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.
11. Which of these is a Priority Sector for Lending as specified by the RBI?
[A] Agriculture
[B] Education
[C] Housing
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Priority Sector Lending means that the banks have to make sure that they lend to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education and other low income groups and weaker sections.
12. What is not true about Payment bank?
[A] It cannot issue loans
[B] It can accept deposits
[C] It can issue credit cards
[D] None of the above
Show Answer
Correct Answer: C [It can issue credit cards]
Notes:
Payments banks is a new model of banks conceptualised by the Reserve Bank of India (RBI). These banks can accept a restricted deposit and cannot issue loans and credit cards.
13. Which of these accounts can be opened in a Payment Bank?
[A] Savings Account
[B] Current Account
[C] Both a and b
[D] None
Show Answer
Correct Answer: C [Both a and b]
Notes:
Both current account and savings accounts can be opened in a Payment Bank. The deposit limit is Rs 200000 at present.
14. When did the RBI allowed for the first time to open ultra small branches?
[A] 2004
[B] 2009
[C] 2012
[D] 2014
Show Answer
Correct Answer: C [2012]
Notes:
in 2012, the Reserve Bank of India allowed banks to open ‘ultra small branches’ in rural areas of the country from where business correspondents (BCs) can conduct operations and thereby boost confidence of customers to use their financial services.
15. In which year the Royal Commission on Indian Currency and Finance recommended the creation of a central bank for India?
[A] 1926
[B] 1927
[C] 1928
[D] 1929
Show Answer
Correct Answer: A [1926]
Notes:
In 1926, the Royal Commission on Indian Currency and Finance recommended the creation of a central bank for India.
16. When was the Board for Payment and Settlement Systems established in the RBI?
[A] 2005
[B] 2003
[C] 2002
[D] 2001
Show Answer
Correct Answer: A [2005]
Notes:
BPSS was established in 2005 to regulate and supervise the payment and settlement systems. It is one of the two assistive bodies to Central Board of Directors.
17. What is meant by Open Market Operations?
[A] Purchase and sale of the Government Securities by RBI
[B] Rationing of the credit allocated by commercial banks by RBI
[C] Request by the RBI to the commercial banks to take certain measures
[D] None of the above
Show Answer
Correct Answer: A [Purchase and sale of the Government Securities by RBI]
Notes:
Open Market Operations (OMO) refer to the purchase and sale of the Government Securities (G-Secs) by RBI from / to market.
18. Which of these banks is regulated by Reserve bank of India?
[A] Local Area Banks
[B] Cooperative Banks
[C] Commercial Banks
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
RBI regulates Commercial Banks, Regional Rural Banks, Local Area Banks, Cooperative Banks, Financial Institutions including Development Financial Institutions (DFIs) and Non-Banking Financial Companies.
19. Which of the following is correct definition of sweep accounts?
[A] Funds are automatically managed between two accounts
[B] Accounts maintained by retail banks that pay interest but can not be used directly as money
[C] A deposit account that pays interest at money market rates
[D] None of the above
Show Answer
Correct Answer: A [Funds are automatically managed between two accounts]
Notes:
The most common deposit accounts are savings and checking. Deposit accounts fall into two major categories: demand deposits and time deposits. A deposit account in which amounts over a certain balance are automatically transferred to another account pursuant to a pre-determined set of arrangements is called a sweep account. In sweep accounts, funds are automatically managed between a primary cash account and secondary investment accounts.
20. Which of the following has a fixed time and pays higher interest than a SB Acccount?
[A] Savings Bank Account
[B] Fixed Deposit Account
[C] Recurring Account
[D] Current Account
Show Answer
Correct Answer: A [Savings Bank Account]
Notes:
Fixed Deposit Account is a deposit of money that pays higher interest than a savings account but imposes conditions on the amount, frequency, and/or period of withdrawals. It is also called time deposit.
