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Banking Awareness Quiz Set – 37

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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. Demat Accounts are
    A. Accounts in which shares of various companies are traded in electronic form
    B. Accounts which are operated through internet banking facility
    C. Accounts which are opened to facilitate repayment of a loan taken from the bank.
    D. Zero Balance Accounts
    A. Accounts in which shares of various companies are traded in electronic form
    Explanation:Shares and securities are held in dematerialised form in demat account. It is mandatory to have a demat account to carry out a transaction in stock exchange. Once an account is opened, you can buy shares by visiting a broker personally or online. To open a demat account, you need to get in touch with a registered depository participant (DP). It is just like a bank or broker.

  2. Cryptocurrency is a _______
    A. Digital payment
    B. Digital Medium of Exchange
    C. Both B & D
    D. Digital Currency
    C. Both B & D
    Explanation:A cryptocurrency is a medium of exchange like normal currencies such as USD, but designed for the purpose of exchanging digital information through a process made possible by certain principles of cryptography.

  3. Which one of the following is not true about Banking regulations?
    A. Credit Allocation
    B. Prudential Objectives
    C. Systematic Risk Reduction
    D. All are true
    D. All are true
    Explanation:The objectives of bank regulation, and the emphasis, vary between jurisdictions. The most common objectives are:1.Prudential: to reduce the level of risk bank creditors are exposed to 2.Systemic risk reduction:to reduce the risk of disruption resulting from adverse trading conditions for banks causing multiple or major bank failures 3.Avoid misuse of banks:to reduce the risk of banks being used for criminal purposes,e.g.laundering the proceeds of crime 4.To protect banking confidentiality 5.Credit allocation:to direct credit to favored sectors

  4. It is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities.
    A. Solvency Ratio
    B. Liquidity Ratio
    C. Capital Adequacy Ratio
    D. None of these
    C. Capital Adequacy Ratio
    Explanation:Capital Adequacy Ratio (CAR) is the ratio of a bank’s capital in relation to its risk weighted assets and current liabilities. It is decided by central banks and bank regulators to prevent commercial banks from taking excess leverage and becoming insolvent in the process.

  5. In banking CDR stands for
    A. Corporate Debt Restructuring
    B. Corporate Debt Rollover
    C. Corporate Deposit Restructuring
    D. None of these
    A. Corporate Debt Restructuring
    Explanation:Corporate Debt Restructuring mechanism is a voluntary non statutory mechanism under which financial institutions and banks come together to restructure the debt of companies facing financial difficulties due to internal or external factors, in order to provide timely support to such companies.

  6. The maximum time period for which domestic term deposits are generally accepted by banks in India is _________.
    A. 5 years
    B. 4 years
    C. 10 years
    D. 3 years
    C. 10 years
    Explanation:A term deposit is a cash investment held at a financial institution – bank, building society or credit union – for an agreed rate of interest over a fixed amount of time, known as a term.

  7. Which one of the following is not a key function of a Bank?
    A. Collecting Cheques/Drafts customers
    B. Granting Loans
    C. Easing import of goods
    D. Issuing Bank Drafts
    C. Easing import of goods
    Explanation:Primary functions:Collection of deposits, Making loans and advances
    Secondary functions:Agency services:General utility services

  8. Which asset can be mortgaged?
    A. Land and Building
    B. Sweat equity
    C. Illegally obtained funds
    D. Undocumented funds
    A. Land and Building
    Explanation:A mortgage is a way to use one’s real property, like land, a house, or a building, as a guarantee for a loan to get money. Many people do this to buy the home they use for mortgage: the loan provides them the money to buy the house and the loan is guaranteed by the house.

  9. What does the lowering of Bank Rate by the Reserve Bank of India leads to
    A. More liquidity in the market
    B. Less liquidity in the market
    C. Stability liquidity in the market
    D. None of these
    A. More liquidity in the market
    Explanation:Bank Rate is the rate at which central bank of the country (in India it is RBI) allows finance to commercial banks. Bank Rate is a tool, which central bank uses for short-term purposes. *Current Bank Rate: 7.75%

  10. Which is the loan of very small amounts given to low income groups?
    A. Macro Credit
    B. Micro Credit
    C. Micro Finance
    D. None of these
    B. Micro Credit
    Explanation:Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady employment and a verifiable credit history. It is designed not only to support entrepreneurship and alleviate poverty, but also in many cases to empower women and uplift entire communities by extension