Banking Structure in India Quiz

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Topic: Banking Structure in India

Number of Questions: 12

Pre-Readings: Banking Awareness: Banking Structure in India and Banking Awareness: Cooperative Banks in India

1. A scheduled bank is one that is listed in the ______of RBI Act, 1934.
   A) first schedule
   B) second schedule
   C) third schedule
   D) fourth schedule
   
   View answer

     Option B
   Explanation: A scheduled bank is one that is listed in the second schedule of RBI Act, 1934.
2. What is the minimum paid up capital a bank must have to be eligible for inclusion in the Second Schedule to the Reserve Bank of India Act, 1934?
   A) Rs 5 lakh
   B) Rs 10 lakh
   C) Rs 10 crore
   D) Rs 5 crore
   
   View answer

     Option A
   Explanation: Banks having paid up capital of at least Rs 5 lakh are eligible for inclusion in the Second Schedule to the Reserve Bank of India Act, 1934.
3. Which of the following is true about non-scheduled banks in India?
   i. A non-scheduled bank doesnot have to maintain CRR with the RBI.
   ii. Also it cannot lend money from RBI under LAF.
   iii. The banks named under third schedule of RBI Act 1934, are non-scheduled banks.
   A) Only i and iii are true
   B) Only ii and iii are true
   C) Only I and ii are true
   D) All are true
   
   View answer

   Option C
4. The minimum start-up capital of a Local Area Banks (LAB) is fixed at ___.
   A) Rs 5 lakh
   B) Rs 10 lakh
   C) Rs 10 crore
   D) Rs 5 crore
   
   View answer

   Option D
   Explanation: In 1996 it was decided to allow the establishment of local banks in the private sector. These banks were expected to bridge the gaps in credit availability and enhance the institutional credit framework in the rural and semi-urban areas and provide efficient and competitive financial intermediation services in their area of operation. The minimum start-up capital of a LAB was fixed at Rs.5 crore.
5. Which banks were set up with a view to develop the rural economy by providing credit for the purpose of development of agriculture, trade, commerce, industry?
   A) Payments Bank
   B) Small Finance Bank
   C) Regional Rural Banks
   D) Local Area Banks
   
   View answer

   Option C
6. Which is the first Regional Rural Bank in India?
   A) Saurashtra Gramin Bank
   B) Prathama Grameen Bank
   C) Pallavan Grama Bank
   D) Saptagiri Grameena Bank
   
   View answer

   Option B
   Explanation: The first Regional Rural Bank “Prathama Grameen Bank” was set up on October 2, 1975. Sponsor Bank- Syndicate Bank. Head Office- Moradabad
7. What is the share of Central Government in share capital of RRBs?
   A) 15%
   B) 35%
   C) 50%
   D) 55%
   
   View answer

   Option C
   Explanation: The Government of India, the concerned State Government and the sponsor bank contribute to the share capital of RRBs in the proportion of 50%, 15% and 35%, respectively.
8. Urban Cooperative Banks are also called as ?
   A) Short-term co-operatives
   B) Secondary Cooperative Banks
   C) Primary Cooperative Banks
   D) Long-term co-operatives
   
   View answer

   Option C
   Explanation: Primary Cooperative Banks (PCBs) also referred to as Urban Cooperative Banks (UCBs), cater to the financial needs of customers in urban and semi-urban areas. They cater to the needs of the non-agricultural sector, particularly small borrowers.
9. Which type of cooperative banks cater to the needs of the non-agricultural sector, particularly small borrowers.
   A) Primary Cooperative Banks (PCBs)
   B) Primary Agricultural Credit Societies (PACS)
   C) Central Cooperative Banks (CCBs)
   D) State Cooperative Banks (StCBs)
   
   View answer

   Option A
   Explanation: Primary Cooperative Banks caters to non agricultural needs, rest three are based in rural cooperative banks.
10. Which bank is outside the purview of the Banking Regulation Act, 1949?
    A) Primary Cooperative Banks (PCBs)
    B) Primary Agricultural Credit Societies (PACS)
    C) Central Cooperative Banks (CCBs)
    D) State Cooperative Banks (StCBs)
    
    View answer

    Option B
    Explanation: Primary Agricultural Credit Societies (PACSs) are not banks but only societies. PACS are outside the purview of the Banking Regulation Act, 1949 and hence not regulated by the Reserve Bank of India.
11. DCCSs and StCBs are regulated by _____ and Supervised by _____.
    A) NABARD, RBI
    B) RBI, RBI
    C) RBI, NABARD
    D) RBI, State Government
    
    View answer

    Option C
    Explanation: StCBs/DCCBs are registered under the provisions of State Cooperative Societies Act of the State concerned. DCCSs and StCBs are regulated by RBI and Supervised by NABARD under Sec 35 A of the Banking Regulation Act.
12. No primary (urban) cooperative bank can commence or carry on banking business if the real or exchangeable value of its paid-up capital and reserves is less than ______.
    A) Rs. 5 lakh
    B) Rs.1 lakh
    C) Rs. 10 lakh
    D) Rs 50. lakh
    
    View answer

    Option B

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