Banking & General Financial Awareness Multiple Choice Questions (MCQs) and Answers with explanation for All Banking Exams of 2020-2021 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. A mutual fund that invests in other mutual funds belonging to the same fund house or belonging to other fund houses is called ?
[A] FOF Fund of Funds
[B] Pool
[C] Portfolio
[D] None of the above
Show Answer
Correct Answer: A [FOF Fund of Funds]
Notes:
A fund of funds (FOF) is a f mutual fund that invests in other types of funds or hedge funds. It is also called as a multi-manager investment. Their advantages are broad diversification and appropriate asset allocation.
2. Which was the first bank to be wholly owned and run by Indians?
[A] Allahabad Bank
[B] Bank of Baroda
[C] Bank of India
[D] Central Bank of India
Show Answer
Correct Answer: D [ Central Bank of India ]
Notes:
First Indian commercial bank which was wholly owned and managed by Indians was Central Bank of India which was established in 1911.
3. KYC guidelines have been issued under which section of Banking Regulation ACT 1949?
[A] Section 35 A
[B] Section 45
[C] SECTION 36 A
[D] Section 123 B
Show Answer
Correct Answer: A [Section 35 A]
Notes:
KYC guidelines were issued under Section 35 A of the Banking Regulation Act, 1949.These were introduced in year 2002 by RBI and all banks were asked to make all accounts KYC compliant by 31 December 2005.Banks are also required to periodically update their customers’ KYC details.
4. What is the full form of FEMA?
[A] Foreign Exchange Management Act
[B] Foreign Exchange Management Agency
[C] Foreign Emergency Managing agent
[D] Foreign Exchange Management Agency
Show Answer
Correct Answer: A [Foreign Exchange Management Act]
Notes:
FEMA stands for The Foreign Exchange Management Act, 1999. It is an Act of the Parliament of India to consolidate and change the law relating to foreign exchange. Its objective is to facilitate external trade and payments.
5. SMERA has been registered under which of the following Acts?
[A] Securities and Exchange Board of India Act, 1992
[B] Reserve Bank of India Act, 1934
[C] Banking Regulation Act, 1949
[D] Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999
Show Answer
Correct Answer: D [Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999]
Notes:
SMERA has been registered under Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999.SMERA is registered with the Securities and Exchange Board of India (SEBI) as 6th Credit Rating Agency in India.
6. What do we call the banks that undertakes commercial banking, investment banking, mutual funds and merchant banking?
[A] Mixed Banking
[B] Retail Banking
[C] Universal Banking
[D] Narrow Banking
Show Answer
Correct Answer: C [Universal Banking]
Notes:
Universal banking is a system of banking under which big banks undertake a variety of banking services like commercial banking, investment banking, mutual funds, merchant banking, insurance etc.
7. Where is the headquarters of Bank of Maharashtra located in India?
[A] Mumbai
[B] Pune
[C] Aurangabad
[D] Thane
Show Answer
Correct Answer: B [Pune]
Notes:
The Bank of Maharashtra was founded by V. G. Kale and D. K. Sathe and registered as a banking company on 16 September 1935 at Pune.
8. What was the paidup capital of RBI when it commenced operations as India’s central bank on April 1 1935?
[A] Rs 1 crore
[B] Rs 5 crore
[C] Rs 10 crore
[D] Rs 100 crore
Show Answer
Correct Answer: B [Rs 5 crore]
Notes:
The Reserve Bank commenced operations as India’s central bank on April 1 1935 as a private shareholders’ bank with a paid up capital of rupees five crores.
9. What is the function of Board for Financial Supervision (BFS)?
[A] supervision of the financial sector
[B] supervision of all types of payment and settlement systems
[C] appointing the directors of scheduled banks
[D] All of the above
Show Answer
Correct Answer: A [supervision of the financial sector]
Notes:
The main function of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, Non-Banking Finance Companies (NBFCs), development finance institutions, urban co-operative banks and primary dealers.
10. What are the advantages of BBPS?
[A] Multiple Payment Modes
[B] Payment of bill anywhere and anytime
[C] Timely & guaranteed settlements between parties
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Some of the advantages of BBPS are: 1. Multiple Payment Modes 2. Payment of bill anywhere and anytime 3. Timely & guaranteed settlements between parties
