Concepts in Banking and Accounting of transactions: Accounting in banks, Electronic Banking, RTGS, ATM, MICR, OCR, OMR, and DATANET, Petty Cash, Electronic Clearing Service (ECS), National Electronic Funds Transfer (NEFT) System, Real Time Gross Settlement (RTGS) System, IMPS

1. 205 FMBO
MCQ

2. Which organisation has proposed to establish a gold
exchange, wherein gold would be traded in the
form of Electronic gold receipts?
[A] RBI
[B] SEBI
[C] NCDEX
[D] MCX
Answer: Securities and Exchange Board of India (SEBI) has proposed
setting up a gold exchange. Under the proposed framework, gold
would be traded in the form of electronic gold receipts and would have
a domestic spot price discovery mechanism, which is transparent.
Under the proposed framework, gold would be denominated in 1
kilogram, 100 grams, 50 grams. Under special cases, they may even
be denominated in 5 and 10 grams.

3. Which institution has been granted powers to
supervise the ‘Registered investment advisers
(RIAs)’?
[A] BSE Administration and Supervision Ltd
[B] Reserve Bank of India
[C] IFSCA
[D] AMFI
Answer: A [BSE Administration and Supervision Ltd]
BSE Administration and Supervision Ltd (BASL) is a
subsidiary of BSE (Bombay Stock Exchange) Ltd
The Securities and Exchange Board of India (SEBI) has
appointed BASL to grant recognition to registered
investment advisers (RIAs) and supervise them. At present,
these functions are discharged directly by SEBI.

4. • As of March 31, 2021, what is the worth of total
non-performing assets (NPAs) of the banks in
India?
• [A] Rs 12.50 lakh crore
[B] Rs 10.46 lakh crore
[C] Rs 8.34 lakh crore
[D] Rs 6.54 lakh crore
Answer:C [Rs 8.34 lakh crore]
The non-performing assets (NPAs) or bad loans of banks were worth Rs
8.34 lakh crore, at the end of March 31, 2021.
‘Gross Loans and Advances – Outstanding’ of Scheduled Commercial
Banks rose to Rs 113.99 lakh crore as of March 31, 2021. NPAs have
declined by Rs 61,180 crore from Rs Rs 8.96 lakh crore carried at the
end of March 2020. Rs 9,33,779 crore was the NPA of the banks in 2019

5. • Recently, which organization has launched
Swavalamban Challenge Fund to promote
entrepreneurship?
• [A] SIDBI
[B] NABARD
[C] SEBI
[D] RBI
Answer: India’s Small Industries Development Bank of India (SIDBI) in
collaboration with the Foreign, Commonwealth & Development Office, United
Kingdom (FCDO UK) has launched the Swavalamban Challenge Fund
(SCF) with the aim to promote entrepreneurship. SIDBI is India’s principal
financial institution engaged in the promotion, financing and development of
micro, small and medium enterprises (MSMEs). Applications are invited in
two categories, which are pilot and scale-up. In the pilot category, applicants
can apply with their proposal to pilot/test/trial their innovative ideas. In the
scale-up category, already ongoing/completed projects can be applied for.

6. • Which e-commerce site has partnered with
National Payments Corporation of India
(NPCI), to enable doorstep digital
payments?
• [A] Amazon
[B] Flipkart
[C] Snapdeal
[D] Jiomart
Answer:

7. Which Fintech company has launched
‘Distributor to Retailer (D2R) Finance’?
[A] PhonePe
[B] BharatPe
[C] G-Pay
[D] Mi-Pay
Answer:B [BharatPe]
Leading Fintech company BharatPe has recently launched a new
lending product named Distributor to Retailer (D2R) Finance.
The product would offer instant liquidity to distributors, wholesalers,
traders and dealers. This specialised product would focus on small and
medium enterprises. It would offer collateral-free loans of up to Rs 50
lakh for a period of seven days to 30 days, at lower interest rates.

8. • Depository-Institutions Repo Rate or DR
Rate is the benchmark policy rate of which
country?
• [A] UK
[B] USA
[C] China
[D] India
Answer:C [China]
The People’s Bank of China has stated that the country’s monetary
policy and key price setting would be based on Depository-Institutions
Repo Rate or DR Rate. China has introduced a Variable Interest Rate
Bond, which is linked to the DR. This step is aimed to improve the pricing
mechanism for financial institutions and markets.

9. • In which year RTGS was introduced in
India?
• [A] 2000
[B] 2004
[C] 2010
[D] 2019
Answer:B [2004]
The Real Time Gross Settlement System (RTGS) transaction was
introduced in India in the year 2004. Presently, RTGS handles a
transaction volume of Rs 4.17 lakh crore per day and it is used by 237
participant banks.
Recently, Reserve Bank of India has permitted for round the clock RTGS
facility in India, which makes India one among the very few countries
offering this service.

10. • he economic report named “Ecowrap” is
released by which organization?
• [A] World Bank
[B] NITI Aayog
[C] IMF
[D] State Bank of India
Answer: D [State Bank of India]
The State Bank of India in its recent Ecowrap report has
lowered India’s GDP contraction for FY 21 from earlier
10.9% to 7.4%.
The report states that it would take nearly 7 quarters from
Q4 for the current financial year, to reach the pre-COVID
output and growth levels.

11. • As per the recent announcement of the RBI, which
service is to be made available round the clock
from December 2020?
• [A] NEFT
[B] RTGS
[C] IMPS
[D] BBPS
Answer: [B] RTGS Reserve Bank of India Governor Shaktikanta Das
announced that Real Time Gross Settlement (RTGS) payment
system will be available round the clock from December 2020.
At present, in the RTGS service, customer transactions are allowed
from 7am to 6pm only on a working day. The relaxation of time
constraints would make online payment more efficient. The minimum
amount to be remitted through RTGS is Rs 2 lakhs with no upper
ceiling.

12. • As per the RBI’s announcement, what is the
quantum of funds to be provided to banks under
on-tap TLTRO?
• [A] Rs 1 billion
[B] Rs 1 trillion
[C] Rs 2 billion
[D] Rs 2 trillion
Answer: B [Rs 1 trillion]
The Reserve Bank of India (RBI) will provide funds to banks totalling Rs 1
trillion under on-tap targeted long-term repo operations (TLTRO).
The on-tap funds will be deployed by the banks by providing leans to
various sectors including real estate, and microfinance. The rate of
interest for the funds will be fixed at a floating rate linked to the policy rate
and will be available till March 31, 2021

13. • Which Bank has been authorized to issue
Electoral Bonds in India?
• [A] Reserve Bank of India
[B] State Bank of India
[C] Indian Bank
[D] Punjab National Bank
Answer: B [State Bank of India]
The Ministry of Finance has authorised State Bank of India (SBI) to issue
and encash Electoral Bonds. These bonds would be made available
through SBI’s 29 Authorized Branches from 19th October to 28th of
October this year. The is the 14th phase of sale.
Electoral Bonds will be valid for fifteen calendar days from the date of
issue and no payment will be made to any payee Political Party if the
Electoral Bond is deposited after expiry of the validity period.

14. • What is the new limit of transaction made using
contactless card, as per the recent statement of
the RBI?
• [A] Rs 1000
[B] Rs 2000
[C] Rs 5000
[D] Rs 10000
Answer: C [Rs 5000]
The Reserve Bank of India (RBI) has proposed to increase the limit for
contactless card transactions to Rs 5,000 from Rs 2,000 per transaction
from January 1, 2021.
This announcement was part of the RBI’s Statement on Developmental
and Regulatory Policies, announced during the RBI’s bi-monetary policy
announcement. The limit for e-mandates for recurring transactions using
cards and UPI is also raised to Rs 5000.

15. • As per the RBI’s recent announcement, how many
banks in India are classified as Domestic
systemically important banks (D-SIBs)?
• [A] Two
[B] Three
[C] Five
[D] Six
Answer: B [Three]
The Reserve Bank of India (RBI) has retained State Bank of India, ICICI
Bank and HDFC Bank as domestic systemically important banks (D-
SIBs), by data collected as on March 31, 2020.
D-SIBs are also called as the banks which are considered as “too big to
fail” meaning its failure will impact the country significantly. As per the D-
SIB framework, RBI declares the names of the D-SIB banks and fixes
additional common equity requirement.

16. • What is the name of the document issued by bank
as a proof of payments received from abroad?
• [A] FIRA
[B] FCNR
[C] Vostro
[D] Nostro
Answer: A [FIRA]
FIRA is a document issued by banks to exporters as a proof of payments
received from abroad. It is a proof of receipt of export proceeds in foreign
currency received from abroad.
American Payment company PayPal has introduced an automated
process to obtain the monthly Foreign Inward Remittance Advice (FIRA).
It is a cost-free and easy process to download their monthly digital FIRA
issued by the bank. This initiative aims to empower Indian MSME
exporters.

17. • As per the RBI guidelines, what is the mandated
method for replenishing cash in ATMs?
• [A] Open cash top-up
[B] Loading cash on the spot
[C] Use Lockable cassettes
[D] None of the above
Answer: C [Use Lockable cassettes]
The Reserve Bank of India (RBI) has extended the deadline for banks to
use only lockable cassettes for replenishing cash in ATMs, till March
2022.
At present, most of the ATMs are replenished by way of open cash top-
up or by loading cash in the machines on the spot. After representations
received from banks citing difficulties in moving towards the lockable
cassettes system, RBI has decided to extend the deadline for its
implementation till March next year.

18. • Which institution launched ‘Expected loss-based
ratings’ for credit rating agencies?
• [A] RBI
[B] SEBI
[C] PFRDA
[D] IRDAI
Answer: B [SEBI]
As per the recent framework introduced by SEBI, Credit rating
agencies will now be required to provide expected loss-based ratings
for projects and instruments associated with the infrastructure sector.
The expected loss-based rating is divided into a scale of seven levels,
spanning from lowest to highest expected loss. Instruments rated ‘EL
(Expected Loss) 1’ will be considered to have the lowest expected
loss compared to the life of the ‘EL 7’ rated instruments, which will
indicate highest expected loss.

19. • hich is the major component of India’s foreign
exchange reserves?
• [A] Gold
[B] Foreign Currency assets
[C] SDR with IMF
[D] Reserve Position with IMF
Answer: B [Foreign Currency assets]
As per the RBI data, India’s foreign exchange reserves rose by USD
835 million to touch a record high of USD 612.73 billion in the week
ended July 16, 2021.
The foreign currency assets (FCA) is the major component of the overall
reserves. It rose by USD 463 million to USD 568.748 billion in the week.
Gold reserves were up by USD 377 million and the special drawing
rights (SDRs) with the International Monetary Fund (IMF) were up by
USD 1 million. With this, India became the fourth largest Forex holder.

20. • With reference to SEBI, what is the expansion of
SPAC, seen in the news sometimes?
• [A] SEBI- promoted acquisition companies
[B] Special-purpose acquisition companies
[C] SEBI- promoted autonomous companies
[D] Special-purpose autonomous companies
Answer: B [Special-purpose acquisition companies]
The Securities and Exchange Board of India (SEBI) is examining the
effective public shareholding in listed companies. It is also planning to
introduce special-purpose acquisition companies (SPACs) in the
country.
A special purpose acquisition company (SPAC) is a company with no
commercial operations. It is formed strictly to raise capital through an
initial public offering (IPO) for the purpose of acquiring an existing
company.

21. • Which is the first digital investment platform to launch UPI
based AutoPay functionality for its MF SIP Investments in
India?
• [A] MobiKwik
[B] Paytm
[C] PhonePe
[D] Google Pay
Answer: C [PhonePe]
PhonePe became the first digital investment platform to launch UPI based
AutoPay functionality for its Mutual Fund (MF) Systematic Investment Plans ( SIP)
and offerings in India. The UPI AutoPay function will be available for existing as
well as new investors on PhonePe app.
SIP is an investment route offered by Mutual Funds. In SIP, one can invest a fixed
amount in a Mutual fund scheme according to their will at regular intervals.
SIPs are open-ended. Customers can initiate, pause, restart and terminate SIP at
any time.
PhonePe was founded in 2015 and was later acquired by Flipkart in 2016. Its
headquarter is in Mumbai and Sameer Nigam is the current CEO of PhonePe.

22. • What is the minimum amount stipulation
for RTGS transactions?
A) Rs 50,000
B) Rs 1 lakh
C) Rs 2 lakhs
D) No Limit
Answer: C) Rs 2 lakhs

23. • What is the maximum amount stipulation
for RTGS transactions?
A) Rs 10 lakh
B) Rs 50 lakh
C) Rs 1 Crore
D) No Limit
Answer: D) No Limit
There is no upper ceiling for RTGS
transactions.

24. What is the maximum time allowed to the
beneficiary bank to credit the beneficiary’s
account after receiving the funds transfer
message in RTGS.
A) 15 mins
B) 5 mins
C) 30 mins
D) 45 mins
Answer: C
Under normal circumstances the beneficiary
branches are expected to receive the funds in real
time as soon as funds are transferred by the
remitting bank. The beneficiary bank has to credit
the beneficiary’s account within 30 minutes of
receiving the funds transfer message.

25. Which of the following is not a feature of
RTGS?
A) Real Time
B) Gross Basis
C) Netting
D) Order by Order settlement
Answer: C
It is a continuous (real-time) settlement
of funds transfers individually on an
order by order basis (without netting).

26. What does I stands for in IMPS?
A) Instant
B) Inter
C) Interface
D) Immediate
Answer: D
Immediate Payment Service

27. IMPS is managed by?
A) RBI
B) NPCI
C) SBI and NPCI
D) RBI and NPCI
Answer: B) NPCI
It stands for Immediate Payment Service.
It is managed by NPCI. NEFT and RTGS
are managed by RBI.

28. The IMPS facility is provided by NPCI
through its existing _____ network
A) CTS
B) UPI
C) NFS
D) NEFT
Answer: C
This facility is provided by NPCI
through its existing National Financial
Switch (NFS).

29. MMID is used for fund transfer in IMPS.
What does the First M in MMID stands
for?
A) Mobile
B) Money
C) Multi
D) Message
Answer:A
Mobile Money Identifier

30. MMID is a ______ code.
A) 9 digit
B) 11 digit
C) 7 digit
D) 5 digit
Answer: C) 7 digit

31. What is the minimum transaction amount
under IMPS?
A) Rs 10
B) Rs 50
C) Rs 100
D) No limit
Answer: D
Transaction Limit: No Minimum Limit;
Maximum: Banks can set their own limit
but not greater than Rs 10 lakh as per
NPCI.

32. In case when the advances to State
Governments exceed their Special Drawing
Facility (SDF) and Ways and Means Advances
(WMA) limits, they are provided with ______ by
the Reserve Bank of India.
A) Bonds
B) Cashflow
C) Overdraft
D) All of the above
Answer: C
When advances to State Governments exceed
their SDF and WMA limits, OD facility is being
provided.

33. Answer:

34. Answer:

35. Answer: