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.

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Banking Services and Operations Questions

Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Off-shore banking becomes more easy by _______.

  1. E-banking

  2. EXIM-bank

  3. Rural banking

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

Off shore bank refers to the bank located in a jurisdiction away from where the account holder or depositor resides. As E-banking doesn't require the account holder to be physically present in the bank to make the transaction, off-shore banking becomes much easier with the help of E-banking

Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Functions of development banks:
I. They provide risk capital
II. They grant medium and long-term loans
III. They guarantee loans raised from within and outside the country
IV. They provide assistance for setting up new industrial projects
Which of the given options are correct?

  1. I and II are correct

  2. I, II and IV are correct

  3. I, II and III are correct

  4. All are correct
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Development banks perform all these functions: providing risk capital, offering medium and long-term loans, guaranteeing loans, and assisting in the establishment of new industrial projects.

Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Which of the following refers to E-banking?

  1. Educational banking

  2. Environment banking

  3. Export-Import bank

  4. Electronic banking
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Electronic banking is also known as Online banking, virtual banking. E banking refers to electronic payment system that enables a customer to conduct certain banking activities and transaction through internet via a the financial institute's website.

Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

The soft loan scheme is provided by _______.

  1. RBI

  2. IFCI

  3. ICICI

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

The Unit Trust of India (UTI) historically managed various schemes, including those related to soft loans for industrial development, though the role of development banks in India is often shared among institutions like IDBI and IFCI.

Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Which of the following are included under representation functions of a bank?
i) Payment of cheques and bills
ii) Providing remittance facilities
iii) Underwriting of securities 
iv) Advancing clean credit
v) Allowing overdrafts on current account
vi) Purchase and sale of securities

  1. (i), (ii), (iii) and (iv)

  2. (iii), (iv), (v) and (vi)

  3. (vi), (v), (iv), (ii) and (i)

  4. (ii), (iii), (v) and (vi)
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation
 Banks perform certain secondary functions for the customers. These functions are also known as representation functions of a bank. Following points are included under representation functions of a bank:i) Payment of cheques and billsii) Providing remittance facilitiesiv) Advancing clean credit
v) Allowing overdrafts on current account
vi) Purchase and sale of securities.
Multiple choice organisation of commerce and management specialised financial institutions institutional sources long term sources of finance sources of business finance - 2

Which among the following is not true with regard to merchant banker?
i.It can accept deposits.
ii.It can advance loans.
iii.It can do other banking activities.
iv.It can be manager to a public issue.

  1. (i), (ii) and (iii)

  2. (ii), (iii) and (iv)

  3. (i), (iii) and (iv)

  4. (ii) and (iv)
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation
A merchant banker deals with international finance, business loans for companies and underwriting. Following points are not true with regard to merchant banker:i.It can accept deposits.
ii.It can advance loans.
iii.It can do other banking activities.
Multiple choice

Which of the following is NOT a type of financial institution?

  1. Commercial banks

  2. Investment banks

  3. Credit unions

  4. Hedge funds
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Hedge funds are investment vehicles that use advanced strategies and often employ leverage to generate returns for their investors. They are not considered traditional financial institutions.

Multiple choice

What is the name of the mechanism that provides a framework for the resolution of financial crises in the eurozone?

  1. Single Resolution Mechanism

  2. Single Supervisory Mechanism

  3. Banking Union

  4. Capital Markets Union
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Single Resolution Mechanism (SRM) is the mechanism that provides a framework for the resolution of financial crises in the eurozone.

Multiple choice

What is the name of the mechanism that ensures that banks in the eurozone have sufficient capital and liquidity to withstand financial shocks?

  1. Single Supervisory Mechanism

  2. Single Resolution Mechanism

  3. Banking Union

  4. Capital Markets Union
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Single Supervisory Mechanism (SSM) is the mechanism that ensures that banks in the eurozone have sufficient capital and liquidity to withstand financial shocks.

Multiple choice

What is the name of the mechanism that aims to create a single market for financial services in the EU?

  1. Banking Union

  2. Capital Markets Union

  3. Single Resolution Mechanism

  4. Single Supervisory Mechanism
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The Capital Markets Union (CMU) is the mechanism that aims to create a single market for financial services in the EU.

Multiple choice

What is the name of the mechanism that aims to strengthen the resilience of the eurozone banking sector?

  1. Banking Union

  2. Capital Markets Union

  3. Single Resolution Mechanism

  4. Single Supervisory Mechanism
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The Banking Union is the mechanism that aims to strengthen the resilience of the eurozone banking sector.

Multiple choice

What is the name of the mechanism that aims to promote financial integration and stability in the EU?

  1. European Semester

  2. European Stability Mechanism

  3. European Financial Stability Facility

  4. European Central Bank
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The European Semester is the mechanism that aims to promote financial integration and stability in the EU.

Multiple choice

What is the relationship between the Bank Rate and the Marginal Standing Facility (MSF) Rate?

  1. The Bank Rate is always higher than the MSF Rate

  2. The Bank Rate is always lower than the MSF Rate

  3. The Bank Rate and the MSF Rate are the same

  4. The relationship between the Bank Rate and the MSF Rate varies
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

The MSF Rate is the rate at which banks can borrow money from the RBI on an overnight basis. Typically, the Bank Rate is set higher than the MSF Rate.

Multiple choice

Which Indian language is used in the development of the Reserve Bank of India's (RBI) website?

  1. Hindi

  2. English

  3. Bengali

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

Hindi is the official language of the RBI and is used in the development of the organization's website.

Multiple choice

What are the main types of microfinance institutions?

  1. Microfinance banks

  2. Credit unions

  3. Non-governmental organizations (NGOs)

  4. Self-help groups
Reveal answer Fill a bubble to check yourself
Correct answer
Explanation

Microfinance institutions can take various forms, including microfinance banks, credit unions, NGOs, and self-help groups.