Banking Awareness Questions for IBPS RRBs Exam 2017

Dear Readers,


Just a few months are left for IBPS RRBs Mains It is time to pace up your preparation of Banking Awareness for IBPS RRBs PO and Clerk Mains. These Banking questions will also help you in preparing for other upcoming banking recruitment examination.

Q1. The largest shareholder of a public sector bank is-
(a) RBI
(b) Government of India
(d) All of the Above
(e) None of the given options is true

S1. Ans.(b)
Sol. Public Sector Banks (PSBs) are banks where a majority stake (i.e. more than 50%) is held by a government. The shares of these banks are listed on stock exchanges.

Q2. Which of the following works is/are done by Credit Information Companies?
(a) Collecting records of an individual’s payments pertaining to loans
(b) Maintaining records of an individual’s payments pertaining to credit cards
(c) Creating Credit Information Reports
(d) All of the Above
(e) None of the given options is true

S2. Ans.(d)
Sol. Credit Information Companies collects and maintains records of an individual‘s payments pertaining to loans and credit cards. These records are submitted to Credit Information Companies by banks and other lenders, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to lenders in order to help evaluate and approve loan applications.

Q3. By which rate is the domestic current rate of currency converted into foreign currency?
(a) Bank Rate
(b) CRR
(c) Stock Exchange Rate
(d) Repo Rate
(e) Exchange Rate

S3. Ans.(e)
Sol. An exchange rate- Between two currencies is the rate at which one currency will be exchanged for another. It is also regarded as the value of one country’s currency in terms of another currency.

Q4. The Foreign Exchange of India is kept with _________
(a) SBI
(b) ECGC
(c) RBI
(e) SEBI

S4. Ans.(c)
Sol. Reserve Bank of India accumulates foreign currency reserves by purchasing from authorized dealers in open market operations. Foreign exchange reserves of India act as a cushion against rupee volatility once global interest rates starts rising. The Foreign exchange reserves of India consists of below four categories. (a) Foreign Currency Assets
(b) Gold (c) SDRs (d) Reserve Tranche Position in the IMF.

Q5. Fiscal policy is concerned with which of the following?
(a) Public Revenue and Expenditure
(b) Issue of Currency
(c) Export Import
(d) Population Control
(e) Education for all

S5. Ans.(a)
Sol. Fiscal policy is the policy relating to government revenues from taxes and expenditure on various projects. Monetary Policy, on the other hand, is mainly concerned with the flow of money in the economy.

Q6. In which of the following types of banking, there is a direct execution of the transaction between a bank and its consumers?
(a) Retail Banking
(b) Universal Banking
(c) Virtual Banking
(d) Unit Banking
(e) None of the given options is true

S6. Ans.(a)
Sol. Retail banking also known as Consumer Banking is the provision of services by a bank to individual consumers, rather than to companies, corporations or other banks. Services offered include savings and transactional accounts, mortgages, personal loans, debit cards, and credit cards.

Q7. Maximum loan amount to individuals against physical security shares can be _____
(a) 20 lakh
(b) 15 lakh
(c) 25 lakh
(d) 50 lakh
(e) 10 lakh

S7. Ans.(e)
Sol. Loans/ advances granted to individuals against the security of shares, debentures and PSU bonds should not exceed Rs.10 lakh and Rs.20 lakh, if the securities are held in physical form and dematerialized form respectively.

Q8. The process by which the central bank of a country controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth is known as:
(a) Economic Policy
(b) Monetary Policy
(c) Fiscal Policy
(d) Credit Policy
(e) Budgetary Policy

S8. Ans.(b)
Sol. Monetary Policy is the process by which monetary authority of a country, generally a central bank controls the supply of money in the economy by exercising its control over interest rates in order to maintain price stability and achieve high economic growth. In India, the central monetary authority is the Reserve Bank of India (RBI). is so designed as to maintain the price stability in the economy.

Q9. Loans granted by a bank to an exporter popularly known as ‘Export credit’ is guaranteed, in case of default, by which of the following-
(a) EXIM Bank
(b) Ministry of International Trade, GOA
(c) ECGC
(e) None of the given options is true

S9. Ans.(c)
Sol. ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce.

Q10. Who amongst the following is the regulator in the financial system of the country?
(a) OIC
(b) SEBI
(d) TRAN
(e) CERC

S10. Ans.(b)
Sol. The financial system in India is regulated by independent regulators in the field of banking, insurance, capital market, commodities market, and pension funds. Example of Financial Regulators: RBI, IRDAI, SEBI, PFRDA.

Q11. Which of the following is the negotiable instrument?
(a) Fixed Deposit of a Bank
(b) Share certificate issued by a PSU
(c) Demand Draft issued by a bank
(d) Debenture of a company
(e) Airway Receipt

S11. Ans.(c)
Sol. A demand draft is a negotiable instrument similar to a bill of exchange. A bank issues a demand draft to a client (drawer), directing another bank (drawee) or one of its own branches to pay a certain sum to the specified party (payee).

Q12. Bank Holidays are covered by which of the following?
(a) As per the order of the GOI
(b) As per the order of the IBA
(c) Negotiable Instruments Act
(d) RBI Act
(e) None of the given options is true

S12. Ans.(c)
Sol. Bank Holidays are declared by Central/State Governments/Union Territory under the Negotiable Instruments (NI) Act, 1881.

Q13. A non-performing Asset in Banking Business means-
(a) A fixed asset of Bank is not been utilised
(b) A portion of deposits not been utilised
(c) A loan asset on which interest and/or instalments not paid
(d) All of the Above
(e) None of the given options is true

S13. Ans.(c)
Sol. A Non-performing asset (NPA) refers to a classification for loans on the books of financial institutions that are in default or are in arrears on scheduled payments of principal or interest. In most cases, debt is classified as nonperforming when loan payments have not been made for a period of 90 days.

Q14. Alterations, if any, on cheques are required to be authenticated by the signature of-
(a) Payee
(b) Depositor
(c) Drawer
(d) Endorse
(e) All of the above

S14. Ans.(c)
Sol. Alterations, if any, on cheques are required to be authenticated by the drawer’s signature against each such alteration.

Q15. What is the purpose of KYC in banking?
(a) It is used for customer identification
(b) It is used for increasing the CRR of banks
(c) It is used for money laundering
(d) It is used by the central bank to control liquidity
(e) Both (a) and (c)

S15. Ans.(e)
Sol. Know your customer (KYC) is the process of a business verifying the identity of its clients. Know your customer policies are becoming much more important globally to prevent identity theft, financial fraud, money laundering and terrorist financing.

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