Match the institutional bodies and mechanisms of the Indian financial architecture in List… — State PSC Exam

Match the institutional bodies and mechanisms of the Indian financial architecture in List I with their corresponding primary operational functions or features in List II. Select the correct matching pair combinations.

Board for Financial Supervision (BFS)Committee established under RBI regulations to provide integrated supervisory focus over commercial banks, NBFCs, and primary dealers.
Monetary Policy Committee (MPC)Six-member statutory body mandated under the RBI Act, 1934 to determine the policy repo rate required to meet the flexible inflation target.
Financial Stability and Development Council (FSDC)Non-statutory apex body chaired by the Union Finance Minister designed to enhance inter-regulatory coordination across India's financial sector.
Deposit Insurance and Credit Guarantee Corporation (DICGC)Wholly owned subsidiary of the Reserve Bank of India that provides insurance coverage on bank deposits up to $5\text{ lakh}$ per depositor per bank.

Answer

Board for Financial Supervision (BFS) matches with the integrated supervisory committee for commercial banks, NBFCs, and primary dealers; Monetary Policy Committee (MPC) matches with the six-member statutory body determining the policy repo rate; Financial Stability and Development Council (FSDC) matches with the non-statutory apex body chaired by the Union Finance Minister for inter-regulatory coordination; Deposit Insurance and Credit Guarantee Corporation (DICGC) matches with the wholly owned RBI subsidiary insuring bank deposits up to

5\text{ lakh}

Each institution is matched correctly according to its governance structure: the Board for Financial Supervision handles unified banking oversight; the Monetary Policy Committee determines interest rates for inflation targeting; the Financial Stability and Development Council facilitates macroprudential coordination under the Finance Minister; and the Deposit Insurance and Credit Guarantee Corporation guarantees bank deposits up to

5\text{ lakh}

Step-by-Step Solution

Identify the primary role and statutory status of the Board for Financial Supervision (BFS).

The BFS functions as the main supervisor for commercial banks, NBFCs, and primary dealers under the guidance of the RBI Central Board.

This pairs BFS with the description focused on integrated supervisory control.

Identify the mandate of the Monetary Policy Committee (MPC).

The MPC is a six-member panel established under Section 45ZB of the RBI Act to fix the policy repo rate.

This pairs MPC with the statutory six-member body responsible for setting interest rates.

Analyze the structural role of the Financial Stability and Development Council (FSDC).

FSDC is an apex non-statutory body headed by the Union Finance Minister aimed at resolving inter-agency regulatory conflicts.

This pairs FSDC with the non-statutory body chaired by the Finance Minister.

Examine the function of the Deposit Insurance and Credit Guarantee Corporation (DICGC).

DICGC is a 100% RBI-owned statutory entity that guarantees customer deposits up to

5\text{ lakh}

This pairs DICGC with the deposit insurance subsidiary providing coverage up to

5\text{ lakh}

Key Concept

Institutional Framework of Indian Financial System and RBI Regulatory Architecture

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