Digital Banking and E-Banking Questions and Answers

Answer: D

Correct answer: Casa De SanGiorgio

Casa di San Giorgio of Genoa is the institution the standard texts name as the earliest bank, dating its foundation to 1148. It managed the Genoese republic's public debt, taking over state revenues in exchange, and developed transferable shares and deposit accounts that anticipated later banking practice.

The Bank of Venice, usually dated to 1157, is the other early Italian institution commonly cited. SBI, the Central Bank of India and the Reserve Bank are all modern and all Indian, so none can be the earliest.

Answer: D

The banks must maintain CRR, minimum 75% of demand deposits in government bonds of up to one year and maximum 25% in current and fixed deposits with other scheduled commercial banks for operational purposes and liquidity management.
Payments Bank are not allowed to give loans of any amount.

Answer: C

Correct answer: Issues currency notes

Issuing currency notes is a central bank function, not a commercial bank one. In India the Reserve Bank has the sole right to issue notes other than the one-rupee note, which the Government issues; commercial banks distribute currency but do not create it.

The other three are ordinary commercial banking functions: mobilising savings by accepting deposits, lending them out as loans and advances, and directing a prescribed share of credit to priority sectors such as agriculture, micro and small enterprise and weaker sections.

Answer: B

Country’s first automated teller machine (ATM) which can be operated independently by a visually impaired person, know as ‘Talking ATM’ was installed at the premises of the Blind People’s Association (BPA) in Ahmedabad by the Union Bank of India (UBI).

Answer: B

In August 2015, creating history, Federal Bank launched India’s first Mobile App for Bank Account Opening. Bank introduced this unique facility of Mobile based Bank Account Opening as an upgrade to FedBook, its e-Passbook App.
With the new avatar of FedBook, anyone having an Aadhaar Card and PAN Card, can open a Savings Bank Account and get their Account Number instantly using a mobile from anywhere.

Answer: A

Correct answer: National Electronic Funds Transfer

NEFT is a retail payment system operated by the Reserve Bank of India, settling transfers in batches. It has run around the clock since December 2019, and unlike RTGS it carries no minimum transaction value.

Answer: C

Correct answer: at any stage

The Banking Ombudsman may reject a complaint at any stage of the proceedings. Grounds include the complaint being outside the scheme's scope, the complainant not having first approached the bank, the matter being time-barred, being already before a court or other forum, or requiring elaborate evidence better suited to a court.

Some of these are apparent on receipt and others only emerge after the parties have been heard, which is precisely why the power is not confined to any one stage of the process.

Answer: A

Correct answer: APEX

IDBI was established in 1964 as the apex institution for term finance to industry - sitting above the other development finance institutions, refinancing their lending, coordinating their activity and lending directly to large projects itself.

The apex role was formalised when IDBI was delinked from the RBI in 1976 and made an autonomous corporation. The model was later dismantled as capital markets deepened and the institutions lost their access to concessional funds, and IDBI itself converted into a commercial bank in 2004.

Answer: D

Correct answer: None of the above

None of the three named items limits credit creation. Fiscal policy concerns government taxation and expenditure and operates on aggregate demand, not on a bank's ability to create deposits. "Banking loan" and "business possession" are not recognised instruments at all.

What actually constrains credit creation is the cash reserve ratio and the statutory liquidity ratio, which lock up part of every deposit, together with the public's preference for holding cash, the availability of creditworthy borrowers, and the bank's own capital adequacy - all monetary and prudential rather than fiscal.

Answer: A

Correct answer: The credit worthiness of the bank

An investor's first concern with a deposit is whether it will be repaid, so the bank's creditworthiness is the governing consideration. A deposit is an unsecured claim on the bank, and no return compensates for the loss of principal.

The other options are inaccurate as stated. Banks do invest in securities, extensively - statutory liquidity requirements oblige them to. And the bank does not itself guarantee the deposit; protection comes from deposit insurance under the DICGC, which covers only up to a prescribed limit per depositor per bank.