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List of 50 Important Banking Awareness Questions for Bank PO and Clerk Exams
1).What is a major function of NABARD?
a) To establish linkage between Self Help Group (SHG)
b) To provide refinancing facility
c) To conduct programs for agriculture and rural development
d) To inspect and supervise the cooperative banks and RRBs
Answer is: B
2).When was the Financial Market Department was established by RBI?
a) May, 1999
b) Jan, 2000
c) July, 2005
d) Aug, 2002
Answer is: C
3).Who is the first chairman of private sector banks association?
a) P. N Joshi
b) Kiran Kumar
c) Harpeet Singh
d) M K Sinha
Answer is: A
4).In which year does the RBI has introduced the Banking Ombudsman Scheme?
a) 2002
b) 2000
c) 1998
d) 1995
Answer is: D
5).Which is the biggest commercial bank in India?
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a) Indian Overseas Bank
b) SBI
c) PNB
d) Indian Bank
Answer is: B
6).In which year does the Differential Rate of Interest Scheme was introduced?
a) 1972
b) 1982
c) 1978
d) 1988
Answer is: A
7).Who many Deputy Governors are there in RBI?
a) Three
b) Two
c) Four
d) Six
Answer is: C
8).Which is the first Indian Bank which was fully owned by Indians?
a) Indian Overseas Bank
b) Central Bank of India
c) SBI
d) PNB
Answer is: B
9).Which is the oldest Bank to start Joint Stock in India?
a) Bank of Baroda
b) PNB
c) SBI
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d) Allahabad Bank
Answer is: D
10).Headquarters of State Bank of India was located at_______.
a) Mumbai
b) Delhi
c) Bangalore
d) Kolkata
Answer is: A
11).What will happen if the RBI increases the Cash Reserve Ratio?
a)

All other banks will decreases its interest rate

b)

All other banks will increase its interest rate

c)

The value of money multiplier increases

d)

The value of money multiplier decreases

Answer is: C
12).Which is the first share market that was established in India?
a)

Mumbai

b)

Kolkata

c)

Delhi

d)

Hyderabad

Answer is: A
13).Commercial paper is a short term security issued by _______ to raise funds.
a)

National Stock Exchange

b)

Large and well known companies

c)

Commercial Banks

d)

RBI

Answer is: B
14).Among the following, which is NOT a money market instrument?
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a)

Repo

b)

Commercial Paper

c)

Treasury Bond

d)

Treasury Bill

Answer is: C
15).Which of the following types of institutions operates in the call money market only as
lender?
a)

State Bank of India

b)

Commercial Bank

c)

SBI

d)

Insurance Companies

Answer is: D
16).What is the name of the organization which was established by State bank of India to buy
and sell the Government Securities?
a)

SBI Gilts Limited

b)

SBI Securities Limited

c)

SBI Loans Limited

d)

SBI Gibbs Limited

Answer is: A
17).What is the money, which was accepted temporary in lieu of gold?
a)

Grass Money

b)

Fiat Money

c)

Gold Money

d)

Fluid Money

Answer is: B
18).Among the following terms which is NOT related to Banking and Finance?
a)

Heir

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b)

Line of Credit

c)

Annuity

d)

Lipitor

Answer is: D
19).In India, the coins are minted at_______.
a)

Kolkata

b)

Noida

c)

Mumbai

d)

All of these

Answer is: D
20).What is the name of the Act which was specially formed to deal with the problems of Nonperforming assets in the banking?
a)

Management of Non-Performing Assets Act

b)

Industrial Coverage Act

c)

SARFAESI Act

d)

None of these

Answer is: C
21).Particular branch of a bank which has under taken the foreign exchange business directly
is called as ______ of foreign exchange.
a)

Foreign Dealers

b)

Overseas Branches

c)

Exchange Branches

d)

Authorized dealers

Answer is: D
22).Which of the following is responsible for the Insurance Coverage for the Bank Deposit in
our country?
a)

DICGC

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b)

SBI

c)

GIC

d)

RBI

Answer is: A
23).Among the following which has NOT included in the Financial Literacy?
a)

How to Minimize the risks

b)

How to reinvest the money earned

c)

How to invest the funds

d)

None of the above

Answer is: D
24).What is the name of the loans, which was given to low income group with small amount?
a)

No Frills Loans

b)

Cash Credit

c)

Rural Credit

d)

Micro Credit

Answer is: D
25).CDR stands for______.
a)

Corporate Debt Restructuring

b)

Corporate Deposit Restructuring

c)

Company Debt Rollover

d)

Company Deposit Rollover

Answer is: A
26).ALM stands for________
a)

Asset Liability Manpower

b)

Asset Liability Management

c)

Asset Lending Management

d)

Asset Liability Maturity

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Answer is: B
27).The terms Cash Reserve Ratio (CRR) and Statutory Liquidity Ratio (SLR) are closely
related to which of the following?
a)

Banking Industry

b)

Capital Market

c)

Mutual Fund Industry

d)

Commodities Market

Answer is: A
28).In the term LAF, L stands for_______.
a)

Long

b)

Liquidity

c)

Least

d)

Liabilities

Answer is: B
29).The Banking Ombudsman________
a)

Issue licenses for new bank branches

b)

Is the head of all nationalized banks

c)

Resolves complaints of customer

d)

Fixes the rate of interest for loans

Answer is: C
30).Among the following which is NOT classified as a commercial bank?
a)

Regional Rural Bank

b)

Private Sector Bank

c)

Foreign Bank

d)

Urban Cooperative Bank

Answer is: D
31).What is mean by money laundering?
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a) Money acquired through criminal source
b) Money acquired from drug trafficking
c) Process of conversion of money obtained illegally to appear to have originated from
legitimate sources
d) Money acquired from undisclosed sources and deposited in foreign banks
Answer is: C
32).Among the following which is not a name of the banking organization?
a) HDFC
b) SEBI
c) YES
d) IDBI
Answer is: B
33).Monetary Policy as an arm of the economic policy is administered by_______.
a) Prime Minister of India
b) Government of India
c) State Bank of India
d) Reserve Bank of India
Answer is: D
34).Among the following which is not a primary function of a bank?
a) Facilitating import of goods
b) Granting Loans
c) Selling Gold/Silver Coins
d) Issuing Bank Draft
Answer is: A
35).Which of the following represents the correct meaning of REPO RATE?
a) Rate for borrowing rupees by banks from RBI
b) Rate applicable for grant of priority sector loans
c) Rate offered by banks to their prime customers
d) Rate at which RBI sells Government Securities to banks
Answer is: A
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36).Reserves which can act as a liquidity buffer for commercial banks during crisis times
are_______.
a) CAR
b) CRR & SLR
c) CRR
d) SLR
Answer is: B
37).Saving Bank accounts are opened by________.
a) Cooperative banks for savings
b) Trading entities, manufacturing entities and individuals for saving purposes
c) Individuals for saving purposes
d) Traders and Manufactures for business purposes
Answer is: C
38).A customer drawing a cheque on a bank has a right to________.
a) Stop payment of the cheque before it is paid
b) Stop payment of the cheque before it is issued
c) Take back the cheque from the bank after it is paid
d) Stop payment of the cheque after it is paid
Answer is: A
39).Among the following which is not a function of a commercial bank?
a) Providing services such as locker facilities, remittance
b) Deciding policy rates like CRR, SLR & Repo Rates
c) Issuing Credit/Debit/ATM cards
d) Providing projects finance
Answer is: B
40).Which is not a salient feature of a debit card?
a) No bad debts to banks and no suits for recovery
b) No interest earning for banks
c) Work like a normal withdrawal slip
d) 45 days credit is given to the card holder
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Answer is: D
41).Which of the following is a measure taken by RBI to control inflation in our country?
a)

Contraction of Supply of Currency

b)

Increase in SLR

c)

Raising of Repo/Reverse Repo Rate

d)

Increase in CRR

Answer is: C
42).What type of loan is granted by banks for purchase of the White Goods?
a)

Mortgage Loan

b)

Consumer Durables Loan

c)

Consumption Loan

d)

Home Loan

Answer is: B
43).What is s Stale Cheque?
a)

A six months post dated cheque

b)

A cheque which has completed sox month from its date of issue

c)

A cheque issued without drawers signature

d)

None of these

Answer is: A
44).Ram has been nominated in the savings account of Site. Ram requests the bank
authorities to allow him to operate Sitas account as she is unwell. What will the bank do?
a)

As nomination will come into effect only after death of the depositor, bank will not

allow.
b)

Out of pity from Sita and on account of long term relationship, the bank may

allow.
c)

Bank can take a promissory note from Ram and allow him to operate the

account.
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d)

Bank will allow Ram to operate the account as he is the nominee.

Answer is: A
45).What is mean by Mortgage?
a)

Registration of charge with the Regional Transport Authority

b)

Registration of charge with the Registrar of companies

c)

Making the security of immovable property available as a cover for a home loan

by the borrower
d)

Sale of a moveable security in the event of default by the borrower

Answer is: C
46).Which among the following constitutes the largest percentage of retail loans in India?
a)

Consumer Loans

b)

Personal Loans

c)

Auto Loans

d)

Home Loans

Answer is: D
47).Credit risk to the bank is high from which of these cards?
a)

Debit Cards

b)

Credit Cards

c)

ATM Cards

d)

All of these

Answer is: B
48).Depreciation of an asset occurs due to________.
a)

Fire in the unit

b)

Theft

c)

Labor problems

d)

None of these

Answer is: D
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49).Among the following which is NOT a source of funds of a commercial bank?
a)

Borrowing from RBI

b)

Capital

c)

Deposits

d)

Call money borrowings

Answer is: D
50).Among the following which is a Credit Card Association?
a)

Citi Cards

b)

Master Cards

c)

Indian Cards

d)

SBI Cards

Answer is: B

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