MCQ on Banking System in India
Test your knowledge with these MCQ on banking system , designed to assess your understanding of key banking principles and practices.
What information is typically found at the bottom of a bank cheque?
A) Account holder’s name
B) Branch code and account type
C) Payee’s name
D) Cheque number
Answer: B) Branch code and account type
What is an “order cheque”?
A) A cheque with a payee’s name written on it
B) A cheque with two parallel lines drawn across it
C) A cheque with the word “bearer” struck out
D) A cheque without any payee information
Answer: A) A cheque with a payee’s name written on it
How can you make a cheque into an “order cheque”?
A) Crossing it
B) Adding a payee’s name
C) Striking out the word “bearer”
D) Drawing a line across it
Answer: C) Striking out the word “bearer”
What does it mean to “cross” a cheque?
A) Add a watermark
B) Draw two parallel lines across it
C) Add a signature
D) Make it payable to cash
Answer: B) Draw two parallel lines across it
What is the primary purpose of crossing a cheque?
A) To make it difficult to read
B) To make it more attractive
C) To make it more secure
D) To void the cheque
Answer: C) To make it more secure
How are payments made against crossed cheques?
A) Cash payment at the bank
B) Direct transfer to the payee’s account
C) Payment through a mobile app
D) Payment by check to the payee
Answer: B) Direct transfer to the payee’s account
What is a bank passbook used for?
A) Recording personal expenses
B) Keeping track of social events
C) Recording banking transactions
D) Writing checks
Answer: C) Recording banking transactions
What happens when a cheque “bounces”?
A) The bank issues a new cheque
B) The account holder receives a warning
C) The cheque is returned unpaid
D) The payee is required to re-deposit it
Answer: C) The cheque is returned unpaid
What does NSF stand for in the context of a bounced cheque?
A) No Service Fee
B) Not Sufficient Funds
C) Non-Stop Financing
D) No Signature Found
Answer: B) Not Sufficient Funds
What is a demand draft primarily used for?
A) Personal shopping
B) International travel
C) Secure online transactions
D) Making secure payments to a third party
Answer: D) Making secure payments to a third party
Can a demand draft be easily transferred to another person?
A) Yes
B) No, it’s not allowed
C) Only with the bank’s permission
D) Only through online banking
Answer: B) No, it’s not allowed
How is a demand draft different from a regular cheque?
A) It is less secure
B) It cannot be used for payments
C) It is easier to counterfeit
D) It is harder to counterfeit
Answer: D) It is harder to counterfeit
What is the main purpose of a demand draft?
A) To withdraw cash from ATMs
B) To pay for online purchases
C) To transfer money to a friend
D) To guarantee a specific payment to a payee
Answer: D) To guarantee a specific payment to a payee
What is typically mentioned on a demand draft?
A) The account holder’s address
B) The payee’s address
C) The payee’s name and the payment amount
D) A barcode for scanning
Answer: C) The payee’s name and the payment amount
Which of the following is not a security feature of a demand draft?
A) Watermark
B) Hologram
C) Magnetic strip
D) Color-changing ink
Answer: C) Magnetic strip
