MCQ on banking system in India

1. Oudh Commercial Bank was founded in _______.

a) 1913
b) 1917
c) 1894
d) 1881

ANSWER: d) 1881

Oudh Commercial Bank, the first bank with limited liability managed by Indians, was founded in 1881.

2. Which was the second bank in India with limited liability?

a) Punjab National Bank
b) Imperial Bank of India
c) New Bank of India
d) State Bank of India

ANSWER: a) Punjab National Bank

Banking is over 130 years’ old in India. The first bank with limited liability managed by Indians was Oudh Commercial Bank founded in 1881. Subsequently, Punjab National Bank was established.

3. Punjab National Bank was established in ________.

a) 1881
b) 1894
c) 1913
d) 1917

ANSWER: b) 1894

Punjab National Bank is an Indian financial services company based in New Delhi founded in 1894.

4. Which movement encouraged the formation of commercial banks?

a) Swadeshi movement
b) Quit India Movement
c) Non Cooperation Movement
d) Civil Disobedience Movement

ANSWER: a) Swadeshi movement

Swadeshi movement encouraged the formation of a number of commercial banks.

5. When did the banking crisis of 1913-1917 end?

a) 1917
b) 1949
c) 1955
d) 1959

ANSWER: b) 1949

The banking crisis of 1913-1917 and the failure of 588 banks in various states during the decade ended in 1949. It underlined the need for the regulation and coordination of commercial banks.

6. In which year was the Banking Regulation Act passed?

a) 1949
b) 1955
c) 1959
d) 1969

ANSWER: a) 1949

The failure of 588 banks in various states during 1913-1917 emphasized the need for the regulation and coordination of commercial banks and thus Banking Regulation Act was passed in 1949.

7. Imperial Bank of India was nationalised in _______.

a) 1949
b) 1955
c) 1959
d) 1969

ANSWER: b) 1955

The largest bank, the Imperial Bank of India, was nationalised in 1955.

8. Which bank was baptised as the State Bank of India?

a) New Bank of India
b) Imperial Bank of India
c) Indian Bank
d) United Bank of India

ANSWER: b) Imperial Bank of India

The Imperial Bank of India was baptised as State Bank of India followed by the formation of 7 associate banks in 1959. Recognising the fact that banking plays a crucial role in the economic development of a country, the Government of India nationalised 14 major commercial banks in July 1969. Another six commercial banks were nationalised in April 1980 in order to bring commercial banks into the mainstream of economic development with definite social obligations and objectives.

9. Which bank was united with the Punjab National Bank in 1993?

a) Oudh Commercial Bank
b) Imperial Bank of India
c) New Bank of India
d) Punjab and Sind Bank

ANSWER: c) New Bank of India

The New Bank of India which was running at a loss was united with the Punjab National Bank in September 1993. 19 nationalised banks along with the State Bank of India, which was nationalised in 1956, now constitute the public sector banks.

10. Which among the following is not a public sector bank?

a) Allahabad Bank
b) City Union Bank
c) UCO Bank
d) Vijaya Bank

ANSWER: b) City Union Bank

The City Union Bank is a private sector bank. The bank ‘The Kumbakonam Bank Limited’, as it was called then, was organized as a limited company on the 31st of October, 1904. In the beginning it was a regional bank but steadily built for itself a place in the Delta District of Thanjavur.

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