420+ Banking and Insurance Law MCQ Question Bank [Part 2]

This is Part 2 of the Banking and Insurance Law MCQ Question Bank. Over 200+ questions are already covered in Part 1 — click here to check it out. This section (Part 2) continues with 420+ additional high-quality MCQs to help you strengthen your preparation.

1. Which bank is known as banker’s bank?
a. RBI
b. SBI
c. PNB
d. NABARD

2. A banking system where business is carried on by a bank through a network of branches spread throughout the country is known as………
a. Unit banking
b. Branch banking
c. Chain banking
d. Group banking

3. ________ refers to a system of banking in which two or more independent banks are brought under the control of a holding company.
a. Group banking
b. Chain banking
c. Deposit banking
d. Investment banking

4. ________ banking is a system where banks combine both the deposit banking and investment banking functions.
a. Chain banking
b. Deposit banking
c. Investment banking
d. Mixed banking

5. India’s first women’s bank, The Bharatiya Mahila Bank, was inaugurated in which city?
a. Mumbai
b. Delhi
c. Kolkata
d. Chennai

6. Current deposit is also known as……….
a. Savings deposit
b. Demand deposit
c. Time deposit
d. Recurring deposit

7. Which deposits are repayable after the expiry of the fixed period?
a. Demand deposit
b. Time deposit
c. Savings deposit
d. Recurring deposit

8. ________ is a credit facility granted by commercial banks to current account holders.
a. Cash credit
b. Overdraft
c. Discounting of bills of exchange
d. Demand loans

9. The process of ________ begins with banks lending money out of primary deposit.
a. Credit creation
b. Cash credit
c. Debit creation
d. Overdraft

10. CRR refers to …………
a. Cash Reserve Ratio
b. Credit Reserve Ratio
c. Common Reserve Ratio
d. None of these

11. NBFIs refers to……….
a. Non Banking Financial Industries
b. Non Banking Financial Institution
c. Net Banking Financial Industries
d. Net Banking Financial Institutions

12. DICGC refers to …………..
a. Deposit Industrial Guarantee Corporation
b. Development Insurance Guarantee Corporation
c. Development Industrial Guarantee Corporation
d. Deposit Insurance Guarantee Corporation

13. SLR refers to…………..
a. Statutory Liquidity Ratio
b. Stability Liquidity Ratio
c. Safety Liquidity Ratio
d. None of these

14. EFT stands for……..
a. Electronic Fund Transmission
b. Electronic Fund Transfer
c. Electronic Feature Transfer
d. None of these

15. Which bank introduced the first ATM machine in India?
a. RBI
b. HSBC
c. PNB
d. ICICI Bank

16. CDM refers to ………….
a. Cash Deposit Machine
b. Credit Development Method
c. Cash Development Method
d. Cash Development Machine

17. ECS refers to……………
a. Easy Cash Service
b. Electronic Clearing Service
c. Electronic Cash Service
d. Easy Clearing Service

18. NEFT refers to……………
a. National Economic Fund Transfer
b. National Economic Fund Transfer
c. National Electronic Fee Transfer
d. None of these

19. IFSC stands for …………..
a. Indian Financial System Code
b. International Financial System Code
c. Indian Fund Service Code
d. None of these

20. RTGS stands for……………
a. Real Time Gross Settlement
b. Real Term Gross Settlement
c. Real Time Goal Settlement
d. Real Term Goal Settlement

21. SWIFT stands for……………..
a. Society for Worldwide Internet Financial Telecommunications
b. Solution for Worldwide Interbank Financial Telecommunications
c. Society for Worldwide Internet Financial Telecommunications
d. Solution for Worldwide Interbank Financial Telecommunications

22. CBS stands for……..
a. Code Banking Solutions
b. Core Banking Solutions
c. Common Banking Solutions
d. Credit Banking Solutions

23. CTS refers to………..
a. Cheque Truncation System
b. Cheque Transaction System
c. Cheque Truncation Solution
d. Cheque Transaction Solution

24. Credit Information Bureau India Limited is India’s first credit rating agency which was incorporated in the year……
a. 1988
b. 2000
c. 2005
d. 1995

25. KYC refers to………….
a. Know Your Customer
b. Know Your Credit
c. Know Your City
d. Know Your Company

26. Delivery of financial services at affordable costs to the disadvantaged low-income segments of the society is known as………..
a. Credit creation
b. Financial exclusion
c. Financial inclusion
d. Consumer credit

27. RBI Act came into existence in……
a. 1934
b. 1935
c. 1948
d. 1945

28. Banking Regulation Act came into existence in………
a. 1949
b. 1934
c. 1956
d. 1949

29. A cheque bears a date earlier than the date on which it is presented to the bank; it is called………………
a. Post-dated cheque
b. Ante-dated cheque
c. Outstation cheque
d. Local cheque

30. A cheque bears a date which is yet to come; it is called…………
a. Post-dated cheque
b. Ante-dated cheque
c. Crossed cheque
d. Self cheque

31. If a cheque is presented for payment after three months from the date of the cheque, it is known as…………
a. Self cheque
b. Mutilated cheque
c. Local cheque
d. Stale cheque

32. If a cheque is torn into two or more pieces and presented for payment, it is called…………
a. Mutilated cheque
b. Stale cheque
c. Local cheque
d. Self cheque

33. Cancellation of cheque is known as……………
a. Crossing
b. Opening of crossing
c. Double crossing
d. General crossing

34. MICR refers to………………..
a. Magnetic Ink Character Recognition
b. Magnetic Information Character Recognition
c. Magnetic Ink Code Recognition
d. Magnetic Icon Character Recognition

35. The person who seeks protection against a risk and to whom the insurance policy is issued is known as………….
a. Insurer
b. Customer
c. Insured
d. Creditor

36. Uberrimae fidei means…………….
a. Principle of utmost good faith
b. Principle of insurable interest
c. Principle of indemnity
d. Principle of subrogation

37. Which principle means to make good or compensate the loss?
a. Principle of contribution
b. Principle of subrogation
c. Principle of indemnity
d. Principle of insurable interest

38. IRDA stands for……..
a. Insurance Regulatory and Development Authority
b. Industrial Development and Development Authority
c. Insurance Restructuring and Development Authority
d. Insurance Refinancing and Development Authority

39. IRDA Act was passed in the year……
a. 1948
b. 2000
c. 1999
d. 1956

40. Hull insurance relates to……….
a. Building
b. Life
c. Machine
d. Ship

41. In the case of life insurance, HLV refers to………….
a. Home Legal Value
b. Human Life Value
c. Human Legal Value
d. House Length Value

42. ________ of a life policy means transferring the rights of the insured in respect of the policy to another one.
a. Nomination
b. Consideration
c. Assignment
d. Agreement

43. Both assignment and nomination are possible in the case of…………insurance policies.
a. Life
b. Fire
c. Marine
d. Vehicle

44. ________ is the price paid by the insured for the risk undertaken by the insurer.
a. Wages
b. Premium
c. Salary
d. Compensation

45. ________ schemes are intended to insure a group of individuals together.
a. Insurance
b. Wages
c. Salary
d. Group insurance

46. Group insurance provides insurance cover to a number of persons under a single policy called……….
a. Master policy
b. Single policy
c. Group policy
d. Marine policy

47. In the case of group insurance, the amount of premium depends upon…………
a. Types of insurance
b. Amount of premium
c. Terms of insurance
d. Period of insurance

48. ________ means voluntary termination of the contract of life insurance by the policyholder.
a. Keyman insurance policy
b. Surrender of policy
c. Master policy
d. Group insurance policy

49. Marine Insurance Act came into existence in………………
a. 1963
b. 1988
c. 1948
d. 1976

50. In the case of marine insurance, Hull means…………
a. Sinking of ship
b. Loss of cargo
c. Body of the ship
d. None of these

of the vessel.
a. Barratry
b. Jettison
c. Assignment
d. Seizure

52. Insurance Act came into existence in……..
a. 1956
b. 1948
c. 1938
d. 1988

53. Reinstatement policy is related in the case of which policy?
a. Life insurance policy
b. Marine insurance policy
c. Fire insurance policy
d. Group insurance policy

54. A reinstatement policy is intended to cover damages or losses in respect of……….
a. Fixed assets
b. Vehicle
c. Ship
d. Life

55. Payment of compensation in the case of reinstatement policy is in the form of……….
a. Cash
b. Replacement
c. Cash or in kind
d. In kind

56. Which policy is taken to cover loss on those goods which are lying in different places and the stock value will be continuously fluctuating?
a. Comprehensive policy
b. Floating policy
c. Declaration policy
d. Average policy

57. In the case of motor insurance policy, Form A is commonly known as………
a. Act policy
b. Package policy
c. Act and Package policy
d. Liability policy

58. In the case of motor insurance policy, Form B is commonly known as………..
a. Liability policy
b. Act policy
c. Package policy
d. Act and Package policy

59. When a particular property is insured with two insurers, it is called………..
a. Property insurance
b. Double insurance
c. Single insurance
d. Particular insurance

60. Personal accident insurance is highly attractive for………………….
a. Individuals
b. Partners
c. Industrialists and businessmen
d. Senior citizens

61. Which insurance covers the financial loss arising out of poor health condition or due to permanent disability?
a. Accident insurance
b. Health insurance
c. Life insurance
d. Burglary insurance

62. ________ means selling of insurance policies and products through banking firms.
a. Assurance
b. Bancassurance
c. Insurance
d. Policy

63. Life Insurance Corporation of India was formed in the year……..
a. 1948
b. 1964
c. 1956
d. 1988

64. The General Insurance Corporation of India was formed in the year……..
a. 1973
b. 1948
c. 1956
d. 1984

65. General Insurance Corporation of India Act was formed in……..
a. 1973
b. 1963
c. 1972
d. 1962

66. Which risk may result in loss or gain?
a. Particular risk
b. Pure risk
c. Speculative risk
d. Fundamental risk

67. Risk arises due to changes in the economic policies of the government.
a. Speculative risk
b. Particular risk
c. Dynamic risk
d. Financial risk

68. Risk which arises if there is no change in the economic policies of the government is………..
a. Dynamic risk
b. Static risk
c. Particular risk
d. Financial risk

69. In which type of risk, origin and consequences of risk affect a large number of people?
a. Particular risk
b. Static risk
c. Fundamental risk
d. Particular risk

70. Where a monetary loss is likely to occur, such risks are described as…………
a. Monetary risk
b. Financial risk
c. Particular risk
d. Fundamental risk

71. Principle of insurable interest means…………..
a. Utmost good faith
b. Subrogation
c. Monetary interest
d. Indemnity

72. The principle of subrogation is an extension of which principle?
a. Principle of indemnity
b. Principle of utmost good faith
c. Principle of insurable interest
d. Principle of insurance

73. When a deposit of money is received by the banker, the banker becomes the…………?
a. Creditor
b. Debtor
c. Receiver
d. Customer

74. When a deposit of money is received by the banker, the customer becomes the…………..?
a. Debtor
b. Creditor
c. Customer
d. Lender

75. The primary relationship between banker and customer is……………
a. Giver and receiver
b. Debtor and creditor
c. Insurer
d. Insured

76. ________ is a person to whom the management of a particular property is entrusted for the exclusive benefit of a third party.
a. Customer
b. Beneficiary
c. Trustee
d. Agent

77. Bankers Book Evidence Act came into existence in……..
a. 1881
b. 1891
c. 1890
d. 1892

78. ________ is the right of a creditor to retain possession of the property belonging to the debtor until certain demands are satisfied.
a. Lien
b. Returning
c. Surrender
d. None of these

79. FDR stands for…………..
a. Fixed Delivery Receipt
b. Fixed Deposit Receipt
c. Final Deposit Receipt
d. Final Delivery Receipt

80. In which year was the Negotiable Instruments Act passed?
a. 1981
b. 1956
c. 1881
d. 1984

81. ________ is a person who draws or makes a cheque.
a. Drawee
b. Drawer
c. Payer
d. Payee

82. In the case of a cheque, the drawee will always be a specified……….with whom the drawer keeps an account.
a. Person
b. Partner
c. Customer
d. Banker

83. ________ is a person to whom the amount of a cheque is payable.
a. Drawer
b. Drawee
c. Payee
d. Customer

84. Which one of the following is correct in the case of parties involved in a cheque?
a. Debtor and Creditor
b. Banker and Customer
c. Drawer, Drawee and Payee
d. Drawer and Payee

85. When a cheque is specially crossed to more than one banker, it is called………..
a. General crossing
b. Special crossing
c. Not negotiable crossing
d. Double crossing

86. ________ means signing a person’s name on the back of the negotiable instrument.
a. Crossing
b. Endorsement
c. Special crossing
d. General crossing

87. Endorsement facilitates……………..
a. Selling
b. Transferability
c. Buying
d. None of these

88. The person who endorses the instrument is called………….
a. Drawer
b. Drawee
c. Endorser
d. Endorsee

89. The person to whom the endorsement is made is called………….
a. Endorser
b. Endorsee
c. Drawer
d. Drawee

90. Sometimes further endorsement can be made on a separate slip of paper attached to the instrument; such a paper is called……….
a. Document
b. Stamp
c. Allonge
d. Notice

91. When an endorser merely signs his name on the back of the instrument without specifying the name of the person to whom it is endorsed, it is called……….
a. Blank endorsement
b. Full endorsement
c. Conditional endorsement
d. Facultative endorsement

92. When an endorser not only signs his name on the back of the instrument but also specifies the name of the person to whom it is endorsed, it is called……….
a. Blank endorsement
b. Conditional endorsement
c. Full endorsement
d. Partial endorsement

93. ________ is an endorsement in which some of the rights of the endorser are waived.
a. Restrictive endorsement
b. Special endorsement
c. Facultative endorsement
d. Qualified endorsement

94. ________ is an endorsement which limits the liability of the endorser.
a. Sans recourse endorsement
b. San frais endorsement
c. Partial endorsement
d. Per pro endorsement

95. In san frais endorsement, the word “sans frais” means………….
a. Without name
b. Without expense
c. Without money
d. Without consent

96. ________ endorsement is an endorsement made by an authorised person on behalf of another.
a. Partial endorsement
b. Restrictive endorsement
c. Per pro endorsement
d. Sans recourse endorsement

97. ________ is a copy of a customer’s account in the bank’s ledger.
a. Cash book
b. Pass book
c. Cheque book
d. Pay-in slip

98. PMJDY stands for…………..
a. Pradhan Mantri Jan-Dhan Yojana
b. Prime Minister Jan Dhan Yojana
c. Pradhan Mantri Jeevan Dhan Yojana
d. None of these

99. In which type of banking system do several banks join hands with each other for meeting the credit requirements of large borrowers?
a. Group banking
b. Consortium banking
c. Net banking
d. None of these

100. The practice of conducting banking transactions from home rather than at bank branches by means of electronic telecommunication is known as……….
a. Branch banking
b. Group banking
c. Chain banking
d. Home banking

101. Risk is the chance of ——-
a. Peril
b. Accident
c. Loss
d. Event

102. Peril may lead to —–
a. Risk
b. Losses
c. Accident
d. None of these

103. Risk is Loss
a. Similar
b. Not
c. Same as
d. None of these

104. Particular Risk can also be known as ——
a. Personal
b. Fundamental
c. Pure
d. None of these

105. If losses occur out of individual events, such risks are —-
a. Particular
b. Fundamental
c. Pure
d. Speculative

106. A —— risk may result in loss or gain.
a. Particular
b. Fundamental
c. Pure
d. Speculative

107. ——- are those occurring due to economic policies of the government.
a. Particular
b. Fundamental
c. Dynamic
d. Speculative

108. —- risks are those occurring even if there is no change in economic policies of the government.
a. Static
b. Fundamental
c. Dynamic
d. Speculative

109. When financial loss is likely to occur such risk is known as —–
a. Static
b. Financial
c. Dynamic
d. Speculative

110. ——- guarantee insurance guarantees the employer for any damages or losses resulting from dishonesty of employee.
a. Fidelity guarantee insurance
b. Cash in transit insurance
c. Social insurance
d. Unemployment insurance

111. ——- insurance is given financial help to unemployed persons who lost employment due to some uncontrollable reasons.
a. Fidelity guarantee insurance
b. Cash in transit insurance
c. Social insurance
d. Unemployment insurance

112. ——- insurance compensates the insured against loss of money while it is being carried from office to bank or bank to office or branch.
a. Fidelity guarantee insurance
b. Cash in transit insurance
c. Social insurance
d. Unemployment insurance

113. ——- is popular among industrial workers.
a. Fidelity guarantee insurance
b. Cash in transit insurance
c. Social insurance
d. Unemployment insurance

114. ——- means insurance of all the members of a group as a social security measure.
a. Fidelity guarantee insurance
b. Cash in transit insurance
c. Social insurance
d. Unemployment insurance

115. ——- is a method of transferring a portion of risk to another insurer.
a. Re-insurance
b. Under insurance
c. Double insurance
d. None of these

116. ——- is essential for the contracting parties to disclose all material facts relating to the contract.
a. Utmost good faith
b. Insurable interest
c. Certainty of the event
d. None of these

117. ——- is the interest in the subject matter of the insurance which is insured.
a. Utmost good faith
b. Insurable interest
c. Certainty of the event
d. None of these

118. Insurance is a contract of —–
a. Indemnity
b. Surety
c. Guarantee
d. None of these

119. Principle of ——- refers to the sharing of loss among co-insurers.
a. Indemnity
b. Guarantee
c. Contribution
d. None of these

120. According to the Principle of ——-, the insurer is liable only for those losses which are most closely caused by the peril insured against.
a. Contribution
b. Guarantee
c. Causa proxima
d. Indemnity

121. Stepping into the shoes of the other is applicable to the principle of —–
a. Causa proxima
b. Guarantee
c. Subrogation
d. Contribution

122. ——- is used in those contracts which guarantee the payment of certain sum of money on the happening of a specified event.
a. Assurance
b. Insurance
c. Indemnity
d. None of these

123. ——- ensures payment of the sum assured to the policyholder or to his nominee either at the end of the period or on death of the assured.
a. Endowment Assurance
b. Whole life plans
c. Joint life policy
d. None of these

124. ——- is intended to spouses.
a. Whole life policy
b. Joint life policy
c. Endowment Assurance
d. None of these

125. Group insurance intended to insure a group of people under a single policy called —-
a. Endowment Assurance
b. Whole life policy
c. Joint life policy
d. Master policy

126. The proposal for group insurance is called —–
a. Leader proposal
b. Master proposal
c. Main proposal
d. None of these

127. GGS means —-
a. Gratuity Group Scheme
b. Group Gratuity Scheme
c. All
d. None of these

128. GSS means —-
a. Group Superannuation Scheme
b. Group Service Scheme
c. Gratuity Service Scheme
d. None of these

129. ACR means ——
a. Accountant’s Confidential Report
b. Agent’s Confidential Report
c. Assessment of Confidential Report
d. None of these

130. MHR means ——-
a. Manual Hazard Report
b. Moral Hazard Report
c. Medical Hazard Report
d. None of these

131. Voluntary termination of contract of life insurance is called —–
a. Returning of policy
b. Surrender of policy
c. Withdrawal of policy
d. None of these

132. The total amount remitted in the form of premium will be the ——- of such policies.
a. Surrender value
b. Paid-up value
c. Surrender cost
d. None of these

133. ——- applies mathematical and statistical methods to assess the risk in the insurance business.
a. Mathematical science
b. Behavioural science
c. Actuarial science
d. None of these

134. FPR refers to —-
a. First Premium Report
b. First Premium Receipt
c. First Proposal Report
d. None of these

135. RPR refers to —–
a. Renewal Premium Report
b. Renewal Payment Report
c. Renewal Premium Receipt
d. None of these

136. Life insurance is a ——- contract.
a. Long-term
b. Short-term
c. Medium-term
d. None of these

137. In life insurance the amount of premium depends upon —–
a. Period of the policy
b. Type of policy
c. Age of the insured
d. Repaying capacity of the insured

138. ——- is a plan that is tailor-made for families.
a. Floater Health Insurance Policy
b. Group Health Insurance
c. Unit-linked Health Insurance
d. None of these

139. Low cost policy for employees is provided by —–
a. Life insurance
b. Health insurance
c. Group insurance
d. None of these

140. In marine insurance policies, open policy is also known as ——
a. Valued policy
b. Time policy
c. Unvalued policy
d. Voyage policy

141. Writing off the policy before its actual maturity is known as —-
a. Nomination
b. Foreclosure
c. Surrender
d. None of these

142. ——- insurance covers many persons under one contract.
a. Public insurance
b. Group insurance
c. Personal accident insurance
d. None of these

143. ——- is the rate at which the central bank rediscounts the bills of commercial banks.
a. Bank Rate Policy
b. Central bank rate
c. Credit rate
d. None of these

144. ——- is the deliberate attempt by the central bank to influence the volume of credit available in the country.
a. OMO
b. SLR
c. BRP
d. None of these

145. Delivery of bank’s service to a customer at his office or home by using electronic technology is called —-
a. ATM
b. EFT
c. E-Banking
d. None of these

146. The amount is instantly credited to the account of the customer in —–
a. ATM
b. EFT
c. CDM
d. None of these

147. Virtual banking is also called —–
a. Internet Banking
b. Home Banking
c. Mobile Banking
d. None of these

148. Plastic money is —-
a. Debit card
b. Credit card
c. ATM card
d. None of these

149. KCC is —-
a. Kissan Credit Card
b. Kissan Customer Card
c. Key Credit Card
d. None of these

150. NPA means —-
a. Net Performing Asset
b. Non-Performing Asset
c. Net Profit Acceptance
d. None of these

151. In case of banking several banks joint together to meet the credit needs of large borrowers.
a. Commercial banking
b. Consortium banking
c. Joint banking
d. None of these

152. Example for Foreign Bank is —
a. Centurion Bank
b. City Bank
c. Axis Bank
d. All

153. Bank of Baroda is an example for —
a. Private sector Bank
b. Foreign Bank
c. Public sector Bank
d. None of these

154. Federal Bank is a —
a. Private sector Bank
b. Foreign Bank
c. Public sector Bank
d. None of these

155. IBRD is also known as —
a. Central Bank
b. World Bank
c. Exim Bank
d. All

156. State financial corporations is an example for —
a. Industrial Bank
b. Foreign Bank
c. Public sector Bank
d. All

157. — is a loan for short term temporary financing for Business firms.
a. Term loans
b. Bridge loans
c. Cash credit
d. All

158. — is a temporary financial arrangement by the bank to draw more than the amount standing to his credit.
a. Overdraft
b. Bridge loans
c. Cash credit
d. None of these

159. — is based on the voice processing facility available with the bank computers.
a. Internet Banking
b. Tele Banking
c. Mobile Banking
d. All

160. — is the deliberate attempt by the RBI to influence the volume of available credit in the country.
a. Bank Rate Policy
b. Open Market Operations
c. Qualitative credit control
d. All

161. — insurance is a cash value policy that provides lifetime protection by paying a lump sum death benefit.
a. Endowment insurance
b. Term insurance
c. Whole life insurance
d. Life insurance

162. — insurance policy pay the assured sum on maturity of the policy or on the death of the insured whichever is earlier.
a. Endowment insurance
b. Term insurance
c. Whole life insurance
d. Life insurance

163. — insurance cover loss or damage to a ship and in-transit cargo over the waterways, land and air.
a. Motor insurance
b. Marine insurance
c. Third party insurance
d. Fire insurance

164. In the case of — policy, the premium amount is payable periodically throughout the entire life of the insured.
a. Ordinary whole life policy
b. Limited payment whole life policy
c. Convertible policy
d. Double endowment policy

165. General relationship between banker and customer is —
a. Contractual relationship
b. Trustee and beneficiary
c. Right of agent
d. None of these

166. While accepting deposit, a banker becomes — and customer is —
a. Creditor and debtor
b. Debtor and creditor
c. None of these

167. There is no fixed place of repayment in —
a. Debt due from bank
b. Ordinary commercial debt
c. Special debt
d. None of these

168. — is a clause or condition added to a basic life insurance policy which provides additional benefit at the option of the proposer.
a. Nomination
b. Exclusion
c. Riders
d. Loans

169. — is the all rights, title and interest of assignor in the policy is transferred to the assignee without reversion to the former.
a. Conditional assignment
b. Acceptance
c. Absolute assignment
d. Submission

170. — is the all rights, title and interest of assignor in the policy are transferred to the assignee subject to certain conditions.
a. Conditional assignment
b. Acceptance
c. Absolute assignment
d. Submission

171. — is the process of writing off the policy before its actual maturity.
a. Foreclosure
b. Surrender
c. Nomination
d. Execution

172. Clauses give the description of the nature, extent and scope of the cargo insurance.
a. Cargo clause
b. Hull clause
c. Freight clause
d. Liability clause

173. Inchmarl clauses is also known as —
a. Transit clause
b. Negligence clauses
c. Stay clause
d. Warehouse clause

174. — clause enables the insured in trying to save the subject matter of insurance from any type of loss.
a. Sue and labour
b. Running down clause
c. Continuation clause
d. Memorandum clause

175. — clause relieves the insurer from paying small losses on perishable goods which are the subject matter of insurance.
a. Reinsurance clause
b. Waiver clause
c. Memorandum clause
d. Sue clause

176. Which is the odd one out —
a. Voyage policy
b. Valued policy
c. With profit policy
d. Time policy

177. Which one is not a condition relating to premium —
a. Premium notice
b. Commencement of risk
c. Payment of premium
d. Days of grace

178. — insurance is to help business to survive from the blow of losing the important person.
a. Unit linked insurance
b. Group insurance
c. Ordinary insurance
d. Keyman insurance

179. KYC is —
a. Know Your Credit
b. Know Your Customer
c. Know Your Cash
d. All

180. Bankers Bank Evidence Act in —
a. 1981
b. 1891
c. 1949
d. 1934

181. A cheque is in circulation for a long period is called —
a. Anti-dated cheque
b. Stale cheque
c. Mutilated cheque
d. None of these

182. — crossing is not recognized by law, but only by banking custom.
a. Account payee crossing
b. Double crossing
c. Special crossing
d. Not-negotiable crossing

183. — is an endorsement made by an authorized person on behalf of another.
a. Prepro endorsement
b. Facultative endorsement
c. Partial endorsement
d. None of these

184. In the case of — cheque, the payee need not be named and it can be transferred by mere delivery.
a. Bearer cheque
b. Order cheque
c. Stale cheque
d. None of these

185. — is the instruction given by the customer of a bank in writing requesting the banker not to honour the cheque whose date, number, amount, and payee’s name is mentioned in the cheque.
a. General instruction
b. Countermanding instruction
c. Prohibitory instruction
d. None of these

186. Fixed deposit is also known as —
a. Demand deposit
b. Cumulative deposit
c. Savings deposit
d. Time liabilities

187. When a cheque is torn into pieces, it is called —
a. Post-dated cheque
b. Ante-dated cheque
c. Mutilated cheque
d. None of these

188. Cancellation of crossing of a cheque is called —
a. Mutilated cheque
b. Torned cheque
c. Material alterations
d. None of these

189. A — cannot be made payable to the bearer.
a. Cheque
b. Draft
c. Bill of exchange
d. None of these

190. A cheque which bears a date which has already elapsed is called —
a. Post-dated cheque
b. Ante-dated cheque
c. Mutilated cheque
d. None of these

191. A — is a bank like any other bank operating on a small scale without involving credit risk.
a. Consortium Bank
b. Payment Bank
c. Small Finance Bank
d. None of these

192. — bank can accept deposit only, but cannot lend.
a. Consortium Bank
b. Payment Bank
c. Small Finance Bank
d. None of these

193. Banks can issue ATM Debit cards but no Credit cards.
a. Payment Bank
b. Consortium Bank
c. Small Finance Bank
d. None of these

194. — banks accept deposits but customer balance should not exceed Rs. 1 lakh.
a. Small Finance Bank
b. Consortium Bank
c. Payment Bank
d. None of these

195. — is to perform lending activities among weaker sections of the community.
a. Small Finance Bank
b. Consortium Bank
c. Payment Bank
d. All

196. — are norms for banks aimed at mitigating the risk and strengthening the capital structure of the banks of member countries.
a. IRAC rules
b. BASEL norms
c. Capital Adequacy Norms
d. None of these

197. To strengthen the capital base of banks RBI laid down —
a. IRAC rules
b. BASEL norms
c. Capital Adequacy Norms
d. None of these

198. For providing transparency in accounting and reporting procedures of banks — are introduced in 1992.
a. IRAC rules
b. BASEL norms
c. Capital Adequacy Norms
d. None of these

199. — banking refers to the use of technology and communication systems in delivering banking products and services to customers.
a. Hi-tech banking
b. Virtual banking
c. PC banking
d. Home banking

200. How many branches a unit bank have?
a. One branch
b. Two branches
c. No branches
d. None of these

201. Prime lending rate is charged by —
a. Commercial bank
b. Merchant bank
c. Cooperative bank
d. Development bank

202. When did the banking sector reforms initiate?
a. 1996
b. 1901
c. 1991
d. 1989

203. Under which banking aims at targeting customers with large value transactions?
a. Wholesale banking
b. Merchant banking
c. Retail banking
d. Internet banking

204. Which of the following is known as plastic money?
a. Credit card
b. Debit card
c. None of these
d. Both of these

205. On which rate method, the interest is charged on the full amount of the loan throughout the entire period of loan?
a. Fixed rate of interest
b. Floating rate of interest
c. Flat rate of interest
d. Compound rate of interest

206. Debit card means —
a. Pay later
b. Pay now
c. Both of these
d. None of these

207. Which type of loans have less prone to the risk of becoming NPA?
a. Retail loans
b. Wholesale loans
c. Gold loans
d. Mortgage loans

208. Which is the fastest possible money transfer system through banking channel?
a. RTGS
b. EFT
c. ATM
d. None of these

209. Which type of bank assets remained as NPA for a period exceeding 12 months?
a. Standard assets
b. Substandard assets
c. Consortium banking
d. None of these

210. Those banking services based on the voice processing facility available with the bank computers.
a. Internet banking
b. Home banking
c. E-banking
d. Telebanking

211. Cash which is stored electronically on a microchip is called —
a. E-purse
b. Debit card
c. ATM
d. Credit card

212. Which of the banking assets are treated as performing asset?
a. Standard asset
b. Loss asset
c. Doubtful asset
d. Substandard asset and standard asset

213. When was the banking ombudsman scheme introduced?
a. 1991
b. 1994
c. 1995
d. 1990

214. Under which type of interest calculation, the bank charges interest on interest?
a. Compound interest
b. Floating rate
c. Fixed rate interest
d. Simple interest

215. The maximum age limit of housing loan borrower —
a. 40 years
b. 60 years
c. 80 years
d. 65 years

216. The maximum repayment period of vehicle loan range —
a. 60–84 months
b. 60–74 months
c. 80–84 months
d. 50–60 months

217. Paperless banking is known as —
a. RTGS
b. Internet banking
c. EFT
d. Mobile banking

218. What is the proof of the insurance contract?
a. Certificate
b. Policy
c. Receipts
d. None of the above

219. The first insurance company was started in —
a. 1678
b. 1681
c. 1680
d. 1675

220. In India which is the first insurance company?
a. Bombay Mutual Assurance Society Ltd
b. Bharat Insurance Co.
c. Oriental Life Insurance Co. Ltd
d. Empire of India

221. When the Life Insurance Corporation of India was formed?
a. August 1, 1956
b. November 1, 1956
c. September 1, 1956
d. January 1, 1956

222. In Insurance the consideration is known as —
a. Money
b. Fund
c. Return
d. Premium

223. What is the basis of evaluation of risk in insurance?
a. Heliocentric theory
b. Relativity theory
c. Quantum theory
d. Probability theory

224. Which risk affects the whole society?
a. Fundamental risk
b. Non-fundamental risk
c. Speculative risk
d. Dynamic risk

225. “Both parties of insurance contract to deal in good faith.” What is that concept?
a. Aleatory
b. Unilateral
c. Uberrimae fidei
d. Personal

226. A contract that is based on speculation is known as —
a. Insurance
b. Wagering
c. Assurance
d. None of these

227. Marine insurance covered which losses?
a. Cargo
b. Freight
c. Vessels
d. All

228. IRDA based in —
a. Hyderabad
b. Kolkata
c. Mumbai
d. Chennai

229. Insurance is defined as a —
a. Contract
b. Social device
c. Cooperative device
d. All

230. Surrender of policy is not applicable in —
a. Life insurance
b. General insurance
c. Miscellaneous insurance
d. All

231. What is called the right of an insurer to refuse admittance of the claim by the insured?
a. Reinsurance
b. Indemnity
c. Repudiation
d. Actuarial valuation

232. Mr. X the owner of a property insures it against fire for Rs. 75,000 with company A and Rs. 50,000 with companyb. It is an example of —
a. Re–insurance
b. Double insurance
c. Fire insurance
d. Renewal of insurance

233. Which insurance policy provides the unique combination of health insurance and investment?
a. Unit–linked health insurance
b. Overseas travel insurance
c. Group health insurance
d. None of these

234. If neither the word bearer nor order is written on a cheque payment will be made by treating as —
a. A bearer cheque
b. An order cheque
c. At bank’s discretion
d. Cannot be paid at all

235. Account payee crossing is a direction of the drawer —
a. To collecting banker
b. To drawee banker
c. To payee
d. None of these

236. Which of the following is called banker’s cheque?
a. Demand draft
b. Debit card
c. Pay order
d. Fixed deposit

237. A type of loan given by one bank to another bank is —
a. Money at call and short notice
b. Bridge loan
c. Term loan
d. None of these

238. Unit banking is also called —
a. Branch banking
b. Specialized banking
c. Localized banking
d. None of these

239. The principal amount repaid towards housing loan also qualify for deduction under sec 80C of which Act?
a. Income Tax Act
b. Factories Act
c. Corporate Tax
d. Companies Act

240. Name the scheme of remittance of funds envisaged by the Foreign Exchange Dealers Association of India.
a. Differential Rate of Interest Scheme
b. Village Adoption Scheme
c. Foreign Inward Remittance Payment Scheme
d. Banking Ombudsman Scheme

241. Time period for bridge finance ranging from —
a. 1–14 days
b. 90–120 days
c. 2 weeks to 3 years
d. 3–5 years

242. How many branches a unit bank have?
a. One branch
b. Two branches
c. No branches
d. None of these

243. The relationship between a banker and customer is…………
a. That of a debtor and creditor
b. That of a creditor and debtor
c. Primarily that of a debtor and a creditor
d. (a) and (b) together

244. The banker has a lien on……..
a. Bonds given for collection
b. Bonds given for safe custody
c. Bonds left by mistake
d. (a) and (b) together

245. In executing the standing instructions, there exists a relationship of……..
a. Debtor and creditor
b. Trustee and Beneficiary
c. Bailee and Bailor
d. Agent and Principal

246. To constitute a person as a customer…….
a. There must be frequency of transactions
b. There must be a dealing of a banking nature
c. There must be some sort of an account
d. There must be a single transaction of any nature

247. The banker has a statutory obligation to………
a. Honour customers’ cheque
b. Exercise lien
c. Maintain secrecy of his customers’ accounts
d. Honour customers’ bill

248. Contracts by lunatics in India are……….
a. Always void
b. Always valid
c. Always voidable
d. At times voidable

249. The best procedure for opening an account in the name of a minor X and the guardian Y would be under the style………….
a. ‘X’ Account
b. ‘X’ Account – Minor
c. ‘Y’ in trust for X
d. ‘Y’ Account

250. The balance of a joint A/c in the name of X, Y, Z should be paid on the death of X……..
a. To the legal representative of X
b. To Y and Z
c. To Y or Z
d. To the legal representative of X, Y and Z

251. The most undesirable customer is…….
a. A minor
b. A married woman
c. An unregistered firm
d. An undischarged bankrupt

252. A customer’s letter of instructions without any stamp, in connection with the operations of his account is known as……
a. Power of attorney
b. Authority letter
c. Probate
d. Mandate

253. The following one is a negotiable instrument, negotiable by usage or custom…………
a. Bill of Exchange
b. Accommodation Bill
c. Promissory Note
d. Share warrant

254. The document drawn by a debtor on the creditor agreeing to pay a certain sum is called…………
a. Cheque
b. Promissory Note
c. Bill of Exchange
d. Draft

255. The most important feature of a negotiable instrument is……
a. Free transfer
b. Transfer free from defects
c. Right to sue
d. (a) and (b) together

256. In the case of a negotiable instrument, the following person generally gets a good title…..
a. Finder of the lost instrument
b. Holder of a stolen instrument
c. Holder in due course
d. Holder of a forged instrument

257. The reasonable period allowed in India for the presentation of a cheque is………….
a. 1 Year
b. 3 Months
c. 9 Months
d. Depending upon banking custom

258. A cheque bearing a date 31st April, 1992 is presented for payment on 5th May 1992. As per the practice…………
a. The cheque should be dishonoured with the remark ‘non-existing date’
b. The cheque is returned with the remark ‘irregularly drawn’
c. The cheque is dishonoured with the remark ‘not valid’
d. The cheque can be honoured

259. The document which can be used only for making local payment is……..
a. A cheque
b. A bill of exchange
c. A banker’s cheque
d. A draft

260. The offence under Sec. 138 is deemed to have been committed if the drawer fails to make payment within………..period from the date of the receipt of notice.
a. 1 Month
b. 40 Days
c. 15 Days
d. 16 Days

261. Not negotiable crossing is a warning to the………..
a. Paying banker
b. Collecting banker
c. Holder
d. (a) and (b) together

262. A Not negotiable crossing restricts ……….of the cheque
a. Transferability
b. Negotiability
c. Neither transferability nor negotiability
d. Both transferability and negotiability

263. The following one is absolutely essential for a special crossing.
a. Two parallel transverse lines
b. Words ‘And Company’
c. Words ‘Not Negotiable’
d. Name of a banker

264. The safest form of crossing is……..
a. General crossing
b. Special crossing
c. Double crossing
d. A/c Payee crossing

265. A cheque which is not crossed is called:
a. Uncrossed cheque
b. Open cheque
c. Order cheque
d. Bearer cheque

266. An order cheque can be converted into a bearer cheque by means of……..
a. Sans recourse endorsement
b. Special endorsement
c. Blank endorsement
d. Sans fairs endorsement

267. Negotiability gives to the transferee……..title of the transferor.
a. The same title
b. No title
c. No better title
d. Better title

268. Endorsement signifies that the………..
a. Endorser has got a good title
b. Endorser’s signature is genuine
c. Previous endorsements are genuine
d. All of the above

269. One of the following endorsements is not a valid one…..
a. Partial endorsement
b. Restrictive endorsement
c. Facultative endorsement
d. Conditional endorsement

270. When garnishee order is issued by the court attaching the account of customer, the banker is called…………….
a. Judgement debtor
b. Judgement creditor
c. Garnishee
d. Garnishor

271. When the amounts stated in words and figures differ, the banker………
a. Can honour the amount in figures
b. Can honour the amount in words
c. Can honour the smaller amount
d. Can dishonour it

272. The best answer for returning a cheque for want of funds in the account is………
a. Refer to drawer
b. Not provided for
c. Exceeds arrangement
d. Not sufficient funds

273. To get statutory protection, paying banker must make:
a. Payment to a holder
b. Payment to a holder in due course
c. Payment in due course
d. Payment to a drawee in case of need

274. Bankers undertake the duty of collection of cheques and bills because……
a. Sec. 131 of the NI Act compels them to do so
b. Sec. 85 of the NI Act compels them to do so
c. They want to do it as a service
d. Collection is a must for a crossed cheque

275. A collecting banker is given protection only when he collects……..
a. A crossed cheque
b. An order cheque
c. A bearer cheque
d. A mutilated cheque

276. Collecting a cheque payable to the firm to the private account of a partner without enquiry constitutes…….
a. Gross negligence
b. Negligence under remote grounds
c. Negligence connected with immediate collection of a cheque
d. Contributory negligence

277. A collecting banker is given the statutory protection only when he acts as…
a. A banker
b. A holder for value
c. A holder in due course
d. An agent

278. The bank which provides long-term finance is…….
a. Exchange banks
b. Investment banks
c. Savings bank

279. The system where two or more banking companies are controlled by one or two individuals is called………..
a. Chain banking
b. Group banking
c. Mixed banking

280. The banks which are engaged in diverse kinds of banking activities are called………
a. Local area bank
b. Narrow banking
c. Universal banking

281. Which banks provide short-term capital to agriculturists?
a. Cooperative bank
b. Land Development banks
c. Central bank

282. Businessmen prefer…..
a. Loan
b. Overdraft
c. Cash credit

283. The most important principle of sound lending is…….
a. Safety
b. Profitability
c. Security

284. Capacity of the borrower is determined by
a. Willingness to repay
b. Viability of the project
c. Managerial ability

285. Discounting of bills of exchange is…..
a. Clean advance
b. Secured advance
c. Neither

286. Neither possession nor ownership is transferred in….
a. Pledge
b. Mortgage
c. Hypothecation

287. A mortgagee can neither sue for foreclosure nor for sale of the property in……………
a. English mortgage
b. Usufructuary mortgage
c. Mortgage by conditional sale

288. A banker’s lien is………..
a. General lien
b. Particular lien
c. Negative lien

289. A pledge can be made in respect of….
a. Shares
b. Building
c. Book debts

290. The rate of interest payable on various deposits is determined by the:
a. Head office of each bank
b. Central Government
c. Reserve Bank of India
d. Indian Banks Association

291. A savings bank A/c in the sole name of a minor can be opened provided he completes…
a. 10 years of age
b. 12 years of age
c. 18 years of age
d. 21 years of age

292. The best suited deposit for a trading community is
a. Savings deposit
b. Fixed deposit
c. Current deposit
d. Recurring deposit