UPSC Prelims 2023— Question 24

This question tests RBI Sterilization under Monetary Policy. The central point is Open-market operations are used for monetary sterilization. Option A: Conducting 'Open Market • Operations'. This is the keyed answer because it matches the governing fact or concept: Open-market operations are used for monetary sterilization. Option B: Oversight of settlement and payment systems. This distractor is not the keyed answer because it conflicts with the specific factual relationship, chronology, institutional role, geographic association or conceptual distinction tested in the question. Option C: Debt and cash management for the Central and State Governments. This distractor is not the keyed answer because it conflicts with the specific factual relationship, chronology, institutional role, geographic association or conceptual distinction tested in the question. Option D: Regulating the functions of Non- banking Financial Institutions. This distractor is not the keyed answer because it conflicts with the specific factual relationship, chronology, institutional role, geographic association or conceptual distinction tested in the question. The question should be approached by checking each statement independently rather than accepting a familiar phrase at face value. This is particularly important in UPSC questions where a single incorrect institutional attribution, location, chronology, absolute word or causal link can invalidate an otherwise plausible option. The broader revision takeaway is to connect the keyed answer with the underlying concept rather than memorizing only the letter. The options also illustrate how UPSC constructs distractors by mixing correct facts with one altered detail. In revision, candidates should therefore retain both the positive fact and the nearest contrasting fact so that the same concept can be recognized when the framing changes in another year.