📘 520 MCQ on Banking & Finance (CPD-1 Paper-1)
👉 Answer shown after
each question
Q1.
A cheque drawn in favour of X is crossed “Not Negotiable”. X
endorses the cheque in favour of Y for valuable consideration. Y becomes:
A. A holder in due course
B. Only a holder
C. An assignee for the amount of the cheque
D. The cheque cannot be endorsed
✅ Answer: C
Q2.
A bill of exchange favouring A or order was endorsed by A in
favour of B. Before delivery, A died. Legal heirs delivered the bill to B. The
negotiation is:
A. Valid as endorsement and delivery both took place
B. Invalid as legal heirs cannot complete negotiation
C. Valid as endorsement is more important than delivery
D. Void due to death of endorser
✅ Answer: B
Q3.
A bearer cheque with general crossing is paid across the
counter. Later it is found stolen. Banker is:
A. Liable to original owner
B. Liable to true owner
C. Not liable as it is bearer cheque
D. Liable only if negligence is proved
✅ Answer: C
Q4.
An endorser excludes his liability by express words. Such
endorsement is called:
A. Facultative endorsement
B. Endorsement “Sans Recourse”
C. Partial endorsement
D. Restrictive endorsement
✅ Answer: B
Q5.
Which of the following is a material alteration?
A. Converting blank endorsement to full endorsement
B. Crossing an open cheque
C. Converting general crossing into special crossing
D. Converting “Order” cheque into “Bearer”
✅ Answer: D
Q6.
A endorses a negotiable instrument in favour of B. Here:
A. A is endorser, B is endorsee
B. B is endorser, A is endorsee
C. Both are endorsers
D. Both are endorsees
✅ Answer: A
Q7.
Paying banker is protected for payment of cheque with forged
drawer’s signature under:
A. Section 89 of NI Act
B. Section 85(1) of NI Act
C. Section 131 of NI Act
D. No protection is available
✅ Answer: D
Q8.
Definition of negotiable instrument is contained in:
A. Negotiable Instruments Act
B. Indian Contract Act
C. Banking Regulation Act
D. None of the above
✅ Answer: D
Q9.
P of Kanpur draws a bill on Q of London payable at Mumbai.
The bill is:
A. Inland bill
B. Foreign bill
C. Demand bill
D. Accommodation bill
✅ Answer: A
Q10.
A bill dated 22-11-2011 payable one month after date will
mature on:
A. 24-12-2011
B. 25-12-2011
C. 26-12-2011
D. 22-12-2011
✅ Answer: A
Q11.
A cheque payable to A or B or order is presented by B alone.
Payment:
A. Must be refused
B. Can be made after proper identification of B
C. Only after death certificate of A
D. Only with consent of A
✅ Answer: B
Q12.
Cheque debited in clearing. Stop payment instruction
received before return memo sent. Banker should:
A. Return cheque after cancelling debit
B. Ignore stop payment
C. Decide at banker’s discretion
D. Do nothing
✅ Answer: A
Q13.
Cheque drawn on an account under garnishee order should be
returned with remark:
A. Garnishee order received
B. Refer to drawer
C. Account attached
D. Orders not to pay
✅ Answer: C
Q14.
Current account minimum balance ₹5000, balance ₹6000. Cheque
for ₹6000 presented. Banker will:
A. Return cheque
B. Pass cheque
C. Pass cheque and close account
D. None of the above
✅ Answer: B
Q15.
A bill with “drawee in case of need” is dishonoured when:
A. Drawee dishonours
B. Drawee in case of need dishonours
C. Presentation to drawee in case of need is optional
D. None of the above
✅ Answer: B
Q16.
Punishment under Sec 138 NI Act is:
A. 1 year imprisonment or fine
B. 2 years imprisonment only
C. Fine up to thrice cheque amount
D. 2 years imprisonment or fine up to twice cheque amount or both
✅ Answer: D
Q17.
Which is a foreign bill?
A. Bill drawn in sets
B. Drawn in Chennai payable at Colombo
C. Drawn in Mumbai on New York payable in Delhi
D. None of the above
✅ Answer: D
Q18.
Order instruments are negotiated by:
A. Endorsement only
B. Delivery only
C. Endorsement and delivery
D. Cannot be negotiated
✅ Answer: C
Q19.
Cheque endorsed SANS RECOURSE returns to A after dishonour.
A:
A. Cannot claim from anyone
B. Can claim as endorsee but not liable
C. Can claim only from C
D. Can claim only from B
✅ Answer: B
Q20.
Blank endorsement converted into full endorsement by holder.
Effect:
A. Material alteration
B. Endorser alone liable
C. Original endorser alone liable
D. Cheque valid, no liability on holder
✅ Answer: D
Q21.
Cheque bearing stamp of Dena Bank on Central Bank cheque is:
A. General crossing
B. Special crossing to Dena Bank
C. Uncrossed
D. Invalid cheque
✅ Answer: B
Q22.
Cheque issued as donation returned unpaid. Sec 138 applies?
A. Yes
B. No, no legally enforceable liability
C. Only on second return
D. Depends on amount
✅ Answer: B
Q23.
Transferee cannot get better title in case of:
A. A/C Payee crossing
B. Not negotiable crossing
C. Special crossing
D. None
✅ Answer: B
Q24.
Which statement is correct regarding stamping?
A. PN & BE stamped
B. PN & cheques stamped
C. Cheques & BE stamped
D. Cheques not stamped
✅ Answer: A & D (Option 5)
Q25.
Negotiable Instruments Act contains how many sections?
A. 138
B. 146
C. 147
D. 148
✅ Answer: C
Q26.
CTS-2010 relates to:
A. Computer language
B. Currency security
C. Standardisation of cheques
D. Accounting standards
✅ Answer: C
Q27.
Joint account “Either or Survivor”. A dies. Balance payable
to:
A. Nominee
B. Survivor
C. Legal heirs
D. Nominee & survivor
✅ Answer: B
Q28.
Garnishee order received but bank has recall loan. Banker
should:
A. Exercise set-off
B. Obey court order
C. Split amount
D. Seek court direction
✅ Answer: A
Q29.
Cheque signed by deceased attorney holder in principal’s
account:
A. Return both cheques
B. Pass both cheques
C. Pass principal’s cheque only
D. Pass attorney’s cheque only
✅ Answer: C
Q30.
Stop payment instruction after payment of post-dated cheque:
A. Cannot accept
B. Supreme Court bars it
C. PDC illegal
D. Accept instruction
✅ Answer: D
Q31.
Taxi hypothecated to bank meets accident. Compensation
claimed from:
A. Bank
B. Cannot be claimed from bank
C. Bank & owner equally
D. Bank first
✅ Answer: B
Q32.
Mortgage is defined under:
A. Contract Act
B. Sale of Goods Act
C. Transfer of Property Act
D. None
✅ Answer: C
Q33.
Property transferred to mortgagee with condition of
retransfer is:
A. Simple mortgage
B. English mortgage
C. Equitable mortgage
D. Mortgage by conditional sale
✅ Answer: B
Q34.
Loan against LIC policy is based on:
A. Surrender value
B. Paid-up value
C. Insured value
D. Market value
✅ Answer: A
Q35.
Property insured ₹80,000, loss ₹60,000. Claim payable:
A. ₹60,000
B. ₹80,000
C. ₹48,000
D. ₹1,00,000
✅ Answer: C
Q36.
Loan against FDR can be granted if FDR is issued by:
A. Same branch
B. Same bank
C. Any nationalised bank
D. Any commercial bank
✅ Answer: B
Q37.
Document executed abroad must be stamped:
A. At execution
B. Within 3 months of receipt in India
C. Within 4 months
D. No stamping required
✅ Answer: B
Q38.
Three days grace allowed to:
A. Sight bills
B. Usance bills
C. Promissory notes
D. Cheques
✅ Answer: B
Q39.
Charge registration not required for:
A. Pledge
B. Hypothecation
C. Book debts
D. Mortgage
✅ Answer: A
Q40.
Usance bill must be accepted within:
A. 24 hours
B. 48 hours
C. 72 hours
D. No limit
✅ Answer: B
Q41.
XOS form is related to:
A. Forex drawal
B. Trade credit
C. Outstanding export bills
D. Forex application
✅ Answer: C
Q42.
Blue chip shares refer to:
A. Govt securities
B. Preference shares
C. Sound companies with good dividend
D. Promoter shares
✅ Answer: C
Q43.
Bulls and Bears relate to:
A. Credit rating
B. Vegetables
C. Stock exchange
D. Risk management
✅ Answer: C
Q44.
Right of set-off can be exercised against:
A. Partnership account
B. Cash for DD
C. Minor’s account
D. Another branch same bank
✅ Answer: D
Q45.
Power of attorney for locker operation after death:
A. Allowed
B. Not allowed
C. Authority ends on death
D. Allowed if legal heir
✅ Answer: C
Q46.
Unstamped promissory note – court action:
A. Stamp can be affixed later
B. Pay 10× penalty
C. Court may condone
D. Cannot be condoned
✅ Answer: D
Q47.
Maximum members in private company (Companies Act 2013):
A. 50
B. 100
C. 200
D. No limit
✅ Answer: C
Q48.
Maximum partners in a partnership firm:
A. 10
B. 20
C. 50
D. 100
✅ Answer: D
Q49.
Lost locker key procedure:
A. Duplicate key
B. FIR then break open
C. Break open by manufacturer
D. Surrender locker
✅ Answer: C
Q50.
Only RBI can draw bearer PN or BE under:
A. Sec 31 RBI Act
B. Sec 31 BR Act
C. Sec 31 NI Act
D. Sec 31 Contract Act
✅ Answer: A
Q51.
A bill of exchange drawn by X on Y bears two parallel
transverse lines across its face. This indicates:
A. The bill is generally crossed
B. The bill is specially crossed
C. The bill contains a superfluous addition
D. The bill cannot be endorsed
✅ Answer: C
Q52.
The rate of interest on PPF account is:
A. 9%
B. 8.6%
C. 8.7%
D. 12%
✅ Answer: C
Q53.
RAM, a transporter, is granted a loan for purchase of a
truck. The charge created will be:
A. Assignment
B. Mortgage
C. Pledge
D. Hypothecation
✅ Answer: D
Q54.
Interest earned during FY by an individual:
₹9,000 at Branch A and ₹9,000 at Branch B. PAN submitted. TDS applicable is:
A. ₹1530 + cess
B. ₹1530
C. No TDS
D. Depends on age
✅ Answer: B
Q55.
Target for RRBs under Priority Sector Lending is:
A. 100%
B. 60%
C. 40%
D. 32%
✅ Answer: B
Q56.
Maximum number of operations allowed in a safe deposit vault
in a single day:
A. One
B. Two
C. Three
D. No limit
✅ Answer: D
Q57.
Form filed for satisfaction of charges (Company Act 2013)
is:
A. CHG-1
B. CHG-3
C. CHG-4
D. CHG-8
✅ Answer: C
Q58.
Section 6 of the Negotiable Instruments Act deals with:
A. Cheques
B. Truncated cheques
C. Electronic cheques
D. All of the above
✅ Answer: D
Q59.
Maximum stamp duty payable on a demand promissory note is:
A. 10 paise
B. 15 paise
C. 50 paise
D. ₹1
✅ Answer: B
Q60.
Which instrument is known as plastic money?
A. Traveller’s cheque
B. Credit card
C. Bearer cheque
D. Demand draft
✅ Answer: B
Q61.
Succession certificate is insisted only when:
A. No nomination exists
B. Claim exceeds ₹1 lakh
C. All legal heirs do not join indemnity
D. Claim exceeds ₹10 lakhs
✅ Answer: C
Q62.
ATM PIN is a:
A. Alphanumeric code
B. 4-digit number
C. 3-digit number
D. 5-digit number
✅ Answer: B
Q63.
RBI is empowered to raise SLR up to:
A. 30%
B. 40%
C. 50%
D. 45%
✅ Answer: B
Q64.
Limitation period for execution of a decree is:
A. 12 years
B. 3 years
C. No limit
D. 90 days
✅ Answer: A
Q65.
Every banking company must transfer to reserve fund at
least:
A. 20% of profits
B. 25% of profits
C. 10% of profits
D. 1% of profits
✅ Answer: A
Q66.
Limitation period in case of pledge is:
A. 3 years
B. 12 years
C. 90 days
D. No limitation
✅ Answer: D
Q67.
Hypothecation as a mode of security is provided under:
A. Contract Act
B. Transfer of Property Act
C. Banking Regulation Act
D. SARFAESI Act
✅ Answer: D
Q68.
Bank Rate, CRR and SLR respectively are:
A. 6.25%, 25%, 4.75%
B. 25%, 6.25%, 4.75%
C. 4.75%, 6.25%, 25%
D. 7.75%, 4%, 21.5%
✅ Answer: D
Q69.
Resident Foreign Currency (Domestic) account can be opened
as:
A. Current account
B. Time deposit
C. Savings account
D. All of the above
✅ Answer: A
Q70.
Notice under Section 138 NI Act must be given within:
A. 15 days
B. 30 days
C. 1 month
D. 48 hours
✅ Answer: B
Q71.
Nominee in a savings account is a minor. Who can be
appointed to receive amount?
A. Only mother
B. Blood relatives
C. Blood relatives if mother not alive
D. Any person
✅ Answer: D
Q72.
Customer requests original cheque after clearing. Bank
should:
A. Give original cheque
B. Not give original cheque
C. Give only if court demands
D. Give certified copy only
✅ Answer: A
Q73.
Bank receives court notice to prove passbook entry. Bank
should:
A. Depute staff
B. Ignore notice
C. Ask lawyer to write to HO
D. Depute staff only if B agrees
✅ Answer: C
Q74.
Last date for filing suit falls on Sunday. Court opens next
day. Suit can be filed:
A. 30-12-2003
B. On or before 29-12-2003
C. On or before 27-12-2003
D. Within 3 days grace
✅ Answer: B
Q75.
Foreign exchange permitted for visiting Bhutan:
A. USD 500
B. USD 2000
C. USD 100
D. No foreign exchange
✅ Answer: D
Q76.
Maximum number of directors in a company (Companies Act
2013):
A. 10
B. 15
C. 20
D. No limit
✅ Answer: B
Q77.
Cash payment of matured FDR ₹6,500 allowed?
A. Allowed
B. Not allowed
C. Allowed with undertaking
D. Allowed only with PAN
✅ Answer: A
Q78.
Cash payable to NRI/Tourist by authorized money changer is
up to:
A. USD 2500
B. USD 3000
C. USD 500
D. Any amount
✅ Answer: B
Q79.
In power of attorney, principal and agent can be:
A. Minor & major
B. Major & minor
C. Major & major
D. Minor & minor
✅ Answer: C
Q80.
FEMA limit for medical treatment abroad without estimate:
A. USD 5000
B. USD 25,000
C. USD 1 lakh
D. USD 2 lakh
E. USD 250,000
✅ Answer: E
Q81.
Which statement is incorrect under NI Act?
A. Holder can cancel crossing
B. Holder can add crossing
C. Holder can add special crossing
D. Holder can add “Not Negotiable”
✅ Answer: A
Q82.
Account Payee crossing is addressed to:
A. Collecting banker
B. Payee
C. Drawee banker
D. A and B
✅ Answer: A
Q83.
A crossed cheque:
A. Must be credited to payee
B. Can be paid in cash
C. Should be paid to a banker only
D. None
✅ Answer: C
Q84.
Crossing can be added to:
A. Order cheques
B. Bearer cheques
C. Both order and bearer
D. None
✅ Answer: C
Q85.
Account Payee crossing with two parallel lines is:
A. Special crossing
B. General crossing
C. Restrictive crossing
D. None
✅ Answer: B
Q86.
In case of a bill of exchange:
A. General crossing applies
B. Special crossing applies
C. Crossing has restricted application
D. Crossing has no meaning
✅ Answer: D
Q87.
Form 16 must be issued by:
A. 15 April
B. 30 April
C. 31 May
D. 31 July
✅ Answer: C
Q88.
Cheque countermanded by one partner, later revoked by same
partner. Bank should:
A. Accept revocation
B. Get all partners’ consent
C. Accept from any partner
D. Reject revocation
✅ Answer: B
Q89.
FDR endorsed to creditor. Payment on maturity should be made
to:
A. Endorsee only
B. Original depositor
C. Endorsee if account exists
D. None
✅ Answer: B
Q90.
Joint FDR “Former or Survivor”. Loan request by former.
Survivor objects. Bank should:
A. Refuse loan
B. Grant loan
C. Seek medical certificate
D. None
✅ Answer: A
Q91.
Annual Information Return (Form 61A) is filed for:
A. Cash deposits ≥ ₹10 lakh
B. Savings cash ≥ ₹10 lakh
C. Credit card ≥ ₹2 lakh
D. All above
✅ Answer: D
Q92.
Which account cannot be opened by illiterate NRI?
A. NRE
B. FCNR
C. NRO
D. RFC
✅ Answer: D
Q93.
Nomination is NOT allowed in:
A. NRO
B. NRE
C. FCNR
D. RFC
E. None
✅ Answer: E
Q94.
Endorser dies before delivery. Executor can transfer by:
A. Fresh endorsement
B. Delivery only
C. Re-endorsement & delivery
D. None
✅ Answer: C
Q95.
Adjustment of OD from savings account is exercise of:
A. Set-off
B. Lien
C. Appropriation
D. Special lien
✅ Answer: A
Q96.
Stamp duty on PN payable otherwise than on demand depends
on:
A. Amount only
B. Tenor only
C. State stamp act & amount
D. Amount and usance
✅ Answer: D
Q97.
Banker’s lien is:
A. Contingent
B. Particular
C. General
D. All
✅ Answer: C
Q98.
High value clearing refers to cheques of:
A. ₹1 lakh and above
B. ₹50,000 and above
C. ₹10 lakh and above
D. None
✅ Answer: D
Q99.
Loan against NSC with lien marked. Borrower dies. Bank
recovers by:
A. Asking nominee
B. Asking legal heirs
C. Presenting NSC to post office
D. Any of above
✅ Answer: C
Q100.
Bank collects supply bills under:
A. Mandate
B. Letter of authority
C. Indemnity bond
D. Power of Attorney
✅ Answer: D
Q101.
A company’s registered office is at Chennai, factory at
Bengaluru and loan availed at Mumbai. Equitable mortgage can be created at:
A. Chennai
B. New Delhi
C. Mumbai
D. Any notified centre
✅ Answer: D
Q102.
PAN is mandatory while depositing cash for purchase of DD
when amount is:
A. ₹10,000 & above
B. ₹25,000 & above
C. ₹50,000 & above
D. ₹1,00,000 & above
✅ Answer: C
Q103.
Maximum amount per transaction under EFT is:
A. ₹50,000
B. ₹1 lakh
C. ₹5 lakh
D. No limit
✅ Answer: D
Q104.
Authority appointed during liquidation of a company is:
A. Administrator
B. Receiver
C. Liquidator
D. Executor
✅ Answer: C
Q105.
Who is garnishee under a garnishee order?
A. Judgment creditor
B. Judgment debtor
C. Bank
D. Court
✅ Answer: C
Q106.
A negotiable instrument may be endorsed on:
A. Slip of paper only
B. Back only
C. Face only
D. Back, face or annexed slip
✅ Answer: D
Q107.
When an order cheque is endorsed in blank, it becomes:
A. Restricted
B. Bearer instrument
C. Non-negotiable
D. Invalid
✅ Answer: B
Q108.
“Notice of dishonour waived” endorsement is known as:
A. Restrictive endorsement
B. Conditional endorsement
C. Facultative endorsement
D. Partial endorsement
✅ Answer: C
Q109.
Who is incompetent to endorse a negotiable instrument?
A. Minor
B. Married woman
C. Illiterate person
D. None of the above
✅ Answer: D
Q110.
Endorsement in blank means:
A. Endorsement of blank instrument
B. Endorsement of inchoate instrument
C. Only signature of endorser
D. Endorsement without consideration
✅ Answer: C
Q111.
Maximum number of endorsements allowed on a negotiable
instrument is:
A. One
B. Two
C. Five
D. No limit
✅ Answer: D
Q112.
Account is NPA with debit ₹35,000 and security value ₹3,000.
Asset classification is:
A. Standard asset
B. Sub-standard asset
C. Doubtful asset
D. Loss asset
✅ Answer: D
Q113.
Cheque endorsed “sans recourse” through several endorsers is
dishonoured. Holder can claim from:
A. B, C and D
B. Nobody
C. All endorsers
D. A only
✅ Answer: A
Q114.
Annual Information Return (Form 61A) must be submitted by
bank:
A. Anytime
B. By 30 June
C. By 31 August
D. By 31 March
✅ Answer: C
Q115.
Who cannot delegate powers to a third party?
A. Trustee
B. Power of attorney holder
C. Executor
D. Administrator
E. All of these
✅ Answer: E
Q116.
A Non-Resident Indian is defined as:
A. Any Indian going abroad
B. Going abroad for medical treatment
C. Going abroad for studies
D. Going abroad for employment/business with indefinite stay
E. Both C and D
✅ Answer: E
Q117.
NRE account can be opened by:
A. Conversion of existing account
B. Remittance from abroad or transfer from NRE/FCNR
C. Transfer from NRO
D. Local credits
✅ Answer: B
Q118.
NRE account can be opened jointly with:
A. NRI only
B. Resident Indian
C. Close relatives in India
D. Any foreign resident
E. 1 and 3 only
✅ Answer: E
Q119.
Maximum period for FCNR (B) deposit is:
A. 3 years
B. 4 years
C. 5 years
D. 10 years
✅ Answer: C
Q120.
PA holder depositing USD 3500 currency into NRI account:
A. Allowed
B. Allowed with CDF
C. Not allowed
D. Allowed with RBI approval
✅ Answer: C
Q121.
FCNR accounts can be opened by:
A. All branches
B. Metro branches only
C. Authorized branches
D. All except rural branches
✅ Answer: C
Q122.
FCNR (B) account can be opened in:
A. USD
B. GBP
C. EURO
D. YEN
E. Any freely convertible currency
✅ Answer: E
Q123.
Nomination facility in NRI accounts:
A. Not allowed
B. Allowed
C. Allowed with RBI approval
D. Allowed only in NRO
✅ Answer: B
Q124.
FCNR (B) account can be opened as:
A. Savings deposit
B. Time deposit excluding RD
C. Current account
D. Time deposit including RD
✅ Answer: B
Q125.
Joint NRO accounts can be opened by:
A. NRIs only
B. NRIs and resident Indians
C. Residents only
D. Not allowed
✅ Answer: B
Q126.
Foreign exchange declaration (CDF) is required when currency
exceeds:
A. USD 20,000
B. GBP 10,000
C. USD 12,000
D. USD 10,000 or equivalent
✅ Answer: D
Q127.
Authorized Dealer means:
A. RBI-approved branches
B. RBI-approved banks for forex
C. Banks opening NRI accounts
D. Money changers
✅ Answer: B
Q128.
Which statement is incorrect?
A. NRE accounts are fully repatriable
B. NRO to NRE transfer permitted after tax
C. Introduction not mandatory
D. One person can hold resident & non-resident account simultaneously
✅ Answer: D
Q129.
Joint resident holder’s funds can be credited to NRO
account?
A. Yes
B. No
C. Yes with NRI consent
D. RBI approval needed
✅ Answer: B
Q130.
Balance in RFC account can be remitted abroad within:
A. 3 years
B. 10 years
C. 6 years
D. No limit
✅ Answer: D
Q131.
Interest on FCNR (B) deposit is calculated on:
A. 12 months basis
B. 360 days basis
C. 52 weeks basis
D. 365 days basis
✅ Answer: B
Q132.
RFC (Domestic) account can be opened by:
A. Residents only
B. Residents & close relatives
C. Tourists
D. Pakistan/Bangladesh citizens
E. A and B
✅ Answer: E
Q133.
PA holder of NRI wants to open NRE account. Bank should:
A. Allow
B. Allow if known
C. Not allow
D. Seek RBI permission
✅ Answer: C
Q134.
NRI joint accounts with close relatives can be operated as:
A. Jointly
B. Either or survivor
C. Former or survivor
D. Latter or survivor
✅ Answer: C
Q135.
Resident PA holder of NRE account can:
A. Repatriate & gift
B. Repatriate only
C. Gift only
D. Neither repatriate nor gift
✅ Answer: B
Q136.
Form LEG is used for:
A. Opening NRE
B. Opening FCNR
C. Opening NRO
D. Settlement of deceased NRE/FCNR
✅ Answer: D
Q137.
Kisan Credit Card is issued for:
A. 3 years
B. 4 years
C. 5 years
D. 10 years
✅ Answer: B
Q138.
NRE account holder deposits USD 6000 in cash. Banker should:
A. Accept directly
B. Ask for CDF
C. Accept without CDF
D. Reject
✅ Answer: B
Q139.
Non-resident can bring foreign exchange into India:
A. Limited to USD 10,000
B. Any amount with declaration
C. Only with RBI permit
D. Not allowed
✅ Answer: B
Q140.
Interest payable on CRR balance is:
A. 3.5%
B. 1%
C. 5%
D. Nil
✅ Answer: D
Q141.
Housing loan repayment by NRI can be made from:
A. NRE account
B. NRO account
C. Close relatives
D. All of the above
✅ Answer: D
Q142.
Foreign tourist wants to open account in India. Bank should
open:
A. NRO account
B. NRE account
C. Savings account
D. Ask RBI permission
✅ Answer: A
Q143.
Interest on NRO deposits is taxed at:
A. 30%
B. 25%
C. Not taxable
D. 30% + cess / DTAA rate
✅ Answer: D
Q144.
Minimum and maximum tenure of NRE term deposit is:
A. 6 months – 3 years
B. 1 year – 3 years
C. 1 year – 10 years
D. 15 days – 3 years
✅ Answer: C
Q145.
Maximum repatriation from NRO account per FY:
A. USD 1 million
B. No limit
C. USD 25,000
D. Not allowed
✅ Answer: A
Q146.
Joint account “Former or Survivor”, no nomination, both die.
Amount payable to:
A. Heirs of A
B. Heirs of B
C. Heirs of A & B
D. Nobody
✅ Answer: C
Q147.
Relationship in matured unclaimed deposit is:
A. Debtor–Creditor
B. Trustee–Principal
C. Creditor–Debtor
D. Trustee–Beneficiary
✅ Answer: A
Q148.
POA holder accepted bill, POA revoked before maturity.
Liability of principal:
A. Can refuse payment
B. Cannot refuse payment
C. Acceptance invalid
D. None
✅ Answer: B
Q149.
Unused foreign exchange beyond USD 2000 must be surrendered
within:
A. 60 days
B. 90 days
C. 180 days
D. 6 months
✅ Answer: D
Q150.
Surcharge applicable when taxable income exceeds ₹1 crore
is:
A. 1%
B. 2%
C. 10%
D. 12%
✅ Answer: D
Q151.
For banking transactions, an Administrator means:
A. Appointed by legal heirs
B. Appointed under a will
C. Appointed by bank
D. Appointed by court when a person dies intestate
✅ Answer: D
Q152.
Which of the following is NOT a material alteration?
A. Change in date
B. Change in name of payee
C. Change in amount
D. Crossing of an open cheque
✅ Answer: D
Q153.
A minor aged 16 years presents a cheque for ₹30,000. Payment
can be made because:
A. Amount is small
B. Minor can give valid discharge
C. Guardian consent is required
D. Receipt must be stamped
✅ Answer: B
Q154.
A locker holder gives power of attorney to his 15-year-old
daughter to operate locker. Bank should:
A. Reject – minor cannot be attorney
B. Reject – POA not allowed for locker
C. Allow only if spouse is deceased
D. Allow – minor can be attorney
✅ Answer: D
Q155.
A lady married to a foreigner of Indian origin (other than
purchase of immovable property) is treated as:
A. PIO
B. Indian
C. Both PIO & Indian
D. None
✅ Answer: A
Q156.
Minimum maturity period of Certificate of Deposit and
Commercial Paper is:
A. 14 days & 7 days
B. 7 days & 14 days
C. 7 days & 7 days
D. 14 days & 14 days
✅ Answer: C
Q157.
Which of the following is issued by Registrar of Companies?
A. Articles of Association
B. Memorandum of Association
C. Certificate of Registration
D. Certificate of Commencement of Business
E. C and D
✅ Answer: E
Q158.
In case of time-barred debts, right of set-off:
A. Is not available
B. Is available
C. Needs borrower consent
D. Needs court permission
✅ Answer: B
Q159.
A bill dated 29-01-2005 payable one month after date falls
due on:
A. 28-02-2005
B. 01-03-2005
C. 02-03-2005
D. 03-03-2005
✅ Answer: D
Q160.
A cheque without words “bearer” or “order” is treated as:
A. Bearer cheque
B. Order cheque
C. Invalid cheque
D. Truncated cheque
✅ Answer: B
Q161.
Who can open Resident Foreign Currency (RFC) account?
A. Residents
B. Foreigners
C. Non-resident becoming resident
D. Resident becoming non-resident
✅ Answer: C
Q162.
Fourth partner issues stop payment in a current account
operated singly by first three partners. Bank should:
A. Accept stop payment
B. Accept with confirmation
C. Accept if all partners agree
D. Not accept
✅ Answer: A
Q163.
Nomination facility is available in:
A. Individual accounts
B. Proprietorship concern
C. HUF
D. Partnership firm
E. A and B
✅ Answer: E
Q164.
Maximum investment under Senior Citizen Savings Scheme is:
A. ₹15 lakh
B. ₹10 lakh
C. Retirement benefits only
D. A and C
E. ₹15 lakh (60+) or retirement benefits (55+)
✅ Answer: E
Q165.
A fixed deposit maturing on 25-12-2011 will be payable on:
A. 24-12-2011
B. 26-12-2011 with FD interest
C. 26-12-2011 without interest
D. 26-12-2011 with savings interest
✅ Answer: B
Q166.
Net working capital is ₹80,000 and current ratio is 3:1.
Current liabilities are:
A. ₹80,000
B. ₹1,20,000
C. ₹40,000
D. ₹60,000
✅ Answer: C
Q167.
Life certificate for pensioners is to be obtained in:
A. November
B. December
C. March
D. January
✅ Answer: A
Q168.
Deduction under Section 80U for disabled persons is:
A. ₹50,000
B. ₹80,000
C. ₹75,000
D. ₹60,000
✅ Answer: C
Q169.
Who can open Resident Foreign Currency account?
A. Residents
B. Foreigners
C. Non-resident becoming resident
D. Resident becoming non-resident
✅ Answer: C
Q170.
Nomination in a “Former or Survivor” deposit account is
signed by:
A. Former only
B. Survivor only
C. Both account holders
D. Nomination not allowed
✅ Answer: C
Q171.
Garnishee order is issued under:
A. Indian Penal Code
B. Civil Procedure Code
C. Negotiable Instruments Act
D. Contract Act
✅ Answer: B
Q172.
Interest rate NOT deregulated by RBI is in:
A. Fixed deposits
B. Savings accounts
C. Time deposits
D. None of the above
✅ Answer: D
Q173.
Before accepting foreign contribution, societies must obtain
permission from:
A. RBI
B. Ministry of Finance
C. Ministry of Home Affairs
D. Ministry of External Affairs
✅ Answer: C
Q174.
Unclaimed deposit details are furnished to RBI under:
A. Section 26 BR Act
B. Section 26 RBI Act
C. Section 26 NI Act
D. Section 26 Contract Act
✅ Answer: A
Q175.
Who cannot be a partner?
A. Illiterate
B. Blind person
C. Company
D. Partnership firm
E. HUF
✅ Answer: D
Q176.
Maximum remittance under Western Union Money Transfer is:
A. ₹50,000
B. USD 2,500 equivalent
C. USD 4,000
D. No limit
✅ Answer: B
Q177.
Negotiable instrument payable on demand should be presented
within:
A. 48 hours
B. 24 hours
C. Reasonable time
D. 7 days
✅ Answer: C
Q178.
Minimum interest payable in a savings account is:
A. 50 paise
B. Re.1
C. ₹5
D. ₹10
✅ Answer: B
Q179.
The drawee of a cheque is always the:
A. Bank
B. Account holder
C. Payee
D. Endorsee
✅ Answer: A
Q180.
Who can open a current account?
A. Executor
B. Administrator
C. Trust
D. Liquidator
E. All of the above
✅ Answer: E
Q181.
Minimum balance in savings account is fixed by:
A. Individual banks
B. RBI
C. Government of India
D. IBA
✅ Answer: A
Q182.
Account Payee crossing is defined under:
A. NI Act
B. Contract Act
C. RBI Act
D. No Act
✅ Answer: D
Q183.
Certificate of Deposit matures on a holiday. It is payable
on:
A. Previous working day
B. Next working day
C. Invalid CD
D. After 3 days
✅ Answer: A
Q184.
PPF account can be opened by:
A. Resident
B. Non-resident
C. HUF
D. All of the above
✅ Answer: A
Q185.
Minimum and maximum deposit in PPF per year is:
A. ₹500 & ₹70,000
B. ₹100 & ₹1,00,000
C. ₹500 & ₹1,50,000
D. ₹100 & ₹70,000
✅ Answer: C
Q186.
Section 45Z of Banking Regulation Act deals with:
A. Nomination for deposits
B. Nomination for safe custody
C. Nomination for lockers
D. Return of paid cheques
✅ Answer: D
Q187.
If sole trustee dies, account is managed by:
A. Nobody
B. Government of India
C. State Government
D. Court-appointed trustee
✅ Answer: D
Q188.
A depositor has taken loan against FD and wants to add
another name. Bank should:
A. Allow
B. Not allow
C. Allow after adjusting loan
D. Allow after maturity
✅ Answer: C
Q189.
Interest rate on Senior Citizen Savings Scheme is:
A. 4.5%
B. 3.5%
C. 9.2%
D. 8.6%
✅ Answer: C
Q190.
Next installment of RD opened on 12-11-2010 can be paid:
A. Only on 12-12-2010
B. Before 12-12-2010
C. After 12-12-2010
D. Any day in December
✅ Answer: D
Q191.
Senior citizen to avoid TDS on interest must submit:
A. Form 15H
B. Form 15G
C. Form 60
D. Form 61
✅ Answer: A
Q192.
Ceiling for referring cases to Lok Adalat is:
A. ₹10 lakh
B. ₹20 lakh
C. ₹1 crore
D. ₹15 lakh
✅ Answer: B
Q193.
Who cannot be nominee in a deposit account?
A. Male minor
B. Female minor
C. Married woman
D. Blind person
E. None
✅ Answer: E
Q194.
Change in minimum balance must be informed to customers at
least:
A. One month in advance
B. Three months in advance
C. Seven days in advance
D. Six months in advance
✅ Answer: A
Q195.
Which does NOT attract TDS?
A. RDS
B. Certificate of Deposit
C. Savings account interest
D. None
✅ Answer: C
Q196.
Commercial paper can be issued for a maximum period of:
A. 7 days
B. 15 days
C. 1 year
D. 6 months
✅ Answer: C
Q197.
Commercial paper can be issued in denomination of:
A. ₹1 lakh & multiples
B. ₹5 lakh & multiples of ₹1 lakh
C. ₹1 lakh & multiples of ₹5 lakh
D. ₹5 lakh & multiples of ₹5 lakh
✅ Answer: D
Q198.
Certificate of Deposit minimum maturity period is:
A. 7 days
B. 15 days
C. 30 days
D. 91 days
✅ Answer: A
Q199.
(Reserved for continuation from original set)
Q200.
(Reserved for continuation from original set)
Q201.
In a joint account operated as “Either or Survivor”,
nomination is signed by:
A. Either account holder
B. Survivor only
C. Both account holders
D. Nomination not permitted
✅ Answer: C
Q202.
A cheque payable to bearer on demand can be issued by:
A. Any individual
B. Any bank
C. RBI only
D. Government only
✅ Answer: C
Q203.
Which of the following instruments does NOT require
stamping?
A. Promissory Note
B. Bill of Exchange
C. Cheque
D. Hundis
✅ Answer: C
Q204.
A cheque marked “Account Payee Only” implies:
A. Cheque cannot be transferred
B. Payment must be in cash
C. Credit only to payee’s account
D. Drawee bank restriction
✅ Answer: C
Q205.
A banker who collects a crossed cheque negligently loses
protection under:
A. Section 85 NI Act
B. Section 89 NI Act
C. Section 131 NI Act
D. Section 138 NI Act
✅ Answer: C
Q206.
A post-dated cheque is payable:
A. On the date of issue
B. On the date written on cheque
C. After three days grace
D. Immediately on presentation
✅ Answer: B
Q207.
Cheque crossed “Not Negotiable” means:
A. Cheque cannot be transferred
B. Transferee gets better title
C. Transferee cannot get better title
D. Cheque becomes invalid
✅ Answer: C
Q208.
Holder in due course gets title:
A. Same as transferor
B. Inferior to transferor
C. Better than transferor
D. No title
✅ Answer: C
Q209.
A cheque becomes stale after:
A. 3 months
B. 6 months
C. 1 year
D. No limit
✅ Answer: A
Q210.
A cheque marked “Payment stopped by drawer” should be:
A. Honoured
B. Returned unpaid
C. Held for confirmation
D. Paid after verification
✅ Answer: B
Q211.
Who is the maker of a promissory note?
A. Payee
B. Drawee
C. Drawer
D. Promisor
✅ Answer: D
Q212.
A minor can be a:
A. Maker of PN
B. Drawer of cheque
C. Endorser
D. Payee
✅ Answer: D
Q213.
A cheque payable to “A or order” is:
A. Bearer cheque
B. Order cheque
C. Crossed cheque
D. Invalid cheque
✅ Answer: B
Q214.
A cheque without date is called:
A. Stale cheque
B. Post-dated cheque
C. Ante-dated cheque
D. Inchoate cheque
✅ Answer: D
Q215.
An inchoate instrument is completed under Section:
A. 5 NI Act
B. 6 NI Act
C. 20 NI Act
D. 87 NI Act
✅ Answer: C
Q216.
Which of the following cannot be endorsed?
A. Bearer cheque
B. Order cheque
C. Promissory note
D. Non-negotiable instrument
✅ Answer: D
Q217.
Which crossing restricts further negotiation?
A. General crossing
B. Special crossing
C. Account Payee crossing
D. Not Negotiable crossing
✅ Answer: C
Q218.
Payment of crossed cheque must be made to:
A. Payee only
B. Endorsee only
C. Banker
D. Any holder
✅ Answer: C
Q219.
A cheque payable to bearer but crossed is payable:
A. In cash
B. Only through a bank
C. Only to drawer
D. Only to payee
✅ Answer: B
Q220.
Which endorsement makes endorser free from liability?
A. Blank endorsement
B. Full endorsement
C. Sans recourse endorsement
D. Restrictive endorsement
✅ Answer: C
Q221.
A cheque payable to order is transferred by:
A. Delivery only
B. Endorsement only
C. Endorsement and delivery
D. Assignment
✅ Answer: C
Q222.
The maturity date of a bill payable “after sight” is
calculated from:
A. Date of bill
B. Date of acceptance
C. Date of endorsement
D. Date of negotiation
✅ Answer: B
Q223.
Three days grace period is NOT allowed for:
A. Usance bill
B. Time bill
C. Promissory note
D. Cheque
✅ Answer: D
Q224.
Which of the following is NOT a negotiable instrument?
A. Cheque
B. Bill of exchange
C. Promissory note
D. Share certificate
✅ Answer: D
Q225.
A cheque crossed specially must be paid to:
A. Any banker
B. Named banker only
C. Drawer
D. Payee
✅ Answer: B
Q226.
A collecting banker gets statutory protection under:
A. Section 85
B. Section 89
C. Section 131
D. Section 138
✅ Answer: C
Q227.
The term “Bearer” means:
A. Named payee
B. Holder in due course
C. Person in possession of instrument
D. Drawer of cheque
✅ Answer: C
Q228.
A cheque payable to bearer on demand drawn by non-RBI is:
A. Valid
B. Invalid
C. Valid with endorsement
D. Valid if crossed
✅ Answer: B
Q229.
Who is the drawee of a cheque?
A. Drawer
B. Payee
C. Bank
D. Endorser
✅ Answer: C
Q230.
A cheque crossed “A/c Payee” can be credited to:
A. Any account
B. Payee’s account only
C. Drawer’s account
D. Joint account
✅ Answer: B
Q231.
A cheque payable to bearer becomes order cheque when:
A. It is crossed
B. “Bearer” is struck off
C. “Order” is written
D. Endorsed in blank
✅ Answer: B
Q232.
A banker paying cheque in due course is protected under:
A. Section 10
B. Section 85
C. Section 87
D. Section 131
✅ Answer: B
Q233.
Negotiable instrument must be payable:
A. In goods
B. In services
C. In money
D. In gold
✅ Answer: C
Q234.
The holder of a cheque is:
A. Drawer
B. Drawee
C. Payee or endorsee in possession
D. Witness
✅ Answer: C
Q235.
Endorsement must be:
A. Conditional only
B. Unconditional
C. Oral
D. Separate document
✅ Answer: B
Q236.
Which instrument can be transferred without endorsement?
A. Order cheque
B. Bearer cheque
C. Promissory note
D. Bill of exchange
✅ Answer: B
Q237.
The term “Dishonor” means:
A. Delay in payment
B. Refusal to accept or pay
C. Wrong endorsement
D. Non-crossing
✅ Answer: B
Q238.
A cheque payable to “Self” means payable to:
A. Payee only
B. Drawer
C. Bearer
D. Banker
✅ Answer: B
Q239.
A cheque is valid for payment for:
A. 3 months
B. 6 months
C. 1 year
D. Unlimited
✅ Answer: A
Q240.
Who is primarily liable on a promissory note?
A. Endorser
B. Payee
C. Maker
D. Drawee
✅ Answer: C
Q241.
Which endorsement prohibits further negotiation?
A. Blank endorsement
B. Full endorsement
C. Restrictive endorsement
D. Sans recourse endorsement
✅ Answer: C
Q242.
A cheque payable to order becomes bearer when:
A. Endorsed in full
B. Endorsed in blank
C. Crossed
D. Post-dated
✅ Answer: B
Q243.
Which is NOT a feature of negotiability?
A. Free transferability
B. Holder gets good title
C. Payable in money
D. Requires registration
✅ Answer: D
Q244.
Who is NOT a party to a cheque?
A. Drawer
B. Drawee
C. Payee
D. Acceptor
✅ Answer: D
Q245.
Acceptance is required in:
A. Cheque
B. Promissory note
C. Bill of exchange
D. All instruments
✅ Answer: C
Q246.
A cheque crossed generally bears:
A. Name of banker
B. Two parallel transverse lines
C. Amount in words
D. Signature of drawer
✅ Answer: B
Q247.
An instrument payable to bearer is negotiated by:
A. Endorsement only
B. Delivery only
C. Endorsement and delivery
D. Assignment
✅ Answer: B
Q248.
A cheque payable to order is negotiated by:
A. Delivery only
B. Endorsement only
C. Endorsement and delivery
D. Assignment
✅ Answer: C
Q249.
Which instrument is payable after a fixed period?
A. Demand bill
B. Sight bill
C. Usance bill
D. Bearer cheque
✅ Answer: C
Q250.
A cheque crossed “Not Negotiable”:
A. Is not transferable
B. Loses negotiability
C. Limits title of transferee
D. Is invalid
✅ Answer: C
Q251.
Who is the holder in due course?
A. Holder without consideration
B. Holder who gets instrument after maturity
C. Holder for consideration before maturity in good faith
D. Any holder
✅ Answer: C
Q252.
A cheque payable to bearer on demand is prohibited under:
A. NI Act
B. Contract Act
C. RBI Act
D. Banking Regulation Act
✅ Answer: C
Q253.
Negotiable instrument must be signed by:
A. Payee
B. Holder
C. Maker or drawer
D. Witness
✅ Answer: C
Q254.
Which of the following is a time instrument?
A. Cheque
B. Demand draft
C. Usance bill
D. Bearer cheque
✅ Answer: C
Q255.
A cheque marked “Self” and crossed A/c Payee is payable to:
A. Drawer in cash
B. Drawer through bank
C. Bearer
D. Any account
✅ Answer: B
Q256.
A cheque without signature is:
A. Invalid
B. Bearer
C. Order cheque
D. Valid if crossed
✅ Answer: A
Q257.
Which of the following is NOT endorsement?
A. Blank endorsement
B. Full endorsement
C. Conditional endorsement
D. Oral endorsement
✅ Answer: D
Q258.
Who is secondarily liable on a bill of exchange?
A. Drawer
B. Drawee
C. Acceptor
D. Payee
✅ Answer: A
Q259.
A cheque endorsed “Pay A only” is an example of:
A. Blank endorsement
B. Restrictive endorsement
C. Full endorsement
D. Conditional endorsement
✅ Answer: B
Q260.
A negotiable instrument becomes overdue when:
A. Presented late
B. Not accepted
C. Not paid on maturity
D. Endorsed late
✅ Answer: C
Q261.
A cheque crossed “Account Payee” is primarily meant to
protect the interest of:
A. Paying banker
B. Collecting banker
C. Drawer
D. Payee
✅ Answer: D
Q262.
If a cheque is altered without drawer’s consent, the banker
should:
A. Honour the cheque
B. Partly honour
C. Return the cheque
D. Seek clarification
✅ Answer: C
Q263.
Material alteration without consent renders the instrument:
A. Voidable
B. Void
C. Irregular
D. Negotiable
✅ Answer: B
Q264.
The paying banker must verify the drawer’s signature
primarily to protect:
A. Payee
B. Endorsee
C. Drawer
D. Collecting banker
✅ Answer: C
Q265.
Protection to paying banker for payment in due course is
available under:
A. Section 10 NI Act
B. Section 31 NI Act
C. Section 85 NI Act
D. Section 131 NI Act
✅ Answer: C
Q266.
A banker may refuse payment of a cheque due to:
A. Death of drawer
B. Insanity of drawer
C. Insolvency of drawer
D. All of the above
✅ Answer: D
Q267.
When a cheque is returned unpaid, the proper course is to
issue:
A. Legal notice immediately
B. Return memo
C. Stop payment advice
D. FIR
✅ Answer: B
Q268.
Who bears the loss if a cheque is paid on forged endorsement
but genuine drawer’s signature?
A. Drawer
B. Paying banker
C. Collecting banker
D. Payee
✅ Answer: B
Q269.
A cheque payable to order requires endorsement by:
A. Drawer
B. Payee
C. Banker
D. Bearer
✅ Answer: B
Q270.
A cheque marked “Not Negotiable” but crossed can still be:
A. Paid in cash
B. Transferred
C. Invalid
D. Cancelled
✅ Answer: B
Q271.
A cheque payable to bearer can be negotiated by:
A. Endorsement only
B. Delivery only
C. Endorsement and delivery
D. Assignment
✅ Answer: B
Q272.
The relationship between banker and customer in case of
deposit is:
A. Trustee–Beneficiary
B. Agent–Principal
C. Debtor–Creditor
D. Bailor–Bailee
✅ Answer: C
Q273.
In case of loan account, relationship between banker and
customer is:
A. Debtor–Creditor
B. Creditor–Debtor
C. Trustee–Beneficiary
D. Agent–Principal
✅ Answer: B
Q274.
Lien is defined under:
A. NI Act
B. Contract Act
C. Banking Regulation Act
D. Transfer of Property Act
✅ Answer: B
Q275.
Banker’s lien is:
A. Particular lien
B. Contingent lien
C. General lien
D. Statutory lien
✅ Answer: C
Q276.
Right of set-off can be exercised when:
A. Accounts are in same name
B. Amounts are due and payable
C. Mutual dealings exist
D. All of the above
✅ Answer: D
Q277.
Banker’s right of appropriation is applicable when:
A. Customer gives no direction
B. Customer gives direction
C. Court directs
D. RBI directs
✅ Answer: A
Q278.
Garnishee order attaches:
A. Debts due to judgment debtor
B. Movable property
C. Immovable property
D. Cash in hand
✅ Answer: A
Q279.
A garnishee order absolute means:
A. Temporary attachment
B. Final attachment
C. Conditional attachment
D. Partial attachment
✅ Answer: B
Q280.
In case of garnishee order, banker should stop:
A. All debits and credits
B. Only debits
C. Only credits
D. Only interest
✅ Answer: B
Q281.
Banker’s lien does NOT apply to:
A. Securities deposited for safe custody
B. Bills sent for collection
C. Balance in current account
D. All of the above
✅ Answer: D
Q282.
Assignment of book debts is governed by:
A. NI Act
B. Contract Act
C. Transfer of Property Act
D. Companies Act
✅ Answer: C
Q283.
Hypothecation differs from pledge because:
A. Ownership changes
B. Possession remains with borrower
C. Goods are immovable
D. Goods are insured
✅ Answer: B
Q284.
Mortgage always relates to:
A. Movable property
B. Immovable property
C. Negotiable instruments
D. Cash
✅ Answer: B
Q285.
Equitable mortgage is created by:
A. Registered deed
B. Delivery of title deeds
C. Agreement only
D. Court order
✅ Answer: B
Q286.
English mortgage involves:
A. Conditional sale
B. Delivery of possession
C. Absolute transfer with retransfer condition
D. Deposit of title deeds
✅ Answer: C
Q287.
Simple mortgage involves:
A. Delivery of possession
B. Personal covenant to pay
C. Absolute transfer
D. Sale of property
✅ Answer: B
Q288.
Mortgage by conditional sale becomes absolute if:
A. Money is paid
B. Money is not paid
C. Court orders
D. Mortgagee agrees
✅ Answer: B
Q289.
Right of redemption is available to mortgagor until:
A. Mortgage money is paid
B. Mortgage is foreclosed
C. Sale deed executed
D. Interest is waived
✅ Answer: B
Q290.
Pledge is defined under:
A. NI Act
B. Sale of Goods Act
C. Contract Act
D. Transfer of Property Act
✅ Answer: B
Q291.
In pledge, the pawnee has the right to:
A. Use goods
B. Sell goods after default
C. Destroy goods
D. Mortgage goods
✅ Answer: B
Q292.
Hypothecation is commonly used for:
A. Gold loans
B. Vehicle loans
C. Land loans
D. Housing loans
✅ Answer: B
Q293.
Which security requires registration with Registrar of
Companies?
A. Pledge
B. Hypothecation
C. Equitable mortgage
D. All of the above
✅ Answer: B
Q294.
Charge must be registered within how many days under
Companies Act?
A. 7 days
B. 14 days
C. 30 days
D. 60 days
✅ Answer: C
Q295.
Failure to register charge makes it:
A. Void against liquidator
B. Void against company
C. Fully valid
D. Recoverable later
✅ Answer: A
Q296.
Which form is filed for creation of charge?
A. CHG-1
B. CHG-4
C. CHG-9
D. CHG-12
✅ Answer: A
Q297.
Who is responsible for registration of charge?
A. Registrar
B. Company
C. Bank
D. Court
✅ Answer: B
Q298.
SARFAESI Act applies to loans above:
A. ₹50,000
B. ₹1 lakh
C. ₹5 lakh
D. ₹10 lakh
✅ Answer: B
Q299.
SARFAESI Act is NOT applicable to:
A. Housing loan
B. Agricultural land
C. Commercial property
D. Factory land
✅ Answer: B
Q300.
Minimum overdue period to classify asset as NPA is:
A. 30 days
B. 60 days
C. 90 days
D. 120 days
✅ Answer: C
Q301.
Substandard asset is one which has remained NPA for:
A. Less than 6 months
B. Up to 12 months
C. More than 12 months
D. More than 24 months
✅ Answer: B
Q302.
Doubtful asset is one which has remained NPA for more than:
A. 6 months
B. 12 months
C. 18 months
D. 24 months
✅ Answer: B
Q303.
Loss asset is one where:
A. Value is fully recoverable
B. Loss is identified but not written off
C. No security available
D. Account is standard
✅ Answer: B
Q304.
Provisioning for standard assets is:
A. Nil
B. 0.25%
C. 1%
D. 5%
✅ Answer: B
Q305.
Income on NPA is recognized on:
A. Accrual basis
B. Cash basis
C. Receipt basis
D. Year-end basis
✅ Answer: B
Q306.
Which account is excluded from NPA classification?
A. Overdraft
B. Cash credit
C. Agricultural advances
D. Term loan
✅ Answer: C
Q307.
Agricultural loan becomes NPA when interest/principal
overdue for:
A. One crop season
B. Two crop seasons
C. Three crop seasons
D. Four crop seasons
✅ Answer: B
Q308.
Which committee recommended NPA norms?
A. Narasimham Committee
B. Urjit Patel Committee
C. Rangarajan Committee
D. Tarapore Committee
✅ Answer: A
Q309.
Asset classification norms are prescribed by:
A. Government of India
B. RBI
C. SEBI
D. NABARD
✅ Answer: B
Q310.
Provisioning norms for NPAs are issued by:
A. Government
B. RBI
C. Courts
D. Banks individually
✅ Answer: B
Q311.
Which of the following is treated as a standard asset?
A. Asset overdue for 120 days
B. Asset overdue for 90 days
C. Asset not overdue beyond prescribed period
D. Asset identified as loss
✅ Answer: C
Q312.
Provisioning for sub-standard assets (secured portion) is
generally:
A. 5%
B. 10%
C. 15%
D. 25%
✅ Answer: C
Q313.
Provisioning for doubtful assets depends mainly on:
A. Amount of loan
B. Period for which asset remained doubtful
C. Type of borrower
D. Rate of interest
✅ Answer: B
Q314.
Loss assets should be:
A. Continued as NPA
B. Written off
C. Upgraded
D. Converted to doubtful
✅ Answer: B
Q315.
Which advance is exempted from income recognition on accrual
basis?
A. Standard advance
B. Sub-standard advance
C. Doubtful advance
D. All NPAs
✅ Answer: D
Q316.
Cash credit account becomes NPA when it remains out of order
for:
A. 30 days
B. 60 days
C. 90 days
D. 120 days
✅ Answer: C
Q317.
A term loan is treated as NPA when interest or installment
is overdue for:
A. 30 days
B. 60 days
C. 90 days
D. 180 days
✅ Answer: C
Q318.
Which of the following is NOT included under priority
sector?
A. Agriculture
B. MSME
C. Education loan
D. Luxury housing loan
✅ Answer: D
Q319.
Priority sector lending target for domestic scheduled
commercial banks is:
A. 30%
B. 35%
C. 40%
D. 45%
✅ Answer: C
Q320.
Sub-target for agriculture under priority sector is:
A. 10%
B. 12%
C. 15%
D. 18%
✅ Answer: D
Q321.
Priority sector target for weaker sections is:
A. 5%
B. 7%
C. 10%
D. 12%
✅ Answer: C
Q322.
Which institution monitors priority sector lending?
A. SEBI
B. NABARD
C. RBI
D. SIDBI
✅ Answer: C
Q323.
MSME classification is based on:
A. Turnover only
B. Investment only
C. Investment and turnover
D. Number of employees
✅ Answer: C
Q324.
Loans to self-help groups fall under:
A. Corporate finance
B. Retail loans
C. Priority sector
D. Non-priority sector
✅ Answer: C
Q325.
Education loans are treated as priority sector if sanctioned
to:
A. Any institution
B. Individuals only
C. Foreign universities only
D. Government employees
✅ Answer: B
Q326.
Export credit is classified under:
A. Priority sector
B. Non-priority sector
C. Retail banking
D. Corporate banking
✅ Answer: A
Q327.
Which of the following is a direct agriculture advance?
A. Loan to fertilizer dealer
B. Loan to tractor dealer
C. Crop loan to farmer
D. Loan to agri-warehouse
✅ Answer: C
Q328.
Indirect agriculture advance includes:
A. Crop loans
B. Kisan Credit Card
C. Loans to agri-input dealers
D. Land purchase loans
✅ Answer: C
Q329.
Priority sector targets are calculated on the basis of:
A. Total assets
B. Deposits
C. Adjusted Net Bank Credit
D. Capital funds
✅ Answer: C
Q330.
Which bank has 75% priority sector target?
A. Scheduled commercial bank
B. Foreign bank with branches
C. RRB
D. Cooperative bank
✅ Answer: C
Q331.
Small and Marginal farmers are those owning land up to:
A. 1 hectare
B. 2 hectares
C. 2.5 hectares
D. 5 hectares
✅ Answer: B
Q332.
Which loan is treated as retail loan?
A. Crop loan
B. Housing loan to individual
C. Term loan to company
D. Cash credit to trader
✅ Answer: B
Q333.
Maximum amount for priority sector housing loan in
metropolitan cities is:
A. ₹25 lakh
B. ₹35 lakh
C. ₹45 lakh
D. ₹50 lakh
✅ Answer: C
Q334.
Gold loans to individuals are classified as:
A. Priority sector
B. Retail loans
C. Corporate loans
D. Agricultural loans
✅ Answer: B
Q335.
Which of the following is NOT a retail loan?
A. Personal loan
B. Vehicle loan
C. Housing loan
D. Working capital loan
✅ Answer: D
Q336.
Loan against shares and debentures to individuals is treated
as:
A. Corporate loan
B. Priority sector loan
C. Retail loan
D. Agricultural loan
✅ Answer: C
Q337.
Which of the following comes under non-fund based facility?
A. Term loan
B. Cash credit
C. Bank guarantee
D. Overdraft
✅ Answer: C
Q338.
Letter of Credit is a commitment issued by:
A. Importer
B. Exporter
C. Bank
D. Shipping company
✅ Answer: C
Q339.
Which of the following is a contingent liability of a bank?
A. Term loan
B. Cash credit
C. Bank guarantee
D. Demand loan
✅ Answer: C
Q340.
In case of invocation of bank guarantee, the bank:
A. Can refuse payment
B. Must honor immediately
C. Needs court order
D. Needs customer consent
✅ Answer: B
Q341.
Which type of guarantee ensures performance of a contract?
A. Financial guarantee
B. Deferred payment guarantee
C. Performance guarantee
D. Bid bond
✅ Answer: C
Q342.
Bid bond guarantee is generally issued for:
A. Export contracts
B. Government tenders
C. Housing loans
D. Personal loans
✅ Answer: B
Q343.
Deferred payment guarantee is used mainly for:
A. Purchase of machinery
B. Purchase of shares
C. Payment of salary
D. Import of gold
✅ Answer: A
Q344.
A Letter of Credit primarily protects the interest of:
A. Importer
B. Exporter
C. Shipping company
D. Insurance company
✅ Answer: B
Q345.
Revocable letter of credit can be cancelled by:
A. Exporter
B. Importer
C. Issuing bank without notice
D. Advising bank
✅ Answer: C
Q346.
Most commonly used letter of credit is:
A. Revocable LC
B. Irrevocable LC
C. Transferable LC
D. Revolving LC
✅ Answer: B
Q347.
A confirmed letter of credit adds guarantee of:
A. Importer
B. Exporter
C. Confirming bank
D. Advising bank
✅ Answer: C
Q348.
Which LC allows transfer of credit to another party?
A. Revolving LC
B. Red clause LC
C. Transferable LC
D. Back-to-back LC
✅ Answer: C
Q349.
Red clause letter of credit allows:
A. Post-shipment finance
B. Advance to exporter
C. Transfer of LC
D. Payment after maturity
✅ Answer: B
Q350.
Back-to-back LC is opened on the basis of:
A. Importer’s request
B. Exporter’s own funds
C. Original export LC
D. Shipping documents
✅ Answer: C
Q351.
Which document evidences shipment of goods?
A. Invoice
B. Bill of Lading
C. Packing list
D. Insurance policy
✅ Answer: B
Q352.
Bill of Lading is issued by:
A. Importer
B. Exporter
C. Shipping company
D. Bank
✅ Answer: C
Q353.
Which bill of lading is negotiable?
A. Clean bill
B. Claused bill
C. Order bill
D. Straight bill
✅ Answer: C
Q354.
A clean bill of lading indicates:
A. Damaged goods
B. Short shipment
C. Goods in apparent good condition
D. Missing documents
✅ Answer: C
Q355.
Which document shows ownership of goods?
A. Invoice
B. Bill of Lading
C. Packing list
D. Certificate of origin
✅ Answer: B
Q356.
Which Incoterm places maximum responsibility on seller?
A. FOB
B. CIF
C. EXW
D. DDP
✅ Answer: D
Q357.
Which Incoterm places minimum responsibility on seller?
A. FOB
B. CIF
C. EXW
D. DDP
✅ Answer: C
Q358.
Export bill purchased by bank is:
A. Fund-based advance
B. Non-fund based
C. Contingent liability
D. Off-balance item
✅ Answer: A
Q359.
Which risk is covered under ECGC?
A. Exchange risk
B. Political and commercial risk
C. Interest rate risk
D. Liquidity risk
✅ Answer: B
Q360.
ECGC stands for:
A. Export Credit Guarantee Corporation
B. Export Council of Goods
C. Economic Credit Guarantee Council
D. Export Credit Growth Corporation
✅ Answer: A
Q361.
Which policy covers loss due to non-payment by foreign
buyers?
A. Marine insurance
B. Fire insurance
C. ECGC policy
D. Transit insurance
✅ Answer: C
Q362.
Pre-shipment credit is also known as:
A. Post-shipment finance
B. Packing credit
C. Export bill discounting
D. Buyers’ credit
✅ Answer: B
Q363.
Post-shipment credit is granted after:
A. Receipt of export order
B. Shipment of goods
C. Realisation of export proceeds
D. Issuance of LC
✅ Answer: B
Q364.
Maximum period of pre-shipment credit is generally:
A. 90 days
B. 180 days
C. 270 days
D. 360 days
✅ Answer: B
Q365.
Export bills purchased/discounted become NPA if unrealised
beyond:
A. 90 days
B. 180 days
C. 360 days
D. 540 days
✅ Answer: C
Q366.
Which document is mandatory for claiming ECGC cover?
A. Bill of Lading
B. Export invoice
C. Insurance policy
D. ECGC policy declaration
✅ Answer: D
Q367.
Advance against export incentives is treated as:
A. Priority sector advance
B. Non-priority advance
C. Retail advance
D. Agricultural advance
✅ Answer: A
Q368.
Export proceeds must be realised within:
A. 3 months
B. 6 months
C. 9 months
D. 12 months
✅ Answer: D
Q369.
Which organization regulates foreign trade in India?
A. RBI
B. DGFT
C. SEBI
D. NABARD
✅ Answer: B
Q370.
IEC code is issued by:
A. RBI
B. Customs
C. DGFT
D. Ministry of Finance
✅ Answer: C
Q371.
Which document is issued by exporter to importer?
A. Bill of Lading
B. Shipping bill
C. Commercial invoice
D. Mate’s receipt
✅ Answer: C
Q372.
Which document is prepared by customs authorities?
A. Invoice
B. Shipping bill
C. Packing list
D. Certificate of origin
✅ Answer: B
Q373.
Which document certifies the country of origin of goods?
A. Bill of Lading
B. Invoice
C. Certificate of origin
D. Shipping bill
✅ Answer: C
Q374.
Which is NOT a shipping document?
A. Bill of Lading
B. Airway Bill
C. Insurance policy
D. Mate’s receipt
✅ Answer: C
Q375.
Airway bill is:
A. Negotiable
B. Non-negotiable
C. Conditionally negotiable
D. Partly negotiable
✅ Answer: B
Q376.
Who issues Mate’s Receipt?
A. Exporter
B. Importer
C. Captain of the ship
D. Customs officer
✅ Answer: C
Q377.
Which document is exchanged for Bill of Lading?
A. Shipping bill
B. Invoice
C. Mate’s receipt
D. Packing list
✅ Answer: C
Q378.
Which bill of exchange is drawn by exporter on importer?
A. Inland bill
B. Foreign bill
C. Demand bill
D. Accommodation bill
✅ Answer: B
Q379.
Usance bill means bill payable:
A. On demand
B. On sight
C. After a fixed period
D. On delivery
✅ Answer: C
Q380.
Which bill is accompanied by documents of title to goods?
A. Clean bill
B. Documentary bill
C. Accommodation bill
D. Supply bill
✅ Answer: B
Q381.
Which collection method provides more safety to exporter?
A. Clean collection
B. Documentary collection
C. Open account
D. Advance payment
✅ Answer: B
Q382.
Documents against Payment (D/P) means documents are
released:
A. On acceptance
B. On payment
C. On maturity
D. On delivery
✅ Answer: B
Q383.
Documents against Acceptance (D/A) means documents are
released:
A. On acceptance of bill
B. On payment
C. On maturity
D. On delivery
✅ Answer: A
Q384.
Which method carries maximum risk for exporter?
A. Advance payment
B. Letter of credit
C. Documentary collection
D. Open account
✅ Answer: D
Q385.
Which method carries minimum risk for exporter?
A. Open account
B. Documentary collection
C. Letter of credit
D. Advance payment
✅ Answer: D
Q386.
Which LC provides automatic reinstatement of credit?
A. Revolving LC
B. Transferable LC
C. Red clause LC
D. Standby LC
✅ Answer: A
Q387.
Standby letter of credit is similar to:
A. Letter of comfort
B. Bank guarantee
C. Performance bond
D. Deferred guarantee
✅ Answer: B
Q388.
Which risk is covered by marine insurance?
A. Exchange fluctuation
B. Loss/damage during transit
C. Political risk
D. Credit risk
✅ Answer: B
Q389.
Which policy covers risks prior to shipment?
A. Marine policy
B. ECGC specific policy
C. Packing credit guarantee
D. Whole turnover policy
✅ Answer: C
Q390.
Which credit is extended by foreign banks to Indian
importers?
A. Buyers’ credit
B. Suppliers’ credit
C. Packing credit
D. Export credit
✅ Answer: A
Q391.
Suppliers’ credit is extended by:
A. Importer’s bank
B. Exporter’s bank
C. Overseas supplier
D. RBI
✅ Answer: C
Q392.
Which institution provides refinance for export credit?
A. RBI
B. NABARD
C. EXIM Bank
D. SIDBI
✅ Answer: C
Q393.
EXIM Bank of India was established in:
A. 1980
B. 1981
C. 1982
D. 1983
✅ Answer: B
Q394.
Which export incentive is duty neutralisation scheme?
A. Duty Drawback
B. EPCG
C. MEIS
D. SEZ
✅ Answer: A
Q395.
EPCG scheme allows import of capital goods at:
A. Full duty
B. Zero duty
C. Concessional duty
D. Prohibitive duty
✅ Answer: C
Q396.
Which incentive replaced MEIS?
A. SEIS
B. RODTEP
C. EPCG
D. Advance Authorisation
✅ Answer: B
Q397.
SEZ stands for:
A. Special Economic Zone
B. Small Export Zone
C. Strategic Export Zone
D. State Economic Zone
✅ Answer: A
Q398.
Units in SEZ are treated as:
A. Domestic tariff area
B. Foreign territory for trade
C. Free trade area
D. Export oriented unit only
✅ Answer: B
Q399.
Which export unit is required to achieve positive NFE?
A. DTA unit
B. SEZ unit
C. EOU
D. All exporters
✅ Answer: C
Q400.
EOU stands for:
A. Export Oriented Unit
B. Economic Output Unit
C. External Oriented Unit
D. Export Organisation Unit
✅ Answer: A
Q401.
Which authority grants approval to EOUs?
A. RBI
B. DGFT
C. Development Commissioner
D. SEBI
✅ Answer: C
Q402.
Which tax is exempted for SEZ units?
A. GST
B. Customs duty
C. Income tax (subject to conditions)
D. All of the above
✅ Answer: D
Q403.
Export credit is extended at:
A. Higher rate than domestic credit
B. Same rate as domestic credit
C. Concessional rate
D. Penal rate
✅ Answer: C
Q404.
Which risk is NOT covered by ECGC?
A. Commercial risk
B. Political risk
C. Exchange risk
D. War risk
✅ Answer: C
Q405.
Which statement is correct?
A. Export bills are non-priority sector
B. Export credit is priority sector
C. Export credit is retail loan
D. Export credit is agricultural loan
✅ Answer: B
Q406.
Export bill sent on collection basis is treated as:
A. Fund based
B. Non-fund based
C. Off-balance sheet
D. NPA immediately
✅ Answer: B
Q407.
Which document is prepared by exporter but certified by
Chamber of Commerce?
A. Invoice
B. Packing list
C. Certificate of origin
D. Shipping bill
✅ Answer: C
Q408.
Which act governs foreign exchange transactions in India?
A. FERA
B. FEMA
C. RBI Act
D. Banking Regulation Act
✅ Answer: B
Q409.
FEMA came into force in:
A. 1997
B. 1999
C. 2000
D. 2002
✅ Answer: C
Q410.
Which authority administers FEMA?
A. SEBI
B. RBI
C. Ministry of Finance
D. DGFT
✅ Answer: B
Q411.
Under FEMA, which transaction is treated as capital account
transaction?
A. Import of goods
B. Export of services
C. Investment in foreign securities
D. Remittance for education
✅ Answer: C
Q412.
Which of the following is a current account transaction
under FEMA?
A. Investment abroad
B. Purchase of immovable property outside India
C. Remittance for medical treatment
D. Acquisition of foreign securities
✅ Answer: C
Q413.
Person resident in India is defined under FEMA based on:
A. Citizenship
B. Place of birth
C. Period of stay
D. Passport status
✅ Answer: C
Q414.
A person residing in India for 190 days during the preceding
financial year is:
A. Non-resident
B. Resident
C. PIO
D. Tourist
✅ Answer: B
Q415.
Which of the following is NOT a person resident in India?
A. Foreign national staying for employment
B. Student going abroad for studies
C. Indian citizen posted abroad
D. Person staying for business with intention to stay
✅ Answer: C
Q416.
Remittance for private visit abroad is permitted up to:
A. USD 25,000
B. USD 50,000
C. USD 100,000
D. USD 250,000
✅ Answer: D
Q417.
Liberalised Remittance Scheme (LRS) applies to:
A. NRIs
B. Companies
C. Resident individuals
D. Foreign tourists
✅ Answer: C
Q418.
Maximum remittance under LRS per financial year is:
A. USD 100,000
B. USD 150,000
C. USD 200,000
D. USD 250,000
✅ Answer: D
Q419.
Which remittance is NOT permitted under LRS?
A. Education abroad
B. Medical treatment
C. Investment in shares abroad
D. Margin trading
✅ Answer: D
Q420.
Foreign Direct Investment policy in India is administered
by:
A. RBI
B. SEBI
C. Ministry of Commerce
D. DPIIT
✅ Answer: D
Q421.
Automatic route under FDI means:
A. Prior RBI approval required
B. Prior Government approval required
C. No prior approval required
D. Approval after investment
✅ Answer: C
Q422.
Which sector has 100% FDI allowed under automatic route
(subject to conditions)?
A. Insurance
B. Defence manufacturing
C. Single brand retail
D. Print media
✅ Answer: C
Q423.
Which of the following is NOT a mode of FDI?
A. Equity shares
B. Compulsorily convertible debentures
C. Preference shares
D. Non-convertible debentures
✅ Answer: D
Q424.
Foreign Portfolio Investment is regulated by:
A. RBI
B. SEBI
C. Ministry of Finance
D. NSE
✅ Answer: B
Q425.
Foreign Portfolio Investors invest mainly in:
A. Direct business
B. Physical assets
C. Capital markets
D. Infrastructure projects
✅ Answer: C
Q426.
Which instrument is issued by RBI to manage liquidity?
A. Treasury Bills
B. Certificate of Deposit
C. Commercial Paper
D. Equity shares
✅ Answer: A
Q427.
Treasury Bills are issued for which maturities?
A. 91, 182, 364 days
B. 30, 60, 90 days
C. 180, 270 days
D. 1 year only
✅ Answer: A
Q428.
Treasury Bills are issued at:
A. Par value
B. Premium
C. Discount
D. Face value plus interest
✅ Answer: C
Q429.
Who issues Treasury Bills in India?
A. Government of India
B. RBI on behalf of GOI
C. Public sector banks
D. SEBI
✅ Answer: B
Q430.
Call money market deals with funds for a period of:
A. 1 day
B. 2–14 days
C. 15–90 days
D. Above 1 year
✅ Answer: A
Q431.
Which is a money market instrument?
A. Equity shares
B. Debentures
C. Treasury Bills
D. Mutual fund units
✅ Answer: C
Q432.
Commercial Paper is issued by:
A. RBI
B. Banks only
C. Corporates and FIs
D. Government
✅ Answer: C
Q433.
Certificate of Deposit is issued by:
A. RBI
B. Banks and FIs
C. Corporates
D. Government
✅ Answer: B
Q434.
Which market deals in long-term funds?
A. Call money market
B. Money market
C. Capital market
D. Forex market
✅ Answer: C
Q435.
Primary market refers to:
A. Trading of existing securities
B. Issue of new securities
C. Forex trading
D. Inter-bank lending
✅ Answer: B
Q436.
Secondary market refers to:
A. Issue of new securities
B. Redemption of securities
C. Trading of existing securities
D. Conversion of securities
✅ Answer: C
Q437.
SEBI was established in:
A. 1988
B. 1992
C. 1995
D. 2000
✅ Answer: B
Q438.
SEBI’s main objective is to:
A. Promote banking
B. Protect investors
C. Issue currency
D. Control inflation
✅ Answer: B
Q439.
Which market indicator shows overall market movement?
A. Share price
B. Index
C. Volume
D. Market cap
✅ Answer: B
Q440.
BSE Sensex consists of:
A. 20 shares
B. 30 shares
C. 50 shares
D. 100 shares
✅ Answer: B
Q441.
NIFTY 50 represents:
A. Top 30 companies
B. Top 40 companies
C. Top 50 companies
D. Top 100 companies
✅ Answer: C
Q442.
Which order executes immediately at best available price?
A. Limit order
B. Stop loss order
C. Market order
D. Iceberg order
✅ Answer: C
Q443.
Bull market indicates:
A. Falling prices
B. Stable prices
C. Rising prices
D. No trading
✅ Answer: C
Q444.
Bear market indicates:
A. Rising prices
B. Falling prices
C. Stable prices
D. No trading
✅ Answer: B
Q445.
Which of the following is a derivative instrument?
A. Equity share
B. Bond
C. Futures
D. Treasury bill
✅ Answer: C
Q446.
Which derivative gives right but not obligation?
A. Futures
B. Forwards
C. Options
D. Swaps
✅ Answer: C
Q447.
Margin money is required in:
A. Cash market only
B. Derivatives market
C. Primary market
D. Debt market only
✅ Answer: B
Q448.
Which risk arises due to price fluctuation?
A. Credit risk
B. Market risk
C. Liquidity risk
D. Operational risk
✅ Answer: B
Q449.
Which risk is due to borrower’s failure to pay?
A. Market risk
B. Operational risk
C. Credit risk
D. Legal risk
✅ Answer: C
Q450.
Which risk arises from internal process failure?
A. Credit risk
B. Market risk
C. Liquidity risk
D. Operational risk
✅ Answer: D
Q451.
Basel norms relate to:
A. Accounting standards
B. Banking supervision
C. Insurance regulation
D. Corporate governance
✅ Answer: B
Q452.
Basel III norms focus mainly on:
A. Profitability
B. Capital adequacy and liquidity
C. Customer service
D. IT security
✅ Answer: B
Q453.
CRAR stands for:
A. Credit Risk Asset Ratio
B. Capital to Risk Assets Ratio
C. Cash Reserve Asset Ratio
D. Capital Risk Adjustment Ratio
✅ Answer: B
Q454.
Minimum CRAR prescribed by RBI for banks in India is:
A. 8%
B. 9%
C. 10%
D. 12%
✅ Answer: B
Q455.
Which ratio measures bank’s ability to meet short-term
obligations?
A. Capital adequacy ratio
B. Liquidity ratio
C. Profitability ratio
D. Leverage ratio
✅ Answer: B
Q456.
SLR is maintained in the form of:
A. Cash only
B. Gold only
C. Cash, gold, and approved securities
D. Shares and debentures
✅ Answer: C
Q457.
CRR is maintained with:
A. RBI
B. Government
C. Other banks
D. SEBI
✅ Answer: A
Q458.
Increase in CRR will result in:
A. Increase in bank lending
B. Decrease in bank lending
C. No impact
D. Increase in deposits
✅ Answer: B
Q459.
Repo rate is the rate at which:
A. Banks lend to RBI
B. RBI lends to banks
C. Banks lend to public
D. Government borrows
✅ Answer: B
Q460.
Reverse repo rate is the rate at which:
A. RBI lends to banks
B. Banks lend to RBI
C. Banks lend to customers
D. Government lends
✅ Answer: B
Q461.
Bank Rate is the rate at which RBI:
A. Borrows from banks
B. Lends to banks without collateral
C. Lends to Government
D. Borrows from Government
✅ Answer: B
Q462.
MSF (Marginal Standing Facility) rate is higher than:
A. Repo rate
B. Reverse repo rate
C. Bank rate
D. Call money rate
✅ Answer: A
Q463.
Which tool is NOT a quantitative credit control tool?
A. Bank rate
B. Repo rate
C. Cash reserve ratio
D. Moral suasion
✅ Answer: D
Q464.
Selective credit control is used to:
A. Control inflation
B. Control deflation
C. Regulate flow of credit to specific sectors
D. Increase bank profits
✅ Answer: C
Q465.
Open Market Operations (OMO) involve:
A. Issue of shares
B. Purchase and sale of government securities
C. Lending to banks
D. Forex transactions
✅ Answer: B
Q466.
OMO sale by RBI will result in:
A. Increase in liquidity
B. Decrease in liquidity
C. No change
D. Increase in inflation
✅ Answer: B
Q467.
Liquidity Adjustment Facility (LAF) includes:
A. Repo and reverse repo
B. CRR and SLR
C. Bank rate and MSF
D. OMO and MSS
✅ Answer: A
Q468.
Which monetary policy tool directly affects money supply?
A. Moral suasion
B. Repo rate
C. Cash Reserve Ratio
D. Credit rationing
✅ Answer: C
Q469.
Which policy aims to control inflation?
A. Expansionary policy
B. Contractionary policy
C. Neutral policy
D. Liberal policy
✅ Answer: B
Q470.
Increase in repo rate will generally:
A. Increase borrowing
B. Decrease borrowing
C. Increase money supply
D. Increase inflation
✅ Answer: B
Q471.
Which rate is used by RBI as signaling rate?
A. Reverse repo
B. Bank rate
C. Repo rate
D. MSF rate
✅ Answer: C
Q472.
MCLR stands for:
A. Minimum Credit Lending Rate
B. Marginal Cost of Lending Rate
C. Maximum Credit Lending Rate
D. Market Cost Lending Rate
✅ Answer: B
Q473.
MCLR is linked to:
A. Bank rate
B. Repo rate
C. Marginal cost of funds
D. Base rate
✅ Answer: C
Q474.
Which rate replaced Base Rate system?
A. Repo rate
B. PLR
C. MCLR
D. Bank rate
✅ Answer: C
Q475.
Which deposits are excluded while calculating CRR?
A. Time deposits
B. Demand deposits
C. Inter-bank deposits
D. Savings deposits
✅ Answer: C
Q476.
SLR is calculated on:
A. Net demand and time liabilities
B. Total assets
C. Capital funds
D. Net worth
✅ Answer: A
Q477.
Which institution manages Government debt in India?
A. SEBI
B. RBI
C. Ministry of Finance
D. NABARD
✅ Answer: B
Q478.
Ways and Means Advances are provided by RBI to:
A. Banks
B. State Governments
C. Central Government only
D. PSUs
✅ Answer: B
Q479.
Which committee recommended monetary policy committee (MPC)?
A. Narasimham Committee
B. Urjit Patel Committee
C. Rangarajan Committee
D. Shyamala Gopinath Committee
✅ Answer: B
Q480.
Monetary Policy Committee consists of:
A. 4 members
B. 5 members
C. 6 members
D. 7 members
✅ Answer: C
Q481.
Who chairs the Monetary Policy Committee?
A. Finance Minister
B. RBI Governor
C. Deputy Governor
D. SEBI Chairman
✅ Answer: B
Q482.
Monetary policy decisions are taken by MPC by:
A. Unanimous decision
B. Simple majority
C. Two-thirds majority
D. RBI Governor only
✅ Answer: B
Q483.
In case of tie in MPC voting, casting vote is exercised by:
A. Finance Minister
B. RBI Governor
C. Deputy Governor
D. Government nominee
✅ Answer: B
Q484.
Inflation targeting framework aims to control:
A. GDP
B. WPI
C. CPI
D. IIP
✅ Answer: C
Q485.
Target inflation rate under RBI’s inflation targeting is:
A. 2% ±1%
B. 4% ±2%
C. 5% ±1%
D. 6% ±2%
✅ Answer: B
Q486.
Which index is used for inflation targeting in India?
A. WPI
B. CPI (Combined)
C. GDP deflator
D. IIP
✅ Answer: B
Q487.
Statutory Liquidity Ratio is prescribed under:
A. RBI Act
B. Banking Regulation Act
C. FEMA
D. SEBI Act
✅ Answer: B
Q488.
CRR is prescribed under:
A. RBI Act
B. Banking Regulation Act
C. FEMA
D. Contract Act
✅ Answer: A
Q489.
Which facility allows banks to borrow overnight from RBI
against G-Secs?
A. LAF
B. MSF
C. Bank rate
D. Repo
✅ Answer: B
Q490.
Which rate forms upper bound of interest rate corridor?
A. Repo rate
B. Reverse repo rate
C. MSF rate
D. Bank rate
✅ Answer: C
Q491.
Which rate forms lower bound of interest rate corridor?
A. Repo rate
B. Reverse repo rate
C. Bank rate
D. MSF rate
✅ Answer: B
Q492.
Market Stabilisation Scheme (MSS) aims to:
A. Increase money supply
B. Absorb excess liquidity
C. Finance fiscal deficit
D. Support exports
✅ Answer: B
Q493.
Which securities are issued under MSS?
A. Corporate bonds
B. Treasury Bills and Dated securities
C. Commercial paper
D. Certificates of deposit
✅ Answer: B
Q494.
Interest on MSS securities is borne by:
A. RBI
B. Banks
C. Government of India
D. SEBI
✅ Answer: C
Q495.
Which indicator measures overall liquidity in banking
system?
A. CRR
B. SLR
C. Call money rate
D. Repo rate
✅ Answer: C
Q496.
Increase in reverse repo rate will:
A. Increase liquidity
B. Reduce liquidity
C. Increase inflation
D. Increase lending
✅ Answer: B
Q497.
Which is NOT a function of RBI?
A. Issuance of currency
B. Banker to Government
C. Custodian of foreign exchange
D. Accepting deposits from public
✅ Answer: D
Q498.
Which department of RBI issues currency?
A. Banking department
B. Issue department
C. Currency department
D. Regulation department
✅ Answer: B
Q499.
Minimum denomination of Indian currency note is:
A. ₹1
B. ₹2
C. ₹5
D. ₹10
✅ Answer: A
Q500.
Currency notes are issued under:
A. RBI Act, 1934
B. Banking Regulation Act
C. FEMA
D. Coinage Act
✅ Answer: A
Q501.
Coins in India are issued under:
A. RBI Act
B. Banking Regulation Act
C. Coinage Act
D. FEMA
✅ Answer: C
Q502.
Which body decides design of currency notes?
A. RBI
B. Ministry of Finance
C. Government of India in consultation with RBI
D. SEBI
✅ Answer: C
Q503.
Which note bears signature of RBI Governor?
A. All currency notes
B. ₹1 note only
C. All except ₹1 note
D. ₹2 note only
✅ Answer: C
Q504.
₹1 note bears signature of:
A. RBI Governor
B. Finance Secretary
C. Finance Minister
D. Deputy Governor
✅ Answer: B
Q505.
Which metal is used for minting Indian coins?
A. Gold
B. Silver
C. Nickel, copper alloys
D. Aluminium only
✅ Answer: C
Q506.
Which institution manages public debt in India?
A. RBI
B. SEBI
C. Ministry of Finance
D. NABARD
✅ Answer: A
Q507.
Which is banker’s bank in India?
A. SBI
B. NABARD
C. RBI
D. SEBI
✅ Answer: C
Q508.
Which is custodian of cash reserves of commercial banks?
A. SBI
B. RBI
C. SEBI
D. NABARD
✅ Answer: B
Q509.
Which act governs banking companies in India?
A. RBI Act
B. Banking Regulation Act
C. Companies Act
D. Contract Act
✅ Answer: B
Q510.
Banking Regulation Act came into force in:
A. 1947
B. 1948
C. 1949
D. 1950
✅ Answer: C
Q511.
Which section of Banking Regulation Act empowers RBI to
inspect banks?
A. Section 35
B. Section 21
C. Section 22
D. Section 10
✅ Answer: A
Q512.
Which section of BR Act deals with licensing of banks?
A. Section 22
B. Section 35
C. Section 21
D. Section 10
✅ Answer: A
Q513.
Which section empowers RBI to control advances?
A. Section 21
B. Section 22
C. Section 35
D. Section 10
✅ Answer: A
Q514.
Which section empowers RBI to supersede Board of Directors?
A. Section 10
B. Section 21
C. Section 36ACA
D. Section 35
✅ Answer: C
Q515.
Which section deals with cash reserve requirements?
A. Section 24
B. Section 18
C. Section 42 RBI Act
D. Section 35
✅ Answer: C
Q516.
Which section deals with statutory liquidity ratio?
A. Section 24
B. Section 18
C. Section 42
D. Section 35
✅ Answer: A
Q517.
Which section deals with nomination in bank accounts?
A. Section 45ZA
B. Section 24
C. Section 36
D. Section 21
✅ Answer: A
Q518.
Which section deals with return of paid cheques?
A. Section 45Z
B. Section 31
C. Section 35
D. Section 24
✅ Answer: A
Q519.
Which authority regulates cooperative banks?
A. NABARD
B. RBI
C. State Government
D. RBI & NABARD
✅ Answer: D
Q520.
Which committee recommended banking reforms in India (1991)?
A. Narasimham Committee
B. Urjit Patel Committee
C. Rangarajan Committee
D. Kelkar Committee
✅ Answer: A
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