IMPORTANT BANKING AWARENESS

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important Banking Awareness Questions :

1. MICR code consists of how many digits?
Ans: 9 digits.
(First three digits denotes city, next three digits
representing the bank and the last three digits
representing the bank branch)

2. What is the minimum limit in RTGS system?
Ans: 2 lakhs (there is no upper limit in RTGS)

3. What is full form of CTS?
Ans: Cheque Truncation System

4. Under which service, customers may access their
bank account and perform basic transactions from
any of the member branch offices.
Ans: Core Banking Solution (CBS)

5. Exchange of cash flow in different currency is
known as:
Ans: Currency Swap

6. Assets or loans which stop performing after 90
days is known as:
Ans: Non Performing Asset (NPA)

7. Who controls the Monetary Policy in India?
Ans: RBI (Reserve Bank of India)

8. Which card is
issued by NPCI (National Payments Corporation of
India)?
Ans: RuPay Card

9. Definition of Current Account deficit:
Ans: A measurement of a country's trade in which
the value of goods and services it imports exceeds
the value of goods and services it exports.

10. Full form IFSC –
Ans: Indian Financial System Code

11. Commercial paper can be issued for a maximum
period of:
Ans: 365 days or 1 year.

12. The Mutual funds in India follow accounting
standards laid by:
Ans: SEBI (Securities and Exchange Board of India)

13. Minimum amount for Certificate of Deposit has
been fixed at:
Ans: Rs. 1 Lakh

14. AML is a term mainly used in the financial and
legal industries. Expand the term AML:
Ans: Anti Money Laundering

15. PIN is a number allocated to an individual and
used to validate electronic transactions. Expand
PIN:
Ans: Personal Identification Number

16. What is Repo rate?
Ans: It is the rate is the rate at which RBI lends
money to the commercial banks.

17. What is Stale Cheque?
Ans: A cheque which is presented to a bank after 3
months from date of issue is considered as stale
cheque and will often not be honored for cash or
deposit at a bank.

18. What is Bancassurance?
Ans: The selling of life assurance and other
insurance products and services by banking
institutions.
19. The objective of KYC guidelines is to prevent
banks from being used, intentionally or
unintentionally, by criminal elements for money
laundering or terrorist financing activities. What is
the full form of KYC?
Ans: Know Your Customer (KYC)

20. Know Your Customer (KYC) guidelines are
issued under:
Ans: Section 35A of the Banking Regulation Act,
1949

21. In BSBDA (Basic Savings Bank Deposit Account)
the credits in a financial year does not exceed
rupees:
Ans: Rs. 1 lakh

22. In BSBDA (Basic Savings Bank Deposit Account)
the balance at any point of time does not exceed
rupees:
Ans: Rs. 50,000

23. In BSBDA (Basic Savings Bank Deposit Account)
the withdrawals and transfers in a month does not
exceed rupees:
Ans: Rs. 10,000

24. At which rate RBI give loans to commercial
banks?
Ans: Repo rate

25. Full form of CASA:
Ans: Current Account Saving Account

26. In what denominations Commercial Paper (CP)
can be issued?
Ans: Rs. 5 lakh

27. What is the minimum denomination of Treasury
bills to issue in India?
Ans: Rs. 25,000

28. Who cannot issue Certificate of Deposit (CD)?
Ans: Regional Rural Banks (RRBs) and Local Area
Banks (LABs)

29. Expand ASBA:
Ans: Application Supported by Blocked Amount

30. Depositor Education and Awareness Fund
(DEAF) is maintained with:
Ans: RBI

31. Cash Reserve Ratio (CRR) is the amount of
funds that the banks have to keep with:
Ans: Central Bank (RBI)

32. What is the maximum amount per transaction
NEFT limit for cash-based remittances to Nepal?
Ans: Rs. 50,000

33. What does CAR stands for?
Ans: Capital Adequacy Ratio

34. IFSC code consists of _____ alpha numeric
code.
Ans: 11 digits
(The IFSC is an 11 digit alpha numeric code, with
the first four digits identifying the bank, fifth is
numeric (kept 0) and the last six digits represent
the bank branch.)

35. When money is lent or borrowed for one day or
on overnight basis it is known as:
Ans: Call Money

36. When money is lent or borrowed for between 2
days and 14 days it is known as:
Ans: Notice money

37. When money is lent or borrowed for a period of
more than 14 days, it is known as:
Ans: Term money

38. Treasury Bills and Certificate of Deposit are
considered as the ____instruments.
Ans: negotiable money market

39. Commercial Paper (CP) is an unsecured money
market instrument issued in the form of a _____.
Ans: Promissory note.

40. What is the upper limit in Public Provident Fund
(PPF)?
Ans: Rs. 1.5 lakhs

41. As per RBI guidelines, with effect from April
1, 2012, the validity period of Cheques, Demand
Drafts, Pay Orders and Banker's Cheques is _____.
Ans: 3 months

42. What is the time limit for an asset or loan to
be declared as Non-Performing Asset?
Ans: 90 days

43. Deposit Insurance and Credit Guarantee
Corporation (DICGC) does not cover:
Ans: Primary co-operative societies

44. RBI measure to liquidate the market:
Ans: Repo rate.

45. Full form of EFT:
Ans: Electronic Fund Transfer

46. Fastest mode of transaction:
Ans: RTGS

47. Alphanumeric code on cheque is known as:
Ans: Indian Financial System Code (IFSC)

48. Bank pays interest on savings account?
Ans: Daily Basis

49. What is the loan limit for education under
priority sector for studies abroad?
Ans: Rs. 20 lakh
(Loans to individuals for educational purposes
including vocational courses upto Rs.10 lakh for
studies in India and Rs. 20 lakh for studies abroad
are included under priority sector.)

50. RuPay Card is an Indian version of credit/
debit card is launched by which organization:
Ans: NPCI (National Payments Corporation of India)

51. Fixed Deposit (FD)Account may be opened for a
minimum period of:
Ans: 7 days

52. What is the minimum amount required to open
a Fixed Deposit (FD)?
Ans: Rs.1000

53. The Banks has converted all ‘no - frills'
accounts’ into:
Ans: Basic Savings Bank Deposit Accounts

54. 'Pradhan Mantri Jan Dhan Yojana' is a Scheme
for:
Ans: Financial inclusion

55. How much overdraft facility to be provided in
'Pradhan Mantri Jan Dhan Yojana' scheme?
Ans: Rs. 5,000

56. In CBS, C stands for:
Ans: Core

57. In CRAR, A stands for:
Ans: Assets (Capital to Risk Weighted Assets Ratio)

58. IMPS - Immediate Payment Service is an
interbank electronic instant mobile money transfer
service through mobile phones in India, the facility
is provided by:
Ans: NPCI (National Payment Corporation of India)

59. The Central Bank of India has adopted new
measure of inflation:
Ans: Consumer Price Index (CPI)

60. When a cheque is torn into two or more pieces
and presented for payment, such a cheque is
called:
Ans: mutilated cheque

61. How much fee charged to file a complaint
under Banking Ombudsman? Ans: Banking
Ombudsman does not charge any fee

62. Who is the appellate authority in Banking
Ombusdsman?
Ans Deputy Governor of RBI 63. If any customer is
not satisfied by the decision of Banking
Ombudsman, customer can appeal against the
award before the appellate authority within how
many days from the date of receipt?
Ans 30 days

64. ATMs or Cash Dispensing machine which are
owned and operated by Non-Banking Financial
Companies are called:
Ans: White Label ATMs.

65. RBI gave in-principle for Banking license to:
Ans: IDFC and Bandhan

66. Minimum capital requirement for new banks in
private sector is:
Ans: Rs. 500 crore

67. A Non-Banking Financial Company (NBFC) is a
company registered under the:
Ans: Companies Act, 1956

68. Minimum capital requirement for Non-Banking
Financial Company (NBFC) is:
Ans: Rs. 500 crore

69. The NBFCs are allowed to accept/renew public
deposits for a minimum period of:
Ans: 12 months ( and maximum period of 60
months)

70. A NBFCs cannot offer interest rates higher
than the ceiling rate prescribed by RBI? What is
the present ceiling?
Ans: 12.5 per cent per annum

71. Minimum capital requirement for Foreign banks
that want to set up operations in India is:
Ans: Rs. 500 crore

72. What is the minimum paid-up capital
requirement of both small banks and payments
banks in India?
Ans: Rs. 100 crore

73. RBI extended the timeline for full
implementation of Basel III norms till:
Ans: 31 March 2019

74. SLR ((Statutory Liquidity Ratio)is the amount
a commercial banks needs to maintain in the form
of _______before providing credit to its
customers.
Ans: cash, or gold, or govt. approved securities
(Bonds)

75. _______ is the rate at which banks borrow
funds overnight from the Reserve Bank of India
(RBI) against approved government securities.
Ans: Marginal Standing Facility (MSF)

76. Who issues Treasury bills (T-bills) in India?
Ans: Government of India

77. Treasury bills are available for a minimum
amount of:
Ans: Rs. 25,000

78. Minimum & Maximum Limit of NEFT:
Ans: no limit

79. What is the rate of interest rate on provident
fund for the current fiscal?
Ans: 8.75%

80. Govt. to implement GST (Goods & Services Tax)
new indirect tax regime from:
Ans: 1st April 2016

81. RBI extends deadline for exchanging pre-2005
currency from June 30, 2015 to
Ans: December 31, 2015

82. How much amount RBI allows in 'Tap and pay'
transactions without PIN?
Ans: Rs. 2000

83. RBI lifted a ban on carrying Indian bank notes
of Rs 1,000 and Rs. 500 denominations to and
from:
Ans: Nepal and Bhutan

84. C stands for in "KYC":
Ans: Customer

85. Pension scheme for unorganized sector:
Ans: Swavalamban

86. Full form of REIT:
Ans: Real State Investment Trust

87. Forward Market Commission merge with:
Ans: SEBI

88. Purpose of starting Minor account for 10 years
children:
Ans: Financial inclusion

89. Full form of CVV:
Ans: Card Verification Value

90. Bank of International Settlement headquarter:
Ans: Switzerland

91. Who appoints Banking Ombudsman officer?
Ans: RBI

92. IFRS full form:
Ans: International Financial Reporting Standards.

93. Corporate Social Responsibility committee
headed is by Ans: Anil Baijal

94. Which is the Regulatory body for RRBs?
Ans: NABARD

95. RBI policy related to money laundering?
Ans: Know Your Customer

96. Mutual funds regulated by:
Ans: SEBI (Securities and Exchange Board of India)

97. What is the full form of MTSS?
Ans: Money Transfer Service scheme

98. How much amount of money can RBI lend to a
bank?
Ans: 2% of NDTL

99. What RBI does to Increase its Monetary Base?
Ans: OMO Open Market Operations
100. Which rate does RBI Reduces to Increase
liquidity in market?
Ans: Repo Rate

101. After completion of 15 years, Public Provident
Fund (PPF) can be extended up to how many
years?
Ans: 5 years

102. Short term Money lending process is known as:
Ans: Call Money

103. Treasury bill tenure:
Ans: 91 days, 182 days, 364 days

104. Minimum limit for medium scale enterprises is
Rs. 5 Cr. what is maximum limit?
Ans: 10 Cr.

105. Prime Lending Rate is replaced by:
Ans: Base rate

106. Banks cannot grant Loan below which rate:
Ans: Base Rate

107. If RBI reduces CRR, what happens:
Ans: Credit Supply increases, loans get cheaper.

108. Name the scheme to include every people
under banking system:
Ans: Financial Inclusion

109. Special Drawing Right (SDR) is a monetary
unit of:
Ans: IMF

110. Cheque which is not crossed is called:
Ans: Open cheque

111. Teaser rates are related to which type of
loans:
Ans: Home loans

112. What is Teaser loan?
Ans: If a bank offers a slightly lower rate in the
initial years and higher rate in later years, it is
called a teaser loan.

113. The RBI policy rate which is purely an
indicative rate used by RBI to signal long – term
outlook on interest rates is:
Ans: Bank rate

114. The term ‘pre – shipment’ finance relates to:
Ans: export credit

115. A receipt listed in India and traded in rupees
declaring ownership of shares of a foreign
company:
Ans: Indian Depository Receipt (IDR)

116. With effect from July 2012, for calculating of
lending rates, the RBI has advised banks to switch
over to the:
Ans: Base Rate systems

117. Mobile banking fund transfer limit in a day:
Ans: Rs. 50,000

118. The seed capital of Bhartiya Mahila Bank is:
Ans: Rs.1000 crore

119. “Lender of the Last Resort” by Banks is
known as:
Ans: RBI

120. “Fixed deposit” is also referred to as:
Ans: Term Deposit

121. The holidays for the banks are declared as
per:
Ans: Negotiable Instruments Act

122. In banking business, when the borrowers avail
a term Loan, initially they are given a repayment
holiday and this is referred as:
Ans: Moratorium

123. Regulator of Micro, Small and Medium
enterprises in India:
Ans: SIDBI (Small Industries Development Bank of
India)

124. A worldwide financial messaging network which
exchanges between banks and financial institutions
is known as:
Ans: Structured Financial Messaging System
(SFMS)

125. The term “Smart Money” refers to:
Ans: Credits Card

126. The maximum deposit amount insured by
DICGC?
Ans: Rs. 1 lakh per depositors across all banks

127. With reference to a cheque which is the
‘drawee bank’?
Ans: The bank upon which the cheque is drawn

128. In which of the following fund transfer
mechanisms, can funds be moved from one bank to
another and where the transaction is settled
instantly without being bunched with any other
transaction?
Ans: RTGS

129. Bad advances of a Bank are called:
Ans: Non – performing Asset

130. By increasing repo rate, the economy may
observe the following effects:
Ans: rate of interest on loans and advances will be
costlier

131. Increased interest rates, as is existing in the
economy at present will:
Ans: mean higher cost of raw materials

132. The sole authority to issue and manage
currency in India:
Ans: RBI

133. In India, one- rupee coins are issued by:
Ans: Govt. of India

134. Fixed deposits and recurring deposits are:
Ans: repayable after an agreed period

135. When a bank returns a cheque unpaid, it is
called:
Ans: dishonour of the cheque

136. What is ‘Demat Accounts’?
Ans: Accounts in which shares of various companies
are traded in electronic form

137. When the rate of inflation increases:
Ans: purchasing power of money decreases

138. Banks in India are regulated under:
Ans: Banking Regulation Act, 1949

139. Banking sector falls under which of the
following sectors?
Ans: Service Sector

140. ASBA scheme is related to the purchase of:
Ans: IPO

141. In a bank, which of the following are the usual
types of accounts?
Ans: Current accounts, Savings bank accounts and
Term deposit accounts

142. The most powerful tool used by the Reserve
Bank of India to control inflation is to:
Ans: raise interest rates

143. NEFT and RTGS in banking terminology speak
of:
Ans: electronic fund transfer from bank to bank

144. The ownership of public sector banks rests:
Ans: jointly with the Government of India and the
shareholders from the public

145. If a cheque is postdated, the bank on which it
is drawn:
Ans: will not honour the cheque before the date of
the cheque

146. Regulator of Capital Market in India:
Ans: SEBI

147. First Indian Bank to introduce credit card:
Ans: Central Bank of India

148. RBI nationalized in:
Ans: 1949

149. Loans of very small amounts given to low
income groups is called:
Ans: Micro Credit

150. RBI established in:
Ans: 1935.