Banking and Financial Awareness MCQ Quiz - Objective Question with Answer for Banking and Financial Awareness - Download Free PDF

The correct answer is Indian Police Service (IPS).

Key Points

• The Indian Police Service (IPS) is one of the three All India Services, established in 1948, replacing the Indian Imperial Police.
• IPS officers are recruited through the Union Public Service Commission (UPSC) Civil Services Examination, a highly competitive national exam.
• The rank of Assistant Superintendent of Police (ASP) is among the entry-level positions for IPS officers after completing their training at the Sardar Vallabhbhai Patel National Police Academy in Hyderabad.
• IPS officers are entrusted with maintaining law and order, crime prevention, investigation, and ensuring the implementation of laws in their jurisdiction.
• The central government appoints IPS officers to key positions like Director General of Police (DGP), Commissioner of Police, and other leadership roles in state and central law enforcement agencies.

Additional Information

• Union Public Service Commission (UPSC):
  • The UPSC conducts the Civil Services Examination annually to recruit candidates for various civil services, including IAS, IPS, and IFS.
  • The exam consists of three stages: Preliminary, Mains, and Interview.
  • IPS aspirants need to secure a rank high enough to choose the IPS cadre during the service allocation process.
• Sardar Vallabhbhai Patel National Police Academy (SVPNPA):
  • Located in Hyderabad, the SVPNPA is the premier training institution for IPS officers.
  • The training program includes physical fitness, law enforcement techniques, ethics, and leadership development.
  • IPS probationers undergo rigorous training to prepare for their roles in maintaining national security and public safety.
• Indian Civil Services:
  • The Indian Civil Services consist of All India Services (IAS, IPS, IFS) and Central Services (IRS, IRTS, etc.).
  • These services form the backbone of India's administrative framework, enabling governance and policy implementation.
• Roles of an IPS Officer:
  • Maintaining internal security and law enforcement in states and union territories.
  • Leading police forces, intelligence agencies, and central armed police forces (e.g., CRPF, BSF).
  • Handling sensitive assignments like anti-terrorism operations, cybercrime investigations, and disaster management.

The correct answer is Madurai, Tiruppur, Krishnagiri and Chennai.

Key Points

• Karur Vysya Bank (KVB) expanded its network in Tamil Nadu by inaugurating four new branches in December 2024.
• The newly opened branches are located in Madurai, Tiruppur, Krishnagiri, and Chennai, reflecting the bank's focus on increasing its presence in key cities of Tamil Nadu.
• KVB is one of the leading private sector banks in India, with its headquarters located in Karur, Tamil Nadu.
• This move aligns with KVB's strategy to enhance customer outreach and cater to the growing demand for banking services in urban and semi-urban areas of Tamil Nadu.
• The expansion supports the bank's vision of strengthening its foothold in South India, particularly in Tamil Nadu, where it has a significant customer base.

Additional Information

• Karur Vysya Bank (KVB):
  • Established in 1916, Karur Vysya Bank is one of India's oldest private sector banks.
  • It offers a wide range of banking and financial services, including retail, corporate, and agricultural banking products.
  • The bank has a strong presence in Tamil Nadu and other southern states of India.
• Tamil Nadu's Economy:
  • Tamil Nadu is one of the most industrialized states in India, with strong sectors like manufacturing, agriculture, and services.
  • The state is known for its robust banking network, supporting businesses and individuals alike.
• Branch Expansion in Banking:
  • Branch expansion helps banks reach underserved areas, improving financial inclusion and customer service.
  • It also enhances the bank's ability to provide personalized services and build stronger customer relationships.
• Digital Banking Initiatives:
  • KVB is actively embracing digital transformation, offering services like mobile banking, internet banking, and digital payments.
  • These initiatives cater to the evolving needs of tech-savvy customers and ensure seamless banking experiences.

The correct answer is 6.5%.

Key Points

• On 9 October 2024, the Reserve Bank of India (RBI) maintained the repo rate at 6.5% for the tenth consecutive time.
• The repo rate is the rate at which the RBI lends funds to commercial banks in case of a shortfall in liquidity.
• This decision was made during the bi-monthly monetary policy review by the RBI’s Monetary Policy Committee (MPC).
• The RBI has kept the repo rate unchanged since February 2023 to support economic growth while managing inflation.
• The unchanged repo rate reflects the RBI's focus on balancing inflationary pressures while fostering economic stability.

Additional Information

• Repo Rate:
  • The repo rate is a tool of monetary policy used by the central bank to control inflation and regulate liquidity in the economy.
  • A higher repo rate makes borrowing costlier for banks, thus reducing liquidity, while a lower rate encourages lending and increases liquidity.
• Monetary Policy Committee (MPC):
  • The MPC is responsible for setting the repo rate and ensuring price stability while supporting economic growth.
  • It consists of six members: three RBI officials and three external members appointed by the government.
• Inflation Targeting:
  • India has adopted an inflation-targeting framework, aiming to keep inflation within the range of 2-6%.
  • The unchanged repo rate reflects the RBI's commitment to this goal while addressing growth dynamics.
• Impact of Repo Rate on Economy:
  • An unchanged repo rate helps maintain stability in lending rates for businesses and consumers.
  • It influences sectors like housing, auto loans, and corporate borrowing, impacting overall economic activity.

Key Points

• ICICI Bank is a leading private sector bank in India known for its extensive range of financial services.
• In 2022, ICICI Bank signed an agreement with the National Minority Development and Finance Corporation (NMDFC) to develop financial accounting software and a mobile application.
• The software and mobile application are intended to streamline the process of receiving loan applications, processing them, and accounting for repayments from beneficiaries.
• This initiative aims to enhance the efficiency and transparency of financial operations within NMDFC, benefiting minority communities across India.

Additional Information

• National Minority Development and Finance Corporation (NMDFC)
  • NMDFC is a government-owned corporation under the Ministry of Minority Affairs, established to provide financial assistance for the economic development of minorities.
  • It offers concessional loans for self-employment and income-generating activities to individuals and organizations belonging to minority communities.
  • NMDFC's objective is to promote economic and developmental activities for the benefit of backward sections amongst minorities.
  • It plays a crucial role in uplifting minority communities by providing financial support and skill development programs.
• ICICI Bank
  • ICICI Bank is one of the largest private sector banks in India, providing a wide range of banking and financial services to corporate and retail customers.
  • It offers various financial products and services including savings and current accounts, loans, credit cards, insurance, and investment products.
  • ICICI Bank has a strong presence in India with a vast network of branches and ATMs, along with a significant international presence.
  • The bank is known for its technological innovations in banking, making financial services more accessible and efficient for its customers.

Key Points

• Vivek Joshi is an eminent member of the Finance Minister's Crack Squad responsible for strategic decisions.
• He plays a crucial role in the privatization of public sector banks.
• His extensive experience in financial policies and reforms has led to significant contributions to the sector.
• Vivek Joshi has been actively involved in various governmental financial initiatives aimed at economic stability and growth.

Additional Information

• Public Sector Banks (PSBs)
  • Public Sector Banks are banks where the majority stake is held by the government.
  • These banks play a pivotal role in the Indian economy by providing financial services to the underserved sectors.
  • PSBs are regulated by the Reserve Bank of India (RBI).
  • Examples include State Bank of India (SBI), Punjab National Bank (PNB), and Bank of Baroda.
• Privatization
  • Privatization refers to the process of transferring ownership and management from the public sector to the private sector.
  • It aims to improve efficiency, reduce government burden, and increase competition.
  • Privatization can involve selling government stakes, outsourcing services, or involving private entities in public services.
  • It is considered a strategic tool for economic reforms and growth.
• Finance Minister's Crack Squad
  • This is a team of experts appointed by the Finance Minister to tackle specific economic challenges.
  • The squad includes professionals from various fields like banking, finance, economics, and policy-making.
  • They are responsible for implementing crucial financial decisions and reforms.
  • Their goal is to ensure stability, growth, and transparency in the financial sector.
• Economic Stability and Growth
  • Economic stability refers to a condition where the economy experiences steady growth, low inflation, and low unemployment.
  • Economic growth is measured by the increase in a country's output of goods and services over time.
  • Policies promoting stability and growth include fiscal policies, monetary policies, and structural reforms.
  • These policies aim to create a conducive environment for investment, job creation, and sustainable development.

The correct answer is option 1 i.e., 1990

• SIDBI is the principal development financial institution for promotion, financing, and development of Micro, Small, and Medium Enterprises (MSME) sector in India.
• It was established on April 2, 1990, through an Act of Parliament.
• The headquarters of the SIDBI is located in Lucknow, Uttar Pradesh.
• It aims to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system across the country.
• It coordinates the functions of institutions engaged in similar activities.

The correct answer is Allahabad Bank.

• Allahabad Bank (nationalized bank) is the oldest joint stock bank in India.
• It was founded in Allahabad in 1865 and its headquarters in Kolkata, India.

Key Points

The correct answer is 14.

Key Points

• Nationalisation of Bank in India:
  • On July 19, 1969, Indira Gandhi who was both Prime Minister and Finance Minister at that time decided to nationalise the 14 largest private banks of the country. Hence, Option 1 is correct.
  • The largest and the oldest bank which is still in existence is the State Bank of India (SBI).
    • It originated and started working as the Bank of Calcutta in mid-June 1806.
    • In 1809, it was renamed the Bank of Bengal.
    • This was one of the three banks founded by a presidential government, the other two were the Bank of Bombay in 1840 and the Bank of Madras in 1843.
  • The three banks were merged in 1921 to form the Imperial Bank of India, which upon India's independence, became the State Bank of India in 1955.
  • For many years, the presidency banks had acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935, under the Reserve Bank of India Act, 1934.
  • In 1960, the State Banks of India was given control of eight state-associated banks under the State Bank of India (Subsidiary Banks) Act, 1959. These are now called associate banks. 
  • In 1969, the Government of India nationalised 14 major private banks; one of the big banks as Bank of India. In 1980, 6 more private banks were nationalised.
  • These nationalised banks are the majority of lenders in the Indian economy.
  • They dominate the banking sector because of their large size and widespread networks. 

• Allahabad Bank is the oldest public-Sector bank of India.
• It was established in the year 1865.
• Its current chairman of the bank is SS Mallikarjuna Rao.

Allahabad Bank has been merged with Indian Bank.

The correct answer is option 2 i.e Manmohan Singh.

• Manmohan Singh is the only Prime Minister to have also served as the Governor of RBI.
• He was the Governor of RBI from 1982-1985.

Facts to remember about RBI:

• The Reserve Bank of India was established on April 1, 1935 in accordance with the provisions of the Reserve Bank of India Act, 1934.
• The Central Office of the Reserve Bank was initially established in Kolkata but was permanently moved to Mumbai in 1937. The Central Office is where the Governor sits and where policies are formulated.
• Though originally privately owned, since nationalisation in 1949, the Reserve Bank is fully owned by the Government of India.
• The Reserve Bank of India (RBI) is India's central bank, which controls the issue and supply of the Indian rupee.
• RBI is the regulator of the entire Banking in India.
• Shaktikanta Das is the current governor of RBI.
• RBI's headquarters are in Mumbai. The RBI has four zonal offices at Chennai, Delhi, Kolkata and Mumbai.

Reserve Bank of India was established in the year 1935 after the recommendation of the Royal Commission under the chairmanship of Hilton Young.

• It was set up in 1935 under the Reserve Bank of India Act,1934.
• Until the Monetary Policy Committee was established in 2016, it also controlled monetary policy in India.
• The Reserve Bank of India is India's central bank, which controls the issue and supply of the Indian rupee.
• RBI was established in Calcutta but was moved to Bombay in 1937.

The correct answer Tertiary sector.

Key Points

• Banking comes under the tertiary sector.
• The tertiary sector, also known as the service sector includes transport, banking, storage, communication, etc.
• The primary sector is the one which is dependent on nature and makes use of raw materials. It includes agriculture, fishing, mining, etc.
• The secondary sector is concerned with manufacturing, construction, processing, etc.

The correct answer is ₹2,00,000.

Key Points

• Rs. 2,00,000 is the minimum amount that can be remitted through Real Time Gross Settlement (RTGS).
• The acronym "RTGS" stands for Real-Time Gross Settlement, which can be described as a mechanism where fund transfers are settled continuously and in real-time, individually on a transaction basis (without netting).
• "Real-Time" means the delivery of instructions at the time of receipt; "Gross Settlement" means the settlement of instructions for the transfer of funds happens separately.
• The RTGS system is intended specifically for large-value transactions.

The correct answer is 137%.

Key Points

• The allocation towards health and well-being was increased by 137% over the previous year in Union Budget 2021-22. 
• According to analysts, one of the sectors that have continually been neglected is "health."
• However, in her Budget 2021-22, Union Finance Minister Nirmala Sitharaman announced a 137 percent increase in the allocation for health from the previous year's budget estimate of over Rs. 94,000 crore (Rs. 94,452 crore) and a 118 percent increase from the previous year's revised budget of over Rs. 1.02 lakh crore (Rs. 1,02,873 crore).

Important Points

• The 2.23 lakh crore spending in Budget 2021 comprises allocations to the Ministry of Ayurveda, Yoga and Naturopathy, Unani, Siddha, and Homoeopathy, as well as the Ministry of Health and Family Welfare (MoHFW), which is the country's focal ministry for healthcare (AYUSH).
• To calculate the spending for health and wellness, the Finance Minister combined the amounts given under several categories of other ministries. 

• The National Bank for Agriculture and Rural Development (NABARD) is a financial, development institution and it is headquartered in Mumbai.
• The institution deals with Operations and Policy Planning in the Agriculture sector of rural areas. 
• It was formed on 12 July 1982 on the recommendations of the B. Sivaramman Committee.
• It was established under the National Bank for Agriculture and Rural Development (NABARD) Act 1981.