DAILY

 CURRENT AFFAIRS

PRACTICE QUESTIONS

Current Affairs MCQs for Practice – 06 Jan 2022

Question-1

Which company has recently cancelled all its pre-orders for providing internet in India?

a)     Airtel

b)    Jio

c)     Starlink

d)    Vi

Ans- c

Explanation-

Billionaire entrepreneur Elon Musk’s Starlink satellite Internet venture told its members on Tuesday the Indian government had asked the company to refund all its pre-orders until it receives licences to operate in the country.

Question-2

SBI has decided to make service charges free on IMPS transactions of up to ₹___, done through Internet and mobile banking.

a)     4 lakh

b)    2 lakh

c)     3 lakh

d)    5 lakh

Ans- d

Explanation-

To encourage customers to adopt digital banking, State Bank of India (SBI) has decided to not levy any service charges on IMPS transactions of up to ₹5 lakh, done through Internet and mobile banking.

Question 3

Consider the following statements regarding Foreign portfolio investment:

1.   They provide direct ownership to the investor.

2.   Foreign portfolio investment is part of a country’s capital account and is shown on its Balance of Payments (BOP).

Which of the statements given is/above are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Ans- b

Explanation-

Foreign portfolio investment (FPI) consists of securities and other financial assets passively held by foreign investors. It does not provide the investor with direct ownership of financial assets and is relatively liquid depending on the volatility of the market.

·      Foreign portfolio investment is part of a country’s capital account and is shown on its Balance of Payments (BOP).

• The BOP measures the amount of money flowing from one country to other countries over one monetary year.
• The investor does not actively manage the investments through FPIs, he does not have control over the securities or the business. However, since the investor’s goal is to create a quick return on his money, FPI is more liquid and less risky than Foreign Direct Investment (FDI).

Question 4

Consider the following statements regarding ‘Prompt Corrective Action (PCA)’ Framework

1.   PCA is a framework under which banks with weak financial metrics are put under watch by the Ministry of Finance

2.   Both banks and Non-banking financial companies (NBFCs) are covered under it.

Which of the above statements are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Ans- b

Explanation

• PCA is a framework under which banks with weak financial metrics are put under watch by the Reserve Bank of India (RBI).
• PCA is a framework under which banks with weak financial metrics are put under watch by the RBI.
• The RBI introduced the PCA framework in 2002 as a structured early-intervention mechanism for banks that become undercapitalized due to poor asset quality, or vulnerable due to loss of profitability.
• It aims to check the
• Problem of Non-Performing Assets (NPAs) in the Indian banking sector.
• The framework was reviewed in 2017 based on the recommendations of the working group of the Financial Stability and Development Council on Resolution Regimes for Financial Institutions in India and the Financial Sector Legislative Reforms Commission.
• Recently, RBI has introduced the prompt corrective action (PCA) framework for non-banking financial companies (NBFCs).

Objectives of PCA Framework

·       The objective of the PCA framework is to enable supervisory intervention at appropriate time and require the supervised entity to initiate and implement remedial measures in a timely manner, so as to restore its financial health.

• The PCA framework is also intended to act as a tool for effective market discipline. It does not preclude the RBI from taking any other action as it deems fit at any time in addition to the corrective actions prescribed in the framework.

What are the types of restrictions?

·       There are two types of restrictions, mandatory and discretionary. Restrictions on dividend, branch expansion, directors’ compensation, are mandatory while discretionary restrictions could include curbs on lending and deposit.

What will a bank do if PCA is triggered?

·       Banks are not allowed to renew or access costly deposits or take steps to increase their fee-based income.

·       Banks will also have to launch a special drive to reduce the stock of NPAs and contain generation of fresh NPAs.

·       They will also not be allowed to enter into new lines of business. RBI will also impose restrictions on the bank on borrowings from interbank market.

Question 5

Consider the following statements regarding ‘Infrastructure Investment Trust (InvITs)’

1.   An Infrastructure Investment Trust (InvITs) is Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual only.

2.   The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014

Which of the above statements are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Ans- b

Explanation-

InvITs is Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual as well as institutional investor.

What is Infrastructure Investment Trust?

·       An Infrastructure Investment Trust (InvITs) is Collective Investment Scheme similar to a mutual fund, which enables direct investment of money from individual and institutional investors in infrastructure projects to earn a small portion of the income as return.

• The InvIT is designed as a tiered structure with Sponsor setting up the InvIT which in turn invests into the eligible infrastructure projects either directly or via special purpose vehicles (SPVs).
• The InvITs are regulated by the SEBI (Infrastructure Investment Trusts) Regulations, 2014. 

An InvIT consists of four elements:

·       Trustee: He inspects the performance of an InvIT is certified by Sebi and he cannot be an associate of the sponsor or manager.

·       Sponsor(s): They are people who promote and refer to any organisation or a corporate entity with a capital of Rs 100 crore, which establishes the InvIT and is designated as such at the time of the application made to SEBI, and in case of PPP projects, base developer.

·       Investment Manager: It is an entity or limited liability partnership (LLP) or organisation that supervises assets and investments of the InvIT and guarantees activities of the InvIT.

·       Project Manager: It is the person who acts as the project manager and whose duty is to attain the execution of the project and in case of PPP projects

Question 6

Consider the following statements regarding Securities and Exchange Board of India (SEBI)

1.   It is a market regulator which was given a statutory body in the year 1950

2.   It aims to protect the interests of investors in securities and to regulate the securities market

Which of the above statements are correct?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Ans- b

Explanation-

It is a statutory body and a market regulator established in the year 1992.

About ‘Securities and Exchange Board of India (SEBI)’ –

·       SEBI is a statutory body and a market regulator, which controls the securities market in India.

• The basic function of SEBI is to protect the interests of investors in securities and to promote and regulate the securities market.
• It is run by its board of members. The board consists of a Chairman and several other whole time and part time members. The chairman is nominated by the union government. The others include two members from the finance ministry, one member from Reserve Bank of India and five other members are also nominated by the Centre.
• The headquarters of SEBI is situated in Mumbai and the regional offices are located in Ahmedabad, Kolkata, Chennai and Delhi
• History- Controller of Capital Issues was the regulatory authority which derived authority from the Capital Issues (Control) Act, 1947. In 1988, SEBI was constituted as the regulator of capital markets in India. Initially, SEBI was a non-statutory body without any statutory power. Following the passage of the SEBI Act by Parliament in 1992, it was given autonomous and statutory powers.

Question 7

Which of the following statements is/are correct about Natural gas?

1.   The largest component of natural gas is methane.

2.   Natural gas is odors in smell with high explosive properties.

3.   It is formed by decomposing plant and animal under intense heat and pressure.

Select the correct option from the code given below.

a)     1 and 2 only

b)    2 and 3 only

c)     1 and 3 only

d)    1, 2 and 3

Ans-d

Explanation-

Natural gas

·       Natural gas is a naturally occurring hydrocarbon gas mixture consisting of methane and commonly including varying amounts of other higher alkanes, and sometimes a small percentage of carbon dioxide, nitrogen, hydrogen sulfide, or helium. 

• The largest component of natural gas is methane, a compound with one carbon atom and four hydrogen atoms (CH4).
• Natural gas is colorless and odorless, and explosive, so a sulfur-smell (similar to rotten eggs) is usually added for early detection of leaks.
• Natural gas is formed when layers of decomposing plant and animal matter are exposed to intense heat and pressure under the surface of the Earth over millions of years.

Question 8

Which of the following statements is/are correct about Dravidian style of temple architecture?

1.   This style of temple architecture was pioneered by the Pallavas.

2.   The Dravida temple is enclosed within a compound wall.

3.   A large water reservoir, or a temple tank, is commonly enclosed within the complex.

Select the correct option from the code given below.

a)     1 and 2 only

b)    2 and 3 only

c)     1 and 3 only

d)    1, 2 and 3

Ans- d

Explanation-

Dravidian style of temple architecture

·       The Dravidian style of temple architecture of South India was pioneered by the Pallavas who reigned in parts of Karnataka, Andhra Pradesh, and northern Tamil Nadu until the ninth century. Although they were mostly Shaivite, several Vaishnava shrines also survived from their reign.

• The early buildings are generally attributed to the reign of Mahendravarman I, a contemporary of the Chalukyan king, Pulakesin II of Karnataka. Narasimhavarman I, also known as Mamalla, who acceded the Pallava throne around 640 CE, is celebrated for his architectural works.

The main features of this style of temple architecture are:

·       The Dravida temple is enclosed within a compound wall.

·       The front wall has an entrance gateway in its centre, which is known as a Gopuram.

·       The shape of the main temple tower known as vimana in Tamil Nadu is like a stepped pyramid that rises up geometrically rather than the curving shikhara of North India.

·       In the South Indian temple, the word ‘shikhara’ is used only for the crowning element at the top of the temple which is usually shaped like a small stupika or an octagonal cupola— this is equivalent to the amalak and kalasha of North Indian temples.

·       Fierce Dvarapalas or the door-keepers guarding the temple adorn the entrance to garbhagriha

·       It is common to find a large water reservoir, or a temple tank, enclosed within the complex.

·       At some of the most sacred temples in South India, the main temple in which the garbhagriha is situated has, in fact, one of the smallest towers. This is because it is usually the oldest part of the temple.

·       The famous example of this style is Meenakshi temple of Madurai. Prakarm is an additional feature which is huge corridors along the roofed ambulatory passageway of Temple.

Source- The Hindu Newspaper/ The Indian Express/ Down to Earth /PIB

Question 9

With reference to Bioenergy crops, consider the following statements:

1. Bioenergy crops can be grown in marginal soils.
2. Converting annual crops to perennial bioenergy crops can induce a cooling effect on the areas where they are cultivated.

Which of the statements given above is/are incorrect?

a)     1 only

b)    2 only

c)     Both 1 and 2

d)    Neither 1 nor 2

Ans- d

Explanation-

·       Bioenergy crops are defined as any plant material used to produce bioenergy. These crops have the capacity to produce large volumes of biomass, high energy potential and can be grown in marginal soils. 

·       According to a study, converting annual crops to perennial bioenergy crops can induce a cooling effect on the areas where they are cultivated. 

Question 10

Arrange the following ports from South to North:

1. Colombo
2. Trincomalee
3. Hambantota

Select the correct answer from the codes given below:

a)     1 2 3

b)    3 2 1

c)     1 3 2

d)    3 1 2

Ans- d

Explanation-