N.Rangarajan's Model Online Test - Latest In Indian Banking

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  • 1/35 Questions

    From April 1, 2010, scheduled commercial banks would calculate payment of interest on savings bank accounts on a _____ product basis.

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N.Rangarajan
About This Quiz

This test is based on latest developments in Banking in�India between Jan 2009 to April 2010 based on the regulatory guidelines (RBI) The basic reference material is the Monthly Credit Information Review Published by Reserve Bank of India and available in their website.

The Test is designed with a view to help aspiring promotees of Indian Public Sector Banks from clerical to Officer cadre as well as for grade promotion exams for the officers.

The Test template is identical to the one adopted by IBPS for their online tests.

This Test will be useful as a practice test for such Banking Personnel from India.

�Errors and mistakes that might have crept in by oversight, may please be excused.

Please take Quiz Password by e Mailing to rajatvk@indiatimesmail. Com your full particulars like Name,Age,Place of Work/Study,Designation/Course,Phone/Mobile No and Address

With Best Wishes,


N. Rangarajan
Senior Manager of a Public Sector Bank
@
Tiruchirappalli,Tamilnadu

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  • 2. 

    In ATM Transactions,where account is debited but cash not dispensed,the amount should be reimbursed within ________ days

    Explanation
    The correct answer is 12, twelve. In ATM transactions, if the account is debited but cash is not dispensed, the amount should be reimbursed within 12 days. This ensures that customers do not face any inconvenience or loss of funds due to technical errors or machine malfunctions. Prompt reimbursement is essential to maintain customer satisfaction and trust in the banking system.

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  • 3. 

    Identify the  Financial Inclusion Initiatives of Reserve Bank

    • No Frill Accounts

    • General Purpose Credit Card

    • Smart Card with Biometric solutions

    • Appointment of Business Facilitators and Correspondents

    • All the above

    Correct Answer
    A. All the above
    Explanation
    The correct answer is "All the above." All of the options listed - No Frill Accounts, General Purpose Credit Card, Smart Card with Biometric solutions, and Appointment of Business Facilitators and Correspondents - are examples of financial inclusion initiatives of the Reserve Bank. These initiatives aim to provide access to financial services to all individuals, especially those who are unbanked or underbanked, and promote inclusive growth in the economy.

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  • 4. 

    The Deposit Insurance and Credit Guarantee Corporation Act, 1961 grants protection to depositors of all commercial banks (including regional rural banks and co­operative banks) which are registered as insured banks. Each depositor of an insured bank which goes in liquidation is entitled to receive from the Corporation, an amount of _________________

    • Rs.1,00,000

    • Rs 2,00,000

    • Rs 5,00,000

    • Rs 10,00,000

    • None of the above

    Correct Answer
    A. Rs.1,00,000
    Explanation
    The correct answer is Rs.1,00,000. The Deposit Insurance and Credit Guarantee Corporation Act, 1961 provides protection to depositors in case of bank liquidation. Each depositor of an insured bank is entitled to receive up to Rs.1,00,000 from the Corporation. This means that if a bank goes into liquidation, depositors will be compensated up to Rs.1,00,000 for their deposits.

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  • 5. 

    What is FLCC?

    • Financial Literacy and Credit Counselling

    • Financial Leverage and Credit Control

    • Financial Legacy Coverage Concept

    • Factoring Liquidity to Core Credit

    • Fiduciary Line of Customers Credit

    Correct Answer
    A. Financial Literacy and Credit Counselling
    Explanation
    FLCC stands for Financial Literacy and Credit Counselling. This term refers to a program or service that aims to educate individuals about financial matters and provide guidance on credit management. It helps individuals understand concepts such as budgeting, saving, investing, and debt management. Credit counselling involves providing advice and assistance to individuals who are struggling with debt, helping them develop a plan to repay their debts and improve their financial situation.

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  • 6. 

    What is the additional security architecture prescribed by RBI for online debit/credit card transactions?

    • Verified by Visa

    • A system of providing for additional authentication/ validation based on information not visible on the cards for all on-line ‘card not present’ transactions except interactive voice recognition (IVR) transactions

    • A system of ';Online Alerts'; to the cardholder for all 'card not present' transactions of the value of Rs. 5,000 and above

    • Verisign Certification/Appending Digital signature

    • B & C above

    Correct Answer
    A. B & C above
    Explanation
    The additional security architecture prescribed by RBI for online debit/credit card transactions includes two measures: Verified by Visa, which provides additional authentication/validation based on information not visible on the cards for all online 'card not present' transactions except IVR transactions, and a system of 'Online Alerts' to the cardholder for all 'card not present' transactions of the value of Rs. 5,000 and above. These measures aim to enhance the security of online transactions and protect cardholders from fraudulent activities.

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  • 7. 

    What are the latest KYC guidelines in respect of New Accounts opened for Proprietary concern?

    • Proof of the name, address and activity of the concern, like registration certificate (in the case of a registered concern), certificate/licence issued by the municipal authorities under the shops and establishment act, sales and income tax returns, central sales tax/value added tax certificate, certificate/registration document issued by sales tax/service tax/professional tax authorities, licence issued by the registering authority like certificate of practice issued by Institute of Chartered Accountants of India, Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Medical Council, Food and Drug Control Authorities, etc

    • Any two of the above documents in (A) would suffice. These documents should be in the name of the proprietary concern.

    • A & B above

    • As per existing practice only

    • In addition to KYC of te firm,the KYC of Individual Proprietor should be complied with

    Correct Answer
    A. A & B above
    Explanation
    The correct answer is A & B above because the latest KYC guidelines for new accounts opened for a proprietary concern require proof of the name, address, and activity of the concern. This can be provided through documents such as a registration certificate, certificate/license issued by municipal authorities, sales and income tax returns, and various other certificates/registration documents issued by relevant authorities. Two of these documents are required, and they should be in the name of the proprietary concern. The options "As per existing practice only" and "In addition to KYC of the firm, the KYC of Individual Proprietor should be complied with" do not accurately reflect the latest KYC guidelines for new accounts opened for a proprietary concern.

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  • 8. 

    How many types of Pre Paid Instruments are at present permitted?

    • Semi-closed system payment Instruments up to Rs 1000

    • Pre-paid payment instruments up to Rs 5000

    • No Classification/No Ceiling

    • A & B above

    • None of the above.

    Correct Answer
    A. A & B above
    Explanation
    The correct answer is A & B above. This means that both semi-closed system payment instruments up to Rs 1000 and pre-paid payment instruments up to Rs 5000 are currently permitted. This implies that there are two types of pre-paid instruments allowed at present.

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  • 9. 

    The Reserve Bank has introduced/advised Banks to switch over to a new type of Pricing Mechanism on aasset products of commercial Banks

    • Administered Rates

    • PLR

    • BPLR

    • LIBOR/SIBOR

    • Base Rate

    Correct Answer
    A. Base Rate
    Explanation
    The Reserve Bank has introduced/advised banks to switch over to a new type of pricing mechanism called the Base Rate on asset products of commercial banks. The Base Rate is the minimum rate at which banks can lend to their customers. It is determined by factors such as the cost of funds, operating expenses, and the required profit margin. This new mechanism aims to make lending rates more transparent and fair for customers, as it eliminates the discretion of banks in setting lending rates based on their prime lending rate (PLR) or benchmark prime lending rate (BPLR).

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  • 10. 

    The ceiling amount of loan under Short Term agricultural interest subvention is

    • Rs 1 lac

    • Rs 1.50 lacs

    • Rs 2.00 lacs

    • Rs 2.50 lacs

    • Rs 3.00 lacs

    Correct Answer
    A. Rs 3.00 lacs
    Explanation
    The ceiling amount of loan under Short Term agricultural interest subvention is Rs 3.00 lacs. This means that the maximum amount of loan that can be availed under this scheme is Rs 3.00 lacs.

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  • 11. 

    What is FSF?

    • Factoring Services Force

    • Final Systems Figure

    • Fractional Segregation Finance

    • Financial Stability Forum

    • Futuristic Services Finance

    Correct Answer
    A. Financial Stability Forum
    Explanation
    The correct answer is Financial Stability Forum. The Financial Stability Forum (FSF) is an international organization that was established in 1999 to promote global financial stability. It brings together central banks, finance ministries, and international financial institutions to discuss and coordinate policies related to financial stability. The FSF plays a crucial role in monitoring and addressing potential risks to the global financial system, and it has been instrumental in shaping regulatory reforms in the aftermath of the 2008 financial crisis.

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  • 12. 

    Say " True" or "False"" The permission/license of Reserve Bank of India is required to install Off Site ATMs.

    • True

    • False

    Correct Answer
    A. False
    Explanation
    The permission/license of Reserve Bank of India is not required to install Off Site ATMs. This means that anyone can install Off Site ATMs without needing authorization from the Reserve Bank of India.

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  • 13. 

    What is the prescribed validity period of a prepaid instrument?

    • 6 Months from the date of activation/issuance to the holder

    • 12 months

    • 18 months

    • 24 months

    • None of the above

    Correct Answer
    A. 6 Months from the date of activation/issuance to the holder
    Explanation
    The prescribed validity period of a prepaid instrument is 6 months from the date of activation/issuance to the holder. This means that the prepaid instrument, such as a gift card or prepaid debit card, can be used within 6 months from the time it is activated or issued to the holder. After this period, the instrument may expire and become invalid for use.

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  • 14. 

    The current Bank rate is (as on 01.05.2010)

    • 3%

    • 4%

    • 5%

    • 6%

    • 10%

    Correct Answer
    A. 6%
    Explanation
    The current bank rate as of 01.05.2010 is 6%. This means that the rate at which the central bank lends money to commercial banks is 6%. This rate is used to control inflation and stimulate economic growth. By increasing the bank rate, the central bank makes borrowing more expensive, which reduces the money supply and helps to control inflation. Conversely, by decreasing the bank rate, the central bank makes borrowing cheaper, which encourages borrowing and spending, thus stimulating economic growth.

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  • 15. 

    Who will be permitted to issue Pre Paid Instruments by Reserve Bank of India?

    • Banks which comply with the eligibility criteria would be permitted to issue all categories of pre-paid payment instruments.

    • Non-banking financial companies (NBFCs) and other persons would be permitted to issue only semi-closed system payment instruments.

    • Only banks which have been permitted to provide mobile banking transactions by the Reserve Bank would be permitted to launch mobile based pre-paid payment instruments (mobile wallets and mobile accounts)

    • Banks and NBFCs which comply with the capital adequacy requirements prescribed by the Reserve Bank, would be permitted to issue pre-paid payment instruments. All other persons should have a minimum paid-up capital of Rs 100 lakh and positive net owned funds

    • All the above

    Correct Answer
    A. All the above
    Explanation
    All the above options are correct because the Reserve Bank of India permits banks, non-banking financial companies (NBFCs), and other persons to issue different categories of pre-paid payment instruments based on their compliance with eligibility criteria, capital adequacy requirements, and permission to provide mobile banking transactions. Therefore, all of these entities can be permitted to issue pre-paid payment instruments according to the Reserve Bank of India.

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  • 16. 

    What is the amximum time upto which RTGS transactions for customers can be conducted from Monday to Friday?

    • 16.30 hrs

    • 15.30 hrs

    • 14.30 hrs

    • 16.00 hrs

    • None of the above

    Correct Answer
    A. 16.30 hrs
    Explanation
    RTGS stands for Real Time Gross Settlement, which is a system used for transferring funds between banks. The question asks for the maximum time up to which RTGS transactions can be conducted from Monday to Friday. The correct answer is 16.30 hrs, which means that RTGS transactions can be conducted until 4:30 PM. This indicates that after this time, RTGS transactions cannot be processed on weekdays.

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  • 17. 

    Savings as well as  current account should be treated as inoperative/dormant if there are no transactions in the account for a period over ____ years.

    • One

    • Two

    • Three

    • Four

    • Five

    Correct Answer
    A. Two
    Explanation
    If there are no transactions in a savings or current account for a period of two years, the account should be treated as inoperative or dormant. This means that the account is not being actively used or accessed by the account holder. The bank may restrict certain activities on the account, such as withdrawals or transfers, until the account is reactivated by the account holder.

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  • 18. 

    What is the tenor of Cash Management Bills?

    • 91 days

    • Less than 91 days

    • 90 days

    • 60 days

    • 30 days

    Correct Answer
    A. Less than 91 days
    Explanation
    Cash Management Bills have a tenor that is less than 91 days. This means that they have a maturity period of less than 91 days, typically ranging from a few days to a few months. These bills are short-term instruments issued by the government to manage its cash flow and meet short-term funding requirements. They are considered highly liquid and low-risk investments, making them attractive to investors looking for short-term options.

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  • 19. 

    Which of the following is not the objective of FLCC?

    • Provide financial counselling services through face-to-face interaction as well as through other available media like e-mail, fax, mobile, etc., education on responsible borrowing, proactive and early savings, and offer debt counselling to individuals who are indebted to formal and/ or informal financial sectors

    • Arrange for debt swap and loan takeover

    • Educate people in rural and urban areas regarding the various financial products and services available from the formal financial sector

    • Formulate debt restructuring plans for borrowers in distress and recommend them to formal financial institutions, including cooperatives, for consideration

    • Take up any such activity that promotes financial literacy, awareness of banking services, financial planning and amelioration of debt-related distress of individuals

    Correct Answer
    A. Arrange for debt swap and loan takeover
    Explanation
    The objective of FLCC is to provide financial counseling services, educate people about financial products and services, formulate debt restructuring plans, and promote financial literacy and awareness. However, arranging for debt swap and loan takeover is not mentioned as one of the objectives of FLCC.

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  • 20. 

    The definition of Commercial Real Estate (CRE) by Resrve Bank of India is closely aligned to ________  ___ guidelines

    Correct Answer
    BASEL II
    Explanation
    The definition of Commercial Real Estate (CRE) by Reserve Bank of India is closely aligned to BASEL II guidelines. This means that the definition of CRE used by the Reserve Bank of India is in accordance with the guidelines set forth by BASEL II. BASEL II is a set of international banking regulations that provide guidelines for banks to assess and manage their risks. By aligning the definition of CRE with BASEL II guidelines, the Reserve Bank of India ensures that banks in India follow standardized practices in assessing and managing risks associated with commercial real estate.

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  • 21. 

    Interest Subvention Scheme for Short-term Crop Loans to farmers is available on

    • Production Credit

    • Investment Credit

    • A & B above

    • Agri Project Credit

    • Non Fund Based facilities to Agriculturist

    Correct Answer
    A. Production Credit
    Explanation
    The correct answer is Production Credit. The Interest Subvention Scheme for Short-term Crop Loans is specifically available on Production Credit, which refers to the credit provided to farmers for meeting their production-related expenses such as purchase of seeds, fertilizers, pesticides, etc. This scheme aims to provide financial assistance to farmers by reducing the interest burden on their crop loans, thereby promoting agricultural activities and ensuring food security.

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  • 22. 

    Say " True" or "False""More than one active instrument under Semi Closed System Payment Instrument" can be issued to the same holder by the same issuer.

    • True

    • False

    • Partly True

    • Partly False

    Correct Answer
    A. False
    Explanation
    False. According to the given statement, it is not possible to issue more than one active instrument under the Semi Closed System Payment Instrument to the same holder by the same issuer.

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  • 23. 

    The subordinated debt as Tier II capital can now be issued by Schdeuled Commercial Banks to shore up their capital adequacy with special features such as

    • Call Option

    • Step Up Option

    • Put Option

    • A & B above

    • A & C above

    Correct Answer
    A. A & B above
    Explanation
    Scheduled Commercial Banks can issue subordinated debt as Tier II capital with special features such as a Call Option and a Step Up Option. A Call Option allows the bank to redeem the debt before its maturity date, providing flexibility in managing their capital. A Step Up Option allows the interest rate on the debt to increase over time, incentivizing investors to hold the debt for longer periods. These features help banks strengthen their capital adequacy by providing additional capital and flexibility in managing their financial obligations.

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  • 24. 

    The provisioning requirement for advances to the CRE sector classified as ‘standard assets’ has been increased from ___ per cent to ___ per cent

    • 0.25 , 1.00

    • 0.25 , 0.40

    • 0.40 , 0.50

    • 0.40, 1.00

    • 1.00 to 2.00

    Correct Answer
    A. 0.40, 1.00
    Explanation
    The correct answer is 0.40, 1.00. The provisioning requirement for advances to the CRE sector classified as 'standard assets' has been increased from 0.40% to 1.00%. This means that banks and financial institutions are now required to set aside a higher percentage of their total advances to the commercial real estate sector as a provision for potential losses. This increase in provisioning requirement indicates a higher level of risk associated with lending to the CRE sector and aims to ensure that banks have adequate buffers to absorb any potential losses.

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  • 25. 

    What is the maximum period for which Bank Guarantees can be issued

    • 3 years

    • 5 Years

    • 7 Years

    • 10 Years

    • No Ceiling at present.

    Correct Answer
    A. No Ceiling at present.
    Explanation
    Bank Guarantees can be issued for an indefinite period of time, as there is currently no maximum limit set. This means that banks can provide guarantees for any duration as per the requirements of the parties involved.

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  • 26. 

    What is the new short term instrument issued by Government of India to meet the temporary cash flow mismatches of the Government?

    • Cash Management Bills

    • Tresury Bills

    • Dated Securities

    • Indian Depository Receipts

    • Gilt Edged Securities

    Correct Answer
    A. Cash Management Bills
    Explanation
    Cash Management Bills are a new short-term instrument issued by the Government of India to address temporary cash flow mismatches. These bills are used to manage the government's liquidity requirements and are typically issued for a duration of 91 days. They help the government bridge any gaps in its cash flow by raising funds from the market. Cash Management Bills are considered a safe investment option as they are backed by the government and provide a low-risk avenue for investors.

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  • 27. 

    What is the cash withdrawal per day permitted by RBI for all debit cards issued in India @ Point of Sale (POS) terminals?

    • Rs 500

    • Rs 1000

    • Rs 2500

    • Rs 5000

    • Rs 250

    Correct Answer
    A. Rs 1000
    Explanation
    The cash withdrawal per day permitted by RBI for all debit cards issued in India at Point of Sale (POS) terminals is Rs 1000. This means that individuals can withdraw up to Rs 1000 in cash per day using their debit cards at POS terminals.

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  • 28. 

    What is the maximum time limit for Inter Bank Transactions on Saturday?

    • 13.00 hrs

    • 15.00 hrs

    • 16.00 hrs

    • 16.30 hrs

    • 18.00 hrs

    Correct Answer
    A. 15.00 hrs
    Explanation
    The maximum time limit for Inter Bank Transactions on Saturday is 15.00 hrs.

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  • 29. 

    What is the one more sector for which interest subvention is allowed upto 31.03.2010?

    • MSME Sector

    • Rupee Export Credit

    • Infrastructure Sector

    • CRE

    • Housing

    Correct Answer
    A. Rupee Export Credit
    Explanation
    Interest subvention is a financial incentive provided by the government to promote certain sectors or activities. In this case, the question is asking for the sector for which interest subvention is allowed until a specific date. The correct answer, "Rupee Export Credit," suggests that the government provides interest subvention for loans taken by exporters in the rupee currency. This incentive aims to make export credit more affordable and encourages businesses to engage in export activities.

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  • 30. 

    When the holder of pre paid instrument will forfeit his unutilised amount?

    • Automatically a reloaded new instrument will be issued

    • On the date of expiry of validity

    • If the holder is cautioned at least 15 days in advance regarding the expiry of the validity.

    • None of the above

    • If the holder is repeatedly cautioned at least 30 days in advance regarding the expiry of the validity.

    Correct Answer
    A. If the holder is cautioned at least 15 days in advance regarding the expiry of the validity.
    Explanation
    If the holder is cautioned at least 15 days in advance regarding the expiry of the validity, the unutilized amount of the prepaid instrument will be forfeited. This means that if the holder does not utilize the remaining balance within the specified period after receiving the caution, the amount will be forfeited and no longer available for use.

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  • 31. 

    If it is only for payment of utility Bills, what is the maximum value upto which Semi-closed system payment instruments can be issued?

    • 1000

    • 5000

    • 10000

    • 50000

    • No Limit

    Correct Answer
    A. 10000
    Explanation
    Semi-closed system payment instruments are a type of prepaid payment instruments that can be used for the purchase of goods and services, including payment of utility bills. The maximum value up to which these instruments can be issued is 10000. This means that individuals can load up to 10000 in these instruments for their utility bill payments.

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  • 32. 

    What is the Time Schedule for Advanced Approaches of Basel II Framework under Standardised Approach for operational risk?

    • March 31, 2011

    • April 1, 2012

    • March 31, 2014

    • September 30, 2010

    • None of the above

    Correct Answer
    A. September 30, 2010
    Explanation
    The correct answer is September 30, 2010. This date represents the time schedule for the Advanced Approaches of the Basel II Framework under the Standardised Approach for operational risk.

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  • 33. 

    Cash withdrawal _______  ____  ___   ___________________ under Pre-paid payment instruments up to Rs 5000

    Correct Answer
    should not be permitted
    will not be permitted
    can not be permitted
    Explanation
    The correct answer is "Cash withdrawal should not be permitted, will not be permitted, can not be permitted." This means that according to the given statement, cash withdrawal is not allowed or permitted under Pre-paid payment instruments up to Rs 5000.

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  • 34. 

    Loans granted by banks for retail trade [i.e., advances granted to retail traders dealing in essential commodities (fair price shops), consumer co­operative stores and advances granted to private retail traders with credit limits not exceeding Rs. 20 lakh] would henceforth be part of the ______   _______ _____________ .

    Correct Answer
    small service enterprises
    Explanation
    Loans granted by banks for retail trade, specifically to retail traders dealing in essential commodities and consumer co-operative stores, as well as advances granted to private retail traders with credit limits not exceeding Rs. 20 lakh, would now be classified as part of the small service enterprises category.

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  • 35. 

    The nominee’s name in the pass book/statement of accounts/fixed deposit receipt, in case the customer is _____________ to the same, as this would be helpful to the customers/nominees

    Correct Answer
    agreeable
    Agreeable
    Explanation
    The nominee's name in the pass book/statement of accounts/fixed deposit receipt should be agreeable to the customer. This means that the customer and the nominee have reached an agreement or consensus regarding the nomination. Having an agreeable nominee ensures that there are no disputes or conflicts in the future and that the nominee is willing to fulfill their responsibilities.

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