BANKING AWARENESS PRACTICE QUESTIONS - 2011

1. R.B.I. has introduced a new series of 'Star' bank note. And that will be issued in denominations of?
Ans: Rs. 10, Rs. 20, Rs. 50

2. From which organisation RBI has bought 200 tonnes of gold?
Ans: International Monitory Fund

3. In India which is the biggest commercial bank in public sector?
Ans: State bank of India

4. Differential rate of interest scheme was introduced in which year?
Ans: 1972

5. From which date banks were allowed free to fix base rates by RBI?
Ans: April 1, 2011

6. Foreign Direct Investment limit in private sector banks is?
Ans: 74 percent

7. Chairman of the parliamentary committee on agricultural finance and credit flow?
Ans: N. Janardhan Reddy

8. First chairman of the private sector banks association is?
Ans: P.N. Joshi

9. RBI introduced Banking Ombudsman scheme in which year?
Ans: 1995

10. The proportion of Non-Banking financial companies assets in the total assets of the financial system?
Ans: 11 percent

11. Under which Act Local area banks can be established by private promoters?
Ans: Company Act - 1956

12. The RBI (Amendment) Bill 2005 related to?
Ans: Provide operational flexibility to central bank to fix SLR and CRR for different banks

13. Who is the chairman of the working group constituted by RBI to provide suggestions on regulating loans to organised sector?
Ans: S.C. Gupta

14. Monetary policy is a policy adopted by?
Ans: Reserve Bank of India

15. At the liquidity trap which will be very low?
Ans: The rate of interest

16. Interest rate policy is a part of which policy?
Ans: Monetary policy

17. Which is not an instrument of monetary policy?
Ans: Import duty

18. Financial market department was set up in RBI in?
Ans: July, 2005

19. Dena bank was established in?
Ans: July 19, 1969

20. With which bank on September 4, 1993, new bank of India was merged?
Ans: Punjab National Bank

21. Number of deputy Governors in RBI?
Ans: Four

22. Ways and means Advances was in force since?
Ans: 1977, April 1

23. The main function of NABARD?
Ans: Provide refinancing facility

24. In which circumstance Dear money policy will be adopted by Reserve Bank of India?
Ans: Inflation

25. Through which instrument recently RBI has decided to buy upto 12000 crore of Govt. bonds?
Ans: Open market

26. Name of the organisation that was established by State Bank of India for buying and selling the Govt. securities?
Ans: SBI Gilts limited

27. Stagflation refers to?
Ans: Inflation with recession

28. Growth in M0 (Reserve money) during 2009-10 was?
Ans: 17 percent

29. Growth in M1 (Narrow money) during 2009-10 was?
Ans: 18.6 percent

30. Which committee recommended the measurements like M0, M1, M2 and M3?
Ans: Y.V. Reddy committee

31. Growth in M3 during 2009-10 was?
Ans: 16.8 percent.

32. Greshnam's law states?
Ans: Bad money drives good money out of circulation

33. Time deposits with banks are included in which measures of money stock?
Ans: M3 and M4

34. The RBI can increase the demand deposit component of the money supply by?
Ans: Lowering reserve requirements and increasing the volume of reserves

35. Financiary issue implies?
Ans: The issue of currency notes without metallic banking

36. Open market operations means sale or purchase in the open market of?
Ans: Government Securities

37. In an economy high-powered money is equal to?
Ans: Monetary liabilities of Central Bank and Government money

38. Saving deposits are not a part of money stock measure M1 because?
Ans: They are not used as medium of exchange

39. Which factor does not affect the balance sheet of Reserve Bank of India?
Ans: Loan taken by one commercial bank from the other

40. The most liquid of all assets is?
Ans: Money

41. If Reserve Bank of India raises the Cash Reserve Ratio then?
Ans: The value of money multiplier decreases

42. Other things being equal, an increase in the supply of money?
Ans: Lower nominal interest rate and raises aggregate demand

43. The function of World Bank (IBRD) is?
Ans: Promote growth of International trade and equilibrium

44. The supply of money consists of ?
Ans: Notes, Coins and Demand deposits

45. Banking companies (Acquisition and transfer of Undertaking) Act was passed in?
Ans: 1970

46. Fiat money is?
Ans: Which is accepted temporary in lieu of gold

47. A rise in the money supply will lead to?
Ans: A rise in the demand, A rise in price level and a fall in the interest rate

48. CAR refers to?
Ans: Capital Adequacy Ratio

49. International liquidity is regulated by?
Ans: International Monetary Fund

50. A 'Soft Currency' is a currency that?
Ans: Which can not be used for setting international transactions because it does not command a value in the international market

51. General currency area means those nations with which trade takes place in terms of?
Ans: Hard Currencies

52. Euro issue means?
Ans: Bonds, Shares etc issued by Indian firms in European Capital markets

53. Market stabilisation scheme is a scheme aimed at?
Ans: Stabilisation of money supply and price level in the country by absorbing excess liquidity

54. Head quarter of World Bank is located at?
Ans: Washington

55. New issues ratio is defined as?
Ans: Primary issues by non-financial sector or total physical asset formation

56. Central Banking Enquiry committee was set up in?
Ans: 1931

57. Social control on banks was imposed in?
Ans: 1967

58. Bank of Hindustan was established in?
Ans: 1770

59. Presidency bank Act came into existence in?
Ans: 1876

60. Punjab National Bank was setup in 1895 at?
Ans: Lahore

61. Bank of India was set up in?
Ans: 1906

62. US Federal Reserve was established in?
Ans: 1913

63. Agricultural Refinance Corporation of India was set up in?
Ans: 1963

64. District Credit Plans were initiated in?
Ans: 1973

65. The main function of the National Credit Council?
Ans: To assist the Reserve Bank of India and the Government to allocate credit according to plan priorities

66. Reason for announcement of Social control over banks?
Ans: To secure a better alignment of the banking system to the needs of economic policy

67. Differential Rate of interest scheme aims at?
Ans: To cater to the need of the weaker sections of the society and for their upliftment

68. The maximum rate for bank loans was prescribed in addition to the minimum lending rates in?
Ans: 1976

69. Health Code System introduced in 1985 aims at?
Ans: To Strong traning the banking system.

70. At present, How banks have to classify their advances?
Ans: Standard assets, sub-standard assets, doubtful assets and loss assets

71. To strength the capital base of banks which system was introduced for banks including foreign banks in India?
Ans: Capital to - risk - weighted assets ratio

72. A new foreign currency Non-Resident Deposits (Banks) scheme was introduced in?
Ans: 1993 April

73. Income recognition norms were tightened further from march 2004. As per those norms how an asset was classified as non-performing asset?
Ans: If the amount is remained unpaid for a period of 90 days instead of six months earlier

74. Securitisation and Reconstruction of financial Assets and Enforcement of security interest act was enacted in?
Ans: 2002

75. The maximum permissible bank finance was phased out from?
Ans: April 1997

76. The present Repo rate as on 8th of September 2011?
Ans: 8%

77. Allahabad bank was set up in?
Ans: 1865

78. Oriental Bank of commerce was nationalized on?
Ans: April 15, 1980

79. How many million notes are driven out of circulation every year in India is about?
Ans: 5 million

80. Modernised currency notes press are under establishment at?
Ans: mysore and salboni

81. Coins are minted at which places?
Ans: Mumbai, Kolkata, Hyderabad and Noida

82. RBI has decided to put into circulation coin of Rs. 5 and Rs. 2 with the theme of ?
Ans: XIX common wealth Games 2010 - Delhi

83. The small coins (Offences) Act was enacted in?
Ans: 1971

84. India millennium deposit scheme was launched by?
Ans: State Bank of India

85. Total number of bank branches of nationalized banks as on June 30, 2010?
Ans: 85,591

86. Current Authorisation scheme was introduced in?
Ans: 1965

87. A minimum lending rate was prescribed on all loans, except for the priority sector in?
Ans: 1973

88. Interest rate ceilings on NR & Deposits were linked to LIBOR/SWAP rates in?
Ans: July 2003

89. The evaluation of total operations and performance of the banks was under which system since July 1997?
Ans: CAMELS

90. The branch licensing policy for regional rural banks was rationalized in?
Ans: June 1995

91. The route of merger or amalgamation of RRB's was suggested by?
Ans: V.S.Vyas Committee

92. Expansionary monetary Policy coupled with a contraction of aggregate supply should?
Ans: Cause interest rates to fall in the short run

93. In an inflationary period, the appropriate policy for the Reserve Bank of India would be to?
Ans: Sell Government securities in the open market

94. Policy Initiatives of RBI during the contractionary policy and opted?
Ans: Increasing bank Rate, Increasing the CRR, Buying of Govt. Securities in the Open Market

95. If RBI wants to 'Sterilize' an inflow of foreign exchange, it should?
Ans: Sell Government securities in the Open market

96. An expansionary monetary and fiscal policy shifts?
Ans: Aggregate Demand to the right

97. A liquidity effect occurs under?
Ans: A money supply increase lowers the Rate of interest

98. A liquidity effect will normally result in an income effect because?
Ans: Lower interest rates will increase interest sensitive spending