Banking and Financial Awareness for BOB/IBPS Exams

Q1. In order to attract more foreign exchange the Govt of India decided to allow foreign investment in LLP firms. What is full form of “LLP” as used in this reference?

(a) Local Labour Promotion

(b) Low Labour Projects

(c) Limited Loan Partnership

(d) Longer Liability Partnership

(e) Limited Liability Partnership

Q2. The process by which a life insurance policyholder can transfer all rights, title and interest- under a policy contract to a third person is known as?

(a) Assignment of the policy

(b) Hypothecation of the policy

(c) Reinvestment of the policy

(d) Negotiation of the policy

(e) Nomination of the policy

Q3. Which of the following is the popular name of the norms by which a bank satisfies itself about the customer’s identity and activities?

(a) Basel norms

(b) KYC norms

(c) Service norms

(d) Lending norms

(e) None of the above

Q4. Banks, today, in addition to normal banking services, offer which of the following services? 

(a) Internet Banking

(b) Depository Services

(c) Financial Counseling Services

(d) Only (a) and (b) above

(e) All of the above

Q5. KYC guidelines followed by the banks have been framed on the recommendations of the?

(a) Ministry of Home Affairs

(b) Ministry of Rural Development

(c) Indian Banks Association

(d) Financial Intelligence Unit

(e) Reserve Bank of India

Q6. Banking Ombudsman is appointed by _____________. 

(a) Government of India

(b) State Governments

(c) RBI

(d) ECGC

(e) Exim Bank

Q7. Which of the following statements is true?

(a) Banks cannot accept demand and time deposits from public

(b) Banks can accept only demand deposits from public

(c) Banks can accept only time deposits from public

(d) Banks can accept both demand and time deposits from public

(e) Banks can accept demand and time deposits only from government

Q8. Money laundering normally involved

(a) placement of funds

(b) layering of funds

(c) integrating of fund

(d) All of the above

(e) None of the above

Q9. Many times, we hear about the ‘Banking Ombudsman’. What is/are the major roles of same?

I. Banking Ombudsman is a quasi-judicial authority having powers to summon, the banks and the customers both in case of dispute.

II. The Banking Ombudsman are appointed by the President of India and are retired judges of the High or Supreme Courts.

III. The decisions/judgements given by the Banking Ombudsman cannot be taken to any court of justice as their decisions are last in case of bank related problems disputes. 

Select the correct answer using the codes given below

(a) Only I

(b) Only II

(c) Only III 

(d) All of the above

(e) None of the above

Q10. Which of the following statements is correct about soiled/mutilated note?

(a) All banks are authorised to accept soiled notes across their counters and pay the exchange value

(b) Banks are expected to offer this service even to non-customers

(c) All public sector bank branches and currency chest branches of private sector banks are authorised to adjudicate and

pay value in respect of mutilated notes

(d) The RBI has also authorised all commercial bank branches to treat certain notes in ‘two pieces’ as soiled notes and pay exchange value

(e) All of the above

Q11. In the Money market operations, the item widely accepted is?

(a) Inter Bank Participation Certificates 

(b) Certificate of Deposits 

(c) Treasury Bills

(d) All of the above 

(e) None of the above

Q12. To meet a significant increase in demand for bank credit, a bank may?

(a) make use of excess reserves 

(b) borrow from other banks 

(c) borrow from the Reserve Bank of India 

(d) All of the above

(e) None of the above

Q13. The “bank rate” is?

(a) free to fluctuate according to the forces of demand and supply 

(b) set by the Reserve Bank of India 

(c) set by the Reserve Bank of India as directed by the Union Ministry of Finance 

(d) set by the Reserve Bank of India as directed by the Indian Banks’ Association

(e) None of the above

Q14. Pledge means? 

(a) advance against goods 

(b) open working capital limits 

(c) bailment of goods as security for payment of a debt or performance of a promise

(d) All of the above

(e) None of the above 

Q15. What are the RBI guidelines for the development of Interest Rate Swaps (IRS)? 

(a) Banks can use IRS for hedging and Trading both 

(b) MIFOR is a benchmark for IRS

(c) Under ISDA agreement Banks can opt for dual jurisdiction i.e., Indian as well as common law 

(d) All of the above

(e) None of the above