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. A Committee on Banking Supervision which provides a forum for regular cooperation on banking supervisory matters and to enhance understanding of key supervisory issues and improve the quality of banking supervision worldwide.
(a) BIS
(c) European Banking Supervisors
(d) All of the above
(e) None of the given options is true

S1. Ans.(b)
Sol. BASEL is a set of international banking regulations put forth by the Basel Committee on Bank Supervision, which set out the minimum capital requirements of financial institutions with the goal of minimising credit risk.

Q2. DIPP is the nodal agency in the field of foreign investments in India. What is the full form of DIPP?
(a) Department of Industry Policy and Promotion
(b) Department of Innovation Policy and Promotion
(c) Department of Industrial Policy and Promotion
(d) Department of Industrial Policy and Partnership
(e) Department of Internet Pulse and Partnership

S2. Ans.(c)
Sol. Department of Industrial Policy and Promotion (DIPP) is working under the Ministry of Commerce and Industry, Government of India. This department is responsible for formulation and implementation of promotional and developmental measures for growth of the industrial sector, keeping in view the national priorities and socio-economic objectives.

Q3. The letter ‘R’ denotes which word in the term IFRS?
(a) Restructuring
(b) Reporting
(c) Recognising
(d) Remote
(e) Recurring

S3. Ans.(b)
Sol. International Financial Reporting Standards (IFRS Standards) is a single set of accounting standards, developed and maintained by the International Accounting Standards Board (the Board) with the intention of those standards being capable of being applied on a globally consistent basis—by developed, emerging and developing economies—thus providing investors and other users of financial statements with the ability to compare the financial performance of publicly listed companies on a like-for-like basis with their international peers.

Q4. Which of the following is a bank account opened by NRI to deposit income mainly generated from an Indian source?
(a) NRI
(b) NRP
(c) NRO
(d) FCNR
(e) None of the given options is true

S4. Ans.(c)
Sol. Non-Resident Ordinary (NRO) Account held to manage the income earned in India like rent, pension, dividend, interest, etc. It is opened either by the citizen of India, while temporarily shifting to abroad or by an NRI by transferring money from his home country or from his other NRO account. A normal bank account can also be redesignated to NRO account when the residential status of the account holder is changed to NRI. The account is mainly used to park money earned from Indian sources in India.

Q5. In it, a worldwide recognised identification code used at the time of international credit transfer between banks and also when there is an exchange of messages between banks.
(a) IFSC Code
(b) SWIFT Code
(c) NEFT Code
(d) BIS Code
(e) FCRA Code

S5. Ans.(b)
Sol. SWIFT stands for Society for Worldwide Interbank Financial Telecommunication Code. The code is also used when there is an interchange of messages between banks. The code is a combination of 8 or 11 alphanumeric characters. First 4 characters bank code, Next 2 characters country code, Next 2 characters location code, Last 3 characters are optional that represents branch code.

Q6. In which of the following a credit facility is provided by the bank to an entity for a specific purpose, to be repayable after a short duration?
(a) Advances
(b) Loans
(c) Security
(d) Liabilities
(e) Goodwill

S6. Ans.(a)
Sol. Advances are the source of finance, which are provided by the banks to the companies to meet short-term financial requirement. They are granted against securities which are as under:
• Primary Security: Hypothecation of Debtors, Stock Pro-notes etc.
• Collateral Security: Mortgage of land and buildings, machinery, etc.
• Guarantees: Guarantees given by partners, directors or promoters, etc.

Q7. RRBs are working in all states of the country except _______.
(a) Sikkim
(b) Goa
(c) Andhra Pradesh
(d) Bihar 
(e) Both (a) and (b)

S7. Ans.(e)
Sol. RRB’s were established by the Government of India in the year 1975. Their establishment was followed by the 1976 Regional Rural Banks Act. These have had the main agenda to develop the economy of the rural areas and to enlarge credit amount of these areas as well as the agricultural sectors.

Q8. This organisation is made for empowering Micro, Small and Medium enterprises in India?
(a) ECGC
(b) RBI
(c) RRB

S8. Ans.(d)
Sol. SIDBI is aimed to aid the growth and development of MSME in India.

Q9. ECS stand for-
(a) External Commercial System
(b) Electronic Clearing System
(c) Electronic Commercial System
(d) Electrical Clearing Service
(e) Electronic Clearing Service

S9. Ans.(e)
Sol. ECS stands for Electronic Clearing Service. It allows companies, Government departments and institutions which have to make bulk payments in the form of dividend warrants and interest payments on bonds to investors to transfer the proceeds electronically to customers’ bank accounts.

Q10. Nationalisation of banks took place in India in how many phases?
(a) 2
(b) 1
(c) 3
(d) 4
(e) 5

S10. Ans.(a)
Sol. Nationalisation of banks took place in India in two phases, in 1969 and 1980.

Q11. A closed economy is?
(a) Only Exports take place
(b) Only Imports take place
(c) Imports and exports take place
(d) Neither Imports nor Exports take place
(e) None of the given options is true

S11. Ans.(d)
Sol. A closed economy means no imports are brought in and no exports are sent out so as to provide consumers with everything that they need from within the economy’s borders.

Q12. Which organisation carry out open market operations?
(a) SEBI
(c) RBI
(e) Finance Ministry

S12. Ans.(c)
Sol. RBI carries out open market operations. The open market operation is in which a country will conduct trade with outside regions.

Q13. What was the Purpose of setting up Narasimhan committee-2?
(a) Efficiency and productivity
(b) Banking reform process
(c) Export of IT sector
(d) Fiscal Reform process
(e) None of the given options is true

S13. Ans.(b)
Sol. In 1998 to analyse India’s banking sector and recommending legislation and regulations to make it more effective, competitive and efficient issued by banks or other financial institutions.

Q14. The largest bank Imperial Bank was nationalised in 1955 and rechristened as State Bank of India on the recommendation of which committee?
(a) Rangarajan Committee
(b) Chelliah Committee
(c) Rekhi Committee
(d) Gorewala Committee
(e) None of the given options is true

S14. Ans.(d)
Sol. Bank of Madras merged into the other two in British India i.e. Bank of Calcutta and Bank of Bombay to form the Imperial Bank of India which became the State Bank of India on the recommendation of Gorewala Committee.

Q15. Who monitors Priority Sector Lending (PSL) in commercial banks?
(a) Reserve Bank of India (RBI)
(b) Small Industries Development Bank of India (SIDBI)
(c) National Bank for Agriculture and Rural Development (NABARD)
(d) Government of India (GOI)
(e) Finance Ministry (FM)

S15. Ans.(a)
Sol. The priority sector lending by commercial banks is monitored by Reserve Bank of India (RBI) through periodical returns received from them.

Answers will be updated soon......

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