Banking and Financial Awareness for BOB/IBPS Exams

Q1. Which of the following acts helps a bank in its day-to-day activities?
(a) Competition Act
(b) Negotiable Instruments Act
(c) Hindu Marriage Act
(d) Hindu Succession Act
(e) NRI Act

Q2. Which of the following is a primary function of banks?

(a) Collection and payment of cheques, rent, interest etc on behalf of their customers
(b) Buying, selling and keeping in safe custody, the securities on behalf of their customers
(c) Acting as trustee and executors of the property of their customers on their advice
(d) Remitting money from one place to the other through bank drafts or mail or telegraphic transfers
(e) Accepting deposits
Q3. The banker is under an obligation to take utmost care in keeping secrecy of the details of the customer. However, the obligation of secrecy is not considered essential when
(a) a banker is required to give evidence in the court
(b) there is national emergency and disclosure is essential in the public interest
(c) there are clear proofs of reason to the state and when consent is given by the customer to provide information for the     preparation of balance sheet
(d) All of the above
(e) None of the above
Q4. Transfer of any instrument to another person by signing on its back or face or on a slip of paper attached to it is known as……..?
(a) promissory note
(b) bill of lading
(c) bill of exchange
(d) endorsement
(e) None of the above
Q5. Which of the following statements is correct about promissory note?
(a) It need not be in writing
(b) An implied promise is enough to constitute a valid promissory note
(c) The promise to pay must be definite and unconditional
(d) The name of the payee need not be mentioned
(e) The payment can be in kind
Q6. All of the following are examples of Quasi negotiable instruments, under the Negotiable Instrument Act, 1881, except…..?
(a) dividend warrants
(b) share warrants
(c) bearer debentures
(d) promissory note
(e) None of the above
Q7. Which of the following is not the essential requirement for the endorsement as per Negotiable Instrument Act, 1881?
(a) It should be on the instrument
(b) It should be made by the holder or the maker
(c) Signatures should be in ink and not by pencil or rubber stamp
(d) It should contain unconditional order
(e) The endorser should sign the endorsement in the same style and with the same spellings as written in the instrument
Q8. With reference to a cheque which of the following is the “drawee bank”?
(a) The bank that collects the cheque
(b) The payee’s bank
(c) The endorsee’s bank
(d) The endorser’s bank
(e) The bank upon which the cheque is drawn
Q9. Which of the following is not a party of Bill of Exchange? 
(a) The drawer
(b) The drawee
(c) The payee
(d) The endorser
(e) None of the above
Q10. In terms of Section 5(1) (5) of the Banking Regulation Act, 1949, a ‘banking company’ means any company which…?
(a) accepts deposits from the public
(b) undertakes lending of money
(c) transacts the business of banking in
(d) All of the above
(e) None of the above
Q11. As per the reports published in various journals and newspapers the ‘small borrowers’ in rural areas still prefer to take informal route for their credit needs. Which of the following is the ‘informal route’ of credit in financial sector?
(a) Credit cards 
(b) Loan against gold from financial institute 
(c) Debit cards 
(d) Money lender
(e) None of the above
Q12. What is meant by ‘Underwriting’ the term frequently used in financial sector?
(a) Under valuation of the assets 
(b) The Act of taking on a risk
(c) Giving a Guarantee that a loan will not become a bad loan 
(d) All of the above 
(e) None of the above
Q13. As we have noticed many banks of Indian origin are opening offices/branches in foreign countries. Why is this trend emerging at a very fast pace?
I. These Banks wish to provide banking facilities to foreigners as banking facilities are not plenty in many foreign countries. India wants to take an advantage of the situation.
II.These banks wish to help Indian firms to acquire funds at internationally competitive rates. 
III. These banks wish to promote trade and investment between India and other countries.
(a) Only I
(b) Only II
(c) Only III
(d) Only II and III
(e) None of the above
Q14. Many economists, bankers and researchers in India often advocate that banks should equip themselves for new challenges. These challenges are in which of the following shapes/forms?
I. As India economy is getting increasingly integrated with the rest of the world the demand of the Corporate banking is likely to change in terms of size, composition of services and also the quality.
II. The growing foreign trade in India will have to be financed by the local banks.
III. Foreigners are habitual of the comforts provided by the technology. India has to do a lot in this reference.
(a) Only I is correct
(b) Only II is correct 
(c) Only III is correct 
(d) All of the above 
(e) None of the above
Q15. Which of the following is not a banking/finance related term?
(a) Credit warp 
(b) EMI
(c) Held to Maturity 
(d) Diffusion
(e) None of the above

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