A to Z in Banking - Multiple Choice Questions Set 4

: Last Updated: 26 January 2024

1. A bank can sell NPA only after: .

A. 12 months

B. 15 month

C. 24 months

D. without any holding period

2. Advance remittance for import of services:

A. USD 500, 000

B. USD 300, 000

C. USD 100, 000

D. USD 50, 000

3. Advance remittance without bank guarantee for import of goods:

A. USD 1 million

B. USD 2 million

C. USD 3 million

D. USD 5 million

4. An account where the regular/ad hoc credit limits have not been reviewed/ renewed within _____days from the due date/ date of ad hoc sanction will be treated as NPA.

A. Within 3 months

B. Within 6 months

C. Within 180 days

D. Within 90 days

5. Annual Service Fee is to be paid to Credit Guarantee Fund on _____ of that year.

A. Within 30 days of the end of the year

B. 30 days before expiry of the year

C. On or before 31st May

D. On or before 30th June

1 d

2 a

3 d

4 c

5 c

6. Appeal against the order of DRT can be filed in DRAT within:

A. 30 days from the date of receipt of order of DRT.

B. 45 days from the date of receipt of order of DRT.

C. 30 days from the date of order of DRT.

D. 45 days from the date of order of DRT.

7. As per FEMA, Form A-1 is required:

A. Imports exceeding USD 500

B. Imports not exceeding USD 500

C. Imports or exports not exceeding USD 500

D. Exports not exceeding USD 500

8. As per FEMA, PP Form is required:

A. For all Exports .

B. For Exports made otherwise than by post.

C. For software Exports .

D. For Exports by parcel post.

9. Balance of Trade refers to:

A. Difference in value of Exports and Imports.

B. Difference in value of Govt receips and Payments.

C. Difference between actual value of trade and the projections

D. Difference between value of Goods and services produced and sold.

10. Budgetary deficit is:

A. Excess of total expenditure (capital and revenue) over total receipts.

B. Excess of Govt. Revenue expenditure over revenue receipts.

C. Excess of total expenditure over revenue receipts and capital receipts after excluding borrowing

D. None of these

6 b

7 a

8 d

9 a

10 a

11. In case of consortium or multiple lending borrowers, the banks are to obtain regular certification by a professional, preferably a ____, regarding compliance of various statutory prescriptions that are in vogue

a. A chartered financial analyst

b. A chartered accountant

c. A chartered secretary

d. Any of the above

12. Foreign Currency bill is to be removed from currency position:

A. After 30 days of expiry of NTP in case of demand bills

B. After 30 days of due date in case of usance bills

C. After 30 days of expiry of NTP in case of demand bills and after 30 days of due date in case of usance bills

D. After 30 days of permission from RBI.

13. In case of Foreign Currency Non- Resident (Banks) term deposit, if the rate is a floating rate, interest re-set period is

a. 3 months

b. 6 months

c. 9 months

d. 12 months

14. In CDR restructuring cases, the promoters’ contribution is stipulated at

a. 5% of the total sacrifice

b. 10% of total cost of restructure

c. 15% of the creditors’ sacrifice

d. 20% of the project cost

15. In connection with eligible banks for Mobile Banking services, which of the following is correct (A.) Banks licensed in India (B.) Banks supervised in India (C.) Banks having physical presence in India (D.) Banks operating in foreign countries.

a. A to D. All

b. A to C. Only

c. a , B. And D. Only

d. B. , C. And D. Only

11 c

12 c

13 b

14 c

15 b

16. Exchange Control Declaration (GR) Form: .

A. For all Exports .

B. For Exports made otherwise than by post.

C. For software Exports .

D. For Exports by post.

17. Extended period for realisation of Export Proceeds:

A. 120 days

B. 180 days

C. 270 days

D. 12 months

18. External credit rating agencies as approved by the RBI:

A. CRISIL, ICRA, CARE

B. CRISIL, ICRA, CARE and Fitch India

C. ICRA, CARE and Fitch India

D. CRISIL, ICRA, CIBIL, CARE and Fitch India

19. Fiscal Deficit is:

A. Revenue Exp minus revenue receipts

B. Direct Taxes minus Indirect Taxes

C. Capital Expenditure minus Capital Receipts

D. Budgetary Receipts minus Budgetary Expenses

20. For Corporates in specified service sectors viz hotel, hospital and software limit for eligible borrowers to avail of ECB under the automatic route per financial year the limit has been increased to:

A. USD 750 million

B. USD 500 million

C. USD 200 million

D. USD 100 million

16 b

17 d

18 b

19 c

20 c

21. In case of exporters in export business for 3 years or more, where a bill is negotiated by a bank but its invoice value is to be reduced for genuine reasons, by the exporter, he can be allowed to reduce the value by ___% subject to the condition that export outstanding does not exceed 5% of average annual export.

a. No such ceiling

b. 10%

c. 20%

d. 25%

22. Foreign Direct investments in Nationalised Banks:

A. 20 per cent of paid-up capital.

B. 24 per cent of paid-up capital.

C. 49 per cent of paid-up capital.

D. 74 per cent of paid-up capital.

23. Foreign Direct investments in SSI units:.

A. 20 per cent of paid-up capital.

B. 24 per cent of paid-up capital.

C. 49 per cent of paid-up capital.

D. 74 per cent of paid-up capital.

Form A-2 is used for transactions of value not exceeding USD 5000 in respect of:

A. Remittance for miscellaneous non-trade current account transactions

B. Remittance for trade current account transactions

C. Remittance for trade or non-trade current account transactions

D. Remittance of any kind of transactions.

25. Gilt edged securities refers to :

A. Blue Chip Securities

B. Govt Securities

C. Gold-linked Securities

D. Securities linked to Gilts

21 a

22 a

23 b

24 a

25 b

26. Gross Domestic Product relates to:

A. Money value of final goods of services produced during a year within a country and abroad.

B. Money value of final goods of services produced during a year within domestic territory of a country.

C. Money value of final goods of services produced during a year within domestic territory of a country minus depreciation

D. Money value of final goods of services produced during a year within a country and abroad minus depreciation

27. Gross National Product is:

A. Money value of final goods of services produced during a year within a country and net factor income from abroad.

B. Money value of final goods of services produced during a year within domestic territory of a country.

C. Money value of final goods of services produced during a year within domestic territory of a country minus depreciation

D. Money value of final goods of services produced during a year within a country and abroad minus depreciation

28. Guidelines for NPA relating to irregular drawings in working capital account

A. The irregularity continues for a period of 90 days

B. The irregularity continues for a period of 90 days and the unit is not working

C. The irregularity continues for a period of 90 days even though the unit is working

D. The irregularity continues for a period of 90 days even though the unit may be working or the borrower's financial position is satisfactory.

29. Guidelines relating to lending below base rate by banks:

A. Banks cannot lend below Base Rate

B. Lending may be done with RBI permission

C. Lending in restructured account for the purpose of viability

D. Lending to Govt companies

30. How much is provision on doubtful secured advances upto 1 year

A. 15%

B. 20%

C. 25%

D. 40%

26 b

27 a

28 d

29 c

30 c

31. How much is provisioning on NPA advances upgraded to standard advances after restructuring:

A. 1.5%

B. 2.0%

C. 2.5%

D. No provisioning to be made

32. Import of Forex into India-CDF form is required to be submitted where:

A. The aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques exceeds USD 10,000

B. The aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques exceeds USD 10,000 or value of Currency Notes exceeds USD 5,000

C. The aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques exceeds USD 10,000 or value of Currency Notes exceeds USD 7,500

D. The aggregate value of the foreign exchange in the form of currency notes, bank notes or travelers cheques not exceeding USD 10,000 or value of Currency Notes exceeds USD 7,500

33. Increasing CRR by RBI leads to :

A. Increase in liquidy

B. Squeeze in liquidity

C. Increased financing by RBI to Banks

D. Decrease in subsidies by Govt

34. Instant Credit for small USD Cheques:

A. No instant credit is allowed in USD cheques

B. Upto USD 500

C. USD equivalent to ₹ 50000

D. Any amount as per discretion of the bank

35. Joint Liability Group (JLG) may have: .

A. 3-10 members

B. 4-10 members

C. 5-10 members

D. 5-15 members

31 b

32 c

33 b

34 b

35 b

36. Joint NRE/FCNR/EEFC/RFC accounts can be opened with:

A. NRIsonly

B. NRIsin the same group of countries

C. NRI jointly with close relatives as former or survivor

D. None of these

37. Limit for direct receipt of import bills:

A. USD 500, 000

B. USD 300, 000

C. USD 100, 000

D. USD 50, 000

38. Market Captialisation means:

A. Capital inducted by a company

B. Current market value of issued shares by a company

C. Value of total shares of all companies in a maket

D. Inducting more capital in the market

39. Maximum advance to individuals against security of shares and debentures:

A. ₹ 10 Lakh against physical shares.

B. ₹20 Lakh against dematerialised shares.

C. ₹ 10 Lakh against physical shares and ₹20 Lakh against dematerialised shares.

D. The advance cannot be made at all.

40. Maximum compensation of fraud due to hacking/phishing through netbanking:

A. Upto the amount of fraud

B. ₹5000

C. No claim

D. At the discretion of the bank

36 c

37 b

38 b

39 c

40 b

41. National Income is:

A. Money value of final goods of services produced during a year within a country and abroad.

B. Net national product at factor cost, which include total of net domestic product at factor cost plus net factor income from abroad.

C. Money value of final goods of services produced during a year within domestic territory of a country minus depreciation

D. Money value of final goods of services produced during a year within a country and abroad minus depreciation

42. Nayak Committee is applicable on:

A. WC requirements of ₹ 5.00 crore for SME and ₹ 2.00 crore for Trader

B. All facilties upto ₹ 5.00 crore for SME and ₹ 2.00 crore for Trader

C. WC requirements of ₹ 5.00 crore for SME

D. WC requirements of ₹ 2.00 crore for Traders

43. Net Domestic Product is:

A. Money value of final goods of services produced during a year within a country and abroad.

B. Money value of final goods of services produced during a year within domestic territory of a country.

C. Money value of final goods of services produced during a year within domestic territory of a country minus depreciation

D. Money value of final goods of services produced during a year within a country and abroad minus depreciation

44. Net National Product:

A. Money value of final goods of services produced during a year within a country and abroad.

B. Money value of final goods of services produced during a year within domestic territory of a country.

C. Money value of final goods of services produced during a year within domestic territory of a country minus depreciation

D. Money value of final goods of services produced during a year within a country and abroad minus depreciation

45. NNP at factor cost:

A. NNP at market price (-) indirect taxes (+) subsidies

B. NNP at market price (-) indirect taxes

C. NNP at market price (+) subsidies

D. GNP at market price (-) indirect taxes (+) subsidies

41 c

42 a

43 c

44 c

45 a

46. Overseas Corporate Bodies (ocbs) are entities established outside India in which NRIshave their share at least:

A. At least 40% of the paid up capital

B. At least 60% of the paid up capital

C. At least 51% of the paid up capital

D. At least 74% of the paid up capital

47. Penal Interest to Large Units for delayed payment to SME sector:

A. Bank rate

B. Base Rate of the bank

C. Three times of the Bank rate

D. Rate charged on loan availed by SME.

48. Philips Curve relates to:

A. Income and Expenditure

B. Interest and Wages

C. Poverty and Unemployment

D. Profit and Loss

49. Policy Guidelines for permitting banks to issue prepaid payment instruments to corporates listed in stock exchanges of India for onward issuance to their employees :

A. Verification of the identity of the employee shall be the responsibility of the concerned corporate.

B. The maximum value outstanding on individual prepaid payment instruments at any point of time shall not exceed Rs 50,000/-;

C. Banks shall facilitate transfer of funds from such prepaid payment instruments to a regular bank account of the concerned employee, if requested for;

D. All statements are correct.

50. Productive Sector includes:

A. Agriculture, export credit, SME, Infrastructure, Service sector

B. Agriculture, SME, Infrastructure, Service sector

C. Agriculture, export credit, Service sector

D. SME, Infrastructure, Service sector

46 b

47 c

48 c

49 d

50 a

51. Provisioning on doubtful advances 'unsecured portion'

A. 25%

B. 20%

C. 40%

D. 100%

52. Quoting of PAN No. Is must for:

A. FD and cash deposit above ₹20000

B. FD above ₹50000 and for cash deposit ₹ 50000 or more

C. FD and for cash deposit ₹ 50000 or more

D. Cash deposit ₹ 50000 only, no such requirements for FDR

53. Reporting of Frauds in Public Sector Banks in all cases of ₹ 5.00 crore and above:

A. Police

B. CBI (Anti Corruption Branch)

C. Banking and Security Fraud Cell

D. RBI

54. Reporting of Frauds in Public Sector Banks in cases of ₹ 1.00 crore and above upto ₹ 5.00 crore with staff involvement:

A. Police

B. CBI (Anti Corruption Branch)

C. Banking and Security Fraud Cell

D. RBI

55. Retail exposure means maximum aggregated retail exposure to one counterpart should not exceed the threshold limit of:

A. 7.5 crore

B. 5 crore

C. 2 crore

D. 1 crore

51 d

52 b

53 c

54 b

55 a

56. Revenue deficit is : .

A. Excess of total expenditure (capital and revenue) over total receipts.

B. Excess of Govt. Revenue expenditure over revenue receipts.

C. Excess of total expenditure over revenue receipts and capital receipts after excluding borrowing

D. None of these

57. Revenue receipts include:

A. Direct and indirect taxes,

B. Interest, dividends and profits from investments.

C. Fees and other receipts from services rendered by the Govt.

D. All of these

E. None of these

58. Right to Information Act 2005 came to effect w.e.f:

A. 1st June 2005

B. 15th June 2005

C. 1st April 2005

D. 15th April 2005

59. Risk weight on Regulatory Retail Portfolio:

A. 20%

B. 50%

C. 75%

D. 100%

60. Risk weights on banks exposures to all unrated claims on corporates:

A. 25%

B. 20%

C. 40%

D. 100%

56 a

57 e

58 b

59 c

60 d

61. Series of notes printed in 2011 with Rupee symbol:

A. 10 Rupee

B. 50 Rupee

C. 100 Rupee

D. 500 Rupee

62. Single Borrower Exposure limit in case of Oil companies:

A. 10% of the capital funds of the bank

B. 15% of the capital funds of the bank.

C. 20% of the capital funds of the bank.

D. 25% of the capital funds of the bank.

63. Star series notes:

A. In Denomination of ₹ 100,500, 1000

B. In Denomination of ₹ 50, 100, 500

C. In Denomination of ₹ 20, 50, 100

D. In Denomination of ₹ 10, 20, 50

64. Substantial exposure means a Single borrowers enjoying credit facilities in excess of a threshold limit of:

A. 10% of the capital funds of the bank

B. 15% of the capital funds of the bank.

C. 20% of the capital funds of the bank.

D. 25% of the capital funds of the bank.

65. The ceiling rate on export credit in foreign currency is:

A. LIBOR + 100 basis points

B. LIBOR + 200 basis points

C. LIBOR + 350 basis points

D. LIBOR + 400 basis points

61 a

62 d

63 d

64 a

65 c

66. The overdue credit facilities backed by guarantee of the Central Government may be treated as NPA only when?

A. 90 days from the date when the account becomes overdue

B. 180 days from the date when the account becomes overdue

C. 270 days from the date when the account becomes overdue

D. The Government repudiates its guarantee when invoked

67. The overdue receivables representing positive mark-to-market value of a derivative contract will be treated as a non-performing asset, if these remain unpaid for :

A. 90 days

B. 3 months

C. 180 days

D. 270 days

68. The provisioning requirements for all types of sub-standard assets:

A. 15%

B. 20%

C. 25%

D. 40%

69. The provisioning requirements for all types of sub-standard assets in infrastructure sector:

A. 15%

B. 20%

C. 25%

D. 40%

70. The purchasing bank/FI can further sell NPA:

A. 12 months

B. 15 month

C. 18 months

D. 24 months

66 d

67 a

68 a

69 b

70 a

71. The revised uniform access criteria for centralised payment systems are?

I. Minimum CRAR of 9% as per the latest audited balance sheet;

Ii. Net npas below 5% as per the latest audited balance sheet;

Iii. Minimum net-worth of ₹ 25 crore;

Iv. Recommendation of the regulatory department concerned.

A. Only i is correct

B. I and ii are correct

C. Ii. Iii and iv are correct

D. All are correct.

E. None is correct

72. The terms Credit Exposures includes:

A. Fund based limits

B. Fund based and non-fund based limits

C. Fund based limits and 50% of non-fund based limits.

D. 50% of Fund based limits and Non-fund based limits

73. Two types i.e. R-Return (NOSTRO) and R-Return (VOSTRO) are to be submitted to RBI.

A. Every week as at the close of business on every Friday.

B. Twice a month as at the close of business on 15th and the last day of the month.

C. Once a month as at the close of business on last day of the

D. Once a half-year at the close of business on last day of September and March.

74. Under liberalised norms, how much money can an NRI remit abroad annually from his NRO accounts?

A. Not exceeding USD 0.5 million per calender year

B. Not exceeding USD 1 million per calender year

C. Not exceeding USD 2 million per calender year

D. Not exceeding USD 5 million per calender year

75. Unsecured Exposure Ceiling should not be exceeding:

A. 15% of the total outstanding advances

B. 25% of the total outstanding advances

C. 30% of the total outstanding advances

D. 40% of the total outstanding advances

71 d

72 b

73 b

74 b

75 b

76. Updating of Customer Identification Data for Low Risk Customers is done:

A. Once in 2 years

B. Once in 3 years

C. Once in 5 years

D. Once in 7 years

77. Updating of Customer Identification Data for Medium & High Risk Customers:

A. Once in 2 years

B. Once in 3 years

C. Once in 5 years

D. Once in 7 years

78. What are the Provisions of section 25 of the Payment and Settlement Systems Act, 2007?

A. It secures payment of instruments

B. It gives same right to the payee as under section 138 of the Negotiable Instruments Act.

C. It is not connected with payment of Negotiable Instruments.

D. It gives rights to the drawer of the instrument

79. What is age limit for Prime Minister's Employment Generation Programme (PMEGP):

A. 16 years and above

B. 18 years and above

C. 20 years and above

D. 21 years and above

80. The limit of loans to farmers against pledge/hypothecation of agricultural produce (including warehouse receipts) for a period not exceeding 12 months has been increased.

A. 10 Lakh to 25 Lakh

B. 25 Lakh to 50 Lakh

C. 50Lakh to 1 crore

D. 1 crore to 5 crore

76 c

77 a

78 b

79 b

80 b

81. What is eligibility criteriafor finance under PMEGP:

A. Projects costing upto ₹10.00Lakhs (maximum) under business/service sector .

B. Projects costing upto ₹25.00Lakhs (maximum) under manufacturing sector.

C. Projects costing upto ₹10.00Lakhs (maximum) under business/service sector and ₹25.00Lakhs (maximum) under manufacturing sector.

D. Projects costing upto ₹10.00Lakhs and more under business/service sector and ₹25.00Lakhs and more under manufacturing sector.

82. What is limit for loan against NRE and FCNR (B) deposits:

A. ₹ 20Lakh

B. ₹ 25Lakh

C. ₹ 50Lakh

D. ₹ 1.00 crore

83. What is the minimum floor rate for Export credit after allowing interest subvention?

A. 10%

B. 9%

C. 8%

D. 7%

84. Which of the following describes Mezzanine Financing:.

A. Derivatives

B. A hybrid of debt and equity

C. A combination of futures and bonds

D. Spvs

85. Which of the following statements is not correct?

A. Revenue Expenditure relates to expenses incurred for the normal running of the Govt. Departments, interest charges on debt and subsidies.

B. Capital Expenditure relates to expenses incurred for the normal running of the Govt. Departments, interest charges on debt and subsidies.

C. Plan Expenditure relates to the outlay on schemes and programmes formulated by various Ministries under the 5-year plan..

D. All of these are correct

E. None of these is correct

81 c

82 d

83 d

84 b

85 d

86. Which of the statement is not correct about Guarantee fee on facilities covered under Credit Guarantee Fund?

I. For credit facility upto ₹5 Lakh, an upfront Guarantee Fee (GF) is 1% of the amount sanctioned.

Ii.For amounts sanctioned beyond ₹5 Lakh and upto ₹100 Lakh, the GF is 1.5%.

Iii. For credit facility upto ₹ 50 Lakh for units in the North Eastern Region including Sikkim, the GF is 0.75%

A. I is correct

B. I and ii are correct

C. Ii and iii are correct

D. All are correct.

E. None is correct

87. Which of the statement is not correct, Small Account means a savings account in a banking company where:

A. The aggregate of all credits in a financial year does not exceed rupees one Lakh;

B. The aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand; and