Basiceonomomy Banking 2025 Exam

 Qts 1. What is Scheduled Banks 

Scheduled Banks are those banks which are included in the Second Schedule of the RBI Act, 1934. 

These Bank shall fulfil following conditions : (a) At least Rs. 5 lakh as capital (b) any activity of the bank shall not be derogatory to the interest of the depositors.

Non-Scheduled Banks are those banks which are not included in the second schedule of  1934 

Qts  2. What is Commercial Banks 

Those banks having the motive of profit and work at large with various product like savings account, current account, debit card, credit card, insurance, house loan, vehicle loan, etc. 

They are of 3 types -(a) Public Sector Bank Example : Canara Bank

( b) Private sector Bank Example Axis Bank  (c)  Foreign Bank, (d ) Regional Rural Banks (RRB).


 Qts  3.What is Public Sector Banks

These are the banks where majority stake is held by the Government of India or Reserve Bank of India. 

It controls more than 90% of the total Bank Deposits. 

For example-SBI, Punjab National Bank, Indian Bank, Andhra Bank, etc.


 Qts 4. What is Private Sector Banks

These are the banks where majority of share capital of the bank is held by private individuals. 

For instance, HDFC, ICICI, Axis Bank


Qts  5.What is  Foreign Banks

These banks are registered and have their headquarters in a foreign country but operate their branches in our country.

Example:  Hong Kong and Shanghai Banking Corporation (HSBC), Citibank, American Express Bank, Standard & Chartered Bank, Grindlay's Bank, etc.


 Qts  6. What is Cooperative Bank

Registered at State Register for Cooperative society license.

When a co-operative society engages itself in banking business it is called a Co-operative Bank. 

Any co-operative bank as a society has to function under the overall supervision of the Register, Co-operative Societies of the State.


 Qts 7. What is Cash Reserve Ratio (CRR)

 CRR is the minimum percentage of cash deposits that banks must keep with the central bank.


Qts 8. What is Statutory Liquidity Ratio (SLR)

This is the percentage of deposits that banks must hold in the form of government bonds. SLR bonds are liquid assets that can be sold at a short notice to meet any unexpected demand from depositors.


 Qts 9 .What is Open Market Operation (OMO)

 OMO refer to the buying and selling of Government securities by RBI in the open market.


 Qts 10. What is Bank Rate

 It is also called the rediscount rate. It is the rate at which the RBI gives Long term loan  to Commercial Banks


 Qts 11. What is Repo Rate

 It is the rate at which RBI lends short-term loan to Commercial  banks against securities. Repo rate injects liquidity in the market.


 Qts 12.What is Reverse Repo Rate

 It is the rate at which commercial banks lend money to RBI  . It leads to less money circulation in the market

Qts 13. What is Margin Requirements 

Margin Requirements:  It is Percentage of a security's value that may be used as a Collateral for a loan .


Qts 14 What is Selective Credit Control

Selective Credit Control: Selective Credit Control is a tool in the hands of Reserve Bank of India to restrict commercial  bank to give loan to sensitive commodities 

Qts15 What is Moral Suasion

 A moral suasion is a persuasion tactic used by an authority (i.e. Reserve Bank of India) to influence and put pressure, but not force, banks into adhering to policy.


Qts 16 What is Rationing of Credit

 Central Bank will decide upper limit to loans in each sector. Once the quota is over, no additional loan is given. This concept is called to be Rationing of Credit.

Qts 17 What is The basic functions of RBI 

RBI follow monetary policy. It consists  issuance of currency, sustaining monetary stability in India, operating the currency, and maintaining the country's credit system.


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