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Banking Industry Structure in India General Knowledge Questions

Banking Awareness for IBPS 2015, SBI PO Examination 2015-16 IBPS 2016 Recruitment for Probationary Officers with Multiple Choice Questions on Structure of Banking in India

1.

In which of the following types of banking, there is a direct execution of transactions between a bank and its consumers?
[A]Retail banking
[B]Universal Banking
[C]Virtual Banking
[D]Unit Banking

Retail banking
When there is a direct execution of transactions between a bank and its consumers, rather than with corporations or other banks, then this type of banking system is known as Retail banking.

2.

Which of the following is the first financial institution of India that adopted the Universal Banking System?
[A]ICICI
[B]SBI
[C]IDBI
[D]None of the above

ICICI
Universal banking is a one-stop shop of financial products and services. The Industrial Credit and Investment Corporation of India Limited (ICICI) is the first financial institution of India that adopted the Universal banking system. It was set up in January 1955 as a joint stock company with support from the Government of India, the World Bank, the Commonwealth Development Finance Corporation, and other foreign institutions.

3.

Which among the following types of Banking is most helpful in cross selling?
[A]Virtual Banking
[B]Relationship Banking
[C]Wholesale Banking
[D]Personal Banking

Relationship Banking
Relationship banking is a banking system in which banks make deliberate efforts to understand customer needs and offer him products accordingly.

4.

In terms with Banking Sector, Anywhere Banking refers to __:
[A]The customer can deposit/ withdraw cash at any branch other than the branch in which he holds the account
[B]The customer can deposit/ withdraw cash at any bank other than the bank in which he holds the account
[C]The customer can deposit/ withdraw cash in foreign countries
[D]The customer can deposit/ withdraw cash at all points of sale

The customer can deposit/ withdraw cash at any branch other than the branch in which he holds the account
Anywhere Banking means that the customer can deposit/ withdraw cash at any branch other than the branch in which he holds the account. Anywhere banking frees the customer from geographical boundaries and limitations and gives the flexibility to the customer to use his account across the board.

5.

Which country has largest shadow banking market in the world?
[A]China
[B]UK
[C]Netherland
[D]USA

USA
Shadow banking refers to the activities of financial institutions that operate outside government-regulated banking systems. United States has the largest shadow banking market followed UK and China.

6.

What is the current number of Local Area Banks in India?
[A]Three
[B]Four
[C]Six
[D]Eight

Four
As of May 2015, these four local area banks are: 1.Coastal Local Area Bank Ltd – Vijayawada (Andhra Pradesh) 2.Capital Local Area Bank Ltd – Phagwara (Punjab) 3.Krishna Bhima Samruddhi Local Area Bank Ltd, Mahbubnagar (Andhra Pradesh) 4.Subhadra Local Area Bank Ltd., Kolhapur (Maharashtra)

7.

With reference to various types of Banking, what is “Mixed Banking”?
[A]when banks undertake the activities of commercial and investment banking together
[B]when banks undertake the activities of wholesale and retail banking together
[C]when banks undertake the activities of offline and online banking together
[D]when banks undertake the activities of commercial and cooperative banking together

when banks undertake the activities of commercial and investment banking together

8.

Which of the following is NOT an advantage of Unit Banking?
[A]They have fast decision making
[B]The management enjoys more autonomy
[C]They have risk diversification
[D]All of above are advantages of Unit Banking

They have risk diversification
Due to small size and due to unit structure; the decision making in unit banks is very fast. The management in unit banks enjoy more autonomy and more discretionary powers. However, due to single units, the risk is not distributed or diversified.

9.

In which country, the Unit Banking System originated?
[A]United States
[B]United Kingdom
[C]France
[D]Spain

United States
Unit banking is a system of banking which originated in US. It is a limited way of banking where banks operate only from a single branch (or a few branches in the same area) taking care of local community.

10.

Bank branches are established under which section of Banking Regulations Act, 1949?
[A]Section 20
[B]Section 23
[C]Section 22
[D]Section 10

Section 23
Branch banking involves business of banking via branches. The branches are set up under Section 23 of Banking Regulations Act, 1949.

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