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Banking Awareness Questions for SBI PO Mains Exam

Q1. Cash kept in the currency chest is owned by-
(a) Currency Chest branch bank
(b) State Bank of India
(c) Central Government
(d) Reserve Bank of India
(e) Finance Ministry

Q2. When more than one bank is allowing credit facilities to one party in coordination with each other under a formal arrangement, the arrangement is generally known as ___________
(a) Consortium
(b) Syndication
(c) Multiple Banking
(d) Participation
(e) None of the given options is true

Q3. What is the minimum amount of deposit into/withdrawal from currency chest?
(a) Rs.5, 00,000
(b) Rs.1, 50,000
(c) Rs.2, 00,000
(d) Rs.3, 00,000
(e) Rs.1, 00,000

Q4. What is the maximum period for which a term deposit can be normally opened?
(a) 8 years
(b) 7 years
(c) 9 years
(d) 10 years
(e) 12 years

Q5. DICGC guarantees amount up to _____________ per depositor per bank.
(a) Rs.1, 00,000
(b) Rs.1, 50,000
(c) Rs.2, 00,000
(d) Rs.3, 00,000
(e) None of the given options is true

Q6. Which of the following institutions do not hold a banking license?
(a) Small Banks
(b) Foreign Banks
(c) Commercial Banks
(d) NBFCs
(e) Private Banks

Q7. What is the full form of FATCA?
(a) Forex Account Tax Compliance Act
(b) Foreign Account Tax Compliance Act
(c) Forex Account Total Compliance Act
(d) Foreign Account Total Compliance Act
(e) None of the given options is true

Q8. What is the minimum initial deposit required for opening a Basic Savings Bank Deposit Account (BSBDA)?
(a) Rs 500
(b) Rs 1000
(c) Rs 100
(d) No initial deposit
(e) Rs 200

Q9. Who among the following decides the volume and value of bank notes to be printed in India?
(a) RBI
(b) SBI
(c) Security Printing and Minting Corporation of India
(d) All of the Above
(e) None of the given options is true

Q10. 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?
(a) RTGS
(b) NEFT
(c) TT
(d) EFT
(e) None of the given options is true

Q11. A worldwide financial messaging network which exchanges messages between banks and financial institutions is known as _________
(a) SWIFT
(b) Basel
(c) RTGS
(d) NEFT
(e) AIIB

Q12. Which of the following is not a ‘Money Market Instrument’?
(a) Treasury Bills
(b) Commercial Paper
(c) Certificate of Deposit
(d) Equity Shares
(e) None of the given options is true

Q13. When there is a difference between all receipts and expenditure of the Govt. of India, both capital and revenue it is called _______
(a) Income Deficit
(b) Fiscal Deficit
(c) Budgetary Deficit
(d) All of the Above
(e) None of the given options is true

Q14. With reference to a cheque which of the following is the ‘drawee bank’?
(a) The bank that collects the cheque
(b) The payee’s bank
(c) The endorser’s bank
(d) The bank upon which the cheque is drawn
(e) None of the given options is true

Q15. Banks issue a letter to beneficiary on behalf of its constituents like guarantee for making payment on their behalf on fulfillment of its terms and conditions. What is this arrangement known in banking context?
(a) Line of Credit
(b) Loan to Client
(c) Loan on Credit
(d) Letter of Credit
(e) None of the given options is true

Solutions

S1. Ans.(d)
Sol. To facilitate the distribution of banknotes and rupee coins, the Reserve Bank has authorized select branches of scheduled banks to establish currency chests. These are actually storehouses where banknotes and rupee coins are stocked on behalf of the Reserve Bank.

S2. Ans.(a)
Sol. In the financial or banking world, a consortium refers to several lending institutions that group together to jointly finance a single borrower.

S3. Ans.(e)
Sol. The minimum amount of deposit into/withdrawal from currency chest will be Rs.1,00,000/- and thereafter,
in multiples of Rs.50,000.

S4. Ans.(d)
Sol. The tenure of an Fixed Deposit or Term Deposit can vary from 7, 15 or 45 days to 1.5 years and can be as high as 10 years.

S5. Ans.(a)
Sol. DICGC guarantees amount up to Rs. 1, 00,000 per depositor per bank.

S6. Ans.(d)
Sol. Non-banking financial companies, or NBFCs, are financial institutions that provide banking services, but do
not hold a banking license. These institutions are not allowed to take deposits from the public.

S7. Ans.(b)
Sol. The Foreign Account Tax Compliance Act (FATCA), which was passed as part of the HIRE Act, generally requires that foreign financial Institutions and certain other non-financial foreign entities report on the foreign assets held by their U.S. account holders or be subject to withholding on withhold able payments.

S8. Ans.(d)
Sol. There is no requirement for any initial deposit for opening a BSBDA.

S9. Ans.(a)
Sol. The Reserve Bank of India (RBI) based on the demand requirement indicates the volume and value of banknotes to be
printed each year to the Government of India which get finalised after mutual consultation.

S10. Ans.(a)
Sol. In RTGS, the beneficiary branches are expected to receive the funds in real time as soon as funds are transferred by the remitting bank. The beneficiary bank has to credit the beneficiary’s account within 30 minutes of receiving the funds transfer message.

S11. Ans.(a)
Sol. Society for Worldwide Interbank Financial Telecommunication (SWIFT) code . An internationally-recognized identification code for banks around the world. SWIFT codes are most commonly used for international wire transfers and are comprised of 8 or 11 alphanumeric characters.

S12. Ans.(d)
Sol. There are several money market instruments, including treasury bills, commercial paper, bankers’ acceptances, deposits, certificates of deposit, bills of exchange, repurchase agreements.

S13. Ans.(c)
Sol. A budget deficit occurs whenever a government spends more than it makes, which is nearly every year. Budgetary deficit is the difference between all receipts and expenses in both revenue and capital account of the government.

S14. Ans.(d)
Sol. Drawee is a legal and banking term used to describe the party that has been directed by the depositor to pay a certain sum of money to the person presenting the check or draft. A typical example is if you are cashing a paycheck.

S15. Ans.(d)
Sol. A letter of credit is a letter from a bank guaranteeing that a buyer's payment to a seller will be received on time and for the correct amount. In the event that the buyer is unable to make payment on the purchase, the bank will be required to cover the full or remaining amount of the purchase.

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