BANKING AWARENESS PRACTICE MCQs FOR SBI EXAMS

1. As per RBI guidelines, a Savings Bank Account can be opened with a bank by a Minor in his/her name and operated by himself/herself provided the Age of the Minor is?
a) Above 5 years
b) Above 10 years
c) Above 8 years
d) Above 12 years
e) No Minimum age prescribed

2. GDRs (Global Deposit Receipts) are issued in which Currency?
a) British Pound
b) US Dollar
c) Any Major Currency of the World
d) German Mark
e) Japanese Yen

3. Banks in India can dispose of their bad loans known as NPAs (Non Performing Assets) through which of the following modes?
a) By selling them to ARCs (Asset Reconstruction Companies)
b) By Writing off the NPAs in their Books
c) By recovering the dues using all available means
d) 'a', 'b'&'c' of the above
e) 'b' & 'c' of the above

4. The World Bank approved financial assistance for Uttarakhand State which was hit by rains & landslides in June 2013. What is the quantum of assistance?
a) USD 1250 Million
b) USD 2500 Million
c) USD 250 Million
d) USD 25 Million
e) None of the above

5. Who is the current Chairman of Gujarat Cooperative Milk Marketing Federation Ltd. (GCMMF), popularly known as Amul?
a) Vipul Chaudhary
b) R S Sodhi
c) Dr Verghese Kurien
d) Dr M S Swaminathan
e) None of the above

6. Which Country is the largest Importer of Crude Oil as of October 2013?
a) India
b) Russia
c) USA
d) China
e) None of the above

7. What is REIT?
a) Real Estate Investment Trust
b) Rural Employment Improve- ment Trust
c) Real Estate Improvement Trust
d) Rural Employment Improve- ment Target
e) None of the above

8. What is Crowd Funding?
a) Pooling Money from People through a Public Issue of Shares
b) Pooling Money from People through Road Shows
c) Creating Funds to Manage Population Growth
d) Pooling Money from People through Internet
e) None of the above

9. Which Bank owns the maximum number of ATMs in India?
a) ICICI Bank
b) HDFC Bank
c) SBI
d) Yes Bank
e) None

10. Jago Grahak Jago campaign an initiative of Ministry of Consumer Affairs is against?
a) Products imported from China
b) Smuggled and Counterfeit Products
c) Products imported from Pakistan
d) Products which do not carry ISI mark
e) None of the above

11. What is the latest Power Plant to start production of Electricity in India?
a) Kandla Nuclear Power Plant
b) Kolkata Nuclear Power Plant
c) Kalpakkam Nuclear Power Plant d) Kudankulam Nuclear Power Plant
e) None of the above

12. Name the Currency of Scotland?
a) US Dollar
b) Scottish Dollar
c) British Pound
d) Scottish Peso
e) None of the above

13. In Banking parlance, what is a Nostro Account?
a) Account maintained by a State Government with RBI
b) Account maintained by Co-operative Bank with RBI
c) Account maintained by an Indian Bank with RBI
d) Account maintained by an Indian Bank with a Bank abroad in Foreign Currency
e) None of the above

14. Find the odd man out of the following?
a) VISA
b) Master Card
c) Standard Express
d) American Express
e) RuPay

15. Rashtriya Krishi Vikas Yojana (RKVY) is launched under the aegis of the National Development Council to achieve 4% annual growth in agriculture. In 2013-14 Budget, outlay for Rashtriya Krishi Vikas Yojana is?
a) Rs. 9954 Crores
b) Rs. 10000 Crores
c) Rs. 9054 Crores
d) Rs. 8654 Crores
e) None of the above

16. The proposed Indian Institute of Agricultural Bio-Technology will be established in?
a) Dharbhanga, Bihar
b) Shivaganga, Tamilnadu
c) Raibareli, UP
d) Ranchi, Jharkhand
e) None of the above

17. Annual Economic Survey is presented to the Parliament by?
a) Finance Minister
b) Commerce Minister
c) Prime Minister
d) Reserve Bank of India
e) None of the above

18. In which State are maximum Major Ports of India located?
a) Maharashtra
b) Tamil Nadu
c) Andhra Pradesh
d) West Bengal
e) None of the above

19. What is the minimum amount that can be transferred via RTGS (Real Time Gross
Settlement) as per RBI guidelines?
a) Rs. 0.50 Lakh
b) Rs. 5 Lakh
c) Rs. 1 Lak
d) Rs. 2 Lakh
e) None

20. Who is the Chairman of FMC (Forward Markets Commission) which is a regulatory authority for Commodity futures markets in India?
a) Chanda Kochar
b) Ramesh Abhishek
c) Arundhati Bhattacharya
d) K V Kamath
e) None of the above

21. Which Public Sector Bank has its Head Office located in Manipal?
a) Vijaya Bank
b) UCO Bank
c) Syndicate Bank
d) Bank of India
e) None of the above

22. A Cheque is?
a) Nominated Instrument
b) Non-cash Instrument
c) Non-Negotiable Instrument
d) A Negotiable Instrument
e) None of the above

23. Who is Indra Krishnamurthy Nooyi?
a) Chairperson&CEO of Pepsico
b) Chairperson & CEO of ICICI Bank
c) Chairperson & CEO of Axis Bank
d) Chairperson & CEO of Amul
e) None of the above

24. Which of the following is a Tool used by RBI to control Inflation?
a) Repo Rate Hike
b) Procurement of Food grains
c) Repo Rate Reduction
d) Reduction in Direct Tax Rates
e) None of the above

25. Who will pass the Annual Budgets of the Union Territories in India?
a) Parliament
b) Respective Legislatures
c) Finance Minister
d) Prime Minister
e) None of the above

26. As per 2011 Census, which State of India has got the highest Urban Population?
a) Karnataka
b) Maharashtra
c) Tamilnadu
d) West Bengal
e) None of the above

27. Currently, what is the salary ceiling of an Employee for coverage under ESI (Employees State Insurance) Scheme?
a) Rs. 10,000 per month
b) Rs. 15,000 per month
c) Rs. 25,000 per month
d) Rs. 30,000 per month
e) None of the above

28. What is the current RBI's Reporate as announced on 20th Oct, 2013?
a) 7.75%
b) 7.50%
c) 7.25%
d) 7.00%
e) None

29. In India, Direct Tax collections are the highest from which State?
a) Karnataka
b) Gujarat
c) Tamil Nadu
d) Maharashtra
e) None

30. Find the odd man out?
a) NSE
b) DAX
c) BSE
d) MCX
e) NCDEX

31. Name the new book written by Alan Greenspan, the former USA Federal Reserve Chairman?
a) The Fault Lines
b) The Map and the Territory
c) My Experiments with Truth
d) Inside the Doomsday Machine
e) None of the above

32. Chairman of a Public Sector Bank in India is?
a) Elected by the Board of Directors of the Bank
b) Elected by the Shareholders of the Bank
c) Appointed by Govt. of India
d) Appointed by the World Bank
e) None of the above

33. What is Muhurat Trading?
a) Construction and Sale of Marriage Function Halls
b) Community marriages on Diwali Day
c) Trading in Stock Exchange on Diwali Festival Day
d) Betting on Diwali Festival
e) None of the above

34. A Gilt Mutual Fund invests the Fund money in?
a) Government Securities
b) Gold Bullion
c) Gold Mines
d) Equity Shares traded on a Stock Exchange
e) None of the above

35. Which of the following dates is NOT a common Holiday for all the Banks all over India?
a) 2nd October
b) 26th January
c) 1st May
d) 15th August
e) None of the above

ANSWERS: 
1) b 2) b 3) d 4) c 5) a 6) d 7) a 8) d 9) c 10) b
11) d 12) c 13) d 14) c 15) a 16) d 17) a 18) b 19) d 20) b
21) c 22) d 23) a 24) a 25) a 26) b 27) c 28) a 29) d 30) b
31) b 32) c 33) c 34) a 35) c

Salient Features of Sixth Economic Census

• Covered all States and Union Territories of Indian Union
• Fieldwork conducted during January, 2013 to April, 2014 in collaboration with State/UT Governments
• Enumerated all establishments engaged in various agricultural and non-agricultural activities excluding crop production, plantation, public administration, defence and compulsory social security
• Used Enumeration Blocks (EBs) of Population Census, 2011 as the primary geographical units for collection of data
• About 7 lakh enumerators and 3 lakh supervisors deployed to collect information from the entire country comprising about 25 lakh Population Census EBs
• About 20,000 training programmes, each with a participation of around 50 persons organized
• Certain changes made in the main schedule of enquiry to guard against omission of home-based establishments or those operating from outside household without fixed structure
• Data for handicraft/handloom establishments collected for the first time
• A Standing Committee under the Chairmanship of Chief Statistician of India & Secretary, MoSPI looked into various aspects of work with technical support provided by a Working Group
• State Level Coordination Committees under the chairmanship of Chief Secretaries and District Level Coordination Committees under the chairmanship of District Collectors constituted for smooth conduct of the Census
• Overall coordination at all-India level and guidance provided by the Economic Statistics Division of CSO

BANKING AWARENESS PRACTICE MCQs FOR SBI SPECIAL MANAGEMENT EXEXUTIVES EXAM 2014

1. Who headed the committee which submitted its report on February 7, 2014 regarding Financial Bench Marks (appointed by RBI )?
a) Prakash Bakshi
b) Damodaran
c) Vijaya Bhaskar
d) D.Subba Rao
e) None of the above

2. Which among the following is correct and full form of CAS in context with banking
markets in India?
a) Cash Authorized Scheme
b) Credit Authorized Scheme
c) Credit Access System
d) Credit Arrangement System
e) Cash Accreditation Scheme

3. Money laundering refers to which of the following?
a) Conversion of assets into cash
b) Conversion of Black money gained from illegal activities to white money
c) Conversion of cash into gold
d) Conversion of gold into cash
e) Conversion of shares into cash

4. Account for conversion of physical securities into electronic form is know as?
a) NRI Account
b) Foreign Account
c) Trio Account
d) Current Account
e) DEMAT(Dematerialisation)Account

5. What is "Hot Money"?
a) Flow of funds (or capital) from one country to another in order to earn a short-term profit on interest rate differences and/or anticipated exchange rate shifts.
b) Hard Currency
c) Soft Currency
d) Foreign Assets
e)All of these

6. RBI has decided to prescribe a minimum CRAR for StCBS /CCBs of 9% to be achieved in a phased manner over a period of 3 years as indicated below
a) 3 years
b) 4 years
c) 5 yeasrs
d) 2 years
e) No such restriction

7. PFRDA stands for?
a) Provident Fund Regulatory and Development Authority
b) Preferential Fund Regulatory and Development Authority
c) Permanent Fund Regulatory and Development Authority
d) Pension Fund Regulatory and Development Authority
e) None of these

8. The main function IMF is to?
a) Finance investment loans to development countries
b) Act as a private sector lending arm of the World Bank
c) Help to solve Balance of payment problems of members countries
d) Arrange International deposits from Banks
e) None of these

9. Which of the following public sector banks has the largest number of Branches in foreign countries?
a) Bank of India
b) Bank of Baroda
c) Punjab National Bank
d) Corporation Bank
e) None of the above

10. Which of the following assets are considered as Near Money?
a) Bond
b) Equity shares
c) Time deposits
d) Traveller's cheque
e) All of the above

11. What is an Indian Depository Receipt?
a) A deposit account with a Public Sector Bank
b) A depository 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 Indian depositories
e) None of these

12. Which of the following cannot be called as a value added service offered by a Bank ?
a) Special Account for poor sections of society
b) Accident Insurance cover
c) Instant Credit of Outstation cheques
d) Free cheque books
e) All of these

13. Which of the following is NOT the feature of Real Time Gross Settlement (RTGS) ?
a) Payments are settled transaction by transaction
b) Settlement of funds is revocable
c) Settlement is done in real time
d) It is a fully secured system which uses digital signatures and public Key encryption for
safe and secure message transaction
e) None of these

14. Standard & Poor is a?
a) Bank
b) Non-Banking Finance Company
c) Stock Market Agency
d) Credit Rating Agency
e) RBI advisory body

15. In Banking System, which of the following Act was framed specially to speed up recoveries Non - Performing Assets?
a) SARFAESI Act
b) Banking Regulation Act
c) Foreign Exchange Management Act
d) Industrial Disputes Act
e) None of these

16. In context with the Business and Banking, what is CRAR ?
a) Capital to Risk Asset Ratio
b) Credit to Risk Asset Ratio
c) Credit to Risk Assessment Ratio
d) Capital to Risk Assessment Rate
e) Credit Rate Assessment Ratio

17. What is Mixed farming:
a) Cultivating 2 crops simultaneously
b) Cultivating in 2 types of soils
c) Cultivating crops and allied activities
d) Cultivating 2 crops in a year
e) None of these

18. The Asian Development Bank Headquarters is located at?
a) Tokyo
b) Manila
c) New Delhi
d) Colombo
e) New York

19. Buyers market denotes?
a) Excess of supply over demand
b) Equal supply and demand
c) Commodities being available at competitive rates
d) Demand exceeding supply
e) None of these

20. RBI introduced Banking Ombudsman scheme in which year?
a) 1935
b) 1965
c) 1995
d) 2001
e) 2005

21. Who is not eligible for Internet banking?
a) Joint account operation severally
b) Minor account operated by Guardian
c) Illiterate
d) Female depositors
e) None of these

22. Which of the following is NOT viewed as national debt ?
a) Life Insurance policies
b) Long term Govt Bonds
c) National savings certificates
d) Provident Fund
e) None of these

23. Industrial exit policy means?
a) Forcing foreign companies to leave India
b) Forcing Business units to move out of congested localities
c) Allowing manufactures to shift their line of product
d) Allowing business units to close down
e)None of these

24. National Stock Exchange is located in ?
a) New Delhi
b) Chennai
c) Mumbai
d) Kolkata
e) None of these

25. Who is the New Chair Person for Central Board of Direct Taxes, Appointed on 9th Feb
2014?
a) Sudha Sharma
b) R.K Tiwari
c) Thomas David
d) Lopez Mark
e) Nandan Nilekani

26. Name the expert committee formed by RBI on 20th Jan 2014, to review the
governance of Bank Boards in India inclu- ding examining the ownership and
salary structure of Banks?
a) Arun Tiwari (CMD of Union Bank)
b) K R Kamath (CMD of PNB)
c) VR Iyar (CMD of Bank of India)
d) PJ NAIK (former Chairman and CEO of Axis bank)
e) MV Nayar

27. Jatinder Bir singh, an IAS officer has been appointed as the CMD of?
a) Steel Authority of India Ltd
b) Bharat Heavy Electricals Ltd
c) Union bank of India
d) Punjab and Sindh Bank
e) None of the above

28. In respect of Interest Subsidy on Educational Loans, the parent income ceiling from
all sources should not be more than Rs.______ lacs per annum.
a) Rs.2.50 lakhs
b) Rs.4.50 lakhs
c) Rs.5.50 lakhs
d) Rs.7.50 lakhs
e) None of the above

29. "Sugam" is scheme launched for -
a) Small tax payers
b) Pensioners getting old age pension
c) Big corporate houses
d) Retired Government Employees
e) None of these

30. INFINET stands for?
a) International Financial Network
b) Indoor Financial Network
c) Indian Financial Network
d) Internet Financial Network
e) None of these

31. CASA Deposits relates to
a) Only Savings Deposits
b) Recurring Deposits
c) Only Flexi deposits
d) Demand Deposits(SB and Current Account)
e) Fixed Deposits

ANSWERS:
1) c 2) b 3) b 4) e 5) a 6) a 7) d 8) c 9) b 10) e 11) c 12) d 13) b 14) d 15) a 16) a
17) c 18) b 19) a 20 ) c 21) c 22) a 23) d 24) c 25) b 26) d 27) d 28) b 29) a 30) c 31) d

BANKING AWARENESS PRACTICE MCQs FOR SBI SPECIAL MANAGEMENT EXEXUTIVES EXAM

1. At present, Which of the following bank's largest share-holding (82.23%) is still held by Government?
a) Union Bank of India
b) United Bank of India
c) UCO Bank
d) Punjab National Bank
e) None of the above

2. The existing FDI (Foreign Direct Investment) Policy is modified recently. Important features are?
a) Unlisted companies can also raise capital abroad
b) No prior permission is required to raise capital abroad
c) No permission is also required for subsequent listing in India
d) The above provisions are allowed initially for a period of two years only.
e) All the above

3. At present public sector banks are offering 4% interest on Savings Bank Deposits, whereas Bharatiya Mahila Bank is offering?
a) 4.5% on all the deposits in SB portfolio.
b) 4.25% on all the deposits in SB portfolio
c) 2% excess interest to Mahila Senior Citizens
d) 4.5% on SB balances utto Rs 1.00 lakh and 5% on balances above Rs 1.00 lakh
e) All the above

4. In case of delay in providing credit under RTGS, the beneficiary bank has to pay compensation at current __ to the beneficiary customer per day?
a) Repo Rate + 2%
b) Repo Rate
c) Repo Rate + 3%
d) Bank Rate
e) None of the above

5. As per the provision of Companies Act 2013. What is the minimum paid up capital
of a private company?
a) Rs 1.00 lac
b) Rs 2.00 lac
c) Rs 3.00 lac
d) Rs 4.00 lac
e) Rs 1.00 Crore

6. In NEFT Unique transaction Reference (UTR) is a ______ character number?
a) 20
b) 16
c) 26
d) 30
e) 11

7. Which of the following agencies, is empowered to frame rules specifying the period of preservation of records & instruments by a banking company?
a) Reserve Bank of India
b) Central Government
c) Competent court
d) Indian Banks Association
e) None of the above

8. Which of the following orders, the RBI may pass when the affairs of a banking company are detrimental to the interest of public?
a) To call any officer of the Bank to discuss the matter with RBI officials
b) RBI may depute its officer to watch the proceedings at any meeting of the Board of Directors
c) To instruct Banking company to make within specified time the changes in the management
d) None of the above
e) All the above

9. Which of the following state-ments is not correct in connection with interest on loans
& advances?
a) The bank may waives the part or full of interest charged to a borrower
b) The bank has liberty to provide interest free loan to a borrower
c) In case the interest charged by the bank is not inconformity with the rate prescribed by the RBI, the court may disallow such excess interest
d) The bank can charge the interest below the prime lending rate
e) All the above

10. Which of the following is not correct regarding selective credit control?
a) Bank loans extended to speculators to hoard goods will lead to inflation
b) Bank credit to consumers to raise demand for durable consumer goods will also lead to inflation
c) The commodities are selected at random
d) Selective credit controls are used to control inflationary pressure
e) All the above

11. Which of the following guidelines are applicable in connection with shortfall in
lending to priority sector?
a) An equivalent amount of shortfall under agriculture sector should be invested with RIDF
b) Any shortfall in achieving sub-target under SSI sector, an equivalent amount should be invested with SIDBI
c) Interest of RIDF investment is payable at 40%
d) None of the above
e) All the above

12. Which of the following is the description of a Fixed Deposit Receipt?
a) It is a Negotiable Instrument
b) It is a document of Title to Goods
c) It is a transferable Instrument
d) It is a undertaking to indemnity
e) A Not Negotiable and Transferable instrument

13. In a Company, the registration of charges is required for?
a) Loan against FD
b) Lien on Govt. Securities
c) Book Debts
d) Loan against Shares
e) All the above

14. KYC guidelines have been framed on the basis of four core components. Which of the following in not core component?
a) Customer Acceptance Procedure
b) Customer Identification Procedure
c) Monitoring of Transaction
d) Risk Management
e) Management of Operational risk

15. In Flying Club a/c, cheque signed by the Secretary is received after his death. Whether it is payable?
a) It will be paid
b) It should not be dated subse-quent to date of death.
c) Both a & b
d) Cannot be paid
e) Can be Paid at the discretion of Branch Manager

16. In Internet banking, without involving another bank, what can be done?
a) FD can be issued
b) Intimation regarding LC
c) Issue of cheque
d) Customer funds can be transferred
e) None of the above

17. Payment of interest on Savings Bank accounts by Scheduled Commercial Banks
(SCBs) would be calculated on a ______ with effect from April 1, 2010?
a) Minimum balance between 10th and the last date
b) Daily product basis
c) Maximum balance between 10th and the last date
d) No interest payable from 1st April 2010.
e) None of the above

18. Banks print Cheque books having similar particulars. The format of Cheque is
prescribed by which Act?
a) N.I. Act 1881
b) It is a Practice / Customs and Usage
c) Transfer of Property Act
d) Sale of Goods Act
e) None of the above

19. Claim payable under the CGTMSE credit guarantee scheme to a women
entrepreneur whose loan amount in default is Rs. 80 lakh is __ lakh?
a) 40
b) 50
c) 55
d) 60
e)65

20. One of the following is not a characteristic of Cash Credit?
a) There will be series of disbursements and repayments
b) Stock statements are to be submitted periodically
c) Cheque book facility is given
d) Interest is debited to the account periodically
e) All the above

21. Break Even Point indicates the level of a business activity where?
a) The business breaks down
b) All costs are recovered.
c) Projected profits are recovered
d) Fixed costs are recovered
e) None of the above

22. Section 42(1) of RBI Act 1934 deals with which of the following important ratios?
a) Cash Reserve Ratio
b) Statutory Liquidity Ratio
c) Credit Deposit Ratio
d) Debt Equity Ratio
e) None of the above

23. IBPC stands for?
a) Inter Bank Principal code
b) International Bank for Petro Chemicals
c) Inter Bank Participation Certificate
d) Inter Bank Personal clearing
e) None of the above

24. A 3 years Term Deposit Receipt was originally issued in the name A who nominated
'B'. as nominee. Subsequently, B's name was deleted and C's name was added. After
one year B's name is deleted and D's name is added?
a) Accept the request and act accordingly as nomination can be changed any number of times.
b) Not accept the request as change of name is permitted only once.
c) Accept, provided B also gives consent
d) Not accept as RBI directives prohibit such a change
e) Nomination can be changed only twice.

25. Financial assistance for the activity which is not considered indirect finance to
agriculture is?
a) Agro service centre
b) Loans to Electricity Boards
c) Finance to primary agricultural societies
d) Bio gas
e) None of these

ANSWERS:
1. b 2. e 3. d 4. a 5. a 6. b 7. b 8. e 9. b 10. c 11. e 12. e 13. c 14. e 15. c 16. d
17. b 18. b 19. c 20. d 21. b 22. a 23. c 24. a 25. d

BANKING TERMS

RBI – The Reserve Bank of India is the apex bank of the country, which was constituted under the RBI Act, 1934 to regulate the other banks, issue of bank notes and maintenance of reserves with a view to securing the monetary stability in India.

Demand Deposit – A Demand deposit is the one which can be withdrawn at any time, without any notice or penalty; e.g. money deposited in a checking account or savings account in a bank.

Time Deposit – Time deposit is a money deposit at a banking institution that cannot be withdrawn for a certain "term" or period of time. When the term is over it can be withdrawn or it can be held for another term.

Fixed Deposits – FDs are the deposits that are repayable on fixed maturity date along with the principal and agreed interest rate for the period. Banks pay higher interest rates on FDs than the savings bank account.

Recurring Deposits – These are also called cumulative deposits and in recurring deposit accounts, a certain amounts of savings are required to be compulsorily deposited at specific intervals for a specified period.

Savings Account – Savings account is an account generally maintained by retail customers that deposit money (i.e. their savings) and can withdraw them whenever they need. Funds in these accounts are subjected to low rates of interest.

Current Accounts – These accounts are maintained by the corporate clients that may be operated any number of times in a day. There is a maintenance charge for the current accounts for which the holders enjoy facilities of easy handling, overdraft facility etc.

FCNR Accounts – Foreign Currency Non-Resident accounts are the ones that are maintained by the NRIs in foreign currencies like USD, DM, and GBP etc. The account is a term deposit with interest rates linked to the international rates of interest of the respective currencies.

NRE Accounts – Non-Resident External accounts are the ones in which NRIs remit money in any permitted foreign currency and the remittance is converted to Indian rupees for credit to NRE accounts. The accounts can be in the form of current, saving, FDs, recurring deposits. The interest rates and other terms of these accounts are as per the RBI directives.

Cheque Book - A small, bound booklet of cheques. A cheque is a piece of paper produced by your bank with your account number, sort-code and cheque number printed on it. The account number distinguishes your account from other accounts; the sort-code is your bank's special code which distinguishes it from any other bank.

Cheque Clearing - This is the process of getting the money from the cheque-writer's account into the cheque receiver's account.

Clearing Bank - This is a bank that can clear funds between banks. For general purposes, this is any institution which we know of as a bank or as a provider of banking services.

Bounced Cheque - when the bank has not enough funds in the relevant account or the account

holder requests that the cheque is bounced (under exceptional circumstances) then the bank will return the cheque to the account holder.

Credit Rating - This is the rating which an individual (or company) gets from the credit industry. This is obtained by the individual's credit history, the details of which are available from specialist organisations like CRISIL in India.

Credit-Worthiness - This is the judgement of an organization which is assessing whether or not to take a particular individual on as a customer. An individual might be considered credit-worthy by one organisation but not by another. Much depends on whether an organization is involved with high risk customers or not.

Interest - The amount paid or charged on money over time. If you borrow money interest will be charged on the loan. If you invest money, interest will be paid (where appropriate to the investment).

Overdraft - This is when a person has a minus figure in their account. It can be authorized (agreed to in advance or retrospect) or unauthorized (where the bank has not agreed to the overdraft either because the account holder represents too great a risk to lend to in this way or because the account holder has not asked for an overdraft facility).

Payee - The person who receives a payment. This often applies to cheques. If you receive a cheque you are the payee and the person or company who wrote the cheque is the payer.

Payer - The person who makes a payment. This often applies to cheques. If you write a cheque you are the payer and the recipient of the cheque is the payee.

Security for Loans - Where large loans are required the lending institution often needs to have a guarantee that the loan will be paid back. This takes the form of a large item of capital outlay (typically a house) which is owned or partly owned and the amount owned is at least equivalent to the loan required.

Internet Banking - Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by the bank.

Credit Card - A credit card is one of the systems of payments named after the small plastic card issued to users of the system. It is a card entitling its holder to buy goods and services based on the holder's promise to pay for these goods and services.

Debit Card – Debit card allows for direct withdrawal of funds from customers bank accounts. The spending limit is determined by the available balance in the account.

Loan - A loan is a type of debt.  In a loan, the borrower initially receives or borrows an amount of money, called the principal, from the lender, and is obligated to pay back or repay an equal amount of money to the lender at a later time. There are different kinds of loan such as the house loan, auto loan etc.

Bank Rate - This is the rate at which central bank (RBI) lends money to other banks or financial institutions.   If the bank rate goes up, long-term interest rates also tend to move up, and vice-versa.

CRR - Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with RBI. If RBI decides to increase the percent of this, the available amount with the banks comes down. RBI is using this method (increase of CRR rate), to drain out the excessive money from the banks.

SLR - SLR stands for Statutory Liquidity Ratio. This term is used by bankers and indicates the minimum percentage of deposits that the bank has to maintain in form of gold, cash or other approved securities.  Thus, we can say that it is ratio of cash and some other approved to liabilities (deposits). It regulates the credit growth in India.

ATM - An automated teller machine (ATM) is a computerised telecommunications device that provides the clients with access to financial transactions in a public space without the need for a cashier, human clerk or bank teller. On most modern ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe or a plastic smart card with a chip, that contains a unique card number and some security information such as an expiration date or CVV. Authentication is provided by the customer entering a personal identification number (PIN)

REPO RATE: - Under repo transaction the borrower places with the lender certain acceptable securities against funds received and agree to reverse this transaction on a predetermined future date at agreed interest cost. Repo rate is also called (repurchase agreement or repurchase option).

REVERSE REPO RATE:  is the interest rate earned by the bank for lending money tothe RBI in exchange of govt. securities or "lender buys securities with agreement to sell them back at a predetermined rate".

CASH RESERVE RATIO:  specifies the percentage of their total deposits the commercial bank must keep with central bank or RBI. Higher the CRR lower will be the capacity of bank to create credit.

SLR:  known as Statutorily Liquidity Ratio. Each bank is required statutorily maintain a prescribed minimum proportion of its demand and time liabilities in the form of designated liquid asset.

OR

"Every bank has to maintain a percentage of its demand and time liabilities by way of cash, gold etc".

BANK RATE:  is the rate of interest which is charged by RBI on its advances to commercial banks. When reserve bank desires to restrict expansion of credit it raises the bank rate there by making the credit costlier to commercial bank.

OVERDRAFT: It is the loan facility on customer current account at a bank permitting him to overdraw up to a certain agreed limit for a agreed period ,interest is payable only on the amount of loan taken up.

PRIME LENDING RATE: It is the rate at which commercial banks give loan to its prime customers.

General Awareness Practice Questions

1. Recently who received the Mahatma Gandhi International Award for Peace and Reconciliation?
1) Angela Merkel of Germany
2) Ellen Johnson Sirleaf of Liberia
3) Brigalia Bam of South Africa
4) Azim Premji of India
5) None of above

2. Loans to poor people by banks have many limitations including lack of security and high operating cost. So to help them which type of finance system developed?
1) Ponzi schemes
2) Micro Finance System
3) Money Laundering Schemes
4) Money tampering finance
5) Super vision Finance

3. The following statements are related to Micro Finance system. Locate the wrong option.
1) It provides micro credit having scope for small savings and remittance of funds
2) It based on the principle of livelihood creation
3) The livelihood mission means engaging in activities in a routine fashion to generate cash or non-cash income
4) High volumes of low transactions done through this system
5) None

4. Who introduced the concept of Microfinance in Bangladesh in the form of the "Grameen Bank"? He is the Nobel laureate known by many as the "father of microfinance systems''.
1) C.D.Deshmuck
2) Amartya Sen
3) Muhammad Yunus
 4) Sheik Hassena
5) Muzibaer Rehman

5. The beneficiaries of Micro finance business is?
1) Land less labour
2) Marginal farmers
3) Vendors in the small markets
4) Hawkers
5) All of above

6. Salustiano Sanchez is the?
1) Highest goal maker in SAAF foot ball contest
2) First pilot of C-17 transport aircraft carrier
3) Japan prime minister visiting USA for Arms Reduction Talks
4) World oldest man recently died
5) None

7. The Micro Finance Institutions (MFI) differ from one another in terms of?
1) Product offering
2) Loan repayment structure
3) Product offerings
4) Legal structure
5) All of above

8. Indian Micro Finance Institutes (MFI) usually adopt the group-based lending models, which are of two types, SHG model and JLG model. SHG means Self Help Group and JLG means?
1) Joint Liability Game
2) Josh Liability Group
3) Joint Loan Group
4) Joint Liability Group
5) None

9. To control high rate interest rates, coercive collections and illegal insurance practices by the Micro Finance Institutes, Andhra Pradesh government passed Andhra Pradesh Microfinance Institutions (Regulation of Money Lending) Act in?
1) 2013
2) 2005
3) 2007
4) 2009
5) 2011

10. In the Not-For-profit Micro Finance Institutes, which among the following are included?
1) Societies
2) Public Trusts
3) Non-profit companies
4) All of above
5) None

11. One of the delivery channel for Micro Finance is SHG model. SHG means?
1) Soar Help Group
2) Sake Help Group
3) Self Hope Group
4) Store Help Group
5) Self Help Group

12. Co-operatives registered under state or National Acts and MACS come under Mutual benefit MFIs. MACS means?
1) Moral-Aided Co-operative Societies
2) Mint-Aided Co-operative Societies
3) Mutually-Aided Co-operative Societies
4) Mutually-Aided Co-ordinate Societies
5) None

13. Non-banking financial companies, producer companies and LAB come under the category of For-Profit -MFIs. LAB means?
1) Loan Area Banks
2) Legal Area Banks
3) Local Axis Banks
4) Local Area Banks
5) None

14. SKS Microfinance Ltd, the only listed micro lender in the country founded by?
1) Sudipa Sen
2) M.B.N.Rao
3) Kunal Ghosh
4) Vikram Akula
5) None

15. Who launched an 'India Microfinance Platform', a portal on microfinance activities across the country, with the assistance of World bank funds on 28 June 2013?
1) SBI
2) ICICI
3) SIDBI
4) Exim Bank
5) NABARD

16. SIDBI related statements are given. Pick the wrong statement.
1) SIDBI means Small Industries Development Bank of India
2) It was established on April 2, 1990
3) It is the principal financial institution for the promotion, financing and development of industry in the small scale sector
4) Its head office is in Hyderabad
5) None

17. Chairman of SIDBI is?
1) S.K.Roy
2) T.C.A. Ranganathan
3) Sushil Muhnot
4) U.K.Sinha
5) Rahul Khullar

18. Which committee has recommended creation of a separate category of NBFCs operating in the microfinance sector to be designated as NBFC-MFIs (Non-Banking Finance Company - Micro Finance Institutes)?
1) C. Ranga Rajan
2) Chandra Sekhar
3) Y. H. Malegam
4) Tarapore
5) R.K. Sundaram

19. Recommendations of Malegam committee on Micro Finance Sector do not include ...
1) MFI should not charge more than 24 % of its disbursed loans.
2) Processing fee on the loan amount must not be more than 1%.
3) margin of interest to be not more than 20 percent.
4) MFIs should lend to an individual borrower only as a member of a JLG and should have the responsibility of ensuring that the borrower is not a member of another JLG.
5) Bank advances to MFIs should continue to enjoy 'priority sector lending' status.

20. On 9 October 2013 RBI announced set up a Technical Committee under the chairman ship of ............ to examine the feasibility of encrypted SMS-based fund transfers.
1) Anand Sinha
2) Raghu Ram Rajan
3) Urjith Patel
4) Pandu Ranga
5) Sambamurthy

21. State Bank of India first woman Chair person is?
1) Shubhalakshmi Panse
2) Chanda Kocchar
3) Nainal Lal Kidwai
4) Arundhati Bhattacharya
5) None

22. In order to invite more foreign exchange, the government of India intends to allow the banks to offer ......... as declared on 30 September 2013.
1) overburdened bonds
2) roll chunk bonds
3) euro facilitation bonds
4) quasi-sovereign bonds
5) None

23. Which member of the world bank group launched the Indian rupee denominated bond, may be the first step towards internationalization of the Indian currency?
1) IBRD
2) IDA
3) IFC
4) MIGA
5) IMF

24. On 3 October 2013, CCEA approved the Rashtriya Uchchatar Shiksha Abhiyan (RUSA) for reforming .........
1) Primary education
2) Mid school education
3) Technical education
4) Distance education
5) Higher education

25. Details of current account deficit (CAD) given. Pick the wrong option.
1) CAD of first quarter of 2013-14 registered at 4.9 per cent of GDP.
2) High imports of gold and oil largely led to a worsening of the deficit.
3) 4.4 % CAD registered in the corresponding Q 1 of the previous financial year.
4) By 2014-15, CAD will be reduced to 3.0% as per the statement of FM in the Budget 2013-14.
5) None

26. On 17 September 2013, the Customs Duty on Articles of Jewellery and of Goldsmiths' or Silversmiths' Wares revised from 10 % to ...
1) 36 %
2) 24 %
3) 20%
4) 18%
5) 15%

27. FIU has begun a probe into the transactions of investors and owners of crisis-ridden National Spot Exchange Limited (NSEL). FIU means?
1) Financial Intelligence Unit
2) Financial Insurance Unit
3) First Intelligence Unit
4) Financial Inject Unit
5) None

28. National Spot Exchange Limited promoted by?
1) Rana Kapoor
2) Chanda Kochhar
3) Raja Promod
4) Jignesh Sha
5) None

29. New class of Foreign Portfolio Investor (FPI) regulations given by SEBI on 5 Oct 2013. Locate the wrong option.
1) KYC (Know Your Client) requirements and other registration procedures would be much simpler for FPIs compared to current practices.
2) SEBI grants permanent registration to them compare to current practice of granting approvals for one year or five years.
3) All existing FIIs (Foreign Institutional Investors) their Sub Accounts and QFI (Qualified Foreign Investors) will be eventually merged into this new investor class to be known as FPIs.
4) FPI not allowed from USA.
5) FPIs would be allowed to invest across a host of the capital market segments, including in shares, debentures, warrants, mutual funds, collective investment schemes, derivatives, treasury bills and government securities.

30. Who is the Chairman of Competition Commission of India?
1) K.Subramanyam
2) D.Subba Rao
3) Ashok Chawla
4) U.K.Sinha
5) Yogesh Agarwal

31. Annual Plenary Meetings of IMF and World Bank on 11th and 12th October, 2013 held at ........
1) Washington D.C
2) Rome
3) London
4) Paris
5) Manila

32. 11th India-ASEAN summit began in .......
1) Brunei
2) Indonesia
3) Japan
4) Singapore
5) Philippines

33. Which Indian Batsman was appointed as the brand ambassador of Border Security Force?
1) Sachin Tendulkar
2) Yuvraj Singh
3) Virat Kohli
4) V.V.S.Laxman
5) Sunil Gavaskar

34. Nobel Prize in Literature 2013 conferred on Alice Munro. She belongs to ........
1) Israel
2) Ireland
3) USA
4) Canada
5) UK

35. India and which country decided to observe year 2014 as the year of Friendly Exchanges?
1) Indonesia
2) Pakistan
3) France
4) China
5) Maldives

36. Which Chinese politician has been recently gets life sentence on graft charges?
1) Li Keqiang
2) Xi Jinping
3) Bo Xila
4) Zhang Dejiang
5) None

37. Which party got more seats in Northern Provincial Elections of Sri Lanka?
1) United Progressive Tamil Alliance (UPTA)
2) Liberation of Tamil Tigers Eelam (LTTE)
3) Tamil National Alliance (TNA)
4) United People's Freedom Alliance (UPFA)
5) None

38. Who is the chairman of National Integration Council?
1) Loksabha Speaker
2) Rajyasabha Deputy Chairman
3) Prime Minister
4) Supreme Court Chief Justice
5) None

ANSWERS:
1-3, 2-2, 3-5, 4-3, 5-5, 6-4, 7-5, 8-4, 9-5, 10-4
11-5, 12-3, 13-4, 14-4, 15-3, 16-4, 17-3, 18-3, 19-3, 20-5
21-4, 22-4, 23-3, 24-5, 25-4, 26-5, 27-1, 28-4, 29-4, 30-3
31-1, 32-1, 33-3, 34-4, 35-4, 36-3, 37-3, 38-3

BANKING AWARENESS PRACTICE MCQs

1.    The World Trade Organization (WTO) deals with the global rules of trade between nations. Who is the Director General of WTO?
     a) Roberto Azevedo
     b) Christine Legarde
     c) Raghuram Rajan
     d) Oliver Ralph Kahn
     e) None of the above
 
 2.    RBI on October, 7th 2013, has reduced Marginal Standing Facility(MSF) rate from 9.5% to 9% to improve liquidity in the system. What is MSF?
     a)    MSF rate is the rate at which banks lodge funds overnight with RBI buying approved government securities.
     b)    MSF rate is the rate at which banks borrow funds overnight from other banks against approved government securities.
     c)    MSF rate is the rate at which banks borrow funds overnight from RBI against approved government securities.
     d)    MSF rate is the minimum rate at which banks lend to the borrowers.
     e) None of the above
 
 3.    Between 2007-08 to 2012-13,the value of Card spending rose to Rs.1.97 Lakh Crores. A raise in Cards spending indicates?
     a)    Transformation to 'Cashless Economy'
     b) Low inflation
     c) Raising incomes
     d) Falling prices
     e) None of the above
 
 4.    What is NOT true with regard to 'Carbon Credit'?
     a)    It is a tradable certificate or permit.
     b)    It represents the right of an Industry to emit certain quantity of Carbon Dioxide.
     c)    Carbon Credits mechanism was formalized in Kyoto Protocol.
     d)    Carbon Credits are currently traded on 5 exchanges across the globe.
     e) None of the above.
 
 5.    Arundhati Bhattacharya is in news recently. She is going to be?
     a)    1st woman Deputy Governor of RBI
     b)    1st woman Chair Person of SBI
     c)    1st woman Deputy Chairman of Planning Commission
     d)    1st woman Finance Secretary to Govt. of India
     e) None of the above
 
 6.    National Spot Exchange (NSEL) is the news for defaulting payments to investors. Who is the founder promoter of FT?
     a) Jignesh Shah
     b) Harshad Mehta
     c) Ketan Parekh    
     d) A K Telgi
     e) None of the above
 
 7.    Find the 'odd man out' of the following?
     a) Walmart      
     b) Tesco
     c) Carrefour    
     d) Big Bazar
     e) Ikea
 
 8.    One of the Primary functions of IMF is to provide short term capital assistance to member countries through SDR (Special Drawing Rights). What is NOT true about SDR?
     a) Currency code of SDR is XDR
     b)    SDR is the Unit of Account of IMF
     c)    Asian Development Bank (ADB) also uses SDR as its Currency
     d)    SDR can be exchanged only for US Dollar, British Pound, Euro & Japanese Yen
     e) None of the above
 
 9.    Main functions of Money?
     a) Medium of Exchange
     b) Unit of Account
     c) Store of Value
     d) Only 'a' and 'b' of the above
     e) 'a', 'b' & 'c' of the above
 
 10.    M/s XYZ company has got an order to supply Machinery to M/s ABC Co of Nigeria. Who has to get a Letter of Credit issued from a Bank?
     a)    M/s ABC since they are the importers
     b)    M/s XYZ since they are the exporters
     c)    Both since they are the parties to the agreement
     d)    RBI since they regulate the Foreign Trade in India
     e) None of the above
 
 11.    What is 'Packing Credit'?
     a)    Finance extended to Packing materials industry
     b)    Finance extended to an Importer to pack the goods imported
     c)    Finance extended to Warehouses for keeping the goods packages
     d)    Finance extended to an Exporter to meet the costs of buying and/ or making products to be exported
     e) None of the above
 
 12.    What is NOT true with regard to Currency Chests in India?
     a)    They are managed by different banks on behalf of RBI
     b)    Deposits in Currency Chests are taken into account for calculation of CRR(Cash Reserve Ratio)
     c)    Standard Chartered Bank a Foreign Bank also maintains Currency Chest
     d)    Coins are also stored in Currency Chests
     e) None of the above
 
 13.    Recently Parliament has pass-ed Companies Act 2013. What is NOT true with regard to some of the features of the Act?
     a)    An Individual can set up "One person Private Ltd Company"
     b)    An independent Director can hold 3 consecutive terms of 3 years
     c)    Listed Companies must have at least 1/3rd independent Directors
     d)    Prescribed Companies must have at least 1 woman Director on the Board
     e)    A Private Ltd Company can have a maximum of 200 members
 
 14.    What is 'Net Interest Margin' of a Bank?
     a)    Margin of Interest earned on Trading in Govt Securities
     b)    Difference between the Base Interest Rate and the Average Lending Rate
     c)    Difference between the interest income and the amount of interest paid out
     d)    Difference between Interest on Term Loans and Interest on Cash Credits
     e) None of the above
 
 15.    What is the World's largest functioning Oil Refinery?
     a)    Reliance Refinery in Jamnagar, Gujarat
     b)    IOC Refinery in Digboi, Assam
     c)    HPCL Mumbai Refinery
     d)    Paraguana Refinery, Venezuela
     e)    Exxon Mobil Refinery, Singapore
 
 16.    IIFCL (India Infrastructure Finance Co. Ltd) is wholly-owned Govt. of India Company. Who is selected to take over as the Chairman and Managing Director?
     a) C B Bhave    
     b) S B Nayar
     c) T S Vijayan
     d) Yogesh Agarwal
     e) None of the above
 
 17.    Till 30th June, 1955 State Bank of India(SBI) was known as?
     a) State Bank of British India
     b) Imperial Bank of India
     c) India Central Bank
     d) Central Bank of British India
     e) None of the above
 
 18. Where is the Asian Development Bank(ADB) located?
     a) Mumbai, India
     b) Hiroshima, Japan
     c) Shanghai, China
     d) Manila, Philippines
     e) Jakarta, Indonesia
 
 19.    Structured Financial Messa-ging System (SFMS) is a secure messaging standard developed to serve as a platform for intra-bank and inter-bank applications in India. Which of the following have interface with SFMS?
     a)    RTGS(Real Time Gross Settlement)
     b)    Negotiated Dealing System (NDS)
     c)    Security Settlement System (SSS)
     d) 'a' and 'c' of the above
     e) 'a', 'b' & 'c' of the above
 
 20.    Which Country is the largest producer of Tea in the world?
     a) India    
     b) Brazil
     c) Peoples Republic of China
     d) Srilanka    
     e) None of the above
 
 21.    Who is the CEO & MD of TCS(Tata Consultancy Servi-ces)?
     a) Cyrus Mistry    
     b) S Ramdorai
     c) N Chandrasekharan
     d) Ratan Tata        
     e) None of the above
 
 22.    Qualitative Credit Contro is one of the methods used by RBI to control credit. Which of the following is NOT a Qualitative Credit Control tool?
     a) Moral Suasion
     b) Marginal Requirement
     c) Rationing of Credit
     d) Bank Rate
     e) 'a' & 'd' of the above
 
 23.    Who is the Chairperson of 14th Finance Commission?
     a) Dr Yaga Venugopal Reddy
     b) Dr Vijay L Kelkar
     c) Dr C Rangarajan
     d) Dr Duvvuri Subbarao    
     e) None of the above
 
 24.    The 12th Five Year Plan (2012-17) is approved by Union Cabinet on 4th October, 2012. The aims of the plan are?
     a) 8% average growth rate
     b) Reduce Poverty by 10% during the Plan
     c) Faster, Sustainable and More inclusive Growth
     d) All the 3 above
     e) None of the above
 
 25.    Which State is the largest producer of Cotton in India in the year 2012-13?
     a) Gujarat
     b) Maharashtra
     c) Andhra Pradesh
     d) Karnataka    
     e) Madhyapradesh
 
 26.    Who sets up the Bench Mark Interest Rate for Germany?
     a) German Central Bank
     b) Deutsche Bundes Bank
     c) European Central Bank(ECB)
     d) Deutsche Bank
     e) None of the above
 
 27.    What is India's Apex Tax body?
     a) CBDT    
     b) GAAR
     c) IT Department
     d) RBI    
    e) None of the above
 
 28.    FICCI is an Association of Business Organizations in India.  Who is the President of FICCI?
     a) Shikha Sharma
     b) Usha Thorat
     c) Naina Lal Kidwai
     d) Indra Nooyi
     e) None of the above
 
 29.    Banks in India are governed by BR Act 1949.  What does  'BR' stands for?
     a) Banks Registration
     b) Banking Re-organization
     c) Banking Regulation
     d) Banking Rights    
     e) None of the above
 
 30.    In India, Scheduled Commercial Banks are those Banks included?
     a)    In the 2nd Schedule of RBI Act 1934
     b)    In the 2nd Schedule of BR Act 1949
     c)    In the 2nd Schedule of NI Act 1881
     d)    In the 2nd Schedule of Companies Act 1956
     e) None of the above
 
 
 Answers:
 1.a         2.c      3.a       4.e      5.b      6.a     7.d       8.e      9.e    10.a
 11.d    12.e    13.b    14. c    15.a   16.b    17.b    18.d    19.e    20.c
 21.c    22.c    23.a    24.d    25.a     26.c    27.a    28.c    29.c    30.a