Banking Sector Module

Welcome to your Banking Sector Module

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

Regulating commercial banks

Providing loans to individuals and businesses

Promoting economic development by financing infrastructure projects

Facilitating international banking services on behalf of other banks

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

To limit the amount of deposits a bank can accept

To encourage banks to invest in government securities

To prevent excessive lending and maintain financial stability

To ensure banks have sufficient funds to cover their expenses

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 determine the interest rates on loans

To regulate the operations of non-bank financial institutions

To assess the creditworthiness of borrowers

What is a non-performing asset (NPA)?

An asset that generates high returns for the bank

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

An asset that is not backed by collateral

An asset on which the borrower has defaulted on loan repayments

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses

Enabling real-time settlement of high-value interbank transactions

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

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

Regulating commercial banks

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

Providing loans to individuals and businesses

Regulating commercial banks

Advising companies on mergers and acquisitions

Facilitating international trade finance

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

Trading securities on behalf of clients

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans for the purchase or construction of homes

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

To regulate the operations of non-bank financial institutions

To ensure the stability and resilience of banks

To facilitate international trade finance

To prevent money laundering and financial crimes

10.

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses in underserved areas

Mobilizing savings and providing credit to members of the cooperative

11.

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

Regulating commercial banks

Facilitating international banking services on behalf of other banks

12.

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

To assess the creditworthiness of borrowers

To prevent money laundering and financial crimes

To identify potential customers for marketing purposes

To determine the interest rates on loans

13.

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

Providing loans to individuals and businesses

Regulating commercial banks

Ensuring compliance with tax regulations for US citizens and residents

Facilitating international banking services on behalf of other banks

14.

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

Facilitating the holding and transfer of securities

Trading securities on behalf of clients

Providing loans to individuals and businesses

Regulating commercial banks

15.

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

16.

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

Accepting deposits from individuals and providing interest on savings

Regulating commercial banks

Facilitating international banking services on behalf of other banks

Providing banking services in remote areas on behalf of banks

17.

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

Accepting deposits

Issuing government securities

Providing payment services

Granting loans

18.

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

A regulatory document filed by banks with the central bank

A short-term loan provided by commercial banks

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

A document that certifies ownership of shares in a bank

19.

What is the function of a savings bank 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 loans to individuals and businesses

20.

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

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

Providing loans to individuals and businesses

21.

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

Accepting deposits from other banks and providing wholesale banking services

Regulating commercial banks

Facilitating international trade finance

Providing loans to individuals and businesses

22.

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

Providing loans to individuals and businesses in rural areas

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Mobilizing savings and providing credit in rural areas

23.

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

Regulating commercial banks

Accepting deposits from individuals and providing interest on savings

Providing infrastructure for electronic payments and settlement

Facilitating international banking services on behalf of other banks

24.

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

A loan provided by commercial banks for purchasing a property

A debt instrument backed by a pool of mortgage loans

A regulatory document filed by banks with the central bank

A document that certifies ownership of shares in a bank

25.

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

Providing loans to individuals and businesses

Regulating commercial banks

Combating money laundering and terrorist financing

Facilitating international banking services on behalf of other banks

26.

What is the function of a retail bank?

Financing large infrastructure projects

Providing banking services to individuals and small businesses

Facilitating international trade finance

Trading securities on behalf of clients

27.

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

Regulating commercial banks

Overseeing the securities market and protecting investor interests

Providing loans to individuals and businesses

Facilitating the settlement of financial transactions

28.

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

Assessing the creditworthiness of borrowers and debt instruments

Facilitating international trade finance

Regulating commercial banks

Providing loans to individuals

29.

What is the purpose of the banking ombudsman scheme?

To facilitate international trade finance

To provide loans to individuals and businesses

To regulate the operations of non-bank financial institutions

To resolve customer complaints against banks

30.

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

Facilitating international trade finance

Trading securities on behalf of clients

Regulating commercial banks

Providing loans to individuals and businesses in underserved areas

31.

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

Regulating commercial banks

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

32.

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Overseeing and promoting digital payment systems in India

Providing loans to individuals and businesses

33.

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

Investing in government securities

Facilitating the settlement of financial transactions

Regulating commercial banks

Providing loans to individuals and businesses

34.

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

Providing basic banking services such as remittances and payments

Accepting deposits from individuals and providing interest on savings

Facilitating international banking services on behalf of other banks

Regulating commercial banks

35.

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

Providing loans to individuals and businesses

Regulating commercial banks

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

Facilitating international trade finance

36.

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing banking services through mobile devices

Trading securities on behalf of clients

37.

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

To determine the interest rates on loans

To assess the creditworthiness of borrowers

To measure the capital adequacy of banks

To regulate the operations of non-bank financial institutions

38.

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

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

Facilitating international trade finance

Regulating commercial banks

Providing loans to individuals and businesses

39.

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

Providing loans to individuals and businesses

Regulating commercial banks

Facilitating international trade finance

Trading securities on behalf of clients

40.

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

To determine the interest rates on loans

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

To measure the capital adequacy of banks

To assess the creditworthiness of borrowers

41.

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

Engaging in bank-like activities but outside the regulatory framework

Regulating commercial banks

42.

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

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses

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

43.

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

Providing loans to individuals and businesses

Offering banking services in a foreign country

Regulating commercial banks

Facilitating international trade finance

44.

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

Regulating commercial banks

Providing loans to individuals and businesses

Promoting the development of small-scale industries

Facilitating international trade finance

45.

What is the role of a correspondent bank?

Investing in government securities

Regulating commercial banks

Facilitating international banking services on behalf of other banks

Providing loans to individuals and businesses

46.

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

Ensuring financial stability and promoting financial sector development

Facilitating international banking services on behalf of other banks

Regulating commercial banks

Providing loans to individuals and businesses

47.

What is the primary source of income for commercial banks?

Interest income from loans

Fees and commissions

Foreign exchange trading

Government subsidies

48.

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

Issuing credit cards

Facilitating international trade finance

Providing loans to individuals

Regulating commercial banks

49.

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

Ensuring credit flow to certain priority sectors of the economy

Providing loans to individuals and businesses

Facilitating international banking services on behalf of other banks

Regulating commercial banks

50.

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

Facilitating international banking services on behalf of other banks

Providing loans to individuals and businesses

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