BANKING AWARENESS PRACTICE MCQs FOR ALL BANK EXAMS

1.    Export Oriented Units can retain ___ % of their export earnings in foreign currency.
    A. 50       

B. 100       

C. 80      

D. 66.67   
    E. None of these

2.    Foreign investment in private banks, (in aggregate including FDI, FII, NRI, etc.) in India is permitted up to ____%
    A. 99       

B. 74      

C. 49        

D. 24
    E. None of these

3.    The minimum shareholding of RBI in SBI should be ___% as per SBI Act.
    A. 50         

B. 59        

C. 51        

D. 55
    E. None of these

4.    RBI pays interest on CRR balances of banks at _____.
    A. Bank Rate      

B. Repo Rate         
    C. Bank Rate minus 2%        

D. Zero %
    E. None of these

5.    The three pillars of the Basel II framework are :
    A. Minimum capital requirements              
    B.  Asset - Liability Management   
    C. Market discipline           
    D. Supervisory review        

E. a, c & d

6.    The Code of Bank's Commitment has been issued by  :
    A. RBI            

B. SBI            

C. IBA       
    D. BCSBI       

E. None of these

7.    For declaring dividend, banks should have a CRAR of at least ____% for the preceding 2 years, and net NPA of less than _____%.
    A. 11, 3     

B.  9,  7    

C. 10,   5     

D. 9,  5
    E. None of these

8.    After ________, foreign banks operating in India will be freed of RBI imposed restrictions on their operations and treated on par with Indian banks.
    A. April, 2008           

B. April, 2009         
    C. April, 2010           

D. April, 2015
    E. None of these

9.    Under Section 19(1) of the Banking Regulation Act, 1949, para- banking activities refer to :
    A. leasing        

B.  hire purchase finance   
    C.  factoring    

D. credit card operations   
    E. only a, b & c

10.    The percentage of profit that a bank is required to transfer to its reserve fund as per Banking Regulation Act is ______%.
    A. 25            

B. 20         

C. 30         

D. 50
    E. None of these

11.    Interest payable on savings bank accounts is?
    A. De-regulated by RBI
    B. Regulated by State Governments
    C. Regulated by Central Govt
    D. Regulated by RBI
    E. Regulated by Finance Minister

12.    The usual deposit accounts of banks are?
    A. Current accounts, electricity accounts and insurance premium accounts.
    B. Current accounts, post office savings, bank accounts and term deposit accounts.
    C. Loan accounts, savings bank accounts and term deposit accounts.
    D. Current accounts, savings bank acco- unts and term deposit accounts.
    E. Current bill accounts and term deposit accounts.

13.Fixed deposits and recurring deposits are?
A. Repayable after an agreed period
B. Repayable on demand
C. Not repayable
D.Repayable after death of depositors
E.Repayable on demand or after an agreed period as per bank's choice

14. Accounts are allowed to be operated by cheques in respect of?
    A. Both savings bank accounts and fixed deposit accounts.
    B. Savings bank accounts and current accounts.
    C. Both savings bank accounts and loan accounts.
    D. Both savings bank accounts and cash accounts only.
    E. Both current accounts and fixed deposit accounts.

15.    Which of the following is correct statement?
    A. No interest is paid on current deposit accounts.
    B. Interest is paid on current accounts at the same rate as term deposit accounts.
    C. The rate of interest on current accounts and savings accounts are the same.
    D. No interest is paid on any deposit by the bank.
    E. Savings deposits are the same as current deposits.

16.    Banking services delivered to a customer by means of a computer control system that does not directly involve banks branch is called?
    A. Universal banking  B. Virtual banking
    C. Narrow banking
    D. Brick & Mortal banking       

E. None

17.    Financial inclusion means provision of ?
    A. Financial services namely payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the bank
    B. Ration at affordable cost to persons not yet given the same
    C. House at affordable cost to persons not yet given the same
    D. Food at affordable cost to persons not yet given the same
    E. Education at affordable cost to persons not yet given the same

18.    When a bank returns a cheque unpaid, it is called?
    A. Payment of the cheque
    B. Drawing of the cheque
    C. Canceling of the cheque
    D. Dishonor of the cheque
    E. Taking of the cheque

19.    Who is the Chairman of the committee constituted by RBI to study issues and concerns in the Micro Finance Institutions (MFI) Sector?
    A. Y.H Malegam  

B. Dr. KC Chakraborty
    C. C. Rangrajan   

D. M. Damodaran
    E. Usha Thorat

20.    Which of the following types of accounts are known as 'Demat Accounts'?
    A. Accounts which are Zero Balance
    B. Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there
    C. Accounts in which shares of various companies are traded in electronic form
    D. Accounts which are operated through internet banking facility
    E. None of the above

21.    NEFT means?
    A. National Electronic Funds Transfer
    B. Negotiated Efficient Fund Transfer system                 
    C.National Efficient Fund Transfer solution
    D. Non Effective Fund Transfer system
    E.Negotiated Electronic Foreign Transfer system.

22.    Distribution of insurance products and insurance policies by banks as corporate agents is known as?
    A. General insurance
    B. Non life insurance   

C. Bancassurance
    D. Insurance Banking
    E. Deposit Insurance

23.    In respect of partnership business, LLP stands for:
    A. Local Labour Promotion
    B. Low Labour Projects
    C. Limited Loan Partnership
    D. Longer Liability Partnership
    E. Limited Liability Partnership

24.    What is a stale cheque?
    A. A cheque issued without drawer's signature.     

B. A cheque with only signature of the drawer.   

C. A cheque which has completed 3 months from the date of its issue.    

D. Any one of the above.
    E. None

25.    Interest on savings bank account is now calculated by banks on?
    A. Minimum balance during the month
    B. Minimum balance from 7th to last day of the month
    C. Minimum balance from 10th to last day of the month
    D. Maximum balance during the month
    E. Daily product basis

26.    Largest shareholder (in percentage share holding) of a Nationalized bank is ?
    A. RBI            

B. NABARD         

C. LIC
    D. Govt of India         

E. IBA

27.    An account that can be opened by business organisations and also individuals is known as a?
    A. Term deposit     

B. Checking Account
    C. Saving Bank deposit
    D. No Frills Accounts  

E. Current deposit

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

B. SWIFT        

C. NEFT
    D. SFMS           

E. CHIPS

29.    Buy now & pay later refers to?
    A. Foreign Currency 

B. Internet Banking
    C. US Dollars         

D. Traveler's cheques
    E. Credit Cards

30.    Which one of the following is not 'Money Market Instrument'?
    A. Treasury Bills    

B. Commercial Paper
    C. Fixed Deposit    

D. Equity Shares
    E. None

31.    Which one of the following is a retail banking product?
    A. Home Loans
    B. Working capital finance
    C. Corporate Term Loans
    D. All the above                   

E. None

32.    Finance Ministry has asked the RBI to allow common ATMs that will be owned and managed by non-banking entities hoping to cut transaction costs for banks. Such ATMs are known as?
    A. Black label ATMs
    B. Offsite ATMs
    C. On site ATM's or red ATMs
    D. Third party ATMs
    E. White label ATMs

33.    Technological advancement in the recent times has given a new dimension to banks, mainly to which one of the following aspects?
    A. New Age Financial Derivatives
    B. Service Delivery Mechanism
    C. Any Banking       

D. Any type banking
    E. Multilevel Marketing

34. Which of the following is NOT a function of the Reserve Bank of India?
    A. Fiscal Policy Functions
    B. Exchange Control Functions
    C. Issuance, Exchange and Destruction of currency notes
    D. Monetary Authority Functions
    E. Supervisory and Control Functions

35.    Which of the following is NOT required for opening a bank account?
    A. Identity Proof         

B. Address Proof
    C. Recent Photographs
    D. Domicile Certificate           

E. None

36.    What is the maximum deposit amount insured by DICGC?
    A. Rs. 2,00,000 per depositor per bank
    B. Rs. 2,00,000 per depositor across all banks
    C. Rs. 1,00,000 per depositor per bank
    D. Rs. 1,00,000 per depositor across all bank
    E. None

37.    The Biggest employee in the Private Banking Sector is?
    A. ICICI       

B. HDFC      

C. AXIS Bank    
D. YES Bank      
E. None of these

38.    With reference to a cheque who is drawee?
    A. The bank that collects cheque.
    B. The payee's bank.
    C. The endorsee's bank.
    D. The endorser's bank.
    E. The bank upon which the cheque is drawn.

39. In which of the following fund transfer mechanisms, funds can be moved from one bank to another and where the transaction is settled instantly without being bunched with any other transaction?
    A. RTGS          
B. NEFT            
C. TT     
    D. EFT     
E. MT

40.    Banking Ombudsman Scheme is appli- cable to the business of ?
    A. All Scheduled commercial banks excluding RRBs. 
B. All Scheduled commercial banks including RRBs.
    C. Only Public Sector Banks
    D. All Banking Companies  
E. All scheduled banks except private banks.

ANSWERS:
1) B  2) B  3) D  4) D  5) E  6) D  7) B  8) B  9) E  10) B  

11) A  12) D  13) A  14) B  15) A  16) B  17) A  18) D  19) A  20) C  

21) A  22) C  23) E  24) C  25) E  26) D  27) A  28) B  29) E  30) C  

31) A  32) E  33) B  34) A  35) D  36) C  37) C  38) E  39) A  40) B