The 2014 Codex
Questions 31 to 40 (Set A)
The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to
The Secret Whisper
Official Key: (a) banking operations
These are fundamental terms of the Reserve Bank of India's (RBI) monetary policy framework used extensively in banking operations.
- Marginal Standing Facility (MSF): A penal window for scheduled commercial banks to borrow overnight liquidity from the RBI against approved government securities when their inter-bank liquidity completely dries up.
- Net Demand and Time Liabilities (NDTL): This is the total sum of demand deposits (current/savings accounts) and time deposits (fixed deposits) held by a bank. The RBI strictly mandates that a certain percentage of a bank's NDTL must be kept as Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
The Central Ledger
The Last Mile Bank
What is/are the facility/facilities the beneficiaries can get from the services of Business Correspondent (Bank Saathi) in branchless areas?
1. It enables the beneficiaries to draw their subsidies and social security benefits in their villages.
2. It enables the beneficiaries in the rural areas to make deposits and withdrawals.
Select the correct answer using the code given below.
The Secret Whisper
Official Key: (c) Both 1 and 2
The Business Correspondent (BC) model was introduced by the RBI to aggressively push financial inclusion into remote, branchless rural areas where setting up a brick-and-mortar bank branch is economically unviable.
These BCs (often called Bank Saathis or Bank Mitras) carry handheld Micro-ATMs linked to core banking systems. They serve as "mobile banks" at the village level. They allow villagers to natively make cash deposits and withdrawals (2), and critically, they allow poor beneficiaries to directly withdraw their Direct Benefit Transfer (DBT) subsidies, MNREGA wages, and pensions directly in their own villages (1) without traveling miles to a bank.
Route: [REALM 112: Financial Inclusion Mechanisms]In the context of Indian economy, which of the following is/are the purpose/purposes of 'Statutory Reserve Requirements'?
1. To enable the Central Bank to control the amount of advances the banks can create
2. To make the people's deposits with banks safe and liquid
3. To prevent the commercial banks from making excessive profits
4. To force the banks to have sufficient vault cash to meet their day-to-day requirements
Select the correct answer using the code given below.
The Secret Whisper
Official Key: (a) 1 only
Statutory Reserve Requirements include the Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR).
1 is True: The primary macroeconomic purpose of these ratios is to act as a monetary policy tool for the RBI. By raising or lowering the CRR/SLR, the RBI directly controls the amount of credit (advances) that commercial banks can create in the economy, thereby controlling inflation and money supply.
Why the others are False: While SLR holds liquid assets, the core objective of CRR is not to make people's deposits safe (that is done by DICGC deposit insurance and capital adequacy norms). It is certainly not to prevent excessive profits. Furthermore, CRR is held with the RBI, not as "vault cash" to meet the bank's daily withdrawal requirements.
Route: [REALM 114: Instruments of Monetary Policy (CRR/SLR)]The Credit Valve
The Spark of Jasmine
Recently, a series of uprisings of people referred to as 'Arab Spring' originally started from
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Official Key: (d) Tunisia
The Arab Spring was a monumental wave of pro-democracy protests and uprisings that swept across the Middle East and North Africa beginning in late 2010.
The catalyst and absolute origin point of the Arab Spring occurred in Tunisia (often called the Jasmine Revolution). On December 17, 2010, a young Tunisian street vendor named Mohamed Bouazizi set himself on fire in protest against police corruption and ill-treatment. This horrific event triggered massive nationwide protests that ousted President Zine El Abidine Ben Ali, creating a domino effect that subsequently spread to Egypt, Libya, Yemen, and Syria.
Route: [REALM 132: Middle East Geopolitics (Arab Spring)]Consider the following countries: 1. Denmark, 2. Japan, 3. Russian Federation, 4. United Kingdom, 5. United States of America. Which of the above are the members of the 'Arctic Council'?
The Secret Whisper
Official Key: (d) 1, 3 and 5
The Arctic Council is the leading intergovernmental forum promoting cooperation in the Arctic. Membership is strictly limited to the eight sovereign states that have actual geographical territory situated above the Arctic Circle.
- 1. Denmark (True): Included because it controls the massive Arctic territory of Greenland.
- 3. Russian Federation (True): Contains the largest expanse of Arctic coastline in the world.
- 5. USA (True): Included specifically because of the state of Alaska, which crosses the Arctic Circle.
- 2. Japan & 4. UK (False): Both are far south of the Arctic Circle. They hold "Observer" status in the Council, but they are absolutely not full members.
The Northern Eight
The Conflict Geography
Consider the following pairs: Region often in news : Country
| 1. Chechnya | Russian Federation |
| 2. Darfur | Mali |
| 3. Swat Valley | Iraq |
Which of the above pairs is/are correctly matched?
The Secret Whisper
Official Key: (a) 1 only
This maps famous geopolitical flashpoints to their respective countries.
- 1. Chechnya (True): A republic located in the North Caucasus region of Eastern Europe. It is firmly a part of the Russian Federation, known for two bloody separatist wars against Russia in the 1990s and 2000s.
- 2. Darfur (False): Darfur is a massive region in western Sudan, completely unrelated to Mali. It was the site of the infamous Janjaweed genocide.
- 3. Swat Valley (False): Known as the "Switzerland of the East" and famously the home of Malala Yousafzai, the Swat Valley is situated in the Khyber Pakhtunkhwa province of Pakistan, not Iraq.
With reference to Agni-IV Missile, which of the following statements is/are correct?
1. It is a surface-to-surface missile.
2. It is fuelled by liquid propellant only.
3. It can deliver one-tonne nuclear warheads about 7500 km away.
Select the correct answer using the code given below.
The Secret Whisper
Official Key: (a) 1 only
The Agni series is the backbone of India's nuclear deterrence, developed under the IGMDP by DRDO.
- Statement 1 is True: The entire Agni series consists of ballistic surface-to-surface missiles.
- Statement 2 is False: It is not "liquid only". The Agni-IV is a two-stage missile powered exclusively by solid propellants. (Solid fuel is preferred for military ICBMs because it allows for rapid launch readiness, unlike highly volatile liquid fuels).
- Statement 3 is False: This is an exaggeration trap. While it can carry a 1-tonne nuclear payload, the strike range of Agni-IV is precisely ~4,000 km. It is the much larger Agni-V (and the conceptual Agni-VI) that possesses true intercontinental ranges exceeding 5000-8000 km.
The Ballistic Arc
The Subterranean Gas
With reference to two non-conventional energy sources called 'coalbed methane' and 'shale gas', consider the following statements:
1. Coalbed methane is the pure methane gas extracted from coal seams, while shale gas is a mixture of propane and butane only that can be extracted from fine-grained sedimentary rocks.
2. In India, abundant coalbed methane sources exist, but so far no shale gas sources have been found.
Which of the statements given above is/are correct?
The Secret Whisper
Official Key: (d) Neither 1 nor 2
This deeply tests the chemical composition and geographical distribution of fossil fuels.
Statement 1 is False: While Coalbed Methane (CBM) is indeed methane extracted from coal seams, the definition of Shale Gas is completely wrong. Shale gas is essentially natural gas trapped within shale formations. Natural gas is overwhelmingly composed of Methane (70-90%), alongside smaller amounts of ethane, propane, and butane. It is absolutely not "a mixture of propane and butane only."
Statement 2 is False: India has abundant sources of both CBM (in Jharkhand/Bengal) AND Shale Gas. Several major sedimentary basins in India have proven shale gas potential, including the Cambay Basin, Krishna-Godavari Basin, and Cauvery Basin.
Route: [REALM 69: Non-Conventional Energy Resources (CBM & Shale)]With reference to 'Changpa' community of India, consider the following statements:
1. They live mainly in the State of Uttarakhand.
2. They rear the Pashmina goats that yield a fine wool.
3. They are kept in the category of Scheduled Tribes.
Which of the statements given above is/are correct?
The Secret Whisper
Official Key: (b) 2 and 3 only
The Changpa are a semi-nomadic Tibetan people found mainly in the Changtang plateau.
- Statement 1 is False: The Changtang plateau is located in the high-altitude region of Ladakh (historically part of Jammu & Kashmir). They do not live in Uttarakhand.
- Statement 2 is True: They are globally famous for rearing the rare Changthangi goat. These high-altitude goats produce the incredibly fine and ultra-expensive Pashmina wool, which protects them from the extreme sub-zero temperatures.
- Statement 3 is True: Recognizing their unique ethnic identity and socio-economic isolation, the Government of India officially recognizes the Changpa as a Scheduled Tribe.
The Highland Herders
The Desert Gold
In India, cluster bean (Guar) is traditionally used as a vegetable or animal feed, but recently the cultivation of this has assumed significance. Which one of the following statements is correct in this context?
The Secret Whisper
Official Key: (b) The gum made from its seeds is used in the extraction of shale gas
Guar (cluster bean) is predominantly grown in the arid regions of Rajasthan and Haryana.
It suddenly assumed massive global economic significance due to the U.S. shale gas boom. The seeds of the Guar plant are processed to create Guar Gum, a highly viscous thickening agent. This gum is heavily exported and used as a critical ingredient in the "fracking fluid" injected into rocks during the hydraulic fracturing (fracking) process for the extraction of shale gas.
Note: Biodiesel (Option D) is traditionally associated with Jatropha or Pongamia seeds, not Guar.
Route: [REALM 69: Non-Conventional Energy (Shale Gas Fracking)]