Banking and Financial Institutions MCQ with Answers

Question. Fiscal policy is concerned with which of the following?
A. Public revenue and Expenditure
B. Issue of Currency
C. Export Import
D. Population Control
E. Education for all

Answer : A. Public revenue and Expenditure
Explanation: Fiscal policy is the policy relating to government revenues from taxes and expenditure on various projects. Monetary Policy, on the other hand, is mainly concerned with the flow of money in the economy.

Question. In which of the following types of banking, there is a direct execution of transaction between a bank and its consumers?
A. Retail Banking
B. Universal Banking
C. Virtual Banking
D. Unit Banking
E. other than those given as options

Answer : A. Retail Banking
Explanation: Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

Question. Balance in a current account is classified as ________
A. Hybrid Deposit
B. Term Deposit
C. Demand Deposit
D. Flexi Deposit
E. other than those given as options

Answer : C. Demand Deposit
Explanation: Current accounts form a large portion of demand deposits of a bank. It can be opened by Individuals, Business entities (firms, company), Institutions, Government bodies / departments, Societies, Liquidators, Receivers, and Trusts.

Question. The Foreign exchange of India is kept with _________
A. SBI
B. ECGC
C. RBI
D. NABARD
E. other than those given as options

Answer : C. RBI
Explanation: Reserve Bank of India accumulates foreign currency reserves by purchasing from authorized dealers in open market operations. Foreign exchange reserves of India act as a cushion against rupee volatility once global interest rates starts rising. The Foreign exchange reserves of India consists of below four categories.
a. Foreign Currency Assets
b. Gold
c. SDRs
d. Reserve Tranche Position in the IMF.

Question. Maximum loan amount to individuals against security shares can be _____
A. 20 lakh
B. 15 lakh
C. 25 lakh
D. 50 lakh
E. other than those given as options

Answer : A. 20 lakh
Explanation: Loans/ advances granted to individuals against the security of shares, debentures and PSU bonds should not exceed Rs.10 lakh and Rs.20 lakh, if the securities are held in physical form and dematerialized form respectively.

Question. Deposits under Foreign Currency Non-Resident(FCNR) scheme can be accepted for a minimum of _______
A. 15 days
B. 3 months
C. 6 months
D. 1 year
E. 7 days

Answer : D. 1 year
Explanation: Term Deposit with maturity of minimum 1 year & maximum 5 years can be opened under Foreign Currency Non-Resident(FCNR) scheme.

Question. Which of the following is known as “Demat” account?
A. Account in which shares are held in electronic form
B. other than those given as options
C. Account allowed to be operated by guardian of minor
D. Account operated by business correspondents in rural centres.
E. Account opened with zero balance

Answer : A. Account in which shares are held in electronic form
Explanation: A Dematerialized account is opened by the investor while registering with an investment broker (or sub-broker).

Question. The Aadhaar-Enabled Payment Systems(AEPS) is a bank led model that facilitates banking facilities by allowing transactions at Point of Sale through the Business Correspondent (BC) using the Aadhaar authentication number. Aadhaar enabled basic types of banking do not include
A. Balance Enquiry
B. Cash Withdrawal
C. Online Payment
D. Cash Deposit
E. Aadhaar to Aadhaar funds transfer

Answer : C. Online Payment
Explanation:
Services Offered by AEPS:
Balance Enquiry
Cash Withdrawal
Cash Deposit
Aadhaar to Aadhaar Fund Transfer
Gateway Authentication Services

Question. The process by which the central bank of a country controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth is known as:
A. Economic Policy
B. Monetary Policy
C. Fiscal Policy
D. Credit Policy
E. Budgetary Policy

Answer : B. Monetary Policy
Explanation: Monetary Policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI). is so designed as to maintain the price stability in the economy.

Question. Loans granted by a bank to an exporter popularly known as „Export credit‟ is guaranteed, in case of default,by which of the following
A. EXIM Bank
B. Ministry of International Trade, GOA
C. ECGC
D. DICGC
E. Other than those given as options

Answer : C. ECGC
Explanation: ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce.

Question. The words „not negotiable‟ can be added to _______
A. Double Crossing
B. General Crossing
C. Special Crossing
D. Both (B) and (C)
E. Both (A) and (B)

Answer : D. Both (B) and (C)
Explanation: The words ‗not negotiable‘ can be added to general-crossing as well as special-crossing and a crossing with these words is known as not negotiable crossing. The effect of such a crossing is that it removes the most important characteristic of a negotiable instrument.

Question. Which of the following has awarded SIDBI with “Outstanding Development Project Award” for setting up SMERA?
A. Standard & Poor
B. IBRD
C. ADB
D. ADFIAP
E. None of these

Answer : D. ADFIAP
Explanation: The Association of Development Financing Institutions in Asia and the Pacific (ADFIAP) has awarded SIDBI with ―Outstanding Development Project Award‖ for setting up SMERA in 2007.

Question. SMERA has been registered under _______
A. Securities and Exchange Board of India Act, 1992
B. Reserve Bank of India Act, 1934
C. Banking Regulation Act, 1949
D. Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999
E. None of these

Answer : D. Securities and Exchange Board of India (Credit Rating Agencies) Regulations,1999
Explanation: SMERA has been registered under Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999.

Question. Which of the following endorsements is not valid?
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Both (A) and (B)

Answer : B. Partial Endorsement
Explanation: If the bill purposes to be endorsed for a part of the amount payable, the endorsement is called partial. It is legally ineffective.

Question. If the endorser signs, but does not give his/her name to whom he/she wishes to transfer the cheque is called _________
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Blank Endorsement

Answer : E. Blank Endorsement
Explanation: If the endorser signs, but does not give his name to whom he wishes to transfer the cheque is called Blank Endorsement.

Question. When an endorsee give up some of his/her rights then it is called __________
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Blank Endorsement

Answer : D. Facultative Endorsement
Explanation: When notice of dishonour is received by the endorsee instead of endorser it is known as facultative endorsement.

Question. The endorser expresses that he/she would not be liable for any expenses incurred by endorsee or any holder, in case of dishonour of the instrument the endorsement is called __________
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Sans recourse Endorsement

Answer : E. Sans recourse Endorsement
Explanation: The endorser expresses that he would not be liable for any expenses incurred by endorsee or any holder, in case of dishonour of the instrument the endorsement is called Sans recourse Endorsement.

Question. Which of the following is an endorsement that restrict the further negotiation of the bill?
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Sans recourse Endorsement

Answer : A. Restrictive Endorsement
Explanation: An endorsement which restrict the further negotiation of the bill.

Question. The safest form of Crossed Cheque is _____
A. Double Crossing
B. General Crossing
C. Special Crossing
D. Account payee crossing
E. None of the Above

Answer : D. Account payee crossing
Explanation: In Account payee crossing the amount will not be paid to anybody over the counter. It will be credited to the account of the payee only. Thus account payee crossing ensures safe transfer of funds.

Question. _______ is a cheque that is not crossed on the left corner and payable at the counter of the drawee bank on presentation of the cheque.
A. Crossed Cheque
B. Open Cheque
C. General Crossing
D. Restrictive Crossing
E. None of the Above

Answer : B. Open Cheque
Explanation: An open cheque is a cheque that is not crossed on the left corner and payable at the counter of the drawee bank on presentation of the cheque.

Question. Which of the following is an independent banking industry watchdog that protects consumers of banking services in the country?
A. BBB
B. IBA
C. BCSBI
D. IBRD
E. None of the Above

Answer : C. BCSBI
Explanation: The Banking Codes and Standards Board of India (BCSBI) is an independent banking industry watchdog that protects consumers of banking services in India.

Question. BCSBI registered as an independent and autonomous body under ________
A. RBI Act 1934
B. Societies Registration Act, 1860
C. Banking Regulation Act, 1949
D. The Companies Act, 1956
E. Both (B) and (C)

Answer : B. Societies Registration Act, 1860
Explanation: BCSBI is an independent and autonomous body, registered as a separate society under the Societies Registration Act, 1860.

Question. The International Bank for Reconstruction and Development(IBRD) is an international financial institutions that offer loans to _____
A. Multinational Banks
B. Multinational Financial Institutions
C. Middle Income Developing Countries
D. Non Government Organizations
E. None of the Above

Answer : C. Middle Income Developing Countries
Explanation: The International Bank for Reconstruction and Development (IBRD) is an international financial institution that offers loans to middle-income developing countries.

Question. What is difference between banks & HFCs?
A. HFCs cannot accept demand deposits
B. It cannot issue cheques drawn on itself
C. deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of HFCs
D. All of the Above
E. None of the Above

Answer : D. All of the Above
Explanation: HFCs are doing functions similar to banks as banks also provides housing loans.
However, there are a few differences as given below:
♦ HFCs cannot accept demand deposits
♦ HFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself;
♦ Deposit insurance facility of Deposit Insurance and Credit Guarantee
Corporation(DICGC) is not available to depositors of HFCs, unlike in case of banks.

Question. The “in-principle” approval for setting up „small finance banks‟ granted by RBI will be valid for ______
A. 12 Months
B. 24 Months
C. 10 Months
D. 18 Months
E. None of the Above.

Answer : D. 18 Months
Explanation: The ―in-principle‖ approval granted will be valid for 18 months to enable the applicants to comply with the requirements under the Guidelines and fulfil other conditions as may be stipulated by the RBI.

Question. Which of the following is an independent commodity exchange based in Mumbai?
A. MGEX
B. MCE
C. MDEX
D. MCX
E. MEX

Answer : D. MCX
Explanation: Multi Commodity Exchange of India Ltd (MCX) (BSE: 534091) is an independent commodity exchange based in India. It was established in 2003 and is based in Mumbai.

Question. Which of the following holds 4% stake in CIBIL?
A. Bank of India
B. TransUnion International
C. Aditya Birla Trustee Company Private Ltd
D. ICICI Bank Ltd
E. India Infoline Finance Limited

Answer : C. Aditya Birla Trustee Company Private Ltd
Explanation: Aditya Birla Trustee Company Private Ltd – 4%

Question. Which of the following holds minority stake in CIBIL?
A. Bank of India
B. TransUnion International
C. Aditya Birla Trustee Company Private Ltd
D. ICICI Bank Ltd
E. India Infoline Finance Limited

Answer : E. India Infoline Finance Limited
Explanation: India Infoline Finance Limited – 1%

Question. If the endorsement makes the payment of a bill subject to the fulfilment of a condition the endorsement is called _______
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Both (A) and (B)

Answer : C. Conditional Endorsement
Explanation: If the endorsement makes the payment of a bill subject to the fulfilment of a condition the endorsement is called Conditional Endorsement.

Question. Which of the following endorsement specifies the name of the transferee for the payment of the bill?
A. Restrictive Endorsement
B. Partial Endorsement
C. Conditional Endorsement
D. Facultative Endorsement
E. Special Endorsement

Answer : E. Special Endorsement
Explanation: An endorsement which specifies the name of the transferee for the payment of the bill is called special endorsement.

Question. Which of the following state is known as “Cradle of Indian Banking”?
A. Kerala
B. Maharashtra
C. Tamil Nadu
D. Karnataka
E. Uttar Pradesh

Answer : D. Karnataka
Explanation: The state of Karnataka, particularly the region comprising the coastal districts of Dakshina Kannada and Udupi is called as the cradle of banking in India. This is because seven of the country‘s leading banks, Canara Bank, Syndicate Bank, Corporation Bank, Vijaya Bank, Karnataka Bank, Vysya Bank and the State Bank of Mysore originated from this state.

Question. Which of the following is the headquarters of BCSBI?
A. Chennai
B. New Delhi
C. Mumbai
D. Hyderabad
E. None of the Above

Answer : C. Mumbai
Explanation: Headquarters of BCSBI is located in Mumbai.

Question. BCSBI is governed by a _______ governing Council including one Chairman.
A. six-member
B. Four-member
C. Five-member
D. Three-member
E. None of the Above

Answer : A. six-member
Explanation: The board is governed by a six-member governing Council including one Chairman.

Question. Which of the following is a pension scheme focused on the workers in the unorganiaed sector?
A. SSY
B. AMRUT
C. APY
D. PMAY
E. None of the Above

Answer : C. APY
Explanation: Atal Pension Yojna (APY) a guaranteed pension scheme administered by PFRDA and established by Government of India. This scheme mainly for workers in unorganised sector.

Question. Which of the following is an apex financial institution for housing?
A. AIFI
B. NHB
C. DFI
D. Both (A) and (B)
E. None of the Above

Answer : B. NHB
Explanation: NHB is an apex financial institution for housing. NHB has been established with an objective to operate as a principal agency to promote housing finance institutions both at local and regional levels.

Question. NHB is wholly owned by ______
A. GOI
B. RBI
C. SEBI
D. NABARD
E. None of the Above

Answer : B. RBI
Explanation: NHB is wholly owned by Reserve Bank of India.

Question. The Headquarters of NHB located in ________
A. Chennai
B. Mumbai
C. New Delhi
D. Gurugram
E. None of the Above

Answer : C. New Delhi
Explanation: Headquarters of NHB located in New Delhi.

Question. Which of the following holds majority stake in CIBIL?
A. Bank of India
B. Bank of Baroda
C. United Bank of India
D. TransUnion International
E. ICICI Bank Ltd

Answer : D. TransUnion International
Explanation:
TransUnion International Inc (66.1%)
ICICI Bank Ltd (6)%
Bank of Baroda (5)%
Bank of India (5)%
Union Bank of India (5)%
Indian Overseas Bank (5)%
Aditya Birla Trustee Company Private Ltd. (4)%
India Alternatives Private Equity Fund (2.9%)
India Infoline Finance Limited (1%)

Question. Which of the following is the slogan of CIBIL?
A. Empowering Banks
B. Empowering Women
C. Empowering India
D. Empowering you
E. None of the Above

Answer : D. Empowering you
Explanation: Slogan: Empowering you

Question. An HFC is required to have Minimum net owned fund of ______
A. Rs. 100 lakhs
B. Rs. 200 lakhs
C. Rs. 500 lakhs
D. Rs. 1000 lakhs
E. None of the Above

Answer : D. Rs. 1000 lakhs
Explanation: For commencing the housing finance business, an HFC is required to have the following in addition to the requirements under the Companies Act, 1956:
♦ Certificate of registration from NHB
♦ Minimum net owned fund of Rs. 1000 lakhs

Question. HFCs can accept public deposits for a period of __________
A. 2 to 5 years
B. 1 to 5 years
C. 2 to 7 years
D. 1 to 7 years
E. All of the Above

Answer : D. 1 to 7 years
Explanation: In terms of the Housing Finance Companies (NHB) Directions, 2001, HFCs can accept public deposits for periods of one year and above and upto seven years only.

Question. What is/are the credit rating agencies approved for the acceptance of public deposits by an HFC?
A. The Credit Rating Information Services of India Ltd. (CRISIL)
B. ICRA Ltd.
C. Credit Analysis and Research Limited (CARE)
D. FITCH Ratings India Pvt. Ltd.
E. All of the Above

Answer : E. All of the Above
Explanation: The HFC having credit rating can accept more deposits as compared to an HFC without such rating.
The following credit rating agencies have been approved for the above purpose
♦ The Credit Rating Information Services of India Ltd. (CRISIL)
♦ ICRA Ltd.
♦ Credit Analysis and Research Limited (CARE)
♦ FITCH Ratings India Pvt. Ltd.

Question. In terms of _________, HFCs cannot conduct business of housing finance without obtaining a Certificate of Registration (CoR) from NHB
A. Section 29A of National Housing Bank 1987
B. Section 28A of National Housing Bank 1987
C. Section 27A of National Housing Bank 1987
D. Section 26A of National Housing Bank 1987
E. None of the Above

Answer : A. Section 29A of National Housing Bank 1987
Explanation:
In terms of section 29A of the National Housing Bank, 1987, HFCs cannot conduct business of housing finance without obtaining a Certificate of Registration (CoR) from NHB. Conduct of business without obtaining certificate of registration is an offence punishable under the provisions of the National Housing Bank Act, 1987. NHB can also file application for winding up of such HFCs, under section 33B of the said Act.

Question. Which of the following is/are non-banking subsidiary of the State Bank of India?
A. SBI Capital Markets Ltd.
B. SBI General Insurance Company Limited.
C. SBI Funds Management Pvt Ltd.
D. All of the Above
E. None of the Above

Answer : D. All of the Above
Explanation:
SBI has the following Non-Banking Subsidiaries in India:
SBI Capital Markets Ltd.
SBI Funds Management Pvt Ltd.
SBI Global Factors Ltd.
SBI Cards & Payments Services Pvt. Ltd. (SBICPSL)
SBI DFHI Ltd.
SBI General Insurance Company Limited.
SBI Pension Funds Pvt Ltd (SBIPFPL)

Question. How many divisions are there in CIBIL?
A. one
B. Two
C. Three
D. Four
E. None of the Above

Answer : B. Two
Explanation: It has two divisions : Consumer Bureau and Commercial Bureau

Question. A Credit Bureau is governed by _________
A. Securities and Exchange Board of India Act, 1992
B. Reserve Bank of India Act, 1934
C. Banking Regulation Act, 1949
D. Securities and Exchange Board of India (Credit Rating Agencies) Regulations, 1999
E. Credit Information Companies (Regulation) Act of 2005

Answer : E. Credit Information Companies (Regulation) Act of 2005
Explanation: A Credit Bureau is governed by the Credit Information Companies (Regulation) Act of 2005.

Question. Which of the following plays an important role in the loan approval process?
A. Credit Information Report (CIR)
B. CIBIL TransUnion Score
C. Only A
D. Both (A) and (B)
E. None of the Above

Answer : D. Both (A) and (B)
Explanation: The Credit Information Report (CIR) and CIBIL TransUnion Score are very important in the loan approval process.

Question. Which of the following is/are technical partners of CIBIL?
A. TransUnion International
B. Dun and Bradstreet
C. SIDBI & PSBs
D. Both (A) and (B)
E. Both (A) and (C)

Answer : D. Both (A) and (B)
Explanation: TransUnion International and Dun and Bradstreet are technical partners of CIBIL.

Question. National Housing Bank(NHB) was set up under ___________
A. National Housing Bank Act, 1987
B. National Housing Bank Act, 1977
C. National Housing Bank Act, 1967
D. National Housing Bank Act, 1957
E. None of the Above

Answer : A. National Housing Bank Act, 1987
Explanation: NHB was set up on 9 July 1988 under the National Housing Bank Act, 1987.

Question. Which of the following contributed the entire paid-up capital in National Housing Bank(NHB)?
A. GOI
B. RBI
C. SEBI
D. NABARD
E. None of the Above

Answer : B. RBI
Explanation: RBI contributed the entire paid-up capital in National Housing Bank(NHB).

Question. Which is a full service credit rating agency exclusively set up for micro, small and medium enterprises?
A. CRISIL
B. ICRA
C. CARE
D. ONICRA
E. SMERA

Answer : E. SMERA
Explanation: SMERA Ratings Limited (formerly SME Rating Agency of India Ltd.) is a full service credit rating agency exclusively set up for micro, small and medium enterprises.

Question. SMERA is a joint initiative of _________
A. SIDBI & Leading PSBs
B. Dun & Bradstreet Information Services India Private Limited (D&B) & Leading Private Banks
C. RBI & SEBI
D. Both (A) and (B)
E. Both (A) and (C)

Answer : D. Both (A) and (B)
Explanation: SMERA Ratings Limited (formerly SME Rating Agency of India Ltd.) is a joint initiative of Small Industries Development Bank of India (SIDBI), Dun & Bradstreet Information Services India Private Limited (D&B) and leading public and private sector banks in India.

Question. Which of the following is India‟s first Credit Information Company?
A. CRISIL
B. CIBIL
C. SMERA
D. CERSAI
E. CARE

Answer : B. CIBIL
Explanation: TransUnion CIBIL Limited is India‘s first Credit Information Company, also commonly referred as a Credit Bureau. It collect and maintain records of individuals‘ and nonindividuals‘ (commercial entities) payments pertaining to loans and credit cards. These records are submitted to credit bureau by banks and other lenders on a monthly basis; using this information a Credit Information Report (CIR) and Credit Score is developed, enabling lenders to evaluate and approve loan applications.

Question. Which of the following provides license to a credit bureau?
A. SEBI
B. SIDBI
C. NABARD
D. RBI
E. GOI

Answer : D. RBI
Explanation: A Credit Bureau is licensed by the RBI.

Question. SMERA is the ______ rating agency in the country?
A. First
B. Sixth
C. Seventh
D. Eighth
E. None of these

Answer : B. Sixth
Explanation: SMERA is registered with the Securities and Exchange Board of India (SEBI) as a Credit Rating Agency (6th in India).

Question. Credit Rating Agency, SMERA accredited by ________
A. SEBI
B. SIDBI
C. NABARD
D. RBI
E. None of these

Answer : D. RBI
Explanation: The Company has received accreditation from the Reserve Bank of India (RBI) as an External Credit Assessment Institution (ECAI) under BASEL – II norms for undertaking bank loan ratings.

Question. Which of the following instruments rated/graded by SMERA?
A. Commercial Papers
B. Security Receipts
C. Fixed Deposits
D. Only (B) and (C)
E. All of these

Answer : E. All of these
Explanation: SMERA can rate/grade various instruments such as: IPO, NCDs, Commercial Papers, Bonds, Security Receipts, Fixed Deposits etc

Question. SMERA is also em-panelled as an approved rating agency by_______
A. SIDBI
B. NABARD
C. NSIC
D. Both (B) and (C)
E. None of these

Answer : C. NSIC
Explanation: SMERA is also em-panelled as an approved rating agency by the National Small Industries Corporation Ltd. (NSIC) under the ―Performance & Credit Rating Scheme for Small Industries‖, approved by the Ministry of Small Scale Industries, Government of India.

Question. The Headquarters of SMERA is located in _______
A. Mumbai
B. New Delhi
C. Hyderabad
D. Gurugram
E. None of these

Answer : A. Mumbai
Explanation: The Headquarters of SMERA is located in Mumbai, Maharashtra.

Question. SMERA Ratings Ltd (SMERA) is registered by ______
A. SEBI
B. SIDBI
C. NABARD
D. RBI
E. None of these

Answer : A. SEBI
Explanation: SMERA is registered with the Securities and Exchange Board of India (SEBI) as a Credit Rating Agency.

Question. In which of the following fund transfer mechanisms, can funds be moved from one bank to another and where the transaction is settled instantly without being bunched with any other transaction?
A. RTGS
B. NEFT
C. TT
D. EFT

Answer : A. RTGS
Explanation: In RTGS, the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary‘s account within 30 minutes of receiving the funds transfer message.

Question. Name the newly appointed MD of State Bank of Mysore.
A. NK Chari
B. Romil Bhattacharya
C. Surya Kumar
D. CR Sasikumar
E. DP Sardana

Answer : A. NK Chari
Explanation: N.K.Chari, the new Managing Director of State Bank of Mysore, assumed office on May 30. Prior to his new position, he was the Deputy Managing Director of State Bank of India.

Question. _________ are long term corporate bonds that are unsecured in nature.
A. DCF
B. Debentures
C. Covenant
D. CRAs

Answer : B. Debentures
Explanation: A long-term security yielding a fixed rate of interest, issued by a company and secured against assets are known as debentures.

Question. Name the newly appointed MD of State Bank of Travancore.
A. PN Naidu
B. Naresh Sharma
C. NK Chari
D. CR Sasikumar
E. Ravi Verma

Answer : D. CR Sasikumar
Explanation: CR Sasikumar assumed the charge of Managing Director of State Bank of Travancore (SBT), one of the associate banks of State Bank of India (SBI), on June 1.

Question. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as _________
A. SWIFT
B. Basel
C. RTGS
D. NEFT

Answer : A. SWIFT
Explanation: Society for Worldwide Inter bank Financial Telecommunication code. An internationallyrecognized identification code for banks around the world. SWIFT codes are most commonly used for international wire transfers and are comprised of 8 or 11 alphanumeric characters.

Question. To provide loans to Indo-Spanish joint ventures and local enterprises in India, State Bank of India (SBI) has signed a memorandum of agreement with Spain‟s which bank to enhance business synergies?
A. Caja Madrid
B. CaixaBank
C. Liberbank
D. Gallego bank
E. None of these

Answer : B. CaixaBank
Explanation: As per the agreement, they will expand banks‘ guarantee transaction businesses by jointly providing credit to Indian-Spanish joint ventures and Indian local enterprises The banks will collaborate in areas of mutual interest such as syndicated loan business, guarantee transactions, trade finance and export credit agency finance, infrastructure finance and networking services, among others.

Question. Banks issue a letter to beneficiary on behalf of its constituents like guarantee for making payment on their behalf on fulfilment of its terms and conditions. What is this arrangement known in banking context?
A. Line of Credit
B. Loan to Client
C. Loan on Credit
D. Letter of Credit

Answer : D. Letter of Credit
Explanation: A letter issued by a bank to another bank (especially one in a different country) to serve as a guarantee for payments made to a specified person under specified conditions.

Question. When a Bank provides a loan for purchase of white goods, it is categorised as_____________
A. Consumption loan
B. White Goods loan
C. Consumer Durable loan
D. Working Capital

Answer : C. Consumer Durable loan
Explanation: Consumer Durable loan is a finance option for purchase of (White Goods) household items like Washing Machines, Refrigerators, AC, LED, LCD, Microwaves etc.

Question. An account which is maintained by depositing undistributed parts of profit for future needs is known as ________
A. Savings Account
B. Current Account
C. Reserve Account
D. None of the Above

Answer : C. Reserve Account
Explanation: Funds taken out of earnings to provide for anticipated future payments is called Reserve Account.

Question. Fixed Deposits and Recurring Deposits are _________
A. repayable after an agreed period.
B. repayable on demand.
C. not repayable.
D. repayable on demand or after an agreed period as per bank‘s choice.

Answer : D. repayable on demand or after an agreed period as per bank‟s choice.
Explanation: A fixed deposit (FD ) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date.And Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with regular incomes to deposit a fixed amount every month
into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.