Reserve Bank of India Top 100 Questions – Solved
1. Reserve Bank of India was established on _______.
a) April 1, 1935 b) July 12, 1982 c) May 26, 2006 d) September 30, 2005
a) April 1, 1935
The Reserve Bank of India, which is the central bank of this country, was established.under RBI act 1934. It was originally started as a shareholders’ bank with a share capital of Rs. 5 crore divided into shares of Rs. 100 each, fully paid-up. But since January, 1949 the Reserve Bank has been nationalised and it is now purely a concern of the State. The Government of India holds the entire share capital of the bank which has been acquired by payment of compensation to the shareholders.
a) April 1, 1935
The Reserve Bank of India, which is the central bank of this country, was established.under RBI act 1934. It was originally started as a shareholders’ bank with a share capital of Rs. 5 crore divided into shares of Rs. 100 each, fully paid-up. But since January, 1949 the Reserve Bank has been nationalised and it is now purely a concern of the State. The Government of India holds the entire share capital of the bank which has been acquired by payment of compensation to the shareholders.
2. Who works as RBI’s agent at places where it has no office of its own?
a) State Bank of India b) Ministry of Finance c) Government of India d) International Monetary Fund
a) State Bank of India
The State Bank of India works as RBI’s agent at places where it has no office of its own.
3. Which of the following is true about the functions performed by RBI –
(i) It is the Bank of Issue
(ii) It acts as banker to the Government
(iii) It is the banker of other banks
(iv) It regulates the flow of credit
(a) Both (i) and (ii) (b) Both (iii) and (iv) (c) All the Above
(d) None of the above
(c) All the Above
The Reserve Bank of India, as the central bank of the country, functions as the sole bank with the right of issuing paper notes, it acts as banker to the Government, it is the banker to other bank and it regulates the flow of credit.
4. Which among the following is incorrect?
a) RBI is the Bank of Issue b) RBI acts as Banker to the Government
c) RBI is Banker’s Bank d) RBI does not regulate the flow of credit
d) RBI does not regulate the flow of credit
The Reserve Bank of India, as the central bank of the country, regulates the flow of credit.
5. India is a member of the International Monetary Fund since _____.
a) 1934 b) 1935 c) 1947 d) 1949
c) 1947
Since March, 1934 India is a member of the International Monetary Fund. It has to, therefore, maintain its rate of exchange at the level which it has declared to the IMF. The Reserve Bank takes suitable measures to maintain the value of the rupee at this declared level.
. Which of the following is true about the restrictions on RBI?
(i) It is not to compete with the commercial banks.
(ii) It is not allowed to pay interest on its deposits.
(iii) It cannot engage directly or indirectly in trade.
(iv) It cannot acquire or advice loans against immovable property.
(v) It is prohibited from purchasing its own shares or the shares of any other bank or any company or granting loans on such security.
(a) only (i),(ii),(iii), and (iv) (b) only (v) (c) all the above
(d) none of the above
(c) all the above
Certain restrictions have been imposed on the Reserve Bank as it is a central bank. It is not to compete with the commercial banks. It is not allowed to pay interest on its deposits. It cannot engage directly or indirectly in trade. It cannot also acquire or advice loans against immovable property. It is also prohibited from purchasing its own shares or the shares of any other bank or any company or granting loans on such security.
7. When did the Reserve Bank of India notify the draft regulations relating to the Credit Information Companies (Regulation) Act, 2005?
a) April 5, 2006 b) May 26, 2006 c) June 29, 2007 d) September 30, 2005
a) April 5, 2006
The Reserve Bank of India (RBI) notified the draft regulations relating to the Credit Information Companies (Regulation) Act, 2005 on April 5, 2006. Among the major features of the regulations is the inclusion of stock brokers and telecommunication companies in the category of ‘specified users’ of services of credit information companies. It is expected that there will be a boost to the development of credit, based on a more reliable information base, once the regulations are finalised.
8. When did the draft guidelines for building grievance redressal mechanism within NBFCs (Non-Banking Financial Companies) publish?
a) April 5, 2006 b) May 26, 2006 c) June 29, 2007 d) September 30, 2005
b) May 26, 2006
The Reserve Bank of India (RBI) published the draft guidelines for building grievance redressal mechanism within NBFCs (Non-Banking Financial Companies) on May 26, 2006. The grievance redressal mechanism would be used to resolve disputes arising out of the decisions of the lending institutions’ functionaries. Guidelines have also been outlined by the RBI for putting in place the Fair Practices Codes by all NBFCs.
9. When did the Centre acquire the Reserve Bank of India’s entire 59.73% equity stake in the State Bank of India (SBI) at over Rs. 35,531 crore in New Delhi?
a) April 5, 2006 b) May 26, 2006 c) June 29, 2007
d) September 30, 2005
c) June 29, 2007
The Centre acquired the Reserve Bank of India’s entire 59.73% equity stake in State Bank of India (SBI) at over Rs. 35,531 crore in New Delhi on June 29, 2007. It is the biggest ever cash purchase. As per the guidelines of the Securities and Exchange Board of India (SEBI), the Government picked up the entire SBI shares held by the RBI at a price of Rs. 1,130.35 a share.
10. According to which guidelines did the Government pick up the entire SBI shares held by the RBI?
a) National Stock Exchange of India b) Securities Commission
c) Financial Regulations d) Securities and Exchange Board of India (SEBI)
d) Securities and Exchange Board of India (SEBI)
As per the guidelines of the Securities and Exchange Board of India (SEBI), the Government picked up the entire SBI shares held by the RBI at a price of Rs. 1,130.35 a share.
11. When did the Government appoint for transfer of stake?
a) 29 June b) 26 May c) 5 April d) 1 April
a) 29 June
To facilitate an ordinance published for providing the requisite statutory provisions in the State Bank of India Act, 1955, the Government appointed 29 June as the date for transfer of stake. On the same principle, the Government also acquired RBI’s shareholding in National Housing Bank (NHB) and NABARD.
12. The Reserve Bank holds a 72.5% stake in NABARD and 100% stake in NHB.
When did insurance begin in Babylon?
a) 1750 BC b) 1907 BC c) 1971 BC d) 2000 BC
a) 1750 BC
The Babylonians developed a system which was recorded in the Code of Hammurabi.
13. Which one of the following does not belong to the main products of life insurance?
a) Endowment b) Personal accident insurance c) Term
d) Whole life
b) Personal accident insurance
Whole life, Endowment, Term, Investment-linked, Life annuity plan, Medical and health are the main products of life insurance. Motor insurance, Fire/House owners/Householders insurance, Personal accident insurance, Medical and health insurance, Travel insurance are the main products of general insurance.
14. Which one of the following does not belong to the major general insurance private sector companies in India?
a) Bajaj Allianz General Insurance b) Reliance General Insurance
c) Royal Sundaram Alliance Insurance d) The Oriental Insurace Company
d) The Oriental Insurance Company
New India Assurance Company Limited, National Insurance Company Limited, The Oriental Insurance Company, United India Insurance, Agricultural Insurance Company of India are the major general insurance companies in India. Bajaj Allianz General Insurance, ICICI Lombard General Insurance, IFFCO-Tokio General Insurance, Reliance General Insurance, Royal Sundaram Alliance Insurance, TATA AIG General Insurance, Cholamandalam General Insurance, HDFC Ergo are the major general insurance private sector companies in India.
15. When was the Oriental Life Insurance Company established?
a) 1818 b) 1834 c) 1907 d) 1938
a) 1818
The first life insurance company started functioning in India was Oriental Life Insurance Company.
16. When was Life Insurance sector nationalised?
a) 1834 b) 1907 c) 1938 d) 1956
d) 1956
Life Insurance Corporation came into existence in 1956.
17. When was Triton Insurance Company Ltd established?
a) 1834 b) 1850 c) 1907 d) 1938
b) 1850
The first General Insurance Company in India was Triton Insurance Company Ltd. It was set up under the control of British.
18. When was the Indian Mercantile Insurance established?
a) 1907 b) 1938 c) 1957 d) 1973
a) 1907
The first company to transact all classes of general insurance business was the Indian Mercantile Insurance.
19. When was the General Insurance Council formed?
a) 1938 b) 1957 c) 1973 d) 1971
b) 1957
The General Insurance Council was established under the Indian Insurance Act 1938. It designed a code of conduct to ensure fair business practices.
20. When was the Export Credit Guarantee Corporation of India established?
a) 1938 b) 1957 c) 1973 d) 1971
b) 1957
On 30 July 1957, Export Credit Guarantee Corporation of India Ltd. ( ECGC ) was established. It provides export credit insurance facilities to exporters and banks in India. It functions under the administrative control of Ministry of Commerce & Industry.
21. When was general insurance business nationalised?
a) 1938 b) 1971 c) 1973 d) 1993
: c) 1973
The nationalisation of general insurance business from 1 Jan 1973, was the effect of the General Insurance Business (Nationalisation) Act. 107 insurers were grouped into four companies: National Insurance Company, the New India Assurance Company, the Oriental Insurance Company and the United India Insurance Company.
22. When was the General Insurance Corporation of India incorporated?
a) 1971 b) 1972 c) 1973 d) 1993
b) 1972
GIC was formed to control and operate the business of general insurance in India.
23. When was the Insurance Regulatory and Development Authority constituted?
a) 1938 b) 1971 c) 1993 d) 1999
d) 1999
The Insurance Regulatory and Development Authority (IRDA) was set up as an autonomous body under the IRDA Act, 1999.
24.Which bank is the sponsor of Prathama Gramin Bank?
a) Bank of Baroda b) Indian Bank c) Punjab National Bank d) Syndicate Bank
d) Syndicate Bank
Prathama Bank is the first Regional Rural Bank established on 2 October 1975.
25. Which of the following is not a public sector bank in India?
a) Andhra Bank b) Federal Bank c) IDBI Bank d) Vijaya Bank
b) Federal Bank
Federal Bank Limited is a major Indian commercial bank in the private sector headquartered at Aluva, Kerala.
26. What is the expanded form of the term ALM used in banking sector?
a) Asset Liability Maintenance b) Asset Liability Management
c) Asset Liability Manipulation d) Asset Liability Maximisation
b) Asset Liability Management
ALM is the practice of managing risks that arise due to mismatches between the assets and liabilities.
27. Which of the following is not a part of India’s Money Market?
a) Banks b) Bill Markets c) Call Money Market d) Indian Gold Council
d) Indian Gold Council
The Money market in India is the money market for short-term and long-term funds with maturity ranging from overnight to one year in India including financial instruments that are deemed to be close substitutes of money.
28. Which one of the following does not belong to regulatory bodies in India?
a) FMC b) IRDA c) PFRDA d) SEBI
d) SEBI
Reserve Bank of India, Insurance Regulatory and Development Authority, Forward Market Commission India, Pension Fund Regulatory and Development Authority are the regulatory bodies in India.
29. Which one of the following is the special drawing rights given by the International Monetary Fund to its member countries?
a) Cold money b) Hot money c) Paper gold d) None of these
c) Paper gold
It is an accounting entry. It is used only among governments and IMF for balance of payment settlements.
30. In pursuance of which one of the following was the General Insurance Corporation of India was formed?
a) General Insurance Business (Nationalisation) Act, 1972 b) Insurance Act, 1938
c) Insurance Amendment Act, 2002 d) IRDA Act 1999
a) General Insurance Business (Nationalisation) Act, 1972
The entire general insurance business in India was nationalised by the Government of India through the General Insurance Business (Nationalisation) Act of 1972.
31. What does the letter ‘S’ denote in the term IFSC?
a) Subscriber b) State c) System d) Source
c) System
The Indian Financial System Code (IFSC Code) is an alphanumeric code that uniquely identifies a bank-branch participating in the Real Time Gross Settlement (RTGS) and the National Electronic Funds Transfer (NEFT) Systems.
32. What is the full form of CBS?
a) Core Banking Solution b) Core Banking Software
c) Core Banking System d) Core Banking Service
a) Core Banking Solution
Core Banking Solution (CBS) is a delivery channel for quick and fast delivery.
33. ‘Subprime lending’ is a term applied to the loans made to ___________________________.
a) Those borrowers who do not have a good credit history
b) Those borrowers who have a good credit history
c) Those borrowers who do not have a good debit history
d) Those borrowers who have a good debit history
a) Those borrowers who do not have a good credit history
These loans are characterized by higher interest rates, poor quality collateral, and less favorable terms in order to compensate for higher credit risk.
34. Which among the following is the act of taking on a risk for a fee?
a) Guidewire b) Initial Public Offering c) Predictive analytics
d) Underwriting
d) Underwriting
Underwriting is provided by a bank, insurer or investment house.
35. Which among the following is called the rate of interest charged by RBI for lending money to various commercial banks by rediscounting of the bills in India?
a) Bank Rate b) Discount Window c) Monetary Policy
d) Overnight Rate
a) Bank Rate
It is also referred to as the discount rate.
36. Which of the following are to be followed by Commercial Banks for risk management?
a) Basel II norms b) Basel III norms c) Basel I norms
d) Solvency II norms
a) Basel II norms
Basel II is the second of the Basel Accords which are recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision.
37. What is the full form of CRR?
a) Cash Reserve Rate b) Cash Reserve Ratio c) Cash Recession Ratio
d) Core Reserve Rate
b) Cash Reserve Ratio
Cash Reserve Ratio is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves with the central bank.
38. What is the full form of ‘MAT’?
a) Maximum Alternate Tax b) Minimum Alternate Tax
c) Maximum Alternate Time d) Minimum Alternate Time
b) Minimum Alternate Tax
The intent of introducing MAT was to ensure that no taxpayer with substantial income can avoid tax liability by using exclusions, deductions and incentives.
39. What is the full form of NDTL?
a) New Demand & Tenure Liabilities b) Net Demand & Time Liabilities
c) National Deposits & Total Liquidity d) Net Demand & Tax Liabilities
b) Net Demand & Time Liabilities
The Cash Reserve Ratio of scheduled banks is fixed at a certain percentage of their NDTL.
40. Which one of the following is known as the recession occurring two times with a small gap in between?
a) Deep Recession b) Deflation c) Double-dip Recession d) Double Inflation
c) Double-dip Recession
A “double-dip recession” is also referred to as a “W-shaped” recession.
41. “Basel Committee on Banking Supervision” is also known as ___________________________.
a) Bank for International Settlements Committee b) Banking Regulation Committee
c) Financial Stability Board d) Global Financial System
a) Bank for International Settlements Committee
At the end of 1974, the central bank governors of the G10 countries established a Committee on Banking Regulations and Supervisory Practices. The Committee was designed as a forum for regular cooperation between its member countries on banking supervisory matters
42.What is the full form of NAV?
a) Net Actual Value b) Net Annual Value c) Net Asset Value d) Net Average Value
c) Net Asset Value
NAV is calculated by the Asset Management Company (AMC) at the end of every business day.
43. Who issues ‘Commercial Papers’?
a) A Company to a Bank b) Banks to Banks c) Banks to Companies
d) Company to its suppliers
b) Banks to Banks
Commercial Paper is one of the instruments through which Corporates raise debt from the market.
44. What is the full form of SWIFT?
a) Safe Window for Interbank Financial Transactions
b) Safe Window In case of Financial Transaction
c) Society for Worldwide Interbank Financial Telecommunication
d) Safe Window Institute For Transactions
c) Society for Worldwide Interbank Financial Telecommunication
The Society for Worldwide Interbank Financial Telecommunication provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.
45. Which of the following is known as the concept of a standard contract to buy or sell a specified commodity at a certain date in future and at a market driven price?
a) Forward Contract b) Futures Contract c) Market Contract d) Standard Contract
b) Futures Contract
Their main purpose is to mitigate risk of default by either party in the intervening period.
46. Which one of the following set up core banking infrastructure for rural banks?
a) IBA b) NABARD c) RBI d) SIDBI
b) NABARD
National Bank for Agriculture and Rural Development has set up joint liability groups (JLG) of farmers to facilitate delivery of credit to farmers. Providing refinance to State Co-operative Banks, Scheduled Commercial Banks and Regional Rural Banks; co-ordinating the activities of different agencies in the field of agriculture and rural credit; improving absorptive capacity of credit delivery system are the major activities of NABARD.
47. Which organization provides credit history of the borrowers?
a) CIBIL b) CII c) FRBI d) IRDA
a) CIBIL
Credit Information Bureau Limited is the first Credit Information Company in India.
48. Which one of the following organisations has been set up to facilitate connectivity between the Bank’s switches and their ATMs, and inter bank payment gateway for authentication and routing the payment details of various e-commerce transactions?
a) IBA b) IDRBT c) IRDA d) SIDBI
b) IDRBT
Institute for Development & Research in Banking Technology is a banking research institute established by Reserve Bank of India in 1996.
49. Which is a tool that helps RBI to stabilize money supply and prices of Government securities?
a) EOQ b) EPQ c) JIT d) OMO
d) OMO
An Open Market Operation is an activity by a central bank to buy or sell government bonds on the open market.
50. Who regulates the Mutual Funds in India?
a) FRBI b) SEBI c) SIDBI d) RBI
b) SEBI
The Securities and Exchange Board of India is the regulator for the securities market in India.
51. What is ‘fiat money’?
a) The currency is backed by Government Guarantee
b) The currency is backed by tangible assets
c) The currency is backed by gold reserves
d) The currency is backed by budgetary support
a) The currency is backed by Government Guarantee
52.A fiat-money currency generally loses value once the issuing government or central bank either loses the ability to or refuses to further guarantee its value.
What is a Lease?
a) A rental agreement between owner of a flat/house and the Tenant, whereby the Tenant pays specified amount on specified dates to the owner
b) A legal contract between the owner of an asset and its user, containing many conditions including payment of a specified amount by the user to the Owner for use of the asset
c) Both (a) and (b) d) None of the above
b) A legal contract between the owner of an asset and its user, containing many conditions including payment of a specified amount by the user to the Owner for use of the asset.
Lease financing for equipment is provided by banks, captives and independent finance companies.
53. What is Factoring?
a) An easy way of raising capital from a factoring company by small business
b) Selling of account receivables on a contract basis for cash payment to a factor before it is due
c) An arrangement for raising short term money against prepaid expenses
d) A method of discounting of long term bills
b) Selling of account receivables on a contract basis for cash payment to a factor before it is due
The three parties involved are the one who purchases the receivable, the one who sells the receivable, and the debtor who has a Financial Liability.
54. Which one of the following is called as initial repayment holiday given to a borrower for repayment of loan?
a) Amortization b) Moratorium c) Subvention d) None of the above
b) Moratorium
The interest rate charged during the moratorium is charged quarterly or half yearly on simple interest basis.
55. Who sets up ‘Base Rate’ for Banks?
a) Individual Banks Board b) Interest Rate Commission of India
c) RBI d) None of the above
c) RBI
Base Rate is the rate below which no Bank can allow their lending to anyone.
56. Which of the following are Bank advances of a Bank?
a) Bad debts b) Non-performing Assets c) Out of order accounts
d) Overdrawn accounts
b) Non-performing Assets
A Non-performing Asset is defined as a credit facility in respect of which the interest has remained ‘past due’ for a specified period of time.
57. Which of the following are benefited through the Reserve mortgage scheme?
a) Government employees b) Minors
c) Senior citizens d) All the above
c) Senior citizens
58. Which of the following are the amounts owed to a company that are not going to be paid?
a) Bad debts b) Non-performing Assets c) Out of order accounts
d) Overdrawn accounts
a) Bad debts
The bad debts associated with accounts receivable is reported on the income statement as Bad Debts Expense or Uncollectible Accounts Expense.
59. Whom with Primary Dealers deal in both primary and secondary markets?
a) Corporate Bonds b) Debentures c) Equities
d) Government Securities
d) Government Securities
60. What will be the impact if Reserve Bank of India reduces the Bank Rate by 1%?
a) Less liquidity in the market b) More liquidity in the market
c) No change in the market liquidity d) Mobilisation of more deposits by commercial banks
b) More liquidity in the market
Market liquidity is a market’s ability to facilitate an asset being sold quickly without having to reduce its price.
61. What is the full form of IRR?
a) Internal Rate of Return b) Internal Reserve Ratio
c) Internal Rate of Ratio d) Internal Recession Rate
a) Internal Rate of Return
The internal rate of return is a rate of return used in capital budgeting to measure and compare the profitability of investments.
62.Which among the following made the initial contribution for setting up Financial Inclusion Fund and Financial Inclusion Technology Fund?
a) Government of India, NABARD and RBI b) NABARD, UTI and RBI
c) SIDBI, Government of India and IDBI Bank d) SIDBI, NABARD and UTI
a) Government of India, NABARD and RBI
The objectives of the FIF shall be to support a developmental and promotional activities with a view to securing greater financial inclusion, particularly among weaker sections, low income groups and in backward regions/hitherto unbanked areas.
The objectives of FITF shall be to enhance investment in Information Communication Technology (ICT) aimed at promoting financial inclusion, stimulate the transfer of research and technology in financial inclusion, increase the technological absorption capacity of financial service providers/users and encourage an environment of innovation and cooperation among stakeholders.
63. Which one of the following is known as the real return to the investor getting reduced due to sudden rise in the prices of the commodities?
a) Cost risk b) Demand risk c) Market risk d) Systemic risk
c) Market risk
Market risks include equity risk, interest rate risk, currency risk, and commodity risk.
64. Which among the following refers to misselling?
(i) 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
a) Only (ii) b) Both (i) and (iii) c) All (i), (ii) and (iii)
d) None of the above
c) All (i), (ii) and (iii)
Selling life insurance to someone who has no dependents is regarded as misspelling.
65. Which of the following is the correct definition of Hot Money?
a) This is the fund which is dumped into a country to get the advantage of a favourable interest rate
b) This is the fund which is provided by a bank in US $ at very short notice and at a very high rate of interest and for a longer period of repayment
c) This is the fund which is pushed into market through illegal methods
d) None of the above
a) This is the fund which is dumped into a country to get the advantage of a favourable interest rate
They can move in and out of the market very quickly leading to market instability.
66. What will bank customers pay for using safe deposit locker facilities?
a) Commission on locker b) Exchange on locker
c) Rent on locker d) Safe custody charges
c) Rent on locker
A safe deposit box is an individually secured container usually held within a larger safe or bank vault.
67. Which one of the following is known as a Savings Bank Account opened with a commercial bank with zero balance or very minimal balance?
a) Current Account b) No frill account c) Savings Bank-ordinary Account
d) Students Savings Bank Account
b) No frill account
68. What does the letter ‘R’ denote in the abbreviation ‘BR Act’ which controls banking activities in the country?
a) Reclamation b) Reformation c) Regulation d) Rule
c) Regulation
Winding up of a banking company is done under the provisions of the Banking Regulation Act, 1949. The reasons for this are inability to pay its debts; moratorium placed on the bank or failure to comply with minimum capital adequacy; failure to comply with requirements of Banking Regulation Act.
69. What is Mortgage?
a) A security created on immovable property for a deposit received by a bank
b) A security created on immovable property for a loan given by a bank
c) A facility created on movable property for a deposit received by a bank
d) A security created on movable property for a loan given by a bank
b) A security created on immovable property for a loan given by a bank
In the case of creation of registered mortgages, the mortgage deed should be presented for registration with Registrar of Assurances within 4 months from the date of execution of the deed.
70. Which is the minimum lending rate decided by RBI which shall be adopted by all Public Sector Banks?
a) Bank rate b) Base rate c) Overnight rate d) None of the above
b) Base rate
71. Which one of the following depicts the financial position of a bank or business enterprise at a given point of time?
a) Balance sheet b) Cash flow statement c) Income statement
d) Model audit
a) Balance sheet
A balance sheet is described as a “snapshot of a company’s financial condition”.
72.What is the full form of FIMMDA?
a) Fixed Income Money Markets & Derivatives Association
b) Foreign Income Money Markets & Derivatives Association
c) Floating Income Money Markets & Derivatives Association
d) Fixed Income Money Markets & Derivatives Affiliation
a) Fixed Income Money Markets & Derivatives Association
FIMMDA is a voluntary market body for the bond, money and derivative markets.
73. Which one of the following provides banking services to all villages having a population upto 2000?
a) Plan for Financial Inclusion b) Plan for Financial Exclusion
c) Plan for Financial Inclusion Technology d) None of the above
a) Plan for Financial Inclusion
‘Financial Inclusion’ is the latest powerful tool adopted by Reserve Bank of India to fulfill the basic objective of connecting every Indian to the country’s banking system.
74. What is the full form of FSDC?
a) Financial Security and Development Council
b) Financial Stability and Development Council
c) Financial Security and Development Convention
d) Fiscal Stability and Development Council
b) Financial Stability and Development Council
The Government of India constituted Financial Stability and Development Council.
75. What is the full form of LIBOR?
a) Local Indian Bank Offered Rate b) London-India Bureau Of Regulations
c) Liberal International Bank Official Ratio d) London Inter Bank Offered Rate
d) London Inter Bank Offered Rate
The London Inter Bank Offered Rate is the average interest rate estimated by leading banks in London.
76. Which one of the following is called the frequent changes made by Banks in their product profile?
a) Product Control b) Product Enhancement c) Product Enrichment
d) Product Marketing
d) Product Marketing
Product marketing deals with product, pricing, place, promotion, physical environment, process and people.
77. What does the letter ‘M’ depict in the term SME as used in the financial world?
a) Maximum b) Medium c) Market d) Mutual
b) Medium
Small and medium-sized enterprises are businesses whose personnel numbers fall below certain limits.
78. Which organization provides guarantee to the exporters?
a) Exim Bank b) Export Credit Guarantee Corporation
c) Reserve Bank of India d) Registrar of companies
b) Export Credit Guarantee Corporation
On 30 July 1957, the ECGC Limited was established with an objective to provide insurance cover in respect of risks in export trade.
79. Which of the following defines ‘Para Banking’ services?
a) Eligible financial services rendered by banks
b) Services provided through business correspondents
c) Services provided to armed forces personnel
d) Utility services provided by banks
d) Utility services provided by banks
Para Banking activities that a bank normally involves are Global Debit Card, Global Credit Card, Bancassurance, Life insurance products, Non life insurance products, cash management.
80. Under whose chairmanship did RBI constitute a Working Group for making balance of payments manual?
a) Anand Sinha b) Deepak Mohanty c) Harun Rashid Khan
d) Kamalesh Chandra Chakrabarty
b) Deepak Mohanty
Deepak Mohanty is the highest ranked economist in Reserve Bank of India.
81. What does ‘Nomination’ for a deposit account in the bank mean?
a) Mandate given by the close relatives of the depositor to settle the death claim in case of death of the depositor
b) Mandate decided by the bank to settle the death claim of its depositor
c) Mandate of the depositor in favor of one or more persons to claim the amount on death of the depositor
d) Mandate of the depositor in favor of a close relative who can claim the amount on death of the depositor
d) Mandate of the depositor in favor of a close relative who can claim the amount on death of the depositor
The account holders can change the nomination anytime.
82.What does RTGS enable?
a) Immediate transfer of money from customer of one bank to customer of another bank
b) Immediate transfer of money from customer of one bank to customer of another branch within the same bank
c) Immediate transfer of money from customer of one bank to customer of another country
d) Immediate transfer of money from customer of one bank to customer of RBI
a) Immediate transfer of money from customer of one bank to customer of another bank
Real Time Gross Settlement Systems are specialist fund transfer systems where transfer of money takes place on “real time” and on “gross basis”
83. Which of the following permit cheque operation?
a) Savings bank accounts and fixed deposit accounts
b) Current accounts and fixed deposit accounts
c) Savings bank accounts and cash accounts
d) Savings bank accounts and current accounts
d) Savings bank accounts and current accounts
When a customer draws a cheque on a bank, it is a mandate on that bank to pay.
84. What happens if a crossed cheque is presented for payment?
a) It can be paid only through a banker b) It cannot be paid at all
c) It can be paid across the counter in another bank d) None of the above
a) It can be paid only through a banker
A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed.
85. Under which sector will banking sector fall?
a) Agricultural sector b) Industrial sector c) Service sector
d) None of the above
c) Service sector
The Indian banking sector is broadly classified into scheduled banks and non-scheduled banks.
86. Which is known as the arrangement when more than one banks allow credit facilities to one party in cordination with each other?
a) Amortization b) Consortium c) Moratorium d) Subvention
b) Consortium
A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal.
87. What is an Indian Depository Receipt?
a) An instrument in the form of deposit receipt issued by Indian depositories
b) An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company
c) A deposit account with a Public Sector Bank
d) A depository account with any of Depositories in India
b) An instrument in the form of depository receipt created by an Indian depository against underlying equity shares of the issuing company
88. What is Call Money?
a) Money borrowed or lent for a day or over night
b) Money borrowed for more than one day but up to 3 days
c) Money borrowed for more than one day but up to 7 days
d) Money borrowed for more than one day but up to 14 days
a) Money borrowed or lent for a day or over night
If it exceeds one day, it is referred to as notice money
89. What is the most powerful tool used by the Reserve Bank of India to control inflation?
a) Raise interest rates b) Raise current supply c) Reduce current supply
d) Reduce interest rates
a) Raise interest rates
90. What does crossing of cheques make them?
a) Invalid document
b) Ineligible to endorse to a person other than the payee
c) Remain the same
d) Ineligible to get cash across the bank counter
b) Ineligible to endorse to a person other than the payee
Crossing ensures security to the holder of the cheque.
91. What happens when a bank dishonours a cheque?
a) It is called settlement of the cheque b) It is called withdrawing of the cheque
c) It is called nullifying of the cheque d) It is called return of the cheque unpaid
d) It is called return of the cheque unpaid
Insufficient fund, the death of the drawer, irregular signature, non-existing account, bankruptcy, frozen account, when there is attention, a post-dated cheque, if there is difference between the amount written in words and that in figures, when payment is stopped are the reasons why most bank cheques are being dishonoured
92.What are NEFT and RTGS about?
a) Cheque truncation process b) Electronic fund transfer from bank to bank
c) Electronic payment products within a bank d) Various deposit products
b) Electronic fund transfer from bank to bank
NEFT operates on a deferred net settlement (DNS) basis and settles transactions in batches. In RTGS, transactions are processed continuously, all through the business hours.
93. With whom does the ownership of Public sector banks rest?
a) Wholly with Government of India
b) Jointly with Government of India and share-holders from the public
c) Jointly with Government of India and State Bank of India
d) Jointly with Government of India and Reserve Bank of India
b) Jointly with Government of India and share-holders from the public
Public Sector Banks are banks where a majority stake is held by a government.
94. Which of the following is not the part of organized sector of India Money Market?
a) Chit Funds b) Mutual Funds c) Non-Banking Financial Companies
d) Reserve Bank of India
a) Chit Funds
Mutual Funds, Non-Banking Financial Companies, Unit Trust of India, Reserve Bank of India are the parts of organized sector of India Money Market.
95. What does RBI regulate through Open Market Operation Transactions?
a) Flow of Foreign Direct Investment b) Borrowing powers of the banks
c) Inflation d) Liquidity in economy
d) Liquidity in economy
Outright purchase and Repurchase agreement are the two traditional type of OMO’s used by RBI.
96. What is the full form of EFT?
a) Electronic Funds Transfer b) Efficient Funds Transfer
c) Effective Funds Transfer d) Electronic Foreign Transfer
a) Electronic Funds Transfer
Electronic Funds Transfer is the transfer of money from one account to another through computer-based systems.
97. What happens if a cheque is post dated?
a) Bank on whom it is drawn will not honour the cheque before the date of the cheque
b) Bank on whom it is drawn has to honour the cheque before the date of the cheque
c) Bank on whom it is drawn has to refer to RBI to honour the cheque before the date of the cheque
d) Bank on whom it is drawn has to refer to court to honour the cheque before the date of the cheque
a) Bank on whom it is drawn will not honour the cheque before the date of the cheque
Post-dated cheque is a cheque written by the drawer for a date in the future
98. Which is the instrument used by RBI under general credit control?
a) CRR b) SLR c) Bank Rate d) Exchange Control
c) Bank Rate
RBI has been playing its role of supervision, control and development of the monetary and banking system in the country through Public Debt Management, Banker to Government, Bankers’ Bank.
99. When an account should be treated as âeœout of ordered?
a) If the outstanding balance is less than the sanctioned limit/drawing power and no credits continuously for 90 days
b) If the outstanding balance is less than the sanctioned limit/drawing power and no credits continuously for 60 days
c) If the outstanding balance is less than the sanctioned limit/drawing power and no credits continuously for 30 days
d) If the outstanding balance is less than the sanctioned limit/drawing power and no credits continuously for one year
a) If the outstanding balance is less than the sanctioned limit/drawing power and no credits continuously for 90 days
If the outstanding balance remains continuously in excess of the sanctioned limit/drawing power and in cases where the outstanding balance is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days or the credits are not enough to cover the interest during the same period, then the account should be treated as account of order.
100. When was the first Land Mortgage Bank established?
a) 1920 b) 1925 c) 1931 d) 1935
a) 1920
The Land Development Banks grant medium term loan for Land Development against the mortgage of lands. In some states these banks are known as Land Mortgage Banks. Land Mortgage Bank provides long term credit against the security of mortgage of land for a period of 5 to 20 years. The main objective of Land Development Bank is providing investment credit for agriculture.