The SBI Clerk 2024 exam is highly competitive and demands a deep understanding of advanced banking concepts, quantitative aptitude, logical reasoning, and current affairs. To help you level up your preparation, here are 50 high-level, challenging multiple-choice questions (MCQs) designed to test your knowledge and skills across various subjects relevant to the exam.
1. The Reserve Bank of India (RBI) controls the money supply through a mechanism known as:
A) Bank Rate Policy
B) Liquidity Adjustment Facility
C) Open Market Operations
D) Cash Reserve Ratio
Answer: C) Open Market Operations
2. Which of the following can be considered as a non-performing asset (NPA)?
A) A loan on which interest is being regularly paid
B) A loan on which interest has been overdue for 90 days or more
C) A loan on which principal is being paid regularly
D) A loan that is performing as per schedule
Answer: B) A loan on which interest has been overdue for 90 days or more
3. What is the statutory liquidity ratio (SLR) as per the current guidelines by the RBI?
A) 12%
B) 15%
C) 18%
D) 19%
Answer: D) 19%
4. Which of the following terms refers to the process of transferring a bank loan from one bank to another?
A) Loan Syndication
B) Loan Sale
C) Loan Assignment
D) Loan Restructuring
Answer: C) Loan Assignment
5. In the context of banking, which of the following is used to measure the risk-adjusted return on a portfolio?
A) Alpha
B) Beta
C) Sharpe Ratio
D) Z-Score
Answer: C) Sharpe Ratio
6. Which of the following is the primary purpose of Basel III norms?
A) To enhance transparency in the banking system
B) To regulate the interest rates in the economy
C) To strengthen the capital adequacy requirements of banks
D) To regulate the liquidity positions of banks
Answer: C) To strengthen the capital adequacy requirements of banks
7. Which of the following is the highest authority for regulating and supervising the working of the foreign exchange market in India?
A) RBI
B) SEBI
C) Ministry of Finance
D) IRDAI
Answer: A) RBI
8. Which of the following best describes the term “Revaluation Reserve”?
A) It is the accumulated depreciation of assets in the books of accounts.
B) It reflects the increase in the value of fixed assets after revaluation.
C) It is the reserve created for contingencies.
D) It shows the accumulated profits and losses in the organization.
Answer: B) It reflects the increase in the value of fixed assets after revaluation.
9. In which of the following situations will the RBI most likely intervene in the foreign exchange market?
A) When the INR strengthens against the USD
B) When the INR weakens excessively against the USD
C) When the inflation rate drops below the target
D) When the GDP growth rate exceeds projections
Answer: B) When the INR weakens excessively against the USD
10. What is the maximum limit for a single loan to be classified as a priority sector lending (PSL) loan for a rural area under the guidelines of RBI?
A) Rs. 50 lakh
B) Rs. 1 crore
C) Rs. 10 crore
D) Rs. 20 crore
Answer: B) Rs. 1 crore
11. Which of the following banks has the highest credit rating in India as of 2024?
A) ICICI Bank
B) HDFC Bank
C) SBI
D) Kotak Mahindra Bank
Answer: B) HDFC Bank
12. In which of the following cases will the rate of interest on the loan typically increase under floating interest rate terms?
A) When the RBI cuts the repo rate
B) When the inflation rate falls below the target
C) When the base rate set by the bank rises
D) When the government introduces new tax policies
Answer: C) When the base rate set by the bank rises
13. Which of the following options is an example of an “Off-balance-sheet” item for a bank?
A) Loan provisions
B) Credit derivatives
C) Real estate holdings
D) Cash and cash equivalents
Answer: B) Credit derivatives
14. Under the Insolvency and Bankruptcy Code (IBC) of India, what is the maximum period allowed for the completion of the corporate insolvency resolution process?
A) 90 days
B) 120 days
C) 180 days
D) 270 days
Answer: C) 180 days
15. Which of the following financial instruments is most likely to be used by a commercial bank to hedge against a foreign exchange risk?
A) Treasury Bills
B) Forward Contracts
C) Bonds
D) Credit Default Swaps
Answer: B) Forward Contracts
16. In banking operations, which of the following terms refers to the minimum reserve of liquid assets that a bank must hold in the form of cash, gold, or other approved securities?
A) Statutory Liquidity Ratio (SLR)
B) Cash Reserve Ratio (CRR)
C) Base Rate
D) Liquidity Adjustment Facility (LAF)
Answer: A) Statutory Liquidity Ratio (SLR)
17. What is the main objective of the Marginal Cost of Funds Based Lending Rate (MCLR)?
A) To determine the interest rate on government bonds
B) To set a uniform interest rate for all commercial banks
C) To enable banks to price their loans competitively
D) To calculate the maximum interest rate a bank can charge
Answer: C) To enable banks to price their loans competitively
18. Which of the following is an example of a capital market instrument?
A) Treasury Bills
B) Fixed Deposits
C) Corporate Bonds
D) Savings Accounts
Answer: C) Corporate Bonds
19. The concept of “Basel I” refers to:
A) Capital adequacy norms for banks
B) International banking rules
C) Anti-money laundering guidelines
D) Risk-weighted assets framework
Answer: A) Capital adequacy norms for banks
20. The Securities Exchange Board of India (SEBI) was established in which year?
A) 1985
B) 1990
C) 1992
D) 1995
Answer: C) 1992
21. Which among the following is the best description of the “Repo Rate”?
A) The rate at which the government borrows from RBI
B) The rate at which RBI lends to commercial banks
C) The rate at which commercial banks lend to customers
D) The rate at which RBI lends to commercial banks for longer periods
Answer: B) The rate at which RBI lends to commercial banks
22. Which of the following acts governs the functioning of Cooperative Banks in India?
A) Reserve Bank of India Act, 1934
B) Banking Regulation Act, 1949
C) Cooperative Societies Act, 1912
D) NABARD Act, 1982
Answer: B) Banking Regulation Act, 1949
23. Which of these banks does not fall under the category of a “Scheduled Commercial Bank”?
A) Punjab National Bank
B) Indian Bank
C) Bandhan Bank
D) Indian Overseas Bank
Answer: C) Bandhan Bank
24. Which term is used to describe a situation where a bank’s lending exceeds its available reserves and capital base?
A) Over-leveraged
B) Insolvent
C) Under-capitalized
D) Under-leveraged
Answer: A) Over-leveraged
25. Which of the following financial markets is known for the sale of government securities and short-term instruments?
A) Capital Market
B) Commodity Market
C) Money Market
D) Derivative Market
Answer: C) Money Market
26. Which of the following is NOT a part of the “cash management” services provided by banks?
A) Cash concentration services
B) Automated clearing house services
C) Bank overdraft services
D) Treasury management services
Answer: C) Bank overdraft services
27. The concept of “Gilt-edged Securities” refers to:
A) High-risk bonds
B) Government-issued bonds
C) Foreign bonds
D) Corporate bonds
Answer: B) Government-issued bonds
28. Which of the following measures would most likely help a country to control inflation?
A) Lowering interest rates
B) Increasing public spending
C) Raising reserve requirements for banks
D) Lowering taxes
Answer: C) Raising reserve requirements for banks
29. Which of the following is the correct definition of a “Non-banking Financial Company (NBFC)” as per the Reserve Bank of India?
A) A company providing loans and advances but not accepting deposits
B) A company accepting public deposits and giving loans
C) A company providing insurance services
D) A company issuing shares and bonds
Answer: A) A company providing loans and advances but not accepting deposits
30. What is the full form of “RTGS” in banking transactions?
A) Real-time Gross Settlement
B) Realtime Government Settlement
C) Reciprocal Trading Group System
D) Real-Time Government System
Answer: A) Real-time Gross Settlement
31. The primary objective of financial inclusion is:
A) To regulate the interest rates in the economy
B) To provide credit at cheaper rates
C) To make financial services available to the unbanked population
D) To promote savings in the economy
Answer: C) To make financial services available to the unbanked population
32. What is the meaning of the term “Basel III liquidity coverage ratio”?
A) The ratio that ensures banks have enough liquid assets to cover potential liabilities in a 30-day stress period
B) The ratio for capital adequacy to be maintained by banks
C) The liquidity ratio required by a bank to maintain in short-term borrowings
D) The amount of capital a bank needs to maintain in a long-term lending portfolio
Answer: A) The ratio that ensures banks have enough liquid assets to cover potential liabilities in a 30-day stress period
33. Which of the following can be used by a commercial bank to hedge against interest rate risk?
A) Forward contracts
B) Interest rate swaps
C) Credit derivatives
D) Futures contracts
Answer: B) Interest rate swaps
34. The primary purpose of the “Fiscal Responsibility and Budget Management (FRBM) Act” is to:
A) Regulate the inflation rate in the economy
B) Reduce the fiscal deficit of the government
C) Enhance economic growth
D) Maintain a stable interest rate
Answer: B) Reduce the fiscal deficit of the government
35. Which of the following options is an example of an “Off-balance-sheet” item for a bank?
A) Loan provisions
B) Credit derivatives
C) Real estate holdings
D) Cash and cash equivalents
Answer: B) Credit derivatives
36. Which of the following is a feature of an “Islamic Bank”?
A) It earns interest on loans
B) It does not deal with interest in any form
C) It provides unsecured loans
D) It provides loans at a fixed interest rate
Answer: B) It does not deal with interest in any form
37. What is the term for when a bank has more liabilities than its assets?
A) Insolvency
B) Over-leverage
C) Solvency
D) Capital adequacy
Answer: A) Insolvency
38. What is the minimum capital requirement for a new private sector bank in India as per the RBI guidelines?
A) Rs. 50 crore
B) Rs. 100 crore
C) Rs. 200 crore
D) Rs. 500 crore
Answer: B) Rs. 100 crore
39. Which of the following instruments is used by the government to borrow money in the money market?
A) Commercial Paper
B) Treasury Bills
C) Certificate of Deposit
D) Repurchase Agreement
Answer: B) Treasury Bills
40. Which of the following is NOT considered an indicator of liquidity risk in a bank’s operations?
A) Cash reserve ratio
B) Liquidity coverage ratio
C) Capital adequacy ratio
D) Loan-to-deposit ratio
Answer: C) Capital adequacy ratio
41. Which of the following measures would be most effective in controlling the inflationary pressure in the economy?
A) Lowering the repo rate
B) Increasing the CRR (Cash Reserve Ratio)
C) Decreasing taxes
D) Raising government spending
Answer: B) Increasing the CRR (Cash Reserve Ratio)
42. What is the term used to refer to the difference between the market price of a bond and its face value?
A) Capital gain
B) Premium
C) Discount
D) Yield
Answer: B) Premium
43. What is the main function of the National Payments Corporation of India (NPCI)?
A) To regulate the payments industry
B) To facilitate electronic payment systems in India
C) To issue currency notes
D) To govern the financial markets
Answer: B) To facilitate electronic payment systems in India
44. What is the minimum limit for an amount to be eligible for a transaction under the National Electronic Funds Transfer (NEFT) system?
A) Rs. 10
B) Rs. 100
C) Rs. 500
D) No limit
Answer: D) No limit
45. Which of the following financial instruments is NOT typically traded in the money market?
A) Treasury Bills
B) Certificate of Deposit
C) Corporate Bonds
D) Repurchase Agreements
Answer: C) Corporate Bonds
46. What is the term used to refer to a financial instrument that allows an investor to hedge or speculate on the price of an asset?
A) Options
B) Futures
C) Bonds
D) Mutual funds
Answer: B) Futures
47. In the context of banking, what is the term “capital adequacy ratio” (CAR) used to measure?
A) The bank’s ability to pay dividends
B) The risk of lending decisions
C) The proportion of a bank’s capital to its risk-weighted assets
D) The rate of return on assets
Answer: C) The proportion of a bank’s capital to its risk-weighted assets
48. Which of the following is used by the Reserve Bank of India (RBI) to inject liquidity into the financial system?
A) Selling Government Securities
B) Open Market Operations
C) Bank Rate Policy
D) Cash Reserve Ratio
Answer: B) Open Market Operations
49. In banking, the term “Non-Performing Asset” (NPA) refers to a loan where:
A) The loan is overdue for more than 30 days
B) The borrower has defaulted on interest payments for 60 days
C) The loan’s principal is overdue for 90 days or more
D) The loan has been settled
Answer: C) The loan’s principal is overdue for 90 days or more
50. The term “cryptocurrency” is most closely associated with which of the following?
A) Digital payments
B) Cash reserves
C) Blockchain technology
D) Central Bank Digital Currency
Answer: C) Blockchain technology
These 50 high-level MCQs cover a wide range of complex topics and concepts that are essential for cracking the SBI Clerk 2024 exam. By consistently practicing and understanding the underlying principles behind each question, you’ll be well-equipped to excel in your upcoming exam. Keep challenging yourself and stay focused!
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Sidhant Singh is a highly accomplished professional educator with a diverse academic background. He holds a Master’s degree in History, an MSc in Electrical Engineering and a PhD, demonstrating his extensive knowledge and expertise in both the humanities and the sciences. His unique combination of skills enables him to offer a well-rounded perspective in his teaching and research, making him a valuable resource for students across various fields.