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. In investing its Foreign Assets ,RBI is guided by three principles .Which of the following are those principles?
[A] Safety
[B] Liquidity
[C] Return
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
The Department of External Investments and Operations (DEIO) invests the country’s foreign exchange reserves built up by purchase of foreign currency from the market. In investing its foreign assets, the Reserve Bank is guided by three principles: Safety, Liquidity, Return.
2. Which of the following clearly defines the Factoring business?
[A] It is a type of debtor finance in which a business sells its accounts receivable .
[B] The receivables are sold to the third party (called a factor) at a discount.
[C] It is commonly referred to as accounts receivable factoring, invoice factoring.
[D] All of the Above
Show Answer
Correct Answer: D [All of the Above]
Notes:
Factoring is a financial transaction and a type of debtor finance. An entrepreneur will factor its receivable assets to meet its present and immediate cash needs.
3. What are the benefits of leasing to other companies?
[A] Interest Revenue
[B] High Residual Values
[C] Tax Incentives
[D] All of the Above
Show Answer
Correct Answer: D [All of the Above]
Notes:
Lease Financing has certain advantages : Assured Regular Income Preservation of Ownership Benefit of Tax High Profitability
4. What can be the maximum denomination of notes as per the Section 24 of the RBI Act?
[A] ₹10,000
[B] ₹50,000
[C] ₹1,00,000
[D] No such limit exists
Show Answer
Correct Answer: A [ ₹10,000 ]
Notes:
Section 24 of the Reserve Bank of India Act, 1934 states that the maximum denomination a note can be is ₹10,000 (US$140).
5. As per Section 31 of the RBI, who can issue and accept promissory notes that are payable on demand in India?
[A] RBI
[B] Central Government
[C] Both a and b
[D] None
Show Answer
Correct Answer: C [ Both a and b ]
Notes:
The section 31 states that in India, only the RBI or the central government can issue and accept promissory notes that are payable on demand.
6. Which of the following entities are not covered under the Banking Regulation Act 1949?
[A] Public Sector banks
[B] Cooperative Banks
[C] Primary Agricultural Credit Society
[D] All of the above
Show Answer
Correct Answer: C [Primary Agricultural Credit Society]
Notes:
Primary Agricultural Credit Society and cooperative land mortgage banks are excluded from the Banking Regulation Act 1949.
7. Why were Banks nationalised in India?
[A] To borrow money from USA
[B] To follow the IMF guidelines
[C] To provide the government of India more control of credit delivery
[D] All of the above
Show Answer
Correct Answer: C [To provide the government of India more control of credit delivery]
Notes:
The Banks were nationalised in India to provide the government of India more control of credit delivery and further economic development.
8. What is the current deposit limit of Payment banks?
[A] Rs 2 lakhs
[B] Rs 1 lakh
[C] Rs 50000
[D] Rs 5 lakhs
Show Answer
Correct Answer: A [Rs 2 lakhs]
Notes:
Payment banks can take deposits up to Rs. 2,00,000. It can accept demand deposits in the form of savings and current accounts. The money received as deposits can be invested in secure government securities only in the form of Statutory Liquidity Ratio (SLR)
9. Which of these committees in 1945 recommended the setting up of a Cooperative Training College in every state?
[A] Saraiya Committee
[B] Machalan Committee
[C] Narsimaham Committee
[D] Rajagopalachari Committee
Show Answer
Correct Answer: A [Saraiya Committee]
Notes:
Saraiya Committee, in 1945, further recommended the setting up of a Cooperative Training College in every state and a Cooperative Training Institute for Advanced Study and Research at the Central level.
10. In what form, the banks are required to maintain deposits with RBI under CRR?
[A] Cash
[B] Government Securities
[C] Gold
[D] All of the above
Show Answer
Correct Answer: A [Cash]
Notes:
Cash Reserve Ratio (CRR) is the share of a bank’s total deposit that is mandated by the Reserve Bank of India (RBI) to be maintained with the latter in the form liquid cash.
