About Banking financial awareness

In a straightforward manner, banking awareness, for bank employees, can be defined as the banking strategy and the knowledge about how to communicate with consumers. Whereas, for clients or customers, it entails being informed about various bank lending programs, among other things. For yet another party, that is the student's community, especially those aspiring to clear competitive exams, banking awareness is a portion of their syllabus that includes questions about the historical record of banks in India, banking institutions, banking terminology, and the banking industry's activities and role in the global financial system.

Financial Awareness

While banking awareness consists of schemes being practiced across a variety of banks, circulars issued by RBI or rules & regulations set by it, and other matters involving banking; financial awareness comprises of finance-related news, matters relating to trade & commerce, and money market

Difference between Banking & Finance

Among the plethora of services that are offered by banks, the most common ones are providing loans, accepting deposits, underwriting securities, and offering shares publically. Whereas, finance companies perform and offer a yet broader and more advanced service range such as those involving insurance, asset management, and even services that facilitate financial research, among others. Thus, finance is an umbrella term that encompasses the term banking, inter-alia.

But Banking & Finance go hand in hand!

It wouldn’t be wrong to state that the two words are indeed inseparable from each other because it is not possible to sideline banking while talking about the finance and it is most definitely not so if you reverse the sides! Even though banking awareness and financial awareness can individually be studied but the paths of both do cross each other and become one ultimately. In order to acquire banking awareness, one is bound to study the intricacies of finance too; similarly, becoming financially aware and not learning about banking is impossible too. Thus banking and finance are both integral parts of an economy and are like two wheels of a vehicle, certain to be aligned and inter-linked.

Following are some of the multiple choice questions on the Banking financial awareness with answers that will help the students in developing their knowledge.

Banking financial awareness MCQ

1. Financial inclusion means

  • Wholesale Banking
  • Financial Banking
  • Retail Banking
  • bring all individuals and businesses under banking and all financial network

2. What is Contestable Period in insurance?

  • it’s a period when you get extra benefit
  • it’s a period when you have to pay extra premium
  • it’s a period when the validity of an agreement or contract may be challenged
  • It’s a maturity period of insurance

3. What is full form of NDTL?

  • Net Drawn Transaction Limit
  • National Demand and Time Limit
  • Net Demand and Time Liabilities
  • National Demand and Time Liabilities

4. What is the full form of DICGC?

  • Deposit Insurance and Credit Guarantee Corporation
  • Deposit Industries and Credit Guarantee Corporation
  • Demand Insurance and Credit Guarantee Corporation
  • Demand Insurance and Cheque Guarantee Corporation

5. Which of the following is not a part of CriSidEx?

  • CRISIL
  • EXIM Bank
  • SIDBI
  • None of the above

6. Which of the following statements are correct with respect to NBFCs?

  • NBFCs can accept deposits from NRI
  • Nomination Facility is not available to depositors of NBFCs
  • The deposits with NBFCs are insured
  • None of the above

7. Which among the following is the main difference between the fiscal policy and the monetary policy of a country?

  • Monetary Policy deals with the money supply in the economy whereas fiscal policy is regarding the revenue and the expenditure of the government.
  • Monetary policy is handled by central bank whereas fiscal policy is the domain of the government.
  • Monetary Policy has no bearing on the global market whereas fiscal policy is aimed at the global market only. 
  • Both 1 and 2

8. Which among the following services cannot be provided by Payments Banks in India?

  • It can issue debit cards
  • It can issue credit cards
  • It can accept deposits from individuals up to a limit of Rs 1 lakh per customer
  • Both 1 and 2

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

  • Credit risk and Operational risk
  • Credit risk and Market risk
  • Market Risk and Operational Risk
  • Credit Risk, Market risk and Operational risk

10. UPI payment system has been launched by which organisation?

  • Reserve Bank of India
  • National Payments Corporation of India
  • Mobile Payments Forum of India
  • Bharat Bill Payment system

11. Mutual Fund business from existing customers can be canvassed by__________.

  • Coercion
  • Cross-selling
  • Internal marketing
  • Outdoor marketing

12. How much amount has been allocated in interim budget 2019 under Pradhan Mantri Gram Sadak Yojana (PMGSY) for 2019-20?

  • 16,000 crore
  • 19,000 crore
  • 18,000 crore
  • 17,000 crore

13. Which of the following is not a general utility service offered by commercial banks

  • Gift cheques
  • Locker facility
  • Letter of Credit
  • Income tax consultancy
  • Merchant banking

14. Which of the following is not the part of the Scheduled Banking structure in India?

  • Money Lenders
  • Public Sector Banks
  • Private Sector Banks
  • Regional Rural Banks
  • State Corporative Banks

15. What is the Maturity of Treasury Bills?

  • Less Than 5 years
  • Less Than 3 years
  • Less Than 1 year
  • Less Than 1 month
  • Can be Matured at anytime

16. An account that a bank holds in a foreign country in another bank is known as _______.

  • Escrow Account
  • Cash Account
  • Nostro Account
  • Savings Account
  • Nominal Account

17. Which of the following is true regarding NEFT and RTGS?

  • NEFT has no minimum limit whereas RTGS has a minimum limit of 2 lakhs
  • Both NEFT and RTGS have no maximum limit
  • RTGS is faster as compared to NEFT
  • NEFT can be processed anytime
  • All of the above

18. ________ has been authorized by RBI as the Bharat Bill Payment Central Unit (BBPCU).

  • NPCI
  • NACH
  • NHB
  • Both NPCI and NACH
  • None of the above

19. Which of the following is not true about Payments Bank?

  • Payments bank can issue ATM/debit cards but not credit cards
  • Initial capital required for a Payments Bank is Rs 100 crore
  • Payments Bank must maintain Cash Reserve Ration (CRR) as decided by RBI
  • Payments Bank can give a loan of up to only Rs 1 lakh
  • Payments Bank can enable transfers and remittances through a mobile phone.

20. The maximum period of deposit in Recurring Deposit Account is:

  • 5 years
  • 10 years
  • 20 years
  • 30 years
  • There is no such limit

21. Foreign exchange management has a term Dirty Float which stands for _________.

  • When exchange rate is manipulated to take leverage in external transactions
  • When exchange rate is not at all managed by authorities
  • When country's regulation over foreign exchange market is weak
  • When a country allows free floating exchange rate
  • When Capital account convertibility allows free movement of capital with minimal regulations

22. Which of the following goods are considered as the intermediate goods:

  • All goods which are meant for further production
  • All goods which are meant for resale in the same year
  • All goods which are meant for consumption by consumers
  • Both (1) and (2)
  • None of the above

23. The Rural Banks came into existence in 1975 with the formation of which of the following banks?

  • Kamraz Rural Bank
  • Kakathiya Grameen Bank
  • Prathama  Bank
  • Kanakdurga Grameen Bank

24. Which among the following was the main recommendation of the Narsimhan Committee-II in 1998?

  • It recommended doing away with the Priority Sector Lending system
  • It recommended merger of banks and finance institutions, NBFCs etc. on the basis of synergy and operational efficiency
  • Both 1 and 2
  • None of the above

25. A ________ is a relative amount of capital to total assets (not risk-weighted).

  • Leverage ratio
  • Capital adequacy ratio
  • Liquidity ratio
  • Net Stable Funding Ratio
  • None of the above

26. Where is the headquarters of Small Industries Development Bank of India (SIDBI)?

  • Kolkata
  • New Delhi
  • Mumbai
  • Hyderabad
  • Lucknow

27. Which of the following is not true about Bharat Interface for Money (BHIM) app?

  • BHIM is a digital payments solution app, for easy and quick transactions, based on the Unified Payments Interface (UPI) from the National Payments Corporation of India (NPCI).
  • Money can also be sent to non-UPI supported banks using IFSC code and account number.
  • BHIM allows daily transaction limit of Rs 20,000.
  • Transaction Limits: Maximum of Rs. 20,000 per transaction and Rs. 30,000 within 24 hours.
  • BHIM framework allows its usage without internet also.

28. What is the main objective behind the introduction of Payments Bank?

  • To generate funds for entrepreneurs
  • To increase government tax base
  • To promote the idea of Make in India
  • To increase the penetration level of financial services to the remote areas of the country. 
  • None of the above

29. The new Rs 2000 banknote has the motif of _______ on the reverse side of it.

  • Mangalyaan
  • Taj Mahal
  • The Bay of Bengal
  • Mount Everest
  • None of the above 

30. NRO Account can be opened in the form of:

  • Saving Account
  • Current Account
  • Fixed Deposit Account
  • All of the above
  • None of the above

31. The New India Assurance Company was established in ________.

  • 1919
  • 1929
  • 1948
  • 1909
  • 1914

32. CASA ratio is the ratio of deposits in which accounts of a bank to its total deposits?

  • Current accounts
  • Saving accounts
  • Recurring accounts
  • Both 1 and 2
  • Both 2 and 3

33. The Union Budget of ________ is known as the 'Black Budget' in the history of Indian economy.

  • 1972-73
  • 1973-74
  • 1974-75
  • 1975-76
  • 1971-72

34. Which of the following is/are correct regarding the role and remit of RCAP?

  • The RCAP also supports the Financial Stability Board's (FSB)
  • The RCAP monitors adoption of Basel III standards by member jurisdictions
  • Through the RCAP the Basel Committee seeks to ensure full, timely and consistent implementation of the Basel III framework
  • The RCAP contribute in a so that the global financial stability can be maintained
  • All of the above

35. _________ is referred to as a ‘Drawer’ in a Bill of Exchange.

  • The one who accepts the order
  • The one to whom the payment is to be made
  • The maker of the instrument
  • All of the above
  • None of the above

36. What is the function of Jobbers in securities market?

  • Imparting liquidity to the market
  • Creating job opportunities in the market
  • Training newly registered brokers
  • Increasing market size
  • Reducing transaction time in the market

37. According to 2018 regulation brought by RBI, loans belonging to MSMEs will be classified as NPAs after how many days?

  • 120 days
  • 150 days
  • 180 days
  • 360 days
  • None of the above

38. In ‘MS Word’ MS stand for

  • Master Server
  • Micro Service
  • Microsoft
  • Mega Series
  • None of these

39. What is the full form of VLSI?

  • Versatile Logic Solution Integration
  • Very Low Scale Integration
  • Video Loop System Integration
  • Very Large Scale Integration
  • None of the above

40. What does ATM stands for?

  • Automated Teller Machine
  • Automated Teller Mechanism
  • Automatic Teller Mechanism
  • Atomic Teller Machine
  • Automated Telephone Machine

41. What is the full form of LAN while connecting different systems?

  • Logical Antenna Network
  • Local Area Network
  • Local Area numbers
  • Logical and Numerical
  • Local average of networks

42. VGA is -

  • Video Graphics Array
  • Visual Graphics Array
  • Volatile Graphics array
  • Video Graphics Adapter
  • None of these

43. MICR stands for?

  • Magnetic Ink Character Recognition
  • Magnetic Ink Code Reader
  • Magnetic Ink Cases Reader
  • None of the above
  • All of the above

44. What does the letter I stands for in the full form of IBM?

  • Indian
  • Internet
  • International
  • Imaging
  • Internal

45. DVD is an example of a(n)__________

  • Hard disk
  • Optical disk
  • Output device
  • Solid-state storage device
  • None of these

46. ALU is

  • Arithmetic Logic Unit
  • Array Logic Unit
  • Application Logic Unit
  • Asynchronous Logic Unit 
  • None of these

47. 'C' in CPU denotes–

  • Central
  • Common
  • Convenient
  • Computer
  • Circuitry

48. UNIVAC is

  • Universal Automatic Computer
  • Universal Array Computer
  • Unique Automatic Computer
  • Unvalued Automatic Computer
  • None of the above

49. (A/An) ____________ system is a small, wireless handheld computer that scans an item's tag and pulls up the current price (and any special offers) as you shop.

  • PSP
  • POS
  • inventory
  • data mining
  • PSS

50. The minimum period of deposit in Recurring Deposit Account is:

  • 6 months
  • 8 months
  • 12 months
  • 18 months
  • 24 months

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