Banking Awareness Set 25 (Priority Sector Lending Certificates )

This set contains banking awareness questions for various upcoming exams like SBI PO, IBPS PO, Clerk, NIACL Assistant and various other competitive exams. This set contains questions from the topic: Priority Sector Lending Certificates (PSLC)

  1. Which of the following bank cannot issue Priority Sector Lending Certificates (PSLC)?
    A) Regional Rural Banks (RRBs)
    B) Local Area Banks (LABs)
    C) Small Finance Banks
    D) Payments Bank
    View Answer
    Option D
    Explanation
    : Payments Bank cannot buy/sell PSLC.
    Scheduled Commercial Banks (SCBs), Regional Rural Banks (RRBs), Local Area Banks (LABs), Small Finance Banks (when they become operational) and Urban Co-operative Banks who have originated PSL eligible category loans subject to such regulations as may be issued by the Bank.
  2. PSLCs will be traded through ______ .
    A) e-kuber portal
    B) Negotiated Dealing System (NDS)
    C) TReDS
    D) e-BCP
    View Answer
    Option A
    Explanation
    : The PSLCs will be traded through the CBS portal (e-Kuber) of RBI.
  3. All the issued PSLCs expire on which date of the year?
    A) 31 March
    B) 1 April
    C) 31 December
    D) 1 January
    View Answer
    Option B
    Explanation
    : All PSLCs will be valid till March 31st and will expire on April 1st.
  4. How many types of PSLCs are present in the system?
    A) 3
    B) 4
    C) 5
    D) 8
    View Answer
    Option B
    Explanation
    : Four
  5. Which of the following is not a valid PSLC?
    A) PSLC – Agriculture
    B) PSLC – General
    C) PSLC – SF/MF
    D) PSLC- Special
    View Answer
    Option D
    Explanation
    : The valid types are:
    i) PSLC Agriculture: Counting for achievement towards the total agriculture lending target.
    ii) PSLC SF/MF: Counting for achievement towards the sub-target for lending to Small and Marginal Farmers.
    iii) PSLC Micro Enterprises: Counting for achievement towards the sub target for lending to Micro Enterprises.
    iv) PSLC General: Counting for achievement towards the overall priority sector target.
  6. A bank is permitted to issue PSLCs upto __ percent of previous year’s PSL achievement?
    A) 40%
    B) 50%
    C) 75%
    D) 100%
    View Answer
    Option B
    Explanation
    : A bank is permitted to issue PSLCs upto 50 percent of previous year’s PSL achievement.
  7. All domestic and foreign banks with at least ____ branches are required to lend a minimum of ____ per cent of their total to the priority sector.
    A) 10, 50
    B) 50, 50
    C) 20, 40
    D) 50, 40
    View Answer
    Option C
    Explanation
    : All domestic and foreign banks with at least 20 branches are required to lend a minimum of 40 per cent of their total loans [Adjusted Net Bank Credit or credit equivalent amount of off-balance sheet exposure (whichever is higher)] to the priority sector (agriculture, micro enterprises, education, social housing, etc.). They are also required to meet sub-targets such as 18 per cent for agriculture (8 per cent for small and marginal farmers), 7.5 per cent for micro enterprises and 10 per cent for weaker sections.
  8. What is a standard lot size of PSLC?
    A) Rs 50 lakh
    B) Rs 25 lakh
    C) Rs 10 lakh
    D) Rs 5 lakh
    View Answer
    Option B
    Explanation
    : The PSLCs would have a standard lot size of Rs. 25 lakh and multiples thereof.
  9. What is the minimum fee prescribed by the RBI, for purchase of any PSLC?
    A) 5% of the total PSLC
    B) 2% of the total PSLC
    C) 1% of the total PSLC
    D) No such limit
    View Answer
    Option D
    Explanation
    : The premium will be completely market determined. No floor/ ceiling has been prescribed by RBI in this regard.
  10. Identify the false statement.
    A) There are four types of PSLC.
    B) Urban Co-operative Banks can issue PSLC
    C) A PSLC will expire after 2 years of the date of issue
    D) The PSLCs will be traded through the CBS portal (e-Kuber) of RBI.
    View Answer
    Option C
    Explanation
    : The duration of the PSLCs will depend on the date of issue with all PSLCs being valid till March 31st and expiring on April 1st.

 

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