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

Money is a matter of functions of four, ___________.

  1. medium, income, standard and store

  2. medium, measure, standard and store

  3. medium, measure, profit and store

  4. medium, quantity, standard and store
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The four classic functions of money are medium of exchange, measure of value, standard of deferred payment, and store of value.

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

Which of the following are the seven parts of the financial system?

  1. Financial instruments, credit cards, financial instruments, regulatory agencies, central banks, Federal reserve System, money

  2. Financial instruments, money, financial instruments, the Security and Exchange Commission, central banks, Federal Reserve System, credit cards

  3. Money, financial instruments, financial markets, financial institutions, regulatory agencies, central banks, Federal Reserve System

  4. Money, financial instruments, financial markets, banks, regulatory agencies, central banks, Federal Reserve System, credit cards
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

The financial system is typically categorized into these seven components: money, financial instruments, financial markets, financial institutions, regulatory agencies, central banks, and the Federal Reserve System.

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

The relatively less important functions of money are called __________.

  1. secondary function

  2. derived functions

  3. both (A) and (B)

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

Functions of money are often categorized as primary and secondary (or derived). The less important functions are generally referred to as secondary or derived functions.

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

Functions of money doesn't include:

  1. Medium of exchange

  2. Store of value

  3. Measure of value

  4. Employment generation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The primary functions of money are medium of exchange, store of value, and measure of value. Employment generation is an economic goal or outcome, not a functional definition of money itself.

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

Which of the following will not be included under Narrow Money?

  1. Currency in circulation

  2. Demand Deposits

  3. Time Deposits

  4. All of these
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Narrow Money (M1) includes currency in circulation and demand deposits. Time deposits are considered less liquid and are included in broader measures like M3.

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

The basic distinction between narrow and broad money is the __________.

  1. treatment of post office deposits

  2. treatment of time deposits of banks

  3. treatment of savings deposits of banks

  4. treatment of currency
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The basic distinction between the measurements of narrow and broad money is the treatment of time deposits of banks.
$\text{Broad money = Narrow money + Time deposits}$

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

Which of the following is not a necessary characteristic of money?

  1. It is a unit of account

  2. It is a store of value

  3. It is of intrinsic value

  4. It is generally acceptable
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

Money does not require intrinsic value (like gold or silver) to function; its value is derived from general acceptability and its role as a medium of exchange (fiat money).

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

In the pre-reforms period (i.e. before 1991), banking scene was dominated by the __________ sector.

  1. private

  2. public

  3. both (a) and (b)

  4. neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

India adopted the socialist form of economy prior to 1991 which involved a lot of government intervention in all the sectors including banking sector which made Indian economy a little conservative compared to other economic structures prevalent then. But after 1991, the government disinvested all its share from most of the sectors including banking sector which brought privatization in banking sector where public sector used to dominate prior to 1991.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Which of the following is not a quantitative method of credit control __________________.

  1. Bank Rate policy

  2. Open market operations

  3. The Repo Rate

  4. Consumer credit regulation
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Quantitative or traditional methods of credit control consist of banks rate policy, open market operations and variable reserve ratio. Qualitative or selective methods of credit control consist of the guideline of margin requirement, credit rationing, regulation of customer credit and direct action. 

Quantitative controls are planned to control the volume of credit created by the banking system qualitative measures or selective methods are intended to regulate the flow of credit in specific uses.

The correct option is D.

Multiple choice organisation of commerce and management economics of development and planning fundamental of economic development economics of development economic mechanism

Quantitative Methods aim at influencing _______________________.

  1. The end-use of credit in specific areas

  2. The total volume of credit in the banking system

  3. Both (a) and (b)

  4. Neither (a) nor (b)
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Quantitative Methods aim at influencing the total volume of credit in the banking system.Quantitative measures to control credit are also known as general measures. Quantitative instruments of control credit are those instruments which focus on overall supply of money in the economy. These measures are used in a manner such that overall supply of money in the economy is reduced during inflation and increased during deflation.

Multiple choice commercial applications generally accepted accounting principles (gaap) acccounting cycle meaning, need and objectives of accounting accounting process

Generally, under the single entry system __________.

  1. only personal accounts are maintained

  2. only personal, cash and bank accounts are maintained

  3. all accounts are maintained

  4. no account is maintained
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Under single entry system , no purchase, sales accounts are maintained. Only cash, bank and personal ledgers are maintained.

Multiple choice economics economic reconstruction economics of planning objectives of economic planning in india major economic problems

__________ refers to favours done by men in position for others in exchange for some monetary and other benefits.

  1. Black marketing

  2. Corruption

  3. Hoarding

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

Corruption erodes the expectation we have in the public sector to act in our best interests. It also wastes our taxes or rates that have been earmark for the important centre of population projects – meaning we have to put up with poor quality services or infrastructure or we miss out altogether. 

Fiscal loss, damage to employee morale, damage to an organisation's reputation, organisational focus and resources abstracted away from delivering core business and services to the community increased scrutiny, oversight and regulation.

The correct option is B.