Banking Awareness Test Set 4

1)   Which was the first bank to be established in India?

a. Bank of Calcutta
b. Bank of Hindustan
c. General Bank of India
d. State Bank of India
Answer  Explanation 

ANSWER: Bank of Hindustan

Bank of Hindustan was established in 1770.

2)   Where is NDB headquartered?

a. Beijing
b. Chengdu
c. Hong Kong
d. Shanghai
Answer  Explanation 

ANSWER: Shanghai

The New Development Bank is multilateral development bank. It is operated by BRICS states (Brazil, Russia, India, China and South Africa).

3)   How many Deputy Governors are there in RBI?

a. 2
b. 4
c. 5
d. 10
Answer  Explanation 


The general superintendence and direction of the RBI is entrusted with the 21-member Central Board of Directors. They are the Governor, 4 Deputy Governors, 2 Finance Ministry representatives, 10 government-nominated directors, and 4 directors to represent local boards headquartered at Mumbai. Kolkata, Chennai and New Delhi.

4)   What is the full form of MTSS?

a. Money Transfer Service Scheme
b. Medium Transfer Service Scheme
c. Moderate Transfer Service Scheme
d. Money Transfer Service Strategy
Answer  Explanation 

ANSWER: Money Transfer Service Scheme

Money Transfer Service Scheme (MTSS) is a quick and easy way of transferring personal remittances from abroad to beneficiaries in India.

5)   How many digits are there in IFSC Code?

a. 10
b. 11
c. 12
d. 13
Answer  Explanation 


The Indian Financial System Code (IFSC) is a 11 character code for identifying the bank and branch which holds the account. The IFSC code is used by the NEFT, RTGS and IMPS finance transfer systems.

6)   Which among the following is the act of taking on a risk for a fee?

a. Guidewire
b. Initial Public Offering
c. Predictive analytics
d. Underwriting
Answer  Explanation 

ANSWER: Underwriting

Underwriting is provided by a bank, insurer or investment house.

7)   What is the full form of NDTL?

a. New Demand & Tenure Liabilities
b. Net Demand & Time Liabilities
c. National Deposits & Total Liquidity
d. Net Demand & Tax Liabilities
Answer  Explanation 

ANSWER: Net Demand & Time Liabilities

The Cash Reserve Ratio of scheduled banks is fixed at a certain percentage of their NDTL.

8)   Which is the largest foreign bank in India?

a. American Express Bank Ltd.
b. DBS Bank Ltd.
c. HSBC Ltd.
d. Standard Chartered Bank
Answer  Explanation 

ANSWER: Standard Chartered Bank

Standard Chartered Bank have been operating in India since 1858.

9)   Which bank started the first RRB named Prathama Grameen Bank?

a. Punjab National Bank
b. State Bank of India
c. Syndicate Bank
d. United Bank of India
Answer  Explanation 

ANSWER: Syndicate Bank

The bank was known as Canara Industrial and Banking Syndicate Limited at the time of establishment.

10)   When did the Reserve Bank of India notify the draft regulations relating to the Credit Information Companies (Regulation) Act, 2005?

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

ANSWER: April 5, 2006

The Reserve Bank of India (RBI) notified the draft regulations relating to the Credit Information Companies (Regulation) Act, 2005 on April 5, 2006. Among the major features of the regulations is the inclusion of stock brokers and telecommunication companies in the category of 'specified users' of services of credit information companies. It is expected that there will be a boost to the development of credit, based on a more reliable information base, once the regulations are finalised.

11)   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.

12)   Which of the following are the amounts owed to a company that are not going to be paid?

a. Bad debts
b. Non-performing Assets
c. Out of order accounts
d. Overdrawn accounts
Answer  Explanation 

ANSWER: Bad debts

The bad debts associated with accounts receivable is reported on the income statement as Bad Debts Expense or Uncollectible Accounts Expense.

13)   Which of the following defines 'Para Banking' services?

a. Eligible financial services rendered by banks
b. Services provided through business correspondents
c. Services provided to armed forces personnel
d. Utility services provided by banks
Answer  Explanation 

ANSWER: Utility services provided by banks

Para Banking activities that a bank normally involves are Global Debit Card, Global Credit Card, Bancassurance, Life insurance products, Non life insurance products, cash management.

14)   Which among the following is incorrect?

a. RBI is the Bank of Issue
b. RBI acts as Banker to the Government
c. RBI is Banker's Bank
d. RBI does not regulate the flow of credit
Answer  Explanation 

ANSWER: RBI does not regulate the flow of credit

The Reserve Bank of India, as the central bank of the country, regulates the flow of credit.

15)   Under which sector will banking sector fall?

a. Agricultural sector
b. Industrial sector
c. Service sector
d. None of the above
Answer  Explanation 

ANSWER: Service sector

No explanation is available for this question!

16)   What does crossing of cheques make them?

a. Invalid document
b. Ineligible to endorse to a person other than the payee
c. Remain the same
d. Ineligible to get cash across the bank counter
Answer  Explanation 

ANSWER: Ineligible to endorse to a person other than the payee

Crossing ensures security to the holder of the cheque.

17)   When was the first Land Mortgage Bank established?

a. 1920
b. 1925
c. 1931
d. 1935
Answer  Explanation 

ANSWER: 1920

The Land Development Banks grant medium term loan for Land Development against the mortgage of lands. In some states these banks are known as Land Mortgage Banks. Land Mortgage Bank provides long term credit against the security of mortgage of land for a period of 5 to 20 years. The main objective of Land Development Bank is providing investment credit for agriculture.

18)   What is the full form of SWIFT?

a. Safe Window for Interbank Financial Transactions
b. Safe Window In case of Financial Transaction
c. Society for Worldwide Interbank Financial Telecommunication
d. Safe Window Institute For Transactions
Answer  Explanation 

ANSWER: Society for Worldwide Interbank Financial Telecommunication

The Society for Worldwide Interbank Financial Telecommunication provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.

19)   What is 'fiat money'?

a. The currency backed by Government Guarantee
b. The currencybacked by tangible assets
c. The currency backed by gold reserves
d. The currency backed by budgetary support
Answer  Explanation 

ANSWER: The currency backed by Government Guarantee

A fiat-money currency generally loses value once the issuing government or central bank either loses the ability to or refuses to further guarantee its value.

20)   Which of the following is known as a Savings Bank Account opened with a commercial bank with zero balance or very minimal balance?

a. Current Account
b. No frill account
c. Savings Bank-ordinary Account
d. Students Savings Bank Account
Answer  Explanation 

ANSWER: No frill account

No explanation is available for this question!

21)   Which of the following is a set of United State statutes added as Title VIII of the Consumer Credit Protection Act?

Answer  Explanation 


The Fair Debt Collection Practices Act (FDCPA) was approved on September 20, 1977.

22)   Which of the following is the Federal regulatory agency that charters and supervises Federal credit unions?

b. ARC
c. CAG
Answer  Explanation 


NCUA stands for National Credit Union Administration.

23)   Which is the first Indian bank that started solely with Indian capital investment?

a. Canara Bank
b. Central Bank of India
c. Punjab National Bank
d. State Bank of India
Answer  Explanation 

ANSWER: Punjab National Bank

It was founded in 1894.

24)   Who was the first Indian Governor of RBI?

a. C. D. Deshmukh
b. Benegal Rama Rau
c. R. K. Shanmukham Chetty
d. K. G. Ambegaonkar
Answer  Explanation 

ANSWER: C. D. Deshmukh

Sir Chintaman Dwarakanath Deshmukh was the first Indian to be appointed as the Governor of the Reserve Bank of India in 1943 by the British Raj authorities.

25)   Which country started first plastic notes?

a. Afghanistan
b. Argentina
c. Australia
d. Austria
Answer  Explanation 

ANSWER: Australia

The Reserve Bank of Australia released the world's first long lasting and counterfeit resistant polymer (plastic) banknotes in 1988.

26)   Whose signature does Indian currency note bear?

a. Finance Minister
b. Finance Secretary
c. RBI Governor
d. The President
Answer  Explanation 

ANSWER: RBI Governor

The Reserve Bank derives its role in currency management from the Reserve Bank of India Act, 1934.

27)   Which bank launched smart star account?

a. HDFC Bank
c. ICICI Bank
d. IDBI Bank
Answer  Explanation 


It is a savings account that can be opened and operated by minors above 10 years of age.

28)   What is the term for recession occurring two times with a small gap in between?

a. Deep Recession
b. Deflation
c. Double-dip Recession
d. Double Inflation
Answer  Explanation 

ANSWER: Double-dip Recession

A "double-dip recession" is also referred to as a "W-shaped" recession.

29)   Which was the first bank to introduce ATM in India?

b. Standard Chartered Bank
c. State Bank of India
d. United Bank of India
Answer  Explanation 


Hongkong and Shanghai Banking Corporation introduced ATM in 1987.

30)   Which movement encouraged the formation of commercial banks?

a. Swadeshi movement
b. Quit India Movement
c. Non Cooperation Movement
d. Civil Disobedience Movement
Answer  Explanation 

ANSWER: Swadeshi movement

Swadeshi movement encouraged the formation of a number of commercial banks.

31)   What is the new limit of reduction of health insurance premium for people as announced in the Budget 2015-16?

a. 15000
b. 20000
c. 22000
d. 25000
Answer  Explanation 

ANSWER: 25000

The limit of reduction of health insurance premium was enhanced from Rs 15,000 to Rs 25,000. For senior citizens. This limit has been increased from Rs 20,000 to Rs 30,000.

32)   What is the new transport allowance announced for salaried people as per the Budget 2015-16?

a. 800
b. 1200
c. 1600
d. 2000
Answer  Explanation 

ANSWER: 1600

The transport allowance for salaried, which currently stands at Rs 800 per month was increased to Rs 1,600 per month.

33)   What percentage change was proposed in the rate of personal income tax as announced in the budget 2015-16?

a. 1%
b. 0.5%
c. 2.5%
d. No Change
Answer  Explanation 

ANSWER: No Change

However government proposed to levy a surcharge at the rate of 12% on individuals, HUFs, AOPs, BOIs, artificial juridical persons, firms, cooperative societies and local authorities having income exceeding Rs 1 Crore.

34)   What is the GDP growth projected in the 2015-16?

a. 8-8.5%
b. 9-9.7%
c. 8-9%
d. 7.7 to 8.5%
Answer  Explanation 

ANSWER: 8-8.5%

No explanation is available for this question!

35)   ‘Amrut Mahotsava’ would be celebrated in the year _____.

a. 2017
b. 2022
c. 2030
d. 2018
Answer  Explanation 

ANSWER: 2022

The year 2022 will be celebrated as the Amrut Mahotsav as it would be the occasion of 75th year of India's Independence.