UNIT 4

MCQS
ROLE OF PRIORITY SECTOR
AND
MSME IN THE INDIAN
ECONOMY

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Q1. As per revised priority sector lending norms, Bank finance to start-
ups up to what amount are included under Priority Sector Lending?
A)Rs 100 cr
B)Rs 50 cr
C)Rs 25 cr
D)Rs 10 cr

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Ans – B
Q2.As per revised PSL guidelines, Sub Target for Small & Marginal
Farmers for the commercial Banks have been increased to ……….% to
be implemented in a phasmanner by March 2024.
A)8%
B)9%
C)10%
D)12%

Ans – C

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Q3.As per revised PSL guidelines, Sub Target for Weaker Sections for
commercial Banks have been increased to ______% to be
implemented in a phased manner by March 2024.
A)11%
B)12%
C)14%
D)15%

Ans – B

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Q4. RBI is empowered to issue Priority Sector Lending guidelines under
Which Act/Section?
a)Section 22 of the banking Regulation Act 1949
b)Section 31 of the RBI act and Section 24 of the Banking Regulation
act 1949
c)Sections 21 and 35A of the Banking Regulation Act, 1949
d) None of these

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Ans – A
Q5.The target of micro enterprises is …………% ANBC or credit
equivalent amount of Off balance sheet exposure, whichever is ……….
A)7.5%, lower
B)7.5%, higher
C)10%, higher
D)10%, lower

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Ans – B
Qn6.Foreign banks with less than twenty branches have to achieve a
total priority sector target of ………… of ANBC or credit equivalent of
off balance sheet exposure Whichever is ………
A)40%, higher
B)75%, higher
C)40%, lower
D)No such target for foreign banks With less than 20 branches

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Ans – A
Qn7. What is the agriculture loan target for foreign banks with less
than 20 branches?
A)18% of ANBC or credit equivalent of off balance sheet exposure,
whichever is higher
B)40% of ANBC or credit equivalent Of off balance sheet exposure,
Whichever is higher
C)32% of ANBC or credit equivalent of off balance sheet exposure,
whichever is higher
D)No such target for foreign banks With less than 20 branches

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Ans – D
Qn8.Which of the following is correct for Target for priority sector
advances for foreign branches with less than 20 branches?
A)40 percent of ANBC or CEOBE Whichever is higher
B)Out of which up to 32% can be in The form of lending to Exports
C)Not less than 8% can be to any Other priority sector
D)All of these

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Ans – D
Qn9.……. acts as a Principal Financial Institution for the Medium
Enterprise (MSME) sector for the Promotion, Financing and
Development of the Micro, Small & medium enterprises
A)Mudra Bank
B)RBI
C)SBI
D)SIDBI

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Ans – D
Qn10.For consideration of sanction of loans to MSMEs, submission of
…………… is a mandatory requirement.
A)Udyam Registration Certificate
B)MSME Registration Certificate
C)Certificate of incorporation
D)Certificate of Commencement Of Business

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Ans – A
Qn11.Which among the following is not A priority sector?
A)Information Technology
B)Social Infrastructure
C)MSME
D)Agriculture

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Ans – A
Qn12.As per the new definition of MSME, investment in plant and
machinery or equipment does not exceed ………… For a micro
enterprise

(a) Rs. 50 Lakh

(b) Rs. 1 Crore

© Rs. 5 Crore

D)Rs. 10 Crore

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Ans – B
Qn.13Which is not one of the pillars of the Make in India Programme?

(a) New Processes

(b) New Infrastructure

© New Government

D)New Sectors
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Ans – C
Qn14.The “Make in India” project is built on ……..pillars established to
boost entrepreneurship in India .
A)2
B)3
C)4
D)5

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Ans – C
Qn15.CEOBE stands for.
A)Calculative Equivalent Amount of Off-Balance Sheet Exposure
B)Credit Equivalent Amount of Off-Balance Sheet Exposure
C)Credit Equivalent Acquired of Off-Balance Sheet Exposure
D)Cash Equivalent Amount of Off-Balance Sheet Exposure

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 Ans – B
Qn16. Target of PSL for RRB and Small Finance Bank is
A)40% of ANBC or CEOBE whichever Is higher
B)40% of ANBC or CEOBE whichever Is lower
c)75% of ANBC or CEOBE whichever Is higher
D)75% of ANBC or CEOBE whichever Is lower

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Ans – c
Qn17.Which Organisation has assigned priority sector lending (PSL)
status to India’s startup sector?
(a)SBI
(b)Ministry of Finance
©RBI
(d)NITI Ayog

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Ans -C
Qn18.Regional Rural Banks will have a target of………… of total
outstanding for priority sector lending in Agriculture.
A)12%
B)15%
C)18%
D)10%

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Ans -C
Qn19.ANBC is net bank credit plus Investment made by banks in non
SLR bonds held in the held-to-maturity category or credit equivalent
amount of off balance sheet exposure, whichever is higher. What does
‘C’ stand in ANBC?
A)Credit
B)Cash
C)Category
D)Commerce

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Ans – A
Q20.Farmers with landholding of up to 1 Hectare are considered
A)Small Farmers
B)Marginal Farmers
C) Joint Farmers
D)Large Farmers

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Ans -B
Q21.Farmers with a landholding of more than 1 hectare and up to 2
hectares are considered ………. Farmers.
A)Large landlords
B)Marginal Farmers
C)Small Farmers
D)Joint Farmers

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Ans a
Q22.………..._enterprise Is an enterprise where the investment in
plant and machinery or equipment does not exceed Rs. 1 crore and
turnover does not exceed Rs. 5 crore.
A)Micro
B)Small
C)Medium
D)Macro

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Ans – A
Qn23.A ………… enterprise is an enterprise where the investment in
plant and machinery or equipment does not exceed Rs 50 crores and
turnover does not exceed Rs. 250 crore.
A)Macro
B)Micro
C)Small
D)Medium

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Ans – D
Qn24.A ,…….. enterprise is an enterprise where the investment in
plant and machinery or equipment does not exceed Rs. 10 crores and
turnover does not exceed Rs. 50 crores
A)Micro
B)Macro
C)Small
D)Medium

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Ans – C
Qn25.The launch of the new Udyam Registration Portal in July 2020 is
one of the recent efforts made by the government to boost the ease of
doing business for MSMEs. Which of the feature is incorrect?

A)The registration procedure is Entirely online.

B)There are documents or proof necessary to be supplied while
registering as a MSME firm.
C)The registration process is entirely Digital.
D)The registration process is entirely Paperless.

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Ans – B
Qn26.MSMEs’ share in exports assumes significance as the
government has been targeting……….. . In exports by FY27
A)$10 trillion
B)$1 trillion
C)$1 million
D)$1 billion

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Ans – B
Qn27.After agriculture,___________ is the Second most important
source of employment. It employs over 120 million people in India.
A)Education
B)Renewable energy
C)Social needs
D)MSME

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Ans – D
Qn28. PLI scheme covers ………Sectors
A)10
B)11
C)12
D)13

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Ans – D
Qn29 .Individual Micro and Small Enterprises can apply for collateral-
free loans up to …………from the Ministry of MSME and the Small
Industries Development Bank of India (SIDBI).
A)10 lakh
B)1 crore
C)10 crore
D)No limit

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Ans – B

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