Promotion for Officers 2008-2009
Contents:------
1) 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
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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 NP
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)
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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?
a Bank should contact Mr. Ramesh for withdrawls of the notice for damages.
b Banks should contact the drawer and ask them to prevail upon the payee for withdrawal of the notice.
c Bank can ignore this notice as the bank is not liable for such damages to the payee.
d Bank is liable to the drawer of the cheque and no one else.
e c and d above
2 Corporate Bank had opened a saving bank account in the name of Mr. Subramanian and Murlidhar operated as `former or survivor’. The wife of Mr. Subramanian, who is nominee in the account comes to your branch and informs you that Mr. Subramanian has expired a month back. She also hands over the death certificate and requests for payment of the balance.
a the payment to the nominee will be made on proper identification as she is also having the death certificate.
b the payment will be made to the wife of deceased being legal heir of the former.
c the payment will not be made as with the death of the former, nomination has been cancelled.
d the payment will not be made as with the death of the former, survivor gets the authority to operate the account and
nominee comes in to picture only when none of the account holders is available
e any of the above
3 Bank Universal Limited receives a letter of credit of $ 20000 in favour of M/s Diamond Exports Pvt Ltd for exports to Germany. After verification of the genuineness of the credit, it is forwarded to the beneficiary through registered letter. Unfortunately, due to postal strike, by the time the letter of credit is delivered, its validity period expires. The exporter threatens legal action against the bank:
a bank is liable as bank has not handed over the credit in time to the beneficiary
b postal department is liable for the loss and exporter has to take up the matter with the postal department
c bank is not liable as it does not assume any liability for the consequences arising out of delay in transit due to
actions beyond its control
d bank could persuade the opening bank to extend the validity date so that it is not put to loss
e any of the above
4 Your branch has received a garnishee order in the name of your customer having saving bank account, with following transactions. Which among these is not subject matter of the garnishee order:
a an advice ready for despatch to another branch after debit to the account in payment of cheque
b an advice received for a cheque which was sent in collection, from another branch but not credited to the account
so far
c a cheque sent in clearing, the amount of which has been credited to the account
d an amount of Rs.4000 relating to his wife’s account credited by mistake to the account of the customer
e all the above
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:
a bank has no option to ignore the request from Mr. Anil Kumar as, being survivor all rights relating to deposit are
vested with him.
b bank can request Mr. Anil Kumar to decide the case in consultation with the existing nominee
c bank has to accept the request from Mrs. Suhail Kumar, as she was the nominee coupled with interest
d bank will ask them to go to a court of law for decision and would implement the decision of the court
e b and c above
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 the payment of the balance in the account will be made by the bank to Ms Aruna Pande only
b the payment of the balance would be made to the legal heirs in terms of probate
c the payment will be made in equal proportion to the legal heirs and the nominee
d the bank will advise the legal heirs to bring specific order from the court in the light of nomination
e none of the above
7 The liability of a minor co-parcener in an HUF, for the acts of a Karta is:
a unlimited b nil c to the extent of his share in the family property
d 50% of the loss as per his share e none of the above
8 Mr. D Singh and Mr. K Singh are maintaining a current account in `former and survivor’ operations. Mr. K Singh (illiterate) issues a notice to the bank that the operations in the account should be stopped as there is some dispute between both of them. He also mentions that money in the account belongs to him but for operational convenience, the power to operate the account was given in favour of D Singh. What would you do with the cheque (signed by Mr. D Singh for Rs.670 favouring LIC of India) which has been presented through clearing, for payment from this account?
a the cheque is of small amount and shall be paid.
b the cheque is in favour of LIC of India and shall be paid
c cheque will be returned due to receipt of information about dispute
d cheque will be paid as K Singh’s instruction cannot be accepted so long as Mr. D Singh is alive
e Any of the above
9 An attachment order is received from Income Tax Officer for attaching funds lying in saving bank account of a person. In case, the bank fails to execute this order u/s 226 (3) of Income Tax Act:
a: Branch Manager can be arrested.
b: Branch Manager can be fined upto Rs. 5000 and sentenced upto one year
c: The banker shall be treated as a assessee in default
d Amount can be recovered from the bank, with penalty.
e: c and d.
10 Your branch is having a fixed deposit receipt of Rs.2 lac in the name of B, which is to mature after one year. B defaults in payment of loan. The right of set-off can be exercised for a loan against fixed deposit receipt:
a: On maturity b: Even before maturity c by giving 30 days notice, it can be exercised
d: any of the above e: None of the above.
11 Your customer Mr. Veerapan issues a cheque payable to `self or order’, for Rs.55000. It is presented for payment by his peon Mr. Prakash. The cheque is endorsed by Mr. Veerapan in blank:
a cheque should not be paid as it is drawn in favour of self
b cheque should not be paid as it is not drawn properly
c cheque can be paid as it is properly drawn and endorsed in blank the payment of which can be obtained by the
bearer
d cheques payable to self or order cannot be endorsed in blank
e none of the above
12 The bank received garnishee order on saving bank account of Mr. Ram at 10.50 a.m., who deposits Rs. 5000 at 12.10 p.m. i.e. after service of the order:
a: The order would apply to this amount also. b: The bank will refuse to accept the deposit
c: The order will not apply to this amount d order will apply if court is informed about this
e: order will apply if court declares so.
13 For the purpose of change in classification of an advances from standard to sub-standard category due to non-payment of the loan, in case of crop based agriculture advances, which of the following is taken:
a two harvest seasons
b two crop seasons
c one crop season
d two crop seasons for short duration crop and one crop season for long duration crop
e two harvest seasons with maximum of one year.
14 An exporter has received repayment of certain bills he had sent for collection and now wants to retain the same in foreign currency:
a he can open current account as EEFC account
b he can open fixed deposit account as EEFC account
c he can open saving bank account as EEFC account
d he can open any of the above provided no interest is paid
e he can open only a and c
15 Your branch maintains a current account of a partnership firm Sandhu & Company with Sandeep Sandhu and Kuldeep Sidhu as partners. Master Sandesh Sandhu (son of Mr. Sandeep Sandhu) is also admitted to the firm for benefits. In order to meet the financial requirements of the firm, Mr. Sandhu approaches the bank to sanction a demand loan against an FDR in the name of Master Sandesh u/g of Mr. Sandeep Sandhu:
a the loan is needed by the firm, in which the minor is a partner, hence can be sanctioned
b the loan is being raised by the father of the minor, due to which it can be sanctioned
c the loan can be sanctioned by keeping the FDR as security
d the loan can be sanctioned if the father declares that it is for the benefit of the minor.
e Loan cannot be sanctioned
16 Corporate Bank had granted a term loan of Rs.20 lac to M/s Kawal Society Limited which is not being repaid. The company is signing the balance confirmation letter despite the fact that it has been sent three times. Bank sends a legal notice for repayment of the loan which shows balance of Rs.27 lac now. Company confronts bank’s claim of Rs.27 lac by way of a letter stating that they have already paid Rs.5 lac due to which the amount should be Rs.15 lac only:
a the letter will serve the purpose of acknowledgement letter and extend the limitation period for the entire amount
b the letter could extend the limitation period if it were duly stamped
c the letter is not an acknowledgement it is only a denial of bank’s claim
d any of the above e none of the above
17 Your branch has sanctioned working capital limit of Rs.9 lac to a partnership firm which submits stock report with stocks worth Rs.28 lac and sundry creditors of Rs.18 lac. The margin in the account is only 20% , the unit being an SSI unit. What is the maximum amount up to which the limit can be allowed to be availed by the party?
a Rs.6 lac b Rs.8 lac c Rs. 9 lac d Rs.4.60 lac e none of the above
18 Any old bank has to fulfill the following terms and conditions to be included in the second schedule of RBI Act 1934:
a: It should be either a State Co-op Bank or a Company defined under Indian Companies Act 1956 or an institution appointed by Central Govt. for undertaking banking operations.
b: Jointly its paid up capital and reserves should not be less than 5 lac.
c: It has to satisfy RBI that none of its functions, are against depositors interest.
d: All of the above. e only c
19 For small scale service business enterprises (SSSBE), the investment ceiling in fixed assets excluding land and building is:
a Rs.20 lac b Rs.3 lac c Rs.5 lac d Rs.10 lac e Rs.5 lac
20 A person called Himmat Singh has been maintaining a saving bank account with your branch for the last 10 years where no nomination has been opted. Now he wants to make nomination in favour of his minor son.
a: Bank will accept the request for nomination
b: Bank will not accept the request for nomination in favour of minor since a long period has already passed when
account was opened
c: Nomination in favour of minor can be allowed only when a person is also appointed who can receive the payment
on behalf of minor if the account holder dies during his minority
d: Both (c) and (b) above
e none of the above
21 Universal Bank has been maintaining a joint fixed deposit account in the name of Mr. Asha Singh and Mr. Manjeet Singh. After sudden death of the Mr. Asha Singh in a road accident, Mr. Manjeet Singh approaches the bank for payment of the fixed deposit before maturity, which the bank makes after obtaining an indemnity bond. The legal heirs dispute the payment and insist on 50% payment:
a the claim of legal heirs is not tenable as after death of one of the joint holders, the balance becomes payable to the
survivor
b the bank has made the payment to the survivor negligently, as in case of death of one of the holders, the deposit
receipt cannot be cancelled
c the bank has acted negligently as the payment was required to be made to the legal heirs of the deceased holder and
the survivor jointly
d a and c e any of the above
22 A business firm has been sanctioned working capital limits of Rs.6 lac at 25% margin by the bank and book debt limit of Rs.4 lac at 50% margin. What will be total margin requirement to avail the limit fully:
a 4 lac b 5 lac c 6 lac d 6.5 lac e 8 lac
23 What is the maximum time available to a customer for lodging complaint to Ombudsman:
a 1 month from date of complaint made to bank and no reply received
b 1 month from date of complaint, reply received but customer not satisfied
c 1 year from date of receipt of reply from the bank
d 1 year from date of lodgement of complaint with the bank + 1 month, where reply has not been received.
e c or d
24 An FD payable to either or survivor for Rs. 25000 is in the names of A and B. The receipt is lost and a duplicate is issued on the basis of indemnity. Later on A comes with original on date of maturity for payment.
a: The bank will pay to A because it is payable to either or survivor
b: The bank will not pay because a duplicate has been issued making the original as useless. Hence the consent of B
is required
c: The court will be informed. d any of the above at the discretion of the bank e: None of the above
25 Ravi your customer of a saving bank account is approached by a person called Ram to give an introduction to enable him to open a saving bank account with your branch to which he agrees. Subsequently it is proved that Ravi gave introduction though he really did not know much about Ram. In such situation:
a: Bank can hold Ravi responsible as he carelessly gave the introduction
b: Bank cannot hold Ravi responsible as Ravi has not violated introduction rules
c: Bank can recover 50% of amount from Ravi d any of the above e: None of the above
26 Intt. in SB account is calculated on:
a: Minimum balance during the month b: Balance as on 30th of the month
c: Minimum balance between 10th and last day of the month d balance as on 10th and last day of the month
e: None of the above
27 A gives a mandate in favour of B to operate his account and later on a power of attorney is executed by A in favour his wife. In the case:
a: Mandate will would remain effective along with power of attorney
b: Mandate would become ineffective, if revoked specifically
c: Court intervention should be had d Only power of attorney will be operative e: a and b.
28 In a public limited company, maximum and minimum no. of shareholders is:
a: 50 and 10 b: No limit and 7 c: 100 and 2 d: 1000 and 100
e any number at the discretion of the company
29 A company is availing credit facilities from your branch. Which among these credit facilities does not require registration of charges u/s 125 of Companies Act 1956 for :
a: Packing Credit for shipment of goods b: Hypothecation of stocks c: Pledge of stock
d: Term loan for machinery e bills discounting
30 For door-step banking by banks, RBI has issued directives under which of the following Acts:
a RBI Act b Negotiable Instrument Act c Banking Regulation Act
d Shops and Establishment Act e Industrial Disputes Act
31 In a partnership firm, the no. of partners cannot go beyond 10 or 20 depending upon the nature of business. The provision regarding this maximum no. of partners is mentioned in:
a: Indian Partnership Act b: Indian Contract Act c: Indian Companies Act
d Banking Regulation Act e: None of the above.
32 Ravi Kumar and Sons, an HUF, maintain a current account. The Karta of the HUF dies and leaves behind three family members i.e. his wife and two minor sons. How will you deal with the account:
a: Bank will stop operations in the account
b: Account can be operated by minor son being male member
c: Account would be operated by widow being guardian of eldest male member to be called Karta
d account can be operated by any of the two sons e: None of the above.
33 Which of the following documents in case of a company, is called Charter of the company:
a: Resolution from Board of Directors or Shareholders b: Memorandum of Association
c: Articles of Association d Certificate of Incorporation e: Certificate of Commencement of Business
34 A bank receives a cheque for collection from its customer. Bank gives credit before collection of the cheque. It also allows the customer to withdraw the amount. In such case, the:
a: Bank is holder b: Bank is holder for value c: Bank becomes holder in due course
d representative of the drawer e: None of the above
35 Not negotiable crossing means:
a: The collecting banker should confirm about the genuineness of holder before collection of his cheque
b: The not negotiable cheque cannot be further negotiated.
c: Collection of not negotiable cheque will not get protection under NI Act
d: A transferee cannot get better title than a transferor and he also cannot transfer a better title than he possesses. e any of the above
36 A bill is payable to or to order of a non-trading firm. Endorsement can be made by:
a: Any partner of the firm b: All the partners c: Authorised partner through power of attorney
d: Any two partners e any of the above
37 The term `allonge’ refers to:
a: A plain sheet appended to a negotiable instrument for the purpose of making endorsement thereon
b: Conditional endorsement of a negotiable instrument
c: A plain sheet appended to a will d enclosures to the balance sheet of the bank e: None of the above
38 A customer of Delhi branch of the bank having Multi-city cheque book under the centralized business solution (CBS) demands payment of a cheque at Lucknow branch of the bank and there is connectivity between these two branches:
a it is not a proper demand
b demand is in order. Lucknow branch should pay. Bank would get proper discharge.
c to demand money all bank branches are considered one unit whether the cheque is normal or multi-city.
d demand is in order, but Lucknow branch cannot get valid discharge as contract is with Delhi branch
e b and c
39 A cheque is presented for payment through clearing house but due to certain reasons, it is returned unpaid. The returning memo is enclosed to comply with:
a: Negotiable Instruments Act b: RBI Act c: Banking Regulations Act
d: It is a practice e RBI clearing House rules
40 The provision for making the payment of amount mentioned in words in a cheque is described u/s...of NI Act:
a: 18 b: 19 c: 20 d: 21 e 118
41 A bearer cheque is issued by one Mr. Ashok in favour of Aman, but he forgets to hand over the cheque to Aman. Aman however, picks up the cheque in his absence from his table. Whether the negotiation has taken place ?
a: No, endorsement is also needed b: No, delivery is also needed
c: No, endorsement and delivery both required d yes, the cheque is drawn in his favour
e: None of the above
42 An export client M/s Shanbeg Exports of your branch receives an export order for export of handicraft items to US under a letter of credit of $ 30000. It is stated that your bank can issue another credit in favour of local supplier/manufacturer from whom the exporter is to procure the material. Under which of the following categories, such letter of credit can be classified:
a red clause letter of credit b green clause letter of credit c stand by letter of credit
d transferable letter of credit e back to back letter of credit
43 A bank can purchase NPA from another bank, if in the books of selling bank, the account was NPA for ____:
a 2 years b 3 years c 4 years d 5 years e 7 years
44 If NPA is purchased from X bank by Y Bank and Y bank wants to sell it to Z bank, what is the minimum period for which the account should remain with bank Y:
a: 6 months b: 12 months c: 15 months d 18 months e: 36 months
45 What is the risk weightage for capital adequacy purpose, in case of credit card:
a: 25% b: 50% c: 100% d: 125% e: 150%
46 In case of SJSRY, what is the minimum no. of members of women group under DWCUA:
a: 25 b: 20 c: 15 d 12 e: 10
47 Under the Nayak Committee recommendations, the quantum of working capital limits from the bank is minimum
____ of the projected annual sales:
a: 5% b: 15% c: 20% d: 25% e 3%
48 A bearer cheque of Rs. 3 lac has been presented by Mr. Sham Kumar, the payees of a cheque drawn on your branch. He being new to the bank has shown inability to give identification:
a in case of bearer cheque, no identification is needed irrespective of the amount of the cheque
b Identification is required to safe guard the interest of the bank
c Identification is essential for all instruments for getting protection
d Identification would not be required if presented with pass book e none of the above
49 Mr. Dharmvir has given a power of attorney to Mr. Ashok Kumar for operation of accounts and dealing with negotiable instruments drawn in favour of Mr. Dharmvir. What will be the correct endorsement by Mr. Ashok Kumar among the following:
a Dharmvir sd/ by Ashok Kumar b Ashok Kumar sd/ Ashok Kumar c For Dharmvir sd/ Dharmvir by Ashok Kumar d For Dharmvir sd/ by Ashok Kumar (attorney for Dharmvir) e For Ashok Kumar sd/ by Ashok Kumar
50 Mr. Jugraj Lal comes to open a saving bank account with your branch. He also has a cheque of Rs.500, which he would deposit in the account when account is opened. Which among the following can be accepted as first deposit in the account?
a cash only b cheque c bank draft d bankers’ cheque e any of the above
51 What is the target (quota) for SC/ST and other backward classes under PMRY:
a 40%, 10% b 30%, 20% c 22.5%, 27% d 27%, 22.5% e 20%, 30%
52 In case of a partnership firm, the managing partner execute the documents on behalf of firm. If you are branch auditor, what would you suggest to the branch staff ?
a: All the partners sign all documents b: All partners sign in both the capacities i.e. jointly and severally
c partners sign in their individual capacity d: Both the above e: None of the above
53 For Term loan the period of limitation is three years from:
a: Date of documents b: Date of default c: Date of sanction d: Due date of each instalment
e date of default of each instalment
54 In case the debt is acknowledged after the expiry of limitation period, the limitation period will be:
a: Extended by another three years from this date b: Extended for another three years from date of expiry
c extended for 3 years d: Not be extended e: None of the above
55 In term loans, NPA is the account when:
a: Principal has remained past due for 3 months wef March 31, 2004
b: Interest, principal or other charges, remain unpaid for a period more than 90 days wef March 31, 2004
c Interest and principal have fallen due and paid after more than 90 days
d: any of the above which ever is earlier e: None of the above
56 What is the extent up to which the credit is allowed to women as part of the overall credit being extended by the banks:
a 3% of their priority sector credit b 5% of their total credit c 5% of their net bank credit
d 5% of their priority sector credit e 5% of their incremental deposits
57 In case of advances covered under ECGC or DICGC guarantee, the provision under provisioning guidelines is to be made for the outstanding balance:
a: After reducing the amount of cover available from the outstanding balance
b: Without taking into account the above said cover c reducing the amount if actually recovered
d: Any of the above e: None of the above
58 In the group approach system of lending, the following norms have been prescribed by RBI relating to ceiling on exposure of banks:
a: 15% of capital fund for individual borrower b: 40% of capital fund for borrowing group
c 5% for infrastructure projects d: a and b above e: a to c above
59 What is the %age of loan accounts that is to be routed through rural or semi urban branches in DRI advances:
a 2/3rd b 50% c 40% d 1/3rd e 30%
60 What is the reservation for women in SGSY scheme:
a: 60% b: 50% c: 40% d 30% e: 25%
61 There are certain financial instruments whose prices are derived from the price of the underlying currency or interest rate or stocks etc. These are known as:
a Derivatives b Securitisation c Leasing d Factoring e Venture Capital Funding
62 The concepts of Monetary Aggregates and Liquidity aggregates such as M1, M2, M3 and L1, L2 and L3 have been revised on the recommendations of which of the following committees:
a Narasimham Committee b Rangarajan Committee c Raja Chelliah Committee
d Y V Reddy Committee e L C Gupta Committee
63 A process, through which, a member owned organisation becomes a shareholder-owned company, is called:
a Demutulisation b Dematerialisation c Factoring d Derivatives e Securitisation
64 After the conversion of hypothecation into pledge the bank will have the same right as that of:
a: Pledgee b: Mortgagee c: Pledger d hypothecatee e: Hypothecator
65 On CRR the banks get interest ___ on ___:
a: bank rate, entire balance b: 3.5%, eligible balance c: bank rate, eligible balance
d 3.5%, entire balance e: discretion of RBI.
66 Charge created by a borrower in favour of a secured creditor on movable assets without possession, is known as per provisions of ___ Act:
a: Lien, Indian Contract Act b: Assignment, SARFAESI Act c: Mortgage, Transfer of Property Act
d: Hypothecation, Indian Contract Act e none of the above
67 What is the funding ratio for SGSY scheme within state and central govt.:
a: 25:75 b: 33:67 c: 50:50 d 75:25 e: 80:20
68 Which two currencies have been included by RBI in its REER:
a: Japanese Yen and Chinese Yuan b: Chinese Yuan and Singapore Dollar
c Singapore Dollar & Australian Dollar d: Australian Dollar & Canadian Dollar
e: none of the above
69 Which among the following is limited to 150% of threshold yield under the Rashtriya Krishi Bima Yojna?
a the amount of loan to be covered by the insurance policy
b the amount of premium on the insurance policy
c the amount of the insurance d the amount of claim under the insurance policy
e any of the above, whichever is higher
70 What is the amount of claim which will be paid immediately by the Credit Guarantee Fund to a bank if the amount of loan in default is Rs.16 lac on the eligible date :
a Rs.16 lac b Rs.12 lac c Rs.9 lac d Rs.3 lac e none of the above
71 The funding in the ratio of 75:25 is done by Central and State Govt. for which of the following Govt. sponsored
schemes:
a PMRY Scheme b SJSRY scheme c DRI scheme d SLRS scheme e all the above
72 Your branch proposes to sanction loan to a retail trader for the commodities which are not covered by the definition of essential commodities. What is the maximum amount of loan that could be sanctioned to the borrower:
a Rs.3 lac b Rs. 5 lac c Rs.10 lac d Rs. 20 lac e no ceiling
73 A letter of credit is silent about the currency in which the insurance is to be obtained. In which of the following will it be obtained?
a Indian rupees b Euro c US Dollar d Pound e currency of the letter of credit
74 Which of the following confers on the trustees, the power to obtain loan:
a: Trust deed b: Trust deed writer c: Beneficiary d resolution from the trustees e: Commissioner of Charity
75 What is the amount of minimum paid up capital and capital adequacy ratio % for a new private bank:
a: Rs.100 cr, 15% b: Rs.200 cr, 15% c: Rs.200 cr, 12% d Rs.200 cr, 10% e: Rs.300 cr, 10%
76 On which kind of the following deposits, the senior citizens can be allowed additional interest as per RBI directives?
a current deposits b saving bank deposits c term deposits d a to c all e b and c only
77 How many review of the Annual Policy Statement (Credit Policy) are made by RBI and when:
a One, during October b two, during April and October c Three, during July / October / January
d Four, during April, July, Oct & Jan e none of the above
78 The maximum level up to which SLR is maintainable is:
a 25% b 30% c 35% d 40% e 45%
79 As per the loan delivery system recommended by Jilani Committee, the borrowers are required to split their fund based working capital limits or MPBF into:
a term loan and bills b demand loan and cash credit c working capital demand loan and cash credit
d cash credit and bills e term loan and cash credit
80 Prompt corrective action is initiated by RBI in respect of which of the following:
a when capital adequacy is below % b when net NPAs are above 10%
c when return on assets falls below 0.25% d a to c all e a and b
81 What is the level of net NPA of a bank when on satisfying other conditions, the bank can declare dividend:
a less than 9% b less than 8% c less than 7% d less than 5% e less than 4%
82 A cheque with amount in words written as rupees five thousand is presented but the amount in figures is not stated. The payee insists on immediate payment:
a cheque can be paid after consulting the drawer only
b cheque can be paid after obtaining indemnity from the payee and the drawer.
c cheque can be paid for amount in words u/s 18 of Negotiable Instrument Act
d cheque being Inchoate Instrument cannot be paid e none of the above
83 A bearer cheque has been drawn in favour of Mrs. Durani, who wants to negotiate it further. How she will endorse the cheque:
a Durani (Mrs.) b Mrs. Durani c sd/ ( Mrs. Durani) d Any of above e none of the above
84 Which among the following is the most appropriate crossing to consider it a `special crossing’?
a `Pay X through his bank’ within two transverse lines
b Payee’s account through his bank without transverse lines
c Name of the bank without transverse lines
d Name of the bank within transverse lines e c and d
85 Which among the following is provided u/s 22 of Negotiable Instrument Act in the context of a Bill of Exchange:
a drawee to be permitted 48 hours for acceptance of the bill
b drawee can accept the bill by signing on the face of the bill
c presentation of the bill should be at the business place of the drawee
d drawee can be allowed 3 days of grace for making payment
e drawee can make the payment on next preceding business day if the payment falls due on a holiday
86 A term loan is sanctioned for:
a: Working capital purposes b: Investment in current assets c: Investment in fixed assets
d both for fixed assets and current assets e: any of the above
87 What is the maximum amount of donation that a profit making bank make during a year:
a: 5% of its profits after tax b: 4% of its audits profits c: 2% of the profits of the previous year
d: 1% of the profits of the previous year e maximum Rs.5 lac
A borrowing firm submits to the Commercial Bank, the balance sheet with following particulars:
Capital and Reserves 24 lac
Term loans 16 lac
Trade Creditors 12 lac
Expenses payable 8 lac
Bank cash credit 20 lac
Fixed assets 24 lac
Security deposit for Electricity 4 lac
Preliminary expenses 2 lac
Stocks 30lac
Bills receivable/book debts 14 lac
Cash and bank balances 6 lac
Net profits 6 lac
Sales 120 lac
On the basis of above information, please work the following ratio?
88 Current ratio would be:
a 1.10:1 b 1.15:1 c 1.20:1 d 1.25:1 e 1.33:1
89 What will be the quick ratio:
a 0.85:1 b 0.75:1 c 0.50:1 d 0.40:1 e 0.30:1
90 The debt equity ratio would be:
a 2.1:1 b 1.76:1 c 1.34:1 d 1.10:1 e 0.73:1
91 Debtor’s velocity ratio would be:
a 1.4 months b 1.6 months c 1.8 months d 2.0 months e 2.2 months
92 What will be stock turnover ratio:
a 3 times b 4 times c 5 times d 5.5 times e 6 times
93 Under Uniform Practices for Documentary Credit, if quantity is not specified to be exceeded or reduced, it should not exceed the tolerance level of:
a 1% b 2% c 3% d 5% e 10%
94 In case interest rates rise during a year, the current market value of existing Govt. securities generally:
a remain constant b increases c falls d moves up after falling initially e none of the above
95 Which of the following is not a term which is used in the context of Asset Liability Management ?
a Maturity Buckets b Capital Fund c Residual maturity d Interest rate risk e none of the above
96 Which agency processes the loan applications under the scheme Swarn Jayanti Shehri Rozgar Yojna:
a DRDA b Distt Industry Centre c KVIC d Urban local body e Reserve Bank
97 Under which of the following categories, a contract of insurance is categorised?
a contract of agency b contract of guarantee c contract of indemnity
d contract of guarantee and indemnity e an actionable claim
98 Under the provisions of law, what is the maximum no. of companies, on the Board of Directors of which, an individual can become a Director:
a 5 b 10 c 15 d 20 e 25
99 As per RBI directives, what amount a bank is expected to transfer to statutory reserve fund :
a 20% of profits before tax b 25% of the profits c 20% of profits before declaration of dividend
d 25% of profits before declaration and dividend and tax e 25% of profits before dividend declaration
100 A cheque of Rs.15000 issued in favour of M/s Manish Kumar & Sons is deposited by the proprietor of the firm Mr. Manish Kumar in his personal saving bank account, which the collecting bank refuses to collect, to guard itself against conversion, while Manish Kumar insists on that:
a the stand taken by the bank is correct since the cheque belonging to the firm cannot be collected for the account of
individual
b the stand taken by Manish Kumar is wrong as it is discretion of the bank to decide whether to collect or not
c stand taken by the bank is incorrect since in the case of proprietorship, the account of the firm and that of the
individual are considered in the same name and same capacity
d cheque can be collected only if Manish Kumar provides an indemnity
e none of the above
Answers :
01 e 02 d 03 c 04 c 05 a 06 a 07 c 08 d 09 e 10 a 11 c 12 c 13 d 14 a 15 e 16 a 17 b 18 d 19 d 20 c 21 c 22 c 23 e 24 b 25 b 26 c 27 e 28 b 29 c 30 c 31 c 32 c 33 b 34 b 35 d 36 b 37 a 38 b 39 e 40 a 41 b 42 e 43 a 44 c 45 d 46 e 47 c 48 a 49 d 50 e 51 c 52 b 53 d 54 d 55 b 56 c 57 a 58 d 59 a 60 c 61 a 62 d 63 a 64 a 65 b 66 e 67 a 68 b 69 c 70 c 71 b 72 c 73 e 74 a 75 e 76 c 77 c 78 d 79 c 80 d 81 c 82 d 83 e 84 e 85 d 86 c 87 d 88 d 89 c 90 e 91 a 92 b 93 d 94 c 95 b 96 d 97 c 98 c 99 e 100 c
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Question Bank—IV (Assorted Multiple Choice questions)
1 International Bank opened a saving bank account in the name of Mr. R Singh and at the time of opening of the account handed over to him the copy of rules and regulations for conducting the account which also provided that the cheque book should be kept under lock and key and for loss if any arising from not complying with requirement, bank will not be responsible. The customer kept the cheque book in drawer and one of his office colleagues took off one cheque leave and by forging the signatures of Mr. R Singh withdrew the money from the bank. The customer claims the refund of the money:
a the bank is not under obligation to refund the money as the loss has been caused due to negligence on the part
of the customer
b the loss would be shared equally by the customer and bank as both of them have been at fault.
c bank would advise the customer to recover the money from the forger who is office colleague of the customer
d bank is liable for making payment of a forged cheque and will have to restore the amount to the credit of the
account
e any of the above.
2 Your branch maintains a saving bank account of Mr. Dharma, an illiterate person who wants to go abroad for some time. He wants to authorise his wife to operate the account. Which among the following will be most convenient/easy way to achieve the objective:
a power of attorney duly registered with the Registrar of Assurances
b adding the name of wife to the account and making the operations either or survivor
c authorising the another person through mandate (a simple letter)
d making his wife nominee in the account e any of the above
3 Mr. Samendu has been maintaining a current account with Corporate Bank for the last 3 years with substantial balance of Rs.3 lac. Bank gets a confirmed report that he has filed an insolvency petition. Bank also receives a cheque of Rs.1.50 lac for payment:
a cheque will be returned by the bank as payment will not be a payment in due course
b cheque will be returned as property is now vested with official assignee
c cheque will be returned under such doubtful circumstances
d cheques will be paid and operations in the account will be permitted till the competent court declares him insolvent
e none of the above
4 A partnership firm having its current account with your branch withdraws cash in the morning amounting to Rs.45000. At noon it withdraws more amount of Rs.27000. In the evening yet another withdrawal of Rs.28000 is made by the firm. What is the status of application of Banking Cash Transaction Tax:
a bank is required to deduct the tax as the total amount of withdrawal on a single day is Rs.1 lac
b bank is not required to deduct because the amount is not more than Rs.1 lac
c bank is not liable to deduct because the amount of single withdrawl is less than Rs.1 lac
d bank is required to deduct as the amount of each withdrawal is above Rs.25000
e none of the above
5 Your branch has granted a demand loan of Rs.60000 to Sh. Banwari Lal against his term deposit of Rs.1 lac. The branch has received a court attachment order for Rs.50000 relating to this deposit. Which of the following action should be taken by the bank:
a since the deposit is already under lien of the bank, bank should ignore the order
b since there is adequate balance in the FDR account to meet the liability of the loan, the bank can follow the instructions in the attachment order after recovery of its own dues
c bank should seek specific confirmation from court before adjustment of its dues
d the branch will meet the attachment order liability on date of maturity of the FDR
e bank’s liability is of contingent nature due to which the liability under attachment order will be met first.
6 Sh. Des Raj a blind persons approaches Meerut branch of Commercial Bank for opening a current account as he is engaged as commission agent in fruit business. The bank however refuses to open the current account giving the reason that such accounts are not permitted in the light of practical difficulties involved in operation of the account:
a Refusal of the bank is not justified as a blind person is competent to contract and can also open a current account
b Refusal of the bank is justifiable in the light of practical difficulties.
c Refusal of the bank is justified in the light of possible loss which the customer may incur
d b and c
e only c
07 A company is having its current account with 3 branches of your bank and on a single days makes cash withdrawals of Rs.40000 from one branch, Rs.35000 from the 2nd branch and Rs.25000 from the 3rd branch. What is the status of application of Banking Cash Transaction Tax:
a bank is required to deduct the tax as the total amount of withdrawal on a single day is Rs.1 lac
b bank is not required to deduct because the amount is not more than Rs.1 lac
c bank is not liable to deduct because the amount of single withdrawl is less than Rs.1 lac
d bank is required to deduct as the amount of each withdrawal is of Rs.25000 or above
e Bank is not required to deduct as the amount is less than Rs.1 lac for each branch and the amount withdrawn from all branches is not to be aggregated
8 The exposure ceiling on individual borrowers under the group approach in Indian banks from March 31, 2002 as per RBI directives is restricted to:
a 12% of the capital fund b 15% of the capital fund c 18% of paid up capital
d.22.5% of paid up capital e 15% of the paid up capital
9 The term ARC used in Narasimham Committee Report-II stands for:
a Asset restructuring corporate b Asset re-location company
c Asset reconstruction company d Asset redeployment corporate
e none of the above
10 Which of the following types of operations modes are permitted under the Senior Citizens Saving Scheme 2004:
a generally single account b joint mode with the spouse c joint operation with any one
d a and b only e a to c all
11 Mr. Akash Khanna is having his personal saving account with United Bank’s Chandigarh branch. He is also the sole trustee of Khanna Charitable Trust and operates the account of the trust which is also maintained with the bank. In connection with an important personal work he proposes to proceed abroad for 6 months and seeks your guidance for smooth operations in the accounts:
a he can give mandate in favour of some of his friend or relative for operations in the accounts.
b he can execute a power of attorney in favour of a known person for operations in both the accounts
c he can give mandate or power of attorney for his personal account
d he cannot delegate the powers to any one in case of trust account and could leave some cheque leaves properly signed for use in case of trust account e c and d
12 What is the amount of balance in a deceased depositor’s account, where the bank, depending upon the circumstances may ask for a legal representation such as succession certificate, letter of administration, probate:
a in case of joint survivorship accounts, no requirement
b in case of nomination accounts, no requirement
c in case of accounts with no nomination or survivorship provision, discretion of the bank
d Banks cannot ask for such representations e a to c
13 A borrower in your branch has created an equitable mortgage. The registration, under Section 125, of such a charge with Registrar of Companies is:
a: Required to make it binding on liquidator b: Not required being oral mortgage
c: Required sometimes when memorandum of deposit is submitted d: a and c e Never required
14 What is the maximum time limit for the banks to settle the claims in respect of a deceased depositors and release payments to the survivors/nominees :
a 7 days b 10 days c 15 days d 30 days e no time limit
15 A partnership firm wants to open a Current Account with your branch, but it is not registered with Registrar of Firms.
a Is the registration of a partnership firm essential ? b: It is not essential as it is only optional
c: It depends on will of creditors of the firm d: It depends on will of the bank e c and d
16 RBI regulates the money market and SEBI regulates the capital market. Which segment is regulated by IRDA, out of the following sector:
a telecom b insurance c banking d software e b and d
17 In foreign exchange transaction, which of the following is the basic buying rate:
a Bills buying rate b TT buying rate c Direct rate d Indirect rate e a and b
18 The cases of deceased depositors where the claims have been received and pending beyond the stipulated period are required to be reported to which of the following:
a Board of Directors of the bank b Ombudsman c Reserve Bank of India
d Customer Service Committee of the Board e All the above
19 Which of the following kinds of joint accounts cannot be categorized as an account opened with survivorship clause:
a either or survivor b anyone or survivor c former or survivor
d letter or survivor e none of the above
20 X opened an account with your branch under the Senior Citizens Saving Scheme 2004 for 3 years. He needs the funds to meet his medical expenses by raising a long on the basis of pledge of the deposit. What precautions would be taken by the bank:
a the loan cannot be sanctioned under the scheme
b the loan amount should not be more than 80% of the amount of original deposit
c the loan amount will be linked to present maturity value of the deposit
d the loan would be allowed after obtaining a written request supported by a estimate from hospital e none of the
above
21 When a seller undertakes to make the goods available for export, at his factory, such arrangement is called:
a Ex-works b FOB c CIF d FOR on ship e none of the above
22 Which among the following is not correct in connection with the Lok Adalats, which have come into prominence in the recent past?
a proceedings before Lok Adalat are deemed to be judicial proceedings under Civil Procedure Code
b Lok Adalat has power to summon and enforce attendance of witnesses
c Lok Adalat have the same powers which are vested in a civil court under the Code of Civil Procedure.
d Lok Adalats can entertain pecuniary (financial) cases without any ceiling on the amount
e none of the above
23 International Bank Limited negotiated documents worth Euro 15000 against a without-recourse irrevocable letter of credit issued by a bank in UK. When the documents were sent to the opening bank in UK, these were returned with the reason that the bill of lading and the insurance certificate attached to the documents are fake. Opening bank also refused to make the payment against these documents, which are otherwise as per terms of the letter of credit. What is the position of International Bank Limited?
a Bank has acted negligently by accepting fake documents due to which it cannot recover the money from opening
bank
b Bank has the option to recover the money from the seller who has tendered fake documents
c Bank can rightly claim the money from opening bank under UCPDC provisions since the bank was to see the
regularity of the documents and was not responsible for their being fake
d Bank will have to approach international court e a and b above
24 For financing a pump set, which of the following standards will be taken into account?
a ISO 9001 b ISO 9002 c ISO 9004 d BIS e BIS 2101
25 What is the age criteria for under Senior Citizen Saving Scheme 2004 for opening the account:
a 55 years b 65 years c 60 years d 55 years in case of those who are retiring voluntarily
e c and d
26 Liability of the guarantor in a contract of guarantee is:
a: Unlimited where it is not revoked
b: Irrespective of the liability of the principal debtor it does not continue
c: Co-extensive with that of the principal debtor d: a and c e None of the above
27 Because the bank’s right under general lien is an implied pledge, in case of default, the bank, after giving a proper/reasonable notice to the borrower can:
a: Convert general lien into a particular lien
b: Sell the security under certain circumstances without filing a suit
c: Can surrender its right, if told by RBI d: a and c e None of the above
28 In case the pledgee fails to re-transfer the possession of the goods to the pledger on repayment of loan, within a reasonable period and the goods are damaged, according to Section 161 of Indian Contract Act:
a: Pledgee would be responsible for loss, if any b: Pledger would be responsible, for loss, if any
c: Godown-keeper would be responsible d: damage would be to the account of both of them equally e None of the above
29 For a charge hypothecation, registration with Registrar of Companies u/s 125 of Indian Companies Act:
a: Would be in bank’s interest b: Registration not required as hypothecation is just like a pledge
c: Registration is compulsory because of floating charge
d: registration is compulsory because it is charge on actionable claims e None of the above
30 Your branch receives a cheque of Rs.20000 drawn from SB account in favour of LIC of India by your customer maintaining SB and Current Account. SB account has been showing balance of Rs.15678 and the current account Rs.12940:
a cheque would not be passed as the account on which cheque is issued does not have sufficient balance
b cheque would not be passed as bank cannot transfer the balance from one account to another account even though
there is instruction from the account holder
c cheque would be passed after speaking to the customer over phone
d cheque could be passed after transferring the balance from one account to another
e any of the above, according to the merit of the customer
31 What is the role of advising bank in case of a letter of credit:
a to forward to the seller and to negotiate documents
b to verify the genuineness of LC and forward it to the seller/beneficiary
c to give confirmation that payment would be made by it in case the issuing bank fails to make the payment
d to allow pre-shipment credit if asked for by the beneficiary e all the above
32 What will be due date for a bill dated 1.2.2004 payable 45 days after sight and the bills was accepted on 6.2.2004:
a: 23.3.2004 b: 25.3.2004 c: 26.3.2004 d: 28.03.2004 e None of the above
33 For banks to enter into insurance business, among others, the NPA level should be:
a not more than 10% b not more than 9% c not more than 5% d reasonable e none of the above
34 The maximum period for which a certificate of deposit can be issued:
a 7 days b 15 days c 179 days d not more than 12 months e 3 years
35 Model Bank issued an FDR in the name of Mr. X and his wife W. Mrs W comes to the bank and request for premature payment to meet the expenses on treatment of Mr. X who is admitted to one hospital and cannot sign, because of fractured hands:
a the request of W will be considered on sympathetic consideration
b the request of W will be considered on production of certificate from the hospital to the effect that Mr.X is admitted
c the request of W will be turned down altogether
d payment can be made after verifying the facts and after obtain thumb impression of Mr. X in the hospital, witnessed
by the attending Doctor
e none of the above
36 Corporate Bank has sanctioned a loan of Rs.5 lac for purchase of a car to a lawyer. Under which of the following categories it will be classified:
a small business b professional and self employed c small scale service and business enterprise
d self employed e non-priority sector advance
37 Production of oil seeds and pulses is connected with which of the following:
a green revolution b yellow revolution c blue revolution d white revolution e none of the above
38 A cheque has been presented through clearing house and bears special crossing of two banks.:
a: Drawee bank will pay to the bank in whose favour special crossing appears first
b: Pay to either of the banks and payment shall be in due course
c: Return the cheque with the remarks crossed to two banks d: a and b
e None of the above
39 A cheque has been endorsed in favour of Z with the condition that payment of the cheque can be made to him only when he marries Y. In this case the drawee bank should ensure while making payment that:
a: Z married Y b: There is no need for bank to ensure marriage of Z to Y
c: Drawer that marriage has taken place d: if cheque is presented for payment, bank shall pay the cheque
e b and d
40 Bank International Limited had granted a loan of Rs.65 lac to M/s Juary Fertilisers Ltd few years back but due to problem with the industry, the account could not be conducted properly for few months and has become sub-standard. Party wants to settle the account with the bank to make it legally binding on both the parties without involving itself in a lengthy legal struggle. Bank is also agreeable for their proposal:
a they can enter into a compromise settlement and get it approved from High Court of the State
b they can go to a Lok Adalat and get the consent decree
c they can go to a notary public and give declarations
d they can approach a Lok Adalat of DRT for a consent decree e any of the above
41 A cheque has been issued in favour of A or order. At his request the drawer converts the order to bearer and puts his small initials to authenticate the cancellation:
a: The bank will make the payment as mandate is clear
b: The bank will not make payment as cancellation requires full signatures
c: The bank seek confirmation from ask the drawer whether it is his signatures
d: a and b e c and d
42 While providing finance to a project, the term Net Present Value method represents which of the following:
a to find out the present value of the investment made in the project
b a tool to understand as to what shall be the present value of the loan being given at the end of a particular period.
c present value of the cash flows which the project would generate over a time period on the basis of a discount
factor
d present value of the cash outgo over the life time of the project so as to understand the actual outlay
e the discount rate at which the present value of future cash flows becomes zero taking into account the investment.
43 Which of the following method can be used to calculate the per capita income of a country:
a: Total family income / number of family members b: National income / total population
c: Total income of various industries / total number of industrial workers
d: Total Govt. revenue / total population e a and b
44 Which among the following aspects are taken into consideration by RBI for its Prompt Corrective Action (PCA), while initiating any action under the scheme:
a capital to risk assets ratio b non-performing advances c return on assets
d a and c above e a to c above
45 Which among the following is the first bank to return capital to the Central Governnent:
a State Bank of India b Punjab National Bank c Oriental Bank of Commerce
d Canara Bank e Corporation Bank
46 Project A has higher fixed cost than the project B. What will be true with regard to Break even point of these project, other things being equal:
a project A has higher break-even and scope of better profits
b project A has higher break-even and scope of lower profits
c project B has higher break-even and scope of better profits
d project B has higher break-even and scope of lower profits
e Break even shall be equal based on the cash flows
47 Under which section of Banking Regulation Act 1949, every banking company has to submit annual statement of all those accounts which are lying under in-operative category for the last 10 years (called unclaimed deposits) to RBI:
a: 27 b: 26 c: 19(2) d: 15 e 12
48 A company has been formed to undertake the business of software development. This objective of the company would be found in which of the following documents:
a Certificate of Incorporation b Certificate of Commencement of Business
c Resolution from Board of Directors d Articles of Association e None of the above
49 When a banker is acting on the standing instructions of a customer, their relationship is of :
a: An employer and an employee b: An owner and a servant c: A trustee and beneficiary
d: A principal and an agent e Agent and principal
50 Under which of the following methods of depreciation on fixed assets, the annual amount of depreciation decreases:
a Written down value method b Straight line method c Annuity method
d Insurance policy method e a and c above
51 An importer has imported from Australia (invoicing Aus Dollar) certain plant and machinery the payment of which is to be made 2 months after. On the basis of prevailing situation the home currency is expected to record depreciation compared to Aus Dollar. What should be importer do:
a He must go for a swap of Aus Dollar with Rupee
b He must arbitrage in Aus Dollars
c He should book a forward contract and purchase Aus Dollar
d He should sell Aus Dollars immediately
e He should purchase Aus Dollars spot
52 The methodology that focuses on eliminating the defects and facilitating data driven decision making:
a management by objectives b customer relation management c six sigma
d strategic management e Total quality management
53 A bank carries positive gap in its asset liability position i.e. rate sensitive assets are higher than the rate sensitive assets. What would the impact of increase in interest rates:
a Net interest margin would decrease b Net interest margin would increase
c Market value of the assets would increase d Market value of the liabilities would increase
e There will be no impact.
54 Collection period of its sundry debtors has been increasing in respect of a firm but the period available to it for payment to sundry creditors has been decreasing. This would lead to:
a increase in its working capital requirements b decrease in its working capital needs
c no change in its working capital needs d higher amount of interest payment
e No impact on any of the financial parameters
55 A process under which it is expected that a combined entity (combination of two or more) would be able to exceed the individual earning of the entities being combined:
a six sigma b total quality management c synergy
d internal rate of return e management by profiteering
56 The facility of remittance is not available to which of the following types foreign nationals of non-Indian origin:
a Citizens of Australia & Canada b Citizens of Nepal & Bhutan c Citizens of Nepal and Bangladesh
d Citizens of Bhutan and Pakistan e None of the above
57 A registered firm has certain advantages over the non-registered firms. Where is a partnership firm registered:
a: Registrar of firms b: Registrar of companies c: Registrar of deeds
d: Sub-registrar estates e a or d
58 A banker should not pay the cheques drawn by a customer who has been sentenced and sent to jail for:
a: Rape b: Criminal liability c: Moral ground d: Insolvency e a and b
59 You are approached by a person for opening an account in the name of an executor of a will. You require which of the following documents:
a: Registration certificate b: Memorandum of association and articles of association,
c: Probate d: letter of administration e None of the above.
60 What is a probate:
a: A will certified by a court for settlement of property of the deceased.
b: It is will of the deceased c: The last will of a person certified by the legal heirs
d: a registered will of the deceased e None of the above.
61 U/s 26 of Negotiable Instruments Act:
a: A minor can not draw promissory note or a cheque.
b: A minor who has been admitted to a partnership firm can draw a cheque .
c: A minor can draw, accept, endorse and negotiate bills of exchange, promissory note or cheque binding all parties
except himself.
d: a minor can be held liable for the bill of exchange he has accepted e None of the above.
62 A foreign national visiting India wants to open an NRO account during his visit:
a account can be opened b account cannot be opened
c account can be opened with RBI permission only d account can be opened for foreign currency transactions
e none of the above
63 Holder in due course is defined u/s....of NI Act
a: 10 b: 9 c: 18 d: 8 e 13
64 Mr. X and Y are having a joint account in which they have nominated Mr. A. On death of Mr. X, Mr A approaches the bank for payment?
a being nominee, payment would be made to A
b Y being alive, payment would be made to Y as survivor
c Y being alive and payment would be made to nominee and Y jointly
d payment would be made to Y and legal heirs of X
e payment would be made as per succession certificate which has to be submitted
65 In which of the following currencies, an FCNR-B cannot be allowed to be opened:
a US $ and Euro b Euro & Australian Dollar c Canadian Dollar & Pound
d Japanese Yen and Euro e Singapore Dollar and Dinar
66 Which of the following categories of persons can open an FCNR-B account:
a Overseas Company b Overseas firm c Overseas corporate body d NRI of Indian nationality or origin e c and d
67 A software that restricts the access to and from a network and is designed to protect from outside intrusion is called:
a firewall technology b network protection technique c virus protection technology
d total protection technique e morphing
68 The break-even point in terms of capacity utilization of a project in its 2nd and 3 year would be 55% and 50% respectively while the actual level of operation is 52% and 54% respectively:
a .there will be substantial profit b. it will incur loss
c there will be loss in the 2nd year and profit in the 3rd year
d there will be profit in the 2nd year and loss in the 3rd year
e there will be neither profit nor loss
69 In computer software, the term ‘Morphing’ refers to which of the following:
a animation technique in which one image is gradually turned into another
b data conversion technique by way of use of codes c conversion of digital picture to analog images d a soft ware that saves a network from intrusion
e software that links one server to another
70 What is the amount of loan which can be extended against the security of a certificate of deposit:
a 25% b 50% c 75% d No loan can be allowed e none of the above
71 Which among the following is not a condition for a case to be referred to Corporate Debt Restructure forum:
a the aggregate exposure should not be more than Rs.10 cr b. there should be atleast two creditors c. the reference can be made by any creditor having 20% or more share in the exposure d the reference can be for standard and sub-standard accounts e none of the above
72 The receivables of various loans and obligations are put together and distributed amongst investors, in which of the following:
a leasing b factoring c securitisation d venture capital e forfaiting
73 Popular Bank has issued a term deposit receipt in the name of Mr. A and B to be operated as `former or survivor’. A approaches the bank for addition of name of Mr. X, his son and also nominate Mr. Z his brother in law. He claims that the money belongs to him?
a addition of name would be allowed but not nomination
b nomination would be permitted but not addition of name
c addition of name and nomination would be permitted as request is from former
d without consent of B addition or nomination cannot be accepted e none of the above
74 Which of the following categories of borrowers are not eligible for assistance under KVIC’s margin money scheme?
a Partnership firm b individuals c cooperative societies d trust registered with KVIC
e none of the above
75 Which of the following is not correct with regard to prevention of Money Laundering provisions:
a it is acquiring, owning, possessing or transferring any proceeds of money of crime
b it is a process of converting money obtained illegally to appear to have originated legitimate sources
c India has passed the Prevention of Money Laundering Act to identify and control the transactions of money laundering
d Records relating to money laundering transactions are to be preserved by banks for 20 years
e Offences under money laundering are cognizable and non-bailable.
76 The minimum amount of a certificate of deposit can be:
a Rs.1 lac b Rs.3 lac c Rs.5 lac d Rs.10 lac e no minimum is prescribed
77 The holder of a negotiable instrument is holder in due course if:
a: He receives the instrument in good faith and without negligence
b: He receives the instrument for lawful consideration
c: He receives the instrument before its maturity
d: All the above e none of the above
78 If a promissory note is payable in instalments, the period of grace for payment will be available:
a: Only once b: On each instalment c: Only on last instalment d: no grace period available for promissory note
e None of the above
79 Under Gold Card scheme for exporters, based on credit worthiness of the card holder, which of the following is not correct:
a banks could consider waiver of collateral security
b banks could consider exemption from ECGC guarantee cover
c requests for credit would be considered quickly maximum within 7 days
d in principal limits would be set up for 3 years
e provision for stand-by limit of 20% to meet urgent credit needs would be made.
80 Repayment of loans under Swarnjayati Shahri Rozgar Yojna should be made in:
a 2-3 years b 3-5 years c 3-7 years d 5-7 years e more than 6 years
81 Repayment under the Scheme for Liberation and Rehabilitation of Scavengers (SLRS) has to be in a period of:
a 2-5 years b 3-5 years c 3-7 years d 5-7 years e more than 7 years
82 For which among the following the bank provides relief in interest rate to the borrower in education loan?
a when he is from a very poor family
b when loan is sanctioned for a highly prospective education from job aspects
c when loan is repaid during the moratorium period
d when interest portion of the loan is repaid during the moratorium period
e when interest as well as principal of the loan is paid before moratorium
83 Under which kind of following mechanisms, the DSB returns being submitted by banks to RBI, fall:
a early alert system b on-site surveillance c off-site supervision
d risk based supervision system e prevention of money laundering
84 Which of the following cannot enter into a valid contract?
a a person temporarily of unsound mind and presently of sound mine
b a pardanashin lady c an illiterate person d a blind person
e a person of age of 17 plus years
85 Dearness allowance increase for bank employees is linked to which of the following:
a General increase in the inflation b wholesale price index c consumer price index
d consumer price index for industrial workers e wholesale price index for industrial workers
86 Preservation of bank records is mandatory under which of the following Acts?
a RBI Act 1934
b Preservation of Books Act 1902
c Indian Evidence Act
d Banking Regulation Act 1949
e Companies Act 1956
87 Which of the following accounts are reported under CVC directions:
a willful defaulters of Rs.10 lac and above b willful defaulters of Rs.25 lac and above
c loan frauds of Rs.10 lac and above d loan write-off of Rs.10 lac and above
e all the above
88 Under the rating system called CAMELS, the term `M’ stands for which of the following:
a management of assets and liabilities b management of non-performing assets
c management of human resources d management quality e management policies
89 Which of the following documents relating to a loan transaction, can be kept blank by a bank:
a: hypothecation agreement b: Memorandum of mortgage c: Share transfer deeds
d any of the above e none of the above
90 A loan agreement is executed but it is not stamped properly:
a: It can be stamped later on after payment of penalty as per provision of State Stamp Acts and can be treated as a
valid documents, after obtaining permission of the collector of stamp duty.
b: The court can allow the bank to pay the duty with fine and validate the document
c: Since at the time of execution, the stamp duty has not been paid, this cannot be treated an agreement
d: a and b e: a to c any.
91 When there is an agreement in writing for creation of an equitable mortgage between the parties and this forms a part of an equitable mortgage, the agreement in itself is an operative instrument. This is not simply an evidence:
a: For such a document the registration is necessary b: For such a document registration is not necessary
c: This depends upon the will of the bank d: a and b e None of the above
92 A banking company can acquire shares in a company subject to which of the following ceiling:
a not exceeding 30% of the capital of the bank or 30% of the capital of the company, whichever higher
b not exceeding 30% of the reserves of the bank or 30% of the capital of the company whichever is lower
c not exceeding 30% of the paid up capital and reserves of the bank or 30% of the capital of the company whichever is
lower
d 30% of the capital of the company
e 30% of the authorised capital of the bank or 30% of the capital of the company
Problem. Following are the financial figures of a concern as on 31.03.2003
Particulars. Rs.
Capital 8,000
Sundry Debtors 10,000
Cash in Hand 3,000
Machinery 17,000
Prepaid expenses 1,000
Fixed deposit with bank 5,000
Bills payable 2,000
Debentures 22,000
Expenses outstanding 4,000
Stock 4,000
Sundry creditors 4,000
Based on this information, please work out the following:
93 Net working capital in this case will be:
a Rs. 5,000 b Rs. 2,000 c Rs. 13,000 d Rs. 22,000
94 From the financial figures given in the above question total working capital works out to :
a Rs. 23,000 b Rs. 36,000 c Rs. 22,000 d Rs. 14,000 e Rs.12000
95 If in the above problem, the sales are Rs.115000, the working capital turnover ratio would be:
a 3 b 5 c 7 d 8 e 9
96 The liquidity aggregate L1, as per recommendations of YB Reddy Committee represents which of the following:
a M 1 + deposits of financial institutions b M 1 + deposits of post office
c M 2 + deposits of financial institutions and post office
d M 3 + deposits of post offices excluding NSCs
e M 3 + deposits of financial institutions and post office
97 In a real time gross settlement system, which is true with regard to the transmission, processing and settlement of instruction:
a it is carried through a net work provided by SWIFT
b it is carried on a batch-system basis
c it is carried on a plat form provided by leading public sector banks
d it is carried on a continuous basis as and when the instructions are received and accepted by the system
e it is carried when authorised by RBI
98 Proceeds of goods and services exported by an exporter are required to be brought to India within 180 days normally. But a status holder can avail the normal repatriation period for export proceeds up to ___, instead of normal 180 days:
a 360 days b 300 days c 270 days d 225 days e 200 days
99 In a computer system, the security is important for which of the following reasons:
a to secure the data b to improve the reliability of the data
c to improve the quality of data d to analyse the data e all the above
100 Corporate Bank decides to allow a cash credit limit of Rs.25 lac to a trading firm in one of its branches in Jaipur. The proposes to secure the loan by mortgage of a commercial property (located in Kolkata) of the equal value, in the name of one the partners in the firm, who is sick and is admitted in hospital. The firm wants the equitable mortgage to be created in the hospital itself:
a can be accepted, if the doctor certifies the illness and it one of the witness.
b cannot be created because the hospital is not part of the bank branch
c can be created if the hospital is located at a notified centre
d can be created if the title deed of the property is handed over to the bank officials
e can be created if the hospital would have been in Kolkata instead of Jaipur as property is located in Kolkata
Answers
01 d 02 c 03 d 04 b 05 b 06 a 07 e 08 b 09 c 10 d 11 e 12 c 13 a 14 c 15 b 16 b 17 b 18 d 19 e 20 a 21 a 22 d 23 c 24 d 25 e 26 c 27 b 28 a 29 c 30 a 31 b 32 b 33 d 34 d 35 d 36 e 37 b 38 c 39 b 40 d 41 b 42 c 43 b 44 e 45 b 46 b 47 b 48 e 49 e 50 a 51 c 52 c 53 b 54 a 55 c 56 b 57 a 58 d 59 c 60 a 61 c 62 a 63 b 64 d 65 e 66 d 67 a 68 c 69 a 70 d 71 a 72 c 73 d 74 a 75 d 76 a 77 d 78 b 79 c 80 c 81 c 82 d 83 c 84 e 85 d 86 d 87 b 88 d 89 c 90 a 91 a 92 c 93 c 94 a 95 b 96 d 97 d 98 a 99 a 100 c
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Question Bank—V (Assorted Multiple Choice questions)
1: If a minor admitted to a partnership firm for benefits becomes major and does not offer any declaration about either becoming the partner of the firm or about intention to leave the firm as a partner within 6 months of the date on which he became major or within 6 months of the date when he first got information about his status as beneficiary of the firm:
a: It will be presumed that he is a partner b: It will be presumed that he is not a partner
c: It will be presumed that his intention is not to become a partner
d: b and c e None of the above
2: An attachment order of Rs.80000 on a partnership firm is received, whose current a/c shows a balance of Rs.8000. The individual accounts of the partners A, B and C are showing credit balance of Rs.40000, Rs.34000 and Rs.2500 respectively. To meet the payment stated in the order, how much amt will be payable from A’s account ?
a Rs.32500 b Rs.35500 c Rs.37500 d Rs.40000 e Rs.39500
3 M/s Rahim Khan and Company import certain goods and after payment of the documents to the bank, send the shipping documents to their clearing agents M/s Shoab Clearing Agents with the instruction that they may dispose of the goods and also stipulate the minimum rate for which these goods can be sold. The clearing agents sell the goods for a price little less than the stipulated price. M/s Rahim Khan and Company claim the return of the goods from the buyer:
a since the clearing agents have sold the goods for a price lower than the stipulated one, the buyer will have to return
the goods.
b since the clearing agents have sold the goods at a lower price without seeking confirmation from the principals, the
goods will have to be returned
c the buyer cannot be forced to return the goods, since they do not have any notice of the condition stipulated by
the principals
d the buyer cannot be forced to return even if he had the information about the condition
e none of the above
4 A bill of exchange is drawn by M/s Kasturi Lal and Sons on M/s Shiva Traders in consideration of purchase of goods, Mr. Shayam Kumar being its payee. Shayam Kumar endorsed the bill in favour of Mr. Shanti Prakash who had endorsed it in blank. It is stolen by Mr. Sudhir Phatke, an employee of Shanti Prakash and delivered to M/s Dyal Traders for value, but it is dishonoured on presentation for payment. From whom can M/s Dyal Traders recover the amount on the bill?
a From Mr. Shanti Prakash b From M/s Shiva Traders c From M/s Kasturi Lal & Sons
d From Shyam Kumar e From all the above
5 Non performing advance is an advance (except Cash Credit) which remains past due for a period of more than
a: 360 days b: 180 days c: 90 days d 30 days e: none of the above
6 Credit Bank maintains a current account of M/s Chitam Enterprises in which the firm deposits a cheque of Rs.52000. On careful examination, the bank finds that the words `non-negotiable’ are written on lower part of the cheque without the parallel transverse lines. The concerned officer of the bank is not sure about whether to accept it for collection or not:
a it is uncrossed instrument and two parallel transverse lines should be drawn
b it is not a clear direction from the drawer due to which the cheque should not be accepted for collection
c the words `not-negotiable’ can be written without parallel lines. But this will not be considered as crossing. It can be
accepted for collection.
d the transferability of the instrument has been affected due to these words, due to which the instrument should not
be accepted.
e none of the above
7 Your branch receives a dividend warrant of Rs.560 in favour of one Mrs. Rama Devi presented by State Bank in clearing. On the back side of the dividend warrant, it is stated that payee’s discharge is needed but the payee has not signed the same in giving discharge.
a the dividend warrant will be returned unpaid as the requirement of discharge has not been met, which the drawer
had imposed. Payment if made, will not be a payment in due course.
b the dividend warrant will be returned as it has been presented by another bank which has not given its confirmation
c the dividend warrant will be paid without discharge from the payee, as such discharge is not a legal requirement
d the dividend warrant will be paid after confirmation from the collecting bank
e none of the above
8 New Delhi branch of Modern Bank issued a fixed deposit of Rs.3 lac for 5 years in the name of Mr. S Subramaniam who raises a loan of Rs.50000 against the FDR with a view to meet exigencies at a later stage. He comes for addition of the name of his son, as he is not keeping good health for few months.
a the request of the depositor will be accepted being a genuine reason
b the request will be accepted since the addition is for the his son’s name
c the request will be accepted since the FDR is to mature after long time
d the request cannot be accepted till the loan is outstanding
e any of the above
9 Universal Bank is approached by Sameer, a 17 old boy with his PAN card and other necessary information for opening a current account. He is having substantial investments in shares and receives regular dividend. His father has recently expired and his father’s investment will also be transferred in his name in future:
a the account cannot be opened as it exposes the bank to undue risk
b the account cannot be opened as it is for share transactions
c the current account can be opened by the minor as he can draw, negotiate and give valid discharge
d the current account can be opened by Sameer alongwith his mother, if she is willing to do the same
e none of the above
10 What is the no. of minimum and maximum shareholders in a public limited joint stock company:
a minimum 2 maximum 7 b minimum 3 maximum 50 c minimum 4 maximum 50
d minimum 7 maximum 50 e minimum 7 maximum no ceiling
11 A loan is sub-standard asset for a period of more than one year. The provision is to be made at the rate of....of the outstanding amount:
a: 10% b: 20% c: 30% d: 100% for the unsecured portion e a and d above
12 Which of the following is a situation that can be termed as negative working capital?
a when current assets are equal to current liabilities b when current assets are less than current liabilities
c when current assets are more than current liabilities d when there are losses and current ratio is 1:1
e when the current ratio is below the ideal ratio of 1.33:1
13 What is the maximum amount for which the CGFTSI guarantee cover is available:
a: Rs.18.75 lac b: Rs.25 lac c: 75% of the amount on date of NPA d: Rs.10 lac e a and b
14 A loan of Rs.4 lac each is allowed by bank Z to a doctor having his own clinic and a lawyer having his own practice. These loans shall be classified as:
a: loan to doctor as priority sector and to lawyer as non-priority sector
b: loan to lawyer as priority sector and to doctor as non-priority sector
c: loan to doctor and to lawyer as non-priority sector
d loan to doctor and to lawyer as priority sector
15 Premium is to be paid by the bank to DICGC for the half-year ended Sept 2005. As on which date the amount of deposits is to be taken into account:
a last Friday of Mar 2005 b Last day of Sep 2004 c last working day of Mar 2005
d last Friday of Sep 2004 e none of the above
16 The term ‘firewall technology’ refers to:
a computer software that protects a computer system from virus.
b computer software that removes the computer virus.
c computer operating software.
d computer hardware to protect a computer from incident of fire
e computer software that protects a computer system from outward intrusion.
17 What is the maximum no. of partners in a non-banking firm.
a 20 b 20 excluding the minor partner c 10 d 10 including the minor partner
e 20 including the minor partner
18 Risk arising from failure of computer system and loss of data is:
a: credit risk b: system risk c: liquidity risk d: operational risk e computer risk
19 On which among the following, a garnishee order is not applicable?.
a funds in the account at the time of receipt of garnishee order
b term deposit receipt which is yet to mature
c recurring deposit the maturity of which will be 3 months after
d a cheque realization advice that has not been credited to the account
e amount deposited by the customer after receipt of the garnishee order
20 A mortgagor sells the property to the mortgagee under the condition that the sale would become absolute on fulfillment of specific conditions:
a: This mortgage by conditional sale b: This is English mortgage c: This is a sale cum mortgage transaction
d: This is a sale with promise to buy back e a and c
21 Who can deposit the title deed with the bank for creating an equitable mortgage:
a: Owner b: His authorised agent c a person directed by the court d: a and b e: a to c
22 Whether a trustee can appoint agent:
a: As a trustee, he cannot b: As individual person, he can c: Under all circumstances, he cannot
d: a & b both e a to c
23 A state govt. guaranteed advances would be treated NPA if overdue for more than 90 days wef:
a: 31.03.2005 b: 31.03.2006 c: 31.03.2007 d To be treated NPA for income recognition purpose only
e: Such accounts are not to be treated as NPA.
24 Advances against their own shares are not allowed by banks because these are prohibited under:
a RBI Act 1934 b Negotiable Instrument Act c Banking Regulation Act 1949
d SEBI Act e c and d
25 A returning non-resident Indian wants to open an account with you but wants to be sure about what can be repatriated by him in case of need.
a no repatriation allowed b only interest can be repatriated c only principal can be repatriated
d principal and interest both can be repatriated e none of the above
26 Which of the following defines a foreign exchange forward contract better?
a exchange rate that is determined in future
b exchange rate that is determined in future but delivery is made now
c exchange rate that is determined now but delivery of currency is made in future on a day fixed at the time of making
the contract
d exchange rate and delivery, both are determined in future e none of the above
27 Modern Bank had granted a term loan for purchase of a car to Mr. Ramesh Chander which has become time barred debt last month. A letter written 8 months back, by Mr. Ramesh Chander to his friend Mr. Satish Kumar falls in the hands of the bank in which he had requested Mr. Satish Kumar to give him certain funds as he has to repay the above stated loan of the bank.
a the letter can be treated as acknowledgement of debt if particulars of the loan match with those given in the letter
which would extend the limitation period
b the letter can not be used for the purpose of the limitation period as it is not stamped
c the letter can not be used for limitation purpose as it is not addressed to the bank
d the letter can be used for limitation period but it is not stamped adequately
e all the above
28 Official language policy came in to force with effect from which of the following dates:
a Aug 16, 1947 b Sept 14, 1947 c Jan 26, 1947 d Jan 26, 1950 e Aug 16, 1950
29 What is the maximum amount for the purpose of arbitration under Banking Ombudsman scheme 2002.
a Rs. 2 lac b Rs. 3 lac c Rs. 5 lac d Rs. 10 lac e None of the above
30 In case of overdraft facility, where the account is showing credit balance temporarily, what is the relationship of the bank and customer.
a creditor and debtor b debtor and creditor c principle and agent
d trustee and beneficiary e none of the above
31 Which section of the respective Act covers the SLR:
a Section 24(2A) of BR Act 1949 b Section 23 of BR Act 1949 c Section 27 of RBI Act
d Section 24(2) of RBI Act e Section 14 of BR Act
32 The loan system of credit delivery is mandatorily applicable for loan accounts having:
a term loan of Rs.10 crore and above b fund based working capital limits (MPBF) of Rs.10 cr and above
c non-fund based limits of Rs.10 cr and above d combined limits of Rs.10 cr and above
e a, b and d
33 When payment of a term deposit receipt is made, what is the amount of interest per financial year, for deduction of tax at source.
a Rs.5000 or above from a bank b Above Rs.5000 from a bank branch
c Above Rs.5000 from all branches of the bank taken together
d Rs.5000 and above including interest on saving bank deposits e none of the above
34 Your branch has sanctioned cash credit limit of Rs.12 lac to M/s United Pharmacy. As at the close of July 31, it has been carrying stocks worth Rs.9 lac, sundry creditors of Rs.3 lac and book debts of Rs.6 lac. Bank has prescribed a margin of 25% on stocks and 30% on book debts. What is the maximum amount that can be withdrawn in the cash credit limit ?
a Rs.8.70 lac b Rs.8.30 lac c Rs.12 lac d Rs.6.75 lac e Rs.7.25 lac
35 At the time of renewal of working capital limits by your branch, the loan officer observed that M/s Babra Enterprises’s utilisation of funds on a long term basis is 80% of the long term sources during the year. Which among the following would be the result of this kind of financial management:
a the current liabilities would increase b the current assets would decline
c the current ratio would decline d the current ratio would improve e none of the above
36 Which among the following, is the Authority that fixes the rate of interest on saving bank deposits in banks?
a Reserve Bank of India b Ministry of Finance c Indian Banks’ Association
d Board of Directors of a Bank e None of the above
37 Stock audit is compulsory in case of NPA account, if the amount outstanding is Rs.____ or more
a: 5 cr b: 4 cr c: 3 cr d: 2 cr e 1 cr
38 Popular Bank decides to provide finance to Ghai Films Ltd for production of a film. The working capital assessment would be done by the bank on the basis of:
a: cash budget system b: turnover method of Nayak Committee
c: Traditional method of Tandon Committee d: any of the above at bank’s discretion
e none of the above
39 What is the period of limitation for the recovery of a loan given on the basis of a demand promissory note:
a: Three years b: Three years from date of note c: Three years from filing of suit
d: Three years from date of default e b and d
40 Corporate Bank files suit for recovery of its loan against the guarantor only and not the borrower. Guarantor pleads in the court that before filing suit against him, money should be recovered from the borrower. In such circumstances, the bank can seek recourse in the court against:
a: all the liable parties together only b: any one of them at a time
c: all separately d: at its discretion it can proceed against any one.
e at the discretion of the court
41 A public limited company opens a collection account for its public issue. The bank wants to withdraw the funds for use for the purpose for which the issue was floated. On what condition, this can be done.
a: If Co. produces certificate of commencement of business b: If Co submits copy of certificate of incorporation
c: If prospectus is issued d: When co. requests the bank e a and c
42 What is the minimum amount outstanding in case of willful default, that the information will be required to be sent to CIBIL:
a: Rs.2.5 lac b: Rs.10 lac c: Rs.25 lac d: Rs.100 lac e none of the above
43 In those case where the process of dissolution of a firm has started, what are the situations where the partners still have rights to bind the other partners:
a: To wind up the business of firm
b: To complete all those transactions which could not be completed till date of dissolution
c: till all the liabilities of the firm are discharged d a and b e: a to c
44 In a PMRY group loan, the interest rate would be decided on the basis of:
a: total amount of the project cost b: total amount of the loan c: total amount of loan and subsidy
d: per capita loan amount e per capital project cost
45 Your branch receives a cheque of Rs.17500 in the account of a saving bank customer. The balance in the account is Rs.16700. An outstation cheque of Rs.23000 has been sent for collection, the proceeds of which have not been received as yet. While returning the cheque, which among the following reasons will be given:
a insufficient funds b exceeds arrangements, please present again
c effects not cleared, please present again d drawer’s instructions awaited e refer to drawer
46 In an HUF, there is one male major member having two minor sons. After his death who will function on behalf of the Karta of HUF:
a: Eldest son b: Youngest son c: Natural guardian of the eldest son
d guardian of the eldest appointed by court if there is no natural guardian e: c and d
47 A Hindu soldier gives an oral will while he is fighting on Indo-Pak border. Such wills are called:
a oral will b invalid will c privileged will d unprivileged will e a and c
48 A charitable trust is registered with:
a: Registrar of Trusts b: Register of Societies c: Registrar of Companies d: Commissioner of Charity
e a or b
49 Investment fluctuation reserve would be classified by a bank for the purpose of capital adequacy ratio under:
a: tier I capital fund b: paid up capital c: tier II capital fund
d: tier III capital fund e at the discretion of the bank
50 Who can act as natural guardian in respect of a Hindu Minor:
a father alone b mother along with father c father and after his death mother
d grand-father e b and c
51 In which of the following, a term deposit receipt can be classified ?
a not negotiable but transferable b transferable actionable claim c not transferable actionable claim
d a demand liability e none of the above
52 What kind of an asset is goodwill as per the Indian Accounting Standards ?
a intangible asset b fictitious asset c current assets d fixed asset e not an asset
53 Rajan raised a loan and Harish was his guarantor and loan has become due, for payment which Rajan fails to pay. Bank had to recall the loan due to this. Harish maintains a SF account. The Bank:
a: Cannot exercise right of set-off against Harish’s account. b: In case loan is recalled from Harish, the right of set-off can be exercised c: Intervention of the court required d: loan recall is not a necessary condition e None of the above.
54 Your branch is having a partnership current account and a garnishee order in the name of a partner in the firm, is received. It will:
a apply to all partners b apply to firm’s account c not apply to firm’s account
d not apply to any one. e a and c
55 A garnishee order is applicable to
a: Demand deposits b: Time deposits subject to maturity c Recurring Deposit
d: a to c e: b and c
56 For a loan to be raised in case of need, a persons assigns his insurance policy in favour of the bank. Such relationship of the customer with the bank, will be of a/an:
a pledger and pledgee b beneficiary and trustee c lender and borrower
d assignor and assignee e assignee and assignor
57 Which of the following is a current liability for the purpose of classification to analyse a balance sheet
a debentures dues after 2 years b term loan with a moratorium of 3 years
c general reserve created only 3 months earlier d provision for disputed income tax liability
e none of the above
58 One rupee note bears the signatures of:
a: Governor RBI. b: Secy. Ministry of Finance c: Prime Minister of India
d: Finance Minister. e President of India
59 As per section 45(ZA) of Banking Regulation Act 1949:
a: Nomination facility has been granted for bank deposits.
b: Guidelines have been laid down for election of Chairmen and Managing Directors of the banks.
c: Guidelines have been given for providing working capital to big units.
d: nomination facility is available for locker accounts
e nomination facility for safe deposit vault
60 The report on Harmonisation of role of FIs and banks relating to universal banking, was given by:
a M S Verma b R H Khan c B D Shah d K S Shere e Narasimham Committee
61 Sale of an SSI firm is Rs.240 lac. Its requirement for working capital is equal to 5 month’s sales. What will be the amount of working capital.
a Rs.60 lac b Rs.75 lac c Rs.90 lac d Rs.100 lac e none of the above
62 Sale of an SSI firm is Rs.240 lac. Its requirement for working capital is equal to 5 month’s sales. What will be the amount of margin & bank limit.
a Rs.48 lac, 12 lac b Rs.60 lac, 15 lac c Rs.72 lac, 18 lac d Rs.80 lac, 20 lac e none of the above
63 Repayment capacity in case of term loan proposals is judged by the banks with which of the following ratios :
a debt equity ratio b internal rate of return c net present value d break even analysis
e debt service coverage ratio
64 A collecting bank gets statutory protection under:
a: RBI Act b: Banking Regulation Act c: Negotiable Instruments Act
d: Indian Contract Act e None of the above
65 What is the time period under SARFAESI Act, for replying the borrower, in case he raises an objection for possession of the asset:
a: 60 days b: 30 days c: 7 days d: 3 days e none of the above
66 B is payee of a cheque, who endorses it to C. C lost the cheque which is found by D, who endorses it in favour of A for valuable consideration by way of forging C’ signatures. The cheque is dishonoured. A can recover from:
a: B b: C c: D d: any of the previous parties e None of the previous parties
67 A, a customer has a saving bank account and her husband had withdrawn the money from the bank on the basis of forged cheques at various occasions but the customer did not object to it. After his death, she comes to bank and demands the money:
a: Bank would refer the matter to the court b: Bank is liable on forged cheques
c: The bank is negligent but not liable, as the customer is party to the forgery and did not inform the bank in time
d: loss shall be borne in the ratio of 50:50 by the bank and the customer
e None of the above
68 A firm discounts its export receivables of up to 5 years without recourse to the exporter under which of the following arrangement:
a forfaiting b factoring c securitisation d bills discounting e foreign bills discounting
69 Who among the following will sign the account opening form for opening a current account in case of a partnership firm where the firm has three partners and a minor, aged 17, has been admitted to the firm for benefits?
a all the three and the father of the minor b all the three and natural guardian of the minor
c all the three and the minor himself d all the three partners only e any of the above
70 You receive a garnishee order for a current account maintained in your branch. A cheque is received for payment. What memo should be appended while returning the cheque:
a: Garnishee order received b: Refer to drawer. Garnishee order received
c: insufficiency of funds due to garnishee order d a and b e a to c
71 A bill presented by your branch is dishonoured and you want to get its noting. The provision regarding noting is described under section...of NI Act:
a: 100 b: 99 c: 85A d: 131 e 87
72 If a borrower wants to file an appeal with DRAT against the decision of DRT under SARFAESI Act, how much amount it will be required to deposit:
a: 75% of the amount b: 50% of the amount c: 25% of the amount
d: 10% of the amount e there is no need for deposit of the amount.
73 If a borrower wants to file an appeal with DRAT against the decision of DRT under DRT Act, how much amount it will be required to deposit:
a: 75% of the amount b: 50% of the amount c: 25% of the amount d: 10% of the amount
e there is no need for deposit of the amount.
74 A is having a locker and sends the key by post with an intention to surrender the locker:
a: bank will be discharged of its liability, if key is accompanied by a letter stating the contents of the lockers as NIL b: The bank will not be discharged of its liability c: The bank should not accept
d: bank can accept subject to its rights under reserve e None of the above
75 A and B maintain an FD account with a locker and want to make single nomination for both the accounts :
a: Nomination can be made in both the accounts separately
b: Nomination can not be allowed in lockers in joint names
c: It will depend on bank’s discretion d: nomination can be accepted e None of the above
76 If a cheque is crossed as account payee, this is direction of ___, to ___:
a payee, paying bank b payee, collecting bank c drawer, paying bank
d drawer, collecting bank e drawer, paying & collecting bank
77 In terms of recommendations of Tandon Committee, which of the following is considered as ideal current ratio by banks for sanction of term loans:
a 1:1 b 1.17:1 c 1.25:1 d 1.33:1 e none of the above
78 There is an FDR of A and B but A dies before its maturity. B also dies one week after his death. FD amount is payable to:
a: Legal heirs of A b: Legal heirs of B c: Legal heirs of A and B
d: legal heirs of the person who died later e None of the above.
79 Analysis of balance sheet of a partnership firm shows that its total net worth is more than the total outside liabilities.
a it can be termed as a desirable situation b it can be termed as an excellent and desirable situation
c it reflects the conservatism on the part of the management
d it reflects risk appetite of the management e all the above
80 For the purpose of creation of equitable mortgage, who notifies the places for deposit of title deeds:
a Central Govt. b Local self Govt. c President of India d Governor of the State e State Govt.
81 In deposit accounts, the photographs are obtained. Why ?
a: to avoid frauds b: to avoid irregularities c: to detect irregularities in financial transactions
d to comply with UN directives e: to check benami accounts / transactions
82 Which among the following has formulated the govt. sponsored scheme called ` Swaran Jayanti Gram Swarozgar Yojana ?
a Agricultural Deptt of State Govt. b Ministry of Agriculture of State c Union Ministry of Rural Development
d Distt. Rural Development Agency e Lead Bank of the concerned Distt
83 What is the requirement of margin under the Scheme for Liberation and Rehabilitation of Scavengers (SLRS):
a 20% of the project cost with maximum of Rs.7500
b 15% of the amount of loan with a maximum of Rs.7500
c 15% of the project cost with maximum of Rs.7500
d 10% of the project cost with maximum of Rs.7500
e 15% of the amount of subsidy maximum Rs.7500
84 In a private limited company the minimum and maximum no. of shareholders can be:
a: 1 and 20 b: 20 and 100 c: 100 and 1000 d: 2 and 50
85 What is the meaning of a scheduled bank ?
a: The bank functioning under provisions of Banking Reg. Act 1949.
b: The bank included in 2nd schedule of RBI Act 1934.
c: The bank incorporated under Banking Companies Act 1956.
d: The bank authorised to do banking functions.
e bank issued a license by RBI mentioning therein that it is a scheduled bank
86 Who fixes the scale of finance for crop loan for agricultural advances in India:
a Distt Crop Committee b Distt Technical Committee c State Agri. Deptt
d State Technical Committee e a or c
87 Section 31 of RBI Act permits only RBI and Central Govt. to issue/draw:
a bills payable to bearer on demand b promissory notes payable to bearer on demand
c cheques payable to bearer on demand d a & b above e a to c
88 Where the foreign banks fail to achieve the lending target for SSI under priority sector:
a they have to deposit the amount of shortfall with NABARD b they have to deposit the amount of shortfall with KVIC c they have to deposit the amount of shortfall with RBI d they have to deposit the amount of shortfall with SIDBI e any of the above
89 What is the sub-target for advances to small scale industries by the commercial banks for units having investment in plant and machinery above Rs.25 lac ?
a Minimum 40% of Net Bank Credit b Maximum 40% of net bank credit
c 40% of the SSI advances d Minimum 40% of SSI advances e Maximum 40% of SSI advances
90 Under Know Your Customer guidelines of RBI, for which period the records are required to be maintained:
a 1 years b 2 years c 4 years d 5 years e 10 years
91 A month back the dollar-rupee rate was Rs.43.90 per dollar. Now it is Rs.45.10 per dollar. Who among the following is the gainer:
a who exports b who imports c who has to make outward remittance
d who moves for a visit abroad e none of the above
92 Dollar has shown increase in its value compared to Indian rupee. Which of the following would be true ?
a Exports from India will go up b Imports into India will become costly
c Trade with other nations will be reduced d b or c e None of the above
93 Interest and principal can be repatriated by an NRI, in the following accounts ?
a FCNR b NRE c EEFC d a & b e all the above
The following data is taken from the balance sheet of a firm:
Capital and Reserves 50 Bank term loan 50 Bank cash credit 50 Current liabilities 50
Fixed Assets 70 Preliminary expenses 10 Cash/Bank balance 20 Stocks 60 Book debts 30
Prepaid expenses 10 Sales 300 Profit 10
On the basis of above information:
94 What is the net worth:
a 50 b 45 c 40 d 30 e 20
95 What is the current ratio:
a 1.5:1 b 1.33:1 c 1.20:1 d 1.10:1 e 1.00:1
96 What is the acid test ratio (quick ratio)
a 0.25:1 b 0.50:1 c 0.75:1 d 0.80:1 e none of the above
97 What is the debit equity ratio?
a 3:1 b 2:1 c 2.25:1 d 1.25:1 e 1:1
98 What is the total indebtedness ratio:
a 6:1 b 4.25:1 c 4.0:1 d 3.75:1 e 3.25:1
99 What is the stock turnover ratio?
a 3 times b 4 times c 5 times d 6 times e none of the above
100 What is the debtors’ velocity ratio
a 2.1 months b 1.60 months c 1.20 months d 1.09 months e 1 months
Answers :
01 a 02 b 03 c 04 e 05 e 06 c 07 a 08 d 09 c 10 e 11 b 12 b 13 b 14 a 15 c 16 e 17 a 18 d 19 e 20 a 21 d 22 d 23 b 24 c 25 d 26 c 27 a 28 d 29 d 30 b 31 a 32 b 33 b 34 a 35 d 36 a 37 a 38 a 39 b 40 d 41 a 42 c 43 d 44 d 45 a 46 e 47 c 48 d 49 a 50 c 51 c 52 b 53 b 54 c 55 d 56 d 57 d 58 b 59 a 60 b 61 d 62 d 63 e 64 c 65 c 66 c 67 b 68 a 69 d 70 a 71 b 72 b 73 a 74 a 75 a 76 d 77 e 78 c 79 c 80 e 81 e 82 c 83 c 84 d 85 b 86 b 87 d 88 d 89 e 90 d 91 a 92 b 93 d 94 c 95 c 96 b 97 d 98 d 99 c 100 c
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Question Bank—VI (Assorted Multiple Choice questions)
1) Which one of the following is not incorrect ?
As per directives enunciated through the Loan Policy document
(a) For working capital finance, current ratio should not be less than 1.13 :1
(b) For term loan, bench mark level of DSCR is 1.5:1
(c) Exposure on Director of a borrowing company in personal capacity under Bank’s UCO Trader Scheme shall be
outside the scope of “Group exposure” and the Bank may consider the sanction of the loan in personal capacity
of the director
(d) None of the above.
2) Which one of the following is not correct ?
(a) In case of excess liquidity, the profitability of the bank is affected and in case of liquidity crunch, the stability of
the bank is jeopardized.
(b) While extending loans, banks must ensure that the funds are used for productive or consumption purpose and not
for illegal or speculative purpose.
(c) In banks, Pricing includes: cost of deposit+ operational expenses + charge for loan loss + profit margin and risk &
tenor premium as the case may be.
(d) Both (b) & ( c).
3) Which one of the following is correct ?
(a) Though ‘Right of lien is a statutory right’, it is enforceable through an agreement only.
(b) Negative lien is a charge created by a borrower in favour of the lender by which the borrower is barred from
disposing off the property charged before the loan is repaid.
(c) Section 151of the Indian Contract Act states that the bank as a bailee is bound to take as much care of the goods
bailed to him as a man of ordinary prudence would under similar circumstances, take care of his own goods of the
same bulk, quality and value as the goods bailed.
(d) Both (a) & (c).
4) As per the Companies Act, 1956, a charge of hypothecation created by a company on its assets has to be registered with ROC within 30 days of the creation of the charge and the ROC is also empowered to allow a further period of 30 days for filling this charge by imposing such additional fee not exceeding 10times the fee specified in schedule.
What are the relevant sections of the Companies Act, 1956 ?
(a) 125, 126 (b)125, 125(1) (c)125, 125(2) (d)125, 127
5) What is the standard asset provision for residential housing loan beyond Rs20.00 lac?
(a) 0.25%, (b) 1%, (c ) 0.40%, (d) 2%
6) In case of UCO Mortgage loan, the amount of prepayment charge is
(a) 1% of the amount prepaid (b)1% of the outstanding amount paid
(c) No pre-payment charge. (d)2% of the amount prepaid
7) In case of UCO Shelter loan, the lending power of a Branch Head in Scale-II is
(a) Rs 5.00 lac (b) Rs10.00 lac ( c) Rs15.00 lac (d) Rs7.50 lac
8) A firm has sales of Rs200000/- with its fixed cost being 80% of its variable cost and the total cost is Rs180000/-. What is the breakeven sales level?
(a) Rs120000 (b) Rs160000 (c) Rs140000 (d) Rs180000
9) Which of the following is not a long term source of funds in funds flow statement ?
(a) Capital subscribed by the promoters
(b) Unsecured loans raised from friends and relatives
(c) Term loan raised from the bank for purchase of machineries
(d) Cash credit limit for working capital from a bank.
10) What is the risk weight for UCO Shelter loan of below Rs30 lac for Capital Adequacy purpose under Basel-II
when LTV is 80%.
(a) 50% (b) 75% (c) 100% (d) 125%
11) In which of the following kinds of financing, the banks can take up financing for medium term
(5 to 7 years) out of the very long term nature of the projects( 15 to 20 years)
(a) Securitisation (b) Take out financing (c) Project financing (d) Consortium financing
12) What is not true about Lok Adalat ?
(a) It is fast and inexpensive avenue for settlement of the bank dues
(b) Cases up to Rs20 lac may be referred to Lok Adalats.
(c) If the proposal is referred to the Lok Adalat, limitation period is extended.
(d) No extention of limitation for the case pending only with Lok Adalat.
13) Which of the following is not covered under SRFFAESI Act ?
(a) Hypothecated goods
(b) Mortgaged property
(c) Where balance is less than 20% of the advance.
(d) Taking over the management of the business of the borrower.
14) Priority sector advances should be 40% of Adjusted Net Bank Credit (ANBC) or credit equivalent
amount of off balance sheet exposure which ever is higher. ANBC denotes NBC plus fresh investments
made by banks in non-SLR bonds held in HTM category. Existing investments as on 30.04.2007 made
by banks in non-SLR bonds held in HTM category will not be taken into account for calculation of
ANBC up to------------- .
(a) March 31st 2009 (b) March 31st 2008
(c) March 31st 2011 (d) March 31st 2010.
15) What is the percentage of advance that should be provided to Micro Enterprises out of total Small
Enterprises advances ?
(a) 60% (b) 40% (c) 20% (d) 30%
16) The maximum age limit for woman PMRY applicant is
(a) 35 Yrs (b) 40 Yrs ( c) 45 yrs (d) No maximum age.
17) Under KVIC Margin Money Scheme, What is the maximum amount of subsidy for a project cost
of Rs 20 lac for special category of borrowers like SC/ST etc is
(a) 4.50 lac (b) 4.00 lac (c) 3.00 lac (d) 3.50 lac
18) Out of total DRI loans ,---------------- should be given to SC/ST people.
(a) 30% (b) 50% (c ) 40% (d) 60%
19) In SJSRY, there is a back end subsidy of 15% of the project cost subject to a maximum of Rs7500/-.
What is the lock-in period for subsidy adjustment ?
(a) 2Yrs (b) 3 yrs (c ) 1 yr (d) No lock-in period.
20) Under Swarnajayanti Gram Swarojgar Yojna, the selection of prospective borrowers should be made
on the basis of focus on vulnerable section of rural people and -------- of beneficiaries should be SC/ST.
(a) 25% (b) 40% (c ) 50% (d) 35%
21) The loan to Self Help Group (SHG) should be multiple of total savings mobilized by the group initially
in the ratio of ----------------.(savings: loan ratio).
(a) 1:4 (b) 1:6 (c ) 1:8 (d) 1:10
22) The minimum loan amount under UCO Hirak Jayanti Yojna is
(a) 50,000/- (b) 1,00,000/- (c ) 2,00,000/- (d) None of the above.
23) Under Indira Awaas Yojna- Top Up loan Scheme, calculate the maximum bank loan amount in the
following case :
Project cost – Rs 50,000/- , Govt grant – Rs25,000/-
(a) 25,000/- (b) 20,000/- (c) 15,000/- (d) 12,500/-
24) What is the margin requirement in case of UCO General Credit Card Scheme (UGCC) ?
(a) 5% (b) 10% (c ) 7.5% (d) Nil.
25) In case of Kishan Samridhi Credit Card (KSCC) Scheme, the term loan component will be repaid
within a maximum period of 5 Yrs by
(a) 5 annual instalments (b) 10 half yearly instalments (c ) 20 qly instalments (d) (a) or (b).
26) As per the Nayak Committee recommendation, What will be the bank finance if the annual turnover
is Rs100 lac and the available NWC is Rs10 lac. It is to be noted that the excess NWC has been kept
for a special expansion program.
(a) Rs15 lac (b) Rs10 lac (c) Rs20 lac (d) Rs25 lac
27) What will be the holding period of Raw material if the opening stock of raw material is Rs50,000/-,
closing stock of raw material is Rs50,000/- and the raw material purchased during the year is
Rs 6,00,000/-?
(a) 1 month (b) 1.2 months (c) 1.5 months (d) 1.4 month
28) As per RBI guidelines, a bank is required to assess working capital finance on the basis of which of the
following methods ?
(a) Cash budget method (b)Turnover method
( c) MPBF method (d) Any method as per the discretion of the bank.
29) Following is the balance sheet of a private limited Company
Capital 100 Fixed Assets 100
Creditors 80 Current assets 300
Other current liabilities 120
Bank borrowing 100
-------- --------
400 400
---------- --------
What will be the MPBF as per 1st & 2nd method of lending ?
(a) 75 & 25 (b) 100 & 125 (c ) 100 & 75 (d) 135 7 105
30) In consortium finance, which document is used for charging of security to the bank ?
(a) Working capital consortium agreement (b)Joint deed of Hypothecation
(c ) Interse Agreement (d)(b) & (c)
31) Negotiating bank in case of an LC bill examine the documents submitted by an exporter for
negotiation in four days. What time will be available to the opening bank for scrutiny of these
documents as per new UCPDC 600 ?
(a) 3 banking days (b) 1 banking day
(c) 3 working days (d) 5 banking days following date of presentation.
32) In an export LC transaction , the bank which is allowed to make payment against the documents is called
(a) Confirming bank (b)Negotiating bank
(c) Advising bank (d)Issuing bank
33) A Bank sanctioned pre-shipment credit to an exporter who has sent the goods for shipment but so far
he has not handed over the bill of lading although shipment has taken place a few weeks back. When
the bill of lading will become stale?
(a) If not presented within 7 days of shipment
(b) If not presented within 10 banking days of date of shipment
(c) If not presented to the bank for negotiation within 21 days of date of shipment.
(d) None of the above.
34) An exporter gets LC for export of garments to US , but expiry date of LC falls on 26 th January
which is a public holiday. In such a case, documents for negotiation can be submitted to the
negotiating bank on
(a) Succeeding working day (b) Succeeding banking day
( c) Preceding business day (d)Preceding banking day
35) A SSI Unit dealing with your branch has received an export order on FOB terms In this case
(a) Cost of insurance is to be borne by the exporter
(b) Cost of freight is to be borne by the exporter
(c) Cost of goods, insurance & freight is to be borne by the exporter
(d) Cost of insurance & freight is to be borne by the importer.
Examine the following balance sheet and answer the following questions :
Liabilities Assets
Sundry Creditors 2,50,000 R & D expenses 60,000
Term loan 2,50,000 Land & Building 7,50,000
Cash Credit 3,40,000 Stock 3,50,000
Statutory dues 10,000 Good will 40,000
Unsecured Debt 3,50,000 Furniture 50,000
Reserve 3,00,000 Car 1,00,000
Capital 3,50,000 Sundry Debtors 3,00,000
Cash & Bank balance 60,000
Security deposit 50,000
Prepaid expenses 90,000
Total 18,50,000 18,50, 000
Total credit purchase during the year is Rs30,00,000 , total credit sales during the year is Rs.60,00,000 and cost of sales is 140,00,000
36) Net working capital is
(a) 2,50,000 (b) 2,00,000 (c ) 3,00,000 (d) 3,50,000
37) Debtors velocity expressed in days is
(a) 27 (b) 54 (c ) 18 (d) 30
38) Period of credit enjoyed expressed in months is
(a) 1 month (b) 0.5 month (c ) 2 months (d) 2.5 months.
39) A bank decides to allow a term loan of Rs10 lac to a partnership firm with a minor admitted
to the benefit of partnership firm . How the bank will get the documents signed so far minor is
concerned ?
(a) Minor will sign himself (b)Guardian of minor will sign on minor’s behalf
(c) Minor nor his guardian is to sign (d )On attending majority, the minor will sign.
40) In Cash Credit accounts, the period of limitation is of three years to be counted from
(a) Date of default (b)Date of sanction
(c) Date of documents (d)Date of default by all the parties including guarantor
41) In a Doubtful category II NPA account , the balance outstanding is Rs10.00 lac which is covered
by CGTSI guarantee and the realizable value of security is Rs1.50 lac. What will be the total amount
of provision ?
(a) 2.57 lac (b) 2.56 lac (c ) 3.57 lac (d) 3.56 lac
42) A UCO Cash loan of Rs1.00 lac against the undertaking of the employer has become NPA
Sub-standard. The B/O is Rs0.90 lac. What will be the amount of provision ? If the same loan
account was covered by LIP (SV) of Rs 0.20 lac, what will be the amount of provision ?
(a) 0.09 lac, 0.09 lac (b) 0.18 lac, 0.18 lac
(c) 0.18 lac, 0.09 lac (d)0.9 lac, 0.18 lac
43) In case of Education loan, which one is not correct ?
(a) Up to Rs 4.00 lac of loan, no security, no margin.
(b) Above Rs10.00 lac of loan, 100% collateral security is required.
(c) In case of second Education loan, the entire accumulated interest of the first loan has to be paid by the parents
before the disbursement of new loan.
(d) During moratorium period , the interest to be debited on quarterly compounding basis.
44) In case of second hand car financing under UCO Car Scheme, if the value of the car as per the
valuation certificate of the approved valuer is Rs4.00 lac and if the car is 5 yrs old, what amount
of maximum finance can be made ?
(a) 3.50 lac (b) 2.80 lac (c ) 2.40 lac (d) 2.00 lac
45) The lending power of a Branch Head in scale-II for sanctioning loan against NSC (UCO Securities) is
(a) 15.00 lac (b) 10.00 lac (c ) 5.00 lac (d) No ceiling .
46) Mr. Asish Jana mortgaged his residential building to a bank for housing loan. As he defaulted in payment
of Income tax, the Income Tax authorities took possession and sold the building for recovering the tax
dues. How the bank is affected in this case ?
(a) Bank loan has no precedence over Income dues as the IT authority was not informed by the bank
(b) Income tax claim has precedence over bank loans by virtue of IT Act according to which IT authority
is collecting revenue of the government.
(c) Both will share the recovered amount on prorata basis.
(d) Bank loan has precedence over Income tax dues as the Bank is the secured creditor.
47) In case of Equitable mortgage, which one is not incorrect ?
(a) The delivery of title deed must be made in writing.
(b) The delivery of title deed must be made in a notified place.
(c) The title deed after delivery must continue to be kept in the notified place.
(d) Both (b) & (c ).
48) Which of the following is not correct in respect of definition of ‘Rural Area’ ?
(a) As per RBI guidelines, ‘Rural Area’ means village/town with population not exceeding 20,000
(b) As per KVIC Act, ‘Rural Area’ means any village or town, the population of which does not exceed
20,000 as per 1991 census or any area classified as a village as per revenue record.
(c) As per NABARD Act, ‘Rural Area’ means any village/town with population not exceeding 50,000
(d) Both (a) & (c ).
49) Which one of the following is not correct in respect of Credit Guarantee Fund for Micro & Small Enterprises
(a) New or existing SME units both in manufacturing sector as well as in Service sector to whom
Credit facility has been extended by the eligible lending institutions without collateral security Or third party
guarantee can be covered under the scheme.
(b) Transport loans under SME are eligible under the scheme
(c) Loans under KVIC schemes are eligible for cover.
(d) Quantum of credit facilities in respect of a single eligible borrower should not exceed Rs50 lac by way of term loan and/ or working capital loan.
50) What is the time frame for Legal Audit for all the existing accounts of Rs3 Crore & above where there are major
changes in sanction terms on review/renewal.
(a) 6 months (b) 9 months (c )12 months (d) 3 months
51) Special Hospitalisation Reimbursement Scheme in cases of major surgical operations available for staff members of UCO Bank provides :
a.Rs 25000/- for self and Rs 15000/- for spouse b.Rs 20000/- for self and Rs 10000/- for family members
c.Rs 25000/- for self and Rs 10000/- for spouse d.Rs 25000/- for self and Rs 10000/- for family members
52)In case of sudden demise of any staff member, the family is eligible to get a sum of ……..towards funeral expenses
a.Rs 5000/- b.Rs 10000/- c.Rs 15000/- d.Rs 20000/-
53)The lower age limit for reimbursement of Rs 1500/- towards health Check-up of UCO bank employees,has been reduced:
a.From 50 years to 45 years b. From 45 years to 40 years c.From 45 years to 35 years d.NOA
54)Advance against TA bill/LFC/LTC is to be adjusted within
a.15 days from the date of completion of journey b.30 days from the date of completion of journey
c.15 days from the date of submission of Bill d.NOA
55)Family member of a deceased UCO bank employee is eligible for compassionate appointment in the following cases :
a.Employee dying while performing his official duty, as a result of violence, terrorism, robbery or dacoity;
b. Employee dying within five years of his first appointment or before reaching the age of 30 years, whichever is later, leaving a dependent spouse and/or minor children.
c.(a) or (b) d.NOA
56)Under The Scheme for grant of ex-gratia payment to a deceased employee, for calculation of monthly income of the family of the deceased, applicable rate of interest is :
a. Maximum term deposit rate of the bank
b. Maximum term deposit rate applicable for staff members of the bank
c.10 year G-Sec rate d.NOA
57)Under The Scheme for grant of ex-gratia payment to a deceased employee, the ex-gratia amount for an officer employee is :
a.65% of the last drawn gross salary (net of taxes) for each month of remaining service of the employee – maximum
Rs 800000/-
b.60% of the last drawn gross salary (net of taxes) for each month of remaining service of the employee – maximum
Rs 800000/-
c.60% of the last drawn gross salary (net of taxes) for each month of remaining service of the employee – maximum
Rs 1000000/-
d.65% of the last drawn gross salary (net of taxes) for each month of remaining service of the employee – maximum
Rs 1000000/-
58)For being eligible under The Scheme for grant of ex-gratia payment to a deceased employee, the family of the deceased employee must apply to the Bank within a period of :
a.1 month from the date of death of the employee b.3 month from the date of death of the employee
c.6 month from the date of death of the employee d.15 days from the date of death of the employee
59)Banking Industry is deemed to be a Public Utility Service as per
a.Banking regulation Act 1949 b.Negotiable Instruments Act 1881
c.Indian Contract Act 1872 d.Industrial Disputes Act 1947
60)In view of achieving the target towards NPA Recovery , all branches are required to mobilize minimum
a) 10 compromise proposals per month. b.) 5 compromise proposals per month
c) There is no such direction d) 20 compromise proposals per month
61)In case of compromise settlement, the rescheduled repayment amount will have to be obtained :
a) By way of Bank Draft/Pay order within 7 days from the date of settlement
b) Immediately by way of Post dated Cheques
c)1st instalment by Bank Draft/Pay order within 7 days from the date of settlement and rest by Post dated Cheques d) NOA
62)As soon as an account with balance of Rs. 1.00 lacs and above is classified as NPA and where there are charged properties for which action can be taken under the SRFAESI Act, a Notice under Section 13(2) of the Act should be sent to the borrower/guarantor by the Authorized Officer (A.O.) within
a.15 days b. Seven days c.1 month d. Seven days from the date of approval by ZO
63)For the purpose of issuing Notice under Section 13(2) of SRFAESI Act, Authorized Officer (A.O.) is,
a. Officer deputed by ZO for the specific purpose
b. Empanelled lawyer of the Bank , entrusted with the assignment of issuing such notice
c. Any officers of the bank in Scale-IV and above d.NOA
64)The upper limit of referring cases to Lok Adalat is
a.Rs.5.00 Lac b.Rs.10.00 Lac c.Rs.15.00 Lac d.Rs.20.00 Lac
65)Cases of financial frauds of the value of Rs. 1,00,000 and above, which involves outsiders (private parties) & Bank staff, should be reported by………….. to…………..
a. Bank branch, local police station
b. the Regional/Zonal Head of the Bank, State CID/Economic Offences Wing
c. the Regional/Zonal Head of the Bank, CBI d.NOA
66)Cases of financial frauds of the value of Rs. 1Crore to 5 Crore, Where staff involvement is prima facie not evident should be reported to…………..
a) State CID/Economic Offences Wing b) CBI (Economic Offences Wing)
c) Banking Security and Fraud Cell of CBI d) NOA
67) Character , Capacity & Capital of a Prospective borrower is judged to conform to which of the following ‘Basic Principles of lending’ ?
a) Principle of Profitability b) Principle of Security
c) Principle of Liquidity d) Principle of Safety of fund
68)Through Credit Rating of a Credit Proposal, the risk in the proposal is
a) Identified b) Assessed c) Measured d) Monitored
69) In our bank, loan accounts of Rs25 lac & above are compulsorily rated . How many rating categories are there in our bank ?
a) 7 b) 6 c) 5 d) 4
70) The Bank will limit its exposure to infrastructure Group borrowing to a certain percentage of Bank’s capital fund. What is that percentage ?
a) 15% b) 40% c) 25% d) 50%
71 ) All take over loan proposals from other banks up to Rs200 lac are to be referred to which of the following NBC ?
a) Bank level NBC b) FGM level NBC c)Zonal level NBC d)CGM level NBC.
72) As per proposal processing directive, in case of project finance-- term debt equity ratio should not exceed
a) 2:1 b) 3:1 c) 4:1 d) 3.5:1
73) In case of Green field projects, the minimum management rating should be
a) 50% b) 60% c) 40% d) 25%
74) No prepayment charge is recovered in case of Agriculture loans up to
a) Rs 2 lac b) Rs5 lac c) Rs10 lac d) No ceiling.
75) Deposits taken from a dealer by a company will be shown as which of the following in its Balance sheet ?
a) Current assets b) Current liabilities c) Term liability d) Non current asset.
76) An equitable mortgage was created on 10th June, 2008 with our bank and ROC registration was made on 8th July, 2008 . Again simple mortgage was created on the same property on 12th June, 2008 with Allahabad Bank and ROC registration was made on 15 th June, 2008. Which mortgage will get priority ?
a) Mortgage with Allahabad Bank as it was registered with ROC earlier
b) Mortgage with our Bank as it was created earlier.
c) Mortgage with Allahabad Bank as it was a Simple mortgage.
d) It will be a kind of pari-passu charge with both the Banks.
77) Installments of term loans due within next one year are treated as current liabilities for the purpose of computing
a) Current Ratio b) Working Capital Gap
c) Maximum Permissible Bank Finance d) (b) & (c )
78) Pre-operative expenses to the extent not written off is shown in the Balance sheet as
a) Current asset b) Current liability c) Non-current asset d) Intangible asset
A Balance Sheet of a Company as on 31.03.2008 is given below
Liabilities (Rs/lac) Assets (Rs/lac)
Capital 30 Fixed Asset 35
Term loan 20 Non-Current Asset 05
Sundry Creditor 20 Stock 40
STBB (CC) 30 Book debts 20
Total 100 100
79) Current Ratio is
a) 1.33 :1 b) 1.17:1 c) 1.20 :1 d)1.23 :1
80) NWC is
a) 20 b) 10 c) –10 d) 15
81) TOL/TNW is
a) 3.33 :1 b) 1.11 :1 c) 2.33 :1 d) 1:1
82) If NWC is 25% of Total Current Assets, then what will be Current ratio ?
a) 1.17:1 b) 1.22:1 c) 1.20:1 d) 1.33:1
83) If the Projected Sales is Rs100 lac and the projected NWC is Rs10 lac , How much can be financed under Projected Turnover Method ?
a) Rs 20 lac b) Rs 15 lac c) Rs25 lac d) (a) or (b)
84) From the Stock Statement , it is found that
Stock--Rs 80 lac, Creditors – Rs20 lac
Receivables – Rs60 lac of which Rs 10 lac is 90 to 120 days old
Sanction stipulation for margin was 25% against paid stock and
30% against book debts not older than 120 days.
What will be the Drawing Power ?
a) Rs 80 lac b) Rs87 lac c) Rs 95 lac d) Rs 85 lac
85) Stock for Rs50 lac was insured for only Rs 20 lac which was destroyed by fire . What amount will be settled by the Insurance Company ?
a) Rs 20 lac b) Rs 50 lac c) Rs8 lac d) Rs10 lac
86) If the break even point is at 40% of total sales ,then what will be the margin of safety?
a) 40% b) 50% c) 60% d) 80%
87) The current assets and liabilities of a company are given below :
Current Liabilities (Rs/lac) Current Assets (Rs/lac)
Creditors for purchase 400 Raw materials 760
Other current liabilities 200 Stock-in-process 80
Short term Bank Borrowings 800 Finished goods 360
Receivables 220
Other Current Asset 60
Calculate MPBF under the 2nd Method of lending
a) Rs510 lac b) Rs800 lac c) Rs760 lac d) Rs660 lac
88) PAT is Rs 10 lac, Depreciation is Rs2 lac, Interest on Term loan is Rs1.50 lac ,
Annual repayment is Rs4lac, what will be the DSCR ?
a) 2.43 b) 2.23 c) 2.34 d) 2.45
89) Under UCO Shelter Scheme, How much loan for purchase of land is given ?
a) 50% of cost of land subject to 40 % of total project cost
b) 50% of cost of land subject to 50% of total project cost
c) 50% of cost of land subject to 30% of total project cost
d) 30% of cost of land subject to 50% of total project cost
90) In regard to pre-payment charge in case of UCO Shelter loan, which of the following is true
a) No pre-payment charge if loan is adjusted after 2 years from the date of disbursement
b) 50% of the normal pre-payment charge when loan is repaid from own source
c) Prepayment charge is @2% on the prepaid amount for both fixed and variable ROI.
d) Prepayment charge is @1% on the prepaid amount for both fixed and variable ROI.
91) In Cash Credit accounts, the period of limitation is of three years to be counted from
a) Date of default b)Date of sanction c) Date of documents
d) Date of default by all the parties including guarantor
92) In case of Equitable mortgage, Which one is correct ?
a) The delivery of title deed must be in writing
b) The delivery of title deed must be in notified place
c) The title deed after delivery must continue to be kept in the notified place.
d) both (b) & (c)
93) The term ‘Net Working Capital (NWC)’ is also known as
a) Margin for working capital
b) Total Current assets minus total current liabilities
c) Surplus of long term sources over long term uses
d) All the above
94) An applicant for UCO Mortgage loan has the following details
Gross annual income : Rs2.40 lac , Value of the property to be mortgaged : Rs 10.00 lac, EMI for Rs1.00 lac @15.5% for 84 months repayment period is Rs1960/-.What amount loan will be eligible under UCO Mortgage ?
a) Rs8.00 lac b) Rs 6.00 lac c) Rs 5.00 lac d) Rs7.00 lac
95) Lending power of a Scale-II officer for UCO mortgage loan is
a) Rs20.00 lac b) Rs 5.00 lac c) Rs 10.00 lac d) Nil.
96) Net Sales is Rs120 lac, Cost of Sales is Rs100 lac, Closing Stock is Rs20 lac
What will be the Finished Goods holding Period and Gross profit ratio ?
a) 2.5 months, 20% b) 2.4 months, 16.67% c) 2.5 months, 16.67% d) 2.4 months, 20%
97) AML/KYC guidelines are issued under
a) BR Act,1949 b) PMLA,2002 c) RBI Act d) both (a) & (b)
98) For the purpose of KYC Policy, a Customer is defined as
a) A person or entity that maintains an account and/or has a business relationship with the bank.
b) One on whose behalf the account is maintained (i.e., the beneficial owner)
c) Beneficiaries of transactions conducted by Professional intermediaries such as Stock brokers, Chartered
Accountants, Solicitors etc. as permitted under the law
d) any person or entity connected with a financial transaction which can pose significant reputational or other risks to
the bank, say, a wire transfer or issue of a high value demand draft as a single transaction
e) All the above.
99) Issue of demand draft or fund transfer by any other mode is restricted to Cash transaction up to
a) Rs50,000/- b) Rs49,999/- c) Rs20,000/- d) Rs19,999/-
100) As per KYC guidelines, which of the following customers is having high risk?
a) Central Govt. employee b) State Govt. employee c) Business man
d) Politically exposed person resident abroad.
Answers:
1)d) 2)c) 3)c) 4)b) 5) c) 6)a) 7)d) 8)b) 9)d) 10)c) 11) b) 12) c) 13) c) 14) d) 15) a)
16) c) 17) b) 18) c) 19) a) 20) c) 21) a) 22) d) 23) b) 24) d) 25) d) 26) c) 27)a) 28) d)
29) a) 30) b) 31) d) 32) b) 33) c) 34) b) 35) b) 36) b) 37) c) 38) a) 39) c) 40) c) 41) a)
42) c) 43) d) 44) c) 45) c) 46) d) 47) b) 48)a) 49) b) 50)d) 51)c) 52)d) 53)b) 54) a) 55)c)
56)a) 57)b) 58)c) 59)d) 60)a) 61)b) 62)b) 63)c) 64)d) 65)b) 66)b) 67)d) 68)b) 69)a) 70)d)
71)b) 72)b) 73)a) 74)c) 75)c) 76)b) 77)a) 78)d) 79)c) 80)b) 81)c) 82)d) 83)d) 84)b) 85)c)
86)c) 87)a) 88)d) 89)c) 90)c) 91)c) 92)b) 93)d) 94)b) 95)c) 96)b) 97)d) 98)e) 99)b) 100)d)
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BANK CIRCULARS SNIPPETS & UPDATES
1)‘Transfer Price Mechanism’ means: Interest receivable/payable by branches on the net funds lent/borrowed to/from Head Office.The rate of interest under Transfer Price Mechanism for the Quarter ending Sept’08.is 4.76%
2)The cost of deposits of the Bank for quarter ending March’08 is 7.01%
3)The aggregate threshold limit under ‘Performance Based Incentive Scheme’ is 75%
4)In case of qualifying branches under ‘Performance based incentive scheme’, incentive payable to Branch Head and employees is 20% & 10% respectively
5)Service Tax on Educational Loan under Priority Sector Advance is NIL
6)Cash Handling Charges shall be levied effective 01.07.08 for cash deposits into Current/Cash credit A/Cs (Except current accounts maintained by the individual for non business purpose) beyond the threshold limit of RS:50,000/- per day per account.
Charges:up to 10 Packets—free. Notes upto denomination of RS:100/- ---RS:10/-per packet.
Notes above denomination of RS:100/---RS:8/-per packet, Subject to maximum of Rs10,000/-
7)All remittances (DD/TT/MT) against cash shall attract additional service charges of 30% for customers & 50% for Non Customers. Such remittance is restricted to RS:50,000/-
Charges are inclusive of Service Tax.
Concession upto 50% of Normal Charge may be allowed in CA A/Cs maintaining average balance of RS:1 lac/RS:3 lac in line with concession allowed for UCO Value/UCO Premium A/Cs.
Such charges to be credited to Other Receipt A/c.
8)Maximum amount for ‘Immediate Credit’ of outstation Cheques and Drafts under collection in case of Individual accounts is Rs15,000/- & Rs25,000/- respectively
9)Service Charge for extending Immediate Credit of local cheque is flat Charge of Rs25/- up to Rs25,000/
10)In case of delay beyond 14 days for collection of outstation cheque in case of 4 metro cities Bank has to pay interest at the rate of Term Deposit for the respective period and in case of Delay of more than 90 days 2% above Term Deposit rate and In case of Overdraft/Loan A/Cs, Proceeds have to be VALUE DATED
11)Cheque sent for collection and returned where instant credit given in savings A/c
No interest to be charged if money was not withdrawn from the A/c.
12)Under prevention of Money Laundering Act 2002, CTR is to be submitted in respect of
Cash transactions more than 10 lacs in aggregate over all transactions in a day.
13)Issuance of Post Dated cheques for availing financial assistance is permitted for VISUALLY IMPAIRED.
14)Visa Debit card can be linked with Multiple Accounts of the customer.
15)Short Term credit upto RS:3 lacs to Farmers-As announced in Budget for 2008-09
Interest @7% p.a. with Interest Subvention @2% by Govt. Of India
16)To free small & Marginal farmers from the clutches of Money Lenders new scheme under Direct Agriculture as announced in Budget for 2008-09 launched by UCO Bank.
UCO Mahajan Rin Mukti Yojna. Finance Minister has set a target of minimum 3% of direct agricultural lending under the scheme. Eligibility : a) All farmers including tenant cultivators and oral lessees b) farmers are required to satisfy the bank officials regarding indebtedness from the money lenders c) they should not be defaulters to any bank d) SHGs will also be eligible for on lending to the members for debt swapping. Sanctioning authority : Branch Manager. Margin :Nil Quantum : Maximum Rs25,000/- per family in the form of term loan repayable within 5-7 years with moratorium of 12 months by annual installment.
17)Maximum Gold Loan for Direct agriculture purposes Rs3lac
18)Scheme for Technology Upgradation for Food Processing Industries(MODIFICATIONS):
Surety Bond to be executed by Beneficiary company at the time of request for release of first installment of Grant.
Utilization Certificate for first Installment to be furnished by the company at the time of request for release of second installment & same to be again obtained for the second installment after actual release/credit of second installment.
19)Rate of Interest for Housing Loans under ‘Indira Awaas Yojna’ Budget of 2008-09
as applicable to applicant eligible under DRI ( 4%) i.e-Annual Family Income not more than RS:18,000/- in Rural Areas
20)Loan to Scavengers and their Dependants under ‘SRMS’
Term Loan upto RS:5 lacs AND Micro Finance upto RS:25,000/-
ROI :up to Rs25,000/---4% (for women), 5% (for others). Above Rs25,000/---6%.
Repayment: 36 monthly installments for loans up to Rs25,000/-.& 60 installments for loans above Rs25,000/-with moratorium of 6 months.
Subsidy : up to Rs25,000/---50% of the project cost. Above Rs25,000/--- 25% of PC with minimum Rs12,500/-& maximum Rs20,000/-.
21)Weaker Section Lending Target--10% of Adjusted Net Bank Credit
22)RBI has advised all PSB’s to classify overdrafts against “No Frills” A/c granted upto RS:25,000/-per account in Rural & Semi Urban Areas as Indirect Finance to Agriculture sector under PS.
23)Financial Assistance under “Tax Return Preparer Scheme”-- Maximum RS:1 lac
24)Per Capita Income for Village Industries under ‘REGP’ is
RS:1 lac in Plain Areas and RS:1.50 lacs in Hilly Areas
25)If Borrower uses funds for Agricultural activities,then the advance under Mid Market Segment can be classified as Direct Agriculture under Priority Sector Advance
26)Advances given to Retail Trade under UCO Trader Scheme not exceeding RS:20 lacs is Priority Sector advance.
27) Maximum Loan Limit covered under ‘CGTMSE’ (Credit Guarantee Fund Trust for Micro & Small Enterprises) is Rs:50 lacs by way of term loan or/and working capital without obtaining collateral security or third party guarantee.
28)Credit Guarantee Cover under ‘CGTMSE’ is 75% of the amount in default subject to a maximum of Rs37.50lac to a borrower. However, the cover is 80% in case of a) Loans to Micro Enterprises up to Rs5lac b) Loans to Micro & Small Enterprises operated or owned by women c) All loans in the North Eastern Region.
29)CGTMSE:(07-08)One time guarantee fee 1.5 % & Annual Service Fee 0.75% in respect of credit facility above Rs5lac. One time guarantee fee 1 % & Annual Service Fee 0.5% in respect of credit facility up to Rs5lac.
Guarantee fee is to be paid within 30 days from the date of first disbursement of credit facility and annual service fee is to be paid within 60 days i.e., on or before May31 every year.
For North Eastern Region, One time guarantee fee is 0.75%.
For term loan guarantee cover is for agreed tenure of the term loan/composite credit and for working capital , the guarantee cover is for 5 Years or for block of 5 years.
30)NABARD would provide grant support to various activities of Farmers Club for period of 3 years.
31)Assistance under Technology Up gradation for Food Processing Industries
Maximum Rs25 % of cost of Plant & Machinery and Technical Civil Works subject to maximum of Rs50lacs in General Areas and 33% & Rs75lacs in difficult Areas
32)“JANASHREE BIMA YOJNA”- A scheme operated in association with LIC of India for Rural & Urban Poor living below and Marginally above the Poverty Line-Exclusively for Women who are members of Credit Linked women SHG’s of our Bank. Premium RS:200/-;--- RS:100/- to be paid out of Social security fund created by Govt. of India and RS:100/- to be paid by the SHG/Woman member, -----Insurance cover RS:30,000/- Add On benefit ------scholarship for two children between class IX & XII.
33) NO DUE CERTIFICATE:Priority & Non Priority Sector RS:50/- per Certificate.
Such certificate not required for loans upto RS:50,000/- for small & Marginal Farmers/ Share Cropper and the like.
34) UCO EDUCATIONAL LOAN SCHEME-
Studies in India-Maximum RS:10 lacs/Abroad-RS:20 lacs
No Margin/security for loan up to Rs4lacs. Loans above Rs4lac and up to Rs7.50lac, collateral security in the form of third party guarantee is required which may be waived if the parents have the satisfactory net worth. Loans for RS:7.50lacs & above require collateral security support equivalent to full value of Loan. Loan can be applied ON LINE thru Bank’s Website.
35)UCO SHELTER:Approval of Housing Project by respective Zonal Office shall precede sanction of loan for purchase of Flat under this scheme.
36) Branches which qualify to become BIMA BANK get Fixed Cash Reward, subject to garnering 200 LIC Policies or Total first Premium of Rs30lacs for the year 2008-09.
37) Bank has entered into agency arrangement with NICL for insurance of Assets created (Fixed & Movable) out of
Bank’s finance.
38)PRE FUNDED CHEQUES – UCO Magic Cheque (New Scheme):Effective 01.09.2008-Applicable in 261 CBS Branches only. Separate A/C to be Opened.
No other transactions in this A/C
Salient Features—Can be used as Gift Cheques/Demand Drafts/Travellers Cheques
Facility available to SB/CA A/C holders & FULLY KYC Compliant.
Cheque Books in the denomination of RS:1000/-, RS:5,000/- & RS:10,000/-
Charges for Cheque Book—RS:50/-, RS:50/-, & RS:100/-
Validity of Cheques—6 Months & Issued for Prepaid value.
Account would earn interest at Savings Bank Rate.
39)UCO PREMIUM PLUS Current Accounts (UPCCA):
Free Remittance Facility upto 2 times of the chosen Minimum Monthly Average Balance.(RS:1 lac and in multiple of RS: 1 lac)—KYC Compliant.
Maximum daily remittance shall not exceed RS:20 lacs for MAB criteria of RS:20 lacs.
Applicable charges for Non maintenance of MAB. The facility is only available for remittance within India.
40)Western Union Money Transfer Channel:Payment of sale proceeds in cash by Foreign Visitors/NRI’s raised to US$3000 per transaction. All encashment within one month may be treated as single transaction.
41)Fund Transfer facility is available between multiple accounts attached with VISA Debit card of the Bank.
42)Under CBS system ‘NAPs’ is referred to as “Network Aggregation Points”
43)UNDER ‘UCO MOBILE BANKING’—SMS for query to be sent at (56161)
44)“LAN” : Stands for ‘LOCAL AREA NETWORK’
45)‘PUSH MESSAGES’ are the customized alerts from the bank for various activities performed on the account of the customer.
46)‘PULL MESSAGES’ are those initiated by the customer for obtaining information or performing a transaction. (Presently financial transactions are not allowed).
47)In a recent communication RBI has informed that all that large value payments amounting to RS:10 lacs and above should be routed thru RTGS/NEFT/ECS system.
48) In case of UCO e-banking Password expiry period has been increased from 60 days to 365 days(1 year).and User id expiry period has been increased from 90 days to 365 days(1 year)
49) In case of Single Window System ,Computer ‘B’ Operator can) pass cash payments upto RS:20,000/- 2)Pass Transfer & Clearing vouchers upto RS:25,000/- and, 3)Issuance of pre-defined Drafts/Pay ordes/Bank Orders upto RS:25,000/-.
50) Transaction Code for Savings A/C=30, for Current A/C=29, and for Cash Credit A/C=31 in case of Multicity Cheques which are payable at par at all the CBS branches of the Bank.
51)Charges payable by the customer issuing the Multicity cheque are “FREE” if the Base and Paying branch are under same clearing centre AND If the Base branch & Paying branch are under different clearing centre RS:28/- for amounts upto RS:25,000/- ----Thereafter RS:1.75 per RS:1,000/- or part thereof with minimum of RS:28/- per transaction.
52)New Scheme “UCO CHANNEL” consists of Financing the Suppliers and Dealers through Drawee Bill of Finance.---Applicable for existing PSU’s/Large & Mid sized companies/Listed Public Company/SMEs. Eligibility- Turnover of RS:50 crore as per last audited financial return & Net worth of RS:50 lacs as per latest Audited Balance Sheet. Minimum Credit Rating A/T2.
CORE BANKING SOLUTIONS:
53)What is iRPS?
The full name is integrated Request processing system. This intranet site will be available for CBS Branch, Regional Office, and Head Office Users to send and track various types of requests. Presently CBS user related requests and ATM card related requests can be sent by the system.
54)What kind of request can be sent through iRPS?
Currently branch users can send CBS User related requests like User Creation, User Power Change, User SOL change, Password reset, User Un-deletion and ATM card related requests like Card Activation, A/C Linking, A/C De-linking, Duplicate Pin, A/C Change, Card Hot listing, Card De hot-listing. Regional Office users can send only CBS User related requests and recommend CBS user related requests originating from the branches coming under their region.
CBS stands for Core Banking Solutions
55)SIVAGANGA Branch in Tamilnadu opened on 25.10.08 is 2000th branch of UCO Bank AND 1000th branch under CBS system.
56)CBS CHARGES-Deposit/Withdrawal of cash at local non base branch-FREE upto RS:50,000/-per day. Thereafter RS:1.50 per RS:1000/-or part thereof subject to minimum of RS:30/- and maximum of RS:12,000/-. Outstation Non Base Branch @ RS:2.50 per RS:1000/- or part thereof subject to minimum of RS:40/- and maximum of RS:12,000/-.
57)The Settlement Time for RTGS (Real Time Gross Settlement)
For Inter Bank Customer Payments
· Weekdays – 0900 to 1630 hours · Saturday – 0900 to 1200 hours
For Inter Bank Payments
· Weekdays – 0900 to 1800 hours · Saturday – 0900 to 1400 hours
58)The Settlement Time Windows for NEFT(National Electronic Fund Transfer)
Weekdays – 6 settlements : 0900, 1100, 1200, 1300, 1500 and 1700hours
Saturday – 3 settlements :0900, 1100, and 1200 hours
NEFT allowed for remittance by Nepali workers in India to their family
Features: Ceiling of INR 50,000 per remittance.
Facility for Customers & Non Customers.
Presently—Transfer from bank account FREE of charge
But for cash remittances upto RS:INR 5,000/- Flat Charge of RS:50/- &
Cash remittances from INR 5001/ TO INR 50,000 Flat Charge RS:75/-
59) Scheme of Incentives and penalties for bank branches including currency chests, based on performance in rendering services to public with effect from 01.10.2008.
Incentives: For opening and maintaining currency chests at centers having less than 1lac population in under-banked states : a)50% of capital expenditure subject to ceiling of Rs50lac per currency chest and in NE, 100% of capital expenditure subject to ceiling of Rs50lac per currency chest b) 50% of revenue expenditure for the first 3 years( for 5 years for NE) c) Exchange of soiled notes- one rupee per packet in Rs5,10,20,50 denomination d) Adjudication of mutilated notes-Rs2 per piece. e) Distribution of coins over counter- Rs25 per bag. f) Establishment of coin vending machines-Capital cost-50% for urban & metro centers and 75% for rural & semi-urban centers.
Penalties: a) Shortages in the soiled note remittances and Chest balances in excess of 2 pieces per million—Rs100/- per piece up to Rs100 denomination and Rs5000 per piece for Rs500 and Rs1000 denomination in addition to the loss b) Detection of counterfeit notes in soiled note remittances and chest balances in excess of 2 pieces per million till June,2009 and 1 piece per million from July,2009
--- Rs1000 per piece up to Rs100 denomination and Rs5000 per piece for Rs500 and Rs1000 denomination. 3 penalties in case of currency chest branch, additional penalty of Rs5lac and reporting in public domain. c) detection of mutilated/deliberately cut notes-Rs5000 for each piece of detection.
(for further see circular no :CHO/SUA/40/2008-09)
60) RBI has started issuing star series bank notes which will look exactly like the existing bank notes of Rs10, Rs20 & Rs50 but will have an additional character, viz., *(star) in the number panel between the prefix and the serial number.
61) Charges for transfer of surplus clearing funds :a) A flat fee of Rs200only per transaction for first four remittances in a week. b) commission @Re1 per Rs1000 subject to a minimum of Rs200 and maximum Rs1500 per transaction from the 5th remittance onwards in a week.
62) a)The bank will accept deposits for a minimum period of 7 days provided the minimum deposit amount is Rs15lac. b) The incentive rate for members of staff/ex-staff will be 1% over the rate applicable to General depositors. c) For Ex-staff senior Citizen, the incentive rate for a period 6 months to less than 3 years is 1.25% and for a period above 3 years , it is 1.50%. Such incentives rate will be applicable up to an amount equivalent to terminal benefits+ Rs10lac.
63) Rate of interest for Senior citizen (General depositor & Ex-staff)/Staff/Ex-staff for UCO Tax Saver Scheme is the same and is now 9.5% w.e.f.20.10.2008. For general depositor, the rate is 9%.
64) MOU for Group Mediclaim Insurance Scheme for staff & their dependent family members with personal accident insurance has been signed with United India Insurance Company Ltd on 23.10.2008 and the bank. The scheme provides for reimbursement of residual hospitalization expenses along with pre and post hospitalization expenses to the extent of Rs1.50lac beyond the permissible limit under Bank’s hospitalization scheme. The personal accident insurance coverage will be maximum Rs3lac.The premium amount for the year 2008-09 along with service tax is Rs999/- per family for mediclaim policy and Rs169 for Personal accident insurance coverage. Expenses on hospitalization for minimum period of 24 hours are admissible generally. The domiciliary hospitalization benefit is not available in this scheme. Pre and post hospitalization expenses for 30 days will be considered as part of claim. First 30 days exclusion clause or 1St year exclusion clause is not applicable. The cover starts since inception of the policy. For the current year, the coverage period is 1st November, 2008 to 31st October, 2009. The claim will be settled through Third Party Administrator(TPA), M/S TTK Healthcare TPA Pvt Ltd having their office at 12, Chowrinhee Squre, Kolkata-700069.
65) Simplification for lending for Crop loans : If the landless laborers, Share croppers and oral lessees find difficulty in obtaining certificate from local administrators/ Panchayat Raj Institutions regarding verification of their identity and status, Banks may accept an affidavit submitted by landless laborers, Share croppers and oral lessees giving occupational status (i.e., details of land tilted and crops grown) for loan up to Rs50,000/-
66) List of Hot keys (Commonly Used Keys)-FINACLE(CBS)
Key
Function
Description
F1
Help
Displays field level help messages
F2
List
Lists the Codes to be used in a particular field
F3
Quit / Exit
Takes the user to where he started. This can be used to abandon incorrect data before accepting it and also to go back to the previous menu
F4
Accept
F5
Background Menu
F6
Next Block (Next Page)
To go to next page / next block depending upon the screen
F8
Copy record
It copied record of one field to another same type of field for faster work
F9
View Signatures
To access specimen signatures (Alt+F4 to close)
F10
Commit
To conclude transactions and once this key is pressed, related data is written into the database
F11
Validates
It checks the data & takes the user to Next Field
F12
Previous Block / Page
To come back to previous page / block depending on the screen
TAB / Enter
Next Field
To go the next field without validation
Down Arrow ↓
Next record
To see the next record in the same transaction like seeing the next voucher etc.
Up Arrow ↑
Previous Record
To see the previous record in the same transaction like seeing the previous voucher
CTRL+D
Page Down on a List
Whenever a list is populated , for speedier scrolling downward
CTRL+U
Page Up on a List
Whenever a list is populated, for speedier scrolling upward
CTRL+E
Explode
Used for taking a look at further details
CTRL+F
Clear field
To delete the wrong entry made in a field
CTRL+X
Insert BOD Date
To populate that day’s date
CTRL+F9
Memopad lookup
Whenever remarks have been made, to view the memopad
SHIFT+F4
Select an item from the List
To select one particular item from the list
SHIFT+F11
Transmit
It the keys are locked, to enable functioning of keys
SHIFT+TAB
Go to Previous Field
To move backwards to a previous field
SHIFT+F3
Go to Finacle main menu
To exit from whatever screen an go to main menu
NPA MANAGEMENT
67)NPA is a loan or an advance where-
1)Interest and or installment of principal remain overdue for a period of more than 90 days in respect of TERM LOAN.
2)The account remains ‘out of order’ (i.e if outstanding balance remains continuously in excess of sanctioned limt/drawing power)in respect of an overdraft/cash credit A/c.
3)The bill remains overdue for a period of more than 90 days in the case of bills purchased/discounted.
4)The installment of principal or interest thereon remains overdue for two crop seasons for short duration crops.
5)The installment of principal or interest thereon remains overdue for one crop seasons for long duration crops.
68) PROVISIONING NORMS- SECURED UNSECURED
Sub Standard (Secured) 10%
Sub Standard (Unsecured ab initio) 20%
DOUBTFUL-I (upto 1 year) 20% 100%
DOUBTFUL-II (1 to 3 years) 30% 100%
DOUBTFUL-III (More than 3 Years) 100% 100%
LOSS 100% 100%
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69) Notice under SARFAESI Act 2002 u/s 13(2) to be issued for NPA A/Cs with balance of RS:1 lac and above within 7 days of account being classified as NPA.
Any representation from Borrower/Guarantor to be replied within 7 days of receipt of such letter informing the reasons for non-acceptance of the representation.
On expiry of 60 days of notice period Authorised Officer of the Bank should take possession of the assets charged to the Bank.
MOVABLE ASSETS;-------Only Physical Possession
IMMOVABLE ASSETS- 1)Symbolic 2)Constructive 3)Physical Possession.
Provisions of SARFAESI Act does not apply to:
1) Lien on any goods, money or security.
2) Pledge of Movables.
3) Security created in any Aircraft.
4) Security interest in any Vessel.
5) Any conditional sale, hire purchase or lease or any contract in which no security has been created.
6) Rights of Unpaid seller.
7) Property not liable to attachment or sale under CPC.
8) Security interest for securing repayment of any financial asset not exceeding RS:1 lac.
9) Security interst in Agricultural land.
10)Any case where the amount due is less than 20% of the principal amount and interest thereon.
70) Application for recovery of dues can be filed with DRT where claim is RS:10 lacs and above.
71)‘KYRA NORMS’: are Know Your Recovery Agents & Model code for Recovery/Enforcement Agents. Ordinarily Commission Rates payable to Enforcement Agents under commission basis:
*15% on the amount of recovery upto RS:5 lacs
*10% on the amount of recovery of RS:5 lacs to RS:15 lacs
*5% on the amount of recovery exceeding RS:15 lacs
(SUJECT TO MAXIMUM OF RS:10 LACS)
while appointing agents the care should be taken : a) KYC norms to be observed b) Ensure that agents are not engaged in money laundering business c) Not having any criminal back grouind.
72) Compromise settlement :Down Payment of 25% of the compromise offer in case of OTS is to be insisted and kept in’NO LIEN A/C’.
But competent Authority may consider lesser Down Payment, but not below than 10%.
Normally payment of compromise settlement should be completed within 12 months- But,period may be extended up to maximum of 24 months, with a stipulation of charging interest @ BPLR simple on compounded amount and charging of compound interest is also not precluded. Payments exceeding 24 months will have to be approved by ED/CMD.
SAC is ‘SETTLEMENT ADVISORY COMMITTEE
CECP is ‘COMMITTEE FOR EVALUATION OF COMPROMISE PROPOSAL’
Compromise is also allowed in Decreed Cases or even where Criminal proceedings OR in cases where CBI investigation is in progress.
Charges for ‘NO DUES CERTFICATE’ ( sanction or disbursed limit is above RS:5lac)
*RS:1,000/- per certificate where terms of Compromise were adhered AND
*RS:2,000/- per certificate where terms of compromise were not adhered strictly.
73)PRUDENTIAL WRITE OFF: Where NPA A/Cs are classified as D-III OR Loss Assets and 100% Provision has been made and staff accountability has been examined and suit filed for recovery. The same should be transferred to ‘MEMORANDUM LEDGER’.
74)REGULAR WRITE OFF: Where all possible means of recovery have been exhausted.
75)DETECTIVE AGENCY can be engaged to ascertain other assets of the borrower not charged to the bank for recovery, where NPA was more than RS:25 lacs.
76)All legal expenses in relation to NPA A/Cs to be debited to Bank’s P/L A/C BUT expenses relating to Recovery & Enforcement Agent/Godown Keeper’s salary/ charges on Insurance & security etc to be debited to borrower’s NPA Account.
77)APPROPRIATION OF RECOVERY IN NPA A/C:
*In case of Sub Standard A/Cs: Recovery to be appropriated towards reduction in irregularity which caused A/C to become NPA.
*In case of NPA A/Cs other than sub standard: Recovery to be first appropriated towards reduction of outstanding balance till all Principal Dues are paid. Next appropriation towards interest not charged to the A/C. And the balance for recovery of charges debited to Bank’s P/L A/C.
*For Suit Filed A/Cs: Appropriation as per decree awarded in favour of the bank. If Decree is silent on such aspect then abovementioned two steps to be followed depending upon the Asset Category.
78)Definition of Wilful Default:
*Where Unit has defaulted repayment obligations even when it has capacity to pay.
*When the funds borrowed have not been utilized for specific purposes but diverted.
*Funds are not available in form of other assets.
79)SARFAESI Act 2002: Effective 20.09.2002
Enforcement of Security rights i.e taking possession u/s sec13(4) SARFAESI Act of the assets charged to bank after 60 days of issuance of Demand notice under sec 13(2).
PANCHNAMA & INVENTORY to be necessarily made upon taking Possession.
Such action has to be mandatorily published in English Newspaper and in a newspaper published in an Indian language in circulation in the place where principal office of the borrower is situated.
A 30 day notice for sale should be served to the borrower. However as sec 17(1) provides that borrower can challenge the measures taken by the bank u/s 13(4) within 45 days from the date on which such measures have been taken, it is advisable to have a minimum gap of 45 days between taking possession and sale of Assets.
Under SARFAESI Act there is no necessity for execution of sale deed by the authorized Officer in favour of the purchaser, and issuance of Certificate of Sale is sufficient.
Application to CMM/DM for taking possession of secured Asset---SEC 14
Borrower/Guarantor can approach DRT only within 45 days of bank taking possession of the assets—Sec 17(1)
DRAT can be approached if such application not disposed off by DRT within 6 months.
In case of Consortium Advance rights u/s 13(4) can be exercised only if it is agreed by the secured creditors representing not less than 75% or 3/4th in value of the amount outstanding, and such action shall be binding on all the secured debts.
When any action u/s 13(4) of SARFAESI is initiates the BIFR proceedings under SICA shall abate.
In the case of Transcore Vs Union Of India & Ors the Apex Court has pronounced that action by Banks can simultaneously take place against the borrower under SARFAESI ,
RDDB & FI Act 1993.
Under the Securitisation Act, High Court or any other Civil Court has no jurisdiction to entertain applications challenging the actions of the Bank in taking possession of the Securities.
SARFAESI stands for: Securitization and reconstruction of financial assets and enforcement of security interest.
Authorized officer: means an officer not less than Chief Manager of PSB or equivalent.
80)‘UCO SWABHIMAN’- Reverse Mortgage Loan Scheme for Senior Citizens who are above 60 years of age.
*Maximum Loan RS:50 lacs. *Margin: 40%
*Processing Charge:0.25%---Can be waived by CMD
*Period of Loan-Minimum 5 Years AND Maximum 15 Years
Disbursement: Monthly/Quarterly with Fixed/increasing equated monthly disbursement with an option to avail on-time lump sum payment during entire tenure of 15 years
*Security:Mortgage of Residential Property owned & self occupied
*Repayment-Loan would be due when last borrower dies/permanently moves out of the house/would like to sell the house.
*Property should be insured and the Bank has RIGHT OF FORECLOSURE
*Option available to legal heirs to repay & redeem the house property.
81)FINANCIAL RESULTS OF THE BANK(Half Year Ending SEPT ’08)
*Growth in Global Net Profit: 16.49% *Net Profit: RS:283.53 Crores
*Growth in Global Business: 19.83% *Growth in Deposits:16.68%
*Growth in Advances:24.48% *Total Business as on 30.09.08: RS:141397 Crore
*Deposits: RS:82019 Cr * Advances: RS:59378 Cr
*Growth in Domestic Business: 18.86% *Growth in Domestic Deposits: 15.55%
*Growth in Domestic Advances: 23.83% *Growth in CASA on Y-O-Y Basis: 22.79%
*Total Priority Sector Advance:RS:20,154 crore *Percentage of Priority Sector Advance to Total Advance: 40.49%
*ADDR 2008- Benefit to 2,87,141 Farmers
* NPA Reduction: RS:409 Crore
*Cash Recovery RS:272 Crore *Upgradation RS:130Crore)
*Gross NPA down to: 2.58% *Net NPA down to: 1.61%
*CRAR: 10.25% as per Basle I & 11.61% as per Basle II
*National Award for excellence in lending to Micro Enterprises for the year 07-08
*National Award for lending under REGP Scheme(KVIC)Eastern Zone YR 07-08
82) DRI Scheme : Income criteria for DRI beneficiary were a) annual family income of Rs18,000/- in rural areas and b) Rs24,000/- in Urban areas. Now, RBI has communicated that the income criterion of Rs24,000/-for urban areas under DRI scheme is applicable to semi-urban areas also. It may be noted that Ministry of Finance has set disbursement target of 5 loan accounts per branch per quarter.
83) Recent inclusion of courses eligible for UCO Education loan : a) Teacher Training course b) Nursing Course and c) B.Ed.
84) Forged Currency notes: On detection of forged notes tendered at the bank branches, lodgment of FIR is mandatory and one copy of FIR is to be sent to CMD’s office and another copy to GM, Finance, HO.
85) Levy of Service Charges : a) Electronic Payment Products :
i) Inward RTGS/NEFT/ECS—No charge to be levied.
ii) Outward RTGS—Rs1lac < Rs5lac-Rs25/- per transaction
Rs5lac & above-Rs50/- per transaction
iii) Outward NEFT--- < Rs1lac—Rs5/- per transaction
Rs1lac 7 above—Rs25/- per transaction
For ECS debit return charges applicable to cheque return shall be levied. These charges shall be applicable for all types of transactions, including inter bank fund transfers.
Outstation Cheque Collection : a) Up to Rs10,000/- --Rs50/- per instrument b) above Rs10,000/- up to Rs1,00,000/- --Rs100/- per instrument c) above Rs1,00,000/---Rs150/- per instrument.
The above charges are all inclusive i.e., including courier charges etc.
86) Penalty for Premature closure of term deposits : a) Less than Rs1crore –1% less than the applicable rate for which the deposit was held by the bank, as on the date of deposit or present rate which ever is lower b) Rs1crore & above—applicable card rate for non-incentive deposits for the period of the deposit kept with the bank.
87) Downgrade in rating due to non-submission of financial statements in time: Non-submission of audited financial statements by the borrowers within 7 months from the relevant date will attract down grade in rating by one notch. Rate of interest will be charged according to revised rating. Further, non submission within next 3 months will attract another down grade by one more notch and rate of interest will be applied accordingly. No concession in rate of interest will be admissible in such cases.
88) UCO Personal Care Bima Policy : a) The scheme has been introduced in tie up with Cholamandalam MS General Insurance Company Ltd and is open to all types of Individual Account holders viz, SB, CA,FD,RD,CC and all types of loan accounts in individual names only.
b) Minimum coverage will be Rs1lac and maximum coverage will be Rs5lac c) The scheme shall be effective from 1st July, 2008.d) Minimum age for entry would be 5 completed years and maximum up to 70 years of age e) Premium Rs3 per lac SA f) In case of accidental death, 100% of the SA will be payable, whereas for permanent total disablement, coverage available would be 125% of SA g) out of Rs3 premium per lac, Rs2.81 is payable to the company and 19 paisa is retained as administrative charges.
89) Public Information Officer under RI Act: DGM, Strategic Planning, HO
90) TDS : Interest on time deposit to individual, HUF, AOP exceeding Rs10,000/- and up to Rs10,00,000/----10.30%. Above Rs10 lac—11.33%. In case a company is a depositor, TDS rate up to Rs1crore is 20.60% and above Rs1crore, the rate is 22.66%
91) Bima Gram : By selling 100 polices in a particular village, LICI will offer an incentive up to a maximum of Rs.25,000/- to the village for social development project.
92) UCO No-frills SB account : a) can be opened with a initial deposit of Rs5/- b) the minimum initial deposit with cheque facility is Rs250/- c)the account will remain in operation if the minimum balance comes down to zero. d) The scheme is made available for all categories of branches, metro, urban, Semi-urban branch & rural branches. e) No incidental, folio or standing instruction charges f) simplified KYC guidelines g) Only 25 debit entries in a half year are allowed free of charge h) Rs3/- per debit entry when the debit entries exceed the stipulated level I) only one cheque book of 20 leaves is free for a year. Additional cheque leaves will be charged @ Rs2/- per cheque leaf j) the balance should not exceed Rs50,000/- and total credits in the account should not cross Rs1lac in a year, otherwise full KYC norms is to be observed.
93) Tierized Products: UCO Elite : This SB product requires maintaining of Rs.25000/- average monthly minimum balance estimated as average of daily balance. Charges for non-maintenance of monthly minimum balance will be Rs.100/- per month.. UCO Elite holders will get one free booklet of multicity personalized cheque book in each quarter & 15% discount on share of our commission on outstation clearing DD/TT/RTGS (apart from RBI charges) & locker rent. Pay orders of any amount will be issued for a charge of only Rs. 10/-. Immediate credit of outstation cheques upto Rs.15000/- in 1st year & upto Rs.25000/- after one year’s satisfactory operation. 50 transaction per quarter will be free, beyond that Rs.6/- per transaction. Standing instruction in the same branch & stop payment instruction will not attract any charges. Statement of a/c in addition to PB for the last one year will be provided free of cost. A discount of 50% on loan processing charges for retail loans will be available for UCO Elite SB a/c. holders for one year. Home delivery of DDs, PB & cheque book will be provided at the cost of only courier charges. Free accidental death insurance for Rs.100000/- will give a value addition to this product.A gift upto Rs.50/- will be provided to UCO Elite account holders.
UCO Royal :- This SB product requires maintaining of Rs.100000/- as minimum monthly average balance which would be based on average of daily balance. Charges for non maintenance of monthly minimum balance will be Rs.400/- per month. UCO Royal SB depositors will get 2 booklets of multicity personalized cheque book free per quarter. 30% discount on share of our commission in outstation clearing, DD/TT/MT/RTGS (apart from RBI charges) & on locker rent. Pay orders of any amount will be issued for a charge of only Rs. 10/-. Immediate credit of outstation cheques upto Rs.30000/- in 1st year & upto Rs.50000/- after one year’s satisfactory operation. Unlimited cash, clearing & transfer transaction will be free of cost. Standing instruction in the same branch & stop payment instruction will not attract any charges. Statement of a/c in addition to PB for the last two years will be provided free of cost. Loan processing charges on retail loans for UCO Royal SB a/c. holders for one year will be waived fully. Interest on retail loan will have 25 basis point waiver (a concession of 0.25% p.a.). Home delivery of DDs, PB & cheque book will be provided at the cost of only courier charges. Free accidental death insurance for Rs.500000/- will give a value addition to this product. A gift upto Rs.75/- will be provided to UCO Royal account holders.
UCO Retiree: This product requires a minimum term deposit of Rs.500000/- or monthly minimum average SB balance of Rs.100000/-. Charges for non-maintenance of monthly minimum balance will be Rs.400/- per month.. UCO Retiree holders will get one personalized cheque book and two booklets of multicity personalized cheque book free in each quarter & 30% discount on share of our commission on outstation clearing PO/DD & locker rent. Immediate credit of outstation cheques upto Rs.30000/- in 1st year & upto Rs.50000/- after one year’s satisfactory operation. Standing instruction in the same branch will not attract any charges. Unlimited cash, clearing & transfer transaction will be free of cost. Statement of a/c in addition to PB for the last two years will be provided free of cost. Home delivery of DDs, PB & cheque book will be provided at the cost of only courier charges. As a special feature Privileged Service Card will be provided which will assure direct access to department head and immediate services on priority basis.
UCO Value :- Apart from basic current account, this product requires maintaining of Rs.100000/- as minimum monthly average balance calculated on average of daily balances. Charges for non-maintenance are Rs.300/- per month. No folio charges for five pages ( 5 x 40 = 200 entries) per quarter, beyond that usual charges which are Rs. 56 per page are applicable. A discount of, 25% in DD/TT/MT/RTGS (apart from RBI charges) and 15% in outstation clearing, solvency certificate & locker rent. Preference will be given for locker facility subject to availability & Manager’s discretion. Pay orders will be issued only for out of pocket expenses 0f Rs.10/-. 100 leaves of multicity cheques per quarter will be free. Instant credit of outstation cheques upto Rs.15,000/- in 1st year & Rs.25,000/- after one year of satisfactory account. An overdraft facility for Rs. 25,000/- for seven days will be allowed to protect the bouncing of cheques. Statement of account will be provided free on fortnightly intervals. Rs. 28/- per statement will be charged for additional requirements. All standing instructions & stop payment instructions will not attract any charges. 50% discount in charges for issuance of balance certificate. Cheques pick up facility will be provided at a nominal cost of Rs.30/- per visit.
Home delivery facility of DDs/Cheque book/Pass book will be available & only courier charges will be recovered. A free gift upto Rs.50/- is allowed.
UCO Premium :- Apart from basic current account, this product requires maintaining of Rs.300000/- as minimum monthly average balance calculated on average of daily balances. Charges for non-maintenance are Rs.600/- per month. No folio charges will be applicable. A discount of 50% in exchange & commission for DD/TT/MT/RTGS (apart from RBI charges) 30% in outstation clearing charges, solvency certificate charges & locker rent. Preference will be given for locker facility subject to availability & Manager’s discretion. Pay orders will be issued only for out of pocket expenses Rs.10/-. 300 leaves of multicity cheques per quarter will be free. Instant credit of outstation cheques upto Rs.50,000/- An overdraft facility upto Rs. 1 lac for seven days will be allowed to protect the bouncing of cheques. Statement of account will be provided free on weekly intervals. Rs. 28/- per statement will be charged for additional requirements. All standing instruction & stop payment instruction will not attract any charges. Balance certificate will be issued free of cost. Cheques pick up facility will be provided free once a day for all other times Rs.30/- per visit. Accidental insurance for one person will be available for Rs. 3 lacs.
Home delivery facility of DDs/Cheque book/Pass book will be available & only courier charges will be recovered. A free gift upto Rs.75/- is allowed.
94) Gold loans : Maximum Loan amount Rs3lac to be utilized for agricultural purposes. The loan limit is restricted to 65% of the market price of Gold ornaments subject to maximum of Rs750/- per gm of 22 carat purity of gold ornaments
95) Indira Awas Yojna-Top UP loan Scheme :Eligibility: Poor rural households living below poverty line having an annual income up to Rs32000/-selected by Gram Sabha and sponsored by DRDA. Maximum loan amount :Rs20,000/-for project outlay up to Rs50,000/-.Margin :5% ROI: 9% PA. Repayment: 5 years which may be extended up to 7 years in monthly/quarterly/yearly installments
96) Minority communities as notified by the GOI : Sikhs, Muslims, Christians, Zoroastrians, Buddhists
Special cell to be set up at each bank with a Nodal Officer in the rank of DGM/AGM and the bank should ensure that a fair and equitable portion of the credit should flow to minority communities within the overall target of priority sector.
97) Reservation of SC/ST beneficiaries under Centrally sponsored schemes: SGSY—50%, PMRY—22.5%
SJSRY—according to strength in the local population DRI—40%
98) Priority Sector Advance target for domestic commercial bank: 40% of Adjusted Net Bank Credit(ANBC) or credit equivalent amount of Off-balance sheet exposure, whichever is higher.
ANBC or Credit equivalent of Off-balance sheet exposure will be computed with reference to the outstanding as on March 31 of the previous year. For computation of ANBC for priority sector lending purpose, outstanding FCNR(B) and NRNR deposits balances will no longer be deducted. For priority sector lending purpose, ANBC denotes NBC plus investments made by banks in non-SLR bonds held in HTM category. Existing investments as on April 30,2007, made by banks in non-SLR bonds held in HTM category will not be taken into account for calculation of ANBC up to March 31,2010. Investments made by banks in the re-capitalization bonds floated by government of India will not be taken into account for the purpose of calculation of ANBC. Deposits placed by banks with NABARD/SIDBI in lieu of non-achievement of priority sector lending targets/sub targets, though shown under Schedule 8—‘Investments’ in the balance sheet at item l (vi)—‘others’, will not be treated as investment in non-SLR bonds held under HTM category. For the purpose of computing credit equivalent of Off-balance sheet exposures, banks may use current exposure method. Inter-bank exposures will not be taken into account for the purpose of priority sector lending targets/sub targets.
99) Risk weight for commercial real estate exposure has been reduced to 100% from 150%.
100) Bank rate :6%, Repo rate : 7.5%, Reverse Repo rate: 6%, CRR: 5.5%, SLR:24% as on 25.11.2008.
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