Banking Awareness Questions (PCA Based) for IBPS Clerk Mains 2017

Dear Aspirants,

Banking Awareness Questions for IBPS Clerk Mains 2017

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

Q1. The parameters that invite Prompt Corrective Action from the central bank are-
(a) Capital to Risk weighted Asset Ratio
(b) Net Non-Performing Assets (NPA)
(c) Return on Assets (RoA)
(d) Leverage ratio
(e) All of the Above

S1. Ans.(e)
Sol. The parameters that invite corrective action from the central bank are-
1. Capital to Risk weighted Asset Ratio (CRAR)
2. Net Non-Performing Assets (NPA) and
3. Return on Assets (RoA)
4. Leverage ratio

Q2. The PCA framework is applicable only to ______________.
(a) Non-Banking Financial Companies
(b) Financial Management Institutions
(c) Commercial banks
(d) Co-operative Banks
(e) None of the given options is true

S2. Ans.(c)
Sol. The PCA framework is applicable only to commercial banks and not extended to co-operative banks, non-banking financial companies (NBFCs) and FMIs.

Q3. In recent PCA framework, how many Risk Threshold categories are there?
(a) 2
(b) 3
(c) 4
(d) 5
(e) 6

S3. Ans.(b)
Sol. In the recent PCA framework there are 3 Risk Threshold categories viz. Risk Threshold1, Risk Threshold2, and Risk Threshold3.

Q4. The Banks with a net Non-Performing Asset (NPA) ratio of 6-9 percent will fall under risk category _____________.
(a) 3
(b) 5
(c) 4
(d) 1
(e) 2

S4. Ans.(d)
Sol. Banks with a net NPA ratio of 6-9 percent will fall under risk category 1. Lenders with net NPAs between 9-12 percent of all loans fall into the second risk category, while those with a net NPA ratio above 12 percent fall into the third category.

Q5. Once PCA is triggered by the regulator, the bank faces restrictions on spending money on ________________.
(a) opening branches
(b) recruiting staff
(c) giving increments to employees
(d) Only (a) and (b)
(e) Only (a) (b), and (c)

S5. Ans.(e)
Sol. Once PCA is triggered by the regulator, the bank faces restrictions on spending money on opening branches, recruiting staff and giving increments to employees. Further, the bank can disburse loans only to those companies whose borrowing is above investment grades.

Q6. Which among the following PSBs is not under PCA?
(a) UCO Bank
(b) Oriental Bank of Commerce
(c) Syndicate Bank
(d) Dena Bank
(e) Indian Overseas Bank

S6. Ans.(c)
Sol. Till date, there are 10 public sector banks that have come under PCA viz. United Bank of India, Bank of India, Corporation Bank, Oriental Bank of Commerce, Dena Bank, Central Bank of India, IDBI Bank, Indian Overseas Bank, Bank of Maharashtra and UCO Bank.

Q7. Which among the following were the two banks on which initially restrictions were imposed.
(a) SBI and BOB
(b) Indian Overseas Bank and PNB
(c) Dena Bank and UCO Bank 
(d) IDBI Bank and UCO Bank
(e) Vijaya Bank and Bank of India

S7. Ans.(d)
Sol. IDBI Bank and UCO Bank were the two banks on which initially restrictions were imposed. Both the banks breached risk threshold 2.

Q8. This year has been a season of putting banks under PCA category. What is the meaning of "P" in PCA?
(a) Prompt
(b) Prove
(c) Public
(d) Price
(e) Personal 

S8. Ans.(a)
Sol. This year has been a season of putting banks under Prompt Corrective Action (PCA) category. The RBI had revised the PCA framework on 13 April 2017.

Q9. Till date there are how many banks on which PCA has been triggered?
(a) 8
(b) 10
(c) 11
(d) 9
(e) 13

S9. Ans.(b)
Sol. Till date, there are 10 public sector banks that have come under PCA viz. United Bank of India, Bank of India, Corporation Bank, Oriental Bank of Commerce, Dena Bank, Central Bank of India, IDBI Bank, Indian Overseas Bank, Bank of Maharashtra and UCO Bank.

Q10. The Banks with a net NPA ratio above 12 percent fall into the category ___________.
(a) 1
(b) 2
(c) 5
(d) 4
(e) 3

S10. Ans.(e)
Sol. Banks with a net NPA ratio of 6-9 percent will fall under risk category 1. Lenders with net NPAs between 9-12 percent of all loans fall into the second risk category, while those with a net NPA ratio above 12 percent fall into the third category.


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