Banking & General Financial Awareness
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.
21. Which of the following is/are included in FOREX? 1. Foreign currency assets held by the RBI 2. Gold holdings of the RBI 3. SDRs 4. Reserve position in the IMF
[A] 1,2,3
[B] 2,3,4
[C] 1,2,4
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
The correct answer is 4. In the context of FOREX (foreign exchange), the following are included: 1. Foreign currency assets held by the RBI: These are crucial for managing the country’s foreign exchange reserves. 2. Gold holdings of the RBI: Gold is considered a reserve asset and contributes to the overall reserves. 3. SDRs (Special Drawing Rights): These are international reserve assets created by the IMF to supplement member countries’ official reserves. 4. Reserve position in the IMF: This represents a member country’s financial commitment to the IMF and can be accessed in times of need. All these components are vital for a country’s foreign exchange stability and liquidity.
22. What is the number of digits in IFSC Code?
[A] 11
[B] 15
[C] 9
[D] 7
Show Answer
Correct Answer: A [11]
Notes:
IFSC is short for Indian Financial System Code and represents the 11 digit character that you can usually see on your bank’s cheque leaves. The IFSC is an 11-character code with the first four alphabetic characters representing the bank name, and the last six characters (usually numeric, but can be alphabetic) representing the branch. The fifth character is 0 (zero) and reserved for future use.
23. What is a Demat account?
[A] Zero Balance Accounts
[B] Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business
[C] Accounts in which shares of various companies are traded in electronic form
[D] Accounts which are operated through internet banking facility
Show Answer
Correct Answer: C [Accounts in which shares of various companies are traded in electronic form]
Notes:
Demat account number is quoted for all transactions to enable electronic settlements of trades to take place. Every shareholder will have a Dematerialized account for the purpose of transacting.
24. Which of the following is also known as Prepaid Debit cards?
[A] Loadable Debit Cards
[B] Reloadable Debit Cards
[C] Relational Debit Cards
[D] None of The Above
Show Answer
Correct Answer: B [Reloadable Debit Cards]
Notes:
Reloadable prepaid cards work like traditional debit cards. Customers can load funds and use to shop, transfer money, pay bills, withdraw cash from an ATM and receive direct deposits of payroll and government benefits.
25. In which pension plans, the specific percentage of an employee pay is contributed by an employer to employees pension plans?
[A] cash balance plans
[B] severance pay plans
[C] early retirement window plans
[D] employee stock ownership plans
Show Answer
Correct Answer: A [cash balance plans]
Notes:
A cash balance plan is a twist on the traditional pension plan. Like a traditional pension, a cash balance plan provides workers with the option of a lifetime annuity.
26. Biometric ATM cards are generally issued for which of the following?
[A] Illiterates
[B] Sick & old persons
[C] Inoperative accountholders
[D] Both 1 & 2
Show Answer
Correct Answer: D [Both 1 & 2]
Notes:
Biometrics ATM offer ATM type interface along with at-least one Biometrics capture device like Fingerprint Scanner, Iris camera, Palm/Finger Vein scanner , Face recognition camera.
27. Which of the following committee s recommended the setting up of ATM?
[A] Rangarajan committee
[B] Shere committee
[C] Saraf committee
[D] Narasimhan committee
Show Answer
Correct Answer: A [Rangarajan committee]
Notes:
Automated Teller Machine (ATM) is an electronic machine operated by a customer himself to deposit or withdraws cash. In India, Dr. C Rangarajan Committee was recommended the establishment of ATMs.
28. RBI has launched new restructuring tool ‘S4A’ to raise banks’ moral hazard risk. S4A stands for which of the following?
[A] Scheme for Systematic Structuring of Stressed Assets
[B] Scheme for Sustainable Structuring of Scholastic Assets
[C] Scheme for Sustainable Structuring of Stressed Assets
[D] Scheme for Sustainable Strength of Stressed Assets
Show Answer
Correct Answer: C [Scheme for Sustainable Structuring of Stressed Assets]
Notes:
Under the ‘Scheme for Sustainable Structuring of Stressed Assets’ (S4A), RBI allowed banks to take equity in debt laden firms permitting them to split total loans of struggling companies into sustainable and unsustainable based on the cash flows of the projects.
29. Using futures contracts to transfer price risk is known as which of the following?
[A] hedging
[B] arbitrage
[C] speculating
[D] diversifying
Show Answer
Correct Answer: A [hedging]
Notes:
A hedge is an investment to reduce the risk of adverse price movements in an asset. Normally, a hedge consists of taking an offsetting position in a related security.
30. Which of the following portals has been launched by SEBI to enable investors to post their complains and for its follow up?
[A] SCORES
[B] Happy Times
[C] MORE
[D] Aadhar
Show Answer
Correct Answer: A [SCORES]
Notes:
SCORES enables investors to lodge and follow up their complaints and track the status of redressal of such complaints online from the above website from anywhere.
