Banking & Financial Awareness Mixed Quiz: Set 22

The correct answer is B, Bengaluru. Canara Bank has its head office at Bengaluru in Karnataka, and its tagline is Together We Can. Option A is wrong, though it is the best distractor, because the bank was founded at Mangaluru on the Karnataka coast, and the name Canara itself comes from that coastal region; the head office, however, is at Bengaluru. Option C is wrong because Chennai is the seat of Indian Bank and Indian Overseas Bank. Option D is wrong because Hyderabad, though a major financial centre, has no public sector bank headquartered in it after the amalgamations of 2019 and 2020. As with Punjab National Bank, the city of origin and the present head office are two different facts, and questions are set on both.

The correct answer is B, Basel. The Bank for International Settlements was set up in 1930 at Basel in Switzerland and still works from there, which is why the capital standards drafted under its roof are called the Basel norms. Option A is wrong because Geneva hosts the World Trade Organization, the World Health Organization and the International Labour Organization, but not the BIS. Option C is wrong because Vienna is the seat of the International Atomic Energy Agency and of OPEC, which have nothing to do with banking supervision. Option D is wrong because Frankfurt is the home of the European Central Bank, a central bank of the euro area and itself a member of the BIS, not its host city. Fix Basel with both the BIS and the Basel Committee.

The correct answer is B, 1966. The ADB was established in 1966 to lend for development in Asia and the Pacific, and India was one of its founding members, which is a fact papers like to pair with the year. Option A is wrong because 1956 is associated in Indian banking history with the nationalisation of life insurance and the second five year plan, not with the ADB. Option C is wrong because 1976 is the year the Regional Rural Banks Act came into force in India, a domestic milestone. Option D is wrong because 1986 saw the founding of the Indira Gandhi National Open University and other national bodies, again unrelated. Remember the sequence 1930 for the BIS, 1944 for Bretton Woods, 1966 for the ADB and 2016 for the AIIB.

The correct answer is B, SBI. Ecowrap is the research report of the State Bank of India, brought out by its economic research department.

Ecowrap is written by the team of the group chief economic adviser at SBI and comments on growth, inflation, bank credit, government finances and the state of households. It is widely quoted in the press because it often carries an early estimate of GDP growth or of the fiscal position before the official figures appear. The edition of May 2020 studied the damage the Covid-19 lockdown was doing to incomes and to economic activity. SBI is the country's largest commercial bank, with its headquarters in Mumbai.

A is wrong: the Reserve Bank publishes its own Monetary Policy Report, Financial Stability Report and Annual Report, not Ecowrap. C is wrong: HDFC Bank brings out no report of this name. D is wrong: nor does ICICI Bank.

Exam tip: Ecowrap belongs to SBI Research, while the best known Reserve Bank reports are the Financial Stability Report and the Monetary Policy Report.

The correct answer is A, Indian Bank and Indian Overseas Bank. Both Indian Bank, whose tagline is Your Own Bank, and Indian Overseas Bank, whose tagline is Good People to Grow With, are headquartered at Chennai, and their similar names make them easy to keep together. Option B is wrong because Canara Bank is headquartered at Bengaluru, not Chennai. Option C is wrong because UCO Bank is headquartered at Kolkata. Option D is wrong because Bank of India is headquartered at Mumbai. The pairing to hold is that Chennai has two public sector banks whose names both begin with the word Indian, which is the quickest check available in the examination hall. Both banks grew out of the banking movement of the Madras Presidency in the early twentieth century, which is why their names and their city coincide, and an examiner will usually pair one of them with a bank from another city to test whether the candidate knows both.

The correct answer is B, Directorate of Enforcement. The Directorate of Enforcement, which works under the Department of Revenue in the Ministry of Finance, investigates contraventions of FEMA, conducts searches and places cases before the Adjudicating Authority. Option A is wrong because the Reserve Bank administers the Act, frames the regulations on capital account transactions, authorises authorised persons and compounds many contraventions, but it is not the investigating agency, and the paper distinguishes administration from enforcement. Option C is wrong because the Central Bureau of Investigation handles offences under the general criminal law and corruption cases, not foreign exchange contraventions. Option D is wrong because SEBI regulates the securities market and has no role in administering or enforcing this Act. Section 37A, added later, lets the Directorate seize assets of equivalent value inside India where foreign exchange is held abroad in breach of the Act.

The correct answer is C, China. The AIIB was proposed by China in 2013 and began operations in January 2016 with its headquarters at Beijing, and China holds the largest share in its capital. Option A is wrong, but only just: India is the second largest shareholder of the AIIB and has been among its largest borrowers, for metro rail, rural roads, power and water supply projects. Option B is wrong because Russia, though a large shareholder, stands below India in the order. Option D is wrong because Japan is not a member of the AIIB at all; Japan and the United States are instead the two largest shareholders of the Asian Development Bank. Hold the pair China first and India second for the AIIB.

The correct answer is C, 25 lakh rupees. Under the 2025 Directions a loan to an individual for educational purposes, including a vocational course, is classified as priority sector lending so long as it does not exceed 25 lakh rupees; the ceiling applies to the loan, not to the fee or the course. Option A is wrong because 10 lakh rupees is the ceiling for a loan to an individual household for a renewable energy installation, such as a rooftop solar system. Option B is wrong because 20 lakh rupees was the earlier education ceiling and was raised, so it is the classic trap in this question. Option D is wrong because 50 lakh rupees is the housing loan ceiling for a centre with a population of 50 lakh and above, where the cost of the dwelling unit must also stay within 63 lakh rupees.

The correct answer is C, Pune. Bank of Maharashtra is headquartered at Pune, and its tagline is One Family One Bank. Option A is wrong, and it is the trap this question is built on, because Mumbai is the capital of Maharashtra and the financial capital of the country, so a candidate who reasons from the name of the bank alone will choose it; Mumbai holds four other public sector banks but not this one. Option B is wrong because Nagpur is the second capital of the state, where the winter session of the legislature is held, but has no bank headquartered in it. Option D is wrong because Nashik, though the home of the India Security Press and a currency note press, is not the seat of this bank.

The correct answer is D, Large amounts of loan. Microfinance means small loans to poor households that banks treat as too risky, so a large loan is the opposite of the idea. The Reserve Bank defines a microfinance loan as a collateral-free loan given to a household below a set annual income, and the whole model rests on small, frequent repayments rather than big sums. Option A is a real principle, because the borrower has no land or gold to pledge and the group's promise takes the place of security. Option B is a real principle: members of a joint liability group watch each other's repayment, and this peer pressure is why recovery rates stay high. Option C is a real principle, since self-help groups are built mainly around women, who save and repay more regularly and spend more on the family. NABARD's SHG-Bank Linkage Programme of 1992 carried this model across India. Exam tip: microfinance — small, collateral-free, group-guaranteed loans, mostly to women.

The correct answer is D, 2016. The bank opened for business in January 2016 at Beijing, after its articles of agreement had been signed and ratified by the founding members. Option A is wrong because 2013 is the year China proposed the bank, which is the proposal and not the start of operations. Option B is wrong because 2014 is the year the BRICS countries agreed to set up the New Development Bank at the Fortaleza summit, and the year the AIIB memorandum was signed, but not the year it began lending. Option C is wrong because 2015 is the year the New Development Bank began work, which is a neighbouring fact often swapped with this one. Keep 2015 for the NDB and 2016 for the AIIB.

The correct answer is C, 1955. The All India Rural Credit Survey Committee under A. D. Gorwala reported that rural credit needed a bank with branches across the country and in state partnership. Parliament passed the State Bank of India Act, 1955, and on 1 July 1955 the Imperial Bank of India became the State Bank of India.

Option A, 1935, is the year the Reserve Bank began operations and took over from the Imperial Bank the management of government accounts and public debt, which is a related but different event. Option B, 1949, is the year the Reserve Bank passed into public ownership and the Banking Regulation Act was enacted. Option D, 1959, is the year of the State Bank of India (Subsidiary Banks) Act, under which the banks of the former princely states became subsidiaries of the State Bank; they were merged into the parent on 1 April 2017.

The correct answer is B, State Bank of India. The State Bank of India, the largest bank in the country, is known by the line The Banker to Every Indian, and it has also used Pure Banking, Nothing Else. Option A is wrong because Punjab National Bank uses The Name You Can Bank Upon. Option C is wrong because Union Bank of India uses Good People to Bank With, a line often confused with the Good People to Grow With of Indian Overseas Bank, so those two should be learnt as a pair. Option D is wrong because Central Bank of India, despite its name, is not the central bank of the country; the central bank is the Reserve Bank of India, and that confusion is itself a favourite question.

The correct answer is A. Under the Regional Rural Banks Act, 1976 the issued capital of an RRB is shared in the proportion of 50 per cent by the Central Government, 35 per cent by the sponsor commercial bank and 15 per cent by the State Government concerned. The sponsor bank also provides managerial help and training, which is why its share is the second largest.

Option B swaps the Centre and the sponsor bank, making the sponsor the largest shareholder, which is not the case. Option C swaps the sponsor bank and the State Government and leaves the sponsor with the smallest share, which would defeat the purpose of sponsorship. Option D puts NABARD in place of the Central Government; NABARD supervises and refinances RRBs but does not hold their share capital in this pattern. The order to memorise is simply 50, 35, 15, in the sequence Centre, sponsor, State.

The correct answer is A, Shanghai. The New Development Bank works from Shanghai in China, a decision taken when the bank was being set up, in return for which the first regional centre was given to another member. Option B is wrong because Beijing is the seat of the Asian Infrastructure Investment Bank, and the two banks are commonly confused for that reason. Option C is wrong because India, although a founding member with an equal share and the first presidency, did not get the headquarters. Option D is wrong because Johannesburg in South Africa hosts the Africa Regional Centre of the bank, which is its first regional office but not its headquarters. Remember Shanghai for the NDB and Johannesburg for its African arm. Papers also ask for its first regional office, which is the Africa Regional Centre at Johannesburg.

The correct answer is A, New Bank of India. New Bank of India, one of the six banks nationalised in 1980, ran into heavy losses and was amalgamated with Punjab National Bank in 1993. It was the first time one nationalised bank was merged into another, and for years it stood alone as an example of consolidation in the public sector.

Option B, Oriental Bank of Commerce, was indeed merged into Punjab National Bank, but in the round that took effect on 1 April 2020, not in 1993. Option C, United Bank of India, was merged into Punjab National Bank in that same 2020 round. Option D, Nedungadi Bank, was a small private bank of Kerala that was merged into Punjab National Bank in 2003. All three wrong options did eventually join Punjab National Bank, so only the year decides the answer.

The correct answer is B, Lucknow. SIDBI, the Small Industries Development Bank of India, is headquartered at Lucknow in Uttar Pradesh, and it is the one major development financial institution not based in Mumbai, which is precisely why it is asked so often. Option A is wrong because Mumbai is the headquarters of NABARD, the National Bank for Agriculture and Rural Development, and of the Export-Import Bank of India, so a candidate who assumes all such institutions are in Mumbai will be caught here. Option C is wrong because New Delhi holds Punjab National Bank and Punjab and Sind Bank but no development bank of this kind. Option D is wrong because Kanpur, though a large industrial city of the same state, is not the seat of SIDBI.

The correct answer is B, the Fortaleza summit in Brazil. The sixth BRICS summit was held at Fortaleza in July 2014, and the agreement establishing the New Development Bank was signed there, along with the treaty for the Contingent Reserve Arrangement. Option A is wrong because the Durban summit of 2013 only asked for the idea of a development bank to be worked out further, without signing it into being. Option C is wrong because the Ufa summit of 2015 followed the founding and reviewed the bank's start of work. Option D is wrong because the Goa summit of 2016 is remembered for the declaration on terrorism and for the BRICS and BIMSTEC outreach. Fix Fortaleza and 2014 with the NDB. Note also that the same declaration named the first president and the first regional centre of the bank.

The correct answer is A, Punjab National Bank. The Name You Can Bank Upon is the line by which Punjab National Bank is best known, and the bank is headquartered at New Delhi. Option B is wrong because Canara Bank, based at Bengaluru, uses Together We Can. Option C is wrong because UCO Bank, based at Kolkata, uses Honours Your Trust, and the two lines are similar enough in sense that they are often interchanged. Option D is wrong because Bank of India, based at Mumbai, uses Relationship Beyond Banking. A bank may change its tagline when its advertising changes, but these are the lines by which each bank has long been known and on which examination questions have been set. Learning the tagline together with the head office, as in Punjab National Bank at New Delhi with The Name You Can Bank Upon, means one effort answers two kinds of question.

The correct answer is B, K. V. Kamath. The first presidency of the New Development Bank went to India, and K. V. Kamath, formerly of ICICI Bank, took charge when the bank began work in 2015, the presidency afterwards rotating among the member countries. Option A is wrong because Jin Liqun of China was the first president of the Asian Infrastructure Investment Bank, a neighbouring fact that is often swapped with this one. Option C is wrong because Raghuram Rajan was Governor of the Reserve Bank of India and before that chief economist of the International Monetary Fund. Option D is wrong because Montek Singh Ahluwalia served as deputy chairman of the Planning Commission. Keep Kamath with the NDB and Jin Liqun with the AIIB.