Nationalised bank./ NABARD. Central Government. Central Government. State Government and the Sponsoring Commercial Reserve Bank of India.

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1 1. The Regional Rural Banks are sponsored by Reserve Bank of India./ NABARD. Any scheduled commercial bank./ All of these. Any scheduled commercial bank. 2. A Regional Rural Bank has an authorized capital of Rs. 5 crore./ Rs. 50 lac. Rs. 1 crore./ No limit. None of these. / Rs. 5 crore. 3. Paid up share capital of Regional Rural Bank is contributed by Nationalised bank./ NABARD. Central Government. Central Government. State Government and the Sponsoring Commercial Reserve Bank of India. Central Government. State Government and the Sponsoring Commercial 4. Regional Rural Banks are classified as Scheduled Commercial Banks./ Public Sector Banks. Co-operative Banks./ Private Sector Banks. Scheduled Commercial Banks. 5. On the current account balances maintained by the Regional Rural Banks with the Sponsoring Commercial Bank, interest is payable at the rate of 9%/ 6% As applicable to savings accounting. Mutually agreed to./ Mutually agreed to. 6. Regional Rural banks are allowed to pay half percent additional interest on Savings accounts/ Current accounts./ Time deposits of less than 3 years. (a) and (c)/ (a) and (c) 7. The regulatory Authority for Regional Rural Banks is RBI and NABARD./ Sponsoring Bank.

2 State Government and Central Government and Sponsoring Bank in the ratio / RBI and NABARD. 8. RRBs have been making contribution in the area of rural credit since reception still they suffer from the following weaknesses Poor capital structure. Increasing overheads and decreasing profits Lack of effective coordination between Commercial Banks, Co-operative Banks / 9. Regional Rural Bank are empowered to transact the business of banking as defined under Section 5 (b) of Banking Regulation Act, Union Budget every year. Regional Rural Banks Act, Negotiable Instrument Act, Section 5 (b) of Banking Regulation Act, The co-operative credit system consists of Shot term agricultural credit institutions. Long term agricultural credit institutions. Non-agricultural credit institutions. / 11. The short term agricultural credit institutions are in three categories Central Co-operative Banks at the District level. Long term agricultural credit institutions. State Co-operative Banks at the state level. 12. The long tern agricultural credit institutions consists of Primary Land Development Banks. at the base level. Central Co-operative Banks. at the apex level. Both (a) and (b)./ May be (a) or may be (b). Both (a) and (b). 13. The working funds or primary agricultural societies is obtained from Owned funds comprising share capital. entrance fees and the reserve fund.

3 Deposits from members and non-members. Loans from co-operative Central Banks and the Governments. / 14. The Primary Agricultural Societies are the best agencies to motivate the habit of thrift, self-help and mutual are engaged in securing services of various kinds for its members. focus the base of the co-operative credit structure and its working depend All o the above./ All o the above. 15. Central Co-operative Banks serve as the connecting links between State Co-operative Banks and Primary Finance the Primary Credit Societies.balance the excess and deficiency in are closer to the Primary societies than an Apex Bank. / 16. The primary function of a Central Co-operative Bank is to mobilize the resource in the district for financing its members. to channelise the flow of funds from the State Co-operative Banks. to mobilise deposit from state government. None of the above/ Both (a) and (b). to mobilise deposit from state government. 17. RBI was nationalised in 1935/ 1949/ 1955/ 1969/ On 19th July 1969, 14 banks were nationalised, these banks had deposits of : more than Rs. 25 crore./ Rs. 75 crore./ Rs. 85 crore./ Rs. 100 crore. None of these. Rs. 75 crore. 19. The state Co-operative Banks assume the key position in the co-operative credit structure. Undertake both mobilization of resources as well as proper development among

4 various sectors. Carry out the role of intermediaries between the money market and Central cooperative Banks. / 20. The first Land Mortgage Bank was established in 1920 at Jhind in Panjub./ 1920 at Jhind in Panjub at New Delhi./ 1962 at Jammu at Jhind in Panjub. 21. Land Mortgage Bank provides long term credit against the security of Crop. Mortgage of land generally for a period of 5 to 20 years. Intangible assets./ (Both (a) and (b). Mortgage of land generally for a period of 5 to 20 years. 22. The main objective of Land Development Bank is Providing investment credit for agriculture. Providing crop loans to the farmers. Developing allied activities in rural and semi-urban areas. Creating good social relations in the residents of rural and semi-urban areas. Providing investment credit for agriculture. 23. Land Development Banks provide long term credit for schemes of basic importance to agriculture as Minor irrigation purposes. Mechanization of farms. Land reclamation, soil conservation, plantation of fruit orchards, dairy development etc. / 24. Resources of Land Development Banks are raised by Share capital from members which is linked to their borrowings from the bank. Reserve created out of profits. Borrowings comprising of interim accommodation deposits and debenture.

5 Borrowings comprising of interim accommodation deposits and debenture. 25. Merchant Banking connotes Services rendered by Banks for merchants and traders. Catering to the needs of corporate customers for raising finance. Special scheme for sanction of term loan to merchants. Catering to the needs of corporate customers for raising finance. 26. The regulatory authority for the activities of Merchant Banker in India is Reserve Bank of India. Ministry of Finance. Securities and Exchange Board of Delhi. Indian Banks Association. Securities and Exchange Board of Delhi. 27. What are major functions undertaken by merchant bankers? Issue Management. Capital structuring/ restructuring. Market maker in capital market. Market maker in capital market. 28. Which of the following is not the function of a merchant banker? Collection of bills and cheques./ Issue Management. Preparation of project reports. Syndication of loans./ Syndication of loans. Collection of bills and cheques. 29. Merchant bankers which have networth of more than rupees one crore are allowed SEBI to function as Lead mangers for issue of shares/debentures. Underwriters for share/debentures. Both (a) and (b). Collection of cheques/ Both (a) and (b).

6 30. Merchant bankers with networth of Rs. 50 la and upto Rs. 1 crore are permitted to act as Co-mangers for share/debenture issue. Underwriters for share/debenture issue. Both of the above./ Collection of cheques. Both of the above. 31. Merchant bankers with networth of over Rs. 20 lac and upto Rs. 50 lac are allowed to act as Advisors to issue of share/debentures. Underwriters for issue of share/debentures. / Collection of cheque. None of the above / Advisors to issue of share/debentures. 32. The following constitute the code of conduct for merchant bankers as stipulatedby SEBI Maintenance of high degree of standards of integrity and fairness in dealings. Providing true and adequate information to investors and abide by the provision of various acts. rules and regulations etc. Ethical conduct of business and provision of information to customers in respect of code. / 33. Which is the apex institution accredited with all matters concerning policy, planning and operation in the field of credit for agriculture and other economic activities in rural area? NABARD// SIDBI/ IFCI/ None of these. Regional Rural Bank. NABARD 34. The capital of NABARD is held by Reserve Bank of India and the Government of India in equal proportion. State Bank of India and nationalised banks. Central Government and State Government. Reserve Bank of India and Regional Rural Banks

7 Reserve Bank of India and the Government of India in equal proportion. 35. NABARD has been established on the recommendation of Talwar Committee./ Tandon Committee./ CRAFI CARD. James Raj Committee./ CRAFI CARD. 36. What are the major activities of NABARD? It provides refinance to State Co-operative Banks, Scheduled Commercial Banks and Regional Rural Banks etc. It co-ordinates the activities of different agencies in the field of agriculture and rural credit. It improves absorptive capacity of credit delivery system. It improves absorptive capacity of credit delivery system. 37. NABARD extends refinance to State Land Development Banks, State Co-operative Banks. Regional Rural Banks. Commercial Banks and other Financial Institutions approved by RBI. / 38. NABARD extends refinance to State Land Development Banks, State Co-operative Banks. Regional Rural Banks. Commercial Banks and Financial Institutions approved by RBI / 39. In the case of minor irrigation finance, NABARD provides refinance to the extent of 95%/ 90%/ 75%/ 67%/ 50% 95% % refinance is available in the case of

8 Agriclinic and Agribusiness centers. SC/ST Action Plan. ARWID. MAHIMA. Dry Land Development/Waste Land Development Schemes for individuals. (a), (b) and (c)./ (a) and (b). (a), (b) and (c). 41. A refinance to the extent of 90% under Automatic Refinance Facility is available for loans and advances granted under Farm mechanization. PMRY for all activities. SGSY for all activities other than minor irrigation. / (a) and (b). 42. For loans and advances granted by commercial banks to small, road and water transport operations scheme (SRWTED), NABARD provides refinance under Automatic Refinance Facility, subject to the conditions Repayment of loan should not exceed 5 years with moratonium of 6 months. Refinance amount is restricted to Rs. 15 lakh per borrower. The borrower should be from rural area and he should utilize the vehicle mainly for transportation of rural farm and non-farm products and inputs and passengers to/from marketing centers. 43. Under its investment credit (medium and long term) refinance scheme, refinance is available to following activities in agriculture and allied activities Minor irrigation, farm mechanization, land development and soil conservation. Dairy, sheep rearing, poultry, piggery, horticulture/plantation, forestry, fishery, storage etc. Biogas and other alternate sources of energy, sericulture, apiculture, animal and animal driven carts, agro-processing, agro-service centers etc. / 44. NABARD's refinace is available to commercial banks under non-farm sectorfor investment activities of Artisans. Small scale industries, tiny sector, village and cottage industries Handicrafts, handlooms, power looms etc. /

9 45. The industrial Finance Corporation of India is the first institution established tobuild a term financing institutional structural in India; it was established on July 1948./ August 1969./ September December 1970./ None of these. July The operations of IFCI comprise of Project Finance./ Financial Services. Corporate Advisory Services/ All of these. All of these. 47. The Industrial Finance Corporation of India provides loans to Government companies only which are in core sector (i.e., power generation, steel, coal and cement etc.) Newly established industries in backward districts. Industries in private sector. Joint stock companies and co-operative societies engaged in the manufacturing and processing of goods. Joint stock companies and co-operative societies engaged in the manufacturing and processing of goods. 48. Which of the following institutions have been promoted by IFCI? ICRA-Investment Information & Credit Rating Agency of India Ltd. Institute of Labour Development. Tourism Advisory & Financial Services Corporation of India Ltd. / 49. The IFCI is undertaking diversified activities, such as Merchant Banking./ Fund Management./ Venture Capital / 50. The Merchant Banking Division provides following services Credit Syndication and Issue Management. Project counseling.

10 Counselling for Financial Reconstruction and Rehabilitation. / 51. In 1993, a loss making nationalised bank was merged with the profit making Panjab National Bank as a result total number of public sector bank is now 27/ 28/ 19/ 14/ None of these: The first public sector bank is issue capital to public is Corporation Bank./ Indian Overseas Bank. Oriental Bank of Commerce. Punjab National Bank./ None of above. Oriental Bank of Commerce. 53. New private Sector Banks (NPSB) have been authorized to be set up under the new liberalisation policy, the minimum paid up capital should be Rs. 50 crs./ Rs. 100 crs./ Rs. 150 crs./ Rs. 200 crs. None of these Rs. 200 crs. 54. The Banking Companies Act, 1949 was enacted to consolidate and amend the law relating to banking companies w.e.f. 1st March 1966, the name of the Act has been changed as Negotiable instruments Act./ Reserve Bank of India Act. The Banking and Transfer of Undertaking Act. The Banking Regulation Act./ The Banking Regulation Act. 55. As per Sec.6 of the BR Act, a banking can undertake Merchant banking. Issue of guarantee and indemnity. Executor and trustee business. / 56. RBI has now permitted banks to carry on the business of Leasing. Hire Purchase and Factoring directly by themselves, the leadings under each Category should not exceed

11 1% of the total bank credit. 5% of the total bank credit. 10% of the total bank credit. / 10% of the total bank credit. 57. Under Sec 20 of BR Act, a bank is prohibited from granting any loan or advance to Any of its directors. Any firm (s) in which directors are interested as partner, manager etc Any company in which a director is interested as director manger etc. / 58. S. 17 of the BR Act lays down that banks shall create a reserve fund out of the balance of profit of each year, also before the declaration of dividend a certain percentage of such profit should be transferred to the reserve fund. This percentage is 10% of such profit./ 20% of such profit./ 15% of such profit. 15% of such profit./ 20% of such profit. 59. Without the approval of the RBI, a bank can not declare dividend in excess of 10%/ 15%/ 20%/ 15%/ No such limit. 15% 60. Sec. 20 of the BR Act prohibits a bank from granting any advance against the the security of Its own shares./ Partly paid shares./ Personal guarantee of its directors, manager. Personal guarantee of its directors, manager. / Its own shares. 61. A scheduled bank is one, the name of which is included in the second schedule of RBI Act, Such a bank should have a paid up Capital and Reserves of of an aggregate value of not less than Rs. One lakh./ Rs. Five lakh./ Rs. Ten lakh Rs. Hundred lakh./ None of these. Rs. Five lakh. 62. The Land Development Banks grant term loan for Land Development etc. against the mortgage of lands. In some states these banks are known as Primary Agricultural Credit Societies.

12 State Co-operative Banks./ Urban Co-operative Banks. Land Mortgage Banks./ Land Mortgage Banks. 63. In 1992 RBI had appointed a committee to make recommendation to tone up the working of the Urban Co-operative Banks. The name of the committee was Marathe Committee./ Narsimham Committee. Tondon committee./ Talwar Committee / Marathe Committee. 64. Regional Rural Banks were established pursuant to the recommendations of Narsimham Committee./ Kelkar Committee. Khusro Committee./ Marathe Committee. None of above. / Narsimham Committee. 65. The working of RRBs was reviewed in 1986 and their continuance and greater involvement of the sponsor bank in their management was recommended by Narsimham Committee./ Kelkar Committee. Khusro Committee./ Marathe Committee. Kelkar Committee. 66. Which is an apex body in the field of industrial finance in the country? Industrial Development Bank of India. EXIM Bank Industrial Credit and Investment Corporation of India Ltd. ECGC./ Industrial Development Bank of India. 67. The following institutions are eligible for refinance facilities from IDBI State Financial Corporations and State Industrial Development Corporations. Commercial Banks./ Regional Rural Banks. / 68. The objective and functions of IDBI include To provide technical and administrative assistance for promotion or expansion of industry To undertake market and investment research and survey: technical and economic studies in connection with development of industry. To act as lender of last result and to finance projects that are in conformity with

13 national priorities. All o the above./ All o the above. 69. For availing refinance from IDBI The industrial unit should not be SSI. Promoter's contribution should be 25% of project cost. Debt equity ratio should not be more than 2 : 1. Debt equity ratio should not be more than 2 : Bills rediscounting scheme of IDBI is available to commercial banks for obtaining refinance in respect of Trade bills. arising out of genuine commercial transaction, discounted by banks. Government supply bills. Bills discounted which are drawn by the suppliers of machinery when machinery is sold on deferred payment terms. Bills discounted which are drawn by the suppliers of machinery when machinery is sold on deferred payment terms. 71. Under its Bills Rediscounting Scheme, IDBI refinances banks upto 100% of invoice value subject to minimum amount of rediscounting of bills being Rs. 1,00,000./ Rs. 10,000./ Rs. 5,00,000./ Rs, 10,00,000. None of these. / Rs. 10, The Small Industries Development Bank of India (SIDBI) was set up by the Govt, of India in April 1990 as a wholly owned subsidiary of RBI./ IFCI./ IDBI./ ICICI./ IDBI. 73. The objectives of setting up SIDBI are To initiate steps for technological up gradation and modernization of existing units. To expand channels for marketing of SSI sector products in India and abroad. To promote employment-oriented industries in semi-urban areas and to check migration of population to big cities. / / 74. The main functions o SIDBI are To provide refinance for loans and advances extended by the primary lending

14 institutions to SSI units and also to provide resources support to them. It discounts and rediscounts bill arising from sale o machinery to or manufactured by industrial units in the SSI sector. It extends seed capital/soft loan assistance under National Equity Fund. Mahila Udyam Nidhi and Mahila Vikas Nidhi and Seed Capital Schemes through specified lending agencies. / 75. The Discount and Finance House of India (DFHI) was established in April 1988 as per the recommendations of Working Group on Money Market needed by Shri N. Vaghul. Narsimham Committee on Banking Reforms. Reserve Bank of India./ Working Group on Money Market needed by Shri N. Vaghul. 76. The Share capital of DFHI is Rs. 200 crore, which has been subscribed by RBI & Financial Institutions. Public Sector Banks. RBI, Public Sector Banks and Financial Institutions in the ratio of 51 : 33 : 16. / RBI, Public Sector Banks and Financial Institutions in the ratio of 51 : 33 : DFHI deals in Treasury Bills./ Commercial Bills. Certificates of deposit and commercial paper. / 78. Discount and Finance House of India Ltd. participates in call and short notice money market and interbank term deposits market both as borrower and lender. deals in Government of India dated securities from April Both of the above./ deals in stock market. Both of the above. 79. DFHI has enabled Corporates to invest their short term surplus gainfully and to liquidate them wherever necessary. Banks and Financial Institutions to earn an income by investing their money for short periods and also to raise term money.

15 Stock brokers to earn handsome profits. Both of the above. 80. Export-Import Bank of India was set up as a statutory corporation, whollyowned by Govt. of India, in January 1981./ August 1947./ January 1984./ None of these. January Export-Import Bank of India has been set up for the purpose of functioning as a specialised institution fro providing credits to foreign trade on international competitive terms. offering advisory services to exporters. providing refinance facilities in regard to export finance extended by commercial bank and other financial institutions. (a), (b) and (c). (a), (b) and (c). 82. EXIM Bank meets the needs of various group ; viz., Indian Exporters./ Overseas Entities. Commercial Banks./ All of these. / All of these. 83. The following are the schemes of assistance extended by Exim Import Bank of India It extends as assistance to exporters engaged in export of plant, equipment, machinery and related services by way of medium term loans for the period exceeding six months. This credit assistance enables exporters to extend deferred credit to the foreign buyer. It extends financial assistance to Indian promoters who promotes over seas joint ventures to support their equity investments through overseas investment finance. It extends overseas buyer's credit to foreign importers for import of Indian Capital goods and related services. / / 84. Which is statement in respect of Exim Bank's Lending Programm for Export Oriented Units? Interest rate on rupee term loan is linked to Bank's minimum lending rate. Interest rate on foreign currency loan may be floating of fixed based on bank's cost of funds. Interest rate on foreign currency loan may be floating of fixed based on bank's cost of funds. /

16 85. Under Bulk Import Finance Programme (BIF) of Export-Import Bank of India Short term working capital advance is provided to manufacturing for consumable inputs. Short term loans are provided which can be in Indian rupees and/or foreign currency depending upon the need of exporter. Credit is offered for import of eligible items with a minimum order size of Rs. 100 lac. / 86. Which is statement about Bulk Import Programme? The maximum repayment period is 12 months. Rate of interest on foreign currency loans is directly dependent on this cost of funds to Exim Bank. subject to maximum of 0.75% over the LIBOR (London Inter Bank Offer Rate.) Interest rate on rupee loan is 1% below the interest rate charged on cash credit account by commercial banks subject to minimum interest rate fixed by the Exim Bank. 87. Export-Import Bank of India also operate the following schemes of assistance Refinance of export credit to eligible commercial bank in India against their medium to long term post-shipment credits to Indian exports of capital goods. Lines of credit to foreign governments and financial institutions for import of Indian capital goods. Re-lending facility to banks situated in foreign countries to enable them to provide term finance to importers of Indian capital goods. / Re-lending facility to banks situated in foreign countries to enable them to provide term finance to importers of Indian capital goods. 88. Exim bank under its foreign Currency Preshipment Credit (FCPC), Exim Bankgives short term foreign currency finance to eligible exports for procurement ofinputs and to commercial banks for on-lending to export customers; the terms of finance are Interest rate on finance is maximum 2% over LIBOR (London Inter Bank Offer Rate). Maximum period of finance is 180 days from the date of disbursement. For commercial banks. loans availed from EXIM Bank are exempted from the requirement of Cash Reserve Ratio, Statutory Liquidity Requirement and Incremental Credit-Deposit Ratio requirements. / 89. Unit Trust of India (UTI) was set up under an Act of Parliament in 1964 or Statutory Public Sector Investment Institution. The objectives of the institutions are

17 To provide to the investors of small and moderate means the same advantages of investments as enjoyed by the large capitalists. To diminish or minimize the risk of investment in stocks by spreading or diversifying investments over a large number of different kinds of stocks. To provide professional management of portfolio.to help the small investors to each the relatively higher rate of return. / 90. The activities of Unit Trust of India, inter alia, include Sale and purchase of units./ Investment in securities. Short term and long term debt financing. / Short term and long term debt financing. 91. UTI extends the assistance to corporate sector by way of Term loans./ Underwriting/direct subscription to shares/debentures. Both of the above./ Cash credits. / Cash credits. 92. Unit Trust of India has floated the followings UTI Investor Services Ltd./ UTI Bank Ltd. UTI Securities Exchange Ltd./ All of theses. UTI Securities Exchange Ltd. 93. With the repeal UTI Act 1963, with effect from , unit Trust of India has been re-organised into UTI-1 which comprises of US-64 and all other assured return schems. UTI-Mutual Fund (UTIMF) which comprises of all the net asset value based schemes of UTI. Both of the above./ Either (a) or (b). / 94. Stock Holding Corporation of India Ltd. is promoted by IDBI and ICICI/ LIC, GIC, UTI. IRBI and IFCI/ All of these. None o the above./ All of these.

18 95. Stock Holding Corporation of India Ltd. provides Depository, post-trading and custodial services to institutional investors and retail investors. Securities lending to institutional investors and retail investors. Derivatives clearing. SGL constituent account services.mutual funds and capital market instrument distribution. / Depository, post-trading and custodial services to institutional investors and retail investors. 96. The primary activity of Stock Holding Corporation of India Ltd. is to Secure effective post trade services relation to transactions in securities carried out by financial institutions. Keep stocks of its members in godowns on warehouse pattern. render the services of taking delivery and holding stock of imported raw materials for industrial units. / Secure effective post trade services relation to transactions in securities carried out by financial institutions. 97. Which is the authority for regulation insurance business in India? IRDA./ Reserve Bank of India Govt. of India./ All of these. Reserve Bank of India 98. The Life Insurance business was nationalised in.. and Life Insurance Corporation of India were set up / 1956./ 1969./ 1977// None of these The business of general insurance was nationalised in 1972 and was vested in the hand of General Insurance Corporation of India (GIC). Subsidiaries of GIC; viz., Oriental Insurance, New India Assurance, United India Insurance, National Insurance. Both (a) and (b)./ / Govt. of India. Both (a) and (b) Life Insurance policies generally consists two elements Substantial element of savings./ Insurance or risk element. Both of the above./ Tax savings. None of the above / Both of the above.

19 101. Life Insurance policies are of generally Whole Life Policy./ Endowment Policy. None o the above./ Money Back Policy. Both (a) and (b). / Endowment Policy LIC is required to invest a certain percentage of its funds in Government andapproved securities. The percentage is 35%/ 50%/ 100%/ No minimum limit is stipulated. None of these. 35% 103. National Housing Bank was established under National Housing Bank Act.1987 and started functioning from 9th July on the recommendation madeby a High Level Group headed by Dr. C. Rangarajan./ Dr. Bimal Jalan. Mr. Narsimham./ Mr. I. G. Patel. Dr. C. Rangarajan National Housing Bank is wholly owned by Reserve Bank of India. Housing Development Finance Corporation Ltd. Housing Development Boards of Various States. / Reserve Bank of India The main objectives of National Housing Bank are To promote and develop specialized housing institutions for mobilization of resources and extending finance for housing activities. To extend refinance facilities to housing finance institutions and to scheduled banks. To provide guarantee and underwriting facilities to housing finance institutions. To promote and develop specialized housing institutions for mobilization of resources and extending finance for housing activities Which of the following institutions is the apex institutions in the matter of housing finance? - National Housing Bank. Housing Development Finance Corporation Ltd. Housing & Urban Development Corporation. / Housing & Urban Development Corporation.

20 107. National Housing Bank provides refinance to Scheduled Commercial Banks inrespect of direct housing loans upto Rs. 100 lakh./ Rs. 2 lakh./ Rs.10 lakh./ Rs. 5 lakh. None of these. Rs. 100 lakh For availment of refinance from National Housing Bank, ScheduledBank has to satisfy the following conditions The capital adequacy ratio of the Banks should be as per the norms prescribed by the Reserve Bank of India. The Net Non-Performing Assets to the net advances of the Bank should not exceed 10%. The Scheduled Commercial Bank has earned profit for the last two years. The Scheduled Commercial Bank has earned profit for the last two years National Housing Bank provides refinance assistance for direct/indirect loansalready advanced by them for purchase/construction/repairs and up gradation ofhousing to Scheduled Primary (Urban) Co-operative Banks. Scheduled State co-operative Banks. Scheduled Commercial Banks (Public Sector Banks, Private Sector Banks and Foreign Banks in India). / 110. A company is deemed as None-Banking Financial Company If its financial assets are more than 50% of its total tangible assets. If its income from financial assets is more than 50% of the gross income of the company. Both of the above. Financial assets are more than 40% of its total assets. Both of the above As per the provisions of the Reserve Bank of India (Amendment) Act 1997,Non- Banking Finance Company has to apply to the Reserve Bank of India for a certificate of registration. to have a minimum net owned fund (N.O.F) of Rs. 15 lac. Both of above. Minimum NOF of Rs. 10 lac. None of above.

21 Both of above As per the existing guidelines of Reserve Bank of India NBFCs are not allowed to offer more than 11 percent per annum interest on deposits. No official agency should guarantee or undertake the repayment of deposits of interest. NBFC deposits are uninsured and not backed by any security. None of the above 113. NBFCs consist of Equipment Leasing Company and Investment Company. Hire-Purchase Finance Company and Mutual Benefit Finance Company. Housing Finance Company. / 114. In January 1998, the Reserve Bank of India introduced new regulatory frame work for safe guarding the interest of depositors. The guidelines comprises NBFCs falling short of stipulated minimum Net Owned Funds (NOF) were precluded from accepting public deposits An NBFC not having minimum credit rating as prescribed by RBI, is not eligible to accept fresh deposits. Ceiling on the quantum public deposits was related to the level of credit rating given by the approved credit rating agencies. / 115. In regard to NBFCs' which statement is correct It cannot offer more than 2% brokerage It cannot offer gifts/incentive. NBFcs seeking public deposit should be a profit making company Which of the following statements is correct? The deposits of NBFCs are not insured. No NBFC shall lend against its own shares. No NBFC shall lend to any single borrower or to any single group of borrowers exceeding 15% or 20% respectively of its owned fund. /

22 117. The word 'Bank' is derived from German word 'back' which means a joint stock fund. Italian word 'banco'. Words 'bancus' or 'banque' which means 'a bench'. / 118. The joint stock Banking System started in the late 18th century/early 19th century. Late 17th century/early 18th century. Late 19th century/early 20th century. early 21st century./ late 18th century/early 19th century The Bank of Bengal got its charter in 1809./ 1819./ 1810./ 1820./ None of these The following bank was one of the presidency banks The Bank of Bengal./ Bank of Bombay./ Bank of Madras. All of these./ All of these The three presidency banks were merged in 1921 with the establishment of State Bank of India./ Imperial Bank of India. Punjab National Bank./ Reserve Bank of India. Imperial Bank of India The Reserve Bank of India was established in 1935 pursuant to the recommendation of : The Hilton Young Commission. All Indian Rural Credit Survey Committee. Gorawala Committee./ Dr. I. G Patel Committee. / The Hilton Young Commission Reserve Bank of India was nationalised in 1935./ 1949./ 1955./ 1969./ None of these

23 124. The report of All India Rural Credit Survey Committee (Gorawala Committee)led to the formation of Reserve Bank of India./ State Bank of India. The imperial Bank of India./ Bank of Bengal. / State Bank of India Which Bank had taken over the Imperial Bank of India? State Bank of India./ Reserve Bank of India. Indian Bank./ Central bank of India. State Bank of India Social control on banks was introduced in Feb / Feb / July, 1969./ Feb None of these. Feb Fourteen banks were nationalised on 15th April 1980./ 19th July 1969./ 19th February st Oct / None of these. 19th July The Banking Companies Act, 1949 was enacted to consolidate and amend the law relating to banking companies, w.e.f. 1st March 1966, the name of Act has been changed as The Banking Regulation Act, The Banking and Transfer of Undertaking Act. Negotiable Instrument Act./ D.I.R. Act. None of the above / The Banking Regulation Act, The Banking Regulation Act, 1949 was enacted with the objectives of checking bank failures. ensuring adequate branch expansion in rural areas. Consolidating and amending the law relation to banking companies. / Consolidating and amending the law relation to banking companies The Banking Regulation Act, 1949 came into force on March 16th, 1949./ 15th August, 1947./ 19th July, st January, 1949./

24 March 16th, As per Section 6 of B.R. Act, 1949, a banking company is permitted to undertake Merchant banking business./ Issuance of guarantee and indemnity. Executor and Trustee business./ / 132. Banking Regulation Act, 1949, does not, at all apply to Nationalised Banks. State Bank of India and its Subsidiaries. Foreign banks having branches in India. Primary agricultural credit societies and co-operative land mortgage banks. Primary agricultural credit societies and co-operative land mortgage banks Section 20 of the Banking Regulation Act, prohibits a bank from granting anyadvance against the security of its own shares./ partly paid shares. personal guarantee of directors and managers guarantee of other banks./ its own shares As per the provision of Section 20 of the BR Act, a bank is also prohibitedfrom granting any loan or advance to its director. any firm(s) in which director(s) is (are) interested as director, manager etc. any company in which a director(s) is (are) interest as director, manager etc. / 135. Section 17 of the Banking Regulation Act, 1949, lays down that banks shallcreate a reserve fund out of the balance of profit of each year, also before thedeclaration of dividend a certain percentage of such profits should be transferredto the reserve fund. The percentage is 10% of such profit./ 15% of such profit. 20% of such profit./ 25% of such profit. No limit. 25% of such profit.

25 136. Section 16 of the Banking Regulation Act, 1949 prohibits a person to be appointed as director of a banking company if he is an undischarged insolvent. to be appointed as director of a banking company if he is not of sound financial position. to be appointed as director as director of more than one banking of company. / company. to be appointed as director as director of more than one banking of 137. A high level committee under the chairmanship of Shri M. Narsimham wasappointed in August 1991, to examine all aspects relating to the structure, organisation. Functions and procedures of the financial system. Review and suggest the ways and means to increase profitability of public sector banks. Both (a) and (b)./ Either (a) or (b) Narismham Committee's main recommendations include adoption of uniform accounting practices particularly in respect of income minimum 4% capital adequacy ratio to risk weighted assets by March Imparting transparency to bank balance sheets and full disclosures in them. All of the above/ None of the above All of the above 139. Which of the following is not a recommendation made by Narasimham Committtee on the financial system? Restructuring of the banking system so as to have 3 or 4 large banks which could become international character, 8 to 10 national banks with a network of branches throughout the country engaged in universal banking. Abolition of branch licensing and leaving the matter of opening or closing of branches to the concerned bank. Liberalising the policy with regard to allowing foreign banks to open office in india as branches or subsidiaries The Narasimham Committee recommendation include Deragulation of interest rates so as to reflect emerging market conditions. Setting up of special tribunals to speed up process of recovery of loans. Setting up one or more rural banking subsidiaries by public sector banks. /

26 141. In view of recommendations of Narasimham Committee, RBI has directed that All banks with international presence should achieve the capital adequacy norm of 8 percent by the end of March Other banks o achieve capital adequacy norm of 4 percent by the end of March 1993 and 85 by he end of March Both of the above./ All banks to achieve CAR 105 with immediate effect. / Both of the above The Narsimham Committee recommended that SLR should be reduced to 25% and CRP to 10% over a time period so that the funds of banks are deployed by them in more remunerative loan assets. SLR should be reduced to 10% and CRP to 25% over a time period so that the funds of banks are deployed by them in more remunerative loan assets. SLR should be reduced to 25% and CRP to 10% over a time period so that the funds of banks are deployed by them to increase their investments in Government securities. SLR should be reduced to 25% and CRP to 10% over a time period so that the funds of banks are deployed by them to increased their capital adequacy. SLR should be reduced to 25% and CRP to 10% over a time period so that the funds of banks are deployed by them in more remunerative loan assets The Narsimham Committee recommended that Priority sector should be redefined to comprised the small and marginal farmer, the tiny sector of industry, small industries, rural artisans and other weaker section. The target for the redefined priority sector should be fixed at 10% of aggregate credit. subject to a review periodically. Both of the above./ No target for priority sector. / Both of the above No progress has been made in respect of the following recommendation of the Narsimhan Committee Changes in Rural Credit Delivery System Recruitment Policy./ Recruitment Policy. / 145. As per the recommendations of Narsimhan Committee, the Govt. passed an Act during August 1993 providing for creation of recovery tribunals for loan accounts with outstanding balances of Rs. 10 lac or more. creation of an Asset Reconstruction Fund to take-over bad debts of the banks on discount. restructuring of the banking system by crating more private sector banks. phased reduction o statutory pre-emptions.

27 creation of recovery tribunals for loan accounts with outstanding balances of Rs. 10 lac or more The following capital market reforms have been initiated Office of Controller of Capital Issue (CCI) has been abolished and SEBI has prepared comprehensive rules and regulations for inventor protection. National Stock Exchange has been set up providing a nationwide screen based trading and electronic clearing and settlement system. Private Sector Mutual Funds have been allowed to operate and Foreign Institutional Investor (FIIs) have been allowed to invest in capital markets subject to SEBI guidelines. / / 147. During Dec RBI modified its branch licensing policy by putting following new conditions Banks should have a three year profitability record. NPA level should be below 15%. Its capital adequacy ratio should not be less that 8% with a minimum owned funds requirement of Rs. 100 crore. / 148. P.S. banks signed the MOU with RBI for the first time with the objective of accountability and performance as a result of Govt. insistence as a pre-condition for contribution Rs. 5,700 crore as additional capital during the year / / / None of these The targets set to be achieved by banks under MOU are Reduction in NPA, Expenses ; Avg, Cost of Deposits/Borrowings. Improvement in Staff Productivity, Interest Spread. Average Yield on CRR and SLR ; Rate of Return on Advances. Upgradation to Technology at Branches/Offices. / Reduction in NPA, Expenses ; Avg, Cost of Deposits/Borrowings As per the MOU, in terms of the indicators, the Public Sector Banks have to spell out policies in the following area Liability Management./ Investment Management.

28 Credit Policies and Recovery Management. / 151. The Banks are required to constitute high power liability management committees comprising top executives determine suitable policies for each liability product such as demand deposits, savings, term deposits and CODs. Liabilities denominated in foreign exchange. Monitoring ratio yield elastic and inelastic liabilities in the total liabilities as also supply statement of use of call money borrowings. / 152. The banks shall have to state their lending policies. These would include exposure limits and eligible borrowers. documentation standard, maturity and pricing options. Write off and review procedures. / 153. As per the MOU the banks will have to develop a plan to improve position against all NPAs above Rs. 10 lac./ Rs. 50 lac./ Rs. 100 lac./ Rs. 500 lac. None of these. Rs. 100 lac RBI has proposed to invoke penalty clauses against those nationlised banks which fail to meet the targets commited in the MOU. These include hike in CRR/SLR invoking suitable penalty within BR Act. Withdrawal of refinance, access to money market, fresh funds for recapitalisation. / 155. The world over most of the supervisory authorities have adopted the following as the basis of assessment of capital adequacy Risk Assets Ratio System./ Return of Capital System. Average Yield on Assets System./ Net profit. / Risk Assets Ratio System.

29 156. The Committee on Banking Regulations and Srpervisory Practices which released the agreed frame-work on international convergence of capital measures and capital standards in July, 1988 is popularly known as Cooks Committee./ Vaz Committee. Basic Committee./ Jilani Committee. / Basic Committee The committee adopted weighted risk assets approach which assigns weights to on-balance sheet exposure of a bank. off-balance sheet exposure of a bank. Both of the above./ Net profit of the bank. / Both of the above basic objective behind the committees work on capital convergence is that the new frame-work should serve to strengthen the soundness and stability of the banking system. the frame-work should be fair and have a high degree of consistency in its application. Both of the above./ None of the above Either (a) or (b)./ Both of the above The basic Committee has defined capital in two Tiers (Tier-I and Tier-II). Tier- capital is known as Net capital./ Gross capital./ Working capital./ Core capital./ None of these. Core capital Tier I capital contains elements that are most permanent and readily available. less permanent or less readily available. / of temporary nature. Both (a) and (b). less permanent or less readily available Tier-I Capital would mean paid up capital. statutory reserves and other disclosed free reserves. Capital reserves representing surplus arising out of sale proceeds of assets. /

30 162. Tier-II capital consists of undisclosed reserves and cumulative perpetual preference shares. general provisions.loss reserves and revaluation reserves. subordinated debt. hybrid debt capital instruments. / 163. As per RBI stipulations the risk weighted assets ratio of 8% was to be achieved as early possible and in any case by 31st March 1995 for those banks which have branches abroad. 31st March 1996 for foreign Banks. 31st March 1996 for all other Banks. / 164. RBI during July 1996 laid down strict prudential norms for those banks that failed to attain the 8% capital adequacy target before 31st March One of the major conditions as a measure of prudence is complete curb on capital expenditure. complete ban on fresh recruitment. Strict control over further growth in risk weighed assets. / complete ban on fresh recruitment Banks that fail to fulfill the minimum requirements will have to face the implications of foreign banks refusing to honour letter of credits issued by them. not be able to attract funds from the Psus as the Department of Public. Enterprises has forbidden them to place funds in banks that do not achieve the prudential norms. Either (a) or (b)./ Both (a) and (b). / Either (a) or (b) What do you mean by the money market? A place where money is sold and bought. It is nothing but a place where two currencies are exchanged. Money market is a market for short terms financial assets (generally upto the tenure of 12 months) that are close substitutes of money. Money market is a market for short terms financial assets (generally upto the tenure of 12 months) that are close substitutes of money.

31 167. Money market consists of Treasury Bill Market./ Commercial Bill Market. Call Money Market./ (a) and (b). Call Money Market Who are the major players in the call money markets? Banks./ Insurance companies. Development Financial Institutions. Selected Mutual Funds./ Development Financial Institutions What is the limit for funds to be transacted in call money market? One day./ Twelve hours. Morning 6 O'clock to Evening 6 O'clock. Over night basis./ (Two days. Over night basis Under Notice money market, funds are transacted for the period ranging ; 1 day to 3 days./ 2 days to 14 days./ 15 days to 45 days. No such limit./ Any period upto 90 days. 2 days to 14 days Treasury Bill means a bill drawn on a treasury. an instrument is used by the Central Government for short-term borrowing. a bill drawn by any authority by sitting in treasury office. a bill drawn by Member of Parliament./ an instrument is used by the Central Government for short-term borrowing Treasury Bill is Negotiable security./ non-negotiable security. no security at all./ quasi negotiable security. None of the above Negotiable security.

32 173. Who issues treasury bills? Reserve Bank of India, as the agent of the Central Government. Any govt, deptt, of State and Central./ Any Commercial Bank. / Reserve Bank of India, as the agent of the Central Government The treasury bills are issued at a Discount./ Premium./ Both (a) and (b)./ Face value. None of these. / Discount Who can acquire the treasury bills? Public./ State government./ Scheduled Commercial Banks. All (a) to (b)./ (a) and (b) above. Scheduled Commercial Banks Which are the various instruments in the Indian Money Market? Call money and short notice money instrument. Inter bank term deposits/loans. Treasury Bills./ Commercial Bills. / Treasury Bills Certificate of deposit refers to a certificate issued by Reserve Bank of India, stating the amount of deposit held by a bank. a certificate issued by Regional Rural Bank of its depositors. a negotiable money market instrument, issued in dematerialized form or as a usance promissory note, for funds deposited at a bank or other eligible financial institution for a specific time period. a negotiable money market instrument, issued in dematerialized form or as a usance promissory note, for funds deposited at a bank or other eligible financial institution for a specific time period How much is the minimum amount for issuance of certificate of deposit?

33 It should not be less than Rs. 1 lakh and in multiples of Rs. 1 lakh thereafter. Rupees 1 crore and in multiples of Rs. 10 lakh, thereafter. Rupees 10 lakh. No minimum stipulated answer. No minimum stipulated answer Certificate of deposit can be subscribed by Individuals./ (a) and (b)./ Trusts, funds, associations etc. Trusts, funds, associations etc Certificate of deposit is issued for a period of 15 days to 12 months./ Over night. 15 days to 240 months./ 60 months. 36 months. 15 days to 12 months In terms of present directives a bank can issue Certificate of Deposit upto 25% of its deposit base. banks are free to issue Certificate of Deposits for any amount, as per their requirement. prior permission for Reserve Bank of India is required to issue Certificate of Deposits. None of the above banks are free to issue Certificate of Deposits for any amount, as per their requirement What is a Financial system? Financial System means a mechanism in an economy to mobilize the monetary resourcescapital from various surplus sectors of the economy and to allocate and distribute the same to various needy sectors. A system to access the demand and supply of the finance. An arrangement to finance the farmers of the country. A system to put financial management on the borrowers of the schedule commercial banks of the country. None of these. Financial System means a mechanism in an economy to mobilize the monetary resourcescapital from various surplus sectors of the economy and to allocate and distribute the same to various needy sectors Financial system consists of two broad categories, normally Scheduled and non-scheduled commercial banks. Public sector and private sector banks. Organised sector and unorganised sector.

34 Reserve Bank of India and Govt. of India. None of these. Organised sector and unorganised sector Organised sector refers to Nationalised banks, and private sector banks. Regional Rural Banks, Co-operative Banks and Development Banks Both (a) and (b). None of these. All of these. Both (a) and (b) Unorganised sector includes Money lenders, indigenous bankers. Power brokers, traders etc. Non-banking financial companies which do not fulfill the criteria notified by the Reserve Bank of India. All of above. None of above. All of above Central Monetary Authority of India is Govt. of India. Ministry of Finance. Reserve Bank of India. Planning Commission./ Central bank of India. None of above. Reserve Bank of India Commercial Banking System means Scheduled and Non-scheduled Banks. Private Sector and Public Sector Banks. Both (a) and (b) Regional Rural Banks, Co-operative Banks and NBFC's None of these. Both (a) and (b) 188. At present, there are... nationalised banks in India. 14./ 20/ 19/ 27/ 28 19