Test: Banking in India - 2 - Bank Exams MCQ

The banking system commenced in India with the foundation of the Bank of Hindustan in Calcutta (now Kolkata) in 1770 which ceased to operate in 1832.

Land Development Banks (LDBs) are essentially co-operative institutions. All the LDBs are registered under the Co-operative Societies Act.

On the Gorewala Committee's recommendation, the Imperial Bank was nationalized in 1955 and renamed the State Bank of India.

Export-Import Bank of India is a finance institution in India, established in 1982 under Export-Import Bank of India Act 1981. Since its inception, Exim Bank of India has been both a catalyst and a key player in the promotion of cross border trade and investment. The main functions of EXIM are:

1. To ensure and integrated and co-ordinated approach in solving the allied problems encountered by exporters in India.
2. To pay specific attention to the exports of capital goods;
3. Export projection;
4. To facilitate and encourage joint ventures and export of technical services and international and merchant banking;
5. To extend buyers' credit and lines of credit;
6. To tap domestic and foreign markets for resources for undertaking development and financial activities in the export sector.
7. To provide term loans/deferred payment guarantees to 100% export‑oriented units, units in trade zones and computer software exporters.
8. To provide financial advice and counseling services for internationalisation of business of Indian companies which are foreign oriented.

The Central Bank of India, founded in 1911, was the first Indian commercial bank to be entirely owned and operated by Indians.

Only the first and the second statements are correct. If the National Housing Bank is of the opinion that it is necessary to do it in the public interest or in the interest of the housing finance institution or in the interest of the depositors of such institution, it may at any time by order, direct that a special audit of the accounts of the housing finance institution in relation to any such transaction or class of transactions or for such period or periods, as may be specified in the order, shall be conducted and the National Housing Bank may appoint an auditor or auditors to conduct such special audit and direct the auditor or the auditors to submit the report to it.

Presidency Bank was the first bank in India to establish a savings account system in 1833.

The amount of deposits placed by a non-scheduled UCB with any scheduled UCB should not exceed 5% of the depositing bank's total deposit liabilities as on March 31 of the previous financial year. The total inter-UCB deposits accepted by a scheduled UCB should not exceed 10% of its total deposit liabilities as on 31st March of the previous financial year.

In 1980 another 6 banks were nationalized:

1. Andhra bank.
2. Oriental bank of commerce.
3. New bank of India.
4. Corporation bank.
5. Punjab and Sind bank.
6. Vijaya bank.

The function of these banks is regulated by the Reserve Bank of India but the operation part of these banks needs much to desire. All these factors combined together prompted an idea of setting up Local Area Banks under the private sector in order to provide institutional mechanism to the financial resources available in rural areas and arranging for the provision of credit for economic activities in local areas.