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Money and Banking — GK Questions with Answers

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26 questions
  1. Money that nobody is allowed to refuse is called
    1. Token money
    2. Fiat money
    3. Legal tender
    4. Metal money
    Show answer

    Answer: (C) Legal tender

    Legal tender is that form of fiat money which must be accepted by law.

  2. Into which category does cryptocurrency fall
    1. Legal tender
    2. Fiat money
    3. Token money
    4. Metal money
    Show answer

    Answer: (C) Token money

    It has no worth of its own, so it is token money; but no competent authority issued it, so it is neither fiat nor legal tender.

  3. Who issues the ₹1 note
    1. The Reserve Bank of India
    2. The Ministry of Finance
    3. The State Bank of India
    4. NITI Aayog
    Show answer

    Answer: (B) The Ministry of Finance

    The ₹1 note and all coins come from the Ministry of Finance and carry the signature of the Finance Secretary.

  4. Which of these is not a note-printing location
    1. Nashik
    2. Dewas
    3. Salboni
    4. Noida
    Show answer

    Answer: (D) Noida

    Noida is a minting centre for coins; notes are printed at Nashik, Dewas, Salboni and Mysore.

  5. How many times has India demonetised so far
    1. Twice
    2. Three times
    3. Four times
    4. Once
    Show answer

    Answer: (B) Three times

    In 1946, 1978 and November 2016. Withdrawing the ₹2000 note in 2023 was not demonetisation.

  6. When was the retail e-rupee launched
    1. 1 November 2022
    2. 1 December 2022
    3. 1 April 2023
    4. 1 January 2022
    Show answer

    Answer: (B) 1 December 2022

    The wholesale form came on 1 November 2022 and the retail form on 1 December 2022.

  7. Which aggregate does the RBI use to measure liquidity in the market
    1. M1
    2. M2
    3. M3
    4. M0
    Show answer

    Answer: (D) M0

    M0 is also called the monetary base, high-powered money and reserve money.

  8. Which is taken as the aggregate supply of money
    1. M0
    2. M1
    3. M3
    4. M4
    Show answer

    Answer: (C) M3

    M3 is broad money and it is taken as the aggregate supply of money.

  9. How do the money multiplier and CRR relate
    1. Positively
    2. Negatively
    3. Not at all
    4. Positively first, then negatively
    Show answer

    Answer: (B) Negatively

    A higher CRR leaves banks less to lend, so the multiplier falls.

  10. On whose recommendation were the new money aggregates adopted
    1. The Narasimham committee
    2. The Y V Reddy committee
    3. The Usha Thorat committee
    4. The Bimal Jalan committee
    Show answer

    Answer: (B) The Y V Reddy committee

    The NM and L series were adopted in 1998 on the recommendation of the Y V Reddy committee.

  1. Which was the first bank in India
    1. Oudh Commercial Bank
    2. Punjab National Bank
    3. Bank of Hindustan
    4. Bank of Bengal
    Show answer

    Answer: (C) Bank of Hindustan

    Bank of Hindustan was set up in 1770; the first bank run by Indians was Oudh Commercial in 1881.

  2. Which was the first swadeshi bank run by Indians
    1. Oudh Commercial Bank
    2. Punjab National Bank
    3. Allahabad Bank
    4. Bank of Baroda
    Show answer

    Answer: (B) Punjab National Bank

    Punjab National Bank was set up in 1894.

  3. The Imperial Bank of India was formed by merging which banks
    1. The three Presidency banks
    2. The eight princely-state banks
    3. The fourteen nationalised banks
    4. Two cooperative banks
    Show answer

    Answer: (A) The three Presidency banks

    In 1921 the Bank of Bengal, Bank of Bombay and Bank of Madras were merged into the Imperial Bank.

  4. In which year was SBBJ formed
    1. 1955
    2. 1959
    3. 1963
    4. 1969
    Show answer

    Answer: (C) 1963

    State Bank of Bikaner and State Bank of Jaipur joined in 1963 to make SBBJ, which merged into the SBI in 2017.

  5. How many banks were covered by the nationalisation of 1980
    1. 6
    2. 14
    3. 12
    4. 20
    Show answer

    Answer: (A) 6

    In 1980, 6 banks with deposits above ₹200 crore were nationalised; in 1969 it had been 14 banks.

  6. In which schedule are scheduled banks listed
    1. The First Schedule of the RBI Act, 1934
    2. The Second Schedule of the RBI Act, 1934
    3. The First Schedule of the Banking Regulation Act, 1949
    4. The Seventh Schedule of the Constitution
    Show answer

    Answer: (B) The Second Schedule of the RBI Act, 1934

    Only a bank named in the Second Schedule is called a scheduled bank.

  7. What minimum capital is fixed for a new private bank
    1. ₹100 crore
    2. ₹200 crore
    3. ₹500 crore
    4. ₹1000 crore
    Show answer

    Answer: (D) ₹1000 crore

    Besides this, ten years of banking experience and 25% of branches in unbanked areas are required.

  8. What share does a state government hold in a Regional Rural Bank
    1. 50 per cent
    2. 35 per cent
    3. 15 per cent
    4. 25 per cent
    Show answer

    Answer: (C) 15 per cent

    The central government holds 50%, a commercial bank 35% and the state government 15%.

  9. In which two states was no Regional Rural Bank opened
    1. Sikkim and Goa
    2. Mizoram and Nagaland
    3. Goa and Tripura
    4. Sikkim and Manipur
    Show answer

    Answer: (A) Sikkim and Goa

    Neither Sikkim nor Goa has an RRB.

  10. What is the maximum deposit a payments bank may accept
    1. ₹1 lakh
    2. ₹2 lakh
    3. ₹5 lakh
    4. No limit
    Show answer

    Answer: (B) ₹2 lakh

    A payments bank may take only demand deposits, up to ₹2 lakh, and may give no loans at all.

  1. On whose recommendation did small finance banks begin
    1. The Nachiket Mor committee
    2. The Usha Thorat committee
    3. The Bimal Jalan committee
    4. The Sivaraman committee
    Show answer

    Answer: (B) The Usha Thorat committee

    Small finance banks came from the Usha Thorat committee and payments banks from the Nachiket Mor committee, both in 2015.

  2. Who gives short-term cooperative credit at the village level
    1. Apex Bank
    2. DCCB
    3. PACS
    4. PLDB
    Show answer

    Answer: (C) PACS

    The Primary Agricultural Credit Society works at village level; DCCB at district level and Apex Bank at state level.

  3. Which is India's first development finance institution
    1. ICICI
    2. IDBI
    3. IFCI
    4. SIDBI
    Show answer

    Answer: (C) IFCI

    IFCI was set up in 1948; ICICI became the second DFI in 1955.

  4. On whose recommendation was NABARD set up
    1. The Narasimham committee
    2. The Sivaraman committee
    3. The Urjit Patel committee
    4. The Rangarajan committee
    Show answer

    Answer: (B) The Sivaraman committee

    NABARD was set up in 1982 on the recommendation of the Sivaraman committee; its headquarters are in Mumbai.

  5. Up to what amount does the DICGC insure bank deposits
    1. ₹1 lakh
    2. ₹2 lakh
    3. ₹5 lakh
    4. ₹10 lakh
    Show answer

    Answer: (C) ₹5 lakh

    The DICGC was set up in 1978 and is wholly owned by the RBI.

  6. Which parameter carries the greatest weight in the Financial Inclusion Index
    1. Access
    2. Usage
    3. Quality
    4. All three equally
    Show answer

    Answer: (B) Usage

    Usage 45%, access 35% and quality 20%; the index has no base year.

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