Banking and Financial Institutions MCQs

Question 1

Which one of the following institutions is promoted by the IFCI?

Accepted Answer

Rashtriya Gramin Vikas Nidhi (RGVN)

Answer

Credit Analysis and Research Ltd. (CARE)

Answer

Clearing Corporation of India Ltd. (CCIL)

Answer

Small Industries Development Bank of India (SIDBI)

Question 2

Which of the following pair is incorrect?

Accepted Answer

EXIM ⇔ For Import-Export

Answer

FCI ⇔ For commercial establishments financial institution

Answer

RBI ⇔ Bankers of Banks

Answer

IDBI ⇔ Industrial finance

Question 3

Which among the following defines the process of converting physical certificates into electronic form?

Accepted Answer

DEMAT

Answer

Liquidity

Answer

Accessibility

Answer

NEFT

Question 4

The floating rate system is characterised by:

Accepted Answer

the market forces that determine the exchange rate between two currencies

Answer

the central banking authorities of the two countries mutually agree upon the rate

Answer

help realigning the par value of major currencies

Answer

the rate of exchange mutually agreed upon between IMF and its member nations

Question 5

Which of the following are probable benefits of securitization, in which assets are transformed into security? 1. For the owner of the asset, it improves the liquidity position as the future receivables are replaced by cash. 2. It improves the channelization of money in the economy.

Accepted Answer

Both 1 and 2

Answer

1 only

Answer

2 only

Answer

Neither 1 nor 2

Question 6

Most firms shift their risks by

Accepted Answer

buying an insurance policy

Answer

establishing a self-insurance fund

Answer

establishing a safety programme

Answer

stopping the questionable activity

Question 7

Which of the following is not part of criteria laid down by RBI for NPA?

Accepted Answer

Interest on loan taken to purchase personal asset remains overdue for 60 days

Answer

Interest on loan remains overdue for a period of 90 days

Answer

Interest on loan taken for a long-duration agricultural crop remains unpaid for one crop season

Answer

Interest on loan taken for a short duration agricultural crop remains unpaid for two crop seasons

Question 8

Which one of the following is not the function of the Reserve Bank of India?

Accepted Answer

Accepting deposits and advancing loans to public

Answer

Issue of Bank notes

Answer

Custodian of Cash Reserves of Commercial Banks

Answer

Controller of credit

Question 9

By devaluation we mean:

Accepted Answer

A fall in the external value of a currency caused by Government action

Answer

A fall in the domestic value of a currency

Answer

A fall in the external value of a currency caused by the market forces

Answer

None of the above