Section 1: Multiple Choice Questions (50 MCQs)
1. Which institution acts as the lender of last resort in India?
a) State Bank of India
b) Reserve Bank of India
c) Ministry of Finance
d) NABARD
Answer: b) Reserve Bank of India
2. What is the current minimum cash reserve ratio (CRR) maintained by commercial banks kept with?
a) In cash with themselves
b) With the RBI
c) In government securities
d) With State Bank of India
Answer: b) With the RBI
3. What does “Repo Rate” refer to?
a) Rate at which RBI lends money to commercial banks for short terms
b) Rate at which commercial banks lend to RBI
c) Interest rate given on savings accounts
d) Rate at which banks lend to public
Answer: a) Rate at which RBI lends money to commercial banks for short terms
4. Which rate is used by the RBI to absorb liquidity from the banking system?
a) Bank Rate
b) Reverse Repo Rate / SDF Rate
c) Marginal Standing Facility
d) Prime Lending Rate
Answer: b) Reverse Repo Rate / SDF Rate
5. What does UPI stand for in digital payments?
a) Universal Payment Interface
b) Unified Payments Interface
c) United Payment Integration
d) Unique Payment Identification
Answer: b) Unified Payments Interface
6. NPCI was established under the provisions of which act?
a) Reserve Bank of India Act, 1934
b) Banking Regulation Act, 1949
c) Payment and Settlement Systems Act, 2007
d) Companies Act, 2013
Answer: c) Payment and Settlement Systems Act, 2007
7. Which of the following is NOT a type of bank account?
a) Savings Account
b) Current Account
c) Recurring Deposit Account
d) Demat Credit Account
Answer: d) Demat Credit Account
8. What is the maximum limit for an IMPS transfer per day?
a) ₹1 Lakh
b) ₹2 Lakhs
c) ₹5 Lakhs
d) No limit
Answer: c) ₹5 Lakhs
9. Which committee recommended the establishment of NABARD?
a) Narasimham Committee
b) B. Sivaraman Committee
c) Urjit Patel Committee
d) Tarapore Committee
Answer: b) B. Sivaraman Committee
10. What is the minimum capital required to set up a Universal Bank in India?
a) ₹100 Crore
b) ₹200 Crore
c) ₹500 Crore
d) ₹1000 Crore
Answer: c) ₹500 Crore
11. Under Priority Sector Lending (PSL), what percentage of ANBC must domestic commercial banks allocate?
a) 30%
b) 40%
c) 18%
d) 10%
Answer: b) 40%
12. What does CTS stand for in cheque processing?
a) Cheque Truncation System
b) Cheque Transfer System
c) Central Transaction System
d) Core Tracking System
Answer: a) Cheque Truncation System
13. What is the valid duration of a standard cheque from its date of issuance?
a) 6 months
b) 3 months
c) 1 month
d) 1 year
Answer: b) 3 months
14. Which norm dictates capital adequacy requirements globally for banks?
a) FATF Norms
b) Basel Norms
c) GAAP Norms
d) IFRS Norms
Answer: b) Basel Norms
15. What type of risk arises from a counterparty failing to meet contractual obligations?
a) Market Risk
b) Operational Risk
c) Credit Risk
d) Liquidity Risk
Answer: c) Credit Risk
16. A loan account becomes a Non-Performing Asset (NPA) when interest or installment remains overdue for how many days?
a) 30 days
b) 60 days
c) 90 days
d) 180 days
Answer: c) 90 days
17. Which regulatory authority regulates the capital market in India?
a) RBI
b) SEBI
c) IRDAI
d) PFRDA
Answer: b) SEBI
18. What is the full form of NEFT?
a) National Electronic Funds Transfer
b) Nationwide Electronic Money Transfer
c) Net Electronic Funds Transmission
d) National Exchange Fund Transfer
Answer: a) National Electronic Funds Transfer
19. Which act empowers the RBI to inspect and supervise commercial banks?
a) RBI Act, 1934
b) Banking Regulation Act, 1949
c) Negotiable Instruments Act, 1881
d) Companies Act, 2013
Answer: b) Banking Regulation Act, 1949
20. DICGC provides insurance cover for bank deposits up to what maximum amount per depositor per bank?
a) ₹1 Lakh
b) ₹2 Lakhs
c) ₹5 Lakhs
d) ₹10 Lakhs
Answer: c) ₹5 Lakhs
21. What is the minimum tenure for a Fixed Deposit (FD) in commercial banks?
a) 1 day
b) 7 days
c) 15 days
d) 30 days
Answer: b) 7 days
22. What does LAF stand for in RBI’s monetary operations?
a) Liquidity Adjustment Facility
b) Loan Adjustment Framework
c) Liquid Asset Format
d) Lender Allocation Facility
Answer: a) Liquidity Adjustment Facility
23. Which institution regulates insurance companies in India?
a) SEBI
b) IRDAI
c) PFRDA
d) AMFI
Answer: b) IRDAI
24. Commercial Papers (CPs) are issued for short-term borrowing by which entities?
a) Farmers
b) Highly rated corporate borrowers
c) Retail customers
d) Micro enterprises
Answer: b) Highly rated corporate borrowers
25. Treasury Bills (T-Bills) in India are issued by:
a) State Governments
b) Government of India
c) Commercial Banks
d) Corporate Houses
Answer: b) Government of India
26. What is the minimum duration for Treasury Bills issued in India?
a) 14 days
b) 91 days
c) 182 days
d) 364 days
Answer: b) 91 days
27. The clearing house for government securities transactions in India is:
a) NSDL
b) CDSL
c) CCIL
d) BSE
Answer: c) CCIL
28. Foreign Direct Investment (FDI) in Private Sector Banking in India is allowed up to what percentage under automatic and approval routes combined?
a) 49%
b) 51%
c) 74%
d) 100%
Answer: c) 74%
29. What is a “Stale Cheque”?
a) A post-dated cheque
b) A cheque presented after 3 months from date of issue
c) A torn cheque
d) A forged cheque
Answer: b) A cheque presented after 3 months from date of issue
30. Which section of the Negotiable Instruments Act, 1881 deals with dishonour of cheque for insufficiency of funds?
a) Section 138
b) Section 123
c) Section 85
d) Section 4
Answer: a) Section 138
31. Who heads the Monetary Policy Committee (MPC) of India?
a) Finance Minister of India
b) Governor of RBI
c) Deputy Governor in charge of monetary policy
d) Chief Economic Advisor
Answer: b) Governor of RBI
32. How many members compose the Monetary Policy Committee (MPC)?
a) 5
b) 6
c) 7
d) 4
Answer: b) 6
33. What is the full form of SARFAESI Act?
a) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
b) Security and Recovery of Financial Assets Act
c) Standard Reconstruction of Financial Assets Act
d) Systemic Recovery of Assets and Financial Enforcement Act
Answer: a) Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest
34. Which entity manages the BHIM app?
a) RBI
b) NPCI
c) NITI Aayog
d) C-DAC
Answer: b) NPCI
35. What is the expansion of SWIFT in international banking?
a) Society for Worldwide Interbank Financial Telecommunication
b) System for World Interbank Fund Transfer
c) Secure Worldwide Interbank Financial Transfer
d) Society for World Internal Financial Transactions
Answer: a) Society for Worldwide Interbank Financial Telecommunication
36. Which card type allows making payments directly from a linked bank account balance?
a) Credit Card
b) Debit Card
c) Charge Card
d) Forex Card
Answer: b) Debit Card
37. A “Mutilated Cheque” refers to:
a) A cheque written in two languages
b) A cheque torn into two or more pieces
c) A cheque older than three months
d) A cheque with future date
Answer: b) A cheque torn into two or more pieces
38. The headquarters of the Asian Development Bank (ADB) is located in:
a) Tokyo, Japan
b) Beijing, China
c) Manila, Philippines
d) Singapore
Answer: c) Manila, Philippines
39. What is the maximum limit of deposit allowed per individual in a Payments Bank account?
a) ₹1 Lakh
b) ₹2 Lakhs
c) ₹5 Lakhs
d) No limit
Answer: b) ₹2 Lakhs
40. White Label ATMs are set up, owned, and operated by:
a) State Bank of India
b) Non-Bank entities
c) Foreign Banks
d) Regional Rural Banks
Answer: b) Non-Bank entities
41. What is the tenure range for Certificate of Deposit (CD) issued by commercial banks?
a) 7 days to 1 year
b) 15 days to 3 years
c) 1 month to 5 years
d) 91 days to 1 year
Answer: a) 7 days to 1 year
42. What does CAMELS framework stand for in bank supervision?
a) Capital, Assets, Management, Earnings, Liquidity, Sensitivity
b) Cash, Assets, Money, Earnings, Liabilities, Security
c) Capital, Audit, Management, Expense, Loans, Solvency
d) Credit, Assets, Management, Equity, Liquidity, System
Answer: a) Capital, Assets, Management, Earnings, Liquidity, Sensitivity
43. Which of the following is an example of a Development Financial Institution (DFI) in India?
a) HDFC Bank
b) NABARD
c) ICICI Prudential
d) Paytm Payments Bank
Answer: b) NABARD
44. Which organization issues Sovereign Gold Bonds (SGB) on behalf of the Government of India?
a) SEBI
b) Reserve Bank of India
c) State Bank of India
d) MMTC
Answer: b) Reserve Bank of India
45. What is the full form of KYC in banking?
a) Know Your Customer
b) Know Your Capital
c) Keep Your Cash
d) Key Yield Calculation
Answer: a) Know Your Customer
46. “Narrow Money” in Indian monetary aggregates refers to:
a) M1
b) M2
c) M3
d) M4
Answer: a) M1
47. Broad Money in India is denoted by:
a) M1
b) M2
c) M3
d) M4
Answer: c) M3
48. The primary regulator for Regional Rural Banks (RRBs) supervision is:
a) SIDBI
b) NABARD
c) SEBI
d) EXIM Bank
Answer: b) NABARD
49. What is the maximum period within which a bank must resolve an Ombudsman complaint before escalation?
a) 15 days
b) 30 days
c) 45 days
d) 60 days
Answer: b) 30 days
50. What is a “Crossed Cheque”?
a) A cheque that cannot be cashed at the bank counter and must be credited to an account
b) A cheque drawn on a foreign bank
c) A cancelled cheque
d) A cheque signed by two individuals
Answer: a) A cheque that cannot be cashed at the bank counter and must be credited to an account
Section 2: Fill in the Blanks (50 Questions)
1. The central bank of India is the __________.
Answer: Reserve Bank of India
2. The head office of the Reserve Bank of India is located in __________.
Answer: Mumbai
3. The RBI was established in the year __________.
Answer: 1935
4. The nationalization of RBI took place in the year __________.
Answer: 1949
5. The first Governor of the Reserve Bank of India was __________.
Answer: Sir Osborne Smith
6. The first Indian Governor of the Reserve Bank of India was __________.
Answer: C. D. Deshmukh
7. The maximum number of Deputy Governors in RBI is __________.
Answer: 4
8. Imperial Bank of India was renamed as __________ in 1955.
Answer: State Bank of India
9. 14 major commercial banks were nationalized in India in the year __________.
Answer: 1969
10. 6 more commercial banks were nationalized in the year __________.
Answer: 1980
11. Regional Rural Banks (RRBs) were established in the year __________.
Answer: 1975
12. The first Regional Rural Bank in India was __________ Bank.
Answer: Prathama
13. NABARD was established in the year __________.
Answer: 1982
14. SIDBI headquarters is located in __________.
Answer: Lucknow
15. NHB stands for __________.
Answer: National Housing Bank
16. EXIM Bank of India was established in the year __________.
Answer: 1982
17. The monetary policy framework in India target inflation rate is set by the government in consultation with RBI at __________ percent.
Answer: 4 (with a tolerance band of +/- 2%)
18. Statutory Liquidity Ratio (SLR) is maintained under Section 24 of the __________ Act.
Answer: Banking Regulation
19. Cash Reserve Ratio (CRR) is maintained under Section 42 of the __________ Act.
Answer: Reserve Bank of India
20. Inflation measured by Consumer Price Index is called __________ inflation.
Answer: Headline
21. Real Time Gross Settlement (RTGS) minimum transaction limit is ₹__________.
Answer: 2 Lakhs
22. IFSC code contains __________ alphanumeric characters.
Answer: 11
23. The 5th character of the IFSC code is always __________.
Answer: 0 (Zero)
24. MICR code present on cheques consists of __________ digits.
Answer: 9
25. The first 3 digits of a MICR code represent the __________.
Answer: City code
26. SWIFT code consists of either __________ or 11 characters.
Answer: 8
27. PAN card consists of __________ alphanumeric digits.
Answer: 10
28. Aadhaar card contains a unique __________ digit number.
Answer: 12
29. The minimum age required to open a single savings account for a minor is __________ years.
Answer: 10
30. Basic Savings Bank Deposit Account (BSBDA) requires __________ minimum balance.
Answer: Zero
31. Small Finance Banks must allocate __________ percent of their net bank credit to priority sector lending.
Answer: 75
32. Payments banks are __________ allowed to issue credit cards.
Answer: Not
33. Money market deals with __________ term financial instruments.
Answer: Short
34. Capital market deals with __________ term financial instruments.
Answer: Long
35. The principal regulator of capital markets in India is __________.
Answer: SEBI
36. Call money market deals with overnight funds for a period of __________ day.
Answer: 1
37. Notice money market deals with funds for a period between 2 days and __________ days.
Answer: 14
38. Term money market deals with funds for a period exceeding __________ days.
Answer: 14
39. Basel Committee on Banking Supervision (BCBS) headquarters is located in __________, Switzerland.
Answer: Basel
40. The current Basel framework implemented globally and in India is Basel __________.
Answer: III
41. Capital to Risk-Weighted Assets Ratio is abbreviated as __________.
Answer: CRAR (or CAR)
42. The process of converting physical security certificates into electronic format is called __________.
Answer: Dematerialization (Demat)
43. Financial Inclusion scheme launched by Government of India in 2014 is __________.
Answer: Pradhan Mantri Jan Dhan Yojana (PMJDY)
44. Under PMJJBY, life insurance cover provided is ₹__________ Lakhs.
Answer: 2
45. Under PMSBY, accidental insurance cover provided for full disability is ₹__________ Lakhs.
Answer: 2
46. The pension scheme for unorganized sector workers aged 18-40 is called __________ Pension Yojana.
Answer: Atal
47. Cheque definition is given under Section 6 of the __________ Act, 1881.
Answer: Negotiable Instruments
48. Promissory Note is defined under Section __________ of Negotiable Instruments Act, 1881.
Answer: 4
49. Bill of Exchange is defined under Section __________ of Negotiable Instruments Act, 1881.
Answer: 5
50. Ombudsman scheme for resolving customer complaints in banks, NBFCs, and digital transactions was integrated into the __________ Ombudsman Scheme by RBI in 2021.
Answer: Reserve Bank – Integrated
Section 3: Yes / No Questions (50 Questions)
1. Is the Reserve Bank of India authorized to issue currency notes of ₹1 denomination?
Answer: No (Issued by Ministry of Finance)
2. Does the RBI accept direct deposits from general public individuals?
Answer: No
3. Is NEFT system operational 24×7, 365 days a year?
Answer: Yes
4. Is RTGS system operational 24×7, 365 days a year?
Answer: Yes
5. Can a Payments Bank accept fixed deposits from customers?
Answer: No
6. Can Payments Banks grant loans or issue credit cards to retail customers?
Answer: No
7. Is there any minimum limit for transferring funds through NEFT?
Answer: No
8. Is there any upper ceiling limit set by RBI for RTGS transactions?
Answer: No
9. Does DICGC insure deposits held in Regional Rural Banks?
Answer: Yes
10. Are foreign currency deposits held in Indian banks covered under DICGC deposit insurance?
Answer: No
11. Is CIBIL score a 3-digit number ranging between 300 and 900?
Answer: Yes
12. Does a Savings account pay a higher interest rate than a Fixed Deposit account?
Answer: No
13. Is a Cheque considered a negotiable instrument?
Answer: Yes
14. Can a bearer cheque be transferred simply by delivery without endorsement?
Answer: Yes
15. Is crossing of a cheque mandatory for its validity?
Answer: No
16. Does an order cheque require endorsement and delivery for transfer?
Answer: Yes
17. Can a minor above 10 years operate a savings bank account independently?
Answer: Yes
18. Is Statutory Liquidity Ratio (SLR) maintained only in pure cash with RBI?
Answer: No (Maintained in cash, gold, or approved unencumbered securities)
19. Is Cash Reserve Ratio (CRR) maintained in approved government bonds?
Answer: No (Maintained only in cash with RBI)
20. Does RBI pay interest to commercial banks on CRR deposits kept with it?
Answer: No
21. Is SEBI responsible for regulating the money market in India?
Answer: No (Regulated primarily by RBI)
22. Is Commercial Paper an unsecured money market instrument?
Answer: Yes
23. Are Treasury Bills issued at a discount to face value?
Answer: Yes
24. Does the Government of India issue Treasury Bills for 1 year or longer tenures?
Answer: No (Maximum tenure is 364 days)
25. Is NABARD a wholly owned entity of the Government of India?
Answer: Yes
26. Is Small Industries Development Bank of India (SIDBI) headquartered in Mumbai?
Answer: No (Headquartered in Lucknow)
27. Can a non-bank entity operate White Label ATMs in India?
Answer: Yes
28. Do Brown Label ATMs belong to non-bank operators where bank branding and systems are used?
Answer: Yes
29. Is an overdraft facility available under Pradhan Mantri Jan Dhan Yojana (PMJDY) accounts?
Answer: Yes
30. Is the maximum overdraft limit under PMJDY scheme ₹10,000?
Answer: Yes
31. Can a firm open a Savings Bank account for commercial trading purposes?
Answer: No (Current account is required)
32. Is interest earned on Savings accounts completely tax-free under Section 80TTA up to ₹10,000?
Answer: Yes
33. Does the Monetary Policy Committee meet at least 4 times in a fiscal year?
Answer: Yes
34. Is the Governor of RBI appointed by the President of India directly without Cabinet involvement?
Answer: No (Appointed by Appointments Committee of the Cabinet)
35. Is a Demand Draft valid for 3 months from its date of issue?
Answer: Yes
36. Can a Demand Draft be dishonored due to insufficient funds in the buyer’s account?
Answer: No (Pre-funded instrument)
37. Is Inflation measured by Wholesale Price Index (WPI) used by RBI as primary metric for target inflation rate?
Answer: No (RBI uses CPI)
38. Does the IBC (Insolvency and Bankruptcy Code) apply to individuals as well as companies?
Answer: Yes
39. Is LAF (Liquidity Adjustment Facility) used by RBI for managing day-to-day liquidity?
Answer: Yes
40. Is a “Clean Bill” accompanied by documents of title to goods?
Answer: No (Documents attached bills are Documentary Bills)
41. Is Priority Sector Lending target for Small Finance Banks higher than that for Public Sector Banks?
Answer: Yes (75% vs 40%)
42. Can Foreign Banks operating in India with 20 or more branches skip Priority Sector Lending targets?
Answer: No
43. Is inflation calculated on a year-on-year basis in standard CPI reporting?
Answer: Yes
44. Does an ATM pin code consist of 4 digits in standard Indian banking systems?
Answer: Yes
45. Is an NRE (Non-Resident External) account tax-free in India for interest income?
Answer: Yes
46. Is interest income earned in NRO (Non-Resident Ordinary) account fully exempt from tax in India?
Answer: No
47. Is a Mutual Fund regulated by the Reserve Bank of India?
Answer: No (Regulated by SEBI)
48. Does “Bancassurance” mean selling insurance products through banking networks?
Answer: Yes
49. Can a cheque dated with a future date be cashed immediately before that date arrives?
Answer: No
50. Is the Banking Ombudsman scheme completely free of cost for bank customers filing complaints?
Answer: Yes
