Banking Awareness Important Questions Set 1 For IBPS PO & Clerk

 1. What is a Repo Rate? 

a) It is a rate at which RBI sell government securities to banks 
b) It is a rate at which banks borrow rupees from RBI 
c) It is a rate at which RBI allows small loans in the market 
d) It is a rate which is offered by Banks to their most valued customers or prime customers 
e) None of these 

2. The Bank of Calcutta, Bank of Bombay and Bank of Madras were merged in 1921 to form

a) Reserve Bank of India      

b) Imperial Bank of India         
c) Bank of India            
d) Union Bank of India      
e) None of these

3. Which of the following cannot be called as a Debt Instrument as referred in financial transactions? 
a) Certificate of Deposits
b) Bonds 
c) Stocks
d) Commercial Papers 
e) Loans 

4. Whenever RBI does some Open Market Operation Transaction, actually it wishes to regulate  which of the following? 
a) Inflation only 
b) liquidity in economy 
c) Borrowing powers of the banks 
d) Flow of Foreign Direct Investments 
e) None of these 

5. The maximum amount of the total Revenue earned by the government of India comes from: 
a) Income Tax 
b) Customs Duty 
c) Excise Duty 
d) Value Added Tax 
e) Corporate Tax 

6. Which was the first Indian Bank to introduce credit card? 
a) State Bank of India
b) Central Bank of India 
c) Union Bank of India 
e)  None of these

7. Capital Market Regulator is—
a) RBI
b) IRDA 
c) NSE 
d) BSE 
e) SEBI 

8. FDI refers to—
a) Fixed Deposit Interest 
b) Fixed Deposit Investment 
c) Foreign Direct Investment
d) Future Derivative Investment 
e)  None of these 

9. What is Call Money ? 
a) Money borrowed or lent for a day or over night 
b) Money borrowed for more than one day but upto 3 days 
c) Money borrowed for more than one day but upto 7 days 
d) Money borrowed for more than one day but upto 14 days 
e) None of these 

10. Which is the first Indian company to be listed in NASDAQ ? 
a)  Reliance
b) TCS 
c)  HCL
d) Infosys 
e)  None of these 

11. What is the  full form of 'P-notes' ? 
a) permanent notes 
b) purchase notes 
c) participatory notes
d) private notes 
e)  None of these 

12. Which of the following is known as plastic money? 
a) bearer cheques 
b) credit cards
c) demand drafts
d) gift cheques 
e)  None of these 

13. Which sister organization of the World Bank provides long term loans at zero interest to the poorest developing countries? 
a) Asian Development Bank 
b) IMF 
c) International Developmental Association 
d) International Finance Corporation 
e)  None of these 

14. Debt Service Coverage Ratio (DSCR) indicates the ability of a company to- 
a) Meet its current liabilities
b) Service its share holders 
c) Company's ability to pay long term debt.
d) Raise further capital 
e) None of these 

15. The twelfth ‘Five Year Plan’ of India is for the five years ranging from-
a) 2009-2014        
b) 2008 -2013        
c) 2007-2012        
d) 2012-2017       
e) 2010-2015

16. What does devaluation of a currency mean?
a) decrease in the internal value of money
b) decrease in the external value of money 
c) decrease both in the external and internal values of money
d) increase both in the external and internal values of money
e) None of these

17. When the rate of inflation increases?

a) Purchasing power of money increases 
b) Purchasing power of money decreases
c) Value of money increases
d) Purchasing power of money remains unaffected
e) Amount of money in circulation decreases

18. A centralized database with online connectivity to branches, internet as well as ATM-network which has been adopted by almost all major banks of our country is known as?

a) Investment Banking 
b) Core Banking 
c) Mobile Banking
d) National Banking 
e) Specialized Banking

19. Which of the following is NOT considered a money market instrument?

a) Treasury Bills 
b) Repurchase Agreement 
c) Commercial Paper 
d) Certificate of Deposit 
e) Shares and Bonds

20. A decreasing current ratio indicates-

a) A stable liquidity       
b) An increasing liquidity     
c) A strained liquidity   
d) satisfactory current solvency     
e) None of these

21. Which of the following is not a banking term? 

a) Letter of credit 
c) Factoring services 
d) Entry load 
e) None of these 

22. Which of the following organizations issue the rules of global trade? 

a) IMF 
b) World Trade Organization 
c) Foreign trade 
d) G-20 
e) None 

23. One single statement that depicts the financial position of a Bank and / or Business enterprise at a given point of time is called: 

a) Statement of product details 
b) Foreign exchange
c) Balance Sheet 
d) Balance of payment 
e) Trading and Manufacturing account 

24. Which of the following scheme is not meant for investment purposes?

a) National saving certificate 
b) Infrastructure bonds 
c) Mutual funds 
d) Letter of credit 
e) None of these 

25. Basel norms which are important regulatory stipulations are meant for which sector? 

a) Insurance 
b) Banking 
c) Micro finance 
d) Pension funds 
e) None 

26. Euro money is the official currency of?

a) NATO 
b) UN 
c) European 
d) Germany and England 
e) None of these 

27. Which is the largest commercial bank in India?

a) Reserve Bank of India      
b) State Bank of India     
c) ICICI Bank   
d) Bank of India
e) None of these 

28. Whose signature appears on Indian Rs. 100 note? 

a) Finance Minister 
b) RBI Governor 
c) Finance Secretary 
d) Chairman, Planning Commission 
e) None 

29. While discussing investments there is a mention of short term government security. What is this investment?

a) Debenture 
b) Mutual funds 
c) Treasury bill 
d) Share 
e) None of these 

30. What is the full form of NBFCs.

a) New Banking Financial Companies 
b) Non Banking Financial Companies 
c) Neo Banking Financial Confederation 
d) Non banking Fiscal Companies 

31. Banking loan against property requires the asset to be free from encumbrances. What does it mean? 

a) The asset to be free from any liability 
b) The asset to be properly registered 
c) The property to be fully constructed 
d) The asset should not have multiple owners 
e) None 

32. What is CASA? 

a) Customer Analysis and Savings Pattern 
b) Cost Appreciation and selling Analysis 
c) Current Account and saving Account 
d) Credit and savings Aggregate 
e) None of these 

33. Which one of the following is not an electronic banking delivery channel?

a) Mobile Vans
d) Mobile Phone Banking 
c) Internet Banking 
d) Tele Banking 
 e) ATM

34. The Rate at which the domestic currency can be converted into foreign currency and vice-versa is known as the ____

a) Exchange rate 
c) Inter bank Call money rate 
d) Base rate 

35. Now-a-days Banks are selling third party products. Example of third party product is:

a) Mutual funds 
b) Term deposits
c) credit cards
d) All of these 
e) None 

36. Electronic Clearing Service in banks can be availed only by:

a) Individuals 
b) Corporates 
c) Senior Citizens 
d) All of these 
e) None

37. Interest payable on savings bank accounts is? 

a) Not regulated by RBI
b) Regulated by State Governments 
c) Regulated by Central Govt 
d) Regulated by RBI 
e) Regulated by Finance Minister 

38. The usual deposit accounts of banks are? 

a) Current accounts, electricity accounts and insurance premium accounts. 
b) Current accounts, post office savings, bank accounts and term deposit accounts. 
c) Loan accounts, savings bank accounts and term deposit accounts. 
d) Current accounts, savings bank accounts and term deposit accounts. 
e) Current bill accounts and term deposit accounts. 

39. Fixed deposits and recurring deposits are? 

a) Repayable after an agreed period 
b) Repayable on demand 
c) Not repayable 
d) Repayable after death of depositors 
e) Repayable on demand or after an agreed period as per bank's choice 

40. Accounts are allowed to be operated by cheques in respect of? 

a) Both savings bank accounts and fixed deposit accounts. 
b) Savings bank accounts and current accounts. 
c) Both savings bank accounts and loan accounts. 
d) Both savings bank accounts and cash accounts only. 
e) Both current accounts and fixed deposit accounts. 

41. Interest rate risk is a type of

(1) Credit risk     
(2) Market risk          
(3) Operational risk    
(4) All the above    
(5) None of these

42. Banking services delivered to a customer by means of a computer control system that does not directly involve banks branch is called? 

a) Universal banking 
b) Virtual banking 
c) Narrow banking
d) Brick & Mortal banking 
e) None 

43. Financial inclusion means provision of ? 

a) Financial services namely payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the bank 
b) Ration at affordable cost to persons not yet given the same 
c) House at affordable cost to persons not yet given the same 
d) Food at affordable cost to persons not yet given the same 
e) Education at affordable cost to persons not yet given the same 

44. When a bank returns a cheque unpaid, it is called? 

a) Payment of the cheque 
b) Drawing of the cheque 
c) Canceling of the cheque 
d) Dishonour of the cheque
e) Taking of the cheque 

45. Which of the following types of accounts are known as 'Demat Accounts'? 

a) Accounts which are Zero Balance 
b) Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there 
c) Accounts in which shares of various companies are traded in electronic form 
d) Accounts which are operated through internet banking facility 
e) None of the above 

46. NEFT means? 

a) National Electronic Funds Transfer 
b) Negotiated Efficient Fund Transfer system 
c) National Efficient Fund Transfer solution 
d) Non Effective Fund Transfer system 
e) Negotiated Electronic Foreign Transfer system. 

47. Distribution of insurance products and insurance policies by banks as corporate agents is known as? 

a) General insurance 
b) Non life insurance
c) Bancassurance 
d) Insurance Banking 
e) Deposit Insurance 

48. What is a stale cheque? 
a) A cheque issued without drawer's signature.
b) A cheque with only signature of the drawer. 
c) A cheque which has completed 6 months from the date of its issue. 
d) Any one of the above. 
e) None 

49. Interest on savings bank account is now calculated by banks on? 

a) Minimum balance during the month 
b) Minimum balance from 7th to last day of the month 
c) Minimum balance from 10th to last day of the month 
d) Maximum balance during the month 
e) Daily product basis

50. Largest shareholder (in percentage shareholding) of a Nationalized bank is ? 
a) RBI 
c) LIC 
d) Govt of India 
e) IBA 

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