Banking Financial Awareness · General Awareness

Banking Services and Operations

1,239 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 social science agriculture sector rural credit role of agriculture sector green revolution

___________ Land Development Banks operate at the district level.

  1. Central

  2. State

  3. Primary

  4. District
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Primary Land Development Banks operate at the district level.Land Development Banks (LDBs) are also called as Land Mortgage Banks and Agricultural and Rural Development Banks in some states.Land Development Banks- co-operative credit institution provides long-term loans. It provide loans generally more than one year. It provides institutional credit which assist in agricultural developmental activities.

Multiple choice social science agriculture sector rural credit role of agriculture sector green revolution

Land Development Banks (LDBs) have a ________ structure.

  1. 3-tier

  2. 2-tier

  3. 4-tier

  4. none of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Land Development Banks (LDBs) have a 2-tier structure.Land Development Banks (LDBs) have been effectively established in India since 1929.Land Development Banks (LDBs) are also called as Land Mortgage Banks and Agricultural and Rural Development Banks in some states.Land Development Banks- co-operative credit institution provides long-term loans. It provide loans generally more than one year. It provides institutional credit which assist in agricultural developmental activities.

Multiple choice social science agriculture sector rural credit role of agriculture sector green revolution

Land Development Banks (LDBs) are also called as ____________ in some states.

  1. Land Mortgage Banks

  2. Agricultural and Rural Development Banks

  3. both 'a and b'

  4. neither a nor b
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Land Development Banks (LDBs) are also called as Land Mortgage Banks and Agricultural and Rural Development Banks in some states.Land Development Banks- co-operative credit institution provides long-term loans. It provide loans generally more than one year. It provides institutional credit which assist in agricultural developmental activities. Land Development Banks (LDBs) have a 2-tier structure.Land Development Banks (LDBs) have been effectively established in India since 1929.

Multiple choice economics economics of development and planning economics of planning objectives of economic planning in india major economic problems

Which of the following would be the most correct description of the Finance Commission?

  1. Recommending agency

  2. Coordinating agency

  3. Distributing agency

  4. Mobilsing agency
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Finance Commission (FC) is appointed directly by the President. The major function of FC is to keep a  vertical balance between the financial revenues of taxes collected by the central govt, it recommends how the distribution should be among the union and states also grants distribution. It is on the recommendation of this institution that the financial decisions are taken hence it could be described as recommending agency.  

Multiple choice economics meaning and scope of public finance public finance, budget and fiscal policy government budget and economy public finance and budget

The term public means ________.

  1. household, firm and local authorities

  2. non-Banking Financial Institution, Non-Departmental PSU

  3. reserve of foreign banks, Government and International Monetary fund

  4. all the three
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

In the context of public finance and macroeconomics, the term 'public' is broad and encompasses the government, various public sector entities, and institutions that operate within the public sphere.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

$M _1$ is also known as transaction money because it can be directly used for making transactions. 

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

$M _1$ consists of  currency notes and coins that are in circulaation with public as well as the demand deposits with commercial banks. These can be used by the public directly for any transactions. Hence, $M _1$ is also known as 'Transaction Money'.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Demand deposits include __________________.

  1. Saving account deposits and fixed deposits

  2. Saving account deposits and current account deposits

  3. Current account deposits and fixed deposits

  4. All types of deposits
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Demand deposit refers to the deposit wherein the amount which you have deposited with the bank can be withdrawn by you any time. It includes saving account deposit and currency account deposit in which currency account is mainly meant for businessmen, and saving account is meant for general public.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

M1 includes net demand deposits and not gross demand deposits, as net demand deposits do not include inter-banking claims.

  1. True

  2. False
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

True.

Money supply refers to the total stock of money of all types ( currency as well as demand deposits) held by the people of a country at a given point of time. 

Money supply is measured in several ways among which M1 is a type of measurement that measures the money as a medium of exchange function. 

M1= C+ DD+ OD 

where, 

C: It refers to currency held by public in terms of coins and paper notes.

DD: It refers demand deposits of the people with the commercial bank.

OD: These includes other deposits with public financial institution, foreign central banks and international financial institution. 

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

Many banks have adopted/launched a "Core Banking Solution" (CBS). Which of the following is a Core Banking Solution?

  1. A marketing strategy adopted by the banks

  2. A new type of ATM useful for rural population

  3. A delivery channel for quick and fast delivery

  4. A new product launched to help senior citizens only as they are not able to visit branches/ATMs frequently
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Core Banking Solution (CBS) is a centralized banking system that allows customers to access their accounts and perform transactions from any branch of the bank, serving as a key delivery channel.

Multiple choice economics theories of distribution liquidity preference and profit revenue and revenue curves simple monopoly and commodity market

A money deposited in a bank that cannot be withdrawn for a preset fixed period of time is known as a ____________________.

  1. term deposit

  2. checking account

  3. savings bank deposit

  4. no frills account
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

A term deposit (or fixed deposit) is a deposit held at a financial institution that has a fixed term and cannot be withdrawn before the maturity date without penalty.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

Other name for legal reserve requirement is ________________.

  1. Cash reserve ratio

  2. Statutory liquidity ratio

  3. Variable reserve ratio

  4. Bank rate
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The variable reserve ration is a new method of credit control used by central banks in recent times. The variable reserve ratio device springs from the fact that central bank, as a Bankers Bank, must hold a part of the cash reserves of commercial banks.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

All of the following is function of money except __________.

  1. to provide durability

  2. to be portable

  3. to be divisible

  4. None of the above
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The primary functions of money are medium of exchange, measure of value, store of value, and standard of deferred payment. Durability is a characteristic or property of money, not a function itself.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

The main functions performed by money are called ___________.

  1. contingent functions

  2. secondary functions

  3. primary or original function

  4. important functions
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The primary or original functions of money are those that define its basic purpose: serving as a medium of exchange and a measure of value.

Multiple choice economics theories of distribution functions of money value, nature and functions of money liquidity preference and profit

The liquidity approach emphasizes the function of money as a ________.

  1. standard of deferred payment of money

  2. store of money

  3. income from money

  4. (A) and (C)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The liquidity approach to money emphasizes that money is held because it is the most liquid asset, serving as a store of value that can be used immediately.