BANKING AWARENESS PRACTICE QUESTIONS

1. RBI’s open market operation transactions are carried out with a view to regulate ____
(A) Liquidity in the economy
(B) Prices of essential commodities
(C) Inflation
(D) Borrowing power of the banks
(E) All the above

Ans (E) 

2. Open market operations , one of the measures taken by RBI in order to control credit expansion in the economy me
Ans ____
(A) Sale or purchase of Govt. securities
(B) Issuance of different types of bonds
(C) Auction of gold
(D) To make available direct finance to borrowers
(E) None of these

Ans (A)

3. The bank rate me
Ans ___
(A) Rate of interest charged by commercial banks from borrowers
(B) Rate of interest at which commercial banks discounted bills of their borrowers
(C) Rate of interest allowed by commercial banks on their deposits
(D) Rate at which RBI purchases or rediscounts bills of exchange of commercial banks
(E) None of these

Ans (D)

4. What is an Indian Depository Receipt?
(A) A deposit account with a Public Sector Bank
(B) A deposit account with any of depositories in India
(C) An instrument in the form of depository receipt created by an Indian depository against
underlying equity shares of the issuing company
(D) An instrument in the form of deposit receipt issued by an Indian depositories
(E) None of these

Ans (C)

5. Fiscal deficit is ____
(A) total income less Govt. borrowing
(B) total payments less total receipts
(C) total payments less capital receipts
(D) total expenditure less total receipts excluding borrowing
(E) None of these

Ans (D)

6. In the capital market , the term arbitrage is used with reference to ____
(A) purchase of securities to cover the sale
(B) sale of securities to reduce the loss on purchase
(C) simultaneous purchase and sale of securities to make profits from price
(D) variation in different markets
(E) Any of the above

Ans (C)

7. The stance of RBI monetary policy is _____
(A) inflation control with adequate liquidity for growth
(B) improving credit quality of the Banks
(C) strengthening credit delivery mechanism
(D) supporting investment demand in the economy
(E) Any of the above

Ans (E)

8. Currency Swap is an instrument to manage ___
(A) currency risk
(B) interest rate risk
(C) currency and interest rate risk
(D) cash flows in different currency
(E) All of the above

Ans (D)

9. "Sub-prime" refers to_______
(A) lending done by banks at rates below PLR
(B) funds raised by the banks at sub - Libor Rates
(C) Group of banks which are not rate as prime banks as per Banker's Almanac
(D) lending done by financing institutions including banks to customers not not meeting with
normally required credit appraisal standards
(E) All of the above

Ans (D)

10. Euro Bond is an instrument _____
(A) issued in the European market
(B) issued in Euro currency
(C) issued in a country other than the country of the currency of the Bond
(D) All of the above
(E) None of these

Ans (C)

11. Money laundering normally involves _____
(A) placement of funds
(B) layering of funds
(C) integrating of funds
(D) All of (A), (B) & (C)
(E) None of (A), (B) & (C)

Ans (D)

12. The IMF and the World Bank were conceived as institutions to ____
(A) strengthening international economic co-operation and to help create a more stable and
prosperous global economy
(B) IMF promotes international monetary cooperation
(C) The World Bank promotes long term economic development and poverty reduction
(D) All of (A),(B) & (C)
(E) None of (A),(B) & (C)

Ans (D)

13. Capital Market Regulator is _____
(A) RBI
(B) IRDA
(C) NSE
(D) BSE
(E) SEBI

Ans (e)

14. In the term BRICS , R stands for ______
(A) Romania
(B) Rajithan
(C) Russia
(D) Regulation
(E) Npne of these

Ans (C)

15. FDI refers to _____
(A) Fixed Deposit Interest
(B) Fixed Deposit Investment
(C) Foreign Direct Investment
(D) Future Derivative Investment
(E) None of these

Ans (C)

16. Which is the fist Indian company to be listed in NASDAQ?
(A) Reliance
(B) TCS
(C) HCL
(D) Infosys
(E) None of these

Ans (D)

17. Which of the following is the Regulator of the credit rating agencies in India?
(A) RBI
(B) SBI
(C) SIDBI
(D) SEBI
(E) None of these

Ans (D)

18. Who is Brand Endorsing Personality of Bank of Baroda?
(A) Juhi Chawala
(B) Kiran Bedi
(C) Amitabh Bachchan
(D) Kapil Dev
(E) None of these

Ans (E)

19. The Branding Line of Bank of Baroda is ____
(A) International Bank of India
(B) India's International Bank
(C) India's Multinational Bank
(D) World's Local Bank
(E) None of these

Ans (B)

20. The logo of Bank of Baroda is known as ___
(A) Sun of Bank of Baroda
(B) Baroda Sun
(C) Bank of Baroda's Rays
(D) Sunlight of Bank of Baroda
(E) None of these

Ans (B)

21. One of the major challenges banking industries is facing these days is money laundering. Which of the following acts/ norms are launched by the banks by the banks to prevent money laundering in general ?
(A) Know your customer norms
(B) Banking Regulation Act
(C) Negotiable Instrument Act
(D) Narcotics and Psychotropic Substance Act
(E) None of these

Ans (E)

22. Lot of Banks in India these days are offering M-Banking Facility to their customers . What is the full form of 'M' in 'M-Banking'?
(A) Money
(B) Marginal
(C) Message
(D) Mutual Fund
(E) Mobile Phone

Ans (E)

23. Which of the following is/are true about the "Sub-Prime Crisis" ? (The term was very much in news recently.)
(1) It is a Mortage Crisis referring to Credit default by the borrowers
(2) Sub-Prime borrowers were those borrowers who were rated low and were high risk borrowers
(3) This crisis originated of negligence in credit rating of the borrowers
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1,2 & 3
(E) None of these

Ans (D)

24. Which of the following is NOT the part of the structure of the financial System in India ?
(A) Industrial Finance
(B) Agricultural Finance
(C) Government Finance
(D) Development Finance
(E) Personal Finance

Ans (E)

25. Which of the following is NOT the part of the Scheduled Banking structure in India ?
(A) Money Lenders
(B) Public Sector Banks
(C) Private Sector Banks
(D) Regional Rural Banks
(E) State Co-operative Banks

Ans (A)

26. As we all know Govt. of India collects tax revenue on various activities in the country. Which of the following is a part of the tax revenue of the Govt. ?
(1) Tax on Income
(2) Tax on Expenditure
(3) Tax on property or Capital Asset
(4) Tax on Goods and Services
(A) Both 1 and 3 only
(B) Both 2 and 4 only
(C) All 1,2,3 & 4
(D) Only 2,3 and 4
(E) None of these

Ans (C)

27. We very frequently read about Special Economic Zones (SEZs) in newspapers. These SEZs were established with which of the following objectives ?
(1) To attract foreign investment directly
(2) To protect domestic market from direct competition from multinationals
(3) To provide more capital to agriculture and allied activities
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1,2 & 3
(E) None of these

Ans (A)

28. Which of the following groups of the countries has almost 50% share in Global emission of carbon every year ?
(A) US, China, India, South Africa
(B) India, china, Russia , Britain
(C) South Africa, Nepal , Myanmar
(D) US, Russia, China & India
(E) None of these

Ans (D)

29. Many times we read about Future Trading in newspapers. What is Future Trading ?
(1) It is nothing but a trade between any two stock exchanges where in it is decided to purchase the stocks of each other on a fixed price throughout the year
(2) It is an agreement between two parties to buy and sell an underlying asset in the future at a predetermined price

(3) It is agreement between Stock Exchanges that they will not trade the stocks of each other under any circumstances in future or for a given period of time
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1,2 & 3
(E) None of these

Ans (B)

30. Hillary Clinton formally suspended her campaign to ensure election of who amongst the following for the next President of USA?
(A) George Bush
(B) Barack Obama
(C) John McCain
(D) Boll Clinton
(E) None of these

Ans (B)

31. Hugo Chavez whose name was recently in news is the _____
(A) President of Cango
(B) Prime Minister of Uganda
(C) President of Venezuela
(D) Prime Minister of Brazil
(E) None of these

Ans (C)

32. The Govt. of India has raised the amount of the loan Waiver to the farmers by 20%. Now the amount is nearly _____
(A) Rs. 60,000 crores
(B) Rs. 65,000 crores
(C) Rs. 72,000 crores
(D) Rs. 76,000 crores
(E) Rs. 80,000 crores

Ans (A)

33. Delimitation Commission has made a recommendation the next Census should be Panchayat-wise. When is the next Census due ?
(A) 2010
(B) 2011
(C) 2012
(D) 2013
(E) 2015

Ans (B)

34. The world Health Organization has urged that advertisements of which of the following should be banned to protect youth from bad effects of the same ?
(A) Tobacco
(B) Alcoholic drinks
(C) Junk Food
(D) Soft drinks with chemical preservatives
(E) None of these

Ans (A)

35. Which of the following countries has allocated a huge amount of US $ 10 billion to provide relief to its earthquake victims ?
(A) Japan
(B) South Korea
(C) China
(D) South Africa
(E) None of these

Ans (C)

36. Which of the foloowing names is NOT closely associated with space Programme of India or any other country ?
(A) CARTOSAT
(B) NLS-5
(C) RUBIN-8
(D) GSLV
(E) SCOPE

Ans (E)

37. Vijay Hazare Trophy is associated with game of _____
(A) Hockey
(B) Cricket
(C) Badminton
(D) Football
(E) Golf

Ans (B)

38. Which of the following was theme of the Olympic Torch ?
(A) Journey of Harmony
(B) Green World Clean World
(C) Journey of Peace
(D) Jouney of Hunger-free World
(E) None of these

Ans (A)

39. Which of the following schemes is NOT a social development Scheme ?
(A) Indira Awas Yojana
(B) Mid Day Meal
(C) Bharat Nirman Yojana
(D) Sarva Siksha Abhiyan
(E) All are Social Schemes

Ans (C)

40. Which of the following is NOT a member of ASEAN ?
(A) Maleysia
(B) Indonesia
(C) Vietnam
(D) Britain
(E) Singapore

Ans (D)

41. Which of the following awards are given for the excellence in the field of Sports ?
(A) Kalinga Prize
(B) Shanti Swarup Bhatnagar Award
(C) Arjun Award
(D) Pulitzer Award
(E) None of these

Ans (C)

42. Inflation in India is measured on which of the following indexes/indicators ?
(A) Cost of Living Index (COLI)
(B) Consumer Price Index (CPI)
(C) Gross Domestic Product (GDP)
(D) Wholesale Price Index (WPI)
(E) None of these

Ans (D)

51. As a policy to boost the agricultural sector in the country, the Govt. of India has taken several special measures over the years. Which of the following cannot be considered a measure/ measures which will have a direct impact(s) on the agricultural sector ?
1. Setting up of a National Food Processing Bank.
2. Opening irrigation, sanitation and water projects for development under public private participation.
3. Efforts to bring down fiscal deficit to 5.5 per cent level of GDP.
(A) Only 1
(B) Only 2
(C) Only 3
(D) Only 1 and 2
(E) All 1, 2 and 3

Ans : (C) 

52. The Govt. of India is plannning to bring a Second Green Revolution. This will be launched specifically for which of the following parts of the country ?
(A) North East and Eastern Regions
(B) Central India
(C) Jammu & Kashmir
(D) Tamil Nadu, Kerala and Andhra Pradesh
(E) None of these

Ans : (A)

3. As we all know, the limit of exemption on personal income tax has been raised by Rs. 10,000. Whenever a relief in direct taxes is given, the underlying motive is always to make money available for which of the following purposes ?
1. Savings
2. Investment for High returns
3. Personal Consumption
(A) Only 1
(B) Only 2
(C) Only 1 and 3
(D) Only 2 and 3
(E) None of these

Ans : (C)

54. As we know, a special scheme ‘One Village One Project’ is in vogue in some parts of our country and has proved a good incentive to boost the rural economy and the agricultural sector. Now the Govt. has decided to develop 60,000 villages to produce which of the following single crops as a major crop ?
(A) Pulses or Oilseeds
(B) Wheat or Bajra
(C) Sugar or Jute
(D) Sunflower or Rose flower
(E) None of these

Ans : (A)

5. The Govt. of India has decided to bring down the fiscal deficit from 6.6 per cent to the level of 5.5 per cent of the GDP so that it can meet growth targets well in time. This target of 5.5 per cent is to be achieved by the end of—
(A) January 2011
(B) March 2011
(C) December 2010
(D) January 2012
(E) None of these

Ans : (D)

56. Some economists and financial experts are of the opinion that the Finance Minister of India has done a good job by allocating a fairly good share of budget to ensure that the benefits of the growth also reach the poor and unorganized sectors of the society. What amount in terms of percentage has been allocated to various schemes of the social sector in the Union Budget 2010-11 ?
(A) 5%
(B) 7.5%
(C) 10%
(D) 12.5%
(E) None of these

Ans : (E)

57. Many people talk about the roll back of stimulus packages provided last year by the Govt. of India to help certain sectors. If these stimulus packages are rolled back, this would mean that—
1. those who have availed these benefits would be required to return them to the Govt. of India.
2. no such incentive would be available henceforth to these sectors.
3. all such benefits/incentives would be available to all the people across the country and will not be
restricted to some selected few.
(A) Only 1
(B) Only 2
(C) Only 3
(D) Only 1 and 3
(E) Only 2 and 3

Ans : (C)

58. In order to develop infrastructure in the country at a faster pace, the Govt. of India has
fixed some targets. In order to achieve this target, at present, how many kilometers of
highway is required to be constructed per day ?
(A) 5 km
(B) 10 km
(C) 15 km
(D) 20 km
(E) None of these

Ans : (D)

59. “South India will get K-G gas by 2012” was the news in a major financial newspaper. ‘K-G’ is the abbreviated name of which of the following ?
(A) Karnataka-Goa
(B) Kaveri-Ganga
(C) Krishna-Godavari
(D) Karnataka-Gulf
(E) None of these

Ans : (C)

60. Many a times, we read in newspapers that some big banks have revised their lending rates to make them dearer or cheaper. Though the decision to raise the lending rates is always in the hands of the banks normally they announce this decision of theirs—
1. immediately after the Union Budget is presented in the Lok Sabha every year.
2. when the RBI makes changes in its policy rates.
3. when the Monetary and Credit Policy of the RBI is reviewed periodically.
(A) Only 1
(B) Only 2
(C) Only 3
(D) Only 2 and 3
(E) All 1, 2 and 3

Ans : (C)

61. How much amount in cash is the Govt. of India planning to infuse in public sector banks, to strengthen their capital base this year ?
(A) Rs. 10,000 crore
(B) Rs. 12,500 crore
(C) Rs. 14,000 crore
(D) Rs. 16,500 crore
(E) None of these

Ans : (E)

62. As we all know, the rate of MAT has been increased from the present 15% to 18% with
effect from April 2010. What is the full form of MAT ?
(A) Maximum Alternate Tax
(B) Minimum Alternate Tax
(C) Minimum Affordable Tax
(D) Maximum Affordable Tax
(E) None of these

Ans : (B)

63. One of the headlines in a major financial newspaper recently was “Is Spain the next Greece or Italy or Portugal ?” What is the actual meaning of this headline because of which the author has been comparing Spain with the other three countries ?
(A) All these three countries have abandoned the membership of the European Union. Spain is also planning to do so
(B) All these three countries were the first to come out of recent global recession and that too within a short span of time. Spain is next in queue to declare itself free from the trouble
(C) These three nations are badly trapped in a situation where their economy is proceeding from bad to worse condition. Spain also appears to be in the same situation
(D) Greece, Itlay and Portugal have signed some special agreements with US and are availing stimulus packages to promote their exports to US on some specific terms. Spain is also willing to do the same
(E) None of these

Ans : (C)

64. Many times we read in newspapers that several companies are adopting the FCCBs route to raise capital. What is the full form of FCCBs ?
(A) Foreign Currency Convertible Bonds
(B) Foreign Convertible Credit Bonds
(C) Financial Consortium and Credit Bureau
(D) Future Credit and Currency Bureau
(E) None of these

Ans : (A)

65. The Govt. of India has asked all big companies and corporates to create a separate fund
for their ‘Corporate Social Responsibility Activities’. What is/are the purpose(s) of this
directive issued by the Govt. ?
1. To ensure that companies spend some money on social activities.
2. To bring tr
Ansparency in matters of financial tr
Ansactions and dealings by corporates.
3. To ensure that corporate entities do not get involved in non commercial activities in the name of social activities as they are required to spend money only on the welfare of the employees and their families.
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1, 2 and 3
(E) None of these

Ans : (B)

66. Which of the following is an innovative mechanism adopted by banks to meet the targets fixed for lending to priority sector by the Banks ?
(A) Buying & Selling of Priority Sector Lending Certification
(B) Sale of Kisan Vikas Patra
(C) Inter Bank Participation Certificates
(D) Adoption of Core Banking Solution
(E) None of these

Ans : (C)

67. The Reserve Bank of India (RBI) recently announced a hike in some policy rates and also indicated that there may be another change in near future. Which of the following is/are considered a policy rate(s) in the hands of the RBI ?
1. Repo Rate
2. SLR
3. Inflation
(A) Only 1
(B) Only 2
(C) Only 3
(D) Only 1 and 2
(E) All 1, 2 and 3

Ans : (D)

68. Zain, which was in news recently, is a company based in which of the following nations ?
(A) Kuwait
(B) South Africa
(C) UAE
(D) China
(E) None of these

Ans : (A)

69. Who amongst the following was awarded the prestigious ‘Moortidevi Award’ recently for his literary works ? (Awardee is a Minister in the Union Cabinet)
(A) Veerappa Moily
(B) Pranab Mukherjee
(C) P. Chidambaram
(D) Kapil Sibal
(E) None of these

Ans : (A)

70. The Indian Ministry of Agriculture has decided that despite good stocks of wheat and rice, India will not export the excess stocks. Which of the following may be the reason(s) owing to which the Ministry has taken this decision ?
1. Indian wheat and rice are not in much demand in foreign countries. Hence, very few are takers for the same.
2. The National Food Security Bill has a provision to provide 25 kg of wheat or rice to the families living below poverty line. A huge stock of grains will be needed for the same in near future.
3. Since most countries are still to recover from the global recession, a formula is being worked out where imports and exports will be compensated simply by exchange of commodities available with the countries. India is planning to use its food grain stocks for the same.
(A) Only 1
(B) Only 2
(C) Only 3
(D) All 1, 2 and 3
(E) None of these

Ans : (B)

71. As per the reports published in various newspapers, RBI has asked banks to make a plan to provide banking services to all villages having a population of 2000. This directive issued by the RBI will fall in which of the following categories ?
(A) Plan for Financial Inclusion
(B) Efforts to meet the targets of Priority Sector Lending
(C) Extension of Relief Packages to the Farmers
(D) Extensions of Internal and Branchless Banking
(E) None of these

Ans : (A)

72. Which of the following is not a bank or finance company ?
(A) Barclays
(B) BNP Paribas
(C) Lufth
Ansa
(D) HSBC
(E) All are banks/finance companies

Ans : (C)

73. The Indian Railways is in the process of purchasing Bullet Train Technology from which of the following nations ?
(A) France
(B) China
(C) Japan
(D) Russia
(E) Spain

Ans : (C)

74. Some State Govts. have started a project ‘Save Snow Leopards’. Snow Leopards are found mainly in—
(A) Jammu & Kashmir
(B) Rajasthan
(C) Kerala
(D) Punjab
(E) Tamil Nadu

Ans : (A)

75. India recently signed an agreement for an ‘Action Plan to Advance Security Cooperation’ with which of the following nations ?
(A) China
(B) Bangladesh
(C) Pakistan
(D) Nepal
(E) Japan

Ans : (E)

76. Sanya Richards who was named as the IAAF World Athlete of 2009 represents which of the following countries ?
(A) Jamaica
(B) Kenya
(C) France
(D) Britain
(E) USA

Ans : (E)

77. Who amongst the following was adjudged the European Footballer of the year 2009 ?
(A) Roberto Baggio
(B) Edger Davids
(C) Xavi Hamandez
(D) Cristiano Ronaldo
(E) Lionel Messi

Ans : (E)

78. The latest nuclear power reactor of India recently attained criticality at Rawatbhata. Rawatbhata is a place in—
(A) Uttar Pradesh
(B) Madhya Pradesh
(C) Uttarakhand
(D) Orissa
(E) Rajasthan

Ans : (E)

79. Who amongst the following has recently received the Highest Civilian Honour of France ?
(A) Kareena Kappor
(B) A. R. Rahman
(C) Javed Akhtar
(D) Lata Mangeshkar
(E) None of these

Ans : (D)

80. Who amongst the following represented India at the 15th United Nations Climate Change Conference 2009 held in Copenhagen ?
(A) Smt. Sonia Gandhi
(B) Smt. Pratibha Patil
(C) Dr. Manmohan Singh
(D) Smt. Meira Kumar
(E) None of these

Ans : (C)

81. Three Indian sportsmen, C. Raju Srither, I.R. Sanam and Ratan Singh recently went to Indonesia and won Gold Medals in one of the events. All three are associated with which of the following sports ?
(A) Weightlifting
(B) Rifle Shooting
(C) Swimming
(D) Golf
(E) Archery

Ans : (E)

82. A two-day meeting of the South Asian Association for Regional Cooperation (SAARC) was organized recently in—
(A) Thimpu
(B) Islamabad
(C) Kabul
(D) Dhaka
(E) New Delhi

Ans : (A)

83. By nominating its Ambassador to which of the following countries after a gap of five years has the USA established its diplomatic relation with it ?
(A) Syria
(B) Iran
(C) Iraq
(D) China
(E) None of these

Ans : (A)

84. Which of the following organizations/ agencies is providing a US $ 850 million loan to India for the development of its infrastructure and Khadi industry ?
(A) World Bank
(B) European Union Finance Corporation
(C) Asian Development Bank
(D) Govt. of South Africa
(E) None of these

Ans : (C)

86. The census in India is done after a gap of every—
(A) 5 years
(B) 10 years
(C) 12 years
(D) 15 years
(E) None of these

Ans : (B)

87. Pankaj Advani won which of the following titles in the year 2009 ?
(A) Asian Games Gold Medal
(B) Asian Billiards Championship
(C) WSA Challenge Tour
(D) World Professional Billiards Championship
(E) None of these

Ans : (D)

88. Which of the following awards is given for Excellence in the field of sports ?
(A) Kalinga Award
(B) Golden Pen Award
(C) Arjuna Award
(D) Bharat Ratna
(E) None of these

Ans : (C)

89. Which of the following states started ‘April Mandis’ project in all districts of the state to ensure the supply of vegetables and fruits at fair prices ?
(A) Gujarat
(B) Uttar Pradesh
(C) Haryana
(D) Delhi
(E) None of these

Ans : (C)

90. Which of the following terms is not used in Economics ?
(A) Balanace of Trade
(B) Centrifugal force
(C) Break even
(D) Fiscal Deficit
(E) Capital Account

Ans : (B)

91. The Indira Gandhi Peace Prize 2009 was given to the President of—
(A) Fiji
(B) Bhutan
(C) Nepal
(D) Bangladesh
(E) None of these

Ans : (D)

92. The Govt. of India recently launched the Jawaharlal Nehru National Solar Mission. This mission is one of the key missions on India’s National Action Plan on—
(A) Second Green Revolution
(B) Climate Change
(C) Recharging of Water bodies
(D) Electricity to all
(E) None of these

Ans : (B)

93. Voting in local bodies elections is compulsory in which one of the following states ?
(A) Delhi
(B) Maharashtra
(C) Kerala
(D) Gujarat
(E) None of these

Ans : (D)

94. India’s exports of which of the following to USA has been growing at a fast pace despite the global slowdown and recession ?
(A) Handicrafts and Carpets
(B) Textiles and Clothing
(C) Horticultural products
(D) Foodgrains
(E) Services

Ans : (E)

95. Russia recently agreed to resume import of natural gas from which of the following countries after a gap of about a month following a dispute over prices of the same ?
(A) Iran
(B) Turkmenistan
(C) China
(D) Kazakhstan
(E) N. Korea

Ans : (B)

96. India recently signed an agreement for cooperation in the field of nuclear power for civil purposes. This agreement is free from any restrictions on India. India signed this agreement with—
(A) France
(B) Germany
(C) USA
(D) Canada
(E) Russia

Ans : (E)

97. ‘Between the Assassinations’ is a book written by—
(A) Chetan Bhagat
(B) Kiran Desai
(C) Shobha De
(D) Vikram Seth
(E) Arvind Adiga

Ans : (E)

8. Which of the following prizes/ awards is not given for Excellence in the field of Literature ?
(A) Dronacharya Award
(B) Aga Khan Prize for Fiction
(C) Commonwealth Award
(D) Nobel Prize
(E) Man Booker Prize

Ans : (A)

99. Which of the following terms is not used in the game of Hockey ?
(A) Centre
(B) Downswing
(C) Drop pass
(D) Goal line
(E) Blue line

Ans : (B)

100. ‘Invisible’ is a novel written by—
(A) Vikram Seth
(B) Chetan Bhagat
(C) Anita Desai
(D) Meghnad Desai
(E) Paul Auster

Ans : (E)

BANKING AWARENESS PRACTICE MCQs

1. Which of the following statements is true?
a) The licence to open branches of bank is granted by Board of Directors of that Bank
b) There is no need of licenses to open branch of a bank
c) A licence to open a branch is issued by the Central Government
d) A licence to open a branch is issued by the Reserve Bank of India under the provisions of Banking Regulation Act, 1949

2. The important condition for granting licence of banking companies is?
a) Banking company need not plan to pay for future depositors
b) Banking company can plan for its capital structure once the licence is granted
c) The business undertaken by the banking company should not frustrate the interest of public
d) The banking company can undertake business other than banking with the permission of annual general body

3. Who of the following is not a party to the IPO?
a) Registrar of Issue
b) Investment Banker
c) Advertisement Agency
d) Registrar of Companies

4. Which of the following is not shown as an asset in the balance sheet of a Bank?
a) Investments
b) Advances
c) Cash Balances with other banks
d) Borrowings

5. The credit policy of a bank does not consists of?
a) Lending policies
b) Quality control
c) Loan product mix
d) Advertising of loan products

6. Which of the following is a function of the agent bank relating to flow of money in the process of loan syndication?
a) Receiving notices relating to cancellation of any part of the loan
b) Calling of loans in the event of default
c) Receiving the fee from the borrower and distributing among the participating banks
d) Receiving notices relating to transfers of banks


7. Which of the following is the parameter to recognize the SSI unit as sick unit?
a) The erosion in the net-worth due to accumulated losses is up to 25% of its net worth during the previous account year
b) The erosion in the net-worth due to accumulated losses is up to 50% of its net worth during the previous account year.
c) The unit should have been in commercial production for at least five years
d) Lack of updations in technological development

8. Which of the following is not the service provided by the Small Industries Service Institute?
a) Providing entrepreneurship development programs
b) Developmental efforts
c) Export promotion and liaison activities
d) Financial support

9. Service Area Approach (SAA) is associated with?
a) Rural and Semi-urban branches of commercial banks
b) Urban branches of commercial banks
c) Branches of commercial banks situated in metro cities
d) Development banks

10. Which of the following cannot be securitized?
a) Future rentals of a fishing boat
b) Hire purchase receivables
c) Demand drafts received by the banker during clearing
d) Future billings for an airline

11. Which of the following statements is true?
a) The special purpose vehicle (SPV) purchases the assets from the borrower directly during the securitization
b) The originator and obligor are the same persons in securitization process
c) Administrator collects the payments due from the obligor and passes it to the SPV and follows with defaulters
d) Mortgage based securitization provides high yields to the investor

12. The important feature of an anticipatory letter of credit is that?
a) The letter of credit can be used as back- to- back letters of credit
b) The beneficiary under the letter of credit may receive payment even at the pre-shipment stage
c) The beneficiary under the letter of credit may receive payment even at the post-shipment stage
d) The cash advance is not permitted against such letter of credits

13. The Shipping guarantee is a?
a) Type of a letter of credit
b) Guarantee issued by the ship captain to the purchaser
c) Guarantee issued to the borrower towards the loan granted by the shipping company
d) Deferred payment guarantee issued by a banker at the request of the consignee when the documents are not received and goods are received, for facilitating the delivery of goods.

14. Which of the following statements is true?
a) The charge card is a credit instrument
b) Under this facility the cardholders need to pay amount within ten installments
c) Cardholder has to pay the 100% of the purchase amount within 30 days of purchase
d) The charge card shall have revolving credit

15. Which of the following is not augmented feature of a credit card?
a) Personal accident insurance
b) Cash withdrawals
c) Add-on facility
d) Issue of deferred guarantee

16. Which of the following is the disadvantage of going for public issue?
a) Liquidity to existing shares
b) Increase in visibility and reputation to the company
c) Better pricing and placement with new investors
d) Need to make continuous disclosures

17. Which of the following is not a criterion to select the Investment Bankers?
a) No professional memberships or incorporations are required
b) General reputation in the market
c) Good rapport with market intermediaries
d) Distribution net work of the organization

18. Which of the following is not an asset of a bank?
a) Notes and small coins
b) Overdue recurring deposits
c) Short term loans
d) Staff advances

19. The banking company has restriction to sanction loan to?
a) Directors of the bank
b) Staff working in the bank
c) Students going abroad
d) Professionals

20. Which of the following is a non-depository institution?
a) Credit unions
b) Commercial banks
c) Mutual funds
d) Regional rural banks

21. The disadvantage associated with leasing company is?
a) Low costs
b) Flexibility in payments
c) Eliminates the risk of obsolescence
d) High competitions because of entry to all financial institutions

22. Which of the following theory is associated with the financial system in the economic growth?
a) Retributive theory
b) Reformative theory
c) Financial repression theory
d) Jurisdictional theory

23.Which of the following is not a financial intermediary in the financial markets?
a) Pension funds
b) Credit unions
c) Life insurance companies
d) Small scale service institute.

24 Which of the following is not a function of a commercial bank?
a) Registration of charges and mortgages
b) Transactions services
c) Asset transaction
d) Real-time Gross Settlement

25. Which of the following is one of the three pillars of new Basel Capital Award?
a) Market competitions
b) Market rapport
c) Market discipline
d) International market relations

26. The interest in savings bank accounts of a bank is calculated on?
a) Minimum amount of balance that is maintained in the account in between 10th and the last day of month
b) Maximum amount of balance that is maintained in the account in between 10th and the last of month
c) Minimum amount of balance that is maintained in the account in between 1st and the last day of month
d) Maximum amount of balance that is maintained in the account in between 1st and the last of month

27. The credit policy of a bank does not deal with?
a) Credit risk management
b) Documentation standards
c) Review and renewal of advances
d) Outstanding balances in deposit accounts

28. Issuing credit cards is a component of ?
a) Corporate banking
b) Rural banking
c) Retail banking
d) Micro finance

29. The origin of bank instruments can be traced to?
a) The priests and worship places of public deposits
b) Goldsmith receipts
c) Bonds issued by the British Government in India
d) Bank notes issued by Bank of Venice

30. Which of the following is not the function of commercial banks?
a) Providing transaction services
b) Intermediation in financial services
c) Providing transformation services
d) Regulating the issue of bank notes.

31 Which of the following is the most important challenge before the commercial bank?
a) Maintenance of foreign currency
b) Evaluating the need of the customers
c) Maintenance of SLR and CRR
d) Meet the technological revolution

32. The asset's side of balance sheet consists of ?
a) Cash balances with other banks
b) Fixed deposits of customers
c) Savings deposits
d) Recurring deposits

33. Which of the following is an income for a bank?
a) Depreciation on bank's property
b) Interest on inter bank borrowings
c) Profit on revaluation of investments
d) Provisions made on account of write-offs

34. Saving Bank Account can be opened in the name of ?
a) State text book printing corporations
b) District level housing cooperative societies
c) Communist Party of India
d) Aravind Samuel, Anurag Deepak and Amarish Sugandhi Jointly

35. The interest on recurring deposit is paid on the basis of ?
a) Simple interest calculated monthly basis
b) Simple interest on monthly products basis
c) Quarterly compounding
d) Interest calculated on daily products basis

36. Which of the following statements is true?
i. Term deposits are non-transaction deposits
ii. Cheques can be issued on short-term deposits
iii. All term deposits are interest bearing deposits
a) (i) only
b) (ii) only
c) (iii) only
d) (i) and (iii)

37. The credit policy laid down by the top management of a bank does not deal with?
a) Credit risk management
b) Pricing of the credit products
c) Appraisal of time and demand deposits
d) Documentation standards.

38. Which of the following factors is not required to be considered to analyze the repayment capacity of a borrower?
a) Working capital management
b) Personal educational qualifications
c) Financial leverage
d) Interest rate risk management

39. Which of the following is a facilitating service of core loan products of retail banking services?
a) Current or savings accounts
b) Legal services for documentation
c) Delivery of loan at promised time period
d) Flexibility in prepayment of loan

40. Which of the following is an most important advantage of retail banking on the resource side?
a) Consumer loans are low risk products
b) Innovative product development and disbursal
c) Increases the subsidiary business of a bank
d) Requires less efforts to market retail loan products

41. Lenders may not provide trade-offs to the borrowers on the basic term of consumer installment credit relating to?
a) Interest rate
b) Maturity of the loan
c) Maturity of the deposit
d) Quantum of finance

42. Which of the following is the risk associated with the retail banking?
a) Strong recovery strategy
b) Definite lending limits
c) Effective credit process and proposals
d) Inadequate risk pricing

43 The advantage of consortium finance is?
i. Speedy transactions and individual approach
ii. Involvement of huge amounts
iii. Use of expertise of all the banks
a) (i) only
b) (ii) only
c) (iii) only
d) (i), (ii) and (iii)

44 Which of the following is not a function of the agent bank in loan syndication?
a) Ensuring the compliance of conditions precedent under the loan agreement
b) Determining the LIBOR interest rate for each interest rate
c) Planning for future syndication of loans
d) Receiving notices relating to cancellation of any part of the loan

45. Which of the following is not a phase/step in the formation of loan syndication?
a) Finalization of supply agreement
b) Identify the needs of the borrower
c) Preparation of information memorandum
d) Invite other banks to participate

46. Which of the following statements is true?
a) SSI is an undertaking in which the investments in fixed assets in plant and machinery does not exceed one million
b) Small and medium enterprises both in size and shape are not homogenous in nature
c) The small and medium enterprises contribution towards the GDP is nominal
d) Small and medium enterprises do not support the large industries.

47. The Nayak Committee has suggested the turnover method for assessing the working capital and pegged it at?
a) 15% of the projected annual turnover, as working capital limit
b) 20% of the projected annual turnover, as working capital limit
c) 25% of the projected annual turnover, as working capital limit
d) 30% of the projected annual turnover, as working capital limit

48. Which of the following is not a part of the rehabilitation package granted for revival of sick industry?
a) Waiver of penal interests
b) Funding by sanctioning of term loans towards the unpaid installments of loans
c) Grant of additional working capital loans
d) Not demanding the promoters contribution towards the rehabilitation package

49. Service Area Approach is associated with?
a) Industrial finance
b) Microfinance
c) Rural finance
d) Consortium finance

50. Which of the following resources cannot be securitized?
a) Credit balances outstanding in cash credit accounts
b) Credit Card receivables
c) Hire purchase receivable
d) Mortgage in lieu of future payments

51. Which of the following is a type of anticipatory letter of credit?
a) Green clause letter of credit
b) Yellow clause letter of credit
c) Back to back letters of credit
d) Revolving letter of credit

52. Performance guarantee is issued?
a) In lieu of earnest money
b) In lieu of retention money
c) In lieu of indemnity bonds
d) For successful competition of Turnkey projects

53. Which of the following is not a transfer of funds by using the electronic media?
a) Mail transfer of funds
b) Telegraphic transfer of funds
c) Electronic credit transfers
d) Electronic clearing transfers

54. Which of the following is not an augmenting feature of credit cards?
a) Personal accident insurance
b) Cash withdrawal facility
c) Add-On facility
d) Automatic recovery of interest on term loans

55 Which of the following is a disadvantage of going public issue?
a) Provides liquidity to existing shares
b) Commands better pricing than placement with few investors
c) Increased regulatory norms
d) Enables valuation of the company

56 Which of the following is not a reason for regulating the banking operations?
a) Banks hold a major portion of the public savings
b) Banks intermediate between the savings and investments
c) Banks hold a large part of the money supply
d) Banks earn profit from non-fund services

57. Which of the following statements is true?
a) Resave Bank of India empowers the banks to open branches according to their will and pleasure
b) Reserve Bank of India is a central bank which monitors only lending activities pertaining to export credit
c) Banks have authority to establish the ATMs at their convenience
d) Rural banks of commercial banks do not have freedom to issue credit cards

58. When the customer withdraws cash from ATM, the banker and customer relation ship is?
a) Debtor and Creditor
b) Creditor and Debtor
c) Lessor and Lessee
d) Agent and principal

59. Which of the following is a public sector Bank?
a) IDBI
b) ICICI
c) AXIS
d) HDFC

60. Trade control in India is regulated by?
a) RBI
b) SEBI
c) EXIM Bank
d) DGFT

61 Which of the following businesses is prohibited as per Sec 8 of B.R Act 1949?
a) Executing the trusts
b) Leasing
c) Retail trading
d) Underwriting

62. Which of the following is not one of the essential elements of internal audit?
a) Totality
b) Expertise
c) Independence
d) Subjectivity

63. The letter of credit, which facilitates the exporter to get pre- shipment finance (from the stage of purchase of raw material until the warehousing of the finished goods) from advising bank is called?
a) Red Clause LC
b) Lines of credit
c) Packing credit loan
d) Green Clause LC

64. A term loan is classified as a non-performing asset, if interest or installment is overdue for period exceeding how many days?
a) 90
b) 91
c) 180
d) 182

65. Which of the following is an interest bearing demand deposit?
a) Time Deposit
b) Re-investment deposits
c) Cash Certificates
d) Savings Bank account

66. Debt Recovery Tribunals accept petitions from Banks and financial institutions, only when the amount of suit is for Rs?
a) 1 00 000 and above
b) 5 00 000 and above
c) 7 50 000 and above
d) 10 00 000 and above

67. An endorsement is deemed as an instruction to?
a) Collecting Bank
b) Paying Bank
c) Drawer
d) Payee

68. Ideal Credit deposit ratio for a bank is?
a) 60%
b) 40%
c) 90%
d) 30%

69. The rate at which RBI rediscounts the bills of commercial banks is called as?
a) Bank Rate
b) Prime Lending rate
c) Repo rate
d) BPLR

70. Which of the following is not one of the RBI directives on clean note policy?
a) Currency note packets are not to be stapled and secured with paper bands
b) Soiled notes are to be stapled before they are remitted to Currency Chest.
c) Water mark window of bank notes shall not contain any writings
d) Currency notes are to be sorted in to Issuable and non-issuable notes.

71. Which of the following committees are related to 'Micro financing'?
a) Nayak Committee
b) Tandon committee
c) Vyas Committee
d) Narasimham committee

72. The relation ship between RBI and the Bank maintaining the currency chest is that of?
a) Debtor and Creditor
b) Principal and Agent
c) Bailor and Bailee
d) Creditor and Debtor

73. Normally, the number of members in a self Help Group shall not exceed?
a) 10
b) 20
c) 50
d) 15

74. Short fall in fulfilling the targets of Priority sector and agricultural finance by domestic commercial banks shall be deposited with/in?
a) RIDF
b) SIDBI
c) RBI
d) IDBI

75. The maturity value of a Recurring deposit with a monthly contribution of Rs 500 kept for a period of 12 months, at 9% interest rate compounded quarterly would be Rs.?
a) 6, 265
b) 6, 625
c) 7, 255
d) 7, 555

76. Which of the following is not an imperfect note?
a) Washed note
b) Bleached note
c) Mutilated note
d) Oiled note

77. Credit rating helps in measuring the credit risk and facilitates?
a) Considering higher credit limits
b) Making loan provisioning at an early stage
c) Accurately calculate the probable loan losses
d) Pricing of a loan

78. The Reverse Repo has the following characteristic?
a) Borrowing by RBI from banks
b) Borrowing with government security as collateral
c) Short term borrowing
d) All of these

79. Under the Nayak Committee recommendations, the quantum of working capital limits from the bank is minimum percentage of the projected annual sales?
a) 5%
b) 15%
c) 20%
d) 25%

80. Banks insist on providing finance for those projects or activities only which they consider to be viable. What is meant by viability of project?
a) Capacity to generate cash, adequate to service debt and surplus for borrower's personal requirement.
b) Generation of cash to meet debt liability
c) Generation of profits.
d) Generation of gross profits

81. Letter of negative lien obtained from borrower by a bank contains?
a) An undertaking that the property mortgaged to the bank is his own
b) A confirmation that the borrower had earlier deposited title deeds to create mortgage on the property.
c) An undertaking not to create any encumbrance/lien on the property which he owns but not yet mortgaged to the bank
d) A declaration that he is the joint owner of the property furnishing the details of his share and valuation thereof.

82. Which of the following statement is CORRECT?
a) Consortium advances to be treated as NPA on the basis of recovery by individual banks
b) If one facility of a borrower is treated as NPA other facilities to him also to be treated as NPA even if there are no irregularities in that account.
c) Consortium must be formed if the total exposure of fund based limit exceeds Rs 100 crore.
d) Both (a) and (b)

83. If an IPO is under-priced, which of the following can be considered as consequences/implications of the same?
I. The company looses the opportunity to raise more funds
II. Under pricing would give less returns to the investor
III. Under pricing results in lower net worth on an increased equity.
a) Only (II) above
b) Only (III) above
c) Both (I) and (III) above
d) Both (II) and (III) above all.

84. Corporate Bank files suit for recovery of its loan against the guarantor only and not the borrower. Guarantor pleads in the court that before filing suit against him, money should be recovered from the borrower. In such circumstances, the bank can seek recourse in the court against?
a) All the liable parties together only
b) Any one of them at a time
c) All separately
d) At its discretion it can proceed against any one

85. A letter of credit (LC) wherein the credit available to the customer gets reinstated after the bill is paid is known as?
a) Back to back LC
b) Red clause LC
c) Back to front LC
d) Revolving LC

86. Regional Rural Banks are?
a) Private Sector scheduled commercial banks
b) Cooperative banks
c) Foreign banks
d) Public sector scheduled commercial banks

87. Large corporate customers demand?
a) Short term products from their banks irrespective of the cost at their times of need.
b) Increasingly sophisticated products from their banks at the lowest possible cost.
c) Disintegrated financial products from their banks at the lowest possible cost.
d) Basic banking products from their banks but with speed and efficiency.

88. Funded Services under corporate banking does not include?
a) Working Capital Finance
b) Bill Discounting
c) Export Credit
d) Letters of Credit

89. Which of the following is not directly involved in rural lending?
a) Cooperatives
b) RRBs
c) Commercial banks
d) SIDBI

90. PACSs provide?
a) Mainly long term credit
b) Mainly short term credit
c) Both long term and short term credit
d) Do not provide any credit

91. The purpose of which is to make credit of available to essential sectors of the economy according to national priorities?
a) Selective Credit Control (SCC)
b) Maintenance of cash reserve
c) Reserve fund
d) Comprehensive Credit Control

92. The system of note issue followed by the RBI is?
a) Proportional reserve system
b) Minimum reserve system
c) Minimum fiduciary system
d) Maximum fiduciary system

93. The rate at which the Reserve Bank of India lends to the commercial banks in very short term against the backing of the Government securities is known as?
a) Bank rate
b) Repo rate
c) Reverse Repo
d) Discount rate

94. Scheduled banks are those?
a) Includued in the 2nd schedule of the Banking Regulation Act-1949
b) Includued in the 2nd schedule of the Companies Act-1956
c) Includued in the 2nd schedule of the Reserve Bank of India Act -1934
d) Bank Nationalization Act -1969

95. The following is classified as a public sector bank?
a) ICICI Bank
b) IDBI Bank Ltd
c) Axis Bank
d) Local area bank

96. The banker-customer relationship in credit card payment is?
a) Creditor-debtor
b) Debtor-creditor
c) Agent principal
d) Principal-agent

97. The base rate is set by?
a) Individual banks
b) RBI
c) Government of India
d)RBI in consultation with Government

98. State Bank of India's new floating rate of deposit is directly linked to?
a) Inflation Rate
b) BPLR
c) Base Rate
d) BankRate

99. Six private sector banks were nationalised on April 15, 1980, whose reserves were more than?
a) 100 Crores
b) Rs. 200 crores
c) 300 crores
d) 400 crores

100. Security printing press was established in 1982 at?
a) Kolkata
b) New Delhi
c) Bombay
d) Hyderabad

Answers

1) d      2) c  3) d     4) d        5) d   6) c    7) b   8) d    9) a  10) c
11) c 12) b 13) d 14) c 15) d 16) d 17) a 18) b 19) a 20) c
21) d 22) c 23) d 24) a 25) c 26) a 27) d 28) c 29) b 30) d
31) d 32) a 33) c 34) d 35) c 36) d 37) c 38) b 39) a 40) c
41) c 42) d 43) d 44) c 45) a 46) b 47) b 48) d 49) c 50) a
51) a 52) d 53) a 54) d 55) c 56) d 57) c 58) a 59) a 60) d
61) c 62) d 63) d 64) a 65) d 66) d 67) b 68) a 69) a 70) b
71) c 72) b 73) b 74) a 75) a 76) c 77) d 78) d 79) c 80) a
81) c 82) a 83) c 84) d 85) d 86) d 87) b 88) d 89) d 90) b
91) a 92) b 93) b 94) c 95) b 96) b 97) a 98) c 99) b 100) d

BANKING AWARENESS PRACTICE QUESTIONS

1. Which of the following bodies tightened the norms for foreign exchange risk cover in India mentioning that only companies with a networth of Rs 200 crore can use derivatives to hedge against risk of volatility in currency rates?
a. IMF
b. Reserve Bank of India
c. SEBI
d. Union Ministry of Finance
Ans: b


2. Which body in India finally provided tax exemption on the 9.5 per cent interest income on PF deposits for 2010-11?
a. Reserve Bank of India
b. Income Tax Department
c. Employees’ Provident Fund Organisation
d. Corporate Affairs Ministry
Ans: b


3. (1) The report on Customer Service in Banks by a committee chaired by M. Damodaran, former Chairman of the Securities and Exchange Board of India (SEBI) that was released on 3 July 2011 recommended an increased deposit insurance cover of Rs.5 lakh so as to encourage individuals to keep all their deposits in banks.
(2) The panel also suggested blocking of lost ATM cards through SMS and immediate restoration of funds in case of non-dispensation of cash at an ATM within 5 working days.
Which of the above is not true?
a. Only 1
b. Only 2
c. Both 1 & 2
d. None of the above
Ans: b


4. The Reserve Bank of India (RBI) in a bid to tame inflationary pressure hiked the short-term indicative policy rate (repo rate) by 50 basis points on 26 July 2011. The repo rate currently stands at what percentage?
a. 7%
b. 7.5%
c. 8%
d. 8.5%
Ans: c


5. Which bank posted a 99 per cent drop in net profit at Rs 21 crore for the fourth quarter ended 31 March 2011 against Rs 1867 crore during the corresponding period in 2010?
a. Indian Overseas Bank
b. State Bank of India
c. Bank of India
d. United Bank of India
Ans: b



6. Who did global payments processing company MasterCard appoint as the General Manager, South Asia and Country President, India?
a. T. V. Seshadri
b. Vicky Bindra
c. Tunde Lemo
d. Ajay Banga
Ans: a


7. Government of India on 19 July 2011 appointed Usha Ananthasubramanian, former general manager of Bank of Baroda (BoB) as executive director of which public sector lender?
a. Central Bank of India
b. Punjab National Bank
c. United Bank of India
d. Gramin Bank
Ans: b


8. Name the public sector lender that selected Metlife as its partner for a proposed foray into the life insurance segment.
a. Syndicate Bank
b. Punjab National Bank
c. Corporation Bank
d. United Bank of India
Ans: b


9. Which bank signed a memorandum of understanding with Dewan Housing Finance Corporation (DHFL) under which DHFL will distribute home loans to Yes Bank's customers?
a. Canara Bank
b. ABN Amro bank
c. Yes Bank
d. HSBC
Ans: c


10. Which life insurance company in India launched a new non-linked health insurance plan, Jeevan Arogya?
a. HDFC Standard Life Insurance Co. Ltd
b. Life Insurance Corporation of India
c. IDBI Fortis Life Insurance Company Ltd.
d. SBI Life Insurance Co. Ltd
Ans: b


11. Which of the following public sector banks in November 2011 froze its lending to the power sector?
a. State Bank of India
b. Allahabad Bank
c. Punjab National Bank
d. United Bank of India
Ans: b


12. Which Indian bank on 10 May 2011 raised benchmark prime lending rate 75 basis points to 14% following raising of interest rates by RBI by basis points on 3 May 2011?
a. State Bank of India
b. Union Bank
c. Punjab National Bank
d. Bank of Baroda
Ans: a


13. The Reserve Bank of India on 26 April 2011 fined 19 banks, including the country's top private and foreign banks for violating its guidelines on derivatives. Which is the only public sector bank on the list of banks to be fined?
a. State bank of India
b. Punjab National Bank
c. Bank of India
d. Indian Bank
Ans: a


14. The Reserve Bank of India on 25 August 2011 released its Annual Report for 2010-11. Which of the following was not discussed in the Annual Report the Central Board of the RBI?
a. assessment of the macroeconomic performance during 2010-11
b. prospects for 2011-12
c. working and operations of the Reserve Bank and its financial accounts
d. role of regulatory bodies in controlling the financial markets
Ans: d


15. Reserve Bank of India (RBI) panel headed by headed by Usha Thorat, Director, Centre for Advanced Financial Research and Learning (CAFRAL) on 29 August 2011 came up with suggestion on non-banking finance company (NBFC). Which of the following related to this statement is not true?
1. The panel suggested the central bank to insist on a minimum asset size of more than Rs.25 crore for registering any new non-banking finance company (NBFC)
2. Transfer of shareholding, direct or indirect, of 25 per cent and above, change in control, merger or acquisition of any registered NBFC will require prior approval of the Reserve Bank.
3. Tier-I capital for capital to risk weighted assets ratio (CRAR) purposes would be specified at 12 per cent to be achieved in three years for all registered deposit-taking and non-deposit-taking NBFCs.
4. NBFCs would be subject to regulations similar to banks while lending to stock brokers and merchant banks and similar to stock brokers, as specified by the Securities and Exchange Board of India (SEBI)
a. 1 & 4
b. 2 & 4
c. Only 4
d. Only 1
Ans: d


16. Which Indian PSU bank in tune with its plans to expand its retail division in the UK entered the mortgage market in the country for the first time?
a. Punjab National Bank
b. Oriental Bank of Commerce
c. State bank of India
d. Indian Overseas Bank
Ans: c


17. Which of the following banks set up two loan processing centres for the small and medium enterprise (SME) segment on a pilot basis in Bangalore & in New Delhi in September 2011?
a. Corp Bank
b. United Bank of India
c. Syndicate Bank
d. Bank of Baroda
Ans: c


18. The government suspended M Ramadoss for alleged violations in issuing insurance cover to an airline during his stint as head of another state-run insurer. To which insurance group did he belong to?
a. New India Assurance
b. LIC
c. GIC
d. ICICI Insurance
Ans: a


19. Which of the following banks in early May 2011 entered into a tie-up with non-banking finance companies such as Future Capital, Bajaj Finance, and Reliance Capital to grow its retail portfolio?
a. Central Bank of India
b. State Bank of India
c. Bank of India
d. HDFC Bank
Ans: a


20. Which are the two Gujarat-based cooperative sector lenders on which Reserve bank of India imposed a financial penalty of Rs 1 lakh each for violation of various rules, including anti-money laundering guidelines?
1. Shree MahalaxmiMercantile Co-operative Bank
2. Rander People's Co-operative Bank
3. Abad District Co Op Bank
4. Ahd Mercantile Co-Op Bank Ltd
a. 1 & 2
b. 2 & 3
c. 1 & 4
d. 3 & 4
Ans: (a)

RBI asks urban co-op banks to get ready for IFRS

The Reserve Bank  asked urban cooperative banks (UCBs) to take necessary steps to ensure smooth transition to new international accounting norms IFRS from April 2014.

“UCBs are advised to take necessary steps to ensure that they are in readiness to adopt to IFRS convergence IAS from April 1, 2013, or April 1, 2014, as the case my be,” the Reserve Bank of India (RBI) said in a notification.

It said that banks and NBFCs should upgrade their skills, manage information system and technology capabilities for smooth transition to new financial reporting standards to manage complexities and challenges of international standards.

According to a roadmap of the Corporate Affairs Ministry, all large commercial scheduled banks are mandated to prepare their books of accounts according to the International Financial Reporting Standards (IFRS) from April 1, 2013.

Besides, smaller urban cooperative banks and non-banking finance companies are to converge their opening balance sheets with IFRS from April 1, 2014.

IBPS GENERAL AWARENESS PRACTICE QUESTIONS

1. Which of the following places was known as a centre of learning in ancient India?
(1) Nalanda

(2) Ujjain

(3) Allahabad

(4) None of these

Ans: (1)

2. Which of the following is not a carbohydrate?
(1) Wax

(2) Starch

(3) Sucrose

(4) Maltose

Ans: (1)
3. Deficiency of which vitamin causes night blindness?
(1) Vit. B

(2) Vit. C

(3) Vit. A

(4) Vit. E

Ans: (3)
4. Who conducts the State Assembly Elections?
(1) Chief Justice of the High Court concerned.

(2) Chief Justice of the Supreme Court

(3) Chief Election Commissioner

(4) Governor of the State concerned

Ans: (3)

5. Infrastructure sector recorded a growth of what per cent in Novemberr 2011 after touching five-year low of 0.3% in October 2011 due to an impressive growth in cement, electricity and refinery products?
(1) 2.3%

(2) 3.9%

(3) 4.6%

(4) 6.8%

Ans: (4)
6. According to the RBI data, India's foreign exchange reserves fell by what amount to $302.1 billion during the week ended 16 December  2011 on account of a fall in foreign currency assets?

(1) $4.67 billion

(2) $3.33 billion

(3) $5 billion

(4) $5.75 billion

Ans: (1)

7. Lok Sabha on 27 December 2011 passed the Lokpal and Lokayukta bill, 2011. Consider the following statements:
i) The setting up of Lokayuktas by the states would not be mandatory.

ii) The constitutional amendment bill fell through.

Choose the right option:

(1) Both i and ii are correct.

(2) Only i is correct.

(3) Only ii is correct.

(4) Neither i nor ii is correct.

Ans: (1)

8. The enigmatic leader of North Korea Kim who led his nation for 17 years through a devastating famine while frustrating the United States and other global powers with approach to talks on giving up nuclear arms in return for food and other assistanceon died on 17 December 2011 after he suffered a massive heart attack. Name the leader

(1) Kim Jong-il

(2) Kim Il-sung

(3) Kim Jong-un

(4) Kim Jong-chul

Ans: (1)

9. Who defeated ace badminton player and World No. 4 Saina Nehwal of India in the women’s singles final of the $500000 BWF World Super Series badminton championship in China on 18 December 2011?
(1) Zhang Ning

(2) Xie Xingfang

(3) Xu Huaiwen

(4) Wang Yihan

Ans: (4)
10. NASA's Kepler mission discovered the first Earth-size planets orbiting a sun-like star outside our solar system. These planets are called ___ and____.
(1) Kepler-20e; Kepler-20f

(2) Kepler-20a; Kepler-20b

(3) Kepler-20c; Kepler-20d

(4) Kepler-20m; Kepler-20n

Ans: (1)

11. Which of the following is not a function of a commercial bank?

(1) Providing project finance

(2) Selling Mutual Funds

(3) Deciding policy rates like CRR, Repo Rates/SLR etc.

(4) Settlement of payments on behalf of the customers

Ans: (3)

12. An IPO is - 

(1). initial price offered by a private limited company to its shareholders

(2) an offer by an unlisted company for sale of its shares for the first time to the public

(3) used to increase the share capital of an unlisted company

(4) a book building process
Ans: (1)

13. Private equity investors, invest in a company based mainly on- 

(1) the age of the company

(2) the location of the company

(3) the activity undertaken-by the company

(4) the credibility and the valuation of the company

Ans: (4)

14. ‘Sub Prime Lending' is a term applied to the loans made to-

(1) Those borrowers who do not have a good credit history

(2) Those who wish to take loan against the mortgage of tangible assets

(3) Those who have a good credit history and are known to bank since 10 years

(4) Those borrowers who are most preferred customers of the Bank

Ans: (1)

15. Which regulatory body on 16 August 2011 suggested that the Centre and the State governments should come out with a regulatory framework for the realty sector to protect consumers from unfair trade practices?

(1) IRDA

(2) SEBI

(3) FICCI

(4) CCI
Answer: (4)

New supervisory action structure for urban co-ops unveiled

The Reserve Bank of India has unveiled a revised Supervisory Action Framework for urban co-operative banks (UCBs) whereby in the initial stage of deterioration in their financial position, self corrective action by banks' management is envisaged.

If necessary steps are not taken to improve their financials or the steps taken do not result in the required improvement in the financial position of the UCB, the Reserve Bank will step in and initiate supervisory actions as it deems necessary.

If the capital-to-risk-weighted assets ratio falls below 9 per cent or there is deterioration in asset quality or decline in profits, liquidity constraints and so on, the management of the UCB should take necessary corrective actions, on its own, with a view to improve the financial position of the bank, the RBI said in a notification.

The RBI would commence active monitoring of the performance of the bank if the self-corrective action by UCB does not work.

Under RBI supervision, the UCBs would, in the first stage, be required to submit to the RBI an action plan for improving their performance in the specific areas where there is a deterioration or cause of concern.

The second stage of the RBI's supervisory action would be in the form of pre-emptive action aimed at arresting further deterioration in the financial position of the bank.

In case of deposit erosion up to 10 per cent, the UCB will be advised to explore options for merger with another bank. If the deposits erosion is beyond 10 per cent and up to 25 per cent, the bank will be prohibited from acceptance of fresh deposits and repayment of deposits.

A showcause notice will be issued for cancellation of the licence of the bank in case of deposit erosion in excess of 25 per cent.

IDBI Bank launches online retail G-Sec portal

IDBI Bank today launched the country’s first online G-Sec portal ‘Samriddi’ to enable retailers to purchase government bonds and securities for high yield. Pursuant to RBI’s desire that government bonds and securities should be made a popular mode of investment for retailers, the bank has taken the lead and launched the Samriddhi G-Sec portal for the purpose. A retailer can log on to the portal and register with it for online purchase of government bonds and securities for high annualized yield. Observing that retail investors’ participation in government bonds and securities were much lower in India than countries like Japan, Mexico and Argentina, he said IDBI Bank will launch a series of awareness programmes to attract the retail investors.

Electronic Accounting System in Excise and Service Tax (EASIEST)

In August 2004, a HPC was set up in the RBI for "setting up facilities for on-line transmission of Tax Payment Data from Banks to Central Excise Dept. under the Chairmanship of Shri J. N. Nigam (Member) CBEC. The terms of reference of the Committee included recommending: modalities for dematerialization of Challans, setting up and implementing a fully automated safe and secure system of receipt and transmission of information relating to tax payments, new business processes for operationalising the scheme, overall policy frame work for the industry etc. Members included Director General (Systems), CBEC, Principle Chief Controller of Accounts (CBEC), Controller General of Accounts, representatives from Corporate Sector, RBI and IBA.
At the first meeting of the HPC on 24th September 2005, it was decided that the project may be implemented in two phases viz. the first Excise and then Service Tax. It was decided to constitute 2 sub-committees: a Technical Sub-committee under Shri R. N. Ramanathan, DMD, SBI to work out the technical requirements of the project and a Sub-committee on Accounting Procedure chaired by Shri V. N. Kaila, Pr. CCA, CBEC to work out the accounting procedures for the project.
NSDL was identified as the intermediary for the transmission of Tax Information. In place of the quadruplicate, only a single copy of the challan would be submitted and the tear off portion containing the Challan Identification Number (CIN) would be handed over by the collecting bank branch to the assessee. The CIN number is the unique identifier for a challan. It consists of the Challan Number, Date of submission of Challan and the BSR code of the collecting branch. A combination of the three helps to identify the challan uniquely. The Technical Sub-committee worked out the file structures, the work flow etc. for the on-line transmission of tax-data based on the concept paper submitted by the CBEC.
The second HPC meeting was held at RBI on 5th November 2004. At the meeting, it was decided to start a Pilot at Chennai limiting the Pilot to Excise in the first phase. Thus, a pilot was started at Chennai from 17th January 2005 involving 5 branches of each of the 8 banks authorized to collect excise at Chennai. A single copy challan with a tearoff counterfoil called GR7 was introduced during the Chennai pilot.
On 1st June 2005, the Pilot was extended to all the 400 branches in and around Chennai, covering all the 4 commissionerates in Chennai.

EASIEST process Document.

Process to be followed at collecting branch

• Collecting branches to capture Challan details on the date of receipt of the challan irrespective of Cash or clearing cheques. This will ensure automatic capture of tender date by the system.
• Provision to be made for automatic capture of the following fields for every challan as a part of data entry:-
  1. BSR Code of Collecting Branch
  2. Challan tendered date
  3. Challan Sequence Number (CIN)
  4. BSR Code of Focal Point Branch.
  All these fields to be automatically captured by the system and should not be normally editable fields. In case of a need to edit any of these fields for some reason, it should be possible only on the basis of a supervisor authorization.
• Data entry software should identify the concerned Major Head from the Assessee code itself and the 8 digit reduced account codes needs to be selected from pop-up only. In case the Assessee code is not available or not validated, the software should provide option to select the Major Head and reduced account code through pull down menu only.
• System to provide the facility for data entry of Assessee Code. Once the Assessee Code is entered, the same will be validated against the Assessee Master provided by NSDL.
• Banks should periodically update the Assessee Master through the patches provided by NSDL.
• In case the Assessee Code is not available in the master, then software to prompt the user to Capture Name & Address of the Assessee. In addition, system to ensure capture of Location Code. If the complete Location Code is not available, bank should ensure capture of the first two digit (Commissionerate Code) correctly may be after confirming from the taxpayer and the other four digits can be filled as zeros. This will enable Commissionerate -wise scrolling of challans.
• If the Assessee Code is valid, then the Name and Address, Location Code etc are to be automatically be picked up from the Assessee Master and no editing of these fields should be allowed.
• All other mandatory fields are to be captured on the date of tender. In case mandatory details mentioned in challan are not captured, software to prompt User to capture same.
• Software should have Maker and checker feature for data entry. Software should generate Challan number (CIN) based on date of tender.
• At EOD, all realized payments to be compiled and date of realization for the same will be captured by the system automatically. For Cash transactions, cheque realization date to be the same as date of tender.
• Each challan will be given a running serial number based on its item number in the scroll. This number is to be allotted while scrolling the challans Commissionerate-wise and Major Head-wise for the day. The item number of the challan in the scroll will be number and to be captured in the new field BR_SCR_ITEM_SL. Physical challans needs to be arranged under the hard copy of the computer generated scroll in the seriatim of BR_SCR_ITEM_SL number.
• At EOD, the software to generate daily scrolls Commissionerate-wise and Major Head-wise. The scroll number and scroll date appears on the system generated scroll should be captured automatically in the electronic string also. This will help in having synchronization of electronic data and physical documents.
• Subsequently, file to be generated which can be transmitted to Focal Point Branch for further processing along with Physical scrolls & challans.

Process to be followed at Focal Point Branch (FPB)

• Software to provide only view facility to the FPB
• System to provide a facility to view scroll details and also underlying challans.
• On receipt of physical scrolls from the collecting branches, details of the scroll to be verified against the electronic data.
• In case of error, erroneous file to be reported back to the collecting branch and the file relating to that branch to be withheld.
• Remaining valid and verified files to be compiled and main scrolls are to be generated Commissionerate-wise and Major Head-wise.
• The Main Scroll number and scroll date appearing on the hard copy of the system generated scroll should be same in the electronic string also.
• Only the branch scrolls against which the physical challans have been reached the FPB and verified for its correctness against the corresponding electronic string to be consolidated to be uploaded to link cell and then to NSDL.
• Hard copy of the System generated Main scrolls together with the hard copy of receiving branch scrolls and underlying physical challans are to be sent to PAO.
• Hard copy of the receiving branch scrolls and underlying physical challans are to be arranged under the Hard copy of the Main scroll in seriatim as they appear on the Main scroll before sending the same to PAO.

On-Line Tax Accounting System(OLTAS)

The advisory Group on Tax Reforms under the Chairmanship of Dr. Vijay Kelkar had recommended networking of Income Tax Department, Banks and Reserve Bank of India to facilitate On-line Transmission of details regarding tax collection/refund, etc. between banks and offices of Income Tax Department and also RBI for settlement of funds.
To examine the various issues relating to implementation of the Kelkar Committee recommendations stated above, the RBI constituted a High Power Committee in February 2003, under the Chairmanship of Shri B. Swarup, Member (Inv.), Central Board of Direct Taxes (CBDT) to recommend suitable measures in this regard. Chairman, IBA was a Member of this Committee.
The High Power Committee under the aegis of the RBI constituted a Sub-Group on Business Processess Designing for the OLTAS, under the Chairmanship of Shri C.B. Bhave, Managing Director, NSDL, Mumbai and Chief Executive, IBA as one of its members. The Group recommended that a Single Copy Challan should be adopted for payment of taxes as recommended by Kelkar Committee for simplifying the process for the tax payer. Accordingly, Single Copy Challan has been introduced in place of 4 Copy Challans from 1st June 2004.
The High Power Committee constituted a Technical Sub-Committee, chaired by Shri R.N. Ramanathan, Dy. Managing Director (IT), State Bank of India and with representatives from Income-tax Department (Systems), Controller of Accounts, CBDT, RBI and IBA, to address all issues for conducting pilot studies on On-Line Tax Accounting System (OLTAS). The Technical Sub-Committee held several meetings in the IBA and finalized the record structure and file format for the On-Line Transmission of tax information from the collecting banks to the TIN (Tax Information Network at NSDL) and the Income Tax Department. The Technical Committee also finalized the modalities for conducting pilot studies on OLTAS and three pilots were launched between June 2003 and April 2004:-

Phase I	Phase II	Phase III
Conducted from 9th June 2003 to 15th July 2003 involving selected branches of 15 Public Sector Banks in the 4 Metros of Mumbai, Delhi, Chennai and Kolkata	Conducted from 1st Sep. to 15th Nov. 2003. During this phase, the no. of centres were increased to 8 viz. the four metros of Mumbai, Delhi, Kolkata and Chennai and Cities of Ahmedabad, Bangalore, Hyderabad and Pune.	Conducted from 1st Dec. 2003 to 31st May 2004. No. of participating banks increased from 15 to 19 incl.HDFC Bank, ICICI Bank, IDBI Bank and UTI Bank. From 1st Feb. 2004, the 12 remaining banks collecting IT also joined the Pilot, thus bringing the total no. tax collecting banks to 32 including RBI

Originally, the Pilot on OLTAS was confined only to the corporate tax payers, however, after 15th February 2004, the project covered both corporate and individual tax payers and finally, from 1st June 2004, the Pilot went All-India, covering all the authorized branches of the 32 participating banks all over the country. Several measures were taken to ensure smooth operations under the OLTAS. A crack team was setup in the IBA with members from CBDT, RBI, NSDL, SBI and banks for resolving problems immediately before and after the launch of the OLTAS project. A central technical help desk was setup at every bank to attend quickly to technical problems at the bank level. Additional arrangements for receipt of tax challans and help desks were setup at collecting branches to clarify the queries that may be raised by the assesses at the branch level during peak time. Declared under the Mission Mode, the OLTAS project is monitored at the highest levels.
Settlement of funds under OLTAS:

Originally, the OLTAS Project covered only the tax information data. The funds collected by the bank branches followed the manual mode and was reconciled with the paper scrolls sent to the ZAO. However, from 1st April 2005, the OLTAS Pilot Project was commercially rolled out and the settlement of funds was also migrated to on-line mode. Thus, from 1st April 2005, the banks had to reconcile funds collected on a day to day basis with the electronic data reported by banks to TIN.
With over 12000 branches reporting tax data, there were several issues related to quality of data being uploaded to TIN. For overseeing all such issues, the High Powered Committee has constituted a Monitoring Group under the Chairmanship of Member (Revenue), CBDT. The Committee meets regularly and addresses areas of concern. At its recent meeting held on 30th January 2006, the Group discussed the following issues among others:
a) Of the 12000 total number of branches collecting taxes, 60 were found not to be reporting to TIN. These were found to be mainly those that had nil collections over several months/ years and had applied for delisting.
b) While number of challans with missing PAN / TAN were negligible, the number of records with fictitious / non-existent PAN / TAN continued to be approximately 10%. For addressing this issue, various measures were discussed and agreed upon. These included introducing bar-coded pre-printed challans, verifying PAN / TAN entry against a regional database provided by the Income-Tax department, using the bulk query facility of the Income Tax department, etc. It was decided that in certain cases, the banks could also request for a copy of the PAN / TAN card from the tax payer.
c) Reconciliation of the funds settled with the RBI and the OLTAS data transmitted by banks on day-to-day basis. The difference for January 2006 was found to be only 2.46 crores while the total tax collection was Rs.7327.40 crores.
With concerted effort from the CBDT, RBI, the banks and the IBA, the On-line Tax Accounting for the Direct Taxes has become a reality. This project is one of its kind in the whole world.