QUESTION BANK- 1 FOR JAN 2019 EXAM

(courtesy: M.Chandra Sekhara Reddy, Retd AGM)

1. CERSAI defined in which Act: Ans: SARFAESI Act.

2. Under PMEGP scheme maximum project cost for service sector: Ans: Rs 10 lacs.
3. Protection to Collecting bank is available under which section of NI Act: Ans: Sec 131
of N.I. Act.
4. No collateral security up to the loan amount of Rs.____ in DAY-NRLM Aajeevika:
Ans: Rs.Upto 10 lacs.
5. Stand by L/c is similar to_____: Ans: Bank Guarantee
6. Maximum loan amount covered under CGTMSE is Rs._____: Ans: Rs 2 crore Fund
based+ non fund based
7. DSCR is for evaluating: Ans: Term Loan repayment (surplus generating capacity)
8. Current Ratio is used for evaluating _____: Ans: Liquidity position
9. Debt Securitization means: Ans: Conversion of receivables into debt instrument
10. Minimum Education qualification for PMEGP for Manufacturing Project Cost upto
Rs.10 lac and business/service enterprise upto 5 lacs: Ans: Nil
11. Break Even Point is _____ : Ans:No profit no loss. ( Total Revenue –Total Cost
=Zero)
12. Imports are regulated by _____ :Ans: Director General of Foreign Trade.
13. Current Account operated by Finance Director dies, Cheque signed by him presented
dated prior to his death: Ans: Will be paid
14. Banker customer relationship in standing instruction: Agent – Principal
15. Under Right To Information Act, Person seeking information need not give reason as
to : Ans: Why he is seeking the information.
16. What is time limitation for decree: Ans: 12 years.
17. CIN in case of a company indicates : Ans: Corporate Identity Number.
18. Partnership firm not registered. What is the consequence: Ans: Partnership firm
cannot file the suit on anybody.
19. Classification of NPA in consortium advances: Each bank will classify according to its
own record of recovery.
20. SARFESAI proceeding in a consortium advance if: 60% of creditors due agree
21. What is Deferred Payment Guarantee (DPG) and what is the difference between Term
Loan and DPG: Ans: DPG is issued for the purchase of capital goods in favour of
machinery suppliers who agrees to sell machinery for payment in installments
guaranteed by the bank. The appraisal of TL and DPG is very similar. The only
difference is the outlay of funds.
22. When is customer day celebrated: Ans: 15th of each month.
23. Loans to Farmer Against Pledge / Hypothecation of Agriculture Produce, under Priority
Sector ( post harvest marketing scheme ): Rs.50 lakh for a period of 12 months.
24. Loans to individuals for Educational purpose- What is the amount considered under
Priority Sector: Ans: Rs.10 lacs (irrespective of loan amount) for inland studies &
abroad studies.
25. How much inward remittance can be credited to EEFC a/c: Ans: 100% of export
proceeds.
26. Rupay Platform refers to: National Payments Corporation of India has launched RuPay
card with the intention of integration of payment systems in the country. It has led to
lower transaction cost as processing is being done within country.
27. What is the liability of members of HUF if Karta incurred debt? Ans: Coparceners are
liable to the extent of their share.
28. Whether ‘WILL’ has to be registered? Ans: Not required
29. Guardian appointed by ‘Will’ of father for his Minor child is called as: Ans:
Testamentary Guardian
30. What will be the effect on the nomination if nominee expires before the death of the
Account holder: Nomination automatically stands cancelled
31. If a cheque is returned unpaid due to insufficiency of funds, the punishment under Sec
138 of N.I. Act, which can be imposed under regular proceedings is _____: Ans:
Imprisonment of 2 years and / or penalty upto the double the amount of cheque.
32. Mortgage deed is valid for a period of : Ans: 12 years.
33. Safe deposit locker holder has died. The nominee approaches for taking the contents.
You find a sealed box among other things. How will you handle the situation: Ans: As
per the procedure the bank prepares the inventory. Bank is not required to open sealed
packet while releasing them to the nominee.
34. The extent of coverage under CGTMSE for Micro units up to Rs 5 lacs is ______: Ans:
85% with maximum amount of claim upto Rs 4.25 lacs.
35. Unspent Foreign Currency to be surrendered within: 180 days of return from Abroad.
36. Interest @ ____ is given by RBI on CRR balance maintained by banks: Ans: Nil.
37. Implied authority of a partner does not allow ______ singly? Ans: Settle a dispute
relating to the business of the firm through arbitration.
38. What is the risk weight in case of Staff loan secured by mortgage or superannuation
benefits: Ans: 20%
39. Bailment of goods for securing a repayment of loan is called: Ans: Pledge.
40. If _______ number of counterfeit notes are detected in single transaction, a
consolidated report sent to police station on monthly basis: Less than 5.
41. Employee Stock Option Scheme (ESOP) - Loan up to Rs. _____ can be given to
employees. Ans: Rs.20.00 lakhs (Margin-10% only)
42. Certificate of Incorporation refers to: Birth certificate for a Company issued by ROC.
43. Accrual concept of Accounting: Ans: Transactions are recorded as and when they
become due irrespective whether actually received / paid or not.
44. Negative Lien refers to: Undertaking given by the company not to create any charge /
not to get the assets encumbered to any other bank during the currency of bank
borrowings.
45. Guarantor on payment of all dues of principal debtor, gets which right as that of
creditor? Ans: Right of Subrogation.
46. Nominee can claim payment when: Ans: Only after the death of depositor as a trustee
of legal heir.
47. A foreign tourist who is in India and is having USD 5,000 wants to open a/c. Which type
of deposit account he can open: Ans: NRO for a maximum period of 6 months.
48. Special Crossing - what is essential: Ans: Bank's name must appear with or without
two parallel lines.
49. Agent dies - Cheque signed by him presented for payment: Ans: Can be paid as for all
acts of agent, principal is liable.
50. Financial Director dies - Cheque signed by him presented for payment: Ans: Can be
paid as he has signing in representative capacity.
51. If Garnishee Order does not specify any amount, it will be applicable or not: Ans:
Applicable and full amount in the a/c will be attached.
52. Guarantee given by a minor: Cannot be ratified even when he becomes major.
53. Holders of 'Basic Savings Bank Deposit Account' will not be eligible for opening any
other savings account in that bank. If a customer has any other existing savings
account in that bank, he will be required to close it within: Ans: 30 days from the date
of opening a 'Basic Savings Bank Deposit Account'.
54. For creation of Equitable Mortgage on Agricultural land, property is to be located at:
Ans: Any where in India:
55. A financial product, which is deriving its value from another financial product, is called
__________: Ans: Derivative.
56. The legal liability to file charges with ROC in case of lending to a Company is that of
______: Ans: Borrowing Company.
57. Mortgage is transfer of interest in: Immovable property and not transfer of property
58. To reduce its foreign currency risks in case of overdue Export bill, bank should do: Ans:
Crystallization.
59. The appraisal of Deferred Payment Guarantee is same as that of: Ans: Term Loan
Appraisal.
60. What is the limitation period when Govt. wants to take legal action for recovery of its
dues: Ans: 30 years.
61. When a farmer in addition to agriculture is engaged in rearing of farm stock, it is called:
Ans: Mixed farming.
62. Minimum and maximum period for FCNR(B) accounts: 1 year and 5 year (USD,GBP
and Euro) 3 years for AUD and CAD.
63. What is the date for final implementation of Basel III? Ans: 31.03.2019.
64. Safe custody of Articles comes under which Act: Ans: Indian Contract Act.
65. Debt Swap meaning: Ans: To extend finance to farmers/poor for repayment of loan
taken from non-institution lenders.
66. Provision on secured Sub-Standard Loan: Ans: 15% of outstanding.
67. CGTMSE set up by: Ans: Govt. of India and SIDBI (80:20)
68. Maximum amount of claim that can be filed with Lok Adalat: Ans: Rs. 20.00 Lac and
above Rs.20 lac in Lok Adalat formed by DRT.
69. Eligible Amount of suit in DRT: Ans: Rs.20.00 Lac & above.
70. Bank is not required to produce original book of records but true copy can be submitted
when court has demanded as per which Act: Ans: Bankers Book of Evidence Act.
71. Outstanding in a CC account is Rs.2.00 lakhs. One of the partner died and the
operations were continued in the account by the bank inspite of notice of the death
given to the bank. Later, Rs. 2.50 lakh was deposited and Rs.1 lakh was withdrawn?
What is liability of legal heirs of the deceased partner: Ans: NIL as per Rule in Claytons
case.
72. RBI grant the loan to Banks against Govt Securities at : Ans: Repo Rate.
73. Beneficial owner under KYC can be a body of individual persons, a natural person,
who, whether acting alone or together, or through one or more juridical person,
exercises control through ownership or who ultimately has a controlling ownership
interest of : Ans: 15%.
74. Non-profit organizations are catergorized in which risk category as per new KYC and
AML guidelines : Ans: High Risk.
75. Net working Capital = Current Assets minus Current Liabilities.
76. Garnishee order is not applicable to: CC/OD with debit balance
77. Shortfall in PS advance target, amount to be deposited in: RIDF or invested in Priority
Sector Lending Certificates
78. Long duration crop means a crop with harvest season of: More than 12 months.
79. Loan to MSME without collateral: Ans: Rs.10.00 Lac
80. Mr.A was a loanee of the branch and news has come that he has expired. On enquiry,
it was observed that he left some assets. Upto what extent the legal heirs are liable to
the Bank? Ans: Legal heirs are liable for the liabilities upto the assets inherited by
them.
81. What is Phising: Ans: To steal the customers personal / confidential data like Bank a/c
number, Credit Card Number, PIN or Password over internet & access their accounts.
82. Difference between Import and Export is called: Ans: Balance of Trade
83. Appeal against Award given by Lok Adalat can be made to: No appeal to any court
against decision of Lok Adalat since the decree in Lok Adalat is with mutual consent.
84. As per UCPDC how much time is allowed to Issuing Bank and Negotiating Bank for
scrutiny of documents: Ans: 5 banking days following the date of receipt of documents
85. Maximum loan for Social Infrastructure under Priority Sector: Ans: Rs. 5 crores
86. NULM Funding sharing ratio: Ans: 75% by Central Govt. and 25% by state Govt.
87. Banks are required to inform about the Wilful defaulting borrower if the loan amount is
: Rs 25 lac and above and information to credit information company of which bank is
member.
88. When a term loan for more than 3 years is sanctioned by the bank the major risk is
________: Liquidity risk (due to ALM mismatch).
89. International Financial Reporting System (IFRS) being implemented: For comparison
of financials of companies operating in two different international jurisdictions.
90. As per the Task Force committee headed by T.K.A. Nair, the banks to achieve annual
growth of _____% in Micro enterprise accounts: Ans: 10% p.a.
91. When an account guaranteed by Central Govt. will become NPA ?: Ans: As per
prudential norms of RBI, when the Central Govt. repudiates its guarantee.
92. Inoperative accounts comes under _____ risk: Ans: Medium Risk.
93. Minimum capital required for Small Finance Bank and Payment Banks is Rs. _______:
Ans: Rs.100 crores.
94. KYC day is observed on _______: 1st August
95. Encryption means: Conversion of plain language into secret language
96. Cluster based approach is applicable for: Ans: SME
97. What is Hybrid debt instrument? Ans: Convertible Bonds