Banking Regulation Act Quiz

The Reserve Bank of India (RBI) has significant powers under the Banking Regulation Act 1949 to regulate banks. These include granting licenses, overseeing operations, managing liquidity, setting reserve requirements, and enforcing banking regulations to ensure stability and safety within the Indian banking system.

Electronic banking (E-Banking) offers various methods for fund transfer, including: Net Banking: Online transfer through bank websites. Mobile Banking: Transfers via mobile apps. IMPS (Immediate Payment Service): Real-time fund transfers for immediate crediting. NEFT (National Electronic Funds Transfer): Batch-based transfer within 2-3 hours. RTGS (Real-time Gross Settlement): High-value transfers settled in real-time.

Commercial banks offer various types of accounts: Current Account: For businesses, frequent transactions, no interest. Savings Account: For individuals, earning interest on balances, limited transactions. Recurring Deposit Account: Regular deposits for a fixed duration, higher interest than savings accounts. Fixed Deposit Account: A lump sum deposit for a fixed time, higher interest rates.

Commercial banks provide various credit facilities: Overdraft: Allows exceeding account balance up to a limit, typically for businesses. Cash Credit: Loan against security, revolving credit facility. Term Loans: Fixed-term loan for specific purposes like property, vehicles, or equipment. Letter of Credit: Guarantees payment for goods/services, used in international trade.

A cheque is a written instruction to a bank to pay a specific amount to a payee. Key features include: Drawer: Person issuing the cheque. Drawee: Bank on which the cheque is drawn. Payee: Person receiving the payment. Amount: Value of the cheque. Date: Issue date of the cheque.

Examining if providing banking services electronically benefits both banks and customers.

A banker's duty to pay a customer's cheque if it meets the requirements.

A banker's duty to keep a customer's banking information confidential.

Marking a cheque with two parallel transverse lines to restrict its payment.

A financial institution that accepts deposits, makes loans, and provides other financial services to individuals and businesses.

Distinguishing between someone holding a negotiable instrument legally and someone acquiring it in good faith and with no knowledge of any defect.

Any person or entity that maintains a financial relationship with a bank, such as a deposit account, loan, or credit card.

The ease with which an asset can be converted into cash without significant loss of value.

Marking a check with two parallel lines to restrict its payment to a specific person or entity.

A written promise to repay a debt, specifying the amount, due date, and interest rate.

A law passed in India to establish Regional Rural Banks (RRBs) to provide banking services and financial assistance to rural areas. It aimed to promote financial inclusion and development in rural communities.

Regional Rural Banks, established under the Regional Rural Bank Act, are specialized banks focused on providing banking services and financial assistance to rural areas. They play a vital role in promoting financial inclusion and economic development in rural communities.

The process of ensuring access to financial services for all, including individuals and communities that are traditionally underserved by traditional banking systems. This often includes rural areas where people may not have access to formal banking.

The process of improving the standard of living in a region or country. It involves increasing productivity, income, employment, and overall well-being of a society. In the context of rural areas, it could involve promoting agriculture, rural entrepreneurship, and better access to education and healthcare.

The Regional Rural Bank Act was passed in 1975. It aimed to create specialized banks for the rural areas of India.

The Banking Regulation Act, 1949, sets out the process for granting licenses to banks in India. The Reserve Bank of India (RBI) has the authority to issue licenses based on factors like financial soundness, management capability, and adherence to regulatory requirements.

The Banking Regulation Act, 1949, dictates the composition and responsibilities of the Board of Directors in a bank. The board oversees the bank's overall operations, strategic planning, risk management, and compliance with regulations, ensuring ethical and responsible banking practices.

Commercial banks adhere to principles of sound lending to manage risk and ensure loan repayment. These principles include:

• Creditworthiness assessment: Evaluating a borrower's ability to repay.
• Collateral security: Assets pledged for loan repayment.
• Diversification: Spreading loans across different sectors to reduce risk.
• Profitability: Loans should generate sufficient return to cover costs and risk.

Opening a savings account online involves a digital process using a bank's website or app. Key steps include:

• Online application: Submitting details electronically.
• KYC verification: Proof of identity and address, often through e-KYC.
• Account activation: Receiving confirmation, login details, and access.

Opening a savings account offline requires visiting a bank branch. Steps include:

• Application form: Filling out a physical form.
• KYC verification: Presenting identity and address documents.
• Account setup: Bank staff process the application and issue account details.