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₹5,000 Crore Equity Support to SIDBI for MSME Credit Expansion MCQ - Practice Questions with Answers

Solve 5 ₹5,000 Crore Equity Support to SIDBI for MSME Credit Expansion questions for RAS/RPSC preparation.

Practice questions

Q1Consider the following statements about the ₹5,000 crore equity infusion into SIDBI: 1. The Department of Financial Services will infuse the equity in three tranches. 2. The second and third tranches are ₹1,000 crore each for FY 2026-27 and FY 2027-28 respectively. 3. The first tranche is ₹3,000 crore at a book value of ₹568.65 per share as on 31 March 2025. Which of the statements given above are correct?

A 1 and 2 only
B 2 and 3 only
C 1, 2 and 3
D 1 and 3 only
Explanation

All three statements reproduce the approved disbursement structure. The Department of Financial Services will infuse ₹3,000 crore in FY 2025-26 at the specified book value, followed by ₹1,000 crore in FY 2026-27 and another ₹1,000 crore in FY 2027-28.

Q2What amount was specified for the first tranche of the equity infusion into SIDBI in FY 2025-26?

A ₹1,000 crore
B ₹3,000 crore
C ₹5,000 crore
D ₹568.65 crore
Explanation

The first tranche was fixed at ₹3,000 crore for FY 2025-26 and was to be infused at a book value of ₹568.65 per share as on 31 March 2025. The remaining ₹2,000 crore was divided equally between FY 2026-27 and FY 2027-28.

Q3Assertion (A): The equity infusion is expected to help SIDBI expand credit flow to MSMEs at competitive cost. Reason (R): Additional share capital can help SIDBI maintain a healthy CRAR and mobilise resources at fair interest rates. Choose the correct answer:

A A is false, but R is true
B Both A and R are true, but R is not the correct explanation of A
C A is true, but R is false
D Both A and R are true, and R is the correct explanation of A
Explanation

Both the assertion and the reason are true, and the reason explains the assertion. A stronger capital base helps SIDBI maintain a healthy CRAR, protect its credit standing and raise resources at fair rates; those resources can then support greater MSME lending at competitive cost.

Q4How many of the following pairs are correctly matched? 1. MSME beneficiaries at the end of FY 2025 — 76.26 lakh 2. Target MSME beneficiaries by the end of FY 2028 — 102 lakh 3. Expected addition of new MSME beneficiaries — 25.74 lakh 4. Estimated employment generation — 1.12 crore

A All four pairs
B Only three pairs
C Only two pairs
D Only one pair
Explanation

All four pairs are correct. The number of MSME beneficiaries is expected to rise from 76.26 lakh at the end of FY 2025 to 102 lakh by the end of FY 2028, adding about 25.74 lakh beneficiaries. At an average of 4.37 jobs per MSME, this addition is estimated to generate 1.12 crore jobs.

Q5On which date did the Union Cabinet approve ₹5,000 crore equity support to SIDBI for expanding credit flow to MSMEs?

A 21 January 2026
B 31 March 2025
C 30 September 2025
D 31 March 2028
Explanation

The Union Cabinet approved ₹5,000 crore in equity support to SIDBI on 21 January 2026. The approval was intended to strengthen SIDBI's capital base and help it mobilise additional resources so that credit could reach more MSMEs at competitive rates.

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