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 is the oldest Joint Stock bank of India?
[A] Allahabad Bank
[B] Bank of Baroda
[C] Patiala Bank
[D] Bank of India
Show Answer
Correct Answer: A [ Allahabad Bank ]
Notes:
A bank that has multiple shareholders is called joint-stock bank. Oldest Joint Stock bank of India was Bank of Upper India that was established in 1863. But this bank failed in 1913. India’s Oldest Joint Stock Bank which is still working is Allahabad Bank. It is also known as India’s oldest public sector bank. It was established in 1865.
2. CRILC (Central Repository of Information on Large Credits) is a borrower level supervisory dataset that keeps records of loan of__?
[A] 5 Crore and above
[B] 5.2 Crore and above
[C] 6 Crore and above
[D] 8 Crore and above
Show Answer
Correct Answer: A [5 Crore and above]
Notes:
Central Repository of Information on Large Credits is a borrower-level supervisory dataset that keeps the record of loans of Rs 5 crore and above. In India, there are four privately owned credit information companies (CICs). They are CIBIL, Equifax, Experian and High Mark Credit Information Services.
3. Which of the following best defines the meaning of Exchange rate?
[A] It is a price at which Foreign money is exchanged at counters.
[B] It is the price at which one country’s currency is expressed in another country’s currency.
[C] It is the price at which Foreign materials are purchased or sold.
[D] All of the above
Show Answer
Correct Answer: B [It is the price at which one country’s currency is expressed in another country’s currency.]
Notes:
Exchange Rate is the price of one country’s currency expressed in another country’s currency. In other words, the rate at which one currency can be exchanged for another. E.g. Rs. 71.07 per one USD.
4. What is the full form of MDER?
[A] Market Determined Exchange Rate
[B] Market Derivative Exchange Rate
[C] Market Determined Exchange Regime
[D] Managed Determined Exchange Rate
Show Answer
Correct Answer: A [Market Determined Exchange Rate]
Notes:
After 1999 the official rate was discontinued and exchange rate became market-determined exchange rate (MDER). Under MDER the forces of demand and supply of dollars in India determine the exchange rate.
5. Liberalized Exchange Rate Management System (LERMS) is effective from which of the following dates?
[A] June 1,1993
[B] March1,1993
[C] April1,1993
[D] July 1,1993
Show Answer
Correct Answer: B [March1,1993]
Notes:
Liberalized Exchange Rate Management System (LERMS) involving the dual exchange rate was instituted after the recommendations of C. Ranagarajan Committee. It is effective from March 1, 1993.
6. In context with financial transactions, what is the full form of LRS?
[A] Liberalized Remittance Scheme
[B] Liberalized Refundable Scheme
[C] Liberalized Reliving Scheme
[D] None of the above
Show Answer
Correct Answer: A [Liberalized Remittance Scheme]
Notes:
The LRS stands for Liberalized Remittance Scheme. It is made available by the Reserve Bank of India and is effective from 1 June 2015.The LRS scheme is used by resident Indians to send money abroad for their children’s studies and also to invest in foreign stocks and property.
7. What does the Credit Rating Agency IND-RA stand for?
[A] India Ratings and Research
[B] India Ratings Agency
[C] India Ratings Association
[D] None of the Above
Show Answer
Correct Answer: A [India Ratings and Research]
Notes:
India Ratings and Research (Ind-Ra) is India’s most respected credit rating agency and is headquartered in Mumbai. Ind-Ra has seven branch offices located in Ahmedabad, Bengaluru, Chennai, Delhi, Hyderabad, Kolkata and Pune. Ind-Ra is a 100% owned subsidiary of the Fitch Group.
8. The Mutual fund is constituted under the provisions of which of the following acts?
[A] The Securities and Exchange Board Of India Act,1992
[B] RBI Act,1934
[C] Indian Trusts Act,1882
[D] Indian Registration Act,1908.
Show Answer
Correct Answer: C [Indian Trusts Act,1882]
Notes:
The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.
9. Who wrote the book The Problem of the Rupee – Its origin and its solution”, which gave the concept of RBI?
[A] B.R Ambedkar
[B] Jawahar Lal Nehru
[C] Lala Lajpat Rai
[D] Dadabhai Naroji
Show Answer
Correct Answer: A [B.R Ambedkar]
Notes:
RBI was conceptualized as per the guidelines, working style and outlook presented by Dr. B. R. Ambedkar in his book titled “The Problem of the Rupee – Its origin and its solution”.
10. When did the Banking Regulation Act, 1949 become applicable to the state of Jammu & Kashmir?
[A] 1949
[B] 1970
[C] 1956
[D] 1966
Show Answer
Correct Answer: C [1956]
Notes:
Initially, this act was passed as Banking Companies Act, 1949 and it was applicable to whole of India except Jammu & Kashmir. It became applicable to Jammu and Kashmir from 1956.
