BANK PROMOTION EXAMINATIONS RRE 007

RAPID READING  EXERCISE – PART:: 07

01. Foreign currency loans outside India is available against security of funds held in the accounts of – FCNR and NRE

02. RBI has introduced Comprehensive Single Return (CSR) for collection of data on – Non Resident deposits

03. Section 13 of the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act 2001, provides for a 60 days notice to a borrower to discharge in full his liabilities before such action is initiated

04. Inflow and outflow of Foreign Exchange is controlled by the government of India under the provisions of – FEMA 1999

05. The validity of import license refers to – the date on or before which the goods should be shipped by the overseas supplier

06. A letter of credit, opened in lieu of guarantee in countries like Japan is called as – stand by letter of credit

07. The last date/expiry date of the letter of credit is the last date for – submission of documents to negotiating bank

08. Deferred Payment Guarantee is a financial guarantee

09. Which committee has recommended to provide 40% to SSI sector upto Rs. 5 lakh; 20% to SSI units more than Rs. 5 lakhs  & upto Rs. 25 lakhs and balance to SSI units above Rs. 25 lakhs ? – Kapoor Committee

10. IBA’s GRACE has been replaced by – IBA’s banking practices guidelines

11. Total working capital requirement of SSI units under the turnover method of working capital assessment, would be equivalent to requirement of minimum 3 months of the annual output value

12. The export declaration form used for software in non-physical form is – softex

13. BSFC would take up complaints of frauds involving Rs. 5 crores and above

14. After receipt of attachment order from the Income tax authorities – the banker can exercise right of set-off in respect of existing claim against the customers

15. The bill is drawn in London and is acceptable/payable in Mumbai and the drawee is in Chennai. The bill is – a foreign bill

16. The committee constituted by RBI for studying the functioning of Self Help Groups and non-Government  organizations was headed by whom of the following ? – Shri S.K. Kalia

17. A time of 48 hours (excluding holidays) is allowed to the drawees of which of the following ? – all usance bills

18. Every banking company is required to prepare its final accounts i.e. Profit and Loss account and Balance Sheet as on 31^st March every year in the prescribed forms as per –Banking Regulation Act, 1949

19. In the case of time barred debt the right of set off  - can be exercised by the bank provided the debts are due in the same right

20. A sum of Rs. 20000.00 is due from X. The loan is secured by the guarantee of Y. Y’s account with the bank has a credit balance of Rs. 30000.00. Can the bank exercise right of set off against the balance in Y’s account ?  - The bank can exercise right of set off only when the borrower fails and a demand is made on the guarantor

21. “A” – a farmer owning land, was granted a tractor loan with “B’ as co-borrower. The tractor was registered only in the name of “A”. When bank filed suit for recovery against A and B , B denied having received any consideration. What are the rights of the bank ? – bank has rights against  A and B – both

22. Where the cheque bears crossing with the name of a banker, such a crossing will be called – Special crossing

23. In the case of discrepancy between the amount expressed in words and figures, of a cheque, what will you do ? – The amount in words should be paid

24. Under pledge, the physical possession of the goods will be with the bank

25. You have been approached by the secretary of a reputed public trust, which has four trustees for opening a savings bank account of the trust. While inspecting the trust deed you observe that the deed does not contain any provision about the operation of the bank account. In such a situation, what will you do ? – Insist on operation by all the trustees jointly

26. When original draft and the duplicate is presented through clearing on the same day, what will you do ? – Pay the duplicate and return the original

27. A minor is not competent to receive a cheque as – drawee

28. “Sans recourse” endorsement is one which – should not be paid until the following business day

29. Section 131 of the Negotiable Instruments Act 1881 gives protection to the collecting banker against the risk of conversion. The benefits of the section will be available to the banker when he collects- a crossed cheque for a customer in good faith and without negligence

30. In the case of bill of exchange – crossing has no meaning

31. A Negotiable Instrument cannot be enforced against a minor when he signs it as – acceptor of a bill; maker of a promissory note; drawer of a cheque

32. A cheque is payable to A or order. A endorses it in favour of B. B loses the cheque. C finds it and after forging the endorsement of B delivers it to D. D for valuable consideration further endorses it to E. The cheque is dishonoured. What are the rights of E on the cheques ? – E can recover money only from D.

33. Protection is available to the paying banker in respect of – cheques drawn payable to order purports to be endorsed by or on behalf of payee; payment in due course of crossed cheques and cheques on which alteration is not apparent

34. Even after receiving the notice of minor about his attaining the majority, if the bank does not respond to inform his option – He will be held responsible for all the acts of the firm not only after his attaining the majority but also with retrospective effect

35. If the account is in debit and the partner is retiring – stop operation immediately and rule off the account, obtain an acknowledgment of liability not only from the retiring partners but also from the continuing partner and serve notice on the retiring partner that bank continues to hold him liable for the outstanding as from the date the bank is put on notice of the retirement

36.  Mr. Ignorance, an illiterate,  having a savings bank account is going abroad for a short period, requests the bank to allow Mr. Literate to operate his account. Which document you will propose in order to solve his problem ? – Power of attorney registered with the magistrate

37. A company is said to be registered when it gets – Certificate of incorporation from the Registrar of Companies

38. There is a current account in the name of M/s Kapil Dev and Sons, a Hindu Undivided Family which consists of Mr. Kapil Dev, his wife – Suman Lata and two sons – Dara Singh aged eight years and Tinku aged ten years respectively. Account is operated by Mr. Kapil Dev as Karta of the family. The bank is informed of the death of Mr. Kapil Dev in this case – the account will be operated by Suman Lata as a guardian of the eldest male member of the family

39. Under execution of a Civil Decree the following can be attached – right to future maintenance; salary to the extent of the first 1000 rupees and two-third of the remainder; tools of artisans and government securities

40. The limitation period for filing a complaint before Ombudsman – One year from the date on which  the bank has rejected the presentation and sent final reply

41. Sharma  and Praveen  have a joint account. Income tax department served an attachment order on the bank in the account of Praveen– can attach 50% of the balance in the joint account

42. X has been sanctioned a loan of Rs. 5000.00 guaranteed by Y. After sometime, X’s request for an another loan of Rs. 5000.00 was accepted without the knowledge of Y. The guarantee of Y is – available to the extent of Rs.5000/- only

43. If a usance bill is returned unpaid, a suit should be filed – within three years from the due date

44. An equitable mortgage can be created – by depositing the title deeds at notified centres with the intention to create the security of the loan

45. A document executed for loan to a company – must be executed with the company’s common seal; must be executed on behalf of the company and must be executed by the authorized officials

46. The effect of a document being time barred by limitation is – no legal remedy will be available

47. The rate at which RBI rediscounts bill of exchange is called – Bank rate

48. In relation to a company, the term – “ULTRA VIRES” – means – an action outside the Memorandum of Association

49. A has savings bank account and wants to make nomination in favour of his minor son – Nomination in favour of a minor can be allowed only when a person is also appointed/nominated who can receive the payment on behalf of the minor if the accountholder dies during his minority

50. If the female employed makes a complaint to the employer for sexual harassment at work place, how this situation can be handled ? – Bank is bound to inform the appropriate outside investigating authority about the complaint as the offence relates to moral turptitude.

51. What is called “Working Knowledge” in Hindi ? – Hindi as a subject at Matriculation

52. The new category of account i.e. – “Special Mention Asset category ” or “Special Watch Category” introduced by RBI is for – internal monitoring by banks

53. The sale price of a pen is Rs. 40.00 per piece. Variable cost is Rs. 22.00 per piece. Overhead cost of unit is Rs. 2160000.00. At what sales volume, will the unit break even ? – 120000

54. The guarantor of a customer has the right – to be informed only about the extent of his liability

55. Loans/overdrafts to farmers against fixed deposits/Indira Vikas Patras etc are to be classified as – indirect finance to agriculture

56. New private sector banks are required to have 25% of the branches in rural/semi urban areas

57. Custody of bill of lading is – when bill is submitted in the custody of the bank

58. 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

59. Overseas Banking Units are proposed to be exempted from – CRR; SLR and Priority Sector

60. Under ‘INCOTERMS’, the term “FOB” indicates – Free on board

61. The statutory authority who control Trade Control is – DGFT(Director General of Foreign Trade)

62. Non- Resident Ordinary (NRO) accounts may be opened by means of – direct inward remittance from abroad in an approved manner; by encashment  of foreign currency notes/coins and foreign travelers  cheques and by conversion of the existing resident accounts

63. For the visit to the following countries, a traveler is not eligible for any basic travel quota – Nepal and Bhutan

64. What do you understand by the word – “SION” ? – Standard input/output norms

65. If the expiry date of a LC falls on a holiday the documents are to be submitted to the negotiating bank – on the preceding working day

66. If the letter of credit is silent about partial shipment or transshipment – both are permitted

67. Delayed renewal or review of a borrowal account from the due date would render the account as NPA if the delay is 180 days or more

68. Section 19(2) of Banking Regulations Act provides that the bank cannot possess shares of any company as pledge, mortgagee or absolute owner, if – both the above limits are applicable, but whichever is less

69. Which section of the respective act covers the SLR ? – Section 24 (2A) of Banking Regulation Act – 1949

70. Abhinav endorses a cheque in favour of Bhawana and writes the words – “notice of dishonour waived” – it is a restrictive endorsement

71. The bill is drawn in Mumbai and is acceptable/payable in Chennai, but the drawee is at New York. The bill – is an inland bill

72. As per section 45 (ZA) of Banking Regulation Act, 1949 – nomination facility has been granted for bank deposits

73. As per section 20, 21 and 21A of RBI act, Reserve Bank of India regulates flow of credit to economy by variations in SLR and CRR

74. ‘SEMFEX-I” pertains to – setting up of SSI units

75. Rajarani – a Hindu lady after death of her husband marries Raj Kumar. Thereafter Rajrani approaches you as a natural guardian of her son from earlier husband. Who will be the guardian ? – mother

76. Under section 26 of Negotiable Instruments Act – a minor can draw, accept endorse and negotiate bills of exchange,  promissory notes or cheques binding all parties except himself

77. Persons who are not allotted PAN are to make declarations – on Form No: 60

78. A balance sheet shows fixed assets, non-current assets and current assets as Rs. 30 lakhs. If there are no intangible assets and the long-term sources are Rs. 16 lakhs. What is the net working capital ? – Rs. 14.00 lakhs

79. On perusal of a balance sheet it reveals that the current ratio is 2:1. The net working capital is Rs. 100000.00.  Arrive current liabilities:. -  The current liabilities will amount to: - Rs. 100000.00

80. In a balance sheet, amount of total assets is Rs. 10 lakhs, current liabilities – Rs. 5 lakhs and capital and reserves – Rs. 2 lakhs. What is the debit equity ratio ? – 1.5:1

81. Total of liability side of a balance sheet is Rs. 16 lakhs, debt equity ratio – 2:1 and long-term liabilities of Rs. 8 lakhs. If current assets are Rs. 4.75, the net working capital will be – Rs. 75000.00

82. Profit to sales is 2% and amount of profits is Rs. 5 lakhs – Sales will be Rs. 250 lakhs

83. Contingent liabilities are those – which may arise or may not arise

84. In assessment of working capital requirements, the operating cycle of the business/industrial activity consists of which of the following period and processes ? – acquisition and storage of raw materials after deducting the period of credit allowed by the creditors; storage of finished goods before releasing them for sale and period credit allowed to debtors

85. On perusal of a balance sheet it is revealed that the current ratio is 3:1 and the net working capital is Rs. 80000.00. The current assets will amount to Rs. 120000.00

86. Credit limit for marketing of crops (pledge financing) for farmers has been raised from 6 months to 12 months

87. Committee on Camels Rating was headed by – S. Padmanabhan

88. The committee on rationalization of interest rates on small savings was headed by – Y V Reddy

89. What is “Right of redemption “ ? – on the repayment of the debt, the mortgagor has the right to get back the mortgaged property

90. The current ratio of a company remained constant for two consecutive years but Quick Ratio decreased from 1.6:1 to 1:1. In the next year, which one of the following conclusions is certainly true based only on this data ? – Company’s stocks on a percentage of current assets have increased in the second year

91. Your branch has sanctioned a loan of Rs. 25000/- to Amit, who it was noticed later, was a minor. Shri Bhaman had guaranteed the loan. – Since Amit, being a minor, he is not liable and  as such guarantor is also  not liable as his liability is co-existence with the principal debtor

92. ABC and Co have been sanctioned cash credit limit of Rs. 10 lakhs against paid stocks (margin-30%) and book debts upto 90 days (margin 50% with a submit of Rs. 2 lakhs. The company had stocks worth Rs. 20 lakhs. Sundry Creditors for goods Rs. 10 lakhs and book debts upto 90 days – Rs. 15 lakhs. How much amount can they draw against this security ? – Rs. 9.00 lakhs

93. In assessment of working capital requirements, the operating cycle of the business/industrial activity consists of which of the following periods and processing ? – Acquisition and storage of raw materials after deducting the period of credit allowed by the creditors and storage of finished goods before releasing them for sale

94. While analyzing the balance sheet of M/s Amar and co, you notice that long term uses are 120% of long term sources. Such a position would generally indicate – deterioration in current assets

95. The charge that the bank gets in respect of supply bills is – assignment

96. Right of set off cannot be exercised by the bank in respect of – a contingent debt like guarantees and letter of credits

97. Special crossing means – any bank’s name with or without two parallel lines

98. When a bill payable to Shri Yadav or order is endorsed by him adding words, “Notice of dishonour not required” – such an endorsement is called – facultative endorsement

99. The holder of a negotiable instrument is holder in due course if – he receives the instrument in good faith and without negligence; he receives the instrument before its maturity and he receives the instrument for lawful consideration

100.The correct endorsement on a cheque by Dr. Narayan Dutt is – Narayan Dutt(Doctor)

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