Banking Awareness Questions for SBI PO Mains Exam

Dear Readers,

banking-quiz

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

Q1. 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

S1. 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.

Q2. 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 bank’s choice
(e) None of the given options is true

S2. 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.

Q3. 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

S3. 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.

Q4. 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

S4. Ans.(e)
Sol. With a view of strengthening and institutionalizing 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.

Q5. 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

S5. 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.

Q6. Which among the following are long term corporate bonds that are unsecured in nature?
(a) DCF
(b) Debentures
(c) Covenant
(d) CRAs
(e) Cheque

S6. Ans.(b)
Sol. A long-term security yielding a fixed rate of interest, issued by a company and secured against assets are known as debentures.

Q7. An account for which a bank acts as an uninterested third party is termed as?
(a) Savings Account
(b) Current Account
(c) Reserve Account
(d) Escrow Account
(e) Fixed Account

S7. Ans.(d)
Sol. An escrow account is a temporary pass through the account held by a third party during the process of a transaction between two parties. Definition: An escrow account is a temporary pass through the account held by a third party during the process of a transaction between two parties.

Q8. A signed undertaking from one party containing a promise to pay a stated sum to a specified person or a company is known as ________
(a) Power of Attorney
(b) Promissory Note
(c) Purchasing Power Parity
(d) Plastic Notes
(e) None of the given options is true

S8. Ans.(b)
Sol. A promissory note is a legal instrument in which one party (the maker or issuer) promises in writing to pay a determinate sum of money to the other (the payee).

Q9. Which of the following is defined as the difference between current assets and current liabilities?
(a) Venture Capital
(b) Working Capital
(c) Equitable Mortgage
(d) Loss Assets
(e) Profit and Loss Account

S9. Ans.(b)
Sol. The capital of a business (working capital) which is used in its day-to-day trading operations, calculated as the current assets minus the current liabilities.

Q10. A debt which is irrecoverable and is therefore written off as loss in the accounts of an institution or bank is known as __________
(a) external debt
(b) good debt
(c) bad debt
(d) internal debt
(e) None of the given options is true

S10. Ans.(c)
Sol. The term bad debts usually refers to accounts receivable (or trade accounts receivable) that will not be collected.

Q11. ______________ 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

S11. 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.

Q12. 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

S12. 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.

Q13. ________ 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

S13. 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.

Q14. 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

S14. 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.

Q15. 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

S15. 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, the 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.

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