Set 13 - Banking General Awareness Quiz for SBI IBPS Bank PO/Clerk

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  1. Which of the following business is prohibited as per Section 8 of Banking Regulation Act, 1949 ?
    (1) Trading
    (2) Leasing
    (3) Under writing
    (4) Executing trust
    (5) None of these

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    Answer  : 1
    Section 8 specifically prohibits a bank from engaging in trading. However, banks, as agents, have supplied registers, articles or have financed hire purchase. What is important is that the purchases should be carried out purely on indent basis; bank must have no ownership of the article and it should not involve bank's own funds. Immovable property, howsoever acquired, shall, except such as is required for its own use, be disposed of within 7 years. Reserve Bank of India (RBI) may extend the period if it is in the interest of the depositors.
  2. Which of the following is a non-depository institution ?
    (1) Regional Rural Banks
    (2) Mutual Funds
    (3) Credit Unions
    (4) Commercial Banks
    (5) None of these

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    Answer  : 2
    Non-Depository institutions perform a variety of functions other than direct bariking with the customers. All together they support the financial system of a country. The following are the common types of non-depository institutions :
    • Mutual Funds
    • Broking Firms
    • Pension Funds
    • Insurance Companies
  3. State Bank of India's new floating rate is directly linked to :
    (1) Base rate
    (2) BPLR
    (3) Bank rate
    (4) Inflation rate
    (5) None of these

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    Answer  : 1
    The Base rate includes all those elements of the lending rate that are common across all categories of borrowers. Banks are allowed to determine their actual lending rates on loans and advances with reference to the Base Rate and by including such other customer specific
    charges as considered
    appropriate.
  4. Issuing credit cards is a component of :
    (1) Micro Finance
    (2) Corporate Banking
    (3) Retail Banking
    (4) Rural Banking
    (5) None of these

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    Answer  : 3
    Credit card - Retail Banking. A small plastic card issued by a bank, building society, etc., allowing the holder to purchase goods or services on credit.
  5. The credit policy of a bank does not deal with :
    (1) Documentation standards
    (2) Outstanding balance in deposit account
    (3) Credit risk management
    (4) Renew and renewal advances
    (5) None of these

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    Answer  :  2
  6. Which of the following is the deadline set by RBI for banks to complete their confirmation to the Basel- II norms ?
    (1) March 2018
    (2) March 2020
    (3) March 2016
    (4) March 2021
    (5) None of these

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    Answer  :   3
    Basel II is an international business standard that requires financial institutions to maintain enough cash reserves to cover risks incurred by operations. The Basel accords  are a series of  recommendations on banking laws and regulations issued by the Basel Committee on Banking Supervision (BCBS).
  7. Sub-prime lending refers to :
    (1) the customers who are most valued for the banks
    (2) the people with less than standard credit status
    (3) the customers who visit bank for the first time
    (4) the people who live substandard life
    (5) None of these

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    Answer  : 2
    In finance, subprime' lending (also referred to as near-prime, non-prime, and second-chance lending) means making loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks such as unemployment, divorce, medical emergencies, etc.
  8. A loan bearing low rate of interest is known as :
    (1) Hard loan
    (2) High loan
    (3) Close loan
    (4) Soft loan
    (5) None of these

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    Answer  :  4
    A loan bearing low rate of interest is called soft loan. A soft loan is a loan with a below-market rate of interest. This is also known as soft financing. Sometimes soft loans provide other concessions to borrowers, such as long repayment periods or interest holidays. Soft loans are usually provided by  governments to projects they think are worthwhile. The World Bank and other development institutions provide soft loans to developing countries.
  9. Devaluation means :
    (1) To reduce the value of home currency
    (2) To increase the value of home currency
    (3) To issue new currency in place of old
    (4) To lower the price of goods for export
    (5) None of these

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    Answer  : 1
    Devaluation : To reduce the value of home currency. Devaluation means official lowering of the value of a country's currency within a fixed exchange rate system, by which the monetary authority formally sets a new fixed rate with respect to a foreign reference currency.
  10. Which of the following is not directly controlled by RBI ?
    (1) CRR
    (2) SLR
    (3) Base rate
    (4) Repo rate
    (5) None of these

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    Answer  :  3
  11. Currency swap is an instrument to manage :
    (1) cash flows only in one currency
    (2) currency and Interest rate risk
    (3) currency risk
    (4) cash flow in different currencies
    (5) None of these

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    Answer  : 4
    Currency swap is an instrument to manage cash flow in different currencies. A currency swap is a foreign-exchange agreement between two institutions to exchange aspects (namely the principal and/or interest payments) of a loan in one currency for equivalent aspects of an equal in net present value loan in another currency; see foreign exchange derivative.
  12. When the loan is guaranteed for purchase of white goods, it is called :
    (1) White loan
    (2) Pure loan
    (3) Consumer durable loan
    (4) Secure loan
    (5) None of these

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    Answer  :  3
  13. Banks are required to take permission on from which of the following before opening new branch ?
    (1) Reserve Bank of India
    (2) SeCurities and Exchange Board of India
    (3) Indian Bank Association
    (4) Planning Commission of India
    (5) None of these

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    Answer  : 1
  14. Which of the following is the Major function of an ATM installed by bank ?
    (1) To transfer money from one place to another
    (2) To distribute cash by way of withdrawl from-ones account
    (3), To detect fake currency notes
    (4) To arrange currency notes in serial order
    (5) None of these

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    Answer  : 2
  15. Which of the following agencies is associated with the business of insurance sector as a regulator ?
    (1) SEBI
    (2) RBI
    (3) NABARD
    (4) IRDA
    (5) None of these

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    Answer  :  4
    IRDA - Insurance Regulatory Development Authority.
    Insurance Regulatory and Development Authority of India (IRDA) is an autonomous apex statutory body which regulates and develops the insurance industry in India.
  16. Which of the following is a private sector bank based in India ?
    (1) Loyds Banking Group
    (2) Royal Bank
    (3) Yes Bank
    (4) Lehman Brothers
    (5) None of these

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    Answer  : 3
    Yes bank is private commercial bank in India. The headquarters of this bank is located in Mumbai.
  17. Banks don't provide which of the following service ?
    (1) Insurance products
    (2) Depositing money
    (3) Locker for valuable items
    (4) Sale of post card
    (5) None of these

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    Answer  :  4
  18. Which of the following describes the appropriate Fiscal Policy ?
    (i) Increase in capital forming
    (ii) Obtaining the required employment level
    (iii) Obtaining the consumption level
    (1) Only (i)
    (2) Only (ii) and (iii)
    (3) Only (iii) and (iv)
    (4) All of the above
    (5) None of the above

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    Answer  : 1
    Fiscal policy is the means by which a government adjusts its spending levels and tax rates to monitor and influence a nation's economy. It is the sister strategy to monetary policy through which a central bank influences a nation's money supply.
  19. What is to be called to the formal system of making trade agreements with the groups of countries ?
    (1) Trading block
    (2) Trade ventures
    (3) Trade partners
    (4) Trade organizations
    (5) None of these

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    Answer  : 1
    A trade block is a type of intergovernmental agreement, often part of a regional intergovernmental
    organization, where regional barriers to trade, (tariffs and non-tariff barriers) are reduced or eliminated among the participating states.
  20. For which of the following reasons, the government intends that the RBI should observe strictly the judicious standard for NBFC ?
    (1) It is as per needs of Basel-I or II
    (2) To lessen the current funds in the market
    (3) It is in accordance with the instruction of the Bank of International Settlement (BIS)
    (4) To save NBFCs with effects of the probable economic recession
    (5) None of these

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    Answer  :  3
    A Non-Banking Financial Company (NBFC) is a company
    (i) registered under the Companies Act, 1956,
    (ii) its principal business is lending, investments in various types of shares/ stocks/ bonds/debentures/
    securities, leasing, hire-purchase, insurance business, chit business, and
    (iii) its principal business is receiving deposits

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