Model Paper-I [LRAB]

1) ....... is the primary regulator of banking business:

2) Banks can refuse to permit opening an a/c of:
3) Acceptance of deposits by non-banking financial companies is regulated
by RBI under:
4) A Non-banking financial company wanting to collect public deposits is
governed by act.
5) The term 'Customer' is defined under:
6) Companies whose principle business is not finance or lending are
permitted to accept deposits under Sec. 45(s) of RBI Act only from:
7) Every banking company is required to use the word 'Bank' in its name
and no company other a banking company can use the words 'bank, banker
or banking' as a part of its name as per:
8) Under the general provision of loss reserves maximum of......... % of total
risk weighted assets qualify for ........... capital:
9) Section 10 (A) of the B.R. Act stipulates ......... of Banking: Company:
10) What is the maximum tenure for a part time director of a banking
company including extension?
11) The whole time CMD of the bank shall hold office for a period not
exceeding:
12) Garnishee order will not attach ......... of CC limit:
13) The relation between a banker and a customer in the case of safe
deposit lockers is that of a Lessor and a lessee. The right of lien therefore
........ :
14) The right of Set-off can be exercised only when the relationship between
the banker and the customer is that of:
15) A Banker can exercise the right of Set-off only in respect of:
16) Right of Set-off cannot be exercised by the Bank in respect of .........
debt:
17) In an overdraft account, when the notice of death of the partner is
received, the bank should stop the operations to avoid application of .........
:
18) Act acts deals with the right of Appropriation:
19) Your branch has sanctioned a Demand Loan against FDR. When can the
right of Set-off be exercised?
20) Any payment made by a debtor in the first instance is to be applied
towards satisfaction of ........ :
21) ........ is the Garnishee in & Garnishee Order:
22) Garnishee Order" is issued under:
23) Garnishee Order attaches:
24) Bank should stop operations in the judgment debtor's a/c upto amount
mentioned and allow the operations for balance amount if a .......... is
served:
25) The Garnishee order will be applicable only when the banker and
customer would be having following relationship:
26) SLR can be maintained in..........
27) The definition of ........ is given under Section 85-A of the N.I. Act:
28) For availing remedy under Section 138,-holder will have to give notice to
the drawer:
29) How many times a negotiable instrument can be negotiated:
30) .......... is not bound on a negotiable instrument as drawer, acceptor or
endorser:
31) Cheque is a ........ :
32) A bill drawn in Paris in favour of a trader in Mumbai and payable in
Chennai is:
33) Under COPRA, there is a ......... approach to Redressal:
34) A person who is, or who has been, or is qualified to be .......... can be
its President in District forum:
35) The Right to Information Act came to force on .........
36) What does "Right to Information" mean?
37) A cheque drawn in two languages/ handwriting is presented to the
drawee bank. Is the cheque in order........
38) ......... also includes bodies constituted by notification issued or orders
made by the appropriate Government, body owned, controlled or.
substantially financed by Govt, and NGO substantially financed directly or
indirectly by the appropriate Government:
39) What is the time limit to get the information I rejection from PIO in case
no third party information is involved?
40) Bailee has the right of ........ in a bailment contract:
41) Safe custody is a contract of bailment, here the banker's general lien
.........
42) Bailment can be Gratuitous or Non-gratuitous bailment. A Nongratuities
bailment is one where there is ........ :
43) A person who comes by an article is not obliged to pick it up. But if he
does so, he becomes a .......... :
44) Delivery of bailed goods to the Bailee may be actual or ......... :
45) In the case of a pledge, the Pawnee does not have the right ....... the
pawned goods:
46) In a pledge delivery may be:
47) When a key cash credit is extended to a customer, the delivery is:
48) When a bank lends against pledge of goods to a Limited Company, the
charge on the goods need not be registered as the goods are in......... and
the bank has the right to sell in case of default:
49) The relationship between agent & the principal can be created by:
50) Who can employ an agent?

Answers:
1) Reserve Bank of India
2) Undesirable persons
3) Non-banking Financial Companies Acceptance of Public Deposits (Reserve
Bank) Directions, 1998.
4) Companies Act 1956
5) KYC guidelines
6) Relatives in the form of loans
7) Section 7 of Banking Regulation Act
8) 1.25, Tier II
9) Qualifications for the direct
10) 8 years
11) 5 years
12) Undrawn portion
13) Does not apply
14) Debtor and creditor
15) Debts due and determined
16) Contingent debt
17) Clayton's Rule
18) indian Contract Act
19) On maturity
20) lnterestdue
21) Bank
22) Rule 46 of Order XXI of the Schedule to the code of Civil procedure
1908.
23) Credit balances available at the time of serving the order to bank.
24) Order Nisi
25) Debtor-creditor
26) Cash, Gold and Approved securities
27) Demand draft
28) Within 30 days of return of cheque.
29) No limit within validity
30) A lunatic, an alien enemy, an insolvent and a Minor
31) Bill of Exchange
32) A foreign bill
33) Three tier
34) A District Judge
35) 12th October, 2005 (120th day of its enactment).
36) Right to inspect works, documents, records to take notes, extracts or
certified copies of documents or record and to take certified samples of
material.
37) It can be paid, if otherwise in order
38) Public Authorities
39) Within 30 days of the receipt of the request.
40) Lien
41) Doesxjot apply
42) Consideration
43) Bailee
44) Constructive
45) Use the pawned g
46) Actual or Constructive
47) Actual
48) Actual possession
49) Express agreement or Implied Contract
50) A person who is a major and is of sound mind



















Model Paper-I [AFB]
01) If depreciation is not charged, Profit & loss a/c will show:
a) More profits
b) Less profits
c) Nominal profits
d) Original profits

02) A public company having a share capital:
a) Must issue a prospectus
b) Cannot file a statement in lieu of prospectus
c) May file a statement in lieu of prospectus
d) Doesn't need prospectus

03) Share premium is used for:
a) To issue fully paid bonus shares
b) To write off preliminary expenses
c) To issue shares at discount
d) Both a & b

04) In which method amount of depreciation decreases every
year:
a) Straight line method
b) Written down value method ,
c) Annuity method
d) Sinking fund method

05) Shares can be issued at discount within..........month of
sanction of Company Law Board:
a) 1 b) 2 c) 4 d) 5

06) Discount on issue of share is a a/c:
a) Real
b) Nominal
c) Personal
d) Loss

07) If Dissolution expenses are paid by any partner, then they
are transferred to:
a) His capital a/c
b) Cash a/c
c) Bank a/c
d) None of these

08) Trading account is a:
a) Personal a/c
b) Real a/c
c) Nominal a/c
d) None

09) At the time of death of a partner, his total share is given to:
a) His loan a/c
b) His executor a/c
c) His capital a/c
d) His current a/c

10) Liabilities in a company are of Rs. 80,000 and owner's
equity is Rs. 70,000. What is the amount of total equity?
a) Rs. 80,000
c) Rs. 10,000
b) Rs. 70,000
d) Rs. 1,50,000

Answers:
1-a, 2-c, 3-d, 4-b, 5-b, 6-b, 7-a, 8-c, 9-b, 10-d


11) Goodwill on two years purchase of the average profit of
last three years profits of 20,000,10,000,15,000 is:
a) Rs 50,000
b) Rs. 30,000
c) Rs. 45,000
d) Rs. 40,000

12) The minimum subscription is to be received in:
a) 45 days
b) 120 days
c) 130 days
d) 50 days

13) R, N, S share profits in 5:3:2. If N retire then new ratio of R
and S is 2:3. Gaining ratio is ......... :
a) 1:1
b) 1:4
c) 0:4
d) 4:0

14) Bills receivable endorsed are debited to:
a) B/R a/c
b) Debtors a/c
c) Creditors a/c
d) Drawer a/c

15) Sacrificing ratio is calculated at the time of:
a) Admission
b) Retirement
c) Death
d) None

16) On the admission of a partner, decrease in the value of
machinery is debited to:
a) Revaluation a/c
b) Machinery a/c
c) Old partner's capital a/c
d) Depreciation a/c

17) A firm earning losses and is in dissolution process, have:
a) Nominal goodwill
b) Full value of goodwill
c) Goodwill equal to share of partners
d) No goodwill

18) When all partner's are insolvent, the loss is then borne by:
a) Government
b) Creditors
c) Partners
d) Firm collectively

19) Short term loans are due for payment within:
a) 6 month
b) 1 year
c) 2 year
d) 30 days

20) Dividends are usually paid on:
a) Called-up-capital
b) Subscribed-capital
c) Paid-up-capital.
d) Issued capital

Answers:
11-b, 12-b, 13-c, 14-c, 15-a, 16-a, 17-d, 18-b, 19-b, 20-c

21) Profit on re-issue of forfeited shares is transferred to:
a) Profit and loss a/c
b) Capital Reserve a/c
c) Share capital a/c
d) General reserve a/c

22) Book of accounts of a bank includes:
a) Current a/c ledger
b) Investment ledger
c) Loan ledger
d) Bill discounted ledger
e) All of above

23) The purpose of depreciation is to:
a) Reduce fixed assets
b) Save income tax
c) Reduce fixed assets to nil
d) Allocate the cost

24) Accounts in banks are closed on ......... every year.
a) 31 Dec. b) 31 Mar. c) 30 June d) 31 July

25) Partnership is a form of business organisation in which
business debts can be recovered from:
a) The partners
b) All the managers
c) The firm
d) The firm and all the partners

26) Which of following is contingent liability?
a) Claim against company not acknowledged as debt
b) Unpaid liability of shares
c) Arrear of fixed cumulative dividend
d) Contracts remaining to be executed
e) All above

27) Purchase a/c always have a:
a) Debit balance
b) Credit balance
c) Either debit or credit balance
d) None

28) Error of principle are committed due to:
a) Incomplete knowledge of capital & revenue expenditure
b) Incomplete recording of amount
c) Incorrect balancing of ledger a/c's
d) Wrong posting in ledger

29) Insurance unexpired is a:
a) Personal a/c
b) Real a/c
c) Nominal a/c
d) Both a & b

30) Depletion is used in relation to:
a) Plant and Machinery
b) Good-will
c) Stock in trade
d) Mines

Answers:
21-b, 22-e, 23-d, 24-a, 25-d, 26-e, 27-a, 28-a, 29-a, 30-d
31) Opening Stock includes:
a) Stock of raw material
b) Work in progress stock
c) Finished goods
d) All above

32) A and B are partners in the ratio of 7:3. C is admitted for
2/7th share of profits. What is the new ratio?
a) 7:2:2 b) 7:3:2 c) 7.4.5 d) 7 3,4

33) Direct expenses form a part of .........
a) Selling & distribution expenses
b) Goods manufactured
c) Administrative expenses on sales
d) Goods purchased and manufactured

34) M and N are partners in the ratio of 3:2. Q is admitted and
the new ratio is 4:3:2. What is the sacrificing ratio?
a) 3:2 b) 4:3 c) 7:3 d) 4:5

35) Gross profit is calculated as:
a) Net sales - Loss
b) Sale x Rate of G.P/100
c) Net Profit - Expenses
d) Both a & b

36) Purchase of machinery for cash, results in:
a) Decrease in total assets
b) Increase in total assets
c) No change in total assets
d) Increase in liability

37) Rate of depreciation in reducing balance method is:
a) High , b) Moderate c) Low ' d) 5%

38) If an asset is sold on 30 June while the accounts are closed
on 31 Dec., then depreciation is calculated for:
a) 1 year
b) 6 month
c) 1 month
d) 5 month

39) The accounting year of banks ends on:
a) 31st March
b) 30th June
c) 31st December
d) 31st July

40) Discount received in advance is a:
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None

Answers:
31-d, 32-d, 33-d, 34-c, 35-d, 36-c, 37-a, 38-b, 39-c, 40-b
41) Dual concept records transaction on bases of:
a) Single entry system
b) Double a/c system
c) Double entry system
d) All of these

42) Which of the following is an accounting equation?
a) Assets = Liabilities
b) Assets = Equity - Liability
c) Assets = Capital + Liabilities
d) Liability = Asset + Capital

43) In Dissolution payment is made:
a) To the outsiders
b) Capital of partner
c) Partner's loan
d) Any balance

44) If partner has debit balance of capital a/c, then:
a) Debit side of capital a/c
b) Credit side of capital a/c
c) Credit side of current a/c
d) Debit side of current a/c

45) Salary payable is a:
a) Liability b) Expense c) Asset d) Revenue

46) Solvency means:
a) Financial soundness of business
b) Financial unsoundness of business
c) Capital position of business
d) None of these

47) Creditors are included in:
a) Fixed liability
b) Current asset
c) Current Viability
d) Loan capital

48) Net profits are considered as:
a) Remuneration of enterprise
b) Salary to Manager
c) Remuneration to partner only
d) Gross income

49) Goods given as charity of Rs 500 are:
a) Credited to charity a/c
b) Debited to purchase a/c
c) Debited to charity a/c
d) Credited to purchase a/c
e) Both c and d.

50) Expenses proprietor equity:
a) Increase
b) No effect
c) Changes
d) Decrease

Answers:
41-c, 42-c, 43-a, 44-a, 45-a, 46-a, 47-c, 48-a, 49-c, 50-d

51) Decrease in asset is credited but decrease in capital
a) Credited
b) Debited
c) Either a or b
d) None

52) Goods are returned:
a) Due to defect
b) Due to delay in dispatch
c) Due to violation of item
d) Any of these

53) Journal proper records:
a) All transaction
b) Credit transactions
c) Transaction not recorded in subsidiary books
d) Cash transactions in any subsidiary book

54) If furniture is purchased on credit then it be shown in:
a) Debit side of cash book
b) Not shown in cash book
c) Credit side of cash book
d) Either a) or b)

55) Excess of credit side over debit side is called:
a) Credit balance
b) Debit balance
c) Over draft only
d) Either b or e

56) All liabilities has ........ 2. opening balance:
a) Debit
b) Credit
c) None
d) Only a

57) Withdrawal from bank can be made through:
a) Pay-in-slip
b) Deposit slip
c) Cheque
d) Cash

58) When a cheque is deposited in bank, bank will our a/c:
a) Credit
b) Debit
c) Add
d) Subtract

59) Underwriting commission on share issued by banking
company can't exceed:
a) 2V2 of paid up capital
b) 2% of paid up capital
c) 3% of paid up capital
d) 2 1/2 of called up capital

60 ) ........ is the whole time servant of bank.
a) Director b) Chairman c) Manager d) Member


Answers:
51-b, 52-d, 53-c, 54-b, 55-a, 56-b, 57-c, 58-a, 59-a, 60-b


61) Debit the debtor and credit the creditor' rule apply to:
a) Real A/c b) Personal a/c c) Nominal a/c d) None

62) In double entry system, credit means:
a) Decrease in loss
b) Increase in asset
c) Decrease in capital
d) Increase in expenses

63) Narration starts with word:
a) To b) By c) Being d) With

64) Cash discount is allowed at time of:
a) Payment b) Purchase c) Sale d) None

65) Which of following is contra entry?
a) Cash withdrawn from office
b) Cash deposited in bank
c) Cheque withdrawn for domestic use
d) Goods withdrawn

66) Bank column of cash book has ......... balance:
a) Debit
b) Credit
c) Either a or b
d) None

67) Trade discount is shown in:
a) Cash book
b) Subsidiary books
c) Journal
d) Ledger

68) Which of following is special journal?
a) Purchase book
b) Creditor a/c
c) Debtor a/c
d) Capital a/c

69) Sales book do not contain:
a) Credit sales
b) Credit sales of goods
c) Cash sales
d) Trade discount

70) Subsidiary book contain:
a) Interest on capital
b) Credit items
c) Sale of asset
d) Loss of goods

Answers:
61-b, 62-a, 63-c, 64-a, 65-b, 66-c, 67-b, 68-a, 69-c, 70-b
71) If a partner draw amount of Rs 1,000 p.m in beginning of
every month, what will be the interest on drawing @ 15%:
a) Rs 800
b) Rs 900
c) Rs 975
d) Rs 825

72) Partner capital a/c do not contain:
a) Interest on capital
b) Balance of capital
c) Salary paid
d) Increase in asset

73) Q, R wants to admit C in firm but M does not agree:
a) C will not be admitted
b) C will be admitted
c) M will be retired
d) M will be agreed & C will be admitted

74) At least ........ persons are needed to form a partnership:
a) 4 b) 3 c) 2 d) 1

75) In Govt. Company, govt, has paid-up capital of:
a) 51% b) 49% c) 50% d) 25%

76) Registered companies do not include:
a) Unlimited pubic companies
b) Unlimited private companies
c) Limited private companies
d) Company Limited by guarantee

77) The minimum subscription is required to be received in
........ period:
a) 5 days
b) 10 days
c) 1 month
d) 120 days

78) A applied for 200 shares but was allotted only 60 shares. If
application money is Rs 2, then share application will be
debited with:
a) 120 b) 400 c) 280 d) 450

79) If Article of Association is not given then ........ will apply:
a) Table B of companies Act
b) Table C of companies Act
c) Table A of companies Act
d) Table D of companies act

80) A machine was purchased for Rs 1,16,000 payments made
Rs 10,000 by cheque and remaining by issue of shares of Rs 10
each @ 10.50 each. Number of share allotted will be:

a) 11000 b) 9000 c) 10000 d) 8000

Answers:
71-b, 72-d, 73-a, 74-c, 75-a, 76-d, 77-d, 78-b, 79-c, 80-c
81) Debentures can be redeemed by:
a) Purchase in open market
b) Drawing a lot
c) Redemption in lumpsum
d) All above

82) 7000 shares of Rs 100 were issued at discount of 10% and
redeemed at premium of 5%. Loss at time of issue is equal to:
a) 1,05,000
b) 70,000
c) 45,000
d) 7,00,000

83) Goodwill is raised at the time of:
a) Dissolution
b) Admission
c) Death
d) Both b & c

84) Claim 'of a retiring partner can be paid:
a) In full
b) In installment
c) Half yearly
d) Both a & b

85) Purchase A/c shows only:
a) All purchases of goods & Assets
b) Only cash of goods & Assets
c) All cash and credit purchase of trading goods
d) Only credit of goods

86) Posting is made at ...... side of any a/c appearing at debit
side of cash book:
a) Debit
b) Credit
c) Either a or b
d)none

87) Personal a/c may have ....... balance:
a) Debit
b) Credit
c) Either a or b
d) None

88) Interest collected by bank is in our passbook:
a) Credited
b) Debited
c) Subtracted
d) Not shown

89) Bank reconciliation statement is prepared by:
a) Bank
b) Customer
c) Creditor
d) Firm

90) The debit balance of passbook is:
a) Plus balance
b) Minus balance
c) Either a or b
d) none

Answers:
81-d, 82-b, 83-d, 84-d, 85-c, 86-b, 87-c, 88-a, 89-b, 90-b


91) Trial balance shows:
a) Arithmetic accuracy of books
b) Only ledger balances
c) Necessary adjustments
d) Only cash transactions

92) Sale of goods to Mohan for Rs 500 is passed in books only
with Rs 50. It is:
a) Compensating error
b) Omission error
c) Principal error
d) None

93 ) ........ has credit balance:
a) Drawing a/c
b) Sales A/c
c) Debtor A/c
d) Purchase A/c

94) Preparation of Trial balance is :
a) Compulsory
b) Important
c) Optional
d) Situational

95) Rent paid Rs.900 was credited to rent a/c will be rectified
by:
a) Debiting Rent A/c with 1800
b) Crediting suspense a/c with 900
c) Debiting Rent a/c with 900
d) Debiting rent a/c with 1000

96) Excess debit in Suspense a/c is written as:
a) To balance b/d
b) To balance c/d
c) By balance b/d
d) By balance c/d

97) A partner can:
a) Borrow money
b) Endorse bills of exchange
c) Sell goods on credit
d) Only a or b
e) Either (a) or (b) or (c)

98) Partnership deed do not contain term:
a) Name of partner
b) Rights, duties of partner
c) Appointment of arbitrator
d) Audit of A/c

99 ) ......... a/c can show negative balance:
a) Fixed capital a/c
b) Fluctuating capital a/c
c) Cash a/c
d) Balance sheet

100) Profits are shown in ........ side of balance sheet:
a) Asset side
b) Capital a/c

c) Liabilities side
d) Loan capital

Answers:
91-a, 92-a, 93-b, 94-c, 95-a, 96-c, 97-e, 98-d, 99-b, 100-c



















Principles and Practices of Banking[PPB]
1) Regional Rural Banks have been set up with the basic objectives of:
2) A Bank, which is not included in the Second Schedule of RBI Act 1934, is
called ........ :
3) Banking Companies get licenses under........ :
4) CRR funds are kept by the Banks in ....... :
5) An increase in CRR by RBI leads to ....... :
6) The scheme "National Equity Fund" is meant for ....... :
7) ........ is entrusted with the task of developing international trade in India:
8) Issue Department of RBI maintains assets for issue of currency in the
form of:
9) RBI monitors and controls the Scheduled Banks through:
10) The Banking Regulation Act does not apply to:
11) Scheduled Banks are required to transfer a minimum of ........ % of their
profits to Statutory Reserve Fund:
12) Banks are required to preserve their records (including instruments)
under which provisions of Banking Regulation Act?
13) ....... committee, launched the process of reforms of financial system in
India :
14) The term primary and secondary market is used in the context of ....... :
15) The main business of Banks is to accept deposits from the public.
However a Bank can refuse to permit opening an account for:
16) Companies whose principle business is not finance or lending are
permitted to accept deposits under Section 45(s) of RBI Act only from:
17) RBI is a Banker to GOI. It is obligatory on its part to undertake Banking
business on behalf of the government. This is provided under Section....... :
18) Every Banking company requires the permission of RBI under Section 22
of Banking Regulation Act. This is issued by way of a .......
19) Banks are not required to take the permission of RBI if the change in the
location of an existing place of business is within the:
20) Banking companies are permitted to issue only the ...... shares:
21) The whole time chairman of a Banking company may continue the office
at the end of the term of the office until his successor assumes office subject
to the approval of:
22) If the office of the Chairman falls vacant and RBI feels that
nonappointment may adversely affect the interest of the Banking Company,
the Reserve Bank may appoint a suitable person and such appointments will
be for a maximum period of:
23) Commercial risk can rise out of:
24) Banks extend loans at their Prime lending rate to customers who:
25) The On-site inspection of RBI is focused on the CAMELS model. Capital
adequacy, Asset quality, Management, Earnings appraisal are some of the
components of this CAMELS model. The other components are:
Answers:

1) Providing credit deposit and other Banking facilities to people in
rural areas
2) Non Scheduled Bank
3) Section 22 of Banking Regulations Act
4) Balance in a Special Account with RBI
5) Decrease in lendable resources
6) Small Scale Industry
7) EXIM Bank
8) Gold at least value Rs. 115 crore and Gold and foreign exchange
reserve value Rs. 200 crore
9) Off site monitoring, On site inspections and Licensing
requirements
10) A primary agricultural credit society
11) 25% of the profits before dividend
12) Section 45Y
13) Narsimham Committee
14) Capital Market
15) Undesirable persons
16) Relatives in the form of loans
17) 20 of the RBI Act
18) Licence
19) Same Town/Village
20) Equity shares
21) Reserve Bank of India
22) 3 years

23) Lack of growth in demand and excess supply of the product of the
borrower in question
24) Who are perceived as minimal/zero risk customers
25) Liquidity & Systems control
26) RBI has issued detailed instructions under KYC rules. KYC rules are
made for knowing the customer properly in order to:
27) The legal provisions for winding up of Banking companies are laid down
in:
28) An order of moratorium is issued by:
29) The court can appoint RBI or SBI as the liquidator for winding up of
a Banking company as per Section ......... of B.R.Act 1949:
30) Retail Banking sector is characterized by:
31) ...... means offering all type of financial products like retail and
wholesale (corporate) banking, insurance, mutual funds, capital market
related products etc all at one place.
32) Where are American Depository receipts traded?
33) Is it possible to have an IDR for an Indian Company?
34) What is meant by the term Merchant Banking?
35) SENSEX comprising of 30 stocks is maintained by ....... :
36) For which of the following purposes an Asset Management Company is
promoted?
37) Market capitalization can be worked as product of which of
the following?
38) What is meant by the term Coupons?
39) What is the role of a merchant Banker?
40) What is a Factoring service?
41) When a customer purchases goods against issued credit card, the role of
card issuing company is ...... :
42) What are the benefits to the Bank under Securitization?
43) What period of notice is required for taking over the assets by he Bank
under SARFAESI Act?
44) What is Bancassurance?
45) The funds wherein investments can be made around the year are known
as ....... :
46) How does Tele Banking functions?
47) ....... is known as the third pillar of Basel-ll accord:
48) The key element of Pillar 3 in Basel II accord is:
49) Basel II has introduced capital change on the following type of risk for
the first time:
50) Under Basel II, Pillar 3, Banks are required to give additional information
/ disclosures to public once in for the given parameters:

Answers:
26) Discourage money laundering and to avoid frauds due to impersonations
27) Banking Regulation Act 1949
28) High Court under whose jurisdiction the Bank is situated
29) Section 39
30) Multiple Products, Multiple channels and Multiple customer groups
31) Universal Banking
32) In USA only
33) No, IDRs can be issued only for Foreign Registered Companies
34) Services provided to capital market and finance to corporate sector
35) Bombay Stock Exchange
36) To manage the funds of a mutual funds
37) Out standing shares x current market price of shares
38) Token for payments of interest attached to a bearer security
39) They work as an intermediary to an issue in primary market.
40) Outright purchase of receivables
41) That of a guarantor
42) The Banks pass their risk on to the buyer of assets and locked funds
come in circulation
43) 60 days
44) Sale of insurance products through Banking channels
45) Open ended funds
46) Bank's computers respond to customers telephonic enquiries
47) Market discipline
48) Disclosure
49) Operational Risk
50) 6 months


Model Paper-I [PPB-Functions Of Banks]

1) The term 'Customer' is defined under:
2) The relationship between Banker and Customer in relation to standing
instruction is:
3) Your branch gets authentic information that Mr. Balan who is maintaining
a satisfactory Current account in the name of his Proprietorship firm has
been imprisoned. How will you handle the account and the cheques drawn
on the account before and during the period of imprisonment?
4) Bankers duty of Secrecy is defined under ....... Act:
5) The Banker-Customer relationship when the bank accepts articles for
keeping in safe custody from customers is :
6) The customer has submitted his Insurance Policy as a security for a loan
from the Bank. The Banker-Customer relationship in the context of
Insurance Policy is:
7) Ramesh Shivalkar has deposited a FD receipt as security for guarantee
issued by the Bank. The validity of guarantee has since expired. However,
his Current a/c with the branch is overdrawn. Can the Bank exercise right of
Lien on it?
8) The Right of Lien is applicable only in the case of ....... and ........ which
come in to the Banker's possession in the normal course of business.
9) A Banker can exercise the right of Set-off only in respect of:
10) In an overdraft account, when the notice of death of the partner is
received, the Bank should:
11) Can you exercise right of Set-off in respect of time barred debts?
12) Who is Garnishee under a Garnishee Order?
13) The Bank receives Garnishee Order. What is the relationship between
Banker and Customer?
14) A and B have a joint account. Income Tax Department have served an
Attachment order for B. How will you handle the order?
15) Garnishee order is issued under .........
16) Which orders are first issued before issuing the absolute Garnishee
order?
17) Your branch receives a Garnishee order for Mr. Amit and Mr. Manish.
There is no account in the joint names of Amit and Manish. However, they
maintain their individual accounts. How will you handle the order?
18) Jitinder deposited a cheque for collection and Bank had given credit
against this cheque. Before the amount was withdrawn, Bank receives a
garnishee order on the a/c. How should the Bank act?
19) Reliance Bank has received an order under Sales Tax Act in the name of
Kavita Kumari who has a fixed deposit account, which has already matured.
Should the Bank ask for FDR while making the payment under the order?
20) In the case of either or survivor mandate can be accepted :
21) Under which act, Banker also includes the Post Office - Savings Bank
schemes.
22) Under Section 25 of N.I. Act, public holidays are declared by ........:
23) When a Bill is dishonored, the provision regarding noting is described
under Section ....... of N.I. Act:
24) As per the Negotiable Instrument Act, the notice period by the
holder to the drawer U/s 138 is ......... days:
25) Under which section of N.I. Act, meaning of Negotiable Instruments is
given ?
1
Pages- 1, 2,

Answers:
1) KYC guidelines
2) Agent-Principal
3) Cheques drawn on the account, both before and during the period of
imprisonment Will be honored if otherwise in order.
4) Banking Companies (Acquisition and Transfer of Undertaking
Act), 1970
5) Bailey and Bailor
6) Assignee and Assignor.
7) As the FDR has come into Banker's possession in the ordinary course of
business, general lien can be exercised and the Bank can appropriate FDR
proceeds and adjust the OD.
8) Goods and Securities
9) Debts due and determined
10) Stop the operations to avoid application of Clayton's case.
11) Yes
12) Bank on whom order is issued.
13) Debtor - Creditor
14) Can attach 50% of the balance in joint a/c.
15) Rule 46 of Order XXI ofCPC
16) Order Nisi
17) The garnishee order will attach the individual accounts of Mr. Amit and
Mr. Manish, as they are jointly and severally liable for the joint debt.
18) The order does not apply to amount of the cheque as funds are
yet to be received.
19) The Bank cannot insist for production of FDR.
20) Only if both the account holder authorized it.
21) NI Act-Sec-03
22) Central Govt, by notification in the official gazette
23) Sec 99 of Nl Act
24) 15 days
25) Sec 13 of NIAct
26) Under which act, Currency Notes issued by Reserve Bank of India are
not considered as Negotiable Instruments:
27) You come across a Cheque on which neither the words 'bearer' nor
'order' are written. You will make the payment of this cheque by treating it
as:
28) A Certificate of Deposit is what type of instrument?
29) A promissory note is payable on demand which has been written on lOth
Jan 2005, presented for payment on 15th Jan 2005. From which day, the
due date will be calculated?
30) A bill drawn in Paris in favor of a trader in Mumbai and payable in
Chennai is called:
31) What will be the starting point of limitation on a bill of exchange payable
at a fixed time after date:
32) Certificate after Noting of dishonor issued by Notary Public is
known as ........ :
33) Balwant has drawn a bill of exchange on Chiman and endorsed the same
to Mahesh, who endorsed the same in favor of Manish. The bill has been
dishonored. From whom Manish can recover the amount?
34) What is the maximum period for which a Usance bill of exchange can be
drawn?
35) Your branch has received a bill payable on demand. From which date,
you will calculate the limitation period?
36) In which type of bills, Noting and Protest is essential in case of dishonor?
37) Your branch has received a bill for presentation, which was sent for
acceptance. For one week, the drawee did not accept the bill. What will be
the position of the bill ?
38) Not-Negotiable crossing is a caution to:
39) Not- Negotiable crossing means:
40) A cheque having "Account Payee" crossing has been presented by the
Bank on the counter of drawee Bank for cash payment. How should the
drawee Bank handle the cheque?
41) Mr. Suresh receives a cheque as a gift in his wedding. He becomes
holder or holder in due coursse:
42) A cheque payable to Rohit is endorsed as "Pay to Kapil on his marriage".
Which type of endorsement is this?
43) A order cheque is transferable only by:
44) M endorsed a cheque in a favor of D with the condition that pay to D,
after death of R, but D received the payment without fulfilling the condition.
In this case from whom can M recover the amount:
45) A cheque is payable to A or order. A endorses it in favor of B. B loses the
cheque. C finds it and after forging the endorsement of B delivers it to D. D
for valuable consideration further endorses it to E. The cheque is dishonored.
What are the rights of E on the cheques?
46) In which case the paying Bank can get protection u/s 85 (I) of Nl Act:
47) Mr. Strong approaches the branch for encashment of a bearer cheque
issued in his favor by one of your account holder. The cashier before making
the payment insist on signatures of the payee i.e., Mr Strong, as receipt for
having received the amount. Mr. Strong refuses to sign on the reverse of the
cheque. How will you handle Mr. Strong?
48) Mr. Menon has a saving Bank account and also a Current account. A
cheque for Rs. 6,500/- drawn on the Current account is received. However
the account is showing a credit balance of only Rs. 5000. The counter clerk
informs that Mr. Menon is maintaining a saving Bank account and it is
showing a credit
balance of Rs. 10,000. Can the Bank appropriate and pay the cheque
received in Current account?
49) A Cheque, after payment, becomes the property of .......... :
50) Why do Banks accept cheques for collection from its customers?
2
Pages- 1, 2,

Answers:
26) Sec 04 of Nl Act-1881
27) An order cheque
28) Usance promissory note
29) DP note is payable on demand.
30) A foreign bill
31) When the bill becomes due for payment
32) Protest
33) Balwant, Mahesh & Chiman
34) No limit
35) Date of the bill
36) Foreign bill
37) It will be considered as dishonored due to non-acceptance
38) Endorsee
39) Holder in due course will not get the better title.
40) Make payment of the cheque as it is payable to a bank.
41) Holder only
42) Conditional endorsement
43) Endorsement and delivery
44) From D only
45) E can recover money only from D.
46) For forged endorsement
47) The payee may be given the option of signing a duly stamped ( as per
Stamp Act) money receipt on a plain paper.
48) The Bank cannot appropriate and the cheque will be returned.
49) Drawer
50) It is Bank's ancillary function as per of Sec 6 of Banking Regulation Act

































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