Banking Awareness Test Questions - Set 5

1)   When did the Centre acquire the Reserve Bank of India's entire 59.73% equity stake in the State Bank of India (SBI) at over Rs. 35,531 crore in New Delhi?

a. April 5, 2006
b. May 26, 2006
c. June 29, 2007
d. September 30, 2005
Answer  Explanation  Related Ques

ANSWER: June 29, 2007

Explanation:
The Centre acquired the Reserve Bank of India's entire 59.73% equity stake in State Bank of India (SBI) at over Rs. 35,531 crore in New Delhi on June 29, 2007. It is the biggest ever cash purchase. As per the guidelines of the Securities and Exchange Board of India (SEBI), the Government picked up the entire SBI shares held by the SBI at a price of Rs. 1,130.35 a share.


2)   The RBI sanctioned the amalgamation of the Centurion Bank of Punjab with the HDFC Bank on ______.

a. May 23, 2008
b. August 13, 2008
c. June 30, 2009
d. March 31, 2009
Answer  Explanation  Related Ques

ANSWER: May 23, 2008

Explanation:
The merger became effective on May 23, 2008. CBoP had arround 400 branches operating out of about 180 locations supported by an employee base of over 7,500 employees


3)   When was the Oriental Life Insurance Company established?

a. 1818
b. 1834
c. 1907
d. 1938
Answer  Explanation  Related Ques

ANSWER: 1818

Explanation:
The first life insurance company started functioning in India was Oriental Life Insurance Company.


4)    When was general insurance business nationalised?

a. 1938
b. 1971
c. 1973
d. 1993
Answer  Explanation  Related Ques

ANSWER: 1973

Explanation:
The nationalisation of general insurance business from 1 Jan 1973, was the effect of the General Insurance Business (Nationalisation) Act. 107 insurers were grouped into four companies: National Insurance Company, the New India Assurance Company, the Oriental Insurance Company and the United India Insurance Company.


5)   What is the full form of LIBOR?

a. Local Indian Bank Offered Rate
b. London-India Bureau Of Regulations
c. Liberal International Bank Official Ratio
d. London Inter Bank Offered Rate
Answer  Explanation  Related Ques

ANSWER: London Inter Bank Offered Rate

Explanation:
The London Inter Bank Offered Rate is the average interest rate estimated by leading banks in London.


6)   Which of the following is not a public sector bank in India?

a. Andhra Bank
b. Federal Bank
c. IDBI Bank
d. Vijaya Bank
Answer  Explanation  Related Ques

ANSWER: Federal Bank

Explanation:
Federal Bank Limited is a major Indian commercial bank in the private sector headquartered at Aluva, Kerala.


7)   What does the letter 'S' denote in the term IFSC?

a. Subscriber
b. State
c. System
d. Source
e. Standard
Answer  Explanation  Related Ques

ANSWER: System

Explanation:
The Indian Financial System Code (IFSC Code) is an alphanumeric code that uniquely identifies a bank-branch participating in the Real Time Gross Settlement (RTGS) and the National Electronic Funds Transfer (NEFT) Systems.


8)   When more than one banks allow credit facilities to one party in cordination with each other, the process is called as _________

a. Amortization
b. Consortium
c. Moratorium
d. Subvention
Answer  Explanation  Related Ques

ANSWER: Consortium

Explanation:
A consortium is an association of two or more individuals, companies, organizations or governments with the objective of participating in a common activity or pooling their resources for achieving a common goal.


9)   Which of the following is not the part of organized sector of Indian Money Market?

a. Chit Funds
b. Mutual Funds
c. Non-Banking Financial Companies
d. Reserve Bank of India
Answer  Explanation  Related Ques

ANSWER: Chit Funds

Explanation:
No explanation is available for this question!


10)   Which is the instrument used by RBI under general credit control?

a. CRR
b. SLR
c. Bank Rate
d. Exchange Control
Answer  Explanation  Related Ques

ANSWER: Bank Rate

Explanation:
RBI has been playing its role of supervision, control and development of the monetary and banking system in the country through Public Debt Management, Banker to Government, Bankers' Bank.


11)   Which is a tool that helps RBI to stabilize money supply and prices of Government securities?

a. EOQ
b. EPQ
c. JIT
d. OMO
Answer  Explanation  Related Ques

ANSWER: OMO

Explanation:
An Open Market Operation is an activity by a central bank to buy or sell government bonds on the open market.


12)   Which among the following refers to misselling?

(i) When mutual funds are sold without telling the likely returns
(ii) When agents sell the products without telling investors what are the risks involved in investing in mutual funds
(iii) When agents invest somebody's money in mutual funds without their knowledge


a. Only (ii)
b. Both (i) and (iii)
c. All (i), (ii) and (iii)
d. None of the above
Answer  Explanation  Related Ques

ANSWER: All (i), (ii) and (iii)

Explanation:
Selling life insurance to someone who has no dependents is regarded as misselling.


13)   What is Mortgage?

a. A security created on immovable property for a deposit received by a bank
b. A security created on immovable property for a loan given by a bank
c. A facility created on movable property for a deposit received by a bank
d. A security created on movable property for a loan given by a bank
Answer  Explanation  Related Ques

ANSWER: A security created on immovable property for a loan given by a bank

Explanation:
In the case of creation of registered mortgages, the mortgage deed should be presented for registration with Registrar of Assurances within 4 months from the date of execution of the deed.


14)   Share price X Number of the company's outstanding ordinary share =

a. Market Capitalization
b. Market Price
c. Market Trend
d. Treasury Stock
Answer  Explanation  Related Ques

ANSWER: Market Capitalization

Explanation:
Market capitalization or market cap reflects the equity value of a company.


15)   Which one of the following requires lenders to provide "good faith" estimates of settlement costs?

a. FOIA
b. NCUA
c. RESPA
d. TILA
Answer  Explanation  Related Ques

ANSWER: RESPA

Explanation:
The Real Estate Settlement Procedures Act (RESPA) ensures that consumers are provided with helpful information about the cost of the mortgage settlement and protected from unnecessarily high settlement charges caused by certain abusive practices.


16)   Which of the following focuses on the financial needs of the institutional clients and the industry?

a. Universal banking
b. Virtual Banking
c. Internet banking
d. Wholesale banking
Answer  Explanation  Related Ques

ANSWER: Wholesale banking

Explanation:
No explanation is available for this question!


17)   Which was the first bank to introduce savings account in India?

a. Bank of Hindustan
b. General Bank of India
c. Presidency Bank
d. Bengal Bank
Answer  Explanation  Related Ques

ANSWER: Presidency Bank

Explanation:
In 1833, savings account system was started by Presidency Bank.


18)   Who regulates monetary policy?

a. IRDA
b. RBI
c. SEBI
d. SIDBI
e. Finance Ministry
Answer  Explanation  Related Ques

ANSWER: RBI

Explanation:
Monetary policy is the process by which the monetary authority of a country controls the supply of money.


19)   What is the full form of CDS?

a. Call Detail Swap
b. Corporate Debt Swap
c. Credit Default Swap
d. None
Answer  Explanation  Related Ques

ANSWER: Credit Default Swap

Explanation:
The first Credit Default Swap (CDS) contract was introduced by JP Morgan in 1997.


20)   What method is used by the Bank to read code on cheque?

a. MICR
b. OCR
c. OMR
d. None
Answer  Explanation  Related Ques

ANSWER: MICR

Explanation:
The Magnetic Ink Character Recognition (MICR) line is at the bottom of cheques.


21)   What is the full form of CDSL?

a. Central Depository Services Limited
b. Cardinal Depository Services Limited
c. Central Depository Securities Limited
d. None
Answer  Explanation  Related Ques

ANSWER: Central Depository Services Limited

Explanation:
Central Depository Services Limited (CDSL) is promoted by Bombay Stock Exchange Limited.


22)   Which among the following is called the rate of interest charged by RBI for lending money to various commercial banks by rediscounting of the bills in India?

a. Bank Rate
b. Discount Window
c. Monetary Policy
d. Overnight Rate
Answer  Explanation  Related Ques

ANSWER: Bank Rate

Explanation:
It is also referred to as the discount rate.


23)   "Basel Committee on Banking Supervision" is also known as _______.

a. Bank for International Settlements Committee
b. Banking Regulation Committee
c. Financial Stability Board
d. Global Financial System
Answer  Explanation  Related Ques

ANSWER: Bank for International Settlements Committee

Explanation:
At the end of 1974, the central bank governors of the G10 countries established a Committee on Banking Regulations and Supervisory Practices. The Committee was designed as a forum for regular cooperation between its member countries on banking supervisory matters.


24)   Which was the first Indian bank to open branch outside India?

a. Andhra Bank
b. Bank of Baroda
c. Bank of India
d. Canara Bank
Answer  Explanation  Related Ques

ANSWER: Bank of India

Explanation:
Bank of India is the first Indian bank to open branch outside India at London in 1946.


25)   In which year was the Banking Regulation Act passed?

a. 1949
b. 1955
c. 1959
d. 1969
Answer  Explanation  Related Ques

ANSWER: 1949

Explanation:
The failure of 588 banks in various states during 1913-1917 emphasized the need for the regulation and coordination of commercial banks and thus Banking Regulation Act was passed in 1949.


26)   Which of the following public sector banks has highest number of branches in India?

a. Bank of india
b. Allahabad Bank
c. State bank of India
d. Punjab National Bank
Answer  Explanation  Related Ques

ANSWER: State bank of India

Explanation:
No explanation is available for this question!


27)   Bank of Rajasthan was merged with

a. SBI
b. HDFC
c. IDBI
d. ICICI
Answer  Explanation  Related Ques

ANSWER: ICICI

Explanation:
No explanation is available for this question!


28)   What is the full-form of HDFC?

a. Housing Department Finance Corporation
b. Housing Development Financial Corporation
c. Housing Development Finance Corporation
d. Housing Development Finance Company
Answer  Explanation  Related Ques

ANSWER: Housing Development Finance Corporation

Explanation:
No explanation is available for this question!


29)   Which bank(s) has/have received Banking license by Reserve Bank of India in 2014?

a. Aditya Birla Nuvo Ltd
b. IDFC
c. Bandhan
d. Both 2 and 3
Answer  Explanation  Related Ques

ANSWER: Both 2 and 3

Explanation:
No explanation is available for this question!


30)   Which bank was baptised as the State Bank of India?

a. New Bank of India
b. Imperial Bank of India
c. Indian Bank
d. United Bank of India
Answer  Explanation  Related Ques

ANSWER: Imperial Bank of India

Explanation:
The Imperial Bank of India was baptised as State Bank of India followed by the formation of 7 associate banks in 1959. Recognising the fact that banking plays a crucial role in the economic development of a country, the Government of India nationalised 14 major commercial banks in July 1969. Another six commercial banks were nationalised in April 1980 in order to bring commercial banks into the mainstream of economic development with definite social obligations and objectives.


31)   What percent of tax deduction has been allowed for contribution into Swachh Bharat Fund and Namami Gange Fund as announced in this budget 2015-16?

a. 50%
b. 75%
c. 90%
d. 100%
Answer  Explanation  Related Ques

ANSWER: 100%

Explanation:
Swachh Bharat and Namami Gange are among the major initiatives of the Modi Government, which has embarked on a major drive to ensure cleanliness across the country.


32)   Name the Scheme to empower and enable minority youths announced in the budget 2015-16?

a. Alpsankhyank Yuva Yojana
b. Minority Welfare Scheme
c. Nai Manzil
d. None of these
Answer  Explanation  Related Ques

ANSWER: Nai Manzil

Explanation:
An integrated education and livelihood scheme called Nai Manzil will be launched this year to enable minority youth who do not have a formal school-leaving certificate to obtain one and find better employment.


33)   What is the new rate of Service Tax as per Budget 2015-16?

a. 13%
b. 14%
c. 13.5%
d. 14.5%
Answer  Explanation  Related Ques

ANSWER: 14%

Explanation:
Finance Minister Arun Jaitley made a very crucial decision of increasing service tax from 12.36% to 14%.


34)   What amount of money is allocated in the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) scheme in the Union Budget 2015-16?

a. Rs. 5,000 crore
b. Rs. 1,000 Crore
c. Rs. 500 Crore
d. Rs. 2500 Crore
Answer  Explanation  Related Ques

ANSWER: Rs. 5,000 crore

Explanation:
Finance Minister Arun Jaitley increased its allocation to Rs 34,699 crore, the highest it has ever received.


35)   How many new ultra mega power projects (each of 4,000 MWs in the plug-and-play mode) were proposed by the Union Government in the Union Budget 2015-16?

a. Two
b. Three
c. Four
d. Five
Answer  Explanation  Related Ques

ANSWER: Five

Explanation:
The Union Government plans to build five new ultra mega power projects totalling 20,000 MW which will unlock investment of up to Rs.1 lakh crore.