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. FEMA was introduced in which of the following year?
[A] 1990
[B] 1989
[C] 1999
[D] 1991
Show Answer
Correct Answer: C [1999]
Notes:
Foreign Exchange Management Act was enacted in 1999 and it had 25 original notifications. This act came into force w.e.f June 1, 2000.FEMA manages foreign exchange, i.e. forex.
2. Which of the following best define an open-funded mutual fund?
[A] It has an option to invest in any kind of security.
[B] It has units available for sale and repurchase at all times.
[C] It does not have a NAV.
[D] It has fixed fund size.
Show Answer
Correct Answer: B [It has units available for sale and repurchase at all times.]
Notes:
Open-end fund is a fund that can issue and redeem shares at any time. An investor purchase shares in this fund directly from the fund itself, rather than from the existing shareholders.
3. What is full form of SIP in mutual funds?
[A] Seller Investment Plan
[B] Systematic Investment Plan
[C] System Involvement Plan
[D] None of the Above
Show Answer
Correct Answer: B [Systematic Investment Plan]
Notes:
A Systematic Investment Plan is an investment plan offered by mutual funds to investors to allow them to invest small amounts periodically instead of large sums at one time. The frequency of investment is usually weekly, monthly or quarterly.
4. 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
5. Who regulates the functioning of District Cooperative Banks in India?
[A] State Government
[B] RBI
[C] State Cooperative Banks
[D] None
Show Answer
Correct Answer: B [RBI]
Notes:
RBI (Reserve Bank of India) regulates and supervises the banking functions of State Cooperative Banks (StCBs), District Central Cooperative Banks (DCCBs) and Urban Cooperative Banks (UCBs) under the various provisions of the Banking Regulation Act, 1949.
6. In which year the Regional Rural Banks Act was passed?
[A] 1986
[B] 1976
[C] 1992
[D] 1988
Show Answer
Correct Answer: B [1976]
Notes:
Regional Rural Banks Act was passed in 1976 which aimed to set up RRBs to provide sufficient banking and credit facility for agriculture and other rural sectors.
7. Who can work as a Banking Correspondent?
[A] Individuals
[B] NGOs
[C] Micro-finance Institutions
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
Following have been allowed by the RBI to work as a Banking Correspondent: Individuals, NGOs, Micro-finance Institutions set up under Societies/Trust Acts, Societies registered under Mutually-Aided Co-operative Societies Acts, or the Co-operative Societies Acts of States Companies in which NBFCs, banks, telecom companies and other corporate entities or their holding companies do not have equity holdings in excess of 10%.
8. Which of the following name is used to refer to the RBI?
[A] Reserve Street
[B] Credit Street
[C] Mint Street
[D] None of the above
Show Answer
Correct Answer: C [Mint Street]
Notes:
RBI is the central bank of India which controls the issuance and supply of the Indian rupee. It is also referred to as the Mint Street. RBI is also known as banker’s bank.
9. What is the function of Board for Financial Supervision (BFS)?
[A] supervision of the financial sector
[B] supervision of all types of payment and settlement systems
[C] appointing the directors of scheduled banks
[D] All of the above
Show Answer
Correct Answer: A [supervision of the financial sector]
Notes:
The main function of BFS is to undertake consolidated supervision of the financial sector comprising commercial banks, Non-Banking Finance Companies (NBFCs), development finance institutions, urban co-operative banks and primary dealers.
10. Where is Central Accounts Section of Reserve Bank of India located?
[A] Nagpur
[B] Pune
[C] Mumbai
[D] Aurangabad
Show Answer
Correct Answer: A [Nagpur]
Notes:
Reserve Bank of India maintains the Principal Accounts of Central as well as State Governments at its Central Accounts Section, Nagpur.
