MCQs for Banking Awareness - Set 3

1. What is the full form of CVV?
A. Credit Verification Value
B. Currency Verification Variable
C. Customer Verification Value
D. Card Verification Value
E. None of these

2. The selling of life assurance and other insurance products and services by banking institution is known as ____.
A. Insurance cover
B. Bancassurance
C. Protection cover
D.Assurance cover
E. None of these

3. In what denominations Commercial Paper (CP) can be issued?
A. Rs. 1 lakh
B. Rs. 2 lakh
C. Rs. 5 lakh
D. Rs. 10 lakh
E. None of these

4. What is the loan limit for education under priority sector for studies abroad?
A. Rs. 30 lakh
B. Rs. 25 lakh
C. Rs. 20 lakh
D. Rs. 15 lakh
E. Rs. 10 lakh

5. Foreign exchange Reserves in India are kept in the custody of ___.
A. Govt. of India
B. Finance Ministry
C. Reserve Bank of India
D. Overseas Ministry
E. SEBI

6.RBI declared which of the following as Domestic Systemically Important Banks (D- SIBs)?
A. SBI & HDFC
B. SBI & ICICI
C. ICICI & HDFC
D. SBI & BOB
E. SBI & PNB

7.A receipt listed in India and traded in rupees declaring ownership of shares of a foreign company:
A. Indian Depository Receipt (IDR)
B. Commercial Paper
C. Promissory Note
D. Indian Depository Revenue
E. None of these

8. What is the time limit for an asset or loan to be declared as Non-Performing Asset?
A. 30 days
B. 60 days
C. 90 days
D. 120 days
E. 150 days

9. Which among the following statements are correct/s in the context with Payment Banks?
A. The minimum paid-up capital requirement for payments banks is Rs. 100 crore
B. Payment banks will offer both deposits as well as loan products.
C. Payments banks will have to invest in government securities with a maturity of up to 1 year
D. Payments banks can open small savings accounts and accept deposits of up to Rs.1 lakh per individual customer.
(1) A, C, D (2) B, C, D
(3) A, B, C (4) A, B, D
(5) All are true

10. In MCLR, M stands for
 A. Marginal
B. Minimum
C. Maximum
D. Means
E. None


ANSWERS WITH EXPLANATION

1.(D) Full form of CVV is - "Card Verification Value" on your credit card or debit card is a 3 digit number on VISA, MasterCard etc.

2. (B) The selling of life assurance and other insurance products and services by banking institution is known as Bancassurance.

3.(C) Commercial Paper (CP) can be issued in denominations of Rs.5 lakh or multiples thereof. Commercial Paper (CP) is an unsecured money market instrument issued in the form of a promissory note.

4. (C) Loans to individuals for educational purposes including vocational courses upto Rs.10 lakh for studies in India and Rs. 20 lakh for studies abroad are included under priority sector.

5.(C) Foreign exchange Reserves in India are kept in the custody of Reserve Bank of India.

6.(B) The Reserve Bank of India (RBI) recently, designated State Bank of India (SBI) and ICICI Bank Ltd, the country’s two largest lenders, as Domestic Systemically Important Banks (D-SIBs). The banks have been named Domestic Systemically Important Banks (D-SIBs), with SBI falling in bucket three while ICICI Bank is in bucket one.

7.(A) A receipt listed in India and traded in rupees declaring ownership of shares of a foreign company is known as Indian Depository Receipt (IDR)

8.(C) A Non-performing asset (NPA) is defined as a credit facility in respect of which the interest and/or installment of Bond finance principal has remained ‘past due’ for a specified period of time. Once the borrower has failed to make interest or principle payments for 90 days the loan is considered to be a non-performing asset

9.(1) A, C, D The main objective of payment banks is to increase financial inclusion in the country via a primary focus on domestic payments services by providing small savings accounts. Note: Payments banks will be used only for transaction and deposits purposes. Unlike Small banks, payments banks cannot offer loan products to the customers.

10. (A) The marginal cost of funds based lending rate (MCLR) refers to the minimum interest rate of a bank below which it cannot lend, except in some cases allowed by the RBI. It is an internal benchmark or reference rate for the bank. MCLR actually describes the method by which the minimum interest rate for loans is determined by a bank

The MCLR methodology for fixing interest rates for advances was introduced by the Reserve Bank of India with effect from April 1, 2016. This new methodology replaces the base rate system introduced in July 2010.

MCQS for Banking Awareness -SET 2

1. In Deposits Account “KYC” (Know Your Customer) has been implemented in 2002 as per directive of –
A. IBA
B. RBI
C. Ministry of Finance
D.SEBI
E. IRDAA

2. Which of the following indexes used as the key measure of inflation in India?
A. Wholesale Price Index
B. Consumer Price Index
C. Sensex and Nifty
D. Interest rate offered by banks on deposits
E. None of these

3. With which of the following is SARFAESI Act 2002 related?
A. Recovery of bad loans
B. Regulation of foreign exchange
C. Fixation of interest rates
D. Acquisition of small banks
E. None of these

4. What is the full form of the term NDTL, as used in banking environment?
A Net Demand and Term Liability
B Net Demand and Time Liability
C Net Demand and Term Liquidity
D Net Demand and Time Liquidity
E None of the above

5. Which among the following committee constituted on Payment Banks license?
(A) Dr. Nachiket Mor
(B) R. Gandhi
(C) Anand Sinha
(D) Deepak Mohanty
(E) None of these

6. As per the Banking Ombudsman Scheme, any person can file a complaint before the Banking Ombudsman, if the satisfied reply is not received from the bank within a period of ____.
A. one month
B. three months
C. two months
D. six months
E. None

7. cheque is considered a valid cheque if the date entered on the cheque is within ______of the actual date on which it is presented.
A. 6 months
B. 3 months
C. 9 months
D. 1 months
E. None of these

8. Under Pradhan Mantri Jan-Dhan Yojana (PMJDY), the accidental insurance cover of _____will be provided to all the beneficiaries.
A. Rs.1.00 lac
B. Rs.2.00 lac
C. Rs.3.00 lac
 D. Rs.30,000
E. Rs.50,000

9. Treasury bills or T-bills, which are money market instruments, are short term debt instruments issued by ____.
A. Reserve Bank of India
B. Individual Banks
C. Government of India
D. IRDA
E. Corporate & Financial Institutions

10. is the rate at which banks borrow funds overnight from the Reserve Bank of India (RBI) against approved government securities.
A. CRR
B. SLR
C. Call Money
D. MSF
E. Repo Rate

ANSWERS WITH EXPLANATION 

1.(B) KYC means “Know Your Customer”. It is a process by which banks obtain information about the identity and address of the customers. KYC has been implemented in 2002 as per directive of Reserve Bank of India.

2.(B) The Central Bank of India (RBI) had adopted the new Consumer Price Index (CPI) as the key measure of inflation. Earlier, RBI had given more weightage to Wholesale Price Index (WPI) than CPI as the key measure of inflation for all policy purposes.

3.(A) The Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI) empowers Banks / Financial Institutions to recover their non-performing assets (bad loans) without the intervention of the Court.

4.(B) NDTL full form is - Net Demand and Time Liability
It is a sum of demand and time liabilities (deposits) of banks with public and other banks wherein assets with other banks is subtracted to get net liability of other banks. Deposits of banks are its liability and consist of demand and time deposits of public and other banks.

5. (A)Payment Banks applicant applications are analyzed and evaluated by an External Advisory Committee (EAC). The EAC Committee for Payment Banks is chaired by Dr. Nachiket Mor, Director, Central Board of the Reserve Bank of India.

6. (A) One can file a complaint before the Banking Ombudsman if the reply is not received from the bank within a period of one month after the bank concerned has received one s representation, or the bank rejects the complaint, or if the complainant is not satisfied with the reply given by the bank.

7. (B) A cheque is considered a valid cheque if the date entered on the cheque is within 3 months of the actual date on which it is presented. For example, a cheque with the date of 10th Jan 2015 will be valid if it is presented to the bank on or before 10th April 2015.

8. (A) Under Pradhan Mantri Jan-Dhan Yojana (PMJDY), the accidental insurance cover of Rs. 1 lakh will be provided to all the beneficiaries. Life insurance cover of Rs.30,000.

9. (C) Treasury bills or T-bills, which are money market instruments, issued by the Government of India and are presently issued in three tenors, namely, 91 day, 182 day and 364 day. Treasury bills are zero coupon securities and pay no interest.

10. (D) Marginal Standing Facility (MSF) is a new scheme announced by the Reserve Bank of India (RBI) in its Monetary Policy (2011-12) and refers to the penal rate at which banks can borrow money from the central bank over and above what is available to them through the LAF window.

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.