Banking & Finance Awareness – GK Questions and Answers (MCQs)

A. Banks that have the largest number of branches

B. Banks whose failure could trigger a wider financial crisis due to their size and interconnectedness

C. Banks that consistently report the highest profits

D. Banks that have the largest share of government deposits

A. Repo Rate

B. Open Market Operations

C. Moral Suasion

D. Fiscal Policy

A. To provide large loans to corporations

B. To offer small loans and other financial services to low-income individuals and groups

C. To regulate the informal lending sector

D. To promote international trade

A. Banks sharing customer data with third-party providers through APIs (with customer consent)

B. Banks making their core banking systems publicly accessible

C. The absence of any regulation in the banking sector

D. Banks exclusively using open-source software

A. The ratio of a bank's total debt to its total assets

B. The ratio of a bank's total debt to its shareholders' equity

C. The ratio of a bank's profits to its debt

D. The ratio of a bank's equity to its total assets

A. To maximize the profits of financial institutions

B. To provide a stable, efficient, and safe platform for clearing and settlement of financial transactions

C. To regulate the trading of financial instruments

D. To promote financial speculation

A. Decreasing smartphone penetration

B. Limited internet connectivity

C. Increasing digital literacy and convenience

D. Preference for traditional banking methods

A. The process of converting illiquid assets into marketable securities

B. The process of writing off bad debts

C. The process of merging two or more financial institutions

D. The process of investing in government securities

A. To facilitate the trading of shares

B. To hold securities in dematerialized (electronic) form

C. To regulate the activities of stock brokers

D. To provide loans against shares

A. They require a physical branch of the bank nearby

B. They enable basic banking transactions using a PoS (Point of Sale) terminal and a biometric device

C. They can dispense large amounts of cash

D. They are primarily located in urban centers

A. The extent to which a financial institution uses borrowed funds (debt) to finance its assets

B. The total amount of deposits held by a financial institution

C. The number of branches operated by a financial institution

D. The market capitalization of a financial institution

A. To attract more retail deposits

B. To manage the bank's funds efficiently, optimize profitability, and control risk related to its assets and liabilities

C. To expand the bank's lending portfolio aggressively

D. To minimize the bank's tax liability

A. They are owned and operated by public sector banks

B. They are set up, owned, and operated by non-bank entities

C. They only dispense cash and do not offer other banking services

D. They are primarily located in urban areas

A. An increase in the number of bank branches

B. A decrease in the size of the informal financial sector

C. An increase in the size and sophistication of the financial sector relative to the overall economy

D. A reduction in the interest rates charged by banks

A. Diversification of loan portfolio

B. Hedging against market risks

C. Maintaining adequate capital buffers

D. Ignoring potential risks to maximize short-term gains

A. To promote digital payments infrastructure in Tier-1 and Tier-2 cities

B. To subsidize the cost of setting up ATMs in rural areas

C. To encourage the adoption of blockchain technology in payments

D. To promote digital payments acceptance infrastructure in Tier-3 to Tier-6 centres and North-Eastern states

A. Assuming that all investors are perfectly rational

B. Recognizing the psychological biases and emotional factors that influence financial decisions

C. Relying solely on mathematical models for forecasting market movements

D. Ignoring historical data and focusing only on current trends

A. An insurance contract that provides protection against the default of a specific debt instrument

B. A type of derivative used for speculating on currency movements

C. A type of bond with a variable interest rate

D. A mechanism for restructuring sovereign debt