Banking & Financial Awareness MCQ Set-17

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

Q.1 What is the full form of LCR, an important part of Basel Accords?

A. Liquidity Capital Ratio

B. Liquid Coverage Ratio

C. Liquid Cash Ratio

D. Liquidity Coverage Ratio

Answer: D. Liquidity Coverage Ratio

Note: As per Basel Accords, the liquidity coverage ratio (LCR) refers to the proportion of highly liquid assets held by financial institutions, to ensure their ongoing ability to meet short-term obligations.

Q.2 What is the full form of BCA provided by bank credit rating agency Moody?

A. Bachelor of Computer Application

B. Baseline Credit Assessment

C. Bank Credit Assessment

D. Bank Capital Assessment

Answer: B. Baseline Credit Assessment

Note: Moody’s Baseline Credit Assessment (BCA) has three main components: a macro profile, financial factors and qualitative factor.

Q.3 What does M in MUDRA stand for?

A. Micro

B. Money

C. Management

D. Model

Answer: A. Micro

Note: Micro Units Development & Refinance Agency Ltd. (MUDRA), is a financial institution set up by Government of India for development and refinancing of micro units enterprises. It was announced by the Hon’ble Finance Minister while presenting the Union Budget for FY 2016.

Q.4 What does NPL stands for in banking terminology?

A. Non Performing Loan

B. Non Performing Liabilities

C. Non Performing Net

D. Non Performing Network

Answer: A. Non Performing Loan

Note: A nonperforming loan (NPL) is a loan in which the borrower is default and hasn’t made any scheduled payments of principal or interest for some time i.e. 90 days in India.

Q.5 A country’s RTP is the difference between the International Monetary Fund’s holdings of that country’s currency and the country’s IMF-designated quota, what does RTP stands for?

A. Reverse Transaction Point

B. Reserve Tranche Position

C. Reserved Transversal Point

D. Reverse Transaction Position

Answer: B. Reserve Tranche Position

Q.6 FCA is the most important and the largest component of forex reserve of RBI, the term FCA stands for?

A. Foreign Currency Assets

B. Foreign Current Assets

C. Foreign Capital Assets

D. Foreign Cash Assets

Answer: A. Foreign Currency Assets

Note: The Foreign exchange reserves of India consists of below four categories:

i. Foreign Currency Assets (FCA)

ii. Gold

iii. Special Drawing Rights (SDR) at IMF

iv. Reserve Tranche Position of IMF

Q.7 CDR is typically a voluntary framework, under which financial institutions and banks restructure the debt of companies facing financial difficulties due to various factors; what does CDR stands for:

A. Call Detail Record

B. Corporate Debt Restructuring

C. Company Debt Ratio

D. Corporate Debt Ranking

Answer: B. Corporate Debt Restructuring

Q.8 What is the full form of NACH?

A. National Automatic Clearing House

B. National Auto Credit House

C. National Automatic Credit Housing

D. None of these

Answer: A. National Automatic Clearing House

Note: National Payments Corporation of India (NPCI) has implemented “National Automated Clearing House (NACH)” for Banks, Financial Institutions, Corporates and Government a web based solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature.

Q.9 What is the full form of SWIFT in banking?

A. Society for Worldwide Interbank Financial Telecommunication

B. Social Way of International Financial Transaction

C. Society for Worldwide International Financial Transaction

D. None of these

Answer: A. Society for Worldwide Interbank Financial Telecommunication

Note: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) is a messaging system that runs on a network of financial institutions globally. It is a member-owned cooperative used by thousands of banks worldwide to communicate information on financial transactions in a secure and standardized way.

Q.10 CAD means that the total amount of liabilities exceeds the total amount of assets of a Company, the D of CAD stands for?

A. Default

B. Debt

C. Deficit

D. None of these

Answer: C. Deficit

Note: Capital Account Deficit (In case of a company): A capital account deficit occurs when the equity in a business turns negative. This means that the total amount of liabilities exceeds the total amount of assets.

Capital Account Deficit (In case of a country): A deficit in the capital account means money is flowing out of the country, and it suggests the nation is increasing its ownership of foreign assets.

Current Account Deficit (In case of country): The current account deficit is a measurement of a country’s trade where the value of the goods and services it imports exceeds the value of the products it exports.

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