BANKING AWARENESS PRACTICE QUESTIONS

1.    Nationalization of banks aimed at all of the following except?
    A. Provision of adequate credit for agriculture, SME & exports.
    B. Removal of control by a few capitalists.
    C. Provision of credit to big industries only.
    D. Access of banking to masses.
    E. Encouragement of a new class of entrepreneurs.

2.    Which one of the following banks is headed by a Woman CEO?
    A. Bank of Baroda      

B. HDFC Bank
    C. Central Bank of India  
    D. PNB               

E. ICICI

3.    Base Rate is the rate below which no Bank can lend their funds. Who sets up this 'Base Rate' for Banks?
    A. Individuals Banks Board
    B. Ministry of Commerce
    C. Ministry of Finance          

D. RBI
    E. Interest Rate Commission of India

4.    What is a 'Debit Card'?
    A. It is a card issued by a Rating Agency.
    B. It is a card which can be used for withdrawing cash or making payment even in the absence of any balance in the account.
    C. It is a card which can be used for withdrawing cash or making payment at Point of Sales (POS) if there is balance in the account.
    D. It is a card issued to borrowers
    E. It is a card which can be used for making STD calls.

5.    Bad advances of a Bank are called?
    A. Standard accounts     

B. Book debts
    C. Non Performing Assets
    D. Out of order accounts
    E. Overdrawn accounts

6.    Axis Bank is a?
    A. Public Sector Bank
    B. Private Sector Bank
    C. Co-operative Bank    

D. Foreign Bank
    E. Gramin Bank

7.    By increasing repo rate, the economy may observe the following effects ______
    A. Rate of interest on loans and advances will be costlier.
    B. Industrial output would be affected to an extent.
    C. Banks will increase rate of interest on deposits.
    D. Industry houses may borrow money from foreign countries.     

E. All of these.

8.    Increased interest rates, as is existing in the economy at present will_______
    A. Lead to reduction in borrowings
    B. Lead to lower GDP growth.
    C. Mean higher cost of raw materials.
    D. Mean lower cost of raw materials.
    E. Mean higher wage bill.

9.    Which of the following schemes is launched to provide pension to the members of unorganized sectors in India?
    A. Swabhiman           

B. Jeevan Dhara
    C. Jeevan Kalyan    

D. ASHA
    E. Swalamban

10.    A cheque returned for insufficiency of funds. Payee will have right to issue notice and approach court of law for justice under section 138 of which act?
    A. Indian Penal Code
B. Negotiable Instrument Act
    C. Criminal Procedure Code
    D. Payment and Settlement Act
    E. Indian Contract Act

11.Mr. Rajendra had filed a complaint with Banking Ombudsman and is not satisfied with the decision. What is the next option available for him to get his problem redressed?
    A. Write to the CMD of the Bank.
    B. File an appeal before the Finance Minister.
    C. File an appeal before the Banking Ombudsman again.
    D. File an appeal before the Dy. Governor RBI.
    E. Simply close the matter as going to court involves time and money.

12.    Which of the following is an example of Financial assets?
    A. National Saving Certificate
    B. Infrastructure Bonds
    C. Indira Vikas Patra
    D. Krishi Vikas Patra     

E. All of these

13.    Bank branches which can undertake foreign exchange business directly are known as:
    A. Authorized dealers 

B. Foreign dealers
    C. Overseas branches
    D. Approved dealers
    E. Exchange branches

14.    Insurance cover for bank deposits in our country is provided by ____
    A. SBI     

B. Govt of India   
    C. GIC     

D. LIC          

E. DICGC

15.    The Financial Literacy does not include which of the following?
    A. How to invest the funds
    B. How to use the limited funds carefully
    C. How to minimize the risks
    D. How to reinvest the money earned
    E. None of these

16.    'ADB' refers to-
    A. Amedical Development Bank
    B. Amedical Depository Bureau
    C. Additional Debit Balance
    D. Only a & b
    E. Asian Development bank

17.    When a banker talks about CDR, what is he talking about?
    A. Corporate Debt Restructuring
    B. Corporate Debt Rollover
    C. Company Debt Rollover
    D. Corporate Deposit Restructuring
    E. Company Deposit Restructuring

18.    Expand the term ALM as used in Banking/Finance sector?
    A. Asset Liability Management
    B. Asset Liability Maturity
    C. Asset Liability Mismatch
    D. Asset Liability Manpower
    E. Asset Liability Maintenance

19.    Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are terms most closely related to which of the following industries/ markets?
    A. Capital Market    

B. Banking industry
    C. Commodities market
    D. Money Market        

 E. Mutual funds

20.    What is the maximum period for which domestic term deposits are normally accepted by the banks in our country?
    A. 3 yr  

B. 5 yr  

C. 7 yr 

D. 10 yr  

E.12 yr

21.    If you wish to purchase some US Dollars for your travel abroad, you should approach?
    A. The Ministry of Finance
    B. The US Embassy
    C. Any Bank Branch authorized to do such activity
    D. The Reserve Bank of India
    E. External Affairs Ministry

22.    What does the letter 'L' stands for in the term LAF commonly used in financial/economic news?
    A. Liquidity      

B. Least      

C. Liabilities
    D. Long    

 E. Liquid

23.    Which of the following is not classified as a Commercial Bank?
    A. Public Sector Bank
    B. Foreign Bank   

C. Private Sector Bank
    D. Regional Rural Bank
    E. Urban Cooperative Bank

24.    Which of the following is not the name of the a Banking Organization?
    A. HDFC    

B. IDBI          

C. YES
    D. SEBI     

E. ICICI

25.    Money laundering means
    A. Concealment of income source mainly to avoid income tax
    B. Money acquired from undisclosed sources and deposited in foreign banks
    C. Money acquired from undisclosed sources and deposited in foreign banks
    D. Process of conversion of money obtained illegally to appear to have originated from legitimate sources to convert black money into white money
    E. Money acquired from drug trafficking

26.    Monetary Policy as an arm of the economic policy is administered by
    A. Government of India            

B. RBI
    C. SBI    

D. Govt of the respective states
    E. None

27.    Which of the following is not a primary function of a Bank?
    A. Granting loans
    B. Collecting cheques/ drafts of Customers
    C. Arranging VISA for students for abroad education   

D. Issuing bank drafts
    E. Selling Gold/Silver Coins.

28.    Reserves that can act as a liquidity buffer for Commercial Banks during crisis times are
    A. CAR       

B. CRR       

C. CAR & CRR
    D. CRR & SLR     

E. SLR

29.    The Capital Market of Indian financial system deals with which of the following funds?
    A.  Hedge funds      

B.  Short-term funds
    C.  Long-term Funds
    D.  Government Funds  

E. None of these

30.    Which of the below acts as the principle regulator in the capital market in India?    
    A.  IRDA     

B.  RBI            

C.  SIDBI
    D.  SEBI    

E. None of these

31.    The security which is a claim on the government and is a secure financial instrument guarantees certainty of both capital and interest is called?    
    A.  Gilt-Edged Security     
    B.  Call Money      

C.  Treasury Bills     
    D.  Certificate of Deposits
    E. None of these

32.    Banks generally borrow funds from which of the following money markets to meet the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements as stipulated by the Central bank?    
    A.  Notice Money Market     
    B.  Call Money Market    
    C.  Bill Market         

D.  Money Market
    E. None of these

33.    Which one of the following agency is a creditor's rating agency?    
    A.  ICRA     

B.  CARE    

C.  CRISIL     
    D.  All of the Above     

E. None of these

34.    Which of the following bank acts as a government banker?   
    A.  State Bank of India     
    B.  All Public Sector Banks    
    C.  Co-operative Banks     
    D.  Scheduled Banks     

E. None of these

35.    Reserve Bank of India was setup on the recommendations of which of the following commission/committee?    
    A.  Royal Commission     
    B.  Hilton Young Commission    
    C.  Dantwala Committee     
    D.  D R Mehta Commission
    E. None of these

36.    The Central bank of India, RBI, reviews the monetary policy for every   
    A.  Three Months     

B.  Six Months    
    C.  Nine Months       

D.  Twelve Months
    E. None of these

37.    The Deposit insurance facility provided by the DICGC is not available for which of the following    
    A.  LIC            

B.  GIC           

C.  SIDBI     
    D.  NBFCs       

E. None of these

38.    Which of the following is a Develop- ment Bank in India?  
    A.  IFCI      

B.  IDBI    

C.  NHB     
    D.  All of the Above
    E. None of these

39.    The bank which refinances the loans given to the poor and weaker sections to construct or buy houses is    
    A.  SIDBI     

B.  IDBI       

C.  NHB     
    D.  IIBI    

E. None of these

40.    ACH is a nationwide automated electronic system that monitors and administers the process of check and fund clearance between banks. Expand ACH.  
    A.  Automatic Check Clearing House     
    B.  Automated Check House    
    C.  Automated Clearing House     
    D.  Automatic Clearing House
    E. None of these
 

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

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

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

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