Banking Awareness

Q1. Borrower’s ability to meet the immediate liabilities is indicated by?

(a) Current Ratio

(b) Acid Test Ratio

(c) Debt Equity Ratio

(d) All of the above

(e) None of the above

Q2. Branches receive Potential Linked Plan through?

(a) Block Level Banker’s Committee

(b) State Level Banker’s Committee

(c) District Consultative Committee

(d) Lead Bank Department

(e) None of the above

Q3. By “Deemed Exports” it means?

(a) supplies of goods and services to units within the country which can earn foreign currency to the country

(b) exports made by units situated in EPZ areas to out of country

(c) exports made by EOU out of the country

(d) anticipated value of exports

(e) None of the above

Q4. By devaluation we mean?

(a) A fall in the domestic value of a currency

(b) A fall in the external value of a currency caused by the market forces

(c) A fall in the external value of a currency caused by Government action

(d) All of the above

(e) None of the above

Q5. Capitalization of Reserves is carried out by issue of ___________ to the existing shareholders.

(a) Additional shares

(b) Bonus shares

(c) Incentives

(d) All of the above

(e) None of the above

Q6. As per RBI guidelines, when a counterfeit note is detected at the branch, it should be:

(a) Branded with a stamp “COUNTERFEIT BANKNOTE”

(b) Recorded in a separate register under authentication

(c) acknowledged in the prescribed format of RBI and issued to the tenderer

(d) All of the above

(e) None of the above

Q7. Asset Reconstruction Company is associated with..........?

(a) DICGC

(b) ECGC

(c) NPA

(d) SEBI

(e) None of the above

Q8. Association of National Exchange Members of India (ANMI) is a body consisting of?

(a) Bankers and SEBI

(b) SEBI and IBA

(c) Brokers Operating in the National Exchanges

(d) Bankers, SEBI, IBA and RBI

(e) None of the above

Q9. At what stage of opening of bank account is the checking of Politically Exposed Persons (PEP) carried out:

(a) at the first point of customer interaction

(b) at the Account Services Level

(c) at the Central Account Services Level

(d) one month after the account is opened

(e) None of the above

Q10. Authorized Dealers for foreign exchange transactions are appointed by:

(a) Reserve Bank of India

(b) Government of India

(c) Individual Banks

(d) FEDAI

(e) None of the above

Q11. Currency Note containing political slogan is not a legal tender as per:

(a) Legal Tender (Inscribed Notes) Act, 1964

(b) Negotiable Instruments Act, 1881

(c) Reserve Bank of India Act

(d) All of the above

(e) None of the above

Q12. Demand draft for Rs. 20,000 and above:

(a) can be paid in cash

(b) should not be paid in cash

(c) mode of payment will depend on the status of the customer 

(d) All of the above

(e) None of the above

Q13. Deposits under NRE/FCNB accounts are linked to-

(a) Base Rate

(b) SIBOR

(c) LIBOR

(d) All of the above

(e) None of the above

Q14. Electronic Fund Transfer scheme of RBI has been renamed as:

(a) Clearing

(b) Core Banking Solutions

(c) Real Time Gross Settlement

(d) National Electronic Fund Transfer

(e) All of the above

Q15. Escrow account is useful/helpful to-

(a) importers

(b) exporters

(c) people

(d) Assets

(e) None of the above

Important Banking Act

Name of the Act	Important Facts
Banking Regulation Act, 1949	1.   The Banking Regulation Act Came into force with effective from 16th March 1949. 2.     Initially, it was named as “Banking Companies Act, 1949”, but latter the name was changed to Banking Regulation Act 1949 from 1st March 1966. 3.     This Act Provides safety in the interest of depositors. 4.     This Act forbids the misuse of powers by Higher Authorities/ Staffs / Banking employees etc. 5.     Bank Employee Can take leave according to this ACTS.
SARFAESI Act, 2002	1.     Full form of SARFAESI – Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002. 2.     This SARFAESI ACT, 2002 acts as a tool to recover the debt, bad loans i.e. NPA (Non-Performing Assets). 3.     According to this ACT, bank has the power to seize the securities of Loan Defaulters (Except Agricultural Land) without the intervention of the court. 4.     This Act also giver power of “Seize & Desist” to all banks in India.
State Bank of India Act,1955	1.     According to this the Reserve Bank of India acquired a controlling Interest in the Imperial Bank of India. 2.     This Acts also prevent the misuse of depositors Interests.
Reserve Bank of India Act,1934	1.     The Reserve Bank of India Act Came into Effect from 6th March 1934. 2.     This Acts Provides the Supervision and Regulation of the banking system in India. 3.     According to this Act, all Scheduled Bank must have minimum 5 Lakh & above pay up capital. 4.     According to this Act RBI has the power regarding the exchange of damaged and imperfect Currency Notes. 5.     According to this Act, the Maximum denomination of Currency Notes can be Rs.10,000. 6.     According to this Act, only the RBI or Union Government can issue and accept Promissory Notes which is payable on demand. 7.      According to this Act, Every Schedule Bank has a minimum capital with the RBI on Daily basis which is generally termed as CRR. 8.     This Act also says each & every bank in India needs to follow the guidelines which are implemented by RBI. 9.      According to this Act RBI can charge/fine any bank with prior notice if the bank not obeys the guidelines.
Foreign Exchange Regulation Act, 1973	1.     This Act Came in force with Effect from 1st January 1974. 2.     These Acts impose the strict rules and regulations on certain kinds of payments/transactions, the dealings in foreign exchange and securities and the transactions which had an indirect impact on the foreign exchange and the import and export of currency. 3.     FERA was repealed in 1988 by the Union Government at the time of Atal Bihari Vajpayee Government and Replaced FERA into FEMA.
Foreign Exchange Management Act, 1999	1.     This Act was enacted on 29th December 2000. 2.     This Act makes offences related to foreign exchange civil offences. 3.     This Act was Enacted after Replacing FERA Act, 1973 with a New Strict Norms and guidelines. 4.     This Act enables the Reserve Bank of India and the Central Government to pass regulations and rules relating to foreign exchange in tune with the Foreign Trade policy of India.