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Banking Awareness Quiz Set – 35

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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. Reserve Bank of India uses __________ to control inflation in our country.
    A. Interest rate
    B. Decrease the SLR
    C. Increase in CRR
    D. None of these
    A. Interest rate
    Explanation:Repo rate influences most the given money supply in the economy. It is the rate at which the banks borrow short-term funds from the RBI. RBI raises repo rate to increase the overall cost of funds in the banking system. If the central bank hikes its repo rate, it becomes costly for banks to borrow money from RBI so they in turn hike the loan interest rates at which customers borrow money from them to compensate for the hike in repo rate.

  2. NIM stands for
    A. Net Interest Margin
    B. Net Involvement Margin
    C. Net Involution Margin
    D. Net Inflation Margin
    A. Net Interest Margin
    Explanation:Net interest margin is a measure of an investing strategy’s success, especially when investors are attempting to arbitrage the market by borrowing at a rate that they believe is below what their potential returns will be. Banks are keenly interested in their net interest margins because they lend at one rate and pay depositors at another.

  3. It is a contract where both parties agree to buy and sell a particular asset of specific quantity and at a predetermined price.
    A. Forward Contract
    B. Swap
    C. Futures Contract
    D. Options Contract
    C. Futures Contract
    Explanation:Futures contract is a contract between two parties where both parties agree to buy and sell a particular asset of specific quantity and at a predetermined price, at a specified date in future. The payment and delivery of the asset is made on the future date termed as delivery date. The buyer in the futures contract is known as to hold a long position or simply long. The seller in the futures contracts is said to be having short position or simply short.

  4. ___________ illustrates the financial position of a bank at a given point of time.
    A. Balance sheet
    B. Cash flow statement
    C. Income statement
    D. Audit
    A. Balance sheet
    Explanation:The balance sheet is among the main financial statements used in financial accounting. Keep in mind these main concepts: The balance sheet is like a snapshot of a company’s financial position, The balance sheet is comprised of two main sections:- Asset and Liability & Equity, The Balance sheet must always balance: the Asset section must always equal the Liability + Equity section.

  5. The largest bank in the world is
    A. BNP Paribas
    B. SBI
    C. HSBC Holdings
    D. Industrial & Commercial Bank of China
    D. Industrial & Commercial Bank of China
    Explanation:Four of the five largest banks in the world are Chinese. It’s a big change from the past few years when only two Chinese banks made the top five. Top 5 banks are-1. Industrial & Commercial Bank of China (China) 2. China Construction Bank (China) 3. Agricultural Bank of China (China) 4. HSBC (U.K.) 5. Bank of China (China)
    *Industrial & Commercial Bank of China-Founded: January 1, 1984, Beijing, China
    Headquarters: Xicheng District, Beijing, China

  6. ________ is used when describing the monthly charges on a mortgage.
    A. BITI
    B. CPI
    C. DPI
    D. PITI
    D. PITI
    Explanation:The acronym PITI stands for principal, interest, taxes, and insurance. These are the four components that make up a monthly mortgage payment. When determining your eligibility for a loan, your mortgage lender will look at your debt-to-income ratios, comparing your PITI to your monthly gross income. This helps them to determine how much you can afford.

  7. The first Indian bank to get ISO was ___________.
    A. PNB
    B. Canara Bank
    C. SBI
    D. Bank of Baroda
    B. Canara Bank
    Explanation:Canara Bank(HQ Bangalore,Karnataka) was established at Mangalore in 1906, making it one of the oldest banks in the country. The government nationalized the bank in 1969. In 1996 Canara Bank became the first Indian Bank to get ISO certification for “Total Branch Banking” for its Seshadripuram branch in Bangalore. Canara Bank has now stopped opting for ISO certification of branches.
    *Rakesh Sharma (MD & CEO)

  8. Which bank introduced cheque system in India?
    A. Presidency Bank
    B. Imperial Bank of India
    C. Bengal Bank
    D. PNB
    C. Bengal Bank
    Explanation:Cheque system was first introduced by Bengal Bank which was established in 1784. In 1833, cheque system was introduced by Bengal Bank.

  9. It is a tax which is levied at the same rate at all income levels.
    A. Progressive Tax
    B. Regressive Tax
    C. Proportional Tax
    D. Sales Tax
    C. Proportional Tax
    Explanation:Proportional tax system is one in which income tax is the same percentage of income from every person no matter how much income the person makes. A proportional tax system, often also referred to as a flat tax, does not consist of income tax brackets.

  10. A person who lends money against a pledged article which he or she is free to sell if the loan is not repaid within interest within a stated period is _________.
    A. Dealer
    B. Pawnbroker
    C. Investor
    D. None of these
    B. Pawnbroker
    Explanation:Pawnbroker is a small lender who lends money at a high interest rate and holds some of the borrower’s personal goods as collateral, to be sold to the public in the event of default.