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BestGuruSuccessMantraforRRBOfficerScaleI,II,IIIExam

(tobeheldinSeptember2014)
Part4FinancialAwarenessSpecial

RajeshGoyal*

(Rajesh Goyal joined as Management Trainee (also called PO) in a nationalized Bank in 1980 and
worked for over 30 years in banking sector, and took VRS from the post of Assistant General
Manager. He is also the owner and editor of www.AllBankingSolutions.com - the most popular
website among the serving and retired bankers)

Disclaimer:Weatbestguru.comhavetriedourbesttocompilethestudymaterial,whichisbeing
providedabsolutelyFREEofcost,fromvariousauthenticsources.However,candidates,incaseof
doubt,areadvisedtorecheckthesamefromtheirownsources.Wewillnotberesponsibleforany
mistake/omissionforwhatsoeverreasons.

Releasedon:3rdSeptember,2014

StudyMaterialforFinancialAwareness

Financial Awareness (Traditional) Questions for Regional


Rural Bank Exams for Officers and Assistants to be Held in
September 2014

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Q1 : Which of the following organizations, provides credit history of the borrowers?

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(a) SEBI
(b) CIBIL
(c) RBI
(d) IBA

Answer CIBIL

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(a) DRI Loans


(b) Loans under Housing Scheme
(c) Weaker Section Loans
(d) Micro Credit

Q2 : Loans of very small amounts not exceeding Rs. 50,000 per borrower granted by
financial institutions are recognised by which of the following names?

Answer Micro Credit

Q3 : Which one of the following agencies/companies, is established by banks and financial


institutions for the specific purpose of dealing in sale/ purchase of distressed Assets?

(a) ARCIL
(b) FITCH
(c) SEBI
(d) IDBI

Answer ARCIL
Q4 : What is the major cause, which compelled adoption of Basel II norms by banks?
(a) Risk management
(b) To adopt international standards of accounting
(c) Transparency in disclosure

(d) RBI forced all banks to control money supply


Answer Risk management
Q5 : Which of the following card product issued by the banks works on the principle of
'Buy Now Pay Later'?

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(a) ATM Card


(b) Debit Card
(c) Credit Card
(d) Charge Card

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Answer Credit Card

Q6 : Which of the following is the most essential financial service which needs to be
provided to the poor people so as to bring them in the network of financial inclusion?

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(a) Insurance for life


(b) investment plan for future
(c) Pension for old age
(d) A bank account where he/she can save small amount

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Answer A bank account where he/she can save small amount

Q7 : What does the letter F denote in 'NBFCs' ?

(a) Formal
(b) Fiscal
(c) Federal
(d) Functional

Answer Functional
Q8 : We know Standard and Poors is a Credit Rating Agency of international repute.
Which of the following is a Rating Agency operating in India?
(a) BASEL
(b) IBA
(c) RBI

(d) CRISIL

Answer CRISIL
Q9 : Which of the following services/products of banks is specially designed and launched
to help students?

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(a) Educational Loan


(b) Personal Loan
(c) Marriage Loan
(d) Medical Loan

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Answer Educational Loan

Answer SENSEX

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(a) Open Market Operations


(b) Cash Reserve Ratio
(c) SENSEX
(d) Public Debt Office

Q10 : Which of the following terms is NOT directly associated with the functioning of RBI?

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Q11 : Which of the following is one of the major activities of the National Bank of
Agriculture and Rural Development (NABARD)?

(a) On-site inspection of Cooperative Banks and Regional Rural Banks (RRBs)
(b) Helping Govt. of India in preparing Union Budget and presenting it in the Cabinet
Meeting
(c) Acting as custodian of the foreign exchange reserves of the country
(d) Representing India in World Bank and other such agencies

Answer On-site inspection of Cooperative Banks and Regional Rural Banks (RRBs)

Q12 : Performance of which of the following is NOT considered infrastructural sector of


economy?
(a) Electricity
(b) Textile Sector
(c) Telecom

(d) Cement

Answer Textile Sector


Q13 : Which of the following is NOT the name of the currency of a country?

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(a) Eucador
(b) Pound
(c) Dinar
(d) Rand

Q14 : What is the full form of 'ECB'?

(a) Essential Commercial Banking


(b) European Credit For Business
(c) External Commercial Borrowing
(d) External Credit For Business

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Answer Eucador

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Answer External Commercial Borrowing

Q15 : What do you understand by financial inclusion?

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(a) Making available banking services at an affordable cost


(b) Opening Savings Accounts in Rural areas without any deposit
(c) Opening any type of account without introduction
(d) Distributing money through rural branches

Answer Making available banking services at an affordable cost

Q16 : What is meant by money laundering?

(a) Conversion of cash into gold


(b) Conversion of assets into cash
(c) Conversion of illegally obtained money into accountable money
(d) None of these
Answer Conversion of illegally obtained money into accountable money
Q17 : We come across the term 'PPP' in financial news nowadays. What does 'PPP' stands
for ?

(a) Personal Percapita Power


(b) Private Public Partnership
(c) Percapita Potential for Purchases
(d) Pure Purchase parity
Answer Private Public Partnership

Q18 : Bank deposits that can be withdrawn without notice are known as :

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(a) Account Payee deposits


(b) Fixed deposits
(c) Demand Deposits
(d) Variable Deposits

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Answer Demand Deposits

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Answer Letter of Credit

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(a) Line of Credit


(b) Loan to Client
(c) Loan on Credit
(d) Letter of Credit

Q19 : Banks issue a letter to beneficiary on behalf of its constituents like guarantee for
making payment in their behalf on fulfilment of its terms and conditions. What is this
arrangement known in banking context?

Q20 : Banks are considered as 'financial intermediaries'. Which of the following activity
correctly and comprehensively explains this role of banks?

(a) Accepting deposits of money for the purpose of lending and investment
(b) Granting loans to the weaker sections of the society
(c) Accepting money for remittance and issuing bank drafts
(d) Providing safe deposit services

Answer Accepting deposits of money for the purpose of lending and investment
Q21 : The rate below which banks cannot generally lend is now a days known as
(a) Base rate
(b) Floor rate
(c) Repo rate
(d) Call money rate

Answer Base rate


Q22 : Which of the following is not a type of Cheque?

(a) Crossed cheque


(b) Blank cheque
(c) Speed cheque
(d) Bearer cheque

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Answer Speed cheque

Q23 : In relation to credit given by banks, what is the meaning of "Ever-Greening Loan
Account"?

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(a) Full repayment of a loan account before maturity - Pre-Payment


(b) Liberal granting of loans to agriculture sector
(c) Fresh loan sanctioned during the tenure fo account for enhancement of limits
(d) Adjusting the NPA/Sticky account with fresh santion of loans

Answer Adjusting the NPA/Sticky account with fresh santion of loans

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Q24 : Which of the following functions is not being performed by the Reserve Bank of
India?

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(a) Regulation of Banks in India


(b) Regulation of Foreign Direct Investment in Inda
(c) Foreign Currency Management in India
(d) Control & Supervision of Money Supply

Answer Regulation of Foreign Direct Investment in Inda

Q25 : When does a bank is known as 'Scheduled Bank'?

(a) Its business has crossed Rs. 1,000 crore mark.


(b) Its branch network is over 100
(c) It is included in the second Schedule of the RBI Act
(d) When it complies with all the three above
Answer It is included in the second Schedule of the RBI Act
Q26 : In case you need cash at odd hours, which among these is the fastest mode of
withdrawal of money?

(a) Net banking


(b) Mobile banking
(c) Para banking
(d) ATM
Answer ATM

Q27 : The term Smart Money refers to.

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(a) foreign Currency


(b) Internal Banking
(c) Credit Card
(d) Travelers Cheques

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Answer Credit Card

Q28 : Banking Ombudsman Scheme is applicable to the business of..

(a) All scheduled commercial banks excluding RRBs


(b) All Scheduled Commercial banks including RRBs
(c) Only Public sector banks
(d) Al Non-Banking Finance Companies

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Answer All Scheduled Commercial banks including RRBs

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Q29 : which one transfers money from one bank to another internationally?

(a) SWIFT (is an international communication system among banks


(b) RTGS
(c) NEET
(d) All of the above
Answer SWIFT (is an international communication system among banks

Q30 : Money earned from stocks is called

(a) Fringe Benefit


(b) Capital Gain
(c) Monetary Gains
(d) Stocks Gains

Answer Capital Gain


Q31 : NEFT means ?

(a) National Electronic fund Transfer system


(b) Negotiated Efficient Fund Transfer System
(c) National Efficient Fund Transfer Solution
(d) Non Effective Funds Transfer System

Q32 : What is the maximum deposit amount insured by DICGS ?

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(a) Rs. 2,00,000 per depositor per bank


(b) Rs. 2,00,000 per across all banks
(c) Rs. 1,00,000 per depositor per bank
(d) 2,00,000 per across all banks

Answer National Electronic fund Transfer system

Answer Rs. 1,00,000 per depositor per bank

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Answer Individual Banks

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(a) Individual Banks


(b) Finance Ministry
(c) SEBI
(d) RBI

Q33 : Base Rate is the rate below which no bank can allow their lending to anyone. Who
sets this 'Base Rate' for banks?

Q34 : 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

Answer Repayable after an agreed period


Q35 : What does the letter 'P' denote in term PAN which is issued by IT department?
(a) Primary
(b) Partial
(c) Permanent
(d) Public

Answer Permanent
Q36 : Regional Rural Banks

(a) Have limited area of operation and access to refinance from NABARD
(b) Are required to lend only to narrow sections
(c) Are mandated to do only narrow banking
(d) Can only extend agricultural loans

Q37 : What is the full form of the term FDI?

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(a) Foreign Direct Investment


(b) Foreign Diverse Investment
(c) Fixed Deposit Investment
(d) Floating Deposit Investment

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Answer Have limited area of operation and access to refinance from NABARD

Answer Foreign Direct Investment

Q38 : Which of the following is decided by the RBI?

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(a) Interest rate on time deposits


(b) Rent of safe deposit valuts
(c) Inflation rate
(d) Cash Reserve Ratio

Answer Cash Reserve Ratio

Q39 : What does the letter "C" denote in the term CBS as used in banking operations?

(a) Central
(b) Critical
(c) Commercial
(d) Core

Answer Core
Q40 : The term "plastic Money" refer to (a) ATM/credit cards
(b) Pastic-wated currency notes

(c) Foreign currency Notes


(d) None of these

Answer ATM/credit cards


Q41 : NABARD was established on the recommendation of -

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(a) Public account committee


(b) Shivaraman committee
(c) Narsimham committee
(d) None of these

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Answer Shivaraman committee

Answer Financial inclusion

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(a) Monetary policy


(b) Fiscal policy
(c) Financial inclusion
(d) Price control

Q42 : Which of the following is not a measure to control inflation adopted by the
government and or the RBI?

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Q43 : Which of the following is /are considered a policy rate (s) in the hands of the RBI? (i)
Repo Rate, (ii) SLR, (iii) Inflation

(a) Only (i)


(b) Only (ii)
(c) Only (iii)
(d) Only (i) and (ii)

Answer Only (i) and (ii)

Q44 : Which one of the following is not a function of the central bank in a economy?
(a) Dealing with foreign exchange
(b) Controlling monetary policy
(c) Controlling government spending
(d) Acting as a banker's bank

Answer Controlling government spending


Q45 : S.D.R. stands for-

Answer Special Drawing Rights


Q46 : "Open market operation" is a part of -

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(a) Income policy


(b) Fiscal policy
(c) Credit policy
(d) Labour policy

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(a) Special Dollar Rights


(b) Special Drawing Rights
(c) State Drawing Rights
(d) Specific Dollar Rights

Answer Credit policy

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Q47 : In order to attract more foreign exchange the govt of India decided to allow foreign
investment in LLP firms what is full form of "LLP" as used in this reference?

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(a) Local Labour promotion


(b) Low labour projects
(c) Longer liability partnership
(d) Limited Liability partnership

Answer Limited Liability partnership

Q48 : MCX is the index of which of the following stock exchanges of India?

(a) NSE
(b) BSE
(c) Delhi stock exchange
(d) Multi commodity stock exchange

Answer Multi commodity stock exchange


Q49 : The term "Deficit Financing " means the Government borrows money from the:
(a) IMF

(b) World Bank


(c) RBI
(d) BRICS

Answer RBI

Q50 : Certificates of Deposits have a minimum value of:

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(a) Rs 1 lakh
(b) Rs 10 lakh
(c) Rs 25 lakh
(d) Rs 1 crore

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Answer Rs 1 lakh
Q51 : ARCIL is an example of:

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(a) A financial institution


(b) A mutual fund
(c) An asset management company set up to acquire NPAs of banks
(d) None of these

Answer An asset management company set up to acquire NPAs of banks

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Q52 : NABARD has started its Farmer's Club Scheme which plays a major role in uplifting
the Sheep and Goat Rearing Sector and Pashmina Rearing in which of the following states?

(a) Andhra Pradesh


(b) Maharashtra
(c) Sikkim
(d) Jammu and Kashmir

Answer Jammu and Kashmir

Q53 : Which one of the following is not an electronic Banking delivery channel?
(a) Mobile Vans
(b) Mobile Phone Banking
(c) Internet Banking
(d) Tele Banking

Answer Mobile Vans


Q54 : Different stakeholders have raised concerns over RBIs Nachiket Mor panels
recommendation to create dedicated banks for rural inclusion. These banks will be known
a which of the following ?

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(a) Development Bank


(b) Payments banks
(c) Permanent Banks
(d) Priority banks

Answer Payments banks

(a) Cash Reserve Ratio (CRR)


(b) Statutory Liquidity Ratio (SLR)
(c) Marginal Standing Facility (MSF)
(d) Excess Reserve

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Q55 : Every bank is required to maintain, at the close of business every day, a minimum
proportion of their net demand and time liabilities as liquid assets in the form of cash
(book value), and balances in Unencumbered approved securities. It is termed as ?

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Answer Statutory Liquidity Ratio (SLR)

(a) 0.01
(b) 0.001
(c) 0.0001
(d) 0.00001

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Q56 : We often about decreasing or increasing different rates and ratios by the RBI by
certain basis points. One basis point is equal to which of the following ?

Answer 0.0001

Q57 : What is the full form of the term ASBA ?


(a) Allotment Supported by Blocked Amount
(b) Application Supported by Bank Amount
(c) Allotment Supported by Bank Account
(d) Application Supported by Blocked Amount

Answer Application Supported by Blocked Amount

Q58 : The Head Quarters of the World Trade Organisation (WTO) are located in ?
(a) Geneva
(b) London
(c) New York
(d) Washington DC
Answer Geneva

Q59 : Which of the following is NOT a Consumer Right as per Consumer Protection Act
1986 ?

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(a) Right to Consumer Education


(b) Right to seek redresal
(c) right toSafety
(d) Right to Negotiate

Answer Right to Negotiate

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