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Banking Awareness/General Awareness for Syndicate/Canara & Other Mains Exams

1. With reference to the National Investment Fund to which the disinvestment proceeds are routed, consider the following statements:

(A) The assets in the National Investment Fund are managed by the Union Ministry of Finance.

(B) The National Investment Fund is to be maintained within the Consolidated Fund of India.

(C) Certain Asset Management Companies are appointed as the fund manager.

(D) A certain proportion of annual income is used for financing select social sectors.

Which of the statement(s) given above is/are correct?

1) Only A and B

2) Only B

3) Only C and D

4) Only C

5) All A, B, C and D

2. With reference to the institution of Banking Ombudsman in India, which of the following statements is not correct?

1)  The Banking Ombudsman is appointed by the Reserve Bank of India.

2)  The Banking Ombudsman can consider complaints from non-resident Indians having accounts in India.

3)  The orders passed by the Banking Ombudsman are final and binding on the parties concerned.

4)  The service provided by the Banking Ombudsman is free of any fee.

5)  All are correct.

3. The International Development Association (IDA), a lending agency, is administered by which of the following?

1)  International Bank for Reconstruction and Development

2)  International Fund for Agricultural Development

3)  United Nations Development Programme

4)  United Nations Industrial Development Organisation

5)  International Monetary Fund

4. In which country are foreign currency denominated bonds, “Bulldog Bonds”, issued?

1) US

2) UK

3) Japan

4) India

5) France

5. Which of the following instruments of credit control adopted by the Reserve Bank of India (RBI) does not fall within ‘general’ or ‘quantitative’ methods of credit control?

1)  Stipulation of certain minimum margin in respect of advance against specified commodities

2)  Open market operations

3)  Bank rate

4)  Variable reserve requirements

5)  None of the above

6. In the context of Indian economy, consider the following:

(A) Encouraging Foreign Direct Investment inflows

(B) Privatisation of higher educational institutions

(C) Downsizing bureaucracy

(D) Selling/offloading the shares of public sector undertakings

  Which of the above can be used as measures to control fiscal deficit in India?

1) Only A, B and C              2) Only B, C and D

3) Only A, B and D              4) Only C and D

5) All the above

7. Which of the following is the reason for the success of mutual fund?

1)  Mutual fund schemes offer, to every investor, security, steady growth, regular income and easy liquidity.

2)  A small investor gets professional expertise of the fund managers of the mutual fund.

3)  It carries tax breaks and this benefit is passed on to the investors.

4)  All the above

5)  None of these

8. The term ‘moral suasion’ refers to

1)  The moral duty of a borrower to deal with only one bank

2)  The banker’s duty of secrecy as regards the affairs and accounts of his customers

3)  The advice given by the Reserve Bank of India to banks/financial institutions in the matter of their lending and other operations with the objective that they might implement or follow it

4)  All the above

5)  None of these

9. Which of the following was the first public sector commercial bank to have launched a mutual fund?

1) State Bank of India

2) Canara Bank

3) Indian Bank

4) Bank of India

5) Indian Overseas Bank

10. Bank rate means

1)  the rate of interest charged by commercial banks on advances.

2)  the rate at which commercial banks discount bills of exchange for their clients.

3)  the rate of interest allowed by banks on the deposits.

4)  the standard rate at which the Reserve Bank of India is prepared to buy or rediscount bill of exchange, or other commercial papers eligible for purchase under the Reserve Bank of India Act, 1934

5)  None of the above

11. Which of the following is not an activity of merchant banking in India?

1)  The management of customers’ securities

2)  The management of portfolio

3)  The management of projects and counselling as well as appraisal

4)  The management of underwriting of shares and debentures

5)    None of these

12. Most of the time you read in a newspaper about a term ‘disinvestment’. What does the term mean?

1)  The selling of government stake and buying them back

2)  The selling of public sector stake

3)  The selling of government stake in public sector undertakings

4)  The process of buying an asset to meet financial goals

5) None of these

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