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Banking Awareness Quiz – Set 200

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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. ________ is the rate at which the central bank of a country borrows money from commercial banks within the country
    A. Repo Rate
    B. Reverse Repo Rate
    C. Base Rate
    D. MCLR
    E. None of these
    B. Reverse Repo Rate 
    Explanation:
    Reverse Repo rate is the rate at which the central bank of a country borrows money from commercial banks within the country

  2. The increase in the ______will increase the cost of borrowing and lending of the banks.
    A. Repo Rate
    B. Reverse Repo Rate
    C. Base Rate
    D. MCLR
    E. None of these
    A. Repo Rate
    Explanation:
    The increase in the Repo Rate will increase the cost of borrowing and lending of the banks.

  3. ________ is an instrument of monetary policy which involves buying or selling of government securities from or to the public and banks.
    A. CRR
    B. SLR
    C. MBS
    D. MCLR
    E. Open Market Operations
    E. Open Market Operations
    Explanation:
    Open Market Operations is an instrument of monetary policy which involves buying or selling of government securities from or to the public and banks.

  4. _______ is a certain percentage of bank deposits which banks are required to keep with RBI in the form of reserves or balances.
    A. CRR
    B. SLR
    C. MBS
    D. MCLR
    E. None of these
    A. CRR
    Explanation:
    CRR is a certain percentage of bank deposits which banks are required to keep with RBI in the form of reserves or balances.

  5. Every financial institution has to maintain a certain quantity of liquid assets with themselves at any point of time of their total time and demand liabilities. This is known as ______
    A. CRR
    B. SLR
    C. MBS
    D. MCLR
    E. None of these
    B. SLR
    Explanation:
    Every financial institution has to maintain a certain quantity of liquid assets with themselves at any point of time of their total time and demand liabilities. This is known as SLR.

  6. Which of the following makes bank rate policy effective and maintains stability in government securities market?
    A. CRR
    B. SLR
    C. MBS
    D. MCLR
    E. Open Market Operations
    E. Open Market Operations
    Explanation:
    Open Market Operations makes bank rate policy effective and maintains stability in government securities market

  7. The RBI sells government securities to _______ the flow of credit and buys government securities to ________ credit flow.
    A. Increase, Decrease
    B. Decrease, Increase
    C. Increase, Increase
    D. Decrease, Decrease
    E. None of these
    B. Decrease, Increase
    Explanation:
    The RBI sells government securities to decrease the flow of credit and buys government securities to increase credit flow.

  8. RBI is empowered to vary CRR between _______ and ______.
    A. 10%, 4%
    B. 10%, 2%
    C. 10%, 3%
    D. 10%, 1%
    E. None of these
    C. 10%, 3%
    Explanation:
    RBI is empowered to vary CRR between 10% and 3%

  9. _______ the CRR with the RBI ______ will be the liquidity in the system
    A. Higher, Lower
    B. Lower, Higher
    C. Lower, Lower
    D. Higher, Higher
    E. None of these
    A. Higher, Lower
    Explanation:
    Higher the CRR with the RBI Lower will be the liquidity in the system

  10. The maximum limit of SLR is ______
    A. 30%
    B. 35%
    C. 45%
    D. 40%
    E. None of these
    D. 40%
    Explanation:
    The maximum limit of SLR is 40%