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Daily UPSC Quiz : 21 March 2026
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With reference to the monetary policy operations of the Reserve Bank of India (RBI), consider the following statements regarding Variable Rate Repo (VRR):

  1. It is a main liquidity management tool used by the RBI to absorb excess liquidity from the banking system.

  2. In a VRR auction, the interest rate is determined through a bidding process rather than being fixed at the repo rate.

  3. VRR operations are typically conducted when the call money market rates trade above the repo rate.

Which of the statements given above are correct?

With reference to the ‘Water Footprint’ of a product, consider the following statements:

  1. Green water refers to the moisture stored in the root zone of the soil which is consumed by plants.

  2. Blue water footprint includes the volume of surface and groundwater consumed during a production process.

  3. Grey water represents the total volume of wastewater generated by an industrial process before treatment.

Which of the statements given above is/are correct?

The primary reason for the RBI to favor the Standing Deposit Facility (SDF) over the Reverse Repo for liquidity absorption is:

With reference to Additional Tier 1 (AT-1) bonds, consider the following statements:

  1. They are a type of perpetual debt instrument that has no fixed maturity date.

  2. Under Basel III norms, these bonds are used by banks to fulfill their core equity capital requirements.

  3. In the event of a “Point of Non-Viability” (PONV), regulators have the authority to write down these bonds to zero without the consent of the bondholders.

  4. AT-1 bondholders always rank higher than equity shareholders during the distribution of assets in a bank’s liquidation process.

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