Tuesday, November 20, 2012

BANK PROMOTION EXAMINATIONS- RRE 004





RAPID READING  EXERCISE – PART:: 04

01. Prepaid expenses in the shape of insurance premium are classified in the balance sheet as – current assets
02. The borrowing powers of the board of directors of the Public Limited Company should not exceed: Paid up capital and free reserves
03. State sponsored corporation granted loan for on-lending to weaker section is covered by the bank under – Indirect advance to agriculture
04. Hypothecation has been defined in Section 2(n) of Sarfaesi Act
05. In a cheque drawn by the drawer, the name of payee is written in English and the other parts in vernacular language. The cheque will be paid if it is otherwise in order
06. Right of subrogation is – guarantor stepping into the shoes of the creditor or discharging the liability of the principal borrower
07. The objective of Government Sponsored Swarna Jeyanthi Gram Swarojgar Yojana – SGSY is – to raise individuals/groups of rural poor above the poverty line over a period of time
08. Account payee crossing is not defined in any act including Negotiable Instruments Act
09. In computers, booting refers to – Powering the computer and loading in operating system
10. On receipt of a forged Rs. 500 note, the note and the  statement from the applicant would be sent to the Police
11. In case of wrongful dishonour of cheque by the bank,  the bank is only liable to drawer as the privity  of contract is between bank and the drawer who is the accountholder
12. Under Section 148 of Indian Contract Act, bailment refers to delivery of goods from one person to another person for some purpose and when the purpose will be over, goods will be returned or disposed off as per the direction of the delivery  - ie bailor
13. Global Trust Bank was merged with Oriental Bank of Commerce
14. The objective of Know Your Customer guidelines are – Prevent banks from being used unwittingly by criminal elements for transfer of illegal funds/money laundering activities
15. IRDA refers to Insurance Regulatory and Development Authority , for regulating the insurance sector
16. Preferential payment to depositors in respect of winding up of a banking company is provided under Section 43 A of Banking Regulation Act, 1949
17. National Housing Bank is an apex Institution dealing with the housing finance exclusively
18. For declaration of dividend by a bank, without reference to RBI the capital adequacy ratio  should be at least 11% for preceding two completed years and the accounting year for which the bank proposes to declare dividend
19. Interest in cash reserve ratio is payable on Monthly basis at 3.5% eligible balances
20. The keyboard, mouse, touch pad are input devices in a computer
21. The cooperative bank which has changed its name to private bank is – DEVELOPMENT CREDIT BANK.
22. Exchange Control Department is now called – Foreign Exchange Department
23. World elder’s day is celebrated on 1st October each year
24. Current Ratio of 0.85 implies – negative net working capital
25. Committee on legal aspects of bank fraud is headed by Dr. N L Mitra
26. The maximum extent of FDI in public sector bank is 26%
27. A depositor who has opened his recurring deposit account on 10th day of a month  can deposit his monthly  installments on any day during a month
28. The risk weight for housing loan been increased to – 75%
29. Repo transaction refers to: Inspection of the liquidity by RBI under liquidity adjustment policy
30. A 65 year old depositor requests you not to deduct TDS at source. He has to submit the request in Form: 15H
31. NABCONS means – NABARD Consultancy Services
32. Negative lien is a declaration given by the company that the assets given for creating charge is owned by it and there is no change of any bank on it
33. The formula for calculating breakeven point in terms of units is – Fixed Costs/Contribution
34. Risk arising out of mismatch in maturity payment in assets and liquidity is known as _ Liquidity Risk
35. S.K. Tudeja Committee is associated with: Sugar Industry
36. The ceiling for referring cases for recovery of Lok Adalat  - Rs. 20 lakhs
37. Cheque Truncation refers to – A process in which a cheque is truncated during the course of a clearing either by the clearing house or by the bank whether paying or receiving payment immediately on generation of electronic image for transmission substituting the cheque for  further movement in writing
38. CDR mechanism is applicable in the case of borrowers having multiple banking exposure of Rs. 20 crore and above.
39. Matured but not paid term deposits are treated as – demand liability
40. While opening a current deposit account of a Partnership firm, banks generally insist for declaration of partnership in the prescribed form
41. The relationship between banker and customer in the case of Safe Deposit Vault transaction is that of – LESSOR/LESSEE
42. One of the trustees of a trust maintaining an account with your bank is adjudged as insolvent. A cheque signed by him was presented through clearing after you received the notice of insolvency of the trustee. What will you do ? – The cheque can be paid safely
43. Loss before charging depreciation is known as – cash loss
44. In a foreign exchange transaction, a right but not the obligation to buy or sell is called – option
45. For technological upgradation in banking system, which of the following committee has been set up ?  - SAFAR COMMITTEE
46. A usance bill is accepted by the attorney of the drawee. Subsequently, the drawee revokes the power of attorney before the bill is due. What will you do in this case ? – It is deemed to be accepted by the drawee and he is liable
47. As per the RBI guidelines, there should be how many working directors in a public sector bank ? – Two: Chairman and Managing Director and Executive Director
48. On receiving a notice of death of Karta, the credit balance of HUF current account will be operated by the  senior most coparcener
49. Not negotiable crossing is a caution to – endorsee
50. M/s Impex Private Limited, an exporter having a satisfactory current account approaches you and seeks your guidance about an export order which he has received from USA for export of garments. On scrutiny of the export order, you observe that there is a clause that Letter of Credit will follow in due course. He enquires from you as to which type of LC is safest from the point of view of exporter. .– Irrevocable letter of credit.
51. Mr Taj Pratab Singh, a sole proprietor of M/s Impex Private Limited – an exporter having a satisfactory current account approaches you and seeks your guidance about an export order, which he is negotiating with an importer from USA. He seeks guidance as to which type of LC he should insist which will assure him that some preshipment advance is made available at  the instance of importer – Red Clause Letter of credit
52. Deposit accounts which have not been operated for more than 10 years are called – Unclaimed accounts
53. Return of unclaimed deposits is required to be submitted to RBI under which act – Section 26 of Banking Regulation Act.
54. On scrutiny of a balance sheet of M/s Techno Inc, you observe that the long term uses of funds are more than long term sources. The position of the balance sheet indicates – Negative net working capital
55. On scrutiny of a balance sheet of M/s Thomas Inc. you observe that the short term uses of funds are more than short term sources. The position of the balance sheet indicates – positive net working capital
56. Committee on Procedures and Performances Audit and Public Services – CPPAPS is headed by – S. B. TARAPORE
57. Mrs. Raja Rani, aged 80 years having a fixed deposit for Rs. 2 lakhs approaches you with the request to add the name of his son so that he does not face any problem after  her death. You observe that she has raised a loan against the said FDR. How will you handle the request of the lady? – The lady will be advised that the request can be accepted on adjustment of loan
58. Your branch has disbursed a term loan – documents  executed by Master Bobby to meet his education expenses, which was guaranteed by his father. The loan account became irregular and despite repeated reminders, Bobby or his father did not regularize the term loan account. The loan officer approaches you for guidance regarding course of action, which the bank can undertake. –Loan cannot be recovered from the borrower or the guarantor, as the contract with the minor is void.
59. Master Vinay aged 16 years has a term deposit of Rs. 10000.00 with your branch  which is to mature after three years. He approaches you with a request to either allow loan against the deposit or make the pre-mature payment of term deposit. How will you handle the request of Master Vinay ? – Loan will not be allowed to the Master Vinay since he is minor, however,  premature cancellation can be permitted.
60. Mr Somnath  maintaining a satisfactory current account with you issues a cheque for Rs. 10000.00 in favour of the supplier -  Mr. Samsung.  He endorses it in favour of Mr. Lever and he deposits  the cheque in his bank for collection. The cheque is presented in clearing at your branch but due to oversight, the cheque is wrongfully dishonoured . Your branch receives a notice from Mr Lever for wrongful dishonour and demands payment and also claims damages. How will you handle the notice? – In the case of wrongful dishonour of a cheque, the drawee  banker is liable for damages to the drawer only. As such  Mr. Lever has no legal ground to serve the notice  to the bank and demand the payment.
61. The Narasimhan Committee Recommendations include – Permitting Regional Rural Banks for all types of banking business; rationalization of foreign operations of all banks, giving authority to public sector banks for recruitment of officers and setting up of asset reconstruction fund to take over bad and doubtful debts of the banks
62. Regional Rural Banks are managed by – State Government
63. Banks are required to prepare balance sheet in the prescribed format as per – Section 29 of Banking Regulation act
64. A minor not domicile in India will attain majority – on completion of the age as per the law of the place of the domicile
65. As per Section 105 of Negotiable Instruments Act, reasonable time is to be determined for presentment for acceptance or payment of Negotiable Instruments while determining such period – Public holidays and Sundays will be excluded
66. Bill of exchange will be treated as dishonoured, when the drawee makes defaults in acceptance; where one of the drawee out of several drawees does not accept the bill; where the drawee is incompetent to contract and when the acceptance is qualified
67. Negotiable Instrument payable on demand must be presented within a reasonable time
68. The starting point of limitation period on a bill of exchange payable on demand is – the date of the bill
69. Bank obtained the agreement of hypothecation on 1.1.2005 and upto what time, the bank can file a suit ? – 01.01.2008
70. Sarfaesi Act, 2002 is not applicable in the following cases – any security interest not exceeding Rs. 1.00 lakh; any security interest in agriculture land; pledge of movable as per Section 172 of Contract Act and  Rights of unpaid seller under Section- 47 of Sale goods act
71. The members of debt recovery tribunals are known as – public servants
72. Validity Period of equitable mortgage is – 12 years
73. Accumulated losses are to be classified as fictuary assets
74. The repayment capacity of a borrower for a term loan is calculated by – debt service coverage ratio
75. Silviculture is known as cultivation of trees
76. The gilt edged securities are known as – government securities
77. One basis point implies – 0.1%
78. Export Bill if not paid on due date will be crystalised on 30th day after notional due date
79. RAM stands for – Random Access Memory
80. Demat stands for dematerialization and remat stands for rematerialisation
81. The following are hedging instruments – Futures; Interest Rate futures; Currency future; Stock index futures
82. At whose request, letter of credit is opened by the bank ? – Buyer or importer
83. In which type of letter of credit, apart from provision for allowing pre-shipment credit, issuing bank has also to arrange for storage/farmhouse facility prior to shipment on board – Green Clause letter of credit
84. Under the concept of Offshore Banking Units, minimum capital for starting the operation provided by the payment bank would be:  US dollars – 10 million
85. What is the target under priority sector for Foreign Banks for SSI within the overall target of 32% ? - 10% of net bank credit
86. Priority sector target for Regional Rural Banks has been fixed at – 60%
87. First annual general body meeting must be called within a period of – 18 months after the date of incorporation of the company
88. If annual general body meeting is not called for  by the company within  the prescribed period, each officer of the company shall be punishable with a fine  of Rs. 50000.00
89. Networth of the company is the sum total of paid up capital and free reserves. Free Reserves means all reserves created out of profits and write back of depreciation provisions
90. Holding Company means –the company which holds shares of another  company of value of more than half value of equity share capital
91. If a company wants to change its name the procedure to be followed – conduct a special meeting of the general body and arrive a resolution and get approval of Central Government
92. Certificate for registration of charge is issued by the Registrar of companies under Section 132 of the companies act
93. SARFAESI act 2002 contains the provisions for filing the appeal before DRAT by the borrower for which he will have to deposit – 50% of the claim amount
94. The drawee of the cheque always is – the paying banker
95. In terms of autonomy, stronger banks mean – banks that have made profits for last three consecutive years; having capital adequacy ratio of 9% or more; having net NPAs of less than 4% and having a minimum owned funds of Rs. 300 crore
96. Under autonomy package, banks would be allowed to prescribe standards for categorization of branches; they will have the power to lay down the educational standards for recruitments and promotions; it aims to remove the fears among banks officials on their being haunted by the investigating agencies on commercial decision taken in good faith and senior bank officials are permitted to undertake foreign tours for business promotion
97. A contract about Foreign Trade Policy  means – It is for a period of five years; along with the main annual policy supplement  announced every year and board of trade is headed by an eminent business person
98. Current accounts are permitted to be opened by executors, administrators, liquidators and trustees also
99. Current account can be opened by any person or institution
100.Ration card should not be insisted by the bank for identification of the depositor as per KYC guidelines

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