Banking Awareness Questions for IBPS, SBI, RRB, RBI and Clerical exams - Set 4

1)   Which of the following is the Oldest Joint Stock Bank of India which is still working?

a. Allahabad Bank
b. Bank of Upper India
c. Patiala Bank
d. State Bank of India
Answer  Explanation 

ANSWER: Allahabad Bank

India’s Oldest Joint Stock Bank which is still working is Allahabad Bank. It is also known as India’s oldest public sector bank.

It was established in 1865.

On April 24, 2014, the bank entered its 150th year of establishment.

Allahabad Bank

Founded: 24 April 1865; 151 years ago
Headquarter: Kolkata, India
Current Head: Rakesh Sethi (Chairman and MD)

Note that the Oldest Joint Stock Bank of India was Bank of Upper India established in 1863 and failed in 1913.

2)   “Scheduled bank” in India means a bank _____.

a. Incorporated under the Companies Act, 1956
b. Authorized to the Banking business
c. Governed by the Banking Regulation Act, 1949
d. Included in the Second schedule to the Reserve Bank of India Act 1934
Answer  Explanation 

ANSWER: Included in the Second schedule to the Reserve Bank of India Act 1934

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934.

A scheduled bank is eligible for loans from the Reserve Bank of India at bank rate. They are also given membership to clearing houses.

Banks not under this Schedule are called non-scheduled banks.

3)   Which is the minimum lending rate decided by RBI which shall be adopted by all Public-Sector Banks?

a. Bank rate
b. Base rate
c. Overnight rate
d. None of the above
Answer  Explanation 

ANSWER: Base rate

Base rate is the minimum rate set by the Reserve Bank of India below which banks are not allowed to lend to its customers.

Base rate is decided to enhance transparency in the credit market and ensure that banks pass on the lower cost of fund to their customers.

It is also known as prior probabilities.

4)   Which one of the following is controlled by the World Wide Web?

a. Universal Banking
b. Virtual Banking
c. Wholesale Banking
d. None of these
Answer  Explanation 

ANSWER: Virtual Banking

Virtual Banking is the provision of accessing the banking and related services online.

Any financial institution that offers the traditional banking services online is termed as a virtual bank.

Virtual banking enables a customer to pay bills online, check account details, secure loans, withdraw and deposit money anytime as per their convenience.

Some common forms of virtual banking are, ATMs, use of magnetic ink character recognition code (MICR), Electronic clearing service scheme, electronic fund transfer scheme, RTGS, computerized settlement of clearing transactions, centralized fund management schemes, etc.

ICICI Bank was the first Indian bank to provide internet banking facility.

5)   When was the Insurance Regulatory and Development Authority constituted?

a. 1938
b. 1971
c. 1993
d. 1999
Answer  Explanation 

ANSWER: 1999

The Insurance Regulatory and Development Authority (IRDA) was set up as an autonomous body under the IRDA Act, 1999.
The IRDA is an autonomous, statutory agency tasked with regulating and promoting the insurance and re-insurance industries in India.
Organization structure of IRDA

Section 4 of the IRDAI Act 1999 specifies the authority's composition.

It is a ten-member body consisting of a chairman, five full-time and four part-time members appointed by the Government of India.

In September 2016, the authority was chaired by T. S. Vijayan and its full-time members were P. J. Joseph, Nilesh Sathe, V. R. Iyer, Pournima Gupte and D. D. Singh.

IRDA - Insurance Regulatory and Development Authority

Founded: 1999
Headquarter: Hyderabad, Telangana
Current Head: T. S. Vijayan (Chairman)

6)   Which of the following banks is not regulated by Reserve Bank of India?

a. State Bank of Sikkim
b. State Bank of Travancore
d. Axis
Answer  Explanation 

ANSWER: State Bank of Sikkim

State Bank of Sikkim is not regulated by Reserve Bank of India unlike other banks in India.

State Bank of Sikkim is a state-owned banking institution headquartered at Gangtok, Sikkim, India.

The Bank operates within the jurisdiction of the State of Sikkim and in addition to banking services, State Bank of Sikkim handles treasury functions of State Government of Sikkim.

State Bank of Sikkim

Founded: 1968
Headquarters: Gangtok Sikkim, India
Current Head: Mr. K.B. Chamling (Chairman)

7)   Which of the following banks has teamed up with Apollo to set up Asset Reconstruction Company (ARC)?

a. SBI
b. PNB
c. Axis
Answer  Explanation 


The country’s largest private lender ICICI Bank has teamed up with private equity major Apollo Global Management to launch an asset reconstruction company.

ICICI and Apollo have signed a memorandum of understanding to set up the ARC, which will acquire debt from lenders and take equity stakes in borrowers.


ICICI Bank (Industrial Credit and Investment Corporation of India) is an Indian multinational banking and financial services company headquartered in Mumbai, Maharashtra, India, with its registered office in Vadodara.

In 2014, it was the second largest bank in India in terms of assets and third in term of market capitalization.

It offers a wide range of banking products and financial services for corporate and retail customers through a variety of delivery channels and specialized subsidiaries in the areas of investment banking, life/non-life insurance, venture capital and asset management

  • ‘Best Retail Bank in India’ at the Asian Banker International Excellence in Retail Financial Services Awards 2016. ICICI Bank has won this award three years in a row.
  • Winner at the ‘Global Safety Awards 2016’ organized by the Energy and Environment Foundation. This award is sponsored by Ministry of Petroleum & Natural Gas and Ministry of Coal, Government of India.

  • ICICI Bank

    Founded: 1994
    Headquarters: Mumbai, Maharashtra
    Current Head: M. K. Sharma (Chairman), Mrs. Chanda Kochhar (MD & CEO)

8)   Who sponsors Regional Rural Banks?

a. Government of India
b. Reserve Bank of India
c. Nationalized Commercial Bank
d. None of these
Answer  Explanation 

ANSWER: Nationalized Commercial Bank

RRBs are sponsored by Nationalized Commercial Banks.

RRBs like any other commercial banks (PSBs or PVT sector banks) are governed by Banking Regulation Act, RBI Act and other guidelines issued by Ministry of Finance, Govt. of India.

Each RRB has a Board of Directors consisting of nine members headed by the Chairman, who generally belongs to the Sponsor Bank.

NABARD is responsible for overall supervision and inspection of the RRBs.

9)   When was the General Insurance Corporation of India incorporated?

a. 1971
b. 1972
c. 1973
d. 1993
Answer  Explanation 

ANSWER: 1972

The General Insurance Corporation of India (GIC) was incorporated on 22 November 1972 (under the Companies Act, 1956) as a private company limited.

General insurance business was nationalized by the Govt. of India through the General Insurance Business (Nationalization) Act (GIBNA) of 1972.

After the process of mergers, GIC was re-organized with four fully owned subsidiary companies:

National Insurance Company Limited,
New India Assurance Company Limited,
Oriental Insurance Company Limited,
United India Insurance Company.

GIC - General Insurance Corporation of India

Established: 22 November, 1972
Headquarters: Mumbai, India
Current Head: Alice Vaidyan (Chairman & Managing Director)

10)   Which of the following is merged with SEBI?

b. FMC
Answer  Explanation 


On 28 September 2015, the Forward Markets Commission (FMC) was merged with the Securities and Exchange Board of India (SEBI).
Securities and Exchange Board of India (SEBI) was first established in the year 1988 as a non-statutory body for regulating the securities market.

It became an autonomous body by The Government of India on 12 April 1992 and given statutory powers in 1992 with SEBI Act 1992.

The SEBI is managed by its members, which consists of following:

  • The chairman who is nominated by Union Government of India.
  • Two members, i.e., Officers from Union Finance Ministry.
  • One member from the Reserve Bank of India.
  • The remaining five members are nominated by Union Government of India, out of them at least three shall be whole-time members.
SEBI - Securities and Exchange Board of India

Founded: 12 April 1992
Headquarters: Mumbai, India
Current Head: U. K. Sinha (Chairman)

11)   PMJDY stands for ____?

a. Pradhan Mantri Janta Dhan Yojana
b. Pradhan Mantri Jan Dhan Yojana
c. Pradhan Mantri Jeevan Dhan Yojana
d. Pradhan Mantri Jal Dhan Yojana
Answer  Explanation 

ANSWER: Pradhan Mantri Janta Dhan Yojana

Pradhan Mantri Jan-Dhan Yojana is India's National Mission for Financial Inclusion to ensure access to financial services, namely Banking Savings & Deposit Accounts, Remittance, Credit, Insurance and Pension in an affordable manner.

This financial inclusion campaign was launched by the Prime Minister of India Narendra Modi on 28 August 2014.

Guinness World Records Certificate - "The most bank accounts opened in 1 week as a part of financial inclusion campaign is 18,096,130 and was achieved by Banks in India from 23 to 29 August 2014".

What it offers : A savings account with no minimum balance. The RuPay ATM-cum-debit card comes with in-built accident and life covers of Rs 1 lakh and Rs 30,000 respectively.

Eligibility : Anyone belonging to the economically weaker sections of society.

All those working in the unorganized sector, can transfer salaries directly into the accounts of your domestic staff to inculcate a banking habit in them.

12)   The Definition of ‘Banking’ is given in _______?

a. Negotiable Instrument Act, 1881
b. RBI Act, 1934
c. Banking Regulation Act, 1949
d. Indian Contract Act, 1872
Answer  Explanation 

ANSWER: Banking Regulation Act, 1949

Banking Regulation Act, 1949

As per Section 5(b) of the Banking Regulation Act, 1949, “banking” means accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdraw-able by cheque, draft, and order or otherwise.