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Banking Awareness MCQs, Banking Awareness

Banking/Financial Awareness for SBI PO/Clerk & Upcoming Bank Exams

1. When we opt for a loan, generally the bank offers to repay the amount in Equated Monthly Instalments (EMIs). EMIs comprise

1)  only the principal

2)  only the interest

3)  both principal and interest

4)  only interest for half the loan tenure and then both principal and interest

5)  None of these

2. Expand the term TARC.

1) Trade Administration Reform Commission

2) Territorial Administration Reform Commission

3) Tiered Administration Reform Commission

4) Tax Administration Reform Commission

5) None of these

3. Open Market Operations (OMOs) are among the measures taken by the RBI to control credit expansion in the economy. OMOs mean

1) Auction of precious metals

2) Sale or purchase of short-or long-term govt securities

3) Issuance of different types of bonds

4) Facilitating direct finance to borrowers

5) None of these

4. A Banking Ombudsman will not entertain a complaint if the compensation sought by the complainant is beyond

1) `2 lakh

2) `5 lakh

3) `10 lakh

4) `20 lakh

5) `50 lakh

5. What is the meaning of a scheduled bank?

1)  The bank incorporated under the Banking Companies Act 1956

2)  The bank authorised to do banking functions

3)  The bank included in the Second Schedule of the RBI Act 1934

4)  The bank functioning under the provisions of the Banking Regulation Act 1949

5)  None of these

6. Which of the following is NOT a negotiable instrument?

1) National Savings Certificate

2) Promissory note

3) Bill of exchange

4) Demand draft

5) Cheque

7. One of the primary functions of the RBI is to control the supply as well as the cost of credit in the country. One of the tools it uses for the purpose is Cash Reserve Ratio (CRR). Which of the following statements is/are NOT correct about CRR?

1)  Under CRR a certain percentage of the total bank deposits has to be kept in the current account with the RBI.

2)  Banks do not earn anything on the money parked under CRR.

3)  Banks are allowed to lend the money parked under CRR to individual borrowers but not to commercial borrowers.

4)  The current CRR is 4 per cent.

5)  None of these

8. Which of the following is NOT correct with respect to Statutory Liquidity Ratio (SLR), a tool used by the RBI?

1)  It is the amount a commercial bank needs to maintain in the form of cash or gold or govt approved securities (Bonds) before providing credit to its customers.

2)  It is determined and maintained by the RBI in order to control the expansion of bank credit.

3)  The RBI can ensure the solvency of a commercial bank with SLR.

4)  The RBI compels the commercial banks to lend to priority sector through SLR.

5)   None of these

9. The capital markets regulator SEBI cleared a slew of reforms recently. Which of the following is NOT among these reforms?

1)  It has made it mandatory for all listed PSUs to have at least 25 per cent public shareholding within three years.

2)  It proposed easing of the Offer For Sale (OFS) norms wherein retail investors would be provided with 10 per cent reservation.

3)  Non-promoters with more than 10 per cent stake in the company would be allowed to tap the OFS route.

4)  It has asked not to share KYC (Know Your Client) information with entities regulated by other financial-sector watchdogs.

5)  None of these

10. The Cheque Truncation  System (CTS) was introduced  for faster clearing of cheque, in which of the following years?

1) 2012

2) 2010

3) 2011

4) 2005

5) 2006

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