REVIEW TEST

5) Retail loans excepting Housing loans generally is:

A. Large amounts
B. Medium amounts
C. Small amounts
D. Medium and small amounts

6) A cheque signed and delivered by the borrower to the lender is like a

promise/assurance by the borrower to the lender that:
A. There is sufficient balance/or proper arrangement
B. There are no legal restrictions for payment
C. The cheque will be honored on presentation
D. The payment of the cheque will to be stopped

7) Savings accounts may contain some restrictions regarding

A. Number of withdrawals per quarter
B. Amount of withdrawals’ per transaction in ATM
C. Number of deposits into the account per quarter
D. Both A and B as above

8) How important is it for the recovery agency to follow the Banking

codes and standards
A. Very important, as he is representative of the bank and must follow
it strictly
B. Slightly important, as he does not have to follow the code od conduct
all the time
C. Not all important, as he can follow the code if conduct only itit suits
him
D. Both B and C above

9) Who of the following is not a party to a debt?

A. Creditor
B. Debtor
C. Agent
D. Both A and B above

10) Which one of the following is at a regular Debt Recovery process as

defined under Model Policy of DRA of IBA
A. Legal Recovery Process
B. Asset Possession Process
C. Difficult Recovery Process
D. Recovery through compromise
11) The recovery agents of a bank should follow
A. Only the debt recovery policy and procedure of the (principal)
confirming to the extant laws
B. Only the directives of RBI on recovery agents engaged by banks
C. Only the Model Policy on collection of dues etc.. framed by IBA
D. All the above

12) If a borrower who has defaulted from paying his dues to the bank
does not take your calls and you do not even find him at his
corresponding address, you would:
A. Intrude into the privacy of the borrowers close relatives
B. Check with the bank for the personal and professional references
given by the borrower
C. Take help from the telecom department for tracing the borrower’s
calls
D. Pressurize the guarantor

13) Which of the following is not a sub-category of commercial banks

A. Public sector banks
B. Private bank sectors
C. Foreign banks
D. Land development banks

14) Which one of the following is not a source of information to compile

opinion reports on the means and assets of the defaulting debtors
A. Chamber of Commerce
B. Business references
C. Credit Information Agencies
D. Indian Banks Association

15) As per KYC guidelines, purchase of Demand drafts/Telegraphic

transfers beyond Rs.50,000
A. Can be permitted in cash
B. Can be permitted subject to production of documentary evidence
C. Can be permitted by debit to the account only
D. Can be permitted at all

16) The customer asks you to waive his dues, in such a situation you
would:
A. Ask him to send a letter regarding it
B. Explain that you have no authority to waive the dues, and only the
bank can do it
C. Threaten the customer that you will file a complaint with the police
D. Laugh at him and tell him it is not possible
17) Short Term Deposits are:
A. Term deposits which have a maturity period up to 1 year
B. Term deposits which have a maturity period up to 30 days
C. Term deposits which have a maturity period up to 6 months
D. Term deposits which have a maturity period up to 90 days

18) A bank hires a DRA for recovering dues from debtor D. In the
agency agreement D is referred to as:
A. a debtor
B. a borrower
C. the principal
D. third party

19) Which of the following document can be accepted as identification

proof by Banks for the purpose of opening of new Accounts?
A. PAN card
B. Credit Cared statement
C. Electricity bill
D. Telephone Bill
20) The ownership of an auto taken by a borrower under a hire-
purchase agreement lies with:
A. The borrower-right from day one of the loan
B. The finance company till last installment is paid
C. The borrower after the first installment is paid
D. Both B and C above

21) Before making a telephone call to a customer, a recovery agent

should ensure that:
A. He/she been authorized by the bank to collect the due debt form the
customer
B. The customer has been notified by the bank of the details (name.
telephone number etc) of the recovery agent from the collection of the
due debt
C. Both the above requirements are followed
D. None of the above is necessary

22) What would your attitude be as a recovery agent during the

recovery process?
A. You would show a posture of superiority towards a customer
B. You would understand and be patient with a customer
C. You would be arrogant towards a customer
D. You would show disrespect to a customer
23) Recovery job is made more difficult when the recovery agent treats
the borrower
A. Courteously
B. With respect
C. With contempt
D. With understanding

24) An overdraft is generally allowed by banks in:

A. Savings account
B. Current account
C. Recurring deposit accounts
D. Term deposit accounts

25) Interest on savings account continues to be regulated by Reserve

Bank of India and presently it is:
A. 2.50%
B. 4.00%
C. 3.50%
D. 5.50%
26) While furnishing the credit report to another bank, the bank
issuing the report should ensure that report is
A. Signed by branch in-charge
B. Signed by minimum two officials
C. Signed b Branch in-charge and accountant
D. Not signed at all

27) Which of the following is not the specialized function of debt

collection agencies?
A. Warning the customer
B. Re-possessing the security
C. Initiating legal action
D. Tracing the vanished borrower

28) When the banker-customer relationship is terminated?

A. On the death of the customer
B. On the customer becoming lunatic
C. On the customer being declared insolvent
D. On the closure of the account

29) Showing empathy and respect to the other party is:

A. Element of interpersonal skill
B. Element of communication
C. Element of listening
D. Element of speaking

30) Money Laundering basically involves three independent steps that

often occur simultaneously viz:
A. Placing, layering and Disintegration
B. Placement, Layering and Integration
C. Placing, Cementation and Interrogation
D. Placement, Surfing and Strutting

31) As a DRA, you are not likely to deal with:

A. Credit card holders
B. Borrowers for vehicles
C. Borrowers under personal loans
D. Debit card holders

32) DMP refers to :

A. Debt Modification Program
B. Debt Management Programme
C. Debt Module Plan
D. It is a programme for debt recovery agent

33) Should the customer refuse to pay his dues it is important to

inform:
A. His neighbors
B. His office colleagues
C. His relatives
D. Supervisor of the DRA and the bank

34) As a DRA, when you visit a borrower’s residence you come to know
that borrower is out of the town. There are some visitors or guests in
the house. Your appropriate course of action would be:
A. To discuss the default account with adult family members even in
presence of children
B. To discuss the default account with adult family members even in
presence of visitors
C. As borrower is not present in the house, you have to choose another
day to see the person you came to see and leave
D. None of the above

35) While having conversation with a customer, he demands to know

about your rights and duties as a recovery agent. In such a case you
would tell him that a recovery agent has a right to:
A. Use physical force to collect dues from a customer, if required
B. Threaten the customer verbally and abuse the customer, if required
C. Use unlawful means to collect dues from the customer, if required
D. Follow the instructions of the bank that has engaged him for the
stipulated task

36) You reach the customer’s office and while waiting for the customer
you start discussing the customer’s inability to pays his dues to the
bank with his office colleagues. Is it appropriate for you as a recovery
agent to talk about the customers dues in front of his office colleagues?
A. Yes, this would pressurize him to pay his dues faster
B. Yes, it would intrude upon his privacy and would hurt him
C. Yes, this would embarrasses him in front of others
D. No, it is not correct to share customers’ details with anyone

37) You are at the borrowers place, and the customer says that he will
not be able to talk to you as he as to leave his house for some genuine
reason. In such a case you would:
A. Leave the borrower’s house and come back when the borrower is
back
B. Remain in the borrower’s house till he comes back
C. Tell the borrower that he cannot leave his house until he pay his
dues
D. Tell him that you will wait at his neighbor’s place

38) You can visit a customer earlier or later that the time prescribed by
the customer when:
A. You feel that due to the nature of his employment e.g: working in
shifts the customer is available outside these hours
B. You feel that it is convenient for you to visit him outside these hours
C. You feel that it is convenient for the customer’s family to visit him
outside these hours
D. None of the above

39) Mr. Raj, a customer, has asked you to avoid calling him between
10.00AM and 11.00 AM for any information related to the recovery of
the money. The time is 10.15 AM and you need to remind him to pay
his previous month’s dues. In such case you would:
A. Call him right away and remind him
B. Call him around 10.30 and remind him
C. Call him and tell him that you’ll take only 10 minutes of his time to
remind him
D. Call him after 11.00 AM and remind him

40) As recovery agent, you must treat the debtor:

A. With due respect and courtesy
B. As s fellow human being
C. With empathy and understanding
D. Both A and B above

41) Apart from documenting the important developments and events of

the collection process, Bank’s also advice DRA to record:
A. Family History of the debtor
B. Conversations of the DRA with the defaulted debtors held during
the recovery process
C. Activities of the defaulting debtors
D. All the above

42) Which of the following document must be carried by the recovery

agent and shown to the customers on demand?
A. Recovery agreement with the recovery agent
B. Authorization latter to collect the dues from the specified debtor
C. PAN card
D. Both A and B above

43) The Prevention of Money Laundering Act came into effect from
A. 2001
B. 2004
C. 2005
D. 2002

44) Which of the following is not a sub category of public sector banks?
A. State Bank of India and its subsidiaries
B. Local Area Banks
C. Nationalized banks
D. Regional Rural Bank

45) Market share of Home Loan by Banks as per 2005 survey

information is :
A. 20%
B. 5%
C. 10%
D. 49%

46) Verbal communication includes:

A. Written words
B. Spoken words
C. Facial gestures
D. Both A and B above

47) Right of Compensation arises as per:

A. Sec 221 of Indian Contract Act
B. Sec 225 of Indian Contract Act
C. Sec 226 of Indian Contract Act
D. Sec 230 of Indian Contract Act

48) Sometimes, bankers charge higher interest rate on overdue amount.

Such interest is known as:
A. Additional interest
B. Default interest
C. Overdue interest
D. Penal interest

49) The generic duties of agents contained in the relevant Act, include:
A. Duty to follow lawful instructions of the principal
B. Duty to follow lawful and unlawful instructions of the principal
C. Duty to follow customs of the trade/industry, where instructions of
the principal are silent
D. Both A and C above

50) Bank’s lay down their policy and procedure for collection for past
dues in conformity with:
A. Will and pleasure
B. Legal and regulatory framework
C. No such references
D. In consultation with customers

51) If the customer starts abusing you, what do you do?

A. Abuse him back
B. Send him a legal notice
C. Remain calm and patient
D. Beat him up

52) Legal Recovery Process involves:

A. Intervention of the court
B. Non-intervention of the court
C. Negotiated and one time settlement
D. Outside court settlement

53) ‘Doubtful’ assets generally have over dues which are:

A. Less older that those of loss assets
B. More older than those of sub-standard assets
C. More older than those of loss assets
D. Both A and B as above

54) Credit risk to the bank is high from the:

A. Credit card holders
B. Debit card holders
C. PAN card holders
D. ATM card holders

55) Recovery agent’s job is to collect dues of banks, NBFCs etc.. under:
A. Business loans
B. Retail loans
C. Project loans
D. Industry loans

56) Common points to be followed in recovery strategies are:

A. Establishing good rapport
B. KYC papers of the customer to be studied
C. Study the copy of loan agreement of debtor
D. Both A and C above

57) Duty of confidentiality is based on:

A. Contract Act
B. IBA code of Debt Recovery
C. Customary practice in the banking industry
D. Both B and C above

58) Under AML/KYC guidelines, “illegal means” refers to:

A. Drug trafficking, illegal arms trade
B. Salary proceeds
C. Business income
D. Professional income

59) Returning of money by a borrower to the bank:

A. Is not compulsory
B. Is at borrower’s convenience
C. Is necessary only when the bank asks it back
D. Should be as per loan agreement terms

60) In case where details of instructions are not given in the agreement,
the agent has to follow the commercial customs and industry practices.
This is defined under which duty of the DRA?
A. Duty to follow trade sanctions
B. Duty to follow instructions
C. Duty to render accounts
D. Duty to follow trade customer

61) Communicating rudely with debtors is:

A. Productive
B. Counter-productive
C. Necessary at time
D. Good strategy for recovery

62) Before going on a visit to borrower for recovery, you should ensure
that:
A. The dues are still outstanding
B. Amount due and agents name are notified to the borrower
C. Appointment from the debtor for the visit is taken
D. All the above

63) When a customer deposits money in the bank the relationship of the
customer and bank is:
A. Creditor-debtor
B. Debtor-creditor
C. Bailor-bailee
D. Lessor-lessee

64) The parties in a DRA contract are:

A. The DRA, and the bank
B. The DRA, the bank and bank’s borrowers
C. The DRA, the bank and only defaulting borrowers
D. The DRA, the bank and all the customers of the bank

65) Which of the following id not classification of loan assets as per

regulator guidelines?
A. Standard assets
B. Sub standard assets
C. Doubtful assets
D. Difficult assets

66) From the following which is not retail lending product?

A. Housing loan
B. Vehicle loan
C. Credit card receivables
D. Loans under Govt. Sponsored schemes

67) Appropriate authorization by bank means:

A. Legal notice
B. Demand notice
C. Bank’s letter to debtor informing details of Recovery agent engaged
by them for recovery of the particular loan
D. Signed notice of demand

68) Dignity and respect to customers” principles of the debt collection

policy of banks is based on:
A. Banking codes and standards Boards of India
B. The RBI directives on recovery of debts, including recovery agents
engaged by the bank
C. The model policy on collection of Dues and Repossession of Security
framed by the Indian Bank’s Association
D. Both B and C above

69) Debt recovery agent and debtor during communication are:

A. Communicator and receiver
B. Receiver and communicator
C. No relationship
D. Both are communicators

70) Which is the first step to be followed in the recovery process?

A. Call the customer and ask him about a time that is convenient to
meet him
B. Meet the customer directly at his house
C. Meet the customer directly at his office
D. None of the above

71) When you meet a customer for the first time for collection you
would:
A. Discuss the problems he is facing to repay his dues
B. Warn him about sending him a legal notice
C. Warn him that his asset/property will be re-possessed immediately
D. Warn him that he can be detained in police custody

72) In case of a borrower who is heavily indebted, which of the

following would not be an ideal approach of a DRA in respect of
recovery counseling?
A. Advice the borrower to prioritize his/her debts
B. Advise the borrower to have a series of talks with the bank for
arriving at some negotiation
C. Advise the borrower to Approach another financial institution to
arrange for another credit so as to liquidate the existing debt
D. Advise the debtor to consolidate his/her debts
73) Both normal and specialized collection function by recovery agents
have to be performed in accordance with:
A. Routine practices of bank
B. Usages and practices of the banking industry
C. Recovery policy and procedure prescribed by bank which confirm to
the laws of the country
D. The provisions of law

74) When you go meet a customer who has not paid his installment for
the first time. You would:
A. Go alone
B. Take the police to the customers house
C. Take your friends long with you
D. Take the bank authorities to the customer’s house

75) Under ‘hypothecation’ charge possession of good is with:

A. Lender
B. Guarantor
C. Borrower
D. None of the above

76) While trying to reach a customer who is not easily reachable over
the phone, you would:
A. Call the customer from different numbers so as to disturb him
B. Call the customer several times in as day so as to disturb him
C. Make no effort to call the customer
D. Call once and leave a message with a family member with details of
your name and contact number

77) Recurring Deposit Account is classified under:

A. Savings account
B. Current account
C. Term deposit account
D. Borrower account

78) You are talking to a customer who has defaulted in paying his loan
for the very first time adue to some genuine reason. While talking-to
the customer you realize that he is very tense and seems very worried
about not paying his dues..In such case you would:
A. Say things to calm him down
B. Say things to make him seek tense
C. Say things to make him feel more insecure
D. Say nothing

79) You had fixed a meeting with the customer to meet him at 4.00 PM
At 3.00 PM he calls you and cancels the appointment. What do you do
in this situation?
A. Agree to cancel the meeting and report the same to the bank
B. Pressurize the customer to meet you at the scheduled time
C. Ignore his request for cancelling the meeting and reach the customer
at the scheduled time
D. Falsely inform the bank that you have met the customer

80) The type of charge to be created by a bank in respect of a vehicle

loan is:
A. Mortgage
B. Hypothecation
C. Pledge

81) Purchase of goods and articles for own use are categorized under:
A. consumption loans
B. overdraft account
C. consumer Durable loan
D. personal loan

82) The difference between credit and debit card is:

A. Customer’s account gets debited immediately on using a credit card
B. Customer’s account gets debited immediately on using a debit card
C. Customer’s account gets credited immediately on using a credit card
D. Both cards are similar and there is no difference

83) The repayment period of crop loan is:

A. Not more than one year
B. Coinciding with the harvest
C. Not more than six months
D. Both A and B

84) The language used by a recovery agent with a borrower should not
be:
A. Simple B. Courteous C. Clear D. Offensive and threatening