INSURANCE, NON BANKING - FINANCE 

1. Till what amount are deposits of public in NBFCs insured?

(a) ` 1 lakh

(b) ` 50,000

(c) Not insured

(d) None of the above

Ans : (c)

2. In which of the following ways have organization of workers proved to be effective in providing microfinance by banks and financial institutions to the rural poor?

(a) Shiksha sevaks

(b) Self-help groups

(c) Link workers

(d) Chit fund members

Ans : (b)

3. What is the current limit for Foreign Direct Investment in the insurance sector in India?

(a) 100% (b) 51%

(c) 49% (d) 26%

Ans : (c)

4. Which of the following insurance company does not receive premium payments from the public?

(a) New India Assurance Company

(b) Deposit Insurance and Credit Guarantee Corporation

(c) Bajaj Allianz

(d) HDFC Standard Life

Ans : (b)

5. SEBI through its latest directive has permitted insurance companies to participate in the stock markets. What has been proposed?

(a) Insurance companies can now come out with IPOs

(b) Retail investors can participate in IPOs of insurance companies without any cap

(c) Insurance companies to let their employees have a larger share in the allotment process

(d) Stocks of insurance companies to be listed only on BSE

Ans : (a)

6. Which of the following sets are closely linked?

(a) Microfinance; self-help groups

(b) Banks; NBFCs

(c) Mutual funds; insurance companies

(d) Capital markets; assets under management

Ans : (a)

7. Contract of insurance is a contract of—

(a) Indemnity (b) Guarantee

(c) Agency (d) Bailment

Ans : (a)

8. Microfinance institutions in India have formed an association to regulate and monitor their work. What is it known as?

(a) Microfinance institutions organization

(b) Microfinance institutions network

(c) Association of microfinance institutions

(d) Confederation of microfinance institutions

Ans : (b)

9. The measurement of the poverty line in India is based on the criteria of—

(a) Dwelling houses

(b) Nature of employment

(c) Level of education

(d) Calorie consumption

Ans : (d)

10. A percentage of their new branches in unbanked rural centers. What is this number?

(a) 30 per cent (b) 25 per cent

(c) 10 per cent (d) 15 per cent

Ans : (b)

11. Which of the following is a non-banking financial company?

(a) SBI Caps

(b) ICICI Venture Fund

(c) Mannapuram Finance

(d) ING Vysya

Ans : (c)

12. Which of the following is true?

(a) NBFCs can accept deposits from the public

(b) NBFCs cannot offer deposit schemes to the public

(c) Deposits of NBFCs are Insured with DICGC

(d) NBFCs can accept deposits from the public if they are registered and permitted by RBI

Ans : (d)

13. Which of the following countries was the first to launch the concept of micro finance?

(a) India (b) Nepal

(c) Peru (d) Bangladesh

Ans : (d)

14. Just like banks have to maintain a stipulated capital adequacy ratio, similarly non-banking finance companies NBFCs are also required to do so. What is the minimum stipulation for NBFCs?

(a) 15 per cent (b) 12 per cent

(c) 10 per cent (d) 8 per cent

Ans : (a)

15. The mortality tables used by life insurance companies are meant to serve which of the following purposes?

(a) The payment to agents are decided on these tables

(b) The premiums for each policy is fixed in accordance with these tables

(c) The term for each policy is decided accordingly

(d) All of the above

Ans : (b)

16. According to the norms prescribed by RBI for setting up White Label ATMs, what is the minimum net worth the NBFCs should have?

(a) ` 50 cr (b) ` 75 cr

(c) ` 100 cr (d) ` 200 cr

Ans : (c)

17. What does the term ‘bancassurance’ mean :

(a) Assurance from the bank to its account holder regarding the safety of his money

(b) A special product designed by the bank

(c) Selling of insurance policies by banks

(d) Understanding between banks and insurance companies

Ans : (c)

18. ‘Free look’ period allowed by life insurance companies is a customer-friendly initiative. What is the purpose of this facility?

(a) The customer can reduce the amount of premium during this period

(b) Grace period is given to pay the premium amount

(c) The customer can decide whether to take the policy or reject it during this time

(d) None of the above

Ans : (c)

19. Financial literacy is a serious issue for RBI. Why?

(a) It would mean banks can do more business

(b) So that RBI policies are understood by the maximum number of people

(c) It would enable a better understanding of the banking business

(d) With better understanding more and more people would utilize the banking services

Ans : (d)

20. Which body/official determines the risk coverage for calculation of premium for life insurance policies?

(a) Actuary of the life insurance company

(b) IRDA

(c) The chief executive of the life insurance company

(d) The board of directors of the life insurance company

Ans : (a)

21. NBFCs are important players in the financial sector. Which feature differentiates NBFCs from banks?

(a) NBFCs are not part of payment and settlement systems

(b) NBFCs do not accept deposits

(c) NBFCs do not have branches

(d) None of the above

Ans : (a)

22. Life insurance companies have been allowed to approach capital markets with their publics part of financial inclusion measures banks have been directed by RBI to open a certain issue by IRDA. What is the eligibility norm for insurance companies to be permitted to adopt this approach?

(a) Insurance companies require to be ten years old

(b) Insurance companies require to show profits for the last three years

(c) Insurance companies doing business of more than ` 10,000 crores would be eligible

(d) All of the above

Ans : (a)

23. Most life insurance policies need to be renewed annually by payment of premium for the year. Term insurance policies however provide for the one-time payment. What is the difference with other plans?

(a) Term plans are generally long term plans ensuring the risk of death

(b) Insured amount is paid only in the event of death of the insured

(c) No amount is paid on maturity if the insured survives

(d) All of the above

Ans : (d)

24. With which financial sector are these terms associated with : free look period; rider; third party administrator; surrender value—

(a) Insurance (b) Banking

(c) Capital markets (d) Mutual funds

Ans : (a)

25. A new project requires funds to purchase fixed assets for its business. What is this funding/ expense known as?

(a) Working capital

(b) Revenue expenditure

(c) Startup loans

(d) Capital expenditure

Ans : (d)

26. Which of the following is not a physical asset?

(a) Gold jewelry (b) Real estate

(c) Commodities (d) Debentures

Ans : (d)

27. Society for Elimination of Rural Poverty SERP is an important body of the government in the field of microfinance. What does it do?

(a) It distributes cash subsidies through cooperative banks to the rural poor

(b) It identifies the rural poor for bank finance

(c) It is a nodal agency for monitoring the SHGs

(d) It supervises the funds distributed under NREGS

Ans : (c)

28. Self-help groups are an important borrower class of which of the following institutions?

(a) Banks

(b) Microfinance institutions

(c) SIDBI

(d) All of the above

Ans : (d)

29. An angel investor would be known as which of the following?

(a) Pension fund investor

(b) Bank depositor

(c) Wealthy individual looking for investment in fresh projects

(d) Investor in government projects

Ans : (c)

30. Which of the following sources of finance would be the costliest for a new entrepreneur?

(a) Bank overdraft (b) Trade credit

(c) Government grant (d) Personal savings

Ans : (a)

31. How is a payment gateway explained?

(a) It facilitates the payment transaction in e-commerce

(b) It is an intermediary service which permits acceptance of electronic payments

(c) It is the infrastructure for online trading

(d) All of the above

Ans : (d)

32. What is the service called which transfers funds from one center to another in time blocks on the same day?

(a) NEFT (b) EFT

(c) RTGS (d) ECS

Ans : (a)

33. Which of the following is necessary to transfer funds through the RTGS facility?

(a) Beneficiary’s bank account number

(b) The IFSC Number of the beneficiary’s bank branch

(c) There is a minimum amount specified for transfer

(d) All of the above

Ans : (d)

34. Which of the following is not a means of remitting money?

(a) Electronic clearing service

(b) Mail transfer

(c) Telegraphic transfer

(d) RTGS

Ans : (a)

35. Which of the following financial product is available for investment online?

(a) Post office savings products

(b) Senior citizen savings scheme

(c) Life insurance policies

(d) Treasury bills

Ans : (c)