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.
31. 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.
32. In which year was Priority Sector Lending formally introduced in India?
[A] 1968
[B] 1972
[C] 1980
[D] 1991
Show Answer
Correct Answer: B [1972]
Notes:
Priority Sector Lending was introduced by the National Credit Council in 1968 but was formally established in 1972, evolving over the years to meet changing economic priorities, with the latest guidelines issued in 2020.
33. 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.
34. Which technology replaces sensitive payment information, like card numbers, with unique codes to enhance security during transactions?
[A] Encryption
[B] Tokenization
[C] Biometric Authentication
[D] Two-Factor Authentication
Show Answer
Correct Answer: B [Tokenization]
Notes:
Tokenization enhances transaction security by replacing sensitive data with unique identifiers (tokens), reducing the risk of data breaches and fraud during payment processing.
35. What is the primary implication of the Insolvency and Bankruptcy Code (IBC) on the liquidation process in India’s banking sector?
[A] It eliminates the need for creditors.
[B] It sets a 330-day timeline for the Corporate Insolvency Resolution Process (CIRP).
[C] It allows unlimited time for resolution.
[D] It prevents liquidation altogether.
Show Answer
Correct Answer: B [It sets a 330-day timeline for the Corporate Insolvency Resolution Process (CIRP).]
Notes:
The IBC mandates a 330-day timeframe for completing the CIRP. If unresolved, liquidation starts automatically, expediting value recovery for creditors and minimizing losses from prolonged insolvency, thus enhancing efficiency in the banking sector.
36. A Green Clause Letter of Credit provides advances for:
[A] Only pre-shipment financing
[B] Post-shipment financing
[C] Pre-shipment and warehousing expenses
[D] Shipment inspection costs
Show Answer
Correct Answer: C [Pre-shipment and warehousing expenses]
Notes:
A Green Clause Letter of Credit extends the Red Clause by also allowing advances for warehousing and insurance of goods before shipment, in addition to pre-shipment expenses.
37. Which of the following parties initiates the process of opening a Letter of Credit?
[A] Beneficiary
[B] Applicant
[C] Nominated Bank
[D] Confirming Bank
Show Answer
Correct Answer: B [Applicant]
Notes:
The applicant, typically the buyer or importer, requests the Issuing Bank to open a Letter of Credit in favor of the beneficiary (seller/exporter).
38. 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.
39. In a Deferred Payment Letter of Credit, when is the payment made?
[A] At sight
[B] After presentation of documents
[C] After a specified usance period
[D] Immediately upon issuing the LC
Show Answer
Correct Answer: C [After a specified usance period]
Notes:
Deferred Payment Letters of Credit involve payment on a future date, determined based on terms such as a usance period or agreed maturity.
40. In ESG reporting, what does the “Governance” aspect focus on?
[A] Ensuring compliance with environmental laws
[B] Managing community welfare programs
[C] Ethical management, board structure, and transparency
[D] Offering green loans and credit
Show Answer
Correct Answer: C [Ethical management, board structure, and transparency]
Notes:
The “Governance” pillar of ESG refers to the bank’s internal management practices, including ethical decision-making, board diversity, corporate governance, and transparency.
