About this quiz
50 questions covering every section of the note.
This Lok Sewa practice set has 50 multiple-choice questions (Subject: Banking and Finance · For: Kharidar, Nayab Subba, Section Officer · Level: Easy). Take the quiz above first; after that, use the study list below to revise every question with its correct answer and a short explanation.
Study list: all 50 questions with answers and explanations
Who is called the father of the cooperative movement?
- A) Robert Owen ✔
- B) Adam Smith
- C) Muhammad Yunus
- D) Karl Marx
Why: Robert Owen (1771 to 1858), a Welsh social reformer, is called the father of the cooperative movement. He promoted cooperative communities and fair treatment of workers, ideas that inspired the Rochdale Pioneers.
The Rochdale Pioneers set up their cooperative in:
- A) 1844 ✔
- B) 1901
- C) 1956
- D) 1990
Why: In 1844, 28 workers in Rochdale, England, formed the Rochdale Equitable Pioneers Society. Their rules, such as open membership and one member, one vote, became the base of modern cooperative principles.
Nepal's first cooperative was set up in:
- A) Kathmandu
- B) Chitwan ✔
- C) Pokhara
- D) Biratnagar
Why: Nepal's first cooperative was the Bakhan Cooperative (बखान सहकारी संस्था), set up in Chitwan in 2013 BS to give credit to farmers resettled in the Rapti valley.
Nepal's first cooperative was established in:
- A) 2007 BS
- B) 2013 BS ✔
- C) 2028 BS
- D) 2048 BS
Why: The Bakhan Cooperative in Chitwan was established in 2013 BS (1956 AD). That was three years after the Department of Cooperatives was set up in 2010 BS.
The current cooperative law of Nepal is the:
- A) Cooperative Act 2048
- B) Cooperative Act 2074 ✔
- C) Company Act 2063
- D) BAFIA 2073
Why: Cooperatives in Nepal are now governed by the Cooperative Act 2074, which replaced the Cooperative Act 2048. BAFIA 2073 governs banks, and the Company Act 2063 governs companies.
"One member, one vote" reflects which cooperative principle?
- A) Democratic member control ✔
- B) Concern for community
- C) Autonomy
- D) Open membership
Why: 'One member, one vote' is the principle of democratic member control, the second ICA principle: every member has an equal vote, whatever their shareholding.
How many ICA cooperative principles are there?
- A) Five
- B) Six
- C) Seven ✔
- D) Ten
Why: The International Cooperative Alliance (ICA) lists seven principles, from voluntary and open membership to concern for community. The last was added in 1995.
The three pillars of Nepal's economy are public, private and:
- A) Cooperative ✔
- B) Foreign
- C) Military
- D) Religious
Why: The Constitution of Nepal 2072 aims to build the economy through the public, private and cooperative sectors, so the cooperative sector is called the third pillar of the economy.
The International Day of Cooperatives falls on:
- A) First Saturday of July ✔
- B) 1 May
- C) 8 March
- D) 24 October
Why: The International Day of Cooperatives is observed on the first Saturday of July each year, as set by the ICA and recognised by the United Nations.
The Grameen Bank model was developed by:
- A) Muhammad Yunus ✔
- B) Amartya Sen
- C) Robert Owen
- D) Sanduk Ruit
Why: Muhammad Yunus, an economics professor in Bangladesh, developed the Grameen Bank model of small, collateral-free group loans for poor people, especially women.
Muhammad Yunus won the Nobel Peace Prize in:
- A) 1998
- B) 2006 ✔
- C) 2014
- D) 2001
Why: Muhammad Yunus and the Grameen Bank shared the Nobel Peace Prize in 2006, for creating economic and social development from below through microcredit.
Microfinance institutions in Nepal belong to which class?
- A) Class A
- B) Class B
- C) Class C
- D) Class D ✔
Why: Nepal Rastra Bank licenses banks and financial institutions in four classes: A (commercial banks), B (development banks), C (finance companies) and D (microfinance, लघुवित्त).
Microfinance loans are usually given:
- A) Without collateral to low-income people ✔
- B) Only to big industries
- C) Only to government
- D) With gold as collateral only
Why: Microfinance gives small loans to low-income people, often through groups, usually without physical collateral. The group guarantee and regular meetings replace collateral.
The regulator of insurance in Nepal is the:
- A) Nepal Insurance Authority ✔
- B) Nepal Rastra Bank
- C) SEBON
- D) Ministry of Health
Why: The Nepal Insurance Authority (नेपाल बीमा प्राधिकरण) regulates insurers. It was formerly called the Beema Samiti; the new name came with the Insurance Act 2079.
The amount paid to an insurance company for cover is called the:
- A) Premium ✔
- B) Interest
- C) Tax
- D) Dividend
Why: The premium is the amount the insured pays the insurer for cover. Interest is paid on loans or deposits, and a dividend is a share of company profit.
Which principle requires both parties to disclose all facts honestly?
- A) Utmost good faith ✔
- B) Subrogation
- C) Contribution
- D) Indemnity
Why: Under utmost good faith (uberrimae fidei), both the insured and the insurer must disclose all material facts honestly. Hiding a key fact can make the policy void.
Paying only the actual loss and not a profit is the principle of:
- A) Indemnity ✔
- B) Insurable interest
- C) Proximate cause
- D) Contribution
Why: The principle of indemnity puts the insured back in the same financial position as before the loss, no better. So insurance pays the actual loss, not a profit.
The insurer taking over the right to recover from a third party is:
- A) Subrogation ✔
- B) Contribution
- C) Indemnity
- D) Good faith
Why: Subrogation means that after paying a claim, the insurer takes over the insured's right to recover the loss from a third party who caused it.
Which government-owned company is a major insurer in Nepal?
- A) Rastriya Beema Sansthan ✔
- B) Nabil Bank
- C) NEPSE
- D) Nepal Oil Corporation
Why: Rastriya Beema Sansthan (राष्ट्रिय बीमा संस्थान) is the government-owned insurer and one of the largest in Nepal. Nabil is a bank and NEPSE is the stock exchange.
The national social health insurance programme is run by the:
- A) Health Insurance Board ✔
- B) Nepal Rastra Bank
- C) Department of Customs
- D) Social Welfare Council
Why: The Health Insurance Board, formed under the Health Insurance Act 2074, runs the national social health insurance programme, where families pay a yearly contribution for health cover.
Who is called the father of the cooperative movement?
- A) Robert Owen ✔
- B) Muhammad Yunus
- C) Karl Marx
- D) Adam Smith
Why: Robert Owen, a Welsh reformer, is called the father of cooperation. Adam Smith is the father of economics, and Muhammad Yunus founded the Grameen Bank.
The Rochdale Pioneers' society was set up in:
- A) 1844 ✔
- B) 1900
- C) 1800
- D) 1956
Why: The Rochdale Equitable Pioneers Society was set up in 1844 in Rochdale, England. It is seen as the first successful modern consumer cooperative.
Nepal's first cooperative was the Bakhan Cooperative in:
- A) Chitwan ✔
- B) Kathmandu
- C) Jhapa
- D) Kaski
Why: The Bakhan Cooperative was set up in Chitwan in 2013 BS, during the Rapti valley resettlement programme, to give farmers credit.
The Department of Cooperatives in Nepal was established in:
- A) 2010 BS ✔
- B) 2013 BS
- C) 2048 BS
- D) 2074 BS
Why: The Department of Cooperatives was set up in 2010 BS (1953 AD) to promote cooperatives, three years before the first cooperative was registered in Chitwan in 2013 BS.
The current Cooperative Act of Nepal is:
- A) Cooperative Act 2074 ✔
- B) Cooperative Act 2048
- C) Cooperative Act 2013
- D) Cooperative Act 2080
Why: The Cooperative Act 2074 is the current law. It replaced the Cooperative Act 2048 and fits the federal system, so cooperatives can be registered at federal, provincial or local level.
Article 50(3) of the constitution names the economy's three pillars as:
- A) Public, private and cooperative sectors ✔
- B) Land, labour, capital
- C) Agriculture, industry, services
- D) Federal, province, local
Why: Article 50(3) sets the economic objective of building a self-reliant, socialism-oriented economy through the participation of the public, private and cooperative sectors, the three pillars.
Which is an ICA cooperative principle?
- A) Voluntary and open membership ✔
- B) Profit maximisation
- C) One share one vote
- D) Closed membership
Why: Voluntary and open membership is the first ICA principle: anyone who can use the services and accept the duties may join. Cooperatives are not run for profit maximisation.
'Concern for community' is the ICA's:
- A) Seventh principle ✔
- B) First principle
- C) Third principle
- D) Fifth principle
Why: Concern for community is the seventh ICA principle, added in 1995. It asks cooperatives to work for the sustainable development of their communities, not only their members.
The ICA (International Cooperative Alliance) is headquartered in:
- A) Brussels ✔
- B) Geneva
- C) Rome
- D) Manila
Why: The International Cooperative Alliance, founded in 1895, is the global body of cooperatives. Its headquarters is in Brussels, Belgium.
The International Day of Cooperatives is observed on the:
- A) First Saturday of July ✔
- B) Last Friday of June
- C) 1 May
- D) 21 March
Why: The International Day of Cooperatives is the first Saturday of July. 1 May is Labour Day, and 21 March is the International Day for the Elimination of Racial Discrimination.
The apex body of cooperatives in Nepal is the:
- A) National Cooperative Federation of Nepal ✔
- B) Nepal Rastra Bank
- C) FNCCI
- D) NEPSE
Why: The National Cooperative Federation of Nepal (NCF) is the apex (top) body representing cooperatives. FNCCI represents private-sector businesses, and NRB is the central bank.
The most numerous type of cooperative in Nepal is:
- A) Saving and credit cooperatives ✔
- B) Dairy cooperatives
- C) Tea cooperatives
- D) Housing cooperatives
Why: Saving and credit cooperatives (SACCOs, बचत तथा ऋण सहकारी) are the most numerous type in Nepal. They collect members' savings and lend to members.
Grameen Bank was founded in:
- A) Bangladesh ✔
- B) India
- C) Nepal
- D) Pakistan
Why: Grameen Bank was founded in Bangladesh. It began as a project in 1976 and became a formal bank in 1983, giving small loans to the rural poor.
Microfinance mainly provides:
- A) Small collateral-free loans to poor people ✔
- B) Large corporate loans
- C) Foreign exchange
- D) Insurance only
Why: Microfinance mainly provides small, collateral-free loans to poor people, often through group lending, so they can start or grow small businesses.
Microfinance financial institutions in Nepal are licensed by NRB as class:
- A) D ✔
- B) A
- C) B
- D) C
Why: Microfinance institutions (लघुवित्त वित्तीय संस्था) are Class D institutions licensed by Nepal Rastra Bank under BAFIA 2073.
Commercial banks in Nepal are class:
- A) A ✔
- B) B
- C) C
- D) D
Why: Commercial banks are Class A institutions under NRB licensing. They are the largest and can offer the widest range of banking services.
Development banks in Nepal are class:
- A) B ✔
- B) A
- C) C
- D) D
Why: Development banks are Class B institutions, between commercial banks (A) and finance companies (C), with a narrower range of services than Class A banks.
The insurance regulator in Nepal is now called:
- A) Nepal Insurance Authority ✔
- B) Beema Samiti only
- C) SEBON
- D) NRB
Why: The insurance regulator is now the Nepal Insurance Authority. It was called the Beema Samiti before the Insurance Act 2079 renamed it.
The principle that the insured must have a financial stake in the subject is:
- A) Insurable interest ✔
- B) Subrogation
- C) Indemnity
- D) Contribution
Why: Insurable interest means the insured must suffer a financial loss if the insured thing is damaged. You cannot insure property you have no financial stake in.
The principle that sharing a loss among several insurers is:
- A) Contribution ✔
- B) Subrogation
- C) Utmost good faith
- D) Proximate cause
Why: Contribution applies when the same risk is insured with several insurers: they share the loss in proportion, so the insured cannot claim the full amount from each.
The nearest cause of loss is considered under:
- A) Proximate cause ✔
- B) Indemnity
- C) Contribution
- D) Premium
Why: Under proximate cause, the insurer looks at the nearest, most direct cause of the loss. The claim is paid only if that cause is a risk covered by the policy.
Life insurance and non-life insurance differ because life insurance:
- A) Pays on death or maturity ✔
- B) Covers only fire
- C) Is not regulated
- D) Has no premium
Why: Life insurance pays a fixed sum on the death of the insured or when the policy matures. Non-life insurance (fire, motor, health) pays the actual loss under indemnity.
The Social Security Fund (SSF) in Nepal mainly covers:
- A) Formal sector workers' contribution-based schemes ✔
- B) Only farmers
- C) Only students
- D) Only foreigners
Why: The Social Security Fund runs contribution-based schemes for formal-sector workers under the Contribution-based Social Security Act 2074: employer and employee both contribute.
The national social health insurance programme is run by the:
- A) Health Insurance Board ✔
- B) NRB
- C) Ministry of Finance only
- D) SSF
Why: The Health Insurance Board (HIB) runs national health insurance. SSF handles workers' contribution-based social security, and NRB is the central bank.
Deposits in banks are protected up to a limit by the:
- A) Deposit and Credit Guarantee Fund ✔
- B) NEPSE
- C) SEBON
- D) Insurance Authority
Why: The Deposit and Credit Guarantee Fund (DCGF) guarantees bank deposits up to a set limit, so small savers get their money back even if a bank or financial institution fails.
'One member, one vote' reflects:
- A) Democratic member control ✔
- B) Open membership
- C) Autonomy
- D) Education
Why: This is democratic member control, the second ICA principle: members control the cooperative equally, with one vote each, not votes by the size of shares.
A cooperative's surplus is distributed to members mainly based on:
- A) Their transactions with the cooperative ✔
- B) Their caste
- C) Their age
- D) Shares only
Why: A cooperative returns its surplus mainly according to each member's transactions with it, called a patronage refund, not only by the number of shares held.
A cooperative is mainly owned and controlled by its:
- A) Members ✔
- B) Government
- C) Foreign investors
- D) Bank
Why: A cooperative is owned and controlled by its members, who both use its services and govern it democratically. That is what makes it different from a company.
Muhammad Yunus and Grameen Bank won the Nobel Peace Prize in:
- A) 2006 ✔
- B) 1998
- C) 2010
- D) 2001
Why: In 2006 the Nobel Peace Prize was shared by Muhammad Yunus and the Grameen Bank, for their work using microcredit to fight poverty.
Which body regulates cooperatives at federal level?
- A) Department of Cooperatives ✔
- B) Nepal Rastra Bank
- C) SEBON
- D) Insurance Authority
Why: The Department of Cooperatives is the federal registrar and regulator of cooperatives. NRB regulates banks, SEBON regulates securities, and the Insurance Authority regulates insurers.