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A QUESTIONNAIRE REPORT ON BANKING SERVICES AND OPERATIONS

In Partial Fulfillment of the Requirement for the Degree of Master of Business Administration (MBA) November 2016

SUBMITTED TO:

Dr. T. RAMACHANDRAN

Asst. Professor

DEPARTMENT OF MANAGEMENT

SRM UNIVERSITY

SUBMITTED BY:

K CHANDRASEKHAR

RA1552001010497

A QUESTIONNAIRE REPORT ON BANKING SERVICES AND OPERATIONS In Partial Fulfillment of the Requirement for the

SRM Nagar, Potheri, Kattankulathur

Banking operations - questions and answers for bank recruitment

Q1. Name some negotiable instruments.

Ans. The negotiable instruments include

  • - promissory note

  • - bill of lading

  • - Bank draft/ pay order/bankers cheque.

  • - Railway receipts

  • - Dock warrant

  • - Warehouse receipt

  • - Certificate of deposit

  • - Commercial paper

  • - Treasury bills

  • - Hundi

Q2. What are the features of Negotiability?

Ans. Features of Negotiability:

  • - Freely transferable by delivery (when it is bearer).

  • - Freely transferable by endorsement (when it is an order instrument).

  • - The transferee taking the instrument in good faith.

Q3. What is Promissory Note (PN)?

Ans. It’s an instrument in writing which contains an unconditional undertaking signed by the maker to pay a certain sum of money to the order or the bearer of instrument. The Promissory Notes require being stamped ad per Indian Stamp Act.

Q4. How many types of Promissory Notes are there?

Ans. Types of Promissory Note:

  • 1. Demand Promissory Note

  • 2. Usance Promissory Note

Q5. What is Demand Promissory Note?

Ans. The Promissory Note which is payable immediately on demand is called “Demand Promissory Note”.

Q6. What is Usance Promissory Note?

Ans. The Promissory Note which is payable after a predefined definite period is called “Usance Promissory Note”.

Q7. How many parties are required in Promissory Notes?

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Ans. Basically it requires two parties. The one is maker who promises to pay and the other is payee to whom it is payable. For example a person take loan from the bank then the “person” is the “maker” and “the bank” is “payee”.

Q8. What is “Bill of Exchange” (BoE)?

Ans. It’s an instrument containing an unconditional order signed by the maker directing a certain person to pay a certain sum of amount only to the bearer of that instrument.

Q9. How many types of bills are used in Banking Operations?

Ans. Following are the types of Bills used in Banking Operations:

  • - Inland bills and Foreign bills

  • - Time bills and Demand bills

  • - Trade bills and Accommodation bills

  • - Clean bills and Documentary bills.

Q10. What are “Inland bills”?

Ans. Inland bills are contract agreements which define the information related to the transportation of goods overseas. Inland bills must be drawn on a person resident in India although it is payable outside India. The essential condition is that it must be drawn in India. For example a bill is drawn in Nagpur and payable in Hyderabad by an importer in New York is an inland bill.

Q11.What is “Foreign Bill”?

Ans. A foreign bill is a financial instrument which is drawn at in country and payable in another country. Any bill which is not an inland bill is a “Foreign Bill”. For example a bill drawn in London and payable in Bhopal by a resident Indian is a foreign bill.

Q12. What is “Accommodation Bill”?

Ans. Accommodation bill is the “bill of exchange” by the third party which is also known as an “Accommodation party” or “Accommodation endorser” who acts as a guarantor. This kind of bill is not a genuine trade bill and it is drawn to accommodate a known party. After actual sale of goods, when a bill is drawn by a seller and accepted by another person claim to be buyer is accommodation bill.

Q13. What is “Hundi”?

Ans. Hundi is kind of “bill of exchange”. In Hundi any seller sells his good under bill of exchange. These bill of exchange are known as “Hundi”. Then the seller sends the “Hundi” to the buyer for its acceptance. These bills of exchange are generally written in native language of that place and governed by local usage and practices. Generally four types of Hundi are used.

1. Darshani Hundi- It is similar to the demand bills.

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2.

Miadi Hundi- It is similar to the usance bills.

  • 3. Namyog Hundis- It is similar to the order instruments.

  • 4. Khokha- which has been paid and cancelled.

Q14. What is “Cheque”?

Ans. A cheque is an instrument drawn on a specified bank and it is only payable on demand.

Q15. How is Cheque is different from BoE?

Ans. Cheque is different from bill of exchange in following ways:

  • - Cheque is valid only 6 months from the date of issue.

  • - Cheque is payable to the bearer on demand.

  • - Cheque is drawn in a bank.

  • - Notice of dishonor is not necessary in cheque.

Q16. When should banks not pay the Cheque?

Ans. Bank should not pay a cheque in the following cases:

  • - Death of the drawer.

  • - Insane customers

  • - Insolvent customers

  • - On receipt of valid stop payment instruction.

  • - When cheque is post-dated.

  • - When account has insufficient fund.

Q17. What is Stale Cheque?

Ans. If the cheque is not presented for payment for a period of 6 months from the date of its issuance, it is then considered as Stale Cheque.

The validity of the cheque can be reduced by the drawer, like valid for 3 months but the maximum validity of any cheque is 6 months.

Q18. What is “Saving Bank Account”?

Ans. If a person has limited income and he wants to save some money for future, then the account he opens is a Saving Bank Account. The account can be opened with the minimum initial deposit amount decided by the bank. The account holder can deposit the money anytime. He can also withdraw the money by withdrawal form or ATM or cheque. The rate of interest varies from bank to bank and changes time to time.

Q19. What is “Current Deposit Account”?

Ans. Big institutions, companies, businessman etc. normally open their current deposit accounts. There are some restrictions on withdrawal in saving accounts and in current accounts there are no such restrictions.

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Current account can be opened with some initial amount decided by the bank. Here the bank does not pay any interest on their balance, in fact the bank charges the customer certain amount each year as Operational Charge. It also provides the facility of withdrawing excess of the balance of deposit.

Q20. What is “Overdraft Facility”?

Ans. It is a facility provided by the banks that permits an account holder to use or withdraw more than they have in their accounts, but they can’t withdraw exceeding the maximum minus balance.This facility is called Overdraft Facility.

Q21. What is “Fixed Deposit Account”?

Ans. This facility allows us to save money for long time. In saving accounts the rate of interest is less, but in fixed deposit account the rate of interest is higher. It is also known as term deposit account. The depositor can deposit the money for long periods like 7 to 10 years. During this period withdrawal is not allowed however the depositor can encash the money before the maturity period but at that time the rate of interest will be less.

Q22. What is “Recurring Deposit Account”?

Ans. In this type of account the depositor saves regularly and in return gets a fair return of deposit. While opening this account the deposit per month is fixed. We can deposit the amount once in the month on a fixed date and the amount is also fixed. The total amount with interest we can receive after the maturity. The rate of interest in recurring deposit account is higher than the saving account. The account can be opened by a person individually as well as jointly with another.

Q23. What are “Non- performing assets” (NPA)?

Ans. The asset which is not producing income is a “Non-Performing Asset”. It is an asset or an account of a borrower which is considered as loss asset or doubtful by the bank account or the financial institution is called “non-performing asset”.

Q24. What is 90 days overdue?

Ans. It’s a norm for the identification of the “Non-performing asset” (NPA) starting 31 March 2014.

The norm is as follow:

  • - Interest or installment of principal remain overdue for more than ninety days in

respect of term loan.

  • - The account remains out of order for the period of more than ninety days.

  • - The bill remains overdue for the period of more than ninety days.

  • - Any amount to be received is due for more than ninety days.

Q25. What is “Money Laundering”?

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Ans. The process of converting illegal money into legal money is Money Laundering. According to Section 3 of the Prevention of Money laundering Act 2002 as:

“Whosoever directly or indirectly attempts to indulge or knowingly assists or is involved in any process or activity connected with the proceeds of crime and is projecting it as the untainted property shall be guilty of the offence of money laundering”.

Q26. What are the common factors of “Money Laundering”?

Ans. Generally there are four factors of money laundering:

  • - The true ownership and real source of money is not revealed.

  • - The launderers change the form of the proceeds in order to shrink the huge volume of cash generated by the initial unlawful activity.

  • - The trail left by the process is not known so that it make it difficult to follow the money from the beginning to end.

  • - Constant control is maintained on the money.

Q27. What are the stages of “Money Laundering” process?

Ans. The following are the stages of “money laundering” process:

  • 1. Placement stage:-It is the first introduction of entry for funds derived for any

criminal activities.

  • 2. Layering/Agitation stage: - The object of this stage is to prevent the tracing of

illegal proceed. It creates a complex network of transactions which attempts to not

reveal the link between the initial entry and the end of the money laundering cycle.

  • 3. Integration stage: - This process achieves the appearance of total legitimacy of

funds thereby it refers to the return of funds to the legitimate economy for later extraction.

Q28. Give few ways of “Money Laundering”?

Ans. Following are the few ways of money laundering:-

  • - Frequent exchange of cash into other currencies.

  • - Large withdrawals from inactive account.

  • - Transferring large sum of money to or from abroad.

  • - More use of safe deposit facilities.

  • - Customer having several accounts in different banks but in same location.

Q29. What is “BANKNET”?

Ans. It’s a kind of payment network established by RBI. It was launched during 1991 in India. In this network the user can BANKNET from their premises through leased or dial up lines at the local centers. Here the messages of banking transactions are transferred in the form of codes for the settlement of the transaction and advice. It also provides access to SWIFT through its system.

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Q30. What is “RBINET”?

Ans. It is a communication system running on BANKNET and RBINET is a client running a personal computer called RBINET. It can communicate with its server over the dedicated leased or dial-up lines.

Q31. What is “I-net”?

Ans. I-net was opened in 1983. It is owned by the Department of Telecommunication which uses Packet Switching Public Data Network (PSPDN). PSPDN is a kind of data sending technology. I-net uses telephone connections and satellites for communication which replaces the slow speed data communication. This technology connects major metropolis and international networks.

Q32. What is “NICNET”?

Ans. NICNET stands for National Informatic Centre Network, which was set up in 1975. It promotes information culture which is a government organization and work for government organizations. It provides multiple facilities to finance, agriculture, industry, commerce by providing various applications. Currency chest operations in banks are performed by NICNET.

Q33. What is “INFINET”?

Ans. The abbreviation for INFINET is Indian Financial Network. It was developed by RBI sponsored organization which provides fast and secure intra –bank and inter- bank communication system.

Q34. What is “SPNS”?

Ans. The full form of SPNS is Shared Payment Network System. It provides round- the-clock banking convenience to customer of any bank performing basic banking functions like cash withdrawal, balance enquiry etc. at any ATM belonging to any bank.

Q35. Which banking services can be used through Information Technology (IT)?

Ans. Following banking services can be achieved by using IT:

  • - Faster remittance services

  • - Home banking

  • - Tele- banking

  • - Cash management products

  • - Banking online

Q36. What is “Digital Signatures” (DS)?

Ans. Digital Signature is used for security purpose and it is equivalent to the handwritten signature. It is a signature in electronic form attached to an electronic

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record. Digital signature identifies the origin of the message and maintain the integrity of message. It defines authentication of an electronic record by a person whose name the digital signature certificates. In India Information Technology Act 2000 considers digital signature as personalized thumb print.

Q37. What is “Mobile Banking”?

Ans. Mobile banking provides us the ease of carrying out certain banking transactions through their mobile phone. This facility is provided by the banks. Many operations can be performed by using mobile banking like checking account balance, paying bills, request for cheque book. Stop payment instruction, summaries of last three transactions, transferring money to other account etc.

Q38. What is “Electronic Fund Transfer System” (EFTS)?

Ans. Electronic fund transfer provides us to transfer fund electronically replacing the paper instruments. The electronic fund transfer is fast and easily available. It saves time of customer’s standing in queue. The products of EFTS includes:-

  • - WTs- wireless transfers.

  • - ATM- Automated Trailer Machine

  • - CDs- Cash Dispensers

  • - POS- Point of Sale terminals

  • - Home banking

Q39. What is “Smart Card”?

Ans. The Smart Card is an Integrated Circuit Card (ICC) to store information. It is a cash card or we can say ‘electronic purse’ which is a pre-paid cash card. The card provides an option to the customers for debit and credit facilities. These cards can be reloaded by ATM or by telephone. It reduces the need of carrying cash for shopping and enables the card holder to increase the amount at any time.

Q40. What is “Credit Card”?

Ans. It is an instrument of payment. The customer gets some credit on the card which he can use for shopping, ticket booking, encashment etc. The credit cards are of different types having different credit limits depending upon the bank.

Q41. What is “Debit Card”?

Ans. It is a payment card used to obtain cash, purchasing goods and services automatically debiting the payment to the card holder’s bank account.

Q42. What are the advantages of “Debit Card”?

Ans. The advantages of Debit Card:

  • - No need to carry cash.

  • - Quick and less complicated than using cheque.

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  • - Used for withdrawal of cash.

  • - It can be issued to any individual having bank account

Capital market - questions and answers for bank recruitment

Q1. Name the three components of capital market?

Ans. There are three component of capital market are:-

  • - EQUITY MARKET

  • - DEBT MARKET

  • - DERIVATIVE MARKET

Q2. Which organisation regulates capital market?

Ans. Security and exchange board of India (SEBI) regulates the capital market.

Q3. What are the instruments of money market?

Ans. Following are the instruments of money market:-

  • - Call money

  • - Notice money

  • - Certificate of deposits (1989)

  • - Commercial papers (1990)

  • - Forward rate agreement / interest rate swaps (1999)

  • - Bills rediscounting

Q4. Categorize the “Industrial Security Market”?

Ans. There are two categories of industrial security market:-

  • - Primary market (new issue market)

  • - Secondary market / stock market (old issue market or stock exchange)

Q5. What is “Gilt-Edged Market”?

Ans. The market refers to government and semi-government securities which are supported by RBI and is called GILT-EDGED market.

Q6. Name the types of “Repurchase Agreement”?

Ans. Following are the types of repurchase agreement:-

  • - Market repo

  • - RBI repo (LAF)

  • - Treasury bills

  • - Inter-bank participation certificate (1988)

  • - CBLO (2003)

Q6. Name the participants of CBLO?

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Ans. Following are the participants of CBLO:-

  • - Scheduled commercial banks

  • - Co-operative banks

  • - Primary dealers (PDs)

  • - Select all-India financial institutions

  • - Insurance companies

  • - Mutual funds and other corporate

Q7. What is the tenor of transaction of overnight market?

Ans. The tenor of transaction of overnight market is one working day.

Q8. What is “FOREX” market?

Ans. FOREX market deals with the exchange of currency. With help of FOREX market we are able to meet the multi-currency requirements of market.

Q9. Name the major institutions involved with the CREDIT market?

Ans. Following are the major institutions involves with the CREDIT market:-

  • - Banks

  • - Financial institutions

  • - NBFCs

Q10. What is “STRIPS”?

Ans. STRIPS stands for “Separate Trading of Registered Interest and Principle of Securities”. It is basically a ZERO-COUPON where the investor receives payment at maturity only.

Q11. On which day in the week does RBI conduct the auction to issue the treasury bills?

Ans. On every Wednesday RBI conducts auction to issue treasury bills.

Q12. What are “COMMERCIAL PAPERS”?

Ans. COMMERCIAL PAPERS (CP) is an unsecured money market instrument issued in the form of promissory notes.

Q13. What is “CERTIFICATE OF DEPOSITS”?

Ans. CERTIFICATE OF DEPOSITS (CD) is a negotiable money market instrument and is issued in the form of USANCE promissory note.

Q14. What do we call a market instrument which has features of equity as well as debenture?

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Ans. The market instrument which has the feature of both equity and debenture is called “HYBRID INSTRUMENT”.

Q15. What are the various forms of derivative instruments?

Ans. Following are the forms of derivative instruments:-

  • - Forward contract

  • - Options

  • - Swaps

Q16. How many forms of SWAPS are there in derivatives, name them?

Ans. There are two forms of SWAPS in derivatives:

  • - Interest rate swaps

  • - Overnight index swaps

Q17. What is “PARTICIPATARY NOTE”?

Ans. PARTICIPATARY NOTE (PN) is an instrument used by foreign funds. It is not used for domestic trading because it is not registered in India.

Q18. What is dated government securities?

Ans. Dated government securities are the long term securities. They carry fixed or floating coupons which are paid on the face value and payable at fix time period.

Q19. What is “ASSET SECURITISATION”?

Ans. ASSET SECURITISATION is the process through which illiquid assets are transformed into a more liquid form of assets and distribute to broad range of investor through capital market.

Q20. Name the financial institutions that provide credit to various sectors of economy?

Ans. Following are the financial institutions that provide credit to various sectors of

economy:-

  • - Commercial banks

  • - Regional rural banks (RRBs)

  • - Urban co-operative banks (UCBs)

  • - State co-operative banks (STCBs)

  • - District central co-operative banks (DCCBs)

  • - Primary agriculture credit society (PACS)

  • - State co-operative and agriculture rural development banks (SCSCARDBs)

  • - Primary co-operative and agriculture rural development banks (PCARDBs)

  • - Financial institutions

  • - Non-banking financial companies (NBFCs)

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Q21. What is “SPECIALIZED FINANCIAL INSTITUTION (SFI)”?

Ans. SPECIALIZED FINANCIAL INSTITUTIONS (SFI) have been set up to serve the increasing financial needs of commerce and trade in the area of VENTURE CAPITAL, CREDIT RATING and LEASING.

Q22. Name the types of NBFCs registered with RBI?

Ans. Following are the types of NBFCs registered with RBI:-

  • - Equipment leasing company

  • - Hire-purchase company

  • - Loan company

  • - Investment company

Q23. What do you mean by “DELIVERY versus PAYMENT” (DvP)?

Ans. DELIVERY versus PAYMENT (DvP) is the mode of settlement of securities where the transfer of securities and the funds happens simultaneously, this ensure that unless the funds are paid, security are not delivered and vice-versa.

Q24. Name the type of “ALL-INDIA DEVELOPMENT BANKS” (AIDB)?

Ans. Following are the types of ALL-INDIA DEVELOPMENT BANKS:-

  • - Industrial development bank of India(IDBI)

  • - Industrial finance corporation of India ltd(IFCI)

  • - Small industrial development bank (SIDBI)

  • - Industrial investment bank of India ltd (IIBI)

Q25. Name some de-recognized stock exchange in India?

Ans. Following are some de-recognized stock exchange of India:-

  • - Hyderabad stock exchange

  • - Magadha stock exchange

  • - Saurashtra kutch stock (SKSE)

  • - Mangalore stock exchange

Q26. What is a “Bonus Share”?

Ans. Shares issued by the companies to their share-holders free of cost by capitalization of accumulated reserves from the profit earned in the earlier year is called “Bonus Share”.

Q27. What do you mean by “Equity Shares”?

Ans. Equity shares are commonly referred to as ordinary share that also represent the form of fractional ownership in which a share-holder, as a fractional owner,

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undertakes the maximum entrepreneurial risk associated with a business venture.

Q28. What are “Security Receipts”?

Ans. Security receipts means a receipt or other security issued by a securitisation company to any qualified institutional buyer pursuant to a scheme evidencing the purchase or acquisition by the holder there of an undivided right, title or interest in the financial asset involved in securitisation.

Q29. What do you mean by “Bull” as regarding capital market?

Ans. If a person is optimistic and believes that stock will go up, he or she is called a “BULL” and is said to have a bullish outlook.

Q30. What is cumulative preference share?

Ans. It is a type of preference stock in which the unpaid dividend accumulates. All arrear of preference dividend have to be paid out before paying dividend on equity shares.

Q31. Categorize the NBFC based on the way they accept public deposits?

Ans. There are two types of NBFC based on their public deposits:-

  • - NBFC- deposit taking (NBFC-D)

  • - NBFC- non deposit taking (NBFC-ND)

Q32. What are the important sources of long term finance?

Ans. Following are the important source of long-term finance:-

  • - Issue of shares

  • - Issue of debentures

  • - Loan from financial institutions

  • - Reinvestment of profits

Q33. What do you mean by short term capital?

Ans. Short-term capital is required for a short period, less than a year. It involves financing assets and meeting day-to-day expenses.

Q34. What are the important sources of short term finance?

Ans. Following are the important sources of long term finance:-

  • - Banks

  • - Trade credit

  • - Instalment credit

Q35. What is “Special Data Dissemination Standard” (SDDS)?

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Ans. SDDS is an international monetary fund standard to guide member that have access to international capital market in the provision of their economic and financial data to the public.

Q36. What is “TAP SALE”?

Ans. Under TAP SALE a certain amount of securities are created and made available for sale, generally with minimum price and sold to the market as bids are made.

Q37. What do you mean by “HELD TILL MATURITY (HTM)”?

Ans. The securities acquired by banks with the intention to hold them up to maturity.

Q38. What is “COUPON FREQUENCY”?

Ans. Coupon payments are made at regular intervals throughout the life of a debt security and may be quarterly, half-yearly or annual payment.

Q39. What is “Bond Ledger Account(BLA)”?

Ans. BOND LEDGER ACCOUNT is an account with the RBI or an agent in which the government securities are held in a dematerialised form at the credit of the holder.

Q40. What is the tenor of market repo?

Ans. The tenor for market repo ranges from one day to one year.

  • 01. Which of the following cannot be called as a debt instrument as

referred in the financial transactions?

  • a) Certificate of deposit; b) Bonds; c) Stocks; d) Commercial papers; e)

Debentures

  • 02. Whenever RBI does some open market operation transactions,

actually it wishes to regulate which of the following?

  • a) Inflation; b)Liquidity in economy; c) Borrowing powers of the banks; d)Flow of

foreign direct investments;

  • e) None of the above

    • 03. In economics, it is generally believed that the main objective of a

public sector financial company like bank is to:

  • e) Employ more and more people; b) Maximize the total profits; c) Maximize

total production; d) Provide financial services to the people of the nation of its origin

across the country; e) Sell the goods at subsidized rates

  • 04. In a company by the use of price sensitive corporate information

about the company, people closer to the company try to adopt the

technology to make gains or cover losses in share market dealings and such process is known as:

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  • a) Insider trading; b) Future trading; c) Foreign trading; d) Stock trading; e)

None of these

  • 05. What is meant by Repo rate?

    • a) When a bank is in need of cash it can it can discount bills of exchange and avail

loan facilities from Reserve Bank of India.

  • b) When a bank has excess cash, they buy securities from RBI against cash on the

condition that they resell the securities to RBI on a pre fixed day and price

  • c) It is rate at which RBI allows temporary loan facilities to commercial

banks against government securities on the condition that the bank will

repurchase the securities within a short period.

  • d) It is a rate which is offered by banks to their most valued customers or prime

customers; e) None of these

  • 06. Bharat Nirman does not cover which of the following areas?

    • a) Rural employment; b) Rural housing c) Rural water supply; d) Irrigation

facilities; e) It covers all the above areas

  • 07. Which of the following committee has given its recommendations on

“Financial inclusions”?

  • a) Rakesh Mohan committee; b) Rangarajan committee; c) Sinha committee; d)

Gadgil committee; d) None of these

  • 08. The actual return of an investor is reduced sometimes when the prices

of the commodities go up all of a sudden and in financial sector this type of phenomenon is known as

  • a) Probability risk; b) Market risk; c) Inflation risk; d) Credit risk; e) None of

these

  • 09. An industry which is fighting hard to increase its market share in

existing market(with new popular products) is known as:

  • a) Market vendor; b) Market operator; c) Market leader; d) Market follower; e)

Market challenger

  • 10. Which of the following products launched by most of the banks help

farmers in getting instant credit for various agricultural purposes?

  • a) Kisan credit card; b) Personal loan; c) Business loan; d) ATM card; e) None of

these

  • 11. Which of the following products of a bank is specifically designed to

provide financial help to children in their higher studies in India or in a

foreign country?

  • a) Personal loan; b) Corporate loan; c) Housing loan; d) Educational loan; e)

Mortgage loan

  • 12. Which of the following policies of the financial sectors is basically

designed to transferring local financial assets into foreign assets freely and at market determined exchange rates?

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  • a) Capital account convertibility; b) Financial deficit management; c) Minimum

support price; d) Restrictive trade practices

  • e) None of these

    • 13. A customer is willing to purchase some US dollars in the country.

He/she should go to:

  • a) Public Debt Division of the RBI only; b) American Express Bank only; c) RBI or

any branch of a bank which is authorized for conducting such business; d)

Ministry of Foreign affairs; e) None of these

  • 14. Which of the following is not a social assistance program launched by

the Government of India?

  • e) National old age pension scheme; b) Annapurna scheme; c) National family

benefit scheme; d) Indira Gandhi National Disability Pension Scheme; e) All are

social assistance programs

  • 15. Many times we see in newspapers that some projects are launched by

the Government authorities on PPP basis. What is the full form of PPP?

  • a) Preferential Payment Plan; b) Public Private partnership; c) Partial payment

project; d) Popular private project

  • e) Public private plan

16.The ratio of the cash reserves that the banks are required to keep with RBI is known as:

  • a) Liquidity ratio; b) Statutory liquidity ratio; c) Cash Reserve Ratio; d) Net

demand and time liabilities; e) None of these

  • 17. The availability of cash and other cash like marketable instruments

that are useful in purchases and investments are commonly known as:

  • a) Cash crunch; b)Liquidity; c) Credit; d) Marketability; e) None of these

    • 18. Which of the following schemes launched by the Government of India

provides a guaranteed 100 days employment to rural employment seekers

in India?

  • a) Bharat Nirman; b) SwarnajayanthiGrameenRozgarYojana; c) Mahatma Gandhi

National Rural Employment Guarantee act; d) National Food for Work

Programme; e) None of these

  • 19. The Reserve Bank of India keeps on modifiying various rates/ratios to

keep the flow of liquidity in the market in a balanced manner and which of the following rates/ratios/indexes is not directly controlled by the RBI?

  • a) Cash reserve ratio; b) Bank rate; c) Repo rate; d) Reverse repo rate; e)

Wholesale price index

  • 20. Many banks have adopted/launched “Core Banking Solutions” and

what do you mean by “core banking solutions”?

  • a) A marketing strategy adopted by the banks; b) A new type of automated teller

machines useful for rural population; c) A delivery channel for quick and fast

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delivery; d) A new product launched to help senior citizens only as they are not able to visit the branches/ATMs frequently; e) None of these

  • 21. Which of the following terms are not used in banking sector?

    • a) Statutory liquidity ratio; b) Non performing asset; c) Credit rating;d) Fixed; e)

REPO

  • 22. Banking sector comes under which of the following sectors?

    • a) Agriculture sector; b) Service sector; c) Manufacturing sector; d) Industrial

sector; e) None of these

  • 23. An account in which trading of shares in their electronic form is done

 

is known as:

a)

Demat account; b) NRE account; c) NRO account; d) FCNR account; e) RFC

account

  • 24. Which of the following programmes/schemes of the Government of

India is not directly related with agriculture activities?

  • a) Drought Prone areas programme; b) Promotion of integrated pest management;

  • c) Integrated wastelands development programme; d) Annapurna scheme; e)

Desert Development programme

  • 25. Find the odd man out from the following groups?

a)

ICICI Bank, Canara Bank, Central Bank of India, Punjab National Bank, Indian

Bank

b)

Canara Bank, State Bank of India, Lakshmi Vilas Bank, KarurVysya Bank, United

Bank of India

c)

Bank of India, Corporation Bank, Indian Bank, IDBI Bank, Axis bank

d)

Bank of Maharashtra, Barclays bank, Oriental Bank of Commerce,

Indian Bank, IDBI bank

e)

Union Bank of India, Bank of India, Andhra Bank, Dena Bank, Indian Bank

  • 26. Which among the following is the recently opened private sector bank

in the country?

  • a) ICICI bank; b) HDFC bank; c) AXIS Bank; d) Kotak Mahindra Bank;e) Yes bank

    • 27. Mortgage relates to which type of loan among the following?

      • a) Housing loan; b) Educational loan; c) Car loan; d) Gold loan; e) Personal loan

        • 28. Fourteen banks were nationalized in the country during the first stage

on:

  • a) 19.07.1970; b) 19.07.1969; c) 19.07.1971; d) 18.07.1969; e) 15.07.1969

    • 29. The sponsorship between State government, central government and

sponsor bank is in the ratio of--------- in respect of Regional Rural Banks in the country:

  • a) 15-50-35; b) 50-35-15; c) 35-15-50; d) 35-50-15; e) 15-35-50

    • 30. When it comes to providing locker facility to the customer of any

bank, the relationship between the customer and banker is that of:

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  • a) Debtor and creditor; b) Bailor and bailee; c) Lessee and lessor; d) Lessor and

lessee; e) Agent and principal

IBPS BANK EXAMINATIONS – BANKING AWARENESS – PRACTICE TEST

  • 01. When does Reserve Bank of India issues annual policy statement?

    • b) January; b) April; c) July; d) October; e) None of the above

      • 02. Which of the following has been renamed as “Annual Policy

Statement” by the Reserve Bank of India?

  • a) Busy season banking policy; b) Slack season banking policy; c) Monetary and

credit policy; d) Annual statistical report; e) None of the above

  • 03. When does RBI review its annual policy statement?

    • a) July; b) October; c) January; d) All the above; e) None of the above

      • 04. Which is the monitoring and reviewing authority regarding fair

practices code as per recent annual policy statement of Reserve Bank of India?

  • b) Banking codes and standards Board of India; b) Banking Ombudsman; c)

Institute for development in banking technology; d) debt recovery tribunal; e) none of the above

  • 05. Which committee has recommended introduction of smart card?

    • a) Rangarajan committee; b) Saraf committee; c) Nayak committee; d)

Pannirselvan committee; e) None of the above

  • 06. Which committee had formulated consultative profile in connection

with electronic funds transfer?

  • a) A.K. Purwar committee; b) Y V Reddy committee; c) K S Shere committee; d)

S. A. Dave committee; e) none of the above

  • 07. The process of transformation of physical shares, commercial paper or

certificate of deposit into electronic form is called as:

  • a) Electronic clearing service; b) Electronic securitization; c) Share truncation; d)

Dematerialisation; e) None of the above

  • 08. Providing banking services to a customer without his entrance inside

the bank’s branch is called as:

  • a) Virtual banking; b) relationship banking; c) universal banking; d) mobile

banking; e) none of the above

  • 09. Where is the headquarters of “Society for worldwide Interbank

Financial Telecommunication – SWIFT” situated?

  • a) New York; b) Los Angels; c) Brussels; d) Hague; e) None of the above

    • 10. Where has National Financial Switch of IDRBT established?

      • a) Mumbai; b) New Delhi; c) Hyderabad; d) Bangalore; e) None of the above

        • 11. Cheque truncation means:

          • a) Tearing a cheque into two or more pieces; b) Sending the photostat copy of a

cheque in collection; c) Using the electronic image of a cheque; d) Keeping the

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Photostat copy of a cheque with collecting bank before sending the original cheque to the drawee branch; e) None of the above

  • 12. What do you mean by universal banking?

    • a) Provision of all financial services in one country; b) Provision of all financial

services in one bank; c) Provision of all financial services at a branch; d) Provision of all financial services at any of the counters of a branch of a bank; e) None of the above

  • 13. Corporate governance is a system

    • a) By which a company is directed and controlled; b)In which Board of directors

are responsible for managing the business affairs of a company; c) Both the

above; d) Governing corporate companies by the government; e) None of the above

  • 14. Whose interest is kept in mind in a good corporate governance

system?

  • a) Shareholders of the company; b) Stakeholders of the company; c) Employees of

the company; d) All the above; e) None of the above

  • 15. What do you mean by risk?

    • a) Loss; b) Depreciation of capital; c) Decrease in profitability; d) Possible loss

that depends upon occurrence and non occurrence of an incident; e) None

of the above

  • 16. The employees of the bank went on strike and when it comes to risk

what do you mean by this?

  • a) Operational risk; b) Employee risk; c) Credit risk; d) Market risk; e) Systemic

risk

  • 17. Basel II accord is mostly concerned with:

    • a) Central vigilance commission; b) Non performing assets; c) Capital adequacy

ratio; d) Foreign direct investment; e) None of the above

  • 18. A bank is unable to pay its short term deposits because the bank’s

funds are blocked in long term investments. The risk derived in this case is known is:

  • a) Market risk; b) Operational risk; c) Liquidity risk; d) Interest rate risk; e) None

of the above

  • 19. A bank recently introduced a new deposit scheme which was not

popular amongst the public and what do you mean by the riskassociated

 

with this?

a)

Operations risk; b)Credit risk; c) Liquidity risk; d) Market risk; e) None of the

above

  • 20. The Assets Liabilities committee in a bank makes the assessment of:

    • a) Liquidity risk; b) Credit risk; c) Operations risk; d) All the above; e) None of

the above

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  • 21. A debtor makes default in repayment of a bank loan and which type of

risk is this for a lending bank?

  • a) Liquidity risk; b) Operational risk; c)Interest rate risk; d) Credit risk; e) None

 

of the above

22.

Which type of risk arises before a bank that trades in government

securities?

  • a) Liquidity risk; b) Market risk; c) Credit risk; d) Trade risk; e) None of the above

    • 23. Which of the following options best defines the risk?

      • a) Loss occurred due to happening of an event

      • b) Loss occurred due to non happening of an event

      • c) Risk experienced due to uncertainty

      • d) Probability of loss due to uncertainty

      • e) None of the above

        • 24. Which of the following is not included in three pillars of BASEL capital

accord?

  • a) Minimum capital requirement; b) Supervisory review; c) Market discipline; d)

Core banking solution; e) None of the above

  • 25. When ICICI Limited merged with ICICI bank?

    • a) 1 st August, 2000; b) 1 st August 2001; c) 1 st August, 2002; d) 1 st August, 2003;

    • e) none of the above

      • 26. Bank of Madura Limited merged with:

        • a) ICICI bank limited; b) UTI bank limited; c) HDFC bank limited; d) IDBI bank e)

None of the above

  • 27. Which bank has changed its name to AXIS bank limited?

    • a) Centurion bank; b) Times bank; c) Bank of Punjab Limited; d) Bank of Karad; e)

UTI bank limited

  • 28. Bank of Cochin merged with:

    • a) Punjab National Bank; b) Bank of Baroda; c) State Bank of India;d) Canara

Bank; e) United Commercial bank

  • 29. Times Bank Limited merged with:

    • a) HDFC Bank; b) Bank of India; c) Punjab National Bank; d) Central Bank of

India; e) none of the above

  • 30. What do you mean by horizontal merger?

    • a) Merger of two or more companies that manufacture homogenous

products;

  • b) Merger of two or more companies that manufacture heterogonous products;

  • c) Merger of a principal company with its subsidiary company

  • d) All the above

  • e) None of the above

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