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Banking Awareness Quiz 7 – Practi...

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Banking Awareness Quiz 7 – Practice Sets

shape Introduction

Banking Awareness is an important section in the employment related competitive exams in India. In particular, exams like IBPS, SBI and other bank related employment exams have banking awareness questions along with general awareness section. The Banking Awareness section primarily has questions related to the History of Banking, Banking Terms, Banking Products, Functions of Banks, Banks and their Taglines, Schemes, Committees related to Banking, Headquarters of Banks, most recent Banking News, Apps launched by Banks, New Schemes, Monetary Policies etc.

Banking Awareness Quiz 7 – Practice Sets article provides the list of several bank related questions to prepare aspirants of different competitive exams in India, primarily for banking related employment. The article Banking Awareness Quiz 7 – Practice Sets is very useful for different exams such as IBPS PO, Clerk, SSC CGL, SBI PO, NIACL Assistant, NICL AO, IBPS RRB, Railways, Civil Services etc.

shape Quiz

1. Many a times Government raises additional resources through taxation & allocation of expenditure as per its requirements. It is known as ———


    A. Credit Policy
    B. Fiscal Policy
    C. Monetary policy
    D. Taxation Policy
    E. None of these


Answer: Option A

2. In which year did second phase of nationalization of banks took place?


    A. 1969
    B. 1979
    C. 1980
    D. 1990
    E. None of these


Answer: Option C

3. SLR is maintained by banks on which of the following


    A. Demand and Time Deposits
    B. Net Demand and Time Deposits
    C. Demand and Time Liabilities
    D. Net Demand and Time Liabilities
    E. None of these


Answer: Option D

4. What is the base year for new series of IIP (Index of Industrial Production) ?


    A. 1993-94
    B. 1994-95
    C. 2003-2004
    D. 2002-2003
    E. 2004-2005


Answer: Option E

5. Which of the following is not an objective of fiscal policy of Government of India ?


    A. Price Stability
    B. Full Employment
    C. Equal distribution of Income and Wealth
    D. Regulation of Inter State Trade
    E. None of these


Answer: Option D

6. Increase in Fiscal Deficit leads to ______.


    A. No change in BOP
    B. Increase in Balance of Payments
    C. Reduction in Balance of Payments
    D. 1 and 2
    E. None of these


Answer: Option C

7.’Growth with Stability’ was the aim of which of the following Five Year Plans ?


    A. Second Plan
    B. Third Plan
    C. Fourth Plan
    D. Fifth Plan
    E. None of these


Answer: Option C

8. Which of the following is not a part of India’s Money Market ?


    Money Lenders
    B. Indian Gold Council
    C. Bill Markets
    D. Banks
    E. None of these


Answer: Option B

9. When more than one banks are allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is called __.


    A. Secularization
    B. Participation
    C. Consortium
    D. Consolidation
    E. None of these


Answer: Option C

10. International Bank for Reconstruction and Development is related to _____.


    A. World Bank
    B. ADB
    C. IMF
    D. Federal Bank
    E. None of these


Answer: Option A

1. A banking system in which a big bank has a number of branches in different parts of the country is known as ___.


    A. Unit Banking
    B. Branch Banking
    C. Mixed Banking
    D. Chain Banking
    E. None of these


Answer: Option B

2. Which of the following is an example of near money ?


    A. Fiat money
    B. Bank Draft
    C. Treasury Bills
    D. 50 paise coins
    E. None of these


Answer: Option C

3. Raising or lowering of the central bank discount rate is known as ____.


    A. Bank rate policy
    B. Open market operation
    C. Cash reserve ratio
    (4)D. 2 and 3
    E. None of these


Answer: Option A

4.’Gold Tranche’ refers to ___.


    A. a credit system granted by IMF to its members.
    B. A loan system of the World Bank
    C. A credit system granted by WTO to its members.
    D. OneoftheoperationsofaCentralBank
    E. None of these


Answer: Option A

5. National Food Security Mission was launched in the year ___.


    A. 2005-06
    B. 2006-07
    C. 2007-08
    D. 2008-09
    E. None of these


Answer: Option C

6. Which is a legal tender in a modern economy amongst the following ?


    A. Currency notes
    B. Cheques
    C. Bank Draft
    D. Promissory notes
    E. None of these


Answer: Option A

7. Which of the following doesn’t relates with banking or finance ?


    A. Devaluation
    B. Hundis
    C. Flare
    D. Gearing
    E. None of these


Answer: Option C

8. ESOP means


    A. Employee stock option play
    B. Employee shair object plan
    C. Employee stock option plan
    D. Enter shair object plan
    E. All of these


Answer: Option C

9. Which of the following is not a characteristics of Fiat money?


    A. Fiat money is created and issued by the state
    B. Fiat money is inconvertible by law
    C. Its value as a commodity is as great as its value as money
    D. It is a legal tender
    E. None of these


Answer: Option C

10. A banking system where all operations are confined to a single office is known as _____.


    A. Unit Banking
    B. Group Banking
    C. Chain Banking
    D. Branch Banking
    E. None of these


Answer: Option A

1. Which of the following is not a Financial/Economic term?


    A. Marginal Utility
    B. Dumping
    C. Pipette
    D. Break Even Point
    E. None of these


Answer: Option C

2. What is the full form of FIMMDA?


    A. Fined Income More Money Derivatives Authority
    B. Fixed Income Measuring Money Dumping Association
    C. Fixed Income Money Market and Derivatives Association
    D. Fixed Initial Money Market Development Authority
    E. None of these


Answer: Option C

3. An organisation which pools money from investors & invests in stock, bonds, shares is called ______.


    A. Bancassurance
    B. A Bank
    C. Insurance company
    D. Mutual Fund
    E. None of these


Answer: Option D

4. Which of the following term in related with Economy?


    A. Absolute Zero
    B. Amplitude
    C. Soft patch
    D. Buoyancy
    E. None of these


Answer: Option C

5. Which of amongst the following is not the aim of Debt Management?


    A. Stabilizing prices
    B. Social service fund
    C. Proper timing & issuing of government bonds
    D. Cost effective services
    E. None of these


Answer: Option B

6. When RBI wants to reduce liquidity in the banking system

(A) It increases the CRR
(B) It increases the SLR
(C) It increases the Repo Rate


    A. Only A
    B. Only B
    C. Only C
    D. All A, B and C
    E. None of these


Answer: Option A

7. Negotiated Dealing System Relates to _____.

(A)Trading at stock markets
(B) Settlement of security dealings
(C)Trading in government securities


    A. Only A
    B. Only B
    C. Only C
    D. All A, B and C
    E. None of these


Answer: Option C

8. The Base rate of each bank is to be reviewed after every_______.


    A. Quarter
    B. Month
    C. Year
    D. Week
    E. Day


Answer: Option A

9. Gross Domestic Product is a measure of_______.


    A. a country’s internal trade relation
    B. a country’s domestic economic activities
    C. a country’s financial position
    D. a country’s foreign trade relation
    E. None of these


Answer: Option D

10. In which of the following years, the concept of Micro Finance launched ?


    A. 1982
    B. 1992
    C. 2002
    D. 1972
    E. None of these


Answer: Option C

1. The network for common data communication for Banks and Financial Institutions launched by RBI is________


    A. INTERNET
    B. INFINET
    C. SWIFT
    D. BANKNET
    E. None of these


Answer: Option D
2. If a loan is repaid by a cheque, ____.


    A. Total bank reserves in the system decreases.
    B. Total bank reserves are not affected.
    C. Increase in total bank reserves in the system.
    D. 1 and 3 both
    E. None of these


Answer: Option B

3. Consider the following statements about Gold Standard and state which of them are true ?

(A) Gold Standard means there exists a fixed relationship between any two currencies called
the mint parity.
(B)It also means the exchange rate is determined by demand and supply between the gold points.
(C) Each nation defines the price of gold in terms of its currency and then stands ready to buy
and sell.


    A. Only C
    B. Only B
    C. All are true
    D. Only A
    E. None of these


Answer: Option C

4. Which of the following is not a component of bank deposits ?


    A. Fixed deposits
    B. Current A/C deposits
    C. Recurring deposits
    D. Safe deposits
    E. None of these


Answer: Option D

5. The new issue market is connected with _______.


    A. New issue of treasury bills
    B. New issue of currency notes
    C. Issue of IPO
    D. All of above
    E. None of these


Answer: Option D

6. Which of the following is a new instruments permitted by RBI to bank under Tier II for Capital adequacy purposes and what is its minimum maturity period ?


    A. Innovative perpetual debt instrument, 10 years
    B. Non-redeemable Cumulative Capital Instrument, 10 years
    C. Perpetual preference shares, 15 years
    D. Redeemable preference shares, 15 years.
    E. None of these


Answer: Option D

7. Which of the following interest rates are not fixed by RBI and left to the discretion of the Bank concerned ?

(A) Saving Bank deposits
(B) DRI Advances
(C) Ceilling rates on FCNR/NRE deposit accounts
(D) Ceiling rates on export credit facilities


    A. A and D
    B. A and C
    C. Only A
    D. Only D
    E. None of these


Answer: Option D

8. Which of the following liabilities is not taken as part of Time and demand liabilities for the purpose of CRR ?


    A. Fixed deposits
    B. Saving bank account
    C. Recurring deposits
    D. Paid-up capital
    E. None of these


Answer: Option D

9. Credit creation capacity of commercial banks is determined by :

(A) Cash withdrawls from the banking system by the public
(B) Cash reserve ratio to be maintained by Commercial banks
(C) Supply of currency notes by the central bank
(D) Willingness of the borrowers to take loans from commercial banks.


    A. A, C and D
    B. B, C and D
    C. A, B and D
    D. A, B and C
    E. None of these


Answer: Option C

9. Money supply in India can be increased if_____


    A. RBI puts more paper money for circulation
    B. The commercial banks expand their credit operations
    C. The Central Government gives more grants to the states
    D. The Government of India borrows from the RBI


      A. A, B and C
      B. B, C and D
      C. A, C and D
      D. A, B and D
      E. None of these


    Answer: Option D

1. What is meant by a Scheduled Bank ?


    A. A Bank functioning under provisions of Banking Regulation Act. 1949
    B. A Bank included in 2nd schedule of RBI Act 1934
    C. A Bank incorporated under Banking Companies Act. 1956
    D. A Bank authorized to do Banking functions
    E. None of these


Answer: Option B

2. Which one of the following is not a Quantitative credit control measure of the Reserve Bank of India ?


    A. Bank rate
    B. Statutory cash reserve requirement
    C. Statutory liquidity ratio
    D. Moral Suasion
    E. None of these


Answer: Option D

3. Fiscal Deficit concept was introduced in Indian economy by


    A. Amartya sen
    B. V. K. R. V. Rao
    C. S. Chakravarty
    D. Madhu Dandavate
    E. None of these


Answer: Option C

4. Consider the following statements regarding Special Drawing Rights (SDR)

(A) SDR is known as the paper gold
(B) It is an international unit of account
(C) The IMF pays no interest on all holdings of SDRs, kept in the special drawing account
(D) The Quotas of all currencies in the IMF General account are also valued in terms of the SDR


    A. (1) A, B and C
    B. B, C and D
    C. A, B and D
    D. A, C and D
    E. None of these


Answer: Option C

5. Consider the following statement and state which among those is/are correct ?
Regional rural banks in India___

(A) Are required to assist the weaker sections
(B) Are to help small and marginal farmers only
(C) Have free access to liberal financial assistance from NABARD
(D) Have a limited area of operation


    A. A, C and D
    B. Only B
    C. B and C
    D. A and D
    E. None of these


Answer: Option A

6. In deficit financing, the government borrows money from _____.


    A. RBI
    B. Public
    C. IMF
    D. Capitalists
    E. None of these


Answer: Option A

7. CSO was established in the year ______.


    A. 1952
    B. 1957
    C. 1954
    D. 1951
    E. None of these


Answer: Option D

8. On the recommendation of which committee Rail Budget was separated from General Budget in 1924 ?


    A. Acworth Committee
    B. Hilton Young Committee
    C. Patnayak Economy Committee
    D. Brettenwood Committee
    E. None of these


Answer: Option A

9. Treasury bills also called as T- bills are the part of ____.


    A. Unorganized Market
    B. Capital Market
    C. Money Market
    D. Commodities Market
    E. None of these


Answer: Option C

10. Planned expenditure in India is made from _______.


    A. Internal debt and other resources
    B. Assistance from IMF
    C. Assistance from ADB
    D. 1, 2 and 3
    E. None of these


Answer: Option A

1. Primary Deficit is obtained by subtracting ____ from fiscal deficit.


    A. Revenue Deficit
    B. Depreciation
    C. Borrowings
    D. Interest Payment
    E. None of these


Answer: Option D

2. In India nationalization of banks took place in how many phases ?


    A. 3
    B. 2
    C. 4
    D. 1
    E. None of these


Answer: Option B

3. Fixed deposits are for the bank______


    A. Fixed Assets
    B. Time liability
    C. Demand liability
    D. Current Assets
    E. None of these


Answer: Option B

4. Which of the following come under non-plan expenditure ?

(A) Subsidies.
(B) Interests payments
(C) Defence Expenditure.
(D) Maintenance expenditure for the infrastructure created in previous plans.


    A. A and B
    B. A and C
    C. B and D
    D. A B and D
    E. None of these


Answer: Option D

5. Which of the following does not come under tertiary sector of the economy ?

A) Trade
(B) Industrial Manufacturing
(C) Industrial Construction


    A. Only B
    B. Only C
    C. B and C
    D. Only A
    E. None of these


Answer: Option C

6. Which of the following is not a direct tax ?


    A. Estate duty
    B. Sales Tax
    C. Wealth Tax
    D. Corporation Tax
    E. None of these


Answer: Option B

7. Which of the following schedules of Indian constitution includes Banking ?


    A. 8
    B. 7
    C. 5
    D. 6
    E. None of these


Answer: Option B

8.’Open Market operation’ is a part of ______


    A. Labor Policy
    B. Fiscal Policy
    C. Monetary and Credit Policy
    D. Income Policy
    E. None of these


Answer: Option C

9. What is a soft currency ?


    A. A currency whose exchange rate has a tendency to fluctuate
    B. A currency which can be easily used for settling any International transactions.
    C. A currency which can not be used for settling international transactions because it does not command a value in the international market
    D. A currency which is available by way of soft loans from international agencies
    E. None of these


Answer: Option C

10. Which of the following is not a Banking/ Economy Term ?


    A. Factoring
    B. Blue Chip
    C. Insider Trading
    D. Capital gain
    E. Digital Signature


Answer: Option E

1 .Which one of the following sources is not considered as a source of Government revenue ?


    A. Taxes
    B. Surplus of Public Enterprises
    C. Mobilization of internal loan and deposits
    D. Transfer Payments
    E. None of these


Answer: Option D

2. As we know that Reserve Bank of India changes the CRR. Which of the following statement is correct in this regard ?

(A) Reduction in CRR increases the liquidity position within Indian banks.
(B) Decrease in CRR decreases lending capacity of banks.
(C) Increase in CRR does not affect the liquidity position.


    A. Only A
    B. A and C
    C. Only C
    D. Only B
    E. None of these


Answer: Option A

3. Discount and Finance House of India Limited was set up by RBI in_______


    A. 1988
    B. 1989
    C. 1987
    D. 1990
    E. None of these


Answer: Option A

4. The relationship between a banker and a customer is _______


    A. That of a debtor and a creditor
    B. Primarily that of a debtor and a creditor
    C. That of a creditor and a debtor
    D. Both 1 and 2
    E. None of these


Answer: Option B

5. FCNR accounts can be opened and maintained as _________


    A. Savings Bank Account
    B. Term Deposit Accounts
    C. Recurring Deposits
    D. Current Accounts
    E. None of these


Answer: Option C

6. Current Account Deficit on the Balance of payment reflects_________


    A. Deficit on Trade Account .
    B. Deficit on Invisible Account.
    C. Deficit on Trade and Invisible Account.
    D. Deficit on Trade Invisible and Capital Account.
    E. None of these


Answer: Option C

7. Which one of the following is an example of joint supply ?


    A. Sugar and Tea
    B. Diesel and Bus
    C. Ink and Fountain Pen
    D. Wool and Mutton
    E. None of these


Answer: Option D

8. Consider the following statements regarding loan syndication and state which among those are true?

(A) More than one debtors applying for a loan to one creditor.
(B) More than one creditors coming together to provide single loan.
(C) More than one creditors coming together to provide multiple loans.


    A. A and B
    B. only C
    C. only B
    D. A and C
    E. None of these


Answer: Option C

9. A ‘closed economy is an economy in which ……………


    A. The deficit financing takes place
    B. Only exports takes place
    C. Neither exports nor imports takes place
    D. The money supply is full
    E. None of these


Answer: Option C

10. If RBI adopts an expansionist open market operations policy, this means that it will………….


    A. offer commercial banks more credit in open market
    B. sell securities in the open market
    C. openly announce to the market that it intends to expand credit.
    D. buy securities from non- government holders
    E. None of these


Answer: Option A

1. Moral Suasion is the instrument of ……………


    A. Trade Policy
    B. Fiscal Policy
    C. Budget
    D. Monetary Policy
    E. None of these


Answer: Option D

2. If an Indian Citizen renting a flat in London it is to be included in ……….


    A. GDP of India
    B. GNP of London
    C. GNP of India
    D. GDP of London
    E. None of these


Answer: Option D

3. Parallel economy emerges due to …………..


    A. Tax Avoidance
    B. Tax Evasion
    C. Tax Compliance
    D. Tax Estimation
    E. None of these


Answer: Option A

4. The type of note issue system followed in India is ………


    A. Proportional Fiduciary System
    B. Fixed Fiduciary System
    C. Minimum Reserve System
    D. Minimum Fiduciary System
    E. None of these


Answer: Option B

5. Government securities are considered liquid because they are ……….


    A. Backed by the government treasury .
    B. Convertible into the other types of saving deposits
    C. Stable in value
    D. Quickly & easily Marketable
    E. None of these


Answer: Option C

6. Who formulates the Monetary policy in India ?


    A. Planning commission
    B. Finance ministry
    C. RBI
    D. SEBI
    E. None of these


Answer: Option C

7. The Tax on import and export is known as____.


    A. Income Tax
    B. Trade Tax
    C. Custom Duty
    D. Excise Duty
    E. None of these


Answer: Option C

8. The Integrated Action plan recently approved by the Government of India is related with ____.


    A. Natural disaster
    B. Inflation
    C. Terrorism
    D. Naxalism
    E. None of these


Answer: Option D

9. Which of the following sets of sources of revenue belongs to the Union Government alone ?


    A. Gift Tax, Holding Tax
    B. Sales Tax, Income Tax
    C. Customs Duties, Corporation Tax
    D. Wealth Tax, Land Revenue
    E. None of these


Answer: Option C

10. The Government of India passed the “Recovery of Debts Due to Banks and Financial Institutions Act” in ______.


    A. 1993
    B. 1992
    C. 1994
    D. 1990
    E. None of these


Answer: Option A

1. Who among the following acts as agent of Government of India in respect of her membership of IMF?


    A. Ministry of Finance
    B. Reserve Bank of India
    C. SEBI
    D. NABARD
    E. None of these


Answer: Option B

2. Index “Residex” is associated with______.


    A. Share Prices
    B. Mutual Fund Prices
    C. Prices Inflation Index
    D. Land Prices
    E. None of these


Answer: Option D

3. The ‘Dolex’ Indicator is related to which of the following Financial Markets ?


    A. New York
    B. Mumbai
    C. Tokyo
    D. Hong Kong
    E. None of these


Answer: Option B

4. Industrial exit policy means _____.


    A. Forcing foreign companies to leave India.
    B. Forcing business units to move out of congested localities.
    C. Allowing manufactures to shift their line products.
    D. Allowing business units to close down.
    E. None of these


Answer: Option D

5. All commercial banks demand deposit liabilities may decrease as a result of _____.


    A. An inflow of cash
    B. A decrease in loans
    C. An increase in security holdings
    D. The chasing of a cheque by an individual or a firm.
    E. None of these


Answer: Option B

6. Which of the following is not a component of foreign aid of a country ?


    A. Bilateral grant
    B. Multilateral grant
    C. Loans from international financial institutions
    D. Commercial borrowing
    E. None of these


Answer: Option D

7. Which of the following represents priority sector lending by commercial banks in India ?

(A) Lending to heavy industries.
(B) Lending to foreign companies.
(C) Lending to agriculture, small scale industries and the weaker sections of the society.


    A. A and B
    B. Only C
    C. A, B and C
    D. A and C
    E. None of these


Answer: Option B

8. In the post-liberalization period, the share of direct taxes in gross tax revenue in India has ________.


    A. Increased
    B. Decreased
    C. First increased and then decreased
    D. Remained the same
    E. None of these


Answer: Option A

9. If the government chooses to spend money freshly printed by the RBI against government securities,it should be kept in which among the following ?


    A. Fiscal adjustment
    B. Retrenchment
    C. Mandatory Spending
    D. Deficit Financing
    E. None of these


Answer: Option D

10. Which of the following defines letter of credit ?


    A. A contractual agreement made between different parties to compensate for any damages or losses.
    B. It is a letter from a bank, guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.
    C. A solemn promise or agreement to do or refrain from doing something.
    D. A security interest on real property grant to a lender.
    E. None of these


Answer: Option B

1. Which of the following term is related to Banking/ Finance ?


    A. Acne
    B. Ativan
    C. Empire
    D. Paradox
    E. Encryption


Answer: Option E

2. The Global Hunger Index is compiled by the …………….


    A. Food and Agricultural Organisation
    B. United Nations Development Programme
    C. International Food Policy Research Institute
    D. United Nations World Food Programme
    E. None of these


Answer: Option C

3. Which of the following is shown on Liabilities side of a bank’s balance sheet ?


    A. Reserve fund
    B. Loans & advances
    C. Bills discounted
    D. Bills for collection
    E. None of these


Answer: Option A

4. The commercial bank do not have unlimited power of credit creation. Their power to create credit is limited due to


    A. Amount of cash received by the bank
    B. Banking habits of the people
    C. Leakages in credit creation
    D. 1 and 3
    E. None of these


Answer: Option E

5. A type of cheque which is more than six months old is a


    A. Mutilated cheque
    B. Crossed cheque
    C. Stale cheque
    D. Post-dated cheque
    E. None of these


Answer: Option C

6. Cash Deposit Ratio means ____


    A. The percentage of total cash money received as deposits by banks
    B. The percentage of cash in hand balance with central bank to the aggregate deposits
    C. The percentage of cash in hand with amount of loan given to customer
    D. The percentage of assets to liabilities of bank
    E. None of these


Answer: Option B

7. How many food parks do the government aims to set up across the country in 12th plan ?


    A. 50
    B. 30
    C. 20
    D. 40
    E. None of these


Answer: Option A

8. The main function of Central Statistical Organisation is ____


    A. To determine the money supply
    B. To determine prices
    C. To publish national income estimates
    D. To collect employment details
    E. None of these


Answer: Option C

9. Which amongst the following promoted the concept of self help groups (SHGs) for financing the poor ?


    A. RBI
    B. Union Ministry of labor
    C. NABARD
    D. Union Ministry of Rural development
    E. None of these


Answer: Option C

10. Human Capital refers to _____

(A)The attributes gained by worker through education and experience
(B) Skill, capacity and ability possessed by the population
(C) Material capital possessed by the human beings
(D) Population of the country


    A. A and B
    B. B and C
    C. A and C
    D. B and D
    E. All are true


Answer: Option A