Banking Awareness QUIZ 5

Q1. Which Act was framed specially to deal with Non-Performing Assets (NPA)?
(a) Banking Regulation Act 1949
(b) Foreign Exchange Management Act(FEMA) 1999
(c) Industrial Disputes Act 1947
(d) SARFAESI Act, 2002
(e) None of the given options is true
S1. Ans.(d)
Sol. SARFAESI Act (The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002) was enacted to regulate securitization and reconstruction of financial assets and enforcement of security interest created in respect of Financial Assets to enable realisation of such assets. The SARFAESI Act provides for the manner for enforcement of security interests by a secured creditor without the intervention of a court or tribunal. If any borrower fails to discharge his liability in repayment of any secured debt within 60 days of notice from the date of notice by the secured creditor, the secured creditor is conferred with powers under the SARFAESI Act.
Q2. In Notice Money Market, the tenor of the transactions is from ________
(a) 2-7 days
(b) 2-14 days
(c) 2-21 days
(d) 2-28 days
(e) 2-90 days
S2. Ans.(b)
Sol. In the money market, the amount that is lent for one day is known as “call money” and, if it exceeds one day or two days to 14 days is referred to as “notice money.”
Q3. An Asset Reconstruction Company(ARC) in India is associated with-
(c) NPA
(d) Home Loan
(e) None of the given options is true
S3. Ans.(c)
Sol. Asset Reconstruction Company (ARC) also known as Securitization company in India helps to unlock the value of non-performing assets (NPA) in banks through Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act 2002.ARC is regulated by RBI as a Non-Banking Financial Company (NBFC).
Q4. Which of the following is mainly used by the banks in order to meet their temporary requirement of Cash on a daily basis?
(a) Commercial Paper
(b) Certificate of Deposit
(c) Collateralized Borrowing and Lending Obligations (CBLO)
(d) Call Money
(e) None of the given options is true
S4. Ans.(d)
Sol. Call money market is a market for uncollateralized lending and borrowing of funds. This market is predominantly overnight and is open for participation only to scheduled commercial banks and the primary dealers.
Q5. ___________ is a voluntary market body for the bond, money and derivatives markets.
(a) RBI
(b) SEBI
S5. Ans.(d)
Sol. The Fixed Income Money Market and Derivatives Association of India (FIMMDA), an association of Scheduled Commercial Banks, Public Financial Institutions, Primary Dealers and Insurance Companies was incorporated as a Company under section 25 of the Companies Act,1956 on June 3rd, 1998. FIMMDA is a voluntary market body for the bond, money and derivatives markets. FIMMDA has members representing all major institutional segments of the market. The membership includes Nationalized Banks such as State Bank of India, its associate banks and other nationalized banks; Private sector banks such as ICICI Bank, HDFC Bank, IDBI Bank; Foreign Banks such as Bank of America, ABN Amro, Citibank, Financial institutions such as IDFC, EXIM Bank, NABARD, Insurance Companies like Life Insurance Corporation of India (LIC), ICICI Prudential Life Insurance Company, Birla Sun Life Insurance Company and all Primary Dealers.
Q6. The availability of cash and other cash like marketable instruments that are useful in purchases and investments are commonly known as…………?
(a) Liquidity
(b) Credit
(c) Marketability
(d) Repo Rate
(e) Market price
S6. Ans.(a)
Sol. Liquidity is the term used to describe how easy it is to convert assets to cash.
Q7. Which was the first Indian company listed in National Association of Securities Dealers Automated Quotation System (NASDAQ)?
(a) TCS
(b) HCL
(c) Infosys
(d) Reliance
(e) Wipro
S7. Ans.(c)
Sol. NASDAQ stands for the National Association of Securities Dealers Automated Quotations. It is an online trading system of America where national and international companies are registered. The first Indian company to be listed at NASDAQ was Infosys, followed by Satyam Infoway, Reliance, Wipro, ICICI etc.
Q8. Special Drawing Rights (SDR) are supplementary foreign exchange reserve assets defined and maintained by-
(a) Asian Development Bank (ADB)
(b) Reserve Bank of India (RBI)
(c) World Bank (WB)
(d) International Monetary Fund (IMF)
(e) Asian Infrastructure Investment Bank (AIIB)
S8. Ans.(d)
Sol. The Special Drawing Right (SDR) is an international reserve asset, created by the IMF in 1969 to supplement the existing official reserves of member countries.
Q9. The Imperial Bank of India was renamed as?
(a) Reserve Bank of India
(b) IDBI
(c) Union Bank of India
(d) State Bank of India
(e) Axis Bank
S9. Ans.(d)
Sol. Imperial Bank of India (IBI), the oldest and the largest commercial bank was founded in 1921 and was subsequently transformed into State Bank of India in 1955.
Q10. SBI Day is observed on-
(a) April 1
(b) May 1
(c) June 5
(d) July 1
(e) August 1
S10. Ans.(d)
Sol. The day is celebrated every year on July 1st. On this day, July 1, 1955, the Imperial Bank of India was reconstituted by an Act of Parliament to create State Bank of India to perform the functions of a commercial bank.
Q11. Which bank has launched India’s first digital branch in Gurugram, Haryana?
(b) Axis Bank
(c) IndusInd Bank
(d) South Indian Bank
(e) State Bank of India
S11. Ans.(c)
Sol. IndusInd Bank has launched India’s first digital branch at IndusInd Cybercity Rapid Metro station, Gurugram, Haryana. This video branch machine allows customers to connect with the remote teller over a real-time video call and perform regular banking transactions like statement printing, cheque deposits, the opening of FD account and encashment, funds transfer along with dispensation of cash.
Q12. _______ is a deposit account provided by a bank or other financial institutions for individuals to save money and earn the modest interest for that money held in the account.
(a) Fixed Deposit Account
(b) Savings Bank Account
(c) Recurring Account
(d) Current Account
(e) Escrow Account
S12. Ans.(b)
Sol. A savings account is an account maintained by a bank or other financial institutions for individuals to save money and earn interest on the cash held in the account.
Q13. __________ is a deposit of money that has a fixed time and pays higher interest than a Saving Bank Account.
(a) Fixed Deposit Account
(b) Savings Bank Account
(c) Current Account
(d) All of the above
(e) None of the given options is true
S13. Ans.(a)
Sol. A deposit of money that pays higher interest than a savings account but imposes conditions on the amount, frequency, and/or period of withdrawals. It is also called time deposit.
Q14. First Indian bank to provide Internet Banking facility is-?
(a) SBI
(b) ICICI Bank
(c) Canara Bank
(d) BOI
(e) PNB
S14. Ans.(b)
Sol. First Indian bank to introduce internet banking – ICICI bank.
Q15. Which of the following was implemented by National Payments Corporation of India (NPCI) for Banks, Financial Institutions, corporate etc.?
(a) National Automated Clearing House (NACH)
(b) National Automatic Clearing House (NACH)
(c) National Automated Cleared House (NACH)
(d) National Automatic Cleared House (NACH)
(e) Nominal Automatic Cleared House (NACH)
S15. Ans.(a)
Sol. A web based solution to facilitate interbank, high volume, electronic transactions which are repetitive and periodic in nature. National Automated Clearing House (NACH) System can be used for making bulk transactions towards the distribution of subsidies, dividends, interest, salary, pension etc. and also for bulk transactions towards the collection of payments pertaining to telephone, electricity, water, loans, investments in mutual funds, insurance, premium etc.

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