MCQ ON BANKING, FINANCE AND ECONOMY - TEST - I

1. The tenth Five-Year Plan period is :

a) 2000-05 b) 2001-06 c) 2002-07 d) 2004-2009 e) 2005-2010

2. Indian corporates can now invest in joint ventures and subsidiaries abroad to the extent
of ______% of their net worth.

a) 200 b) 150 c) 100 d) 75

3. Minimum period of a Certificate of Deposit is :

a) 15 days b) 30 days c) 10 days d) 7 days

4. To accelerate growth of services exports from India and to create a unique brand, a new
scheme called ‘_____’ has been introduced in the New Foreign Trade Policy.

a) India Service b) India Calling c) Incredible India d) Served from India

5. The New Foreign Trade Policy envisages India’s share in merchandise trade to
________ within the period 2004-09.

a) double b) treble c) rise by 50% d) rise by 80%

6. Hybrid capital instruments (debt / equity) form part of ______ capital.

a) Tier II b) Tier I c) Paid up d) Preference share

7. A customer has been defined in :

a) Banking Regulation Act b) Negotiable Instruments Act c) Anti-Money

Laundering Act d) KYC guidelines

8. A Medium Enterprise is defined as one in which investment in plant and machinery is

over the SSI limit, but less than Rs. _____.

a) 5 cr. b) 10 cr. c) 25 cr. d) 50 cr

9. The BSE Sensex consists of a basket of ___ stocks.

a) 50 b) 100 c) 30 d) 66

10. The Government of India has recently announced a scheme for providing short term
loans to farmers at concessional rate of ____% p.a. up to an amount of Rs.___ lac.

a) 7, 1 b) 7, 3 c) 5, 1 d) 5, 3

11. The provision to be made on Standard assets for the current year is :

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 a) 0.25% b) 0.40% c) 0.40% for all loans except loans to Priority Sector
d) 0.40% on all loans, except loans to direct Agri & SME segments, for which the
provision is 0.25%

12. Clause 49 of the Listing Agreement of SEBI refers to :

a) announcing of quarterly results of listed companies

b) restriction of FDI in public sector banks
c) corporate governance and financial penalties including delisting for companies who
do not appoint the required number of independent directors on their board
d) None of these

13. Which bank in India ranks number one in India in terms of market capitalization?

a) SBI b) ICICI Bank c) UTI Bank d) IDBI Bank

14. Which is the first mutual fund in the country to offer redemption of its units through
ATMs of HDFC Bank and VISA ?

a) Reliance MF b) UTI MF c) SBI MF d) PruICICI MF

15. The stake of SBI in its joint venture with TCS, C-Edge, is :

a) 51% b) 40% c) 60% d) 49%

16. A Bank’s aggregate capital market exposure has been capped at ___% of its net worth.

a) 5 b) 10 c) 40 d) 25

17. Financial Intelligence Unit is set up by ___________ for tightening anti-money

laundering measures.

a) RBI b) Central Vigilance Commission c) Income Tax Department d)

Finance Ministry, GOI

18. Credit limits to dealers in agricultural machinery up to Rs.___ lacs are classified as
priority sector advances.

a) 25 b) 30 c) 40 d) 20

19. The minimum maturity period for Commercial Paper (CP) is _____ days.

a) 14 b) 30 c) 45 d) 7

20. The first SEZ promoted by a corporate is :

a) Reliance SEZ, Haryana b) SEEPZ, Mumbai

c) Mahindra SEZ, Pune d) None of the above

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21. Value added tax (VAT) is a type of tax levied on value added by any economic activity,
and covers :

a) commodities at the manufacturing level

b) commodities at the manufacturing, wholesaling, and retailing level
c) commodities at the manufacturing and wholesaling level
d) commodities and services at the manufacturing, wholesaling, and retailing levels
22. The Sarbanes Oxley Act of USA concerns :

a) aims at improving investor confidence in American corporates

b) improving quality of corporate disclosures and reporting, and increasing the
responsibility of officers and directors of companies in these disclosures
c) strengthen the independence of accounting firms
d) all the above

23. The Information Technology Act, 2000 is concerned with :

a) legal recognition of digital signatures

b) definition of various types of computer crimes and penalties for the same
c) appointment of certifying authorities for issuing digital signatures
d) recognition of digital records and their admissibility as evidence in courts
e) all of the above

24. As per RBI benchmark for allocation of bank credit, women beneficiaries should receive
at least ____% of net bank credit.

a) 5 b) 10 c) 15 d) 1

25. Export credit should be a minimum of ___% of net bank credit for scheduled
commercial banks.

a) 12 b) 15 c) 10 d) 3

26. Loans to software industry up to a limit of Rs._______ are classified as priority sector
advances.

a) 50 lacs b) 100 lacs c) 1000 lacs d) 500 lacs

27. The Demutualisation Ordinance amending the Securities Contracts (Regulation) Act,
1956 deals with :

a) operations of foreign mutual funds in India

b) rules and regulations for issue of different securities in the capital market
c) compulsory corporatisation of stock exchanges to bring about transparency and
efficiency in their operations
d) process of converting paper based securities into electronic form

28. The WTO Agreements cover global trade in :

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 a) goods b) services c) intellectual property d) investments in other countries
e) all of these f) a, b & c

29. Which committee had recommended the amalgamation of RRBs promoted by sponsor
banks?

a) Mitra b) Narasimhan c) Rakesh Mohan d) Malhotra

30. India has entered into Comprehensive Economic Co-operation Agreeement with which
of the following countries recently:

a) Singapore b) USA c) Australia d) None of these

31. Bharat Nirman is a four-year business plan embarked by the Government of India for
providing rural infrastructure in the areas of :

a) irrigation & water supply b) electrification c) housing d) telecommunication &

connectivity e) all the above

32. NIXI stands for :

a) National & International Exchange of India

b) National Internet Exchange of India
c) Notional Inter Exchange interest
d) None of the above

33. South Asian Free Trade Area (SAFTA) covers _____________ countries.

a) the seven countries who are members of SAARC

b) all countries in South East Asia
c) All countries in South and South-East Asia, and Australia and New Zealand
d) Pakistan, Bangladesh, Bhutan, Sri Lanka, Nepal and Maldives

34. MCA21 is :

a) e-governance project of the Ministry of Company Affairs

b) will enable companies to file their returns online with the Registrar of Companies
c) launched as a pilot in Coimbatore, with plans to extend to Delhi shortly
d) all the above

35. The name of Microsoft Corporation India’s IT initiative for setting up IT kiosks in rural
areas is named :

a) Aadhar b) Saksham c) Swadhan d) Shakthi

36. The new chairman of the US Federal Reserve is :

a) Alan Greenspan b) Gordon Brounes c) Ben Bernanke d) George Bush

37. Which credit card company has tied up the Railways to issue a credit cum loyalty card?

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 a) ICICI Cards b) SBI Cards c) ABN Amro Cards d) Citibank

38. Financial Network Services, the Australian banking software firm, has recently been
acquired by :

) Wipro b) TCS c) Infosys d) HCL

39. SBI has applied to open branches in Pakistan, as per the recent agreement between
India and Pakistan, at :

a) Lahore and Karachi b) Islamabad and Karachi

c) Rawalpindi and Sindh d) Lahore and Islamabad

40. The risk weightage on banks’ exposure to capital market exposures is :

a) 100 % b) 125% c) 150% d) 200%

41. Export Oriented Units can retain _____% of their export earnings in foreign currency.

a) 50 b) 100 c) 80 d) 66.67

42. Foreign investment in private banks, (in aggregate including FDI, FII, NRI, etc.) in India
is permitted up to ____%

a) 99 b) 74 c) 49 d) 24

43. The minimum shareholding of RBI in SBI should be ___% as per SBI Act.

a) 50 b) 59 c) 51 d) 55

44. RBI pays interest on CRR balances of banks at _____.

a) Bank Rate b) Repo Rate c) Bank Rate minus 2% d) Zero %

45. The three pillars of the Basel II framework are :

a) Minimum capital requirements b) Asset – Liability Management

c) Market discipline d) Supervisory review e) all the above f) a, c &d

46. The Code of Bank’s Commitment has been issued by :

a) RBI b) SBI c) IBA d) BCSBI

47. For declaring dividend, banks should have a CRAR of at least ____% for the preceding
2 years, and net NPA of less than _____%.

a) 11, 3 b) 9, 7 c) 10, 5 d) 9, 5

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48. After ________, foreign banks operating in India will be freed of RBI imposed
restrictions on their operations and treated on par with Indian banks.

a) April, 2008 b) April, 2009 c) April, 2010 d) April, 2015

49. Under Section 19(1) of the Banking Regulation Act, 1949, para- banking activities refer
to :

a) leasing b) hire purchase finance c) factoring d) credit card operations e)

all the above f) only a, b & c

50. The percentage of profit that a bank is required to transfer to its reserve fund as per
Banking Regulation Act is ______%.
a) 25 b) 20 c) 30 d) 50

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MCQ ON BANKING, FINANCE AND ECONOMY - TEST - I
ANSWERS:

1 C 2 A 3 D 4 D 5 A 6 B 7 D 8 B 9 C 10 B
11 D 12 C 13 B 14 A 15 D 16 C 17 D 18 B 19 D 20 C
21 D 22 D 23 E 24 A 25 A 26 B 27 C 28 F 29 B 30 A
31 E 32 C 33 A 34 D 35 B 36 C 37 B 38 B 39 A 40 C
41 B 42 B 43 D 44 D 45 F 46 D 47 B 48 B 49 F 50 B