when conducted at
regular intervals (say yearly) it helps to keep a track of the changes others perceptions
about the employees. A 360 degree appraisal is generally found more suitable for
the managers as it helps to assess their leadership and managing styles. This
technique is being effectively used across the globe for performance appraisals.

Q13. Which of the following theories proposes that the factors that help prevent
dissatisfaction on the job do not necessarily lead to satisfaction?
(a) Vroom's expectancy theory
(b) Adam's equity theory
(c) Herzberg's motivation-hygiene theory
(d) McClelland's three-needs theory
(e) Mc Gregors theory X.

Solution (C)

According to Herzberg, there are some job factors that result in satisfaction while there
are other job factors that prevent dissatisfaction. According to Herzberg, the opposite of
Satisfaction is No satisfaction and the opposite of Dissatisfaction is No
Dissatisfaction. Herzberg classified these job factors into two categories-

a) Hygiene factors- Hygiene factors are those job factors which are essential for
existence of motivation at workplace. These do not lead to positive satisfaction for long-
term. But if these factors are absent / if these factors are non-existant at workplace,
then they lead to dissatisfaction. The hygiene factors symbolized the physiological
needs which the individuals wanted and expected to be fulfilled. Eg. Pay, Company

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Policies and administrative policies, Fringe benefits, Physical Working conditions, Job
Security etc.

b) Motivational factors- According to Herzberg, the hygiene factors cannot be

regarded as motivators. The motivational factors yield positive satisfaction. These
factors are inherent to work. These factors motivate the employees for a superior
performance. These factors are called satisfiers. These are factors involved in
performing the job. Employees find these factors intrinsically rewarding. The motivators
symbolized the psychological needs that were perceived as an additional benefit. Eg.
Recognition, Sense of achievement, Growth and promotional opportunities,
Responsibility etc.
Herzbergs view of satisfaction and dissatisfaction

Thus, Herzberg's motivation-hygiene theory proposes that the factors that help prevent
dissatisfaction on the job do not necessarily lead to satisfaction.

Q14. What are the causes of inflation?

a. Demand pull inflation increases in aggregate demand due to increased

private and government spending. Thus high fiscal deficits, high subsidies lead to
demand pull inflation. Monetary policy can mainly control demand pull inflation by
raising interest rates, tightening liquidity etc.

b. Cost push inflation also called supply shock inflation, is caused by a drop in
aggregate supply. This may be due to natural disasters, or increased prices of
inputs.

c. Built in inflation is induced by adaptive expectations, and is often linked to the

price-wage spiral. Essentially workers try to keep their wages up with prices and firms
pass these higher labor costs on to their customers as
higher prices, leading to a vicious circle.

d. All are correct.

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Solution (d)

For IMF view on Basics of Inflation visit

:https://www.imf.org/external/pubs/ft/fandd/2010/03/pdf/basics.pdf

For RBIs view on Inflation - The fight against inflation: a measure of our institutional
development visit
https://rbidocs.rbi.org.in/rdocs/Speeches/PDFs/PR29533A11C296335D44BDBB14DB2
4A696042B.PDF

Q15. Which one of the following groups of items is included in India's foreign exchange
reserves?
a.Foreign currency assets, Special Drawing Rights (SDRs) and loans from foreign
countries,
b.Foreign currency assets, gold holdings of the RBI, SDRs and Reserve Position in the
IMF
c.Foreign currency assets, loans from the World Bank and SDRs
d. Foreign currency assets, gold holdings of the RBI and SDRs

Solution (b)

Foreign-exchange reserves (also called forex reserves or FX reserves) is money or

other assets held by a central bank or other monetary authority so that it can pay if need
beits liabilities, such as the currency issued by the central bank, as well as the various
bank reserves deposited with the central bank by the government and other financial
institutions. Reserves are held in one or more reserve currency, mostly the United
States dollar and to a lesser extent the EU's euro, the British pound sterling, and the
Japanese yen. Foreign exchange reserves should ideally include foreign bank notes,
foreign bank deposits, foreign treasury bills, and short and long-term foreign
government securities. However, they also include gold reserves, special drawing rights
(SDRs), and International Monetary Fund (IMF) reserve positions.
This broader figure, along with SDRs, gold reserves and IMF reserve positions is more
readily used.

Thus, in a nutshell, Foreign Exchange Reserves include-

a) Reserves held in US Dollars, The Euro, The British Pound or the Japanese Yen
b) Foreign bank notes, foreign bank deposits, foreign treasury bills and short term and
long term foreign government securities
c) Gold reserves
d) Special Drawing Rights and International Monetary Fund reserve positions

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Foreign-exchange reserves are called reserve assets in the balance of payments and
are located in the capital account. Hence, form an important part of the international
investment position of a country.

Forex reserves as on May 05, 2017 as per RBIs website :

https://m.rbi.org.in/Scripts/WSSView.aspx?Id=21369

Sample 2 Marks Questions for RBI GR B (DR) Phase II 2017

Q16-17. Union Ministry of Electronics and Information Technology issued draft

guidelines under the Draft IT (Security of Prepaid Instruments) Rules, 2017 for
electronic payment transactions through prepaid payment instruments (PPIs) under
provisions of Information Technology Act, 2000, on March 08, 2017. These draft rules
when enacted shall be applicable to all digital wallet companies and those issuing smart
cards, paper vouchers, magnetic strip cards, internet wallets, mobile accounts, mobile
wallets or any such instrument.

Q16. The correct information about Prepaid Payment Instruments (PPIs) is

a. PPIs are payment instruments that facilitate purchase of goods and services,
including financial services, remittance facilities against the value stored on such
instruments.

b. RBI has proposed to fix the upper limit for PPIs at Rs 1.5 lakhs in view of growing
usage of PPIs for purchase of goods and services.

c. As per RBIs draft circular on Master Directions on Issuance and Operation of Pre-
paid Payment Instruments (PPIs) in India, there are three types of PPIs Closed
system (valid under the issuing enity only), Semi-closed system (valid in group of clearly
identified merchant locations/establishments) and Open system (these are issued by
banks and can be used at any merchant locations).

Choose the correct option.

1. a and b
2. a and c
3. b and c
4. All a, b and c

Solution (2)

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RBI has proposed to fix the upper limit for PPIs at Rs 1 lakh in view of growing usage of
PPIs for purchase of goods and services.

Q17. Key proposals of the draft area are

a.Each digital wallet company will have privacy policy posted on its website.
b. PPI issuer companies must ensure end-to-end encryption of the data exchanged.
c. PPI issuer companies must assist their user customers for safe and secure use of
PPIs in simple language.

Choose the correct option

1. a and b
2. a and c
3. b and c
4. All a, b and c

Solution (4)

Q18 -19. The Reserve Bank of India (RBI) has made it mandatory for all credit
information agencies in the country to give a free full credit report (FFCR) without any
charge, on request, once a calendar year to individuals whose credit history is available.
This rule has come into force from 1 January 2017. The CICs shall notify on their
website the procedure for accessing the FFCR. This report must show the latest
position of the credit institutions exposure to the individual as per records available with
the CIC. The contents of the FFCR shall be the same as appearing in the most detailed
version of the reports on the individual provided to credit institutions, including the credit
score.
Given the importance of the credit report in an individuals financial matters, he/ she is
entitled to have a copy of the report upon request. Further, the objective of providing the
free credit report would not be fully met unless this report includes details that figure in
the full credit report that is accessed by the credit institutions while considering the
request for fresh credit facilities. The report should also provide an opportunity to the
borrower to have the errors, if any, in her/ his credit history rectified.

Q18. Which of the following information is correct

a. It stands for Credit Information Report and It contains details of your credit history, as
collated by a credit information company, or a credit bureau.
b. Individuals are assigned a score by CIRs, which helps to check their eligibility for a
loan.
c. The committee which has recommended that each customer of a credit institution
should be provided one base level consumer Credit Information Report (CIR) free of
cost every year by each Credit Information Company (CIC) was headed by Shri Aditya
Puri.
d. The CIC shall have a Board approved policy on making available the FFCR.

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1. a, b, and d
2. a, b and c
3. a and b only
4. All a, b, c and d

Solution (4)

Q19. At present, credit information agencies operating in the country are

a. CRIF High Mark
b. Equifax .
c. Experian
d. Transunion CIBIL Ltd.
e. CRISIL
f. ICRA

1. a, b, c and d
2. a, c, d and e
3. a, b, e and f
4. All a, b, c, d, e and f

Solution (1)
At present, there are four such companies in India:
1.CRIF High Mark Credit Information Services Pvt. Ltd,
2.Equifax Credit Information Services Pvt. Ltd,
3.Experian Credit Information Co. of India Pvt. Ltd and
4.Transunion Cibil Ltd.

As you can avail one free report from each bureau, this means that you can get four
free reports every year.

CRISIL, CARE, Fitch and ICRA are Credit rating agencies.

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