Banking and Financial Institutions MCQs

Question 1

To calculate capital adequacy ratio, the banks are required to take into account which of the following risks?

Accepted Answer

Credit risk, market risk, operational risk

Answer

Credit risk and operational risk

Answer

Credit risk and market risk

Answer

Market risk and operational risk

Question 2

Repo rate is the rate at which

Accepted Answer

Banks takes money from RBI

Answer

RBI takes money from banks

Answer

Government take money from RBI

Answer

Money is taken by one bank from another bank

Question 3

Which of the following can be defined as the contract between the original insurer and another insurer?

Accepted Answer

Reinsurance

Answer

Premium

Answer

Cover note

Answer

Co-insurance

Question 4

Which one of the following is not the function of NABARD?

Accepted Answer

To promote research in various aspects of the problems of urban development

Answer

To provide refinance assistance by way of short-term credit to state cooperative banks and sectoral rural banks etc, approved by the RBI for some specific purposes

Answer

To undertake inspection of cooperative societies other than primary cooperative societies and RRBs

Answer

To subscribe to share capital or invest in securities of any institution concerned with agricultural and rural development

Question 5

The well established and well-organised market where the sale-purchase of different securities takes place according to certain laws, is known as

Accepted Answer

stock exchange

Answer

production exchange

Answer

commodity exchange

Answer

None of these

Question 6

Securitization is:

Accepted Answer

All of the above

Answer

non-performing loans are acquired from banks and financial institutions at a discounted value and security receipts issued to them so that these loans are removed from their balance sheet enabling them to reduce the provision in respect of such loans and improve profitability

Answer

converting the illiquid loans of banks and financial institutions by Securitization Companies into tradable securities, after they are acquired and sold to the investors

Answer

a process of acquisition of non-performing loans from banks by a Securitization company and convert them into tradable securities and sold to the investors

Question 7

If the chairman is unable to attend any meeting of the SEBI then

Accepted Answer

any other member chosen by the members present from amongst themselves shall preside at the meeting

Answer

the meeting shall be adjourned till the chairman is able to attend the meeting

Answer

the meeting shall continue without anyone chairing it and the chairman shall be informed about the proceedings of the same

Answer

the chairman has to leave a message appointing some other person to be in the chair in his absence

Question 8

Which of the following is not an instrument of credit control in the banking system?

Accepted Answer

Tax rates

Answer

Open market operations

Answer

Moral per suasion

Answer

Cash reserve ratio

Question 9

Nomination facility is available to:

Accepted Answer

Individuals/Sole Proprietorship Accounts

Answer

Individuals/Sole Proprietorship accounts/Private Limited Companies

Answer

Individuals/Sole Proprietorship Accounts/Partnership Accounts

Answer

All of the above