Banking Industry Questions and Answers for Bank Exams 2016

Banking industry questions will help you to grab confidence on questions asked on Banking awareness in various competitive examinations like IBPS PO, Clerk, RBI, Associate Banks of SBI and other bank exam.

1. Which foreign bank has been recently given licence by RBI to once again open bank branch in India?
(a) ANZ group (b) Bank of America (c) Lloyds bank (d) BNP (Ans : a)

2. There is serious debate on bank consolidation for India. What is meant by it?
(a) Bigger banks are considered to be safer
(b) Instead of large number of banks there is thinking of having few bigger banks
(c) Proposal is for merger of existing banks to have fewer banks which can withstand financial crises
(d) Some banks want to take over smaller banks for larger business (Ans : c)

3. Which Indian public sector bank has offered its shares for the first time to the investing public?
(a) Punjab & Sind bank (b) Bank of Maharashtra (c) Union Bank of India (d) United Bank of India (Ans : d)

Also Read : Trade and Industry Quiz

4. Which of the following denote demand deposits of a bank?
(a) Deposits in savings accounts (b) Deposits in savings and current accounts
(c) Balances in recurring deposit accounts (d) Balances in current and recurring deposit accounts (Ans : b)

5. Reserve Bank of India is known as–
(a) The central Bank (b) The leading financial institution
(c) The bank of the central government (d) The top most public sector bank (Ans : a)

6. Why are interest rates charged by micro finance institution higher than lending rates of banks?
(a) MFIs are not allowed to source deposits from public (b) banks have the benefit of cheaper funds
(c) MFIs borrow bulk of their funds from banks
(d) MFIs borrow funds from banks at high cost and also their administrative expenses are more (Ans : d)

7. Why are ICICI and HDFC banks being mentioned as foreign owned banks though they are known to be Indian banks?
(a) More than 51% of the share holding is owned by foreign investors (b) These banks are registered as overseas companies
(c) This is per RBI classification (d) The banks have maximum deposits of overseas investors (Ans : a)

8. If a bank wants to borrow money from RBI which rate of interest is applicable?
(a) Reverse repo rate (b) Base rate (c) Repo rate (d) Differential rate of interest (Ans : c)

9. NABARD is an apex financial institution in India. What are its major responsibilities?
(a) It is an institution for regulating credit for agriculture and other economic activities in rural areas
(b) It is an institution controlling cooperative banks
(c) It is a specialized bank solely for farmers (d) It is a specialized bank solely for farmers (Ans : a)

10. Under RBI’s new guidelines to fix base rate which one is not true?
(a) RBI provided partial freedom to banks to decide base rate (b) Banks will adopt their own methodology
(c) Base rate will be linked to the cost of deposits (d) Al loans to be benchmarked to the base rate (Ans : a)

11. Currently the interest payable on a savings bank account is–
(a) 3.5% per annum (b) 4% per annum (c) 3.5% monthly (d) None of the above (Ans : b)

12. A demand draft issued by one bank branch on another branch is legally–
(a) Cheque (b) Promissory note (c) Delivery order (d) Supply bill (Ans : c)

13. A current account in bank means–
(a) In which balances are kept high (b) interest is not paid on the balance in the account
(c) in which transactions should take place daily (d) Availing credit facilities (Ans : b)

14. What does EMI indicate in the context of a bank loan?
(a) Equal monetary incentive (b) Equated monthly instalment
(c) Exact monthly indicator (d) Exact mean index (Ans : c)

15. Financial inclusion is being emphasized by RBI for–
(a) Providing basic banking services to the unbanked areas (b) Providing loans to the unbanked population
(c) Opening accounts for the poor (d) Bringing branches of all banks under one authority (Ans : a)

16. The Governor, Reserve Bank of India is assisted by Deputy Governors. How many post are there?
(a) One (b) Two (c) Three (d) Four (Ans : a)

17. Recently RBI increased CRR from 5% to 5.75% to control money supply. What is CRR?
(a) Cash reserve ratio (b) Cash regulated ratio (c) Cash regulated return (d) Cash routine ratio (Ans : d)

18. Who is Banking Ombudsman?
(a) The chief vigilance officer of a bank (b) The chairman of a bank
(c) An official in the Finance Ministry, government of India
(d) An Independent authority appointed by RBI to address customer complaints (Ans : a)

19. Upto what amount are deposits in bank accounts of an account holder insured?
(a) The full amount in an account (b) Rs. 1 lakh (c) not insured (d) Rs. 2 lakhs (Ans : a)

20. The management of a bank rests with–
(a) RBI (b) Chairman and managing director of the bank
(c) Board of directors of the bank (d) Finance ministry, Govt. of India (Ans : b)

21. Why are banks offering different rates of interest on their savings accounts?
(a) RBI has deregulated interest rates on savings accounts (b) Bank are free to offer different rates of interest on their savings accounts
(c) Bank requiring more savings accounts deposits are offering higher rates of interest (d) All of the above (Ans : d)

22. Which of the following is a measure towards financial innovation in the banking sector?
(a) Starting of ATM (b) Having recovery agents for loan accounts
(c) promoting retail loans (d) Issuing of password for operating bank accounts (Ans : a)

23. Which is the least expensive transaction that is offered by the branch of a commercial bank?
(a) Branch banking (b) Mobile banking (c) ATM banking (d) All cost the same (Ans : c)

24. Which is the last private sector bank to have been allowed to open in the country?
(a) YES Bank (b) AXIS Bank (c) ING VYSYA Bank (d) IDBI Bank (Ans : a)

25. Most banks are increasing their lending rates at regular intervals. Why are they making loans costly?
(a) In view of RBI increasing their repo rates (b) RBI is wanting to control money supply
(c) in view of increase in cost of funds to banks (d) All of the above (Ans : d)

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