Tag: commercial studies

Questions Related to commercial studies

What do you mean by SHGs?

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. Self Help Groups

  2. Service Holder Groups

  3. Self Housing Groups

  4. Soul Harassing Groups

Show answer
Correct Option: A
Explanation:

Self Help Groups is a small group of 15 to 20 people formed to mutually help each other.
Self Help Groups help in promoting self employment, credit, awareness and savings.
Banks in India supports SHGs by means of bank linkage programme.
SHGs led to economic empowerment of women in India.

Which among the following are the credit rating agencies of India?
1. CRISIL 2. CARE 3.ICRA 4.ONlCRA

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. 1 and 3

  2. 1,2 and 3

  3. 1,3 and 4

  4. All of them

Show answer
Correct Option: D
Explanation:

CRISIL - Credit Rating Information Services of India Limited
CARE -  Credit Analysis and Research
ICRA - Investment information and credit rating agency

ONICRA - Onida Individual Credit Rating Agency of India

The currency convertibility concept originated in _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. wells agreement

  2. Bretton woods agreement

  3. Taylors agreement

  4. none of the above

Show answer
Correct Option: B
Explanation:

The currency convertibility concept was finalized between 1968-1973 in Bretton Woods Agreement. 
The currency convertibility was made available for current account transactions and trade.

The _____ supervises the functioning of formal sources of loans.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. State Bank of India

  2. Central Bank of India

  3. Reserve Bank of India

  4. Finance Minister

Show answer
Correct Option: C
Explanation:

The Reserve Bank of India supervises the functioning of formal sources of loans.
RBI is also the Central Bank of India.
RBI doesn't supervise the informal sources of credit institutions.

Interest rate, collateral and documentation requirement and the mode of repayment together comprise, what is called the _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. security papers

  2. terms of credit

  3. credit

  4. all of the above

Show answer
Correct Option: B
Explanation:
Terms of credit includes:  

Interest rates,

Collateral (security),

Documentation related to lending money and

The mode of repayment.

An asset that the borrower owns and uses it as a guarantee to a lender until the loan is repaid.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. Security

  2. Guarantee

  3. Land

  4. Collateral

Show answer
Correct Option: B

85% of the loans taken by poor households in the rural areas are from ___.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. cooperatives

  2. local bank

  3. government bank

  4. informal sources

Show answer
Correct Option: D
Explanation:

Majority of the people in rural areas depend on informal sources for loans.

Informal sources include landlords and rich farmers.

 The main reasons behind this are:

1. The number of banks in rural remote areas is low.

2. Bank loans require proper documents and collateral (security). Absence of collateral is one of the major reasons which prevents the poor from getting bank loans.

3. Informal lenders like landlords, know the borrower personally and hence, are often willing to give a loan without a security.

 

The high rate of interest on borrowing _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. increase the repayment ability.

  2. increase the debt burden.

  3. increase the easy accessibility to lenders.

  4. increases easy repayment options

Show answer
Correct Option: B
Explanation:
  • Money borrowed on higher rates of interest will usually increase the debt burden.
  • Informal sources of credit charges higher rates of interest. 
  • Due to higher rate of interest the informal sources of credit are exploitative in nature.

The District Central Co-operative Banks are in direct touch with _____.

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. reserve bank of india

  2. state cooperative banks

  3. land development banks

  4. central government

Show answer
Correct Option: B
Explanation:

The central co-operative banks are the federations of primary credit societies in a district.
The central co-operative banks are
of two types.
The state co-operative bank acts as a watchdog of co-operative banks operating in the state.

The interest charged by the bank from its borrowers is _____  then the interest it pays to its depositors. 

commercial studies money loans from banks and financial institutions introduction to money - barter system owned fund and borrowed fund

  1. the same

  2. higher

  3. lower

  4. unspecified

Show answer
Correct Option: B
Explanation:

The interest charged by the bank from its borrowers is higher than the interest it pays to its depositors.
The difference between the interest paid by the bank to its depositors and interest paid by the borrowers to the bank is the income of the bank.