Banking & Financial Awareness GK Questions with Answers – Page 2

The correct answer is A, Allahabad Bank. It was founded in 1865 and is remembered as the oldest joint stock bank in India, a joint stock bank being one owned by shareholders rather than by a partnership of agency houses. The presidency banks were older but were chartered institutions of the East India Company rather than ordinary joint stock companies.

Option B, Bank of Baroda, was founded in 1908 by Maharaja Sayajirao Gaekwad III of Baroda, more than forty years later. Option C, Yes Bank, belongs to the generation of private banks licensed after the reforms of the 1990s and began business in 2004, so it cannot be the oldest anything. Option D, Punjab National Bank, was registered in 1894 and opened at Lahore; it holds a different distinction, that of the first bank floated with wholly Indian capital and Indian management, and examiners often swap the two claims in the options.

The correct answer is A, 1969. On 19 July 1969 the Government of India issued an ordinance taking over the fourteen largest Indian scheduled commercial banks, those whose deposits stood at ₹50 crore or more. Indira Gandhi held the Finance portfolio along with the Prime Minister's office at the time, and the stated purpose was to direct credit to agriculture, small industry and the unbanked districts.

Option B, 1970, is the year the Banking Companies (Acquisition and Transfer of Undertakings) Act was passed to replace the ordinance after the Supreme Court struck it down, which is why the year is a favourite distractor. Option C, 1972, belongs to no step in the nationalisation story. Option D, 1950, is far too early; in that year the Reserve Bank had been in public ownership for barely a year and commercial banking was still entirely private. The second round of nationalisation, of six banks, came on 15 April 1980.

The correct answer is B, Immediate Payment Service. IMPS is an interbank money transfer service run by the National Payments Corporation of India, launched in November 2010. Its great advantage is that it works round the clock, on holidays and at night, and the money reaches the beneficiary within seconds. A transfer can be made using the account number with the IFSC code, or using the mobile number with the MMID, and it can be started from mobile banking, internet banking, an ATM or a branch. NPCI, set up in 2008 as an umbrella body for retail payments, also runs UPI, RuPay, NACH, AePS and FASTag. Option A is wrong because the letter S stands for service, not sector. Option C is wrong for the same reason. Option D is wrong because the first word is immediate, not instant. Exam tip: NEFT and RTGS are run by the RBI, while IMPS and UPI are run by NPCI; RTGS is meant for amounts of two lakh rupees and above.

The correct answer is A, Kolkata. Bandhan began in 2001 at Kolkata as a microfinance body serving poor women in eastern India, and its head office has stayed in that city. In April 2014 the Reserve Bank gave in-principle approval for a universal bank to just two applicants - Bandhan Financial Services and IDFC Limited - out of twenty-five who applied, and Bandhan Bank opened for business in August 2015. It was the first bank of its kind to be set up in eastern India after independence, and the first microfinance lender in the country to turn into a full-service bank. Option B is wrong because Mumbai houses the Reserve Bank and many private banks, but not Bandhan. Option C is wrong because Pune is the home of Bank of Maharashtra. Option D is wrong because Lucknow has no connection with Bandhan. Exam tip: 2014 universal bank licences - Bandhan of Kolkata and IDFC; both began operations in 2015.

The correct answer is A, Maharashtra. The Industrial Development Bank of India has its head office in Mumbai, the capital of Maharashtra, at the IDBI Tower in Cuffe Parade. IDBI was set up in 1964 by an Act of Parliament as a wholly owned subsidiary of the Reserve Bank of India, to give long-term finance to industry. It was transferred to the Government of India in 1976, turned into a banking company in 2004, and reclassified by the RBI as a private sector bank in 2019 after the Life Insurance Corporation took a majority stake in it. Option B is wrong because West Bengal's Kolkata is the home of UCO Bank and Bandhan Bank, not IDBI. Option C is wrong because Karnataka holds Canara Bank at Bengaluru and Karnataka Bank at Mangaluru. Option D is wrong because Haryana has no such national financial institution's head office. Exam tip: Mumbai holds the RBI, SEBI, IDBI, the State Bank of India and both stock exchanges, which is why it is called the financial capital of India.

The correct answer is B, National Payments Corporation of India. NPCI is the umbrella organisation that runs India's retail payment and settlement systems. It was set up in 2008 by the Reserve Bank of India and the Indian Banks' Association under the Payment and Settlement Systems Act, 2007, and works as a not-for-profit company owned by banks, with its head office in Mumbai. UPI, RuPay, IMPS, AePS, BHIM, NACH, the National Electronic Toll Collection behind FASTag and the cheque truncation system are all NPCI platforms, which is why nearly every digital retail payment in the country passes through it. A is wrong because the word in the name is Corporation, not Consortium. C is wrong because a piracy council has nothing to do with payments; it is an invented expansion. D is wrong for the same reason, as no National Protection Council runs payment systems. Exam tip: NPCI - set up in 2008 by RBI and IBA, based in Mumbai, and the operator of UPI, RuPay, IMPS and NACH.