(c) Both (i) & (ii)

Explanation:
Those transactions which happen between Indian residents and Foreigners or non-resident Indians (NRIs) are recorded in India’s balance of payment.

In the first statement, an Indian resident is earning income from abroad from a foreign entity and in the second statement also, an Indian family is getting money free from an NRI. So, both will be recorded in India’s balance of payments under current account.

(d) All of the above

Explanation:
 Marginal Standing Facility (MSF): It is a facility under which scheduled commercial banks can borrow additional amount of overnight money from the Reserve Bank by dipping into their Statutory Liquidity Ratio (SLR) portfolio up to a limit (2% of SLR) at a penal rate of interest which is above repo rate (MSF rate = repo rate + 0.25%). This means that if a bank is keeping the minimum SLR requirement of 18.25% and it wants money/cash from RBI then, the bank can offer say 2% of the SLR reserve (securities) to RBI and can get money/cash from RBI. This provides a safety valve against unanticipated liquidity shocks to the banking system.

(c) (i), (ii) & (iii) only

Explanation:
One of the basic reasons of keeping CRR with RBI is to provide safety to the public deposits. It also ensures solvency of banks i.e. staying in business and proper functioning and liquidity situation.
Since banks do not earn interest on the CRR, so it is idle money for the banks which increases costs for banks.

(c) (iii) only

Explanation:
Shadow banking operates outside the regular banking system and financial intermediation activities are undertaken with less transparency and regulation than the conventional banking. Shadow banks, like conventional banks undertake various intermediation activities akin to banks, but they are fundamentally distinct from commercial banks in various respects. NBFCs are example of shadow banks. The following are differences between normal banks and shadow banks.

First, unlike commercial banks, which by dint of being depository institutions can create money, shadow banks cannot create money. Second, unlike the banks, which are comprehensively and tightly regulated, the regulation of shadow banks is not that extensive and their business operations lack transparency. Third, while commercial banks, by and large, derive funds through mobilization of public deposits, shadow banks raise funds, by and large, through market-based instruments such as commercial paper, debentures, or other structured credit instruments. Fourth, the liabilities of the shadow banks are not insured, while commercial banks’ deposits, in general, enjoy Government guarantee to a limited extent. Fifth, in the times of distress, unlike banks, which have direct access to central bank liquidity, shadow banks do not have such recourse.

(c) (ii), (iii) & (iv) only

Explanation:
RBI, under its supervisory framework, uses various measures/tools to maintain sound financial health of banks. Prompt Correction Action (PCA) framework is one of such supervisory tools under which RBI has specified certain regulatory trigger points in terms of three parameters, i.e. capital to risk weighted assets ratio (CRAR), net non-performing assets (NPA) and Return on Assets (RoA), for initiation of certain structured and discretionary actions in respect of banks hitting such trigger points. It involves monitoring of certain performance indicators of the banks as an early warning exercise and is initiated once such thresholds are breached.

Its objective is to facilitate the banks to take corrective measures including those prescribed by the Reserve Bank, in a timely manner, in order to restore their financial health. The framework also provides an opportunity to the Reserve Bank to pay focused attention on such banks by engaging with the management more closely in those areas. The PCA framework is, thus, intended to encourage banks to eschew certain riskier activities and focus on conserving capital so that their balance sheets can become stronger.

The RBI has clarified that the PCA framework is not intended to constrain normal operations of the banks for the general public like lending and depositing. But in extreme cases, RBI can put restrictions on lending activity also. The PCA framework is applicable only to banks and not extended to non-banking financial companies (NBFCs).