Banking Structure in India - Banking awareness questions on current affairs

Dear Readers, Welcome to Banking Awareness objective type questions (MCQ) with answers on Banking Structure in India. These questions on Banking Structure in India are useful for bank exams and interviews like IBPS, Bank PO, SBI PO, RRB, Specialist Officer, Clerk, SSC, UPSC etc.

Learn and prepare with these online practice test questions to crack Banking awareness section of any competitive exam.

1)   In which year was the Bank of Maharashtra established?
- Published on 17 Feb 17

a. 1937
b. 1935
c. 1934
d. 1949
Answer  Explanation 

ANSWER: 1935

BoM was established in the year 1935.

Bank of Maharashtra is a major public sector bank in India.

Government of India holds 81.61% of the total shares.

It has largest network of branches by any public-sector bank in the state of Maharashtra

BoM - Bank of Maharashtra

Founded : 1935; 81 years ago
Headquarter : Pune, India
Current Head : Ravindra Prabhakar Marathe (Chairman & MD)

2)   Name the micro finance company that becomes the first to start operation as a commercial bank?
- Published on 17 Feb 17

a. Pay Tm Bank
b. Vodafone m-Pisa Bank
c. Yes Bank
d. Bandhan Bank
Answer  Explanation 

ANSWER: Bandhan Bank

Bandhan Bank Ltd. is an Indian banking and financial services company headquartered in Kolkata, West Bengal. Bandhan, which started as a micro-finance company in 2001.

Bandhan received the in-principle approval of the (RBI) for setting up a universal bank in April 2014.

Kolkata-headquartered Bandhan is the first bank to be set up in eastern part of India after Independence.

Bandhan Financial Holdings is owned by Bandhan Financial Services Limited (BFSL), the largest micro finance organization in India.

Bandhan Bank

Tag-line : Aapka Bhala, Sabki Bhalai
Founded : 2001
Headquarter : Kolkata, West Bengal
Current Heads : Ashok Lahiri (Chairman), Chandra Shekhar Ghosh (MD, CEO)

3)   Of the 11 companies that were given in-principle nod by the Reserve Bank of India (RBI) to set up payments banks in August, 2015, three have already dropped out. Which among the following company has dropped out?
- Published on 17 Feb 17

a. Airtel Money
b. Tech Mahindra
c. PayTm
d. Vodafone mPesa
Answer  Explanation 

ANSWER: Tech Mahindra

Of the 11 companies that were given in-principle nod by the Reserve Bank of India (RBI) to set up payments banks in August, 2015, three companies - Tech Mahindra, Cholamandalam Finance and Dilip Shanghvi-IDFC Bank-Telenor JV have dropped out.

This leaves only eight applicants - India Post, Airtel Money, Reliance Industries, PayTm (Vijay Shekhar Sharma), Aditya Birla Nuvo, Vodafone MPesa, Fino PayTech and NSDL.

Payments Bank :

Payments banks are a new model of banks conceptualized by the Reserve Bank of India (RBI).

  • These banks can accept a restricted deposit which is currently limited to INR 1 lakh per customer and may be increased further.
  • These banks cannot issue loans and credit cards.
  • Payments banks can issue services like ATM cards, debit cards online banking and mobile banking.
Regulations -
  • The minimum capital requirement is Rs. 100 crores.
  • For the first five years, the stake of the promoter should be 40% minimum.
  • The voting rights will be regulated by the Banking Regulation Act, 1949. The voting right of any shareholder is capped at 10%, which can be raised to 26% by Reserve Bank of India.
  • Any acquisition of more than 5% will require approval of the RBI.

4)   The headquarters of Bank of Maharashtra is in Pune. Where is the head office of Andhra Bank?
- Published on 17 Feb 17

a. Hyderabad
b. Bangalore
c. Manipal
d. Mangalore
Answer  Explanation 

ANSWER: Hyderabad

Andhra Bank has its headquarters in Hyderabad, India.

Andhra Bank is a medium-sized public sector bank (PSB) of India.

The Government of India owns 63.97% of its share capital as on 31 Dec 2015.

The state-owned Life Insurance Corporation of India holds 7.66% of the shares.

Andhra Bank is a pioneer in introducing Credit Cards in the country in 1981.

Andhra Bank has ranked No.1 in terms of number of Life Insurance Policies mobilized amongst all the agency banks dealing with the Life Insurance Corporation of India.

The bank also has tie-up with United India Insurance Company Limited under Bancassurance (Non-Life)

Andhra Bank

Founded : 20 November 1923; 93 years ago
Headquarter : Hyderabad
Current Head : Suresh N Patel (MD & CEO)

5)   Which bank was the sponsor of Prathama Gramin Bank?
- Published on 17 Feb 17

a. Bank of Baroda
b. Indian Bank
c. Punjab National Bank
d. Syndicate Bank
Answer  Explanation 

ANSWER: Syndicate Bank

Syndicate Bank sponsored the first regional rural bank in India by name Prathama Bank, in Moradabad district Uttar Pradesh on 2 October 1975.

Presently, the bank is sponsoring 3 RRBs and all are profit making having total business of Rs.42101 crore with 1348 branches as on 31.03.2015.

  • Prathama Bank
  • Karnataka Vikas Grameena Bank
  • Andhra Pragathi Grameena Bank
Syndicate Bank is one of the oldest and major commercial banks of India.

It was founded by T. M. A. Pai, Upendra Pai and Vaman Kudva.

At the time of its establishment, the bank was known as Canara Industrial and Banking Syndicate Limited.

The Bank is headquartered in Manipal, Karnataka, India.

Syndicate Bank

Founded : 1925; 91 years ago, (as Canara Industrial and Banking Syndicate Limited)
Headquarter : Manipal, Karnataka, India
Current Head : Shri Arun Srivastava (MD & CEO)

6)   Reserve Bank of India (RBI) recently granted an in-principle license to ________ entities for setting up small finance banks.
- Published on 17 Feb 17

a. 11
b. 10
c. 12
d. 2
Answer  Explanation 


The Reserve Bank of India (RBI) recently granted an in-principle nod to 10 entities for setting up small finance banks.

The 10 entities that received the nod for small banks include -

  • Au Financiers (Jaipur)
  • Capital Local Area Bank (Jalandhar)
  • Disha Microfin (Ahmedabad)
  • Equitas Holdings (Chennai)
  • ESAF Microfinance and Investments (Chennai)
  • Janalakshmi Financial Services (Bengaluru)
  • RGVN (Northeast) Microfinance (Guwahati)
  • Suryoday Micro Finance (Navi Mumbai)
  • Ujjivan Financial Services (Bengaluru)
  • Utkarsh Micro Finance (Varanasi)
In a way, there are like commercial banks because both provide the saving and lending facility, however, small banks must follow stricter regulations as proposed by RBI.
  • 75% of its Adjusted Net Bank Credit (ANBC) should be advanced to the priority sector.
  • Maximum loan size to a single person cannot exceed 10% of total capital funds; cannot exceed 15% in the case of a group.
  • Minimum paid-up equity capital requirement of Rs 100 crore.
  • A fundamental requirement is that it must have 25% of its branches set up in unbanked areas.

7)   What is the full-form of NBFC?
- Published on 16 Feb 17

a. Non-Bank Financial Competition
b. Non-Bank Foreign Company
c. Non-Banking Financial Company
d. Non-Banking Finance Corporation
Answer  Explanation 

ANSWER: Non-Banking Financial Company

NBFC - A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 2013 of India, engaged in the business of loans and advances, acquisition of shares, stock, bonds hire-purchase, insurance business or chit business.

The working and operations of NBFCs are regulated by the Reserve Bank of India (RBI).

Types of NBFCs in India are -

  • Asset Finance Company (AFC)
  • Investment Company (IC)
  • Loan Company (LC)
  • Infrastructure Finance Company (IFC)
  • Infrastructure Debt Fund : Non- Banking Financial Company (IDF-NBFC)
  • Gold Loan NBFCs in India
  • Residuary Non-Banking Companies (RNBCs)

8)   What is the share of Foreign Banks in total branch network in India?
- Published on 16 Feb 17

a. Less than 1%
b. More than 5%
c. Around 4%
d. Around 3.2 %
Answer  Explanation 

ANSWER: Less than 1%

The Foreign banks account for less than 1% of total branch network in India.
These banks are registered and have their headquarters in a foreign country but operate their branches in our country.

Some of the foreign banks operating in our country are -

  • Hong Kong and Shanghai Banking Corporation (HSBC)
  • Citibank
  • American Express Bank
  • Standard Chartered Bank etc.
The number of foreign Banks operating in our country has increased since the financial sector reforms of 1991.

9)   Who insures banks in India?
- Published on 16 Feb 17

Answer  Explanation 


Deposit Insurance and Credit Guarantee Corporation (DICGC) insures the banks in India.

  • Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of Reserve Bank of India.
  • It was established on 15 July 1978 under Deposit Insurance and Credit Guarantee Corporation Act, 1961 for providing insurance of deposits and guaranteeing of credit facilities.
  • DICGC insures all bank deposits, such as saving, fixed, current, recurring deposits for up to the limit of Rs. 100,000 of each deposit in a bank.
DICGC - Deposit Insurance and Credit Guarantee Corporation

Founded : 15 July 1978
Headquarter : Mumbai, Maharashtra
Current Head : Shri N.S. Vishwanathan (Chairman - DICGC)

10)   How many developments banks are there in India?
- Published on 16 Feb 17

a. 5
b. 6
c. 7
d. 8
Answer  Explanation 


There are six development banks are there in India.

They are :

  • ICICI - Industrial Credit and Investment Corporation of India
  • IDBI - Industrial Development Bank of India
  • SIDBI - Small Industries Development Bank of India
  • EXIM Bank - Export-Import Bank of India
  • NHB - National Housing Bank
  • NABARD - National Bank for Agriculture and Rural Development
The National Development Bank is a finance institution, created by a country's government, that provides financing for the purposes of economic development of the country.
  • Provides Long and Short Term Loans
  • Helps in Providing economic growth of the country
  • Provides finance to new business
  • It works on various fields such as agriculture, housing and other sectors
  • It does not accept deposits

1 2