MCQs for Banking Awareness - SET 1

1. Union Government has launched a seven pronged plan called Indradhanush Mission to revamp
    functioning of ____.
   A. Primary Schools in Rural areas
  B. To boost Make in India initiative
 C. Public Sector Banks (PSBs)
 D. Handlooms sector in the country
 E. Tourism sector in the country

2. In CRAR, A stands for:
  A. Application
  B. Accounts
 C. Assets
 D. Annual
 E. Alternate

3. The Public Provident Fund is savings-cum-tax-saving instrument in India, introduced by the    National Savings Institute of the Ministry of Finance in 1968. What is the minimum amount to be invested in PPF account?

A. Rs. 100
B. Rs. 500
C. Rs. 1000
 D. Rs. 200
E. None of these

4. The transitional period for full implementation of Basel III Capital Regulations in India is extended upto?
A March 1, 2018
B March 31, 2019
C April 1, 2018
D April 30, 2018
E None of these

5. A Reserve Bank of India (RBI) committee has recommended conversion of Urban Cooperative Banks (UCBs) with business size of 20,000 crore rupees or more into regular banks. This recommendation was given by the High Powered Committee on UCBs headed by ___.
A. Deepak Mohanty
B. Urjit Patel
C. MB Shah
D. R Gandhi
E. None of these

6. The Reserve Bank of India advised banks to make the Know Your Customer (KYC) procedures mandatory while opening and operating the accounts. RBI has issued the KYC guidelines under Section 35 (A) of the ____.
A. Banking Regulation Act, 1949
B. RBI Act, 1934
C. Negotiable Instruments Act, 1881
D. Banking Regulation Act, 1935
E. Both A & B

7. India has become the second largest player in the China-led Asian infrastructure and Investment Bank (AIIB). What is India’s stake in the bank’s shares in AIIB?
A. 7.5%
B. 8.52%
C. 20.06%
D. 30.34%
E. 5.2%

8. A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of _____ years.
A. One
B. Two
C. Three
D. Four
E. Five

9. In CDR, “R” stands for ____.
A. Ratio
B. Receipt
C. Regulation
D. Restructuring
E. Reserve

10. What is the maximum deposit amount insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC)?
A. Rs. 10 lakh
B.Rs. 5 lakh
C.Rs. 1 lakh
D.Rs. 50,000
E. None

ANSWERS WITH EXPLANATION

1. C  
Union Government has launched a seven pronged plan called Indradhanush Mission to revamp functioning of public sector banks (PSBs). It was launched by Union Finance Minister Arun Jaitley in New Delhi.
The seven shades of Indradhanush mission include (i) appointments, (ii) Bank Board Bureau (BBB), (iii) capitalisation (iv) de-stressing PSBs, (v) empowerment, (vi) framework of accountability and (vii) governance reforms.

2. C
Assets (Capital to Risk Weighted Assets Ratio)
CRAR is the acronym for capital to risk weighted assets ratio, a standard metric to measure balance sheet strength of banks.

3. B
The minimum investment of Rs. 500 and the maximum amount is Rs. 1.5 lakh per annum.

4. (B)
The transitional period for full implementation of Basel III Capital Regulations in India is extended upto March 31, 2019, instead of as on March 31, 2018.

5. (D) The High Powered Committee on UCBs headed by RBI Deputy Governor R Gandhi.

6. (A) RBI has issued the KYC guidelines under Section 35 (A) of the Banking Regulation Act,    1949 and contravention of the same will attract the penalties under the relevant provisions of the act.

7. (B) Bank share - China has received a 30.34 percent stake in the bank’s shares; India and Russia have 8.52 and 7.5 percent respectively. Voting share - India has become the second largest player in the China-led Asian infrastructure and Investment Bank (AIIB), with a 7.5 percent voting share, while China and Russia gained 20.06 percent and 5.2% respectively.

8. (B) Dormant means inactive and inoperative means which is not being operated i.e. no transactions have been undertaken recently. In terms of RBI guidelines "A savings as well as current account should be treated as inoperative / dormant if there are no transactions in the account for over a period of two years".

9. (D) Corporate Debt Restructuring (“CDR”) mechanism is a voluntary non statutory mechanism under which financial institutions and banks come together to restructure the debt of companies facing financial difficulties due to internal or external factors, in order to provide timely support to such companies.

10. (C) Deposit Insurance and Credit Guarantee Corporation ( DICGC) is a subsidiary of Reserve Bank of India. DICGC insures all bank deposits, such as saving, fixed, current, recurring deposits for up to the limit of Rs. 100,000 of each deposits in a bank.