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

Dear Readers,

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. Cash kept in the currency chest is owned by-
(a) Currency Chest branch bank
(b) State Bank of India
(c) Central Government
(d) Reserve Bank of India
(e) Finance Ministry

Q2. When more than one bank is allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as___________
(a) Consortium
(b) Syndication
(c) Multiple Banking
(d) Participation
(e) None of the given options is true

Q3. What is the minimum amount of deposit into/withdrawal from currency chest?
(a) Rs.5,00,000
(b) Rs.1,50,000
(c) Rs.2,00,000
(d) Rs.3,00,000
(e) Rs.1,00,000

Q4. What is the maximum period for which a term deposit can be normally opened?
(a) 8 years
(b) 7 years
(c) 9 years
(d) 10 years
(e) 12 years

Q5. DICGC guarantees amount up to _____________ per depositor per bank.
(a) Rs.1,00,000
(b) Rs.1,50,000
(c) Rs.2,00,000
(d) Rs.3,00,000
(e) None of the given options is true

Q6. When a Bank provides a loan for purchase of white goods, it is categorised as _____________
(a) Consumption loan
(b) White Goods loan
(c) Consumer Durable Loan
(d) Working Capital
(e) None of the given options is true

Q7. Fixed Deposits and Recurring Deposits are-
(a) repayable after an agreed period
(b) repayable on demand
(c) not repayable
(d) repayable on demand or after an agreed period as per customers' choice
(e) None of the given options is true

Q8. What is the full form of ‘FSDC’ which is used in financial sectors?
(a) Financial Security and Development Council
(b) Financial Stability and Development Council
(c) Fiscal Security and Development Council
(d) Fiscal Stability and Development Council
(e) None of the given options is true

Q9. FSDC was set up by the Government as the apex level forum in-
(a) September 2002
(b) January 2016
(c) March 2012
(d) July 2005
(e) December 2010

Q10. CRAR stands for _________
(a) Capital to Risk-Weighted Assets Ratio
(b) Capital to Risk Assets Ratio
(c) Credit Rating-Weighted Assets Ratio
(d) Credit Rating Assets Ratio
(e) None of the given options is true

Q11. The Doing Business Report” is prepared by which of the following organisations every year?
(a) Asian Development Bank (ADB)
(b) World Bank (WB)
(c) New Development Bank (NDB)
(d) World Trade Organization (WTO)
(e) None of the given options is true

Q12. Which of the following cannot be called as a debt instrument as referred in financial transactions?
(a) Certificate of Deposits
(b) Bonds
(c) Stock
(d) Commercial Paper
(e) None of the given options is true

Q13. Which of the following is not a type of cheque issued by an individual?
(a) Bearer Cheque
(b) Crossed Cheque
(c) Order Cheque
(d) Savings Cheque
(e) None of the given options is true

Q14. “World Investment Report” is annually published by-
(a) IBRD
(b) WTO
(c) IMF
(e) ADB

Q15. Treasury bills are issued in India by ______
(a) RBI
(b) State Government
(c) Government of India
(d) SEBI


S1. Ans.(d)
Sol. To facilitate the distribution of banknotes and rupee coins, the Reserve Bank has authorised select branches of scheduled banks to establish currency chests. These are actually storehouses where banknotes and rupee coins are stocked on behalf of the Reserve Bank.

S2. Ans.(a)
Sol. In the financial or banking world, a consortium refers to several lending institutions that group together to jointly finance a single borrower.

S3. Ans.(e)
Sol. The minimum amount of deposit into/withdrawal from currency chest will be Rs.1,00,000/- and thereafter, in multiples of Rs.50,000.

S4. Ans.(d)
Sol. The tenure of a Fixed Deposit or Term Deposit can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years.

S5. Ans.(a)
Sol. DICGC guarantees amount up to Rs. 1,00,000 per depositor per bank.

S6. Ans.(c)
Sol. Consumer Durable Loan is a finance option for the purchase of (White Goods) household items like Washing Machines, Refrigerators, AC, LED, LCD, Microwaves etc.

S7. Ans.(d)
Sol. A fixed deposit (FD) is a financial instrument provided by banks which provides investors with a higher rate of interest than a regular savings account, until the given maturity date and Recurring Deposit is a special kind of Term Deposit offered by banks in India which help people with regular incomes to deposit a fixed amount every month into their Recurring Deposit account and earn interest at the rate applicable to Fixed Deposits.

S8. Ans.(b)
Sol. Financial Stability and Development Council (FSDC) is an apex-level body constituted by the Government of India. Chairperson: The Union Finance Minister of India.

S9. Ans.(e)
Sol. With a view of strengthening and institutionalising the mechanism for maintaining financial stability, enhancing inter-regulatory coordination and promoting financial sector development, the Financial Stability and Development Council (FSDC) was set up by the Government as the apex level forum in December 2010. The Chairman of the Council is the Finance Minister and its members include the heads of all Financial Sector Regulators (RBI, SEBI, PFRDA & IRDA) Finance Secretary and/or Secretary, Department of Economic Affairs (DEA), Secretary, Department of Financial Services (DFS), and Chief Economic Adviser. The Council can invite experts to its meeting if required.

S10. Ans.(a)
Sol. The Capital Adequacy Ratio (CAR) or Capital-to-Risk Weighted Assets Ratio (CRAR) is a measure of a bank’s capital. It is expressed as a percentage of a bank’s risk-weighted credit exposures. It is used to protect depositors and promote the stability and efficiency of financial systems around the world.

S11. Ans.(b)
Sol. The Doing Business Report (DB) is a study elaborated by the World Bank Group every year that is aimed to measure the costs to firms of business regulations. The study has become one of the flagship knowledge products of the World Bank Group in the field of private sector development, and is claimed to have motivated the design of several regulatory reforms in developing countries.

S12. Ans.(c)
Sol. Debt instruments are assets that require a fixed payment to the holder, usually with interest. Examples of debt instruments include bonds (government or corporate), mortgages, Commercial Paper and Certificate of Deposits.

S13. Ans.(d)
Sol. An order cheque can be a bearer cheque if the words or bearer are not cancelled out. A crossed cheque is a cheque that has been marked to specify an instruction about the way it is to be redeemed.

S14. Ans.(d)
Sol. The World Investment Report has been published annually since 1991 by The United Nations Conference on Trade and Development (UNCTAD). Each year´s Report covers the latest trends in foreign direct investment around the World and analyses in depth one selected topic related to foreign direct investment and development.

S15. Ans.(c)
Sol. Treasury bills (T-bills) offer short-term investment opportunities, generally up to one year. They are thus useful in managing short-term liquidity. At present, the Government of India issues three types of treasury bills through auctions, namely, 91-day, 182-day and 364-day. There are no treasury bills issued by State Governments.