Banking Awareness Set 2

This set contains banking awareness questions for various upcoming exams like SBI PO, IBPS PO, Clerk and insurance exams. Multiple Choice Questions from the topic NEFT, RTGS and IMPS.

1. What does S stands for in SFMS in relation to NEFT payment method?
   A) Statutory
   B) Systematic
   C) Structured
   D) Savings
   
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   Option C
   Explanation: SFMS – Structured Financial Messaging Solution
   NEFT SFMS message” means an electronic Structured Financial Messaging Solution (SFMS) message containing a batch of NEFT payment instructions for funds transfer, processed and consolidated in the manner specified for transmission of payment instructions from NEFT Service Centre to the NEFT Clearing Centre.
2. What is the maximum limit per transaction in NEFT?
   A) Rs 1,00,000
   B) Rs 50,000
   C) Rs 1,50,000
   D) No Such Limit
   
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   Option B
   Explanation: Even though there is no upper limit for sending money in NEFT, but in a single transaction more than Rs 50,000 can not be transferred.
3. Which of the following statement is true about NEFT?
   (i) NEFT cannot be used to transfer funds from or to NRE and NRO accounts in the country.
   (ii) individuals who do not have a bank account can also deposit cash at the NEFT-enabled branches with instructions to transfer funds using NEFT.
   (iii) NEFT operates in half-hourly batches
   A) (iii) Only
   B) (ii) Only
   C) Both (ii) and (iii)
   D) None is true
   
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   Option C
   Explanation: (i) is false. NEFT can be used to transfer funds from or to NRE and NRO accounts in the country.
4. How many digits are present in IFSC code?
   A) 8
   B) 9
   C) 10
   D) 11
   
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   Option D
   Explanation: IFSC – Indian Financial System Code
   This is an 11 digit code with the first 4 alpha characters representing the bank, and the last 6 characters representing the branch. The 5th character is 0 (zero).
5. What is the interest rate that bank has to pay to the customer as compensation if the credit is delayed to beneficiary account or if there is any delay is returning the transaction to the originator in case of NEFT?
   A) Repo Rate +0.5%
   B) Repo Rate + 1%
   C) Repo Rate + 1.5%
   D) Repo Rate +2%
   
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   Option D
   Explanation: If the NEFT transaction is not credited or returned within the stipulated time then the banks are liable to pay penal interest to the affected customers. Banks are required to pay penal interest at the current RBI LAF Repo Rate plus two percent for the period of delay / till the date of refund as the case may be to the affected customers’ account without waiting for a specific claim to be lodged by the customer in this regard.
6. What is the minimum amount of money that can be transferred through RTGS?
   A) Rs 2 lakh
   B) Rs 2.5 lakh
   C) Rs 3 lakh
   D) Rs 5 lakh
   
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   Option A
   Explanation: The minimum amount to be remitted through RTGS is Rs 2 lakh. There is no upper ceiling for RTGS transactions.
7. NEFT works on the principle of _____ .
   A) Priority Net Settlement
   B) Deferred Net Settlement
   C) Gross Batch Settlement
   D) Domain Net Settlement
   
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   Option B
   Explanation: NEFT is an electronic fund transfer system that operates on a Deferred Net Settlement (DNS) basis which settles transactions in batches.
8. Which of the following is false?
   (i) RRBs can participate in NEFT settlement
   (ii) MMID has 7 digits
   (iii) IMPS works even on holidays.
   A) (i) is false
   B) (ii) is false
   C) (iii) is false
   D) None of them is false
   
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   Option D
   Explanation: All the three statements are true.
9. IMPS is functional through the ________ of NPCI
   A) EFS
   B) RTGS
   C) NFS
   D) ECS
   
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   Option C
   Explanation: NFS – National Financial Switch . NFS is a network of shared ATMs in India. The National Financial Switch facilitates routing of ATM transactions through inter-connectivity between the Bank’s Switches, thereby enabling the citizens of the country to utilize any ATM of a connected bank. IMPS utilizes this network.
10. What does N stands for in NUUP?
    A) Network
    B) Neutral
    C) National
    D) Net
    
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    Option C
    Explanation: NUUP (National Unified USSD Platform) is a USSD based mobile banking service from NPCI that brings together all the Banks and Telecom Service Providers.