Banking Awareness Quiz – Set 80

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. Poverty line is expressed in terms of an overall _______
   A. Per capita Income
   B. Per Capita consumption expenditure
   C. Per Capita entertainment expenditure
   D. Per Capita development expenditure
   E. Per Capita GDP
   
   Answer & Explanation

   B. Per Capita consumption expenditure
   Explanation:
   In India consumption-expenditure has been made the basis for the measurement of the minimum standard. The usual method is to fix a poverty level. This level is expressed in terms of an overall per capita consumption-expenditure.
   
   
2. The process by which the central bank of a country controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth is known as:
   A. Economic Policy
   B. Monetary Policy
   C. Fiscal Policy
   D. Credit Policy
   E. Budgetary Policy
   
   Answer & Explanation

   B. Monetary Policy
   Explanation:
   Monetary Policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI). is so designed as to maintain the price stability in the economy.
   
   
3. Loans granted by a bank to an exporter popularly known as ‘Export credit’ is guaranteed, in case of default,by which of the following
   A. EXIM Bank
   B. Ministry of International Trade, GOA
   C. ECGC
   D. DICGC
   E. Other than those given as options
   
   Answer & Explanation

   C. ECGC
   Explanation:
   ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce.
   
   
4. The ratio of deposits to loans of a bank is known as _______
   A. NPA coverage Ratio
   B. Return on asset ratio
   C. Asset Coverage ratio
   D. CD Ratio
   E. Other than those given as options
   
   Answer & Explanation

   E. Other than those given as options
   Explanation:
   The loan to deposit ratio is used to calculate a lending institution’s ability to cover withdrawals made by its customers.
   
   
5. In Bank’s balance sheet, which of the following is an asset?
   A. Its paid up capital
   B. Its saved deposits
   C. Its instrument in government securities
   D. Its accumulated Reserve Funds
   E. Its Current Deposits
   
   Answer & Explanation

   C. Its instrument in government securities
   Explanation:
   Bank assets comprises cash, money at short notice, bills and securities discounted, bank’s investments in government securities, loans sanctioned by the bank.
   
   
6. Who amongst the following is the regulator in the financial system of the country?
   A. Other than those given as options
   B. SEBI
   C. CRISIL
   D. TRAN
   E. CERC
   
   Answer & Explanation

   B. SEBI
   Explanation:
   The financial system in India is regulated by independent regulators in the field of banking, insurance, capital market, commodities market, and pension funds. Example of Financial Regulators: RBI, IRDAI, SEBI, PFRDA.
   
   
7. Which of the following is the negotiable instrument?
   A. Fixed Deposit of a Bank
   B. Share certificate issued by a PSU
   C. Demand Draft issued by a bank
   D. Debenture of a company
   E. Airway Receipt
   
   Answer & Explanation

   C. Demand Draft issued by a bank
   Explanation:
   A demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee).
   
   
8. In International Banking terms,”Appreciation” of Rupee means ________
   A. Excess of exports over imports
   B. Purchasing power of rupee has come down
   C. Availability of less foreign currency vis-a-vis rupee
   D. Excess of imports over exports
   E. Availability of more foreign currency vis-a-vis rupee
   
   Answer & Explanation

   C. Availability of less foreign currency vis-a-vis rupee
   Explanation:
   Currency Appreciation refers to increase in the value of domestic currency in terms of foreign currency. The domestic currency becomes more valuable and less of it is required to buy the foreign currency.
   
   
9. Bank Holidays are covered by which of the following?
   A. As per the order of the GOI
   B. As per the order of the IBA
   C. Negotiable Instruments Act
   D. RBI Act
   E. Other than those given as options
   
   Answer & Explanation

   C. Negotiable Instruments Act
   Explanation:
   Bank Holidays are declared by Central/State Governments/ Union Territory under the Negotiable Instruments (NI) Act, 1881.
   
   
10. A non performing Asset in Banking Business means ________
    A. A fixed asset of Bank is not been utilized
    B. A portion of deposits not been utilized
    C. A loan asset on which interest and/or instalments remain unchanged.
    D. All of the Above
    E. None of the Above
    
    Answer & Explanation

    C. A loan asset on which interest and/or instalments remain unchanged.
    Explanation:
    A nonperforming asset (NPA) refers to a classification for loans on the books of financial institutions that are in default or are in arrears on scheduled payments of principal or interest. In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days.