In this topic, we will cover some important MCQs for Indian Banking System and Financial Institutions for UGC NET Commerce. For More MCQs, you can read on our android App.

Indian Banking System & Financial Institutions MCQs (UGC NET Commerce)

  1. The performance of which scheme does the National Housing Bank monitor?
  2. a) Liberalized Finance Scheme
  3. b) Golden Jubilee Rural Housing Finance Scheme
  4. c) Energy-Efficient Housing Finance Scheme
  5. d) Finance scheme for indirect loans

ANSWER: b) Golden Jubilee Rural Housing Finance Scheme

The National Housing Bank monitors the performance of the Golden Jubilee Rural Housing Finance Scheme implemented through the scheduled banks of HDFC and the Cooperative Sector Institutions. During 2009-10, 3.9 lakh dwelling units were successfully financed against a target of 3.5 lakh units.

2. When did the National Bank of Agriculture and Rural Development establish?

a) July, 1982

b) July, 1969

c) June, 1951

d) June, 1961

ANSWER: a) July, 1982



In the field of rural credit and agricultural development, establishment of NABARD is a major event. The National bank of Agriculture and Rural Development as an apex body with the responsibility for the overall development, policy, planning and financial support for agriculture and rural development was established on 12th July 1982.

When did the government acquire RBI’s shareholding (72.5%) in NABARD?

a) May, 2008

b) June, 2008

c) August, 2008

d) March, 2009

ANSWER: b) June, 2008

In June, 2008 the government acquired 72.5 percentage of RBI’s shareholding in NABARD.

4. The duration of fund raising from the commercial banks to the extent of RIDFs shortfall in agricultural lending is _________.

a) daily

b) weekly

c) monthly

d) yearly

ANSWER: d) yearly




RIDF was set up in NABARD in 1995-96 to boost public sector investment in agriculture and rural infrastructure. The fund is raised yearly from the commercial banks to the extent of their shortfall in agricultural lending. The corpus of RIDF I-XV amounted to Rs. 1,03,718 crore by March 31, 2010.

5. When did the Government of India set up the Export-Import Bank of India?

a) January, 1982

b) January, 1993

c) March, 1971

d) June, 1969

ANSWER: a) January, 1982

In January, 1982 recognising the importance of exports in India’s development programmes, the Government of India set up the Export-Import Bank of India as a statutory corporation owned completely by the Union Government.

6. The main objectives of the Export-Import Bank (EXIM Bank) are:

(i) To ensure an integrated and coordinated approach to solving the problems of exporters

(ii) To provide special attention to capital goods export and export of technical services

(iii) To tap domestic and overseas markets for resources, undertake development and finance activities in the areas of exports.

(iv) To provide financial assistance to the exporters and importers and act as the principal financial institution for coordinating the working of other institutions engaged in financing exports and imports.

(v) To provide refinance facilities to commercial banks and financial institutions against their export-import financing activities

(a) Both (i) and (ii)

(b) Only (iii), (iv), and (v)

(c) All the above

(d) None of the above

ANSWER: (c) All the above

The main objectives of the Export-Import Bank (EXIM Bank) are to ensure an integrated and coordinated approach to solving the problems of exporters, providing special attention to capital goods export and export of technical services, and to tap domestic and overseas markets for resources, undertaking development and financing activities in the areas of exports. The EXIM Bank provides financial assistance to the exporters and importers and acts as the principal financial institution for coordinating the working of other institutions engaged in financing exports and imports. It also provides

refinance facilities to commercial banks and financial institutions against their export-import financing activities.

7. Which bank had the highest concentrations of operations overseas in 2010?

a) Bank of Baroda

b) Bank of India

c) State Bank of India

d) Union Bank of India

ANSWER: a) Bank of Baroda

Bank of Baroda had the highest concentrations of operations with 46 branches, 8 subsidiaries, 3 representative offices and 1 joint venture bank, followed by State Bank of India with 42 branches, 5 subsidiaries, 4 joint ventures and 8 representative offices, and Bank of India with 24 branches, 3 subsidiaries, 1 joint venture bank and 5 representative offices.

8. When did the Government of India appoint a committee under the chairmanship of Shri M.Narasimham to strengthen the banking system?

a) May, 2006

b) April, 1998

c) December, 1997

d) September, 2005

ANSWER: c) December, 1997

In December 1997, the Government of India appointed a committee under the chairmanship of Shri M.Narasimham to strengthen the banking system which submitted its report in April 1998. The government accepted some of its recommendations, viz. prudential accounting norms, and classification of government-guaranteed advances.

9. The Reserve Bank of India was established on _______.

a) April 1, 1935

b) July 12, 1982

c) May 26, 2006

d) September 30, 2005

ANSWER: On April 1, 1935, the Reserve Bank of India, which is the central bank of this country, was established. It was originally started as a shareholders’ bank with a share capital of Rs. 5 crores divided into shares of Rs. 100 each, fully paid-up. But since January 1949 the Reserve Bank has been nationalized and it is now purely a concern of the State. The Government of India holds the entire share capital of the bank which has been acquired by payment of compensation to the shareholders.

10. Who works as RBI’s agent at places where it has no office of its own?

a) State Bank of India

b) Ministry of Finance

c) Government of India

d) International Monetary Fund

ANSWER: a) State Bank of India

The State Bank of India works as RBI’s agent at places where it has no office of its own.

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