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Sreedhar’s CCE BANKING AWARENESS
INDIAN BANKING SYSTEM PART - 3
 Small Finance Bank

* A Small Finance Bank will operate in a similar fashion to a normal bank
* Small Finance Banks is another step to bring the unbanked under the ambit of
the banking system.
* The minimum paid-up equity capital required for setting up of Small Finance
Bank is Rs. 200 Crore.
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 Who are eligible to apply Small Finance Bank license?
* Micro Finance Institution
* Local Area Bank
* Non-Banking Finance Companies
* Urban Cooperative Bank
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RBI grants Small Finance Banks licenses to 10 entities. 8 out of the 10 granted
approval by RBI are Micro Finance Institutions.
* Capital Small Finance Bank is the first SFB established in India.
 Small Finance Banks
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* Total No. of Small Finance Banks operating at present stands at 10.
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Name of Small Finance Bank – Headquarters
*Ujjivan Small Finance Bank – Bengaluru, Karnataka
* Equitas Small Finance Bank – Chennai, Tamil Nadu
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* Capital Small Finance Bank – Jalandhar, Punjab

* ESAF Small Finance Bank – Thrissur, Kerala
* Suryoday Small Finance Bank – Mumbai, Maharashtra
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* Jana Small Finance Bank – Bengaluru, Karnataka
* Au Small Finance Bank – Jaipur, Rajasthan
* Fincare Small Finance Bank – Bengaluru, Karnataka
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* North East Small Finance Bank – Guwahati, Assam

* Utkarsh Small Finance Bank – Varanasi, Uttar Pradesh
 Important Guidelines for Small Finance Banks
* SFBs are allowed to accept all types of Deposits like Commercial Banks (CASA,
FD, RD etc.)
* These banks has to set up at least 25% Branches in Rural Area.
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75% of Adjusted Net Bank Credit should allocate to Priority Sector, 50% of the
loans be given to MSME Sector.
* Maximum loan size to a single person cannot exceed 10% of total capital funds;
cannot exceed 15% in the case of a group.
* Small Finance Banks will be required to maintain a minimum Capital Ad-
equacy Ratio of 15% of the loans on a continuous basis.
* Capital Adequacy Ratio is the ratio of Bank’s Capital in relation to its Risk
Weighted Assets.
* A bank with a higher Capital Adequacy Ratio is considered safer because if its
loans go bad, it can make up for it from its net worth.
* Small Finance Banks can undertake Financial Services like distribution of
Mutual Fund units, Insurance products, Pension products, and so on.
* The promoter’s minimum initial contribution to the paid-up equity capital of
such Small Finance Bank shall at least be 40%.
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* Listing will be mandatory within three years after the bank reaches net worth
of Rs. 500 crore.
* Foreign Direct Investment in these SFB’s has been capped at 74%.
* Payments Bank may convert to a Small Finance Bank entity after completing 5
Years of business.
* A Small Finance Bank can transform into a full-fledged bank, but only after
RBI’s approval.
 Lead Bank Scheme
* The Lead Bank Scheme was introduced in 1969.
* The aim of LBS is providing effective banking services in rural areas through an
Service Area Approach, with one bank assigned for one area.
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* Lead Bank Scheme is designed to have more concentrated efforts of a bank in a
particular District.
 Major Mergers in Indian Banking Industry
Year – Target Bank – Acquirer Bank
* 1993 - New Bank of India - Punjab National Bank
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* 2000 - Times Bank - HDFC Bank
* 2004 - Global Trust Bank - Oriental Bank of Commerce
* 2006 - Sangli Bank - ICICI Bank
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* 2006 - United Western Bank - IDBI Bank
* 2008 - State Bank of Saurashtra - State Bank of India
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* 2008 - Centurion Bank of Punjab - HDFC Bank
* 2010 - State Bank of Indore - State Bank of India
* 2010 - Bank of Rajasthan - ICICI Bank
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* 2014 - ING Vysya Bank - Kotak Mahindra Bank

* 2017 – State Bank of Hyderabad, State Bank of Mysore, State Bank of Travancore,
State Bank of Bikaner & Jaipur, State Bank of Patiala & Bharatiya Mahila Bank
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- State Bank of India
* 2019 – Dena Bank & Vijaya Bank – Bank of Baroda
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* 2020 - Andhra Bank & Corporation Bank – Union Bank of India

* 2020 - Allahabad Bank – Indian Bank
* 2020 - Syndicate Bank – Canara Bank
* 2020 - Oriental Bank of Commerce & United Bank of India – Punjab National
Bank
 D-SIB
* The D-SIB is a term used to describe banks whose business failures may widely
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impact the economy.
These too big to failbanks are usually those that have broad business networks
and operate numerous subsidiaries in various financial sectors.
List of D-SIBs in India
* State Bank of India
* ICICI Bank
* HDFC Bank
 Some Important Facts About Indian Banking System
* First Bank Established in India -Hindustan Bank (1770)
* Oldest Bank in India working even today –Punjab National Bank (1894)
* First Bank in India –Purely managed by Indians -Punjab National Bank (1894)
* India’s first Limited Liability Bank - Oudh Commercial Bank (1881)
* Union Bank of India was inaugurated by Mahatma Gandhi in 1919.
* First Banking entity, which established Mutual Fund Company in India -SBI
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Mutual Fund
* First Universal Banking entity in India - ICICI Bank
* HSBC Bank introduced Automated Teller Machine concept in India in 1987.
* First India originated Bank to open its overseas branch -Bank of India at Lon-
don in 1946.
* First Bank introduced Credit Card concept in India -Central Bank of India in
1980
* First Bank started Mobile ATM service in India -ICICI Bank in 2002
* India’s first Talking ATM was launched by Union Bank of India.
OBJECTIVE QUESTIONS
1. Ujjivan Small Finance Bank is a bank licensed under Sec 22 of the Banking
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Regulation Act 1949 to carry out small finance bank business in India. Its
headquarters located in _________
1) Chennai 2) Mumbai 3) Ahmedabad 4) Bengaluru 5) Jaipur
2. RBI has proposed to float a new type of differentiated banks called WLTF Banks?
What does letter L denotes in an acronym WLTF Bank?
1) Loan
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2) Long 3) Local 4) Liquidity 5) Liability
3. Goldman Sachs Group is a leading global investment banking, securities &
investment management firm. It was originated in which country?
4) Germany
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1) United States of America 2) United Kingdom
5) France
3) Switzerland
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4. Jio Payments Bank Limited is a joint venture between the Reliance Industries
Limited and __________ with the stake of 70:30.
1) ICICI Bank 2) State Bank of India 3) AXIS Bank
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4) YES Bank 5) HDFC Bank

5. First Micro Finance Institution converted in to new private sector bank in India
is BandhanBank. It was founded by __________
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1) HasmukhbhaiParekh 2) S P Hinduja 3) Chandra SekharGhosh
4) Vijay SekharSharma 5) Sunil Mittal
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6. As per Regional Rural Banks (Amendment) Act 2015, RRBs were permitted to
raise capital from sources other than Central Government, State Government &
Sponsor Bank. In such instance, the combined shareholding of Central
Government & the Sponsor Bank should not be lower than what per cent?
1) 55% 2) 49% 3) 74% 4) 51% 5) 40%
7. Lead Bank Scheme is designed to __________
1) Providing credit to weaker section
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2) Have more concentrated effort of a bank in a particular district
3) Issue loans to agriculture & allied activities
4) Dispense high value loans through consortium mechanism
5) Extend credit services to Unemployed youth in remote location across India
8. Identify an incorrect match in the context of Bank and its origination country?
1) Wells Fargo –US 2) Standard Chartered Bank –UK
3) DBS –Singapore 4) Mizuho Bank –China 5) J P Morgan Chase –US
9. Which among the following bank NOT nationalized in 1980?
1) Corporation Bank 2) Oriental Bank of Commerce 3) Andhra Bank
4) Indian Bank 5) Punjab & Sind Bank
10. United Western Bank was founded in 1936. It was acquired by which bank in
2006 in a rescue?
1) IDBI Bank 2) Bank of Baroda 3) Canara Bank
4) Bank of India 5) Union Bank of India
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11. Capital Small Finance Bank is the first Small Finance Bank established in India.
It’s headquarters located in _________
1) Chennai (Tamil Nadu) 2) Jaipur (Rajasthan) 3) Varanasi (Uttar Pradesh)
4) Ahmedabad (Gujarat) 5) Jalandhar (Punjab)
12. Regional Rural Banks established under the recommendations of Narasimham
Committee. When was the first RRB set up in India?
1) 1969 2) 1955 3) 1982 4) 1975 5) 1980
13. As per guidelines for licensing of Universal Banks in Private Sector, The initial
minimum paid up capital for a bank shall be Rs. 500 crore. The promoter shall
hold a minimum of 40 % of the paid-up equity capital of the bank which shall be
locked-in for a period of ______ years from the date of commencement of business
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of the bank.
1) 3 Years 2) 10 Years 3) 6 Years 4) 5 Years 5) 8 Years
14. How many banks were nationalized in 1st phase [1969] & 2nd phase [1980]
respectively?
1) 12 & 8 2) 15 & 5 3) 11 & 9 4) 14 & 6 5) 13 & 7
15.
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The establishment of Payments Bank is being allowed in India to promote financial
inclusion. Which of the following statements is/are correct in this context?
1.Payments Banks can issue credit card
2.These banks cannot give loans
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3.Payments Bank can become Business Correspondent of another bank.
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4.These type of banks are not allowed to accept more than 1 lakh in a particular
account.
1) 1, 3 & 4 only 2) 1, 2 & 3 only 3) 2, 3 & 4 only 4) 1 & 2 only 5 )
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1, 2 & 4 only
16. In India, Total of 10 Small Finance Banks operating at present. Equitas Small
Finance Bank headquartered in which of the following city?
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1) Bengaluru 2) Mumbai 3) Jaipur 4) Chennai 5) Ahmedabad
17. As per guidelines issued by RBI for Payments Banks, Maximum balance per
customer is restricted up to Rs. ____ lakh.
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1) Rs. 25,000 2) Rs. 50,000 3) Rs. 10,000 4) Rs. 1,00,000 5) Rs. 2,00,000
18. In 2010, Bank of Rajasthan merged with _______
1) ICICI Bank 2) HDFC Bank 3) Axis Bank 4) IndusInd Bank 5) Yes Bank
19. Which of the following banks has taken over the Centurion Bank of Punjab?
1) ICICI Bank 2) IDBI Bank 3) HDFC Bank 4) AXIS Bank 5) Yes Bank
20. Which was the first Foreign Bank started its operation in India?
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1) Standard & Chartered Bank 2) Citi Bank 3) Barclays Bank
4) BNP Paribas Bank 5) Hong Kong & Shanghai Banking Corporation
21. Which among the following banks was inaugurated by Mahatma Gandhi in the
year 1919?
1) Bank of India 2) Union Bank of India 3) Central Bank of India
4) Canara Bank 5) Bank of Baroda
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11.5 12.4 13.4 14.4 15.3 16.4 17.4 18.1 19.3 20.5
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 Private Sector Bank
* Banks having greater part of equity held by the private shareholders are called
as Private Sector Banks.
There are two categories in Private Sector Banks
 Old Pvt. Sector Banks (12)
* City Union Bank – Kumbakonam, Tamil Nadu
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* Lakshmi Vilas Bank – Chennai, Tamil Nadu
* KarurVysya Bank – Karur, Tamil Nadu
* Tamil Nadu Mercantile Bank – Tuticorin, Tamil Nadu
* Catholic Syrian Bank – Trissur, Kerala
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* South Indian Bank – Trissur, Kerala
* Dhanlakshmi Bank – Trissur, Kerala
* Federal Bank – Kochi, Kerala
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* Karnataka Bank – Mangalore, Karnataka
* Jammu & Kashmir Bank – Srinagar, Jammu & Kashmir
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* Nainital Bank – Nainital, Uttarakhand
* RBL Bank Ltd – Kolhapur, Maharashtra
 New Pvt. Sector Banks (10)
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* Axis Bank (UTI Bank) – Mumbai, Maharashtra

* ICICI Bank – Mumbai, Maharashtra
* HDFC Bank – Mumbai, Maharashtra
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* Kotak Mahindra Bank – Mumbai, Maharashtra
* IndusInd Bank – Mumbai, Maharashtra
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* Yes Bank – Mumbai, Maharashtra

* DCB Bank – Mumbai, Maharashtra
* Bandhan Bank – Kolkata, West Bengal
* IDFC First Bank – Mumbai, Maharashtra
* IDBI Bank – Mumbai, Maharashtra
* In 1993, RBI started issuing new Private Sector Bank licenses.
* HDFC Bank is the largest Private Sector Bank in India
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* As per guidelines for licensing of Universal Banks in Private Sector, The initial
minimum paid up capital for a bank shall be Rs. 500 crore.
* The promoter shall hold a min. of 40% of the paid-up equity capital of the bank
which shall be locked-in for a period of 5 years from the date of commencement
of business of the bank.
* As per latest policy guidelines Foreign Direct Investment, In Private Sector
Bank FDI allowed up to a maximum of 74% of the paid up capital of the bank.
* First Micro Finance Institution converted into private sector bank in India is
Bandhan Bank.
 Foreign Bank
* A Foreign Bank is one, whose head office is located in another country.
* These Banks are mainly concerned with financing foreign trade.
* Foreign Banks are allowed to operate in India through Branches and Represen-
tative Offices.
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* The initial minimum paid up capital for setting up the Wholly Owned Subsid-
iary by a Foreign Bank is Rs. 500 Crore.
* SBM Bank (Mauritius) is the first foreign bank in India obtained licence from
RBI to operate as Wholly Owned Subsidiary –WoS.
* Hong Kong & Shanghai Banking Corporation is the first foreign bank started
operations in India.
* Standard Chartered Bank is the largest foreign bank in India with maximum
number of branch offices.
 Major Foreign Banks operating in India
 Name of Foreign Bank – Country
* Citi Bank – USA
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* Wells Fargo – USA
* J P Morgan Chase & Co – USA
* Goldman Sachs – USA
* Morgan Stanley – USA
* Barclays Bank Plc. – UK
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* Standard Chartered Bank – UK
* HSBC Holdings Plc. – UK
* RBS – UK
* UBS AG – Switzerland
* Credit Suisse AG – Switzerland
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* Mizuho Bank – Japan
* Sumitomo Mitsui Banking Corporation – Japan
* DBS Bank – Singapore
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* United Overseas Bank – Singapore

* Deutsche Bank – Germany
* BNP Paribas – France
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* SocieteGenerale – France
* ICBC – China
* Sonali Bank – Bangladesh
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* Commonwealth Bank – Australia

* Westpac Banking Corporation – Australia
* ABN AMRO Bank – Netherlands
* Rabo Bank – Netherlands
* Sberbank – Russia
* Shinhan Bank - South Korea
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* Woori Bank - South Korea
 Regional Rural Bank
* Narasimham Committee on Rural Credit recommended the establishment of
Regional Rural Bank’s to meet the needs of rural areas.
* The objective of the RRB’s is to develop the rural economy by providing credit
facility.
 Equity of RRB
Central Government – 50%
Concerned State Government – 15%
Sponsor Bank – 35%
 Prathama Bank
First Regional Rural Bank of India
Established on 2nd October 1975
Sponsor Bank - Syndicate Bank
Headquarters - Moradabad, Uttar Pradesh
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 Financial Resources of a RRB

* Share Capital of a RRB
* Deposits accepted from the public
* Borrowing facilities from Sponsor Bank
* Refinance facility from NABARD
* According to Regional Rural Banks (Amendment) Bill 2015, Rs. 2,000 crore is
the Authorized Capital of a RRB.
* Authorized Capital is the maximum amount of the capital for which shares can
be issued by the company to shareholders.
* As per RRBs (Amendment) Act 2015, RRBs were permitted to raise capital from
sources other than Central Government, State Government & Sponsor Bank.
In such instance, the combined shareholding of Central Government & the Spon-
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sor Bank should not be lower than 51%.
* The area of operations of the RRB is limited to a specified region relating to one
or more districts in the concerned state.
* RRBs concept does not exist in Sikkim and Goa states.
* The Chairman of a Regional Rural Bank is to be appointed by Sponsor Bank
inconsultation with NABARD.
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* Function of these Banking entities monitored & supervised by NABARD.
* These banks are managed by Board of Directors.
* RRB’s are refinanced at 2% below Bank Rate from National Bank for Agricul-
ture & Rural Development
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* As per RBI Guidelines, 75% of Adjusted Net Bank Credit at least should be
allocated to Priority Sectors by Regional Rural Banks
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* At present total no. of RRBs operating stands at 45.
Cooperative Bank
 Primary Agriculture Credit Society
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* These institutions are formed at village level or town level.

* The operations of such banks are limited to a very small area.
 District Central Cooperative Bank
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* These banks operate at the district level.
* They act as a link between Primary Credit Societies and State Cooperative
Banks.
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 State Cooperative Bank

* These banks are biggest forms of cooperative banks.
* They operate at the state level.
* The size of assets/ liabilities of Cooperative Banks are much smaller in com-
parison to Commercial Banks.
* Co-operative Banks operate on no profit no loss principle.
 Local Area Bank
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* LAB concept was introduced in 1996 with an aim of to encourage setting up of
new private local banks.
* Area of operation of these banks restricted to three contiguous districts.
* The minimum capital required to set up a LAB when the guidelines were intro-
duced was Rs. 5 Crore.
Local Area Banks operating in India at present
* Coastal Local Area Bank
* Krishna BhimaSamruddhi Local Area Bank
* Subhadra Local Area Bank
 Payments Bank
* Differentiated Banks are banking institutions licensed by the RBI to provide
specific banking services and products.
* Payments Banks will focus on Payments & Remittances only.
* The minimum paid-up equity capital required for setting up of Payments Bank is
Rs. 100 Crore.
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 Who are eligible to apply Payments Bank license?

* Telecom Companies
* Supermarket Chains
* Non-Banking Finance Companies
* Prepaid Payment Instrument Issuers - PPIs
In 2015, the RBI gave in-principle licenses to 11 entities to launch Payments
Banks.
* Airtel Payments Bank is the first Payments Bank established in India.
* Total No. of Payments Banks operating at present stands at 6.
 Payments Banks
 Name of Payments Bank - Headquarters
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* Airtel Payments Bank - New Delhi
* India Post Payments Bank - New Delhi
* Paytm Payments Bank – Noida, Uttar Pradesh
* Jio Payments Bank – Mumbai, Maharashtra
* Fino Payments Bank – Mumbai, Maharashtra
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* NSDL Payments Bank – Mumbai, Maharashtra
 Important Guidelines for Payments Banks
* Payments Bank allowed to accept Demand Deposits like Savings Bank Account
& Current Account Deposits.
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They cannot accept Time Deposits like Fixed Deposits & Recurring Deposits.
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* Maximum balance per customer’s account should not exceed Rs. 1 lakh at any
point of time.
* These banks can issue Debit Card but not Credit Card.
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* Payments Bank is not allowed to accept deposits from NRI customers.

* These bank is not permitted to offer any kind of loan product.
* Liabilities should not exceed 33 times of its net worth
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* This type of banking entity allowed to invest depositor’s money in Government
Securities only.
* Payments Bank can distribute Financial Products such as Insurance, Mutual
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Fund & Pension Fund products etc.

* Promoter of the Payments Bank should hold at least 40% of its paid-up equity
capital for the first 5 years from the commencement of its business.
* The Paid-up Capital refers to the amount that has been received by the com-
pany through the issue of shares to the shareholders.
* This type of banking entity can act as Business Correspondent of commercial
bank.
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 Do’s
* Accept Demand Deposits
* Hold only up to Rs. 1 lakh per particular customer’s account
* Issue Debit Card
* Distribute Mutual Funds, Insurance, and Pension Funds etc.
* Set up Branches, ATMs, Business Correspondents
* Become Business Correspondent of another bank
 Dont’s
* Lend Money
* Take NRI Deposits
* Issue Credit Cards
* Set up a NBFC Subsidiary
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 Bank
A Bank is a financial institution that accepts deposits from the public and creates
credit.
Banking entity bring the savers and the borrowers together.

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Role of a Bank
* Bank encourages savings habit amongst people.
* It acts as intermediary between people having surplus money & those requiring
money.
* It helps in national development by providing credit support to various economic
activities.
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* It helps in raising the standards of living of people.
 Functions of a Bank


Primary Functions
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Accepting Deposits & Granting Loans / Advances
Secondary Functions
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Agency Functions & Utility Functions
* Apart from creating credit, banks are also allowed to invest some portion of
accepted deposits.
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* Banking Regulation Act, 1949 allows banking entities to invest accepted depos-
its in Liquid Assets. i.e. Gold or Government Securities.
 Accepting Deposits
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Demand Deposits
Time Deposits
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 Demand Deposits
Savings Bank Account
Current Account
 Savings Bank Account
Savings Bank Account is most suitable product for Individuals.
Savings Bank Account Holder will enjoy the benefit of principal security, reason-
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able interest, & high degree of liquidity.
 Current Account
Current Account is specially designed for business entities.
Banks created this product with an aim of performing business transactions
smoothly.
 Time Deposits
Fixed Deposit Account
Recurring Deposit Account
 Fixed Deposit Account
If a depositor wants to park his / her surplus money for a specific tenure with a
view to earn higher interest on deposited money, he / she can consider FD
product.
 Recurring Deposit Account
In RD Account, a certain amount of savings are required to be compulsorily de-
posited at specific time intervals for a particular time period.
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 Granting Loans
Secured Loan
Unsecured Loan
 Collateral
Collateral is an asset that a lender accepts as security for extending a loan.
 Secured Loan
e.g. Home Loan, Vehicle Loan & Gold Loan etc.
 Unsecured Loan
e.g. Personal Loan & Credit Card etc.
 Agency Functions
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Fund Transfers, Bill Payments & Collection of Cheques etc.
 Utility Functions
Locker Facility & Foreign Exchange transactions etc.
 Evolution of Banking in India
Banking in India originated in the last decades of the 18thcentury.
 Bank of Hindustan was the first bank established in India.
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It was founded in 1770 in Calcutta by Alexander & Co. and bankrupted in the year
1832.
 General Bank of India was established in 1786 but failed in 1791.
Presidency Banks
Bank of Bengal -1806
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Bank of Bombay -1840
Bank of Madras -1843
These 3 Presidency Banks were amalgamated to form a single banking entity
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called Imperial Bank of India.

 Imperial Bank of India -1921
Imperial Bank of India came into existence on 27thJanuary, 1921.
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Later, Imperial Bank of India transformed into State Bank of India in 1955.
 Amalgamation
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An Amalgamation is a combination of two or more entities into a new entity.

Amalgamation A + B = C
e.g.SBB + SBJ = SBB&J
IDFC Bank + Capital First = IDFC First Bank
 Merger
A Merger refers to a mutually binding contract in which two or more entities join
together to form one entity.
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Merger A + B = A / B
SBH + SBI = SBI
Dena Bank + Vijaya Bank + Bank of Baroda =Bank of Baroda
 Allahabad Bank -1865
The oldest Joint Stock Bank of the Country.
Recently merged in Indian Bank.
 Oudh Commercial Bank -1881
The first Limited Liability Bank inIndia. It was failed in 1958.
 Limited Liability is a corporate structure whereby the members of the company
cannot be held personally liable for the company’s debts.
 Punjab National Bank -1894
It was first Bank purely managed by Indians.
Oldest bank in India still functioning today.
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 Banking
Banking Section 5(b) of the Banking Regulation Act 1949, defined the term
Banking.
 Definition of Banking Accepting, for the purpose of lending or investment, of
deposits of money from the public, repayable on demand or otherwise, and with-
drawal by cheque, draft, order of otherwise.
 Reserve Bank of India
* RBI is India’s a central banking institution, which controls the monetary policy
of the Indian Rupee.
* It was established under the recommendations of Hilton-Young Commission.
* It was established on 1st April, 1935 in accordance with the provisions of the
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RBI Act, 1934.
* Initially RBI was constructed as a Private Share Holders’ Bank with fully paid-
up capital of Rs. 5 cr.
* Head Office of RBI was initially established in Calcutta & permanently moved to
Mumbai in 1937.
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* RBI was nationalized on 1st January 1949.
* RBI’s logo consists of Tiger & Palm Tree.
* RBI also acted as Central Banking Institution for Burma (Now known as Myanmar)

up to 1947 &Pakistan up to 1948.
Banking Regulation Act, 1949
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The BR Act 1949, Provides the legal framework for regulation of the Banking
System in India.
It was enacted on 10th March, 1949.
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 Scheduled Commercial Bank

An Organization which is included in the 2ndschedule of Reserve Bank of India
Act, 1934 is known as Scheduled Commercial Bank.
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 Oldest Bank in the World still operating
 Bank Monte Dei Paschi Di Siena -Italy was founded in 1472.
Since then the bank has been operation without interruption to the present day.
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 Largest Bank in the World by total assets

 Industrial & Commercial Bank of China was founded in 1984.
It’s headquarters located in Beijing, China.
 Banking entities in India
Public Sector Banks Private Sector Banks
Foreign Banks Regional Rural Banks
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Co-operative Banks Local Area Banks
Payments Banks Small Finance Banks
 Public Sector Bank
Public Sector Bank is bank where a majority stake is held by a Government of
India.
Government of India’s Shareholding in the equity of PSB does not fall below 51%
at any point of time.
Total No. of Public Sector Banks in India at present stands at 13.
I. State Bank of India
II. Nationalized Banks
I. Other Public Sector Banks
 Private Sector Bank
* Focus on Urban Areas
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* Doing banking business to generate profits
* Higher charges / fees to avail various banking services
* Focus on urban areas as well as rural areas
* Doing banking business with an aim of welfare of society
* Affordable charges / fees to avail various banking services
 State Bank of India
* State Bank of India was established on 1st July 1955 & it is largest Bank in
India.
* It was set up under the recommendations of All India Rural Credit Survey
Committee also known as A.D. Gorewala Committee.
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* SBI was formerly known as Imperial Bank of India.
Its headquarters located in Mumbai, Maharashtra.
 SBI –Associates
* Total 8 Associates acquired originally in 1959.
State Bank of Bikaner & Jaipur came into existence in 1963 when two banks
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namely, State Bank of Bikaner & State Bank of Jaipur were amalgamated.
* In 2008, State Bank of Saurashtra got merged with State Bank of India.
* In 2010, State Bank of Indore got merged with State Bank of India.
Remaining 5 associate banks named
1. State Bank of Hyderabad
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2. State Bank of Mysore
3. State Bank of Travancore
4. State Bank of Patiala
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5. State Bank of Bikaner & Jaipur

Merged with State Bank of India with effective from 1st April 2017.
Along with 5 Associates of SBI, Bharatiya Mahila Bank also got merged with SBI.
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 SBI –Subsidiaries
* SBI Cards
* SBI Life Insurance
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* SBI General Insurance

* SBI Mutual Fund
 SBI Cards
Joint Venture between SBI & GE Capital -US
 SBI Life Insurance
Joint Venture between SBI & BNP Paribas Cardiff -France
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 SBI Mutual Fund
Joint Venture between SBI & Amundi Asset Management -France
Nationalized Bank
* Nationalizationis a process by which a government can take over a private entity
and convert it to a publically held entity.
* Nationalization of Banks in India was done in 2 phases.
* Total 20 private banks were nationalized in India under the Banking Compa-
nies (Acquisition & Transfer of Undertaking) Bill in a phased manner.
* 14 bank entities were nationalized in 1969 and another 6 were nationalized in
1980.
 Objective of Banks Nationalization
* To raise public confidence in banking system.
Expansion of banking activities in rural and semi urban areas.
* To reduce the monopoly of large industrial houses on the banking system.
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* To increase credit flow to the Priority Sectors i.e. Agriculture, MSME, Education
etc.
 1st Phase
* On 19th July 1969, the Banking Companies (Acquisition & Transfer of Under-
takings) ordinance resulted in the ownership of 14 banks being transferred to
the GoI.
* 14 major banks having NDTL of more than Rs. 50 crore were nationalized in 1st
Phase.
* Net Demand & Time Liabilities shows the difference between the sum of De-
mand and Time Liabilities of a bank and the deposits in the form of assets held by
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the other bank.
 Banks Nationalized inPhase –I
Bank Name & Headquarters
* Bank of Baroda – Vadodara, Gujarat
* Central Bank of India – Mumbai, Maharashtra
ha
* Bank of Maharashtra – Pune, Maharashtra
* Punjab National Bank – New Delhi
* UCO Bank – Kolkata, west Bengal
E
* Canara Bank – Bengaluru, Karnataka
* Indian Bank – Chennai, Tamil Nadu
d
* Bank of India – Mumbai, Maharashtra
* Dena Bank – Mumbai, Maharashtra (Merged with Bank of Baroda in 2019)
ee
* Union Bank of India – Mumbai, Maharashtra

* Allahabad Bank – Kolkata, West Bengal (Merged with Indian Bank in 2020)
* United Bank of India – Kolkata, West Bengal (Merged with Punjab National
C
Bank in 2020)
* Syndicate Bank – Manipal, Karnataka (Merged with Canara Bank in 2020)
Sr
* Indian Overseas Bank – Chennai, Tamil Nadu

2nd Phase
* On 15thApril 1980, 6 more banks having NDTL of more than Rs. 200 crore were
nationalized in 2nd Phase.
 Banks Nationalized in Phase –II
Bank Name & Headquarters
C
Andhra Bank – Hyderabad, Telangana (Merged with Union Bank of India in 2020)
Punjab& Sind Bank – New Delhi
Corporation Bank – Mangalore, Karnataka (Merged with Union Bank of India in
2020)
Oriental Bank of Commerce – New Delhi (Merged with Punjab National Bank in
2020)
Vijaya Bank – Bengaluru, Karnataka (Merged with Bank of Baroda in 2019)
New Bank of India – New Delhi (Merged with Punjab National Bank in 1993)
 Achievements after Nationalization of Banks
* Taken banking service to rural and remote areas.
* Awaken the rural people about the need and importance of banking service.
* Made credit available to neglected people at affordable interest rate.
5
* Helped to free the rural poor population from the clutches of moneylenders.
* Ensured adequate and timely credit for agricultural activities and farming op-
erations.
* Helped export sector to obtain cheap credit.
* Helped implementation of various welfare measures formulated by Government.
 Mergers in Nationalized Banks
1993: Punjab National Bank & New Bank of India
2019: Bank of Baroda, Dena Bank & Vijaya Bank
2020: Union Bank of India, Andhra Bank & Corporation Bank
2020: Punjab National Bank, Oriental Bank of Commerce & United Bank of India
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2020: Indian Bank & Allahabad Bank,
2020: Canara Bank & Syndicate Bank
 Existing Nationalized Banks
* Punjab National Bank
* Canara Bank
* Union Bank of India
ha
* Bank of Maharashtra
* Indian Bank
* UCO Bank
* Bank of Baroda
E
d
* Bank of India
* Central Bank of India
ee
* Punjab &Sind Bank

* Indian Overseas Bank
 Other Public Sector Bank
C
India Post Payments Bank wholly owned by Government of India, started opera-
tions in 2018.
Sr
It’s Headquarters located in New Delhi.

20% is the maximum ceiling on Foreign Direct Investment in the equity of Public
Sector Bank.
A Foreign Direct Investment is an investment made by a firm or individual in
one country into business interests located in another country.
C
***
6
1. Credit Suisse Bank is one among the major foreign banks in the world. It origi-
nated in which country?
1) Germany 2) Switzerland 3) Netherlands 4) France 5) United Kingdom
2. Which of the following operation cannot be performed by Payments Bank?
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1) Can distribute Insurance, Mutual Fund, Pension Fund products etc.
2) Can Issue Debit Card
3) Can become Business Correspondent of another Banks
4) Can accept Demand Deposits 5) Can provide Loan Products
3. Foreign Direct Investment in Small Finance Bank has been capped at what per
cent?
1) 51% 2) 26%
ha 3) 20% 4) 74% 5) 100%
4. What is the minimum capital requirement to set up a Wholesale & Long Term
Finance Bank?
5.
E
1) Rs. 100 crore
4) Rs. 500 crore
2) Rs. 200 crore 3) Rs. 300 crore
5) Rs. 1000 crore
MFIs are equipped to reach the unbankable masses and make financial services
d
accessible to them. In the acronym MFI, letter M stands for _________
1) Marginal 2) Market 3) Micro 4) Mutual 5) Money
6. The chairman of a Regional Rural Bank is to be appointed by ____________
ee
1) Central Government 2) State Government

3) Sponsor bank in consultation with NABARD
4) RBI 5) NABARD in consultation with RBI
C
7. As per RBI Guidelines what % of its ANBC at least should be allocated to Priority
Sectors by Regional Rural Banks?
Sr
1) 40 % 2) 55 % 3) 65 % 4) 60 % 5) 75 %
8. Customer Day is observed on _______ of every month in banking industry.
1) First working day 2) 10th 3) 15th
4) 20th 5) Last working day
9. Which among the following is correct in the context of Payments Banks?
1) Payments Banks can accept Demand Deposits as well as Term Deposits
2) They are not eligible to function as a business correspondent of another com-
C
mercial bank
3) Payments Banks are allowed to distribute non-risk sharing & simple financial
products like mutual funds, insurance & pension fund products etc.
4) Payments Banks are allowed to accept deposits from NRI customers
5) They can offer secured loans like home loan, gold loan, vehicle loan etc. to its
customers.
10. As per the guidelines of Payments Banks, Maximum up to what per cent of de-
mand deposit balances of Payments Banks can be held in current & fixed deposits
with other commercial banks for operations and liquidity management?
1) 10% 2) 25% 3) 50% 4) 5% 5) 35%
11. As per latest policy guidelines Foreign Direct Investment in Payments Banks in
private sector allowed up to a maximum of ______ % of the paid up capital of the
bank.
1) 20% 2) 26% 3) 49% 4) 74% 5) 100%
1
12. RBI permitted on-tap licencing of new entities to float universal banks. The uni-
versal bank has to get its shares listed on stock exchanges with in how many
years from commencement of business?
1) 3 Years 2) 1 Year 3) 10 Years 4) 4 Years 5) 6 Years
13. In 2006 – 07, banks were allowed to raise capital from the public through equity
issues. The relevant acts were amended to permit that public sector banks raise
capital to a level not exceeding what per cent of their equity base?
1) 10% 2) 49% 3) 26% 4) 55% 5) 33%
14. Identify incorrect statement among the following in the context of Small Finance
Banks?
1) SFB can be established by individuals / professionals with 10 years’ experi-
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ence in banking & finance industry.
2) Minimum paid up equity capital required to set up a SFB is Rs. 2 bn.
3) At the time of establishing SFB promoter’s minimum initial capital contribution
should be 40%.
4) D. SFBs would require to follow all prudential norms & regulation applicable to
commercial banks including maintaining CRR & SLR
15.
ha
5) E. Equitas Small Finance Bank is the first SFB established in India.
According to RRB (Amendment) Act 2015, what is the authorized capital of a
Regional Rural Bank (RRB)?
1) Rs. 1000 crore 2) Rs. 2000 crore 3) Rs. 500 crore
16.
E
4) Rs. 300 crore 5) Rs. 100 crore
______ % is the maximum ceiling on Foreign Direct Investment (FDI) in the eq-
d
uity of Public Sector Bank?
1) 20% 2) 26% 3) 49% 4) 51% 5) 74%
17. As per RBI norms, Small Finance Banks are required to maintain a minimum
Capital Adequacy Ratio (CAR) of ______ % of the loans on a continuous basis.
ee
1) 7% 2) 8% 3) 10% 4) 12% 5) 15%

18. LABs were introduced in 1996, these type of banking entities are restricted to
operate maximum in three contiguous Districts. What does letter L represents in
C
the term LAB?
1) Local 2) Lead 3) Limited 4) Liability 5) Lending
Sr
19. As per RBI guidelines, which of the following incorrect statement regarding Pay-
ment Bank?
1) Maximum Balance per customer is restricted up to Rs. 1 Lakh
2) Liabilities of Payment Bank should not exceed 33 times of its net worth
3) Payment Banks are required to invest at least 50% of their deposits in Govern-
ment Securities
4) D. Payment Banks are eligible to mobilize Demand Deposits
5) E. The minimum equity capital for setting up of these banks stands at Rs. 100
C
Crore
20. New Private Sector Banks are being given licenses by RBI since ____________
1) 1991 2) 1993 3) 1996 4) 1999 5) 2001
21. Choose the incorrect statement (s) among the following in the context of RRB’s
1. RRBs were created for rural credit delivery & to ensure financial inclusion
2. RBI is the banking regulator, while NABARD is monitoring RRB’s with limited
supervisory powers
3. Creation of RRBs conceptualized by B Shivaraman Committee to meet the
need of rural areas for institutional credit.
4. Capital base of RRBs is held by the central government, relevant state govern-
ment & the sponsor bank
5. According to RRBs (Amendment) Bill 2015, Authorised capital of RRBs raised
from Rs. 5 crore to Rs. 500 crore to strengthen these banks & further deepen
financial inclusion.
1) 3, 4 & 5 only 2) 4 only
3) 5 only 4) 4 & 5 only 5) 3 & 5 only
2
22. _________ is the largest bank in the world by total assets?

1) Citi Bank 2) BNP Paribas 3) Barclays 4) UBS 5) ICBC
23. Monte Dei Paschi Di Siena considered as oldest bank in the world still operating.
It was originated in which country?
1) France 2) United Kingdom 3) Italy
4) Netherlands 5) Germany
24. Who among the following holds major shareholding in India Post Payments Bank
(IPPB)?
1) Life Insurance Corporation 2) State Bank of India
3) Government of India 4) Unit Trust of India
5) National Bank for Agriculture And Rural Development
25. Prathama Bank is the first RRB in India established on 2nd October 1975. It was
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sponsored by which of the following Bank?
1) Canara Bank 2) Punjab National Bank 3) Syndicate Bank
4) Bank of Baroda 5) Union Bank of India
26. Which of the following having maximum shareholding in Bank of India?
1) Reserve Bank of India 2) Government of India
3) Life Insurance Corporation 4) Unit Trust India 5) State Bank of India
27.
ha
Among the other requirements, a top rated Non - Banking Finance Company
(NBFC) should have a minimum net worth of what amount to be converted into a
Private Sector Banking entity?
28.
E
1) Rs. 100 Crore
4) Rs. 500 Crore
2) Rs. 200 Crore 3) Rs. 300 Crore
5) Rs. 1000 Crore
SBI Life Insurance is a Joint Venture between SBI & ___________
d
1) Prudential Plc. 2) Aetna Inc. 3) Fairfax Financial
4) BNP Paribas Cardiff 5) Berkshire Hathaway
29. SBI Cards is one of the subsidiary of SBI. It is the Joint Venture between State
ee
Bank of India and which of the following?

1) Capital One 2) Discover 3) Chase 4) G.E. Capital 5) Barclays
30. In 2000, Times Bank got merged with which of the following Bank?
1) ICICI Bank 2) Kotak Mahindra Bank 3) HDFC Bank
C
4) AXIS Bank 5) Yes Bank
31. Which among the following bank not nationalized in 1969?
Sr
1) Union Bank of India 2) Bank of Baroda 3) Corporation Bank

4) Canara Bank 5) Central Bank of India
32. Which among the following bank not nationalized in 1980?
1) Corporation Bank 2) Oriental Bank of Commerce
3) Andhra Bank 4) Punjab National Bank 5) Punjab & Sind Bank
33. Lead Bank Scheme introduced in ______, envisages assignment of lead roles to
individual banks for the districts allocated to them.
1) 1962 2) 1969 3) 1978 4) 1993 5) 1998
C
34. Under Which committee recommendations State Bank of India was established?
1) Hilton Young Commission 2) C D Deshmukh Committee
3) Gorewala Committee
4) Narasimham Committee 5) Shivaraman Committee
35. Match the following with respect to Target Bank & Acquirer Bank.
A) Centurion Bank of Punjab 1) Oriental Bank of Commerce
B) Bank of Rajasthan 2) Kotak Mahindra Bank
C) Global Trust Bank 3) HDFC Bank
D) ING Vysya Bank 4) ICICI Bank
1) A-4, B-2, C-1, D-3 2) A-3, B-1, C-2, D-4
3) A-2, B-3, C-4, D-1 4) A-3, B-4, C-1, D-2 5) A-1, B-4, C-2, D-3
36. Identify incorrect match in the context of Bank and its origination country?
1) BNP Paribas – France 2) Barclays Bank Plc – UK
3) UBS AG – Switzerland 4) Deutsche Bank – Germany
5) Commonwealth Bank – Netherlands
3
37. Union Bank of India was inaugurated by Mahatma Gandhi in 1919. Headquarters
of Union Bank of India located at __________
1) New Delhi 2) Kolkata 3) Chennai 4) Mumbai 5) Bengaluru
38. The objective of Small Finance Bank is extend banking services to underserved
and unserved population through savings instruments, and providing credit to
small business units and other unorganised sector. In which city Utkarsh Small
Finance Bank headquartered?
1) Jaipur 2) Varanasi 3) Bengaluru 4) Trissur 5) Chennai
39. Payments Bank entities have not been allowed to __________
1) Accept demand deposits 2) Issue debit card to its customers
3) Accept deposits from NRI customers
4) Distribution of financial products such as Insurance, Mutual Fund & Pension
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Fund etc.
5) Invest depositor’s money in Government Securities.
40. UBS AG was a large integrated financial services company located in __________
1) Singapore 2) Switzerland 3) Sweden 4) United States 5) Saudi Arabia
41. What is the percentage of Equity / Shareholding of the concerned State Govern-
ment in Regional Rural Banks?
1) 100%
ha
2) 15% 3) 50% 4) 35% 5) 75%
42. Which of the following Bank was founded by freedom fighter Shri. LalaLajpat Rai
in 1894?
43.
E
1) Central Bank of India
4) Punjab National Bank
2) Canara Bank 3) Allahabad Bank
5) Union Bank of India
Reserve Bank of India has raised the minimum paid-up capital requirement for
d
Small Finance Bank from Rs. 100 crore to Rs. 200 crore. Payments Bank may
convert to a Small Finance Bank entity after completing ____ years of business.
ee
44. Which among the following set of banks merged with Punjab National Bank on 1st
April 2020?
1) UCO Bank & Oriental Bank of Commerce
C
2) Corporation Bank & Indian Bank
3) United Bank of India & Oriental Bank of Commerce
Sr
4) Syndicate Bank & Dena Bank

5) Bank of Maharashtra & Punjab and Sindh Bank
45. For what reason Oudh Commercial Bank has its importance in Indian banking
history?
1) Oldest joint stock bank of India
2) First bank established in India
3) First bank purely managed by Indians
C
4) India’s first limited liability bank
5) Oldest banking entity in India working even today
46. Which among the following entities considered as the first foreign bank in India
obtain licence from RBI to operate as Wholly Owned Subsidiary – WoS?
1) SBM Bank 2) DBS 3) Citi Bank
4) HSBC 5) Standard Chartered Bank
47. Barclays Bank is a multinational investment bank and financial services com-
pany headquarters in ________
1) New York, USA 2) London, UK 3) Paris, France
4) Sydney, Australia 5) Tokyo, Japan
48. In 2010, which among the following Associate Bank of SBI got merged with parent
firm State Bank of India?
1) State Bank of Patiala 2) State Bank of Bikaner & Jaipur
3) State Bank of Mysore 4) State Bank of Saurashtra
5) State Bank of Indore
4
49. In 1955, which among the following bank was transformed as State Bank of In-
dia?
1) Hindustan Bank 2) Oudh Commercial Bank
3) General Bank of India 4) Imperial Bank of India 5) United Western Bank
50. In India, Banks were nationalised in two different phases. Total 14 banks were
nationalised in Phase – I. Choose which among the following sets of banks were
nationalised in Phase I, i.e. 1969?
1) Bank of Baroda, UCO Bank & Andhra Bank
2) Punjab National Bank, Indian Bank & Bank of Maharashtra
3) Vijaya Bank, Central Bank of India & Oriental Bank of Commerce
4) Punjab & Sind Bank, Bank of India & Dena Bank
5) Allahabad Bank, Canara Bank & Corporation Bank
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51. As per guidelines of RBI for Small Finance Banks, Listing will be mandatory
within how many years after the Small Finance Bank reaches net worth of Rs.
500 crore?
1) 1 Year 2) 3 Years
ha 3) 5 Years 4) 2 Years 5) 6 Years
KEY
1.2 2.5 3.2 4.5 5.3 6.3 7.5 8.3 9.3 10.2
11.4 12.5 13.2 14.5 15.2 16.1 17 5 18.1 19.3 20.2
21.5
31.3
41.2
E
22.5
32.4
42.4
23.3
33.2
43.5
24.3
34.3
44.3
25.3
35.4
45.4
26.2
36.5
46.1
27.4
37.4
47.2
28.4
38.2
48.5
29.4
39.3
49.4
30.3
40.2
50.2
d
51.2
IMPORTANT INTERVIEW QUESTIONS

ee
1. What is the importance of Banking in an economic growth?

C
2. What do you know about evolution of Banking in India?
Sr
3. What is the difference between Amalgamation & Merger?
4. When a Banking entity considered as Public Sector Bank?
5. What is the difference between Associate & Subsidiary?
6. What were the objectives behind the nationalization of Banks?

C
7. What happens to gold or documents at bank lockers when it is stolen or gets
damaged in fire accidents / natural calamities? Will bank compensate if our
jewellery stored in the bank locker is robbed?
8. Why Small Finance Bank concept was initiated?
9. Tell us something about Nationalization of Banks in India
10. How Payments Banks are different from Commercial Banks? Why do we need
Payments Banks?
11. What do you know about Regional Rural Banks? Why these type of banking enti-
ties are important in Indian Banking Sector?
5
12. What are the milestones in Independent India’s Banking Sector?
13. What is the difference between Regional Rural Banks & Co-Operative Bank?
14. What is Lead Bank Scheme? Why it was initiated?
15. In what way Regional Rural Banks are different from Commercial Banks?
16. What is the difference between Bank and NBFC?
17. When a banking entity can be considered as Schedule Commercial Bank?
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18. What do you know about Small Finance Banks?
19. Tell us some licensing norms to set up a Private Sector Bank in India
20. What type of functions can performed by Payment Banks?
21.
ha
Tell us what is a Bank? What kind of functions it will perform?
22. In what way Public Sector Banks are different from Private Sector Banks?
23.
E
What is Net Demand & Time Liabilities - NDTL?
d
***
ee
C
Sr
C
6
RESERVE BANK OF INDIA PART - 1

* RBI is India’s a Central Banking Institution, which controls the Monetary
Policy of the Indian Rupee - INR
* It was created with an aim to regulate the Issue of Bank Notes and keeping of
reserves with a view to securing Monetary Stability in India.
* RBI was established under the recommendations of Hilton-Young Commission
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also known as Royal Commission on Indian Currency & Finance.
* It was established on 1st April, 1935 in accordance with the provisions of the
RBI Act, 1934.
* Initially RBI was constructed as a Private Share Holders’ Bank with fully paid-
up capital of Rs. 5 cr.
ha
* Head Office of RBI was initially established in Calcutta & permanently moved to
Mumbai in 1937.
* RBI was nationalized on 1st January, 1949.Though originally privately owned,
E
since nationalization in 1949, the Reserve Bank of India is fully owned by the
Government of India.
d
* RBI also acted as Central Banking Institution for Burma (Now known as Myanmar)
up to 1947 &Pakistan up to 1948.
* The original choice for the logo of RBI was the East India Company Double
ee
Mohur, with the sketch of the Lion & Palm Tree. However it was decided to
replace the lion with the tiger, the national animal of India.
* RBI switched to 1st April – 31st March Financial Year starting 2020-21. The RBI
C
currently follows a 1st July – 30th June Financial Year.The RBI has followed a 1st
July – 30th June Financial Year since 1940.
Sr
* Initially RBI Governor will be appointed for the tenor of 3 years, it can be
extended up to 2 more years after completion of initial tenure.
Mr. Shaktikanata Das- Governor of RBI (25th)
* The RBI Governor is appointed by the Prime Minister’s Office on the
recommendation of the Union Finance Minister as per Reserve Bank of India Act,
1934.
* RBI has the provision of Four Deputy Governors at any point of time.
C
1. Mr. Bibhu Prasad Kanungo
2. Mr. Mahesh Kumar Jain
3. Mr. Michael Patra
4. Vacant
* For both RBI Governor & Deputy Governors, the tenure of service is maximum
of 5 years or till the age of 62 whichever is earlier.
 Major Central Banking Entities
 Country - Name of Central Bank
* United States - Federal Reserve System
* United Kingdom - Bank of England
* Euro Zone - European Central Bank
* China - People’s Bank of China
* Russia - Bank of Russia
* Brazil - Banco Central do Brazil
1
* South Africa - South African Reserve Bank

* Japan - Bank of Japan
* Australia - Reserve Bank of Australia
* Sweden - SverigesRiksbank
* Germany - Deutsche Bundesbank
* France - Banque De France
* Switzerland - Swiss National Bank
* Pakistan - State Bank of Pakistan
* Bangladesh - Bangladesh Bank
* Myanmar - Central Bank of Myanmar
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* Nepal - Nepal Rashtra Bank
* Sri Lanka - Central Bank of Sri Lanka
 Fact Sheet
1st Governor of RBI- Sir Osborne Smith (1935-1937)
1st Governor of RBI (Indian)- Shri. C. D. Deshmukh (1943-1949)
Longest served RBI Governor- Shri. Benagal Rama Rau (1949-1957)
ha
Shortest served RBI Governor- Shri. Amitav Ghosh (1985)
Two Ex- Governors of RBI also served as Union Finance Minister- Shri. C.D.
Deshmukh&Dr. Manmohan Singh
E
First Women Deputy Governor of RBI- Smt. K.J. Udeshi (2003)
First Chief Financial Officer of RBI- Smt. SudhaBalakrishnan (2018)
d
 Eight Deputy Governors of RBI promoted as Governor of RBI
 RBI is made up of
* 29 Departments
ee
* 4 Local Board Offices – New Delhi, Mumbai, Kolkata & Chennai

* 27 Regional Offices & 4 Sub-Offices
 Research Institutes of RBI
C
* National Institute of Bank Management - NIBM - Pune, Maharashtra
* Institute for Development & Research in Banking Technology - IDRBT -
Sr
Hyderabad, Telangana
* Indira Gandhi Institute of Development Research - IGIDR - Mumbai,
Maharashtra
* Centre for Advanced Financial Research and Learning - CAFRAL - Mumbai,
Maharashtra
* National Centre for Financial Education – NCFE - Mumbai, Maharashtra
 RBI’s Training Establishments
C
* RBI Academy- Mumbai, Maharashtra
* RBI’s Staff College- Chennai, Tamil Nadu
* College of Agricultural Banking - Pune, Maharashtra
 Subsidiaries of RBI
* DICGC
* BRBNMPL
* ReBIT
* IFTAS
 DICGC
* In India, Deposit Insurance scheme was introduced in 1961.
* Deposit Insurance & Credit Guarantee Corporation was established in 1978.
* DICGC is wholly owned subsidiary of the Reserve Bank of India.
* The Authorized Capital of the Corporation is Rs. 50 crore, which is fully issued
and subscribed by the Reserve Bank of India.
2
* Functions - Insurance Cover for Bank Deposits &Guaranteeing Credit Facilities
* DICGC insures all Bank Deposits up to the limit of Rs. 5 Lakh of each deposit in
a bank.
* DICGC insures all bank deposits such as Savings Bank Account, Current Account,
Fixed Deposit Account &Recurring Deposit Account
* Deposit Insurance Limit Up to Rs. 5 Lakh(w.e.f. 4th February 2020)
 Deposit Insurance Revised Limit
* Up to Rs. 1 Lakh (w.e.f. 1st May 1993)
* Up to Rs. 5 Lakh (w.e.f. 4th Feb 2020)
* If we have deposits with more than one bank, Deposit Insurance coverage limit
is applied separately to the deposits in each bank.
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* As per the RBI guidelines, Bank Deposits with all Commercial Banks and
Cooperative Banks are insured under DICGC.
* Only Primary Cooperative Societies are not covered under DICGC.
* The Deposit Insurance scheme is compulsory and no bank can withdraw from it.
* Deposit Insurance Premiumat present stands at 0.12% per annum and it is
ha
entirely borne by Insured Bank.
* All insured banks are liable to pay to the DICGC Deposit Insurance Premium for
every deposit for the half year ending March and September.
E
* DICGC may cancel the registration of an insured bank if it fails to pay the
premium for three consecutive periods.
d
* DICGC is liable to pay to the liquidator the claim amount of each depositor up to
Rs. 5 Lakh within two months from the date of receipt of claim list from the
liquidator.
ee
 BRBNMPL
* Bharatiya Reserve Bank Note Mudran Private Limited was established in
1995.
C
* It was established with a view to increase the production of Bank Notes in
India.
* BRBNMPL established currency printing presses in two different locations.
Sr
Security Printing and Minting Corporation of India Limited

* Nashik, Maharashtra
* Dewas, Madhya Pradesh
Bharatiya Reserve Bank Note Mudran Private Limited
* Mysuru, Karnataka
* Salboni, West Bengal
C
 ReBIT
* Reserve Bank Information Technology Private Limited – ReBIT was established
in 2016.
* ReBIT set up by the Reserve Bank of India, for its IT and cyber security needs
and to ensure cyber resilience of Indian banking.
 IFTAS
Indian Financial Technology and Allied Serviceswas established in 2015to
facilitate the smooth functioning of banks, supporting them to innovate, and to
design unique digital banking experiences.
IFTASis a wholly owned subsidiary of the Reserve Bank of India.
***
3

 Functions of RBI
* Formulation of Monetary Policy
* Issuing Banknotes
* Banker to the Governments
* Banker to Banks
* Regulator of the Indian Banking System
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* Managing India’s Foreign Exchange Reserves
* Maintaining Financial Stability in an economy
* Supervising of the Payment & Settlement System
 Monetary Authority
* Monetary Policy refers to the use of instruments under the control of the RBI to
ha
regulate the availability & cost of money in a financial system.
* Cash Reserve Ratio
* Statutory Liquidity Ratio
* Bank Rate
* Marginal Standing Facility
* Repo Rate
E
d
* Reverse Repo Rate
* Open Market Operations etc.
 Objective of Monetary Policy
ee
Price Stability
Financial Stability in an Economy
Adequate availability of Money Supply
C
The RBI’s Annual Policy Statement announced in the month of April every year.
 Bi-monthly Monetary Policy Statement
Sr
April, June, August, October, December &February

 Monetary Policy Committee
* Government of India constituted a six member panel called Monetary Policy
Committee.
* In 2016, the Government amended the RBI Act to hand over the job of monetary
policy making in India to Monetary Policy Committee.
C
* MPC came into force on 27th June 2016.
* MPC was created to bring transparency in key rate setting decisions while
formulating Monetary Policy.
* Monetary Policy Committee constituted by the Central Government as per
the Section 45ZB of RBI Act, 1934.
 Total number of members - 06
* Reserve Bank of India Members - 03
* External Members Nominated by GoI - 03
* Mr. Shaktikanta Das - Chairperson
* Michael Patra – In-charge
* Mr. Janak Raj
* Mr. Chetan Ghate
* Mrs. Pami Dua
* Mr. Ravindra H. Dholakia
1
 Issuing Banknotes
* As per Sec 22 of Reserve Bank of India Act 1934, RBI has the sole authority to
issue notes of all denominations except Rs. 1 notes.
* Rs. 1 currency notes are issued by the Ministry of Finance of Government of
India.
* Rs. 1 Notes bears the signature of Finance Secretary of Ministry of Finance,
while other denomination notes bears the signature of Governor of RBI.
Mr. Ajay Bhushan Pandey - Finance Secretary, Ministry of Finance
Mr. Shaktikanta Das - Governor of RBI
* The RBI has the authority to issue Banknotes up to the denomination of Rs.
10,000.
r’s
* The highest denomination note ever printed by the Reserve Bank of India was
the Rs. 10,000 note in 1938 and again in 1954.
* In India, currency paper is made up of pulp containing Cotton and Cotton Rag.
* Optically Variable Ink is an anti-counterfeiting measure used in printing
banknotes.
ha
* Oldest Currency Note printing press in India – Currency Note Press, Nashik,
Maharashtra (1928)
* Security Paper Mill located in Hoshangabad, Madhya Pradesh
E
* The first Rs. 1 note was introduced on 30th November,1917.
* Mahatma Gandhi Series Banknotes introduced in the year 1996.
d
This series of Banknotes replaced Lion Capital Series Banknotes.
* Mahatma Gandhi New Series Banknotes introduced in 2016.
* On reverse side of Indian Banknotes, in a language panel which displays
ee
denomination of the note in 15 different languages.

* To assist visually impaired persons, new feature called Angular Bleed Lines
introduced on extreme right side & left side of Mahatma Gandhi Series Banknotes.
C
 Denomination – No. of angular bleed lines
Rs. 100 – 4
Sr
Rs. 200 – 4
Rs. 500 – 5
Rs. 2,000 – 6
* Ascending size of numerals in the number panels is one of the features introduced
by RBI.
* Numerals in both the numbering panels of banknotes are in ascending size from
left to right, while the first three alpha numeric characters will remain constant
C
in size.
 Note Printing Presses in India
1. Dewas -Madhya Pradesh
2. Nashik -Maharashtra
3. Salboni-West Bengal
4. Mysuru – Karnataka
* The Government of India has the sole right to mint Coins as per Coinage Act,
1906.
* Reserve Bank of India acts as the agent of the Government for distribution
and handling of coins.
* Coins can be issued up to the denomination of Rs. 1000 as per the Coinage Act,
1906.
* Coins in India are presently being issued in denominations of 50 paise, Rs. 1,
Rs. 2, Rs. 5 & Rs. 10.
2
* Coins up to 50 paise are called Small Coins and coins of Rs. 1 and above are
called Rupee Coins.
* Coins in the denomination of below50 paise have been withdrawn from circulation
w. e. f. June 30, 2011.
* At present, Indian coins are made up of alloy called Ferritic Stainless Steel
(FSS).
 Coin Mints in India
1. Noida -Uttar Pradesh
2. Mumbai-Maharashtra
3. Kolkata -West Bengal
4. Hyderabad -Telangana
r’s
 Minimum Reserve System
* In India, note issuing is based on methodology called Minimum Reserve System.
* RBI adopted this method in 1956.
* Sole purpose of the MRS is to maintain the confidence of the general public in
the country’s currency.
ha
* As per the MRS, a minimum reserve of Rs. 200 Crore is to be maintained by RBI
for issuing notes up to any limit.
* This comprises of Gold worth Rs. 115 Crore at least and remaining in foreign
exchange reserves.
E
Soiled Note - A note which has become dirty due usage and also includes a two
d
piece note pasted together forms an entire note with no essential feature missing.
Mutilated Note – A note of which a portion is missing or which is composed of
more than two pieces.
ee
Imperfect Banknote - Any banknote, which is wholly or partially, obliterated,

shrunk, washed, altered or indecipherable.
 Demonetization of Bank Notes
C
 Year – Denominations Demonetized
* January 1946 - Rs. 1000 & Rs. 10000
* January 1978 - Rs. 1000, Rs. 5000 & Rs. 10000
Sr
* November 2016 - Rs. 500 & Rs. 1000

 Clean Note Policy
The main objective of Clean Note Policy is to provide good quality currency notes
and coins to the citizens of our country.
* To help RBI and banking system, the members of public are requested to ensure
the following
C
* Not to staple the banknotes
* Not to write / put rubber stamp or any other mark on the banknotes
* Not to use banknotes for making garlands/toys, decorating pandals and places
of worship or for showering on personalities in social events, etc.
 Mahatma Gandhi Series (New) Bank Notes
 Denomination - Dimensions (in mm) - Base Colour - Currency Note Motif
* Rs 10 - 123 x 63 mm - Chocolate Brown - Sun Temple, Konark, Odisha
* Rs 20 - 129 x 63 mm - Greenish Yellow - Ellora Caves, Maharashtra
* Rs 50 - 135 x 66 mm - Fluorescent Blue - Hampi with Chariot, Karnataka
* Rs 100 - 142 x 66 mm – Lavender - Rani Ki Vav, Patan, Gujarat
* Rs 200 - 146 x 66 mm - Bright Yellow - Sanchi Stupa, Madhya Pradesh
* Rs 500 - 150 x 66 mm - Stone Grey - Red Fort, New Delhi
* Rs 2000 - 166 x 66 mm – Magenta - Mangal Yaan (Mars Orbiter Mission - MOM)
***
3

 Banker & Debt Manager to Government
* Managing the Government’s banking transactions is a key role of RBI.
* RBI will perform Banking transactions for Central Government and State
Governments (Except Sikkim).
 Ways & Means Advance
r’s
* Section 17(5) of the RBI Act, 1934 authorizes the Central Bank (i.e. RBI) to
lend to the Centre and State Governments.
* Subject to their being repayable not later than three months from the date of
the making of the advance.
* RBI extends WMA to help Central Govt. and State Govt. to tide over temporary
ha
mismatches in the Cash Flow of their Receipts & Payments.
* The WMA mechanism was introduced in 1997.
* At the end of each day, RBI’s electronic system automatically consolidates all of
E
the government’s transactions to determine the net final position.
* If the balance in the government’s account shows a negative position, RBI extends
d
a Short-Term &Interest bearing advance, called a Ways and Means Advance.
 * WMA is a facility for both the Centre and States to borrow from the RBI.
ee
* Normal WMA are Clean Advances.

* Special WMA (aka Special Drawing Facility) are Secured Advances provided
against the pledge of Government of India dated securities.
C
* After the exhaustion of the Special WMA limit, the State Government is provided
a Normal WMA.
Sr
* Interest Rate for WMA is currently charged at the Repo Rate.

 Banker to Banks
* The Reserve Bank of India provides products and services for the banks in the
country.
 Lender of the Last Resort
* RBI provides financial assistance to banks, when they unable to raise short-
C
term cash resources from the inter-bank market.
* A Lender of Last Resort is the provider of liquidity to financial institutions that
are experiencing financial difficulties.
 Regulator of Banking System
* RBI has a critical role to play in ensuring the safety and soundness of the
Indian Banking System.
* The Board for Financial Supervision was set up in 1994 by RBI.
* It was created for dedicated and integrated supervision of overall Banks&NBFCs.
 Manager of Foreign Exchange Reserves
* The RBI plays a key role in the regulation and development of the Foreign
Exchange Market.
RBI manages the Foreign Exchange Reserves of India.
1
 Foreign Exchange Reserves
* Gold
* Special Drawing Rights
* Foreign Currency Assets
* Foreign Exchange Reserves are a nation’s backup funds in case of an
emergency.
* These reserves are used to curb the volatile currency movements in
domestic forex markets.
* RBI is responsible for administration of the Foreign Exchange Management
Act, 1999.
r’s
 Maintaining Financial Stability
* In 2009, RBI set up a dedicated Financial Stability Unit mainly to continuous
monitoring of the macro financial system.
* Reserve Bank of India publishes a report called Financial Stability Report on
Half Yearly interval.
ha
 Supervisor of the Payment & Settlement System
* RBI has taken several initiatives for secure, efficient and authorized payment
systems in India.
E
* The Board for Regulation and Supervision of Payment and Settlement Systems
d
is the highest policy making body on payment systems in India.
 NPCI
ee
* National Payments Corporation of India was founded in 2008 by Reserve

Bank of India&IBA.
* Its headquarters located in Mumbai.
C
* In India, the Payment and Settlement Systems are regulated by the Payment
Settlement Systems Act, 2007.
Sr
* In terms of Section 4 of the PSS Act 2007, no person other than RBI can commence
or operate a payment system in India unless authorized by RBI.
 Customer Service
* The RBI established Banking Codes & Standards Board of India in 2006.
* It was established under the recommendations of S.S. Tarapore committee.
* BCSBI was registered as a society under the Societies Registration Act, 1860.
C
* It functions as an Independent and Autonomous Body.
* BCSBI will give customers more confidence in the Banking System and encourage
more usage of formal banking.
* Membership of BCSBI is voluntary and open to Scheduled Banks.
* Objective - To plan, develop and publish comprehensive Codes and Standards for
banks, for providing for fair treatment to their customers.
* Report called Code of Bank’s Commitment to Customers in the banking industry
has been evolved by BCSBI.
 Complaint Management System
* CMS is a software application to facilitate RBI’s grievance redressal processes.
* Members of public can access the CMS portal at RBI’s website to lodge their
complaints against any of the entities regulated by RBI i.e. Banks & NBFCs.
2
 Banking Ombudsman Scheme
* Banking Ombudsman is an independent authority appointed by RBI to resolves
the Complaints of the Customers in related to services provided by the Banks.
* The Banking Ombudsman Scheme was introduced in India in 1995.
* This Scheme is introduced under Section 35 A of the Banking Regulation Act,
1949 by RBI.
* It enables an expeditious and inexpensive forum to bank customers for resolution
of complaints relating to certain services rendered by Banks.
* As on date, 22 Banking Ombudsmen have been appointed by RBI.
 Important BO Scheme Guidelines
r’s
* All Scheduled Commercial Banks, Regional Rural Banks and Scheduled Primary
Co-operative Banks are covered under the BO Scheme.
* Bank had rejected the complaint
* Customer had not received any reply to his / her grievance from the bank
within One Month
ha
* Customer is not satisfied with the reply given to him by the Bank
* The BO does not charge any fee for filing and resolving customers’ complaints.
E
* Rs. 20 Lakh is the maximum amount of compensation that a BO can allow for a
case referred to it.
d
* BO may award compensation not exceeding Rs. 1 Lakh to the complainant only
in the case of complaints relating to Credit Card Operations.
ee
* If a person is not satisfied with the decision passed by the BO, he/she can
approach the Appellate Authority against the BO’s decision.
* The Appellate Authority is vested with Deputy Governor of RBI.
C
***
Sr
C
3

MULTIPLE CHOICE QUESTIONS
1. Mahatma Gandhi Series Banknotes replaced all Lion Capital Series Banknotes in
1996. In this series, on reverse side of banknote amount written in how many
languages in language panel?
1) 18 2) 15 3) 13 4) 16 5) 12
2. Which among the following incorrect match related to Mahatma Gandhi New
r’s
Series Banknotes (Denominations and Its Base Colour)?
1) Rs. 10 – Chocolate Brown 2) Rs. 50 – Fluorescent Blue
3) Rs. 200 – Carrot Orange 4) Rs. 500 – Stone Grey 5) Rs. 2000 - Magenta
3. Reserve Bank of India publishes a report titled Financial Stability Report on
_________ interval.
ha
1) Quarterly 2) Monthly 3) Yearly 4) Fortnightly 5) Half Yearly
4. Who among the following is not a panel member of Monetary Policy Committee at
present?
1) Chetan Ghate
4) RavindraDolakia
E
2) N S Viswanathan
5) Michael Patra
3) PamiDua
d
5. The Indira Gandhi Institute of Development Research is an advanced institute
for carrying RBI’s research on development issues, which was fully funded by
RBI. It is located in __________
ee
1) New Delhi 2) Mumbai, Maharashtra 3) Hyderabad, Telangana

4) Kolkata, West Bengal 5) Chennai, Tamil Nadu
6. National Payments Corporation of India was established in 2008 by Reserve Bank
C
of India & IBA. Its office situated in which Indian city?
1) Hyderabad, Telangana 2) Bengaluru, Karnataka
Sr
3) Mumbai, Maharashtra 4) Pune, Maharashtra 5) New Delhi

7. What is the relationship of the Bank & RBI when bank is handling the Currency
Chest, at its branch?
1) Pledger & Pledgee 2) Bailor & Bailee 3) Agent & Principal
4) Trustee & Beneficiary 5) Debtor & Creditor
8. Which among the following statements is / are correct in the context of Monetary
C
Policy Committee?
1. The objective behind the forming of MPC is to bring transparency to RBI’s
benchmark rate setting decisions.
2. It is an Eight member panel
3. It functions under the chairmanship of the Union Finance Minister
1) Only 2 2) Only 1 3) Only 1 & 3 4) Only 1 & 2
5) All statements are correct with respect to MPC
9. Mr. Jerome Powell is __________
1) Chairperson of Federal Reserve System
2) President of European Central Bank
3) Chairman of Bank for International Settlements
4) President of Asian Infrastructure Investment Bank
5) President of Asian Development Bank
1
10. With reference to the Banking Ombudsman Scheme, which among the following
statement(s) is / are correct?
1. The BO is appointed by the Govt. of India
2. BO scheme enables an expeditious and expensive forum to bank customers for
resolution of complaints relating to certain services rendered by banks
3. Rs. 20 Lakh is the maximum amount of compensation that a BO can allow for
a case referred to it
4. The service provided by the Banking Ombudsman is free of any fee
5. The orders passed by the BO are final and binding on the parties concerned.
1) Only 4 & 5 2) Only 3 & 4 3) Only 1, 4 & 5 4) Only 2 & 3 5) Only 1, 2 & 3
r’s
11. Identify the incorrect match related to Country and its Central Banking Institution.
1) USA – Federal Reserve System 2) UK – Central Bank of England
3) China – People’s Bank of China 4) Pakistan – State Bank of
Pakistan 5) South Africa – South African Reserve Bank
12. DICGC insures all bank deposits for up to the limit of Rs. 5, 00,000 of each
ha
deposit in a bank. Who bears the cost / premium of Deposit Insurance with DICGC?
1) Financial Intelligence Unit 2) Reserve Bank of India
3) Insured Depositor 4) Insured Bank 5) Govt. of India
13.
E
What is the Base Colour of Rs. 100 denomination in the Mahatma Gandhi New
Series Banknotes?
d
1) Aqua 2) Baby blue 3) Lavender 4) Saffron 5) Lime Green
14. Payments & Settlement System Act gives guidelines for regulation and supervision
of payment mechanisms in India. PSS Act was passed in ________
ee
1) 2002 2) 2011 3) 2007 4) 1999 5) 2009

15. Ascending size of numerals in the number panels is one of the features introduced
by RBI. Numerals in both the numbering panels of banknotes are in ascending
C
size from left to right, while the first how many alpha numeric characters will
remain constant in size?
Sr
1) 2 2) 3 3) 4 4) 5 5) 6
16. Name of Central Banking Authority of Sri Lanka is ________
1) State Bank of Sri Lanka 2) Bank of Sri Lanka
3) National Bank of Sri Lanka 4) Central Bank of Sri Lanka
5) Reserve Bank of Sri Lanka
17. RuPay is a product of National Payments Corporation of India. This product was
C
introduced in which year?
1) 2009 2) 2013 3) 2012 4) 2016 5) 2010
18. Which among the following kind of deposits are insured by Deposit Insurance &
Credit Guarantee Corporation with eligible banks?
1) Interbank Deposits 2) Deposits of Foreign Governments
3) Deposits of Central Government 4) Deposits of State Government
5) All deposits such as Savings Bank Account, Current Account, Fixed Deposit
and Recurring Deposits etc.
19. Rs. 100 denomination in Mahatma Gandhi New Series Banknotes will host motif
of Rani Ki Vav on the reverse side. It is one of the UNESCO World Heritage Sites
in India. It is located in which Indian State?
1) Maharashtra 2) Odisha
3) Gujarat 4) Madhya Pradesh 5) Uttar Pradesh
2
20. Main objective of RBI’s Monetary Policy is ____________
1) Maintain inflation at moderate level, and maintain stable economic growth
2) Moderating competition among private & public sector banks
3) Reduce unemployment 4) Maintaining low fiscal deficit 5) Eradicate poverty
21. Central & State Governments are eligible to avail temporary financial assistance from
Reserve Bank of India. This type of finance is called as __________
1) Overdraft 2) Cash Credit 3) Ways & Means Advance
4) Asset based Advance 5) Letter of Credit
22. Banking Codes & Standards Board of India was established under the
recommendations of __________
r’s
1) Suma Verma Committee 2) Usha Thorat Committee
3) NachiketMor Committee
4) N K Singh Committee 5) S STarapore Committee
23. Identify an incorrect statement regarding Deposit Insurance Scheme extended by
DICGC?
ha
1) Primary Co-operative Societies are not insured by the DICGC
2) Each depositor in a bank is insured up to a limit of Rs. 5 Lakh for both principal&
interest amount.
E
3) If we have deposits with more than one bank, deposit insurance coverage limit is
d
applied separately to the deposits in each bank.
4) Premium for Deposit Insurance facility is borne entirely by the depositor and it will
be auto debit from depositor’s account.
ee
5) The Deposit Insurance scheme is compulsory and no commercial bank can withdraw
from it.
C
24. Identify an Incorrect statement related to Rs. 2000 Denomination in Mahatma Gandhi
New Series Banknotes?
1) Rs. 2000 Denomination Banknote has a motif of Mangalyaan.
Sr
2) Base Colour of Rs. 2000 denomination banknote is Magenta

3) 166 mm x 66 mm is the dimensions of Rs. 2,000 Banknote
4) Rs. 2,000 Denomination consists of six angular bleed lines on left and right side
for the purpose of easy to identify markings for visually impaired persons.
5) None of the above
C
25. Banking Ombudsman Scheme was introduced under Section 35 A of the Banking
Regulation Act, 1949. BO Scheme was introduced by RBI in ________
1) 2001 2) 2005 3) 1999 4) 1995 5) 1991
26. The Banking Ombudsman may award compensation not exceeding Rs. __________ to
the complainant only in the case of complaints relating to credit card operations.
1) Rs. 50,000 2) Rs. 1 lakh 3) Rs. 2 lakh 4) Rs. 3 lakh 5) Rs. 5 lakh
27. Identify the research institute related to finance situated in Hyderabad, Telangana
among the following?
1) National Institute of Bank Management
2) Indira Gandhi Institute of Development Research
3) Centre for Advanced Financial Research and Learning
4) Institute for Development & Research in Banking Technology
5) National Institute of Securities Market
3
28. National Institute of Bank Management was established in 1969 by the RBI. It is
an autonomous apex institution for research, training, education and consultancy
in bank management. It is located in _______
1) Pune, Maharashtra 2) Lucknow, Uttar Pradesh
3) Bengaluru, Karnataka
4) Hyderabad, Telangana 5) Chennai, Tamil Nadu
29. The Indian Rupee Symbol officially adopted in which year?
1) 2008 2) 2010 3) 2012 4) 2007 5) 2011
30. Identify an incorrect match among the following?
1) LOLR – Lender of the Last Resort
r’s
2) BCSBI – Banking Codes & Standards Board of India
3) WMA – Ways & Means Agreement
4) MPC – Monetary Policy Committee
5) FEMA – Foreign Exchange Management Act
31. The Banking Ombudsman is an Independent Authority appointed by RBI to redress
customer complaints against deficiency in certain banking services. As per BO
ha
scheme guidelines, if complaint involves loss of more than Rs. ________, customer
cannot approach Banking Ombudsman.
32.
E
1) Rs. 2 lakh 2) Rs. 5 lakh 3) Rs. 10 lakh 4) Rs. 20 lakh 5) Rs. 30 lakh
What is the motif of Rs. 200 Denomination in Mahatma Gandhi New Series
Banknote?
d
1) Sanchi Stupa 2) Hampi with Chariot 3) Indian Parliament
4) Red fort 5) Mangalyaan
33. Which among the following set of entities are considered as Wholly owned
ee
Subsidiaries of RBI?
1) BRBNMPL & NHB 2) BRBNMPL & DICGC 3) DICGC & NABARD
4) NHB & NABARD 5) NHB & DICGC
C
34. College of Agricultural Banking is one of the training establishments of RBI. In
which Indian City it is located?
Sr
1) Lucknow, Uttar Pradesh 2) New Delhi 3) Patna, Bihar

4) Pune, Maharashtra 5) Chennai, Tamil Nadu
35. At present In India, Coins are made up of alloy / metal named ________
1) Nickel 2) Cupro – Nickel 3) Ferritic Stainless Steel
4) Bronze 5) Aluminium - Magnesium
36. RBI’s Monetary Museum located in ________
C
1) New Delhi 2) Kolkata, West Bengal 3) Mumbai, Maharashtra
4) Chennai, Tamil Nadu 5) Pune, Maharashtra
37. DICGC insures all kind of bank deposits such as Savings Bank Account, Current
Account, Fixed Deposit & Recurring Deposit etc. up to the limit of Rs. 5 lakh for
each deposit in a Bank with effective from ________
1) 4th Feb 2020 2) 1st Apr 2020 3) 15th Mar 2020
4) 1st Jul 2020 5) 1st Mar 2020
38. Board for Financial Supervision has been constituted as an autonomous body
under the ________
1) Bank Board Bureau 2) Reserve Bank of India
3) Securities & Exchange Board of India
4) Department of Economic Affairs
5) Department of Financial Services
4
39. In Mahatma Gandhi New Series Banknotes, Base Colour of Rs. 20 Denomination
is Greenish Yellow. Dimensions of Rs. 20 is ________ (in mm).
1) 135 x 66 mm 2) 123 x 63 mm 3) 129 x 63 mm
4) 135 x 63 mm 5) 129 x 66 mm
40. Central Banking entity of South Africa is named as ________
1) National Bank of South Africa 2) Federal Bank of South Africa
3) Central Bank of South Africa 4) South African Reserve Bank
5) South African Central Bank
41. Government of India can appoint Deputy Governors of Reserve Bank of India for a
maximum period of 5 Years. RBI has provision for how many Deputy Governors?
r’s
1) 3 2) 5 3) 4 4) 6 5) 2
42. Name of Pakistan’s Central Banking Entity is ________
1) Bank of Pakistan 2) National Bank of Pakistan
3) Central Bank of Pakistan 4) State Bank of Pakistan
5) Reserve Bank of Pakistan
43.
ha
Special Drawing Right is also called as Paper Gold. It is an international reserve asset
issued by ________
1) International Monetary Fund 2) World Bank Group
3) Bank for International Settlements
5) Federal Reserve System
E 4) New Development Bank

d
44. RBI provides financial assistance to banks, when they unable to raise short-term
cash resources from the inter-bank market. In an acronym LOLR, Letter R stands for
________
ee
1) Refinance 2) Receipt 3) Resort 4) Rate 5) Regulatory

45. Expand the term FLCC?
1) Fiscal Literacy and Credit Counselling
C
2) Financial Literacy and Credit Counselling
3) Fiscal Literacy and Consumer Counselling
Sr
4) Financial Liquidity and Card Counselling

5) Financial Literacy and Consumer Counselling
46. Which of the following is/are the objective(s) of RBI’s Monetary Policy?
1. To anchor inflation.
2. To actively manage liquidity.
3. To maintain interest rate regime consistent and financial stability.
C
1) Only 1 2) 1, 2, & 3 3) Both 1 and 2 4) Only 2 5) Both 1 & 3
47. In India, Financial Year (FY) runs from 1st April – 31st March. In a FY, Q3 - Quarter
3 usually spans __________
1) July – September 2) January – March 3) October – December
4) April – June 5) None of the above
KEY
1.2 2.3 3.5 4.2 5.2 6.3 7.3 8.2 9.1 10.2
11.2 12.4 13.3 14.3 15.2 16.4 17.3 18.5 19.3 20.1
21.3 22.5 23.4 24.4 25.4 26.1 27.4 28.1 29.2 30.3
31.4 32.1 33.2 34.4 35.3 36.3 37.1 38.2 39.3 40.4
41.3 42.4 43.1 44.3 45.2 46.2 47.1
5

1. In India, Coins can be issued up to the Denomination of Rs. _____ as per the
Coinage Act 1906.
1) Rs. 50 2) Rs. 100 3) Rs. 500 4) Rs. 1000 5) Rs. 2000
2. Rs. 1 Denomination bears the signature of __________
r’s
1) Governor of RBI 2) Deputy Governor of RBI
3) Union Finance Minister
4) Finance Secretary, Ministry of Finance 5) President of India
3. Till date, how many Deputy Governors of Reserve Bank of India promoted as
Governor of RBI?
4.
1) 4 2) 7
ha 3) 9 4) 8 5) 3
Two Ex-Governors of RBI also served as Union Finance Minister. One of them is
Shri. Manmohan Singh. Name another Ex-Governor?
1) B Rama Rau2) BimalJalan 3) C Rangarajan 4) C D Deshmukh 5) D Subba Rao
5.
E
In India, Coin Minting Stations located in four different cities. In which among
the following cities coin minting station not established?
d
1) Hyderabad, Telangana 2) Noida, Uttar Pradesh
3) Mumbai, Maharashtra 4) Kolkata, West Bengal 5) New Delhi
6. Who considered as first Women Deputy Governor of Reserve Bank of India?
ee
1) K J Udeshi 2) Usha Thorat 3) ShyamalaGopinath

4) Usha Ananthasubramanian5) Arundhati Bhattacharya
7. Initially Reserve Bank of India’s Governor will be appointed for the tenure of how
C
many year(s)?
1) 5 Years 2) 3 Years 3) 2 Years 4) 1 Year 5) 4 Years
Sr
8. Bharatiya Reserve Bank Note Mudran Private Limited is one of the Wholly owned
Subsidiaries of Reserve Bank of India. It was created in ________
1) 1992 2) 1988 3) 1995 4) 1999 5) 2003
9. In which year Mahatma Gandhi Series Banknotes introduced by Reserve Bank of
India?
1) 1996 2) 1991 3) 1999 4) 2001 5) 2004
10. Government of India constituted Monetary Policy Committee to bring value &
C
transparency to RBI’s key rate setting decisions . It came into existence in 2016.
It is a how many member panel?
1) 3 2) 6 3) 9 4) 5 5) 4
11. Ways & Means Advance -WMA refers to ____________
1) Advances made to Self Help Groups
2) Loans given to MSMEs by commercial banks
3) Advances given for the purpose of encouraging exports.
4) The temporary advances made to the government by RBI.
5) Loans made to unorganized sector by commercial banks
12. A banknote of which one portion is missing or which is composed of more than two
pieces is known as __________
1) Soiled Note 2) Defile Note 3) Foul Note 4) Mutilated Note 5) Taint Note
1
13. In-principle approval issued by the Reserve Bank of India is valid up to how many
months?
1) 9 months 2) 6 months 3) 3 months 4) 18 months 5) 12 months
14. In the year 1956, Reserve Bank of India adopted which among the following
approach while issuing banknotes in India up to any limit?
1) Proportional Reserve System 2) Fixed Fiduciary System
3) Minimum Reserve System 4) Fiscal Reserve System 5) Budget Reserve System
15. Under which section of the RBI Act 1934, The Reserve Bank of India has the sole
right to issue banknotes of all denominations except Rs. 1 note?
1) 18 2) 20 3) 22 4) 26 5) 28
16. Reserve Bank of India doesn’t Control which among the following Financial Institutions?
r’s
1) IDBI Bank 2) Shriram Transport Finance Company
3) Airtel Payments Bank 4) Axis Mutual Fund 5) Bajaj Finance Ltd.
17. Deposit Insurance & Credit Guarantee Corporation is a financial institution established
in 1978 by Reserve Bank of India. It’s Headquarters located in ________
1) Mumbai, Maharashtra 2) New Delhi
ha
3) Lucknow, Uttar Pradesh 4) Chennai, Tamil Nadu 5) Hyderabad, Telangana
18. Oldest Central Banking Entity in the World is ________
1) Bank of England 2) Federal Reserve Bank 3) SverigesRiksbank
4) People’s Bank of China 5) Bank of Japan
19.
E
As per Coinage Act, Government of India has the sole right to mint coins of all
d
denominations. Coinage Act was passed in ________
1) 1881 2) 1860 3) 1906 4) 1921 5) 1865
20. The Code of Banks’ Commitment to Customers in the Banking Industry has been
ee
evolved by __________
1) Department of Financial Services, MoF 2) Reserve Bank of India
3) Banking Codes and Standards Board of India
4) Banking Ombudsman 5) Board for Financial Supervision
C
21. Central Banking Authority of Bangladesh is known as __________
1) Bangladesh Bank 2) Bank of Bangladesh
Sr
3) Central Bank of Bangladesh

4) National Bank of Bangladesh 5) State Bank of Bangladesh
22. ________ was set up by the Reserve Bank of India in 2016, for its Information Technology
and Cyber Security needs and to ensure cyber resilience of Indian banking?
1) IFTAS 2) ReBIT 3) IDRBT 4) BRBNMPL 5) CAFRAL
23. Dimension of Rs. 200 Denomination in Mahatma Gandhi New Series Banknotes is
________
C
1) 146 X 66 mm 2) 135 X 66 mm 3) 150 X 66 mm
4) 166 X 66 mm 5) 142 X 66 mm
24. As per Minimum Reserve System, for issuing notes RBI has required to hold the
minimum reserves of Rs. 200 crore of which not less than Rs. _________ crore to be
hold in gold.
1) Rs. 85 crore 2) Rs. 95 crore 3) Rs. 105 crore 4) Rs. 115 crore 5) Rs. 125 crore
25. The Centre for Advanced Financial Research and Learning is an independent body
set up by the Reserve Bank of India. It is located in __________
1) Mumbai, Maharashtra 2) New Delhi 3) Pune, Maharashtra
4) Hyderabad, Telangana 5) Bengaluru, Karnataka
26. Reserve Bank of India’s Headquarters permanently moved from Calcutta to Bombay
in ________
1) 1937 2) 1939 3) 1944 4) 1947 5) 1949
2
27. As per Banking Ombudsman Scheme guidelines, Who can be treated as Appellate
Authority?
1) Finance Secretary 2) Deputy Governor of RBI
3) Ministry of Finance ( Independent Charge)
4) Chairman of Bank Board Bureau 5) Chairman of Indian Bank’s Association
28. Name the RBI’s subsidiary established with a view to increase the production of
Bank Notes in India.
1) DICGC 2) BRBNMPL 3) IFTAS 4) ReBIT 5) None of the above
29. Identify an incorrect statement related to functions performed by Reserve Bank
of India?
1) RBI controls the Monetary Policy of Indian Rupee (Rs. ).
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2) RBI has the sole authority to issue banknotes of all denominations except Rs.1
notes.
3) RBI will perform banking transactions for central government and state
governments (except Sikkim)
4) RBI plays a crucial role in formulation of Fiscal Policy.
5) RBI manages Foreign Exchange Reserves of India.
30.
ha
Which kind of Banking entities are covered in the Banking Ombudsman Scheme?
1. All Scheduled Commercial Banks
2. Regional Rural Banks
3. Scheduled Primary Cooperative Bank
1) 1 only
E
2) 1, & 2 only 3) 1 & 3 only 4) 2 & 3 only 5) All 1, 2, & 3
d
31. While granting license to an Universal Bank under Private Sector, Reserve Bank
of India considers all of the following, except __________
1) Previous experience in Banking and Finance activities
ee
2) Character of proposed management

3) Minimum capital requirement
4) Whether public interest will be served by grant of licence to the company
5) Price of share of a company
C
32. Identify an Incorrect statement in the context of Reserve Bank of India.
1) RBI was established under the recommendations of Hilton Young Commission
Sr
2) RBI was established on 1st April 1935

3) RBI’s Headquarter permanently shifted to Bombay from Calcutta in 1937
4) RBI also acted as central banking institution for Pakistan and Nepal
5) Logo of RBI consists of Tiger & Palm tree
33. Which entity considered as Lender of the Last Resort in Indian Financial System?
1) National Bank for Agriculture and Rural Development 2) State Bank of India
3) Micro Units Development & Refinance Agency
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4) Reserve Bank of India 5) Life Insurance Corporation of India
34. The first Rs. 1 note was introduced in which year?
1) 1949 2) 1937 3) 1917 4) 1906 5) 1926
35. What is the highest denomination printed by Reserve Bank of India till date?
1) Rs. 5,000 2) Rs. 25,000 3) Rs. 1,00,000
4) Rs. 10,000 5) Rs. 50,000
36. Identify correct statement(s) in the context of Banking Codes and Standards
Board of India?
1. BCSBI was established in 2006
2. It was set up under the recommendations of S.S. Tarapore committee
3. Its office located in Pune, Maharashtra
4. It is an independent body registered under the Societies Registration Act,
1860.
1) Only 1, 2, & 3 2) Only 2, 3 & 4 3) Only 1, 3, & 4
4) Only 1, 2 & 4 5) All of the above
3
37. What is the Base Colour of Rs. 500 Denomination in Mahatma Gandhi Series
New Banknotes?
1) Slate grey 2) Light grey 3) Dark green
4) Dark sea green 5) Stone grey
38. Apart form 2016, In which among the following year(s) Demonetization step
initiated in India’s history?
1. 1946 2. 1978 3. 1986 4. 1994
1) Only 1 & 3 2) Only 3 & 4 3) Only 1 & 2 4) Only 1, 2 & 4 5) Only 1 & 4
39. RBI publishes a report called Financial Stability Report on Half Yearly interval.
Which among the following months it publishes FSR on regular interval?
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1) April & October 2) January & July 3) February & August
4) June & December 5) March & September
40. Security Paper Mill was established in 1968. It is located in ________
1) Cuttack, Odisha 2) Faridabad, Haryana
3) Moradabad, Uttar Pradesh
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4) Hoshangabad, Madhya Pradesh 5) Ahmadabad, Gujarat
41. Two Note Printing Presses are functioning under Security Printing & Minting
Corporation of India. Those note printing presses located in ________ & ________
1) Nashik &Salboni 2) Nashik & Mysore 3) Mysore &Dewas
4) Nashik &Dewas
E 5) Salboni& Mysore
d
42. Section 17(5) of the RBI Act, 1934 authorizes the RBI to lend to the Centre and
State Governments, Subject to their being repayable not later than ________ months
from the date of the making of the advance.
ee
1) 1 Month 2) 6 Months 3) 12 Months 4) 3 Months 5) 9 Months

43. Who is the Chairman of Deposit Insurance & Credit Guarantee Corporation at
present?
C
1) Rajiv Kumar 2) Shaktikanta Das 3) B P Kanungo
4) M K Jain 5) Michael Patra
Sr
44. Initially Reserve Bank of India was constructed as a Private Share Holders’ Bank
with fully paid-up capital of Rs. ________ Crore.
1) Rs. 1 Crore 2) Rs. 10 Crore 3) Rs. 5 Crore 4) Rs. 2 Crore 5) Rs. 25 Crore
45. As the Deposit Insurance Cover stands increased to Rs. 5 Lakh, the insured
bank has to pay a premium of ____ % per annum against 0.10% per annum.
1) 0.15% per annum 2) 0.12% per annum 3) 0.16% per annum
4) 0.20% per annum 5) 0.18% per annum
C
46. Soiled Note refers to ________
1) a banknote which has become dirty due to normal wear and tear
2) a banknote of which a portion is missing or which is composed of more than two
pieces
3) Any banknote which is demonetised by central banking entity
4) any banknote, which is wholly or partially, obliterated, shrunk, washed, altered
or indecipherable but does not include a mutilated banknote
47. National Centre for Financial Education is promoted by RBI, SEBI, IRDAI and
PFRDA. It is located in ________
1) New Delhi 2) Hyderabad, Telangana 3) Chennai, Tamil Nadu
4) Bengaluru, Karnataka 5) Mumbai, Maharashtra
4
48. Who among the following are Deputy Governors of Reserve Bank of India at present?
1) M.K. Jain, B.P. Kanungo& S.S. Mundra
2) B.P. Kanungo, R Gandhi & Michael Patra
3) Michael Patra, V.V. Acharya & S.S. Mundra
4) Michael Patra, B.P. Kanungo& M.K. Jain
5) B.P. Kanungo, N.S. Viswanathan & V.V. Acharya
49. Indian Financial Technology and Allied Services was established to facilitate the
smooth functioning of banks and to design unique digital banking experiences. Its
office located in which Indian City?
1) Kolkata, West Bengal 2) Bengaluru, Karnataka 3) Mumbai, Maharashtra
4) Bhopal, Madhya Pradesh 5) Chennai, Tamil Nadu
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50. The Currency Note Press was established in 1928 as the first printing press for
bank notes in India. It is located in ________
1) Salboni, West Bengal 2) Mysore, Karnataka 3) Nashik, Maharashtra
4) Dewas, Madhya Pradesh 5) Hoshangabad, Madhya Pradesh
ha
 What does Monetary Policy refers to? Do you know what is the objective behind the
drawing up of Monetary Policy?

E
What role of RBI is known as Lender of the Last Resort?
d
 The role of Central Banking entity in a developing economy of a country? Tell us some
interesting facts about the RBI that most of us probably did not know?
ee
 Ways & Means Advances refers to?

 What are the main functions of Reserve Bank of India? Explain them in brief?
C
 Banking Ombudsman Scheme ! What is the procedure for filing complaints?
Sr
 How to avail insurance facility for our Bank Deposits? Which entity is responsible to
offer Deposit Insurance Facility in India?
 Name Wholly owned Subsidiaries of RBI?
 Who will maintain Foreign Exchange Reserve India & what are they?
 Define Soiled Note, Mutilated Note & Imperfect Note.
C
 Demonetization – Its Objective & Effects on Economy
 What do you know about Monetary Policy Committee?
 Tell us something about BCSBI?
KEY
1.4 2.4 3.4 4.4 5.5 6.1 7.2 8.3 9.1 10.2
11.4 12.4 13.4 14.3 15.2 16.4 17.1 18.3 19.3 20.3
21.1 22.2 23.1 24.4 25.1 26.1 27.2 28.2 29.4 30.5
31.5 32.4 33.4 34.3 35.4 36.4 37.1 38.3 39.4 40.4
41.4 42.3 43.5 44.3 45.2 46.1 47.5 48.4 49.3 50.3
5
REGULATORY AUTHORITIES IN INDIAN FINANCIAL SYSTEM

* Reserve Bank of India – Banking System
* Securities & Exchange Board of India – Capital Market
* Insurance Regulatory & Development Authority of India – Insurance Market
* Pension Fund Regulatory & Development Authority – Pension Funds
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 CAPITAL MARKET
* Capital Market is vital to the functioning of an economy, since capital is a
critical component for generating economic output.
* It is defined as market in which money is provided for period longer than a year
to meet long term requirements

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Securities & Exchange Board of India
* Securities & Exchange Board of India is the regulator of the Securities Market
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&Commodity Market in India.
* SEBI was established on 12th April 1992.
d
* SEBI is a Statutory Body.
* It got statutory status on 30th January 1992.
ee
* Originally, It was created as an Independent Body for regulating the Capital

Market in 1988.
* In 2015, Forward Market Commission was merged with SEBI.
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* SEBI headquarters located in Mumbai, Maharashtra.
Sr
* Regional Offices of SEBI located in Ahmedabad, New Delhi, Kolkata & Chennai.
* 1st Chairman of SEBI – Mr. S.A. Dave
* Chairman of SEBI at present – Mr. Ajay Tyagi
 Functions of SEBI
* To safeguard the interest of the investors and to regulate Capital Market with
suitable measures.
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* To eliminate malpractices of Securities Market.
* To check Insider Trading of Securities.
* To supervise the working of various trading organizations in Securities Market.
 SEBI is a responsible entity for the regulation of
Stock Exchanges, Mutual Funds, Depositories, Merchant Banking entities,
Commodity Exchanges, Foreign Institutional Investors - FIIs, Venture Capital Funds
- VCFs, Real Estate Investment Trusts - REITs, Alternative Investment Funds -
AIFs & Credit Rating Agencies - CRAs etc.
 SCORES - SEBI Complaints Redress System facilitates investors to lodge their
complaint online with SEBI.
 NISM - National Institute of Securities Market is an educational initiative of
SEBI. It was established in 2006 & it is located in Mumbai, Maharashtra.
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1
 INSURANCE
* Insurance is a Contractual Arrangement.
* By entering into an Insurance Contract, an individual or an entity receives
financial protection from an Insurance Company.
* Insurance protects an individual or an entity from financial loss.
In Indian Insurance Market, Life Insurance, General Insurance, Health Insurance
& Reinsurance companies are existed.
 The Oriental Life Insurance Company Limited (1818) is the first Life Insurance
Company established in India.
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 Triton Insurance Company Limited (1850) is the first General Insurance Company
set up in India.
 Bombay Mutual Life Assurance Society Limited (1870) is the first Indian
insurance company. ha
* The Insurance Act, 1938 was enacted to regulate the conduct of Insurance
companies in India.
* Life Insurance business was nationalised in 1956 and the Life Insurance
Corporation of India was formed.
E
* Total of 170 Insurance companies & 75 Pension Fund Societies were nationalized
d
at that time.
* Non-Life Insurance business was nationalised in 1972 and the General
Insurance Corporation of India was created.
ee
* At that point of time, 107 Insurers in India doing Non-Life Insurance business
were nationalized.
* In 1993, R.N. Malhotra Committee was set up to recommend changes for
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development of the Insurance Industry.
Sr
 Insurance Regulatory & Development Authority of India

* Insurance Regulatory & Development Authority of India came into existence on
19th April, 2000 as a Statutory Body.
* IRDAI was established based on the recommendations of R.N. Malhotra
Committee.
 Recommended Reforms
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* Private sector companies should be allowed to promote insurance firms
* Foreign promoters should also be allowed
* Government to vest its regulatory powers on an independent regulatory body.
* Insurance Regulatory & Development Authority Act was passed in 1999.
* IRDAI was created to protect the interests of policyholders, to regulate, promote
and ensure orderly growth of the Insurance Industry.
* 19th April observed as Insurance Awareness Day in India.
* IRDAI Headquarters located in Hyderabad, Telangana.
* 1st Chairman of IRDAI – Mr. N. Rangachary
* Chairman of IRDAI at present – Mr. Subhash Chandra Kunthia
 Functions of IRDAI
2
2
* Protecting policyholders’ interests.
* Registering and regulating Insurance Companies.
* Regulating investment of policyholders’ funds by Insurance Companies.
* Ensuring the maintenance of solvency margin by Insurance Entities.
* Promoting professional organisations in an Insurance Industry.
 BimaBemisaal - BimaBemisaal is the brand name for IRDAI’s Insurance
Awareness Campaign.
 NIA - National Insurance Academy located in Pune, Maharashtra.
IGMS - IRDAI has launched the Integrated Grievance Management System in
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2010.
It is a grievance redress monitoring tool for IRDAI.
 PENSION FUND
* The Government of India had commissioned a national project titled OASIS -
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Old Age Social & Income Security in 1999.
* GoI introduced a new Defined Contribution Pension System for the new entrants
to Central/State Government service, except to Armed Forces.
E
* National Pension System was introduced in 2004.
d
* NPS subscriber will be allocated a unique Permanent Retirement Account
Number - PRAN by Pension Fund Regulatory & Development Authority.
* PRAN is a 12 – digit code
ee
 Pension Fund Regulatory & Development Authority

* Pension Fund Regulatory & Development Authority was set up on 23rd August
2003.
C
* It’s Headquarters located in New Delhi.
Sr
* PFRDA was established to promoteold age income security by developing and

regulating Pension Funds in India.
* It protects the interests of subscribers of schemes of Pension Funds.
* Pension Fund Regulatory & Development Authority Act was passed in 2013.
* 1st Chairman of PFRDA – Mr.DhirendraSwarup
* Chairman of PFRDA at present – Mr. SupratimBandyopadhyay
C
***
3
3
IMPORTANT FINANCIAL INSTITUTIONS IN INDIAN FINANCIAL SYSTEM
 National Bank for Agriculture & Rural Development

* NABARD is the apex institution in India which looks after the development of
Rural Economy.
* NABARD came into existence on 12th July 1982.
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* It’s Headquarters located in Mumbai.
* It was created under the recommendations of Committee to Review the
Arrangements for Institutional Credit for Agriculture and Rural Development –
CRAFICARD. CRAFICARD Committee also known as B. Shivraman Committee.
* Initial Capital of NABARD stands at Rs. 100 Crore.
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* It was initiated at the time of Sixth Five Year Plan (1980-85).
* NABARD is fully owned by Government of India.
* NABARD monitors the functioning of Co-operative Banks and Regional Rural
Banks in India.
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Rural Infrastructure Development Fund.
d
* RIDF was set up by the Government of India in 1995-96 with an Initial Capital
of Rs. 2,000 Crore.
* Govt. of India created RIDF for financing various activities related to Agriculture
ee
Sector, Social Sector & Rural Connectivity.

* RIDF is maintained by the National Bank for Agriculture and Rural
Development.
C
* Fund size of RIDF stands at Rs. 3, 20,500 Crore.
 Subsidiaries of NABARD
Sr
* NABVENTURES Limited
* NABARD Consultancy Services
* NABARD Financial Services Limited
* NABKISAN Finance Limited
* NABSAMRUDDHI Finance Limited
 Training Establishments of NABARD
* National Bank Staff College - Lucknow
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* Bankers Institute of Rural Development - Lucknow
* Bankers Institute of Rural Development - Bolpur
* Bankers Institute of Rural Development - Mangaluru
 National Housing Bank
* National Housing Bank was established on 9th July, 1988.
* It was created under the recommendations of Shri. C Rangarajan Committee.
* It was set up to act as an apex level institution for Housing Sector.
* NHB is Wholly Owned by Government of India.
* NHB Headquarters located in New Delhi.
* National Housing Bank launched an index called RESIDEX.
* RESIDEX is a Reality Index for the country, which tracks residential property
prices across 26 Indian cities.
1
 Small Industries & Development Bank of India
* Small Industries Development Bank of India was set up on 2nd April, 1990.
* SIDBI is aimed to support the growth and development of Micro, Small and
Medium Enterprises - MSMEs in India.
The MSMED Act, 2006 defines the Micro, Small and Medium Enterprises.
Investment in Plant & Machinery/equipment and Annual Turnover
* Micro Enterprise - Investment in Plant and Machinery or Equipment - Not more
than Rs. 1 crore & Annual Turnover - Not more than Rs. 5 crore
* Small Enterprise - Investment in Plant and Machinery or Equipment - Not more
than Rs. 10 crore & Annual Turnover - Not more than Rs. 50 crore
* Medium Enterprise - Investment in Plant and Machinery or Equipment -
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Not more than Rs. 50 crore & Annual Turnover - Not more than Rs. 250 crore
* The Shares of SIDBI are held by the Government of India and 29 other institutions
/ Public Sector Banks / Insurance Companies owned or controlled by the Central
Government
* State Bank of India holds major shares (approx. 16.73%) in SIDBI equity.
ha
* SIDBI Headquarters located in Lucknow, Uttar Pradesh.
 Subsidiaries of SIDBI
* Micro Units Development & Refinance Agency Ltd. - MUDRA
E
* SIDBI Venture Capital Ltd.
* Credit Guarantee Fund Trust for Micro & Small Enterprises
d
* Acuite Ratings and Research Ltd.
* Receivables Exchange of India Ltd. - RXIL
* India SME Asset Reconstruction Company Ltd. - ISARC
ee
* India SME Technology Services Limited - ISTSL

 Micro Units Development & Refinance Agency
* MUDRA stand for Micro Units Development & Refinance Agency
C
* It was established on 8th April, 2015 under the scheme Pradhan Mantri MUDRA
Yojana - PMMY.
Sr
* MUDRA is a Refinance Institution. MUDRA do not lend directly to the Micro

Entrepreneurs.
* MUDRA enables the Micro Entrepreneurs to get credit support from lending
partners like MFIs, NBFCs & Commercial Banks etc. up to maximum of Rs.10
Lakhs.
* Mudra Loan is extended for a variety of purposes which provides Income
Generation and Employment Creation in Manufacturing, Services, Retail and
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Agri. Allied Activities.
* MUDRA aims to promote Non-Corporate Small Business Sector.
Shopkeepers, Fruit / Vegetable Venders, Truck & Taxi Operators, Food Service
Units, Repair Shops, Artisans, Food Processing etc.
* MUDRA created as a Wholly owned Subsidiary of SIDBI with 100% capital being
contributed by it.
* Authorised Capital of MUDRA Ltd. is Rs.1000 crore.
* It’s Headquarters located in Mumbai, Maharashtra.
 Pradhan Mantri MUDRA Yojana
* Shishu -Up to Rs.50,000
* Kishore - Above Rs.50,000 and Up to Rs.5 Lakh
* Tarun - Above Rs.5 Lakh and Up to Rs.10 Lakh
2
 TransUnion CIBIL
* Credit Information Bureau of India Limited – CIBIL is the first Credit Information
Company established in India, which was created in 2000.
* CIBIL is India’s leading CIC.
* It was incorporated based on recommendation made by the Shri. N.H. Siddiqui
Committee.
* TransUnion (USA) holds major shares in CIBIL with more than 92% stake.
* TransUnion CIBIL Headquarters located in Mumbai, Maharashtra.
* CIBIL collects and maintains records of an Individual’s Repayment track record
related to Loans and Credit Cards.
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* CIBIL aggregates Consumer Borrowing & Repayment Information for the purpose
of assessing Credit Risk & Pricing Credit.
* By using Repayment History of a particular Borrower, CIBIL will create a report
called Credit Information Report also known as CIBIL Report.
 CIBIL Score
ha
* CIBIL Score is a three digit numeric summary of an Individual’s Credit History.
* The Score ranges from 300 to 900.
* 300 being the lowest & 900 being the highest.
E
* It is a number that reflects one’s Credit Risk Level, typically with a higher
number indicating lower risk.
d
* CIBIL Score of NA - Not Available or NH - No History depicts that particular
individual is new to the Credit System.
 Factors That Affect an Individual’s Credit Score
ee
* Payment History
* Credit Utilization
* Credit Mix
C
* Age of Credit History
Sr
* Total Number of Accounts

* Foreign Direct Investment allowed in Credit Information Companies up to
100%.
* As per RBI Guidelines, every Credit Institution [Banks, NBFCS & HFCs etc.]
shall become member of at least one CIC and submit data to them.
 Credit Information Companies operating in India
 Name of the CIC – Headquarters
C
* TransUnion CIBIL – Mumbai
* Equifax – Bengaluru
* Experian – Mumbai
* CRIF High Mark - Mumbai
***
3
IMPORTANT FINANCIAL INSTITUTIONS IN INDIA PART-2
 Credit Rating Agency

 CRISIL
* Credit Rating Information Services of India Limited - CRISIL was the first Credit
Rating Agency entity established in India.
’s
* It was established in 1988.
* A CRA is a company which rates the debtors on the basis of their ability to pay back
the debt in timely manner.
ar
* It is a company that assigns Credit Ratings to Companies, Cities, and Governments
etc.
* CRISIL Headquarters located in Mumbai, Maharashtra.
 Major Credit Rating Agencies operating in India

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Name of the CRA – Headquarters
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* CRISIL – Mumbai
* CARE Ratings - Mumbai
* ICRA - New Delhi
* Acuite Ratings & Research - Mumbai
 Bombay Stock Exchange
ee
 Stock Exchange
* Stock Exchange provides an efficient electronic platform for buyers & sellers of a
particular security.
* Bombay Stock Exchange was established in 1875 as The Native Share & Stock
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Brokers Association.
Sr
* BSE is the oldest stock exchange in Asia.

* In 1957, the BSE became the first stock exchange to be recognized by the Govt. of
India under the Securities Contracts Regulation Act, 1956.
* BSE located at Dalal Street, Mumbai.
 SENSEX
* SENSEX (SENSitive indEX) is the Stock Market Index of Bombay Stock Exchange.
* It has been computed since 1986.& It is India’s oldest Stock Index.
* SENSEX is composed of 30 Blue-chip Stocks listed on BSE.
C
* The Base Year of SENSEX is 1979& the Base Value has been set at 100.
 National Stock Exchange
* National Stock Exchange was established in 1992.Andit began operations in 1994.
* It was set up on the recommendations of M.J. Pherwani Committee.
* NSE is located in Mumbai, Maharashtra.
 NIFTY
* NIFTY (NSE FIFTY) is the Stock Market Index of National Stock Exchange.
* The NIFTY is composed of 50 Large Cap Stocks listed on NSE.
* The Base Year for NIFTY is 1995, and the Base Value has been set at 1000.
 National Securities Depository Ltd.
* Depository is a place where financial securities are held in dematerialized form.
* Demat Account is an account that is used to hold Securities in electronic format.
* National Securities Depository Ltd. was established in 1996.
1
* It is the first depository established in India.
* NSDL Headquarters located in Mumbai, Maharashtra.
 Central Depository Services Ltd.
* Central Depository Services Ltd. was established in 1999.
* CDSL Headquarters located in Mumbai, Maharashtra.
 Life Insurance Corporation of India
* Oriental Life Insurance Company Limited (1818) was the first Life Insurance
Company established in India.
* Life Insurance Corporation of India was created on 1st September, 1956.
* LIC is Wholly Owned by Government of India.
* LIC Headquarters located in Mumbai, Maharashtra.
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 General Insurance Corporation of India
* In 1972, Non-Life Insurance business was nationalised and the General Insurance
Corporation of India and its Four Subsidiaries were set up.
ar
* National Insurance Company Ltd. - Kolkata, West Bengal
* The New India Assurance Co. Ltd. - Mumbai, Maharashtra
* Oriental Insurance Company Ltd. - New Delhi
* United India Insurance Company - Chennai, Tamil Nadu
* In 2000, GIC entered into Reinsurance Business.
dh
* GIC Re is the sole Reinsurance Company operating in India.
E
* GIC Re Headquarters located in Mumbai, Maharashtra.
 Export-Import Bank of India
* Export-Import Bank of India was established in 1982.
* EXIM Bank is India’s premier Export Finance Institution.
* It provides financial assistance to exporters and importers with a view to promoting
ee
India’s International Trade.

* EXIM Bank Headquarters located in Mumbai, Maharashtra.
 Export Credit Guarantee Corporation
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* Export Credit Guarantee Corporation was established in 1957.
* It was created strengthen the Export promotion by covering the risk of Exporting
Sr
on Credit.
* It extends Credit Insurance Support to Indian Exporters and is controlled by the
Ministry of Commerce, Government of India
* ECGC is Wholly Owned by Government of India.
* ECGC Headquarters located in Mumbai, Maharashtra.
 Employee’s Provident Fund Organization
* A Provident Fund is a Saving Scheme designed to build a reliable retirement
C
corpus in the form of a lump-sum amount at the time of the retirement.
* Employee’s Provident Fund Organization was created in 1952.
* Universal Account Number is a 12-digit code allotted to employee who is
contributing to EPF will be generated for each of the PF member by EPFO.
* EPF is available to salaried people in the Organised Sector.
* Employees who are drawing the Basic Wages and Dearness Allowance up to
Rs.15,000 per month are alone eligible to become a member.
* Contributions to EPF are made by both the Employee and the Employer.
* EPFO is administrated by Ministry of Labour & Employment.
* EPFO Headquarters located in New Delhi.
 Employees’ State Insurance Corporation
* Employees’ State Insurance Corporation provides Health Insurance Scheme for
Indian workers.
* It was created in 1952.
2
* ESI Scheme is applicable for all employees earning Rs. 21,000 or less per
month as wage.
* Employer contributes 3.25% and Employee contributes 0.75%, total share of 4%.
* The Employees registered under the scheme are entitled to Medical Treatment for
themselves and their dependents.
* ESIC is also administrated by Ministry of Labour & Employment.
* ESIC Headquarters located in New Delhi.
 Industrial Finance Corporation of India
* Industrial Finance Corporation of India, is Government of India owned Development
Bank to cater to the Long-term Finance needs of the Industrial Sector.
* It was set up in 1948 & It was the first Development Financial Institution
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established by Indian Government.
* Industrial Finance Corporation of India - 1948
* Industrial Credit Investment Corporation of India - 1955
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* Industrial Development Bank of India - 1964
* IFCI Headquarters located in New Delhi.
 Agriculture Insurance Company of India
* Agriculture Insurance Company of India was established in 2002.
* It offers yield based and weather based Crop Insurance Schemes in India.
dh
* AIC Headquarters located in New Delhi.
E
 Important Financial Institutions in Indian Financial System
 Name of the Organization – Established in – Headquarters
* State Bank of India – SBI – 1955 – Mumbai
* Life Insurance Corporation of India – LIC – 1956 – Mumbai
* General Insurance Corporation of India (GIC Re) - GIC Re – 1972 – Mumbai
ee
* National Bank for Agriculture & Rural Development – NABARD – 1982 – Mumbai
* Export Import Bank of India – EXIM – 1982 – Mumbai
* Export Credit Guarantee Corporation – ECGC – 1957 – Mumbai
* Deposit Insurance & Credit Guarantee Corporation – DICGC – 1978 – Mumbai
C
* The New India Assurance Company Limited – NIACL – 1919 – Mumbai
* National Payments Corporation of India – NPCI – 2008 – Mumbai
Sr
* Banking Codes & Standards Board of India – BCSBI – 2006 – Mumbai

* Trans Union CIBIL (formerly known as Credit Information Bureau of (India) Limited) -
TransUnion CIBIL – 2000 – Mumbai
* Credit Rating Information Services of India Limited – CRISIL – 1987 – Mumbai
* Bombay Stock Exchange – BSE – 1875 – Mumbai
* National Stock Exchange – NSE – 1992 – Mumbai
* Multi Commodity Exchange – MCX – 2003 – Mumbai
* National Securities Depository Limited – NSDL – 1996 – Mumbai
C
* Central Depository Services Limited – CDSL – 1998 – Mumbai
* Asset Reconstruction Company (India) Limited – ARCIL – 2002 – Mumbai
* Indian Railway Finance Corporation – IRFC – 1987 – Mumbai
* Credit Analysis & Research Limited – CARE – 1993 – Mumbai
* Acuite Ratings & Research (formerly known as SMERA) – SMERA – 2005 – Mumbai
* Micro Units Development & Refinance Agency – MUDRA – 2015 – Mumbai
* National Housing Bank – NHB – 1988 - New Delhi
* Agriculture Insurance Company – AIC – 2002 - New Delhi
* Employees Provident Fund Organization – EPFO – 1952 - New Delhi
* Employee State Insurance Corporation – ESIC – 1952 - New Delhi
* The Oriental Insurance Company Limited – OICL – 1947 - New Delhi
* Industrial Finance Corporation of India – IFCI – 1948 - New Delhi
* Investment Information & Credit Rating Agency – ICRA – 1991 - New Delhi
3
IMPORTANT FINANCIAL INSTITUTIONS IN INDIA PART-3

1. National Bank for Agriculture and Rural Development - NABARD was established
in 1982, under the recommendations of Mr. B Shivaraman Committee. At present,
Equity capital of NABARD is __________
r’s
1) Wholly owned by Reserve Bank of India
2) Wholly owned by Government of India
3) Wholly owned by Life Insurance Corporation 4) Jointly owned by RBI & GOI
5) Jointly owned by LIC & SBI
2. TransUnion CIBIL Limited (formerly known as Credit Information Bureau (India)
ha
Ltd.) was established in 2000. & it was created under the recommendations of
__________
1) N H Siddique Committee 2) BimalJalan Committee
3) H R Khan Committee 4) NachiketMor Committee
E
5) Deepak Mohanty Committee
d
3. On 8th April 2015, MUDRA was established under the scheme of PMMY to provide
financial support to small businesses. What does letter R represents in an acronym
MUDRA?
ee
1) Reconstruction 2) Regional 3) Refinance

4) Regulatory 5) Rural
4. Which one of the following factor will not affect one’s Credit Score compiled by
Credit Information Companies like CIBIL?
C
1) Credit repayment history 2) Credit utilization limit
3) Holding too many inoperative savings accounts
Sr
4) High percentage of unsecured loans 5) Multiple loan application

5. Foreign Direct Investment allowed up to what per cent in Credit Information
firms like TransUnion CIBIL, Experian, Equifax & CRIF High Mark etc.?
1) 26% 2) 100% 3) 74% 4) 49%
5) FDI not allowed in Credit Information Companies.
6. Government of India created RIDF in 1995-96, with an initial corpus of Rs. 2000
crore. What does letter R in an acronym RIDF?
C
1) Regional 2) Reserve 3) Rural 4) Risk 5) Regulation
7. Employees’ State Insurance Corporation - ESIC Health Insurance benefit applicable
to all employees earning Rs. __________ or less per month as wages.
1) Rs. 15,000 2) Rs. 25,000 3) Rs. 21,000 4) Rs. 12,000 5) Rs. 18,000
8. Shri. S. A. Dave was the first Chairman of ______
2) National Bank for Agriculture Rural Development
3) Insurance Regulatory & Development Authority of India
4) Pension Fund Regulatory and Development Authority
5) Life Insurance Corporation of India
9. In India, Foreign Direct Investment allowed up to what per cent in a Insurance
Company?
1) 26% 2) 49% 3) 74% 4) 100%
5) FDI not allowed in Insurance Company
1
10. In which Indian city National Bank for Agriculture & Rural Development - NABARD
headquarters located?
1) New Delhi 2) Mumbai, Maharashtra 3) Hyderabad, Telangana
4) Lucknow, Uttar Pradesh 5) Ahmedabad, Gujarat
11. S & P, Moody’s and Fitch are considered as major __________
1) Stock Exchanges 2) Insurance Company
3) Credit Information Companies
4) Credit Rating Agencies 5) Mutual Fund Companies
12. An unemployed youth availed financial support of Rs. 3 lakh under Pradhan Manti
MUDRA Yojana - PMMY for expansion of already existed paper bags and envelopes
manufacturing unit. This loan product belongs to which of the following schemes
launched by MUDRA?
r’s
1) Tarun 2) Kishore 3) Bharat 4) Sishu 5) Shakti
13. Acuite Ratings & Research Ltd. was set up in 2005 & it is an initiative of __________
1) National Bank for Agriculture & Rural Development
2) Life Insurance Corporation 3) National Stock Exchange
4) National Housing Bank 5) Small Industries Development Bank of India
14.
ha
National Housing Bank is an apex financial institution for Housing sector in India.
It is a Government of India owned entity. In which year NHB was created?
1) 1992 2) 1978 3) 1999 4) 1988 5) 2001
15. National Bank for Agriculture and Rural Development – NABARD came into
E
existence on 12th July 1982. It was set up with an initial capital of Rs. ________
1) Rs. 25 crore 2) Rs. 10 crore 3) Rs. 100 crore 4) Rs. 200 crore 5) Rs. 50 crore
d
16. Which among the following code / number issued by Pension Fund regulator
Pension Fund Regulatory and Development Authority?
1) PAN 2) UAN 3) ISIN 4) MMID 5) PRAN
ee
17. Which among the following entities regulates Capital Market in India?
1) Securities Commission of India
2) Securities and Exchange Commission of India
3) Financial Services Commission of India
C
4) Securities and Exchange Board of India
5) India Securities Regulatory Commission
Sr
18. A Credit Score is a numerical expression based on a level analysis of a person’s

credit files, to represent the creditworthiness of an individual. Which among the
following entities is/ are involved in calculating Credit Score of an individual
based on their credit history?
1) NDSL 2) CRISIL 3) ARCIL 4) TransUnion CIBIL 5) IndiCash
19. Which among the following Financial Institution headquarters located in Mumbai,
Maharashtra?
C
1) National Housing Bank 2) National Insurance Company Ltd.
3) Agriculture Insurance Company
4) Export Credit Guarantee Corporation
5) Small Industries Development Bank of India
20. Which among the following factor affect an Individual’s Credit Score?
1) Payment History 2) Credit Utilization 3) Credit Mix
4) Age of Credit History 5) All of the above
21. SCORES is a platform designed to help investors to lodge their complaints online
with SEBI, pertaining to securities market. SCORES stands for ________
1) Securities Complaints Redress System
2) SEBI Complaints Redress System
3) Securities Complaints Resolution System
4) SEBI Complaints Resolution System
5) Securities Complaints Redress Service
2
22. Universal Account Number – UAN is a 12-digit code, and it will be allocated by
__________
2) Employee State Insurance Corporation
3) Pension Fund Regulatory & Development Authority
4) Insurance Regulatory & Development Authority of India
5) Employees Provident Fund Organization
23. Which among the following entities fully owned by Government of India?
1) State Bank of India
2) National Bank for Agriculture and Rural Development
3) Deposit Insurance and Credit Guarantee Corporation
r’s
4) The New India Assurance Company Ltd.
5) Micro Units Development and Refinance Agency
24. NSDL is the India’s first Depository established, which was created in 1996. It
was promoted by _______
1) Reserve Bank of India 2) National Bank for Agriculture & Rural
Development
ha
3) National Stock Exchange 4) Clearing Corporation of India
5) Bombay Stock Exchange
25. Permanent Retirement Account Number - PRAN is a how many digit code allocated
E
by Pension Fund Regulatory Development Authority of India - PFRDA to subscribers
of Pension Funds?
d
1) 10 2) 9 3) 11 4) 12 5) 16
26. Which among the following statements false about Bombay Stock Exchange –
BSE?
ee
1) BSE was established in 1875 & it is oldest stock exchange in Asia.

2) BSE located at Dalal Street, Mumbai
3) SENSEX is the Stock Market Index of BSE
C
4) SENSEX is composed of 50 Blue-chip stocks listed on BSE 5) None of the above
27. The Self Help Group - Bank Linkage Program - SBLP was initiated by NABARD to
Sr
link unorganized sector of our population to the formal banking sector. In which
year SBLP was introduced?
1) 1976 2) 1998 3) 1992 4) 2004 5) 1986
28. Which organization has the responsibility to regulate the activities of Housing
Finance Companies – HFCs in India?
1) Housing Development Finance Corporation
2) Housing & Urban Development Corporation
C
3) Real Estate Regulatory Authority
4) National Housing Bank 5) Reserve Bank of India
29. The India International Exchange - INX is India’s first international stock exchange
established in 2017. It is located at International Financial Services Centre -
IFSC, GIFT City- Gujarat. It is a wholly owned subsidiary of __________
1) National Stock Exchange 2) Life Insurance Corporation of India
3) Metropolitan Stock Exchange
4) United Stock Exchange 5) Bombay Stock Exchange
30. Insurance Regulatory & Development Authority of India - IRDAI was constituted
as statutory body in __________
1) 2002 2) 1994 3) 2004 4) 2000 5) 1998
3
31. National Stock Exchange – NSE was established in 1992, under the
recommendations of _________
1) M.J. Pherwani Committee 2) C. Rangarajan Committee
3) R.N. Malhotra Committee 4) Vijay Khelkar Committee 5) H.R. Khan Committee
32. Arrange following organizations in chronological order with respect to year of
establishment.
1. National Housing Bank
2. Small Industries Development Bank of India
3. General Insurance Corporation of India
4. National Bank for Agriculture and Rural Development
5. Life Insurance Corporation of India
r’s
1) 4 – 3 – 1 – 5 – 2 2) 5 – 1 – 4 – 3 – 2 3) 2 – 1 – 4 – 3 – 5
4) 5 – 3 – 4 – 1 – 2 5) 5 – 4 – 3 – 1 – 2
33. Which among the following autonomous body constructed by Govt. of India to
improve the governance of Public Sector Banks, recommended selection of
chiefs of PSBs and Financial Institutions and to help banks in developing
ha
strategies and capital raising plans?
1) Banking Codes and Standards Board of India 2) Indian Banks’
Association
3) Bank Board Bureau
E
4) Cabinet Committee on Economic Affairs
d
5) Insolvency and Bankruptcy Board of India
34. Receivables Exchange of India Ltd. - RXIL was set up in 2016 with an objective
to operate India’s first Trade Receivables Discounting System - TReDS. It is a
ee
joint venture between ________ & ________

1) SIDBI & NSE 2) EXIM Bank & BSE 3) ECGC & NSE
4) MUDRA & NSE 5) NABARD & BSE
C
35. The purpose of setting up the GIFT City is to develop a world class smart city
that becomes a global financial hub with the development of an International
Sr
Financial Services Centre. India’s first International Financial Services Centre

- IFSC) located in GIFT City. It is situated in __________
1) Mumbai, Maharashtra 2) Bengaluru, Bengaluru 3) Hyderabad,
Telangana
4) Gandhinagar, Gujarat 5) New Delhi
36. As per MSMED 2006 Act, An enterprise’s investment in plant & machinery /
C
equipment not more than Rs. 10 Crore and its annual turnover not more than Rs.
50 Crore is called as ____
1) Small Enterprise 2) Micro Enterprise 3) Medium Enterprise
4) Macro Enterprise 5) Moderate Enterprise
37. Which of the following organization not headquartered in Mumbai, Maharashtra?
1) National Stock Exchange
2) Credit Information Bureau of India Ltd.
4) Export Credit Guarantee Corporation
38. Life Insurance Corporation of India – LIC is the largest insurance company in
India. It was established in __________
1) 1952 2) 1962 3) 1948 4) 1969 5) 1956
4
39. ECGC Ltd. was established in 1957 to ________
1) Promotion of cross border trade & investment
2) Provide health insurance scheme for Indian workers
3) Strengthen the export promotion by covering the risk of exporting on credit
4) D. Create a mandatory savings scheme for employees of the organised sector
5) E. Offer insurance facility for all bank deposits such as savings bank account,
current account, fixed deposit account & recurring deposit account
40. Central Depository Services Limited is one of the depositories in India based in
Mumbai. It is promoted by ___________ in 1998.
2) National Stock Exchange 3) Bombay Stock Exchange
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4) Life Insurance Corporation
41. An Index measures the price performance of a basket of securities using a
standardised metric and methodology. SENSEX - SENSitiveindEX is the Stock
Market Index of Bombay Stock Exchange - BSE. It consists of how many blue-chip
stocks?
ha
1) 30 2) 40 3) 50 4) 100 5) 225
42. Which among the following is the oldest stock exchange in Asia?
E
1) Shanghai Stock Exchange 2) Tokyo Stock Exchange
3) Bombay Stock Exchange
d
4) Jakarta Stock Exchange 5) Singapore Stock Exchange
43. Which among the following entities offers yield based and weather based Crop
Insurance Schemes in India?
ee
1) LIC 2) DICGC 3) AIC 4) ECGC 5) GIC Re

44. Industrial Finance Corporation of India, is Government of India owned Development
Bank. It was created to fulfil the Long-term Finance needs of the Industrial
C
Sector. It was came into existence in ________
1) 1964 2) 1955 3) 1982 4) 1975 5) 1948
Sr
45. Which among the following entities provides Health Insurance Scheme for Indian
workers?
1) ECGC 2) EPFO 3) GIC Re 4) ESIC 5) NABARD
46. ________ is a Saving Scheme designed to build a reliable retirement corpus in the
form of a lump-sum amount at the time of the retirement.
1) Mutual Fund 2) Pension Fund 3) Provident Fund
C
4) Unit Linked Insurance Plan 5) Venture
Capital Fund
47. ________ extends Credit Insurance Support to Indian Exporters and is controlled
by the Ministry of Commerce, Government of India.
1) GIC Re 2) LIC 3) AIC 4) ECGC 5) EXIM Bank
48. NSDL & CDSL are which type of entities?
1) Derivative Exchanges 2) Depositories 3) Commodity Exchanges
4) Credit Rating Agencies 5) Asset Management Companies
49. Headquarters of Employees’ Provident Fund Organization - EPFO located in
____________
1) Mumbai, Maharashtra 2) New Delhi 3) Kolkata, West Bengal
4) Chennai, Tamil Nadu 5) Lucknow, Uttar Pradesh
5
50. Which among the following entities maintains the Rural Infrastructure
Development Fund - RIDF?
1) Infrastructure Development Finance Company
4) Micro Units Development & Refinance Agency
5) National Housing Bank
51. Foreign Direct Investment allowed up to what per cent in Pension Sector in India?
1) 26% 2) 49% 3) 74% 4) 100%
5) FDI not allowed in Pension Sector in India
52. In which year Securities & Exchange Board of India - SEBI got statutory status?
r’s
1) 1988 2) 1962 3) 1996 4) 1992 5) 1994
53. Arrange in chronological order with respect to year of establishment?
1. NABARD 2. IFCI 3. LIC 4. SIDBI
1) 1, 3, 2, 4 2) 2, 3, 1, 4 3) 3, 1, 4, 2 4) 4, 1, 3, 2 5) 3, 2, 4, 1
54. SEBI is a/an __________
1) Advisory Body 2) Statutory Body 3) Constitutional Body
4) Autonomous Body
ha 5) Non Constitutional Body
55. Which of the following entities is created especially for the growth & development
of MSME Sector in India?
56.
1) NABARD 2) SIDBI
E 3) IFCI 4) NHB
In India, Credit Rating Agencies are regulated by ________
5) IDBI
d
1) RBI 2) IRDAI 3) SEBI 4) SIDBI 5) NABARD
57. Headquarters of Pension Fund Regulatory & Development Authority - PFRDA
located in __________
ee
1) Mumbai, Maharashtra 2) New Delhi 3) Kolkata, West Bengal

4) Bengaluru, Karnataka 5) Hyderabad, Telangana
58. National Bank for Agriculture & Rural Development was created based on the
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recommendations of ________
1) A. D. Gorwale Committee 2) Narasimhan Committee
Sr
3) BimalJalan Committee 4) B. Shivraman Committee

5) C. Rangarajan Committee
59. Which among the following entities collects and maintains records of an
Individual’s Repayment track record related to Loans and Credit Cards.
1) BCSBI 2) CRISIL 3) CIBIL 4) NPCI 5) CDSL
60. Identify incorrect statement in the context of Securities & Exchange Board of
India?
C
1) SEBI was initially constituted in 1988 as an Independent Body.
2) SEBI was given statutory status in 1992.
3) SEBI was established to regulate capital market with suitable measures.
4) Headquarters of SEBI located in Mumbai.
61. Identify an incorrect match regarding Organizations & their Headquarters?
1) IRDA – Hyderabad 2) SIDBI – Lucknow 3) LIC – Mumbai
4) NABARD – Mumbai 5) ECGC – New Delhi
62. Which of the following fall under the purview of Regulatory Authority Securities &
Exchange Board of India - SEBI?
1) Micro Finance Institutions 2) Non-Banking Finance Companies
3) Mutual Fund Entities 4) Insurance Companies
5) Micro, Small & Medium Enterprises
6
63. Export - Import Bank of India is India’s premier export finance institution. It was
established by Government of India in ________
1) 1956 2) 1982 3) 1990 4) 1988 5) 1978
64. The Big Three CRAs are S&P, Moody’s & Fitch. What does letter C denotes in an
acronym CRA?
1) Credit 2) Capital 3) Card 4) Cash 5) Corporate
65. In India, Commodity Market regulated by ________
1) RBI 2) PFRDA 3) IRDA 4) SEBI 5) NABARD
66. Which of the following entities issues a Credit Information Report - CIR which
reflects the credit profile of an individual’s?
1) CRISIL 2) ICRA 3) CARE Ratings 4) CIBIL 5) CDSL
r’s
67. CIBIL Score ranges from __________ to _________
1) 400, 800 2) 100, 500 3) 300, 900 4) 200, 800 5) 100, 1000
68. Shishu is one of the loan product launched by MUDRA. What is the Maximum
loan amount offered under the scheme?
1) Rs. 2,00,000 2) Rs. 5,00,000 3) Rs. 1,00,000 4) Rs. 50,000 5) Rs. 10,00,000
69. National Insurance Academy is located in ___________
1) Pune, Maharashtra
ha 2) New Delhi 3) Mumbai, Maharashtra
4) Lucknow, Uttar Pradesh 5) Hyderabad, Telangana
70. The National Insurance Company Limited – NICL was established in 1906, &Its
1) Mumbai, Maharashtra
E
headquarters located in ________
2) New Delhi 3) Kolkata, West Bengal
d
4) Hyderabad, Telangana 5) Chennai, Tamil Nadu
71. Which of the following is the only Reinsurance Company that operating in India?
1) ESIC 2) ECGC 3) NIACL 4) GIC 5) LIC
ee
72. Credit Rating Agency firms which rates debt instruments / securities according
to the debtor’s ability to pay lenders back. Which of the following entities is
functioning as CRA in India?
C
1) CIBIL 2) Experian 3) CRIF High Mark 4) CRISIL 5) Equifax
73. Related to Capital Market, what does letter D denotes in an acronym NSDL?
Sr
1) Development 2) Deposit 3) Debt 4) Depository 5) Derivative

74. SEBI’s educational initiative National Institute of Securities Market - NISM is
located in ________
1) Pune, Maharashtra 2) New Delhi 3) Mumbai, Maharashtra
75. Identify an incorrect statement(s) related to Insurance Regulator IRDAI?
1) IRDAI is a Statutory Body
C
2) First chairman of IRDAI is Mr. N. Rangachary
3) Its was established on 19th April 2000.
4) IRDAI’s Headquarters located in Hyderabad.
5) It was established under the recommendations of Narasimham Committee.
76. Agriculture Insurance Company – AIC Headquarters located in ___________
1) Chennai, Tamil Nadu 2) New Delhi 3) Mumbai, Maharashtra
77. Identify an incorrect statement in context of Securities & Exchange Board of
India.
1) SEBI is the regulator of Capital Market in India
2) SEBI was established in 1988 as an Independent Body
3) Headquarters of SEBI located in Mumbai
4) Mr. S.A. Dave is the first SEBI Chairman
5) SEBI got Statutory status in 1990
7
78. Credit Rating Information Services of India Limited – CRISIL is largest Credit
Rating Institution in India. It’s Headquarters located in __________
1) Mumbai, Maharashtra 2) Kolkata, West Bengal 3) Bangalore, Karnataka
4) New Delhi 5) Hyderabad, Telangana
79. Refinance Institutions are crucial in a financial system, which provides loans to
financial institutions at a reasonable cost for the purpose of development of a
specific activity in an economy. Which among the following entities not considered
as a refinance institution?
1) NABARD 2) MUDRA 3) SIDBI 4) NHB 5) ECGC
80. Pension Fund Regulatory & Development Authority – PFRDA established in
________
r’s
1) 2003 2) 2001 3) 2004 4) 2005 5) 2009
81. MUDRA initiated a loan product called Tarun to support Non- Corporate Small
Business Sector. Under Tarun Scheme, maximum credit support extended up to
Rs. __________
1) Rs. 1 lakh 2) Rs. 20 lakh 3) Rs. 50,000 4) Rs. 5 lakh 5) Rs. 10 lakh
82. Micro Units Development & Refinance Agency Bank headquarters located in
__________
ha
1) Mumbai, Maharashtra 2) Lucknow, Uttar Pradesh
3) New Delhi 4) Chennai, Tamil Nadu 5) Kolkata, West Bengal
83.
E
National Bank for Agriculture & Rural Development was established under which
Five Year Plan?
d
1) 4th 2) 5th 3) 6th 4) 7th 5) 8th
84. Headquarter of Small Industries Development Bank of India - SIDBI located in
__________
ee
1) Pune, Maharashtra 2) Chennai, Tamil Nadu 3) Lucknow, Uttar Pradesh

4) Bhopal, Madhya Pradesh 5) Hyderabad, Telangana
85. Under Pradhan Manti MUDRA Yojana - PMMY, MUDRA has created a loan product
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called Kishor. This scheme covering loans above Rs. _______ and up to Rs. _______
1) Rs. 1 Lakh - Rs. 3 Lakhs 2) Rs. 50,000 - Rs. 5 Lakhs
Sr
3) Rs. 1 Lakh - Rs. 10 Lakhs 4) Rs. 50,000 - Rs. 2 Lakhs

5) Rs. 50,000 - Rs. 3 Lakhs
86. ECGC Ltd. is a company Wholly Owned by ________
1) Reserve Bank of India 2) Government of India
3) Export Import Bank of India 4) Confederation of Indian Industry
87. Insurance Regulatory & Development Authority of India – IRDAI was established
C
under the recommendation of _________
1) A.D. Gorewala Committee 2) C. Rangarajan Committee
3) BimalJalan Committee 4) R.N. Malhotra Committee
5) H.R. Khan Committee
88. RESIDEX is a Reality Index for the country, which tracks residential property
prices across 26 Indian cities. It was an initiative of ________
1) RBI 2) NSE 3) HDFC 4) NHB 5) SEBI
89. MUDRA exclusively established for the development of Micro Enterprises in India.
It was created by Govt. of India in ________
1) 2011 2) 2015 3) 2016 4) 2013 5) 2012
8
90. India SME Asset Reconstruction Company Ltd. - ISRAC is one of the subsidiaries
of ________
1) MUDRA 2) EXIM Bank 3) SIDBI 4) IDBI 5) NABARD
91. NIFTY is the Benchmark Stock Market Index of NSE. It is composed of 50 Blue-
chip Stocks listed on NSE. Base Value of NIFTY set at ________
1) 100 2) 1000 3) 10000 4) 10 5) None of the above
INTERVIEW QUESTIONS
 What does Stock Exchange mean? Tell us something about BSE & NSE?
 What do you know about India’s capital market regulator SEBI? Why it was created?
 How is Life Insurance different from General Insurance?
r’s
 Tell us something about SENSEX & NIFTY. How are they calculated?
 What is the role of NABARD in rural credit in India?
 What is the difference between EXIM and ECGC?
 ESI Scheme ! What do you know about it?

ha
Have you heard about CIBIL Score? How it will be evaluated?
 What is the importance of IRDAI in Indian Financial System?
 What is the difference between Provident Fund & Pension Fund?

E
Credit Rating Agencies ! Why are these entities existed?
d
 What is the purpose of MUDRA Loan? Tell us something about this initiative?
 In what way Credit Information Companies are different from Credit Rating
ee
Agencies?
C
Sr
KEY
C
1.2 2.1 3.3 4.3 5.2 6.3 7.3 8.1 9.2 10.2
11.4 12.2 13.5 14.4 15.3 16.5 17.4 18.4 19.4 20.5
21.5 22.5 23.2 24.3 25.4 26.4 27.3 28.5 29.5 30.4
31.1 32.4 33.3 34.1 35.4 36.1 37.3 38.5 39.3 40.3
41.1 42.3 43.3 44.5 45.4 46.3 47.4 48.2 49.2 50.3
51.2 52.4 53.2 54.2 55.2 56.3 57.2 58.4 59.3 60.5
61.5 62.3 63.2 64.1 65.4 66.4 67.3 68.4 69.1 70.3
71.4 72.4 73.4 74.3 75.5 76.2 77.5 78.1 79.5 80.1
81.5 82.1 83.3 84.3 85.2 86.2 87.4 88.4 89.2 90.3
91.2
9
DIFFERENT TYPES OF BANK DEPOSIT PRODUCTS (PART-I & II)
 Why should we save money?

* We should save our surplus money, because it can be used to meet our Emergency
/ Anticipated Expenses.
* During crisis situation only our savings could help us.
 Bank accepts money in the form of Deposits from its customers for the purpose of
r’s
lending and investment and repays it as per the terms of the contract of deposit.
 The general relationship between the Bank and a Depositor is a relation of the
Debtor and the Creditor.
 Types of Bank Deposits
* Demand Deposits aka CASA Deposits
ha
* Term Deposits aka Time Deposits
 Demand Deposits
* Savings Bank Account
* Current Account
 Term Deposits
* Fixed Deposit Account
E
d
* Recurring Deposit Account
 KYC
* Know Your Customer norms has been implemented as per directives of Reserve
ee
Bank of India in 2002.

* KYC Principles were issued by RBI under Section 35 Aof Banking Regulation Act
1949.
C
 Purpose of KYC Guidelines
* Enable bank to know customers and their financial dealings better
Sr
* Identify Money Laundering & Suspicious activities

* Prevent financing of terrorism activities
* Monitoring large value transactions
* The objective of KYC Guidelines is to prevent banks from being used, by criminal
elements for Money Laundering activities.
 Money Laundering
* Money Laundering is the process of making money earned from criminal activity
C
appear to have a legitimate source.
* It’s a multi-stage process where the money is accumulated, separated from its
original source, mixed with legitimately-earned funds.
 Different Stages in Money Laundering
* Placement
* Layering
* Integration
* Placement is the stage where the money first enters the financial system.
* Layering is the stage where the illicit money is blended with legitimate money
or placed in constant motion.
* Integration is the stage where the money re-enters the legitimate economy.
* KYC consists of two elements – Identity and Address.
* The Identity of the customer cannot change, the address may undergo change
and thus the banks are required to periodically update their records.
1
 Periodic Updation of KYC Details
Type of Risk Profile - Minimum Periodicity
* Low Risk - 10 Years
* Medium Risk - 8 Years
* High Risk - 2 Years
 Partial Freeze Account
* Partial Freezing of the accounts means account holder can Deposit or Accept
Money but cannot Withdraw or Spend.
* Before tagging account as a Partial Freeze Account, Banks are required to give
due notice of 3 months, followed by the reminder of 3 months. i.e. Banks should
Partially Freeze Account only after the period of 6 months is over.
r’s
* Debits and credits from/to the accounts shall be disallowed in case of the
account being KYC non-compliant after 6 Months of imposing Partial Freezing.
 CIF / CRN
* Customer Information File / Customer Relationship Numberstores all relevant
information about a customer’s personal and account information.
 FIU
ha
* Financial Intelligence Unit is the regulatory arm of Govt. of India that keeps
track of all the suspicious transactions and/or cash transactions taking place
across the country.
E
* FIU maintains a national database of all transactions received from the reporting
entities.
d
Financial Intelligence Unit - IND
* Cash Transaction Report - CTR
* Counterfeit Currency Report - CCR
ee
* Suspicious Transaction Report- STR

 FIU - IND
* CTR - Cash transactions >Rs. 10 Lakh
C
* CCR - All cash transactions where counterfeit notes have been used
* STR - Suspicious transactions irrespective of whether they are in cash or
Sr
otherwise
 FIU – IND
* CTR - On monthly basis by 15th of the succeeding month.
* CCR - Not later than 7 working days from the date of occurrence.
* STR - Within 7 days from date such activity is observed.
 E-KYC
Electronic KYC is a paperless KYC procedure wherein the identity & address of
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the customer are verified electronically through Aadhaar authentication.
 V-CIP
Video based Customer Identification Process, an easier approach for Banks and
Financial Institutions to follow RBI’s KYC norms by leveraging the digital technology.
* As per Prevention of Money Laundering Act 2002, Banks are required to
maintain record of transactions for 5 Years.
 Demand Deposits
* Demand Deposit is money that customer deposit into a bank account from which
he / she can withdraw on demand, at any time without any advance notice to the
bank.
 Savings Bank Account
* A Deposit Account held at a bank that provides Principal Security, a Modest
Interest Rate and High Degree of Liquidity, is termed as a Savings Bank Account.
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* Savings Bank Account product primarily designed for developing the Habit of
Saving among the public.
* This kind of deposit product can be operated by an Individuals & a group of
persons like Clubs, Trusts, and Associations, Self Help Groups etc.
* Savings Bank Account is one of the most popular products for an Individual.
* There are no restrictions imposed with regard to age or income of an individual at
the time of opening a Savings Bank Account.
* A person can open a Savings Bank Account for his/her minor son/daughter.
* Minors above the age of 10 Years may be allowed to open and operate Savings Bank
Account independently.
* Banks stipulate Minimum Balance for Savings Bank Account Holders, with Cheque
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Book and Without Cheque Book facility.
* The Minimum Balance condition may vary from bank to bank.
* Generally Banks put certain restrictions on no. of withdrawal transactions in this
type of account.
* Account holder can perform limited no. of withdrawal transactions at free of cost.
* Interest in Savings Bank Accounts of resident Indians has been deregulated by RBI
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w.e.f. 25th October, 2011.
* Now Individual Banking entities are free to decide the Savings Bank Account
Interest Rates within certain conditions imposed by RBI.
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* w.e.f. 1st April, 2010, interest is being paid on Daily product basis as RBI directives.
* Interest on Savings Bank Account should be credited on regular basis whether the
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account is operative or not.
* Some Banks grant Temporary Overdraft – TOD in satisfactorily conducted SB
Accounts of those salaried customers whose monthly salary is being credited to their
ee
SB Accounts with them.

* Interest Income generated up to Rs. 10,000 in a Financial Year on Savings Bank
Account is exempted from Income Tax.
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* Tax Deducted at Source - TDS on cash withdrawal w.e.f. July 1, 2020. 2% on cash
withdrawal is applicable if the amount withdrawn from a Bank Account exceeds Rs.
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1 Crore in a Financial Year even if individual has filed ITR.

* As per Section 194N of Income Tax Act 1961, If a person withdrawing Cash has not
filed return of income for three previous years, Tax shall be deducted at the rate
of 2% on cash withdrawal exceeding Rs. 20 Lakhs and 5% on cash
withdrawal exceeding Rs. 1 Crore.
 Unsatisfactory Account
* Un-remunerative Accounts are those where the balance outstanding is not
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commensurate with the cost of administering the account.
 Dormant Account
A Savings as well as Current Account should be treated as Dormant if there are no
transactions in the account for over a period of 2 Years.
 Unclaimed Deposit
Any Bank Deposit / Amount remaining unclaimed for more than 10 Years, it can be
classified as Unclaimed Deposit.
 DEAF
* As per Section 26 A of Banking Regulation Act 1949, RBI constituted a fund named
Depositor Education & Awareness Fund - DEAF
* Banks have to transfer available balance in Unclaimed Account to RBI’s Depositor
Education & Awareness Fund.
 BSBDA
* Basic Savings Bank Deposit Account – BSBDA is a Zero Balance Savings
3
Account that takes care of our simple banking needs.
* The aim of introducing BSBDA is to delivery of financial services at affordable costs
to weaker sections of society.
* Under the scheme of Financial Inclusion initiated by Govt. of India, Banks have
been advised by RBI in 2012 to offer a BSBDA.
* BSBD Account replaced the earlier concept of No-Frills Account.
* RBI had introduced No-Frills Account concept in 2005 to provide basic banking
facilities to poor and promote Financial Inclusion.
 Features – BSBDA
* There is no requirement of any minimum balance.
* There will be no limit to the no. of deposits but maximum of four withdrawal
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transactions will be allowed in a month, including ATM withdrawals.
* Debit Card will be issued free of cost and No Annual Maintenance Charge - AMC will
be applied.
* BSBD Account Holders are not eligible for opening any other Savings Account in
that Bank.
* If BSBDA is opened on the basis of Simplified KYC, the accounts would additionally
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be treated as BSBDA-Small Account.
 Transaction Details – BSBD Account – Small
* Aggregate of all credits in a Financial Year should not exceed - Rs. 1 Lakh
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* Aggregate of all withdrawals and transfers in a month should not exceed – Rs.
10,000
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* Balance at any time should not exceed - Rs. 50,000
* BSBDA Small Account is valid for a period of 12 Months initially which may be
extended by another 12 months if the person provides proof of having applied for an
ee
Officially Valid Document.

* Foreign Remittances cannot be credited to BSBDA Small Account without completing
normal KYC formalities.
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 Current Account
* Current Account is specially designed for Business entities with an aim of performing
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trade related transactions smoothly.

* Current Account is also known as Business Bank Account.
* It is the flexible product for a Company or a Business entity.
* There are no restrictions on the no. of transactions in this kind of account.
* Usually, Current Account holder can perform unlimited transactions at free of cost.
* No interest is paid by banks on these accounts.
* An individual also can open Current Account.
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* Current Account holder enjoys the benefit of Overdraft facility from the bank for the
purpose of handling acute cash shortage situations.
 Cash Credit
* Cash Credit is a small type of loan and has a tenure of 1 Year.
* CC can be taken to meet Working Capital needs.
 Overdraft
* An Overdraft is an extension of credit from a Bank that is granted when balance in
an account reaches Zero.
* Overdraft allows the customer to continue paying bills even when there is insufficient
money in the customer’s account.
 CASA Ratio
* Current Account Savings Account - CASA Deposits are very important performance
indicators for the Banks.
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* The rate of interest paid to the customers by the bank on CASA Deposits are
very low.
* CASA Ratio is the proportion of Current Account and Savings Account Deposits
in the total deposits of the Bank.
* CASA Ratio = CASA Deposits / Total Deposits
* A high CASA Ratio indicates the bank is accessing large portion of Low Cost
Funds which improves its profitability.
* A low CASA Ratio means the bank depends heavily on Costlier Deposits like FD
& RD which can hurt its margins.
 Term Deposits
* Term Deposit means a deposit received by the Bank for a fixed period.
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* In Term Deposits, the sum of money is kept for a fixed maturity and the depositor
is not allowed to withdraw deposited amount till the end of the maturity period.
 Fixed Deposit Account
* Deposits for 12 Months or more should be termed as Fixed Deposits.
* Deposits for less than 12 months should be termed as Short Deposits.
* Fixed Deposit is an investment instrument in which a lump-sum amount is
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deposited at an agreed rate of interest for a fixed period of time.
* Suppose a depositor wants to park his / her Lump sum surplus money for a
specific time period at an agreed interest rate with a view to earn higher interest
on his / her deposited money. This type of bank deposit classified as Fixed Deposit
product.
E
* No operations are allowed to be performed by the customer against the Fixed
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Deposit.
* Since the interest rate on the deposit is contractual, it cannot be altered even if
the interest rate fluctuates upward or downward during the period of deposit.
ee
* As Per the guidelines of RBI, Banks are allowed to accept FDs for the minimum
period of 7 Days&maximum period of 10 Years.
* Non-Banking Finance Companies – NBFCs are allowed to accept FDs for the
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minimum period of 1 Year&maximum period of5 Years.
* Fixed Deposit Instrument is not negotiable.
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* Banks prepay fixed deposits, at their discretion to accommodate customer’s

request for meeting emergent expenses.
* Interest Income generated up to Rs. 40,000 in a Financial Year on Fixed Deposit
Account is exempted from Income Tax.
* Fixed Deposit maturity proceeds exceeding Rs. 20,000 not to be paid in cash.
* Repayment of larger deposits (i.e. more than Rs. 20,000) has to be either by A/c
payee crossed Cheque in the name of the customer or by credit to the Saving
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Bank A/c or Current A/c of the customer.
* Banks in India normally offers additional interest rate is allowed on retail
domestic term deposits of Senior Citizens&its Employees.
 Overdue Deposit
A Term Deposit, which is not either closed or renewed for a further period on the
date of maturity, automatically becomes an Overdue Deposit.
Overdue Deposit is treated as Demand Deposit.
 Cash Certificate
* Cash Certificate is a Term Deposit product where interest is compounded
quarterly and paid on maturity.
* It is suited for a depositor who does not require interest to be paid every month/
quarter etc.
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 Tax Saving Fixed Deposit
* Tax Saving Fixed Deposit is one of the tax saving instruments where one can
invest to save tax under Section 80C of the Income Tax Act 1961.
* Only Individuals and HUFs can invest in Tax Saving Fixed Deposit scheme.
* Tax Saving FD can be placed with a maximum amount of Rs. 1.5 Lakh in the
Financial Year.
* These Deposits have a lock-in period of 5 Years.
* Premature withdrawals and loan against these FD’s are not allowed.
 Bulk Deposits
* Related to Term Deposit Account, Single Deposit of Rs. 2 Crore and more to
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qualify as Bulk Deposits.
* Bulk Deposits, that is amounts of over Rs. 2 Crore, usually earn a marginally
higher interest rate than on smaller-amount fixed deposits for similar maturity
periods
 Recurring Deposit Account
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* In Recurring Deposit Account, a certain amount of savings are required to be
compulsorily deposited at specific time intervals for a particular time period.
* RD Accounts are intended to inculcate regular & compulsory savings habit
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among the low / middle income group of people.
d
* Usually Banks are accepting RDs for a minimum period of 6 Months&maximum
period of 10 Years.
 Flexi Deposit
ee
* Flexi Deposit are deposits where the inputs are in monthly instalments but the
monthly instalments may vary up to or within a certain limit.
* It is variant of Recurring Deposit with the facility of depositing variable deposit
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instead of a fixed instalment.
 Sweep Account
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* Sweep Account is an unique deposit product. It has combined features of Savings

Account & Fixed Deposit Account.
* In Sweep Account, account holder decides the minimum amount to be kept in
his/her Savings Account.
* Any excess over it automatically gets transferred to a Fixed Deposit Account.
* Whenever cash is needed, the bank can just sweep in funds to the Savings
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Account.
 Non-Resident Business
* Non-Resident External - NRE Account
* Non-Resident Ordinary - NRO Account
* Foreign Currency Non Resident - FCNR Deposit
 NRE Account
* Persons of Indian Origin & Non Resident Indians are permitted to open & maintain
NRE Account with a bank.
* Purpose of operating NRE Account is to park NRIs / PIOs overseas earnings
remitted to India and converted to Rs.
* This type of account may be maintained in any form i.e. Savings, Current, FD&
RD Account.
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* Banks have been given freedom to determine interest rates on NRE Accounts.
* Account can be opened either individually or jointly with other NRIs / PIOs.
* NRE Account can be jointly held with another NRI but not with resident Indian.
* Interest Income on deposited money in NRE Account is exempt from Income Tax.
* Balances in NRE Account is freely repatriable.
 NRO Account
* Persons of Indian Origin & Non-Resident Indians can open NRO Account with a
bank.
* The purpose of operating NRO Account is to park their India based earnings
such as Rent, Dividends & Pension etc.
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* NRO account has restricted repatriability.
* The interest earned in NRO account and credit balances are subject to respective
income tax bracket.
* NRO account can be held with NRI as well as resident Indian (close relative).
 FCNR Account
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* FCNR Account is a term deposit account that can be maintained by NRIs and
PIOs in foreign currency.
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* FCNR Account is an excellent investment option for NRIs looking to retain their
money in foreign currency and earn good returns on foreign currency earnings.
d
* It can only be maintained in the form of Fixed Deposit for maturities of minimum1
Year to maximum 5 Years.
* Principal along with interest freely transferrable in the currency of depositor’s
ee
choice.
* Principal & Interest earned is not taxable in India
* No Exchange Risk as the deposit is maintained in Foreign Currency.
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* Funds of FCNR Deposits are fully repatriable.
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 RFC Account
* Persons of Indian origin or Non-Resident Indians returning to settle permanently
in India can open a Resident Foreign Currency Account.
* RFC A/c especially useful for Non-Resident Indians who return to India and
would like to bring back foreign currency from their overseas bank accounts.
 EEFC Account
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* Exchange Earners’ Foreign Currency - EEFC Account is an account maintained
in foreign currency with an Authorized Dealer i.e. a bank dealing in foreign
exchange.
* An EEFC Account can be held only in the form of a Current Account.
 Foreign Currency Accounts
* NOSTRO Account
* VOSTRO Account
* LORO Account
 NOSTRO
A Bank Account held by an Indian originated bank with a Foreign Bank is known
as NOSTRO Account.
7
 VOSTRO
A Bank Account held by a foreign bank with an Indian originated banks is known
as VOSTRO Account.
 LORO Account
* An account that one bank holds for another bank, usually one in another country.
* If a Domestic Bank who possess a bank account in Foreign Bank clear the due
of foreign trade on the behalf of third party banks then this is called LORO Account.
 Nomination
* Nomination facility is an ideal tool to mitigate hardships of common persons in
settlement of claims in the event of death of the Bank account holder.
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* This facility is available for all deposit accounts and safe deposit vaults.
* Nomination facility is a voluntary option.
* Nomination is available for accounts opened in individual capacity.
* It can be done in favour of one person only.
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* Nomination can be made, cancelled or varied by the account holder anytime
during his/her life time.
 KVP
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* Kisan Vikas Patra scheme was launched in 1988 as a Small Saving Certificate
scheme.
d
* Its main objective was to encourage people to adopt long-term financial
discipline.
* Any Individual can invest in KVP from any branch of India Post Offices and
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selected Bank Branches.

* Individuals can deposit money into this scheme with as little as Rs. 1,000.
* KVPs are available in Denominations
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Rs.1,000, Rs.5,000, Rs.10,000 &Rs.50,000
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* Minimum Limit - Rs.1,000&No Maximum Limit for purchase of KVPs.

* Premature withdrawal option can be exercised after 2 Years and 6 Months i.e.
30 Months.
* Deposits are exempt from TDS at the time of withdrawal.
* Interest Rate applicable on KVPs is as notified by Government of India.
 NSC
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* National Savings Certificate scheme encourages Savings habit among individuals
and also provides Tax benefit to them.
* NSCs can be availed at any Post Office.
* A subscriber can Deposit Minimum amount of Rs. 100 and there is No Maximum
limit for Deposit in an NSC Account.
* Maturity period of NSCs is 5 Years.
* Rate of interest is notified by the Government of India from time to time on
Quarterly basis.
* No TDS on NSCs at the time of withdrawal.
***
8
DIFFERENT TYPES OF BANK DEPOSIT PRODUCTS DAY (PART – 3)

1. As per RBI guidelines, Banks are required to update Know Your Customer - KYC
data once in how many years for High Risk customers?
2. BSBDA is a zero balance Savings Bank Account that takes care of our simple
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banking needs. What does letter first B represents in an acronym BSBDA?
1) Bank 2) Business 3) Balance 4) Basic 5) Benefit
3. With an objective to earn a higher interest rate, a depositor want to keep his
surplus money in a Bank on lump sum basis for a longer time frame. Which
among the following bank deposit product is suitable for his / her requirements?
ha
1) Basic Savings Bank Deposit Account 2) Current Account
3) Flexi Account 4) Recurring Deposit Account
5) Fixed Deposit Account
4. PML Act was enacted to combat money laundering activities in India. In which
2) 2002
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year Prevention of Money Laundering Act was enacted?
1) 1994 3) 2006 4) 1996 5) 2009
d
5. Know Your Customer - KYC norms has been implemented as per directives of
___________
ee
1) Indian Bankers Association 2) Reserve Bank of India

3) Financial Intelligence Unit - IND
4) Banking Codes & Standards Board of India 5) Banking Ombudsman
6. The nature of the relationship between Bank and Customer is basically ________
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1) Voluntary 2) Incidental 3) Obligatory
4) Contractual 5) Transactional
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7. Which among the following category depositors normally avail the benefit of
additional interest rate on retail domestic term deposits in a Bank?
1) Staff member of a Bank 2) Persons with Disability 3) Minor
4) Senior Citizen 5.Widow Women
1). 2, 3 & 4 2) 1 & 4 3) 1 & 2 4) 3, 4 & 5 5) 1 & 3
8. Which among the following set of Bank Deposit products are allowed to be operated
by Cheques?
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1) Both Savings and FD Accounts 2) Both Current & RD Accounts
3) Both Savings and RD Accounts
4) Both Savings and Current Accounts 5) Both Current and FD Accounts
9. Which of the following statement (s) is/are incorrect in the context of BSBDA-
Small Account?
1) Total credits in BSBDA - Small Account should not exceed Rs. 1 lakh in a Year.
2) Maximum balance in the BSBDA - Small Account should not exceed Rs. 50,000
at any time.
3) Remittances from abroad cannot be credited to BSBDA - Small Accounts without
completing normal KYC formalities.
4) The total of debits by way of cash withdrawals and transfers will not exceed
Rs. 20,000 in a month in BSBDA - Small Account.
5) All are correct
1
10. In India, a Cheque remains valid for payment for ______________ from the date of
issue.
1) 1 Year 2) 6 Months 3) 1 Month 4) 3 Months 5) 9 Months
11. What is the maximum time limit for the banks to settle the claims in respect of a
deceased depositors and release payments to the nominee?
1) 3 Days 2) 7 Days 3) 10 Days 4) 15 Days 5) 30 Days
12. At present, the Rate of Interest on Savings Bank Account is fixed by Individual
Banks. In which year RBI deregulated Interest Rates on Savings Bank Account?
1) 2009 2) 2006 3) 2011 4) 2013 5) 2003
13. A Savings as well as Current Account shall be classified as Dormant, If an account
is inoperative for over a period of ______ months.
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1) 12 Months 2) 24 Months 3) 6 Months 4) 18 Months 5) 9 Months
14. Money Laundering refers to _______
1) Borrowers’ ability to access funds at low interest rates.
2) Money that is hard to obtain because of abnormally high interest rate.
3) The process of making money earned from criminal activity appear to have a
legitimate source.
ha
4) An investment made by a firm or individual in one country into business
interests located in another country.
5) The inability of a company to pay off its debts.
15.
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What is the maximum period for which Domestic Term Deposits are normally
accepted by Banking entities in India?
d
16. As directed by RBI, Banks have remitted to the Depositor Education and Awareness
Fund - DEAF, the credit balance in the Deposit Accounts which have not been
ee
operated or any amount remaining unclaimed for a period of ________ Years

17. __________ Facility is an ideal tool to mitigate hardships of common persons in
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settlement of claims in the event of death of the Bank account holder.
1) Power of Attorney 2) Legal Heir 3) Indemnity
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4) Nomination 5) Guarantee
18. ________ is a financial product provided by Banks or NBFCs which provides investors
a higher rate of interest than a regular Savings Account.
1) Current Account 2) BSBD Account
3) Unremunerative Account 4) Dormant Account
19. Which among the following bank deposit products designed to inculcate a regular
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and compulsory saving habit among the public?
1) Savings Bank Account 2) Fixed Deposit Account
3) Recurring Deposit Account 4) Current Account
5) Basic Savings Bank Deposit Account
20. What is the maximum balance amount that is eligible for earning interest in a
Saving Bank Account?
1) Rs. 5 lakh 2) Rs. 2 lakh 3) Rs. 10 lakh
4) Rs. 1 lakh 5) There is no such limit defined
21. The relationship between Bank & Customer becomes that of ________, when
customer has deposited money in the bank by way of Savings, Current, FD& RD
Accounts.
1) Creditor – Debtor 2) Trustee – Creditor
3) Debtor – Creditor 4) Beneficiary – Agent
5) Debtor – Bailee
2
22. With effective from 1st April, 2010, interest on deposited money in Savings Bank
Account is being paid on which methodology as per RBI directives?
1) Least available balance during the month
2) Average balance during the month
3). Least available balance in an account from 10th to the last day of month
4) Daily product basis
5) Average balance during the quarter
23. Which among the following deposit product is a form of non-interest bearing demand
deposit?
1) Savings Bank Account 2) Recurring Deposit Account
3) Current Account 4) BSBD Account
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24. Which of the following is the purpose of introducing Know Your Customer - KYC
Guidelines?
1) To ensure that money deposited in banks has come from genuine sources
2) To bring more and more people under the formal banking system
3) To reduce Non-Performing Assets of a banking firm
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4) To increase the profitability of a banking entity
5) To Cross-sell financial services by a Bank to its customers
25. As per the present scheme for payment of government pension, pensioners are
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required to furnish a life certificate in the month of _________ every year to the
bank concerned for continued receipt of pension without interruption.
d
1) January 2) November 3) July 4) April 5) March
26. Know Your Customer - KYC norms issued by RBI helps in ____________
1) Customer identification while opening an account
ee
2) Adopting Anti-Money Laundering measures

3) Identifying Suspicious Transactions
4) All of the above 5) Only A & C
C
27. As per Reserve Bank of India guidelines, Differential Interest Rate shall be offered
by Banking entities only on ________
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1) BSBD Account 2) Bulk Deposits 3) Savings Bank Account

4) Flexi Deposits 5) Current Account
28. What is the initial minimum deposit required while opening Basic Savings Bank
Deposit Account - BSBDA?
1) Rs. 1000 2) Rs. 100 3) Nil 4) Rs. 2000 5) Rs. 500
29. Which entity is the responsible for providing insurance facility for all bank deposits
(Demand & Time Deposits) in India?
C
1) LIC 2) GIC 3) ECGC 4) DICGC 5) RBI
30. Which of the following statement (s) is incorrect with respect to Savings Bank
Account?
1) There are no restrictions imposed with regard to age or income of an individual
at the time of opening a Savings Bank Account.
2) Bank found that one of their customers is incapable of operating the account
due to mental incapacity (Lunatic) the operation in such customer’s account shall
be immediately stopped.
3) In Savings Bank Account, Nomination facility is a mandatory option & it can be
done in favour of one person only.
4) As per the guidelines issued by RBI, the Savings Bank account becomes Dormant
if the customer does not initiate transactions for a continuous period of 1 Year.
1) 1 & 3 only 2) 3 only 3) 2 & 3 only 4) 2 & 4 only 5) 3 & 4 only
3
31. If there has been no financial activity for over a period of 24 months, the Bank
account can be treated as ____________
1) Doubtful Account 2) Stale Account 3) Dormant Account
4) Loss Account 5) No-Frill Account
32. An individual can have how many number of Basic Savings Bank Deposit Accounts
– BSBDA in one bank?
1) Only one 2) Only two 3) Only three
4) Only four 5) Any number of BSBD Accounts
33. Account holders have to maintain an QAB / MAB for their accounts in certain
banks. In the term QAB / MAB, letter A stands for?
1) Average 2) Annual 3) Account 4) Adequate 5) Adjusted
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34. What is lock-in period for a Tax Saver Fixed Deposit in a Bank?
35. As per RBI guidelines, the maximum amount of penalty that banks can levy for
non-maintenance of minimum balance in inoperative accounts of customers is
__________
1) Rs. 100 per year 2) Rs. 100 per half year
3) Rs. 100 per quarter
ha 4) Rs. 100 per month 5) Not to levy any penalty
36. If a Term Deposit matures and proceeds are unpaid, the amount left unclaimed
with the bank shall attract rate of interest as applicable to _________
1) Savings Bank Account
3) BSBD Account
E 2) Recurring Deposit Account

4) Current Account
d
5) No Interest paid on Overdue Deposits
37. What is the term used for an investment product through which Banks accept a
lump-sum amount for a declared period and pay back the sum at the maturity
ee
along with the interest?

1) Savings Deposit 2) Current Deposit
3) Demand Deposit 4) Floating Deposit
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5) Fixed Deposit
38. Under what circumstances, Bank can close a Current Account of a partnership
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firm?
1) Death of partner 2) Retirement of partner
3) Insolvency of a partner 4) Only A & B
5) All A, B & C
39. You are looking for a super safe place to stash your emergency savings. You turn
to a __________
1) Gold 2) A company share 3) An equity mutual fund
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4) High yield Savings Bank Account 5) Unit Linked Insurance Plan
40. Mr. A is saving money to buy a car in the next 3 years. What’s the best way for
him to save?
1) Invest in Shares
2) Deposit money in a high interest Recurring Deposit Account
3) Invest in Gold Exchange Traded Fund
4) Contributing his money in an equity oriented Mutual Fund
5) Subscribing a Life Insurance policy
41. If you stashed Rs. 10,000 in your piggy bank now, what would it be worth in 5
years, taking inflation into account?
1) More than Rs. 10000 2) Rs. 10000
3) Less than Rs. 10000
4) May be More than Rs. 10000 or Less than Rs. 10000 5) Can’t say
4
42. Which of the following account is maintained by businessmen for their daily
operations?
1) Savings Bank Account 2) Fixed Deposit Account
3) Recurring Deposit Account 4) Current Account
5) No- Frill Account
43. Looking at a commercial banks’ balance sheet, we observe the customer deposits
as a/an __________ item.
1) Asset 2) Liability 3) Equity
4) Accounts receivable 5) Investments
44. As per Prevention of Money Laundering Act 2002, Banks are required to maintain
record of transactions for ________
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1) 2 Years 2) 5 Years 3) 10 Years 4) 1 Year 5) 3 Years
45. Know Your Customer norms have been issued by RBI under the provisions of
________
1) Sec 35 A of Reserve Bank of India Act 1934
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2) Sec 35 A of Banking Regulation Act 1949
3) Sec 35 A of Negotiable Instrument Act 1881
4) Sec 35 A of Prevention of Money Laundering Act 2002
5) Sec 35 A of Foreign Exchange Management Act 2002
46.
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What are the benefits Customer will get while saving our surplus money in Savings
d
Bank Account in a Bank?
1. Customer will get safe environment for his / her deposited money
2. Bank will pay reasonable interest on customer’s deposited money
ee
3. Customer will get the benefit of Liquidity i.e. at any point of time customer
can convert that deposit in to cash
1) 1 & 2 Only 2) 1 & 3 Only 3) 2 & 3 Only
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4) All 1, 2 & 3 5) None of the above
47. Which among the following is incorrect statement in the context of Fixed Deposit
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Account?
1) In Fixed Deposit Account, interest rate on the deposit is contractual, it cannot
be altered even if the interest rate fluctuates upward or downward during the
period of deposit.
2) In this type of deposit account, No operations are allowed to be performed by
the customer against the deposit.
3) C. As Per the directives of RBI, Banks are allowed to accept FDs for the minimum
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period of 7 Days & maximum period of 10 Years
4) Fixed Deposit product is not negotiable
5) Fixed Deposit Account is volatile in nature
48. Identify an incorrect statement in the context of Demand Deposit Products of a
Bank?
1) Demand Deposit Accounts includes Savings Bank Account & Current Account
2) Demand Deposits are volatile in nature
3) Customers of Demand Deposit products can avail Cheque Book & Debit Card
facilities.
4) In Demand Deposits, Banks offer nominal interest on the balance of Savings
Bank Account but No interest paid on available balance in Current Account.
5
49. Choose the false statement among the following
1) A person can open a Savings Bank Account for his/her minor son/daughter
2) An individual can open Current Account
3) Nomination facility is available for accounts opened in individual capacity.
4) No operations are allowed to be performed by the customer against the Fixed
Deposit.
5) Minors above the age of 12 Years may be allowed to open and operate Savings
Bank Account independently.
50. Bulk Deposit means Single Rupee Term Deposits of Rs. ________ Lakhs and above
for Regional Rural Banks.
r’s
1) Rs. 10 Lakh 2) Rs. 50 Lakh 3) Rs. 30 Lakh 4) Rs. 15 Lakh 5) Rs. 25 Lakh
51. The relationship of a Bank – Customer can be terminated by the process of law for
which among the following reason(s)?
1) Death of a customer
2) Bankruptcy of a customer / liquidation of a company
3) Garnishee order
ha 4) Insanity of the customer 5) Any of the above
52. Which among the following statements Incorrect in the context of Tax Saver Fixed
Deposit product?
E
1) Tax Saver Fixed Deposit provides investor can claim a deduction of a maximum
of Rs. 1.5 Lakh in a Financial Year
d
2) This instrument has lock in period of 5 Years
3) Interest earned on this instrument is taxable
ee
4) Premature withdrawal is available

5) Tax Saver FD instrument holder cannot get loan against it.
53. Bulk Deposit refers to Single Rupee Term Deposits of Rs. ________ Crore and
C
above for Schedule Commercial Banks (excluding RRBs) & SFBs.
1) Rs. 1 Core 2) Rs. 5 Crore 3) Rs. 3 Crore 4) Rs. 2 Crore 5) Rs. 10 Crore
Sr
54. Which among the following is not included in different stages of Money Laundering?
1) Layering 2) Whistleblowing 3) Integration
4) Placement 5) None of the above
55. Related to Banking Industry, What does letter I represents in an acronym CIF?
1) Income 2) Instrument 3) Identification 4) Interface 5) Information
56. Before tagging account as a Partial Freeze Account, Banks are required to give
C
due notice of ____ months, followed by the reminder of ____ months.
1) 3 Months, 1 Month 2) 6 Months, 3 Months
3) 3 Months, 3 Months 4) 1 Month, 1 Month
5) 9 Months, 3 Months
57. DEAF is a fund introduced by RBI in 2014 and it is introduced for the unclaimed
funds of depositors. What does letter A represents in an acronym DEAF?
1) Account 2) Automated 3) Agreement 4) Awareness 5) Accepted
58. Every Bank and financial institution shall furnish STR to Financial Intelligence
Unit – FIU.
What does letter T denotes in an acronym STR?
1) Transfer 2) Transaction 3) Taxation 4) Trade 5) Tribunal
6
59. Related to Banking Industry, which among the following is the unique feature of
a product named BSBDA?
1) Extending Life Insurance product to disadvanted sections of society at a lower
premium rates.
2) Delivering low cost credit to below poverty line population in the country to
improve their standard of living
3) Giving interest free credit support to Micro, Small & Medium Enterprises in the
country
4) Promoting various financial products such as Pension Fund, Insurance and
Mutual Fund etc. to unorganised sector workers
5) Offering Zero Balance Savings Bank Account to weaker sections in the country
r’s
60. As per RBI guidelines, Banks are required to update Know Your Customer - KYC
data once in how many Years for High / Medium / Low Risk Customers
respectively?
1) 1 Year / 5 Years / 10 Years 2) 2 Years / 5 Years / 10 Years
3) 2 Years / 8 Years / 10 Years 4) 5 Years/ 8 Years / 10 Years
5) 3 Years / 5 Years/ 10 Years
61.
ha
________ facility allows us to enjoy the high interest rates that come with a fixed
deposit and the liquidity of a savings bank account.
1) Moratorium 2) Restructuring 3) Reconstruction
62.
4) Sweep – in
E 5) One Time Settlement

As per RBI Guidelines, The banks now allow minors above ______ years to
d
independently open and operate savings bank accounts.
1) 12 years 2) 14 years 3) 18 years 4) 10 years 5) 21 years
63. NRE Deposit A/c stands for __________
ee
1) Non Resident External Deposit A/c

2) Non Resident Extra Deposit A/c
3) Non Resident Exchange Deposit A/c
C
4) Non Refundable External Deposit A/c
5) Non Resident Extended Deposit A/c
Sr
64. Related to Banking Industry, What does letter C represents in an acronym FCNR
Account?
1) Credit 2) Capital 3) Currency 4) Cash 5) Clearing
65. In which of the following Non-Resident Accounts is Tax Deducted at Source - TDS
applicable?
1) FCNR Account 2) NRE Account 3) NRO Account
4) Only A & B 5) Only B & C
C
66. Foreign Currency Non Resident - FCNR Account can only be maintained in the
form of Term Deposit for maturities of minimum ________ Year(s) to maximum
_______ Years
1) 1 Year to 3 Years 2) 2 Years to 5 Years
3) 1 Year to 5 Years 4) 1 Year to 10 Years
5) 3 Years to 5 Years
67. Related to Banking Industry, What does letter F denoted in an acronym EEFC
Account?
1) Fixed 2) Facility 3) Foreign 4) Financial 5) Funding
68. As per PMLA, Banks are required to submit to Financial Intelligence Unit – India,
statement on suspicious transactions for transactions of any amount and within
________ of arriving at conclusion.
1) 3 Days 2) 15 Days 3) 10 Days 4) 7 Days 5) 30 Days
7
69. Which among the following group of customers will be categorized as Low Risk?
1) A partnership firm 2) A salaried employee of a PSU
3) A politically exposed person 4) MSME in a Food Processing Sector
5) Corporate entity in Education Sector
70. In Recurring Deposit Account, when are the instalments to be paid?
1) In the beginning of the month
2) Before the first week of a particular month
3) Any time during the first and last date of the month
4) Any time between the first and tenth date of a particular month
5) Before the last week of the month
71. An NRO Account cannot be opened by which of the following?
1) Non Resident Indian 2) A Person of Indian Origin
r’s
3) A Foreign National on short visit to India 4) A Resident Indian
72. The Forex fluctuation risk shall be borne by Bank in which account?
1) NRO Account 2) NRE Account 3) FCNR Account
4) Only A & B 5) All of the above
ha
Important Interview Questions
• Why should we save money? How can you encourage people to save money?
• Tell us something about Fixed Deposit & Recurring Deposit products.Which is
better option?
•
E
What does Unclaimed Deposit means? What happens to our Unclaimed Bank
Deposits?
d
• Which category depositors are eligible to avail additional interest on Terms Deposits
in a Bank?
• What is KYC?Why it is required?
ee
• Generally Banks will accept money from the Depositor in the form of Demand
Deposits & Time Deposits. Why these kind of deposits existed?
• What is meant by BSBDA? How this type of account different from normal Savings
Bank Account?
C
• How can we claim balance held in deceased person’s Bank Account?
• What does meant by Bulk Deposit?
Sr
• What is Money Laundering?What kind of measures taken by RBI to Prevent Money

Laundering Activities?
• Sweep Account! How a depositor get benefitted from this kind of product?
• If the account holder not has been registered Nomination facility, what is the
procedure to claim available balance in deceased person’s Bank Account?
• What do you know about Partial Freezing of Bank Account?
• When a Bank Account becomes Dormant?
• In what way NRE Account is different from NRO Account?
C
• What is FCNR Account? What are the salient features of this particular product?
• Tell us something about banking product named Current Account?
• What does Overdue Deposit refers to?
KEY
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11.4 12.3 13.2 14.3 15.4 16.4 17.4 18.5 19.3 20.5
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31.3 32.1 33.1 34.5 35.5 36.1 37.5 38.5 39.4 40.2
41.3 42.4 43.2 44.2 45.2 46.4 47.5 48.5 49.5 50.4
51.5 52.4 53.4 54.2 55.5 56.3 57.4 58.2 59.5 60.3
61.4 62.4 63.1 64.3 65.3 66.3 67.3 68.4 69.2 70.3
71.4 72.3
8
DIFFERENT TYPES OF BANKING ACTIVITIES
 Income of Bank can be classified as

* Fund Based Income (aka Interest Income)
* Non-Fund Based Income (aka Fee Based Income)
 Fund Based Income
The revenue that banks get out of their lending activities is known as Fund Based
r’s
Income.It is also known as Interest Income.
 Fund Based Products - Housing Loan, Credit Card, Personal Loan, Overdraft,
Vehicle Loan, Cash Credit, Education Loan, Crop Loan, Business Loan etc.
 Non-Fund Based Income
Non-Fund Based Income is banks’ revenue derived primarily from Fees / Charges

ha
/ Penalties. It is also known as Non-Interest Income / Fee Based Income.
Non- Fund Based Products - Bank Guarantee, Letter of Credit, Locker Facility,
Fund Transfers, Bill Payments, Demat Account & Stock Broking Services,
Distribution of Mutual Fund Schemes, Distribution of Insurance Products,
E
Distribution of Pension Fund Products etc.
d
Cross Selling
Cross-Selling is the practice of selling an additional product or service to an
existing customer.
ee
 Mis-Selling
Mis-Selling refers to selling of a product / service to a customer on the basis of
misleading advice.
 Up-Selling
C
Up-Selling is a sales technique where a seller induces the customer to purchase
more expensive items, upgraded products.
Sr
 Retail Banking
* Retail Banking refers to the provision of services by a Banking entity to an
individual customers.
* Retail Banking is also known as Consumer Banking or Personal Banking.
 Characteristics of Retail Banking System
* Deals with Individual Customers
* Huge customer base
C
* Large number of transactions will be executed
* Nominal value transactions will be taken place
* Higher interest spread for banking entities
 Wholesale Banking
* Doing Banking business with Corporate / Industrial entities is called Wholesale
Banking.
* Wholesale Banking is also termed as Corporate Banking.\
 Characteristics of Wholesale Banking System
* Deals with Business entities
* Limited customer base
* Large number of transactions will be executed
* High value transactions will be taken place
* Low interest spread for banking entities
1
 Para Banking
* Banking entities can undertake certain eligible Financial Services either
departmentally or by setting up subsidiaries is called Para Banking.
* The activities which are done by a Banking entity apart from its normal day to
day business transactions are called Para Banking activities.
 Universal Banking
* The provision of a wide range of Financial Services by a Bank, under one roof is
called Universal Banking.
* It is a financial supermarket where all financial products are provided under one
roof.
* Universal Banking is also known as Conglomerate Banking.
r’s
* Under Universal Banking System banking entities deliver various financial services
to its customers such as Banking Products, Insurance Products, Capital Market
Products and Pension Fund Products
 Characteristics of Universal Banking System
* Profitable Diversification by using existing infrastructure
* Generate Non-Fund Based Income
ha
* One-stop Shopping of various Financial Services
* Banking entity can protect its customer base
 Narrow Banking
E
* Narrow Banking, which involves investing large portion of the mobilised deposits in
Risk-free Assets like Govt. Securities.
d
* Banking entities invest major portion of their accepted deposits in Govt. Secs.
* So Narrow Banking entities carry virtually no Credit Risk.
* Narrow Banking is also called Safe Banking.
ee
* As per RBI Guidelines, Payments Banks are required to invest at least 75% of their
mobilised deposits in Government Securities.So Payments Banks can be considered
as an example for Narrow Banking entities.
C
 Core Banking
* Core Banking refers to a centralized system established by a Bank which allows its
Sr
customers to handle their basic banking transactions irrespective of the Bank’s Branch.
* It is a Banking Service provided by a group of networked bank branches where
customer may access his/her bank account & perform basic banking transactions
from any of the member branch offices.
 Offshore Banking
* Offshore Banking refers to the deposit of funds by a company or an individual in a
Bank that is located outside of their national residence.
C
 Reasons to perform Offshore Banking Transactions
* To Dilute Political Risk
* To generate High Interest Rate
* To Diversify Exchange Risk
* Prefer Sound Banking System / Banking entity
 Investment Banking
* An Investment Banking entity is a special type of financial institution that helps
Governments & Companies access Securities Markets to raise capital for expansion
or other needs.
* Investment Banking entities involves advising companies on Mergers and Acquisitions.
* Investment Banking is also known as Merchant Banking.
 Unit Banking
* Unit Banking is a system of banking wherein a bank operates in a limited area,
does not open any branches in other locations.
2
* Unit Banking refers to a single banking outlet that only serves a local community.
* This type of banking system is originated and developed in USA.
* Unit Banking is also termed as Localized Banking.
 Branch Banking
* Branch Banking is a system of banking where a relatively Commercial Bank
undertakes banking activities with a network of branches.
 Group Banking
* Group Banking is the system in which two or more independently incorporated
banks are brought under the control of a holding company.
* Group Banking is offered by banks to incentivize a whole group of people, like
r’s
employees of a company, to have a relationship with the banking institution.
 Group Banking
* Increase in potential customer base
* Scope for Cross Sell Bank’s Products & Services
 Islamic Banking
ha
* Helps in Increasing Fund & Non-Fund Based Income
* Islamic Banking is a form of banking based on Islamic Principles.
E
* Collecting interest is not permitted under Shariah Law.
* It is a form of banking that rules out receipt and payment of interest.
d
* Islamic Banking Institutions make profits through investments.
* Income arising out of lending activities is called Interest, where as Income
ee
generated from Investment activities called Profit.

* Islamic Banking is also known as Interest- free Banking / Shariah Banking
 Shadow Banking
C
* Shadow Banking refers to the provision of credit by financial entities that are
not regulated by Central Banking Institution i.e. RBI.
Sr
* These entities typically do not have Banking License, they do not mobilize deposits
as Banks.
* Shadow Banking Institutions are typically intermediaries between Investors
and Borrowers.
 Ethical Banking
* Ethical Banking is a banking activity concerned with the Social & Environmental
C
impacts of Bank’s investments & loans.
* Ethical Banking is also called as Social Banking, Civic Banking or Responsible
Banking.
 Virtual Banking
* Bank that offer services exclusively over the Internet or Mobile App is known as
Virtual Banking.
* It is a banking activity that offers financial services through electronic channels.
* All services of Virtual Banking entities can be performed online.
* Virtual Banking is also known as Direct Banking.
 Digital Banking
* Digital Banking refers to automated delivery of traditional banking products and
services directly to customers through various electronic channels.
3
 Brick & Mortar Banking
* Brick and Mortar Banking means where a customer could directly approaches a
bank branch to avail a Banking Service.
 Premier Banking
* Premier Banking refers to an exclusive banking and financial service that is
personalized to cater to the needs of High Net-worth Individuals.
 Inclusive Banking
* Inclusive Banking is the delivery of Financial Services at affordable cost to
sections of disadvantaged and low-income segments of society.
 Correspondent Banking
r’s
* Correspondent Banking is the provision of banking services by one bank to
another Bank.
 Niche Banking
* Niche Banking refers to specialized Banking entities designed to fulfil the needs
of a certain demographic segment of the population.
ha
* Niche Banking is also termed as Differentiated Banking.
 Doorstep Banking
* Doorstep Banking designed to save customers’ time & efforts while performing
Banking transactions.
E
d
* It offers services like Cash Pickup, Instrument Pickup, Delivery of Cash and
Demand Drafts.
 Open Banking
ee
* Open Banking is the secure way to give Financial Services Providers access to
our financial information.
* It could help customers related to budget, find the best deals, and shop for the
C
financial services that suits them.
Sr
 Consortium Banking
* In Consortium Banking system, two or more lending institutions join together to
extend credit support to a single borrower.
***
C
4
DIFFERENT TYPES OF BANKING ACTIVITIES PART–2

1. Which among the following services provided by banking entities not treated as
Wholesale Banking product?
1) Working Capital Loan 2) Project Loan 3) Letter of Credit
4) Education Loan 5) Channel Finance
r’s
2. Which among the following banking system virtually carries no Credit Risk, because
these entities invest mobilized deposits in risk-free assets?
1) Inclusive Banking 2) Shadow Banking 3) Investment Banking
4) Narrow Banking 5) Consortium Banking
3. Unit Banking is a system of banking wherein a bank operates in a limited area.
ha
Unit Banking System originated in which nation?
1) Italy 2) France 3) China 4) USA 5) UK
4. Which among the following system allows customers to access their Bank Account
and perform basic transactions from any branch of the bank which was a part of
Centralized Network?
E
d
1) Premier Banking 2) Core Banking 3) Mainframe Banking
4) Narrow Banking 5) Para Banking
5. Which among the following system provides a variety of products and services
ee
aimed at corporate entities?

1) Narrow Banking 2) Consumer Banking 3) Open Banking
4) Wholesale Banking 5) Investment Banking
6. Which of the following is not considered one among the loans under Retail Banking
C
system?
1) Car Loan 2) Housing loan 3) Working Capital Loan
Sr
4) Personal Loan 5) Education Loan

7. Choose a Fund Based Product offered by a Banking entity among the following
1) Overdraft 2) Bill Payments 3) Demat Account
4) Locker Facility 5) Remittance Facility
8. A Banking System which has physical branches that customers can visit to perform
banking transactions is called ________
1) Virtual Banking 2) Shadow Banking 3) Narrow Banking
C
4) Core Banking 5) Brick & Mortar Banking
9. Which among the following Banking system characterized by sharing the profits
based on sharing the resources?
1) Premier Banking 2) Para Banking 3) Islamic Banking
4) Shadow Banking 5) Niche Banking
10. Niche Banking entities are Banks that have a specific purpose, focused on a
particular subset of demography. Niche Banking is also known as ________
1) Social Banking 2) Differentiated Banking 3) Offshore Banking
4) Conglomerate Banking 5) Para Banking
11. Banking System in India can be treated as __________
1) Unit Banking 2) Ethical Banking 3) Branch Banking
4) Virtual Banking 5) Open Banking
1
12. Wholesale Banking System designed to extend banking products & services
exclusively to ________
1) Individuals 2) Corporate / Industrial Entities
3) Weaker Section Segment of Society
4) Senior Citizens 5) Self Help Groups
13. What does Universal Banking refers to?
1) A financial supermarket where all financial products are provided under one
roof.
2) Banking entities invest major portion of their accepted deposits in G-Secs.
3) Two or more lending institutions join together to extend credit support to a
r’s
single borrower.
4) A Bank that offer services exclusively over the Internet or Mobile App
5) The provision of credit by financial entities that are not regulated by RBI.
14. What do you understand by Para Banking activities?
1) Delivering affordable banking services to weaker section segment of society
ha
2) Offering banking services by one bank to another Bank.
3) Eligible financial services delivered by banks
4) Services offered by banks to incentivize a whole group of people
E
d
15. Which among the following type of banking entities usually considered as an
example for Narrow Banking institutions?
1) Reginal Rural Banks 2) Urban Co-operative Banks 3) Public Sector Banks
ee
4) Payments Banks 5) Small Finance Banks

16. All services of which banking entity can be performed online?
1) Correspondent Banking 2) Direct Banking3) Shadow Banking
C
4) Para Banking 5) Ethical Banking
Sr
17. Which banking entity provides third-party access to financial information through
the use of Application Programming Interfaces – APIs?
1) Universal Banking 2) Social Banking
3) Virtual Banking
4) Open Banking 5) Shadow Banking
18. ________ is a system of banking where banks are allowed to provide a variety of
Financial Services like Banking, Insurance, Pension Fund & Securities Market
C
Products to its customers.
1) Investment Banking 2) Personal Banking 3) Core Banking
4) Universal Banking 5) Corporate Banking
19. Inclusive Banking refers to ________
1) A system of banking wherein a bank operates in a limited area
2) Banking entities invest major portion of their accepted deposits in G-Secs
3) Delivery of Financial Services at affordable cost to low-income segments of
society.
4) Banking activity concerned with the Social & Environmental impacts of Bank’s
investments & loans.
5) An exclusive banking and financial service that is personalized to cater to the
needs of High Net-worth Individuals.
2
20. Several lending institutions that group together to jointly finance a single borrower
is called ________
1) Ethical Banking 2) Consortium Banking 3) Wholesale Banking
4) Open Banking 5) Shadow Banking
21. Choose a Non-Fund Based Product offered by a Banking firm.
1) Debit Card 2) Overdraft 3) Working Capital Loan
4) Consumer Durable Loan 5) Cash Credit
22. The practice of selling an additional product or service to an existing customer is
called ________
1) Mis-Selling 2) Cross Selling 3) Target Selling4) Upselling 5 )
r’s
Open Selling
23. Safe Banking refers to ________
1) Extending credit support to borrowers having low credit scores
2) Granting advances to Small Business Units
3) Offering financial services through electronic channels.
ha
4) Invest depositors’ money in low risk instruments like G-Sec
5) Provision of banking services by one bank to another Bank.
24. Which among the following services provided by a banking entity not considered
as Para Banking Activity?
E
d
1) Distribution of Mutual Fund Products
2) Extending credit support Small & Marginal Farmers
ee
3) Promoting Insurance Products like PMJJBY & PMSBY

4) Offering Demat Account services
5) Furnishing Pension Fund Products like NPS & APY
C
25. A banking activity concerned with the Social & Environmental impacts of Bank’s
investments & loans is called ________
Sr
1) Core Banking 2) Inclusive Banking 3) Sustainable Banking

4) Offshore Banking 5) Conglomerate Banking
26. How is Islamic Banking different from Conventional Banking? Consider correct
statement(s) among following?
1. Islamic Banking is also known as Shariah Banking / Interest Free Banking
2. It prohibits charging of Interest (Riba) on loans.
C
3. Islamic Banking entities are not allowed to invest in Gambling, Alcohol related
activities.
1) Only 1 2) Only 1 & 3 3) Only 1 & 2 4) All 1, 2, & 3 5) Only 2 & 3
Interview Questions
 What do you know by Consortium Banking?
 What are the benefits of Consortium Finance?
 Retail Banking! What is it?
 What are the characteristics of Retail Banking System?
 Define Wholesale Banking.
3
 Mention some products / services delivered under this system.
 What is Virtual Banking?
 How do these banks work?
 What does Investment Banking refers to?
 What kind of functions performed by an Investment Banking entity?
 What is meant by Narrow Banking?
 How it is different from Conventional Banking concept?
 In what way Unit Banking is different from Branch Banking?
 Tell us something about Doorstep Banking.
r’s
 What is Open Banking?
 How a Bank Customer will get benefit from Open Banking Concept?
 What do you know about Islamic Banking System? Islamic Banking vs Conventional
Banking

ha
Define Correspondent Banking.
 What is the difference between Consumer Banking & Corporate Banking?
 Mention some Fund & Non-Fund Based Products offered by Banking entities.

E
What do you know about Shadow Banking concept?
d
 Offshore Banking ! Mention some reasons to perform Offshore Banking transactions.
 What do you know about Universal Banking?
ee
 How banking firms get benefit from this approach?

 What does meant by Cross Selling?
***
C
Sr
C
KEY
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11.3 12.2 13.1 14.3 15.4 16.2 17.4 18.4 19.3 20.2
21.1 22.2 23.4 24.2 25.3 26.4
4
DIFFERENT TYPES OF LOAN PRODUCTS (PART-1)

A Loan / Advance is a financial support extended by the banks to help their
customers in credit need.
 Demand Loan
* A Demand Loan is a borrowing option that allows the lender to recall the loan
on short notice.
r’s
* This arrangement allows the borrower to repay the loan at any time without an
early repayment penalty.
 Time Loan
* The entire amount of the loan (including interest) which is paid at a future
specified data.
 Installment Loan
ha
*For each installment payment, the borrower repays a portion of the principal
borrowed and also pays interest on the loan.
* Collateral is an asset that a lender accepts as security for extending a loan.
E
* Bank tend to safeguard their Loans & Advances by taking different kinds of
collateral.
d
 Modes of Charging Securities
* Pledge
ee
* Hypothecation
* Mortgage
* Assignment
* Lien
C
* Set-Off
* Appropriation
Sr
 Pledge
* Pledge means bailment of goods for purpose of providing security for payment of
loan.
* Bailment - an act of delivering goods without transfer of ownership
* The ownership of the collateral is held by the Borrower (Customer), but the
goods must be placed in the possession of the Lender (Bank).
* This securitization method applicable on Gold Loans, Loans against Goods,
C
Shares & Fixed Deposits etc.
 Hypothecation
* Hypothecation is described as a transaction whereby money is borrowed by the
customer on the security of the movable property without transferring either the
property or the possession to the Lender.
* Hypothecation differs from pledge because in this method, goods remain with
the possession of the borrower.
* This securitization method used in loans taken out for Purchase of Automobile,
Plant Machinery etc.
 Mortgage
* Mortgage is a transfer of interest in immovable property to avail a loan.
* If Borrower (Customer) stops paying the Equated Monthly Instalments - EMIs of
a loan, the bank will take possession of the property.
* This mode of charging security applicable on Home Loans.
1
 Assignment
* The transfer of an individual’s rights to another person is called Assignment.
* It is used as a mode of providing security to a Banker for a Loan.
* In banking practice, a Borrower may assign the Book Debt, Money due from
Govt. Dept. & Life Insurance Policies as security for a loan.
 Lien
* Lien is the legal right of a lender (Bank) to retain possession of the collateral
property of a borrower (Customer) who fails to meet the obligations of a Loan
Agreement.
* Banker can dispose of the securities after giving proper notice to the borrower,
in case the debt is not paid.
r’s
 Set-Off
* Right of Set-Off allows a bank to use its customer’s deposits against the customer’s
debts as the debt become due.
* Right of Set-Off with the bank, which it may use anytime to utilize any money
belonging to borrower and deposited with the bank.
 Appropriation
ha
* If the customer has more than one account or he has taken more than one loan
from the banker, the banker has the right to appropriation these loans.
 Reverse Mortgage Loan
E
* Purpose of RML Scheme is to provide a source of regular income for Senior
d
Citizens in the form of monthly pay-out or combination of monthly pay-out and
lump sum amount.
* This scheme is applicable for Indian Citizen above the age of 60 Years.
ee
 Teaser Loan
* If a Bank offers a slightly lower interest rate on home loan in the initial years
and higher interest rate in later years, it is called a Teaser Loan.
C
* Teaser Loan is an Adjustable-rate Mortgage Loan in which the borrower pays a
very low initial interest rate, which increases after a few years.
Sr
 Hire Purchase
* A Hire Purchase is a method of buying goods through making instalment
payments over time.
* Under a Hire Purchase contract, the buyer is leasing the goods and does not
obtain ownership until the full amount of the contract is paid.
 Factoring
* Factoring is a financial service in which the Business Firm sells its Bill
C
Receivables to a Third Party in order to raise cash resources.
* This kind of financing that helps business entities with cash flow problems due
to slow-paying clients.
* By getting this facility, Business entity get immediate Working Capital that it
can use to pay for important expenses.
* Factoring is also known as Debtor Financing or Receivables Financing.
 Forfaiting
* Forfaiting is a method of trade finance that allows exporters to obtain cash by
selling their Accounts Receivable at a discount on a without recourse basis.
 Credit to Deposit Ratio
* Credit to Deposit Ratio is a ratio between the banks’ total loans and total deposits.
* Credit to Deposit Ratio = Banks’ Total Loans / Total Deposits
* It is used to calculate a Bank’s ability to cover withdrawals made by its depositors.
2
 Moratorium
* Moratorium is a mechanism that the borrowers can delay the payments of their
monthly loan instalments i.e. EMIs for a limited period as defined by lender.
 ECB
* External Commercial Borrowing facilitates Indian companies to raise money
outside the country in foreign currency.
* ECB is basically a loan availed by an Indian entity from a Non-Resident Lender
with a minimum maturity of 3 Years.
 Loan Delinquency
r’s
* Loan Delinquency occurs as soon as a borrower misses a payment on a loan.
 Loan Deferment
* Loan Deferment is an arrangement that allows borrower to postpone loan
payments temporarily.
 Loan Default
ha
* Loan Default occurs when a borrower fails to pay back a debt according to the
initial arrangement.
 CDR
E
* Corporate Debt Restructuringis a voluntary process under which Banks and
Financial Institutions aid those companies, who are facing financial difficulties.
d
* CDR is a non-statutory process.
* The motive behind this mechanism is to provide timely support to the companies
ee
and revive them.

* CDR is available to those companies which have availed credit facility from
more than one financial institution.
C
 OTS
* One-Time Settlement is a type of compromise settlement executed by the
Sr
Banks in order to recover Bad Loans i.e. NPAs.

* OTS is a scheme where the borrower (the one who has defaulted) proposes to
settle all the dues at once, and banks agree to accept an amount lesser than
what was originally due.
 Bridge Loan
* Bridge Loan is an arrangement wherein the borrower can get access to short-
C
term loans for meeting short-term liquidity requirements.
* It is also called as Swing Loan, Interim Financing & Gap Financing.
* Bridge Loans help in bridging the gap between short-term cash requirements
and long-term loans.
* These loans are normally extended for a period of 12 Months.
 Fixed Interest Rate
* People who opt for Fixed Interest Rate mean that they have to repay the loan is
fixed and equal instalments as per the loan tenure.
 Floating Interest Rate
* Interest rate which is volatile and keeps on changing as per market scenario is
termed as Floating Interest Rate.
***
3
DIFFERENT TYPES OF LOAN PRODUCTS (PART–2)

1. Teaser Loans are offered as adjustable rate loans, in which the borrower pays low
initial interest, which increases after a few years.
For which one of the following Loan Products Teaser Loan are offered by Banks?
1) Education Loan 2) Vehicle Loan 3) Personal / Signature Loan
r’s
4) Consumer Durable / White Goods Loan 5) Home Loan
2. The transfer of a title to the borrower after a mortgage has been fully paid is
called ________
1) Repossession 2) Reconveyance 3) Restructuring
4) Remittance 5) Reconstruction
3.
ha
Teaser Home Loan can be a good way of ___________
1) disburse high amount of EMIs for the initial years
2) avail home loan at affordable cost for weaker segments of society
E
3) providing an additional source of income for senior citizens
4) reducing the home loan EMIs for the initial years
d
5) granting small loans to low income individuals that are excluded from the
traditional banking system
ee
4. What is Revolving Credit? Choose correct statement among following.

1) It is a credit agreement made with a bank that allows an account holder to use
or withdraw more money than what they have in their account up to approved
limit.
C
2) It is an arrangement whereby the seller recovers an amount of sale bill from
Sr
the bank before it is due.

3) It is a bank’s written promise that it will make a customer’s payment to a
vendor if the customer does not.
4) It is a credit mechanism that is automatically renewed as debts are paid off.
5) It is a loan that is taken to finance the day to day operations of a company.
5. Consortium Finance refers to several Financial Institutions that group together
to jointly finance a single borrower.
C
How many Financial Institutions can participate in Consortium Finance?
1) 5 2) 12 3) 10 4) 3
5) There is no such ceiling on the no. of banks to participate.
6. Securitization method called Hypothecation is applicable in the case of __________
1) Movable Goods like Gold, Goods etc.
2) Immovable Property like Land / Building
3) Loan against Insurance Policies, Book Debts etc.
4) Loan against Fixed Deposits
5) Movable Goods like Automobile, Machinery etc.
7. In Banking Sector, Adjusting debit in one account of a borrower with credit in
another account is known as ________
1) Lien 2) Set – off 3) Appropriation 4) Amortization 5) Provision
1
8. CDR is an effective tool for minimising the adverse effects of default & financial
difficulties on the borrowers as well as lenders.
The term CDR usually used in ________
1) Corporate Finance 2) Trade Finance 3) Micro Finance
4) Consumer Finance 5) Bridge Finance
9. When banks give Housing Loans, the nature of charge created is ________
1) Mortgage 2) Pledge 3) Hypothecation
4) Assignment 5) Appropriation
10. Banks are allowed to grant loans against which among the following?
1) Fixed Deposits issued by other banks
2) Junk Stocks 3) Certificate of Deposits
r’s
4) Life Insurance Policies 5) All of the above
11. Banking product named Reverse Mortgage Loan is designed for give benefit to
which of the following groups of the society?
1) Government Employees 2) Senior Citizens3) Unemployed Youth
4) War Widows 5) Students
12. Consumer Durable Loan refers to __________
ha
1) A Small Loans given to low income individuals that can help weaker section
communities become more financially stable.
2) It is a loan that is taken to finance the everyday operations of a company.
E
3) It is a finance option for purchase of household items like washing machines,
refrigerators, air conditioners, and TVs etc.
d
4) It is defined as capital used to enlarge the size of a company & to meet business
goals.
5) It is a practice of lending to borrowers with low credit scores.
ee
13. __________ is an innovative product to extend working capital finance to dealers

having business relationships with large companies in India. It facilitates dealers
by providing additional liquidity to dealers for procuring goods from corporates.
C
1) Trade Financing 2) Vendor Financing 3) Agent Financing
4) Channel Financing 5) Merchant Financing
Sr
14. Financial term Moratorium recently in news. What does Moratorium refers to?
1) It is the amount of time an insured must wait before some or all of their
coverage comes into effect.
2) It gives us a second chance to review our insurance policy and return it if we
feel we misunderstood or were mis-sold an insurance plan.
3) It is a mechanism that the borrowers can delay the payments of their monthly
loan instalments for a limited period as defined by lender.
C
4) It is a scheme where the borrower proposes to settle all the dues at once, and
banks agree to accept an amount lesser than what was originally due.
5) Period during which an investor is restricted from selling a particular investment.
15. LAP also known as Mortgage Loan uses our residential / commercial property as
collateral to avail cash support at low interest rates with long repayment period.
What does letter L depicts in an acronym LAP?
1) Letter 2) Lending 3) Liability 4) Liquidity 5) Loan
16. Consider correct statement(s) related to Reverse Mortgage Loan - RML.
1. Reverse Mortgage Loan is a unique product designed for Senior Citizens above
the age of 65 Years.
2. The Maximum Period of the loan is 25 Years.
3. Under the RML scheme, the borrower can avail Loan against Property like
Residential or Commercial.
1) Only 1 & 3 2) Only 1 & 2 3) Only 2 & 3 4) None of the above 5) All 1, 2 & 3
2
17. Collateral is an asset that a lender accepts as security for extending a loan. For
meeting contingencies & needs of personal nature, an individual can avail a loan
up to Rs. ________ lakh against shares & debentures, if the securities are held in
dematerialised form.
1) Rs. 5 Lakh 2) Rs. 50 Lakh 3) Rs. 1 crore
4) Rs. 10 Lakh 5) Rs. 20 Lakh
18. Pledge means bailment of goods for purpose of providing security for payment of
loan.
Which of the following not considered as collateral for avail a loan from Bank
through charging security method called Pledge?
1) Gold 2) Share 3) Stock / Commodity
r’s
4) Life Insurance Policy 5) All are considered as collateral / security through
Pledge.
19. Differential Rate of Interest – DRI Scheme was initiated to provide bank finance
at a concessional rate of interest to the weaker sections of the community for
engaging in productive and gainful activities.
This scheme was introduced in which year?
1) 1986 2) 1972
ha 3) 2002 4) 2011 5) 1994
20. A positive NIM indicates that a bank has invested / lend its funds efficiently. It is
a measure of the profitability of a bank.
E
What does letter I denotes in an acronym NIM?
1) Income 2) Interest 3) Index 4) Internal 5) Inflation
d
21. Which among the following type of banking product will have highest level of
Credit Risk?
1) Loan given against immovable property like land / building
ee
2) Loan approved against gold, shares & fixed deposits etc.

3) Loan approved based on creditworthiness of a customer like signature loans,
credit card advances etc.
C
4) Loan sanctioned against movable assets like automobile & machinery
5) Loan provided against life insurance policy
Sr
22. The right of Set-Off is ____________

1) Customer’s right 2) Customer’s obligation 3) Banker’s right
4) Banker’s discretion 5) Banker’s obligation
23. The loan disbursed by a bank to an individual for purchasing a House is called
___________
1) Wholesale Finance 2) Micro Credit 3) Consumer Durable Loan
4) Retail Loan 5) Bridge Loan
C
24. Pre-shipment Packing Credit facility generally extended by Banking entities to
________
1) Importers 2) Foreign Institutional Investors 3) Exporters
4) Tourists 5) All of the above
25. Which of the following assets can be Mortgaged?
1) Shares 2) Book Debts 3) National Savings Certificates
4) Stock / Commodity 5) Land & Building
26. ECB occupy a very important position as a source of funds for Corporate.
What is the full form of ECB?
1) Essential Commercial Banking 2) Export Credit Borrowing
3) Essential Credit for Borrowing 4) External Commercial Borrowing
5) External Credit Borrowing
3
27. Assignment is a mode of security to a banker for an advance.
Which among the following is assignable?
1) House 2) Gold 3) Book Debt 4) Car 5) Warehouse receipt
28. Suppose a Bank / NBFC provides loan for purchasing of a White Good.
This is known as _________
1) Working Capital Finance 2) Consumer Durable Finance
3) Trade Finance 4) Project Finance 5) Micro Credit
29. An Unsecured Loan is a loan that is issued and supported only by the borrower’s
creditworthiness, rather than by any type of collateral.
Which kind of bank loans are Unsecured in nature?
r’s
1) House Loan 2) Gold Loan 3) Personal Loan
4) Car Loan 5) Loan against Life Insurance Policy
30. A Mortgage involves __________
1) Transfer of ownership 2) Transfer of possession
ha
3) Bailment of immovable property
4) Transfer of interest in immovable property 5) Both 1 & 2
31. Loans of small amounts given to low income group people of society are known as
___
E
d
1) Small Scale Credit 2) Micro credit 3) Secured Credit
4) Simple Credit 5) Self-Credit
32. CDR is an effective tool for minimising the adverse effects of default & financial
ee
difficulties on the borrowers as well as lenders.

What does letter C represents in an acronym CDR?
1) Corporate 2) Commercial 3) Company 4) Consumer 5) Capital
C
33. Related to Banking Sector, Net Interest Income - NII refers to _________
Sr
1) Interest earned on advances 2) Interest earned on

investments
3) Total interest earned on advances & investment
4) Difference between interest earned and interest paid
5) Interest rate minus inflation rate
34. What does it mean when a loan matures?
C
1) A change in interest rate 2) The starting of your loan term
3) End of your borrowing term 4) Termination of your loan term
5) Waive-off your loan amount
35. The LTV Ratio is calculated as the amount of the mortgage divided by the appraised
value of the property. LTV stands for __________
1) Loan to Value 2) Line to Value 3) Lump-Sum to Value
4) Liquidity to Value 5) Link to Value
36. ________ is a method of paying down our debt by borrowing a larger loan that we
then use to pay off multiple smaller loans or credit cards.
1) Debt Recovering 2) Debt Restructuring 3) Debt Consolidation
4) Debt Clearing 5) Debt Transfer
4
37. ________ is the time during which cardholder is allowed to pay his/her Credit
Card bill without having to pay interest.
1) Grace Period 2) Deducted Period 3) Funding
Period
4) Discount Period 5) Service Period
38. ________ is a fee charged on every cash withdrawal transaction made using a
Credit Card.
1) Cash Transaction Fee 2) Cash Advance Fee
3) Cash Payment Fee 4) Cash Redemption Fee 5) Cash Deduction Fee
39. __________ is an interim loan given to finance the difference between the floor
r’s
loan & the maximum permanent loan as committed.
1) Micro Finance 2) Gap Finance 3) Trade Finance
4) Consumer Finance 5) Wholesale Finance

ha
What is Credit Card? What are the benefits of opting this facility?
 What is Reverse Mortgage Loan? &how does it work?


E
In what way Pledge is different from Hypothecation?
What do you know about Teaser Loan product?
d
 Tell us something about securitization method named Mortgage?
 Related to Loan terminology, what is Moratorium?
ee
 What do you know about Lien & Set-Off?

 Expand the term CDR. What is it?
 Related to Loan Business, What does meant by Default Risk?
C
 What is Loan Delinquency, Loan Default & Loan Deferment?
Sr
 Secured Loan vs Unsecured Loan! Give some examples to Secured & Unsecured
Loans
 What do you know about Micro Credit concept?
***
C
KEY
1.5 2.2 3.4 4.4 5.5 6.5 7.2 8.1 9.1 10.4
11.2 12.5 13.4 14.3 15.5 16.4 17.5 18.4 19.2 20.2
21.3 22.3 23.4 24.3 25.5 26.4 27.3 28.2 29.3 30.4
31.2 32.1 33.4 34.3 35.1 36.3 37.1 38.2 39.2
5
RBI’S MONETARY POLICY (PART – 1 & 2)

 Credit Control
* Credit Control is an important tool used by RBI, to control the availability of
Money Supply in an economy.
 Methods of Credit Control
r’s
* Quantitative Credit Control
* Qualitative Credit Control
 Quantitative Credit Control Methods
* Cash Reserve Ratio - CRR
* Bank Rate
* Reverse Repo Rate
ha
* Open Market Operations - OMOs
* Repo Rate
E
* Statutory Liquidity Ratio - SLR
* Marginal Standing Facility - MSF
d
* Market Stabilization Scheme - MSS
 CRR
* CRR is a tool used by RBI to control Liquidity (i.e.Money Supply) in the banking
ee
system.
* Cash Reserve Ratio concept was introduced in 1950.
* CRR refers to the ratio of Bank’s cash reserve balances with RBI with reference
C
to Bank’s NDTL to ensure the liquidity & solvency of Scheduled Commercial Banks.
 NDTL
Sr
 Demand Liabilities
* Current Account Deposits
* Savings Bank Account Deposits
* Balances in Overdue FD, RD & Cash Certificates
* Outstanding Money Transfers & Demand Drafts
* Unclaimed Deposits etc.
C
 Time Liabilities
* Fixed Deposits
* Cash Certificates
* Recurring Deposits
* Staff Security Deposits etc.
 Other Demand & Time Liabilities
* Interest accrued on Deposits
* Bills payable
* Unpaid Dividends etc
* Every Scheduled Commercial Bank in the country has to maintain specific
percentage of their NDTL in the form of cash reserve with RBI. This reserve
requirement is called as Cash Reserve Ratio.
1
* It is maintained at fortnightly average basis. i.e. Saturday to following Friday –
14 Days.
* Banks have to maintain minimum CRR balance of 80% with RBI on Daily Basis.
* For the purpose of maintaining CRR, every Scheduled Commercial Bank is
required to maintain a Principal Account with the Deposit Accounts Department
of the RBI.
* RRBs also to maintain same CRR as applicable for Scheduled Commercial Banks.
W.e.f 12th January 2002.
* For Non – Scheduled Banks are required to maintain CRR of 4% of their NDTL
w.e.f. 12th July 2014.
r’s
* According to Section 42(1) of RBI Act 1934, RBI can prescribe CRR for scheduled
commercial banks between 0% to 100% of total of their Net Demand and Time
Liabilities.
* RBI does not pay any interest on the CRR balances maintained by Scheduled
Commercial Banks.
ha
* Incremental CRR is intended to be a temporary measure within RBI’s liquidity
management framework to drain excess liquidity in the system.
 SLR
E
* Statutory Liquidity Ratio is the ratio of Liquid Assets, which all commercial
d
banks have to keep in the form of Cash, Gold and Government Securities of their
NDTL.
* It is the ratio of NDTL that banks must maintain in Safe and Liquid Assets.
ee
* According to Section 24 of Banking Regulation Act 1949, RBI is empowered to

increase SLR up to 40% and decrease up to 0%.
* SLR is used to control the Bank’s leverage for Credit Expansion.
C
 Statutory Liquidity Ratio – Objectives
Sr
* To restrict expansion of Bank’s Credit

* To increase Bank’s investment in liquid assets
* To ensure solvency of banks
* For computation and maintenance of SLR, banks have to report their latest
NDTL to RBI every fortnight (Friday).
* SLR is to be maintained as at the close of business on every day i.e. on daily
basis based on the NDTL as obtaining on the last Friday of 2nd preceding fortnight.
C
* Higher Statutory Liquidity Ratio diverts the bank funds from Loans and Advances
to Investment in Liquid Assets.
 Dovish Monetary Policy
* Dovish Monetary Policy is aimed at economic growth.
* When there is a Dovish approach, the Central Banking Entity i.e. RBI uses all
possible means to promote economic growth. Inflation is not a concern.
* A Dovish Policy is marked by a fall in interest rates
 Hawkish Monetary Policy
* Hawkish Monetary Policy is aimed at fighting Inflation.
* When there is a Hawkish approach, the Central Banking Entity uses all possible
means to combat Inflation.
2
 Bank Rate
* Bank Rate is the rate, at which the RBI allows finance to Commercial Banks.
* A bank finds it difficult to repay the short term deposits on maturity to its depositors
because the funds of the bank are locked in long term loans or investments. The risk
arising from this situation is called Liquidity Risk.
* Liquidity Risk can be defined as the risk of a Bank not being able to have enough
cash to carry out its day-to-day operations.
* A Bank Run occurs when a large number of customers of a bank withdraw their
deposits simultaneously over concerns of the Bank’s solvency.
* RBI lends to Commercial Banks to meet depositors demand and reserve
r’s
requirements for long term.
* The interest rate the RBI charges the bank for this purpose is called Bank Rate.
 LAF
* LAF is used to aid banks in adjusting the day to day mismatches in money supply.
 Liquidity Adjustment Facility - LAF
* Repo Rate
ha
* Reverse Repo Rate
* Liquidity Injection

* Liquidity Absorption
Repo Rate
E
d
* Repo Rate is the rate, at which RBI lends money to commercial banks against Govt.
Securities for Short Term.
ee
* Repo Rate is known as the benchmark interest rate is the rate at which the RBI
lends money to the banks for a Short Term.
* Repo transaction injects Money Supply in the market.
C
* Banks are currently allowed to borrow up to 0.25% of their NDTL from the Liquidity
Adjustment Facility window.
Sr
 Term Repo
* RBI introduced Term Repo auctions in 2013 to keep overnight rates close to the
Repo Rate and facilitate banks to do more efficient liquidity management
* Term Repo auctions under the LAF for 14 Days and 7 Days tenors will be conducted
for Scheduled Commercial Banks (except RRBs) in addition to the existing daily LAF
and MSF.
C
* RBI provides additional liquidity of 0.75% of NDTL under Term Repo mechanism.
* Term Repo auctions will be conducted on E-Kuber platform
 Reverse Repo Rate
* Reverse Repo Rate is the rate, at which banks park their short term excess liquidity
with the RBI.
* Reverse Repo transaction absorbs / withdraws Money Supply from the market.
 MSF
* Marginal Standing Facility was introduced in the year 2011.
* It is a special window for banks to borrow money from RBI against Government
Securities in an acute cash shortage situations.
* MSF refers to the penal rate at which banks can borrow money from RBI over and
above what is available to them through the Repo transaction.
3
* The MSF considered as the last resort for banks once they exhaust all borrowing
options.
* The scheme has been introduced by RBI with the main aim of reducing volatility
in the overnight lending rates in the Inter-bank Market.
* Banks are currently allowed to borrow up to 3% of their NDTL from Marginal
Standing Facility window.
 OMO
* Open Market Operations refers to the sale or the purchase of Government
Securities by the Reserve Bank of India in the open market.
* OMOs are carried out for the purpose of maintain Inflation at moderate level.
r’s
* OMOs are related to Buying & Selling of Government Securities.
* By conducting OMOs, RBI tries to influence available Money Supply in a Financial
System.
 MSS
ha
* Market Stabilization Scheme was introduced in 2004.
* MSS is a tool used by the RBI to absorb excess liquidity from the market through
issue of Treasury Bills, Dated Securities etc. on behalf of the government.
E
* It is used when there is high Liquidity in the Financial System.
* MSS Bonds are special bonds floated on behalf of the Govt. of India by the RBI for
d
the specific purpose of mopping up the excess liquidity in the system.
* These bonds are mostly shorter-tenure bonds, of less than 6 Months maturity.
* MSS Bonds have a fixed tenure and earn returns.
ee
* T-Bills and Dated Securities issued for the purpose of MSS would be matched by
an equivalent cash balance held by the Government with the RBI.
 Basis Point
C
* One hundredth part of one percentage is known as Basis Point. i.e. (0.01%).
Sr
* It is used to denote the percentage change in a financial instrument.

 Qualitative Credit Control Methods
* Margin Requirements
* RBI Guidelines
* Moral Suasion
* Consumer Credit Regulations
* Rationing of Credit
C
 Margin Requirement
* Margin requirement refers to the difference between the current value of the
security offered for loan and the value of loan granted.
* Margin against a particular security is reduced or increased in order to encourage
or to discourage the flow of credit to a particular sector.
 Consumer Credit Regulation
* This refers to issuing rules regarding down payments and maximum tenure of
loan product.
 Rationing of Credit
* Rationing of Credit is a method by which the RBI seeks to limit the maximum
amount of loans and advances and fix ceiling for specific categories of loans and
advances.
4
 Moral Suasion
* Under Moral Suasion, RBI gives advices and suggestions to the Banking
Institutions to follow the instructions given by it.
 EBLR
* External Benchmark Lending Rate is a benchmark lending rate for floating-
rate loans.
* It is the minimum interest rate at which Commercial Banks can lend.
* EBLR methodology was introduced in 2019 & it is aimed at faster transmission
of Monetary Policy rates.
* All new Floating Rate Retail Loans and Floating Rate loans to MSMEs extended
by Banks linked to EBLR.
r’s
* RBI mandated all banks to link their Floating Rate Loans to an EBLR instead of
MCLR.
 Banks can choose from one of the 4 External Benchmark Rates
* Repo Rate
* 3-Month Treasury Bill Yield
* 6-Month Treasury Bill Yield
ha
* Any other Benchmark Interest Rate published by Financial Benchmarks India
Private Ltd.
* The interest rate under the EBLR shall be reset at least once every 3 Months.
 MCLR
E
* Banks uses a methodology called MCLR, while setting lending rates.
d
* MCLR replaced Base Rate System from April 2016.
* As per guidelines by RBI, Banking entities have to prepare MCRL.
 PCA
ee
* Prompt Corrective Action - PCA is a framework under which Banking entities

with weak financial metrics are put under watch by the RBI.
* PCA is a mechanism that will be forced by the RBI upon banking firms that show
signs of stress on any of the standard stress parameters.
C
 Prompt Corrective Action
Sr
* Capital to Risk Weighted Assets Ratio - CRAR

* Non-Performing Assets - NPA
* Return on Assets - RoA
* RBI will also impose restrictions on the bank on borrowings from interbank
market.
PCA norms allow the RBI to place certain restrictions such as
* Halting branch expansion
* Stopping dividend payment
C
* Cap a bank’s lending limit to one entity or sector
 Other corrective action that can be
* Imposed on banks include special audit
* Restructuring operations
* Activation of recovery plan
* Banks’ promoters can be asked to bring in new management, too
 If PCA triggered
* Banks are not allowed to renew or access costly deposits
* Banks will also have to launch a special drive to reduce the stock of NPAs and
contain generation of fresh NPAs.
* Banks will also not be allowed to enter into new lines of business.
* RBI will also impose restrictions on the bank on borrowings from interbank
market.
5
RBI’S MONETARY POLICY PART – 3

1. In finance industry, which among the following term describes the degree to
which an asset or security can be quickly bought or sold in the market at a price
reflecting its intrinsic value, i.e. the ease of converting it to cash?
1) Buffer 2) Liquidity 3) Depreciation 4) Insolvency 5) Default
2. To ensure the smooth transmission of monetary policy actions and flow of credit
r’s
into the economy, Reserve Bank of India announced a mechanism called LTRO.
What does letter R denotes in an acronym LTRO?
1) Rediscounting 2) Rate 3) Ratio 4) Repo 5) Reserve
3. PCA is a framework under which banks with weak financial metrics are put
ha
under watch by the Reserve Bank of India. What does letter A represents in an
acronym PCA?
1) Asset 2) Advance 3) Action 4) Arrangement 5) Agreement
4.
E
If the Central Banking entity purchases Govt. Securities through a methodology
d
called Open Market Operations - OMOs, what kind of effect can be observed?
1) Available reserves with banks will increase
2) Available reserves with banks will remains constant
ee
3) Banks profitability will affect drastically in downward direction

4) Available reserves with banks will decrease
5) Uncertain situation occurred in Banking system
C
5. When central banking entity (i.e. RBI) wants to guard excessive inflation, it will
Sr
adopt which among the following stance?

1) Dovish Policy 2) Hawkish Policy 3) Bullish Policy
4) Bearish Policy 5) Market Policy
6. What rate of interest is paid by Reserve Bank of India on Cash Reserve Ratio -
CRR balances maintained by Banks?
1) Equal to Savings bank interest rate 2) Equal to Repo rate
C
3) No interest is allowed 4) Equal to Bank rate
5) Equal to Marginal Cost of Funds based Lending Rate
7. ________ is deliberate policy which is adopted by the monetary authorities to
control inflation in the economy.
1) Cheap Money Policy 2) Dear Money Policy 3) Narrow Money Policy
4) Broad Money Policy 5) Soft Money Policy
8. Apart from Cash Reserve Ratio, banks are required to maintain Statutory Liquidity
Ratio also. The maximum level up to which SLR can be fixed by RBI is _________ of
Bank’s Net Demand & Time Liabilities - NDTL.
1) 25% 2) 35% 3) 40% 4) 50%
5) There is no max. limit prescribed by RBI
1
9. Which of the following is / are included as part of Statutory Liquid Ratio assets?
1. Investments made in Gold by the bank
2. Investments in Blue Chip Company Stocks
3. Cash in hand
4. Investments in approved Government Securities
1) Only 1& 3 2) Only 1, 3 & 4 3) Only 1, 2, & 3
4) Only 2, 3 & 4 5) Only 3 & 4
10. Monetary policy refers to the actions undertaken by a nation’s central banking
entity to control money supply to achieve macroeconomic goals. Main objective of
RBI’s Monetary Policy is ____________
r’s
1) Moderating competition among private & public sector banks
2) Reduce unemployment 3) Maintaining low fiscal deficit
4) Eradicate poverty
5) Maintain inflation at moderate level, and maintain stable economic growth
11. The objective of Open Market Operation is to manipulate the short term interest
ha
rate and the supply of base money in an economy. Which of the following carries
out OMOs?
1) Finance Commission
E
2) Fixed Income Money Market Derivatives Association of India – FIMMDAI
3) National Bank for Agriculture & Rural Development – NABARD
d
4) National Institution for Transforming India Aayog – NITI Aayog
5) Reserve Bank of India – RBI
12. As per existing policy the CRR of Scheduled Commercial Banks is fixed at a
ee
certain percentage of their NDTL. What is full form of NDTL?

1) New Demand & Tenure Liabilities
2) Net Demand & Time Liabilities
C
3) National Deposits & Total Liabilities
Sr
4) Net Duration & Total Liquidity

5) New Deposits & Term Liquidity
13. Monetary Policy Committee came into existence in 2016. MPC consists of how
many members?
1) 8 2) 10 3) 6 4) 9 5) 5
14. PCA is a framework under which banks with weak financial metrics are put
under watch by the RBI. What does letter P denotes in an acronym PCA?
C
1) Profit 2) Preference 3) Priority 4) Provisioning 5) Prompt
15. Choose correct statement among following statements related to Cash Reserve
Ratio - CRR.
1. According to Section 42 (1) of RBI Act, RBI can CRR for Scheduled Commercial
Banks without any floor rate or ceiling rate.
2. RBI uses CRR either to drain excess liquidity or to release funds needed for
the growth of the economy from time to time.
3. RBI does not pay any interest on the CRR balances maintained by Scheduled
Commercial Banks.
4. Cash Reserve Ratio concept was introduced in 1950.
1) Only 1, 3 & 4 2) Only 2, 3 & 4 3) Only 1, 2 & 3
4) Only 1, 2 & 4 5) All 1, 2, 3 & 4
2
16. Assume that RBI reduces the CRR by 1 %, what will be its impact?
1) Less liquidity in financial system
2) More liquidity in financial system
3) No change in the liquidity in financial system
4) Liquidity uncertainty in financial system 5) None of these
17. Which of the following section of the respective act is related to maintenance of
Cash Reserve Ratio - CRR by Banks?
1) Sec 22 of RBI Act 1934
2) Sec 6 of Negotiable Instruments Act 1881
3) Sec 24 of Banking Regulation Act 1949
r’s
4) Sec 42 (1) of RBI Act 1934 5) Sec 35 A of Banking Regulation Act 1949
18. Which of the following is decided by the Bank itself?
1) Bank Rate 2) Reverse Repo Rate 3) Repo Rate
4) External Benchmark based Lending Rate 5) MSF Rate
19. All new floating rate Retail Loans and floating rate loans to MSMEs extended by
banks linked to EBLR from 01st October, 2019. What does letter E represents in
an acronym EBLR?
ha
1) Economic 2) Exchange 3) Effective 4) External 5) Earning
20. Which among the following is not a Quantitative Credit Control method of Monetary
Policy?
E
1) Market Stabilization Scheme 2) Consumer Credit Regulations
d
3) Cash Reserve Ratio 4) Liquidity Adjustment Facility
5) Open Market Operations
21. Which of the following is correct statement in the context of Reverse Repo Rate?
ee
1) Determined by market forces 2) Always lower than repo rate

3) Reverse Repo Rate is the rate at which RBI lends money to commercial banks
against government securities for short term.
C
4) Reverse Repo transaction injects liquidity in the market 5) All of the above
22. Open Market Operations - OMO is an important tool for central banks in __________
Sr
1) Bullish equity market conditions 2) Bearish equity market

conditions
3) Countries where debt market is developed
4) Countries where debt market is under developed 5) None of the above
23. MSS was introduced by RBI in 2004 wherein Government of India Dated Securities
& Treasury Bills are being issued to absorb enduring surplus liquidity in the
economy.
C
What does letter M denotes in an acronym MSS?
1) Money 2) Market 3) Management 4) Monetary 5) Marginal
24. __________ is the rate at which banks park their short term excess liquidity with
RBI.
1) Bank Rate 2) Reverse Repo Rate 3) MSF Rate
4) Repo Rate 5) Marginal Cost of Fund Based Lending Rate
25. In which year RBI introduced Term Repo auctions to keep overnight rates close to
the Repo Rate and facilitate banks to do more efficient liquidity management?
1) 2011 2) 2009 3) 2012 4) 2013 5) 2010
26. RBI carries out Open Market Operations to __________
1) Maintain stable GDP growth 2) Maintain moderate Inflation
3) Increase the flow of Foreign Direct Investments
4) Reduce Unemployment 5) Reduce Fiscal Deficit
3
27. What is / are the objective(s) of RBI’s Quantitative Credit Control method called
Statutory Liquidity Ratio - SLR?
1. To restrict expansion of banks credit
2. To increase banks investment in Liquid Assets
3. To ensure solvency i.e. an organizations capacity to meet its long term financial
commitments of banks
1) 1, & 2 only 2) 2 & 3 only 3) 1 & 3 only 4) All 1, 2 & 3 5) None of the above
28. PCA is a mechanism that will be forced by the RBI upon Banking firms that show
signs of stress on any of the standard stress parameters. Which of the following
not one among them?
r’s
1) Capital to Risk Weighted Assets Ratio - CRAR
2) Non-Performing Assets - NPA
3) Price of equity share in stock market
4) Return on Assets - ROA 5) None of the above
29. Prompt Corrective Action - PCA norms allows the RBI to place following guidelines
ha
on banks except __________
1) Halting branch expansion 2) Activation of NPA recovery plan
3) Cap a bank’s lending limit to one entity or sector
4) Restriction on accepting deposits
E
5) Banks’s promoters can be asked to bring in new management
d
30. The Cash Reserve Ratio is to be maintained by Scheduled Commercial Banks in
the form of cash with__________
1) Domestic Systemically Important Bank 2) Central Government
ee
3) Lead Bank 4) Reserve Bank of India 5) Bank itself

31. RBI has introduced Marginal Standing Facility in 2011 with the objective of
__________
C
1) Maintain moderate inflation
2) Maintain financial stability in economy
Sr
3) Reducing volatility in the overnight interbank rates

4) To absorb surplus liquidity from the market
5) To restrict expansion of bank credit
32. Which of the following rate decides by RBI under Monetary Policy?
1) Marginal Cost of Funds based Lending Rate
2) Savings Bank Interest Rate
C
3) Repo Rate 4) Inflation Rate 5) PPF Interest Rate
33. The Cash Reserve Ratio - CRR was introduced primarily as a measure to ensure
safety and liquidity of bank deposits. In which year CRR concept was introduced?
1) 1950 2) 1962 3) 1956 4) 1972 5) 1976
34. Bank Rate is a rate at which Commercial Banks can borrow money from RBI for
long term against G-Sec. In which act the term Bank Rate defined?
1) Section 49 of RBI Act, 1934 2) Section 47 of RBI Act, 1934
3) Section 22 of RBI Act, 1934 4) Section 17 of RBI Act, 1934
5) Section 4 of RBI Act, 1934
35. The Minimum & Maximum limit of Statutory Liquidity Ratio - SLR is __________ &
__________ respectively.
1) 0% & 30% 2) 10% & 40% 3) 10% & 30% 4) 0% & 40% 5) 0% & 25%
4
36. Chose an incorrect statement(s) among the following in the context of Repo Rate?
1) Repo Rate is the rate at which RBI lends money to commercial banks in the
event of any shortfall of funds.
2) Repo Rate is used by monetary authorities to maintain inflation at moderate
level.
3) At the time of inflationary situation in an economy, RBI increases Repo Rate
as this acts as a disincentive for banks to borrow from RBI.
4) As a part of Liquidity Adjustment Facility, Repo transaction used for liquidity
absorption in a financial system.
r’s
37. If RBI increases Cash Reserve Ratio - CRR, what happens in a financial system?
1) Available money supply with banks decreases, loans may get cheaper
2) Available money supply with banks increases, loans may get costlier
3) Available money supply with banks decreases, loans may get costlier
4) Available money supply with banks increases, loans may get cheaper
ha
5) There will be no such effect on a financial system
38. ____________ refers to the penal rate at which banks can borrow money from the
RBI over and above what is available to them through the Liquidity Adjustment
Facility - LAF?
E
1) Repo Rate 2) Bank Rate 3) Marginal Standing Facility Rate
d
4) Marginal Cost of funds based Lending Rate 5) Reverse Repo Rate
39. OMOs has been carried out by Reserve Bank of India. What does letter M denotes
ee
in an acronym OMO?
1) Marginal 2) Monetary 3) Money 4) Market 5) Minimum
40. ________ is used to aid banks in fine-tuning the day to day mismatches in money
C
supply in the market.
1) Prompt Corrective Action 2) Market Stabilization Scheme
Sr
3) Liquidity Adjustment Facility

4) Marginal Cost of funds based Lending Rate 5) Open Market Operations
41. Reserve Bank of India desires to create more liquidity in the economy, what does
it do?
1) Reduces the Cash Reserve Ratio 2) Raises the Bank Rate
3) Increases Cash Reserve Ratio
C
4) Increases Reverse Repo Rate 5) Sell Government Securities
through OMO
42. Reverse Repo Rate is a tool used by Reserve Bank of India to ___________
1) Inject liquidity 2) Absorb Liquidity
3) To keep the liquidity at one level
4) Increase the liquidity with banking system 5) All the Above
43. Reserve Bank of India helps Banking entities by providing additional money support
under LAF. What does letter A denotes in an acronym LAF?
1) Arrangement 2) Adjustment 3) Agreement 4) Assessment5 )
Accounting
5
44. At which of the following rates does the Reserve Bank of India lend to banks
against Government Securities for short term?
1) Repo Rate 2) Reverse Repo Rate
3) Marginal Standing Facility 4) Cash Reserve Ratio
5) External Benchmark based Lending Rate
45. What is the difference (in basis points) between Marginal Standing Facility Rate
and Repo Rate as per latest RBI Monetary Policy?
1) 25 basis points 2) 50 basis points 3) 75 basis points
4) 100 basis points 5) No difference
46. Which among the following is not a Qualitative Credit Control method of Monetary
r’s
Policy?
1) Margin Requirements 2) Moral Suasion
3) Open Market Operations
4) Consumer Credit Regulations 5) Rationing of Credit
ha
 Do you know what is the difference between Repo Rate & Reverse Repo Rate?
 What does Monetary Policy refers to? Do you know what is the objective behind
E
the drawing up of Monetary Policy?
d
 Tell us Some credit control tools used by RBI while formulation of Monetary Policy
 What do you know about Open Market Operations - OMO? What is the impact of
ee
conducting OMOs by RBI?

 Does Monetary Policy influence price stability? How?
 What is Cash Reserve Ratio? How does CRR help in managing money supply of
C
the economy?
 What are the objectives of Statutory Liquidity Ratio - SLR?
Sr
 What is Fiscal Policy and what is Monetary Policy?

 What is Long - Term Repo Operations? How does LTRO work?
 Marginal Standing Facility - MSF ! What is the objective of MSF Mechanism?
 Define Bank Rate / Rediscount Rate!
 Tell Us Something about Liquidity Adjustment Facility – LAF.
C
 Mention some Qualitative Credit Control Methods of RBI.
 What does Prompt Corrective Action framework mean?Give me a brief overview
about it?
 Expand the term EBLR. What does it mean?
KEY
1.1 2.4 3.3 4.1 5.2 6.3 7.2 8.3 9.2 10.5
11.5 12.2 13.3 14.5 15.5 16.2 17.4 18.4 19.4 20.2
21.2 22.3 23.2 24.2 25.4 26.2 27.4 28.3 29.4 30.4
31.3 32.3 33.1 34.1 35.4 36.4 37.3 38.3 39.4 40.3
41.1 42.2 43.2 44.1 45.1 46.3
6
CAPITAL MARKET & ITS PRODUCTS PART – 1

 Financial Market
Financial Market consists of various types of
* Markets like Money Market, Debt Market, and Equity Market
* Investors (RII, QII, DII & FII etc.)
* Issuers of Securities (Govt. bodies, Companies)
r’s
* Intermediaries (BSE, NSE, Mutual Fund Companies etc.)
Regulatory Bodies (RBI, SEBI)
 Capital Market
* Securities are financial instruments issued to raise funds.
* The primary function of the Securities Market is to enable to flow of capital from
ha
those that have it to those that need it.
* Securities Market helps in transfer of resources from those with idle resources
to others who have a productive need for them.
E
* There are two broad types of Securities that are issued by seekers of capital
from investors.
d
* Equity Capital &Debt Capital
 Equity
ee
* Equity Capital is available for the company to use as long as it is needed

* Equity Investors do not enjoy any fixed return or return of principal invested
* Equity Investors are owners of the business
C
* Equity Investors participate in the management of the business
* Equity represents a risky, long term, growth oriented investment that can show
Sr
a high volatility in performance, depending on how the underlying business is

performing.
 Debt
* Debt Capital will have to be returned after the specified time.
* Debt Investors earn a fixed rate of interest and return of principal at maturity.
* Debt Investors are lenders to the business.
C
* Debt investors do not participate in the management of the business
* Debt represents a relatively lower risk, steady, short term, income oriented
investment.
 Equity Capital
* Investors buy Shares (aka Stocks) issued by the company to become sharehold-
ers that jointly own the company.
* Equity Capital can be provided by two types of Shareholders.
Inside Shareholder
* Inside Shareholders or Promoters, who start the company with their funds and
entrepreneurial skills.
* Large Institutional Investors such as Venture Capitalists may subscribe to eq-
uity in early stages and become Inside Investors.
::1::
Outside Shareholder
* Outside Shareholders, or members of the public, who invest in the company’s
equity shares at a later stage in order to fund its subsequent expansions and
operations.
* Equity Investors are paid a periodic Dividend, which is not pre?determined.
* The rate of Dividend depends on the profitability of the business and the avail-
ability of surplus for paying dividends after meeting all costs, including interest
on borrowings and tax.
 Debt Capital
* Debt Capital refers to the capital provided by the lenders who are keen to be
r’s
compensated regularly in the form of a pre?specified fixed rate of interest.
* They also expect the money they have lent to be returned to them after an
agreed period of time.
* Debt Capital may be raised by issuing various types of Debt Instruments such as
Debentures, Bonds etc.
ha
* Lenders may seek a conversion of their debt into equity.
* This can be done either through the issue of Convertible Debentures by means
of which the outstanding debt will be converted into equity at a specific date,
price and time.
E
d
 Equity or Debt
* Ability to pay periodic interest
* Willingness to dilute ownership in the company
ee
* Ability to give collateral as security

* Time period for which capital is required
 Capital Market
C
* Capital Market is vital to the functioning of an economy, since capital is a
critical component for generating economic output.
Sr
* A Capital Market is a financial market in which consists of long term debt or

equity backed securities.
* It is defined as market in which money is provided for period longer than a year
to meet long term needs of issuer of Securities.
 Primary Market
* Primary Market refers to the market where Equity or Debt capital is raised by
C
issuers from public investors through an offer of Securities.
* It is called the Primary Market because investors purchase the security directly
from the issuer.
* Primary Market is also known as New Issue Market.
There are various methods through which Securities can be issued in the Pri-
mary Market.
* Private Placement
* Initial Public Offer
* Preferential Issue
* Rights Issue / Bonus Issue
 Private Placement
* When shares are privately offered by promoters to related parties or investment
institutions at a price negotiated between the parties is known as Private Place-
ment.
::2::

 IPO
* When shares are offered to the public for the first time.
* I.e. An unlisted company raise capital from the public for the first time is called
Initial Public Offering.
 Preferential Issue
r’s
* Securities are issued to an identified set of investors, on preferential terms.
* This may include promoters, strategic investors, employees and such specified
preferential groups.
 Rights Issue
ha
* Where existing shareholders are entitled to buy additional shares on a pro rata
basis for a discount price is known as Rights Issue.
 Bonus Issue
E
* Getting an allotment of additional shares without any consideration is known
d
as Bonus Issue.
 Initial Public Offering
ee
IPO provides an opportunity to the companies to raise cash for the purpose of
* Setting up a project
* For Diversification / Expansion
C
* To retire debt
* For potential acquisitions
Sr
* Sometimes for Working Capital

Only credible companies with a sound track record are permitted to mobilize
money from the public.
 Offer Document
* Offer Document is a document which contains all the relevant information
C
about the company, promoters, projects, financial details, objects of raising the
money, forms of the issue etc.
* It is using for inviting subscription to the issue being made by the Issuer.
 Vetting
* When an Offer Document is submitted to SEBI, it is put up on its website.
* This becomes public document that anyone can download and comment on.
* SEBI has a 21 working day window to review the Offer Document. This process
is called Vetting.
 RHP
* The prospectus that is initially filed with SEBI is called a Draft Red Herring
Prospectus - DRHP.
::1::
* DRHP contains all the disclosures, except the price.

* After SEBI’s vetting, a price band is added, along with issue dates, to make it a
Red Herring Prospectus.
 Abridged Prospectus
* Abridged Prospectus is an abridged version of Offer Document in IPO and is
issued along with the application form of a public issue.
* Abridged Prospectus contains all the important features of the prospectus.
* The price at which the shares would be offered to the public is left to be decided
r’s
between the Company and the Investment Banker.
* IPO shall be kept open for at least 3 working days but not more than 10 working
days.
* A Retail Individual Investor can invest maximum of Rs. 2 lakh in an Initial
Public Offering - IPO
ha
* The successful completion of an IPO leads to the listing and trading of the
 Green Shoe Option
E
company’s shares at the designated stock exchanges.
d
* Green Shoe option means an option of allocating shares in excess of the shares
included in the IPO and operating a post-listing price stabilizing mechanism for
ee
a period not exceeding 30 days.

 ASBA
C
* Application Supported by Blocked Amount is a process developed by SEBI for
applying to IPO.
Sr
* If an investor apply for an IPO via ASBA, his / her application amount gets
blocked in Investor’s bank account.
* While the amount stays in investor’s account, it cannot be used until the share
allotment is done.
* The money is debited from the bank account only if Investor’s application is
C
selected for allotment. And, the remaining amount, if any, is freed for use.
* Under ASBA facility, investors can apply in any public/ rights issues by using
their bank account.
* It is mandatory for all public issues opening on or after January 01st, 2016.
* ASBA provides an alternative mode of payment in issues whereby the application
money remains in the investor’s account till finalization of basis of allotment in
the issue.
* This prevents the headache of having to wait for a refund from the issuing
company.
::2::

 FPO
* Follow on Public Offering - FPO is when an already listed company makes a
fresh issue of securities to the public through an Offer Document.
 OFS
* Offer for Sale - OFS is another form of share sale, very much similar to Follow-
r’s
On Public Offer - FPO.
* It facilitates the promoters of an already listed company to sell or dilute their
existing shareholdings through an Exchange based platform.
* Offer for Sale facilitates promoters to dilute / offload their holding in listed
companies.
 Secondary Market
ha
* Securities are listed on the Stock Exchange after the Public Issue, so they can
be traded between investors who may like to buy or sell them.
E
* The Stock Market is also called the Secondary Market, because investors pur-
d
chase and sell securities among themselves, without engaging with the Issuer.
 Primary Market vs Secondary Market
* Primary Market enables the issuer to raise capital, the Secondary Market en-
ee
ables liquidity for securities bought by investors to subscribe to such capital.

* The Secondary Market is where securities once issued are bought and sold
between investors.
C
* Secondary Markets provide liquidity and marketability to existing securities.
Sr
* Secondary Markets are regulated under the provisions of the Securities Con-
tract Regulations Act, 1956.
 Stock Exchange
The core component of any Secondary Market is the Stock Exchange.
* Bombay Stock Exchange - BSE
* National Stock Exchange - NSE
C
* Metropolitan Stock Exchange - MSE
Oldest Stock Exchange in the World – Amsterdam Stock Exchange - 1602
Largest Stock Exchange in the World – New York Stock Exchange - NYSE
 Market Indices
* A Stock Market Index is viewed as a barometer of economic performance.
* It tracks the market movement by using the prices of a small number of shares
chosen as a representative sample.
* A sustained rise in key market indices indicate healthy revenues, profitability,
capital investment and expansion in large listed companies, which in turn im-
plies that the economy is growing strongly.
* A continuous decline or poor returns on indices is a signal of weakening eco-
nomic activity
::1::
 Major Global Indices

* USA - Dow Jones Industrial Average, NASDAQ, S&P 500
* France - CAC
* Germany - DAX
* UK - FTSE
* Japan - Nikkei
* China - SSE Composite Index
* Hong Kong - Hang-Seng
* Singapore - Strait Times Index
r’s
* South Korea - Kospi
* Brazil - Bovespa
* Russia - MICEX
* Pakistan - KSE
* Bangladesh - DCI
* Indonesia - IDX
ha
* Malaysia – KLCI
* Australia – ASX
* Switzerland – SMI
E
d
 Clearing Corporation
* Clearing Corporations (aka Clearing Houses) are set up as independent
fully?owned subsidiaries of Stock Exchanges.
ee
* They function as counter?parties for all trades executed on the exchange.

 Custodian
* Custodians are institutional intermediaries, who are authorised to hold funds
C
and securities on behalf of Large Institutional Investors.
Sr
* Large Institutional Investors such as Banks, Insurance Companies, Mutual Funds,

and Foreign Portfolio Investors.
* They settle the Secondary Market trades for institutional investors.
 Market Capitalization
* Market Capitalisation - M- Cap of a company is the number of shares outstand-
ing multiplied by the market price per share.
C
* The Market Cap of a company measures the size of a company in terms of share
value.
 Blue-chip Stock
* Blue-chip Stocks represent the largest companies by market cap that also enjoy
a high level of liquidity.
* Blue-chip Stocks are also called Large cap Stocks.
* These are stocks of well-established companies that have been around for years.
* Large-cap Companies have strong market presence and their stocks are gener-
ally considered to be very safe i.e. low risk.
 Mid cap Stocks
* Mid cap Stocks refer to those companies which enjoy a good level of liquidity but
are medium in terms of size.
::2::
* These companies are considerably smaller than large-cap companies in all fields

of comparison – revenue, profitability, employees, client base, etc.
 Small cap Stocks
* Small cap Stocks are those stocks that are smaller in size and therefore do not
enjoy much liquidity.
* These stocks are considered to be a highly risky investment.
 Depository
* For a security to be eligible to trade in the Secondary Markets, it should be held
in Dematerialised Form.
r’s
* A Depository is an organisation which holds securities (like Shares, Deben-
tures, Bonds, G-Secs, Mutual Fund Units etc.) of investors in electronic form.
 NSDL
* National Securities Depository Ltd. was established in 1996.
* It is the first depository established in India.
ha
* NSDL Headquarters located in Mumbai, Maharashtra.
 CDSL
* Central Depository Services Ltd. was established in 1999.
E
* CDSL Headquarters located in Mumbai, Maharashtra.
d
 Demat Account
* Securities are held electronically in a Dematerialized Account, instead of the
investor taking physical possession of certificates.
ee
* Demat Account is a safe and convenient means of holding securities just like a
bank account is for funds.
* This account provides the facility of holding securities in electronic format.
C
***
Sr
C
::3::
SECURITIES MARKET & ITS PRODUCTS PART – 4

 Animals in Stock Market
 Bull
* A market trend in which share prices are rising, encouraging buying.
* It depicts investors who are optimistic about future prospects of the stock mar-
ket.
 Bear
r’s
* A market trend in which share prices are falling, encouraging selling.
* It depicts investors who are pessimistic about future prospects of the stock
market.
 Stag
* Stags buy the shares of a company’s IPO, and sell them as soon as the stock is
ha
listed and trading commences.
 Chicken
* The term chicken is used for an investor who is afraid to take risks.
* Their risk tolerance in investment terms is very low.
 Pig
E
d
* The term Pig is used for an investor who is often seen as greedy, impatient,
emotional & willing to take a high risk
 Wolf
ee
* The name is given to those powerful individuals/group of individuals who resort

to clearly unethical and criminal means to make money.
 Sheep
* The term sheep is used for an investor stick to an investing style and never
C
adapt to changing marketing conditions.
Sr
 Ostrich
* An Investor stop looking at his / her portfolio and ignore any news about it
during bad times and hope that their portfolio hasn’t been hit badly.
 Anchor Investor
* Anchor Investors or Cornerstone Investors are Institutional Investors like In-
surance Firms, Mutual Funds and Pension Funds Investors.
* Anchor Investors are invited to subscribe for shares ahead of the IPO to boost
C
the popularity of the issue and provide confidence to potential IPO.
 Angel Investor
* An Angel Investor is usually a high net worth individual who provides financial
backing for small start-ups or entrepreneurs.
 Dividend
* A Dividend is a distribution of a portion of a company’s earnings, decided by the
board of directors, to a class of its shareholders.
* If the board of directors decide not to declare a dividend, shareholders cannot
demand a dividend.
 Investment Banker
* Merchant Bankers, also called as Issue Managers, Investment Bankers, or
Lead Managers, engage in the business of issue management (i.e. IPO, FPO etc.)
::1::
* They evaluate the capital needs, structure an appropriate instrument, get in-
volved in pricing the instrument, and manage the entire issue process until the
securities are issued and listed on a Stock Exchange.
 Underwriter
* Underwriters are primary market specialists who promise to pick up that por-
tion of an offer of securities which may not be bought by investors.
 RTA
* Registrar & Share Transfer Agent maintain the record of investors for the
issuer.
* Every time the owner of a security sells it to another, the records maintained by
r’s
the issuer needs to incorporate this change.
 Investment Advisers
* Investment Advisors and distributors work with investors to help them make a
choice of securities that they can buy based on an assessment of their needs,
time horizon, return expectations and their ability to bear risk.
 Depository Receipt
ha
* A publicly listed company might want to raise money from foreign countries.
* So it will lists its securities to a foreign country’s stock exchange in form of
Depository Receipts - DR.
* To issue a DR, a specific quantity of underlying equity shares of a company are
E
d
lodged with a custodian.
 ADR
* An American Depositary Receipt is a stock that trades in the United States but
ee
represents a specified number of shares in a foreign company.

* Infosys Technologies is the first Indian company issued ADR in 1999.
 GDR
* Global Depository Receipt is an instrument in which company of domestic
C
country issues its shares outside the country.
Sr
* Reliance Industries is the first Indian company issued GDR in 1992.

ADRs are typically traded on a US stock exchanges, while GDRs are commonly
listed on European stock exchanges.
 IDR
* An Indian Depository Receiptis a receipt, declaring ownership of shares of
foreign company.
* These receipts can be listed in India and traded in Rupees.
C
* Standard Chartered Plc. is the first foreign company issued an IDR in India in
2010.
 FPI
* Foreign Portfolio Investment - FPI consists of securities and other financial
assets held by investors in another country.
* FPI is one of the common ways to invest in an overseas economy.
 FII
* Foreign Institutional Investors - FIIs are those institutional investors which
invest in the assets belonging to a different country other than that where these
organizations are based.
* It is an institution incorporated outside India which proposes to make investment
in Securities in India.
::2::
* FII’s must be mandatorily registered with the SEBI to deal in securities market.
 P-Note
* Participatory Notes are instruments issued by registered FII to overseas
investors, who wish to invest in the Indian stock markets without registering
themselves with the SEBI.
* These instruments are not open for Domestic Investors.
 IEPF
* Investor Education & Protection Fund - IEPF has been established for promotion
of investors’ awareness and protection of the interests of investors.
r’s
* Amounts in the unpaid dividend accounts of the companies, Matured deposits
with companies, Matured debentures with companies etc. remained unpaid and
unclaimed for a period of 7 Years from the date they became due for payment are
credited to the IEPF.
 Securities & Exchange Board of India
ha
*Securities & Exchange Board of India is the regulator of the Securities Market
&Commodity Market in India.
*SEBI was established on 12th April 1992.
*SEBI is a Statutory Body.
E
*It got statutory status on 30th January 1992.
d
*Originally, It was created as an Independent Body for regulating the Capital
Market in 1988.
ee
*In 2015, Forward Market Commission was merged with SEBI.

*SEBI headquarters located in Mumbai, Maharashtra.
*Regional Offices of SEBI located in Ahmedabad, New Delhi, Kolkata & Chennai.
*1st Chairman of SEBI – Mr. S.A. Dave
C
*Chairman of SEBI at present – Mr. Ajay Tyagi
Sr
 Functions of SEBI
*To safeguard the interest of the investors and to regulate Capital Market with
suitable measures.
*To eliminate malpractices of Securities Market.
*To check Insider Trading of Securities.
*To supervise the working of various trading organizations in Securities Market.
C
 SEBI is a responsible entity for the regulation of
Stock Exchanges, Mutual Funds, Depositories, Merchant Banking entities,
Commodity Exchanges, Foreign Institutional Investors - FIIs, Venture Capital Funds
- VCFs, Real Estate Investment Trusts - REITs, Alternative Investment Funds -
AIFs & Credit Rating Agencies - CRAs etc.
 SCORES
* SEBI Complaints Redress System facilitates investors to lodge their complaint
online with SEBI.
 NISM
* National Institute of Securities Market is an educational initiative of SEBI. It
was established in 2006 & it is located in Mumbai, Maharashtra.
::3::

 AIF
* Alternative Investment Fund is a privately pooled investment vehicle which
collects funds from sophisticated investors, whether Indian or foreign, for investing
it in accordance with a defined investment policy for the benefit of its investors.
 NIIF
r’s
* National Investment and Infrastructure Fund is India’s first infrastructure
specific investment fund that was set up by the Government of India in 2015.
* NIIF is India’s first-ever Sovereign Wealth Fund - SWF.
 VCF
ha
* Venture Capital Funds are investment funds that manage the money of investors
who seek private equity stakes in Start-ups and MSMEs with strong growth
potential.
* These investments are generally characterized as high-risk/high-return
opportunities.
E
d
 REIT
* Real Estate Investment Trusts allow individuals to invest in large-scale, income-
ee
producing Real Estate.

* These may include office buildings, shopping malls, apartments, hotels, resorts,
warehouses etc.
 Derivative Market
C
Sr
* Derivative is a contract whose value is derived from value of some other asset
known as underlying.
 Products in Derivative Market
* Forwards
* Futures
* Options
C
* Swaps
 Forwards
* Forward is a contractual agreement between two parties to buy/sell an underlying
asset at a certain future date for a particular price that is pre-decided on the
date of contract.
* Since Forwards are negotiated between two parties, the terms and conditions
of contracts are customized.
* These are Over-the-counter - OTC contracts.
 Futures
* A Futures contract is similar to a forward, except that the deal is made through
an organized and regulated exchange rather than being negotiated directly between
two parties.
::1::
* Indeed, we may say futures are exchange traded forward contracts.
* Futures contracts are standardized in nature.
* Contango is a situation where the futures price of a derivative contract is
higher than the expected Spot Price of the contract at maturity.
* Contango is also known as Forwardation.
* Backwardation is when the current price Spot Price of an underlying asset is
higher than prices trading in the futures market.
* When a market is in Contango, the forward price of a futures contract is higher
r’s
than the spot price.
* When a market is in Backwardation, the forward price of the futures contract is
lower than the spot price.
 Options
* An Option is a contract that gives the right, but not an obligation, to buy or sell
ha
the underlying on or before a stated date and at a stated price.
 Call & Put
* Call Option give the buyer the right but not the obligation to buy a given quantity of
E
the underlying asset, at a given price on or before a given future date.
d
* Put Option give the buyer the right, but not the obligation to sell a given
quantity of the underlying asset at a given price on or before a given date.
ee
 Swaps
* A Swap is an agreement made between two parties to exchange cash flows in
the future according to a prearranged formula.
* Swaps help market participants manage risk associated with volatile interest
C
Sr
rates, currency exchange rates and commodity prices.

 Participants in Derivative Market
* Hedger
* Speculator
* Arbitrageur
 Hedger
C
* Hedgers face risk associated with the prices of underlying assets and use
derivatives to reduce their risk.
* Corporations, investing institutions and banks all use derivative products to
hedge or reduce their exposures to market variables such as interest rates, share
prices, bond prices, currency exchange rates and commodity prices.
 Speculator
* Speculators try to predict the future movements in prices of underlying assets
(Stock, Currency etc.) and based on the view, take positions in derivative contracts.
 Arbitrageur
* Arbitrage is a deal that produces profit by exploiting a price difference in a
product in two different markets.
::2::

 Mutual Fund
* A Mutual Fund is a mediator that pools the money of several investors and
invests in Stocks, Bonds, Money Market Instruments and other type of Securities.
* The owner of a Mutual Fund units gets a proportional share of the funds gains,
losses, income & expenses.
r’s
* Unit Trust of India was the first Mutual Fund set up in India in the year 1964.
* UTI enjoyed a monopoly in the Indian Mutual Fund market until 1987.
* SBI Mutual Fund is the first Bank to introduce Mutual Fund concept in India –
* HDFC Mutual Fund is the largest Mutual Fund entity in India by AUM.
* A Mutual Fund is required to be registered with SEBI.
ha
* Minimum Capital requirement to establish an Asset Management Company is
Rs. 50 Crore.
 Advantage
* Simple to invest
E
* Gives higher returns
d
* Offers diversification
* Professional Management
* Offers liquidity
ee
* Well regulated
* Provides transparency
* Reduction of transaction cost

C
Disadvantage
Sr
* Mutual Fund Investments are subject to market risk

* No guarantee return
* Diversification of portfolio doesn’t maximize return
* Fluctuating return
* A Mutual Fund is set up in the form of a trust, which has sponsor, trustees,
Asset Management Company and custodian.
* Asset Management Company approved by SEBI manages the funds by making
C
investments in various types of securities.
* The AMC hires a professional money manager, who buys and sells securities in
line with the fund’s stated objective.
* Custodian, who is registered with SEBI, holds the securities of various schemes
of the fund in its custody.
 NFO
* A New Fund Offeris similar to an Initial Public Offer (IPO).
* Units of a mutual fund are first available for investing when the scheme is
launched in a New Fund Offer.
 Types of Mutual Fund (by Structure)
 Open Ended Fund
* An Open-ended Fund is one that is available for subscription and repurchase on
a continuous basis. These schemes do not have a fixed maturity period.
::1::
* Units sold continuously to public
* Fund size fluctuates over the time
* Units of scheme sells at Net Asset Value
 Close Ended Fund
* A Close Ended Fund has a predetermined maturity period. Unlike in open-
ended funds, investors cannot buy the units of a closed-ended fund after its New
Fund Offer (NFO) period is over.
* These schemes trades on Stock Exchanges
* Fixed fund size
* Predetermined maturity period
r’s
 Interval Fund
* Interval Schemes combine the features of open-ended and close-ended schemes.
 Type of Mutual Fund (by Nature)
 Equity Fund
ha
* Equity Funds invest maximum part of their corpus into equity holdings. These
are high risk investments and hence, are ideal for a longer time frame.
 Debt Fund
* Debt Funds invest in debt instruments to ensure low risk and provide a stable
income to the investors.
E
d
 Hybrid Fund
* Hybrid Fund invest in both Equity and Debt securities which are in line with
pre-defined investment objective of the scheme.
ee
* The equity portion provides growth while debt provides stability in returns.
 Multi-cap Fund
* An open ended equity scheme investing across large cap, mid cap, small cap
stocks is called Multi-cap Fund.
C
 Focused Fund
Sr
* An open ended equity scheme investing in maximum 30 stocks.

 Liquid Fund
*Liquid Funds aim at providing a high degree of liquidity and safety of the capital
to investors
* These funds are debt funds that invest in short?term assets such as T-Bills, G-
Secs, Repos, Certificates of Deposit, or Commercial Paper etc.
C
 Gilt Fund
* An open ended debt scheme investing in government securities across maturity.
 Index Fund
* An open ended scheme replicating/ tracking a specific index.
 NAV
* Net Asset Value is the actual value of one unit of a given Mutual Fund Scheme
on any given business day.
* The performance of a particular scheme of a mutual fund is denoted by NAV.
 Entry Load
* Entry load or Front-end load or Sales load is the charge collected at the time of
entering into the scheme.
 Exit Load
* An Exit Load or Back-end Load or Repurchase Load is the charge collected at
the time of redeeming.
::2::
* There are also schemes that do not charge any load and are called No Load
Schemes.
 Redemption Price
* Redemption Price is the price at which an investor sells back the units to the
Mutual Fund.
 SIP
* Systematic Investment Plan is a smart financial planning tool that helps investor
to create wealth, by investing small sums of money every month, over a period of
time.
* SIP is a method of investing a specific nominal amount regularly in a Mutual
r’s
Fund scheme.
 Advantage
* Disciplined savings
* Flexibility in Investment
ha
* Volatile market is good for SIP investor
* Rupee cost averaging
* Investment with small amounts
 ELSS
* Equity Linked Savings Scheme is a tax saving mutual fund.
E
d
* An open ended equity linked saving scheme with a statutory lock in of 3 Years
and tax benefit.
* The minimum investment in equity and equity related instruments shall be
ee
80% of total assets.

 ETF
* Exchange Traded Funds are essentially Index Funds that are listed and traded
on exchanges like Shares.
C
* An ETF is a basket of stocks that reflects the composition of an Index, like S&P
Sr
CNX Nifty or BSE Sensex.

 Commodity Exchange
* A Commodity Exchange is an organized, regulated market that facilitates the
purchase and sale of contracts whose values are tied to the price of Commodities.
 Bond Market
* Bond Market is where debt securities are issued and traded.
C
* It primarily includes Govt. issued securities & Corporate debt securities.
* Bond Market facilitates the transfer of capital (i.e. money) from savers to the
issuers that requires capital (medium to long term)
* The Bond Market alternatively referred as Debt Market, Credit Market or Fixed
Income Market.
* A Bond is a loan that bond holder makes to the bond issuer.
* Governments, Companies & Municipalities issue bonds when they need capital.
* Like a loan, a bond pays interest periodically and repays the principal at a
stated time known as Maturity.
* Every bond carries some risk that the issuer will default or fail to fully repay the
loan.
* If interest rates increases, bond prices will fall and yield on Bond will increase
* If interest rates decreases, bond prices will rise and yield on Bond will decrease.
::3::
 Investors may choose to buy bond for following reasons
* Capital preservation
* Fixed Income
* Diversification
* Potential hedge against an economic slowdown or deflation
* Bonds are issued by Govt. / Companies generally for a period of more than one
year to raise money by borrowing.
*Bonds as investment are less risky than Stocks, so these offer less return on
investment.
 Zero Coupon Bond
r’s
* Zero Coupon Bond doesn’t make coupon payments but is issued at a steep
discount.
* The bond is redeemed for its face value upon maturity also called Accrual Bond.
* Zero Coupon Bond do not pay any regular interest to the investor.
 Perpetual Bond
ha
* Perpetual Bond is a bond with no maturity date.
* Also known as Perps or Consol Bonds
* These bonds are not redeemable, they pay a steady stream of interest in forever.
 Subordinated Bonds
E
d
* Bonds which are given less priority as compared to other bonds of the company
in case of a close down are called Subordinated Bonds.
 Bearer Bond
ee
* Bearer Bond do not carry the name of the Bond Holder & anyone who possesses
the bond certificate can claim the amount.
 Serial Bond
* Bonds maturity over a period of time in instalments are called Serial Bonds.
C
 Masala Bond
Sr
* Masala Bonds are Rupee denominated borrowing issued by Indian entities in

overseas markets.
* Indian Corporates usually issue Masala Bonds to raise funds from foreign
Investors.
 Elephant Bonds
* Elephant Bonds are the 25 Year Sovereign Bonds in which people declaring
C
undisclosed income will be bound to invest 50%.
*The fund made from these bonds will be utilized only for infrastructure projects.
 Amortized Bond
* An Amortized Bond is a bond that repays part of the principal (i.e. Face Value)
along with the coupon payments.
* The principal balance of Amortizing Bond is reduced with each payment such
that it becomes Zero at maturity.
 Bullet Bond
* Bullet Bond is a bond that pays interest through periodic payments and the
principal amount at maturity through a single payment.
::4::

1. ASBA is a process developed by the India’s stock market regulator SEBI for applying
to Initial Public Offering – IPO. What does letter first A represents in an acronym
ASBA?
1) Applicable 2) Adjusted 3) Alternative 4) Application 5) Accepted
2. Related to capital market, Offer for Sale refers to ________
r’s
1) It is a mechanism where promoters of a listed company dilute their stake
through an exchange based platform.
2) A listed company comes out with a fresh issue of shares to the public to raise
funds.
3) An unlisted company raise capital from the public for the first time through
sale of shares.
ha
4) It means the admission of securities of a company to trading on a stock
exchange.
5) An existing shareholders are eligible to buy additional shares on a pro-rata
basis at a discount price.
3. Related to Securities Market, Which among the following entities maintain the
E
record of Investors for the issuer i.e. Company or Govt. body?
d
1) Depository Participant 2) Clearing Corporation 3) Trustee
4) Underwriter 5) Registrar & Share Transfer Agent
4. Related to Capital Market (aka Securities Market), _________ work with investors
ee
to help them to make a choice of securities that they can buy based on an
assessment of their needs, time horizon, return expectation and their ability to
bear risk.
1) Fund Manager 2) Credit Rating Agency 3) Stock Broker
4) Investment Adviser 5) Stock Exchange
C
5. Which among the following financial intermediaries typically work with
Sr
institutional investors i.e. Insurance firms, Mutual Fund entities, Foreign

Institutional Investors etc., holding securities & bank accounts on their behalf?
1) Registrar & Share Transfer Agent 2) Asset Management Company
3) Custodian 4) Depository 5) Investment Bank
6. As per market regulator SEBI guidelines, a company has to create DRR in case of
Debentures with maturity of more than 18 months. What does letter first R
denotes in an acronym DRR?
1) Restructuring 2) Redemption 3) Repurchase
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4) Responsibility 5) Risk
7. Which among the following term reflects the superior quality of instruments
issued by Government?
1) Junk 2) Gilt 3) Debenture 4) Swap 5) Option
8. Which among the following is not an example for Financial Intermediary related
to Securities Market?
1) HDFC Mutual Fund 2) Bombay Stock Exchange
3) National Securities Depository Ltd.
4) Securities & Exchange Board of India 5) SBI Capital Markets Ltd.
9. The securities that are already issued are available for subsequent purchases&
sales at _________
1) Depositories where they are held
2) Stock Exchanges where they are listed
3) Offices of capital market regulator SEBI
4) Workplace of Investment Banker
5) Authorised branches of Asset Management Companies
::1::
10. Which among the following securities are considered as rupee denominated
borrowings issued by Indian entities in overseas market?
1) T-Bill 2) Perpetual Bond 3) Masala Bonds
4) Subordinated Bonds 5) Sovereign Bond
11. Which among the following entities regulates Capital Market in India?
1) Securities Commission of India
2) Securities and Exchange Commission of India
3) Financial Services Commission of India
4) Securities and Exchange Board of India
5) India Securities Regulatory Commission
12. The term Systematic Investment Plan - SIP associated with which among the
r’s
following financial product?
1) Pension Fund 2) Mutual Fund 3) Recurring Deposit
4) Term Insurance Product 5) Employee Provident Fund
13. SCORES is a platform designed to help investors to lodge their complaints online
with SEBI, pertaining to securities market. SCORES stands for ________
ha
1) Securities Complaints Redress System
2) SEBI Complaints Redress System
3) Securities Complaints Resolution System
4) SEBI Complaints Resolution System
5) Securities Complaints Redress Service
E
d
14. Which among the following types of mutual fund schemes are designed for investors
looking for regular income from their investments and are unwilling to take risks?
1) Liquid Fund 2) Growth Fund 3) Equity Linked Savings Scheme
ee
4) Balanced Fund 5) Fund of Funds

15. Which among the following types of Mutual Fund product has Lowest Risk?
1) Gilt Fund 2) Diversified Equity Fund 3) Diversified Debt Fund
4) Hybrid Fund 5) Thematic Fund
C
16. A bond that is issued at a discount to the face value and redeemed at face value
Sr
is called ________
1) Zero Coupon Bond 2) Floating Rate Bond 3) Callable Bond
4) Puttable Bond 5) Amortizing Bond
17. A debt security that matures and is payable at periodic dates during its term or
life is called as ________
1) Inflation linked Bond 2) Floating Rate Bond 3) Subordinated Bond
4) Serial Bond 5) Bearer Bond
18. Related to Mutual Fund terminology, Gilt Fund refers to ________
C
1) Mutual Fund Scheme that offer tax benefit to investor and invest in equities.
2) Mutual Fund scheme that divide their investments between equity & debt.
3) Mutual Fund scheme that invest in a specific sector like Pharma, Banking, IT,
Infrastructure etc.
4) Mutual Funds invest only in Government Securities
5) Mutual Fund scheme invest a majority of money in Debt – Fixed Income i.e. G-
Sec, Debenture, Commercial Paper, Certificate of Deposit etc.
19. FCCBs are foreign currency denominated debt raised by companies in international
markets but which have the option of converting into equity shares of the company
before they mature. What does letter B represents in an acronym FCCB?
1) Borrowing 2) Bond 3) Balance 4) Budget 5) Benefit
20. QIP is a private placement of shares made by a listed company to certain identified
categories of investors known as QIBs. What does latter I denotes in an acronym
QIP?
1) Institutional 2) Investment 3) Internal 4) Industrial 5) Important
::2::
21. The document that confirms a trade executed on the stock exchange is called __
1) Confirmation Note 2) Delivery Note 3) Transaction Note
4) Contract Note 5) Execution Note
22. As per SEBI guidelines, a public issue will be open for a minimum of 3 and maximum
of ____ working days.
1) 5 2) 10 3) 21 4) 7 5) 14
23. ________ is a corporate action in which a company divides its existing shares into
multiple shares but the Market Capitalization remains same.
1) Dividend 2) Rights 3) Bonus 4) Split 5) Warrant
24. A statistical technique called VaR is used to measure the probability of loss of
value in a stock over a period, based on an analysis of historical prices and
r’s
volatility. What does letter V denotes VaR?
1) Value 2) Venture 3) Verification 4) Variation 5) Volatile
25. What is Amortizing Bond?
1) A bond that pays both principal and interest through periodic payments during
its term.
ha
2) A bond that pays interest through periodic payments and the principal amount
at maturity through a single payment.
3) A bond which entitle the bond holder to return the bond to the issuer on
specified dates before its maturity date.
4) A bond that allows issuer to redeem the bonds prior to their original maturity
date.
E
d
5) A bond where interest rate is not fixed, but re-set periodically with reference
to pre-decided benchmark rate.
26. In Finance Industry, What does meant by Hedging?
ee
1) The simultaneous buying and selling of securities in different markets.

2) It involves trading a financial instrument involving high risk, in expectation of
significant returns.
3) It is an investment strategy to reduce the risk of adverse price movements in
C
an asset.
4) It is the art of evaluating the intrinsic value of a stock to find long term investing
Sr
opportunities.
5) It is the study of chart patterns and statistical figures to understand market
trends and pick stocks accordingly.
27. VCF gives funding to the start-up company in exchange for equity in the start-up.
What does letter C denotes in an acronym VCF?
1) Credit 2) Capital 3) Commercial 4) Corporate 5) Cost
28. A significant benefit of Open Ended Mutual Fund Scheme as compared with Close
C
Ended Mutual Fund Scheme is __________
1) Gives higher returns 2) Professional Management
3) Well Regulated 4) Offers Liquidity 5) Offers Diversification
29. Which type of mutual fund schemes are qualified for tax exemption under section
80c of the Income Tax Act 1961 & offers twin advantage of capital appreciation
and tax benefit?
1) Thematic Funds 2) Fixed Income Funds 3) Index Funds
4) ELSS Funds 5) Balanced Funds
30. Debt Mutual Fund is a mutual fund scheme that invests in fixed income
instruments such as corporate and government bonds and money market
instruments etc. Objective of Debt Mutual Fund is __________
1) Low Risk & Stable Income 2) Protection of Principle
3) High Risk & To Generate High Return
4) Long Term Capital Appreciation 5) Low Risk with Higher Return
::3::
31. Capital Risk is the risk of an investor losing part, or all of their principal investment.
It is limited to the amount one has invested. Which one of the following portfolio
has the highest possibility of Capital Risk?
1) 60% Equity – 40% Debt 2) 80% Equity – 20% Debt
3) 40% Equity – 60% Debt 4) 20% Equity – 80% Debt
5) 50% Equity – 50% Debt
32. AUM is the total cumulative investment sum of a particular Mutual Fund. Expand
an acronym AUM.
1) Accounts Under Maintenance 2) Assets Under Management
3) Agreement Under Management 4) Agency Under Management
5) Advances Under Maintenance
r’s
33. ________ is the maximum amount of the capital for which shares can be issued by
the company to shareholders.
1) Subscribed Capital 2) Paid-up Capital 3) Initial Capital
4) Authorised Capital 5) Called up Capital
34. FMP is a type of mutual fund which has a set maturity date and can have an
ha
indicative return on our investment. These are generally used by companies and
large investors as a substitute to bank FDs. What does letter F represents in an
acronym FMP?
1) Funding 2) Facility 3) Fast 4) Fixed 5) Free
35. ISIN is a / an __________
E
d
1) Unique identification code for a Financial Institution across universe
2) Unique identifier for a Banking entity
3) Unique identifier for a Security across universe
ee
4) Unique identifier for a Book across universe

5) Unique identifier for a Stock Exchange across universe
36. Related to Stock Market terminology, The term Bullish indicates __________
1) Positive price action 2) Negative price action 3) Neutral price action
C
4) Volatile price action 5) Value Price action
Sr
37. Share is a unit of ownership of a company that may be purchased by an investor.

Investor in Stocks / Shares will have __________
1) Guaranteed return 2) Limited risk 3) Capital risk
4) Low to moderate risk 5) Liquidity
38. Which of the following account provides the facility of holding various securities
in electronic form?
1) Remat Account 2) No – Frill Account 3) Virtual Account
4) Demat Account 5) Automated Account
C
39. The Share price in Stock Exchange is decided by __________
1) Ministry of Corporate Affairs
2) Management of particular company
3) Buyers and Sellers of the particular share
4) Government of India 5) Securities & Exchange Board of India
40. NIIF is a fund created by the Government of India for enhancing infrastructure
financing in the county. Expand the acronym NIIF?
1) National Industrial & Infrastructure Fund
2) National Investment & Infrastructure Fund
3) National Infrastructure & Intellectual Fund
4) National Innovation & Infrastructure Fund
5) National Infrastructure & Integrated Fund
::4::
41. Blue Chip Stocks are the __________
1) Stocks which are growing at a very fast rate compared to its competitors and
industry
2) Stocks of those companies which gives highest dividends
3) Stocks of those companies which gives highest capital appreciation
4) Stock which are undervalued and trading at lower prices
5) Stocks of nationally recognized, well established and financially sound companies
42. In Mutual Fund Industry, Investors can use STP as a defence mechanism in
volatile market. This plan is used to switch investment from one asset or asset
type into another asset or asset type. What does letter T denotes in an acronym
STP?
1) Transaction 2) Transfer 3) Trade 4) Term 5) Time
r’s
43. A ________ is a form of security that indicates the holder has proportionate
ownership in the issuing company.
1) Certificate of Deposit 2) Commercial Paper3) Debenture
4) Share 5) Mutual Fund
44. ETF is a marketable security that tracks a stock index, a commodity, bond etc.
ha
what does letter T denotes in an acronym ETF?
1) Time 2) Transfer 3) Traded 4) Taxation 5) Transaction
45. SIP is a facility offered by Mutual Funds to the investors to invest in a disciplined
manner. What does letter S depicts in an acronym SIP?
1) Structured 2) Special 3) Securities 4) Savings 5) Systematic
46. An unlisted company raise capital from the public for the first time is called IPO.
E
d
What does letter I denotes in an acronym IPO?
1) Initial 2) Immediate 3) Introductory 4) Inaugural 5) Issuer
47. PE Funds are pools of capital to be invested in companies that represent an
ee
opportunity for a high rate of return. What letter E denotes in an acronym PE

Fund?
1) Exchange 2) Earning 3) External 4) Economic 5) Equity
48. Which of the following term is used for an investor who is often seen as greedy,
impatient, emotional & willing to take a high risk?
C
1) Bull 2) Bear 3) Wolves 4) Sheep 5) Pig
Sr
49. QIB is a company that is usually actively involved in financial markets and
comprised of sophisticated financial investors. What does letter B denotes in an
acronym QIB?
1) Buyer 2) Borrower 3) Balance 4) Business 5) Bank
50. Which of the following entitles the holder to a fixed dividend, whose payment
takes priority over that of ordinary share dividends?
1) Debenture 2) Preference Share 3) DVR Share
4) Depository Receipt 5) Treasury Bill
C
51. KSE- 100 is the stock market index of which of the following country?
1) Bangladesh 2) Pakistan 3) Indonesia 4) Russia 5) Brazil
52. BOVESPA is the benchmark index of about 60 stocks. It is the stock market index
of ________
1) Bangladesh 2) Brazil 3) Belgium 4) Russia 5) Spain
53. ASBA is a facility while applying / submitting an application for purchase of shares
under a public issue. What does S represents in an acronym ASBA?
1) Supported 2) Submitted 3) Sanctioned 4) Scrutinised 5) Supplied
KEY
1.4 2.1 3.5 4.4 5.3 6.2 7.2 8.4 9.2 10.3 11.4 12.2 13.2
14.1 15.1 16.1 17.4 18.4 19.2 20.1 21.4 22.2 23.4 24.1 25.1 26.3
27.2 28.4 29.4 30.1 31.2 32.2 33.4 34.4 35.3 36.1 37.3 38.4 39.3
40.2 41.5 42.2 43.4 44.3 45.5 46.1 47.5 48.5 49.1 50.2 51.2 52.2
53.1
::5::

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Sreedhar’s CCE BANKING AWARENESS

INDIAN BANKING SYSTEM PART - 3

 Small Finance Bank

 Small Finance Banks

* Capital Small Finance Bank – Jalandhar, Punjab

* North East Small Finance Bank – Guwahati, Assam

* 2014 - ING Vysya Bank - Kotak Mahindra Bank

* 2020 - Andhra Bank & Corporation Bank – Union Bank of India

4) YES Bank 5) HDFC Bank

INDIAN BANKING SYSTEM PART - 2

* Axis Bank (UTI Bank) – Mumbai, Maharashtra

* Yes Bank – Mumbai, Maharashtra

* United Overseas Bank – Singapore

* Commonwealth Bank – Australia

 Financial Resources of a RRB

* These institutions are formed at village level or town level.

 State Cooperative Bank

 Who are eligible to apply Payments Bank license?

* Payments Bank is not allowed to accept deposits from NRI customers.

Fund & Pension Fund products etc.

INDIAN BANKING SYSTEM PART - 1

called Imperial Bank of India.

An Amalgamation is a combination of two or more entities into a new entity.

 Scheduled Commercial Bank

 Largest Bank in the World by total assets

5. State Bank of Bikaner & Jaipur

* SBI General Insurance

* Union Bank of India – Mumbai, Maharashtra

* Indian Overseas Bank – Chennai, Tamil Nadu

* Punjab &Sind Bank

It’s Headquarters located in New Delhi.

INDIAN BANKING SYSTEM PART - 4

1) Central Government 2) State Government

1) 7% 2) 8% 3) 10% 4) 12% 5) 15%

22. _________ is the largest bank in the world by total assets?

Bank of India and which of the following?

1) Union Bank of India 2) Bank of Baroda 3) Corporation Bank

4) Syndicate Bank & Dena Bank

IMPORTANT INTERVIEW QUESTIONS

1. What is the importance of Banking in an economic growth?

3. What is the difference between Amalgamation & Merger?

4. When a Banking entity considered as Public Sector Bank?

5. What is the difference between Associate & Subsidiary?

6. What were the objectives behind the nationalization of Banks?

8. Why Small Finance Bank concept was initiated?

9. Tell us something about Nationalization of Banks in India

12. What are the milestones in Independent India’s Banking Sector?

14. What is Lead Bank Scheme? Why it was initiated?

16. What is the difference between Bank and NBFC?

17. When a banking entity can be considered as Schedule Commercial Bank?

20. What type of functions can performed by Payment Banks?

RESERVE BANK OF INDIA PART - 1

* South Africa - South African Reserve Bank

* 4 Local Board Offices – New Delhi, Mumbai, Kolkata & Chennai

Security Printing and Minting Corporation of India Limited

RESERVE BANK OF INDIA PART - 2

April, June, August, October, December &February

denomination of the note in 15 different languages.

Imperfect Banknote - Any banknote, which is wholly or partially, obliterated,

* November 2016 - Rs. 500 & Rs. 1000

RESERVE BANK OF INDIA PART - 3

* Normal WMA are Clean Advances.

* Interest Rate for WMA is currently charged at the Repo Rate.

joint venture between &