Tag: loans from banks and financial institutions

Questions Related to loans from banks and financial institutions

Which of the following refers to sub prime mortgage?

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

  1. Lending done by banks at rates below PLR

  2. Funds raised by the banks at sub-Libor rates

  3. Group of banks which are not rated as prime banks as per Banker's Almanac

  4. Lending done by financing institutions including banks to customers not meeting with normally required credit appraisal standards

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Correct Option: D

Which one is related with micro financing?

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

  1. SHG

  2. Anganwadi workers

  3. Women Entrepreneurs

  4. None of the above

Show answer
Correct Option: A
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. It is a part of micro financing as the amount of the loan is very minimum due to small group of people. 

In case of Term Loans, the period of limitation is calculated as three years from ________.

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

  1. date of documents

  2. date of sanction

  3. date of default

  4. due date of each installment

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Correct Option: D
Explanation:

A term loan is a monetary loan that is repaid in regular payments over a set period of time. Term loans usually last between one and ten years, but may last as long as 30 years in some cases. A term loan usually involves an unfixed interest rate that will add additional balance to be repaid.

For term loans payable in installments, the limitation period is 3 years for each installments, starting on the due date of each such installments.

Which of the following is considered an informal method of getting credit/finance?

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

  1. Internet banking

  2. Branch visits

  3. Going to moneylenders

  4. Telebanking

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Correct Option: C

As published in various newspapers, the Experian Credit Information Company of India is going to launch its operation in India soon. At present the only credit information bureau functional in India is

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

  1. AMFI

  2. ICRA

  3. CIBIL

  4. CRISIL

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Correct Option: C

Home Loans can be best canvassed among ____________.

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

  1. builders

  2. flat owners

  3. land developers

  4. individuals wanting to buy a flat or house

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Correct Option: D

Standard and Poor's is a Credit Rating Agency of international repute. Which of the following is one such agency of Indian origin?

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

  1. IBA

  2. BASEL

  3. SEBI

  4. CRISIL

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Correct Option: D

Which of the following correctly describes what sub-prime lending is?
A. Lending to the people who cannot repay the loans
B. Lending to the people who are high-value customers of the banks.
C. Lending to those who are not a regular customer of a bank

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: A
Explanation:

Subprime lending means giving loans to people who may have difficulty maintaining the repayment schedule, sometimes reflecting setbacks, such as unemployment, medical emergencies, etc.

Which of the following is not an institutional credit agency?

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

  1. Cooperative Society

  2. Moneylender

  3. Commercial Banks

  4. Regional Rural Banks

Show answer
Correct Option: B
Explanation:

Moneylenders are informal finance providers who are not registered under the government, as such, they fall under non-institutional credit agency. 

They may be rich farmers, friends or relatives from whom a person takes a loan on oral basis.

The power of the commercial banks to expand deposits through expanding their loans and advances is known as which of the following?

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

  1. Capital Expansion

  2. Credit Expansion

  3. Credit Control

  4. Credit Creation

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Correct Option: D