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180+ Banking and Finance 3 Solved MCQs

These multiple-choice questions (MCQs) are designed to enhance your knowledge and understanding in the following areas: Bachelor of Commerce (B Com) .

Chapters

Chapter: Laws relating to Banking in India
1.

In which year was the Banking Regulation Act passed?

A. 1949
B. 1955
C. 1959
D. 1969
Answer» A. 1949
2.

On which rate bases, overnight money is needed by bank from RBI?

A. MSF
B. Repo rate
C. Reverse repo
D. Bank rate
Answer» A. MSF
3.

____________________are excluded from the Banking Regulation Act 1949.

A. Public and Private Sector Banks
B. Primary Agricultural Credit Society and cooperative land mortgage banks
C. SEBI
D. Regional Rural Banks
Answer» B. Primary Agricultural Credit Society and cooperative land mortgage banks
4.

In which year, the Banking Regulation Act was amended to include cooperative banks under its purview by adding the Section 56.

A. 1964
B. 1965
C. 1986
D. 1987
Answer» B. 1965
5.

The Reserve Bank of India is given the responsibility of regulating and supervising the _________ under Reserve Bank of India Act, 1934.

A. Insurance Companies
B. Transport Companies
C. Banking Financial Companies
D. Non-Banking Financial Companies
Answer» D. Non-Banking Financial Companies
6.

In the case of a banking company incorporated outside India balance-sheet and profit and loss account shall be signed by _________ of the company.

A. Director of the principal office
B. Owner agent of the principal office
C. Manager or agent of the principal office
D. Central Government
Answer» C. Manager or agent of the principal office
7.

Copies of balance-sheets and accounts to be sent to____________.

A. RBI
B. Government of India
C. Registrar
D. Auditor
Answer» C. Registrar
8.

Who has the power to give directions to other Banking Companies?

A. RBI
B. Government of India
C. Registrar
D. Auditor
Answer» A. RBI
9.

Which section of Banking Regulation Act 1949 relates with the Power of Reserve Bank to issue directions in respect of stressed assets?

A. Section 35AA
B. Section 35AB
C. Section 35B
D. Section 35 BB
Answer» B. Section 35AB
10.

Change of name by a banking company only happens with the approval of __________?

A. RBI
B. Government of India
C. Registrar
D. Auditor
Answer» A. RBI
11.

Form of Balance sheet of banking Companies includes Reserve & Surplus in

A. Schedule 1
B. Schedule 2
C. Schedule 3
D. Schedule 4
Answer» B. Schedule 2
12.

Form of Balance sheet of banking Companies includes Fixed assets in

A. Schedule 8
B. Schedule 9
C. Schedule 10
D. Schedule 11
Answer» C. Schedule 10
13.

Contigent Liabilities in case of banking Companies are included in_________.

A. Schedule 9
B. Schedule 10
C. Schedule 11
D. Schedule 12
Answer» D. Schedule 12
14.

Banking company means any company which transacts the business of ________.

A. Banking only
B. Banking & Insurance
C. Banking & Foreign Exchange
D. Banking & Manufacturing
Answer» A. Banking only
15.

Managing agent includes

A. Secretaries and Treasurers
B. Where the managing agent is a company, and Director of such company, and any member thereof who holds substantial interest in such company
C. Where the managing agent is a firm, any partner of such firm
D. All of the above
Answer» D. All of the above
16.

Regional rural bank means a regional rural bank established under section 3 of the Regional Rural Banks Act, __________.

A. 1974
B. 1975
C. 1976
D. 1977
Answer» C. 1976
17.

Reserve Bank means the Reserve Bank of India constituted under section 3 of the Reserve Bank of India Act, _________.

A. 1934
B. 1935
C. 1945
D. 1946
Answer» A. 1934
18.

In case of banking company incorporated outside India, aggregate value of its paid-up capital and reserve shall not be less than Rs. __________.

A. 5 Lakhs
B. 12 Lakhs
C. 15 Lakhs
D. 18 Lakhs
Answer» C. 15 Lakhs
19.

In case of an Indian banking company, the sum of its paid-up capital and reserves if it has places of business in more than one State shall not be less than

A. 5 Lakhs
B. 12 Lakhs
C. 15 Lakhs
D. 18 Lakhs
Answer» A. 5 Lakhs
20.

According to Sec. ______, a banking company is not permitted to pay directly or indirectly by way of commission, brokerage, discount or remuneration on issues of its shares in excess of 2½% of the paid-up value of such shares.

A. 10
B. 11
C. 12
D. 13
Answer» D. 13
21.

FATCA stands for

A. Foreign Account Tax Compliance Act
B. Foreign Account Trade Company Act
C. Financial Account Tax Compliance Act
D. Fiscal Account Tax Compliance Act
Answer» A. Foreign Account Tax Compliance Act
22.

As per the provisions of which act all financial institutions have to maintain a record for all form of transactions?

A. Companies Act, 1956
B. Credit Information (Companies Regulation Act, 2005)
C. Information Technology Act, 2000
D. PMLA Act, 2002
Answer» D. PMLA Act, 2002
23.

Which of the following Act refers to the acquisition and transfer of the undertakings of certain banking companies?

A. Companies Act, 1956
B. Credit Information (Companies Regulation Act, 2005)
C. Banking Companies (acquisition and transfer of undertakings), 1970
D. Banking Regulation Act, 1949
Answer» C. Banking Companies (acquisition and transfer of undertakings), 1970
24.

Which of the following is the clearing agency for Government securities?

A. GOI
B. RBI
C. CCIL
D. SEBI
Answer» C. CCIL
25.

Banks are required to maintain SLR under which act?

A. Section 24 of the Banking Regulation Act
B. Section 35 of the Negotiable Instrument Act, 1881
C. Section 24 of RBI Act
D. Section 40 of Indian Contract Act, 1872
Answer» A. Section 24 of the Banking Regulation Act
Chapter: Negotiable Instrument Act 1881
26.

It is a ----------------- obligation of a banker to honour the cheques of the customer drawn against current

A. Mutual
B. Statutory
C. Unstatutory
D. All of the above
Answer» B. Statutory
27.

In India, the law regulating the Negotiable instruments are

A. Banking Regulation Act 1949
B. Reserve Bank of India Act 1934
C. Negotiable Instruments Act 1881
D. Companies Act 1956
Answer» C. Negotiable Instruments Act 1881
28.

In Negotiable Instruments Act 1881, which section defines promissory note?

A. Section 1
B. Section 2
C. Section 3
D. Section 4
Answer» D. Section 4
29.

A drawer in the bill of exchange can also be a

A. Paymaster
B. Payee
C. Banker
D. Creditor
Answer» B. Payee
30.

The rate at which RBI discounts approved bill of exchange is

A. Bank rate
B. Interest rate
C. Exchange rate
D. Discount rate
Answer» D. Discount rate
31.

Who is primarily liable on a promissory note?

A. Holder
B. Maker
C. Drawee
D. Endorser
Answer» B. Maker
32.

How many parties are mainly involved in Promissory Note?

A. One
B. Five
C. Two
D. Three
Answer» C. Two
33.

In a bill of exchange, drawee is the person

A. who draws the bill
B. on whom the bill is drawn
C. to whom the payment of the bill is to be made
D. to whom the payment of the bill is not to be made
Answer» B. on whom the bill is drawn
34.

------------ is a dead cheque

A. Post dated cheque
B. Stale cheque
C. Ante dated cheque
D. Pre dated cheque
Answer» B. Stale cheque
35.

Name the person to whom the amount of the cheque is payable?

A. Drawer
B. Payee
C. Drawee
D. Acceptor
Answer» C. Drawee
36.

Discounting of bills of exchange is

A. Clean advance
B. Secured advance
C. Neither clean advance nor secured advance
D. Unsecured advance
Answer» C. Neither clean advance nor secured advance
37.

Expand NEFT

A. National Electronic Fund Transfer
B. Neutral Electronic Fund Transfer
C. Nominal Electronic Fund Transfer
D. Natural Electronic Fund Transfer
Answer» A. National Electronic Fund Transfer
38.

A negotiable instrument drawn or make in India is called_______ instrument.

A. Inland
B. Foreign
C. Time
D. Clean
Answer» A. Inland
39.

The following one is a negotiable instrument, negotiable by usage or custom

A. Bill of Exchange
B. Accommodation Bill
C. Promissory Note
D. Share warrant
Answer» D. Share warrant
40.

The most important feature of a negotiable instrument is

A. Free transfer
B. Transfer free from defects
C. Right to sue
D. Both A & B
Answer» D. Both A & B
41.

The following one is absolutely essential for a special crossing.

A. Two parallel transverse lines
B. Words "And company?
C. Words "Not negotiable"
D. Name of a banker
Answer» D. Name of a banker
42.

Cheque is payable on

A. Demand
B. Usage
C. Fixed future date
D. After sight
Answer» A. Demand
43.

The reasonable period allowed in India for the presentation of a cheque is

A. 1 year
B. 3 months
C. 9 months
D. depending upon custom
Answer» B. 3 months
44.

Section 6 of the Negotiable Instruments Act defines ___.

A. Cheque
B. Bill of Exchange
C. Promissory Notes
D. Dishonour by non-payment
Answer» A. Cheque
45.

If a Minor draw, indorse, deliver and negotiate Negotiable Instruments, it binds __

A. All the parties except minor
B. All the parties including minor
C. Minor Only
D. Minor and Only Drawer
Answer» A. All the parties except minor
46.

Dishonour of Negotiable Instrument by Non Payment is covered under section in Negotiable Instrument Act 1882…

A. Section 90
B. Section 91
C. Section 92
D. Section 93
Answer» C. Section 92
47.

Which of the following section in the Negotiable Instruments Act deals with the Bill of Exchange?

A. Section 5
B. Section 6
C. Section 4
D. Section 13
Answer» A. Section 5
48.

Which of the followings are not the Negotiable Instruments as defined by the Statute…

A. Banker’s Note
B. Promissory Note
C. Bill of Exchange
D. Cheques
Answer» A. Banker’s Note
49.

Which of the following is/are true about the Negotiable Instruments Act, the Promissory Note is … A) Definition of Promissory Note is given in section 8 of the Negotiable Instrument Act B) Containing an unconditional undertaking C) To pay a certain sum of money only to a specific person or the bearer D) The seller is bound to accept the promissory note E) A document was written and signed by the payer/maker

A. (A), (B) and (C)
B. (B), (C) and (E)
C. (B), (C), and
Answer» B. (B), (C) and (E)
50.

The Negotiable Instruments (Amendment) Bill, 2017 inserted a provision allowing a court trying an offence related to cheque bouncing, to direct the drawer (person who writes the cheque) to pay interim compensation to the complainant. The interim compensation will not exceed ___% of the cheque amount?

A. 15%
B. 25%
C. 30%
D. 20%
Answer» D. 20%

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