For any competitive exam, Financial and Banking awareness is a section you can no longer ignore. Here are a few sample banking questions for all you aspirants to solve. So how about a quiz to check your banking and financial awareness??

Banking Questions Quiz:

There are 10 banking questions here. Each question is followed by the correct answer for each question. This is followed by some additional information regarding the Banking questions answer.

Q.1. B.Q1
A.1.Banking Answer

Fiscal deficit/surplus is the difference between the government’s expenditures and its revenues (excluding the money it’s borrowed). A country’s fiscal deficit is usually communicated as a percentage of its gross domestic product (GDP).

Q.2.B.Q.2

A.2.B.A.2

Department of Refinance of NABARD is vested with the core function of providing refinance in respect of term loan for both Farm Sector and Non – Farm Sector activities for a period upto 3-15 years. The Institutions eligible for refinance are:

  1. State Co-operative Agriculture & Rural Development Banks (SCARDBs)
  2. Regional Rural Banks (RRBs)
  3. State Co-operative Banks (SCBs)
  4. Commercial Banks (CBs)
  5. State Agricultural Development Finance Companies (ADFCs)
  6. Scheduled Primary Urban Co-operative Banks (PUCBs)
  7. North- East Development Finance Corporation (NEDFC)
  8. Non-Banking Finance Companies (NBFCs)

NABARD refinance covers wide range of activities like Minor Irrigation, Land Development, Dry Land Farming, Watershed Development, Farm Mechanisation, Plantation & Horticulture, Poultry / Dairy / Other Animal Husbandry Activities, Fisheries, Bio-gas, Forestry, Storage/Market Yard, Non – Farm Sector (Small & Micro Enterprises), Self Help Groups, Self Employed / Professionals, Small Road and Water Transport Operators, Agri-clinics & Agri Business Centres, Financing in Agri Export Zones / Contract Farming/ Organic Farming, Agro Processing, Non Conventional Energy, Rural Housing, Govt. Sponsored Programmes, etc.

Q.3.B.Q.3

A.3.B.A.3

RBI derives its regulating powers for Indian Banking System from the provisions of the Banking Regulation Act 1949. For other entities, it derives power from the RBI act 1934. The objectives of this function are to protect the interest of the depositors and maintain the safety and soundness of the banking and Financial System of the country. Further, various departments have been created for effective supervisory functions. For example:

  • Department of Banking Operations and Development (DBOD) frames regulations for commercial banks.
  • Department of Banking Supervision (DBS) undertakes supervision of commercial banks, including the local area banks and all-India financial institutions.
  • Department of Non-Banking Supervision (DNBS) regulates and supervises the Non-Banking Financial Companies (NBFCs).
  • Urban Banks Department (UBD) regulates and supervises the Urban Cooperative Banks (UCBs).
  • Regulation of Regional Rural Banks (RRBs) and the Rural Cooperative Banks is done by Rural Planning and Credit Department (RPCD). However the supervision of these comes under NABARD.

Q.4.B.Q.4

A.4.B.A.4

A scheduled bank, in India, refers to a bank which is listed in the 2nd Schedule of the Reserve Bank of India Act, 1934. Banks not under this Schedule are called non-scheduled banks. Scheduled Commercial Banks can be further divided into four groups:

  1. Public Sector Banks: These include-SBI & Associate Banks, Nationalized Banks and Other Public Sector Banks
  2. Private Banks
  3. Foreign Banks
  4. Regional Rural Banks

Q.5.B.Q.5

A.5.B.A.5

KYC means “Know Your Customer”. It is a process by which banks obtain information about the identity and address of the customers. This process helps to ensure that banks’ services are not misused. The KYC procedure is to be completed by the banks while opening accounts and also periodically update the same. To open a bank account, one needs to submit a ‘proof of identity and proof of address’ together with a recent photograph.

A person can, however, still open an account called the ‘Small Account’ in case he/she doesn’t have the required I.D. proof by submitting a passport size photograph, thumb impression and signature.

Q.6.B.Q.6

A.6.B.A.6

A stock exchange or bourse is a stock market where stock brokers and traders can buy and/or sell stocks (also called shares), bonds, and other securities. Stock exchanges may also provide facilities for issue and redemption of securities and other financial instruments, and capital events including the payment of income and dividends.

 

Stock exchanges have multiple roles in the economy. This may include the following:
1) Raising capital for businesses.
2) Mobilizing savings for investment.
3) Facilitating company growth.
4) Profit sharing.
5) Corporate governance.
6) Creating investment opportunities for small investors.
7) Government capital-raising for development projects.
8) Barometer of the Economy.

Q.7.B.Q.7

A.7.B.A.7

Reserve Bank of India (RBI) has given licences to two new banks .

  1. IDFC, a diversified financial services firm with a special focus on infrastructure financing.
  2. Bandhan, the country’s largest micro lender based in Kolkata.

The detailed guidelines for the licensing can be found at the RBI site.

Q.8.B.Q.8

A.8.B.A.8

Banking questions from the resent happenings should be covered. Just like this one.

Foreign Trade Policy (2015-20) unveiled by the Commerce Minister, Nirmala Sitharaman, aims to double India’s exports of goods and services to $900 billion by 2020. Some key features of the new F.T.P are as follows:

  • F.T.P 2015-20 introduces two new schemes, namely “Merchandise Exports from India Scheme (M.E.I.S)” and “Services Exports from India Scheme (S.E.I.S)”. The ‘Services Exports from India Scheme’ (S.E.I.S) is for increasing exports of notified services. These schemes (M.E.I.S and S.E.I.S) replace multiple schemes earlier in place, each with different conditions for eligibility and usage. Incentives (M.E.I.S & S.E.I.S) to be available for S.E.Zs also. e-Commerce of handicrafts, handlooms, books etc., eligible for benefits of M.E.I.S.
  • Reduced Export Obligation (E.O) (75%) for domestic procurement under EPCG scheme.
  • Higher level of support for export of defense, farm Produce and eco-friendly products.
  • Higher level of rewards under M.E.I.S for export items with High domestic content and value addition.

The complete F.T.P (2015-2020) is available here.

Q.9.Banking Question

A.9.BANKING ANSWERChanges in taxation are important from the point of view of banking questions.

G.S.T stands for “Goods and Services Tax”. It is proposed to be a comprehensive indirect tax levied on manufacture, sale and consumption of goods as well as services at the national level. It will replace all indirect taxes levied on goods and services by the Indian Central and State governments. The introduction of G.S.T would be a significant step in the reform of indirect taxation in India. India has opted for a dual G.S.T. The Centre and the States simultaneously levying G.S.T on a common base.

Amalgamating several Central and State taxes into a single tax would mitigate cascading or double taxation. This in turn would facilitate a common national market. The simplicity of the tax should lead to easier administration and enforcement. From the consumer point of view, the biggest advantage would be in terms of a reduction in the overall tax burden on goods, which is currently estimated at 25%-30%.

Q.10.B.Q.10

A.10.B.A.10

Banking questions based on economic organisations needs coverage. You need to know about the organisation and their primary function.

Export-Import Bank of India (E.X.I.M Bank) is a specialized financial institution. It is wholly owned by Government of India. It was set up in 1982 for financing, facilitating and promoting foreign trade of India. E.X.I.M Bank extends Lines of Credit (LOCs) to overseas financial institutions, regional development banks, sovereign governments and other entities overseas. This enables buyers in those countries to import developmental and infrastructure projects, equipments, goods and services from India, on deferred credit terms.

Many more such banking questions should be practiced by you to consolidate your knowledge and to keep yourself updated.

Happy Learning!!