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. The most active segment of the Money Market in India is which one of the following?
[A] Call Money / Notice Money Market
[B] Repo / Reverse Repo
[C] Commercial Paper (CP)
[D] Certificate of Deposit (CD)
Show Answer
Correct Answer: A [Call Money / Notice Money Market]
Notes:
Call Money / Notice Money Market is the most active segment of the money market in India.
2. Liberalized Exchange Rate Management System (LERMS) involving dual exchange rate mechanism was instituted on the recommendations of a high level committee. Who was the head of this committee?
[A] Dr. C. Rangarajan
[B] Urjit Patel
[C] Nandan Nilekani
[D] None of the Above
Show Answer
Correct Answer: A [Dr. C. Rangarajan]
Notes:
On the recommendations of the High Level Committee on Balance of Payments headed by Dr C. Rangarajan, the Liberalized Exchange Rate Management System(LERMS) was instituted on March1,1993.
3. According to FERA ,Foreign Exchange includes which of the following?
[A] Traveler’s Cheque
[B] Letters of Credit
[C] Bill of Exchange expressed or drawn in Indian Currency
[D] All of the above
Show Answer
Correct Answer: D [All of the above]
Notes:
According to FERA ,1973 Foreign Exchange means Foreign Currency, which includes: Any Draft Traveller’s Cheque Letters of Credit Bill of Exchange expressed in Indian Currency but payable in Foreign Currency
4. Which of the following is the biggest contributor to the Foreign Reserve of India?
[A] Gold
[B] Foreign Assets
[C] SDR
[D] Reserve Tranche with IMF
Show Answer
Correct Answer: B [Foreign Assets]
Notes:
India’s forex reserves stood at USD 547.25 billion for the week ended November 18, 2022. The major component of this is Foreign Currency Assets (FCA) which stands at USD 484.29 billion, followed by Gold Reserves at USD 40.01 billion and Special Drawing Rights (SDRs) at USD 17.906 billion.
5. HFC stands for which of the following?
[A] Housing Finance Company
[B] Housing Finance Corporation
[C] Housing Federation of Commerce
[D] None of The Above
Show Answer
Correct Answer: A [Housing Finance Company]
Notes:
HFC stands for Housing Finance Company. Housing finance is provided by banks for which refinance is availed of from National Housing Bank (NHB).
6. What is the normal time period range for factoring in India?
[A] 70-80 days
[B] 80-90 days
[C] 90-120 days
[D] 90-150 days
Show Answer
Correct Answer: D [90-150 days]
Notes:
Usually the period for factoring is 90 to 150 days. Some factoring companies allow even more than 150 days. Factoring is considered to be a costly source of finance compared to other sources of short-term borrowings.
7. What is the tenure for the Equipment Financing Loan?
[A] 3-4 Year
[B] 4-5 Year
[C] 1-3 Year
[D] 2-5 Year
Show Answer
Correct Answer: B [4-5 Year]
Notes:
These types of loans are predominantly for the manufacturing businesses. The tenure for such loans are fixed and maybe in the range of 4- 5 years. Interest rates can be lower than term deposits and the equipment is generally taken as a collateral, along with some additional security.
8. Which of these banks was nationalised in 1969?
[A] United Bank of India
[B] Vijaya Bank
[C] Andhra Bank
[D] Punjab and Sind Bank
Show Answer
Correct Answer: A [United Bank of India]
Notes:
United Bank of India was nationalised in the first round of nationalisation in 1969. Rest of the options were nationalised in 1980.
9. How many Public Sector banks are there in India presently?
[A] 12
[B] 19
[C] 22
[D] 21
Show Answer
Correct Answer: A [12]
Notes:
There are a total of 34 nationalized banks in India of which 12 are Indian government banks and the rest 22 are private sector banks. The 12 Government Public Sector Banks are Bank of Baroda, Bank of India, Bank of Maharashtra, Canara Bank, Central Bank of India, Indian Bank, Indian Overseas Bank, Punjab National Bank, Punjab & Sind Bank, Union Bank of India, UCO Bank and State Bank of India.
10. Coastal Bank, India’s first local Area Bank, operates in which state?
[A] Gujarat
[B] Andhra Pradesh
[C] Karnataka
[D] Tamil Nadu
Show Answer
Correct Answer: B [Andhra Pradesh]
Notes:
Coastal Bank operates in one of the most prosperous regions of India; the five districts of Krishna, Guntur, West Godavari, East Godavari and Visakhapatnam in Andhra Pradesh. The Bank has 50 branches in these five districts with the Corporate Office in Vijayawada.
