Banking Sector Module

Welcome to your Banking Sector Module

What is the role of a foreign bank in the banking sector?

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating international trade finance

Offering banking services in a foreign country

What is the purpose of the Real-Time Gross Settlement (RTGS) system in the banking sector?

Regulating commercial banks

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

Enabling real-time settlement of high-value interbank transactions

What is the function of a credit rating agency in the banking sector?

Regulating commercial banks

Providing loans to individuals

Facilitating international trade finance

Assessing the creditworthiness of borrowers and debt instruments

What is the function of a retail bank?

Providing banking services to individuals and small businesses

Trading securities on behalf of clients

Financing large infrastructure projects

Facilitating international trade finance

What is the purpose of the Financial Stability and Development Council (FSDC) in the banking sector?

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating international banking services on behalf of other banks

Ensuring financial stability and promoting financial sector development

What is the role of the Reserve Bank of India (RBI) in the banking sector?

Trading securities on behalf of clients

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating international trade finance

What is the function of a commercial paper in the banking sector?

A regulatory document filed by banks with the central bank

A document that certifies ownership of shares in a bank

A debt instrument issued by corporations to raise short-term funds

A short-term loan provided by commercial banks

What is the primary source of income for commercial banks?

Government subsidies

Interest income from loans

Fees and commissions

Foreign exchange trading

What is the purpose of a bank's reserve requirement?

To ensure banks have sufficient funds to cover their expenses

To encourage banks to invest in government securities

To limit the amount of deposits a bank can accept

To prevent excessive lending and maintain financial stability

10.

What is the purpose of the liquidity coverage ratio (LCR) in the banking sector?

To measure a bank's ability to meet short-term liquidity needs

To regulate the operations of non-bank financial institutions

To determine the interest rates on loans

To assess the creditworthiness of borrowers

11.

What is the purpose of the Open Market Operations (OMO) in the banking sector?

Facilitating international trade finance

Managing liquidity in the banking system through buying and selling government securities

Providing loans to individuals and businesses

Regulating commercial banks

12.

What is the purpose of the Foreign Account Tax Compliance Act (FATCA) in the banking sector?

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Ensuring compliance with tax regulations for US citizens and residents

13.

What is the role of a payment system provider in the banking sector?

Providing infrastructure for electronic payments and settlement

Regulating commercial banks

Facilitating international banking services on behalf of other banks

Accepting deposits from individuals and providing interest on savings

14.

What is the purpose of the Financial Intelligence Unit (FIU) in the banking sector?

Combating money laundering and terrorist financing

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

Regulating commercial banks

15.

What is the function of a mobile banking platform in the banking sector?

Trading securities on behalf of clients

Providing banking services through mobile devices

Facilitating international banking services on behalf of other banks

Regulating commercial banks

16.

What is the role of a non-banking financial company (NBFC) in the banking sector?

Regulating commercial banks

Engaging in financial activities similar to banks but without a banking license

Providing loans to individuals and businesses

Facilitating international trade finance

17.

What is the role of a custodian bank in the banking sector?

Providing loans to individuals and businesses

Safeguarding and administering financial assets on behalf of clients

Facilitating international trade finance

Regulating commercial banks

18.

What is the purpose of the Small Industries Development Bank of India (SIDBI) in the banking sector?

Facilitating international trade finance

Regulating commercial banks

Promoting the development of small-scale industries

Providing loans to individuals and businesses

19.

What is the function of a development bank in the banking sector?

Facilitating international banking services on behalf of other banks

Promoting economic development by financing infrastructure projects

Regulating commercial banks

Providing loans to individuals and businesses

20.

What is the role of the Securities and Exchange Board of India (SEBI) in the banking sector?

Overseeing the securities market and protecting investor interests

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating the settlement of financial transactions

21.

What is the function of a mortgage-backed security (MBS) in the banking sector?

A regulatory document filed by banks with the central bank

A debt instrument backed by a pool of mortgage loans

A loan provided by commercial banks for purchasing a property

A document that certifies ownership of shares in a bank

22.

What is the function of a small finance bank in the banking sector?

Offering basic banking services and credit to unserved and underserved sections of the population

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

Regulating commercial banks

23.

What is the role of a cooperative bank in the banking sector?

Regulating commercial banks

Providing loans to individuals and businesses

Mobilizing savings and providing credit to members of the cooperative

Facilitating international banking services on behalf of other banks

24.

What is the role of a universal bank in the banking sector?

Facilitating international banking services on behalf of other banks

Providing loans to individuals and businesses

Offering a wide range of banking services including retail and corporate banking

Regulating commercial banks

25.

What is the purpose of the Know Your Customer (KYC) process in banking?

To prevent money laundering and financial crimes

To identify potential customers for marketing purposes

To determine the interest rates on loans

To assess the creditworthiness of borrowers

26.

Which of the following is NOT a function of commercial banks?

Granting loans

Issuing government securities

Providing payment services

Accepting deposits

27.

What is the function of a financial conglomerate in the banking sector?

Offering a diverse range of financial services such as banking, insurance, and asset management

Regulating commercial banks

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

28.

What is the purpose of the Financial Inclusion Index (FI-Index) in the banking sector?

Regulating commercial banks

Providing loans to individuals and businesses

Assessing the extent of financial inclusion in different regions of the country

Facilitating international banking services on behalf of other banks

29.

What is a non-performing asset (NPA)?

An asset that generates high returns for the bank

An asset on which the borrower has defaulted on loan repayments

An asset that is held by a non-bank financial institution

An asset that is not backed by collateral

30.

What is the purpose of the National Payments Corporation of India (NPCI) in the banking sector?

Regulating commercial banks

Overseeing and promoting digital payment systems in India

Facilitating international banking services on behalf of other banks

Providing loans to individuals and businesses

31.

What is the function of a bank guarantee in the banking sector?

Assuring payment to the beneficiary in case of default by the borrower

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating international banking services on behalf of other banks

32.

What is the purpose of the Priority Sector Lending (PSL) in the banking sector?

Ensuring credit flow to certain priority sectors of the economy

Regulating commercial banks

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

33.

What is the purpose of the cash reserve ratio (CRR) in the banking sector?

To determine the interest rates on loans

To assess the creditworthiness of borrowers

To regulate the amount of reserves banks must maintain with the central bank

To measure the capital adequacy of banks

34.

What is the role of a merchant bank in the banking sector?

Facilitating international trade finance

Providing loans to individuals and businesses

Advising companies on mergers and acquisitions

Regulating commercial banks

35.

What is the function of a housing finance company in the banking sector?

Facilitating international banking services on behalf of other banks

Trading securities on behalf of clients

Regulating commercial banks

Providing loans for the purchase or construction of homes

36.

What is the function of a business correspondent in the banking sector?

Facilitating international banking services on behalf of other banks

Accepting deposits from individuals and providing interest on savings

Regulating commercial banks

Providing banking services in remote areas on behalf of banks

37.

What is the role of a payment bank in the banking sector?

Facilitating international banking services on behalf of other banks

Providing basic banking services such as remittances and payments

Accepting deposits from individuals and providing interest on savings

Regulating commercial banks

38.

What is the role of a clearinghouse in the banking sector?

Facilitating the settlement of financial transactions

Providing loans to individuals and businesses

Regulating commercial banks

Investing in government securities

39.

What is the role of a cooperative credit society in the banking sector?

Facilitating international banking services on behalf of other banks

Mobilizing savings and providing credit to members of the cooperative

Providing loans to individuals and businesses in underserved areas

Regulating commercial banks

40.

What is the function of a regional rural bank in the banking sector?

Facilitating international banking services on behalf of other banks

Mobilizing savings and providing credit in rural areas

Regulating commercial banks

Providing loans to individuals and businesses in rural areas

41.

What is the function of a central securities depository (CSD) in the banking sector?

Trading securities on behalf of clients

Regulating commercial banks

Providing loans to individuals and businesses

Facilitating the holding and transfer of securities

42.

What is the function of a microfinance institution in the banking sector?

Providing loans to individuals and businesses in underserved areas

Trading securities on behalf of clients

Regulating commercial banks

Facilitating international trade finance

43.

What is the role of a shadow bank in the banking sector?

Facilitating international banking services on behalf of other banks

Providing loans to individuals and businesses

Regulating commercial banks

Engaging in bank-like activities but outside the regulatory framework

44.

What is the purpose of the risk-weighted assets (RWA) framework in the banking sector?

To regulate the operations of non-bank financial institutions

To determine the interest rates on loans

To measure the capital adequacy of banks

To assess the creditworthiness of borrowers

45.

What is the function of a savings bank in the banking sector?

Accepting deposits from individuals and providing interest on savings

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses

46.

What is the purpose of the banking ombudsman scheme?

To facilitate international trade finance

To resolve customer complaints against banks

To regulate the operations of non-bank financial institutions

To provide loans to individuals and businesses

47.

What is the role of a correspondent bank?

Investing in government securities

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses

48.

What is the role of a central bank in the banking sector?

Regulating commercial banks

Issuing credit cards

Facilitating international trade finance

Providing loans to individuals

49.

What is the function of a wholesale bank in the banking sector?

Regulating commercial banks

Facilitating international trade finance

Providing loans to individuals and businesses

Accepting deposits from other banks and providing wholesale banking services

50.

What is the purpose of the Basel III framework in the banking sector?

To regulate the operations of non-bank financial institutions

To facilitate international trade finance

To prevent money laundering and financial crimes

To ensure the stability and resilience of banks

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