Banking and Financial Institutions MCQ Questions and Solutions with Explanations

11

In case of Term Loans, the period of limitation is calculated as three years from:

A) Date of documents B) Date of sanction C) Date of default D) Due date of each installment

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Answer & Solution

Answer: Option D

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12

Identify the correct statement of the following

A) NABARD was set up in order to provide credit for the promotion of the activities like rural crafts and agriculture B) NABARD was set up in order to provide credit to poorer section of rural India C) NABARD was set up in order to assist banks specially meant to surve rural India D) All are correct

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Answer & Solution

Answer: Option D

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13

Consider the following statements.
Assertion (A): A well-developed money market is the basis for an effective monetary policy. It is in the money market that the Central Bank comes into contact with the financial sectors of the economy as a whole and it is through the liquidity in the market that influences the cost and availability of credit.
Reasoning (R): A well-organized money market is an essential condition for the successful operation of the Central Banking policies, and for holding the conditions of liquidity within the bounds of what the monetary authorities consider desirable.

A) (A) is true but (R) is false B) (R) is true but (A) is false C) (A) is true and (R) offers correct explanation to (A) D) Both (A) and (R) are false

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Answer & Solution

Answer: Option C

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14

Which one among the following has not started commercial banking?

A) SIDBI B) IDBI C) ICICI D) UTI

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Answer & Solution

Answer: Option A

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15

Loans against Shares/Debentures can be sanctioned against the security of:

A) Preference Share and Covertible debentures B) Fully paid Equity Shares and debentures in demat form C) All shares and debentures in physical form D) Only Preference Share and partly paid debentures

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Answer & Solution

Answer: Option B

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16

What are the elements of Tier-I capital, including additional Tier-I capital as per BASEL-III?

A) Paid up equity capital, statutory & disclosed reserves B) Capital reserves representing surplus arising out of sale proceeds of assets C) Perpetual non-cumulative preference shares and debt capital instruments eligible for inclusion under additional tier-I D) All of the above

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Answer & Solution

Answer: Option D

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17

Open market operations, one of the measures taken by RBI in order to control credit expansion in the economy, means:

A) Sale or purchase of Government securities B) Issuance of different types of bonds C) Auction of gold D) To make available direct finance to borrowers

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Answer & Solution

Answer: Option A

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18

Which type of insurance usually requires higher premium?

A) Broad form insurance B) Whole life insurance C) Health insurance D) Term insurance

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Answer & Solution

Answer: Option A

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19

Assertion (A): The future will see mostly the electronic money clearance through satellite networking.
Reason (R): RBI is encouraging e-banking.

A) (A) is true, (R) is false B) (A) is false, but (R) is true C) Both (A) and (R) are true and (R) is the correct explanation of (A) D) Both (A) and (R) are true, but (R) does not support (A)

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Answer & Solution

Answer: Option C

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20

When a loan will be NPA?

A) Interest and/or loan instalments overdue for more than 90 days B) The account is out of order for more than 90 days in case of overdraft/cash credit C) Bill remains overdue for more than 90 days D) All of the above

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Answer & Solution

Answer: Option D

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Banking and Financial Institutions MCQ Questions and Solutions with Explanations | Commerce