Quick Answer: What This Banking Awareness Quiz Covers
Banking Awareness Quiz: 15 MCQs on RBI, NPAs and Payment Systems
Quick Answer: This banking awareness quiz gives you 15 PYQ-style MCQs spanning five high-yield areas: RBI monetary policy instruments, NPA classification and the SARFAESI Act 2002, NPCI payment rails (UPI, IMPS, AePS, NACH), NEFT/RTGS settlement and priority-sector lending targets. Attempt all 15 questions in 10 minutes without looking at the answer key, then check the one-line explanations and the score bands to see exactly where you stand.
- Quick Answer: What This Banking Awareness Quiz Covers
- Quiz Instructions and Exam Relevance
- Section 1: RBI and Monetary Policy MCQs (Q1–Q4)
- Section 2: NPAs and SARFAESI MCQs (Q5–Q8)
- Section 3: Payment Systems and NPCI Rails MCQs (Q9–Q12)
- Section 4: Priority-Sector Lending MCQs (Q13–Q15)
- Answer Key with One-Line Explanations
- Score Analysis: Where You Stand
- Key Facts Cheat Sheet: RBI, NPA, NPCI, PSL
- Common Mistakes Aspirants Make in Banking Awareness
- Next Practice Quizzes and Resources
- Frequently Asked Questions
- Q: What is the time limit for this banking awareness quiz?
- Q: Is this quiz useful for SSC and UPSC exams?
- Q: How is an NPA classified as per RBI norms?
- Q: Which payment system settles transactions in real time?
- Q: Are the answers fact-checked?
- Related reading
Quiz Instructions and Exam Relevance
- Time limit: 10 minutes for 15 questions — roughly 40 seconds per question, simulating real exam pressure.
- Marking pattern: +1 for every correct answer, no negative marking (banking awareness sections in most exams are score-boosters).
- Attempt rule: Do not scroll to the answer key until you finish all 15 questions.
- Relevance: These topics appear directly in IBPS PO/Clerk and SBI exams under General/Banking Awareness, in SSC CGL and CHSL as economy questions, in UPSC Prelims economy sections (especially RBI tools and PSL), and occasionally in CLAT comprehension-based passages on banking and finance.
Section 1: RBI and Monetary Policy MCQs (Q1–Q4)
Q1. The repo rate is the rate at which:
(a) RBI lends to commercial banks against government securities (b) Banks lend to RBI (c) Banks lend to their best customers (d) Banks lend to each other
Q2. The Monetary Policy Committee (MPC) of the RBI consists of how many members?
(a) 4 (b) 5 (c) 6 (d) 8
Q3. Under which monetary policy tool does the RBI absorb liquidity by inviting bids from banks?
(a) Repo (b) Reverse repo (c) Variable rate reverse repo auction (VRRR) (d) CRR
Q4. The Cash Reserve Ratio (CRR) is maintained by banks as:
(a) Cash in their own chests (b) A deposit with the RBI earning interest (c) A deposit with the RBI earning no interest (d) Government securities with SEBI
Section 2: NPAs and SARFAESI MCQs (Q5–Q8)
Q5. As per RBI norms, a term loan becomes a Non-Performing Asset (NPA) when interest or principal remains overdue for more than:
(a) 30 days (b) 60 days (c) 90 days (d) 180 days
Q6. The SARFAESI Act, 2002 allows secured creditors (banks and NBFCs) to:
(a) File only civil suits against defaulters (b) Recover dues by seizing and selling secured assets without court intervention (c) Waive loans entirely (d) Refer only to Lok Adalats
Q7. An Asset Reconstruction Company (ARC) acquires NPAs from banks primarily through:
(a) Equity investment (b) Issue of Security Receipts (SRs) (c) Demand drafts (d) Cash reserve ratio
Q8. An account showing early stress signals but not yet an NPA is classified under:
(a) SMA category (b) D1 category (c) Wilful defaulter category (d) Loss asset category
Section 3: Payment Systems and NPCI Rails MCQs (Q9–Q12)
Q9. Which payment system settles transactions individually and in real time with a minimum of ₹2 lakh?
(a) NEFT (b) RTGS (c) IMPS (d) NACH
Q10. Since December 2019, NEFT operates:
(a) In 8-hour batches (b) On a 24x7x365 half-hourly batch basis (c) Only on working days (d) Only for amounts above ₹1 lakh
Q11. The immediate payment service used to withdraw cash using Aadhaar authentication without a card is:
(a) UPI 2.0 (b) AePS (c) NACH (d) Bharat Bill Pay
Q12. Which NPCI product is built as an interoperable mobile-payment system using Virtual Payment Addresses?
(a) IMPS (b) UPI (c) RuPay (d) NETC
Section 4: Priority-Sector Lending MCQs (Q13–Q15)
Q13. The overall priority-sector lending target for domestic scheduled commercial banks is what percentage of ANBC or CEOBE (whichever is higher)?
(a) 32% (b) 36% (c) 40% (d) 45%
Q14. Within the overall PSL target, the sub-target for agriculture is:
(a) 8% (b) 10% (c) 12% (d) 18%
Q15. PSLC (Priority Sector Lending Certificate) allows banks to:
(a) Lend directly to farmers only (b) Trade PSL achievement among banks without transferring loan assets or risk (c) Waive PSL targets (d) Convert NPAs into priority-sector loans
Answer Key with One-Line Explanations
- (a) — The repo rate is the policy rate at which the RBI lends short-term funds to banks against government securities; check the current rate at rbi.org.in.
- (c) — The MPC has six members: the RBI Governor (chair), a Deputy Governor in charge of monetary policy, one RBI officer, and three external members appointed by the Centre.
- (c) — VRRR auctions let the RBI absorb variable liquidity by inviting bids, unlike the fixed-rate reverse repo window.
- (c) — CRR is kept as a cash balance with the RBI and earns no interest, making it the RBI’s strongest liquidity absorption tool.
- (c) — The 90-day rule: a loan becomes an NPA when interest and/or principal stays overdue for more than 90 days (a crop loan for short-duration crops is overdue beyond two crop seasons — a common trap).
- (b) — SARFAESI, 2002 lets secured creditors issue a demand notice (60 days), take possession, and sell secured assets without approaching a court or tribunal.
- (b) — ARCs buy NPAs by issuing Security Receipts to banks under the SARFAESI framework; SARFAESI-registered ARCs are regulated by the RBI.
- (a) — SMA (Special Mention Account) flags stress at 0–30 (SMA-0), 31–60 (SMA-1) and 61–90 (SMA-2) days overdue, before the NPA tag.
- (b) — RTGS settles each transaction individually and in real time, with a minimum of ₹2 lakh and no upper ceiling.
- (b) — NEFT runs 24x7x365 in half-hourly batches since December 16, 2019.
- (b) — AePS (Aadhaar-enabled Payment System) allows cardless cash withdrawal and balance enquiry using Aadhaar biometric authentication.
- (b) — UPI uses Virtual Payment Addresses for interoperable instant mobile transfers; see npci.org.in for product details.
- (c) — The overall PSL target for domestic scheduled commercial banks is 40% of ANBC or CEOBE, whichever is higher.
- (b) — The agriculture sub-target is 18% of ANBC, of which 10% is for small and marginal farmers — so option (d) is the overall agri figure; if you chose (d), re-read Q14 carefully.
- (b) — PSLCs let banks trade priority-sector achievement as certificates; only the credit credential transfers, not the loan asset or its risk.
Score Analysis: Where You Stand
| Score | Verdict | Next Step |
|---|---|---|
| 13–15 | Exam-ready | Move to full-length mock tests and current-affairs digests on RBI announcements. |
| 10–12 | Strong, needs polish | Revise the cheat sheet below and re-attempt weak sections in 3 days. |
| 6–9 | Conceptual gaps | Read RBI’s FAQ pages on monetary policy and PSL norms before retrying. |
| 0–5 | Foundation stage | Start with a banking-awareness notes series, then return to this quiz. |
Key Facts Cheat Sheet: RBI, NPA, NPCI, PSL
| Topic | Key Fact |
|---|---|
| SARFAESI Act | Enacted 2002; demand notice gives borrower 60 days before possession action |
| NPA rule | Overdue > 90 days (agriculture: 2 crop seasons for short-duration crops) |
| SMA slabs | SMA-0: 0–30 days; SMA-1: 31–60; SMA-2: 61–90 |
| MPC | 6 members; meets at least four times a year (bi-monthly cycle) |
| RTGS | Real-time gross settlement, minimum ₹2 lakh, available 24×7 since December 2020 |
| NEFT | Half-hourly batches, 24x7x365 since December 2019 |
| IMPS / UPI | Instant 24×7 retail rails; UPI uses VPAs, limit ₹1 lakh (₹5 lakh for hospitals/education per NPCI norms) |
| PSL | 40% of ANBC/CEOBE overall; 18% agriculture; 7.5% MSME for smaller banks category |
Common Mistakes Aspirants Make in Banking Awareness
- NEFT vs RTGS settlement: RTGS settles each transaction individually in real time; NEFT settles in half-hourly batches. “Instant” is not the same as “real-time gross”.
- SMA vs NPA: SMA-2 (61–90 days overdue) is still a standard asset; the NPA tag applies only beyond 90 days.
- Repo vs reverse repo direction: Repo = RBI lends to banks; reverse repo = RBI borrows from banks. Direction questions are frequent.
- PSL 40% vs 18% vs 10%: 40% is the overall target, 18% agriculture, and 10% within that for small and marginal farmers — options often mix these.
- CRR vs SLR: CRR is cash with the RBI (no interest); SLR is investments in approved securities held by the bank itself.
Next Practice Quizzes and Resources
- RBI circulars and monetary policy reports — rbi.org.in
- NPCI product specifications (UPI, AePS, NACH, IMPS) — npci.org.in
- Government press releases on banking and economy — pib.gov.in
- More practice quizzes and current-affairs digests on Hmmnm!! covering economy, SSC and UPSC preparation.
Frequently Asked Questions
Q: What is the time limit for this banking awareness quiz?
Suggested limit is 10 minutes for all 15 questions — about 40 seconds each — to simulate exam pressure. Check the answer key only after you submit your attempt.
Q: Is this quiz useful for SSC and UPSC exams?
Yes. RBI tools, NPAs and PSL questions appear in SSC CGL/CHSL general awareness, banking exam General Awareness sections, and UPSC Prelims economy questions.
Q: How is an NPA classified as per RBI norms?
A loan becomes an NPA when interest or principal remains overdue for more than 90 days; for agriculture, the crop-season rule applies.
Q: Which payment system settles transactions in real time?
RTGS settles each transaction individually in real time with a minimum of ₹2 lakh; UPI and IMPS are instant retail rails but not gross real-time wholesale settlement systems.
Q: Are the answers fact-checked?
Yes. Every answer follows verified RBI and NPCI norms, cross-checked against rbi.org.in and npci.org.in, with one-line explanations for quick revision.
Related reading
- Banking Terms for IBPS PO Prelims 2026: Repo, CRR, SLR and NPA Definitions in One Revision Sheet
- Percentage Shortcuts: Fraction Equivalents and Base-Change Tricks for SSC & Bank Exams
Quick revision
- Time limit: 10 minutes for 15 questions — roughly 40 seconds per question, simulating real exam pressure.
- Marking pattern: +1 for every correct answer, no negative marking (banking awareness sections in most exams are score-boosters).
- Attempt rule: Do not scroll to the answer key until you finish all 15 questions.
- Relevance: These topics appear directly in IBPS PO/Clerk and SBI exams under General/Banking Awareness, in SSC CGL and CHSL as economy questions, in UPSC Prelims…
- (a): — The repo rate is the policy rate at which the RBI lends short-term funds to banks against government securities; check the current rate at rbi.org.in.
- (c): — The MPC has six members: the RBI Governor (chair), a Deputy Governor in charge of monetary policy, one RBI officer, and three external members…
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