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C16 Flashcards

1
Q

The public debt management function is carried out by the

A

Internal Debt Management Department (IDMD) at the Central Office and the Public Debt Office (PDO) at the Offices of the Bank

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2
Q

_______________ provides for debt issuance by the Government of India (GOI) on the security of the Consolidated Fund of India.

A

Article 292 of the Constitution

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3
Q

The matters related to the issue and servicing of Government debt are dealt as per the provisions of the

A

Government Securities Act (GS Act) 2006 and the Government Securities Regulation 2007 framed thereunder.

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4
Q

______________ provides the financial borrowing powers to State Governments.

A

Article 293 of the Constitution of India

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5
Q

State Governments can enter into an agreement with RBI in terms of Section _______________ for their banking and debt management functions.

A

21A of the RBI Act

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6
Q

As on date,______________, have signed agreements with the RBI to manage their debt activities.

A

all State Governments, along with the Union Territories of Puducherry and Jammu and Kashmir

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7
Q

With regard to banking agreement, barring _______________, RBI has banking agreements with all the State Governments and UT of Puducherry and Jammu and Kashmir.

A

Sikkim

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8
Q

Over the years, government debt management has been guided by the three pillars of the Medium-Term Debt Management Strategy (MTDS), viz.

A

cost optimisation, risk mitigation and market development.

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9
Q

Passive consolidation is primarily achieved through

A

re-issuances

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10
Q

Passive consolidation is primarily achieved through re-issuances, accounting for nearly

A

95 percent of bond issuances

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11
Q

active consolidation is done through

A

switches and buy-backs

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12
Q

The Monitoring Group on Cash and Debt Management (MCGDM), a standing committee co-chaired by the

A

Secretary, Department of Economic Affairs, Ministry of Finance, GOI, and the Deputy Governor in-Charge of IDMD, RBI,

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13
Q

borrowing calender of Central and State Governments:

A

half yearly

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14
Q

auctions frewuency

A

weekly

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15
Q

Treasury Bills (T-bills): Indicative borrowing calendar issued

A

quarterly

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16
Q

State Government Dated Securities: Auctioned on

A

Tuesdays

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17
Q

Treasury Bills: Auctioned on

A

Wednesdays

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18
Q

Central Government Dated Securities: Auctioned on

A

Fridays

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19
Q

All auctions settle on a ________________ basis, meaning one business day after the auction.

A

T+1

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20
Q

Fixed rate bonds - They are debt securities that pay a fixed interest rate over their entire term. This interest, known as the

A

coupon,

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21
Q

They are debt securities that pay a fixed interest rate over their entire term. This interest, known as the coupon, is paid periodically, typically

A

semi-annually or annually.

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22
Q

Floating Rate Bonds (FRBs) - These bonds pay coupons based on some benchmark rate (generally linked to

A

the yield of 182- treasury bills

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23
Q

Zero Coupon bonds

A

Treasury Bills, Cash Management Bills issued by the Government of India

24
Q

Floating Rate Savings bond, (2020) Taxable- FRSB 2020 (T) - These are interest bearing, non-tradeable bonds which are repayable on expiry of

A

seven years

25
Q

Floating Rate Savings bond. The coupon/interest rate is not fixed and is linked/pegged with

A

National Saving (NSC) rate with a spread of (+)35 bps over the NSC rate.

26
Q

Floating Rate Savings bond The coupon would be reset on

A

half-yearly basis, on July 01 and January 01 every year

27
Q

Inflation Indexed Bonds (Retail & Wholesale) - Such bonds provide protection from erosion of real returns due to inflation, wherein inflation is measured through inflation index such as

A

Consumer Price Index (CPI) and Wholesale Price index (WPI).

28
Q

In ___________ the Reserve Bank of India introduced the system of Primary Dealers (PDs) in the Government Securities Market.

A

1995,

29
Q

As on September 01, 2024, there are _____________ standalone PDs (standalone PDs are required to registered as NBFCs under Section 45 IA of the RBI Act, 1934) and ____________ bank PDs which undertake Primary Dealership activities departmentally.

A

seven, fourteen

30
Q

________________ largest investor class in Government securities, followed by _________________________

A

Commercial banks in India are the largest investor class in Government securities, followed by Insurance Companies, Provident Funds, Pension Funds, and Mutual Funds.

31
Q

Medium term framework introduced in

A

October 2015.

32
Q

Voluntary retention route introduced in

A

March 2019.

33
Q

Fully accessible route introduced in

A

April 2020.

34
Q

Medium term framework - gsecs and SGS outstanding %

A

6 and 2 %

35
Q

under medium term framework, macro prudential short term limit i.e, not more than ___________ per cent of investment in G secs can have residual maturity of less than one year

A

30

36
Q

combines investment limit through VRR

A

Rs. 250,000 crore

37
Q

minimum retention period through VRR

A

3 years

38
Q

exemptions from macro prudential limits and facility of repu under VRR is up to

A

0.1

39
Q

new issuances in __________ and ______________ year tenor have been excluded from FAR from Juy 29, 2024.

A

14 and 30 year

40
Q

Under FAR, invest without any macro prudential limits in certain specified securities - tenor

A

5, 7, 10, 14 and 30 years

41
Q

In case of surplus cash balance, the amount is invested in _______________– in case of Central Government

A

Bank’s variable rate repo (VRR) and/or fixed rate reverse repo (FRRR)

42
Q

In case of surplus cash balance, the amount is invested in ______________________in case of State Governments.

A

14-day Intermediate Treasury Bills (non-auctioned discounted instrument at reverse repo rate -2%)

43
Q

To tide over temporary mismatches in the receipts and payments of Governments,___________ empowers RBI to grant Ways and Means Advances to Central Government and State Governments, which is in the nature of uncollaterised advance.

A

Section17 (5) of the RBI Act

44
Q

The WMA limit is fixed by RBI, separately for each____________, in consultation with the Central Government.

A

half year

45
Q

when the WMA limit is crossed, the Central government enters into an overdraft (OD) which has to be cleared within _______________ consecutive working days.

A

10

46
Q

In addition to WMA, State Governments are also eligible for a__________________, which is granted against collateral of Government Securities held by State Governments.

A

Special Drawing Facility (SDF)

47
Q

SDF can be availed against the investment in Consolidated Sinking Funds (CSF)/ Guarantee Redemption Funds (GRF) at

A

repo rate-2%

48
Q

SDF can be availed against Auction Treasury Bills (ATBs) at

A

repo rate -1%.

49
Q

For state government, In case of WMA, interest charged will be on repo rate for a period of maximum three months,_____________ per cent in case of more than three months.

A

one per cent

50
Q

State Governments can be in OD for a maximum of

A

14 consecutive working days and 36 days in a quarter.

51
Q

State Governments maintain the Consolidated Sinking Fund (CSF) and the Guarantee Redemption Funds (GRF) with the Reserve Bank as __________________-

A

buffers for repayment of their liabilities.

52
Q

Consolidated Sinking Fund is maintained by states for

A

amortisation of all loan including loans from banks, liabilities on account of NSSF, etc

53
Q

Apart from these two funds, on a request received from the_______________, a Budget Stabilisation Fund has been established which would cater to the needs of the State in mitigating the risk of revenue shocks on the State budget. The fund aims at reducing the impact of volatile revenue on the State’s economy.

A

Government of Odisha

54
Q

The RBI Retail Direct scheme was launched on

A

November 12, 2021.

55
Q

RBI Retail Direct Scheme offers transparency, easy accessibility to retail investors to invest in _______

A

government securities, including investment in Sovereign Gold Bond, floating rate savings bond (FRSB), and gives the retail investors flexibility to manage their investments.

56
Q

To provide liquidity in the secondary market for retail investors, the Primary Dealers were required to present on the

A

Negotiated Dealing System – Order Matching (NDS-OM) platform (odd-lot and request for quotes segment) throughout market hours and respond to buy/sell requests from RDG account holders

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