1. What would a clerk do if he finds that the amount written on a cheque, in words, and in digits is different?

A. Consider it as a stale cheque B. Clear the cheque by taking in account value written in words C. Clear the cheque by taking in account value written in digits D. Reject cheque and impose fine double the value of cheque E. None of the above

Answer: Option B
Explanation: As per section 18 of Negotiable Instrument Act, 1881 where an amount is stated differently in figures and words in the cheque the banker will clear the cheque by taking in account, the amount stated in words to be the amount undertaken or ordered value to be paid to the customer.
2. RBI is the lender of last resort which means ----- .

A. RBI advances money to Government whenever there is any emergency B. Commercial banks has to keep their funds with the RBI C. It comes to help banks in times of crisis D. All of the above E. None of the above

Answer: Option C
Explanation: A lender of last resort is an institution, usually a country's central bank that offers loans to banks or other eligible institutions against eligible securities that are experiencing financial difficulty or are considered highly risky or near collapse.
3. What is the effect of crossing a cheque in India?

A. The payee can obtain payment only through a bank account B. The payee is compelled to open an account C. The payee will have to endorse the cheque to a bank D. All of the above E. None of these

Answer: Option A
Explanation: When a cheque is crossed, it means that it is an instruction by the client to not pay the cheque directly over the counter but to a banker only for crediting the payees account with the bank.
4. Which of the following component of external sector comes under Current Account in India?

A. FDI B. Interest payments received by government C. External Commercial Borrowings D. FII E. NRI bank account

Answer: Option B
Explanation: The Balance of payments for a country is calculated by the difference of Capital Account and Current account. Both the accounts have different components included in it. Current Account: Components – Net Import-Export (Import minus Export); Incomes (Profits, Interests, Dividend); Transfers (Donations, Gifts. etc.) Capital Account: Components – Investment (FDI, FII); Loan (Government Borrowings, External commercial borrowings); Bank account transfers by NRIs, etc.
5. In Economics, the term Twin Deficit refers to ----

A. Inflation + Fiscal Deficit B. Current Account Deficit + Fiscal Deficit C. Capital Account Deficit + Fiscal Deficit D. Primary Deficit + Capital Account Deficit E. Revenue Deficit + Fiscal Deficit

Answer: Option B
Explanation: Twin Deficit= Current Account Deficit + Fiscal Deficit. In economics, a twin deficit occurs when a nation has both a current account deficit and a fiscal deficit. You can also call twin deficits a double deficit.

1. Recently, the Reserve Bank of India has allowed a one-time restructuring of existing debt up to ----- for the companies.

A. Rs. 50 Crore B. Rs. 10 Crore C. Rs. 100 Crore D. Rs. 25 Crore E. Rs. 5 Crore

Answer: Option D
Explanation: RBI has allowed a one-time restructuring of debt up to Rs. 25 Cr for the companies which have defaulted on payment, but the loans have classified as standard assets. It will help MSMEs which are facing a cash crunch due to demonetization & GST implementation. The restructuring has to be implemented by 31st of March 2020.
2. As per the report from Commerce ministry, Defense Industries received Rs. 1.21 Crore FDI. Foreign Direct Investment beyond ----- percentage has allowed through approval route in defense sector.

A. 26% B. 74% C. 42% D. 49% E. 69%

Answer: Option D
Explanation: In defense sector, FDI beyond 49% has allowed via approval route. FDI equity inflow of Rs 1.21 Cr has been reported in the sector namely 'Defense Industries' during the period 2014-2018. In 2013-14, 2014-15 and 2015-16, deference industries had received $0.82 million, $0.08 million, and $0.10 million foreign inflows, respectively.
3. Recently, the central government has decided to offer ----- interest subsidy to merchant exporters to boosting outbound shipment.

A. 2% B. 4% C. 6% D. 5% E. 3%

Answer: Option E
Explanation: Government decided to offer 3% interest subsidy to merchant exporters, entailing an expenditure of Rs. 600 Cr to enhance liquidity with a view to boosting outbound shipment. Agriculture, textiles, leather, handicraft & machinery would be benefited in this scheme.
4. The center has infused more than Rs. 51000 Crore in PSBs till December 2018 out of the budgetary allocation of Crore for 2018-19.

A. Rs. 60000 Crore B. Rs. 105000 Crore C. Rs. 85000 Crore D. Rs. 65000 Crore E. Rs. 90000 Crore

Answer: Option D
Explanation: Center has infused more than Rs 51,000 crore in public sector banks till December 2018 out of the budgetary allocation of Rs 65,000 crore for 2018-19. Non-Performing Assets in the banking sector were close to Rs 10 lakh crore at the beginning of FY19.
5. ICICI Bank and Small Business Fin Credit have joined hand to provide a loan worth up to Rs. 1 Crore for a tenure of ----- years per MSME customers.

A. 10 B. 12 C. 15 D. 20 E. 25

Answer: Option C
Explanation: ICICI Bank & Small Business Fin Credit signed a MoU to provide credit to small & medium enterprises. The loans of up to Rs. 1 Cr is for a tenure of 15 years per customer. ICICI Bank will co-originate loan against property with SBFC at a mutually agreed ratio.

1. For which of the following debt instruments, not having a fixed rate of interest over the life of the instrument, can ‘Floating Interest Rate’ be applied?

A. A loan B. A bond C. A mortgage D. A credit E. All of these

Answer: Option E
Explanation: An interest rate that is allowed to move up and down with the rest of the market or along with an index. This contrasts with a fixed interest rate, in which the interest rate of a debt obligation stays constant for the duration of the agreement. A floating interest rate can also be referred to as a variable interest rate because it can vary over the duration of the debt obligation.
2. Reserves which can act as liquidity buffer for commercial banks during crisis times are ------ ?

A. CAR B. CRR C. CAR and CRR D. CRR and SLR E. SLR

Answer: Option D
Explanation: The RBI has mandated banks to set aside corporation of their deposits as statutory liquidity ratio (SLR) or the minimum amount it must hold in gold, cash or government bonds. In addition banks have to set aside a portion of their deposits as cash with the central bank, a requirement called the cash reserve ratio. These reserves can act as a liquidity buffer for banks during crisis time.
3. Which one of the following is not a salient feature of debit card?

A. No bad debts to banks and no suits for recovery B. No interest earning for banks C. orks like a normal withdrawal slip D. 45 days credit is given to the card holder E. All of the above

Answer: Option D
Explanation: A debit card (also known as a bank card or check card) is a plastic payment card that provides the cardholder electronic access to their bank account(s) at a financial institution. Some cards may bear a stored value with which a payment is made, while most relay a message to the cardholder's bank to withdraw funds from a payer's designated bank account. The card, where accepted, can be used instead of cash when making purchases. In some cases, the primary account number is assigned exclusively for use on the Internet and there is no physical card.
4. Planning for Retirement Saving is a type of

A. Banking Option B. Stock Market Option C. Branding D. Financial Planning E. Mutual Fund Benefit

Answer: Option D
Explanation: Planning for Retirement Saving is a type of Financial Planning.
5. What are masala bonds?

A. Rupee denominated domestic bonds B. Rupee denominated overseas bonds C. Dollar denominated overseas bonds D. Dollar denominated domestic bonds E. None of these

Answer: Option B
Explanation: Masala bonds are rupee denominated overseas bonds. Masala bonds will help to internationalize the Indian rupee and also deepen the Indian financial system