Exercise Quiz & Test – 19


1. Insurances service provided by various bank is commonly known as:
a. Investment banking
b. Portfolio management
c. Merchant banking
d. Banc assurance

View Answer
d. Banc Assurance
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The bank insurance model (BIM), also sometimes known as bancassurance, is the partnership or relationship between a bank and an insurance company whereby the insurance company uses the bank sales channel in order to sell insurance products, an arrangement in which a bank and an insurance company form a partnership so that the insurance company can sell its products to the bank’s client base.
BIM allows the insurance company to maintain smaller direct sales teams as their products are sold through the bank to bank customers by bank staff and employees as well.

2. What is the full form of NBFC as used in the financial sector?
a. New banking finance company
b. National banking and Finance Corporation
c. New business finance and credit
d. Non of these

View Answer
d. Non of these
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A Non-Banking Financial Company (NBFC) is a company registered under the Companies Act, 1956 engaged in the business of loans and advances, acquisition of shares/stocks/bonds/debentures/securities issued by Government or local authority or other marketable securities of a like nature, leasing, hire-purchase, insurance .

3. In India, the bank NABARD does not provide refinance to:
a. Scheduled commercial banks
b. Regional rural banks
c. State land development banks
d. Export-import bank

View Answer
d. Export-import bank
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Criteria for Refinance :
Technical Feasibility of the project
Financial viability and bankability
Organisational arrangements for credit supervision

4. Which of the following public sector bank emblem figures a dog and the words ‘faithful, friendly’ in it ?
a. Punjab National Bank
b. Oriental Bank of Commerce
c. Syndicate bank
d. SBI

View Answer
c. Syndicate bank

5. If the Cash Reserve Ratio (CRR) is lowered by the RBI, its impact on credit creation will be:
a. Increases
b. Decreases
c. No impact
d. Non of these

View Answer
a. Increases
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The Cash Reserve means, RBI informs the banks to maintain particular cash as reserve. So if the reserve ratio is lower then the bank can utilize those cash for credit purpose.

6. Which one of the following is a private bank?
a. Allahabad bank
b. Punjab and Sind bank
c. Punjab National Bank
d. Punjab Bank

View Answer
d. Punjab Bank

7. Which of the following pairs is not correctly matched?
a. SEBI … Security Market regulatory body
b. RBI … Banking regulatory authority
c. SBI … Commercial bank
d. IDBI … World bank

View Answer
d. IDBI … World Bank

8. ‘Repo Rate’ is the rate at which:
a. The RBI lends to state government
b. The international aid agencies to RBI
c. The RBI lends to banks
d. The banks lend to RBI

View Answer
c. The RBI lends to banks
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Repo rate is the rate at which the central bank of a country (RBI in case of India) lends money to commercial banks in the event of any shortfall of funds.

9.A customer wishes to purchase some US dollars in India. She/he should go to:
a. Public Debt Division of the RBI only
b. American Express Bank only
c. RBI or any branch of a bank which is authorized for such business
d. Ministry of foreign affairs

View Answer
c. RBI or any branch of a bank which is authorized for such business

10.Which amongst the following organizations make major credit policies for the RRBs ?
a. NABARD
b. Asian development bank
c. World bank
d. SBI

View Answer
a. NABARD
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Role of NABARD
It is an apex institution which has power to deal with all matters concerning policy, planning as well as operations in giving credit for agriculture and other economic activities in the rural areas.
it is a refinancing agency for those institutions that provide investment and production credit for promoting the several developmental programs for rural development.
It is improving the absorptive capacity of the credit delivery system in India, including monitoring, formulation of rehabilitation schemes, restructuring of credit institutions, and training of personnel.
It co-ordinates the rural credit financing activities of all sorts of institutions engaged in developmental work at the field level while maintaining liaison with Government of India, and State Governments, and also RBI and other national level institutions that are concerned with policy formulation.
It prepares rural credit plans, annually, for all districts in the country.
It also promotes research in rural banking, and the field of agriculture and rural development.