Some financial awareness Question with answer for banking exam

Quiz (General Awareness)

1. The Cash Reserve Ratio (CRR) has been kept at 4 per cent of NDTL at present. Here, what does the term NDTL stands for?

A)   New Demand and Time Liabilities
B)   Net Demand and Time Liabilities
C)   Net Differed and Time Liabilities
D)   New Demand and Transaction Liabilities
E)   None of these
Correct answer: B
.

Solution :

Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank. CRR is set according to the guidelines of the central bank of a country. Net Demand and Time Liabilities (NDTL): Bank accounts from which you can withdraw your money at any time are called “Demand Liabilities” for exemplification, Savings accounts, Current Deposits etc.

2.2 What is the currency of Switzerland?

3. What is full form of ASBA, a term used in connection of stock market?

A)   Application Supported By Base Amount
B)   Application Supported By Basket Amount
C)   Application Supported By Blocked Amount
D)   Application Supported By Borrowed Amount
E)   None of these
Correct answer: C
.

Solution :

It is a facility provided by banks to investors in initial public offerings (IPOs), follow-on public offers (FPOs) and new fund offers (NFOs) of mutual funds. If you apply for an IPO/NFO via Asba, your application amount gets blocked in your bank account. While the amount stays in your account, it cannot be used until the share/MF unit allotment is done. The money is debited from the bank account only if your application is selected for allotment after the basis of allotment is finalised, or the issue is withdrawn or fails. The amount debited depends on the shares/MF units allotted to you. And, the remaining amount, if any, is freed for use. The option, though available, is not mandatory for retail investors. They can continue to make applications through the existing facility of applying with cheque.

4.4 A homeowner above what age is eligible for a reverse mortgage loan?

Solution :
A reverse mortgage or home equity conversion mortgage (HECM) is a type of home loan for older homeowners (62 years or older) that requires no monthly mortgage payments. Borrowers are still responsible for property taxes and homeowner's insurance. 5. An individual having a 'Basic Savings Bank Deposit Account' with a bank cannot have which of the following accounts in that bank?

Solution :
The 'Basic Savings Bank Deposit Account' would be subject to provisions of PML Act and Rules and RBI instructions on Know Your Customer (KYC) / Anti-Money Laundering (AML) for opening of bank accounts issued from time to time. BSBDA can also be opened with simplified KYC norms.

66. What is the term used for a banking system under which the banks are to raise low cost funds and invest such funds in low risk assets such as govt securities? 1) 2) 3) 4) 5)

7. The Banking Ombudsman is a senior official tasked with redressing customer complaints against deficiency in certain banking services and is appointed by the

A)   Reserve Bank of India
B)   Ministry of Finance
C)   Indian Banks' Association
D)   High Court of each state
E)   None of these
Correct answer: A
.

8. What is the expanded form of the term BTM?

A)   Business Transaction Management
B)   Business Technology Management
C)   Business and Trade Management
D)   Business and Trade Management
E)   Business Tourism Management
Correct answer: A
.

Solution :

Business transaction management (BTM), also known as business transaction monitoring, application transaction profiling or user defined transaction profiling, is the practice of managing information technology (IT) from a business transaction perspective. It provides a tool for tracking the flow of transactions across IT infrastructure, in addition to detection, alerting, and correction of unexpected changes in business or technical conditions. BTM provides visibility into the flow of transactions across infrastructure tiers, including a dynamic mapping of the application topology.

99. Which of the following is a programme launched by the government to develop rural infrastructure in India?

Solution :

Bharat Nirman is a time-bound plan for rural infrastructure by the Government of India in partnership with State Governments and Panchayat Raj Institutions. It was launched in 2005. It has 6 components: 1. Water: Every habitation to have a safe source of drinking water: 55,067 uncovered habitations to be covered by 2009. In addition all habitations which have slipped back from full coverage to partial coverage due to failure of source and habitations which have water quality problems to be addressed 2. Roads: Every habitation over 1000 population and above (500 in hilly and tribal areas) to be provided an all-weather road: remaining 66,802 habitations to be covered by 2009 3. Irrigation: 10 million hectares (100 lakhs) of additional irrigation capacity to be created by 2009 60 lakh houses to be constructed for the rural poor by 2009 4. Telephone Connectivity: Every village to be connected by telephone: remaining 66,822 villages to be covered by November 2007 5. Electricity: Every village to be provided electricity: remaining 1,25,000 villages to be covered by 2009 as well as connect 2.3 crore households 6. Housing : To construct 60 lakh additional houses for poor under Indira Awas Yojna

. Consider the following banks operating in India: (A) BNP Paribas (B) Deutsche Bank (C) Barclays (D) RBS

11. Which of the following is not a term used in banking?

12. In Banking services, market can be segmented on the basis of:

13. Many a time we see a term in newspapers ‘IPO’. What is the full form of the same?

A)   Indian Public Offer
B)   Institutional Purchase Offer
C)   Industrial Purchase Order
D)   Indian Purchase Offer
E)   Initial Public Offer
Correct answer: E
.

14. Many a time we read in newspapers about ‘Financial Inclusion’. What does it really mean ? [(Pick up the correctstatement(s)] (A) Allow the merger and acquisition of banks so that only few big banks exist and continue to cater to the need ofcorporate sector. (B) Expanding the network of banks in such a way that people from lower strata of society also get the benefit ofservices provided by banks. (C) Providing insurance cover to each and every citizen so that he/she can live a healthy and long life.

15. India and which of the following countries entered into a double taxation avoidance agreement (DTAA) for the first timerecently? The DTAA has provisions for exchange of banking information for tax administration purpose among other things.

16. Which of the following will be termed as cross-selling?

A)   Selling a housing loan to a deposit customer
B)   Selling a deposit product to a savings account holder
C)   Selling a credit card to a debit card holder
D)   All the above
E)   Only 1) and 3)
Correct answer: D
.

17. Which of the following may be the best alternative banking service to achieve the target of financial inclusion in the country?

A)   Agricultural loans
B)   Kisan Credit Cards
C)   Personal Banking Branches
D)   Mobile Banking Facility
E)   None of the above
Correct answer: D
.

18. State Bank of India (SBI) has raised Rs 8,032 Cr by selling shares through QIP, making it the biggest ever equity sale via this route recently. What does QIP stands for?

A)   Qualified Initial Placement
B)   Qualified Institutional Proposal
C)   Qualified International Placement
D)   Qualified Initial Proposal
E)   Qualified Institutional Placement
Correct answer: E
.

19. Which of the following states has become the first state in the country to achieve 100 per cent sanitation in rural and urban households, schools, sanitary complexes and Aanganwadi centers?

20. The RBI has suggested use of PKI in payment system applications. PKI, which is a set of hardware, and software that enables users of internet to securely and privately exchange data and money by using a pair of public and private cryptographic passwords, stands for:

A)   Public Key Initiative
B)   Public Key Information
C)   Public Key Interference
D)   Public Key Introduction
E)   Public Key Infrastructure
Correct answer: E
.

Solution :

A public key infrastructure (PKI) is a set of roles, policies, and procedures needed to create, manage, distribute, use, store, and revoke digital certificates and manage public-key encryption. The purpose of a PKI is to facilitate the secure electronic transfer of information for a range of network activities such as e-commerce, internet banking and confidential email. It is required for activities where simple passwords are an inadequate authentication method and more rigorous proof is required to confirm the identity of the parties involved in the communication and to validate the information being transferred.

. Rural Infrastructure Development Fund (RIDF), with the sole objective of giving low cost fund support to state govts and State Owned Corporations, was instituted in:

22. As per currently prevailing norms, 49 per cent FDI is allowed under automatic route in private sector banks in India. However, under the govt route FDI limit is up to:

23. The RBI's working group on boosting Export Finances is headed by who amongst the following?

24. The tax levied on manufacture or production of goods is called:

25. The sources of revenue of the state governments are:

A)   Entertainment tax
B)   Land revenue
C)   Excise duty on intoxicants
D)   Only 1 and 2
E)   All 1, 2 and 3
Correct answer: E
.

26. Which of the following constitute the world bank? A. International Bank for Reconstruction and Development B. International Finance Corporation C. International Development Association D. International Monetary Fund

27. The most appropriate measure of a country’s economic growth is its:

A)   Gross Domestic Product
B)   Net Domestic Product
C)   Net National Product
D)   Per Capita Real Income
E)   High Industrial Growth
Correct answer: B
.

Solution :
The net domestic product (NDP) is an annual measure of the economic output of a nation that is adjusted to account for depreciation, calculated by subtracting depreciation from the gross domestic product (GDP).

28. Consider the following: (A) Market borrowing (B) Treasury bills (C) Special securities issued by RBI Which of these is/are component(s) of internal debt?

29. Many a times we read in financial newspapers about a term “loan syndication”. What exactly is loan syndication?

A)   In loan syndication, more than one debtors apply for a loan to one creditor
B)   In loan syndication, more than one creditors come together to provide single loan
C)   In loan syndication, more than one creditors come together to provide multiple loans
D)   Both 2) & 3)
E)   All of the above
Correct answer: B
.

30. Which one of the following methods is currently used in India to issue note?

A)   Fixed Fiduciary System
B)   Maximum Fiduciary System
C)   Proportional Reserve System
D)   Percentage Reserve System
E)   Minimum Reserve System
Correct answer: E
.

31. Marketing in banks is a necessity today, due to________.

A)   Liberalisation
B)   Nationalisation
C)   Fashion
D)   Urbanisation
E)   Marketing in banks is not necessary, as banking in India is more than 200 years old
Correct answer: A
.

32. Marketing helps in…..

A)   Boosting production
B)   Getting new clients
C)   Interacting with strangers
D)   All of these
E)   None of these
Correct answer: D
.

33. Marketing of services resorted in….

34. Marketing is the art of…

35. Market share means…

36. A DSA (Direct Selling Agent) is one…..

A)   Who sells through the internet
B)   Who sells direct to the client
C)   Who works on the bank counter
D)   Who works in back office set up
E)   None of these
Correct answer: D
.

37. Internet marketing means…

A)   Marketing to self
B)   Marketing to family members
C)   Marketing to the staff members
D)   Marketing inside India
E)   Marketing outside India
Correct answer: C
.

38. A true marketing mindset requires________

39. Modern styles of marketing are_________

40. A committee formed to look into the possibilities of bringing changes in pattern of civil services examination among others submitted its report to the govt recently. Who among the following headed the Committee?

41. The govt has appointed who among the following as a deputy governor of the Reserve Bank of India (RBI) recently?

42. The World Trade Organization (WTO) failed to reach a consensus on the Trade Facilitation Agreement (TFA) recently.Who among the following is the current President of the WTO?

Solution :

Trade facilitation looks at how procedures and controls governing the movement of goods across national borders can be improved to reduce associated cost burdens and maximize efficiency while safeguarding legitimate regulatory objectives. Business costs may be a direct function of collecting information and submitting declarations or an indirect consequence of border checks in the form of delays and associated time penalties, forgone business opportunities and reduced competitiveness. Understanding and use of the term “trade facilitation” varies in the literature and amongst practitioners. "Trade facilitation" is largely used by institutions which seek to improve the regulatory interface between government bodies and traders at national borders. The WTO, in an online training package, once defined trade facilitation as: “The simplification and harmonization of international trade procedures” where trade procedures are the “activities, practices and formalities involved in collecting, presenting, communicating and processing data required for the movement of goods in international trade”

. The Transatlantic Trade and Investment Partnership (TTIP) is a trade agreement being negotiated between the European Union and which of the following countries?

44. Who among the following has been appointed the Chairman of the Central Board of Direct Taxes (CBDT) recently?

45. Which of the following offices looks after the indirect taxes in India?

Solution :

The Central Board of Excise and Custom is the nodal national agency responsible for administering Customs, Central Excise, Service Tax & Narcotics in India. The Customs & Central Excise department was established in the year 1855 by the then British Governor General of India, to administer customs laws in India and collection of import duties / land revenue. It is one of the oldest government departments of India. Currently the Customs and Excise department comes under the Department of Revenue, Ministry of Finance. The agency is staffed by IRS officers who start their careers as Assistant Commissioners in the field and within 20–25 years rise to the post of Chief Commissioners, with a few senior most officers who become Members of CBEC / CESTAT / Settlement Commission. The Central Board of Excise & Customs (CBEC) is headed by Chairperson CBEC and consist of six Members of CBEC. CBEC Chairperson - Mr. Najib Shah, IRS

46. The provisional results of the Sixth Economic Survey of India were released recently. When was the first Economic Survey conducted?

47. Who among the following is current Revenue Secretary of India?

48. SK Jain, who arrested by the Central Bureau of Investigation (CBI) on the charges of bribery, recently, is the Chairman and Managing Director of which of the following Public Sector Banks (PSBs)?

49. Indian Banks Association (IBA) has a common networking system for sharing the ATM facilities located in Mumbai, which is known as

A)   Indian Clearing House
B)   Cash Network
C)   ATM network
D)   Shared Payment System Network
E)   None of these
Correct answer: D
.

50. Consortium Advances refer to

A)   Multiple advances
B)   Concurrent borrowing
C)   Financing of consignment business
D)   Joint financing by more than one bank
E)   None of these
Correct answer: D
.

51. We often read about NDTL of banks in the financial newspapers. What is the full form of NDTL?

A)   Net Dividend and Time Liabilities
B)   Net Demand and Transfer Liabilities
C)   Net Demand and Time Liabilities
D)   Net Discount and Time Liabilities
E)   None of these
Correct answer: C
.

52. A short term govt security paper is called

53. We often read that govt is concerned about the rising CAD. What does letter ‘A’ denotes in the term CAD?

Solution :

Current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the goods and services it exports. The current account also includes net income, such as interest and dividends, as well as transfers, such as foreign aid, though these components make up only a small percentage of the current account when compared to exports and imports. The current account is essentially a calculation of a country’s foreign transactions and, along with the capital account, is a component of a country’s balance of payment.

54. First Islamic bank in Euro zone recently came up in which country?

55. Which bank announced that it has got the RBI license to start operations in India?

56. Which committee is related to strengthen the regulatory framework to contain insider trading?

A)   N. K. Sodhi Committee
B)   A. P. Shah Committee
C)   Kelkar Committee
D)   Nachiket Mor Committee
E)   None of these
Correct answer: A
.

57. Which organizations/agencies works solely to monitor and arrange flow of agriculture credit in India?

58. Indian Commercial Banks are categorized into ____

A)   Public Sector Banks
B)   Private Sector Banks
C)   Foreign Banks
D)   All of the above
E)   None of these
Correct answer: D
.

59. Which of the following statements is true ____ I) All term deposits are interest bearing deposits. II) Term deposits are non-transaction deposits. III) Cheques can be issued on short-term deposits.

60. Which is the full form of the abbreviation IFRS as used in corporate/financial sector?

A)   International Financial Reporting Standards
B)   Indian Financial Reconciliation Standards
C)   International and Formal Reporting System
D)   Indian Formal Reporting System
E)   None of these
Correct answer: A
.

61. What is the maximum balance amount that is eligible for earning interest in a Normal savings bank account?

62. Which of the following is not a primary function of a bank?

A)   Facilitating import of goods
B)   Issuing Bank Drafts
C)   Granting Loans
D)   Selling Gold / Silver Coins
E)   None of these
Correct answer: A
.

63. The Income Tax Department gives a multi digit alpha code to all income tax assesses. This is called ______

64. Which one of the following is not a salient feature of Debit Card?

A)   No interest earning for banks
B)   Works like a normal withdrawal
C)   45 days credit is given to the card holder
D)   Can be used at ATM and POS
E)   None of these
Correct answer: C
.

65. Which bank has recently launched new insurance linked saving account scheme "AB Jeevan Abhaya Plus" that provides Group Life Insurance cover and accident death benefit?

66. Savings bank accounts are opened by ______

A)   Individuals for savings purposes
B)   Limited Companies and Partnerships for Savings purposes
C)   Traders and Manufactures for business purposes
D)   Co-operative banks for savings
E)   None of these
Correct answer: A
.

67. Which of the following is not a component of India's Securities Market?

A)   Corporate Equity
B)   Derivatives on Currency
C)   Government Bonds
D)   Commodity Futures
E)   None of these
Correct answer: B
.

68. Gilt - edged market means _____

A)   Market of govt. securities
B)   Bull market
C)   Market of guns
D)   Market of pure metals
E)   None of these
Correct answer: A
.

69. Who was appointed as the Chairman of National Bank for agriculture and Rural Development (NABARD)?

70. On which one of the following issues can SEBI penalize any company in India ____ I) Violation of Banking Regulation Act. II) Violation of Foreign Portfolio of Investment guidelines. III) For violation of Negotiable Instrument Act.

71. Resident foreign currency account can open only for-

A)   Public Sector Banks
B)   Scheduled Commercial Banks
C)   Private Sector Banks
D)   Regional Rural Banks
E)   None of these
Correct answer: B
.

72. The full form of SPNS is-

A)   Sharing process network system
B)   Shared payment network system
C)   Shared procedural network system
D)   Shortest possible networking system
E)   None of these
Correct answer: B

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Some financial awareness Question with answer for banking exam

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