Abbreviations and Banking Terminology Questions and Answers

Answer: D

Correct answer: Multinational Design Evaluation Programme

MDEP stands for the Multinational Design Evaluation Programme, a co-operative initiative among national nuclear regulators, hosted by the OECD Nuclear Energy Agency, that pools their work on assessing new reactor designs. The aim is to avoid each country repeating the same safety review from scratch: regulators share technical findings and work towards converging codes and standards, while each retains its own licensing authority. India’s Atomic Energy Regulatory Board participates in it. The other options are invented finance phrases with no standing as abbreviations. This record had the letters transposed as “MEDP” and the option misspelt as “Progrrame”; both are corrected above.

Answer: B

Correct answer: Scheduled Commercial Bank

A scheduled commercial bank is one listed in the second schedule of the Reserve Bank of India Act, which brings it under the RBI's regulation and gives it access to RBI facilities.

Answer: D

Correct answer: Bureau of Indian Standards

The Bureau of Indian Standards is the national standards body, established under the BIS Act and responsible for formulating Indian Standards and operating the ISI certification mark.

Note that the same three letters carry a different meaning in international banking, where BIS is the Bank for International Settlements at Basel - the central banks' bank, and the body whose committee issues the Basel capital accords. Which expansion applies depends entirely on context, and abbreviation questions frequently exploit exactly that ambiguity.

Answer: C

Correct answer: Policy

CCP here is the Cheque Collection Policy, which every bank must formulate and disclose under Reserve Bank instructions.

It states the timeframes within which local and outstation cheques will be credited, the interest payable to the customer if collection is delayed beyond them, and the bank's liability where an instrument is lost in transit. The purpose is to make the bank's obligations explicit and enforceable rather than discretionary. The same three letters mean central counterparty in market infrastructure, a quite different concept.

Answer: C

Correct answer: Loan & Advances by States

Loans and Advances by States is a heading in the Reserve Bank's statistical returns on state government finances, covering credit extended by state governments to their undertakings, local bodies, co-operatives and employees.

It sits on the expenditure side of a state's accounts rather than among its borrowings, and is watched because such lending is often not recovered in full - loans to loss-making state undertakings in particular become quasi-subsidies. The abbreviation belongs to the fiscal statistics vocabulary rather than to commercial banking.

Answer: A

Correct answer: Unit Trust of India

The Unit Trust of India was established in 1963 under its own Act and began operations with the Unit Scheme 1964.

It was India's first mutual fund, created to give the small saver access to a diversified portfolio and professional management, and it held a statutory monopoly for nearly three decades - the industry opened to public sector banks in 1987 and to private sponsors in 1993. It was restructured in 2003 after the US-64 scheme's difficulties, splitting into UTI Mutual Fund and a specified undertaking.

Answer: B

Correct answer: Balance of Payments

The balance of payments is the record of all economic transactions between a country and the rest of the world over a period.

Answer: D

Correct answer: Bank of India

Bank of India is one of India's major public sector banks, founded in Mumbai in 1906 by a group of businessmen and nationalised in the first round of July 1969.

It is easily confused with the Reserve Bank of India, which is the central bank and a quite different institution, and with the Bank of Baroda, another nationalised commercial bank. The pattern is worth noting: several Indian banks take their names from a place or a country, and BOI, PNB, SBI and CBI all follow it.

Answer: A

Correct answer: Uniform Code Number

A uniform code number is an identifier allotted so that a bank or an office can be referred to consistently across the Reserve Bank's returns and reporting systems.

Codes of this kind are the backbone of financial reporting, because names are neither unique nor stable while a code allotted once and never reused is both. The same principle produces IFSC for a bank branch, MICR for a cheque-processing location and SWIFT BIC for an institution internationally - each solving the identification problem in its own domain.

Answer: D

Correct answer: Asian Development Bank

The Asian Development Bank is the regional development bank for Asia and the Pacific, established in 1966 and headquartered in Manila.

It lends to governments and to the private sector for infrastructure, energy, transport and social projects, funding itself by borrowing on international capital markets against the callable capital of its member governments. India is both a founding member and one of its largest borrowers. The name follows the pattern of the other regional banks - African, Inter-American, European - each pairing its region with "Development Bank".