Banking sector is associated with different terminology such as base rate, RTGS, term deposit etc. Candidates those preparing for Bank recruitment examinations must be aware of these terminology. The question on Banking terminology will be asked in SBI Associate Banks Clerks recruitment exam along with several other Bank recruitments. Here are a few model / practice questions on Banking Terminology. Answers / key is also provided at the end of the questions:
1. Which of the following is known as Plastic Money?
A) Demand Draft B) Credit Card C) Debit Card
1) Only A 2) Only B 3) Only C
4) Both B and C 5) All A, B and C
2. KYC guidelines followed by banks have been framed on the recommendations of the ………..
1) Ministry of Home Affairs 2) Ministry of Information Technology and Human Resource Development
3) Indian Banks Association 4) Ministry of Finance 5) Reserve Bank of India
3. Business Correspondents in banking are for:
1) Providing services for the Platinum Customers
2) Providing services for children
3) Serving the educational institutions
4) Serving the weaker sections of society
5) None of these
4. What is the full form of FDI?
1) Foreign Development Investment 2) Fiscal Development Investment
3) Foreign Direct Investment 4) Fiscal Direct Investment 5) None of these
5. CMD of a public sector bank is appointed by:
1) Reserve Bank of India 2) Indian Banks Association
3) Central Government
4) Respective Bank’s Board of Directors 5) None of these
6. What is the current Statutory Liquidity Ratio?
1) 23 % 2) 24 % 3) 20% 4) 4.5% 5) None of these
7. Expand CTS.
1) Cheque Truncation System 2) Cash Transaction System 3) Current Transaction System
4) Credit Truncation System 5) None of the above
8. Micro finance development equity fund is managed by:
1) RBI 2) NABARD 3) Indian Banks Association
4) Asian Development Bank 5) None of these
9. What is the full form of LIBOR?
1) London Inter – Bank Offer Rate 2) Liquidity Inter – Bank Offer Rate
3) Liquidity International Bank Offer Rate 4) London International Bank Rate
5) None of these
10. Which of the following does not come under core sector?
1) Crude Oil 2) Natural Gas 3) Coal 4) Electricity 5) Automobile
11. When banks borrow fund for overnight, it is called:
1) Borrowing Money 2) Lending Money 3) Push Money 4) Call Money 5) None of these
12. What is ASBA with respect to banking?
1) Application Supported by Blocked Amount 2) Application Supported by Black Amount
3) Application Sign by Blocked Amount 4) Application Supported by Blocked Array
5) None of these
13. Electronic Cheque means :
1) Cheque which automatically comes from a machine. 2) Cheque issued online
3) Cheque which does not need a signature in it. 4) Cheque signed digitally
5) None of these
14. What is the minimum amount for NEFT transaction?
1) Rs.100000 2) Rs. 200000 3) Rs. 50000 4) There is No minimum limit 5) None of these
15. Expand SHG.
1) Self Help Grameen 2) Self Help Group 3) Self Help Grill 4) Solve Help Groups 5) None of these
16. Which of the following committees has given its recommendations on ‘Financial Inclusion’
1) Vaghul Committee 2) Rangarajan Committee
3) Rakesh Mohan Committee 4) Kelkar Committee 5) None of these
17. Rise in Stock Market is usually referred to as:
1) Bear 2) Bull 3) Tiger 4) Cat 5) None of these
18. The term ‘insider trading’ is associated with:
1) Stock Markets 2) Defence Services 3) Parliamentary Procedures 4) Book Publishing Business 5) Sports
19. Which of the following is implemented in India in all the districts of the country for providing employment?
1) Pradhan Mantri Gram Sadak Yojana 2) Bharath Nirman
3) Mahatma Gandhi National Rural Employment Guarantee Act 4) Swarn Jayanti Gram Swarozgar Yojana
5) None of these
20. Which of the following is the purpose of introducing ‘Know Your Customer’ and AML norms by the banks?
1) To bring more and more people under the banking net
2) Identifying people who do not pay income tax
3) To Identify the customer and identifying the source of funds deposited in banks
4) To ensure whether the money deposited in the bank is of an Indian or a foreign national
5) None of these
21. Which of the following organisations has been established mainly to promote micro, small and medium industrial sector in India?
1) NABARD 2) SIDBI 3) IDBI Bank 4) EXIM Bank 5) All of these
22. Which of the following is not one of the major functions of the National Bank for Agricultural and Rural Development (NABARD)?
1) Acting as regulator for cooperative banks and RRBs
2) Extending assistance to the government and others in matters related to rural development
3) Providing refinance to lending institutions in rural areas.
4) Acting as a coordinator in the operations of rural credit institutions
5) Review of monetary and credit policy
23. Banks in India are required to maintain a portion of their demand and time liabilities with the Reserve Bank of
India. This portion is called:
1) Statutory Liquidity Ratio 2) Cash Reserve Ratio 3) Bank Deposit
4) Reverse Repo 5) Government Securities
24. Which of the following organisations / agencies has specifically been set up to boost overall rural development in India?
1) RBI 2) SIDBI 3) NABARD 4) SEBI 5) EXIM
25. Banks in India are regulated under:
1) Companies Act, 1956 2) Banking Regulation Act, 1949
3) Reserve Bank of India Act, 1934 4) Special powers conferred on the RBI
5) None of these
26. A savings bank account opened with a commercial bank with zero or very minimal
balance is known as:
1) Savings Bank Ordinary Account 2) Student Savings Bank Account
3) No Frill Account 4) Current Account 5) Call Deposit
27. Banks in their daily business face various kinds of risks. Which of the following is one
such major risk?
1) Customer Risk 2) Reputation 3) Goodwill Risk 4) Protection Risk 5) Operational Risk
28. Which of the following schemes was launched by the RBI in 2004, under which Govt of India stated that Securities/ Treasury Bills could be issued to absorb surplus/ durable liquidity?
1) RTGS 2) External Commercial Borrowing 3) Market Stabilisation Scheme
4) High Value Clearing Scheme 5) Prepaid payment instrument facility
29. ‘Base Rate’ in banks is:
1) The rate of interest payable on demand deposits
2) The rate of interest payable on fixed deposits
3) The rate of interest charged by the RBI on long – term borrowing of public sector banks
4) The minimum lending rate decided by the RBI which shall be adopted by all public sector banks
5) The minimum interest rate fixed by individual banks below which they cannot lend funds, except cases like government- sponsored schemes.
30. Banking sector falls under ………
1) Agricultural Sector 2) Service Sector 3) Manufacturing Sector 4) Industrial Sector 5) Small Scale Sector
31. Which of the following is NOT a credit rating agency?
1) Credit Analysis & Research Ltd (CARE) 2) Lintas India Pvt Ltd
3) Moody’s Investors Service 4) Standard and Poor 5) Fitch Ratings
32. Which of the following is a payment and settlement system used by the banks in India?
1) Liquidity Adjustment Facility 2) Real Time Gross Settlement
3) Forward Rate Agreements 4) Central Depository Service 5) Negotiated Dealing System
Key / Answers: 1-4; 2-5; 3-4; 4-3; 5-3; 6-1; 7-1; 8-2; 9-1; 10-5; 11-4; 12-1; 13-4; 14-4; 15-2; 16-2; 17-2; 18-1; 19-3; 20-3; 21-2; 22-5; 23-2; 24-3; 25-2; 26-3; 27-5; 28-3; 29-5; 30-2; 31-2; 32-2.