BANKING AWARENESS PRACTICE QUESTIONS FOR IBPS CLERKS EXAM

1. World Trade Organization's (WTO) 9th Ministerial Conference is to be held in December, 2013. Where is it to be held?
a) Bali, Indonesia
b) Cancun, Mexico
c) Geneva, Switzerland
d) Hongkong
e) None of the above

2. In August, 2013, Govt of India set up a 7 member panel to revisit Tax laws and to recommend measures for a stable tax administration. Who heads the panel?
a) Naina Lal Kidwai
b) Bimal Jalan
c) Parthasarathi Shome
d) Dr Y V Reddy
e) None of the above

3. Which of the following is NOT a Direct Tax?
a) Income Tax
b) Corporation Tax
c) Property Tax
d) Gift Tax
e) Service Tax

4. Open Market Operations are carried out by RBI to
a) Lend money to State Governments
b) Shore up the Rupee value
c) Adjust Market Liquidity and thereby controlling money supply
d) To bring down Gold prices
e) None of the above.

5. 'Laissez-faire' in economic parlance means
a)Totally controlled market
b) Completely free market
c) Capitalistic market
d) Monopolistic market
e) None of the above

6. What is a Debt Fund?
a) Mutual Fund that invests in Fixed Income Securities like Bonds & Treasury bills
b) Mutual Fund that invests only in Shares and Equities
c) Mutual Fund that invests only in Infrastructure Bonds
d) Mutual Fund that invests only in long term Deposits
e) None of the above

7. Find the 'odd man out' of the following.
a) Certificate of Deposit
b) Term Deposit
c) Savings Bank Deposit
d) Commercial Paper
e) Capital Gains Deposit

8. What is NOT true with regard to TDS (Tax Deducted at Source) on Interest on Bank
Deposits for the Financial Year 2013-14?
a) TDS is done when interest on all the FDs of a Customer crosses Rs. 10000/- per year
b) TDS is not done for interest on Tax Saving FDs
c) TDS is done at the rate of 10% on the total Interest
d) TDS is not done on interest from Savings Bank Accounts
e) None of the above

9. Current Foreign Trade Policy (Exim Policy) covers the period
a) 2013-18
b) 2012-17
c) 2010-15
d) 2011-16
e) 2009-14

10. Ben Bernanke is the Chairman of USA's Central Bank, 'Federal Reserve'. Who will succeed him?
a) Janet Yellen
b) Christine Lagarde
c) Oliver Kahn
d) John Kerry
e) None of the above

11. While Indian Railways is the largest Public Sector Employer in India, who is the
largest Private Sector Employer in India?
a) Reliance Industries
b) Infosys
c) Wipro
d) TCS
e) None of the above

12. Which State in India has the highest Per Capita Income?
a) Goa
b) Punjab
c) Karnataka
d) Tamilnadu
e) Haryana

13. As per the latest Companies Act, what is the minimum number of member's required
to form a Public Limited Company?
a) 1
b) 50
c) 7
d) 2
e) 10

14. Regional Rural Banks(RRBs) are owned by
a) Only RBI and Sponsor Bank
b) Only Govt of India and Sponsor Bank
c) Only Sponsor Bank, Govt of India and State Government concerned
d) Only Sponsor Bank and State Government concerned
e) None of the above

15. Davos in Switzerland is famous for Annual meeting of World Business leaders,Politicians and thought leaders. Which organization conducts this meeting?
a) World Economic Forum - A Swiss Non-profit Foundation
b) World Bank
c) International Monetary Fund
d) World Trade Organization
e) None of the above

16. What is 'Deficit Financing'?
a) Lending of money by Banks to companies with losses
b) Practice in which a government spends more money than it receives as revenue
c) Lending of money by RBI to State Governments
d) Lending of money by World Bank to Poor countries
e) None of the above

17. Who is the author of 'Das Kapital' which is a critical analysis of Political Economy?
a) Maxim Gorky
b) Karl Marx
c) Leo Tolstoy
d) Amartya Sen
e) None of the above

18. The 'Bharatiya Mahila Bank' the first nationalised bank for women will have a Seed Capital of Rupees
a) 500 Crores
b) 5000 Crores
c) 100 Crores
d) 1000 Crores
e) None of the above

19. JNNURM (Jawaharlal Nehru National Urban Renewal Mission) is a Govt. of India
scheme for?
a) Urban Employment
b) Urban Finance
c) Urban Education
d) Urban Development & Modernization
e) 'a', 'b' & 'c' of the above

20. Which Country is the largest producer of Wheat in the world?
a) India
b) USA
c) Peoples Republic of China
d) Russia
e) None of the above

21. The first NBFC (Non Banking Financial Company) to be converted into a Bank in
India is
a) Kotak Mahendra Finance Ltd. in 2003
b) Reliance Finance Ltd. in 2005
c) L&T Finance Ltd. in 2008
d) Shriram Finance Ltd. in 2006
e) None of the above

22. What is 'Operation Flood'?
a) Flood Control Program of Govt. of India
b) River Linking Project of Govt. of India
c) Dairy Development Project of NDDB(National Dairy Development Board)
d) Irrigation Development Plan of Govt. of India
e) None of the above

23. What is the Target set for Farm Credit in Union Budget for 2013-14?
a) Rs 7,00,000 Crore
b) Rs 5,00,000 Crore
c) Rs 5,75,000 Crore
d) Rs 3,00,000 Crore
e) None of the above

24. What is 'Financial Inclusion'?
a) Delivery of Banking Services at affordable cost
b) Providing Banking Services to the vast sections of disadvantaged and low income groups
c) Availability of Banking and payment services to entire population without discrimination
d) All the 3 above
e) None of the above

25. How much amount is earmarked approximately for capital infusion in to Public Sector Banks in FY 2013-14?
a) Rs. 14,000 Crores
b) Rs. 10,000 Crores
c) Rs. 20,000 Crores
d) Rs. 18,000 Crores
e) None of the above

26. The threshold for cash transactions to be monitored by Banks as per RBI guidelines is
a) Rs. 50 Lakh
b) Rs. 10 Lakh
c) Rs. 5 Lackh
d) Rs.50,000
e)Rs. 25,000

27. On 10th October, 2013 a group member organisation of the World Bank has launched Bonds worth US $ 1 billion linked to Rupee for boosting investments in India. Name this organization.
a) International Monetary Fund (IMF)
b) International Finance Corporation (IFC)
c) Asian Development Bank (ADB)
d) United Nations Development Programme (UNDP)
e) None of the above

28. National Bank for Agriculture and Rural Development (NABARD) is established in
July, 1982 as per recommendations of Committee headed by
a) Narasimhan
b) Saraf
c) Rangarajan
d) Sivaraman
e) Bimal Jalan

29. What is the name of the trade Association of IT & BPO companies in India?
a) NASSCOM
b) FICCI
c) CII
d) AIMA
e) ASSOCHAM

30. Name the Bank which has recently announced 'eKYC' facility to open Savings and
Loan accounts based on just Aadhar and Finger prints scan for New Customers.
a) HDFC Bank
b) SBI
c) Axis Bank
d) IDBI Bank
e) Punjab National Bank

31. RBI guidelines require Banks to roll out more secured 'Chip+ PIN' Debit/Credit cards
to their customers. What is the deadline set by RBI for this?
a) November 30th, 2013
b) December 31st, 2013
c) March 31st, 2014
d) September 30th, 2013
e) None of the above

32. Which Sector contributed maximum to GDP of India as per Economic Survey 2012-13?
a) Industrial
b) Services
c) Agriculture
d) Infrastructure
e) None

33. What is 'Employee Attrition'?
a) Employees filing suits against their Employers
b) Employees filing suits against each other
c) Employees striking work
d) Employer loosing Employees through resignation/retirement/retrenchment
e) None of the above

34. Rs. 2058 Crore Jet-Etihad deal is the largest Foreign investment in Indian Aviation Sector so far. Where is the Etihad headquarters is located?
a) Dubai
b) Muscat, Oman
c) Kuwait
d) Singapore
e) Abu Dhabi

35. Which company is the World's largest Steel manufacturer?
a) Nippon Steel, Japan
b) Arcelor Mittal, Luxemborg
c) POSCO, South Korea
d) Tata Steel, India
e) None of the above


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

http://banking-awareness.blogspot.com/2014/08/banking-awareness-practice-questions.html

BANKING AWARENESS PRACTICE MCQs FOR BANK EXAMS

1. Which of the following does not find mention in the Negotiable Instruments Act?
a) General Crossing
b) Special Crossing
c) Not Negotiable Crossing
d) Double crossing
e) Account Payee Crossing

2. A cheque is drawn in favour of Amol or order. It is endorsed by Amol in favour of Vasant. Vasant will be called -
a) Endorser
b) Drawer
c) Endorsee
d) Drawee
e) None

3. What is the purpose of reduction in Cash Reserve Ratio (CRR)?
a) Reduce Credit Flow
b) Enhance Credit Flow
c) Enhance availability of cash
d) Reduce Cash transactions
e) None

4. Which of the following is the basic function of Banks?
a) Merchant Banking Business
b) Issuing Demand Drafts
c) Issuing Mail Transfers
d) Accepting Deposits and giving loans
e) Paying LIC Premium on behalf of customers

5. DTC stands for?
a) Direct Tax Code
b) Direct Transaction code
c) Direct Transfer Code
d) Direct Trade
e) None of the above

6. For UCBs, the ceiling on loans to individuals for carrying out repairs / additions / alterations to their dwelling units has been enhanced to Rs.––lakh in rural and semiurban areas and Rs. –– lakh in urban areas.
a) 1; 5
b) 2; 5
c) 5; 5
d) 5; 10
e) None of the above

7. The RTGS System is operated by the RBI and managed by a Standing committee consisting of members from?
a) RBI
b) Bank
c) Other Stake holders
d) All the above
e) None of these

8 RBI has decided to permit banks to undertake Insurance broking business subject to the stipulated conditions. Which of the following is not the stipulated condition?
a) Net worth of the bank should not be less than Rs. 500 crores.
b) The CRAR of the bank should not be less than 10%.
c) The level of net non-performing assets should not be more than 3%.
d) The bank should have made profits for the last 3 consecutive years.
e) None of the above

9. Where is the headquarters of International Monetary Fund?
a) Geneva
b) Paris
c) London
d) Manila
e) Washington

10. The Financial Results of the banks and other organisations normally are expressed
in quarters. What does Q-I mean?
a) Results of January-March
b) Performance during April-june
c) The period when the profits are highest
d) Period where the turnover is more
e) The period when the profits are highest

11. Which of the following certainly is an effort in the direction of Financial Inclusion?
a) Internet Banking
b) Anywhere Banking
c) No-frills Account
d) Foreign Currency Accounts
e) None of the above

12. What does the letter P denote in the term PAN which is issued by the Income Tax
Department?
a) Provisional
b) Private
c) Personal
d) Permanent
e) Postal

13. Who is the chairman of Gover-ning Council of BCSBI (Banking Codes and
Standards Board of India)?
a) K.C.Chakrabarty
b) A.C.Mahajan
c) HS Khurana
d) M.V.Nair
e) Salman Khurshid

14. As we know, a lot of new concepts are being used in the field of banking these days,
which of the following is NOT one such concept/product directly associated with banks?
a) Gift Cards
b) SMS Alert
c) Demat Account
d) ATM/Debit Card
e) Bank to Bank Number portability

15. The Headquarters of Bank for International Settlements is located at?
a) New York
b) London
c) Washington
d) Paris
e) Basel (Switzerland)

16. M3 is the sum total of?
I) Currency with public
II) Demand deposits with banks
III) Time Deposits with banks
IV) Deposits with Post office savings bank
a) I + II + III
b) I + II
c) I + II + III + IV
d) Only I
e) None of the above

17. Who is the regulator of payment and settlement system in India?
a) SEBI
b) IRDA
c) RBI
d) Central Government
e) State Bank of India

18. As per RBI guidelines which of the following is/are correct in respect of classification criteria for opening Bank Branches?
a) Rural: population less than 10,000
b) Semi-Urban:10,000 and above and less than 1 lakh
c) Urban: 1 lakh and above and less than 10 lakh
d) Metropolitan: 10 lakh and above
e) All the above

19. RTGS has been implemented to eliminate –––– risk?
a) Credit risk
b) Operational risk
c) Settlement risk
d) Systemic risk
e) c+d

20. Cash kept in the currency chest is owned by?
a) Currency Chest branch bank
b) State Bank of India
c) Central Government
d) Reserve Bank of India
e) None of the above

21. In the Abbreviation FRBM Act, the letter F stands for?
a) Finance
b) Fiscal
c) First
d) Financial
e) None of the above

22. Which type of machine is used by Business Correspondents?
a) Micro ATMs
b) POS
c) Biometric Card Reader
d) Solar empowered
e) Water resistant

23. The Main activity of the Financial Intelligence Unit India (FIU-IND) is to control?
a) Corruption
b) Tax Evasion
c) Money Laundering
d) Terrorism
e) None of the above

24. Some banks are financing big projects like construction of roads, bridges etc. Financing such projects means banks are helping exactly in?
a) Infrastructural Development
b) Project Management
c) Developing core sector Industry
d) Financial Inclusion
e) All of these

25. TCF is the term used by Dr K. C. Chakrabarty, the Deputy Governor of RBI in the
meeting of BCSBI. TCF stands for?
a) Treating Customers Fairly
b) Treating Customers Fast
c) Treatment of Credit-customers Fast
d) Only a and b
e) All the above

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

BANKING AWARENESS PRACTICE QUESTIONS FOR IBPS CLERKS WXAM

1. Periodically Reserve Bank of India (RBI) reviews a few SLR norms. SLR stands for?
a) Statutory Liquidity Ratio
b) Statutory Liquidity Rate
c) Statutory Liquidity Return
d) Statutory Liquidity Repo
e) None of the above

2. In the recent months, Indian Rupee depreciated heavily against US Dollar. Rupee depreciation means?
a) Value of Rupee decreasing against a basket of currencies
b) Less number of Rupees per US Dollar
c) More number of Rupees per US Dollar
d) Less number of Dollars per Rupee
e) None of the above

3. In India, Commodities Market is regulated by?
a) Forward Market Commission
b) Forward Market Committee
c) Forward Market Corporation
d) Forward Market Council
e) None of the above

4. Food Security Bill is recently passed by Parliament. What does the Food Security Bill intend to achieve?
a) At least 3kg of food grains per person per month to be given to general category households, at prices not exceeding 50% of Minimum Support Price.
b) Up to 75% of the rural population and up to 50% of urban population are to be covered under Targeted Public Distribution System.
c) Children aged six months to 14 years would get take-home ration or hot cooked food.
d) The oldest adult woman in each house would be considered the head of that household when issuing the ration card.
e) All of the above

5. FIPB stands for?
a) Foreign Investment and Production Board
b) Foreign Investment and Promotion Board
c) Foreign Investment and Promotion Bureau
d) Foreign Investment and Protection Board
e) None of the above

6. In India, Capital Markets are regulated by?
a) Securities and Exchange Board of India
b) Reserve Bank of India
c) State Bank of India
d) International Monetary Fund
e) None of the above

7. RAND is the currency of ?
a) China
b) Japan
c) North Korea
d) South Africa
e) None of the above

8. Recently RBI took several steps to control Rupee depreciation. Reason(s) for to Rupee depreciation?
a) Exports become costlier
b) Imports become costlier
c) Imports become cheaper
d) Both (a)&(c)
e) None of the above

9. India's GDP growth is slowing down. GDP means?
a) Gross Domestic Product
b) Gross Domestic Poverty
c) Gross Demand Production
d) Gross Demand Product
e) None of the above

10. Chakravarthy Rangarajan is?
a) Governor of Reserve Bank of India
b) Director of Securities and Exchange Board of India
c) Chairman of Prime Minister Economic Advisory Council
d) Chairman of State Bank of India
e) None of the above

11. International Monetary Fund (IMF) works to foster global monetary cooperation, promote high employment and sustainable economic growth. Who is the current managing director of IMF?
a) Kaushik Basu
b) Dr. Y V Reddy
c) Jim Yong Kim
d) Christine Lagarde
e) None of the above

12. Air-Asia India is the new proposed Airline in India. It tied up with the following Industrial group for its launch in India?
a) TATAs
b) Reliance group
c) Aditya Birla group
d) Infosys
e) None of the above

13. Raghuram Rajan became the 23rd RBI Governor on 5th September 2013. Whom did he
succeed?
a) Dr Y V Reddy
b) D Subba Rao
c) Bimal Jalan
d) Dr Rangarajan
e) None

14. IRDA headquarters located in which City?
a) Mumbai
b) Bangalore
c) Hyderabad
d) Chennai
e) None of the above

15. Arundathi Battacharya was recently in the news. She is?
a) Managing Director of SBI
b) Chairman of Punjab National Bank
c) CEO of ICICI Bank
d) CEO of Axis Bank
e) None of the above

16. India's CAD was 4.8% of GDP in 2012-13. CAD means?
a) Current Amount Deficit
b) Current Account Deficit
c) Current Asst Debt
d) Common Account Deficit
e) None of the above

17. Which of the following is NOT matched?
a) C B Bhave - SEBI
b) Rangarajan - Planning Commission
c) Raghuram Rajan - RBI
d) T S Vijayan - IRDA
e) Yogesh Agarwal - PFRDA

18. Who is the Chairman of the Planning Commission?
a) P. Chidambaram
b) Monteksingh Ahluwalia
c) Raghuram Rajan
d) Manmohan Singh
e) None of the above

19. As per findings of the recent Raghuram Rajan Committee report which State is the
most developed?
a) Kerala
b) Goa
c) Gujarat
d) Tamilnadu
e) None of the above

20. As per the insurance bill, 2013, Foreign Investors can hold up to?
a) 51% of the capital in an Indian insurance company
b) 39% of the capital in an Indian insurance company
c) 49% of the capital in an Indian insurance company
d) 29% of the capital in an Indian insurance company
e) None of the above

21. Statutory Liquidity Ratio (SLR) refers to the amount that the commercial banks require to maintain with RBI. What are the permitted SLR investments?
a) Only Gold
b) Gold or Govt approved Securities
c) Only Govt approved Securities
d) Only Cash
e) None of the above

22. Direct Taxes Code (DTC) is intended to be introduced in the monsoon session of
Parliament. DTC seeks to replace?
a) Indian Contract Act
b) Indirect Tax Act
c) Income-Tax Act
d) Banking Regulation Act
e) None of the above

23. In July 2013, RBI notified that Non-CTS Cheques are valid till the end of year 2013. CTS means?
a) Cheque Truncation System
b) Cheque Transaction System
c) Cheque Transmission Service
d) Cheque Transport Service
e) None of the above

24. In July 2013, SEBI Act was amended to curb Ponzi schemes. Ponzi Scheme means?
a) Name of a Mutual Fund Scheme to earn higher returns
b) Collective investment Schemes floated by fly by night operators
c) Name of a Bank Deposit Product
d) Name of a Health Insurance scheme
e) None of the above

25. The minimum rate of Interest charged by a Bank from Customers on the loans is?
a) Base Rate
b) Bank Rate
c) Prime Rate
d) Prime Lending Rate
e) None of the above

26. Which of the following is NOT true with regard to FCNR Accounts?
a) NRIs can open the Account
b) Can be opened in 'Permitted Currency' only
c) Minimum Term is 1 year
d) Maximum Term 5 years
e) None of the above

27. REPO rate means?
a) Rate at which the RBI will borrow from the banks
b) Rate at which banks will borrow from other banks
c) Rate at which the RBI lends to banks
d) Rate at which banks lend to customers
e) None of the above

28. Fiscal Deficit Refers to?
a) The difference between the government's total expenditure and its total receipts
(including borrowing)
b) The difference between the government's total expenditure and its total receipts
(excluding borrowing)
c) The difference between the government's Tax collections and Salary payments
d) The difference between the government's Tax collections and government's
Borrowings
e) None of the above

29. "DAX" is the stock market in?
a) Germany
b) USA
c) France
d) Hongkong
e) None of the above

30. After retirement, Ratan Tata was made the Chairman Emeritus of Tata Sons. Who
succeeded Ratan Tata as Chairman of Tata Sons?
a) Cyrus Mistry
b) Niira Radia
c) Mukesh Ambani
d) Nandan Nilekani
e) None of the above

31. Yellow Metal refers to?
a) Copper
b) Silver
c) Platinum
d) Gold
e) None of the above

32. Who is the Chairman of the committee set up to scrutinize applications for new Bank licenses?
a) Usha Thorat
b) Bimal Jalan
c) C B Bhave
d) S Damodaran
e) None of the above

33. Who is the World Bank President?
a) Christine Legrade
b) Jim Yong Kim
c) Raghuram Rajan
d) Monteksingh Ahluwalia
e) None of the above

34. Ben Bernanke is the Chairman of Federal Reserve. What is Federal Reserve?
a) Central Bank of UK
b) Financial wing of the World Bank
c) Central Bank of USA
d) European Union Central Bank
e) None of the above

35. NEFT means?
a) National Electronic Funds Transfer
b) Negotiated Efficient Fund Transfer system
c) National Efficient Fund Transfer solution
d) Non Effective Fund Transfer system
e) Negotiated Electronic Foreign Transfer system.

36. Distribution of insurance products and insurance policies by banks as corporate agents is known as?
a) General insurance
b) Non life insurance
c) Bancassurance
d) Insurance Banking
e) Deposit Insurance

37. In respect of partnership business, LLP stands for:
a) Local Labour Promotion
b) Low Labour Projects
c) Limited Loan Partnership
d) Longer Liability Partnership
e) Limited Liability Partnership

38. What is a stale cheque?
a) A cheque issued without drawer's signature.
b) A cheque with only signature of the drawer.
c) A cheque which has completed 3 months from the date of its issue.
d) Any one of the above.
e) None

39. Interest on savings bank account is now calculated by banks on?
a) Minimum balance during the month
b) Minimum balance from 7th to last day of the month
c) Minimum balance from 10th to last day of the month
d) Maximum balance during the month
e) Daily product basis

40. Largest shareholder (in percentage shareholding) of a Nationalized bank is ?
a) RBI
b) NABARD
c) LIC
d) Govt. of India
e) IBA

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

BANKING AWARENESS PRACTICE MCQs FOR ALL BANK EXAMS

1. KYC norms are liberalised in case of following account:
a) Current Account 
b) Savings Account 
c) Term Deposit Account
d) No Frills Account 
e) None of the above

2. The National Social Security Fund (NSSF) helps which of the following groups of society?
a) Bank employees 
b) Central government employees
c) Workers in the unorganized sector 
d) Workers in the textile industry
e) Women employees

3. Regional Rural Banks have been set up with the basic objective of:
a) Providing credit to semi-urban and urban population
b) Providing deposits facilities to farmers
c) Providing credit and deposit facilities to rural areas
d) Providing credit, deposit and other banking facilities to people in rural areas
e) None of the above

4. Which of the following deposits do not attract TDS?
a) Fixed Deposits 
b) Deposits Reinvestment 
c) Flexi Deposits
d) Call Deposits 
e) Recurring Deposits

5. Which of the following tools is used by the RBI to control credit and monetary situations of the markets?
a) RTGS 
b) ECS 
c) NEFT 
d) CRR 
e) Balance of trade

6. The Cash Reserve Ratio is to be maintained by Commercial Banks in the form of?
a) Cash in hand at branches 
b) Balance with other banks
c) Balance in a special account with RBI 
d) Funds in the currency chest
e) All of the above

7. Regional Rural Banks are classified as?
a) subsidiaries of NABARD 
b) subsidiaries of the sponsor banks
c) scheduled commercial banks 
d) All of the above 
e) None of the above

8. Foreign exchange reserves of India are kept in the custody of which of the following?
a) International Bank for Reconstruction and Development
b) Reserve Bank of India 
c) State Bank of India
d) International Monetary Fund 
e) Government Treasury

9. A Hire-purchase contract is a -
a) Contract of bailment 
b) Contract of sale
c) Contract of bailment followed by contract of sale
d) Contract of lease followed by contract of bailment
e) None of these

10. Which of the following Act defines the age of a minor?
a) Section 25 of N.I. Act 
b) Section 33 of Contract Act
c) Section 54 of Partnership Act 
d) Section 3 of Indian Majority Act
e) None of these

11. The objective(s) of SLR is/are:
a) To ensure that Banks remain solvent
b) To increase volumes in Government securities.
c) To regulate expansion of Credit
d) All of the above 
e) None of these

12. What is the amount of capital that RBI is tentatively proposing to provide to the Public Sector Banks this year, to meet its capital adequacy requirement as per Basel III norms ?
a) Rs.11,200 cr 
b) Rs.20,000 cr 
c) Rs.12,200 cr
d) Rs.13,200 cr 
e) None of the above

13. Decrease of CRR & SLR has the effect of:
a) Decreasing Credit creation 
b) Increasing Credit creation
c) Increasing purchasing power of money 
d) All of the above
e) None of the above

14. Which of the following Acts has specially been enacted to help banks deal with bad loans?
a) Negotiable Instrument Act 
b) Banking Regulation Act
c) SARFAESI Act 
d) Companies Act 
e) Offshore Banking Act

15. _____ provides Clearing House facilities for netting of payments and security delivery?
a) Primary dealers 
b) Banks 
c) Stock exchanges
d) All of the above 
e) None of these

16. Which of the following cities are tentatively selected by RBI to launch Rs 10/- plastic notes?
a) Shimla b) Kochi 
c) Mysore
d) Jaipur and Bhubaneswar 
e) All of the above places

17. Depositories hold shares in ______form:
a) Physical b) Dematerialized 
c) Either a or b
d) Both a and b 
e) None of these

18. Current Account can be opened by?
a) Any Company registered under ROC Act 1956
b) Partnership Firms 
c) Sole Proprietor
d) Any Individual or joint individual 
e) All of these

19. Zero coupon bonds are those ________:
a) Which do not make a periodical coupon payment
b) These bonds are bought for less than their face value (at a discount).
c) Are mostly issued in auctions by Treasury.
d) All of the above
e) None of these

20. Name the first State Cooperative Bank in India which started its own 'RuPay' ATM-cum-Debit Card?
a) Andhra Pradesh State Cooperative Bank in Hyderabad
b) Himachal State Cooperative Bank in Shimla
c) The Andaman and Nicobar State Co-operative Bank Ltd.
d) The Bihar State Co-operative Bank Ltd
e) Jharkhand State Co-operative Bank

21. Finance Ministry has asked all Public Sector Banks to improve their ________ portfolio to 40%?
a) Fixed Deposits 
b) Recurring Deposits 
c) Flexi Deposits
d) CASA Deposits 
e) None of the above

22. The Credit Guarantee Fund (CGTMSE) Scheme covers?
a) Only term loans 
b) Only working capital 
c) Both a and b
d) All Type of Fund based & Non Fund based credit facility
e) None of these

23. RBI directed Banks not to levy penalty on individual borrowers for pre-payment of floating rate term loans. This term loans include?
a) Housing Loan 
b) Vehicle Loan 
c) Personal Loan
d) Only a &b 
e) All a, b and c

24. The Difference between Gross Domestic Product and Net Domestic Product is?
a) Government Revenue 
b) Net Indirect Tax (Indirect Tax Subsidy)
c) Consumption of fixed Capital 
d) Net Capital Formation
e) None of these

25. Recently, the RBI has recognized Micro Finance Institution Network (MFIN), as the Self Regulatory organization for NBFC-MFIs. The decision was taken by RBI based on the recommendations made by which committee?
a) Y H Malegam committee 
b) Parthasarthi Shome committee
c) Chakrabharthy committee 
d) Khan committee 
e) None of these

26. Where is the headquarter of Association of South East Asian Nations (ASEAN) located?
a) Jakarta b) Singapore 
c) Kathmandu 
d) Bangkok 
e) None of these

27. World Bank was established in the year?
a) 1943 
b) 1944 
c) 1945 
d) 1946 
e) None of these

28. Through which of the following the funds to the projects aided by the World Bank and the International Monetary Fund (IMF) are distributed?
a) Regional Branches of RBI 
b) NABARD
c) Integrated Rural Development Programme
d) Agriculture Corporation Refinance and Development 
e) Ministry of Finance

29. QFI stands for:
a) Qualified Financial Investor 
b) Qualified Foreign Investor
c) Qualitative Financial Investment 
d) All of the above 
e) None of the above

30. Which of the following is NOT a part of India's Money Market?
a) Bill Market 
b) Call Money Market c) Banks
d) Mutual Funds 
e) Indian Gold Council

31. Exim Bank is planning to set up a Project Development Company (PDC) in Africa along with:
a) State Bank of India 
b) IL&FS 
c) African Development Bank
d) Only a & b 
e) a, b & c

32. Department of Economic Affairs is part of which of the following Ministries?
a) Ministry of Home Affairs
b) Ministry of Planning
c) Ministry of Finance
d) Ministry of Heavy Industries & Public Enterprises
e) Ministry of Rural Development

33. Which of the following is a Fixed Asset?
a) Goodwill 
b) Land & Building c) Cash
d) All of the above 
e) None of the above

34. What is the full form of LAF, the term used in banking world very frequently?
a) Legal Adjournment Formality 
b) Liquid Advance & Finance
c) Liquidity Adjustment Facility 
d) Late Arrival of Finance
e) Local Advance Finance

35. Recently, which among the following banks has organized "The Banking and Economics Conclave 2014" a national level banking conclave for the first time?
a) State Bank of India 
b) Canara Bank 
c) State Bank of Mysore
d) Vijaya Bank 
e) None of these

36. Takehiko Nakao is the president of which of the following organization?
a) OPEC 
b) African Union 
c) IMF 
d) WTO 
e) ADB

37. Net worth of business means:
a) Equity capital 
b) Total asset c) Fixed asset
d) Total asset - total liability 
e) None of the above

38. Insurance cover for bank deposits in our country is provided by?
a) SBI 
b) Government of India 
c) DICGC
d) GIC 
e) None of these

39. Who among the following can invest in capital markets in India through Portfolio Investment?
1. Non Resident Indians (NRIs) 
2. Foreign Institutional Investments (FIIs)
3. Persons of Indian Origins (PIO)
Choose the correct answer from the option given below?
a) Only 1 & 2 
b) Only 2 & 3 
c) Only 1 & 3
d) 1, 2 & 3 
e) None of the above

40. Which of the following is NOT a Scheduled Commercial Bank?
a) HDFC Bank 
b) Axis Bank 
c) IDBI Bank
d) NABARD 
e) SBI

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

BANKING AWARENESS PRACTICE QUESTIONS FOR IBPS CLERKS EXAM

1. The Issued Capital of RRBs (Regional Rural Banks) is jointly shared by Govt of India, Sponsor Bank & State Govt. concerned in the Ratio of?
a) 50%, 35% & 15% respectively
b) 50%, 30% & 20% respectively
c) 40%, 40% & 20% respectively
d) 20%, 20% & 60% respectively
e) None of the above

2. Who is known as 'Father of White Revolution' in India?
a) M S Swaminathan
b) Amartya Sen
c) Verghese Kurien
d) M. Visweswaraiah
e) None of the above

3. Which of the following are the measures aimed at greater 'Financial Inclusion'?
a) No Frills Accounts
b) Simple KYC (Know your customer) norms
c) Reasonable Bank Charges
d) 'a', 'b' & 'c' of the above
e) None of the above

4. Which of the following is NOT a valid document for opening new accounts with
banks as per RBI Anti-Money Laundering standards and KYC norms?
a) Passport
b) eKYC
c) Pan card
d) NREGA(National Rural Employment Guarantee Act) Job card
e) None of the above

5. What is a 'Chip+PIN' card?
a) A license card issued to Exporters by DGFT(Director General of Foreign Trade)
b) A highly secure Credit/Debit card having an embedded Chip with the encrypted PIN stored on the Chip
c) PAN card with an embedded Chip and PIN
d) A card which requires the user to enter PIN also while swiping at POS(Point of Sale) terminals
e) 'b' & 'd' of the above

6. How a high rate of 'Employee Attrition' affects an organization which requires highly skilled workers?
a) Decrease in Training Costs only
b) Increase in Recruitment and Training Costs
c) Decrease in Recruitment Costs only
d) Organization is not affected in any way
e) None of the above

7. At present which two Private Sector Banks are the last ones that were given Bank Licences by RBI?
a) Karur Vysya Bank & Lakshmi Vilas Bank
b) Axis Bank & Lord Krishna Bank
c) Kotak Mahendra Bank & Yes Bank
d) IDBI Bank & HDFC Bank
e) Karnataka Bank & Ratnakar Bank

8. Who owns the Share Capital of the RBI?
a) All the State Govts
b) Govt of India
c) All the Public Sector Banks
d) All the Public & Private Sector Banks
e) The World Bank

9. Which Country is the largest Importer from India (US $ 36,316 Millions) for Financial year 2012-13 ?
a) United Arab Emirates (UAE)
b) Unites States of America (USA)
c) UK (United Kingdom)
d) PRC (Peoples Republic of China)
e) Canada

10. What is the Priority Sector Lending Target stipulated for the Domestic Scheduled Commercial Banks for the Financial Year 2013-14?
a) 30 % of Adjusted Net Bank Credit
b) 60 % of Adjusted Net Bank Credit
c) 20 % of Adjusted Net Bank Credit
d) 50 % of Adjusted Net Bank Credit
e) 40 % of Adjusted Net Bank Credit

11. What is NOT true with regard to ITPO (India Trade Promotion Organization)?
a) It is a Trade Promotion Agency of Govt of India
b) It organizes Trade Fairs
c) It is located in New Delhi
d) It provides Finance to Exporters
e) It has Trade Centres in Bangalore and Chennai

12. As per RBI guidelines, Photos are not insisted up on by Banks while opening a Time Deposit below?
a) Rs. 50,000/-
b) Rs. 10,000/-
c) Rs. 20,000/-
d) Rs. 25,000/-
e) None

13. Which of the following is NOT a Tax levied by the Central Govt?
a) Tax on Agricultural Income
b) Corporation Tax
c) Income Tax
d) Customs Duty
e) Wealth Tax

14. Export Credit Guarantee Corporation of India Ltd. (ECGC) is a Govt of India Enterprise which provides?
a) Export Credit Insurance facilities to Exporters and Banks in India
b) Loans to Exporters in India
c) Export Credit Refinances to Banks in India
d) Export Licenses to Exporters in India
e) None of the above

15. Warren Buffett, considered world's most successful investor of the 20th Century and one of the world's wealthiest people belongs to which Country?
a) UK
b) USA
c) Canada
d) Germany
e) None of the above

16. The largest exporter of dairy products in India is?
a) Gujarat Co-operative Milk Marketing Federation Ltd. (GCMMF)
b) Andhra Pradesh Dairy Development Co-operative Federation Ltd (APDDCF)
c) Karnataka Co-operative Milk Producers' Federation Ltd. (KMF)
d) Tamilnadu Co-operative Milk Producers' Federation Ltd.
e) None of the above

17. Green Revolution in India made the country self sufficient in Food grains production.
Who is the father of the Indian Green Revolution?
a) Norman Borlaug
b) Verghese Kurien
c) M S Swaminathan
d) Amartya Sen
e) None of the above

18. Which of the following is the most suited form of Irrigation in Desert Lands?
a) Sprinkler irrigation
b) Canal irrigation
c) Borewell irrigation
d) Drip irrigation
e) None of the above

19. Ratan Tata is the current?
a) Chairman of Tata Sons
b) Chairman of TCS
c) Chairman of Tata Group
d) Chairman Emeritus of Tata Sons
e) None of the above

20. 'Yuan' , Currency of Peoples Republic of China is also known as?
a) Renminbi
b) Chinese Dollar
c) Kroner
d) Peso
e) None of the above

21. What is TRUE about 'Plan-Expenditure' of Union Budget?
a) It is the expenditure incurred on items relating to 5 year plans
b) It is incurred by the State Governments only
c) It includes Revenue Expenditure and Capital Expenditure
d) It is incurred by the Central Government
e) 'a', 'c' & 'd' above

22. Govt of India has set up 7th Pay Commission which would decide on revision of Salaries for Govt Employees and Pensioners. From what date are the recommendations of the Commission likely to be implemented ?
a) 1st January, 2016
b) 1st April, 2016
c) 1st January, 2014
d) 1st April, 2014
e) 1st January, 2015

23. Immediate Payment Service (IMPS)?
i. Is a service to transfer money immediately between two Accounts within the same bank or across banks.
ii. Requires both sender & receiver of money to be registered for mobile banking serice with their banks
iii. Requires both sender & receiver of money to have MMID(Mobile Money Identifier) issued by their banks
a) Only statement 'i' of the above is correct
b) Only statement 'iii' of the above is correct
c) Statements 'i' & 'ii' of the above are correct
d) Statements 'i' , 'ii' & 'iii' of the above are correct
e) None of the statements is correct

24. All the Money Bills related to Budget should be passed in full within how many days
of presentation of the Budget?
a) 60 days
b) 30 days
c) 75 days
d) 120 days
e) 90 days

25. What is NOT true with regard to Rajiv Awas Yojana (RAY)?
a) It is a Scheme of Govt of India
b) It benefits the Poor in the Rural areas
c) It aims to make India Slum-free by the year 2022
d) It aims to provide shelters or housing free of cost to the beneficiaries
e) Rs. 32,230 crore has been earmarked by Govt for the scheme during 12th Five year plan

26. Who presented the maximum number (10) of annual Budgets for India?
a) P Chidambaram
b) Pranab Mukherjee
c) Y B Chavan
d) Morarji Desai
e) None of the above

27. Which of the following pair of Country-Stock Exchange is NOT matched?
a) India - NIFTY
b) USA - NASDAQ
c) Germany - DAX
d) Singapore - SGX
e) Japan - KOSPI

28. As part of Financial Inclusion drive, Govt. has directed Public Sector Banks(PSBs)
to have ATMs at all their branches. As per 2013-14 Budget speech, PSBs have given
an assurance to complete this task by
a) 31st March, 2015
b) 31st December, 2014
c) 31st March, 2014
d) 31st December, 2015
e) 30th September, 2014

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

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