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COMMERCIAL BANKS IN INDIAN ECONOMY

Q1.
In 1980, how many banks were nationalized:

6 
Correct Answer

None of the above

NEXT

Q2.
Find the odd man out from the following groups?

ICICI Bank, Canara Bank, Central Bank of India, Punjab National Bank, Indian Bank

Canara Bank, State Bank of India, Lakshmi Vilas Bank, Karur Vysya Bank, United Bank of India

Bank of India, Corporation Bank, Indian Bank, IDBI Bank, Axis bank

Bank of Maharashtra, Barclays bank, Oriental Bank of Commerce, Indian Bank, IDBI bank 
Correct Answer

Union Bank of India, Bank of India, Andhra Bank, Dena Bank, Indian Bank
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Q3.
Industrial Credit and Investment Corporation of India (ICICI) was established in :

1989

1990

1991 
Correct Answer

1992
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Q4.
When RBI came into existence on 1-4-1935, it was:

Privately Owned 
Correct Answer
 Governmental Owned

Privately + Governmental Owned

None of these
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Q5.
Which of the following is correct:

Reserve Bank of India Act, 1935

Reserve Bank of India Act, 1934 

Correct Answer

Reserve Bank of India Act, 1930

None of these
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Q6.
When did the banking crisis of 1913-1917 end?

1917

1949 
Correct Answer

1955

1959
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Q7.
What was the initial share capital of Reserve Bank of India?

` 5 Crore 
Correct Answer

` 10 Crore

` 15 Crore

` 20 Crore
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Q8.
Headquarter of World Bank is situated at:

Washington D.C. 
Correct Answer

Jeneva

Luanda

None of the above

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Q9.
In which year, Regional Rural Banks started working in India?

1970

1975 
Correct Answer

1978

1981
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Q10.
The actual return of an investor is reduced sometimes when the prices of the commodities go up all of
a sudden and in financial sector this type of phenomenon is known as

Probability risk 
Correct Answer

Market risk

Inflation risk

Credit risk

None of the above

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Q11.
Which among the following is correct about objectives of BFS:

To undertake cosolidated supervision of the financial sector

Financial Sector comprising commercial banks, financial institutions and non-banking finance companies

Both of above 
Correct Answer

None of these
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Q12.
What is/are the forms of deposit?

Demand Deposit

Term Deposit

Current Deposit

All of the above 

Correct Answer
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Q13.
The employees of the bank went on strike and when it comes to risk what do you mean by this?

Operational risk 
Correct Answer

Employee risk

Credit risk

Market risk

Systemic risk
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Q14.
Which among the following is correct about The Central Office of RBI:

Where Governor Sits

Where only Policies are formulated

Both A and B 
Correct Answer

None of these
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Q15.
The process of transformation of physical shares, commercial paper or certificate of deposit into
electronic form is called as:

Electronic clearing service

Electronic securitization

Share truncation
 Dematerialisation 
Correct Answer

None of the above

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Q1.
The Assets Liabilities committee in a bank makes the assessment of:

Liquidity risk 
Correct Answer

Credit risk

Operations risk

All the above

NEXT

Q2.
Which of the following is not a social assistance program launched by the Government of India?

National old age pension scheme;

Annapurna scheme

National family benefit scheme 

Correct Answer

Indira Gandhi National Disability Pension Scheme

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Q3.
Bank of Madura Limited merged with:

ICICI bank limited 

Correct Answer

UTI bank limited

HDFC bank limited

IDBI bank

None of the above

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Q4.
RBI takes certain steps to curb the menace of Inflation. In this context, which among the following will
not help RBI in controlling the inflation in the country?
 An increase in the Bank Rate

An increase in the Reserve Ratio Requirements

A purchase of securities in the open market 

Correct Answer

Increasing the Repo Rate

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Q5.
The actual return of an investor is reduced sometimes when the prices of the commodities go up all of
a sudden and in financial sector this type of phenomenon is known as ________.

Probability risk 
Correct Answer

Market risk

Inflation risk

Credit risk
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Q6.
Which bank has changed its name to AXIS bank limited?

Centurion bank

Times bank

Bank of Punjab Limited

Bank of Karad

UTI bank limited 

Correct Answer
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Q7.
The cash Reserve Ratio is to be maintained by commercial banks in the form of:

Balance in a special account with RBI 

Correct Answer

Cash in hand at branches

Balance with other banks

 All of the above
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Q8.
________ banks which accept deposits from the public and lend them mainly to commerce for short
periods?

Commercial Bank. 
Correct Answer

Industrial Bank.

Agricultural Bank.

Central Bank.
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Q9.
Indian commercial banks are categorised into:

Foreign bank

Public sector bank

Private sector bank

All of the above 

Correct Answer
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Q10.
Which among the following statement gives the most correct definition of “Lender of Last Resort”?

If a person or firm which is eligible to get a loan, does not get it from any commercial bank, may approach to Reserve
Bank of India for loan.

If the state governments are in crisis and need money for short term , they can approach RBI for this purpose

If a commercial bank is in crisis, it may place its reasonable demand for accommodation to Reserve Bank of India. 
Correct Answer

Whenever the government declares a debt relief, the RBI will have to bear the brunt of it.
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Q11.
What will be the impact on the cash reserves of commercial banks if RBI conducts a sale of
securities?

Increase

Decrease 
Correct Answer

Remain constant

Increase or decrease
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Q12.
Which of the following NBFC converted itself into a commercial Bank?

Tata Finance

Reliance Capital Trust

Birla Mutual

Kotak Mahindra 
Correct Answer
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Q13.
Which type of risk arises before a bank that trades in government securities?

Liquidity risk

Market risk 
Correct Answer

Credit risk

Trade risk
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Q14.
Basel II accord is mostly concerned with:

Central vigilance commission

Non performing assets

Capital adequacy ratio 

Correct Answer

Foreign direct investment

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Q15.
When ICICI Limited merged with ICICI bank?
 1st August 2000

1st August 2001

1st August, 2002 

Correct Answer

1st August, 2003

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Q1.
Which of the following is not the example of business to consumer (B to C) e-commerce?

Amazon.com

e-bay.com 
Correct Answer

dell.com

lastminute.com
Q2.

What is the full form of SWIFT?

Society for Worldwide Internet Financial Telecommunications.

Secret Wide Interbank Financial Telecommunications

Society for Worldwide Interbank Financial Telecommunications

None of the Above 

Correct Answer
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Q3.
The term e-commerce includes _____________

Electronic trading of Physical goods and intangibles such as information.

The electronic provision of services such as after sales support or online legal advice

All the steps involved in trade, such as on-line marketing ordering payment and support for delivery.

All of the above. 

Correct Answer
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Q4.
Which of the following are the benefits of E-marketing? (i) Speed (ii) Reach and Penetration
 i, ii, iii and iv only

ii, iii, iv and v only

i, iii, iv and v only

All i, ii, iii, iv and v 

Correct Answer
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Q5.
__________ is simply the use of electronic means to transfer funds directly from one account to
another, rather than by cheque or cash.

M-Banking

O-Banking

E-Banking 
Correct Answer

D-Banking
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Q6.
Which of the following is the largest community in classification of e-commerce?

Business to Business (B to B) 

Correct Answer

Business to Consumer (B to C)

Business to Government (B to G)

Government to Government (G to G)
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Q7.
_______ is the process of recreating a design by analyzing a final product.

Forward Engineering

Reverse Engineering 
Correct Answer

Backward Engineering

None of the above

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Q8.
The types of Business to Business e-commerce are__________

Direct selling and support to Business

Industry portals

Information sites about a industry

All of the above 

Correct Answer
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Q9.
Which of the following are the forms of E-banking? (i) Internet Banking (ii) Telephone Banking (iii)
Electronic Check conversion

i, ii, iii and iv only

ii, iii, iv and v only

i, iii, iv and v only

All i, ii, iii, iv and v 

Correct Answer
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Q10.
The telephone banking service includes ________ (i) Automatic balance voice out (ii) Inquiry all term
deposit account (iii) Direct cash withdraw (iv) Uti

i, ii, iii and v only

i, ii, iv and v only 

Correct Answer

ii, iii, iv and v only

All i, ii, iii, iv and v

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Q11.
Which of the following is the largest community in classification of e-commerce?

Business to Business (B to B) 

Correct Answer

Business to Consumer (B to C)

Business to Government (B to G)

Government to Government (G to G)
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Q12.
__________ is simply the use of electronic means to transfer funds directly from one account to
another, rather than by cheque or cash.

M-Banking

O-Banking

E-Banking 
Correct Answer

D-Banking
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Q13.
Which of the following are the forms of E-banking? (i) Internet Banking (ii) Telephone Banking (iii)
Electronic Check conversion

i, ii, iii and iv only

ii, iii, iv and v only

i, iii, iv and v only

All i, ii, iii, iv and v 

Correct Answer
PREVIOUS 

Q14.
What is the full form of SWIFT?

Society for Worldwide Internet Financial Telecommunications.

Secret Wide Interbank Financial Telecommunications

Society for Worldwide Interbank Financial Telecommunications

None of the Above 

Correct Answer
PREVIOUS 

Q15.
The types of Business to Business e-commerce are__________

Direct selling and support to Business

Industry portals

Information sites about a industry

All of the above 

Correct Answer
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Q1.
____________ is the risk where changes in market interest rates might adversely affect a bank’s
financial condition.

Interest rate risk 

Correct Answer

Profitability Management 
User Answer

Liquidity Management

None of the above

NEXT

Q2.
________ refer to an account showing the net worth of a business at a specific point in time.

capital account 
Correct Answer

saving account

current account

None of the above

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Q3.
___________involves a daily analysis and detailed estimation of the size and timing of cash inflows
and outflows over the coming days and weeks to minimize the risk that savers will be unable to
access their deposits in the moments they demand them.

Profitability Management

Liquidity Management 
Correct Answer

Interest rate risk Management

All of the above

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Q4.
The goal of ____________ is to maximise a bank's risk-adjusted rate of return by maintaining credit
risk exposure within acceptable parameters.

credit risk management 

Correct Answer

Profitability Management
 Liquidity Management

Interest rate risk Management

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Q5.
____________ is the process of planning and controlling the budget of a business.

Cost management 
Correct Answer

Profitability Management

Liquidity Management

Interest rate risk Management

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Q6.
The ___________is the net result of public and private international investments flowing in and out of
a country.

capital account 
Correct Answer

saving account

current account

None of the above

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Q7.
A _____________ is a national account that shows the net change in asset ownership for a nation.

capital account 
Correct Answer

saving account

current account

None of the above

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Q8.
Impending expenditures to help reduce the chance of going over budget.

Cost management 
Correct Answer

Profitability Management
 Liquidity Management

Interest rate risk Management

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Q9.
__________is most simply defined as the potential that a bank borrower or counterparty will fail to
meet its obligations in accordance with agreed terms.

Credit risk 
Correct Answer

Interest rate risk

Both A and B

None of the above

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Q10.
__________ refers to the ability of an institution to meet demands for funds.

Liquidity 
Correct Answer

Profitability

Profit

Loss
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Q11.
____________ is an analytic application that models business processes to accurately determine
process, product and customer cost and profitability.

Profitability Management 
Correct Answer

Liquidity Management

Interest rate risk Management

All of the above

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Q12.
Liquidity management means ensuring that the institution maintains sufficient cash and liquid
assets________

to satisfy client demand for loans and savings withdrawals

 to pay the institution’s expenses.

Both A and B 
Correct Answer

None of the above

PREVIOUS 

Q13.
Liquidity management means ensuring that the institution maintains sufficient cash and liquid
assets________

to satisfy client demand for loans and savings withdrawals

to pay the institution’s expenses.

Both A and B 
Correct Answer

None of the above

PREVIOUS 

Q14.
A _____________ is a national account that shows the net change in asset ownership for a nation.

capital account 
Correct Answer

saving account

current account

None of the above

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Q15.
Impending expenditures to help reduce the chance of going over budget.

Cost management 
Correct Answer

Profitability Management

Liquidity Management

Interest rate risk Management

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Q1.
As part of their ongoing activities, whose responsibility is to assess the system in place at individual
bank to identify, measure, monitor and control credit risk?
 Top level managers

Low level managers

Middle level managers

Supervisors 
Correct Answer

Q2.
What is risk?

Negative consequence that could occur 

Correct Answer

Negative consequence that will occur

Negative consequence that must occur

Negative consequence that shall occur

All of the above

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Q3.
Banks have new possibilities to manage credit concentrations and other portfolio issues including all
of the following mechanisms except:

Loan sales

Credit derivatives

Securitization programs

Primary loan markets 

Correct Answer
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Q4.
Risk management is responsibility of the

Customer

Investor

Developer

Project team 
Correct Answer
 Production team
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Q5.
Which of the following is the one way for a bank to deal with credit risk?

Charge all borrowers from the same industry an average rate or interest for that industry

Avoid making loans to borrowers from a broad spectrum and to specialize geographically and in specific industries

Add a mark-up to the cost of funds for a specific borrower based on the borrower's credit history

All loans within the conforming loan limit at the time of origination will continue to be deemed 
Correct Answer
PREVIOUS 

Q6.
Risk is a __________, not a certainty. It may or may not occur.

Possibility 
Correct Answer

Compulsory

Both A and B

None of the above

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Q7.
Risk is expressed in terms of probability and impact.

True

False 
Correct Answer
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Q8.
Which of the following holds your credit history, such as your first bank account, any credit cards you
have, or any applications for finance you may have made?

The Treasury Bureau

Bureau of Administration

Credit Reference Agency 

Correct Answer

Bureau of Diplomatic Security

PREVIOUS 
Q9.
Every risk has 100% likelihood. True or false.

True

False 
Correct Answer
PREVIOUS 

Q10.
A factor that could result in future negative consequences; usually expressed in terms of _________

impact

Likelihood

Both A and B 
Correct Answer

None of the above

PREVIOUS 

Q11.
RE represents what

Risk expense

Related expense

Risk exposure 
Correct Answer

Risk evaluation
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Q12.
A risk directly related to the test objects are________

product risks 
Correct Answer

Market risk

Financial risk

Delivery risk
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Q13.
Which of the following is an important way to reduce credit risks, especially in Inter-bank transaction?

Netting agreements 
Correct Answer
 Workplace agreements

Interagency agreements

Option agreements
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Q14.
Which of the following exposures include foreign exchange and financial derivative contracts?

Liquidity sensitive

Profitability sensitive

Market sensitive 
Correct Answer

Debt sensitive
PREVIOUS 

Q15.
The level of exposure has an immediate impact on which of the following?

Loss given default

Probability of default

Exposure at default 
Correct Answer

Maturity
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Q1.
Board’s of the Banks were entrusted with the overall responsibility for the management of risks and
required to decide the risk management policy and set limits for _____________

Liquidity

interest rate

foreign exchange

equity price risks.

All of the above 

Correct Answer
NEXT

Q2.
____________ seeks to limit risk to acceptable levels by monitoring and anticipating possible pricing
differences between a company’s assets and liabilities.

Asset Liability Management (ALM) 

Correct Answer

Human resource management

Financial management

Marketing management
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Q3.
The statement of structural liquidity was to be reported to the Reserve Bank, once a month, as on the
third ___________ of every month.

Wednesday 
Correct Answer

Monday

Tuesday

Friday
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Q4.
_________enables the calculation of market risk of a portfolio for which no historical data exists.

Value at Risk 
Correct Answer

Interest

Principle

None of the above

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Q5.
With the ________ of interest rates, banks were given a large amount of freedom to manage their
Balance sheets.

Deregulation 
Correct Answer

Regulation

Decomposition
 Separation
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Q6.
In case of ___________, excess liquidity can be deployed in money market instruments, creating new
assets & investment swaps etc.

+ve mismatch 
Correct Answer

–ve mismatch

Both A and B

None of the above

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Q7.
Through _____________ banks try to match the assets and liabilities in terms of Maturities and
Interest Rates Sensitivities so as to minimize the interest rate risk and liquidity risk.

Income tax

Financial management

Asset Liability Management (ALM) 

Correct Answer

Marketing management
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Q8.
ALM process involve in _____________

Identification

Measurement

management of risk Parameter

All of the above 

Correct Answer
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Q9.
_________ considers product pricing for both deposits and advances, the desired maturity profile of
the incremental assets and liabilities in addition to monitoring the risk levels of the bank

ALCO (Asset Liability Committee) 

Correct Answer
 BALCO

NALCO

None of the above

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Q10.
Gap Analysis is used to assess __________

interest rate risk

liquidity risk

Both A and B 
Correct Answer

None of the above

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Q11.
What is/are the pillars of ALM?

Information systems

Organization

Processes

All of the above 

Correct Answer
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Q12.
___________ is a technique of Asset – Liability management .

Gap Analysis 
Correct Answer

Cost Benefit Analysis

Pareto Analysis

Scenario Analysis
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Q13.
The Assets and Liabilities of the bank’s B/Sheet are nothing but future ______________
 Cash inflows

Cash outflows

Both A and B 
Correct Answer

None of them
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Q14.
______________is the administration of policies and procedures that address financial risks
associated with changing interest rates, foreign exchange rates and other factors that can affect a
company’s liquidity.

Asset Liability Management (ALM) 

Correct Answer

Human resource management

Financial management

Marketing management
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Q15.
______________ measures at a given point of time the gaps between Rate Sensitive Liabilities (RSL)
and Rate Sensitive Assets (RSA) (including off balance sheet position) by grouping them into time
buckets according to residual maturity or next re-pricing

Gap Analysis 
Correct Answer

Cost Benefit Analysis

Scenario Analysis

Six Sigma
PREVIOUS