Chapter:

50+ Banking and Insurance Sector in India Solved MCQs

in Financial Services

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

Chapters

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1.	Indian Commercial Banks are categorized into:
A.	Public sector Banks
B.	Foreign Banks
C.	Private Sector Banks
D.	All of the above
Answer» D. All of the above

discuss

2.	Regional Rural Banks have been set up with the basic objectives of:
A.	Providing credit to semi - urban & urban population
B.	Providing deposits facilities to farmers
C.	Providing credit & deposit facilities to rural areas
D.	providing credit, deposit and other banking facilities to people in rural
Answer» D. providing credit, deposit and other banking facilities to people in rural

discuss

3.	_____ is raised in capital markets
A.	Funds through long term securities
B.	Long term loans through Govt. securities
C.	medium term loans
D.	Short - term instruments
Answer» A. Funds through long term securities

discuss

4.	Interest on Government secu-rities on fixed basis is known as:
A.	Bank rate
B.	Coupon
C.	Prime Lending Rate
D.	Bench mark PLR
Answer» A. Bank rate

discuss

5.	__ was not nationalized in 1969:
A.	Punjab National Bank
B.	Oriental Bank of commerce
C.	Bank of Baroda
D.	Union Bank of India
Answer» B. Oriental Bank of commerce

discuss

6.	In the first round 14 major banks with a liability base of ____ were nationalized:
A.	10 crore or more
B.	20 crore or more
C.	50 crore or more
D.	100 crore or more
Answer» C. 50 crore or more

discuss

7.	The maximum Statutory Liquidity Ratio to be maintained by banks is_____:
A.	25%
B.	30%
C.	35%
D.	40%
Answer» D. 40%

discuss

8.	CRR funds are kept by the Banks in ____:
A.	Cash in hand at branches
B.	Balance with other banks
C.	Balance in a special Account with RBI
D.	Funds in the currency chest
Answer» C. Balance in a special Account with RBI

discuss

9.	An increase in CRR by RBI leads to:
A.	Decrease in deposit
B.	increase in deposit
C.	Increase in lendable resources
D.	Decrease in lendable resources
Answer» D. Decrease in lendable resources

discuss

10.	When RBI reduce the CRR it results into:
A.	Decrease in deposit
B.	increase in deposit
C.	Increase in lendable resources
D.	Decrease in lendable resources
Answer» C. Increase in lendable resources

discuss

11.	What is meant by development Oriented banking?
A.	Infrastructure financing
B.	Extending loans to States, which are un development
C.	Taking up the task of development of the economy by providing support to under privileged sections of the society
D.	All the above
Answer» C. Taking up the task of development of the economy by providing support to under privileged sections of the society

discuss

12.	Principal functions of SIDBI:
A.	Promotion of SSI
B.	Finance of SSI
C.	Development of SSI
D.	All the above
Answer» D. All the above

discuss

13.	____ heads and conducts the affairs of RBI:
A.	Central Board
B.	local board
C.	Regional board
D.	All of the above
Answer» A. Central Board

discuss

14.	RBI Provides ____ for meeting day - to - day receipt and expenditure mismatch to both Central and State Governments.
A.	treasury bills
B.	Ways and Means advance
C.	date and securities
D.	All the above
Answer» B. Ways and Means advance

discuss

15.	RBI known as lender of last resort because:
A.	It has to meet the credit need of citizens to whom no one else is willing to lend
B.	Banks lend to go to RBI as a last resort
C.	It comes to help banks in times of crisis
D.	All of the above
Answer» C. It comes to help banks in times of crisis

discuss

16.	These days RBI uses Selective credit control measures rather infrequently because of:
A.	Deregulation of functions
B.	Autonomy given to banks
C.	Comfortable liquidity
D.	Reasonable inflation level
Answer» C. Comfortable liquidity

discuss

17.	Which is incorrect with regard to powers of RBI:
A.	Holds cash reserve banks
B.	Controls banking system through licensing
C.	Supervises Banking system through inspection
D.	None of the above
Answer» D. None of the above

discuss

18.	Intervenes in markets to maintain the external value of the Indian rupee:
A.	Exporters
B.	Importers
C.	RBI
D.	IMF
Answer» C. RBI

discuss

19.	Regional Rural Banks were set up on the recommendations of:
A.	Nariman committee
B.	Narasimham committee
C.	Gadgil committee
D.	Puri committee
Answer» B. Narasimham committee

discuss

20.	Committee, launched the process of reforms of financial system in India:
A.	Gadgil committee
B.	Nariman committee
C.	Narasimham committee
D.	khanna Committee
Answer» C. Narasimham committee

discuss

21.	Which of the following can be categories as a Merchant Banking service?
A.	Consultancy on finance to a company
B.	Advance in capital structure
C.	Managing mergers
D.	Helping in finalizing take over
Answer» C. Managing mergers

discuss

22.	The instrument which provides proprietary interest in company and which entitles a person to dividend on profits, is called?
A.	Bond
B.	Share
C.	Debenture
D.	Warrant
Answer» B. Share

discuss

23.	Which of the following provides proper definition of a Mutual Funds?
A.	It is an association of members of public
B.	These members want to invest in financial instrument
C.	They want to invest in financial instrument assts of business sector
D.	All the above
Answer» D. All the above

discuss

24.	Which of the following organisations/agencies works solely to monitor and arrange flow of agriculture credit in India?
A.	NABARD
B.	SIDBI
C.	RBI
D.	SEBI
Answer» A. NABARD

discuss

25.	The currency notes of which of the following denominations are not printed in India ?
A.	Rs. 5
B.	Rs. 10
C.	Rs. 50
D.	Rs. 2500
Answer» D. Rs. 2500

discuss

26.	Which of the following is not the name of a bank functioning in India?
A.	Central Bank of India
B.	UCO Bank
C.	Aegon Religare
D.	Dena Bank
Answer» C. Aegon Religare

discuss

27.	When banks accept a fixed sum of money from an individual for a definite term and pay on maturity with interest, the deposit is known as :
A.	Term Deposit
B.	Demand Deposit
C.	Bond
D.	Mortgage
Answer» A. Term Deposit

discuss

28.	Who amongst the following is the chief of SEBI?
A.	Milind Bhave
B.	UK Sinha
C.	Shashikath Verma
D.	Shyamala Gopinath
Answer» B. UK Sinha

discuss

29.	Which of the following is a leading electronic-payment tec-hnology firm?
A.	Visa
B.	Max
C.	BSE
D.	Sensex
Answer» A. Visa

discuss

30.	The basic function of…………are to accept to deposits, lend money and act as collection and paying agents.
A.	Banks
B.	. Non Banking Institutes
C.	Sock exchange
D.	Brokers
Answer» A. Banks

discuss

31.	The RBI was nationalized by the Reserve Bank (amendment ) …………...
A.	Act 1948
B.	. Act 1932
C.	Act 1962
D.	Act 1963
Answer» A. Act 1948

discuss

32.	The baking system was……….during the early 90’s which led to greater competition and higher Production.
A.	Liberalized
B.	Centralized
C.	Decentralized
D.	None of these
Answer» A. Liberalized

discuss

33.	The baking sector is the most important part of the……….and it promotes economic development of the country.
A.	financial system
B.	Financial Procedure
C.	Technology
D.	Underwriting
Answer» A. financial system

discuss

34.	The…………..has economic significance and social purpose.
A.	Insurance industry
B.	Financial banks
C.	mutual fund
D.	Underwriting
Answer» A. Insurance industry

discuss

35.	The……… are financial intermediate that collect and invest large amount of premiums.
A.	Insurance Companies
B.	non banking Institutes
C.	Stock Exchange
D.	SEBI
Answer» A. Insurance Companies

discuss

36.	The 1st life insurance company namely………. was establishment in Kolkata in 1818
A.	oriental life insurance co
B.	ICICI prudential
C.	Tata LIC
D.	SBI LIC
Answer» A. oriental life insurance co

discuss

37.	The commercial banking system in India consists………….&………….
A.	Scheduled & Unscheduled Banks
B.	Bank & Non Banking Institutions
C.	Organised & unorganized Banks
D.	none of these
Answer» A. Scheduled & Unscheduled Banks

discuss

38.	………..banks are considered as the heart of our financial structure that makes the completely utilization of the resources of the nation.
A.	financial system
B.	Financial Procedure
C.	Technology
D.	Underwriting
Answer» A. financial system

discuss

39.	………….banks are known as local area banks.
A.	Uncheduled banks
B.	Financial Institutions
C.	Organised Banks
D.	none of these
Answer» A. Uncheduled banks

discuss

40.	…………….these banks are controlled by the Government.
A.	Public Sector Banks
B.	Organised Banks
C.	Scheduled Banks
D.	none of these
Answer» A. Public Sector Banks

discuss

41.	………………banks are registered as companies with limited liability.
A.	Private Sector Banks
B.	Public sector Banks
C.	Scheduled Banks
D.	commercial banks
Answer» A. Private Sector Banks

discuss

42.	…………… banks were establishment mainly due to the development of trade with our countries.
A.	Foreign Banks
B.	Organised Banks
C.	Scheduled Banks
D.	none of these
Answer» A. Foreign Banks

discuss

43.	…………… banks are involved with financing of foreign trade and activities.
A.	Foreign Banks
B.	Organised Banks
C.	Scheduled Banks
D.	none of these
Answer» A. Foreign Banks

discuss

44.	…………… banks aims to increase the flow of credit and availability of banking facilities to Rural areas and to the poorer section of the rural population.
A.	Regional Rural Banks
B.	Organised Banks
C.	Scheduled Banks
D.	Cooperative Banks
Answer» A. Regional Rural Banks

discuss

45.	The basic ideamovement is that poor people should come together and develop banking habits within small means.
A.	Cooperative
B.	Organised
C.	Scheduling
D.	none of these
Answer» A. Cooperative

discuss

46.	…………..banks act as catalytic agents in promoting balanced development of the country.
A.	Development Banks
B.	Organised Banks
C.	Scheduled Banks
D.	none of these
Answer» A. Development Banks

discuss

47.	………… means indemnity or protection against risk of loss by spreading the risk over a number of a person, who are exposed to it and who is agree to insure themselves against risk.
A.	Insurance
B.	Bank Over Draft
C.	Premium
D.	none of these
Answer» A. Insurance

discuss

48.	The LIC was Establishment on……………..
A.	1st Sep 1956
B.	2nd Sep 1956
C.	15th Aug 1949
D.	1st Jan 1947
Answer» A. 1st Sep 1956

discuss

49.	…………….banks can borrow from the Reserve Bank of India based on the eligible securities or get the financial assistance in times of need by rediscounting bills of Exchange.
A.	Scheduled Banks
B.	Organised Banks
C.	Scheduled Banks
D.	none of these
Answer» A. Scheduled Banks

discuss

50.	The first bank to set up a separate merchant banking division in India.
A.	Punjab national bank
B.	Standard charted bank
C.	National & Grin days bank
D.	National city bank.
Answer» A. Punjab national bank

discuss

50+ Banking and Insurance Sector in India Solved MCQs

Indian Commercial Banks are categorized into:

Regional Rural Banks have been set up with the basic objectives of:

_____ is raised in capital markets

Interest on Government secu-rities on fixed basis is known as:

__ was not nationalized in 1969:

In the first round 14 major banks with a liability base of ____ were nationalized:

The maximum Statutory Liquidity Ratio to be maintained by banks is_____:

CRR funds are kept by the Banks in ____:

An increase in CRR by RBI leads to:

When RBI reduce the CRR it results into:

What is meant by development Oriented banking?

Principal functions of SIDBI:

____ heads and conducts the affairs of RBI:

RBI Provides ____ for meeting day - to - day receipt and expenditure mismatch to both Central and State Governments.

RBI known as lender of last resort because:

These days RBI uses Selective credit control measures rather infrequently because of:

Which is incorrect with regard to powers of RBI:

Intervenes in markets to maintain the external value of the Indian rupee:

Regional Rural Banks were set up on the recommendations of:

Committee, launched the process of reforms of financial system in India:

Which of the following can be categories as a Merchant Banking service?

The instrument which provides proprietary interest in company and which entitles a person to dividend on profits, is called?

Which of the following provides proper definition of a Mutual Funds?

Which of the following organisations/agencies works solely to monitor and arrange flow of agriculture credit in India?

The currency notes of which of the following denominations are not printed in India ?

Which of the following is not the name of a bank functioning in India?

When banks accept a fixed sum of money from an individual for a definite term and pay on maturity with interest, the deposit is known as :

Who amongst the following is the chief of SEBI?

Which of the following is a leading electronic-payment tec-hnology firm?

The basic function of…………are to accept to deposits, lend money and act as collection and paying agents.

The RBI was nationalized by the Reserve Bank (amendment ) …………...

The baking system was……….during the early 90’s which led to greater competition and higher Production.

The baking sector is the most important part of the……….and it promotes economic development of the country.

The…………..has economic significance and social purpose.

The……… are financial intermediate that collect and invest large amount of premiums.

The 1st life insurance company namely………. was establishment in Kolkata in 1818

The commercial banking system in India consists………….&………….

………..banks are considered as the heart of our financial structure that makes the completely utilization of the resources of the nation.

………….banks are known as local area banks.

…………….these banks are controlled by the Government.

………………banks are registered as companies with limited liability.

…………… banks were establishment mainly due to the development of trade with our countries.

…………… banks are involved with financing of foreign trade and activities.

…………… banks aims to increase the flow of credit and availability of banking facilities to Rural areas and to the poorer section of the rural population.

The basic ideamovement is that poor people should come together and develop banking habits within small means.

…………..banks act as catalytic agents in promoting balanced development of the country.

………… means indemnity or protection against risk of loss by spreading the risk over a number of a person, who are exposed to it and who is agree to insure themselves against risk.

The LIC was Establishment on……………..

…………….banks can borrow from the Reserve Bank of India based on the eligible securities or get the financial assistance in times of need by rediscounting bills of Exchange.

The first bank to set up a separate merchant banking division in India.