General Awareness

Banking and Financial Awareness: Practice Questions with Answers

106 practice questions on Banking and Financial Awareness, with answers; most also have an explanation or a worked solution. Try each one before you open its answer.

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1. Q.101

   What is an NRO (Non-Resident Ordinary) account primarily used for?

   1. A Depositing income earned within India, such as rent, dividends or pension
   2. B Depositing foreign income earned abroad
   3. C A term deposit held only in foreign currency
   4. D Receiving government subsidies only
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   Correct answer: (A) Depositing income earned within India, such as rent, dividends or pension

   An NRO account is used by NRIs to manage income earned within India (rent, dividends, pension); it has limited repatriation and its interest is taxable in India.

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2. Q.102

   Which of these is an example of a negotiable instrument?

   1. A Cheque
   2. B Aadhaar card
   3. C Ration card
   4. D Voter ID card
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   Correct answer: (A) Cheque

   A cheque is a negotiable instrument - a document guaranteeing payment that can be transferred from one party to another; the other options are identity documents, not financial instruments.

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3. Q.103

   The Imperial Bank of India was formed in 1921 by merging the Bank of Bengal, Bank of Bombay, and which other bank?

   1. A Bank of Madras
   2. B Bank of Calcutta
   3. C Bank of Delhi
   4. D Bank of Mysore
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   Correct answer: (A) Bank of Madras

   The Bank of Bengal, Bank of Bombay, and Bank of Madras (the three Presidency banks) merged in 1921 to form the Imperial Bank of India.

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4. Q.104

   What does JAM, the trinity underlying India's Direct Benefit Transfer (DBT) architecture, stand for?

   1. A Jan Dhan-Aadhaar-Mobile
   2. B Jan Awas-Aadhaar-MUDRA
   3. C Jan Dhan-Aadhaar-MSME
   4. D Jan Arogya-Aadhaar-Mobile
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   Correct answer: (A) Jan Dhan-Aadhaar-Mobile

   JAM stands for Jan Dhan-Aadhaar-Mobile - the combination of a bank account, a unique identity number, and a mobile connection that lets government subsidies be transferred directly and transparently to beneficiaries.

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5. Q.105

   What does NPCI, the umbrella organisation for retail payment systems in India, stand for?

   1. A National Payments Corporation of India
   2. B National Payment Clearing of India
   3. C New Payments Corporation of India
   4. D National Payments Council of India
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   Correct answer: (A) National Payments Corporation of India

   NPCI stands for National Payments Corporation of India, the umbrella organisation for operating retail payment systems like UPI and RuPay.

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6. Q.106

   Which regulator is responsible for overseeing Non-Banking Financial Companies (NBFCs) in India?

   1. A RBI
   2. B SEBI
   3. C IRDAI
   4. D NABARD
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   Correct answer: (A) RBI

   The Reserve Bank of India (RBI) regulates and supervises Non-Banking Financial Companies in India.

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