Banking and Financial Awareness for BOB/IBPS Exams

Q1. Consider the following statements with respect to NABARD:
I. It inspects RRBs and Cooperative Banks.
II. It maintains Research and Development Fund to promote research in agriculture and rural development.
III. It accepts short-term deposits from the public like any other bank to improve its capital base.
Which of the above statements is/are correct?
(a) Only I
(b) Only II
(c) Only III
(d) Only I and II
(e) All of the above

Q2. We often read in financial newspapers that the RBI has revised certain rates/ratios under LAF. What is the expanded form of LAF?
(a) Legal Adjustment Facility
(b) Liquidity Adjustment Facility
(c) Long-term Adjustment Facility
(d) Liquidity Adjustment Formality
(e) None of the above
Q3. What do you mean by Zero-Based Budgeting?
(a) Every year the budget starts from a scratch
(b) Making provisions to reduce the expenses to almost zero level
(c) Managing the expenses required for the upcoming year with zero net income
(d) Compromising with a situation of no profit and no loss
(e) None of the above
Q4. What is the meaning of MIS for an economic organisation like a bank?
(a) Management of Information of Sales
(b) Middle Income Scheme
(c) Marketing Information System
(d) Management Information System
(e) None of the above
Q5. Which of the following does not fall among the functions of the Reserve Bank of India (RBI)?
(a) Regulation of currency
(b) Control of credit
(c) Banker to the Government, banker’s bank and lender of the last resort
(d) Accepting deposits and granting loans and advances to public
(e) None of the above
Q6. Which of the following were the aims behind setting up of the World Trade Organisation (WTO)?
I. Promotion of free trade and resources flow across countries
II. Protection of intellectual property rights
III. Managing balanced trade between different countries
IV. Promotion of trade between the former East Bloc countries and the western world
Select the correct answer:
(a) Only (I) and (II)            
(b) Only (III) and (IV)
(c) Only (I), (II) and (III)     
(d) Only (I) and (IV)
(e) All (I), (II), (III) and (IV)
Q7. In India, inflation is measured by……….?
(a) Wholesale Price Index
(b) Consumers Price Index for urban non-manual workers
(c) Consumers Price Index for agricultural workers
(d) National Income Deflation
(e) Per Capita Income
Q8. The world over most of the supervisory authorities have adopted the following as the basis of assessment of capital adequacy?
(a) Risk Assets Ratio System
(b) Return or Capital System
(c) Average Yield on Assets System
(d) Net Profit
(e) None of the above
Q9. Commercial banks influence money supply through ____?
(a) Printing of one rupee notes
(b) Augmentation of savings and time deposits
(c) Provision of high denomination notes
(d) Creation of demand deposits
(e) None of the above

Q10. In India, rural incomes are generally lower than urban incomes. Which of the following reasons account(s) for this?
I. A large number of farmers are illiterate and know little about scientific agriculture.
II. Prices of primary products are lower than that of manufactured products.
III. Investment in agriculture has been low as compared to investment in industry.
Select the correct answer:
(a) Only (III)                           
(b) Only (I) and (III)
(c) Only (I) and (II)            
(d) Only (II) and (III)
(e) All (I), (II) and (III)
Q11. Which of the following organisation release World Economic Outlook report?
(a) World Bank 
(b) IMF
(c) UNDP
(d) WTO
(e) None of the above
Q12. ICRA, CRISIL and Standard and Poor’s (S&P) are?
(a) Credit rating agencies
(b) NGOs
(c) Financial Institutions 
(d) NBFCs
(e) None of the above
Q13. The Nippon Ginko is the Central Bank of?
(a) South Korea 
(b) Japan
(c) China
(d) Taiwan 
(e) None of the above
Q14. “Primary Deficit”refers to?
(a) Fiscal Deficit minus Interest Payments
(b) Budget Deficit minus Interest Payments 
(c) Monetary Deficit minus Interest Payments 
(d) Deficit Financing by 91 day ad hoc treasury bills
(e) None of the above
Q15. Open market operations are mainly used as ______?
(a) A fiscal device which assists Government borrowing 
(b) A monetary measure to regulate quantity of money in circulation and the cash reserves of the commercial banks
(c) A measure to counteract extreme trends in business    
(d) A measure to influence the balance of payments position
(e) None of the above

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