Daily Current Affair Quiz: 8th April 2020
1. Which of the following statements are true?
1. GDP price deflator is a ratio of price levels in two different years that accounts for inflation in the prices of goods and services.
2. GDP Deflator enables comparisons of real GDP from one year to another.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: c
Justification:
- GDP price deflator is a ratio of price levels in two different years that accounts for inflation in the prices of goods and services.
- GDP Deflator = Nominal GDP at Current Prices (2018) / Real GDP at Constant Prices (Base Year 2011) ×100
- Quantitatively, the production may not have improved and the growth rate may appear to be high only because of inflation in the prices.
- GDP Deflator enables comparisons of real GDP from one year to another.
2. Project Sashakt is associated with
(a) Consolidation of stressed assets.
(b) Seed capital to renewable energy projects
(c) NITI Ayog Hackathon to find Environmentally Sustainable solutions
(d) Nano satellite project of NASA
Ans: a
Justification:
- Project Sashakt was proposed by a panel led by PNB chairman Sunil Mehta to help consolidate stressed assets.
- Bad loans of up to ₹ 50 crore will be managed at the bank level, with a deadline of 90 days.
- For bad loans of ₹ 50-500 crore, banks will enter an inter-creditor agreement, authorizing the lead bank to implement a resolution plan in 180 days, or refer the asset to NCLT.
- For loans above ₹ 500 crore, the panel recom¬mended an independent AMC, supported by institutional funding through the AIF.
3. Which of the following statements are true?
1. The leverage ratio is the Tier-I capital as a percentage of the bank’s exposures.
2. The Basel Committee on Banking Supervision (BCBS) introduced the concept of a leverage ratio in the 2010 Basel III package of reforms to indicate the level of debt incurred by banks.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: c
Justification:
- The Basel Committee on Banking Supervision (BCBS) introduced the concept of a leverage ratio in the 2010 Basel III package of reforms to indicate the level of debt incurred by banks. Banks had to publicly disclose their Basel-III leverage ratio on a consolidated basis from 1st April 2015.
- It was introduced in the backdrop of the global financial crisis, which was the result of the build-up of excessive on and off-balance sheet leverage in the banking system. The leverage ratio, as defined under Basel-III norms, is Tier-I capital as a percentage of the bank’s exposures.
- Bank’s total exposure is defined as the sum of the following exposures: on-balance sheet exposures; derivative exposures; securities financing transaction exposures; and off-balance sheet items. Leverage Ratio is one the four indicators under the RBI’s prompt corrective action (PCA) framework
- Tier I capital (Core Capital): It consists of money kept as Statutory Liquidity Ratio (SLR), in physical cash form & as share capital and secured loans. At least 6% of CAR must come from Tier 1 capital. This capital can absorb losses without bank ceasing its trading operations
4. Which of the following statement/s is/are true.
1. The Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 empowers RBI to regulate Credit Rating Agencies operating in India.
2. All the credit agencies need to be registered with SEBI in order to operate in India.
(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2
Ans: b
Justification:
- The Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999 empowers SEBI to regulate CRAs operating in India.
- As per the Regulations, CRA is defined as “a body corporate which is engaged in, or proposes to be engaged in, the business of rating of securities offered by way of public or rights issue”.
- SEBI (Credit Rating Agencies) Regulations, 1999 provide for a disclosure-based regulatory regime, where the agencies are required to disclose their rating criteria, methodology, default recognition policy, and guidelines on dealing with conflict of interest.
- All the credit agencies need to be registered with SEBI in order to operate in India.
5. The jataka Kathas are non-canonical Buddhist literature in which stories relating to the
(a) Sermons of Buddha
(b) Former births of the Buddha
(c) Kings who followed Buddhism
(d) None of the above
Ans: b
Justification:
- The jataka Kathas are non-canonical Buddhist literature in which stories relating to the former births of the Buddha (Bodhi-sattva or the would-be Buddha) are narrated.
