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Banking related General Awareness - FOUR

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1. Under lease finance business:
a. The component representing the replacement cost of the assets should be carried to the balance sheet in the form of provision for depreciation.
b. Banks should follow prudential accounting standard norms.]
c. Full depreciation should be provided for during the primary lease period of the assets.
d. all of these. e. None of these.

2. The work relating to recovery of funds locked up in credit sales falls under Factoring. Factoring is:
a. a means of providing post-shipment finance to exporters.
b. a type of agriculture financing for purchase of tractors.
c. a means of financing traders and manufacturers by taking over the collection of their customers’ bills.
d. Factoring is opening a new factory.
e. none of these.

3. Which of the following statement about factoring are correct?
a. The factor agent either buys the book debts of client or makes an advance against a charge over the debts.
b. He then collects the money from his clients’ customers direct.
c. Sometimes the factor assumes the whole of the credit risk, but in other cases he stipulates for a right of recourse against his client in case the debtors fail to pay.
d. all of these. e. None of these.

4. In the case of financing of equipment leasing, hire purchase and factoring by a bank:
a. 100 per cent risk weight should be given for calculation of capital to risk assets ratio.
b. Income recognition, asset classification and provisioning norms apply.
c. The exposure norm of not extending loans in excess of 20 per cent of the bank’s capital funds to an individual borrower and 50 per cent to a group of borrowers will apply.
d. all the above will apply. e. none of these.

5. Portfolio Management Services provided by banks to their clients are:
a. in the nature of investment consultancy/management, for a fee
b. entirely at the customer’s risk.
c. without guaranteeing, either directly or indirectly, a predetermined return.
d. all of these. e. None of these

6. A company is treated as Non-Banking Financial Company:
a. if it’s financial assets are more than 50 per cent of total assets (netted off against intangible assets).
b. income from financial assets is more than 50 per cent of the gross income as evidenced from its last audited balance sheet.
c. both the above.
d. none of the above. E. NONE OF THESE.

7. Non-Banking Financial Companies consist of:
a. equipment leasing company, and, investment company.
b. hire purchase finance company and mutual benefit financial company.
c. Loan company and Housing Finance Company
d. all of these. e. none of these.

8. Banks are not allowed to give bank credit to NBFC against:
a. bills discounted/rediscounted by NBFCs except for rediscounting of bills discounted by NBFC arising from sale of commercial vehicles.
b. investments made by NBFCs in shares, debentures of a current nature i.e. stock-in-trade except to stock broking companies.
c. investments of NBFCs in and advances to subsidiaries, group companies or other entities.
d. all of these. e. None of these.

9. An NBFC having a certificate of registration and otherwise entitled to accept public deposits is allowed to open its branch/office or allow its agents to operate for mobilization of public deposits:
a. within the State where its registered office is situated if its net owned funds is upto Rs.50 crore.
b. any where in India if its NOF is more than Rs.50 crore and its fixed deposits program has been rated by one of the approved credit rating agencies at “AA’ or above.
c. both of these.
d. either a or b) . e. none of these.

10. Which of the following statements about Portfolio Management Services rendered by banks are correct?
a. Funds accepted for portfolio management from their clients should not be entrusted to another bank for management.
b. The bank should charge a definite fee for services rendered independent of the return to the client.
c. The bank’s own investments and investments belonging to Portfolio Management client should be kept distinct from each other.
d. all of these e. none of these.

11. The recommendations of the committee on Banking Sector Reform (popularly known as the Narasimham Committee-II), submitted in April 1998, included:
a. 5 per cent weight for market risk for Government/approved securities should be provided.
b. The risk weight for Government guaranteed advances to be the same as for other advances.
c. Foreign exchange open position limit to carry 100 per cent risk weight.
d. all of these. e. none of these.

12. Which of the following is not a recommendation of the Committee on Banking Sector Reforms (Narasimham Committee-II)?
a. A minimum target of 9 per cent CAR should be achieved by the year 2000and 10 per cent by 2002.
b. An asset should be classified as doubtful if it is in the sub-standard category for 18 months in the first instance and eventually for 12 months and loss if it has been so identified but not written off.
c. The Debt Recovery Tribunals should have territorial jurisdiction of the High Court in the concerned state.
d. The Government guarantee advances, which have turned sticky, should be classified as NPAs.
e. none of these.

13. Which of the following statements are correct about banks’ entry into insurance sector:
a. All banks entering into insurance business will be required to obtain prior approval of the Reserve Bank.
b. The Reserve Bank will give permission to banks on case-to-case basis keeping in view all relevant factors.
c. Holding of equity by a promoter bank in an insurance company or the IRDA/Central Government will subject to compliance with any rules and regulations lay down participation in any form in insurance business.
d. All of these. e. none of these.

14. Guidelines issued by RBI on banks’ entry into insurance sector include:
a. Any Scheduled Commercial Bank would be permitted to undertake insurance business as agent of insurance companies on fee basis, without any risk participation.
b. The subsidiaries of banks will be allowed to undertake distribution of insurance produce on agency basis.
c. A subsidiary of a bank or of another bank will not normally be allowed to join the insurance company on risk participation basis.
d. all of these. e. none of these.

15. Banks will be permitted to set up a joint venture company for undertaking insurance business with risk participation if:
a. the maximum equity contribution of participating bank in the joint venture company does not normally exceed 50 per cent of the paid-up capital of the insurance company.
b. the net worth of the bank is not less than Rs. 500 crore with the CAR at least 10 per cent as on 31st March 2000.
c. the bank has recorded net profit for the last three continuous years and the level of non-performing assets is reasonable as on 31st March 2000.
d. all of these. e. none of these.

16. Under which category Regional Rural Banks are classified?
a. Public sector banks.
b. co-operative banks.
c. private sector banks.
d. Investment development bank. E. none of these.

17. Paid-up share capital of Regional Rural Bank is contributed by:
a. Central Government only.
b. State Government only.
c. Central Government, State Government and the sponsor commercial bank in the ratio of 50:15:35 respectively.
d. NABARD, the concerned State Government and the sponsor commercial bank in the ratio of 50:25:25 respectively.
e. None of these.

18. Where is the headquarters of State Bank of India?
a. Mumbai b. Chennai c. Delhi d. Kolkata e, none of these.

19. Name the Governor of R.B.I.:(March 12, 2011)
a. Bimal Jalan b. T.N. Seshan c. Duvvuru Subba Rao d. Sam Pitroda
e. None of these.

20. . According to Banking Regulation Act, RBI can fix SLR upto the ceiling of---
a. 40 per cent b. 30 per cent c. 20 per cent
d. 50 per cent. E. None of these.

21. . What is rate of interest allowed by Banks in Savings Bank Account?(with effect from May 3, 2011)
a. 3.5% p.a. b. 4% p.a. c. 3.5% p.m. d. 4% p.m. e. none of these

22. The expansion for the BIS, in the context of the banking industry is:
(A) Bank for International Settlements
(B) Bank for Industrial Settlements
(C) Bank for Industrial Sectors
(D) Bank for International Services
(e) none of these,
23. The expansion for BIFR, in the context of the Indian Industry is:
(A) Board for Industrial and Financial Reconstruction
(B) Bureau for Industrial and Financial Reconstruction
(C) Board for Investment and Financial Reconstruction
(D) Bureau for Investment and Financial Reconstruction
e. None of these.
24. Cash Reserve Ratio ( CRR) and Statutory Liquidity Ratio (SLR ) are terms most closely related to which of the following industries/markets:
(A) Stock Exchange
(B) Banking
(C) Mutual Fund
(D) Income Tax e. None of these.
25. Which of the following programs aims at the promotion of savings among rural women?
(A) Rashtriya Mahila Kosh
(B) Mahila Samriddhi Yojna
(C) Indira Mahila Yojna
(D) Javhar Rozgar Yojna e. none of these.
26. Which of the following programs meets the credit needs of poor women?
(A) Mahila Samriddhi Yojna
(B) Rashtriya Mahila Kosh
(C) Indira Mahila Yojna
(D) Mahila Samakhya Programme e. None of these.
27. Which of the following deals with economic offences?
(D) COFEPOSA e. None of these.

28. Which state has maximum branches of public sector commercial banks?
a. U.P.
b. Maharashtra
c. Karnataka
d. Gujarat
e. None of these

29. Which institution is known as ‘soft loan window’ of World Bank?
a. IFC
b. IDA
c. IMF
d. Indian Development Forum
e. None of these.

30. Meera Seth Committee was related to ---
a. Development of Handlooms
b. Sex-differentiation in employment
c. Abolition of Child Labour
d. Welfare of working women
e. None of these.

31. National Income estimates in India is prepared by ---
a. Planning Commission
b. RBI
c. Finance Ministry
d. C.S.O.
e. None of these.

32. Individual cannot open his account in ---
a. Urban CO-operative Bank
b. Regional Rural Bank
c. RBI
d. Scheduled Commercial Banks
e. None of these

33. What is ‘NIKKEI’?
a. Share Price Index of Tokyo share market
b. Name of Japanese Central Bank
c. Japanese name of Country’s Planning Commission
d. Foreign Exchange Market of Japan
e. None of these

34. NABARD was established on the recommendation of ---
a. Public Account Committee
b. Sivaraman Committee
c. Narsimham Committee
d. a) and b) e. None of these

35. OTCEI is ---
a. Atomic submarines of China
b. Economic policy of USA
c. An Indian Share Market
d. A defence research organization
e. none of these.

36. What is ‘Hawala’?
a. Full details of a subject
b. Illegal transactions of foreign exchange
c. Illegal trading of shares
d. Tax evasion
e. none of these.

37. Foreign currency which has a tendency of quick migration is called ---
a. Scarce currency
b. Soft currency
c. Gold currency
d. Hot currency
e. None of these.

38. The Headquarter of Asian Development Bank (ADB) is at ---
a. Singapore
b. Manila
c. Honk Kong
d. Tokyo
E. None of these.

39. What is ‘Stagflation’?
a. Inflation with growth
b. Deflation with growth
c. Inflation after deflations
d. Inflation with depressions
e. None of these

40. Insider Trading is related to ---
a. Share Market
b. Horse racing
c. Taxation
d. Public Expenditure
e. None of these.

41. ‘Public Sector’ means ---
a. Government ownership on commerce and trade
b. Capitalist ownership on commerce and trade
c. Private ownership on trade
d. company owned by public. E. None of these

42. What is a ‘limited company’?
a. In which shareholders possess the ownership limited to their paid up capital
b. In which shares are not issued
c. A company of Government ownership
d. A Registered company

43. Who gains in inflation?
a. Saver
b. Creditor
c. Debtor
d. Pension holder

44. ‘Open market operation’ is a part of ---
a. Income Policy
b. Fiscal Policy
c. Credit Policy
d. Labour Policy

45. CRISIL ---
a. Evaluates the credit documents of a company
b. Provides financial assistance to industries
c. Provides finances for rural areas
d. Promotes exports

46 GIC includes various insurance companies. This number is ---
a. 2 b. 3
c. 4 d. 5

47 LIC of India was established in
a. 1897 b. 1950
c. 1956 d. 1965

48. Consumer Protection Act (COPRA) was implemented in ---
a. 1985 b. 1986
c. 1987 d. 1988

49. Which direct tax gives maximum net revenue to the Government ---
a. Corporate Tax
b. Income Tax
c. Wealth Tax
d. Gift Tax

50 . Scheduled Bank is that bank which is ---
a. Nationalized
b. Not nationalized
c. Based at foreign country
d. Included in the second schedule of RBI



1.D 2.C 3.D 4.D 5.D 6.C 7.D 8.D 9.C 10.D

11.D 12.C 13.D 14.D 15.D 16.A 17.C 18.A 19.C 20.A

21.B 22.D 23.A 24.B 25.A 26.B 27.D 28.A 29.B 30.A

31.D 32.C 33.A 34.B 35.C 36.B 37.D 38.B 39.D 40.A

41.A 42.A 43.C 44.C 45.A 46.C 47.C 48.B 49.A 50.D

Banking related General Awareness - FOUR Reviewed by sambasivan srinivasan on 6:00:00 PM Rating: 5


Arun said...

Hi Sir,

The answer for question number 24 should be b) Banking.

Please correct me if i am wrong!!

Sambasivan.S said...

Arun: Thanks. The answer for 24 is B. I have corrected thanks.

Likewise if there are some errors --candidates feel free to tell in comments or send email to

Arun said...

Question number 21 should have (b) 4% as answer.
Please correct if i am wrong!!

Arun said...

Also, Question number 25 should carry (B) Mahila Samriddhi Yojna as answer!!

Sambasivan.S said...

yes. 21 is 4%. I will for for answer A for 25. let me further check up.
altered 21.

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