Banking Financial Awareness · General Awareness

Banking Services and Operations

1,373 Questions

Banking Services and Operations cover the fundamental principles of financial institutions, including credit markets, money supply, and risk management. It also addresses various transaction methods and account types used by businesses. This topic is crucial for candidates preparing for banking and insurance recruitment examinations.

Banking AbbreviationsCredit Market OperationsMoney Supply MetricsRisk Management MeasuresForeign Exchange RulesDigital Banking Technology

Banking Services and Operations Questions

Multiple choice

The bank accounts shall be opened by secretary and executive director or

  1. any of the trustees

  2. the trustee having the authority from other trustees

  3. jointly by one or more of the trustees

  4. Any of the above
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The bank accounts shall be opened in the name of trust and shall be operated by either the secretary and executive director or jointly by one or more of the trustees namely for and on behalf of the trust.

Multiple choice

A customer deposits some money in his deposit account with the bank but forgets to provide complete particulars of the account. The bank credits the funds in sundries account. The relationship between bank and customer in this case is of

  1. debtor and creditor, as the funds were deposited for a deposit account

  2. bailee and bailor, as the money has been received by the bank

  3. agent and principal, as the bank will act as an agent for the funds

  4. trustee and beneficiary
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A trustee holds property for the beneficiary and the profit earned from this property belongs to the beneficiary. If the customer deposits securities or valuables with the banker for safe custody, banker becomes a trustee of his customer. The customer is the beneficiary, so the ownership remains with the customer. Here, the bank is a trustee and the customer is the beneficiary. 

Multiple choice

Different banks provide service electronically to each others’ customers through a system. What is it called?

  1. Shared Payment Network System

  2. Integrated Payment Network System

  3. Centralised Banking System

  4. Centralised Banking Solution
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Shared Payment Network System (SPNS) or SWADHAN network of ATMs is to provide 24 hours, 7 days in a week and 365 days in a year, electronic banking service to the customers of different banks. Different banks' customers can use other banks services through SPNS.

Multiple choice

In addition to the normal services as defined in the Banking Regulation Act, banks also undertake activities like project appraisal, underwriting of issue, technical know how etc. What is this business called?

  1. Consultancy services

  2. Bancassurance

  3. Merchant banking

  4. Advisory services

  5. Non-fund credit business
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A merchant bank is a company that deals mostly in international finance, business loans for companies and underwriting. These banks are experts in international trade, which makes them specialists in dealing with multinational corporations. A merchant bank may perform some of the same services as an investment bank, but it does not provide regular banking services to the general public. 

Multiple choice

In e-banking, a customer need not visit a bank branch for his cash requirement as this can be easily met through

  1. tele-banking

  2. electronic funds transfer

  3. automated teller machine

  4. on-line banking
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

An automated teller machine (ATM) is an electronic banking outlet which allows customers to complete basic transactions without the aid of a branch representative or teller. Anyone with a credit card or debit card can access most ATMs. 

Multiple choice

The banker-customer relationship does not come to an end in which of the following circumstances?

  1. Death of the customer

  2. Insolvency of the customer

  3. Insanity of the customer

  4. Receipt of garnishee order which has been satisfied by payment
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The banker-customer relationship comes to an end in case of death/insolvency/migration to a foreign country and lunacy of the depositor. Thus, option 4 is the correct answer.

Multiple choice

Tele-banking facility is provided by banks through bank computers. It is based on which of the following?

  1. Voice processing

  2. Brick and mortar processing

  3. Internet processing

  4. Virtual banking
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Telephone banking is a service that is provided by a bank or other financial institutions that enables customers to perform a range of financial transactions over the telephone, without the need to visit a bank branch or automated teller machine. It is provided by banks through bank computers and is based on voice processing.

Multiple choice

Section ________ of the Banking Regulations Act, 1949 defines banking as accepting for the purpose of lending or investment, of deposits, of money from the public, to be payable on demand or otherwise and withdrawal by cheque, draft, order or otherwise.

  1. 3(b)

  2. 4(b)

  3. 5(b)

  4. 6(b)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Under Section 5(b) of the Banking Regulations Act, 1949, banking means the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise and withdrawal by cheque, draft, order or otherwise. 

Multiple choice

The data/information provided by a credit information company to member banks is called

  1. credit information report

  2. credit report

  3. confidential report

  4. confidential credit report (CCR)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Credit Information Bureau of India Ltd. (CIBIL) consolidates the information on individual borrowers' credit history, sourced from different member credit institutions such as banks, credit card companies and NBFCs, into a single report called the CIR.

Multiple choice

The specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves as deposits with the central bank are called

  1. Corporate <font size="2">T</font>ax

  2. SLR

  3. CRR

  4. None of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Cash Reserve Ratio (CRR) is a specified minimum fraction of the total deposits of customers, which commercial banks have to hold as reserves either in cash or as deposits with the central bank.