Banking Structure in India is the cornerstone topic for aspirants preparing for banking examinations. In this guide, we cover the 27 most important questions. This comprehensive mock test is specifically designed for IBPS PO, SBI PO, RBI Grade B, and RRB Assistant exams to help you master the concepts quickly.
Why This Banking Structure in India Test Matters?
Exam Weightage: This topic forms the core of the General Awareness section in Mains examinations for PO and Clerk roles. It is also a favorite topic for interviewers in IBPS and SBI interviews.
Difficulty: Moderate to Hard (Concept-based).
Recommended: Master the basics with this [INTERNAL_LINK]Detailed Banking Structure in India Syllabus[/INTERNAL_LINK].
Practice Banking Structure in India (Live Mock Test)
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Banking Structure in India – 27 Most Expected Questions
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Which banks in India are listed under the second schedule of the RBI Act, 1934?
Explanation
Correct: C
Scheduled Banks. Scheduled banks in India are those listed under the second schedule of the RBI Act, 1934. Understanding this definition is fundamental to studying the Banking Structure in India.
Scheduled Banks. Scheduled banks in India are those listed under the second schedule of the RBI Act, 1934. Understanding this definition is fundamental to studying the Banking Structure in India.
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What are the two conditions Under section 42 (6) (a) of the RBI Act, a bank must satisfy to be considered a Scheduled Bank?
Explanation
Correct: B
Paid reserve capital of 5 lakh rupees and conduct not harmful to depositors’ interests. Under section 42 (6) (a) of the RBI Act, a bank is included in the second schedule if it satisfies these requirements. This regulatory requirement is a key pillar of the Banking Structure in India.
Paid reserve capital of 5 lakh rupees and conduct not harmful to depositors’ interests. Under section 42 (6) (a) of the RBI Act, a bank is included in the second schedule if it satisfies these requirements. This regulatory requirement is a key pillar of the Banking Structure in India.
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How many non-scheduled banks are currently in operation in India?
Explanation
Correct: B
Four. India has four non-scheduled banks in operation: Akhand Anand Cooperative Bank Ltd, Alavi Co-Operative Bank Limited, Amarnath Cooperative Bank Ltd, and Amod Nagrik Sahakari Bank Limited. These entities are distinct from Scheduled Commercial Banks but remain part of the overall Banking Structure in India.
Four. India has four non-scheduled banks in operation: Akhand Anand Cooperative Bank Ltd, Alavi Co-Operative Bank Limited, Amarnath Cooperative Bank Ltd, and Amod Nagrik Sahakari Bank Limited. These entities are distinct from Scheduled Commercial Banks but remain part of the overall Banking Structure in India.
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Which act defines the banks that are not included in the Reserve Bank of India (RBI) Act, 1934, and are thus considered Non-Scheduled Banks?
Explanation
Correct: B
Banking Regulation Act, 1949. Non-Scheduled Banks are defined in the Banking Regulation Act, 1949, under clause (c) of Section 5. Legal definitions like this shape the regulatory framework of the Banking Structure in India.
Banking Regulation Act, 1949. Non-Scheduled Banks are defined in the Banking Regulation Act, 1949, under clause (c) of Section 5. Legal definitions like this shape the regulatory framework of the Banking Structure in India.
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What is the minimum paid reserve capital required for a bank to be considered a Scheduled Bank in India?
Explanation
Correct: D
5 lakh rupees. A bank must have a paid reserve capital of 5 lakh rupees to be considered a Scheduled Bank. This capital requirement ensures stability within the Banking Structure in India.
5 lakh rupees. A bank must have a paid reserve capital of 5 lakh rupees to be considered a Scheduled Bank. This capital requirement ensures stability within the Banking Structure in India.
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What is the significance of being a Scheduled Bank in relation to the RBI Act, 1934?
Explanation
Correct: B
Eligibility for loans from RBI. Scheduled Banks are eligible for loans from the Reserve Bank of India (RBI) as per the RBI Act 1934. This liquidity access is a major advantage within the Banking Structure in India.
Eligibility for loans from RBI. Scheduled Banks are eligible for loans from the Reserve Bank of India (RBI) as per the RBI Act 1934. This liquidity access is a major advantage within the Banking Structure in India.
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Which banks are not eligible for loans from RBI for their day-to-day general requirements?
Explanation
Correct: C
Non-Scheduled Banks. Non-Scheduled Banks are not eligible for loans from RBI for their day-to-day general requirements, which limits their role in the broader Banking Structure in India.
Non-Scheduled Banks. Non-Scheduled Banks are not eligible for loans from RBI for their day-to-day general requirements, which limits their role in the broader Banking Structure in India.
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Under what circumstances can Non-Scheduled Banks be granted loans from the Reserve Bank of India?
Explanation
Correct: D
Only during emergency conditions. Non-Scheduled Banks can be granted loans from RBI only in emergency conditions, highlighting the tiered support system in the Banking Structure in India.
Only during emergency conditions. Non-Scheduled Banks can be granted loans from RBI only in emergency conditions, highlighting the tiered support system in the Banking Structure in India.
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Which section of the Banking Regulation Act, 1949, defines the banks that are not included in the RBI Act, 1934?
Explanation
Correct: B
Clause (c) of Section 5 of the Banking Regulation Act, 1949. This clause defines the banks that are not included in the RBI Act, 1934, often related to the Cooperative Banks Structure. It is a crucial legal detail for understanding the Banking Structure in India.
Clause (c) of Section 5 of the Banking Regulation Act, 1949. This clause defines the banks that are not included in the RBI Act, 1934, often related to the Cooperative Banks Structure. It is a crucial legal detail for understanding the Banking Structure in India.
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What is the primary criterion for a bank to be classified as a Non-Scheduled Bank in India?
Explanation
Correct: D
Not listed in the second schedule of the RBI Act, 1934. Non-Scheduled Banks are those that do not come under the regulation listed in the second schedule, a definition that separates them from the mainstream Banking Structure in India.
Not listed in the second schedule of the RBI Act, 1934. Non-Scheduled Banks are those that do not come under the regulation listed in the second schedule, a definition that separates them from the mainstream Banking Structure in India.
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What is the primary classification of scheduled banks in India?
Explanation
Correct: B
Commercial and Cooperative Banks. Scheduled banks in India are further classified into commercial and cooperative banks, forming the two main branches of the Banking Structure in India.
Commercial and Cooperative Banks. Scheduled banks in India are further classified into commercial and cooperative banks, forming the two main branches of the Banking Structure in India.
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Why is the State Bank of India recognized as a separate category of Scheduled Commercial Banks (SCBs)?
Explanation
Correct: B
Because of the distinct statutes governing it. The SBI is recognized as a separate category due to the distinct statutes, such as the SBI Act, 1955. While it is a key part of the Public Sector Banks List, its unique legal status is vital to the Banking Structure in India.
Because of the distinct statutes governing it. The SBI is recognized as a separate category due to the distinct statutes, such as the SBI Act, 1955. While it is a key part of the Public Sector Banks List, its unique legal status is vital to the Banking Structure in India.
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Which group in India includes Nationalized banks and the State Bank of India?
Explanation
Correct: B
Public Sector Banks. Nationalized banks and the State Bank of India together form the public sector banks group, which dominates the Banking Structure in India.
Public Sector Banks. Nationalized banks and the State Bank of India together form the public sector banks group, which dominates the Banking Structure in India.
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What characterizes private sector banks in India?
Explanation
Correct: A
Incorporated according to the RBI guidelines in 1993. Private sector banks include both old and new generation banks incorporated under these guidelines, adding diversity to the Banking Structure in India.
Incorporated according to the RBI guidelines in 1993. Private sector banks include both old and new generation banks incorporated under these guidelines, adding diversity to the Banking Structure in India.
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How are foreign banks present in India?
Explanation
Correct: B
Through their representative offices. Foreign banks are present in India either through the complete branch/subsidiary route or through their representative offices, integrating global finance into the Banking Structure in India.
Through their representative offices. Foreign banks are present in India either through the complete branch/subsidiary route or through their representative offices, integrating global finance into the Banking Structure in India.
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Which of the following types of banks has the majority of its share capital owned by the Government of India?
Explanation
Correct: C
Public Sector Banks. These banks are characterized by significant government ownership, reflecting a direct sovereign stake in the Banking Structure in India.
Public Sector Banks. These banks are characterized by significant government ownership, reflecting a direct sovereign stake in the Banking Structure in India.
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Which of the following factors typically does NOT influence the classification of a bank as Public Sector, Private Sector, or Foreign?
Explanation
Correct: C
Size of the bank. The size of a bank, in terms of assets or branches, is not a primary determinant of its classification as Public, Private, or Foreign within the Banking Structure in India.
Size of the bank. The size of a bank, in terms of assets or branches, is not a primary determinant of its classification as Public, Private, or Foreign within the Banking Structure in India.
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When were Regional Rural Banks (RRBs) established in India, and what is their primary objective?
Explanation
Correct: B
Established in 1976 to facilitate rural credit. RRBs were established with the primary objective of ensuring sufficient institutional credit for agriculture, a critical component of the rural Banking Structure in India.
Established in 1976 to facilitate rural credit. RRBs were established with the primary objective of ensuring sufficient institutional credit for agriculture, a critical component of the rural Banking Structure in India.
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What is the area of operation of Regional Rural Banks (RRBs) in India?
Explanation
Correct: B
Limited to specific states. The area of operation of RRBs is limited to the area as notified by the Government of India, making them regionally focused entities in the Banking Structure in India.
Limited to specific states. The area of operation of RRBs is limited to the area as notified by the Government of India, making them regionally focused entities in the Banking Structure in India.
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Who are the joint owners of Regional Rural Banks (RRBs) in India?
Explanation
Correct: A
Government of India and Sponsor Banks. RRBs are jointly owned by the Government of India, the concerned State Government, and Sponsor Banks. This joint ownership is unique to the Banking Structure in India.
Government of India and Sponsor Banks. RRBs are jointly owned by the Government of India, the concerned State Government, and Sponsor Banks. This joint ownership is unique to the Banking Structure in India.
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In what proportion is the issued capital of a Regional Rural Bank (RRB) shared among its owners?
Explanation
Correct: C
50%, 15%, 35%. The issued capital is shared by the Government of India (50%), State Government (15%), and Sponsor Banks (35%). This ratio defines the funding model of RRBs in the Banking Structure in India.
50%, 15%, 35%. The issued capital is shared by the Government of India (50%), State Government (15%), and Sponsor Banks (35%). This ratio defines the funding model of RRBs in the Banking Structure in India.
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Which bank holds the distinction of being the first Regional Rural Bank in India?
Explanation
Correct: B
Prathama Bank. Prathama Bank, located in Moradabad, Uttar Pradesh, is the first RRB. Its establishment marked a historic shift in the rural Banking Structure in India.
Prathama Bank. Prathama Bank, located in Moradabad, Uttar Pradesh, is the first RRB. Its establishment marked a historic shift in the rural Banking Structure in India.
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What distinguishes co-operative banks in terms of ownership and membership?
Explanation
Correct: C
Owned by members who are also customers. Co-operative banks belong to their members, who are simultaneously the owners and customers, a model that supports the grassroots Banking Structure in India.
Owned by members who are also customers. Co-operative banks belong to their members, who are simultaneously the owners and customers, a model that supports the grassroots Banking Structure in India.
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How are co-operative banks often established in terms of community or interest?
Explanation
Correct: D
By persons from the same local or professional community or with a common interest. This community-centric approach helps serve specific demographics within the Banking Structure in India.
By persons from the same local or professional community or with a common interest. This community-centric approach helps serve specific demographics within the Banking Structure in India.
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What is a characteristic feature of the banking products provided by co-operative banks?
Explanation
Correct: B
Limited banking products. Co-operative banks generally provide a limited range of services compared to commercial banks, differentiating their role in the Banking Structure in India.
Limited banking products. Co-operative banks generally provide a limited range of services compared to commercial banks, differentiating their role in the Banking Structure in India.
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In which sector do co-operative banks primarily function as financiers?
Explanation
Correct: C
Agriculture-related activities. Co-operative banks are the primary financiers of agricultural activities and small-scale industries, supporting the agrarian base of the Banking Structure in India.
Agriculture-related activities. Co-operative banks are the primary financiers of agricultural activities and small-scale industries, supporting the agrarian base of the Banking Structure in India.
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What principle do co-operative banks follow in their functioning?
Explanation
Correct: B
No-profit no-loss. Co-operative banks function on the basis of “no-profit no-loss,” prioritizing service to members over commercial gain in the Banking Structure in India.
No-profit no-loss. Co-operative banks function on the basis of “no-profit no-loss,” prioritizing service to members over commercial gain in the Banking Structure in India.
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⚡ Quick Revision: Key Facts for Banking Structure in India
Scheduled Status: Defined under the 2nd Schedule of the RBI Act, 1934.
Capital Requirement: A bank needs a paid-up reserve capital of Rs. 5 Lakhs to be Scheduled.
Non-Scheduled Banks: Governed by Clause (c) of Section 5 of the Banking Regulation Act, 1949.
RRB Ownership: Shared 50:15:35 between Central Govt, State Govt, and Sponsor Bank.
First RRB: Prathama Bank, established in Moradabad, Uttar Pradesh.
Cooperative Principle: operates on a “No-profit No-loss” basis.
❓ Frequently Asked Questions
Why is Banking Structure in India critical for Banking Exams?
It is a high-scoring area in the General Awareness section. Mastering Banking Structure in India ensures better performance in the objective papers of IBPS and SBI exams.
Does this test cover the full syllabus?
Yes, these Banking Structure in India questions cover the most repeated concepts found in previous years’ papers of PO and Clerk exams.
What is the difference between Scheduled and Non-Scheduled Banks?
Scheduled banks are listed in the 2nd Schedule of the RBI Act 1934, while Non-Scheduled banks are not. This is a primary distinction in the Banking Structure in India.