Tag: loans from banks and financial institutions

Questions Related to loans from banks and financial institutions

Formal sources of credit do not include ___________.

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

  1. Banks

  2. Cooperative

  3. Employers

  4. None of these

Show answer
Correct Option: C
Explanation:


Formal sector credit in India includes loans from banks and cooperatives. RBI supervises their functions of giving loans. Rich urban households depend largely on formal sources of credit. Lower rate of interest on loans is charged as compared to informal sources of credit.

One of the delivery channel for Micro Finance is SHG model. SHG means _______________.

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

  1. Soar Help Group

  2. Sake Help Group

  3. Self Help Group

  4. Store Help Group

Show answer
Correct Option: C
Explanation:

A self-help group is an economic intermediary group of 10 to 20 local women or men between 18 to 40 years. Most self-help groups are situated in India, though SHGs can be established in other countries, particularly in South Asia and Southeast Asia. 

SHG is not whatever thing but a group of people who are on daily wages, they form a group and from that group, one person collects the money and gives the wealth to the person who is in need. Members also make modest measure savings contributions over a few months until there is adequate money in the group to begin lending. 

Thus, the correct option is C.

Which of the following is not included in credit exposure?

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

  1. Bridge Loans

  2. Working Capital Demand Loan

  3. Shares of the company underwritten by the bank

  4. Advances against the Banks fixed deposits granted to a company

Show answer
Correct Option: D
Explanation:

Credit exposure is the total amount of credit made available to a borrower by a lender. Advances against the banks fixed deposit granted to the company is not included in this because it is amount which the lenders grant to the borrower. 

Which of the following states in India is at the top in the list of those who availed credit through Self Help Groups (SHGs) ?

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

  1. Andhra Pradesh

  2. Goa

  3. Arunachal Pradesh

  4. Kerala

Show answer
Correct Option: D
Explanation:

A Self Help Group (SHG) is a financial intermediary committee usually composed of 10–20 local women or men who provide financial assistance to its members by providing them finance in the a minimal interest rate. Kerala was on the  top in the list of the states in India who availed credit through Self Help Groups (SHGs). 

Which of the following schemes has been launched specifically for helping Senior Citizens to avail loan by mortgage of the residential property?

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

  1. English Mortgage Scheme

  2. Senior Capital Loan Scheme

  3. Reverse Mortgage Loan Scheme

  4. DEMAT Account Scheme

Show answer
Correct Option: C
Explanation:

In order to help senior citizens who own a home but do not want to sell them, and yet, supplement their regular cash flow, the government of India has introduced the ‘Reverse Mortgage Scheme, 2008’. 

It helps the elderly to tap into the value of their residential property while living in the house during their lifetime.

Which of the following is/are the major problem(s) of rural indebtedness ?
A) The Indian farmer borrows year after year but is not a position to clear off his loans.
B) The size of the loans taken by the Indian farmer is too large whereas his agricultural output is not large enough to play off his debt.
C) Most of the farmers are still taking loans from the informal sources, which charge a very high rate of interest.

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

  1. Only A

  2. Only B

  3. Only C

  4. All A, B and C

Show answer
Correct Option: D
Explanation:

The major problems of rural indebtedness is that the Indian farmers borrows loan every year from the informal sources which charge very high rate of interest. Even the amount of the loan is very huge which the farmers are not able to repay from their annual earnings which creates a debt trap out of their life. 

Which of the following is the abbreviated name of the new Act which deals with money laundering?

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

  1. AILTA

  2. PERDA

  3. TERLS

  4. PMLA

Show answer
Correct Option: D
Explanation:

PMLA: Prevention of Money Laundering Act (2002)(2002).

The approach of 'Micro-Credit' or 'Banking with the poor' is comparatively a new concept in the field of rural credit. This approach has been tried very successfully in which of the following countries?

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

  1. Bangladesh

  2. India

  3. China

  4. Japan

Show answer
Correct Option: A
Explanation:

Microcredit is generally considered to have originated with the Grameen Bank founded in Bangladesh in 1983.

Muhammad Yunus is a Bangladeshi social entrepreneur, banker, economist, and civil society leader who was awarded the Nobel Peace Prize for founding the Grameen Bank and pioneering the concepts of microcredit and microfinance.

The most important reason for an investor to prefer a Bank deposit is _________.

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

  1. The credit worthiness of the Bank.

  2. The Bank does not invest in the securities.

  3. The Bank offers a guarantee.

  4. All of the above.

Show answer
Correct Option: A
Explanation:

Creditworthiness is how a lender determines that you will default on your debt obligations, or how worthy you are to receive new credit. Your creditworthiness is what creditors look at before they approve any new credit to you.

Banks offer lower interest rates on saving account as compared to term deposits. It is because of this reason, investors opt for term deposit accounts.

If credit facility applied for is rejected, the reasons therefore should be briefly mentioned in the __________.

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

  1. loan applications received and disposal register

  2. opinion reports

  3. loan rejection register

  4. none of the above

Show answer
Correct Option: A
Explanation:

If the credit facility applied for in a bank is rejected due to any reason, then it is the responsibility of the respective bank to state the reasons briefly on the loan application received by the bank from the account holder and on the disposal register thereafter.