IBPS Banking & Financial Awareness Questions and Answers

Question 1

What is the primary objective of the Reserve Bank of India (RBI) when it increases the Repo Rate?

Accepted Answer

To control inflation

Answer

An increase in the Repo Rate makes it more expensive for commercial banks to borrow money from the RBI. This leads to banks increasing their own lending rates, which in turn reduces borrowing and spending by businesses and consumers. This reduction in money supply and demand helps to control inflation.

Question 2

A small business takes a term loan from a commercial bank. Due to operational difficulties, it fails to pay the Equated Monthly Instalment (EMI) for three consecutive months. The loan account remains overdue on the 91st day. According to RBI guidelines, how will the bank classify this loan account?

Accepted Answer

Non-Performing Asset (NPA)

Answer

As per RBI guidelines, a term loan is classified as a Non-Performing Asset (NPA) when the interest and/or instalment of the principal remains overdue for a period of more than 90 days. The initial stage of NPA classification is 'Sub-standard Asset', which falls under the broader category of NPA.

Question 3

Which of the following is a primary feature of the Pradhan Mantri Jan Dhan Yojana (PMJDY) aimed at promoting financial inclusion?

Accepted Answer

Offering access to a basic savings bank account with a RuPay debit card and overdraft facility.

Answer

The Pradhan Mantri Jan Dhan Yojana (PMJDY) is a national mission for financial inclusion. Its core features include providing a basic savings bank account, often with a zero balance facility, a RuPay debit card with inbuilt accident insurance, and an overdraft facility to eligible account holders, thereby bringing the unbanked population into the formal financial system.

Question 4

The regulation and development of the commodity derivatives market in India fall under the purview of which regulatory body?

Accepted Answer

Securities and Exchange Board of India (SEBI)

Answer

The Securities and Exchange Board of India (SEBI) is the regulator for the commodity derivatives market in India. This responsibility was transferred to SEBI after the Forward Markets Commission (FMC), the previous regulator, was merged with it in September 2015.

Question 5

A corporate client needs to transfer ₹50 lakhs urgently from their account to a vendor's account in another bank. They require the transfer to be settled individually and instantaneously. Which of the following payment systems would be most suitable for this transaction?

Accepted Answer

Real-Time Gross Settlement (RTGS)

Answer

Real-Time Gross Settlement (RTGS) is the ideal system for high-value transactions (minimum ₹2 lakh) that require immediate, real-time settlement on a gross, transaction-by-transaction basis. NEFT settles in batches, and IMPS typically has a lower transaction limit (up to ₹5 lakh).

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS - Institute of Banking Personnel Selection Practice Test

IBPS Banking & Financial Awareness Questions and Answers