Banking Awareness Quiz - 1

SEBI, which stands for the Securities and Exchange Board of India, is responsible for regulating the dealings of the share market. This includes monitoring and supervising the activities of intermediaries such as stockbrokers and merchant bankers, as well as ensuring fair and transparent trading practices. SEBI also aims to prevent any foul dealings or fraudulent activities in the share market, protecting the interests of investors. Additionally, SEBI works towards controlling insider trading, which refers to the buying or selling of shares based on non-public information. Therefore, the correct answer is "All of the above" as SEBI's working encompasses all these aspects.

The Prime Lending Rate (PLR) is not fixed by the Reserve Bank of India (RBI). The PLR is the interest rate at which commercial banks lend to their most creditworthy borrowers. It is determined by individual banks based on various factors such as their cost of funds, risk assessment, and market conditions. Unlike the Statutory Liquidity Ratio (SLR), Cash Reserve Ratio (CRR), and Repo Rate, which are directly regulated and fixed by the RBI, the PLR is set by individual banks to reflect their own lending policies and strategies.

The Ministry of Railway has decided to accept credit cards issued by a bank as proof of identity for traveling on e-tickets. This means that passengers can use their credit cards as a valid form of identification when traveling on e-tickets. This decision is likely made to provide more convenience for passengers and to ensure that their identity can be verified easily during their journey.

The correct answer is IDBI Federal Life Insurance Company Ltd. This is because the question is asking for the new name of the insurance company "IDBI Fortis Life Insurance Company Ltd." and the correct answer provides the updated name.

Transport is not included in the core sectors of the Indian economy. The core sectors of the Indian economy consist of industries that are crucial for economic growth and development, such as coal, steel, and cement. However, transport is considered a supporting sector that facilitates the movement of goods and people, but it is not a core sector in itself.

SLR (Statutory Liquidity Ratio) is maintained for multiple reasons. Firstly, it helps in controlling the expansion of bank credit by mandating banks to maintain a certain percentage of their net demand and time liabilities in the form of liquid assets like cash, gold, or government securities. This ensures that banks do not lend excessively, preventing the economy from overheating. Secondly, maintaining SLR ensures the solvency of banks by creating a buffer of liquid assets that can be used to meet any unexpected liquidity demands. Lastly, SLR compels banks to invest a portion of their funds in government securities, which helps in financing government expenditures and managing public debt.

Capital share being 50% by the central government, 15% by the state government and 35% by the scheduled bank

According to the new guidelines, the tax that is now abolished is the Fringe Benefit tax and the Commodity Transaction tax.

RBI Directives is a selective credit control method because it refers to the directives issued by the Reserve Bank of India to commercial banks regarding their lending and investment activities. These directives are aimed at controlling and regulating the flow of credit in the economy. By issuing specific instructions and guidelines, the RBI can selectively control the credit flow to certain sectors or industries, thereby influencing the overall credit availability and credit conditions in the economy.

Borrowing from RBI is an asset for a commercial bank because it increases the bank's liquidity and allows it to meet its short-term funding needs. When a commercial bank borrows from the RBI, it can access additional funds to lend to its customers or invest in other income-generating assets. This borrowing also indicates that the bank is able to maintain a good credit standing with the central bank, which enhances its reputation and ability to attract deposits and other sources of funding.