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. What is the minimum threshold for recovery under the SARFAESI Act, 2002?
[A] ₹50,000
[B] ₹1 lakh
[C] ₹2 lakh
[D] ₹10 lakh
Show Answer
Correct Answer: B [₹1 lakh]
Notes:
The SARFAESI Act, 2002 applies to loans exceeding ₹1 lakh. It does not cover loans below this threshold or those where 80% of the amount has been repaid.
32. What role does the Indian Evidence Act, 1872 play in banking transactions?
[A] It regulates interest rates on loans.
[B] It governs the admissibility of evidence in legal disputes.
[C] It sets the minimum capital requirements for banks.
[D] It outlines the procedures for opening a bank account.
Show Answer
Correct Answer: B [It governs the admissibility of evidence in legal disputes.]
Notes:
The Indian Evidence Act, 1872 is vital in banking as it ensures that records like ledger books are recognized as valid evidence in legal proceedings, facilitating the resolution of banking disputes. For instance, certified copies of entries in a banker’s book are considered prima facie evidence, aiding in financial transaction disputes.
33. Which guideline governs the operation of Letters of Credit internationally?
[A] FEMA Guidelines
[B] Uniform Customs and Practice for Documentary Credits (UCP)
[C] FEDAI Rules
[D] SEBI Regulations
Show Answer
Correct Answer: B [Uniform Customs and Practice for Documentary Credits (UCP)]
Notes:
UCP is a set of guidelines established by the International Chamber of Commerce (ICC) to standardize the procedures for Letters of Credit in international trade.
34. Which document is mandatory for opening a Jan Dhan account?
[A] Passport
[B] Aadhaar
[C] Voter ID
[D] Any officially valid document (OVD)
Show Answer
Correct Answer: D [Any officially valid document (OVD)]
Notes:
For opening a Jan Dhan account, any officially valid document (such as Aadhaar, PAN, or Voter ID) is acceptable under KYC norms.
35. Which initiative by RBI promotes safe digital banking practices?
[A] CyberSafe Campaign
[B] Digital Dhan Initiative
[C] Safe Banking Project
[D] Digital Banking Awareness Week
Show Answer
Correct Answer: A [CyberSafe Campaign]
Notes:
RBI’s CyberSafe Campaign aims to educate consumers on safe digital banking practices to prevent fraud and enhance cyber security awareness.
36. Under Basel III, what type of risk does the Net Stable Funding Ratio (NSFR) address?
[A] Credit risk
[B] Long-term liquidity risk
[C] Market risk
[D] Operational risk
Show Answer
Correct Answer: B [Long-term liquidity risk]
Notes:
The Net Stable Funding Ratio (NSFR) addresses long-term liquidity risk by ensuring that banks maintain a stable funding profile relative to their assets and off-balance sheet activities.
37. How are banks utilizing AI to improve customer experience?
[A] By reducing online banking services
[B] By offering standardized products to all customers
[C] By providing personalized financial services and recommendations
[D] By limiting customer interactions to in-person visits
Show Answer
Correct Answer: C [By providing personalized financial services and recommendations]
Notes:
Banks are increasingly utilizing AI to offer personalized financial services, enhancing customer experience and engagement. AI algorithms analyze customer data to provide tailored product recommendations and financial advice.
38. Which of the following is a money market instrument that represents time deposits with a fixed maturity?
[A] Certificate of Deposit (CD)
[B] Treasury Bill
[C] Call Money
[D] Commercial Paper
Show Answer
Correct Answer: A [Certificate of Deposit (CD)]
Notes:
A Certificate of Deposit is a negotiable money market instrument issued by banks, representing time deposits with a fixed maturity and higher interest rates than savings accounts.
39. What is the maximum maturity term for Treasury Bills in India?
[A] 91 days
[B] 182 days
[C] 364 days
[D] 730 days
Show Answer
Correct Answer: C [364 days]
Notes:
Treasury Bills in India are issued with maximum maturities of 91 days, 182 days, and 364 days.
40. What is a Follow-on Public Offering (FPO)?
[A] The initial issuance of shares by a private company
[B] A secondary market transaction
[C] An additional issuance of shares by an already listed company
[D] A market for government securities
Show Answer
Correct Answer: C [An additional issuance of shares by an already listed company]
Notes:
An FPO is an issuance of additional shares by a company that is already listed on the stock exchange, unlike an IPO which is for first-time issuance.
