Banking Awareness Questions for RBI Grade-B Phase-1 Exam

Dear Readers,

Banking-Awareness-Questions-for RBI-Grade-B-Phase-1-Exam

Just a few days are left for RBI Grade-B Phase-1 Exam. It is time to pace up your preparation of Banking Awareness for RBI Grade-B Officers. These Banking questions will also help you in preparing for other upcoming banking recruitment examination.

Q1. NSDL is the first and largest depository in India, established in-
(a) August 2003
(b) August 1991
(c) August 1989
(d) August 1999
(e) August 1996

S1. Ans.(e)
Sol. NSDL, the first and largest depository in India, established in August 1996 and promoted by institutions of national stature responsible for economic development of the country has since established a national infrastructure of international standards that handles most of the securities held and settled in dematerialised form in the Indian capital market.

Q2. A Public Provident Fund (PPF) account holder can deposit a maximum of-
(a) 1.5 Lakhs
(b) 2.5 Lakhs
(c) 1.0 Lakh
(d) 3.5 Lakhs
(e) 5.0 Lakhs

S2. Ans.(a)
Sol. A Public Provident Fund (PPF) account holder can deposit a maximum of Rs 1.5 lakhs in his/her PPF account.

Q3. Where is the headquarters of Paschim Banga Gramin Bank?
(a) Howrah, West Bengal
(b) Nagpur, Maharashtra
(c) Dumka, Jharkhand
(d) Bolangir, Odisha
(e) Bathinda, Punjab

S3. Ans.(a)
Sol. The headquarters of Paschim Banga Gramin Bank is Howrah, West Bengal.

Q4. National Securities Depository Limited is an Indian central securities depository based in _______
(a) New Delhi
(b) Chennai
(c) Hyderabad
(d) Mumbai
(e) Bengaluru

S4. Ans.(d)
Sol. National Securities Depository Limited is an Indian central securities depository based in Mumbai.

Q5. The Board of Industrial and Financial Reconstruction (BIFR) came into existence in-
(a) 1999
(b) 1995
(c) 1991
(d) 1987
(e) 1982

S5. Ans.(d)
Sol. The Board of experts named the Board for Industrial and Financial Reconstruction (BIFR) was set up in January, 1987 and functional with effect from 15th May 1987. The Appellate Authority for Industrial and Financial Reconstruction (AAIRFR) was constituted in April 1987. Government companies were brought under the purview of SICA in 1991 when extensive changes were made in the Act including, inter-alia, changes in the criteria for determining industrial sickness.

Q6. Securities Appellate Tribunal is a/an __________ established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992
(a) Constitutional body
(b) Advisory body
(c) non-statutory body
(d) Statutory body
(e) None of the given options is true

S6. Ans.(d)
Sol. Securities Appellate Tribunal is a statutory body established under the provisions of Section 15K of the Securities and Exchange Board of India Act, 1992 to hear and dispose of appeals against orders passed by the Securities and Exchange Board of India or by an adjudicating officer under the Act and to exercise jurisdiction, powers and authority conferred on the Tribunal by or under this Act or any other law for the time being in force.

Q7. Which of the following is a function of SEBI?
(a) to approve by-laws of stock exchanges.
(b) inspect the books of accounts of financial intermediaries.
(c) to require the stock exchange to amend their by-laws.
(d) compel certain companies to list their shares in one or more stock exchanges.
(e) All of the Above

S7. Ans.(e)
Sol. Function of SEBI:
1. To approve by-laws of stock exchanges.
2. Inspect the books of accounts of financial intermediaries.
3. To require the stock exchange to amend their by-laws.
4. Compel certain companies to list their shares in one or more stock exchanges.

Q8. Which of the following services is NOT provided by the post offices in India?
(a) Savings Bank Scheme
(b) Retailing of Mutual Funds
(c) Sale of stamp Papers (Judicial)
(d) Life Insurance cover
(e) Issuance of Demand Drafts

S8. Ans.(e)
Sol. Issuance of Demand Drafts is NOT provided by the post offices in India.

Q9. Credit rating is _______
(a) is used to rate the borrowers while giving advances
(b) is used to work out performance of the employees
(c) is used to calculate the number of excellent audit rated branches
(d) is not used in any bank
(e) is necessary before giving promotion to employees

S9. Ans.(a)
Sol. Credit rating is an analysis of the credit risks associated with a financial instrument or a financial entity. An assessment of the creditworthiness of a borrower with respect to a particular debt or financial obligation.

Q10. Currency swap is an instrument to manage _______
(a) Interest Rate Risk
(b) Currency Risk
(c) Cash flows in different countries
(d) All of the Above
(e) None of the given options is true

S10. Ans.(c)
Sol. A currency swap (or a cross currency swap) is a foreign exchange derivative between two institutions to exchange the principal and/or interest payments of a loan in one currency for equivalent amounts, in net present value terms, in another currency.

Q11. “Hawala transactions” in India are prohibited under the provision of which of the following acts?
(a) Banking Regulation Act
(b) Financial Action Task Force Act
(c) Foreign Exchange Management Act
(d) Reserve Bank of India Act 
(e) None of the given options is true

S11. Ans.(c)
Sol. “Hawala transactions” in India are prohibited under the provision of Foreign Exchange Management Act.

Q12. Which of the following refers to an account that a bank holds in a foreign currency in another bank?
(a) Nostro Account
(b) Vostro Account
(c) LORO Account
(d) Mirror Account
(e) None of the given options is true

S12. Ans.(a)
Sol. Nostro account refers to an account that a bank holds in a foreign currency in another bank.

Q13. How many Basic Savings Bank Deposit Account(BSBDA) can be opened by an individual?
(a) One
(b) Two
(c) Three
(d) Four
(e) None of the given options is true

S13. Ans.(a)
Sol. An individual is eligible to have only one ‘Basic Savings Bank Deposit Account’ in one bank.

Q14. A fund that tracks an index but can be traded like a stock is known as _______
(a) Exchange Traded Funds (ETF)
(b) Mutual Funds
(c) Energy Funds
(d) Investment Fund
(e) None of the given options is true

S14. Ans.(a)
Sol. An ETF (Exchange Traded Fund) is a marketable security that tracks an index, a commodity, bonds, or a basket of assets like an index fund. Unlike mutual funds, an ETF trades like a common stock on a stock exchange.

Q15. ___________ are financial markets for the buying and selling of long-term debt or equity-backed securities.
(a) Bullion Market
(b) Capital Market
(c) Money Market
(d) Fund Market
(e) None of the given options is true

S15. Ans.(b)
Sol. The capital market is a market where buyers and sellers engage of long-term in trade of financial securities like bonds, stocks, etc.

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