Test: Financial Literacy- 3 - Class 6 MCQ

Bank does not provide loans for Drinking & Gambling because these activities are considered illegal or unethical in many places, and banks have a responsibility to promote responsible financial behavior and protect their customers from the risks associated with these activities.

Loans from money lenders often come with high interest rates, no proper accounting, and no transparency. This is because money lenders are not regulated like banks and often take advantage of borrowers who may not have access to more reputable lending sources.

Timely repayment of loans results in a good reputation, no financial tension, and easier availability of loans in the future. This is because timely repayment shows that you are a responsible borrower, which makes lenders more likely to lend to you in the future.

Life insurance means insurance of human life, which provides financial protection to the insured's dependents in case of their death. It does not cover the life of cattle or machines.

Aadhaar is a 12-digit number card and an identity proof issued by UIDAI (Unique Identification Authority of India). It is used to verify the identity of Indian residents and helps in availing various government services and benefits.

KYC means "Know Your Customer," a process banks and other financial institutions follow to verify the identity of their customers. This helps prevent money laundering, fraud, and other illegal activities.

ATM means "Automated Teller Machine," which is an electronic banking device that allows customers to perform financial transactions, such as withdrawing cash, depositing money, and checking account balances, without the need for human assistance.

A defaulter of a loan is someone who has not paid their loan installments as agreed upon with the lender. This can lead to a bad reputation and difficulty in obtaining loans in the future.

General Insurance relates to insurance against risks like fire, theft, and burglary. This type of insurance helps protect individuals and businesses from financial losses due to unforeseen events, such as accidents, natural disasters, or criminal activity.

E or S means "Either or Survivor" in the context of joint bank accounts. This means that both account holders have equal access to the funds in the account, and in case of the death of one account holder, the surviving account holder can continue to operate the account.