Money & Banking-2

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36. ‘Gold Bullion Standard’ refers to–
(A) Gold coin as an unlimited legal tender
(B) Gold as the measure of value
(C) Free coinage of gold
(D) No restriction on import and export of gold
Ans. (B)

37. Reserve Bank of India was nationalised in–
(A) 1948
(B) 1947
(C) 1949
D) 1950
Ans. (C)

38. The reserve held by commercial banks over and above the statutory minimum, with the RBI are called–
(A) Cash Reserves
(B) Deposit Reserves
(C) Excess Reserves
(D) Momentary Reserves
Ans. (C)

39. Who is authorised to issue coins in India?
(A) Reserve Bank of India
(B) Ministry of Finance
(C) State Bank of India
(D) Indian Overseas Bank
Ans. (B)
40. Which one of the following is not a function of the Central Bank in an economy?
(A) Dealing with foreign exchange
(B) Controlling Monetary Policy
(C) Controlling government spending
(D) Acting as a banker’s bank
Ans. (C)

41. The existence of a parallel economy or black money–
(A) Makes the economy more competitive
(B) Makes the monetary policies less effective
(C) Ensures a better distribution of income and wealth
(D) Ensures increasing productive investment
Ans. (B)

42. Consequent upon the recommendations of the working group on rural banks, 5 Rural Regional Banks were initially set-up in the year–
(A) 1973
(B) 1974
(C) 1975
(D) 1976
Ans. (C)

43. The bank cheques are processed by using of–
Ans. (B)

44. The RBI issues currency notes under the–
(A) Fixed Fiduciary System
(B) Maximum Fiduciary System
(C) Fixed Minimum Reserve System
(D) Proportional Reserve System
Ans. (C)

45. The Narasimham Committee (1991) on financial reforms proposed for establishment of a–
(A) Four Tier hierarchy of the banking structure
(B) Three Tier hierarchy of the banking structure
(C) Two Tier hierarchy of the banking structure
(D) Unified control by the apex institutions
Ans. (A)

46. Which of the following Indian banks became the first to touch a market capitalisation of ‘100000 crore’ in India?
Ans. (C)

47. The permission given to a bank customer to draw cheques in excess of his current account balance is called–
(A) A personal loan
(B) An ordinary loan
(C) Discounting a bill of exchange
(D) An overdraft
Ans. (D)

48. Foreign currency which has a tendency of quick migration is called–
(A) Scarce Currency
(B) Soft Currency
(C) Gold Currency
(D) Hot Currency
Ans. (D)

49. What does ECS in banking transactions stand for?
(A) Excess Credit Supervisor
(B) Extra Cash Status
(C) Exchange Clearing Standard
(D) Electronic Clearing Service
Ans. (D)

50. The ‘Interest Rate Policy’ is a component of–
(A) Fiscal Policy
(B) Monetary Policy
(C) Trade Policy
(D) Direct control
Ans. (B)

51. Bank deposits that can be withdrawn without notice are called–
(A) Account Payee Deposits
(B) Fixed Deposits
(C) Variable Deposits
(D) Demand Deposits
Ans. (D)

52. Regional Rural Banks are sponsored by–
(A) Nationalised Commercial Bank
(B) Reserve Bank of India
(C) State Bank of India
(D) Government of India
Ans. (A)

53. The Imper ia l Bank of India , after its nationalisation came to be known as–
(A) Reserve Bank of India
(B) State Bank of India
(C) United Bank of India
(D) Indian Overseas Bank
Ans. (B)

54. Interest paid by the government on the loans raised is called–
(A) Debt Servicing
(B) Deficit Financing
(C) Discounted Budgeting
(D) Bridge Loan
Ans. (A)

55. If the Central Bank wants to encourage an increase in the supply of money and decrease in the cost of borrowing money, it should–
(A) Lower Cash Reserve Ratio
(B) Raise Discount Rates
(C) Sell Government Securities
(D) All of the above
Ans. (A)

56. What is the name of the e lectron ic communication network of the Reserve Bank of India ?
Ans. (C)

57. Which of the following is Apex bank for industrial loans?
Ans. (D)

58. ‘Dear Money’ means–
(A) Low rate of interest
(B) High rate of interest
(C) Depression
(D) Inflation
Ans. (B)

59. ‘Legal Tender Money’ refers to–
(A) Cheques
(B) Drafts
(C) Bill of Exchange
(D) Currency Notes

60. Under the minimum Reserve System, the Reserve Bank of India as the sole authority of note issue is required to maintain assets worth not less than–
(A) ‘115 crores
(B) ‘85 crores
(C) ‘200 crores
(D) ‘210 crores
Ans. (C)

61. The ratio of a bank’s cash holdings to its total deposit liabilities is called the–
(A) Variable Reserve Ratio
(B) Cash Reserve Ratio
(C) Statutory Liquidity Ratio
(D) Minimum Reserve Ratio
Ans. (B)

62. The best way, a bank can avoid loss is to–
(A) Lend only to individuals known to the bank
(B) Accept sound collateral
(C) Give only short-term loans
(D) Lend only to bank’s old customers
Ans. (B)

63. Which of the following Mahatma Gandhi series of currency notes Issued by the RBI has a drawing of the ‘Parliament House’ depicted on it–
(A) ‘500
(B) ‘100
(C) ‘50
(D) ‘0
Ans. (C)

64. Which of the following Mahatma Gandhi series of currency notes issued by the RBI has ‘Ecology’ depicted on it?
(A) ‘500
(B) ‘100
(C) ‘50
(D) ‘5
Ans. (B)

65. The Government of India made it obligatory on the part of all commercial banks that they should give some cash amount while purchasing government bonds. What would you call this?
(A) Statutory Liquidity Ratio
(B) Cash Reserve Ratio
(C) Minimum Reserve Ratio
(D) Floating Reserve Ratio
Ans. (A)

66. The main source of long-term credit for a business unit is–
(A) Sale of stocks and bonds to the public
(B) Borrowing from banks
(C) Loans from the government
(D) Deposits from the public and financial institutions
Ans. (A)

67. A Scheduled Bank is one which is included in the–
(A) II Schedule of Banking Regulation Act
(B) II Schedule of Constitution
(C) II Schedule of Reserve Bank of India Act
(D) None of the above
Ans. (C)

68. Merchant Banking is an Institution which provides finances–
(A) Domestic whole sale trade
(B) International trade among countries
(C) Domestic retail trade among
(D) International aid agencies
Ans. (B)

69. What is ‘Narrow Money’?
(A) The sum of currency in circulation and the demand deposits in banks
(B) The sum of Ml money and the time deposits
(C) The sum of currency in circulation with the public and the cash reserves held by banks
(D) The market value of the stocks held by all the holders excluding the promoters
Ans. (A)

70. Ways and means advances refers to–
(A) Industries getting temporary loans from commercial banks
(B) Farmers getting loans from NABARD
(C) Government getting temporary loans from RBI
(D) Government getting loans from international financial institutions
Ans. (C)

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