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Digital Banking for Federal Bank MCQ

Digital Banking for Federal Bank MCQ -2

1. Which of the following is not true about Small Finance Bank?
A) Maximum loan size to a single person cannot exceed 10% of total capital funds; cannot exceed 15% in the case of a group.
B) At least 50% of its loans should constitute loans and advances of up to 25 lakh.
C) Minimum paid-up equity capital requirement of Small Finance Banks is Rs 100 crore.
D) Small Finance banks must have 25% of its branches set up in unbanked areas.
E) They can set up subsidiaries to undertake non-banking financial service activities.

2. Which of the following is not true about Immediate Payment Service (IMPS)?
A) IMPS offers an instant, 24X7, interbank electronic fund transfer service through mobile phones.
B) The facility is provided by National Payments Corporation of India through its existing NFS switch.
C) Internet Banking Account facilitates IMPS to transfer money to any account.
D) To use IMPS, both the account holder and beneficiary needs to have Mobile Money Identifier (MMID).
E) IMPS allows instant money transfer.

3. Which of the following is not true about National Automated Clearing House (NACH)?
A) It is a centralised clearing system launched by the National Payments Corporation of India (NPCI).
B) It aims to replace and consolidate multiple existing Electronic Clearing Service (ECS) systems across India
C) NACH platform has been created to replace the Electronic Clearing Service (ECS) system
D) NACH have the same day presentation and settlement, including returns processing.
E) All of the above are true.

4. Which of the following is not true about Bharat Interface for Money (BHIM) app?
A) BHIM is a digital payments solution app, for easy and quick transactions, based on the Unified Payments Interface (UPI) from the National Payments Corporation of India (NPCI).
B) Money can also be sent to non-UPI supported banks using IFSC code and account number. 
C) BHIM allows daily transaction limit of Rs 20,000.
D) Through BHIM app, a maximum of Rs 5,000 is allowed per transaction.
E) BHIM framework allows its usage without internet also.

5. Which of the following is not true about National Electronic Funds Transfer (NEFT) system?
A) There is no limit on transaction through NEFT
B) NEFT operates in hourly batches. 
C) NEFT is a payment system which facilitates one-to-one funds transfer.
D) Only bank branches which are NEFT enabled, can be a part of the NEFT funds transfer network.
E) All of the above are correct

Answers with Explanation:
  1. E; They cannot set up subsidiaries to undertake non-banking financial service activities.
  2. D; One can choose the IMPS method to transfer money using net banking, mobile banking, ATMs or SMSs.D) — As internet banking also facilitates IMPS, so all internet banking account holders can use IMPS to transfer funds. There are 2 options available here – One is through MMID. And another is through IFSC Code of bank branch of beneficiary (to whose account amount to be transferred), in this option MMID of neither is needed to perform transaction.  
  3. E;In Electronic Clearing Services (ECS), presentation and settlement is spread over 3-4 day period. There are three types of ECS: Local ECS, Regional ECS, National ECS. NACH is a centralised system, launched with an aim to consolidate multiple ECS systems running across the country and provides a framework for the harmonization of standard & practices and removes local barriers/inhibitors.
  4. D; Bharat Interface for Money (BHIM) provides fast, secure, reliable medium to make digital payments through your mobile phone using UPI (Unified Payment Interface) platform via Mobile App and USSD (Unstructured Supplementary Service Data) platform via *99# service. In a day (24 hours), a maximum of Rs 20,000 can be transferred, and a single transaction allows maximum of Rs 10,000 to be transferred. BHIM framework allows its usage without internet also. – thorugh SMS – BHIM framework *99# works without internet. The limit for USSD has currently been set at Rs. 5,000 per day.
  5. B; NEFT used to operate in hourly batches. On may 8, 2017, the RBI announced that additional 11 settlement batches at half- hourly intervals will be introduced from July 10 2017 , beginning from 8.30 am till 6.30 pm. With this, the total number of half hourly settlement batches during the day will increase to 23.
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