Banking & General Financial Awareness
Banking & General Financial Awareness Multiple Choice Questions (MCQs) and Answers with explanation for All Banking Exams of 2020-2021 such as IBPS Bank PO, IBPS Bank Clerical, RRB PO and Clerical, SBI PO and SBI Clerical, IBPS Recruitments, RBI Grade B and RBI Banking Examinations.
1. Which of the following is not the type of credit reporting institutions?
[A] Credit Bureau
[B] Credit Agencies
[C] Both a and b
[D] None of the above
Show Answer
Correct Answer: C [Both a and b]
Notes:
There are two types of Credit Reporting Institutions. These are Credit Bureau and Credit Registry. Credit Registries tend to be public entities. They are usually managed by central banks or bank supervision agencies. In contrast, Credit Bureaus tend to be privately owned and privately operated companies.
2. FEMA was introduced in which of the following year?
[A] 1990
[B] 1989
[C] 1999
[D] 1991
Show Answer
Correct Answer: C [1999]
Notes:
Foreign Exchange Management Act was enacted in 1999 and it had 25 original notifications. This act came into force w.e.f June 1, 2000.FEMA manages foreign exchange, i.e. forex.
3. FEMA head office is situated in which of the following city?
[A] Hyderabad
[B] Lucknow
[C] Bangalore
[D] New Delhi
Show Answer
Correct Answer: D [New Delhi]
Notes:
The FEMA head-office, also known as Enforcement Directorate is situated in New Delhi and is headed by a Director. The Directorate is further divided into 5 zonal offices in Delhi, Mumbai, Kolkata, Chennai and Jalandhar and each office is headed by a Deputy Director.
4. What are the Pre-Payment charges applied on paying personal loan before tenure period.
[A] 10% of the Principal
[B] 5% of the Principal
[C] 1-2% of the Principal
[D] 7% of the Principal
Show Answer
Correct Answer: C [1-2% of the Principal]
Notes:
To pay off your personal loan before the loan tenure is completed, one get charged an additional fee termed as pre-payment charge. This pre-payment penalty usually ranges between 1% and 2% of the principal outstanding.
5. What are the Pre-Closure charges applied on paying personal loan before tenure period.
[A] 2-4 % of Principal
[B] 2-5% of the Principal
[C] 1-9% of the Principal
[D] 7-8% of the Principal
Show Answer
Correct Answer: B [2-5% of the Principal]
Notes:
Pre-closure refers to completely paying off a personal loan before the loan tenure has ended. Just like pre-payment charge, pre-closure charges range from 2% to 5% of the loan amount.
6. Which of the following organizations is the Mutual Fund market regulator in India?
[A] SEBI
[B] RBI
[C] ICICI
[D] CIBIL
Show Answer
Correct Answer: A [SEBI]
Notes:
As far as Mutual funds are concerned, SEBI makes the policies for mutual funds and also regulates the industry. It lays guidelines for the mutual funds to safeguard the investors’ interest.
7. Which of the following is the situation when the units of a close -ended fund can be bought?
[A] At the launch
[B] At any time
[C] At redemption
[D] Depends upon the fund type.
Show Answer
Correct Answer: A [At the launch]
Notes:
In a closed-end fund, a fixed number of shares are offered by an investment company through an initial public offering. They can be bought only at the launch of the fund.
8. Factoring Business is also known as by which of the following names?
[A] Accounts Receivable Factoring
[B] Asset Based Lending
[C] Invoice Factoring
[D] All of the Above
Show Answer
Correct Answer: D [All of the Above]
Notes:
Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Accounts receivable financing is a term more accurately used to describe a form of asset based lending against accounts receivable.
9. Which of the following clearly define the Line of Credit loans?
[A] It is start-up loans allowing businesses to open.
[B] It allows businesses to borrow money from a lender at any given time, up to a certain amount of
[C] It is the simplest type of corporate loans.
[D] It is made so businesses can buy property.
Show Answer
Correct Answer: B [It allows businesses to borrow money from a lender at any given time, up to a certain amount of]
Notes:
Line of credit loans allow businesses to borrow money from a lender at any given time, up to a certain amount of money per year. This is a common arrangement if the business has varying profits from month to month and may need extra funds to cover expenses at certain times.
10. What is the full form of FASB?
[A] Financial Accounting Standards Board
[B] Finance Accounting Safety Board
[C] Finance and Accounts Standards Board
[D] Financial Accounting Safety Bureau
Show Answer
Correct Answer: A [Financial Accounting Standards Board]
Notes:
Financial Accounting Standards Board is a private, non-profit organization standard-setting body whose primary purpose is to establish and improve Generally Accepted Accounting Principles within the United States in the public’s interest.
