FOREIGN EXCHANGE - MISCELLANEOUS

NRO ACCOUNTS 1. Which are the deposits from NRIs presently being accepted by the branches:
a) b) c) d) e) NRO, NRE !"NR #$% &chemes NRO, NRE, NRNR , NR&R !"NR # $% &chemes NRE, !"NR # $% , EE!" R!" &chemes None of the abo'e. NRO, NRE !"NR #(% &chemes.

). NRO a*c can be opened by+ a. $y re+designating the resident acco,nt of NRI. b. -roceeds of foreign in.ard remittance. c. a b d. $y transfer of f,nds from R!" (*c e. None of the abo'e /. Which of the follo.ing statements is not correct0 a. 1he balance in NRO a*c is e2empt from all the ta2es. b. NRO a*c is opened for ro,ting legitimate transactions of NRI. c. NRO a*c can be opened 3ointly .ith resident Indian. d. 1he NRO a*cs are similar to resident deposit acco,nts for d,ration of deposits, types of acco,nts and rate of interest. e. None of the abo'e. 4. Which of the follo.ing statements is correct0 a. 1he NRO acco,nt is redesignated as resident acco,nt as soon as the NRI becomes resident. b. 1he principal amo,nt and the interest paid in the acco,nt are non+repatriable. c. 5oan against NRO term deposit can not be granted to third party. d. No 1O6 sho,ld be granted to acco,nt holder more than Rs.17, 888.88. e. No declaration or ,nderta9ing need be obtained at the time of opening of or redesignation of a*c.

ANSWERS

1
1.

NRE ACCOUNTS
NRE acco,nts can be opened in the name of + a. Non+Resident Indians b. -ersons of Indian Origin c. O'erseas "orporate $odies d. a:b abo'e e. a:b:c abo'e !or opening of acco,nts in the name of -a9istani and $angladesh nationals re;,ire permissions of a. <o'ernment of India, ministry of finance b. !E6(I c. I$( d. =ead Office e. R$I

).

/. Which of the follo.ing statements is incorrect: a. !or opening of NRE a*c, local f,nds sho,ld not be accepted. b. NRE a*c sho,ld be opened only .ith f,nds recei'ed thro,gh foreign in.ard remittance. c. While opening the a*c, original pass port, foreign in.ard remittance, local address and foreign address of the acco,nt holder sho,ld be obtained. In some cases e'en the 'isa and employment details sho,ld also be obtained. d. In case of opening of 3oint acco,nt, both the acco,nt holder sho,ld be NRI. 1he 3oint acco,nt .ith resident Indian can not be opened as per !E>(. e. None of the abo'e. 4 In case po.er of attorney has been granted in fa'o,r of the resident Indian , .hich of the follo.ing transactions is not permitted to be carried o,t by the po.er of attorney holder? a. 6ra.al of money for local disb,rsement. b. In'estment*s of f,nds from the acco,nt, .hen permission of R$I has been obtained. c. 6eposition of foreign che;,e sent by the acco,nt holder. d. Repatriation of balance in the a*c other than to the a*c holder. e. None of the abo'e. Which of the follo.ing credits in the acco,nt are not permitted0 a. 1ransfer of f,nds from one NRE a*c to another NRE a*c. b. Interest and mat,rity proceeds from the in'estments made from NRE a*c. c. Ref,nd of application money for shares, in'estments and allotment money for p,rchase of flat*ho,se etc. in'ested from NRI f,nds. d. -roceeds of !oreign ",rrency Notes*$an9 Notes*tendered by (cco,nt holder and declared on a ",rrency 6eclaration !orm, .here'er applicable e. None of the abo'e.

7.

@. 1emporary o'erdraft to acco,nt holder can be granted ,p to? a. Rs. 18,888.88 s,b3ect to payment of 1O6 along .ith interest .ithin 18 days of 1O6. b. Rs.78, 888.88 s,b3ect to payment of o'erdra.ings together .ith interest .ithin t.o .ee9s. c.Rs.)7, 888.88 .ith interest .ithin t.o .ee9s. d. 1O6 can not be granted as it is against the !E>( g,idelines. e. None of the abo'e. A. Which of the follo.ing statements is incorrect0 a. 1he balance in the NRE a*c is repatriable .itho,t the permission of R$I. b. &pecial series of che;,e boo9 is iss,ed to acco,nt holder for easy identification and ;,ic9er processing of che;,es. c. 16& is to be ded,cted in case of income earned on NRE a*c. d. Nomination facility is a'ailable in the acco,nt. e. None of the abo'e. B. In case of premat,re .ithdra.al of deposits, this of the follo.ing statement is correct+ a. In case of premat,re of .ithdra.al of deposit for con'ersion from NRE to !"NR deposit, no penalty is charged. b. When there is a change of stat,s of depositor from NRI to Resident Indian and there is premat,re .ithdra.al of NRE deposit for par9ing deposit in to R!" a*c, no penalty is charged to the depositor. c. $eca,se minim,m period of term deposit has been increased from @ months to one year, the penalty of premat,re payment before one year has been dispensed .ith. d. None of the abo'e.

C. Regarding 5oan against NRE term deposit, .hich of the follo.ing statement is incorrect: a. 5oan against 16R can be granted to the depositor e2cept for certain p,rposes. b. 5oan and o'erdraft can be granted to the third party against the sec,rity of NRE 16R. c. (d'ance against the NRE 16R can also be granted to the depositor at foreign branches by mar9ing lien on the deposit and the proceeds thereof can be sent on mat,rity for li;,idating the ad'ance. d. (d'ance against 16R can also be granted to the depositor or third party for the p,rpose of in'estment in agric,lt,re* plantation acti'ity * real estate and for the p,rpose of relenting. e. None of the abo'e. 18 In case of o'erd,e deposit , .hich of the follo.ing is incorrect: a. ( ban9 may rene. o'erd,e deposit from the date of mat,rity pro'ided the o'erd,e period does not e2ceed 14 days from the date of mat,rity. b. 1he rate of interest applicable .ill be the rate pre'ailing on the date of mat,rity for a partic,lar period pro'ided deposit is rene.ed .ithin 14 days. c. If the o'erd,e period e2ceeds 14 days and depositor places entire amo,nt of o'erd,e deposit or portion thereof, the ban9 .ill pay interest for the o'erd,e period at &a'ing $an9 interest at simple or minim,m rate of interest operati'e on the date of rene.al .hiche'er is lo.er. d. None of the abo'e.

(N&WER&
1 2 3 4 5 D E E D E 6 7 8 9 10 B C B D D

FCNR ACCOUNTS
1. 1he !"NR #$% deposits can be accepted by:
a. b. c. d. e. (ll branches of the ban9. (ll #(% #$% category $ranches. (ll NRI $ranches. (ll #"% category branches Only branches .hich are specifically a,thorised to accept the !"NR deposits.

). 1he !"NR #$% deposits are accepted in the follo.ing c,rrencies by o,r ban9: a. 1he D& 6ollar E,ro b. 1he D& 6ollar , E,ro, <$-, Eapanese Fen , (,stralian dollar, "anadian dollar. c. (ll con'ertible c,rrencies d. None of the abo'e. /. 1he Nodal $ranch for !"NR #$% deposits is a. 1reas,ry $ranch b. >,mbai O'erseas $ranch c. >,mbai NRI $ranch d. Ne. 6elhi NRI $ranch. e. None of the abo'e.

4. Interest rates for !"NR #$% 6eposit for all c,rrencies is*are: a. &ame for all c,rrencies b. 6ifferent for different c,rrencies c. (t 5I$OR d. (t 5I$I6 e. None of the abo'e. 7. 1ype of deposit accepted ,nder !"NR #$% scheme is * are as follo.s: a. &*$ , "*6 16R. b. &*$ 16R c. Only 16R d. None of the abo'e @. Which of the follo.ing statements is correct0 a. >inim,m ma2im,m period of deposits are @ months and /@ months b. 1he interest on the deposits accepted ,nder the scheme shall be paid on the basis of /@7 days a year. c. 1here is no pro'ision of ta9ing for.ard co'er to hedge the !"NR #$% deposit. d. (ny inland mo'ement of f,nds for the p,rpose of opening these acco,nts as .ell as for repatriation o,tside India .ill be free of inland e2change*commission. A. !or the p,rpose of acco,nting !"NR #$% deposit in <5$, .hich rate .ill be applied for con'ersion of foreign c,rrency in to Indian R,pees0 a. !or.ard e2change rate b. 11 b,ying rate for partic,lar c,rrency c. Notional rate .hich is different for different c,rrencies. d. 11 selling rate for partic,lar. e. None of the abo'e. B. Which of the follo.ing statements is incorrect0 a. >ost of the pro'isions of NRE deposits are similar to !"NR #$% scheme.. b. (ll the Nostro a*cs of !"NR #$% 6eposits are maintained by >,mbai NRI branch. c. !"NR #$% a*c s cannot be transferred from one branch to another branch a,thoriGed branch at the re;,est of the depositor. d. (ll the abo'e C. 1he balances ,nder !"NR #$% deposits for the p,rpose of deployment of f,nds are : a. ,tiliGed by o,r foreign branches b. ,tiliGed by Indian branches for foreign c,rrency loans to their c,stomers c. s,rrendered to R$I d. a:b abo'e e. None of the abo'e. 18. What are the ad'antages of !"NR &chemes to c,stomer+0 a. Easy repatriation of f,nds from a*c on mat,rity. b. $alances held in the acco,nts are e2empted from Income ta2, .ealth ta2 and gift ta2.. c. Nomination in fa'o,r of residents and NRIs, acco,nt is free from e2change loss and facility of loan against deposit to the acco,nt holder and the third party is a'ailable. d. a:b:c abo'e. e. None of the abo'e.

ANSWERS

FCNR !""#$%&'( 1 2 3 4 5 E C C B C 6 7 8 9 10 D C C D D

FOREIGN EXCHANGE MANAGEMENT ACT )FEMA)

1.
/. 4. 7. @. A. 1he stat,te .hich reg,lates foreign e2change transactions in India is HHHHHHH and it has come into force .ef HHHHHHHH 1he three types of a,thoriGed persons are HHHH, HHHHHH and HHHHHHHH. 1he a,thorities .ho .ill ad3,dicate offences ,nder !E>( are HHHHH, HHHHHH and HHHHHHHH. 1he appeal ,nder this (ct is to be made .ithin HHHHHHdays of order of the (d3,dicating (,thority. Dn,sed foreign e2change ta9en for foreign tra'el etc. in the form of c,rrency to be s,rrendered to (6 .ithin HHHHHHdays of ret,rn. notes is

1he ma2im,m amo,nt that can be remitted by a resident ,nder 5iberaliGed Remittance &cheme for financial year is HHHHHHHHHHHHH Ia) D&678888*+ Ib) INR 78888*+ Ic) D&6 )88888*+ Id) INR 188888*+ Ie) none of the abo'e 1he ma2im,m amo,nt of Indian c,rrency .hich a resident can ta9e to any other than Nepal*$h,tan Rs.HHHHHH. co,ntry

B. C.

Remittance ,nder 5iberaliGed Remittance &cheme can be made ,pto amo,nts allo.ed for ac;,isition of immo'able property a. Fes b. No

18. In case of contra'ention of the pro'isions of the (ct a penalty can be imposed ,p to HHHHHHH times of the amo,nt of contra'ention. 11. ( transaction .hich alters the asset or liability position o,tside India of a person Resident in India is called HHHHHHHHtransaction.

1). ( transaction .hich does not alter the asset or liability position o,tside India of a person resident in India is calledHHHHHHHHHHHHtransaction. 1/. ( person resident in India ac;,ires a flat in 5ondon is a HHHHHHHtransaction. 14. ( person sends D6& 1888* + as a gift to his da,ghter is a HHHHtransaction. 17. Release of foreign e2change for tra'el, medical e2penses or st,dy is classified as a HHHHHHHHHHacco,nt transaction. 1@. 1he fi'e capital acco,nt transactions .hich are placed ,nder prohibited category are HHHHH, HHHHHHH, HHHHHHH, HHHHHHHHH, and HHHHHHH. 1A. 1he ma2im,m amo,nt .hich an (,thoriGed 6ealer is permitted to release .itho,t R$Is appro'al for the p,rpose of st,dy abroad is D&6 or its e;,i'alent. Ia) 78,888 Ib) 1,88,888 Ic) /8,888 Id) no ceiling. 1B. !or medical treatment abroad the ma2im,m amo,nt that can be released by an (6 .itho,t R$I permission is D&6HH or its e;,i'alent. Ia) 78,888 Ib) 1,88,888 Ic) )7,888 Id) None of these 1C. 1he ma2im,m amo,nt of !E that can be released by an (6 .itho,t R$I for personal 'isit abroad is D&6 or its e;,i'alent Ia) 7888 Ib) 18,888 Ic) )7,888 Id) )888 appro'al

1C. !or a b,siness trip abroad the ma2im,m amo,nt of foreign e2change that can be released by an (6 .itho,t R$I appro'al is D&6HHHH or its e;,i'alent. a. )7888 b. 18,888 c. 78,888 d. 6epends on b,siness t,rno'er. )8. !or going abroad either for employment or on emigration the ma2im,m amo,nt of foreign e2change that can be released by an (6 .itho,t R$I appro'al is D&6 HHH or its e;,i'alent. Ia) 1,78,888 Ib) 1,88,888 Ic) 78,888 Id) 18,888 )1. Iss,e of <,arantee for import of &er'ices by (,thoriGed 6ealer is permissible pro'ided amo,nt of g,arantee does not e2ceed:+ a. D&6 18 >n b. D&6 1 >n c. D&6 788888 d. INR 188888

e. None of the abo'e

ANSWERS
1 2 3 4 5 6 7 8 9 10 F*+! 1999 1,6,2000 A$&/#-0'*1 D*!2*-3 M#%*4 C/!%5*-' 6 #77 '/#-* 8!%90%5 $%0&' A1;$10"!&0%5 !$&/#-0&43 ':*"0!2 10-*"&#- )!::*!2'3 !::*22!&* !$&/#-0&4< 45 1!4' 180 1!4' C R',7500.>*' T/-** C!:0&!2 A.",

FEMA 11 12 13 14 15 16 17 18 19 20 21 C$--*%& A.", C!:0&!2 A""#$%& C$--*%& A""#$%& C$--*%& A""#$%& C/0& F$%1 . N01/0 C#,. A5-02, 6 =2!%&!&0#%. R*!2 E'&!&*. F!-+ H#$'* B B B A B C

MISCELLANEOUS
1. Which of the follo.ing is not foreign e2change0 Ia) R,pee balances in NRE a*c Ib) ( demand draft for Rs.) lacs dra.n by $an9 of India, Ne. For9 branch Ic) 1he balance in the acco,nt of Ne. For9 branch in India Id) None of these. ). 1he $an9 of "eylon maintains a r,pee acco,nt in yo,r ban9. 1his acco,nt is called Ia) Nostro acco,nt Ib) Jostro acco,nt Ic) 5oro acco,nt Id) Non resident acco,nt. /. >irror acco,nt is a shado. of HHHHHHHHacco,nt. Ia) Nostro acco,nt Ib) Jostro acco,nt Ic) 5oro acco,nt Id) None of these.

4. (cco,nt maintained by an Indian $an9 in foreign c,rrency .ith a foreign ban9 is called a HHHHHHacco,nt. Ia) Nostro Ib) 'ostro Ic) loro Id) >irror

7. ( che;,e sent for collection has been realiGed and ad'ice to this effect has been recei'ed. (t .hat rate the proceeds .ill be credited to the c,stomers acco,nt. Ia) "lean che;,e b,ying rate Ib) 11 b,ying rate Ic) 1" b,ying rate Id) None of the4se. @. Fo,r c,stomer presents a bill for D&6 788888 for p,rchase dra.n ,nder 5". 1he 5" pro'ides for 11 reimb,rsement. 1he rate to be applied for p,rchase of the bill is HHHH a. 11 b,ying rate b. $ills b,ying rate c. $ills selling rate d. None of these. A. Fo,r c,stomer .ants to sell yo, immediately <$- 188888 being proceeds of the e2port bill realiGed thro,gh yo,r ban9. Fo, .ill apply HHH rate. a. 11 b,ying rate b. 11 selling rate c. $ills b,ying rate d. $ills selling rate. B. (n NRI sends Rs188888 from D(E .ith a re;,est to open a NRE 6E-O&I1 (""ODN1 .ith yo,. 1he rate to be applied .ill be. Ia) 11 b,ying Ib) 11 selling Ic) $ill $,ying Id) No rate is in'ol'ed. C. NRE sa'ings ban9 acco,nt balance can be con'erted into !"NR a*c by applying Ia) 11 b,ying rate Ib) 11 selling rate Ic) Notional rate Id) None of these. 18. Which of the follo.ing rates .ill be applicable for the transactions mentioned herein belo.: B$40%5 -!&*' S*220%5 -!&* 11 $I55& 11 $I55& (. E2port bills to be p,rchased. $. -ayment of 66 iss,ed by yo,r Ne. For9 branch .here yo, maintain NO&1RO a*c. ". Remittance of foreign In.ard $ill for collection I6oc,mentary) 6. Realisation of foreign o,t.ard $ills for collection . E. Remittance to D& representing gift amo,nt permissible ,nder !E>(. 11. No foreign e2change can be released for pri'ate tra'el to a) $angladesh b) -a9istan, c) Nepal d) $h,tan e) c d 1). In case of tra'el, foreign e2change can be released ma2im,m HHHHdays before the date of tra'el. a) C8 b) @8 c) /8

d)

17

1/. (n Indian st,dent st,dying abroad for a degree co,rse of t.o years .ill be ha'ing the follo.ing stat,s: a. Nonresident Indian b. Resident Indian c. Resident b,t not ordinary resident. 14. 1he R!" Idomestic) can be maintained in the form of HHHHacco,nt. a. &$ b. "6 c. 1erm deposit d. a : b 17. 1he follo.ing amo,nt cannot be credited to R!" Idomestic) deposit. a. e2port proceeds b. gifts from close relati'es c. amo,nt recei'ed from a non resident by a 66, d. None of these. 1@. 1he ma2im,m amo,nt .hich can be 9ept ,nder R!" Idomestic) acco,nt is D&6 Ia) )888 Ib) )8,888 Ic) ),88,888 Id) No limit 1A. In 1O> contracts the deli'ery of foreign e2change sho,ld ta9e place Ia) Within t.o days Ib) Ne2t day Ic) Within / days Id) Ne2t .or9ing day. 1B. 6ate on .hich the e2change of c,rrencies is agreed to ta9e place is called Ia) 6eli'ery date Ib) date Ic) 'al,e date Id) E2change date. 1C. $,ying spot and selling for.ard sim,ltaneo,sly is called HHHHHdeal. Ia) s.ap Ib) arbitrage Ic) spec,lati'e Id) co'er )8. (n (6 enters into an agreement to ta9e deli'ery of foreign e2change at a specified rate on a specified time. 1his agreement is called a) for.ard sale contract b) for.ard p,rchase contract c) f,t,re contract and d) s.ap contract )1. !or import bills recei'ed on collection basis the (6 may be re;,ired to boo9HHHH contract. a) for.ard p,rchase contract b) for.ard sale contract c) f,t,re contract and d) No contract can be boo9ed for a collection bill.

)).

1he net 'al,e of goods e2ported and goods imported by a co,ntry is 9no.n as a) $alance of payment b) 1rade s,rpl,s c) $alance of trade d) -ayment s,rpl,s*deficit. 1he foreign e2change reser'e of o,r co,ntry is e2pressed in HHHH a) b) c) d) R,pees D&6 E,ro &6R

)/.

)4. -- form is re;,ired to be s,bmitted first to a) -ost Office b) (,thoriGed 6ealer c) ",stoms d) R$I )7. a) b) c) d) &I6$I EKI> $an9 E"<" R$I Refinance against e2port credit for short term e2port is pro'ided by:

)@. 1he present foreign trade policy is 'alid ,pto Ia) )88A Ib) )814 Ic) )818 Id) )81) )A. Each sched,led $an9 sho,ld pro'ide e2port credit minim,m to the e2tent of HHHL of its net ban9 credit. a) 17 b) 18 c) )7L d) 1)L )B. E2port credit is classified as a priority sector credit for a) all p,blic sector ban9s b) all ban9s c) only foreign ban9s d) Only sched,led state cooperati'e ban9s. )C. R,nning acco,nt facility cannot be granted to a) e2porters of soft.are b) non stat,s holders c) s,b s,ppliers d) 6eemed e2porters. /8. -ost shipment finance for deemed e2port can be sanctioned ,pto the act,al date of receipt of payment s,b3ect to the ma2im,m of HHH days. a) 1B8 b) C8 c) @8

d) /8 /1. <R form is to be s,bmitted by the e2porter first to HHHH in HHHHHn,mber of copies. a) (6 / b) ",stoms / c) (6 ) and d) ",stoms ) /). 1he follo.ing is a declaration form for e2ports. Ia) "NK Ib) "6! Ic) &6! Id) EKIN //. &O!1EK form is to be s,bmitted in HHHH n,mber of copies. a) 4 b) ) c) / d) 7 /4. E2port declaration form being ,sed for declaring 'al,e of ser'ice e2port is a) <R b) -c) &6! and d) no specific form are prescribed. /7. a) b) c) d) R$I !E6(I E-" 6<!1 Import E2port "ode N,mber is allotted by

ANSWERS 1 4 7 10 D A A !, BB 8, TTB ", BS 1, TTB *,TTS A D A C D C D D 2 5 8 11 B B D E 3 6 9 12 A B B B

13 16 19 22 25 28 31 34

14 17 20 23 26 29 32 35

B D B B B C C D

15 18 21 24 27 30 33

D C B B D D C