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NSE - National Stock Exchange of India Ltd.

NCFM Model Test Paper

Banking Sector Module

Maximum Marks: 100

Test Duration: 120 m inutes

Pass Marks: 60

Time Left: 119:36 m inutes

Q1

RTGS Transfers _____________. [ 3 Marks ] (a) happen in batches of 1 hour (b) happen in batches of half an hour (c) are instantaneous (d) happen in batches of tw o hours (e) I am not attempting the question

Q2

Investment classified under Held to Maturity category need not be _________. [ 3 Marks ] (a) recorded (b) marked to market (c) accounted for (d) traded (e) I am not attempting the question

Q3

_________ is a key determinant indicating availability of banking services for the entire economy. [ 1 Mark ] (a) RTGS (b) NEFT (c) Reach of bank netw ork (d) Number of bankers (e) I am not attempting the question

Q4

Usufructurary mortgage w ith personal liability of mortgager is nothing but ________. [ 3 Marks ] (a) Anomalous mortgage (b) English mortgage (c) Equitable mortgage (d) None of the above (e) I am not attempting the question

Q5

"A borrow er defaults on a secured loan of Rs. 50,000. The underlying security is w orth Rs. 60,000. Which of the follow ing is true? " [ 1 Mark ] (a) "Bank can retain Rs. 50,000. Balance Rs. 10,000 has to be paid to the borrow er." (b) Bank cannot sell the underlying security because its value is higher than loan. (c) "Bank can retain the entire Rs. 60,000" (d) "The excess of Rs. 10,000 has to be shared equally betw een the bank and the borrow er." (e) I am not attempting the question

Q6

Which of the follow ing is true of Reverse Repo rate? [ 1 Mark ] (a) Determined by free market forces (b) Low er than repo rate (c) benchmark for long term rates (d) Part of funding cost for commercial banks (e) I am not attempting the question

Q7

The relevant banking ombudsman for filing a complain regarding credit card w ith central processing is the one under w hose jurisdiction __________. [ 2 Marks ]
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w hose jurisdiction __________. [ 2 Marks ] (a) the head office of the bank falls

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(b) the central processing center of the bank falls (c) the nearest bank branch falls (d) None of the above (e) I am not attempting the question Q8 Which of the follow ing is true in the case of transfer of financial asset under SARFAESI? [ 2 Marks ] (a) "Charge does not need to be registered, even if borrow er is company." (b) Original borrow er does not need to be informed. (c) Both of the above (d) None of the above (e) I am not attempting the question Q9 "In the BASEL framew ork, first pillar stands for:" [ 1 Mark ] (a) Minimum capital requirements (b) Market Discipline (c) Supervisory Review Process (d) Monetary stability (e) I am not attempting the question Q10 Vehicle finance is made cheaper through _________. [ 1 Mark ] (a) Better insurance cover (b) Special arrangement w ith manufacturer (c) Navigation system in the car (d) Higher engine capacity (e) I am not attempting the question Q11 Investment in NRO may be made through _________. [ 2 Marks ] (a) Remittance from abroad (b) Transfer from NRE (c) Either of the above (d) None of the above (e) I am not attempting the question Q12 CAMELS framew ork w as first used in _______. [ 2 Marks ] (a) UK (b) Canada (c) India (d) US (e) I am not attempting the question Q13 "A borrow er w ho has been given notice of enforcement of security interest, replies w ith his objections. What is expected of the secured creditor? " [ 3 Marks ] (a) Consider the objections fairly (b) "If objections not acceptable, convey to borrow er w ithin 7 days" (c) Both of the above (d) None of the above (e) I am not attempting the question Q14 SHG stands for: [ 1 Mark ] (a) Society Housing Group (b) Society Household Group (c) Self House Group www.nseindia.com/education/dynaContent/bsme_paper.htm
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(c) Self House Group (d) Self Help Group (e) I am not attempting the question Q15 "When a customer opts for a safe deposit locker, the bank becomes a _______." [ 2 Marks ] (a) Debtor (b) Creditor (c) Lessee (d) Lessor (e) I am not attempting the question Q16 Deposit insurance covers _______. [ 3 Marks ] (a) Savings (b) Current (c) Term (d) All of the above (e) I am not attempting the question Q17 The person to w hom payment is to go under a bill of exchange is called _______. [ 2 Marks ] (a) Payee (b) Beneficiary (c) Either of the above (d) None of the above (e) I am not attempting the question Q18 Which of the follow ing is an aspect of the first principle underlying Supervisory Review Process in Basel framew ork? [ 2 Marks ] (a) Banks should have a process for assessing their overall capital adequacy in relation to their risk profile. (b) Banks should have a strategy to maintain their capital level. (c) Both of the above. (d) None of the above. The act does not define a banking company. (e) I am not attempting the question Q19 "Which of the follow ing can benefit from SARFAESI, 2002?" [ 1 Mark ] (a) Banks (b) Financial Institutions (c) Both of the above (d) None of the above (e) I am not attempting the question Q20 The second pillar in the Basel framew ork seeks to help participants to assess w hich of the follow ing information? [ 3 Marks ] (a) Risk exposure (b) Risk assessment process (c) Both of the above (d) None of the above (e) I am not attempting the question Q21 "To be sure to receive same day credit on a Saturday, NEFT instruction has to be given by _______." [ 2 Marks ] (a) 12 Noon (b) 11:00 AM (c) 11:30 AM (d) 12:30 PM (e) I am not attempting the question
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(e) I am not attempting the question

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Q22 Handing over Warehouse Receipt is an example of ________. [ 1 Mark ] (a) Constructive Delivery (b) Actual delivery (c) Intangible delivery (d) None of the above (e) I am not attempting the question Q23 Which of the follow ing is a secondary identifier _______. [ 3 Marks ] (a) Date of Birth (b) Nationality (c) Both of the above (d) None of the above (e) I am not attempting the question Q24 On w hich of the follow ing grounds can banking ombudsman reject a complain? [ 2 Marks ] (a) Already taken to consumer court (b) Not approached bank first (c) Either of the above (d) None of the above (e) I am not attempting the question Q25 ________ account is maintained by businesses for their daily operations. [ 1 Mark ] (a) Current (b) Savings (c) Fixed Deposit (d) Recurring Deposit (e) I am not attempting the question Q26 Criminals use ______ to camouflage money flow from criminal activities and pass it off as regular legal money flow s. [ 1 Mark ] (a) Money Laundering (b) Smuggling (c) Drug Trafficking (d) PayPal (e) I am not attempting the question Q27 Open Market Operations is an important tool for central banks in ___________. [ 1 Mark ] (a) bullish equity market conditions (b) bearish equity market conditions (c) countries w here debt market is developed (d) countries w here debt market is under-developed (e) I am not attempting the question Q28 The largest commercial bank in the country is ________. [ 1 Mark ] (a) ICICI Bank (b) State Bank of India (c) Central Bank of India (d) Reserve Bank of India (e) I am not attempting the question Q29 International credit cards can be used by Indians for _________. [ 2 Marks ] (a) international travel
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(b) international magazines

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(b) international magazines (c) international softw are (d) Any of the above (e) I am not attempting the question

NSE - National Stock Exchange of India Ltd.

Q30 Which of the follow ing is / are RBI conditions applicable for banks declaring dividends? [ 3 Marks ] (a) To be paid out only from current year profits (b) Minimum capital adequacy of 9% to be maintained (c) Net NPAs to be below 7% (d) All of the above (e) I am not attempting the question Q31 "When a customer deposits cheque w ith a bank for clearing, the customer becomes a _______." [ 1 Mark ] (a) Debtor (b) Principal (c) Creditor (d) Agent (e) I am not attempting the question Q32 Actionable claim cannot be a debt that is secured by _________. [ 3 Marks ] (a) Mortgage of immovable property (b) Hypothecation of movable property (c) Pledge of movable property (d) All of the above (e) I am not attempting the question Q33 In w hich of the follow ing situations w ould an agreement w ithout consideration be valid? [ 1 Mark ] (a) in w riting and registered (b) promise is to compensate some one w ho has already done something for the promisor (c) Either of the above (d) None of the above (e) I am not attempting the question Q34 Interest on savings bank accounts is paid on _______. [ 1 Mark ] (a) low est balance betw een 10th and 30th of the month (b) low est balance betw een 10th and the end of the month (c) daily balance during the month (d) low est balance betw een 1st and 10th of the month (e) I am not attempting the question Q35 "Tier 1 in the Basel framew ork includes each of the follow ing, except ______." [ 1 Mark ] (a) Permanent shareholders equity (b) fully paid ordinary shares (c) perpetual non-cumulative preference shares (d) Undisclosed reserves (e) I am not attempting the question Q36 Under _________ w orking capital limits are determined based on financial projections. [ 1 Mark ] (a) Cashcredit (b) Overdraft (c) Bill Purchase (d) Bill Discount (e) I am not attempting the question
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NSE - National Stock Exchange of India Ltd.

Q37 Fine in case of cheque bouncing can go up to _________. [ 2 Marks ] (a) tw ice the cheque amount (b) cheque amount (c) thrice the cheque amount (d) Rs. 5 lakh (e) I am not attempting the question Q38 A fraud is discovered w ith respect to an loan that has turned NPA. When is the earliest that it can be treated as a doubtful asset? [ 1 Mark ] (a) Immediately (b) Has remained sub-standard for upto 2 quarters (c) Has remained NPA for upto 1 quarter (d) Has remained NPA for upto 1 year (e) I am not attempting the question Q39 Which of the follow ing is false of simple mortgage? [ 2 Marks ] (a) Registration is mandatory (b) Rights may be expressed in the mortgage deed or implied (c) Possession remains w ith mortgager (d) Mortgager accepts personal liability to pay mortgage money (e) I am not attempting the question Q40 Cash credit is treated as out of order if ____________. [ 1 Mark ] (a) No credits continuously for 90 days (b) Credits not adequate to cover interest for 90 days (c) Either of the above (d) None of the above (e) I am not attempting the question Q41 Which of the follow ing are non-fund faced facilities? [ 1 Mark ] (a) Financial Planning (b) Executor & Trustee (c) Locker (d) All of the above (e) I am not attempting the question Q42 _________ are a key vehicle through w hich RBI implements its monetary policy. [ 1 Mark ] (a) Banks (b) Governments (c) Corporations (d) NGOs (e) I am not attempting the question Q43 The minimum amount for secured lenders to take the benefit of SARFAESI is _______. [ 3 Marks ] (a) Rs. 1 lakh (b) Rs. 5 lakh (c) Rs. 10 lakh (d) Not specified (e) I am not attempting the question Q44 An agreement to sell becomes a sale w hen _________. [ 3 Marks ] (a) prescribed time elapses (b) prescribed conditions are fulfilled
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(b) prescribed conditions are fulfilled (c) Either of the above (d) None of the above (e) I am not attempting the question

NSE - National Stock Exchange of India Ltd.

Q45 RBI has stated that KYC of banks should incorporate the follow ing elements __________. [ 1 Mark ] (a) Customer Acceptance policy (b) Customer identification procedure (c) Monitoring of transactions (d) All of the above (e) I am not attempting the question Q46 Which of the follow ing is / are demand liabilities? [ 1 Mark ] (a) Cash Certificates (b) Gold deposits (c) Current deposits (d) All of the above (e) I am not attempting the question Q47 An indorser is liable to pay interest on delayed payment from ________. [ 2 Marks ] (a) date of indorsement (b) due date of instrument (c) date of notice of dishonour (d) None of the above (e) I am not attempting the question Q48 Which of the follow ing can be a scheduled bank? [ 1 Mark ] (a) Public Sector Banks (b) Private Sector Banks (c) Co-operative Banks (d) All of the above (e) I am not attempting the question Q49 Which of the follow ing is true of mortgage? [ 1 Mark ] (a) Lender is morgager (b) Typical of hypothecation (c) Possession handed over w hen charge created (d) Transfer of interest on specific immoveable property (e) I am not attempting the question Q50 Each of the follow ing is a function of Reserve Bank of India except _______. [ 1 Mark ] (a) Lending to corporates (b) Regulate issue of bank notes (c) Secure monetary stability (d) Operate currency and credit system (e) I am not attempting the question Q51 The third pillar in the Basel framew ork seeks to help participants to assess w hich of the follow ing information? [ 3 Marks ] (a) Scope of application (b) Capital (c) Both of the above (d) None of the above (e) I am not attempting the question
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NSE - National Stock Exchange of India Ltd.

Q52 Investment in FCNR may be made through ________. [ 1 Mark ] (a) Remittance from abroad (b) Transfer from NRE (c) Either of the above (d) None of the above (e) I am not attempting the question Q53 "BIS handles each of the follow ing, except ________." [ 1 Mark ] (a) Forum to promote discussion and policy analysis (b) Centre for economic and monetary research (c) Credit rating of global banks (d) Prime counter-party for central banks (e) I am not attempting the question Q54 "Each of the follow ing has become a problem w ith MFIs in India, except _______." [ 2 Marks ] (a) Excessive financing (b) reach (c) financing for consumption (d) inappropriate modes of recovery (e) I am not attempting the question Q55 Which of the follow ing are covered in the Banking Ombudsman Scheme? [ 2 Marks ] (a) Scheduled Primary Co-operative Banks (b) RRBs (c) Both of the above (d) None of the above (e) I am not attempting the question Q56 "Betw een the four items - Deposits; Borrow ings; Reserves & Surplus; and Capital, w hich w ould appear last in the balance sheet of a bank?" [ 1 Mark ] (a) Borrow ings (b) Deposits (c) Reserves & Surplus (d) Capital (e) I am not attempting the question Q57 Which of the follow ing w ould make a consideration unlaw ful? [ 1 Mark ] (a) Forbidden by law (b) Not in w riting (c) Both of the above (d) None of the above (e) I am not attempting the question Q58 Higher interest based on age is offered in w hich of the follow ing accounts? [ 1 Mark ] (a) Savings (b) Term (c) Current (d) All of the above (e) I am not attempting the question Q59 "While granting a bank license, RBI considers all of the follow ing, except ________." [ 2 Marks ] (a) ability to pay depositors (b) price of equity share of company
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(c) character of proposed management (d) w hether public interest w ill be served by grant of license to the company (e) I am not attempting the question Q60 _______ is an unconditional w ritten order to pay money. [ 1 Mark ] (a) Bill of Exchange (b) Cheque (c) Both of the above (d) None of the above (e) I am not attempting the question

Done

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