ISMS – Banking Management-Account holder X draws a cheque for Rs. 5,000

Account holder X draws a cheque for Rs. 5,000

Banking Management

 

Q 1) Account holder X draws a cheque for Rs. 5,000 favouring Rajesh ( a minor aged 13 years ) or, bearer. Rajesh presents the cheque on counter duly signed on the back. What should the banker, do with the cheque of a minor?

(a) reafuse, since no contractual capacity

(b) pay the cheque after inquiring with X

(c) pay to Rajesh without any responsibility of bank

(d) ask Rajesh to bring his parents

(e) Section 26 N.I. Act, 1881, does not allow minor to receive payment

 

Q.2) payment in `due course` means?

 

  • on the due date

  • in accordance with apparent signature and specimen

  • in accordance with apparent tenor

  • due to sufficient funds

 

Q.3) One of the following statements in not true in the right of set-off?

 

  • set-off means partial or total merging of a claim of one person against another in a counter

claim of the latter against the former.

  • Both debts must be for certain sum.

  • A debt accruing due cannot be set-off.

  • A banker can set-off the credit balance in the guarantor’s account before the liability of the,
    guarantor to the bank is determined.

 

Q.4) Does RBI have the power to control or influence directly or indirectly the interest  rates of banks in India and if so, in what manner and to what extent?

 

Q.5) `Overseas Depository Bank` means?

 

  • a bank authorized by the issuing company to issue Global Depository receipts against issue,

of Foreign Currency convertible Bonds or ordinary shares of the issuing company.

  • A bank authorized by the government to issue Global Depository receipts against issue of,

Foreign Currency Convertible Bonds or ordinary shares of the issuing company;

  • A bank authorized by the issuing company to issue Global Depository Receipts against receipt of foreign Currency;

  • A bank where deposits in foreign currencies can be made

 

Q.6) The retail loans given by commercial banks are generally for duration of?

 

  • Five to seven years with housing loans granted for a longer duration of 15-20 years

  • Less than 5 years only

  • Less than 1 year only

  • None

 

Q.7) A revolving Letter of Credit is one which provides that the amount  of drawing stipulated in it will be available to the beneficiary:

 

  • Again and again as may be agreed between the buyer and the seller within a stipulated period.

  • Any number of times

  • Only one once

  • Non

 

 

Q.8) As per Basel II Framework, the total of Tier 2 capital is permitted up to a maximum of:

  • 100 per cent of Tier 1 capital

  • 250 per cent of Tier 1 capital

  • 80 per cent of Tier 1 capital

  • 50 per cent of Tier 1 and Tier 3 capital

 

Q.9) When the holder of an order Cheque sign on the back of it, without specifying the person to whom the amount is to be paid, it is called

 

  • Full endorsement

  • Partial endorsement

  • Conditional endorsement

  • Restrictive endorsement

  • Blank endorsement

 

Q.10) Difference between cash budget and cash flow

 

  • Cash flow deals with cash and non-cash funds.

  • Cash budget deals with cash transactions only.

  • Cash flow statements are generally for quarterly of half-yearly while cash budgets are for shorter periods.

  • Cash budget is a projection into the future while a cash flow statement is historical.

  • Any of the above

 

Q.11) Loan against minor’s term deposit

 

  • Can be granted if the documents are signed if the minor has completed the age of 14 years

  • Cannot be granted under any circumstances as the minor does not have the contractual capacity

  • Can be granted to the guardian of the minor, if it is for the necessities of the minor

  • Can be granted only with the permission of the Court.

 

Q.12) Impact of IT on banks can be

 

  • Change in organizational structure

  • Change in organizational orientation

  • Change in service delivery channel

  • Change in customer aspiration

  • All of the above

Q.13) A medium enterprise in service sector is one,

 

  • Where the investment in equipment is more than Rs.3 crore but does not exceed Rs 10 crore

  • Where the investment in equipment is more than Rs.2 crore but does not exceed Rs 10 crore

  • Where the investment in equipment is more than Rs.5 crore but does not exceed Rs 10 crore

  • Where the investment in equipment is more than Rs.2 crore but does not exceed Rs 5 crore

 

Q.14) Ritesh issued a cheque at 3:30p.m. (one hour after close of business hours of the bank ) to Shubha. Shubha approached to the bank and on request paid the money at 4:00 p.m. as late payment; Ritesh arrived to the bank and stopped payment of cheque issued to Shubha at 4:30 p.m. on the same day. Who is liable for loss?

 

  • Payment after business hours is not a payment in due course hence bank is liable, Section 10 N.I. Act.

  • Payment even though after business hours but within banking hours is protected under Section 31.

  • Payment late for today is protected under Section 85.

  • Refused to accept stop payment instructions since late for today.

 

Q.15) After close of business hours by 1.30 hrs. the account holder himself availed payment. At 4.15 p.m. (after close of 1.45 hrs) income tax attachment order is received by bank. What would be the liability of paying bank?

 

  • Payment is made in due course and as payment is debitable next day, bank is protected.

  • Payment is not in due course since paid after reasonable time (i.e.1.30 hrs. late for today).

  • Attachment order will be effective after bank’s right of lien over the late payment bank should approach the customer to get the order changed to next day.

 

Q.16) Tier 3 capital will be limited to:

 

  • 250 per cent of a bank’s Tier 1 capital that is required to support market risks.

  • 100 per cent of a bank’s Tier 1 capital.

  • 250 per cent of a bank’s Tier 1 capital.

  • None

 

Q.17) Under domestic factoring, the payment of the bills that the seller gets from the factor is:

 

  • 100 per cent of the value of the bills immediately on submission.

  • Nearly 80 per cent of the bill amount upon tendering the bill and the balance on due date.

  • Nearly 80 per cent of the bill amount upon tendering the bill and the balance on due date after collecting it from the buyer.

  • 100 per cent of the value of the bill only after collection from the buyer.

 

Q.18) What services are provided by merchant bankers? Are investment bankers and merchant Bankers, the same?

 

Q.19) A cheque drawn for Rajkumar or order is stolen. The thief made endorsement as Rajkumar on the cheque in his favour. The cheque is presented in clearing and paid by bank. What would be the liability of paying bank?

 

  • The paying bank will get protection under N.I. Act.

  • Forgery does not given any rights to bank, hence liable.

  • Under section 85, the paying bank is liable.

  • Under section 131, the paying bank is liable.

 

Q.20) Write in brief the role of Insurance Regulatory and Development Authority (IRDA)

 

Q.21) The difference between the credit and the debit card is:

 

  • Your account gets debited immediately on using a credit card

  • Your account gets debited immediately on using as a debit card

  • Your account does not get debited immediately on using a debit card

  • Non of the above

 

Q.22) Give at least eight examples of the priority sector. Also explain the rationale of PSA.

 

Q.23) On recommendation from Lahiri Committee, in 2004, SEBI passed a regulation that derivatives, Instruments like participatory notes against underlying Indian securities can be issued.

 

  • Only to regulated entities and further transfers, if any, can also be to other regulated entities only.

  • Only to foreign banks

  • Only to FIIs registered with SEBI

  • None

 

Q.24) As per SEBI guidelines, safety net arrangement can be made available only to;

 

  • All original resident individual allottees limited up to a maximum of 1000 shares per allottee

  • All original allottees limited up to a maximum of 1000 shares per allottee

  • All shareholders limited up to a maximum of 1000 shares per shareholder

  • None

 

Q.25) The primary legislation that deals with insurance business in India is:

 

  • Insurance Act, 1938

  • Insurance Regulatory and Development Authority Act, 1999

  • Both Insurance Act,1938 and IRDA Act,1999

  • LEC of India Act.

 

Q.26) One of the following statement is not true with respect to NEFT.

 

  • Funds are transferable electronically from one customer account of a participant bank branch to another customer account of any other participant bank branch.

  • The individual branches participating in NEFT can be located only in the urban/metro centres.

  • The remitting branch prepares a structured financial messaging solution (SFMS) message and sends it to its services center for NEFT.

  • The RBI at the clearing centre sorts the transactions bank-wise and prepares the accounting entries of net debit or credit for passing on to the banks participating in the system.

 

Q.27) One of the following statement is not true with regard to a locker facility in the bank.

 

  • In the case of a sole hirer of a safety locker, nomination can be in favour of only one individual.

  • A locker cannot be hired by limited companies, specified association and societies etc.

  • In the case of death of a sole locker-hirers (where there is nomination) access to locker may be given to the nominee.

  • Where there are joint locker-hirers having a contract of locker hire with a `either or survivor’ in case of death of one of the hirers.

 

Q.28) Is there any exposure ceiling for banks in providing advanced/loans to borrowers?

 

  • 15 per cent of capital funds for single borrower and 40 per cent in a borrower’s group.

  • 10 per cent of capital funds for single borrower and 20 per cent in a borrower’s group

  • 25 per cent of capital funds for single borrower and 50 per cent in a borrower’s group for infrastructural project.

  • No such ceiling.

 

Q.29) one of the following statements is not true with respect to credit cards.

 

  • The card issuing banks would not be responsible for fulfillment of KYC requirement where agents solicit business.

  • While issuing cards, the terms and conditions for issue and usage of a credit card should be mentioned in clear and simple language.

  • Card issuers should quote annualized percentage rates (APR) on card products.

  • The card issuing bank/NBFC should not unilaterally upgrade credit cards and enhance credit limits. Prior consent of the borrower should invariably be taken whenever there are any change (s) in terms and conditions.

 

Q.30) In the terms of section 19(2) of the banking regulation Act, 1949, `no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent of the paid-up share capital of that company or thirty per cent of its                  , whichever is less’. Shares held in a demat form should also be included for the purposes of determining the exposure limit.

 

  • Own paid up share capital and reserves.

  • Tangibal net worth.

  • Risk weighted assets.

  • Paid-up capital.

 

 

Need Answer Sheet of this Question paper, contact

aravind.banakar@gmail.com

ARAVIND – 09901366442 – 09902787224

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Share Button