Commercial Banking Flashcards
(27 cards)
[front]
What is a commercial bank?
a. Non-profit organization
b. Government agency
c. Profit-making financial institution
d. Credit cooperative
[back]
c. Profit-making financial institution
[front]
What do commercial banks primarily aim to do?
a. Provide insurance services
b. Help the government collect taxes
c. Earn profit by accepting deposits and granting loans
d. Serve only large corporations
[back]
c. Earn profit by accepting deposits and granting loans
[front]
What is another term for commercial banking?
a. Central banking
b. Development banking
c. Business or institutional banking
d. Social banking
[back]
c. Business or institutional banking
[front]
What are merchant services in commercial banking?
a. Services that involve selling merchandise
b. Tools for accepting and processing payments
c. Tools for customer support
d. Platforms for social media
[back]
b. Tools for accepting and processing payments
[front]
Why are merchant services important?
a. They reduce marketing costs
b. They enable secure, efficient payment processing
c. They offer foreign currency exchange
d. They regulate businesses
[back]
b. They enable secure, efficient payment processing
[front]
Commercial banks serve which groups?
a. Only the government
b. Individuals, small and medium businesses
c. Only large corporations
d. Only foreign institutions
[back]
b. Individuals, small and medium businesses
[front]
What are the types of commercial banks?
a. Cooperative, Credit, and Investment
b. Retail, Investment, and Central
c. Private, Public, and Foreign
d. Municipal, Regional, and Global
[back]
c. Private, Public, and Foreign
[front]
What are fixed deposits?
a. Withdrawable anytime with interest
b. Chequable accounts
c. Time-bound deposits with higher interest
d. Deposits made by the government
[back]
c. Time-bound deposits with higher interest
[front]
What is a recurring deposit?
a. Deposit withdrawn at any time
b. Lump sum deposit
c. Regular monthly deposit earning interest like fixed deposits
d. Deposit from foreign customers
[back]
c. Regular monthly deposit earning interest like fixed deposits
[front]
Which is a demand deposit?
a. Fixed deposit
b. Recurring deposit
c. Current account
d. Time deposit
[back]
c. Current account
[front]
What is the main difference between demand and time deposits?
a. Demand deposits have fixed terms
b. Demand deposits earn higher interest
c. Time deposits are not chequable
d. Time deposits are available online only
[back]
c. Time deposits are not chequable
[front]
What is the primary function of a commercial bank?
a. Selling insurance policies
b. Accepting deposits and granting loans
c. Providing foreign exchange to travelers
d. Issuing passports
[back]
b. Accepting deposits and granting loans
[front]
What is credit cash creation?
a. Loan granted in form of gold
b. Direct handover of cash
c. Transferring loan to borrower’s bank account
d. Creating money through taxation
[back]
c. Transferring loan to borrower’s bank account
[front]
What is a demand loan?
a. Loan with scheduled installments
b. Loan callable at any time with no maturity date
c. Loan given without interest
d. Loan requiring collateral of real estate only
[back]
b. Loan callable at any time with no maturity date
[front]
What is an overdraft?
a. Fixed loan with interest-free period
b. Advance to withdraw more than the balance in a current account
c. Investment loan only for large firms
d. Credit given for home purchases
[back]
b. Advance to withdraw more than the balance in a current account
[front]
What is the key difference between loan and overdraft?
a. Loans are more secure
b. Overdrafts are always interest-free
c. Overdrafts allow borrowing as needed
d. Loans are interest-free
[back]
c. Overdrafts allow borrowing as needed
[front]
Which is a secondary function of commercial banks?
a. Accepting deposits
b. Collecting taxes
c. Discounting bills of exchange
d. Selling electronics
[back]
c. Discounting bills of exchange
[front]
What is the purpose of discounting bills of exchange?
a. Delay payments
b. Acknowledge payment agreement, encashable before due date
c. Avoid tax
d. Secure gold
[back]
b. Acknowledge payment agreement, encashable before due date
[front]
Which is an agency function of a commercial bank?
a. Accepting only term deposits
b. Buying and selling foreign exchange
c. Selling insurance directly
d. Creating central banking policies
[back]
b. Buying and selling foreign exchange
[front]
What is a general utility service offered by banks?
a. Legal advice
b. Locker facility
c. Cooking gas supply
d. Product marketing
[back]
b. Locker facility
[front]
What does R.A. 1405 protect?
a. Business permits
b. Taxpayer ID numbers
c. Bank deposit secrecy
d. Loan application processes
[back]
c. Bank deposit secrecy
[front]
Which of the following is an exception to R.A. 1405?
a. Verbal permission from depositor
b. Government inquiry into credit rating
c. Written permission from the depositor
d. Bank audit by private individuals
[back]
c. Written permission from the depositor
[front]
What is a primary reserve?
a. Reserve for staff salaries
b. High-risk investment
c. Minimum cash and uncollected checks for liquidity
d. Investment in real estate
[back]
c. Minimum cash and uncollected checks for liquidity
[front]
What is a secondary reserve?
a. Cash in hand
b. High-grade short-term marketable securities
c. Buildings and furniture
d. Loans to relatives
[back]
b. High-grade short-term marketable securities
