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RBI Grade B Finance & Management Quiz for Phase II 2022

Finance and Management (FM) Questions with the answer. RBI Grade B Finance and Management Notes PDF. RBI Grade B FM Study Material PDF. RBI Finance and Management (FM) Books, PDF, Previous Papers, Question Set, and study material. As we all know that The Reserve Bank of India (RBI) conducted the RBI Grade B Phase I Exam for the post of Grade B (Grade ‘B’ (DR) – (General) & others). It’s the right time when you should start your RBI Grade B 2022 Phase II preparation with full pace.

If you are preparing for RBI Grade B 2022 (Phase II), you will come across a section on “Finance and Management (FM)” wherein 65 questions will be there carrying 50 marks. Here we are providing you with “Finance and Management (FM) Questions for RBI Grade B” with answers based on the latest pattern of your daily practice.

RBI Grade B Finance & Management Questions with Answer Set-8


1. It is a framework structured around the changing needs and capabilities of an organization. It is used to prepare, adopt and implement fundamental and radical organizational changes, including its culture, policies, procedures and physical environment. What is being described here?

A. Disruptive Change
B. Organisational Review exercise
C. Organisational Change Management
D. Training or Knowledge Transfer
E. Human Resources Development

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Correct Answer: C. Organisational Change Management

Explanation-Organizational Change Management (OCM) is a framework structured around the changing needs and capabilities of an organization. OCM is used to prepare, adopt and implement fundamental and radical organizational changes, including its culture, policies, procedures and physical environment, as well as employee roles, skills and responsibilities. Simply put, OCM addresses the people side of change management.

2. Motion study, functional foremanship and standardization are the techniques used in which method?

A. Job Evaluation
B. Scientific management
C. Management by Objective
D. Job analysis
E. Supply chain management

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Correct Answer – B. Scientific management

Explanation- Scientific management is a theory of management that analyzes and synthesizes workflows. Its main objective is improving economic efficiency, especially labour productivity. It was one of the earliest attempts to apply science to the engineering of processes and to management. The founding father of scientific management theory is Frederick W. Taylor.

Various techniques used in Scientific management are:

  • Time Study- It is a technique which enables the manager to ascertain standard time taken for performing a specified job. Average worker is selected and assigned the job and then with the help of a stop watch, time is ascertained for performing that particular job.
  • Motion Study – In this study, movement of body and limbs required to perform a job are closely observed. In other words, it refers to the study of movement of an operator on machine involved in a particular task. The purpose of motion study is to eliminate useless motions and determine the best way of doing the job.
  • Functional foremanship – This technique was developed to improve the quality of work as single supervisor may not be an expert in all the aspects of the work. Therefore workers are to be supervised by specialist foreman. The scheme of functional foremanship is an extension of principle of specialization at the supervisory level. Taylor advocated appointment of 8 foramen, 4 at the planning level & other 4 at implementation level.
  • Standardisation – It implies the physical attitude of products should be such that it meets the requirements & needs of customers. Taylor advocated that tools & equipments as well as working conditions should be standardized to achieve standard output from workers.

3. “It is a set of principles, values, standards, or rules of behaviour that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations”. Which aspect of an organisation is being described here?
A. Rulebook
B. Citizen’s Charter
C. Code of Conduct
D. Code of Ethics
E. Memorandum of Understanding

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Correct Answer – C. Code of Conduct

Explanation:A code of conduct is a set of rules outlining the social norms, religious rules and responsibilities of, and or proper practices for, an individual. The International Federation of Accountants defines a Code of Conduct as: “Principles, values, standards, or rules of behaviour that guide the decisions, procedures and systems of an organization in a way that (a) contributes to the welfare of its key stakeholders, and (b) respects the rights of all constituents affected by its operations.” A company code of conduct is a common code of conduct written for employees of a company, which protects the business and informs the employees of the company’s expectations.

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4. Which of the following is/are extrinsic motivators?

1. Bonus offered by the company

2. Praise from colleagues or manager

3. Curiosity about one’s surrounding

4. Sense of acceptance
A. 2 and 4
B. 1 and 3
C. 3 and 4
D. 2 and 3
E. 1 and 2

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Correct Answer – E. 1 and 2

Explanation- There are two types of motivation, Intrinsic and Extrinsic motivation and the entities that provide such motivations are called motivators (intrinsic or extrinsic). Intrinsic motivation means that the individual’s motivational stimuli are coming from within. The individual has the desire to perform a specific task, because its results are in accordance with his belief system or fulfills a desire and therefore importance is attached to it. Some examples of intrinsic motivators are: acceptance, curiosity, honour, power, etc. Extrinsic motivation means that the individual’s motivational stimuli are coming from outside. In other words, our desires to perform a task are controlled by an outside source. Some examples of extrinsic motivators are: pay package, bonus, praise, awards, etc.

5. What does the ‘O’ in MIBOR stands for?

A. Offer
B. Onset
C. Offset
D. Over
E. Official

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Correct Answer: A. Offer

Explanation- MIBOR stands for Mumbai Interbank Offer Rate. It is one iteration of India’s interbank rate, which is the rate of interest charged by a bank on a short-term loan to another bank.

6. What is the minimum cash balance that the Central government has to maintain with the RBI on a daily basis?

A. Rs 10 billion
B. Rs 1 million
C. Rs 100 crore
D. Rs 10 crore
E. Rs 1 crore

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Correct Answer: D. Rs 10 crore

Explanation:Under the administrative arrangements, the Central Government is required to maintain a minimum cash balance with the Reserve Bank. Currently, this amount is Rs.10 crore on a daily basis and Rs.100 crore on Fridays, as also at the annual account closing day of the Centre and the Reserve Bank (end of March and June).

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7. What is the minimum share capital (paid-up capital and reserves) required for starting an Urban Cooperative Bank in India?

A. Rs 100 crore
B. Rs 10 crore
C. Rs 1 crore
D. Rs 10 lakh
E. Rs 1 lakh

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Correct Answer – E. Rs 1 lakh

Explanation:Under the provisions of Section 11 of the Banking Regulation Act, 1949 (As Applicable to Cooperative Societies), no primary (urban) cooperative bank can commence or carry on banking business if the real or exchangeable value of its paid-up capital and reserves is less than Rs. 1 lakh.

8. What is the Hawthorne effect?

A. It is the tendency of managers to give more work to employees that perform better than others.
B. It is the bias of managers to reward employees who have similar traits to them.
C. It is the tendency of people to work better when they are under observation.
D. It is the tendency of employees to work less under a task centred leadership.
E. It is the tendency of people to work better in an employee-friendly environment.

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Correct Answer – C. It is the tendency of people to work better when they are under observation.

Explanation- The Hawthorne effect (also referred to as the observer effect) is a type of reactivity in which individuals modify an aspect of their behavior in response to their awareness of being observed. The original research at the Hawthorne Works in Cicero, Illinois, on lighting changes and work structure changes such as working hours and break times was originally interpreted by Elton Mayo and others to mean that paying attention to overall worker needs would improve productivity. Later interpretations such as that done by Landsberger suggested that the novelty of being research subjects and the increased attention from such could lead to temporary increases in workers’ productivity. This interpretation was dubbed “the Hawthorne effect”.

9. What is Disinflation?
A. It is an increase in the fiscal deficit of an economy.
B. It is a decrease in the real GDP of an economy (as compared to base year).
C. It is a sudden fall in general price levels of commodities in the economy.
D. It is a decrease in the rate of inflation in the economy.
E. It is a decrease in general price levels of commodities in the economy.

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Correct Answer – D. It is a decrease in the rate of inflation in the economy.

Explanation-Disinflation is a reduction in the rate of inflation. Although they may sound the same, disinflation should not be confused with deflation. Deflation is a decrease in general price levels of commodities throughout an economy, while disinflation is what happens when price inflation slows down temporarily.

10. Credit Information Companies (CICs) in India are regulated by which institution?
A. Ministry of Corporate Affairs
B. CRISIL
C. RBI
D. Ministry of Finance
E. SEBI

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Correct Answer – C. RBI

Explanation- The CICs have the widest mandate for collection and sharing of all sort of credit information from banks, non-banks and other credit providing agencies. They are regulated by RBI under the Credit Information Companies (Regulation) Act (CICRA), 2005.


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Finance & Management (FM) Book PDF for RBI Grade B Phase II 2022