Free Banking Exam Awareness Question and Answers

Question 1

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 :

Accepted Answer

5 years

Answer

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.

Question 2

Which of the following stock exchanges was allegedly operating with major irregularities on November 19, 2014, according to SEBI?

Accepted Answer

Delhi Stock Exchange

Answer

The Delhi Stock Exchange (DSE) was indeed the subject of major irregularities and non-compliance issues, as alleged by SEBI (Securities and Exchange Board of India) around November 2014. These allegations led to SEBI's intervention and ultimately the de-recognition of the DSE. This was a significant event in Indian financial news at the time.

Question 3

Which one of the following is not a General Insurance function?

Accepted Answer

Medical Insurance

Answer

General insurance typically covers non-life assets and liabilities, such as property (fire, crop, cattle), motor vehicles, and travel. While medical insurance is a form of health insurance, which general insurers often provide, in the context of classifying core general insurance functions, fire, crop, and cattle insurance are classic examples of property and liability coverage. Medical insurance, though related, is often considered a distinct category of health insurance.

Question 4

The balance sheet's liability section consists of:

Accepted Answer

All of the above

Answer

The liability section of a balance sheet provides a snapshot of what a company owes to external parties and its owners. This includes current liabilities (short-term debts), long-term liabilities (long-term debts), and capital and reserves (owner's equity), which represent the owners' claim on the company's assets. Therefore, all these components collectively constitute the liability side of a balance sheet.

Question 5

These are the minimum cash reserves required by law.

Accepted Answer

A percentage of aggregate deposits of the bank

Answer

This question refers to the Cash Reserve Ratio (CRR), a monetary policy tool mandated by the central bank (RBI in India). Banks are legally required to maintain a certain percentage of their Net Demand and Time Liabilities (NDTL), which primarily comprise aggregate deposits from the public, as cash reserves with the RBI. This ensures liquidity in the banking system and helps control the money supply.

Banking Exam Practice Test

Banking Exam Practice Test

Free Banking Exam Awareness Question and Answers