RBI Assistant: 27-question practice mock

Financial inclusion in India is usually reported as a count of accounts opened, and by that measure the last decade looks like an unqualified success. Hundreds of millions of accounts have been created, many for people who had never before set foot in a bank. But an account is a tool, not a destination, and the distance between owning one and using one has turned out to be wide. A striking proportion of the accounts opened under inclusion drives fall dormant within a year, holding a zero balance and recording no transaction. The usual explanation blames the customer's poverty, as though people with little money simply have nothing to deposit. The passage of time has undermined that view. Dormancy is high even among account holders who receive regular wage or welfare transfers, which means money does move through these accounts; it simply does not stay. The more careful reading is that the accounts fail a test of relevance. They are opened to satisfy a target, not to meet a need the holder recognises, and an instrument that answers no felt need is used once and then abandoned. If that reading is right, the policy implication is uncomfortable. Counting accounts measures the ease of supply, which the system has largely solved, while saying nothing about demand, which it has not. A programme judged by the number of accounts it opens will keep opening accounts; a programme judged by whether people's financial lives actually improve would have to do something harder, and quite different.

Study the following arrangement and answer the questions based on it: 5 R 2 P K 9 # M 3 A 7 Q $ 1 B W 6 @ E 4 U 8 D T

The volume of digital retail payments in India has grown at a pace few regulators anticipated, and the instrument responsible is one that charges the customer nothing. That design choice was deliberate: a payment system carrying no fee for the payer spreads faster than one that does. It also created a problem that has not been solved. Someone must still pay for the servers, the fraud checks and the settlement guarantees, and with the customer exempt and the merchant discount rate on small transactions set at zero, the cost has settled on the banks that sponsor the system. They have absorbed it so far because a customer who pays digitally is a customer whose deposits stay within the bank, and the deposit is worth more than the processing cost. This logic holds while volumes are concentrated in large banks with cheap deposits. It weakens sharply for smaller institutions, which carry the same per-transaction cost against a costlier deposit base. Regulators are therefore being pressed to permit a fee somewhere in the chain, and are reluctant, because every proposal so far shifts the charge to the merchant, and the merchants most sensitive to it are the small ones whose adoption the system was built to win.

A crop insurance scheme is usually judged by how much it pays. A more revealing test is how quickly. A farmer whose claim is settled six months after a failed harvest has already borrowed to plant the next one, and has done so at whatever rate the local lender set, which is rarely the rate the scheme was meant to spare him. The payout, when it arrives, retires that debt rather than financing the sowing it was designed to protect. The money is not wasted, but its purpose has been quietly inverted. Delay is built into the way losses are measured. Most schemes settle on the basis of crop-cutting experiments, in which sample harvests across a block are weighed and the average yield compared with a threshold. The method is defensible, and it is slow: it needs field staff, a harvest to sample, and a chain of approvals afterwards. Satellite assessment promises speed, and pilots have cut settlement times sharply, but it estimates area-wide vegetation rather than an individual field's yield, so a farmer whose own plot failed in a block that did well is left uncompensated and unconvinced. Faster settlement is therefore not simply a matter of better technology. It requires deciding whose loss the scheme insures: the block's, which can be measured quickly, or the farm's, which cannot.