www.TNPSCROCK.

in

Banking Awareness Question

1.

Accounts are allowed to be operator by cheques in respect of ____

(a) Both savings bank accounts and fixed deposit accounts
(b) Savings bank accounts and current accounts
(C) Both savings bank accounts and loan accounts
(d) Both savings bank accounts and cash accounts only
(e) Both Current accounts and fixed deposit accounts

2.

Largest shareholder (in percentage shareholding) of a nationalized bank is____

(a) RBI
(b) NABARD
(c) LIC
(d) Govt. of India,
(e) IBA

3.

Expand the term ALM as used in Banking/ Finance sector:

(a) Asset Liability Management
(b) Asset Liability Maturity
(c) Asset Liability Mismatch
(d) Asset Liability Manpower
(e) Asset Liability Maintenance

4.

The approach of Micro-Credit or Banking with the poor is comparatively a new concept in
the field of rural credit. This approach has been tried very successfully in which of the
following countries?
(a) Bangladesh
(b) India
(c) China
(d) Japan
(e) None of these

5.

The lowering of Bank Rate by the Reserve Bank of India leads to

(a) More liquidity in the market
(b) Less liquidity in the market
(c) No change in the liquidity in the market
(d) Mobilization of more deposits by commercial banks
(e) None of the above

6.

Which of the following is not a part of the scheduled banking structure in India?
(a) Moneylenders
(b) Public Sector Banks
(c) Private Sector Banks
(d) Regional Rural Bank
(e) State Co-operative banks

7.

The rate of interest on Savings Bank Account is stipulated by

(a) The concerned bank
(b) RBI
(c) Indian Banks Association
(d) Government of India
(e) Banking Codes and Standards Board of India

8.

Many times we read a term CBS used in banking operation. What is the full from of the letter
C in the term CBS?
(a) Core
(b) Credit
(c) Continuous
(d) Complete
(e) None of these

9.

In India, the RBI prescribes the minimum SLR level for Scheduled Commercial Banks in
India in specified assets as a percentage of Banks
(a) Net Demand and Time Liabilities
(b) Demand Liabilities
(c) Time Liability
(d) None of the above
(e) All of the above

10.

ATM cards are issued to a person who maintains any of following accounts with the bank

(a) saving bank accounts

www.TNPSCROCK.in
(b) Current accounts

(d) Loan or Cash credit accounts

(c) Term deposits

(e) Either (1) or (2)

11.

Names of which of the following rates/ ratios cannot be seen in financial newspapers?
(a) Bank Rate
(b) Repo Rate
(c) Cash Reserve Ratio
(d) Pulse Rate
(e) All of the above

12.

Which of the following is NOT a type of cheque issued by an individual?

(a) Bearer cheque
(b) Order cheque
(c) Crossed cheque
(d) Savings cheque
(e) None of the above

13.

The regulator of Micro Finance in India is:

(a) Finance Ministry
(b) Reserve Bank of India
(d) SEBI
(e) None of the above

(c) State Bank of India

14.

The difference between a Bond and Loan is:

(a) The loan has normally fixed rate of interest. Bond price is dependent on market interest
rate movements
(b) bonds are more liquid
(c) Yield to maturity value can be known easily in a bond
(d) All of the above
(e) None of the above

15.

In the case of advance against fixed deposit receipts issued by banks:

(a) the deposit receipts are assigned to the bank
(b) the deposit receipts are hypothecated to the bank
(c) the deposit receipts are mortgaged to the bank
(d) a lien is credited in favour of the bank on the deposit receipts
(e) None of the above

16.

The methods of credit control by the Reserve Bank of India may be broadly divided into two
parts. These are:
(a) open and close
(b) quantitative and qualitative
(c) monetary and fiscal
(d) rural and urban
(e) none of the above

17.

The RBI has asked the banks to step up legal action against willful defaulters whose default
money is over?
(a) one crore
(b) two crore
(c) three crore
(d) five crore
(e) none of the above

18.

As per the directives issued by RBI, a cash credit or overdraft account will be treated as
Nonperforming Asset if:
(a) the account remains out of order
(b) there are no credits in the account in the month in which interest is applied
(c) the debit balance in the account has exceeded the sanctioned limit during the reporting
month
(d) all of the above
(e) none of the above

19.

Currency notes issued by RBI are fully covered by:

(a) Approved assets
(b) Gold
(d) All of these
(e) None of the above

(c) Foreign exchange

www.TNPSCROCK.in

20.
The government has stipulated that quoting Permanent Account Number is mandatory for
(a) Current Accounts
(b) Demat Account
(c) Term Deposits
(d) Savings BanK
(e) None of the above

21.

RBI had introduced Advanced Approaches for Basel II Framework in India. Accordingly, the
three Approaches are:
(a) Standardized Approach
(b) Basic indicator Approach
(c) Standardized Duration Approach
(d) All of the above
(e) None of the above

22.

Truncation of cheques means:

(a) The cheques in the paper form will be retained by the collecting banker and he will submit
(b) Entire clearing operations would be done only through computers
(c) Cheques will be scanned and the electronic image, instead of physical cheque, will be
transmitted in the clearing cycle
(d) Debiting the drawers account through internet banking
(e) None of the above

23.

The main watchdog of international trade is

(a) IMF
(b) World Bank
(d) IFC
(e) None of the above

(c) GATT

24.

A common currency for the members of the Common market in Europe is known as:
(a) Dollar
(b) Euro
(c) Franc
(d) Pound
(e) None of the above

25.

The paid up capital of Non-Scheduled Bank is less than

(a) 5 lakh
(b) 10 lakh
(d) 15 lakh
(e) None of the above

(c) 12 lakh

26.

In case a depositor wishes to withdraw his deposits prematurely, banks

(a) do not allow the same till maturity of the deposits
(b) charge a penalty for the same
(c) do not charge any penalty and allow the same
(d) do not allow premature withdrawal
(e) none of the above

27.

Which of the following is a primary function of banks?

(a) Collection and payment of cheques, rent, interest, etc, on behalf of their customers
(b) Buying, selling and keeping in safe custody, the securities on behalf of their advice
(c) Acting as trustees and executors of the property of their customers on their advice
(d) Remitting money from one place to the other through bank drafts or mail or telegraphic
transfer
(e) Accepting deposits

28.

Which of the following is/are the function(s) of Exchange Banks?

(i) Remitting money from one country to another country
(ii) Discounting of foreign bills.
(iii) Buying and selling gold and silver.
(iv) Helping Import and Export Trade.
Select the correct answer.

www.TNPSCROCK.in
(a) I and II
(d) I, II and III
29.

(b) II and III

(e) All I, II, III and IV

Account payee crossing is a direction of the drawer:

(a) To collecting banker
(b) To drawee banker
(d) To all endorsees

(c) II and IV

(c) To payee

(e) None of the above

30.

The State Co-operative Banks

(a) assume the key position in the Co-operative credit structure
(b) undertake both mobilization of resources as well as proper development among various
sectors
(c) carry out the role of intermediaries between the money market and Central Co-operative
Banks
(d) All of the above
(e) None of the above

31.

When the foreign exchange deals take place through telephone or other electronic system (and
not through an exchange) it is called
(a) over the counter
(b) over the electronic media
(c) over all channels
(d) over the exchange
(e) None of these

32.

State financial Corporations give assistance mainly to develop which of the following?
(a) Small and medium scale industries Agricultural sector
(b) Cotton industry
(c) All of the above
(d) None of the above

33.

Which of the following is the regulator of the credit rating agencies in India?
(a) RBI
(b) SBI
(c) SEBI
(d) ICRA
(e) None of these

34.

Which of the following correctly describes what sub-prime lending is?

A. Lending to the people who cannot return the loans.
B. Lending to the people who are high value customers of the banks.
C. Lending to those who are not a regular customer of a bank.
(a) Only A
(b) Only B
(c) Only C
(d) All, A, B and C
(e) A and C

1B
2D
3A
4A
5A
6A
7B
8a
32
33
34
35
36

D
A
A
C
A

9A
10 C
11 D
12 D
13 D
14 D
15 D

16 D
17 B
18 A
19 A
20 B
21 D
22 B
23 D

24 C
25 A
26 B
27 A
28 B
29 E
30 E
31 A

www.TNPSCROCK.in

1.Which of the following is a correct statement ?

(a) Normally no interest is paid on current deposit accounts,
(b) Interest is paid on current accounts at the same rate as term deposit accounts
(c) The rate of interest on current account and savings account are the same
(d) No interest is paid on any deposit by the bank
(e) Savings deposits are the same as current deposits
2. Which of the following is a measure taken by Reserve Bank of India to control inflation in
our country?
(a) Increase in CRR
(b) Increase in SLR
(c) Contraction of supply of currency
(d) Raising of Repo/ Reserve Repo Rate
(e) Decrease the SLR
3. What type of loan is granted by banks for purchase of white goods ?
(a) Consumption loan
(b) Mortgage loan
(c) Consumer durables loan
(d) Home loan
(e) None of these
4. What do you understand by the term Mortgage?
(a) Sale of moveable security in the event of default by the borrower
(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) Registration of charge with the Regional Transport Authority
(e) Returning of the security to borrower by the bank of receipt of full payment
5.Which of the following is NOT a source of funds of a commercial bank?
(a) Capital
(b) Borrowings from RBI
(c) Call money
(d) Deposits
(e) Cash reserves with RBI
6. The Banking Ombudsman
(a) is in charge of bank loan for buses
(b) fixes the rates of interest for loans
(c) resolves complaints of customers
(d) issues licences for new bank branches
(e) is the head of all nationalized banks
7. Which of the following is not the name of Banking Organisation?
(a) HDFC
(b) IDBI
(c) YES
(d) SEBI
(e) ICICI
8. Which of the following is not a primary function of a Bank?
(a) Granting Loans
(b) Collecting Cheques/ Drafts customers
(c) Facilitating import of goods
(d) issuing Bank drafts
(e) Selling Gold / Silver Coins
9. Basel II norms are associated with which of the following aspects of the banking industry ?

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
(a) Risk management
(b) Manpower planning
(c) Retirement benefits for the employees
(d) Corporate Governance
(e) none of the above

10. Which of the following is NOT a banking / finance related term?

(a) Credit wrap
(b) EMI
(c) Held to Maturity
(d) Exposure limit
(e) Diffusion
11. Lending to Micro Finance Institutions by banks is considered as fianc to
(a) Non priority sector
(b) priority sector
(c) commercial sector
(d) Agriculture sector
(e) none of these
12. Which of the following was the reasons owing which base rate was introduced?
(a) BPLR, system fell short of RBIs objective bringing transparency in lending rates
(b) Under BPLR system it was difficult for RBI to access transmission of policy rates.
(c) BPLR system was not beneficial to the customers
(1) Only (A)
(2) Only (B)
(3) Only (A) & (B)
(4) Only (B)& (C)
(5) All, (A) & (B) & (C)
13. Which of the following is/are various components/ channels of the monetary policy of the RBI?
(a) Altering money supply
(b) credit availability
(c) Influencing exchange rates
(1) only (A) & (B)
(2) Only (B) & (C)
(3) Only (A) & (C)
(4) Only (A)
(5) All (A), (B) & (C)
14. Which of the following depository/ depositories in India is/are handling dematerialized shares?
(a) National Securities Depository Ltd. (NSDL)
(b) Central Depository Services Ltd. (CDSL)
(c) Bombay Stock Exchange (BSE)
(1) only (A)
(2) Only (A) &(B)
(3) Only (C)
(4) All , (A), (B) & (C)
(e) Only (A) & (C)
15. Which of the following is/are called key Policy rates by the Reserve Bank of
India? A. Bank rate , B. Repo Rate, Reverse repo rate, C. CRR, SLR
(1) only A
(2) Only B
(3) only A & B
(4) Only C
(5) Only B & C
16. Headquarters of Reserve Bank of India is situated in
(a) New Delhi
(b) Mumbai
(d) Chennai
(e) Hyderabad

(c) Kolkata

17. The Reserve Bank of India has divested its stake in State Bank of India to
(a) IDBI Bank
(b) LIC
(c) ICICI Bank
(d) Government of India
(e) None of the above
18. Objective of monetary policy of RBI is to
(a) control inflation

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
(b) discourage hoarding of commodities
(c) encourage flow of credit into neglected sector
(d) All of the above
(e) None of the above
19.In which year India adopted partial convertibility of rupee?
(a) 1991
(b) 1992
(d) 1994
(e) 1952

(c) 1993

20. Which of the following guidelines were issued by Reserve Bank of India in January 1993
for the entry of Private Sector Banks in the wake of Narasimham Committee
recommendations?

(a) The new bank upon being granted licence under the banking Regulation Act by RBI, shall
be registered as a public limited company under the Companies Act, 1956
(b) Its inclusion in the second Schedule to the reserve bank of India Act, 1934 shall be subject to
Reserve Banks decision,
(c) Preference would be given to those banks the headquarters of which are proposed to be
located in the center which does not have the headquarters of any other bank,
(d) (1) and (3)
(e) All of the above
21. The RBI has prescribed that a new Private Sector Bank
(a) Shall be subject to prudential norms in regard to income recognition, asset classification
and provisioning, 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 also as may be laid down by RBI,
(d) None of the above
(e) All of the above
22. Real Time Gross Settlement System means a payment system in which
(a) both processing and final settlement of funds transfer instructions can take place continuously ,
(b) final transaction takes place at the end of the day
(c) final payment is physically effected within 24 hours
(d) final settlement of funds take place at 3 PM daily
(e) none of the above
23. Effective from 15th April, 1980, how many banks with demand and time liabilities
exceeding 200 crore were nationalized?
(a) five
(b) four
(c) six
(d) ten
(e) None of these
24.Who amongst the following was never a Governor of the RBI?
(a) Bimal Jalan
(b) Y.V. Reddy
(c) Arup Roy Chou dhury
(d) D.D Subbarao
(e) None of the above
25.Which of the following is NOT the name of a bank having branches in India?
(a) State Bank of India
(b) Naively Lignite Corporation
(c) Barclays
(d) HSBC
(e) None of the above

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
26.The loan given by a bank to a person to purchase house is called ____
(a) project Finance
(b) Business Loan
(c) Credit Loan
(d) Top up Loan
(e) None of the above
27. What is financial inclusion?
(a) To provide a permanent employment to the unemloyed
(b) To provide a 100 days job to all those who are in need of a job
(c) To provide banking services to all those living in remote areas
(d) To ensure that all financial transactions amounting Rs. 5,000/- and above are done through banks.
(e) None of the above
28. Which of the following is the best way to get hard cash immediately from ones bank account at a
time when banks are not working?
(a) Phone Banking
(b) ATM
(c) Internet Banking
(d) All of these
(e) None of the above
29. Which of the following is the name of the organization specifically to develop small scale
industrial sector in our country?

(a) NABARD
(d) AMFI

(b) SEBI
(e) None of the above

(c) SIDBI

30. When was the first commercial bank in India, Hindustan Bank. Set up in Calcutta (now
Kolkata)?
(a) 1690
(b) 1770
(c) 1805
(d) 1890
(e) none of these
31.Which of the following statement is correct :
(a) a draft can be cancelled only by the drawee branch
(b) a draft can be cancelled only by the issuing branch
(c) a draft can be cancelled only if both the issuing branch and the drawee branch agree to do so
(d) a draft can be cancelled only after obtaining permission from the controlling authority
(e) none of these
32. The bank conducts Government business as an agent of:
(a) Union and State governments
(b) Reserve Bank of India
(c) State Bank of India
(d) Both (1) and (2)
(e) None of the above
33.Cash Reserve Ratio (CRR) is maintained in the form of:
(a) Investment in Money Market
(b) Government Securities
(c) Balance with RBI
(d) All of the above
(e) none of the above
34. Counter guarantee means a guarantee obtained:

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
(a) By banks from customers on whose behalf the banks have to issue guarantees in favour of
third parties, such as Government department , Public bodies, Corporations etc,
(b) By banks from ECGC covering export risk,
(c) By banks from the beneficiary of the guarantee in whose favour the guarntee is to be issued,
(d) All of the above,
(e) none of the above
35. NABARD is a:
(a) Board
(d) Department

(b) Bureau

(c) Bank

(e) none of the above

36.The term Multi-agency approach to rural lending means:

(a) provision of funds rural development by the NABARD through various lending agencies
spread over the rural areas
(b) provision of rural credit by commercial banks, regional rural banks and
cooperative credit institutions
(c) provision of fianc for rural development by various central and state government agencies ,
(d) the whole structure of rural fiancinstitutional as well as
(e) none of the above
37. Which of the following types of ATMs eliminates the need for PIN early and
authenticated customer transactions by thumb impressions.
(a) while label ATMs
(b) Biometric ATMs
(c) On-site ATMs

(d) Off-site ATMs

(e) none of the above
38. A loan granted for short duration crops would be treated as NPA, if the instalment of principal or
interest thereon remains overdue for
(a) two crop seasons
(b) two quarters
(c) two half- years
(d) whichever is less
(e) none of the above
39. Scheduled bank means a bank
(a) incorporated under the Companies Act, 1956
(b) authorized to the Banking business,
(c) governed by the Banking Regulation Act, 1949
(d) Included in the Second schedule to the Reserve Bank of India Act 1934
(e) All of the above
40. For filing and resolving customer complaints the banking Ombusdsman
(a) charges a fee of 500/(b) does not charge any fee
(c) charges a fee of 1500/(d) charges a fee of 1000/(e) none of the above
41. How many banks are presently associated of State Bank of India?
(a) Eight
(b) Seven
(c) Six

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
(D) Five

(e) Four

42. Which of the following is not the part of the Scheduled Banking structure in India?
(a) Money Lenders
(b) Public Sector Banks
(c) Private Sector Banks
(d) Regional rural banks
(e) State Cooperative banks
43. Lot of Banks in India these days are offering M-banking facility to their customers. What is the
full form of M in M-Banking?
(a) Money
(B) Marginal
(c) Message
(D) Mutual Fund
(e) Mobile
44. The Branding Line of Bank of Baroda is
(a) International Bank of India
(b) Indias international bank
(c) Indias multinational bank
(d) World s local bank
(e) none of the above
45.To use smart cards/ debit cards/ credit cards for the purchase of an item or for payment of a
service of a merchants store, the card has to be swiped in a terminal known as
(a) point of Sale terminal,
(b) Real time terminal
(c) Shopping terminal
(d) All of the above
(e) none of the above
46. A bank account in which a depositor can deposit his funds any number of times he likes and
can also withdraw the same any number of times he wishes is called
(a) Fixed deposit account
(b) Saving account
(c) Current account

(D) Recurring account

47. On dishonouring of a cheque what kind of remedy is available to the holder of the cheque
under NI act?
(a) holder can file complaint with Ombudsman
(b) holder can file the case in a normal court
(c) holder can file a complaint with metropolitan magistrate or class I judicial magistrate,
(d) holder can file a complaint with RBI
(e) none of the above
48. Any note, which is wholly or partially, obliterated, shrunk, washed, altered or
indecipherable is a/an
(a) mutilated note
(b) imperfect note
(c) soiled note
(d) mismatched note
(e) none of these

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in

www.TNPSCROCK.in
49. Before issuing currency notes to the public over the counters or through ATMs, the bank
notes in denomination of Rs 100 and above are to be processed
(a) through machines to check authenticity
(b) through manual verification
(c) through ultra violet lamp,
(d) any of the above
(e) none of the above
50. Consider the following
1. international bank for reconstruction and development (IBRD)
2. international development association (IDA)
3. International finance corporation (IFC)
4. Multiateral investment guarntee agency (MIGA)
5. International center for settlement of investment disputes (ICSID) which among the above
constitute the world bank group?
(a) I only
(b) 1 and 2
(c) 1, 2 and 3
(d) 1, 2, 3 and 4
(e) 1, 2,3 4 and 5
Answer keys
1A
2D
3C
4C
5a

6C
7D
8C
9A
10 e

11 B
12 C
13 E
14 B
15 c

16 B
17 D
18 D
19 B
20 E

21 E
22 A
23 C
24 C
25 B

26 D
27 C
28 B
29 B
30 b

31 B
32 B
33 C
34 A
35 C

36 B
37 B
38 A
39 D
40 B

41 D
42 A
43 E
44 B
45 A

46 C
47 C
48 B
49 A
50 E

More TNPSC, TET, TRB - Online Exam - PDF - MP3 Materials Visit : www.TNPSCROCK.in