Additional Materials – Banking & Financial Institutions

Additional Materials 

Topic wise Question Paper Bifurcation of New Syllabus Effective from 2019 June

UGC NET JRF Commerce Banking & Financial Institution Questions 

2019 June

1. Match List – I and List – II
   List – I
   (a) Inter-bank call market
   (b) Commercial bills
   (c) Commercial papers
   (d) Treasury bills
   List – II
   (i) Money Market
   (ii) Promissory note
   (iii) Short-term maturity
   (iv) Government papers
   Choose the correct option from those given below :
   (1) (a)-(i), (b)- (ii), (c)-(iv), (d)-(iii)
   (2) (a)-(iii), (b)- (i), (c)-(ii), (d)-(iv)
   (3) (a)-(i), (b)- (iii), (c)-(iv), (d)-(ii)
   (4) (a)-(iv), (b)- (iii), (c)-(ii), (d)-(i)
2. Which among the following is NOT true about BASEL ?
   1. Initially it was named as Committee of Banking Regulations and Supervisory Practices (CBRS)
   2. BASEL was established by the Central Bank Governors of fifteen countries.
   3. It was established by the end of 1974
   4. Disturbances in international currency and banking markets were responsible for its establishment
3. Which one of the following is used for international money transfer ?
   1. RTGS
   2. NEFT
   3. SWIFT
   4. DD
4. Which among the following is NOT a correct statement ?
   1. Hedge funds are not mutual funds.
   2. Hedge funds can be sold to public.
   3. Investors in mutual funds must pay various fees and expenses.
   4. Mutual funds provide economies of scale to investment decisions.
5. Assertion (A) : Reserve Bank of India is an important regulatory and administrative authority to execute FEMA provisions.
   Reason (R) : Being monetary authority and custodian of foreign exchange, Reserve bank of India enjoys requisite expertise of FEMA administration.
   In the context of the above two statements, which one of the following codes is correct?
   1. Both (A) and (R) are correct and (R) is the right explanation of (A)
   2. Both (A) and (R) are correct but (R) is not the right explanation of (A)
   3. Both (A) and (R) are incorrect
   4. (A) is correct and (R) is not correct
6. New reform in Indian banking system include
   (a) Digitisation of bank operations
   (b) Banking consolidation
   (c) Borrowing from Government
   (d) Agency work
   Choose the correct option from the following :
   1. (a) and (b)
   2. (c) and (d)
   3. (b), (d) and (c)
   4. (a), (c) and (d)
7. Which of the following are included in digital payment system ?
   (a) RTGS
   (b) Demand draft
   (c) NEFT
   (d) Cheque
   Choose the correct option from the following :
   1. (a), (c) and (d)
   2. (b) and (d) only
   3. (a) and (c) only
   4. (b), (c) and (d)
8. SIDBI was set up as a subsidiary of IDBI to
   1. takeover the functions of small business financing of IDBI
   2. takeover the venture capital operation of IDBI
   3. reconstruct and rehabilitate the sick and closed industrial units financed by IDBI
   4. facilitate, finance and promote India’s foreign trade
9. Chalapathi Rao Committee was constituted for restructuring of
   1. State Financial Corporation in India
   2. Commercial Banks in India
   3. Co-operative Banks in India
   4. Regional Rural Banks in India
10. Credit worthiness score in India ranges between
    1. 300 to 600
    2. 300 to 900
    3. 500 to 1000
    4. 900 to 1600

Answer Key

1(2) (a)-(iii), (b)- (i), (c)-(ii), (d)-(iv) ; 2 (2) BASEL was established by the Central Bank Governors of fifteen countries.; 3 (3) SWIFT ; 4 (2) Hedge funds can be sold to public. ; 5 (1) Both (A) and (R) are correct and (R) is the right explanation of (A) ; 6 (1) (a) and (b) ; 7 (3) (a) and (c) only ; 8 (1) takeover the functions of small business financing of IDBI 9 (4) Regional Rural Banks in India 10 (2) 300 to 900

2019 December

1. Which among the following is NOT a correct statement?
   1. The Reserve Bank of India worked as Central Bank of Burma till April 1947
   2. The Reserve Bank of India worked as Central Bank of Pakistan till June 1948
   3. The Reserve Bank of India worked as Central Bank of Bangladesh from January 1972 to December 1975.
   4. The Reserve Bank of India commenced its operations  on April 1, 1935.
2. National Housing Bank was established in 1987 as wholly owned subsidiary of which of the following?
   1. State Bank of India
   2. Life Insurance Corporation of India
   3. Reserve Bank of India
   4. Industrial Finance Corporation of India
3. Match the following Banking Sector reform committees with their respective purposes:
   Committee
   a) Y. V. Reddy Committee
   b) Rashid Jilani Committee
   c) S. M. Kelkar Committee
   d) I. T. Vaz Committee
   Purpose
   i) Revised method of lending in place of cash credit system
   ii) Rationalization of interest rate on small savings
   iii) Working capital lending norms
   iv) Regional rural banks
   Choose the correct option from those given below:
   1. a) – i); b) – ii); c) – iii); d) – iv)
   2. a) – ii); b) – i); c) – iv); d) – iii)
   3. a) – iv); b) – iii); c) – ii); d) – i)
   4. a) – ii); b) – iii); c) – iv); d) – i)
4. Choose incorrect statement from the following:
   1. 28 Days T-bills were introduced in 1998
   2. 364 Days T-bills were introduced in 1992
   3. 182 Days T-bills were introduced in 1986
   4. 273 Days T-bills were introduced in 2006
5. 14 Days intermediate T-bills were brought into effect from 1996-97 after the abolition of which of the following?
   1. 91 Days T-bills
   2. 182 Days T-bills
   3. 273 Days T-bills
   4. 364 Days T-bills
6. Non-Banking Financial Companies can be classified as:
   a) Asset Finance Company (AFC)
   b) Investment Company (IC)
   c) Loan Company (LC)
   d) Foreign Trade Company (FTC)
   Choose the correct options given below:
   1. a), b) and c) only
   2. b), c) and d) only
   3. a), c) and d) only
   4. a), b) and d) only
7. Arrange the following financial institutions in ascending order of their year of establishment:
   a) National Housing Bank
   b) Export-Import Bank of India
   c) NABARD
   d) Unit Trust of India
   Choose the correct option from those below:
   1. b) → d) → c) → a)
   2. d) → b) → a) → c)
   3. d) → b) → c) → a)
   4. d) → c) → b) → a)
8. Which three of the following types of cyber-attacks may occur in the process of mobile banking?
   a) Bedrock attack
   b) Front door attack
   c) Denial of service attack
   d) Direct access attack
   Choose the correct option from those given below:
   1. a), b) and c)
   2. b), c) and d)
   3. a), b) and d)
   4. a), c) and d)

Comprehension:

Read the passage carefully and answer the questions that follow:

Life insurance in its modern form came to India from England in the year 1818. The Oriental Life Insurance Company started by Europeans in Calcutta was the first insurance company on Indian soil. All the insurance companies established during that period were brought up with the purpose of looking after the needs of the European community and Indian natives were not being insured by these companies. However, later with the efforts of eminent people like Babu Muttylal Seal, foreign insurance companies started insuring Indian lives too. But Indian lives were being treated as sub standard lives and heavy extra premium were being charged upon them. The Bombay Mutual Life Assurance Society heralded the birth of the first Indian life insurance company in the year 1870 and covered Indian lives at normal rates. Starting as an Indian enterprise with highly patriotic motives, insurance companies came into existence to carry the message of insurance and social security through insurance to various sectors of society. In 1907, the Hindustan Cooperative Insurance Company took birth in one of the rooms of ‘The Jorsanko’, house of the great poet Rabindranath Tagore in Calcutta. The Indian Mercantile, General Assurance and Swadeshi Life (later Bombay Life) were some of the companies established during the same period. Prior to 1912, India had no legislation to regulate the insurance business. In the year 1912, Life Insurance Companies Act and Provident Fund Act were passed. The Life Insurance Companies Act, 1912 made it necessary that the premium rate tables and periodical valuations of companies should be certified by an actuary. But the Act discriminated between foreign and Indian Companies on many accounts, putting Indian Companies at a disadvantage.

1. Identify the correct statement from the following:
   1. Initially, insurance companies used to discriminate Indian and European clients
   2. There was no discrimination in Indian and European clients by the insurance companies initially
   3. Indian clients were charged lower premium by the insurance companies in the beginning
   4. Indian insurance companies charged higher premium to Europeans at a later stage
2. Which one among the following grew along with insurance business in India?
   1. Pension Fund
   2. Provident Fund
   3. Gratuity
   4. Arbitrage
3. The insurance business in India was started first by which one of the following?
   1. Americans
   2. Indian merchants
   3. Europeans
   4. Afro-Indians
4. The paragraph is about which of the following?
   1. Genesis of insurance in India?
   2. Struggle of insurance business
   3. Conflict of insurance business
   4. Complications of insurance business
5. Which among the following was later renamed as Bombay Life?
   1. The Indian Mercantile General Assurance
   2. The Oriental Life Insurance Company
   3. National Insurance
   4. Swadeshi Life

2020 October First Shift

1. Which among the followings are correct statements with regard to NBFC in India?
   (A) All NBFCs should be registered with RBI
   (B) NBFC cannot accept demand deposits
   (C) NBFCs do not form part of the payment and settlement system and cannot issue cheques drawn on itself.
   (D) Deposit insurance facility of Deposit Insurance and credit Guarantee Corporation is not available to depositors of NBFCs
   Choose the correct options given below:
   (a) (A), (B) and (C) only
   (b) (A), (B), (C) and (D) only
   (c) (A), (B) and (D) only
   (d) (A), (D) only
2. Given below are two statements.
   Statement (I): Monetary policy causes a deliberate change in government revenue and expenditure with a view to influencing the price level and the quantum of national output.
   Statement (II): Fiscal policy regulates the money supply and the cost and availability of credit.
   In the light of the above statements.choose the most appropriate answer from the options given below:
   (a) Both Statement (I) and Statement (II) are correct
   (b) Both Statement (I) and Statement (II) are incorrect
   (c) Statement (I) is correct but Statement (II) is incorrect
   (d) Statement (I) is incorrect but Statement (II) is correct
3. Arrange the following initiatives taken by the government of India to tackle the non performing assets in their ascending order of chronology:
   (A) Corporate Debt Restructuring
   (B) Compromise Settlement
   (C) The Debt Recovery Tribunals (DRTs)
   (D) Credit Information Bureau
   (E) SARFAESI Act
   Choose the correct answer from the options given below:
   (a) (C),(D),(A),(B),(E)
   (b) (A),(B),(E),(C),(D)
   (c) (C),(D),(B),(E),(A)
   (d) (D),(C),(B),(E),(A)
4. Which of the following financial institution(s)got merged with their subsidiary?
   (A) UTI
   (B) IFCI
   (C) ICICI
   (D) IDBI
   (E) Global Trust Bank
   Choose the correct answer from the options given below:
   (a) (A),(B) only
   (b) (B),(C) only
   (c) (C),(D) only
   (d) (C),(E) only
5. What is the “Repo Rate”?
   (a) Is the rate at which RBI lends to State Government
   (b) Is the rate at which International aid agencies lends to RBI
   (c) Is the rate at which the RBI lends to Bank in case of short maturity
   (d) Is the rate at which RBI borrows funds from the Commercial Banks in the country
6. Objective of IMPS (Immediate payment service)are:
   (A) To enable bank customers to use mobile instruments as a channel for accessing their banks accounts and remit funds 24 into 7.
   (B) Making payments simpler just with the mobile number of the beneficiary.
   (C) To build the foundation for a full range of mobile based banking services
   (D) To create competition with NEFT and RTGS
   Choose the most appropriate answer from the options given below:
   (a) (A),(B),(C) only
   (b) (B),(C),(D) only
   (c) (A),(B),(D) only
   (d) (B),(D) only

Answer Key

1 (b) ; 2 (b) ; 3 (a) ; 4 (c) ; 5 (c) ; 6 (a)

2020 October Second Shift

1. Match the item of List I with the item of List II and suggest the correct code

   List 1	List 2
   A. Relationship	i. Dealing in hundis and acceptance of deposits
   B. Merchant banking	ii. Widening the enterpreurial base and assist in a rapid rate of industrial growth
   C. Indigenous banking	iii. Engaged in the business of capital issue management
   D. Development banking	iv. Creating maintaining and enhancing strong relationship with customers

   1. A-iv, B-ii, ​​Ci, D-iii
   2. A-ii, B-iii, Ci, D-iv
   3. A-iv, B-iii, Ci, D-ii
   4. A-ii , Bi, C-iv, D-iii

2. “Skimming” in e-banking refers to
   1. Identifying fraudsters copying vital information from credit cards
   2. Multiple transactions by one credit card
   3. Conversion of a debit card into credit card
   4. Excessive charge for online service
3.  Reserve Repo rate is a tool used by the Reserve Bank of India primarily to______
   1. Inject liquidity
   2. Absorb liquidity
   3. Protect bank credit
   4. Build reserve
4. In order to calculate capital adequacy ratio, the banks are required to take into consideration, which of the following risks?
   A. Credit risk
   B. Market risk
   C. Operational risk
   Choose the most appropriate answer from the options given below
   1. A and C only
   2. A and B only
   3. B and C only
   4. A,B and C only
5.  Identify on which of the three mutually reinforcing pillars Basel-III capital regulations are based?
   A. Minimum capital standards
   B. Supervisory review of capital adequacy
   C. Credit risk management
   D. Market discipline
   E. Management control
   Choose the most appropriate answer from the options given below
   1. A,B and C only
   2. A,B and D only
   3. C,D and E only
   4. A,C and D only
6. Assertion A: Credits flows to agriculture and SME sector have increased in recent years.
   Reasoning R: Reserve Bank of India has gradually relaxed various controls in credit market.
   Code:
   1. Both A and R are correct but R is the right explanation of A
   2. Both A and R are correct but R is not the right explanation of A
   3. A is correct but R is incorrect
   4. Both A and R is incorrect

Comprehension

A mutual fund is a special type of investment institution which acts as an investment conduit. It pools the savings of relatively small investors in a well- diversified portfolio of sound investment. Mutual funds issue securities (known as unit) to the investors (known as unit-holders) in accordance with the quantum of money invested by them.The profit (or losses) are shared by the investors in proportion to their investments.A mutual funds is set up in the form of a trust which has (i) a sponsor, (ii) trustee, (iii) Asset Management Company (AMC) and (iv) custodian.The trust is established by the sponsor who is like promoter of a company.The trustees of the mutual fund hold its property for the benefit of unit-holders.The trustees are vested with the general power of superintendence and direction over AMC. They monitor the performance and compliance of the SEBI regulations by the mutual fund. The AMC manages the funds by making investment in various types of securities. The custodian holds the securities of the various scheme of the mutual fund in its safe custody. As an investment intermediary, mutual funds offer a variety of service/advantages to the relatively small investors who,On their own,cannot successfully construct and manage an investment portfolio mainly due to the small size ot their funds, lack of expertize/experience and so on. These inter-alia, include convenience in the terms of lower denomination of investment and liquidity, lower risk through diversification, export management and reduced transaction cost due to economics of scale.

Sub questions

1. Who among the following monitors the compliance of SEBI regulations by the mutual fund?
   1. Sponsor
   2. Trustee
   3. AMC
   4. Custodian
2. The sponsor of a mutual fund is similar to
   1. Sole proprietor of a firm
   2. Partner of a partnership firm
   3. Promoter of a company
   4. Director of a company
3. AMC manages funds by investing in
   1. Stock market securities only
   2. Credit instruments only
   3. Government bonds only
   4. Various types of securities
4. Which among the following is not a part of mutual fund trust?
   1. Sponsor
   2. Custodian
   3. Depository
   4. Trustees
5. Mutual fund is
   1. Investment intermediary
   2. Venture capital
   3. NBFC
   4. Non-profit organization

Answer Key

1 (a); 2 (a) ; 3 (b) ; 4 (d) ; 5 (b) ; 6 (a);  Comprehension 1 (b) ; 2 (c) ; 3 (d) ; 4 (c) ; 5 (a)

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