SBI PO - Banking products, financial regulations, and recent banking updates Online Test (MCQ Quiz)

1. What is the primary purpose of a Certificate of Deposit (CD)?

A) To allow frequent withdrawals of funds B) To offer a fixed interest rate for a specified term with restricted access to funds C) To provide a checking account with unlimited transaction capabilities D) To facilitate international money transfers

2. Which of the following is a short-term debt instrument issued by corporations?

A) Debenture B) Preference Share C) Commercial Paper D) Equity Share

3. What does 'KYC' stand for in the context of banking?

A) Know Your Customer B) Keep Your Company C) Kindred Your Clients D) Key Customer Yield

4. The Reserve Bank of India (RBI) uses which of the following monetary policy tools to control inflation by managing the money supply?

A) Fiscal Policy B) Open Market Operations C) Direct Taxation D) Government Spending

5. What is the main function of the Marginal Standing Facility (MSF) rate set by the RBI?

A) To regulate the interest rates on savings accounts B) To provide overnight liquidity to banks at a higher rate than the repo rate C) To influence the exchange rate of the Indian Rupee D) To set the minimum lending rate for agricultural loans

6. Which banking product allows customers to deposit money for a fixed period and earn a higher interest rate than a regular savings account?

A) Current Account B) Savings Account C) Fixed Deposit Account D) Recurring Deposit Account

7. What is the primary role of the Securities and Exchange Board of India (SEBI)?

A) To regulate the banking sector B) To develop and enforce rules for the stock market C) To manage foreign exchange reserves D) To oversee insurance companies

8. What is the purpose of the Basel Accords in the banking industry?

A) To standardize accounting practices globally B) To set minimum capital requirements for banks to mitigate risk C) To regulate international trade finance D) To establish guidelines for consumer protection

9. Which financial regulation aims to prevent money laundering and terrorist financing?

A) Know Your Customer (KYC) B) Capital Adequacy Ratio (CAR) C) Priority Sector Lending (PSL) D) Liquidity Coverage Ratio (LCR)

10. What does the term 'Repo Rate' signify in Indian monetary policy?

A) The rate at which commercial banks lend to the public B) The rate at which the RBI lends to commercial banks against government securities C) The rate at which banks lend to each other D) The rate of interest on fixed deposits

11. A 'Letter of Credit' is most commonly used in which type of transaction?

A) Personal loans B) International trade C) Stock market investments D) Real estate purchases

12. What is the primary objective of the 'Pradhan Mantri Jan Dhan Yojana' (PMJDY)?

A) To provide housing loans at subsidized rates B) To promote digital payments among small businesses C) To ensure access to financial services like banking, insurance, and pension to all citizens D) To offer investment advisory services to retail investors

13. Which of the following is NOT a type of bank account?

A) Savings Account B) Current Account C) Loan Account D) Fixed Deposit Account

14. What is the function of a 'Debit Card'?

A) To allow customers to withdraw cash from an ATM and make purchases directly from their bank account B) To enable customers to borrow money from the bank C) To earn interest on deposited funds D) To facilitate international money transfers

15. The Reserve Bank of India acts as the banker to:

A) All commercial banks B) The Central Government and State Governments C) Public Sector Undertakings D) Non-Banking Financial Companies (NBFCs)

16. What is the maximum amount that can be insured by the Deposit Insurance and Credit Guarantee Corporation (DICGC) per depositor per bank?

A) ₹1 Lakh B) ₹5 Lakhs C) ₹10 Lakhs D) ₹50 Lakhs

17. Which financial product is designed for regular savings over a period, where a fixed sum is deposited monthly?

A) Fixed Deposit B) Recurring Deposit C) Savings Account D) Current Account

18. What does 'CRAR' stand for in banking regulations?

A) Credit Risk and Asset Ratio B) Capital to Risk-Weighted Assets Ratio C) Customer Relationship and Revenue Account D) Corporate Restructuring and Recovery Act

19. The 'Reverse Repo Rate' is the rate at which:

A) The RBI borrows money from commercial banks B) Commercial banks borrow money from the RBI C) The RBI lends money to the public D) Commercial banks lend money to each other

20. What is the primary purpose of a 'Credit Card'?

A) To deposit money for a fixed term B) To allow customers to borrow money from the bank for purchases, to be repaid later C) To earn interest on savings D) To facilitate instant money transfers

21. Which of the following is a tool used by the RBI to manage liquidity in the banking system?

A) Income Tax Rate B) Corporate Tax Rate C) Cash Reserve Ratio (CRR) D) Goods and Services Tax (GST)

22. What is a 'Cheque Truncation System' (CTS)?

A) A system for international money transfers B) A process where cheques are scanned and the image is transmitted electronically, eliminating the need to physically transport the cheque C) A method for processing loan applications D) A platform for stock trading

23. The 'Priority Sector Lending' (PSL) norms mandate banks to lend a certain percentage of their net bank credit to:

A) Large industrial houses B) High-net-worth individuals C) Sectors like agriculture, micro and small enterprises, and weaker sections D) Foreign institutional investors

24. What does 'NBFC' stand for in the Indian financial system?

A) National Bank for Financial Cooperation B) Non-Banking Financial Company C) New Business Finance Corporation D) Networked Banking and Financial Centre

25. Which financial regulation requires banks to maintain a certain percentage of their deposits as liquid assets?

A) Capital Adequacy Ratio (CAR) B) Liquidity Coverage Ratio (LCR) C) Net Interest Margin (NIM) D) Gross Non-Performing Assets (GNPA)

26. What is the primary function of a 'Home Loan'?

A) To finance the purchase of consumer durables B) To provide funds for acquiring or constructing a residential property C) To cover educational expenses D) To finance business expansion

27. The 'Bank Rate' policy is set by which institution in India?

A) Ministry of Finance B) Securities and Exchange Board of India (SEBI) C) Reserve Bank of India (RBI) D) Indian Banks' Association (IBA)

28. What is the purpose of 'Net Banking'?

A) To facilitate physical branch visits for transactions B) To allow customers to perform banking transactions remotely via the internet C) To provide only cash withdrawal services D) To offer investment advice

29. Which of the following is a type of insurance product offered by banks?

A) Personal Loan B) Mutual Fund C) Life Insurance D) Credit Card

30. What does 'RTGS' stand for in banking?

A) Real Time Gross Settlement B) Rapid Transfer of Goods and Services C) Registered Transaction Gateway System D) Retail Transaction Guarantee Scheme

31. The 'Inflation Targeting' framework, adopted by the RBI, primarily aims to:

A) Increase the money supply B) Keep inflation within a specified range C) Reduce interest rates D) Boost economic growth at any cost

32. What is the role of the 'Ombudsman' in the banking sector?

A) To approve new bank licenses B) To handle customer grievances and complaints against banks C) To set interest rates for loans D) To manage foreign exchange reserves

33. 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?

A) Bank Rate B) Reverse Repo Rate C) Marginal Standing Facility (MSF) Rate D) Repo Rate

34. What is the primary function of a 'Savings Account'?

A) To facilitate frequent business transactions with no interest B) To encourage saving money while allowing limited withdrawals and earning nominal interest C) To provide a loan facility D) To hold funds for a fixed period to earn high interest

35. The 'Financial Stability Report' is published by:

A) Ministry of Finance B) SEBI C) RBI D) NITI Aayog

36. What is the purpose of 'Mobile Banking'?

A) To provide financial advice through physical meetings B) To allow customers to access banking services and perform transactions using their mobile devices C) To facilitate only cash withdrawals at ATMs D) To manage foreign currency exchange

37. Which of the following is a regulatory requirement for banks regarding their capital?

A) Maintaining a minimum number of branches B) Achieving a certain percentage of market share C) Adhering to Capital Adequacy Ratio (CAR) norms D) Offering free services to all customers

38. What does 'NEFT' stand for in banking?

A) National Electronic Funds Transfer B) New Era Financial Technology C) Networked Exchange for Funds D) National Exchange for Trading

39. The 'Prime Lending Rate' (PLR) was a benchmark interest rate used by banks, but it has largely been replaced by:

A) The Repo Rate B) The Bank Rate C) External Benchmarks D) The Marginal Standing Facility Rate

40. What is the main objective of the 'Pradhan Mantri Mudra Yojana' (PMMY)?

A) To provide housing loans to salaried individuals B) To fund large infrastructure projects C) To provide loans up to ₹10 lakh to non-corporate, non-farm small/micro enterprises D) To offer insurance coverage to senior citizens

41. Which financial product allows individuals to invest in a diversified portfolio of securities managed by professionals?

A) Fixed Deposit B) Government Bonds C) Mutual Funds D) Savings Account

42. The 'Reserve Requirement' (like CRR and SLR) is a tool used by the RBI to:

A) Increase the availability of credit B) Control the amount of money banks can lend C) Reduce the cost of borrowing for banks D) Encourage foreign investment

43. What is the primary risk associated with a 'Fixed Deposit'?

A) High volatility in returns B) Limited liquidity, as funds are locked in for a specific period C) Risk of losing the principal amount D) Fluctuating interest rates

44. The 'Global Financial Stability Report' is published by which international organization?

A) World Bank B) International Monetary Fund (IMF) C) World Trade Organization (WTO) D) Bank for International Settlements (BIS)

45. What is the purpose of 'Securitization' in banking?

A) To increase the amount of cash held by banks B) To convert illiquid assets (like loans) into marketable securities C) To reduce the interest rates on loans D) To provide insurance against bank failures

46. Which of the following is a recent banking update related to digital payments in India?

A) Introduction of cheque-based transactions B) Expansion of UPI (Unified Payments Interface) capabilities and adoption C) Increased reliance on manual cash transactions D) Reduction in ATM withdrawal limits

47. What is the role of the 'Asset Reconstruction Company' (ARC) in the Indian banking system?

A) To provide new loans to banks B) To acquire and manage non-performing assets (NPAs) from banks C) To set interest rates for deposits D) To regulate stock exchanges

48. The 'Financial Action Task Force' (FATF) is an international body that sets standards for combating:

A) Economic recession B) Money laundering and terrorist financing C) Market manipulation D) Consumer debt

49. What is the primary function of a 'Current Account'?

A) To earn high interest on savings B) To facilitate frequent and unlimited transactions, typically for businesses, with no interest paid C) To lock funds for a fixed period D) To provide a loan facility

50. Which recent development aims to enhance financial inclusion and provide access to digital financial services in remote areas?

A) Increasing manual paperwork for account opening B) Promoting the use of traditional banking methods C) Expansion of India Post Payments Bank (IPPB) services D) Reducing the number of bank branches

Banking products, financial regulations, and recent banking updates - Online Test

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