Tuesday, November 20, 2012

BANK PROMOTION EXAMINATIONS: RRE 006





RAPID READING  EXERCISE – PART:: 06

01.  When the remission on stamp duty of a bill is available ? – When a bill represents genuine trade transaction and when the usance period of bill is not more than three months and when the bill is routed through banking channel
02.  Endorsement is a signature of the maker or holder for the purpose of negotiation
03.  A Government promissory note is a negotiable instrument as per custom and usages
04.  A cheque is drawn for Rs. 50000.00 and the payee endorses Rs. 5000.00 in favour of Madhumita. Madhumita can claim from the bank -  no amount because parallel endorsement is invalid
05.  An undated cheque is – not considered invalid or considered valid
06.  The function of Central Processing Unit – CPU is to read, interpret and process the information and instructions
07.  On which one of the following securities, banker has a right of general lien – securities remaining in his possession after the loan was adjusted
08.  Certificate of incorporation – provides conclusive proof that all the formalities regarding the formation has been fulfilled by the promoters
09.  The following factors are to be examined while reviewing the Cash Credit Accounts – whether the borrower is passing  the entire business to the bank; whether prescribed margins are being maintained and whether there is an active turnover both in the account as well as in the stock offered as security
10.  The following statements are true in respect of Allied agricultural advances – Interest is to be charged on compounded half yearly basis in September/March each year and no penal interest should be charged for loans upto Rs. 25000.00
11.  Higher debtor turnover ratio means – problems in collection of debts
12.  Cash loss means – net loss before charging depreciation
13.  Nomination facility is available on deposit accounts opened by individuals
14.  Crossing of cheque denotes that – it should be paid to banker only
15.  Negotiable instruments act had permitted the following – electronics cheques; truncated cheques; digital signatures and application of Information Technology Act
16.  M/s Problem and company are maintaining a current account with your branch. A cheque for Rs. 25000.00  drawn by them is presented through clearing which is duly passed and debited to their account. Subsequently, payment of the cheque is countermanded by the drawer the same day before the time of return of clearing cheques. What decision will you take in this situation ? – The drawer can stop payment before the expiry of time for returning unpaid cheques as per clearing house rules
17.  If a minor is admitted in a firm for the benefits of a partnership, the bank will open the current account
18.  On retirement of a partner, if the account is in credit balance – the firm continues and the branch must ensure that notices of retirement is obtained not only from the continuing partners but also from the retiring partners and then delete the retiring partner’s name
19.  While opening the account in the name of the Public Limited Company, the bank should obtain along with account opening form – the memorandum and articles of association; the board resolution to open the account with the bank and the certificate of incorporation
20.  A Hindu undivided family consists of all persons -lineally descended from a common ancestor
21.  When court issues garnishee order, the bank is known as – garnishee
22.  Raman and Joseph go to a shop. Raman says to the shop keeper “Let Joseph” have the goods, and if he does not pay, I will pay – Raman is liable only if Joseph fails to pay
23.  Purchase of plant and machinery – uses of funds
24.  Banking Ombudsman is appointed by RBI under Banking Regulation Act
25.  The currency chest maintained by a nationalized bank is in the capacity of – principal and agent
26.  A and B maintain a fixed deposit account with a locker and want to make nomination for both the accounts – nomination can be made in both the accounts
27.  Out of Sen award, Desai award, Shastri award and bipartite settlements, Sen award is not applicable to award staff
28.  According to Rule 5 of Official Language Rules – reply of Hindi letters should be given in Hindi only
29.  As per limitation act, period of limitation for repayment of deposits by bank is – three years from demand
30.  Back to back letter of credit means – issue of letter of credit in domestic currency on the strength of foreign letter of credit
31.  Which document will you call for in permitting removal of the contents of the locker in case of death of locker hirer who has not nominated anyone – letter of administration
32.  A term deposit receipt was originally issued in the name –Amit and Bhawana. Subsequently, Amit’s name was deleted and Cumar’s name was added. Now, Bhawana has requested to delete his name and include Divya’s name. What would you do ? – Not to accept as RBI directives prohibit such a change
33.  Which account is not attachable by service of garnishee order ?- balance representing cheque sent in clearing, not yet cleared
34.  The Credit Guarantee Fund scheme of SIDBI covers all fund based credit facilities
35.  Country risk(s) is/are – political, economic, social and cultural
36.  Straight bill of lading is where goods specified in the bill of lading are consigned to a named person
37.  Dunkel draft was – associated with Uruguay round
38.  In our country, Exchange Control is under the purview of Ministry of Finance
39.  TT buying rate is applied for an inward remittance when our Nostro account has already been credited
40.  Import licence indicates – CIF value of imports
41.  Under “FAS” terms – seller delivers the goods alongside the ship, buyer to nominate carrier, pay the freight and provide export clearance
42.  If the letter of credit is silent about the revocability, the letter of credit is considered as – irrevocable
43.  In a balance sheet, the value of fixed assets – Rs 1 lakhs, value of non current assets – Rs. 1 lakhs and value of total liabilities – Rs 4 lakhs.  What is the value of current assets ? – Rs. 2 lakhs
44.  If current ratio of an organization is very high but acid test ratio is low, it indicates that the firm has – very high stock level
45.  Contingent liabilities are shown as footnote to the balance sheet
46.  If a company issues bonus shares, the net worth of the company – will not undergo any change
47.  If a company issues rights shares, the debt equity ratio will have a change by improvement
48.  Cyper law relates to – law relating to electronic media and telecommunications
49.  Nayak committee refers to advances made to small scale industry
50.  The term loan instalments payable within twelve months is shown in the balance sheet as – current liabilities
51.  Raman purchased a draft favouring Krishnan, but has misplaced the draft in his office. Krishnan approached you for issue of a duplicate demand draft furnishing good sureties. What would you do ? – Duplicate draft will be issued only to Raman (the purchaser) and not to Krishnan
52.  What will you do in case any damaged/tampered parcel is received ? – open delivery of the parcel will be asked for
53.  In the case of Hindu Undivided family, the following is not true – In the case of joint family business every member born in the family becomes a coparcener in the family business
54.  In the case of H U F, the following are considered true – Joint Hindu family is not dissolved by the death of coparcener; in the joint family business only the manager of Karta has authority to incur debts; the karta alone can operate the current account of Joint Hindu Family and any representative appointed by the karta may also be permitted to operate the H U F account
55.  Revenue stamp of what value is to be affixed in respect of receipt for Rs. 500.00 ? – Nil
56.  Who can stop payment of a cheque ? – the drawer
57.  A cheque is drawn “Pay Ramkumar” without the words “or order” or “bearer”. Such an instrument is transferable and negotiable by the payee
58.  The reforms process in the financial sector in India was on the basis of Narasimhan Committee recommendations
59.  Which of the following are eligible for refinance from SIDBI ? – All term loans and all working capital advances under single window scheme
60.  An attestation is required in respect of which of the following documents ? – Mortgage deed
61.  Net working capital means – current assets minus current liabilities
62.  Securitisation is related to recycling of funds
63.  For making payment of a fixed deposit of Rs. 5000.00 customer’s discharge should be obtained on a revenue stamp of – Rs.1.00
64.  When can claim in respect of a fixed deposit receipt become time barred ?  - the claim becomes time barred three years after the date of presentation for payment by that depositor
65.  The following are not negotiable instruments – a postal order; life insurance policy; a share certificate; money order
66.  Restrictive endorsement is one in which endorser restricts the negotiability in future
67.  A cheque may be – ante-dated; post-dated and undated
68.  Protection is available to the collecting banker under section 131 of the Negotiable Instruments Act, 1881 in respect of – crossed cheques
69.  When a cheque is crossed specially to more than one banker, the drawee bank can pay the amount of the cheque to – the bank who is acting as agent for collection
70.  Section 31 of RBI act 1934 specifically prohibits issue of promissory notes, bills of exchange and demand drafts (other than cheques on a banker) payable to bearer on demand because – these instruments issued payable to bearer on demand will virtually amount to currency notes and in India  issue of currency is confined to RBI – the central banker
71.  Section 85(1) of the Negotiable Instruments Act, 1881 provides protection to the paying banker in respect of – forged endorsement
72.  To open an account of a partnership firm, the firm need not be registered
73.  On admission of a new partner in the firm with a credit balance, a new partnership letter has to be obtained and operation to be allowed in the account as per the new mandate
74.  A company is said to be registered when it gets – certificate of incorporation from the registrar of companies
75.  A Co-parcenor is – a minor male in the Hindu Family
76.  When a “Garnishee Nisi” is served, the banker should stop operations in the judgment debtor’s account upto amount mentioned in the garnishee order and allow the operations for balance amount
77.  A loan sanctioned to a minor has been guaranteed by Zeeba. Minor fails to pay – should forego the loan as minor is not competent to contract and the contract entered into with a minor is void
78.  Registration of mortgage is compulsory- except mortgage by deposit by title deeds – if loan amount is Rs. 100.00 and more
79.  A mortgage deed being executed is required to be attested by – two persons
80.  For execution of a decree, the following cannot be attached – Personal ornaments, which as per religious usage cannot be parted with by any women; books of accounts; the wages of labourer and domestic servants and all monies payable under the policy of insurance on the life of judgment debtor
81.  Banking Ombudsman scheme is applicable to the business of – all scheduled commercial banks including Regional Rural Banks
82.  The provisions available  in the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest act, 2002 to form the Securitisation Co. – No Securitisation Reconstruction Co shall commence business without taking registration from Reserve Bank of India; Must have the owned funds of not less than two crore rupees; directors of Securitisation Co have adequate professional experience in matters related to finance Securitisation and Reconstruction and that any of its directors has not been convicted of any offence involving  moral turpitude
83.  The reason for taking a letter of continuity in a cash credit or overdraft account is to provide continuity to demand promissory note within the overall limitation period of three years and to make the document valid, irrespective of the account fluctuating between debit and credit balances
84.  A document executed for loan to a company – must be executed with the company’s common seal; on behalf of the company and by the authorized official
85.  The stamp duty payable on an instrument will be at the rate prevailing at the place where the document is executed
86.  The bank sanctioned a loan for Rs. 30 lakhs and for that mortgage deed was registered with the Registrar of assurances. The stamp duty on the mortgage deed is for fixed amount and advalorum
87.  A foreign bank is one which has been incorporated outside India
88.  A bank maintains a trust account with Zutsi , a trustee and Yuman as beneficiary. Zutsi wants to make nomination in the account – it cannot be allowed because it is not individual’s account
89.  After the death of the accountholder bank is bound to inform the nominee – if for six months nominee does not turn-up in deposit account and if for three months nominee does not turn-up in case of locker account
90.  Under which rule/act parliamentary committee on official language has been constituted – Section 4 (1) of Official Language Act
91.  A person informs you about loss of his fixed deposit receipt and requests you to issue a duplicate fixed deposit. How will you handle the request ? – The bank will issue duplicate fixed deposit on the customer’s executing the bank’s standard stamped letter of indemnity. A letter intimating lost and request for issuing duplicate is taken. One or two acceptable sureties are also taken, each good for the amount
92.  How is a foreign spouse of NRI treated for the purpose of opening an NRI account ? – as a person of Indian origin
93.  What are the strengths of a Self Help Group organization ? – promotion of thrift and savings; practitioner of mutual help; propagation of voluntarism and purveyor of development of credit
94.  What are the weaknesses of a Self Help Organisation ? – Super Profit orientation
95.  Which rate will be applied while negotiating bills under letter of credit ? – Bills buying
96.  RBI has prohibited stapling of currency notes by a directive issued under – Section 35A of Banking Regulation act
97.  Short Bill of lading  - which does not contain printed memorandum on reverse of detaining the term and conditions of the contract of carriage
98.  A person resident in India means a person who resided in India for a period of 182 days during the previous financial year
99.  Overseas Banking Units can be established in – Special Economic Zones
100.A NRI wants premature encashment of FCNR before one year. The interest rate will be paid as follows – No interest is to be paid if the deposit has not run for minimum prescribed period – i.e. one year

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