Banking Awareness Test for IBPS, RBI, SBI, NABARD & other Bank Examinations - Set 2

1)   Which of the following are the ways to repay the personal loan?

a. Equated Monthly Installments via Cheques
b. Electronic Clearing Services
c. Cash
d. Both a and b
Answer  Explanation 

ANSWER: Both a and b

The loan can be repaid in the form of Equated Monthly Installment (EMI) via post-dated cheques drawn in favour of the bank or by releasing a mandate allowing payment through the Electronic Clearing Services (ECS) system.

2)   The Mutual fund is constituted under the provisions of which of the following acts?

a. The Securities and Exchange Board Of India Act,1992
b. RBI Act,1934
c. Indian Trusts Act,1882
d. Indian Registration Act,1908.
Answer  Explanation 

ANSWER: Indian Trusts Act,1882

The Mutual Fund is constituted as a trust in accordance with the provisions of the Indian Trusts Act, 1882 by the Sponsor. The trust deed is registered under the Indian Registration Act, 1908.

3)   When did the private companies got the permission to set up Mutual Funds?

a. 1992
b. 1993
c. 1994
d. 1982
Answer  Explanation 

ANSWER: 1992

In 1992 private companies also got permission to setup Mutual Funds and SEBI (Mutual Funds) Regulation 1993 provides guidelines for registration, constitution, management and schemes of Mutual Funds in India.

4)   Which of the following include the primary structure of the Mutual Funds?

a. Open-end funds
b. Unit Investment Trusts
c. Exchange traded Funds
d. All of the Above
Answer  Explanation 

ANSWER: All of the Above

Primary structures of mutual funds include open-end funds, unit investment trusts, and closed-end funds. Exchange-traded funds (ETFs) are open-end funds or unit investment trusts that trade on an exchange.

5)   What is the meaning of the term Repayment Capacity?

a. It is how much you pay in each EMI.
b. It is the time in which one can repay Housing Loan.
c. None of the options
d. It is based on your monthly disposable income and other factors like spouse’s income, assets,
Answer  Explanation 

ANSWER: It is based on your monthly disposable income and other factors like spouse’s income, assets,

The bank will assess repayment capacity while deciding the home loan eligibility. Repayment capacity is based on your monthly disposable / surplus income and other factors like spouse’s income, assets, liabilities, stability of income etc.

6)   What is the full form of APR?

a. Annual Priority Rates
b. Annual Percentage Rates
c. Amoritized Priority Rates
d. None of the above
Answer  Explanation 

ANSWER: Annual Percentage Rates

An annual percentage rate (APR) is the annual rate charged for borrowing through an investment. It is expressed as a percentage that represents the actual yearly cost of funds over the term of a loan.

7)   Which of the following best defines the Reverse Mortgage Loan Scheme?

a. A reverse mortgage is a loan for seniors age 62 and older.
b. These loans are secured over a residential property.
c. These loans typically do not require monthly mortgage payments.
d. All of the Above
Answer  Explanation 

ANSWER: All of the Above

The scheme of reverse mortgage has been introduced recently for the benefit of senior citizens owning a house but having inadequate income to meet their needs. Reverse Mortgage Loan provides an additional source of income for senior citizens of India, who have a self- acquired or self-occupied home in India.

8)   What is the repayment period for the Home loan for a NRI?

a. 30 Years
b. 40 Years
c. 60 Years
d. 65 Years
Answer  Explanation 

ANSWER: 30 Years

Repayment of the loan is required to be made by the borrower within a maximum period of 30 years subject to the stipulation that the loan should be liquidated by the age of 60 years or by the age of retirement, whichever occurs earlier.

9)   When was the Factoring Regulation Act passed in India?

a. 2011
b. 2000
c. 1991
d. 2001
Answer  Explanation 

ANSWER: 2011

The parliament of India has passed the Factoring Regulation Bill in 2011.Any company can commence Factoring by obtaining registration from the RBI as a non-banking finance company. Such registration shall be governed by the existing law applicable to NBFCs as well as the new Factoring Regulation Act, 2011.

10)   Factoring Business is also known as by which of the following names?

a. Accounts Receivable Factoring
b. Asset Based Lending
c. Invoice Factoring
d. All of the Above
Answer  Explanation 

ANSWER: All of the Above

Factoring is commonly referred to as accounts receivable factoring, invoice factoring, and sometimes accounts receivable financing. Accounts receivable financing is a term more accurately used to describe a form of asset based lending against accounts receivable.