1) What is the sales turnover limit to classify an account under Regularly Retail Portfolio

under BASEL II norms?

A. Upto Rs 10 crores
B. Upto Rs 50 crores
C. Upto Rs 100 Crores
D. No Sales Turnover norms
E. Only Size of Balance Sheet is reckoned

2) What is BCBS?
A. Basle Committee on Banking Supervision
B. Bank of Commerce Bumiputra Shd
C. Banking Companies Binary Software
D. Bilingual Committee on Banking Supervision
E. None of the above

3) What are the other name(s) given to Non Performing assets?

A. Impaired Assets
B. Stressed Assets
C. Assets with well defined credit weakness
D. Underperfoming assets
E. A & B & C above

4) What is the option available for computing capital on market risks?

A. Standardised Approach
B. Basic Indicator Approach
C. Standardised Duration Approach
D. Standardised Duration Approach
E. Health Code System

5) An asset which becomes NPA as soon as it is disbursed is known as

A. Quick NPA
 B. Short Mortality Account
C. Immortality Account
D. Immature Asset
E. Quick Mortality Account
Discuss this Question

6) What is the maturity period of innovative instruments raised as Tier I capital?

A. Perpetual
B. 5 years
C. Short Term equivalent to the maximum maturity of Treasury Bill
D. 5 years with an enxtension of another 5 years
E. 7 years

7) What are the elements of Tier I Capital?

A. Paid-up equity capital, statutory reserves, and other disclosed free
reserves, if any
B. Capital reserves representing surplus arising out of sale proceeds of assets
C. Innovative perpetual debt instruments eligible for inclusion in Tier 1 capital,
which comply with the regulatory require
D. Perpetual Non-Cumulative Preference Shares (PNCPS), which comply with
the regulatory requirements
E. All the above
Discuss this Question

8) What is a consoliadted Bank?

A. A Group of Banks
B. A Group of entities where a licensed bank is the controlling entity
C. A Group of Banks likely to be merged
D. State Bank of India
E. Indian Banks Association
9) Who is counter party in Bank credit transaction?
A. The person who stands across the counter to remit the EMI or part payment.
B. The third paty guarantor
C. The Co obligant
D. A party to whom a bank has an on- or off-balance sheet credit exposure.
E. The consultant who canvasses business

10) What are the various other risks not comprehensively covered under BASEL II
norms?
A. Interest rate risk in the banking book and Credit concentration risk
B. Liquidity risk Settlement risk Reputational risk Strategic risk Risk of
weakness in the credit-risk mitigants
C. Risk of under-estimation of credit risk under the Standardised approach
D. “Model risk” i.e., the risk of under-estimation of credit risk under the IRB
approaches Residual risk of securitisation
E. All the above
Discuss this Question

11) What is hair cut in Basel II?

A. A haircut is a percentage that is subtracted from the par value of the assets that
are being used as collateral
B. The size of the haircut depends on the riskiness of the security offered as
collateral
C. Deduction from Capital
D. Deduction from risk weight
E. A & B above
Discuss this Question

12) In the comprehensive approach, when taking collateral, banks will need to calculate
their adjusted exposure to a counterparty for capital adequacy purposes in order to take
account of the effects of that collateral. Banks are required to adjust both the amount of the
exposure to the counterparty and the value of any collateral received in support of that
counterparty to take account of possible future fluctuations in the value of either, occasioned
by market movements. These are referred as ______.
 A. Cushions
B. Deductions
C. Discount
D. Haircut
E. Exemptions

13) What is PNCPS?

A. Perpetual Non-Cumulative Preference Shares
B. Preferred Non Cumulative Preference Shares
C. Prirority Non Credit Purchase System
D. Primary Novel Cash Purchase Scheme
E. None of the above

14) In order to ensure a smooth transition to BASEL II,Banks are adivised to have a
_______ ______ and the __________ of Banks should rview the results on a __________
basis.
A. Separate programme, results, annual
B. Parallel run, Board, Quarterly
C. Simple MIS , CMD, Monthly
D. Simulation tehnique, auditors, half yearly
E. None of the above

15) Revaluation Reserve will be considered at a _______ of __ % for inclusion in Tier II

Capital
A. Exchange , 0.25
B. Cap , 100%
C. Premium , 25
D. Discount , 55
E. None of the above

16) Banks are allowed to include the ‘General Provisions on Standard Assets', Floating
Provisions ‘Provisions held for Country Exposures’, and ‘Investment Reserve Account’ in
Tier 2 capital. However, these four items will be admitted as Tier 2 capital up to a maximum
of ____ per cent of the total risk-weighted assets.
A. 100%
B. 2%
C. 75%
D. 50%
E. 1.25%

17) What is hybrid debt capital instrument?

A. It is high yielding variety of capital
B. Created by artificial semanation techniques
C. A & B above
D. Which combine certain characteristics of equity and certain
characteristics of debt
E. Quasi equity

18) When subordinated debt can be included in Tier II capital?

A. The instrument should be fully paid-up and unsecured
B. It should be subordinated to the claims of other creditors,free of restrictive
clauses
C. They should not be redeemable at the initiative of the holder or without the
consent of the Reserve Bank of India.
D. A & B above
E. A & C above
Discuss this Question

19) What is the maturity period of Subordinated debt for inclusiion in Tier II Capital?
A. Minimum five years
B. Residual maturity should bot be less than one year
C. Less Than five years and residual maturity less than 5 years
D. A & B above
E. A , B , C above
 Discuss this Question

20) What are the items to be deducted from Tier I capital?

A. Intangible assets and losses in the current period and those brought forward
from previous periods should be deducted from Tier 1 capital
B. Good will
C. Investment in Subsidiaries
D. Other intangible Assets
E. All the above

21) What is the maturity period of innovative instruments raised as Tier I capital?
A. 5 years
B. 5 years with an option to extend by another 5 years
C. Perpetual
D. Short Term equivalent to the maximum maturity of Treasury Bill
E. None of the above
Discuss this Question

22) Innovative instrument in excess of 15% of Total Tier I capital should be treated as
A. Other Time Liability
B. As Tier II Capital
C. Subject to limits prescribed for Tier 2 capital
D. B & C above
E. All the above
Discuss this Question

23) What is the rate of interest payable on innovative instrument?

A. At a fixed rate
B. Or at a floating rate referenced to a market determined rupee interest
benchmark rate
C. Bench Mark Prime Lending Rate (BPLR)
 D. Bank Rate
E. A & B above
Discuss this Question

24) What are the avialable options under innovative instrument?

A. Call Option
B. Put Option
C. American Option
D. European Option
E. In the Money or Out of the Money Option

25) While exercisng call option , what are the conditions to be satisfied?
A. After the instrument has run for at least ten years
B. Call option shall be exercised only with the prior approval of RBI (Department
of Banking Operations & Development).
C. There should not have been any default in payment of interest
D. There should not be a run on Banks during this period
E. A & B above

26) What RBI will look into when the Banks application for exercise of call option reach
them for a decision?
A. CRAR at the time of Call Option
B. CRAR after exercise of the call option
C. Net Interest Margin
D. Return on Assets
E. A & B above

27) What other option can be exercised by Banks at the time of Call Option?
A. None
B. Foreclosure
C. Step Up Option
 D. Step Down
E. Conversion
Discuss this Question

28) When Issuing Bank need not pay interest in case of Innovative Debt Instruments?
A. If the bank’s CRAR is below the minimum regulatory requirement prescribed
by RBI
B. If the impact of such payment results in bank’s capital to risk assets ratio
(CRAR) falling below or remaining below the minimum regulatory requirement prescribed
by Reserve Bank of India
C. A & B above
D. Payment of Interest cannot be defaulted
E. Payment of Interest can be deferred
Discuss this Question

29) Banks may still pay interest under innovative debt instruments with the prior approval
of RBI when the impact of such payment may result in net loss or increase the net loss,
provided the CRAR remains _____ the regulatory norm.
A. Equal to regulatory norm
B. Above
C. Below
D. Plus or Minus the regulatory norm by 5%
E. None of the above
Discuss this Question

30) Payment of interest under innovative debt instrument on a ________ basis.

A. Regular
B. Irregular
C. Cumulative
D. Non Cumulatice
E. Alternative
Discuss this Question
31) What is the claims of the investors in innovative instruments?
A. Superior to the claims of investors in equity shares
B. Subordinated to the claims of all other creditors
C. Subordinated to the International claims of all other creditors
D. A & B above
E. Subordinated to the Sovereign Claim

32) The total amount raised by a bank through innovative instruments shall not be
reckoned as liability for calculation of net demand and time liabilities for the purpose of
_______ requirements and, as such, will not attract ___ / ___ requirements.
A. Reserve , CRR/ SLR
B. Reserve, Repo/Reverse Repo
C. Quantitative, Rate/Bank Rate
D. Qualitative, Credit Control
E. All the above
Discuss this Question

33) A bank's investment in innovative instruments issued by other banks and Fiinancial
institutions will be reckoned along with the investment in other instruments eligible for
capital status while computing compliance with the overall ceiling of __ percent for cross
holding of capital among banks/FIs prescribed
A. 10
B. 15
C. 25
D. 40
E. None of the above
Discuss this Question

34) What is the amount of loan that can be granted against innovative instruments?
A. 25% of Face Value of the instruments
B. 25% of The Maturity Value of the instrument
 C. 25% of Market Value of the instrument
D. 25% of the YTM value of instrument
E. No loan can be granted

35) How the step up option can be exercised under innovative pepertual instruments?
A. Can be exercised only once during the whole life of the instrument
B. In conjunction with the call option
C. After the lapse of ten years from the date of issue
D. The step-up shall not be more than 100 bps
E. All the above
Discuss this Question

36) Market Discipline is all about ----------

A. Disclosures
B. Procedures
C. Practices
D. Principles
E. Ethics

37) Expand SREP

A. Supervisory Review and Evaluation Process
B. Special Regulatory Enabling Provision
C. Special Regional Economic Package
D. Systems Regulated Embedded Package
E. None of the above

38) What is ICAAP?

A. Internal Capital Adequacy Assessment Process
B. Institute of Chartered Accountants Accounting Procedures
C. Institute of Cost Accountants Accounting Practices
 D. Internal Capital Adequacy Actuarial Practices
E. None of the above

39) What are the four key principles in regard to the Supervisory Review Process
envisaged under Pillar 2?
A. Banks should have a process for assessing their overall capital adequacy in
relation to their risk profile and a strategy for maintaining their capital levels
B. Supervisors should review and evaluate the banks’ internal capital adequacy
assessments and strategies, as well as their ability to monitor and ensure their compliance
with the regulatory capital ratios. Supervisors should take appropriate supervisory action if
they are not satisfied with the result of this process
C. Supervisors should expect banks to operate above the minimum regulatory
capital ratios and should have the ability to require the banks to hold capital in excess of the
minimum.
D. Supervisors should seek to intervene at an early stage to prevent capital from
falling below the minimum levels required to support the risk characteristics of a particular
bank and should require rapid remedial action if capital is not maintained or restored.
E. All the above

40) What are the various other risks not comprehensively covered under BASEL II
norms?
A. Interest rate risk in the banking book and Credit concentration risk
B. Liquidity risk Settlement risk Reputational risk Strategic risk Risk of
weakness in the credit-risk mitigants
C. “Model risk” i.e., the risk of under-estimation of credit risk under the IRB
approaches Residual risk of securitisation
D. Risk of under-estimation of credit risk under the Standardised approach
E. All the above

41) Which committee recommended Income Recignition and Asset Classification norms?

A. Dr Manmohan Singh Committee

B. P Chidambaram Commmittee
C. S S Tarapore Committee
D. Robin Cook Committee
 E. Narasimham Committee

42) When an asset becomes non performing?

A. When it fails to generate any income for the borrower
B. When it fails to generate any income forthe Bank
C. When it is dead
D. When there is no performance in the unit
E. When the Bank declares the asset as non performing

43) What is out of order status in NPA accouints?

A. An account should be treated as 'out of order' if the outstanding balance
remains continuously in excess of the sanctioned limit/drawing power
B. In cases where the outstanding balance in the principal operating account is
less than the sanctioned limit/drawing power, but there are no credits continuously for 90
days as on the date of Balance Sheet or credits are not enough to cover the interest debited
during the same period
C. I f such accounts are not renewed within 180 days from the due date
D. All the above
E. A & B aboveA & B above
Discuss this Question

44) What is overdue?

A. 2 monthly dues arrears
B. 3 monthly dues arrears
C. Any amount due to the bank under any credit facility is ‘overdue’ if it is
not paid on the due date fixed by the bank.
D. 6 monthly dues arrears
E. Depends upon the repayment fixation

45) What is the method of recognising income in advances accounts?

A. Accrual basis
B. Actual record of recovery
 C. Actuarial basis
D. Accounting Standard basis
E. Case to case to basis

46) Even if there is no recovery, on what type of advances income can be recognised?

A. Advances against term deposits, NSCs, IVPs, KVPs and Life policies
B. However adequate Margin should be available in such accounts
C. Fees and commissions earned by the banks as a result of re-negotiations or
rescheduling of outstanding debts should be recognised on an accrual basis over the period of
time covered by the re-negotiated or rescheduled extension of credit.
D. All the above
E. A & B above
Discuss this Question

47) Where the finance charge component of finance income is defiened?

A. NI Act
B. Sch of Charges
C. Notes on Accounts
D. AS 19 of ICAI
E. All the above
Discuss this Question

48) If interest is debited to NPA account,where it should be parked?

A. Interest Suspense Account
B. Any Proforma Account like undebited interest
C. Banks can use their discretion
D. Banks can use their discretiion to choose either A or B
E. None of the above
Discuss this Question
49) What are the items to be deducted from Gross NPAs to arrive at Net NPAs?
A. Balance in Interest Suspense Account
B. DICGC/ECGC claims received and held, pending adjustment
C. Part payment received and kept in Sundry creditors account pending
adjustment
D. Total provisions held
E. All the above
Discuss this Question

50) While deducting provisions from Gross NPAs what are the items to be excluded?
A. Technical write off
B. Provision on standard assets
C. Recovery in Writtenn off accounts
D. A & B above
E. A & B & C above

51) What is NBV?

A. Net Block Value
B. Net Banking Value
C. Non Banking Value
D. Net Book Value (i.e., book value less provisions held)
E. None of the above

52) What is RERFA?

A. Real Effective Rate For Arbitrage
B. Reserve for Exchange Rate Fluctuations Account
C. Real Exchange Rate Fluctuation Account
D. Rate Exposure for Residenr Foreign Account
E. None of the above

53) What is the provisionig to be made for Country Risk?

 A. 0.25%
B. 100%
C. 0.25% to 100% on a graded Scale
D. According to Country Risk
E. C & D above
Discuss this Question

54) Who classifies the country risk of individual countries?

A. ECGC
B. BASEL COMMITTEE
C. IMF
D. World Bank
E. International Chamber of Commerce(IMF)

55) When a NPA can be sold by Bank to a Securitisation Company (SC)/ Reconstruction
Company (RC)?
A. Only if it has remained a non-performing asset for at least two years in
the books of the selling bank
B. As per the Banks Board Directives
C. After Clearance from RBI
D. As per Buying Bank's Board Clearance
E. B & C & D above
Discuss this Question

56) On What basis,Banks can sell NPAs to another Bank?

A. Cash Basis
B. Accrual basis
C. Sans Recourse basis
D. With recourse
E. A & C above
Discuss this Question
57) When the NPA buying Bank can once again sell it to another Bank?
A. After 15 months of holding the same in their books
B. At any time
C. But should not sell it back to the Bank from whom it was purchased
D. All the above
E. A & C above

58) The difference in assessment in the value of securities among Bank,Borrower,Auditor

and Valuer is known as
A. Convergence
B. Deviation
C. Difference
D. Divergence
E. Emergence
Discuss this Question

59) Stock Audit of NPAs with a balance of Rs 5 crore and should be conducted at
_________ intervals
A. Once in three years
B. Annual
C. Half Yearly
D. Quarterly
E. Bi Monthly
Discuss this Question

60) Colllateral immovable property should be got valued once in ___________ years
A. 2
B. 3
C. 4
D. 5
 E. 6
Discuss this Question

61) The institiutions have also a right of ____________ of their debt into equity,when
they are participating in the restructure exercise. What is this right?
A. Conversion
B. Reissue
C. Preferential issue
D. Recompense
E. None of the above
Discuss this Question

62) The creditors( participating in restructuring) right to claim their sacrifce at later date
when the company turns around, is known as
A. Sacrifice
B. Recoup
C. Subrogation
D. Recompense
E. Substitution
Discuss this Question

63) What is the arrangement under which the institution/the bank financing infrastructure
projects will have an arrangement with any financial institution for transferring to the latter
the outstanding in respect of such financing in their books on a predetermined basis?
A. Takeout Finance
B. Securitisation
C. Amortisation
D. Collateralised Liquid Adjustment Facility
E. Swaption
Discuss this Question

64) What is the provision of D2 asset?

 A. 20% on secured portion
B. 30% on secured portion
C. B & D below
D. 100% on unsecured portion
E. All the above
Discuss this Question

65) What is the provison on Standard residential housing loans beyond Rs. 20 lakh?
A. 2% on outstanding
B. At 1 per cent
C. 1% on regular portion and 2% on irregular portion
D. No Provision on standard assets
E. 5% on the value of Prime Security and 2.5% on the value of collateral security

66) The Income Recognition Asset Classification Provisioning and Capital Adequacyy
norms replced the earlier -----------------
A. Pendharkar Committee Norms
B. Health Code--based system for classification of advances
C. Secretarial Return Forms
D. Credit Administration Forms (CAF)
E. Audit Return Forms (AR)
Discuss this Question

67) Even if there is no recovery, on what type of advances income can be recognised?

A. Advances against term deposits, NSCs, IVPs, KVPs and Life policies
B. However adequate Margin should be available in such accounts
C. Fees and commissions earned by the banks as a result of re-negotiations or
rescheduling of outstanding debts should be recognised on an accrual basis over the period of
time covered by the re-negotiated or rescheduled extension of credit.
D. All the above
E. A & B above
68) For the purpose of asset classification,the accounts are to be tackled
A. Borrowerwise
B. Facilitywise
C. Individual Accountwise
D. Liabilitywise
E. None of the above

69) For the advances under Consortium Arrangements, how will you arrive at the NPA
status?
A. As per Leader Bank's Classification
B. Based on the record of recovery of the individual member banks
C. Depends upon the classification of 75% of the member Banks
D. As per Borrower's Auditor's observation
E. As per RBI Inspector's observation

70) When erosion in the value of security can be reckoned as significant to classify such
account straightaway as "Doubtful"?
A. 10 %
B. 20 %
C. 30 %
D. 40 %
E. 50 %
Discuss this Question

71) When the assets are to be classified as Loss Assets straightaway?

A. If the available value of realisable security is less than 10% of the loan
oustanding
B. If the available value of realisable security is less than 20% of the loan
oustanding
C. If the available value of realisable security is less than 50% of the loan
oustanding
 D. If the available value of realisable security is less than 75% of the loan
oustanding
E. If the available value of realisable security is less than 100% of the loan
oustanding

72) What type of adavnces need not be traeted as NPA at all?

A. Advances against term deposits, NSCs eligible for surrender, IVPs, KVPs and
life policies
B. Advances against gold ornaments, government securities and all other
securities
C. Provided adequate margin is available in the accounts
D. A & B above
E. A & C above
Discuss this Question

73) Which type of advances should be treated as NPA in spite of adequate margin is
available in these accounts?
A. Advances against term deposits, NSCs eligible for surrender, IVPs, KVPs and
life
B. Advances against gold ornaments
C. Advances against government securities and all other securities
D. All the above
E. B & C above
Discuss this Question

74) An account is given holiday period for servicing of interest.When this account will
become NPA?
A. 90 days from the date of debit of Interest
B. 90 days from the instalment date
C. A or B whichever is earlier
D. 90 days from the due date of payment of interest and instalment if it remains
uncollected
E. All the above on a case to case basis
 Discuss this Question

75) What is the present delinquency norm for identifying an advance as NPA?
A. 30 days
B. 60 days
C. 90 days
D. 180 days
E. 360 days

76) When the credit facilities granted under the guarantee of Central Government will be
treated as NPA?
A. When the Guarantee is issued.
B. From the date of revocation of guarantee
C. When the guarantee is invoked by the beneficiary
D. When the guarantee amount is claimed and not paid within 90 days from the
due date
E. When the Central Government repudiates the guarantee
Discuss this Question

77) What are the stages,at which the restructuring/rescheduling/renegotiation of the terms
of loan agreement could take place?
A. Before commencement of commercial production
B. After commencement of commercial production and after the asset has been
classified as sub standard.
C. The rescheduling, etc., of principal and/or of interest could take place, with or
without sacrifice
D. After commencement of commercial production and before the asset has been
classified as sub standard.
E. All the above

78) What is intagible collateral security?

A. Liquid securities like deposits,NSC,IVP,KVP and LIC Policy
 B. Immovable property like Land And Building
C. Movable Assets like Plant and Machinery,Stock,Vehicles etc., or invisible
assets like book debts
D. Charge on Intangible Assets like goodwill,Patent,Trade
Mark,Franchise,Royalty etc.,
E. Personal Guarantee of Promoters,Partners,Directors etc.,
Discuss this Question

79) Banks can not reschedule /restructure /renegotiate borrowal accounts with
_______________ effect
A. Prospective
B. Immediate
C. Contingent
D. Future
E. Retrospective

80) Any funding of interest in respect of NPAs, if recognised as income, should be fully
___________ for.
A. Provided
B. Accounted
C. Secured
D. Called for
E. All the above