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Test: Retail Banking & Wealth Management - 4 - Bank Exams MCQ


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100 Questions MCQ Test Mock Test Series for JAIIB Exam 2025 - Test: Retail Banking & Wealth Management - 4

Test: Retail Banking & Wealth Management - 4 for Bank Exams 2024 is part of Mock Test Series for JAIIB Exam 2025 preparation. The Test: Retail Banking & Wealth Management - 4 questions and answers have been prepared according to the Bank Exams exam syllabus.The Test: Retail Banking & Wealth Management - 4 MCQs are made for Bank Exams 2024 Exam. Find important definitions, questions, notes, meanings, examples, exercises, MCQs and online tests for Test: Retail Banking & Wealth Management - 4 below.
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Test: Retail Banking & Wealth Management - 4 - Question 1

Purchasing and using banking and other financial products requires interactions with the bank through a delivery channel. Customer satisfaction happens through different delivery channels and experiencing an optimum channel mix increases customer satisfaction. Technology has touched every aspect of our lives in recent years and banking has been no exception. Information technology has allowed banks to provide much better levels of service to their customers at low costs. The deployment of technology has also changed the channels via which customers interact with their banks. Bank branches form the traditional channel for the delivery of banking services. Almost every bank in the world has branches although banks have reduced their reliance on these branches and are attempting to replace branches with technologies like ATMs, PoS, Mobile banking, etc.

Q. What should the ambiance of the branch do?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 1

The ambiance of the branch should increase the comfort factor in the minds of the customers.

Test: Retail Banking & Wealth Management - 4 - Question 2

Purchasing and using banking and other financial products requires interactions with the bank through a delivery channel. Customer satisfaction happens through different delivery channels and experiencing an optimum channel mix increases customer satisfaction. Technology has touched every aspect of our lives in recent years and banking has been no exception. Information technology has allowed banks to provide much better levels of service to their customers at low costs. The deployment of technology has also changed the channels via which customers interact with their banks. Bank branches form the traditional channel for the delivery of banking services. Almost every bank in the world has branches although banks have reduced their reliance on these branches and are attempting to replace branches with technologies like ATMs, PoS, Mobile banking, etc.

Q. Internet Banking services offered by "Fully Transactional Websites" involves:

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 2

Internet Banking services offered by "Fully Transactional Websites" allow customers to operate for the transfer of funds, payment of bills, purchase, and sale of securities, etc. These services are offered by traditional banks as an additional method of serving their customers.

Test: Retail Banking & Wealth Management - 4 - Question 3

Which of the following is not a feature of retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 3

The focus of Retail banking is not merely on individuals but also on small businesses.

Test: Retail Banking & Wealth Management - 4 - Question 4

Which of the following statements are incorrect regarding the functions Management Information Systems perform in an organization?
I. Management Information Systems help businesses to increase their productivity and profitability.
II. Management Information Systems can provide real-time updates and information.
III. Management Information Systems keeps the business balanced by facilitating to take untried decisions.
IV. Management Information Systems support the planning and controlling functions in an organization.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 4

Only III statement is incorrect. The correct statement is- Management Information Systems keep businesses balanced by ensuring that only proven decisions are considered while untried ones are prevented.

Test: Retail Banking & Wealth Management - 4 - Question 5

What positive impact did MKISs have on marketing managers?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 5

MKISs attracted more marketing managers to use the system for planning, which is a positive impact.

Test: Retail Banking & Wealth Management - 4 - Question 6

What is IDRBT?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 6

IDRBT (Institute for Development and Research in Banking Technology) is an institute established by the Reserve Bank of India to undertake development and research in the area of Information Technology applied to the financial sector, with a specific focus on banking.

Test: Retail Banking & Wealth Management - 4 - Question 7

Which of the following is the correct set of Core products about the banking sector?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 7

Core products refer to those products which tell the business of the organization (here, banks), for example- Savings Banks, Current Accounts, Chequebooks, etc. On the other hand, Internet banking, Mobile banking, LIC, etc. are augmented products that add value to the products in terms of benefits and comforts to the customer.

Test: Retail Banking & Wealth Management - 4 - Question 8

Who is eligible for the Central Sector Interest Subsidy (CSIS) scheme?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 8

Central Sector Interest Subsidy (CSIS) is a GOI-approved scheme to provide full interest subsidy during the period of moratorium i.e., course period+1 year on education loan, to be availed by students belonging to economically weaker sections, with an annual gross parental family income upper limit of ₹4.5 lakhs.

Test: Retail Banking & Wealth Management - 4 - Question 9

7.75% GOI Savings Bond is issued for a minimum amount of __________ and in multiples of __________.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 9

7.75% GOI Savings Bonds are those that provide interest at 7.75% and are issued for a minimum amount of INR 1000 and in multiples of INR 1000.

Test: Retail Banking & Wealth Management - 4 - Question 10

What is the maximum size of a house for the Economically Weaker Section (EWS) under PMAY(U)?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 10

PMAY(U) guidelines state that the size of a house for the Economically Weaker Section (EWS) could be up to 30 sq. mt. carpet area.

Test: Retail Banking & Wealth Management - 4 - Question 11

Which one of the following is a 'basic' condition to satisfy the residential status of an individual?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 11

An individual must satisfy any one of the two basic conditions to be resident in India - First is, his stay in India for the relevant financial year should be 182 days or more. Second is, The individual has stayed in India in the immediately preceding year for 365 days or more and 60 days or more in the relevant financial year.

Test: Retail Banking & Wealth Management - 4 - Question 12

Discuss the returns generated in the Retail form of banking the and Corporate form of banking.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 12

Returns are more in retail banking as compared to corporate banking as the former is widespread over a large customer base while in the latter, the returns are low as corporate bargains for lower rates.

Test: Retail Banking & Wealth Management - 4 - Question 13

The customers of any organization drive its revenues, therefore, it is important to build up a large and targeted customer base depending on the products and/or services the organization offers. To make the customers aware of an organization's (here, banks) business and its products and services (here banking products and services), marketing is required which helps the customer in making correct buying decisions. In the context of Retail banking, marketing means- Identifying the most profitable markets now and in the future. It involves assessing the customer's present and future needs which are continuously evolving and dynamic in nature. In marketing, the banks set business development goals and make plans to meet them by going through the four stages of the Marketing process. The elements of the marketing mix for retail banking are- Product, Price, Place, Promotion, Process, People, and Physical evidence.

Q. Who has given the following definition of marketing in banking?
"The creation and delivery of customer-satisfying services at a profit to the bank":

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 13

The above definition of Bank marketing is given by Sir Fredrick Seebohm.

Test: Retail Banking & Wealth Management - 4 - Question 14

The customers of any organization drive its revenues, therefore, it is important to build up a large and targeted customer base depending on the products and/or services the organization offers. To make the customers aware of an organization's (here, banks) business and its products and services (here banking products and services), marketing is required which helps the customer in making correct buying decisions. In the context of Retail banking, marketing means- Identifying the most profitable markets now and in the future. It involves assessing the customer's present and future needs which are continuously evolving and dynamic in nature. In marketing, the banks set business development goals and make plans to meet them by going through the four stages of the Marketing process. The elements of the marketing mix for retail banking are- Product, Price, Place, Promotion, Process, People, and Physical evidence.

Q. What does ‘price’ refer to in the marketing mix for deposit products?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 14

In the case of deposit products, ‘Price’ refers to the interest rate offered by the banker to the customer.

Test: Retail Banking & Wealth Management - 4 - Question 15

The customers of any organization drive its revenues, therefore, it is important to build up a large and targeted customer base depending on the products and/or services the organization offers. To make the customers aware of an organization's (here, banks) business and its products and services (here banking products and services), marketing is required which helps the customer in making correct buying decisions. In the context of Retail banking, marketing means- Identifying the most profitable markets now and in the future. It involves assessing the customer's present and future needs which are continuously evolving and dynamic in nature. In marketing, the banks set business development goals and make plans to meet them by going through the four stages of the Marketing process. The elements of the marketing mix for retail banking are- Product, Price, Place, Promotion, Process, People, and Physical evidence.

Q. The "Marketing implementation" stage of the marketing process involves:

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 15

Marketing implementation involves answering questions like- who, where, when, and how for the offering and focusing on performing activities in the right manner by having a proper blend of people, culture, structure, decision, etc. in the organization.

Test: Retail Banking & Wealth Management - 4 - Question 16

The banks, in addition to the core banking products like Current Accounts, Savings Deposits, etc. offer certain para-banking activities either departmentally or by setting up subsidiaries. Some such activities are insurance, Mutual funds, credit/debit cards, social security schemes, etc. But such services cannot be offered from the bank's products due to certain restrictions, rather they offer them through the relevant service providers by acting as their corporate agents. These services increase the reach and customer base of banks as it makes the banks a one-stop financial hub for all the financial demands of different customers. Also, it improves the fee-based income of the banks. For example - To avail mutual funds products through banks, the concept of Mutual banking has emerged.

Q. Which of the following types of Life insurance products is the cheapest?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 16

The term insurance policy is a life insurance product where the sum assured is paid only in the event of the death of the policyholder, and not at the end of the policy terms. Thus, these policies are relatively cheaper than other insurance products and are most preferred by the middle class.

Test: Retail Banking & Wealth Management - 4 - Question 17

The banks, in addition to the core banking products like Current Accounts, Savings Deposits, etc. offer certain para-banking activities either departmentally or by setting up subsidiaries. Some such activities are insurance, Mutual funds, credit/debit cards, social security schemes, etc. But such services cannot be offered from the bank's products due to certain restrictions, rather they offer them through the relevant service providers by acting as their corporate agents. These services increase the reach and customer base of banks as it makes the banks a one-stop financial hub for all the financial demands of different customers. Also, it improves the fee-based income of the banks. For example - To avail mutual funds products through banks, the concept of Mutual banking has emerged.

Q. What are interval funds?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 17

An interval fund is a mutual fund where the fund house allows to purchase of the units only during a particular pre-decided period.

Test: Retail Banking & Wealth Management - 4 - Question 18

What is the purpose of appointing dedicated Marketing Managers in retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 18

The appointment of dedicated Marketing Managers in retail banking is aimed at specifically focusing on marketing and customer acquisitions. The purpose is to improve the effectiveness of delivery to retail customers.

Test: Retail Banking & Wealth Management - 4 - Question 19

Although every organization, including banks, must be vigilant in spending money. But today certain circumstances like changes in customer preferences, technological innovations, etc. are putting pressure on banks to improve their operating efficiency. The banks can achieve efficiency in their operations by limiting their expenditure in some areas and making necessary investments in technology, marketing, automation, etc., and also optimizing their legacy investments in branches and traditional systems. The opportunity for improving the operating efficiency varies across different banks and even different branches of the same bank. According to a survey, two out of three bankers acknowledged that they just rely on retaining the current customers for business development. However, the banks need to implement a proactive approach.

Q. How do NPAs impact the profitability of banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 19

NPAs have the most adverse impact on the bank's profitability as they increase the cost of operations by declining the net interest margins of the bank.

Test: Retail Banking & Wealth Management - 4 - Question 20

Although every organization, including banks, must be vigilant in spending money. But today certain circumstances like changes in customer preferences, technological innovations, etc. are putting pressure on banks to improve their operating efficiency. The banks can achieve efficiency in their operations by limiting their expenditure in some areas and making necessary investments in technology, marketing, automation, etc., and also optimizing their legacy investments in branches and traditional systems. The opportunity for improving the operating efficiency varies across different banks and even different branches of the same bank. According to a survey, two out of three bankers acknowledged that they just rely on retaining the current customers for business development. However, the banks need to implement a proactive approach.

Q. Which among the following questions specifies a proactive approach to identifying new prospect opportunities?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 20

The branch officials should focus on the above-mentioned questions to begin the process of implementing a proactive approach.

Test: Retail Banking & Wealth Management - 4 - Question 21

Which of the following statements is correct about the Market Intelligence system, as a component of MKIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 21

Marketing Intelligence System covers information from external sources regarding happenings like developments in the environment, changing consumption patterns of the market, etc. through the use of newspapers, magazines, etc.

Test: Retail Banking & Wealth Management - 4 - Question 22

Which among the following mobile payment technologies was introduced first?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 22

In 2011, Google Wallet was introduced and for the first time, people could directly use mobile phones for purchases.

Test: Retail Banking & Wealth Management - 4 - Question 23

Which among the following business model approaches is mostly adopted by the public sector banks in India?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 23

In the departmental approach, the business unit is divided based on functions like Marketing, Finance, etc. Public sector banks in India have generally adopted the Departmental approach as their retail banking model.

Test: Retail Banking & Wealth Management - 4 - Question 24

Which of the following describes the RuPay Classic?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 24

RuPay Classis is the most basic variant of the RuPay card which offers minimum features in which there are as such no benefits airport lounge access, etc. but there are various merchant offers like offers at Dining, Pharmacy, etc.

Test: Retail Banking & Wealth Management - 4 - Question 25

What has led to increased demand for financial markets and banks in India?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 25

The Indian economy has witnessed an upswing over the past few years due to the liberalization policy adopted by the planners that have led to increased income and saving levels which in turn has led to increased demand on the financial markets, particularly on banks.

Test: Retail Banking & Wealth Management - 4 - Question 26

What is the difference between Retail banking and corporate banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 26

Retail banking involves providing services to individual consumers and small businesses while Wholesale banking or corporate banking involves providing banking services to corporates or big businesses.

Test: Retail Banking & Wealth Management - 4 - Question 27

In which among the following types of underwriting, the underwriter assumes full financial responsibility for any unsold shares?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 27

There are three types of undertaking- The one in which the underwriter agrees to assume the full financial responsibility of the shares is known as "Firm Commitment". In this, if any shares are left unsold, the underwriter buys them.

Test: Retail Banking & Wealth Management - 4 - Question 28

How does recovery of loans take place in Retail and Corporate banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 28

The monitoring and recovery of retail assets are more laborious because of the large customer base as compared to corporate banking.

Test: Retail Banking & Wealth Management - 4 - Question 29

Suppose Client A hires Bank B to help them in investing their money in different areas and assets. Client A gives them the required documents and information and asks Bank B to manage their money and invest in different areas which will give them the highest possible returns with the lowest risk.

Q. The above case is an example of:

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 29

The above scenario is an example of Portfolio management as the client has its money and the portfolio manager, the bank, is to manage the investment and try to maximize its client's wealth.

Test: Retail Banking & Wealth Management - 4 - Question 30

What is the difference in service delivery between new private-sector banks and public-sector banks in India?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 30

In new private sector banks, the internal customer/staff is more focused on service delivery, yet the service delivery is generally more personalized and caring in public sector banks, due to their loyal customers and better personal understanding of the customers’ profile by the staff in public banks.

Test: Retail Banking & Wealth Management - 4 - Question 31

What is an MKIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 31

The Marketing Information System refers to the systematic collection, analysis, interpretation, storage and dissemination of the market information, from both the internal and external sources, to the marketers on a regular, continuous basis.

Test: Retail Banking & Wealth Management - 4 - Question 32

What are the four distinct process models for integrating technology in retail banking identified by the Boston Consulting Group study?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 32

The Boston Consulting Group study identified four distinct process models for integrating technology in retail banking: Horizontally Organized Model, Vertically Organized Model, Predominantly Horizontally Organized Model with some modularization, and Predominantly Vertically Organized Model.

Test: Retail Banking & Wealth Management - 4 - Question 33

What is the role of CRISIL in BCSBI's rating process?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 33

BCSBI takes the technical assistance of rating agency CRISIL to assign numerical scores to member banks based on the data obtained during branch visits and customer responses.

Test: Retail Banking & Wealth Management - 4 - Question 34

What will the bank do if a complaint is unresolved at the branch level?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 34

If a complaint is unresolved at the branch level, the branch will escalate it to the topmost level of grievance redressal authority within the bank and provide a final response within 30 days.

Test: Retail Banking & Wealth Management - 4 - Question 35

What is the importance of delivery effectiveness in retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 35

Delivery effectiveness in retail banking plays a crucial role in building and maintaining customer relationships and loyalty. The bank needs to deliver products and services in a manner that meets the expectations of the customers and exceeds them. This can be achieved through various delivery models and channels.

Test: Retail Banking & Wealth Management - 4 - Question 36

The three existing Ombudsman schemes under the Codes of Bank's Commitment - Banking Ombudsman Scheme 2006, Ombudsman Scheme for NBFCs 2018, and Ombudsman Scheme for Digital Transactions 2019 have been integrated into one scheme known as:

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 36

The three existing Ombudsman Schemes integrated to become the "Integrated Ombudsman Scheme 2021."

Test: Retail Banking & Wealth Management - 4 - Question 37

What is the main purpose of BCSBI's branch visits and surveys?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 37

The major motive of BCSBI to visit branches is to monitor compliance with the Codes of "Bank's Commitment to Customers" and "Bank's Commitment to Micro & Small Enterprises" by member banks.

Test: Retail Banking & Wealth Management - 4 - Question 38

Which among the following bonds gives the right to the issuing company to convert the bonds into equity shares upon their maturity?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 38

In reverse convertible bonds, the issuing company holds the right to convert them into equity shares upon their maturity.

Test: Retail Banking & Wealth Management - 4 - Question 39

What is the qualification of the dedicated Marketing Managers appointed in retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 39

The dedicated Marketing Managers appointed in retail banking are usually MBAs in Marketing who are young and energetic and recruited from the campuses of management schools.

Test: Retail Banking & Wealth Management - 4 - Question 40

A bank lends loans to its various customers at different rates and conditions. These loans are the asset products of the banks and are shown on the asset side of a Bank's Balance sheet. However, in the process of lending banks to their customers, a bank assumes various risks. The repayment of such loans and advances is one criterion for judging the success of any bank. In other words, the higher the efficiency of the collection department, the better would be the ability of financial institutions to launch any asset product with confidence. The banks use various methods and undertake various processes to make the customers repay the extended loans. The banks use various recovery processes to recover the retail assets when default takes place such as visiting Debt Recovery Tribunal the purpose. Despite many efforts of the banks, sometimes the customers default on their loans due to various reasons.

Q. Which among the following types of installments (principal+interest) is paid in a single payment?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 40

A bullet payment is one in which the loan amount along with interest is paid in a single payment at the end of the loan period.

Test: Retail Banking & Wealth Management - 4 - Question 41

A bank lends loans to its various customers at different rates and conditions. These loans are the asset products of the banks and are shown on the asset side of a Bank's Balance sheet. However, in the process of lending banks to their customers, a bank assumes various risks. The repayment of such loans and advances is one criterion for judging the success of any bank. In other words, the higher the efficiency of the collection department, the better would be the ability of financial institutions to launch any asset product with confidence. The banks use various methods and undertake various processes to make the customers repay the extended loans. The banks use various recovery processes to recover the retail assets when default takes place such as visiting Debt Recovery Tribunal the purpose. Despite many efforts of the banks, sometimes the customers default on their loans due to various reasons.

Q. Which of the following states the condition of Genuine Defaults?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 41

In Genuine Defaults, the customers/borrowers fail to repay the loan due to personal attacks, job losses, etc. Here the intent is to repay the loan but the ability to pay is affected.

Test: Retail Banking & Wealth Management - 4 - Question 42

SIP is the one:

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 42

SIP is a disciplined way of investing in mutual funds where one invests a fixed amount at pre-defined intervals like every month.

Test: Retail Banking & Wealth Management - 4 - Question 43

What is the definition of pure retail banking?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 43

Retail banking is the provision of mass-market banking services to private individuals.

Test: Retail Banking & Wealth Management - 4 - Question 44

To be successful, the banks understand their different customers, differentiate them on certain characteristics, and offer different types of banking and other financial products which best suit a particular segment. But certain core products are offered to all the segments. Here, the competition among banks lies in offering the products in the best possible manner. But there are some new products offered by banks called augmented products. So, the overall products of the banks are classified into three types, one of which is Deposit products. These products are offered to deposit the funds in different ways and since the customers' deposits form the bank's liability, these are also called Liability products. Some such products are Savings Deposits, Current Deposits, Term Deposits, etc. Savings and Current Deposits are demand Deposits whereas Term Deposits involve RDs, FDs, and Combination Term Deposits.

Q. Which of the following is/are the feature(s) of a Basic Savings Bank Deposit Account (BSBDA)?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 44

BSBDA is considered a normal banking service in which there is no requirement for any minimum balance and doesn't have any limit on the maximum number of deposits but only four withdrawals are allowed in a month, including ATM withdrawals. Also, the holders of BSBDA cannot open any other savings deposit account in the same bank.

Test: Retail Banking & Wealth Management - 4 - Question 45

To be successful, the banks understand their different customers, differentiate them on certain characteristics, and offer different types of banking and other financial products which best suit a particular segment. But certain core products are offered to all the segments. Here, the competition among banks lies in offering the products in the best possible manner. But there are some new products offered by banks called augmented products. So, the overall products of the banks are classified into three types, one of which is Deposit products. These products are offered to deposit the funds in different ways and since the customers' deposits form the bank's liability, these are also called Liability products. Some such products are Savings Deposits, Current Deposits, Term Deposits, etc. Savings and Current Deposits are demand Deposits whereas Term Deposits involve RDs, FDs, and Combination Term Deposits.

Q. What is the purpose of the KYC Form?
(i) To serve as a database for cross-selling other products to the customer.
(ii) To obtain documents to verify the identity of the customer.
(iii) To prevent money laundering activities.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 45

KYC Form serves as a database for cross-selling other products to the customer, obtains documents to verify the identity of the customer, and prevents money laundering activities.

Test: Retail Banking & Wealth Management - 4 - Question 46

To be successful, the banks understand their different customers, differentiate them on certain characteristics, and offer different types of banking and other financial products which best suit a particular segment. But certain core products are offered to all the segments. Here, the competition among banks lies in offering the products in the best possible manner. But there are some new products offered by banks called augmented products. So, the overall products of the banks are classified into three types, one of which is Deposit products. These products are offered to deposit the funds in different ways and since the customers' deposits form the bank's liability, these are also called Liability products. Some such products are Savings Deposits, Current Deposits, Term Deposits, etc. Savings and Current Deposits are demand Deposits whereas Term Deposits involve RDs, FDs, and Combination Term Deposits.

Q. Which among the following is not a Combination deposit scheme of banks?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 46

Combination deposits, as the name suggests are offered in a combination of two types of deposits. Different banks offer these products under different names like Flexi Deposit, Multiple deposits, Quantum deposits, Unfixed deposits, etc.

Test: Retail Banking & Wealth Management - 4 - Question 47

Who is an Originator under the Securitization of Assets?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 47

Originator means the bank or company that transfers Assets from its Balance Sheet to an SPV as a part of the Securitization transaction and also includes other entities of the group to which the bank belongs.

Test: Retail Banking & Wealth Management - 4 - Question 48

Private banks follow the _________ strategy in their business model and foreign banks follow the _________ strategy.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 48

Private banks generally follow the positioning platform strategy which focuses on getting a better competitive position while foreign banks mainly follow the business strategy and achieve their targeted profits.

Test: Retail Banking & Wealth Management - 4 - Question 49

What is the difference between RTGS and NEFT as electronic methods of remitting funds in the banking industry?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 49

Real Time Gross Settlement (RTGS) is a payment system in real-time above Rs. 2 lakhs. NEFT is a payment system that takes place in batches for which there is no minimum or maximum limit.

Test: Retail Banking & Wealth Management - 4 - Question 50

Which product development strategy is carried out without any background research?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 50

One way of product development is based on pure market conditions and customer segments without any background research, it follows the Leader approach by following the same approach as the leader.

Test: Retail Banking & Wealth Management - 4 - Question 51

PQR Bank has implemented several security controls in its Core Banking System (CBS). What is the purpose of security controls in CBS?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 51

Security controls in Core Banking Systems (CBS) are designed to prevent unauthorized access to customer accounts, as well as to protect customer data from being stolen or compromised. This is accomplished through a variety of measures, including strong passwords, encryption, firewalls, and access controls. By implementing these security controls, banks can help to maintain the confidentiality, integrity, and availability of their customers' financial data.

Test: Retail Banking & Wealth Management - 4 - Question 52

Statement 1: Credit cards are a popular and important retail asset product offered by banks.
Statement 2: Credit cards provide consumers with a revolving line of credit that can be used for purchases and cash advances.
Statement 3: Credit card interest rates are typically lower than those for personal loans.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 52

Credit cards are indeed a popular and important retail asset product offered by banks, as they provide consumers with a flexible and convenient way to make purchases and access credit. Credit cards provide a revolving line of credit that can be used for purchases and cash advances. However, credit card interest rates are typically higher than those for personal loans, which are often secured by collateral. Therefore, statement 3 is false.

Test: Retail Banking & Wealth Management - 4 - Question 53

In case of short term asset, the immovable property shall be held by the person for less than

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 53

Short term capital assets refer to any asset owned by a taxpayer for under than 36 months from date of initial transfer

However, in the following cases, if Capital asset is held for more than 12 months it shall be treated as long term capital asset

  • Equity or preference shares held in a company listed in recognized stock exchange in India
  • Any other security listed in recognized stock exchange in India
  • Units of UTI (whether quoted or not)
  • Units of an equity oriented fund
  • Zero coupon bonds (whether quoted or not)
  • Unlisted Equity or preference shares held in a company (if transfer of such shares takes place on or before 10th July, 2014)
  • Units of mutual fund specified under section 10(23D) other than equity oriented fund (whether quoted or not, if transfer of such shares takes place on or before 10th July, 2014)
Test: Retail Banking & Wealth Management - 4 - Question 54

Revenue Bonds have extended maturity periods of upto how many years?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 54

Revenue Bonds are focused on generating funds for specified projects and the repayment and interest issued to bondholders are processed via revenue explicitly generated via the projects declared in the bonds. They have extended maturity periods of upto 30 years and higher returns than GO bonds.
Thus, the correct option is (a).

Test: Retail Banking & Wealth Management - 4 - Question 55

Retail banking focuses on providing financial services to _______ customers, while corporate/wholesale banking focuses on providing financial services to _______ customers.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 55

Retail banking focuses on providing financial services to individual customers, such as savings accounts, personal loans, and credit cards. Corporate/wholesale banking, on the other hand, focuses on providing financial services to institutions, such as large corporations, government entities, and non-profit organizations. Therefore, option (a) is the correct answer.

Test: Retail Banking & Wealth Management - 4 - Question 56

Wealth managers can help clients in which of the following activities?
I. Optimization of their assets
II. Tax Collection
III. Wealth Auditing

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 56
  • Wealth Managers also support the personsin the optimization of their assets projects by helping them to manage their taxation and savings and by advising them on their investments and in terms of asset restructure or arbitrage. They also assist in wealth auditing which allows them to obtain a global vision of their situation, analysing their situation in order to define an asset strategy and implementation of any financial actions or paperwork.
  • Thus, the correct option is (b)
Test: Retail Banking & Wealth Management - 4 - Question 57

Among the given, which of the following assets is/are not included in the definition of capital assets?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 57

Any profit or gain from sale or transfer of a capital asset is chargeable to tax under the head "capital gains" Capital asset means any property whether movable or immovable, tangible or intangible.
The following assets are, however, excluded from the definition of capital assets:

  • Stock-in-trade, stores, raw material
  • Personal effects (excluding Jewellery)
  • Agricultural land outside the limit of municipality or notified area.
Test: Retail Banking & Wealth Management - 4 - Question 58

Full Service Investment Banks offer which of the following services?
I. Equity Research
II. Taxation
III. Sales & Trading

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 58

Full Service Investment Bank offer the following services:

  • Underwriting - Capital raising and underwriting groups work between investors and companies that want to raise money or go public via the IPO process. This function serves the primary market or "new capital".
  • Mergers & Acquisitions (M&A) - Advisory roles for both buyers and sellers of businesses, managing the M&A process start to finish.
  • Sales & Trading - Matching up buyers and sellers of securities in the secondary market. Sales and trading groups in investment banking act as agents for clients and also can trade the firm's own capital.
  • Equity Research - The equity research group research, or "coverage", of securities helps investors make investment decisions and supports trading of stocks.
  • Asset Management - Managing investmentsfor a wide range of investorsincluding institutions and individuals, across a wide range of investment styles. Underwriting Services in Investment Banking Underwriting is the process of raising capital through

Thus, the correct option is (b).

Test: Retail Banking & Wealth Management - 4 - Question 59

Assertion: Digitisation of retail banking products can lead to reduced operational costs for banks.

Reason: Digital banking services require less manual labour and physical infrastructure than traditional banking services.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 59

Digitisation of retail banking products reduces the need for physical infrastructure and manual labour, resulting in reduced operational costs for banks. Digital banking services are more efficient and cost-effective than traditional banking services.

Test: Retail Banking & Wealth Management - 4 - Question 60

____________ ATMs are intended to offer the facility of Cash Withdrawals, Cash Remittances, Balance Enquiry etc., at the branch premises itself.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 60

Automated Teller Machines (ATMs):

  • ATMs are the starting point of remote channels that moved the customers away from the branch.
  • The main objectives of banks to set up AIMS are (a)To offer convenience to customers an additional choice to withdraw money during any time of the day according to their will and pleasure. (b) To move the customers away from the counters as service cost is comparatively less through ATMs than across the counter at the branch.
  • There are basically two types of ATMs to deliver services to retail customers - (i) On Site ATMs and (ii) Off Site ATMs.
  • On Site ATMs are intended to offer the facility of Cash Withdrawals, Cash Remittances, Balance Enquiry etc., at the branch premises itself.
  • Off-Site ATMs are designed to be situated away from the branches at convenient and busy locations to enable the customers to access it for their different needs but not necessarily from the branch.

Hence, option (b) is the correct choice

Test: Retail Banking & Wealth Management - 4 - Question 61

Among the given, which of the following requisites are essential for getting the mortgage by deposit of title deeds?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 61

Mortgage by Deposit of Title Deeds.

  • The essential requisites of a "Mortgage by Deposit of Title Deeds" are:
  • There must be a debt, existing or future.
  • There must be a deposit of documents of title to immovable property.
  • The deposit must be made in one of the notified towns.
  • The deposit must be made by the mortgagor or his agent with the mortgagee or his agent.
  • The deposit must be made with an intent to create a security for the debt.
  • Letter of intent should be obtained. Necessary entry should be made in the document register.
Test: Retail Banking & Wealth Management - 4 - Question 62

Yugali is a college student who wants to open a checking account to manage her expenses and receive financial aid disbursements. She is looking for a bank that does not charge a monthly maintenance fee and has a wide network of ATMs. what type of banking service is Yugali looking for?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 62

Yugali, being an individual customer, is looking for a bank that can offer her a checking account with no monthly maintenance fee and a wide network of ATMs. This falls under the category of retail banking services, which is the provision of financial services by a bank to individual customers. Option (a) is incorrect since corporate banking services are tailored to meet the needs of corporations and large businesses. Option (b) is also incorrect since investment banking services deal with complex financial transactions, such as mergers and acquisitions and underwriting of securities, and are typically offered to institutional investors and corporations. Option (d) is also incorrect since private banking services are designed to cater to the needs of high net worth individuals.

Test: Retail Banking & Wealth Management - 4 - Question 63

Which of the following things are done to reinstate the original asset mix when the movements of the markets force it out of kilter?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 63
  • Rebalancing is used to return a portfolio to its original target allocation at regular intervals, usually annually. This is done to reinstate the original asset mix when the movements of the markets force it out of kilter. Rebalancing generally involves selling high-priced securities and putting that money to work in lower-priced and out-of-favor securities. The annual exercise of rebalancing allows the investor to capture gains and expand the opportunity for growth in high potential sectors while keeping the portfolio aligned with the original risk/ return profile.
  • Thus, the correct option is (a)
Test: Retail Banking & Wealth Management - 4 - Question 64

Assertion: Credit scoring models are objective and unbiased in their assessment of a borrower's creditworthiness.

Reason: Credit scoring models use statistical algorithms that are designed to eliminate any potential biases or discrimination.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 64

The assertion that credit scoring models are objective and unbiased in their assessment of a borrower's creditworthiness is true, and the reason that credit scoring models use statistical algorithms that are designed to eliminate any potential biases or discrimination is also true. Credit scoring models are designed to be objective and fair, and are based solely on data and statistical analysis, which eliminates any potential biases or discrimination. Therefore, both the assertion and the reason are true, and the reason is the correct explanation of the assertion.

Test: Retail Banking & Wealth Management - 4 - Question 65

Which of the following is Correct?

Statement I: Legal risk is faced by Banks in retail loans done through DSA model of marketing

Statement II: Credit Models is not based on Payment behaviour of the borrower.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 65
  • Bank faces mainly Reputational Risk when the retail loans are done through DSA model of marketing as the DSA represents the Bank and the reputation of Bank can be tarnished in case of any frauds committed by DSA.
  • The Credit scoring models are based on the financial discipline of the applicant/borrower.
  • Hence Both statements are not correct.
Test: Retail Banking & Wealth Management - 4 - Question 66

Statement 1: Retail banking involves the provision of financial services to individual customers.
Statement 2: The role of retail banking in bank operations is to generate revenue through customer deposits and loans.
Statement 3: Retail banking services include savings accounts, personal loans, and credit cards.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 66

Retail banking involves the provision of financial services to individual customers, as stated in Statement 1. The role of retail banking in bank operations is to generate revenue through customer deposits and loans, as stated in Statement 2. Retail banking services include savings accounts, personal loans, and credit cards, as stated in Statement 3. Therefore, all three statements are true, and option (d) is the correct answer.

Test: Retail Banking & Wealth Management - 4 - Question 67

Among the given, who is not eligible for taking the vehicle loan?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 67

The following are the eligibility for taking vehicle loan:

  • Individuals in confirmed service in Government, Public Sector Undertakings, reputed private organisations and institutions.
  • Professional & Self-Employed persons ,Business people
  • In case of employed people, take home pay not less than 50% of gross salary.

Hence, among the given, in case of employed person, take home pay not less than 50% of gross salary., so, the person having take home pay not less than 30% of gross salary is not eligible for taking vehicle loan.

Test: Retail Banking & Wealth Management - 4 - Question 68

In debt schemes, __________ risk is the risk of default by the issuer of the underlying securities.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 68

In debt schemes, credit risk is the risk of default by the issuer of the underlying securities. If the issuer defaults, the value of the securities falls, and the scheme may incur losses. Therefore, debt schemes must assess the creditworthiness of the issuers before investing in their securities.

Test: Retail Banking & Wealth Management - 4 - Question 69

Consider the following situation and identify the Product Policy concept discussed here.

Understanding the mindset of prospective/existing customers is very important. The strategy of a bank should be to create the position of their products in customers' minds for a long duration and it should be closer to customers' expectations and should be unique as compared to competitor's products.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 69
  • Out of the given above Product Marketing is not the concept of Product policy.
  • The above information is related to product positioning.
Test: Retail Banking & Wealth Management - 4 - Question 70

An education loan of maximum of what amount is given for studies in India?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 70
  • Maximum loan: Rs.10 lakh for studies in India and Rs 20 lakh for studies abroad
  • Hence, option (a) is the correct choice.
Test: Retail Banking & Wealth Management - 4 - Question 71

PQR Bank is using RBI's VSAT network for its network connectivity. What is the purpose of RBI's VSAT network?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 71

RBI's VSAT network is a dedicated network infrastructure that facilitates interbank communication and transactions. The network enables banks to securely and efficiently communicate with one another, facilitating transactions and other financial services. By using this network, banks can ensure the security and reliability of their transactions and operations.

Test: Retail Banking & Wealth Management - 4 - Question 72

Which of the following is/are not correct regarding the requirements of a well designed chat bot?
I. Chat bot should provide different experience in different channels, i.e, mobile, web, etc.
II. It should be available round the clock for conversation with customers.
III. It should be capable of remembering the customer preferences and uses order history to suggest products.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 72

Chatbots or virtual assistants are new tools designed to simplify interaction between humans and computer. Chatbots are examples of AI in banking that are replacing the front-desk scenes at the banks. These AI-led machines provide next level digitized and customized interactive experiences to the customers.

A well designed chat bot should:

  • Be available round the clock for conversation with customers.
  • Provide the same experience irrespective of the channel.
  • Be able to seamlessly interpret languages commonly conversed in.
  • Restricts response format to easy to understand text, images and unified widgets for better interaction.
  • Capable of remembering the customer preferences and uses order history to suggest products.
Test: Retail Banking & Wealth Management - 4 - Question 73

Company XYZ is a mid-sized company that sells consumer electronics. The company has been experiencing declining sales in recent years and wants to implement a Marketing Information System (MIS) to help turn things around. What is the first step that Company XYZ should take in implementing an MIS?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 73

Before collecting or analyzing data, it is important for Company XYZ to identify the information needs of the organization. This will ensure that the MIS is designed to provide the insights that are most relevant to the company's goals.

Test: Retail Banking & Wealth Management - 4 - Question 74

Statement 1: Customer Relationship Management (CRM) is important for building strong customer relationships.
Statement 2: CRM can help banks understand their customers' needs and preferences.
Statement 3: By using CRM, banks can offer personalized products and services to their customers.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 74

All three statements are true. Customer Relationship Management (CRM) is a strategy that focuses on building and maintaining strong relationships with customers. By understanding their needs and preferences through CRM tools and techniques, banks can offer personalized products and services that meet their customers' needs. This can lead to increased customer satisfaction, loyalty, and retention.

Test: Retail Banking & Wealth Management - 4 - Question 75

Among the given, under which requirement do service quality factors like Competence, Courtesy, and Credibility lies?

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 75

Customer Requirements about Service Quality:

  • Tangibles: Appearance of physical facilities, equipment, personnel and communication materials; attractiveness of bank's facilities; easy understandability of credit card statement.
  • Reliability: Ability to perform the promised service dependably and accurately;
  • Responsiveness: Willingness to help customers and provide prompt service. Resolving customer's problems quickly; Recredit of wrongly debited charges properly.
  • Assurance: (i) Competence - Possession of required skills and knowledge to perform services; (b) Courtesy - Politeness, respect, consideration and friendliness of the contact personnel; (c) Credibility - Trustworthiness about the service provider; (iv) Security - Freedom from risk and doubt.
  • Empathy: Access - Approachability and ease of contact; (ii) Communication - Keeping customers informed in a language that they understand (iii) Understanding the customer - Making an effort to know customers and their needs.
Test: Retail Banking & Wealth Management - 4 - Question 76

Statement 1: Credit risk is the risk of loss that arises from a borrower who fails to make required payments on a loan.
Statement 2: Business risk is the risk that a company will not generate adequate earnings or returns on its investments.
Statement 3: Market risk is the risk of loss that arises from movements in market prices or rates.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 76

Credit risk, business risk, and market risk are all types of risk that can affect an organization's financial performance. Credit risk arises from the potential that a borrower will fail to make required payments on a loan, while business risk is the potential that a company will not generate adequate earnings or returns on its investments. Market risk is the risk of loss that arises from movements in market prices or rates.

Test: Retail Banking & Wealth Management - 4 - Question 77

___________ is a type of remittance product that allows the sender to load money onto a card, which can be used by the beneficiary to withdraw cash or make purchases.

Detailed Solution for Test: Retail Banking & Wealth Management - 4 - Question 77

A prepaid card is a type of remittance product that allows the sender to load money onto a card, which can be used by the beneficiary to withdraw cash or make purchases. The card can be used at ATMs or merchant locations that accept the card network.