UPSC Prelims 2014 · GS Paper I
Question 31: Economy and Social Development
The terms 'Marginal Standing Facility Rate' and 'Net Demand and Time Liabilities', sometimes appearing in news, are used in relation to
AnswerUPSC’s answer is (a).
Both terms belong to banking. The Marginal Standing Facility is a window of the Reserve Bank of India through which scheduled banks can borrow overnight, up to a limit, against government securities, at a rate above the repo rate; it is a penal-rate safety valve for liquidity shortages. Net Demand and Time Liabilities is the total of a bank's demand and time deposits and other liabilities, minus interbank items, and is the base on which CRR and SLR are calculated.
Why each option is right or wrong
- (a) Right. Both terms are used in banking operations and monetary policy.
- (b) Wrong. They have nothing to do with communication networks.
- (c) Wrong. They are not military terms.
- (d) Wrong. They do not relate to agricultural markets.
Answer: UPSC’s key. Explanation: written by UPSC Grade, not by UPSC.
Source: UPSC, Civil Services (Preliminary) Examination 2014, General Studies Paper I, Series A. The paper on upsc.gov.in.