Model Paper-I [LRAB] 1) ....... is the primary regulator of banking business:2) Banks can refuse to permit opening an a/c of:3) Acceptance of deposits by non-banking financial companies is regulated by RBI under:4) A Non-banking financial company wanting to collect public deposits is governed by act.5) The term 'Customer' is defined under:6) Companies whose principle business is not finance or lending are permitted to accept deposits under Sec. 45(s) of RBI Act only from:7) Every banking company is required to use the word 'Bank' in its name and no company other a banking company can use the words 'bank, banker or banking' as a part of its name as per:8) Under the general provision of loss reserves maximum of......... % of total risk weighted assets qualify for ........... capital:9) Section 10 (A) of the B.R. Act stipulates ......... of Banking: Company:10) What is the maximum tenure for a part time director of a banking company including extension?11) The whole time CMD of the bank shall hold office for a period not exceeding:12) Garnishee order will not attach ......... of CC limit:13) The relation between a banker and a customer in the case of safe deposit lockers is that of a Lessor and a lessee. The right of lien therefore ........ :14) The right of Set-off can be exercised only when the relationship between the banker and the customer is that of:15) A Banker can exercise the right of Set-off only in respect of:16) Right of Set-off cannot be exercised by the Bank in respect of ......... debt:17) In an overdraft account, when the notice of death of the partner is received, the bank should stop the operations to avoid application of ......... :18) Act acts deals with the right of Appropriation:19) Your branch has sanctioned a Demand Loan against FDR. When can the right of Set-off be exercised?20) Any payment made by a debtor in the first instance is to be applied towards satisfaction of ........ :21) ........ is the Garnishee in & Garnishee Order:22) Garnishee Order" is issued under:23) Garnishee Order attaches:24) Bank should stop operations in the judgment debtor's a/c upto amount mentioned and allow the operations for balance amount if a .......... is served:25) The Garnishee order will be applicable only when the banker and customer would be having following relationship:26) SLR can be maintained in..........27) The definition of ........ is given under Section 85-A of the N.I. Act:28) For availing remedy under Section 138,-holder will have to give notice to the drawer:29) How many times a negotiable instrument can be negotiated:30) .......... is not bound on a negotiable instrument as drawer, acceptor or endorser:31) Cheque is a ........ :32) A bill drawn in Paris in favour of a trader in Mumbai and payable in Chennai is:33) Under COPRA, there is a ......... approach to Redressal:34) A person who is, or who has been, or is qualified to be .......... can be its President in District forum:35) The Right to Information Act came to force on .........36) What does "Right to Information" mean?37) A cheque drawn in two languages/ handwriting is presented to the drawee bank. Is the cheque in order........38) ......... also includes bodies constituted by notification issued or orders made by the appropriate Government, body owned, controlled or. substantially financed by Govt, and NGO substantially financed directly or indirectly by the appropriate Government:39) What is the time limit to get the information I rejection from PIO in case no third party information is involved?40) Bailee has the right of ........ in a bailment contract:41) Safe custody is a contract of bailment, here the banker's general lien .........42) Bailment can be Gratuitous or Non-gratuitous bailment. A Nongratuities bailment is one where there is ........ :43) A person who comes by an article is not obliged to pick it up. But if he does so, he becomes a .......... :44) Delivery of bailed goods to the Bailee may be actual or ......... :45) In the case of a pledge, the Pawnee does not have the right ....... the pawned goods:46) In a pledge delivery may be:47) When a key cash credit is extended to a customer, the delivery is:48) When a bank lends against pledge of goods to a Limited Company, the charge on the goods need not be registered as the goods are in......... and the bank has the right to sell in case of default:49) The relationship between agent & the principal can be created by:50) Who can employ an agent?

Answers:1) Reserve Bank of India2) Undesirable persons3) Non-banking Financial Companies Acceptance of Public Deposits (Reserve Bank) Directions, 1998.4) Companies Act 19565) KYC guidelines6) Relatives in the form of loans7) Section 7 of Banking Regulation Act8) 1.25, Tier II9) Qualifications for the direct10) 8 years11) 5 years12) Undrawn portion13) Does not apply14) Debtor and creditor15) Debts due and determined16) Contingent debt17) Clayton's Rule18) indian Contract Act19) On maturity20) lnterestdue21) Bank22) Rule 46 of Order XXI of the Schedule to the code of Civil procedure 1908.23) Credit balances available at the time of serving the order to bank.24) Order Nisi25) Debtor-creditor26) Cash, Gold and Approved securities27) Demand draft28) Within 30 days of return of cheque.29) No limit within validity30) A lunatic, an alien enemy, an insolvent and a Minor31) Bill of Exchange32) A foreign bill33) Three tier34) A District Judge35) 12th October, 2005 (120th day of its enactment).36) Right to inspect works, documents, records to take notes, extracts or certified copies of documents or record and to take certified samples of material.37) It can be paid, if otherwise in order38) Public Authorities39) Within 30 days of the receipt of the request.40) Lien41) Doesxjot apply42) Consideration43) Bailee44) Constructive45) Use the pawned g46) Actual or Constructive47) Actual48) Actual possession49) Express agreement or Implied Contract50) A person who is a major and is of sound mind

Model Paper-I [AFB] 01) If depreciation is not charged, Profit & loss a/c willshow:a) More profitsb) Less profitsc) Nominal profitsd) Original profits

02) A public company having a share capital:a) Must issue a prospectusb) Cannot file a statement in lieu of prospectusc) May file a statement in lieu of prospectusd) Doesn't need prospectus

03) Share premium is used for:a) To issue fully paid bonus sharesb)To write off preliminary expensesc)To issue shares at discountd)Both a & b

04) In which method amount of depreciation decreasesevery year:a) Straight line methodb) Written down value method ,c) Annuity methodd) Sinking fund method

05) Shares can be issued at discount within..........monthof sanction of Company Law Board:a) 1 b) 2 c) 4 d) 5

06) Discount on issue of share is a a/c:a) Realb) Nominalc) Personald) Loss

07) If Dissolution expenses are paid by any partner, thenthey are transferred to:a) His capital a/cb) Cash a/cc) Bank a/cd) None of these

08) Trading account is a:a) Personal a/cb) Real a/cc) Nominal a/cd) None

09) At the time of death of a partner, his total share isgiven to:a) His loan a/cb) His executor a/cc) His capital a/cd) His current a/c

10) Liabilities in a company are of Rs. 80,000 andowner's equity is Rs. 70,000. What is the amount of totalequity?a) Rs. 80,000c) Rs. 10,000b) Rs. 70,000d) Rs. 1,50,000

Answers:1-a, 2-c, 3-d, 4-b, 5-b, 6-b, 7-a, 8-c, 9-b, 10-d

11) Goodwill on two years purchase of the average profitof last three years profits of 20,000,10,000,15,000 is:a) Rs 50,000b) Rs. 30,000c) Rs. 45,000d) Rs. 40,000

12) The minimum subscription is to be received in:a) 45 daysb) 120 daysc) 130 daysd) 50 days

13) R, N, S share profits in 5:3:2. If N retire then new ratioof R and S is 2:3. Gaining ratio is ......... :a) 1:1b) 1:4c) 0:4d) 4:0

14) Bills receivable endorsed are debited to:a) B/R a/cb) Debtors a/cc) Creditors a/cd) Drawer a/c

15) Sacrificing ratio is calculated at the time of:a) Admissionb) Retirementc) Deathd) None

16) On the admission of a partner, decrease in the valueof machinery is debited to:a) Revaluation a/cb) Machinery a/cc) Old partner's capital a/cd) Depreciation a/c

17) A firm earning losses and is in dissolution process,have:a) Nominal goodwillb) Full value of goodwillc) Goodwill equal to share of partnersd) No goodwill

18) When all partner's are insolvent, the loss is thenborne by:a) Governmentb) Creditorsc) Partnersd) Firm collectively

19) Short term loans are due for payment within:a) 6 monthb) 1 yearc) 2 yeard) 30 days

20) Dividends are usually paid on:a) Called-up-capitalb) Subscribed-capitalc) Paid-up-capital.d) Issued capital

Answers:11-b, 12-b, 13-c, 14-c, 15-a, 16-a, 17-d, 18-b, 19-b, 20-c

21) Profit on re-issue of forfeited shares is transferred to:a) Profit and loss a/cb) Capital Reserve a/cc) Share capital a/cd) General reserve a/c

22) Book of accounts of a bank includes:a) Current a/c ledgerb) Investment ledgerc) Loan ledgerd) Bill discounted ledgere) All of above

23) The purpose of depreciation is to:a) Reduce fixed assetsb) Save income taxc) Reduce fixed assets to nild) Allocate the cost

24) Accounts in banks are closed on ......... every year.a) 31 Dec. b) 31 Mar. c) 30 June d) 31 July

25) Partnership is a form of business organisation inwhich business debts can be recovered from:a) The partnersb) All the managersc) The firmd) The firm and all the partners

26) Which of following is contingent liability?a) Claim against company not acknowledged as debtb)Unpaid liability of sharesc)Arrear of fixed cumulative dividendd)Contracts remaining to be executede)All above

27) Purchase a/c always have a:a) Debit balanceb) Credit balancec) Either debit or credit balanced) None

28) Error of principle are committed due to:a) Incomplete knowledge of capital & revenue expenditureb) Incomplete recording of amountc) Incorrect balancing of ledger a/c'sd) Wrong posting in ledger

29) Insurance unexpired is a:a) Personal a/cb) Real a/cc) Nominal a/cd) Both a & b

30) Depletion is used in relation to:a)Plant and Machineryb) Good-willc)Stock in traded) Mines

Answers:21-b, 22-e, 23-d, 24-a, 25-d, 26-e, 27-a, 28-a, 29-a, 30-d31) Opening Stock includes:a) Stock of raw materialb) Work in progress stockc) Finished goodsd) All above

32) A and B are partners in the ratio of 7:3. C is admittedfor 2/7th share of profits. What is the new ratio?a) 7:2:2 b) 7:3:2 c) 7.4.5 d) 7 3,4

33) Direct expenses form a part of .........a) Selling & distribution expensesb) Goods manufacturedc) Administrative expenses on salesd) Goods purchased and manufactured

34) M and N are partners in the ratio of 3:2. Q is admittedand the new ratio is 4:3:2. What is the sacrificing ratio?a) 3:2 b) 4:3 c) 7:3 d) 4:5

35) Gross profit is calculated as:a) Net sales - Lossb) Sale x Rate of G.P/100c) Net Profit - Expensesd) Both a & b

36) Purchase of machinery for cash, results in:a) Decrease in total assetsb) Increase in total assetsc) No change in total assetsd) Increase in liability

37) Rate of depreciation in reducing balance method is:a) High , b) Moderate c) Low ' d) 5%

38) If an asset is sold on 30 June while the accounts areclosed on 31 Dec., then depreciation is calculated for:a) 1 yearb) 6 monthc) 1 monthd) 5 month

39) The accounting year of banks ends on:a) 31st Marchb) 30th Junec) 31st Decemberd) 31st July

40) Discount received in advance is a:a) Real a/cb) Personal a/cc) Nominal a/cd) None

Answers:31-d, 32-d, 33-d, 34-c, 35-d, 36-c, 37-a, 38-b, 39-c, 40-b41) Dual concept records transaction on bases of:a) Single entry systemb) Double a/c systemc) Double entry systemd) All of these

42) Which of the following is an accounting equation?a) Assets = Liabilitiesb) Assets = Equity - Liabilityc) Assets = Capital + Liabilitiesd) Liability = Asset + Capital

43) In Dissolution payment is made:a) To the outsidersb) Capital of partnerc) Partner's loand) Any balance

44) If partner has debit balance of capital a/c, then:a) Debit side of capital a/cb) Credit side of capital a/cc) Credit side of current a/cd) Debit side of current a/c

45) Salary payable is a:a) Liability b) Expense c) Asset d) Revenue

46) Solvency means:a) Financial soundness of businessb) Financial unsoundness of businessc) Capital position of businessd) None of these

47) Creditors are included in:a) Fixed liabilityb) Current assetc) Current Viabilityd) Loan capital

48) Net profits are considered as:a) Remuneration of enterpriseb) Salary to Managerc) Remuneration to partner onlyd) Gross income

49) Goods given as charity of Rs 500 are:a) Credited to charity a/cb) Debited to purchase a/cc) Debited to charity a/cd) Credited to purchase a/ce) Both c and d.

50) Expenses proprietor equity:a) Increaseb) No effectc) Changesd) Decrease

Answers:41-c, 42-c, 43-a, 44-a, 45-a, 46-a, 47-c, 48-a, 49-c, 50-d

51) Decrease in asset is credited but decrease in capitala) Creditedb) Debitedc) Either a or bd) None

52) Goods are returned:a) Due to defectb) Due to delay in dispatchc) Due to violation of itemd) Any of these

53) Journal proper records:a) All transactionb) Credit transactionsc) Transaction not recorded in subsidiary booksd) Cash transactions in any subsidiary book

54) If furniture is purchased on credit then it be shownin:a) Debit side of cash bookb) Not shown in cash bookc) Credit side of cash bookd) Either a) or b)

55) Excess of credit side over debit side is called:a) Credit balanceb) Debit balancec) Over draft onlyd) Either b or e

56) All liabilities has ........ 2. opening balance:a) Debitb) Creditc) Noned) Only a

57) Withdrawal from bank can be made through:a) Pay-in-slipb) Deposit slipc) Chequed) Cash

58) When a cheque is deposited in bank, bank willour a/c:a) Creditb) Debitc) Addd) Subtract

59) Underwriting commission on share issued bybanking company can't exceed:a) 2V2 of paid up capitalb) 2% of paid up capitalc) 3% of paid up capitald) 2 1/2 of called up capital

60 ) ........ is the whole time servant of bank.a) Director b) Chairman c) Manager d) Member

Answers:51-b, 52-d, 53-c, 54-b, 55-a, 56-b, 57-c, 58-a, 59-a, 60-b

61) Debit the debtor and credit the creditor' rule apply to:a) Real A/c b) Personal a/c c) Nominal a/c d) None

62) In double entry system, credit means:a) Decrease in lossb) Increase in assetc) Decrease in capitald) Increase in expenses

63) Narration starts with word:a) To b) By c) Being d) With

64) Cash discount is allowed at time of:a) Payment b) Purchase c) Sale d) None

65) Which of following is contra entry?a) Cash withdrawn from officeb) Cash deposited in bankc) Cheque withdrawn for domestic used) Goods withdrawn

66) Bank column of cash book has ......... balance:a) Debitb) Creditc) Either a or bd) None

67) Trade discount is shown in:a) Cash bookb) Subsidiary booksc) Journald) Ledger

68) Which of following is special journal?a) Purchase bookb) Creditor a/cc) Debtor a/cd) Capital a/c

69) Sales book do not contain:a) Credit salesb) Credit sales of goodsc) Cash salesd) Trade discount

70) Subsidiary book contain:a) Interest on capitalb) Credit itemsc) Sale of assetd) Loss of goods

Answers:61-b, 62-a, 63-c, 64-a, 65-b, 66-c, 67-b, 68-a, 69-c, 70-b71) If a partner draw amount of Rs 1,000 p.m in beginningof every month, what will be the interest on drawing @15%:a) Rs 800b) Rs 900c) Rs 975d) Rs 825

72) Partner capital a/c do not contain:a) Interest on capitalb) Balance of capitalc) Salary paidd) Increase in asset

73) Q, R wants to admit C in firm but M does not agree:a) C will not be admittedb) C will be admittedc) M will be retiredd) M will be agreed & C will be admitted

74) At least ........ persons are needed to form apartnership:a) 4 b) 3 c) 2 d) 1

75) In Govt. Company, govt, has paid-up capital of:a) 51% b) 49% c) 50% d) 25%

76) Registered companies do not include:a) Unlimited pubic companiesb) Unlimited private companiesc) Limited private companiesd) Company Limited by guarantee

77) The minimum subscription is required to be receivedin ........ period:a) 5 daysb) 10 daysc) 1 monthd) 120 days

78) A applied for 200 shares but was allotted only 60shares. If application money is Rs 2, then shareapplication will be debited with:a) 120 b) 400 c) 280 d) 450

79) If Article of Association is not given then ........ willapply:a) Table B of companies Actb) Table C of companies Actc) Table A of companies Actd) Table D of companies act

80) A machine was purchased for Rs 1,16,000 paymentsmade Rs 10,000 by cheque and remaining by issue ofshares of Rs 10 each @ 10.50 each. Number of shareallotted will be:

a) 11000 b) 9000 c) 10000 d) 8000

Answers:71-b, 72-d, 73-a, 74-c, 75-a, 76-d, 77-d, 78-b, 79-c, 80-c81) Debentures can be redeemed by:a) Purchase in open marketb) Drawing a lotc) Redemption in lumpsumd) All above

82) 7000 shares of Rs 100 were issued at discount of10% and redeemed at premium of 5%. Loss at time ofissue is equal to:a) 1,05,000b) 70,000c) 45,000d) 7,00,000

83) Goodwill is raised at the time of:a) Dissolutionb) Admissionc) Deathd) Both b & c

84) Claim 'of a retiring partner can be paid:a) In fullb) In installmentc) Half yearlyd) Both a & b

85) Purchase A/c shows only:a) All purchases of goods & Assetsb) Only cash of goods & Assetsc) All cash and credit purchase of trading goodsd) Only credit of goods

86) Posting is made at ...... side of any a/c appearing atdebit side of cash book:a) Debitb) Creditc) Either a or bd)none

87) Personal a/c may have ....... balance:a) Debitb) Creditc) Either a or bd) None

88) Interest collected by bank is in our passbook:a) Creditedb) Debitedc) Subtractedd) Not shown

89) Bank reconciliation statement is prepared by:a) Bankb) Customerc) Creditord) Firm

90) The debit balance of passbook is:a) Plus balanceb) Minus balancec) Either a or bd) none

Answers:81-d, 82-b, 83-d, 84-d, 85-c, 86-b, 87-c, 88-a, 89-b, 90-b

91) Trial balance shows:a) Arithmetic accuracy of booksb) Only ledger balancesc) Necessary adjustmentsd) Only cash transactions

92) Sale of goods to Mohan for Rs 500 is passed inbooks only with Rs 50. It is:a) Compensating errorb) Omission errorc) Principal errord) None

93 ) ........ has credit balance:a) Drawing a/cb) Sales A/cc) Debtor A/cd) Purchase A/c

94) Preparation of Trial balance is :a) Compulsoryb) Importantc) Optionald) Situational

95) Rent paid Rs.900 was credited to rent a/c will berectified by:a) Debiting Rent A/c with 1800b) Crediting suspense a/c with 900c) Debiting Rent a/c with 900d) Debiting rent a/c with 1000

96) Excess debit in Suspense a/c is written as:a) To balance b/db) To balance c/dc) By balance b/dd) By balance c/d

97) A partner can:a) Borrow moneyb) Endorse bills of exchangec) Sell goods on creditd) Only a or be) Either (a) or (b) or (c)

98) Partnership deed do not contain term:a) Name of partnerb) Rights, duties of partnerc) Appointment of arbitratord) Audit of A/c

99 ) ......... a/c can show negative balance:a) Fixed capital a/cb) Fluctuating capital a/cc) Cash a/cd) Balance sheet

100) Profits are shown in ........ side of balance sheet:a) Asset sideb) Capital a/c

c) Liabilities sided) Loan capital

Answers:91-a, 92-a, 93-b, 94-c, 95-a, 96-c, 97-e, 98-d, 99-b, 100-c

Principles and Practices of Banking[PPB]1)Regional Rural Banks have been set up with the basicobjectives of:2)A Bank, which is not included in the Second Schedule of RBIAct 1934, is called ........ :3)Banking Companies get licenses under........ :4)CRR funds are kept by the Banks in.......:5)An increase in CRR by RBI leads to ....... :6)The scheme "National Equity Fund" is meant for ....... :7) ........is entrusted with the task of developing internationaltrade in India:8)Issue Department of RBI maintains assets for issue of currencyin the form of:9)RBI monitors and controls the Scheduled Banks through:10)The Banking Regulation Act does not apply to:11)Scheduled Banks are required to transfer a minimum of ........% of their profits to Statutory Reserve Fund:12)Banks are required to preserve their records (includinginstruments) under which provisions of Banking RegulationAct?13) .......committee, launched the process of reforms offinancial system in India :14)The term primary and secondary market is used in the contextof ....... :15)The main business of Banks is to accept deposits from thepublic. However a Bank can refuse to permit opening anaccount for:16)Companies whose principle business is not finance or lendingare permitted to accept deposits under Section 45(s) of RBI Actonly from:17)RBI is a Banker to GOI. It is obligatory on its part to undertakeBanking business on behalf of the government. This isprovided under Section....... :18)Every Banking company requires the permission of RBI underSection 22 of Banking Regulation Act. This is issued by way of a .......19)Banks are not required to take the permission of RBI if thechange in the location of an existing place of business is withinthe:20)Banking companies are permitted to issue only the ......shares:21)The whole time chairman of a Banking company may continuethe office at the end of the term of the office until his successorassumes office subject to the approval of:22)If the office of the Chairman falls vacant and RBI feels that nonappointmentmay adversely affect the interest of the BankingCompany, the Reserve Bank may appoint a suitable person andsuch appointments will be for a maximum period of:23)Commercial risk can rise out of:24)Banks extend loans at their Prime lending rate to customerswho:25)The On-site inspection of RBI is focused on the CAMELS model. Capital adequacy, Asset quality, Management, Earningsappraisal are some of the components of this CAMELS model.The other components are:Answers:

1) Providing credit deposit and other Banking facilities to people inrural areas2) Non Scheduled Bank3) Section 22 of Banking Regulations Act4) Balance in a Special Account with RBI5) Decrease in lendable resources6) Small Scale Industry7) EXIM Bank8) Gold at least value Rs. 115 crore and Gold and foreign exchangereserve value Rs. 200 crore9) Off site monitoring, On site inspections and Licensingrequirements10) A primary agricultural credit society11) 25% of the profits before dividend12) Section 45Y13) Narsimham Committee14) Capital Market15) Undesirable persons16) Relatives in the form of loans17) 20 of the RBI Act18) Licence19) Same Town/Village20) Equity shares21) Reserve Bank of India22) 3 years

23) Lack of growth in demand and excess supply of the product ofthe borrower in question24) Who are perceived as minimal/zero risk customers25) Liquidity & Systems control26)RBI has issued detailed instructions under KYC rules. KYCrules are made for knowing the customer properly in order to:27) The legal provisions for winding up of Banking companies arelaid down in:28) An order of moratorium is issued by:29) The court can appoint RBI or SBI as the liquidator for windingup of aBanking company as per Section ......... of B.R.Act1949:30)Retail Banking sector is characterized by:31) ......means offering all type of financial products like retailand wholesale (corporate) banking, insurance, mutual funds,capital market related products etc all at one place.32)Where are American Depository receipts traded?33)Is it possible to have an IDR for an Indian Company?34)What is meant by the term Merchant Banking?35)SENSEX comprising of 30 stocks is maintained by ....... :36)For which of the following purposes an Asset ManagementCompany is promoted?37)Market capitalization can be worked as product of which of thefollowing?38)What is meant by the term Coupons?39)What is the role of a merchant Banker?40)What is a Factoring service?41)When a customer purchases goods against issued credit card,the role of card issuing company is ...... :42)What are the benefits to the Bank under Securitization?43)What period of notice is required for taking over the assets byhe Bank under SARFAESI Act?44)What is Bancassurance?45)The funds wherein investments can be made around the yearare known as ....... :46)How does Tele Banking functions?47) .......is known as the third pillar of Basel-ll accord:48)The key element of Pillar 3 in Basel II accord is:49)Basel II has introduced capital change on the following type ofrisk for the first time:50) Under Basel II, Pillar 3, Banks are required to give additionalinformation / disclosures to public once in for the givenparameters:

Answers:26) Discourage money laundering and to avoid frauds due toimpersonations27) Banking Regulation Act 194928) High Court under whose jurisdiction the Bank is situated29) Section 3930) Multiple Products, Multiple channels and Multiple customergroups31) Universal Banking32) In USA only33) No, IDRs can be issued only for Foreign Registered Companies34) Services provided to capital market and finance to corporatesector35) Bombay Stock Exchange36) To manage the funds of a mutual funds37) Out standing shares x current market price of shares38) Token for payments of interest attached to a bearer security39) They work as an intermediary to an issue in primary market.40) Outright purchase of receivables41) That of a guarantor42) The Banks pass their risk on to the buyer of assets and lockedfunds come in circulation43) 60 days44) Sale of insurance products through Banking channels45) Open ended funds46) Bank's computers respond to customers telephonic enquiries47) Market discipline48) Disclosure49) Operational Risk50) 6 months

Model Paper-I [PPB-Functions Of Banks]

1) The term 'Customer' is defined under:2) The relationship between Banker and Customer in relation tostanding instruction is:3) Your branch gets authentic information that Mr. Balan who ismaintaining a satisfactory Current account in the name of hisProprietorship firm has been imprisoned. How will you handlethe account and the cheques drawn on the account before andduring the period of imprisonment?4) Bankers duty of Secrecy is defined under ....... Act:5) The Banker-Customer relationship when the bank acceptsarticles for keeping in safe custody from customers is :6) The customer has submitted his Insurance Policy as a securityfor a loan from the Bank. The Banker-Customer relationship inthe context of Insurance Policy is:7) Ramesh Shivalkar has deposited a FD receipt as security forguarantee issued by the Bank. The validity of guarantee hassince expired. However, his Current a/c with the branch isoverdrawn. Can the Bank exercise right of Lien on it?8) The Right of Lien is applicable only in the case of ....... and ........which come in to the Banker's possession in thenormal course of business.9)A Banker can exercise the right of Set-off only in respect of:10)In an overdraft account, when the notice of death of the partneris received, the Bank should:11)Can you exercise right of Set-off in respect of time barreddebts?12)Who is Garnishee under a Garnishee Order?13)The Bank receives Garnishee Order. What is the relationshipbetween Banker and Customer?14)A and B have a joint account. Income Tax Department haveserved an Attachment order for B. How will you handle theorder?15)Garnishee order is issued under .........16)Which orders are first issued before issuing the absoluteGarnishee order?17)Your branch receives a Garnishee order for Mr. Amit and Mr.Manish. There is no account in the joint names of Amit andManish. However, they maintain their individual accounts. Howwill you handle the order?18) Jitinder deposited a cheque for collection and Bank had givencredit against this cheque. Before the amount was withdrawn,Bank receives a garnishee order on the a/c. How should theBank act?19)Reliance Bank has received an order under Sales Tax Act in thename of Kavita Kumari who has a fixed deposit account, whichhas already matured. Should the Bank ask for FDR whilemaking the payment under the order?20)In the case of either or survivor mandate can be accepted :21)Under which act, Banker also includes the Post Office -Savings Bank schemes.22)Under Section 25 of N.I. Act, public holidays are declared by ........:23)When a Bill is dishonored, the provision regarding noting isdescribed under Section .......ofN.I. Act:24)As per the Negotiable Instrument Act, the notice period by theholder to the drawer U/s 138 is ......... days:25)Under which section of N.I. Act, meaning of NegotiableInstruments is given ?1Pages-1,2,

Answers:1) KYC guidelines2) Agent-Principal3) Cheques drawn on the account, both before and during theperiod of imprisonment Will be honored if otherwise in order.4) Banking Companies (Acquisition and Transfer of UndertakingAct), 19705) Bailey and Bailor6) Assignee and Assignor.7) As the FDR has come into Banker's possession in the ordinarycourse of business, general lien can be exercised and the Bank canappropriate FDR proceeds and adjust the OD.8) Goods and Securities9) Debts due and determined10) Stop the operations to avoid application of Clayton's case.11) Yes12) Bank on whom order is issued.13) Debtor - Creditor14) Can attach 50% of the balance in joint a/c.15) Rule 46 of Order XXI ofCPC16) Order Nisi17) The garnishee order will attach the individual accounts of Mr.Amit and Mr. Manish, as they are jointly and severally liable for thejoint debt.18) The order does not apply to amount of the cheque as funds areyet to be received.19) The Bank cannot insist for production of FDR.20) Only if both the account holder authorized it.21) NI Act-Sec-0322) Central Govt, by notification in the official gazette23) Sec 99 of Nl Act24) 15 days25) Sec 13 of NIAct26)Under which act, Currency Notes issued by Reserve Bank ofIndia are not considered as Negotiable Instruments:27)You come across a Cheque on which neither the words 'bearer'nor 'order' are written. You will make the payment of thischeque by treating it as:28)A Certificate of Deposit is what type of instrument?29)A promissory note is payable on demand which has beenwritten on lOth Jan 2005, presented for payment on 15th Jan2005. From which day, the due date will be calculated?30)A bill drawn in Paris in favor of a trader in Mumbai and payablein Chennai is called:31)What will be the starting point of limitation on a bill ofexchange payable at a fixed time after date:32)Certificate after Noting of dishonor issued by Notary Public isknown as ........ :33)Balwant has drawn a bill of exchange on Chiman and endorsedthe same to Mahesh, who endorsed the same in favor ofManish. The bill has been dishonored. From whom Manish canrecover the amount?34)What is the maximum period for which a Usance bill ofexchange can be drawn?35)Your branch has received a bill payable on demand. Fromwhich date, you will calculate the limitation period?36)In which type of bills, Noting and Protest is essential in case ofdishonor?37) Your branch has received a bill for presentation, which was sent for acceptance. For one week, the drawee did not acceptthe bill. What will be the position of the bill ?38) Not-Negotiable crossing is a caution to:39) Not- Negotiable crossing means:40) A cheque having "Account Payee" crossing has beenpresented by the Bank on the counter of drawee Bank for cashpayment. How should the drawee Bank handle the cheque?41)Mr. Suresh receives a cheque as a gift in his wedding. Hebecomes holder or holder in due coursse:42)A cheque payable to Rohit is endorsed as "Pay to Kapil on hismarriage". Which type of endorsement is this?43)A order cheque is transferable only by:44)M endorsed a cheque in a favor of D with the condition that payto D, after death of R, but D received the payment withoutfulfilling the condition. In this case from whom can M recoverthe amount:45) A cheque is payable to A or order. A endorses it in favor of B. Bloses the cheque. C finds it and after forging the endorsementof B delivers it to D. D for valuable consideration furtherendorses it to E. The cheque is dishonored. What are the rightsof E on the cheques?46) In which case the paying Bank can get protection u/s 85 (I) ofNl Act:47) Mr. Strong approaches the branch for encashment of a bearercheque issued in his favor by one of your account holder. Thecashier before making the payment insist on signatures of thepayee i.e., Mr Strong, as receipt for having received theamount. Mr. Strong refuses to sign on the reverse of thecheque. How will you handle Mr. Strong?48) Mr. Menon has a saving Bank account and also a Currentaccount. A cheque for Rs. 6,500/- drawn on the Current accountis received. However the account is showing a credit balanceof only Rs. 5000. The counter clerk informs that Mr. Menon ismaintaining a saving Bank account and it is showing a creditbalance of Rs. 10,000. Can the Bank appropriate and pay thecheque received in Current account?49) A Cheque, after payment, becomes the property of .......... :50) Why do Banks accept cheques for collection from itscustomers?2Pages-1,2,

Answers:26) Sec 04 of Nl Act-188127) An order cheque28) Usance promissory note29) DP note is payable on demand.30) A foreign bill31) When the bill becomes due for payment32) Protest33) Balwant, Mahesh & Chiman34) No limit35) Date of the bill36) Foreign bill37) It will be considered as dishonored due to non-acceptance38) Endorsee39) Holder in due course will not get the better title.40) Make payment of the cheque as it is payable to a bank.41) Holder only42) Conditional endorsement43) Endorsement and delivery44) From D only45) E can recover money only from D.46) For forged endorsement47) The payee may be given the option of signing a duly stamped (as per Stamp Act) money receipt on a plain paper.48) The Bank cannot appropriate and the cheque will be returned.49) Drawer50) It is Bank's ancillary function as per of Sec 6 of BankingRegulation Act

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