Banking & Financial Awareness MCQ Set-14

Find out the most important Banking Awareness MCQ for IBPS, SBI PO, IBPS RRB, Insurance examinations and various other competitive examinations of the BFSI sector in India.

Q.1 Which among the following defines India’s Foreign Exchange Rate system?

A. Fixed

B. Free Float

C. Managed Float

D. Pegged Float

Answer: C. Managed Float

Note: The Indian exchange rate system is managed floating from 1994 onwards and hence the relevant currency movements are appreciation and depreciation. Managed float regime is the environment in which exchange rates fluctuate from day to day.

Q.2 Which among the following is/are the key elements of KYC policy?

A. Customer Acceptance Policy

B. Customer Identification Procedures

C. Monitoring of Transactions

D. Risk Management

E. All of the above

Answer: E. All of the above

Note: As per the RBI guidelines all banks are required to formulate a KYC Policy with the approval of their respective boards. The KYC policy consists of the following four key elements: 1) Customer Acceptance Policy 2) Customer Identification Procedures 3) Monitoring of Transactions 4) Risk Management.

Q.3 What is the full form of EMI?

A. Equal Monthly Installment

B. Equated Monthly Installment

C. Equal Monthly Income

D. Equated Monthly Incentive

Answer: B. Equated Monthly Installment

Q.4 The Mutual fund is constituted under the provisions of which of the following acts?

A. RBI Act, 1934

B. Securities and Exchange Board Of India Act,1992

C. Indian Trusts Act,1882

D. Indian Registration Act,1908.

Answer: C. Indian Trusts Act,1882

Q.5 Mutual funds in India are permitted to invest in which of the following?

A. Securities

B. Gold

C. Securities and Gold

D. Securities, Gold and Real Estate

Answer: D. Securities, Gold and Real Estate

Note: Mutual funds in India are permitted to invest in Securities, Gold and Real Estate. A mutual fund is prohibited from investing in any unlisted security or security issued through private placement by an associate or a group company of the sponsor.

Q.6 What is the full form of BPLR?

A. Benchmark Prime Lending Rate

B. Beginners Prime Lending Rate

C. Beginners Prime Lending Rate

D. None of these

Answer: A. Benchmark Prime Lending Rate

Q.7 Which of the following is correct about the venture loan?

A. It is a long-term loan

B. It is a startup loan

C. It is a short term loan

D. None of these

Answer: B. It is a startup loan

Q.8 Which of the following section of the RBI act deals with emergency loans to banks?

A. Section 18

B. Section 22

C. Section 28

D. Section 34

Answer: A. Section 18

Q.9 State Bank of India was nationalized in which of the following year?

A. 1949

B. 1952

C. 1955

D. 1969

Answer: C. 1955

Q.10 As on April 2021; what is the maximum deposited limit of payment banks in India?

A. Rs. 1 Lakh

B. Rs. 2 Lakh

C. Rs. 5 Lakh

D. None of these

Answer: B. Rs. 2 Lakh

Note: In a bid to promote digital payments to banks in the country, the RBI on April 7, 2021, announced that it has increased the maximum end-of-day balance for payment banks to ₹2 lakh. Earlier, the limit was ₹1 lakh. The Payments banks have been asking for a hike in deposit limit for a long time.

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