Banking & General Financial Awareness
Banking & General Financial Awareness Multiple Choice Questions (MCQs) and Answers with explanation for All Banking Exams of 2024-25 such as IBPS Bank PO, IBPS Bank Clerical, RRB PO and Clerical, SBI PO and SBI Clerical, IBPS Recruitments, RBI Grade B and RBI Banking Examinations.
1. What is a mutual fund that invests in other mutual funds called?
[A] Pool
[B] ETF (Exchange-Traded Fund)
[C] FOF (Fund of Funds)
[D] Portfolio
Show Answer
Correct Answer: C [FOF (Fund of Funds)]
Notes:
Fund of Funds (FOF) is an investment vehicle that pools capital to invest in multiple mutual funds. FOFs do not invest in stocks or bonds directly. In India, FOFs are regulated by the Securities and Exchange Board of India (SEBI). They can invest in mutual funds within the same fund house (fettered) or across different fund houses (unfettered). FOFs offer diversification and professional fund management.
2. Which institution has the highest Priority Sector Lending norm in India as of 2026?
[A] Small Finance Banks
[B] Regional Rural Banks
[C] Domestic Scheduled Commercial Banks
[D] Urban Co-operative Banks
Show Answer
Correct Answer: B [Regional Rural Banks]
Notes:
Regional Rural Banks are mandated to allocate 75% of their Adjusted Net Bank Credit to priority sectors as per the latest guidelines for 2026. Small Finance Banks’ requirement was reduced to 60% in 2026. Domestic Scheduled Commercial Banks are set at 40%. Urban Co-operative Banks have a 60% requirement. These are specified under Reserve Bank of India regulations.
3. Which of the following is the first Aadhaar Gram in India?
[A] Bhagalpur
[B] Tembhli
[C] Buldana
[D] Akola
Show Answer
Correct Answer: B [Tembhli]
Notes:
Tembhli is the first village in India from where UIDAI started its ambitious Aadhaar Enrolment Project. It is a village in Nandurbar district of Maharashtra state. The Aadhar Scheme was launched on 29 September 2010 in this village.
4. Which of the following give finance to young, start-up companies?
[A] Venture capital firm
[B] Finance company
[C] Small-business finance company
[D] Capital-creation company
Show Answer
Correct Answer: A [Venture capital firm]
Notes:
Venture Capital Firm is a semi-government, or private firm that provides startup or growth equity capital and loan capital to promising ventures for returns that are higher than market interest rates.
5. What is the full form of ELSS?
[A] Equity Linked Saving Scheme
[B] Equity Linking Saving System
[C] Equitable Linked Saving System
[D] None of the above
Show Answer
Correct Answer: A [Equity Linked Saving Scheme]
Notes:
An Equity Linked Savings Scheme (ELSS) is an open-ended Equity Mutual Fund that help to save tax. It also gives an opportunity to grow money. It qualifies for tax exemptions under section 80C of the Indian Income Tax Act.
6. What is an amortization schedule?
[A] It is a table that gives details of the periodic principal and interest payments on a loan and the
[B] It is convenient for borrowers who are in the beginning of their careers.
[C] It is the schedule at which commercial banks charge their customers who are most creditworthy.
[D] All of the Above
Show Answer
Correct Answer: A [It is a table that gives details of the periodic principal and interest payments on a loan and the]
Notes:
Amortization schedule is a table that gives details of the periodic principal and interest payments on a loan and the amount outstanding at any point of time. It also shows the gradual decrease of the loan balance until it reaches zero.
7. The credit for availing the first Home Loan goes to which of the following persons in India?
[A] Nandan Nilekani
[B] Rustom Padri
[C] D B Remedios
[D] None of the Above
Show Answer
Correct Answer: C [D B Remedios]
Notes:
The credit for availing the first Home Loan goes to one D B Remedios took a Home Loan of 30,000 from HDFC in 1978 to construct his house in Malad, Mumbai. The total cost of the house was 70,000.
8. Factoring Business is also known as by which of the following names?
[A] Accounts Receivable Factoring
[B] Asset Based Lending
[C] Invoice Factoring
[D] All of the Above
Show Answer
Correct Answer: D [All of the Above]
Notes:
Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Accounts receivable financing is a term more accurately used to describe a form of asset based lending against accounts receivable.
9. What is the time period for a Short term corporate loan?
[A] 1 Year
[B] 18 Months
[C] Both a and b
[D] None of the above
Show Answer
Correct Answer: C [Both a and b]
Notes:
A short-term loan, usually offered to firms that don’t qualify for a line of credit. It generally runs less than a year, though it can also refer to a loan of up to 18 months or so.
10. How many banks were Nationalised in 1969 under the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969?
[A] 15
[B] 14
[C] 13
[D] 11
Show Answer
Correct Answer: B [14]
Notes:
The Government of India issued the Banking Companies (Acquisition and Transfer of Undertakings) Ordinance, 1969 and nationalised the 14 largest commercial banks namely Punjab National Bank, Allahabad Bank and others.
