JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-20

19/02/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-19

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 Which of the following is NOT a characteristic of the Informal Financial System?
A) Lack of regulations
B) High transaction costs
C) Unstructured procedures
D) Low default rates

Q.2 Which of the following is a key characteristic of the Formal Financial System?
A) Operates through organized and institutional frameworks A
B) Unregulated and unstructured procedures
C) High reliance on personal relationships for lending
D) Absence of financial markets

Q 3 Which of the following financial instruments is typically recorded on the asset side of a financial institution’s balance sheet?
A) Deposits
B) Loans and advances
C) Mutual fund units issued
D) Insurance policies

Q.4 Which of the following is considered a liability on the balance sheet of a financial institution?
A) Derivatives
B) Placements
C) Money accepted for remittances
D) Investments

Q.5 Which of the following statements correctly describes the Post-Liberalisation (1991–2010) phase of the Indian financial system?
A) It was marked by minimal government intervention and dominance of moneylenders and traders.
B) It focused on nationalization of banks and expansion of financial institutions under state control.
C) It introduced structural reforms, financial liberalization, and greater private sector participation.
D) It was shaped by global financial instability and increasing emphasis on financial inclusion.

Q.6 Which of the following key developments took place during the Pre-Independence (Prior to 1947) phase of the Indian financial system?
A) Establishment of the Reserve Bank of India (RBI) based on the recommendation of the Hilton Young Commission.
B) Nationalization of major banks to expand financial access across rural India.
C) Implementation of economic liberalization policies to promote private sector banking.
D) Introduction of digital banking and payment systems.

Q.7 Which of the following key developments took place in the Post-Independence (1947–1991) phase of India’s financial system?
A) Nationalization of major banks to expand financial inclusion and support planned economic development.
B) Privatization of all public sector banks to promote competition and efficiency.
C) Introduction of economic liberalization policies, reducing government intervention in banking.
D) Establishment of private sector-led digital banking and fintech services.

Q.8 What was one of the main reasons for the nationalization of 14 banks in 1969?
A) Excessive foreign investments in Indian banks leading to loss of financial sovereignty.
B) High dependence of the economy on private capital markets for credit.
C) Limited access to banking services for farmers, small-scale industries, and weaker sections.
D) Surplus liquidity in banks leading to inflationary pressures in the economy.

Q.9 Which of the following reforms was NOT a direct recommendation of the Narasimham Committee – I (1991)?
A) Phased reduction of the Statutory Liquidity Ratio (SLR) and Cash Reserve Ratio (CRR).
B) Abolition of the branch licensing policy to give banks operational freedom.
C) Introduction of Local Area Banks (LABs) to mobilize rural savings.
D) Implementation of demonetization to curb black money and counterfeit currency

Q.10 What was one of the major outcomes of the banking sector reforms recommended by the Narasimham Committee – I (1991)?
A) Complete government withdrawal from public sector banks.
B) Increased competition from new private sector banks and foreign institutional investors.
C) Restriction on public sector banks from raising capital from markets.
D) Introduction of mandatory rural branch expansion for all banks.

Q.11 What was the primary rationale behind the Narasimham Committee – II (1998) recommendation for mergers among strong banks?
A) To reduce the competition in the banking sector and create a monopoly.
B) To enable banks to handle challenges related to Current Account Convertibility and exchange rate management.
C) To promote the dominance of public sector banks over private banks.
D) To completely privatize the banking sector in India.

Q.12 Why did the Narasimham Committee – II (1998) propose the concept of Narrow Banking for weak banks?
A) To allow weak banks to focus exclusively on retail lending.
B) To enable struggling banks to invest only in short-term, riskfree assets to limit losses.
C) To promote financial inclusion in rural areas.
D) To restrict these banks from further lending activities and gradually close them down.

Q.13 How does the JAM Trinity (Jan-Dhan, Aadhaar, and Mobile) contribute to financial inclusion in India?
A) By enabling direct benefit transfers (DBT) and reducing leakages in government subsidies.
B) By allowing only rural banks to issue loans to low-income households.
C) By replacing commercial banks with digital wallets for financial transactions.
D) By making Aadhaar-based transactions mandatory for all bank customers.

Q.14 Which of the following was a key recommendation of the P J Nayak Committee (2014) on improving governance in Indian banks?
A) Increasing government ownership in public sector banks (PSBs).
B) Reducing government interference and improving board autonomy in banks.
C) Mandating that all bank directors must be government officials.
D) Limiting private sector participation in bank governance

Q.15 Which of the following is the main reason behind increasing the FDI limit in the Indian insurance sector from 49% to 74%?
A) To attract more foreign capital for the expansion of insurance companies.
B) To privatize all public sector insurance companies.
C) To limit foreign influence in the management of Indian insurance companies.
D) To reduce the role of the government in regulating the insurance sector

Answer:

Q1: B
Q2: A
Q3: B
Q4: C
Q5: C
Q6: A
Q7: A
Q8: C
Q9: D
Q10: B
Q11: B
Q12: B
Q13: A
Q14: B
Q15: A

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