If a bank's Cost of Funds increased by 75 basis points while the Yield on Assets increased by 50 basis points, what is the likely impact on Net Interest Margin (NIM)?

The correct answer is B: NIM will decrease by 25 basis points. NIM = Yield on Assets - Cost of Funds. If Cost of Funds increases by 75 bps and Yield increases by only 50 bps, NIM decreases by 25 bps (50 - 75 = -25).

Under Basel III norms, what is the minimum Capital to Risk-Weighted Assets Ratio (CRAR) for banks?

The correct answer is C: 10.5%. Basel III requires banks to maintain a minimum CRAR of 10.5% (including capital conservation buffer).

A bank's Non-Performing Asset (NPA) ratio is 2.8%. Which of the following asset classification would NOT be included in this calculation?

The correct answer is D: Standard Assets. NPA includes substandard, doubtful, and loss assets. Standard assets (performing assets) are excluded from NPA calculations as per RBI's asset classification guidelines.

What is the primary function of the Financial Stability and Development Council (FSDC)?

The correct answer is B: To coordinate among financial sector regulators. FSDC coordinates among RBI, SEBI, IRDAI, and other regulators for financial stability.

Under Basel III norms applicable to Indian banks, what is the minimum Common Equity Tier 1 (CET1) capital ratio requirement?

The correct answer is A: 4.5%. Basel III mandates a minimum CET1 ratio of 4.5% for all banks operating in India as per RBI guidelines

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Bank PO / Clerk / RBI
Banking Awareness

PO, Clerk, RRB — Quantitative, Reasoning, GK

6 Q 3 Topics Take Mock Test

Difficulty: All Easy Medium Hard 1–6 of 6

Topics in Bank PO / Clerk / RBI

All General Awareness 200 Banking Awareness 18 Data Interpretation 100

Q.1 Hard Banking Awareness

Which of the following IS a characteristic of a Scheduled Bank as per RBI definitions?

A Operations limited to urban areas only

B Minimum paid-up capital and reserves of Rs. 5 lakh

C Maximum loan limit of Rs. 100 crore

D Can only accept deposits from government

Correct Answer: B. Minimum paid-up capital and reserves of Rs. 5 lakh

EXPLANATION

A Scheduled Bank must have minimum paid-up capital and reserves of Rs. 5 lakh as per RBI definitions.

Test

Q.2 Hard Banking Awareness

What is the implementation timeline for the Indian Banks' Association (IBA) model on stress testing for credit risk?

A Quarterly basis

B Semi-annually

C Annually

D Bi-annually with quarterly reviews

Correct Answer: A. Quarterly basis

EXPLANATION

Banks conduct stress tests on a quarterly basis as per RBI guidelines and IBA framework.

Test

Q.3 Hard Banking Awareness

Under Unified Payments Interface (UPI) 2.0, what is the new feature introduced for offline transactions?

A Cross-border payments

B Offline transaction capability up to Rs. 200

C Real-time gross settlement

D Cryptocurrency integration

Correct Answer: B. Offline transaction capability up to Rs. 200

EXPLANATION

UPI 2.0 introduced offline transaction capability allowing payments without internet connectivity.

Test

Q.4 Hard Banking Awareness

Which of the following factors is NOT considered while calculating the Credit Risk Weight of an asset under Basel III?

A Nature of borrower

B Maturity of loan

C Collateral held

D Branch location of bank

Correct Answer: D. Branch location of bank

EXPLANATION

Branch location is not a factor in risk weighting. Nature of borrower, maturity, and collateral are key factors.

Test

Q.5 Hard Banking Awareness

What is the statutory Liquidity Ratio (SLR) requirement for banks as per RBI guidelines (2024)?

A 19%

B 20%

C 21%

D 22%

Correct Answer: B. 20%

EXPLANATION

RBI maintains the SLR requirement at 18% with recent adjustments around 20% for specific instruments.

Test

Q.6 Hard Banking Awareness

Under the Priority Sector Lending norms, what percentage of advances must be directed to agriculture by commercial banks?

A 15%

B 18%

C 20%

D 25%

Correct Answer: B. 18%

EXPLANATION

RBI mandates that commercial banks allocate at least 18% of total advances to agriculture.

Test

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Bank PO / Clerk / RBI Banking Awareness

Bank PO / Clerk / RBI
Banking Awareness