Banking Awareness

1. In repo transaction, banks ________ RBI.
a) Lend to
b) Borrow from
c) Deposit money in a special account with
d) Extend a repurchase agreement
e) Both B and D

2. Sanjay, a minor aged 11 years, desires to open a saving account. His mother is illiterate and his father has become sanyasi. He has his grandparents. Who will be his natural guardian?
a) Father
b) Mother
c) Grand father
d) Guardian appointed by court
e) Sanjay himself can operate

3. The benefit accruing to traders who play in different markets, simultaneously - profits accrue, as markets are imperfect, is known as ______.
a) Leverage
b) Arbitrage
c) Derivative
d) Swap
e) None of the above

4. A minor for whom the court has appointed a guardian attains majority on completion of
a) 21 years
b) 18 years
c) 15 years
d) 17 years
e) 20 years

5. In saving account deposits, interest is paid on ________ balance
a) Maximum
b) Average daily
c) Half yearly average
d) Balance at the end of month
e) None of the above

6. A stop payment instruction of a cheque can be issued by?
a) The payee b) The endorsee
c) The drawer d) The drawee
e) None of the above

7. The level of SLR to be maintained is mentioned in ________.
a) RBI Act 1934
b) BR Act 1949
c) Companies Act 1956
d) NI Act 1885
e) None of the above

8. Which of the following components is exempted from DTL (Demand and Time Liabilities) calculation?
a) Foreign outward remittances in transit
b) Net inter-bank borrowings/ deposits with maturity not exceeding 14 days (call/ notice money liability)
c) Demand and time deposits
d) Overseas borrowings
e) None of the above

9. Forged cheque is_________.
a) Valid for payment
b) Invalid and hence cannot be paid
c) Post-dated and hence cannot be paid
d) Stale-cheque and hence cannot be paid
e) Ante-dated and hence cannot be paid

10. Security feature available with smart card:
a) Multiple pins
b) Retinal pattern verification
c) Dynamic signature verification
d) Vein recognition
e) All of the above

11. A bank on whom a cheque is drawn by the customer is called as _______
a) Collecting bank
b) Paying bank
c) Advising bank
d) Issuing bank
e) Confirming bank

12. In the term money (a money market instrument), funds borrowed by banks need to be repaid ________.
a) On the same day
b) On the next working day
c) Within a fortnight
d) Within a year
e) Within three years

13. Derivates refer to ________ price.
a) Past
b) Present
c) Future
d) Market
e) None of the above

14. As a practice, all banks now deduct some amount from their pretax income and set aside in a separate account to create a cushion against loans which may go bad. This is called?
a) CRR
b) SLR
c) Provisioning
d) PLR
e) None of the above

15. Which of the following statements regarding CP is not correct?
a) CP is a negotiable instrument
b) CP is issued in the form of a promissory note
c) Banks can invest in CP if it is issued in Demat form
d) CP, being a tradable instrument, carries liquidity risk
e) Minimum amount of CP should be Rs.5 lakh

16. One of the following statements is not true with respect to RTGS:
a) Funds are transferable from the branch of one bank to the branch of another bank
b) Only the corporate and Government departments can avail of the facility
c) The RTGS system is maintained and operated by the RBI
d) Each participant bank here of the RTGS will be required to open a dedicated settlement account for putting through its RTGS transactions
e) None of the above




Answers:

1. E
2. B
3. B
4. A
5. B
6. C
7. B
8. B
9. B
10. E
11. B
12. D
13. C
14. C
15. D
16. B