Set 28 – Banking General Awareness Quiz for SBI IBPS Bank PO/Clerk

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  1. The primary monetary policy technique employed by the Reserve Bank of India is :
    (1) Reserve Requirements
    (2) Open market operations
    (3) Discount policy
    (4) Margin requirements
    (5) None of these

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    Solution :    2
    An Open Market Operation (also known as OMO) is an activity by a central bank to buy or sell government bonds in the open market. A central bank uses them as the primary means of implementing monetary policy.
  2. The policy of surplus budgeting may be resorted to when economy is confronted with :
    (1) Inflation and is experiencing economic boom
    (2) Deflation and unemployment
    (3) Recession and underemployment
    (4) Depression and low investment
    (5) None of these

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    Solution :    1

  3. The economic survey is compiled by the
    (1) Ministry of home affairs
    (2) Ministry of finance
    (3) Ministry of rural development
    (4) Central board of direct taxes
    (5) None of these

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    Solution :    2
    The Finance Ministry of India presents the Economic Survey in the parliament every year, just before the Union Budget. It is the ministry’s view on the annual economic development of the country.
  4. External debt consists of loans taken from :
    (1) Open market
    (2) Individual countries
    (3) Commercial banks
    (4) Compensation bonds
    (5) None of these

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    Solution :    2
    External Debt—The portion of a country’s debt that was borrowed from foreign lenders including commercial banks, governments or international financial institutions. These loans, including interest, must usually be paid in the currency in which the loan was made.
  5. What is hot money?
    (A) This is a fund which flows from one country to another to earn a short term profit on interest rate difference and/or anticipated exchange rate shifts.
    (B) This is a fund which is provided by a bank in USA at a very short notice and at a very high rate of interest and for a longer period of time .
    (C) This fund can load to market instability.
    (1) Only A
    (2) Both A and B
    (3) Only C
    (4) Both A and C
    (5) Only B

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    Solution :    4
  6. ‘World Water Day’ is observed on which of the following days?
    (1) March 22
    (2) February 22
    (3) January 22
    (4) May 22
    (5) April 22

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    Solution :    1
    World Water Day is an annual event celebrated on 22 March. The day focuses attention on the importance of universal access to clean water,sanitation , and hygiene facilities indeveloping. The day also focuses on advocating for the sustainable management of freshwater resources.
  7. Banking Ombudsman has been constituted under which act?
    (1) Banking Regulation Act
    (2) RBI Act
    (3) SBI ACT
    (4) Economic Act
    (5) None of these

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    Solution :    1
    Banking Lokpal has been constituted under the provisions of banking regulation act 1949. Banking Ombudsman is a quasi judicial authority functioning under India’s Banking Ombudsman Scheme, and the authority was created pursuant to a decision by the Government of India to enable resolution of complaints of customers of banks relating to certain services rendered by the banks.
  8. Exchange risk in case of Foreign Currency Non-resident Banks (FCNBs) Scheme is borne by :
    (1) RBI
    (2) Depositor
    (3) Government of India
    (4) Concerned bank
    (5) None of these

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    Solution :    4
    Exchange risk in case of Foreign Currency Non-resident Banks (FCNBs) scheme is borne by concerned bank.
  9. The provision of consumer protection act, 1986 are applicable to the services rendered by the banks:
    (1) To the customers of the bank only.
    (2) To the customers and the user of services.
    (3) To the customers and any user of banks services
    (4) All of the above
    (5) None of the above

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    Solution :    3

  10. In a free market system , the amount of goods and services that any household gets depends upon its :
    (1) Income and wealth
    (2) Income
    (3) Wage and interest income
    (4) Assets
    (5) None of these

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    Solution :    1
    Both income and wealth are important. For instance large durable items may have to be purchased using accumulated wealth if current income ig insufficient and credit is expensive.
  11. Who is the author of ‘A bend in the river’?
    (1) V. S. Naipaul
    (2) Salman Rushdie
    (3) Kavita Kumari
    (4) Satish Gujral
    (5) Arundhati Roy

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    Solution :    1
    A Bend in the River, novel by V.S. Naipaul, published in 1979.
  12. What is open market operation?
    (1) It is release of funds by RBI in open market.
    (2) It is a standby facility to banks by RBI for infusion of liquidity.
    (3) It is buying or selling of government bonds in the open market by a central bank to inject or suck liquidity in the system.
    (4) It is selling of own shares in the open market by the banks to raise funds.
    (5) None of these

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    Solution :    3
    The usual aim of open market operations is to control the short term interest rate and the supply of base money in an economy and thus indirectly control the local money supply.
  13. What is national income?
    (1) NNP mp = GNP fc Depreciation.
    (2) NNP fc = NNP mp — Indirect taxed + Subsidy
    (3) NNP fc = GNP mp — Depreciation
    (4) NNP fc = NNP fc — Indirect taxes + Subsidy
    (5) None of these

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    Solution :    2
    National income is the total value of a country’s final output of all new goods and services produced in one year. Understanding how national income is created is the starting point for macroeconomics.
  14. Which of the following is NOT a component of India’s securities market?
    (1) Commodity futures
    (2) Small saving in national saving certificate
    (3) Government bonds
    (4) Corporate equity
    (5) Derivatives on currency

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    Solution :    5

  15. Economic development is a:
    (A) Continuous process
    (B) Short – term process
    (C) Long -term process
    (1) Only C
    (2) Both A and C
    (3) Only A
    (4) Both A and B
    (5) None of these

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    Solution :    2
    Economic development is a continuous and long term process. Economic development is the sustained, concerted actions of policy makers and communities that promote the standard of living and economic health of a specific area. Economic development can also be referred to as the quantitative and qualitative changes in the economy.
  16. Which one of the following is correct for a closed economy having no foreign trade?
    (1) GDP > GNP
    (2) GDP < GNP
    (3) GDP = GNP
    (4) GDP < GNP
    (5) None of these

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    Solution :   3
    In case of closed economy GNP and GDP would be same because there is no net income earned from abroad.
  17. Which one of the following items is not included in the current account of India’s balance of payment ?(1) Short -term commercial borrowing
    (2) Non – monetary gold movements
    (3) Investment income
    (4) Transfer payments
    (5) None of these

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    Solution :    1
    Short term commercial borrowings is included in the capital account of balance of payment.
  18. When does the Central bank increase the minimum Statutory Cash Reserve Ratio of the commercial banks?
    (A) When the economy is in deflationary condition
    (B) When the economy is in deflationary condition
    (C) When the central bank aims credit contraction
    (1) Both A and C
    (2) All A, B and C
    (3) Both B and C
    (4) Only B
    (5) None of these

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    Solution :    3
    The central bank increases the minimum statutory cash reserve ratio of the commercial banks when the economy is experiencing inflation and the central bank aims credit contraction.
  19. Credit deadlock refers to a state when:
    (1) The bank rates has been raised steeply
    (2) Credit is available but borrowers are scarce
    (3) Borrowers are plentiful but loans are scarce
    (4) Banks have closed their loan window
    (5) None of these

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    Solution :    2
    Credit deadlock refers to a state when credit is available but borrowers are scarce.
  20. The special importance of banks among the financial institutions arises from:
    (1) Their large and heavy transactions
    (2) Their positions as suppliers of money
    (3) Their power to create money
    (4) Their influence on the economy
    (5) None of these

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    Solution :    3
    The special importance of banks among the financial institutions arises from their power to create money.

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