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1 IBPS PROBATIONARY OFFICERS Banking Knowledge Secondary Services of Banks Banks' primary service or business is collecting deposits and lending them. In order to support this primary service banks also provide supporting services to deposit and advances products. This also generates some income to banks in the form of commission or service charges. Remittances: Remitting money from one bank branch to another bank branch or its own bank branches is called Remittances. This can be done through various means like NEFT, RTGS, Demand Draft, Bankers' Cheque. In olden days banks used to remit money through Mail Transfer (MT), Telegraphic Transfer (TT) etc. For international transactions banks use Outward Remittance and Travelers' Cheque (TC). National Electronic Funds Transfer (NEFT): This system was introduced by RBI in order to transfer funds within the banking system through electronic format. Under this system, an individual or a business entity can transfer funds from a paisa to any amount as it has no upper limit. This is a reliable, secure, efficient and economical system of funds transfer and clearing in banking system. A service charge is collected per transaction from the customer. Real Time Gross Settlement System (RTGS): This is also an Electronic Fund Transfer System like NEFT. But an important difference is seen in settlement. This is settled on gross basis at real time. Each and every remittance transaction will be settled individually. These transactions are irrevocable. Each participating bank need to open an account with RBI for settlement of funds. The settlement is done to the banks' account with RBI on individual transaction basis. For both NEFT and RTGS, we need have IFSC code of beneficiary in order to remit the funds. Bankers' Cheque (BC) and Demand Draft (DD): This is also an oldest method of fund transfer with confirmed and secure way of transfer of funds. These are the document based negotiable instruments used to transfer funds. An applicant needs to purchase a bankers cheque or demand draft from a bank in order to pay the payee on the same bank's different branch. R

2 Bankers' Cheque is issued on its own branch where as demand draft is issued on other branches. Bankers' cheque is also called as pay order. The life of the BC is of three months from the date of issue and the life of DD is six months from the date of issue. And it can be revalidated. BC and DD can be purchased across the counters through cash but as per RBI anti money laundering and income tax provisions Rs and above need to be routed through bank account only. Commission is the income generation from DD and BC / PO to Banks. These types of services are being used less nowadays due to introduction of online payment system. 1. Where is the head office of Syndicate Bank located? a) Bangalore b) Manipal c) New Delhi d) Mumbai e) Kolkata 2. NABARD support lending to farmers, rural artisans and other non farmers in rural areas through... a) Co-operative Banks b) Regional Rural Banks c) Land Development Banks d) Scheduled Commercial Banks e) All the Above 3. Identify the macro economic policy/ policies of India... a) Monetary policy b) Fiscal policy c) Regulatory policy d) Only a and b 4. RBI uses bank rate in order to control... a) Money supply, volume of bank credit and cost of bank credit. b) Liquidity c) Cash holdings of banks d) Financial position of banks 5. What are the steps taken by RBI, in order to meet demand and time liabilities of banks in time? a) Banks are asked to keep mandatory regulatory cash reserve with RBI b) Banks are asked to maintain CRR c) Both a and b as they are same d) Banks are asked to keep enough cash in cash counters

3 6. India's own payment gate way 'RuPay' works in which of the following channel/s? a) Automated Teller Machines b) Point of Sales c) Online Sales d) All of the Above 7. Monetary policy is used by RBI for controlling... a) Inflation or deflation b) Exports or imports c) Indian rupee or foreign currency d) State or Central Government 8. Identify the difference between commercial paper and certificate of deposit... a) Certificate of deposit is issued at discount while commercial paper at face value b) Certificate of deposit is a financial instrument while commercial paper is a financial statement c) Certificate of deposit is issued by banks while commercial paper is issued by firms or public limited companies d) All the above 9. When does money market is called as 'Tight'? a) When the call money rate is low b) When the call money rate is high c) When money availability in the market is very high d) When participants in the money market are ready to lend 10. If a bank needs to attract Provident Fund Deposits, what are the criteria that banks must possess? a) Profitability in preceding 3 years b) Minimum of Rs.200 crores as net worth c) Capital adequacy of 9% d) All the above

4 11. If the stock markets are declining then it is called as... a) Bull run b) Down run c) Bear run d) Stage 12. A promissory note that is not secured by any collateral or not secured by a mortgage or lien marked on any property is... instrument. a) Debenture b) Bill of exchange c) Commercial bill d) Currency bill 13. What does RBI do if a Re.1 note is issued by Government of India? a) RBI object the issuance b) RBI put into circulation c) RBI converts Re.1 in to higher denomination of Rs.10 and more. d) RBI asks banks to not to support for circulation 14. RBI issue currency rupee notes on bases of... a) By holding minimum value of gold coins and bullion b) By holding minimum foreign securities as a part of the total approved assets c) By holding minimum amount of commodities which are trading in commodity exchanges d) Only a and b e) All the above 15. Which of the following entities are applicable for the new listing obligations and disclosure requirements of SEBI regulations, 2014? a) Listing of debentures b) Listing of bonds c) All listed companies d) All the above 16. National Payments Corporation of India (NPCI) is being used by banks for... a) Remittance b) Clearing and settlement c) Payments and settlements d) Advisory service

5 17. NOSTRO account means... a) An account opened by foreign citizens other than NRIs in India with Indian banks in INR for their expenses in India. b) An account opened by foreign citizens other than NRIs in India with foreign banks in foreign currency to convert Indian rupee to that currency and remit back to their own country. c) An account opened by an Indian bank in the foreign countries in their banks and in that country currency for settlement in that country's currency. d) An account opened by a foreign bank in India with their corresponding banks in INR for settlements in INR. 18. What kind of Treasury Bills (T-Bills) is/ are issued by State Government? a) No Treasury Bills issued by State Government b) days c) 91 - days d) days 19. Pick the odd one out from the following about Bharat Bill Payment System (BBPS). a) BBPS is a unified bill payment system across the country. b) It will be setting up the standards in operations related to payments, clearance, and settlements. c) G. Padmanabhan committee had provided a report on feasibility of Bharat Bill Payment System (BBPS). d) Payment gateways, service providers, banks, and agents will be participants in this system. 20. Electronic fund transfers like RTGS and NEFT are operated and maintained by... a) National Payments Corporation of India (NPCI) b) Bharat Bill Payment System (BBPS) c) Reserve Bank of India (RBI)

6 d) Clearing Corporation of India Limited (CCIL) 21. Identify the Basel III norms from following that, recently RBI has extended the timeline for implementation for banks in India... a) Minimum regulatory capital requirement b) Market discipline c) Holding the minimum capital to risk weighted assets ratio to 10.25% d) Leverage ratio to 3% e) All the above 22. Identify the odd one out from the following benefits of RTGS. a) Settlement is immediate b) Suited for only lower value transactions c) Lowers the settlement risk d) Avoids credit risk while settlement e) Settled at real time 23. Who all can hire a locker in a bank? a) Individuals b) Limited companies and societies c) Specified associations d) Two persons jointly e) All the above 24. Expand IFSC... a) Indian Financial System Code b) Indian Financial Services Code c) International Financial Service Code d) Interbank Fund Service Code e) Indian Financial Security Code 25. Which among the following is known as pre paid negotiable instrument? a) Cheque b) Promissory note c) Bankers cheque/ Pay order d) Fixed deposit KEY 1-b; 2-e; 3-d; 4-a; 5-c; 6-d; 7-a; 8-d; 9-b; 10-d; 11-c; 12-a; 13-b; 14-d; 15-d; 16-b; 17-c; 18-a; 19-e; 20-c; 21-e; 22-b; 23-e; 24-a; 25-c. Writer : S. Rudranand