1. Which of the following is a key feature of bank remittances?
A. They are only used for international transfers
B. They can be issued only to account holders
C. They facilitate safe transfer of funds from one place to another
D. They are always in foreign currency
Remittances help in transferring funds safely and quickly across different branches, banks, or locations within the country or abroad.
2. A Demand Draft (DD) is considered more secure than a cheque because:
A. It is prepaid and issued by a bank, reducing the risk of dishonour
B. It is payable to bearer only
C. It can be stopped by the drawer at any time
D. It does not require KYC verification
A DD is drawn by a bank on another branch of the same bank or another bank, ensuring guaranteed payment since the amount is prepaid.
3. If a customer loses a Demand Draft before it is encashed, the bank can:
A. Reimburse immediately without any procedure
B. Cancel the DD on oral request
C. Refuse to issue a duplicate DD
D. Issue a duplicate DD after obtaining indemnity from the customer
In case of loss, banks issue a duplicate DD only after proper verification and indemnity to safeguard against double payment.
4. Banker’s Cheque (Pay Order) differs from a Demand Draft because:
A. It is drawn on another branch of the same bank
B. It is payable locally within the same city/branch jurisdiction
C. It is payable at all branches of the issuing bank across India
D. It can be issued without the bank receiving funds in advance
Banker’s Cheques are issued for local payments and are payable only within the city/branch of issue, unlike Demand Drafts which are payable nationwide.
5. Which of the following is NOT true about Banker’s Cheques?
A. They are prepaid instruments issued by banks
B. They cannot be dishonoured due to insufficient funds
C. They are valid for making payments in any city in India
D. They are usually valid for 3 months from the date of issue
Banker’s Cheques are valid only locally, not nationwide. Demand Drafts are used for outstation remittances.
6. In a Mail Transfer (MT), how does the bank transfer funds to the beneficiary’s branch?
A. By sending an advice through post to the paying branch
B. By issuing a bearer instrument
C. By direct cash delivery to the beneficiary
D. By electronic clearing system only
In a Mail Transfer, the issuing bank sends an advice (payment instruction) by post to the beneficiary’s branch to credit the payee’s account.
7. Which of the following is a limitation of Mail Transfer (MT)?
A. It is costly compared to Demand Draft
B. It cannot be used for outstation remittances
C. It is not backed by the issuing bank
D. It takes longer time as it depends on postal delivery
The main drawback of Mail Transfer is the time delay, as instructions are sent physically by post.
8. Telegraphic Transfer (TT) is generally preferred over Mail Transfer (MT) because:
A. It is issued without any charges
B. It is faster as instructions are sent via telegraph/telex/fax/ electronic mode
C. It does not require any KYC
D. It does not involve any communication between branches
TT is preferred as it allows quick remittance through electronic communication (telegraph, telex, fax, or secure electronic systems).
9. In Telegraphic Transfer (TT), when is the beneficiary’s account credited?
A. After the beneficiary visits the branch
B. After postal confirmation is received
C. Immediately upon receipt of instructions at the paying branch
D. Only after physical demand draft is presented
TT ensures speedy credit — the beneficiary’s account is credited as soon as the paying branch receives and verifies the telegraphic instructions.
10. Which of the following is TRUE regarding Mail Transfer (MT) and Telegraphic Transfer (TT)?
A. Both MT and TT are payable only to bearer
B. MT is faster than TT
C. TT is less reliable compared to MT
D. TT is faster but more costly compared to MT
Telegraphic Transfer is quicker than Mail Transfer, but it involves higher charges due to telecommunication costs.
11. Which of the following statements about NEFT is correct?
A. NEFT transactions are settled in real-time, one by one
B. NEFT transactions are settled in half-hourly batches
C. NEFT can be used only for cash withdrawals
D. NEFT requires a minimum transfer amount of ₹2 lakh
NEFT (National Electronic Funds Transfer) works on a batch settlement system, where transactions are processed in half-hourly batches.
12. A customer wants to transfer ₹50,000 instantly to another bank account at 11:30 PM. Which service is most suitable?
A. Demand Draft
B. Mail Transfer
C. NEFT (as it now operates 24x7, round the clock)
D. Banker’s Cheque
Since December 2019, NEFT is available 24x7. Hence, the customer can transfer funds instantly even at midnight.
13. What is the minimum transfer limit for using RTGS?
A. ₹2,00,000
B. ₹1,00,000
C. No minimum limit
D. ₹5,00,000
RTGS (Real Time Gross Settlement) is meant for high-value transfers, with a minimum transaction limit of ₹2 lakh. There is no maximum limit for RTGS.
14. How does RTGS differ from NEFT?
A. RTGS works in half-hourly batches, NEFT in real-time
B. Both NEFT and RTGS settle in batches
C. NEFT is used only for international remittances
D. RTGS settles transactions individually in real-time, unlike NEFT which works in batches
RTGS processes transactions individually and immediately, while NEFT settles in half-hourly batches.
15. A corporate client needs to urgently transfer ₹25 lakh to a supplier in another city. Which mode of remittance is most appropriate?
A. Banker’s Cheque
B. RTGS
C. NEFT
D. Mail Transfer
RTGS is best suited for high-value (₹2 lakh and above) urgent transactions as it provides immediate settlement in real-time.
16. What is the main purpose of the Electronic Benefit Transfer (EBT) Scheme in India?
A. To enable interbank fund transfers
B. To facilitate international remittances
C. To transfer government subsidies and welfare payments directly to beneficiaries
D. To provide credit facilities to farmers
The EBT scheme ensures direct credit of subsidies, pensions, and welfare funds into beneficiaries’ bank accounts, reducing leakage and delays.
17. Which of the following systems is commonly used for implementing EBT in India?
A. SWIFT messaging system
B. Aadhaar-enabled payment systems (AEPS)
C. Banker’s Cheque system
D. Telegraphic transfer system
Aadhaar-enabled Payment Systems (AEPS) and direct benefit transfers (DBT) are widely used for EBT in India, ensuring transparent and targeted delivery.
18. Which of the following is NOT a feature of Mobile Banking in India?
A. Fund transfer through IMPS and UPI
B. Balance inquiry and mini-statement
C. Bill payments and recharge facilities
D. Issuance of Demand Drafts physically over mobile
Mobile banking allows electronic transactions like UPI/IMPS transfers, recharges, and bill payments, but physical instruments like DDs are not issued via mobile.
19. As per RBI guidelines, customers need to register for mobile banking using:
A. Their registered mobile number linked with the bank account
B. Any random mobile number without KYC
C. Only through ATM card
D. Only through visiting RBI directly
For security and authentication, mobile banking is activated only on the customer’s mobile number registered with the bank’s records.
20. Which of the following statements about Mobile Banking in India is correct?
A. Mobile banking services are available only during banking hours
B. Mobile banking services are available 24x7, including holidays
C. Mobile banking requires internet only, SMS-based services are not possible
D. Mobile banking can be used only for balance inquiry
Mobile banking in India is available 24x7 and can be accessed through internet banking apps, USSD codes, and SMS-based facilities.
21. Which of the following is an example of an electronic/digital payment system in India?
A. Banker’s Draft
B. Cheque Payment
C. Unified Payments Interface (UPI)
D. Postal Money Order
UPI is one of the fastest growing digital payment systems in India, enabling instant fund transfers through mobile phones.
22. Which of the following digital payment systems is operated by NPCI?
A. Bharat Interface for Money (BHIM)
B. SWIFT
C. NEFT
D. Demand Draft
NPCI operates several retail payment systems such as UPI, BHIM, RuPay, and IMPS in India.
23. Which of the following is NOT a feature of digital payments?
A. Quick transfer of funds
B. Reduced cash dependency
C. 24x7 availability
D. Issuance of physical currency notes
Digital payments are electronic transfers and do not involve issuance of physical currency notes.
24. In the context of Safe Deposit Lockers, which of the following statements is correct?
A. Lockers can be opened by the bank without customer’s presence anytime
B. Lockers can be accessed jointly by customer and bank official
C. Lockers are insured by the bank for unlimited value
D. Lockers can be freely transferred without bank permission
Safe deposit lockers are operated under dual control – customer’s key and the bank’s key, ensuring security and accountability.
25. As per RBI guidelines, nomination facility is available for:
A. Safe deposit lockers
B. Only savings accounts
C. Only fixed deposits
D. Not applicable to lockers
Nomination facility is available for safe deposit lockers, enabling legal heirs to access the locker in case of the account holder’s death.
26. Portfolio Management Services (PMS) are generally offered to:
A. All bank customers
B. Only current account holders
C. High Net Worth Individuals (HNIs)
D. Only government organizations
PMS are customized investment solutions designed mainly for High Net Worth Individuals (HNIs) to manage their portfolios professionally.
27. Which of the following is NOT a feature of Portfolio Management Services?
A. Professional management of investments
B. Customized investment strategies
C. Regular reporting to clients
D. Guaranteed fixed returns
PMS does not guarantee fixed returns as investments are subject to market risk.
28. Merchant banking primarily deals with:
A. Retail banking services
B. Issue management and corporate advisory
C. Accepting savings deposits
D. Operating ATM networks
Merchant banking involves services like issue management, underwriting, corporate restructuring, and advisory for businesses.
29. Which regulatory body governs Merchant Bankers in India?
A. Securities and Exchange Board of India (SEBI)
B. Reserve Bank of India (RBI)
C. Ministry of Finance
D. Indian Banks' Association (IBA)
Merchant Bankers are registered and regulated by SEBI under the SEBI (Merchant Bankers) Regulations, 1992.
30. One of the important functions of a Merchant Banker is:
A. Accepting deposits
B. Providing locker facility
C. Managing public issues and underwriting
D. Issuing currency notes
Merchant bankers assist companies in raising funds through public issues, underwriting, and providing other corporate financial services.
31. Which of the following is an example of Government Business handled by banks?
A. Issuing insurance policies
B. Collection of taxes and pension payments
C. Portfolio management services
D. Locker facility
Banks are authorized to handle various government transactions such as tax collection, pension disbursement, and receipt of utility payments.
32. In India, agency banks are appointed by:
A. Reserve Bank of India (RBI)
B. Ministry of Finance
C. SEBI
D. NABARD
RBI appoints commercial banks as agency banks to undertake government business like tax collection, pension payments, and receipts.
33. Levying of service charges by banks should be:
A. Arbitrary, based on bank’s discretion
B. Hidden in terms and conditions
C. Transparent and as per RBI guidelines
D. Not applicable to any customer
RBI mandates that banks should levy service charges in a transparent manner and disclose them to customers upfront.
34. Service charges on basic savings bank deposit accounts (BSBDA) can be levied:
A. Same as normal accounts
B. Without restrictions
C. At the bank’s discretion only
D. As per RBI’s specific restrictions
RBI has issued clear guidelines on charges that can be levied on BSBDA accounts to protect financial inclusion customers.
35. Which of the following is correct about levy of service charges?
A. Banks can levy charges without informing customers
B. Banks must display charges on their website and branches
C. Banks are free to decide charges without any disclosure
D. RBI fixes all charges for banks
Banks are required to disclose all service charges publicly on their website and in branch notices to maintain transparency.
