Banking Awareness 2012

1. Which of the following statements is true? (1) Banks cannot accept demand and time deposits from public (2) Banks can accept only demand deposits from public (3) Banks can accept both demand and time deposits from public (4) Banks can accept both demand and time deposits from public (5) Banks can accept demand and time deposits only from government 2. Which of the following is the correct statement? (1) State Bank of India is the sole authority to issue and manage currency in India (2) A nationalized bank is the sole authority to issue and manage currency in India (3) A cooperative bank is the sole authority to issue and manage currency in India (4) RBI is the sole authority to issue and manage currency in India (5) None of the above 3. Interest payable on savings bank accounts is (1) not regulated by RBI (2) regulated by Sate Governments (3) regulated by Central Government (4) regulated by RBI (5) regulated by Finance Minister 4. The usual deposit accounts of banks are (1) current accounts, electricity accounts and insurance premium accounts (2) current accounts post office savings bank accounts and term deposit accounts (3) loan accounts, savings bank accounts and term deposit accounts (4) current accounts, savings bank accounts and term deposit accounts (5) current bill accounts and term deposit accounts 5. Fixed deposits and recurring deposits are (1) repayable after an agreed period (2) repayable on demand (3) not repayable (4) repayable after death of depositors (5) repayable on demand or after an agreed period as per banks choice 6. Accounts are allowed to be operated by cheques in respect of (1) both savings bank accounts and fixed deposit accounts (2) savings bank accounts and current accounts (3) both savings bank accounts and loan accounts (4) both savings bank accounts and cash accounts only (5) both Current accounts and fixed deposit accounts

1|Page

Banking Awareness-By Akshay Almast

7. Which of the following is correct statement? (1) Normally no interest is paid on current deposit accounts (2) Interest is paid on current accounts at the same rate as term deposit accounts (3) The rate of interest on current account and savings account are the same (4) No interest is paid on any deposit by the bank (5) Savings deposits are the same as current deposits 8. Mortgage is a (1) security on movable property for a loan given by a bank (2) security on immovable property for a loan given by a bank (3) concession on immovable property for a loan given by a bank (4) facility on immovable property for a loan given by a bank (5) security on immovable property for a deposit received by a bank 9. Which of the following is known as cross selling by banks? (A) Sale of a debit card to a credit card holder. (B) Sale of Insurance policy to a depositor. (C) Insurance of cash against cheque presented by a third party. (1) Only (A) (2) Only (B) (3) Only (C) (4) Both (A) and (C) (5) All (A), (B) and (C) 10. Financial inclusion means provision of (1) financial services namely, payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the same (2) ration at affordable cost to persons not yet given the same (3) house at affordable cost to persons not yet given the same (4) food at affordable cost to persons not yet given the same (5) education at affordable cost to persons not yet given the same 11. When a bank returns a cheque unpaid, it is called (1) payment of the cheque (2) drawing of the cheque (3) canceling of the cheque (4) dishonour of the cheque (5) taking of the cheque 12. NEFT means (1) National Electronic Funds Transfer system (2) Negotiated Efficient Fund Transfer system (3) National Efficient Fund Transfer solution (4) Non Effective Fund Transfer system (5) Negotiated Electronic Foreign Transfer system

2|Page

Banking Awareness-By Akshay Almast

13. Upper limit prescribed for RTGS transaction is (1) Rs. 1 lac (2) Rs. 2 lacs (3) Rs. 5 lacs (4) Rs. 50 lacs (5) No upper limit is prescribed 14. Distribution of insurance products and insurance policies by banks as corporate agents is Known as (1) General Insurance (2) Non-life Insurance (3) Bancassurance (4) Insurance Banking (5) Deposit Insurance 15. In order to attract more foreign exchange the Government of India decided to allow foreign investment in LLP firms. What is full form of LLP as used in this reference? (1) Local Labour Promotion (2) Low Labour Projects (3) Limited Loan Partnership (4) Longer Liability Partnership (5) Limited Liability Partnership 16. Interest on Saving bank account is now calculated by banks on (1) minimum balance during the month (2) minimum balance from 7th to last day of the month (3) minimum balance from 10th to last day of the month (4) maximum balance during the month (5) daily product basis 17. Largest shareholder (in percentage shareholding) of a nationalized bank is (1) RBI (2) NABARD (3) LICI (4) Government of India (5) IBA 18. When the rate of inflation increases (1) purchasing power of money increases (2) purchasing power of money decreases (3) value of money increases (4) purchasing power of money remains unaffected (5) amount of money in circulation decreases 19. A centralized databases with online connectivity to branches, internet as well as ATM-network which has been adopted by almost all major banks of our country is own as (1) Investment Banking (2) core Banking (3) Mobile Banking (4) National Banking (5) Specialized Banking
3|Page
Banking Awareness-By Akshay Almast

20. The Unit Trust of India came into existence in (1) 1960 (2) 1962 (3) 1964 (4) 1966 (5) 1968 21. Which of the following is example of financial assets? (1) National Saving Certificates (2) Infrastructure Bonds (3) Indira Vikas Patra (4) Krishi Vikas Patra (5) All of the above 22. Capital market is a market which deals in (1) short-term funds (2) long-term funds (4) All of the above (5) None of the above

(3) gilt-edge securities

23. Regional Rural Banks fall within supervisory purview of (1) SBI (2) RBI (3) SEBI (4) IRDA (5) None of these 24. IRDA with its headquarters at is the regulatory authority for all insurance companies in India including the Life Insurance Corporation of India. (1) Hyderabad (2) Bengaluru (3) Mumbai (4) Delhi (5) Chandigarh 25. Mutual Funds fall within 7 supervisory purview of (1) SBI (2) RBI (4) IRDA (5) None of these

(3) SEBI

26. Which of the following does not come under the category of Development Banks? (1) Industrial Development Bank of India (2) Small Industries Development Bank of India (3) Industrial Investment Bank of India (4) State Finance Corporation (5) Export-import Bank 27. Main financial instruments of corporate sector are (i) Shares (ii) Debentures (iii) Public Deposits (iv) Loan from Institutions Select the correct answer by using of the following codes (1) i and ii (2) ii and iii (3) iii and iv (4)1, ii and iv (5) All I, ii, iii and iv 28. Financial institutions (1) promote savings (2) mobilise savings (3) allocate savings among different users (4) All of the above (5) None of the above 29. Which of the following is not an / example of primary securities? (1) Bills (2) Bonds (3) Shares (4) Book debts (5) New currency
4|Page
Banking Awareness-By Akshay Almast

30. Indian Financial System / comprises of (1) Scheduled Commercial Banks (2) Non-banking Financial Institutions (3) Urban Cooperative Banks (4) All of the above (5) None of the above 31. The Bombay Stock Exchange was 7 made functional as early as (1) 1870 (2) 1901 (3) 1935 (4) 1951 (5) 1949 32. The Unit Trust of India come into existence in (1) 1964 (2) 1970 (3) 1975 (4) 1980 33. 19 July 1969, how commercial Banks were nationalised? (1) 13 (2) 14 (3) 15 (4) 16 34. New Private Banks are being given licenses since (1) 1991 (2) 1992 (3) 1993 (4) 1995 35. The gilt-edged market refers to the market for (i) Government securities (ii) Semi-government securities (iii) Corporate securities Select the correct answer (1) only i (2) i and ii (3) ii and iii (4) i, ii and iii (5) only iii 36. First share market in India established in (1) Delhi (2) Mumbai (4) Chennai (5) None of these (5) 1982

(5) 20

(5) 2001

(3) Kolkata

37. Consider the following statements: (i) Securities that have an original maturity that is greater than 1 year are traded in capital markets.(ii) The best known capital market securities are stocks and bonds. Select the correct answer (1) (i) is true and (ii) is false (2) (i) is false and (ii) is true (3) Both are true (4) Both are false (5) None of the above 38. Consider the following statements: (i) Securities that have an original maturity that is greater than one year are traded in money markets.(ii) The best known money market securities are stocks and bonds. (1) (i) is true and (ii) is false (2) (i) is false and (ii) is true (3) Both are true (4) Both are false (5) None of the above 39. The primary issuers of capital market securities include (1) the Central Government (2) the local Government (3) corporations (4) the Central & Local Governments & corporations (5) Local Government & corporations
5|Page
Banking Awareness-By Akshay Almast

40. Which of the following is a / characteristic of a capital market instrument? (1) Liquidity (2) Marketability (3) Long maturity (4) Liquidity premium (5) All of the above 41. Which one of the following is a capital market instrument? (1) A Treasury bill (2) A negotiable certificate of deposit was (3) Commercial paper (4) All of the above (5) None of the above 42. T-bills are financial instruments initially sold by ________ to raise funds. (1) Commercial Banks (2) the government (3) corporations (4) agencies of the State Government (5) None of the above 43. Commercial paper is a short-term security issued by ________ to raise funds. (1) the Reserve Bank of India (2) Commercial Banks (3) large and well-known companies (4) National Stock Exchange (5) State and Local Governments 44. Which of the following statements is true regarding a corporate bond? (1) A corporate callable bond gives the holder the right to exchange it for a specified number of the companys common shares (2) A corporate debenture is a secured / bond (3) A corporate indenture is a secured bond (4) A corporate convertible bond gives the holder the right to exchange the bond for a specified number of the companys common shares (5) Holders of corporate bonds have voting rights in the company 45. Which one of the following is not a money market instrument? (1) A Treasury bill (2) A negotiable certificate of deposit (4) Treasury bond (5) Repo 46. Money lend for 15 days or more in Inter-bank market is called (1) call money (2) notice money (4) All of these (5) None of these 47. Money lent for one day is called (1) call money (4) All of these

(3) Commercial paper

(3) term money

(2) notice money (5) None of these

(3) term money

6|Page

Banking Awareness-By Akshay Almast

48. Specified interest rate on a fixed maturity security fixed at the time of issue is called (1) market rate of interest (2) call rate (3) repo rate (4) coupon rate (5) discount rate 49. Lending of scheduled Commercial Banks, on a fortnightly average basis, should not exceed of their capital fund. (1) 25 per cent (2) 35 per cent (3) 15 per cent (4) 50 per cent (5) None of these 50. A short-term credit investment created by a non- financial firm and guaranteed by a bank to make payment is called (1) bankers acceptance market (2) collateral loan market (3) treasury bill market (4) call money market (5) repo market 51. Money market securities are (1) short-term (4) All of the above

(2) low risk (5) 1 and 2

(3) very liquid

52. Money market instruments (1) are usually sold in large denominations (2) have low default risk (3) mature in one year or less (4) are characterized by all of the above (5) are characterized by 1 and 2 53. Which of the following statements about the money market are true? (1) Not all Commercial Banks deal for their customers in the secondary market (2) Money markets are used extensively by businesses both to warehouse surplus funds and to raise short-term funds (3) The single most influential participant in the US money market is the US Treasury Department (4) All of the above are true (5) 1 and 2 of the above are true 54. In the term repo, the term of the loan is greater than (1) 30 days (2) 20 days (3) 60 days (4) 90 days (5) None of these 55. The money market in India consists of two sectors namely, the organised and the unorganised sector.Which of the following do not fall under unorganised sector? (1) RBI, Commercial Banks and SBI (2) LIC and GIC (3) Unit Trust of India (4) Indigenous Banks (5) None of the above

7|Page

Banking Awareness-By Akshay Almast

56. Money lent for one day in the money market is known as (1) Notice Money (2) Call Money (4) All of the above (5) None of the above

(3) Term Money

57. Money lent for more than one day but less than 15 days in the money market is known as (1) Notice Money (2) Call Money (3) Term Money (4) All of the above (5) None of the above 58. Money lent for 15 days or more in inter-bank market is called (1) Notice Money (2) Call Money (4) All of the above (5) None of the above

(3) Term Money

59. Government security that is a claim on the government and is a secure financial instrument which guarantees of both capital and interest is called (1) Coupon security (2) Gilt-edged security (3) Corporate security (4) All of the above (5) None of the above 60. Which of the following types of institutions are operate in the call money market only as lender? (1) Commercial Banks (2) Primary Dealers (3) Insurance companies (4) SBI (5) None of the above 61. As per prudential norms of RBI, lending of Scheduled Commercial Banks, on a fortnight average basis, should not exceed.. per of their capital fund. (1) 25 (2) 30 (3) 35 (4) 15 (5) 20 62. The market for bankers acceptance which or out of trade transactions, both domestic and foreign, is called (1) Mohey market (2) Capital market (3) Bankers acceptance market (4) Repo market (5) Government security market 63. An unsecured loan extended by one corporate to another is called (1) Commercial papers (2) Treasury bill (3) Inter-corporate deposits (4) Certificates of deposits (5) All of the above 64. Interest is calculated on actual/365 days basis respect of the following products, except one (1) Call money (2) Notice money (3) Term money (4) GOI dated securities (5) None of the above

8|Page

Banking Awareness-By Akshay Almast

65. An institution which accepts deposits, makes business loans, and offers related services is called (1) Saving Bank (2) Commercial Bank (3) Investment Bank (4) Development Bank (5) Central Bank 66. A bank which acts as a banker of other banks is called (1) Saving Bank (2) Commercial Bank (4) Development Bank (5) Central Bank

(3) Investment Bank

67. Which of the following is/are the function(s) of Exchange Banks? (i) Remitting money from one country to another country. (ii) Discounting of foreign bills. (iii) Buying and selling gold and silver (iv) Helping Import and Export Trade. Select the correct answer (1) i and ii (2) ii and iii (3) iii and iv (4) i, ii and iii (5) All i, ii, iii and iv 68. Consumer banks are usually found in (1) India and Pakistan (2) India and UK (4) China and Russia (5) India and China

(3) USA and Germany

69 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 (1) Fixed Deposit Account (2) Saving Account (3) Current Account (4) Recurring Account (5) Demat Account 70. Under which type of account a specified amount is deposited every month for a specific period, say, 12, 24, 36 or 60 months? (1) Fixed Deposit Account (2) Saving Account (3) Current Account (4) Recurring Account (5) Demat Account 71. An inter-bank funds transfer system, where funds are transferred as and when the transactions are triggered, is called (1) Internet Banking (2) Mobile Banking (3) Bill Payment Service (4) Real time Gross Settlement (5) None of the above 72. Which of the following is a primary function of banks? (1) Collection and payment of cheques, rent, interest, etc on behalf of their customers (2) Buying, selling and keeping in safe custody, the securities on behalf of their customers (3) Acting as trustees and executors of the property of their customers on their advice (4) Remitting money from 1 place to the other through bank drafts, mail or telegraphic transfers (5) Accepting deposits 73. The operative guidelines for banks on Mobile Banking Transactions in India were issued in (1) 2008 (2) 2009 (3) 2010 (4) 2011 (5) 2007
9|Page
Banking Awareness-By Akshay Almast

74. To use smart cards/debit cards/credit cards for the purchase of an item or for payment of a service at a merchants store, the card has to be swiped in a terminal known as (1) Point of Sale terminal (2) Real time terminal (3) Shopping terminal (4) All of the above (5) None of the above 75. The Branding Line of Bank of Baroda is (1) International Bank of India (2) Indias International bank (3) Indias Multinational Bank (4) Worlds Local Bank (5) None of the above 76. The logo of Bank of Baroda is known as (1) Sun of Bank of Baroda (2) Baroda Sun (3) Bank of Barodas Rays (4) Sunlight of Bank of Baroda (5) None of the above 77. Lot of Banks in India these days are offering M- Banking Facility to their customers. What is the full form of M in M-Banking? (1) Money (2) Marginal (3) Message (4) Mutual Fund (5) Mobile 78. Which of the following is not the part of the Scheduled Banking structure in India? (1) Money Lenders (2) Public Sector Banks (3) Private Sector Banks (4) Regional Rural Banks (5) State Cooperative Banks 79. Section 14 of Banking Regulation Act, 1949 (1) prohibits a banking company from creating a charge upon any unpaid capital of the company (2) contains a system of licensing of banks by the RBI (3) provides that the subscribed capital of a banking company should not be less than one-half of its authorised capital (4) All of the above (5) None of the above 80. A Bank is under a statutory obligations to honour its customers cheques vide (1) Section 10 of the Banking Regulation Act, 1949 (2) Section 3 of the RBI Act, 1934 (3) Section 31 of the Negotiable Instruments Act, 1881 (4) All of the above (5) None of the above 81. Nationalised Banks have been permitted to offer their equity shares to the public to the extent of 49% of their capital as per amendments made in 1994 in (1) Banking Regulation Act, 1949 (2) Banking Companies (Acquisition & Transfer of Undertakings) Acts 1970/1980 (3) RBI Act, 1935 (4) Nationalisation of Banks Act, 1980 (5) None of the above

10 | P a g e

Banking Awareness-By Akshay Almast

82. How many banks are presently associates of State Bank of India? (1) Eight (2) Seven (3) Six (4) Five (5) Four 83. How many nationalized (1) 14 (2) 15

(3) 19

(4) 20

(5) 6

84. The number of Foreign Banks operating in India is (1) 20 (2) 25 (3) 28 (4) 32 85. BCSBI stands for (1) Banking Codes and Standards Board of India (2) Banking Credit and Standards Board of India (3) Banking Codes and Service Board d India. (4) Banking Credit and Service Board India (5) None of the above 86. The main Commercial segregated into (i) Payment System (ii) Financial Intermediation (1) (i), (ii), (III) (2) (i) and (iii) (3) (i) and (ii) (4) (ii) and (iii) (5) None of the above

(5) 35

(iii) Financial Services

87. The RBI has prescribed that all SCBs should maintain their SLRs in (1) Dated securities notified by RBI (2) T-Bills of Government of India (3) State Development Loans (4) All of the above (5) None of the above 88. In case a depositor wishes to withdraw his deposits prematurely, banks (1) do not allow the same till maturity of the deposits (2) charge a penalty for the same do not charge any penalty and allow the same (3) do not allow premature withdrawal (4) None of the above 89. What percentage of Indias population lives in rural areas? (1) 50% to less than 55% (2) 65% to less than 70% (4) 60% to less than 65% (5) None of the above 90. For filing and resolving complaints, the Ombudsman (1) charges a fee of Rs. 500/(2) does not charge any fee (4) charges a fee of Rs. 1000/(5) None of the above

(3) 70% to less than 75%

(3) charges a fee of Rs. 1500/-

11 | P a g e

Banking Awareness-By Akshay Almast

91. In case a depositor is a sole proprietor and holds deposits in the name of the proprietory concern as well as in the individual capacity the maximum insurance cover is available up to (1) Rs.100000 (2) Rs. 200000 (3) Rs. 500000 (4) All of the above (5) None of the above 92. Banks give contracts to third parties in order to manage support services like (1) help desk support (2) credit card processing (3) call support service (4) All of the above (5) None of the above 93. In case of FCNR(2) Scheme, the period for fixed deposits is (1) as applicable to resident accounts (2) for terms not less than 1 year and not more than 5 years (3) for terms not less than 2 years and not more than 6 years (4) at the discretion of the Bank (5) None of the above 94. The past due debt collection policy of banks generally emphasizes on ______ at the time of recovery (1) respect to customers (2) appropriate letter authorising agents to collect recovery (3) due notice to customers (4) All of the above (5) None of the above 95. According to the risk diversification principle of bank lending, diversification should be in terms of (1) customer base (2) geographic location (3) nature of business (4) All of the above (5) None of the above 96. Which of the following aspects are outlined by the loan policy of a bank? (1) rating standards (2) lending procedures (3) financial covenants (4) All of the above (5) None of the above 97. The paid-up capital of Non-Scheduled Bank is less than (1) Rs. 5 lakh (2) Rs.10 Iakh (4) Rs. 15 lakh (5) None of the above

(3) Rs. 12 lakh

98. Scheduled bank means a bank (1) incorporated under the Companies Act, 1956 (2) authorized to transact Government business (3) governed by the Banking Regulation Act, l949 (4) included in the Second Schedule to the Reserve Bank of India Act, 1934 (5) All of the above

12 | P a g e

Banking Awareness-By Akshay Almast

99. Which of the following conditions must be fulfilled before a bank is included in the Second Schedule to the Reserve Bank of India Act? (1) It must have a paid-up capital and reserves of an aggregate value of not less than Rs. 5 lakh (2) It must satisfy the Reserve Bank of India that its affairs are not being conducted in a manner detrimental to the interests of the depositors (3) It must be a State co-operative bank or a company as defined in the Companies Act,1956 or an institution notified by the Central Government in this behalf or a corporation or a company incorporated by or under any law in force in any place outside India. (4) Only (3) (5) All of the above 100. Which of the following are the scheduled banks ? (1) State Bank of Mauritius Ltd , (2) HDFC Bank Ltd (3) ICICI Bank (4) None of the above (5) All of the above 101. A foreign bank is one (1) whose most of the branches are situated outside India (2) in which at least 40% equity shares are held by non-resident Indians (3) which is incorporated outside India (4) All of the above (5) None of the above 102. Branch Banking system is one under which (1) a large bank carries on banking business through a large network of branches spread all over the country (2) the banks huge financial resources enable it to carry on its activities on a large scale throughout the country (3) Only (2) and (3) (4) Both of the above (5) None of the above 103. Unit Banking System is that system where an individ ual bank undertakes the banking business (1) through a single office (2) through a few branches operating within a limited area (3) Only (2) and (3) (4) Both of the above (5) None of the above 104. The Unit Banking System is prevalent in (1) Canada (2) Great Britain (3) United States of America (4) India (5) Pakistan
13 | P a g e
Banking Awareness-By Akshay Almast

105. In terms of section 5 (1)(e) of the Banking Regulation Act, 1949, banking company means an company which (1) accepts deposits from the public (2) undertakes lending of money (3) transacts the business of banking India (4) accepts deposits from public a invests the same in trade and India. (5) All of the above 106. Which of the following are Scheduled Banks? (1) The fuji Bank Ltd. (2) IDBI Bank Ltd. (3) Centurion Bank of Punjab Ltd. (4) All of the above (5) None of the above 107. Which of the following bank has been included in the second Schedule to the RBI Act, 1934 with effect from 21st August, 2004 and thus is the latest entrant in Indian Banking as a new generation private sector bank? (1) ICICI Bank Ltd (2) HDFC Bank Ltd (3) Kotak Mahindra Bank Ltd (4) Yes Bank Ltd (5) None of the above 108. Which of the following statements are correct in regard to foreign banks operating in India ? (1) Foreign banks would be allowed to open more than the existing WTO commitment of 12 branches in a year (2) Foreign banks would be permitted to acquire a controlling stake in a phased manner, but only in those private sector banks which are identified by the Reserve Bank for restructuring (3) The parent foreign bank of a wholly owned subsidiary would continue to hold 100 percent equity in the Indian subsidiary for a minimum prescribed period of operation (4) Only (1) and (2) (5) All of the above 109. Universal Bank is one which (1) is present universally ie, in all the countries of the world (2) undertakes the work of note-issuing authority, monetary and regulatory authority, banker of the Government and equipment leasing (3) undertakes the functions of a Development Financial Institution as well as a commercial bank (4) All of the above (5) None of the above 110. A universal bank may undertake multifarious financial services under one roof, eg, (1) receiving money on current or deposit accounts, and, lending of money for trade, industries, exports, agriculture, etc (2) mortgage financing, project financing, infrastructure lending, asset securitization, leasing, factoring, etc (3) remittance of funds, custodial services, credit/debit cards, collection of cheques/bills, etc (4) All of the above (5) None of the above
14 | P a g e
Banking Awareness-By Akshay Almast

111. The commercial banking system in India consists of (1) nationalized banks and private sector banks (2) scheduled and non-scheduled banks (3) regional rural banks, co-operative banks and land development banks (4) All of the above (5) None of the above 112. Which of the following are the scheduled banks? (1) The Fuji Bank Ltd (2) lDBl Bank Ltd (3) Centurion Bank of Purijab Ltd (4) None of the above (5) All of the above 113. Lord Krishna Bank Ltd. is a (1) New Private Sector Bank (3) Public Sector Bank (5) None of the above

(2) Old Private Sector Bank (4) Regional Rural Bank

114. What does EBT stands for? (1) Electronic Belated Transfer (2) Electronic Beginners Transaction (3) Electronic Benefit Transfer (4) Electronic Beginning Transaction (5) None of the above 115. Consider the following statements (i) If the beneficiary of a cheque has lost the cheque, he can instruct the paying bank to stop payment of the cheque without waiting for the account holders instructions. (ii) While outsourcing, the only consideration should be cost savings. which among the statements given above is/are correct? (1) Only (i) (2) Only (ii) (3) (i) and (ii) (4) Neither (i) nor (ii) (5) None of the above 116. Telebanking service is based on (1) Virtual banking (3) Voice banking (5) None of the above

(2) Online banking (4) Core banking

117. Which of the following is not a Public Sector Bank? (1) State of Hyderabad (2) Central Bank of India (3) Regional Rural Bank (4) HDFC Bank (5) None of the above 118. RBI generally reviews the Monetary policy for every (1) three months (2) six months (4) ten months (5) None of the above 119.The rate at which the RBI lends shot-term money to the banks (1) PLR (2) CRR (3) Repo Rate (4) Reverse Repo Rate
15 | P a g e

(3) nine months

(5) None of the above

Banking Awareness-By Akshay Almast

120.The Reserve Bank of India (RBI) was nationalized on (1) 1 January, 1949 (2) 1 July, 1955 (4) 15 April, 1980 (5) None of the above 121.Which of the following acts govern the RBI functions? (1) RBI Act,1934 (2) Banking Regulation Act, 1949 (3) Companies Act, 1956 (4) Foreign Exchange Regulation Act, 1973 (5) Foreign Exchange Management Act, 122. The RBI is not expected to perform the function of (1) the banker to the government (2) accepting deposit from Commercial Banks (3) accepting deposits from general public (4) issuer of currency (5) None of the above 123. Headquarters of Reserve Bank of India is in (1) New Delhi (2) Mumbai (4) Chennai (5) Hyderabad

(3) 19 July, 1969

(3) Kolkata

124. The first Governor of the Reserve Bank of India from 1 April1935 to 30 June, 1937 was(1) Sir Osborne Smith (2) Sir James Taylor (3) C.D. Deshmukh (4) Sir Benegal Rama Rao (5) KG. Ambegaonkar 125. 22nd and Current Governor of Reserve Bank of India is (1) Manmohan Singh (2) C. Rangarajan (3) Bimal Jalan (4) Y.V. Reddy (5) D. Subbarao 126.Which of the following rates is not decided by RBI? (1) Bank Rate (2) Repo Rate (3) Reverse Repo Rate (4) Prime Lending Rate (5) Cash Reserve Ratio 127 .The Reserve Bank of India was set up on the recommendations of the (1) Narasimham Committee (2) Hilton-Young Commission (3) Mahalanobis Committee (4) Fazal Ali Commission (5) None of the above

16 | P a g e

Banking Awareness-By Akshay Almast

128. Which of the following formulates. implements and monitors the monetary policy? (1) Ministry of Finance (2) RBI (3) SBI (4) ICICI Bank 129.Which of the following is th central banking institution India? (1) State Bank of India (2) Ministry of Finance (3) Reserve Bank of India (4) Finance Commission of India (5) None of the above 130. The Reserve Bank of India had divested its stake in State Bank of India to (1) IDBI Bank (2) LIC (3) ICICI Bank (4) Government of India (5) None of the above

(5) None of the above

131. At Present the RBI holds one per cent of shareholding in? (1) State Bank of India (2) National Housing Bank (3) State Bank of Hyderabad (4) National Bank for Agriculture and Rural Development (NABARD) (5) None of the above 132. The number of regional offices of RBI is (1) 20 (2) 21 (3) 22 (4) 23

(5) None of these

133. In India, the RBI prescribes the minimum SLR level for Scheduled Commercial Banks in India in specified assets as a percentage of Banks (1) Net Demand and Time Liabilities (2) Demand Liabilities (3) Time Liability (4) None of the above (5) All of the above 134 . CRR refers to the share of that banks Rural have to maintain with RBI of their net demand and time liabilities. 1) Liquid cash (2) forex reserves (3) gold (4) liquid cash (5) None of the above 135.The RBI has adopted _____ Model in which mobile banking and is promoted through business correspondents of banks. 1) Bank Led (2) Band Mobile (3) Mobile (4) All of these 5) None of these 136. Services offered to government departments include all the above except (1) payments of salaries and pensions (2) distributing RBI bonds to government departments (3) direct and indirect tax collections (4) remittance facilities (5) None of the above 137. Which of the following is/are known as Bankers Bank? (1) SBI (2) NABARD (3) RBI (4) All of these

(5) None of these

17 | P a g e

Banking Awareness-By Akshay Almast

138. Which of the following is the central bank of the country? (1) RBI (2) SBI (3) RRB (4) NABARD 139 . RBI was established on (1) April 1, 1935 (2) March 1, 1935 (3) April 1, 1934 (4) March 1, 1934

(5) None of these

(5) None of these

140. Which of the following is/are functions of the RBI? (I) Acts as the currency authority (ii) Controls money supply and credit (iii) Manages foreign exchange (iv) Serves as a banker to the government (1) (i) and (Ill) (2) (ii) and (iii) (3) (i), (ii) and (iii) (4) (i), (ii), (iii) and (iv) (5) None of these 141. Central Bank (1) creates (2) controls 142 credit investment. (1) Dear (2) Cheap

(3) restricts

(4) all of these

(5) None of these

(3) Restricted

(4) Green

(5) None of these

143. Quantitative instrument of RBI can be (1) bank rate policy (2) cash reserve ratio (3) statutory liquidity ratio (4) All of the above (5) None of the above 144. Objective of monetary policy of RBI is to (1) control inflation (2) discourage loarding of commodities (3) encourage flow of credit into neglected sector (4) All of the above (5) None of the above 145. When RBI is lender of last resort, what does it mean? (1) RBI advances necessary credit against eligible securities (2) Commercial Banks give fund to the RBI (3) RBI advances money to public whenever there is any emergency (4) All of the above (5) None of the above 146. When RBI acts as a banker to the government, what does it do? (1) RBl keeps bank accounts of the government (2) RBI carries out government transactions (3) RBI advises the government on all financial and monetary matters (4) All of the above (5) None of the above

18 | P a g e

Banking Awareness-By Akshay Almast

147. The merit of issuing notes with RBI can be seen is (1) uniformity (2) stability in currency (3) control of credit (4) All of the above (5) None of the above 148. Which of the following is not an objective of financial sector reform in India? (1) Creating an efficient, productive and profitable financial sector industry (2) Preparing the financial system for increasing international competition (3) Opening the external sector in a calibrated fashion (4) Reducing the fiscal deficit (5) Promote the maintenance of financial stability even in the face of domestic and external environment 149. The Narsimham Committee-I was set up in (1) 1990 (2) 1991 (3) 1992 (4) 1998

(5) 2000

150. The Narsimham Committee-I was set up to suggest some recommendations for improvement in the (1) efficiency and productivity of the financial institution (2) banking reform process (3) export of IT sector (4) fiscal reform process (5) None of the above 151. The Narsimham Committee-Il was set up to suggest some recommendations for improvement in the (1) efficiency and productivity of the financial institution (2) banking reform process (3) export of IT sector (4) fiscal reform process (5) None of the above 152. The Narsimham Committee, 1991 has given which of the following major recommendations (i) Reduction in the SLR and CRR. (ii) Phasing out Directed Credit Programme. (iii) The determination of the interest rate should be on the grounds of market forces such as the demand for and the supply of fund. (iv) The actual numbers of public sector banks need to be reduced. (v) Narrow Banking Concept where weak banks will be allowed to place their funds only in short-term and risk free assets. Select the correct answer using the following codes (1) i,ii and v (2) i, iii, iv and v (3) i,ii,iii and v (4) ii, iii, iv and v (5) i, ii, iii and iv 153. Which of the following is not correct about the recommendations of Narsimham Committee Report, 1998? (1) Reduced CRR and SLR (2) Deregulation of Interest Rate (3) Establishment of the ARE Tribunal (4) Fixing Prudential Norms (5) Capital Adequacy Norms
19 | P a g e
Banking Awareness-By Akshay Almast

154. Basel I, which was issued in 1988, focuses on the (1) capital adequacy of financial institutions (2) improvement of the banking sectors ability to deal with financial and economic stress (3) technology up gradation (4) training of banking staff (5) professionalism in banking 155. In 1991, SLR was as high as (1) 25% (2) 30% (3) 38.5%

(4) 39.5%

(5) 40%

156. Narsimham Committee recommended to reduce SLR and CRR to (1) 25% and 3.5% respectively (2) 24% and 3.5% respectively (3) 25% and 3% respectively (4) 20% and 5% respectively (5) 25% and 5% respectively 157. Which of the following is not a recommendation of the Narsimham Committee, 1991? (1) Reduction of CRR and SLR (2) Phasing out directed credit programme (3) Reduction of Capital Adequacy Ratio (4) Establishment of ARE Fund (5) Autonomy to Public Sector Bank 158. Which of the following guidelines were issued by Reserve Bank of India in January 1993 for the entry of Private Sector Banks in the wake of Narasimham Committee recommendation (1) The new bank, upon being granted license under the Banking Regulation Act by RBI, Shall be registered as a public limited company under the Companies Act, 1956 (2) Its inclusion in the Second Schedule to the Reserve Bank of India Act, 1934 shall be sunject to Reserve Banks decision (3) Preference would be given to those banks the headquarters of which are proposed to be located in the centre which does not have the headquarters of any other bank (4) (1) and (3) (5) All of these 159. The RBI has prescribed that a new Private Sector Bank (1) shall be subject to prudential norms in regard to income recognition, asset classification and provisioning, capital adequacy, etc. (2) shall have to observe priority sector lending targets as applicable to other domestic banks (3) will be required to open rural and semi-urban branches also as may be laid down by RBI (4) None of the above (5) All of above

20 | P a g e

Banking Awareness-By Akshay Almast

160. A new Private Sector Bank (1) would be governed by existing branch licensing policy where by banks could open branches including at urban/metro centres without prior approval of RBI once capital adequacy and prudential accounting norms were satisfied (2) will be governed by the provisions of the RBI Act, 1934 the Banking Regulation Act, 1949 and other relevant statutes (3) would be subject to the directives, guidelines and advices given by the Reserve Bank of India (4) None of the above (5) All of the above 161. To create a strong and competitive banking system, reform measures were initiated in early 1990s. The thrust of these reforms was on (1) increasing operation efficiency (2) strengthening supervision over banks (3) developing technological and institutional infrastructure (4) All of the above (5) None of the above 162. What does EBT stands for? (1) Electronic Belated Transfer (2) Electric Beginners Transaction (3) Electronic Benefit Transfer (4) Electronic Beginning Transaction (5) None of the above 163. On the recommendations of which of the following committee Regional Rural Banks were established? (1) Tarpore Committee (2) Narasimham Committee (3) Karmakar Committee (4) Kelker Committee (5) Jha Committee 164. RRBs were set up on (1) 1975 (2) 1985

(2) 1991

(4) 2001

(5) 1965

165. The total authorized capital of RRBs was originally fixed at 1 crore which has since been raised to (1) Rs. 2crore (2) Rs. 3 crore (3) Rs. 5 crore (4) Rs. 7 crore (5) Rs. 10 crore 166. At present, the formula for subscription to RRBs capital has been fixed at (1) Central Government 50%, State Government 35% and Sponsor Bank 15% (2) Central Government 60%, State Government 20% and Sponsor Bank 20% (3) Central Government 30%, State Government 30% and Sponsor Bank 40% (4) Central Government 35%, State Government 35% and Sponsor Bank: 30% (5) Central Government 50%, State Government 25% and Sponsor Bank: 25%

21 | P a g e

Banking Awareness-By Akshay Almast

167. Central Governments contribution towards the capital of RRBs is made through (1) NABARD (2) RBI (3) SBI (4) Central Cooperative Bank (5) State Cooperative Bank 168. The Sponsor Bank helps and aids the RRB sponsored by it by (i) Subscribing to its share capital. (ii) Training its personnel. (iii) Providing managerial and financial assistance during the first five years or extended period. Select the correct answer by using the following codes (1) i and ii (2) ii and iii (3) i and ii (4) i, ii, and iii (5) None of these 169. The Sponsor Banks are empowered (1) to monitor the progress of RRBs (2) to conduct inspection and internal audit (3) to suggest corrective measures (4) All of the above (5) None of the above 170. Each of the RRBs covers districts ranging from (1) 1 to 15 (2) 2 to25 (3) 3 to 25 171. The main resources of RRBs are (1) share capital (2) deposits from the public (3) borrowing from Sponsor Banks (4) refinance from NABARD (5) All of the above 172. RRBS are refinanced at (1) 2% below the bank rate (4) 1% below the repo rate 173. RRBs are owned by (1) Central Government (3) Sponsor Bank

(4) 2 to 15

(5) 1 to 5

(2) 1% below the bank rate (5) repo rate

(3) 2% below the repo rate

(2) State Government (4) jointly by all of the above

(5) None of the above

174. The main resources of RRBs are (i) share capital. (ii) deposits from the public. (iii) borrowing from Sponsor Banks. (iv) refinance from NABARD. Select the correct answer (1) i and ii (2) i, ii and iii (3) iii and iv (4) ii, iii and iv (5) i, ii, iii and iv 175. The number of directors on the boards of RRBs has been raised to (1) 14 (2) 15 (3) 16 (4) 17 (5) 18
22 | P a g e
Banking Awareness-By Akshay Almast

176. The issued/paid-up capital of a Regional Rural Bank should be (1) Rs. 60 lac (2) minimum Rs. 25 lac and maximum Rs. 100 lac (3) Rs. 80 lac (4) Rs. 90 lac (5) None of the above 177. Under which category will Ofl classify Regional Rural Banks? (1) Scheduled Commercial Banks (2) Co-operative banks (3) Private sector banks (4) Development banks (5) None of the above 178. Paid-up share capital of Region Rural Bank is contributed by (1) Central Government only (2) State Government only (3) Central Government,State Government & the sponsor commercial bank in the ratio of 50: 15: 35 respectively (4) NABARD, the concerned Government and the sponsor commercial bank in the ratio of 60:20 :20 respectively (5) All of the above 179. Regional Rural Banks are empowered to transact the business of banking as defined under (1) Banking Regulation Act, 1949 (2) Negotiable Instruments Act, 1881 (3) Regional Rural Banks Act, 1976 (4) The Banking Companies (Acquisition and Transfer of (5) None of the above

Undertakings) Act, 1970

180. RRBs are permitted to undertake corporate agency business, without risk participation, for distribution of all types of insurance products, including health and animal insurance subject to the condition that (1) The bank should comply with the Insurance Regulatory and Development Authority (IRDA) regulations for acting as composite corporate agent (2) The bank should not adopt any restrictive practice of forcing its customers to go in only for a particular insurance company in respect of assets financed by the bank (3) The risks, if any, involved in insurance agency should not get transferred to the business of the bank (4) Only (2) and (3) (5) All of the above 181. Regional Rural Banks are managed by (1) Reserve Bank of India (2) a board of directors (3) the sponsor bank (4) the State Government (5) All of the above

23 | P a g e

Banking Awareness-By Akshay Almast

182. Deposits with Regional Rural Banks are insured by (1) Life Insurance Corporation of India (2) General Insurance Corporation (3) Deposit Insurance and Credit Guarantee Corporation (4) None of the above (5) All of the above 183. For opening a new branch, a Regional Rural Bank requires (1) permission of NABARD (2) permission of Director, Institutional Finance (3) RBI license (4) All of the above (5) approval of DRDA 184. Regional Rural Banks are classified as (1) scheduled commercial banks (2) subsidiaries of the sponsor banks (3) subsidiaries of NABARD (4) All of the above (5) None of the above 185. For the purpose of Income Tax Act, 1961, the regional rural banks are treated as (1) scheduled commercial banks (2) non-scheduled banks (3) nationalised banks (4) co-operative banks (5) None of the above 186. On the current account balances maintained by the Regional Rural Banks with them, the commercial banks may (1) pay interest up to 9 per cent (2) waive incidental charges (3) pay interest as applicable to savings accounts (4) pay interest at such rates as may be mutually agreed to (5) All of the above 187. All regional rural banks (RRBs) are required to maintain their entire statutory liquidity ratio (SLR) in (1) government and other approved securities (2) current accounts with sponsor banks (3) time deposits with sponsor banks (4) gold holdings only (5) All of the above

24 | P a g e

Banking Awareness-By Akshay Almast

188. Which of the following statements about Regional Rural Banks are correct? (1) Sponsor banks travellers cheques can be issued by RRBs (2) RRBs can enter into arrangements with the sponsor banks for providing remittance facilities to its customers (3) Where RRBs can afford the investment, they can install lockers also (4) Only (1) and (2) (5) All of the above 189.Reserve Bank has permitted RRBs for opening/maintaining Non-Residents (Ordinary /External) accounts in rupees and for acceptance of FCNR (B) deposits subject to the condition that(1) The bank should have a positive net-worth and earned net profit during the preceding year (2) The bank should not have defaulted in maintenance of CRR/SLR requirements on more than three occasions during the preceding two years (3) Net NPA level of the bank should not exceed five percent of the outstanding advances as on March 31 of the preceding year (4) Only (2) and (3) (5) All of the above 190. The Regulatory Authority Regional Rural Banks is (1) Sponsor bank (2) Central Government (3) State Government (4) RB land NABARD

(5) All of the above

191. Which of the following are the recommendations of the Internal Group (Chairman : Shri A V Sardesai) set up by RBI in regard to strengthening and viability of RRBs? (1) merger/amalgamation of RRBs to improve operational viability (2) change of sponsor banks to enhance competitiveness. (3) governance and management and scope for improving profitability (4) None of the above (5) All of the above 192. Which of the-following measure have been taken to enlarge resources available to RRI3s? (1) Lines of credit at a reasonable rate of interest from sponsor banks (2) Access to inter-RRB term money/ borrowings (3) Access to repo / CBLO markets (4) All of the above (5) None of the above 193. With a view to increase their resource base, RRBs have been permitted to(1) issue of credit/debit cards and setting-up of ATMs (2) open Currency Chests (3) handle pension and other government business as sub-agents of those banks which are authorised to conduct government business (4) Only (1) and (2) (5) All of the above

25 | P a g e

Banking Awareness-By Akshay Almast

194. Which of the following conditions are required to be fulfilled by a Regional Rural Bank to be eligible for opening of new branches? (1) It should not have defaulted in maintenance of SLR and CRR during the last two years (2) It should be making operational profits (3) Its net worth should show improvement and its net NPA ratio should not exceed 8 per cent (4) Only (1) and (2) (5) All of the above 195. Co-operative Banks in India are registered under (i) Banking Laws (Cooperative Societies) Act, 1965. (ii) Banking Regulations Act, 1949. (iii) Companies Act, 1956. Select the correct answer using the following codes (1) only i (2) i and ii (3) ii and iii (4) i, ii and iii (5) i, and iii 196. Co-operative Development Bank was set up by (1) NABARD (2) RBI (3) SBI (4) Central Government (5) None of the above 197. Co-operative banks in India do not finance rural areas under (1) Farming (2) Cattle (3) Milk (4)Small scale units (5) Personal finance 198. Which of the following is not a (A) negotiable instrument?(B) semi-negotiable instrument? (1) Promissory note (2) Bill of exchange (3) Cheque (4) Bank Draft (5) Share certificate 199. Those instruments which can be transferred by endorsement and delivery, but the transferee does not get a better title than that of the transferor is called (1) negotiable instruments (2) semi-negotiable instruments (3) non-negotiable instruments (4) All of the above (5) None of the above 200. Transfer of any instrument to another person by signing on its back or face or on a slip of paper attached to it is known as : (1) promissory note (2) bill of lading (3) bill of exchange (4) endorsement (5) None of the above 201. Which of the following is not a prerequisite for a promissory note? (1) drawn on a specified banker (2) It should be unconditional (3) It should be in writing (4) It should be made and signed by the debtor (5) It should be payable in the currency of the country
26 | P a g e
Banking Awareness-By Akshay Almast

202. A bill of exchange in which a bank orders its branch or another bank, as the case may be, to pay a specified amount to a specified person or to the order of the specified person is called (1) cheque (2) bank draft (3) promissory note (4) bill of exchange (5) None of the above 203. Which of the following is not a party of bill of exchange? (1) The Drawer (2) The Drawee (3) The Payee (4) The Endorser (5) None of the above 204. Which of the following is/are the right(s) of customer towards his banker? (1) To receive a statement of his account from a banker (2) To sue the bank for any loss and damages (3) To sue the banker for not maintaining the secrecy of his account (4) All of the above (5) None of the above 205. When an endorser waives presentment and notice of dishonour he increases his liability. His endorsement is: (1) facultative endorsement (2) qualified endorsement (3) alternative endorsement (4) restrictive endorsement (5) None of the above 206. All of the following are examples of Quasi Negotiable Instruments, under the Negotiable Instrument Act, 1881, except (1) Dividend Warrants (2) Share Warrants (3) Bearer Debentures (4) Promissory Note (5) None of the above 207. Section 131 of Negotiable Instrument Act, 1881 extends protection to the (1) Paying Banker (2) Collecting Banker (3) Advising Banker (4) Issuing Banker (5) All of the above 208. Which of the following is not considered as negotiable instrument under the Negotiable Instruments Act, 1881? (1) Bill of exchange (2) Promissory note (3) Share certificate (4) Cheque payable to bearer (5) Cheque with not negotiable crossing 209. Which of the following is not considered as an instrument negotiable by custom or usage? (1) Delivery orders for goods (2) Railway receipts for goods (3) Hundi (4) Government promissory notes (5) Cheques

27 | P a g e

Banking Awareness-By Akshay Almast

210. Under the Negotiable Instrument Act, 1881, an instrument which is incomplete in some respects, is called a/an (1) Foreign instrument (2) Inland instrument (3) Inchoate instrument (4) Ambiguous instrument (5) Fictitious instrument 211. Which of the following is an example of restrictive crossing? (1) Not Negotiable (2) State Bank of India (3) A/c Payee (4) Company (5) Two transverse parallel lines simply drawn across the face of the cheque 212. Which of the following is not a payment in due course? (1) Payment made in accordance with the apparent tenor of the instrument (2) A payment is made on an instrument before the date of maturity (3) Payment is made to a person who is in possession of the instrument either as a holder or a person authorised to receive payment on behalf of holder (4) Payment made in good faith and without negligence (5) Payment made to a person in possession of an instrument payable to bearer or one that is, endorsed in blank 213. When a bill is drawn, accepted or indorsed for consideration, it is called a/an (1) Accommodation bill (2) Genuine trade bill (3) Escrow (4) Ambiguous instrument (5) Inchoate instrument 214. Which of the following is a prerequisites for transfer of a negotiable instrument? (1) Crossing (2) Acceptance (3) Noting with a Notary (4) Blank indorsement (5) Mere delivery or indorsement and delivery 215. Which of the following statements is correct about promissory note? (1) It need not be in writing (2) An implied promise is enough to constitute a valid promissory note (3) The promise to pay must be definite and unconditional (4) The name of the pyee need not be mentioned (5) The payment can be in kind 216. The legal relationship between a bank and its customer is a kind of (i) Debtor and Creditor (ii) Principal and Agent (iii) Pledgor and Pledgee (iv) Mortgagor and Mortgagee Select the correct answer by using the following codes (1) i and ii (2) i, iii and iv (3) i, ii, iii and iv (4) i and ii (5) i, ii and iii

28 | P a g e

Banking Awareness-By Akshay Almast

217. Since, acceptance of deposits and granting of loans are the two general functions of a bank, the relationship arising out of these two main activities is known as (1) principal and agent relationship (2) financer and finance relationship (3) bailor and bailee relationship (4) general relationship (5) specific relationship 218. Which of the following is not an obligation of bank towards its customer? (1) Pay bills as per the instructions of the customer (2) Act as per the directions given by the customer (3) Submit periodical statements, i.e., informing customers of the state of the account (4) Not to set off a debt owed to him by a creditor from the credit balances held in other accounts of the borrower (5) Maintain secrecy of accounts 219. Which of the following statement is not correct regarding a minor? (1) A minor is a person who has not attained the age of 18 (2) Minor does not have legal capacity to enter into a contract (3) A current account in the name of minor can be opened when guardian of the minor operates this account (4) A minors account should never be allowed to be overdrawn (5) In the event of death of a minor, the money will be payable to the guardian 220. Money deposited with the bank becomes a debt due (1) from the banker (2) from the customer (3) to the customer (4) Either 1 or 2 (5) None of the above 221. KYC means (1) Know your customer very well (2) Know your existing customer very well (3) Know your prospective customer very well (4) Satisfy yourselves about the customers identity and activities (5) All of the above 222. Mahesh and Suresh are friends aged 14 and 15 respectively. They want to open a joint account in your bank. You will (1) allow them to open a joint account to be operated jointly (2) allow them to open a joint account with operating instructions either or survivor (3) allow them to open a joint account with operating instructions former or survivor (4) allow them to open a joint account with operating instructions any one or survivor (5) None of the above

29 | P a g e

Banking Awareness-By Akshay Almast

223. NABARD was set up as an apex Development Bank with a mandate for facilitating credit flow for promotion and development of (1) agriculture (2) small-scale industries (3) cottage and village industries (4) handicrafts and other rural crafts (5) All of the above 224. On the recommendation of which committee NABARD was established? (1) The Committee to Review Arrangements for Institutional Credit for Agriculture and Rural Development (2) Narshimham Committee (3) Chelliaha Committee (4) Kelkar Committee (5) None of the above 225. NABARD was set up with an initial capital of Rs.100 crore, which was enhanced to (1) Rs. 1,000 crore (2) Rs. 2000 crore (3) Rs. 3000 crore (4) Rs. 4000 crore (5) Rs. 5000 crore 226. On the recommendations of which committee, the NABARD was established? (1) Shivaraman Committee (2) Basel Norms (3) Narasimham Committee (4) All of the above (5) None of the above 227. Which of the following statements is not correct about NBFCs? (1) An NBFC cannot accept demand deposits (2) These institutions trade in the capital market in a variety of assets and liabilities (3) An NBFC can issue cheques drawn on itself (4) Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available for NBFC depositors (5) NBFIs act as brokers of loanable funds and in this capacity they intermediate between the ultimate saver and the ultimate investor. 228. The working and operations of NBFCs are regulated by (1) SEBI (2) RBI (3) Finance Ministry, Gol (4) IRDA (5) None of the above 229. Which of the following is a kind of non-banking financial institutions? (1) Equipment leasing company (2) Hire purchase company (3) Loan company (4) Investment company (5) All of the above 230. Which of the following is not correct about the acceptance of deposits by the NBFCs? (1) They are allowed to accept/renew public deposits for a minimum period of 12 months and maximum period of 60 months (2) They cannot accept deposits repayable on demand (3) They should have minimum investment grade credit rating (4) Their deposits are not insured (5) The repayment of deposits by NBFCs is guaranteed by RBI
30 | P a g e
Banking Awareness-By Akshay Almast

231. Any financial intermediary whose principal business is that of buying and selling of securities is called (1) equipment leasing company (2) hire purchase company (3) loan company (4) investment company (5) None of the above 232. Life Insurance in its modern form came to India from England in the year (1) 1818 (2) 1896 (3) 1905 (4) 1907 (5) 1919 233. Which of the following statements about insurance business in India is not correct? (1) Oriental Life Insurance Company was the first life insurance company on Indian Soil (2) Bombay Mutual Life Assurance Society was the first Indian life insurance company (3) The Life Insurance Companies Act and the Provident Fund Act were passed 1949 (4) The Insurance Regulatory and Development Authority was established in the year 1999 (5) From March 21, 2003 GIC ceased to be a holding company of its subsidiaries 234. In which year had the Insurance Regulatory and Development Authority come into force? (1) 1999 (2) 2000 (3) 2001 (4) 1991 (5) 1993 235. By taking out insurance cover an individual (1) reduces the cost of an accident (2) reduces the risk of an accident (3) transfers the risk to someone else (4) converts the possibility of large loss to certainty of a (5) reduces the certainty of major loss 236. Which of the following is an example of NBFCs? (1) Unit Trust of India (2) Life Insurance Corporation (3) General Insurance Corporation (4) All of the above (5) None of the above 237. A company which pools money from investors and invests in stocks, bonds, shares is called (1) A bank (2) An insurance company (3) Bank assurance (4) Mutual fund

small one

(5) None of the above

238. Bank assurance is (1) an insurance scheme to insure bank deposits (2) an insurance scheme to insure bank advances (3) a composite financial service offering both bank and insurance products (4) a bank deposit scheme exclusively for employees of insurance companies (5) None of the above

31 | P a g e

Banking Awareness-By Akshay Almast

239. Which was the first mutual fund started in India? (1) SBI Mutual Fund (2) Indian Bank Mutual Fund (3) Kotak Pioneer Mutual Fund (4) Unit Trust of India (5) None of the above 240. The regulator of mutual fund in India is (1) FIMMDA (2) AMFI (3) RBI (4) SEBI

(5) None of these

241. FIMMDAs general principles and procedures are applicable to (1) Fixed income markets (2) Money markets (3) Derivative markets (4) All of the above (5) None of the above 242. Which is the principal institution for promotion, financing and development of small scale industries in the country? (1) RBI (2) SBI (3) IDBI (4) SIDBI (5) None of these 243. The UTI was established in (1) 1956 (2) 1964 (3) 1972

(4) 1976

(5) None of these

244. Which of the following mobiise/s the savings of the public to specifically invest in the industrial securities? (1) UTI (2) LIC (3) GIC (4) All of these (5) None of these 245. Whcih of the following is/are Term Deposits? (1) Fixed deposits (2) Re-investment deposits (3) Recurring deposits (4) None of the above

(5) All of the above

246. Which of the following is not correct about Non- Banking Financial Companies (NBFCs)? (1) NBFC can not accept demand deposits (2) NBFC is not a part of the payment and settlement system (3) NBFC can issue cheques drawn on itself (4) NBFCs are fast emerging segment of Indian financial system (5) None of these 247. The working and operations of NBFCs are regulated by (1) SBI (2) RBI (3) Finance Ministry (4) All of these

(5) None of these

248. Which of the following is not correct about Development Banks in India? (1) The Development Banks do not seek or accept deposits from the public (2) They provide short term finance (3) The Development Banks promote economic development by promoting investment and enterprise (4) Development Banks are those banks engaged in the promotion and development of industry, agriculture, exports and other key sectors. (5) All of the above

32 | P a g e

Banking Awareness-By Akshay Almast

249. Which of the following is the first Development Bank of India? (1) Industrial Finance Corporation of India (2) State Finance Corporation (3) Industrial Credit and Investment Corporation of India (4) State Industrial Development Corporations (5) National Bank for Agriculture and Rural Development 250. The Small Industries Development Bank of India was established in (1) 1975 (2) 1980 (3) 1982 (4) 1989 (5) 1990 251. The erstwhile Industrial Reconstruction Bank of India (IRBI) is now known as (1) Industrial Finance Corporation of India (2) Industrial Credit and Investment (3) Corporation of India Industrial Development Bank of India (4) State Industrial Development Corporations (5) Industrial Investment Bank of India LTD 252. National Housing Bank was established in (1) 1975 (2) 1980 (3) 1985 (4) 1988

(5) 1990

253. Industrial Development Bank of India was established as a subsidiary of (1) Reserve Bank of India (2) State Bank of India (3) Industrial Credit and Investment Corporation of India (4) State Industrial Development Corporations (5) Small Industries Development Corporation Bank of India (SIDBI) was established in 1989 254. Which of the following is not an objectives of SIDBI? (1) To initiate the process of modernisation and technical upgradation of the present units (2) To facilitate the marketing of the products of the small scale sector in India and abroad (3) to give loans both to the private as well as public sector undertakings in the field of commodity production, mining and services such as hotels and transport (4) to provide special aid to labour intensive industries to enable them to provide more employment (5) To provide refinancing factoring, leasing services to the small sector 255. Development Banks are (1) branches of Commercial Banks, whether in private or public sector, situated in rural areas for upliftment of weaker sections of the society (2) financial institutions which provide long term finance to industries (3) land development banks which provide developmental financing to agriculture (4) (2) and (3) (5) None of the above 256. SEBI was established in (1) 1993 (2) 1992 (3) 1988
33 | P a g e

(4) 1990

(5) 1994

Banking Awareness-By Akshay Almast

257. At the time of Nationalization who was the Governor of RBI(1) O.A. Smith (2) J.B. Taylor (3) C.D. Deshmukh (4) K.C. Neogy 258. The RBI was Nationalized in the year(1) 1949 (2) 1956 (3) 1959 (4) 1947 259. One Rupee Currency notes bear the Signature of(1) PM (2) President Of India (3) Governor Of RBI (4) Finance Secretary Of India 260. Ten Rupees notes bear the Signature of(1) President (2) Finance Minister (3) Secretory Of Ministry Of Finance (4) Governor Of RBI

34 | P a g e

Banking Awareness-By Akshay Almast