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Banking Awareness Quiz Set – 39

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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. Who decides Bank rate?
    A. Government
    B. RBI
    C. SEBI
    D. SBI
    B. RBI
    Explanation:Bank rate is the rate at which RBI lends money to commercial banks for meeting shortfall for a long period without selling or buying any security. Bank rate would be always higher than Repo rate.

  2. These are the reserves that are held by Commercial Banks over and above the statutory minimum with the central bank.
    A. Excess reserves
    B. Cash reserves
    C. Deposit reserves
    D. Momentary reserves
    A. Excess reserves
    Explanation:Banks are required to have at the end of each day reserves equal at least to a certain percentage of their loans (possibly adjusted for the risk of each of the loans). If the bank has taken in more deposits or increased owner’s equity (with retained profits or by selling more stock) or had loans paid off or borrowed money, it might have more reserves than the minimum required. Those banks loan money to the banks that are short on reserves and vice versa.

  3. Who sponsors Regional Rural Banks?
    A. Government of India
    B. Reserve Bank of India
    C. Nationalised Commercial Bank
    D. None of these
    C. Nationalised Commercial Bank
    Explanation:RRBs like any other commercial banks (PSBs or PVT sector banks) are governed by BRAct, RBI Act and other guidelines issued by Ministry of Finance, Government from time to time. But each RRB has a Board of Directors consisting of nine members headed by the Chairman, who generally belongs to the Sponsor Bank. NABARD is responsible for overall supervision and inspection of the RRBs.

  4. India’s first bi-metallic coins issued in the year 2009 were denominated in ____.
    A. Rs. 1
    B. Rs. 50
    C. Rs. 5
    D. Rs. 10
    D. Rs. 10
    Explanation:Bi-metallic coins are coins consisting of more than one metal or alloy, generally arranged with an outer ring around a contrasting center. India’s much awaited first ever bimetallic 10 rupee coin was released in 2005 under the theme “Unity in Diversity”. But, due to its controversial design resembling a cross, it was criticised and was not minted in large numbers. Another reason for its availability being scarce is that it was minted only in one (Noida) of four mints in India.

  5. Because of the existence of _________ India is called a mixed economy.
    A. Private Sector
    B. Corporate Sector
    C. Public Sector
    D. Both A & C
    D. Both A & C
    Explanation:A mixed economy consists of both private companies and government/state-owned entities. Both have control of owning, making, selling, and exchanging goods in the country. Where there is both capitalism and socialism. Mixed economy is somehow referred as the best economy. Mixed economy increases the competition between socialism and capitalism and hence deliver the best quality.

  6. RRBs are working in all states of the country except _______.
    A. Sikkim
    B. Goa
    C. Andhra Pradesh
    D. Both A & B
    D. Both A & B
    Explanation:RRB’s were established by the Government of India in the year 1975. Their establishment was followed by the 1976 Regional Rural Banks Act. These have had the main agenda to develop the economy of the rural areas, and to enlarge credit amount of these areas as well as the agricultural sectors.

  7. It is the amount outstanding in the borrowal account in books of the bank other than the one which has been recorded and not debited to the borrowal account.
    A. Net NPAs
    B. Gross NPAs
    C. Both A & B
    D. None of these
    B. Gross NPAs
    Explanation:The term NPA or Non-Performing Asset is usually used in Indian banking to define a loan which is not getting repaid. Such loans also have to be provided for, by reducing the profit by a certain predetermined formula. So assuming that a bank gave a loan of Rs.100/- of which maybe Rs.3/- was repaid, then Gross NPA is Rs.97/-. Then the bank makes a provision of Rs.2/-, so the Net NPA becomes Rs.95/-. In this highly simplified example, interest charged on the loan has been subsumed into the original Rs.100/-

  8. Non-Performing Asset is an advance where the a/c remains overdue for a period of more than ______ in the case of respect of an Overdraft/Cash Credit.
    A. 180 Days
    B. 90 Days
    C. 60 Days
    D. 6 Months
    B. 90 Days
    Explanation:If there are no customer-induced credits in the account to provide for the bank’s claims in terms of interest and other charges for a period of at least 90 days.

  9. It is a number which basically represents the value in rupees per fund units as on a particular date of the assets of the fund less liabilities and outstanding expanses.
    A. YTM
    B. NAV
    C. MFs
    D. None of these
    B. NAV
    Explanation:NAV is often associated with mutual funds, and helps an investor determine if the fund is overvalued or undervalued. When we talk of open-end funds, NAV is crucial. NAV gives the fund’s value that an investor will be entitled to at the time of withdrawal of investment. In case of a close-end fund, which is a mutual fund with fixed number of units, price per unit is determined by market and is either below or above the NAV.

  10. The banks joins together to meet the working capital requirements of the borrowing concerns and it is called as
    A. Consortium finance
    B. CMA
    C. Credit Syndication
    D. None of these
    A. Consortium finance
    Explanation:Consortium financing occurs for transactions that might not take place with a single lender. Several banks may agree to jointly supervise a single borrower with a common appraisal, documentation and follow-up. Consortiums are not built to handle international transactions such as a syndication loan; instead, a consortium may arise because the size of the project at hand is simply too large or too risky for any single lender to assume.