SSC CGL 2024 Tier-I · 13 September 2024, Shift 1 · General Awareness · Question 16 of 100

Text as printed on a candidate's response sheet for this shift; answer per SSC's tentative key as marked on that sheet. Solution last reviewed 10 September 2026.

Where this paper and its answers come from

SSC does not publish CGL question papers or a public answer key. The questions and options here are reproduced as printed on a candidate's own response sheet for this shift — the Commission's text, unchanged. Each answer is SSC's tentative key as marked on that sheet; SSC allowed challenges to it and never publishes a final key. The solutions are written by UnlockIAS.

The central bank of India or Reserve Bank of India was created before Independence, in the year 1934. The recommendation to create a central bank was made by a commission called:

(a)Dr. Raja Chelliah Committee
(b)Kothari Commission
(c)Hilton Young Commission
(d)Narasimham Committee

Answer

Why

Correct — C. The Hilton Young Commission — formally the Royal Commission on Indian Currency and Finance, which reported in 1926 — recommended that India set up a central bank.

That recommendation became the Reserve Bank of India Act, 1934, the year the stem hands you, and the Bank began operations on 1 April 1935.

The other three bodies were constituted after Independence and on entirely different subjects, which leaves option (c).

Why the others are wrong

(a)
Dr. Raja Chelliah Committee — Dr. Raja Chelliah chaired the Tax Reforms Committee of 1991, on direct and indirect taxation. Same reform vocabulary, wrong subject and half a century too late.
(b)
Kothari Commission — The Kothari Commission (1964-66) was the Education Commission, chaired by D. S. Kothari, and reported on school and higher education. It has no currency remit at all.
(d)
Narasimham Committee — The Narasimham Committee reported in 1991 and 1998 on reforming the banking sector the RBI already regulated. A committee about banks is not the commission that created the central bank.

Concept

Before 1935 India had no central bank. Currency was managed by the Government of India and much of the bankers' bank work sat with the Imperial Bank of India.

The Hilton Young Commission of 1926, named after its chairman Edward Hilton Young, examined Indian currency and finance and recommended a single institution to hold reserves, issue notes and act as banker to government.

Legislation followed in 1934, the Reserve Bank opened in 1935, and it was nationalised in 1949.

Learn committee-and-commission pairs in both directions, because this stem gives you the year of the Act and expects the body behind it: Hilton Young with the RBI, Kothari with education, Narasimham with banking reform, Chelliah with tax.

Key facts

The Hilton Young Commission, the Royal Commission on Indian Currency and Finance, reported in 1926 and recommended a central bank for India.
The Reserve Bank of India was constituted under the Reserve Bank of India Act, 1934.
The Reserve Bank of India began operations on 1 April 1935.
The Reserve Bank of India was nationalised in 1949.

Study next

Functions of the RBI as note issuer, banker to government and lender of last resortThe Narasimham Committee reports of 1991 and 1998 on banking sector reformMonetary policy instruments such as the repo rate, CRR and SLR

Common traps

Choosing a post-Independence committee because its name is familiar from banking reform
Confusing the year the RBI Act was passed with the year the Bank started working

Economy stems attach one institution to one date or one committee. Related RBI items appear at 23 Sep 2024, 09:00, GA Q.14, on the year the Flexible Inflation Targeting Framework followed an amendment to the RBI Act, and at 11 Sep 2024, 12:30, GA Q.24 on automatic FDI approval by the RBI.

Related PYQs

No directly related past PYQ was found.