In this Question Paper given 50 questions for Legal & Regulatory Aspects 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 . Assets minus original capital = Liability

• True
• 0
• can be accepted
• None of the above

Q - 2 .A company has a networth of Rs.5 lacs. Term liability Rs.10 lacs, Fixed Asset of Rs.16 lacs and Current Asset Rs.25 lacs. There is no intangible asset or ONCA. It's net working capital is

• Rs. 10 lakhs
• Rs. 1 lakh
• Rs. 9 lakh
• Rs. (-) 1 lakh

Q - 3 .Issue of shares at a discount should be authorized by the members by passing a resolution in the general meeting and resolution of members should specify the rate of discount which should not exceed 10% of the face value of the shares Further this is subject to

• Obtention of sanction from Company Law Board
• These shares must be issued with in 2 months
• Both (a) and (b)
• None of the above

Q - 4 .If the forward rate is less than the spot rate the base currency is said to be at

• Discount
• Premium
• At par
• None of the above

Q - 5 .A Customer Service Meet should be organized at every Branch

• Once in a Fortnight
• Once in a Quarter
• Once in a Month
• Once in a Half-Year

Q - 6 .The following is not usually classified as Other Non Current Assets

• Advance given to Directors
• Tender Deposit
• Receivable outstanding beyond 12 months
• Preliminary and Pre operative expenses

Q - 7 .As per the Second method of lending the borrowers contribution from long term source

• is minimum 25% of total current assets
• is restricted to 25% of working capital gap
• is 25% of other current liabilities
• any amount which the unit can bring

Q - 8 .Tangible Networth is computed by

• Total Tangible Asset less outside liabilities
• Capital, free reserves & surplus less Intangible Asset
• Networth less Intangible Asset
• All the above

Q - 9 .If the partnership does not mention any method of maintaining capital account then _______ method of capital has to be used

• Fluctuating capital account
• Partners Current account
• Capital account
• Fixed capital account

Q - 10 .As per SEBI guidelines , any entity /person engaged in the marketing and selling of mutual funds products is required to pass a certification test and obtain a registration number from case of

• SEBI (Securities and Exchange Board of India)
• AMFI(Association of Mutual Funds in India )
• NSE(National Stock Exchange)
• A, B & C

Q - 11 .Investment in Shares of other companies can be classified as Current Asset only when the shares are

• Quoted
• Relate to trade investment
• A & B
• Shares cannot be classified as Current Assets

Q - 12 .Under the ____________ capital method two accounts are maintained for each partner viz current account and capital account

• Fixed Capital Method
• Fluctuating capital method
• Equity capital Method
• Preference share capital

Q - 13 .A method of calculating depreciation of an asset , which assumes that the asset will lose an equal amount of value each year is known as

• Salvage value
• Depreciation
• Straight line Method of calculation
• Accumulated Depreciation

Q - 14 .The form of Balance sheet and Profit and loss account of a Banking Company is prescribed in forms A and B of _______ schedule of the Banking Regulation Act 1949

• Second
• Third
• First
• Fourth

Q - 15 .EEFC can be opened in

• Rupees
• Any one of the four designated currencies
• One of the permitted currencies
• AMUS

Q - 16 .The following is a Term Liability

• Debentures payable within a year from the date of Balance Sheet
• Preference Shares payable within a period of one year from the date of Balance Sheet
• Term Loan instalments payable in a year
• Deposit from public payable in 2 years time

Q - 17 .According to section 79A inserted by Companies Amendment Act 1999 ____ shares means equity shares issued by the company to employees or directors at a discount or for consideration other than cash for providing know how or making available right in the intellectual property rights or value addition, by whatever name called

• Employees stock option
• Equity shares
• Sweat equity
• None of the above

Q - 18 .As per NABARD guidelines the minimum Internal Rate of Return for Agricultural Project is

• 15%
• 25%
• 30%
• 18%

Q - 19 .Assignment of LIC policy is done as per section& & of & & . Act

• 132 of Transfer of Property Act
• 38, Indian Insurance Act 1938
• 138 of Contract Act
• NOA

Q - 20 .A credit facility will be classified as NPA if_____remains past due for one quarter

• Interest
• Instalment
• A or B
• A & B

Q - 21 .Diversion means

• Diversifying to activities not related to main business
• Retrenching employees
• Use of Current Assets for payment of Term Liability
• Use of Current Liabilities for long term use

Q - 22 .This is the amount by which an asset is expected to lose its value. What is this

• Market value
• Wear and tear
• Depreciation
• NAP

Q - 23 .Banking Ombudsman is appointed by

• Central Government / Ministry of Finance
• State Government
• IDBI
• RBI

Q - 24 .A person who owes money to a firm , mostly on account of credit sales of goods is called

• Creditor
• Debtor
• Borrower
• lender

Q - 25 . A simple mortgage need be registered when

• The Loan amount exceed Rs.100/-
• Value of mortgaged property exceeds Rs.100/-
• A or B whichever exceeds Rs.100/-
• Both A & B

Q - 26 .Opening stock of raw material is Rs.30 lacs, closing stock is Rs.50 lacs. Annual purchase is Rs.500 lacs. What is the average period of holding of Raw Materials?

• 2 M
• 1.5 M
• 1 M
• NOA

Q - 27 .Ramesh deposited Rs 10,000/ for 3 years . The Interest is compounded annually at 10% . What will be the amount receivable by Ramesh at the end of 3 year period

• 13310
• 13000
• 12000
• 13300

Q - 28 .A computer Accounting system runs based on a set of instructions called the software programmes developed by a person who is a computer software professional and he is called ________

• Programmer
• Software Engineer
• IT man
• None of the above

Q - 29 .Variable Cost and Sale Price remaining the same, a rise in fixed cost result in

• High BEP ( High Break even point)
• Low BEP
• High Margin of Safety
• B & C

Q - 30 .Creditors Velocity expresses the

• Maximum period for which credit is given
• Average period of credit enjoyed
• Minimum period of credit given
• Minimum period for which credit enjoyed

Q - 31 .Schedule VI of the Companies Act prescribes the form of

• Balance sheet
• Trading Account
• Balance sheet
• None of the above

Q - 32 . A Bridge finance is extended for overcoming

• Delay in getting of the public issue
• Delay in disbursement of term loan
• Delay in disbursement of working capital for completing the documentation
• For A & B

Q - 33 .If a firm borrows money its capital would be reduced

• This statement is false
• This statement is true
• The same is acceptable
• None of the above

Q - 34 .What is the minimum period to be allowed to drawee to decide on acceptance / rejections of a usance bill

• 2 Days
• 48 Hours
• 48 Hrs including public holidays
• 48 hrs excluding public holidays

Q - 35 .When shares are issued at higher than the face value of the shares they are said to be issued at a

• Discount-
• Par-
• Premium
• None of the above

Q - 36 .The value which the bond holder gets on maturity is called

• Maturity value
• NAV
• the redemption value
• IRR

Q - 37 .The Companies Act prohibits issue of any preference share that is _______

• Cumulative
• Redeemable
• both a and b
• Irredeemable

Q - 38 .The capital which is stated in the Memorandum of Association is known as

• Memorandum Capital
• Paid up capital
• Authorised capital
• Issued capital

Q - 39 .Annuities are

• The annual interest payable or receivable in a debt or an investment
• Lumpsum payment made any time during the course of a fixed period of time
• The total amount payable annually in respect of a debt or investment
• Series of payments (many number of cash flows) made at a specified frequency over the course of a fixed period of time

Q - 40 .The formation of a company is governed by the rules and regulations as contained in

• Indian Companies Act
• RBI act
• BR Act
• None of the above

Q - 41 .The charge by way of lien over goods belonging to a company must be registered with Registrar of Companies within a period of

• 30 days of creation of law
• This charge need not be registered as this is not hypothecation, mortgage etc
• 30 days of default in repayment
• A or C whichever is earlier

Q - 42 .What is the formula for charging compound interest with Annual Compounding

• I = Pnr
• P+I
• A = P( 1+r)n
• Any of the 3

Q - 43 .While calculating the value of (1+.10)3 (to the power of 3) the same can be calculated

• Manually
• using calculator
• using MS Excel
• all the above

Q - 44 .If the rate of a currency A is known in terms of currency B and rate of Currency B in terms of Currency C , we can derive the rate of currency A interms of Currency C using the technique of cross currency

• Exchange rate
• Cross rate
• Forward rate
• None of the above

Q - 45 .The Net Working Capital refers to

• Liquid surplus
• Borrowers Contributions from long term source to short term use
• Excess Current Asset over Current Liability
• All the above

Q - 46 .A borrower need not bring any matching contribution from long term sources in respect of

• Export Receivables
• Finished goods produced for a specific export order
• Adhoc limits
• A & B

Q - 47 .A Mortgage cannot be enforced in the absence of

• Delivery of the title deeds
• Legal Opinion
• Narration in Title deeds register
• Pecuniary obligation

Q - 48 .Who cannot file a complaint under Consumer Protection Act?

• Banks
• State Government
• Public Interest Litigation Group
• Persons receiving services free of charge

Q - 49 .The long term use is 120% of long term source. This indicates the unit has

• CR 1.2
• Negative TNW
• Low Capital
• Negative NWC

Q - 50 .If a sum of Rs10,000/accumulates to Rs16,000/after 3 years at simple Interest , what is the rate of Interest.

• 16%
• 25%
• 23%
• 20%

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