126. Margin of surrender value for the purpose of bank loan is retained to the extent of
(a) 5%
(b) 8%
(c) 10%
(d) 15%
ANS : C
127. Selective credit control covers
(a) Margin
(b) Interest
(c) Level of credit
(d) All the above
ANS : D
128. Under which provisions is Selective credit control governed?
(a) Section 49 of the Banking Regulation Act
(b) Section 3 of the Public Debt Act
(c) Section 21 of the RBI Act
(d) Section 131 of the Negotiable Instrument Act
ANS : C
129. Pledge of advance is made against
(a) Gold
(b) Commodities
(c) Coins and notes
(d) All the above
ANS : B
130. What rate of interest is charged on the advances made against Duty Draw Back Scheme?
(a) Same as of export advance
(b) Same as on working capital
(c) Same as of export refinance
(d) Nil
ANS : D
131. Contract of insurance is a contract of
(a) Agency
(b) Indemnity
(c) Bailment
(d) Guarantee
ANS : B
132. The insurance policy over the security is arranged for in the name of the
(a) Borrower and endorsed in favour of the bank
(b) Bank
(c) Borrower
(d) None of the above
ANS : A
133. Bank becomes pledge over the
(a) Supply bills
(b) Demand bills
(c) Import bills
(d) Export bills
ANS : C
134. Who registers the firm?
(a) Deputy Commissioner
(b) Bank
(c) Registrar of Firms
(d) Registrar of Companies
ANS : C
135. Which of the following are covered under pledge?
(a) Actual delivery of the goods
(b) Factory type pledge
(c) Constructive delivery of the goods
(d) All the above
ANS : D
136. Cash credit accounts are closed
(a) On the death of the agent
(b) On the death of the principal
(c) On the death of the Managing Director of the company
(d) None of the above
ANS : B
137. Industrial co-operatives covered under SSI can raise loan without ceiling. The loan will be refinanced by
(a) IDBI
(b) RBI
(c) NABARD
(d) DICGC
ANS : C
138. What is the minimum period of medium and long-term loans?
(a) 12 months
(b) 18 months
(c) 24 months
(d) 36 months
ANS : B
139. Which bank does not belong to State Bank Group?
(a) State Bank of Indore
(b) Banaras State Bank
(c) State Bank of Bikaner and Jaipur
(d) State Bank of Patiala
ANS : B
140. For which are the reserves maintained before issuing the following?
(a) One rupee notes
(b) One rupee coins
(c) All notes and coins
(d) RBI notes
ANS : D
141. At the time of first nationalisation which bank had the highest deposits?
(a) Punjab National Bank
(b) Canara Bank
(c) Central Bank of India
(d) Bank of India
ANS : C
142. New branch in rural and semi-urban area should cover an average population of over
(a) 13,000
(b) 17,000
(c) 20,000
(d) 25,000
ANS : A
143. The exchange rate is kept the same in all parts of the market by
(a) Speculation
(b) Interest arbitrage
(c) Exchange arbitrage
(d) Hedging
ANS : C
144. If all the banks in an economy are nationalised and converted into a monopoly bank, total deposit creation
(a) Will increase
(b) Will decrease
(c) Will neither increase nor decrease
(d) All the above
ANS : C
145. The purpose of international trade is
(a) Need for exports
(b) To encourage exports
(c) To promote international understanding
(d) To increase income of participation countries
ANS : D
146. The power of banks to create credit depends on
(a) Amount of cash with them and the safe ratio
(b) Safe ratio only
(c) Amount of cash with them only
(d) None of the above
ANS : A
147. The money the banker creates is
(a) His asset
(b) His liability
(c) Both his asset and liability
(d) None of the above
ANS : B
148. High rate of investment may
(a) Reduce the amount of credit creation
(b) Create better chances for the credit creation
(c) Not affect the amount of credit in any way
(d) Lead to any of the above-mentioned occurrences
ANS : B
149. The ‘monetary base for credit expansion’ consists of
(a) The total value of ‘high-powered money’
(b) The demand and time deposit liabilities
(c) The size of the deficit in the government’s budget
(d) All of these
ANS : A
150. A rise in the reserve ratio of banks
(a) Will lead to an increase in the money supply
(b) Will lead to a proportionate increase in the money
(c) Will lead to a decrease in the money supply
(d) None of these
ANS : C
151. The largest nationalised bank of India is
(a) Central Bank of India
(b) State Bank of India
(c) Bank of India
(d) Reserve Bank of India
ANS : B
152. Commercial banks influence money supply through
(a) Printing of one rupee notes
(b) Augmentation of savings and time deposits
(c) Provision of high denomination notes
(d) Creation of demand deposits
ANS : D
153. Which institution grants financial assistance exclusively to the private sector industries in our country?
(a) Unit Trust of India
(b) Life Insurance Corporation of India
(c) Industrial Credit and Investment Corporation of India
(d) Industrial Finance Corporation of India
ANS : C
154. Who grants subsidy?
(a) Government of India
(b) State Government
(c) RBI
(d) SBI
ANS : A
155. Minimum cash reserves fixed by law constitute
(a) A percentage of aggregate deposits of the bank
(b) A percentage of aggregate loans and advances of the bank
(c) A percentage of capital and reserves of the bank
(d) None of the above statements is correct
ANS : A
156. The difference between the correct market value and the loan value of a given security in banking terms, is known as
(a) The collateral value
(b) The security value differential
(c) The margin
(d) All the above
ANS : C
157. An increase in bank rate, other things being equal, will result into
(a) A decline in the cost of credit including greater and the demand for borrowing
(b) An increase in the cost of credit discouraging demand for credit
(c) No change in the cost of credit and the demand for borrowing
(d) Cost of credit has no relationship with demand for borrowing
ANS : B
158. Inward remittances by foreign steamship and airlines companies to finance their operating expenses in the country are shown under
(a) The credit side of the current account of balance of payment
(b) The debit side of the current account of balance of payment
(c) The credit side of the capital/account of balance of payment
(d) The debit side of the capital account of balance of payment.
ANS : A
159. How many copies of bank’s lien are sent to the company?
(a) One
(b) Two
(c) Three
(d) Four
ANS : B
160. Find out the correct statement
(a) ‘Selective credit controls are superfluous in general monetary management
(b) ‘Selective credit controls have inverse relationship with quantitative instruments of credit control
(c) ‘Selective credit controls are complimentary to quantitative instruments of credit control
(d) None of above statements is correct
ANS : C
161. Bank rate policy as a weapon of credit control has emerged from the Central Bank’s function as
(a) Bank of issue
(b) Lender of the last resort
(c) Banker’s bank
(d) All the above
ANS : B
162. Open market operations are mainly used as
(a) A fiscal device which assists Government borrowing
(b) A monetary measure to regulate quantity of money in circulation and the cash reserves of the commercial banks
(c) A measure to counteract extreme trends in business
(d) A measure to influence the balance of payments position
ANS : B
163. The variable reserve ratio has tremendous possibilities of effective credit control in
(a) Under-developed economies
(b) Developed economies
(c) Both developed and under-developed economies
(d) Neither developed nor under-developed economies
ANS : A
164. Discount rate on certificate of deposits is decided by
(a) RBI
(b) IBA
(c) SBI
(d) None of these
ANS : D
165. Sources to meet working capital are
(a) Net working capital or liquid surplus
(b) Sundry creditors and advance payment received
(c) Bank finance for working capital
(d) All the above jointly
ANS : D
166. What is Debt Equity Ratio?
(a) Ratio of long-term borrowing to tangible net worth
(b) Ratio of current assets to own tangible net worth
(c) Ratio of fixed assets to tangible net worth
(d) None of the above
ANS : A
167. Intangible assets are
(a) Preliminary expenses
(b) Patents, copyright, goodwill
(c) Losses which cannot be reduced from share capital
(d) All the above
ANS : D
168. What is Current Ratio?
(a) Ratio of total assets to total liabilities
(b) Earning capacity of unit
(c) Ratio of current assets to current liabilities
(d) None of the above
ANS : C
169. Current Ratio represents
(a) Ability of the unit to meet its current liabilities out of current assets
(b) Ability of easy profit
(c) Ability of the unit to pay instalments of term-loan
(d) None of the above
ANS : A
170. Liability-side of the balance-sheet comprises
(a) Capital and reserve
(b) Long-term liabilities
(c) Current liabilities
(d) All the above
ANS : D
171. The 15th day of a month is known as
(a) Customer’s Day
(b) Complaints Day
(c) Holiday
(d) None of the above
ANS : A
172. Inter-bank participation certificates are issued on the recommendations of which committee?
(a) Ghosh
(b) Vaghul
(c) Chakravarthy
(d) Narasimhan
ANS : B
173. A transferable letter of credit cannot be transferred more than
(a) Once
(b) Twice
(c) Three times
(d) Four times
ANS : A
174. If the word irrevocable or revocable is not indicated in a letter of credit, then the credit shall be deemed as
(a) Revolving credit
(b) Standby credit
(c) Revocable credit
(d) Irrevocable credit
ANS : C
175. Service charges on Foreign Letter of Credit are fixed by
(a) IBA
(b) FEDAI
(c) RBI
(d) IBRD
ANS : B
176. Exchange portion of Demand Bills purchased is credited to which account?
(a) Discount
(b) Commission
(c) Exchange
(d) Interest
ANS : D
177. Unclaimed pass-books lying with the bank may be cancelled and destroyed after how many years?
(a) 2
(b) 3
(c) 5
(d) 10
ANS : B
178. The Government has allowed certain remission on which of the following bills?
(a) Usance
(b) Demand
(c) Exchange
(d) All the above
ANS : A
179. Export Credit Packing Advances sanctioned to SSI exporters are covered under the credit guarantee scheme of
(a) DICGC
(b) ECGC
(c) DRI
(d) None of the above
ANS : B
180. Total investment in a company is
(a) Net fixed assets
(b) Shareholder’s funds plus term-liabilities
(c) The total assets of the company
(d) None of the above
ANS : B
181. The Deposit Insurance Credit Guarantee Scheme was formed on
(a) July 1, 1975
(b) January 1, 1952
(c) January 1, 1962
(d) January 1, 1991
ANS : C
182. At present (March 1998) the maximum bank’s deposit interest rate is
(a) 9%
(b) 10%
(c) 11%
(d) 12%
ANS : C
183. Banker’s cheque is valid from the issue date for
(a) 3 months
(b) 6 months
(c) 12 months
(d) 24 months
ANS : B
184. Remittance means
(a) Despatch of issuable notes
(b) Despatch of solid notes
(c) Despatch of coins
(d) All the above
ANS : D
185. For which of the following, minor is nor eligible for
(a) Making a will
(b) Taking a locker in his name
(c) Appointing nominee of a locker
(d) All the above
ANS : D
186. A branch can be kept opened for Government business on a public holiday on the orders of the
(a) Collector
(b) Branch Manager
(c) Governor of the RBI
(d) Prime Minister
ANS : A
187. Who pays commission to banks for conducting Government business?
(a) Government of India
(b) State Government
(c) RBI
(d) Central and State Governments
ANS : C
188. Which country has the lowest rate of interest on advances?
(a) India
(b) Switzerland
(c) Japan
(d) USA
ANS : B
189. Concept of Banking Secrecy was converted into law in
(a) 1924
(b) 1927
(c) 1930
(d) 1934
ANS : D
190. The shares must be transferred in favour of the bank if the advance exceeds
(a) 1 lakh
(b) 2 lakhs
(c) 3 lakhs
(d) 5 lakhs
ANS : C
191. Bank’s charge over boats is registered with
(a) RBI
(b) SBI
(c) Port authorities
(d) Government of India
ANS : C
192. In April 2000 India’s trade deficit (exports and imports) was $ billion
(a) 220.4
(b) 112.3
(c) 467.8
(d) 100.5
ANS : B
193. With regard to the export policy of the Government of India, find out the correct statement
(a) All commodities can be exported without licence
(b) Export licences are required for only a few items
(c) Export licences are required for all items
(d) All the above
ANS : C
194. We can open a savings bank account in the sole name of a minor if he completes age of
(a) 6 (b) 10
(c) 18 (d) 21
ANS : B
195. The Banking Regulations Act, 1949 was enacted to
(a) Nationalise the banks
(b) Open regional rural banks
(c) Consolidate and amend the laws relating to banking companies
(d) Inviting foreign banks
ANS : C
196. The Banking Regulation Act was implemented on
(a) September 6, 1949
(b) April 1, 1949
(c) March 16, 1949
(d) March 31, 1949
ANS : C
197. The fourteen banks were nationalised on
(a) July 19, 1969 (b) June 1, 1969
(c) June 16, 1969 (d) July 1, 1969
ANS : A
198. The banks were nationalised with the motive to
(a) Develop the country economically
(b) Give priority to neglected sectors and exports
(c) Extend finances to weak and backward areas
(d) All the above
ANS : D
199. The fourteen banks which were nationalised were having total deposits
(a) Rs. 10 crores or above
(b) Rs. 25 crores or above
(c) Rs. 50 crores or above
(d) Rs. 75 crores or above
ANS : C
200. The remaining six banks were nationalised on
(a) April 15, 1980
(b) April 5, 1980
(c) April 1, 1980
(d) none of the above
ANS : A
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