Banking Awareness Quiz - 1 | Attempts: 697

1.

Why SLR is maintained?
- A.
  
  To control expansion of bank credit
- B.
  
  To ensure solvency of the banks
- C.
  
  To compel banks to invest money in government securities
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
SLR (Statutory Liquidity Ratio) is maintained for multiple reasons. Firstly, it helps in controlling the expansion of bank credit by mandating banks to maintain a certain percentage of their net demand and time liabilities in the form of liquid assets like cash, gold, or government securities. This ensures that banks do not lend excessively, preventing the economy from overheating. Secondly, maintaining SLR ensures the solvency of banks by creating a buffer of liquid assets that can be used to meet any unexpected liquidity demands. Lastly, SLR compels banks to invest a portion of their funds in government securities, which helps in financing government expenditures and managing public debt.

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2.

According to the new guidelines, which of the following tax is/are now abolished ? 1) Wealth tax 2) Fringe Benefit tax 3) Commodity Transaction tax
- A.
  
  All 1, 2 and 3
- B.
  
  1 and 2
- C.
  
  2 and 3
- D.
  
  Only 1
Correct Answer
C. 2 and 3

Explanation
According to the new guidelines, the tax that is now abolished is the Fringe Benefit tax and the Commodity Transaction tax.

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3.

The working of SEBI includes ?
- A.
  
  To regulate the dealings of share market
- B.
  
  To check the foul dealings in share market
- C.
  
  To control the inside trading of shares
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
SEBI, which stands for the Securities and Exchange Board of India, is responsible for regulating the dealings of the share market. This includes monitoring and supervising the activities of intermediaries such as stockbrokers and merchant bankers, as well as ensuring fair and transparent trading practices. SEBI also aims to prevent any foul dealings or fraudulent activities in the share market, protecting the interests of investors. Additionally, SEBI works towards controlling insider trading, which refers to the buying or selling of shares based on non-public information. Therefore, the correct answer is "All of the above" as SEBI's working encompasses all these aspects.

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4.

Which of the following rates are not fixed by RBI ?
- A.
  
  SLR
- B.
  
  PLR
- C.
  
  CRR
- D.
  
  Repo Rate
Correct Answer
B. PLR

Explanation
The Prime Lending Rate (PLR) is not fixed by the Reserve Bank of India (RBI). The PLR is the interest rate at which commercial banks lend to their most creditworthy borrowers. It is determined by individual banks based on various factors such as their cost of funds, risk assessment, and market conditions. Unlike the Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), and Repo Rate, which are directly regulated and fixed by the RBI, the PLR is set by individual banks to reflect their own lending policies and strategies.

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5.

Which of the following is not included in the core sectors of indian economy ?
- A.
  
  Transport
- B.
  
  Coal
- C.
  
  Steel
- D.
  
  Cement
Correct Answer
A. Transport

Explanation
Transport is not included in the core sectors of the Indian economy. The core sectors of the Indian economy consist of industries that are crucial for economic growth and development, such as coal, steel, and cement. However, transport is considered a supporting sector that facilitates the movement of goods and people, but it is not a core sector in itself.

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6.

Which of the following is an asset for a commercial bank ?
- A.
  
  Credit to farmers
- B.
  
  Deposits of public
- C.
  
  Borrowing from RBI
- D.
  
  Demand deposits of industries
Correct Answer
C. Borrowing from RBI

Explanation
Borrowing from RBI is an asset for a commercial bank because it increases the bank's liquidity and allows it to meet its short-term funding needs. When a commercial bank borrows from the RBI, it can access additional funds to lend to its customers or invest in other income-generating assets. This borrowing also indicates that the bank is able to maintain a good credit standing with the central bank, which enhances its reputation and ability to attract deposits and other sources of funding.

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7.

Which of the following is a selective credit control method ?
- A.
  
  Bank Rate
- B.
  
  CRR
- C.
  
  RBI Directives
- D.
  
  Open Market Operations
Correct Answer
C. RBI Directives

Explanation
RBI Directives is a selective credit control method because it refers to the directives issued by the Reserve Bank of India to commercial banks regarding their lending and investment activities. These directives are aimed at controlling and regulating the flow of credit in the economy. By issuing specific instructions and guidelines, the RBI can selectively control the credit flow to certain sectors or industries, thereby influencing the overall credit availability and credit conditions in the economy.

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8.

Who is the partner in the equity of Regional Gramin Banks ?
- A.
  
  Central Govt
- B.
  
  State Govt
- C.
  
  Sponser Banks
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank

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9.

Ministry of railway has decided to accept ………… as proof of identity for travelling on e-tickets ?
- A.
  
  Mobile bill
- B.
  
  Credit Card issued by a bank
- C.
  
  Visiting Card
- D.
  
  Press Card
Correct Answer
B. Credit Card issued by a bank

Explanation
The Ministry of Railway has decided to accept credit cards issued by a bank as proof of identity for traveling on e-tickets. This means that passengers can use their credit cards as a valid form of identification when traveling on e-tickets. This decision is likely made to provide more convenience for passengers and to ensure that their identity can be verified easily during their journey.

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10.

Name of the Insurance company “IDBI Fortis Life Insurance Company Ltd.” is changed to …….?
- A.
  
  IDBI HDFC Life Insurance Company Ltd
- B.
  
  IDBI AXIS Life Insurance Company Ltd
- C.
  
  IDBI Federal Life Insurance Company Ltd
- D.
  
  IDBI ICICI Life Insurance Company Ltd
Correct Answer
C. IDBI Federal Life Insurance Company Ltd

Explanation
The correct answer is IDBI Federal Life Insurance Company Ltd. This is because the question is asking for the new name of the insurance company "IDBI Fortis Life Insurance Company Ltd." and the correct answer provides the updated name.

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Banking Awareness Quiz - 1

Why SLR is maintained?

According to the new guidelines, which of the following tax is/are now abolished ? 1) Wealth tax 2) Fringe Benefit tax 3) Commodity Transaction tax

The working of SEBI includes ?

Which of the following rates are not fixed by RBI ?

Which of the following is not included in the core sectors of indian economy ?

Which of the following is an asset for a commercial bank ?

Which of the following is a selective credit control method ?

Who is the partner in the equity of Regional Gramin Banks ?

Ministry of railway has decided to accept ………… as proof of identity for travelling on e-tickets ?

Name of the Insurance company “IDBI Fortis Life Insurance Company Ltd.” is changed to …….?