Tuesday, November 20, 2012

BANK PROMOTION EXAMINATIONS - RRE 003




RAPID READING EXERCISE – PART:: 03

01.   Appeal against the decision of Dent Recovery Tribunal can be made before Chairperson of DRAT within a period of 45 days
02.   If a document duly stamped in Delhi travels to J and K state, additional stamps equivalent to full stamp duty of Jammu and Kashmir state are required to be affixed
03.   In case a borrower signs in a vernacular language, a banker must obtain a duly witnessed certificate  that the contents have been read out and explained to the borrower in vernacular language and the borrower had understood the same
04.   One rupee notes are issued by Government of India
05.   Borrowing powers of a company are mentioned in the articles of association
06.   A certificate of deposit is issued by a bank at a discount to face value
07.    FIMMDAI means Fixed Income Money Market and Derivative Association of India
08.   Chairman and Managing Directors of nationalized banks are appointed by Central Government
09.    Hardware refers to – any part of computer that is physically visible
10.   Special Purpose Vehicle mechanism is suggested for divestment of Government’s stake in Public Sector Unit
11.   Debt Service Coverage Ratio shows the number of times the company’s surplus generation covers the payment of interest and repayment of principal of long debt
12.   The high level committee set up by the finance ministry to review the system of administered interest rates in the country – Y V Reddy Committee
13.   Under the Corporate Debt Restructuring – CDR, the floor limit of aggregate exposure is Rs. 20 crore
14.   In the case of securitization, the number of loans are put together and then distributed among small investors
15.   A NRE depositor has issued a power of attorney in favour of his wife – a resident. She can withdraw cash, issue cheques-crossed for local payments and deposit into the account a foreign DD favouring the deposit, however, she cannot deposit foreign currency notes/foreign traveler cheques
16.   The maximum period allowed for FCNR deposits – three years
17.   Foreign citizen of Indian origin is a  Non Resident Indian – NRI
18.   Tier II capital should not exceed 100% of Tier I capital
19.   A letter of credit in which the terms and conditions cannot be amended without the agreement of letter of credit - opening bank, applicant and the beneficiary is called – Irrevocable letter of credit
20.   Bill of lading is a document signed by the Captain of the ship, acknowledging of receipt of goods on boarding the vessel for shipment
21.   Trade Related Intellectual Property Rights (TRIPS) and Trade Related Investment Measures (TRIMPS) are associated with – Dunkal Proposal
22.   The import licences are issued by DGFT
23.   Montreal Protocol relates to Protection of ozone layer
24.   The term – holder – refers to the person who is in possession of the instrument legally and entitled to possess the instrument in his own name and recover the amount thereunder
25.   An executor of a will has expressed his inability to accept the responsibility. On reference to the Court, a person is appointed to look after the affairs. The person is called Administrator
26.   Recovery certificate issued by the president of Debt Recovery Tribunal is routed through Recovery Officer
27.   If the bank fails to register the hypothecation charge on the Current assets of a company within 60 days of creation of the charge, the matter has to be referred to – Company Law Board
28.   A guarantee was issued on behalf of Rohit by exercising a lien on the Fixed Deposit Receipt of Rohit. Bank is informed about the death of Rohit. A garnishee order is received attaching the deposit of Rohit. The bank will attach subject to bank’s right of set off against any debts owed by Rohit
29.   A loan has been granted to Rahul against the security of his Fixed Deposit Receipt – FDR, with the branch. Subsequently, a Court attachment order is received on the deposit. The branch  after adjusting the dues/outstanding towards the bank has  to pay the balance amount to the court
30.    Registration of charge is not necessary when the company has been granted loan facility against the security of Fixed deposit
31.   The bank receives garnishee order. The relationship between the banker and customer in this case is debtor /creditor
32.   The bank due to oversight pays a forged cheque and the bank is liable to drawer
33.   The bank while disbursing the loan did not stamp the promissory note for the appropriate value. The options for the bank is that unstamped/understamped promissory note cannot be rectified
34.   A minor aged 15 years comes to your branch for payment of a cheque for Rs. 27000/-. The signature of the drawer tallies  with your record. As a desk officer, can you make the payment ? – Yes, the minor cannot be denied  taking payment
35.   As per the amendment of the Negotiable Amendment Act in December, 2002, the time period available to the holder of a cheque to give notice of dishonour to the drawer is 30 days
36.   As per the Negotiable Instruments Act, the notice period by the holder to the drawer under Section 138 is 15 days
37.   Kelkar Committee has suggested that tax  incentives for housing loans be withdrawn as part of the overall revamp of tax policy
38.   In case of a garnishee order, where the partner of a firm is a judgment debtor, only his personal account can be attached and not the firm’s account.
39.   The following statements are true in connection with the right of set-off with regard to bank – It is the bank’s discretion to exercise right to set-off and the whole bank constitutes one entity and it is applicable when the banker- customer relationship is that of debtor-creditor
40.   When a bill is drawn in a set of three and third is presented for payment – it can be paid
41.   The provision requirement for substandard assets – 10% of net book value
42.   Claused bill of lading is one which narrates the effective condition of the merchandise or one packing or both
43.   A NRI can maintain – Non Resident External Account, Non Resident Fixed deposit account, FCNR account and Non Resident Ordinary account
44.    Composite cash credit system with liquidity for agriculture has been introduced on the recommendations R V Gupta Committee 
45.    Rohit Mehta (apparent age-14) presents a cheque drawn by his father Amit Mehta for payment – it can be paid  as the minor is not made liable in this transaction
46.   Certificate of noting issued by Notary Public is known as Protest
47.   Break-even-Point is a point where the total costs equal total revenues
48.   A police inspector informs you that Thomas is facing a charge of cheating and is involved in illegal export of persons abroad. He produces a letter signed by the station-in-charge demanding that details of the account of Thomas facing charge of cheating be disclosed. How will you handle the situation ? – As the inspector has produced an authorization letter we will allow him to inspect the books
49.   If debt service coverage ratio is 2, it means – loan repayment can be easily made by the borrower
50.   A minor attains majority on completion of 18 years
51.    “Bank does not recognize trusts” – it means that in the absence of any specific information,  deposit accounts will be presumed to be the property of the accountholder
52.   Financial assistance for the activity, which is not considered indirect finance to agriculture is – Agro clinics
53.   Executor is a  person named in the “Will” to manage the properties of the deceased
54.   Holder does not get protection, if endorsement is forged
55.   If on any cheque, bearer or order has not been written then it will be treated as – an order cheque
56.   Mumtaz endorsed a cheque in favour of Dara Singh with the condition – “Pay to after death of Rohan Kapur”, but received the payment without fulfilling the condition. In this case from whom can Mumtaz recover the amount – From Dara Singh
57.   Abhinav is the holder of a cheque who endorses sans recourse to Thomas and Thomas to Raman  and Raman  to Divya who endorses it to Selvi.  The cheque is dishonoured – Selvi  can claim the amount from Thomas, Raman and Divya
58.   Account Payee crossing is addressed to collecting banker
59.   Minor wants to overdraw in his account and you will not grant it because the contract with a minor is void abinitio
60.   The maximum number of members in a Private Limited Company, should not exceed – 50
61.   A Hindu Undivided Family is managed by – the karta
62.   Garnishee order attaches – balances available at the time of serving the order to bank
63.   Consideration for a contract of guarantee shall be Consideration received by the debtor
64.   A company has been sanctioned overdraft limit of Rs. 150000.00 against pledge of shares and in this case,  registration of charge is not necessary
65.   Simple mortgage is one which undertakes a personal obligation to pay the mortgage debt and passing the right of sale of the said property through court
66.   In an ongoing situation, the right of set-off can be exercised by a banker – by serving a reasonable notice on the customer
67.   Ombudsman scheme is framed under  Section 35 A of banking regulation act
68.   In case a borrower signs the documents with the left hand – a separate note stating that the documents signed with left hand is kept with the documents
69.   Joint and several demand promissory note should not be obtained in the  case of advance to – a limited company
70.   In the case of bank documents the following category of stamps are affixed – non judicial
71.   An export bill for US $ 10000 drawn under letter of credit is negotiated by your bank and is submitted to the LC issuing bank for reimbursement  and you are informed that the documents negotiated by your branch are forged.  Negotiating bank is not liable as the bank is not liable for genuineness of the documents
72.   Original demand draft is reported lost by the payee and in the meanwhile the draft is presented in the clearing – draft will be returned with the reason ‘Reported lost by payee and  drawer’s instructions awaited”
73.   Official Language (OL) rules 1976 is not applicable to Tamilnadu State
74.   If a person dies intestate, the court will issue the following documents – letter of administration
75.   Import licenses are issued for CIF value
76.   Documents requiring stamping in terms of Indian Stamp act should be stamped before execution or at the time of execution
77.   Kisan Credit card system has been introduced with effect from August 19, 1999 to take care of credit needs of the agriculture on the recommendations of R V Gupta Committee
78.   The domestic inquiry relating to misconduct of an employee is governed by Industrial Disputes Act
79.   Meaning of term – liquid surplus – in relation to the interpretation of the balance sheet – it represents excess of current assets over current liability
80.    For disposing of the balances of the deceased customer dying without will or nomination -  letter of administration is required
81.   Guarantees, confirmation of letter of credits issued by foreign banks, performance bonds, bid bonds, warranties are non fund exposures
82.   Clean bill of lading  - which bears no super imposed clause or notation which expressly declares the defective condition of the goods and or packaging
83.   Free carrier allowance means – seller fulfils his obligation to deliver the goods when he has handed over the goods meant for export into the charge of the carrier named by the buyer
84.   Foreign Currency, which has a tendency of quick migration is called – hot currency
85.    Current Ratio – denotes the liquidity of the firm
86.   RBI has allowed authorized dealer the authority of opening of temporary foreign currency accounts for organizers of international seminars, conferences, conventions etc, who have already obtained the prior approval of the concerned administrative machinery of the government
87.   The exchange rate to be applied for effecting remittance of an import bill is – bill selling rate or forward sale contract if already booked
88.   The negotiating bank has negotiated the documents under letter of credit and made payment to the beneficiary. The issuing bank refuses reimbursement to the negotiating bank saying the documents are forged – in this case negotiating bank is not liable, since the bank has acted in good faith and the documents are apparently in order
89.    In India, Trade Control comes under the direct control of Ministry of Commerce
90.    In INCOTERMS, the term FAS represents – Free alongside the ship
91.   UCDPC is prescribed by ICC, Paris
92.    The first committee on mechanization and computerization in banking was headed by Dr. C. Rengarajan
93.    The committee on Institutional Credit to SSI Sector and related aspects  (Annual Projected Turnover Method) was headed by – P R Nayak
94.   The bill is drawn in Mumbai and is acceptable/payable in New York and the drawee is at  New York. The bill is inland bill
95.   In Camels rating – C stands for Credit worthiness
96.   Asset Reconstruction Company has been set up by the Government to recover the non performing assets – NPAs of weak banks
97.   Under “Narrow Banking” the financial institutions can invest only in Government securities and not undertake loans and advances
98.    Margin of safety means – excess of total sales over break-even point in terms of sales
99.   Advance for pisciculture is granted under “agriculture” segment.
100.              Noting and protesting is not applicable to foreign bill – noting and protesting is applicable to promissory notes, bills of exchanges and cheques
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