JAIIB Examination 2024

Indian Economy & Indian Financial

System
Module C
 Chapter 20
Indian Financial System - An
Overview
IE&IFS – JAIIB 2024
Q. 1
Which of the following is not part of the informal financial system? (Select the most
appropriate answer from the options given below)
(a) Money lender
(b) Mutual fund
(c) Relatives
(d) Mahajan
Answer: Option B
IE&IFS – JAIIB 2024
Q. 2
Which of the following is not part of the formal financial system?
(a) Association
(b) Banks
(c) NBFCs
(d) Insurance company

Answer: Option A
IE&IFS – JAIIB 2024
Q. 3
Which of the following is/are part of the financial system?
(a) Financial market
(b) Financial instrument
(c) Financial institution
(d) All of the above

Answer: Option D
IE&IFS – JAIIB 2024
Q. 4
Which was the first bank to be established in India?
(a) Bank of India
(b) State Bank of India
(c) Bank of Hindustan
(d) Punjab National Bank

Answer: Option C
IE&IFS – JAIIB 2024
Q. 5
In which phase of development of the financial system was focus laid on setting up of
Development Financial Institutions?
(a) Phase I
(b) Phase II
(c) Phase III
(d) Phase IV
Answer: Option B
 Chapter 21
Indian Banking Structure
IE&IFS – JAIIB 2024
Q. 6
In terms of which waste of the BR Act is the business of banking defined?
(a) Section 5
(d) Section 6
(c) Section 10
(b) Section 8
Answer: Option B
IE&IFS – JAIIB 2024
Q. 7
In which year was Reserve Bank of India established?
(a) 1947
(b) 1925
(c) 1935
(d) 1955
Answer: Option C
IE&IFS – JAIIB 2024
Q. 8
What is the capital requirement for setting up a Universal Bank?
(a) Rs 100 crores
(b) Rs 200 crores
(c) Rs 500 crores
(d) Rs 750 crores
Answer: Option B
IE&IFS – JAIIB 2024
Q. 9
What is the minimum capital requirement for sitting up a Small Finance Bank?
(a) Rs 100 crores
(b) Rs 200 сrores
(c) Rs 500 crores
(d) Rs 750 crores

Answer: Option A
IE&IFS – JAIIB 2024
Q. 10
What is the maximum balance that a Payment Bank can maintain in each account?
(a) Rs 1 lakh
(b) Rs 2 lakhs
(c) Rs 5 lakhs
(d) No limit

Answer: Option B
IE&IFS – JAIIB 2024
Q. 11
A transaction carried out at an ATM of the card issuing bank is called an
____________transaction
(a) ON-US
(b) OFF-US
(c) ON-U
(d) ON-ME
Answer: Option A
IE&IFS – JAIIB 2024
Q. 12
Google pay is a
(a) Fintech company
(b) Techfin company
(c) Neo Bank
(d) Payment gateway
Answer: Option B
 Chapter 22
Banking Laws - Reserve Bank of
India Act, 1934 & Banking
Regulation Act, 1949
IE&IFS – JAIIB 2024
Q. 13
In which year did the Reserve Bank of India commence its business?
(a) 1927
(b) 1935
(c) 1942
(d) 1947
Answer: Option B
IE&IFS – JAIIB 2024
Q. 14
In which year the RBI was converted into a public entity?
(a) 1935
(b) 1942
(c) 1947
(d) 1948

Answer: Option D
IE&IFS – JAIIB 2024
Q. 15
The Central Board of directors of RBI is required to meet, at least times in a year
(a) 4
(b) 6
(c) 8
(d) 12
Answer: Option B
IE&IFS – JAIIB 2024
Q. 16
Under which Act is RBI empowered to be a banker to the Government?
(a) RBI Act
(b) Banking Regulations Act
(c) Negotiable Instruments Act
(d) Public Debt Act
Answer: Option A
IE&IFS – JAIIB 2024
Q. 17
When the Banking Regulation Act 1949 was made applicable to cooperative Banks?
(a) 16 March, 1949
(b) 1 April, 1965
(c) 1 March, 1966
(d) 1 April, 1966
Answer: Option C
 Chapter 23
Development Financial
Institutions
IE&IFS – JAIIB 2024
Q. 18
Which was the first DFI that was set up in India?
(a) IDBI
(b) SIDBI
(c) ICICI
(d) IFCI

Answer: Option D
IE&IFS – JAIIB 2024
Q. 19
Which of the following would come under the category of an Investing Institution?
(a) LIC
(b) ICICI
(c) Exim Bank
(d) NABARD

Answer: Option A
IE&IFS – JAIIB 2024
Q. 20
With the onset of liberalisation, what structure was adopted by the DFIs?
(a) Commercial banks
(b) Universal banks
(c) Mortgage banks
(d) Collateralised banks

Answer: Option B
IE&IFS – JAIIB 2024
Q. 21
How much was the initial capital of IFCI?
(a) Rs 10 crores
(b) Rs 25 crores
(c) Rs 50 crores
(d) Rs 100 crores

Answer: Option A
IE&IFS – JAIIB 2024
Q. 22
Which of the following DFIs had a role of counselling NRIs for their investments in
India?
(a) IFCI
(b) IDBI
(c) ICICI
(d) Exim Bank
Answer: Option C
 Chapter 24
Micro Finance Institutions
IE&IFS – JAIIB 2024
Q. 23
In which year did RBI introduce the Lead Bank Scheme?
(a) 1947
(b) 1969
(c) 1970
(d) 1990
Answer: Option B
IE&IFS – JAIIB 2024
Q. 24
The Grameen Bank Model was developed in which country?
(a) India
(b) Nepal
(c) Sri Lanka
(d) Bangladesh
Answer: Option D
IE&IFS – JAIIB 2024
Q. 25
Which of the following types of MFIs are regulated by RBI?
(a) Not for Profit MFI
(b) Mutual Benefit MFI
(c) NBFC-MFI
(d) All of the above

Answer: Option C
IE&IFS – JAIIB 2024
Q. 26
In which type of financing of SHGs does an NGO act as a financial intermediary?
(a) Model I
(b) Model II
(c) Model III
(d) Model IV

Answer: Option C
IE&IFS – JAIIB 2024
Q. 27
Which of the following figures in the Fair Practices Code developed by RBI for NBFC-
MFI?
(a) There should be a board-approved loan application format
(b) No security deposit should be taken from the borrower
(c) A borrower should not be member of more than one SHG
(d) All of the above
Answer: Option D
 Chapter 25
Non-Banking Financial Companies
(NBFCs)
IE&IFS – JAIIB 2024
Q. 28
When was Chapter III-B added to the RBI Act, 1934?
(a) 1947
(b) 1977
(c) 1997
(d) 2001
Answer: Option C
IE&IFS – JAIIB 2024
Q. 29
Which of the following is the regulator for Housing Finance Companies?
(a) RBI
(b) SEBI
(c) Ministry of Corporate Affairs
(d) NHB
Answer: Option A
IE&IFS – JAIIB 2024
Q. 30
A Loan Company is an NBFC, as per which type of classification?
(a) Liability based
(b) Activity based
(c) Size based
(d) None of the above
Answer: Option B
IE&IFS – JAIIB 2024
Q. 31
What is the maximum period for which an NBFD-D can accept deposits?
(a) 12 months
(b) 36 months
(c) 60 months
(d) 120 months

Answer: Option C
IE&IFS – JAIIB 2024
Q. 32
Which of the following can be considered as part of Owned Funds for an NBFC?
(a) Equity shares
(b) Compulsory convertible Preference shares
(c) Balance in share premium A/c
(d) All of the above

Answer: Option D
 Chapter 26
Insurance Companies
IE&IFS – JAIIB 2024
Q. 33
The first insurance company to be established in India was
(a) LIC of India
(b) Oriental Life Insurance Co
(c) Bombay Mutual
(d) National Insurance Co.

Answer: Option B
IE&IFS – JAIIB 2024
Q. 34
What is the extent up to which FDI is presently permitted in the insurance sector?
(a) 26%
(b) 49%
(c) 74%
(d) 100%

Answer: Option C
IE&IFS – JAIIB 2024
Q. 35
The percentage of insurance premium received to GDP is known as
(a) Penetration
(b) Coverage
(c) Density
(d) Saturation

Answer: Option A
IE&IFS – JAIIB 2024
Q. 36
The ratio of insurance premium to the population is known as
(a) Penetration
(b) Coverage
(c) Density
(d) Saturation

Answer: Option C
IE&IFS – JAIIB 2024
Q. 37
What is the minimum capital that is required to establish a life insurance company?
(a) Rs 10 crores
(b) Rs 50 crores
(c) Rs 100 crores
(d) Rs 200 crores

Answer: Option C
 Chapter 27
Indian Financial System Regulators
and Their Roles
IE&IFS – JAIIB 2024
Q. 38
In which year was RBI nationalised?
(a) 1927
(b) 1935
(c) 1949
(d) 1955

Answer: Option C
IE&IFS – JAIIB 2024
Q. 39
How many times, at the minimum, does the Monetary Policy Committee meet in a
year?
(a) 4
(b) 6
(c) 10
(d) 12
Answer: Option B
IE&IFS – JAIIB 2024
Q. 40
What is the rate of interest payable on CRR funds?
(a) 0.5%
(b) 1%
(c) 2%
(d) No interest is payable

Answer: Option D
IE&IFS – JAIIB 2024
Q. 41
How many full time Members are there on the SEBI Board?
(a) 3
(b) 4
(c) 5
(d) 7

Answer: Option A
IE&IFS – JAIIB 2024
Q. 42
Under the recommendations of which Committee was IRDA established?
(a) Malhotra Committee
(b) Narasimhan Committee
(c) Tandon Committee
(d) Ghosh Committee

Answer: Option A
 Chapter 28
Reforms & Developments in the
Banking Sector
IE&IFS – JAIIB 2024
Q. 43
Which of the following is not a sector included in infrastructure?
(a) Textile Mills
(b) Waterworks
(c) Waterways
(d) Canal networks

Answer: Option A
IE&IFS – JAIIB 2024
Q. 44
Which of the following are characteristics of infrastructure financing?
(a) Larger amounts
(b) Longer maturities
(c) Fixed and low real rates of return
(d) All of the above

Answer: Option D
IE&IFS – JAIIB 2024
Q. 45
What is the authorised capital of NaBFID?
(a) Rs 10,000 crores
(b) Rs 25,000 crores
(c) Rs 75,000 crores
(d) Rs 1,00,000 crores

Answer: Option D
IE&IFS – JAIIB 2024
Q. 46
What is the percentage of cash settlement proposed to be made by NARCL?
(a) 5%
(b) 10%
(c) 15%
(d) 25%

Answer: Option C
IE&IFS – JAIIB 2024
Q. 47
Smart lending for aspiring India is one of the themes in which edition of EASE?
(a) EASE 1.0
(b) EASE 2.0
(c) EASE 3.0
(d) EASE 4.0
Answer: Option C