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.
21. What is the priority sector lending target for Micro Enterprises, as mandated by the RBI?
[A] 5 %
[B] 7.5 %
[C] 10 %
[D] 12 %
Show Answer
Correct Answer: B [7.5 %]
Notes:
The Reserve Bank of India mandated that 7.5 % of the bank’s total credit (ANBC or CEOBE) should be provided to Micro enterprises.
Recently, the Union MSME Ministry announced the inclusion of retail and wholesale trade under MSMEs (Micro, small and medium enterprises). As per this categorisation, the traders will now get the benefit of priority sector lending under RBI guidelines. They will also be eligible for availing immediate-term finance as part of the schemes announced under ‘Atmanirbhar Bharat’.
22. What is the maximum number of Governors in RBI?
[A] 2
[B] 5
[C] 1
[D] 4
Show Answer
Correct Answer: C [1]
Notes:
The Reserve Bank of India has only one Governor at a time, assisted by up to four Deputy Governors. The Governor is the chief executive of the institution, appointed by the Government of India, and leads the 21-member central board of directors.
23. Which of the following types of deposits are insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC)?
[A] Savings deposits
[B] Inter-bank deposits
[C] Fixed deposits
[D] All of Above
Show Answer
Correct Answer: D [All of Above]
Notes:
The DICGC insures various deposits, excluding those from foreign and government entities, inter-bank deposits, certain state bank deposits, and amounts specifically exempted by the Reserve Bank of India.
24. Which of the following sectors is NOT included in Priority Sector Lending (PSL) in India?
[A] Agriculture
[B] Micro, Small, and Medium Enterprises (MSMEs)
[C] Entertainment
[D] Renewable Energy
Show Answer
Correct Answer: C [Entertainment]
Notes:
The Priority Sector Lending in India focuses on sectors like agriculture, MSMEs, and renewable energy, but does not include the entertainment sector, which is not considered a priority for financial support.
25. Which activities are covered under Farm Credit in Priority Sector Lending?
[A] Loans for solar agriculture pumps
[B] Crop loans for plantations
[C] Loans under Kisan Credit Card
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Reserve Bank of India Master Directions on Priority Sector Lending issued in September 2020 include loans for solar agriculture pumps, crop loans for plantations, and loans under the Kisan Credit Card (KCC) scheme. These are classified under Farm Credit, which is a subcategory of Priority Sector Lending. The KCC scheme was introduced in August 1998 to provide farmers with timely credit support.
26. Who in the education sector is eligible to receive credit under Priority Sector lending norms in India?
[A] Schools and colleges
[B] Individuals for vocational and higher education
[C] Educational NGOs
[D] Government institutions
Show Answer
Correct Answer: B [Individuals for vocational and higher education]
Notes:
Under Priority Sector lending norms in India, individuals can receive loans for vocational and higher education, including overseas studies, with a maximum limit of ₹20 lakh, promoting access to quality education.
27. Where can borrowers appeal against enforcement actions under the SARFAESI Act, 2002?
[A] High Court
[B] Debts Recovery Tribunal (DRT)
[C] National Consumer Disputes Redressal Commission
[D] Civil Court
Show Answer
Correct Answer: B [Debts Recovery Tribunal (DRT)]
Notes:
Borrowers can challenge enforcement actions under the SARFAESI Act, 2002 in the Debts Recovery Tribunal (DRT) and subsequently appeal to the Debts Recovery Appellate Tribunal (DRAT) if needed.
28. In which year was the Indian Contract Act enacted, which governs contracts in the banking sector?
[A] 1862
[B] 1872
[C] 1882
[D] 1892
Show Answer
Correct Answer: B [1872]
Notes:
The Indian Contract Act was enacted on April 25, 1872, and it provides the legal framework for contracts in India, including those in the banking sector. It ensures that agreements between banks and customers are enforceable by law, based on English Common Law principles.
29. Which type of Letter of Credit allows multiple transactions over a specified period without requiring a new LC for each transaction?
[A] Transferable LC
[B] Revolving LC
[C] Deferred Payment LC
[D] Back-to-Back LC
Show Answer
Correct Answer: B [Revolving LC]
Notes:
A Revolving Letter of Credit allows multiple transactions under a single credit up to a specified limit or within a certain period, which makes it ideal for recurring trade deals.
30. Which Indian bank launched an ESG-linked loan facility, where interest rates are linked to the borrower’s ESG performance?
[A] Axis Bank
[B] ICICI Bank
[C] State Bank of India
[D] HDFC Bank
Show Answer
Correct Answer: A [Axis Bank]
Notes:
Axis Bank introduced an ESG-linked loan facility that incentivizes borrowers to improve their ESG performance by offering lower interest rates based on ESG scores.
