Unit no.

07

Money and financial institutions

 Select the correct answer.

1. The notes and coins issued by the central bank of Sri lanka are called
1.limited legal tender
2. Unlimited legal tender
3.near money
4.fiat money
5.perfect money

2. An institution permitted by the central bank to accept deposits from the public is,

1. Merchant bank
2. Leasing company
3. Registered finance company
4. Unit trusts
5. Insurance company

3. Select the correct statement with regard to a cheque.

1. Always the drawer is a banker.

2. 2.cash can be obtained over the counter for a general crossing cheque.
3. A crossed cheque with the term “ not negotiable “ cannot be transferred.
4. Endorsement is not essential when transferring a bearer cheque.
5. A cheque can be crossed only by the drawer.

4.

X Y
A. Electronic 1. Treasury bills
money 2. Gold
B. Near money 3. Demand deposits
C. Currency 4. Notes and coins
D. Bank money 5. Credit cards
E. Commodity
money

Select the group that matches the types of money and examples correctly.

1. A1, B3, C2, D4, E5

2. A2, B4, C3, D1, E5
3. A2, B1, C4, D3, E5
4. A5, B3, C4, D1, E2
5. A5, B1, C4, D3, E2
5.Following are certain benefits and facilities available in a commercial bank.

A. Able to receive interest

B. Able to deposit cheques
C. Able to make payments
D. Able to obtain credit card
E. Able to get overdraft facilities

From the above, the number of benefits and facilities that can be obtained by a savings account
holder is......

1. 1 2. 2 3.3 4.4 5.5

6. From the following, the type of financial institution that cannot accept deposits is.....
1. Unit trusts
2. Licensed finance companies
3. Licensed financial companies
4. Licensed commercial banks.
5. Regional development bank
7. Following are certain components of an electronic credit card.
A. Logo of credit card association
B. Card no
C. Magnetic tape
D. Name of the card owner
E. Hotline no.
F. Expiry date
G. Signature tape

Out of the above, which group contains only the components on the face of an electronic card.

1. ABEF 2. ABDF 3. BCEG 4.CEFG 5.DEFG

8. A benefit gained only by the bank through an automated banking services is the ability to....
1. Save time
2. Earn more profits due to service expansion.
3. Pay bills easily
4. Obtain accounts information easily
5. Transfer money between accounts
9. Some of the functions of central bank of Sri lanka are given below.
A. Maintaining financial policies
B. Managing government debt.
C. Controlling foreign exchange
D. Functioning as the economic advisor of government.
E. Managing employees provident fund
F. Co-ordinating programs such as micro finance for the regional
development.

From the above functions, select the group which includes the agency functions of central bank.

1.ABCD 2. ABDF 3.ABEF 4.BCDE 5.BCEF

10. which of the following is not a contractual saving institutions?

1. Government service provident fund.

2. Employees provident fund
3. Specialised leasing companies
4. Insurance companies
5. Employee trust fund.

 Fill in the blanks

11. Licensed commercial banks can ....................................money but
cannot...............................money
12. While the current account holder becomes the ....................................of a cheque and a
person whose name is written on the cheque becomes the...............................................
13. According to the classification of financial institutions, while employees trust fund is a
............................ savings institution and venture capital companies are
...............................financial institutions.
14. A service provided by the commercial banks for securing valuables and documents of their
customers is known as ........................................................
15. Inter banks cheques clearance activities are conducted by the .............................................
16. After inserting the ATM card to the machine it is required to enter the
.................................................... to do a transaction.
17. ..........................................and ......................................... are two types of most popular
credits cards in the world at present.
18. Notes and coins issued on the orders of the financial authority are known as
..............................
19. .........................................................., .....................................................and
........................................ are the market intermediaries.
20. RTGS + SSDS = ............................................

 Write specific answers.

21. Name main functions of money?
22. What are the facilities are available for e card payments convenient?
23. What are the two main functions of Central bank?
24. What are the deposits related and loan related services of a commercial bank?
25. Name four services of a commercial bank?
26. What are the advantages of Automatic banking services to the bank?
27. Explain two types of cheques.
28. What are the differences between saving accounts and current accounts?
29. What are the advantages of using credit cards?
30. What is crossing of a cheque and endorsing of cheques?.