50 MCQ of Banking Operations with Answer in Pdf

50 MCQ of Banking Operations with Answer in Pdf

Do you want to challenge yourself and learn more about Banking Operations? This article provides a comprehensive resource for anyone interested in deepening their knowledge in this field.

Here, we present 50 Multiple Choice Questions (MCQs) of Banking Operations, each with its own answer provided in PDF format.

All questions are designed to probe and assess the reader’s understanding of banking operations, covering a variety of topics from different aspects. The answers provided offer an explanation of why the chosen option is the correct one.

MCQ Banking Operations

Introduction to Banking Operation

Banking Operations is an essential component of the financial services industry. It encompasses a range of services and activities that are carried out by banks to facilitate transactions, manage risk, and provide customers with access to capital.

From opening accounts and processing deposits to issuing loans and managing investments, banking operations play a key role in keeping the global economy running smoothly.

In today’s digital world, banks have embraced new technologies to provide innovative solutions for their customers.

What is Banking Operations

Banking operations refer to the various activities and services that banks offer to their customers. These include deposit-taking, lending, payment processing, and investment management.

In addition to these core functions, banking operations also involve risk management and regulatory compliance.

Deposit-taking is one of the primary functions of banking operations. Banks accept deposits from individuals and businesses, which they use for lending or investing purposes.

This process helps banks earn interest on loans while providing a safe place for customers to store their money.

Lending is another key function of banking operations. Banks provide loans to individuals and businesses based on their creditworthiness and ability to repay.

Loans can be used for a variety of purposes such as buying a home or starting a business. Banking operations also involve payment processing services such as issuing debit/credit cards, online transfers, and bill payments.

50 MCQ of Banking Operations with Answer in Pdf

1. Banker’s Bank
a. GOI
b. RBI
c. SBI
d. PNB
Ans. B

2. Major portion of bank’s funds is deployed in
a. Lending
b. Investment
c. Credit
d. Advances
Ans. A

3. are granted is one lump sum.
a. Bill finance
b. Term loans
c. Cash credit
d. Lending
Ans. B

4. Clean loans are also known as
a. Term loans
b. Secured loans
c. Unsecured loans
d. Credit loans
Ans. C

5. An ___ is one for which the banker. Has to rely upon the personal security of the borrows
a. Unsecured loan
b. Term loan
c. Secured loan
d. Both a & c
Ans. A

6. are given by a bankers on the basic of his present net worth
a. Pledge
b. Secured loans
c. Mortgage
d. All of the above
Ans. B

7. ___ is a good example of regulation by other authorities
a. Indian Banking
b. Exchange banks
c. SEBI
d. All of the above
Ans. C

8. Rapid transformation & stupendous changes in Indian Banking are due to
a. Globalization
b. Liberalization
c. Massive developments in IT
d. All of the above
Ans. D

9. Today the main issue before Indian banking is
a. Communication
b. Managing the transformation
c. Customer regulation
d. None of the above
Ans. B

10. In order to protect farmers from the co-operative movement in India was encouraged
a. Economic evils
b. Moral degeneration
c. Both a & b
d. Money lenders
Ans. C

11. State holders of banks are:-
a. Government of India
b. Depositors
c. General public
d. All of the above
Ans. D

12. was the rule in rural societies
a. Unlimited liabilities
b. Limited liabilities
c. Fixed liabilities
d. All of the above
Ans. A

13. The ___ investors preferred dollars over other currencies
a. Euro bond
b. Euro markets
c. International markets
d. Euro commercial
Ans. A

14. Asset-liability management comprises ___ processes that affect the volume, mix, maturity, interest rate sensitivity, quality, liquidity of a bank’s assets and liabilities.
a. Strategic planning
b. Implementation
c. Control
d. All of the above
Ans. D

15. ___ is an important agent of economic growth.
a. Government stocks
b. Stock markets
c. Indian Banking system
d. All of the above
Ans. C

16. The primary goal of asset-liability management is to produce-
a. High quality income
b. Stable & large income
c. Growing net interest
d. All of the above
Ans. D

17. Primary goal of asset liability management is accomplished by achieving the optimum combination of
a. Assets
b. Liabilities
c. Financial risk
d. All
Ans. D

18. The ___ is a bankruptcy remote entity confined to activities envisaged under the transaction by its memorandum and articles of association set up specially for the purpose of the transaction
a. BIS
b. SPV (Special purpose vehicle)
c. Pass through
d. Pay through
Ans. B

19. State whether correct or not
According to Paget’s law of Banking, there is no exhaustive definition of bank at common law
a. False
b. Can’t say
c. Not sure
d. True
Ans. D

20. is best described as the repackaging of receivables into a tradable form
a. Securitization
b. Exchange
c. Servicing
d. All of the above
Ans. A

21. is the non recourse discounting of export receivables.
a. Securitization
b. For fating
c. For fact
d. Exchange
Ans. B

22 Created history in first global money market.
a. Japanese
b. U.S
c. India
d. Chinese
Ans. B

23 Internationalization of banking took place after
a. World war II
b. World war I
c. Financial crisis
d. Oil crisis
Ans. A

24 First oil crisis taken place in
a. 1998
b. 1973
c. 1987
d. 1988
Ans. B

25. ___ overseas is the natural extension of grow the strategies for banks
a. Financial intermediation
b. Foreign investors
c. US and European banks
d. None of the above
Ans. A

26. has advanced reason for the growth of international banking and argument it in his paper “Professional trading exchange Rate risk and the growth of international Banking”
a. Philip Kotler
b. Phillip callier
c. Frederick Taylor
d. All of the above
Ans. B

27. According to History. had developed a banking system.
a. Baby lanais
b. Japanese
c. Chinese
d. Americans
Ans. A

28. ___ indicates the extent to which the banks can coverage its non-interest cost exclusively through non-interest cost revenue for a given volume of a business
a. Burden efficiency ratio
b. Cash coverage ratio
c. Non-performing assets ratio
d. Aggregate deposits
Ans. A

29. Current period’s business/last period’s business refers to –
a. Aggregate deposits
b. Average working funds
c. Total business growth ratio
d. None
Ans. C

30 This indicates the advances the advances mix
a. Aggregate deposits
b. Priority sector ratio
c. Total debt
d. Net worth
Ans. B
31. “For fact” is derived from the work “a forfeit” which means surrender of rights
a. French
b. Latin
c. German
d. Greek
Ans. A

32. A high aggregate deposits figure signifies a
a. Bank’s brand equity
b. Branch network
c. Deposit mobilization strength
d. All of the above
Ans. D

33. Working finds are ___ of a bank on a particular data
a. Total resources
b. Total liabilities
c. Total assets
d. All of the above
Ans. D

34. Total debt equals to
a. Total borrowings plus aggregate deposits
b. Borrowings in India and Outside India
c. Both a & b
d. None of the above
Ans. C

35. It stands for care strength of a bank and denotes a bank’s margin of safety
a. Net worth
b. Gross advances
c. Net profits
d. Working funds
Ans. A

36. This ratio denotes a bank’s degree of leveraging relative to its net worth.
a. Debt-equity ratio
b. Total debt to net worth
c. Both a & b
d. None of the above
Ans. C

37. Food credit is included in
a. Gross advances
b. Non-interest income
c. Operating expenses
d. Capital adequacy
Ans. A

38. Main source of funds for the banks is
a. Government
b. Deposits
c. Investments
d. All
Ans. B

39. Deposits are classified as
a. Term deposits
b. Saving deposits
c. Deposits payable on demand
d. All of the above
Ans: D

40. Funds are profitably deployed in the form of
a. Loans
b. Advances
c. Investments
d. All of the above
Ans. D

41. State whether true or not:
1. A documentation fee is not incurred in straight forward forfeit transactions
2. If extensive documentation and legal work is necessary, a documentation fee may be charged
a. 1 – T, 2 – F
b. 1 – T, 2 – T
c. 1 – F, 2 – F
d. 1 – F, 2 – T
Ans. B

42. Two separate categories of securitization structure are:
a. Direct ownership indirect ownership
b. Pass through, Pay through
c. Primary. Secondary
d. None of the above
Ans. B

43. Scenario of Indian banking changes due to massive developments in the fields of &
a. IT & communication technology
b. IT & IS
c. Globalization & liberalization
d. All of the above
Ans. A

44. Today Banking provide tailor-made solutions to the customers with a focus on and ___
a. Customer convenience, customer delight
b. Customer taste, customer preferences
c. Customer economic states, customer honesty
d. All of the above
Ans. A

45. The financial statements of banks include ___ and
a. A profit account, loss account
b. Balance sheet. Accounts
c. Balance sheet. Profit or loss account
d. Both a & b
Ans. C

46. A balance sheet is a statement of and on a given date say March 31
a. Assets, liabilities
b. Profit, loss
c. Both a & b
d. None of the above
Ans. A

47. Banking in India is mainly governed by ___ & ___
a. Government of India, Reserve Bank of India
b. Banking regulation Act, 1949 and reserve bank of India act, 1934
c. Both a & b
d. None of the above
Ans. B

48. Banking according to banking regulation act is the acceptance of deposits from public for and ___.
a. Deposits, lending
b. Leading investments
c. Deposits withdrawal
d. All of the above
Ans. B

49. Aggregate deposits include deposits from and deposits from ___
a. Public, bank
b. Private, public
c. Individual, companies
d. None of the above
Ans. A

50. Limits should be appropriate to the and of the bank
a. Assets, liabilities
b. Size complexity, financial condition
c. Both a & b
d. Funds, deposits
Ans. B

Conclusion:

Banking operations are complex and involve a variety of activities. It is essential for banks to have skilled professionals who understand how to use the right technology, processes, and procedures in order to operate successfully.

Additionally, it is important that they adhere to laws and regulations while providing the best services to their customers. Banks must also protect their assets and ensure the safety of their customers’ funds.

With the right team and strategies in place, banking operations can be effectively managed and profitable.

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