Sample MCQs (Set 21-24)

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SET XXI

1. When banks deal with large no. of individual customers for deposits as well as loans (liabilities and assets). This is called ______ banking:

a. Narrow banking

b. Retail banking

c. Universal banking

d. Wholesale banking

2. Which of the following statement is not correct in the context of acceptance of deposits from the public

a. Banks are authorized u/s 49 A of banking Regulation Act

b. Saving bank schemes of the Govt. are exempted from the restriction imposed on acceptance of deposits from public other than by banks

c. NBFC can accept deposits under directions issued by RBI under chapter IIIB of RBI Act

d. Other companies are regulated by RBI and SEBI under rules u/s 58A of Companies Act.

3. Other than banks, the deposits can be accepted by non-bank entities. Which of the following does not match with regard to regulation authority for such deposits:

a. Non-bank finance companies – RBI direction

b. Normal companies –Central Govt. Rules

c. Joint stock companies – SEBI

d. Individuals, firms & other incorporated bodies- not allowed to accepted deposits except from friends/ relatives

4. In wholesale banking, banks normally do not deal with which of the following:

a. Corporates including multinationals

b. Trading houses

c. Prime public sector companies

d. None of the above

5. RBI undertakes govt. business. Which among the following statements is not correct in this connection:

a. RBI cannot refuse to transact banking business of Central Govt.

b. RBI undertakes banking business of State government as a result of agreement with respective State govt.

c. RBI provides ways and means advance to Central Govt. only and not the State govt.

d. None of the above

6. There are various restrictions on banks on the issues relating to (a) shareholding (b) directorship (c) voting powers (which of these is correct) under provisions of _____ Act:

a. A to c all, Banking regulation Act

b. A and b only , Banking regulation Act

c. b and c only , Banking regulation Act

d. a and c only ,RBI Act

7. The facility that enables Indian exporters to extend term credit to importers of eligible goods at the post- shipment stage is called

a. buyer’s credit

b. channel financing

c. seller’s credit

d. supply chain partnering

8. U/s 35-A of Banking Regulation Act, a banking company, before allowing transfer of shares is required to obtain RBI acknowledgment if such transfer results in holding more than _____ % of the paid up capital of the bank:

a. 2%

b. 5%

c. 7.5%

d. 10%

9. Mr. Des Raj issues a cheque favouring Mr. Raj Kumar, who endorses it in blank and delivers to Mr. Tahir Hussian. Mr. Tahir makes another endorsement in favour to Mr. Ravi Kumar recover?

a. Des Raj

b. Raj Kumar

c. Tahir Hussian

d. Mr. Des Raj and Raj Kumar only

10. Which of the following is correct in the context of holding of share capital in an RRB

a. Central Govt. 50%, State Govt.35%, Sponsoring Bank 15%

b. Central Govt. 35%, State Govt.15%, Sponsoring Bank 50%

c. Central Govt. 50%, State Govt.15%, Sponsoring Bank 35%

d. Central Govt. 35%, State Govt.50%, Sponsoring Bank 15%

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SET XXII P-5

1. If a banker allows an advance by keeping 25% margin and the amount of loan is Rs.1 lac, the value of security would be:

a. Rs.1.25 lac

b. Rs.1.33 lac

c. Rs.1.50 lac

d. Rs.1 lac

e. None of the above

2. Collateral security & margin in loan to agriculture exempted for loan:

a. Up to Rs.10000

b. Up to Rs.15000

c. Up to Rs.25000

d. Up to Rs.100000

e. Discretion of the bank

3. Which of the following is the regulator and supervisor of depositories:

a. IRDA

b. RBI

c. SEBI

d. PPFDA

4. What is the maximum extent of investment in plant & machinery for MSE ancillary units:

a. Rs.250 lac

b. Rs.300 lac

c. Rs.500 lac

d. Rs.750 lac

e. Rs.1000 lac

5. The primary dealers deal mainly with which of the following:

a. Shares and debentures

b. Govt. securities

c. Mutual fund units

d. All the above

6. A firm has been allowed demand loan but it has not carried any operations in the account after disbursement of the full amount. What is the limitation period for this demand loan:

a. 3 years from date of last withdrawal in the account

b. 3 years from date of last debit of interest in the account

c. 3 years from date of documents

d. A to c, whichever is earlier

e. A to c, whichever is later

7. Inspection and processing fee in case of priority sector can be recovered if the amount of advance is:

a. Rs.10000 or more

b. Rs.25000 or more

c. Rs.50000 or more

d. More than Rs.25000

e. More than Rs.50000

8. Which of the following expansion does match to the abbreviation:

a. SSC- Special Credit Control

b. Ads- Authorised dealers

c. OMO- Opposite market Operation

d. All the above

9. Whenever RBI wants to reduce the liquidity in the banking system it can resort to which of the following:

a. Repo

b. Reverse repo

c. Reduction in the CRR

d. Reduction in the SLR

10. Deposits and advances of a bank branch have declined and the management of the bank wants to know the reasons for the same. This will fall under the purview of:

a. Market intelligence

b. Marketing technology system

c. Taking the required steps for effective marketing of their products

d. Marketing research system

e. All the above

SET XXIII

1. Micro economics is not concerned with the analysis of :
a) individual decision units
b) allocation of the economy’s resources to various competing uses

c) market mechanism
d) broad economic aggregates

2. Economic laws refer to:
a) generalizations concerning the economic behavior of individuals
b) behavior of firms under various market forms
c) setting optimal targets for economic development of the country
d) principles derived from the analysis of demand and supply of consumer goods

3. Micro economics deals with:
a) the allocation of the nation’s resources among various competing uses
b) the determination of the prices of different goods and services
c) the size of the country’s national income through aggregate variables,consumption, investment, national income and savings
d) the determination of wage rate in the cotton textile industry

4. Many of the basic problems of economics emerge from:

a) inadequate system of price determination
b) unutilized capacity in various production units
c) the use of limited resources to satisfy human wants

d) the state interference with the market mechanism

5. The production activity in a capitalist economy takes place in ___ to:

a) accumulate capital
b) create employment
c) satisfy effective demand

d) accumulate wealth

6. The principle determinant of allocation of resources in the capital economy is:

a) the strength of trade unions
b) the government policies
c) the demand for capital goods

d) the price mechanism

7. The production function describes the:
a) economic relationship between output and price
b) technological relationship between input and output
c) mathematical relationship between quantity of one input and price of ____

d) movement from one supply curve to another

8. In economics, production may be defined as an act of:

a) providing services

b) earning profit

c) creating utility
d) producing machines

9. The production possibility curve (PPC) shows the:
a) maximum output combinations of two goods produced with available resources
b) minimum input combinations of two factors used to produce a given level of outputof a commodity
c) production pattern in an economy assuming unlimited availability of resources

d) rate of change of output subject to change in technology

10. An efficient economy operates at a point:

a) below the production possibility curve
b) on the production possibility curve
c) above the production possibility curve

d) none of the above

SET XXIV

21. Which of the following provisions do not match, in the context of loans by a bank:
a. Banks cannot grant loans on the security of their own shares- Sec 20 of B R Act
b. Banks cannot commit themselves for granting loans on behalf of their directors – Sec20 of BR Act
c. For remitting a loan in the name of a director, RBI permission is required – Sec 20-Aof B R Act
d. RBI can use selective credit control over banks- Sec 36 A B R Act

22. Banks maintain cash reserve with RBI u/s 42 of RBI Act, (a) which is called cash reserve ratio (b) it is maintained at minimum of 3% and maximum of 20% of NDTLs (c) no interest paid by RBI on this amount (d) it is maintained as a fortnightly average balance with RBI.

a. A to d all correct

b. A, b and c correct

c. A, b and d correct

d. A,c and d correct

23. Under the provisions of Right to Information Act, the public Authority means any authority established:

By or under the Constitution of India
By any other law made by the parliament or State legislature
By notification issued or order made by the appropriate Govt.
Any of the above

24. Which of the following statements is not correct in connection with balance sheet of a bank:

a. For public sector it is prepared as per 3rd Schedule of BR Act

b. For banking companies i.e. private banks, it is prepared as per part I of Schedule VI of Companies Act

c. It is prepared for the last day of the financial year

d.The provisions for preparation of balance sheet are contained in Sec 29 of B R Act.

25. Banks submit various returns to RBI under RBI Act or B R Act. Which of the following is not one such return:
a. Monthly return of liquid assets u/s 24 (3) of B R Act

b. Quarterly return of NPA advances u/s 42 of RBI Act

c. Return of unclaimed deposits u/s 26 of B R Act

d. Fortnightly return on cash reserves u/s 42 of RBI Act

26. As regards the inspection of banks (a) RBI has the authority to inspect the branches of banks u/s 35 of B R Act (b) RBI can inspect the branches of banks u/s 35A of B R Act (c) Central Govt. can direct RBI to inspect the banks.
a. A and b are correct

b. B and c are correct

c. A and c are correct

d. A to c all correct

27. Under Right to Information Act, the information that can be accessed should be held by or under control of:

a. Govt. authority
b. Public authority
c. Public or private authority
d. Govt. authority, public authority or private authority

28. A banking company can be acquired by Central Govt. if one of the following conditions is satisfied (which one is not correct):

a. Bank failed on more than one occasion to comply with RBI direction u/s 21 and 35 of B R Act

b. Bank is being managed in a manner detrimental to interest of depositors

c. Acquisition is essential for safeguarding interest of the depositors

d. Acquisition will benefit the shareholders and govt. both

29. In a contract of sale, (a) the seller transfer property in goods to buyer for a price (b) the seller agrees to transfer the property in goods to the buyer for a price (c) when the goods are transferred from seller to the buyer, the contract becomes a sale.

a. Statements (a) and (c) only are correct

b. Statements (a) and (b) only are correct

c. Statement of (b) and (c) are correct

d. All statements are correct

30. When one or more bank is merged with another bank ot two or more banks decide to merge to form a new company, it is called:

a. Merger
b. Amalgamation

c. Liquidation
d. Winding – up

Sample MCQs (Set 21-24)

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