Free Banking Exam Commercial Bank Question and Answers — Questions and Answers
Question 1: When the rate of inflation increases, the purchasing power of money falls.
- increases
- decreases (Correct answer)
- stable
- Can't say
Correct answer: decreases
People's capacity to purchase products is reduced by price inflation. If an employee's pay stays the same but the cost of things rises, they will be able to purchase fewer items. People will be able to purchase more goods when wages rise.
Question 2: When was the first publication of OMBUDS MEN SCHEME?
- Wed Nov 01 00:00:00 UTC 2006
- Thu Jun 01 00:00:00 UTC 1995 (Correct answer)
- Thu Oct 01 00:00:00 UTC 1981
- Thu Jan 01 00:00:00 UTC 1998
Correct answer: Thu Jun 01 00:00:00 UTC 1995
The year 1995 saw the introduction of this program.
Question 3: What exactly is MSF?
- Mid Term Sanction facility
- Marginal Standing Facility (Correct answer)
- Micro and Small Finance
- Medium Size finance
Correct answer: Marginal Standing Facility
The margin standing facility (MSF) rate is the cost at which the scheduled banks can overnight borrow money from the RBI in exchange for government assets.
Question 4: Which NPCI-launched Indian card program?
- Visa
- RuPay (Correct answer)
- Master Card
- Citi
Correct answer: RuPay
The card program launched by NPCI is called RuPay.
Question 5: Which central bank is regarded as the mother of them all?
- Reserve Bank of India
- Risks Bank of Sweden
- Federal Reserve Bank
- Bank of England (Correct answer)
Correct answer: Bank of England
The Bank of England, which was established in 1694, is the UK's central bank. The Bank, also referred to as the "Old Lady" of Threadneedle Street, serves to further the welfare of the British people by preserving monetary and financial stability.
Question 6: What year did the printing of Rs. 5 notes start up again?
- 2008
- 2009 (Correct answer)
- 2010
- 2011
Correct answer: 2009
In 2009, the production of Rs. 5 notes, which had previously ceased, resumed.
Question 7: When the inflation rate rises
- Amount of money in circulation decreases
- Purchasing power of money increases
- purchasing power of money decreases (Correct answer)
- Value of money increases
Correct answer: purchasing power of money decreases
The economy experiences a money shortage as a cause of increasing inflation, which decreases the purchasing power.
Question 8: What is the name of the percentage of cash reserves that banks must maintain with the RBI?
- Net demand and time liabilities
- Liquidity ratio
- Statutory liquidity ratio
- Cash Reserve Ratio (Correct answer)
Correct answer: Cash Reserve Ratio
Commercial banks are required to retain a minimum amount of reserves, either in cash or as deposits with the central bank, known as the cash reserve ratio (CRR), which is a percentage of all customer deposits. The CRR is determined in accordance with the policies of the nation's central bank.
Question 9: What does PPP's entire name mean?
- Purchasing power parity (Correct answer)
- Popular private project
- Public Private partnership
- Partial payment project
Correct answer: Purchasing power parity
A theory of economics known as purchasing power parity (PPP) roughly calculates the total adjustment that must be made to the currency exchange rate between nations in order for the exchange to be equal to the purchasing power of each nation's currency.
Question 10: Business banks are
- operated on small scale
- Co-operative houses
- Joint stock banks (Correct answer)
- run by the registrar of co-operative association
Correct answer: Joint stock banks
A commercial bank is a bank that provides services to both businesses and the general population.
Question 11: What Does Repo Rate Mean?
- rate at which banks lend to creditors
- rate at which commercial banks lend to RBI
- rate at which RBI lends to commercial banks (Correct answer)
- rate at which inter banks lend each other
Correct answer: rate at which RBI lends to commercial banks
Repo rate refers to the interest rate at which the RBI lends money to commercial banks. It serves as a tool for monetary policy. Banks can borrow money from the RBI if they are short on cash. Banks are able to borrow money at a lower cost when the repo rate is reduced, and vice versa.
Question 12: Which of the following might serve as a diversification example?
- Investing money in different types of assest
- Putting money in different banks
- Buying real estate in different countries
- Buying in 100 largest companies (Correct answer)
Correct answer: Buying in 100 largest companies
The concept of diversification involves allocating resources in a way that minimizes exposure to any one specific asset or risk. Investing in a variety of assets can help lower risk or volatility, which is a frequent step towards diversification.
Question 13: Financial inclusion entails offering?
- Ration at affordable cost to persons not yet given the same
- House at affordable cost to persons not yet given the same
- Food at affordable cost to persons not yet given the same
- Financial services namely payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the bank (Correct answer)
Correct answer: Financial services namely payments, remittances, savings, loans and insurance at affordable cost to persons not yet given the bank
In contrast to financial exclusion, which occurs when those services are unavailable or unaffordable, financial inclusion or inclusive finance refers to the provision of financial services at reasonable costs to sectors of the underprivileged and low-income segments of society.
Question 14: What does AMC in mutual funds stand for in full?
- Assest Management Company (Correct answer)
- Asset Management Committee
- Accenture Management Company
- Accenture Management Committee
Correct answer: Assest Management Company
An asset management company (AMC) is a business that makes investments in securities that align with its stated financial objectives using funds collected from clients. Investors have more investment options and diversity thanks to asset management firms than they otherwise would.
Question 15: When did the SARFAESI Act begin?
- 1999
- 2000
- 2001
- 2002 (Correct answer)
Correct answer: 2002
The SARFAESI Act went into effect in 2002.
Question 16: Giving a customer banking services without allowing him to enter the bank branch is known as .
- Virtual banking (Correct answer)
- Mobile banking
- Universal banking
- Relationship banking
Correct answer: Virtual banking
Banking is done using the internet and mobile devices.
Free Banking Exam Commercial Bank Question and Answers
When the rate of inflation increases, the purchasing power of money falls.