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All questions of Indian Banking System for B Com Exam
Which committee recommended the merger of Regional Rural Banks (RRBs) with their sponsor banks?- a)Narsimham Committee
- b)Machlagan Committee
- c)Saraiya Committee
- d)Khushrau Committee
Correct answer is option 'A'. Can you explain this answer?
a)
Narsimham Committee
b)
Machlagan Committee
c)
Saraiya Committee
d)
Khushrau Committee
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Universal Academy answered |
The Narsimham Committee recommended the merger of Regional Rural Banks (RRBs) with their sponsor banks. The committee emphasized the need to strengthen the RRBs and improve their sustainability by integrating them with the existing banking framework.
What issue arises due to the duality in control of Cooperative Banks in India?- a)Lack of customer support services.
- b)Excessive profits generated by cooperative banks.
- c)Ambiguity in power structure and decision-making.
- d)Inability to offer digital banking services.
Correct answer is option 'C'. Can you explain this answer?
a)
Lack of customer support services.
b)
Excessive profits generated by cooperative banks.
c)
Ambiguity in power structure and decision-making.
d)
Inability to offer digital banking services.
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Bank Exams India answered |
The duality in control, where Cooperative Banks are overseen by both the Registrar of Cooperative Societies (RCS) and the Reserve Bank of India (RBI), leads to ambiguity in power structure and decision-making. This can create conflicts and challenges in governance, impacting the smooth functioning of these banks.
Which regulatory authority oversees the banking activities of Urban Cooperative Banks in India?- a)Reserve Bank of India (RBI)
- b)National Bank for Agriculture and Rural Development (NABARD)
- c)Securities and Exchange Board of India (SEBI)
- d)Ministry of Finance, Government of India
Correct answer is option 'A'. Can you explain this answer?
a)
Reserve Bank of India (RBI)
b)
National Bank for Agriculture and Rural Development (NABARD)
c)
Securities and Exchange Board of India (SEBI)
d)
Ministry of Finance, Government of India
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Bank Exams India answered |
The banking activities of Urban Cooperative Banks in India are regulated by the Reserve Bank of India (RBI). RBI ensures that these banks comply with banking regulations and maintain the required standards to safeguard the interests of depositors and customers.
What is the main objective of establishing cooperative banks?- a)Maximizing profits for shareholders.
- b)Providing financial services to urban areas only.
- c)Fostering financial inclusion and benefiting the community.
- d)Offering specialized banking services to large corporations.
Correct answer is option 'C'. Can you explain this answer?
a)
Maximizing profits for shareholders.
b)
Providing financial services to urban areas only.
c)
Fostering financial inclusion and benefiting the community.
d)
Offering specialized banking services to large corporations.
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Universal Academy answered |
Cooperative banks are established with the primary goal of fostering financial inclusion and benefiting the community. Unlike commercial banks that focus on profit maximization, cooperative banks prioritize the needs of their members and the local community they serve. They aim to provide accessible financial services to all sections of society, especially those in rural and underprivileged areas.
What was the primary motivation behind the establishment of Regional Rural Banks (RRBs) in India?- a)To provide specialized banking services to urban areas.
- b)To offer credit facilities exclusively to large corporations.
- c)To ensure sufficient institutional credit for agriculture and rural sectors.
- d)To maximize profits for shareholders.
Correct answer is option 'C'. Can you explain this answer?
a)
To provide specialized banking services to urban areas.
b)
To offer credit facilities exclusively to large corporations.
c)
To ensure sufficient institutional credit for agriculture and rural sectors.
d)
To maximize profits for shareholders.
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Universal Academy answered |
The primary motivation behind the establishment of Regional Rural Banks (RRBs) in India was to ensure sufficient institutional credit for agriculture and rural sectors. RRBs aimed to provide credit facilities to small and marginal farmers, promoting agricultural development and rural economic growth.
Which of the following is not one of the types of NPA classification?- a)Standard Assets
- b)Sub-Standard Assets
- c)Distressed Assets
- d)Doubtful Assets
Correct answer is option 'C'. Can you explain this answer?
a)
Standard Assets
b)
Sub-Standard Assets
c)
Distressed Assets
d)
Doubtful Assets
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Bank Exams India answered |
The correct classification of Non-Performing Assets (NPAs) includes: Standard Assets, Sub-Standard Assets, Doubtful Assets, and Loss Assets. "Distressed Assets" is not one of the standard classifications.
What is the time frame for classifying an asset as NPA in India?- a)30 days
- b)60 days
- c)90 days
- d)180 days
Correct answer is option 'D'. Can you explain this answer?
a)
30 days
b)
60 days
c)
90 days
d)
180 days
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Universal Academy answered |
In India, an asset is classified as a Non-Performing Asset (NPA) if the borrower fails to repay the principal amount and interest within 180 days of the due date. This time frame is longer compared to the international norm of 45 to 90 days.
What is the key difference between the ownership structure of cooperative banks and commercial banks?- a)Cooperative banks are owned by the government.
- b)Cooperative banks are owned by shareholders.
- c)Cooperative banks are owned by members who are customers.
- d)Cooperative banks have no specific ownership structure.
Correct answer is option 'C'. Can you explain this answer?
a)
Cooperative banks are owned by the government.
b)
Cooperative banks are owned by shareholders.
c)
Cooperative banks are owned by members who are customers.
d)
Cooperative banks have no specific ownership structure.
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Universal Academy answered |
The key difference between the ownership structure of cooperative banks and commercial banks is that cooperative banks are owned by their members, who are also their customers. This unique ownership model ensures that the interests of the members and the community are prioritized.
What distinguishes cooperative banks from commercial banks in terms of ownership?- a)Cooperative banks are owned by shareholders for profit.
- b)Cooperative banks are owned by members who are also customers.
- c)Cooperative banks are government-owned entities.
- d)Cooperative banks have no specific ownership structure.
Correct answer is option 'B'. Can you explain this answer?
a)
Cooperative banks are owned by shareholders for profit.
b)
Cooperative banks are owned by members who are also customers.
c)
Cooperative banks are government-owned entities.
d)
Cooperative banks have no specific ownership structure.
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Universal Academy answered |
Cooperative banks are unique in that they are owned by their members who are also their customers. This means that individuals who use the bank's services become partial owners and have a say in the bank's decision-making processes. This ownership structure promotes a sense of community and shared responsibility.
What is the primary focus of rural cooperatives known as "Primary Agricultural Credit Societies"?- a)Providing microfinance services to urban entrepreneurs.
- b)Offering housing loans to farmers.
- c)Serving as apex-level institutions in rural areas.
- d)Providing credit facilities to farmers at the grassroots level.
Correct answer is option 'D'. Can you explain this answer?
a)
Providing microfinance services to urban entrepreneurs.
b)
Offering housing loans to farmers.
c)
Serving as apex-level institutions in rural areas.
d)
Providing credit facilities to farmers at the grassroots level.
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Bank Exams India answered |
"Primary Agricultural Credit Societies" (PACS) are rural cooperatives that primarily focus on providing credit facilities to farmers at the grassroots level. These societies aim to support the agricultural activities of small and marginal farmers by offering them affordable credit options.
Which regulatory authority is responsible for overseeing the management and registration activities of cooperative banks in India?- a)Reserve Bank of India (RBI)
- b)National Bank for Agriculture and Rural Development (NABARD)
- c)Registrar of Cooperative Societies (RCS)
- d)Securities and Exchange Board of India (SEBI)
Correct answer is option 'C'. Can you explain this answer?
a)
Reserve Bank of India (RBI)
b)
National Bank for Agriculture and Rural Development (NABARD)
c)
Registrar of Cooperative Societies (RCS)
d)
Securities and Exchange Board of India (SEBI)
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Bank Exams India answered |
The management and registration activities of cooperative banks in India are overseen by the Registrar of Cooperative Societies (RCS). This authority ensures that the cooperative banks operate within the legal framework and adhere to the principles of cooperative governance.
In the context of NPAs, what is the role of commercial banks in relation to the central bank's monetary policy?- a)Commercial banks oppose the central bank's policy
- b)Commercial banks have no impact on the central bank's policy
- c)Commercial banks help implement and follow the central bank's monetary policy
- d)Commercial banks create their own monetary policies
Correct answer is option 'C'. Can you explain this answer?
a)
Commercial banks oppose the central bank's policy
b)
Commercial banks have no impact on the central bank's policy
c)
Commercial banks help implement and follow the central bank's monetary policy
d)
Commercial banks create their own monetary policies
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Bank Exams India answered |
Commercial banks play a crucial role in implementing and following the central bank's monetary policy. Their adherence to the central bank's policies affects the overall economic environment of a country.
What does the term "NPA" stand for in the context of banking and finance?- a)New Performing Assets
- b)Non-Personal Assets
- c)Non-Performing Accounts
- d)Non-Performing Assets
Correct answer is option 'D'. Can you explain this answer?
a)
New Performing Assets
b)
Non-Personal Assets
c)
Non-Performing Accounts
d)
Non-Performing Assets
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Bank Exams India answered |
Non-Performing Assets (NPAs) refer to those assets, primarily loans, that do not generate periodical income due to non-repayment by borrowers within a certain period. These assets are considered as non-performing when borrowers fail to repay both the principal amount and interest for a specific time frame.
Which type of asset is considered as non-performing for a period of more than 12 months?- a)Sub-Standard Assets
- b)Standard Assets
- c)Loss Assets
- d)Doubtful Assets
Correct answer is option 'D'. Can you explain this answer?
a)
Sub-Standard Assets
b)
Standard Assets
c)
Loss Assets
d)
Doubtful Assets
|
|
Universal Academy answered |
Doubtful Assets are those assets which are considered as non-performing for a period of more than 12 months. This indicates that there is a significant doubt about their repayment.
What is the primary goal of cooperative banks in terms of financial services?- a)Maximizing profits for shareholders.
- b)Fostering financial inclusion and benefiting the community.
- c)Offering specialized banking services to large corporations.
- d)Providing loans exclusively to urban areas.
Correct answer is option 'B'. Can you explain this answer?
a)
Maximizing profits for shareholders.
b)
Fostering financial inclusion and benefiting the community.
c)
Offering specialized banking services to large corporations.
d)
Providing loans exclusively to urban areas.
|
|
Bank Exams India answered |
The primary goal of cooperative banks is to foster financial inclusion and benefit the community. Unlike commercial banks that focus on profit generation, cooperative banks aim to provide accessible financial services to all sections of society, especially those in rural and underserved areas.
How are Performing Assets (PAs) different from Non-Performing Assets (NPAs)?- a)PAs generate income, while NPAs do not generate income
- b)PAs are held by individuals, while NPAs are held by businesses
- c)PAs are always in the form of cash, while NPAs are in the form of physical assets
- d)PAs are high-risk investments, while NPAs are low-risk investments
Correct answer is option 'A'. Can you explain this answer?
a)
PAs generate income, while NPAs do not generate income
b)
PAs are held by individuals, while NPAs are held by businesses
c)
PAs are always in the form of cash, while NPAs are in the form of physical assets
d)
PAs are high-risk investments, while NPAs are low-risk investments
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Bank Exams India answered |
Performing Assets (PAs) are assets that generate regular income, such as interest payments, whereas Non-Performing Assets (NPAs) do not generate periodical income due to the borrower's failure to repay the loan and interest on time.
What are some common causes of Non-Performing Assets (NPAs)?- a)Economic growth
- b)Efficient management
- c)Diversion of funds
- d)Timely repayment
Correct answer is option 'C'. Can you explain this answer?
a)
Economic growth
b)
Efficient management
c)
Diversion of funds
d)
Timely repayment
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Universal Academy answered |
Diversion of funds, which involves using borrowed money for purposes other than the intended ones, is a common cause of NPAs. It leads to financial stress and the inability to repay loans.
How do commercial banks help in overcoming obstacles and promoting economic development in developing countries?- a)By investing in high-risk assets
- b)By reducing capital formation
- c)By providing loans for unnecessary expansion
- d)By mobilising savings and channeling them into productive investments
Correct answer is option 'D'. Can you explain this answer?
a)
By investing in high-risk assets
b)
By reducing capital formation
c)
By providing loans for unnecessary expansion
d)
By mobilising savings and channeling them into productive investments
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Bank Exams India answered |
Commercial banks in developing countries help in economic development by mobilizing savings from individuals and redirecting them towards productive investments, thereby aiding in capital formation and overcoming various economic challenges.
Among the given types of NPA, which assets generate continuous income and repayments?- a)Sub-Standard Assets
- b)Doubtful Assets
- c)Loss Assets
- d)Standard Assets
Correct answer is option 'D'. Can you explain this answer?
a)
Sub-Standard Assets
b)
Doubtful Assets
c)
Loss Assets
d)
Standard Assets
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Universal Academy answered |
Standard Assets are performing assets that generate regular income and repayments as and when they fall due. They carry normal risk and are not considered NPAs.
How do commercial banks contribute to employment generation in developing countries?- a)By discouraging vocational training
- b)By investing in high-risk ventures
- c)By providing loans to entrepreneurs and technically trained individuals
- d)By focusing solely on urban areas
Correct answer is option 'C'. Can you explain this answer?
a)
By discouraging vocational training
b)
By investing in high-risk ventures
c)
By providing loans to entrepreneurs and technically trained individuals
d)
By focusing solely on urban areas
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Bank Exams India answered |
Commercial banks contribute to employment generation in developing countries by providing loans to young entrepreneurs, medical and engineering graduates, and other technically trained individuals. This supports the establishment of new businesses and ventures.
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Indian Financial System
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