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Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are: 1. Credit facilities 2. Savings facilities 3. Insurance facilities 4. Fund Transfer facilities

(a)

1 only

(b)

1 and 4 only

(c)

2 and 3 only

(d)

1, 2, 3 and 4

Correct Answer

(d)

Explanation

Option (d) is correct: Microfinance includes credit, savings, insurance, and fund transfer facilities for low-income individuals.

Microtheme: Banking Regulations —
17 questions asked in Prelims in the past.

  1. [2024] Consider the following statements:
    Statement-I: Syndicated lending spreads the risk of borrower default across multiple lenders.
    Statement-II: The syndicated loan can be a fixed amount/lump sum of funds, but cannot be a credit line.
    Which one of the following is correct in respect of the above statements?

    • (a) Both Statement-I and Statement-II are correct and Statement-II explains Statement-I
    • (b) Both Statement-I and Statement-II are correct, but Statement-II does not explain Statement-I
    • (c) Statement-I is correct, but Statement-II is incorrect*
    • (d) Statement-I is incorrect, but Statement-II is correct
    Correct Answer:
  2. [2022] With reference to the ‘Banks Board Bureau (BBB)’, which of the following statements are correct ?
    1. The Governor of RBI is the Chairman of BBB.
    2. BBB recommends for the selection of heads for Public Sector Banks.
    3. BBB helps the Public Sector Banks in developing strategies and capital raising plans.
    Select the correct answer using the code given below :

    • (a) 1 and 2 only
    • (b) 2 and 3 only
    • (c) 1 and 3 only
    • (d) 1, 2 and 3
    Correct Answer: (B) 2 and 3 only
  3. [2020] “Gold Tranche” (Reserve Tranche) refers to

    • (a) a loan system of the World Bank
    • (b) one of the operations of a Central Bank
    • (c) a credit system granted by WTO to its members
    • (d) credit system granted by IMF to its members
    Correct Answer: (D) credit system granted by IMF to its members
  4. [2020] What is the importance of the term “Interest Coverage Ratio” of a firm in India?
    1. It helps in understanding the present risk of a firm that a bank is going to give loan to.
    2. It helps in evaluating the emerging risk of a firm that a bank is going to give loan to.
    3. The higher a borrowing firm’s level of Interest Coverage Ratio, the worse is its ability to service its debt.
    Select the correct answer using the code given below:

    • (a) 1 and 2 only
    • (b) 2 only
    • (c) 1 and 3 only
    • (d) 1, 2 and 3
    Correct Answer: (A) 1 and 2 only
  5. [2019] What was the purpose of Inter-Creditor Agreement signed by Indian banks and financial institutions recently?

    • (a) To lessen the Government of India's perennial burden of fiscal deficit nd current account deficit
    • (b) To support the infrastructure projects of Central and State Governments
    • (c) To act as independent regulator in case of applications for loans of Rs. 50 crore or more
    • (d) To aim at faster resolution of stressed assets
      of Rs. 50 crore or more which are under
      consortium lending
    Correct Answer: (D) To aim at faster resolution of stressed assets
    of Rs. 50 crore or more which are under
    consortium lending
  6. [2019] Which of the following is not included in the assets of a commercial bank in India?

    • (a) Advances
    • (b) Deposits
    • (c) (e) Investments
    • (d) d). Money at call and short notice
    Correct Answer: (B) Deposits
  7. [2019] The Chairman of public sector banks are selected by the

    • (a) Banks Board Bureau
    • (b) Reserve Bank of India
    • (c) Union Ministry of Finance
    • (d) Management of concerned Bank
    Correct Answer: (A) Banks Board Bureau
  8. [2018] Which one of the following best describes the term “Merchant Discount Rate” sometimes seen in news?

    • (a) The incentive given by a bank to a merchant for accepting payments through debit cards pertaining to that bank.
    • (b) The amount paid back by banks to their customers when they use debit cards for financial transactions for purchasing goods or services.
    • (c) The charge to a merchant by a bank for accepting payments from his customers through the bank’s debit cards.
    • (d) The incentive given by the Government to merchants for promoting digital payments by their customers through Point of Sale (PoS) machines and debit cards.
    Correct Answer: (C) The charge to a merchant by a bank for accepting payments from his customers through the bank’s debit cards.
  9. [2018] With reference to the governance of public sector banking in India, consider the following statements:
    1.Capital infusion into public sector banks by the Government of India has steadily increased in the last decade.
    2.To put the public sector banks order, the merger of associate banks with the parent State Bank of India has been affected
    Which of the statements given above is/are correct?

    • (a) 1 only
    • (b) 2 only
    • (c) Both 1 and 2
    • (d) Neither 1 nor 2
    Correct Answer: (B) 2 only
  10. [2017] Which of the following statements best describes the- term ‘Scheme for Sustainable Structuring of Stressed Assets (S4A)’, recently seen in the news?

    • (a) It is a procedure for considering ecological costs of developmental schemes formulated by the Government.
    • (b) It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.
    • (c) It is a disinvestment plan of the Government regarding Central Public Sector Undertakings.
    • (d) It is an important provision in ‘The Insolvency and Bankruptcy Code’ recently implemented by the Government.
    Correct Answer: (B) It is a scheme of RBI for reworking the financial structure of big corporate entities facing genuine difficulties.
  11. [2016] The term ‘Core Banking Solution’ is sometimes seen in the news. Which of the following statements best describes/describe this term?
    1. It is a networking of a bank’s branches which enables customers to operate their accounts from any branch of the bank on its network regardless of where they open their accounts.
    2. It is an effort to increase RBI’s control over commercial banks through computerization.
    3. It is a detailed procedure by which a bank with huge non-performing assets is taken over by another bank.
    Select the correct answer using the code given below.

    • (a) 1 only
    • (b) 2 and 3 only
    • (c) 1 and 3 only
    • (d) 1, 2 and 3
    Correct Answer: (A) 1 only
  12. [2015] Basel III Accord’ or simply ‘Basel III’ often seen in the news, seeks to

    • (a) develop national strategies for the conservation and sustainable use of biological diversity
    • (b) improve banking sector's ability to deal with financial and economic stress and improve risk
      management
    • (c) reduce the greenhouse gas emissions but places a heavier burden on developed countries
    • (d) transfer technology from developed countries to poor countries to enable them to replace
      the use of chlorofluorocarbons in refrigeration with harmless chemicals
    Correct Answer: (B) improve banking sector's ability to deal with financial and economic stress and improve risk
    management
  13. [2013] Consider the liquid assets :
    1). Demand deposits with the banks
    2). Time deposits with the banks
    3). Saving deposits with the banks
    4). Currency
    The correct sequence of these assets in the decreasing order of liquidity is

    • (a) 1-4-3-2
    • (b) 4-3-2-1
    • (c) 2-3-1-4
    • (d) 4-1-3-2
    Correct Answer: (D) 4-1-3-2
  14. [2011] Microfinance is the provision of financial services to people of low-income groups. This includes both the consumers and the self-employed. The service/services rendered under microfinance is/are: 1. Credit facilities 2. Savings facilities 3. Insurance facilities 4. Fund Transfer facilities

    • (a) 1 only
    • (b) 1 and 4 only
    • (c) 2 and 3 only
    • (d) 1, 2, 3 and 4
    Correct Answer: (D) 1, 2, 3 and 4
  15. [2011] Why is the offering of “teaser loans” by commercial banks a cause of economic concern?
    1. The teaser loans are considered to be an aspect of subprime lending and banks may be exposed to the risk of defaulters in future.
    2. In India, the teaser loans are mostly given to inexperienced entrepreneurs to set up manufacturing or export units.

    • (a) 1 only
    • (b) 2 only
    • (c) Both 1 and 2
    • (d) Neither 1 nor 2
    Correct Answer: (A) 1 only
  16. [2010] With reference to the institution of Banking Ombudsman in India, which one of the statement is not correct?

    • (a) The Banking Ombudsman is appointed by the Reserve Bank of India
    • (b) The Banking Ombudsman can consider complaints from Non Resident Indians having accounts in India.
    • (c) The orders passed by the Banking Ombudsman are final and binding on the parties concerned
    • (d) The service provided by the Banking Ombudsman is free of any fee
    Correct Answer: (C) The orders passed by the Banking Ombudsman are final and binding on the parties concerned
  17. [2009] Consider the following pairs :
    1. ABN Amro Bank :USA
    2. Barclays Bank :UK
    3. Kookmin Bank :Japan
    Which of the above pairs is/are correctly matched ?

    • (a) 1 only
    • (b) 2 only
    • (c) 1 and 2
    • (d) 1 and 3
    Correct Answer: (B) 2 only