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)