Banking Awareness Quiz

Banking Awareness Quiz – Set 275: We have created many quizzes on Banking Awareness and this set is one of them. These questions are most important for banking and insurance exams. The question asked in the Banking Awareness section are based both on static banking and that to current banking in news. These Banking Awareness sets will guide you in all banking exams like IBPS Clerk, IBPS PO, SBI Clerk, SBI PO, RRB Clerk and PO and other exams. So attempt all the sets now.

1. ________________ are terminals that allow authorized users, typically by using a card, to access a range of services such as cash withdrawals, balance inquiries, transfers of funds and/or acceptance of deposits.
   A) e-Money
   B) ATM
   C) MDR
   D) CDM
   
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     Option B
   Explanation: Automated teller machines (ATMs)
2. As per the MSMED Act, Government has notified procurement policy wherein PSUs/ Government Departments have to make ______ of their procurement from MSEs.
   A) 20%
   B) 15%
   C) 25%
   D) 50%
   
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     Option C
   Explanation: As per the MSMED Act, Government has notified procurement policy wherein PSUs/ Government Departments have to make 25% of their procurement from MSEs. To further strengthen the procurement mechanism, the Government has also launched the GeM portal. The Committee recommends that Government should make it mandatory for PSUs/ Government Department to procure from MSEs up to the mandated target of 25% through the GeM portal only.
3. __________ is the apex body responsible for the development of the MSME sector.
   A) RBI
   B) Ministry of Finance
   C) SIDBI
   D) NABARD
   
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   Option C
   Explanation: SIDBI is the apex body responsible for the development of the MSME sector.
4. NDFs are foreign exchange derivative instruments on non-convertible or restricted currencies traded ________________.
   A) over exchange
   B) both over the counter and exchange-traded
   C) only in Indian Rupee
   D) over the counter (OTC)
   
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   Option D
   Explanation: NDFs are foreign exchange derivative instruments on non-convertible or restricted currencies traded over the counter (OTC) mainly at offshore centres i.e., outside the direct jurisdiction of the respective national authorities.
5. ___________ is one where the exposure of credit risk is created on counter-parties other than the borrowers of the loan.
   A) External credit enhancement
   B) Internal credit enhancement
   C) Subordinate credit enhancement
   D) Cash Credit Enhancement
   
   View answer

   Option A
   Explanation: Credit enhancement can be either internal or external, depending on the strategy involved. The activities done internally in an organization that enhances the credit scene is referred to as internal enhancement, whereas any external support taken to improve the creditworthiness can be termed as an external enhancement.
6. ___________ is one where the enhancement arises from the structure of the securitisation transaction.
   A) External credit enhancement
   B) Internal credit enhancement
   C) Subordinate credit enhancement
   D) Cash Credit Enhancement
   
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   Option B
   Explanation: Credit enhancement can be either internal or external, depending on the strategy involved. The activities done internally in an organization that enhances the credit scene is referred to as internal enhancement, whereas any external support taken to improve the creditworthiness can be termed as an external enhancement.
7. At present, all Scheduled Commercial Banks are required to meet a target of __________ of their Adjusted Net Bank Credit (ANBC) or credit equivalent of Off-Balance Sheet Exposure, whichever is higher for Priority Sector Lending.
   A) 40 per cent
   B) 35 per cent
   C) 50 per cent
   D) 20 per cent
   
   View answer

   Option A
   Explanation: 40%
8. RBI uses which of the following system for Liquidity Management Frameworks?
   A) Ceiling system
   B) Floor system
   C) Corridor system
   D) Rate system
   
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   Option C
   Explanation: Under a “corridor” system – i.e., with a ceiling and a floor rate – the repo rate, that is, the rate at which central banks inject liquidity, works as the policy rate. Such a system would not be efficient when dealing with surplus liquidity because in surplus liquidity conditions, the inter-bank money market rate tends to gravitate towards the reverse-repo rate, or the rate at which central banks absorb liquidity. Therefore, under a ‘corridor’ system, central banks endeavor to keep the system liquidity in deficit.
9. The number of layers of Core Investment Companies’ (CICs) in a group should not exceed ___________
   A) 3
   B) 5
   C) 4
   D) 2
   
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   Option D
   Explanation: two
10. Which of the following is not a wholly-owned subsidiary of the RBI?
    A) DICGC
    B) NPCI
    C) ReBIT
    D) IFTAS
    
    View answer

    Option B
    Explanation: There are four fully owned subsidiaries of RBI: DICGC, BRBNMPL, ReBIT and IFTAS. RBI has one associate NCFE.

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