Banking Awareness Questions for IBPS RRBs PO and Clerk Exam 2017

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Banking Quiz for IBPS Exam 2017

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

Q1. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as _________
(a) SWIFT
(b) Basel
(c) RTGS
(d) NEFT
(e) AIIB

S1. Ans.(a)
Sol. Society for Worldwide Inter bank Financial Telecommunication (SWIFT) code . An internationally-recognized identification code for banks around the world. SWIFT codes are most commonly used for international wire transfers and are comprised of 8 or 11 alphanumeric characters.

Q2. Which of the following is not a ‘Money Market Instrument’?
(a) Treasury Bills
(b) Commercial Paper
(c) Certificate of Deposit
(d) Equity Shares
(e) None of the given options is true

S2. Ans.(d)
Sol. There are several money market instruments, including treasury bills, commercial paper, bankers’ acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements.

Q3. When there is a difference between all receipts and expenditure of the Govt. of India, both capital and revenue it is called _______
(a) Income Deficit
(b) Fiscal Deficit
(c) Budgetary Deficit
(d) All of the Above
(e) None of the given options is true

S3. Ans.(c)
Sol. A budget deficit occurs whenever a government spends more than it makes, which is nearly every year. Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government.

Q4. 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 endorser’s bank
(d) The bank upon which the cheque is drawn
(e) None of the given options is true

S4. Ans.(d)
Sol. Drawee is a legal and banking term used to describe the party that has been directed by the depositor to pay a certain sum of money to the person presenting the check or draft. A typical example is if you are cashing a paycheck.

Q5. Banks issue a letter to the beneficiary on behalf of its constituents like the guarantee for making payment on their behalf on the fulfilment of its terms and conditions. What is this arrangement known in banking context?
(a) Line of Credit
(b) Loan to Client
(c) Loan on Credit
(d) Letter of Credit
(e) None of the given options is true

S5. Ans.(d)
Sol. A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

Q6. ______________ is basically charged when a person uses a credit card to obtain cash.
(a) Early Repayment Charge
(b) Redemption Fee
(c) Transaction Fee
(d) Cash Advance Fee
(e) None of the given options is true

S6. Ans.(d)
Sol. A cash advance fee is a charge that a credit card issuer charges a customer for accessing the cash credit line on his or her account, either through an ATM, convenience check or at a bank’s teller window.

Q7. Which is an interest-free period that is to be given by a creditor to the debtor?
(a) Fixed Period
(b) Present Period
(c) Grace Period
(d) All of the Above
(e) None of the given options is true

S7. Ans.(c)
Sol. The grace period is the provision in most loan and insurance contracts which allows payment to be received for a certain period of time after the actual due date. During this period no late fees will be charged, and the late payment will not result in default or cancellation of the loan.

Q8. ________ is a cheque rather an amount of cheque, which is above the balance available in the account of the payer.
(a) Travellers cheque
(b) Multicity Cheque
(c) Mutilated Cheque
(d) Over Draft
(e) Bad Debts

S8. Ans.(d)
Sol. An overdraft is an extension of credit from a lending institution when an account reaches zero. An overdraft allows the individual to continue withdrawing money even if the account has no funds in it.

Q9. A cheque for a fixed amount that may be cashed or used in payment abroad after endorsement by the holder’s signature is known as ___________
(a) Travellers Cheque
(b) Multicity Cheque
(c) Mutilated Cheque
(d) Crossed Cheque
(e) None of the given options is true

S9. Ans.(a)
Sol. Traveller’s cheque is a medium of exchange that can be used in place of hard currency. Traveller’s cheques are often used by individuals travelling on vacation to foreign countries.

Q10. Which of the following is not a measure of the Risk Management in Banks?
(a) CRR
(b) RTGS
(c) SLR
(d) Deposit Insurance
(e) None of the given options is true

S10. Ans.(b)
Sol. Cash reserve Ratio (CRR) is the amount of funds that the banks have to keep with the RBI. Statutory liquidity ratio (SLR) is the Indian government term for reserve requirement that the commercial banks in India require to maintain in the form of gold, government approved securities before providing credit to the customers. Deposit insurance is mandatory, and pays claims from a pool of funds to which every depository institution regularly contributes.

Q11. ICRA, CRISIL, and Standard and Poor’s (S&P) are?
(a) Financial Institutions
(b) NGOs
(c) NBFCs
(d) Credit Rating Agencies
(e) None of the given options is true

S11. Ans.(d)
Sol. A credit rating agency (CRA, also called a ratings service) is a company that assigns credit ratings, which rate a debtor’s ability to pay back debt by making timely interest payments and the likelihood of default. Example:- ICRA, CRISIL, and Standard and Poor’s (S&P).

Q12. Which of the following is not a member of the World Bank Group?
(a) International Development Association (IDA)
(b) International Bank for Reconstruction and Development (IBRD)
(c) International Finance Corporation (IFC)
(d) Bank of International Settlement (BIS)
(e) Multilateral Investment Guarantee Agency (MIGA)

S12. Ans.(d)
Sol. The World Bank Group is made of the following five organizations:
1. International Bank for Reconstruction and Development (IBRD),
2. International Finance Corporation (IFC),
3. International Development Association (IDA),
4. Multilateral Investment Guarantee Agency (MIGA) and
5. International Centre for Settlement of Investment Disputes (ICSID).
Where as Bank of International Settlement (BIS)is the Bank for International Settlements is an international financial institution owned by central banks which “fosters international monetary and financial cooperation and serves as a bank for central banks”.

Q13. Indian Banking Regulation Act was passed in the year-
(a) 1989
(b) 1968
(c) 1949
(d) 1948
(e) 1935

S13. Ans.(c)
Sol. The Banking Regulation Act, 1949 is a legislation in India that regulates all banking firms in India. Initially,nthe law was applicable only to banking companies.

Q14. Which of the following is an apex institution in the field of Industrial Finance?
(a) Industrial Reconstruction Bank of India
(b) Industrial Finance Corporation of India
(c) Industrial Development Bank of India
(d) Industrial Credit & Investment Corporation of India
(e) None of the given options is true

S14. Ans.(c)
Sol. Industrial Development Bank of India (IDBI) is the apex financial institution and besides providing financial assistance on consortium basis, the major function of coordination between the various institutions is looked after by the bank. It also provides refinance facility to the eligible financial institutions including term loans. The bank sanctions the financial assistance to the industrial concerns engaged in the manufacture or processing of goods, mining, transport generation and distribution of power etc. both in private and public sectors. Industrial Development bank of India (IDBI) was constituted under Industrial Development bank of India Act, 1964 as a Development Financial Institution and came into being as on July 01, 1964 vide GoI notification dated June 22, 1964. It was regarded as a Public Financial Institution in terms of the provisions of Section 4A of the Companies Act, 1956. It continued to serve as a DFI for 40 years till the year 2004 when it was transformed into a Bank.

Q15. The beneficiary can expect to get credit for the NEFT transactions within ______ business hours.
(a) two
(b) three
(c) one
(d) four
(e) ten

S15. Ans.(a)
Sol. The beneficiary can expect to get credit for the NEFT transactions within two business hours (currently NEFT business hours is from morning 8 AM to evening 7 PM on all week days and from morning 8 AM to afternoon 1 PM on Saturdays) from the batch in which the transaction was settled.

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