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MCQ Questions and Answers on Banking System and Capital Market page contains five mcq questions and each contain four options as possible answers. But only one option is correct. Select one and check your answer with the given correct answer.
(11)
Banking functions centrally controlled by the :
[A]
Central Bank
[B]
RBI
[C]
SBI
[D]
Both [B] and [C]
Comment
Answer: Option [B]
Banking functions centrally controlled by the RBI. The general banking business including management of public debt of the central and state governments has devolved on the Reserve Bank by virtue of the provisions of Reserve Bank of India Act, 1934 and agreements with the respective governments.
(12)
The ratio between cash in hand and total assets maintained by the banks is called :
[A]
SBR (Statutory Bank Ratio)
[B]
SLR (Statutory Liquid Ratio)
[C]
CBR (Central Bank Reserve)
[D]
CLR (Central Liquid Reserve)
Comment
Answer: Option [B]
The ratio between cash in hand and total assets maintained by the banks is called SLR (Statutory Liquid Ratio). SLR refers to a designated minimum proportion of its total assets to be maintained by the commercial banks in liquid assets such as gold, cash and unencumbered approved securities.
(13)
What is ‘Repo rate’?
[A]
is the rate at which the RBI lends to State Government
[B]
is the rate at which the International aid agencies lend to RBI
[C]
is the rate at which the RBI lends to banks
[D]
is the rate at which the banks lends to RBI
Comment
Answer: Option [C]
Repo rate is the rate at which the RBI lends to banks. It is the interest rate at which the central bank of a country lends money to commercial banks.
(14)
What is the apex organisation of Industrial Finance in India ?
[A]
Industrial Finance Corporation
[B]
Industrial Credit and Investment corporation of India
[C]
Industrial Development Bank of India
[D]
None of these
Comment
Answer: Option [C]
The correct answer is Industrial Development Bank of India. The Industrial Development Bank of India (IDBI) was established in 1964 as an apex financial institution to provide credit and other financial facilities for the development of the fledgling Indian industry.
(15)
Which scheme is eligible for refinance from NABARD (National Bank for Agricultural and Rural Development) ?
[A]
Small Road and Water Transport Operators (SRWTO)
[B]
Self Employment Scheme for Exservicemen (SEMFEX)
[C]
Soft Loan Assistance for Margin Money (SLAMM)
[D]
All of these
Comment
Answer: Option [D]
The correct answer is All of these. NABARD has been providing short-term refinance to approved financial institutions (FI) under the provisions of Section 21(1) of NABARD Act, 1981, to supplement their resources for providing short term credit at the ground level. SFBs have now been made an eligible FI for availing of refinance under this facility.
(16)
Which of the following is called a ‘banker’s cheque’ ?
[A]
Demand draft
[B]
Debit card
[C]
Pay order
[D]
Banker's draft
Comment
Answer: Option [A]
Banker's cheque is a cheque issued by a branch payable at its counter. Demand Draft is also called a banker's cheque, as it is a non-negotiable instrument issued by the bank on behalf of the client which carries an order to pay a defined amount to the particular person in the same location means in the city.
(17)
The place where bankers meet and settle their mutual claims and accounts is known as :
[A]
Treasury
[B]
Clearing House
[C]
Collecting Centre
[D]
Dumping Ground
Comment
Answer: Option [B]
The place where bankers meet and settle their mutual claims and accounts is known as Clearing House. It is an agency or separate corporation of a futures exchange responsible for settling trading accounts, clearing trades, collecting and maintaining margin monies, regulating delivery, and reporting trading data.
(18)
What is the ideal of designing Regional rural Banks ?
[A]
Work on basics of commercial banks
[B]
Help the targetted groups
[C]
Keep lending rates lower than cooperative institutions
[D]
Work on innovative and adaptive ideals
Comment
Answer: Option [B]
The correct answer is Help the targetted groups. Regional Rural Banks (RRBs) are Indian Scheduled Commercial Banks (Government Banks) operating at regional level in different States of India. They have been created with a view of serving primarily the rural areas of India with basic banking and financial services.
(19)
Identify the punishable offence by a Bank Account holder ?
[A]
If a cheque is not crossed
[B]
If a post dated cheque is issued
[C]
If a cheque drawn by him is dishonoured for insufficiency of funds in his account
[D]
Issuing a cheque without signature
Comment
Answer: Option [C]
The correct answer is If a cheque drawn by him is dishonoured for insufficiency of funds in his account.
(20)
What is a Cross cheque ?
[A]
which can be encashed only by the drawee
[B]
which can be encashed only through a bank
[C]
which can be encashed only at the State Bank of India
[D]
which can be encashed only after it has been transferred to another person
Comment
Answer: Option [B]
The correct answer is which can be encashed only through a bank. A crossed cheque is any cheque which is crossed with two parallel lines. The lines can be drawn either across the whole cheque or through the top left-hand corner. It simply means that the specific cheque can only be deposited straightway into a bank account and cannot be instantly encashed by a bank or any credit institution.
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