Bank Promotion Study

Intercompany Loans: Smart Cash Management

2023-03-16T17:52:00.004+05:30

Intercompany Loans: Smart Cash Management

Sometimes liquidity management is a challenging problem for many companies. Particularly in case of companies that have many subsidiaries located in different parts of the world. Companies that upscale via the mergers and acquisitions route face this problem more. This is because they generally have many subsidiaries, the business of which is not perfectly integrated with one another.

Over the years, companies realized that it is very costly affair for individual companies to borrow from the external market. Also, it is not a worthy decision for one subsidiary company to borrow money from the market at a higher interest rate while another subsidiary of the same company is having cash overflows and depositing money at a lower rate of interest. Hence, there is a need of system wherein one subsidiary of the company can give loan to the other and both companies are in win-win situation. Such loans are called intercompany loans.

Intercompany loans are loans from one subsidiary to another, within the parent company. These Loans are operated in the same manner as any other traditional loans. The borrower is under a legal obligation to repay the money with interest to the lender. Interest is deducted during loan tenure each time from each recorded loan payment. Intercompany transactions generally have a fixed interest based on the existing market rate with a loan term agreement from one year to five years. Intercompany lending has many benefits, such as quickly shifting cash between subsidiaries or avoiding bank fees and charges. The loan should have an appropriate business purpose and be of interest for both parties to the transaction.

Why Intercompany Loans?

Intercompany loans are loans made from one entity of a company to another, usually for one of the following reasons:

Ø To shift cash to a business entity that would otherwise experience a cash shortage

Ø To shift cash into a business entity (usually corporate) where the funds are pooled for investment purposes

Ø To shift cash within business entities that use a common currency, rather than transferring in funds from a foreign location that will be subject to exchange rate fluctuations

Ø Intercompany loans can help the company to reduce the cost of financing to a great extent. Since the funds are accrued from different subsidiaries within the same company, loan processing, loan origination and other loan charges do not have to be paid.

Ø Companies use this type of funding as a ready cash flow problem solver. For example, a subsidiary can fix financial issues or launch a new product without burdening costs by borrowing from a parent company.

Ø A parent company can also release this stress by investing in the form of loan. The income earned is invested towards the loan, and the creditor takes their share from owning the subsidiary as net income grows.

Ø Both entities also reduce enormous paperwork associated with bank loans. ‍

Types of Intercompany Loans

Intercompany loans can be of two major types based upon the cash flow arrangement between the companies. These two types are explained below:

The first type of intercompany loans is hub spoke model, all subsidiary entities (spokes) companies transfer their excess money to a central organization (hub). This central organization then transfers money to other subsidiaries which are in need of funds. This means that the intercompany loans are not directly made, but indirectly. Every subsidiary deals with the hub (parent company) in this arrangement. Most companies like this type of intercompany loans since it removes the counterparty risk for the subsidiaries involved.

In the second type of intercompany loans arrangement, the centralized approach is not followed. Each company has its own excess funds which they want to lend out. Many times, the parent company encourages lenders and borrowers to place a bid in a virtual marketplace to ensure that funds are being utilized in the most optimal manner.

Problems Faced While Making Intercompany Loans

Intercompany loans are to be made within a very short span of time. Many companies do not have correct data about the amount of cash that they have on hand. The accounting for intercompany loans can be quite complex at times.

Role of Commercial Banks in Automated Intercompany Loans?

The fact is that commercial banks have come to realization that companies do not always want to borrow from them. Most of the times, they want to make more efficient use of their own excess funds. Commercial banks are helping such companies to do so and have started earning revenue in the form of transaction fees during the process.

Commercial banks have realized this problem and have come up with different solutions to make the intercompany loan process more . Some of the steps that commercial banks take are as follows:

Commercial banks have created tools and software that enable automatic disbursement of intercompany loans up to a certain threshold amount. Banks scrutinize the financials of each subsidiary and set a credit limit up to which funds can be easily disbursed at the click of a button. Hence, subsidiaries get access to funds in time which makes intercompany lending more viable.

Commercial banks have also created web interfaces where a wide variety of loans such as perpetual loans, long-term loans, working capital loans, etc. can be automatically made within a very short span of time by click of a few buttons. Commercial banks have built-in specialized software which assists in automatic tracking as well as the reconciliation of intercompany loans.

Advantages of Intercompany Loans

Intercompany loans are highly useful, because no credit application is needed, the cash can be made available on short notice, and repayment terms may be much longer than would be required by a commercial bank. No need to fill out long irritating loan applications with multiple banks or assent to high-interest rates. Intercompany Loans process is typically done through third-party software. Investment capital raised by the parent company can be transferred directly to the subsidiary. Banks or outsourced companies take a share of the loan. Companies make full utilization of cash flows.

Disadvantages

Intercompany reconciliation and settlements: Though both the parties are related but one party may question the interest recordings, a payment could be logged as missing, or for different accounting periods can cause problems with proper reconciliation.

Inability to pay: If the subsidiary or borrower takes a brutal financial setback, the cash flow problem can percolate to the issuer. This can negatively impact the financial worthiness of both companies and affect overall credit ratings, which can make bank borrowing harder in the future.

Complex Tax issues: Intercompany accounting is a complex, multi-dimensional process that involves a number of stakeholders, including Accounting, Tax, and Treasury. For companies, getting started may seem very much overwhelming. The interest rate, payments and transfers must be recorded, and each is subjected to individual tax regulations. Tax issues are very complex for both the entities. It is possible that the use of intercompany loans may cause tax problems or other issues if not handled properly. The subsidiary receiving the loan will have interest expenses, while the creditor entity will have interest earnings. This is subject to tax rules and regulations. The main challenge here is that the interest rates should be market driven in accordance with an at arm’s length price. Intercompany loans are guided by specific principles to derive the at arm’s length price, which are laid down in the OECD Guidelines. A very important aspect of the new guidelines is the inclusion of more methods to determine the at arm’s length interest rate of intercompany loans, such as credit default swaps and economic modelling.

Tips for Intercompany Loans

Perfectly defined roles: All person/legal entity involved in transferring and receiving intercompany funds should have a clear and well-defined job with specific responsibilities to avoid wire-crossing.

Proper tools and software: Implement time-saving tools and software that seamlessly integrates funds with an accurate reflection of different metrics. This is very important when accounting periods do not line up between companies.

Cash management: This loan is most likely for a specific business purpose. Ensure that the parent company or the subsidiary know where the money is going.

Conclusion

Intercompany loans have many advantages and that’s why many companies are engaged in these loans to make optimal utilization of cash flows. The use of intercompany loans can also cause tax problems, since the issuing business unit should record interest income on the loan, while the receiving unit should record interest expense - both of which are subject to tax rules and guidelines. When an intercompany loan is made, it should be well documented, including the amount of the interest rate to be charged and principal repayment terms. Otherwise, the loan might be considered an investment by the issuing business unit in the receiving unit, which can create other tax problems. Intercompany loans are recorded in the financial statements of individual business entities, but they are eliminated from the consolidated financial statements of a group of companies of which the business units are a subsidiary, using intercompany elimination transactions. With a bunch of both pro and cons of intercompany loans, it is more sensible decision for a parent company to make a balance between intercompany loans and external bank borrowings.

Author: Vineet Bhardwaj

Vineet Bhardwaj is Chief Manager (Faculty) at Union Learning Academy for Strategy and Finance at Gurugram. He can be reached at vineet.710@rediffmail.com

Disclaimer: The views expressed by the author/s in the article is/are their own. Bank promotion Study (bankpromotionstudy.com) assumes no responsibility or liability for any errors or omissions in the content of the article. The information contained in the article is provided on an "as is" basis.

Management of ESG in Banking and Financial Sector

2023-01-20T23:26:00.001+05:30

Article:

Management of ESG in Banking and Financial Sector

Introduction

After COVID 19, Businesses shifted their emphasis from profits to people; human impact, equality and health services were on the forefront. Economies crawled; everything from manufacturing to mining either had shut down or significantly reduced operations. People remained indoors. It was evident that environmental and social factors directly impact economic stability around the globe.

Banks play a critical role in driving a country’s economic progress and running the financial sector. The banking system promotes economic growth by mobilising funds into investments and increasing resource allocative efficiency. Thus, an efficient Banking System is a necessary prerequisite for the country’s development. Serving as a hub for savers and investors, these institutions form the foundation of financial system for any country.

The banking industry is transforming with digitalization and new norms particularly after COVID 19. Simultaneously banks are facing increased competition and refocusing their priorities on delivering a seamless digital experience. Digital solutions are providing the way for new opportunities to banks. On the other hands, banks are expected to prove their sustainability on a global scale. Gone are the days when bank valuation was done by looking at their innovations. Now a days the banks are valued for their readiness for ESG implementation. Banks play a critical role in ensuring corporate social responsibility (CSR) and flagbearers for worldwide transition away from very challenging carbon-emitting operations. Banks are really at the crossroads. One challenge is to do profitable business and other to navigate away from carbon emitting operations i.e. to do sustainable business. So, what is ESG in banking? How can banks meet the requirements and regulations that can either make or break these institutions?

ESG in Banking and Financial Services

ESG stands for Environmental, Social & Governance. It is a framework that answers the challenging questions of how banks can respond to the questions related to climate change, pollution and waste, customer satisfaction, Diversity, Equity, and Inclusion (DE&I), ethics and compliance, and corporate governance.

For banks, ESG is the need of the hour as these challenges and components are intertwined and an inseparable part of the banking system. As Environmental, Social & Governance (ESG) is fast transitioning from being voluntary to mandatory, the first step for banks is to prioritize investments to ensure sustainable growth. For example, from customer onboarding, data processing, fraud detection, customer accounting, lending of funds, and regulatory compliance, the entire functions are risky and expected to comply with certain levels of ESG adherence. In fact, banking companies, and investors are looking at methods to optimize the processes for an effective and impactful ESG implementation. In short, every bank is responsible for protecting the environment, building a diverse society, and ensuring transparent governance.

Why ESG for Banks?

ESG ratings for banks have now become the yardstick, banks would do well to invest and improve their products, infrastructures and processes aligned with ESG requirements. ESG in banking now underpins many facets of the banking industry’s operations which is an indicator to potential clients as to the reliability and sustainability of the business. banks are now literally compelled to report on their sustainability performance in an objective, measurable way. In fact, the recent developments in the business world show that investors are now using the ESG criteria to decide on the right bank to make an investment in the first place.

ESG reporting is important for both management and shareholders of banks. Through ESG reporting, Bankers seek to create more firm value and higher future profits. For the shareholders, ESG reporting leads to more profitable share prices and dividends. One goal of reporting is to provide ESG information because information on ESG influences the shareholders' investment decisions.

This occurs when the share price fluctuates as a result of some new information. ESG report(s) promotes the development of legitimacy, the satisfaction of stakeholders, and the prevention of future costs for the organization. A positive image created by ESG reports is beneficial in attracting employees and customers. All these factors can substantially increase the profitability and value of the firm and are also add value for the investors.

How banks can become an ESG-powered ecosystem? How can banks develop a sustainable ESG strategy? As the business world has been advancing towards building banks concerned about protecting the environment, promoting equity, and creating trust, banks are valued in terms of their societal responsibilities and the efforts they put in place to go green.

Critical goals like to become carbon neutral in all of their operations, converting routine financial processes to renewable energy sources, and achieving net-zero carbon status are at the forefront of banking industries. In order to expand their business and enhance their reputation, banks should strategically build strategies to ensure corporate sustainability and climate change efforts.

ESG in Banking: Building a Sustainable Future

So, ESG is all about taking responsibility for broader challenges around us. When banks embed ESG controls across multiple functions, they will be able to deliver a modern and seamless customer experience. They will also build a global community that is rooted in respect, trust, transparency and long-term value.

As banks are rapidly developing their ecosystem to service customers who demand around-the-clock service delivery, it takes the discussions around the environmental impact of global operations to enable compliant, resilient operations.

The end results will be long-lasting and capable of proactively repromoting trust in banking institutions, providing a platform to responsibly use natural resources. ESG also helps banks to use sensitive customer data discreetly and also use technology to ensure privacy and security. It also promotes ethical conduct across the business lines and brings out transparent reporting.

Conclusion

When banks are concerned about mobilizing customers to trust them, despite their multiple disconnected systems, ESG can redefine their operations. ESG-compliant banks are proven to be less vulnerable, future ready and more stable, and the commitment to reducing the footprint of banking operations can help banks to deal with urgent societal challenges that deliver new solutions. By following this essential paradigm shift, ESG banking can now map critical business services to climate adaptation and resilience.

Author: Vineet Bhardwaj

Vineet Bhardwaj is Chief Manager (Faculty) at Union Learning Academy for Strategy and Finance at Gurugram. He can be reached at vineet.710@rediffmail.com

Disclaimer: The views expressed by the author/s in the article is/are their own. Bank promotion Study (bankpromotionstudy.com) assumes no responsibility or liability for any errors or omissions in the content of the article. The information contained in the article is provided on an "as is" basis.

Multiple Choice Questions on Financial Analysis for Bank Promotion Exams (Part 1)

2022-12-31T11:40:00.000+05:30

Multiple Choice Questions on Financial

Analysis for Bank Promotion Exams (Part 1)

1. Balance sheet is a statement of assets and liabilities or statement of sources and uses

(a) as on a date

(b) as on 31st March

(d) for a particular period

The correct answer is option (a) as on a date

2. Assets can be represented as

(a) uses of funds

(b) sources of funds

(d) none of these

The correct answer is option (c) both (a) and (c) above

3. Liabilities can be represented as

(a) sources of funds

(b) uses of funds

(d) none of these

The correct answer is option (c) both (a) and (c) above

4. Current assets are defined as

(a) assets which are expected to be consumed or converted into cash within the operating cycle

(b) assets which are expected to be consumed or converted into cash within one year

(d) either (a) or (b), whichever is later

The correct answer is option (d) either (a) or (b), whichever is later

5. Fixed assets are defined as

(a) assets which are fixed to the land

(b) assets which have a fixed value

(d) assets which cannot be sold easily

The correct answer is option (c) assets which are acquired for production and are not meant for sale

Retail Banking Questions for Bank Promotion Exams (PART 1)

6. Term liabilities are one

(a) which are to be met within one year from the date of balance sheet

(b) which are payable beyond one year from the date of balance sheet

(d) which are not payable immediately

The correct answer is option (b) which are payable beyond one year from the date of balance sheet

7. Current Liabilities are those liabilities

(a) which are payable within one year

(b) which are expected to be met from the proceeds of current assets

(d) both (a) & (b) above

The correct answer is option (d) both (a) & (b) above

8. Which of the following is not classified as current asset?

(a) stocks

(b) prepaid expenses

(d) book debts

The correct answer is option (c) pre-operative expenses

9. Which of the following is classified as intangible or fictitious asset?

(a) Goodwill

(b) Preliminary expenses

(d) All of these

The correct answer is option (d) All of these

10. Which of the following is a current liability?

(a) Sundry creditors

(b) Borrowings from banks

(d) All of these

The correct answer is option (d) All of these

11. Debtors which are older than 6 months are to be classified as

(a) Current Assets

(b) Intangible Assets

(d) Fixed Assets

The correct answer is option (c) Non-Current Assets

12. Instalments of term loan falling due within a year are treated as

(a) current liability

(b) current asset

(d) term liability

The correct answer is option (a) current liability

13 sales minus cost of sales is referred to as:

(a) operating profit

(b) net profit

(d) gross profit

The correct answer is option (d) gross profit

14. Operating profit is arrived at by

(a) reducing administrative, general and selling expenses from gross profit

(b) adding back depreciation to gross profit

(d) adding back Interest expenses to gross profit

The correct answer is option (a) reducing administrative, general and selling expenses from gross profit

15. Cash profit Is

(a) gross profit before depreciation

(b) net profit after depreciation

(d) gross profit after depreciation

The correct answer is option (c) net profit before depreciation

Previous Years Recalled Questions for Bank Promotion Exams (Set 7)

16. Cash loss is

(a) gross loss before depreciation

(b) net loss after depreciation

(d) gross loss after depreciation

The correct answer is option (c) net loss before depreciation

17. Tangible net worth means:

(a) Paid up capital and reserves minus intangible assets

(b) Paid up capital and reserves minus instalment of term loan payable within one year

(d) Net worth minus current liabilities

The correct answer is option (a) Paid up capital and reserves minus intangible assets

18. The term ‘Liquid surplus ‘or ‘Net working capital ‘refers to

(a) total investment in current assets

(b) excess of current liabilities over current assets

(d) excess of capital plus free reserves over term

The correct answer is option (c) excess of current assets over current liabilities

19. Net working capital will be positive when

(a) current assets are more than current liabilities

(b) current liabilities are more than current assets

(d) both (a) and (c)

The correct answer is option (d) both (a) and (c)

20. Liquidity ratios include

(a) Current Ratio

(b) Quick Ratio

(d) both (a) and (b)

The correct answer is option (d) both (a) and (b)

21. Current Ratio is an indicator of —— position of the borrower

(a) liquidity

(b) solvency

(d) all above

The correct answer is option (a) liquidity

22. Current Ratio of less than 1 indicates that the borrower

(a) has sufficient current assets to meet current liabilities

(b) may be unable to pay current dues

(d) any of the above

The correct answer is option (b) may be unable to pay current dues

23. Current ratio as per second method of lending given by Tandon Committee works out to

(a) 1 : 1

(b) 2 : 1

(d) 1.33 : 1

The correct answer is option (d) 1.33 : 1

24. Quick assets mean

(a) all assets minus inventory

(b) all current assets minus inventory

(d) all current assets minus inventory and prepaid expenses

The correct answer is option (d) all current assets minus inventory and prepaid expenses

25. Acid Test Ratio is supportive ratio for

(a) Debt-Equity Ratio

(b) Current Ratio

(d) Net profit Ratio

The correct answer is option (b) Current Ratio

26. Debt Equity Ratio is relationship between:

(a) total liabilities and net worth

(b) current assets and current liabilities

(d) term liabilities to tangible net worth

The correct answer is option (d) term liabilities to tangible net worth

27. A decreasing Debt Equity Ratio means

(a) higher stake of owners

(b) lower stake of owners

(d) sharply increasing profitability of the concern

The correct answer is option (a) higher stake of owners

28. Profit & Loss account helps in computing

(a) Profitability Ratio

(b) Solvency Ratio

(d) Liquidity Ratio

The correct answer is option (a) Profitability Ratio

29. Return on Investment (RoI) falls in the category of

(a) profitability ratios

(b) Solvency Ratios

(d) all above

The correct answer is option (a) profitability ratios

30. ‘Activity Ratios ‘or ‘Turnover Ratios ‘indicate

(a) extent of profitability

(b) efficiency of the concern in the utilization of assets

(d) stake of term lending institutions

The correct answer is option (b) efficiency of the concern in the utilization of assets

Multiple Choice Questions (MCQs) on Advances Key Topics for Bank Promotion Exams

2022-12-30T15:21:00.002+05:30

Multiple Choice Questions (MCQs) on Advances

Key Topics for Bank Promotion Exams

1. Lenders shall report credit information, including classification of an account as SMA to CRILC, on all borrowers having aggregate exposure of Rs. 5 crore and above with them. CRILC stands for?

A. Central Repository of Information on Large Credits.

B. Central Repository of Information on Large Credit accounts.

C. Centralized Repository of Information on Large Credits.

D. Central Repository of Informatics on Large Credits.

The correct answer is Option A. Central Repository of Information on Large Credits.

2. Which of the following statement with respect to reporting of Advances to CRILC (Central Repository of Information on Large Credits) by the banks is not correct?

A. Banks need to report position of the advances of Rs. 5 crore and above to CRILC.

B. The CRILIC reporting need to be done on fortnightly basis.

C. Lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs. 5 crore and above), on a weekly basis.

D. The CRILIC reporting on all accounts with an exposure of Rs. 5 crore and above need to be done on monthly basis (Other than accounts in default).

The correct answer is Option B. The CRILIC reporting need to be done on fortnightly basis.

3. Which of the following is not a correct combination of Sub-category of Stressed Assets (Number of days overdue) for Cash credit account?

A. SMA 0 - 1 day to 30 days.

B. SMA 1 - 31days to 60 days.

C. SMA 2 - 61 days to 90 days.

D. Sub Standard- 91st day onwards.

The correct answer is Option A. SMA 0 - 1 day to 30 days.

4. Red Flagging of Accounts is a measure towards?

A. NPA management.

B. Credit Management.

C. Operational risk management with respect to loan accounts.

D. Fraud risk control.

The correct answer is Option D. Fraud risk control.

5. As per RBI guidelines, if the account is Red flagged by considering EWS for fraudulent activity, a bank can monitor the account as per its own discretion/guidelines upto a limit of?

A. Rs. 5 crore.

B. Rs. 100 crore.

C. Rs. 50 crore.

D. Rs. 10 crore.

The correct answer is Option C. Rs. 50 crore.

Retail Banking Questions for Bank Promotion Exams (PART 1)

6. What is the Provision coverage ratio (PCR) stipulated by RBI for Scheduled commercial banks?

A. 60%.

B. 70%.

C. 80%.

D. 75%.

The correct answer is Option B. Rs. 70%.

7. In case of Consortium banking arrangement, if a member bank notices suspected fraudulent Early Warning Signals (EWS), the initial decision to classify account as RFA or Fraud will be at its own level. It should report the details in CRILIC and alert other banks. In such cases, the consortium meeting should be held?

A. Within 30 days of such reporting.

B. Within 7 days of such reporting.

C. Within 15 days of such reporting.

D. Consortium meeting is not required.

The correct answer is Option C. Within 15 days of such reporting.

8. In case of Red Flagged account, in case of consortium accounts, if minimum of percentage of lenders decide to classify the account as Red Flagged, then all banks should accept it and immediately Forensic Audit to be ordered.

A. 75%.

B. 66%.

C. 51%.

D. 60%.

The correct answer is Option D. 60%.

9. is an examination and evaluation of a firm’s or individual’s financial information for use as evidence in the court of law.

A. Tax audit.

B. Forensic Audit.

C. Revenue Audit.

D. Legal Audit.

The correct answer is Option B. Forensic Audit.

10. In case of forensic audit, the auditors should audit the financial statements of the subject firm or company for a minimum period of?

A. 3 years.

B. No minimum or maximum limit.

C. 5 years and the maximum is depending on requirement.

D. 2 years and the maximum is depending on requirement.

The correct answer is Option B. No minimum or maximum limit.

11. In case of consortium or multiple banking arrangements, if the member banks orders for a forensic audit of customer account, as per RBI guidelines, the same need to be completed within a maximum period of?

A. 30 days.

B. 60 days.

C. 90 days.

D. 180 days.

The correct answer is Option C. 90 days.

12. In respect of borrowers having aggregate fund based working capital limit of Rs. ……………. from banking system, a minimum level of and above from the percent shall disbursed by the banks as loan component (working capital demand loan).

A. 150 crore and 50%.

B. 150 crore and 40%.

C. 50 crore and 40%.

D. 5 crore and 40%.

The correct answer is Option B. 150 crore and 40%.

13. The undrawn portion of cash credit/ overdraft limits sanctioned to the large borrowers with aggregate working capital exposure of Rs. 150 crore and more, irrespective of whether unconditionally cancellable or not, shall attract a ‘Credit conversion factor’ of?

A. 20%.

B. 25%.

C. 30%.

D. 50%.

The correct answer is Option A. 20%.

14. As per RBI’s guidelines, restructuring of advance may involve modification of terms of the advances / securities. The process of restructuring includes?

A. Alteration of payment period / payable amount / the amount of instalments / rate of interest.

B. Roll over of credit facilities.

C. Sanction of additional credit facility/ release of additional funds for an account in default to aid curing of default / enhancement of existing credit limits.

D. Compromise settlements where time for payment of settlement amount exceeds three months.

E. All the above.

The correct answer is Option E. All the above.

Mock test (SET 1) for Bank Promotion Exams

15. Which of the following category of Advance is eligible for restructuring as per RBI guidelines?

A. NPA accounts only.

B. NPA accounts in Substandard category only.

C. Standard accounts only.

D. Both NPA and Standard accounts.

The correct answer is Option D. Both NPA and Standard accounts.

16. As per RBI guidelines, in case of MSME accounts with aggregate exposure less than Rs. 25 crore, the account can be upgraded only if it demonstrates satisfactory performance during the specified period. Specified period refers to?

A. One year from the commencement of the first payment of interest or principal, whichever is later.

B. Two years from the commencement of the first payment of interest or principal, whichever is later.

C. 6 months from the commencement of the first payment of interest or principal, whichever is later.

D. Three years from the commencement of the first payment of interest or principal, whichever is later.

The correct answer is Option A. One year from the commencement of the first payment of interest or principal, whichever is later.

17. A Cash Credit account is not considered as ‘Out of Order’ in which of the following cases?

A. If the outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days.

B. If the account is not renewed for the period of 90 days from the renewal due date.

C. Outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days.

D. The account has Outstanding balance which is less than sanctioned limit, there are credits in the account but the Credits are not sufficient to cover the interest debited during the same period.

The correct answer is Option B. If the account is not renewed for the period of 90 days from the renewal due date.

18. A loan granted for short duration crops will be treated as NPA, if the instalment of principal or interest thereon remains overdue for a period of?

A. One crop season.

B. Two crop season.

C. 270 days.

D. 90 days.

The correct answer is Option B. Two crop season.

19. A Loan account has an outstanding exposure of Rs. 5 crore and it is considered as ‘Loss Asset’. The value of security attached to the account is Rs. 50 Lakh. What is the amount of Provisioning the bank needs to make?

A. Rs. 4 crore.

B. Rs. 5 crore.

C. Rs. 1.25 crore.

D. Rs. 2.25 crore.

The correct answer is Option B. Rs. 5 crore.

20. A Loan account has an outstanding exposure of Rs. 5 crore and it is considered as ‘Doubtful Asset’. The realizable value of security attached to the account is Rs. 4 crore. The account is in Doubtful status from last 2 years. What is the amount of Provisioning the bank needs to make?

A. Rs. 4 crore.

B. Rs. 2.60 crore.

C. Rs. 1 crore.

D. Rs. 2 crore.

The correct answer is Option B. Rs. 2.60 crore.

Retail Banking Multiple Choice Questions (MCQs) for Bank Promotion Exams (set 2)

2022-12-29T08:28:00.001+05:30

Retail Banking Multiple Choice Questions

(MCQs) for Bank Promotion Exams

1.Loans to individuals for educational purposes, including vocational courses, with a maximum limit of ___________will be considered as eligible for priority sector classification.

A. Rs. 10 lakhs.

B. Rs. 20 lakhs.

C. Rs. 7.5 lakhs for studies in India and Rs. 20 lakhs for studies abroad.

D. Rs. 10 lakhs for studies in India and Rs. 20 lakhs for studies abroad.

The correct answer is Option B. Rs. 20 lakhs.

2. What is the maximum cap on Housing loans sanctioned by the banks is eligible for classification under priority sector advances?

A. Rs.35 lakh in metropolitan centres and up to Rs.25 lakh in other centres provided overall cost of the dwelling unit should not exceed Rs. 45 lakh in metros and Rs. 30 lakh in other centers.

B. Rs. 40 lakh in metropolitan centres and up to Rs. 30 lakh in other centres irrespective of cost of dwelling unit.

C. Rs. 35 lakh in metropolitan centres and up to Rs. 25 lakh in other centres provided overall cost of the dwelling unit should not exceed Rs. 50 lakh.

D. None of these.

The correct answer is Option A. Rs.35 lakh in metropolitan centres and up to Rs.25 lakh in other centres provided overall cost of the dwelling unit should not exceed Rs. 45 lakh in metros and Rs. 30 lakh in other centers.

3. Bank loans to HFCs (approved by NHB for their refinance) for on-lending, up to ________for individual borrowers is eligible to get classified as Priority sector advances.

A. Rs. 10 lakh.

B. Rs. 20 lakh.

C. Rs. 20 lakh in urban areas and Rs. 10 lakh in rural areas.

D. Rs. 15 lakh in urban areas and Rs. 10 lakh in rural areas.

The correct answer is Option B. Rs. 20 lakh.

4. Which of the following statement with respect to housing loan is incorrect?

A. A bank can sanction a Housing Loan for a maximum period of 30 years.

B. Maximum LTV which can be considered for housing loans is 80%.

C. Maximum Loan Tenure which can be considered for housing loans under Pradhan Mantri Awas Yojana (PMAY –Urban) Scheme is 20 years.

D. Loans up to Rs.10 lakh in metropolitan centres and up to Rs.6 lakh in other centres for repairs to damaged dwelling units conforming to the overall cost of the dwelling unit will be eligible for Priority Sector advances.

The correct answer is Option B. Maximum LTV which can be considered for housing loans is 80%.

5. A Bank proposes to sanction a Housing Loan of Rs. 100 lakhs. The minimum margin on security it can consider is?

A. 10%.

B. 15%.

C. 20%.

D. 25%.

The correct answer is Option D. 25%.

6. A single rupee deposit of Rs. _______ and above need to be considered by the banks as “Bulk Deposit”?

A. Rs. 1 crore.

B. Rs. 50 lakhs.

C. Rs. 10 crore.

D. Rs. 2 crore.

The correct answer is Option D. Rs. 2 crore.

One liner Questions and Answers for Bank Promotion Exams (Set 4)

7. For reverse mortgage loans the age of the applicant should be above?

A. 50 years.

B. 55 years.

C. 60 years.

D. 65 years.

The correct answer is Option C. 60 years.

8. A House hold which is considered as Mid Income Group – I (MIG-I), the annual income of the house hold is in the range of?

A. Upto Rs. 3 lakh

B. Rs. 3 lakh to Rs. 6 lakh.

C. Rs. More than 6 lakh to 12 lakh.

D. Rs. More than 6 lakh to 10 lakh.

The correct answer is Option C. Rs. More than 6 lakh to 12 lakh.

9. What is the minimum and Maximum Housing Loan a customer can apply through psbloansin59minutes.com?

A. Minimum Rs. 10 lakh & Maximum No limits.

B. Minimum no limit & Maximum Rs. 5 crore.

C. Minimum no limit & Maximum Rs. 10 crore.

D. Minimum Rs. 2 lakh & Maximum Rs. 10 crore.

The correct answer is Option C. Minimum no limit & Maximum Rs. 10 crore.

10. What is the applicable Standard Asset Provisioning Required on Housing Loans?

A. 0.50%.

B. 0.25%.

C. 0.25% for loans upto Rs. 75 Lakhs and 0.40% for Loans above Rs. 75 lakhs.

D. 0.25% for loans upto Rs. 30 Lakhs and 0.40% for Loans above Rs. 30 lakhs.

The correct answer is Option B. 0.25%.

11. As per THE REAL ESTATE (REGULATION AND DEVELOPMENT) ACT, 2016, a builder or developer needs to register the project with Real Estate Regulatory Authority (RERA), if ______?

A. Number of apartments is more than 8 or the total area developed is more than 500 square meters.

B. Number of apartments is more than 10 or the total area developed is more than 500 square meters.

C. Number of apartments is more than 8 or the total area developed is more than 600 square meters.

D. Number of apartments is more than 15 or the total area developed is more than 500 square meters.

The correct answer is Option A. Number of apartments is more than 8 or the total area developed is more than 500 square meters.

12. The exposures included in the regulatory retail portfolio of banks are assigned a risk weight of 75 per cent. (Other than those which are Non-Performing Assets). As per RBI guidelines, maximum aggregated retail exposure to one counterparty should not exceed the absolute threshold limit of Rs.5 crore to avail this benefit. The limit has been increased to?

A. Rs. 10 crore.

B. Not increased and it remains the same.

C. Rs. 7.5 crore.

D. Rs. 12.5 crore.

The correct answer is Option C. Rs. 7.5 crore.

13. As per the latest amendment made to SARFAESI Act 2002, banks to register particulars of transactions of securitisation, reconstruction and creation of security interest with the Central Registry of Securitisation Asset Reconstruction and Security Interest (“CERSAI”) within a maximum period of?

A. 90 days.

B. 30 days.

C. 60 days.

D. No such limit.

The correct answer is Option D. No such limit.

14.Vidya Lakshmi is a first of its kind portal for students seeking Education Loan. The portal has been developed and being maintained by?

A. SIDBI.

B. NSDL e-Governance Infrastructure Limited.

C. Indian Banks Association (IBA).

D. National Council of Educational Research and Training (NCERT).

The correct answer is Option B. NSDL e-Governance Infrastructure Limited.

Previous Years Recalled Questions for Bank Promotion Exams (Set 3)

15. Under Vidya Lakshmi portal, a student can apply to a maximum of ______banks using Common Educational Loan Application Form (CELAF)?

A. 3.

B. 2.

C. 4.

D. 1.

The correct answer is Option A. 3.

16. As per Credit Guarantee Fund Scheme for Education Loans managed by NCGTC, which of the following statement is not appropriate?

A. The Guarantee available is for an amount of Loan sanctioned upto Rs. 7,50,000.

B. Guarantee cover can be obtained on the Outstanding Loan Amount i.e. guarantee can be obtained only after full or partial disbursement of the loan.

C. Interest charged to borrower by MLI should not be more than 2% over the Base Rate/ MCLR.

D. No Collateral security should be attached with the Loan. However, third party guarantee can be available.

The correct answer is Option D. No Collateral security should be attached with the Loan. However, third party guarantee can be available.

17. As per IBAs Model Education Loan Scheme, education loan portfolio is classified into three categories. Which of the following is not an applicable category?

A. Loans to students admitted to top rated institutions.

B. Loans to students admitted to other domestic institutions

C. Loans to students seeking studies abroad.

D. Loans to students seeking studies in professional education.

The correct answer is Option D. Loans to students seeking studies in professional education.

18. As per IBAs Model Education Loan Scheme, what is the minimum margin the banks can insist for sanctioning Education loans above Rs. 7.5 Lakhs for a student to study in India and study abroad?

A. 5% for studies in India and 15% for studies abroad.

B. 5% for studies in India and 10 % for studies abroad.

C. Nil.

D. At the Discretion of the Bank.

The correct answer is Option D. At the Discretion of the Bank.

19. Faster Adoption and Manufacturing of Hybrid and Electric vehicle (FAME) scheme has been extended till March 31, 2024. The scheme, started in 2019 for promoting sales of electric vehicles. This scheme is administered by?

A. Ministry of Heavy Industries.

B. Ministry of Road Transport & Highways.

C. Ministry of Environment.

D. Ministry of Housing & Urban affairs.

The correct answer is Option A. Ministry of Heavy Industries.

20. Vahan 4.0 is the centralized data management system and provides Vehicles Data of different states under one portal. Which of the following data on registered vehicles, can be viewed under the portal?

A. Registration Details.

B. Chassis and Engine Details.

C. Fitness Validity.

D. Insurance Details of Vehicle.

E. All the above.

The correct answer is Option E. All the above.

Retail Banking Questions for Bank Promotion Exams (PART 1)

2022-12-28T11:31:00.003+05:30

Retail Banking Questions for Bank Promotion

Exams (PART 1)

1. As per Latest RBI guidelines, retail investors are eligible to invest in Government securities by opening ‘Retail Direct Gilt Account’ (RDG Account) with?

A. AD Banks.

B. Depository Participants.

C. SEBI.

D. RBI.

The correct answer is Option D. RBI.

2.The maximum number of nominees permissible for ‘Retail Direct Gilt Account’ is?

A. At the discretion of account holder.

B. 3 nominees.

C. 2 nominees.

D. 1 only.

The correct answer is Option C. 2 nominees.

3. Which of the following statement with respect to Basic Savings Bank Deposit Account' (BSBDA)’ account is not appropriate?

A. This account shall not have the requirement of any minimum balance.

B. There will be no limit on the number of deposits that can be made in a month, account holders will be allowed a maximum of four withdrawals in a month, including ATM withdrawals.

C. Holders of BSBDA account will be eligible for opening any other SB account with any banks including Small account.

D. If a customer has any other existing savings bank deposit account in that bank, he is required to close it within 30 days from the date of opening a 'Basic Savings Bank Deposit Account'.

The correct answer is Option C. Holders of BSBDA account will be eligible for opening any other SB account with any banks including Small account.

4. Which of the following is not a limitation associated with ‘Small Account’ opened in the name of an individual?

A. the aggregate of all credits in a financial year does not exceed rupees one lakh.

B. the aggregate of all withdrawals and transfers in a month does not exceed rupees ten thousand.

C. Foreign remittances cannot be credited to Small Accounts without completing normal KYC formalities.

D. the balance at any point of time does not exceed rupees fifty thousand.

E. Small accounts are valid for life time, if the transaction limits are complied.

The correct answer is Option E. Small accounts are valid for life time, if the transaction limits are complied.

5. The process of reconfirming key details of large value cheques is introduced in the name of Cheque Positive Pay System. The system is being developed by?

A. IDRBT.

B. NPCI.

C. RBI.

D. BCSBI.

The correct answer is Option B. NPCI.

Mock test (SET 1) for Bank Promotion Exams

6. Availing the facility of ‘Positive Pay’ is?

A. Compulsory for all cheque issuers irrespective of the amount of cheque issued.

B. Compulsory for all cheque issuers if the amount of cheque issued exceeds Rs. 10,00,000.

C. at the discretion of the account holder, however, the banks may consider making it mandatory in case of cheques for amounts of Rs.5,00,000 and above.

D. Compulsory for all cheque issuers if the amount of cheque issued exceeds Rs. 100,000.

The correct answer is Option C. at the discretion of the account holder, however, the banks may consider making it mandatory in case of cheques for amounts of Rs.5,00,000 and above.

7. As per the guidelines under Savings bank account interest deregulation, banks can offer deferential rate of interest to the balance in SB account above?

A. Rs. 2 lakh.

B. Rs. 50,000.

C. Rs. 1 lakh.

D. As decided by the bank.

The correct answer is Option C. Rs. 1 lakh.

8. The minimum and maximum tenure for accepting Term Deposits by the Banks as per the RBI guidelines is?

A. 7 days and 10 years.

B. 7 days and 15 years.

C. 15 days and 10 years.

D. 7 days and maximum at the discretion of the bank.

The correct answer is Option D. 7 days and maximum at the discretion of the bank.

9. As per RBI guidelines, the accounts opened with OTP based e-KYC shall not be allowed to operate for a period of more than

A. 6 months.

B. 2 years.

C. 1 year.

D. 18 months.

The correct answer is Option C. 1 year.

10. In case of V-CIP, the video recordings should be preserved for a minimum period of?

A. 3 years from the date of account opening.

B. 5 years from the date of account opening.

C. 18 months from the date of last transaction or after the business relationship is ended.

D. 5 years after the business relationship is ended.

The correct answer is Option D. 5 years after the business relationship is ended.

11. As per Revised RBI guidelines on KYC norms, in case a customer proposes to update his communication address, he can submit a self-declaration confirming new address to the bank. In such cases, the positive confirmation on address updated through relevant documents must be obtained within a period of?

A. 12 months.

B. 3 months.

C. 2 months.

D. 6 months.

The correct answer is Option C. 2 months.

12. Periodic updation of KYC shall be carried out at least once in every…………. for high risk customers, once in every…………. years for medium risk customers and once in every………… years for low risk customers.

A. 2 years, 8 years, 10 years.

B. 2 years, 7 years, 10 years.

C. 3 years, 8 years, 10 years.

D. 2 years, 6 years, 10 years.

The correct answer is Option A. 2 years, 8 years, 10 years.

Previous Years Recalled Questions for Bank Promotion Exams (Set 5)

13. Which of the following is the designated agency for managing CKYC records?

A. RBI.

B. CIBIL.

C. CERSAI.

D. CDSL.

The correct answer is Option C. CERSAI.

14. Foreign Account Tax Compliance Act (FATCA) declaration is obtained to comply Inter-Governmental Agreement (IGA) entered by India with?

A. Canada.

B. European Union.

C. USA.

D. France.

The correct answer is Option C. USA.

15. As per KYC guidelines of RBI, all necessary records of transactions between the Banks and the customer, both domestic and international should be preserved for at least……… years from the date of transaction.

A. 10 years.

B. 7 years.

C. 5 years.

D. 5 Years in case of Low and medium risk and 10 years for high risk customers.

The correct answer is Option C. 5 years.

16. Which of the following statement with respect to Cash Transaction Report (CTR) is not true?

A. All cash transaction of above Rs. 10 lakhs or Foreign Currency Equivalent should be included under CTR.

B. Cash transactions where forged notes used with individual transactions of more than Rs.50000.

C. All series of cash transactions below Rs. 10.0 lakhs but aggregate value exceeds Rs. 10 lakh per month or equivalent Foreign Currency.

D. Cash transaction report to be submitted to FIU-IND by banks on fortnightly basis.

e. Cash transaction report to be submitted to FIU-IND by banks on monthly basis.

The correct answer is Option D. Cash transaction report to be submitted to FIU-IND by banks on fortnightly basis.

17. Who among the following cannot subscribe to Gold Bond under “Sovereign Gold Bond Scheme”?

A. Resident individuals.

B. HUFs & Trusts.

C. Non-Resident Indians.

D. Universities and Charitable Institutions.

The correct answer is Option C. Non-Resident Indians.

18. With respect to Sovereign Gold Bond (SGB) Scheme, when the customer has dispute regarding the scheme and subscription, he can first raise the dispute with?

A. RBI ombudsman directly.

B. Respective regional offices of RBI.

C. Sovereign Gold Bond Appellate Tribunal.

D. Nodal officers of receiving institution.

The correct answer is Option D. Nodal officers of receiving institution.

19. Which of the following statement with respect to Sovereign Gold Bond Scheme 2022-23 is not appropriate?

A. Minimum permissible investment will be 1 gram of gold.

B. The maximum limit of subscription shall be 4 KG for individual, 4 Kg for HUF and 20 Kg for trusts and similar entities per fiscal.

C. The issue price of the Gold Bonds will be Rs. 50 per gram less for those who subscribe online and pay through digital mode.

D. Payment for the Bonds can be through cash payment up to a maximum of Rs.50,000.

The correct answer is Option D. Payment for the Bonds can be through cash payment up to a maximum of Rs.50,000.

20. What is the current rate of interest payable by the banks to depositors/claimants on the unclaimed interest-bearing deposit amount transferred to the Depositor Education and Awareness Fund (DEAF)?

A. 3% simple interest p.a.

B. 3.5% simple interest p.a.

C. 3 % p.a. compounded monthly.

D. 3.5 % p.a. compounded monthly.

The correct answer is Option A. 3% simple interest p.a.

21. As per the latest RBI guidelines, if a term deposit account matured and left unclaimed with the bank, the rate of interest applicable on these deposits is?

A. Prevailing Savings Deposit rate of the bank.

B. Contracted Fixed Deposit rate.

C. Interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is higher.

D. Interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower.

The correct answer is Option D. Interest as applicable to savings account or the contracted rate of interest on the matured TD, whichever is lower.

Important Multiple Choice Questions with Answers for Bank Promotion Exams

2022-12-27T14:48:00.002+05:30

Important Multiple Choice Questions with Answers for Bank Promotion Exams

1. Which of the following is not a component under “Ayushman Bharat” scheme?

A. Health and Wellness Centres (HWCs).

B. Pradhan Mantri Jan Arogya Yojana (PM-JAY).

C. Pradhan Mantri Jeevan Asha Yojana.

D. All the above.

The correct answer is Option C. Pradhan Mantri Jeevan Asha Yojana.

2. With respect to “Stand up India” Scheme of GOI, which of the following statement is appropriate?

A. The Scheme facilitates bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one-woman borrower per bank branch for setting up Greenfield enterprises.

B. The Scheme facilitates bank loans between Rs.1 lakh and Rs.10 lakh to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one-Woman borrower per bank branch for setting up greenfield enterprises.

C. The scheme facilitates the credit facility upto Rs. 2 crore for a start-up involving woman entrepreneur.

D. The scheme facilitates the credit facility upto Rs. 2 crore for a start-up involving woman entrepreneur belong to SC/ST or OBC category.

The correct answer is Option A. The Scheme facilitates bank loans between Rs.10 lakh and Rs.1 crore to at least one Scheduled Caste/ Scheduled Tribe borrower and at least one-woman borrower per bank branch for setting up Greenfield enterprises.

3. What is the maximum subsidy available under Swachhta Udyami Yojana (SUY)?

A. Rs. 3.25 lakhs.

B. Rs. 3 lakhs.

C. Rs. 4 lakhs.

D. Rs. 5 lakhs.

The correct answer is Option A. Rs. 3.25 lakhs.

4. Under the Swachhta Udyami Yojana (SUY) the loan can be sanctioned by the banks for a maximum period of?

A. 10 years.

B. 7 years.

C. 8 years.

D. 15 years.

The correct answer is Option A. 10 years.

5. Under the Swachhta Udyami Yojana (SUY) the loans should be sanctioned by the banks at a maximum interest rate of?

A. 5% p.a.

B. 4% p.a.

C. 6% p.a.

D. Banks can decide.

The correct answer is Option B. 4% p.a.

6. Which of the following is the implementation agency of Prime Minister’s Employment Generation Programme (PMEGP)?

A. Ministry of Rural Development.

B. Ministry of Agriculture.

C. Khadi and Village Industries Commission (KVIC).

D. Niti ayog.

The correct answer is Option C. Khadi and Village Industries Commission (KVIC).

7. What is the maximum loan component which can be guaranteed under Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS) launched by Government of India with total funding outlay of Rs. 50,000 crore?

A. Rs. 2 crore per project.

B. Rs. 100 crore per project.

C. Rs. 25 crore per project.

D. Rs. 50 crore per project.

The correct answer is Option B. Rs. 100 crore per project.

8. What is the maximum cap on interest rate specified by government for Loan Guarantee Scheme for Covid Affected Sectors (LGSCAS)?

A. No maximum cap and banks can decide.

B. 9.15%.

C. 7.95%.

D. 6.00%.

The correct answer is Option C. 7.95%.

Mock test (SET 1) for Bank Promotion Exams

9. Which of the following statement with respect to CGSMFI scheme is appropriate?

A. All NBFC-MFIs/MFIs are eligible. Banks should ensure that at least 50% of the funding provided should go to lower rated NBFC-MFIs/MFIs.

B. Guarantee cover is provided upto 75% of the amount in default.

C. Maximum tenure of loans sanctioned under the scheme is 3 years.

D. The interest rate on funding provided by the MLIs to the NBFC-MFIs/MFIs shall be capped at MCLR+2% p.a.

E. All the above.

The correct answer is Option E. All the above.

10. What is the incentive provided by RBI for distribution of coins in rural and semi-urban areas?

A. Rs. 25 per Bag.

B. Rs. 55 per Bag.

C. Rs. 65 per Bag.

D. Rs. 75 per Bag.

The correct answer is Option D. Rs. 75 per Bag.

11. What is the maximum per transaction limit can be transferred through NEFT to Nepal under Indo-Nepal Remittance Facility Scheme?

A. Rs. 50000.

B. Rs. 20000.

C. Rs. 1,00,000.

D. Rs. 2,00,000.

The correct answer is Option D. Rs. 2,00,000.

12. Which of the following is a component of Marginal Cost of Funds based Lending Rate (MCLR)?

A. Marginal cost of funds.

B. Negative carry on account of CRR.

C. Operating costs & Tenor premium.

D. All the above.

The correct answer is Option D. All the above.

13. The average daily balance that a bank is required to maintain with the Reserve Bank as a share of such per cent of its Net demand and time liabilities (NDTL) is known as?

A. Statutory Liquidity Ratio.

B. Cash Reserve Ratio (CRR).

C. Marginal Standing Facility.

D. Open Market Operation.

The correct answer is Option B. Cash Reserve Ratio (CRR).

14. SLR is the share of NDTL that a bank is required to maintain in safe and liquid assets specified by RBI mainly in Government securities. What is the minimum and maximum SLR, RBI can specify for the banks?

A. 0% and 25%.

B. 5% and 40%.

C. 0% and 40%.

D. 5% and 25%.

The correct answer is Option C. 0% and 40%.

15. Under Marginal Standing Facility (MSF), the banks can borrow from RBI upto a maximum limit of?

A. Excess of the SLR Balance held only.

B. 5% of NDTL.

C. 5% of NDTL and Excess balance held in SLR.

D. 2% of NDTL and Excess balance held in SLR.

The correct answer is Option D. 2% of NDTL and Excess balance held in SLR.

16. The Rate at which RBI extends overnight liquidity to banks against the collateral of government and other approved securities under the liquidity adjustment facility (LAF) is?

A. Reverse Repo Rate.

B. Ways and Means of Finance.

C. Repo Rate.

D. Marginal Standing Facility.

The correct answer is Option C. Repo Rate.

Previous Years Recalled Questions for Bank Promotion Exams (Set 7)

17. Under “Long Term Repo Operations” a bank can borrow from RBI against the government securities or with similar collaterals for period ranging from?

A. 3 months to 1 years.

B. 6 months to 3 years.

C. 1 year to 3 years.

D. 1 year to 5 years.

The correct answer is Option C. 1 year to 3 years.

18. A Bank can issue Certificate of Deposit for a tenure of?

A. 7 days to 1 year.

B. 7 days to 3 years.

C. 1 years to 3 years.

D. 1 year to 5 years.

The correct answer is Option A. 7 days to 1 year.

19. The (fixed) interest rate at which the Reserve Bank absorbs liquidity, on an overnight basis, from banks against the collateral of eligible government securities under the LAF is known as?

A. Repo Rate.

B. Marginal Standing facility.

C. Reverse Repo.

D. Ways and Means of Advance.

The correct answer is Option C. Reverse Repo.

20. Commercial papers are issued with a minimum denomination of?

A. Rs. 10 lakhs and multiples thereof.

B. Rs. 1 lakh and multiples thereof.

C. Rs. 1 crore and multiples thereof.

D. Rs. 5 lakhs and multiples thereof.

The correct answer is Option D. Rs. 5 lakhs and multiples thereof.

Multiple Choice Questions on Import Finance for Bank Promotion Exams

2022-12-26T16:17:00.004+05:30

Multiple Choice Questions on Import Finance for Bank Promotion Exams

1. Buyers credit and suppliers’ credit are the types of Trade credit facilities associated with?

Option a. Exports.

Option b. Hedging.

Option c. Imports.

Option d. All the above.

The correct answer is Option c. Imports.

2. The maximum cap on Outstanding Contracts under simplified hedging facility is?

Option a. USD 30 million, or its equivalent, on a gross basis.

Option b. USD 100 million, or its equivalent, on a gross basis.

Option c. USD 50 million, or its equivalent, on a gross basis.

Option d. USD 25 million, or its equivalent, on a gross basis.

The correct answer is Option a. USD 30 million, or its equivalent, on a gross basis.

3. RBI has made it mandatory for all non-individual customers who undertake single NEFT or RTGS transactions of and above to submit Legal Entity Identifier (LEI) to the banks.

Option a. Rs. 5 crores.

Option b. Rs. 10 crores.

Option c. Rs. 50 crores.

Option d. Rs. 100 crores.

The correct answer is Option c. Rs. 50 crores.

4. The number of Digits in Legal Entity Identifier (LEI) code is?

Option a. 15.

Option b. 20.

Option c. 14.

Option d. 18.

The correct answer is Option b. 20.

5. Which of the following statement is not appropriate?

Option a. Joint NRE/ FCNR (B) Account/NRO account is permissible with two or more NRIs/PIOs.

Option b. NRIs/ PIOs can hold NRE/FCNR(B)/ NRO account jointly with a resident relative on ‘former or survivor’ basis.

Option c. FCNR(B) account can be opened in the form of Savings, Current, Recurring, Fixed Deposit.

Option d. NRE accounts can be opened in the form of Savings, Current, Recurring, Fixed Deposit. The Min tenure of fixed deposits is 1 year and maximum (more than 3 years) can be decided by the banks as per their ALM pattern.

The correct answer is Option c. FCNR(B) account can be opened in the form of Savings, Current, Recurring, Fixed Deposit.

6. The Minimum and maximum period for opening FCNR (B) deposits by the banks is?

Option a. 7 days & 3 years.

Option b. 1 Year & 5 years.

Option c. 1 year & 3 years.

Option d. Banks can decide.

The correct answer is Option b. 1 Year & 5 years.

7. With respect to NRO accounts, which of the following statement is not appropriate?

Option a. NRO accounts can be opened in the form of SB/Current/RD/FD accounts.

Option b. Inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permissible credits to NRO account.

Option c. Balance in NRO account is not repatriable except for current income; and remittances by NRIs/ PIOs up to USD 1 million per financial year in accordance with the provisions of FEMOPTION A.

Option d. The interest earned on NRO accounts is not taxable.

The correct answer is Option d. The interest earned on NRO accounts is not taxable.

8. An NRI who is returning India permanently can open Account with AD bank to receive his superannuation benefits from overseas employer.

Option a. EEFC account.

Option b. RFC account.

Option c. Domestic SB account.

Option d. Current Account.

The correct answer is Option b. RFC account.

Previous Years Recalled Questions for Bank Promotion Exams (Set 5)

9. Any person resident outside India, having a business interest in India, can open account with an authorised dealer for the purpose of depositing bona fide transactions/earnings in rupees in India.

Option a. RFC account.

Option b. NRE account.

Option c. NRO account.

Option d. SNRR account.

The correct answer is Option d. SNRR account.

10. Which of the following statement with respect to SNRR account is not true?

Option a. SNRR account is Non-interest-bearing account.

Option b. Debits and credits specific/ incidental to the business proposed to be done by the account holder are permitted in SNRR account.

Option c. The maximum tenure for opening SNRR account is 7 years.

Option d. The funds in SNRR account is not repatriable.

e. Only (c) & (d).

The correct answer is Option d. The funds in SNRR account is not repatriable.

11. TDS on Interest earned on NRO accounts is 30% plus applicable cess. The TDS is applicable if the amount of interest paid exceeds?

Option a. Rs. 30,000.

Option b. Rs. 40,000.

Option c. Rs. 50,000.

Option d. Rs. 10,000.

The correct answer is Option d. Rs. 10,000.

12. The integrated ombudsman scheme -2021 of RBI covers?

Option a. All Commercial Banks, RRBs, Scheduled Primary (Urban) Co-operative Banks and Non-Scheduled Primary (Urban) Co-operative Banks with deposits size of Rupees 50 crore and above.

Option b. all NBFCs (excluding Housing Finance Companies) which are authorised to accept deposits or have customer interface, with an assets size of Rupees 100 crore and above.

Option c. all System Participants defined under PSS act 2007.

Option d. All the above.

The correct answer is Option d. All the above.

13. Appellate Authority under RBI’s integrated Ombudsman scheme 2021 is?

Option a. Deputy Governor in-Charge of the department of Reserve Bank which is administering the Scheme.

Option b. Executive Director in-Charge of the Department of the Reserve Bank administering the Scheme.

Option c. Chief General Manager in-Charge of the Department of the Reserve Bank administering the Scheme.

Option d. RBI board director nominated for this purpose.

The correct answer is Option b. Executive Director in-Charge of the Department of the Reserve Bank administering the Scheme.

14. What is the maximum amount in a dispute that can be brought before the Ombudsman for which the Ombudsman can pass an Award?

Option a. Rs. 20 lakhs.

Option b. Rs. 25 lakhs.

Option c. Rs. 30 lakhs.

Option d. No such limit.

The correct answer is Option d. No such limit.

15. Under Retail Direct Scheme, a retail investor can invest in Government securities by opening “Retail Direct Gilt Account” (RDG Account) with RBI. The investor can invest in both primary and secondary markets. The Government securities covered under the scheme include?

Option a. Government of India Treasury Bills.

Option b. Government of India dated securities.

Option c. Sovereign Gold Bonds (SGB).

Option d. State Development Loans (SDLs).

e. All the above.

The correct answer is e. All the above.

Part 4: TYPES OF CHARGES, SECURITIES & DOCUMENTATION with Multiple Choice Questions (MCQs) and answers

16. With respect to Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY), which of the following is the eligible age group to get a cover upto Rs. 2 lakhs specified under the scheme?

Option a. 18 to 50 years.

Option b. 18 to 55 years.

Option c. 18 to 60 years.

Option d. 18 to 65 years.

The correct answer is Option a. 18 to 50 years.

17. With respect to Pradhan Mantri Suraksha Bima Yojana (PMSBY), what is the maximum coverage available as per the scheme to the policy holders?

Option a. Rs. 2 lakh for accidental death and full disability and Rs. 0.5 lakh for partial disability.

Option b. Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for partial disability.

Option c. Rs. 5 lakh for accidental death and full disability and Rs. 2 lakh for partial disability.

Option d. Rs. 1 lakh for accidental death and full disability and Rs. 0.75 lakh for partial disability.

The correct answer is Option b. Rs. 2 lakh for accidental death and full disability and Rs. 1 lakh for partial disability.

18. APY scheme in India is being administered by?

Option a. LIC of India.

Option b. Pension Fund Regulatory and Development Authority (PFRDA).

Option c. IRDAI.

Option d. New India Insurance Company.

The correct answer is Option b. Pension Fund Regulatory and Development Authority (PFRDA).

19. Which of the following statement with respect to e-Rupi is not true?

Option a. e-RUPI is a one-time use digital solution to facilitate cashless payment which is person & purpose specific solutions for various services like COVID Vaccine, donations, corporate gift vouchers, etc.

Option b. e-RUPI can be issued only by banks authorized by RBI to issue PPIs and members of UPI.

Option c. Maximum limit of each e-RUPI shall not exceed INR 1 lakh or as defined by regulator.

Option d. Upto 10 e-RUPI vouchers can be issued for one programme on single mobile number / per unique beneficiary.

Option e. e-RUPI shall also be permitted for cash out or cash back on redemption.

The correct answer is e. e-RUPI shall also be permitted for cash out or cash back on redemption.

20. ONE DISTRICT ONE PRODUCT” scheme of Government of India is being implemented by?

Option a. Ministry of Agriculture and Rural Development.

Option b. Ministry of MSME.

Option c. Ministry of Food Processing Industries.

Option d. Ministry of Exports.

Option e. Department of Commerce.

The correct answer is Option e. Department of Commerce.

Mock test (SET 2) for Bank Promotion Exams

2022-12-25T10:16:00.004+05:30

Mock test (SET 2) for Bank Promotion Exams

1. Which of the following is a feature of the accrual concept

a) income & expenses are recorded as and when they become due and not as and when they are actually received or paid

b) business is presumed to exist for a long time

c) recording of both income and expenses incurred to earn the income & matching the same before showing any profit or loss

d) the accounts are prepared for a specific period generally 12 months

e) none of the above

2. The statement “Balance sheet is not a valuation statement” is based on the principle of:

(a) Going concern

(b) Historical cost

(d) Both (a) & (b)

(e) None of these

3. The statement “Caliber or quality of management team is not directly disclosed on the Balance Sheet” is based on the principle of:

(a) Going concern

(b) Historical cost

(d) Matching

(e)Money Measurement Concept

4. The statement “Goods sold to a worker at cost is adjusted to purchases account” is based on the principle of:

(a) Materiality

(b) Historical cost

(d) Revenue Recognition

(e) None

5. Which of the following transactions will not be recorded in accounting records?

a) compensation of US $3 million paid by XYZ Ltd. to a worker on account of alleged sexual harassment as it is not on account of business transaction

b) loss of reputation of a bank by being not able to meet commitments

c) provision on standard asset

d) provision on NPA at a higher rate than prescribed by RBI

e) all above

6. Which of the following is incorrect about expenses?

a) expenses are incurred for generating revenue

b) expense means the amount spent to carry on routine operations

c) expense is a revenue expenditure

d) expense is a capital expenditure

e) none of the above

7. Customer of your branch aged above 65 years placed a term deposit and requests TDS exemption as his total income including interest income falls below the taxable income, which form he need to submit to the branch?

a) Form G

b) Form H

c) a or b

d) No form is required

e) None

8. Borrowers availing crop loans up to 3 lakhs in the current year are eligible for interest subvention of ……. besides incentive of ………. for prompt repayment.

a) 1% & 3%

b) 2% & 1%

c) 3% & 1%

d) 2% & 3%

e) None

9. Validity period of a cheque is defined as 3 months under ………. Act

a) Indian Contract Act

b) B R Act

c) Negotiable Instruments Act

d) RBI Act

e) Not defined in any Act

10. Bank is required to submit XOS statement to RBI, in respect of

a) Foreign exchange transactions

b) Import transactions

c) Overdue export bills

d) Overdue import bills

e) FCNR accounts

Mock test (SET 1) for Bank Promotion Exams

11. Zero Coupon Bonds refers to

a) Bond issued at face value

b) Bond issued with face value & interest

c) Bond issued at discount from its face value with interest

d) Bond issued at discount from its face value without interest

e) None

12. CDR-1 system is applicable only to accounts which are under

a) Standard

b) Sub-standard

c) Doubtful

d) a & b

e) All

13. For transfer of funds through NEFT (National Electronic Fund Transfer) and minimum and maximum amount that can be transferred are

a) Rs.1,000 and maximum Rs.5 lacs

b) Rs.1,000 and maximum no limit

c) Rs.5,000 and maximum Rs.1 lac

d) No minimum & maximum amount

e) None of the above.

14. A term deposit of NRO can be accepted for a minimum period of

a) 1 year

b) 2 years

c) 6 months

d) 7 days

e) 3 years

15. In computerized branches of commercial banks, the balances of the customers are to be checked/verified with the following

A) Limits of the customer

B) Drawing power of the customer

C) Threshold limits of the customer

D) Balances lying in the customer’s other accounts

16. One of the recommendations of the IBA committee on Money laundering is

A) Appointment of MLRO (Money laundering Reporting Officers)

B) Appointment of outside agency to monitor the suspicious transactions of the bank

C) Appointment of law officer to monitor the suspicious accounts

D) None of the above

17. One of the objectives of KYC guidelines is

A) To get protection under SEBI Act

B) To get protection under Consumer protection act

C) To get protection under section 87 of NI act

D) To get protection under section 131 of NI act

18. Introduction of a customer for opening a current account can be obtained from the following

A) From satisfactorily conducted savings account holder

B) From well-known authorities

C) From staff member to whom customer is well known

D) From customer of current or cash credit account holders who know the business lines of an individual

E) Introduction not required

19. While opening an account of a company, the following is must

A) Introduction by a customer known to the banker

B) Certificate of incorporation/certificate of commencement of business

C) Introduction by ROC

D) None of the above

Previous Years Recalled Questions for Bank Promotion Exams (Set 4)

20.While opening an account of society/association/club, the following is must

A) Resolution for opening the account

B) Copy of the bye laws

C) Certificate of Registration

D) All the above

21.While opening an account of Hindu Undivided family, the following is must

A) HUF letter to be signed by karta

B) Introduction letter from the other co-parceners of the HUF

C) Registration letter from the government

D) None of the above

22. While opening an account in the name of trust, the following is must

A) Trust deed and registration of trust deed

B) Introduction from trustees of the trust

C) Introduction from the registrar of co-operative societies

D) None of the above

23. The cut off limit for monitoring transactions is

A) All transactions (irrespective of amount) of suspicious nature

B) All transactions of Rs. 10 lacs and above

C) Both A & B

D) None of the above

24. Any lapses in adhering to the guidelines of KYC is under the purview of --------- and liable for penalty

A) Consumer Protection Act

B) Banking Ombudsman

C) FERA Act

D) Competition Act

25. Layering under money laundering refer to

A) Disguising the origin of initial deposit through multiple transfers

B) Disguising the origin of initial deposit through Multiple Transactions

C) Both A & B

D) None of the above

26.Placement under money laundering means

A) Smuggling bulk cash

B) Mix illicit proceeds with legitimate deposits

C) Deposit amounts in small denominations

D) All the above

27.At what point is the PEP (Politically Exposed Persons) check done?

A) At the first point of customer interaction

B) At the account services level

C) At the central account services level

D) One-month after the account is opened

28. In case the name of any banned organization appears as payee/endorsee/applicant, the concern official should inform this to

A) The presenter of this instrument

B) The drawer of the cheque by the immediate supervisor/controller

C) Returning the cheque with the objection with „refer to drawer‟

D) The RBI

29. KYC guidelines have been issued by RBI under the provisions of

A) Section 35 of Banking Regulation Act

B) Section 35 –A of RBI act

C) Section 35-A of Banking Regulation act

D) Section 35-A prevention of Money Laundering Act

30. KYC guidelines of RBI protect banks from being used for A) money laundering purpose by criminals B) Financing terrorism C) for financing black marketing activities

A) A to C all correct

B) A and B correct

C) B and C correct

D) A and C correct

31. Banks are to keep a close watch on large size cash debit or credit transactions in deposit or loan accounts and keep a record of such transactions. For this purpose, the large size transaction means, where the amount is

A) Rs.10 lacs and above

B) Above Rs. 10 lacs

C) Less than Rs. 10 lacs

D) All the above

32. KYC guidelines take into account the recommendations of an international Financial Action Task Force A) On anti-money laundering standards B) on combating financing terrorism C) on manipulation of economic offences

A) A and B only

B) B and C only

C) A to C all

D) A and C only

33. KYC policy of our bank, as per RBI directives contains elements of A) Customer Acceptance Policy B) Customer identification Procedure C) Monitoring of transactions D) Risk management

A) A, B, and C only

B) A, C, and D only

C) B C and D only

D) A to D all

34. The word „Customer‟ is defined in which of the following act?

A) RBI act

B) BR act

C) KYC/AML guidelines

D) Negotiable Instruments act

35. The bank account of a non-resident of a country, where the amount of currency in the account cannot be transferred to another country is called as

(A) Nostro account

(B) Blocked Account

(D) Capital account

36. Funds that cannot be remitted from the subsidiary to the parent due to host government restrictions is known as

(A) Close – ended funds

(B) Open – ended funds

(D) Blocked funds

One liner Questions and Answers for Bank Promotion Exams (Set 4)

37. Maintaining a foreign currency account is helpful to

(A) Avoid transaction cost.

(B) Avoid exchange risk.

(D) Avoid exchange risk and domestic currency depreciation

38. India’s foreign exchange rate system is?

(A) Free float

(B) Managed float

(D) Fixed target of band

39. Hedging transaction is indicated by

(A) Transactions in odd amounts

(B) Presentation of documentary support.

(D) None of the above.

40. The acronym SWIFT stands for

(A) Safety Width In Financial Transactions.

(B) Society for Worldwide International Financial Telecommunication.

(D) Swift Worldwide Information for Financial Transaction.

Ques.No	1	2	3	4	5	6	7	8	9	10
Ans	a	d	e	D	b	d	b	d	d	c
Ques.No	11	12	13	14	15	16	17	18	19	20
Ans	d	d	d	D	c	a	d	e	b	d
Ques.No	21	22	23	24	25	26	27	28	29	30
Ans	a	a	c	B	c	d	a	b	c	b
Ques.No	31	32	33	34	35	36	37	38	39	40
Ans	b	a	d	C	b	d	c	b	d	c

Mock test (SET 1) for Bank Promotion Exams

2022-12-24T08:27:00.002+05:30

Mock test (SET 1) for Bank Promotion Exams

1. The Proprietor has separate existence from the business is as per __________ concept:

a) Business Entity

b) Objective Evidence

c) Conservatism

d) Consistency

e) None of these

2. Dual aspect concept means recording of _______ effects of a transaction.

a) Material

b) Objective

c) Double

d) financial

e) None of these

3.Which of the following could be termed as conservative concept or convention:

a) Accounting policies should be followed consistently year after year.

b) All significant accounting practices and policies followed in the preparation of accounts and financial statements should be disclosed

c) While preparing financial statements, all future losses are provided in the accounts but unrealized prospective profits are not recognized as income till their realization.

d) All material events, policies used in the preparation of financial statements must be disclosed.

e) None of the above

4.As per consistency concept:

a) a firm cannot change method of depreciation from straight line method to written down value method

b) a firm cannot change method of depreciation from written down value to straight line method

c) a firm cannot change inventory valuation from first in last out to first in first out or vice versa

d) a change in method of depreciation / inventory valuation is allowed but such a change should be stated clearly and its impact disclosed in the financial statement

e) none of the above

5. EEFC Account can be opened by

a) Non-Resident Indian (NRI)

b) NRI who returned to India permanently

c) Any Resident with local source of income

d) Residents who have forex earnings

e) None

6. Failure of internal systems, processes and people lead to

a) Credit Risk

b) Market Risk

c) Liquidity Risk

d) Operational Risk

e) Technology Risk

7. As per IBA Model Education Loan Scheme, the minimum & maximum age criteria for the borrower (student) is……

a) 10 & 35 years

b) 18 & 35 years

c) 18 & 45 years

d) All majors

e) None

8. As per extant guidelines, advance against book debts should not exceed ……. % of working capital limits.

a) 10%

b) 50%

c) 25%

d) 100%

e) no such ceiling

9. PCFC advance generally allowed for a maximum period of

a) 360 days

b) 270 days

c) 180 days

d) 90 days

e) no such limit

Previous Years Recalled Questions for Bank Promotion Exams (Set 5)

10. TDS deducted by bank, is to be remitted to Income Tax authorities within…..

a) 15 days from the date of deduction

b) 7 days from the date of deduction

c) 15 days in the succeeding month

d) 10 days in the succeeding month

e) 7 days in the succeeding month

11. All the systems in Office building are inter-connected is called as

a) Wide area network

b) Intra departmental network

c) Satellite link

d) Local area network

12. Companies look for Commercial Paper since they need

a) Long Term Low Cost funds

b) Short Term High Cost funds

c) Long Term High Cost funds

d) Short Term Low Cost funds

e) None

13. Money Laundering refers to

A) Transfer of assets/cash form one account to another

B) Conversion of illegal money into legal through banking channels

C) Conversion of cash into gold for hoarding

D) Conversion of assets into cash to avoid income tax

14. One of the important steps for opening NRI account is

A) Authentication /verification of signature of the NRI by a bank abroad/by the Indian Embassy/Relationship Managers posted abroad

B) Authentication /verification of signature of the NRI by the relative of NRI in India

C) Authentication /verification of signature of the NRI by the friend of NRI who are staying abroad

D)Authentication /verification of signature of the NRI by a local person known to the bank

15. While opening an account in the name of a company, the most important document to be seen is

A) List of employees/directors of the company

B) List of promoters/shareholders of the company

C) Memorandum and Articles of Association of the company

D) Instructions of the Registrar of Companies

16. In case of societies, the important document to be verified is

A) Copy of bye-Laws

B) Certificate given by ROC

C) Certificate given by the Local Authorities

D) No document is to be verified in case of societies, as societies are exempted by Registrar

17. While opening an account for a partnership firm, the vital documents to be produced by the firm is

A) Partners “MOU”

B) Partnership deed and Letter of Partnership

C) Registration certificate of partnership

D) Partners tax clearance documents

18. PAN (Permanent Account Number) is compulsory for Fixed Deposits, Remittances like DDs/TTs/TCs etc

A) If the amount exceeds Rs.10000/-

B) If the amount exceeds Rs.50000/-

C) If the amount of Rs.50000/- and Above

D) No such limit is fixed by the Income tax authorities

19. The authority to which branches of commercial banks should report suspected accounts is

A) Controlling office/Regional Office

B) Directly to FIU-IND

C) Directly to RBI

D) Directly to Finance Ministry/Policies

20. Branch should not open deposit/advances account of the following organizations

A) Banned/terrorist organizations circulated by the local authorities

B) Banned/terrorist organizations circulated by the Chamber of Commerce

C) Banned/terrorist organizations circulated by the Registrar of Companies

D) Banned/terrorist organizations circulated by the statutory authority

Economic Terms in Brief for Bank Promotion Exams, JAIIB, CAIIB

21. Minimum punishment prescribed for the offence of Money laundering Act is

A) 7 years

B) 9 years

C) 10 years

D) 12 years

22. Penalty to the banks for violating the Money Laundering Act is

A) Up to Rs. 15 lacs for violating every single norm

B) Up to Rs. 25 lacs for violating every single norm

C) Up to Rs. 50 lacs for violating every single norm

D) Up to Rs.100 lacs for violating every single norm

23. Maximum retention period of the bank records that can be produced to the directorate of Anti-Money laundering by the financial institutions in case of suspicious transactions is

A) 5 years

B) 7 years

C) 10 years

D) 15 years

24. Dormant/Inoperative account means

A) No debits/credits in account for a certain period

B) Dead account without any operation for long

C) No debit entries, but certain credit entries (Interest) for certain period

D) Fixed asset account of the bank

25. Following are the indicators of suspicious transactions in a customer account

A) Deposit of high value third party cheques endorsed in favor of the account holder frequently

B) Sudden increase in cash deposits without any valid reason

C) Receipt or payment of large sums of cash, which have no obvious purpose

D) All the above

26. Role of front-line employees in respect of KYC guidelines is

A) Identification of customers as per extant instructions

B) Service with smile while opening the customer accounts

C) Assist the customer in filling-up the account opening forms

D) Provide efficient, prompt and courteous forms

27. Unusual activities in respect of a customer’s accounts are

A) Opening of account at a place other than the place of work

B) Frequent deposits of large sums of money bearing labels of other banks into the account

C) Request for closure of newly opened accounts where high value transactions are already routed through

D) All the above

28. Which of the following document/s can be accepted by banks as a proof of Customer

Identification

A) Electricity Bill

B) Salary Slip

C) Income/Wealth tax assessment order

D) Election Identity card

29. Threshold limit is to be fixed for each account by the bank

A) After 6 months from the date of opening account

B) After 12 months from the date of opening account

C) After 36 months from the date of opening account

D) At the time of opening the account itself

30. For business enterprises the threshold limit is to be fixed based on the following formulae

A) One-month turnover subject to a maximum of Rs.10 lacs

B) Based on the working capital requirements of the firm

C) Based on the finance made by the bank

D) None of the above

31. Cash Monitoring Register is

A) To note down the receipts and payments of the branch

B) To note down the high value transactions of the customers

C) For internal and external audit purposes

D) For verification by the controllers of the branch

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

32. Monitoring suspicious transactions is the responsibility of

A) Officer-in-charge of the respective accounts

B) Branch Manager

C) Controlling Authority

D) Customer

33. Difference between buying and selling rates in an exchange rate or interest rate quotation is known as

(A)Strike price

(B) Spread

(D) Spot rate

34. The price which one subsidiary or one unit of business charges from another for selling goods or providing services is

(A) Transfer price

(B) Strike price

(D) Forward rate

35. The bond that does not pay any interest and issued at a price lower than its reimbursement value is called as

(A) Zero coupon bond

(B) Coupon bond

(D) Domestic bond

36. International Development Association established in

(A) 1970

(B) 1962

(D) 1958

37. International Finance Corporation established in

(A) 1956

(B) 1960

(D) 1970

Part 2 : TYPES OF CHARGES, SECURITIES & DOCUMENTATION With Multiple Choice Questions and answers (MCQs) for Bank Promotion Exams

38. …………..means using short-term forward contracts to offset “paper” gains and losses on the long-term assets and liabilities of foreign subsidiaries.

(A) Hedging transaction exposure

(B) Hedging balance-sheet exposure

(D) Hedging cost exposure

39. Which exchange rate theory focuses on the inflation – exchange rate relationship?

(A) Interest rate parity

(B) International Fisher Effect

(D) Traditional Model

40. The exchange rate prevailing at a financial reporting date

(A) Closing exchange rate

(B) Opening exchange rate

(D) Fluctuating exchange rate

Answers:

Ques. No	1	2	3	4	5	6	7	8	9	10
Ans	a	c	c	d	d	d	e	b	c	e
Ques. No	11	12	13	14	15	16	17	18	19	20
Ans	d	d	b	a	c	a	b	c	a	d
Ques. No	21	22	23	24	25	26	27	28	29	30
Ans	a	d	a	c	d	a	d	d	d	a
Ques. No	31	32	33	34	35	36	37	38	39	40
Ans	b	a	b	a	a	c	a	b	c	a

Previous Years Recalled Questions for Bank Promotion Exams (Set 7)

2022-12-23T15:21:00.002+05:30

Previous Years Recalled Questions for Bank Promotion Exams (Set 7)

1. Which type of mortgage is not required to be registered with Registrar of Assurance? Equitable

2. Which is not a negotiable instrument under N.l. Act? Transport Receipt

3. Simple Mortgage is registered with: Registrar of Assurance

4. In case of dishonor of a Bill of Exchange, Noting is made by: Notary

5. Providing banking facilities on affordable cost to poor person is called: Financial Inclusion

6. In case of commercial banks, how much loan is covered under CGTMSE scheme? Rs 200 lakhs

7. Working Capital Gap is calculated as: Current Assets minus current liabilities other than bank borrowings.

8. Which certificate is essential for opening account of a limited company? Certificate of Incorporation.

Previous Years Recalled Questions for Bank Promotion Exams (Set 4)

9. Which type of transactions are not done through RTGS? Travellers cheque

10. What is the purpose of Swabhiman program? Financial inclusion

11. Which is not bailment? Depositing cash in a bank account.

12. Which gas is produced by Gobar Gas plant? Methane (CH4)

13. When on issue of a duplicate draft on loss of original DD, both original & Duplicate draft are presented together for payment, which draft will be paid? Duplicate will be paid

14. What is Financial Inclusion? Providing banking services to financially excluded persons at affordable cost.

15. Number of members in a Joint Liability Group can be — (a) 4-10 (b) 4-20 (c) 10-20 (d) 5-20: 4-10 (Minimum 4, Maximum 10)

16. Straight line method of depreciation is used in the case of: Computer

17. For financing direct agricultural advance, No Dues certificate " is not required for loans upto: any amount.

18. Loans to farmers for agricultural activities are exempted from margin and collateral security for loans up to: Rs 160,000.

19. Who can stop the payment of a demand draft? Nobody can stop payment of a demand draft.

20. What is the relationship between a bank and a customer when a draft has been issued? Debtor and Creditor.

One liner Questions and answers for Bank Promotion Exams (Set 2)

21. CRR is under which act: RBI Act

22. A company has to sell its land and building having book value of Rs.200 lakh, for Rs.180 lakh. It also incurs net loss of Rs.10 lakh at the end of the year. What is net profit earned from its operations? Rs.10 lakh.

23. After death of account holder: POA signed cheque not to be passed

24. As per RBI guidelines, loans to priority sector target for Regional Rural Banks is: 75% of total outstanding loans.

25. In PMEGP, what is the subsidy for financing SC/ST in rural area? 35% of the project cost.

26. Fixed deposit along with interest of Rs 20,000 and above cannot be paid in cash as per provisions of: Section 269 T of Income Tax Act.

27. Bank account of which of the following is covered in the low risk category of customers: salaried employee

28. If Bank name written in two parallel line, what is the type of crossing? Special crossing.

29. If "not negotiable" is written between two parallel lines on the face of a cheque, what will be its impact? The cheque will continue to be transferable but title of transferee will not be better than title of transferor.

30. Blue Revolution-Aquaculture.

31. RTGS helps in preventing which type of risks? Systemic risk and settlement risk.

32. What is the rate of Provision on standard loan other than agriculture and MSE? 0.40% of outstanding.

33. In a loan account, outstanding is below sanctioned limit but no interest received upto 90 days and no credit entry credited. The account will be classified as (a) Standard (b) Substandard (c) Doubtful (d) Loss: The account is out of order only and has not become NPA and therefore classified as Standard asset.

34. How much overdraft in PMJDY account is treated as other priority sector? Rs 10000.

35. Which of the following does not have share in RRB — (a) Sponsor Bank (b) Central govt (c) State govt (d) Nabard: NABARD

36. Overdue/ matured time deposit is classified as: Demand liability.

37. Which of the following is liability (a) Deposits (b) Advance (c) Cash balance (d) investment in Government security: Deposits.

38. Charge on immovable properties. Mortgage

39. In the case of Kisan credit card, if term loan is provided for other purpose, what is the validity of credit card ? 5 years

40. Limitation period of a demand loan starts from: Date of loan.

41. If a safe deposit vault is purchased for branch use, it should be classified as: Funiture & Fixture.

42. Minimum amount outstanding for enforcement of Sarfaesi Act: More than Rs 1 lakh.

43. On which of the following accounts, norms relating to NPA are not applicable (a) Loan against jewelry (b) Loan against Govt security (c) Housing Loan (d) Loan against Life Insurance Policy: Ans is D.

44. In case of agricultural advance, loan given for a short duration crop will be treated as NPA if it is overdue for (a) One crop season (b) Two crop seasons (c) 90 days (d) 180 days: two crop seasons.

45. Collecting Banker protection available under which Section: Sec 131

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

46. In case of agricultural advance to farmer, collateral security is not to be taken for loans up to — Rs 1 Iac (b) Rs 50,000 (c) Rs 200,000 (d) Rs 75,000: Rs 160,000

47. While classifying a Balance Sheet, Inventory is shown as part of: Current Assets.

48. Which type of charge is created while granting advance against goods which are not in the possession of the bank — (a) Assignment (b) Lien (c) Hypothecation (d) Mortgage: Hypothecation

49. Olericulture is related to which of the following — (a) Vegetable cultivation (b) fish (c) Oilseed cultivation (d) forestry: Vegetable Cultivation

50. In case of fixed deposits, which of the following can be done by a nominee after death of depositor — (a) He can renew the deposit (b) He can take premature payment (c) He can add his name in FDR (d) He can raise loan against FDR: He can take premature payment.

51. There is an FDR in the name of Mr. A. Nomination has been done in favour of Mr. B. On renewal of FDR, which of the following will be correct regarding nomination — (a) Nomination will have to be done again (b) The same nomination will continue: The same nomination will continue.

52. Which of the following is not a negotiable instrument — (a) Promissory Note (b) Bill of Exchange (c) Cheque (d) DD (e) None of these: None of these

53. A draft must be crossed with Account payee only crossing if the amount of Demand Draft or Pay order is: Rs 20,000 or above.

54. Which of the following can not nominate (a) Individual (b) HUF (c) Sole Proprietorship firm: HUF

55. There is a joint account in the name of A and B with Either or Survivor instructions. B stops payment of a cheque which has been signed by A. What should the bank do? The bank will accept the stop payment instruction and not pay the same when presented.

56. Cash Reserve Ratio (CRR) is kept as percentage of which of the following (a) Cash with RBI (b) Approved securities (c) Net Demand and Time Liabilities (d) Gold: NDTL

57. What is a continuing Guarantee? which is issued for series of transactions.

58. In the Call Money, lending and borrowing is done for how many days (a) 1 day only (b) 1 day to 3 days (c) 1 day to 7 days (d) 2 days to 14 days: 1 day only

59. Saving Bank account cannot be opened in the name of which of the following (a) Khadi & Village Industries Boards (b) State Housing Board (c) Agriculture Produce Committees: State Housing Board

60. When loan is granted by more than one bank on a common security under common documentation, the nature of charge is called: Parri-passu charge

Previous Years Recalled Questions for Bank Promotion Exams (Set 6)

2022-12-22T15:30:00.002+05:30

Previous Years Recalled Questions for Bank Promotion Exams (Set 6)

1. What is the rate of margin for general category beneficiaries in PMEGP? 10%

2. Which of the following is material alteration? Changing order cheque to bearer cheque. 313. In case of hypothecation which of the following is with borrower — (a) possession of goods (b) ownership of goods: Both possession and ownership of goods is with borrower.

3. Bailment of goods as security for repayment of debt is called: Pledge.

4. What is the liability of introducer in a bank account? To confirm identity and address of account holder.

5. Which of the following cannot become partner as per Supreme Court Judgement? HUF

6. Statement of Tax Deducted at Source on interest on time deposits is required to be sent to income tax authority at quarterly intervals on form 26Q. Within how much period this statement should be sent for quarter ending Dec 31? Within 15 days from the close of quarter i.e. up to 15 Jan.

7. For signatures on Account opening form and photograph of customer on computer, which of the following techniques is used — camera, scanning, copying: scanning.

8. Equitable Mortgage is created by deposit of title deeds of property with the bank at notified place. For this purpose, places are notified by which of the following? State Government.

9. Which of the following cannot be classified as priority sector advance: Educational loan of Rs 15 lakh for education in India.

10. An individual woman of 58 years has fixed deposit with bank and interest payable in the financial year is more than Rs 10,000. But she wants that tax should not be deducted at source. If she gives PAN No then on which form she is required to give declaration in this regard? Form 15 G

11. Tax deducted at source on interest on term deposits should be deposited with Government within how much time other than in the case of TDS for March? within 7 days from the close of the month in which tax was deducted at source.

12. In case of Farmers club program, assistance provided for Formation & maintenance expenses, Awareness/ orientation meet, Meet with experts program are: Rs.2000,Rs.5000 & Rs.3000 respectively.

13. What are the cut off limit for investment in plant and machinery for classifying a unit in manufacturing as Small and Medium enterprise? Upto Rs.5 crore and Rs.10 crore.

14. For making advance to builders or contractors which method is used for assessing working capital limit? Cash Budget Method.

15. What is the maxium amount of guarantee claim under Credit guarantee Scheme for Micro and Small Enterprises, (other than women beneficiaries and units located in NE areas): Rs.150 lakhs

16. Which of the following not covered under weaker section? Artisian, cottage and village industry beneficiaries with limit up to Rs.2.OO lakhs. (covered if bank finance up to Rs 100,000)

17. What is interest payable by RBI on CRR balances maintained by banks? NIL

18. When a bank purchases NPA from other bank, for how many days it will be treated as standard in the books of purchasing bank: 90 days.

19. What is not true about no Frill accounts? Attractive rate of return.

20. The provision on Standard Asset is kept in the Balance Sheet as part of: Other liability and provision.

Previous Years Recalled Questions for Bank Promotion Exams (Set 3)

21. Within how much period loan applications of small enterprises for loans up to Rs 25000 and Rs 5 lakh should be disposed off? As per time prescribed by Board of Directors (earlier 2 week and 4 week).

22. In case of loan to DRI, the maximum loan for productive purpose can be and housing loan to SC/ST can be: Rs.15000 & Rs. 20000.

23. What is the cost ceiling on project cost for coverage under Prime Minister Employment Generation Program? Rs.25.OO lakhs for Manufacturing sector and Rs.10.OO lakhs for Business sector & Service

24. Which among the following is not a feature of LRS(Liberalized Remittance Scheme)? Bank can give credit for remittance under LRS for capital transactions.

25. In Consortium accounts, for taking action under SARFAESI, consent of how many creditors required? 60% of creditors by value (earlier 75%)

26. Under KYC guidelines what is the period for updating data in case of Low risk and Medium and high risk category account holders? 2 years for high risk category, 8 years for medium risk category and 10 years

27. Under Basel Ill, if there are three or more ratings accorded by chosen credit rating agencies with different risk weights, the ratings corresponding to which risk weights should be used? the second lowest risk weight.

28. While sanctioning Term loan, which aspects you give maximum importance? Sufficient cash flow for repayment of loan.

29. What is the cut off limit of Education loan for coverage under Priority sector? Rs.10.00 Iacs in India; Rs.10 lakhs abroad.

30. What is the maximum amount that can be remitted under Indo Nepal remittance scheme and for how many times? Rs 50000 at one time and max 12 times in a year.

31. For filing particulars of charge under companies act who is primary responsible? Company and its officials.

32. Export bill purchased under letter of credit, where it should be shown in the balance sheet of company/borrower? Contingent liability.

33. As per the provisions of Section 108 of the Indian Evidence Act, presumption of death can be raised only after a lapse of years from the date of his/her being reported missing: 7 years.

34. If FCNR deposit is for more than 1 year what is the frequency of compounding of interest? 180 days.

35. What will happen if current liabilities are more than current assets? Net working capital will be negative and firm may not be able to pay its creditors.

One liner Questions and Answers for Bank Promotion Exams (Set 3)

36. What is the criteria for classification of accounts as NPA in case of loan under consortium? On the basis of record of recovery by individual banks.

37. What is the risk weight for investment in subordinated bonds of other bank: 100% exposure.

38. What is the amount of stamp duty on a demand promissory note of Rs 100,000: 15 paise.

39. Certificate of Deposit can be issued for minimum………..days and maximum period of . 7 days and 1 year.

40. Full form of FCCB: Foreign Currency Convertible Bond

41. Minimum Maturity period of CP: 7 days

42. Maximum Maturity period of CD: 1 Year.

43. Sec 49 (O) of Representation of People's Act deals with: A voter can exercise the option of not voting for any of the contestant in Parliamentary or Assembly elections.

44. Raja Chelliah is an economist and related with: Tax Reforms.

45. Total number of digits in PAN No.: 10

MCQs on TYPES OF CUSTOMERS AND THEIR ACCOUNTS FOR BANK PROMOTION EXAM

46. In fund flow statement, increase in liability is called: Sources of funds

47. The market interest rate and price of a bond are: inversely related

48. What is Credit Linked Note: It is a Derivative

49. If current ratio remains same and quick ratio improves, what does it indicate? It indicates sale of stock. The headline Inflation as we read in newspapers is based on: Wholesale Price Index (WPI)

50. What is real rate of interest? Nominal interest rate minus current inflation rate.

51. Minimum period for which an asset has to be retained by the purchasing bank before making further sale: 12 months from date of purchase. (Upto 31.3.14, the period was 15 months)

52. The validity of a cheque is 3 months and a Cheque becomes stale after 3 months from date of issue as per: RBI w.e.f. 1.4.2012

53. Who can not be appointed nominee in deposit accounts? Trust

Previous Years Recalled Questions for Bank Promotion Exams (Set 5)

2022-12-21T16:26:00.008+05:30

Previous Years Recalled Questions for Bank Promotion Exams (Set 5)

1. A DD was lost and duplicate was issued after necessary formalities. Today, both original and duplicate are presented to bank for payment. What should the bank do? Make payment of duplicate and return original with the reason “Duplicate issued and paid”.

2. In case of doubtful accounts, what is the rate of provision on secured and unsecured portion if the account is doubtful for more than 3 years: 100% of the secured portion as well as 100% of the unsecured portion.

3. A cash credit or overdraft account becomes out of order when: DP is allowed on stock statement which is 3 months old or outstanding is more than limit sanctioned or drawing power or no credits in the account or credits are insufficient to recover the interest.

4. ABC Ltd has Profit before tax 75, income tax 30; interest on term loan 15; depreciation 10; interest on working capital loan 8; term loan instalment 25; what will be the DSCR? 70/40 i.e. 1.75 (75-30+15+10) / (15 + 25)

5. What is the maximum amount of loan that can be granted under Tarun category in the case of PMMY? Rs 10 Lakh

6. If any advance, including bills purchased and discounted, becomes NPA, what should be the treatment of interest earlier credited to income account: The entire interest accrued and credited to income account in the past periods, should be reversed if the same is not realized. This will apply to Government guaranteed accounts also.

7. What is the maximum amount of claim that can be referred to Lok Adalat: Rs 20 Lakh.

8. Under Senior citizen saving scheme, ex-service man is treated as senior citizen at what age? 50 years.

One liner Questions and Answers for Bank Promotion Exams (Set 4)

9. RBI lends against govt securities on which rate: Repo Rate

10. What is the maximum amount of loan that can be given for creating Social Infrastructure as part of Priority Sector: Rs 5 crore.

11. What is the rate of interest for loan up to Rs 3 Lakh in case of DAY – NRLM: 7%

12. A loan to women will be classified as weaker section under PRIORITY SECTOR, if the loan is up to: Rs 100,000

13. Loan granted to distressed persons for repayment of loan to money lenders is called: Debt swap

14. BCs uses which type of machine for their transactions: Biometric machine

15. Rupay card accidental and death claim amount: Rs 1 lakh

16. Within how much time KYC should be done again on accounts of low risk customers: once in 10 years.

17. Safe custody of Articles is governed by which Act: Indian Contract Act.

18. What is the relationship between bank and customer in case of Standing Instruction – Agent &Principal.

19. Fraud by sending an e-mail claiming to be from a Bank regarding updating sensitive account information like PIN, password, account number, it is called: phishing

20. What is the liability of a partner in Partnership firm: Joint and Several. Every partner is liable both as partner as well as in his individual capacity. Therefore, unlimited liability.

21. Though it is not mandatory, still partnership firms register the firm with Registrar of Firms. What is the reason for the same: Because unregistered firm cannot file suit against debtors for recovery of the dues

22. Provisions relating to CRR are as per which Act: Sec42(1) of RBI Act

23. When a farmer undertakes agriculture as well as does Dairy business on the farm, it will be what type of farming: Mixed Farming

24. As per section 107 & 108 of Indian Evidence Act, a person can be presumed to have died if he/she is missing for: 7 years.

25. If a nomination has been made in case of deposit accounts, what will be the status of nominee: Trustee of Legal Heirs.

26. What is the rate of provision in case of NPA if the account is in D3 category: 100% of outstanding (Account doubtful for more than 3 years)

27. NPA rules are not applicable to loan against: NSC/KVP/Bank’s own deposit/LIP. (If loan guaranteed by Central Govt then Asset classification and provisioning norms are not applicable till Govt refuses to make payment.

28. How provision on Standard assets is reported in the Balance Sheet of a bank? As part of Other Liabilities and provisions on the Liability side of Balance Sheet.

29. For taking over possession of securities charged to the bank under SARFAESI Act, bank is required to give. Notice to borrower and guarantor: 60 days

30. Why lending bank insists partnership firms for registration: Unregistered firms cannot file suit to recover their due amount.

31. In case of trust account if a trustee who had signed the cheque died and bank came to notice about his death, what will the bank do if cheque is presented for payment? Bank will pay the cheque if otherwise in order.

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

32. If an individual die without writing Will, he is called: Died Intestate.

33. In case of accounts of Low risk customers, Periodic updation of KYC documents shall be carried out by bank at what interval? At least once in every ten years.

34. For availing loan under NRLM, SHG should be in active existence at least since the last: 6 months as per the books of account of SHGs and not from the date of opening of S/B account

35. Under Liberalized Remittance Scheme, how much amount can be remitted abroad by a resident individual? USD 250000 in a financial year.

36. RBI uses Repo and Reverse Repo for what purpose? For regulating liquidity in the System.

37. If counterfeit notes up to are detected in a single cash deposit in the bank branch, bank is not required to lodge FIR with police. Instead, bank should send a consolidated report and send such notice to police at the end of the month? 4 (If 5 or more than 5 in single deposit, then FIR is lodged)

38. What is the minimum and maximum age under Atal Pension Yojna for joining the Scheme? Minimum age 18 years and maximum age – 40 years.

39. In Atal Pension Yojna, pension will start at the age of: 60 years.

40. In case of Loans under MUDRA, what is the maximum amount of Loan under Tarun: More than Rs 5 Lakh up to Rs 10 Lakh.

41. Net Working Capital 24 and Current Liability 12. What is Current Ratio: 3:1 (Current assets 36; current liability 12)

TYPES OF CHARGES, SECURITIES & DOCUMENTATION MCQs for Bank promotion Exams Part 3

42. Profit before tax Rs 150; Tax Rs 40; Depreciation Rs 30; Interest on Term Loan Rs 30; Annual instalment of term loan Rs 70; calculate Debt Service Coverage ratio: 1.7 (Net Profit after Tax + Depreciation + Interest on Term Loan)/ (Instalment of Term Loan + Interest on Term Loan)33- due to failure internal system type of risk

43. The risk due to inadequacy or failure of systems, process or people or due to external events is called: Operational Risk

44. Equitable mortgage is created by which of the following methods – (a) By deposit of title deeds with creditor; (b) By signing a Bond; (c) By executing a mortgage deed; (d) By deposit of a mortgage deed: By deposit of title deeds with creditor to create security for a debt

45. What is the amount of penalty if there is a delay up to 10 days for registration of equitable mortgage with CERSAI? Rs 100 for loan up to Rs 5 lakh and Rs 200 for loan more than Rs 5 lakh

46. What is the period of Limitation in case of suit against Guarantor: 3 years from date of demand from the Guarantor.

Previous Years Recalled Questions for Bank Promotion Exams (Set 4)

2022-12-20T08:27:00.002+05:30

Previous Years Recalled Questions for Bank Promotion Exams (Set 4)

1. A loan has been given to a limited company against hypothecation of stocks. Company is required to get the charge registered with: Registrar of Companies.

2. A cheque has been presented for payment on which there are names of two banks. What should the bank do? The bank will be returned in ordinary course of business unless one of the banks is agent for collection for another bank.

3. Which of the following types of lien is implied pledge – General Lien, particular lien, Banker’s Lien, Negative Lien: Banker’s Lien

4. Which of the following ratios indicate ability of a firm to pay term loan instalments in time – Current Ratio, DSCR, Debt Equity Ratio: DSCR

5. Interest on Saving Bank deposits is paid at what interval – Daily, Monthly, Quarterly, Half yearly: Quarterly or earlier.

6. Assets are classified into 4 categories. Three of these categories are – Standard, Sub Standard, Doubtful category. Which is the 4th category: Loss asset

7. Which of the following is part of Balance Sheet of a bank – Interest, Provisions, Operating Expenses, Deposits: Deposits.

8. When a bank will not be called Holder for Value in collection of cheque: When cheque is credited to the account after receipt of proceeds from collection of cheque.

9. What is the status of Nominee in case of deposits: He is trustee of legal heirs.

10. When bank remits funds to RBI for deposit in DEAF Account: When account is not operated for 10 years.

11. In case of Medium Risk customer, KYC documents should be taken again within every: 8 years.

12. Khadi and Village industry will be considered as Micro Enterprise if investment in plant and machinery is upto: No limit. All such units are classified as Micro enterprise.

13. When along with growing crops farmer undertakes rearing of Livestock, it is called: Mixed Farming.

14. A and B have joint fixed deposit account with you which is payable to Either or Survivor. X has been appointed as nominee. A has died. Payment on due will be made to whom: B who is survivor.

15. What is the impact of inflation: Purchasing power of money goes down.

16. What is Gresham’s Law: Bad Money if not controlled in quantity drives good money out of circulation.

17. Securities are classified into three categories including Available for Sale, Held till Maturity. Which is the third category: Held for Trading

18. As per RBI guidelines, the investments classified under HFT would be those from which the bank expects to make a gain by the movement in interest rates/market rates. These securities are to be sold within: 90 days

19. In a loan granted to A, B was taken as guarantor. A defaulted but B paid the loan to the bank. As a result, B is entitled to all rights and remedies which were available with bank as creditor. This right of guarantor is called: Right of Subrogation.

20. A customer had given stop payment instruction to bank. But cheque was paid because of Bank’s mistake. Customer account should be credited within how much time: Immediately

21. Banks cannot grant loans against security of its own shares. This is as per: Section 20 of the Banking Regulations Act.

22. A bank is required to have four components of KYC Policy of the bank. Three of these components are – Customer Identification policy; Monitoring of Transactions; Risk Management. Which is the fourth component: Customer Acceptance Policy.

23. Scale of Finance i.e. crop loan per hectare is decided by: District Technical Committee

24. A Fraud is discovered in the branch which took place 5 years back. Which type of risk is created: Operational Risk.

25. What is maximum amount of claim that can be filed with Lok Adalat: Rs 20 Lakh

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

26. What is the impact of Reverse Repo: Liquidity is sucked.

27. Letter of Credit and Bank Guarantees are: Conditional undertakings.

28. In case of hypothecation, what type of possession with bank: Constructive Possession.

29. What is the meaning of Conversion: Dealing with other’s property without his consent.

30. In case of opening account of Self-Help Group, KYC documents should be taken in respect of: Office bearers only.

31. NPA norms are not applicable to advance against which of the following – Gold Jewelry; Shares; NSC: NSC

32. What is difference between Term Loan and Deferred Payment Guarantee: Outlay of Funds

33. Which of the following is incorrect regarding amount of loan under DRI Scheme – (a) Maximum loan for productive activity can be Rs 15,000; (b) Maximum loan to SC/ST for construction of house can be Rs 20,000;(c) Maximum loan to physically handicapped for purchase of artificial limbs can be Rs 5000: All are correct. So, the answer is None of these

34. Number of members in the Self-Help Group under NRLM: Normally 10 to 20 but in difficult area and group of disabled persons, number of members can be 5 to 20

35. If directors of a company take some action beyond objects of the company, how far the company will be liable for such actions? Company is not liable as such actions are ultra vires the company.

36. When amount in words and figures differ on a cheque, then as per section 18 of N I Act, which amount should be paid: Amount written in words.

37. What is the relationship between Bank and Judgement Debtor when Garnishee order is issued: Debtor and Creditor

38. Which of the following is not included in Current Asset – Stock, Debtors, accrued expense, prepaid expense: Accrued expense as it is current liability.

39. What is the rate of subsidy in PMEGP if loan is made to a SC/ST woman in rural area: 35% of the project cost.

40. What will be the impact of reduction in SLR or CRR? Liquidity will increase which will in more funds available to banks for lending.

41. A DD was lost and duplicate was issued after necessary formalities. Today, both original and duplicate are presented to bank for payment. What should the bank do? Make payment of duplicate and return original with the reason “Duplicate issued and paid”.

42. In case of doubtful accounts, what is the rate of provision on secured and unsecured portion if the account is doubtful for more than 3 years: 100% of the secured portion as well as 100% of the unsecured portion.

Economic Terms in Brief for Bank Promotion Exams, JAIIB, CAIIB

43. A cash credit or overdraft account becomes out of order when: DP is allowed on stock statement which is 3 months old or outstanding is more than limit sanctioned or drawing power (DP) or there are no credits in the account or credits are insufficient to recover the interest.

44. ABC Ltd has Profit before tax 75, income tax 30; interest on term loan 15; depreciation 10; interest on working capital loan 8; term loan instalment 25; what will be the DSCR? 70/40 i.e. 1.75 (75-30+15+10) / (15 + 25)

45. What is the maximum amount of loan that can be granted under Tarun category in the case of PMMY? Rs 10 Lakh

46. If any advance, including bills purchased and discounted, becomes NPA, what should be the treatment of interest earlier credited to income account: The entire interest accrued and credited to income account in the past periods, should be reversed if the same is not realized. This will apply to Government guaranteed accounts too.

Previous Years Recalled Questions for Bank Promotion Exams (Set 3)

2022-12-19T13:37:00.006+05:30

Previous Years Recalled Questions for Bank Promotion Exams (Set 3)

1. What is the full form of PMFBY: Prime Minister Fasal Bima Yojna

2. If interest on Fixed Deposit in the name of a Senior Citizen is more than Rs 10,000 in a financial year, what will be rate of TDS if PAN No is not submitted: 20%.

3. DICGC provides insurance of customers’ deposits with bank. In which ratio, the premium for this insurance is borne by bank and customer: Bank will bear 100% of the insurance premium payable to DICGC.

4. What is the limitation period of Demand Promissory Note: 3 years from date of DPN

5. A cheque dated 31sept 2018, is presented for payment to bank on 30 Sept 2018. What should the bank do? Bank can pay the cheque if otherwise in order.

6. When an account becomes NPA, what type of risk arises: Credit Risk.

7. In MICR cheques, what is the transaction code for Demand Draft: 16

8. Which of the following is not material alteration – Changing Order to Bearer Cheque, completing an incomplete cheque, Cancellation of crossing: Completing an incomplete cheque

9. From the following data, please calculate current liability and current ratio – Current asset:32; Net working capital is 8: Current Liability will be 24 and Current Ratio will be 32/24 i.e. 4:3

10. Profit before Tax – 120; Tax paid – 20; Annual Instalment of term loan – 70; Interest on term loan – 30; Depreciation – 20; What will be the Debt service coverage ratio: 1.5: 1

11. What is the full form of HTM for classification of Govt securities: Held till Maturity.

12. What is the full form of NPCI: National Payment Corporation of India.

13. What is the full form of CRAR: Credit to Risk Weighted Assets Ratio

14. In case of RRB, what is the target for financing agriculture as part of Priority sector: 18% of total advances.

15. Banking is defined under which act: Banking Regulation Act

16. What is balance sheet: Statement of Assets and Liabilities as on a date.

17. Which of the following is an Intangible asset – Stock, Machinery, Capital, Goodwill: Goodwill

One liner Questions and Answers for Bank Promotion Exams (Set 4)

18. A and B have joint account with condition Either or Survivor and X has been appointed as nominee. If A dies, to whom the balance will be given – B or X or B plus legal heirs of A: Will be given to B

19. What is the nature of charge created on Shares: Lien or Pledge

20. What is the limitation period for execution of a court decree: 12 years.

21. What is the maximum amount of loan that can be sanctioned under Stand-up India Scheme: Rs 100 Lakh

22. On which of the following securities, charge cannot be created by hypothecation? Shares

23. Grace period is available in respect of which of the following: Usance Promissory Note and Usance Bill of Exchange.

24. If time is not mentioned on a Bill of Exchange, when it will be payable: It will be payable on demand.

25. When Net working capital will be negative: When Current Liabilities are more than Current Assets.

26. What is the full form of NAV in the context of Mutual fund: Net Asset Value.

27. What is the amount of insurance under Prime Minister Jeevan Jyoti Bima Yojna: Rs 200,000

28. A cheque signed by Secretary and Treasurer of a Club has been presented to the bank for payment. The bank has already received a message that both of them died yesterday in a road accident. Whether bank should pay the cheque: Yes cheque should be paid if otherwise in order.

29. Which of the following is not Officially valid document for proof of ID: Ration card.

30. What is the maximum amount of overdraft that can be granted to account holder of Jan Dhan Yojna: Rs 10,000.

31. The intermediaries appointed by bank to provide door to door services as part of Financial Inclusion are called: Business Correspondents.

32. As per Asset Classification norms, Loans are classified into how many categories: Four. Standard, Sub Standard, Doubtful and Loss.

33. What is full form of GDP: Gross Domestic Product.

34. Which of the following is Nodal Agency for PMEGP: Khadi & Village Industries Commission (KVIC)

35. In case of MICR Cheques, first 9 digits represent Location Code. Of these 9 digits, first three digits represent which of the following – station code; branch code; bank code: Station Code.

36. Statutory Liquidity Ratio (SLR) is defined in: Section 24 of Banking Regulation Act.

37. Limitation period for mortgage: 12 years

38. An account becomes inoperative if it is not operated for how much period: Two years

39. A cheque issued by a person is dishonoured due to insufficient balance in the account. The holder sent notice to drawer asking him to make payment within 15 days of receiving the notice. After expiry of 15 days, within how much period holder or payee can file a suit in the court of Metro Magistrate or 1st class magistrate: 1 month from the date of cause of action i.e. 15th day.

40. A loan has been given to a limited company against hypothecation of stocks. Company is required to get the charge registered with: Registrar of Companies.

41. A member of a Self-Help Group wants to become a member of Joint Liability Group. What is the position? It is allowed. (As per RBI guidelines issued in Nov 14 - the members of JLG will continue to remain members of the SHGs and continue to participate in the activities of SHGs as earlier. Banks may encourage creation of such enterprise / livelihood based JLGs within SHGs. Banks may finance these JLGs in addition to the loan / credit limit extended to the SHGs.)

Part 4: TYPES OF CHARGES, SECURITIES & DOCUMENTATION with Multiple Choice Questions (MCQs) and answers

42. Debt Equity Ratio is 2:1; Long Term Liability 20; Loss – 2; What is Tangible Net Worth: 8 (As Debt equity ratio is 2:1 and Long-term liability is 20, net worth will be 10. Tangible net worth = Net worth minus intangible assets i.e. loss of 2)

43. When a bank issues a Bank Guarantee, what type of liability is created: Contingent Liability.

44. After taking over possession of securities, the bank wants to sell the same. Before executing sale, how many days’ notice is required to be given to the borrower and the Guarantor: 30 days’ notice.

45. As per RBI guidelines, an asset would be classified as doubtful if it has remained in the substandard category for a period of: 12 months

46. What is the relationship between bank and customer in case of overdraft? Creditor and Debtor

47. Which of the following types of lien is implied pledge – General Lien, particular lien, Banker’s Lien, Negative Lien: Banker’s Lien

48. RRB are required to lend………. of their total advances to Priority sector: 75%

49. When in a cash deposit made by a customer in the bank, counterfeit note is detected, what should the bank do? The bank will impound the note, no credit will be given to customer and cashier will issue acknowledgement to the depositor.

50. When a crossing is called Special Crossing? When name of a bank is written on the face of the cheque within or without two parallel lines.

Economic Terms in Brief for Bank Promotion Exams, JAIIB, CAIIB

2022-12-18T09:49:00.006+05:30

Economic Terms in Brief for Bank Promotion Exams, JAIIB, CAIIB

1. Gross Domestic Product (GDP): It is the money value of all final goods and services produced in the domestic territory of the country in a year.

2. Net Domestic Product: obtained by reducing consumption of fixed capital (depreciation) from the GDP.

3. Gross National Product (GNP): It is calculated by adding net factor income from abroad (NFIA) to GDP.

4. Law of Demand: It states that other things being equal, more of a commodity is demanded at a lower price and less of it at a higher price.

5. Elasticity of Demand: It is the responsiveness of demand to a change in any factor of demand.

6. Factors affecting elasticity of Demand: (a) Nature of Commodity (b)Availability of substitute goods (c) Share in the total expenditure (d) Diverse uses of the commodity (e) Consumer’s behavior etc.

7. Supply curve: A graph of the relationship between the price of a good and the amount supplied at different prices

8. Consumer surplus: The difference between what a consumer would be willing to pay for a good or service and what that consumer actually has to pay.

9. Sunk costs: When what is done cannot be undone. Sunk costs are costs that have been incurred and cannot be reversed.

10. Marginal Cost: It is the addition to the total cost as a result of a unit increase in production.

11. Propensity to Consume: The relationship between change in income and the resultant change in consumption.

12. Fiscal Measures: Measures to correct excess /deficient demand through budget proposals of government are called fiscal measures. These include tax changes, increases/reductions in government expenditure, etc.

Part 4: TYPES OF CHARGES, SECURITIES & DOCUMENTATION with Multiple Choice Questions (MCQs) and answers

13. Fiscal Policy: Fiscal policy is that part of government economic policy which deals with taxation, expenditure, borrowing, and the management of public debt in the economy.

14. Fiscal deficit is the gap between the government's total spending and the sum of its revenue receipts and non-debt capital receipts. It represents the total amount of borrowed funds required by the government to completely meet its expenditure

15. Budget Deficit: Budget may take a shape of a deficit when the public revenue falls short of public expenditure. A budget deficit is a difference between the estimated public expenditure and public revenue. The government meets this deficit by way of printing net currency or by borrowing.

16. Primary Deficit: Fiscal Deficit minus Interest on Borrowings.

17. Inflation: A situation of a steady and sustained rise in general prices is usually known as inflation. Inflation is a state in which the value of money is falling i.e. prices are rising.

18. Cost-push Inflation: It arises due to an increase in production cost. Such type of inflation is caused by three factors: (i) an increase in wages, (ii) an increase in the profit margin, and (iii) the imposition of heavy taxation.

19. Deflation: Deflation is the reverse case of inflation. Deflation is a state of falling prices that occurs at a time when the output of goods and services increases more rapidly than the volume of money in the economy. In deflation, the general price level falls and the value of money rises.

20. Recession: A period of slow or negative economic growth, usually accompanied by rising unemployment.

21. Stagnation: A prolonged recession, but not as severe as depression.

22. Disinflation: A fall in the rate of inflation. This means a slower increase in prices but not a fall in prices.

23. Depression: A prolonged recession in economic activity. The textbook definition of a recession is two consecutive quarters of declining output. Depression is an even deeper and more prolonged slump.

24. Duopoly: A market structure in which two producers of a commodity compete with each other.

25. Monopoly A market situation in which a product that does not have close substitutes is being produced and sold by a single seller.

26. Perfect competition A market situation characterized by the existence of very many buyers and sellers of homogeneous goods or services with perfect knowledge and free entry so that no single buyer or seller can influence the price of the good or service.

27. Buyer's market: A market in which supply seems plentiful and prices seem low; the opposite of a seller's market.

28. Tax haven: A country or designated zone that has low or no taxes,

29. Tax avoidance: A legal action designed to reduce or eliminate the taxes that one owes.

30. Tax evasion: An illegal strategy to decrease tax burden by underreporting income, overstating deductions, or using illegal tax shelters.

31. Ad valorem Tax: Ad valorem tax is a kind of indirect tax in which goods are taxed by their values. In the case of ad Valorem tax, the tax amount is calculated as the proportion of the price of the goods. Value-added Tax (VAT) is an ad Valorem Tax.

32. Regressive Tax: It is a tax in which rates of taxation fall with an increase in income. In regressive taxation, the incidence falls more on people having lower incomes than that on those having higher incomes.

33. Progressive taxation: Taxation that takes a larger proportion of a taxpayer’s income the higher the income is.

34. Monetary policy: The regulation of the money supply and interest rates by a central bank in order to control inflation and stabilize the currency.

35. HDI: HDI (Human Development Index) is a composite index measuring average achievement in three basic dimensions of human life-a long and healthy life, knowledge, and a decent standard of living.

36. Engel’s Law: This law was formulated by Ernst Engel. This law states that, with a given taste and preference, the portion of income spend on food diminishes as income increases. According to this law, the smaller a person’s income, the greater the proportion of it that he will spend on food, and vice versa.

37. Giffin Goods: Giffin goods have a positive relationship between price and quantity demanded and as a result demand curve of Giffin goods slopes upward from left to right.

38. Gresham’s Law: Bad money (if not limited in quantity) drives good money out of circulation

39. Laffer Curve: It represents the relationship between total tax revenue and corresponding tax rates.

40. Lorenz Curve: The Lorenz curve is a graphical representation of the cumulative distribution function of a probability distribution. This curve shows the degree of inequalities of a frequency distribution in a graphical manner.

One-liner Questions and Answers for Bank Promotion Exams (Set 3)

41. Pareto efficiency: A situation in which nobody can be made better off without making somebody else worse off.

42. Pigou effect: A fall in the price level increases the real value of people’s savings making them feel wealthier and thus causing them to spend more. This increase in demand can lead to higher employment

43. Okun’s Law: A relationship between an economy's GDP gap and the actual unemployment rate. The relationship is represented by a ratio of 1 to 2.5. Okun found that an annual 2.5% increase in the rate of real growth above the trend growth results in a 1% decrease in the rate of unemployment.

44. Philips Curve: Inflation and unemployment have a stable and inverse relationship. The theory states that with economic growth comes inflation, which in turn should lead to more jobs and less unemployment.

45. Say’s Law: Supply creates its own demand.

46. Real exchange rate: An exchange rate that has been adjusted to take account of any difference in the rate of inflation in the two countries whose currency is being exchanged.

47. Real interest rate: The interest rate less the rate of inflation.

48. Tiger economies: The fast-growing developing economies of Asia.

49. Tobin tax: A proposal to reduce speculative cross-border flows of capital by levying a small tax on foreign exchange transactions.

50. Predatory pricing: Charging low prices now so you can charge much higher prices later.

51. PPP: Purchase Power Parity is the exchange rate that equates the price of a basket of identical traded goods and services in two countries.

52. Bubble: When the price of an asset rises far higher than can be explained by fundamentals.

53. Bull: An investor who expects the price of a particular security to rise; the opposite of a bear.

54. Contagion: The domino effect, such as when economic problems in one country spread to another

55. Crowding out: When the state does something it may discourage, or crowd out, private-sector attempts to do the same thing. At times, excessive Government borrowing has been blamed for low private-sector borrowing.

56. Dumping: Selling something for less than the cost of producing it.

57. Fiscal drag: is the tendency of revenue from taxation to rise as a share of GDP in a growing economy.

58. Fiscal neutrality: When the net effect of taxation and public spending is neutral, neither stimulating nor dampening demand.

59. Hard currency: A hard currency is expected to retain its value, or even benefit from appreciation, against softer currencies.

60. Hot money: money that is held in one currency but is liable to switch to another currency at a moment’s notice in search of the highest available returns, thereby causing the first currency’s exchange rate to plummet.

One liner Questions and Answers for Bank Promotion Exams (Set 4)

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One liner Questions and Answers for Bank Promotion Exams (Set 4)

1. Stand by Letter of credit is just like: Bank Guarantee

2. State Level Bankers’ Committee is chaired by? CMD or ED of SLBC Convener Bank

3. State Level Bankers’ Committee meetings are held on basis? quarterly

4. Suspicious Transaction report is sent to FIU within: 7 days from confirmation of suspicion.

5. The charge levied by banks for underutilization or non-utilization of sanctioned CC/OD limits is called: Commitment charge.

6. The charge on stocks is created by: Hypothecation (also by pledge or lien)

7. The collateral security requirement is waived on KCC for an amount up to? Rs.1.60 lac

8. The CRILC-Main Report shall be submitted on a monthly basis if aggregate exposure is Rs…….. Cr or above. Ans - 5

9. The Distt. Level Review Committee (DLRC) meeting should be held under Lead Bank Scheme? Quarterly

10. The following routes are available for borrowers under External Commercial Borrowing? Approval route and automatic route

11. The interest rate at which RBI rediscounts bills of commercial banks is called: Bank Rate

12. The Lead Distt. Manager under Lead Bank Scheme is required to convene public meeting at various locations in the district. Ans -half yearly

13. The limit sanctioned is Rs 3 lac and margin is 25%. The borrower wants to avail the limit fully. How much stock is required to be brought by him? Rs 4 lac

14. The long-term loan limit under KCC should be sanctioned considering the investment such as land development, minor irrigation, farm equipment etc. for a period up to. Ans - 5 years

15. The margin requirement is not applicable on KCC for an amount up to? Rs.1.60 lac

16. The percentage of Capital Conservation Buffer (CCB) to be maintained Ans - 2.5%

17. The term Bulk Deposit means single Rupee term deposits of …… Ans - Rs.2 cr and above

18. Time limit to sue in case of cheque return due to insufficient funds: One month from the date of cause of action i.e. 1 month from 15th day on which notice of dishonour received by drawer.

19. Timeline for auto-reversal for failed transactions using authorized Payment Systems (ATM, POS, AEPS) is T+…….days.:- 5

20. UCP 600 is maintained and revised by: International Chamber of Commerce (ICC).

21. UCPDC full form: Uniform Customs and Practices for Documentary Credits

22. UFCE full form is: Unhedged Foreign Currency Exposure

23. Unclaimed deposits with banks which have not been claimed for last 10 years will be transferred to: Depositor Education and Awareness Fund (DEAF).

24. Under KCC scheme, the marginal farmer can be sanctioned a flexible limit of. Ans Rs.10000 to Rs.50000

26. Under SARFESAI, appeal against decision of DRT can be made to DRAT within days and if appeal by borrower, he should deposit % of bank’s claim with DRAT: 30 days; 50%

27. Uniform savings bank rate by RBI upto: 1 Lakh

28. Up to what amt no collateral in National Urban Livelihood Mission: No collateral up to any amount. In NRLM no collateral up to Rs 10 lakh.

29. Walk in customer deposit amount Rs…………………….. and above to verify KYC: RS 50,000

30. What are the total number of digits in Aadhar Card: 12

31. What documents are required for opening a small account? Self attested photo and address

32. What is a bill of exchange - unconditional undertaking/ unconditional order: Unconditional order.

33. What is a General crossing? Drawing two parallel lines on face of a cheque

34. What is a General crossing? Writing two parallel lines on the face of the cheque with or without and company or any abbreviation thereof.

35. What is a Promissory note? Unconditional undertaking

36. What is a sans recourse endorsement – conditional endorsement, restrictive endorsement, facultative endorsement, per pro endorsement, none of these: None of these. In sans recourse endorsement, endorser excludes its liability.

37. What is Accrual concept: Every income or expense is taken in to account when becomes due irrespective of the fact whether it is received or paid or not.

One-liner Questions and answers for Bank Promotion Exams (Set 2)

38. What is conversion? Dealing with others property without their consent.

39. What is Debt securitization: Converting illiquid financial assets in to liquid marketable securities.

40. What is full form of CRAR? Capital to Risk weighted assets ratio

41. What is full form of FDI? Foreign Direct Investment

42. What is full form of IFSC: Indian Financial System Code

43. What is full form of ULIP? Unit Linked Insurance Plan

44. What is Letter of Credit? Undertaking by a bank to make payment to beneficiary on submission of documents under LC.

45. What is lien? Right of creditor to retain possession of goods and securities of debtor till creditor’s dues are paid.

46. What is material alteration? When a change is made in a cheque in such a way that it speaks a different language than what it originally spoke.

47. What is mortgage: Transfer of interest in specific immovable property to create security for a debt

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

48. What is National Financial Switch (NFS)? Largest network of shared automated teller machines (ATMs) in India run by the National Payments Corporation of India (NPCI).

49. What is NOSTRO account? Account of a bank in India with a correspondent bank abroad

50. What is noting: Recording the fact of dishonor of a bill or promissory note with Notary public

51. What is Pari-Passu Charge when loan has been sanctioned by more than one bank in consortium? In case of default, the sale proceeds of security will be shared in the ratio of outstanding within sanctioned limits.

52. What is payment in due course for a cheque: Payment as per apparent tenor of instrument without having any reason to believe that the person getting the payment is not entitle thereto.

53. What is Repo transaction? Sale of Govt securities by banks to RBI with a promise to repurchase after sometime.

54. What is Rupay: Indian domestic card scheme conceived and launched by the National Payments Corporation of India (NPCI)

55. What is special crossing: Writing name of a bank on a cheque with or without two parallel lines.

56. What is the bankers-customer relationship in case of deposits? Debtor – Creditor

57. What is the impact of Not negotiable crossing on a cheque? Title of Transferee will not be better than title of transferor.

SARFAESIA and DRT (MCQs) | Bank Promotion Exams | Including Recalled Questions

58. What is the liability of a bank in case of payment of forged cheque? Bank is liable to drawer for having made payment without authority as also for wrongful dishonor of another cheque due to insufficient funds.

59. What is the Limitation period of a demand Promissory Note? 3 Year from date of DPN

60. What is the limitation period of mortgage? 12 years

61. What is the lock in period of PPF account? 15 years

62. What is the main difference between Term Loan and Deferred Payment Guarantee: Outlay of Funds

63. What is the maximum amount of claim that can be referred to Lok Adalat? Rs 20 lakh

64. What is the maximum amount of loan that can be granted under DRI: Rs 15000

65. What is the maximum and minimum limit for maintenance of CRR? No minimum or maximum as per RBI Act. It is decided by RBI.

66. What is the maximum fine that can be awarded on dishonour of a cheque due to insufficient funds? Double the amount of cheque

67. What is the maximum imprisonment that can be awarded on dishonour of a cheque due to insufficient funds? 2 years

68. What is the maximum period for which FCNR(B) and NRE deposits can be accepted? 5 year and 10 year respectively.

69. What is the minimum and maximum amount that can be remitted under RTGS? Rs 2 lac and no limit

70. What is the minimum paid capital required for setting up a payment bank? Rs 100cr

71. What is the normal repayment period of long-term loan under KCC? 5 years

72. What is the objective of selling mutual fund product by a bank? To earn non-interest income

73. What is the Purpose of nomination? To settle claims easily and quickly in case of death of depositor

74. What is the relation between debenture holder and company: Creditor and debtor

75. What is the relation between purchase of a DD and Bank? Creditor and Debtor

One liner Questions and Answers for Bank Promotion Exams (Set 3)

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One liner Questions and Answers for Bank Promotion Exams (Set 3)

1. In a Bimonthly policy review, RBI does not consider which of the following - Repo Rate, Bank Rate, Saving Bank rate? Saving Bank deposit rate

2. In case of a failed ATM transactions (a/c debited but cash not dispensed), the turn-around time (restoration of amount) fixed by RBI w.e.f. 1.10.19, is. Ans - T + 5 days

3. In case of an illiterate customer, process of nomination requires witnesses by how many persons? Thumb impression requires 2 witnesses.

4. In case of counterfeit notes received in a deposit by a person with bank, FIR is not lodged and only a monthly consolidated report is sent if counterfeit notes in one remittance is up to: 4

5. In case of insurance of deposits by DICGC, what is the premium sharing ratio between bank and depositor? 100% of insurance premium is paid by the bank.

6. In case of loan given by more than one bank under a consortium, how the asset classification is done by various banks? Each bank will classify the account depending on its record of recovery.

7. In case of saving bank account, differential rates of interest may be provided for any end-of day balance. Ans - exceeding Rs.1 lac

8. In case of turnover method of financing, what will be the amount of bank limit and what will be the borrowers’ margin: Limit is assessed at 20% of projected annual sale turnover. Minimum margin to be stipulated based on projected annual turnover – 5%

9. In FI who is agent for bank. BC

10. In KCC, if there is recovery tie-up, banks can consider waiver of collateral security for a loan up to Rs. Ans -. Rs.3 lac

11. In Limited liability Partnership what is the liability of partner? Amount agreed to be contributed by partner at the time of joining partnership.

12. What are 4 P's of Marketing? Product, Place, Price, & Promotion

13. In small accounts, the account remains operational initially for a period of twelve months which can be extended for a further period of, provided the account holder applies and furnishes evidence of having applied for any of the OVDs during the first twelve months of the opening of the said account: twelve months

14. In Stand-up India scheme, % constitutes SC/ST members: 51%.

15. JAM stands for: Jan Dhan, Aadhar, Mobile

16. Insurance amount under Rupay card by NPCI is: Rs. 1.00 lac (Rs 2 lac for premium card)

17. Interest on cash credit account other than under KCC is calculated – fortnightly/monthly/quarterly/half yearly/yearly: Monthly.

18. Interest on CRR - NIL

19. Interest on domestic rupee savings deposits shall be calculated on. Ans - on daily product basis

20. Interest on savings deposit shall be credited at intervals. quarterly or shorter

21. Interest on savings deposit shall be credited at intervals. quarterly or shorter

22. Interest rate derivative contract that involves exchange of interest payments on a notional principal amount, on a future date, at agreed rates, for a defined forward period. Forward rate agreement

23. Interest rate futures based on any Rupee denominated money market interest rate or money market instrument. Money market futures

24. Interest rates on Saving Bank is decided by: Bank itself

25. Interest subvention shall be admissible for any period during which the account remains NPA – Yes/No. Ans - No

26. JLG member range: 4 to 10

27. Kissan Credit Card limit is sanctioned for a period of 5 years. 1st year limit is sanctioned as . Ans - (area under cultivation x scale of finance) + 30%

28. LC wherein the utilized amount under bill payment is reinstated: Revolving LC.

29. LEI: Legal Entity Identifier India Limited– A Wholly Owned Subsidiary of The Clearing Corporation of India Ltd.

30. Liability of confirming bank in LC: Bank makes additional undertaking to make payment under LC in addition to undertaking of issuing bank.

31. Life Certificate of pensioners is taken in which month? November

32. Limit sanctioned Rs 5 lac; Stock Rs 6 lac; Margin 25%; What will be Drawing power: Rs 4.5 lac

33. Limitation period for execution of decree: 12 years. (For filing suit for financial decree, it is 3 years)

34. Limitation period for filling suit in respect of mortgage is: 12 years

35. Loan against security of Life Insurance policy is given on the basis of: Surrender value.

36. Loan under CGTMSE upto 5 Lakh coverage: 85% of amount in default.

37. Loans upto which amount for artisans, village and cottage industries to be classified under weaker sections: Rs. 1.00 lacs

38. Loss due to inadequacy or failure of system, process, people or due to external events is called: Operational risk

39. Main difference between term deposit and Deferred payment guarantee is due to: Outlay of Funds

40. Max amt for tax saver FD: Rs 150000

41. Max loan against shares in demat form: Rs 20 lakh.

One liner Questions and answers for Bank Promotion Exams (Set 2)

42. Max number of members in SHGs – 20

43. Maximum amounts of credit in a Small account in a financial year should not be more than: Rs 100,000

44. Maximum customer’s liability if reported within 4 days to 7 days. Rs……….. or transaction amount whichever is lower Ans - 10000

45. Maximum period for which FCNR(B) account can be opened: 5 years

46. Meetings of Block Level Bankers’ Committee (BLBC) are held on basis, under Lead Bank Scheme? quarterly

47. Money market mutual funds are regulated by: RBI

48. Mortgage which is created by deposit of title deeds is called: Equitable Mortgage

49. Name of device used by Business Correspondents: Biometric device.

50. Net Working Capital is represented as – (a) Current Asset minus current liabilities; (b) Current asset minus stock; (b) Current asset minus current liabilities except bank borrowings: Current Asset minus current liabilities

51. No Due Certificate from the individual borrowers (including SHGs & JLGs) in rural and semiurban areas for all types of loans including loans under Government Sponsored Schemes, irrespective of the amount involved is not to be taken one amount of loan is up to . Ans - not to be taken irrespective of amount of loan

52. Notice money vary from 2 to day: 14 days

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

53. Now the Non-Banking Financial Companies -NBFCs (which include housing finance companies-HFCs) with assets worth at least Rs 500 crore can be taken for debt resolution & liquidation proceedings under the provisions of the IBC, 2016.

54. OFFICIAL LANGUAGE classified how many region: three regions

55. On a cheque presented for payment, amount is written in words but all other items are written in Regional Language. What should the bank do? Pay the cheque

56. Overdue of loans from 61 to 90 days is: SMA2

57. Partners liability – Joint and Several, Unlimited

58. Paying Banker will get protection in case of payment of cheques under section 85 of N I Act provided payment is made in: good faith and without negligence

59. Payment banks accept deposits upto 1 lakh by: Only Saving and Current account

60. Period for KYC updation on Low-risk customers: once in 10 years.

61. Periodicity of R Return to RBI: Fortnightly or twice in a month on 15th and last day.

62. PMJDY is OD upto: Rs. 10,000/-

63. PMMY Shishu loans upto: Rs. 50000/-

64. Power of Attorney is stamped under which act – Indian Contract Act; Banking Regulation Act, State Stamp Act, Indian Stamp Act: State Stamp Act

65. Stand by Letter of credit is just like: Bank Guarantee

One liner Questions and answers for Bank Promotion Exams (Set 2)

2022-12-15T13:14:00.006+05:30

One liner Questions and answers for Bank Promotion Exams (Set 2)

1. Bank retains possession of goods of the borrower in which of the following – lien, set off, appropriation: Lien

2. Banker-customer relationship in standing instruction: Agent and Customer

3. Banks are required to maintain the secrecy of a customer’s account as per – the Indian contract Act; Implied obligation; Implied right: implied obligation.

4. Banks begin in-principle approval of retail loans in 59 minutes under the online lending platform ‘PSB Loans in 59 Minutes.

5. Basel-based Bank of International Settlements (BIS) has launched a dollar green bond fund enabling central banks around the world to invest in “green bonds”.

6. Borrowing powers of director or board i.e. the extent to which Directors can borrow is given in: The articles of association

7. Breakeven point: Level of sales at which there is no profit no loss

8. Calculate Debt Equity ratio – Debenture – Rs 200, capital 50; reserves – 80; P& L account credit balance – Rs. 20: 4: 3 (200 divided by 150).

9. Calculate Net working capital limit – Total assets 1000; Long Term liabilities 400; Fixed assets, Intangible assets, and Noncurrent assets (i.e. long-term uses) Rs 350; What is net working capital: 400- 350= Rs. 50

10. Capital adequacy related to? CRAR

11. A corporate debtor may be put into liquidation if the insolvency resolution process fails or financial creditors decide to wind down and distribute the asses of the debtor if ____ majority of the creditor’s committee decides to liquidate the corporate debtor (66%)

12. Sum insured of Rs 1 lakh for RuPay Non-Premium cardholders and of Rs 2 lakh for RuPay Premium cardholders and variable higher sums for RuPay Select Cardholders (accidental death or Permanent Total Disability only) to eligible RuPayCardholders.

13. Profitability ratio = Net Income/Net Sales *100

14. Cash receipts or cash payments of more than Rs 10 lakh are reported to FIU on CTR statement which should be sent to FIU within from the close of the month: 15 days.

15. Cash Transaction Report (CTR) in respect of cash receipt or cash payment of more than Rs 10 lac is to be sent to Director – FIU. What is the periodicity of the report – Fortnightly, Monthly, Quarterly, half yearly: Monthly, within 15 days of the close of the month.

16. CERSAI full form: Central Registry of Securitization, Asset Reconstruction and Security Interest of India

17. Certificate of incorporation is: proof of existence of a company.

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

18. Certificate of incorporation issued by: Registrar of Companies

19. Cheque has been defined in: Section 6 of N I Act

20. Charge on immoveable property – Hypothecation

21. Citizen below 60years is required to fill which forms for non-deduction of tax at source in case interest credited or likely to be credited on FD in a financial year is more than Rs 10,000 – 15G/15H/Form 60/Form 61: 15G

22. Consumer credit, including personal loans but excluding credit card receivables attracts a risk weight of per cent for capital adequacy purpose? 100%

23. Converting physical shares to electronic form is called: Dematerialization.

24. Counterfeit note kept record for year: 3 years

25. Credit in 9 months in a cc account are not sufficient to recover the interest but outstanding is within DP. What will be the position of account: It becomes NPA

26. CRR is maintained as per: Sec 42(1) of RBI Act

27. Current account operated by finance director of a limited company. Cheque signed by him presented for payment after his death: Cheque should be paid

28. Current ratio of the firm indicates: Ability of firm to pay current liabilities or indicates liquidity

29. Debt Service coverage ratio is used for: Sanction of Term Loans

30. Deferred Payment guarantee is: Financial Guarantee

31. Deposit insurance claim is payable by DICGC, in which of the following events? a winding up of a bank b amalgamation of a bank c reconstruction of a bank d any of the above

32. Difference between Deferred payment guarantee and Term Loan: Due to Outlay of Funds

33. Difference between the import of goods & export of goods: Balance of Trade

34. Documents executed in India are required to be as per the Indian stamp act/ State Stamp Act: Stamped

35. DSCR indicates: Ability of the firm to repay term loan installments

36. Duplicate DD to be issued in how many days? 14 days from the date of the request

37. Import regulated by: DGFT (Director General of Foreign trade)

38. FCNR opened as which type of account: Fixed Deposits

39. In Bimonthly policy review, RBI does not consider which of the following - Repo Rate, Bank Rate, Saving Bank rate? Saving Bank deposit rate

40. Finance against receivables means? FACTORING

41. Find the Odd one out – Deposit, Advance, Investment, Inflation: Inflation

42. For FD account depositor appoint nominee. Signature attested by: No attestation required

43. For seeking information under RTI what is not required? Reason for seeking information not to be disclosed.

44. Frauds of More than ₹250 million and up to Rs. 500 million: CBI - To be lodged with the Banking Security and Fraud Cell (BSFC) of CBI (irrespective of the involvement of a public servant)

20 MCQs | Priority Sector Guidelines| (Set 2) | Bank Promotion Exam | Including Recalled Questions

45. Frauds of Rs 10,000 & above but below Rs 0.1 million: State Police; To the local police station

46. Frauds of Rs 30 million and above and up to ₹250 million: CBI- To be lodged with Anti-Corruption Branch of CBI (where staff involvement is prima facie evident) or the Economic Offences Wing of the CBI (where staff involvement is prima facie not evident)

47. Frauds of Rs. 0.1 million and above involving outsiders and bank staff: To the State CID/Economic Offences Wing of the State concerned

48. Full form of IFSC: Indian Financial System Code

49. Full form of NIM: Net Interest Margin

50. Full form of PIN which is used in ATM? Personal Identification Number

51. Full form of PRAN? Permanent Retirement Account Number

52. Garnishee Order is issued by and bank is of the Judgement Debtor: Court, Debtor.

53. Generally interest on current account balances cannot be paid. But it can be paid in accounts in the name of. Ans - deceased customers

54. Generally, tenure of external concurrent auditors with a bank shall not be more than years on continuous basis. Ans - 5 years

55. Guarantee claim period when period is not mentioned in the bank guarantee document: 3 years

56. Holiday period given for repayment of installments in a loan is termed as: Moratorium period

57. How many days’ notice to give for partial freeze account: 6 months

58. How many members are there in a Joint Liability Group? 4 to 10

59. How much amount can be deposited in a small account in a financial year? Rs one lac

60. How much amount can be send abroad by a resident individual under Liberalized Remittance Scheme? USD 250000 in a financial year

61. How much amount can be withdrawn from a small account in a month? Rs 10,000

62. How much currency can be released for business trip abroad: USD 250000 per financial year (under LRS).

63. How much Indian Rupees can be taken while visiting Nepal or Bhutan – Rs 10,000; Rs 25000; Rs 50000; Rs 100000; No limit: up to Rs 25000

64. If a Senior Citizen having deposit with your bank & gets Interest over Rs. 10000 & do not want to pay tax in that case which form he/she has to submit? 15H

Part 4: TYPES OF CHARGES, SECURITIES & DOCUMENTATION with Multiple Choice Questions (MCQs) and answers

65. If Counterfeit notes up to ______ are detected in one deposit, no FIR to be lodged but consolidated report to be sent to police at the end of the month: 4

66. If in a cheque, amount in words and figures differ, which amount should be paid? Amount in words.

Multiple Choice Questions on Types of Customers and Accounts for Bank Promotion Exams (Part 2)

2022-12-14T22:15:00.011+05:30

Multiple Choice Questions on Types of Customers and Accounts for Bank Promotion Exams (Part 2)

Let us discuss some more questions on different types of customers and accounts.

41. The minimum number of members in a private limited company is.

Option A. 2.

Option B. 7.

Option C. 5.

Option D. 50.

The correct answer is Option A. 2.

42. The maximum number of members in the private limited company.

Option A. 10.

Option B. 200.

Option C. 50.

Option D. 150.

The correct answer is Option B. 200.

43. A private limited company (other than one-man company) must have at least………. Directors.

Option A. 2.

Option B. 3.

Option C. 5.

Option D. 9.

The correct answer is Option A. 2.

44. The minimum number of members in a public limited company is.

Option A. 2.

Option B. 5.

Option C. 7.

Option D. 10.

The correct answer is Option C. 7.

45. The maximum number of members in a public limited company is.

Option A. 1000.

Option B. 2000.

Option C. 5000.

Option D. no limit.

The correct answer is Option D. no limit.

46. A public limited company must have at least how many directors?

Option A. 2.

Option B. 3.

Option C. 5.

Option D. 9.

The correct answer is Option B. 3.

47. A Joint stock company is an artificial person created by law under provisions of.

Option A. Banking Regulation Act, 1949.

Option B. Companies Act, 1956.

Option C. Companies Act, 2013.

Option D. either Option B. or Option C. above.

The correct answer is Option D. either Option B. or Option C. above.

48. Which of the following documents is Issued by the Registrar of companies?

Option A. Memorandum and Articles of Association.

Option B. certificate of Incorporation.

Option C. Certificate of commencement of Business.

Option D. only Option B. & Option C. above.

The correct answer is Option D. only Option B. & Option C. above.

49. While opening current account of a private limited company, the bank needn’t Insist on production of.

Option A. Certificate of Incorporation.

Option B. Memorandum and Articles of Association.

Option C. Certificate of commencement of Business.

Option D. Board ‘s resolution.

The correct answer is Option C. Certificate of commencement of Business.

50. Which document is referred to as Charter of the Company?

Option A. Certificate of Incorporation.

Option B. Memorandum of Association.

Option C. Articles of Association.

Option D. certificate of commencement of Business.

The correct answer is Option B. Memorandum of Association.

51. The objects for which a company is incorporated are contained in.

Option A. Articles of Association.

Option B. Memorandum of Association.

Option C. Certificate of Commencement of Business.

Option D. Certificate of Incorporation.

The correct answer is Option B. Memorandum of Association.

52. ‘Uitra vires ‘in the context of a limited company means any act.

Option A. beyond the borrowing powers of the company.

Option B. beyond the authority delegated to the Board of Directors.

Option C. beyond the scope of objectives of the company as laid down in the Memorandum of Association.

Option D. beyond the paid-up share capital of the company.

The correct answer is Option C. beyond the scope of objectives of the company as laid down in the Memorandum of Association.

53. A company was constituted with the objective to promote computer software in India. It has been granted credit facilities by the bank for manufacture of plastic bags. The contract between the bank and the company.

Option A. can be enforceable if all directors endorse it.

Option B. being uitra-vires can ‘t be enforceable at all.

Option C. can be enforceable, if ratified by the members in a general body meeting by unanimous decision.

Option D. can be enforceable, if ratified by the members in general body meeting by 2/3rd majority.

The correct answer is Option B. being uitra-vires can ‘t be enforceable at all.

54. Articles of Association of a company contains details regarding.

Option A. objectives of the company.

Option B. authorized share capital of the company.

Option C. matters connected with the conduct of day-to-day affairs of the company.

Option D. registered office of the company.

The correct answer is Option C. matters connected with the conduct of day-to-day affairs of the company.

55. Every person dealing with a limited company is presumed to have knowledge of contents of.

Option A. Memorandum & Articles of Association.

Option B. Certificate of Commencement of Business.

Option C. Certificate of Incorporation.

Option D. Board ‘s resolutions passed from time to time.

The correct answer is Option A. Memorandum & Articles of Association.

56. ‘Constructive Notice ‘ in the context of a limited company means.

Option A. that the company has been duly registered.

Option B. that the company intends to go in for a public issue.

Option C. that anybody dealing with the company has knowledge about its Memorandum and Articles of Association.

Option D. that every stakeholder is informed about the date of next general body meeting.

The correct answer is Option C. that anybody dealing with the company has knowledge about its Memorandum and Articles of Association.

57. While opening account of a public limited company, the bank requires.

Option A. Memorandum and Articles of Association.

Option B. Certified copy of Board ‘s resolution.

Option C. Certificate of Incorporation and of commencement of Business.

Option D. all above.

The correct answer is Option D. all above.

58. The General Manager of a public Itd, company who is authorized to operate the Company account is going abroad, He requests the bank that in his absence the Finance Manager will operate the account, His request can be.

Option A. acceded to in the normal course.

Option B. acceded to if the Company Secretary countersigns the same.

Option C. accepted only after resolution by the Board to the effect is passed.

Option D. either Option B. or Option C. above.

The correct answer is Option C. accepted only after resolution by the Board to the effect is passed.

59. The account of a limited company is operated by the two directors Jointly. we come to know about the death of one of the directors authorized to sign cheques on behalf of the company. The next day a cheque bearing his signature and that of another director is presented through clearing. in this case.

Option A. we may pass the cheque after seeking confirmation of the other signatory to the cheque .

Option B. we may pass the cheque after seeking confirmation of the other signatory and one more director of the company.

Option C. we can pass the cheque, if otherwise in order.

Option D. we must return the cheque with reason ‘one signatory dead’.

The correct answer is Option C. we can pass the cheque, if otherwise in order.

MCQs on TYPES OF CUSTOMERS AND THEIR ACCOUNTS FOR BANK PROMOTION EXAM

60. A sports club approaches us for opening a current account. we should call for.

Option A. copy of rules and by-laws.

Option B. copy of the resolution of managing committee.

Option C. certificate of registration.

Option D. all above.

The correct answer is Option D. all above.

61. A Flying club has an account with us which is operated by its secretary and treasurer jointly. A cheque is presented and we come to know that the treasurer expired two days ago. In the circumstances.

Option A. we can pass the cheque only after confirmation of the secretary.

Option B. we should pass the cheque, if otherwise in order.

Option C. we can return the cheque with the reason ‘signatory reported dead ‘.

Option D. we should return the cheque and close the account.

The correct answer is Option B. we should pass the cheque, if otherwise in order.

62. The law relating to trusts is given in.

Option A. Trust Deed.

Option B. Articles of Association.

Option C. Indian Trusts Act, 1882.

Option D. Memorandum of Association.

The correct answer is Option C. Indian Trusts Act, 1882.

63. While opening account of a trust which of the following documents must be inspected and copy obtained.

Option A. Articles of Association.

Option B. Trust Deed.

Option C. certificate of registration.

Option D. Memorandum of Association.

The correct answer is Option B. Trust Deed.

64. A trust has three trustees. They come to the branch to open a current account in the name of the trust and insist that anyone of them should be allowed to operate the account. Under the circumstances we should.

Option A. open the account as the trustees can delegate powers to one of them.

Option B. open the account as requested, if the trustees are persons of good means.

Option C. not permit unless trust deed specifically allows for operation by one trustee.

Option D. not open the account as trustees have always to act jointly.

The correct answer is Option C. not permit unless trust deed specifically allows for operation by one trustee.

65. Two trustees of a trust having four trustees in all want to appoint an attorney to operate the trust account. We.

Option A. may allow them to do so in the normal course.

Option B. may allow them to do so, if they undertake to indemnify the bank.

Option C. may allow them to do so, if the remaining two trustees also join them.

Option D. can ‘t allow them to do so as trustees can ‘t delegate their powers.

The correct answer is Option D. can ‘t allow them to do so as trustees can ‘t delegate their powers.

66. A trust has two trustees. The deed allows for operation by either of them. one of the trustees has expired. A cheque signed by the deceased trustee is presented through clearing. We should.

Option A. pass the cheque, if otherwise in order.

Option B. return the cheque with the remark ‘trustee deceased ‘.

Option C. pass the cheque only after obtaining consent of the surviving trustee.

Option D. return the cheque and close the account as trust comes to an end after death of a trustee.

The correct answer is Option A. pass the cheque, if otherwise in order.

67. A trust has Asha and Amar as its trustees, Amar is declared insolvent. Subsequently a cheque signed by him is presented for payment, We should.

Option A. pay the cheque, If otherwise in order.

Option B. not pay the cheque as such a payment will not be payment in due course.

Option C. pay the cheque only after confirmation of Asha.

Option D. return the cheque and close the account as trust comes to an end, when a trustee becomes Insolvent.

The correct answer is Option A. pay the cheque, If otherwise in order.

68. The sole trustee a public trust died in a railway accident, In this case.

Option A. trust will be wound up.

Option B. trustee / trustees may be appointed by the beneficiaries/court.

Option C. legal heirs of the deceased sole trustee will acquire trusteeship.

Option D. Charity Commissioner will appoint some other trustee (s).

The correct answer is Option B. trustee / trustees may be appointed by the beneficiaries/court.

69. Shri Sankar Mehta, the sole trustee of a hospital managed by a public trust, has approached the bank to allow loan for purchase of some urgent equipment for the hospital. He is prepared to execute personal guarantee for the amount of the loan. We should.

Option A. allow the loan only if the trust deed provides for granting of loan to the trustee.

Option B. allow the loan as it is going to be utilized for the benefit of the community.

Option C. allow the loan only if authorized by the Charity Commissioner.

Option D. allow the loan after seeking clearance of a court of competent jurisdiction.

The correct answer is Option A. allow the loan only if the trust deed provides for granting of loan to the trustee.

70. The eldest member in a Joint Hindu family is called.

Option A. Karta.

Option B. co parcener.

Option C. attorney.

Option D. any of the above.

The correct answer is Option A. Karta.

71. According to law, the Karta has an implied authority to take a loan for the purpose of business of joint Hindu family. While granting loan to an HUF, the loan documents should be got executed by.

Option A. Karta.

Option B. all adult male members of the family including Karta.

Option C. Karta with the consent of all other adult male members of the family.

Option D. either Option B. or Option C.

The correct answer is Option B. all adult male members of the family including Karta.

72. There is a current account with us in the name of an H. U. F. The account is operated by the Karta. We receive a notice of his death. in the circumstances.

Option A. we should stop the account till court appoints another Karta.

Option B. we should allow the next senior most adult member to operate the account as he/she will become the Karta after completion of certain formalities.

Option C. we should close the account and pay the balance to the legal heirs of the deceased.

Option D. we should place the balance in the account at the disposal of a court.

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

The correct answer is Option B. we should allow the next senior most adult member to operate the account as he/she will become the Karta after completion of certain formalities.

73. The Karta of an H. U. F. has expired. There is no adult male coparcener in the family. There are three minor male members aged 15 years, 10 years and 8 years who are living with their mother. The HUF was having current account with us. In this case the account will be.

Option A. closed as there is no adult male co parcener and money deposited with the court.

Option B. transferred to inoperative accounts ledger and revived after the eldest male member attains majority.

Option C. operated by the mother who will become the karta.

Option D. operated by the mother and all the three children under the joint signatures.

The correct answer is Option C. operated by the mother who will become the karta.

74. In relation to banking transactions, an executor is a person who is.

Option A. appointed by the court to look after the affairs of the deceased.

Option B. named in the will of the deceased to manage his estate.

Option C. appointed by the legal heirs of the deceased to distribute his wealth amongst them.

Option D. required to execute construction work of the deceased.

The correct answer is Option B. named in the will of the deceased to manage his estate.

75. While opening account in the name of an executor, we must obtain.

Option A. original will.

Option B. probate.

Option C. succession certificate.

Option D. letter of administration.

The correct answer is Option B. probate.

76. When a person dies without leaving behind a will, a person appointed by the court to manage his estate is called.

Option A. an executor.

Option B. an attorney.

Option C. an administrator.

Option D. a manager.

The correct answer is Option C. an administrator.

77. While opening account in the name of an administrator, we must obtain.

Option A. original will.

Option B. probate.

Option C. succession certificate.

Option D. letter of administration.

The correct answer is Option D. letter of administration.

78. Probate is a document issued by a court of law and is in the nature of.

Option A. a succession certificate.

Option B. a legal certification of the will of the deceased.

Option C. a decree against debtors of the deceased.

Option D. a document debarring legal heirs from entitlement to assets of the deceased.

The correct answer is Option B. a legal certification of the will of the deceased.

79. The main difference between mandate and power of attorney is that.

Option A. a mandate is a stamped document whereas power of attorney is not.

Option B. mandate is stamped with adhesive stamps and power of attorney with non-judicial stamps.

Option C. mandate is not stamped whereas the power of attorney is stamped.

Option D. mandate is not given to other than a joint account holder and power of attorney is given necessarily to an outsider.

The correct answer is Option C. mandate is not stamped whereas the power of attorney is stamped.

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

2022-12-13T22:13:00.004+05:30

One-liner Questions and Answers for Bank Promotion Exams (SET 1)

1. A and B operate FD deposit (E or S) and nominee. If A died, Withdrawal of FD at maturity by B alone.

2. Insurance sector in India is regulated by: IRDA

3. Credit card and Debit Card is called: Plastic money

4. SGSY has been replaced by: NRLM

5. Full form of VPA in UPI: VIRTUAL PAYMENT ADDRESS

6. Headquarter of Asian Clearing Unit: Tehran, Iran

7. Headquarters of Emirates Islamic Bank: Dubai, UAE

8. A ___________is a credit card that's issued by a retailer and bears the name of both the retailer and the credit card company. co-branded card

9. Right of a nominee begins when: on the death of all account holders except in the case of jointly operated locker accounts.

10. A cheque will be valid for: 3 months from date of issue

11. A crop will be called short duration crop if its crop season is up to: 12 months

12. A crossed cheque is paid to the authorized person of the collecting Bank. Whether is it a violation of statutory provisions on crossing as per N I Act? No. Payment can be made to the authorized representative of bank in cash also.

13. A customer Mr Sharma had credit balance 40,000 in his saving ac and also had an OD ac with overdue Debit balance of 20,000. Bank debits his saving account and adjusts OD ac. The bank is said to have exercised the Right of: Set-off

14. A DD is required to be crossed with account payee crossing if the amount of DD is: Rs 20000 and above

15. A derivative contract that involves the exchange of a stream of agreed interest payments on a ‘notional principal’ amount during a specified period. interest rate swap

16. A financial derivative contract that gives the buyer the right, but not the obligation, to either buy (call option) or sell (put option) an asset at a pre-determined price (which is known as the strike price) by a specified date (which is known as the expiration date).

17. A financial derivative contract which is a combination of cash and/or generic derivative instrument. structured derivative

18. A financial derivative contract whose value is derived from one or more interest rates, prices of interest rate instruments, or interest rate indices. interest rate derivative

19. A financial derivative contract whose value, in absolute terms, changes more than proportionately to the change in the underlying risk. leveraged derivative

20. A financial transaction and a type of debtor finance in which a business sells its accounts receivable (i.e., invoices) to a third party at a discount is called: Factoring

21. A letter of credit which becomes available again on the negotiation of documents under LC is called: Revolving LC

22. A minor will attain majority at the age of: 18 years

23. A product that derives its value from the performance of an underlying entity: Derivative.

24. A savings account becomes inoperative when it has not been operated for: 2 years

25. A Substandard account becomes doubtful after: 12 months from date of becoming NPA.

26. A term deposit is maturing on Sunday, a non-business working day. Bank makes payment on Monday, a working day. Interest shall be paid. Ans - up to Monday

27. A term deposit of a HUF has become due. At the time of renewal of account, the Karta of HUF informs that he has become a Senior Citizen. What rate of interest will be given on term deposit? : Normal interest rate. No benefit of senior citizen to be given

28. A written instrument which is a commitment to pay against tender of the documents Letter of Credit

29. ABC are partners of a firm X. Firm has availed loan of Rs. 2,00,000/- and one of the partners died when the liability is Rs. 2.00 lacs. After the death of a partner, credit of Rs. two lacs and debit of Rs. 1.50 lacs happened in the account. What is the liability of the legal heirs of the deceased partner as per Claytons rule?: there is No liability

30. Account holder dies. Cheque signed by POA presented for payment. What should be done? Not to be paid.

31. After 6 months of successful transaction, which facility will be provided for accounts opened under PMJDY scheme? Overdraft

32. After Nomination in an account, what is the status of the nominee? Trustee of legal heirs

33. Agency banks are required to credit the pension for the month of March on. Ans - 1 st working day of April

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

34. All District Credit Plans under Lead Bank Scheme are required to launched by every year, after these are aggregated in State level plans? 1 st April

35. All transactions, involving payment of interest on FCNR-B deposits shall be rounded off to decimal places. Ans - two

36. All transactions, involving payment of interest on rupee deposits shall be rounded off to nearest Re.1

37. Amount below 2 lac can be remitted from one bank to other bank within India by – RTGS, NEFT, SWIFT, Money Transfer scheme: NEFT

38. An advance has been given to a private limited company against hypothecation of stocks. With whom charge is required to be registered? Registrar of Companies.

39. An asset is doubtful for more than 2 years. How much provision is required to be made on the unsecured portion of the same: 100 %

40. An option contract whose value is based on Rupee interest rates or interest rate instruments. Interest rate option

41. An overdue FD will be renewed from the due date of FD if it is presented for renewal within: 14 days from due date.

42. APBS: AADHAR PAYMENT BRIDGE SYSTEM

43. As per KYC guidelines, Demand draft of how much amount cannot be issued against cash? Rs 50,000 and above

44. As per KYC norms, in the event of change in this address due to relocation or any other reason, customers may intimate the new address for correspondence to the bank within: two weeks of such a change

45. As per latest change, what is the maximum PPF contribution that can be paid in a F.Y? Rs 150,000

46. As per latest RBI guidelines, DD of Rs. 20000/- and above to be issued as: A/c payee crossing

47. As per official language policy, where participants in a training program are from regions ‘A’ and ‘B’, the training may be imparted in: Hindi.

48. As per PMLA, due diligence of KYC does not refer to: Knowing family status of account holder.

49. As per section 107 and 108 of Indian Evidence Act, a person can be presumed to have died if he is missing for: 7 years

50. As per Section 31 of N I Act, in case of wrongful dishonor of cheque, bank will be liable to: Drawer of cheque and not liable to payee.

51. As per which Act, DD cannot be made payable to the bearer? Section 31 of RBI Act.

52. At the national level, APY is monitored by: Pension Fund Regulatory and Development Authority

53. Bailment of goods or securities to secure debt is called: Pledge

54. Bailment of goods to secure payment of a debt is called – Lien, Pledge, Negative Lien, Hypothecation: Pledge

55. Balance lying in the account of a company. When winding up proceedings of the company started funds in the account will be at disposal of: Official Liquidator

Part 4: TYPES OF CHARGES, SECURITIES & DOCUMENTATION with Multiple Choice Questions (MCQs) and answers

2022-12-12T16:26:00.001+05:30

Let us discuss some more Multiple-Choice Questions on TYPES OF CHARGES, SECURITIES & DOCUMENTATION

91. What is the limitation for filing suit for recovery of money?

Option A. Five years.

Option B. Three years.

Option C. Ten years.

Option D. twelve years.

The correct answer is Option B. Three years.

92. Limitation period for exercising Right of Redemption and Right of Foreclosure is

Option A. 3 years.

Option B. 12 years.

Option C. 30 years.

Option D. 30 years in case the beneficiary is Government and 12 years in other cases.

The correct answer is Option C. 30 years.

93. Which of the following is true about law of limitation?

Option A. If limitation period expires, bank cannot recover the amount from the borrower.

Option B. If limitation period expires, the bank cannot sell the goods pledged to it.

Option C. If limitation expires bank can act under SARFAESI Act, 2002.

Option D. If limitation period expires, bank loses the remedy of filing a suit but it does not take away the right of recovering the debt.

The correct answer is Option D. If limitation period expires, bank loses the remedy of filing a suit but it does not take away the right of recovering the debt.

94. A loan was sanctioned to a partnership but since the partners were at different places, the documents were executed by one partner on 15.3.2013, second partner on 18. 3. 2013 and third partner on 21.3.2013. The limitation period against the firm will run from.

Option A. 15.3.2013.

Option B. 18.3.2013.

Option C. 21.3.2013.

Option D. any one of these dates as per discretion of the bank.

The correct answer is Option C. 21.3.2013.

95. The limitation period for recovery of amount of a dishonoured usance bill is 3 years from.

Option A. date of bill.

Option B. date of acceptance.

Option C. due date of payment.

Option D. date of presentation of bill of acceptance.

The correct answer is Option C. due date of payment.

96. The period of limitation for execution of a decree, in respect of decreed debt is years from the date of decree.

Option A. 3.

Option B. 12.

Option C. 30.

Option D. Any of these depending upon beneficiary.

The correct answer is Option B. 12.

97. A demand promissory note was executed on 5.3.2010. The suit for recovery of amount based on the DP note alone can be filed up to.

Option A. 4.3.2013.

Option B. 5.3.2013.

Option C. 8.3.2013.

Option D. 3 years from the date of actual demand of loan.

The correct answer is Option B. 5.3.2013.

98. A demand promissory note was executed on 07.04.2010. If 07.04.2013 falls on Sunday, the suit for recovery of amount can be filed up to.

Option A. 07.04.2008 as limitation will expire on 07.04.2013.

Option B. 06.04.2013 because though the limitation will expire on 07.04.2013, but it being Sunday, suit can be filed up to next preceding business day.

Option C. 07.04.2013 and Judge will be requested to entertain application as a special case.

Option D. 08.04.2013 when the court opens.

The correct answer is Option D. 08.04.2013 when the court opens.

99. Acknowledgement of debt in a case was obtained after expiry of limitation period. In this case what will be the position of bank as regards limitation period of documents?

Option A. Limitation period will extend for 3 years from date of expiry.

Option B. Limitation period will extend for 3 years from date of signing of acknowledgement of debt.

Option C. Limitation period will extend for 3 years from date of demand.

Option D. Limitation period will not extend.

The correct answer is Option D. Limitation period will not extend.

100. In case of a bill payable on demand, limitation period starts from.

Option A. date of default.

Option B. date of demand.

Option C. date of bill.

Option D. date of protest with Notary public.

The correct answer is Option B. date of demand.

101. A loan was granted to R and S with a clause that they will be liable jointly and severally. As the documents were about to expire, bank obtained balance confirmation from R only as S was out of town. On return of S , Bank requested him to sign balance confirmation which he refused. In this case.

Option A. limitation period will extend only against R.

Option B. limitation period will extend against both R and S.

Option C. limitation period will not extend against either as balance confirmation signed by one of them is not valid.

Option D. limitation period will extend against both R and S provided S was abroad.

The correct answer is Option A. limitation period will extend only against R.

102. Limitation period available to a holder of cheque for acting under Section 138 of NI Act, 1881 for dishonoured cheque due to insufficient funds is.

Option A. One month from the date of cause of action.

Option B. 15 days from date of cause of action.

Option C. 3 years from date of dishonour.

Option D. one month from date of demand.

The correct answer is 102. Limitation period available to a holder of cheque for acting under Section 138 of NI Act, 1881 for dishonoured cheque due to insufficient funds is.

103. In case of clean overdraft, the limitation period is.

Option A. 3 years from date of document.

Option B. 3 years from date of sanction.

Option C. 3 years from the date of demand by bank.

Option D. 3 years from date of refusal by borrower to pay.

The correct answer is Option C. 3 years from the date of demand by bank.

104. Bank requested the borrower to sign balance confirmation for an outstanding balance of Rs. 10,55, 422. However, the borrower contested that interest had been wrongly charged to the extent of Rs. 25,312 and therefore, acknowledged the debt only for Rs. 10,30,110. In this case limitation period.

Option A. will extend for the whole of the debt.

Option B. will not extend as the borrower has disputed the liability.

Option C. will extend for Rs. 10,30,110.

Option D. will not extend as it is not a valid acknowledgment.

The correct answer is Option A. will extend for whole of the debt.

TYPES OF CHARGES, SECURITIES & DOCUMENTATION With Multiple Choice Questions and answers (MCQs) - Part 1

105. D. P. Note executed by a borrower has become time barred. It means.

Option A. that the bank has lost all rights against the borrower.

Option B. that the bank cannot proceed against the borrower in a court on the basis of D. P. Note.

Option C. bank cannot sell goods pledged with It.

Option D. all above.

The correct answer is Option B. that the bank cannot proceed against the borrower In a court on the basis of D. P. Note.

106. The period of limitation for sale of mortgage property through court when it is payable on demand is………. years from date of creation of mortgage.

Option A. 3.

Option B. 12.

Option C. 30.

Option D. 20.

The correct answer is Option B. 12.

107. Period of limitation of existing documents can be extended by.

Option A. obtaining letter of acknowledgement of debt.

Option B. part payment of debt.

Option C. obtaining a Fresh set of documents.

Option D. either Option A. or Option B. above.

The correct answer is Option D. either Option A. or Option B. above.

108. A loan was granted to a borrower against pledge of stocks and outstanding in the account is Rs. 5 lakh. Despite repeated reminders he has neither repaid the loan nor signed balance confirmation. As a result, limitation has expired. The value of stocks pledged is about Rs. 4 lakh and borrower is also maintaining a saving bank account with a balance of Rs. 1 lakh. What are the options available to the bank?

Option A. The bank cannot recover the loan as the limitation has expired.

Option B. The bank cannot file a suit against borrower as limitation has expired.

Option C. The bank can sell the goods pledged and exercise right of lien over SB balance.

Option D. The bank can recover the loan by sale of pledged goods and exercising right of set off on saving bank deposits.

The correct answer is Option D. The bank can recover the loan by sale of pledged goods and exercising right of set off on saving bank deposits.

109. Currently a charge created by a limited company on its assets is required to be registered with the Registrar of Companies as per Section.

Option A. Section 125 of the Companies Act of 1956.

Option B. Section 138 of the Companies Act of 1956.

Option C. Section 77 of the Companies Act, 2013.

Option D. 293 (1) Option D. of the Companies Act, 1956.

The correct answer is Option C. Section 77 of the Companies Act, 2013.

110. Any charge (other than pledge) created by a limited company on its assets is required to be registered with the Registrar of Companies within. ……. days of the creation of charge.

Option A. 30.

Option B. 45.

Option C. 60.

Option D. 90.

The correct answer is Option A. 30.

111. As per current provisions given in Companies Act, 2013 if a limited company is not able to file particulars of charge with the ROC within 30 days of creation of charge, the Registrar may, on an application by the company, allow such registration to be made within a period of………days of such creation on payment of such additional fees as may be prescribed.

Option A. 300.

Option B. 60.

Option C. 100.

Option D. 180.

The correct answer is Option A. 300.

112. Which of the following charge (s) is/are not required to be registered with ROC?

Option A. Hypothecation of stocks.

Option B. Assignment of Book Debts.

Option C. Mortgage of Immovable property.

Option D. Pledge of stocks.

The correct answer is Option D. Pledge of stocks.

113. In which of the following cases, charge is required to be registered with Registrar of companies?

Option A. Advance against Trust Receipt.

Option B. Advance based on negative lien.

Option C. Advance against bank’s own deposit.

Option D. None of these.

The correct answer is Option D. None of these.

Part 2 : TYPES OF CHARGES, SECURITIES & DOCUMENTATION With Multiple Choice Questions and answers (MCQs) for Bank Promotion Exams

114. In which of the following cases, charge is not required to be registered with the Registrar of Companies?

Option A. Advance against Documentary bills.

Option B. Purchase of cheques.

Option C. Pledge of stocks.

Option D. All of these.

The correct answer is Option D. All of these.

115. In which of the following cases, the modification of charge is required to be filed by the borrowing company with the ROC?

Option A. Change in the amount of limit.

Option B. Variation in the rate of interest.

Option C. Obtaining additional securities.

Option D. only Option A. & Option C. above.

The correct answer is Option D. only Option A. & Option C. above.

116. The primary responsibility of filing the particulars of charge with the ROC is that of.

Option A. Borrowing company.

Option B. lending banker.

Option C. Manager of the bank.

Option D. Both Option A. or Option B. above.

The correct answer is Option A. Borrowing company.

117. When an advance is fully repaid by the company, the particulars regarding satisfaction of charge are required to be filed within days of the adjustment of loan.

Option A. 15.

Option B. 30.

Option C. 45.

Option D. 60.

The correct answer is Option B. 30.

118. In which of the following cases, primary responsibility of filing the particulars of charge with ROC is of the lending banker?

Option A. Registration of charge.

Option B. Modification of charge.

Option C. satisfaction of charge.

Option D. None of these.

The correct answer is Option D. None of these.

119. A company has its registered office at Jaipur In Rajasthan. Its administrative office is in Delhi while factory is located at Indore. The company raises loan from a bank having Head at Office at Mumbai against hypothecation of machinery. The charge will be registered with the ROC.

Option A. Delhi.

Option B. Jaipur.

Option C. Indore.

Option D. Mumbai.

The correct answer is Option B. Jaipur.

KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

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KYC (Know Your Customer) 30 MCQs on KYC Guidelines (Part 2) for Bank Promotion Exams

KYC stands for know your customer. It was introduced by Reserve Bank of India in 2004. As per KYC guidelines, bank have to do Due diligence regarding identification of customers, types & extent of their transactions depending upon their profession / business and in monitoring them so that illegal transactions are checked.

KYC (Know Your Customer) is a very important topic from internal Bank promotion exams point of view. Every year 1 to 3 questions are there in the internal bank promotion exams question paper depending on the cadre. You may expect same number of questions this year also. We have prepared some very important questions from the mentioned topic for your guidance and studies. Questions are also followed by the answers so that you develop an excellent understanding of the topic before entering the examination hall. We will continue this series of question on KYC in parts. The first part has 30 questions. All the best.

31. Scheduled Commercial Banks, while extending the 'At par' cheque Facility to Cooperative Banks/Regional Rural Banks have advised them to utilize this facility only for.

Option A. their own use.

Option B. their account holders who are KYC complied and all transactions of Rs. 50, 000 or more should be by debit to the customer's account.

Option C. 'Walk-in customers ' against cash for less than Rs. 50, 0o0 per individual.

Option D. all above.

The correct answer is Option D. All above.

32. In compliance with all KYC/AML/CFT guidelines, while issuing 'at par' cheques, banks should ensure that all 'at par' cheques issued by them are crossed.

Option A. Not Transferable.

Option B. ‘Account Payee' if amount is Rs. 50, 000 or more.

Option C. ‘Account Payee' irrespective of the amount.

Option D. Not Negotiable.

The correct answer is Option C. ‘Account Payee' irrespective of the amount.

33. The term FIU-IND stands for.

Option A. Funds Investment Unit-India.

Option B. Financial Intelligence Unit-India.

Option C. Financial Information Unit-India.

Option D. Fiscal Intelligence Unit-India.

The correct answer is Option B. Financial Intelligence Unit-India.

34. As per the guidelines stated under the Unlawful Activities (Prevention) Act, which of the following is not a Regulatory body and is not entitled to appoint a UAPA nodal officer.

Option A. Ministry of External Affairs .

Option B. Department of Economic Affairs.

Option C. Ministry of Law and Justice.

Option D. FIU-IND.

The correct answer is Option C. Ministry of Law and Justice.

35. the customer identification along with photograph should be done at least once in ………. years if he is high risk customer.

Option A. 2 years.

Option B. 3 years.

Option C. 5 years.

Option D. 8 years.

The correct answer is Option A. 2 years.

36. The term FATF under the Prevention of Money Laundering Act refers to-

Option A. Financial Action Task Force.

Option B. Financial Advisory Task Force.

Option C. Fiscal action task force.

Option D. Fiscal Amendment Task Force.

The correct answer is Option A. Financial Action Task Force.

37. As per RBI guidelines, Banks are advised not to enter into a correspondent relationship with a., which is incorporated in a country where it has no physical presence and is unaffiliated to any regulated financial group.

Option A. Foreign bank.

Option B. Shell bank.

Option C. Respondent bank.

Option D. cooperative bank

The correct answer is Option B. Shell bank.

38. As per the amendments to PML Rules, every reporting entity is required to maintain the record of all transactions Including the record of all cross-border wire transfers. of more than or its equivalent in foreign currency, where either the origin or destination of the Fund is in India.

Option A. Rs. 2 lakh.

Option B. Rs. 3lakh.

Option C. Rs. 5lakh.

Option D. Rs. 7lakh.

The correct answer is Option C. Rs. 5lakh.

39. As per RBI guidelines, in case of domestic wire transfer if a bank has reason to believe that a customer is intentionally structuring wire transfer to below to Several beneficiaries so as to avoid reporting or monitoring, the bank must insist on complete customer Identification before executing the transfer.'

Option A. Rs. 25,000.

Option B. Rs. 50,000.

Option C. Rs. 75, 000.

Option D. Rs. 1,00,000.

The correct answer is Option B. Rs. 50,000.

40. As per Prevention of Money Laundering Act, 2002, the ordering bank must retain the originator information at least for a period of

Option A. 12 years.

Option B. 10 years.

Option C. 7 years.

Option D. 5 years.

The correct answer is Option B. 10 years.

KYC (Know Your Customer) 30 MCQs on KYC Guidelines Part 1

41. As per Prevention of Money Laundering Act, 2002, the receiving intermediary bank must keep a record of originator information accompanying a cross-border wire transfer received from the ordering bank at least for-

Option A. 2 years.

Option B. 3 years.

Option C. 5 years.

Option D. 10 years.

The correct answer is Option D. 10 years.

42. Under what circumstances can the beneficiary bank restrict or even terminate its business relationship with the ordering bank?

Option A. If the ordering bank is a foreign bank.

Option B. If the ordering bank effects a transfer that exceeds Rs. 50, 000.

Option C. If the ordering bank fails to provide information on the remitter.

Option D. All above.

The correct answer is Option C. If the ordering bank fails to provide information on the remitter.

43. What are the roles and responsibilities of a 'principal Officer' appointed by the bank under KYC/AML/CFT guidelines?

Option A. Maintains close liaison with institutions involved in the fight of terrorism.

Option B. Acts independently. And reports directly to the senior management or to the Board of Directors.

Option C. Oversees and ensures overall compliance with regulatory guidelines on KYC/AML/CFT issued from time to time and obligations under the PMLA 2002, rules and regulations made thereunder, as amended from time to time and Responsible for timely submission of CTR, STR and reporting of counterfeit notes to FIU-IND.

Option D. All above.

The correct answer is Option D. All above.

44. To ensure compliance with the obligations under Section 13 of the Prevention of Money Laundering (Amendment) Act, 2012, banks are advised to nominate a Director on their Boards as

Option A. Chief Director.

Option B. Principal Officer.

Option C. Designated Director.

Option D. Director In-charge.

The correct answer is Option C. Designated Director.

45. Government of India, Ministry of Finance, Department of Revenue, has notified the Rules under the prevention of Money Laundering Act (PMLA), 2002 via a notification in the Gazette of India. The provisions of PMLA, 2002 with the said rules came into effect from-

Option A. July 2, 2006.

Option B. July 1, 2005.

Option C. July 1, 2006.

Option D. July 2, 2005.

The correct answer is Option B. July 1, 2005.

46. Banks should ensure that records pertaining to the identification of the customer and his address obtained while opening the account and during the course of business relationship are properly preserved for at least after the business relationship is ended.

Option A. 12 years.

Option B. 5 years.

Option C. 10 years.

Option D. 12 years.

The correct answer is Option C. 10 years.

47. As under PMLA Rules, the abbreviation NTR stands for-

Option A. Non-Traditional Revenue.

Option B. Non-profit organization Transaction Report.

Option C. New Transaction Report.

Option D. Net Time Reference.

The correct answer is Option B. Non-profit organization Transaction Report.

48. As per PM LA Rules, banks should maintain proper record of all transactions involving receipts by non-profit organizations of value of Rs. ………………. or more in foreign currency'.

Option A. 20 lakh.

Option B. 10 lakh.

Option C. 5 lakh.

Option D. 50 lakh.

The correct answer is Option B. 10 lakh.

49. The Cash Transaction Report (CTR) for each month should be submitted to FIU-IND by----of the succeeding month.

Option A. 5th.

Option B. 15th.

Option C. 7th.

Option D. 10th.

The correct answer is Option B. 15th.

50. While filing CTR, details of individual transactions below Rs. ---need not be furnished.

Option A. 1,00,000.

Option B. 20,000.

Option C. 50,000.

Option D. 30,000.

The correct answer is Option C. 50,000.

51. KYC Directions have been issued by RBI under provisions of

Option A. Section 42 of RBI Act, 1934.

Option B. Section 35A of RBI Act, 1934.

Option C. Section 35 A of Banking Regulation Act of 1949.

Option D. Section 24 of Banking Regulation Act of 1949.

The correct answer is Option C. Section 35 A of Banking Regulation Act of 1949.

52. The main objective of KYC Directions is to.

Option A. prevent banking companies from being used by criminal elements for money laundering activities.

Option B. enable banks to know and understand about their customers and their financial dealings in a better way.

Option C. combating financing of terrorism.

Option D. only Option A. and Option C. above.

The correct answer is Option D. only Option A. and Option C. above.

53. As per KYC Directions of RBI, Banks should ensure that any remittance of funds by way of demand draft, mail / telegraphic transfer or any other mode and issue of travellers’ cheques for value of……….is affected by debit to the customer’s account or against cheques and not against cash payment.

Option A. Rs. 25,000 and above.

Option B. Rs. 50,000 and above.

Option C. Rs. 1,00,000 and above.

Option D. above R. 1 lakh.

The correct answer is Option B. Rs. 50,000 and above.

54. As per current KYC Directions of RBI banks are required to maintain proper record of cash transactions of.

Option A. deposit of Rs. 10 lakh and above.

Option B. withdrawal of Rs. 10 lakh and above.

Option C. deposit and withdrawal of Rs. 10 lakh and above.

Option D. deposit and withdrawal of over Rs. 10 lakhs.

The correct answer is Option C. deposit and withdrawal of Rs. 10 lakh and above.

55. Which of the following document (s) cannot be accepted as documentary evidence of Proof of identity of an individual willing to open an account with the bank as per the latest KYC Directions of RBI?

Option A. Driving license.

Option B. PAN card.

Option C. voter ‘s Identity card.

Option D. Ration card.

The correct answer is Option D. Ration card.

56. As per the latest instructions of RBI, with the objective of financial inclusion for opening small accounts, banks need to seek only a photograph of the account holder and self-certification of address. outstanding balance in these account at any time will not exceed Rs. 50, 000 and total credit transactions not exceeding Rs. 1,00,000 per year and withdrawals including other debits per month not exceeding.

Option A. Rs. 25,000.

Option B. Rs. 5000.

Option C. Rs. 10000.

Option D. Rs. 3000.

The correct answer is Option C. Rs. 10000.

57. Shri P. K. Sharma, an old man of 65 years. age is living with his son in Noida. He has no independent proof of his residence. He has approached your branch for opening his savings account. As per RBI ‘s latest instructions, we can open his account by.

Option A. waiving proof of residence.

Option B. obtaining utility bill of his son with a declaration from his son that he is staying with him.

Option C. requesting him to restrict his balance within Rs. 50,000.

Option D. both Option A. and Option C. above.

The correct answer is Option B. obtaining utility bill of his son with a declaration from his son that he is staying with him.

Multiple Choice Questions including Recalled Questions for Bank Promotion Exams (SET 2 25 Questions)

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Multiple Choice Questions including Recalled Questions for Bank Promotion Exams

1. SLR is defined in which section and act.

Option A. 42 of RBI Act.

Option B. 24 of Banking Regulation Act.

Option C. 42 of Banking Regulation Act.

Option D. 24 of RBI Act.

The correct answer is option B. 24 of Banking Regulation Act.

2. Safe Custody is defined in which act.

Option A. Indemnity Act.

Option B. SARFAESI Act.

Option C. Indian Contract Act.

Option D. Indian Property Act.

The correct answer is option C. Indian Contract Act.

3. What is the priority sector Target for agriculture?

Option A. 28% of ANBC.

Option B. 40% of ANBC.

Option C. 10% of ANBC.

Option D. 18% of ANBC.

The correct answer is option D. 18% of ANBC.

4. Guarantor’s right on payment of debt is called as.

Option A. Right of appropriation.

Option B. Right of Subrogation.

The correct answer is option B. Right of Subrogation.

5. What is the time duration for KYC updation for medium risk customers.

Option A. Once in 2 years.

Option B. Once in 10 years.

Option C. Once in 8 years.

Option D. Once in 5 years.

The correct answer is option C. Once in 8 years.

6. What is Breakeven point?

Option A. When profit is there.

Option B. No profit no loss.

Option C. when loss is there.

The correct answer is option B. No profit no loss.

7. What is the full form of CFT?

Option A. Combating Financing of Terrorism.

Option B. Combating Freedom of Terrorism.

Option C. Creating Financing of Terrorism.

Option D. Closed Financing of Terrorism.

The correct answer is option A. Combating Financing of Terrorism.

8. What is the Relation between bank and customer in case of standing instruction.

Option A. Creditor and debtor.

Option B. Debtor and creditor.

Option C. Agent and Principal.

Option D. Lessor and lessee.

The correct answer is option C. Agent and Principal.

9. what is the Limitation of execution of decree?

Option A. 13 years.

Option B. 30 years.

Option C. 16 years.

Option D. 12 years.

The correct answer is option D. 12 years.

10. What is the full form of LEI?

Option A. Loan Entity Identifier.

Option B. Legal Enterprise Identifier.

Option C. Legal Entity Industry.

Option D. Legal Entity Identifier.

The correct answer is option D. Legal Entity Identifier.

11. Nodal agency for PMEGP that is Prime Minister's Employment Generation Programme is Khadi and Village Industries Commission (KVIC).

Khadi and Village Industries Commission (KVIC) is a statutory organization under the administrative control of the Ministry of MSME as the single nodal agency at the National level.

12. E-way bill generated on the GST portal for the movement of goods is must if consignment value is: More than Rs. 50000.

Option A. More than Rs. 20000.

Option B. More than Rs. 25000.

Option C. More than Rs. 50000.

Option D. More than Rs. 100000.

The correct answer is option C. More than Rs. 50000.

13. If SLR is increased by RBI, what will be the impact on liquidity?

Option A. Liquidity remains same.

Option B. Liquidity reduces.

Option C. Liquidity increases.

The correct answer is option B. Liquidity reduces.

If the SLR increases, it restricts the bank's lending capacity and helps in controlling the inflation by absorbing the liquidity from the market. Consequently, banks will have less money available to lend, and they will charge higher interest rates on loans to maintain their profit margin.

14. Capital market in India is monitored by.

Option A. SEBI.

Option B. RBI.

Option C. AMFI.

Option D. PFRDA.

The correct answer is option A. SEBI.

35 MCQs Types of Customers and Accounts (Part 2) Bank Promotion exams (2022-23)

15. In USSD- D stand for.

Option A. Data.

Option B. Device.

Option C. Deposit.

Option D. Debit.

The correct answer is option A. Data.

16. What is capital adequacy ratio and formula for Capital adequacy ratio?

Definition: Capital Adequacy Ratio (CAR) is the ratio of a bank's capital in relation to its risk weighted assets and current liabilities. It is decided by RBI to prevent commercial banks from taking excess leverage and becoming insolvent in the process.

As per RBI, Banks shall maintain a minimum capital to risk weighted assets ratio of 9%.

Formula for Capital Adequacy Ration is. Capital divided by Risk weighted Assets.

17. What is the minimum amount for RTGS transactions?

Option A. Rupees 100.

Option B. Rupees 2 lakh.

Option C. Rupees 1 lakh.

Option D. Rupees 5 lakh.

The correct answer is option B. Rupees 2 lakh.

18. What is the Maximum limit of NEFT?

Option A. Rupees 10 lakhs.

Option B. No limit.

Option C. Rupees 5 lakhs.

Option D. Rupees 50 lakhs.

The correct answer is option B. No limit.

19. What is the full form of IFSC?

Option A. Indian Financial System code.

Option B. Indian Finance Systematic code.

Option C. Indian Financial System corporation.

Option D. Indian Financial System committee.

The correct answer is option A. Indian Financial System code.

20. What is Vostro Account?

Option A. Account of an Indian bank with a foreign bank in India.

Option B. Account of a foreign bank with another foreign bank in India.

Option C. Account of a foreign correspondent bank with a bank in India.

Option D. Account of an Individual with a foreign bank in India.

The correct answer is option C. Account of a foreign correspondent bank with a bank in India.

21. What is the number of members JOINT LIABILITY GROUP?

Option A. 15 to 20.

Option B. 10 to 20.

Option C. 5 to 8.

Option D. 4 to 10.

The correct answer is option D. 4 to 10.

22. What is the relation between a banker and customer in “DEPOSIT OF CASH IN BANK FOR SPECIFIC PURPOSE”?

Option A. Debtor and Creditor.

Option B. Trustee and Beneficiary.

Option C. Creditor and Debtor.

Option D. Lessor and Lessee.

The correct answer is option B. Trustee and Beneficiary.

23. Protection to a banker regarding material alteration is given under which section of Negotiable Instruments Act?

Option A. Section 79 of N I Act.

Option B. Section 69 of N I Act.

Option C. Section 89 of N I Act.

Option D. Section 85 of N I Act.

The correct answer is option C. Section 89 of N I Act.

24. What is the validity period of KCC?

Option A. 1 years.

Option B. 5 years.

Option C. 4 years.

Option D. 3 years.

The correct answer is option B. 5 years.

25. Who decide interest rate on saving deposit: Bank themselves not RBI.

Option A. RBI.

Option B. Bank themselves.

Option C. IBA.

Option D. Finance Ministry.

The correct answer is option B. Bank themselves.

TYPES OF CHARGES, SECURITIES & DOCUMENTATION MCQs for Bank promotion Exams Part 3

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TYPES OF CHARGES, SECURITIES & DOCUMENTATION is a very important topic from internal Bank promotion exams point of view. Every year 1 to 5 questions are asked in the internal bank promotion exams question paper depending on the cadre. You may expect same number of questions this year also. We have prepared some very important questions from the mentioned topic for your guidance and studies. Questions are also followed by the answers so that you develop an excellent understanding of the topic before entering the examination hall. Let us discuss some more multiple choice questions related to the topic.

61. Mode of charging securities by Assignment is prescribed in

A. Indian Contract Act, 1872

B. RBI Act, 1934

C. Transfer of property Act, 1882

D. B R Act, 1949

The correct answer is C. Transfer of property Act, 1882

62. Which of the following statements is/are not true about hypothecation of stocks?

A. Borrower can sell the goods hypothecated and substitute the same by new stocks

B. Borrower takes undertaking to hand over the possession of security when asked by the bank

C. Borrower holds the hypothecated goods as a trustee for the bank

D. None of these

The correct answer is D. None of these

63. The charge by way of hypothecation is

A. a floating charge

B. fixed charge

C. innocuous charge

D. running charge

The correct answer is A. a floating charge

64. In the context of bank lending, floating charge stands for:

A. charge created on any goods that can float on water

B. charge created on sailing ships or vessels

C. a charge not on any particular item but fluctuating stock of the borrower

D. either B. or C. above

The correct answer is C. a charge not on any particular item but fluctuating stock of the borrower

65. In case a loan is granted by more than one bank by creating pari passu charge on the same security it means

A. bank, which had given loan earlier, will have priority over the security

B. all banks will share the sale proceeds equally on default by borrower

C. all banks will have charge on the security in proportion to their outstanding advance

D. a charge which is not required to be registered with Registrar of companies

The correct answer is C. all banks will have charge on the security in proportion to their outstanding advance

66. When hypothecation is converted to pledge, the creditor (bank) gets the rights of a

A. pledgee

B. owner

C. hypothecate

D. both A.& B.

The correct answer is A. pledgee

67. In case, the borrower who had pledged the goods as security does not repay the loan, the bank as a pledgee may take which of the following actions under Section 176 of the Indian Contract Act, 1872?

A. bring a suit against the pledgor

B. retain the pledged goods as a collateral security

C. sell the goods pledged after giving the pledgor reasonable notice of sale

D. both A. & B.

The correct answer is C. sell the goods pledged after giving the pledgor reasonable notice of sale

68. A charge on book debts of the borrower is normally created by:

A. Hypothecation

B. Pledge

C. Mortgage

D. lien

The correct answer is A. Hypothecation

69. The charge on book debts can be created by way of

A. Pledge

B. Assignment

C. Hypothecation

D. either B. or C. above

The correct answer is A. Hypothecation

70. who of the following is not eligible to raise a loan from the bank?

A. Illiterate person

B. Blind person

C. Married women.

D. None of these

The correct answer is D. None of these

71. In case of loan to an HUF, the documents should be got signed from

A. only Karta as he is authorized to borrow and charge HUF property

B. Karta and all co parceners

C. Karta and major co parceners

D. Karta and major coparceners and the guardians of minor coparceners

The correct answer is C. Karta and major co parceners

72. which of the following is the most appropriate statement regarding loan to a partnership firm?

A. it should be seen that the firm is registered one

B. the firm may be registered or unregistered

C. while it is preferable to finance registered firms, unregistered firms can be legally financed

D. if the firm is not registered, bank will not be able to recover the loan from the firm

The correct answer is C. while it is preferable to finance registered firms, unregistered firms can be legally financed

73. which of the following should be ensured while granting term loan to a limited company?

A. the object for which loan is being given is as stated in Memorandum of Association

B. There is a board resolution authorizing certain officials or directors to execute loan documents

C. The loan being raised is within the borrowing powers mentioned in Articles of Association

D. All of these

The correct answer is D. All of these

74. The borrowing powers of directors are contained

A. certificate of incorporation

B. articles of association

C. memorandum of association

D. board resolution

The correct answer is B. articles of association

75. The common seal of the company should be affixed on the loan documents in the presence of

A. company secretary of the company

B. Managing Director of the company

C. officials who have been authorized by board of directors in this regard

D. officials who have been authorized by shareholders in the general body meeting

The correct answer is C. officials who have been authorized by board of directors in this regard

76. Mr. Amar has been sanctioned a loan of Rs. 10 lakh but before execution of documents, he had to go abroad due to certain reasons. He executes a power of attorney in favour of his minor son

A. Request cannot be acceded to as minor is incompetent to enter into an agreement.

B. Request cannot be acceded to as a power of Attorney cannot execute the documents

C. Bank may consider accepting request of borrower as minor is acting as an agent and his acts are binding upon the principal borrower.

D. The request may be considered provided minor is more than 14 years old

The correct answer is C. Bank may consider accepting request of borrower as minor is acting as an agent and his acts are binding upon the principal borrower.

77. What is the full form of SHCIL?

A. Share Holding Corporation of India Limited

B. Stock Holding Corporation of India Limited

C. Stock Holding Committee of India Limited

D. Share Holding Committee of India Limited

The correct answer is B. Stock Holding Corporation of India Limited

78. Registered office of SHCIL is in

A. Delhi

B. Chennai

C. Bengaluru

D. Mumbai

The correct answer is D. Mumbai

79. On which of the following documents stamp duty is levied as per rates prescribed by state government?

A. Promissory note

B. Bill of exchange

C. insurance policy

D. Power of Attorney

The correct answer is D. Power of Attorney

80. On which of the following documents stamp duty is levied as per rates prescribed by central government

A. Hypothecation agreement

B. Mortgage deed

C. Indemnity Bond

D. None of these

The correct answer is D. None of these

35 MCQs Types of Customers and Accounts (Part 2) Bank Promotion exams (2022-23)

81. Summary suit can be filed for money decree on the strength of those documents where there is a prima facie evidence of a defendant’s liability. Such documents include

A. promissory note

B. bill of exchange

C. cheque

D. all above

The correct answer is D. all above

82. Documents which require stamping should be stamped

A. before filing a suit

B. before execution

C. at the time of execution

D. either B. or C. above

The correct answer is D. either B. or C. above

83. A promissory note which is payable otherwise than on demand attracts

A. stamp duty of 25 paisa

B. stamp duty of Re. 1/-

C. same stamp duty as a bill of exchange of like amount and tenor payable otherwise than payable on demand

D. stamping of Rs. 5 only

The correct answer is C. same stamp duty as a bill of exchange of like amount and tenor payable otherwise than on demand

84. Which of the following documents, in the event of their being unstamped or under stamped cannot be admitted in evidence in a court of law even after paying penalty as per laid down procedure?

A. Letter of credit

B. Letter of hypothecation/pledge

C. DP note

D. none of these

The correct answer is D. none of these

85. If a document is unstamped or under-stamped, what can be done to make it admissible?

A. The document will not be admissible as evidence in the court of law

B. The document can be admitted in evidence on payment of Penalty of ten times the deficit

C. The document can be admitted by on payment of deficit amount along with a penalty which is minimum Rs. 5 and maximum ten times the deficit amount.

D. either A. or C. as per discretion of the collector of stamps

The correct answer is C. The document can be admitted by on payment of deficit amount along with a penalty which is minimum Rs. 5 and maximum ten times the deficit amount.

86. Which of the following is not true regarding stamp duty on a demand promissory note?

A. Amount of loan upto Rs. 250: stamp duty 5 paise

B. Amount of loan more than Rs. 250 but upto to Rs. 1000: Stamp duty 10 paise

C. Amount of loan more than Rs. 1000: stamp duty 15 paise

D. None of these

The correct answer is D. None of these

Part 2 : TYPES OF CHARGES, SECURITIES & DOCUMENTATION With Multiple Choice Questions and answers (MCQs) for Bank Promotion Exams

87. A Promissory note/bill of exchange executed abroad should be stamped by its first holder in India

A. within 3 months of its receipt in India

B. within 3 months of its acceptance, payment or negotiation

C. before presenting the same for acceptance, payment or negotiation

D. any of these, whichever is later

The correct answer is C. before presenting the same for acceptance, payment or negotiation

88. A Power of Attorney executed outside India is required to be stamped as per Indian stamp law within months of its receipt in India.

A. 1

B. 2

C. 3

D. 4

The correct answer is C. 3

89. Which of the following documents is/are not required to be stamped?

A. Demand Promissory Note

B. Demand Bill of Exchange

C. Usance Promissory Note

D. usance Bill of exchange

The correct answer is B. Demand Bill of Exchange

90. Assuming that stamp duty rate on an agreement executed in Delhi is Rs. 10/-, in Lucknow Rs. 100, in Patna Rs. 50, and in Jammu Rs. 20/-. choose the most appropriate statement (s) relating to stamp duty on an agreement executed first in Delhi by partner A, next in Lucknow by partner B, then in Patna by partner C and finally in Jammu by partner D.

A. Stamp duty of Rs. 100 will be paid in Delhi

B. Stamp duty of Rs. 10 will be paid in Delhi, Rs. 100 in Lucknow, Rs. 50 in Patna & Rs. 20 in Jammu

C. Stamp duty of Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow and Rs. 20 in Jammu

D. Stamp duty of Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow, Rs. 40 in Patna

The correct answer is C. Stamp duty of Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow and Rs. 20 in Jammu