1. Banks is India are governed by which of the following ...ibskayamkulam.in/OnlineExam/file/2013-09-251380087938New version... · 1. Banks is India are governed by which of the following

1. Banks is India are governed by which of the following Acts?

a) B. R Act

b) RBI Act

c) Indian Contract Act

d) a & b

e) None of these

2. Banking is defined in :

a) Section 5 b)of RBI Act

b) Section5 b) of B.R Act

c) None of these

3. Banks are permitted to accept:

a) Only deposits

b) Deposits and other goods

c) a or b

d) None of these

4. KYC norms are introduced in the Banks in order to :

a) Know the customer well

b) Prevent Money laundering & Combat terrorism

c) Both a & b

d) None of these

5. Can NBFCs accept deposits from the public?

a) No

b) Only with RBI approval

c) Yes

d) None of these

6 .The Reservation Bank of India was set up in :

a)1935

b)1934

c)1938

d)1940

7. The RBI was in brought in the ownership of government through RBI Act, 1948 in :

a)1948

b)1949

c) 1950

d)1951

8. The RBI can be defined as :

a)a lender at the last resort

b)a Bank which control credit slow in the economy of the country

c)a custodian of commercial Bank’s Cash reserves

d)All the above

9. In which of the following years , the recommendation of establishment of RBI made

a)1926

b) 1928

c)1931

d)1933

10. Which was the first commission recommended for establishment of Reserve Bank of India

a)Central Banking Commission

b)Hilton Young commission

c)Presidency Banking Commission

d)None of these

11. NBFCs are governed by which Act?

a) B.R Act

b) RBI Act

c) Both a & b

d) None of these

12. Can Individuals, firms and other unincorporated associations of persons whose principalbusiness is of financial institution or lending of acceptance of deposits, accept the deposits fromthe public?

a) Yes permitted under RBI Act

b) Yes only with RBI approval

c) Prohibited u/s 45Sof RBI Act

d) None of these

13. Can people who are engaged in manufacturing or trading accept deposits from the public?

a) Yes

b) No

c) Yes only with RBI approval

d) None of these

14. RBI license is issued for opening a bank a per:

a) Section 24 of B.R Act

b) Section 23 of B.R Act

c) Section 22 of B.R Act

15. RBI license is necessary for opening a new branch as per :

a) Section 22 of B.R Act

b) Section 42 of RBI Act

c) Section 23 of B.R Act

16. The Central Banking commission was set up in :

a)1925

b)1926

c)1931

d)1934

17. Who passed the bill to set up the Reserve Bank of India?

a) Legislative Assembly.

B)Parliament

c)Governor general

d)British council

18. The RBI was nationalized in :

a)1934

b)1947

c)1948

d)1949

19. Which of the following is not the member of Central Board Directors of RBI

a) Finance Minister of Central Government

b) Governors and Dy. Governors of RBI

c) Directors of local Boards of RBI

d) Directors nominated by Central government

20. How many Local Boards in the RBI has

a) 2

b) 3

c) 4

d) 5

21. The business which can be conducted by a bank is defined in:

a) BR Act

b) RBI Act

c) a and b

d) None of these

22. Can banks undertake buying and selling of goods?

a) No

b) Yes

c) None of these

23. What is the period up to which a property can be held by a banking company acquiredexpect for its own use?

a) Up to 7 years

b) Up to 5 years

c) Any period

d) None of these

24. Can a private sector bank be registered as a banking company under the companies Act1956?

a) No

b) Yes

c) None of these

25. State Bank of India is constituted as per:

a) RBI Act

b) B.R Act

c) SBI Act

Key

1.d 2.b 3.a 4.b 5.c 6.a 7.a 8.d 9.a 10.b 11.b 12.c 13.a

14.c 15.c 16.c 17.c 18.c 19.a 20.c 21.a 22.a 23.a 24.b 25.c

1. The currency notes issued by RBI are declared as:

a) legal tender

b) limited legal tender

c) unlimited legal tender

d)none of these

2. Which section of the RBI Act empowers RBI to issue and manage currency in India

a) Section22

b) Section42

c) Section24

d) none of these

3. In which denomination RBI can issue the notes?

a) Rs 1 to Rs 1,000

b) Rs 2 to 10,000

c) Rs 2 to 1,000

d) In any denomination

4. Banking Regulation Act, 1949empowers the RBI to :a) issue licence for the bank

b) regulate the business of the bank

c) audit of banks

d) all these

5. Which of the following are not the powers of RBI under the BR Act, 1949

a) Collect and furnish credit information

b) Appointment of bank chairman

c) Putting moratorium and winding up of a bank

d) To impose penalties

6. Regional Rural Banks are governed by:

a) Regional Rural Bank Act

b) RBI Act

c) a or b

d) None of these

7. What is the amount to be transferred to reserve fund by commercial banks as per presentRBI directives?

a) 20 %

b) 25%

c) 30%

d) None of these

8. Maximum extent of shares of a limited company which can be held by any bankingcompany security or as absolute owner is:

a) 50% of paid up capital of the company

b) 30 % of paid up capital of the company

c) 30 % of bank’s paid up capital and reserves

d) out of both b and c whichever is lower

e) None of these

9. Banks are not allowed to lend money against their own shares because:

a) It is prohibited under RBI Act as it amounts to depletion of capital

b) It is prohibited under BR Act as it amount s to depletion of capital

c) It is prohibited under NI Act as it amounts to depletion of capital

d) None of the above

10. As per B.R .Act which of the following should be include in a bank name

a) bank

b) baker

c) banking company

d) any of these

11. Which of the following activities other than banking business ,a bank can undertake

a) Buying, selling and dealing in billions and specie

b) Purchase and selling of bonds, Scrips and other Securities on behalf of constituents

c) Collecting and transmitting of money and securities

d) all the above

12. Which of the following activities a Bank cannot undertake?

a) Holding immovable property other than for own use.

b) Undertake and execute trusts

c) Carrying guarantee and indemnity business.

d) Manage, sell and realize any property in satisfaction of its claim

13. Which of the following is not a public sector Bank?

a) State Bank of India

b) A Nationalised Bank

c) Urban Co-operative Bank

d) Regional Rural Bank

14. Which of the following statements is not correct?

a) All private sector Banks are Banking Companies

b) Regional Rural Bank is not a public sector Bank

c) Private Banks are governed by Banking Regulation Act

d) Private Banks are governed by Banking Companies Act, 1956

15. Who appoints the members of Central Board of RBI?

a) President

b) Central Government

c) Banking Supervision Board

d) The Governor of RBI

16. Which of the following are the powers of Central Government to regulate Bank?

a) Suspend the operations of Bank

b) Issuing directions for inspection of Bank

c) Appointment of Court Liquidator

d) All the above

17. Prime Lending Rate is now changed with :

a) Bank rate

b) Call rate

c) Base rate

d) Repo rate

18. Every bank has to maintain SLR of 25 % to 40% as per:

a) S.24 of BR Act

b) S.42 of RBI Act

c) S.23 of BR Act

d) None of these

19. Preservation of bank records is defined in Section:

a) 45Y of NI Act

b) 45Y of RBI Act

c) 45Y of BR Act

d) None of these

20. One of your valued corporate customers wants you to return the paid cheques to them foraudit purpose. Can you accept such a request?

a) We can accept the request as they are our valued customers

b) We cannot accept the request as the cheques are bank’s property

c) We can accept the request provided they execute a stamped indemnity

d) We can accept the request only with the prior approval of RBI

e) None of the above

21. According to Sec. 35 of BR At, inspection of Indian banks situated outside India can becarried out by:

a) RBI

b) Respective Banks

c) EXIM Bank

d) IBA

e) None of these

22. Can a person who is adjudicated as an insolvent continue as a director of a bank?

a) Yes

b) No

c) Yes with RBI approval

d) None of these

23. Section 16 of BR Act prohibition a person:

a) To be a appointed as a director of the bank

b) To be appointed as a director of the bank even if the is convicted

c) To be appointed as a director of more than one bank


24. Section 21 of BR Act empowers RBI to :

a) Inspect the banks

b) Control CRR/SLR

c) Control advances by banks

25. RBI was constituted to :

a) Regulate the issued of banks notes

b) Keep reserves for securing monetary stability in India

c) Operate the currency and credit system of the country to its advantage

d) All the above

Key

1.c 2.a 3.b 4.d 5.b 6.a 7.b 8.d 9.b 10.d 11.d 12.a 13.c

14.b 15.b 16.d 17.c 18.a 19.c 20.c 21.a 22.b 23.c 24.c 25.d

1. Section 42 of RBI Act provides for :

a) Maintenance of CRR by banks

b) Maintenance of SLR by banks

c) Both a and b

d) None of these

2. The main factions of RBI are :

a) Issue of bank notes

b) Monetary control

c) Banker to the Government and banks

d) Lender of last resort

e) Collection and furnishing of credit information

f) None of the above

g) All the above

3. Br Act was amended in 1965 to regulate:

a) Commercial banks

b) Foreign Banks

c) Co- operative Banks

4. BR Act is not applicable to :

a) Primary Agricultural Societies

b) Co- operative land mortgage banks

c) Both a and b

d) None of these

5. BR Act deals with:

a) Regulation business of banking companies

b) Control over the management of banking companies

c) Suspension and winding up of banking business

d) Penalties for violation of the provisions of the Act

e) All the above


6. The share capital; of RBI is held by:

a) Banks and Central Government

b) Central Government only

c) All Banks only

d) None of these

7. There can be no more than ----- Deputy Governors in the Central Board of Directors of theReserve Bank of India:

a) 4

b) 3

c) 5

d) None of these

8. As per Section 22 of RBI Act:

a) RBI will be the banker of the Government

b) RBI will manage the borrowings of the Central Government

c) RBI will be the sole authority for issue and management of currency in India


9. RBI is empowered to issue notes of different denominations form:

a) Rs.2 to Rs.1000

b) Rs.2 to Rs. 10,000

c) Rs. 2 to Rs. 5000

10. RBI provides ways and means advances to:

a) Only Central Govt.

b) Only State Govt.

c) Both Central and State Govt.

11. ways and means advances are:

a) Temporary advances given by RBI to the Governments

b) Long term advances given by RBI to the Governments

c) a or b

d) None of these

12. Which among the following are the major powers of RBI?

a) Power to license

b) Power to regulate the business of banks

c) Power to inspect and supervise banks

d) All the above


13. RBI is the primary regulator of banks.

a) True

b) False

14. Under which of the following Act appeal lies to the Central Governments on removal ofmanagerial personnel and also for cancellation of banking license?

a) RBI Act

b) BR Act

c) Not provided any where

d) None of these

15. Is the Government has the power to suspend the operations of BR Act on therepresentation/recommendation of the RBI?

a) Yes

b) No

c) Yes under the directions of court

d) None of these

16. Rule making powers are available to the Central Government under :

a) RBI Act

b) NI Act

c) BR Act

d) None of these

17. Can the Central Governments suspend the business of banks and amalgamate orreconstitute them:

a) Yes under the provisions of RBI Act

b) Yes under the provisions of BR Act

c) Yes under the provisions of NI Act


16. Cooperative Banks operating in more than one State are governed by the provisions of:

a) State Cooperative Societies Act

b) Multi-State Cooperative Societies Act 2002

c) Both a and b

d) None of these

17. Who was the chairman of working group to suggest changes in Benchmark Prime LendingRate (BPLR)?

a)R. Ranganathan

b)Deepak Mohanty

c)Rangarajan

d)A.K.Chokraborty

18. Base Rate System was implemented with effect from:

a)1.1.2010

b)1.4.2010

c)31.3.2010

d)30.6.2010

19. Which of the following factors will influence while deciding base rate

a) Cost of deposits

b) Adjustment for the negative carry in respect of CRR and SLR

c) Profit margin of the Bank

d)All the above

20. Which of the following will ultimately be charged to the Borrower

a) Base Rate

b) Prime Lending Rate

c) Base Rate Plus Borrower specific changes

d) Least of the above

21. The Borrower specific charge s will include:

a) Product Specific Operating Cost

b) Credit Risk Premium

c) Tenor Premium

d) All the above

22. Which of the following is correct, regarding Base Rate a)It is the minimum Rate for allcommercial loans

b) Banks are not permitted to resort to any lending below the Base Rate

c) Small Borrowers will get the advantage of Base rate

d) All the above

23. Which of the following statement is not correct?

a) Benchmark Prime Lending Rate as the ceiling rates for Loans up to Rs.2 lacs standswithdrawn

b) Interest on DRI loan will continue without reference to the Base Rate

c) Base Rate should be above the BPLR

d) RBI will announce stipulation for export credit

24. Which of the following a bank has to follow regarding Base Rate

a) Banks need to display Base Rate at all the branches and also on the website

b) It should be conveyed to general public

c) Actual minimum and maximum lending Rate changed to major categories of borrowers to beinformed to RBI on quarterly basis

d) All the above

25. Base Rate for a Bank has to be approved by:

a) RBI

b) Board members of the Bank

c) Indian Banks Association

d) Finance Ministry

Key

1.a 2.g 3.c 4.c 5.e 6.b 7.a 8.c 9.b 10.c 11.a 12.d 13.a

14.b 15.a 16.c 17.b 18.b 19.d 20.c 21.d 22.d 23.c 24.d 25.b

1. Non scheduled Bank has to maintain a minimum CRR of Demand and Time liabilities

a)10%

b) 5%

c) 18.3%

d)18.5%

2. The maximum CRR as percentage to demand and time liabilities can be

a) 25%

b) 15%

c) 20%

d) none of these

3. Which of the following is not included while arriving at net demand and time liabilities formaintaining Cash Reserve ratio

a) Paid up Capital and Reserves

b) Credit balance in Profit and Loss Account

c) Amount taken from RBI,IDBI,NHB etc

d) All the above

4. Which of the following is not correct regarding submission of Return to RBI relating to CRR

a) It provides details of demand and time liabilities

b) This need to be submitted to RBI within 7 days

c) It is to be submitted on every Friday at the close of Business

d) It is submitted by the head office of the Bank

5. Which of the following penalty can be imposed by RBI in case of default in companions ofCRR requirements beyond two fortnights

a) Director can be removed

b) Bank operation can be closed

c) Director/Manager/Secretary can be fined

d) Chairman can be punished

6. In how many days the penalty imposed by RBI in case of default of CRR has to be paid bythe Bank?

a)14days

b)3days

c)10days

d)5days

7. What is the minimum and maximum CRR of DTL to be maintained by the Bank with RBI?

a)5% and 15%

b)3% and 15%

c)3% and 20%

d)To be decided by the RBI from time to time

8. On what basis the Demand and Time liabilities are calculated

a) Average daily balance for a fortnight

b) Closing balance at the end of each Friday

c) Closing balance at the end of notified alternative Friday

d) Any of these

9. How many interest RBI can pay on CRR balance maintained by the banks?

a) At Bank Rate

b) At Repo Rate

c) No Interest

d) At Base rate

10. What is true is connection with maintaining CRR by non-scheduled banks?

a) Cash Reserve need not be maintained with RBI

b) It can be with the Bank itself or in Current Account with RBI

c) It should not be less than 3 per cent of demand and time liabilities as on the last Friday ofsecond preceding fortnight

d) all the above

11. Under which of the following conditions RBI permission for branch licensing is not required

a) Change of location in the same city/village /town

b) For extending Banking Facilities for one month temporarily in a place

c) a) and b) both

d) None of above

12. The formation and management of cooperative societies operating in one State onlyincluding those conducting banking business are under the control of:

a) RBI

b) State government

c) Both a and b

d) None of these

13. Licensing of State cooperative banks and regulating their banking business is under thecontrol of:

a) RBI

b) State Government

c) Central Government

14.Dealings of banks in securities like shares and debentures are subject to the regulations by:

a) RBI

b) Government

c) SEBI

d) None of these

15. Which among the following are the important functions of a bank?

a) Acceptance of deposits from the public

b) Lending of such deposits

c) Investment of such deposits

d) All the above


16. What do you understand by Ancillary functions of bank?

a) Which are subsidiary to main functions

b) Which are independent of main functions

c) None of the above

17. Which among the following are Ancillary functions of a bank?

a) Collection of local and outstations cheques

b) Transfer of funds from one place to another

c) Safe custody of valuables

d) Issue of Letters of Credit and Guarantees

e) All the above


18. The purpose of issue of KYC Guidelines by RBI is to:

a) Prevent frauds

b) Prevention of money laundering

c) Both a and b

d) None of these

19. What is the cut off limit in respect of reporting high value transactions to the designatedagencies under Prevention of Money Laundering Act?

a) Below Rs. 10 lacs

b) Rs.10 lacs and above

c) Above Rs. 10 lacs

d) None of these

20. Banking Companies can accept from the public deposits of money withdraw able bycheque under---Section ––– Act.

a) Section 49A of B.R. Act

b) Section 24 of B.R. Act

c) Section 42 of RBI Act

d) None of these

21. Acceptance of deposits by companies are regulated by;

a) Companies Acceptance of Deposits) Rules 1975

b) Section 58A of the Companies Act, 1956

c) Both a and b

d) None of these

22. According to which Act a banking company can use any of the words “bank” “banker”, or“banking” ?

a) Section 7 of RBI Act

b) Section 7 of BR Act

c) Section 22 of BR Act

d) None of these

23. Can banks underwrite issue of stocks of a company?

a) Yes as per Section 61)d) of BR Act

b) Yes as per Section 6 of RBI Act

c) Yes as per Section 17 of RBI Act

d) None of these

24. Can the private sector banks act as agents for any Government of local authorities?

a) No

b) Yes

c) None of these

25. Can the banks undertake and execute trusts?

a) Yes

b) No

c) None of these

Key1.c 2.c 3.d 4.c 5.c 6.a 7.c 8.a 9.c 10.d 11.c 12.b 13.a

14.d 15.a 16.a 17.e 18.c 19.b 20.a 21.c 22.b 23.a 24.b 25.a

1. Can a bank undertake administration of estate of deceased customers?a) No

b) Yes

c) None of these

2. Who can specify the form of business that can be undertaken by a banking company asper 56 of BR Act?

a) State Government


c) None of these

3. Which of the following activities cannot be undertaken by a banking company?

a) Buying or selling of goods

b) Engaging in any trade

c) Holding of any immovable property except for its own use

d) All of these

e) None of these

4. In which year banks were nationalized in India?

a) 1969

b) 1980

c) a and b

d) None of these

5. What is the initial capital required for establishing a private sector bank in India presently?

a) Rs.100 core

b) Rs. 200 core

c) Rs.300 core

d) None of these

6. What is the amount of capital to be brought in by foreign banks to open offices in India?

a) US D 25 million

b) Rs. 300 core

b) US D 10 million

d) None of these

7. What is the objective of establishing RRBs in India?

a) To develop rural economy

b) To provide credit facilities for development of agriculture

c) To develop trade, commerce, industry in rural areas

d) All of these

e) None of these

8. The focus of RRBs is on:

a) Small farmers

b) Marginal farmers

c) Agricultural laborers

d) All of these

e) None of these

9. Authorized capital of an RRB should be:

a) Not less than Rs. 50 lacs and more than Rs. 1 core

b) Not less than Rs. 25 lacs or but not more than Rs. 1 core

c) Not to exceed Rs. 1 core

d) None of these

10. Which of the following conditions need to be satisfied for granting license for a Bank underSection 22 of B.R.Act

a) The company is or will be in a position to pay the depositors claims

b) The general character of proposed management will not be prejudicial to public interest

c) The company has adequate capital structure and earning prospects

d) none of the above

11. Which are the additional conditions have been stipulated by RBI for obtaining License for aforeign bank

a) The will be carried in India in public interest

b)The law in the incorporated country does not discriminate in any manner

c) The provisions of Banking Regulate Act are complied with

d) all the above

12. Which of the following is correct, regarding local area bank

a)They operate only in a limited geographical area

b)Their operations are restricted in the specific local area

c) No new licence will be given in future to the local area bank as per RBI policy

d) All the above

13. Which of the following condition Bank need to comply with before declaration of dividend?

a) A minimum CAR of 9%

b) Net NPA level as per RBI guidelines

c) Maximum Payout Ratio 40%

d) all the above

14. Which statement is correct relating to share holding by a Banking company?

a) There is ceiling on shareholding apart from subsidiaries

b) It should not exceeded 30% of paid up capital of concerned company or paid up Capital andReserve Bank of India

c) Holding of shares of a company where managing director has interest in the companyprohibited

d) All the above

15. Which of the following are the powers of RBI regarding appointment of chairman of a Bank?

a) If the position is vacant, the RBI may appoint, eligible person as chairman

b) The appointment will be valid for 3 years.

c) The chairman so appointed can removed only by the RBI

d) All the above

16. In what circumstances, RBI can appoint Additional Director and in the interest of :

a) Banking Company

b) Public

c) Depositors interest

d) Any one or all these

17. Which of the following agencies are involved in corporate governance of Banks?

a) Department of company affairs

b) SEBI

c) RBI

d) All the above

18. The minimum security to be maintained by the RBI for issue of currency notes is:

a) Rs.200 crore

b) Rs.500 crore

c) Rs.1000 crore

d) Rs.5000 crore

19. Which of the following is not the function of currency chest

a) It facilities deposit of surplus cash

b) It exchange the coins and notes

c) It can issue currency in the open market

d) It provides cash to Banks in case of need

20. Bank Rate can be defined as

a) Interest rate payable by banks on deposits

b) Interest charged by banks on loans and advances

c) Interest rate charged by RBI on lending to Commercial Bank

d) all the above

21. What is the percentage of subscription to the capital of an RRB by the CentralGovernment?

a) 15 %

b) 35%

c) 50%

d) None of these

22. What is the authorized capital of a Local Area Bank?

a) Not less than Rs. 1 core

b) Not less than Rs. 5 core

c) Not less than Rs. 10 core

d) None of these

23. The area of operation of Local Area Banks is restricted to:

a) Only one district

b) To any number of districts as decided by the bank

c) Cover only maximum of three districts

d) None of these

24. Which commission recommended the establishment of RBI?

a) John Hilton commission

b) Narasimham Committee

c) Kalyanasundaram Committee

d) None of these

25. RBI commenced its operations from:

a) 6th March 1934

b) 1st April 1935

c) 1st January 1949

d) None of these

Key

1.d 2.b 3.d 4.c 5.c 6.a 7.d 8.b 9.b 10.d 11.d 12.d 13.d

14.d 15.d 16.d 17.d 18.a 19.c 20.c 21.c 22.b 23.c 24.a 25.b

1. RBI was nationalized on:

a) 1/4/1935

b) 6/3/1934

c) 1/1/1949

d) None of these

2. The present share capital of RBI is:

a) Rs. 100 crore

b) Rs. 1000 crore

c) Rs. 5 crore

d) None of these

3. What is the maximum number of direction in the Board of RBI?

a) 14

b) 20

c) 15

d) None of these

4. Can RBI issue drafts and TTs just like commercial banks?

a) Yes as per RBI Act

b) No since it is not a commercial bank

c) Yes with prior permission of the Central Govt.

d) None of these

5. Which among the following can issue a promissory note or bill of exchange payable tobearer?

a) Central Government

b) RBI

c) Commercial banks

d) a and b

e) a,b and c

f) None of these

6. RBI issues bank notes against -––––– % backing of gold coin, gold bullion and otherGovernment securities.

a) 200%

b) 50%

c) 100%

d) None of these

7. What is the maximum period for which Ways and Means advances can be sanctioned byRBI to Governments?

a) 3 months

b) 6 months

c) 1month

d) None of these

8. Is RBI subjected to payment of Income Tax on any of its income, profits or gains?

a) Yes

b) No

d) None of these

9. What is the percentage of refinance provided by RBI on the eligible export creditoutstanding of banks?

a) 15%

b) 50%

c) 25%

d) None of these

10. Export credit refinance to banks is provided by RBI at:

a) Reverse Repo rate

b) Bank rate

c) Repo rate

d) None of these

11. Short term liquidity support is provided by RBI banks through :

a) Re-discounting of Bills of exchange

b) Liquidity Adjustment Facility

c) Export credit refinance

d) None of these

12. Liquidity Adjustment Facility provided by RBI operates through :

a) Repo auctions

b) Reverse Repo auctions

c) a and b

d) None of these

13. As per Section 25 of B.R. Act, the assets of banks must not be less than–––– % of itsdemand and time liabilities as on last Friday if every quarter.

a) 25

b) 75

c) 50

d) None of these

14. Banks are required to submit a return to RBI annually referred to as unclaimed deposits) onall deposit accounts which have not been operates for –––years and above.

a) 3

b) 5

c) 10

d) None of these

15. What is the periodicity for submission of a return to RBI on assets and liabilities of abank?

a) Quarterly

b) Monthly

c) Half yearly

d) Yearly

16. Who issues directions to banks regarding rate of interest to be charged by them ondeposits and advances?

a) Central Govt.

b) State Govt.

c) RBI

d) None of these

17. Which among the following is regulated by RBI?

a) Interest rates on term deposits

b) Interest rate on SB accounts

c) Both a and b

d) None of these

18. Interest rates on SB accounts is calculated on –––– product from 1/4/2010.

a) Monthly

b) Daily

c) Quarterly

d) None of these

19. Who can specify the retention period of bank records ruder Section 45Y of B.R. Act?

a) RBI

b) State Govt.

c) Central Govt.

d) None of these

20. Registration and winding up of Co- operative banks is regulated by:

a) RBIb) Registrar of Co- operative Societies

c) State Government

d) None of these

21. Winding up of Co-operative banks which are registered under DICGC Act, can be orderedby;

a) RBI

b) State Govt.

c) Register of Co-operative Societies

d) None of these

22. Which of the following statements is correct regarding Bank Rate?

a)It is a factor to decide interest rates on deposits by Banks

b) It is a tool of credit control

c) It affect money supply

d) All of the above

23. Which of the following statements is not correct regarding Bank Rate?

a) It has no relation with interest charged by the Banks on loans and advances

b) Interest on loans and advances is generally higher than the bank rate

c) Bank Rate affects inflation rate

d) Bank Rate can be increased or decreased by the RBI

24. Spread can be defined as

a) Difference between interest income and interest expenditure

b) Total yield on account of interest

c) Profit margin of bank

d) Extent of Risk on advances

25. At present the Bank Rate is

a) 4.5%

b) 6%

c) 7.5%

d)6.5%

Key

1.c 2.c 3.b 4.a 5.d 6.c 7.a 8.b 9.a 10.c 11.b 12.c 13.b

14.c 15.b 16.c 17.b 18.b 19.c 20.b 21.a 22.d 23.a 24.a 25.b

1. Bank Rate is decided by:

a)Indian Bank Association

b) Individual Commercial Bank

c) Finance Ministry

d) None of these

2. Which of the following section of RBI Act deals with the provisions of Bank Rate Policy?

a) Section49

b) ) Section21

c) Section34

d) Section42

3. Prime Lending Rate (PLR) is:

a) Interest charged to prime borrowers of the Bank

b) It is minimum interest the Bank would charge on Borrowed accounts

c) It is the optimum rate of interest on loans and advances

d) all the above

4. Prime Lending Rate PLR) is decided by

a)RBI

b)Indian Bank Association

c)Prime Borrowers of the Bank

d)Individual Bank

5. The purpose of maintaining Cash Reserves with RBI by Commercial Bank is

a) to provide better liquidity for banking system

b) to enable commercial bank to meet crises and emergencies

c) to enable RBI to control the credit

d)all the above

6. Which of the following statements is not correct regarding CRR?

a) The minimum CRR is 3% of Bank’s demand and time liabilities

b) RBI does not pay any interest on first 3% of CRR amount held with it

c) RBI is bound to pay interest on cash balance held with beyond 3%level

d) The RBI is empowered to increase or decrease the level of CRR

7. Which of the following statements is correct in respect of incremental CRR?

a) RBI can impose incremental CRR on demand and time liabilities

b) Incremental CRR would be addition to regular CRR

c) Incremental would be applicable only to additional deposits added after a specified date

d) The system of incremental CRR has been dispensed with

8. Which of the following penalties, the RBI can impose as a Bank in case it defaults inmaintaining the required CRR?

a) It will impose penal interest up to 5% over the Bank Rate.

b) It can impose a fine on the officer responsible for default

c) RBI can prohibit the Schedule Bank from receiving any fresh deposits

d) all the above

9. When RBI refuses to grant a license to a company to carry on banking business in India,whether such a company can carry on money lending business?

a) Yes

b) No

c) Yes with the permission of RBI

d) None of these

10. Which of the following conditions have to be fulfilled by a company incorporated outsideIndia which applies for a license to set up an office in India?

a) Carrying on of banking business by the company in India will be in public interest

b) The government or the law of the country in which the company is incorporated does notdiscriminate in any ways against banking companies registered in India

c) That the company complies with the provisions the BR Act as a applicable to foreigncompanies

d) All the above


11. The concept of Local Area Bank was introduced by RBI in order to :

a) Ensure that these banks operate only in a limited geographical area

b) Restrict their operations to the specified area so as to ensure adequate banking business inthat area

c) Both a and b

d) None of these

12. In which of the following events, the Reserve Bank can cancel the license granted to anybanking company?

a) The company ceases to carry on banking business in India

b) The company at any time falls to comply with any of the conditions imposes by RBI

c) The company does not fulfill at any time any of the conditions referred to in the BR Act

d) All the above

e) None of these

13. Can the banking company whose license is cancelled by RBI, make an appeal to theCentral Government and if so within what period?

a) The banking company cannot make any appeal against cancellation of the license

b) The banking company can make an appeal against the cancellation of the license within 30days from the date of cancellation of license

c) The banking company can make an appeal against the cancellation of license within 45 daysfrom the date of cancellation of license


14. Is RBI permission required for shifting a branch from one place to another within the samecity?

a) Required

b) Not required

c) None of these

15. Is RBI license necessary for opening a foreign branch of an Indian bank?

a) Yes required

b) Not required

c) None of these

16. Which of the following factors are taken into consideration by RBI before granting a licensefor opening a branch?

a) Financial condition and history of the bank

b) General character of its management

c) Adequacy of capital structure and earning prospects

d) Public interest

e) All the above


17. In the case of Regional Rural Banks, the application for permission to open a branchshould be sent to RBI through:

a) The Government

b) The Head office of the RRB

c) NABARD

d) None of these

18. Minimum capital and reserves of a banking company is stipulated in –––––– Section of BRAct.

a) 10

b) 5 c) 20

d) 11

e) None of these

19. According to Section 11 of BR Act, a foreign bank operating in India has to have a paid-upcapital and reserves of Rs. ––––– if it has places of business in the city of Mumbai and Kolkataor both.

a) 15 lakhs

b) 20 lakhs

c) 5 lakhs

d) None of these

20. In the case of Indian banks incorporated in India) the paid-up capital and reserves shouldbe:

a) If the has a place of business in more than one state also in the city of Mumbai and KolkataRs. 10 lakhs

b) If it has a place of business in more than one state and not in the city of Mumbai and KolkataRs. 5 lakhs

c) Both a and b

d) Either a or b

e) None of these

21. What should be the percentage of the subscribed capital of a banking company inproportion to its authorized capital?

a) 50%

b) 75%

c) 100%

d) None of these

22. What should be the percentage of the paid –up capital of a banking company in proportionto its subscribed capital?

a) 100%

b) 75%

c) 50%

d) None of these

23. Which of the following types of shares a banking company can gave which is incorporatedafter 1st July 1991?

a) Ordinary and equity shares

b) Ordinary and preference shares

c) Both a and b

d) None of these

24. Is there any ceiling on a person’s holding of shares in banking company under the BR Actor any other law?

a) Yes

b) No

c) None of these

25. What is the percentage of voting rights a shareholder can have in respect of the sharesheld by him in a banking company?

a) 5% of the total voting rights of all the shareholders of the banking company

b) 20% of the total voting rights of all the shareholders of the banking company

c) 10% of the total voting rights of all the shareholders of the banking company


Key1.d 2.a 3.a 4.d 5.d 6.c 7.d 8.d 9.a 10.d 11.c 12.d 13.b

14.b 15.a 16.e 17.c 18.d 19.b 20.d 21.a 22.c 23.a 24.b 25.c

1. Is Reserve Bank’s permission required to transfer the shares of a banking company to asingle party in excess of a specified percentage of their shares and if so why?a) Yes required with a view to ensure that controlling interest does not change hands withoutthe knowledge of RBI

b) Not required as RBI has given general permission to banks to ensure that the controllinginterest does not affect them


2. Any return has to be submitted to RBI regarding the shareholding to the Chairman, MDor CEO of a banking company?

a) No

b) Yes

c) None of these

3. What is the percentage of commission, brokerage, discount or remuneration payable onthe sale o shares of banking companies?

a) 5% of the paid-up value of the shares

b) 10% of the paid-up value of the shares

c) 2.5% of the paid-up value of the shares

d) None of these

4. For which of the following purpose or purposes a subsidiary can be formed by a bankingcompany in India as per Section 19 of BR Act?

a) To undertake any businesses which is permissible for banking companies under Clauses a)to o) of Section 61)

b) To carry on the business of banking exclusively outside India with the permission of RBI

c) To undertake other businesses which the Reserve Bank may permit with the approval of theCentral Government

d) All the above


5. Can the MD or Manager of banking company hold shares of a company in which thebanking company is interested?

a) No except in the case of subsidiaries

b) Yes excluding the subsidiaries

c) Yes including the subsidiaries

d) None of these

6. Not less than–––– % of the total number of members

of the Board of Directors of a banking company shall consists of persons who shall havespecial knowledge or practical experience in Accountancy, Banking , Agriculture , SSI, Finance, Law , Economics etc:

a) 39

b) 51

c) 25

d) None of these

7. Can the directions of a banking company have substantial interest in or be connected withas employee, manager or managing agent in a company or firm which carries on trade,commerce or industry except SSI as per Section 10A2)of BR Act?

a) No

b) Yes

c) None of these

8. What is the maximum period up to which a director of a banking company can hold officecontinuously and whether it is applicable to Chairman or to a whole-time director also?

a) Maximum 10 years and is applicable to Chairman and whole-time director also

b) Maximum 5 years and is not applicable to Chairman and whole-time director

c) Maximum 8 years and is not applicable to Chairman and whole-time director


9. Can the Reserve Bank order a banking company reconstitute its board which does not fulfillthe requirements as per Section 10A of BR Act?

a) Yes after giving reasonable opportunity of being heard

b) No as the Reserve Bank cannot interfere with the board of a banking company

c) Yes even without giving any reasonable time for hearing


10. Is a banking company should have a whole-time Chairman or a part-time Chairman as perSection 10B) of B.R Act?

a) No only a whole-time Chairman

b) No only a part-time Chairman

c) Yes a whole-time or a part-time Chairman


11. What is the period up to which a whole-time Chairman and Managing Director can holdoffice of a banking company?

a) No exceeding 10 years

b) Not exceeding 5 years

c) Not exceeding 8 years

d) None of these

12. Is RBI approval required for appointing a part-time Chairman?

a) Yes required

b) Not required

c) None of these

13. Can the whole-time Chairman /Managing Director of a banking company be re-appointedafter the expiry of the periods of 5 years?

a) No

b) Yes

c) None of these

14. Can the full-time Chairman of a banking company be a director in a subsidiary of the bank?

a) No

b) Yes with RBI approval

c) Yes

d) None of these

15. Which of the following Sections of Banking Regulation Act 1949 deals with the provisions ofStatutory Liquidity Ratio (SLR)?

a) Sections42

b)Sections24

c)Sections3b

d)none

16. Statutory Liquidity Ratio(SLR) can be maintained in the following way

a) cash

b) gold

c) unencumbered approved securities

d )all these

17. Which of the following statements is not correct regarding SLR requirement?

a) The minimum amount of SLR is 25% of demand and time liabilities as the end of notifiedFriday

b)The RBI can increase the level of SLR up to 40% of demand and time liabilities

c) RBI uses SLR as an instrument of credit control

d) maintenance of SLR does not affect credit creation capacity of Commercial Bank

18. Which of the following statements is correct in respect of maintenance of SLR?

a) Any cash balance with RBI in excess of mandatory requirement under Section 42 will beincluded as cash for the purpose of SLR

b) RBI decided the method of valuation of securities for the purpose of SLR

c) The Narasimham Committee suggested to bring down the level of SLR to 25%

d) All the above

19. Which of the following statements is correct regarding licensing of banking company underBanking Regulation Act 1949?

a)It is necessary to obtain a licence for opening of Banking Company

b)RBI has powers to cancel licence

c) The Bank may make an appeal with Central Government against the decision of the RBI

d) All the above

20. Which of the following statements is not correct regarding licensing of banking company?

a) RBI permit licence only when it is satisfied that the operations of the Bank of a BankingCompany

b) The financial position of Bank is sound

c) The Banking company having applied for a licence may carry on its business

d) It is not necessary for a foreign Bank to obtain licence from RBI

a) Yes required

b) Not required

c) None of these


a) No

b) Yes

c) None of these


a) No


c) Yes

d) None of these

23. Which of the following Sections of Banking Regulation Act 1949 deals with the provisions ofStatutory Liquidity Ratio SLR)?

a) Sections42

b) Sections24

c) Sections3b

d) none


a) cash

b) gold


d )all these






Key

1.a 2.b 3.c 4.d 5.a 6.b 7.a 8.c 9.a 10.c 11.b 12.a 13.b

14.c 15.b 16.d 17.d 18.d 19.d 20.d 21.b 22.c 23.b 24.d 25.d


a)Any cash balance with RBI in excess of mandatory requirement under Section 42 will beincluded as cash for the purpose of SLR

b)RBI decided the method of valuation of securities for the purpose of SLR


d) All the above


a) It is necessary to obtain a licence for opening of Banking Company



d) All the above





d) All the above


a) No

b) Yes

c) None of these


a) No


c) Yes

d) None of these


a) Sections42

b)Sections24

c)Sections3b

d)none


a) cash

b) gold


d )all these





d)maintenance of SLR does not affect credit creation capacity of Commercial Bank





d)All the above





d) All the above

11. Should the whole-time Chairman or Managing Director of a banking company have specialknowledge or practical experience of the working of a banking company?

a) Yes

b) No

c) None of these


a) No

b) Yes

c) None of these


a) No


c) Yes

d) None of these


a) Sections42

b)Sections24

c)Sections3b

d) none

15. Statutory Liquidity Ratio (SLR) can be maintained in the following way

a) cash

b) gold


d ) all these







a) Any cash balance with RBI in excess of mandatory requirement under Section 42 will beincluded as cash for the purpose of SLR

b) RBI decided the method of valuation of securities for the purpose of SLR


d)All the above





d) All the above

19. Which of the following statements is correct regarding opening of a Bank branch?

a)RBI permission is required to open an extension counter

b) The RBI may ease the norms of Branch licencing of its discretion

c)Industrial Banks are free to decide the place of branch opening

d)All the above


a) No

b) Yes

c) None of these


a) No


c) Yes

d) None of these


a) Sections42

b)Sections24

c)Sections3b

d)none

23. Statutory Liquidity RatioSLR) can be maintained in the following way

a) cash

b) gold


d )all these





d)maintenance of SLR does not affect credit creation capacity of Commercial Bank





d)All the above

Key

1.d 2.d 3.d 4.b 5.c 6.b 7.d 8.d 9.d 10.d 11.a 12.b 13.c

14.b 15.d 16.d 17.d 18.d 19.d 20.b 21.c 22.b 23.d 24.d 25.d

.

1. Which of the following statements is not correct regarding licensing of banking company?

a) RBI permit licence only when it is satisfied that the operations of the Bank of a BankingCompany

b) The financial position of Bank is sound

c) The Banking company having applied for a licence may carry on its business

d) It is not necessary for a foreign Bank to obtain licence from RBI

2. Which of the following statements is correct regarding opening of a branch by Bank?

a) It is necessary for a bank to obtain licence from the RBI to open a new branch

b) It is not necessary for a bank to obtain licence if the branch is open for 30days or less tocarry out temporary option

c) The place of a business for the purpose of a Bank branch is where deposits are receivedcheques encashed or moneys lend

d)all the above

3. As a banker to the Government which of the following functions RBI performs?

a)It makes and receive payments on behalf of the Government

b) It provides ways and means fiancé

c) It advices the Government on all monetary and Banking matters

d) All the above

4. As a custodian of Foreign of Exchange Reserve, Which of the following functions RBI doesnot performs?

a)It maintains official rate of exchange

b) It exchange foreign currency to the public

c) It administers exchange control of the country

d)It maintains balance of payment position

5. Which of the following statements is correct regarding opening of a Bank branch?

a)It is necessary for a Bank to obtain licence from the RBI to open a foreign Branch

b) No licence is needed, If the branch is shifted within same city, town or village.

c) A RRB has to apply for the licence to RBI through NABARD

d) All the above

6. Which of the following statements is correct regarding closing of a branch of a Bank?

a)A Bank is free to close any of its Branch and permission is not required

b) The loss making Branches/ non –visible Branches can be merged

c)Bank cannot close a rural Branch

d) All the above

7. Which of the following statements is correct?

a) Banks are required to submit a Return of unclaimed deposits under Section 26 of BankingRegulation Act,1949

b) This includes all the accounts which have not been operated upon for ten years

c) The return of unclaimed deposits is required to be submitted on 31st March of every year

d) All the above


a) Reserve Bank has to apply to High court for winding up of a Banking company

b) The Central Government can make an order of moratorium for a fraud not exceeding 6months

c) The Central Government has the power to sanction the scheme of amalgamation ofreconstruction prepared by the RBI

d) All the above

9. Which of the following is empowered to make rules regarding preservation of records by aBanking Company


b) Reserve Bank of India

c) Indian Banks Association

d) National Institute of Bank Management

10. What is the duration of preserving records of Books and accounts by a Banking Company?

a) 5 years

b) 10 years

c) 13 years

d) 12 years

11. What is nomination

a)A facility given to depositors by the Government

b)It confers a right to the nominee to receive payment of a deposit after death of depositors

c) It is a process of appointing legal heir by the depositor

d)It is a part of will on behalf of a depositor

12. Which of the following is correct relation to nomination?

a) Nomination can be made by depositor or jointly with other depositors

b) A minor can also be nominated as the nominee

c) A nominee is entitled to receive payment of the deposit only after the death of depositor orall the depositors

d) all the above

13. Which of the following statements is not correct regarding nomination?

a) Two or more persons can be nominated by a depositor or group of depositors

b) A Bank will have a full discharge of its liability if it makes the payment tote nominee

c ) Bank is not obliged to receive any notice of claim from any other person other than thedepositor

d)The Bank will take due notice of any order or certificate form competent jurisdiction relating todeposits where nominee is appointed

14. Which of the following statements is correct regarding nomination?

a) Nominee can be appointed for the safe custody articles

b)A minor nominee shall have to be represented by major person

c) The nomination can be cancelled by the depositor

d)All the above

15. Which of the following statements is correct regarding nomination?

a)Two or more hirers of a locker with joint signature may nominate one or more persons asnominee who may have access to the locker.

b) Even a minor can appoint a nominee but a major person has to sign on its behalf

c) If the nominee dies before the death of the depositors, the nominations automaticallyterminates

d)All the above

16. Under which of the following circumstances a Chairman or Managing Director of a bankingcompany will be disqualified?

a) If is a director of a company other than a subsidiary of the banking company

b) If he is a partner of any firm which carries on trade, business or industry

c) If he has substantial interest in any other company or firm or is a director, manger, managingagent, partner or proprietor of any trading, commercial or industrial concern

d) If he is engaged in any other business or vocation

e) All the above


17. Can the whole-time Chairman or Managing Director of banking company be removed fromoffice by the Reserve Bank?

a) Yes after giving such person or banking company a reasonable opportunity of being heard

b) No as the Reserve Bank cannot interfere in the internal affairs of a banking company

c) Yes only with the prior consent of the Central Govt.


18. When a whole-time Chairman or the Managing Director of a banking company dies orresigns or is not capable of discharging his functions , whether a temporary Chairman or MDcan be appointed and if so what is the periods of appointments?

a) No it cannot be done

b) Yes can be done but the period of such appointment should not exceed 4 months

c) Yes can be done and no period is stipulated by RBI


19. Is it necessary for the whole-time Chairman or Managing Director of a banking company tohold qualification shares?

a) Holding of qualification shares is exempted under Section 10C of BR Act

b) Holding of qualification shares is mandatory as per Section 10C of BR Act

c) Holding of qualification shares is required only when RBI insists for the same


20. Can the Reserve Bank appoint additional director on the boards of banking companies asper Section 36AB of BR Act?

a) No

b) Yes subject to certain conditions

c) None of these

21. What are the conditions for appointing additional director on the boards of bankingcompanies?

a) When it is in the interest of banking policy

b) When it is in the public interest

c) When it is the interest of the banking company

d) When it is in the interest of the depositors of the banking company

e) All the above


22. What is the periods up to which an additional director can be appointed by the ReserveBank in a banking company?

a) 5 years

b) 3 years

c) 10 years

d) none of these

23. Can an insolvent or a person convicted by a criminal court be appointed in the bankingcompany?

a) Yes

b) Yes with the approval of Central Govt.

c) No

d) None of these

24. In which of the following situations the Reserve Bank can remove any Chairman, Directorof Chief Executive Officer or other office or employee a banking company as per Section 36AAof BR Act?

a) When it is necessary in public interest

b) When it is for preventing the affairs of the banking company being conducted in mannerdetrimental to the interest of depositors

c) When it is for securing proper management of the banking company

d) All the above


25. What is the period for which a bank can open a temporary place of business for affordingbanking facilities to the public on the occasion of an exhibition/conference/mela etc.

a) 3 months

b) 1 months

c) 6 months

d) None of these

Key

1.d 2.d 3.d 4.b 5.d 6.d 7.d 8.d 9.a 10.c 11.c 12.d 13.a

14.d 15.d 16.e 17.a 18.b 19.a 20.b 21.e 22.b 23.c 24.d 25.b

1. Under which of the following circumstances, the banking companies will have to refer thematter to RBI while receiving requests for transfer of its shares?

a) When they receive more than specified percentagepresently10%) of their shares for transferto one party

b) When they receive more than specified percentage of their shares for transfer to more thanone party

c) Both a and b

d) None of these

2. Dividend by a banking company can be paid out of:

a) Only current years’ profit

b) Accumulated profit

c) Previous year’s profit

d) None of these

3 What should be the minimum capital adequacy ratio and net NPA level of a bank fordeclaring dividends as per RBI?

a) CAR of 10% and net NPA of 5%

b) CAR of 9% and net NPA of 3%

c) CAR of 9% and net NPA of 7%

d) None of these

4. What should be the qualifications of a person to become a whole-time Chairman/MD ofbanking company?

a) Special knowledge and practical experience of the working of banking company

b) Special knowledge and practical experience of financial, economic or businessadministration

c) Both a and b


5. Can a Chairman / MD of a banking company make an appeal against the order of theReserve Bank for his removal from office?

a) No as he has been removed by RBI

b) Yes to the Central Govt. within 30 days from the date of communication

c) Yes to RBI within 30 days from the date of communication


6. Who is empowered to appoint a whole-time Chairman or the MD of a Banking company?

a) State Govt.

b) Central Govt.

c) RBI

d) None of these

7. Is the additional director of banking company incurs ant obligation or Liability in theexecution of his office?

a) Yes

b) No

c) None of these

8. Is it necessary for an additional director to hold qualification shares in a banking company?

a) No

b) Yes

c) None of these

9. When the Chairman of a banking company is removed from office by RBI, can he take partin the management of any other banking company?

a) He is prohibited from taking part in any other banking company

b) He is allowed to take part in any other banking company


10. What is the maximum periods of office a person can hold as Chairman of a bankingcompany when he is appointed by RBI?

a) Maximum 5 years

b) Maximum 3 years

c) As decided by RBI

d) None of these

11. What is Corporate Governance in Banks?

a) It is promotion of corporate fairness

b) It is promotion or transparency

c) It is to protect the interest of the customers, shareholders and employees

d) All the above


12. Which Committee has issued guidelines for adoption of Principles of CorporateGovernance in banks?

a) Narasimham Committee

b) Tarapore Committee

c) Basel Committee of banking Supervision

d) None of these

13. Which of the following Committees recommended introduction of Corporate Governance inbanks?

a) Dr. A.S.Ganguly Committee

b) Dr.R.H. Patil Committee

c) Shri M.s.Verma Committee

d) All the above


14. How much stake a single entity or group of related entities can hold in the capital or controldirectly or indirectly in any private sector bank?

a) 5% of the paid-up capital

b) 10% of the paid-up capital

c) 15% of the paid -up the capital


15. How many members of a family as defined in S 6a of companies Act) can be on the Boardof a bank?

a) No restrictions

b) Not more than two members

c) Not more than one member


16. Does the Reserve Bank of India has powers to issue directions to banks and if so underwhat Section and Act?

a) Yes under section 21 of BR Act for control of advances

b) Yes under section 35 A of BR Act for general regulation of banking companies

c) No such powers are available to RBI

d) Both a and b

e) None of these

17. Does the Reserve Bank has any powers to caution or prohibit banking companies generallyor any banking company in particular against any transaction or class of transactions?

a) No such powers are available to the Reserve Bank

b) Yes such powers are available under Section 36 of BR Act

c) Yes such powers are available under RBI Act


18. What is the period with in which a return on unclaimed deposits to submitted to RBI underSection 26 of BR Act?

a) Within 45 days of the end of each calendar year

b) Within 60 days of the end of each calendar year

c) Within 30 days of the end of each calendar year

d) None of these

19. Under what section of BR Act, nomination can be created by the depositor?

a) S.45ZA

b) S.45Y

c) S.45Z

d) None of these

20. Section 45ZC of BR Act provides for:

a) Nomination in safe custody

b) Nomination on lockers

c) Nomination on deposit accounts

d) None of these

21. Under what section of BR Act, nomination can be made in respect of lockers?

a) S.45

b) S.45ZE

c) S.45ZA

d) None of these

22. Which of the following agencies, is empowered to frame rules specifying the period ofpreservation of records and instruments by a Banking Company?

a) Reserve Bank of India


c) Competent court

d)Indian Bank Association

23. Which of the following statements, is correct ?

a)A paid instrument can be returned by a Bank on the request of a customer

b) The request should be received with in prescribed preservation period

c) The Bank should keep a true copy of the instrument made by mechanical process at the costof the depositor

d)All the above

24. Which of the following statements, is correct?

a) RBI approval is required for the appointment of a chairman of a Bank

b) RBI is empowered to remove top managerial personnel of a Bank

c)RBI may appoint suitable person in place of the person so removed.

d) All the above


a)RBI empowered to conduct security of the affairs of the Banking company in addition toconducting regular inspection

b) RBI can conduct inseption of any banking company and its Books of Accounts

c) Based on recommendations of the RBI. the Central Government may prohibit Bankingcompany from receiving fresh deposits

d) All the above

Key

1.a 2.a 3.c 4.c 5.b 6.c 7.b 8.a 9.a 10.b 11.d 12.c 13.d

14.b 15.c 16.d 17.b 18.c 19.a 20.a 21.b 22.b 23.d 24.d 25.d

1. What are the powers of RBI under section 35A of Banking Regulation Act 1949 for issuingdirections to Bank

a)To issue directions in the public interest or in the interest of banking policy

b)To prevent affairs of Banking company if it is detrimental to the interests of depositors

c)To secure the proper management of any Banking company

d)All the above

2. Which of the following orders, the RBI may pass when the affairs of a Banking company aredetrimental to the interest of the public

a)To call any officer of the Bank to discuss the matter with RBI officials

b) RBI may depute its officer to watch the proceeding at any meeting of the board of Directors

c) To instruct Banking company to within specified time the changes in the management

d) All the above

3. Which of the following powers RBI has regarding control of advances by Banking companies

a)To determine the policy in relation to advances to be followed by banking companies

b) To decide the purpose for which advances may or may not be made

c) To fix margin to be maintained in respect of secured advances

d)All the above

4. Which of the following statements, is correct

a) The RBI may decide the maximum amount of advance which a bank may provide to onecompany or firm or individual

b)RBI my advice the bank for which maximum amount of guarantee may be given to any onecompany or firm

c) RBI has empowered to determine other terms and conditions to be followed by a Bankingcompany while considering the loans and advances

d) All the above

5. Which of the following statement is not correct?

a) RBI may decide interest rate to be charged by a Bank on individual loans

b)Margin amount of secured loans can be decided by the RBI

c) RBI may stipulate norms for the Bank for the commission to be charged on guarantees

d) Maximum amount of loan which can be considered by a Bank to a single party having regardto be paid up Capital, Reserves and Deposits of the concerned bank

6. Which of the following statements, is correct regarding rate of interest on loans andadvances

a) Individual Banks are free to determine the interest rates on loans and advances

b) The Bank may vary the interest rates among different parties for the similar kinds of loans.

c) Interest charged by the Bank to the debtor shall not be reopened in a court

d) All the above

7. Which of the following statements, is not in connection with interest on loans and advances?

a)The Bank may waive the part or full of interest charged to a borrower

b) The Bank has the liberty to provide interest free loan to a borrower

c) In case of interest charged by the Bank is not in conformity with the rate prescribed by theRBI, the court may disallow such excess interest

d) The Bank can charge the interest below the prime lending rate

8. The social control on Banking Companies was imposed on :

a) 1.2.1969

b)31.12.1968

c)1.7.1968

d)19.11.1968

9. 14 Major commercial Banks are Nationalized on:

a)1.7.1969

b)19.7.1969

c)1.1.1969

d)1.4.1969

10. The social control was imposition of additional control on private sector Banks in terms of :

a) determining priorities in lending and investment

b) evolving guidelines for the management

c) promoting re- orientation of the decision making machinery

d) All the above

11. Which of the following is not a public sector Bank

a) All nationalized bank

b) State bank of India and associates

c) Newly incorporated banks like ICICI Bank

d)Regional Rural Bank

12. Which of the following Banks, undertaking was taken over by State Bank of India?

a) Imperial Bank of India

b) Bank of Bengal

c) Presidency Bank

d) None of these

13. The State Bank of India was Nationalised in :

a)1964

b)1961

c)1965

d) 1955

14. How many banks were Nationalised in second Phase?

a)6

b)10

c)7

d)4

15. The 6 private Commercial Banks were Nationalised on:

a)4.9.1972

b) 31.12.1975

c )30.6.1977

d) 15.4.1980

16. What was the deposit criteria of 14 Banks Nationalised on 19 July 1969?

a)Rs 1000 crore

b) Rs 500 crore

c) Rs 100 crore

d) Rs 50 crore

17. The First Act of Bank Nationalisation of 14 Bank was passed in:

a)1969

b)1970

c)1967

d)1968

18. Which of the following Acts is now applicable to 14 Nationalised Banks?

a) The Banking Companies Acquisition and Transfer of undertakings) Act,1969

b) The Banking Companies Acquisition and Transfer of undertakings) Act,1970

c) The Banking Companies Acquisition and Transfer of undertakings) Act,1980

d) All the above

19. What is the core business of a banking company as per S.5 b) of BR Act?

a) Accepting deposits for the purpose of lending or making of loans and advances

b) Accepting deposits for the purpose of investments

c) Accepting deposits from the public to motivate them to save

d) None of above

20. Section 21 of BR Act empowers RBI to:

a) To advise banks to maintain SLR in respect of their demand and time liabilities

b) To issue licenses for opening branches of a banking company

c) To issue directions to control advances by banking companies


21. The Quantitative Credit Control is exercised by RBI through:

a) Bank Rate

c) Open Market Operations

c) Variable Cash Reserve Requirements

d) All of these

e) None of these

22. The Selective Credit Control measures of RBI refers to:

a) Determination of the policy in relation to advances to be followed by banks generally

b) Issue directions to banks as regards to purpose to the advances

c) Fix margins in respect of the secured advances, rate of interest and other terms andconditions on which advances may be made

d) All the above


23. Open Market Operations of RBI refers to:

a) Buying and selling of government securities to banks in the open market

b) Buying and selling of shares and debentures of companies in the Stock Exchange

c) Buying and selling of commercial paper of companies in the money market


24. RBI is authorized to regulate interest rates under Section 21 read with Section 35A of BRAct with regard to:

a) Only advances

b) Only deposits

c) Both a and b

d) None of these

25. Can RBI excise powers to regulate interest rates on loans and advances?

a) Yes it can regulate interest rates as per Section 212) e) of BR Act

b) No as the banks have the freedom to quote their own interest rates

c) Yes only with the prior approval of Central Government


Key

1.d 2.d 3.d 4.d 5.a 6.d 7.b 8.a 9.b 10.d 11.c 12.a 13.d

14.a 15.d 16.d 17.a 18.b 19.a 20.c 21.d 22.d 23.a 24.c 25.a

1. Lending at exorbitant interest rates is provided in:

a) BR Act

b) RBI Act

c) Usurious Loans act 1918

d) None of these

2. Can the rates of interest charged by banking companies be scrutinized by courts?

a) Yes it has powers to scrutinize the rates of interest

b) No as section 21 A BR Act makes the rates of interest charged by banks beyond the scrutinyof courts

c) Yes with the permission of Central Government


3. Can Reserve Bank exercise the power to regulate the payment systems of bankingcompanies and financial institutions?

a) No as the banks and financial institutions have their own payment systems in place

b) Yes with the prior permission of the Central Government

c) Yes as provided in Section 582) of RBI Act

d) None of these

4. Is the Reserve Bank authorized to issue guidelines in respect of internet banking?

a) Yes

b) No

c) None of these

5. Under which Act the Reserve Bank has powers to establish Ombudsman Scheme?

a) Under S.31 of RBI Act

b) Under S.35A of BR Act

c) None of these

6. When was the first Ombudsman Scheme introduced by RBI?

a) In 1995

b) In 2002

c) In 2006

d) None of these

7. The main objective of the Ombudsman Scheme was to:

a) Settle the grievances of the customers against deficiency in services rendered by banks

b) Sort out the difference of opinions between the customers and banks

c) To help the customers to file a case against banks


8. Which banks are covered under the Ombudsman Scheme?

a) All commercial banks excluding RRBs and primary cooperative bank

b) All commercial banks excluding RRBs but including Primary cooperative banks

c) All commercial banks including RRBs and Primary cooperative banks


9. Is sanction of advances covered under the Ombudsman Scheme?

a) Yes as the banks cannot refuse to sanction a loan

b) No as sanctioning an advance is the discretion of the bank

c) Yes provided RBI approval is obtained

d) None of these

10. Is bank to bank dispute being taken up by the Ombudsman?

a) No

b) Yes

c) None of these

11. When can the customer file a complaint with the Ombudsman?

a) After the cause of auction has arisen

b) Anytime as per his requirement

c) Immediately after the customer notices the deficiency in the service?


12. When does the cause of action arises according to Ombudsman Scheme?

a) After the expiry of one month period from the date of lodging a complaint with the bankconcerned

b) After the expiry of 15 days from the date lodging a complaint with the bank concerned

c)After the expiry of 45 days from the date lodging a complaint with the bank concerned


13. What is the maximum period within which a complaint has to be lodged with theOmbudsman?

a) Within two years after the cause of action has arisen

b) Within one year after the cause of action has arisen

c) Within one month after the cause of action has arisen


14. When was the Ombudsman Scheme last revised?

a) In 2002

b) In 1995

c) In 2006

d) None of these

15. What are the new services brought under the purview of the revised Ombudsman Scheme2006?

a) Credit operations, deficiency of services rendered by direct selling agents, service charges,fair code of conduct of banks

b) Only credit card operations and service charges and fair code conduct of banks

c) Only service charges and fair code of conduct of banks but not credit card operations


16. What is the maximum award compensation) allowed under the Ombudsman Scheme2006?

a) Rs.20lacs

b) Rs.10 lacs

c) Rs.15 lacs

d) None of these

17. Is there any appeal system under the Ombudsman Scheme 2006?

a) Yes

b) No

c) None of these

18. Who will be the Appellate Authority for hearing appeals under the revised OmbudsmanScheme2006?

a) Governor of RBI

b) CGM of RBI

c) Deputy Governor of RBI

d) All the above


19. Within what period an appeal has to be made by the aggrieved party under the revisedOmbudsman Scheme 2006?

a) Within 45 days of receipt of the award

b) Within 30 days of receipt of the award

c) Within 60 days of receipt of the award

d) None of these

20. Under what circumstances the aggrieved party can make an appeal to the AppellateAuthority?

a) Any person aggrieved by the award only can make an appeal

b) Any person aggrieved by the award or refection of a complaint can make an appeal


21. Does a banking company which appropriates any amount from the reserve fund have toreport it to RBI?

a) Yes it has to be reported to RBI within 21 days of such appropriation

b) Not required as the reserve fund belongs to the banking company

c) Not required unless the Reserve Bank insist for the same


22. Are foreign banks operating in India to transfer amount out of profits to reserve fund asprovided in Section 171) of BR Act?

a) Yes as the provisions of S.171) is applicable to them also

b) Not required as the provisions of S.171) is not applicable to them

c) Foreign banks voluntarily transfer the amount to resave fund report to RBI


23. Are foreign banks operating in India required to deposit 20% of profit with RBI either incash or in unencumbered securities?

a) No as it is not mandatory for them as per S.17 (1) of BR Act

b) Yes as it is mandatory for them as per S.17 (10) of BR Act

c) Yes as mandatory for them as per S.112) of BR Act


24. Every scheduled bank has to maintain CRR as per the provisions of :

a) S.42 of RBI Act

b)S.24 of BR Act

c) S.31 of RBI Act

25. In the case of non-scheduled bank, maintenance of CRR id required as per:

a) S.42 of RBI Act

b) S.18 of BR Act

c) None of these

Key

1.c 2.b 3.c 4.a 5.b 6.a 7.a 8.c 9.b 10.b 11.a 12.a 13.b

14.c 15.a 16.b 17.a 18.c 19.b 20.b 21.a 22.b 23.c 24.a 25.b

1. What is a scheduled bank?

a) It is a bank scheduled to do banking business in India

b) It is a bank as provided in the second schedule of BR Act

c) It is a bank included in the second schedule of RBI Act


2. Which of the following requirements are essential to include a bank in the second scheduleof RBI Act?

a) It has a pair-up capital and reserves of not less than Rs.5 lakhs

b) It affairs are not conducted in a manner detrimental to the interests of depositors

c) Either a or b

d) Both a and b


3. Any return is submitted by banks to RBI showing their demand and time liabilities andborrowings from banks in India?

a) Yes as required under Section (422) of RBI Act

b) Yes as required under Section 24 of BRI Act


4. Do the banks have to pay any penalty to RBI for not maintaining the stipulated balance inthe current account with RBI

a) No

b) Yes

c) None of these

5. What is the SLR to be maintained by banks as per RBI directives?

a) 25%

b) 20%

c) 30%

d) None of these

6. The SLR has to be maintained in the form of:

a) Cash with RBI

b) Cash, gold or unencumbered approved securities

c) Either a or b

d) None of these

7. What is the name of the annual report prepared by RBI under Section (172) of RBI Act,1934?

a) Monetary and credit Policy

b) Trends and Progress of banking

c) Both a and b

d) None of these

8. Can the Reserve Bank issue directions to banks regarding fixing the minimum or Maximumperiod of the deposits

a) No since banks are given the freedom to fix the periods of deposits

b) Yes with prior approval of Central Government

c) Yes as per Section 35A of B.R Act

d) None of these

9. RBI has fixed a ceiling on interest rates relating to –––– deposits

a) Domestic deposits

b) NRI term deposits

c) Both a and b

d) None of these

10. RBI has fixed a ceiling on interest rates on NRI deposits with a view to :

a) Bring down the interest rates on par with the rates prevailing in the market

b) To curb arbitrage inflow of NRI deposits

c) Both a and b

d) Either a or b

e) None of these [

11. RRBs have to submit the annual return of all accounts which have not been operated uponfor 10years to:

a) RBI

b) Nabard

c) State Govt.

d) Both a and b

e) a,b and c

f) None of these

12. Procedure for making nominations on deposit accounts is provided in:

a) RBI Act

b) Banking Companies Nomination) Rules,1985 under BR Act


13. How many persons can be nominated in deposit accounts?

a) Only one person

b) Only two person

c) Any number of persons

d) None of these

14. Can minor be appointed as a nominee?

a) Yes

b) No

c) None of these

15. Can a lunatic be appointed as nominee?

a) a) Yes

b) No

c) None of these

16. Can the depositor vary /cancel the nomination at any time?

a) Yes

b) No

c) None of these

17. Legal heirs of a deceased depositor put up a claim on the bank before payment is made tothe nominee. In that case:

a) Legal heirs may be advised to settle the matter separately with the nominee

b) Legal heirs may be advised to bring a court injection order failing which the balance will bepaid to the nominee

c) None of these

18. The statutory basis for payment and settlement system in India is :

a) RBI Act,1934

b) B.R Act,1949

c) Payment and settlement System Act, 2007

d) None of these

19. The Chairman of the Board for Regulation and Supervision of payment and settlementsystem in India is:

a) Chairman of IBA

c) Chairman of SBI

d) Governor of RBI

d) None of these

20. Electronic cheque is defined in:

a) Information Technology Act,2000

b) RBI Act, 1934

c) N.I. Act, 1881

d) None of these

21. Which amount the following tractions between banks have to be necessarily put throughelectronic mode as per RBI direction?

a) All transactions of Rs. 1 lach and above

b) All transactions of Rs. 10 lach and above

c) All transactions of above Rs. 10 lach

d) None of these

22. Can banks levy charges for all inward remittances under RTGS and NEFT?

a) Yes

b) No

c) None of these

23. Transitions below Rs.2lach cannot be routed through :

a) RTGS

b) NEFT

c) ECS

d) None of these

24. Transactions in Derivatives and money marker instrument regulated by RBI under:

a) Section 45W of RBI Act

b) Section 45Y of BR Act

c) Section 31 of RBI Act

d) None of these

25. RBI has issued guidelines in respect of internet banking covering:

a) Technology and security issues

b) Regulatory and supervisory issues

c) Legal issues

d) All the above


Key

1.c 2.d 3.a 4.b 5.a 6.b 7.b 8.c 9.b 10.c 11.d 12.b 13.a

14.a 15.b 16.a 17.b 18.c 19.c 20.c 21.b 22.b 23.a 24.a 25.d

1. Can an advocate represent the cases under Ombudsman Scheme 2006?

a) Yes

b) No


2. In the bank’s balance sheet, transfer of any sum out the balance of profit to ReserveFund can be done:

a) After declaring dividend

b) Before declaring dividend

c) None of these

3. The provisions of Section 171) of B.R .Act for creation a reserve fund do not apply to;

a) Private sector banks operating in India

b) Public sector banks operating in India

c) Foreign banks operating in India


4. Foreign banks operating in India have to deposit 20% if their profit for each year with:

a) State Bank of India


c) Their Head Office in India


5. While calculating the demand and time liabilities for the purpose of CRR, which of thefollowing liabilities are excluded?

a) Paid,-up capital and reserves

b) Credit balance in P&L account

c) Any loan taken from RBI

d) All the above


6. At what interval, banks are required to submit a return giving the details of NDTL on whichthe CRR is required to be maintained?

a) Monthly

b) Weekly

c) Fortnightly

d) None of these

7. What is the periodicity of the return to be submitted by banks to RBI under Section 24 ofB.R. Act for compliance with SLR?

a) Weekly

b) Monthly

c) Fortnightly

d) None of these

8. The minimum amount of transfer permissible under RTGS for public transactions is ––––––

a) Rs. 1 lac

b) Rs.2 lacs

b) Rs. 1 cr

d) None of these

9. Which of the following nationalized bank was re-named?

a) United Bank of India

b) United Commercial Bank

c) Union Bank of India

d) Dena Bank

10. How many members can be nominated as Board directors on Board of Bank

a)11

b) 13

c) 12

d) 15

11. What is the maximum number of whole time directors in a Bank?

a) 2

b)3

c) 1

d) 4

12. The whole time Directors are appointed by:


b) Central Government in consultation with RBI

c) Individual Bank

d) All the above

13. The maximum duration of appointment of Directors other than whole time directors wouldbe:

a) 1 year

b) 2 year

c) 3 year

d) 5 year


a) The duration of the bank can be appointed for a maximum period of five years

b) The period of appointment can be extended

c ) Once a Director ceases to be Director is not eligible for re – appointment as Director in thesame Bank for a period of 4 years.

d) All the above

15. Which of the following disqualifies a person to became a chairman of a bank

a) If a person is a Director of another company other than a subsidiary of a Bank

b) If a person has substantial interest in another company or a firm .

c) If a person is engaged in any other business or vacation

d) All the above

16. What is the minimum number of board meeting to be held in a year by the Bank?

a)12

b) 8

c) 6

d) 4

17. What is the minimum quorum for the board meeting?

a)50% of the total strength of Directors

b)One –third of the number of Directors present on the day subject to a minimum of 3.

c)One- third of the total strength of Directors

d)No such condition

18. In the second phase of Bank’s nationalization, 6 more Bank were nationalised on

a)31.12.1974

b)31.03.1975

c) 01.01.1980

d) 15.04.1980

19. Which of the following was the criteria for nationalization of 6 private sector Banks in 1980?

a) A minimum capital of Rs.100 crore

b) A minimum of Rs.200crore Demand and Time liabilities

c) A Bank with a minimum of Rs.200 crore Assets

d) None of these

20. The nationalised New Bank of India was later merged with:

a)Central Bank of India

b)Bank of Baroda

c)Punjab National Bank

d)Canada Bank

21.What is the total number of public sector bank as of now?

a)12

b) 20

c) 27

d) 28

22. The authorized capital of a nationalised Bank is:

a) Rs.1500crore

b) Rs.1000crore

c) Rs.500crore

d) Rs.5crore

23. Which of the following statements is correct regarding capital of a nationalised Bank?

a) The authorized capital may be raised Rs.3000 crore.

b)The capital cannot be reduced below the level of Rs.1500crore.

c) Government share of the paid up capital cannot be less than 51 per cent

d) All the above

24. Which of the following statement, is not correct?

a)The Nationalised Banks may go to public raise capital

b) The Public Sector Banks can raise foreign equity up to 49 per cent

c) The Public Sector Banks can raise capital from the public

d) Regional Rural Banks cannot raise capital from the public

25. Which of the following norms are applicable to a new private sector Bank?

a) A minimum capital of Rs. 300 crore and net worth of Rs.300 crore

b) Foreign Equity up to 74%

c) They can open the Branches including urban and metropolitan centers without permissionfrom the RBI

d) All the above

Key

1.b 2.b 3.c 4.b 5.d 6.c 7.b 8.b 9.b 10.d 11.a 12.b 13.c

14.d 15.d 16.c 17.b 18.d 19.b 20.c 21.d 22.a 23.d 24.b 25.d

1. Which of the following statement is correct regarding the operations of new private sectorBanks?

a)They will make full use automation

b)They need to achieve priority sector target of 40% of the net Bank Credit.

c)They will not be allowed to setup any subsidiary or mutual fund for at least 3 years after itsestablishment

d)All the above

2. The capital adequacy norms in Banks were introduced in :

a)April 1991

b) March1992

c) April 1992

d) July 1992

3.Capital adequacy ratio is the ratio of

a) Capital as compared to total Deposits

b) Capital as compared to total Advances

c) Capital as compared to total Assets

d) Capital as compared to Risk Adjusted Assets

4. Which of the following statement , is correct regarding Capital Adequacy Ratio?

a) The objective of capital Adequacy is to strength the financial stability of Banks

b) Capital is divided into two tiers, tier I and tier II.

c) Assets are assigned risk weight from 0 – 150 based on intensity of risk

d) All the above

5. The Banks are required to achieve a minimum Capital Adequacy ratio by March 5which isprescribed as:

a) 6per cent

b) 8per cent

c) 9per cent

d) 10per cent

6. The concept of Capital Adequacy in Banks was introduced by:

a)Narasimham committee

b)Basle committee

c)Reserve Bank of India

d)Ministry of Finance

7. Which of the following is accounted for Tier I Capital of the Bank?

a)Paid up Capital

b )Statutory Reserve

c) Disclosed Free Reserve and Capital Reserve arising out of scale of Assets

d) All the above

8. Which of the following is accounted for Tier II Capital of the Bank?

a)Undisclosed Reserves

b)Revolution Reserve and general provisions

c)Hybrid debt capital instrument and subordinated debt

d)All the above

9. Which of the following ratio of Capital Adequacy is described for Indian Banks which havebranches abroad?

a) 9 per cent

b) 10 per cent

c) 12 per cent

d) 15 per cent

10. The ‘CAMELS’ Rating for Books was recommended by :

a)Narasimham committee

b)Padmanabhan Committee

c)Nayak Committee

d)Rangrajan Committee

11. What is the concept of ‘CAMELS’ Rating?

a)It deals with expansion of Banks by RBI

b)It is a method of performance evaluation of Banks

c) It is the process of internet audit

d)All the above

12. Which of the following is not included in ‘CAMELS’?

a)Capital Adequacy and Asset Quality

b)Management and Earning Performance

c) Employee Performance

d)Liquidity and system

13. Which of the following rating are provided in ‘CAMELS’ Approach?

a)A to E

b) A,B,C

c)A&B

d)A to D

14. Which of the following rating Approach applicable to foreign Banks operating in India

a) CAMELS

b)CAMEL

c)CACS

d)CACE

15. Which of the following statements, is correct regarding CAMELS Approach?

a) The Banks have classified into two categories for the purpose Rating

b) For the rating of Foreign Banks Compliance with regulatory guidelines is significant

c) The Reserve Bank of India is the authority to decide Ratings

d) All the above

16. Which of the following supervision system was implemented by RBI in the year 2002 – 03

a) Risk Based Supervision

b) Financial Strength Supervision

c) Monetary and Credit Supervision

d) Overall Bank Management Supervision

17. The Risk Based Supervision in the bank was implemented by Reserve Bank of India in:

a) First quarter of financial year 2002 -2003

b) last quarter of financial year 2002 – 2003

c) Financial year 2002 – 2003

d) None of these

18. Which of the following included the Risk Based Supervision of Banks by the RBI

a) It is essentially on site inspection drive

b) The inspections are conducted with reference to Balance Sheet dates

c) Supervisions follow- up commences with the detailed finding of annual financial inspection

d) All the above

19. In what way Risk Based Supervision is better than CAMELS Approach?

a) Effective use of supervisory resources

b) Cushion against Risks

c) Focused attention on Weak Banks

d) All the above

20. Which of the following is not Business Risk under Based supervision?

a) Business strategy and environment Risk

b) Operational Risk

c) Co operational Risk

d)Group Risk

21. The control risk are :

a)Internal Central Risk

b)Organisation Risk

c) Management Risk and Compliance Risk

d) All the above

22. The level of risk can be determined as:

a) low

b) moderate

c) fair or high

d) All the above

23. The directions of the Risk under Risk Based Assets can be :

a) increasing

b) decreasing

c) stable

d) any one of the above

24. What are the various sources of information to assess the Risk profiling ?

a)Market intelligence Report

b) Adhoc Data from External and internal Auditors

c) On site finding

d) All the above

25. The RBI was constituted

a) to regulate the issue of bank notes

b) for keeping reserves for securing monetary stability in India

c) to operate currency and credit system

d) All the above

Key

1.d 2.c 3.d 4.d 5.d 6.b 7.d 8.d 9.c 10.b 11.a 12.c 13.d

14.c 15.d 16.a 17.b 18.d 19.d 20.b 21.d 22.d 23.d 24.d 25.d

1. the RBI Act come into force on:

a)1st March 1934

b)6th March 1934

c)15th March 1934

d)31st March 1934

2. Which of the following the RBI Act deals with?

a) In coporation, capital management and business of the bank

b) Collection and Furnishing of Credit Information

c) Acceptance of deposits by non- banking financial institutions

d) All the above

3. Which of the following the RBI Act does not deals with?

a) Publication of bank rate

b) Provisions for Credit Funds

c )Regulation of banking System except cash reserve

d)Non- compliance of provisions

4. Under Which Section the RBI was constituted

a) Section 1

b) Section 3

c) Section 10

d) Section 42

5. Who owns the capital of RBI?

a)Partly by public

b)Wholly by the Central govt

c)Control and state government

d) none of these

6. How many deputy governors can be appointed in RBI:

a)2

b) 3

c)4

d)5

7. Under whose directions, the RBI functions?

a) Finance Ministry

b)RBI governor

c ) Central Board of Directors

d)Central Government

8. Which of the following committee is under the reserve Bank Central Board?

a) Board of Financial Supervision

b)Board of Payment and Settlement System

c)Financial Stability Unit

d) All the above

9. which of the following is not a Regulatory Authority?

a) SEBI

b) IRDA

c) RBI – SEBI Technical Committee

d) Pension Funds Regulatory and Development Authority.

10. Which of the following places RBI does not have local boards?

a) Kolkata

b) Hyderabad

c) Delhi

d)Chennai

11. Every banking company in India has to prepare its balance sheet and profit and lossaccount as stipulated in:

a) S.24 of BR Act

b) S.29 of BR Act

c) S.29 of RBI Act

12. What is the period within which banks have to publish their accounts and balance sheet asper S.29 of BR Act?

a) Within 9 months from the end of the period to which the account and balance sheet relate

b) Within 3 months from the end of the period to which the account and balance sheet relate

c) Within6 months from the end of the period to which the account and balance sheet relate


13. Do banks have to submit copy of their Balance sheet and profit and loss account to RBI?

a) Copies of their Balance sheet and profit and loss account need not be submitted to RBI bybanks

b) Three copies of their Balance sheet and profit and loss account have to be submitted to RBIwithin 3 months from the end of the period


14. Can RBI conduct special audit of the accounts of any banking company?

a) RBI is not empowered to conduct such special audit

b) RBI is empowered to conduct special audit of any banking company as per Section 301B) ofBR Act

c) Such audit can be conducted in the public interest or in the interest of the banking companyor its depositors


15. Can RBI direct any banking company to submit a return on its liquid assets and if so whatis the periodicity of such returns?

a)Banks are not obliged to submit such returns on its liquid assets to RBI as per Section 243)ofBR Act

b) Banks are at liberty to submit such returns to RBI only if they so desire

c) Every banking company has to submit a return of its liquid assets to RBI under Section243)ofBR Act within 20 days from the emend of the month to which relates


16. Do the banks have to submit any return of its assets and liabilities to RBI?

a) Every month the banks have to submit to the RBI a return under S.27 of BR Act of theirassets and liabilities in India

b) No such return has to be submit by banks under S.27 of BR Act to RBI in respect of theirassets and liabilities

c) None of these

17. Does a banking company has to be submit ant quarterly return to RBI under S. 591) of BRAct in respect of its assets in India?

a) Indian banks are exempted under Section25 2) of BR Act to submit such quarterly return toRBI

b) All banking companies have to submit such quarterly return of RBI under Section 252) of BRAct


18. Banks have preserve their records for certain periods as per the provisions of :

a) S.45Y of BR Act

b) S.45Y of RBI Act

c) S.45 of NI Act

19. One of your valued corporate customers wants you return the paid cheques to them foraudit purpose. Can you accept their request?

a) No as the paid cheques are bank’s property and they cannot be parted with

b) We can accept the request only with the prior approval of RBI

c) We can accept the request since S.45Z of BR Act provider for it


20. What is composition of the Board for Supervision set up by RBI?

a) The Board consists of Deputy Governor of RBI and four directors

b) The Board consists of Governor, Deputy Governor and four directors

c) The Board consist of Governor acquire any banking company in India?


21. Can the Central Government acquire any banking company in India?

a) Yes as provided under S.36AE of BR Act

b) No as there is no such provision in the BR Act

c) Yes only with the prior permission of the Prime Minister of India


22. Is there any provision in the BR Act for amalgamation of banks in India?

a) There is no such provision in the BR Act

b) Yes there is a provision under S.44A of BR Act

c) None of these

23. Can the High Court order for winding up of a banking company?

a) Yes as provided in S.38 of BR Act

b) Yes only with the consent of the concerned banking company which is under liquidation

c) Yes as provided under Section 39 of BR Act


24. Can RBI be appointed as an Official Liquidator for winding up of a banking company?

a) No as the Court will appoint its own Official Liquidator

b) Yes only with the consent of the concerned banking company which is under liquidation

c) Yes as provide under Section 39 of BR Act

d) None of these

25. Can the banking companies go for voluntary winding up?

a) No only through Court proceeding as there is no such provision under BR Act

b) Yes as provided under S.44 of BR Act


Key

1.b 2.d 3.c 4.b 5.c 6.c 7.c 8.d 9.c 10.b 11.b 12.c 13.b

14.d 15.c 16.a 17.b 18.a 19.c 20.b 21.a 22.b 23.a 24.c 25.b

1. Is it required for private sector banks to submit a copy of their balance sheet and P&Laccount to the Registrar Companies?

a) Yes, as per Section 220 of Companies Act, 1956

b) No only to RBI under 31 of B.R Act, 1949


2. Is it mandatory for foreign banks to display their balance sheet and P&L account in branchpremises?

a) Not required to be displayed

b) Yes as provided in Section 33 of B.R Act

c) Yes only at its principal office as per Section 33 of B.R. Act


3. Who makes rules for preservation of records by banking companies?

a) RBI

b) Central Govt.

c) State Govt.

d) Indian Banks Association

4. Under which Section of B.R Act, RBI is empowered to conduct inspection of bankingcompanies?

a) Under Section 31 of B.R. Act

b) Under Section 35 of B.R. Act

c) Under Section 32 of B.R. Act

d) None of these

5. Which committee recommended setting up of Board for Financial Supervision of RBI?

a) Narasimham Committee

b) Kalyanasundaram Committee

c) Tara pore Committee

d) None of these

6. What are the important functions of Board for Financial Supervision?

a) Supervises the functioning of commercial banks, financial institutions and NBFC

b) Investigation of frauds

c) Offsite monitoring and surveillance system

d) All the above


7. Can the shareholder of the acquired bank claim compensation from the CentralGovernment?

a) Yes

b) No

c) None of these

8. Can the Central Government order for amalgamation two banking companies?

a) No

b) Yes

c) None of these

9. What is the penalty leviable upon a banking company or its official making false statementsunder Section 46 of B.R Act and Section 58B of RBI Act?

a) Imprisonment for a term which may extend to 3 years

b) Imprisonment for a term which may extend to 3 years along with fine

c) Only a fine as decided by RBI


10. What are the major objectives of credit policy

a) To control money supply

b) To monetary flow credit

c) To attain full employment and maintain stability

d) All the above

11. Which of the following are the assumptions for neutral money?

a) The quantity of money has no effect on the prices

b) When money become neutral prices of the product will depend on productive powers of theeconomy

c) Neutral money policy implies that monetary authorities should not change supply of moneyin response to change in the supply of goods

d) All the above

12. Which of the following formulate monetary and credit policy?


b) Ministry of finance

c) Ministry of Commerce

d) Indian Bank Association

13. What are the important features of the Liquidity Adjustment Facility?

a) It is a process of variable reserve reo auctions

b) Collaterised liquidity facility to primary dealers have been replaced by variable rate reserverepo auctions

c) Liquidity Adjustment Facility will be operated at difference timing of the same day

d) All the above

14. Which of the following credit policy does not contain?

a) Fiscal Concessions

b) Margin Requirements

c) Selective Credit Control Measures

d) Open Market Operations

15. One of the objectives of monetary policy is to maintain exchange stability because:

a) it is necessary for smooth international trade

b) Exchange fluctuations lead to lack in confidence in a particular currency

c) Any fluctuation in the exchange rate has direct effect.

d) All the above

16. In which of the following areas monetary can credit policy help?

a) Efficient Payment Mechanism

b) adequate Money Supply

c) Expansion of Financial System

d) All the above

17. Which of the following statements, is not correct?

a) Monetary policy has facilitated growth of financial institutions.

b) Monetary policy has resulted in widening the gaps between rich and poor

c) Monetary policy has improved the balance of payment position

d) Credit Policy has been instrumental in the increased saving rate

18. What is open market operations being on ducted by Reserve Bank of India?

a) It is a process of buying and selling government securities by the RBI on behalf of thegovernment

b) It has direct impact on cash base of the Commercial Banks

c) Bothe a) and b)


19. What happens when Reserve Bank of India sells government securities under open marketoperations?

a) The extra money soaks up with the banks.

b) It has multiplier effect in reducing money supply.

c) Interest rate go up

d) All the above

20. What are the consequences of buying government securities by the RBI under open marketoperations?

a) It adds to the stock of money in the economy

b) The Bank can lend more

c) The extra liquidity ahs the power to push down interest rates.

d) All the above

21. Which of the following statements is not correct regarding open market operations?

a) The RBI buys securities when the economy is sluggish and demand is not picking up

b) RBI sells securities when the economy is overhead

c) Open market operations are used seasonally to heat up or cool of the economy

d) All the above

22. What is Repo?

a) It is a method of borrowing against certain securities for a short period

b) The borrower undertake a commitment to purchase back the same securities after specifiedperiod at predetermined price

c) The difference between the two prices is treated as interest

d) All the above

23. What is Reserve Repo?

a) it is the process where lender lends against the securities with a commitment to take backsecurities from the borrower against payment at a specific price

b) Reserve Repo is helpful is contracting liquidity in the system

c) It is an opposite practice to Repo

d) All the above

24. Under Interim Liquidity Adjustment Facility was managed through:

a) Repos

b) Collateral lending facility

c) Open market operations

d) All these

25. Liquidity Adjustment Facility was launched on:

a) June 5,2000

b) July 1,2000

c)April 1,2000

d) July15, 2000

Key

1.a 2.b 3.b 4.b 5.a 6.d 7.a 8.b 9.b 10.d 11.d 12.a 13.d

14.a 15.d 16.d 17.b 18.c 19.d 20.d 21.d 22.d 23.d 24.d 25.a

1. What are the main advantages of Repo Operations?

a) It affect liquidity in the system

b) interest rate have been stabilised

c) It provides scope for more participants

d) All the above

2. Which of the following statements, is correct?

a) Repo rate is an overnight rate

b) Repo rate is considered as the floor for all the call rates

c) When market liquidity is easy, RBI receives heavy bids for repo auctions

d) All the above

3. What are the main benefits of Liquidity Adjustment Facility (LAF)?

a) LAF is the quantum of adjustment

b) The interest rates are flexible

c) It help to meet day to day liquidity mismatch in the system.

d) All the above

4. What are the Consequences of Cash Reserve requirements

a) It affect the multiplier effect of the Banking System

b) Higher the reserve ratio, Lower the multiplier effect

c) Lower the multiplier effect, lesser the money supply in the system

d) All the above

5. Selective credit control is a process where:

a) RBI select certain commodities for controlling the flow of credit

b) RBI puts different credit control

c) Those industries which are sensitive to inflationary pressure are selected

d) All the above

6. What are the features of Selective credit control?

a) They distinguish between essential and non- essential uses of Bank credit

b) Only non- essential uses are brought under the scope of Central Bank controls

c) They affect not only the lenders but also the borrowers

d) All the above

7 . Which of the following ,is not correct regarding selective credit control?

a) Bank loans extended to speculators to hoard goods will lead to inflation

b) Bank credit to consumers to raise their demand for durable consumer goods will also lead toinflation

c) The commodities are selected at random

d) Selective credit controls are used to control inflationary pressure

8. Which of the following ,is correct regarding marine money requirements

a) The Reserve Bank may increase or decrease the marine money

b) Higher marine money will reduce the amount of loan

c) It is an effective method of controlling credit

d) All the above

9. Which of the following agencies can exercise selective credit control

a) Ministry of finance

b) Banking company itself

c) Reserve Bank of India

c) none of these

10. What are the main factors which influence Reserve Bank’s decision of credit control?

a) Public interest

b) Depositors interest

c) in the interest of banking policy

d) All the above

11. What are the main instruments of selective credit control?

a) Minimum margins for lending against selected commodities

b) Ceiling on the level of credit

c) Changing minimum rate of interest on advances against specified commodities

d) All the above

12. The major selective commodities are:

a) food grains

b) sugar and oil seeds

c) non –issue of guarantees

d) All the above

13. The major control which RBI can impose in case of selective commodities include:

a) restriction on credit

b) non- discount of bills

c) vegetable oil

d) All of these

14. In which of the following commodities, the RBI imposed selective credit control for the firsttime in 1956?

a) Wheat

b) paddy and rice

c) oil seeds

d) sugar

15. Which of the following commodities, is not covered under selective credit control?

a) Raw jute

b) cotton and textiles

c) vegetables

d) synthetic textiles

16. Regulation on consumer credit includes:

a) increased margin in Bank loans on durable articles

b) reduction in repayment schedule of Bank loans

c) Both a) and b)

d) all the above

17. The direct action of RBI may involve the following?

a) Prohibit a particular Bank against entering into particular transaction

b) RBI may charge penal interest on money borrowed by Banks

c)RBI may strictly warn a particular Bank for not complying the selective credit control norms

d) All the above

18. What does moral suasion imply?

a) It is a kind of presentation and request made by the RBI on Commercial Banks

RBI may issue certain guidelines to be followed during a particular period

c) RBI may advise to provide favorable conditions for the Bank credit in the period of businessrecession

d) All the above

19. What are the implication of moral suasion?

a) It has only psychological advantage

b) It has no legal suasion

c) It may be or may not be an effective tool

d) all the above

20. Rationing of credit is :

a) a process of controlling and regulating the purpose of credit

b) where RBI can put variable portfolio ceiling fixing maximum amount of loan for Bank

c) where RBI can put variable Asset ratio ie the ratio of total Assets to capital of the Bank

d) Any one or all the above

21. Which of the following ,is correct regarding rationing of credit?

a) RBI fixes ceiling for specific categories of loans to a Bank

b) If rationing of credit done to the total amount, it is qualitative control

c) If rationing of credit done for specific types of credit, it is qualitative control

d) all the above

22. Which of the following are measurers of selective credit control?

a) margin requirement

b) regulation of consumer credit

c) Direct action by RBI

d) All the above

23. Which of the following is not a measure of selective credit control?

a)moral suasion

b) bank rate policy

c)rationing of credit

d)decision on purpose of lending

24. What are the major constraints of selective credit control?

a) Non-banking source of credit may adversely after very purpose of selective credit control

b) Banks may not reflect true position for which purpose the loan is granted

c) Banks are no control to strictly ensure that loan proceeds have been used for the purposefor which it is availed

d) All the above

25. Which of the following is the limit of investment in plant and machinery for SSI sector?

a) Rs. 10 lac.

b) Rs. 50 lac.

c) Rs. 100 lac.

d) Rs. 300 lac.

Key

1.d 2.d 3.d 4.d 5.d 6.d 7.c 8.d 9.c 10.d 11.d 12.d 13.d

14.b 15.c 16.c 17.d 18.d 19.d 20.d 21.d 22.d 23.b 24.d 25.c

1. Which of the following are the target for different categories of priority sector?

a) Overall target 40% of net bank credit

b) Agriculture loans direct and indirect) 10%

c) priority sector target for foreign

d) All the above

2. What are the sub- target to weaker section made priority sector?

a) 5%

b)10%

c)20%

d)25%

3. Which of the following is the limit for home loans in rural and semi urban areas for thepurpose of priority sector advances?

a) Rs 2 lacs

b) Rs 5 lacs

c) Rs15 lacs

d) Rs 25 lacs

4. Under priority sector loans RTO can own the following number of vehicles?

a)4

b)10

c) 6

d) 5

5. Which of the following articles does not fall under priority sector?

a) Education loans

b) micro credit to Self Help Groups

c) Teachers Loans

d) Loan to Software Industry

6. What is the maximum credit limit for which loan can be sanctioned to software under thepriority sector?

a) Rs 100 lacs

b) Rs 50 lacs

c) Rs10 lacs

d) Rs 7.5 lacs

7. Up to which of the following limits loans granted to Small Scale Service BusinessEnterprises for instrument in fixed Assets excluding lend and building are treated as prioritysector?

a) Rs 10 lacs

b) Rs2 5 lacs

c) Rs100 lacs

d) Rs 300 lacs

8 Which of the following conditions should be fulfilled by the Business Enterprises providing anyservice under priority sector loans?

a) The original cost of equipment does not exceed Rs.20 lacs with a working capital limit of Rs10 lacs or less

b) The aggregate of term loan and working capital should not exceed Rs.20 lacs.

c) a) and b) both

d) a) or b) of the above

9. Which of the following is correct regarding loan to professional and self employed under thepriority sector?

a) Total borrowing should not exceed Rs 10 lacs of which capital not to exceed Rs 2 lacs

b) For qualified medicinal practitioners , total borrowing should not exceed Rs 15 lacs whereworking capital of Rs 3lacs

c) a) or b) of the above

d) only a) of the above

10. Which of the following is applicable for sub-target under SSI advance?

a) 40% of SSI advances should be granted to cottage industries tiny units with investment inplants and machinery up to Rs 5 lacs

b) 20% of total credit to SSI should be provided to units where investment in machinery andplant is between Rs 5 lacs to 25 lacs

c) 40% of SSI credit to the unit where investment in machinery and plant exceeds Rs.25 lacs

d) All the above

11. Which of the following norms are applicable to loans under DIR scheme?

a) A minimum of one percent total lending in the previous year should be lent under DIRscheme

b) Of the total DIR loans, 40%should go to SC/STs

c) 2/3 of total DIR loan should be extended in rural and semi urban areas

d) All the above

12. Which of the following statement is correct regarding priority sector advance by foreignBanks?

a) Foregin banks have toachieve 32% advance under priority sector

b) Expert finance by a foreign bank would treated as priority sector

c) Foreign bank to lend a minimum of 10 per cent of net Bank credit to each SSI and Expertcredit

d) All the above

13. Which of the following guidelines applicable in connection with shortfall in lending topriority sector?

a) An equivalent amount of shortfall under agriculture sector should be invested with RIDF

b) Any shortfall is achieving sub- target under SSI sector, an equivalent amount should beinvested with SIDBI

c) Interest on RIDF invested is payable at 4%

d) All the above

14. Which of the following agencies maintain RIDF (Rural Infrastructure Development Fund) ?

a) Ministry of Rural Development


c) NABARD

d) SIDBI

15. Weaker sector include:

a) small and marginal farmers

b) landless labourers tenant ,farmers, artisans and village and cottage

c) Beneficiaries under SGSY ,SJSRY , SLRS

d) All the above

16. . Which of the following constitute priority sector advances?

a) Advances up to Rs25 lacs granted for financing of distribution of agriculture inputs

b) Entire amount of refinance provided by the sponsor bank of RRB

c) Securised Assets relating to SSI

d) All the above

17. The measure taken by RBI to strengthen corporate governance in Banks include:

a)collection of information about directors

b)exercising due diligence

c)constitution of a nomination committee

d) All the above

18. Which of the following agency has stipulated the fit and proper“ criteria for directors ofbank?


b)SEBI

c)RBI

d)Company Law Board

19. Under Section36 AB of the BR Act, RBI is authorized to appoint:

a) Directors

b) Additional Directors

c) Managing Directors

d) All these

20. Which of the following interests , a Director of bank should not have in any other company

a) Beneficial Interest

b) Any interest

c) Substantial interest

d) All these

21. A Foreign Bank is required to deposit with the Reserve Bank

a) 20% of profit for each year

b) 30% of profit for each year

c) 20% of deposits collected each year

d) 30% of deposits collected each year

22. A bank cannot be declare dividend until all of the following are written off:

a) Bad debts

b) Expenses

c) Capitalised Expenses

d)NPAS

23. Which of the following are the condition for paid up and subscribed capital of a Bank?

a) Paid up capital should not be less than 50% of subscribed capital

b) Both should be equal

c) Both have no relationship

d) All the above

24. Maximum voting rights a share holder can in a banking company:

a) 10% of paid up capital

b) 5% of authorized capital

c) 10% of total voting rights of all shareholders

d) 10% of subscribed capital

25. Which of the following expenditure does not include, under Section 15 of BR Act?

a) Depreciation

b) Preliminary expense

c) Loss incurred

d) All the above

Key

1.d 2.b 3.c 4.b 5.c 6.a 7.a 8.c 9.c 10.d 11.d 12.d 13.d

14.c 15.d 16.d 17.d 18.c 19.b 20.d 21.a 22.c 23.a 24.c 25.a

1. In Banking Company, a director can continue for a maximum of

a)3year

b) 8year

c) 5year

d)7year

2. The concept of corporate governance involves:

a) fairness in corporate operations

b) transparency

c)accountability

d) All the above

3. When was the international code of good corporative governance was approved bygovernment?

a) 2001

b) 2002

c) 2003

d) 2004

4. Which of the following are the OECD principles of corporate governance?

a)Protect rights of shareholders

b)Equitable treatment to shareholders

c)Disclosure and transparency

d) All the above

5. Which of the following are issues of corporative governance for banks?

a) Effective management of conflict of interest

b) internal control

c) transparency

d) All the above

6. The “Fit and Proper” concept for directors of bank include:

a) exercising due diligence

b) constitution of nomination committee of the board of Scrutinise the declaration

c) collection of information

d) All the above

7. The guidelines on ownership and governance in the Private sector Banks were released bythe RBI on:

a) 28th Feb 2005

b) 1st March 2005

c) 15th March 2005

d) 31st March 2005

8. Which of the following of corporative governance guidelines are applicable to Private sectorbank?

a) No signal entity holds more than 10% of paid up capital

b) No bank of Financial Institution acquires fresh equity in excess of 5% of equity capital

c) RBI may permit higher level of shareholding for the weak banks

d) All the above

9. Which of the following are the issues of corporate governance or directors?

a) Not more than one member of a family should be on the Board of a Bank

b) CEO need to satisfy ‘Fit and Proper’ criteria as applicable to directors

c) For public sector banks, the principle of corporate governance has been statutorilyrecognized

d) All the above

10. Which of the following, the RBI decides about acceptance of deposits by banks?

a) Minimum and maximum period for which deposits can be accepted

b) Interest rate on saving bank deposits

c) Interest on NRL deposits

d) All the above

11. Which of the following is true regarding unclaimed deposits?

a) The deposits not operated for the past 10 years are unclaimed deposits

b) A return of such deposits is filed at the end of the year

c) Unclaimed deposits are covered under Section 26 of BR Act

d) All the above

12. Which of the following, the RBI may regarding loans and advances?

a) Maximum amount of advance to a single entity

b) Purpose of loan

c) Margin to be maintained for different loans

d) All the above

13. Which of the following is true regarding is not loans and advances?

a) RBI directs about maximum amount up to which guarantee can be given by a bank

b) RBI may decide interest on loan and other terms

c) RBI decides PLR of a bank

d) All the above

14. The purpose of selective credit control is :

a) To avoid hoarding of essential commodities

b) to control the quantum of loan

c) To make the borrowing more costly

d) All the above

15. Which of the following are tools of selective credit control?

a) stipulating minimum higher margin.

b) ceiling on levels of credit

c) Fixing minimum rate of interest

d) All the above

16. In which of the following the interest rates are covered by the RBI?

a) Interest on finance to exporters

b) Advances under DRI loans

c) Both a) and b) above


17. Which of the following is relevant to Usurious Loan Act,1918

a) It prohibits lending at exorbitant interest rate

b) This protect weaker sections

c) Both a) and b) above


18. Which of the following is correct regarding protection of interest rate?

a) Interest charged by banks is beyond the purview of any court

b) The provisions of Usurious Loans Act does not apply for a Bank loan

c) No case can be reopened by any court on the ground of interest charged

d) All the above

19. State bank of India was established in 1955 as per the provisions of :

a) SBI Act

b) BR Act

c) RBI Act.

d) None of these

20. Majority of shares of SBI are held by:

a) RBI


c) By the public

d) None of these

21. How many Chairman and Managing Directors are there in SBI?

a) One Chairman cum MD

b) One Chairman and One MD

c) One Chairman and Two MDs


22. SBI has how many Associate Banks Subsidiary Banks)?

a) 7

b) 10

c) 5

d) None of these

23. Who will be the Chairman of the Associate Banks of SBI?

a) Every Associate Bank has a separate Chairman

b) SBI Chairman is the Chairman of all the Associate Banks


24. State Bank of India was established to take over:

a) State Bank of Mysore

b) State Bank of Saurashtra

c) Imperial Bank

25. Does SBI has powers to inspect its Subsidiary Banks Associate banks)

a) Yes as laid down under section 47 of SBI Subsidiary Banks) Act

b) No as the SBI Subsidiary Banks) Act do not allow inspection by SBI

c) Yes only with the prior permission of RBI


Key

1.b 2.d 3.d 4.d 5.d 6.d 7.a 8.d 9.d 10.d 11.d 12.d 13.c

14.d 15.d 16.c 17.c 18.d 19.a 20.b 21.c 22.a 23.b 24.c 25.a

1. Regional Rural Banks are formed as per the provisions of :

a) RBI Act

b) BR Act

c) Regional Rural Banks act

d) None of these

2. What is the percentage of shareholding of a Sponsor Bank in it RRB?

a) 100%

b) 51%

c) 35%

d) None of these

3. What is the percentage of shareholding of the Central Government in the RRB?

a) 51%

b) 50%

c) 15%

d) None of these

4. Banks were nationalized in the year:

a) 1970

b) 1980

c) 1990

d) a and b

e) None of these

5. Reserve bank of India is :

a) an extension wing of Ministry of Finance ,Government of India

b) a body corporate having perpetual succession and a common seal

c) an institution owned by Indian Banks Association

d) a private sector company

6. Authorized, subscribed and paid up share capital of Reserve Bank of India is :

a)Rs. 5000crore

b) Rs. 5crore

c) Rs.50 crore

d) Rs .100crore

7. Which Bank is the Banker to the Central Government?

a) Central Bank of India


c) Punjab National Bank

d) All of these

8. The term ‘Ways and Means’ advances refer to :

a) the temporary advance made to the government by its bankers to bridge the internalbetween expenditure and the flow of receipt of revenues

b) the advance given by the banks to the poorest of the society

c) lending mace under PMRY scheme

d) All the above

9. The Reserve Bank of India is also called the lender o the last report to ScheduledCommercial Banks because:

a) RBI meets directly or indirectly all the responsible demands for financial accommodationsubject to terms and conditions of the discount rate policy of RBI

b) they are not able to get facilities from other Banks

c) Both of the above

d) they are able to get facilities form private sector Banks

10. RBI has given freedom to Banks to:

a) covert their non- viable rural branches into satellite offers on certain conditions

b) provisions of locker facilities at the extension counters

c) closing of loss making branches in urban metro centers and loss making branches at ruralcenters served by two commercial bank branches excluding RRBs, after mutual consent.

d) All the above

11. In the term of section 19 of the RBI Act. 1934, the RBI has been prohibited from:

a) making loans and advances

b) drawing and accepting bills payable otherwise than on demand

c) allowing interest on deposits or current accounts.


12. Introduction of rating methodology for banks was introduced by RBI on the lines of:

a) IRAC

b) ALM

c) CAMEL

d) CMA

13. Scheduled banks are requested to keep cash reserve with Reserve Bank of India, in termsof:

a) section 42(i) of the RBI Act , 1934

b) section 24 of the Banking Regulation Act , 1949

c) section 42 of the Negotiable Instrument Act , 1881


14. The cash reserve requirements for non- scheduled banks are laid down in:

a) section 41 1) of the RBI Act , 1934

b) section 41 1) of the Negotiable Instrument Act , 1881

c) section 41 of the Banking Regulation Act , 1881


15. Cash Reserve Ratio is maintained in the form of:

a) Government Securities

b) Balance with Reserve Bank of India

c) Balance with State Bank of India

d) All the above

16. The reduction in the Statutory Liquidity Ratio by the Reserve Bank of India

a) will improve the resources of Bank

b) will augment the resources of Scheduled Commercial Bank

c) will not affect the liquidity position


17. In periods of boom, Which leads to economic instability Reserve bank resorts to:

a) sale first class securities in its precession in the market, to reduce the supply of money as ameasure of open market operations

b) buying of approved securities in the market as a measure of open market operations

c) like in the banks rate as a measure of open market operations


18. The public debt offices function under the control of :



c) Public Debt Ministry

d) a) and b)

19. Which of the following statements ,are correct?

a) In India, foreign exchange regulation are administrated by Reserve Bank of India

b) Reserve Bank of India maintains the external value of Rupee

c) Reserve Bank of India does not deal in foreign exchange directly with the public

d) All the above

20. A new department; viz., Department of Supervision has been set up by Reserve Bank ofIndia w.e.f.22.12.1993. The above department has taken over:

a) the work relating to the supervision of Commercial Bank from the Department of BankingOperations and Development

b) the supervision work of Ministry of Finance

c) the work of supervision of Development Bank of India

d) the work of supervision of foreign Banks

21. RBI has permitted Banks to open, without its prior approval specialized branches percentre each in the category of :

a) Industrial Finance

b) NRI branches

c) Treasury branches

d) All these

22. Which o the following guidelines have been issued by Reserve Bank of India based on therecommendation of Narsimham Committee in regard to branch licensing policy

a) Banks may relocate branches, open specialised branches, spin off business at otherlocation, set up controlling officers administrative units and also establish extension counters

b) Banks may close down branches other than in rural areas as well as to swap unremunerativebranches or those in remote areas

c) Banks which attain the revised capital adequacy norms prudential accounting standards willbe given freedom to setup new branch offices

d) All the above

23. Under the powers derived from Section 20,21 and 21A of the RBI Act, 1934:

a) the Reserve Bank manages the public debt and issues new loans on behalf of Central andState Government

b) the Reserve bank provides refinance to NABARD in respect of agriculture advances

c) the Reserve bank regulates flow of credit to the economy by variation the Statutory Liquidityrequirement and Cash Reserve Ratio

d) All the above

24. As per section 5f) of the banking regulation Act, 1949, time liabilities mean:

a) time deposits

b) liabilities payable after a specified time

c) liabilities which are not demand on liabilities


25. Which is the authority in India for effecting changes in the Cash Reserve Ratio andStatutory Liquidity Ratio?

a) Government of India


c) Indian’s Banks Association

d) CRR and SLR Association

Key

1.c 2.c 3.b 4.d 5.d 6.c 7.c 8.c 9.d 10.d 11.c 12.b 13.a

14.b 15.b 16.d 17.d 18.b 19.c 20.c 21.b 22.c 23.b 24.d 25.b

1. To restrict the expansion of credit , the Reserve Bank :

a) raises the Bank rate

b) reduced the bank rate

c) freezes the Bank rate

d) none of these

2. When Reserve Bank tends to increase credit by the Banking system, it:

a) reduces the bank rate

b) raises the Bank rate

c) freezes the Bank rate

d) none of these

3. Bank rate policy, open market operations, variable reserve requirements and statutoryliquidity requirements as measure of credit control are classified as:

a) Quantitative methods

b) qualitative methods

c) weighted average methods

d) none of these

4. Which of the following fall under qualitative methods of credit control adopted by ReserveBank of India?

a) Selective Credit control

b) Credit Authorization Scheme

c) Moral Suasion

d) All the above

5. The term ‘Moral Suasion’ refers to

a) the bankers duty of secrecy as regard the affairs and accounts of his customer

b) moral duty of a borrower to deal with only one Bank

c) the advice given by Reserve Banks to Banks financial institutions in the matter of theirlending and other operations with the objective that they might implement or follow

d) none of these

6. ‘Currency of India ‘refers to :

a) one rupee notes only

b) one rupee notes and coins

c) bank notes issued by Reserve Bank of India; ie., Rs. 2, Rs. 5, Rs. 10, Rs. 20, Rs. 50, Rs.100 Rs. 500 and Rs. 1000

d) one rupee notes and coins and Bank notes issued by Reserve Bank of India

7. Which of the following is the sole authority for issuance of currency in India?

a) Controller of Currency

b) Government of India

c) Reserve Bank of India

d) Simple Deposit system

8. The note issue system in India is based on:

a) Gold deposit system

b) Minimum Reserve System

c) proportional Reserve System

d) simple Reserve System

9. One rupee notes bear the signature of :

a) Secretary, Ministry of Finance, Government of India

b) Dy. governor of Reserve Bank of India

c) President of India

d) Vice-President of India

10. Bank notes are issued under the signature of :

a) Dy. governor of Reserve Bank of India

b) Governor of Reserve Bank of India

c) Chairman and managing g director of Reserve Bank of India

d) Any authorized official of RBI

11. The currency notes issued by RBI have a cent per cent cover in :

a) approved assets

b) gold

c) foreign exchange

d) trustee securities

12. The approved assets which currency notes are issued by RBI, comprise of :

a) gold coin and bullion and rupee coin

b) foreign securities and rupee securities of Government of India, of any maturity

c) bills of exchange and promissory notes payable in India which are eligible for purpose by RBI

d) All the above

13. The Board of financial Supervision has been constituted by the Reserve Bank of India underthe Reserve Bank of India Board for Financial Supervision) Regulates, 1994 on 16th November1994.The main objective of Board is :

a) strengthening supervision and surveillance over the financial system

b) providing sharper focus to supervisory policy and skills

c) Bath the above


14. The Board for Financial Supervision has a term of :

a) 1year

b)2year

c)10 year

d) no time limit

15. The board will exercise integrated supervision over:

a) Commercial Banks

b) Financial Institutions

c) Non –Banking Financial Intermediaries and other Para- banking

Financial Institutions

d) All the above

16. RBI has given freedom to Banks to :

a) convert non-viable rural branches into satellite officers on certain conditions

b) provide locker facilities at the extension counters

c) close down loss incurring branches in urban/metro centers and loss incurring branches atrural centers, which are served by two Commercial Bank branches excluding RRBs, aftermutual consultation

d) All the above

17. The main trust of the branch licensing policy is :

a) to provide freedom to Banks to rationalise the structure of their branches

b) to given an opportunity to the Bank to open as many branches as they wish

c) none of the above

d) Both a) and b)

18. For setting up a new private sector Bank:

a) the promoter’s contribution shall 25 per cent if capital does not exceed Rs.100 crore and 20per of capital exceeds of Rs. 100 crore

b) NRI participation in the primary equity of a new Bank shall not exceed 40 per cent

c) the share of bank should be listed on stock exchanges

d) All the above

19. As per guidelines of Reserve Bank of India, a new private sector Bank:

a) shall be subject to prudential norms in regard to income recognition, asset classification andprovisioning, capital adequacy etc.

b) shall have to observe priority sector lending targets as applicable to other domestic Banks

c) will be required to open rural and semi-urban branches

d) all the above

20. A new private sector bank:

a)will be subject to the directive, instructions, guidelines and advices given by the Reserve Bankof India

b) will be govern by the provision of RBI Act, 1934; Banking Regulation Act, 1949 and otherrelevant statutes

c) would be govern by existing branch licensing policy whereby banks could open branchesincluding at urban metro centers without prior of RBI once capital adequacy and prudentialaccounting norms are satisfied

d) All the above

21. As per guidelines issued by RBI on 3rd January, 2001:

a)the minimum paid up capital requirement of a newly set up private sector Bank should be atleast Rs.200 crore and the same should be raised to RS. 300 crore within three years ofcommencement of business

b) minimum capital adequacy ratio should be at 10 per cent on continuous basis from thecommencement of business

c) none of the above

d) both a) and b)

22. the rights of shareholders are dealt under the provisions:

a) section122)

b) section87

c) section10E)

d) section11

23. Voting rights of shareholder with total Rights of all shareholders of a Bank are limited to

a) one per cent of total rights

b) two per cent of total rights

c) five per cent of total rights

d) ten per cent of total rights

24. The intention of provision of shareholders Rights is :

a) to prevent the shareholder of a bank from securing control over the management

b) to prevent preferential rights on the Assets of the company

c) a) or b) of the above

d) a) and b) both

25. which of the following sections, prohibits a bank from granting any loan secured or unsecured) , to any of its Directors or any other firm or company in which such director has vestedinterest

a) section20

b )section12

c) section21

d) section18

Key

1.d 2.a 3.c 4.a 5.d 6.d 7.a 8.b 9.a 10.a 11.a 12.b 13.c

14.a 15.d 16.d 17.d 18.d 19.d 20.d 21.d 22.a 23.a 24.d 25.a

1. which of the following are the restrictions on loans and advances under section 20:

a) No banks can grant any loan or advances on the security of its own shares

b) No bank will grant any loan or advances to or on behalf of any director or to any firm in whichthe director has vested interest.

c) No bank would grant loan to any individual in respect of whom any of its directors is a partneror guarantor

d) All the above

2. For the purpose of section 20, which of the following loan and advances are not induced

a) Loans against government securities

b) Loans against life insurance policies and fixed deposits

c) Loans or advances to Agriculture Finance Corporation

d) All the above

3. What are the provisions of section 27 regarding submission of Return to RBI?

a) A bank has to submit monthly statement of Assets and liabilities in India on the last Friday ofevery month to Reserve Bank

b) A half yearly statement of investments and classification of advances to be submitted to RBI

c) Reserve Bank may call for any information or statements relating to the business of affairs ofa bank

d) All the above

4. Which of the following statement is correct regarding submission of return to RBI?

a) Every Regional Rural Bank(RRB) will submit a copy of the return so submitted to RBI toNABARD

b) NABARD may exercise power of RBI in relation to RBIs

c) The RBI may call any Return either through notice or an oral instructions

d) All the above

5. What are the powers of central government in case of cancellation of licence of a bank byRBI?

a) central government may permit amalgamation of two or more banks with the consultation ofReserve Bank

b) central government may make an order to moratorium for maximum period of 6 monthssubject to an application by the RBI

c) It has powers to sanction the scheme of re-construction prepared by Reserve Bank

d) All the above

6. Which of the following are the provisions Accounts and Balance sheet?

a) Every bank has to prepare a Balance Sheet and profit& and Loss Account on the lastworking day of year or period decided by the RBI.

b) The Accounts of a Bank are drawn in conformity with forms A and B of the Third Scheduleof Banking Regulation Act, 1949.

c) All banks are required to prepare balance sheet on the same day and date

d) All the above

7. Which of the following is relevant for audit of balance sheet?

a) As per section 29 Balance Sheet and profit and Loss Account need to be audited by aqualified auditor.

b) RBI’s approval is necessary before appointment of an auditor

c) RBI may direct a bank for special audit

d) All the above

8. What are the important matters an auditor should mention in the Report?

a) Information and explanation required is satisfactory

b) Transaction conducted by a bank are within the power of the bank

c) The return submitted by the bank or its branches have been found adequate for the purposeof audit

d) All the above

9. Which of the following is not a part of audit report of a Bank?

a) The profit and loss account shows a true balance

b) disclosure of provision norms adopted by a bank

c) Any other information necessary and should be brought to the notice of shareholders

d) interest rates on deposit and advances

10. The profit and loss account balance sheet shall be signed by :

a)Chairman and managing director and Executive director

b) a minimum of 3 directors

c)In case of banking company incorporated outside India by the manager or agent of theprincipal office of the company in India

d) All the above

11. Which of the following norms are applicable for display of audited balance sheet of a bank?

a) The audited balance sheet should be published in the National Newspaper

b) Capitals of audited balance sheet be made available to all the shareholders

c) It should be displayed in the bank’s head office and all other branches and offices

d) All the above

12. What are the powers of Reserve Bank of India for conducting scrutiny of a Bank

a) The RBI is empowered to conduct scrutiny of a bank in addition to regular inspection

b) The scrutiny officer has the same powers as the inspecting officer of RBI

c) A copy of the scrutiny report would be produced to the bank

d) All the above

13. To whom a bank required to submit audited copies of balanced sheet?

a) 3 copies of RBI

b) 3copies of Register of Companies

c) Annual Central Body Meeting

d) All the above

14. What is the maximum time limit for publishing a bank balance sheet in the newspaper?

a) within 2 months from the date of balance sheet

b) within 6 months from the date of balance sheet

c) within 3 months from the date of balance sheet

d) All the above

15. Which of the following is not a condition for payment of dividend?

a) The capitalized expenses have been completely written off

b) adequate provisions have been made for bad debts

c) Interest due on loans and advances has been recovered

d) adequate provision has been made for depreciation in the value of investments

16. What is the maximum time limit when dividends can be paid from the date of declaration

a) 30 days

b) 42 days

c) 60 days

d) 75 days

17. What does a moratorium signifies in case of a banking company?

a) suspension of business is called moratorium

b) It can be done for a maximum period of 6 months

c) high court is the authority

d) All the above

18. What are the circumstances for winding up of a banking company

a) The bank is unable to pay its debt

b) If Reserve Bank applies to High Court

c) If Reserve Bank feels that affairs of the bank are not in the interest of the public

d) All the above

19. Under What are the circumstances a Bank is deemed to be unable to pay its debts?

a)It has refused to meet any lawful demand

b) The time limit for meeting demand is 2 days

c) The Reserve Bank certifies that the bank is unable to pay its dept

d) All the above

20. Under What condition the Reserve Bank may apply for winding up of a bank?

a) If bank fails to comply with the minimum paid up a capital requirement

b)If the bank has been prohibited from receiving fresh deposits

c) The bank does not full fill the requirements of the Act

d) All the above

21. What is the role o f official liquidator of a bank ?

a) to submit preliminary Report to the High Court within two months from the date of windingup order

b) to give a notice to preferential claimants and secured and unsecured creditors within 15days of winding up order

c) every depositor is deemed to have filed the claim

d) All the above

22. Which of the following statements is correct regarding winding up of bank?

a) After making adequate provision for preferential payments liquidator shall pay a minimum ofRs 250 or his credit balance whichever is less within 3 months

b) The remaining assets will be utilized for payment of debt on prorate basis

c) A bank cannot be voluntarily wound up

d) All the above

23. Which of the following section deals with the amalgamation of a bank?

a) Section 44A

b) Section 35

c) Section 10

d) Section 45

24. What is the process of amalgamation?

a) it has to be approved by majority of shareholders representing 2/3 shareholders

b) the RBI has to sanction the scheme

c) after approval of RBI ,assets and liabilities are transferred to acquiring bank

d) All the above

25. Which of the following statements, is correct regarding acquiring of a banking company bythe central bank?

a) Banking Regulation Act as amended)empowers Central Government to a banking company

b) it can do so after receiving a report from the RBI

c) it can also acquire a banking company for better provision of credit

d) All the above

Key

1.d 2.d 3.d 4.d 5.d 6.d 7.d 8.d 9.d 10.d 11.d 12.d 13.d

14.b 15.c 16.b 17.d 18.d 19.d 20.d 21.d 22.d 23.a 24.d 25.d

1. Which of the following, the annual report of a bank should contain?

a) details of asset classification

b) provision

c) Recognition of income

d) all these

2. The balance sheet of a bank should be signed by:

a) the Chief of the Bank

b) a minimum of 3 directors of the bank

c) Auditors

d) All the above

3. Which of the following are the returns to be submitted to RBI by the banks ?

a) Return on liquid assets

b) monthly return showing assets and liabilities in India

c) return of unclaimed deposits

d) All the above

4. Which of the following is true regarding submission of return to RBI?

a) Annual accounts and balance sheet should be submitted within 3 months

b) non-scheduled Return on assets in India

c) A quarterly Return on assets in India

d) All the above

5. Which of the following is relevant regarding the board for financial supervision?

a) It is a committee set-up in 1994

b) the board has jurisdiction on all the banks

c) the board has powers of supervision and inspection

d) All the above

6. Which of the following the Financial Supervision Board comprises?

a) Governor of RBI as Chairman

b) one dy. Governor as vice chair man

c) 4 Directors from the Central Board

d) All the above

7. Which of the following are the ways of amalgamation of the bank?

a)voluntary amalgamation

b) amalgamation by Government

c) Moratorium and amalgamation

d) All the above

8. Amalgamation can be :

a) in the interest of the public depositors

b) proper management of a bank

c) in the interest of banking system of the country

d) any one or all of them

9. Which of the following is true regarding State Bank of India?

a) State Bank of India established in 1955

b) it has undertaken Imperial Bank

c) The majority of shares are held by Government of India

d) All the above

10. Which of the following is not correct, regarding subsidiary of State Bank of India?

a) they were set up under a special status in1956

b) the first subsidiary was State Bank of Hyderabad

c) Other subsidiary banks were set u under additional Act in 1959

d) Subsidiary banks cannot be merged with SBI

11. What is the name of the Fund created by SBI for transferring the dividend payable to theCentral Government?

a) National Integration Fund

b) Integration and Development Fund

c) Dividend Payable Fund

12. Which of the following is not correct, regarding return of a paid cheque to the customer?

a) it can be returned by keeping a copy of the paid instrument

b) it cannot be returned to the customer

c) customer needs to follow preservation rule

d) banks are authorized to return paid cheques under BR Act

13. Under what circumstances Central Government can prohibit a bank from accepting freshdeposits?

a)If the bank incurs a loss

b) the business conducted by a bank is detriment of interest of depositor

c) if there are several complaints against the bank

d) if deposits are not insured under DICGC

14. Who appoints the liquidator in case of winding up of a bank?


b) High Court

c) RBI

d) Supreme court

15. In which order the depositors having DICGC cover will receive payment from Liquidator?

a) After the small depositors get payment

b) no payment would be available from liquidator

c) after payment to the creditors

d) after preferential payments are settled


a) If RBI requests, High Court can impose moratorium on a bank

b) RBI can be appointed as a liquidator for a bank

c) the Central Government can acquire a banking undertaking

d)none of the above

17. Regional Rural Banks(RRB):

a) were set up in 1975

b) they are set under RRB Act , 1976

c)they have a limited area of operation

d) All the above

18. The capital of RRB is contributed:

a) 50% by central Government

b) 35% by the sponsored bank

c) 15% by the state government

d) as stated above

19. Which of the following is correct regarding RRB?

a) the chairman is appointed by the sponsor bank

b) RRBs can be amalgamated by the Central Government

c) their main area of operation is rural

d) all the above

20. Which of the following statement are true:

a) The entire shareholding of nationalized banks are held by Central Govt.

b) The Central Government is not holding any shares of nationalized banks

c) The Central Government holds majority shares of nationalized banks

d) The Central and state Government are holding the majority shares of nationalized banks

21. Is RBI incense required to start a Cooperative Bank?

a) Not required as they are governed by Cooperative Societies Act

b) Yes required as per S.22 of Banking Regulation Act

c) Yes required from the Central or State Government


22. Are deposits of Cooperative Banks insured with DICGC?

a) Yes

b) No

c) None of these

23. SBI has corporate office in Mumbai because :

a) It is convenient for the operations of the Bank

b) It is as per RBI directives

c) It is as per Section 16 of SBI Act


24. What is the period of office of Chairman of SBI?

a) 3 years

b) 5 years

c) 8 years

d) None of these

25. State Bank of India acts as an agent of RBI for carrying out Govt. business as per :

a) S 45 of the RBI Act

b) Section 32 of SBI Act

c) Both of these

Key

1.d 2.d 3.d 4.d 5.d 6.d 7.d 8.d 9.d 10.d 11.b 12.b 13.b

14.a 15.b 16.d 17.d 18.d 19.d 20.c 21.b 22.a 23.c 24.b 25.c

Documents

1. Banks is India are governed by which of the following ...ibskayamkulam.in/OnlineExam/file/2013-09-251380087938New version... · 1. Banks is India are governed by which of the following