Banking and Financial Institutions MCQs

Consider the following statements.
Assertion (A): A well-developed money market is the basis for an effective monetary policy. It is in the money market that the Central Bank comes into contact with the financial sectors of the economy as a whole and it is through the liquidity in the market that influences the cost and availability of credit.
Reasoning (R): A well-organized money market is an essential condition for the successful operation of the Central Banking policies, and for holding the conditions of liquidity within the bounds of what the monetary authorities consider desirable.

Arrange the following financial institutions in ascending order of their year of establishment:
1. National Housing Bank
2. Export-Import Bank of India
3. NABARD
4. Unit Trust of India
Choose the correct option:

Match List-I from List-II.

List-I	List-II
a. Assets, liabilities and personal risks	1. Property damage due to hurricane, fire, increased risk
b. Physical, social and economical risks	2. Damage of assets and liability of business and family
c. Hypothesis risks	3. These are those risk in which, a person is likely to suffer or not
d. Net risks	4. It has the potential of both profit and loss

What is the purpose of forming Banks Board Bureau?
1. The bureau will recommend appointment of senior officials in public-sector banks and thus, will insulate public-sector banks from government interference.
2. The bureau will inspect the level of NPAs of public-sector banks.
3. The bureau will identify the best practices in private-sector banks and seek their implementation in public sector banks.

Consider the following statements.
Assertion (A): The liability of the option buyer is limited in the currency options market.
Reason (R): Option buyer need not exercise the option if the exchange rate is not favourable for him.

Match the items of List-I with the items of List-II and select the correct option.

List-I	List-II
a. Relationship Banking	1. Dealing in hundis and acceptance of deposits.
b. Merchant Banking	2. Widening the entrepreneurial base and assist in a rapid rate of industrial growth.
c. Indigenous Banking	3. Engaged in the business of Issue Management.
d. Development Banking	4. Creating, maintaining and enhancing strong relationship with customers.

Match the items of List-I with List-Il.

List-I	List-II
a. Future	1. Consists of purchase or sale of commodities in two different markets with the expectations that a future change in price in one market will be offset by an opposite change in the other market
b. Swap	2. A contract in which a seller agrees to deliver an asset to a buyer at a predetermined price at some future date as privately negotiated
c. Hedging	3. A contractual agreement for exchanging a steam of payments with opposite and matching needs, to reap the benefit arising due to market discrepancies
d. Forward	4. A contract covering the purchase and sale of physical commodities or financial instruments for future delivery on a future exchange floor