MCQ on Banking Structure in India

Correct Answer: C. Scheduled Banks. Scheduled banks in India are those listed under the second schedule of the RBI Act, 1934.

Correct Answer: 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 the following requirements : – A bank must have a paid reserve capital of 5 lakh rupees and ensure that its affairs are not conducted in a manner harmful to the interest of its depositors to be considered a Scheduled Bank.

Correct Answer: B. Four. India has four non-scheduled banks in operation.
◦ Akhand Anand Cooperative Bank Ltd
◦ Alavi Co-Operative Bank Limited
◦ Amarnath Cooperative Bank Ltd
◦ Amod Nagrik Sahakari Bank Limited

Correct Answer: B. Banking Regulation Act, 1949. Non-Scheduled Banks are defined in the Banking Regulation Act, 1949, under clause (c) of Section 5.

Correct Answer: D. 5 lakh rupees. A bank must have a paid reserve capital of 5 lakh rupees to be considered a Scheduled Bank in India.

Correct Answer: 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.

Correct Answer: C. Non-Scheduled Banks. Non-Scheduled Banks are not eligible for loans from RBI for their day-to-day general requirements.

Correct Answer: D. Only during emergency conditions. Non-Scheduled Banks can be granted loans from RBI only in emergency conditions.

Correct Answer: B. Clause (c) of Section 5 of the Banking Regulation Act, 1949. Clause (c) of Section 5 of the Banking Regulation Act, 1949, defines the banks that are not included in the RBI Act, 1934.

Correct Answer: 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 of the RBI Act, 1934.

Correct Answer: B. Commercial and Cooperative Banks. Scheduled banks in India are further classified into commercial and cooperative banks.

Correct Answer: B. Because of the distinct statutes governing it. The State Bank of India is recognized as a separate category of SCBs due to the distinct statutes, such as the SBI Act, 1955, and the SBI Subsidiary Banks Act, 1959, that govern it.

Correct Answer: B. Public Sector Banks. Nationalized banks and the State Bank of India together form the public sector banks group in India.

Correct Answer: A. Incorporated according to the RBI guidelines in 1993. Private sector banks in India include both old private sector banks and the new generation private sector banks, which were incorporated according to the revised guidelines issued by the RBI in 1993 regarding the entry of private sector banks.

Correct Answer: B. Through their representative offices. Foreign banks are present in India either through the complete branch/subsidiary route or through their representative offices.

Correct Answer: C. Public Sector Banks are characterized by significant government ownership, reflecting a direct stake in the banking sector.

Correct Answer: C. The size of a bank, in terms of assets or branches, is not a primary determinant of its classification as Public, Private, or Foreign.

Correct Answer: B. Established in 1976 to facilitate rural credit. Regional Rural Banks (RRBs) were established in 1976 with the primary objective of ensuring sufficient institutional credit for agriculture and other rural sectors.

Correct Answer: B. Limited to specific states. The area of operation of RRBs is limited to the area as notified by the Government of India, covering one or more districts in the State.

Correct Answer: A. Government of India and Sponsor Banks. RRBs are jointly owned by the Government of India, the concerned State Government, and Sponsor Banks, which include 27 scheduled commercial banks and one State Cooperative Bank.

Correct Answer: C. 50%, 15%, 35%. The issued capital of a Regional Rural Bank is shared by the owners in the proportion of 50% by the Government of India, 15% by the concerned State Government, and 35% by Sponsor Banks.

Correct Answer: B. Prathama Bank. Prathama Bank, located in the city of Moradabad in Uttar Pradesh, is the first Regional Rural Bank in India.

Correct Answer: C. Owned by members who are also customers. Co-operative banks belong to their members, who are simultaneously the owners and customers of the bank.

Correct Answer: D. By persons from the same local or professional community or with a common interest. Co-operative banks are often created by persons belonging to the same local or professional community or sharing a common interest.

Correct Answer: B. Limited banking products. Co-operative banks generally provide their members with a limited range of banking and financial services.

Correct Answer: C. Agriculture-related activities. Co-operative banks are the primary financiers of agricultural activities, some small-scale industries, and self-employed workers.

Correct Answer: B. No-profit no-loss. Co-operative banks function on the basis of “no-profit no-loss.”