Tag: loans from banks and financial institutions

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Questions Related to loans from banks and financial institutions

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following services/products of banks is specially designed and launched to help students?

  1. Personal loan

  2. Corporate loan

  3. Business loan

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

Education loans are specifically designed to provide financial assistance to students for their tuition and related academic expenses.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The working group set up by the RBI has suggested the launch of an Emergency Fund Facility Scheme for banks. This scheme will help which of the following types of banks?

  1. Public Sector Banks

  2. Small Banks

  3. Urban Cooperative Banks

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

The RBI has historically focused on strengthening Urban Cooperative Banks (UCBs) through various schemes, including liquidity support mechanisms like the Emergency Fund Facility.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following is part of the process of money laundering?

  1. Placement of funds

  2. Layering of funds

  3. Integration of funds

  4. All of a), b) and c)
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Money laundering involves three stages: placement (introducing illicit cash into the financial system), layering (moving funds to disguise the source), and integration (returning the funds to the economy as legitimate).

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Which of the following is not the part of the scheduled banking structure in India?

  1. Money lenders

  2. Public sector nanks

  3. Private sector banks

  4. Regional rural banks
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

Scheduled banks are those listed in the Second Schedule of the RBI Act. Moneylenders are informal and are not part of the scheduled banking structure.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Bank issues a letter to beneficiary on behalf of its constituents like guarantee for making payment on their behalf on fulfilment of its terms and conditions. What is this arrangement known in banking context?

  1. Line of Credit

  2. Loan to Client

  3. Letter of Credit

  4. Loan against Credit
Reveal answer Fill a bubble to check yourself
C Correct answer
Explanation

A Letter of Credit is a document issued by a bank that guarantees a buyer's payment to a seller will be received on time and for the correct amount.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

Base Rate is the rate below which no Bank can allow their lending to anyone. Who sets up this 'Base Rate' for Banks?

  1. Individual Bank Board

  2. Ministry of Commerce

  3. Ministry of Finance

  4. Reserve Bank of India
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

The Reserve Bank of India (RBI) mandates the Base Rate system to ensure transparency in lending rates and to prevent banks from lending below a certain threshold.

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

State with reasons the following statement is True or False.
Money is the basis of credit.

  1. True

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

True. 

Money serves as the standard of deferred payment. Deferred payments refer to payments made on loans, salaries, pensions, insurance premium, interests, and rents. The necessary condition for deferred or credit payment is that the amount of repaid money should be the same as it was at the time of purchase of the good. Since all the goods and services can be expressed in terms of money, it makes the future payments easy and functional which makes money the basis for credit  transactions in the economy. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

State whether the following statement is True or False.
Credit Money can be refused.

  1. True

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

Money serves as the standard of deferred payment. Deferred payments refer to payments made on loans, salaries, pensions, insurance premium, interests, and rents. The necessary condition for deferred or credit payment is that the amount of repaid money should be the same as it was at the time of purchase of the good. Since all the goods and services can be expressed in terms of money, it makes the future payments easy and functional which makes money the basis for generating credit in the economy. But sometimes credit money can be refused owing to the natural appreciation or depreciation of commodities with time due to which their monetary value at the time of deal does not match with their monetary value at the time of payment. 

Multiple choice commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

The part of income which is not spent on consumption is called _______. 

  1. expenditure

  2. saving

  3. investment

  4. public debt
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Savings refers to the part of the income which is not spent on the consumption of goods and services in the economy. It is that portion of the income which is kept aside for an instant and then re-invested into some asset in order to generate more income through these savings.