Cca Questions All Merged by VKG PDF

Objective questions with answers – Foreign Exchange & Trade
1. Foreign Currency account opened by Banks in India with Banks abroad are
referred as
a) Nostro accounts
b) Vostro accounts
c) Loro accounts
d) None of the above
2. Non – resident Banks opening rupee accounts with Banks in India are
referred as
a) Nostro accounts
b) Vostro accounts
c) Loro accounts
3. SWIFT refers to
a) Society for World wide Interbank Financial transaction
b) Society for World wide International Financial telecommunication
c) Society for World wide Interbank financial telecommunication
d) Society for World wide International financial transaction
4. Which of the following are eligible credits for an RFC – Domestic account
a) Gift remittances received from abroad
b) Remittances received towards services rendered
c) a & b above
5. Which of the following statements are correct >

a) Remittances into RFC domestic account can be retained for any period of
time
b) Remittances into RFC domestic account earn interest
c) Interest earned on RFC domestic account is subject to income tax
d) Remittances into RFC domestic account should be converted into rupees
within the last day of the next calendar month.
6. RFC domestic account can be opened by

a) Resident individuals only
b) Non Resident Indians only
c) Both Non resident Indians and foreign nationals
7. Which of the following is not a permissible credit in an NRE account

a) Inward remittances received from abroad
b) Maturity proceeds of an FCNRB deposit
c) Transfer from NRO to NRE
8. The minimum term for opening an FCNRB deposit is
a) 1 year
b) 2 years
c) 3 years
d) 5 years
9. The maximum term for opening an FCNRB deposit is

a) 1 year
b) 2 years
c) 3 years
d) 5 years
10. Balances in NRE deposits are

a) Freely repatriable
b) Repatriable subject to RBI approval
c) Repatriable up to a maximum of USD 1 million per financial year
11. Balances in NRO deposits are

a) Freely repatriable
b) Repatriable subject to RBI approval
c) Repatriable up to a maximum of USD 1 million per financial year
12. Which of the following transactions are exempt from submission of

15 CA /15 CB
a) Remittances towards repatriation of sale of proceeds by NRI
b) Remittances towards repatriation of NRE balances by NRI
c) Remittances towards repatriation of NRO balances by NRI
d) All of the above
13. Interest on FCNRB is linked to

a) MIBOR
b) LIBOR
c) Minimum Lending rate
d) Base rate
14. Interest earned on FCNRB is

a) Subject to income tax
b) Exempt from income tax
c) Subject to double taxation
15. LRS refers to
a) Liberalized remittance scheme
b) Lottery remittance scheme
c) Liberalized repatriation scheme
d) Loan repatriation scheme
16. The maximum amount permissible under LRS is
a) USD 250,000 per financial year
b) USD 100,000 per financial year
c) USD 25,000 per financial year
17. Which of the following statements is incorrect

a) Only resident individuals are eligible to remit under LRS
b) Only Non resident indians are eligible to remit under LRS
c) Minor resident individuals are eligible to remit under LRS
d) Indian Parent can remit towards maintenance allowances under LRS
18. 15 CA & 15 CB is mandatory in which of the following remittances

a) Remittances towards family maintenance
b) Remittances towards education expenses
c) Remittances towards NRE repatriation
d) Remittances towards consultancy services
19. Which of the following forms are used for outward remittances other than
Imports
a) Form A1
b) Form A2
c) Form 1
d) Form 2
20. Which of the following forms are used for outward remittances towards
Imports
a) Form A1
b) Form A2
c) Form 1
d) Form 2
21. The foreign trade policy of the country is announced by the

a) Ministry of Finance
b) Ministry of Commerce & Industry
c) Ministry of External affairs
22. Foreign Trade policy (EXIM Policy) of the country is valid for a period of
a) 3 years
b) 5 years
c) 10 years
23. Goods coming under the prohibited list requires
a) Prior approval of the RBI
b) License issued by the DGFT
c) Ratification by FIPB
24. Open account system as a method of payment indicates

a) the Importer(buyer) has no means to pay immediately
b) the Exporter (seller) wants to sell desperately
c) the Importer (buyer) has confidence in the Exporter (seller) that the
goods will be shipped as per agreed terms
d) the Exporter (seller) has confidence in the Importer (buyer) that the
payment will be made as per agreed terms.
25. Under advance remittance, the risk is borne by the

a) Importer
b) Exporter
c) Importer’s Bank
d) Exporter’s Bank
26. Import licenses are issued by

a) RBI
b) DGFT
c) Customs
d) FIPB
27. DA in International Trade refers to

a) Documents against acceptance
b) Documents against advance remittance
c) Documents against anticipation in shipment
d) Documents against Adjudication
28. DP in international trade refers to

a) Documents against part shipment
b) Documents against payment
c) Documents against protocol
29. Documentary credits are governed by the provisions of

a) Uniform customs & practices UCP
b) Uniform collections & practices
c) Uniform credit procedures
d) Uniform rules for reimbursements
30. A letter of credit (Documentary credit) is opened on behalf of
a) Importer
b) Exporter
c) Importer’s Bank
d) Exporter’s Bank
31. A confirmed letter of credit is one

a) Confirmed to be authentic by the LC issuing Bank
b) Confirmed by the Importer that payment will be made as per terms.
c) Confirmed by the Exporter that goods will be supplied as per terms
d) Confirmed by the Bank in the Exporter’s country undertaking to make
payment if the documents are compliant to LC terms.
32. The responsibility of the Advising Bank of a letter of credit is to

a) Ensure authenticity & genuineness of the LC
b) negotiate the documents under the LC
c) discount the documents under the LC
33. Certificate of origin indicates

a) Country of shipment of goods
b) Country of manufacture of goods
c) Country of destination of goods
d) Country to which the exporter belongs to
34. The following document does not evidence sale

a) Consular invoice
b) Commercial invoice
c) Visaed invoice
d) Pro forma invoice
35. Bill of lading evidences

a) Shipment of goods on board the ship
b) Loading of goods at the port
c) Delivery of goods to the buyer
36. Pick the odd man out:

a) CIF
b) C&F
c) FOB
d) UCP
37. A borrower availing Pre-shipment finance is obliged to complete
a) Export obligation
b) Import obligation
c) Customs obligation
38. ECGC guarantees
a) Political risks
b) Commercial risks
c) Both political & commercial risks
39. LIBOR refers to

a) London Inter Bank offered rate
b) London Intermediary Banks Organization rules
c) Luxembourg International Bourse Rules
d) London Bourse Rules
40. The Authorized Dealers under FEMA are classified into

a) 2 Categories
b) 3 Categories
c) 4 Categories
d) Only 1 category
41. Indian rupee is fully convertible on

a) Current account transactions
b) Capital account transactions
c) Both current and capital account transactions
d) Neither under current account nor under capital account.
42. The number of Nostro accounts that can be maintained by a Bank in a

particular currency is
a) Not exceeding ten
b) Minimum two
c) Dependent on the number of Overseas branches of the Bank
d) No such limit.
43. The maximum inward remittance permitted under a trade transaction in

Vostro accounts of an Exchange House is
a) Rs. 2,00,000
b) Rs. 15,00,000
c) Rs. 50,000
d) No such limit.
44. Authorised Dealers – Category I in India are

a) All scheduled commercial banks in India
b) All public sector banks in India
c) All banks authorised by RBI to deal in foreign exchange
d) None of the above.
45. Importer-Exporter Code is allotted by
a) Directorate General of Foreign Trade
b) Customs Authorities
c) Respective banks where the customers maintain their accounts
d) Department of Exports & Imports.
46. Goods being imported under restricted list requires

a) Licence issued by DGFT
b) License issued by RB I
c) Licence issued by FIPB
d) Licence issued by Ministry of Home Affairs
47. The application to be submitted to customs for clearance of export cargo is

a) Shipping document
b) Shipping Bill (also called as SDF or GR Form (now called EDF).
c) Export General Manifesto
48. Beneficiary under the letter of credit is

a) The bank opening the letter of credit
b) The customer of the LC Opening Bank
c) The confirming bank
d) The exporter
49. The maximum amount of repatriation allowed from the NRO account of an
Non resident Indian is
a) USD 1 Million per calendar year
b) USD 1 Million per financial year
c) USD 200,000 per financial year
d) No limits
50. A confirmed letter of credit is one

a) Confirmed to be authentic
b) Confirmed by the Importer to be correct
c) Confirmed by the Exporter that he agrees to the conditions
d) Confirmed by the Bank (other than the opening bank).
51. Under the confirmed letter of credit, undertaking of the confirming bank is
a) In addition to that of the opening bank.
b) In substitution of the undertaking of the opening bank
c) Subject to government policies of the exporter country
52. A letter of credit carries an undertaking of the opening bank to pay up to a
specified amount in case of non-performance of certain obligation by the
applicant. This letter of credit is
a) Invalid
b) Anticipatory letter of credit
c) Standby letter of credit
d) Performance letter of credit
53. The description of goods in the following document should agree exactly with
the description in the letter of credit
a) Bill of Lading
b) Commercial Invoice
c) Certificate of Origin
d) All of the above
54. Certificate of Origin indicates

a) The country of shipment of goods
b) The place of manufacture of goods
c) The country of manufacture of goods
d) The country of origin of the supplier
55. The following document does not evidence evidence sale

a) Consular invoice
b) Certified invoice
c) Visaed invoice
d) Proforma invoice
56. Freight to pay bill of lading is acceptable if

a) Contract terms are CIF
b) Contract terms are C&F
c) Contract terms are FOB
d) Contract terms are Freight prepaid
57. INCO terms (International Commercial Terms) cover

a) Trade in tangibles
b) Ownership and transfer rights
c) Contracts of carriage
d) Rights and obligations of parties to contract of sales.
58. The INCO term providing the least responsibility to the seller is
a) DDP
b) FOB
c) CIF
d) Ex-works
59. The INCO term providing the least responsibility to the buyer is
a) DDP – Delivery duty paid.
b) FOB – Free on Board
c) CIF – Cost, Insurance & Freight
d) Ex-works
60. Adoption of INCO terms is

a) Compulsory for all international contracts
b) Compulsory for all letter of credit transactions
c) Optional for the parties to the contract
d) Mandatory for transactions with OFAC countries.
61. The amount of packing credit should not normally exceed

a) The local cost of manufacture for the exporter
b) FOB value of the export contract
c) CIF value of the export contract
d) Cost of manufacture or FOB value of the export contract whichever is lower.
62. Packing credit can be made for a maximum period of

a) 90 days
b) 180 days
c) 270 days
d) 360 days
63. Pre-shipment credit in foreign currency is available for a period of

a) 90 days
b) 180 days
c) 270 days
d) 360 days
64. Application for extension of time for realization of export bills should be
made in form
a) EBW (for exports bills written off)
b) GR(authentication from Customs that goods have been received for Export)
c) ETX
d) XOS (Half yearly statement sent by Banks to RBI on Overdue Export bills)
65. Pick the odd man out:
a) Sudan
b) Iran
c) Bangladesh
d) Syria
66. Import licences are required for import of goods coming under
a) Prohibited List
b) OFAC List
c) Negative List
d) Restricted cover countries
67. Buyer’s credit (for raw material imports) can be extended for a maximum
period of
a) 360 days from date of shipment subject to trade cycle.
b) 360 days from date of receipt of goods subject to trade cycle.
c) 360 days from the date of filing BOE subject to trade cycle.
d) Depending on the tenor of the import subject to trade cycle.
68. A bill of lading issued by the carrier for goods delivered in apparent good
order and condition is called:
a) Bearer Bill of Lading
b) Claused Bill of Lading
c) Clean Bill of Lading
d) Carrier Bill of Lading
69. The financial risk that a borrower, customer or obligor will not pay on due
date because of the political, economic or social instability in his country is
called
a) Settlement risk
b) Credit risk
c) Country risk
d) Reputational risk
70. The current EXIM Policy of our country is valid for a period of
a) 10 years
b) 5 years
c) 3 years
d) 1 year
71. SFMS refers to
a) Society for financial messaging services
b) Structured Financial Messaging System – for sending messages between
banks within India.
c) Structured Financial Messaging Services
d) Structured Financial Messaging Scheme
72. ISBP refers to

a) International Standby Practices
b) International Standard Banking Policies
c) International Standard Banking practices
d) International Structured Banking practices
73. SDF refers to

a) Standard Documentary Facts
b) Structured Documentary Financials
c) Statutory Declaration Form
d) Shipping Declaration Forms
74. EDF refers to

a) Export Declaration Form
b) Electronic Disposal Form
c) Electronic Declaration Form
d) Export Disposal Form
75. INCO terms refer to

a) International Commercial Terms
b) International Communication Terms
c) International Conference Vessels
d) International Conference Network.
76. Form 83 refers to

a) Application for approaching RBI for availing ECB
b) Application for approaching RBI for opening a Branch abroad
c) Application for approaching RBI for opening a Project office
d) Application for draw down of the ECB.
77. Form ECB refers to

a) Application for availing ECB under the automatic route
b) Application for availing ECB under the approval route
c) Application for draw down of ECB under the automatic route
d) Application for draw down of ECB under the approval route
78. FC-GPR refers to Foreign collaboration – General permission route
FC-GPR is the form filed by the company after allotment of shares on
receiving FDI.
79. Say True or false:-

a) In India, documents under LC should not be negotiated on Saturdays as
Forex Markets are closed on Saturdays - false.
b) A credit is irrevocable even if there is no indication to that effect - true.
c) A commercial invoice need not be signed - true.
d) The description of the goods in a commercial invoice must correspond with
that appearing in the credit. - true
e) The bank has no obligation to accept a presentation outside its banking
hours - true.
f) Reasonable period under UCP 600 refers to 5 calendar days following the
day of presentation. - True
g) Globalization results in development of new financial instruments. true
h) Settlement risk refers to the risk on the counter-party in settling the
transaction true.
i) Foreign Direct Investment is permitted in all the sectors. false
j) ECBs are permitted for working capital requirements under exceptional
circumstances false.
k) Violation of FEMA guidelines results in criminal punishment. False
S. No. Questions Answers Category
1. “Clean Note Policy” does not cover which of the C Difficult
following –
a) To use bands instead of staple pins

b) To tender soiled notes to the Reserve bank
c) Customers should stop writing of any kind on
watermark window of bank notes.
d) To provide exchange facility to members of public
all over the country
2. Cash Movement’ register contains details of which the A Difficult

following -
a) Movement of Cash between the Cash Safe and the

Teller
b) Movement of Cash between the Chest and the
branch
c) Movement of Cash between the branch and the
Customer
d) Movement of Cash between the Chest and the RBI
3. In case of counterfeit currency, FIR is required to filed D Easy

in case of detection of
a) 1 or more piece in a single transaction

b) 3 or more piece in a single transaction
c) 4 or more piece in a single transaction
d) 5 or more piece in a single transaction
4. Counterfeit currency is required to preserved for a B Easy

period of
a) 2 years
b) 3 years
c) 4 years
d) 5 years
5. Nomination is not available for accounts in D Easy
a) Individual capacity
b) HUF
c) Partnership firms
d) b and c
6. A nominee can only be A Easy
a) An individual
b) HUF
c) Firm
d) All of above
7. In case of faulty ATM transaction, the customer is to be C Easy

reimbursed within
a) 3 days of complaint
b) 5 days of complaint
c) 7 days of complaint
d) 10 days of complaint
8. A joint account can be opened by maximum C Difficult
a) 2 persons
b) 3 persons
c) 4 persons
d) No limit
9. Signature on the nomination form are to be witnessed C Difficult

by :
a) One witness
b) Two witness
c) Not required
d) As per the requirement of bank
10. Banks are not allowed to open foreign students D Easy

account without RBI approval in case of :
a) Bangladesh Nationals
b) Pakistan Nationals
c) Bhutan National
d) (a) and (b)
11. In case of opening of a new Basic Savings Bank C Difficult
account, any other existing savings bank account of the
customer with the same bank is required to be closed :
a) Within 7 days from the opening of Basic

Savings Bank account
b) Within 15 days from the opening of Basic
c) Within 30 days from the opening of Basic
d) Not required to be closed.
12. Interest in Savings Bank Account Balance is computed C Easy

on
a)Balance as on the last date of Month

b)Minimum Balance in the last week of the month
c)Daily closing Balance
d) Minimum Balance between 10th Day and Last Day
of the month
13. STR (Suspicious Transaction report ) is submitted by D Easy

the Banks to :
a) Police
b) CBI
c) RBI
d) FIU
14. In case of high risk customers, updation of KYC is A Easy

required in
a) 2 years
b) 8 years
c) 10 years
d) 15 years
15. For partial freezing of accounts, the period of notice by B Difficult

bank to the customer is :
a) 1 month
b) 3 months
c) 6 months
d) 9 months
16. Partial freezing involves freezing of : A Easy
a) Debit transactions in the account

b) Credit transactions in the account
c) Both transactions in the account
d) Operations are allowed
17. Unclaimed deposits are required to be transferred to B Easy

DEAF where the unclaimed deposits are
a) Older than 5 years

b) Older than 10 years
c) Older for 10 years or more
d) Older for 15 years or more
18. Which of the following customer does not fall under D Easy
low risk category as per the KYC guidelines :
a) Salaried employees
b) Government departments
c) Government organizations
d) NGO
19. Total credit during one year in a small account should C Difficult
not be
a) Rs. 50000/- or more

b) Rs 100000/- or more
c) More than Rs 100000/-
d) More than Rs. 500000/-
20. The balance in small account should not at any time C Difficult
during the year be
a) Rs 25000/- or more
b) Rs 50000/- or more
c) More than Rs. 50000/-
d) More than Rs 100000/-
21. The following is not allowed to be credited to a small C Difficult
account
a) Sale proceeds of shares

b) Business receipts
c) Foreign remittance
d) All of above
22. Banks should preserve details of suspicious D Difficult

transactions for
a) A period of 2 years from the date of

transaction
b) A period of 3 years from the date of
transaction
c) A period of 5 years from the date of
transaction
d) A period of 10 years from the date of
transaction
23. Which of the following is correct C Difficult
a) CTR is to be filed within 15 days from the date of

transaction
b) STR is to be filed within 7 days of the transaction
c) STR is to be filed within 7 days of the reaching to the
conclusion that it is a suspicious transaction
d) All of above
24. What is bank supposed to do in case of having some D Difficult

suspicion about an account
a) Should stop all the transactions

b) Permit only debit transactions
c) Permit only credit transaction
d) File an STR while continuing the transactions
25. Unclaimed deposits mean a deposit which has not D Easy

been operated for :
a) 3 years
b) 5 years
c) 7 years
d) 10 years
26. When a bank pays a cheque in good faith and without D Easy
having any reason to doubt the bonafides of the
presenter, such payment is called as :
a) Wrong payment
b) Late payment
c) Future payment
d) Payment in due course
27. Courtesy amount in a cheque stands for : A Difficult
a) Amount in figures
b) Amount in words
c) Lower of figures and words
d)None of above
28. The Account payee crossing is defined U/s D Most

difficult
a) 13 of the NI Act
b) 130 of the NI Act
c) 130 of the RBI Act
29. X gives a cheque of Rs.7500 to Y . The balance in the C Difficult

account was Rs. 7000 disclosed by the staff of Bank to
Y. Y deposited Rs. 500 in the account of X and got the
cheque passed . As such :
a) This a payment in due course and X has no

legal remedies
b) X can not ask for refund
c) X can ask for refund as account information was
illegally disclosed to Y
d) Bank is not liable
30. An account is opened on 1st January 2018 . The A Difficult
customer
has issued a cheque on 10th January 2018 which is
dated
15th December 2017. On presentation , the bank will
a) Pay the cheque

b) Return the cheque
c) Contact the account holder
31. As per RBI guidelines, all cheques above Rs…….are C Easy

required tobe examined under Ultra Violet Lamp :
a) Rs 10000
b) Rs 100000
c) Rs 200000
d) Rs 500000
32. A cheque returning memo is attached with the D Most

returned cheque to comply with the provisions of : difficult
a) The Negotiable Instruments Act

b) Banking Regulation Ac
c) RBI Act
d) RBI clearing house rules
33. Bank has to return a dishonoured cheque within A Difficult
a) 24 hours
b) 36 hours
c) 48 hours
d) Immediately
34. Under PMLA Act 2002, the banks are required to keep A Easy
records pertaining to identity of customer after the
termination of relationship for a period of :
a) 5 years
b) 7 years
c) 10 years
d) 15 years
35. Under DICGC, the deposits of the customer of a B Easy
member bank is secured upto :
a) Rs 50,000
b) Rs 100,000
c) Rs 300,000
d) Rs 500,000
36. In case of safe deposit locker, the relationship between B Difficult

bank and customer is:
a) Agent, Principal
b) Lessor, Lessee
c) Creditor, Debtor
d) None of above
37. A cheque is received for payment with amount C Difficult

mentioned only in words. The banker would:
a) honour the cheque for the amount in words

b) Return the cheque to drawer
c) return the cheque with reasons “ words
and figure differs”
d) none of the above
38. Legal amount of a cheque stands for amount in A Difficult
a) Words
b) Figures
c) Word or figure which ever is higher
d) None of above
39. A customer will not be issued a cheque book in case of B Difficult

return of cheques for insufficient funds during a
financial year if amount of cheque and number of
times cheques returned are :
a) Rs 50 lacs and more and 4 times

b) Rs 100 lacs and more and 4 times
c) Rs 500 lacs and more and 2 times
d) No such limit
40. As per the guidelines in case of surrender of a locker : C Difficult
a) The same can not be realloted

b) It can be allotted only after 1 year
c) It can be allotted after interchanging its lock
with any other vacant locker
d) It can be immediately realloted
41. Which of the following is true in case of operation in a C Difficult

Basic Savings Bank account :
a) There is no restriction in number of deposits

and withdrawal during a month
b) Maximum 4 deposits can be made during a
month
c) Maximum 4 withdrawals can be made during a
month
d) Maximum 4 deposits and 4 withdrawals can be
made during a month
42. What is nomination : C Easy
a. It is a process of appointing legal heir by the

depositor
b. It is a part of will of Depositor
c. It confers right to the nominee to receive payment of
a deposit after death of depositors
d. A facility extended by Govt.
43. The cut off limit for reporting the cash shortage B Difficult
detected by the Auditors as fraud is more than Rs.
a) 1000/-
b) 5000/-
c) 10000/-
d) None of above as cash shortage is not
considered as fraud
44. What is the minimum amount of remittance through C Easy
RTGS :
a) Rs 50000/-
b) Rs 100000/-
c) Rs 200000/-
d) Rs 500000/-
45. The maximum amount of issue of demand draft C Difficult

against acceptance of cash is Rs :
a) 19999/-
b) 20000/-
c) 49999/-
d) 50000/-
46. As per RBI guidelines, demand drafts can be paid in A Difficult

cash if amount of DD is :
a) Upto Rs 19999/-
b) Upto Rs 20000/-
c) Upto Rs 49999/-
d) Upto Rs 50000/-
47. Minimum period for which an FDR account can be A Easy
opened is
a) 7 days
b) 14 days
c) 30 days
d) 1 year
48. Duplicate keys of Cash Safe and Strong Room are C Easy
generally kept with –
(a) Branch in charge

(b) In custody of Joint Custodians
(c) Any nearby branch
d) Head office of the bank
49. Surprise physical verification of cash-in-hand shall be B Easy
undertaken by –
a) Joint Custodians of Cash

b) An independent officer from the branch
c) Joint Custodians of Cash and an independent
officer from the branch
d) Anyone of the above
50. Customer Acceptance Policy; Customer Identification B Easy

Procedures; Monitoring of Transactions; and Risk
Management are the elements of _____
a) The Bankers Book Evidence Act, 1891

b) Know Your Customer
c) Banking Norms
S. No. Questions Answers
1. A bank is not prohibited to grant loan to its director if loan is C
granted against
(a) Real Estate

(b) Shares
(c) FDRs
(d) None of the above
2. Housing Loan is classified as a Priority Sector Loan in a C
metropolitan city where the loan amount does not exceed Rs :
(a) 10 lacs
(b) 20 lacs
(c) 28 lacs
(d) 50 lacs
3. Education Loan is classified as a Priority Sector Loan where the A
amount of loan does not exceed Rs :
(a) 10 lacs
(b) 20 lacs
(c) 28 lacs
(d) 30 lacs
4. Maximum permissible loan under CGTMSE scheme is Rs. C
(a) 10 lacs
(b) 50 lacs
(c) 100 lacs
(d) No limit
5. Exercise of right by the beneficiary of a bank guarantee is B
known as
(a) Devolvement of Bank Guarantee

(b) Invocation of Bank Guarantee
(c) Transfer of Bank Guarantee
(d) None of above
6. Exercise of right by the beneficiary of a LC is known as A
(a) Devolvement of LC
(b) Invocation of LC
(c) Expiry of LC
(d) None of above
7. The person on whose behalf a Bank Guarantee is issued is D
known as the
(a) Creditors
(b) Beneficiary
(c) Guarantor
(d) Customer
8. In case of devolvement of LC, the principal liability of payment A
is on the
(a) Customer
(b) Guarantor
(c) Banker
(d) All of them
9. Which of the following is not a credit rating agency : D
(a) ICRA
(b) CRISIL
(c) CARE
(d) CIBIL
10. Under Section 185 of the Companies Act 2013, a bank is not B
barred from accepting a corporate guarantee from a company
having a common director with the borrower company where
the corporate guarantee is given by a
(a) Subsidiary company in favour of its Holding company

(b) Holding company in favour of its subsidiary company
(c) Company registered under section 8 of the Companies
Act 2013
(d) Any of the above
11. CIBIL rating effects the D
(a) Rate of interest in the account

(b) Repayment period of the loan account
(c) Security coverage of the loan account
12. Which of the following is a post shipment credit in case of D
export loans :
(a) Packing Credit

(b) Foreign Letter of Credit
(c) Stand By LC
(d) Export bill discounting
13. An account under consortium can be declared as Red Flagged if C
agreed by the member banks holding atleast :
(a) 40% of value of total lending

(b) 50% of value of total lending
(c) 60% of value of total lending
14. SMA 0 account is one which is overdue upto : A
(a) 30 days
(b) 31 to 60 days
(c) 61 to 90 days
(d) Over 90 days
15. SMA stands for D
(a) Sub Standard Market account

(b) System Monitoring account
(c) Specially Marked account
(d) Special Mention account
16. Reporting to CRILC is required for loans having total exposure B
of Rs.
(a) 1 crore and above

(b) 5 crore and above
(c) 10 crore and above
(d) 50 crore and above
17. SDR provisions can be invoked by the bankers in a consortium A
account if approved by members representing atleast :
(a) 75% of value and 60% of numbers

(b) 60% of value and 75% of numbers
(c) 60% of value and 60% of numbers
(d) 75% of value and 50% of numbers
18. Bank Guarantee is required to signed by 2 officials jointly in B

case guarantee amount is :
(a) Rs 20000 or more

(b) Rs 50000 or more
(c) Rs 100000 or more
19. Minimum margin on bank guarantees issued on behalf of share C
brokers :
(a) 10%
(b) 20%
(c) 50%
(d) 75%
20. Loans against shares in physical form to individuals can be C
given upto Rs. :
(a) 1 lac
(b) 5 lacs
(c) 10 lac
(d) No restriction
21. In case of Bank Guarantees, commission is required to be B
recovered upto :
(a) Expiry period

(b) Expiry period and claim period
(c) Only claim period
(d) 10 years
22. The following entities are eligible to be covered under CGTMSE A
scheme :
(a) Micro Enterprises

(b) Large Enterprises
(c) Medium Enterprises
(d) All of the above
23. Which of the following is not a method of assessment of C
working capital :
(a) Turnover method

(b) Cash budget method
(c) Fund flow method
(d) MPBF method
24. For MSME accounts, turnover method of working capital C
assessment would be applicable for sanction limit upto Rs.:
(a) 1 crore
(b) 3 crore
(c) 5 crore
(d) 10 crore
25. ROC charge is required to be created in case of D
(a) Pledge of goods

(b) Hypothecation of goods
(c) Hypothecation of book debts
26. Current ratio indicates the borrower’s C
(a) Solvency
(b) Profitability
(c) Liquidity
27. The banks are prohibited to grant loans against its own shares D
under :
(a) RBI Act 1934

(b) The Companies Act 2013
(c) Negotiable Instrument Act
(d) Banking Regulation Act 1949
28. CERSAI registration is to be made within C
(a) 10 days of Equitable Mortgage

(b) 20 days of Equitable Mortgage
(c) 30 days of Equitable Mortgage
(d) 60 days of Equitable Mortgage
29. Charge created on LIC policy is A
(a) Assigned
(b) Hypothecated
(c) Pledged
30. SARFAESI Act is not applicable on accounts where Bank’s dues C
do not exceed Rs
(a) 10000
(b) 50000
(c) 100000
(d) 500000
31. Law of limitation is not applicable in respect of D
(a) Advance against pledge of shares

(b) CC granted against hypothecation of stocks
(c) Term loan granted against hypothecation of machinery
(d) Right to set off
32. As per RBI’s guidelines, maximum tenure of gold loan can be A
(a) 1 year
(b) 2 year
(c) 3 year
(d) No limit
33. LTV ratio is B
(a) Limit to total value ratio

(b) Loan to value ratio
(c) Loan turnover ratio
34. PCR is C
(a) Prudential credit ratio

(b) Past credit ratio
(c) Provision Coverage ratio
35. The loans where the rate of interest can be below the base rate D
are :
(a) Loans to depositors against own deposits

(b) DRI Loans
(c) Loans to bank’s own employees
36. Which of the following is not true in case of SARFAESI Act : C
(a) Minimum Rs 1 lac should be overdue in NPA account

(b) 60 days notice need to be given to the defaulting
borrower
(c) Action under the Act can be initiated even if one
installment is overdue
37. As per the RBI’s guidelines, the cut off limit for classification of B
an account as Wil Ful defaulter is :
(a) Above Rs. 10 lacs

(b) Above Rs. 25 lacs
(c) Above Rs. 50 lacs
(d) Above Rs. 100 lacs
38. Who amongst the following are not eligible to execute loan B
documents :
(a) An Illiterate person

(b) An insolvent
(c) A senior citizen
39. The following is exempted from the provisions of SARFAESI A
Act :
(a) Agriculture Land

(b) Tractor Loans
(c) Export Loans
(d) Residential Houses
40. Notice under the SARFAESI Act is required to be signed an D
officer not below the rank of :
(a) General Manager

(b) Zonal Manager
(c) Senior Manager
(d) Chief Manager
41. As per the RBI’s guidelines, diversion of funds take place when A
(a) Short term funds are used for long term funds
(b) Long term funds are used for short term purposes
(c) Both of the above
42. Pari Passu charge refers to a charge C
(a) Ranking in priority on first come basis

(b) Merely notional in nature
(c) Ranking equally in proportion to the lender’s share of
advances
43. Under Banking regulation Act 1949, a bank can hold shares of B
in a company as pledge, mortgagee or absolute owner of an
amount not exceeding :
(a) 20% of the paid up capital of the company

(b) 30% of the paid up capital of the company
(c) 40% of the paid up capital of the company
(d) 50% of the paid up capital of the company
44. In Bank Guarantee, a bank makes payment to the beneficiary : D
(a) When convinced that the beneficiary has suffered loss

(b) On being sued by the beneficiary
(c) After the guarantee being invoked and getting the
permission of the customer on whose behalf the
guarantee is issued
(d) Merely on demand of the beneficiary
45. Limitation period of the documents can be extended by : D
(a) Obtaining fresh set of documents

(b) Obtaining acknowledgement of dues
(c) Receiving part payment in the account
46. For term loans , the period of limitation is 3 years from the C
(a) Date of documents

(b) Date of sanction
(c) Due date of each installment
47. Application of IRAC norms is C
(a) Account wise

(b) Facility wise
(c) Borrower wise
(d) Group wise
48. Sub standard asset is one which remains NPA for a period of C
(a) Less than 12 months

(b) More than 12 months
(c) Less than or equal to 12 months
49. Points to be considered while classifying an account as NPA is D
(a) Available security

(b) Net Worth of the borrower
(c) Net Worth of the guarantor
50. An account is exempted from being NPA if guaranteed by : B
(a) State Government

(b) Central Government
(c) Both of above
(d) None of above
51. An account is NPA if renewal is pending for over C
(a) 60 days
(b) 90 days
(c) 180 days
52. An account may be directly classified as Doubtful if value of B
security has depleted by more than :
(a) 25%
(b) 50%
(c) 75%
53. An account may be directly classified as Loss if value of C
security has depleted by more than :
(a) 25%
(b) 50%
(c) 90%
54. Which of the following account can not be restructured: D
(a) Standard
(b) SMA-2
(c) Doubtful
(d) Loss
55. An account is eligible for CDR restructuring if its total exposure C
exceeds
(a) Rs 1 crore
(b) Rs 5 crore
(c) Rs 10 crore
(d) Rs 100 crore
56. In case of frauds, the percentage of provision irrespective of D
security available is :
(a) 25%
(b) 50%
(c) 75%
(d) 100%
57. The maximum times an account can be downgraded or D
upgraded during a year is :
(a) 1 time
(b) 2 time
(c) 5 time
(d) No limit
58. The expansion of DCCO is : B
(a) Date of completion of commercial operations

(b) Date of commencement of commercial operations
(c) Date of cancellation of commercial operations
(d) Date of commencement of commercial outpur
59. The expansion of SDR is : D
(a) Standard drawings rights

(b) Special drawing rights
(c) Strategic drawing rights
(d) Strategic debt restructuring
60. If an account is not paid on due date, the same becomes : D
(a) NPA
(b) SMA-1
(c) SMA-2
(d) Ovedue
THE INSTITUTE OF CHARTERED ACCOUNTANTS OF INDIA
Internal Audit Standards Board
Model Question Paper
Certificate Course on Concurrent Audit of Banks
(This Model paper contains 20 Questions for practice purpose.

However, the final examination contains 100 Questions. 90 minutes would be
given to complete the final examination.)
Batch______________________
Name _____________________
Membership Number ______________________
Number of Questions: 20
Directions of the Questions: Choose the right answer to each question out of the
options provided
QUESTION PAPER
ABOUT THE TEST:
1. This test has twenty (20) questions to examine your abilities. Each question
carries equal marks.
HOW TO ANSWER:
1. There is only one correct answer for each question and answer the questions by
writing the right options in Answer Column. There is no negative marking.
2. Do the rough work only on Test paper.
3. Follow the instructions of the invigilator.
AFTER THE TEST:

1. At the end of the test, remain seated until the invigilator collects the Answer
Sheets from your seats.
ANY CANDIDATE GIVING/ SEEKING/ RECEIVING ASSISTANCE OR FOUND

COPYING WILL BE DISQUALIFIED
1. Aim of Diligence Report is to: C
(a) File report

(b) Keep Report secretive
(c) Share information among Banks
(d) None of above
2. A
Which Act in India addresses the issue of laundered money
coming into and going out of India
(a) PMLA
(b) SOX Act, 2002
(c) Anti-Bribery Act
(d) SARFAESI Act, 2002
3. A
Credit Risk Assessment of the borrower units is for
(a) Assessing the repayment Capacity
(b) To fix the pricing of the product
(c) To review the units performance
4. A
On restructuring of an account and creation of FITL, auditors
need to ensure the following in respect of FITL:
(a) Income is reversed to the extent of Funded/ unrealized
interest and an equal balance held in Sundry Credits
(b) Income to be retained since the account is not NPA
(c) Income to be reversed only when account is also
downgraded on restructuring
5. C
ITF stands for
(a) International Telecom Facility
(b) Integrated Text Feature
(c) Integrated Test Facility
6. Borrower taking advances from multiple banks under common B
agreement and placing common security is called as?
(a) Cooperative Arrangement
(b) Consortium Arrangement
(c) Extended Arrangement
7. A
The full form of MPBF is:
(a) Maximum Permissible Bank Finance
(b) Minimum Possible Bank Finance
(c) Maximum Provision of Bank Factoring
8. Capital adequacy is the ratio of capital fund to _____ C
(a) Total demand and time liabilities

(b) Risk weighted current liabilities
(c) Risk weighted assets
(d) Net demand and time assets
9. C
CRR and SLR are techniques of :
(a) Co-Operative Banks
(b) State Bank of India
(c) RBI
(d) IDBI
10. The rate at which RBI lends to banks under the Liquidity A
Adjustment Facility (LAF) is called ____
(a) Repo Rate
(b) Reverse Repo Rate
(c) Bank Rate
(d) Cash Reserve Ratio
11. A
An account would have to be classified as NPA based on:
(a) Record of Recovery
(b) Availability of Security
(c) Other subjective considerations
12. C
FATF stands for
(a) Financial Activity and Trust Force
(b) Financial Activity and Task Force
(c) Financial Action and Task Force
(d) Financial Acredaotion of Task Force
13. B
Banking Regulation Act,1949 was enacted to regulate:
(a) Reserve Bank of India
(b) banking companies
(c) cooperative land development banks
(d) primary agricultural credit societies
14. A
Concurrent Audit is
(a) Contemporaneous
(b) Far away from date of occurrence
(c) Once in year
(d) Once in a quarter
15. B
‘PIN’ in a ATM card is :
(a) Permanent Information Number
(b) Personal Identification Number
(c) Professional Identification Number
(d) Permanent Identification Number
16. D
Which among the following is correct about the Vostro
Account?
(a) It is an account maintained by an Indian bank with a
bank in foreign country in foreign currency
(b) It is an account maintained by a Indian Bank Branch with
a Foreign Bank in Foreign currency.
(c) It is an account maintained by a Foreign bank Branch
with a Indian bank in foreign currency.
(d) It is an account maintained by a foreign bank with a
bank in India in Indian Rupees.
17. D
Under Section 21 of Banking Regulation Act, directions relating
to which aspect of banking, can be issued by RBI to banks:
(a) directions relating to deposits
(b) directions relating to export credit
(c) directions relating to priority sector
(d) directions relating to advances
D
Which of the following assets/ is/are not NPAs:
18.
(a) Fixed Assets
(b) Standard Assets
(c) Both (a) and (b)
(d) Neither (a) nor (b)
Concept of Dynamic Provisioning is introduced by : B
19.
(a) ICAI
(b) RBI & BASEL
(c) Banking Regulation Act, 1949
(d) Concurrent Audit Manual
C
Suspicious Transactions, are those which
20.
(i) Give rise to a reasonable ground of Suspicion that it may
involve proceeds of crime; or
(ii) Appears to be made in unusual circumstances
(iii) Appears to have no bonafide purpose
(a) (i) & (ii)
(b) (ii) & (iii)
(c) All of the above
Topic:
Prudential Norms for Income Recognition, Assets Classification and Provisioning
Pertaining to Advance
S. Questions with Multiple Answer Correct

No. Answer
1. IRAC is an abbreviation for ....................
a) Income Recognition and Asset Classification,
b) Interest Recovery and Assets Calling up a)
c) Income Recovery At Cost
2. Prudential Norms introduced by RBI
a) On recommendation of M. Narasimham Committee
b) In line with International Practices
c) In Phased Manner e)
d) To move towards greater consistency and transparency in the published
accounts
e) All of the above
3. Every year RBI consolidated instruction/guidelines on matter relating to Prudential
norms on IRAC and provisioning pertaining to advance vide master circular
incorporating and updating instruction
a) On April issued upto March last year b)
b) On July issued upto June last year
c) On October issued upto September last year
d) On January issued upto December last year
4. Policy on Income Recognition (IR) should be
a) Objective (based on record of recovery)
b) On any subjective consideration a)
c) a) or b) as per discretion
5. Income from NPA is recognized
a) On accrual basis
b) When it is actually received b)
6. Income from NPA for government granted accounts is recognized
a) Even on accrual basis
b) When it is realized only b)
7. Provisioning should be made on the basis of classification of assets based on
a) The period for which has remain non performing and the availability of
security and realizable value thereof
b) Without considering the period for which has remain non performing a)
and the availability of security and realizable value thereof
8. INCA is an abbreviation for .......................
a) Interest not to be Collected Account
b) Interest Not Collected Account b)
c) Income tax Not Covered Account
No. Answer
9. URIPY is an abbreviation for .................................
a) Un-Realized Interest of Previous Year
b) Un-Recovered Interest in Protested bills a)
c) Under Recovery of Interest Proceedings
10. Income Recognition, Asset Classification and Provisioning norms have been
introduced by RBI for Banks w.e.f. the financial year ended………………………
a) 2001-02
b)
b) 1992-93
c) 1995-96
11. NPA is an abbreviation for ......................................
a) Non Performing Assets
b) Non Paying Accounts a)
c) Net Performing Advances
12. A term loan will be treated as NPA if any commitment by way of installment of
principal or interest or both remain overdue for more than ……………. days.
a) 360
b) 180
c)
c) 90
d) 30
13. A cash credit or an overdraft account will be treated as NPA if an account remains
out of order' for a period of more than ………….. days.
a) 360
b) 180 c)
c) 90
d) 30
14. Which of the following statements are true:-An account should be treated as 'out of
order'
(i) if the outstanding balance remains continuously in excess of the sanctioned
limit/drawing power ,or
(ii) if the outstanding balance in the principal operating account is less than the
sanctioned limit /drawing limit , but there are no credits continuously for 3
months or credits are not enough to cover the interest debited during the
a)
same period.
a) (i)
b) (ii)
c) (i) and (ii)
d) none of these
15. A sub-standard asset is one, which has been classified as NPA for a period
exceeding……………..months
a) 24
b) 36
d)
c) 18
d) 12
16. A Doubtful asset is one which has remained NPA for a period exceed……………
months.
a) 24
b) 36
d)
c) 18
d) 12
No. Answer
17. A general provision of a minimum of ............................... %.is required to be made on
Standard Assets on global portfolio basis.
a) 2.5%
b) 0.25%
b)
c) 10%
d) zero %
18. A general provision of .............................. % on total out standings in Sub-standard
accounts should be made without making any allowance for DICGC/ECGC
guarantee cover and securities available.
a) 2.5% c)
b) 0.25%
c) 10%
d) 0%
19. A provision of ............................. % should be made on unsecured portion of the
Doubtful assets.
a) 2.5%
b) 50%
c)
c) 100%
d) 30%
20. A provision of…………………..% should be made on Loss assets.
a) 100%
b) 50% a)
c) 75%
d) 125%
21. The URIPY account head is maintained in the general-ledger of…………………….
a) Branch
b) Zonal Office d)
c) Local Head Office
d) Central Accounts Office, Calcutta
22. Deductions of significant minority investment in financial entities and
investment in commercial entities above the pre defined threshold
should be:
a) 20% from Tier –I and 80% from Tier –II b)
b) 50% from Tier –I and 50% from Tier -II
c) 30% from Tier –I and 70% from Tier -II
d) 80% from Tier –I and 20% from Tier –II
23. Past due loans will be weighted as:
a) 150%, when specific provision is less than 205 of
outstanding amount
b) 100%, when specific provision is not less than 205 of
outstanding amount d)
c) 100%, when specific provision is less than 50% of
outstanding amount but with supervisor discretion to
reduce the weight to 50%
d) All of the above
No. Answer
24. What are the three approaches for measurement of operational risk
according to Basel Accord –II
a) Basic Indicator Approach, Advanced Approach and
Standard Measurement Approach
b) Advanced Indicator Approach, Basic Approach and
d)
Standard Measurement Approach
c) Standard Indicator Approach, Advanced Approach and
Basic Measurement Approach
d) Basic Indicator Approach, Standard Approach and
Advanced Measurement Approach
25. ‘Hair-cuts(%)’ for exposure and collateral for a loan against NSC will
be
a) 0.5, 1
c)
b) 0.5,2
c) 0,0
d) 0.5,0.5
26. Hair-cuts(%)’ for exposure and collateral for a loan against RBI relief
bond (having maturity more than 5 years) will be
a) 0.5,4
b)
b) 0,4
c) 0.5,0
d) 1.4
27. A non Performing Asset is a loan or an advance where:
a) Interest or instalments of principle remains overdue for
more than 90 days
b) Bills remain overdue for more than 90 days in case of bills
d)
purchased and discounted
c) Amount of liquidity facility remains outstanding for more
than 90 days in securitisation transaction
d) All of the above
28. Credit Risk Analysis for proposals above Rs 2lac and up to Rs25lac
should comprise of sensitivity analysis with downward variation in
a) 5% in sales and 10% in price
c)
b) 10 % in sales and 10% in price
c) 10 % in sales and 5% in price
d) 5% in sales and 5% in price
No. Answer
29. What should be reversed, if any advances including bills purchased
and discounted becomes NPA
a) Entire interest accrued and credited in past period should be
reversed if not realized excluding on government
guaranteed account
b) Entire interest accrued and credited in past period should be
b)
reversed if not realized including on government
guaranteed account
c) 80% of interest accrued and credited in past period should
be reversed if not realized including on government
guaranteed account
30. Doubtful Asset is
a) If the asset remains in sub standard category for a period of
6 months having all the weakness inherent in assets while
classified as Sub Standard
b) If the asset remains in sub standard category for a period of
18 months having all the weakness inherent in assets while c)
c) If the asset remains in sub standard category for a period of
12 months having all the weakness inherent in assets while
31. Supervisory Review Process:
a) Intends to ensure that the bank has adequate capital to
support all the risk it faces and encourage banks to use
better risk management techniques
b) Recognizes the responsibility of bank management in
c)
developing as internal capital assessment process and
setting capital targets that are commensurate with the
bank’s risk profile
c) Both of the above
32. In regard to assigning risk weight to NPAs, which one of the following
is not true?
a) 150% risk weight when specific provisions are less than 20%
of the outstanding amount of the NPA.
b) 100% risk weight when specific provisions are atleast 20% of
c)
the outstanding amount of the NPA
c) 50% risk weight when specific provisions are more than 50%
of the outstanding amount of the NPA
d) 50% risk weight when specific provisions are atleast 50% of
the outstanding amount of the NPA
No. Answer
33. In case of borrowers who are enjoying sanctioned limits, if Bal. O/s
exceeds the limit or DP within the powers for excess drawings as per
the Loan Policy Document, Rate of interest for the over-drawings will
be :
a)
a) BPLR+4%
b) 2% above stipulated ROI
c) 4% above stipulated ROI
d) NOA
34. Which of the following returns required by HO, Risk Management, are
to be submitted monthly by the branches
a) Bulk deposit of Rs100 Crore and above
b) Real estate exposure c)
c) Portfolio monitoring (Annex-I)
d) Statement of loans and Advances sanctioned at Sub-PLR. e)
All the above.
35. The date of NPA will be reckoned as ........................................
a) Balance sheet date
b) Actual date on which slippage occurred as per IRAC norms b)
c) Actual date on which slippage occurred as per IRAC norms + 10 days
d) Neither of the above
36. Overdue means an amount due under any credit facility not paid On:
a) Due date
b) 1 month after due date a)
c) 6 months after due date
37. A Loss asset is one where loss has been identified by the Bank or internal external
auditors or the RBI inspection but the amount has not been written of
a) Wholly
b) Partly
c)
c) Wholly or partly
d) All of the above
38. In case of NPA advances covered by CGTMSE/ECGC
a) 20% provision need be made towards the guaranteed portion.
b) 10% provision need be made towards the guaranteed portion. d)
c) 30% provision need be made towards the guaranteed portion.
d) no provision need be made towards the guaranteed portion.
39. With effect from 30 September, 2004 , loans granted for short duration crops will be
treated as NPA , if the installment of principal or interest thereon remains overdue
for
a) one crop seasons beyond due date . c)
b) half crop seasons beyond due date .
c) two crop seasons beyond due date .
No. Answer
40. In Doubtful Assets accounts, partial recovery of interest can be booked on
a) selective basis with the of Statutory Auditors in large value
accounts.approval
b) selective basis with the of Statutory Auditors in small value
accounts.approval
a)
c) selective basis with the of Statutory Auditors in mid value
accounts.approval
d) all of the above
41. While booking interest income in NPA account on realization basis, prioritization of
the recovery of unrealized interest is done as under:
a) the amount held in INC account will be deemed to have been realized first,
the unrealized interest of the previous year (URIPY) is deemed to have been
realized next. Subsequent period interest will be debited to the borrowal
account where such recovery takes place
b) the unrealized interest of the previous year (URIPY) is deemed to have been b)
realized first. the amount held in INC account will be deemed to have been
realized next. Subsequent period interest will be debited to the borrowal
account where such recovery takes place.
c) the unrealized interest of the previous year and the amount held in INC account
will have same priority.(i.e recovery amount will be equally distributed)
d) no such prioritization is required
42. Partial Recovery of Interest can be booked in Sub-Standard accounts to the extent of
a) 10% of actual realization of interest
b) actual realization of interest b)
c) 20% actual realization of interest
d) It cannot be booked
43. In URIPY the Previous Year means
a) the year previous to the year when the account was first identified as
NPA
b) current year when the account was first identified as NPA
c) 3 years previous to the year when the account was first identified as
a)
NPA
d) 2 years previous to the year when the account was first identified as
NPA
44. Interest on advances against _______ may be taken in to income account on due date
provided adequate margin is available in the accounts
a) Term deposits
b) Life insurance policy
d)
c) NSCs, IVPs and KVPs
d) All of the above
45. When realization of past dues representing interest takes place, entries are passed for
transferring the amount from INC A/c to Interest A/c using composite voucher to
be passed by BM/Manager of Division.
a) No entries are passed in the borrower's account.
b) Entries are also passed in the borrower’s account a)
c) Entries are passed in the borrower’s account subject to the discretion
of the BM
d) Entries are passed in the borrower’s account in certain exceptional
cases
No. Answer
46. At the time of write-off, the balance in INC A/c is transferred to the
a) Interest Account
b) Protested Bills account of the borrower. b)
c) Suspense Account
47. The outstanding in the borrower's account include the amount of uncollected
interest held in INCA account; hence at the time of eventual realization of the
balance in INC Account:
a) Entries are also passed in the borrower’s account
b) Entries are passed in the borrower’s account subject to the discretion c)
of the BM
c) No entries are passed in the borrower's account.
d) Entries are passed in the borrower’s account in certain exceptional
cases
48. With effect from 30 September, 2004 , loans granted for long duration crops will be
treated as NPA , if the installment of principal or interest thereon remains overdue
for
a) Three crop seasons beyond due date c)
b) Two crop seasons beyond due date
c) one crop seasons beyond due date
d) five crop seasons beyond due date
49. If one account of the borrower becomes NPA,
a) Other loan accounts of the same borrower should be left unaffected.
b) Other loan accounts of the same borrower should be classified as
PNPA.
c) Other loan accounts of the same borrower should be classified as
c)
NPA.
d) Other loan accounts of the same borrower should be closely
monitored.
50. While calculating the provision required against NPAs, Net worth of
borrower/guarantor
a) Should be taken for arriving at secured portion
b) 80% Should be taken for arriving at secured portion d)
c) 50% Should be taken for arriving at secured portion
d) Should not be taken for arriving at secured portion
Topic:
Implementation of Basel Capital Regulatory Requirements in India Disclosure
Requirement
No. Answer
1. Capital Adequacy Ratio indicates ......................................
a) Capital as a Percentage of Risk-weighted Assets
b) Capital as a percentage of Deposits & other liabilities a)
c) Capital as a percentage of Investments of the Bank
2. Under which Pillar of RBI’S New Capital Adequacy framework (Basel-
II guidelines), minimum 9% capital adequacy for credit risk, market
risk and operational risk has been prescribed ?
a) Pillar-I a)
b) Pillar-II
c) Pillar-III
d) None.
3. Pillar-II of RBI’S New Capital Adequacy framework(Basel-II
guidelines) prescribes that
a) Banks are required to adhere to market discipline by
furnishing a set of disclosure requirements which will
enable market participants to assess key pieces of
information on the scope of application, capital, risk
exposure, risk assessment processes, and hence the capital
adequacy of the institution.
b) Banks will come under Supervisory Review Process of RBI
b)
in regard to efficacy of their Risk Management system and
will have to adhere to ‘Internal Capital Adequacy
Assessment Process’ to capture risks such as liquidity risks,
reputational risks etc. other than those prescribed under
Pillar-I to convince RBI that adequate capital is maintained
for various risks they are exposed to.
c) c) Banks are required to maintain minimum 9% capital
adequacy for credit risk, market risk and operational risk.
No. Answer
4. Pillar-III of RBI’S New Capital Adequacy framework(Basel-II
guidelines) prescribes that
a) Banks are required to adhere to market discipline by
furnishing a set of disclosure requirements which will
enable market participants to assess key pieces of
information on the scope of application, capital, risk
exposure, risk assessment processes, and hence the capital
adequacy of the institution.
b) Banks will come under Supervisory Review Process of RBI
a)
in regard to efficacy of their Risk Management system and
will have to adhere to ‘Internal Capital Adequacy
Assessment Process’ to capture risks such as liquidity risks,
reputational risks etc. other than those prescribed under
Pillar-I to convince RBI that adequate capital is maintained
for various risks they are exposed to.
c) Banks are required to maintain minimum 9% capital
adequacy for credit risk, market risk and operational risk.
5. As per RBI’S New Capital Adequacy framework (Basel-II guidelines),
the minimum capital requirement is subject to a ‘prudential floor’
which shall be the higher of
i) Minimum capital under Basel-II requirement.
ii) A specified percent of the minimum capital under Basel-I
requirement for credit & market risks. For March 2009, what is
c)
the specified percent of the minimum capital under Basel-I
requirement?
a) 80%
b) 70%
c) 90%
d) 100%.
6. Revaluation reserves are considered as a discount while determining
their value for inclusion in Tier-II capital. What is that discount?
a) 40%
d)
b) 50%
c) 60%
d) 55%
No. Answer
7. ‘General provisions on Standard assets’, ‘Floating provisions’,
‘Provisions held for country exposures’ and ‘Investment Reserve
account’ are included in Tier—II Capital but subject to a maximum
limit of a specified percent of total risk weighted asset. What is that
percent? b)
a) 1.50%
b) 1.25%
c) 1.75%
d) 2.00%
8. Which one of the following is not correct?
a) Innovative Perpetual Debt Instrument (IPDI) in excess of
15% of Tier-I Capital may be included under Tier-II Capital.
b) The outstanding amount of Perpetual Non-cumulative
preference Shares (PNCPS) along with Innovative Perpetual
Debt Instrument (IPDI) shall not exceed 40% of total Tier-I d)
Capital at any point of time.
c) Upper Tier-II instruments along with other components of
Tier-II capital shall not exceed 100% of Tier-I Capital.
d) Innovative Perpetual Debt Instrument (IPDI) in excess of
25% of Tier-I Capital may be included under Tier-II Capital.
9. Which one of the following is incorrect?
a) For computation of Tier-I Capital, intangible assets and
losses in the current period and those brought forward from
previous year, should be deducted from Tier-I Capital
b) Any gain or loss arising at the time of securitization of
standard assets, if recognized, should be deducted from d)
Tier-I Capital.
c) Securitization exposures shall be deducted from Regulatory
Capital and the deduction must be made 50% from Tier-I
and 50% from Tier-II Capital
d) All the above are incorrect.
10. The methods used for computation of capital for credit risk under
Basel-II are
a) Standardized Approach
d)
b) Internal Rating Based Approach Foundation
c) Internal Rating Based Approach-Advanced
d) All the above.
11. Bank will implement Standardized approach for computation of
capital for credit risk under Basel-II as on
a) 31.03.2009
c)
b) 31.03.2010
c) Already implemented on 31.03.2008.
d) Not known.
No. Answer
12. The methods used for computation of capital for operational risk
under Basel-II are
a) Basic Indicator Approach
d)
b) Standardized Approach
c) Advanced Measurement Approach
d) All the above.
13. Bank will implement Basic Indicator approach for computation of
capital for Operational risk under Basel-II as on
a) 31.03.2009
c)
b) 31.03.2010
c) Already implemented on 31.03.2008.
d) Not known.
14. The methods used for computation of capital for market risk under
Basel-II are
a) Standardized Method under which two methods are there-
‘Maturity Method’ and ‘Duration Method’ d)
b) Internal Risk Mangement Models Method
c) Advanced Measurement Approach
d) (a) & (b).
15. Which of the following methods has been adopted by Bank for
computation of capital for market risk under Basel-II
a) Standardized Maturity Method
b)
b) Standardized Duration Method
c) Internal Risk Management Models Method
d) Advanced Measurement Approach
16. Credit Risk is defined as:
a) Probability of default by the counter-party.
b) Probability of worsening of credit quality of a borrowal
d)
account.
c) Either (a ) or (b )
d) Both (a ) and ( b).
17. Operational risk is defined as:
a) Risk of loss resulting from inadequate & failed internal
processes.
b) Risk of loss resulting from mistakes or frauds committed by d)
the employees.
c) Risk of loss resulting from computer hacking
d) All (a),(b) & (c).
18. Which one of the following approaches has not been prescribed for
calculation of Capital charge for Credit risk?
a) Foundation Internal Ratings Based (IRB) approach
b)
b) Advanced Measurement approach
c) Advanced Internal Ratings Based (IRB) approach.
d) Standardized approach.
No. Answer
19. In which of the following Credit Risk Mitigants, hair-cut adjustment is
necessary?
a) Guarantee
c)
b) On balance sheet netting
c) Financial collaterals
d) (a) and (b).
20. The claims on ECGC will attract a risk weight of
a) 50%
b) 30% c)
c) 20%
d) 100%
21. An SSI loan account is guaranteed by CGTSI. The credit risk weight
applicable to this account will be
a) 30%
d)
b) 50%
c) 60%
d) 0%
22. The ratings of which of the following domestic rating agencies , the
banks in India may not use for the purposes of risk weighting their
claims for capital adequacy purposes.
a) CARE c)
b) CRISIL
c) FITCH
d) ICRA.
23. Credit conversion factor for “ other commitments(e.g. formal standby
facilities and credit lines) with an original maturity of one year” is
a) 50%
b)
b) 20%
c) 100%
24. What will be the ‘Level-3’ loss event type classification in case of the
following loss event: “Improper parameter setting in computerized
branch resulted in less charging of interest.”
a) System mis-operation d)
b) Mis-performance.
c) Software problem
d) Loading error.
25. To which type of ‘Business Line’ classification, the ‘Currency Chest’
operations belong to?
a) Corporate Finance
c)
b) Payment & Settlement
c) Agency Services
d) Execution, Delivery & Process management.
No. Answer
26. Probability of default is 5% , recovery rate is 90% in case of a particular
credit portfolio of a bank. What will be the expected loss if the
exposure at default is Rs1000.00 Crore for that particular portfolio of
the bank?
d)
a) Rs10.00Crore.
b) Rs20.00Crore.
c) Rs15.00Crore.
d) Rs5.00 Crore.
27. DSB-IV Return on Asset quality, Section-7: Exposure to sensitive
sectors What is the periodicity of this return?
a) monthly
a)
b) quarterly
c) half-yearly
d) yearly.
28. Which one of the following does not fall under ‘Sensitive sectors’ in
regard to DSB-IV return , Section 7, Exposure to sensitive sectors?
a) Commodities
c)
b) Real Estate
c) Credit Cards
d) Capital market.
29. How many maturity buckets up to one year are there in “Statement of
maturity pattern of deposits and loans & Advances (BS-26)”?
a) 4
c)
b) 6
c) 7
d) 5.
30. Which one of the following is a Capital market exposure?
a) Direct investment in Equity shares/convertible bonds
&debentures/units of equity oriented mutual funds.
b) Advances against shares, bonds, debentures or other
securities (taken as primary security for any purpose) or on
clean basis to individuals for investment in shares
(including IPOs/ESOPs)/convertible bonds e)
&debentures/units of equity oriented mutual funds.
c) Advances against collateral securities of Equity
shares/convertible bonds &debentures/units of equity
oriented mutual funds for any other purpose where primary
security does not fully cover the advances.
d) All exposures to ‘venture Capital funds. e) All the above.
No. Answer
31. Which one of the following is not a Capital market exposure?
a) Secured and un-secured advances to Stock brokers and
guarantees issued on behalf of Stock brokers and market
makers including finance extended to Stock brokers for
margin trading
b) Loans sanctioned to Corporates against security of shares,
bonds, debentures or other securities or on clean basis for
meeting promoters’ contribution to the equity of new
e)
companies in anticipation of raising resources.
c) Bridge loans to Companies against expected equity
flows/issues.
d) Underwriting commitments taken by the bank in respect of
primary issue of Equity shares/convertible bonds &
debentures/units of equity oriented mutual funds.
e) Loans against Non-convertible bonds &debentures/debt
oriented mutual funds.
32. Undrawn or partially undrawn credit facilities
a) Attract capital as per Reserve Bank of India guidelines for
the New Capital Adequacy Framework
b) Does not Attract capital as per Reserve Bank of India
guidelines for the New Capital Adequacy Framework
c) Credit facility commitments that are unconditionally
cancellable at any time by the Bank without prior notice or e)
that effectively provides for automatic cancellation due to
deterioration in borrower’s credit worthiness would attract
a credit conversion factor “zero” and therefore, such
commitments would not need any capital support
d) (b) & (c)
e) (a) & (c)
33. Exposure to non-scheduled banks with CRAR of 8% is risk weighted
as
a) 350%
d)
b) 250%
c) 100%
d) 150%.
34. The investment made by the Bank in bonds and debentures of
corporate which are guaranteed by a PFI will be treated as an
exposure by the Bank on :
a) The PFI and not on the corporate. a)
b) The corporate PFI and not on the PF
c) Both The PFI and the corporate
d) NOA
No. Answer
35. Group Borrower Exposure Limit is
a) 15% of capital fund
b) 20% of Capital Fund, provided additional 5% Exposure is to
Infrastructure sector d)
c) 40% of Capital Fund
d) 50% of Capital Fund, provided additional 10% Exposure is
to Infrastructure sector
36. Single Borrower Exposure Limit is
a) 15% of capital fund
b) 20% of Capital Fund, provided additional 5% Exposure is to
Infrastructure sector b)
c) 40% of Capital Fund
d) 50% of Capital Fund, provided additional 10% Exposure is
to Infrastructure sector.
37. Single and Group Borrower Exposure Limits are calculated by :
a) credit exposure (funded + non funded credit limits)
b) credit exposure (funded + non funded credit limits) +
investment exposures (including underwriting and similar
commitments) b)
c) credit exposure (funded + non funded credit limits) +
investment exposures (not including underwriting and
similar commitments)
d) NOA
38. Where the realizable value of the securities as assessed by the Bank/
approved valuers / Reserve Bank’s Inspecting Officers, is not more
than 10 per cent, ab-initio, of the outstanding exposure :
a) It is called an Unsecured exposure a)
b) It is called a Partly secured exposure
c) It is called a Partly unsecured exposure
39. Unsecured exposure will attract the following provision
a) 20% for assets in Substandard Category
b) 100% for asses in Doubtful and Loss Category c)
c) Both (a) & (b)
d) None of (a) & (b)
40. Risk weight of claims secured by Residential Properties wherein
outstanding amount is more than Rs30 lac and LTV is less than 75%
a) 50%
b)
b) 75%
c) 20%
d) 100%
No. Answer
41. Single borrower exposure limit in case of oil companies who have
been issued oil bonds(which do not have SLR status) from
Government of India
a) 15% of Capital fund c)
b) 20% of Capital fund
c) 25% of Capital fund
d) 30% of Capital fund
42. Banks may consider enhancement of borrower exposure above normal
ceilings with the approval of the board. What s the extent of
enhancement of such exposure?
a) 15% of Capital fund d)
b) 12% of Capital fund
c) 10% of Capital fund
d) 5% of Capital fund
43. Bank’s aggregate capital market exposure is 40% of Bank’s Net worth.
Which of the following is true in respect of Prudential exposure limit
for different type of Capital market exposures?
a) Ceiling for exposure to capital market investment is 20% of
Bank’s net worth.
d)
b) Ceiling for exposure to Stock brokers and Market makers is
15% of Bank’s net worth.
c) Ceiling for exposure to Single stock broking entity including
its associates and inter-connected companies is Rs50Crore.
d) All the above.
44. Exposure on CCIL for the purpose of lending under CBLO may be up
to
a) 25% of Capital reckoned for Capital adequacy purpose
b) 50% of Capital reckoned for Capital adequacy purpose e)
c) 75% of Capital reckoned for Capital adequacy purpose
d) 100% of Capital reckoned for Capital adequacy purpose
e) 200% of Capital reckoned for Capital adequacy purpose
45. Exposure limit for investment in Debt Funds
a) 10% of the scheme corpus
b) Rs 50 Crores d)
c) Both the above
d) Minimum of the above
46. Exposure limit for investment in Equity or equity linked Funds
a) 10% of the scheme corpus
b) Rs 25 Crores c)
c) Both the above
d) Minimum of the above
No. Answer
47. Maximum exposure that can be taken on banks with highest rating:
a) 150% of our Risk capital
b) 150% of the banks capital plus reserves & surplus net of
b)
revaluation reserve
c) Lower of (a) and(b) above
d) Higher of (a) and (b) above
48. In respect to country risk, number of category classification followed
by ECGC is :
a) 5
b) 7*
a)
c) 9
d) 11
*(A1- insignificant; A2- Low; B1- Moderate; B2- High; C1- very High;
C2 – Restricted and D – Off Credit)
49. In respect of a country where bank’s net funded exposure is 1% or
more of its total assets, minimum provisioning requirement in respect
to country risk is :
a) 0.25%
a)
b) 5%
c) 20%
d) 25%
e) 100%
50. In case of NBFCs and Housing Finance companies, provided capital
adequacy ratio as prescribed by RBI is maintained,
a) CMD/ED may permit Debt Equity Ratio level of higher
than 3:1
c)
b) GMs at HO and GMs (Regions) may permit Debt Equity
Ratio up to 7:1
c) Both of the above
1. Reserve Bank of India’s functions are classified into d
(a) Supervisory & Regulatory

(b) Issuance of currency notes
(c) Promotional & Developmental
2. d
Know your customer means
(a) Know your prospective customer
(b) Know your existing customer
(c) Know all the customers
(d) To satisfy about customers identity & activities.
3. a
Sec131 of Negotiable Instrument act provides protection to
(a) Collecting Bank.
(b) Paying Bank.
(c) Issuing Bank
(d) Negotiating Bank
4. a
What is due diligence
(a) Investigation or audit
(b) Analysis of performance.
(c) Risk Assessment
5. a
What is the nature of Charge against stock in CHG 1
(a) Hypothecation
(b) Mortgage
(c) Floating Charge
(d) Others
6. “Hypothecation” applicable to b
(a) Corporate Guarantee

(b) Movable Goods
(c) Book debts
(d) Immovable Property.
7. d
A company taken advance against security of Fixed Deposit.
What type of Charge to be created
(a) Hypothecation.
(b) Floating Charge
(c) Book debt
8. Capital adequacy is the ratio of capital fund to _____ C
(a) Total demand and time liabilities

(b) Risk weighted current liabilities
(c) Risk weighted assets
(d) Net demand and time assets
9. d
A bank extends finance of Rs 500 lakhs to M/S XYZ Co a
partnershipfirm against hypothecation of stock & mortgage of
Property . Charge to be registered with Registrar of Companies :
(a) Within 30 days from date of documents
(b) Within 30 days from date of sanction.
(c) Within 30 days from date of advance
10. Term CREDIT MANAGEMENT covers d
(a) Risk Management

(b) Capital adequacy
(c) Credit appraisal
11. a
Cash Credit account of a borrower shows Credit balance in the
borrowers books. The relation ship between bank & borrower is:
(a) Debtor/Creditor
(b) Creditor /Debtor
(c) Bailor/Bailee
12. d
Law of Limitation is not applicable in respect of
(a) Advance against mortgage of property.
(b) Advance against stock & book debt.
(c) Advance against plant & machinery
(d) Advance against fixed deposit of bank.
13. a
Which statement on LC on DA basis is true:
(a) LC on DA to be payable on presentation.
(b) LC on DA payable after due time.
(c) LC on DA basis payable immediately after days of grace
14. b
Letter of credit on DP terms means
(a) Payable on due date
(b) Payable immediately after days of grace
(c) Payable after some time.
(d) Payable according to wishes of beneficiary.
15. b
RTGS means
(a) Settlement after clearing
(b) Real time gross settlement
(c) Credit afforded after amount collected .
(d) Regular Time group settlement
16. a
A bank has to honour the cheque within the specified banking
hours as per which section of Negotiable instrument act.
(a) Sec65
(b) Sec 23
(c) Sec29.
(d) Sec35
17. d
Which of the following are objective of Concurrent Audit:
(a) Reduce the interval between the transaction & its
immediate examination.
(b) Identification of areas requiring corrective action.
(c) Compliance with internal as well as statutory guidelines
(d) All of the above.
d
Risk Management & monitoring procedures includes:
18.
(a) Internal audit/Inspection.
(b) Adherence of FCRA
(c) Terrorism Finance
Review of all borrowal accounts availing fund based working a
19.
limit of 10 lakhs& above should be undertaken at least
(a) Once in every year
(b) Once in every half year
(c) Once in quarter
(d) Once in two year
a
Quarterly monitoring statement needs to be submitted by the
20.
borrowers availing
(a) One core & Above
(b) Five cores & above
c) 50 lakhs & above
d) 10lakhs & above.
b
What is the method of lending followed by banks for Industrial
21.
/Trading working capital finance
a) 1St method
b) 2nd method
c) Cash budget method
d) Net means method
a
IRAC is the abbreviation for
22.
a) Income recognition & assets classification.
b) Interrest recovery & assets called for.
c) Income recovery at cost
b
Income is recognized in NPA account
23.
a) On accrual basis.
b) On realization.
c) On debit in the account
a
Which of the following statement in respect of Interest accrued
24.
in NPA account is true.
a) Interest accrued debited to Interest receivable account
on the asset side of Balance sheet & credited to the
overdue interest reserve account on the liability side.
b) Interest accrued credited to Interest receivable account
on the Profit & loss & debited to the overdue interest
reserve account on the liability side.
c) Interest accrued credited to Interest receivable account
on the memorandum account & debited to the Interest
receivable account .
Capital Adequacy Ratio indicates ......................

25. a) Capital as a Percentage of Risk-weighted Assets a)
b) Capital as a percentage of Deposits & other liabilities
c) Capital as a percentage of Investments of the Bank
S. Questions Answer
No.
26.
What is Due Diligence. d.
a. Checking Records of the company from books
b. Checking of data submitted to bank/FI.
c. Financial planning.
d. To analyze from records various information submitted by
the customer.
S. Questions Answer
No.
27.
Due diligence applicable to which type of organizations.
a.Propritorship firms. d.
b. Partnership firms.
c. Trusts.
d. Company registered under per Co Act.
S. Questions Answer
No.
28.
How many types of Due Diligence can be conducted. ALL
a. Commercial Due Diligence
b. Legal due Diligence.
c. Financial due Diligence
d. Reputational Due diligence.
S. Questions Answer
No.
29.
What is Statutory Register-
a. Excise Records. d.
b. Books of Accounts
c. Records to be maintained as per Companies Act-
d. Any other statutory records.
S. Questions Answer
No.
S. Questions Answer
No.
30.
Reason for introduction of Due Diligence Report. c.
a. To check frauds.
b. Check credit history of the borrowing company.
c. Sharing of Information among banks.
d. Any other reason.
S. Questions Answer
No.
31.
What is Listing Agreement.
a. Agreement entered by the company with Bank. c.
b. Agreement for corporate Guarantee
c. Agreement with Stock exchange.
d. Agreement between Directors.-
S. Questions Answer
No.
32.
Management of the company carried out by whom.
a. Directors. a.
b. Partners.
c. Shareholders.
d. Managers.
S. Questions Answer
No.
33.
What should be examined from Memorandum of association.--
A Capital Clause of Memorandum
b. Object clause of Memorandum. b.
c. Other object clause.
d. Incidental clauses.
S. Questions Answer
No.
34.
What should be checked from Articles of Association.
a. Share capital clause. C,d
b. Directors clause.
c. Borrowing Power Clause.
d. Common Seal Clause.
S. Questions Answer
No.
35.
What is Related Party
a. Directors & Their Relatives.
b. Directors, Their close relatives, Companies in which b.
directors are interested.
c. Managers.
d. Any other persons with whom company entered
transactions.
S. Questions Answer
No.
36.
Why Transaction with related Party to be checked
a. To ensure that transactions are genuine business transaction a.
& prices are at arms length.
b. To record the business transaction with group company.
c. Genuinity of transactions.
d. Any other reason.
S. Questions Answer
No.
37.
If the company makes advances or provided gurantee etc
which section of companies act to be complied. a.
a. Section 295 .
b. Section 292.
c. Sec 293(1)
d. Sec 293A.
S. Questions Answer
No.
38.
To check the borrowing limit what is to be checked. d.
a. Articles Of Association
b.Resolution of the company.
c. Bank sanction letter.
d. Articles of association & Resolution under sec 293(1) (d)
S. Questions Answer
No.
39.
What is Defaulters list of RBI.
a. List published by RBI showing names of the person
defaulted in payment. a.
b. Person defaulted in payment of Tax.
c. Directors defaulted in submission of return to MCA.
d. Defaulting company not getting accounts audited.
S. Questions Answer
No.
40.
When name of the borrower appeared in ECGC Specific
approval list. b.
a. Company defaulted in realization of export proceeds.
b. bank declared the account as NPA.
c. Non payment or adjustment of Packing credit in time.
d. Delayed realization of export bills.
S. Questions Answer
No.
41.
-What is Charge.
a. Liability recorded in the books of Register of Companies as a.
per sec 125 of the companies Act.
b. Hypothecation of goods.
c. Mortgage of Property.
d. Corporate Gurentee
S. Questions Answer
No.
42.
Where form charge of the company can be checked. c.
statutory register
b. MCA site
c. a& b both
d. bank record.
S. Questions Answer
No.
43.
FOREX Exposure & overseas borrowing
a.Loan taken by co from overseas market. b.
b. foreign exchange booked by the company for Import or for
loan repayment, Overseas loan.
c. Foreign bills lodged for purchase/collection..
d. Any other transaction.
S. Questions Answer
No.
44.
What is redemption of Preference Shares
aTo pay off/coversion the liability of preference shares on a.
maturity.
b.Allotment of preference shares
c. -----------------------
d. -----------------------
S. Questions Answer
No.
45.
What is to be checked in Insurance policy. d.
a. Amount of Coverage
b. Bank Cluase.
c. nature of Policy & validity
d.All of the above points
S. Questions Answer
No.
46.
What is to be checked from Bank sanction letter.
a. Compare with FORM -8 about limits properly mentioned & d.
registered.
b. Whether proper documents executed & common seal affixed
with proper resolution.
C Whether borrowing company adhered all borrowing
convenants.
d. All of the above.
S. Questions Answer
No.
47.
-End use of the fund.
a. To ensure the purpose for which the fund borrowed has a.
been complied.
bFund utilized by the company to pay off liability.
c. Fund utilized to invest in shares or other purposes.
d. Fund utilized for any other purpose for which bank not
sanctioned loan.
S. Questions Answer
No.
48.
Short term fund used for long term purposes.
a. Working capital used for purchasing Fixed assets/long Term a.
assets.
b. Plough back of Profit.
c. Repayment of term loan out of reserve & surplus.
d. Investment made in shares.
S. Questions Answer
No.
49.
Declaration of Dividend.
a. Company declared dividend out of profit of the current
year.. d.
b. Whether company complied with Companies (Transfer of
Profit to Reserve ) rules 1975.
c. If dividend declared out of profit of previous year then
companies ( declaration of Dividend out of Reserves) rules has
been complied with.
d. All of the above.
S. Questions Answer
No.
50.
Whether Company Paid statutory dues a.
a. Statutory dues includes all types of taxes( service Tax,
Income Tax, VAT etc), PF/ESI .
b. Dues for unsecured loans.
c. Bank dues.
d. Term loan instalment.
S. Questions Answer
No.
51.
Inter corporate Loans & advances which section of Companies
act to be complied a.
a. Section 372A
b. Section 373
c. Sec 372
d. All the above.
S. Questions Answer
No.
52.
Accounting standards to followed for Related Party
a. AS 2 b.
b.AS 18
c. AS 5
d. AS 6
S. Questions Answer
No.
53.
In case of acceptance of public deposits which sec of
Companies act it attracts & Under what rule return of deposit
to be filed. b.
a. Sec58A, & rule 14
b. Sec58A & rule 10
c. Sec 58.
d. Sec 59
S. Questions Answer
No.
54.
After How many years unpaid divided to be tranffered to
Investors Education & Protection Fund. a.
a. 7 years from the date they first became due.
b. 8years
c. 7 years
d. 9 years
LOAN DOCUMENTATION :-
S. Questions Answer
No.
55.
What is consortium agreement?
a. It is agreement between bankers. b.
b. It is agreement with bankers & borrowers.
c. It is agreement for sharing of information.
d. It is agreement for sharing securities.
S. Questions Answer
No.
56.
What is interse agreement?
a. It is agreement between bankers. a.
b. It is agreement with bankers & borrowers.-
c. It is agreement for sharing of informations
d. It is agreement for sharing securities
S. Questions Answer
No.
57.
What is Multiple banking
a.Various banks financing a single company under common b.
loan document.
b. Various banks financing a single company under individual
bank’s loan document
S. Questions Answer
No.
58.
What is Pari Passu Charge.
a. All the bank has got same right over the securities a.
hypothecated or Mortgaged.
b. Bank’s having charge as per their own document.
c. Bank is not liable to share the sales proceeds in the event of
sale of assets.
d. None of the above.
S. Questions Answer
No.
59.
What document bank need to take in case of Equitable
Mortgage.
a. Deposit of title deed of the property & letter of confirmation a.
for such deposit.
b. Legal document on stamp paper.
c. Stamp duty to be paid on equitable Mortgage
d. All the above
S. Questions Answer
No.
60.
What is Search report .
a. Search at the office of Registry office. d.
b. Search at MCA site
c. Search at Income Tax office.
d. Search at MCA site & Registry office.
S. Questions Answer
No.
61.
At MCA site what type of document can be seen.
a. Annual return.
b. Charge Document/Form 32/Form 5/Incorporation d.
Document etc.
c. Balance sheet & directors report.
d. All the above.
S. Questions Answer
No.
62.
Usually Profit & Loss account of Private limited co not
displayed in MCA site.
a. Pvt ltd cos are not filing annual return. c.
b. Pvt ltd cos not filing 23AC/23ACA.
c. As per Sec 220 of the Companies Act 1956.
d. Pvt ltd co’s are not supposed to disclose their financial
position.
S. Questions Answer
No.
63.
What is Cash Credit ( Hypothecation)
a. It is a nomenclature of account where bank is financing a.
against stock & Book debt.
b. cash credit means advance for export.
c. It means advance against recivables.
d. It is mortgage advance.
S. Questions Answer
No.
64.
Any advance for export of goods called as
a. Cash credit C
b. Bill finance-
c. Packing Credit
d. Overdraft.
S. Questions Answer
No.
65.
What is the Meaning of CMA data.
a.Credit monitoring arrangement data. a.
b. Credit manufacturing advance data
c. -----------------------
d. -----------------------
S. Questions Answer
No.
66.
What is cash budget system & applicable to which Industry for
finance. d.
a. All the manufacturing units.-
b. Tea.
c. Sugar
d. Tea & sugar both.
S. Questions Answer
No.
67.
All mortgages are now to be registered at which site.
a. Individual local govt site.
b.Banks own site. c.
c. CERSAI site(The Central Registry of Securitisation Asset
Reconstruction and Security Interest of India (CERSAI)
S. Questions Answer
No.
68.
Bank is controlling advance on day to day through what
document.
a. QMS. b.
b. Stock /Book debt statement.
c. CMA data
d. All the above.
S. Questions Answer
No.
69.
What is PBF.
a. Permissible bank finance. a.
b. permitted bank finance.
c. -----------------------
d. -----------------------
S. Questions Answer
No.
70.
What is the pupose of CMA data.
a. To compute fund requirement of the borrower on the basis a.
of projected activity.
b. To sanction loan to the borrower.
c. Assessment of credit requirement on the basis actual.
d. To ensure demand of company’s end product.
S. Questions Answer
No.
71.
What is debit & Credit summation.
a. it is debit & credit in company’s books.
b. Sum total of debit & credit. c.
c. Total debit & credit in any financial year in company,s
account with bank.
S. Questions Answer
No.
72.
Fund flow statement in CMA data reflects what.
a. Long term fund generated & deployed.
b. Short term assets & short term liabilities generated. d.
c. Change in bank outstanding
d. All of the above.-
S. Questions Answer
No.
73. What is Drawing Power.
a. Fund can be drawn by the company against stock or book
debt. a.
b. Debit authority.
c. Right to draw fund.
S. Questions Answer
No.
74.
Corporate Guarantee.
a. Guarantee given by other company to secure the loan given a.
by bank.
b. Guarantee given by 3rd parties.
c. Guarantee by own company for own debt.
d. Gurantee by individuals.
S. Questions Answer
No.
75.
Legal Audit.
a. Audit carried by lawyears to certify that document taken as a.
per act of the land & bank.
b. Audit of documents only.
c. To check legality of the documents.
dAll of the above
S. Questions Answer
No.
76.
What are the main features of KYC
a)Identity d.
b) Residential Status.
c)Resident or Non resident
d)Identity & address.
S. Questions Answer
No.
77.
Even after compliance of KYC can bank ask for KYC
compliance again.. c.
a)No.
b)Incase of change of Address.
c)Yes for the purpose of updating customer profile.
S. Questions Answer
No.
78.
Essential Ingredients of KYC policies..
a)Customer Acceptance policy e.
b)customer Identification procedures
c)Monitoring of transactions.
d)Risk Management
e)all of the above

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Objective questions with answers – Foreign Exchange & Trade

5. Which of the following statements are correct >

6. RFC domestic account can be opened by

7. Which of the following is not a permissible credit in an NRE account

9. The maximum term for opening an FCNRB deposit is

10. Balances in NRE deposits are

11. Balances in NRO deposits are

12. Which of the following transactions are exempt from submission of

13. Interest on FCNRB is linked to

14. Interest earned on FCNRB is

17. Which of the following statements is incorrect

18. 15 CA & 15 CB is mandatory in which of the following remittances

21. The foreign trade policy of the country is announced by the

24. Open account system as a method of payment indicates

25. Under advance remittance, the risk is borne by the

26. Import licenses are issued by

27. DA in International Trade refers to

28. DP in international trade refers to

29. Documentary credits are governed by the provisions of

31. A confirmed letter of credit is one

32. The responsibility of the Advising Bank of a letter of credit is to

33. Certificate of origin indicates

34. The following document does not evidence sale

35. Bill of lading evidences

36. Pick the odd man out:

39. LIBOR refers to

40. The Authorized Dealers under FEMA are classified into

41. Indian rupee is fully convertible on

42. The number of Nostro accounts that can be maintained by a Bank in a

43. The maximum inward remittance permitted under a trade transaction in

44. Authorised Dealers – Category I in India are

46. Goods being imported under restricted list requires

47. The application to be submitted to customs for clearance of export cargo is

48. Beneficiary under the letter of credit is

50. A confirmed letter of credit is one

54. Certificate of Origin indicates

55. The following document does not evidence evidence sale

56. Freight to pay bill of lading is acceptable if

57. INCO terms (International Commercial Terms) cover

60. Adoption of INCO terms is

61. The amount of packing credit should not normally exceed

62. Packing credit can be made for a maximum period of

63. Pre-shipment credit in foreign currency is available for a period of

72. ISBP refers to

73. SDF refers to

74. EDF refers to

75. INCO terms refer to

76. Form 83 refers to

77. Form ECB refers to

79. Say True or false:-

a) To use bands instead of staple pins

2. Cash Movement’ register contains details of which the A Difficult

a) Movement of Cash between the Cash Safe and the

3. In case of counterfeit currency, FIR is required to filed D Easy

a) 1 or more piece in a single transaction

4. Counterfeit currency is required to preserved for a B Easy

5. Nomination is not available for accounts in D Easy

7. In case of faulty ATM transaction, the customer is to be C Easy

8. A joint account can be opened by maximum C Difficult

9. Signature on the nomination form are to be witnessed C Difficult

10. Banks are not allowed to open foreign students D Easy

a) Within 7 days from the opening of Basic