BANKING AWARENESS PRACTICE QUESTIONS

1. 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.

2. 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.

3. 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

4. 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

5. 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.

6. 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


7. 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

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

9. 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

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

11. 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

12. 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

13. 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

14. 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

15. 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

16. 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

17. 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

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

19. 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

20. 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 

21. Which of the following is not a primary function of a Bank?
a) Granting loans 
b) Collecting cheques/ drafts of Customers
c) Arranging VISA for students for abroad education 
d) Issuing bank drafts 
e) Selling Gold/Silver Coins.

22. Reserves which can act as a liquidity buffer for Commercial Banks during crisis times are ___
a) CAR b) CRR
c) CAR & CRR
d) CRR & SLR 
e) SLR

Answers:

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