MCQ on Money and Banking Quiz: 3

MCQ on Money and Banking

Question 1: In the context of Indian economy, ‘Open Market Operations’ refers to ____________.

(A) borrowing by scheduled banks from the RBI

(B) lending by commercial banks to industry and trade

(C) purchases and sale of government securities by the RBI

(D) None of the above

View Answer

(C) purchases and sale of government securities by the RBI

Question 2: Priority Sector lending by banks in India constitutes the lending to ____________.

(A) Agriculture

(B) Micro and small enterprises

(C) Weaker sections

(D) All of the above

View Answer

(D) All of the above

Question 3: Which of the following grants/ grant direct credit assistance to rural households?

  1. Regional Rural Banks
  2. National Bank for Agriculture and Rural Development
  3. Land Development Banks

Select the correct answer using the codes given below.

(A) 1 and 2

(B) Only 2

(C) 1 and 3

(D) All of these

View Answer

(C) 1 and 3

Question 4:When was the first Regional Rural Bank formed?

(A) 1977

(B) 1976

(C) 1974

(D) 1975

View Answer

(D) 1975

Question 5: Land Development Bank provides loan to farmers for ____________.

(A) short term

(B) medium term

(C) long term

(D) only for land improvement

View Answer

(C) long term

Question 6: With reference to the Non-banking Financial Companies (NBFCs) in India. Consider the following
statements.

  1. They cannot engage in the acquisition of securities issued by the government.
  2. They cannot accept demand deposits like Saving Accounts.

Which of the statement(s) given above is/are correct?

(A) Only 1

(B) Only 2

(C) Both 1 and 2

(D) Neither 1 nor 2

View Answer

(B) Only 2

Question 7: With reference to India, consider the following.

  1. Nationalisation of Banks.
  2. Formation of Regional Rural Banks.
  3. Adoption of villages by Banks Branches.

Which of the above can be considered as steps taken to achieve the ‘financial inclusion’ in India?

(A) 1 and 2

(B) 2 and 3

(C) Only 3

(D) 1, 2 and 3

View Answer

(D) 1, 2 and 3

Question 8: Why is the offering of ‘teaser loans’ by commercial banks is a cause of economic concern?

  1. The ‘teaser loans’ are considered to be an aspect of sub-prime lending and banks may be exposed to the risk of defaulters in future.
  2. In India, the ‘teaser loans’ are mostly given to entrepreneurs to set-up manufacturing or export units.

Which of the statement(s) given above is/are correct?

(A) Only 1

(B) Only 2

(C) Both 1 and 2

(D) Neither 1 nor 2

View Answer

(A) Only 1

Question 9: The largest commercial bank of India is __________.

(A) NABARD

(B) State Bank of India

(C) ICICI

(D) Union Bank of India

View Answer

(B) State Bank of India

Question 10: In which year did the Government of India Nationalised 14 major private banks?

(A) 1968

(B) 1970

(C) 1969

(D) 1965

View Answer

(C) 1969

Question 11: Reserve Bank of India issues currency notes against which of the following? 

(A) Gold

(B) Foreign security

(C) Govt. of India Security

(D) All of the above

View Answer

(D) All of the above

Question 12: The decimal system was made applicable to Indian currency system in which year?

(A) 1947

(B) 1957

(C) 1935

(D) 1949

View Answer

(B) 1957

Question 13: Consider the following.

  1. Industrial Finance Corporation of India (IFCI)
  2. Industrial Credit and Investment Corporation of India (ICICI)
  3. Industrial Development Bank of India (IDBI)
  4. Unit Trust of India (UTI)

The correct sequence in which the above were established is _________.

(A) 1, 2, 3, 4

(B) 1, 3, 2, 4

(C) 4, 3, 2, 1

(D) 1, 4, 3, 2

View Answer

(D) 1, 4, 3, 2

Question 14: Devaluation of currency means ___________.

(A) reduction in the value of the currency vis-a-vis major internationally traded currencies

(B) permitting a currency to seek its worth in the international market

(C) fixing the value of currency with the help of IMF and WB

(D) None of the above

View Answer

(A) reduction in the value of the currency vis-a-vis major internationally traded currencies

Question 15: Provident Fund in India is __________.

(A) Contractual Savings

(B) Residual Savings

(C) Voluntary Savings

(D) Employer’s Savings

View Answer

(A) Contractual Savings

Question 16: Which one of the following statements about foreign exchange reserves of India is not true?

(A) It includes foreign currency assets and gold holdings of Reserve Bank of India

(B) It is maintained with the Reserve Bank of India

(C) Special drawing rights are not included in it

(D) Presently foreign exchange situation is satisfactory in India

View Answer

(C) Special drawing rights are not included in it

Question 17: Rural Infrastructure Development Fund is being financed by _________.

(A) NABARD

(B) Reserve Bank of India

(C) Ministry of Rural Development

(D) Selected group of Public Sector Banks

View Answer

(A) NABARD

Question 18: Who maintains the foreign exchange reserve in India?

(A) Reserve Bank of India

(B) State Bank of India

(C) Ministry of Finance, Government of India

(D) Export-Import Bank of India

View Answer

(A) Reserve Bank of India

Question 19: FEMA (Foreign Exchange Management Act) was finally implemented in the year _________.

(A) 1991

(B) 1997

(C) 2000

(D) 2007

View Answer

(C) 2000

Question 20: Which one of the following pairs is not correctly matched?

(A) Industrial Finance – SIDBI

(B) Social Security Measures – Bharat Nirman

(C) Rural Credit – NABARD

(D) Rural Employment – SJSRY

View Answer

(D) Rural Employment – SJSRY

Question 21: Which one of the following does not implement the Self-Help Groups (SHGs) – Bank Linkage Programme?

(A) NABARD

(B) Commercial Banks

(C) RRBs

(D) Co-operative Banks

View Answer

(B) Commercial Banks

Question 22: ‘Simply Click’ credit card scheme is launched by which of the following Banks? 

(A) IDBI

(B) ICICI

(C) BOB

(D) SBI

View Answer

(D) SBI

Question 23: In India, the first bank of limited liability managed by Indians and founded in 1881 was __________.

(A) Hindustan Commercial Bank

(B) Oudh Commercial Bank

(C) Punjab National Bank

(D) Punjab and Sind Bank

View Answer

(B) Oudh Commercial Bank

Question 24: Which one of the following statements is correct with reference of FEMA in India?

(A) The Foreign Exchange Management Act (FEMA) in the year 2001

(B) FERA was given a sunset clause of one year till 31st May, 2002 to enable enforcement directorate to complete the investigation of pending issues

(C) Under FEMA, violation of foreign exchange rules has ceased to be a criminal offence

(D) As per the new dispensation, enforcement directorate can arrest and prosecute the people for the violation of foreign exchange rule

View Answer

(C) Under FEMA, violation of foreign exchange rules has ceased to be a criminal offence

Question 25: Consider the following statements.

  1. The National Housing Bank (NHB), the apex institution of housing finance in India was set-up as a wholly-owned subsidiary of the Reserve Bank of India.
  2. The Small Industries Development Bank of India was established as a wholly owned subsidiary of the Industrial
    Development Bank of India.

Which of the statement(s) given above is/are correct?

(A) Only 1

(B) Only 2

(C) Both 1 and 2

(D) Neither 1 nor 2

View Answer

(C) Both 1 and 2

Question 26: Consider the following statements.

  1. Reserve Bank of India was nationalised in the year 1949.
  2. The borrowing programme of the Government of India is handled by the Department of Expenditure, Ministry of Finance.

Which of the statement(s) given above is/are correct?

(A) Only 1

(B) Only 2

(C) Both 1 and 2

(D) Neither 1 nor 2

View Answer

(A) Only 1

Question 27: One of the important goals of the economic liberalisation policy is to achieve full convertibility of the Indian rupee. This is being advocated because ________.

(A) convertibility of the rupee will stabilise its exchange value against major currencies of the world

(B) it will attract more foreign capital inflow in India

(C) it will help promote exports

(D) it will help India secure loans from the world financial markets on attractive terms

View Answer

(B) it will attract more foreign capital inflow in India

Question 28:In India, rural incomes are generally lower than the urban incomes. Which of the following reasons account for this?

  1. A large number of farmers are illiterate and know little about scientific agriculture.
  2. Prices of primary products are lower than those of manufactured products.
  3. Investments in agriculture has been low when compared to investment in industry.

(A) 1, 2 and 3

(B) 1 and 2

(C) 1 and 3

(D) 2 and 3

View Answer

(A) 1, 2 and 3

Question 29: The accounting year of the Reserve Bank of India is __________.

(A) April – March

(B) July – June

(C) October – September

(D) January – December

View Answer

(B) July – June

Question 30: Consider the following statements.
The price of any currency in international market is decided by the

  1. World Bank
  2. Demand for goods/services provided by the country concerned.
  3. Stability of the government of the concerned country.
  4. Economic potential of the country in question of these statements.

Select the correct answer using the codes given below. 

(A) 1, 2, 3 and 4

(B) 2 and 3

(C) 3 and 4

(D) 1 and 4

View Answer

(B) 2 and 3