Banking Awareness Test for IBPS, RBI, SBI, NABARD & other Bank Examinations - Set 3

1)   Which of the following company started the first Factoring business service in India?

a. SBI Factors and Commercials Limited
b. IFCI Factors Limited
c. Siemens Factoring Private Limited
d. Canbank Factors Limited
Answer  Explanation 

ANSWER: SBI Factors and Commercials Limited

Explanation:
SBI Factors and Commercials Limited was the first factoring company to start its operation in India in April, 1991. Since then a number of companies have started factoring business in India.


2)   How many NBFC factors are there in India registered at present?

a. 31
b. 6
c. 7
d. 9
Answer  Explanation 

ANSWER: 7

Explanation:
SBI Factors and Commercials Limited was the first factoring company to start its operation in India in April, 1991. Since then a number of companies have started factoring business in India. At present, there are only 7 NBFC factors registered with RBI.


3)   Which of the following acts regulates the underwriting process in India?

a. RBI Act 1934
b. Securities and Exchanges Board of India (Underwriters) Regulations, 1993.
c. Securities and Exchange Board of India (Underwriters) (Amendment) Regulations, 2006
d. Both b and c
Answer  Explanation 

ANSWER: Both b and c

Explanation:
The underwriter must get a certificate of registration under the Securities and Exchanges Board of India (Underwriters) Regulations, 1993.These regulations have been further amended by the Securities and Exchange Board of India (Underwriters) (Amendment) Regulations, 2006.


4)   The Certificate of Initial Registration for an underwriter with SEBI remains valid for how many years?

a. 3
b. 4
c. 5
d. 7
Answer  Explanation 

ANSWER: 5

Explanation:
The Certificate of Initial Registration remains valid for five years. The Merchant Banker has to apply for grant of Certificate of Permanent Registration to SEBI, three months before the expiry of the validity of the Certificate of Initial Registration.


5)   What is the full form of FLC?

a. Financial Leasing Company
b. Finance Lending Company
c. Financial Leasing Company of India Limited
d. None of the Above
Answer  Explanation 

ANSWER: Financial Leasing Company of India Limited

Explanation:
First Leasing Company of India Limited (FLC) was set up in 1973. Lease financing has increased with a compound rate of 24% over the period.


6)   When was the RBI Act enacted?

a. 1st April 1935
b. 28th November 1934
c. 6th March 1934
d. 31st March 1935
Answer  Explanation 

ANSWER: 6th March 1934

Explanation:
Reserve Bank of India Act, 1934 was enacted on 6 March, 1934 to constitute the Reserve Bank of India and commended from April 1, 1935. It provides for laws for the supervision of banking firms in India and other related matters.


7)   What should be the paid up capital of the bank to be a Scheduled Commercial Bank as per the RBI Act 1934?

a. Rs 10 lakhs
b. Rs 1 crore
c. Rs 5 lakhs
d. Rs 5 crore
Answer  Explanation 

ANSWER: Rs 5 lakhs

Explanation:
The RBI Act contains the definition of the so-called scheduled banks, as they are mentioned in the 2nd Schedule of the Act. These are banks which were to have paid up capital and reserves above 5 lakh.


8)   When did the Banking Regulation Act, 1949 become applicable to the state of Jammu & Kashmir?

a. 1949
b. 1970
c. 1956
d. 1966
Answer  Explanation 

ANSWER: 1956

Explanation:
Initially, this act was passed as Banking Companies Act, 1949 and it was applicable to whole of India except Jammu & Kashmir. It became applicable to Jammu and Kashmir from 1956.


9)   What is the current FDI limit in private sector banks without government approval?

a. 34%
b. 25%
c. 49%
d. 74%
Answer  Explanation 

ANSWER: 49%

Explanation:
At present, FDI of up to 49 percent is allowed in private banks without the permission of the government, and upto 74 percent can be invested with the government’s approval.


10)   What is the minimum start up capital fixed for Local Area Capital Banks?

a. Rs 1 crore
b. Rs 2 crore
c. Rs 5 crore
d. Rs 10 crore
Answer  Explanation 

ANSWER: Rs 5 crore

Explanation:
The minimum start-up capital of a LAB was fixed at Rs.5 crore and the promoters were asked to bring entire minimum share capital up-front.