Banking Awareness Study Material – practice Sets (1-5)

Banking Awareness Study Material – practice Sets (1-5)

Banking Awareness Study MaterialComputer AwarenessMarketing Aptitude

Practice Set -1

1. Which initiatives did Union Government launch as part of skill India vision?

1. National Skill Development and Entrepreneurship Policy
2. National Skill Development Mission
3. Pradhan Mantri Kaushal Vikas Yojana
4. Skill Loan scheme
5. All of the above

2. Which of the following rates signals the RBI’s long term outlook on interest rates?

1. Repo rate
2. Reverse repo rate
3. Bank rate
4. SLR
5. CRR

3. Loans and advances in a bank, came under which of the following category?

1. Assets
2. Liabilities
3. Costs
4. All of these
5. None of these

4. A foreign bank is one

1. whose most of the branches are situated outside India
2. in which atleast 40% equity shares are held by non-resident Indians
3. which is incorporated outside India
4. All of the above
5. None of the above

5. Security features of the new ₹ 2000 and ₹ 500 notes is/are

1. Micro letters ‘RBI’ and ‘2000’
2. Guarantee cause on the right
3. Governor’s signature and RBI emblem on the right
4. All of the above
5. None of the above

6. Which of the following are the scheduled banks?

1. State Bank of Mauritius Limited
2. HDFC Bank Limited
3. ICICI Bank
4. None of these
5. All of these

7. Which of the following is not the part of the scheduled banking structure in India?

1. Money lenders
2. Public sector banks
3. Private sector banks
4. Regional rural banks
5. State co-operative banks

8. BCSBI stands for

1. Banking Codes and Standards Board of India
2. Banking Credit and Standards Board of India
3. Banking Codes and Service Board of India
4. Banking Credit and Service Board of India
5. None of the above

9. Many times, we read in newspapers that the RBI has revised certain rates/ratios under LAF. What is the full form of LAF?

1. Legal Adjustment Facility
2. Liquidity Adjustment Facility
3. Long term Achievement Facility
4. Legal Adjustment Formality
5. None of the above

10. Bank rate as fixed by RBI, means

1. rate of interest charged by banks from borrowers
2. rate of interest on bank deposits
3. rate of interest charged by RBI on its loans to banks
4. rate of interest on inter bank loans
5. None of the above

11. Which of the following statements is/are correct?

1. SEBI was established in 1988
2. It was made a fully autonomous body in 1992
3. It regulates the securities market and protect the interests of investors in securities
4. All of the above
5. None of the above

12. Scheduled bank means a bank

1. incorporated under the Companies Act, 1956
2. authorised to transact government business
3. governed by the Banking Regulation Act, 1949
4. included in the Second Schedule to the Reserve Bank of India Act, 1934
5. All of the above

13. Banks are authorised to sell third party products. Which are these products?

1. Mutual funds
2. Term deposits
3. Credit cards
4. Gift cheques
5. None of these

14. A company which pools money from investors and invests in stocks, bonds and shares is called

1. a bank
2. an insurance company
3. bank assurance
4. mutual fund
5. None of these

15. Which one of the following statements is correct about venture capital?

1. It is a short term investment and the returns are in the forms of interests
2. It is a high risk venture
3. Venture capital finances high-tech projects
4. 1 and 2
5. All of the above

16. Which one of the following methods is currently used in India to issue note?

1. Fixed Fiduciary System
2. Maximum Fiduciary System
3. Proportional Reserve System
4. Percentage Reserve System
5. Minimum Reserve System

17. A money deposited in a bank that cannot be withdrawn for a preset fixed period of time is known as a

1. term deposit
2. checking amount
3. saving bank deposit
4. no frills account
5. current deposit

18. Which of the following statements is/are correct?

1. MEIS was launched under Foreign Trade Policy of India (FTP) 2015-20.
2. MEIS is one of the two schemes introduced in FTP 2015-20, as a part of exports from India Scheme.
3. The Service Exports from India Scheme (SEIS) is one of the schemes of FTP 2015-20.
4. 1 and 3
5. All of the above

19. Which of following statements is/are correct regarding Gold Monetisation Scheme?

1. The monetisation scheme encourages individuals, households and temples to deposit gold jewellery or bars with banks or collection agents
2. The gold deposited would be later refined for domestic purpose and would help cut dependence on imports
3. Any medium term deposit will be allowed to be withdrawn after 3yr and any long term deposit after 5yr
4. 1 and 2
5. All of the above

20. ‘Unit Banking System’ is that system where an individual bank undertakes the banking business

1. through a single office
2. through a few branches operating within a limited area
3. through an independent office to its local community
4. All of these
5. None of these

21. ‘Branch Banking System’ is one under which

1. a large bank carries on banking business through a large network of branches spread all over the country
2. the bank’s huge financial resources enable it to carry on its activities on a large scale throughout the country
3. a bank is connected to one or more other banks in an area or outside of it.
4. All of the above
5. None of the above

22. Features of new ₹ 2000 note is/are

1. Swachh Bharat Logo with slogan
2. Motif of Mangalayan
3. Denominational numeral 2000 in Devnagari
4. All of the above
5. None of the above

23. The Reserve Bank directives require UCBs to setup an Audit Committee at the Board (ACB) level. The ACB should provide direction and observe the operations of the total audit function in the bank and should specially focus on the follow-up of

1. arrears in balancing of books at various branches
2. inter-branch adjustment accounts and unreconciled long outstanding entries in inter-branch accounts
3. frauds and all other major areas of housekeeping
4. All of the above
5. None of the above

24. Which of the following organisations provides credit history of the borrowers?

1. CIBIL
2. ARCIL
3. SEBI
4. RBI
5. CCIL

25. The Co-operative bank in India has a

1. two-tier system
2. three-tier system
3. four-tier system
4. five-tier system
5. two-tier system in some states and three-tier system in others

26. KYC means

1. know your customer very well
2. know your existing customer very well
3. know your prospective customer very well
4. satisfy yourselves about the customer’s identity and activities
5. All of the above

27. All Regional Rural Banks (RRBs) are required to maintain their entire Statutory Liquidity Ratio (SLR) in

1. government and other approved securities
2. current accounts with sponsor banks
3. time deposits with sponsor banks
4. gold holdings only
5. All of the above

28. Under the scheme of Co-operative Agricultural Credit developed in India, the state co-operative Bank has been considered such a vital link that

1. it has been given a status comparable to that of a scheduled bank
2. for certain purposes, the central financing agencies have been treated as its branches
3. Both 1 and 2
4. for certain purpose, it is treated as regulator ofSIDBI
5. None of the above

29. Central co-operative banks

1. occupy a crucial importance in the co-operative credit structure
2. form an important link between the State co- operative bank at the apex and the primary agricultural credit societies at the base
3. are closer to the primary societies than an Apex Bank could be one
4. None of the above
5. All of the above

30. Which of the following mobilise(s) the savings of the public to specifically invest in the industrial securities?

1. UTI
2. LIC
3. GIC
4. All of these
5. None of these

31. The State Co-operative Bank, being the Apex Bank at the state level

1. operates as a balancing centre for the movement of the resources in the entire state
2. acts as the custodian of the surplus resources and reserves of central co-operative banks and supplements them by attracting sizeable deposits and by obtaining loans from RBI
3. provides the link between the RBI and the money market on one hand and the entire co-operative credit structure, on the other
4. All of the above
5. None of the above

32. Which of the following is the Central Bank of the country?

1. RBI
2. SBI
3. RRB
4. NABARD
5. None of these

33. How many types of primary agricultural credit societies are there in our country?

1. Large-size societies which include Rural Banks, Agricultural Banks and credit unions
2. Service co-operative
3. Other small size societies
4. All of the above
5. None of the above

34. Which of the following co-operative banks is considered as the first co-operative bank in India?

1. Greater Bombay Co-operative Bank Limited
2. Abhyudaya Co-operative Bank Limited
3. Ahmedabad Mercantile Co-operative Bank Limited
4. Amanath Co-operative Bank Limited
5. Anyonya Co-operative Bank

35. Currently, banks claim they have achieved 100% CBS. What are they referring to?

1. It means all their branches are technology driven with core banking solutions
2. It suggests complete banking services
3. It is an indication of customised banking services
4. All of the above
5. None of the above

36. Savings account with zero balance can be opened for

1. persons of high net worth
2. employees of IT companies
3. weaker sections of society
4. women customers
5. None of the above

37. Which one of the following does not qualify as priority sector lending by commercial banks?

1. Software exports
2. Small business loans
3. Education loans
4. Small industries loan
5. None of these

38. Which of the following types of institutions operate in call money market only as lender?

1. Commercial banks
2. Primary dealers
3. Insurance companies
4. SBI
5. None of the above

39. A bank normally does not have to deal with an issue related to

1. payments and settlements system
2. contractual rights of creditors
3. intellectual property rights
4. cases of insolvency
5. None of the above

40. Which of the following types of accounts are known as ‘Demat accounts’?

1. Accounts which are zero balance accounts
2. Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there
3. Accounts in which shares of various companies are traded in electronic form
4. Accounts which are operated through internet banking facility
5. None of the above

41. The money market in India consists of two sectors namely the organised and the unorganised sector. Which of the following do not fall under unorganised sector?

1. RBI, commercial banks and SBI
2. LIC and GIC
3. Unit Trust of India
4. Indigenous banks
5. None of these

42. Which of the following rates is not decided by RBI?

1. Bank rate
2. Repo rate
3. Reverse Repo rate
4. Base rate
5. Cash Reserve Ratio

43. Choose the correct options among the following statements regarding Standup India Scheme.
I. The Union Cabinet chaired by Prime Minister Narendra Modi approved on 6th Jan, 2016 the ‘Standup India Scheme’
II. ‘Standup India Scheme’ promotes entrepreneurship among SC/ST and men entrepreneurs
III. The Scheme is intended to facilitate at least fifty such projects per bank branch, on an average one for each category of entrepreneur.
Codes

1. Only I
2. II and III
3. I and III
4. I, II and III
5. None of these

44. The Reserve Bank of India has given its ‘in-principle’ approval to Bharti Airtel’s payments bank venture. Choose the correct statements regarding this
I. The ‘in-principle’ approval was valid for 18 months.
II. During that time RBI had asked applicants to comply with the licensing norms.
III. Airtel M Commerce Services Limited (AMSL) is a subsidiary of Bharti Airtel.
Codes

1. Only I
2. II and III
3. I and III
4. I, II and III
5. None of these

45. Co-operative banks in India are registered under
I. Banking Laws (Co-operative Societies) Act, 1965.
II. Banking Regulations Act, 1949.
III. Companies Act, 1956.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. II and III
4. I and III
5. All of these

46. Which of the following Indices has been launched by NSE?
I. Nifty Tata Group Index
II. Nifty Aditya Birla Group Index
III. Nifty Mahindra Group Index Codes

1. Iand II
2. II and III
3. I and III
4. I, II and III
5. None of these

47. The Narasimham Committee, 1991 has given which of the following major recommendations?
I. Reduction in the SLR and CRR.
II. Phasing out Directed Credit Programme.
III. The determination of interest rate should be on the grounds of market forces such as the demand for and the supply of
fund.
IV. The actual numbers of public sector banks need to be reduced.
V. Narrow banking concept where weak banks will be allowed to place their funds only in short term and risk free as.
Select the correct answer using the codes given below

1. I, II and V
2. I, III, IV and V
3. I, II, IB and V
4. II, III, IV and V
5. I, n, m and IV

48. Choose the correct statements.
I. Reserve Bank of India (RBI) permitted Cooperative Banks with Core Banking Solution (CBS).
II. RBI permitted Co-operative Banks to issue ATM cards/ATM-cum-debit cards
III. RBI bank should set up their own arrangment for issuing cards
Codes

1. Only II
2. I and II
3. I, II and III
4. I and III
5. None of these

49. The main function of commercial bank can be segregated into
I. payment system.
II. financial intermediation.
III. financial services.
Select the correct answer using the codes given below

1. I, II and III
2. I and in
3. I and II
4. II and III
5. None of these

50. Insurance Regulatory and Development Authority of India (IRDAI) has constituted three committees namely.
I. The life insurance committee
II. The general insurance committee
III. Reinsurance committee
IV. The IRDAI committee
Which of the statements given above is/are correct?

1. Only I
2. I and II
3. I, II and III
4.  II, III and IV
5. I, III and IV

Answer Key

Practice Set -2

1. Federal reserves is the financial organisation of

1. USA
2. Britain
3. France
4. Japan
5. Germany

2. Which of the following statements about the money market is/are true?

1. Not all commercial banks deal with their customers in the secondary market
2. Money markets are used extensively by businesses both to warehouse, surplus funds and to raise short term funds
3. The single most influential participant in the US money market is the US Treasury Department
4. 1 and 2
5. All of the above

3. Which of the following is not a public sector bank?

1. State of Hyderabad
2. Central Bank of India
3. Regional Rural Bank
4. HDFC Bank
5. None of the above

4. What does EMT indicate in the context of a bank loan?

1. Equal monetary incentive
2. Equated monthly installment
3. Exact monthly indicator
4. Exact mean index
5. None of the above

5. The main resources of RRB are

1. Share capital
2. Deposits from the public
3. Borrowing from sponsor banks,
4. Refinance from NABARD
5. All of the above

6. Which of the following is not a negotiable  instrument?

1. Promissory note
2. Bill of  exchange
3. Cheque
4. Bank draft
5. Share certificate

7. Axis Bank is a

1. public sector bank
2. private sector bank
3. co-operative bank
4. foreign bank
5. gramin bank

8. The primary issuers of capital market securities includes which of the following?

1. The Central Government
2. The Local Government
3. Corporations
4. Central and Local Governments and Corporations
5. Local Government and Corporations

9. A bond issued at a price less than its face value and payable on its due date at its face value bearing no Rate of Interest (Rol) is called

1. Preference Bond
2. Zero Coupon Bond
3. Convertible Bond
4. Perpetual Bond
5. Sovereign Bond

10. Choose the correct statements regarding Pradhan Mantri Jeevan Jyoti Yojana.

1. All savings bank account holders in the age 18 to 50 yr in participating banks will be entitled to join
2. Premium for PMJJY is ₹ 330 per annum
3. Risk Coverage of ₹ 2 lakh in case of death for any reason
4. All of the above
5. None of the above

11. Under Bretton Woods System, as a member of IMF, India declared its par value of rupee in terms of

1. British pound
2. US dollar
3. a basket of currency
4. gold
5. None of these

12. Which of the following is not an obligation of bank towards its customer?

1. Pay bills as per the instructions of the customer
2. Act as per the directions given by the customer
3. Submit periodical statements, i.e. informing customers about the state of the account
4. Not to set off three debt owed to him by a creditor from the credit balances held in other accounts of the borrower
5. Maintain secrecy of accounts

13. ‘National Institute of Bank Management’ is the institution meant for

1. All those given as options
2. providing management personnel to the banks
3. training of bank employees in banking
4. providing consultancy on best practices in bank management
5. recruitment of bank employees at all levels

14. Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy, means

1. sale or purchase of government securities
2. issuance of different types of bonds
3. auction of gold
4. to make available direct finance to borrowers
5. None of the above

15. Which of the following could be considered as an initiative towards promotion of financial inclusion?

1. Opening of no frills accounts
2. Appointing business correspondents for servicing rural customers
3. Opening of bank branches in unbanked districts
4. All of the above
5. None of the above

16. Who decides on the quantity of coins to be minted?

1. The Government of India
2. RBI
3. SBI
4. All of the above
5. None of the above

17. Which of the following terms is used in the field of banking and finance?

1. Special drawing rights
2. Affirmative defence
3. Civil procedure
4. Informed consent
5. Question of fact

18. The most prominent national level micro finance apex organisation providing micro credit services for women in India is

1. National Credit Fund for women
2. Mahila Samridhi Kosh
3. Rural Women Self Help Group
4. All of the above
5. None of the above

19. Which of the following does not explain the high repayment rates of Micro Credit Programmes?

1. Promising larger and larger loans for borrowers in good standing
2. Public repayments
3. Strong competition between numerous Micro Credit Programmes to reduce interest rates
4. Starting repayments before investments are likely to have borne fruit
5. None of the above

20. SHG Bank Linkage Programme, initially launched by

1. RBI
2. NABARD
3. SBI
4. RRBs
5. Finance Ministry

21.Which of the following sections of people is not financially excluded?

1. Marginal farmers
2. Salaried persons
3. Landless labourers
4. Self employed and unorganised sector enterprises
5. Urban slum dwellers

22. Which of the following is a sovereign instrument with a fixed coupon (payable on a specified date or half yearly) issued by Reserve Bank for market borrowing programme of the government of India?

1. Fixed deposits
2. Dated government securities
3. Debentures
4. Bonds
5. Equity shares of PSBs

23. A bank which acts as a banker of other banks is called

1. saving bank
2. commercial bank
3. investment bank
4. development bank
5. central bank

24. Which of the following is incorrect about Non Banking Financial Companies (NBFCs)?

1. NBFC cannot accept demand deposits
2. NBFC is not a part of the payment and settlement system
3. NBFC can issue cheques drawn on itself
4. NBFCS are fast emerging segment of Indian financial system
5. None of the above

25. What is the full form of ‘NBFC’ as used in the financial sector?

1. New Banking Finance Company
2. National Banking and Finance Corporation
3. New Business Finance and Credit
4. Non-Business Fund Company
5. None of the above

26. The branding line of Bank of Baroda is

1. International Bank of India
2. India’s International Bank
3. India’s Multinational Bank
4. World’s Local Bank
5. None of the above

27. Choose the correct statements regarding Goods and Services Tax (GST).

1. GST is considered as great step towards transformation and transparency in tax regime
2. It will bring freedom from tax terrorism as it will be levied on consumption rather than production
3. GST will also benefit states which are considered backward states and also address the problem of imbalanced development
4. It will help to curtail black money as traders will be compelled to give proper bills
5. All of the above

28. Bank assurance is

1. an insurance scheme to insure bank deposits
2. an insurance scheme exclusively for the employees of banks
3. a composite financial service offering both banking and insurance products
4. a bank deposit scheme exclusively for employees of insurance companies
5. None of the above

29. Which of the following schemes is launched specifically for helping senior citizens to avail loan by mortgage of their residential property?

1. English Mortgage Scheme
2. Senior Capital Loan Scheme
3. Reverse Mortgage Loan Scheme
4. Senior Citizen Personal Loan Scheme
5. None of the above

30. The benefits of the ‘Deen Dayal Upadhyaya Gram Jyoti Yojana’ (DDUGJY) scheme are

1. All villages and households shall be electrified
2. Increase in agricultural yield
3. Improvement in Health, Education, Banking (ATM) services
4. Improvement in accessibility to radio, telephone, television, internet and mobile
5. All of the above

31. Banking Ombudsman Scheme is applicable to the business of

1. all scheduled commercial banks excluding RRBs
2. all scheduled commercial banks including RRBs
3. only public sector banks
4. all banking companies
5. all scheduled banks except private banks

32. Which of the following is not required for opening a bank account?

1. Identity proof
2. Address proof
3. Recent photographs
4. Domicile certificate
5. None of the above

33. Base rate is the rate below which no bank can allow their lending to anyone. Who sets up this ‘Base rate’ for banks?

1. Individual Banks’ Board
2. Ministry of Commerce
3. Ministry of Finance
4. RBI
5. Interest Rate Commission of India

34. The SBI proposed to merge which public sector bank with itself along with its 5 associate banks?

1. UCO Bank
2. Bharatiya Mahila Bank
3. Andhra Bank
4. Bank of Baroda
5. Union Bank of India

35. In context of business and banking, what is CRAR?

1. Capital to Risk Asset Ratio
2. Credit to Risk Asset Ratio
3. Credit to Risk Assessment Ratio
4. Capital to Risk Assessment Rate
5. Credit Rate Assessment Ratio

36. Which of the following is not a part of the scheduled banking structure in India?

1. State co-operative banks
2. Public sector banks
3. Private sector banks
4. Regional rural banks
5. Moneylenders

37. Which of the following is a retail banking product?

1. Home loans
2. Working capital finance
3. Corporate term loans
4. Infrastructure financing
5. Export credit

38. ‘UBIN’ drive has been started for Start ups to begin their new businesses without any delays. What does UBIN stands for?

1. Unidentified Business Identification Number
2. Unique Business Indication Number
3. Unique Business Identification Number
4. Unified Business Identification Number
5. Unicode Business Identification Number

39. Which of the following is not a banking related term?

1. Radiation
2. Outstanding amount
3. Benchmark prime lending rate
4. Explicit guarantee
5. None of the above

40. The Reserve Bank of India (RBI) has launched a website (sachet.rbi.org.in) to curb illegal and unauthorised pooling of funds by unscrupulous firms. Features of the Portal is/are
I. To facilitate filing, tracking of complaints relating to illegal and unauthorised pooling of funds by unscrupulous firms.
II. To provide information about whether any particular entity is registered with any regulator or is permitted to accept deposits.
III. To help enhance coordination among regulators and state government agencies to curb instances of unauthorised acceptance of deposits by unscrupulous entities.
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. II and III
4. Only III
5. I and II

41. Recent initiatives for financial inclusion in India include
I. ‘no frill’ account for retail purpose.
II. simplified KYC (Know Your Customer).
III. Credit Counselling Centre (CCC) facilities.
IV. extension of smart cards.
Select the correct answer using the codes given below

1. I and II
2.  II and III
3. III and IV
4. I and IV
5. All of these

42. The Enforcement of Security Interest and Recovery of Debts Laws Amgpdment Bill, 2016 seeks to amend which of the following laws?
I. Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, 2002
II. Recovery of Debts due to Banks and Financial Institutions Act (RDDBFI), 1993
III. Depositories Act, 1996 and IV. Indian Stamp Act, 1899.
Select the correct answer using the codes given below

1.  I, III and IV
2. I, II, III and IV
3. II, m and IV
4. III and IV
5. I and II

43. Consider the following statements.
I. If the beneficiary of a cheque has lost the cheque, he can instruct the paying bank to stop payment of the cheque without waiting for the account holder’s instructions.
II. While outsourcing, the only consideration should be cost savings.
Which of the statements given above is/are correct?

1. Only I
2. Only II
3. Both I and II
4. Neither I nor II
5. Either I or II

44. As per the notification issued by the banks, the ‘third party ATM usage’ will now be restricted to certain withdrawals and limits only. What does it really mean?
I. The ATM card holders will not be able to withdraw from other banks’ ATMs under any circumstances.
II. Customers of one bank may be able to withdraw only a limited amount from other banks’ ATMs.
III. ATM card holders will have to pay a fee if they withdraw money from other banks’ ATMs frequently.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. II and III
5. I and III

45. The objectives of forming SHG is/are
I. to build mutual trust and confidence between the bankers and the rural poor people.
II. to encourage banking activities, both on the thrift as well as credit sides, in a segment of the population that the formal financial institutions usually find difficult to cover.
III. to meet the needs of the poor by
combining the flexibility, sensitivity and responsiveness of the Informal Credit System with the strength of technical and administrative capabilities and financial resources of the formal credit institutions.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. I and III
4. II and III
5. All of these

46. As reported in various newspapers, many banks have revised their interest rates on home loans, car loans and other such loans. Which of the following phenomenon prompted these banks to make such an upward revision in their interest rates ?
I. RBI has revised the CRR and other such rates upward, which has created a liquidity crunch in the market.
II. Stock markets in the country are showing very high fluctuations as visible through their indexes. As a result, banks have lost a huge amount of money in trading. Banks now want to recover that money by increasing their interest rates.
III. Banks are in need of a huge amount of money, as they have to give revised pay to all its employees.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only m
4. All of the above
5. None of the above

47. What is difference between banks and NBFCs?
I. NBFCs business activities are akin to that of banks as they can lend and make investments; however there are a few differences between them.
II. NBFCs cannot accept demand deposites. They cannot issue cheques as they do not form part of the payment and settlement system.
III. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. II and III
4. Only III
5. I and II

48. Many times, we hear about the ‘Banking Ombudsman’. What is/are the major roles of same?
I. Banking Ombudsman is a quasi-judicial authority having powers to summon, the banks and the customers both in case of dispute.
II. The Banking Ombudsman are appointed by the President of India and are retired judges of the High or Supreme Courts.
III. The decisions/judgements given by the Banking Ombudsman cannot be taken to any court of justice as their decisions are last in case of bank related problems disputes.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

49. The Reserve Bank of India keeps on changing various ratios/rates frequently. Why is this done?
I. To keep inflation under control.
II. To ensure that Indian rupee does not lose its market value.
III. To ensure that banks do not earn huge profits at the cost of public money. Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

50. The legal relationship between a bank and its customer is a kind of
I. debtor and creditor.
II. principal and agent.
III. pledgor and pledgee.
IV. mortgagor and mortgagee.
Select the correct answer using the codes given below

1. I and III
2. I, III and IV
3. I, II, III and IV
4. I and II
5. I, II and III

Answer Key

Practice Set -3

1. What does EBT stands for?

1. Electronic Beleted Transfer
2. Electronic Beginners Transaction
3. Electronic Benefit Transfer
4. Electronic Beginning Transaction
5. None of the above

2. Core banking is one of the technological developments in banking system. Elements of core banking include

1. Making and servicing loans
2. Opening new accounts
3. Processing cash deposits and withdrawals
4. Processing payments and cheques
5. All of the above

3. Which of the following is not a method of credit control?

1. Cash reserve ratio
2. Open market operations
3. Credit deposit ratio
4. Bank rate policy
5. None of the above

4. In which year, did the Insurance Regulatory and Development Authority come into force?

1. 1999
2. 2000
3. 2001
4. 1991
5. 1993

5. Which of the following is not an essential requirement for the endorsement as per Negotiable Instrument Act, 1881?

1. It should be on the instrument
2. It should be made by the holder or the maker
3. Signatures should be in ink and not by pencil or rubber stamp
4. It should contain unconditional order
5. The endorser should sign the endorsement in the same style and with the same spellings as written in the instrument

6. The Central Government has extended the cover of Rashtriya Swasthya Bima Yojana (RSBY) to beedi workers and

1. carpenters
2. cobblers
3. school children
4. domestic workers
5. All of these

7. The merit of issuing notes with RBI can be seen is

1. uniformity
2. stability in currency
3. control of credit
4. All of these
5. None of these

8. The Goods and Service Tax (GST) is broadly divided into four slabs of

1. 4%, 8%, 15% and 25%
2. 5%, 12%, 18% and 28%
3. 4%, 12%, 16% and 30%
4. 6%, 10%, 18% and 30%
5. 8%, 12%, 16% and 25%

9. Which of the following is not a party of bill of exchange?

1. The drawer
2. The drawee
3. The payee
4. The endorser
5. None of these

10. Which of the following will set up core bank infrastructure for rural banks?

1. SIDBI
2. IBA
3. RBI
4. SBI
5. NABARD

11. Which of the following staterflents is correct about soiled/mutilated note?
I. All banks are authorised to accept soiled notes across their counters and pay the exchange value
II. All public sector bank branches and currency chest branches of private sector banks are authorised to adjudicate and pay value in respect of mutilated notes
III. The RBI has also authorised all commercial bank branches to treat certain notes in ‘two pieces’ as soiled notes and pay exchange value
Codes

1.  I and II
2. II and III
3. Only III
4. I, II and HI
5. I and III

12. The Reverse Mortgage Scheme is launched to give benefit to which of the following  groups of the society?

1. Government employees
2. Senior citizens
3. Unemployed youth
4. War widows
5. None of the above

13. What is the full form of IRR as used in banking/financial sector?

1. Internal Rate of Return
2. Internal Revaluation Reserve
3. Investment Reserve Ratio
4. Internal Risk Return
5. None of the above

14. Opening of maximum number of ATMs is an example of

1. indirect marketing
2. direct marketing
3. social marketing
4. All of the above
5. None of the above

15. Which among the following is related to bank risks?

1. Deposits
2. Bank funds
3. NPA
4. All of these
5. None of these

16. What do you understand by ‘Para Banking’ services?

1. Eligible financial services rendered by banks
2. Utility services provided by banks
3. Services provided through business  correspondents
4. Services provided to armed force personnel
5. None of the above

17. Banks are authorised to sell third party products. Which are these products?

1. Mutual funds
2. Term deposits
3. Debit cards
4.  Gift cheques
5. None of these

18. Why are interest rates charged by Micro Finance Institutions (MFIs) higher than lending rates of banks?

1. MFIs are not allowed to source deposits from public
2. Banks have the benefit of cheaper funds
3. MFIs borrow bulk of their funds from banks
4. MFIs borrow funds from banks at high cost and also their administrative expenses are more
5. None of the above

19. Which of the following is related to ‘restrictive crossing’?

1. Balance book
2. State Bank of India
3. A/c payee
4. Company
5. Two transverse parallel lines simply drawn across the face of the cheque

20. The Rashtriya Mahila Kosh (RMK) is working exclusively for

1. poor women
2. rural women
3. urban women
4. All of the above
5. None of the above

21. Telebanking service is based on

1. virtual banking
2. online banking
3. voice banking
4. core banking
5. None of the above

22. Which of the following is true?

1. NBFCs can accept deposits from the public
2. NBFCs cannot offer deposit schemes to the public
3. Deposits of NBFCs are insured with DICGC
4. NBFCs can accept deposits frbm public, if they are registered and permitted by RBI
5. None of the above

23. Which of the following is a prerequisites for transfer of a negotiable instrument?

1. Crossing
2. Acceptance
3. Noting with a notary
4. Blank endorsement
5. Mere delivery or endorsement and delivery

24. The Narasimham Committee II was setup to suggest some recommendations for improvement in the

1. efficiency and productivity of the financial institution
2. banking reform process
3. export of IT sector
4. fiscal reform process
5. None of the above

25. Which of the following steps is taken for financial inclusion in India?

1. The expansion of network of co-operative banks to provide credit to agriculture and saving facilities in rural areas
2. Nationalisation of banks in 1969 and expansion of branches
3. Creation of an elaborate framework of priority sector lending with mandated targets as a part of a strategy to meet the savings and credit needs of large sections of the Indian population, who had no access to institutional finance
4. All of the above
5. None of the above

26. What is not a potential limit of group lending?

1. Monitoring group members can be costly for borrowers
2. Group lending uses social sanctions instead of collateral foreclosure
3. Group lending brings added risks for borrowers, those of other members default
4. Exclusion of all group members after one of them default is too harsh a punishment
5. None of the above

27. Which of the following is the best alternative banking service to branch banking?

1. Establishment of small branches
2. Set up ATMs
3. Issuing of ATM cards
4. Giving credit cards
5. Mobile banking

28. A ULIP is a product offered by insurance companies that, unlike a pure insurance policy, gives investors both insurance and investment under a single integrated plan. What does ULIP stand for?

1. Unit Linked Insurance Plan
2. Unit Linked Industrial Plan
3. Unitary Linked Insurance Plan
4. Unit Leverage Insurance Plan
5. Unit Linked Insurance Principle

29. In case of a debt taken by a married woman, her husband will be liable for debt only if the debt is taken

1. with his consent or authority
2. for the supply of necessities of life to the wife, in case the husband defaults in supplying the same to her
3. Both 1 and 2
4. with his child authority
5. None of the above

30. Basel II norms are associated with which of the following aspects of banking industry?

1. Risk management
2. Manpower planning
3. Retirement benefits for the employees
4. Corporate governance
5. None of the above

31. From the given options, bring out the one which is not a function/power of Reserve Bank of India?

1. To assume the responsibility of meeting directly or indirectly all reasonable demands for accommodation
2. To hold cash reserves of the commercial banks and make available financial accommodation to them
3. To enjoy monopoly of the note issue
4. To assume responsibility of all banking operations of the government
5. To assume the responsibility of statistical analysis of data related to macro economy of India

32. Which of following institutions regulate non-banking financial companies?

1. RBI
2. SEBI
3. IRDA
4. Finance Ministry
5. None of these

33. The financial assistance or loans of ₹ 10000 by a bank to a small borrower will be called as

1. business finance
2. government finance
3. micro finance
4. small finance
5. KYC finance

34. Interest is calculated on actual 365 days basis, in respect of the following products, except

1. call money
2. notice money
3. term money
4. Gol dated securities
5. None of these

35. Banks have the lowest lending levels in the……… part of India.

1. Central
2. North-Eastern
3. Southern
4. Western
5. Northern

36. Co-operative development bank was set up by

1. NABARD
2. RBI
3. SBI
4. Central Government
5. None of these

37. Which of the following were the first rulers in India to issue coins which can be definitely attributed to the kings?

1. Shakas
2. Kushana
3. Indo-Greeks
4. Parthians
5. None of these

38. All venture Capital Funds must be registered with

1.  RBI
2. SEBI
3. Registrar of Companies
4. Either 1 or 2
5. None of the above

39. RBI has deregulated interest rate for savings accounts. What does it suggest?

1. Customers will get the benefit of higher interest rates
2. Banks will have the right to fix their interest rates independently
3. Each bank will have their respective interest rates without the need to adhere to fixed interest rate common to all banks
4. Banks will decide interest rates for individual customers according to their savings pattern
5. None of the above

40. Government security that is a claim on the government and is a secure financial instrument which guarantees of both capital and interest, is called

1. coupon security
2. gilt-edged security
3. corporate security
4. All of these
5. None of these

41. Kisan Credit Cards are an effective way of reaching out to the farmers by the banks. What assistance does the farmer receive in this way?

1. Credit facility for crops etc against an approved limit
2. Short term credit facility against value of his crops
3. Long term credit is provided against his land holdings
4. Loan is permissible against crops sold, but payment yet to be received by the farmer
5. None of the above

42. Which of the following is a characteristic of a capital market instrument?

1. Liquidity
2. Marketability
3. Long maturity
4. Liquidity premium
5. All of the above

43. Expand the term BCBS.

1. Bank’s Committee on Banking Supervision
2. Basel Committee on Banking Supervision
3. Bank’s Commission on Banking Supervision
4. Basel Commission on Banking Supervision
5. None of the above

44. Bank loan against property requires the asset to be free from encumbrances. What does it mean?

1. The asset to be free from any liability
2. The asset to be properly registered
3. The property to be fully constructed
4. The asset should not have multiple owners
5. None of the above

45. Which of the following is not considered as an instrument negotiable by custom or usage?

1. Delivery orders for goods
2. Railway receipts for goods
3. Hundi
4. Government promissory notes
5. Cheques

46. In bank’s parlance, credit risk in lending is

1. default of the banker to maintain CRR
2. default of the banker to maintain SLR
3. default of the banker to release credit to the customer
4. default of the customer to repay the loan
5. None of the above

47. One single statement that depicts the financial position of a bank and/or business enterprise at a given point time is called

1. Statement of Product Details
2. Reconciliation Statement
3. Balance Sheet
4. Quarterly Returns submitted to RBI
5. Trading and Manufacturing account

48. The gilt-edged market refers to the market for
I. government securities.
II. semi-government securities.
III. corporate securities.
Select the correct answer using the codes given below

1. Only I
2. I and II
3. II and III
4. I, II and III
5. Only

49. Banks need liquidity for which of the following objectives of banking?
I. To meet deposit withdrawal.
II. To fund loan demands.
III. To maintain public confidence.
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. I and II
5. II and III

50. At present NBFCs can sell/distribute mutual fund policies after RBI’s permission. But RBI will grant permission only if
I. the given NBFC has minimum 100 crores of funds
II. the given NBFC is making profit for last three years
III. the given NBFC has minimum NPA Choose the correct statements.

1. Only I
2. I and II
3. II and III
4. I, II and III
5. None of these

Answer key

 

 

 

Practice Set -4

1. For which of the following purposes, RBI has constituted a working group with Shri Deepak Mohanty as Chairman ?

1. Deregulation of primary markets
2. Deregulation of secondary markets
3. Deregulation of savings bank rates
4. Introduction of base rate
5. None of the above

2. For loans and advances granted by commercial banks to Small Road and Water Transport Operations Scheme (SRWTED), NABARD provides refinance under automatic refinance facility, subject to which of the following conditions?

1. Repayment of loan should not exceed 5 yr with moratorium of 6 months
2. Refinance amount is restricted to ₹ 15 lakh per borrower
3. The borrower should be from rural area and he should utilise the vehicle mainly for transportation of rural farm and non-farm products and inputs and passengers to/from marketing centres
4. All of the above
5. None of the above

3. Which of the following key reforms are not included in Indradhanush mission?

1. Bank Board Bureau
2. Capitalisation
3. Uniformity
4. Appointments
5. Empowerment

4. Under its Foreign Currency Pre-shipment Credit (FCPC), Exim Bank gives short term foreign currency finance to eligible exports for procurement of inputs and to commercial banks for on-lending to export customers; the terms of finance is/are

1. interest rate on finance is maximum 2% over LIBOR (London Inter Bank Offered Rate)
2. maximum period of finance is 180 days from the date of disbursement
3. for commercial banks, loans availed from Exim Bank are exempted from the requirement of Cash Reserve Ratio (CRR), Statutory Liquidity Requirement (SLR) and Incremental Credit Deposit Ratio requirements
4. All of the above
5. None of the above

5. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as

1. CHAPS
2. SWIFT
3. NEFT
4. SFMS
5. CHIPS

6. Tier-I capital would mean

1. paid up capital
2. statutory reserves and other disclosed free reserves
3. capital reserves representing surplus arising out of sale proceeds of assets
4. All of the above
5. None of the above

7. ‘Sub-Prime Lending’ which was the root cause for global melt down in banks, during 2008 means

1. bank finance for non-productive activities
2. bank finance not properly disclosed in its Balance Sheet
3. bank finance in violation to the directives of the Central Bank
4. bank finance to fictitious entities
5. bank finance who do not qualify for the best market interest rates

8. Factoring means

1. an easy way of raising capital from a factoring company by small business
2. selling of account receivables on a contract basis for cash payment to a factor before it is due
3. an arrangement for raising short term money against prepaid expenses
4. a method of discounting of long term bills
5. None of the above

9. Who are eligible to launch payments Bank?

1. Card Issuers
2. Metro railway
3. Promoter
4. Financial Institut
5. RRBs

10. Which of the following is not a programme/ agency of the Union Ministry of Finance?

1. Investor Education and Protection Governance (IEPG)
2. National Foundation for Corporate Governance (NFCG)
3. Serious Frauds Investigation Office (SFIO)
4. Investment Commission
5. Central Rural Sanitation Programme

11. Which is the card that looks like any other plastic card or an ATM card with Integrated Circuit (IC chip)?

1. Member card
2. Charge card
3. Credit card
4. Smart card
5. None of these

12. Tier-II capital consists of

1. undisclosed reserves and cumulative perpetual preference shares
2. general provisions, loss reserves and revaluation reserves
3. subordinated debt, hybrid debt capital instruments
4. All of the above
5. None of the above

13. As per guidelines of Reserve Bank of India, a new private sector bank

1. shall be subject to prudential norms in regard to income recognition, asset classification and provisioning, capital adequacy, etc
2. will have to observe priority sector lending targets as applicable to other domestic banks
3. will be required to open rural and semi-urban branches
4. All of the above
5. None of the above

14. For which one of the following loan products ‘teaser loans’ are offered by banks?

1. Educational loans
2. Commercial loans
3. Loans against security of gold
4. Retail trade loans
5. Home loans

15. Initial repayment holiday given to a borrower for repayment of loan is called as

1. subvention
2. moratorium
3. re-schedulement
4. amortisation
5. EMI

16. The Basic Committee has defined capital in two tiers (Tier-I and Tier-II). Tier-I capital is known as

1. net capital
2. gross capital
3. working capital
4. core capital
5. None of these

17. As per the existing policy, the Cash Reserve Ratio (CRR) of scheduled banks is fixed at a certain percentage of their ND1L. What is full form of NDTL ?

1. New Demand and Tenure Liabilities
2. Net Demand and Time Liabilities
3. National Deposits and Total Liquidity
4. Net Duration and Total Liquidity
5. New Deposits and Term Liquidity

18. A consortium of commercial banks has joined hands to float a new company which will collect data related to frauds and security risks. What is the name of the company?

1. Loss Data Consortium
2. Customer Service Corporation
3. Bank Net India Limited
4. Nu Tech Corporate Services Limited
5. None of the above

19. Zero balance account is generally allowed to be opened for

1. salaried class
2. businessmen
3. foreign customers
4. children
5. senior citizens

20. Which one of the following may be the consequence of buying forex in the market by the RBI?

1. It leads to inflation
2. It leads to control over inflation
3. It does not affect inflation
4. It results into deflation
5. None of the above

21. As per the new guidelines issued by SEBI, companies are required to list shares within how many days of the closure of the Initial Public Offers (IPOs)?

1. 60 days
2. 12 days
3. 30 days
4. 45 days
5. None of these

22. Almost all banks in our country have introduced………. facility for granting crop loans to farmers.

1. term loans
2. kisan credit cards
3. bank guarantee
4. foreign exchange
5. reverse mortgage

23. When a bank dishonours a cheque, it is called

1. settlement of the cheque
2. withdrawing of the cheque
3. nullifying of the cheque
4. truncation of the cheque
5. returning of the cheque unpaid

24. Primary Dealers (PDs) deal in……….. in both primary and secondary markets.

1. equities
2. debentures
3. corporate bonds
4. government securities
5. None of these

25. What are teaser loan rates charged by banks?

1. Fixed rate of interest charged by banks
2. Floating rate of interest charged by banks
3. Rate of interest in the initial period is less and goes up subsequently
4. Rate of interest in the initial period is more and it goes down subsequently
5. None of the above

26. In which one of the following states, India’s first Islamic Bank is proposed to be setup?

1. Kerala
2. Tamil Nadu
3. Odisha
4. Bihar
5. None of these

27. Assume that Reserve Bank of India reduces the bank rate by 1%, what will be its impact?

1. Less liquidity in the market
2. More liquidity in the market
3. No change in the liquidity in the market
4. Mobilisation of more deposits by commercial banks
5. None of the above

28. Which one is true in respect of bank marketing?

1. Bank marketing deals with providing services to satisfy customer’s financial needs and wants
2. Bank marketing has to discover/ascertain/anticipate the financial needs of the corporates
3. Bank marketing may be required to satisfy the corporates and institutions’ other related needs and wants
4. Bank marketing means competitive element, efficiency and effectiveness in the process
5. None of the above

29. ‘National Financial Switch’ has been setup to facilitate connectivity between the bank’s switches and their ATMs and inter bank payment gateway for authentication and routing the payment details of various e-commerce transactions. Which organisation has setup this switch?

1. IBRD
2. IDRBT
3. SBI
4. SIDBI
5. None of these

30. In the world of commodity exchanges, the concept of “A standard contract to buy or sell a specified commodity at a certain date in future and at a market driven price” is known as

1. future contract
2. forward contract
3. market contract
4. standard contract
5. None of the above

31. Who amongst the following has asked banks to adopt ‘Six Steps’ approach to prevent diversion of funds by the companies?

1. Company Registrar
2. SEBI
3. RBI
4. AMFI
5. All of these

32. Preshipment packing credit advances are generally given by banks to

1. farmers
2. retail traders
3. professionals
4. exporters
5. transport operators

33. Which committee has been constituted by the Reserve Bank of India (RBI) to study the regulatory issues relating to financial technology and digital banking in India?

1. Nachiket Mor committee
2. Sudarshan Sen committee
3. M V Nair committee
4. K S Krishnaswamy committee
5. None of the above

34. In cases where the loan is sanctioned by the bank against the borrower submitting the fake/forged documents and thus, playing fraud on the bank, such a loan is to be treated in the bank’s books as a…………. asset, even when there is recovery in the account as per the repayment schedule approved by the bank at the time of sanctioning the loan.

1. standard
2. sub-standard
3. doubtful
4. loss
5. None of these

35. Credit cards are known as

1. hard money
2. easy money
3. soft money
4. plastic money
5. real money

36. A loan granted for short term crops will be treated as NPA, if the installment of principal or interest thereon or both remain overdue for crop season(s).

1. one
2. two
3. three
4. four
5. None of these

37. What are major functions undertaken by merchant bankers ?

1. Issue management
2. Capital structuring/ restructuring
3. Market maker in capital market
4. All of the above
5. None of the above

38. In our country, a cheque remains valid for  payment for…… from the date of issue.

1. 3 months
2. 6 months
3. 9 months
4. 12 months
5. 18 months

39. The Forward Markets Commission is responsible for regulation of which type of trading in India?

1. Commodities future trading
2. Currency future trading
3. Equity future trading
4. Derivative future trading
5. All of the above

40. The Industrial Finance Corporation of India provides loans to

1. government companies which are in core sector (i.e. power generation, steel, coal and cement etc)
2. newly established industries in backward districts
3. industries in private sector
4. joint stock companies and cooperative societies engaged in the manufacturing and processing of goods
5. None of the above

41. The advantages of Local Area Network (LAN) to banks include

1. sharing of expensive resources by several users
2. availability of stored information to all users
3. sharing of processing load by computers in LAN as all the terminals are intelligent terminals
4. All of these
5. None of these

42. Basel II norms are associated with which of the following aspects of the banking industry?

1. Risk management
2. Manpower planning
3. Retirement benefits for the employees
4. Corporate governance
5. None of the above

43. A decreasing current ratio indicates

1. a stable liquidity
2. an increasing liquidity
3. a strained liquidity
4. satisfactory current solvency
5. None of the above

44. In the case of creation of registered mortgages, the mortgage deed should be presented for registration with Registrar of Assurances within……….. from the date of execution of the deed.

1. 1 month
2. 2 months
3. 3 months
4. 4 months
5. 7 months

45. Which of the following is not considered one among the loans under Retail banking?

1. Car loan
2. Housing loan
3. Personal loan
4. Education loan
5. Infrastructure loan

46. A lease

1. is a rental agreement between owner of a flat/house and the tenant, whereby the tenant pays specified amount on specified dates to the owner
2. is a legal contract between the owner of an asset and its user, containing many conditions including payment of a specified amount by the user to the owner for use of the asset
3. is mainly used for machinery
4. is one of the ways resorted by the companies
5. None of the above

47. Country’s largest lender State Bank launched a RuPay Platinum debit card. The card offers various benefits like

1. 5 per cent cash back on utility bills
2. complimentary airport lounge access
3. personal accident death
4. permanent total disability insurance cover of ₹ 2 lakh
5. All of the above

48. Which of the following is/are a/an indicator of the financial health of a country?
I. GDP
II. PPP
III. FDI in a year
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. All of these
5. None of these

49. Consider the following statements.
I. Kerala Gramin bank (KGB) is the largest regional rural bank in the country.
II. Headquarter of Kerala Gramin Bank (Founded-1976) is at Malappuram in Kerala, India.
III. Kerala Gramin Bank is jointly owned by Government of India, Government of Kerala and sponsored by Canara Bank. Which of the statement(s) given above is/ are correct?

1. I and II
2. II and in
3. I, II and III
4. I and III
5. Only III

50. On which one of the following issues can SEBI penalise any company in India ?
Violation of Banking Regulation Act.
Violation of foreign portfolio investment guidelines.
For violation of Negotiable Instrument Act.
Select the correct answer using the codes given below

1. Only I
2. I, II and III
3. I and II
4. II and III
5. All of these

Answer Key

Practice Set -5

1. The Monetary and Credit Policy of India is the responsibility of which of the following?

1. Planning Commission
2. Finance Ministry
3. RBI
4. National Advisory Council
5. None of the above

2. The Securitisation And Reconstruction of Financial Assets and Enforcement of Security Interests Act (SARFAESI Act) at present is not applicable to

1. public sector banks
2. financial institutes of the government
3. private banks
4. non-banking financial companies
5. small and co-operative banks

3. The rate of interest on Savings Bank Account is stipulated by

1. the concerned bank
2. RBI
3. Indian Banks Association
4. Government of India
5. Banking Codes and Standards Board of India

4. Which of the following acts was framed specially to deal more effectively with the problem of non performing assets in banking system?

1. Companies Act
2. Banking Regulation Act
3. Foreign Exchange Management Act
4. Industrial Dispute Act
5. SARFAESI Act

5. Which of the following does not come under the category of development banks?

1. Industrial Development Bank of India
2. Small Industries Development Bank of India
3. Industrial Investment Bank of India
4. State Finance Corporation
5. Export-Import Bank

6. Central Board of Direct Taxes (CBDT) has launched the E-Nivaran facility for online redressal of taxpayers grievances related to

1. Refunds
2. Income Tax Returns (ITRs)
3. Permanent Account Number (PAN)
4. Reduce harassment of the Public
5. All of the above

7. Which of the following is an effort in the direction of financial inclusion?

1. Internet banking
2. Anywhere banking
3. No frills accounts
4. Foreign currency accounts
5. All of the above

8. Which of the following statement is correct?

1. RBI is just like any ordinary commercial bank
2. RBI is responsible for the overall Monetary Policy
3. The Fiscal Policy of India is approved by RBI
4. RBI has Deputy Chairman Planning Commission on its board
5. None of the above

9. A Bill of Exchange in which a bank orders its branch or another bank, as the case may be, to pay a specified amount to a specified person or to the order of the specified person is called

1. cheque
2. bankdraft
3. promissory note
4. insurance
5. None of these

10. Which of the following products of a bank is specifically designed to provide financial help to children in their higher studies in India or in a foreign nation?

1. Personal loan
2. Corporate loan
3. Educational loan
4. Mortgage loan
5. None of these

11. Inflation in India is measured on which of the follow indexes/indicators?

1. Cost Of Living Index (COLI)
2. Consumer Price Index (CPI)
3. Gross Domestic Product (GDP)
4. Wholesale Price Index (WPI)
5. None of the above

12. Which of the following is a payment and settlement system used by the banks in India?

1. Liquidity adjustment facility
2. Real time gross settlement
3. Forward rate agreements
4. Central depository service
5. Negotiated dealing system

13. Which of the following is not an activity of merchant banking in India?

1. The management of the customers securities
2. The management of the portfolio
3. The managemnt of projects and counselling as well as appraisal
4. The management of underwriting of shares and debentures
5. None of the above

14. On the back side of ₹ 500 and ₹ 2000 note, an image of_____ and_____ , respectively have been placed.

1. Mangalayan, Taj Mahal
2. Lightning torch, Red fort
3. Red fort, Mangalayan
4. Lightning torch, National flag
5. None of the above

15. A Universal Bank may undertake multi­farious financial services under one roof, e.g.

1. receiving money on current or deposit accounts and lending of money for trade, industries, exports, agriculture, etc
2. mortgage financing, project financing, infrastructure lending, asset securitisation, leasing, factoring, etc
3. remittance of funds, custodial services, credit/ debit cards, collection of cheques/bills, etc
4. All of the above
5. None of the above

16. The Securities and Exchange Board of India (SEBI) recently imposed a restriction on money flow in equity through ‘P-Notes’. What is the full form of ‘P-Notes’?

1. Permanent Notes
2. Purchase Notes
3. Participatory Notes
4. Private Notes
5. None of the above

17. Which of the following is incorrect about the acceptance of deposits by the NBFCs?

1. They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months
2. They cannot accept deposits repayable on demand
3. They should have minimum investment grade credit rating
4. Their deposits are not insured
5. The repayment of deposits by NBFCs is guaranteed by RBI

18. IFRS stands for

1. International Financial Reporting Standards
2. Indian Financial Rating Standards
3. International Financial Rating Standards
4. Indian Functional Reporting Standards
5. None of the above

19. Which of the following is the directive given to the Government of India in the Financial Stability Report submitted to it?

1. To focus on financial consistency
2. To reduce fiscal deficit
3. To ensure GDP growth
4. To reduce revenue deficit
5. None of the above

20. The rate of interest payable on a bank deposit is determined by

1. Indian Bank’s Association
2. the bank concerned
3. RBI
4. Finance Ministry
5. None of the above

21. What is meant by ‘underwriting’, the term frequently used in financial sector?

1. Undervaluation of the assets
2. The act of taking on a risk for a fee
3. Giving a guarantee that a loan will not become a bad loan
4. The act of permission to float an IPO
5. None of the above

22. Bridge loans refer to

1. loans granted to construction companies for construction of bridges
2. loans granted to PWD for construction of bridges over rivers
3. interim finance allowed by banks to their customers, pending disbursement of term
4. loans by financial institutions
5. loans granted to railway for construction of bridges
6. None of the above

23. According to the guidelines, the Reserve Bank of India will consider proposals for merger and amalgamation of urban co-operative banks when

1. the net worth of the acquired bank is positive and the acquirer bank assures to protect entire deposits of all the depositors of the acquired bank
2. the net worth of acquired bank is negative, but the acquirer bank on its own assures to protect deposits of all the depositors of the acquired bank
3. the net worth of the acquired bank is negative and the acquirer bank assures to protect the deposits of all the depositors with financial support from the State Government extended up front as a part of the process of merger
4. All of the above
5. None of the above

24. The Small Industries Development Bank of India (SIDBI) has been implementing special schemes for women viz;

1. Mahila Udayam Nidhi
2. Mahila Vikas Nidhi
3. Mahila Samridh Nidhi
4. Both 1 and 2
5. Both 2 and 3

25. Choose the false statement regarding NCDEX.

1. National Commodity and Derivatives Exchange (NCDEX) launched ‘Gold Now’ platform.
2. NCDEX will launch forward contracts for gold coins in 5 g, 10 g and 50 g denominations to be traded at the platform.
3. NCDEX is an online commodity exchange based in India.
4. NCDEX has an independent Board of Directors.
5. NCDEX is a private limited company

26. Net balance maintained in current account by co-operative banks with…….. are not treated as cash for the purpose of CRR/SLR.

1. State Bank of India
2. State Bank of Hyderabad
3. IDBI Bank Limited
4. Canara Bank
5. All of the above

27. An independent authority appointed by the RBI for resolution of complaints against deficiency in banking services, is known as

1. Chief Manager
2. Chief Vigilance Officer
3. No such authority is appointed
4. Banking Ombudsmen
5. Compliance Officer

28. A ‘Basic Savings Bank Deposit Account’ facility is available

1. to all individuals irrespective of their background
2. to all individuals from below poverty line families only
3. only to individuals from the SC/ST
4. only to individuals from minority communities
5. only to individuals from weaker sections of the society

29. Which one of the following is a capital market instrument?

1. A treasury bill
2. A negotiable certificate of deposit
3. Commercial paper
4. All of the above
5. None of the above

30. Which of the following schemes available in the financial markets is not meant for investment purposes?

1. National-savings certificates
2. Infrastructure bonds
3. Mutual funds
4. Letter of credit
5. All of the above

31. Land development banks provide long term credit for schemes of basic importance to agriculture as

1. minor irrigation purposes like wells, dug- cum-bore wells, tubewells, pump sets and irrigation tanks
2. mechanisation of agriculture i.e. loans for purposes of tractors, power tillers, threshers, etc
3. land reclamation, soil conservation, plantation of fruit orchards, dairy development schemes etc, involving heavy expenditure
4. Both 1 and 2
5. All of the above

32. The RBI is not expected to perform the function of

1. the banker to the government
2. accepting deposit from commercial banks
3. accepting deposits from general public
4. issuer of currency
5. None of the above

33. By virtue of the amendment carried out by the Regional Rural Bank (Amendment) Act, 1987, the Chairman of a Regional Rural Bank (RRB) is to be appointed by

1. Central Government
2. State Government
3. sponsor bank in consultation with NABARD
4. Reserve Bank of India
5. None of the above

34. How does a bank establish the identity of a customer?

1. By getting introduction of an existing customer
2. By following KYC norms
3. By taking AADHAR card copy
4. All of the above
5. None of the above

35. Basel I, which was issued in 1988, focuses on the

1. capital adequacy of financial institutions
2. improvement of the banking sector’s ability to deal with financial and economic stress
3. technology upgradation
4. training of banking staff
5. professionalism in banking

36. Capital market is a market which deals in

1. short term funds
2. long term funds
3. gilt-edge securities
4. All of the above
5. None of the above

37. The Minimum Permissible Investment in the Sovereign Gold Bonds 2015 is 2 g and the maximum buying limit is

1. 50 g
2. 250 g
3. 550 g
4. 150 g
5. 500 g

38. RBI stipulates a healthy mix of CASA in the business figures of banks. What does CASA denote?

1. Customer Analysis and Savings Pattern
2. Cost Appreciation and Selling Analysis
3. Current Account and Savings Account
4. Credit and Savings Aggregate
5. None of the above

39. Which among the following is an incorrect statement?

1. The Reserve Bank of India has the special powers to control and regulate the commercial banking system
2. A rise in the bank rate is a strong anti-deflationary monetary tool
3. Minimum Reserve requirements are fixed to ensure the liquidity and solvency of individual commercial banks
4. Reserve Ratio Requirement is a quicker method than Bank rate and Open Market Operations (OMO) for credit regulations
5. Rationing of credit is a powerful qualitative monetary tool

40. Quantitative instrument of RBI can be

1. Bank Rate Policy (BRP)
2. Cash Reserve Ratio (CRR)
3. Statutory Liquidity Ratio (SLR)
4. All of the above
5. None of the above

41. Which of the following acts govern the RBI functions?

1. RBI Act, 1934
2. Banking Regulation Act, 1949
3. Companies Act, 1956
4. Foreign Exchange Regulation Act, 1973
5. Foreign Exchange Management Act, 1999

42. The primary credit society

1. forms the base of the co-operative credit structure and its working depends to a large extent, on the soundness of the whole co-operative credit structure is the best agency to inculcate the habit of thrift, self-help and mutual help among its members
2. is engaged in securing for its members services of various kinds
4. All of these
5. None of these

43. Which of the following conditions are required to be fulfilled by a Regional Rural Bank (RRB) to be eligible for opening of new branches?

1. It should not have defaulted in maintenance of SLR and CRR during the last 2 yr
2. It should be making operational profits
3. Its net worth should show improvement and its net NPA ratio should not exceed 8%
4. Both 1 and 2
5. All of these

44.The formal beginning of the merchant banking services in India began in 1967, when the Reserve Bank of India provided license to the

1. State Bank of India
2. Oriental Bank of Commerce
3. Grindlays Bank
4. Federal Bank
5. None of the above

45. While discussing investments, there is a mention of short term government security. What is this type of investment known as?

1. Debenture
2.  Mutual fund
3. Treasury bill
4. Share
5. All of these

46. Which of the following is not a recommendation of the Narasimham Committee, 1991?

1. Reduction of CRR and SLR
2. Phasing out directed Credit Programme
3. Reduction of capital adequacy ratio
4. Establishment of ARF fund
5. Autonomy to public sector bank

47. The commercial banking system in India consists of

1. nationalised banks and private sector banks
2. scheduled and non-scheduled banks
3. regional rural banks, co-operative banks, land development banks
4. All of the above
5. None of the above

48. Under the Negotiable Instrument Act, 1881, an instrument which is incomplete in some respects, is called a/an

1. foreign instrument
2. inland instrument
3. inchoate instrument
4. ambiguous instrument
5. fictitious instrument

49. Which of the following is/are the major concept(s) visible in today’s banking industry in India?
I. Risk-based management
II. Growing competition
III.  initiatives
Select the correct answer using the codes given below

1. Only I
2. Only II
3. Only III
4. I and III
5. All of these

50. Which of the following are functions of the RBI?
I. Acts as the currency authority,
II. Controls money supply and credit.
II. Manages foreign exchange.
IV. Serves as a banker to the government. Select the correct answer using the codes given below

1. I and II
2. II and III
3. I, II and III
4. All of. these
5. None of these

Answer Key