1. A financial institution is defined as:
A) A firm producing goods
B) An institution that facilitates financial transactions
C) Only commercial banks
D) Only stock exchanges
Answer: B
Explanation: Financial institutions deal with borrowing, lending, investment, and managing money.
2. The primary role of financial institutions is to:
A) Print currency
B) Mobilize savings and channel them into investment
C) Provide subsidies to farmers
D) Fix fiscal deficit
Answer: B
Explanation: Financial institutions bridge savers and borrowers.
3. Which of the following is a financial institution?
A) RBI
B) SBI
C) LIC
D) All of the above
Answer: D
Explanation: All are financial institutions, performing different roles.
4. Financial institutions are broadly classified into:
A) Banks and NBFCs
B) Monetary and Fiscal
C) Public and Private
D) Cooperative and Industrial
Answer: A
Explanation: They are mainly divided into banks & non-banking financial institutions.
5. The central financial institution of India is:
A) SEBI
B) NABARD
C) RBI
D) IRDAI
Answer: C
Explanation: RBI = central bank, regulator of financial system.
6. Which of the following is NOT a financial institution?
A) Insurance companies
B) Stock exchanges
C) Factories
D) NBFCs
Answer: C
Explanation: Factories are production units, not financial institutions.
7. Non-Banking Financial Institutions perform functions similar to:
A) Agricultural cooperatives
B) Banks but without banking license
C) Trade unions
D) Export companies
Answer: B
Explanation: NBFCs provide financial services but cannot issue demand deposits.
8. Development Financial Institutions (DFIs) provide:
A) Long-term credit to industries & infrastructure
B) Short-term loans only
C) Agricultural subsidies
D) Foreign exchange reserves
Answer: A
Explanation: DFIs → long-term finance for industry & infrastructure.
9. The main regulator of financial institutions in India is:
A) Ministry of Finance
B) SEBI
C) RBI
D) CAG
Answer: C
Explanation: RBI is chief regulator of Indian financial institutions.
10. Financial intermediaries include:
A) Banks
B) Insurance companies
C) Mutual funds
D) All of the above
Answer: D
Explanation: They act as middlemen between savers and borrowers.
11. Insurance companies are regulated in India by:
A) RBI
B) SEBI
C) IRDAI
D) Ministry of Finance
Answer: C
Explanation: Insurance Regulatory and Development Authority of India regulates insurance.
12. Pension funds in India are regulated by:
A) RBI
B) SEBI
C) PFRDA
D) NABARD
Answer: C
Explanation: Pension Fund Regulatory and Development Authority (PFRDA) regulates pensions.
13. The primary function of SEBI is:
A) Supervision of insurance sector
B) Regulation of capital markets
C) Control of money supply
D) Supervision of cooperative banks
Answer: B
Explanation: SEBI regulates stock exchanges, securities & capital markets.
14. Which of the following is a money market institution?
A) Mutual funds
B) Commercial banks
C) RBI
D) All of the above
Answer: D
Explanation: All participate in money market operations.
15. Which is the apex cooperative financial institution in India?
A) SEBI
B) RBI
C) NABARD
D) SIDBI
Answer: C
Explanation: NABARD = apex institution for agriculture & rural finance.
16. Which of the following provides venture capital finance?
A) Commercial banks
B) Venture capital funds
C) Insurance companies
D) RBI
Answer: B
Explanation: Venture capital funds support startups and innovation.
17. Stock exchanges are examples of:
A) Banking institutions
B) Non-banking financial institutions
C) Insurance institutions
D) Industrial institutions
Answer: B
Explanation: Stock exchanges = NBFCs regulating trading of securities.
18. Which of the following is a primary function of financial institutions?
A) Mobilizing savings
B) Allocating credit
C) Risk management
D) All of the above
Answer: D
Explanation: They perform mobilization, allocation, risk sharing.
19. Universal banking means:
A) One bank for one purpose
B) Banks providing multiple financial services under one roof
C) Only foreign banks
D) Small banks in rural areas
Answer: B
Explanation: Universal banks provide banking, insurance, investment services together.
20. Which of the following is NOT an NBFC?
A) HDFC Ltd.
B) LIC Housing Finance
C) PNB
D) Bajaj Finance
Answer: C
Explanation: PNB = commercial bank, not NBFC.
21. Microfinance institutions provide:
A) Small loans to poor & self-help groups
B) Long-term industrial finance
C) Foreign exchange loans
D) Loans only to corporates
Answer: A
Explanation: MFIs provide small loans to poor without collateral.
22. Which institution regulates microfinance in India?
A) SEBI
B) RBI
C) NABARD
D) Ministry of Rural Development
Answer: B
Explanation: RBI regulates MFIs since 2011.
23. Primary Agricultural Credit Societies (PACS) work at the:
A) District level
B) Block level
C) Village level
D) State level
Answer: C
Explanation: PACS are village-level cooperative credit institutions.
24. The first Indian Development Financial Institution was:
A) IDBI
B) IFCI
C) ICICI
D) NABARD
Answer: B
Explanation: IFCI (1948) was the first DFI in India.
25. Which of the following is a key feature of financial institutions?
A) Provide liquidity
B) Transfer resources
C) Risk transformation
D) All of the above
Answer: D
Explanation: Financial institutions transform savings into investment, provide liquidity & manage risk.
26. The Banking Regulation Act of India was passed in:
A) 1934
B) 1947
C) 1949
D) 1955
Answer: C
Explanation: Banking Regulation Act, 1949 governs commercial banks in India.
27. A scheduled bank is included in:
A) First Schedule of RBI Act
B) Second Schedule of RBI Act
C) Third Schedule of RBI Act
D) Banking Companies Act
Answer: B
Explanation: Scheduled banks appear in Second Schedule of RBI Act, 1934.
28. The largest public sector bank in India is:
A) Punjab National Bank
B) Canara Bank
C) State Bank of India
D) Bank of Baroda
Answer: C
Explanation: SBI is India’s largest PSB by assets & branches.
29. Which of the following is NOT a commercial bank?
A) ICICI Bank
B) SBI
C) HDFC Bank
D) NABARD
Answer: D
Explanation: NABARD = development financial institution, not a commercial bank.
30. The major source of funds for commercial banks is:
A) Government grants
B) Public deposits
C) RBI loans
D) Foreign borrowings
Answer: B
Explanation: Banks rely primarily on deposits (savings, current, fixed).
31. Cooperative banks are regulated by:
A) Only RBI
B) Only NABARD
C) RBI and NABARD
D) SEBI
Answer: C
Explanation: Cooperative banks are jointly regulated by RBI & NABARD.
32. Which of the following institutions cannot accept demand deposits?
A) Commercial banks
B) Cooperative banks
C) NBFCs
D) Payment banks
Answer: C
Explanation: NBFCs are prohibited from demand deposits.
33. Which of the following is a type of NBFC?
A) Housing Finance Company
B) Microfinance Institution
C) Infrastructure Finance Company
D) All of the above
Answer: D
Explanation: NBFCs operate in housing, microfinance, infrastructure finance.
34. Which regulator oversees NBFCs in India?
A) SEBI
B) RBI
C) Ministry of Finance
D) IRDAI
Answer: B
Explanation: NBFCs are under RBI regulation.
35. A key difference between NBFCs and banks is:
A) NBFCs cannot lend
B) NBFCs cannot accept demand deposits or issue cheques
C) NBFCs cannot raise equity capital
D) NBFCs cannot be private sector
Answer: B
Explanation: NBFCs cannot issue cheques or accept demand deposits.
36. Payment Banks in India can accept deposits up to:
A) ₹1 lakh
B) ₹2 lakh
C) ₹5 lakh
D) No limit
Answer: B
Explanation: Payment banks can accept deposits up to ₹2 lakh (RBI 2021 update).
37. Small Finance Banks focus mainly on:
A) Large industries
B) Priority sector lending
C) International trade
D) Stock market
Answer: B
Explanation: SFBs target small borrowers, MSMEs, farmers.
38. Which was India’s first Small Finance Bank?
A) Ujjivan SFB
B) Equitas SFB
C) Capital SFB
D) AU SFB
Answer: D
Explanation: AU Small Finance Bank was the first.
39. Microfinance Institutions (MFIs) are meant for:
A) Big corporates
B) Small borrowers without collateral
C) Exporters only
D) Insurance firms
Answer: B
Explanation: MFIs provide small loans to poor households/SHGs.
40. Which regulator controls Microfinance Institutions (NBFC-MFIs)?
A) NABARD
B) RBI
C) SEBI
D) Ministry of Rural Development
Answer: B
Explanation: Since 2011, RBI regulates NBFC-MFIs.
41. Regional Rural Banks (RRBs) were established in:
A) 1969
B) 1975
C) 1980
D) 1991
Answer: B
Explanation: RRBs were launched in 1975 for rural credit.
42. The ownership of RRBs is shared by:
A) Centre, State, Sponsor Bank
B) Only Centre
C) Centre & RBI
D) NABARD & States
Answer: A
Explanation: Ownership: 50% Centre, 15% State, 35% Sponsor Bank.
43. Urban Cooperative Banks mainly serve:
A) Farmers
B) Urban and semi-urban customers
C) Exporters
D) Govt only
Answer: B
Explanation: UCBs → urban retail & small business loans.
44. The term “universal banking” means:
A) One bank, one function
B) Banks offering all services under one roof
C) Only private banks
D) Only rural banks
Answer: B
Explanation: Universal banks = commercial + investment + insurance services.
45. Which of the following is NOT a function of commercial banks?
A) Accepting deposits
B) Granting loans
C) Issuing currency
D) Credit creation
Answer: C
Explanation: Only RBI issues currency, not commercial banks.
46. Which type of bank is EXIM Bank?
A) Cooperative bank
B) Development financial institution
C) Private commercial bank
D) Microfinance institution
Answer: B
Explanation: Export-Import Bank of India = development financial institution for trade.
47. Which institution refinances agriculture credit in India?
A) RBI
B) NABARD
C) SIDBI
D) SBI
Answer: B
Explanation: NABARD refinances agriculture loans.
48. SIDBI focuses on financing:
A) Large industries
B) Small industries & MSMEs
C) Agriculture
D) Exports only
Answer: B
Explanation: Small Industries Development Bank of India finances MSMEs.
49. The major source of NBFC funding is:
A) Public deposits
B) Market borrowings and equity
C) Printing currency
D) Government subsidies
Answer: B
Explanation: NBFCs raise funds via equity & borrowings, not demand deposits.
50. A key role of NBFCs in India is:
A) Controlling inflation
B) Providing alternative credit to underserved sectors
C) Printing money
D) Acting as central bank
Answer: B
Explanation: NBFCs fill credit gaps in housing, vehicles, microfinance.
51. The first Development Financial Institution (DFI) set up in India was:
A) IDBI
B) ICICI
C) IFCI
D) NABARD
Answer: C
Explanation: IFCI (1948) was India’s first DFI to provide long-term industrial finance.
52. Which institution was set up in 1964 to coordinate term-lending institutions?
A) IFCI
B) IDBI
C) ICICI
D) NABARD
Answer: B
Explanation: IDBI (1964) was created as a subsidiary of RBI, later became an independent institution.
53. ICICI was established in 1955 with assistance from:
A) World Bank
B) IMF
C) Asian Development Bank
D) WTO
Answer: A
Explanation: ICICI was set up with World Bank support to promote private industrial finance.
54. Which financial institution provides credit for exports and imports in India?
A) NABARD
B) SIDBI
C) EXIM Bank
D) IFCI
Answer: C
Explanation: EXIM Bank of India (1982) specializes in foreign trade finance.
55. NABARD was established in:
A) 1975
B) 1982
C) 1991
D) 2000
Answer: B
Explanation: NABARD (1982) finances agriculture and rural development.
56. Which institution refinances loans to small industries and MSMEs?
A) NABARD
B) SIDBI
C) IDBI
D) EXIM Bank
Answer: B
Explanation: SIDBI (1990) focuses on MSME development.
57. Industrial Reconstruction Bank of India (IRBI) was later renamed as:
A) SIDBI
B) IFCI
C) IIBI
D) ICICI
Answer: C
Explanation: IRBI was restructured as IIBI (Industrial Investment Bank of India) in 1997.
58. Which institution provides long-term agricultural finance in India?
A) NABARD
B) EXIM Bank
C) IFCI
D) ICICI
Answer: A
Explanation: NABARD is the apex rural credit institution.
59. The apex financial institution for housing sector in India is:
A) NHB
B) SIDBI
C) NABARD
D) IRDAI
Answer: A
Explanation: National Housing Bank (1988) regulates housing finance companies.
60. Which Indian financial institution regulates the insurance industry?
A) IRDAI
B) SEBI
C) RBI
D) PFRDA
Answer: A
Explanation: Insurance Regulatory and Development Authority of India (IRDAI) regulates insurance.
61. PFRDA regulates:
A) Insurance sector
B) Pension funds
C) Capital markets
D) Cooperative banks
Answer: B
Explanation: PFRDA (2003) supervises pension funds like NPS.
62. Which is the oldest Bretton Woods Institution?
A) WTO
B) IMF
C) World Bank
D) OECD
Answer: B
Explanation: Both IMF & World Bank were set up in 1944, but IMF began functioning first.
63. The main function of IMF is:
A) Long-term infrastructure finance
B) Providing short-term balance of payments support
C) Agricultural finance
D) Export promotion
Answer: B
Explanation: IMF lends short-term BoP support & stabilizes exchange rates.
64. The World Bank provides:
A) Short-term loans
B) Long-term development finance
C) Loans to private firms only
D) Microfinance
Answer: B
Explanation: World Bank provides long-term infrastructure & poverty alleviation loans.
65. The International Finance Corporation (IFC) is a part of:
A) IMF
B) WTO
C) World Bank Group
D) BIS
Answer: C
Explanation: IFC = World Bank Group arm financing private sector.
66. Asian Development Bank (ADB) was founded in:
A) 1944
B) 1956
C) 1966
D) 1972
Answer: C
Explanation: ADB was set up in 1966, headquartered in Manila.
67. The New Development Bank (NDB) is associated with:
A) ASEAN
B) BRICS nations
C) EU
D) OECD
Answer: B
Explanation: NDB = BRICS Bank, set up in 2014.
68. Which of the following is a member of AIIB (Asian Infrastructure Investment Bank)?
A) India
B) USA
C) Japan
D) UK (not a founding member)
Answer: A
Explanation: India is a founding member of AIIB (2016).
69. Bank for International Settlements (BIS) is headquartered in:
A) London
B) Basel
C) Washington DC
D) Geneva
Answer: B
Explanation: BIS (1930) in Basel = “central bank of central banks”.
70. Which Indian institution is called “Banker to Banks”?
A) SEBI
B) NABARD
C) RBI
D) IDBI
Answer: C
Explanation: RBI acts as banker to commercial banks.
71. Export Credit Guarantee Corporation of India (ECGC) provides:
A) Agricultural insurance
B) Export credit insurance
C) MSME loans
D) Housing finance
Answer: B
Explanation: ECGC offers insurance & guarantees to exporters.
72. Which institution is called “soft lender” providing concessional loans to poor countries?
A) IMF
B) IDA (International Development Association)
C) IFC
D) BIS
Answer: B
Explanation: IDA, part of World Bank, provides interest-free concessional loans.
73. GIC (General Insurance Corporation of India) was established in:
A) 1956
B) 1972
C) 1985
D) 1999
Answer: B
Explanation: GIC (1972) was set up after nationalization of general insurance.
74. Which international institution releases the “World Development Report”?
A) IMF
B) WTO
C) World Bank
D) UNDP
Answer: C
Explanation: World Bank publishes World Development Report annually.
75. Which international institution publishes “Global Financial Stability Report”?
A) IMF
B) World Bank
C) ADB
D) OECD
Answer: A
Explanation: IMF releases the GFSR twice a year.
76. The Reserve Bank of India was nationalized in:
A) 1935
B) 1947
C) 1949
D) 1950
Answer: C
Explanation: RBI, established in 1935, was nationalized in 1949.
77. Which Act governs the functioning of SEBI?
A) SEBI Act, 1988
B) SEBI Act, 1992
C) Securities Contract Act, 1956
D) Companies Act, 2013
Answer: B
Explanation: SEBI was given statutory powers under the SEBI Act, 1992.
78. IRDAI regulates which sector in India?
A) Capital market
B) Banking
C) Insurance
D) Pensions
Answer: C
Explanation: IRDAI (1999) regulates insurance companies.
79. PFRDA regulates which financial service?
A) Capital markets
B) Pension funds
C) Insurance
D) Cooperative banks
Answer: B
Explanation: PFRDA regulates pensions (NPS, Atal Pension Yojana).
80. The largest financial institution in India by assets is:
A) SBI
B) LIC
C) RBI
D) ICICI Bank
Answer: B
Explanation: LIC of India is the largest financial institution by assets.
81. Which bank is known as the “Banker to the Government”?
A) SBI
B) RBI
C) NABARD
D) EXIM Bank
Answer: B
Explanation: RBI maintains government accounts, manages debt → Banker to Govt.
82. The merger of 10 public sector banks into 4 larger entities took place in:
A) 2015
B) 2017
C) 2019
D) 2021
Answer: C
Explanation: In 2019, govt announced major PSU bank consolidation.
83. Which program was launched to promote financial inclusion in India?
A) Make in India
B) Jan Dhan Yojana
C) Skill India
D) Digital India
Answer: B
Explanation: PM Jan Dhan Yojana (2014) aimed at universal banking access.
84. Which initiative promotes “insurance for all” in India?
A) Jan Suraksha Yojana
B) Atal Pension Yojana
C) Ayushman Bharat
D) LIC Jeevan Suraksha
Answer: A
Explanation: Pradhan Mantri Suraksha Bima Yojana promotes affordable insurance.
85. Which is India’s first universal bank formed from an NBFC?
A) HDFC Bank
B) ICICI Bank
C) Kotak Mahindra Bank
D) Axis Bank
Answer: C
Explanation: Kotak Mahindra Bank (2003) became India’s first universal bank from an NBFC.
86. Which committee recommended banking sector reforms in 1991?
A) Rangarajan Committee
B) Narasimham Committee
C) Kelkar Committee
D) Urjit Patel Committee
Answer: B
Explanation: Narasimham Committee (1991) recommended liberalization of banking.
87. Which institution manages UPI in India?
A) RBI
B) SEBI
C) NPCI
D) IRDAI
Answer: C
Explanation: National Payments Corporation of India (NPCI) manages UPI, RuPay, IMPS.
88. The Digital Rupee (CBDC) pilot was launched by RBI in:
A) 2018
B) 2020
C) 2022
D) 2023
Answer: C
Explanation: CBDC pilot launched in 2022 by RBI.
89. Which institution regulates Mutual Funds in India?
A) RBI
B) SEBI
C) IRDAI
D) NABARD
Answer: B
Explanation: SEBI regulates mutual funds to protect investors.
90. The Basel Committee is related to:
A) Insurance
B) Banking regulation and supervision
C) Pension reforms
D) Stock market
Answer: B
Explanation: Basel norms provide guidelines on capital adequacy for banks.
91. Basel III norms require Indian banks to maintain minimum Capital Adequacy Ratio (CAR) of:
A) 7%
B) 8%
C) 9%
D) 12%
Answer: C
Explanation: Indian banks must maintain 9% CAR under Basel III.
92. Which Indian institution is responsible for credit rating of companies?
A) CRISIL, ICRA, CARE
B) RBI
C) SEBI
D) IRDAI
Answer: A
Explanation: Private credit rating agencies like CRISIL, ICRA provide ratings.
93. The main role of DFIs like NABARD and SIDBI is to provide:
A) Short-term working capital
B) Long-term development finance
C) Currency notes
D) Tax collection
Answer: B
Explanation: DFIs provide long-term finance for development projects.
94. Which of the following is NOT a public sector financial institution?
A) LIC
B) SBI
C) HDFC Bank
D) NABARD
Answer: C
Explanation: HDFC Bank is a private sector financial institution.
95. Which authority regulates chit funds in India?
A) RBI
B) SEBI
C) State Governments
D) Ministry of Finance
Answer: C
Explanation: Chit funds are regulated by state governments under Chit Funds Act, 1982.
96. The Financial Stability and Development Council (FSDC) is headed by:
A) RBI Governor
B) Finance Minister
C) Prime Minister
D) SEBI Chairman
Answer: B
Explanation: Finance Minister chairs FSDC, coordinating financial stability.
97. The institution that provides crop insurance in India is:
A) NABARD
B) Agriculture Insurance Company of India (AICIL)
C) RBI
D) IRDAI
Answer: B
Explanation: AICIL provides crop insurance schemes.
98. Which of the following is part of India’s financial infrastructure?
A) Payment systems
B) Clearing houses
C) Credit bureaus
D) All of the above
Answer: D
Explanation: All are components of financial infrastructure.
99. The Pradhan Mantri Mudra Yojana provides finance to:
A) Large corporates
B) Small entrepreneurs and MSMEs
C) Only farmers
D) State governments
Answer: B
Explanation: MUDRA Yojana (2015) supports micro & small enterprises.
100. The concept of “Financial Inclusion” means:
A) Providing financial services to all, especially weaker sections
B) Privatization of banks
C) Reducing number of branches
D) Increasing export finance only
Answer: A
Explanation: Financial inclusion = universal access to credit, savings, insurance, and payments.