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Banking and financial Awareness Previous Year Questions

Lesson 1 Banking Functions (Banking and financial Awareness Previous Year Questions)

Table of Contents

Q Q1. Which of the following terms/names is not associated with banking/financial trade in India ?

(a) Automated Clearing House
(b) Provision Coverage Ratio
(c) Market Stabilisation Scheme
(d) Credit Default Swaps
(e) Double Fault
Ans: (e)

Q 2. Some banks which were not able to meet their priority sector lending targets are now allowed to do so by purchasing Priority Sector Lending Certificates . Which of the following agencies/organisation is/are authorized to issue this certificates ?
Micro Finance Institutions
Non Banking Finance Companies

(a) Only
(b) Only
(c) Only and
(d) Only , and
(e) None of these
Ans: (b)

Q 3. Value added services means _______.

(a) costlier products
(b) large number of products
(c) additional services
(d) at par services
(e) None of these
Ans: (c)

Q 4. The performance of a sales person depends on _____.

(a) salary paid
(b) sales incentives paid
(c) size of the sales team
(d) ability and willingness of the sales person
(e) team leader’s aggressiveness
Ans: (d)

Q 5. A major Public Sector Bank raised interest rates on loans by 25 basis points – was news in some major financial newspapers recently. This means the bank has raised interest by 25 basis points of

(a) Savings Bank Interest Rate
(b) Base Lending Rate
(c) Repo Rates
(d) Present Rates on Deposits
(e) Discounted Rates of Interest
Ans: (b)

Q 6. Banks and other financial institutions in India are required to maintain a certain amount of liquid assets like cash, precious metals and other short-term securities as a reserve all the time. In Banking World this is known as

(a) CRR
(b) Fixed Asset
(c) SLR
(d) PLR
(e) None of these
Ans: (c)

Q 7. Which of the following statement is true?

(a) Banks cannot accept demand and time deposite from public.
(b) Banks can accept only demand deposits from public.
(c) Banks can accept only time deposits from public.
(d) Banks can accept both demand and time deposits from public.
(e) Banks can accept demand and time deposits only from government.
Ans: (d)

Q 8. Accounts are allowed to be operated by cheques in respect of

(a) Both Savings bank accounts and fixed deposit accounts
(b) Savings bank accounts and current accounts
(c) Both Savings bank accounts and loan accounts
(d) Both Savings bank accounts and cash accounts only
(e) Both Current accounts and fixed deposit accounts
Ans: (b)

Q 9. Which of the following is correct statement?

(a) Normally no interest is paid on current deposit accounts
(b) Interest is paid on current accounts at the same rate as term deposit accounts
(c) The rate of interest on current account and savings account are the same
(d) No interest is paid on any deposit by the bank
(e) Savings deposits are the same as current deposits.
Ans: (a)

Q 10. When a bank returns a cheque unpaid. It is called

(a) payment of the cheque
(b) drawing of the cheque
(c) cancelling of the cheque
(d) dishonour of the cheque
(e) taking of the cheque.
Ans: (d)

Q 11. Distribution of Insurance products and Insurance policies by banks as corporate agents is known as

(a) General Insurance
(b) Non-life Insurance
(c) Bancassurance
(d) Insurance banking
(e) Deposit Insurance
Ans: (c)

Q 12. In which of the following fund transfer mechanisms, can funds be moved from one bank to another and where the transaction is settled instantly without being bunched with any other transaction ?

(a) RTGS
(b) NEFT
(c) TT
(d) EFT
(e) MT
Ans: (a)

Q 13. By increasing repo rate, the economy may observe the following effects __________.

(a) Rate of interest on loans and advances will be costlier
(b) Industrial output would be affected to an extent
(c) Banks will increase rate of interest on deposits
(d) Industry houses may borrow money from foreign countries
(e) All of these
Ans: (c)

Q 14. Mr. Rajendra had filed a complaint with Banking Ombudsman but is not satisfied with the decision. What is the next option before him for getting his matter resolved ?

(a) Write to the CMD of the Bank.
(b) File an appeal before the Finance Minister.
(c) File an appeal before the Banking Ombudsman again.
(d) File an appeal before the Dy. Governor RBI.
(e) Simply close the matter as going to court involves time and money.
Ans: (d)

Q 15. Invisible Export means export of _____.

(a) Services
(b) Prohibited goods
(c) Restricted goods
(d) Goods as per OGL list
(e) Other than those given as options.
Ans: (a)

Q 16. Banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of India. This portion is called _______.

(a) Statutory Liquidity Ratio
(b) Cash Reserve Ratio
(c) Bank Deposit
(d) Reserve Repo
(e) Government Securities
Ans: (b)

Q 17. Interest on Savings deposit nowadays is _____________.

(a) Fixed by RBI
(b) Fixed by the respective Banks
(c) Fixed by the Depositors
(d) Fixed as per the contract between Bank and the Consumer Court
(e) Not paid by the Bank
Ans: (b)

Q 18. Value added services means _____.

(a) Low Cost products
(b) High cost products
(c) At par services
(d) Additional services for the same cost
(e) Giving discounts
Ans: (d)

Q 19. A bank without any branch network that offers its services remotely through online banking, telephone/mobile banking and interbank ATM network alliances is known as

(a) Universal Banking
(b) Indirect Bank
(c) Door Step Bank
(d) A Direct Bank
(e) Unit Banking
Ans: (d)

Q 20. The Aadhar-enabled Payment System is a bank-led model that facilitates banking facilities through banking correspondents across banks. However, Aadhaar- enabled basic types of banking transactions do ‘not’ include

(a) Aadhaar to Aadhaar funds transfer
(b) Small overdraft facility
(c) Cash withdrawal
(d) Balance enquiry
(e) Cash deposit
Ans: (b)

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