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Banking Structure, Nationalisation and Reforms
Practice banking-in-india with 20 free MCQ questions covering economics. Detailed explanations in English and Hindi, perfect for UPSC, SSC, and competitive exam preparation.
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Banking Structure, Nationalisation and Reforms20:00
banking-in-india — Answer Key & Explanations (20 Questions)
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Attempt the quiz above first, then review every question with its correct answer and a short explanation below.
Q1.The RBI is called the "banker's bank" because it:
- A.accepts deposits from the general public
- B.lends directly to farmers
- C.finances industrial projects
- D.acts as the lender of last resort to commercial banks✓ Correct Answer
Explanation: Commercial banks can borrow from the RBI in need, and the RBI regulates and holds their reserves.
Q2.NABARD is the apex institution for:
- A.housing finance
- B.foreign trade finance
- C.stock market regulation
- D.agriculture and rural development finance✓ Correct Answer
Explanation: NABARD (National Bank for Agriculture and Rural Development) refinances institutions lending for agriculture and rural activities.
Q3.Which scheme, launched in 2014, aims at universal access to bank accounts for every household?
- A.Atal Pension Yojana
- B.Pradhan Mantri Jan Dhan Yojana✓ Correct Answer
- C.Sukanya Samriddhi Yojana
- D.Pradhan Mantri Mudra Yojana
Explanation: PMJDY was launched on 28 August 2014 to provide a basic bank account, debit card and insurance cover.
Q4.Which is the largest public sector bank in India by assets?
- A.State Bank of India✓ Correct Answer
- B.Punjab National Bank
- C.Bank of Baroda
- D.Canara Bank
Explanation: SBI is the largest public sector bank in India.
Q5.The abbreviation ATM stands for:
- A.Automatic Transfer Machine
- B.Automated Trading Machine
- C.Automated Teller Machine✓ Correct Answer
- D.Advanced Teller Mechanism
Explanation: An ATM lets customers withdraw cash and do simple banking without a teller.
Q6.How many major commercial banks were nationalised in July 1969?
- A.6
- B.14✓ Correct Answer
- C.20
- D.28
Explanation: 14 banks with deposits above ₹50 crore were nationalised in 1969; six more followed in 1980.
Q7.The Imperial Bank of India was converted into the State Bank of India in:
- A.1955✓ Correct Answer
- B.1947
- C.1949
- D.1969
Explanation: The State Bank of India Act, 1955 took over the Imperial Bank, creating SBI.
Q8.The second round of bank nationalisation, covering six banks, took place in:
- A.1975
- B.1980✓ Correct Answer
- C.1985
- D.1991
Explanation: Six more commercial banks with deposits above ₹200 crore were nationalised in April 1980.
Q9.Regional Rural Banks (RRBs) were first set up in:
- A.1969
- B.1982
- C.1991
- D.1975✓ Correct Answer
Explanation: The first RRBs started in October 1975 to serve small farmers and rural artisans.
Q10.The Banking Regulation Act, which governs the functioning of banks in India, was passed in:
- A.1934
- B.1956
- C.1969
- D.1949✓ Correct Answer
Explanation: The Banking Regulation Act came in 1949 and gave the RBI wide powers over banks.
Q11.The Unified Payments Interface (UPI) was developed by:
- A.SEBI
- B.IRDAI
- C.NPCI✓ Correct Answer
- D.NABARD
Explanation: The National Payments Corporation of India (NPCI) launched UPI in 2016.
Q12.The Basel norms on capital adequacy of banks are issued by the:
- A.International Monetary Fund
- B.World Trade Organization
- C.World Bank
- D.Basel Committee on Banking Supervision✓ Correct Answer
Explanation: The Basel Committee, hosted by the Bank for International Settlements, sets the Basel norms.
Q13.Domestic commercial banks are required to lend what share of adjusted net bank credit to the priority sector?
- A.25 per cent
- B.32 per cent
- C.40 per cent✓ Correct Answer
- D.50 per cent
Explanation: The priority sector lending target for domestic commercial banks is 40 per cent of adjusted net bank credit.
Q14.In 2019, Vijaya Bank and Dena Bank were merged with:
- A.State Bank of India
- B.Canara Bank
- C.Bank of Baroda✓ Correct Answer
- D.Punjab National Bank
Explanation: The three-bank merger took effect on 1 April 2019 and created the third largest public sector bank.
Q15.For RTGS transfers, the minimum amount is:
- A.₹2 lakh✓ Correct Answer
- B.₹1
- C.₹10,000
- D.₹50,000
Explanation: RTGS is meant for large-value transfers, with a minimum of ₹2 lakh; NEFT has no minimum.
Q16.NABARD was established in which year?
- A.1982✓ Correct Answer
- B.1969
- C.1975
- D.1991
Explanation: NABARD was set up on 12 July 1982 on the recommendation of the Shivaraman Committee.
Q17.Which committee recommended the creation of payments banks and small finance banks?
- A.The Narasimham Committee
- B.The Shivaraman Committee
- C.The Nachiket Mor Committee✓ Correct Answer
- D.The Khusro Committee
Explanation: The Nachiket Mor Committee on financial services for small businesses and low-income households made this proposal.
Q18.The Banking Ombudsman Scheme was introduced by the RBI in:
- A.1995✓ Correct Answer
- B.1969
- C.1982
- D.2005
Explanation: The scheme began in 1995 to resolve customer complaints against banks quickly and cheaply.
Q19.The Narasimham Committee (1991) is associated with reforms of the:
- A.agricultural marketing system
- B.banking and financial sector✓ Correct Answer
- C.power sector
- D.public distribution system
Explanation: It recommended lowering CRR and SLR and giving banks more operational freedom.
Q20.Which committee recommended the setting up of NABARD?
- A.The Narasimham Committee
- B.The Shivaraman Committee✓ Correct Answer
- C.The Nachiket Mor Committee
- D.The Khusro Committee
Explanation: The Shivaraman Committee (1979) proposed a dedicated apex body for agricultural and rural credit.