What does the term 'haircut' mean in the context of banking and securities?

The correct answer is A: A reduction in the market value of collateral accepted by banks. A haircut is a percentage discount applied to the market value of collateral to account for potential market volatility and protect the lender. For example, if a security worth Rs. 100 has a 10% haircut, it's valued at Rs. 90.

What is the Standing Liquidity Facility (SLF) introduced by RBI?

The correct answer is A: A permanent lending facility for scheduled banks to borrow funds at specified rates. SLF is a standing facility introduced by RBI allowing scheduled banks to borrow funds against government securities, providing liquidity at a specified spread over the policy rate.

Under the Basel III framework, what is the maximum leverage ratio (Tier 1 capital to total assets) for Indian banks as mandated by RBI in 2024?

The correct answer is B: 3%. RBI mandates a minimum leverage ratio of 3% (Tier 1 capital divided by total assets) for banks to prevent excessive leverage under Basel III.

What is the full form of NPA in banking context?

The correct answer is A: Non-Performing Asset. NPA (Non-Performing Asset) refers to a loan or advance where interest and principal payments are overdue for 90 days or more.

Which ratio measures a bank's ability to meet its short-term obligations from liquid assets?

The correct answer is B: Liquidity Ratio. Liquidity Ratio measures short-term solvency and ability to meet immediate obligations using liquid assets.

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Bank PO / Clerk / RBI
General Awareness

PO, Clerk, RRB — Quantitative, Reasoning, GK

104 Q 3 Topics Take Mock Test

Difficulty: All Easy Medium Hard 101–104 of 104

Topics in Bank PO / Clerk / RBI

All General Awareness 200 Banking Awareness 18 Data Interpretation 100

Q.101 Medium General Awareness

What is the primary objective of Priority Sector Lending (PSL)?

A To increase bank's profit margins

B To provide credit to disadvantaged sectors of the economy

C To reduce RBI's regulatory burden

D To encourage foreign investments

Correct Answer: B. To provide credit to disadvantaged sectors of the economy

EXPLANATION

PSL mandates banks to lend a certain percentage of advances to priority sectors like agriculture, SMEs, and education for inclusive growth.

Test

Q.102 Medium General Awareness

Which of the following credit facilities is typically used for short-term working capital needs?

A Mortgage Loan

B Cash Credit

C Home Loan

D Auto Loan

Correct Answer: B. Cash Credit

EXPLANATION

Cash Credit is a short-term credit facility provided to businesses for meeting their working capital requirements on a revolving basis.

Test

Q.103 Medium General Awareness

What is the minimum Statutory Liquidity Ratio (SLR) as per RBI norms in 2024?

A 18%

B 19.5%

C 20%

D 21.5%

Correct Answer: B. 19.5%

EXPLANATION

The Statutory Liquidity Ratio is currently maintained at 19.5% of net demand and time liabilities, as per RBI guidelines.

Test

Q.104 Medium General Awareness

Which of the following is a measure of bank's profitability?

A Capital Adequacy Ratio

B Return on Assets (ROA)

C Statutory Liquidity Ratio

D Priority Sector Lending

Correct Answer: B. Return on Assets (ROA)

EXPLANATION

Return on Assets (ROA) measures how efficiently a bank uses its assets to generate profit. It's calculated as Net Income / Total Assets.

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Bank PO / Clerk / RBI General Awareness

Bank PO / Clerk / RBI
General Awareness