JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-22

03/03/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-22

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 statements regarding the establishment and evolution of the Reserve Bank of India (RBI) is correct?
A) The RBI was established in 1933 after the passage of the Reserve Bank Bill in the Legislative Assembly.
B) The RBI was nationalized immediately after India’s independence in 1947.
C) The RBI initially functioned as the central bank for both India and Burma but ceased to do so for Burma in 1942.
D) The RBI was established as a public institution with full government ownership from the outset.

Q.2 Which of the following events occurred first in the process leading to the establishment of the Reserve Bank of India (RBI)?
A) The passage of the Reserve Bank Bill with the Governor General’s consent in 1934.
B) The recommendation of the Royal Commission on Indian Currency and Finance in 1926.
C) The presentation of a new bill in the Legislative Assembly in 1933.
D) The nationalization of the RBI under the Reserve Bank (Transfer of Public Ownership) Act in 1949.

Q 3 According to the Reserve Bank of India Act, which of the following defines a “scheduled bank”?
A) A bank that is included in the First Schedule of the RBI Act.
B) A bank that is included in the Second Schedule of the RBI Act.
C) A bank that is directly owned and operated by the Reserve Bank of India.
D) A bank that has been nationalized by the Government of India.

Q.4 Which of the following statements regarding the capital and incorporation of the Reserve Bank of India (RBI) is correct?
A) The Reserve Bank of India was established to manage currency and carry out banking operations under the RBI Act.
B) The initial paid-up capital of the RBI was Rs 6,741 crores as per the RBI Act.
C) The RBI does not have perpetual succession as it is subject to renewal by the Central Government.
D) The RBI was established with an initial capital of Rs 10 crores under the RBI Act.

Q.5 Which of the following statements about the management of the Reserve Bank of India (RBI) [section 7 & 8] is correct?
A) The Central Board of Directors operates independently and is not bound by any directions from the Central Government.
B) The Central Board consists of the Governor, up to four Deputy Governors, and directors nominated solely from the banking sector.
C) The Governor and Deputy Governors are whole-time officials appointed for a term not exceeding five years and are eligible for reappointment.
D) The ten directors nominated by the Central Government under Section 8 must be government officials

Q.6 According to Section 9 of the RBI Act, which of the following statements regarding the Local Boards of the Reserve Bank of India is correct?
A) The RBI has six Local Boards, each representing a different geographical region of India.
B) Each Local Board consists of five members appointed by the Central Government to represent territorial and economic interests.
C) Members of the Local Boards serve a tenure of four years and cannot be reappointed.
D) Local Boards are responsible for framing monetary policy and regulating commercial banks in India.

Q.7 Which of the following is a business activity permitted to be conducted by the Reserve Bank of India (RBI) under Section 17 of the RBI Act?
A) Acceptance of interest-bearing deposits from the general public.
B) Granting loans directly to private companies and individuals.
C) Acceptance of deposits without interest from the Central/State Governments, banks, and local authorities.
D) Trading in equity shares of private corporations for investment purposes.

Q.8 Which of the following activities is the Reserve Bank of India (RBI) prohibited from undertaking as per Section 19 of the RBI Act?
A) Purchasing foreign exchange for managing currency reserves.
B) Granting loans to commercial banks for liquidity purposes.
C) Engaging in trade or having a direct interest in any commercial or industrial undertaking.
D) Accepting deposits from the government without paying interest.

Q.9 Which of the following activities is the Reserve Bank of India (RBI) prohibited from undertaking as per Section 19 of the RBI Act?
A) Purchasing foreign exchange for managing currency reserves.
B) Granting loans to commercial banks for liquidity purposes.
C) Engaging in trade or having a direct interest in any commercial or industrial undertaking.
D) Accepting deposits from the government without paying interest.

Q.10 As per Section 20 of the RBI Act, which of the following is a responsibility of the Reserve Bank of India as the banker to the Central Government?
A) Granting loans to the Central Government for budgetary expenditures.
B) Managing the public debt of the Union and carrying out government banking operations.
C) Paying interest on government deposits maintained with the RBI.
D) Regulating the taxation policies of the Central Government.

Q.11 According to Section 22 of the RBI Act, which of the following statements is correct regarding the issuance of banknotes in India?
A) The Reserve Bank of India has the exclusive right to issue banknotes in India.
B) Both the Reserve Bank of India and the Central Government have the authority to issue currency notes.
C) The Central Government continues to issue currency notes along with the Reserve Bank of India.
D) Commercial banks in India are allowed to issue their own currency notes under RBI supervision

Q.12 According to Section 24 of the RBI Act, which of the following statements is correct regarding the denomination of currency notes in India?
A) The Reserve Bank of India can independently decide the denominations of currency notes to be issued.
B) The maximum denomination of currency notes that can be issued, as per the Act, is ₹10,000.
C) The Central Government cannot discontinue the issuance of any denomination once introduced.
D) Currency notes of all denominations mentioned in the Act must always remain in circulation.

Q.13 Which of the following statements is correct regarding the Cash Reserve Ratio (CRR) as per the RBI Act?
A) Banks must maintain a CRR with the RBI, but the Act specifies a fixed minimum percentage of DTL.
B) The RBI has the authority to determine the CRR percentage without any predefined minimum or maximum limits.
C) Banks are allowed to maintain their CRR funds with any scheduled bank in India.
D) The CRR requirement is optional and banks can choose whether or not to maintain it with the RBI.

Q.14 As per Section 45-IA of the RBI Act, which of the following conditions must a Non-Banking Financial Company (NBFC) fulfill to commence or carry on business?
A) It must obtain a certificate of registration from the Reserve Bank of India (RBI).
B) It must have a net owned fund of at least ₹1 crore, as fixed by the RBI Act.
C) It can operate without RBI registration if its net owned fund exceeds ₹100 crore.
D) It is automatically granted NBFC status if it meets the minimum capital requirement

Q.15 Which of the following statements is correct regarding the general provisions of the RBI Act?
A) The Reserve Bank of India is exempt from paying income tax and super tax on its income, profits, or gains.
B) The RBI must publish the repo rate at regular intervals under Section 49 of the Act.
C) The Companies Act governs the liquidation of the RBI, and it can be liquidated by a court order.
D) The RBI is required to publish its annual profit-sharing agreement with the Central Government.

Q.16 Which of the following activities is NOT permitted under Section 6 of the Banking Regulation Act as a business of banking?
A) Buying, selling, and dealing in bullion and specie
B) Issuing letters of credit and traveler’s cheques
C) Granting loans secured by immovable property for real estate development
D) Collecting and transmitting money and securities

Q.17 According to Section 7 of the Banking Regulation Act, which of the following is TRUE regarding the use of the words “bank”, “banker”, or “banking” in India?
A) Any registered company can use the term “bank” in its name.
B) Only companies engaged in financial consulting services can use “banking” in their name.
C) Only a banking company can use the words “bank,” “banker,” or “banking” in its name.
D) Foreign banks operating in India cannot use the term “bank” in their name.

Q.18 As per Sections 8 and 9 of the Banking Regulation Act, which of the following activities is a bank NOT allowed to undertake?
A) Engaging in the purchase and sale of goods directly or indirectly.
B) Holding immovable property for more than 10 years.
C) Investing in government securities.
D) Providing loans against immovable property.

Q.19 As per Section 12 of the Banking Regulation Act, which of the following statements is TRUE regarding the capital structure of a banking company?
A) The paid-up capital cannot be less than 75% of the subscribed capital.
B) The subscribed capital must be at least 50% of the authorized capital.
C) The capital structure of a banking company may include preference shares.
D) There is no limit on the voting rights of shareholders in a banking company.

Q.20 Which of the following statements is TRUE as per Section 17 of the Banking Regulation Act?
A) A banking company must transfer at least 10% of its annual profit to the Reserve Fund before declaring any dividend.
B) A banking company can use the Reserve Fund at any time for business expansion.
C) The Central Government, on RBI’s recommendation, may allow a bank to stop transferring 20% of its profit to the Reserve Fund only after the Reserve Fund equals the paid-up capital.
D) Banks are required to maintain the Reserve Fund only if they incur losses in a financial year.

Q.21 Which of the following is NOT a restriction imposed on banks under Section 20 of the Banking Regulation Act?
A) Banks cannot grant loans or advances on the security of their own shares.
B) Banks cannot grant loans to any of their directors.
C) Banks cannot grant loans to firms where any of their directors is a partner or guarantor.
D) Banks cannot grant loans to private companies under any circumstances.

Q.22 According to Section 11 of the Banking Regulation Act, what is the minimum aggregate value of a banking company’s paid-up capital and reserves?
A) ₹1 lakh
B) ₹5 lakhs
C) ₹10 lakhs
D) ₹50 lakhs

Q.23 According to Section ____ of the Banking Regulation Act, bank has to maintain certain percentage of demand and time liabilities (DTL) as Statutory Liquidity Ratio (SLR)?
A) 25
B) 24
C) 40
D) 42

Q.24 According to Section 26A of the Banking Regulation Act, the Depositor Education and Awareness Fund (DEAF) receives funds from which of the following sources?
A) Deposits that have not been operated for 5 years
B) Deposits that have not been operated for 10 years
C) Deposits that have not been operated for 15 years
D) Deposits that have been inactive for a period decided by the ban

Q.25 Under Section 35 of the Banking Regulation Act, the Reserve Bank of India (RBI) has the power to inspect a banking company’s books and accounts. Which of the following is true regarding this inspection?
A) RBI can inspect a bank only when directed by the Central Government.
B) RBI can inspect a bank on its own or when directed by the Central Government.
C) RBI can inspect a bank only after receiving complaints from customers.
D) RBI can inspect a bank only if the bank voluntarily requests an inspection.

Q.26 Which of the following sections of the Banking Regulation Act deals with nomination in safe deposit locker accounts?
A) Section 45ZA
B) Section 45ZF
C) Section 45ZE
D) Section 45Y

Q.27 Under which section of the Banking Regulation Act does the RBI have the power to issue directions to banking companies in the interest of the public or depositors?
A) Section 35
B) Section 35A
C) Section 35AA
D) Section 36

Answer:

Q1: C
Q2: B
Q3: B
Q4: A
Q5: C
Q6: B
Q7: C
Q8: C
Q9: C
Q10: B
Q11: A
Q12: B
Q13: B
Q14: A
Q15: A
Q16: C
Q17: C
Q18: A
Q19: B
Q20: C
Q21: D
Q22: B
Q23: B
Q24: B
Q25: B
Q26: C
Q27: B