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. The demand for heavy loans can lead to which of the following?
[A] excess funds for banks
[B] Deficiencies for banks
[C] Organized reservation
[D] Competitive reservations
Show Answer
Correct Answer: B [ Deficiencies for banks ]
Notes:
Daily and hourly loans are in heavy demand and will incur heavy fines if they are returned late. Fines will apply almost as soon as the item is overdue.
32. Loan disbursed by an NBFC-MFI to a borrower with urban and semi-urban household income should not exceed how much amount?
[A] Rs.1,00,000
[B] Rs. 1,60,000
[C] Rs. 2,60,000
[D] Rs.1,50,000
Show Answer
Correct Answer: B [Rs. 1,60,000]
Notes:
Loan disbursed by an NBFC-MFI to a borrower with urban and semi-urban household income should not exceed ₹ 1,60,000
33. Core Investment Company holds not less than how much percent of its net assests in the form of investment?
[A] 50%
[B] 70%
[C] 90%
[D] 80%
Show Answer
Correct Answer: C [90%]
Notes:
Core Investment Company (CIC) is a non-banking financial company carrying on the business of acquisition of shares and securities and which (a) holds not less than 90 per cent of its net assets in the form of investment.
34. Which of the following enacted a revised regulatory framework regarding CIC?
[A] MFI
[B] SEBI
[C] RBI
[D] None of the above
Show Answer
Correct Answer: C [RBI]
Notes:
RBI enacted a revised regulatory framework regarding core investment companies.
35. A merchant bank is a financial institution conducting money market activities and which of the following?
[A] Lending
[B] Underwriting and financial advice
[C] Investment service
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
A merchant bank is a financial institution conducting money market activities, lending, underwriting and financial advice and investment service.
36. Issue management is an important function of which of the following?
[A] Public banker
[B] Lead banker
[C] Merchant banker
[D] Private banker
Show Answer
Correct Answer: C [Merchant banker]
Notes:
Issue management is the process of identifying and resolving issues. Problems with staff or suppliers, technical failures, material shortages – these might all have a negative impact on your project.
37. Which law provides the legal definition of a mortgage in India?
[A] Indian Contract Act, 1872
[B] Transfer of Property Act, 1882
[C] Limitation Act, 1963
[D] Registration Act, 1908
Show Answer
Correct Answer: B [Transfer of Property Act, 1882]
Notes:
The legal definition of a mortgage in India is provided by Section 58(a) of the Transfer of Property Act, 1882, which outlines the transfer of interest in immovable property to secure a loan or debt.
38. What fraction of India’s GDP is attributed to the Mortgage Industry?
[A] 10%
[B] 13%
[C] 20%
[D] 25%
Show Answer
Correct Answer: B [13%]
Notes:
The Mortgage Industry in India accounts for approximately 13% of the GDP, which is relatively low compared to developed nations, where the figure typically ranges from 20% to 30%.
39. What is the primary difference between a fixed-rate mortgage and an adjustable-rate mortgage (ARM)?
[A] Fixed-rate mortgages have lower initial payments.
[B] ARMs have constant interest rates.
[C] Fixed-rate mortgages maintain the same interest rate throughout the loan term.
[D] ARMs are always more expensive than fixed-rate mortgages.
Show Answer
Correct Answer: C [Fixed-rate mortgages maintain the same interest rate throughout the loan term.]
Notes:
A fixed-rate mortgage has a constant interest rate for the entire term, providing stability, while an adjustable-rate mortgage’s interest rate fluctuates based on market conditions.
40. Which of the following banks is NOT covered under the SARFAESI Act?
[A] Commercial Banks
[B] Cooperative Banks
[C] Regional Rural Banks
[D] Public Sector Banks
Show Answer
Correct Answer: C [Regional Rural Banks]
Notes:
The SARFAESI Act primarily applies to commercial banks, cooperative banks, and notified financial institutions, but it does not explicitly cover Regional Rural Banks.
