In this Question Paper given 50 questions for Principles & Practices of Banking, You have to complete them within 60 minutes. After clicking on FINISH TEST button a result of your test will be displayed.

Please Note;- Negative mark will not be counted

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Q - 1 . A bill is drawn on 16th Feb, 2001 which is payable after 30 days. It will mature on

• 13.3.2001
• 15.3.2001
• 20.3.2001
• None of these.

Q - 2 .Loan for fish rearing is covered under Prirority Sector as ________ advances

• Direct Agriculture
• Indirect Agriculture
• Self Employment Scheme
• Allied to indirect Agriculture

Q - 3 . In one of the joint Savings Bank accounts, you as a Branch Manager received information that one of the depositors had been declared as Insolvent? The depositors other than the undischarged insolvent claim the balance lying in the SB account. Can you pay?

• You can pay to the other deposit holders jointly
• You can pay to the other deposit holders, dividing the balance proportionately
• You can pay as per instruction jointly signed by the solvent depositors and the official receiver of the undischarged
• You can pay to the other deposit holders, dividing the balance proportionately, after taking RO permission

Q - 4 .Sec ___ of RBI Act,1934 gives sole power to RBI to issue currency notes

• 10
• 18
• 22
• 26

Q - 5 . According to Section 130 of Transfer of Property Act the transfer of an actionable claim can be effected only by the execution of an instrument in writing signed by transferor or by his duly authorized agent This mode of transfer of an actionable claim is known as ________

• Assignment
• Lien
• Mortgage
• Hypothecation

Q - 6 .Interest is calculated on actual/365 days basis in respect of the following products, except one :

• Call Money
• Notice Money
• Term Money
• GOI dated securities

Q - 7 . The minimum period for which commercial papers can be issued is

• 12 months
• 1 month
• 3 months
• CP can be issued for maturity from 7 days to 1 year

Q - 8 .Reserve Bank of India s function

• Supervisory & Regulatory
• Promotional & Developmental
• Refinance Activities
• All of the above

Q - 9 .Bank s Assets are classified in to standard assets, substandard assets doubtful assets and loss assets, based on the recommendat

• Rangarajan
• Narasimham
• Ghosh
• Tandon

Q - 10 . In 1921 three Presidency Banks in India - The Bank of Bengal, The Bank of Bombay, and Bank of Madras were amalgamated into one Bank which is now called.

• Reserve Bank of India
• United Bank of India
• State Bank of India.
• UCO bank

Q - 11 .Your bank grants a working capital finance to ABC & Co, a partnership firm, against hypothecation of inventory. The charge is to be registered with Registrar of Companies within

• 30 days from the date of advance
• 30 days from the date of hypothecation agreement
• 30 days from the date of sanction of loan
• all of the above

Q - 12 .In a Garnishee Order, the banker on whom garnishee order served is:

• Judgement Debtor s Creditor
• Judgement Creditor s Creditor
• Judgement Creditor s Debtor
• Judgement Debtor s Debtor

Q - 13 . Combining of two existing Companies into a new Company in which the both the existing companies extinguish and anew Company is made or created is known as

• Consolidation.
• Merger
• Strategic Alliance
• Acquisition

Q - 14 .Except one of the following others are known as Non Fund based facilities:

• Letters of Credit
• Bank Guarantees
• Co-acceptance of Bills
• Trust Receipt

Q - 15 .If number of partners in a firm is 22 in respect of trading activity the firm is

• Limited company
• Large partnership
• Illegal association
• None of these

Q - 16 .The minimum percentage of Priority Sector advances to be maintained by foreign banks in India

• 40%
• 18%
• 32%
• 60%

Q - 17 .Charge created on LIC Policy is:

• Hypothecation
• Pledge
• Assignment
• Mortgage

Q - 18 .RTGS stands for :

• Real Time Settlement System
• Real Time Gross Settlement System
• Real Gross Settlement System
• Real Gross Time Settlement System

Q - 19 .The apex institution which handles refinance for agriculture and rural development is called:

• RBI
• SIDBI
• NABARD
• SEBI

Q - 20 .Mr.Atmaram as director of a Ltd company expired. Bank received a cheque signed by Mr.Atmaram as director of the Ltd company. The bank

• Can honour the cheque only after obtaining confirmation from other directors
• Can honour the cheque
• Cannot hounour the cheque
• The company should issue a stop payment instructions to the bank

Q - 21 .John & James are friends aged 14 & 15 respectively. They want to open a joint account in your bank. You will

• Allow them to open a joint account to be operated jointly
• Allow them to open a joint account with operating instructions Either or Survivor
• Allow them to open a joint account with operating instructions Former or Survivor
• Allow them to open a joint account with operating instructions Any one or Survivor

Q - 22 .Long Form Audit Report (LFAR) is prepared and submitted by

• RBI inspectors
• Internal inspectors
• Statutory auditors
• Concurrent auditors

Q - 23 .In bank s parlance credit risk in lending is

• Default of the banker to maintain CRR
• Default of the banker to maintain SLR
• Default of the banker to release credit to the customer
• Default of the customer to repay the loan

Q - 24 . Registration of a society is required

• To sue in it s own name as a separate legal entity.
• To open a bank account.
• To facilitate receipt of donations/grants from foreign countries.
• None of the above.

Q - 25 .State which of the following statement/s is/are correct? i) KYC norms is applicable only to deposit accounts ii) Either or survivor is applicable to all joint accounts iii) A cash credit facility is a fund based limit

• i and ii
• ii and iii
• iii and iv
• iv

Q - 26 .Once a Bearer is always a bearer is applicable in respect of

• A bill of exchange payable after 90 days
• A cheque
• A demand promissory note
• A certificate of deposit

Q - 27 .Except one of the following others are part of Public Sector Banks:

• State Bank of Hyderabad
• Central Bank of India
• Regional Rural Bank, sponsored by a nationalized bank
• HDFC Bank

Q - 28 .Your banks customer XYZ Ltd, enjoys a CC limit of Rs.1,00,000.00 The CC account shows a credit balance of Rs,10,205.00. The relationship between your bank and XYZ Ltd is:

• Debtor/Creditor
• Creditor/Debtor
• Bailor/Bailee
• Bailee/Bailor

Q - 29 .The right of set-off is:

• Customer s Right
• Customer s Obligation
• Banker s Right
• Banker s Discretion

Q - 30 . IT authorities have seized a deposit receipt from a customer. The deposit has matured. Now the deposit receipt is presented by IT authorities for payment along with over due interest

• Overdue interest can be paid if the deposit is renewed for a further period of 15 days.
• Overdue interest can be paid because the receipt is IT authorities.
• The branch can pay interest after getting permission from R.O.
• None of the above.

Q - 31 .In case of a Non Resident Indian which of the following is permitted?

• A SB account in joint names in Candian dollars
• A Fixed deposit account in Australian dollars
• A NRNR account in Indian rupees
• An EEFC account in Indian rupees

Q - 32 .Which was the first Mutual Fund started in India:

• SBI Mutual Fund
• Kotak Pioneer Mutual Fund
• Indian Bank Mutual Fund
• None of the above

Q - 33 .Law of limitation is not applicable in respect of :

• Advance against pledge of shares
• CC granted against hypothecation of inventory
• Term loan secured by mortgage of Plant & Machinery
• Bank Term Deposit

Q - 34 .A Co-Operative Bank operating in different States are regulated by:

• State Co-Operative Societies Act
• Banking Regulation Act
• Multi Unit Co-Operative Societies Act
• Banking Laws (applicable to Co-Operative Societies)

Q - 35 .Long Form Audit Report (LFAR) is prepared and submitted by

• RBI inspectors
• Internal inspectors
• Statutory auditors
• Concurrent auditors

Q - 36 . A joint account is operated by A and B as both or survivor. A dies and a cheque signed by A and B are presented forpayment. The cheque

• Can be paid.
• Can be paid after getting confirmation from B.
• Can be paid after getting the consent of the legal heirs of A.
• None of the above.

Q - 37 .Tele banking service is based on

• Virtual Banking
• Online Banking
• Voice processing
• Core Banking

Q - 38 .An account holder draws a cheque on a :

• Banker of the Payee
• Banker of the Drawee
• Banker of the Drawer
• Banker of the Endorsee

Q - 39 .A purchaser of a demand draft for Rs.500,000.00, lost the DD To obtain a duplicate draft he needs to furnish

• A Power of Attorney
• A letter
• An Indemnity
• Amandate

Q - 40 .A stop payment instruction of a cheque can be issued by:

• The payee
• The endorsee
• The drawer
• The drawee

Q - 41 . In one of the joint Savings Bank accounts, you as a Branch Manager received information that one of the depositors had been declared as Insolvent? The depositors other than the undischarged insolvent claim the balance lying in the SB account. Can you pay?

• You can pay to the other deposit holders jointly
• You can pay to the other deposit holders, dividing the balance proportionately
• You can pay as per instruction jointly signed by the solvent depositors and the official receiver of the undischarged insolvent
• You can pay to the other deposit holders, dividing the balance proportionately, after taking RO permission

Q - 42 . Nomination rules for deposit accounts have been introduced under the following rules of Banking Regulation Act,21-03-1900 05:00:00 AM

• Sec. 45
• Sec. 45ZA  F
• Sec. 45ZA  B
• None of the above

Q - 43 .FIMMDA s guidelines cover the following products, except one:

• Call Money
• Cross Currency Interest Rate swaps
• Commercial Paper
• Certificate of Deposit

Q - 44 . The combination of two or Companies into a single Company where one survives with it s name (or a combined new name )

• Merger or Amalgamation
• Diversification.
• Combination.
• All the above

Q - 45 .A cheque is dated 12/05/05.the due date is:

• 08/12/2005
• 14/09/2005
• 11/12/2005
• None

Q - 46 .Mandate given by the illiterate account holder should be

• Attested by manager who confirms and certifies thee same.
• Attested by Notary public or Magistrate.
• It is enough if we ask for a Mandate letter with LTI which has to be attested an authorised official.
• We cannot accept a mandate from an illiterate customer at all.

Q - 47 .The time taken to convert cash into raw materials, semi finished goods, finished goods and into cash , is known as

• Trade cycle
• Cash cycle
• Operating cycle
• Revolving cycle

Q - 48 .Securitisation is a process of acquiring the loans classified as

• Bookdebts
• Performing debts
• Bad debts
• Non performing debts

Q - 49 .In a securitisation deal, the role of a Special Purpose Vehicle (SPV) is

• To acquire large Non Performing Loans (NPA)
• To acquire such loans from a bank or financial institution
• To acquire such loans for a transfer price, with or without recourse
• To manage the acquired loans for the purpose of realization or holds them as investment till maturity

Q - 50 .The term Credit Management covers

• Capital adequacy norms
• Risk management including Asset/Liability management
• Credit appraisal  decision and review of loans & advances
• All of the above

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