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 type of deposits gives highest rate of interest?
[A] Current deposit
[B] Fixed deposit
[C] Recurring deposit
[D] None of the above
Show Answer
Correct Answer: B [Fixed deposit]
Notes:
FD / Fixed Deposit is an investment avenue that offers capital protection. They also offer high-interest rates as compared to savings accounts.
12. Which of the following is the placement of funds in an account with a bank?
[A] Bank deposit
[B] Foreign currency
[C] Loan
[D] All of the above
Show Answer
Correct Answer: A [Bank deposit]
Notes:
Bank deposits refer to this liability rather than to the actual funds that have been deposited. When someone opens a bank account and makes a cash deposit, he surrenders legal title to the cash, and it becomes an asset of the bank.
13. 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.
14. Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) was set up by Government of India and which of the following bank?
[A] RBI
[B] NABARD
[C] SIDBI
[D] MUDRA
Show Answer
Correct Answer: C [SIDBI]
Notes:
The Credit Guarantee Fund Scheme for Micro and Small Enterprises (CGS) was launched by the Government of India (GoI) to make available collateral-free credit to the micro and small enterprise sector
15. The Banking Ombudsman Scheme is introduced under which of the following sections in Banking Regulation Act, 1949?
[A] Section 25 A
[B] Section 30 A
[C] Section 40 A
[D] Section 35 A
Show Answer
Correct Answer: D [Section 35 A]
Notes:
The Banking Ombudsman Scheme is introduced under Section 35 A of the Banking Regulation Act, 1949.
16. What is LRS a2?
[A] LRS Modulation
[B] LRS activation
[C] LRS Declaration
[D] None of the above
Show Answer
Correct Answer: C [LRS Declaration]
Notes:
Under the Liberalised Remittance Scheme (LRS), the Indian government and the Reserve Bank of India (RBI) now require an LRS Declaration form (fully titled “A2 cum LRS Declaration”) to transfer funds abroad.
17. Which entities are defined as “bank” under Payment and Settlement Systems Act, 2007?
[A] a bank included in the Second Schedule to the RBI Act
[B] a post office savings bank
[C] a banking company as defined in clause c of section 5, of the Banking Regulation Act
[D] all of the above
Show Answer
Correct Answer: D [all of the above]
Notes:
The Payment and Settlement Systems Act, 2007 defines “bank” to include a bank in the Second Schedule to the RBI Act, a post office savings bank, and a banking company as in section 5(c) of the Banking Regulation Act, 1949. The Act applies to payment systems and settlement activities undertaken by these types of banks.
18. IMPS is functional through which of the following?
[A] ECS
[B] EFS
[C] NFS
[D] RTGS
Show Answer
Correct Answer: C [NFS]
Notes:
National Financial Switch is a network of shared ATMs in India. The National Financial Switch facilitates routing of ATM transactions through inter-connectivity between the Bank’s Switches, thereby enabling the citizens of the country to utilize any ATM of a connected bank. IMPS utilizes this network.
19. What is call money?
[A] It is an overnight loan in the money market
[B] It is loan of above 1 day to 14 days in the money market
[C] It is loan of above 14 day to 364 days in the money market
[D] None of the above
Show Answer
Correct Answer: A [It is an overnight loan in the money market]
Notes:
Call money is minimum 5% short-term finance repayable on demand, with a maturity period of one to fourteen days or overnight to fortnight. It is used for inter-bank transactions.
20. Which components are classified as Narrow Money in India?
[A] M1 and M2
[B] M2 and M3
[C] M3 and M4
[D] M1 and M2
Show Answer
Correct Answer: D [M1 and M2]
Notes:
M1 includes currency with the public, demand deposits with the banking system, and other deposits with RBI. M2 comprises M1 plus savings deposits with post office savings banks. Reserve Bank of India defines M1 and M2 together as Narrow Money. Broad Money (M3 and M4) contains larger aggregates. RBI monetary aggregates classification was notified in 1977 and updated in April 2022.
