Financial and Banking awareness Test - Part 1

1. Fiduciary Issue of Currency means Issue of Currency notes ________. 
a. Without keeping gold or silver deposit
b. Keeping gold or silver deposit

c. With partial gold or silver deposits
d. With comparative gold or silver deposits
e. By keeping only gold deposits

2. The ability of commercial banks to increase their deposits by expanding their loans and advances is known as _______. 
a. Capital Expansion
b. Capital Creation
c. Credit Expansion
d. Credit Control
e. Credit Creation

3. The banks shall have to state their lending policies. The would include _______.
A. Exposure limits and eligible borrowings
B. Documentation standards, maturity and pricing options
C. Write of Review Procedures 
a. Only A
b. Only B
c. Only C 

d. Only A and C
e. All the three

4. The Pre Shipment finance is provided by the banks only to____ 
a. Importers
b. Bank Employees
c. Exporters
d. Small Scale Industries
e. Large Scale Industries

5. In Benchmarking we compare business’s performance with____ 
a. Alternative products
b. Companies in same industry
c. Companies selling products in direct competition
d. Subsidiaries
e. Operational setup

6. Which of the following is NOT a function of Reserve Bank of India? 
a. Lender of the last resort
b. Holds cash reserves of all the scheduled banks
c. Manages Credit Rating of Banks
d. Controls the credit operations of banks through quantitative and qualitative tools
e. All the above are the functions of RBI

7. Under which of the following rates, the banks avail long term loans from Reserve Bank of India (RBI) by putting no collateral securities? 
a. Marginal Standing Facility
b. Repo Rate
c. Bank Rate
d. Reverse Repo Rate
e. SLR

8. Expand the term FRBM? 

a. Financial Responsibility and Business management
b. Fiscal Responsibility and Business management
c. Financial Responsibility and Budget Management
d. Fiscal Responsibility and Budget Management
e. Formal Responsibility and Business Management

9. Money laundering means _____ 
a. Hiding of income source mainly to avoid income tax
b. Money acquired from undisclosed sources and deposited in foreign banks
c. Money acquired from undisclosed sources and deposited in foreign banks
d. Process of conversion of money obtained illegally to appear to have originated from legitimate sources to convert black money into white money.
e. Money acquired from drug trafficking

10. Base Rate is the rate below which no Bank can allow their lending to anyone. Who sets up this 'Base Rate' for Banks? 
a. Individuals Banks Board
b. Ministry of Commerce
c. Ministry of Finance
d. RBI
e. Interest Rate Commission of India

ANSWERS

1. Without keeping gold or silver deposit
2. Credit Creation
3. All the three
4. Exporters
5. Companies selling products in direct competition
6. Manages Credit Rating of Banks
7. Bank Rate
8. Fiscal Responsibility and Budget Management
9. Process of conversion of money obtained illegally to appear to have originated from legitimate sources to convert black money into white money
10. RBI