Institute for Technology & Management

Banking Services & Operations Question Paper

A

Objective Type Questions (1 Mark each)

1. Governments carry out Monetary Policy through.
a. Commercial Banks
b. Co-operative Banks
c. Central Banks
d. None of the above
2. A Commercial Banks credit creation capacity will __________________ if the Central bank increases
the CRR.
a. Increase
b. Decrease
c. Have no effect
d. None of the above
3. Interest rates in developed countries and global markets are ____________ than that of India.
a. Higher
b. Administered
c. Lower
d. Fixed
4. Negotiable Instruments are easily
a. Gifted
b. Transferable
c. Sold
5. Two parallel transverse lines across the cheques is called
a. Transfer
b. Endorsement
c. Crossing
d. Assignment
6. Where the signature of the drawer of a cheque is not genuine, such a cheque is called a
a. Post-dated cheque
b. Clearing cheque
c. Forged cheque
d. Stale cheque
7. Current Deposits are not entitled to
a. Customer Service
b. Statements
c. Interest
d. Cheque Book
8. Which of the following is not one of the functions of the RBI?
a. Corporate Finance
b. Developmental Role
c. Monetary Authority
d. Supervisor of Financial system
9. When a customer issues a letter directing a banker not to honour/pay a particular cheque, such a
letter is called a

a.
b.
c.
d.

Letter of credit
Stop-payment letter
Letter of Continuity
Letter of Authority

10. The conversion rate between currencies is determined by

a. Exporters
b. Banks
c. Brokers
d. Central Bank
11. Society for inter-bank worldwide financial telecommunication is known as
a. SIBWFT
b. SFIWFT
c. SWIFT
d. None of the above
12. A banks account in a foreign currency with a bank in the said foreign country for international fund
transfer and settlement is called as
a. TT
b. Nostro
c. Premium
d. Forward
13. Nominal interest rate Inflation = _______________
a. Repo rate
b. Bank rate
c. PLR
d. Real Interest rate
14. Banks normally reduce the lending and deposit rates following a reduction in
a. Inflation
b. Bank rate
c. Exchange rate
d. PPF rate
15. ECS mandate is a/an
a. Stamped agreement
b. Order of court of law
c. MOU
d. Unstampled letter to the bank
16. When a banker makes payment of a cheque after the banking hours, he will be held
a. Reasonable
b. Customer-friendly
c. Liable
d. in good esteem
17. KYC norms are adhered
a. On a case to case basis
b. Only for walk-in customers
c. For all customers
d. For salary customers
18. Demand Deposits are those which can be withdrawn
a. On demand
b. On a certain event occurring
c. After 3 months

d. After 5 years
19. The validity of a cheque has been recently decreased to
a. 6 month
b. 9 months
c. 3 months
d. 1 year
20. The crossing in a crossed cheque can be cancelled by
a. Drawer
b. Endorser
c. Acceptor
d. Drawee
21. Banks provide the following category of financial services
a. Term deposits
b. Mutual fund products
c. Investment advisory
d. All of the above
22. One of the below does not fall under Non-interest income
a. Locker Rent
b. Fees on Cross-selling of products
c. Revenue from Jewel-loan
d. Bank Guarantee Charges
23. One of the below does not fall under Current Account Forex Transaction
a. Profit/dividend/Interest received
b. Travel Expenses
c. Trade Revenue
d. Portfolio Investment
24. One of the below does not fall under Negotiable Instrument category
a. Dividend Warrant
b. Bank Draft
c. Pro-forma Invoice
d. Deposit Receipt
Pls select anyone from 25-26
25. What is the amount of Forex an AD can release for the purpose of private visit by an individual per
financial year?
a. $ 5,000
b. $20,000
c. $50,000
d. $10,000
26. What is the eligible amount of Forex an AD can release for the purpose of 3 business visits by an
individual per financial year?
a. $75,000
b. $25,000
c. $1,50,000
d. $90,000
Any two from the below True/False Statement
27. Loan against shares will be considered only if the shares are in the demat form.
a. Yes
b. No

28. Retail Banking means managing of individual customers deposit needs only and not their loans
a. Yes
b. No
29. Banks should provide loan facilities to existing customers.
a. Yes
b. No.
30. FCNR deposits can be maintained both in Indian Rupee and designated currencies
a. Yes
b. No.

Descriptive Type Questions (5 Marks)

1. Analyse the important functions of the Central Bank.33 to 40
2.
3.
4.
5.
6.
7.
8.
9.
10.

Explain the importance of the KYC norms in the banking industry.

Please highlight the important differences between Cheque and Bill of Exchange.252
Explain the Different types of Bank-Customer Relationship.209 to 217
Please explain the significance of Ratio Analysis in the banking industry.slides
What is the significance of Non-interest income in the banking industry?slides of non interest
income
Please explain the different types of services offered to the Corporates by the banking industry.
Please explain the importance of Monitoring of Loans and advances and method of monitoring the
same.
Explain the importance of the Priority Sector Advances in the Banking Industry.
Give the full form of the below abbreviations
a. ECGC----Export Credit Guarantee Corporation of India Limited
b. FCCB------Foreign Currency Convertible Bonds
c. FEDAI--- Foreign Exchange Dealers Association of India
d. NHB---- National Housing Bank
e. LRS--- Liberalised Remittance Scheme
f. RTGS--- Real Time Gross Settlement
g. NIM---- Net Interest Margin
h. BPLR----- Benchmark Prime Lending Rate
i. AML----- Anti Money Laundering
j. DCSR---- Debt Service Coverage Ratio

11. Please explain the different roles of a banker in a Foreign exchange transaction.

Please consider this question

12. Based on the below Balance Sheet of an organization, answer the questions mentioned below
explaining the ratio:
LIABILITES

ASSETS

Capital

180

Net Fixed Assets

400

Reserves

20

Inventories

150

Term Loan

300

Cash

50

Bank C/C

200

Receivables

150

Trade Creditors

50

Goodwill

50

Provisions

50
800

a.
b.
c.
d.
e.

800

What is the tangible net-worth?

What is the total External Liabilities?
What is the Debt Equity Ratio?
What is the Proprietary Ratio?
What is the Quick Ratio?

13. Please explain the important characteristics of a cheque.

(or)
What is material alteration and explain instances of material alteration?
14. Please explain the advantages of Information Technology in the banking industry from both Customers
and Banks perspective.
15. Please explain the important risks faced by a banker in International Trade.

Detailed Questions (10 Marks)

1. Please analyse the strengths, weaknesses, opportunities and threats of CASA deposits in the banking
industry.
2. What are the important principles of lending to be considered by a Bank and please explain the
different types of Lending facilities offered by a Bank? ---- 220 to 232