Tuesday, November 20, 2012



01. Substandard restructured accounts will become standard - after 12 months of regular repayment of instalments
02. Short duration crop loan will become NPA - after two crop seasons
03. Interest on NPA account will be recognized as income after – it becomes due and received
04. A is having a savings bank account and also one overdraft account with debit balance with the bank. The bank can adjust the credit balance in savings bank account with the debit balance in overdraft account using right of set off
05. X is having a loan account duly guaranteed by Mr and Mrs Y. They are having a fixed deposit for Rs. 40000.00 with maturity value of Rs. 57010/- X defaulted in repayment of the loan and bank on maturity adjusted the loan account of X with the maturity value of fixed deposit and credited the balance to savings bank account of Mr. Y and Mrs. Y. Mr Y and Mrs Y objected to this adjustment since the loan is time barred – bank has the  right of set off which it has correctly used (presuming that notice had been given for doing so)
06. XYZ and ABC are two firms having the same partners in both the partnership firms. One firm is having a debit balance and other firm is having a credit balance -  partners being the same, right of set off can be applied
07. A solicitor is having two accounts with the bank. One in personal name and other in clients name. One cheque is presented in “clearing” in clients account. In the meantime, garnishee order is served on the solicitors’ account. Whether bank will pay this cheque presented in the clearing ? – Cheque will be paid, since it relates to client account, which the solicitor has opened in the fiduciary capacity.
08. Mr D is having one overdraft account with us. He is also having three other accounts with us, (namely) his personal savings bank account, joint account with his wife and one guardianship account with his son. Bank can use right of set off in which of these accounts ? – right of set off is available in personal savings bank account only
09. Mr. Seth is having current account with us. He has appointed his son 16 years of age, as his agent. Can the minor operate this account after this ? – Since he is agent, he can operate it
10. Mr. Sharma has given irrevocable power of attorney to Mr Verma to operate his current account as an agent for one year. After three months, he has decided and gives notice to the bank that Mr. Verma’s authority stands withdrawn. On the contrary, Mr.Verma’s plea is that since he has been appointed as agent for one year, he has every right to operate the account. What will be the position of the bank now to deal with it ?– The bank has to stop the authority of Mr. Verma from being used.
11. A minor 16 years of age, is having a fixed deposit of Rs. 10000.00 with the bank. He requested before maturity payment of the deposit. Can bank allow before maturity payment ? – the bank can accept the request of the minor
12. Incase a minor is appointed as a nominee for a term deposit and when death of the depositor takes place – payment can be obtained by the guardian of the minor on his behalf
13. After the death of locker holder his daughter comes to the bank with the key to operate the account. What is the course of action that will be suggested by the bank ? – get a letter of administration
14. A company is having immovable property in Bangalore, its registered office is in Chennai and the company is willing to avail bank limits in Mumbai. Where the EMT can be created ? – any one of the above cities presuming that all are notified centres
15. Where a company is failing in filing particulars of charge on its assets, with Registrar of Companies, who has got the right to file particulars of the charge with the registrar of companies ? – Creditors of the company
16. In case of non-registration of charge on assets, in case of a company, the charge will become – void before the liquidator
17. A trust is maintaining account with the bank operated by three trustees. One of them issued a cheque for credit to his savings bank account. What precautions bank will take ? – Cheque cannot  be paid unless proper enquiry is made and the bank is satisfied
18. What is the ceiling of subsidy under SGSY scheme for self help group ? – Rs. 1.25 lakhs
19. In case of KCC, what will be the quantum of insurance in case of death of the borrower(farmer) ? – Rs. 50000.00
20. Vehicle loan financed by banks are registered with Road Transport Authority with the sole objective of – getting the charge in favour of the bank so that borrower can not sell the vehicle without the permission of the bank
21. Under Credit Guarantee Fund scheme, the maximum amount of claim for non fund based limits is – none
22. For group exposure purpose, the non fund based limit sanctioned to a borrower are to be reckoned at which of the following – 100%
23. A company is having stock of Rs. 20 lakhs stored at its godown. It is insured for Rs. 10 lakhs. The company has sent stocks for Rs. 4 lakhs for processing at some distant place where it gets destroyed at the place of processing by fire. What  amount of claim will be adminissible ? – Nil
24. Contribution in break even point is equal to – selling price less variable cost
25. Which of the following is the objective of introduction of KYC  ? – Check undesirable customers and stop money laundering
26. XYZ Limited, a company, has  paid capital and free reserves of Rs. 100 crores and it has already borrowed a sum of Rs. 150 crore on long term basis. It wants to raise debentures of seven years. What statutory compliance, the company will need to make ? – The company’s shareholders will be required to pass a resolution in the general body meeting authorizing the board of directors for the proposed borrowing
27. Digital signature means – a coded confirmation in electronic form attached to an electronic record
28. Pari passu charge in case of a consortium advance by banks to a big borrower means which of the following ? – Each bank will have a pro-rata charge on the security in the ratio of their outstanding within the limits approved by the consortium.
29. Which of the following net working systems will be used by an organization having office in one building ? – Local Area Net Work
30. An original draft is reported as lost. Its duplicate is issued and is presented in clearing. It is subsequently found that the original draft is already paid in bank’s records – Duplicate will be returned unpaid
31. A endorsed a cheque in favour of B and B endorsed it to C who just signs the cheque. The cheque is stolen by D, who endorsed the cheque in favour of Ashok (an old creditor of the D) for valid consideration. Ashok took the payment of the cheque. In this case Ashok is liable to whom ? – He is not liable to anyone since he is a holder in due course
32. A cheque dated: 12.10.2009 is presented for payment on October 27,2009. It is however observed  that the cheque book from which the cheque was issued had been issued  to the customer on 22.10.2009. What would the bank to  do with the cheque ? – The cheque would be paid, if it is otherwise in order
33. Your branch receives a cheque written in three different inks and three handwritings – the cheque will be paid
34. What do you mean by Swap ? – simultaneous purchase of forward and sale of spot currency
35. What is overbought position in case of Foreign Exchange ? –Foreign exchange purchased is more than foreign exchange sold
36. In the case of cash credit account, the first credit will be adjusted against which of the following ? – It will be set-off against the first debit
37. When a party is allowed post-shipment credit, what is the maximum normal time period, during which it is expected to get the foreign exchange realized ? – six months
38. Which of the following meets the feature of a deferred payment guarantee ? – A guarantee where payments  to be made in instalments are guaranteed
39. A firm receives raw material from abroad for processing thereof and subsequently to be re exported after processing. What kind of guarantee shall be issued for this ? – Performance guarantee.
40. You are approached by an SSI unit that is engaged in an industry, where raw material is available in a particular season of two months only. The assessment of working capital for this would be made by the bank – as per cash budget method
41. The risk that arises to a bank due to failure of internal process is called – operational risk
42. A partnership firm brings additional funds in the business, but it creates fixed assets out of these funds, which of the following ratio would be affected ? – Debt Equity Ratio
43. Compared to the previous, there has been increase in the fixed assets of a firm to the extent of Rs. 5.00 lakhs but its long term liability and net worth increased by Rs. 4.00 lakhs. It would effect – current ratio
44. The comparison of the balance sheet of a firm reveals that its long term uses are lower at 75% of its long term sources. Which of the following must be true ? – Change in Current Ratio
45. A firm had a current ratio of 2:1 and its current liabilities at Rs. 15.00 lakhs. What will be the amount of net working capital of the firm ? – Rs. 15.00 lakhs
46. Working capital term loan to SSI – related committee – Tandon committee
47. Education cess is to be used towards – Primary Education
48. Limit for Lok Adalat – Rs. 20 lakhs
49. Which banks have banking operations in Russia ? – State Bank of India and Canara Bank subsidiary called – Commercial Bank of India
50. Can a joint stock company become a partner in a partnership firm ? – Yes
51. How many working directors are there in a nationalized bank ? – Two
52. If a financial director of a company expires, what will be done with the cheque signed by him ? – Bank can make the payment
53. Counter guarantee for a bank guarantee is – an indemnity
54. Letter of Credit - where the packing credit can be allowed to exporter ? – Red Clause letter of credit
55. How many times a transferable letter of credit can be transferred ? – Once only
56. Where on the strength of one letter of credit another letter of credit can be established ? – it is called “back to back letter of credit”
57. Where within the letter of credit already issued more than one drawings are permitted on roll over basis ? – Revolving Letter of Credit
58. If the depositor obtains a loan against a fixed deposit, name of another person can be added – On repayment of loan
59. Prepaid insurance is classified as – Current Asset
60. Net Working Capital – Current assets minus Current liabilities or Long term sources less Long term uses
61. Working capital limit of Rs. 20 crores can be sanctioned under which method ? – Conventional method or  Tandon Committee
62. Under Nayak Committee, the level of sales is – 5 times the minimum working capital limit or 4 times the minimum level of working capital
63. Advance allowed  to a State Sponsored Corporation for on lending to weaker sections in rural areas – Indirect finance to agriculture
64. Amount ceiling for reporting under K Y C – Rs. 10 lakh summation
65. Credit Guarantee Fund scheme –benefit to bank – lower capital adequacy and lower provision in case of account becoming NPA
66. NPA can remain for 90 days as standard assets and beyond that it will be treated as substandard assets
67. RBI committee on procedures and audit – Headed by S.S Tarapore
68. Deduction from salary for union subscription – Check off facility
69. Statement of unclaimed deposits to Reserve Bank of India – Under section 26 of Banking Regulation act-1949
70. Definition of hypothecation – described in Sarfaesi act - 2002
71. Cheque written in different scripts – say Tamil and English – valid and it can be paid
72. Debtor turnover ratio – indicates efficiency of collection of book debts
73. In case of former and survivor deposit – addition of name or closure of account, possible with signature of all accountholders
74. On payment of loan by the guarantors, what kind of right is vested with him ? – Right of subrogation
75. What is the objective of SGSY scheme ? – To bring people below poverty line to above poverty line
76. Non negotiable crossing – a warning to endorsee
77. What kind of charge is possible on receivables ? – assignment
78. In hypothecation, with whom is the possession or ownership ? – borrower
79. Locker on either or survivor operation basis – One reports loss of key and the other comes to operate with the key – locker is allowed only by joint operation in this situation.
80. Bailee and bailor defined in – Indian Contract Act
81. Dishonour of cheques by mistake – Payee claims damages from bank – bank is  liable to drawer only
82. Account of foreign bank with a branch of bank in India – Vostro
83. If forged Rs. 500 currency note is received at the counter – a statement received  from the tenderer and the currency note have to be handed over to the police authorities
84. Booting is called – starting a computer
85. Input – data fed into a computer
86. Selling of foreign exchange – delivery of forex to the customer in lieu of Indian rupees
87. Law charges to be debited to – Profit and Loss account
88. Memorandum of association of a company – a document guiding relationship with third parties or outsiders
89. Under-insurance of security – loss can occur due to application of average clause
90. For acknowledgment of debt, the Central Government has prescribed the payment of stamp-duty at which of the following rates – different in each State as prescribed by the State Government
91. When a bank grants a loan to a borrower on the basis of hypothecation of the assets, with whom does the possession and ownership remain  ?– borrower
92. What is the amount  of limit in respect of priority sector advances in general, where the banks do not charge inspection and service charges ? – Rs. 25000.00
93. The term - mulberry relates to– Sericulture
94. What is the maximum amount of a transaction, that can be carried under electronic funds transfer (E F T) facility being operated by RBI – no ceiling
95. Which of the following committees, introduced the term – working capital term loan representing excess borrowing by a borrowing unit ? – Tandon Committee
96. Tax deducted at source while making payment to a contractor should be deposited with the Government within a period of – seven days from the date of deduction
97. Which of the following is the formulae for working out current ratio in respect of a trading concern ? – Current assets/Current liabilities
98. While sanctioning a term loan to a company, which of the following ratios is most relevant and taken into account by the financing bank ? – Debt Service Coverage Ratio
99. Which of the following is not reflected by the study of funds flow statement of a borrowing unit ? – How the profits have been earned ?
100.The registration of which of the transactions on payment of stamp duty is mandatory in India ? – Simple Mortgage


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