220+ Basics of Banking and Insurance Solved MCQs


Indian banks were nationalised in the year

A. 1949
B. 1969
C. 1959
D. 1979
Answer» B. 1969

Bankers are not only purveyors of money but also an important sense they are

A. consumers
B. manufacturers
C. lenders
D. borrowers
Answer» B. manufacturers

Primary functions of a commercial banks are ........... and lending

A. honouring cheques
B. accepting deposits
C. issuing cheques
D. issuing dd
Answer» B. accepting deposits

The total number of public sector banks in India is

A. 14
B. 12
C. 28
D. 22
Answer» C. 28

Indian Institute of Bankers is registered as.............

A. trustee
B. association
C. joint stock company
D. co-op society
Answer» C. joint stock company

The head quarters of National Housing Bank is

A. new delhi
B. mumbai
C. agra
D. hyderabad
Answer» B. mumbai

The Head quarters of Allahabad Bank is

A. allahabad
B. mumbai
C. calcutta
D. delhi
Answer» C. calcutta

The ‘Teller System’ has been introduced by banks to.........

A. canvas more customers
B. make quick payment of cheque
C. clarify enquiries
D. advice customers
Answer» B. make quick payment of cheque

Money at call and short notice of a bank is ............

A. secured advance
B. bankers second line of advance
C. widely distributed loans
D. all the above
Answer» B. bankers second line of advance

The terms drawer, drawee and payee are associated with;

A. cheques
B. promissory notes
C. delivery order
D. hundies
Answer» A. cheques

Where the RBI has no branch the bank which can act as its agent is;

A. any commercial bank
B. any nationalised bank
C. sbi
D. indian bank
Answer» C. sbi

Unless otherwise specified DD or cheques is valid for a period of;

A. 6 months
B. 1 year
C. 3 months
D. one month
Answer» C. 3 months

RBI was nationalised in the year

A. 1941
B. 1949
C. 1943
D. 1935
Answer» B. 1949

The drawee of a cheque is always..........

A. customer
B. minor
C. company
D. bank
Answer» D. bank

Commercial banks in India was organised as.......

A. sole proprietorship
B. joint stock company
C. partnership
D. joint sector
Answer» B. joint stock company

In India ............. banks are nationalised in the year 1969

A. 16
B. 19
C. 14
D. 22
Answer» C. 14

Second nationalisation of commercial banks (6 banks)was in the year

A. 1979
B. 1980
C. 1984
D. 1976
Answer» B. 1980

Cooperative banks are registered under.............

A. rbi act
B. banking regulation act
C. co-operative societies act
D. any of the above
Answer» C. co-operative societies act

The first Regional Rural Bank came into existence on

A. 1972
B. 1964
C. 1975
D. 1977
Answer» C. 1975

The largest public sector bank in India is

A. rbi
B. sbi
C. canara bank
D. indian overseas bank
Answer» B. sbi

RRB Act was enacted in the year

A. 1974
B. 1979
C. 1975
D. 1976
Answer» C. 1975

............. is the apex institution for rural development and rural credit

A. rbi
B. idbi
C. nabard
D. irbi
Answer» D. irbi

RBI was established in the year

A. 1949
B. 1935
C. 1964
D. 1947
Answer» B. 1935

Medium term loans are meant for a period

A. 3-5 years
B. 5-10 years
C. over 10 years
D. 1-3 years
Answer» A. 3-5 years

Possession of a security practically with the banker is in the case of

A. mortgage
B. pledge
C. hypothecation
D. hire purchase
Answer» B. pledge

Maximum number of withdrawals permitted per half year weather by cheque or otherwise in saving bank account

A. 100
B. 200
C. 50
D. no limit
Answer» C. 50

The banker’s obligation to pay his customers cheque is a duty towards............

A. the drawee
B. the drawer
C. the holder
D. the payee
Answer» B. the drawer

Collateral security means

A. advance against supply bills
B. share and debentures
C. goods pledged to the bank
D. additional security
Answer» D. additional security

RBI issues currency notes on the basis of............

A. minimum reserve
B. general reserve
C. proportional reserve
D. gold reserve
Answer» A. minimum reserve

The term “Reserve” in Reserve bank of India indicates

A. reserved for govt. business alone
B. it keeps reserves of all commercial banks
C. no special significance
D. it keeps foreign currency
Answer» B. it keeps reserves of all commercial banks

SBI was established in the year

A. 1954
B. 1956
C. 1955
D. 1964
Answer» C. 1955

For opening new branch of a bank should obtain the sanction of..........

A. central government
B. state government
C. rbi
D. all the above
Answer» C. rbi

Negotiable Instrument Act was passed in the year

A. 1856
B. 1875
C. 1881
D. 1882
Answer» C. 1881

NABARD is administered by

A. rbi
B. sbi
C. board of directors
D. central govt.
Answer» C. board of directors

A depositor can withdraw money from the bank any number of time in.............

A. fixed deposit
B. savings bank
C. current a/c
D. recurring deposit
Answer» C. current a/c

A cheque is deemed stale after

A. one month
B. 3 months
C. 6 months
D. one year
Answer» B. 3 months

Bank rate policy is aimed at

A. development of banks
B. helping loan takers
C. stabilising internal price level
D. none of these.
Answer» C. stabilising internal price level

Bank of England was established in the year

A. 1586
B. 1612
C. 1694
D. 1656
Answer» C. 1694

Garnishee order is to restrain a banker from

A. receiving deposit
B. making payment
C. accepting bills
D. crossing of cheques
Answer» B. making payment

A banker need not bother too much to open an account in the name of a person when receiving.........

A. term deposit
B. demand deposit
C. saving deposit
D. call deposit
Answer» A. term deposit

Primary relationship between banker and customer is that of

A. dealer and customer
B. principal and agent
C. debtor and creditor
D. vender and buyer
Answer» C. debtor and creditor

Bankers lien is a general lien and is

A. a special type of mortgage
B. an implied pledge
C. a pledged transaction
D. hypothecation transaction
Answer» B. an implied pledge

Which country is popular for branch banking

A. britain
B. china
C. india
D. japan
Answer» A. britain

Whose signature is affixed on currency notes

A. president
B. prime minister
C. rbi governor
D. finance minister
Answer» C. rbi governor

A post dated cheque is one which bears;

A. a date which is not more than 6 months
B. future date
C. an impossible date
D. back date
Answer» B. future date

A banker has the right to disclose the account position of a customer to...........

A. intimate friend
B. customers wife
C. trade reference
D. customers relatives
Answer» C. trade reference

An account usually maintained by businessmen in a bank is

A. current account
B. saving bank account
C. recurring deposit account
D. none of these
Answer» A. current account

The system of banking attracting deposits and lending for short period is called

A. mixed banking
B. deposit banking
C. credit system
D. lending system
Answer» B. deposit banking

When a loan is advanced on the basis of immovable property, it is called

A. pledge
B. hypothecation
C. mortgage
D. lien
Answer» C. mortgage

When a loan is advanced on the basis of movable property, it is called

A. pledge
B. hypothecation
C. mortgage
D. lien
Answer» B. hypothecation

Which of the following are not methods of credit control

A. bank rate
B. rationing credit
C. issue of notes
D. direct action
Answer» C. issue of notes

The banker will refuse payment against

A. post dated cheque
B. mutilated cheque
C. insufficient fund in a/c
D. all of these
Answer» D. all of these

The following is not a demand deposit

A. fixed deposit
B. annuity deposit
C. fixed deposit due
D. all of these
Answer» A. fixed deposit

A cheque bearing a back date from the date of issue is

A. stale cheque
B. post dated cheque
C. marked cheque
D. ante dated cheque
Answer» D. ante dated cheque

Banker lien shall not exercise upon

A. cheques for collection
B. bills for collection
C. call deposit
D. safe custody deposits
Answer» D. safe custody deposits

Key loans are usually allowed on

A. buildings
B. goods under safe custody
C. goods in transit
D. goods for sale
Answer» D. goods for sale

The country popular for unit banking is

A. russia
B. india
C. america
D. britain
Answer» C. america

Overdraft facility is allowed to reputed customers on

A. sb account
B. current account
C. fixed deposit
D. call deposit
Answer» B. current account

The authority controlling the clearing house scheme is

A. rbi
B. sbi
C. sebi
D. govt.
Answer» A. rbi

Crossing of a cheque can be done by

A. drawer only
B. payee only
C. any holder
D. none of these
Answer» C. any holder

Cash Reserve Ratio of banks is insisted in RBI Act of 1934 under section

A. 15
B. 42
C. 32
D. 18
Answer» B. 42

In order to determine a cheque valid or not one has to examine..........

A. actual date of issue
B. date of receipt by payee
C. date of endorsement
D. date that cheque bears
Answer» D. date that cheque bears

RBI is an example of

A. chartered company
B. statutory company
C. registered company
D. unlimited company
Answer» B. statutory company

A bank draft is drawn by

A. customer
B. bank
C. trader
D. any of the above
Answer» B. bank

Pledge means........

A. advance against goods
B. to draw over and above deposit
C. bailment of goods as security
D. mortgage of building
Answer» C. bailment of goods as security

One Rupee notes is issued by

A. rbi
B. sbi
C. ministry of finance
D. both rbi and govt.
Answer» C. ministry of finance

A place where representatives of banks meet to settle cheques for collection

A. bankers club
B. acceptance bank
C. clearing house
D. discount house
Answer» C. clearing house

Which of the following is subsidiary function of a bank

A. accepting deposit
B. granting credit
C. safe custodial service
D. banking services
Answer» D. banking services

Ownership of IDBI is vested with

A. rbi
B. govt. of india
C. sbi
D. sidbi
Answer» B. govt. of india

Credit card system was firstly developed in..........

A. bank of england
B. bank of america
C. rbi
D. bank of tokyo
Answer» B. bank of america

Call deposit is modified form of................

A. fixed deposit
B. demand draft
C. term deposit
D. sb deposit
Answer» D. sb deposit

The EXIM bank established in the year

A. 1982
B. 1992
C. 1998
D. 1975
Answer» A. 1982

NABARD was established in the year

A. 1986
B. 1982
C. 1990
D. 1964
Answer» B. 1982

Lead Bank scheme was introduced by RBI in the year

A. 1986
B. 1969
C. 1975
D. 1980
Answer» B. 1969

Rule of Claytons Case is related with

A. fixed deposit
B. appropriation of debt
C. cash credit
D. term loans
Answer» B. appropriation of debt

Garnishee order is issued by

A. state govt.
B. central govt.
C. rbi
D. court of law
Answer» D. court of law

Scheduled bank is one.................

A. which is included in ii schedule of rbi
B. which is included in ii schedule of banking regulation act
C. institution dealing in money
D. which gives loan to sc/st
Answer» A. which is included in ii schedule of rbi

SBI was set up by nationalising

A. bank of calcutta
B. imperial bank
C. national provincial bank
D. bharath bank
Answer» B. imperial bank

A bankers lien is

A. general
B. particular
C. proportional
D. specific
Answer» A. general

Number of subsidiary banks of SBI is

A. 5
B. 10
C. 14
D. 7
Answer» D. 7

Signature of one rupee note is of.....

A. rbi governor
B. finance secretary
C. president of india
D. finance minister
Answer» B. finance secretary

Origin of banking is said to be closely connected with

A. arabs
B. romans
C. indians
D. jews
Answer» D. jews

The best example of pure commercial banking is

A. british banking
B. german banking
C. indian banking
D. japanese banking
Answer» A. british banking

Which country’s banking is regarded as best example of mixed banking

A. germany
B. usa
C. britain
D. india
Answer» A. germany

Money at call is otherwise known as..........

A. overdraft
B. overnight money
C. credit card
D. cash credit
Answer» B. overnight money

............ bank is one which specialise in financing foreign trade of a country

A. unit
B. branch
C. overseas
D. exchange
Answer» D. exchange

“A central bank is an institution charged with responsibility of regulating supply and cost of money in the interest of general public”. This definition was made by;

A. h l hart
B. keynes
C. john paget
D. dudley johnson
Answer» D. dudley johnson

Commercial bank can be either unit banking type or ----------- banking type.

A. central
B. branch
C. specialised
D. rural
Answer» B. branch

Discounting of bills of exchange is.......... function of commercial banks

A. lending
B. borrowing
C. investment
D. agency
Answer» A. lending

Industrial banks are also called .......... as they subscribing the securities issued by the industrial concerns.

A. share banks
B. loan banks
C. development banks
D. investment bank
Answer» D. investment bank

IDBI and IFCI are examples of...........

A. commercial bank
B. co-operative bank
C. industrial bank
D. unit bank
Answer» C. industrial bank

International Bank for Reconstruction and Development is popularly known as

A. international bank
B. overseas bank
C. world bank
D. imf
Answer» C. world bank

Payment of premium by a commercial bank is a part of their........ System.

A. deposit
B. agency
C. exchange
D. utility
Answer» B. agency

Unit banks are linked with bigger banks by a system called........

A. mixed banking
B. group banking
C. correspondent banking
D. network banking
Answer» C. correspondent banking

Bank is a “factory” of.............

A. cash
B. coins
C. credit
D. deposit
Answer» C. credit

NPA stands for.............

A. normal profit achievement
B. nonperforming assets
C. non profit advances
D. non performing agents
Answer» B. nonperforming assets

Commercial banks act as income tax consultant. This is a.............. function.

A. lending
B. utility
C. agency
D. demand.
Answer» B. utility

.......... Ratio refers to that portion of total deposits of commercial bank which it has to keep with central bank in the form of cash reserve.

A. slr
B. crr
C. plr
D. repo
Answer» B. crr

Non Banking Financial Corporation’s (NBFCs) are otherwise known as...........

A. narrow banks
B. para banks
C. virtual banks
D. link banks
Answer» B. para banks

Maximum period for which deposits can be obtained by a NBFC is

A. 5 years
B. 15 years
C. 10 years
D. 2 years
Answer» C. 10 years
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