Tag: owned fund and borrowed fund

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Questions Related to owned fund and borrowed fund

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 refers to sub prime mortgage?

  1. Lending done by banks at rates below PLR

  2. Funds raised by the banks at sub-Libor rates

  3. Group of banks which are not rated as prime banks as per Banker's Almanac

  4. Lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

Subprime mortgage lending refers to providing loans to borrowers who have poor credit histories or do not meet the standard creditworthiness requirements, often at higher interest rates.

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

Which one is related with micro financing?

  1. SHG

  2. Anganwadi workers

  3. Women Entrepreneurs

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

A Self Help Group (SHG) is a financial intermediary committee usually composed of 10–20 local women or men who provide financial assistance to its members by providing them finance in the a minimal interest rate. It is a part of micro financing as the amount of the loan is very minimum due to small group of people. 

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

In case of Term Loans, the period of limitation is calculated as three years from ________.

  1. date of documents

  2. date of sanction

  3. date of default

  4. due date of each installment
Reveal answer Fill a bubble to check yourself
D Correct answer
Explanation

A term loan is a monetary loan that is repaid in regular payments over a set period of time. Term loans usually last between one and ten years, but may last as long as 30 years in some cases. A term loan usually involves an unfixed interest rate that will add additional balance to be repaid.

For term loans payable in installments, the limitation period is 3 years for each installments, starting on the due date of each such installments.

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 considered an informal method of getting credit/finance?

  1. Internet banking

  2. Branch visits

  3. Going to moneylenders

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

Informal credit sources are those outside the regulated banking system. Moneylenders operate outside the formal regulatory framework of the central bank.

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

As published in various newspapers, the Experian Credit Information Company of India is going to launch its operation in India soon. At present the only credit information bureau functional in India is

  1. AMFI

  2. ICRA

  3. CIBIL

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

CIBIL (Credit Information Bureau (India) Limited) was the first credit information company established in India to maintain credit records of individuals.

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 correctly describes what sub-prime lending is?
A. Lending to the people who cannot repay the loans
B. Lending to the people who are high-value customers of the banks.
C. Lending to those who are not a regular customer of a bank

  1. Only (A)

  2. Only (B)

  3. Only (C)

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

Subprime lending means giving loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, medical emergencies, etc.

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 an institutional credit agency?

  1. Cooperative Society

  2. Moneylender

  3. Commercial Banks

  4. Regional Rural Banks
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Moneylenders are informal finance providers who are not registered under the government, as such, they fall under non-institutional credit agency. 

They may be rich farmers, friends or relatives from whom a person takes a loan on oral basis.

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

The power of the commercial banks to expand deposits through expanding their loans and advances is known as which of the following?

  1. Capital Expansion

  2. Credit Expansion

  3. Credit Control

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

Credit creation is the process by which commercial banks expand the money supply by lending out a portion of their deposits, keeping only a fraction as reserves.