Banking and Financial Institutions MCQ Questions and Solutions with Explanations

41

Which of the following statements is not correct?

A) Nationalization of commercial banks has achieved its objectives B) Prior to nationalization, commercial bank in India were generally concerned with profit maximisation only C) Nationalization has enhanced the efficiency of commercial banks D) Bank nationalization in India was promoted by the necessity of credit facilities reaching the rural sector and weaker section of the society

Discuss

Answer & Solution

Answer: Option A

No explanation is given for this question. Let's Discuss on Board

42

Nachiket Committee has recommended Universal Electronic Bank Account (UEBA). How will it be achieved?

A) Nationalized Banks will be required to hold camps and Melas to enrol people in UEBA B) RBI will issue a circular mandating all scheduled commercial banks to enrol all the unbanked BPL families in their branch territories under UEBA C) Every resident will be issued a UEBA account automatically at the time of receiving their Aadhaar number D) None of above

Discuss

Answer & Solution

Answer: Option D

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43

'NABARD' provides re-finance for

A) Short term B) Medium term C) Long term D) All of the above

Discuss

Answer & Solution

Answer: Option D

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44

Match the items in List-I with the items in List-II:

List-I	List-II
a. ATM card	1. NPA
b. Debts due for more than 30 days	2. John Shephard Barron
c. Micro finance	3. State Finance Corporations Act
d. State level finance corporations	4. NABARD

A) a-3, b-1, c-2, d-4 B) a-2, b-1, c-4, d-3 C) a-3, b-4, c-2, d-1 D) a-2, b-3, c-1, d-4

Discuss

Answer & Solution

Answer: Option B

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45

. . . . . . . . schemes are seen as riskier than . . . . . . . . schemes.

A) Debt, equity B) Equity, debt C) Both A and B D) None of the above

Discuss

Answer & Solution

Answer: Option B

Solution:

Equity schemes invest mainly in shares of companies and stock market instruments

These market values fluctuate frequently and are affected by market volatility, economic conditions and company performance

Therefore equity based mutual fund schemes carry higher risk

Debt schemes invest mainly in fixed income securities like bonds, government securities and treasury bills

These provide more stable returns and carry lower risk compared to equity

Hence equity schemes are seen as riskier than debt schemes

Therefore the correct answer is Option B (Equity, debt)

46

Identity the correct combination of statements with regard to banking in India:
1. The Presidency banks had acted as quasi - central banks for many decades in India.
2. The Bank of Hindustan was liquidated during 1829-32.
3. General Bank of India was an unsuccessful bank and was dissolved in 1791.
4. Bank of Calcutta was renamed as Bank of Bengal in 1921.

A) 1, 2 and 3 B) 2, 3 and 4 C) 1, 2 and 4 D) 1, 2, 3 and 4

Discuss

Answer & Solution

Answer: Option A

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47

Which of the following statement is incorrect?
$$\eqalign{ & 1.{\text{NPAs}} = \left[ {\frac{{{\text{Gross or Net NPAs}}}}{{{\text{Total advances}}}}} \right] \times 100 \cr & 2.{\text{Net NPAs}} = {\text{Gross NPAs}} - {\text{Provision for NPAs}} \cr & 3.{\text{CAR}} = \frac{{{\text{Tier two capital}} + {\text{Tier three capital}}}}{{{\text{Risk weighted assets}}}} \cr} $$
4. Capital fund has two tiers - Tier I or core capital Tier II

A) Only 4 B) Only 1 C) 1, 2 and 4 D) Only 3

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

48

Which one of the following statement is incorrect?

A) In a developed economy, there is usually direct supply of capital B) In 1976, the IDBI was restructured and separated from the control of the RBI C) Due date of bill is also known as date of maturity D) SIDBI is the subsidiary of IDBI, which was set-up in 1990

Discuss

Answer & Solution

Answer: Option A

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49

Asset Reconstruction Company is associated with:

A) DICGC B) ECGC C) NPA D) SEBI

Discuss

Answer & Solution

Answer: Option C

No explanation is given for this question. Let's Discuss on Board

50

Which of the following can be taken as the main functions of financial markets?
1. Price determination
2. Funds mobilization
3. Liquidity at a low cost
4. Risk sharing
5. Capital formation

A) 1, 2 and 4 B) 1, 2 and 3 C) 2, 3, 4 and 5 D) 1, 2, 3, 4 and 5

Discuss

Answer & Solution

Answer: Option D

No explanation is given for this question. Let's Discuss on Board

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