Q1. Why is it important to save money?
a) For future financial security
b) To increase immediate spending
c) To avoid paying taxes
d) To borrow more money
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Correct Answer: a) For future financial security
Explanation: Saving money is crucial for ensuring future financial security, meeting unexpected expenses, and achieving financial goals. It also provides a cushion during emergencies, reducing financial stress.
Q2. What is the primary reason for saving money in a bank?
a) To hide it from others
b) To earn interest and keep it safe
c) To avoid spending it
d) To lend it to friends
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Correct Answer: b) To earn interest and keep it safe
Explanation: Saving money in a bank helps in keeping it secure and earning interest on the deposited amount. Banks offer various financial products that help money grow over time.
Q3. What does an ATM card primarily allow you to do?
a) Access your bank account and withdraw cash
b) Take a loan from the bank
c) Transfer large amounts of money to other countries
d) Purchase insurance
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Correct Answer: a) Access your bank account and withdraw cash
Explanation: An ATM card provides access to one’s bank account through automated teller machines (ATMs) for cash withdrawals, balance inquiries, and sometimes deposits.
Q4. What is a RuPay card?
a) A digital wallet
b) A type of credit card
c) An Indian domestic card payment network
d) A mobile banking application
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Correct Answer: c) An Indian domestic card payment network
Explanation: RuPay is an Indian domestic card scheme launched by the National Payments Corporation of India (NPCI). It is used for transactions at ATMs, point-of-sale terminals, and online payments.
Q5. What is a cheque?
a) A document instructing a bank to transfer money
b) A type of credit card
c) A bank account statement
d) A mobile banking application
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Correct Answer: a) A document instructing a bank to transfer money
Explanation: A cheque is a written order directing a bank to pay a specific amount of money from a person’s account to another individual or entity.
Q6. What is the main purpose of a Demand Draft (DD)?
a) To request a loan from the bank
b) To withdraw cash from an ATM
c) To transfer money between bank accounts safely
d) To purchase goods online
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Correct Answer: c) To transfer money between bank accounts safely
Explanation: A Demand Draft is a prepaid negotiable instrument used for transferring money securely between bank accounts, especially when dealing with large amounts or requiring a secure mode of payment.
Q7. Why are currency notes important in banking?
a) They are the only legal tender for transactions
b) They represent electronic money
c) They are primarily used for digital payments
d) They are outdated and no longer in use
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Correct Answer: a) They are the only legal tender for transactions
Explanation: Currency notes are legal tender issued by a country’s central bank and are widely accepted for transactions and payment of debts within the country.
Q8. Which is an example of a banking services delivery channel?
a) Bank branch
b) Grocery store
c) Police station
d) Shopping mall
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Correct Answer: a) Bank branch
Explanation: A bank branch is a physical location where customers can perform banking activities like deposits, withdrawals, and loan applications. It is one of the traditional banking service delivery channels.
Q9. What is the purpose of the Know Your Customer (KYC) process?
a) To open a fixed deposit
b) To verify the identity of a bank’s customer
c) To issue an ATM card
d) To withdraw cash from an ATM
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Correct Answer: b) To verify the identity of a bank’s customer
Explanation: The KYC process involves verifying the identity of customers to prevent fraud, money laundering, and financial crimes. It is mandatory for opening bank accounts and other financial services.
Q10. Which document is NOT typically required to open a bank account?
a) Passport
b) Driving License
c) Utility Bill
d) Library Card
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Correct Answer: d) Library Card
Explanation: While a passport, driving license, and utility bill are valid documents for identity and address proof, a library card is not a recognized document for banking KYC purposes.