FREE Banking Exam Awareness Question and Answers
Which of the following organizations or agencies has asked banks for a Rs. 1000 crore emergency fund to deal with the severe liquidity problem that is preventing the granting of loans to micro borrowers?
The organization that sought an emergency fund of Rs. 1000 crore from banks to tackle acute liquidity crisis for giving loans to micro borrowers was the National Bank for Agriculture and Rural Development (NABARD). NABARD is an apex development financial institution in India that focuses on providing financial and developmental support to the agriculture and rural sectors. It plays a crucial role in facilitating credit flow to rural areas and promoting inclusive growth in the country.
Which of the following account types is referred to as a "Demat Account"?
Accounts in which shares of various companies are traded in electronic form are known as "Demat Accounts." These accounts hold securities such as shares, bonds, mutual funds, and other financial instruments in an electronic or dematerialized format, eliminating the need for physical share certificates. Demat Accounts are an integral part of modern financial markets, providing investors with a secure and convenient way to hold and trade securities electronically. Transactions involving buying, selling, or transferring securities can be executed through Demat Accounts, making the process more efficient, cost-effective, and less cumbersome compared to dealing with physical certificates.
Which one of the following is not a General Insurance function?
Medical Insurance is not a function of General Insurance. Medical Insurance, also known as Health Insurance, falls under the category of Health Insurance, which is separate from General Insurance. Health Insurance specifically covers medical expenses and healthcare-related costs, including hospitalization, surgeries, doctor visits, prescription drugs, and other health-related services.
In India, obtaining a license from the RBI is required before operating a new branch. A requirement of the ___ Act states that.
Section 22 of the Banking Regulation Act deals with the licensing of banking companies to open new branches. It empowers the RBI to regulate the opening and operation of bank branches in India. Any banking company, including public sector banks, private sector banks, and foreign banks operating in India, must seek prior approval from the RBI before establishing a new branch.
The Banking Regulation Act's Section 9 forbids banking companies from holding any real estate other than what they would utilize themselves for a period of not more than one year. The RBI has the option to extend this time frame by another :
As per Section 9 of the Banking Regulation Act, 1949, the Reserve Bank of India (RBI) may extend the initial period of holding immovable property (other than for the bank's own use) for an additional period of five years. Therefore, the maximum permissible holding period for such immovable property, including the extension, would be up to twelve years from the date of acquisition.
Whose property are the cash notes stored in the currency chest?
Currency notes deposited in the currency chest are the property of the Reserve Bank of India (RBI). Currency chests are secure storage facilities maintained by the RBI or its authorized agencies, usually located at various bank branches across the country. The primary purpose of currency chests is to ensure adequate availability and distribution of currency notes and coins to meet the demand for cash in the economy.
Accepting public deposits is a bank's primary function. A bank may, however, decline to allow the establishment of an account on behalf of :
A bank can refuse to permit opening an account on behalf of "undesirable persons." Banks have the right to decline the opening of accounts for individuals or entities that are considered undesirable or pose potential risks to the bank's operations, reputation, or compliance with regulations.
The mortgage is a:
A mortgage is a security on immovable property given by a borrower to a lender as collateral for a loan. When a person or entity borrows money to purchase real estate, the lender typically requires the borrower to pledge the property as security for the loan. This pledge is known as a mortgage.
The RBI regulates the acceptance of deposits by non-banking financial institutions under:
The acceptance of deposits by non-banking financial companies (NBFCs) is regulated by the Reserve Bank of India (RBI) under the "Non-Banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998" (commonly known as NBFC-Public Deposit Directions). These directions issued by the RBI provide guidelines and regulations for NBFCs regarding the acceptance of deposits from the public. The objective is to safeguard the interests of depositors and maintain financial stability in the non-banking financial sector. NBFCs are financial institutions that provide a range of financial services similar to banks but do not hold a banking license. To avoid confusion and ensure the protection of the public, the RBI imposes specific rules on the acceptance of deposits by NBFCs. These rules include guidelines on interest rates, maturity periods, reporting requirements, and other prudential norms to ensure the safety and security of public deposits.
According to the following, all banking companies must contain the word "bank" in its name, and no company other than a banking company may use the words "bank," "banker," or "banking" as part of their name:
As per Section 7 of the Banking Regulation Act, 1949, every banking company in India is required to use the word "Bank" in its name. Additionally, no company other than a banking company can use the words "Bank," "Banker," or "Banking" as part of its name. This provision is intended to avoid confusion in the public's mind and to ensure that only entities authorized to conduct banking activities use such terms in their names.
Who of the following is responsible for overseeing banking operations?
The primary regulator of banking business in India is the Reserve Bank of India (RBI). The RBI is the central banking institution of the country and is responsible for overseeing and regulating the banking and financial system in India.
A corporation that intends to collect public deposits but is not a non-banking financial company is subject to the __ Act.
The Companies Act, 1956, was the primary legislation that governed companies in India until it was replaced by the Companies Act, 2013. Under the Companies Act, 1956, companies that were not NBFCs could accept public deposits subject to specific conditions and compliance with the rules and regulations prescribed by the Ministry of Corporate Affairs (MCA).
The balance sheet's liability section consists of:
The liability section of a balance sheet consists of all the debts and obligations that a company owes to external parties. It includes three main categories: Capital and Reserves: Represents the funds invested by the owners and accumulated profits of the company. Current Liabilities: Short-term debts and obligations due to be settled within one year, including accounts payable, short-term loans, and accrued expenses. Long-term Liabilities: Long-term debts and obligations due for repayment beyond one year, including long-term loans, bonds payable, and lease obligations.
Which of the following stock exchanges was allegedly operating with major irregularities on November 19, 2014, according to SEBI?
Delhi Stock Exchange (DSE) being allegedly involved in major irregularities on November 19, 2014, according to SEBI (Securities and Exchange Board of India). However, it's worth noting that the Delhi Stock Exchange faced challenges over the years, and its recognition was revoked by SEBI in 2014 due to its inability to meet regulatory requirements and improve trading activities. If there were any specific allegations or irregularities related to the Delhi Stock Exchange on November 19, 2014, further investigation and research would be required to provide accurate and up-to-date information.
These are the minimum cash reserves required by law.
The minimum cash reserves fixed by law constitute a percentage of aggregate deposits of the bank. This requirement, known as the Cash Reserve Ratio (CRR), is a monetary policy tool used by central banks to regulate the money supply in the economy and control inflation.
What is a fixed deposit receipt, which is stored with the bank for security, called?
Safe Custody is a service provided by banks to customers who wish to keep important documents, valuables, or financial instruments, such as fixed deposit receipts, in a secure and safe place. The bank acts as a custodian of these items, safeguarding them from loss, theft, or damage. Customers can retrieve their valuables or documents whenever they need them by presenting proper identification and following the bank's procedures for retrieval.