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. In which year does Reserve Bank of India introduced the concept of classification of money into M1, M2, M3 and so on?
[A] 1956
[B] 1961
[C] 1977
[D] 1998
Show Answer
Correct Answer: C [1977]
Notes:
The measures of money supply in India are classified into four categories M1, M2, M3 and M4 along with M0. This classification was introduced in April 1977.
22. Which of the following statements is/are correct?
[A] NBFCs does not hold a banking license.
[B] NBFC can issue Demand Drafts like banks.
[C] Both 1 and 2 are correct
[D] Neither of them are correct
Show Answer
Correct Answer: A [NBFCs does not hold a banking license.]
Notes:
NBFC cannot accept demand deposits while NBFC cannot issue Demand Drafts like banks.
23. Which of the following financial activities is carried by CIC?
[A] granting of loans to group companies
[B] investment in bank deposits
[C] issuing guarantees on behalf of group companies
[D] all of the above
Show Answer
Correct Answer: D [all of the above]
Notes:
CIC does not carry on any other financial activity referred to in Section 45I© and 45I (f) of the Reserve Bank of India Act, 1934 except investment in bank deposits, money market instruments, including money market mutual funds and liquid mutual funds, government securities, and bonds or debentures issued by group companies, granting of loans to group companies and issuing guarantees on behalf of group companies.
24. The profit on interest charged on the hire purchase should appear in the profit and loss account in what manner?
[A] The interest charged in that period only should be included
[B] Interest should be apportioned in proportion to the repayment totals
[C] The total interest levied should be divided equally over the total period the for purchase agreement
[D] Interest should instead be capitalised on the balance sheet
Show Answer
Correct Answer: A [The interest charged in that period only should be included]
Notes:
The profit on interest charged on the hire purchase should appear in the profit and loss account in the interest charged in that period only.
25. Which kind of investments the Money market mutual funds scheme does?
[A] Safe short term investments
[B] Long terms investments
[C] Periodic investments
[D] All of the above
Show Answer
Correct Answer: A [Safe short term investments ]
Notes:
Money market mutual funds:
Schemes investing exclusively in safer short-term instruments such as treasury bills, certificates of deposit, commercial paper and inter-bank call money, government securities, etc.
26. Which of these is not chaired by the RBI Governor?
[A] BFS
[B] NPCI
[C] BPSS
[D] MPC
Show Answer
Correct Answer: B [NPCI]
Notes:
BFS, BPSS, and MPC are chaired or co-chaired by the RBI Governor, while NPCI is an independent body promoted by RBI and Indian Banks’ Association, not chaired by the RBI Governor.
27. In which year was the Board of Financial Supervision (BFS) constituted?
[A] 1994
[B] 1996
[C] 1999
[D] 2002
Show Answer
Correct Answer: A [1994]
Notes:
The Board of Financial Supervision (BFS) was set up in November 1994 under RBI to supervise banks, financial institutions, and NBFCs. Chaired by the RBI Governor, it consists of four co-opted directors (two-year term) and a Deputy Governor as Vice Chairman. BFS meets monthly for regulatory oversight.
28. In which year was Reserve Bank Information Technology (ReBIT) established?
[A] 2010
[B] 2012
[C] 2016
[D] 2019
Show Answer
Correct Answer: C [2016]
Notes:
ReBIT, wholly owned by RBI, was established in 2016 to address information technology and cyber security requirements of Indian banks and to strengthen cyber resilience in the financial sector.
29. In a Usufructuary Mortgage, how does the mortgagee recover the loan?
[A] By suing the mortgagor for repayment.
[B] By selling the mortgaged property.
[C] By earning income (e.g., rent or profits) from the property.
[D] By taking ownership of the property permanently.
Show Answer
Correct Answer: C [By earning income (e.g., rent or profits) from the property.]
Notes:
In a Usufructuary Mortgage, the mortgagee recovers the loan by earning income from the property, such as rent or profits, rather than through legal action or permanent ownership of the property.
30. How do fraudsters exploit QR codes to deceive customers and steal money?
[A] By using QR codes to install malicious software on devices
[B] By sending fake QR codes that authorize money transfers to the fraudster’s account
[C] By linking QR codes to phishing websites to collect personal data
[D] By cloning payment apps to intercept transactions
Show Answer
Correct Answer: B [By sending fake QR codes that authorize money transfers to the fraudster’s account]
Notes:
Fraudsters create deceptive QR codes that, when scanned, lead to unauthorized money transfers. Customers should only use trusted QR codes and verify transaction details to protect themselves from such scams.
