What is the meaning of 'endorsement' in banking?

A signature on a negotiable instrument

A bank's approval of a transaction

What is the primary relationship between a banker and a customer?

Trustee-beneficiary relationship

What is the concept of core banking?

Centralized banking services across branches

Banking services limited to online transactions

Banking services provided only at branches

Banking services for corporate clients only

What is the primary purpose of a savings account?

To facilitate daily transactions

What does the term 'bank reconciliation' refer to?

Comparing bank statements with financial records

Transferring funds between accounts

Which of the following is a feature of internet banking?

Access to accounts via a web portal

Mandatory physical documentation

What is the main advantage of having a fixed deposit account?

Higher interest rates compared to savings accounts

What does the term 'credit score' refer to?

A measure of a person's creditworthiness

A method of calculating interest rates

Which of the following is a benefit of using mobile banking?

Access to banking services anytime and anywhere

Mandatory in-person verification

What is the main benefit of having a current account?

Unlimited withdrawals and deposits

Which of the following is a feature of a debit card?

Linked directly to a bank account

Can be used for credit purchases

What is the purpose of a loan agreement?

To outline the terms of the loan

What is the primary function of a promissory note?

To outline the terms of a loan repayment

To facilitate international trade

To serve as a guarantee for a loan

Which of the following is a feature of a fixed deposit account?

Higher interest rates than savings accounts

What does the term 'overdraft' refer to in banking?

A facility to withdraw more than the account balance

Which of the following is a characteristic of a credit card?

Offers higher interest rates than loans

What is the purpose of a bank's credit policy?

To determine loan eligibility and terms

What is the main purpose of a loan origination fee?

To cover the cost of processing a loan application

To provide a discount on interest rates

To secure collateral for the loan

To pay for insurance on the loan

Which of the following is a benefit of having a joint account?

Limited transaction capabilities

Exclusive to one account holder

Which technology primarily supports "green banking"?

Digital and paperless processes

"Crossing" a cheque ensures:

That it cannot be cashed over the counter.

That it will be dishonored by the bank.

That it must be endorsed by a third party.

"That only the payee can cash it.

What is the primary feature of a "bearer cheque"?

It is payable to any person who presents it for payment.

It must be presented with an endorsement.

It requires the signature of the account holder on the back.

In case of a joint Hindu family account, which of the following is TRUE?

The karta manages and operates the account.

Any member can operate the account without restrictions.

The account cannot be opened by Hindu families.

It requires written consent from all members for transactions.

What does the term "special relationship" between a banker and customer imply?

Bank assumes roles such as trustee, agent, or advisor.

Bank acts as a debtor and customer as a creditor.

Bank solely guarantees repayment of loans. .

Bank offers only deposit accounts

The term "bill discounted" refers to:

Loans granted against promissory notes or bills of exchange.

Loans against a personal guarantee.

Advances made by banks on unutilized overdraft limits.

A "Letter of Credit" is primarily used for:

Facilitating international trade transactions.

What is the primary difference between fiscal policy and monetary policy?

Fiscal policy involves government revenue and expenditure, while monetary policy regulates money supply and interest rates.

Fiscal policy is implemented by the RBI, while monetary policy is implemented by the government.

Fiscal policy deals with loans, while monetary policy focuses on taxes.

Both are focused on inflation control.

A "dormant account" is one that: r.

Has had no transactions for a specified period.

Has been closed by the account holder.

Is overdrawn beyond the sanctioned limit.

What is the purpose of the "KYC" process in banking?

To verify customer identity and prevent money laundering.

To identify counterfeit currency.

To streamline online fund transfers.

To monitor interest rate changes.

A "MICR" code on a cheque is used for:

Identifying the bank and branch.

Monitoring fraudulent transactions.

Tracking international remittances.

"Universal banking" refers to:

A banking model that combines both investment and commercial banking services.

Banking services restricted to corporate customers.

Rural banking initiatives by private banks.

Banking operations conducted exclusively through mobile apps.

What is the primary difference between NEFT and RTGS?

RTGS processes in real-time; NEFT is batch-processed

NEFT processes in real-time; RTGS is batch-processed

NEFT is for international transactions; RTGS is domestic

RTGS has no transaction limit, while NEFT has restrictions

What is the main advantage of Green Banking for financial institutions?

Reduced operational costs through sustainable practices

Higher interest rates on deposits

Exclusive access to international funding

Enhanced security features for online banking

Which of the following is NOT a characteristic of a negotiable instrument?

Requires attestation by a notary public

Freely transferable by delivery or endorsement

Gives a holder in due course the right to sue in their own name

What does "dishonor by non-acceptance" mean in the context of negotiable instruments?

The drawee refuses to accept the bill of exchange when presented for acceptance

The drawee refuses to pay the amount on presentation

The drawer refuses to accept liability for the instrument

The payee refuses to endorse the instrument

Banking Theory and Practice

Authored by Akhil Thomas

Business

University

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50 questions

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MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is the primary function of the Reserve Bank of India (RBI)?

To manage personal savings accounts

To issue credit cards

To regulate the banking sector

To provide loans to individuals

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which act regulates banking in India?

Banking Regulation Act 1949

Consumer Protection Act 1986

Companies Act 1956

Negotiable Instruments Act 1881

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What type of account can a minor open?

Foreign currency account

Trust account

Corporate account

Joint account with a guardian

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What is a key feature of a cheque?

It is a type of loan

It is a negotiable instrument

It requires a credit card

It is a savings account

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is NOT a type of negotiable instrument?

Cheque

Bill of exchange

Promissory note

Savings account

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

What does RTGS stand for?

Real Time General Settlement

Regular Transfer of Government Securities

Rapid Transaction General Service

Real Time Gross Settlement

MULTIPLE CHOICE QUESTION

30 sec • 1 pt

Which of the following is a modern banking practice?

Virtual banking

Manual ledger maintenance

In-person banking only

Paper-based transactions

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Banking Theory and Practice

What is the primary function of the Reserve Bank of India (RBI)?

Which act regulates banking in India?

What type of account can a minor open?

What is a key feature of a cheque?

Which of the following is NOT a type of negotiable instrument?

What does RTGS stand for?

Which of the following is a modern banking practice?

What is the meaning of 'endorsement' in banking?

Which of the following is a type of crossing for cheques?

What is the primary relationship between a banker and a customer?

Access all questions and much more by creating a free account

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