Ten MCQs on current International and national events - 204

PRERNA FOR IAS

(ASSOCIATE OF SAMKALP)

A-Category MCQs -204

Q1. Strategic Disinvestment and Banking Regulation

In the context of the reported proposal to sell a controlling stake in IDBI Bank to Fairfax Financial Holdings, consider the following statements:

1. Strategic disinvestment may involve the transfer of management control along with government equity.
2. Retention of a minority government stake necessarily means that the government continues to exercise management control.
3. A change in bank ownership does not remove the bank from RBI's regulatory supervision.
4. Transparent valuation and depositor protection are important considerations in banking-sector disinvestment.

Which of the statements given above are correct?

(a) 1, 2 and 3 only (b) 1, 3 and 4 only (c) 2, 3 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (b) 1, 3 and 4 only

Explanation: The supplied summaries report a proposed sale of a controlling stake in IDBI Bank. Strategic disinvestment may transfer management control to a private investor. However, retaining a minority shareholding does not automatically preserve government control. Statement 2 is therefore incorrect. Regardless of ownership, banks remain subject to applicable RBI regulation and supervision. Banking reforms should be evaluated through efficiency, financial stability, depositor safety and financial inclusion. Transparent valuation is necessary to protect public resources. Hidden trap: Government ownership and government management control are different concepts. Elimination clue: Reject Statement 2 because minority ownership does not necessarily confer control.

Q2. India–US Trade Negotiations and Section 301

With reference to the reported India–US trade negotiations, consider the following statements:

1. Section 301 of the United States Trade Act of 1974 provides a mechanism for investigating certain foreign trade practices.
2. A bilateral trade agreement automatically prevents either country from introducing new tariffs under its domestic laws.
3. Predictable tariff arrangements can support long-term investment decisions by exporters.
4. Trade negotiations may involve issues beyond tariffs, including industrial policy and energy security.

Which of the statements given above are correct?

(a) 1, 2 and 3 only (b) 2, 3 and 4 only (c) 1, 3 and 4 only (d) 1, 2, 3 and 4

Correct Answer: (c) 1, 3 and 4 only