Banking awareness bits
1. In terms of Section 31 of the Reserve Bank of
India Act, 1934 a demand draft payable to bearer
may be issued only by _______?
(a) Nationalized Banks
(b) Scheduled Commercial Banks
(c) Reserve Bank of India
(d) Foreign Banks
(e) None of the above
2. In case of original demand draft is presented
after the duplicate has already been paid, the
bank will _______?
(a) Pay the original demand draft
(b) Pay the original demand draft as well and
recover the amount from the purchaser on the
strength of the indemnity bond
(c) Return with remarks “Draft reported lost,
duplicate already paid will pay on collecting bank’s
guarantee. In case the original draft is again
presented, it should be honoured.”
(d) Return with the remarks payment stopped by
the payee
(e) None of the above
3. Collateral securities can be _______?
(a) Tangible
(b) Intangible in the shape of personal guarantee
of a third party
(c) None of the above
(d) Both of the above
4. The Central Bank in India is ______?
(a) The Reserve Bank of India
(b) The State Bank of India
(c) The Andhra Bank
(d) Central Bank of India
(e) None of the above
5. Stock exchange securities do not include?
(a) Debentures certificate
(b) Small debentures issued by port trusts
(c) Government promissory notes
(d) Participation certificates
(e) None of the above
6. The Definition of ‘Banking’ is given in
(a) Negotiable Instrument Act, 1881
(b) RBI Act, 1934
(c) The Banking Regulation Act, 1949
(d) Contract Act
(e) None of the above
7. When was SBI established?
(a) April 1, 1935 (b) July 31, 1969
(c) May 5, 1955 (d) July 1, 1955
8. Presently, the number of the public sector
banks in India is
(a) 8
(b) 20
(c) 27
(d) 14
(e) None of the above
9. Which of the following banks are not
commercial banks?
(a) Foreign Banks
(b) State Co-operative Banks
(c) Private Banks
(d) Regional Rural Banks
(e) None of the Above
10. Regional rural banks are managed by ______?
(a) The Central Government
(b) The RBI
(c) The Board of Directors
(d) The State Government
(e) None of the above
11. Appellate Tribunal for recovery of debts due
to banks and financial institutions is set up at
_____?
(a) Chennai
(b) Bangalore
(c) Mumbai
(d) Kolkata
(e) None of the above
12. Many a times we read about Special Drawing
Rights (SDR) in newspapers. As per its definition,
SDR is a monitory unit of reserve asset of which
the following organization/agency?
(a) World Bank
(b) International Monitory Fund (IMF)
(c) Asian Development Bank (ADB)
(d) Reserve Bank of India (RBI)
(e) None of the above
13. As per recent newspaper reports, RBI is
considering the grant of license to some new
companies, particularly NBFCs, to act as fullfledged Banks. This of the following will be
Considered as NBFC?
(a) NABARD
(b) Life Insurance Corporation of India
(c) Reliance Capital
(d) SEBI
(e) None of the above
14. Presently which Indian bank has the largest
number of foreign branches?
(a) SBI
(b) Canara Bank
(c) Bank of Baroda (d) Bank of India
(e) None of the above
15. Under which of the following methods of
note issue the RBI issues notes?
(a) Fixed Fiduciary System
(b) Maximum Fiduciary System
(c) Minimum Reserve System
(d) Proportional Reserve System
(e) None of the Above
16. Cash deposit ratio means ______?
(a) The percentage of cash-in-hand-balance with
the Central Bank to the aggregate deposits
(b) The percentage of total deposits received by
Banks
(c) The percentage of total cash money received
as deposits by banks
(d) All the above (e) None of the above
17. Lead Bank Scheme was introduced in ______?
(a) 1965
(b) 1969
(c) 1981
(d) 1992 (e) None of the above
18. A rise in the reserve ratio of banks ______?
(a) Will lead to an increase in the money supply
(b) Will lead to a proportionate increase in the
money supply
(c) Will lead to a decrease in the money supply
(d) Will have no impact on money supply
(e) None of the above
19. In the case of FCNR accounts the payment of
interest is effected in ______?
(a) Indian Rupee
(b) Only in Pound (£)
(c) Same currency in which deposit stands
(d) Yen
(e) None of above
20. Banks are required to maintain SLR under
____?
(a) Section 24 of the Banking Regulation Act
(b) Section 49 of the Banking Regulation Act
(c) Section 24 of RBI Act
(d) None of the above
21. CRR is required to maintain in the form of
_____?
(a) Approved Government Securities
(b) Cash with RBI
(c) Cash with bank
(d) All the above
(e) None of the above
22. In which of the Acts, specimen of the cheque,
bill, promissory note is given?
(a) Negotiable Instruments Act
(b) Banking Regulation Act
(c) Mercantile Law
(d) None of the above
(e) All the above
23. Which of the following negotiable
instruments can be crossed to the banks?
(a) Cheques
(b) Drafts
(c) Bills of Exchange (d) All the above
(e) None of the above
24. Which of the following can be issued payable
to bearer?
(a) Cheque
(b) Draft
(c) Bill of Exchange
(d) Demand Promissory Notes
(e) None of the above
25. Crossing denotes _____?
(a) Cheque cannot be transferred by the payee.
(b) A direction to the paying bank to pay the
Cheque through a bank.
(c) Cheque will be paid through clearing only.
(d) Not payable across the counter but will be
credited to the account of the holder.
(e) None of the above
26. FCNR accounts can be opened and
maintained as _____?
(a) Current Accounts
(b) Saving Banks Accounts
(c) Term Deposit Accounts
(d) Recurring Deposits
(e) None of the above
27. Various banks in the country have installed
machines which disburse money to general
public. These machines are called ____?
(a) Coin Dispensing machine
(b) A T M
(c) Debit card machine
(d) Ledger machines
(e) None of the above
28. A ‘Not-negotiable’ crossing is a _____?
(a) General crossing
(b) Special crossing
(c) Restricted crossing
(d) Non-transferable crossing
(e) None of the above
29. Which of the following is the Statutory
Liquidity ratio (SLR), at present?
(a) 10%
(b) 21.5%
(c) 20%
(d) 24%
(e) 33%
30. RBI’s open market operation transactions are
carried out with a view to regulate _____?
(a) Liquidity in the economy
(b) Prices of essential commodities
(c) Inflation
(d) Borrowing powers of the Bank
(e) All of the above
31. Under Open market operations, one of the
measures taken by the RBI in order to control
credit expansion in the economy, does ____?
(a) Sale and purchase of Govt. securities
(b) Issuance of different type of Bond
(c) Auction of Bond
(d) To make available direct finance to Borrowers
(e) None of the above
32. Bank rate means _____?
(a) Rate of interest charged by commercial Banks
from borrowers
(b) Rate of interest at which commercial banks
discounted bills of their borrowers
(c) Rate of interest allowed by commercial Banks
from on their depositors
(d) Rate at which RBI purchases or rediscounts
Bills of Exchange of commercial
Banks
(e) None of the above
33. What is an Indian Depository Receipt (IDR)?
(a) A deposit account with a Public sector Bank
(b) A deposit account with any of the Depositories
in India
(c) An instrument in the form of Depository
Receipt created by an Indian Depository
against underlying equity shares of the issuing
company
(d) An instrument in the form of deposit receipt
issued by an Indian Depository
(E) None of the Above
34. Fiscal deficit means _____?
(a) Total income less Govt. borrowings
(b) Total payments less total receipts
(c) Total payments less capital receipts
(d) Total expenditure less total receipts excluding
borrowings
(e) None of the above
35. Interest on the savings bank accounts is
compounded ____?
(a) Monthly
(b) Yearly
(c) Quarterly
(d) Half-yearly
(e) All of the above
36. The Head of Reserve Bank of India is?
(a) Chief Executive Officer
(b) Managing Director
(c) Chief Banking Officer
(d) Dy. Governor
(e) None of the above
37. Who supplies interest-charts for different
maturities and for different rates of interest?
(a) IBA
(b) RBI
(c) Government of India
(d) IBRD (e) None of the above
38. Rates of Interest on deposits are determined
by ____?
(a) IBA (b) Ministry of Finance
(c) The Bank Itself
(d) Government of India
(e) None of the above
39. Current account becomes dormant when
there are no withdrawals for the last _____?
(a) 3 months (b) 6 months (c) 24 months
(d) 12 months (e) None of the above
40. Which of the following may be adjudged as
insolvent?
(a) Minor
(b) Married woman
(c) Firm
(d) Lunatic
(e) None of the above
41. A cheque becomes stale after _____?
(a) 2 months (b) 3 months (c) 6 months
(d) 12 months (e) None of the above
42. Bank conducts Government business at its
branches as an agent of _____?
(a) RBI
(b) SBI
(c) Government of India (d) State Government
(e) None of the above
43. Foreign exchange Reserves of India are kept
in the custody of ______?
(a) World Bank
(b) International Monetary Fund
(c) Prime Minister Rahat Kosh
(d) Reserve Bank of India
(e) None of the above
44. Which of the following Apex body and
Regulator has asked banks to swap customer
related information so that the frauds and
Defaults may be prevented?
(a) Bombay Stock Exchange
(b) Indian Banks’ Association
(c) Securities & Exchange Board of India
(d) Reserve Bank of India
(e) None of the Above
45. What is meant by Repo Rate?
(a) At what rate of interest banks offer the funds
to Reserve Bank of India.
(b) At what rate of interest World Bank offer the
funds to Central Government for not less than the
period of 364 days.
(c)At what rate of interest banks borrow the
funds from Reserve Bank of India for short term.
(d) At what rate of interest banks borrow the
funds from the other banks for long term.
(e) At what rate of interest central government
barrow the funds from the other banks for long
term.
46. At present, the Repo Rate is ____?
(a) 6.75 percent
(b) 8.25 percent
(c) 7.00 percent
(d) 9.00 percent
(e) 8.00 percent
47. If the Repo Rate increases by Reserve Bank of
India, rate of interest of the loans offered by the
banks _____?
(a) Decrease
(b) Become Zero
(c) Become 100 percent
(d) Increase
(e) None of the above
48. What measure RBI usually takes to control
Inflation in India?
(a) RBI decrease the Repo Rate
(b) RBI ask the Central Government to increase
the Repo Rate
(c) RBI cancels the option of Repo Rate
(d) RBI declares Repo Rate as Zero Percent
(e) RBI increase the Repo Rate
49. Reverse Repo Rate means that _____?
(a) the rate at which RBI borrows money from
Central Government.
(b) the rate at which state governments borrows
money from banks.
(c) the rate at which RBI borrows money from
banks.
(d) the rate at which RBI borrows money from
State Government.
(e) the rate at which RBI borrows money from
World bank.
50. Gilt-edged securities are _____?
(a) Shares of a private limited company
(b) First-class Government securities
(c) Shares of a company
(d) All of the Above
(e) None of the above
51. Certificate of Deposits can be issued for a
maximum period of _____?
(a) 45 days (b) 3 months (c) 6 months
(d) 1 year (e) None of the above
52. As per the news reports, India is reported to
be number two in getting “PE”. What is the full
form of “PE” as used in the financial world?
(a) Professional & Eco-friendly
(b) Profitable Equity
(c) Profitable & Economical
(d) Private & Economy
(e) Private & Economical
53. Currency notes printed that are deposited in
the currency chest are the property of ______?
(a) Respective bank
(b) RBI
(c) SBI (d) Government of India
(e) Respective State Government
54. Which of the following notes cannot be
exchanged?
(a) Solid notes
(b) Mismatched notes
(c) Mutilated notes (d) All the above
(e) None of the Above
55. Daily operations on the currency chest are
advised to ______?
(a) RBI
(b) Concerned bank
(c) Main branch of the district
(d) Through link branch to RBI
(e) All of the above
56. Spurious coins detected at the counter are
sent to ______?
(a) Mint
(b) Government of India
(c) RBI
(d) IBRD
(e) None of the above
57. Signature on Re. 1 note is made by the
Finance Secretary but on the other notes by
_____?
(a) Prime Minister (b) President of India
(c)Governor of Reserve Bank of India
(d) Finance Minister (e) None of the above
58. On a cheque instead of two parallel lines only
bank’s name is written. It is a _____?
(a) General crossing (b) No crossing
(c) Payable to bearer (d) Special crossing
(e) None of the Above
59. Which of the following acts as the Regulators
for the Credit Rating Agencies in India?
(a) RBI
(b) SBI
(c) SIDBI
(d) SEBI
(e) ARCIL
60. The Branding line of “Bank of Baroda” is
______?
(a) International Bank of India
(b) India’s International Bank
(c) India’s Multinational Bank
(d) World’s Local Bank
(e) None of the above
61. The logo of Bank of Baroda is known as
______?
(a) Sun of Bank of Baroda
(b) Baroda Sun
(c) Bank of Baroda’s rays
(d) Sunlight of Bank of Baroda
(e) None of the above
62. One of the major challenges faced by the
Banking Industry is Money Laundering. Name the
Act/Norms launched by the banks to curb Money
Laundering, in general?
(a) Know your customer norms
(b) Banking Regulation Act
(c) Negotiable Instrument Act
(d) Narcotics and Psychotropic Act
(e) None of the Above
63. Lots of banks in India offer M-Banking facility
to their customers. What is the full form of “M”
in it?
(a) Money (b) Marginal (c) Massage
(d) Mutual fund (e) Mobile
64. A cheque which is not crossed is called
_______?
(a) Open cheque (b) Bearer cheque
(c) Uncrossed cheque (d) Order cheque
(e) None of the above
65. The safest form of crossing is ______?
(a) Account payee crossing
(b) General crossing
(c) Special crossing
(d) Double crossing
(e) None of the above
66. A not negotiable crossing restricts what of
the cheque ________?
(a) Transferability (b) Negotiability
(c) Neither transferability nor negotiability
(d) Both transferability and negotiability
(e) None of the above
67. An order cheque can be converted into a
bearer cheque by means of ________?
(a) Sans recourse endorsement
(b) Special endorsement
(c) Blank endorsement
(d) Sans frais endorsement
(e) None of the above
68. In Banking parlance, “Sub-Prime” refers to
_______?
(a) Lending by Banks at rates below PLR
(b) Funds raised by banks at sub-LIBOR rates
(c) Group of banks which are not rated as Prime
Banks as per Bankers’ Almanac
(d) Lending done by Banks/Fls to customers not
meeting with normally required credit appraisal
standards
(e) None of the above
69. “Federal Reserve” is the Financial
Organization of ______?
(a) The USA (b) The UK (c) UAE
(d) France (e) Japan
70. A charge where there is neither the transfer
of ownership nor the possession is called
______?
(a) Hypothecation (b) Lien
(c) Pledge (d) Mortgage
(e) None of the above
71. These days Banks are offering Loans against
Property? Under which business segment, this
activity may be categorized?
(a) Corporate Banking
(b) Personal Banking
(c) Merchant Banking
(d) Portfolio Management-Services
(e) None of the above
72. What do we mean by “ECB” in financial
terms?
(a) Essential Commercial Borrowings
(b) Essential Credit & Borrowings
(c) External Credit & Business
(d) External Commercial Borrowings
(e) None of the above
73. “Currency Swap” is an instrument to manage
____?
(a) Currency Risk
(b) Interest Rate Risk
(c) Currency and Interest Rate Risk
(d) Cash Flows in different currencies
(e) All of the above
74. “Plastic Money” denotes ________?
(a) Bearer cheque (b) Credit card
(c) Demand Draft (d) Traveller’s cheque
(e) Gift cheque
75. RBI has recently introduced Cheque
Truncation System, which means that ______?
(a) Physical movement of a cheque is stopped
between banks and instead an electronic image
be exchanged for clearance of funds
(b) The physical movement of a cheque for
clearance of funds be made more secure
(c) Issue of cheques to customers be made more
secure by introducing more enhanced security
features
(d) A new technology to process payments
between Banks exclusively
(e) None of the Above
76. To define a bank, the basic functions of a
bank would be?
(a) Accepting Deposits (b) Social Upliftment
(c) Lending Funds (d) Both a and c
(e) All of the above
77. The term “Floating Rupee” means _____?
(a) Limited Convertibility of Rupee
(b) Removal of all controls on cross movement of
Foreign exchange on capital account
(c) Removal of all controls on cross-movement of
Foreign exchange on Trade & Services
(d) Removal of controls on cross-movement of US
Dollar against Indian Rupee on US- India
Trade
(e) None of the Above
78. The DICGC covers Bank Deposits under its
Deposit Insurance Scheme of the commercial
banks and includes _______?
(a) Foreign Banks operating in India,
(b) Regional Rural Banks
(c) Co-operative Banks
(d) Urban Co-operative Bank
(e) All of the Above
79. Under the provisions of Section 16(1) of the
DICGC Act, the insurance cover available to the
Depositors of a bank “in the same right and in
similar capacity” at all the Bank branches of a
bank put together is ______?
(a) Rs. 2,000 (b) Rs. 25,000
(c) Rs. 100,000 (d) Rs. 500,000
(e) None of the above
80. Certificate of Deposit can be issued by _____?
(a) Reserve Bank, NABARD and Exim Bank only
(b) Commercial banks and term lending
institutions
(c) Scheduled commercial banks excluding
regional rural banks
(d) All the above
(e) None of the above
81. The minimum acceptable amount under the
Certificate of Deposit is ____?
(a) Rs. 1 lakhs (b) Rs. 10 lakhs
(c) Rs. 20 lakhs (d) Rs. 25 lakhs
(e) None of the above
82. Banks are promised to grant loans against
certificates of deposits _____?
(a) Yes (b) No
(c) Yes, only to NRI
(d) Yes, only up to 50% of the face value
(e) None of the above
83. Commercial paper may be issued for a period
of ____?
(a) 90 days (b) 91 to 180 days
(c) 181 days to one year (d) 7 days to 1 year
84. The Stock Exchange Board of India was set up
by a Special Act in ____?
(a) 1988 (b) 1989 (c) 1987
(d) 1990 (e) None of the above
85. Demand deposits mean _____?
(a) Deposits which can be on demand by the
depositor
(b) Current deposits (c) Fixed deposits
(d) Short deposits (e) None of the above
86. What is Call Money”?
(a) Money borrowed and lent for overnight or a
day
(b) Money borrowed for more than a day but up
to 3 days
(c) Money borrowed for more than a day but
Up to 7 days
(d) Money borrowed for more than a day but
Up to 14 days
(e) None of the above
87. Time deposits means _____?
(a) The deposits which are deposited in a bank
for a fixed period
(b) Time deposits include overdue fixed deposits
(c) Time deposits do not include recurring
deposits as well
(d) Time deposits do not include deposits under
Home Loan Account Scheme
(e) None of the above
88. Fixed deposits are for the bank ____?
(a) Demand liability (b) Fixed asset
(c) Time liability (d) None of the above
(e) None of the above
89. The Negotiable Instruments Act deals with
____?
(a) Cheques, demand drafts, banker’s cheques
(b) Promissory notes, bills of exchange and
cheques
(c) Bills of exchange, Cheques and demand
drafts
(d) Cheques, demand drafts and saving bank
withdrawal forms
(e) None of the above
90. “Muhammad Yunus” is associated with
Banking Industry and is acclaimed for his
contribution in the field of ____?
(a) Micro-finance
(b) Technological advancement
(c) Consumer finance
(d) Banking Reforms in Bangladesh
(e) Low-cost housing
91. A NBFC is prohibited to offer or undertake
_____?
(a) accept demand deposits
(b) accept time deposits
(c) Lend long term loans
(d) Pay a higher rate of interest on deposits as
compared to Banks
(e) None of the Above
92. Small Industries Development Bank of India is
wholly subsidiary of _____?
(a) RBI (b) Exim Bank (c) NABARD
(d) IDBI (e) None of the above
93. Small Industries Development Bank of India’s
Single Window scheme means that a borrower is
granted _____?
(a) Both term loan for fixed assets and loan for
working capital through the same agency,
namely, SFCs or Commercial Banks
(b) Both term and working capital through SIDBI
itself
(c) Both term loan and working capital through
IDBI
(d) None of the above
93. NABARD provides refinance to ______?
(a) Scheduled commercial banks
(b) Co-operative banks
(c) Regional rural banks
(d) All the above
(e) None of the above
94. NABARD provides refinance assistance for
______?
(a) Promotion of agriculture
(b) Promotion of small scale industries
(c) Cottage and village industries
(d) All the above
(e) None of the above
95. The Export-Import Bank of India was set up in
______?
(a) July 1969 (b) April 1970
(c) January 1982 (d) April 1982
(e) None of the Above
96. Exim Bank also provides ______?
(a) Refinance facilities
(b) Consultancy and technology services
(c) Services of finding foreign markets for
exporters
(d) All the above
97. Exim Bank concentrates on ______?
(a) Medium-term financing
(b) Short-term financing
(c) Short and medium-term financing
(d) Short and long-term financing
(e) None of the above
98. The Regional Rural Banks were set up in
_____?
(a) January 1, 1975 (b) March 11, 1975
(c) April 1, 1975 (d) October 2, 1975
(e) None of the above
99. Regional Rural Banks were set up under
_____?
(a) Reserve Bank of India Act
(b) Regional Rural Banks Act, 1976
(c) NABARD Act
(d) None of the above
100. Regional Rural Banks are classified under
_____?
(a) Land Developments Banks
(b) Co-operative Banks (c) Commercial Banks
(d) Public Sector Banks (e) None of the Above
101. The chairman of Regional Rural Bank is
appointed by _____?
(a) State Government
(b) Reserve Bank of India
(c) Central Government
(d) Sponsoring bank in consultation with
NABARD
(e) None of the above
102. Which of the following is not a measure to
control inflation as adopted by Govt. of India
and/or RBI?
(a) Monetary Policy (b) Fiscal Policy
(c) Financial Inclusion (d) Price control
(e) Bank Rate Policy
103. Current accounts are meant and useful for
_____?
(a) Investment purposes
(b) Identity purposes
(c) Savings purposes
(d) Day-to-day business needs
(e) Operational convenience
104. A _____ card is basically a payment
mechanism
which allow the holder to make purchase
without any immediate cash outflows either
physically or through his accounts?
(a) Debit (b) Smart (c) Credit
(d) ATM (e) Kisan Credit
105. What do we mean by “Demat Accounts” in
the financial markets in India?
(a) an account which is opened by the people of
the lower income group of society
(b) an account in which trading of shares is done
(c) an account, which can be opened only by the
Minors
(d) an account, of the nature of Current account,
which can be opened only by the Corporate
Houses
(e) None of the above
106. The ‘monetary base for credit expansion’
consists of _____?
(a) The total value of ‘high-powered money’
(b) The demand and time deposit liabilities
(c) The size of the deficit in the government’s
budget
(d) All of these (e) None of the above
107. Pledge of advance is made against _____?
(a) Gold (b) Commodities
(c) Coins and notes (d) All the above
(e) None of the above
108. Industrial co-operatives covered under SSI
can raise loan without ceiling. The loan will be
refinanced by ____?
(a) IDBI (b) RBI (c) NABARD
(d) DICGC (e) None of the above
109. Which bank does not belong to State Bank
Group?
(a) State Bank of Indore
(b) Banaras State Bank
(c) State Bank of Bikaner and Jaipur
(d) State Bank of Patiala
(e) None of the Above
110. CBS stand for?
(a) Centralised banking system
(b) Computer based Solution
(c) Core banking Solution
(d) Customised banking Solution
(e) None of the Above
111. Which of the following would fall under
Retail Banking?
(a) Home Loan (b) Vehicle Loan
(c) Credit cards (d) Mutual Funds
(e) All of these
112. Convertibility of Rupee means _____?
(a) Any amount of Rupee can get converted into
other approved currencies, without any legal
complications or any questions asked about the
purpose.
(b) A limited amount of Rupee can get converted
into other approved currencies, without any legal
complications or any questions asked about the
purpose.
(c) A limited amount of foreign currency can get
converted into Indian Rupee and be kept in a
foreign currency Bank deposit, without any legal
complications or any questions asked about the
purpose.
(d) None of the Above
113. Which of the following is/are true about the
“Sub- Prime Crisis”- term which was in the news
recently?
(1) It is a Mortgage crisis referring to Credit
default by the borrowers.
(2) Sub-Prime borrowers were those borrowers
who were rated low and were high risk borrows.
(3) This crisis originated out of negligence in credit
rating of the borrowers.
(a) Only 1 (b) Only 2 (c) Only 3
(d) All of the above (e) None of the above
114. Commercial banks influence money supply
through ____?
(a) Printing of one rupee notes
(b) Augmentation of savings and time deposits
(c) Provision of high denomination notes
(d) Creation of demand deposits
(e) None of the above
115. Minimum cash reserves fixed by law
constitute -------------(a) A percentage of aggregate deposits of the
bank
(b) A %age of aggregate loans and advances of the
bank
(c) A %age of capital & reserves of the bank
(d) All of the above is correct
(e) None of the above is correct
116. An increase in bank rate, other things being
equal, will result into ____?
(a) A decline in the cost of credit including greater
and the demand for borrowing
(b) An increase in the cost of credit discouraging
demand for credit
(c) No change in the cost of credit and the demand
for borrowing
(d) Cost of credit has no relationship with demand
for borrowing
(e) None of the above
117. Intangible assets are _____?
(a) Gold
(b) Patents, copyright, goodwill
(c) Home (d) All the above
(e) None of the above
118. The Banking Regulations Act, 1949 was
enacted to _____?
(a) Nationalise the banks
(b) Open regional rural banks
(c) Consolidate and amend the laws relating to
banking companies
(d) Inviting foreign banks
(e) None of the above
119. The Banking Regulation Act was
implemented on ______?
(a) September 6, 1949 (b) April 1, 1949
(c) March 10, 1949 (d) March 31, 1949
(e) None of the above
120. The fourteen banks were nationalized on
_____?
(a) July 19, 1969 (b) June 1, 1969
(c) June 16, 1969 (d) July 1, 1969
(e) None of the above
121. The banks were nationalised with the
motive to ______?
(a) Develop the country economically
(b) Give priority to neglected sectors and exports
(c) Extend finances to weak and backward areas
(d) All the above (e) None of the above
122. The remaining six banks were nationalised
on ______?
(a) April 15, 1980 (b) April 5, 1980
(c) April 1, 1980 (d) April 1, 1982
(e) None of the above
123. The six more banks which were nationalized
had demand deposits and liabilities of _____?
(a) Rs. 50 crores or above
(b) Rs. 100 crores or above
(c) Rs. 150 crores or above
(d) Rs. 200 crores or above
(e) None of the Above
124. The main functions of Lead Banks are?
(a) Surveying the resources and potential
(b) Assisting the small units and small borrowers
and other primary lending agencies
(c) Maintaining contacts and liaison with
government and semi-government agencies
(d) All the above
(e) None of the above
125. Who are the Regulators for Regional Rural
Bank?
(a) Reserve Bank of India (b) NABARD
(c) SIDBI (d) Both A and B
(e) None of the above
126. Reserve Bank of India Act, 1934 was enacted
on the recommendations of _____?
(a) The James Raj Commission
(b) The Hilton Young Commission
(c) The Banking Commission, 1993
(d) The President of India
(e) None of the above
127. The term “Bancassurance” means ______?
(a) Assurance of quality services by the Bank
(b) Selling of Insurance products by Banks
(c) Selling of Third party Mutual Funds Products
(d) Selling of Add-on Banking Services
(e) Selling of Credit Cards
128. RBI was established on ___________.
(a) April 1, 1925 (b) April 1, 1935
(c) April 1, 1945 (d) April 1, 1955
129. Which among the following does the RBI not
decide?
(a) CAR (b) CRR
(c) Base Rate (d) Bank Rate
130. What does ‘T’ in RTGS stand for?
(a) Transaction (b) Transfer
(c) Tax (d) Time
131. In banking, IFSC code stands
for_________________.
(a) International Format System Code
(b) Indian Function System Code
(c) International Forex System Code
(d) Indian Financial System Code
132. If a customer does not get a satisfactory
response to his grievance from the bank within
_____ days, then he can approach the Banking
Ombudsman.
(a) 60
(b) 90
(c) 30
(d) 15
133. Which of the following organizations is the
Mutual Fund Market regulator?
(a) AMFI
(b) SEBI
(c) CIBIL
(d) CRISIL
134. Which of the following statements is
incorrect regarding RTGS system?
(a) The transactions take place in real time
(b) The system operates on DNS (Deferred Net
Settlement) basis
(c) The minimum amount that can be remitted is
Rs. 2 lakh
(d) Service charges for RTGS transactions vary
from one bank to another
135. _____is the organization that maintains the
borrower’s history in India.
(a) CRISIL
(b) CIBIL
(c) CARE
(d) RBI
136. RBI has directed commercial banks to
resolve ATM transaction-related complaints
within seven working days. If a commercial bank
is unable to do so then it has to pay Rs.____per
day as compensation.
(a) 50
(b) 100
(c) 200
(d) 225
137. RTGS as well as NEFT uses
(a) UTR Number (b) MICR (c) IFSC (d) DNS
138. Which of the following statement is
incorrect about SEBI?
(a) SEBI is a capital market regulator
(b) SEBI is the mutual fund regulator
(c) SEBI also regulates the credit rating agencies in
India
(d) None of them is wrong
139. What does liquidity mean?
(a) It means how cash is converted into gold
(b) It means how cheaply and quickly an asset
is converted into cash
(c) It means how cash is converted into SDR
(Special Drawing Rights)
(d) It means how uncertain the money market
conditions are
140. SWIFT is a commonly used acronym in the
banking industry. The ‘I’ in SWIFT stands
for_______.
(a) Interbank (b) International
(c) Intercom (d) Indian
141. ________isn’t a method of measurement of
National Income.
(a) Value-added method (b) Income method
(c) Investment method (d) Expenditure method
142. In India, the commercial banks are required
to provide ____ ___ % of their ANBC (Adjusted
Net Bank Credit) to priority sector.
(a) 15
(b) 25
(c) 35
(d) 40
143. What does FSDC stand for?
(a) Financial Security and Development Council
(b) Financial Stability and Development
Council
(c) Fiscal Security and Development Council
(d) Fiscal Stability and Development Council
144. ___________has been declared the first
‘total banking state’ in India, successfully
implementing the total financial inclusion
thereby ensuring banking facility to all
households.
(a) Maharashtra
(b) Kerala
(c) Himachal Pradesh (d) Uttarakhand
145. RBI has introduced “Marginal Standing
Facility” with the objective of:
(a) Controlling Inflation
(b) Containing instability in long term inter-bank
rates
(c) Containing instability in the overnight
interbank rates
(d) All of the above
146. _____________are the beneficiaries of the
“Reverse Mortgage Scheme”.
(a) Government employees (b) Senior citizens
(c) Unemployed persons
(d) Persons of BPL category
147. RBI was nationalized in the year
(a) 1949
(b) 1952
(c) 1955
(d) 1964
148. Which of the following is/are associated
with the fiscal policy?
1. Marginal Standing Facility
2. Devaluation of Currency
3. Market Stabilization Scheme
(a) 1 & 2
(b) Only 3
(c) 2 & 3
(d) Only 2
149. ______is the percentage of total deposits of
a bank which it has to keep with itself in the form
of liquid assets.
(a) Statutory Liquidity Ratio (SLR)
(b) Cash Reserve Ratio (CRR)
(c) Statutory Reserve Ratio
(d) Cash Ratio
150. The exchange rate in India is dependent
upon:
1. Government policy
2. Demand-supply forces
3. Monetary policy objectives
(a) Only 2
(b) 2 & 3
(c) 1 & 2
(d) 1, 2 & 3
151. Collateralized Borrowing and Lending
Obligation (CBLO) is a/an ________.
(a) Money Market Instrument
(b) Instrument of Monetary Policy
(c) Type of Risk Cover
(d) Stock Market Instrument
152. Often, we read in newspapers that the RBI
has changed the Repo rate and the Reverse Repo
rate by a few basis points. What is a basis point?
(a) Ten % of one hundredth point
(b) One hundredth of 1
(c) One tenth of 1% (d) Ten % of 100
153. Banks generally don’t pay interest on money
deposited in which of the following accounts?
(a) Savings account (b) Current account
(c) Fixed deposit account (d) None of these
154. ‘Fiat Money’ is defined as the money which
is
(a) Accepted internationally
(b) Accepted temporarily in lieu of gold
(c) Issued by keeping gold or silver as deposit
(d) Decreed as money by the government
155. Demand-pull inflation can be caused by
which of the following?
(a) A decline in consumption expenditure
(b) A sharp increase in lending rates
(c) A steep decline in income tax
(d) An increase in direct taxation
156. For obtaining which among the following
does a customer not require a bank account?
(a) A loan
(b) A cheque
(c) A banker’s draft (d) A credit card
157. RBI isn’t expected to perform the role of
(a) Acting as a clearing house
(b) Working as a banker to the government
(c) Managing forex
(d) Accepting deposits from general public
158. In India, which among the following is/are a
part of Legal Tender Money?
(a) Both coins and currency notes
(b) Both coins and bank drafts
(c) Both currency notes and SDRs
(d) Only currency notes issued by RBI
159. __________is the duty applied by a
government to control the exports of an article of
trade, so that the article of trade can be used by
the local markets rather than in foreign
countries.
(a) Customs duty
(b) Excise duty
(c) Anti-dumping duty
(d) Dumping duty
160. Who decided on the quantity of coins to be
minted?
(1) The Government of India
(2) RBI
(3) Either 1 or 2
(4) All of the above
(5) None of the above
161. Which among the following is not incorrect?
(a) Money market provides long term source of
finance
(b) Recession in the industrial sector in India is
normally due to a fall in exports
(c) Ways and means advances given by RBI are
nowhere related to the state’s revenue
(d) Exchange rate is fixed by RBI
162. We have read in the newspapers that the
Government of India has signed a DTAA to
broaden the scope of article of exchange of
information to include exchange of banking
information. What does DTAA stand for?
(a) Double taxation article agreement
(b) Double taxation avoidance agreement
(c) Double taxation avoidance arrangements
(d) Dual tax agreement arrangement
163. Which of the statements mentioned below
is/are correct?
1. T-bills are issued by the Government of India on
behalf of the RBI
2. T-bills are short-term money market
instruments
3. T-bills cannot be purchased by a resident of
India
(a) All are correct
(b) 2 & 3 are correct
(c) Only 2 is correct (d) Only 3 is correct
164. Which of the following is an incorrect
statement?
(a) Reverse Repurchase operation by RBI is aimed
at increasing the liquidity in the banking system
(b) Special Drawing Rights (SDR) are issued by
IMF
(c) Rupee appreciation results in decrease in
imports
(d) Increase in the inflation rate leads to decline in
real interest rate
165. What purpose does the MICR number,
which is present on a cheque, serve?
(a) It is used to identify the genuineness of the
cheque
(b) It is used to identify the bank branch
(c) It is nothing but a type of cheque number
(d) Both (a) and (b)
166. In TRIPS, what does ‘I’ stand for?
(a) Intellectual
(b) Information
(c) Indian
(d) Infra
167. Insurance companies use the bank sales
channels to sell their products. Which of the
following terms describes this selling process?
(a) Scheduled banking (b) Scheduled Insurance
(c) Bankinsuring
(d) Bancassurance
168. Which of the following acts is useful in
controlling HAWALA transactions?
(a) FEMA Act
(b) RBI Act
(c) DICGC Act
(d) Banking Regulation Act
169. What does the term SME stand for?
(a) Small and Micro Enterprises
(b) Small and Medium Enterprises
(c) State and Medium Economy
(d) Small and Medium Economy
170. ‘CAMELS’ is a type of Bank Rating System. In
CAMELS, what does ‘C’ stand for?
(a) Currency
(b) Compensation
(c) Capital Adequacy (d) Capitalisation
171. In banking parlance, ‘NPA’ stands for
(a) Non Performing Asset
(b) Net Producing Asset
(c) Net Performing Asset
(d) Not Promoting Asset
172. LAF is an indirect instrument of monetary
policy, which is used by \RBI to regulate the
liquidity in banking system. ‘LAF’ stands for:
(a) Liquidity Adjustment Facility
(b) Liquidity Account Facility
(c) Liquidity Allotment Facility
(d) Long Adjustment Feature
173. _____________are NOT a part of the
Scheduled Banking structure in India.
(a) Money lenders
(b) Public sector banks
(c) Private sector banks (d) Regional rural banks
174. ‘MAT’ is an acronym which stands for
(a) Maximum Alternate Tax
(b) Minimum Alternate Tax
(c) Minimum Affordable Tax
(d) Maximum Affordable Tax
175. Often, we read in the newspapers that
several Indian companies are taking the FCCB
route to raise capital. What does the term FCCB
stand for?
(a) Foreign Currency Convertible Bond
(b) Foreign Convertible Credit Bond
(c) Financial Consortium and Credit Bureau
(d) Future Credit and Currency Bureau
176. ________________was the main objective
of the Fiscal Responsibility and Budget
Management Act, 2003.
(a) Achieving fiscal surplus
(b) Eliminating revenue deficit
(c) Eliminating fiscal deficit
(d) Stopping money laundering
177. DEPB (Duty Entitled Passbook) scheme
which ended in September 2011 was related to
(a) Foreign direct investment
(b) Foreign institutional investment
(c) Export promotion
(d) Import substitution
178. ‘KYC’ (Know Your Customer) norms were
implemented in the Indian banking system in
2002 as per the directive of
(a) SEBI
(b) RBI
(c) IBA
(d) IRDA
179. For issuing notes, RBI has required to hold
the minimum reserve of Rs. 200 crore of which
not lesss than Rs…. crore to be hold in gold.
(1) 85 (2) 100 (3) 115 (4) 125 (5) 200
180. Which of the following is a correct
statement ?
(a) Normally no interest is paid on current
deposit accounts,
(b) Interest is paid on current accounts at the
same rate as term deposit accounts
(c) The rate of interest on current account and
savings account are the same
(d) No interest is paid on any deposit by the bank,
(e) Savings deposits are the same as current
deposits
181. What do you understand by the term
‘Mortgage’?
(a) Sale of moveable security in the event of
default by the borrower
(b) Registration of charge with the Registrar of
Companies
(c) Making the security of immovable property
available as a cover for a home loan by the
borrower
(d) Registration of charge with the Regional
Transport Authority
(e) Returning of the security to borrower by the
bank of receipt of full payment
182. Which of the following is NOT a source of
funds of a commercial bank?
(a) Capital,
(b) Borrowings from RBI
(c) Call money,
(d) Deposits
(e) Cash reserves with RBI
183. The Banking Ombudsman
(a) is in charge of bank loan for buses,
(b) fixes the rates of interest for loans
(c) resolves complaints of customers
(d) issues licences for new bank branches
(e) is the head of all nationalized banks
184. “Scheduled bank” means a bank
(a) incorporated under the Companies Act, 1956,
(b) authorized to the Banking business,
(c) governed by the Banking Regulation Act, 1949,
(d) Included in the Second schedule to the
Reserve Bank of India Act 1934
185. For filing and resolving customer complaints
the banking Ombusdsman
(a) charges a fee of 500/- ,
(b) does not charge any fee
(c) charges a fee of 1500/(d) charges a fee of 1000/-,
(e) none
186. How many banks are presently associated of
State Bank of India ?
(a) Eight,
(b) Seven
(c) Six,
(d) Five
(e) Four
187. To use smart cards/ debit cards/ credit cards
for the purchase of an item or for payment of a
service of a merchant’s store, the card has to be
swiped in a terminal known as:
(a) Point of Sale terminal,
(b) Real time terminal
(c) Shopping terminal
(d) All of the above,
(e) None of the above
188. A bank account in which a depositor can
deposit his funds any number of times he likes
and can also withdraw the same any number of
times he wishes is called
(a)Fixed deposit account,
(b) Saving account
(c) Current Account
(D) Recurring account
189. Any note, which is wholly or partially,
obliterated, shrunk, washed, altered or
indecipherable is a/an
(a) mutilated note, (b) imperfect note, (c) soiled
note, (d) mismatched note , (e) none of these
190. 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
191. For repayment of loan availed from Banks/
NBFC we come across a term known as EMI.
What does it stand for?
(a) Equated Money index,
(b)Easy Money Installment
(c) Equated Monthly Installment
(d) Equal Monthly Installment
(e) Equal Minimum Installment
192. The loan amount in case of a reverse
mortgage is decided taking into account which of
the following?
(a) Value of House property,
(b) Age of the borrower
(c) prevalent Interest rates.
(1) only (A), (2) Only (B),
(3) Only (C), (4) All (A), (B),& (C)
(5) none of these
193. In India, the RBI prescribes the minimum SLR
level for Scheduled Commercial Banks in India in
specified assets as a percentage of Bank’s
(a) Net Demand and Time Liabilities,
(b) Demand Liabilities (c) Time Liability,
(d) None of the above
(e) All of the above
194. The methods of credit control by the
Reserve Bank of India may be broadly divided
into two parts .These are:
(a) open and close,
(b) Quantitative and Qualitative
(c) monetary and fiscal
(d) rural and urban
(e) none of the above
195. As per the directives issued by RBI, a cash
credit or overdraft account will be treated as
Nonperforming Asset if:
(a) the account remains ‘out of order’
(b) there are no credits in the account in the
month in which interest is applied
(c) the debit balance in the account has exceeded
the sanctioned limit during the reporting month
(d) all of the above
(e) none
196. If neither the word ‘Bearer’ nor ‘Order’ is
written on a cheque , payment will be made by
treating it as:
(a) Bearer Cheque,
(b) an Order Cheque
(c) At bank’s discretion
(d) cannot be paid at all
(e) None of the above
197. Currency notes issued by RBI are fully
covered by:
(a) Approved assets,
(b) Gold
(c) Foreign exchange
(d) All of these
(e) None of the above
198. The government has stipulated that quoting
Permanent Account Number is mandatory for
(a) Current Accounts,
(b) Demat Account
(c) Term Deposits
(d) Savings Bank
(e) None of the above
199. Truncation of cheques means:
(a) The cheques in the paper form will be retained
by the collecting banker and he will submit
(b) Entire clearing operations would be done only
through computers
(c) Cheques will be scanned and the electronic
image, instead of physical cheque, will be
transmitted in the clearing cycle
(d) Debiting the drawer’s account through internet
Banking
(e) None of the above
200. The paid –up capital of Non- Scheduled Bank
is less than
(a) 5 lakh,
(b) 10 lakh
(c) 12 lakh
(d) 15 lakh
(e) None of the above
201. In case a depositor wishes to withdraw his
deposits prematurely, banks
(a) do not allow the same till maturity of the
deposits
(b) charge a penalty for the same
(c) do not charge any penalty and allow the same
(d) do not allow premature withdrawal
(e) none of the above
202. When the foreign exchange deals take place
through telephone or other electronic system
(and not through an exchange) it is called—
(a) over the counter
(b) over the electronic media
(c) over all channels
(d) over the exchange (e) none of these
203. 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 if there is balance in the
account
(d) it is a card which carries prepaid balance,
(e) It is a card which can be used for making STD
calls.
204. Which of the following correctly describes
what sub-prime lending is?
A. Lending to the people who cannot return the
loans.
B. Lending to the people who are high value
customers of the banks.
C. Lending to those who are not a regular
customer of a bank.
(a) Only A,
(b) Only B
(c) Only C,
(d) All, A, B and C
(e) A and C
205. Which among the following is not a power
of RBI?
(a) Inspection of banks,
(b) Nationalization of Banks
(c) Call of returns,
(d) Control the lending policies of the banks
(e) All are powers
206. Open Market Operation By RBI are the part
of its
(a) Fiscal Policy,
(b) Non fiscal Policy
(c) Income Policy,
(d) Credit policy,
(e) none of these
207. When it comes to the following term
namely- IPO, what do you mean by “P”?
(a) Provisions;
b) Public;
c) Private;
d) Prudent;
e) Pension
208. What do you mean by “C” in the term called
as FMCG?
(a) Customer; b) consumer;
c) creditor;
d) country;
e) none of the above
209. In the term called as AMFI, what do you
mean by “M”?
(a) Mutual;
b) money;
c) Managing;
d) Miscellaneous;
e) none of the above
210. When it comes to the following term
namely- PLR – what do you mean by ”L”?
(a) Liberalisation;
b) Liquidity; c) Lending;
d) License;
e) Loan
211. When it comes to the term called as
“OTCEI”, what do you mean by “E”?
(a) Exchange;
b) Environment;
c) Environment;
d) Entitlement;
e) Enlistment
212. ______refers to a market where securities
are traded after being initially offered to the
public in the primary market and/or listed on the
stock exchange.
(a) Security market; b) secondary market;
c) stock market;
d) Bond market;
e) debenture market
213. When it comes to the following term – FPO,
what do you mean by “F”?
(a) Further;
b) facility;
c) favour;
d) Follow On
e) none of the above
214. In the ______________, the securities like
shares and debentures are offered to the public
subscription for the purpose of raising capital or
fund:
(a) Secondary market;
b) Primary market;
c) share market;
d) debenture market;
e) none of the above
215. MICR bank code line on a cheque consists of
besides the cheque or draft number, nine digits
number. What do the first three digits of this
number denote?
a) Centre/city;
b) Bank;
c) Branch of a bank;
d) account category – current account/savings
bank/cash credit account;
e) none of the above
216. You are aware of MICR code available at the
bottom of the cheque/draft and what the last
three digits of a nine digits number on a MICR
band code line denote?
a) Centre/city;
b) bank;
c) Branch of a bank;
d) Account category – savings bank/current
account/cash credit account;
e) none of the above
217. Can you say what do the middle three digits
of a nine digits number on a MICR band code line
denote?
a) Centre/city;
b) bank;
c) Branch of a bank;
d) Account category – current account/savings
bank account/cash credit account;
e) None of the above
218. What do you mean by a clearing house?
a) Collection centre for cheques and demand
drafts;
b) Pooling centre for excess currencies received
from the branches;
c) Collection centre for collection of tax and other
receipts;
d) collection centre for issuing debit and credit
cards to customers;
e) None of the above
219. You Are Aware Of The Existing Of Bcsbi –
Can You Provide The Missing Words In The Term:
Banking _______And ______Board Of India?
A) Codes And Settlements;
B) Codes And Standards;
C) Companies And Standards;
D) Committees And Systems;
E) Commissions And Selectors
220. The returned non-resident Indians are
permitted to open the following accounts:
a) Non-resident external account;
b) Non-resident ordinary account;
c) RFC account;
d) FCNR account;
e) None of the above
221. The main foreign exchange reserves in the
country comprises of the following:
a) Foreign currency assets;
b) Gold stock;
c) Special drawing rights;
d) Reserve tranche position;
e) All the above
222. MIBOR represents
a) The interest rate at which bank borrows
fund from other banks;
b) The interest rate at which bank borrows from
RBI;
c) the interest rate at which RBI borrows from
commercial banks;
d) the rate at which banks borrow from the public;
e) the rate at which the banks in India borrows
from foreign banks
223. What do you mean by CRISIL?
a) Credit rating information services of India
Limited;
b) Credit rating Intelligence services of India
Limited;
c) Credit rating Indicative services of India
Limited;
d) Credit rating integrated services of India
Limited;
e) none of the above
224. In banking the term DTL refers to;
A. Detail time limit. B. Demand and time limit.
C. Demand and time liabilities
D. None of these.
225. Full form of the term "FINO" isA. Financial inclusion network and operations.
B. Financial inclusion news and operations.
C. Financial investment network and operations.
D. None of these.
226. Gross Domestic Product is defined as the
value of all:
(1) Goods produced in an economy in a year
(2) Goods and services produced in an economy in
a year
(3) Final Goods produced in an economy in a year
(4) Final Goods and services produced in an
economy in a year
227. The Draft of the Five Year Plans in India is
approved by the:
(1) National Development Council
(2) Planning Commission
(3) National Productivity Council
(4) Ministry of Finance
228. Deficit financing implies(1) Printing new currency notes
(2) Replacing new currency with worn out
currency
(3) Public revenue in excess of public expenditure
(4) Public expenditure in excess of public revenue
229. Present minimum & maximum limit for
RTGS transactions is ____.
(1) Rs.50000, Rs 200000
(2) Rs. 1 lac, No Limit
(3) Rs. 2 lac, Rs 5 lac
(4) Rs.5 lac, Rs 10 lac
(5) Rs. 2 lac, No Limit
230. The Capital Account Convertibility of the
Indian rupee refers to:
(1) that the Indian rupee can be exchanged for
the US dollar for international trade in goods and
service
(2) that the Indian rupee can be exchanged for
any major currency for the purpose of trading
financial assets
(3) that the Indian rupee can be exchanged by the
authorized dealer for travel purpose
(4) that the Indian rupee can be exchanged for any
major currency for the purpose of trade in goods
and services
(5) None of the above