Set 27 – Banking General Awareness Quiz for SBI IBPS Bank PO/Clerk

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  1. RBI’s open market operative transactions are carried out with a view to regulate :
    (1) Liquidity in the economy
    (2) Prices of essential commodities
    (3) Inflation
    (4) Borrowing power of banks
    (5) All of the above

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    Solution :    5
    The Reserve Bank of India is the central bank of the country. Central banks are a relatively recent innovation and most central banks, as we know them today, were established around the early twentieth century.
  2. Tight money and credit policy will cause bond prices to :
    (1) Fall
    (2) Increase
    (3) No change
    (4) Withdrawn
    (5) None of these

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    Solution :     1
    A situation in which money or loans are very difficult to obtain in a given country. If you do have the opportunity to secure a loan, then interest rates are usually extremely high. Also known as “dear money”.
  3. Payment of cheque cannot be made on a cash counter of bank, if the cheque is:
    (1) Bearer
    (2) Cross
    (3) Order
    (4) All of the above
    (5) None of the above

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    Solution:  2
    A cross cheque is a cheque which is payable only through a collecting banker and not directly at the counter of the bank.
  4. During ……………………. a person does not need to pay interest change.
    (1) Free debit period
    (2) Free credit period
    (3) Interim period
    (4) Either 1 or 3
    (5) None of these

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    Solution :    2
    The free credit period is associated with credit. This period can be extended to 52 days. A person does not need to pay interest charges during this period, if he / she has made the full payment of his/her does.
  5. Which of the following is not a banking related term?
    (1) Radiation
    (2) Outstanding amount
    (3) Benchmark prime lending rate
    (4) Explicit guarantee
    (5) Creditors

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    Solution : 1
    The emission of energy as electromagnetic waves or as moving subatomic particles, especially high-energy particles which cause ionization.
  6. Which one of the following is not a monetary tool of RBI?
    (1) Reverse Repo Rate
    (2) SLR
    (3) Inter Bank Rate
    (4) Repo Rate
    (5) Other than those given as options

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    Solution :    3

  7. Stagflation implies a case of:
    (1) Galloping inflation
    (2) Recession plus inflation
    (3) Adverse balance of trade
    (4) Rising wages an employment
    (5) None of those

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    Solution : 4
    In economies, stagflation is a situation in which the inflation rate is high, the economic rate slows down and unemployment remains steadily high.
  8. whose signature does the one rupee note bear?
    (1) Prime Minister of India
    (2) President of India
    (3) Finance Minister of India
    (4) Finance Secretary of India
    (5) None of these

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    Solution :    4
    Under Section 22 of the Reserve Bank of India Act, RBI has sole right to issue currency notes of various denominations except one rupee notes. The One Rupee note is issued by Ministry of Finance and it bears the signatures of Finance Secretary, while other notes bear the signature of Governor RBI.
  9. …………..controls the money supply in a country.
    (1) Money lenders
    (2) Central bank
    (3) Private bank
    (4) Government policy
    (5) None of these

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    Solution :    2
    Central bank controls the money supply in a country. The Reserve Bank of India is central bank of India.
    Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
  10. The cause of inflation is:
    (1) Increase in money supply
    (2) Fall in production
    (3) Increase in money supply and fall in production.
    (4) Decrease in money supply and fall in production.
    (5) None of these

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    Solution :    3
    Inflation is defined as a sustained increase in the general level of prices for goods and services. It is measured as an annual percentage increase. As inflation rises, every dollar you own buys a smaller percentage of a good or service.
  11. Ten rupee note bears the signature of:
    (1) President
    (2) Finance Minister
    (3) Secretary, Ministry of Finance
    (4) Governor, Reserve Bank of India
    (5) None of these

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    Solution :    4

  12. Bank rate means:
    (1) Interest rate charged by scheduled banks
    (2) Official rate of interest charged by the Central bank of a country
    (3) Rater of profit of the banking institutions
    (4) Interest rate charged by money lenders
    (5) None of these

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    Solution :    2
    Bank rate, also referred to as the discount rate, is the rate of interest wbich a central bank charged on the loans and advances to a commercial bank
  13. If the reserve ratio is lowered by the central bank, what will be its effect on credit creation?
    (1) It will decrease
    (1) It will decrease
    (2) It will increase
    (3) There will be no charge
    (4) There will be a minimum charge
    (5) None of these

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    Solution :    2
    The commercial banks are the second most important source of money supply, the money that commercial banks supply is called credit money.
  14. The basic regulatory authority for mutual funds and stock markets lies with the:
    (1) Government of India
    (2) Reserve bank of India
    (3) Securities and Exchange Board of India
    (4) Stock exchanges
    (5) None of these

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    Solution :    3
    SEBI has to be responses to the needs of three
    groups, which constitute the market.
    – the issuer of securities
    – the investors
    – the market intermediaries
  15. A currency whose exchange rate tends to fall because of persistent balance of payment deficit is known as:
    (1) Soft currency
    (2) Hard currency
    (3) Sinking currency
    (4) Gold currency
    (5) None of these

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    Solution :    1
    A currency with a value that fluctuates as a result of the country’s political or economic uncertainty. As a result of this currency’s instability, foreign exchange dealers tend to avoid it.
  16. The …………..provides export credit insurance support to Indian exporters and is controlled by the ministry of commerce.
    (1) EXIM bank
    (2) Ministry of commerce
    (3) Axis bank
    (4) ECGC
    (5) None of these

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    Solution :    4
    The ECGC Limited (Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce.
  17. International Monetary Fund established the poverty reduction growth facility to help the countries.(1) Low income
    (2) Developed
    (3) Asian
    (4) Developing
    (5) None of these

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    Solution :    1
    The International Monetary Fund (IMF) is an organization of 188 countries, working to foster global monetary cooperation, secure financial stability, facilitate international trade, promote high employment and sustainable economic growth, and reduce poverty around the world.
  18. Which is the capital of Maldives?
    (1) Baghdad
    (2) Kuwait city
    (3) Male
    (4) Tokyo
    (5) None of these

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    Solution :    3
    For others:
    Baghdad is the capital of Iraq.
    Kuwait city is the capital of Kuwait.
    Tokyo is the capital of Japan.
  19. Which of the following is not the part of prudential guidelines issued by RBI?
    (1) Provisioning
    (2) Loan recovery rules
    (3) Asset classification
    (4) Income recognition
    (5) None of these

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    Solution :    2
    Loan recovery rules are not the part of prudential guidelines issued by RBI.
  20. An Asset management company is promoted for which of the following purposes?
    (1) To manage the asset of insurance company
    (2) To manage the funds of mutual fund
    (3) To manage the loan taken from other banks
    (4) To manage the assets of NBFCs
    (5) None of these

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    Solution :    2
    An asset management company is promoted to manage the funds of a mutual fund. Mutual funds, hedge funds and pension plans, all are run by asset management companies.

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