MCQ on Banking Class 12

MCQ on Banking Class 12 ISC covers certain important topics, which are covered under syllabus for ISCE Class 12 and are coming in Term II examination for the academic year 2022-23. Banking Class 12 MCQ Test contains 41 questions. MCQ on Economics Class 12 ISC have been made for Class 12 students to help check the concept you have learnt from detailed classroom sessions and application of your knowledge.

MCQ on Banking Class 12 ISC

Central bank




1. ______ is the apex institution in banking and financial structure of the economy.

(a) Commercial bank

(b) Central bank

(c) Government bank

(d) Foreign bank

Answer

Answer: (b) Central bank


 

2. Which of the following are the roles of a central bank?

(a) Organization of banking system

(b) Running the banking system

(c) Regulation and development of banking system

(d) All of the above

Answer

Answer: (d) All of the above


 

3. Central banks are entrusted with the responsibility of formulating monetary policy of a country. (True/False)

Answer

Answer: True


 

4. The Reserve bank of India was established in;

(a) 1694

(b) 1844

(c) 1935

(d) 1969

Answer

Answer: (c) 1935





5. RBI was nationalised in;

(a) 1935

(b) 1949

(c) 1964

(d) 1969

Answer

Answer: (b) 1949


 

6. The zonal offices of RBI are situated at;

(a) Delhi

(b) Kolkata

(c) Chennai

(d) All of the above

Answer

Answer: (d) All of the above


 

7. The central bank is a profit making institution (True/False)

Answer

Answer: False


 

8. Maximization of surplus is the main objective of the RBI . (True/ False )

Answer

Answer: False


 

9. Which of the following is a function of RBI.

(a) Investing for public welfare

(b) Dealing with general public

(c) Extending loan to public

(d) All of the above

Answer

Answer: (a) Investing for public welfare





10. Which of the following statement about the Central bank is correct?

(a) It is an organ of the government

(b) Has sole monopoly of issuing currency

(c) Banker of Government

(d) All of the above

Answer

Answer: (d) All of the above


 

MCQ on Banking Class 12 ISC

Functions of Central Bank

11. Which of the following is the function of the central bank?

(a) Bank of issue

(b) Agent of government

(c) Bankers to the bank

(d) All of the above

Answer

Answer: (d) All of the above


 

12. Currency notes issued by RBI are;

(a) Legal tender money

(b) High powered money

(c) Low Powered money

(d) Stock of money

Answer

Answer: (a) Legal tender money


 

13. Which of the following are the advantages of RBI as an issuing authority?

(a) Uniformity in the economy

(b) Imparts a distinctive prestige to currency

(c) Have effective control over credit creation

(d) All of the above

Answer

Answer: (d) All of the above


 

14. Central bank acts as a ____ of government

(a) Agent and banker

(b) Advisor

(c) Both (a)&(b)

(d) None of the above

Answer

Answer: (c) Both (a)&(b)





15. Central bank buys and sells foreign currency on behalf of the government.

(True/False)

Answer

Answer: True


 

16. Which of the following functions are performed by the Central bank as a banker to commercial banks?

(a) Acts as a custodian of cash reserves of the commercial banks

(b) Provides short term credit to commercial banks

(c) Provides guidance and regulates their activities

(d) All of the above

Answer

Answer: (d) All of the above


 

17. The centralised cash reserve serves as the basis of a large and elastic credit structure. (True/False)

Answer

Answer: True


 

18. As custodian of foreign exchange reserves, the central bank follows the following functions.

(a) Controls the receipts and payment of foreign exchange

(b) Try to maintain stability of exchange rate

(c) Enforces exchange control regulations

(d) All of the above

Answer

Answer: (d) All of the above


 

19. Central bank acts as a ________ of mutual claims of the commercial bank on each other.

(a) Clearing house for transfer

(b) Clearing house for settlement

(c) Both (a)&(b)

(d) None of the above

Answer

Answer: (c) Both (a)&(b)


 

20. ______ is the major component of money supply in an economy.

(a) Currency

(b) Bank money

(c) High powered money

(d) All of the above

Answer

Answer: (b) Bank money





MCQ on Banking Class 12 ISC

21. Central bank is entrusted with the responsibility of developing and promoting the banking system. (True/False)

Answer

Answer: True


 

22. Monetary management relates to ____

(a) Control of money supply

(b) Increase in money supply

(c) Management of money supply

(d) Decrease in money supply

Answer

Answer: (c) Management of money supply


 

23. _____ is the policy of the Central Bank to control and regulate the availability and flow of credit with the public for achieving a predetermined purpose.

(a) Monetary policy

(b) Fiscal policy

(c) Budgetary policy

(d) None of the above

Answer

Answer: (a) Monetary policy


 

24. Monetary policy is also known as;

(a) Monetary policy

(b) Fiscal policy

(c) Credit policy

(d) None of the above

Answer

Answer: (c) Credit policy





25. The main objectives of monetary policy are;

(a) Economic growth

(b) Price stability

(c) Growth with Equity

(d) All of the above

Answer

Answer: (d) All of the above


 

26. Quantitative credit control methods;

(a) Affect all the sectors of the economy uniformly.

(b) Have non-uniform impact on the sectors of economy

(c) Excludes bank rate and open market operation

(d) None of the above

Answer

Answer: (a) Affect all the sectors of the economy uniformly.


 

27. Qualitative credit control methods;

(a) Designed to regulate the flow of credit for specific uses

(b) Deal with allocation of credit among alternative uses

(c) Channelise the flow of credit

(d) All of the above

Answer

Answer: (d) All of the above


 

28. ______ is the minimum rate at which the central bank gives loans to Commercial banks.

(a) Bank rate

(b) Reverse repo rate

(c) Reverse bank rate

(d) None of the above

Answer

Answer: (a) Bank rate


 

29. The Monetary policy Committee is the committee headed by President of India (True/False)

Answer

Answer: False


 

30. ______ is the rate of interest at which RBI lends to commercial banks for short periods.

(a) Bank rate

(b) Repo rate

(c) Reverse repo rate

(d) Reverse bank rate

Answer

Answer: (b) Repo rate





MCQ on Banking Class 12 ISC

31. ______ is the rate of interest at which RBI borrows from commercial bank, for short period

(a) Bank rate

(b) Repo rate

(c) Reverse repo rate

(d) Reverse bank rate

Answer

Answer: (c) Reverse repo rate


 

32. ________ refers to the sale and purchase of government securities in the open market by the RBI.

(a) Bank rate

(b) Open market operations

(c) Reverse repo rate

(d) Reverse bank rate

Answer

Answer: (b) Open market operations


 

33. ______ is the minimum percentage of the total deposits required to be maintained in the form of cash reserves by commercial banks with central bank.

(a) Bank rate

(b) Repo rate

(c) Cash reserve ratio

(d) Liquidity ratio

Answer

Answer: (c) Cash reserve ratio


 

34. Commercial banks are required to keep a certain percentage of their deposits with themselves in form of liquid assets, known as;

(a) Bank rate

(b) Statutory minimum reserve

(c) Cash reserve ratio

(d) Liquidity ratio

Answer

Answer: (b) Statutory minimum reserve


 

35. Excess over the statutory reserve is called:

(a) Excess reserve

(b) Excess supply

(c) Excess supply

(d) None of the above

Answer

Answer: (a) Excess reserve





36. There is a direct relationship between CRR and SLR (True/False)

Answer

Answer: False


 

 

37. Which of the following are qualitative credit control methods?

(a) Regulation of consumer’s credit

(b) Credit Rationing

(c) Moral suasion

(d) All of the above

Answer

Answer: (d) All of the above


 

38. _____ is the difference between the Value of security and the loan granted against it.

(a) Cash reserve ratio

(b) Marginal requirement

(c) Open market operation

(d) None of the above

Answer

Answer: (b) Marginal requirement


 

39. Which of the following are the forms of credit Rationing?

(a) Maximum amount fixed by the Central bank to lend to commercial banks

(b) Central bank fixes the maximum ratio of loans of a commercial bank to its total deposits

(c) Both (a) and (b)

(d) None of the above

Answer

Answer: (c) Both (a) and (b)


 

40. ______ refers to the various directives issued by the Central bank to commercial banks from time to time to regulate them.

(a) Direct action

(b) Credit Rationing

(c) Both (a)&(b)

(d) None of the above

Answer

Answer: (a) Direct action


 




41. ______ is the method of persuasion, request and advice to commercial banks from the Central bank.

(a) Moral suasion

(b) Direct action

(c) Credit control

(d) All of the above

Answer

Answer: (a) Moral suasion


 

Economics Class 12 ISC MCQs – Term 2

Receive the latest Content

Subscribe To Our Weekly Newsletter

Get notified about new Content