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Ref.: COM/OB/ 69 /2006-09 1st December, 2008
All Units
Sub: Study Material published by our West Bengal Unit for Inter-Scale & Clerical Cadre to Officer Cadre Promotion Written Test Examinations-2008
We are very happy to inform you that our West Bengal Unit has compiled Study Material for the benefit of their comrades appearing at written test examinations to be held for inter-scale promotions as well as for promotion from Clerical to Officer Cadre. As our West Bengal Unit desires that the said study material should benefit all our comrades across the country, they have requested us to upload the same in the website of our Federation. Accordingly, the study material is placed in our website to enable our comrades as well as friends in clerical cadre to benefit & update their knowledge for success in the forthcoming written tests.
We request you to advise all our comrades and also friends in clerical cadre in your state unit to download the study material so that they are able to extract maximum benefit from the same for their written tests.
We take this opportunity to congratulate our West Bengal Unit for taking much pain for the preparation of such an excellent study material.
In case of any query or suggestion, please advise our comrades to send their views to the following e-mail address: aoucb_wb@yahoo.co.in
We extend our good wishes to our comrades for success in promotional tests and interview.
With greetings.
S Roy Choudhury General Secretary
Contents:------ Page1) Question Bank-I ( Risk Management/LoanPolicy ) 1-13 ( Multiple Choice Questions) 2) Question Bank-II (Assorted Questions-Answers) 13-18 3) Question Bank-III ( Assorted Multiple Choice Questions) 18-26 4) Question Bank-IV ( Assorted Multiple Choice Questions) 26-35 5) Question Bank-V ( Assorted Multiple Choice Questions) 35-42 6) Question Bank-VI ( Assorted Multiple Choice Questions) 42-50 7) Ban Circulars’ Snippets & Up-dates 50-59
--------------------------------------------------------------------------------------------------- Question Bank-I (Risk Management /Loan Policy)
1) Under which Pillar of RBI’S New Capital Adequacy framework (Basel-II guidelines), minimum 9% capital adequacy for credit risk, market risk and operational risk has been prescribed ? a) Pillar-I b) Pillar-II c) Pillar-III d) None.
2) Pillar-II of RBI’S New Capital Adequacy framework(Basel-II guidelines) prescribes that a) Banks are required to adhere to market discipline by furnishing a set of disclosure requirements which will enable market participants to assess key pieces of information on the scope of application, capital, risk exposure, risk assessment processes, and hence the capital adequacy of the institution. b) Banks will come under Supervisory Review Process of RBI in regard to efficacy of their Risk Management system and will have to adhere to ‘Internal Capital Adequacy Assessment Process’ to capture risks such as liquidity risks, reputational risks etc. other than those prescribed under Pillar-I to convince RBI that adequate capital is maintained for various risks they are exposed to. c) Banks are required to maintain minimum 9% capital adequacy for credit risk, market risk and operational risk. d) NOA.
3) Pillar-III of RBI’S New Capital Adequacy framework(Basel-II guidelines) prescribes that a) Banks are required to adhere to market discipline by furnishing a set of disclosure requirements which will enable market participants to assess key pieces of information on the scope of application, capital, risk exposure, risk assessment processes, and hence the capital adequacy of the institution. b) Banks will come under Supervisory Review Process of RBI in regard to efficacy of their Risk Management system and will have to adhere to ‘Internal Capital Adequacy Assessment Process’ to capture risks such as liquidity risks, reputational risks etc. other than those prescribed under Pillar-I to convince RBI that adequate capital is maintained for various risks they are exposed to. c) Banks are required to maintain minimum 9% capital adequacy for credit risk, market risk and operational risk. d) NOA.
4) As per RBI’S New Capital Adequacy framework(Basel-II guidelines), the minimum capital requirement is subject to a ‘prudential floor’ which shall be the higher of i) Minimum capital under Basel-II requirement. ii) A specified percent of the minimum capital under Basel-I requirement for credit & market risks. For March 2009, what is the specified percent of the minimum capital under Basel-I requirement? a) 80% b) 70% c) 90% d)100%.
5) Revaluation reserves are considered as a discount while determining their value for inclusion in Tier-II capital. What is that discount? a) 40% b) 50% c) 60% d) 55%
6) ‘General provisions on Standard assets’, ‘Floating provisions’, ‘Provisions held for country exposures’ and ‘Investment Reserve account’ are included in Tier—II Capital but subject to a maximum limit of a specified percent of total risk weighted asset. What is that percent? a) 1.50% b)1.25% c) 1.75% d) 2.00%
7) Which one of the following is not correct? a) Innovative Perpetual Debt Instrument (IPDI) in excess of 15% of Tier-I Capital may be included under Tier-II Capital. b) The outstanding amount of Perpetual Non-cumulative preference Shares (PNCPS) along with Innovative Perpetual Debt Instrument (IPDI) shall not exceed 40% of total Tier-I Capital at any point of time. c) Upper Tier-II instruments along with other components of Tier-II capital shall not exceed 100% of Tier-I Capital. d) ) Innovative Perpetual Debt Instrument (IPDI) in excess of 25% of Tier-I Capital may be included under Tier-II Capital.
8) Which one of the following is incorrect? a) For computation of Tier-I Capital, intangible assets and losses in the current period and those brought forward from previous year, should be deducted from Tier-I Capital b) Any gain or loss arising at the time of securitization of standard assets, if recognized, should be deducted from Tier-I Capital. c) Securitization exposures shall be deducted from Regulatory Capital and the deduction must be made 50% from Tier-I and 50% from Tier-II Capital d) All the above are incorrect.
9) The methods used for computation of capital for credit risk under Basel-II are a) Standardized Approach b) Internal Rating Based Approach-Foundation c) Internal Rating Based Approach-Advanced d) All the above.
10) UCO Bank will implement Standardized approach for computation of capital for credit risk under Basel-II as on a) 31.03.2009 b) 31.03.2010 c) Already implemented on 31.03.2008. d) Not known.
11) The methods used for computation of capital for operational risk under Basel-II are a) Basic Indicator Approach b) Standardized Approach c) Advanced Measurement Approach d) All the above.
12) UCO Bank will implement Basic Indicator approach for computation of capital for Operational risk under Basel-II as on a) 31.03.2009 b) 31.03.2010 c) Already implemented on 31.03.2008. d) Not known.
13) The methods used for computation of capital for market risk under Basel-II are a) Standardized Method under which two methods are there- ‘Maturity Method’ and ‘Duration Method’ b) Internal Risk Mangement Models Method c) Advanced Measurement Approach d) (a) & (b).
14) Which of the following methods has been adopted by UCO Bank for computation of capital for market risk under Basel-II a) Standardized Maturity Method b) Standardized Duration Method c) Internal Risk Management Models Method d) Advanced Measurement Approach
15) Credit Risk is defined as: a) Probability of default by the counter-party. b) Probability of worsening of credit quality of a borrowal account. c) Either (a ) or (b ) d) Both (a ) and ( b).
16)Operational risk is defined as: a)Risk of loss resulting from inadequate & failed internal processes. b)Risk of loss resulting from mistakes or frauds committed by the employees. c)Risk of loss resulting from computer hacking d)All (a),(b) & (c).
17)Which one of the following approaches has not been prescribed for calculation of Capital charge for Credit risk? a)Foundation Internal Ratings Based (IRB) approach b)Advanced Measurement approach c)Advanced Internal Ratings Based (IRB) approach. d)Standardized approach.
18)In which of the following Credit Risk Mitigants, hair-cut adjustment is necessary? a)Guarantee b)On balance sheet netting c)Financial collaterals d)(a) and (b).
19)The claims on ECGC will attract a risk weight of a) 50% b) 30% c) 20% d) 100%
20)An SSI loan account is guaranteed by CGTSI. The credit risk weight applicable to this account will be a) 30% b)50% c)60% d)0%
21)The ratings of which of the following domestic rating agencies , the banks in India may not use for the purposes of risk weighting their claims for capital adequacy purposes. a)CARE b)CRISIL c)FITCH d)ICRA.
22)Credit conversion factor for “ other commitments(e.g. formal standby facilities and credit lines) with an original maturity of one year” is a)50% b)20% c)100% d)None of the above.
23)What will be the ‘Level-3’ loss event type classification in case of the following loss event: “ Improper parameter setting in computerized branch resulted in less charging of interest.” a) System mis-operation b) Mis-performance. c) Software problem d) Loading error.
24)To which type of ‘Business Line’ classification, the ‘Currency Chest’ operations belong to? a) Corporate Finance b) Payment & Settlement c) Agency Services d) Execution, Delivery & Process management.
25)Probability of default is 5% , recovery rate is 90% in case of a particular credit portfolio of a bank. What will be the expected loss if the exposure at default is Rs1000.00 Crore for that particular portfolio of the bank? a)Rs10.00 Crore. b)Rs20.00 Crore. C)Rs15.00 Crore. d)Rs5.00 Crore.
26)DSB-IV Return on Asset quality, Section-7: Exposure to sensitive sectors What is the periodicity of this return? a) monthly b) quarterly c) half-yearly d) yearly.
27)Which one of the following does not fall under ‘Sensitive sectors’ in regard to DSB-IV return , Section 7, Exposure to sensitive sectors? a) Commodities b)Real Estate c)Credit Cards d)Capital market.
28)How many maturity buckets up to one year are there in “ Statement of maturity pattern of deposits and loans & Advances (BS-26)”? a) 4 b)6 c)7 d)5.
29)In BS-28(revised), aggregate of loans & advances more than Rs25.00 lac treated as pooled assets are reported. Which one of the following is not treated as pooled asset? a)UCO real estate b)UCO mortgage c)UCO Shelter d)(b) & (c).
30) In regard to assigning risk weight to NPAs, which one of the following is not true? a)150% risk weight when specific provisions are less than 20% of the outstanding amount of the NPA. b)100% risk weight when specific provisions are atleast 20% of the outstanding amount of the NPA c)50% risk weight when specific provisions are more than 50% of the outstanding amount of the NPA d)50% risk weight when specific provisions are atleast 50% of the outstanding amount of the NPA
31)Loans up to Rs1.00 lac against gold & silver ornaments will attract a risk weight of a)20% b)30% c)50% d)75%.
32)Exposure to non-scheduled banks with CRAR of 8% is risk weighted as a)350% b)250% c)100% d)150%.
33) A UCO Narisakhti loan of Rs80,000/- to a state govt employee. Balance outstanding as on 30.09.2008 is Rs60,000/- . What will be the risk weighted asset?. a)Rs60,000/ b)Rs80,000/- c)Rs75,000/- d)Rs95,000/-.
34) A UCO mortgage loan of Rs8.00 lac to Mr. A, a businessman. The B/O as on 30.09.2008 is Rs6.00 lac. The exposure is covered by residential property. What will be the risk weighted asset? a)Rs6.00 lac b)Rs4.50 lac c)Rs8.00 lac d)None of the above.
35) UCO Shelter loan of Rs10.00 lac to Mr. A. The B/O as on 30.06.2007 is Rs8.00 lac. The collateral security is LIP SV of Rs2.00 lac. LTV is 65%.What will be the risk weighted asset? a)Rs3.00 lac. b)Rs6.00 lac c)Rs8.00 lac d)None of the above.
36) Renewal charges for all advance accounts to be recovered on a)31st March of every FY b)1st April of every FY c)On the date of sanction for renewal d) On the date of application for renewal.
37)In the event of enhancement of limit / ad hoc limit sanction, a) Renewal charges are taken on pro-rata basis for the remaining period of the year on the enhanced / ad-hoc sanction amount b) Renewal charges are taken for the full year on the enhanced / ad-hoc sanction amount c) Renewal charges are to be adjusted on the next FY d) NOA
38) In case of borrowers who are enjoying sanctioned limits, if Bal. O/s exceeds the excess drawings permitted as per the Loan Policy Document, Rate of interest for the over-drawings will be : a)BPLR+4% b)2% above stipulated ROI c)2% above stipulated ROI on Ad-hoc Facility d) NOA
39)Prudential exposure limit for aggregate Capital Market exposure is a)40% of Bank’s Net Worth b)25% of Bank’s Net Worth c)40% of Bank’s Capital Fund * d)25% of Bank’s Capital Fund ( *Bank’s capital fund = Tier-I + Tier-II Capital)
40)Prudential ceiling for cross holding of Capital among Banks/Financial Institutions : a)20% of Bank’s Net Worth b)10% of Bank’s Net Worth c)20% of Bank’s Capital Fund d)10% of Bank’s Capital Fund
41)The investment made by the Bank in bonds and debentures of corporate which are guaranteed by a PFI will be treated as an exposure by the Bank on : a)The PFI and not on the corporate. b)The corporate PFI and not on the PF c)Both The PFI and the corporate d)NOA
42)Prudential exposure limit on NBFC is a)10% of Capital Fund b)15% of capital fund c)15% of Capital fund In case additional 5% is on lent to Infrastructure d)20% of capital fund in case additional 5% is on lent to Infrastructure
43)Group Borrower Exposure Limit is a)15% of capital fund b)20% of Capital Fund, provided additional 5% Exposure is to Infrastructure sector c)40% of Capital Fund d)50% of Capital Fund, provided additional 10% Exposure is to Infrastructure sector
44)Single Borrower Exposure Limit is a)15% of capital fund b)20% of Capital Fund, provided additional 5% Exposure is to Infrastructure sector c)40% of Capital Fund d)50% of Capital Fund, provided additional 10% Exposure is to Infrastructure sector.
45)Single and Group Borrower Exposure Limits are calculated by : a)credit exposure (funded + non funded credit limits) b)credit exposure (funded + non funded credit limits) + investment exposures (including underwriting and similar commitments) c)credit exposure (funded + non funded credit limits) + investment exposures (not including underwriting and similar commitments) d)NOA
46) If a Second loan is sought against the property already mortgaged in case of UCO Real Estate and UCO rent. a)Prior permission of CMD is required b)Prior permission of Zonal Head is required c)Can be sanctioned by the Delegatee under whose sanctioning powers the proposal falls, and the security value is covering both the loans d)Cannot be allowed
47) When the property is charged as primary security for a loan (e.g. UCO Shelter, UCO Mortgage), the same property can be taken as collateral in the second loan, under the sanction of a) Delegatee under whose sanctioning powers the proposal falls. b) Zonal Head c) FGM d) Cannot be allowed
48)For loans under the delegated power of Zonal Office, a) Zonal Head only can sanction all loans b) Credit proposals relating to Retail segment would be sanctioned by the Executive/In-charge Retail up to his discretionary powers. c) Loans and advances under Bank’s various staff welfare schemes would be sanctioned by the Executive/In-charge Personnel Services at ZO. d) In case of loans and advances, to the members of staff, which do not fall under the staff welfare scheme, such loans and advances may be sanctioned by an executive/officer holding senior most position in the Zonal Office next to Zonal Manager. e) (b), (c), (d) above
49)CCPUs handle all credit proposals other than : a) Retail segment b) Proposals from Flagship Corporate branches c) Proposals from Mid Corporate branches d) All of the above
50)Credit Proposals received by CCPUs with full information should be cleared within : a)1 week b)2 weeks c)5 days d)NOA
51) Information Gaps, in any, in the Credit Proposals received by CCPUs sould be communicated to the originator within : a)1 week b)2 weeks c)5 days d)NOA
52)CCPU is responsible for a) Credit Reports on the borrower(s)/guarantor(s) b) Technical & Economic viability (TEV) study in case of project/ SSI/ Industry c) Valuation of securities/ collaterals d) (b) & (c) above
53)You forwarded a loan proposal to your Higher Authority who sanctioned a credit facility to M/S XYZ. After some days, M/S ABC of the same Group Company approaches you with another loan proposal which falls under your delegated power, even after considering the Group exposure norms. You will : a) Process the proposal of M/S ABC by yourself b) Place the proposal of M/S ABC to your Higher authority for consideration c) Either of the above d) None of the above
54)Bhavnani Banking Promotion School, an educational institute, approaches you for a term loan, which falls under your delegated financial power. You will a) Process and sanction the proposal by yourself b) Seek prior clearance of the Zonal Manager and sanction by yourself c) Seek prior clearance of the Field General Manager and sanction by yourself d) Exposure on Educational Institute may be taken only with the permission of CMD (or ED in his absence).
55)Prior clearance from the next higher authority is required for all cases of renewal-cum enhancement and fresh credit proposals having a) Credit Rating B- or below b) Management Rating score of 2/3rd or below of the total score under management rating c) Both of (a) or (b) d) Either of (a) or (b)
56)Where the realizable value of the securities as assessed by the Bank/ approved valuers / Reserve Bank’s Inspecting Officers, is not more than 10 per cent, ab-initio, of the outstanding exposure : a) It is called an Unsecured exposure b) It is called a Partly secured exposure c) It is called a Partly unsecured exposure d) None of the above
57)Unsecured exposure will attract the following provision a)20% for assets in Substandard Category b)100% for asses in Doubtful and Loss Category c) Both (a) & (b) d) None of (a) & (b)
58)Risk weight of claims secured by Residential Properties wherein outstanding amount is more than Rs30 lac and LTV is less than 75% a)50% b)75% c)20% d)100%
59) Single borrower exposure limit in case of oil companies who have been issued oil bonds(which do not have SLR status) from Government of India a) 15% of Capital fund b) 20% of Capital fund c) 25% of Capital fund d) 30% of Capital fund
60) Banks may consider enhancement of borrower exposure above normal ceilings with the approval of the board. What s the extent of enhancement of such exposure? a) 15% of Capital fund b) 12% of Capital fund c) 10% of Capital fund d) 5% of Capital fund
61) In regard to bank’s prudential exposure limit to single/Group/NBFC single borrowers, which one of the following is correct ? a) The ceilings do not apply to existing/additional credit facilities (including funding of interest and irregularity) granted to weak/sick industrial units under rehabilitation package. b) The ceilings do not apply to the borrowers to whom limits are allocated directly by RBI for food credit. c) The ceilings do not apply where principal and interest are fully guaranteed by the GOI. d) The ceilings do not apply to loans & advances granted against the bank’ own FDRs. e) All the above.
62) Which one of the following is a Capital market exposure? a) Direct investment in Equity shares/convertible bonds &debentures/units of equity oriented mutual funds. b) Advances against shares, bonds, debentures or other securities (taken as primary security for any purpose) or on clean basis to individuals for investment in shares (including IPOs/ESOPs)/convertible bonds &debentures/units of equity oriented mutual funds. c) Advances against collateral securities of Equity shares/convertible bonds &debentures/units of equity oriented mutual funds for any other purpose where primary security does not fully cover the advances. d) All exposures to ‘venture Capital funds. e) All the above.
63) Bank’s aggregate capital market exposure is 40% of Bank’s Net worth. Which of the following is true in respect of Prudential exposure limit for different type of Capital market exposures? a) Ceiling for exposure to capital market investment is 20% of Bank’s net worth. b) Ceiling for exposure to Stock brokers and Market makers is 15% of Bank’s net worth. c) Ceiling for exposure to Single stock broking entity including its associates and inter-connected companies is Rs50Crore. d) All the above.
64) Which one of the following is not a Capital market exposure? a) Secured and un-secured advances to Stock brokers and guarantees issued on behalf of Stock brokers and market makers including finance extended to Stock brokers for margin trading b) Loans sanctioned to Corporates against security of shares, bonds, debentures or other securities or on clean basis for meeting promoters’ contribution to the equity of new companies in anticipation of raising resources. c) Bridge loans to Companies against expected equity flows/issues. d) Underwriting commitments taken by the bank in respect of primary issue of Equity shares/convertible bonds & debentures/units of equity oriented mutual funds. e) Loans against Non-convertible bonds &debentures/debt oriented mutual dunds.
65) In case of borrowers who are enjoying sanctioned limits, if Bal. O/s exceeds the limit or DP within the powers for excess drawings as per the Loan Policy Document, Rate of interest for the over-drawings will be : a) BPLR+4% b) 2% above stipulated ROI c) 4% above stipulated ROI d) NOA
66) In regard to ROI for excess drawings, which one of the following is not true ? a) if balance O/S exceeds limit or DP without any arrangement, ROI is BPLR+4% b) if balance O/S exceeds limit or DP of the permitted Ad-hoc facility, ROI is 2% above stipulated ROI on Ad-hoc. c) if the borrower does not enjoy any regular sanctioned limits, ROI is BPLR+4%. d) if the borrower does not enjoy any regular sanctioned limits, ROI is BPLR+2%.
67) Bank’s exposure to Indian Joint ventures/ wholly owned subsidiaries abroad and step-down subsidiaries which are wholly owned by the overseas subsidiaries of Indian Companies, is limited to 20% of Bank’s Capital fund (Tier-I & Tier-II Capital) subject to fulfillment of certain conditions. Which conditions are applicable ? a) if the holding by the Indian Company in the Joint venture is more than 51%. b) Bank must have proper Credit & interest rate risk management system for taking care of such cross-border lending. c) bank will have to comply with section 25 of the BR Act, by which , the assets in India of every banking Company at the close of business on the last Friday of every quarter shall not be less than 75% of its NDTL in India. d) the resources base for such lending should be funds held in foreign currency accounts such as FCNR(B), EEFC, RFC etc e) All the above.
68) In regard to discretionary power structure for allowing dilution of security, guidelines have been given by the bank for allowing partial/full release of collateral security and / or substitution of collateral security with lower value security—Which one of the following guidelines is true ? a) It would normally be not permitted except in extreme and rare circumstances where it does not have any adverse impact from Credit risk angle b) if it is allowed, It would be allowed only by an authority one step higher than the sanctioning authority. c) For loans and advances sanctioned by Field GM/Corporate GMs and above, discretionary power will remain with the sanctioning authority itself. d) All the above.
69) Discretionary power structure for allowing further credit facilities against the security already charged to the bank has been put in place by the bank. In view of this, allowing enhancements and ad-hoc facilities by extending charge on the collateral security or allowing further loans against the residual value of property charged as collateral security in the first loan (except property charged against UCO shelter, UCO mortgage, UCO rent & UCO real estate), discretionary power lies with which of the following authority? a) Delegatee under whose sanctioning powers the proposal falls. b) Zonal Head c) FGM d) Corporate GM.
70) Which of the following returns required by HO, Risk Management, are to be submitted monthly by the branches a) Bulk deposit of Rs100 Crore and above b) Real estate exposure c) Portfolio monitoring (Annex-I) d) Statement of loans and Advances sanctioned at Sub-PLR. e) All the above.
71) BS-26 is a quarterly statement to be submitted during every closing-quarterly, half-yearly and yearly. What this statement is for ? a) computation of un-secured advance b) Rating wise distribution of credit portfolio c) statement of maturity pattern of deposits and loans & advances d) Statement of loans and Advances sanctioned at Sub-PLR e) NOA
72) In all cases of Real Estate Sector (Excluding UCO Shelter) proposal, Prior in-Principle/ Administrative Clearance has to be obtained from the competent authority and thereafter the Proposal can be processed and sanctioned as per delegated financial power by the delegatee. The discretionary powers for giving clearance are a) For credit proposal> Rs5 Crore—CMD b) For credit proposal> Rs1 Crore but<= Rs5 Crore—ED c) For credit proposal <= Rs1 Crore—FGM/CGM(Mid-corporate). d) All are correct.
73) In case of proposals sanctioned by MCB/CMD/ED, flexibilities (in terms of sanction) which do not result in the changeof overall security position in the account and/ or do not have any adverse impact from credit risk angle, can be allowed by : a) Zonal Heads and Branch Heads in Scale-VI (Deputy General Manager) and above, b) Field General Manager/Corporate General Manager (Mid-Corporate) c) Chairman & Managing Director d) Executive Director
74) ‘Hair-cuts(%)’ for exposure and collateral for a loan against NSC will be a) 0.5, 1 b) 0.5,2 c) 0,0 d) 0.5,0.5
75) ‘Hair-cuts(%)’ for exposure and collateral for a loan against RBI relief bond (having maturity more than 5 years) will be a) 0.5,4 b) 0,4 c) 0.5,0 d)1.4
76) BS-26 statement has been revised wef 31.12.2007. The revision was in the 1-14 days time bucket, which is split into a) Next day, 2-6 days, 7-14 days b) Next day, 2-7 days, 8-14 days c) 1-2 days, 3-7 days, 8-14 days d) 1-2 days, 3-6 days, 7-14 days
77) Total reporting time buckets in BS-26 are a) 7 b) 8 c)9 d)10
78) Bank has approved that “where a borrowal account with bank’s exposure of Rs----- and above gets listed in the category of ‘special watch’ and the situation so warrants , a bank officer not lower than in Scale----- may be nominated by the bank to oversee the conduct of the business and to assist the company in setting its matter on correct course.” a) 10 Crore, III b) 5 Crore, III c) 5 Ccrore, iv d) 10 Crore, IV
79) Bank’s investment in Mortgaged Backed Securities(MBS) relating to both residential and commercial real estate, should satisfy which of the following terms and conditions? a) Original loans should be transferred to Special Purpose Vehicle(SPV)/Trust with irrevocable right, title and interest on securitized loans and receivables with originator of loans to be appointed as the servicing and paying agent. b) Loans originating companies such as HFCs shall not directly or indirectly control SPV in any manner like holding share capital, appointing directors, officers, employees in SPV etc c) The loans to be securitized should have accorded an investment grade credit rating by the recognized credit rating agencies. d) The SPV or appointed Trustees to manage issue to MBS should be governed by the provisions of the Indian Trust Act,1882. e) All the above.
80)In case of all new accounts with exposure of Rs. 10 lac or more : a) 50% of processing charges are recovered at the time of delivery of Sanction Letter b) 50% of processing charge prescribed would be recovered upfront upon clearance by respective NBC, before detail processing of the proposal is taken up. c) 50% of processing charge to be recovered before first disbursement d) Pre -processing charges would be recovered in accordance with the directive of NBC. e) (b) & (d) above
81)Investment in Mortgage Backed Securities would form a part of a)Real Estate Exposure b)Housing loan exposure c)MBS exposure d)(a) or (b) as the case may be.
82)Customer Segmentation , viz, FCC, MC, Retail and SE are done on the basis of a) Limit criteria b) Turn over criteria c)Both of the above d)Either of the above
83) Mid corporate branches handle Accounts with aggregate of fund based and non-fund based limits of a) Rs.5 crores and above but below Rs.50 crores b) Rs.5 crores and above but below Rs. 60 crores c) turnover between Rs.750 crore to Rs.900 crore d) Rs.5 crores and above but below Rs.75 crores e) (b) & (c) above
84)Undrawn or partially undrawn credit facilities a) Attract capital as per Reserve Bank of India guidelines for the New Capital Adequacy Framework b) Does not Attract capital as per Reserve Bank of India guidelines for the New Capital Adequacy Framework c) Credit facility commitments that are unconditionally cancellable at any time by the Bank without prior notice or that effectively provides for automatic cancellation due to deterioration in borrower’s credit worthiness would attract a credit conversion factor “zero” and therefore, such commitments would not need any capital support d) (b) & (c) e) (a) & (c)
85) Delegated lending powers under Educational Loans of Officers under in Scale-III, II & I is a) Rs 7.50 Lac , Rs 5.00 lac & Rs 3.00 lac b) Rs 7.50 Lac , Rs 7.50 lac & Rs 4.00 lac c) Rs 10.00 Lac , Rs 7.50 lac & Rs 4.00 lac d) Rs 10.00 Lac , Rs 7.50 lac & Rs 4.50 lac e) NOA
86)For purchase of loan Assets from another Bank/financial entities : a) Only standard Assts may be considered for purchase b) Purchase of loan asset will be sanctioned at the level of MCB/CMD/ED only c) Both of the above d) NOA
87)Report through which Special Watch Category Accounts (SWR) are submitted by branches to Zonal Offices is named as : a)CMR-9 b)CMR-9A c)CMR 5 d) CMR-5A e)NOA
88) For credit limits sanctioned under the delegated powers of Field General Manager, a) the concerned Zonal Manager shall be the Competent Authority to permit disbursal b) Branches must submit PSCR [Post Sanction Compliance Report] as per format CMR-6A to their Zonal Office for seeking pre-disbursement approval c) Post-Sanction Compliance Certificate of Term of Sanction in the format CMR-6B should be submitted to the sanctioning authority i.e. Field General Manager, within one month of disbursement under advice to Zonal Office. d) (b) & (c) above e)(a), (b) & (c) above
89)As per “Fair Practices Code for Lending”, all loan application form should include : a) fees/charges, if any, payable for processing, and the amount of such fees refundable in the case of non acceptance of application, b) pre-payment options c) any other matter which effects the interest of the borrower d) In case of all categories of loans irrespective of any threshold limits, including credit card applications, the bank shall convey in writing the main reason/reasons which, in the opinion of the bank after due consideration have led to rejection of the loan applications. e) All the above.
90)While taking over accounts, which of the following conditions must be adhered to ? a) Due diligence must be completed before taking over b) Asset Classification must be “standard”, Credit Rating must be ‘A’ or better, Management rating must be 2/3rd or better c) Irrespective of quantum of credit facilities involved, have to be referred to NBC/ZNBC as the case may be for prior clearance. d) All the above e) (a)& (b) above.
91)As per Guidelines on Fair Practices Code for Lenders, a) bank must hand over a copy of the loan agreement along with a copy each of all enclosures quoted in the loan agreement b) Terms and conditions and other caveats governing credit facilities given by the Bank arrived at after negotiation with the borrower shall be in writing and shall be duly certified by the authorized Official of the Bank. c) Both of the above d) None of the above
92)For limit sanctioned at branches, in case of limits above Rs. 10 Lac, a)Branch Managers should confirm to Zonal Head about compliance of the terms of sanction before disbursal b)branches shall submit a Certificate to Zonal Office every month on consolidated basis along with CMR-1, confirming compliance of the terms of sanction c)Both the above d)None of the above
93)For all loans/advances sanctioned by Head Office (GM/ED/CMD/MCB) and Regional Offices a)branches must should submit PSCR(CMR-6A)to respective authorities and seek approval for disbursement. b)Branches will have to forward the Post-disbursement compliance certificate of terms of sanction as per format CMR-6B. c)The competent authority in this matter is GM (Credit Monitoring) for HO sanctions and Zonal Head for Zonal Office sanctions d)All the above e)None of the above
94) M/S XYD, a partnership firm, intends to open a Current Account with your branch. In their latest balance sheet, it is observed that they are borrowers of some other bank. You can a) Open the current Account, only after maintaining KYC norms b) Open the current Account, only after maintaining KYC norms and obtaining a declaration in the Account opening form that they are enjoying credit facilities with another bank c) Current Account should be marked with “Other bank’s Borrower – No O/D to be allowed.” d) Not to open the Account without obtaining the NOC from the other Bank.
95)Regional New Business committee a) screen all new credit proposals from Rs.10 lacs to Rs. 200 lacs with the exception of advance against deposits. b) In case of existing borrowers, any advance to a new unit put up by them need to be referred to RNBC, only if the proposed line of activity is different from their existing activity. c) All clearances given by the RNBC will be valid for a maximum period of 60 days only for disposal which can be resubmitted to RNBC for extension for another 60 days. d) All the above e)(a) & (c) above
96)In order to prevent use of banks’ fund by the borrowers in the capital market a) Branches must obtain an undertaking, from the borrower before disbursement of advance that the funds borrowed from the bank shall not be invested/used in capital market b) In the stock statement (CMR 14)/ statement of book debts (CMR 14 A) the borrower will now be required to certify that funds drawn from the bank have not been diverted to capital market. c) Both the above d) None of the above
97)As per loan policy documents, ‘Greenfield Projects’ are defined as : a) A totally new project started by a new company b) A totally new project started by an existing company c) An expansion project of an existing company where investment in the new project is more than 50% of the TNW of the company d) (a) or (c) above e) All of the above
98)All new credit proposals placed for sanction, should generally have a minimum internal rating of : a)A+ b)A c)B+ d)B
99)In case of Greenfield Projects, for a proposal to be sanctioned at the level of General manager and above : a) Acceptable Minimum Credit Rating is B+ b) Minimum score for management Rating is not less than 75% c) Acceptable Minimum Credit Rating is B d) Minimum score for management Rating is not less than 50% e) (c ) & (d) above
100) Which of the following loans advances are allowed as per bank’s Loan Policy documents? a) Credit to companies for buy-back of their own shares b) Finance for setting up new units consuming /producing ozone depleting substances c) Advances against bank’s own shares d) All of the above e) None of the above
101) As per bank’s Loan Policy documents, all Loan accounts, excepting mid-market accounts, will be rated, if the aggregate exposure is : a) Above Rs 1 Crore b) Above Rs 75 Lac c) Above Rs 60 Lac d) Above Rs 50 Lac e) Above Rs 25 Lac
102)Accounts with aggregate Fund based and Non-fund Based limit upto Rs 25 Lacs : a) Need not be rated b) Must be rated c) To be rated on portfolio basis d) All loans other than ‘Retail loans’ are to be rated.
103)Which of the following Loan Accounts, do have a perpetual A++ rating and need not be rated, irrespective of the exposure/limit sanctioned? a) Loans against Bank’s own term deposits b) Staff Loans c) Accounts under UCO Securities Scheme d) Gold Loans e) All of the above
104)In the Rating Nomenclature, which of the following rating, in case of Working Capital finance, Indicates, “Low degree of strength with uncertain stability over a period of one to two years.”? a)B+ b)A- c)B- d)B e)( c) & (d) above
105)In the Rating Nomenclature, which of the following rating, in case of Term/Project finance, Indicates, “Low degree of strength with uncertain stability over short to medium term”? a) B+ b) A- c) B- d) B e)( c) & (d) above
106)Which of the following statement in respect to Stock Audit in not Correct? a) B and below rated Accounts with exposures 5 Crore and above are to be subjected to Stock Audit once in six months b) B+ rated Accounts with exposures 10 Crore and above are to be subjected to Stock Audit once in a year c) A and above rated Accounts with exposures 20 Crore and above are to be subjected to Stock Audit once in a year d) For all others, sanctioning authority may authorize conduct of Stock Audit depending upon the requirements / developments in the account. e) None of the above
107)In respect to Command Area, which of the following statement is not true ? a) In case of branches upto Sacle III, one of the contact points with the borrower i.e. factory/business premises or the residence should be within 20 Kms radius b) The location of factory/business premises , residence and collateral security should be within the City/ Town/ Panchyat Samity limits c) In case of Scale IV and V branches, command area would be the city limits within which factory/business premises / residence should be located d) In case of Scale IV and V branches may accept collateral security anywhere in India e) None of the above
108)In case of valuation of Land and Building offered as security, confirmation of a second valuer should be obtained if the property value exceeds : a)25 Lac b)50 Lac c)35 Lac d)100lac e)75lac
109) In case of taking over loan Accounts from other Banks, which of the following is not true? a) Rating of the Account should at least be B+ b) Management rating should be at least 10 out of 15 c) The Account must be a Standard Asset d) None of the above e) All of the above
110)BPLR was introduced in the Bank effective from a)01.04.2004 b)01.01.2005 c)01.01.2004 d)01.04.2005
111)Who is the competent Authority to decide interest rate structure, interest rate on various product and delegation of authority to allow concessionary rate of interest in respect to all loans and Advances ? a) CMD, and in his absence, senior most ED b) New Business Committee c) GM, T&IM Department d) ALMC (Asset Liability Management Committee)
112)Penal interest is not chargeable for loans : a) Up to Rs50,000/- b) Up to Rs25000/- c) Up to Rs1lac d) No such provision
113)Prepayment Charges are not taken in case of following : a) Agricultural loans up to Rs10lac b) Other priority Sector Loans up to Rs5 Lac c) Other Term Loans with limit up to 2 Lac d) All of the above e) None of the above
114) Prepayment Charges can be waived by : a) GM (FC/MC/SE/Retail/Regions) up to 50% b) ED up to 75% c) CMD up to 100% d) None of the above e) All of the above
115)Commitment Charges in case of a fund based Credit facility is charged : a)When availment during a quarter is less than 70% of the limit sanctioned b)When availment during a month is less than 70% of the limit sanctioned c)When availment during a month is less than 50% of the limit sanctioned d)When availment during a quarter is less than 75% of the limit sanctioned
116)Commitment Charges in case of a fund based Credit facility is charged at the rate of a) 0.0833% for the month on the unutilized limit b) 0.0833% for the quarter on the unutilized limit c) 0.01% for the month on the unutilized limit d) 0.01% for the quarter on the unutilized limit
117)Which of the following general norms are not true, in case of new proposals? a) At least B+ credit rating b) Normally Minimum Current Ratio 1.33:1 but not less than 1.17:1 c) Normally maximum Debt Equity Ratio (including proposed) 3:1, but maximum 3.5:1 d) Normally Minimum promoters contribution 25% , Normally Minimum DSCR 1.5:1 e) None of the above
118)In case of NBFCs and Housing Finance companies, provided capital adequacy ratio as prescribed by RBI is maintained, a) CMD/ED may permit Debt Equity Ratio level of higher than 3:1 b) GMs at HO and GMs (Regions) may permit Debt Equity Ratio up to 7:1 c) Both of the above d) None of the above
119)Credit Risk Analysis for proposals above Rs 2lac and up to Rs25lac should comprise of sensitivity analysis with downward variation in a)5% in sales and 10% in price b)10 % in sales and 10% in price c)10 % in sales and 5% in price d)5% in sales and 5% in price
120)The RBI prescription in regard to assessment of working capital needs based on the concept of MPBF has been withdrawn since a) April 2000 b) April 1997 c) April 1998 d) April 1999
121)For Working Capital limits below Rs. 2 Crores for all industrial and other borrowers & upto Rs 5 Crores for all SSI units, following method of assessment of Working Capital needs is adopted : a) Permissible Bank Finance Method b) Cash Budget Method c) Maximum Permissible Bank Finance Method d) Projected Turnover method
122)For Working Capital limits of Rs 2Crore and above for all industrial and other borrowers & Rs 5Crore and above for all SSI units, following method of assessment of Working Capital needs is adopted a) Permissible Bank Finance Method b) Cash Budget Method c) Maximum Permissible Bank Finance Method d) Projected Turnover method
123)For seasonal Industries such as Sugar, Tea, following method of assessment of Working Capital needs is adopted : a) Permissible Bank Finance Method b) Cash Budget Method c) Maximum Permissible Bank Finance Method d) Projected Turnover method
124)For leasing and Hire purchase companies following method of assessment of Working Capital needs is adopted: a) Permissible Bank Finance Method b) Cash Budget Method c) Maximum Permissible Bank Finance Method d) Projected Turnover method
125)Review of all borrower Accounts enjoying fund-based working capital limits of Rs10lac and above should be undertaken at least a) Once in every quarter b) Once in every half year c) Once a year d) No such guideline
126)QMR-I & HMR-I should be submitted by all borrowers enjoying aggregate working capital fnd based limit of a) Rs 10 Lac and above b) Rs 50 Lac and above c) Rs 1 Crore and above d) Rs. 5 Crore and above
127)For the purpose of arriving at Permissible Bank Finance and NWC, which of the following need not be treated as an item of current liabilities : a) Loan installments due for payment in the next 12 months b) All Overdue term loans which have been rescheduled c) None of the above d) Both the above
128)For the purpose of calculating the current ratio, which of the following need to be treated as an item of current liabilities : a)Loan installments due for payment in the next 12 months b)All Overdue term loans which have not be re-scheduled c)None of the above d)Both the above
129) Which of the following is true in respect to CP(Commercial Paper) issues : a)CP can be issued by a company having a minimum tangible networth of Rs 4 Crore b)Issuer company must have sanctioned working capital limit by Banks or All India Financial Institutions c)Borrowing Account classified as “Standard” Asset d)Minimum Credit Rating of ‘P-2’ of CRISIL or equivalent rating. e)All the above
130)CPs can be issued for minimum and maximum period of a)15 days and one year b)15 days and three year c)7 days and one year d)7 days and three years
131)Maximum amount of loan that can be given in the non-priority sector against the security of Gold Ornaments and other jewellery is a)Rs1Crore b)Rs50lac c)Rs10lac d)Rs5lac
132)Based on Sivaraman Committee Report, maximum amount of pure consumption loans to priority sector against gold ornaments is a)Rs1,000/- b)Rs3,000/- c)Rs4000/- d)Rs2000/- e)Rs5000/-
133)After getting clearance from NBC and on receipt of the proposal complete in all respect, proposals generated by FCC branches should reach FC department, HO within : a)7days b)10 days c)15 days d)21 days e) 30 days
134)FC department, HO , after receipt of proposals complete in all respect and cleared by NBC from the FCC branches should put the same to the competent authority for sanction within a)7days b)10 days c)15 days d)21 days e)30n days
135)Credit proposals, which falls within the delegated powers of the MCU head, should be processed and sanctioned within : a)7days b)14 days c)15 days d)21 days e)30 days
136)In case of advances to NBFC sector, which of the following documents is required for renewal of Credit limits ? a)Registration Certificate of the NBFCs issued by RBI b)Half yearly NBS-2 returns to RBI submitted by the NBFCs accepting/holding public deposits c)Both the above – the same is required also for new accounts d)None of the above
137)In respect to country risk, number of category classification followed by ECGC is : a)5 b)7* c)9 d)11 *( A1- insignificant; A2- Low; B1- Moderate; B2- High; C1- very High; C2 – Restricted and D – Off Credit)
138)In respect of a country where bank’s net funded exposure is 1% or more of its total assets, minimum provisioning requirement in respect to country risk is : a)0.25% b)5% c)20% d)25% e)100%
139)Exposure on CCIL for the purpose of lending under CBLO may be up to a)25% of Capital reckoned for Capital adequacy purpose b)50% of Capital reckoned for Capital adequacy purpose c)75% of Capital reckoned for Capital adequacy purpose d)100% of Capital reckoned for Capital adequacy purpose e)200% of Capital reckoned for Capital adequacy purpose
140)Which of the following qualification is not required for an AMC to take exposure by the bank on a Mutual fund scheme floated by them? a)AMC or its parent company should be at least 2 years old b)AMC should have current registration with SEBI c)Size of the AMC should not be less than 500 Crore d)None of the above e)All of the above
141)Exposure limit for investment in Debt Funds a)10% of the scheme corpus b)Rs 50 Crores c)Both the above d)Minimum of the above
142)Exposure limit for investment in Equity or equity linked Funds a)10% of the scheme corpus b)Rs 25 Crores c)Both the above d)Minimum of the above
143)Minimum margin to be obtained for issuing Guarantees on behalf of Share and Stock Brokers in favour of Stock Exchanges : a)100% full cash margin b)50% full Cash margin c)100% - out of which minimum 50% is cash margin d)50% - out of which minimum 25% is cash margin
144)Authorized Dealers can approve trade credits for import of all items permissible under EXIM Policy into India upto : a)USD 10 million per transaction with a maturity period upto one year b)USD 20 million per transaction with a maturity period upto one year c)USD 20 million per transaction with a maturity period upto three year d)USD 10 million per transaction with a maturity period upto three year
145)For Import of capital goods, ADs may can approve trade credits upto: a)USD 50 million per transaction with a maturity period of more than one year and less than 3 years b)USD 20 million per transaction with a maturity period of more than one year and less than 3 years c)USD 20 million per transaction with a maturity period upto three year d)USD 50 million per transaction with a maturity period upto three year
146) Maximum exposure that can be taken on banks with highest rating : a)150% of our Risk capital b)150% of the banks capital plus reserves & surplus net of revaluation reserve c)Lower of (a) and(b) above d) Higher of (a) and (b) above
147) Which of the following is not true in respect of monitoring of ‘Special Watch Accounts’? a) HO, Credit Monitoring will monitor SWAs of Rs50lac & above. b) ZO will submit CMR-9A, CMR-9B & CMR-9C to HO, credit Monitoring within 10th of the succeeding month. c) SWAs of Rs100lac & above will be reported in CMR-9A, SWAs between Rs50lac & less than Rs100lac will be reported in CMR-9B & below Rs50lac accounts will be reported in CMR-9C. d) NOA.
148) Which of the following is true in respect of NRI Housing Loan Scheme? a) The minimum loan amount – Rs2.50lac, the maximum loan amount-Rs100lac for M/U/SU branches and Rs25lac for rural branches b) Margin should be minimum 25% of Project cost. c) Repayment period is maximum 15 years including moratorium. d) Rate of interest is similar to that of UCO Shelter Scheme for similar loan amount and similar loan tenure. e) All the above.
149) In case of UCO Education loan Scheme, which one is not true? a) Loan limit for studies in India is Rs10lac & for studies abroad is Rs20lac b) For loan limit of above Rs7.50lac, full tangible collateral security is required. c) Co-obligation of parents is required irrespective of loan amount d) For loan limit up to Rs7.50lac, no collateral is required. e) ( c) & (d)
150) Summary sheet in respect of MCMR—Which of the following is not true? a) Summary Sheet introduced w.e.f. March,2008. b) Branches to submit summary sheet every month to HO, CMD for borrowal accounts with FB+NFB limit above Rs.100 lac c) Branches to submit summary sheet every month to ZO for borrowal accounts with FB+NFB limit OF Rs10lac & above to Rs100lac. d) Summary sheet should be submitted within 10th of the succeeding month. e) (a) & (d)
Risk Management /Loan Policy; Answers: 1)a) 2)b) 3)a) 4)c) 5)d) 6)b) 7)d) 8)d) 9)d) 10)c) 11)d) 12)c) 13)d) 14)b) 15)d) 16)d) 17)b) 18)c) 19)c) 20)d) 21)c) 22)b) 23)d) 24)c) 25)d) 26)a) 27)c) 28)c) 29)a) 30)c) 31)c) 32)d) 33)c) 34)b) 35)a) 36)b) 37)a) 38)a) 39)a) 40)d) 41)a) 42)c) 43)d) 44)b) 45)b) 46)a) 47)b) 48)e) 49)d) 50)b) 51)a) 52)d) 53)b) 54)c) 55)d) 56)a) 57)c) 58)b) 59)c) 60)d) 61)e) 62)e) 63)d) 64)e) 65)b) 66)d) 67)e) 68)d) 69)a) 70)e) 71)c) 72)d) 73)a) 74)c) 75)b) 76)b) 77)d) 78)b) 79)e) 80)e) 81)a) 82)a) 83)b) 84)e) 85)b) 86)c) 87)a) 88)e) 89)e) 90)d) 91)c) 92)a) 93)d) 94)d) 95)d) 96)c) 97)d) 98)c) 99)e) 100)e) 101)e) 102)c) 103)e) 104)e) 105)e) 106)e) 107)e) 108)b) 109)a) 110)c) 111)d) 112)b) 113)d) 114)e) 115)b) 116)a) 117)e) 118)c) 119)c) 120)b) 121)d) 122)a) 123)b) 124)c) 125)c) 126)c) 127)d) 128)d) 129)e) 130)c) 131)d) 132)d) 133)a) 134)c) 135)b) 136)c) 137)b) 138)a) 139)e) 140)d) 141)d) 142)d) 143)d) 144)b) 145)b) 146)c 147)d) 148)e) 149)d) 150)e) ---------------------------------------------------------------------------------------------------------------------------
Question Bank-II(Assorted Questions-- Answers)
1) When Ombudsman’s award is accepted by the customer, the bank is to implement the award within : 30 days.
2) Corporate Debt Restructure system is not applicable for : Single lender accounts
3) Real Time Gross settlement system takes care of which risk : Systemic risk and settlement risk
4) Loan assets are classified by the banks on the basis of : By status of security
5) Under SARFAESI Act 2002 the banks give notice for payment of due amount to the borrower / owner of charged assets within _____ days, otherwise action will be initiated u/s 13(2) of the Act : 60 days
6) The minimum & maximum period of certificate of deposit is : 7 days, 12 months
7) The format of cheque is prescribed by which Act : It is a practice
8) Which crossing takes away the feature of assumption of defective title available to transferee : Not negotiable
9) Bearer uncrossed cheque can be paid to whom : To the bearer
10) In PMRY, what is the income criteria for borrower’s family and borrower’s parents : Annual income from all sources should not exceed Rs.1 lac, each, separately
11)The increasing foreign exchange reserves in India are costly because : Funds are idle and there is fluctuation risk
12)Who is appointed to tackle public complaints against the public authorities : Ombudsman
13)What is NOSTRO: A bank’s account abroad with another bank
14) Other than a negotiable instrument, what is the time period for payment of stamp duty, if the document is executed outside India : 3 months
15) Within PS, a retail trader other than in essential commodities can be allowed an advance up to : Rs.20 lac
16) FCNR (B) deposit can be accepted by banks in ____ currencies : 6
17) May I help you counter is to be provided by bank branches other than : Small branches
18) Interest subvention on SME exporters is available to the extent of : 2%
19) BCTT provisions are applicable on partnership where cash withdrawal is : More than Rs.1 lac
20) A firm allowed limit of Rs.1.40lac at 30% margin. For availing limit fully, what will be value of security : Rs.2 lac
21) SLR provisions for banks are as per Section _____ of _____ : 24, Banking Regulation Act 1949
22) What is the maximum loan that can be allowed to a dealer in cattle feed / poultry feed, within PS : Rs.40 lac
23) An NRI can open a joint account with a resident in case of ___ accounts : Non-resident Ordinary.
24) What type of charge is applicable on loan against term deposits in a bank : Lien
25) RBI keeps on changing repo, reverse repo rate, CRR for : Regulation of liquidity to control inflation
26) Garnishee Order is not applicable on : Un-used cash credit or overdraft limit
27) What is the periodicity for submission of R-Returns to RBI : Fortnightly
28) The facility of nomination is not available to Trust account because it is _____ account : Non-individual
29) Provision on standard assets at the rate of 0.25% on ____ & ____ accounts : Direct agriculture and SME.
30) A person wants to open an account which his wife should be able to operate only after his death. What type of account he should open : Former or survivor
31) In B region, the reply to letters in Hindi is to be given to the extent of ____ % : 100%
32 ) Within PS target of 40% of ANBC or CEOBE, whichever is higher, the sub-target for weaker section is : 25%
33) A loan to an NBFC for on-lending to individual farmer or SHG or joint liability group is classified as: Indirect finance to agriculture
34) In a jointly operated joint account, nominee can obtain payment, when : none of the account holder is alive
35) SGSY scheme is meant for ____ in ____ areas : BPL, rural
36) Call money deposit is part of the ___ market : Money
37) The long term liability to tangible net worth ratio implies : Long term solvency of the firm or capacity of the firm to pay long term debt.
38) Current ratio implies : Capacity of the firm to pay current liabilities.
39) Working capital requirement of a firm is required to be met through : Short term sources and surplus of long term sources over long term uses.
40) What was increased by RBI by of 0.5% in the first quarterly review of annual policy in July 2007 : CRR
41) Star series notes relate to : Defective notes
42) The target for DRI advances is : 1% of previous year’s outstanding loans
43) Who cannot become a partner in a partnership firm as per Supreme Court judgment : HUF
44) What is the maximum period for which an account classified as sub-standard, can remain as substandard: 12m
45) A company wants to electronically pay the dividend to large no. of its shareholders, which include small amounts also : Electronic Clearing Services – Credit (ECS-Credit)
46) Service fee in case of CGF-MSE guarantee cover is ___ % of ____ : 0.75%, sanctioned limit
47) The terms used for hiding money to avoid tax is : Money laundering
48) A cheque is written in different hand-writings and different inks : It will be paid
49) Opening of non-resident accounts by _____ has been allowed by RBI : RRBs
50) Bailment of goods by a person to another person, to secure a loan is called : Pledge
51) When mortgage is created by a person by deposit of title deed orally, it is called ____ mortgage : Equitable
52) Which crossing is not a general crossing : When name of bank is written within or without parallel lines.
53) Buy now and pay later is the facility available under : Credit card
54) A financial statement that provides information regarding where the funds have come and where these have been used, is called : Funds flow statement
55) Who can open NRE account : NRI
56) The minimum capital adequacy ratio implemented in India, by RBI is ____ % and as per Basel II recommendations it is ___ % : 9%, 8%
57) A mandate holder for a current account has died and a cheque signed by him is presented for payment after his death : The cheque shall be paid, if not dated subsequent to date of death or prior to the date of mandate.
58) True owner of a cheque deprived by collection of the cheque for a different person. This is called : Conversion
59) A bank branch receives a counterfeit note of Rs.1000, which customer wants back. What the bank should do:To be impounded and not to be returned in any circumstances.
60) Banks provide term loans and deferred payment guarantee to finance capital assets like plant and machinery. What is the difference between these two : Outlay of funds.
61) Islamic banking has the features of : Conservative banking
62) Which among the Muslims, Christians, Budhists & Jains is not a minority community : Jain
63) When rate of interest is expressed by adjusting the impact of inflation, this is called _____ : Real rate of Interest
64) For the purpose of creation of equitable mortgage, place for deposit of the title deed is notified by : State Govt.
65) A prudent investor makes investment in shares on the basis of : Price-earning ratio
66) When the rates are rising, the growing economy : Gains
67) Three stages of money laundering : Placement, layering, Integration.
68) For FCNR (B) deposits, the exchange risk is born by : Bank, accepting such deposit.
69) As per recent RBI/Govt. guidelines, pensioners can open account jointly with: spouse, to be operated as E or S
70) Amount of maximum loan given to micro and small enterprises covered under CGFTMSE scheme : Rs.50 lac
71) Housing loan is part of the priority sector advance, with a maximum amount of : Rs.20 lac.
72) The R-returns are submitted by the banks to RBI on : Fortnightly basis
73) Apiculture relates to : Bee-keeping
74) A cheque written in different inks and handwriting is presented for payment : it will be paid if otherwise in order
75) Which of the following forms will be used for allowing exemption to a depositor aged 61 years : Form 15 G
76) An enterprise will be treated as medium enterprise providing services, if the investment in ____ is above Rs.2 cr and up to Rs. _____: equipment, 5 cr.
77) BCTT is levied in case of a partnership firm’s account, when the amount of withdrawals : exceeds Rs.1 lac
78) For acquiring securities charged to the bank under SARFAESI Act, a notice of ___ days is required to be sent to the owner of the securities: 60 days
79) The drawer of a cheque wants that the endorsee should not get a defect free title when he receives an endorsed cheque. What type of crossing would be required : Not-negotiable crossing.
80) The crossing on a cheque is required to be cancelled. Who can do so: Drawer
81) A cheque signed by an agent is presented for payment, after his death. What will the paying bank do : Cheque will be paid in normal course if it is not dated subsequent to date of his death.
82) A bank can sell its NPA to another bank, if the NPA is held by the seller bank with it for _ month as NPA : 24
83) Unutilised overdraft limit of a borrower is available and a garnishee order is received : Order is not applicable
84) Under SGSY, the no. of women self group should be ___ % of the total groups: 50%
85) In educational loan no collateral security or 3rd party guarantee i, if the amount of loan is : Rs.4 lac or less.
86) NRE term deposit can be accepted by banks for a period of : 1 to 3 years.
87) In PMRY cases, the amount of margin and subsidy should be ___ % of the ____ : 20%, project cost.
88) A loan associated with a short duration crop, becomes sub-standard after remaining special mention account for a period of: two crop seasons
89) Interest subvention of 2% is available to banks from Govt. when the short term production loan up to Rs. ____ lac jin agriculture is allowed by banks at ____ % rate of interest to farmer: 3 lac, 7%
90) Under liberalized remittance scheme what is the maximum amount that can be remitted by a resident person abroad for unspecified person: $ 2 lac in a financial year.
91) If an SSI units holds a margin of Rs.25 lac and its projected sales are Rs.400 lac, its working capital limit will be : Rs.75 lac (margin being more, the limit will be lower by that amount).
92) Weaker persons of the society avail deposit and loan services from banks, which is called : Financial inclusion
93) Customer day is observed by banks on ____ th of the month : 15
94) Minimum no. of days for which term deposit can be made by banks : 7 days
95) Under 15 point program of Prime Minister, the no. of minority dominated districts in India is indicated as : 121
96) For select exporters, the maximum interest subvention allowed to banks is ___ % but the rate of interest to be charged from exporters should be minimum ___ % : 4%, 7%
97) What type of bench mark interest rate is used for lending in banks : Benchmark Prime Lending Rate.
98) A dealer is engaged in sale/distribution of inputs used in agriculture allied activities such a poultry feed / cattlefeed. What is the maximum amount of loan given to them, can be classified under priority sector : Rs.40 lac.
99) Appeal against the award given by the Ombudsman can be made by the bank within _____ days of date of ____: 30 days, receipt of acceptance from the customer.
100) If a fraud takes place in a bank branch. Report is sent to the controlling office on form: FMR 1
101) The amount in a cheque is written differently in words and figures and amount written in words is higher of the two : Amount written in words will be paid.
102) While paying a bearer cheque, signatures are obtained on the back side cheque.: As evidence of payment
103) Bank note which is misprinted by RBI is replaced by issuing a ________ note : Star series
104) In CDR category-1, what type of loan accounts are eligible : Standard & sub-standard.
105) Sales / debtor ratio is called ___ ratio. It indicates ____: Debtor-turnover, efficiency of collection of debtors.
106) Current ratio indicates : Capacity of a firm to meet its current liabilities.
107) Conversion means : unauthorized intervention in the property of another person
108) As per Official language policy for B region, branch target to reply in Hindi letter received in Hindi is : 100%
109) Provision for standard accounts in direct agriculture and SME accounts is to be made at : 0.25%
110) Risk weight for bill purchased under LC, for capital adequacy purposes is : 20%
111) What is the right of nominee in case of term deposit that has not matured : To obtain premature payment and not raise loan against the security of such term deposit
112) Pre-shipment credit is available in which type of letter of credit : Red clause
113) Quarterly financial results of companies and banks are to be declared / published under directions of : SEBI
114) RBI injects liquidity through : Repo
115) Collateral security in case of PMRY advances is exempt up to : Loan of Rs.5 lac in case of industry projects per borrowal account and Rs.2 lac for business/servicing per borrower.
116) What is full form of FRBM : Fiscal Responsibility & Budget Management Act
117) Relationship between bank and customer when goods left by mistake in the bank: Trustee & beneficiary
118) Priority sector target for foreign banks: 32% of ANBC
119) NSC pledged with post office with nomination fvg X. Bank’s claim against these NSCs : Will have priority
120) Legal status of nominee is that of a : Trustee for legal heirs
121) M, a minor admitted for benefits in a firm wants to withdraw from the firm on attaining majority. How much time is available to him to do so : 6 months from date of majority or 6 months from date of information to him that he was admitted for benefits, whichever is later.
122) Loan to minor can be given in the following case (a) against BD (b) against LIC policy (c) in the name of minor (d) in the name of father : in the name of father
123) Money to be deposited by A in the account of B. A has informed that B has become insane : can be deposited with consent of the family members (i.e. guardian)
123) Mortgagee enjoys the income of the mortgaged property in case of which mortgage : Usufructuary
124) Hypothecation becomes pledge : when goods are given for possession to the bank, by the borrower.
125) Which scheme abolished with introduction of senior citizen deposit scheme : Varishat Bima Pension Yojna
126) An NPA account is restructured on June 30, 2003 with the provision that first instalment shall be due on Dec 31, 2003. Amount deposited on Dec 30, 2003. The account will become standard, if instalments are regularly deposited: Dec 31, 2004.
127) Which type of fraud case is not to be reported : Theft and burglary.
128) There is excess cash with the cashier while closing the cash balance in the evening. It is to be deposited in : Sundries account (credit balance).
129) Which document is required to be attested (witnessed) (a) mortgage deed (b) pledge agreement (c) Hypothecation agreement : Mortgage deed
130) No. of bank branches in India is (a) above 40000 (b) above 50000 (c) above 60000 (d) above 70000 : Above 70000
131) A, B and C want to open a joint account with the provision that after death of any of them, the money should not be paid to any legal heir, what mode of operation should be opened : Either or any of them
132) ECB can be raised under automatic approval by (a) companies (b) firms : Companies
133) Borrowing power of Board of Directors is described in: Articles of Association.
134) Doctorine of Ultravires borrowing relates to : Borrowing by a company for an activity, which it is not authorized to undertake as per its Memorandum of Association
135) Loan of Rs.25000 obtained by the depositor against an FDR. Minor to be appointed nominee in the account : Can be done after repayment of the loan. Terms of deposit account not allowed change during loan period.
136) The no. of members in a SHG in SGSY in normal cases : 10-20
137) Authorized capital is Rs.10lac. Paid up capital Rs.6lac. The loss of previous year is Rs.1lac. Loss in current year is Rs.2 lac. The tangible net worth is : Rs.3 lac
138) Net working capital is Rs.80000. Current ratio is 3:1. The current assets are : 120000
139) Right to retain goods is called : Lien
140) For obtaining loan against shares, the Charge on shares : Lien
141) A director of the bank wants to raise loan from your bank against (a) FDR of other bank (b) share of same bank (c) surrender value of Life Policy. Loan can be given against : Surrender value of Life Policy.
142) Keeping goods in safe custody is as per provisions of (a) NI Act (b) Indian Partnership Act (c) Indian Contract Act : C
143) No dues certificate in case of agricultural advances is exempted up to a loan of: Rs.50000
144) Liability of a coparcener in case of loan raised by HUF is : Restricted to his share in HUF property/assets
145) In KYC guidelines, the small account where simple KYC is applicable are those account where the amount deposited in the account is restricted to (a) Rs.50000 (b) Rs.1 lac : Rs.1 lac
146) In case of SMEs, the registration is mandatory in case of (a) medium enterprises in servicing (b) small manufacturing enterprises (c) manufacturing medium enterprises : C
147) A company has been sanctioned cash credit-pledge limit. Internal auditor finds that charge has not been registered with Registrar of Companies in time. In how much time it is to be done : In case of pledge, registration with ROC is not required.
148) Loan system of credit delivery is not applicable in case of : Software industry
149) To sell an NPA, the account must remain in the books of seller bank : for 24 months as NPA
150) One of these is an indirect rate (a) one $ = Rs. 39.56 (b) one pound = Rs. 89.56, (c) one yen = Rs. 0..30 (d) Rs.100 = $ 2.60 : (d)
151) Which crossing is not recognized by NI Act (a) Special (b) payee’s account (c) not negotiable : b)
152) Which among the following can open an Resident Foreign Currency account (a) NRI (b) Resident (c) Erstwhile NRI now resident (d) none : C
153) A loan document is signed by one partner on June 15, 2007, by 2nd partner on June 21 and by 3rd partner on June 29. The period of limitation will start from : June 30, 2007
154) In CAMLS, the word C stands for : Capital Adequacy Ratio
155) A partner wants to retire from the firm XYZ. He has to (a) get consent of other partners (b) has implied authority to retire (c) has to give public notice (d) can retire when desired by him by giving notice to other partners : A
156) Service Area approach guidelines withdrawn by RBI except of Govt. sponsored Scheme as per recommendations of : VS Vyas Committee
157) Govt. shareholding in public sector banks cannot be below : (a) 33% (b) 51% (c) 74% (d) 100 : B
158) For micro & small enterprise, the value of _____ is excluded while calculating the value of plant and machinery or equipment : Land & building.
159) Registration of partnership firm is not compulsory but banks prefer registered firms because (a) they can file suit against them (b) creditors can file suit against them (c) they can file suit against their debtors : C
160) Ombudsman can ignore the case of complaint where (a) advocate of applicant has appealed (b) complaint is of frivolous nature : B
161) Company increases it networth by revaluation of assets by Rs.50000. Existing Debt equity ratio was 2:1. the new debt equity ratio would be _____, if long term liabilities are Rs.80000 : 0.9:1
162) If BCTT is not deposited on time, the penalty for non-deposit is : Rs.1000 per day for period of default + 1p.m. interest
163) BCTT is chargeable in the account of a private limited company if the amount of cash withdrawal is : more than Rs.1 lac.
164) A cheque is issued by a company as “pay yourselves”. A clerk from the company comes and signs on behalf of the company and requests for preparation of a demand draft : Cannot be prepared.
165) Internal rate of return is : A discount rate, at which the net present value of a project is Zero.
166) PMRY age limit of general………..and for SCST ____ (18—35 and 18—45)
167) Under SGSY Programme, the minimum number of SHG group of women to be formed : 50%
168) Subsidy under Agriclinic ,Agribusiness is ……..%for general and ………….% for SC/ST (25% and 33.3%)
169) Small Service industry investment in plant and machinery : above 10 lakhs but upto 2 crore
170) Hypothecation defined under which act : SARFAESI Act.
171) TDS not deducted what is the penalty: Bank to pay the amount with interest @ 1% p.m. simple
172) Mr.A withdrew cash from the following three accounts maintained in your bank: SB – Rs.100,000/-, Current – Rs.60,000/-, OD – 40,000/-. What is the amount of BCTT to be deducted: 60/-
173) What charge to be created for demat shares with bank as security : Lien
174) Microsoft has instituted its base/ facility office at: Hyderabad
175) If the date under LC is mentioned as on or about 30.06.2007 – shipment will go within or when.. (5 days before and 5 days after 30.6.07)
176) What is the position of a Nominee ?: The money will be paid to nominee after death of depositor
177) Methodology of Waiver/Remission of loan of Director of the bank: After permission of RBI
178) Under LRS how much money in 000 a resident can remit in year : US D 200000 in a financial year.
179) For the purpose of Medical Treatment, how much amount can be remitted freely : USD 100000
180) How much amount a company can invest abroad : 400% of net worth
181) What is the DICGC premium for deposit insurance in banks ? : 5 paisa per Rs100 per half year.
182) DICGC does not insure deposits of : Foreign, central, state governments & Inter-bank deposits.
183) BSE- SENSEX consists of 30 blue chip company Shares whereas NSE Nifty consists of 50 shares.
184) Which card can be used without linking to a bank account ? : Smart Card.
185) Which ATM can be used without PIN number but with finger tip : Bio-metric ATM.
186) SEBI has decided to do away with the ------- for direct application for Mutual funds investments : Entry load.
187) A giant US investment bank has filed bankruptcy petition recently : Lehman Brothers.
188) If ATF (Air Turbine Fuel) becomes “declared goods”, sales tax on ATF throughout the country will be uniform : 4%
189) DICGC—deposits of a person in different branches of the same bank are covered up to maximum Rs1lac, but deposits in different banks are covered up to Rs1lac for each bank.
190) Clearing of cheques through Cheque Truncation system has been started in New Delhi Capital Region(NCR) on a pilot basis.
191) What is the period for concessional interest rate for Pre-shipment rupee export credit available at present at BPLR-2.5%? : 270days ( increased from 180 days)
192) What is the Export Credit refinance limit for banks, which has been increased recently? : 50% of the outstanding rupee export credit eligible for refinance as at the end of second preceding fortnight. (increased from 15%)
193) What is the recent change in provision requirement against standard assets? : the provision requirement for all types of standard assets stand reduced to a uniform level of 0.40% except in case of direct agriculture and SME advances by the banks which will continue to attract provision of 0.25%.
194) What is currency future and when it is introduced in India? : Currency future is a standardized future contract with currency as the underlying instrument. It is a contract or agreement to by or sell any currency at a specified future date at a pre-determined price before contract expiry date. Currency future trading launched in India on NSE w.e.f. August 29,’08.
195) What is the per month salary ceiling for getting bonus? : Rs10,000/-
196) Certificate course for recovery agents will be conducted by : Indian Institute of Banking & Finance(IIBF), Mumbai .
197) RBI has asked banks to set-up customer panel at branch level comprising : a senior citizen among others.
198) What is VAR? : VAR is an estimate of the maximum loss possible given a pre-determined probability or confidence level and time horizon.
199) Under clause 49, it is binding on the listed companies to fill--- of their boards with independent directors when they have executive chairman and--- when they have non-executive chairman.: 50%, one-third.
200) SEBI has put a limit on the annual expenses at------ of asset under management of Mutual funds for Index schemes and exchange traded schemes.: 1.5% ------------------------------------------------------------------------------------------------------------------------------------
Question Bank—III (Assorted Multiple Choice questions)
1 Global Bank is having a current account of M/s Ruchi Enterprises and a cheque of Rs.13,500 is presented through clearing, drawn in favour of Mr. Ramesh. Through an oversight the cheque is dishonoured wrongfully. When information about this dishonour is received by Mr. Ramesh, he sends a notice to the Global Bank for wrongful dishonour and claims damages. What would you do with this notice?
nominee comes in to picture
only when none of the account holders is available
actions beyond its control
so far 5 Your branch opens a fixed deposit of Rs.50000 in the joint name of Mr. Anil Kumar and Mr. Suhail Kumar payable to either or survivor. They also nominate Miss Konica a minor daughter of Mr. Suhail Kumar with the provision that the payment can be claimed by Mrs. Suhail Kumar on behalf of the minor. Unfortunately, Mr. Suhail Kumar expired and subsequently Mr. Anil Kumar decides to change the nomination from Miss Konica to his own son. To this, Mrs. Suhail Kumar objects and asks your branch not to accept the instruction of Mr. Anil Kumar:
vested with him. 6 Sh. Amrit Lal opens a term deposit account with Bank of Bengal and nominates his niece Ms Aruna Pande. Unfortunately, he expires in an accident but Ms Aruna Pande does not turn up despite a notice from the bank. Meantime, the legal heirs of Mr. Amrit Lal i.e. his two sons, visit the bank and request for making payment of the deposit. They also present a probate from court of law in which they are executors of the will of the deceased:
a unlimited b nil & |
