200+ Modern Banking Solved MCQs


Demand deposit also known as ___________________.

A. current account
B. fixed deposit
C. capital account
D. recurring deposit
Answer» A. current account

Bank places certain restriction on withdrawal for _______________ deposit.

A. savings deposit
B. demand deposit
C. current account
D. fixed deposit
Answer» A. savings deposit

______________ is the contribution made by the shareholders of the bank.

A. loans & advances
B. cash in hand
C. bills discounted
D. share capital
Answer» D. share capital

__________ was originally the home of commercial banking.

A. u.s.a
B. england
C. britain
D. germany
Answer» D. germany

____________ was initially the home of industrial or investment banking.

A. italy
B. england
C. geneva
D. germany
Answer» D. germany

The trend in India is towards ___________.

A. mixed banking
B. development banking
C. commercial banking
D. industrial banking
Answer» A. mixed banking

___________ to ___________ percent of total deposit is kept as cash reserve.

A. 5 to 10
B. 11 to 15
C. 8 to 11
D. 9 to 11
Answer» D. 9 to 11

Commercial banks to expand deposit through expanding their loans and advances is known as ___________.

A. credit creation
B. trade discount
C. deposit
D. bank advances
Answer» A. credit creation

Rediscounting and giving advance the central bank changes interest at a rate which is known as __________

A. crr
B. slr
C. bank rate
D. credit
Answer» C. bank rate

The nationalization of 14 commercial banks was on?

A. 19 july, 1969
B. 15 aug, 1972
C. 15april, 1980
D. 19 jan, 1959
Answer» A. 19 july, 1969

The State Bank of India was established under the State Bank of India Act on?

A. 1935
B. 1948
C. 1955
D. 1952
Answer» C. 1955

RBI introduced 14-day intermediate Treasury Bills and 14-day Treasury bills on?

A. 1994
B. 1997
C. 1984
D. 1972
Answer» B. 1997

DIC stands for?

A. deposit investment corporation
B. deposit insurance corporation
C. deposit industrial corporation
D. development corporation of india
Answer» C. deposit industrial corporation

System of banking is guided by the Islamic Law called?

A. islamic guide
B. islamic banking
C. banking regulation act
D. shariat
Answer» D. shariat

Money at call and short notice is also known as?

A. capital market
B. inter bank call money market
C. financial system
D. financial call money
Answer» B. inter bank call money market

The process of credit creation by the banking system as a whole is termed as ?

A. multiple credit creation
B. primary deposit
C. credit creation
D. single bank credit system
Answer» A. multiple credit creation

The regulator of Indian Money market is?

A. sbi
B. commercial bank
C. rbi
D. sebi
Answer» C. rbi

The regulator of Indian Capital Market is?

A. sebi
B. sbi
C. rbi
D. commercial bank
Answer» A. sebi

Bridge Loan is also known as?

A. swing loan
B. term loan
C. demand loan
D. farm loan
Answer» A. swing loan

182-day Treasury bill was introduced in Indian Money Market in?

A. 19992
B. 1972
C. 1987
D. 1952
Answer» C. 1987

CIBIL stands for?

A. credit information bureau ltd
B. credit information banking india ltd
C. credit investment bureau india ltd
D. credit information bureau india ltd
Answer» D. credit information bureau india ltd

The value of money received today will be more than a rupee tomorrow is?

A. time value of money
B. present value of money
C. future value of money
D. compound value of money
Answer» A. time value of money

The interest computed on the principal for the entire period of borrowings?

A. compound interest
B. simple interest
C. flat rate interest
D. floating rate interest
Answer» B. simple interest

The periodical interval at which interest is added is called?

A. floating period
B. compounding period
C. fixed period
D. periodic payment
Answer» B. compounding period

________Act offer incentive to attract people to invest in housing property.

A. sales tax
B. income tax act 1961
C. banking regulations act
D. co-operative societies act
Answer» B. income tax act 1961

Loan designed for people who wish to sell the existing home and purchase and purchase another?

A. bridge loan
B. housing loan
C. demand loan
D. personal loan
Answer» A. bridge loan

The first joint Stock Bank in India?

A. idbi
B. icici
C. imperial bank
D. allahabad bank
Answer» C. imperial bank

Repayment of an educational loan is deductable u/s_______ of the Income tax Act

A. 70
B. 80
C. 60
D. 90
Answer» B. 80

BPLR means?

A. bench mark prime lending rate
B. bench mark primary money lending rate
C. bench mark primary loan repayment
D. bank primary lending rate
Answer» A. bench mark prime lending rate

Compound interest is calculated by applying?

A. ci=p(i+r)n-p
B. ci=p(i+r)n
C. ci=pnr
D. ci=p(i+r)(i+r)n
Answer» A. ci=p(i+r)n-p

If interest is changed on full amount of loan(principal) throughout the entire tenure of the loan is?

A. float rate
B. fixed rate
C. flat rate
D. diminishing rate
Answer» C. flat rate

The borrower repays his loan by way of fixed monthly installments to the bank is called?

A. equal month installment
B. equally managed
C. equated monthly installment
D. equated money installment
Answer» D. equated money installment

RBI introduced _________ scheme in 1969?

A. saa
B. village adaptation
C. lead bank
D. dir
Answer» C. lead bank

________act as a Consortium leader of the banking institutions in the district?

A. lead bank
B. social banking
C. core banking
D. district co-operative bank
Answer» A. lead bank

Who introduced micro credit system in social banking segment?

A. geoffery growther of prof.d.r gadgil
B. nobel laureate & mohammed yunus
C. n.d thiwari
D. banking regulation act 1949
Answer» B. nobel laureate & mohammed yunus

“Buy now and Pay later” is the motto of a ______.

A. atm
B. debit card
C. credit card
D. micr
Answer» C. credit card

Credit card allow one to buy goods now and pay later called?

A. buying on credit
B. buying on debit
C. cash credit
D. cash payment
Answer» B. buying on debit

Card issuers, consumers, merchants and payment sever/Service producer are four parties in _________

A. cheque truncation
B. e -purse
C. debit card
D. eft
Answer» B. e -purse

Bank all over the world are enter - linked through satellite provided by __________

A. psam
B. swift
C. eft
D. neft
Answer» B. swift

EFT is also known as

A. easy fund transfer
B. maintenance fund transfer
C. exchange fund transfer
D. paperless banking
Answer» D. paperless banking

FIRPS stands for

A. foreign inward remittance payment scheme
B. foreign investment remittance payment scheme
C. foreign inward remittance payment system
D. foreign investment remittance payment system
Answer» B. foreign investment remittance payment scheme

____________ is a system that facilitates individuals, firms and corporate to electronically transfer funds from any bank branch to any individual having an account with any other bank branch in the country.

A. neft
B. eft
C. saa
D. rtgs
Answer» A. neft

In case of non-credit or delay in credit to the beneficiary account, the NEFT of the respective bank can be contacted to __________

A. ecs
B. kyc
C. cfc
D. ifsc
Answer» C. cfc

___________ is an alpha-numeric code that uniquely identifies a bank branch participating NEFT System.

A. ifs
B. ifsc
C. fsc
D. rtgs
Answer» B. ifsc

IFTP means _________

A. inter-bank finance settlement process
B. inter-bank fund transfer process
C. inter-bank fund transfer programme
D. inter-bank fund transfer payment
Answer» B. inter-bank fund transfer process

In RTGS Minimum amount to be remitted is ___________

A. rs.1,00,000
B. rs.2,00,000
C. rs.1,50,000
D. rs.50,000
Answer» B. rs.2,00,000

In India, RTGS has been implemented on ___________

A. 26 march 2004
B. 26 march 1998
C. 26 march 1994
D. 26 march 2002
Answer» A. 26 march 2004

BACS means ________

A. bankers automated clearing services
B. bankers automatic clearing system
C. bankers automatic collection service
D. bankers automatic clearance scheme
Answer» A. bankers automated clearing services

ECS payment ______ code is essential

A. micr
B. rtgs
C. ifsc
D. cts
Answer» A. micr

MICR is a numeric code that uniquely identifies a bank-branch participating in the ________ scheme.

A. ifsc credit scheme
B. eft credit scheme
C. rtgs credit scheme
D. ecs credit scheme
Answer» D. ecs credit scheme

MICR is a ________ digit code.

A. 9
B. 11
C. 7
D. 13
Answer» A. 9

CTS was introduced RBI in _________

A. february 1995
B. january 2006
C. july 2004
D. february 2008
Answer» D. february 2008

________ conversion of physical cheque into electronic form for transmission to the paying bank.

A. cts
B. ecs
C. rtgs
D. none of the above
Answer» A. cts

CORE stands for ________

A. central operations of exchange
B. centralized online real time exchange
C. challenge of real time exchange
D. centralized online real time efficiency
Answer» B. centralized online real time exchange

Banking services that increasingly rest on technology and communication systems is popularly known as ___________

A. hi-tech banking
B. internet banking
C. mobile banking
D. all the above
Answer» A. hi-tech banking

_________ is also called virtual banking or anywhere banking.

A. hi-tech banking
B. off shore banking
C. internet banking
D. none of the above
Answer» C. internet banking

_________ banking implies co-operation among group of banks for various large scale banking operations and to enjoy the economics of scale.

A. multiple banking
B. consortium banking
C. mixed banking
D. social banking
Answer» B. consortium banking

In _______ banking, different banks provide different banking services to a single borrower without having a common arrangement or understanding between the lenders.

A. mixed banking
B. group banking
C. multiple banking
D. off-shore banking
Answer» C. multiple banking

_______ banking refers to the establishment of banking unite which deal only with foreign currency denominated assets & liabilities.

A. unit banking
B. off-shore banking
C. foreign bank
D. internet banking
Answer» B. off-shore banking

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. Hyderaba
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
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

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

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
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

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
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