Multi-option Question Bank

Set - 1
01 Which of the following better explains the meaning of risk : a loss arising on happening of some event b loss arising on non-happening of some event c probability of loss that could arise due to uncertainty d probability of risk that could arise due to uncertainty e risk due to loss as a result of uncertainty 02 Risk that could arise due to legal actions or uncertainty of interpretations of contracts and agreements is called: a counter-party risk b contract risk c country risk d uncertainty risk e legal risk 0 Risk on account of uncertainty about availability of cash when re!uired or cash in excess of re!uirement: a counterparty risk b legal risk c credit risk d li!uidity risk e settlement risk 0" Risk that is associated with inability#failure of banks in payment of amount representing clearing che!ues presented by different banks: a li!uidity risk b settlement risk c credit risk d legal risk e clearing process risk 0$ Risk that is associated with failure of internal processes of a bank or business organi%ation: a settlement risk b procedural risk c operational risk d credit risk e none of the above 0& ' part of credit exposure of a bank that will not be recovered in the event of default on a specified obligation is called: a credit risk b loss given default c credit loss risk d counterparty default e credit exposure risk 0( )ebt financing that can magnify the risk and reward for an investment is called:

a leverage b reward risk c derivative d investment risk e loss given default 0* +he risk that a bank faces on account of trading in govt, securities or other investments is called: a trading risk b investment risk c li!uidity risk d market risk e credit risk 0- .xposure to uncertainty in economic value of an investment that could not be marked to market is called: a trading risk b business risk c market risk d li!uidity risk e investment risk 10 +he risk that may arise due to failure of a counterparty to perform an obligation: a counterparty risk b credit risk c market risk d performance risk e market risk /'001 1'2.) 34.2+0562 73ue 6o,11 to $2 are part of our 8orrespondence 8ourse for /'0019 R.:4;'+056 5< 1'6=06: 14206.22 11 R10 can issue direction to banks under which of the following provisions: a 2ection 21 of 1 R 'ct b 2ection $' of 1 R 'ct c 2ection 22 of R10 'ct d a and b e a to c all 12 4nder 2ection 21> directions relating to which aspect of banking> can be issued by R10 to banks: a directions relating to deposits b directions relating to export credit c directions relating to priority sector d directions relating to advances e directions on general aspects of banking 1 +he term ?unclaimed deposit@ stands for which of the following: a deposits where the depositor has expired and not claimed b deposit where the legal heirs have claimed the deposit after death of the depositor c deposit which have not been operated for a long time d deposits not operated for 10 years e all the above 1" Which of the following actions are re!uired to be taken by the bank in connection with unclaimed deposits:

a annual return is re!uired to be submitted to R10 b annual return is to be prepared as on )ec 1 for submission to R10 c annual return is to be submitted within 0 days of end of each calendar year d a to c all e a and c 1$ )irections on loans and advances are issued by R10 u#s 21 of 1 R 'ct> for which of the following aspects: a purpose of the advance b margin to be maintained c maximum amount of advance d rate of interest e all the above 1& What kind of restriction is imposed by R10 u#s 20 of 1 R 'ct on the banks: a banks should fix margins on advances as per R10 directives b rate of interest can be fixed by banks as per their discretion c maximum and minimum period of deposits should be as per R10 directives d banks cannot grant advances on the security of their own shares e all the above 1( +he 4surious ;oans 'ct prohibits : a loans without obtaining security b loans by obtaining extra-ordinary security c loans at exorbitant rates of interest d loans with high margin percent e none of the above 1* Arotection to a bank from scrutiny by courts is available u#s 21' of 1 R 'ct relating to interest rate being excessive: a if interest is as per R10 directives b if interest is not exorbitant c if interest is at bank rate d if interest rate is linked to bank rate e none of the above 1- +o build 2tatutory Reserver> banks have to transfer BBBBC out of BBBB to a reserve fund> u#s 1(719 of 1 R 'ct a 20C> profits> b 20C> profits before tax c 2$C> profits before dividend d 20C> profits before dividend e none of the above 20 When does the re!uirement of transfer to reserve fund u#s 1( 719 as above is not there: a when it is waived by R10 b when bank makes such re!uest and R10 agrees c when 8entral :ovt, on R10 recommendation allows such exemption d when 8entral :ovt, of its allows such exemption, e none of the above 21 When 8entral :ovt, can exempt a bank from transferring its profits to reserve fund on R10 recommendations: a when reserve fund is ade!uate to meet capital ade!uacy

b when capital ade!uacy ratio is above the minimum re!uired c when reserve fund and share premium balance is not less than paid up capital d when reserve fund is e!ual to paid up capital e none of the above 22 'ppropriation> if any> from the Reserve <und and 2hare Aremium account is re!uired to be reported to BBB within BBBB days: a R58> 0 days b 8ompany ;aw 1oard> 21 days c 8entral :ovt> 0 days d 2.10> 21 days e R10> 21 days 2 6on-scheduled banks have to maintain cash reserve u#s BBB of 1anking Regulation 'ct at BBB C of demand and time liabilities: a 1*> $C b "2> C c 1*> C d 2"> 2$C e none of the above 2" +o be a scheduled bank> a bank has to be one of the following: a state cooperative bank> b company defined u#s of 8ompanies 'ct c an institution notified by 8entral :ovt, d a company incorporated outside 0ndia under <oreign ;aw e any of the above 2$ +o be a scheduled bank> what is the minimum paid-up capital and reserves re!uirement of a bank: a Rs,1 lac b Rs,2 lac c Rs,$ lac d Rs,10 lac e Rs,20 lac 2& What is true with regard to return to be submitted to R10 for cash reserve ratio: a return gives details of demand and time liabilities b return is as at the close of business on each alternate <riday c return is to be submitted not later than ( days after date to which it relates d R10 can permit submission of the return on a monthly basis to be submitted within 20 days in case of difficulty with geographical position of the bank and branches e all the above 2( 0f the relevant <riday on which the return is to be submitted is a holiday as per 60 'ct> the return relating to 8RR is to be submitted: a as on close of next day b as on close of the preceding business day c as at close of the preceding working day d on the previous working day e not re!uired to be submitted 2* What penalty can be imposed by R10 on non-compliance with re!uirement of cash reserve ratio: a C b C above bank rate during the 1st fortnight c $C above bank rate during the 2nd fortnight d b and c e none of the above

2- 0f default in 8RR still continues beyond first two fortnights> what is the penalty: a director> manager or secretary can be imprisoned b director> manager or secretary can be fined c director can be removed d all the above e none of the above 0 What return is re!uired to be furnished to R10 for 2;R purpose: a ' monthly return to be submitted within 1$ days b ' monthly return to be submitted within ( days from close of the month c ' monthly return to be submitted within 20 days from end of the month to which it relates d ' monthly return to be furnished by close of the next month e none of the above 1 2;R is to be maintained as at: a close of each month b close of each fortnight c close of each week d close of each business day e none of the above 2 What penalty can be imposed by R10 on non-compliance with re!uirement of 2;R ratio: a C b C above bank rate during the 1st fortnight c $C above bank rate during the 2nd fortnight d b and c e none of the above What is the re!uirement u#s 2$ of 1 R 'ct> to be fulfilled by banks in 0ndia: a 1anks are to maintain ($C of the demand and time liabilities as assets in 0ndia, b +hese assets would be there as on last <riday of each !uarter c 0f such <riday is holiday> the preceding working day would be deemed to the relevant day d 3uarter for the above purpose is of months e all the above " 8ash reserve of C of demand and time liabilities u#s 1* of 1 R 'ct is re!uired to be maintained by: a cooperative banks b scheduled commercial banks c financial institutions d non-scheduled banks e all the above $ Which of the following is not a correct statement: a 5nly scheduled banks are to maintain cash reserve u#s "2 of R10 'ct b 6on-scheduled banks are to maintain cash reserve u#s 1* of 1 R 'ct c 'dditional cash reserve can be prescribed to be kept by 8entral :ovt, d 0nterest is re!uired to paid by R10 on cash balances maintained with it u#s 2" of 1 R 'ct e 1anking companies are re!uired to maintain reserve fund u#s 1( of 1 R 'ct R.+4R62> 062A.8+056 '6) W06)06: 4A

& 's per 2ection 2- of 1 R 'ct> the balance sheet and profit and loss account is re!uired to be prepared by a banking company as on: a end of each calendar year b expiry of 12 month period ending with any other date which 8entral :ovt, may notify c as on last working day of the year or the period d a to c e a and b ( 1alance sheet and profit and loss account are prepared by a bank as per: a rd 2chedule of R10 'ct b 2nd 2chedule of R10 'ct c 2chedule D0 of 8ompanies 'ct d rd 2chedule of 1 R 'ct e none of the above * 1anks are re!uired to publish their balance sheets in BBBBBB : a in a news paper in circulation at place of principal office of the banking company b in two news paper in circulation at place of principal office of the banking company c in a news paper and maga%ine in circulation at place of principal office of the banking company d on website of the bank concerned e none of the above - 1anks are to furnish to R10 BBB copies of balance sheet within BBB months from end of the period to which they relate: a 2> months b 2> & months c > months d > & months e none of the above "0 .ach bank has to get its balance sheet audited from !ualified auditors appointed by: a 8entral :ovt, b R10 c 0nstitute of 8hartered 'ccountants of 0ndia d 1ank 1oard e b and c "1 'pproval of which of the following authority is re!uired for appointment> reappointment or removal of auditors by a banks: a 8entral :ovt, b R10 c 0nstitute of 8hartered 'ccountants of 0ndia d 2.10 e b and c "2 Which of the following is not true in connection with special audit of banks: a special audit can be ordered by R10 and 2.10 b special audit can be ordered in public interest c special audit can be ordered to safeguard interest of depositors d special audit can relate to any transaction or a class of transactions e special audit can be by the same auditor or another auditor " Which of the following is not true with regard to preservation of records by banks: a rules for preservation are framed under section "$E 1R 'ct b rules are framed by Reserve 1ank c rules specify the period of preservation books> accounts and other documents d rules specify the period of preservation of different instruments

e R10 can order longer period for preservation of any record than the prescribed u#s "$E "" ' customer demands return of certain che!ues issued by him and paid by the bank, What option is not correct: a paid che!ues cannot be returned at all, b paid che!ues can be returned by keeping copy of the instrument c customer has to follow the preservation rules of 2ection "$E of 1R 'ct d authority to return the paid instruments is available to banks u#s "$F of 1 R 'ct e none of the above, "$ 2ection $ of 1 R 'ct concerns with which of the following aspects: a return of paid instruments b issue of directions in public interest c audit of accounts of banks d inspection of banks by R10 e issued of directions on loans and advances "& Which of the following is correct with regard to inspection of banks by R10: a inspection can be carried by R10 u#s $ of 1 R 'ct b inspection can be ordered by 8entral :ovt, also c a copy of inspection report is re!uired to be given to bank d inspection team can re!uire the bank to furnish any statement or information e all the above "( 0n order to verify some fact> the inspecting official wants to examine a senior officer of a bank on oath, Whose permission is re!uired: a R10 b 8entral :ovt, c 1oard for <inancial 2upervision of R10 d he himself is authori%ed e a and c "* 5n the basis of inspection report of a bank> if 8entral govt, decides to take stern action such as prohibition of acceptance of fresh deposits> what it is re!uired to do: a give opportunity to the bank b decision of prohibition can be deferred c can impose additional terms and conditions d can publish the report e all the above "- Who among the following are not the members of 1oard for <inancial 2upervision: a :overnor R10 b )y, governors c " directors from 8entral 1oard of R10 d 2 directors from ;ocal 1oards of R10 e none of the above $0 What is the !uorum for meeting of 1oard for <inancial 2upervision: a of members one of which should be chairman or vice-chairman b of " members including 8hairman c of members d of 2 members if they are chairman and vice chairman e none of the above $1 8entral :ovt, can prohibit a bank from acceptance of fresh deposit> due to which of the

following: a if R10 carries inspection and finds that deposits are not insured by )08:8 b if R10 carries scrutiny of the bank and finds that there are complaints from depositors c if bank is incurring losses d if bank not complying with re!uirement of R10 'ct e if business is being conducted to the detriment of interest of depositors $2 Which of the following is not a correct statements: a annual accounts of foreign banks relate to their business in 0ndia, b R10 can order special audit of a bank> without 8entral govt, permission c banks are to furnish three copies of balance sheet to R10 d 0t is mandatory to give copy of scrutiny report to the bank by R10 e 1oard for <inancial 2upervision is set up u#s $* of R10 'ct For solution to this quiz, kindly refer to December 2005 issue of Banking Events !date"

Set - 2
01 Which among the following is correct with regard to R10 scheme for one-time settlement for small and medium enterprises R10@s 5+2 for 2G.s9 : a the scheme is available both for standard loan accounts and substandard accounts b the scheme is available for sub-standard> doubtful accounts and loss accounts c the scheme is available for doubtful accounts and loss accounts d the scheme is available for loss accounts only e the scheme is available for doubtful accounts only, 02 1anks can not entertain which of the following kinds of loan accounts under the R10@s 5+2 for 2G.s: a cases where action has already been initiated under 2'R<'.20 'ct 2002 b cases that are pending with )R+ c cases that are pending with 10<R d cases that are pending with a court e none of the above 0 +he last date for receipt of applications under R10@s 5+2 for 2G.s is : a 2ept 0> 200$ b )ec 1> 200$ c <eb 2*> 200& d Gar 1> 200& e /un 0> 200& 0" What is the amount that could be accepted by banks under R10@s 5+2 for 2G.s for doubtful or loss accounts as on Garch 1> 200": a 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's b 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus the interest at simple rate, c 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest at bank rate d 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest at 1A;R of the bank e 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest H other charges due 0$ What is the amount that could be accepted by banks under R10@s 5+2 for 2G.s for sub-standard accounts as on Garch 1> 200"> which became doubtful subse!uently:

a 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's b 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus the interest at simple rate, c 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest at bank rate d 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest at existing 1A;R from 'pril 1> 200" till the date of final payment, e 100C of o#s balance in the a#cs on the date of categorisation as doubtful 6A's plus interest H other charges due 0& Which of the following options are available to the borrowers for repayment under R10@s 5+2 for 2G.s: a full amount has to be paid up front b 2$C can be paid up front and balance in instalments c 2$C can be paid up front and balance ($C in instalments within three years with interest d 2$C can be paid up front and balance ($C in instalments within one year without any interest payment e 2$C can be paid up front and balance ($C in instalments within one year with interest at existing A;R till date of payment, 0( 4nder )ebt-Restructuring mechanism for 2G.> which of the following kinds of loans are not eligible: a all non-corporate 2G. irrespective of amount of bank dues b all corporate 2G.s dealing with one bank irrespective of amount of bank dues, c all corporate 2G.s having consortium arrangement with total fund limits of Rs,10 crore, d a and c e b and c 0* Which of the following types of loan accounts are eligible under )ebt-Restructuring mechanism for 2G.: a should not be a loss account b 4nits that could become viable in ( years c 4nits that could ensure repayment not exceeding 10 years d 10<R cases e all the above 0- What is the permissible time norm for working out the restructuring under )ebtRestructuring mechanism for 2G.: a one month from date of account becoming sub-standard b one month from date of receipt of information from the borrower c 0 days from date of receipt of re!uest d &0 days from date of receipt of re!uest e -0 days from date of acknowledgement of re!uest, 10 4nder consortium advances> which bank could work out the restructuring: a the bank having maximum share b the bank having maximum share alongwith the 2nd largest bank c all the banks together d banks having $1C share e none of the above 11 What is the time period when a complaint can be entertained by the 5mbudsman: a when referred by the customer directly to the 5mbudsman, b when referred by the customer after bank did not send any satisfactory reply within one month, c when bank did not send any reply within 2 months of a reference of complaint to the

bank, d when bank makes a reference to 5mbudsman e a to c all, 12 What is the maximum amount of compensation that 5mbudsman can allow> for a case referred to it: a Rs,2 lac b Rs," lac c Rs,& lac d Rs,* lac e Rs,10 lac 1 What remedy is available to the bank when 5mbudsman passes an award directing the bank to make the payment: a 1ank can go in for appeal in a court of law b 1ank can go in for appeal to R10 c 1ank can make a re!uest for review to Review 'uthority d 1ank can file a suit against the decision with )R+ e none of the above 1" What remedy is available to the customer when 5mbudsman passes an order with which customer is not satisfied: a can make a review application to 5mbudsman b can make a review application to Review 'uthority c can go in for appeal in )R+ d can proceed for any remedy deemed appropriate by him e can file a suit in a 8onsumer 8ourt only, 1$ What is the time period during which the bank is to implement the order of 5mbudsman: a within 1$ days of date of receipt of order b within 0 days of date of receipt of order c within one month from date of receipt by the bank> of customer@s acceptance of the award with in 1$ days of receipt of order by him d within one month from date of receipt by the bank of the acceptance of award> any time, e none of the above 1& What is the amount of dispute that could be referred to 5mbudsman for arbitration: a between bank to bank Rs, $ lac b between bank to bank Rs, 10 lac c between bank to customer Rs, 10 lac d a and c e b and c 1( What is the time period during which 5mbudsman is expected to render his award in case of arbitration, a months from date of receipt b 1 months from date of receipt c & months from date of first hearing d within & months from date of receipt of the case e c and d> whichever earlier, 1* What is the time period during which the bank can file a review application with Review authority: a within 2 months from date of award b within 1 month from date of receipt of copy of award c within 1 month from date of award

d within months from date of order e within & months from date of receipt of award, 1- Which of the following type of complaint regarding loans cannot be lodged by the customer with the 5mbudsman: a non-observance of R10 directives b delay in sanction or disbursement c non-acceptance of loan application without valid reasons d non-observance of time schedule for disposal of loan applications e none of the above 20 5mbudsman scheme has been formulated by R10 under provisions of: a R10 'ct 2ection 21 b R10 'ct 2ection $ c 1anking Regulation 'ct 2ec &-' d 1anking Regulation 'ct 2ection $-' e 5mbudsman 'ct 2ection $ 21 Which among the following are not eligible for deposit insurance from )08:8: a foreign banks b regional rural banks c district central banks d primary cooperative societies e none of the above 22 Which of the following kinds of deposits are not insured under )08:8 scheme: a inter bank deposits b deposits from government> c deposits of 2tate ;and )ev 1anks with 2tate 8oop 1anks d deposit received outside 0ndia e all the above 2 What is the amount of insurance up to which a deposit is insured: a Rs,1 lac per depositor per branch of a bank b Rs,1 lac per depositor per bank c Rs,1 lac per depositor from the banking system d Rs,1 lac per depositor held singly or Iointly e all the above 2" 5n which amount#balance of deposit> the deposit insurance cover is available from )08:8 a date of cancellation of licence of the bank b date of li!uidation of the bank c date of amalgamation comes into force d date of merger comes into force e any of the above 2$ 0f two banks are closed on the same day> what is the position of availability of insurance cover to the depositor> having deposit with both the banks: a cover is applicable to the maximum extent of Rs,1 lac b cover available separately to the extent of Rs,1 lac for each bank c cover not available as that amounts to violation of basic cover of Rs,1 lac d cover available but maximum amount would be Rs,1 lac to be claimed pro-rata from both the banks e none of the above

2& What is the time period during which )08:8 is expected to meet its claim liability: a two months from date of receipt of claim list from the li!uidator b two months from date of receipt of claim list from the transferee bank c two months from date of receipt of claim list from the insured bank#transferee bank d a to c all e a and b only 2( What is true with regard to periodicity and the amount of premium payable on deposit insurance: a 10 p per Rs,100 per annum b payable yearly c payable half-yearly d a and b e a and c 2* 5n what basis> the premium payable in advance to )08:8 is to be calculated by the banks: a last working day of Garch b last working day of Gar and 2ept c last reporting <riday of Garch d ;ast <riday of the year e none of the above 2- What is the time schedule during which the premium is to be finally paid: a within 1 month from beginning of the year b within 2 months from beginning of the year c within 2 months from beginning of the respective half year d within 2 months from last day of the previous year e none of the above 0 What are the circumstance under which a bank is dis!ualified to be covered under deposit insurance scheme of )08:8: a where the bank fails to make the payment of premium b where the bank has been prohibited from accepting the deposits by R10 c where R10 has cancelled the licence d where the bank ceases to be a banking company e all the above 1 5n dishonour of a che!ue> what kind of remedy is available to the holder of the che!ue under 60 'ct: a holder can file complaint with 5mbudsman b holder can file the case in a normal court c holder can file a complaint with metropolitan magistrate or 1st class Iudicial magistrate d holder can file a complaint with R10 e all the above 2 +he remedy under 2ection 1 * of 60 'ct> to file complaint is not available to the holder under which of the following circumstances: a where the che!ue has been issued without consideration b where the che!ue has been issued to discharge the liability c where the che!ue has been issued to discharge the liability but its payment has been stopped, d where the che!ue has been issued to discharge the liability and holder has been asked not to present the che!ue e where the che!ue has been dishonoured for insufficiency of funds,

What is the time period during which the che!ue is to be presented u#s 1 * of 60 'ct: a before the bank fails b before the drawer stops the payment of the che!ue c during the validity period d maximum within & months of date of issue, e c and d " Which of the following is an essential condition for filing complaint> by the holder: a to issue notice to the drawer within 0 days of date of receipt of the information about dishonour, b to issue notice to the drawer within 1$ days> of date of receipt of information about dishonour c drawer should be given 1$ days period> from date of receipt of the notice by him> to make the payment, d a and c e b and c $ What is the time period> to make complaint by the holder: a within 0 days from date of receipt of information about dishonour by the holder b within 0 days from date of issuing notice to the drawer to make the payment c within one month from date of cause of action d within two months from date of non-receipt of reply from the drawer> in response to the notice from holder e any of the above> whichever is later, & J has received a che!ue from E as gift on his birthday, When che!ue is presented> it is dishonoured, What is the time period during which the complaint can be filed by J in this case: a within 0 days from date of receipt of information about dishonour by the holder b within 1$ days from date of issuing notice to the drawer to make the payment c within two months from date of cause of action d within three months from date of non-receipt of reply from the drawer> in response to the notice from holder e no complaint can be filed ( What punishment is prescribed under 60 'ct> for dishonour of che!ue: a fine e!ual to the amount of che!ue, b fine double the amount of che!ue c imprisonment up to 2 years d a and c e b and c * 0f an offence is compounded by the court> what is the punishment under 60 'ct for dishonour of che!ue: a fine double the amount of the che!ue b fine up to Rs,$000 c imprisonment up to 1 year d imprisonment up to 2 year e b and c - What is the mode of service of summons by the court on the drawer of the che!ue: a normal postal services b speed post c authori%ed courier d a and b e a to c "0 What is true with regard the liability of a director of a company> in case of dishonour of

che!ue> issued by a company: a all the directors are liable b nominated directors also liable c directors responsible for conduct of the business of the company including managing director d only those directors who are responsible for accounts maintenance of the company e all the above "1 =E8 guidelines have been issued by R10> under which of the following: a 2ection 21 of 1anking Regulation 'ct b 2ection 1 ' of R10 'ct c 2ection $ ' of R10 'ct d 2ection 1 of 60 'ct e 6one of the above "2 Which among the following is the obIective of issuing =E8 guidelines by R10: a check fraudulent activities of the borrowers b check money laundering activities c avoid undesirable customer to enter the banking system d a and b e b and c " Which of the following is the basic document> on the basis of which =E8 guidelines have been issued: a <inancial 'ction +ask <orce b 'nti-money laundering standards c 465 Resolution on 0ra! war d a and b e b and c "" What is the cut off amount of transactions for which the banks are re!uired to keep record and report to the designated authority: a all debit and credit transactions b all debit and credit transactions in cash only c all cash withdrawals and deposits of Rs,10 lac and above d all withdrawals and deposits of Rs,10 lac and above e all withdrawals of above Rs,1 lac in cash, "$ What is the amount of bank draft that can be issued by banks in cash under =E8 directives of R10: a Rs,$0000 or less b Rs,$0000 or more c ;ess than Rs,$0000 d Gore than Rs,$0000 e Gore than Rs,1 lac "& What is the time period during which the record of transactions is to be kept by banks under =E8 directives: a years b " years c $ years d & years e time frame prescribed by 8entral :ovt, "( What is the periodicity of reporting of transactions to designated authority under =E8: a fortnightly b monthly c !uarterly d half yearly e yearly,

"* Which of the following is not the key element of =E8 policy to be framed by individual banks> as per R10 directives: a customer acceptance policy b customer identification procedure c monitoring of transactions d risk management e none of the above For solution to this quiz, kindly refer to #ovember 2005 issue of Banking Events !date"

Set - 3
1, Gr, J a customer of another bank approaches your branch to deposit in safe custody> his term deposit receipt> issued by the said bank: a it can be accepted> provided the other bank has no obIection to this b it can be accepted> if the customer provides indemnity bond c it can be accepted> as a normal customer d it cannot be accepted> since it is a term deposit issued by another bank> which has primary lien on the deposit, e it cannot be accepted, 1ank should refuse, 2, Eour branch receives from a customer> a Rs,$00 bank note> that you find is a fake note, Which among the following action is re!uired to be taken: a the note will be cut into pieces and pieces handed over to the tenderer b the police would be called and tenderer would be handed over to police, c the note would be marked ?fake@ and handed over to the tenderer d the note would be impounded and kept in safe custody e the note would be impounded> a statement would be obtained from the tenderer H both would be sent to police , J draws a bill of exchange on E in consideration of sale of goods, Ke does not mention the date of payment of the bill, What would be date of payment of the billL a it will be treated as usance bill and due date would be worked out after acceptance of the bill b it will be treated as a demand bill and payment would be claimed as per mutual consent of both the party c it will be treated as a demand bill and paid accordingly d it will be treated as an ambiguous instrument and as such invalid e it not a valid document, Kence J has to withdraw the instrument ", 1ank makes use of selling rate in case of a foreign exchange transaction> in which of the following situations: a encashment of foreign travellers@ che!ues b collection of a foreign currency bank draft c negotiation of bill tendered by the exporter d receipt of loan proceeds of a foreign currency loan from abroad e issue of a foreign currency demand draft $, ' foreign bank maintains a rupee account with a bank in 0ndia in )elhi, +his account will be called BBBB account by the foreign bank and BBBB by the bank in 0ndia: a loro and vostro b nostro and vostro c loro and nostro

d vostro H nostro e vostro and mirror account &, Which among the following is true with regard to pension accounts in banks: a life certificate should be from a )octor b life certificate should be obtained in the month of Gay and 6ov every year c When payment is obtained by the pensioner himself> there is no need for life certificate d life certificate should be obtained once in a year during Gay e life certificate should be obtained once in a year during 6ovember (, ' borrower defaults in repayment of loan, 4nder which of the following> he can be covered: a it is part of the credit risk b the appraisal of the loan is definitely defective c bank can recover the dues through filing of suit only d it is part of the operational risk e it is part of the li!uidity risk *, 2ubstandard loan account of a firm was rescheduled by the bank on 2ept 20> 200" with a moratorium of & months, +he firm commenced the repayment as per reschedulement and continued to repay the loan regularly, +he account would be treated 2tandarad asset wef: a 2ep 20> 200$ b- Gar 20> 200$ c 2ep 20> 200& d- Gar 20> 200& e 2ep 20> 200" -, ' farmer has been allowed an advance for irrigation e!uipment, Ke normally produces wheat and paddy, Ke has failed to repay the due instalment of his loan> which had fallen due during /uly 200$, +he loan will become 6A' after : a one harvest season b one crop season c two harvest seasons d two crop seasons e maximum within one year 10 0n which of the following methods> a bank can calculate capital ade!uacy ratio: a capital # risk weighted assets b capital M reserves # risk weighted asset c capital fund # credit assets d capital fund # risk weighted assets e risk weighted assets # capital fund 11, Which among the following is purpose of investment fluctuation reserve: a to cover the interest payment on investment in capital market b to cover the loss arising from valuation and from interest rate movements in investment in govt, securities c to cover the risk of fluctuation in value of capital market securities d to cover the risk on account of govt, loans e c and d above 12, R10 has cautioned banks to take more precautions in respect of housing finance advances> due to which of the following: a increasing advances in housing finance b frauds taking place in housing finance in one particular bank c increasing incident of frauds and increasing 6A's

d due to increasing exposure of few banks in housing finace e a to d all 1 , 4nder 8redit :uarantee <und 2cheme> the maximum amount of claim for non-fund based limits is: a Rs,10 lac b Rs,1$ lac c Rs,1*,($ lac d Rs,2$ lac e 6on-fund limits are not covered, 1", Which of the following committees is associated with improvement in the working of weak banks: a RK =han 8ommittee b 2 2 +arapore 8ommittee c Aadmanabhan 8ommittee d 2 ; =apoor 8ommittee e Derma 8ommittee 1$, Which among the following is true in case of obIective of setting up of 8010;L a to collect information about bank 6A's b to collect credit information on behalf of R10 and 8D8 c to collection information about bank business for helping R10 d to collect positive and negative credit information and disseminate the same e a to c all 1&, What is true with regard to the provision that is re!uired to be maintained on standard loan assets: a it is 1C on all regular standard assets b it is 1C on all regular and irregular standard assets c it is 0,2$C on all regular standard loan accounts d it is 0,2$C of global loan portfolio of standard loan assets e it is 0,2$C on all advances of the bank, 1(, ' customer tenders to the bank an outstation che!ue of Rs,10000 for collection and also re!uests for instant credit of the che!ue> to which bank agrees, What would be bank be called: a agent of the customer b holder for value c holder d holder in due course e special holder in due course 1*, ' che!ue has been issued by J in favour of E> who crosses the same as ?not negotiable@ and endorses to F for a valuable consideration, Which among the following is true with regard to the che!ue: a E has no liabiity if the che!ue is dishonoured, b F becomes a holder in due course c J@s liability on the che!ue is a secondary liablity d no one would be holder in due course on this che!ue e 2uch cannot be endorsed> as the transferability has been restricted, 1-, ' che!ue dated 5ct 12> 200" is presented for payment on 5ct 2(> 200", 0t is however observed that the che!ue book from which the che!ue was issued was issued to the customer on 5ct 22> 200" only, What would the bank do with the che!ueL a this is ante dated che!ue and would be paid> if otherwise in order b the che!ue would be paid> if drawer confirms that he put the date intentionally

c the che!ue would be returned> as apparent tenor of the drawer is not clear d the che!ue being post-dated che!ue would be returned e the che!ue being ante-dated would be returned, 20, What is overbought position in case of <oreign .xchange> at a particular point of timeL a when foreign exchange purchased is less than foreign exchange sold b when foreign exchange sold is more than foreign exchange purchased c when foreign exchange sold is e!ual to foreign exchange purchased d when foreign exchanged purchased is more than foreign exchange sold e when foreign exchange purchase become risk-prone due to price variation 21, What is the amount of family income for eligibility under )R0 scheme in rural areas: a Rs,&2$0 p,a, b Rs,&"00 p,a, c Rs,(200 p,a, d Rs,($00 p,a, e Rs,11200 p,a, 22, Eou are approached by an 220 units that is engaged in an industry> where raw material is available in a particular season of two months only, +he assessment of working capital for this would be made by the bank: a as per cash budget method b as per turnover method of 6ayak 8ommittee c as per 8hore 8ommittee method d as per 1st method of +andon 8ommittee e as per 2nd method of +andon 8ommittee 2 , Which among the following is true with regard to obIective of getting signature of the person obtaining payment of a bearer che!ueL a to get it endorsed properly b to get final discharge of the instrument c to create proof that the instrument was presented d to get receipt of payment e a to c all 2" +he comparison of the balance sheet of a firm reveals that increase in its long term uses are 12$C of increase in its long term sources, Which of the following must be true: a debt e!uity ratio changed b current ratio changed c stock turnover ratio changed d debt service coverage ratio changed e nothing changed 2$ Which among the following is correct with regard to family income in case of Arime Ginister Ro%gar EoIna 7AGRE9L a for income purpose family comprises husband and wife and their childern b the maximum income separately for husband and wife is Rs,"0000 p,a, c the maximum income of husband#wife Rs,"0000 p,a, from all sources and that of parents separately Rs,"0000 p,a, d the maximum income of husband#wife and that of parents is Rs,*0000 p,a, from all sources e c and d both are correct 2& Which of the following categories of borrowers are not eligible for assistance under =D08@s margin money schemeL a Aartnership firm

b individuals c cooperative societies d trust registered with =D08 e none of the above 2( 2ection 2&--+ of 0ncome +ax 'ct 1-&1> deals with which of the following aspects of banking transactionsL a payment of term deposit in cash up to Rs,20000 only b deduction of tax at source on term deposits c payment of bank drafts in cash up to Rs,$0000 only d preparation of bank drafts in cash up to Rs,$0000 only e all the above, 2* 1ank drafts are issued by banks payable to order only while customers can issue che!ues payable to bearer also: a due to restriction imposed by :ovt, b because that would be risk prone c as per provisions of R10 'ct d as per directives of 1anking Regulation 'ct e because is draft is a value paid instrument while che!ue is value payable, 2- Which of the following is not correct with regard to ?=now Eour 8ustomer guidelines@ L a :uidelines have been issued u#s $ ' of Reserve 1ank of 0ndia 'ct b :uidelines relate to identification of depositors c :uidelines help to control financial frauds d :uidelines help in identification of money laundering and suspicious activities e :uidelines are applicable to all accounts including foreign currency accounts, 0 Which among the following can be exercised by a bank on a term deposit the maturity date of which expired 2 months back: a right of assignment b right of appropriation c right of subrogation, d right of forclosure e right of set off 1 When a bank has oversold position in foreign currency in an appreciating market which of the following would be trueL a bank will be gaining while covering its position b bank may incur loss while covering its position c there will not be any impact> since bank has already sold the currency d bank will gain while purchasing the fresh currency e none of the above 2 0n order to sell an asset charged to the bank under 2'R<'.20 'ct> which among the following is trueL a any kind of asset can be sold if it is charged to the bank b all kinds of loans are covered except agriculture loans c before possession 0 day@s notice and before sale &0 days@ notice is re!uired d before possession &0 days@ notice and before sale 0 days@ notice is re!uired e sale can be made after getting permission from )R+, 0n which of the following circumstances> the relationship between the bank and customer is not correctly stated: a shares given for sale - agent H princial

b garnishee order - debtor H creditor c payee of draft - trustee H beneficiary d articles left by mistake - agent H principal e standing instruction - agent#principal " 0n which of the following circumstances> there can be more than one nominee a Ioint term deposit accounts b deposit accounts of pensioners c Ioint safe deposit of aritcles d locker accounts in either#survivor account e Ioint operation locker accounts $ Eour branch receives a che!ue of Rs,2$00 drawn in favour of Gr,+yagi for payment across the counter, 0t is observed that the name of the payee Gr, +yagi in the che!ue is written in Kindi while the other particulars are in .nglish: a 1ank will return the che!ue b 1ank will ask Gr, +yagi to write the name in .nglish also c 1ank will ask the payee to get it corrected in .nglish from the drawer d 1ank will make the payment of the che!ue e 1ank will make the payment> after en!uiring from the drawer, & 0llegal interference in the property of another person> that becomes a punishable offence> is called: a tress-passing b marshalling c securitisation d negotiation e conversion ( What is the amount of court fee for filing a case in a ;ok 'dalatL a Ginimum Rs,($0, b 'bove the amount of Rs,$ lac> Rs,100 for each Rs,1 lac c Gax amount is Rs,10000 d 6o court fee is payable e 8ourt fee is discretion of ;ok 'dalat, * 0n case of small scale industrial units> which among the following is correct with regard to the sub-target to be achived by banks: a 2$C of 220 advances should be to 220 with investment in plant H machinery up to Rs,2$ lac b 20C of 220 advances should be to 220 with investment in plant H machinery above Rs,$ lac H up to Rs,2$ lac c Ginimum "0C of 220 advances should be to 220 with investment in plant H machinery above,2$ lac d 20C of 220 advances should be to 220 with investment in plant H machinery above Rs,2$ lac e all the above - J issues a che!ue in favour of '> who crosses the che!ue as ? account payee only@, +his direction of ' is: a direction of drawer to paying bank b direction of the payee to collecting bank c direction of drawee to the payee d direction of the drawer to collecting bank e direction of the drawer to the payee

"0 Gr, : guaranteed the loan raised by Gr, E who failed to pay, When money was demanded from Gr, : he paid the loan and asked for handing over the securities available in the loan, Which right Gr, : has used to demand the securities: a Right of foreclosure b Right of subrogation c Right of redemption d Right of marshalling e Right of novation "1 1 appoints J as his agent on /anuary 01> 200", J signs a post dated che!ue dating it as Garch 0> 200$, Ke expires on Garch 2$> 200$, +he che!ue is presented on 2ept 2-> 200$ a the che!ue will not be paid b the che!ue would not be paid because the signatory has died c the che!ue would be paid as the customer is alive d the che!ue would be paid as che!ue has not become stale as yet e che!ue would be returned as with death of the agent the authority ceasd to operate, "2 <or which kind of following accounts> the banking cash transaction tax is to be deducted: a all deposit and loan accounts b for all non-saving bank accounts whether deposit or loan accounts c cash withdrawal from non-saving accounts of individuals#K4< of Rs,2$000 and above d cash withdrawal from non-saving accounts of others of less than Rs,1 lac and above e c and d " 4nder which of the following systems> is an alternative method of effecting bulk payment transactions which would obviate the need for issuing and handling paper instruments and thereby facilitate improved customer service by the banks and companies # 8orporations :ovt, department effecting payment, a electronic funds transfer b electronic clearing services c special electronic funds transfer d real time gross settlement e all the above "" 0n which of the following styles> a locker account cannot be opened: a Ioint account in the name of more than persons b Ioint operations by more than two persons c either or survivor d former or survivor e the account can be opened in all forms such as Ioint operation> either#survivor and former#survivor "$ J and E deal with each other by sale and purchase of goods, J draws a bill of exchange on E which E accepts for payment> but no sale purchase has taken place for this bill, 0n this case the bill is : a, clean bill of exchange b, documentary bill of exchange c, foreign bill d, genuine bill e, accommodation bill For solution to this quiz, kindly refer to $ctober 2005 issue of Banking

Events

!date"

Set - 4
1 ' reputed company approaches your bank to provide them credit support for raising external commercial borrowing under automatic route, What kind of facility can be provided to them: a a guarantee for the .81 can be given b a standby letter of credit can be opened c letter of undertaking can be issued d letter of comfort can be issued e 6one of the above is permitted 2 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 ;8 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 preshipment credit if asked for by the beneficiary e all the above While providing finance to a proIect> the term 6et Aresent Dalue method represents which of the following: a to find out the present value of the investment made in the proIect 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 proIect 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 proIect so as to understand the actual outlay e the discount rate at which the present value of future cash flows becomes %ero taking into account the investment, " Which among the following banks has been permitted by R10> a higher overall ceiling 7above $C9 in respect of exposure to capital market: a 2tate 1ank of 0ndia b K)<8 1ank c 2tan8hart 1ank d 08080 1ank e 0)10 ;td $ Which among the following is the first bank to return capital to the 8entral :overnnent: a 2tate 1ank of 0ndia b AunIab 6ational 1ank c 5riental 1ank of 8ommerce d 8anara 1ank e 8orporation 1ank & AroIect ' has higher fixed cost than the proIect 1, What will be true with regard to 1reak even point of these proIect> other things being e!ual: a proIect ' has higher break-even and scope of better profits b proIect ' has higher break-even and scope of lower profits c proIect 1 has higher break-even and scope of better profits d proIect 1 has higher break-even and scope of lower profits e 1reak even shall be e!ual based on the cash flows

( ' company has been formed to undertake the business of software development, +his obIective of the company would be found in which of the following documents: a 8ertificate of 0ncorporation b 8ertificate of 8ommencement of 1usiness c Resolution from 1oard of )irectors d 'rticles of 'ssociation e 6one of the above * 4nder which of the following methods of depreciation on fixed assets> the annual amount of depreciation decreases: a Written down value method b 2traight line method c 'nnuity method d 0nsurance policy method e a and c above - 'n importer has imported from 'ustralia 7invoicing 'us )ollar9 certain plant and machinery the payment of which is to be made 2 months after, 5n the basis of prevailing situation the home currency is expected to record depreciation compared to 'us )ollar, What should be importer do: a Ke must go for a swap of 'us )ollar with Rupee b Ke must arbitrage in 'us )ollars c Ke should book a forward contract and purchase 'us )ollar d Ke should sell 'us )ollars immediately e Ke should purchase 'us )ollars spot 10 +he rate of discount at which the present value of cash inflows becomes e!ual to the present value of cash outflows over the period of a proIect is called: a net present value b discounted cash flow c debt service coverage ratio d internal rate of return e proIect appraisal techni!ue 11 ' stand-by letter of credit opened for import of gold on loan basis provides for which of the following: a the usance period should not exceed -0 days b the usance period shall be need based as per contract c the tenor of the letter of credit should be in line with the period of gold loan d a to c all e a and c 12 +he methodology that focuses on eliminating the defects and facilitating data drivern decision making: a management by obIectives b customer relation management c six sigma d strategic management e +otal !uality management 1 ' 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 6et interest margin would decrease b 6et interest margin would increase c Garket value of the assets would increase

d Garket value of the liabilities would increase e +here will be no impact, 1" 8ollection 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, +his would lead to: a increase in its working capital re!uirements b decrease in its working capital needs c no change in its working capital needs d higher amount of interest payment e 6o impact on any of the financial parameters 1$ ' process under which it is expected that a combined entity 7combination of two or more9 would be able to exceed the individual earning of the entities being combined: a six sigma b total !uality management c synergy d internal rate of return e management by profiteering 1& Which of the following foreign nationals of non-0ndian origin cannot remit foreign exchange from 0ndia: a Who has retired from employment in 0ndia b Who has inherited assets from a person resident in 0ndia c Who is widow of a 0ndian 8iti%en d all the above e none of the above 1( What is the maximum amount that a foreign nationals of non-0ndian origin can remit foreign exchange from 0ndia: a N $0000 b N 100000 c N $00000 d N 1000000 e N 2$00000 1* +he facility of remittance is not available to which of the following types foreign nationals of non-0ndian origin: a 8iti%ens of 'ustralia H 8anada b 8iti%ens of 6epal H 1hutan c 8iti%ens of 6epal and 1angladesh d 8iti%ens of 1hutan and Aakistan e 6one of the above 1- Remittance of sale proceeds of immovable of property can be allowed by 'uthorised )elaers to which of the following: a 8iti%ens of 6epal and 1angladesh b 8iti%ens of 2ri ;anka H 'fghanistan c 8iti%ens of Aakistan H 0ran d 8iti%ens of 8hina and 1hutan e 6one of the above 20 ' person of 0ndian origin approaches to remit funds from his 6on-Resident 5rdinary account, Kow the bank should deal with his re!uest: a 8an be allowed up to N 1 million b 8an be allowed up to N 100000 c 8an be allowed with permission of R10

d 8an be allowed up to Rs,1 million e 8an not be allowed 21 'n 6R0 wants to remit the sale proceeds of the immovable properties from 0ndia, Which of the following documents will not be re!uired to be furnished by him: a evidence in support of inheritance b Reserve 1ank permission c )ocument for legacy of assets d 'n undertaking by the remitter e 8' certificate as per prescribed format 22 What is the residential status of a student from 0ndia having gone abroad for studies purpose: a a person of 0ndian origin b a 6on-resident 0ndian c a resident 0ndian d a foreign 6ational e none of the above 2 What kind of remittance facilities are available for a student from 0ndia having gone abroad for studies purpose: a same as in case of Resident 0ndia b same as in case of a foreign national c same as in case of an 6R0 d same as in case of person of 0ndian origin e 6o such facility is permitted, 2" Who among the following can open an 6R5 account in 0ndia: a a non-resident 0ndian only b a person of 0ndian origin only c 'ny person#entity resident outside 0ndia d a foreign national only e none of the above 2$ Which of the following types of credit can be freely allowed by 'uthorised )ealers to 6R5 accounts: a from <86R accounts and vice versa b from 6R. accounts and vice versa c transfers from rupee accounts of non-resident bank d all the above e none of the above 2& What is the extent of debits that can be allowed by ')s for remittance from 6R5 account of 6R0#A05: a N 1 million per calendar year b N 1 million per financial year c N 100000 per calendar year d N 100000 on one occasion e N 100000 per financial year 2( ' foreign national visiting 0ndia wants to open an 6R5 account during his visit: a account can be opened b account cannot be opened c account can be opened with R10 permission only d account can be opened for foreign currency transactions

e none of the above 2* +he compliance of which of the following conditions is re!uired to be ensured in respect of 6R5 account of a foreign national: a the account can be opened maximum for a period of & months b no credit from local funds will be permitted c interest can be credited d balance can be allowed to be converted into foreign currency for payment to the account holder at the time of his departure from 0ndia e all the above 2- ' resident 0ndian proceeds to 6epal for taking up employment, Kis saving bank with your branch in 0ndia will be designated as: a <86R account b ' non-resident external account c 'n 6R5 account d ' resident account e none of the above 0 ' non-resident 0ndian has been visiting 0ndia to meet his old parents, )uring his visit to 0ndia> his 6R5 account would be treated as: a an 6R. account b ' resident account c 'n 6R5 account d an <86R account e none of the above 1 ' re!uest is received by your branch from the nominee> to credit the balance lying in the deceased person@s 6R5 account to his account: a it cannot be done if nominee is resident b it cannot be done if nominee is non-resident c re!uest can be accepted if he is non-resident only d re!uest can be accepted if he non-resident or resident 0ndia e R10 permission is re!uired for such re!uest, 2 ' non-resident 0ndian has returned to 0ndia for employment for uncertain period, Kis 6R5 account would be treated as: a an 6R. account b ' resident account c 'n 6R5 account d an <86R account e none of the above 'n 6R0 has been issued a credit card by your bank, +he balance drawn by him under the card shall be adIusted by which of the following: a remittances from abroad b transfer from his 6R. account c transfer from his <86R account d transfer from his 6R5 account e any of the above modes " ' resident 0ndia allowed loan by your bank has become non-resident, What treatment should be given by the bank to his loan account: a loan should be recovered before he leaves 0ndia b banks can use their commercial Iudgement about continuation of the loan

c if loan is allowed> it can be adIusted by his relatives d if loan is allowed> it can not be adIusted by his income in 0ndia e if loan is allowed> it can not be adIusted out of remittances $ What is meant by the word ?deposit@ in the context of <86R-1 scheme a a saving bank deposit b a current account deposit c a term deposit d a saving> current or term deposit e none of the above & 0n which of the following currencies> an <86R-1 cannot be allowed to be opened: a 42 N and .uro b .uro H 'ustralian )ollar c 8anadian )ollar H Aound d /apanese Een and .uro e 2ingapore )ollar and )inar ( Which of the following categories of persons can open an <86R-1 account: a 5verseas 8ompany b 5verseas firm c 5verseas corporate body d 6R0 of 0ndian nationality or origin e c and d * )eposit under <68R-1 scheme can be accepted maximum for which of the following maturities: a 1 year b 2 years c years d " years e $ years - What is true with regard to payment of interest on <86R-1 accounts: a the no, of years is to be taken &0 b for deposits of maturity of up to one year> interest is not to be compounded c for deposits of more than year> compounding to be done with an interval of 1*0 days, d all the above e none of the above "0 <or payment of additional interest on <86R-1 deposit account> the word family in respect of a staff member does not include: a spouse of the member#deceased member b dependent parents c dependent children d dependent brothers#sisters e none of the above "1 'n 6R0 customer comes to get his <86R-1 term deposit cancelled after * months of its date of issue as he needs money urgenty to meet the cost of medical expenses in 0ndia, What interest rate would be paid to him: a as applicable for domestic saving bank account b as applicable for 6R. account saving bank account c as applicable to the period> the deposit was with the bank less penalty d as applicable to the period> the deposit was with the bank> without any penalty e no interest to be paid

"2 ' customer holding <86R-1 term deposit wants to convert his deposit to 6R. deposit: a it can be allowed without any penalty b it cannot be allowed with R10 permission c it can be allowed subIect to recovery of penalty d it can be allowed without paying any interest e it can be allowed and interest can be paid as per saving bank deposit on 6R. accounts " 'n 6R0 customer holding <86R-1 term deposit and returning to 0ndia for permanent settlement wants to convert his deposit to Resident foreign currency deposit: a it can be allowed without any penalty b it cannot be allowed with R10 permission c it can be allowed subIect to recovery of penalty d it can be allowed without paying any interest e it can be allowed and interest can be paid as per saving bank deposit on 6R. accounts "" 'n <86R-1 term deposit is maturing on 2aturday and customer demands its payment, 0t will be paid: a on 2aturday with interest up to <riday b on 2aturday with interest up to 2aturday c on Gonday with interest up to Gonday d on <riday with interest up to <riday e 6one of the above, "$ Which among the following is not part of the .xternal 8ommercial 1orrowing: a buyer@s credit b seller@s credit c securiti%ed assets d bank loans e 6R0 deposit "& What is the time period of minimum average maturity for external commercial borrowing: a 1 year b 2 years c years d " years e $ years "( <or which among the following purposes> the external commercial borrowing funds cannot be raised> under the automatic route: a investment in the form of capital goods import b 0nvestment in infrastructure c investments in Ioint venture and wholly owned subsidiaries abroad d meeting the working capital needs e none of the above "* ' 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 techni!ue c virus protection technology d total protection techni!ue e morphing "- +he break-even point in terms of capacity utili%ation of a proIect in its 2nd and year would be $$C and $0C respectively while the actual level of operation is $2C and $"C

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 rd year d there will be profit in the 2nd year and loss in the rd year e there will be neither profit nor loss $0 0n computer software> the term ?Gorphing@ refers to which of the following: a animation techni!ue in which one image is gradually turned into another b data conversion techni!ue 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 For solution to this quiz, kindly refer to %e!tember 2005 issue of Banking Events !date"

Set - 5
1 Which of the following terms represent ?one point basis@: a one percent b one tenth of one percent c one hundredth of a percent d one hundred percent e one thousandth of a percent 2 1ombay stock exchange index ?2ensex@ is based on the value of top 0 shares of: a <ortune $00 companies b :overnment 8ompanies c 2trong World level companies d 0ndian blue chip companies e 'sian companies Which of the following kind of mutual funds operates continuously without any limit for entry for subscriptions and redemptions: a open ended b closed ended c growth fund d fixed income fund e specific fund " ' person is not interested in buying the rights issue shares offered to him and he decides to give this right to one of his relatives, +his is called: a +ransfer of shares b ReIection of shares c Renunciation of shares d 2urrender of shares e 6one of the above $ Which of the following instruments represent the share in 0ndian companies in 0ndia being traded in 'merica#.uropeL a :)R#')R b 0)R#')R c :)R#0)R d Fero 8oupon 1onds e )ebentures

& +he customer day in a public sector bank bank is on and customers are allowed to meet the top officials of the bank branch on this day in every month: a $th b (th c 10th d 1$th e 2$th ( +he term ?evergreening@ means a to plant green trees all the times b a healthy asset cover c provide additional loan facility to an 6A' account to make the asset standard d to paint the bank building with green paint e none of the above * 5ne of the female staff members of workman staff had a miscarriage and has applied for a &-month maternity leave, What would be doneL a 6o leave permissible for miscarriage, Kence re!uest would be reIected, b ;eave would be sanctioned after verification of the fact, c 2anction the leave after getting it approved from Kead 5ffice d 'llow & weeks@ leave and for the balance period> ordinary leave account would be debited e none of the above - ' minor can be allowed to open a saving bank account> where he: a could sign and his age is at least 12 years b his age is above 1& years c could sign in .nglish and his age is 1& years d could sign and his age is 10 years or above e could sign in Kindi and his age is 10 years or above 10 Gr, )harmesh> an important customer of your branch informs you that Gr, Ramesh =umar> another customer has snatched Rs,2$000 from him and deposited in his account, a 1y debiting account of Ramesh> amount would be paid to )harmesh b 'dvise him that bank cannot take any action on his complaint c :uide him to lodge a complaint with the police and if necessary> bank will provide a certificate that amount has been deposited, d 2ince amount belongs to )harmesh> the balance would be earmarked, e none of the above 11 's per extant guidelines> who among the following can sign the notice for possession under 2'R<'.20 'ct 2002> on behalf of the bankL a 'ny official of the bank b 'ny officer of the bank c 'ny manager of the bank d 'ny ;aw 5fficer of the bank e 'n officer in 2cale 0D or above 12 +he limitation period of 12 years> in case of a registered mortgage begins with reference to : a date on which the loan falls due b date on which the mortgage was created c date of documents d b and c whichever is earlier e none of the above

1 'fter 2tate 1ank of 0ndia> who among the following are maIor shareholders of 'sset Reconstruction 8o, 0ndia ;imited: a 08080#0<80 b 0)10#0<80 c 08080#A61 d 0)10#08080 e 0)10#1o1 1" 'dvances allowed by banks to which of the following> are not part of the advances to sensitive sectors: a against shares b to share brokers c to builders d against the security of commodities e loan to tobacco industry 1$ 's per R10 directives> the exposure of the banks in capital market is restricted to: a $C of the 2;R investments b $C of the total investments c $C of total outstanding advances of 7last day of9 previous year d (,$C of total outstanding advances e $C of the total outstanding advances on on-going basis, 1& +he following risk has been introduced in the 1asel 00 accord> for the first time for the banking industry: a operational risk b li!uidity risk c settlement risk d market risk e credit risk 1( 4nder the provisions of 2'R<.'20 'ct 2002> where the defaulting borrower contests the sei%ure of the assets proposed for possession> whom can he approach: a 2upreme 8ourt b Kigh 8ourt having the Iurisdiction c )R+ having Iurisdiction d )R'+ e )istt 8ourt 1* :ovt, policy to raise additional resources through taxation and allocation of expenditure as per its priorities> is called: a economic policy b $-year plan c expenditure and income policy d fiscal policy e none of the above 1- +he terms +06 and 806 under the 5;+'2 system represent> which of the following a tax information network H challan identification number b tax information network and customer identification number c tax indentification network and challan identification number d tax identification net work and customer identification number e none of the above 20 +he 6ayak 8ommittee method for sanction of composite loans is applicable to which kind of 220 units being financed: a maximum amount of Rs,100 lac b maximum amount of Rs,200 lac c maximum amount of Rs,$00 lac d maximum amount of Rs,10 cr

e none of the above 21 Which among the following maturity period of <86R-1 deposits is not available as per R10 directives: a 1 year and above but less than 2 years b 2 years and above but less than years c three years only d 1 year to $ years any maturity e a to c 22 ' customer of a bank desires> transfer of funds from his 6R. account to an <86R-1 account and later on from <86R-1 to 6R. account: a from 6R. to <86R will be allowed b from <86R to 6R. will be allowed c <rom 6R. to <86R will not be allowed d <rom <86R to 6R. will not be allowed e 'llowed both ways 2 0nterest on <86R-1 term deposit of 2 years> which is cancelled after * months of its deposit would be : a applicable for the period less penalty> b applicable for the period on date of deposit less penalty c applicable for the period on date of withdrawal less penalty d no interest to be paid e none of the above 2" 8urrent account convertibility in terms of foreign exchange transactions> represents which of the following transactions: a sale of shares at 62. and investment at 6'2)'3 b purchase of immovable property in 0ndia by a foreign national by remitting funds from abroad c export of goods and surrender of foreign exchange representing export proceeds to an authori%ed dealer d export of services for investing the proceeds permanently outside 0ndia e none of the above 2$ Which of the is not correct with regard to a =issan 8redit 8ard : a the amount is based on operational holding and scale of finance b the card has validity of years c che!ue book can be issued to select customers d contingent re!uirement can also be financed e none of the above 2& When a country decides to conduct trade on favourable terms with another country for mutual benefits> this is called: a <+' system b G<6 status c 1ilateral trade d 8ounter trade e 6one of the above 2( ' bank finds it difficult to repay the short term deposits on maturity to its deposits because the funds of the bank are locked in long term loans or investments, +he risk arising from this situation is called: a 0nterest rate risk b ;i!uidity risk c 5perational risk

d Garket risk e 8redit risk 2* +he li!uidity position assessment of a company can be made by which of the following parameters: a debt e!uity ratio b total outside liabilities to tangible net worth ratio c debt service coverage ratio d current ratio e fund flow statement pattern 2- ' company is found to be carrying high debt e!uity ratio, +o improve the ratio> the bank will suggest the company to: a increase the e!uity by way of bonus issue b issue rights shares to existing shareholders c raise long term loans from institutions d raise long term interest free loans from friends and relatives e all the above 0 Which among the following would be classified as application of funds by a business firm: a raising loans from banks b raising the e!uity through a public issue c sale of fixed assets d purchase of fixed assets e earning handsome profits 1 Which of the following is correct with regard to shifting a bank branch within the same municipal area: a R10 license is necessary b R10 permission is re!uired c 2tate govt, clearance is re!uired d 1ank 1oard@s approval is re!uired e no permission is re!uired, 2 +he 'sset ;iability 8ommittee in a bank makes the assessment of which of the following: a 8redit risk b <oreign .xchange fluctuation risk c ;i!uidity risk d operational risk e all the risks 'dditional provision on sub-standard assets classified as unsecured is to be made at 20C, <or this purpose> the unsecured loan would mean> where the reali%able value of security is less than BBBB of the outstanding: a 10C b 1$C c 2$C d $0C e 100C " Which of the following is the obIective for introduction of 2enior 8iti%en 2aving 2cheme: a Gobilise additional deposit for banks b provide assured return to senior citi%ens c increase the govt, borrowing d attract retirement funds

e none of the above $ 0f a financial transaction is carried> processed and settled instantantly> this is called: a automated teller machine b electronic funds transfer c reconciliation transaction d real time gross settlement e none of the above & <inancial transactions are transmitted through ?encryption processO, +his stands for: a change of data into coded form b user having the access through a pass word c sending the data through internet d sending the information through 8) or floppy e none of the above ( 8he!ue truncation means which of the following: a tearing the che!ue into pieces b sending a %erox copy of the che!ue for collection c electronic image of a che!ue d providing details of the che!ue over phone e sending original che!ue to paying bank and retaining an electronic image by the collecting bank * 1road band connectivity facilitates which of the following: a continuous offline internet for 2" hours b provision of internet faster than dial up tone facility c cheaper connectivity d broad screen computer based internet facility e all the above - Which among the following could be taken under ?mixed farming@L a agricultural and allied activity b agricultural and manufacturing activity c agricultural and trading activity d agricultural and servicing activity e all the above "0 ' shortfall in achievement of priority sector overall target by a commercial bank can be partly made good by: a investing in 20)10 bonds b investing in R0)< c investing in R10 bonds d investing in +reasury 1ills e all the above "1 Which of the following can open an account under the Aublic Arovident <und 2cheme in its present form: a an individual b an K4< c a 8haritable trust d a society for handicapped persons e all the above "2 What is the extent of provision that a bank is re!uired to make for net position after

segregating all debit and credit entries in inter-branch accounts: a 2,$C of the net amount b 10C c 20C d $0C e 100C " ' partnership firm having its current account with your branch withdraws cash in the morning amounting to Rs,"$000, 't noon it withdraws more amount of Rs,2(000, 0n the evening yet another withdrawal of Rs,2*000 is made by the firm, What is status of application of 1anking 8ash +ransaction +ax: a bank is re!uired to deduct the tax as the total amount of withdrawal on a single day is Rs,1 lac b bank is not re!uired 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 re!uired to deduct as the amount of each withdrawal is above Rs,2$000 e none of the above "" ' company is having its current account with branches of your bank and on a single days makes cash withdrawals of Rs,"0000 from one branch> Rs, $000 from the 2nd branch and Rs,2$000 from the rd branch, What is the status of application of 1anking 8ash +ransaction +ax: a bank is re!uired to deduct the tax as the total amount of withdrawal on a single day is Rs,1 lac b bank is not re!uired 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 re!uired to deduct as the amount of each withdrawal is of Rs,2$000 or above e 1ank is not re!uired to deduct as the amount is less than Rs,1 lac for each branch and the amount withdrawn from all branches is not to be aggregated "$ Which of the following types of operation modes are permitted under the 2enior 8iti%ens 2aving 2cheme 200": a generally single account b Ioint mode with the spouse c Ioint operation with any one d a and b only e a to c all "& 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 Ioint survivorship accounts> no re!uirement b in case of nomination accounts> no re!uirement c in case of accounts with no nomination or survivorship provision> discretion of the bank d 1anks cannot ask for such representations e a to c "( 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 ( days b 10 days c 1$ days d 0 days e no time limit "* +he cases of deceased depositors where the claims have been received and are pending beyond the stipulated period are re!uired to be reported to which of the following:

a 1oard of )irectors of the bank b 5mbudsman c Reserve 1ank of 0ndia d 8ustomer 2ervice 8ommittee of the 1oard e 'll the above "- Which of the following kinds of Ioint accounts cannot be categori%ed 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 $0 J opened an account with your branch under the 2enior 8iti%ens 2aving 2cheme 200" for years, Ke needs the funds to meet his medical expenses by raising a loan 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 *0C 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 re!uest supported by a estimate from hospital e none of the above $1 What is the age criteria for under 2enior 8iti%en 2aving 2cheme 200" for opening the account: a $$ years b &$ years c &0 years d $$ years in case of those who are retiring voluntarily e c and d For solution to this quiz, kindly refer to &ugust 2005 issue of Banking Events !date" FOR MORE DETAILS AND LATEST TOPICS OF INTEREST TO BANKERS YOU CAN refer to our book "Han book of Bank!n" Infor#at!on" OR $ub$%r!be to our ne&$'#a"a(!ne "Bank!n" E)ent$ U* ate"+
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