Thursday 13 November 2014

BANKING AWARENESS PRACTICE MCQs FOR BANK EXAMS

1. NSC (National Savings Certificates) are issued in the denominations of :
a) Rs.100
b) Rs.500
c) Rs.1000
d) Rs.5000 & Rs.10,000 only
e) All the above

2. Who headed the RBI panel that has submitted its report titled 'Data Format for Furnishing of
Credit Information to Credit Information Companies'.
a) Urjit Patel
b) A.K.Sharma
c) Aditya Puri
d) R.Gandhi
e) None of these

3. Which of the following countries has topped the list of countries receiving remittances from overseas workers in the year 2013 as per the World Bank report?
a) Philippines
b) China
c) India
d) Mexico
e) None of these

4. Which of the following banks has re-launched its channel on You- Tube with the aim of strengthening its social media presence?
a) HDFC Bank
b) SBI
c) YES Bank
d) ICICI Bank
e) None of these

5. India's first post office savings bank ATM facility has been recently inaugurated in which of the following places?
a) Chennai
b) Bengaluru
c) Mumbai
d) Delhi
e) None of these

6. Which of the following banks has recently launched 'Branch on Wheels' in Odisha as part their financial inclusion plans to provide banking services in remote villages in the state which are devoid of banking facilities?
a) SBI
b) Axis Bank
c) HDFC Bank
d) ICICI Bank
e) None of these

7. Which of the following banks has become the first Indian private sector bank to set up a branch in China?
a) ICICI Bank
b) HDFC Bank
c) YES Bank
d) Axis Bank
e) None of these

8. RBI has recently hiked the trade related remittance limit from Rs. 2 lakh per transaction to___ transaction with immediate effect?
a) Rs. 3 lakh
b) Rs. 4 lakh
c) Rs. 5 lakh
d) Rs. 6 lakh
e) Rs. 8 lakh

9. The term FTZ stands for?
a) Free Trade Zone
b) Food Trade Zone
c) Foreign Trade Zone
d) Fiscal Trade Zone
e) Financial Trade Zone

10. Which of the following is NOT a public sector bank?
a) Corporation Bank
b) UBI
c) Vijaya Bank
d) Bank of Maharashtra
e) Federal Bank

11. What is the minimum period for Commercial paper can be issued?
a) 7 days
b) 14 days
c) 30 days
d) 90 days
e) One year

ANSWERS:
1) e; 2) c; 3) c; 4) b;
5) a; 6) d; 7) d; 8) c;
9) a; 10) e; 11) a.

Sunday 9 November 2014

Indian Banks and their Headquarter, Heads and Slogan



Name of BankHeadquarterFormation
Chairman/Managing Directors
Slogan
Allahabad BankKolkata1865Rakesh SethiA Tradition of Trust
Andhra BankHyderabad1923C. V. R. RajendranFor all your needs
Bank of BarodaBaroda1908S. S. MundraIndia's International Bank
Bank of IndiaMumbai1906Vijayalakshmi R. IyerRelationship beyondbanking
Bank of MaharashtraPune1935Sushil MuhnotOne Family, One Bank
Canara BankBanglore1906R. K. DubeyTogether we can
Central Bank of IndiaMumbai1911Rajeev RishiCentral to you since 1911
Corporation BankMangalore1906Sadhu Ram BansalProsperity to all
Dena BankMumbai1938Ashwani KumarYour Trusted Family Bank Taking Banking
Indian BankChennai1907T. M. BhasinTechnology to the Common Man
Indian Overseas BankChennai1937M. NarendraGood people to grow with
Oriental Bank of CommerceNew Delhi1943S. Lal BansalWhere Every Individual is Committed
Punjab National BankNew Delhi1895K. R. KamathThe name you can bank upon
Punjab and Sind BankNew Delhi1908Jatindraver SinghWhere service is a way of life
Syndicate BankManipal1925Sudhir Kumar JainFaithful, Friendly
UCO BankKolkata1943Arun KaulHonours yours trust
Union Bank of IndiaMumbai1919Arun TiwariGood people to bank with
United Bank of IndiaKolkata1950Deepak Narang, Shri Sanjay AryanThe Bank that begins with U
Vijaya BankBanglore1931V. KannanA Friend you can bank upon

Sunday 2 November 2014

BANKING AWARENESS PRACTICE MCQs FOR ALL BANK EXAMS

1.    Export Oriented Units can retain ___ % of their export earnings in foreign currency.
    A. 50       
B. 100       
C. 80      
D. 66.67   
    E. None of these

2.    Foreign investment in private banks, (in aggregate including FDI, FII, NRI, etc.) in India is permitted up to ____%
    A. 99       
B. 74      
C. 49        
D. 24
    E. None of these

3.    The minimum shareholding of RBI in SBI should be ___% as per SBI Act.
    A. 50         
B. 59        
C. 51        
D. 55
    E. None of these

4.    RBI pays interest on CRR balances of banks at _____.
    A. Bank Rate      
B. Repo Rate         
    C. Bank Rate minus 2%        
D. Zero %
    E. None of these

5.    The three pillars of the Basel II framework are :
    A. Minimum capital requirements              
    B.  Asset - Liability Management   
    C. Market discipline           
    D. Supervisory review        
E. a, c & d

6.    The Code of Bank's Commitment has been issued by  :
    A. RBI            
B. SBI            
C. IBA       
    D. BCSBI       
E. None of these

7.    For declaring dividend, banks should have a CRAR of at least ____% for the preceding 2 years, and net NPA of less than _____%.
    A. 11, 3     
B.  9,  7    
C. 10,   5     
D. 9,  5
    E. None of these

8.    After ________, foreign banks operating in India will be freed of RBI imposed restrictions on their operations and treated on par with Indian banks.
    A. April, 2008           
B. April, 2009         
    C. April, 2010           
D. April, 2015
    E. None of these

9.    Under Section 19(1) of the Banking Regulation Act, 1949, para- banking activities refer to :
    A. leasing        
B.  hire purchase finance   
    C.  factoring    
D. credit card operations   
    E. only a, b & c

10.    The percentage of profit that a bank is required to transfer to its reserve fund as per Banking Regulation Act is ______%.
    A. 25            
B. 20         
C. 30         
D. 50
    E. None of these

11.    Interest payable on savings bank accounts is?
    A. De-regulated by RBI
    B. Regulated by State Governments
    C. Regulated by Central Govt
    D. Regulated by RBI
    E. Regulated by Finance Minister

12.    The usual deposit accounts of banks are?
    A. Current accounts, electricity accounts and insurance premium accounts.
    B. Current accounts, post office savings, bank accounts and term deposit accounts.
    C. Loan accounts, savings bank accounts and term deposit accounts.
    D. Current accounts, savings bank acco- unts and term deposit accounts.
    E. Current bill accounts and term deposit accounts.

13.Fixed deposits and recurring deposits are?
A. Repayable after an agreed period
B. Repayable on demand
C. Not repayable
D.Repayable after death of depositors
E.Repayable on demand or after an agreed period as per bank's choice

14. 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.

15.    Which of the following is correct statement?
    A. 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 accounts and savings accounts are the same.
    D. No interest is paid on any deposit by the bank.
    E. Savings deposits are the same as current deposits.

16.    Banking services delivered to a customer by means of a computer control system that does not directly involve banks branch is called?
    A. Universal banking  B. Virtual banking
    C. Narrow banking
    D. Brick & Mortal banking       
E. None

17.    Financial inclusion means provision of ?
    A. Financial services namely payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the bank
    B. Ration at affordable cost to persons not yet given the same
    C. House at affordable cost to persons not yet given the same
    D. Food at affordable cost to persons not yet given the same
    E. Education at affordable cost to persons not yet given the same

18.    When a bank returns a cheque unpaid, it is called?
    A. Payment of the cheque
    B. Drawing of the cheque
    C. Canceling of the cheque
    D. Dishonor of the cheque
    E. Taking of the cheque

19.    Who is the Chairman of the committee constituted by RBI to study issues and concerns in the Micro Finance Institutions (MFI) Sector?
    A. Y.H Malegam  
B. Dr. KC Chakraborty
    C. C. Rangrajan   
D. M. Damodaran
    E. Usha Thorat

20.    Which of the following types of accounts are known as 'Demat Accounts'?
    A. Accounts which are Zero Balance
    B. Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there
    C. Accounts in which shares of various companies are traded in electronic form
    D. Accounts which are operated through internet banking facility
    E. None of the above

21.    NEFT means?
    A. National Electronic Funds Transfer
    B. Negotiated Efficient Fund Transfer system                 
    C.National Efficient Fund Transfer solution
    D. Non Effective Fund Transfer system
    E.Negotiated Electronic Foreign Transfer system.

22.    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

23.    In respect of partnership business, LLP stands for:
    A. Local Labour Promotion
    B. Low Labour Projects
    C. Limited Loan Partnership
    D. Longer Liability Partnership
    E. Limited Liability Partnership

24.    What is a stale cheque?
    A. A cheque issued without drawer's signature.     
B. A cheque with only signature of the drawer.   
C. A cheque which has completed 3 months from the date of its issue.    
D. Any one of the above.
    E. None

25.    Interest on savings bank account is now calculated by banks on?
    A. Minimum balance during the month
    B. Minimum balance from 7th to last day of the month
    C. Minimum balance from 10th to last day of the month
    D. Maximum balance during the month
    E. Daily product basis

26.    Largest shareholder (in percentage share holding) of a Nationalized bank is ?
    A. RBI            
B. NABARD         
C. LIC
    D. Govt of India         
E. IBA

27.    An account that can be opened by business organisations and also individuals is known as a?
    A. Term deposit     
B. Checking Account
    C. Saving Bank deposit
    D. No Frills Accounts  
E. Current deposit

28.    A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as?
    A. CHAPS        
B. SWIFT        
C. NEFT
    D. SFMS           
E. CHIPS

29.    Buy now & pay later refers to?
    A. Foreign Currency 
B. Internet Banking
    C. US Dollars         
D. Traveler's cheques
    E. Credit Cards

30.    Which one of the following is not 'Money Market Instrument'?
    A. Treasury Bills    
B. Commercial Paper
    C. Fixed Deposit    
D. Equity Shares
    E. None

31.    Which one of the following is a retail banking product?
    A. Home Loans
    B. Working capital finance
    C. Corporate Term Loans
    D. All the above                   
E. None

32.    Finance Ministry has asked the RBI to allow common ATMs that will be owned and managed by non-banking entities hoping to cut transaction costs for banks. Such ATMs are known as?
    A. Black label ATMs
    B. Offsite ATMs
    C. On site ATM's or red ATMs
    D. Third party ATMs
    E. White label ATMs

33.    Technological advancement in the recent times has given a new dimension to banks, mainly to which one of the following aspects?
    A. New Age Financial Derivatives
    B. Service Delivery Mechanism
    C. Any Banking       
D. Any type banking
    E. Multilevel Marketing

34. Which of the following is NOT a function of the Reserve Bank of India?
    A. Fiscal Policy Functions
    B. Exchange Control Functions
    C. Issuance, Exchange and Destruction of currency notes
    D. Monetary Authority Functions
    E. Supervisory and Control Functions

35.    Which of the following is NOT required for opening a bank account?
    A. Identity Proof         
B. Address Proof
    C. Recent Photographs
    D. Domicile Certificate           
E. None

36.    What is the maximum deposit amount insured by DICGC?
    A. Rs. 2,00,000 per depositor per bank
    B. Rs. 2,00,000 per depositor across all banks
    C. Rs. 1,00,000 per depositor per bank
    D. Rs. 1,00,000 per depositor across all bank
    E. None

37.    The Biggest employee in the Private Banking Sector is?
    A. ICICI       
B. HDFC      
C. AXIS Bank    
D. YES Bank      
E. None of these

38.    With reference to a cheque who is drawee?
    A. The bank that collects cheque.
    B. The payee's bank.
    C. The endorsee's bank.
    D. The endorser's bank.
    E. The bank upon which the cheque is drawn.


39. In which of the following fund transfer mechanisms, funds can 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

40.    Banking Ombudsman Scheme is appli- cable to the business of ?
    A. All Scheduled commercial banks excluding RRBs. 

B. All Scheduled commercial banks including RRBs.
    C. Only Public Sector Banks
    D. All Banking Companies  

E. All scheduled banks except private banks.

ANSWERS:
1) B  2) B  3) D  4) D  5) E  6) D  7) B  8) B  9) E  10) B  
11) A  12) D  13) A  14) B  15) A  16) B  17) A  18) D  19) A  20) C  
21) A  22) C  23) E  24) C  25) E  26) D  27) A  28) B  29) E  30) C  
31) A  32) E  33) B  34) A  35) D  36) C  37) C  38) E  39) A  40) B

BANKING AWARENESS PRACTICE QUESTIONS

1.    Nationalization of banks aimed at all of the following except?
    A. Provision of adequate credit for agriculture, SME & exports.
    B. Removal of control by a few capitalists.
    C. Provision of credit to big industries only.
    D. Access of banking to masses.
    E. Encouragement of a new class of entrepreneurs.

2.    Which one of the following banks is headed by a Woman CEO?
    A. Bank of Baroda      
B. HDFC Bank
    C. Central Bank of India  
    D. PNB               
E. ICICI

3.    Base Rate is the rate below which no Bank can lend their funds. Who sets up this 'Base Rate' for Banks?
    A. Individuals Banks Board
    B. Ministry of Commerce
    C. Ministry of Finance          
D. RBI
    E. Interest Rate Commission of India

4.    What is a 'Debit Card'?
    A. It is a card issued by a Rating Agency.
    B. It is a card which can be used for withdrawing cash or making payment even in the absence of any balance in the account.
    C. It is a card which can be used for withdrawing cash or making payment at Point of Sales (POS) if there is balance in the account.
    D. It is a card issued to borrowers
    E. It is a card which can be used for making STD calls.

5.    Bad advances of a Bank are called?
    A. Standard accounts     
B. Book debts
    C. Non Performing Assets
    D. Out of order accounts
    E. Overdrawn accounts

6.    Axis Bank is a?
    A. Public Sector Bank
    B. Private Sector Bank
    C. Co-operative Bank    
D. Foreign Bank
    E. Gramin Bank

7.    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.

8.    Increased interest rates, as is existing in the economy at present will_______
    A. Lead to reduction in borrowings
    B. Lead to lower GDP growth.
    C. Mean higher cost of raw materials.
    D. Mean lower cost of raw materials.
    E. Mean higher wage bill.

9.    Which of the following schemes is launched to provide pension to the members of unorganized sectors in India?
    A. Swabhiman           
B. Jeevan Dhara
    C. Jeevan Kalyan    
D. ASHA
    E. Swalamban

10.    A cheque returned for insufficiency of funds. Payee will have right to issue notice and approach court of law for justice under section 138 of which act?
    A. Indian Penal Code
B. Negotiable Instrument Act
    C. Criminal Procedure Code
    D. Payment and Settlement Act
    E. Indian Contract Act

11.Mr. Rajendra had filed a complaint with Banking Ombudsman and is not satisfied with the decision. What is the next option available for him to get his problem redressed?
    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.

12.    Which of the following is an example of Financial assets?
    A. National Saving Certificate
    B. Infrastructure Bonds
    C. Indira Vikas Patra
    D. Krishi Vikas Patra     
E. All of these

13.    Bank branches which can undertake foreign exchange business directly are known as:
    A. Authorized dealers 
B. Foreign dealers
    C. Overseas branches
    D. Approved dealers
    E. Exchange branches

14.    Insurance cover for bank deposits in our country is provided by ____
    A. SBI     
B. Govt of India   
    C. GIC     
D. LIC          
E. DICGC

15.    The Financial Literacy does not include which of the following?
    A. How to invest the funds
    B. How to use the limited funds carefully
    C. How to minimize the risks
    D. How to reinvest the money earned
    E. None of these

16.    'ADB' refers to-
    A. Amedical Development Bank
    B. Amedical Depository Bureau
    C. Additional Debit Balance
    D. Only a & b
    E. Asian Development bank

17.    When a banker talks about CDR, what is he talking about?
    A. Corporate Debt Restructuring
    B. Corporate Debt Rollover
    C. Company Debt Rollover
    D. Corporate Deposit Restructuring
    E. Company Deposit Restructuring

18.    Expand the term ALM as used in Banking/Finance sector?
    A. Asset Liability Management
    B. Asset Liability Maturity
    C. Asset Liability Mismatch
    D. Asset Liability Manpower
    E. Asset Liability Maintenance

19.    Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are terms most closely related to which of the following industries/ markets?
    A. Capital Market    
B. Banking industry
    C. Commodities market
    D. Money Market        
 E. Mutual funds

20.    What is the maximum period for which domestic term deposits are normally accepted by the banks in our country?
    A. 3 yr  
B. 5 yr  
C. 7 yr 
D. 10 yr  
E.12 yr

21.    If you wish to purchase some US Dollars for your travel abroad, you should approach?
    A. The Ministry of Finance
    B. The US Embassy
    C. Any Bank Branch authorized to do such activity
    D. The Reserve Bank of India
    E. External Affairs Ministry

22.    What does the letter 'L' stands for in the term LAF commonly used in financial/economic news?
    A. Liquidity      
B. Least      
C. Liabilities
    D. Long    
 E. Liquid

23.    Which of the following is not classified as a Commercial Bank?
    A. Public Sector Bank
    B. Foreign Bank   
C. Private Sector Bank
    D. Regional Rural Bank
    E. Urban Cooperative Bank

24.    Which of the following is not the name of the a Banking Organization?
    A. HDFC    
B. IDBI          
C. YES
    D. SEBI     
E. ICICI

25.    Money laundering means
    A. Concealment of income source mainly to avoid income tax
    B. Money acquired from undisclosed sources and deposited in foreign banks
    C. Money acquired from undisclosed sources and deposited in foreign banks
    D. Process of conversion of money obtained illegally to appear to have originated from legitimate sources to convert black money into white money
    E. Money acquired from drug trafficking

26.    Monetary Policy as an arm of the economic policy is administered by
    A. Government of India            
B. RBI
    C. SBI    
D. Govt of the respective states
    E. None

27.    Which of the following is not a primary function of a Bank?
    A. Granting loans
    B. Collecting cheques/ drafts of Customers
    C. Arranging VISA for students for abroad education   
D. Issuing bank drafts
    E. Selling Gold/Silver Coins.

28.    Reserves that can act as a liquidity buffer for Commercial Banks during crisis times are
    A. CAR       
B. CRR       
C. CAR & CRR
    D. CRR & SLR     
E. SLR

29.    The Capital Market of Indian financial system deals with which of the following funds?
    A.  Hedge funds      
B.  Short-term funds
    C.  Long-term Funds
    D.  Government Funds  
E. None of these

30.    Which of the below acts as the principle regulator in the capital market in India?    
    A.  IRDA     
B.  RBI            
C.  SIDBI
    D.  SEBI    
E. None of these

31.    The security which is a claim on the government and is a secure financial instrument guarantees certainty of both capital and interest is called?    
    A.  Gilt-Edged Security     
    B.  Call Money      
C.  Treasury Bills     
    D.  Certificate of Deposits
    E. None of these

32.    Banks generally borrow funds from which of the following money markets to meet the mandatory Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) requirements as stipulated by the Central bank?    
    A.  Notice Money Market     
    B.  Call Money Market    
    C.  Bill Market         
D.  Money Market
    E. None of these

33.    Which one of the following agency is a creditor's rating agency?    
    A.  ICRA     
B.  CARE    
C.  CRISIL     
    D.  All of the Above     
E. None of these

34.    Which of the following bank acts as a government banker?   
    A.  State Bank of India     
    B.  All Public Sector Banks    
    C.  Co-operative Banks     
    D.  Scheduled Banks     
E. None of these

35.    Reserve Bank of India was setup on the recommendations of which of the following commission/committee?    
    A.  Royal Commission     
    B.  Hilton Young Commission    
    C.  Dantwala Committee     
    D.  D R Mehta Commission
    E. None of these

36.    The Central bank of India, RBI, reviews the monetary policy for every   
    A.  Three Months     
B.  Six Months    
    C.  Nine Months       
D.  Twelve Months
    E. None of these

37.    The Deposit insurance facility provided by the DICGC is not available for which of the following    
    A.  LIC            
B.  GIC           
C.  SIDBI     
    D.  NBFCs       
E. None of these

38.    Which of the following is a Develop- ment Bank in India?  
    A.  IFCI      
B.  IDBI    
C.  NHB     
    D.  All of the Above
    E. None of these

39.    The bank which refinances the loans given to the poor and weaker sections to construct or buy houses is    
    A.  SIDBI     
B.  IDBI       
C.  NHB     
    D.  IIBI    
E. None of these

40.    ACH is a nationwide automated electronic system that monitors and administers the process of check and fund clearance between banks. Expand ACH.  
    A.  Automatic Check Clearing House     
    B.  Automated Check House    
    C.  Automated Clearing House     
    D.  Automatic Clearing House
    E. None of these
 
ANSWERS:
1) C  2) E  3) A  4) C  5) A  6) B  7) A  8)C  9) E  10) B  
11) B  12) D  13) A  14) A  15) E  16) E  17) A  18) A  19) B  20) D  
21) C  22) A  23) E  24) D  25) D  26) B  27) C  28) D  29) C  30) D  
31) A  32) B  33) D  34) A  35) B  36) A  37) D  38) D  39) C  40) C

Sunday 19 October 2014

BANKING AWARENESS PRACTICE MCQs FOR ALL BANK EXAMS

1. Which of the following is not a debt instrument in banking parlance?
a) a Certificate of deposit
b) Bonds
c) Stocks
d) Commercial papers
e) Debentures

2. Which of the following is NOT a scheduled Commercial Bank?
a) HDFC Bank
b) Axis Bank
c) IDBI Bank
d) NABARD
e) SBI

3. Which of the following organizations/ agencies is not associated with banking and Finance?
a) SEBI
b) AMFI
c) RBI
d) ECGC
e) ONGC

4. Who amongst the following Padma Bhushan Awardees is a famous banker?
a) Mr. Azim H. Premji
b) Ms. Chanda Kochhar
c) Ms. Kapila Vatsyayan
d) Mrs. Waheeda Rehman
e) Mr. Brajesh Mishra

5. Which of the following has been renamed as "Annual Policy Statement" by the Reserve Bank of India?
a) Busy season banking policy
b) Slack season banking policy
c) Monetary and credit policy
d) Annual statistical report
e) None of the above

6. Which committee has recommended introduction of smart card?
a) Rangarajan committee
b) Saraf committee
c) Nayak committee
d) Pannirselvan committee
e) None of the above

7. Which committee had formulated consultative profile in connection with electronic funds transfer?
a) A.K. Purwar committee
b) Y V Reddy committee
c) K S Shere committee
d) S. A. Dave committee
e) None of the above

8. The process of transformation of physical shares, commercial paper or certificate of deposit into
electronic form is called as:
a) Electronic clearing service
b) Electronic securitization
c) Share truncation
d) Dematerialisation
e) None of the above

9. Providing banking services to a customer without his entrance inside the bank's branch is called
as:
a) Virtual banking
b) Relationship banking
c) Universal banking
d) Mobile banking
e) None of the above

10. Where is the headquarters of "Society for worldwide Inter bank Financial Telecommunication
- SWIFT" situated?
a) New York
b) Los Angels
c) Brussels
d) Hague
e) None of the above

11. Where has National Financial Switch of IDRBT established?
a) Mumbai
b) New Delhi
c) Hyderabad
d) Bangalore
e) None of the above

12. If the employees of the bank go on strike, it results in?
a) Operational risk
b) Employee risk
c) Credit risk
d) Market risk
e) Systemic risk

13. Which of the following is not included in three pillars of BASEL capital accord?
a) Minimum capital requirement
b) Supervisory review
c) Market discipline
d) Core banking solution
e) None of the above

14. When ICICI Limited merged with ICICI bank?
a) 1st August, 2000
b) 1st August 2001
c) 1st August, 2002
d) 1st August, 2003
e) None of the above

15. Which bank has changed its name to AXIS bank limited?
a) Centurion bank
b) Times bank
c) Bank of Punjab Limited
d) Bank of Karad
e) UTI bank limited

16. Times Bank Limited merged with:
a) HDFC Bank
b) Bank of India
c) Punjab National Bank
d) Central Bank of India
e) None of the above

17. Which of the following Banks & Head Offices is not correct?
a) State Bank of Bikaner & Jaipur - Jaipur
b) State Bank of Hyderabad - Hyderabad
c) State Bank of Mysore - Mysore
d) State Bank of Patiala - Patiala
e) State Bank of Travancore - Thiruvananthapuram

18. CCIL stands for:
a) Cement Corporation of India Limited
b) Central Clearing Company Ltd.
c) Clearing Corporation of India Limited
d) Cash Credit facility in Installment Lending
e) None of the above

19. When was Reserve Bank of India Nationalized?
a) 1947
b) 1948
c) 1949
d) 1950
e) 1952

20. Which one of the following is the new sub-category of the commercial real estate sector (CRE) as per the latest RBI directive?
a) Residential projects
b) Commercial projects
c) Industrial projects
d) SEZ projects
e) None of the above

21. In India, the Chit funds are governed / Regulated by ___?
a) RBI
b) Central Government
c) State Governments
d) Local Bodies
e) State Finance Corporation

22. "The bank for a changing world" is the punch line of:
a) BNP Paribas
b) Scotia Bank
c) Royal Bank of Scotland
d) CITI Bank
e) American Express Bank

23. The RBI is also set to introduce a fifth Deputy Governor in the top management of the central
bank. The fifth Deputy Governor will be designated as ___
a) COO (Chief Operating Officer)
b) CFO
c) CEO
d) CAO
e) None of these

24. What is the RBI's model for rating of Indian banks?
a) CAMEL
b) CAMELS
c) CRISIL
d) CARE
e) None of these

25. Oriental Bank of Commerce was established in the year:
a) 1943
b) 1953
c) 1963
d) 1973
e) 1983

26. What is the Punch line of "ICICI Bank"?
a) World's Local Bank
b) We Understand Your World
c) Hum Haina …
d) Serving to Empower
e) Good people to grow with

27. Who is the CMD of Union Bank of India?
a) R. M. Malla
b) S. Raman
c) M D. Mallya
d) T. M. Bhasin
e) Arun Tiwari

28. Which among the following is correct full form of CAS in context with banking markets in India?
a) Cash Authorization Scheme
b) Credit Authorization Scheme
c) Credit Access System
d) Credit Arrangement System
e) Cash Accreditation Scheme

29. A medium term note (MTN) programme is issued to ___
a) Provide loans
b) Raise Funds
c) Sell Equity
d) Purchase shares
e) Any of the above

30. Which among the following regulate the commodity markets in India?
1) RBI
2) SEBI
3) Forward Market Commission
Choose the correct option from the codes given below:
a) Only 1 & 2
b) Only 2 & 3
c) Only 1 & 3
d) Only 3
e) None of the above

31. Which among the following is a major qualitative control measure used by RBI?
a) Bank Rate Policy
b) Open Market Operations
c) Ways and means advances
d) Reserve Ratio Requirements
e) Margin Requirements

32. Which of the following is known as plastic money?
a) Bearer cheques
b) Credit cards
c) Demand drafts
d) Gift cheques
e) None of these

ANSWERS:
1) c 2) d 3) e 4) b 5) c 6) b 7) c 8) d 9) a 10) c
11) c 12) a 13) d 14) c 15) e 16) a 17) c 18) c 19) c 20) a
21) c 22) a 23) a 24) b 25) a 26) c 27) e 28) b 29) b 30) d
31) e 32) b

Sunday 12 October 2014

RBI Rates as on 30th September 2014 RBI's fourth bi-monthly monetary policy statement of 2014-15

★ Bank Rate: 9% 
★ CRR (Cash Reserve Ratio): 4%
★ Repo Rate: 8% 
★ Reverse Repo Rate: 7%
★ SLR (Statutory Liquidity Ratio): 22%

BANKING TERMINOLOGY

Bank Rate:
Bank rate is a rate of interest. It is an official rate of interest of RBI. It is also a minimum rate of interest at which RBI advances loans to Banks and financial institutions. RBI lends to banks and financial institutions by rediscounting the approved first class bills of exchange of banks as security. So this Bank rate is also called as Discount rate. It is also an instrument used for credit control.
★ RBI uses Bank rate to control inflation or deflation. If inflation in the country is high and it is keeping on mounting RBI increases the Bank rate in order to bring down the inflation. In case of deflation, RBI decrease the Bank rate which allows more money supply in the economy and deflation will be in control.

Cash Reserve Ratio (CRR):
Cash reserve ratio is a quantitative method of monetary control. This is an instrument used by RBI to control credit in the economy. Cash reserve ratio means the percentage of cash that scheduled banks need to be deposited with RBI. The percentage is calculated on the Net Demand and Time Liabilities (NDTL) of the bank deposits at any given point of time. This is a mandatory reserve to be kept by the banks to meet the unexpected withdrawals from customers.

Statutory Liquidity Ratio (SLR):
This is also a quantitative measure takes by RBI in order to control the credit supply in the economy. This is the minimum statutory reserve that scheduled banks must maintain with RBI at any given point of time. The statutory reserves are of liquid assets of banks like gold, cash in hand, Government securities, current account balances with other banks etc.

Repo Rate:
Repo rate or Repurchase Rate is at which RBI lends to banks for short periods. This is a debt instrument used by RBI to control money supply in the economy. In order to lend loan to banks, RBI ask Treasury bills and dated government securities as guarantee from banks. RBI repurchases those Government securities at a predetermined rate (which is known as Repo Rate) and date.

Reverse Repo Rate:
Reverse Repo rate is at which RBI barrow from banks. This is also a debt instrument used by RBI to control money supply in the economy. If RBI wants money then it will like to borrow from banks at a reverse repo rate by selling treasury bills at predetermined rate (which is known as Reverse Repo Rate) and dated government securities.

Banking Knowledge Practice Questions

1. Reserve Bank of India's reserve ratios are ....
a) SLR
b) CRR
c) REPO
d) Only a and b
e) Reverse REPO

2. If the bank rate is increased by RBI then ......
a) The lending rates of commercial banks also increases.
b) Cost of credit increases in the money market.
c) Demand for bank loans decreases.
d) Due to demand for goods will also decreases, inflation can be controlled.
e) All the above

3. If RBI wants to raise credit supply in the money market ......
a) RBI provide special schemes and gifts to promote more loans in market.
b) RBI decreases the bank rate.
c) RBI lend more money to banks.
d) RBI increases the bank rate.
e) None of these

4. Who acts as a custodian of cash reserves of scheduled banks ......
a) Reserve Bank of India
b) State Bank of India
c) Central Bank of India
d) Central Government of India
e) None of these

5. When does banks need to maintain mandatory reserve ratio?
a) Quarterly
b) Yearly (Financial)
c) Half yearly
d) At any given point of time
e) None of these

6. What is the rate charged by banks for discounting of approved bill of exchange?
a) Repo Rate
b) Reverse Repo Rate
c) Bank Rate
d) All the above
e) None of these

7. If RBI manipulate the Bank Rate then .......
a) Increase in supply of credit in economy.
b) Decrease in supply of credit in economy
c) Advance loans are stopped.
d) Either increase or decrease in the credit supply in economy.
e) Neither increase nor decrease in supply of credit in economy.

8. To arrest the rise in the price levels during inflation .......
a) RBI reduces the Bank Rate
b) RBI raises the Bank Rate
c) RBI manipulate the Bank Rate
d) All the above
e) None of these

9. Why does RBI need to change CRR or SLR?
a) To show that it is the supreme power for monetary system in India
b) To have grip over banking system
c) Depends upon the monetary requirements and conditions of the economy
d) Because corporate and big companies need more money to expand their business
e) All the above

10. Liquidity Adjustment Facility (LAF) mean .....
a) Advancing loans to banks in adjusting day to day mismatches in the liquidity.
b) Facilitates banks credit expansion.
c) Unsecured money market facility.
d) Maintaining the liquidity in the form of gold, cash and government securities.
e) None of these

11. Repo and Reverse Repo operations are .....
a) Reduction of excess of expenditure
b) Variable reserve ratio operations
c) Issuing and paying agent operations
d) Liquidity adjustment facility operations
e) None of these

12. When do banks get money at cheaper rate?
a) When CRR is increased
b) When Repo is lowered
c) When Reverse Repo is lowered
d) When SLR is lowered
e) None of these

13. Pulling out excess money from banks means .........
a) Raising CRR
b) Raising LAF
c) Reducing CRR
d) Reducing SLR
e) Keeping Variable Reserve Ratios unchanged

14. The rate of interest that RBI charge on banks for long term lending is .......
a) Repo Rate
b) Bank Rate
c) Reverse Repo Rate
d) Base Rate
e) None of these

15. Money available cheaper from RBI means .........
a) Bank rate is low when compared to previous bi monthly monetary policy
b) Repo Rate is low when compared to previous bi monthly monetary policy
c) Reverse repo rate is unchanged when compared to previous bi monthly monetary policy
d) Both a and b
e) None of these

16. When can RBI sell more government securities to banks?
a) When RBI increases the SLR
b) When RBI decreases the SLR
c) When RBI increases the CRR
d) When RBI decreases the CRR
e) None of these

17. Regional Rural Banks (RRBs) need to maintain their complete SLR in .......
a) Gold and cash
b) Loans and advances to rural poor
c) Government and other approved Securities
d) They need not maintain as sponsor bank maintains the SLR
e) None of these

18. Reverse Repo Rate is an instrument used by RBI in order to ........
a) Pull out excess liquidity in the economy.
b) Maintain liquidity at a certain level.
c) Increase the liquidity levels in the economy.
d) Decrease the liquidity in the banking system.
e) None of these

19. Identify the false statement from the following.
a) When RBI sells government securities to banks the main purpose of selling may be to raise more funds for banks.
b) When RBI buys the government securities from banks the main purpose of buying may be to pull out excess money from banks.
c) When RBI sells government securities to banks it is raising funds to governments in the form of borrowing.
d) When RBI repurchasing government securities for a short period from banks it is pumping more funds in the banking system.
e) None of these

20. Repurchasing the government securities means .......
a) RBI is lending to banks
b) Banks are lending to RBI
c) Government is lending to banks
d) RBI is lending to government
e) None of these

21. In RBI’s monetary policy, Liberal Money Policy means .......
a) Banks no need to deposit more excess cash as reserves.
b) Banks are asked for more and more deposits to be held with RBI.
c) CRR is Decreased
d) Both a and c
e) None of these

22. RBI’s fifth bi-monthly monetary policy statement of 2014-15 is/ was scheduled on .....
a) 30th Sep, 2014
b) 2nd Jan, 2014
c) 2nd Dec, 2014
d) 5th Aug, 2014
e) None of these

ANSWERS:
1-d, 2-e, 3-b, 4-a, 5-d, 6-c, 7-d, 8-b, 9-c, 10-a
11-d, 12-b, 13-a, 14-b, 15-d, 16-a, 17-c, 18-b, 19-e, 20-a, 21-d, 22-c