Quiz on Banking Awareness

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Number of Questions: 10

1. Maximum period for which Commercial paper can be issued is –
   A) 3 months
   B) 6 months
   C) 1 year
   D) 2 year
   
   View answer

     Option C
   Explanation: Commercial paper can be issued for minimum of 7 days and maximum of up to 1 year from the date of issue.
2. ______ market is the financial market which is based on another source, financial instruments like future contracts on options which are derived from other form of assets.
   A) Insurance market
   B) Derivative market
   C) Money market
   D) Capital market
   
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     Option B
   Explanation: A derivative is a type of a financial instrument, whose value is derived from underlying assets. reasoning is its can be equities, interest rates, currencies and commodities. The general practice is to use derivative as a risk management tool that allows an investor to transfer the risks attached with the underlying asset to the party who is willing to take it. There can be a number of risk such as market risk, credit risk and liquidity risk.
3. The equity of RRBs are owned by Central Government, concerned State Government and the Sponsor Bank in the propotion of –
   A) 50:35:15
   B) 35:15:50
   C) 35:50:15
   D) 50:15:35
   
   View answer

   Option D
4. A term used in Economics to describe a situation where the inflation rate is high, the economic growth rate slows down and unemployment remain steadily high.
   A) Inflation
   B) Recession
   C) Stagflation
   D) Stagnation
   
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   Option C
   Explanation: Stagflation is a portmanteau wordof stagnation and inflation.
5. The Banking Companies Act, 1949 came into force on 16th March 1949, but from 1st March 1966 the name of the Act was changed to ___?
   A) Banking Regulation Act, 1949
   B) Parliament Act, 1949
   C) Chartered Accountants act, 1949
   D) None of the above
   
   View answer

   Option A
6. Banks/Financial Institutions should cream their LIC policies incorporating four key elements. Identify incorrect element among the following.
   A) Customer Acceptance Policy
   B) Customer Identification Procedures
   C) Social / Financial status
   D) Risk Management
   
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   Option C
   Explanation: 4 Key elements of KYC policy-Customer Acceptance Policy / Customer Identification Procedures / Monitoring of transaction / Risk Management

7. ___ is a association of SEBI registered Mutual Funds in India of all the registered assets management companies.
   A) AMFI
   B) IRDA
   C) RBI
   D) SIDBI
   
   View answer

   Option A
   Explanation: All the SEBI registered Mutual Funds in the country came together to form Association of Mutual Funds of India (AMFI) in India in 1995.
8. Which of the following rate is not decided by the RBI?
   A) CRR
   B) Base Rate
   C) Repo rate
   D) SLR
   
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   Option B
9. Positive confirmation of KYC is to be completed at least __ years for medium and __ years for low risk individuals and entities.
   A) 1, 2
   B) 2, 3
   C) 3, 4
   D) None of the above
   
   View answer

   Option B
10. The Reserve Bank of India issued the KYC guidelines under section 35(A) of ________ Act and Rule 9(14) of Prevention of Money Laundering.
    A) Reserve Bank of India Act, 1934
    B) Negotiable Instruments Act, 1881
    C) Prevention of Money Laundering Act, 2002
    D) Banking Regulation Act, 1949
    
    View answer

    Option D
    Explanation:

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