Dear Aspirants,
Banking Awareness for Dena Bank PO Exam 2018
With the increased competition in the field of banking examinations, it has now become very important to cover up all the sections efficiently. One subject that can help you bagging graceful marks in the minimum time in these examinations is Banking Awareness. Banking Awareness Quiz not only helps you deal with the General Awareness Section of Banking Exams but also, the Personal Interview round of Banking Recruitment.
Q1. What does EMI indicate in the context of a bank loan?
(a) Equal Monetary Incentive
(b) Equated Monthly Instalment
(c) Exact Monthly Indicator
(d) Exact Mean Index
(e) Easy Monthly Instalment
S1. Ans.(b)
Sol. Full form of EMI is Equated Monthly Instalment.
Sol. Full form of EMI is Equated Monthly Instalment.
Q2. Banks are required to provide loans to the priority sector upto a specified limit. What is the limit for public sector banks?
(a) 40 percent
(b) 32 percent
(c) 45 percent
(d) 35 percent
(e) 50 percent
S2. Ans.(a)
Sol. Priority Sector Lending (PSL) is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education, etc. 40 percent is the limit for public sector Banks under Priority Sector Lending.
Sol. Priority Sector Lending (PSL) is an important role given by the Reserve Bank of India (RBI) to the banks for providing a specified portion of the bank lending to few specific sectors like agriculture and allied activities, micro and small enterprises, poor people for housing, students for education, etc. 40 percent is the limit for public sector Banks under Priority Sector Lending.
Q3. The Securitization and Reconstruction of Financial Assets and Enforcement of Security Interests or SAFRAESI Act is meant to—
(a) Make recovery of bad loans simpler
(b) Enable banks to recover the loan amount due without the intervention of the court
(c) Make disbursement of loans simpler
(d) For faster sanction of loans and advances
(e) None of the given options is true
S3. Ans.(b)
Sol. The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institution to auction residential or commercial properties to recover loans.
Sol. The Securitisation and Reconstruction of Financial Assets and Enforcement of Securities Interest Act, 2002 (also known as the SARFAESI Act) is an Indian law. It allows banks and other financial institution to auction residential or commercial properties to recover loans.
Q4. The rate of interest banks charge to its customers is linked to—
(a) Risk premium rate
(b) Base rate lending
(c) Benchmark prime lending rate
(d) Reverse repo rate
(e) Cash Reserve Ratio
S4. Ans.(b)
Sol. This minimum rate is called the Base Rate in banking terms. It is the minimum rate of interest the banks are permitted to charge their customers.
Sol. This minimum rate is called the Base Rate in banking terms. It is the minimum rate of interest the banks are permitted to charge their customers.
Q5. Which of the following is a term not linked to banking and financial transactions?
(a) Provision coverage ratio
(b) Securitization
(c) Credit default swap
(d) Consolidation
(e) Assets and Liabilities
S5. Ans.(d)
Sol. Consolidation is not linked to banking and financial transactions.
Sol. Consolidation is not linked to banking and financial transactions.
Q6. Which one of the following does not qualify as priority sector lending by commercial banks?
(a) Software exports
(b) Small business loans
(c) Education loans
(d) Small industries loan
(e) Agriculture
S6. Ans.(a)
Sol. Software exports does not qualify as priority sector lending by commercial banks.
Sol. Software exports does not qualify as priority sector lending by commercial banks.
Q7. Bank loan against property requires the asset to be free from encumbrances. What does it mean?
(a) The asset to be free from any liability
(b) The asset to be properly registered
(c) The property to be fully constructed
(d) The asset should not have multiple owners
(e) None of the given options is true
S7. Ans.(a)
Sol. Bank loan against property requires the asset to be free from encumbrances that means, The asset to be free from any liability.
Q8. Which of the following lending qualifies as a priority sector loan?
(a) Loan for purchase of gold for marriage of daughter
(b) Loan for consumer durables
(c) Housing loan
(d) Loan for purchase of tractor
(e) None of the given options is true
S8. Ans.(d)
Sol. Agricultural term loans are sanctioned for purchase of new tractors. Loan for purchase of tractor qualifies as a priority sector loan.
Q9. Which of the following rates is decided by the market conditions and not by RBI?
(a) Bank rate
(b) SLR
(c) CRR
(d) Inflation rate
(e) Repo Rate
S9. Ans.(d)
Sol. Inflation rate is decided by the market conditions and not by RBI.
Sol. Inflation rate is decided by the market conditions and not by RBI.
Q10. Credit information companies are preparing credit reports on borrowers for sharing with banks to enable them to take proper credit decisions. What is the most important feature of this report about individual borrowers?
(a) Personal credit score
(b) List of banks from whom loans have been taken
(c) The total amount of loans availed
(d) The amount of outstanding loan
(e) None of the given options is true
S10. Ans.(a)
Sol. It is generally advisable to have a credit/CIBIL score of 750 or above to qualify for a personal loan Your credit score is a three-digit number between 300 and 900 that gives potential lenders a quick idea of your credit health.
Sol. It is generally advisable to have a credit/CIBIL score of 750 or above to qualify for a personal loan Your credit score is a three-digit number between 300 and 900 that gives potential lenders a quick idea of your credit health.
Q11. In what way does an asset reconstruction company help banks?
(a) By buying the non performing assets of banks
(b) Acts as recovery agents for banks
(c) Converts non performing assets into performing accounts
(d) Helps in rehabilitation of weak accounts by rescheduling the repayment plans
(e) None of the given options is true
S11. Ans.(a)
Sol. An Asset Reconstruction Company is a specialized financial institution that buys the NPAs or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. Or in other words, ARCs are in the business of buying bad loans from banks.
Sol. An Asset Reconstruction Company is a specialized financial institution that buys the NPAs or bad assets from banks and financial institutions so that the latter can clean up their balance sheets. Or in other words, ARCs are in the business of buying bad loans from banks.
Q12. What is the source of income for asset reconstruction companies?
(a) The commission paid by banks
(b) The fees charged from loan defaulters
(c) The difference in amounts recovered from the accounts less the amount paid to the bank for buying the account
(d) The retainer fees by the banks
(e) None of the given options is true
S12. Ans.(c)
Sol.
Sol.
Q13. There is frequent reference to CDR when nonperforming accounts of banks are discussed. What is the full form of CDR?
(a) Corporate Default Regulations
(b) Corporate Debt Restructuring
(c) Corporate Debt Regulations
(d) Civil Debt Regulations
(e) None of the given options is true
S13. Ans.(b)
Sol. CDR stands for Corporate Debt Restructuring.
Sol. CDR stands for Corporate Debt Restructuring.
Q14. Number of public sector banks have opened special units known as MSME hubs. What are they meant for?
(a) These are small and medium sized branches
(b) These are meant for units in industrial areas
(c) These hubs cater to specialized banking for micro, small and medium enterprises
(d) These outlets specially are for schools and educational institutions
(e) None of the given options is true
S14. Ans.(c)
Sol. These hubs cater to specialized banking for micro, small and medium enterprises
Sol. These hubs cater to specialized banking for micro, small and medium enterprises
Q15. What is meant by the merchant discount rate in respect of a credit card transaction?
(a) Merchants are given special commission for promoting bank transactions
(b) The bank commission charged from merchants who have point of sales terminals for card payments from customers
(c) The one time fees charged for providing point of sales terminal to merchants/shopkeepers
(d) The service tax payable by shops and merchant establishments having facility of card payments.
(e) None of the given options is true
S15. Ans.(b)
Sol. Merchant Discount Rate- The bank commission charged from merchants who have point of sales terminals for card payments from customers.
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