in IBPS/SBI/RBI written or online exam, some banking awareness terms are asked. So, today we have given here study material on some important terms in banking awareness which are very important for IBPS PO, Clerk, RRB and SBI written exams & interview.
Some Important Banking Awareness Terms
RTGS and NEFT system: RTGS stands for REAL TIME GROSS SETTLEMENT. RTGS system is a funds transfer mechanism where transfer of money takes place one bank to another on a ‘real time’ and a ‘gross’ basis. The full form of NEFT is National Electronic Funds Transaction system. Check details aboutNEFT and RTGS system here.
Deflation: A fall in the generally level of prices. Deflation is the continuous decrease in pries of goods and services. Deflation occurs when the inflation rate becomes negative and stays there for a longer period.
Fiscal Deficit: A deficit in the government budget of a country and represents the excess of expenditure over income.
Recession: A true recession can only be confirmed if GDP growth is negative for a period two or more consecutive quarters,
Mutual Funds: Mutual Funds are investment companies that pool money from investors at large offer to sell and buy back its shares on a continues basis and use the capital thus raised in securities of different companies.
Bank rate: the interest rate charged by a central bank to commercial banks for very short term loans.
Repo rate: Repo is “Repurchase Agreement”. An agreement to sell a securities for a specified price and to buy it back later at another specified price.
CRR: Cash Reserves Ratio is the amount of funds that the bank has to keep with RBI.
Reverse Repo Rate: Reverse Repo Rate is the rate at which Reserve bank of India borrows from money from banks.
SLR: SLR (Statutory Liquidity Ratio) is the amount a commercial bank needs to be maintained in the form of cash or gold approved securities before providing credits to its customers.
In Banking Industry, NEFT and RTGS are mostly used transaction system through online mode (using internet) to transfer fund from one bank account to another account. It is the one of the most important topic in IBPS/SBI written exams and interview. We have given below details about NEFT and RTGS system used in banking industry.
What is NEFT System?
A system has been introduced by Reserve Bank of India which is named as ‘The Reserve Bank of India National Electronic Funds Transfer System’ which is referred to as NEFT system. In this system, there is no upper value limit for transactions. Amount of transaction inclusive of paisa component are made through NEFT system. This system provides a secure, efficient, reliable and economical system transferring of funds in banking sector. It reduces the workload as no need to use paper based fund transfer.
How does NEFT system work?
The remitting branch prepares a Structured Financial Messaging Solution (SFMS) message and then sends it to its service centre for NEFT. At the clearing centre, RBI sorts the bank-wise transactions and then prepares the accounting entries of net credit or debit for passing on to the banks.
What is RTGS System?
The full form of RTGS is Real Time Gross Settlement system. Like NEFT, it is also an electronic payment system. In RTGS, the payment instructions are processed on a continuous (Real Time) basis and settled on individual (Gross) basis. It does not net the debit against the credits. It also reduces the credit risk.
How does RTGS system work?
RTGS system lets the customers to transfer funds across the banks on a nearly instantaneous basis. Each participant bank is required to open a dedicated settlement account to put transactions through RTGS. Money can be transferred by both customers and banks on the same day in various cycles.
In IBPS, SBI, RBI recruitment exams, both in written and interview, some questions are asked from role, power, functions of SEBI. It is a very important topic for IBPS, SBI, RBI PO/Clerk/SO recruitment exams. So, we have given here detailed and brief information about SEBI. First we have to know what is SEBI?
The Securities and Exchange Board of India (SEBI) was enacted by the Government of India in terms of SEBI Act, 1992 on 4th April, 1992 to protect the interests of investors in securities and to protect and promote the development of the security market.
Role & Functions of Securities and Exchange Board of India (SEBI)
SEBI regulates the business in stock exchanges and security markets.
It registers and regulates the work of share transfer agents, stock-brokers, sub-brokers, bankers, trustees and all other intermediates who are associated with the security markets.
It has sole right to prohibit insider-trading in securities.
SEBI may take steps to undertake inspection of any book, register, record or other documents of any listed publics company which put its securities listed on any recognized stock exchange.
The board may suspend any office bearer of stock exchanges or sell-regulatory organizations.
For the protection of investors, the board may prohibit any company from issuing prospectus, offer documents or advertisement soliciting money from the public for the issue of securities without prejudice to the provisions of the companies Act, 1956.
If it is found that a person has violated or intends to violate any provision of this Act or rules and regulations, the board may pass an order to cease and desist from causing and committing such violation.
Like the code of civil procedure, 1908, SEBI has the same power to summon and enforce the attendance of a person and exam them on oath.
Need more short notes on banking awareness? You can get them from the following links-
Searching for RBI's main functions and role? Today we have written on role and function of Reserve Bank of India. This a very important banking awareness topic for upcoming IBPS PO/clerk/RRB, SBI and RBI recruitment exams.
Main Functions and Role of Reserve Bank of India (RBI)
1) Note Issuance
RBI has the sole authority of issuing currency notes and putting them into circulation. RBI issues Rs. 2, 5, 10, 50, 100, 500 and 1000 currency notes. RBI does not issue Rs. 1 notes (1 rupee notes) which are issued by Finance Ministry, Government of India, but are put into circulation by RBI.
2) Banker of Government
RBI acts as the banker to the Central and State Government. Banking services of deposits, withdrawn of funds, making payments and receipts, collections and transfer of funds of public debts to the Government are provided by RBI.
3) Bankers’ Bank
RBI acts as a bankers’ bank. It is necessary to keep stipulated reserves in cash to them by the all state cooperative and commercial banks. It also act as a ‘lender of the last resort’ for all banks.
4) Supervision of Banks
The banking supervision function of RBI has been separated from its traditional central banking functions from November, 1993. In 1994, The Board of Financial Supervision (BFS) had been set to oversee the Indian Financial System. RBI’s supervisory power is not only over commercial and state-cooperative banks but also for the All India Financial Institution (AIFIs) and Non-Banking Financial Companies (NBFCs).
5) Exchange Control
RBI maintains the stability of the external value of the national currency (INR). Previously, it regulated the foreign exchange market in the country in terms of the ACT which was named as Foreign Exchange Regulation Act (FERA), 1947. This FERA Act was amended and enlarged in 1973. The FERA, 1973 has been replaced by the Foreign Exchange Management Act (FEMA) in 1999.
6) Monetary Control
Bank Rate, Repo Rate, Reverse Repo Rate (RRR), Cash Reserve Ratio (CRR), Statutory Liquidity Ratio (SLR) are controlled by RBI. It issues credit and monetary policy annually.
7) Regulatory Restrictions on Lending
RBI regulates the restrictions on lending by the banks in terms of the Banking Regulation ACT (BRA), 1949. The details of restrictions are given below-
No banks can hold shares in a company.
Banks can not grant loan against the security of their own
shares or partly paid shares of a company.
Banks can not grant loan against CDs, FDs issued by other
banks, money-market mutual funds.
If relatives of other banks apply for loan, then such loan
can only be sanctioned by higher authorities or the Board of the bank as per
RBI’s guidelines. These ‘Relatives’ have been defined by RBI in their
guidelines.
RBI’s guidelines relating to the level of margin, credit,
interest rate etc. should be adhered by the banks.
Do you know the names of RBI's Governors? We have given here names of all Governors of Reserve Bank of India from the date of establishment of RBI (01.04.1935) to till date. It will useful for IBPS PO/Clerk/RRB banking awareness questions.
Name of Governors of RBI and their tenure of services
We have provided here model practice set of banking awareness for IBPS PO/clerk/RRB exams. From now we will publish more sample IBPS banking awareness question sets.
Q. What do you mean by 'Cash deposit ratio'?
(a) The percentage of cash-in-hand-balance with the Central Bank
to the aggregate deposits
(b) The percentage of total cash money received as deposits by banks
(c) All the above
(d) None of the above
Q. In which year Lead Bank Scheme was introduced?
(a) 1965
(b) 1969
(c) 1981
(d) 1992
Q. Whcih bank has the maximum number of foreign branches at present?
(a) SBI
(b) Canara Bank
(c) Bank of Baroda
(d) Bank of India
Q. The total number of export processing zones in India is-
(a) 5
(b) 6
(c) 7
(d) 8
Q. Financial Statement comprises of -
(a) Profit and Loss Account
(b) Balance sheet
(c) Funds-flow-statement
(d) All the above
Q. Which are the Legal Tenders?
(a) Drafts
(b) Cheques
(c) Currency notes
(d) Government drafts
Q. What is 'Non-negotiable' crossing?
(a) General crossing
(b) Special crossing
(c) Restricted crossing
(d) Non-transferable crossing
Q. A shareholder is defined under-
(a) The Banking Regulation Act, 1949
(b) The Companies Act, 1956
(c) The Securities Contract Regulation Act, 1956
(d) Indian Contract Act
Q. The interest-charts for different maturities and for different rates of interest is supplied by-
(a) IBA
(b) RBI
(c) Government of India
(d) IBRD
Q. Who determines the rate of interest on deposits?
(a) IBA
(b) Ministry of Finance
(c) RBI
(d) Government of India
We have given here most important information about 19 public sector banks in India like year of establishment, year of nationalization, head office, founder, old name, share capital, total capital of 19 nationalized banks of India. These may be asked in IBPS, SBI, RBI and other recruitment exams and you are required to have clear knowledge about each of the public sector banks (PSBs) of India. So, go through it.
Year of Establishment & Nationalization, Head Office, Capital, Founder of 19 Nationalized Banks of India
Here we are giving individual bank-wise detailed information.
Allahabad Bank
Year of Establishment: 1865
Nationalized on: 19th July, 1969
Head Office: Kolkata, West Bengal
Share Capital: 55.23 percent
Andhra Bank
Year of Establishment: 1923
Nationalized on: 15th April, 1980
Founder: P. Sitaramaiya
Head Office: Hyderabad, Andhra Pradesh
Share Capital: 62.50 percent
Capital: Rs. 48 Crores
Bank of Baroda
Year of Establishment: 1908
Nationalized on: 19th July, 1969
Founder: MaharajanSayajirao-III
Head Office: Baroda, Gujarat
Share Capital: 66.81 percent
Capital: Rs. 619 Crores
Bank of India
Year of Establishment: 1906
Nationalized on: 19th July, 1969
Founder: Businessmen of Bombay
Head Office: Mumbai, Maharashtra
Share Capital: 69.47 percent
Capital: Rs. 1554 Crores
Bank of Maharashtra
Year of Establishment: 1935
Nationalized on: 19th July, 1969
Head Office: Pune, Maharashtra
Share Capital: 76.77 percent
Capital: Rs. 280 Crores
Canara Bank
Old Name: Canara Bank Hindu Permanent Fund
Year of Establishment: 1906
Nationalized on: 19th July, 1969
Founder: A. Subbarao Pai
Head Office: Bangalore, Karnataka
Share Capital: 73.17 percent
Capital: Rs. 1125 Crores
Central Bank of India
Year of Establishment: 1911
Nationalized on: 19th July, 1969
Founder: Sorabjee Pocjkhanwala
Head Office: Mumbai, Maharashtra
Capital: RS. 814 Crores
Corporation Bank
Year of Establishment: 1906
Nationalized on: 15th April, 1980
Founder: Khan Bahadur Haji Abdullah Haji Kasim Sahib Bahadur
Head Office: Mangalore, Karnataka
Share Capital: 57.17 percent
Capital: Rs. 206.80 Crores
Dena Bank
Year of Establishment: 1938
Nationalized on: 19th July, 1969
Founder: Pran Lal Devkaran Nanji
Old Name: Devkaran Nanji Banking Company Ltd.
Head Office: Mumbai, Maharshtra
Share Capital: 51.10 percent
Capital: Rs. 591 Crores
Indian Bank
Year of Establishment: 1907
Nationalized on: 19th July, 1969
Founder: Annamalai and Ramaswami Chettiyar
Head Office: Chennai, Tamil Nadu
Capital: Rs. 418 Crores
Indian Overseas Bank
Year of Establishment: 1937
Nationalized on: 19th July, 1969
Founder: M. Chidambaram Chettiyar
Head Office: Chennai, Tamil Nadu
Share Capital: 75 percent
Capital: Rs. 319 Crores
Oriental Bank of Commerce
Year of Establishment: 1943
Nationalized on: 15th April, 1980
Founder: Ram Bahadur Lala Sohan Lal
Head Office: New Delhi
Share Capital: 66.50 percent
Capital: Rs. 327 Crores
Punjab and Sindh Bank
Year of Establishment: 1908
Nationalized on: 19th July, 1969
Founder: Bhai Vir Singh, Sir Sunder Singh Majitha and Sardar Tarlochan Singh
We use to publish short notes and objective question with answers of banking awareness on our website. Today we are going to provide some very important questions on banking industry i.e. The First, The Oldest, The Largest, The Biggest banks of India. Check all these questions which will be very important for IBPS, SBI, RBI PO/clerk recruitment exams.
1) Which was the first Indian commercial bank that was wholly owned and managed by Indian?
Ans: Central Bank of India
2) Which was the first Indian bank that was started solely with Indian capital?
Ans: Punjab National Bank (PNB)
3) Which was the first private sector bank in Kerala to become a scheduled bank in 1946 under the RBI Act?
Ans: South Indian Bank
4) Which is the India's oldest bank?
Ans: State Bank of India (SBI)
5) Name the largest Bank of India.
Ans: SBI
6) Which Bank has the maximum number of branches in India?
Ans: SBI
7) Which is the second largest Private Sector Bank of India?
Ans: The Federal Bank Limited
8) Which is the first bank to open a branch outside of India?
Ans: Bank of India, opened in London in 1946
9) Name the bank which was started as private shareholder bank.
Ans: The Imperial Bank of India
10) Which was the first Indian Bank to be given ISO Certificate?
Ans: Canara Bank
11. Which was the first Indian Bank to open a branch in continental Europe?
Do you know the tag lines of all public sector banks of India? If you don't know, then check this article. We have given here the names of all nationalized banks of India and some private and foreign banks and their tag lines. This will be very useful for IBPS PO/clerk/RRB, SBI, RBI etc. exams.
Tag Lines of Public Sector Banks (PSBs) of India
Allahabad Bank - 'A tradition of trust'
Andhra Bank - 'Much more to do with you in focus'
Bank of Baroda - 'India's international bank'
Bank of India - 'Relationship beyond Banking'
Bank of Maharashtra - 'One family, one bank'
Canara Bank - 'Its easy to change for those who you love together we can do'
Central Bank - 'Build a better life around us'
Dena Bank - 'Trusted family bank'
Indian Bank - 'Taking banking technology to the common man'
Indian Overseas Bank - 'Good people to grow with'
Oriental Bank of Commerce - 'Where every individual is committed'
Punjab National Bank - 'The name you can bank on'
Syndicate Bank - 'Your faithful & friendly financial partner'
State Bank of India (SBI) - 'With you all the way'
Union Bank of India - 'Good people to bank with'
UCO Bank - 'Honours your trust'
United Bank of India - 'The bank that begins with U'
Vijaya Bank - 'A friend you can bank on'
Tag lines of some Private Banks and Foreign Banks of India
Hello friends, as we promised to provide here some short notes on most important banking awareness questions which will be very useful for IBPS PO/clerk/RRB exams. Today we are going publish history, organizations and offices of Reserve Bank of India.
History & Organization of Reserve Bank of India
Reserve Bank of India (RBI) is the central Bank of India. There were several procedure and attempts had been taken in order to set up the central bank up to 1934. In 1921, the Imperial Bank of India was established to perform as central bank of India by the British Government. But unfortunately Imperial Bank failed to show its performance up to the mark and didn't achieve any success as the Central Bank. Then the Government asked the Hilton Young Commission in 1925 to view on this subject. The commission submitted their reports saying that one single organization can’t be able to act as two separate agencies (both credit and currency control). So, it’s required to set up a brand new central bank. In 1st April 1935, Reserve Bank of India was set up. In January, 1949, RBI was nationalized.
Headquarter and local offices of RBI
In Mumbai, the headquarter of RBI is located. Also the local offices of RBI are located in New Delhi, Kolkata, Chennai, Bangalore,Kanpur, Ahmedabad, Hyderabad, Patna and Nagpur. The offices of RBI are divided into four regions which are Eastern, Western, Sothern and Northern. One local boards or offices are located in each of regions. In each local board, there are five members who are appointed by the Central Government for 4-years. Among the members, one is elected as Chairman in each local board.
Organisation of Reserve Bank of India
As per the RBI Act, the organisation of RBI comprises with Central Board of Directors which is the leading governing body of RBI. The Central Board of Directors in RBI comprises of 20 members which are-
We published some model IBPS banking awareness questions few days ago. Today we are going to publish some more sample banking awareness questions for IBPS PO/clerk/RRB exams which will be very useful for upcoming IBPS banking recruitment exams. Check here for 30 model IBPS banking awareness questions.
1. The validation of Traveller's Cheques is-
(a) Three months
(b) Six months
(c) One year
(d) No limit-are valid till encashed
2. What is the minimum balance required to maintain a cheque book facility?
(a) Rs. 100
(b) Rs. 200
(c) Rs. 500
(d) Rs. 1000
3. What is documentation?
(a) Proper execution of documents
(b) Stamping of document
(c) Cancellation of stamps
(d) None of the above
4. Which of the following is the Central Bank of India?
(a) The Reserve Bank of India
(b) The State Bank of India
(c) The Andhra Bank
(d) Bank of India
5. State Bank of India was established in-
(a) 1935
(b) 1969
(c) 1955
(d) 1946
6. What is the number of Public Sector Banks in India at present?
8. In which country SBI has the maximum numbers of foreign offices?
(a) U.S.A.
(b) U.K.
(c) Germany
(d) Japan
9. In which current the payment of interest is effected in the case of FCNR accounts?
(a) Indian Rupee
(b) Only in Pound
(c) Same currency in which deposit stands
(d) Yen
10. What is Balance Sheet?
(a) Statement of assets and liabilities on a particular date
(b) Statement of profit and loss on a particular date
(c) Position of cash balance
(d) Statement of assets and liabilities for a particular year
11. How is the interest on the savings bank accounts compounded?
Looking for some model banking awareness questions for IBPS exams? In IBPS PO/Clerk/RRB exams, there is one section named as 'General Awareness with special reference to Banking Industry'. Many candidates can not qualify in the written or online exams due to the lack of knowledge in banking awareness. This part is very important. You can't ignore this section because in banking recruitment exam like IBPS, SBI, RBI etc. there is sectional cutoff marks. So we have given here 25 most important model banking awareness questions for upcoming IBPS PO/Clerk/RRB online exams.
1. What will happen when rate of investment is high? It -
(a) Reduces the amount of credit creation
(b) Creates better chances for the credit creation
(c) Not affect the amount of credit in any way
(d) Leads to any of the above-mentioned occurrences
2. Which of the following is the largest nationalized bank of India?
(a) Central Bank of India
(b) State Bank of India
(c) Bank of India
(d) Reserve Bank of India
3. Subsidy is granted by-
(a) Government of India
(b) State Government
(c) RBI
(d) SBI
4. Who decides discount rate on certificate of deposits?
(a) RBI
(b) IBA
(c) SBI
(d) None of these
5. What do you mean by Debt Equity Ratio?
(a) Ratio of long-term borrowing to tangible net worth
(b) Ratio of current assets to own tangible net worth
(c) Ratio of fixed assets to tangible net worth
(d) None of the above
6. What are the intangible assets?
(a) Preliminary expenses
(b) Patents, copyright, goodwill
(c) Losses which cannot be reduced from share capital
(d) All the above
7. What do you mean by Current Ratio?
(a) Ratio of total assets to total liabilities
(b) Earning capacity of unit
(c) Ratio of current assets to current liabilities
(d) None of the above
8. In banking industry, each month's 15th day is known as-
(a) Customer’s Day
(b) Complaints Day
(c) Holiday
(d) None of the above
9. Who fixed Service charges on Foreign Letter of Credit?
(a) IBA
(b) FEDAI
(c) RBI
(d) IBRD
10. When was the Deposit Insurance Credit Guarantee Scheme formed?
(a) July 1, 1975
(b) January 1, 1952
(c) January 1, 1962
(d) January 1, 1991
11. Any check of bankers is valid for (from the date of issuing)-
