Banking Awareness Quiz – Set 104

Hello Aspirants,
Welcome to Banking Awareness Quiz in AffairsCloud.com. Here we are creating quiz covering important questions which are common for all the bank exams and other competitive exams.

1. Small finance banks are a type of ______ banks in our country.
   A. niche
   B. investment
   C. industrial
   D. All of the Above
   E. None of the Above
   
   Answer & Explanation

   A. niche
   Explanation:
   Small finance banks are a type of niche banks in India.Niche Bank is a specialised bank which deals only with certain types of customers or services.
   
   
2. Which of the following service(s) is/are available in small finance banks?
   A. Providing loans
   B. Acceptance of deposits
   C. Setting up of Subsidiaries
   D. Both (A) and (B)
   E. None of the Above
   
   Answer & Explanation

   D. Both (A) and (B)
   Explanation:
   Banks with a small finance bank license can provide basic banking service of acceptance of deposits and lending.
   
   
3. According to RBI Regulations, which of the following are allowed to set up small finance banks?
   A. NBFC
   B. MFI
   C. LAB
   D. All of the Above
   E. None of the Above
   
   Answer & Explanation

   D. All of the Above
   Explanation:
   The firms must have a capital of Rs.100 crore.Existing non-banking financial companies (NBFC), micro-finance institutions (MFI) and local area banks (LAB) are allowed to set up small finance banks.
   
   
4. Reserve Bank of India gave provisional licences to _______ entities to launch small finance banks.
   A. 10
   B. 11
   C. 12
   D. 13
   E. None of the Above
   
   Answer & Explanation

   A. 10
   Explanation:
   Reserve Bank of India gave provisional licences to 10 entities out of 72 applicants to launch small finance banks.
   The selected applicants are: Au Financiers (Jaipur), Capital Local Area Bank (Jalandhar), Disha Microfin (Ahmedabad), Equitas Holdings (Chennai), ESAF Microfinance and Investments (Chennai), Janalakshmi Financial Services (Bengaluru), RGVN (Northeast) Microfinance (Guwahati), Suryoday Micro Finance (Navi Mumbai), Ujjivan Financial Services (Bengaluru) and Utkarsh Micro Finance (Varanasi).
   
   
5. Minimum paid-up capital of small finance banks is _______
   A. 100 crore
   B. 200 Crore
   C. 500 crore
   D. 1000 crore
   E. None of the Above
   
   Answer & Explanation

   A. 100 crore
   Explanation:
   Minimum paid-up capital of small finance banks is Rs.100 crore.
   
   
6. The small finance banks will be licensed under ______ of the Banking Regulation Act, 1949.
   A. Section 21
   B. Section 22
   C. Section 23
   D. Section 24
   E. None of the Above
   
   Answer & Explanation

   B. Section 22
   Explanation:
   The small finance banks will be licensed under Section 22 of the Banking Regulation Act, 1949.
   
   
7. An external advisory committee headed by _______ evaluated the license applications for small finance banks.
   A. NR Madhawan Menon
   B. Usha Thorat
   C. Nachiket Mor
   D. Y.H. Melagam
   E. None of the Above
   
   Answer & Explanation

   B. Usha Thorat
   Explanation:
   An external advisory committee headed by Usha Thorat evaluated the license applications for small finance banks.
   
   
8. ______ percentage of Foreign share holding will be allowed in small finance banks as per the rules for FDI in private banks in India
   A. 64%
   B. 74%
   C. 61%
   D. 50%
   E. None of the Above
   
   Answer & Explanation

   B. 74%
   Explanation:
   Foreign share holding will be allowed in these banks as per the rules for FDI in private banks in India. Foreign shareholding capped at 74% of paid capital.
   
   
9. Which of the following can be provided by small finance banks
   A. Mutual Funds
   B. Insurance Products
   C. Third Party financial products
   D. All of the Above
   E. None of the Above
   
   Answer & Explanation

   D. All of the Above
   Explanation:
   Small finance banks can distribute mutual funds, insurance products and other simple third-party financial products.
   
   
10. Maximum loan size to a single person cannot exceed ________ of total capital funds.
    A. 30%
    B. 20%
    C. 11%
    D. 10%
    E. None of the Above
    
    Answer & Explanation

    D. 10%
    Explanation:
    Maximum loan size to a single person cannot exceed 10% of total capital funds; cannot exceed 15% in the case of a group.
    Small finance bank can
    lend 75% of their total adjusted net bank credit to priority sector
    Maximum loan size would be 10% of capital funds to single borrower, 15% to a group
    Minimum 50% of loans should be up to 25 lakhs.