Banking Exam IBPS PO 5 — Questions and Answers
Question 1: The 'Basel III' norms are internationally agreed banking regulations primarily aimed at:
- Standardizing banking fees across member nations
- Strengthening bank capital requirements and improving risk management (Correct answer)
- Unifying currency exchange rates globally
- Setting maximum interest rates on consumer loans
Correct answer: Strengthening bank capital requirements and improving risk management
Basel III is a global regulatory framework developed to strengthen bank capital adequacy, stress testing, and market liquidity risk management.
Question 2: Which of the following correctly describes 'Priority Sector Lending' (PSL) obligations in India?
- Banks must lend at zero interest to government employees
- Banks must allocate 40% of net bank credit to specified priority sectors like agriculture and MSMEs (Correct answer)
- Foreign banks are exempt from all PSL requirements
- PSL targets apply only to cooperative banks
Correct answer: Banks must allocate 40% of net bank credit to specified priority sectors like agriculture and MSMEs
RBI mandates domestic commercial banks to lend at least 40% of Adjusted Net Bank Credit (ANBC) to priority sectors including agriculture, MSMEs, and weaker sections.
Question 3: In reading comprehension for IBPS PO, an 'inference' question asks you to:
- Find a sentence that directly states the main idea
- Identify grammatical mistakes in the passage
- Conclude information that is implied but not explicitly stated (Correct answer)
- Summarize the passage in one sentence
Correct answer: Conclude information that is implied but not explicitly stated
Inference questions require candidates to understand the implied meaning beyond what is explicitly written in the passage.
Question 4: If the ratio of simple interest earned on two investments is 3:5 and the principals are equal with the same time period, what is the ratio of their interest rates?
- 5:3
- 3:5 (Correct answer)
- 1:2
- 2:3
Correct answer: 3:5
Since SI = (P × R × T)/100 and P and T are equal for both, SI is directly proportional to R; so the ratio of rates equals the ratio of SI = 3:5.
Question 5: The 'Negotiable Instruments Act' in India governs which of the following?
- Rules for foreign exchange transactions
- Promissory notes, bills of exchange, and cheques (Correct answer)
- Regulations for mutual fund investments
- Procedures for bank mergers and acquisitions
Correct answer: Promissory notes, bills of exchange, and cheques
The Negotiable Instruments Act, 1881 governs the use of promissory notes, bills of exchange, and cheques in commercial transactions.
Question 6: In the IBPS PO interview stage, candidates are primarily evaluated on:
- Their written test scores alone
- Communication skills, banking knowledge, personality, and suitability for the role (Correct answer)
- Their technical programming and IT skills
- The number of banking certifications they hold
Correct answer: Communication skills, banking knowledge, personality, and suitability for the role
The IBPS PO interview assesses overall personality, communication, awareness of current banking affairs, and candidate suitability for a Probationary Officer role.
Question 7: Which of the following is the role of the 'Deposit Insurance and Credit Guarantee Corporation' (DICGC) in India?
- Providing loans to failing banks
- Insuring bank deposits up to a specified limit per depositor per bank (Correct answer)
- Regulating credit card interest rates
- Managing foreign exchange reserves of India
Correct answer: Insuring bank deposits up to a specified limit per depositor per bank
DICGC, a subsidiary of RBI, provides deposit insurance coverage of up to Rs. 5 lakh per depositor per bank in case of a bank failure.
Banking Exam IBPS PO 5
The 'Basel III' norms are internationally agreed banking regulations primarily aimed at: