Financial Awareness

Financial Awareness is a section that is present in most of the banking competitive exams. This is a section that deals with the banking and finance sector. Anyone planning to take up employment in the banking sector must be aware of many of the terms policies and other such important information associated with financial awareness.

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Financial Awareness

One of the best ways to prepare for this section in the banking and competitive exams is to read the newspapers thoroughly. Reading the finance news section diligently will be to your advantage. Not only Indian financial news but reading about financial news pertaining to different countries in the world too is vital. Along with this, the financial awareness section can have many questions that cover a wide section of the Indian Banking and Finance sector. Therefore, it is advisable to follow very closely the latest developments.

Here is a small compilation of some of the important financial awareness questions asked in the banking competitive exams like the IBPS.

Questions on Financial Awareness

1. Holidays are provided in banks according to which act?

1. Banking regulation act
2. As per orders of govt.
3. Banking nationalization act.
4. RBI act

Ans. Option A – Banking Regulation Act

2. Which is the country outside India in which SBI has launched its first paperless banking?

1. Bhutan
2. Myanmar
3. Sri Lanka
4. Nepal

Ans. Option D – Nepal

3. Which among these is a mechanism of deficit financing in India?

1.   Borrowing from commercial banks.
2.   Issuing fresh currency notes.
3.  Borrowing from RBI.

1. i and ii
2. i and iii
3. ii and iii
4. none of the above

Ans. Option C – Issuing fresh currency notes and borrowing from RBI is a mechanism of deficit financing. It is a method to meet the government deficits by creating new money. A deficit occurs because of an excess of government expenditure over its receipts.

4. What does money laundering mean?

1. Converting money that is obtained illegally to make it appear that it originated from legitimate sources.
2. Hiding income source to avoid income tax.
3. Money acquired from undisclosed sources.
4. Money acquired from criminal sources.

Ans. Option A – Converting money that is obtained illegally to make it appear that it originated from legitimate sources.

5. Give the full forms of the following abbreviations – FRBM, GST, IMPS, IDR

Ans. FRBM – Fiscal Responsibility and Budget Management

GST – Goods And Service Tax

IMPS – Interbank Mobile Payment Service

IDR – Indian Depository Receipts

                                                                                                                 Source – Wikimedia Commons

6. Which of the following is a Non-Banking Financial Company in India?

1. Kotak Mahindra Bank
2. Punjab National Bank
3. PNB Housing Finance Limited
4. IDBI Bank

Ans. Option C – PNB Housing Finance Limited

Practice Questions

1. What is the duration of a savings account to be treated as a dormant account?

1. 2 years
2. 5 years
3. 1 year
4. 3 years

Ans. Option A – 2 years

2. What is the time period for Long-term finance funds?

1. Time exceeding 1 year
2. None of the these
3. Time exceeding 5 years
4. Timeless than 4 years but greater than 1 year

Ans. Option C – long-term industrial finance funds are the funds that are required for a period exceeding five years.

3. In India, when did the regional rural banks start functioning?

1. 1975
2. 1947
3. 1956
4. 1957

Ans. Option A – 1975

4. Which of the following institutions can issue paper notes in India?

1. Ministry of Finance
2. Union Government
3. Supreme Court
4. Reserve Bank Of India

Ans. Option D – Reserve Bank of India