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during the interview there are questions regarding names of capitals of different countries.
is it true and if so what is the purpose behind it.

the purpose is to see how much general knowledge the interviewee possesses and also to get an idea about how much the person is aware of the latest news and stuff like that.
Yes there are. In my case there were two)
I think the purpose is to test general knowledge
Its not necessary that the question regarding general knowledge will be on capitals, but there are usually questions regarding general knowledge so keep upto date and read the newspaper. The question could be about capitals of countries, latest headlines in the newspapers, current affairs, or they could ask you about the name of some minister etc.