Some Banking abbreviations:

ATM : Automated Teller Machine

BAFIA : Bank and Financial Institutions Act
BFI : Banks and Financial Institution
BOP : Balance of Payments
CCD : Credit-to-Core Capital and Deposit
CDM : Cash Deposit Machine
CIB : Credit Information Bureau
CPI : Consumer Price Index
CSR : Corporate Social Responsibility
DTI : Debt Service to Gross Income Ratio
FSDS : Financial Sector Development Strategy
GDP : Gross Domestic Product
HPI : Housing Price Index
IMF : International Monetary Fund
IRC : Interest Rate Corridor
LCR : Liquidity Coverage Ratio
LIBOR : London Interbank Offered Rate
LOLR : Lender of the Last Resort
M2 : Broad Money
MFI : Microfinance Financial Institution
NEPSE : Nepal Stock Exchange
NRB : Nepal Rastra Bank
NSFR : Net Stable Funding Ratio
OMO : Open Market Operation
PAN : Permanent Account Number
PoS : Point of Sale
RTGS : Real Time Gross Settlement
SIB : Systemically Important Bank
SIS : Supervisory Information System
SLF : Standing Liquidity Facility
SME: Small and Medium Enterprise
VAT : Value Added Tax
y-o-y : year on ye
1. PAC stands for Primary Agricultural Cooperative Societies

2. KYC means Know Your Customer

3. CAR stands for Capital Adequacy Ratio

4. DTL stands for Demand and Time Liabilities

5. ECB stands for External Commercial Borrowings

6. NEFT stands for National Electronic Funds Transfer System

7. CRM stands for Customer Relationship Management

8. EFT Stands for Electronic Funds Transfer

9. NRE deposit is Non Resident External Deposit

10. ASBA stands for Application Supported by Blocked Amount

11. IFRS stands for International financial Reporting Standards

12. FDI stands for Foreign Direct Investment

13. The full form of PIN in the parlance of an ATM card is Personal Identification Number

14. GNP stands for Gross National Product

15. Expand BIFR in the context of the Indian industry, is Board for Industrial and Financial Reconstruction

16. FIMMDA stands for Fixed Income Money Markets and Derivatives Association

17. Expand the term SWIFT is Society for Worldwide Interbank Financial Telecommunications

18. What is the full form of ULIP? Unit Linked Insurance Plan

19. Which of the following is the full form of SOFA? Status of Forces Agreement

20. In Banking terminology, NPA means Non-Performing Asset

21. Insurance service provided by various banks is commonly known as Bancassurance.

22. Green banking means: Financing of environmental friendly projects by banks

23. Which from the following is NOT true when the interest rate in the economy goes up?
A) Saving increases
B) Lending decreases
C) Cost of production increases
D) Return on capital increases
E) None of these

24. Rate of interest is determined by:

 A) The rate of return on the capital invested
B) Central Government
C) Liquidity preferences
D) Commercial Banks
E) None of these

25. Open market operations of NRB refer to buying and selling of:
A) Commercial bills
B) Foreign exchange
C) Gold
D) Government bonds
E) None of these

26. Which one of the following is NOT a quantitative credit control

technique?
A) Bank Rate
B) Cash Reserve Ratio (CRR)
C) Increase of interest rate on saving deposit
D) Statutory Liquidity Ratio (SLR)
E) None of these

27. The bank rate is the rate of interest at which the NRB provides loans to the:
A) Scheduled Commercial Banks
B) Public sector
C) Corporate sector
 D) Foreign institutional investors
E) None of these

28. Which one of the following rates is NOT decided by the NRB?
A) Bank Rate
B) Repo Rate
C) Reverse Repo Rate
D) Income Tax Rates
E) None of these

29. Many a time we hear about NPA in banking terminology. What is the full form of NPA?
A) Non- Performing Asset
B) Negotiable and Preferential Asset
C) New Performing Avenues
D) Net Performing Average
E) None of these

30. Which one of the following is NOT a banking related or financial term?
A) Credit worthiness
B) Margin Money
C) Payment gateways
D) Polymerization
E) None of these

31. Which of the following is NOT the function of

NRB?
 A) Provide credit facility to the general public
B) Keep government money in various account heads
C) Frame monetary and credit policy
D) All are NRB’s functions
E) None of thes

32.Bad loans in banking terminology are generally known

as:
A) Prime loans
B) Prime asset
C) BPOs(Business Processing Outsourcing)
D) NPAs( Non Performing Asset)
E) None of these

33. Which of the following terms is not used in the field of banking and
finance?
A) Overdraft
B) Base line
C) RTGS(Real Time Gross Settelment)
D) GBC
E) None of these

34. The foreign exchange reserves of Nepal are kept in the

custody of:
A) World bank
B) IMF
C) NRB
D) Prime minister
E) None of these
35.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) Participation
B) Consortium
C) Syndication
D) Multiple Banking
E) None of these

36. Reverse Repo Rate means:

A) Injecting liquidity by the central bank of a country through purchase of government securities
B) Absorption of liquidity from the market by sale of government securities
C) Balancing liquidity with a view to enhance economic growth rate
D) Any of above
E) None of these

37. The bank rate

means:
A) Rate of interest charged by commercial banks from borrowers
B) Rate of interest which commercial banks discounted bills of their borrowers
C) Rate of interest allowed by commercial banks on their deposits
D) Rate at which NRB purchases or rediscounts bill of exchange of commercial banks
E) None of these

38. Open market operations, one of the measures taken by NRB in order to control credit
expansion in the economy means:
A) Sale or purchase of government securities
B) Issuance of different types of bonds
C) Auction of gold
 D) All of these
E) None of these

39. What is Repo Rate?

A) It is a rate at which NRB sells government securities to banks
B) It is a rate at which NRB buys government securities from banks
C) It is a rate at which NRB allows small loans in the market
D) All of these
E) None of these

40. Many times we read in newspapers that the NRB has revised certain rates/ ratios under LAF.
What is the full form of LAF?
A) Liquidity Adjustment Facility.
B) Legal Adjustment Facility
C) Long-term Achievement Facility
D) Legal Adjustment Formality
E) None of these

41.Which of the following is an international forum to discuss and implement supervisory norms
in all the banks of the world?
A) Basel Committee
B) UN charter on commercial laws.
C) World trade organization
D) International Board of banks and finance
E) None of these
42. ‘Repo Rate’ is the rate at which:
A) The NRB lends to state government
B) The international aid agencies to NRB
C) The NRB lends to banks
D) The banks lend to NRB
E) None of these

42. Which of the following payment instrument introduced by the banks is known as plastic money?
A) Bearer Cheques
B) Credit Cards
C) Demand Drafts
D) Gift cheques
E) None of thes

43. If the Cash Reserve Ratio (CRR) is lowered by the NRB, its impact on credit creation will be:
A) Increase
B) Decrease
C) No impact
D) All of these
E) None of the above

44. Which one of the following statements is correct regarding increase in the CRR in Nepal?
A) It increases credit creation
B) It reduces credit creation
 C) It does not affect credit
D) It denoted liberal monetary policy
E) None of these

45. PAN(Permanent Account Number) card issued by the income tax department cannot be used
for which of the following purpose?
A) Proof of identity
B) Proof of a registered tax payer
C) Proof of address
D) Proof of date of birth
E) None of these

46. Which among the following is an asset for a commercial bank?

A) Credit to farmers
B) Deposit of public
C) Borrowings form NRB
D) Demand deposits of industries
E) None of these

47. The banks are required to maintain certain ratio between their cash in hand and total assets.
This is called___
A) SLR
B) SBR
C) CBR
D) CRR
E) None of these
48. The interest rate at which the NRB lends to commercial banks in the short terms to maintain
liquidity is known as___
A) Interest rate
B) Repo rate
C) Bank rate
D) Reverse repo rate
E) None of these

49. Which of the following is the most important component of the liabilities of commercial banks in Nepal?
A) Demand deposits
B) Time deposits
C) Inter-bank liabilities
D) Other borrowing(for India)
E) None of these

50. Which one of the following is not a function of

NRB?
A) Credit control
B) As apex body of scheduled commercial banks
C) Formation of monetary policy
D) Credit creation
E) None of the above

51. Non- performing asset (NPA) in commercial banks mean____

A) Bank deposits which are not invested
B) Capital asset not in use
C) Loans in which interest or principal amount is not recovered
 D) Loan interest rate loans
E) None of these

52. The bank rate is the rate at which___

A) A bank lends to the public
B) the NRB lends to the public
C) The NRB gives to the commercial banks
D) The government of Nepal lends to other countries
E) None of these

53. Liability- side of the balance-sheet comprise:

A. Capital and reserve

B. Long-term liabilities
C. Current liabilities

D. All of the above

54. Minimum cash reserves fixed by law constitute

A. A percentage of aggregate deposits of the bank

B. A percentage of aggregate loans and advances of the bank

C. A percentage of capital & reserves of the bank

D. None of these
55. Which of the following types of accounts are known as "Demat Accounts"?

Demat Account is an account that is used to hold shares and securities in electronic format. The full form of Demat account is a dematerialised account.
A Zero Balance Accounts

B. Accounts which are opened to facilitate repayment of a loan taken from the bank. No other business can be conducted from there

C. Accounts in which shares of various companies are traded in electronic form

D. Accounts which are operated through internet banking facility

56. Mortgage is a:

A mortgage is a loan in which property or real estate is used as collateral. The borrower enters into an agreement with
the lender (usually a bank) wherein the borrower receives cash upfront then makes payments over a set time span until he pays back the
lender in full. A mortgage is often referred to as home loan when its used for the purchase of a home.

A. Security on movable property for a loan

B. Security on immovable property for a loan

C. Concession on immovable property

D. Facility on immovable property

E. Security on loan sanctioned against fixed deposits

57. A fixed deposit receipt is kept with the bank for its safety , is known as …….?

A. Safe custody
B. Safe deposit

C. Locker
D. Valid safe deposit
58. The main business of the banks is to accept deposits from the public. However, a bank can refuse to permit opening an account on behalf of …….?
A. Undesirable persons
B. Artificial persons

C. Arrested persons

D. Convicted persons
59. Banks are required to monitor transactions of suspicious nature for reporting to the authorities under anti-money laundering measures. The purpose of
reporting is:
A. Combating finance of terrorism

B. To check hawala transactions

C. To check the inflow of crime money

D. To check inflow of the money earned out of sale of narcotics

E. All the above

(Hawala is a method of transferring money without any money actually moving. Interpol's definition of hawala is "money transfer without
money movement." Another definition is simply "trust." Hawala is an alternative remittance channel that exists outside of traditional
banking system.)
( Narcotics: Also known as “opioids,” the term “narcotic” comes from the Greek word for “stupor” and originally referred to a variety
of substances that dulled the senses and relieved pain. Though some people still refer to all drugs as “narcotics,” today “narcotic”
refers to opium, opium derivatives, and their semi-synthetic substitutes. A more current term for these drugs, with less uncertainty
regarding its meaning, is “opioid.” Examples include the illicit drug heroin and pharmaceutical drugs like OxyContin, Vicodin,
codeine, morphine, methadone, and fentanyl.)
60. Crypto currency is a …….
A. Plastic Money.

B. Digital Medium of Exchange

C. Digital payment

D. Both A & B

61. Which one is not the most common objective of Banking regulations?

A. Systematic Risk Reduction

B. Credit Allocation

C. Prudential (involving or showing care and forethought, especially in business) Objectives

D. Market Discipline
62. Which statement is not correct about Capital Adequacy Ratio?
A. It is a thermometer of Bank’s Health.

B. It is the ratio of its Capital to its Risk.

C. It can indicate the Capacity of the Bank’s ability to absorb the possible losses.

D. A good CAR makes vulnerable to the Depositors and lose faith in the banking system.

63. In Take Out Financing there is/are how many parties involves?

A. One
B. Two

C. Three
D. Four

(Takeout financing is an accepted international practice of releasing long-term funds for financing infrastructure projects. It can be
used to effectively address Asset-Liability mismatch of commercial banks arising out of financing infrastructure projects and also to free
up capital for financing new projects.)

64. Microcredit is defined as ……

A. It is the small credit given to poor.

B. It is the installment given by Farmers against Loan.
C. It is the amount given by Govt. for Small Industries Development.
D. None of these.

(Microcredit is the extension of very small loans (microloans) to impoverished borrowers who typically lack collateral, steady
employment, or a verifiable credit history. ... Microcredit is part of microfinance, which provides a wider range of financial services,
especially savings accounts, to the poor.)

65. Priority Sector does not includes the……..

A. Agricultural Finance

B. Education Loans

C. Housing loans
D. Life Insurance Policy
( Commercial Banks are required to lend 25 % of credit in the priority sector .)

( Priority Sector Lending: Lending in the key areas like agriculture, tourism, energy/hydro, education, social, infrastructure, small and cottage industries,
cement, garment etc. by banks and financial institutions is priority sector lending. Priority sector lending is necessary for the overall development of the
economy . This policy is designed to ensure easy credit availability to the vulnerable group and sections of the society. Banks are required to finance certain
portion of credit in that sector basically, for the economic upliftment of the nation which is intervened by the central bank. Most of the developing nation faces
backward position in channelizing their funds in the productive sector. That's why central bank issues some guidelines regarding the minimum limit
percentage to sanction the loan with no upper limit. Priority sectors are the real sectors of the economy from where the country generates a sustained
amount of GDP. Basically the economy is divided into three parts i.e Primary sector(Agriculture), Secondary sector( Manufacturing), and Tertiary
sector(Service). So, NRB has prescribed the priority sectors which reflect the true picture in terms of productivity. These are the most mandatory lending
areas. However, it is not fully compiled width adherence to the Unified Directives issued by NRB .Despite the increasing demand for credit, Banks and
financial institutions are not able to sanction the loan limit on stipulated time as they see unknown probability in those areas. Mostly it is being done in order
to boost the poorest sector of the economy.

Provision regarding priority sector lending: A class licensed institutions are mandated to lend a particular portions of their credit i.e 10% on the
agriculture sector and 15% combined on tourism and hydro/energy sector. They are compelled to lend 25% of credit altogether. B and C class licensed
institutions are required to lend 15% and 10% respectively of their total outstanding loans and advances. They can invest in agriculture, tourism,
energy/hydro, export, SME, medicine, cement and garment industries too. NRB has imposed the fines and penalty quarterly for the shortfall in lending
requirement as per the NRB Act, 2058, section 81 and unified directives 2075(17). While measuring the portion of lending, 6 months prior loan and advances
are considered along with bills purchase and discount.

( priority sector lending is becoming inconvenient to all commercial banks due to the unattractive demand for loans from those sectors)

Relaxation by Central Bank: NRB has provide flexibility toward taking an action against 6 commercial banks issuing circulars dated 2076-3-3. Central Bank
deferred the timing period up to Jestha 2076. As per Key financial indicators published by NRB, Nepal Bangladesh bank has not fulfilled the prescribed
criteria floating only 8.52% loan on the agriculture sector. It seems fine and penalties must be imposed on the bank for noncompliance with the directive. The
highest interest rate taken by the bank is applied for penalty calculation. NRB Board might defer the time again which is against the rule . This is becoming
inconvenient to all commercial banks due to the unattractive demand for loans from those sectors.)

66. Which one is not the government securities?

A. T- Bill.
B. Floating rate Bonds
C. Dated Securities
D. Call/Put Option Bonds.
(A Treasury Bill (T-Bill) is a short-term U.S. government debt obligation backed by the Treasury Department with a maturity of one year
or less. Treasury bills are usually sold in denominations of $1,000. However, some can reach a maximum denomination of $5 million in
non-competitive bids.)

( Floating rate bonds: Bond whose interest amount fluctuates in step with the market interest rates, or some other external measure. Price of floating rate bonds remains
relatively stable because neither a capital gain nor a capital loss occurs as market interest rates go up or down.)