Banking and Financial Institutions MCQs

Question 1

Reverse Repo means:

Accepted Answer

Rate at which RBI borrows money from Commercial Banks

Answer

Rate offered to Blue chip companies

Answer

A rate equal to Bank rate

Answer

None of the above

Question 2

Reserve Bank of India controls the activities of which of the following banks in India? 1. Commercial banks 2. Cooperative banks 3. Foreign banks 4. Rural banks

Accepted Answer

All of the above

Answer

1, 2 and 3

Answer

1, 3 and 4

Answer

2, 3 and 4

Question 3

Identify the years in which different phases of bank nationalisation took place in India. 1. 1950 2. 1955 3. 1969 4. 1949 5. 1980 Select the correct answer:

Accepted Answer

2, 3 and 5

Answer

1, 2, 3 and 4

Answer

2, 4 and 5

Answer

3, 4 and 5

Question 4

Banks should not grant new loans for purpose of minor irrigation in:

Accepted Answer

Dark Block

Answer

White Block

Answer

Grey Block

Answer

All of these

Question 5

Which of the following statement is false?

Accepted Answer

Insurance is never a mathematically fair trade because the insurer adds several operating and other costs to loss costs when it calculates the premium

Answer

Risk averse people will pay an insurance premium that is greater than the mathematically fair chance of loss in order to relieve themselves of uncertainty

Answer

A risk seeker is willing to assume risk

Answer

The mathematically fair price for insurance is the objective risk for the insurer multiplied by the maximum possible loss

Question 6

Read the following statements and choose the correct answer: Statement I: Small Industry Development Bank of India (SIDBl) was set-up as a wholly owned subsidiary of RBI. Statement II: SIDBI has taken over the responsibility of administering small industry development fund managed by IDBI.

Accepted Answer

Only II is correct

Answer

Only I is correct

Answer

Both I and II are correct

Answer

Both I and II are incorrect

Question 7

The most important reason for an investor to prefer a Bank deposit is

Accepted Answer

All of the above

Answer

The credit worthiness of the Bank

Answer

The Bank does not invest in the securities

Answer

The Bank offers a guarantee

Question 8

Match List-I with List-II and select the correct answer: List-I List-II a. Narasimham Committee 1. Lending under consortium arrangement b. Shetty Committee 2. Frauds and malpractices in banks c. Ghosh Committee 3. Securities operations of bank and financial institutions d. Janakiraman Committee 4. Financial system in India

Accepted Answer

a-2, b-3, c-4, d-1

Answer

a-3, b-4, c-2, d-1

Answer

a-4, b-2, c-3, d-1

Answer

a-3, b-4, c-1, d-2

Question 9

Which committee suggested the re-opening up of the insurance sector to private players?

Accepted Answer

R. N. Malhotra Committee

Answer

Rangrajan Committee

Answer

Narasimham Committee

Answer

V. S. Vyas Committee