Banking products, financial regulations, and recent banking updates - One Line Questions
1.
What is a 'Cheque Truncation System' (CTS)? —
A process where cheques are scanned and the image is transmitted electronically, eliminating the need to physically transport the cheque
2.
The Reserve Bank of India acts as the banker to: —
The Central Government and State Governments
3.
Which term refers to the interest rate at which commercial banks can borrow money from the RBI for a short period by selling their surplus securities? —
Repo Rate
4.
Which financial regulation requires banks to maintain a certain percentage of their deposits as liquid assets? —
Liquidity Coverage Ratio (LCR)
5.
What does 'CRAR' stand for in banking regulations? —
Capital to Risk-Weighted Assets Ratio
6.
Which banking product allows customers to deposit money for a fixed period and earn a higher interest rate than a regular savings account? —
Fixed Deposit Account
7.
Which of the following is a short-term debt instrument issued by corporations? —
Commercial Paper
8.
The 'Financial Action Task Force' (FATF) is an international body that sets standards for combating: —
Money laundering and terrorist financing
9.
The Reserve Bank of India (RBI) uses which of the following monetary policy tools to control inflation by managing the money supply? —
Open Market Operations
10.
Which financial product is designed for regular savings over a period, where a fixed sum is deposited monthly? —
Recurring Deposit
11.
Which financial product allows individuals to invest in a diversified portfolio of securities managed by professionals? —
Mutual Funds
12.
What is the primary risk associated with a 'Fixed Deposit'? —
Limited liquidity, as funds are locked in for a specific period
13.
Which of the following is a tool used by the RBI to manage liquidity in the banking system? —
Cash Reserve Ratio (CRR)
14.
The 'Reserve Requirement' (like CRR and SLR) is a tool used by the RBI to: —
Control the amount of money banks can lend
15.
The 'Inflation Targeting' framework, adopted by the RBI, primarily aims to: —
Keep inflation within a specified range
16.
Which recent development aims to enhance financial inclusion and provide access to digital financial services in remote areas? —
Expansion of India Post Payments Bank (IPPB) services
17.
Which of the following is a recent banking update related to digital payments in India? —
Expansion of UPI (Unified Payments Interface) capabilities and adoption
18.
What does 'KYC' stand for in the context of banking? —
Know Your Customer
19.
Which financial regulation aims to prevent money laundering and terrorist financing? —
Know Your Customer (KYC)
20.
The 'Priority Sector Lending' (PSL) norms mandate banks to lend a certain percentage of their net bank credit to: —
Sectors like agriculture, micro and small enterprises, and weaker sections
21.
Which of the following is a regulatory requirement for banks regarding their capital? —
Adhering to Capital Adequacy Ratio (CAR) norms
22.
The 'Bank Rate' policy is set by which institution in India? —
Reserve Bank of India (RBI)
23.
The 'Financial Stability Report' is published by: —
RBI
24.
What does 'NBFC' stand for in the Indian financial system? —
Non-Banking Financial Company
25.
What does 'NEFT' stand for in banking? —
National Electronic Funds Transfer
26.
Which of the following is a type of insurance product offered by banks? —
Life Insurance
27.
A 'Letter of Credit' is most commonly used in which type of transaction? —
International trade
28.
What does 'RTGS' stand for in banking? —
Real Time Gross Settlement
29.
Which of the following is NOT a type of bank account? —
Loan Account
30.
What does the term 'Repo Rate' signify in Indian monetary policy? —
The rate at which the RBI lends to commercial banks against government securities
31.
The 'Reverse Repo Rate' is the rate at which: —
The RBI borrows money from commercial banks
32.
The 'Prime Lending Rate' (PLR) was a benchmark interest rate used by banks, but it has largely been replaced by: —
External Benchmarks
33.
What is the function of a 'Debit Card'? —
To allow customers to withdraw cash from an ATM and make purchases directly from their bank account
34.
What is the primary purpose of a Certificate of Deposit (CD)? —
To offer a fixed interest rate for a specified term with restricted access to funds
35.
What is the role of the 'Ombudsman' in the banking sector? —
To handle customer grievances and complaints against banks
36.
What is the primary purpose of a 'Credit Card'? —
To allow customers to borrow money from the bank for purchases, to be repaid later
37.
What is the primary function of a 'Current Account'? —
To facilitate frequent and unlimited transactions, typically for businesses, with no interest paid
38.
What is the primary function of a 'Savings Account'? —
To encourage saving money while allowing limited withdrawals and earning nominal interest
39.
What is the purpose of 'Net Banking'? —
To allow customers to perform banking transactions remotely via the internet
40.
What is the primary function of a 'Home Loan'? —
To provide funds for acquiring or constructing a residential property
41.
What is the purpose of 'Securitization' in banking? —
To convert illiquid assets (like loans) into marketable securities
42.
What is the purpose of 'Mobile Banking'? —
To allow customers to access banking services and perform transactions using their mobile devices
43.
What is the primary objective of the 'Pradhan Mantri Jan Dhan Yojana' (PMJDY)? —
To ensure access to financial services like banking, insurance, and pension to all citizens
44.
What is the main objective of the 'Pradhan Mantri Mudra Yojana' (PMMY)? —
To provide loans up to ₹10 lakh to non-corporate, non-farm small/micro enterprises
45.
What is the role of the 'Asset Reconstruction Company' (ARC) in the Indian banking system? —
To acquire and manage non-performing assets (NPAs) from banks
46.
What is the primary role of the Securities and Exchange Board of India (SEBI)? —
To develop and enforce rules for the stock market
47.
What is the main function of the Marginal Standing Facility (MSF) rate set by the RBI? —
To provide overnight liquidity to banks at a higher rate than the repo rate
48.
What is the purpose of the Basel Accords in the banking industry? —
To set minimum capital requirements for banks to mitigate risk
49.
The 'Global Financial Stability Report' is published by which international organization? —
International Monetary Fund (IMF)
50.
What is the maximum amount that can be insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) per depositor per bank? —
₹5 Lakhs