[DATED: 28th 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). FIMMDA stands for?
a) Foreign Investment Markets and Derivatives Market Association
b) Fixed Income Money Markets and Derivatives Association
c) Fixed Income and Money Market Development Association
d) Floating Income and Money Markets Derivative Assets
e) None of these
Answer: b)
Explanation: FIMMDA stands for The Fixed Income Money Market and Derivatives Association of India (FIMMDA). It is an Association of Commercial Banks, Financial Institutions and Primary Dealers. FIMMDA is a voluntary market body for the bond, Money And Derivatives Markets.
2). What is Gross Domestic Product?
a) It is the cost of production of all final goods and services made in the country.
b) It is the cost of services made within the borders of a country in a year.
c) It is the market value of all final goods and services made in the country.
d) It is the market value of all final goods and services made within the borders of a country in a year.
e) None of these
Answer: d)
Explanation: Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a country's borders in a specific time period. Though GDP is usually calculated on an annual basis, it can be calculated on a quarterly basis as well.
3). What is ‘financial inclusion’?
A. Easy access to bank accounts for safe parking of savings
B. Availability of cheap credits through appropriately designed loans for poor and low income households and small entrepreneur
C. Availability of basic financial products like insurance
a) Only (A)
b) Only (B)
c) Only (C)
d) Both (A) and (B)
e) All (A), (B) and (C)
Answer: b)
Explanation: Financial inclusion or inclusive financing is the delivery of financial services at affordable costs to sections of disadvantaged and low-income segments of society, in contrast to financial exclusion where those services are not available or affordable.
4). Which of the following rates signals the RBI’s long-term outlook on interest rates?
a) Repo Rate
b) Reverse Repo Rate
c) Bank Rate
d) SLR
e) CRR
Answer: c)
Explanation: Bank rate is the rate at which RBI lends money to other banks (or financial institutions. The bank rate signals the central bank’s long-term outlook on interest rates. If the bank rate moves up, long-term interest rates also tend to move up, and vice-versa.
5). Expand the term SWIFT.
a) Society for Worldwide International Financial Teleservices
b) Society for Worldwide Interbank Financial Telecommunications
c) Society for Worldwide International Financial Transfers
d) Society for Worldwide Interbank Fiscal
e) None of these
Answer: b)
Explanation: The Society for Worldwide Interbank Financial Telecommunication (SWIFT) provides a network that enables financial institutions worldwide to send and receive information about financial transactions in a secure, standardized and reliable environment.
6). Which of the following agencies in India is responsible for computation of national income?
a) NCAER
b) CSO
c) NSS
d) RBI
e) SBI
Answer: b)
Explanation: The Central Statistical Organisation (CSO) is responsible for coordination of statistical activities in the country, including National Income Accounting; conduct of Annual Survey of Industries, Economic Censuses, compilation of Index of Industrial Production, Consumer Price Indices etc.
7). Bancassurance is known as
a) an insurance scheme to insure bank deposits
b) an insurance scheme exclusively for the employees of banks
c) a composite financial service offering both banking and insurance products
d) a bank deposit scheme exclusively for employees of insurance companies
e) None of these.
Answer: e)
Explanation: The bank insurance model (BIM), also sometimes known as bancassurance or allfinanz, is the partnership or relationship between a bank and an insurance company, or a single integrated organisation, whereby the insurance company uses the bank sales channel in order to sell insurance products, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank's client base.
8). Which of the following Acts was framed specially to deal more effectively with the problem of Non-Performing Assets in banking system?
a) Companies Act
b) Banking Regulation Act
c) Foreign Exchange Management Act
d) Industrial Dispute Act
e) SARFAESI Act
Answer: e)
Explanation: The SARFAESI Act empowers Banks / Financial Institutions to recover their non-performing assets without the intervention of the Court. The Act provides three alternative methods for recovery of non-performing assets, namely; Securitisation, Asset Reconstruction, Enforcement of Security without intervention of the court.
9). Bridge loans refer to
a) Loans granted to construction companies for construction of bridges
b) Loan granted to PWD for construction of bridges over rivers
c) Short term loan allowed by banks to their customers, pending disbursement of term loans by financial institutions
d) Loan granted to Railway for construction of bridges
e) None of these
Answer: c)
Explanation: A bridge loan is short term financing for an individual or business until permanent financing or the next stage of financing is obtained. Money from the new financing is generally used to "take out" (i.e. to pay back) the bridge loan, as well as other capitalization needs.
10). Structure of Basel II is based on how many pillars?
a) Two
b) Ten
c) Four
d) Five
e) Three
Answer: e)
Explanation: Basel II uses a "three pillars" concept – (1) minimum capital requirements (addressing risk), (2) supervisory review and (3) market discipline. The Basel I accord dealt with only parts of each of these pillars.
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