Question : Statement 1: Liberalization of the financial sector in India aimed to increase competition among banks.
Statement 2: The Reserve Bank of India (RBI) played a key role in implementing financial sector reforms.
Option 1: Both statements are true.
Option 2: Both statements are false.
Option 3: Statement 1 is true, and statement 2 is false.
Option 4: Statement 1 is false, and statement 2 is true.
Correct Answer: Both statements are true.
Solution : The correct answer is (a) Both statements are true.
Statement 1 is true: Liberalization of the financial sector in India aimed to increase competition among banks. It involved the relaxation of regulations and entry barriers, allowing more players to enter the banking industry and fostering competition.
Statement 2 is also true: The Reserve Bank of India (RBI) played a key role in implementing financial sector reforms. The RBI is India's central banking institution, responsible for regulating and supervising the country's financial sector. It played a crucial role in formulating and implementing policies to liberalize and strengthen the financial sector.
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