v) "Money is the key factor to run a business properly" do you agree? Give reasons for your answers.

vi) Hobbies are a waste of time-do you agree? Justify your answer.

2) Make sentences with the following idioms & phrases:-

a) To cut a sorry figure.
b) To the point
c) In black and white
d) To cook up accounts
e) To leave no stone unturned
f) In the long run
g) In a nutshell

3) Write five sentences using the following topics (any three):-

Write appropriate terminologies of the following parties and banks under documentary collection and documentary
credit?
Parties Documentary collection Documentary Credit
Exporter
Importer
Exporter’s bank

MCQ of different Exams:

1. A current account is opened at the branch. The opening form bears the signature of another
valued customer of the bank, the branch should -
a) Require the introducer to sign the opening form in the branch premises.
b) Telephone and confirm that the introduction is genuine.
c) Send a thanksgiving letter to the introducer.
d) Send the A/C opening form by post to the introducer and ask him to sign again and return.

2. Mr. Kamal and Mrs. Anila Kamal have a joint fixed deposit account payable to either of
survivor. They approached the bank for nominating Mr. Rubel, a friend of Mr. Kamal, as
nominee for the deposit. Mrs. Kamal has a major son Mr. Jamal-

a) The nomination can be accepted by the bank.

b) The nomination can't be accepted on a joint account payable to husband and wife as money
belongs to the family.
c) Only Mr. Jamal can be the nominee.
d) The nomination is not allowed in the Joint account.

3. A joint account can be opened by the banker on receipt of application signed by

a) Majority of the joint account holders.
b) All joint account holders.
c) Any joint account holder.

B
4. When the customer is operating the locker

a)The banker should remain with the customer in the safe room.
b)The banker should not remain with the customer in the safe room.
c)No other person should be present in the safe room.

5. The customer when deposing or taking out articles from the safe deposit locker should
a)Declare the value to the bearer.
b) Declare the items to the banker.
c)Not be required to do any of the above.

6. Pay order is issued by the banker for.

a) Local payment.
b) Inter-district payments.
c) Foreign payments.

7. A bank open LC -
a) On behalf of an importer.
b) On its own behalf.
c) On behalf of a bank.
d) All of the above.

8. The transaction in which the bank receives foreign exchange from the customer and pays
him in local currency is a-
a) Purchase transaction.
b) Sale transaction
c) Direct transaction
d) Indirect transaction

9. By shipping documents, we mean

a)All documents along with LC
b) All documents evidencing LC conditions
c) All documents issued by shipping agencies.
d) All of the above.

10. As per UCPDC, unless specifically authorized in the Letter of Credit. a bank will not accept
a) Through bill of lading.
b) Short form of bill of lading.
c) Bill of lading indicating that goods will be transshipped on route.
d) Charter party bill of lading.

11. The minimum period after which a account holder becomes eligible to introduce person to open an
account in the bank is-
a) Months
b) One year
c) Three years
d) No such stipulation
D

12. The bank finds that a customer issues Cheque frequently without maintaining proper balance in the
account. If the bank desires to close the account-
a) It should give proper notice to the customer and close the account.
b) It may close the account immediately and remit the balance by cheque to the customer.
c) It may freeze the account and file a suit against the customer.
d) It may levy incidental charges, but can not close the account.

13. Transferable Letter of Credit can be transferred-

a) Once
b) Twice
c) Thrice
d) Any Nos. of time.

14. On default of the borrower, the banker, under Pledge, can sell pledged goods
a) Immediately.
b) After issuing notice to the default borrower.
c) After obtaining court order.
d) None of the above.

15. An "Open Letter of Credit" is one

a) Which can be made use of be any exporter.
b) Which places no restriction on the amount available.
c) Which contains an open invitation to any bank to negotiate documents drawn under it.
d) None of the above.

16. The right of Lien refers to-

a)Right of the debtor to forgo the securities.
b) Right of the creditor to sell the securities of the debtor.
c) Right of the creditor to remain possession of securities belonging to debtor.
d) None of the above.
C

17. The Bank need not close the account in the following cases
a)Death of the customer.
b) Insolvency of the customer.
c) Insanity of the customer.
d) None of the above.

18. The relationship between the bank and the customer in the case of safe custody of articles is that of
a) Bailor and bailee
b) Lessor and lessee
c) Principal and agent.
d) Depositor and depositee.

19. The description of goods in the following documents should agree exactly with the description
in the letter of Credit
a) Bill of Lading. .
b) Commercial Invoice.
c) Packing Lists.
d) All of the above.

20. Consumer credit facilities are granted

a)To purchase consumables
b)To the traders to extend credit to their consumer
c)To individuals to acquire consumer durable.
d) To the importer for import of goods.

21. A customer of a bank is one

a) Who frequently visits the bank.
b) Who has transactions with the bank.
c) who has an account with the bank.
d) Who has no account with the bank, but likes to have one.

22. The banker's obligation to maintain secrecy of customers account

a) Arises out of an agreement between the parties.
b) Is statutory.
c) can be exempted by specific agreement.
d) None of the above.

23. An order cheque is one which

a) Orders the bank to pay the amount.
b) orders the payee to obtain payment on it.
c) Orders that no one other than the payee can obtain on it.
d) Is payable to the payee or his order.

24. The reason "Effects not cleared' is used for returning a cheque to indicate that
a) The customer has no balance in the account
b) The loan documents have not been executed.
c) Some items for the credit of customer's a/c have not yet been realized.
d) All of the above.

25. When the bankers undertakes the collection of bills or cheques for his customer, the
relationship is that of
a) A debtor and a creditor.
b) A bailor and an agent.
c) principal and an agent.
d) A trustee and a beneficiary.

26. Account payee crossing on a cheque indicates that

a).the paying banker should make payment only to the payee .
c) The collecting banker should collect it only for the payee.
c) The paying banker should render accounts to the payee.
d) None of the above.'

27. Travelers cheque are issued in

a) Single name.
b) Joint name.
c) Single as well as joint names.
d) None of the above.

28. Consumer's credit facilities are granted

a)To purchase consumables.
b) To the traders to extend credit to their consumers
c)To individuals to acquire consumer durables
d) To the importer for import of goods
C

29. To become a "full-fledged" customer of a bank a person should-

a) Maintain account with it for a period of 6 months
b) Maintain account with it for at least 1 month
c) Maintain a well introduced account
d) None of the above.

30. The general relationship between a banker and his customer is that of-
a) Debtor and creditor
b) Creditor and debtor
c) Lessor and Lessee
d) Agent and Principal

31. Endorsement of a negotiable instrument is done by -

a) The holder signing it
b)fihe drawer signing it
c) The holder or drawer signing it, letter other wise than as the maker
d) Anybody by sign in g it

32. The Paying banker does not get protection under NI Act for the payment of
a) Uncrossed cheque √
b) Cheque crossed "not negotiable"
c) Bearer cheque
d) Bank's payment order

33. Mortgage of an immovable property can be created -

a) For any obligation
b) Only to secure a debt
c) Only to secure an existing debt
d) Only to secure a bank advance √

34. On default of the borrower, the banker, under pledge, can sell the goods
a) Immediately
b) After issuing notice to the borrower √
c) If borrower agrees
d) After obtaining court order

35. Bill of exchange performs the functions -

a) Means to collect and demand payment √
b) Promise for and receipt of payment
c) Both a and b

36. Foreign currency includes -

a) Currency notes
b) All coins
c) Cheque
d) All of the above √

37. Source of demand for Forex comes from

a)Import payment and inward remittance
b) Export receive and outward remittance
c) Debt service √
d) None of the above

38. Which certificate is most essential for an importer -

a) IRC √
b) LCAF
c) Certified Invoice copy
d) All of the above

39. Which form is used for reporting outward remittance of Forex -

a) Form C
b) From TM √
c) From EXP
d) None of the above

40. Transction profile while opening the account to be filled be -

a) Customer √
b) Manager
c) Notary public
d) Banker's Lower

41. Certificate of commencement of business is required for opening the account of -

a) Partnership account
b) Minor's account
c) Public Limited account √
d) NRB account

42. How many prudential regulation under Small Enterprise Financing?

a)10
b) 13
c) 15
d) 20

43. Is a Public Limited Company can obtain SME loan-

a) No √
b) Yes
c) Variable
d) None the of these

44. Maximum clean loan can be allowed under Women Entrepreneur Loan category -
a) 3.00 Lac
b) 5.00 Lac
c) 15.00 Lac
d) 25.00 Lac √

45. Highest ceiling under SME Loan

a) 15.00 Lac
b) 30.00 Lac
c) 50.00 Lac
d) 100.00 Lac

46. What percentage of provision is required against unclassified loan under SME-
a)1%
b) 2%
c) 5%
d) 10%

0.25%

47. Which form is used for reporting outward remittance of Forex?

a)Form C
b)from TM √
c) From EXP
d) None of the above

48. A current account cannot be opened by -

a) Employees
b) Salaried persons
c) other than businessman √
d) None of the above

49. Introduction by the following persons is not generally accepted for opening a current account -
a) Staff members of the same branch
b) Staff member of another branch of the bank
c) A savings account holder who has been well introduced.
d)A fixed deposit holder who has no other account. √

50. A Joint account between the husband and wife can be opened operable be –
a) Either or survivor only
b) Former or survivor only
c) Joint or survivor only
d) Any of the above √

51. Negotiability means that the instrument -

a) Can be transferred
b) Can be transferred subject to defect in title of the holder
c) Cannot be transferred
d) Can be transferred free from defect in the title of the holder
52. Crossing of a cheque means -
a) Canceling the cheque
b) Putting the 'X' mark on the cheque
c) Drawing two parallel lines on the face of the cheque √
d) Drawing two parallel lines on the back of the cheque
53, The effect of the crossing a cheque is
a)The payee is compelled to open a bank account
b) The bank is to keep a separate account of such cheque paid
c) The payee will have to endorse the cheque to a bank
d) 'The payee can obtain payment only through a bank √

54, The holder in due course of a cheque does not get protection form
a) Irregularity of endorsement
b) Forgery of endorsement
c) Defect in the title of the previous holder √
d) None of the above

55, the clean advance is one

a)Which is free from any defect
b) Which is not covered by any tangible security? √
c) Which is not secured by any demand promissory note?

56. Generally repayment of consumer credit loans are expected from -

a) Income generated from utilizing the assets purchased √
b) Salary or any other source of income of borrower
c) Grantor

57. In a bill of lading, the consignee's name is mentioned as "to order", It means the goods will be delivered
to the order of -
a) Consignor
b) The bank √
c) The consignee
d) The shipping agent

58, under an acceptance the L/Co the responsibility of the nominated bank is -
a) Only to accept the bill
b)To pay against the bill
c) To accept the bill immediately and also to pay the amount of the bill on its due date √
d) To get the acceptance of the importer of the bill

59, The buyer and seller are in most disadvantageous situation respectively (while using a mode of payment)
in case of -
a) Open account and cash in advance
b) Documentary collection and clean collection
c)Documentary credit and documentary collection
d) Cash in advance and open account √

60. The essence of a "documentary credit" system is that -

a) Payment is to be made be importer
b) Payment is to be made by issuing bank
c) Payment is to be made by negotiating bank
d) Both A& B √

61. Confirmation of an LC can be done only at the request of -

a) Importer
b) Exporter
C)importer's bank
d) Exporter's bank√
e) All of above

62. An LC is silent regarding terms of payment. It thus indicates -

a) Irrevocable LC
b) Revocable LC
c)incomplete LC √
d) None of above

63. Multimodal transport documents covers -

a) At least two vessels of transportation
b) At least two mode of transportation√
c) Both A&B
d) Both A or B

64. A clean bill of lading does not incorporate -

a)Defective condition of the goods
b) Defective condition of the packets
c) Neat and clean in all respects
d) Both A& B
e) Both A or B√

65. A transferable LC can be transferred (unless otherwise specified) -

a) Only once and to only one party
b)only once and two or more than one party √
c) More than one time and to more than one party
d) All of the above

66. Which one is not a core party to documentary credit

a) The applicant
b) Beneficiary
c) Issuing bank
d) Consignor √
e) Consignees bank

67.The documentary credit is very popular all over the world because it -
a) Protects interests of buyer
b) Safeguarding financial claim of seller
c) .both A& B √
d) Facilitates financing
e) All of the above

68. Unless otherwise stipulate, a commercial invoice must be made out in the name of
a) Beneficiary
b) Issuing bank
c) Consignee √
d) Negotiating bank

69. Unless prohibited by L/C a bank can except -

a) Clause bill of lading
b) Received for shipment bill of lading
c) .Bill of lading that the carrying vessel is propelled by sail only √
d)None of the above

70. A state bill of lading is one -

a) Covering both land and water transport
b) The goods covered by which are deliverable to the consignee√
c) Which is sent directly to the consignee?
d) None of the above

71. The currency in which payment for an import is made depends upon -
a) The country from which the goods are shipped
b) The country of origin of goods
c)The arrangement between buyer and seller√
d) The bank with which the importer's bank has correspondent relationship

72. Drawing power in a CC account is determined within sanction limit on the basis of -
a) Value of existing stock of goods√
b) Value of collateral securities
c) Credit it needs of the borrower
d) None of the above

73. A bank can sanction a loan to a single party up to a maximum amount of -

a) 20% of its capital
b) 15% of its capital√
c) 10% of its capital
d)none of the above

74. One of the differences between OD and Cash credit is -

a) OD is subject to limit whereas CC has no limit
b) OD is allowed on any kinds of account whereas CC is allowed on current account
c) DO is allowed on current account whereas CC is separate account √
d) None of above

75. The documentary credit is very popular all over the world because it -
a) Protects interests of buyer
b) Safeguarding financial claim of seller
c) Both A.& B √
d) Facilitates financing
e) All of the above

76. While going advances to a partnership firm without any partnership deed, bank prefer to have the
following documents signed by all the partners-
a) Letter of partnership and letter of guarantee √
b) Letter of partnership and letter of authority
c) Letter of authority and letter of indemnity
d) None of the above

77. Lien, one of the modes of charging securities is the right to retain -
a) Goods and securities until debt are satisfied √
b) Property mortgaged to the bank
c) Both property and goods and securities
d) None of above

78. Which one is not the irregularity in sanctioning loans and advance -
a) . Over or under financing
b)Undue influence
c) Inadequate security stipulation √
d) Estimation of the cost of the project and means of finance
79. Execution of documents depends on -
a) Nature of advance
b) Types of charge
c) Nature of security
d)All of the above√
80. How many parties in a "Garnishee Order" -
a)03√
b) 05
c) 06
d) 20

81. Who is tile present president of World bank -

a)Angelo Kyoto
b)Robert zoelick
c) M Elbaradi
True or False of different Exams: .
1. Banker's usually refused to open account of
'Pardansheen women’True I False. F
2. An illiterate person can open an account with bank. true False. ,T
3. A partner has an implied authority to open a bank account on behalf of the firm in his own
name. True I False. F
4. The liability of a partner in a partnership concern is limited to the extend of his stake in the
firm. True /false F
5. A fixed deposit receipt due on a Friday or bank holiday may be paid on the previous
working day. True/false. F
6. A cheque marked Not Negotiable" is transferable True/False. T
7. A negotiable instrument is freely transferable True/False T
8. A Promissory Note can be l11ade payable to the bearer True/False. F
9. A bill of exchange cannot be made payable to e bearerbf1 demand. True I False. T
10. A cheque is always payable on demand true False. T
11. A cheque is a bill of exchange true/False T
12. A cheque is not a bill of exchange. True/ False.F
13. The drawee of a cheque is always a banker. True/ False.T
14. A minor can also draw an endorsee a negotiable instrument. True/ False. ,T
15. The title of tile holder in due course is always better than that of the transferor. True/
False.T
16. A negotiable instrument payable on del11and must be presented by the holder immediately
after its payment. True I False.T
17. A negotiable instrument payable on demand must be presented by the holder immediately after its
receipt. True/False. F
18. Granting of advance is the primary function of a bank. True I False T
19. The Overdraft facility is available in case of a savings bank account. True I False F
20.The credit Information Bureau (CIB) has been set up under the provisions of the Banking Regulation Act.
True/ False F
21. Banks are free to give loan against security of their own Shares. True /False F
22. Cash-Credit advances given by bank usually clean advance. True/False F
23. A NI is freely transferable. True/False T
24. A cheque is not a bill of exchange True/False F
25. ANI can also be assigned. True/False F
26. The protection to a collecting banker under NI Act is available only if the cheque is a
crossed one. True/False T
27. Crossing of a cheque can be opened be Payee of the cheque. True/False F
28. The payment of a bank draft can be stopped be the bank on receiving instructions from the
purchaser of the draft. True/False F
29. Purchaser of a traveler cheque need not be a customer of the bank. True/False T
30. "Certificate of commencement" of business is required at the time of opening a partnership
account. True/False F
31. There are three parties in a "Gamishee Order" True/False T
32. "Transaction Profile" has to be filled be the concerned customer at the time of opening an
account. True/False T
33. "Share" of different companies is a eligible security. True/False F
34. IMF has estimated that the magnitude of money laundering through the world's financial
system is about US$ 800 Billion every year. True/False T
35. A garnishee order issued by the court asked the debtor to pay the debt to the court.
True/False T
36. The bank has a right of general lien in respect of the amount due to it by the customer 37. T
The title of the holder in due course is always better than that of the transferor. True/False T
38. General acceptance and unqualified acceptance have synonymous meaning True/False F
39. Acceptance for honor can be given only in case of a bill of exchange. True/False T
40. Holder is a person who has got a NI for value. True/False T