Quiz Sample Paper 1

Banking Practices and Regulations (Prof. K Ramasubramanian)

Quiz – 1

Marks – 10

Time – 10 Minutes

Closed Notes

1) Define the term banking (Answer – C)

a. An Institution dealing in finance

b. An institution which lends money

c. Acceptance of deposits of money withdraw able, for investment and lending

d. Institution accepting money withdraw able by cheque

2) Banks are allowed to engage in any kind of trading (No)

3) The tools of central bank are (Answer – E)

a. CRR

b. SLR

c. Bank Rate

d. Open Market Operations

e. All the Above

f. None

4) CRR is always, without change, a fixed ratio of the liabilities of a bank (No)

5) CRR and incremental CRR together are applied when

a. There is excess liquidity in the banking system

b. When the growth of deposits is far in excess of Central Bank estimates

c. When the interest rates are increasing

d. When the growth in deposits varies widely among the various banks

6) Members of the board of directors of a bank

a. Are elected by shareholders

b. May hold minimum number of shares in the bank

c. Are appointed by central bank or the Supervisory authority of banking

d. All the above

e. None of the above

7) Banks are classified only into 2 categories viz. Public sector banks and Private sector banks (Wrong)

8) The CEO of a bank is generally nominated by (Answer - C)

a. The central banking authority

b. The BOD of the bank

c. The shareholders of the bank

d. The statutory auditors of a bank

9) The profitability of a bank mainly depends on (Answer – D)

a. Risk Management

b. Efficient allocation of deposits

c. Fee based income

d. All the Above

e. None

10) Bank faces competition in mobilizing deposits from (Answer – D)

a. Mutual funds

b. NBFC

c. Chit funds and Nidhi Companies

d. All the Above

e. None