BANKING AWARENESS PRACTICE MCQs FOR IBPS CLERKS EXAM

1. An account that can be opened by business organisations and also individuals is known as a?
a) Term deposit
b) Checking Account
c) Saving Bank Account
d) No Frills Accounts
e) Current Account

2. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as?
a) CHAPS
b) SWIFT
c) NEFT
d) SFMS
e) CHIPS

3. Buy now & pay later refers to?
a) Foreign Currency
b) Internet Banking
c) US Dollars
d) Travelers' cheques
e) Credit Cards

4. Which one of the following is not 'Money Market Instrument'?
a) Treasury Bills
b) Commercial Paper
c) Fixed Deposit
d) Equity Shares
e) None

5. Which one of the following is a retail banking product?
a) Home Loans
b) Working capital finance
c) Corporate term Loans
d) All the above
e) None

6. Finance Ministry has asked the Reserve Bank of India to allow common ATM's that will be owned and managed by non-banking entities hoping to cut transaction costs for banks. Such ATM's are known as?
a) Black label ATM's
b) Offsite ATM's
c) On site ATM's or red ATM's
d) Third party ATM's
e) White label ATM's

7. Technological Advancement in the recent times has given a new dimension to banks, mainly to which one of the following aspects?
a) New Age Financial Derivatives
b) Service Delivery Mechanism
c) Any Banking
d) Any type banking
e) Multilevel Marketing

8. Which of the following is NOT a function of the Reserve Bank of India?
a) Fiscal Policy Functions
b) Exchange Control Functions
c) Issuance, Exchange and Destruction of currency notes
d) Monetary Authority Functions
e) Supervisory and Control Functions

9. Which of the following is NOT required for opening a bank account?
a) Identity Proof
b) Address Proof
c) Recent Photographs
d) Domicile Certificate
e) None

10. What is the maximum deposit amount insured by DICGC?
a) Rs. 2, 00,000 per depositor per bank
b) Rs. 2,00,000 per depositor across all banks
c) Rs. 1, 00,000 per depositor per bank
d) Rs. 1,00,000 per depositor across all bank
e) None

11. The present Foreign Trade policy of India will continue till?
a) Dec 2012
b) Mar 2013
c) Mar 2014
d) Jun 2013
e) Dec 2014

12. With reference to a cheque who is drawee?
a) The bank that collects cheque.
b) The payee's bank.
c) The endorsee's bank.
d) The endorser's bank.
e) The bank upon which the cheque is drawn.

13. In which of the following fund transfer mechanisms, funds can be moved from one bank to another and where the transaction is settled instantly without being bunched with any other transaction?
a) RTGS
b) NEFT
c) TT
d) EFT
e) MT

14. Banking Ombudsman Scheme is applicable to the business of ?
a) All Scheduled commercial banks excluding RRBs.
b) All Scheduled commercial banks including RRBs.
c) Only Public Sector Banks
d) All Banking Companies
e) All schedule banks except private banks.

15. Nationalization of banks aimed at all of the following except?
a) Provision of adequate credit for agriculture, SME & exports.
b) Removal of control by a few capitalists.
c) Provision of credit to big industries only.
d) Access of banking to masses.
e) Encouragement of a new class of entrepreneurs.

16. Which of the following banks is headed by a Woman CEO?
a) Bank of Baroda
b) HDFC Bank
c) Central Bank of India
d) PNB
e) ICICI

17. Base Rate is the rate below which no Bank can allow their lending to anyone. Who
sets up this 'Base Rate' for Banks?
a) Individuals Banks Board
b) Ministry of Commerce
c) Ministry of Finance
d) RBI
e) Interest Rate Commission of India

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

19. Bad advances of a Bank are called?
a) Standard accounts
b) Book debt
c) Non Performing Asset
d) Out of order account
e) Overdrawn accounts

20. Axis Bank is a?
a) Public Sector Bank
b) Private Sector Bank
c) Co-operative Bank
d) Foreign Bank
e) Gramin Bank

21. By increasing repo rate, the economy may observe the following effects ______
a) Rate of interest on loans and advances will be costlier.
b) Industrial output would be affected to an extent.
c) Banks will increase rate of interest on deposits.
d) Industry houses may borrow money from foreign countries.
e) All of these.

22. Increased interest rates, as is existing in the economy at present will_______
a) Lead to reduction in borrowings
b) Lead to lower GDP growth.
c) Mean higher cost of raw materials.
d) Mean lower cost of raw materials.
e) Mean higher wage bill.

23. Which of the following schemes is launched to provide pension to people in
unorganized sectors in India?
a) Swabhiman
b) Jeevan Dhara
c) Jeevan Kalyan
d) ASHA
e) Swalamban

24. A cheque returned for insufficiency of funds. Payee will have right to notice and
approach court of law for justice under section 138 of which act?
a) Indian Penal Code
b) Negotiable Instrument Act
c) Criminal Procedure Code
d) Payment and Settlement Act
e) Indian Contract Act

25. Mr. Rajendra had filled a complaint with Banking Ombudsman but is not satisfied
with the decision. What is the next option before him for getting his matter resolved?
a) Write to the CMD of the Bank.
b) File an appeal before the Finance Minister.
c) File an appeal before the Banking Ombudsman again.
d) File an appeal before the Dy. Governor RBI.
e) Simply close the matter as going to court involves time and money.

26. Which of the following is an example of Financial assets?
a) National Saving Certificate
b) Infrastructure Bonds
c) Indira Vikas Patra
d) Krishi Vikas Patra
e) All of these

27. Bank branches which can undertake foreign exchange business directly are known as:
a) Authorized dealers
b) Foreign dealers
c) Overseas branches
d) Approved dealers
e) Exchange branches

28. Insurance cover for bank deposits in our country is provided by ____
a) SBI
b) Govt of India
c) GIC
d) LIC
e) DICGC

29. The Financial Literacy does not include which of the following?
a) How to invest the funds
b)How to use the limited funds carefully
c) How to minimize the risks
d) How to reinvest the money earned
e) None of these

30. 'ADB' Refers to
a) Amedical Development Bank
b) Amedical depository Bureau
c) Additional Debit Balance
d) Only a&b
e) Asian Development bank

31. When a banker talks about CDR, what is he talking about?
a) Corporate Debt Restructuring
b) Corporate Debt Rollover
c) Company Debt Rollover
d) Corporate Deposit Restructuring
e) Company Deposit Restructuring

32. Expand the term ALM as used in Banking/Finance sector?
a) Asset Liability Management
b) Asset Liability Maturity
c) Asset Liability Mismatch
d) Asset Liability Manpower
e) Asset Liability Maintenance

33. Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are terms most
closely related to which of the following industries/ markets?
a) Capital Market
b) Banking industry
c) Commodities market
d) Money Market
e) Mutual fund

34. What is the maximum period for which domestic term deposits are normally
accepted by the banks in our country?
a) 3 yr
b) 5 yr
c) 7 yr
d) 10 yr
e) 12 yr

35. If you wish to purchase some US Dollars for your travel abroad, you should approach?
a) The ministry of finance
b) The US Embassy
c) Any Bank Branch authorized to do such activity
d) The Reserve Bank of India
e) External Affairs Ministry

36. What does the letter 'L' stands for in the term LAF commonly used in financial/economic news?
a) Liquidity
b) Least
c) Liabilities
d) Long
e) Liquid

37. Which of the following is not classified as a Commercial Bank?
a) Public Sector Bank
b) Foreign Bank
c) Private Sector Bank
d) Regional Rural Bank
e) Urban Cooperative Bank

38. Which of the following is not the name of the a Banking Organization?
a) HDFC
b) IDBI
c) YES
d) SEBI
e) ICICI

39. Money laundering means _____
a) Hiding of income source mainly to avoid income tax
b) Money acquired from undisclosed sources and deposited in foreign banks
c) Money acquired from undisclosed sources and deposited in foreign banks
d) Process of conversion of money obtained illegally to appear to have originated from legitimate sources to convert black money into white money.
e) Money acquired from drug trafficking

40. Monetary Policy as an arm of the economic policy is administered by _____
a) Government of India
b) RBI
c) SBI
d) Govt of the respective states
e) None


ANSWERS:
1) a; 2) b; 3) e; 4) c; 5) a; 6) e; 7) b; 8) a; 9) d; 10) c;
11) c; 12) e; 13) a; 14) b; 15) c; 16)e. 17) a 18) c; 19) a; 20) b;
21) a; 22) c; 23) e; 24)b; 25) d; 26) a; 27) a; 28) e; 29) e; 30) e;
31) a; 32)a; 33) b; 34) d; 35) c; 36) a. 37) e; 38) d; 39) d; 40)b;

Reserve Bank of India

After independence to India, RBI was nationalized on 1st January, 1949.

★ Banking Regulation Act 1949 empowered RBI and gave full-fledged functions of a central bank and as a banking and financial regulatory authority of India. By this RBI has authority to license and control banks, audit them, inspect, regulate and monitor.

RBI functions with certain objectives such as....
★ To maintain monetary stability.
★ To maintain financial stability and ensure sound financial institutions.
★ To maintain stable payment systems.
★ To ensure credit allocation by the financial system.
★ To regulate the overall volume of money and credit in the economy.
★ To promote the development of financial markets.
★ To educate and convert the general public to use organized financial and banking sector.

Some Important Functions of RBI:
★ Monitoring monetary policy by taking operate decision with the help of some direct and indirect tools like Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR), and Refinance facilities. These are direct tools.
★ A few indirect tools: RBI also uses some indirect tools like Liquidity Adjustment Facility (LAF), Repo / Reverse Repo Rate, Open Market Operations (OMO), Marginal Standing Facility (MSF), Bank Rate, and Market Stabilisation Scheme (MSS).
★ RBI prints currency notes with the help of its subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)', 'The Bharatiya Reserve Bank Note Mudran Pvt. Ltd. (BRBNMPL)'.
★ On behalf of Government of India RBI mints rupee coin with the help subsidiaries, 'The Security Printing and Minting Corporation of India Limited (SPMCIL)' which are known as mints which comes under Coinage Act, 1906.
★ RBI acts as Banker and Debt Manager to Government. It maintain accounts and banking transactions of central government, it receive funds and make payments and transfer funds on behalf of government and also known as Banker to Banks.
★ RBI is the Regulator of the Indian Banking Services and System, it regulates through
licensing banks, formulation of certain rules etc.,. It also known as Manager of foreign exchange and foreign reserves in India by appointing authorized dealers for exchanging foreign currency. Development of foreign currency reserves like Foreign Currency Assets (FCA), Special Drawing Rights (SDRs) and gold etc.,. The act that helps RBI to manage foreign exchange transactions is Foreign Exchange Management Act (FEMA) 1999.
★ RBI is Regulator and Supervisor of the Payment and Settlement Systems in India. All the clearing and settlements activities are done through different means and established different schemes and services like National Payments Corporation of India (NPCI), The Real Time Gross
Settlement (RTGS), Electronic Funds Transfer (EFT), National Electronic Clearing Service (NECS), Electronic Clearing Service (ECS), Cheque Truncation System (CTS) etc.

Reserve Bank of India Practice Questions for all Bank Exams

1. How many deputy governors does RBI have?
a) One
b) Two
c) Three
d) Four
e) None

2. Who appoints the deputy governors of RBI?
a) RBI Governor
b) Union Government of India
c) President of India
d) Board of directors of RBI
e) None

3. RBI is directly controlled by .......
a) Public
b) All banks in India
c) Central board of directors of RBI
d) Union Government of India
e) None of these

4. How many members will be there in RBI central board of directors?
a) 15
b) 5
c) 21
d) 25
e) 272

5. RBI is formed under which act .......
a) RBI act 1935
b) RBI act 1934
c) Banking regulation act 1949
d) Indian Penal Code (IPC) 1947
e) None of these

6. Institutions, that are appearing in the second schedule of the RBI act 1934 are called as .......
a) Scheduled banks
b) Only commercial banks
c) Non Banking Financial Institutions (NBFC)
d) Both a and c
e) None of these

7. ....... acts as fundamentals to the nation's financial system.
a) RBI
b) Central Government
c) Banks
d) Central Bank
e) None of these

8. Regional Rural Banks are supervised by .......
a) NABARD
b) RBI
c) State Government
d) Central Government
e) None of these

9. Identify the RBI Owned Subsidiaries .......
a) National Housing Bank (NHB).
b) Bharatiya Reserve Bank Note Mudran Pvt Ltd (BRBNMPL).
c) Deposit Insurance and Credit Guarantee Corporation (DICGC).
d) National Bank for Agriculture and Rural Development (NABARD).
e) All of these

10. RBI's quasi judicial authority for solving disputes between banks and their customer is known as .......
a) Banking codes and standards board of India.
b)Customer services and dispute redressal cell.
c) Banking ombudsman
d) Judgments on disputes and services authority
e) None of these

11. FEMA 1999 stands for .......
a) Financial Exchange Management Act 1999
b) Foreign Exchange Management Act 1999
c) Foreign Economy Management Act 1999
d) Foreign External Management Act 1999
e) None of these

12. Primary activities of RBI are .......
a) Managing foreign exchanges
b) Issuing currency notes
c) Maintaining financial stability
d) Regulating banking system in India
e) All of these

13. Maintaining cash balance with RBI as a share of demand and time liabilities of bank is known as .......
a) CRR
b) SLR
c) LAF
d) MSF
e) None of these

14. Identify RBI Regulatory role from following.......
a) Licensing
b) Monitoring governance
c) Regulating interest rates in specific areas
d) Prescribing capital requirements
e) All the above

15. What are the principles that guide RBI in investing its foreign assets?
a) Safety and liquidity
b) Safety and returns
c) Liquidity and returns
d) Safety, liquidity and returns
e) None

16. Larger value settlement of inter-bank transactions from financial markets is done through .......
a) Real time gross settlement
b) Internal payment and settlement
c) RBI payment system
d) National Electronic Funds Transfer
e) All the above

17. National Bank for Agriculture and Rural Development is established for .......
a) Promoting mutual funds in the country
b) Promoting and regulating housing finance in rural areas
c) Promoting rural and agricultural credit
d) Regulating agriculture in rural areas
e) None of these

18. Cash reserves consists of .......
a) Cash
b) Money market instruments
c) Treasury bills
d) All the above
e) Only a and c

19. Main instruments available to Central Banks to control prime rates of leading banks .......
a) Repo rates
b) Reverse repo rate
c) Cash Reserve Ratio
d) Statutory Liquidity Ratio
e) All the above

20. Acceptance of deposits from the public for the purpose of lending and investment is the main activity of .......
a) Commercial banks
b) Financial institutions
c) Primary dealers
d) Non banking financial companies
e) All the above

21. Banks which are controlled by NABARD and State Government are?
a) Urban cooperative banks
b) Rural cooperative banks
c) Commercial banks
d) Non-banking financial companies
e) None of these

22. RBI's facility of repurchase of securities is known as .......
a) REPO Rate
b) Reverse REPO rate
c) Treasury bills
d) Security rate
e) None of these

23. For efficient and effective payment and settlement system RBI must undertake following activity .......
a) Maintain of clearing houses at various centers.
b) Creation of currency holding chests in different areas.
c) Creation of the mechanism for electronic fund transfer.
d) All the above
e) None of these

24. RBI's regulatory and supervisory policy initiatives are aimed at .......
a) Protection of the depositors' interests
b) Orderly development of banking services
c) Conduct of banking operations
d) Liquidity and solvency of banks
e) All the above

25. Name the publicity campaigns by RBI on security features of rupee currency note are display on poster at bank branches?
a) Know Your Bank note
b) Know Your Money
c) Know Your Currency (KYC)
d) Currency Note Education
e) None

26. External commercial borrowings are such as .......
a) Commercial-bank loan
b) Buyers' credit
c) Securitized instruments
d) Suppliers' credit
e) All the above

27. Who all cannot open account with RBI?
a) Schedule banks
b) Non-schedule banks
c) General public
d) Union Government of India
e) Both b and c

28. Whose signature appears on Indian Rs. 100 note?
a) Finance Minister
b) RBI Governor
c) Finance Secretary
d) Chairman, Planning Commission
e) None

29. While discussing investments there is a mention of short term government security.
What is this investment?
a) Debenture
b) Mutual funds
c) Treasury bill
d) Share
e) None of these

30. Which of the following organisations/agencies is not associated with the world of Banking and Finance?
a) SEBI
b) AMFI
c) RBI
d) ECGC
e) SPCA

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

BANKING AWARENESS PRACTICE MCQs FOR BANK EXAMS

1. The basic functions of the bank are?
a) Acceptance of Deposits from the public.
b) Lending or investing the funds so collected from the customers.
c) Lending to customers
d) (a) + (b)
e) (a) + (c)

2. Functions of Banks are governed by?
a) Indian Contract Act
b) FEMA
c) Traditions in India
d) Banking Regulation Act
e) Indian Trust Act

3. Electronic banking has opened new banking channels like?
a) Internet banking
b) Telephone banking
c) Branch Banking
d) ATM banking
e) (a)+(b)+(d)

4. Illiterate Persons are allowed to open?
a) Current account
b) Savings account
c) only savings account (without cheque facility) or fixed deposit account
d) Any type of account
e) Not allowed to open bank account

5. The effect of a valid nomination is that?
a) on death of the sole depositor /all depositors, the amount will be returned to the nominee after further legal formality.
b) on death of the sole depositor, the amount will be returned to the nominee
c) on death of the sole depositor / all depositors, the amount will be returned to the nominee without any further legal formality.
d) None
e) (a) + (b) + (c)

6. Fixed deposits cannot be
a) Renewed for a further period on maturity date
b) Transferred to third parties
c) Pre-paid before the maturity date
d) Only a&c
e) Any of the above

7. Minimum period of fixed deposit is ---- days and maximum period for which a bank can accept a deposit presently is ---- years?
a) 10 - 10
b) 7 -10
c) 7-20
d) Any period
e) 1 - 10

8. Flexi deposits means?
a) Floating Rate of Interest deposits
b) Fixed deposits
c) Hybrid deposits
d) Call Deposit
e) None of these

9. When the bank lends money to the customer, the relationship, of the customer and banker is -
a) Creditor and Debtor,
b) Debtor and Creditor
c) Principle - Agent
d) Either a or b
e) None of these

10. Debt refers to?
a) Outstanding Loan Balance
b) Present and future dues from customer of any nature say locker rent
c) a sum of money owed by one person or entity(debtor) to an-other person or entity (creditor)
d) a sum of money owed by one person or entity (Creditor) to another person or entity (Debtor) e) None

11. Know Your Customer(KYC) guidelines expect banks to?
a) know the educational details of the customer
b) know the family details of the customer
c) know the locational details of the customer
d) know the financial details of the customer
e) None

12. The Smart Card?
a) appears very smart
b) contains an IC Chip
c) issued to smart account holders
d) issued to account holders having balance in lakhs
e) None of these

13. The first Indian bank to open a branch outside India, in London in 1946 is?
a) SBI
b) PNB
c) BOB
d) Canara Bank
e) BOI

14. Coins are minted at ?
a) Mumbai
b) Hyderabad
c) Noida
d) Kolkatta
e) All of these

15. Which of the following is not a function of commercial bank?
a) Providing project finance
b) Selling mutual funds
c) Deciding policy rates like CRR, Repo rates/SLR etc.
d) Settlement of payments on behalf of the customers
e) Providing services such as locker facilities, remittances etc..

16. The New Capital Adequacy Frame work prescribed for the banks is commonly known as?
a) KYC norms
b) Credit Policy
c) Basel accord
d) Fiscal Policy
e) None of these

17. Expand the term FRBM?
a) Financial Responsibility and Business management
b) Fiscal Responsibility and Business management
c) Financial Responsibility and Budget Management
d) Fiscal Responsibility and Budget Management
e) Formal Responsibility and Business Management

18. What is an Indian Depository Receipt?
a) A deposit account with a Public Sector Bank
b) A depository account with any of depositories
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

19. Land Development Banks form a part of the?
a) Commercial Banks
b) Industrial Development Bank of India
c) Food Corporation of India
d) Cooperative Credit Structure
e) None of these

20. Which of the following cannot be called as a value Added Service offered by bank?
a) Special Accounts for poor sections of society
b) Accident Insurance Cover
c) Instant credit of outstations cheques
d) free cheque books
e) All of these

21. The minimum number of women required for formation of women groups under Development of women and children in Rural Areas Programme is?
a) 20
b) 15
c) 10
d) 05
e) None of these

22. What is the full form of 'FINO', a term we see frequently in financial newspapers?
a) Financial Investment Network and Operations
b) Farmer's Investment in National Organization
c) Farmers Inclusion News and Operations
d) Financial Inclusion Network and Operations
e) None of these

23. With an aim to provide better services to the debit card holders, the Reserve Bank of
India (RBI) has directed all commercial and public sector banks to introduce new
Automated Teller Machines (ATM) that can deliver lower denomination notes such as?
a) Rs 10
b) 20
c) 50
d) None of the above
e) All the above

24. Which of the following banks is limited to the needs of agriculture and rural finance?
a) RBI
b) SBI
c) IFC
d) NABARD
e) Axis Bank

25. Open-market operations of Reserve Bank of India refer to?
a) Trading in securities
b) Auctioning
c) Transaction in gold
d) All of these
e) None of these

26. Which of the following has introduced a new tool named Data Warehousing and Business Intelligence System for speedy analysis of data and identification of violations?
a) IRDA
b) SBI
c) RBI
d) TRAI
e) None of these

27. The Reserve Bank hiked the limit for foreign investment in Asset Reconstruction Companies (ARCs) from the earlier cap of 49 per cent to?
a) 74 %
b) 47 %
c) 57 %
d) 72 %
e) None of these

28. Which of the following is NOT 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 Cooperative Banks

29. Who is the chairman of the committee constituted by RBI to study issues and concerns in the Micro Finance Institutions sector?
a) Y.H. Malegam
b) Dr K.C.Chakraborty
c) C.Rangarajan
d) M.Damodaran
e) Smt Usha Thorat

30. An instrument of qualitative credit control in India is?
a) Open market operations
b) Credit rationing
c) Change in reverse ratio
d) Bank rate policy
e) None of these

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

BANKING AWARENESS PRACTICE QUESTIONS FOR ALL BANK EXAMINATIONS

1. Who among the following Deputy Governors of RBI retired in January 2014?
a) K.C.Chakrabarthy
b) Urjit Patel
c) Anand Sinha
d) HR Khan
e) None of the above

2. A company wants to payout dividend. Which type of electronic method shall it use?
a) ECS (credit)
b) ECS(debit)
c) Either a or b
d) Issue of DD
e) Issue of Banker Cheque/pay order

3. On what basis interest is charged in loan accounts?
a) Quarterly
b) Half yearly
c) Monthly
d) Weekly
e) Daily basis

4. Crossing of Bill of Exchange?
a) Is allowed under Negotiable Instrument Act 1881
b) Banking Regulation Act 1949
c) RBI Act 1934
d) A bill cannot be crossed
e) None of the above

5. GAAS stands for?
a) Generally Accepted Accounting Standards
b) Generally Agreed Accounting Standards
c) Generally Advised Accounting Standards
d) Generally Allowed Accounting Standards
e) None of the above

6. Who is being assigned the duty of regulating the Micro Finance Institutions?
a) IDBI
b) SIDBI
c) SISI
d) NABARD
e) NSIC

7. Can a bank can sell its NPAs?
a) No, since nobody will purchase the NPA
b) Yes, provided it has remained as NPA in the books of the selling bank for 2 years
c) Yes, if the banks profits are more than Rs. 1000crores
d) Only a and c
e) None of the above

8. Which of the following private banks are permitted by RBI to import gold?
a) By HDFC Bank
b) Axis Bank and Kotak Mahindra Bank
c) Indus Ind Bank and
d) YES Bank
e) All the above

9. Which bank has become the first to allow withdrawal of funds to individuals from
its ATMs without an account in the bank?
a) Andhra Bank
b) Central Bank
c) Bank of India
d) Dena Bank
e) None of the above

10. Which of the following banks is selling, for the first time, a large amount of NPAs (around Rs. 5000cr) to ARCs (Asset Reconstruction Company) during this March 2014 Quarter?
a) State Bank of Hyderabad
b) State Bank of India
c) Punjab National Bank
d) ICICI Bank
e) None of the above

11. Non Banking Finance Companies like Muthoot Finance will issue NCDs to mobilize financial resources like the banks do by accepting deposits from the public. NCD Stands for?
a) National Certificate of Deposit
b) Non Cash Deposit
c) Non Convertible Debentures
d) Non Convertible Certificate of Deposits
e) None of the above

12. National Bank for Agriculture and Rural Development (NABARD) established on
12.07.1982 under a special act of parliament has its Head Office at?
a) Ahmadabad
b) Bangalore
c) Chennai
d) Delhi
e) Mumbai

13. Name the organization which is taking care of Coordinating the activities of institutions
engaged in financing, promoting and developing industry in India?
a) SIDBI
b) IDBI
c) ICICI
d) EXIM BANK
e) None of the above

14. AMC is a term used in connection with Mutual Funds, which is meant for Management
of different Funds. In this connection AMC stands for?
a) Annual Maintenance Contract
b) Asset Management Commission
c) Adjusted Mutual Commission
d) Asset Management Company
e) None of the above

15. Which of the following is an ancillary/secondary function of a Bank?
a) Accepting SB Deposits
b) Accepting Fixed Deposits
c) Sanction of loans
d) Collection of cheques
e) None of the above

16. Functions of banks are divided into Primary and Secondary. Which of the following
is a Primary Function of a Bank?
a) Issue of Demand Draft
b) Provision of locker facility
c) Provision of Safe Custody facilities
d) Sanction of Loans
e) None of the above

17. Which of the following banks is not having their Headquarters in Kolkata?
a) Allahabad Bank
b) Dena Bank
c) UCO Bank
d) United Bank of India
e) All the above

18. Who among the following important personalities have worked as Governor of RBI?
a) Dr BR Ambedkar
b) M.Narasimhan
c) Urjit patel
d) Dr .Manmohan Singh
e) b & d

19. For how much period the Marginal Standing Facility (MSF) is provided by RBI
against approved Government Securities ?
a) One Quarter only
b) Two quarters only
c) One Month only
d) Overnight only
e) None of the above

20. Headquarters of Oriental Bank of Commerce is located at?
a) Allahabad
b) Bangalore
c) Kolkata
d) New Delhi
e) Hyderabad

21. RBI Coin mints are located at?
a) Mumbai
b) Hyderabad
c) Kolkata
d) Noida
e) All the above

22. Which of the following is a private bank in India?
a) Oriental Bank of Commerce
b) Corporation Bank
c) South Indian Bank
d) Syndicate Bank
e) Bank of Maharashtra

23. Interest rate risk is a type of?
a) Credit risk
b) Market Risk
c) Operational risk
d) All the above
e) None of these

24. Which one of the following has launched guidebook on standards for exporters?
a) RBI
b) SEBI
c) IBA
d) UNIDO
e) UNESCO

25. The Bank of Calcutta, Bank of Bombay and Bank of Madras were merged in 1921
to form?
a) Reserve Bank of India
b) Imperial Bank of India
c) Bank of India
d) Union Bank of India
e) None of these

26. Which sister organization of the World Bank helps private activity in developing countries by financing projects with long-term capital in the form of equity and loans?
a) Asian Development Bank
b) IMF
c) International Developmental Association
d) International Finance Corporation
e) None of these

27. What does devaluation of a currency mean?
a) Decrease in the internal value of money
b) Decrease in the external value of money
c) Decrease both in the external and internal values of money
d) Increase both in the external and internal values of money
e) None of these

28. An IPO is?
a) Initial Price Offered by private limited company to its share holders.
b) An offer by an unlisted company for sale of its shares for the first time to the public.
c) Used to increase the share capital of an unlisted company
d) A book building process
e) None of these

29. SEBI has imposed a restriction on money flow in equity through P-notes. What is
the full form of P-notes?
a) Permanent notes
b) Purchase notes
c) Participatory notes
d) Private notes
e) None of these

30. Which is of the following programme is launched to improve the irrigation facilities
in Rural India?
a) National Watershed Development Programme
b) National Social Assistance Programme
c) Construction of Rural Godowns
d) Annapurna Scheme
e) None of the above

31. Investment Fluctuation Reserve (IFR) is created to manage?
a) Interest Rate Risk
b) CRR
c) SLR
d) Foreign Currency Account
e) None of the above

32. There are several credit rating agencies like CRISIL, CARE, SMERA, FITCH Rating. Similary ICRA is also a rating agency. ICRA Stands for?
a) Investment Information and Credit rating Agency
b) Indian Credit Rating Agency
c) International Credit Rating Agency
d) Information and Credit Rating Agency
e) None of these

33. In case of dishonor of a cheque due to insufficient of funds in the account of the person drawing the cheque, a court can punish the guilty with an imprisonment term of two years and a fine of?
a) Twice the amount of cheque
b) Thrice the amount of cheque
c) Four times the amount of cheque
d) Five times the amount of cheque
e) None of the above

34. When the Bank returns a cheque unpaid, it is called?
a) Payment of Cheque
b) Dishonor of Cheque
c) Cancelling of Cheque
d) Drawing of Cheque
e) None of these

35. Which among the following is approved modes for maintenance of the cash reserve ratio?
a) In the form of balance in currency chest of the currency chest bank branches
b) In the form of cash balances maintained by various branches of the banks
c) In the form of balances with other banks maintained by bank branches
d) In the form of balances in a special account with RBI opened for this purpose
e) None of these

36. No margin is required to bring in by the borrower for the educational loans to
special courses up to?
a) Rs 2.00 lacs
b) Rs 3.00 lacs
c) Rs 5.00 lacs
d) Rs 4.00 lacs
e) None of the above

37. When bank receives a Cheque from customer for clearing/ collection, bank affix
bank's crossing stamp. This is done to ensure
a)Prevention of fraud
b) Requirement of NI Act
c) Cheque will become payable to our bank only
d) None of the above
e) All the above

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

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.