Important Banking Awareness Questions with Detailed Explanation for BOB/SBI PO 2017

[DATED: 27th April] Important Banking Awareness Questions with Detailed Explanation for BOB/SBI PO 2017:

Dear Readers, the List of important Banking Awareness Quiz with detailed explanation for upcoming BOB/SBI PO 2017 exams was given here. Candidates those who are preparing for the exams can use this.

1). Which of the following documents is/are considered as officially valid document to satisfy KYC norms for opening a Bank account?

A. Passport

C. Aadhar number issued by Unique Identification Authority of India

a) Only (A)

b) b) Only (B)

c) Only (A) and (B)

d) All (A), (B) and (C)

e) Only (B) and (C)

Answer: d)
Explanation: The Government of India has notified six documents as ‘Officially Valid Documents’ (OVDs) for the purpose of producing proof of identity. These six documents are Passport, Driving Licence, Voters’ Identity Card, PAN Card, Aadhaar Card issued by UIDAI and NREGA Job Card. You need to submit any one of these documents as proof of identity. If these documents also contain your address details, then it would also be accepted as ‘proof of address’. If the document submitted by you for proof of identity does not contain address details, then you will have to submit another officially valid document which contains address details.

2). Fiscal Policy is concerned with which of the following?

a) Export and Import

b) Revenue and Expenditure

c) Issue of Currency

d) Population Control

e) Education for all

Answer: b)
Explanation: In economics and political science, fiscal policy is the use of government revenue collection (mainly taxes) and expenditure (spending) to influence the economy.

3). Which of the following is the apex institution that handles refinance for agriculture and rural development in India?

a) RBI

b) SIDBI

c) NABARD

d) SEBI

e) None of these

Answer: c)
Explanation: National Bank for Agriculture and Rural Development (NABARD) is an apex development bank in India, headquartered at Mumbai with branches all over India. The Bank has been entrusted with "matters concerning policy, planning and operations in the field of credit for agriculture and other economic activities in rural areas in India"

4). Foreign Exchange Reserves of India are kept in the custody of which of the following?

a) International Bank for Reconstruction and Development

b) International Monetary Fund

c) Government Treasury

d) Reserve Bank of India

e) State Bank of India

Answer: d)
Explanation: The Foreign exchange reserves of India are India's holdings of cash, bank deposits, bonds, and other financial assets denominated in currencies other than India's national currency, the Indian rupee. The reserves are managed by the Reserve Bank of India for the Indian government and the main component is foreign currency assets.

5). Banks borrow money from the RBI on which of the following rates?

a) Reverse Repo Rate

b) Repo Rate

c) SLR

d) CRR

e) Savings Rate

Answer: b)
Explanation: Repo rate is the rate at which the central bank of a country (Reserve Bank of India in case of India) lends money to commercial banks in the event of any shortfall of funds. Repo rate is used by monetary authorities to control inflation.

6). The Reverse Mortgage scheme is launched to give benefit to which of the following groups of the society?

a) Govt employees

b) Senior citizens

c) Unemployed youth

d) War widows

e) None of these

Answer: b)
Explanation: In simple terms, a reverse mortgage is the "opposite" of a conventional home loan. A reverse mortgage enables a senior citizen to receive a regular stream of income from a lender (a bank or a financial institution) against the mortgage of his home.

7). One of the major challenges banking industry is facing these days is deliberate efforts of some people to bring money earned through illegal activities in circulation. Which of the following acts has been passed to prevent this activity?

a) Payment and Settlements Act

b) Banking Regulation Act

c) Negotiable Instruments Act

d) Narcotics and Psychotropic Substance Act

e) Prevention of Money Laundering Act

Answer: e)
Explanation: Prevention of Money Laundering Act, 2002 is an Act of the Parliament of India enacted to prevent money-laundering and to provide for confiscation of property derived from money-laundering. PMLA and the Rules notified there under came into force with effect from July 1, 2005.

8). Which of the following organisations provides guarantee to the exporters?

a) Exim Bank

b) Export Credit Guarantee Corporation

c) Director General Foreign Trade

d) Reserve Bank of India

e) Registrar of companies

Answer: b)
Explanation: The ECGC Limited (Formerly Export Credit Guarantee Corporation of India Ltd) is a company wholly owned by the Government of India based in Mumbai, Maharashtra. It provides export credit insurance support to Indian exporters and is controlled by the Ministry of Commerce. Government of India had initially set up Export Risks Insurance Corporation (ERIC) in July 1957. It was transformed into Export Credit and Guarantee Corporation Limited (ECGC) in 1964 and to Export Credit Guarantee Corporation of India in 1983.

9). What is the full form of IRR as used in banking/financial sector?

a) Internal Rate of Return

b) Internal Revaluation Reserve

c) Investment Reserve Ratio

d) Internal Risk Return

e) None of the above

Answer: a)
Explanation: Internal rate of return or IRR is that rate of return at which NPV from the above investment & cash flows will become zero. IRR is the rate of interest that makes the sum of all cash flows zero, and is useful to compare one investment to another.

10). Which of the following organisations provides credit history of the borrowers?

a) CIBIL

b) ARCIL

c) SEBI

d) RBI

e) CCIL

Answer: a)
Explanation: Credit Information Bureau India Limited(CIBIL) is India’s first Credit Information Company (CIC) founded in August 2000. CIBIL collects and maintains records of an individual’s payments pertaining to loans and credit cards. These records are submitted to CIBIL by member banks and credit institutions, on a monthly basis. This information is then used to create Credit Information Reports (CIR) and credit scores which are provided to credit institutions in order to help evaluate and approve loan applications.