MODEL QUESTIONS
PRINCIPLES OF BANKING – MODULE A & B
1)
Reserve
Bank of India’s functions are classified into:
a)
Supervisory
& Regulatory
b)
Promotional
& Developmental
c)
Refinance
Activities
d) All of the above (d)
2)
Minimum
Bank Rate is:
a) 3%
b) 4%
c) 5%
d) None (d)
3)
Sec
---- of RBI Act,1934 gives sole power to
RBI to issue currency notes
a) 10
b) 18
c) 22
d) 26 ( c )
4)
KYC
means
a)
Know
Your Customer very well
b)
Know
Your existing Customer very well
c)
Know
Your prospective Customer very well
d) Satisfy yourselves about the
customer’s identity and activities. (d)
5)
In
a Garnishee Order, the banker on whom garnishee order served is:
a) Judgement Debtor’s
Creditor
b) Judgement Creditor’s
Creditor
c) Judgement Creditor’s
Debtor
d) Judgement Debtor’s
Debtor (d)
6)
Sec
131 of NI Act,1881 extends protection to the
a) Paying Banker
b) Collecting Banker
c) Advising Banker
d) Issuing Banker (b)
7)
Hypothecation
is applicable in the case of
a) Movable goods
b) Immovable property
c) Book debts
d) Corporate guarantee (a)
8)
A
cheque is dated 12/05/05.the due date is:
a) 12/08/05
b) 14/09/05
c) 12/11/05
d) None (d)
9)
Charge
created on LIC Policy is:
a) Hypothecation
b) Pledge
c) Assignment
d) Mortgage ( c )
10) Your bank grants a working capital finance to
ABC & Co, a partnership firm, against hypothecation of inventory. The charge is to be registered
with Registrar of Companies within
a) 30 days from the date of advance
b) 30 days from the date of hypothecation agreement
c) 30 days from the date of sanction of
loan
d) None (d)
11) Which one of the following is not
barred by law of limitation?
a) Pledge
b) Hypothecation
c) Banker’s lien
d) Guarantee (
c )
12) The term “Credit Management” covers
a) Capital adequacy norms
b) Risk management including Asset/Liability management
c) Credit appraisal – decision and review of loans & advances
d) All of the above (d)
13) Bank’s Assets are classified in to
standard assets, substandard assets doubtful assets and loss assets, based on
the recommendations of -------------------- Committee
a) Rangarajan
b) Narasimham
c) Ghosh
d) Tandon (b)
14) The time taken to convert cash into
raw materials, semi finished goods, finished goods and into cash , is known as
a)
Trade
cycle
b)
Cash
cycle
c)
Operating
cycle
d) Revolving cycle ( c )
15) A company which pools money from
investors and invests in stocks,
bonds, shares is called
a) A bank
b) An insurance company
c) Bancassurance
d) Mutual Fund (d)
16) Bancassurance is
a) An
insurance scheme to insure bank deposits
b) An
insurance scheme to insure bank advances
c)
A
composite financial service offering
both bank and insurance products
d) A bank deposit scheme exclusively for employees
of insurance companies ( c )
17) John & James are friends aged 14
& 15 respectively. They want to open a joint account in your bank. You will
a) Allow them to open a joint account to
be operated jointly
b) Allow them to open a joint account
with operating instructions Either or Survivor
c) Allow them to open a joint account
with operating instructions Former or Survivor
d)
Allow them to open a joint account with operating instructions Any one
or
Survivor (a)
18) Mr.Atmaram as director of a Ltd
company expired. Bank received a cheque signed by Mr.Atmaram as director of the Ltd company. The bank
a) Can honour the
cheque only after obtaining confirmation from other directors
b) Can honour the
cheque
c) Cannot hounour the
cheque
d) The company should
issue a stop payment instructions to the bank
(b)
19) Tele banking service is based on
a) Virtual Banking
b) Online Banking
c) Voice processing
d)
Core
Banking ( c )
20) In a securitisation deal, the role
of a Special Purpose Vehicle (SPV) is
a)
To
acquire large Non Performing Loans (NPA)
b)
To
acquire such loans from a bank or financial institution
c)
To
acquire such loans for a transfer price, with or without recourse
d) To manage the acquired loans for the purpose of realization or holds them as investment till
maturity (d)
21)Securitisation is a process of
acquiring the loans classified as
a) Bookdebts
b) Performing debts
c) Bad debts
d) Non performing debts (d)
22)The minimum percentage of Priority Sector advances to be
maintained by foreign banks in India
a) 40%
b) 18%
c) 32%
d) 60% ( c )
23) Loan for fish rearing is covered
under Prirority Sector as ----------- advances
a) Direct
Agriculture
b) Indirect
Agriculture
c) Self
Employment Scheme
d) Allied
to indirect Agriculture (a)
24) Cash Budget is a statement of
a) Cash-Non
cash funds
b) Cash
receipt and Cash payments
c) Another
name for cash flow
d) None (b)
25) In bank’s parlance credit risk in
lending is
a) Default
of the banker to maintain CRR
b) Default
of the banker to maintain SLR
c) Default
of the banker to release credit to the customer
d) Default
of the customer to repay the loan (d)
26) The apex institution which handles
refinance for agriculture and rural development is called:
a) RBI
b) SIDBI
c) NABARD
d) SEBI ( c )
27) Long Form Audit Report (LFAR) is
prepared and submitted by
a) RBI
inspectors
b) Internal
inspectors
c) Statutory
auditors ( c )
d) Concurrent
auditors
28)
As per FIMMDA’s guidelines, the Mid-Office is responsible for:
a)
Dealing activities
b)
Risk Management
c)
Reconciliation
d) Confirmation of deals (b)
29)
Interest is calculated on actual/365 days basis in respect of the
following products, except one :
a)
Call
Money
b)
Notice
Money
c)
Term
Money
d) GOI dated securities (d)
30)
Which was the first Mutual Fund started in India:
a) SBI Mutual Fund
b) Kotak Pioneer Mutual Fund
c) Indian Bank Mutual Fund
d) None of the above (d)
31)
The regulator for Mutual Funds in India is:
a) FIMMDA
b) AMFI
c) RBI
d) SEBI (d)
32)
FIMMDA’s general principles and procedures are applicable to:
a) Fixed Income Markets
b) Money Markets
c) Derivatives Markets
d) All of the above (d)
33)
Your bank’s customer XYZ Ltd, enjoys a
CC limit of Rs.1,00,000.00
The CC account shows a credit balance of
Rs,10,205.00.
The relationship between your bank and
XYZ Ltd is:
a)
Debtor/Creditor
b)
Creditor/Debtor
c)
Bailor/Bailee
d) Bailee/Bailor (a)
34)
The right of set-off is:
a) Customer’s Right
b) Customer’s Obligation
c) Banker’s Right
d) Banker’s Discretion (d)
35)Which
of the following forms of business are
permissible under BR Act:
a) Borrowing
b) Issuance of Letters of
Credit
c) Buying and selling of bullion
d) All of the
above (d)
36)
A Co-Operative Bank operating in different States are regulated by:
a) State Co-Operative Societies Act
b) Banking Regulation Act
c) Multi Unit Co-Operative Societies
Act
d) Banking Laws (applicable to
Co-Operative Societies) ( c )
37)
In respect of Regional Rural Banks, the
share holding pattern is:
a) Central Government 50%,State
Government 35%,Sponsoring Bank 15%
b) Central Government 50%,State
Government 15%,Sponsoring Bank 35%
b) Central Government 15%,State
Government 35%,Sponsoring Bank 50%
b) Central Government 35%,State
Government 50%,Sponsoring Bank 15%
(b)
38)
Law of limitation is not applicable in respect of :
a) Advance against pledge of shares
b) CC granted against hypothecation of
inventory
c) Term loan secured by mortgage
of Plant & Machinery
d) Bank Term Deposit (d)
39)
A bank in India, wants to undertake capital market activities, it should:
a) Obtain special license from AMFI
b) Obtain special license from FIMMDA
c)
Both a and b
d)
Register with SEBI (d)
40)
FIMMDA stands for:
a) Foreign Exchange Markets and Derivative
Markets
b) Fixed Income Markets Money Markets and
Derivatives Markets
c) Fixed Income Markets and Derivatives
Markets
d) None of
the above (b)
41) The Capital Adequacy Ratio is :
a) 6%
b) 8%
c) 9%
d) 10% ( c )
42) Except one of the following others are known as Non Fund
based facilities:
a)
Letters of Credit
b)
Bank Guarantees
c)
Co-acceptance of Bills
d)
Trust Receipt (d)
43) FIMMDA’s guidelines
cover the following products, except one:
a)
Call Money
b)
Cross Currency Interest Rate swaps
c)
Commercial Paper
d)
Certificate of Deposit (b)
44) Except one of the following others are part of Public
Sector Banks:
a)
State Bank of Hyderabad
b)
Central Bank of India
c)
Regional Rural Bank, sponsored by a nationalized bank
d)
HDFC Bank (d)
45) A banker is expected
to honour the cheques within the specified banking hours as per Section of NI
Act,1881
a)
22
b)
25
c)
31
d) 65 (d)
