Explore topic-wise MCQs in Banking And Financial Awareness.

This section includes 3653 Mcqs, each offering curated multiple-choice questions to sharpen your Banking And Financial Awareness knowledge and support exam preparation. Choose a topic below to get started.

2101.

Which of the following rates is not decided by RBI?

A.  Bank rate
B.  Repo rate
C.  Reverse Repo rate
D.  Base rate
E.  Cash Reserve Ratio
Answer» E.  Cash Reserve Ratio
Discussion
2102.

Association of National Exchange Members of India (ANMI) is a body consisting of

A.  Bankers and SEBI
B.  SEBI and IBA
C.  Brokers Operating in the National Exchanges
D.  Bankers, SEBI, IBA and RBI
E.  None of these
Answer» D.  Bankers, SEBI, IBA and RBI
Discussion
2103.

Section 14 of Banking Regulation Act, 1949

A.  prohibits a banking company from creating a charge upon any unpaid capital of the company
B.  contains a system of licensing of banks by the RBI
C.  provides that the subscribed capital of a banking company should not be less than one-half of its authorised capital
D.  All of the above
E.  None of these
Answer» B.  contains a system of licensing of banks by the RBI
Discussion
2104.

In India, 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 liability
C.  time liability
D.  All of the above
E.  None of these
Answer» B.  demand liability
Discussion
2105.

Which of the following agencies/ organisations has recently decided that all the stock exchanges should introduce physical settlement of equity derivatives?

A.  Reserve Bank of India
B.  Bombay Stock Exchange
C.  Registrar of Companies
D.  Securities and Exchange Board of India
E.  All of the above
Answer» E.  All of the above
Discussion
2106.

Which of the following is/are known as banker's bank?

A.  SBI                             
B.  NABARD
C.  RBI                             
D.  All of these
E.  None of these
Answer» D.  All of these
Discussion
2107.

Borrower's ability to meet the immediate liabilities is indicated by

A.  Current Ratio
B.  Acid Test Ratio
C.  Debt Equity Ratio
D.  All of the above
E.  None of these
Answer» C.  Debt Equity Ratio
Discussion
2108.

The RBI has adopted ....... model, in which mobile banking is promoted through business correspondents of banks.

A.  Bank Led
B.  Bank Mobile
C.  Mobile
D.  All of these
E.  None of these
Answer» E.  None of these
Discussion
2109.

On 1st March, 1992, Reserve Bank of India announced a new system of exchange rates known as

A.  partial convertibility
B.  liberalised exchange rate system
C.  Either [a] or [b]
D.  Both [a] and [b]
E.  Neither [a] nor [b]
Answer» E.  Neither [a] nor [b]
Discussion
2110.

Which of the following policies of the financial sectors is basically designed to transfer local financial assets into foreign financial assets, freely and at market determined exchange rates? Policy of

A.  Capital Account Convertibility
B.  Financial Deficit Management
C.  Minimum Support Price
D.  Restrictive Trade practices
E.  None of the above
Answer» B.  Financial Deficit Management
Discussion
2111.

Which of the following organization/ agencies is not associated with the world of banking and finance?

A.  SEBI                           
B.  AMFI
C.  RBI                             
D.  ECGC
E.  SPCA
Answer» F.
Discussion
2112.

               Many Regional Rural Banks are given license to open branches in small cities and towns. These licenses are given by

A.  Cabinet Committee on Economic Affairs
B.  Reserve Bank of India
C.  NABARD
D.  Indian Banks' Association
E.  None of these
Answer» C.  NABARD
Discussion
2113.

What is the full form of 'CRR' as used in banking sector?

A.  Crucial Reserve Rate
B.  Cash Reserve Ratio
C.  Compulsory Return Rate
D.  Credit and Reserve Ratio
E.  None of these        
Answer» C.  Compulsory Return Rate
Discussion
2114.

Which of the following is NOT a source of funds of a commercial bank?

A.  Capital
B.  Borrowings from RBI
C.  Call money
D.  Cash reserves with RBI
E.  None of these
Answer» E.  None of these
Discussion
2115.

Prior approval (as also a license) of RBI is required for opening

A.  personal banking branches
B.  merchant banking branches
C.  asset recovery branches
D.  All of the above
E.  None of these
Answer» E.  None of these
Discussion
2116.

Consider the following I. Bank Rate Policy II. Open Market Operations III. Devaluation of Rupee Which of the above are called fiscal measures?

A.  Only II                
B.  Both I and II
C.  Both I and m
D.  Only III
E.  None of these
Answer» E.  None of these
Discussion
2117.

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 inter-bank rates
D.  All of the above
E.  None of these
Answer» D.  All of the above
Discussion
2118.

Sub-section 12AB of Section 17 of the Reserve Bank of India Act, 1934 defines the term as an instrument for borrowing funds by selling securities of the Central Government or a State Government or of such securities of a local authority as may be specified in this behalf by the Central Government or foreign securities, with an agreement to repurchase the said securities on a mutually agreed future date at an agreed price which includes interest for the funds borrowed?

A.  Bank rate                     
B.  LAP
C.  Repo                           
D.  Reverse repo
E.  None of these
Answer» D.  Reverse repo
Discussion
2119.

If the cash reserve ratio is lowered by the RBI, its impact on credit creation will be to

A.  increase it                    
B.  decrease it
C.  no impact                    
D.  constant
E.  None of these
Answer» B.  decrease it
Discussion
2120.

The Reserve Bank of India keeps on changing various ratio/rates frequently. Why is this done? (1) To keep inflation under control. (2) To ensure that Indian Rupee does not lose its market value. (3) To ensure that Banks do not earn huge profits at the cost of public money.

A.  Only (1)                       
B.  Only (2)
C.  Only (3)                       
D.  All 1, 2 & 3
E.  None of these
Answer» E.  None of these
Discussion
2121.

As we all know, the Bank Rate at present is fixed at 6.75%. What does it mean in context to the banking operations?

A.  No bank will be able to give loan to any patron at a rate lower than the Bank Rate.
B.  Bank should give loan to their priority sector customers/borrowers at the rate of 6.75% only. They cannot charge less or more than this from their priority sector clients.
C.  Banks are required to invest 6.75% of their total capital on financial inclusion and inclusive banking operations.
D.  Banks will be required to give 6.75% of their total deposits to the Govt. of India for meeting its Balance of Trade requirements.
E.  None of these
Answer» B.  Bank should give loan to their priority sector customers/borrowers at the rate of 6.75% only. They cannot charge less or more than this from their priority sector clients.
Discussion
2122.

The rate on which banks borrow from the RBI is called.......

A.  SLR                            
B.  CRR
C.  Interest Rate     
D.  Bank Rate
E.  Repo Rate
Answer» E.  Repo Rate
Discussion
2123.

Under provisions of which one of the following Acts has the Reserve Bank of India has the power to regulate, supervise and control the banking sector?

A.  RBI Act                       
B.  Banking Regulation Act
C.  Negotiable Instruments Act
D.  RBI and Banking Regulation Act
E.  None of these
Answer» C.  Negotiable Instruments Act
Discussion
2124.

Which one of the following tools is used by RBI for selective credit control?

A.  It advises banks to lend against certain commodities
B.  It advises banks to recall the loans for advances against certain commodities
C.  It advises banks to charge higher rate of interest for advance against certain commodities.
D.  It discourages certain kinds of lending by assigning higher risk weights to loans it deems undesirable.
E.  None of these
Answer» C.  It advises banks to charge higher rate of interest for advance against certain commodities.
Discussion
2125.

Under provisions of which one of the following Acts does the RBI issue directives to the Banks in India?

A.  RBI Act
B.  Banking Regulation Act
C.  Essential Commodities Act
D.  RBI and Banking Regulation Act
E.  None of these
Answer» E.  None of these
Discussion
2126.

Which of the following rates/ratios is not covered under the RBI monetary and credit policy?

A.  Bank rate
B.  Exchange rate of foreign currencies
C.  Repo rate
D.  Reverse repo rate
E.  Cash reserve ratio
Answer» C.  Repo rate
Discussion
2127.

The financial year for banks is April-March, but what is the financial year for RBI?

A.  January - December
B.  April - March
C.  July - June
D.  October - September
E.  June-May
Answer» D.  October - September
Discussion
2128.

RBI has reduce by one percentage point the Statutory Liquidity Ratio required to be maintained by banks to 23%. In what form is this stipulation reacquired to be fulfilled?

A.  Banks are required to keep the amount in approved government securities of    the appropriate value
B.  The amount to be maintained in cash and securities with RBI
C.  The required amount is to be maintained in gold with RBI
D.  All of the above
E.  None of these
Answer» B.  The amount to be maintained in cash and securities with RBI
Discussion
2129.

RBI prescribes the cash reserve ration to be maintained by banks as part of prudential norms. In what way is this cash reserve maintained by the banks?

A.  It is kept as reserves of gold with RBI     
B.  It is maintained as cash with RBI
C.  Each bank keeps the reserve in their respective head offices
D.  It is maintained as investments in government bonds                  
E.  None of these
Answer» C.  Each bank keeps the reserve in their respective head offices
Discussion
2130.

Reserve Bank of India-Structure and Functions A customer wishes to purchase some US dollars in India. He/She should go to        

A.  Public Debt Division of the RBI
B.  American Express Bank
C.  RBI or any branch of a bank which is authorised for such business
D.  Ministry of Foreign Affairs
E.  None of these
Answer» D.  Ministry of Foreign Affairs
Discussion
2131.

As per the reports in the leading newspapers. Securities and Exchange Board of India (SEBI) has asked the mutual fund industry to stop 'Misselling' their schemes to investors. What is 'Misselling' of products? I. Misselling takes place when mutual funds are sold without telling the likely returns. II. When agents sell the products without telling investors what are the risks involved in investing in mutual funds. III. When agents invest somebody's money in mutual funds without their knowledge/ it is called misselling. Select the correct answer using the codes given below:

A.  Only I                         
B.  Only II
C.  Only III                       
D.  All of these
E.  None of these
Answer» E.  None of these
Discussion
2132.

The currency notes issued by RBI have a cent percent cover in     

A.  approved assets
B.  gold
C.  foreign exchange           
D.  trustee securities
E.  None of these
Answer» B.  gold
Discussion
2133.

The Reserve Bank of India had diverted its stake in State Bank of India to

A.  IDBI Bank                   
B.  LIC
C.  ICICI Bank                  
D.  Government of India
E.  None of these
Answer» E.  None of these
Discussion
2134.

Which of the following is/are objective(s) of our Monetary Policy? I. To anchor inflation expectations. II. To actively manage liquidity. III. To maintain interest rate regime consistent with price output and financial stability. Select the correct answer using the codes given below

A.  Only I                         
B.  Only II
C.  I and III                       
D.  All of the above
E.  None of these
Answer» C.  I and III                       
Discussion
2135.

On which one of the following issues can SEBI penalise any company in India? I. Violation of Banking Regulation Act. II. Violation of foreign portfolio investment guidelines. III. For violation of Negotiable Instrument Act. Select the correct answer using the codes given below:

A.  Only I                         
B.  I, II, and III
C.  I and II                        
D.  II and III
E.  All of these
Answer» F.
Discussion
2136.

As per the existing policy, the Cash Reserve Ratio (CRR) of scheduled banks is fixed at a certain percentage of their NDTL. What is full form of NDTL?

A.  New Demand and Tenure Liabilities
B.  Net Demand and Time Liabilities
C.  National Deposits and Total Liquidity
D.  Net Duration and Total Liquidity
E.  New Deposits and Term Liquidity
Answer» C.  National Deposits and Total Liquidity
Discussion
2137.

An average citizen cannot open a Savings account in which of the following?

A.  Commercial bank          
B.  Post office
C.  Co-operative bank         
D.  RBI
E.  None of these
Answer» E.  None of these
Discussion
2138.

RBI generally reviews the Monetary Policy after every

A.  3 months                     
B.  6 months
C.  9 months                     
D.  10 months
E.  None of these
Answer» B.  6 months
Discussion
2139.

For the performance of its duties as the regulator of credit/ the Reserve Bank of India possesses the usual instruments of general credit control/ viz.

A.  bank rate
B.  open market operation
C.  the power to vary the reserve requirement of banks
D.  All of these
E.  None of these
Answer» E.  None of these
Discussion
2140.

ICICI provides financial assistance to

A.  small-scale industries
B.  medium-scale industries
C.  large-scale industries
D.  All of the above
E.  None of these
Answer» D.  All of the above
Discussion
2141.

Which financial institution established by IBRD-American Mission, in 1955?

A.  IDBI                            
B.  ICICI
C.  SBI                             
D.  RRB
E.  PNB
Answer» C.  SBI                             
Discussion
2142.

Which of the following statements is/ are correct about retailing of government securities?

A.  Banks can buy and sell Government Securities on an outright basis at prevailing market prices without any restriction on the period between sale and purchase.
B.  Banks are allowed to undertake ready forward transactions in Government Securities with nonbank clients.
C.  Both [a] and [b]
D.  None of these
Answer» D.  None of these
Discussion
2143.

Which of the following acts regulates underwriting of issues for merchant banking activities?

A.  Negotiable Instrument Act, 1881
B.  Banking Regulation (Companies) Rules, 1949
C.  Section 19 (2) & (3) of the Banking Regulation Act, 1949
D.  Factoring Act Rules, 2011
E.  None of these
Answer» D.  Factoring Act Rules, 2011
Discussion
2144.

For  financing infrastructure  projects, Infrastructure Debt Funds (IDFs) can be set up as

A.  Mutual Funds
B.  Non-Banking Finance Companies
C.  Both [a] and [b]
D.  None of these
Answer» D.  None of these
Discussion
2145.

Credit rating is

A.  used to rate the borrowers while giving advances
B.  used to work out performance of the employees
C.  used to calculate the number of excellent audit rated branches
D.  not used in any bank
E.  necessary before giving promotion to employees
Answer» E.  necessary before giving promotion to employees
Discussion
2146.

Which is the principal institution for promotion, financing and development of small scale industries in the country?

A.  RBI                             
B.  SBI
C.  IDBI                            
D.  SIDBI
E.  None of these
Answer» E.  None of these
Discussion
2147.

Banks are allowed to form subsidiaries as per

A.  Section 19(1) of the Banking Regulation Act, 1949
B.  The Reserve Bank of India Act, 1934
C.  The Subsidiary Banks General Regulation, 1959
D.  SIDBI General Regulations, 1990
E.  None of these
Answer» B.  The Reserve Bank of India Act, 1934
Discussion
2148.

The main objective(s) of National Housing Bank is/are

A.  to promote and develop specialized housing  finance  institutions  for mobilisation of resources and extending finance for housing activities
B.  to extend refinance facilities to housing finance institutions and to scheduled banks
C.  to provide guarantee and underwriting facilities of housing finance institutions
D.  All of the above
E.  None of these
Answer» E.  None of these
Discussion
2149.

Which of the following regulatory frameworks should be followed to maintain relationship with NBFCs?

A.  NBFCs promoted by a group of foreign banks should have presence in India.
B.  A foreign bank with 10- 50% of the issued and paid up equity of an NBFC, need to have management control on NBFC.
C.  Both [a] and [b]
D.  None of these
Answer» B.  A foreign bank with 10- 50% of the issued and paid up equity of an NBFC, need to have management control on NBFC.
Discussion
2150.

What are major functions undertaken by merchant bankers?

A.  Issue management
B.  Capital structuring / restructuring
C.  Market maker in capital market
D.  All of the above
E.  None of these
Answer» E.  None of these
Discussion