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.
31. What distinguishes an English Mortgage from other types of mortgages?
[A] The mortgagor retains possession of the property.
[B] Ownership is transferred to the mortgagee until full repayment.
[C] The loan does not require registration.
[D] The lender earns profits from the property.
Show Answer
Correct Answer: B [Ownership is transferred to the mortgagee until full repayment.]
Notes:
In an English Mortgage, ownership of the property is transferred to the lender, with the condition that it reverts to the borrower upon full repayment of the loan, distinguishing it from other mortgage types.
32. What is the correct full form of CERSAI under the SARFAESI Act, 2002?
[A] Centralized Registry of Securitization and Asset Reconstruction of India
[B] Central Registry of Securitization Asset Reconstruction and Security Interest of India
[C] Centralized Registry of Security Interests of India
[D] Central Registry for Asset Reconstruction and Securitization in India
Show Answer
Correct Answer: B [Central Registry of Securitization Asset Reconstruction and Security Interest of India]
Notes:
CERSAI stands for the Central Registry of Securitization Asset Reconstruction and Security Interest of India, established to maintain a centralized database for secured transactions and prevent fraud in collateral claims.
33. What differentiates spear phishing from regular phishing attacks?
[A] It uses malware to gain access to victims’ devices.
[B] It targets specific individuals or organizations with personalized messages.
[C] It involves fake websites to trick users into entering credentials.
[D] It focuses on stealing card details through ATM skimming.
Show Answer
Correct Answer: B [It targets specific individuals or organizations with personalized messages.]
Notes:
Spear phishing is a targeted form of phishing that employs personalized messages aimed at specific individuals or organizations, making it more convincing than regular phishing, which typically uses generic messages.
34. What term describes bank fraud where criminals impersonate legitimate entities to deceive victims and steal sensitive information?
[A] Phishing
[B] Spoofing
[C] Smishing
[D] Vishing
Show Answer
Correct Answer: B [Spoofing]
Notes:
Spoofing involves fraudsters disguising themselves as trustworthy entities, such as banks or websites, to trick victims into revealing sensitive information, often using fake emails or websites that closely resemble legitimate sources.
35. Which regulations govern bank mergers in India under the Competition Act, 2002?
[A] Banking Regulation Act, 1949
[B] Combination Regulations, 2011
[C] Securities and Exchange Board of India Act, 1992
[D] Reserve Bank of India Act, 1934
Show Answer
Correct Answer: B [Combination Regulations, 2011]
Notes:
The Combination Regulations, 2011 under the Competition Act, 2002 mandate that any bank merger likely to adversely affect competition must be notified to the Competition Commission of India (CCI), which has the authority to approve or reject such mergers based on their competitive impact.
36. What is the primary significance of the Unique Customer Identification Code (UCIC) in the Indian banking sector?
[A] It increases the number of accounts a customer can hold.
[B] It eliminates the need for KYC compliance.
[C] It allows KYC-compliant customers to access services without repeated Customer Due Diligence.
[D] It is used to identify fraudulent transactions.
Show Answer
Correct Answer: C [It allows KYC-compliant customers to access services without repeated Customer Due Diligence.]
Notes:
The UCIC simplifies the banking process by enabling KYC-compliant customers to open new accounts or access additional services without undergoing the Customer Due Diligence (CDD) process again, thus enhancing transaction efficiency and reducing documentation redundancy.
37. Which program aims to provide financial literacy training to rural women through self-help groups?
[A] Project Swabhimaan
[B] Project Udaan
[C] Project Saksham
[D] Project Dhanlakshmi
Show Answer
Correct Answer: A [Project Swabhimaan]
Notes:
Project Swabhimaan focuses on financial inclusion by providing basic financial literacy and banking services to rural women, empowering them economically.
38. Which document is mandatory for opening a Jan Dhan account?
[A] Passport
[B] Aadhaar
[C] Voter ID
[D] Any officially valid document (OVD)
Show Answer
Correct Answer: D [Any officially valid document (OVD)]
Notes:
For opening a Jan Dhan account, any officially valid document (such as Aadhaar, PAN, or Voter ID) is acceptable under KYC norms.
39. Which type of capital is considered the highest quality under Basel III?
[A] Tier 1 capital
[B] Tier 2 capital
[C] Hybrid instruments
[D] Subordinated debt
Show Answer
Correct Answer: A [Tier 1 capital]
Notes:
Tier 1 capital, which includes common equity and retained earnings, is considered the highest quality capital under Basel III due to its ability to absorb losses.
40. Under Basel III, the countercyclical buffer is meant to:
[A] Enhance short-term profits
[B] Protect the banking sector during periods of excess credit growth
[C] Reduce operational risk
[D] Increase leverage
Show Answer
Correct Answer: B [Protect the banking sector during periods of excess credit growth]
Notes:
The countercyclical buffer aims to protect the banking sector from systemic risks arising during periods of excessive credit growth by requiring banks to hold extra capital.
