DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

Question Bank - Multiple Choice Questions (MCQs)

Unit 1: Introduction to Banking
1) ____________ allocates saving efficiently in an economy to ultimate users
either for investment in real assets or for consumption.
a) Economic system
b) Banking system
c) Financial system
d) Market system

2) Which of the following is not a regulatory institution in Indian financial system?

a) RBI
b) CIBIL
c) SEBI
d) IRDA

3) _____________ is regarded as a queen of Indian financial system.

a) SEBI
b) RBI
c) Finance Ministry
d) BSE

4) National Housing bank is a fully owned subsidiary of___________.

a) HDFC
b) HSBC
c) RBI
d) HUDCO

5) Financial institutions are also known as ______________.

a) Financial organization
b) Financial intermediaries
c) Financial system
d) Any of the above

6) ____________is the first development financial institution in India.

a) IDBI
b) ICICI
c) IFCI
d) RBI

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

7) IDBI was established in ____________.

a) 1948
b) 1954
c) 1992
d) 1964

8) ______________is an apex institution to coordinate, supplement and integrate the activities of all
existing specialized financial institutions.
a) IFCI
b) IDBI
c) RBI
d) SEBI

9) Which of the following is not an asset held by Commercial Banks?

a) Bills of Exchange
b) Current Account Deposits
c) Money Lent at short Notice
d) Credit Balances with the Reserve Bank

10) Which of the following combinations is correct?

a) NABARD--------Industrial Loan
b) RBI---------------Long term Finance
c) RRB---------------Agriculture Finance
d) IDBI---------------Short Term Loans

11) Which of the following is not an organized sector in India?

a) Nationalized Banks
b) Regional Rural Banks
c) Cooperative Banks
d) Chits and Money lenders

12) In which year was the Banking Regulation Act passed?

a) 1949
b) 1955
c) 1959
d) 1969

13) When did the National Bank of Agriculture and Rural Development establish?
a) July, 1982
b) July, 1969

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

c) June, 1951
d) June, 1961

14) Which of the following is the apex institution which handles refinance for agriculture and rural
development in India?
a) RBI
b) SIDBI
c) NABARD
d) RBI

15) At which of the following cities is the Head Office of Reserve Bank of India located?
a) Mumbai
b) New Delhi
c) Kolkata
d) Dehradun

16) “Scheduled bank” in India means a bank _____.

a) Incorporated under the Companies Act, 1956
b) Authorized to the Banking business
c) Governed by the Banking Regulation Act, 1949
d) Included in the Second schedule to the Reserve Bank of India Act 1934

17) Which is the largest commercial bank in India?

a) Bank of India
b) Axis Bank
c) State Bank of India
d) HDFC

18) Co-operative Societies Act was enacted in which year?

a) 1912
b) 1949
c) 1935
d) 1913

19) With whom does the ownership of Public sector banks rest?
a) Government of India
b) Jointly with Government of India and share-holders from the public
c) Jointly with Government of India and State Bank of India
d) Jointly with Government of India and Reserve Bank of India

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

20) In which year was the Bank of Maharashtra established?

a) 1937
b) 1935
c) 1934
d) 1949

21) Urban Cooperative Banks are also called as?

a) Short-term co-operatives
b) Secondary Cooperative Banks
c) Primary Cooperative Banks
d) Long-term co-operatives

22) What is the full-form of NBFC?

a) Non-Bank Financial Competition
b) Non-Bank Foreign Company
c) Non-Banking Financial Company
d) Non-Banking Finance Corporation

23) Who insures banks in India?

a) IRDA
b) EXIM
c) DICGC
d) ECGC

24) How many developments banks are there in India?

a) 5
b) 6
c) 7
d) 8

25) Which is the largest commercial bank in India?

a) Bank of India
b) Axis Bank
c) State Bank of India
d) HDFC

26) In which schedule are the scheduled banks of India listed in the RBI Act, 1934?
a) 1st
b) 2nd
c) 3rd
d) 4th

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

27) What is the main business of commercial banks?

a) Lending and deposits from public
b) Lending and deposits from cooperation
c) Both a and b
d) None

28) Which of these banks are not-for-profit banks owned by the depositor?
a) Cooperative Banks
b) Merchant Banks
c) Land Banks
d) None of the above

29) Which bank is known as banker’s bank?

a) RBI
b) SBI
c) PNB
d) NABARD

30) NBFI s refers to ……….

a) Non-Banking Financial Industries
b) Non-Banking Financial Institution
c) Net Banking Financial Industries
d) Net Banking Financial Institutions

31) DIGC refers to …………..

a) Deposit Industrial Guarantee Corporation
b) Development Insurance Guarantee Corporation
c) Development Industrial Guarantee Corporation
d) Deposit Insurance Guarantee Corporation

32) RBI ACT was comes in to existence……

a) 1934
b) 1935
c) 1948
d) 1945

33) When a deposit of money is received by the banker, the banker becomes the …………?
a) Creditor
b) Debtor
c) Receiver
d) Customer

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

34) When a deposit of money is received by the banker, the customer becomes the …………..?
a) Debtor
b) Creditor
c) Customer
d) Lender

35) Which bank is called lender of last resort?

a) Commercial bank
b) Agricultural bank
c) Industrial bank
d) Central bank

36) Which bank enjoys monopoly power of Note issue?

a) NABARD
b) Commercial Bank
c) Central Bank
d) None of these

37) Which is considered as the mother of all Central Banks?

a) Bank of England
b) Risks Bank of Sweden
c) Federal Reserve Bank
d) Reserve Bank of India

38) At which of the following cities is the Head Office of Reserve Bank of India located?
a) Mumbai
b) New Delhi
c) Kolkata
d) Dehradun

39) Regional Rural Banks were established in the year –

a) 1969
b) 1972
c) 1973
d) 1975

40) What is the present number of Local Area Banks in India?

a) 3
b) 4
c) 5
d) 6

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

41) Which of the following apex bodies regulates the RRBs?

a) RBI
b) NABARD
c) SIDBI
d) State Government

42) “Scheduled bank” in India means a bank _____.

a) Incorporated under the Companies Act, 1956
b) Authorized to the Banking business
c) Governed by the Banking Regulation Act, 1949
d) Included in the Second schedule to the Reserve Bank of India Act 1934

43) Which of the following is true about non-scheduled banks in India?

i. A non-scheduled bank does not have to maintain CRR with the RBI.
ii. Also it cannot lend money from RBI under LAF.
iii. The banks named under third schedule of RBI Act 1934, are non-scheduled banks.

a) Only i and iii are true

b) Only ii and iii are true
c) Only I and ii are true
d) All are true

44) Which is the first Regional Rural Bank in India?

a) Saurashtra Gramin Bank
b) Prathama Grameen Bank
c) Pallavan Grama Bank
d) Saptagiri Grameena Bank

45) Headquarters of National Housing Bank is located at:

a) Hyderabad
b) Lucknow
c) Mumbai
d) New Delhi

46) SlDBI was set up in ___ as a wholly owned subsidiary of

a) 1985 – EXlM
b) 1969 – RRB
c) 1975 – IFCI
d) 1990 – lDBI

47) Which of the following is not a function of a Bank?

a) To accept deposits
b) To waive loans

PROF. KAVITA PAREEK www.dacc.edu.in

 DNYANSAGAR ARTS AND COMMERCE COLLEGE, BALEWADI, PUNE – 45

Subject: Banking and Finance I (236 B) CLASS: SYB.Com (Sem – III) (2019 PATTERN)

c) To grant advances
d) To supply input to farmers

48) "Repo Rate" refers to the rate at which

a) RBI borrows short term money from the markets
b) Banks keeps the money with RBI
c) Bills are discounted by RBI
d) Forex purchased by RBI

49) In India the Commercial Banks are given licence of operation by

a) The Govt. of India
b) The Ministry of Finance
c) Reserve Bank of India
d) Banking Companies Regulation Act, 1949

50) The first Development Bank IFCI was established in

a) 1948
b) 1947
c) 1949
d) 1950

Answer Key:

1-c 2-b 3- b 4-c 5–b 6-c 7-d 8-b 9-b 10 - c

11 - d 12 - a 13 - a 14 - c 15 – a 16 - d 17 - c 18 - a 19 - a 20 - b
21 - c 22 - c 23 - c 24 - b 25 – c 26 - b 27 - c 28 - a 29 - a 30 - b
31 - d 32 - a 33 - b 34 - b 35 – d 36 - c 37 - a 38 - a 39 - d 40 - b
41 - b 42 - d 43 - a 44 - b 45 – d 46 - d 47 - d 48 - c 49 - d 50 - a

PROF. KAVITA PAREEK www.dacc.edu.in