Institute of Banking Personnel Selection Banking Awareness Questions

Institute of Banking Personnel Selection Examination

IBPS Clerk Banking Awareness Questions

1. Which of the following is a type of anticipatory letter of credit?

• Green clause letter of credit
• Yellow clause letter of credit
• Back to back letters of credit
• Revolving letter of credit

2. Performance guarantee is issued?

• In lieu of earnest money
• In lieu of retention money
• In lieu of indemnity bonds
• For successful competition of Turnkey projects

3. Which of the following is not a transfer of funds by using the electronic media?

• Mail transfer of funds
• Telegraphic transfer of funds
• Electronic credit transfers
• Electronic clearing transfers

4. Which of the following is not an augmenting feature of credit cards?

• Personal accident insurance
• Cash withdrawal facility
• Add-On facility
• Automatic recovery of interest on term loans

5 Which of the following is a disadvantage of going public issue?

• Provides liquidity to existing shares
• Commands better pricing than placement with few investors
• Increased regulatory norms
• Enables valuation of the company

6 Which of the following is not a reason for regulating the banking operations?

• Banks hold a major portion of the public savings
• Banks intermediate between the savings and investments
• Banks hold a large part of the money supply
• Banks earn profit from non-fund services

7. Which of the following statements is true?

• Resave Bank of India empowers the banks to open branches according to their will and pleasure
• Reserve Bank of India is a central bank which monitors only lending activities pertaining to export credit
• Banks have authority to establish the ATMs at their convenience
• Rural banks of commercial banks do not have freedom to issue credit cards

8. When the customer withdraws cash from ATM, the banker and customer relation ship is?

• Debtor and Creditor
• Creditor and Debtor
• Lessor and Lessee
• Agent and principal

9. Which of the following is a public sector Bank?

• IDBI
• ICICI
• AXIS
• HDFC

10. Trade control in India is regulated by?

• RBI
• SEBI
• EXIM Bank
• DGFT

11 Which of the following businesses is prohibited as per Sec 8 of B.R Act 1949?

• Executing the trusts
• Leasing
• Retail trading
• Underwriting

12. Which of the following is not one of the essential elements of internal audit?

• Totality
• Expertise
• Independence
• Subjectivity

13. The letter of credit, which facilitates the exporter to get pre- shipment finance (from the stage of purchase of raw material until the warehousing of the finished goods) from advising bank is called?

• Red Clause LC
• Lines of credit
• Packing credit loan
• Green Clause LC

14. A term loan is classified as a non-performing asset, if interest or installment is overdue for period exceeding how many days?

• 90
• 91
• 180
• 182

15. Which of the following is an interest bearing demand deposit?

• Time Deposit
• Re-investment deposits
• Cash Certificates
• Savings Bank account

16. Debt Recovery Tribunals accept petitions from Banks and financial institutions, only when the amount of suit is for Rs?

• 1 00 000 and above
• 5 00 000 and above
• 7 50 000 and above
• 10 00 000 and above

17. An endorsement is deemed as an instruction to?

• Collecting Bank
• Paying Bank
• Drawer
• Payee

18. Ideal Credit deposit ratio for a bank is?

• 60%
• 40%
• 90%
• 30%

19. The rate at which RBI rediscounts the bills of commercial banks is called as?

• Bank Rate
• Prime Lending rate
• Repo rate
• BPLR

20. Which of the following is not one of the RBI directives on clean note policy?

• Currency note packets are not to be stapled and secured with paper bands
• Soiled notes are to be stapled before they are remitted to Currency Chest.
• Water mark window of bank notes shall not contain any writings
• Currency notes are to be sorted in to Issuable and non-issuable notes.

21. Which of the following committees are related to 'Micro financing'?

• Nayak Committee
• Tandon committee
• Vyas Committee
• Narasimham committee

22. The relation ship between RBI and the Bank maintaining the currency chest is that of?

• Debtor and Creditor
• Principal and Agent
• Bailor and Bailee
• Creditor and Debtor

23. Normally, the number of members in a self Help Group shall not exceed?

• 10
• 20
• 50
• 15

24. Short fall in fulfilling the targets of Priority sector and agricultural finance by domestic commercial banks shall be deposited with/in?

• RIDF
• SIDBI
• RBI
• IDBI

25. The maturity value of a Recurring deposit with a monthly contribution of Rs 500 kept for a period of 12 months, at 9% interest rate compounded quarterly would be Rs.?

• 6, 265
• 6, 625
• 7, 255
• 7, 555

26. Which of the following is not an imperfect note?

• Washed note
• Bleached note
• Mutilated note
• Oiled note

27. Credit rating helps in measuring the credit risk and facilitates?

• Considering higher credit limits
• Making loan provisioning at an early stage
• Accurately calculate the probable loan losses
• Pricing of a loan

28. The Reverse Repo has the following characteristic?

• Borrowing by RBI from banks
• Borrowing with government security as collateral
• Short term borrowing
• All of these

29. Under the Nayak Committee recommendations, the quantum of working capital limits from the bank is minimum percentage of the projected annual sales?

• 5%
• 15%
• 20%
• 25%

30. Banks insist on providing finance for those projects or activities only which they consider to be viable. What is meant by viability of project?

• Capacity to generate cash, adequate to service debt and surplus for borrower's personal requirement.
• Generation of cash to meet debt liability
• Generation of profits.
• Generation of gross profits

31. Letter of negative lien obtained from borrower by a bank contains?

• An undertaking that the property mortgaged to the bank is his own
• A confirmation that the borrower had earlier deposited title deeds to create mortgage on the property.
• An undertaking not to create any encumbrance/lien on the property which he owns but not yet mortgaged to the bank
• A declaration that he is the joint owner of the property furnishing the details of his share and valuation thereof.

32. Which of the following statement is CORRECT?

• Consortium advances to be treated as NPA on the basis of recovery by individual banks
• If one facility of a borrower is treated as NPA other facilities to him also to be treated as NPA even if there are no irregularities in that account.
• Consortium must be formed if the total exposure of fund based limit exceeds Rs 100 crore.
• Both First

33. If an IPO is under-priced, which of the following can be considered as consequences/implications of the same?
I. The company looses the opportunity to raise more funds
II. Under pricing would give less returns to the investor
III. Under pricing results in lower net worth on an increased equity.

• Only (II) above
• Only (III) above
• Both (I) and (III) above
• Both (II) and (III) above all.

34. Corporate Bank files suit for recovery of its loan against the guarantor only and not the borrower. Guarantor pleads in the court that before filing suit against him, money should be recovered from the borrower. In such circumstances, the bank can seek recourse in the court against?

• All the liable parties together only
• Any one of them at a time
• All separately
• At its discretion it can proceed against any one

35. A letter of credit (LC) wherein the credit available to the customer gets reinstated after the bill is paid is known as?

• Back to back LC
• Red clause LC
• Back to front LC
• Revolving LC

36. Regional Rural Banks are?

• Private Sector scheduled commercial banks
• Cooperative banks
• Foreign banks
• Public sector scheduled commercial banks

37. Large corporate customers demand?

• Short term products from their banks irrespective of the cost at their times of need.
• Increasingly sophisticated products from their banks at the lowest possible cost.
• Disintegrated financial products from their banks at the lowest possible cost.
• Basic banking products from their banks but with speed and efficiency.

38. Funded Services under corporate banking does not include?

• Working Capital Finance
• Bill Discounting
• Export Credit
• Letters of Credit

39. Which of the following is not directly involved in rural lending?

• Cooperatives
• RRBs
• Commercial banks
• SIDBI

40. PACSs provide?

• Mainly long term credit
• Mainly short term credit
• Both long term and short term credit
• Do not provide any credit

41. The purpose of which is to make credit of available to essential sectors of the economy according to national priorities?

• Selective Credit Control (SCC)
• Maintenance of cash reserve
• Reserve fund
• Comprehensive Credit Control

42. The system of note issue followed by the RBI is?

• Proportional reserve system
• Minimum reserve system
• Minimum fiduciary system
• Maximum fiduciary system

43. The rate at which the Reserve Bank of India lends to the commercial banks in very short term against the backing of the Government securities is known as?

• Bank rate
• Repo rate
• Reverse Repo
• Discount rate

44. Scheduled banks are those?

• Includued in the 2nd schedule of the Banking Regulation Act-1949
• Includued in the 2nd schedule of the Companies Act-1956
• Includued in the 2nd schedule of the Reserve Bank of India Act -1934
• Bank Nationalization Act -1969

45. The following is classified as a public sector bank?

• ICICI Bank
• IDBI Bank Ltd
• Axis Bank
• Local area bank

46. The banker-customer relationship in credit card payment is?

• Creditor-debtor
• Debtor-creditor
• Agent principal
• Principal-agent

47. The base rate is set by?

• Individual banks
• RBI
• Government of India
• RBI in consultation with Government

48. State Bank of India's new floating rate of deposit is directly linked to?

• Inflation Rate
• BPLR
• Base Rate
• BankRate

4.Six private sector banks were nationalised on April 15, 1980, whose reserves were more than?

• 100 Crores
• 200 crores
• 300 crores
• 400 crores

50. Security printing press was established in 1982 at?

• Kolkata
• New Delhi
• Bombay
• Hyderabad

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