Banking History or Facts MCQ Quiz - Objective Question with Answer for Banking History or Facts - Download Free PDF

Key Points

• The decimal system of coinage was introduced in India on 1 April 1957.
• Under this system, the rupee was divided into 100 naya paise (new paise).
• The introduction of the decimal system simplified the calculation and transactions compared to the earlier system.
• This change was a significant step in modernizing the Indian currency system and making it more consistent with international standards.

Additional Information

• Decimal System of Coinage:
  • A decimal currency system is one in which the base unit of currency can be subdivided into smaller units by a power of 10.
  • For example, the Indian Rupee is divided into 100 paise, making calculations more straightforward compared to the earlier non-decimal system.
• Pre-Decimal System in India:
  • Before the adoption of the decimal system, the Indian currency was based on the rupee, anna, and pice system.
  • 1 rupee was equivalent to 16 annas, and each anna was equivalent to 4 pice.
  • This system was more complex and less efficient for calculations and transactions.
• Global Context:
  • Many countries adopted the decimal system of coinage during the 19th and 20th centuries.
  • The decimal system is widely accepted globally due to its simplicity and ease of use.
• Impact of Decimalisation:
  • The transition to the decimal system in India streamlined financial transactions and accounting processes.
  • It also facilitated easier trade and economic interactions with other countries using a similar system.

The correct answer is Allahabad Bank.

Key Points

• Allahabad Bank was founded on 24 April 1865, making it the oldest public sector bank in India.
• The bank was established in Allahabad, Uttar Pradesh, during the British Raj.
• In 2020, Allahabad Bank merged with Indian Bank as part of a consolidation plan by the Government of India.
• Before its merger, Allahabad Bank had a wide presence with over 3,000 branches across India.

Additional Information

• Public Sector Banks (PSBs):
  • These are banks where the majority stake is held by the Government of India.
  • PSBs play a crucial role in the financial inclusion and economic development of the country.
• Bank Mergers in India:
  • In recent years, the Indian government has merged several PSBs to create larger and stronger banks.
  • The mergers aim to improve efficiency, reduce the number of non-performing assets (NPAs), and enhance the overall financial stability of the banking sector.
• Indian Bank:
  • Founded in 1907 and headquartered in Chennai, Tamil Nadu.
  • After the merger with Allahabad Bank, Indian Bank became one of the largest public sector banks in India.
• Banking Sector Reforms:
  • The Indian government has undertaken various reforms to strengthen the banking sector, including the introduction of the Insolvency and Bankruptcy Code (IBC) and recapitalization plans.
  • These reforms aim to address issues such as NPAs, improve governance, and ensure better management of resources.

The correct answer is HDFC Bank.

Key Points

• The Housing Development Finance Corporation Limited (HDFC) was among the first financial institutions in India to receive an “in principle” approval from the Reserve Bank of India (RBI) to set up a bank in the private sector.
• This was done as part of RBI’s policy for liberalization of the Indian banking industry in 1994.
• Its registered office is in Mumbai, India.
• The bank commenced operations as a Scheduled Commercial Bank in January 1995

The correct answer is 1948.Key Points 

• IFCI was initially established in 1948.
• the Industrial Finance Corporation of India was converted into a public company on 1 July 1993 and is now known as Industrial Finance Corporation of India Ltd.
• The main aim of setting up this development bank was to provide assistance to the industrial sector to meet their medium and long-term financial needs.
• The IDBI, scheduled banks, insurance sector, co-op banks are some of the major stakeholders of the IFCI.

Additional Information

The Functions of IFC are:

• The main function of the IFCI is to provide medium and long-term loans and advances to industrial and manufacturing concerns. 
• The Industrial Finance Corporation of India can also subscribe to the debentures that these companies issue in the market.
• The IFCI also provides guarantees to the loans taken by such industrial companies.
• When a company is issuing shares or debentures the Industrial Finance Corporation of India can choose to underwrite such securities.
• It also guarantees deferred payments in case of loans taken from foreign banks in foreign currency.

The correct answer is 1948.Key Points

• The Industrial Finance Corporation of India is a development finance institution under the jurisdiction of the Ministry of Finance, Government of India which was established on July 1, 1948, by enacting the IFC Act 1948.  
• It was established with the objective of bridging the demand-supply gap for the capital needs of the economy, providing medium and long-term finance to the industry.
• Initially, it was formed as a statuary corporation but after the Liberalisation of the Indian Economy in 1991, it was changed to a Company under the Indian Companies Act, of 1956.
• Later the name of the company was changed to ‘IFCI Limited’ with effect from October 1999.

Additional Information

• IFCI is also registered with the Reserve Bank of India (RBI) as a Systemically Important Non-Deposit taking Non-Banking Finance Company (NBFC-ND-SI) and is also a notified Public Financial Institution under Section 2(72) of the Companies Act, 2013.
• IFCI is the first Development Financial Institution in India set up to propel economic growth through the development of infrastructure and industry. 
• During its 70 years of existence, mega projects like Adani Mundra Ports, GMR Goa International Airport, Salasar Highways, NRSS Transmission, and Raichur Power Corporation, to name a few, have been set up with the financial assistance of IFCI.
• The main subsidiaries body of IFCI are
  • Stock Holding Corporation of India Ltd,
  • IFCI Venture Capital Fund Ltd,
  • IFCI Factors Ltd,
  • IFCI Infrastructure Development Ltd,
  • IFCI Financial Services Ltd,
  • MPCON Ltd.
• The IFCI headquarters are located in New Delhi and its present MD and CEO is Shri Manoj Mittal. 

The correct answer is option 1 i.e., 1990

• SIDBI is the principal development financial institution for promotion, financing, and development of Micro, Small, and Medium Enterprises (MSME) sector in India.
• It was established on April 2, 1990, through an Act of Parliament.
• The headquarters of the SIDBI is located in Lucknow, Uttar Pradesh.
• It aims to facilitate and strengthen credit flow to MSMEs and address both financial and developmental gaps in the MSME eco-system across the country.
• It coordinates the functions of institutions engaged in similar activities.

The correct answer is 14.

Key Points

• Nationalisation of Bank in India:
  • On July 19, 1969, Indira Gandhi who was both Prime Minister and Finance Minister at that time decided to nationalise the 14 largest private banks of the country. Hence, Option 1 is correct.
  • The largest and the oldest bank which is still in existence is the State Bank of India (SBI).
    • It originated and started working as the Bank of Calcutta in mid-June 1806.
    • In 1809, it was renamed the Bank of Bengal.
    • This was one of the three banks founded by a presidential government, the other two were the Bank of Bombay in 1840 and the Bank of Madras in 1843.
  • The three banks were merged in 1921 to form the Imperial Bank of India, which upon India's independence, became the State Bank of India in 1955.
  • For many years, the presidency banks had acted as quasi-central banks, as did their successors, until the Reserve Bank of India was established in 1935, under the Reserve Bank of India Act, 1934.
  • In 1960, the State Banks of India was given control of eight state-associated banks under the State Bank of India (Subsidiary Banks) Act, 1959. These are now called associate banks. 
  • In 1969, the Government of India nationalised 14 major private banks; one of the big banks as Bank of India. In 1980, 6 more private banks were nationalised.
  • These nationalised banks are the majority of lenders in the Indian economy.
  • They dominate the banking sector because of their large size and widespread networks. 

• Allahabad Bank is the oldest public-Sector bank of India.
• It was established in the year 1865.
• Its current chairman of the bank is SS Mallikarjuna Rao.

Allahabad Bank has been merged with Indian Bank.

The correct answer is 1955.

Key Points

• The creation of the State Bank of India in July 1955 followed the passage of the Imperial Bank of India into state ownership.  
• In January 1921, the Imperial Bank was established as a joint-stock bank by merging the Presidency Banks of Bombay, Calcutta, and Madras. The Imperial Bank had the status of a quasi-central bank, undertaking until the formation of the Reserve Bank of India in 1935, banking functions for the Government of India and other banking institutions and managing the rupee debt of the government. 
• The State Bank of India (SBI) is an Indian multinational public sector bank and the statutory entity that provides financial services.
• Its headquarters are in Mumbai, Maharashtra.
• SBI is the world's 43rd largest bank and the only Indian bank in the Fortune Global 500 list of the world's largest firms for 2020, ranking 221st. 
• It is India's largest public sector bank, with a 23% asset market share and a 25% share of the total loan and deposit market.
• The bank is descended from the Bank of Calcutta, which was created in 1806 via the Imperial Bank of India, making it the Indian Subcontinent's oldest commercial bank.
• Various services offered by the State Bank of India include Personal Banking, Rural/ Agriculture, Small and Medium Enterprise (SME), Domestic Treasury, NRI Services, International Banking, Corporate Banking, Government Business, and KYC (Know Your Customer).
• Challa Sreenivasulu Setty is the current chairman of the State Bank of India (SBI): Setty took over as chairman on August 28, 2024.​

The correct answer is 1955.

• Imperial Bank of India was renamed as State Bank of India after nationalization in the year 1955. 

Additional Information 

• Imperial Bank of India was established on 27 January 1921.
  • ​It was founded by J. M. Keynes.
• It was done by merging three presidency banks into a single banking entity-
  • Bank of Bengal (2 June 1806)
  • Bank of Bombay (15 April 1840)
  • Bank of Madras (1 July 1843)
• The Imperial Bank was nationalized in 1955 on the recommendation of the Gorewala Committee and renamed as State Bank of India.

The Correct Answer is Option 3 i.e A.

• Bank of Hindustan:
  • The Bank of Hindostan (1770-1832), set up by the agency house of Alexander and Company in the year 1770 was the first bank established in India.
  • It was no longer exists now.
• Imperial Bank:
  • The Imperial Bank was formed in 1921 as a joint-stock bank by amalgamating the Presidency Banks of Bombay, Calcutta, and Madras.
  • State Bank of India was created in 1806, in Calcutta, Called the Bank of Calcutta, 
    • In 1809 It became the Bank of Bengal when the bank was granted a charter to serve all of Bengal.
    • The imperial government by the middle of the century created two more regional banks. 
    • The Bank of Bombay was created in 1840, and was soon joined by the Bank of Madras in 1843. Together with the Bank of Bengal, they became known as the "presidency" banks.
  • Imperial Bank of India was nationalized by the Government of India in the year 1955 with the Reserve Bank of India taking a 60% stake and the name was changed to State Bank of India.
• SBI Bank:
  • It is the largest public sector banks in India.
  • It began with the establishment of the Bank of Calcutta in Calcutta, on 2 June 1806.
  • It was the first-ever joint-stock bank of British India, established under the sponsorship of the Government of Bengal.
  • Tagline: "The banker to every Indian".
• Reserve Bank of India:
  • The Reserve Bank of India was set up on the basis of the recommendations of the Hilton Young Commission
  • The Reserve Bank of India was established on April 1, 1935, in accordance with the provisions of the Reserve Bank of India Act, 1934.
  • It acts as a Banker to the Government as well as banker to banks.

The Correct Answer is New Delhi.

Key Points

• National Home Bank (NHB): 
  • It was established as an apex level institution for housing finance. 
  • NHB was set up on July 9, 1988, under the National Housing Bank Act, 1987.
  • The Head office is in New Delhi.

Additional Information

The Securities and Exchange Board of India (SEBI) was established as a  statutory body in 1992.

• SEBI is the regulator for the securities market in India.
• SEBI has its headquarters at the business district of Bandra Kurla Complex in Mumbai.
• Ms. Madhabi Puri Buch​ current Chairman of SEBI.
• The first chairman of SEBI was Dr S. A. Dave.
• SEBI regulates the Indian financial market through its 20 departments.

• The full form of NABARD is the National Bank for Agriculture and Rural Development.
• NABARD is one type of Development Bank focused on Agricultural and Rural Development. 
• NABARD came into existence on 12 July 1982.
• NABARD  is now fully owned by the Government of India.
• Shri Shaji K V assumed charge as Chairman of NABARD on 7th December 2022

• The New India Assurance Company was established in the year 1919 by Sir Dorabji Tata.
• This was nationalized in the year 1972 as per the provisions of the General Insurance Business (Nationalization) Act 1972.
• The head office of NIACL is situated in Mumbai.