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Daily-mcqs 08 Jul 2026

Current Affairs MCQs for UPSC & State PSC Exams 08 Jul 2026

Current Affairs MCQs for UPSC & State PSC Exams

Q1:

With reference to Global AI Governance, consider the following statements:

1.   The first UN Global Dialogue on AI Governance was established to provide an equal platform for all countries to shape principles for responsible AI.

2.   One of its key objectives is to align AI development with international law and human rights.

3.   The dialogue restricts participation only to national governments and excludes private sector and civil society stakeholders.

Which of the statements given above is/are correct?

A: 1 and 2 only

B: 1 and 3 only

C: 2 and 3 only

D: 1, 2 and 3

Show

Answer: A

Explanation:

Statement 1 – Correct: The UN Global Dialogue on AI Governance was created under a UN General Assembly mandate to provide an inclusive platform where all countries have an equal voice in shaping AI governance.

Statement 2 – Correct: The dialogue seeks to promote responsible AI by ensuring human oversight, safety, security, and alignment with international law and human rights.

Statement 3 – Incorrect: Participation is multi-stakeholder, involving governments, industry, civil society, and experts, not governments alone.

Q2:

With reference to the Credit-to-Deposit Ratio (CD Ratio) and Asset-Liability Management in banks, consider the following statements:

1.   A higher Credit-to-Deposit Ratio indicates that banks are using a larger proportion of deposits for lending.

2.   A persistently high Credit-to-Deposit Ratio may reduce the liquidity cushion available with banks.

3.   An Asset-Liability Mismatch arises when banks finance long-term loans using short-term deposits.

Which of the statements given above is/are correct?

A: 1 and 2 only

B: 1 and 3 only

C: 2 and 3 only

D: 1, 2 and 3

Show

Answer: D

Explanation:

Statement 1 – Correct: The Credit-to-Deposit (CD) Ratio, also known as the Loan-to-Deposit Ratio (LDR), measures the proportion of deposits deployed as loans. A higher ratio indicates more intensive utilisation of deposits for lending.

Statement 2 – Correct: While a higher CD ratio may reflect efficient credit deployment, it also leaves banks with a smaller liquidity buffer, making them more vulnerable to sudden deposit withdrawals or funding shocks.

Statement 3 – Correct: An Asset-Liability Mismatch (ALM) occurs when banks fund long-term assets (loans) with short-term liabilities (deposits). If depositors withdraw funds before loans mature, banks may experience liquidity stress.

Q3:

Which of the following factors have contributed to the slowdown in CASA (Current Account and Savings Account) deposit growth in India?

1.   Increasing household investments in equity markets, mutual funds, and Exchange Traded Funds (ETFs).

2.   Rapid digitisation through UPI and online investment platforms.

3.   Higher interest rates offered on Fixed Deposits compared to savings accounts.

4.   Mandatory reduction in savings account balances prescribed by the Reserve Bank of India.

Select the correct answer using the code below:

A: 1, 2 and 3 only

B: 1, 3 and 4 only

C: 1, 2 and 4 only

D: 1, 2, 3 and 4

Show

Answer: A

Explanation:

Statement 1 – Correct: Investors are increasingly shifting savings toward equity markets, mutual funds, ETFs, and other market-linked products in search of higher returns, reducing growth in low-cost CASA deposits.

Statement 2 – Correct: Digital platforms, UPI, simplified KYC, and online investment apps have made investing easier and more accessible, accelerating the movement of funds away from traditional savings accounts.

Statement 3 – Correct: Banks have offered higher interest rates on Fixed Deposits (FDs) than on savings accounts, encouraging depositors to shift from CASA to term deposits.

Statement 4 – Incorrect: There is no RBI mandate requiring a reduction in savings account balances. The slowdown in CASA growth is driven by market dynamics and changing household investment preferences.

Q4:

With reference to the use of Artificial Intelligence (AI) in the Indian judiciary, consider the following statements:

1.   AI hallucinations refer to AI systems generating fabricated or inaccurate information while presenting it as authentic.

2.   The Supreme Court has held that AI can replace judicial reasoning if it improves efficiency and reduces case pendency.

3.   AI-generated legal research must be independently verified before being relied upon in judicial decision-making.

Which of the statements given above is/are correct?

A: 1 and 2 only

B: 1 and 3 only

C: 2 and 3 only

D: 1, 2 and 3

Show

Answer: B

Explanation:

Statement 1 – Correct: AI hallucinations occur when AI systems generate false, fabricated, or inaccurate information but present it as factual. In the legal context, this may include non-existent judgments, fake citations, or incorrect legal interpretations.

Statement 2 – Incorrect: The Supreme Court has not endorsed replacing judicial reasoning with AI. Instead, it has emphasized that AI should remain an assistive tool, while judicial decisions must continue to rely on human judgment, constitutional values, and verified legal sources.

Statement 3 – Correct: Following the discovery of AI-generated fabricated legal citations, the Supreme Court stressed the need for independent verification of AI-generated material and called for safeguards to ensure judicial integrity.

Q5:

Which of the following are major challenges associated with the adoption of Artificial Intelligence (AI) in the judiciary?

1.   Generation of fabricated legal citations and inaccurate legal information.

2.   Reproduction of biases present in historical legal datasets.

3.   Inability of AI to exercise empathy and contextual constitutional reasoning.

4.   Absence of a comprehensive legal framework governing AI use in courts.

Select the correct answer using the code below:

A: 1, 2 and 3 only

B: 1, 3 and 4 only

C: 1, 2 and 4 only

D: 1, 2, 3 and 4

Show

Answer: D

Explanation:

Statement 1 – Correct: AI may generate hallucinated judgments, fake citations, or incorrect legal interpretations, which can undermine judicial decisions if left unchecked.

Statement 2 – Correct: AI systems trained on historical legal data may inherit or amplify existing biases, potentially affecting fairness and equality before the law.

Statement 3 – Correct: Judicial decision-making involves empathy, appreciation of facts, constitutional principles, and societal context—qualities that AI cannot independently replicate.

Statement 4 – Correct: India currently lacks a comprehensive regulatory framework specifically governing the use of AI in judicial proceedings, highlighting the need for ethical guidelines, accountability mechanisms, and AI literacy among legal professionals.