Differentiated and Development Banks MCQs with Explanations
Differentiated Banks are specialized banks created to serve specific customer segments such as payment banks and small finance banks. Development Banks provide long-term financial assistance for industrial and infrastructure development. This topic is frequently covered in Banking, UPSC, SSC and State PCS examinations.
Which of the following is a primary function of a Development Bank?
Correct Answer:
(C) Providing long-term financing for infrastructure and industrial projects.
The primary function of a development bank is to provide long-term financing for infrastructure and industrial projects, often focusing on sectors with higher risks or where commercial banks may not be as willing to lend. These banks are known for offering low and stable interest rates, promoting investments with social benefits. They also provide financial and technical assistance to various industries, helping to foster economic growth and development.
Ques: 2
What is the main objective of the New Development Bank (NDB)?
Correct Answer:
(C) To support infrastructure and sustainable development projects in BRICS countries.
The primary objective of the New Development Bank (NDB) is to support infrastructure and sustainable development projects in BRICS countries and other emerging economies and developing countries. Specifically, the NDB aims to mobilize resources for these projects and complement existing efforts of multilateral and regional financial institutions.
Ques: 3
The first Land Development Bank was established in 1920. It was located in :
Correct Answer:
(B) Jhang
The first Land Development Bank was set up at Jhang in Punjab in 1920. The main objective of the LDB is to promote the development of land, agriculture and increase the agricultural production. The LDB provides long-term finances to members directly through its branches.
Ques: 4
Which of the following banks operates mainly in relation to small industries?
Correct Answer:
(A) SIDBI
Small Industries Development Bank of India (SIDBI), set up on 2nd April 1990 under an act of Indian Parliament, acts as the principal financial institution for promotion, financing and development of the Micro, Small and Medium Enterprises (MSME) sector as well as for coordination of functions of institution engaged in similar activities. SIDBI is headquartered at Lucknow and having its offices all over the country.