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.
41. Which committee recommended the establishment of IRDAI?
[A] Narasimham Committee
[B] Malhotra Committee
[C] Rangarajan Committee
[D] Kelkar Committee
Show Answer
Correct Answer: B [Malhotra Committee]
Notes:
The Malhotra Committee, set up in 1993, recommended the establishment of the IRDAI to promote competition and regulate the insurance sector.
42. Which type of insurance company provides coverage for risks other than life?
[A] Life insurance company
[B] General insurance company
[C] Reinsurance company
[D] Pension fund
Show Answer
Correct Answer: B [General insurance company]
Notes:
General insurance companies provide coverage for risks such as health, motor, property, and marine, excluding life insurance.
43. Which of the following best describes the role of insurance agents in India?
[A] They act as intermediaries for multiple insurers
[B] They represent only one insurer and sell its products
[C] They manage claims on behalf of policyholders
[D] They provide underwriting services
Show Answer
Correct Answer: B [They represent only one insurer and sell its products]
Notes:
Insurance agents represent only one insurer and sell its products, earning commissions on the policies sold.
44. What is the primary role of an Insurance Ombudsman?
[A] To regulate insurance pricing
[B] To resolve complaints and disputes between policyholders and insurers
[C] To approve new insurance products
[D] To manage insurance repositories
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Correct Answer: B [To resolve complaints and disputes between policyholders and insurers]
Notes:
The Insurance Ombudsman is responsible for resolving complaints and disputes between policyholders and insurers in a cost-effective and time-bound manner.
45. Which of the following is a key feature of the Integrated Grievance Management System (IGMS)?
[A] Real-time monitoring of complaints
[B] Centralized database of grievances
[C] Automatic escalation of unresolved complaints to IRDAI
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
The Integrated Grievance Management System (IGMS) offers features like real-time monitoring, a centralized grievance database, and automatic escalation of unresolved complaints to IRDAI.
46. Which of the following is NOT a benefit of privatizing the insurance sector?
[A] Improved efficiency in service delivery
[B] Increased competition among insurers
[C] Higher regulatory burden on the government
[D] Greater innovation in insurance products
Show Answer
Correct Answer: C [Higher regulatory burden on the government]
Notes:
Privatization leads to improved efficiency, increased competition, and greater innovation in products, but it does not result in a higher regulatory burden; instead, it reduces the government’s role in directly managing insurance businesses.
47. Which type of letter of credit guarantees payment even if the buyer fails to make the payment?
[A] Revocable Letter of Credit
[B] Irrevocable Letter of Credit
[C] Confirmed Letter of Credit
[D] Standby Letter of Credit
Show Answer
Correct Answer: D [Standby Letter of Credit]
Notes:
A Standby Letter of Credit (SBLC) acts as a guarantee and ensures that the seller will receive payment even if the buyer defaults.
48. What does the term “currency pair” mean in forex trading?
[A] A combination of two countries involved in trade
[B] The ratio of two interest rates
[C] A quotation of two currencies traded in the forex market
[D] A set of exchange rates offered by a broker
Show Answer
Correct Answer: C [A quotation of two currencies traded in the forex market]
Notes:
In forex trading, a currency pair represents the value of one currency relative to another, such as EUR/USD (Euro to US Dollar).
49. Which section of the Income Tax Act provides additional deduction of INR 50,000 for contributions to NPS beyond the standard 80C limit?
[A] Section 80CCD(1B)
[B] Section 80D
[C] Section 24
[D] Section 10(10D)
Show Answer
Correct Answer: A [Section 80CCD(1B)]
Notes:
Under Section 80CCD(1B), an additional deduction of INR 50,000 is allowed for contributions to NPS, over and above the standard limit under Section 80C.
50. Which of the following is a key benefit of investing in Real Estate Investment Trusts (REITs)?
[A] High liquidity compared to direct real estate investment
[B] Guaranteed fixed returns
[C] No market risk
[D] Tax-free income
Show Answer
Correct Answer: A [High liquidity compared to direct real estate investment]
Notes:
One of the key benefits of investing in REITs is their high liquidity compared to direct real estate investments, as REITs are listed and traded on stock exchanges.
