Master the legal and regulatory segment of the Nepal Rastra Bank (NRB) Officer Level exam with this comprehensive practice set. This post features 25 high-yield Multiple Choice Questions (MCQs) specifically designed to test your knowledge of the NRB Act 2058, the Banking Offence and Punishment Act 2064, and the latest NRB Directives. Additionally, we cover crucial NFRS standards and monetary policy basics essential for Class A commercial banking preparation. Each question includes a detailed answer key and brief explanations to strengthen your conceptual clarity and help you secure a top rank in the competitive PSC examinations.
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1. According to the Nepal Rastra Bank Act,
2058, what is the primary objective of the Bank?
a) To maximise the profit of the Government
of Nepal
b) To maintain price and balance of payment
stability
c) To provide personal loans to citizens
d) To manage the stock market index
2. Under the Banking Offence and
Punishment Act, 2064, who is responsible for investigating banking offences?
a) The Nepal Police
b) The Chief Executive Officer of the
concerned bank
c) The Auditor General
d) Nepal Rastra Bank's IT department
3. As per the latest NRB Directives, what is the minimum Capital Adequacy Ratio (CAR) for commercial banks, including the conservation buffer?
a) 11%
b) 8%
c) 15%
d) 5%
4. Which Nepal Financial Reporting
Standards (NFRS) deal with 'Financial Instruments' and introduce the Expected
Credit Loss (ECL) model?
a) NFRS 15
b) NAS 12 (Nepal Accounting Standards)
c) NFRS 9
d) NFRS 16
5. Who appoints the Governor of Nepal
Rastra Bank?
a) The President of Nepal
b) The Public Service Commission
c) The Government of Nepal, Council of
Ministers
d) The Ministry of Finance only
6. According to the NRB Act 2058, the Board of Directors of NRB consists of how many members?
a) 5 members
b) 7 members
c) 9 members
d) 11 members
7. What is the maximum penalty for a
'Banking Offence' involving a misappropriation of more than 1 billion rupees?
a) 9 to 12 years of imprisonment
b) Life imprisonment
c) 2 years of imprisonment
d) Community service
8. NRB Directive No. 2 specifies the classification of loans. A loan past due for 3 to 6 months is classified as:
a) Pass
b) Substandard
c) Doubtful
d) Loss
9. Which NFRS standard corresponds to 'Leases' and requires most leases to be recognised on the balance sheet?
a) NFRS 16
b) NFRS 3
c) NAS 2
d) NFRS 1
10. In the context of NRB Directives, 'CD
Ratio' stands for:
a) Current Deposit Ratio
b) Capital to Dividend Ratio
c) Credit to Deposit Ratio
d) Cash to Debt Ratio
11. What is the term of a Deputy Governor
of Nepal Rastra Bank?
a) 4 years
b) 5 years
c) 6 years
d) 2 years
12. Under the Banking Offence and Punishment Act, issuing a cheque without sufficient funds (Cheque Bounce) is:
a) A civil matter only
b) An immediate criminal offence
c) Allowed if paid within 90 days
d) Not a crime if it's a personal cheque
13. Which NRB Directive is focused on
Corporate Governance requirements for Banks and Financial Institutions (BFIs)?
a) Directive No. 1
b) Directive No. 6
c) Directive No. 10
d) Directive No. 15
14. In NFRS, what does 'FVOCI' stand for?
a) Fair Value through Other Comprehensive
Income
b) Future Value of Open Credit Instruments
c) Fixed Value of Corporate Investments
d) Financial Volume of Capital Inflows
15. NRB's Monetary Policy is usually announced in which month of the Nepali calendar?
a) Asar
b) Shrawan
c) Baishakh
d) Poush
16. The 'Base Rate' of a bank is
calculated primarily to determine:
a) The minimum interest rate a bank can
charge on loans
b) The maximum interest rate on savings
accounts
c) The rate at which NRB lends to commercial
banks
d) The tax rate on banking profits
17. Under the NRB Act 2058, who acts as
the Chairperson of the board of directors?
a) The Finance Minister
b) The Governor
c) The senior-most Deputy Governor
d) The Prime Minister
18. What is the primary purpose of 'Prompt Corrective Action' (PCA) by NRB?
a) To speed up the process of opening new
branches
b) To ensure staff are promoted on time
c) To intervene in banks that fall below
capital or liquidity requirements
d) To increase the tax revenue from the
banking sector
19. According to NRB Directive No. 5, the
risk management committee of a BFI must be chaired by:
a) The CEO
b) The Internal Auditor
c) A non-executive director
d) The Finance Minister
20. Which accounting principle in NFRS/NAS
assumes that a business will continue to operate for the foreseeable future?
a) Accrual Basis
b) Materiality
c) Going Concern
d) Consistency
21. Under the Banking Offence and
Punishment Act, obtaining a loan by submitting false financial statements is:
a) A punishable banking offence
b) Allowed if the loan is repaid on time
c) A civil matter only
d) A common marketing practice
22. What is the current 'Statutory
Liquidity Ratio' (SLR) for Class A commercial banks in Nepal?
a) 4%
b) 12%
c) 20%
d) 5%
23. Which section of the NRB Act 2058
provides the Bank the sole right to issue currency notes and coins in Nepal?
a) Section 1
b) Section 10
c) Section 52
d) Section 100
24. NFRS 13 provides guidance on how to measure:
a) Employee Benefits
b) Fair Value
c) Depreciation
d) Earnings Per Share
25. Under NRB Directives, a 'Single Obligor
Limit' is designed to:
a) Prevent over-exposure to a single borrower
or group
b) Ensure every citizen gets at least one
loan
c) Limit the amount of cash a person can
carry
d) Control the total number of staff in a
bank
|
Q.No |
Ans |
Explanation |
|
1 |
b |
Per Section 4 of the NRB Act 2058, the primary objective
is to maintain price and balance of payment stability to support sustainable
economic development. |
|
2 |
a |
While NRB monitors, the Nepal Police (specifically the
Central Investigation Bureau - CIB) handles the criminal investigation of
banking offences. |
|
3 |
a |
Currently, the minimum CAR is 8.5% plus a 2.5% Capital
Conservation Buffer (CCB), totaling 11%. |
|
4 |
c |
NFRS 9 replaced NAS 39; it introduces the ECL model for
proactive impairment of financial assets. |
|
5 |
c |
The Governor is appointed by the Council of Ministers
based on the recommendation of a three-member committee. |
|
6 |
b |
The Board consists of 7 members: the Governor, Secretary
of Ministry of Finance, two Deputy Governors, and three experts. |
|
7 |
a |
Section 15 of the Banking Offence Act specifies 9 to 12
years for misappropriation exceeding 1 billion. |
|
8 |
b |
Substandard loans are those past due for 3 to 6 months
(requiring a 25% provision). |
|
9 |
a |
NFRS 16 requires lessees to recognize a
"Right-of-Use" asset and a lease liability for almost all lease
contracts. |
|
10 |
c |
Credit to Deposit Ratio. NRB currently requires BFIs to
maintain this within a 90% limit. |
|
11 |
b |
Both the Governor and Deputy Governors serve a term of 5
years. |
|
12 |
b |
Under Section 3(n), issuing a cheque without funds is a criminal
offence (Banking Offence). |
|
13 |
b |
Directive No. 6 focuses on Corporate Governance
(composition of the board, code of conduct, etc.). |
|
14 |
a |
Fair Value through Other Comprehensive Income; it is a
classification for certain financial assets under NFRS 9. |
|
15 |
b |
While the Budget comes in Jeth, NRB typically releases
the Monetary Policy in the first/second week of Shrawan. |
|
16 |
a |
The Base Rate acts as the floor; banks are generally not
allowed to lend below this rate. |
|
17 |
b |
Per the NRB Act, the Governor serves as the Chairperson
of the Board of Directors. |
|
18 |
c |
PCA is a framework that allows NRB to intervene when a
bank’s capital or liquidity falls below the regulatory minimum. |
|
19 |
c |
To ensure independence, the Risk Management Committee
must be chaired by a Non-Executive Director. |
|
20 |
c |
Going Concern is the fundamental assumption that the
entity will continue its operations for at least 12 months. |
|
21 |
a |
Fraudulent lending (using fake financials) is a major
offence under the Banking Offence and Punishment Act. |
|
22 |
b |
For Class 'A' (Commercial Banks), the SLR is currently 12%. |
|
23 |
c |
Section 52 of the NRB Act 2058 grants the bank the
"Sole right to issue currency notes and coins." |
|
24 |
b |
NFRS 13 defines Fair Value and sets out a single
framework for measuring it (Level 1, 2, and 3 inputs). |
|
25 |
a |
Single Obligor Limit prevents a bank from putting "all
eggs in one basket" by limiting the loan amount to a single
client/group. |
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