Q1. Why is saving money important?
a) To spend more on luxury items
b) To have funds for emergencies and future needs
c) To increase daily expenses
d) To avoid paying taxes
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Correct Answer: b) To have funds for emergencies and future needs
Explanation: Saving money is crucial for managing emergencies and planning for future expenses. It provides financial stability and helps in achieving long-term goals.
Q2. What is the primary advantage of saving money in a bank?
a) To receive higher interest rates on savings
b) To get free gifts from the bank
c) To avoid paying taxes
d) To store cash in a safe place at home
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Correct Answer: a) To receive higher interest rates on savings
Explanation: Banks offer interest on deposited savings, which helps grow your money over time. Additionally, it provides a secure place to keep funds compared to storing cash at home.
Q3. Which card is commonly used for electronic transactions and is linked directly to your bank account?
a) Credit Card
b) Debit Card
c) Prepaid Card
d) Gift Card
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Correct Answer: b) Debit Card
Explanation: A debit card is directly linked to your bank account, allowing you to access and withdraw funds electronically for transactions.
Q4. What does an ATM card allow you to do?
a) Access funds through a bank teller
b) Make online purchases
c) Withdraw cash and check account balances
d) Apply for a loan
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Correct Answer: c) Withdraw cash and check account balances
Explanation: An ATM card allows you to access your bank account to withdraw cash, check balances, and sometimes perform other transactions like deposits.
Q5. What is a Rupay Card used for?
a) To make international purchases
b) To make payments through Indian networks
c) To receive rewards points
d) To apply for personal loans
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Correct Answer: b) To make payments through Indian networks
Explanation: The Rupay Card is a domestic payment card scheme in India, designed for transactions within Indian networks.
Q6. Which banking instrument is used to transfer funds from one bank account to another and is payable on demand?
a) Cheque
b) Demand Draft (DD)
c) Currency Note
d) ATM Card
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Correct Answer: b) Demand Draft (DD)
Explanation: A Demand Draft is a pre-paid instrument used for transferring funds from one account to another and is payable on demand at the issuing bank.
Q7. What does the Know Your Customer (KYC) process ensure in banking?
a) Compliance with regulatory requirements
b) Faster loan approval
c) Higher interest rates
d) Free banking services
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Correct Answer: a) Compliance with regulatory requirements
Explanation: The KYC process is designed to verify the identity of customers to prevent fraud and comply with legal and regulatory requirements.
Q8. Which document is NOT typically required to open a new bank account?
a) Proof of identity
b) Proof of address
c) Proof of employment
d) Passport-sized photographs
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Correct Answer: c) Proof of employment
Explanation: To open a bank account, you typically need proof of identity, proof of address, and passport-sized photographs. Proof of employment is not always required.
Q9. What type of bank account usually requires a minimum balance to be maintained?
a) Savings Account
b) Current Account
c) Fixed Deposit Account
d) Recurring Deposit Account
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Correct Answer: b) Current Account
Explanation: Current Accounts often require maintaining a minimum balance and are used for frequent transactions by businesses and individuals.
Q10. Which service is NOT typically offered by banks?
a) Loan services
b) Mobile banking
c) Travel agency services
d) Overdraft facilities
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Correct Answer: c) Travel agency services
Explanation: Banks offer various financial services including loans, mobile banking, and overdraft facilities, but travel agency services are not typically offered.