Banking Awareness

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

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.

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

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.

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

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.

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

S4. Ans.(d)
Sol. The tenure of an 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.

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

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

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 account held by a third party during the process of a transaction between two parties. Definition: An escrow account is a temporary pass through 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. The Doing Business Report” is prepared by which of the following organizations 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

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.

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

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.

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

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.

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

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.

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

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.