Business Services - Topic 2

Select the correct option:

RBI was established in ___________ .

• 1932

• 1956

• 1945

Answer explanation

The central bank is the apex bank of an economy/banking structure of a country. The Reserve Bank of India (RBI) is the central bank established in 1945 under the Reserve Bank of India Act, 1944.

Select the correct option:

The main aim of co-operative bank is to provide credit to _________.

• Industries

• Farmers

• Businessman

Answer explanation

Co-operative Bank is a financial entity which belongs to its members, who at the same time are the owners and the customers of their bank. They have to obtain a licence from the RBI and are popular in semi-urban and rural areas.

Main aim is to provide credit to economically backward people, farmers and small scale units.

Select the correct option:

Primary Credit Co-operative Society works at ____________ level.

• state

• village

• town

Answer explanation

Primary Credit Societies

→ operates at village level. → collects deposits from members and common public.

→ get funds from State Co-operative Bank and District Co-operative Bank.

Select the correct option:

Regional Rural Banks were established in _________.

• 1975

• 1932

• 1995

Answer explanation

Regional Rural Banks (RRBs):

→ Regional Rural Banks were established in 1975 and were sponsored by large public sector banks. → Capital contributed by Central Government (50%), State Government (15%) and Sponsored Banks (35%).

→ Main purpose is to mobilise financial resources from the rural areas and grant loans to small and marginal farmers, agricultural labourers and rural artisans.

Select the correct option:

Banks provide financial and advisory assistance to their _________.

• managers

• customers

• suppliers

Select the correct option:

SIDBI was set up on ____________ .

• 2nd April, 1990

• 2nd August,1990

• 2nd December, 1990

Select the correct option:

The primary functions of commercial banks are known as ________ banking functions.

• secondary

• primary

• core

Select the correct option:

__________ deposits are repaid to the customers after the expiry of decided time.

• Time

• Fixed

• Cash

Answer explanation

In Time Deposit, a sum of money is kept for a fixed time period and repaid to the customers after the expiry of maturity period.

Types:

(a) Fixed Deposit

(b) Recurring Deposit

Select the correct option:

The main aim of _________ account is to encourage habit of saving among the people.

• current

• saving

• fixed deposit

Answer explanation

Saving Account: → This account is operated by regular or fixed salary or wage income earner.

→ It encourages habit of savings among people.

→ There are restrictions on withdrawal limit carrying low interest rates.

→ Interest is credited monthly, half-yearly or on yearly basis.

Select the correct option:

____________ account is operated by business firms and other commercial organizations.

• Current

• Saving

• Recurring

Answer explanation

Current Account: → This account is operated by business firms, other organisations, educational institutions, hospitals, etc., to manage business transactions.

→ Unlimited transactions are allowed, i.e., no restriction on deposits and withdrawals of amounts.

No interest is paid.

→ Overdraft facility available only in this account.