Banking and Financial Institutions MCQs

Question 1

In the process of currency deflation, the rate of inflation:

Accepted Answer

decreases

Answer

increases

Answer

remains constant

Answer

None of the above

Question 2

It has been generally viewed that when an economy grows beyond its potential growth rate, it causes inflation. How does growing faster than the potential rate cause inflation?

Accepted Answer

Fast growth causes quick resources utilization to full fill the higher demand

Answer

Fast growth causes more productivity which leads to higher supply and cost put inflation

Answer

Fast growth causes more employment opportunities which leads to rise in prices

Answer

None of these

Question 3

Which of the following limits the power of credit creation by Commercial Banks?

Accepted Answer

REPO rates

Answer

Fiscal Policy

Answer

Banking Laws

Answer

Business Pessimism

Question 4

The old name of which bank was imperial bank

Accepted Answer

State bank of India

Answer

Union bank of India

Answer

Punjab National Bank

Answer

Central bank of India

Question 5

Development Financial Institutions are usually helped by government and regulatory bodies. Which of the following instrument/s provided support funding support to them, specifically during initial periods?

Accepted Answer

Both A and B

Answer

Lines of credit from RBI

Answer

Statutory Liquidity Ratio bonds

Answer

None of the above

Question 6

Which one of the following statement is correct?

Accepted Answer

Narasimham Committee recommended making banking structure of the counting three tier

Answer

Granting loan to the borrowers is not the main function of a bank

Answer

Bank cannot buy and sell shares and debentures on behalf of customers

Answer

Banks have the same function as development bank

Question 7

Credit creation is a . . . . . . . . of a bank.

Accepted Answer

primary function

Answer

agency function

Answer

general utility function

Answer

None of these

Question 8

In order to control credit in the country, the RBI may

Accepted Answer

sell securities in the open market

Answer

buy securities in the open market

Answer

reduce CRR

Answer

reduce bank rate

Question 9

When did the National Housing Bank start its operations?

Accepted Answer

July, 1988

Answer

July, 1982

Answer

April, 1980

Answer

March, 1971