Question Pattern

NCFM Model Test Paper
Banking Sector Module
Maximum Marks: 100

Test Duration: 120 minutes
Pass Marks: 60
Time Left: 119:24 minutes
_________ is a key determinant indicating availability of banking services for the

entire economy. [ 1 Mark ]
(a) RTGS
(b) NEFT
Q1
(c) Reach of bank network
(d) Number of bankers
(e) I am not attempting the question
The relevant banking ombudsman for filing a complain regarding credit card with
central processing is the one under whose jurisdiction __________. [ 2 Marks ]
(a) the head office of the bank falls
(b) the central processing center of the bank falls
Q2
(c) the nearest bank branch falls
(d) None of the above
Q3 Which of the following are covered in the Banking Ombudsman Scheme? [ 2
Marks ]
(a) Scheduled Primary Co-operative Banks
(b) RRBs
(c) Both of the above

Handing over Warehouse Receipt is an example of ________. [ 1 Mark ]
(a) Constructive Delivery
(b) Actual delivery
Q4
(c) Intangible delivery

Criminals use ______ to camouflage money flow from criminal activities and pass
it off as regular legal money flows. [ 1 Mark ]
(a) Money Laundering
(b) Smuggling
Q5
(c) Drug Trafficking
(d) PayPal
Q6 "A borrower defaults on a secured loan of Rs. 50,000. The underlying security is
worth Rs. 60,000. Which of the following is true? " [ 1 Mark ]
(a) "Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the
borrower."
(b) Bank cannot sell the underlying security because its value is higher than
loan.
(c) "Bank can retain the entire Rs. 60,000"
(d) "The excess of Rs. 10,000 has to be shared equally between the bank and
the borrower."
________ account is maintained by businesses for their daily operations. [ 1
Mark ]
(a) Current
(b) Savings
Q7
(c) Fixed Deposit
(d) Recurring Deposit
"When a customer opts for a safe deposit locker, the bank becomes a _______." [
2 Marks ]
(a) Debtor
(b) Creditor
Q8
(c) Lessee
(d) Lessor
Q9 RBI has stated that KYC of banks should incorporate the following elements
__________. [ 1 Mark ]
(a) Customer Acceptance policy
(b) Customer identification procedure
(c) Monitoring of transactions
(d) All of the above

Which of the following is a secondary identifier _______. [ 3 Marks ]
(a) Date of Birth
(b) Nationality
Q1
0

In which of the following situations would an agreement without consideration be
valid? [ 1 Mark ]
(a) in writing and registered
(b) promise is to compensate some one who has already done something for
Q1
1 the promisor
(c) Either of the above
Q1 Which of the following can be a scheduled bank? [ 1 Mark ]
2
(a) Public Sector Banks
(b) Private Sector Banks
(c) Co-operative Banks

Which of the following are non-fund faced facilities? [ 1 Mark ]
(a) Financial Planning
(b) Executor & Trustee
Q1
3
(c) Locker
The person to whom payment is to go under a bill of exchange is called _______.
[ 2 Marks ]
(a) Payee
Q1
4
(b) Beneficiary
The largest commercial bank in the country is ________. [ 1 Mark ]
(a) ICICI Bank
(b) State Bank of India
Q1
5
(c) Central Bank of India

(d) Reserve Bank of India
Q1 On which of the following grounds can banking ombudsman reject a complain? [
2 Marks ]
(a) Already taken to consumer court
(b) Not approached bank first
6

The third pillar in the Basel framework seeks to help participants to assess which
of the following information? [ 3 Marks ]
(a) Scope of application
Q1
7
(b) Capital
Which of the following is false of simple mortgage? [ 2 Marks ]
(a) Registration is mandatory
(b) Rights may be expressed in the mortgage deed or implied
Q1
8
(c) Possession remains with mortgager

(d) Mortgager accepts personal liability to pay mortgage money
Q1 "To be sure to receive same day credit on a Saturday, NEFT instruction has to be
9 given by _______." [ 2 Marks ]
(a) 12 Noon
(b) 11:00 AM
(c) 11:30 AM
(d) 12:30 PM
International credit cards can be used by Indians for _________. [ 2 Marks ]
(a) international travel
(b) international magazines
Q2
0
(c) international software

(d) Any of the above
"In the BASEL framework, first pillar stands for:" [ 1 Mark ]
(a) Minimum capital requirements
(b) Market Discipline
Q2
1
(c) Supervisory Review Process

(d) Monetary stability
Q2 Which of the following is an aspect of the first principle underlying Supervisory

2 Review Process in Basel framework? [ 2 Marks ]
(a) Banks should have a process for assessing their overall capital adequacy in
relation to their risk profile.
(b) Banks should have a strategy to maintain their capital level.

(c) Both of the above.
(d) None of the above. The act does not define a banking company.
The second pillar in the Basel framework seeks to help participants to assess
which of the following information? [ 3 Marks ]
(a) Risk exposure
Q2
3
(b) Risk assessment process

Vehicle finance is made cheaper through _________. [ 1 Mark ]
(a) Better insurance cover
(b) Special arrangement with manufacturer
Q2
4
(c) Navigation system in the car

(d) Higher engine capacity
Q2 "Each of the following has become a problem with MFIs in India, except
5 _______." [ 2 Marks ]
(a) Excessive financing
(b) reach
(c) financing for consumption

(d) inappropriate modes of recovery
Which of the following would make a consideration unlawful? [ 1 Mark ]
(a) Forbidden by law
(b) Not in writing
Q2
6

Actionable claim cannot be a debt that is secured by _________. [ 3 Marks ]
(a) Mortgage of immovable property
(b) Hypothecation of movable property
Q2
7
(c) Pledge of movable property

Q2 "When a customer deposits cheque with a bank for clearing, the customer
8 becomes a _______." [ 1 Mark ]
(a) Debtor
(b) Principal
(c) Creditor
(d) Agent
Which of the following is / are demand liabilities? [ 1 Mark ]
(a) Cash Certificates
(b) Gold deposits
Q2
9
(c) Current deposits

Which of the following is / are RBI conditions applicable for banks declaring
dividends? [ 3 Marks ]
(a) To be paid out only from current year profits
Q3
0
(b) Minimum capital adequacy of 9% to be maintained

(c) Net NPAs to be below 7%
Q3 Which of the following is true of Reverse Repo rate? [ 1 Mark ]

1
(a) Determined by free market forces
(b) Lower than repo rate
(c) benchmark for long term rates
(d) Part of funding cost for commercial banks

An agreement to sell becomes a sale when _________. [ 3 Marks ]
(a) prescribed time elapses
(b) prescribed conditions are fulfilled
Q3
2

Which of the following is true in the case of transfer of financial asset under
SARFAESI? [ 2 Marks ]
(a) "Charge does not need to be registered, even if borrower is company."
Q3
3
(b) Original borrower does not need to be informed.

"Between the four items - Deposits; Borrowings; Reserves & Surplus; and Capital,
which would appear last in the balance sheet of a bank?" [ 1 Mark ]
(a) Borrowings
Q3
4
(b) Deposits
(c) Reserves & Surplus
(d) Capital
Investment in FCNR may be made through ________. [ 1 Mark ]

(a) Remittance from abroad
(b) Transfer from NRE
Q3
5

Open Market Operations is an important tool for central banks in ___________. [
1 Mark ]
(a) bullish equity market conditions
Q3
6
(b) bearish equity market conditions

(c) countries where debt market is developed
(d) countries where debt market is under-developed
Investment classified under Held to Maturity category need not be _________.
[ 3 Marks ]
(a) recorded
Q3
7
(b) marked to market

(c) accounted for
(d) traded
Q3 An indorser is liable to pay interest on delayed payment from ________. [ 2

8 Marks ]
(a) date of indorsement

(b) due date of instrument
(c) date of notice of dishonour
Deposit insurance covers _______. [ 3 Marks ]
(a) Savings
(b) Current
Q3
9
(c) Term
_________ are a key vehicle through which RBI implements its monetary policy.
[ 1 Mark ]
(a) Banks
Q4
0
(b) Governments
(c) Corporations
(d) NGOs
Q4 The minimum amount for secured lenders to take the benefit of SARFAESI is
1 _______. [ 3 Marks ]
(a) Rs. 1 lakh
(b) Rs. 5 lakh

(c) Rs. 10 lakh
(d) Not specified
Fine in case of cheque bouncing can go up to _________. [ 2 Marks ]
(a) twice the cheque amount
(b) cheque amount
Q4
2
(c) thrice the cheque amount

(d) Rs. 5 lakh
Interest on savings bank accounts is paid on _______. [ 1 Mark ]
(a) lowest balance between 10th and 30th of the month
(b) lowest balance between 10th and the end of the month
Q4
3
(c) daily balance during the month

(d) lowest balance between 1st and 10th of the month
Q4 Usufructurary mortgage with personal liability of mortgager is nothing but

4 ________. [ 3 Marks ]
(a) Anomalous mortgage
(b) English mortgage
(c) Equitable mortgage

"BIS handles each of the following, except ________." [ 1 Mark ]
(a) Forum to promote discussion and policy analysis
(b) Centre for economic and monetary research
Q4
5
(c) Credit rating of global banks

(d) Prime counter-party for central banks
"Which of the following can benefit from SARFAESI, 2002?" [ 1 Mark ]
(a) Banks
(b) Financial Institutions
Q4
6

Q4 Each of the following is a function of Reserve Bank of India except _______. [ 1

7 Mark ]
(a) Lending to corporates
(b) Regulate issue of bank notes
(c) Secure monetary stability
(d) Operate currency and credit system

CAMELS framework was first used in _______. [ 2 Marks ]
(a) UK
(b) Canada
Q4
8
(c) India
(d) US
Cash credit is treated as out of order if ____________. [ 1 Mark ]
(a) No credits continuously for 90 days
(b) Credits not adequate to cover interest for 90 days
Q4
9

Which of the following is true of mortgage? [ 1 Mark ]
(a) Lender is morgager
(b) Typical of hypothecation
Q5
0
(c) Possession handed over when charge created

(d) Transfer of interest on specific immoveable property
"Tier 1 in the Basel framework includes each of the following, except ______."
[ 1 Mark ]
(a) Permanent shareholders equity
Q5
1
(b) fully paid ordinary shares

(c) perpetual non-cumulative preference shares
(d) Undisclosed reserves
"While granting a bank license, RBI considers all of the following, except
________." [ 2 Marks ]
(a) ability to pay depositors
Q5
2
(b) price of equity share of company

(c) character of proposed management
(d) whether public interest will be served by grant of license to the company
Investment in NRO may be made through _________. [ 2 Marks ]
(a) Remittance from abroad
(b) Transfer from NRE
Q5
3

Q5 "A borrower who has been given notice of enforcement of security interest, replies
4 with his objections. What is expected of the secured creditor? " [ 3 Marks ]
(a) Consider the objections fairly

(b) "If objections not acceptable, convey to borrower within 7 days"
SHG stands for: [ 1 Mark ]
(a) Society Housing Group
(b) Society Household Group
Q5
5
(c) Self House Group

(d) Self Help Group
RTGS Transfers _____________. [ 3 Marks ]
(a) happen in batches of 1 hour
(b) happen in batches of half an hour
Q5
6
(c) are instantaneous

(d) happen in batches of two hours
Q5 A fraud is discovered with respect to an loan that has turned NPA. When is the
7 earliest that it can be treated as a doubtful asset? [ 1 Mark ]
(a) Immediately
(b) Has remained sub-standard for upto 2 quarters

(c) Has remained NPA for upto 1 quarter
(d) Has remained NPA for upto 1 year
Under _________ working capital limits are determined based on financial
projections. [ 1 Mark ]
(a) Cashcredit
Q5
8
(b) Overdraft
(c) Bill Purchase
(d) Bill Discount
Higher interest based on age is offered in which of the following accounts? [ 1
Mark ]
(a) Savings
Q5
9
(b) Term
(c) Current
Q6 _______ is an unconditional written order to pay money. [ 1 Mark ]

0
(a) Bill of Exchange
(b) Cheque


Question Pattern

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NCFM Model Test Paper

Banking Sector Module

Maximum Marks: 100

_________ is a key determinant indicating availability of banking services for the

(d) None of the above

(c) Intangible delivery

(d) All of the above

(c) Both of the above

(e) I am not attempting the question

(c) Central Bank of India

Q1 On which of the following grounds can banking ombudsman reject a complain? [

(c) Either of the above

(c) Possession remains with mortgager

(c) international software

(c) Supervisory Review Process

Q2 Which of the following is an aspect of the first principle underlying Supervisory

(b) Banks should have a strategy to maintain their capital level.

(b) Risk assessment process

(c) Navigation system in the car

(c) financing for consumption

(c) Both of the above

(c) Pledge of movable property

(c) Current deposits

(b) Minimum capital adequacy of 9% to be maintained

Q3 Which of the following is true of Reverse Repo rate? [ 1 Mark ]

(e) I am not attempting the question

(c) Either of the above

(b) Original borrower does not need to be informed.

Investment in FCNR may be made through ________. [ 1 Mark ]

(c) Either of the above

(b) bearish equity market conditions

(b) marked to market

Q3 An indorser is liable to pay interest on delayed payment from ________. [ 2

(a) date of indorsement

(b) Rs. 5 lakh

(c) thrice the cheque amount

(c) daily balance during the month

Q4 Usufructurary mortgage with personal liability of mortgager is nothing but

(c) Equitable mortgage

(c) Credit rating of global banks

(c) Both of the above

Q4 Each of the following is a function of Reserve Bank of India except _______. [ 1

(d) Operate currency and credit system

(c) Either of the above

(c) Possession handed over when charge created

(b) fully paid ordinary shares

(b) price of equity share of company

(c) Either of the above

(a) Consider the objections fairly

(c) Self House Group

(c) are instantaneous

(b) Has remained sub-standard for upto 2 quarters

Q6 _______ is an unconditional written order to pay money. [ 1 Mark ]

(c) Both of the above

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