Banking basics and financial institutions - One Line Questions
1.
Which of the following is a non-banking financial company (NBFC)? —
A company engaged in financial activities but without a banking license
2.
What is a 'Certificate of Deposit' (CD)? —
A negotiable, short-term instrument issued by banks
3.
What is a 'Call Money Market'? —
A market for short-term loans between banks
4.
What is 'Credit Default Swap' (CDS)? —
A financial derivative that allows an investor to 'swap' or offset their credit risk with that of the borrower
5.
What is a 'Zero Balance Account'? —
An account that requires no minimum balance to be maintained
6.
Which of the following is a private sector bank in India? —
Kotak Mahindra Bank
7.
Which of the following is a feature of a 'Payment Bank'? —
Accepts demand deposits and offers payment services
8.
Which of the following is NOT a type of financial institution? —
Manufacturing Company
9.
Which type of bank operates with the objective of providing financial services to underserved segments of the population? —
Small Finance Banks
10.
What does 'CRR' stand for in banking terminology? —
Cash Reserve Ratio
11.
What does 'Basel Norms' relate to in banking? —
Capital adequacy and banking supervision
12.
What is 'Monetary Policy'? —
Central bank's actions to manage money supply and credit conditions
13.
Which of the following is a type of public sector bank in India? —
Punjab National Bank
14.
Which of the following is a tool used by the RBI to control inflation? —
Increasing the cash reserve ratio
15.
Which of the following is NOT a function of the Reserve Bank of India? —
Providing banking services to the general public
16.
What is 'Sub-prime lending'? —
Lending to borrowers with a poor credit history, who are at a higher risk of default
17.
What is the meaning of 'LTV ratio' in the context of loans? —
Loan to Value ratio
18.
What does 'NPAs' (Non-Performing Assets) refer to in banking? —
Loans on which interest or principal repayment is overdue
19.
Which type of bank is primarily owned and controlled by its members? —
Cooperative Bank
20.
Which entity is responsible for regulating the securities market in India? —
SEBI
21.
Which financial institution primarily focuses on providing long-term finance for industrial development in India? —
Industrial Finance Corporation of India (IFCI)
22.
What is the primary role of NABARD? —
Providing refinance for agriculture and rural development
23.
Which institution is responsible for the regulation and supervision of the insurance sector in India? —
IRDAI
24.
Which institution is responsible for regulating the pension sector in India? —
PFRDA
25.
Which of the following is a function of the World Bank? —
Providing loans and grants for development projects
26.
Which institution is known as the central bank of India? —
Reserve Bank of India
27.
Which of the following is a cooperative bank? —
Cosmos Cooperative Bank
28.
What is 'Bank Rate'? —
The interest rate at which the central bank buys commercial bills
29.
What is meant by 'SLR' (Statutory Liquidity Ratio)? —
The percentage of total deposits that banks must maintain as liquid assets
30.
What is meant by 'Disintermediation' in finance? —
The process of financial flows bypassing traditional intermediaries
31.
What is 'Securitization' in finance? —
The process of pooling various types of contractual debt and selling their related cash flows to third-party investors
32.
What does 'repo rate' signify in monetary policy? —
The rate at which the central bank lends to commercial banks
33.
What is 'Reverse Repo Rate'? —
The rate at which the central bank borrows from commercial banks
34.
What is 'Interest Rate Risk' in banking? —
The risk of losing money due to fluctuations in interest rates
35.
What is the objective of the 'Priority Sector Lending' norm? —
To ensure banks lend a certain portion of their credit to specific sectors like agriculture and MSMEs
36.
What is the primary role of EXIM Bank? —
To finance and facilitate India's export and import trade
37.
What is the main objective of 'Financial Inclusion'? —
To ensure access to basic financial services for all
38.
What is the main purpose of 'Know Your Customer' (KYC) norms? —
To prevent money laundering and terrorist financing
39.
What is the role of the 'Deposits Insurance and Credit Guarantee Corporation' (DICGC)? —
To insure bank deposits and guarantee credit facilities
40.
What is the purpose of 'Fiscal Policy'? —
To influence the economy through government spending and taxation
41.
What is the main objective of a 'Scheduled Bank'? —
To be listed in the Second Schedule of the RBI Act
42.
What is the role of the 'International Monetary Fund' (IMF)? —
To promote international monetary cooperation and financial stability
43.
What is the primary function of a 'Mutual Fund'? —
To pool money from investors to invest in securities like stocks, bonds, and money market instruments
44.
What is the primary function of SIDBI? —
To provide loans for small and medium enterprises (SMEs)
45.
What is the primary purpose of a 'Credit Rating Agency'? —
To assess and rate the creditworthiness of borrowers
46.
What is the role of the 'Discount and Finance House of India' (DFHI)? —
To deal in money market instruments and provide liquidity
47.
What is the function of a 'Development Financial Institution' (DFI)? —
To finance long-term infrastructure and industrial projects
48.
Which of the following is a role of the 'Securities Appellate Tribunal' (SAT)? —
To hear appeals against orders passed by SEBI or other regulatory bodies
49.
What is the primary function of a commercial bank? —
To accept deposits and grant loans
50.
What is the purpose of 'Open Market Operations' conducted by the RBI? —
To inject or absorb liquidity in the banking system