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 account can be repatriable?
[A] NRE Account
[B] NRO Account
[C] FCNR(B) Account
[D] Both (A) and (C)
Show Answer
Correct Answer: D [Both (A) and (C)]
Notes:
Non-Resident (External) Rupee Account Scheme [NRE Account] and Foreign Currency (Non-Resident) Account (Banks) Scheme [FCNR (B) Account] can be repatriable while Non- Resident Ordinary Rupee Account Scheme [NRO Account] is not repatriable except for all current income.
22. Which of the following is not true about Immediate Payment Service (IMPS)?
[A] To use IMPS, both the account holder and beneficiary needs to have Mobile Money Identifier (MMID).
[B] Internet Banking Account facilitates IMPS to transfer money to any account.
[C] The facility is provided by National Payments Corporation of India through its existing NFS switch.
[D] IMPS offers an instant, 24X7, interbank electronic fund transfer service through mobile phones.
Show Answer
Correct Answer: A [ To use IMPS, both the account holder and beneficiary needs to have Mobile Money Identifier (MMID). ]
Notes:
One can choose the IMPS method to transfer money using net banking, mobile banking, ATMs or SMSs.D) — As internet banking also facilitates IMPS, so all internet banking account holders can use IMPS to transfer funds.
23. Which among them is responsible for maintaining a Minimum reserve system against printing of currency notes?
[A] Issue Department
[B] Banking Department
[C] Both 1 & 2
[D] None of the above
Show Answer
Correct Answer: A [ Issue Department ]
Notes:
The issue of bank notes shall be conducted by the Bank in an Issue Department which shall be separated and kept wholly distinct from the Banking Department, and the assets of the Issue Department shall not be subject to any liability other than the liabilities of the Issue Department as hereinafter defined in section 34.
24. 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.
25. What should be the equity participation by the NBFC of the IDF?
[A] 50-60%
[B] 10-20%
[C] 25-35%
[D] 30-49%
Show Answer
Correct Answer: D [30-49%]
Notes:
IDF-NBFCs can be sponsored by banks and Infrastructure Finance companies. ‘Sponsorship’ means an equity participation by the NBFC between 30 to 49% of the IDF.
26. Which of the following is true regarding NBFC?
[A] NBFC provides banking services to people without holding bank license
[B] NBFC can accept demand deposits
[C] NBFC is a part of payment and settlement
[D] NBFC can issue checks drawn on itself
Show Answer
Correct Answer: A [NBFC provides banking services to people without holding bank license]
Notes:
NBFC provides banking services to people without holding bank license. NBFC cannot accept demand deposits. NBFC is not a part of payment and settlement. NBFC can not issue checks drawn on itself.
27. Financial service companies excludes which of the following?
[A] Commercial banks
[B] Insurance companies
[C] Crepitating agencies
[D] Sole proprietorship
Show Answer
Correct Answer: D [Sole proprietorship]
Notes:
A sole proprietorship, also known as the sole trader, individual entrepreneurship or proprietorship, is a type of enterprise that is owned and run by one person and in which there is no legal distinction between the owner and the business entity.
28. Which of the following is the benefit of credit-rating to investors?
[A] Safeguard against bankruptcy
[B] Saving of resources
[C] Credibility of issues
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Saving of resources, Safeguard against bankruptcy and Credibility of issues are all benefits of credit-rating to investors.
29. State Bank of India started merchant banking in which of the following years?
[A] 1974
[B] 1978
[C] 1973
[D] 1980
Show Answer
Correct Answer: C [1973]
Notes:
State Bank of India started merchant banking in 1973. SBI, the largest Bank of the country, provides Merchant Acquiring Services through its large branch network of more than 15000 branches. Its Merchant Acquiring Services enable merchant to accept all Visa/ MasterCard/RuPay cards for payment.
30. In which of the following risks, ambiguity introduced by organization, finances its investments?
[A] country risk
[B] financial risk
[C] liquidity risk
[D] business risk
Show Answer
Correct Answer: B [financial risk]
Notes:
In financial risk, ambiguity introduced by organization, finances its investments.
