INDIAN INSTITUTE OF

BANKING & FINANCE

JAIIB
LEGAL & REGULATORY
ASPECTS OF BANKING
A & B

01..Day to day banking involves a number
of aspects. Utilizing the various provisions
of various Acts assumes greater
significance in the Banking field.
Knowledge about them very important
and essential.
02..To function as a Bank and to obtain a
license from the Reserve Bank of India.
Such license is issued as per the
provisions of Reserve Bank of India Act.
a.. True
b.. Banking Regulation Act
c.. Constitution
d.. False
03..Under the provisions of the Banking
Regulation Act, no organization other than
a bank is authorized to accept deposits
with drawable by cheque. The Savings
Bank Scheme run by the government, a
Primary credit society and any other
person or firm notified by the government
are exempted from this prohibition.

04..Identify the one which is not permitted
business of banks.
a.. Opening of a Letter of Credit
b.. Issuing Solvency Certificate
c.. Selling of coins
d.. Handling Executor Trustee issues
05.. What is the common aspect in respect
of United Bank of India, State Bank of
Mysore and Syndicate Bank.
a.. All are not Commercial Banks
b.. All are accepting deposits and not
lending loans
c.. All are Public Sector Banks
d.. All of the above
06.. CEE is an urban co-operative bank. DG
customer of that bank wish to nominate for
his locker facility.
a.. Possible
b.. Not possible
c.. Nomination facility is only applicable for
Public sector banks
d.. Bank to suggest to DG to have joint
facility instead of nomination
07..Which one is not applicable to Banking
Regulation Act.
a. Regulation business of banking companies
b. Control over management of banking
companies
c. Acceptance of deposits by non banking
financial institutions
d. Suspension and winding up of banking
business
08.. Ways and Means Advances are
provided by
a.. Nationalized Banks
b.. Local Area Banks
c.. Regional Rural Banks
d.. Reserve Bank of India
09..Identify the power not pertaining to
Reserve Bank of India
a.. Power to license
b.. Power regarding audit of banks
c.. Power to impose penalties
d.. None of these

10.. The Reserve Bank of India is the
primary regulator of banks. But the Central
Government has also been conferred
extensive powers under the RBI Act and
BR Act either directly or indirectly over the
banks.
11..Reserve Bank of India can issue
Rs.10000 and Rs.5000 denomination
currency notes as per the provisions of
a.. Reserve Bank of India Act
b.. Banking Regulation Act
c.. Both a & b
d.. Constitution
12.. In respect of the terms and conditions of
service of its workmen, opening and
closing of its branch premises, a bank is
answerable to
a.. Its Corporate Office
b.. Reserve Bank of India
c.. Labor Authorities
d.. Its Head Office
13..RRK a Co-operative Bank has secured
permission to have branches in other
states as well.
a.. Multi purpose Co-operative Bank
b.. Multi State Co-operative Bank
c.. Multi Dimensional Co-operative Bank
d.. Multi Co-operative Bank
14..State Bank of Hyderabad was constituted
a.. As Hyderabad State Bank under the
Hyderabad State Bank of Act.
b.. State Bank of Hyderabad under the provisions
of State Bank of India Act,1955
c.. Later renamed as State Bank of Hyderabad
under the State Bank of Hyderabad Act,1956.
d.. Excepting b other two are appropriate.

15.. Identify the odd one
a.. State Bank of Indore
b.. Axis Bank
c.. Reserve Bank of India
d.. Postal Bank
16..Accepting deposit receipt of another
bank under safe custody article is not one
of the functions of a commercial bank.
Still some banks offer this from the angle
of customer service.
a.. Appropriate
b.. Not appropriate
c.. In fact it is the Secondary business
d.. In fact it is the Primary business
17.. Identify which one is not the liability of a
commercial bank
a.. Flexi Recurring Deposit
b.. Computer loan presently under NPA
c.. Both a & b
d.. None of these
18.. These are banking companies operating
only in a limited geographical area.
a.. State Co-operative Bank
b.. District Co-operative Bank
c.. Foreign Bank
d.. None

19..CBD and company approached RBI for a
license to start a commercial bank. After
examining, RBI has rejected the companys
application. Then CBD company
a.. Is not eligible to start a banking business
b.. Can carry on with the banking business after a
period of three months
c.. Is not ineligible to start a banking business
d. None of these
20.. A banking company, whose license is
cancelled can appeal to Banking Ombudsman
within a period of 30 days from the date of the
order rejecting the license.
a.. True
b.. Not Banking Ombudsman, but RBI Governor
c.. False
d.. Neither Banking Ombudsman nor RBI
Governor but RBI Main Office

21.. Banks should submit their request for
new branches, administrative offices,
ATMs for consideration of RBI
a.. As and when needed
b.. Once in a year
c.. Once in every six months
d.. Once in a quarter
22.. Who cannot approach directly RBI for
branch licensing
a.. Regional Rural Banks
b.. Urban Co-operative Banks
c.. Nationalized Banks
d.. Private Sector Banks
23..A Foreign Bank which has a branch in Calcutta
has to
a.. Deposit and keep deposited with RBI a sum of
Rs.20 lacs
b.. Deposit an amount of 20% of the profit each
year as disclosed in the profit and loss account
with RBI
c.. Both a & b
d.. Deposit a token amount as stipulated by RBI
from time to time

24.. The Central Government can exempt
any foreign bank from the requirements on
the recommendations of RBI for a specific
period if the amounts deposited already by
it are considered adequate. On the
cessation of business by any foreign bank
for any reason, these deposits shall from
part of the assets of the company on
which the creditors in India shall have the
first charge.
25..A commercial bank (existing) has a
place of business in both Kolkata &
Mumbai minimum paid up capital and
reserves
a.. Rs. 5 lacs
b.. Rs.10 lacs
c.. Rs.15 lacs
d.. Rs.100 lacs


26..Identify the Act which stipulates that the
subscribed capital of a banking company
shall not be less than half of its authorized
capital and the paid up capital shall not be
less than half of its subscribed capital.
a.. Companies Act
b.. Reserve Bank of India Act
c.. Banking Regulation Act
d.. All these Acts
27..A bank when it receives more than the
specified % of their shares for transfer to
one party, the banks board has to refer
the matter to RBI. The Bank shall not
transfer the shares
a.. Without intimating RBI
b.. Without receiving RBIs acknowledgment
c.. Without intimating Finance Ministry
d.. Without intimating Company Law Board
28..Banks can raise their capital even in the
form of
a.. Innovative debt instruments
b.. Perpetual instruments
c.. Perpetual non cumulative preference
shares
d.. Any one of the above

29..Declaration of dividend by banks require
a minimum 9% of CAR and Net NPAs not
exceeding 7%. The quantum of dividend
that can be declared is based on the levels
of net NPAs and in a graded level
(Maximum 40%pay out ratio) and can be
paid only from current years profits
30..In the absence of a chairman, the
management of the whole of the affairs of the
banking company shall be entrusted to
a.. A Managing Director
b.. A committee of Top Management
representatives
c.. An Executive Director
d.. Senior Most Executive Director if more than
one ED or / in his absence next in the hierarchy
31.. On the Reserve Bank of India passing a
removal order, the concerned person ceases to
hold office which he/she was holding till then.
Further he/she is prohibited, from directly or
indirectly taking part in the management of any
banking company for a period not exceeding 5
years as may be specified in the order.
Contraventions of the order is punishable with a
find of Rs.250 for each day during which the
contravention continues.
32..When the board of a banking company
is ordered to be reconstituted as per the
provisions of the Banking Regulation Act,
directors will not be removed for the
purpose of reconstitution by
a.. Lots
b.. Majority decision
c.. Both a and b
d.. None
33.. The shareholders of a banking company
are entitled to dividends only before all the
capitalized expenses are written off.
a.. True
b.. False
c.. It is after not before
d.. There is no connection with the
capitalized expenses and declaring of
dividends
34.. Any office, sub-office, pay-office, sub-
pay office and any place at which deposits
are received, cheques enchased or
moneys lent is known as
a.. Place of Banking
b.. Place of Business
c.. Branch of a Bank
d.. Place of a Bank
35.. Other than the Governor, Deputy
Governors of RBI, the other directors are
a.. Appointed
b.. Nominated
c.. Selected
d.. Elected

36.. RBI issues directions from time to time
regulating the lending operations of banking
companies
* The tools employed for exercising Selective
Credit Control are
Minimum margins for lending against selected
commodities
ceilings on the levels of credit and
* charging of minimum rate of interest on
advances against specified commodities


37.. RBI is authorized to regulate interest rates on
loans and advances as well as deposits.
The Usurious Loans Act. 1918 prohibits lending
at exorbitant rates. The law has been made to
protect the weaker borrowers from the powerful
moneylenders
RBI has issued guidelines in respect of internet
banking. These cover a.. Technology and
Security issues b.. Legal issue and c .
Regulatory and supervisory issues

38..The Regional Rural Banks are public sector
institutions, regionally based, rural oriented and
engaged in commercial banking. They were
a.. First set up in 1975 under the Regional Rural
Banks Act, 1975
b.. Replaced by the Regional Rural Banks
act,1976
c.. First one was Ordinance and not an Act
d.. None
39..The first major study by Cadbury
Committee in 1992 led to the introduction
of
a.. Corporate Culture
b.. Corporate Governance
c.. Corporate Social Responsibility
d.. Corporate Sector
40..Corporate Governance
A.. The Equitable treatment of
shareholders
B.. Disclosure and transparency
C.. The responsibilities of the Board
D.. All of these
41..Based on various recommendations of
different committees and the cross-country
experience, the Reserve Bank of India has
initiated several measures to strengthen the
corporate governance in Indian Banking sector
including the concept of this for directors of the
banks.
a.. Disclosure clause
b.. Fit and Proper criteria
c.. Non disclosure clause
d.. Due diligence measures
42..The way in which boards oversee the running
of a company by its managers, and how board
members are in turn accountable to
shareholders and the company and its
implications for company behavior towards
employees, shareholders, customers, banks and
other stakeholders
a.. Corporate Culture
b.. Corporate Value & Responsibility
c.. Corporate Integrity
d.. None
43..The guidance (Basel committee) entitled Enhancing
Corporate Governance for Banking Organizations
highlights the importance of the roles of boards of
directors (with a focus on the role of independent
directors) and senior management.. effective
management of conflicts of interest the roles of internal
and external auditors, as well as internal control
functions . governing in a transparent manner,
especially where a bank operates in jurisdictions, or
through structures, that may impede transparency and
the role of supervisors in promoting and assessing
sound corporate governance practices
44..In India the Corporate Governance
involves
a.. Reserve Bank of India
b.. Securities and Exchange Board of India
c.. Department of Company Affairs
d.. a, b & c

45.. Identify the incorrect statement (Corporate Governance)
a.. Large industrial houses will not be allowed to acquire, by way of
strategic investment shares not exceeding 10% of the paid up
capital of the bank.
b.. RBI guidelines on acknowledgement for acquisition or transfer of
shares will be applicable for any acquisition of shares of 5% and
above of the paid up capital of the private sector bank.
c.. Where ownership is that of a corporate entity, the objective will be to
ensure that no single individual / entity has ownership and control in
excess of 10% of that entity.
d.. Concept of fit and proper criteria not applicable to employees but to
the directors of the bank including CEO
46..Not a term deposit.
a.. Reinvestment plan
b.. Matured/Overdue Reinvestment Plan
deposit
c.. Flexi Recurring Deposit
d.. Daily collection account
47.. Identify which is the most appropriate one.
a.. Presently RBI decides the bank deposits rates
of interest
b.. Presently RBI decides the rate of interest on
Savings Bank deposits
c.. Presently RBI decides the rate of interest on all
types of lending by banks
d.. Presently RBI decides the rate of interest on
both deposits as well as lending without any
freedom for the banks
48..Banks have to file a return on their
unclaimed deposit within 30 days of the
end of each calendar year.
.. All deposits not operated in 10 years
.. For term deposits, the period of 10 years
starts from the expiry of the period of the
deposit

49.. Rajasekar has not nominated for his current
account and Flexi deposits.
a.. Still he can nominate
b.. Since at the time of opening/ investing he has
not done, now not possible
c.. He should have nominated then and there only
d.. Nomination facility, if not utilized by the
customer, then bank should be held responsible
50..For a joint account of W & Y the account holders
appointed J as nominee. The settlement condition on
this term deposit being Either or Survivor. If W dies
before the maturity of the subject deposit, then
a.. Bank will delete the name of W after completing
formalities and allow Y to continue as the depositor
b.. Bank will take the consent of J before doing so as
mentioned in (a)
c.. Bank will settle the claim by closing the deposit before
maturity in favor of the claimants
d.. Since J is the nominee and the condition is not Jointly,
the bank would make the payment to J
51.. Charlu has an individual Savings Bank account
(nominee is wife Meena), a Safe Deposit locker in his
name along with his wife Meena( no nomination but
operation condition is Several) and a Term deposit
(reinvestment plan) with his son Rakesh (Either or
Survivor) (nomination in favor of his wife Meena). On the
death of Charlu, Bank would
a.. Pay the amount on Savings Bank & Term deposit to
Meena
b.. Insist the wife of Charlu to discontinue the safe deposit
locker facility and take the contents
c.. Both a as well as b
d.. None

52.. Which one is correct
a.. Both Safe deposit locker facility and Safe
Custody Article facility are one and the same.
b.. The role of banker is different for both Locker
and Article facilities
c.. In locker facility banker is the lessor whereas in
the article facility banker is the bailee
d.. Both b & c
53..Mr.Shenoy, one of the depositors has died. He had nominated his
second son as the nominee. The First son, first and second
daughters objected that the bank should not settle the claim in favor
of the nominee. Mrs. Tara Shenoy, the wife of the depositor had
already died. However, the depositors mother Mrs. Mukta Shenoy is
alive.
a.. Bank will have to settle the claim in favor of the two sons and two
daughters.
b.. Under these circumstances the nomination is only a formality.
c.. Bank will get valid discharge by making the payment to the nominee
d.. Bank to make the payment to Mrs.Mukta Shenoy the mother of the
deceased only..
54..Selective Credit Control seeks to
influence the demand for credit by
* making borrowing more costly for certain
purposes which are considered relatively
inessential or
* by imposing stringent conditions on
lending for such purposes. Or
* by giving concessions for certain desired
types of activities
55..The tools employed for exercising SCC
are
* .. minimum margins for lending against
selected commodities
* .. ceilings on the levels of credit
* .. charging of minimum rate of interest on
advances against specified commodities.
56..A bank wish to advance against shares
of
a.. Private Limited Company
b.. Public Limited Company
c.. Their own Bank
d.. Both a & c not allowed
57..Board for Regulation and Supervision of
Payment and Settlement Systems (BPSS)
has a chairman. Identify its chairman.
a.. Under Secretary in the Finance
Department
b.. Senior Most Deputy Governor of RBI
c.. Retired Chairman of a Nationalized Bank
as appointed by the Central Government
d.. None of them
58..The Reserve Bank of India (Amendment)
Act,2006(Section 45W) empowers the Bank, in
public interest or to regulate the financial system
of the country to its advantage, to determine the
policy relating to interest rates or interest rate
products and give directions in that behalf to all
agencies or any of them, dealing in securities,
money market instruments, foreign exchange ,
derivatives, or other instruments of like nature
as the Bank may specify from time to time.
59..Banking Ombudsman is an authority
established under the Banking
Ombudsman Scheme, 1995 by the RBI.
The purpose is to resolve and settle the
complaints of banking public against the
commercial banks and the scheduled
primary cooperative banks without
resorting to courts.

60..Banking Ombudsman scheme
applicable to all commercial banks, RRBs
and schedules primary co-operative
banks.
.. Disputes between two banks can also be
taken up with the Banking Ombudsman
..A banking ombudsman may act as an
arbitrator


61..Find out the odd one (Banking ombudsman)
a.. Observance of Reserve Bank directives on
interest rates
b. Non-acceptance of application for loans
without assigning valid reasons to the
applicant
c. Non-issuance of Demand Drafts to customers
d. Non-adherence to prescribed working hours by
branches

62..Identify the correct statement( Banking
Ombudsman)
a.. The Credit card related issues are beyond the
purview of Banking Ombudsman.
b.. The Credit card related issues are within the
purview of Banking Ombudsman
c.. Forced closure of account without sufficient
reason will not come under the purview of
Banking Ombudsman.
d.. Excepting b other two are correct

63.. Shrikanth is an aggrieved client of bank RRF.
Then Shrikanth can
a.. Take up the matter directly with Banking
Ombudsman for redressal
b.. Not take up the matter directly with Banking
Ombudsman for redressal
c.. Take up the matter with Banking Ombudsman
only after referring the matter to the bank RRF
in writing
d.. Take up the matter simultaneously with both
64.. Identify the appropriate one (Banking
Ombudsman)
a.. The Ombudsman is free to follow the procedure
considered appropriate.
b.. The time limit is 2 years from the date of
complaint
c.. Refusal to close account is not within the
purview of Banking Ombudsman
d.. Appellate Authority under the Scheme is
Banking Ombudsman himself
65.. Ronak, a borrower of bank CBO has
approached the Banking Ombudsman, since he
is fed up with bank CBO who has been
insisting him to repay the loan taken by him
from the bank.
a.. The borrower will not succeed
b.. Ronak will succeed
c.. Such matters are not within the purview of the
Banking Ombudsman
d.. The borrower can avoid repaying taking shelter
under Banking Ombudsman scheme
66..When the balance maintained by any
scheduled bank falls below the stipulated
minimum, such a bank shall be liable to pay a
penal interest to RBI.
During the first fortnight , when such shortage
occurs, the penal interest shall be 3% above the
Bank rate and if the shortage continues in the
next fortnight, the penal interest shall be 5%
above the bank rate.
67..
.. Every scheduled bank has to submit a
return to RBI showing the demand and
time liabilities and borrowings from banks
in India


68..RBI has issued guidelines in respect of
internet banking. These guidelines cover
.. Technology and security issues
.. Legal issues
.. Regulatory and supervisory issues
These guidelines apply, in addition to
internet banking, to other forms of
electronic banking to the extent relevant.
69..In the case of banking companies which
are not scheduled banks, as per the
provisions of BR act, the cash reserve
need not be maintained with RBI. It may
be with the bank itself, or in a current
account with RBI or byway of net balance
in current accounts or in one or more of
these ways

70..A bank has to submit a Friday statement
to RBI . The said Friday(16
th
of a particular
month) has not been declared as holiday
under the Negotiable Instruments Act, but
the previous working day and subsequent
day were declared . Then the statement to
be prepared as on
a.. 14
th
of that month b.. 15
th
of that month
c.. 16
th
of that month d.. 18
th
of that month

71..Every banking company has to maintain
in India certain amount of assets as per
the provisions of BR act.
.. At the close of business on the last Friday
of every quarter, such assets shall not be
less than 75% of the demand and time
liabilities of the banking company in India.



72..The rate of interest on loans and
advances contracted between a bank and
customer is not liable to be opened by a
court of law.

73..Every banking company has to submit 3
copies of its balance sheet and profit and
loss account to RBI within 3 months from
the end of the period to which it relate. The
period may be extended by the RBI by a
further period not exceeding 3 months.

74..Banks whose shares are listed in the capital
market are required to publish their
a.. Un audited quarterly results as per pro forma
prescribed by SEBI.
b.. Audited quarterly results as per pro forma
prescribed by RBI.
c.. Un audited quarterly results as per pro forma
prescribed by RBI.
d.. Un audited quarterly results as per pro forma
prescribed by SEBI as well as RBI.

75..A banking company need to submit copies of
balance sheet and auditors report to the
Registrar of Companies.
a. Yes.
b. No
c. The banking company need not submit to
Registrar of Companies.
d. Since they are submitting to RBI there is no
need to submit to Registrar Companies
separately


76..These banks have to display in a conspicuous
place in their principal office a copy of the last
audited balance sheet and profit and loss
account. This has to be done not later than the
first Monday in August every year.
a.. Multi State Co-operative Banks
b.. Local Area Banks
c.. Private sector banks
d.. None

77..RBI is empowered to order special audit of
the accounts of any banking company.
The expenses relating to the special audit to be
borne by the concerned banking company.
.. Every month, a banking company has to submit
to the RBI a return showing its assets and
liabilities in India as at the close of business on
the last Friday of the previous month

78..It is not mandatory to give a copy of the
report to the banking company.
a.. Inspection & Audit report
b.. Scrutiny report
c.. Search report
d.. All these reports

79..Govindarajulu, an account holder with Bank UTB has
requested for the return of a cheque which had been
duly paid by UTB (drawee). The banker refused to give
the original but provided a photo copy and charged him
Rs.50 for the same.
a.. The bank is in order
b.. The bank is not in order
c.. The bank should have handed over the original paid
cheque that too without any charges (keeping a photo
copy for their records)
d.. The customer is not in order in getting the original
cheque, since it is the property of the bank once paid by
them. At the most the customer can get a certificate from
his banker and not the paid instrument
80..The Reserve Bank of India is
empowered to conduct an inspection of
any banking company
a.. Once in a year
b.. At regular intervals
c.. At any time
d.. At the mutual consent

81.. Board for Financial Supervision has
jurisdiction over
a.. The banking companies
b.. Nationalized banks
c.. State Bank and its subsidiaries
d.. All of these
82..To order amalgamation of two banking
companies under the provisions of
Companies Act rests with
a.. Central Government
b.. Reserve Bank of India
c.. Central Government with the consultation
of Reserve Bank of India
d.. Company Law Board

83..The scheme of amalgamation of banks
shall come into force from the date of
a.. Reserve Bank of Indias Notification
b.. Central Governments Notification
c.. Central Governments Sanction
d.. Reserve Bank of Indias Approval
84.. Which one is not correct (Winding up)
a.. Central Government can appoint an official
liquidator, attached to the respective High court
for conducting the winding up proceedings
relating to banking companies.
b.. Reserve Bank can be an Official Liquidator
c.. State Bank of India can not be an Official
Liquidator
d.. Other than an individual a banking company
can also act as an official liquidator
85..Within 15 days of the winding up order,
the liquidator has to give notice calling for
claims for preferential payment and other
claims form every secured and unsecured
creditor. The depositors need not make
claims. The claims of every depositor of a
banking company is deemed to have filed
for the amount as shown in the books of
the banking company standing to his
credit.
86.. JH has been having a savings bank account with a
balance of Rs.775/- and a Recurring deposit account
with a balance of Rs.2550/-. The bank has gone into
liquidation and the official liquidator has proceeded to
settle the claims after completing the formalities. Then
a.. JH would not get any amount
b.. JH would get Rs.250 in each account as priority over
all other creditors
c.. JH would be paid at the discretion of the Official
Liquidator
d.. JH would get the amount on pro rata basis only.


87..State Bank of India was established under sec
3 of the State Bank of India Act,1955 to take
over the undertaking of the then Imperial Bank
and to carry on the business of banking and
other business in accordance with that act.
.. The Central Government can give directions to
SBI on matters of policy involving public interest
in consultation with the Governor of RBI and the
Chairman of the State Bank.

88.. State Bank of India Chairman and
Managing Director are appointed for a
period of 7 years.
a.. For Chairman it is 7 years, but for MD it
is 5 years
b.. For both it is not to exceed 5 years
c.. For both it is not to exceed 6 years
d.. For Managing Director it is 7 years but for
Chairman it is only 5 years

89..The State Bank will act as an agent of
RBI at the places where it has a branch
and where RBI has no branch.
.. To handle government and other
business as required by RBI.
.. The terms and conditions shall be as
agreed between them.


90.. The Central Government may after
consultation with the SBI and RBI by order
in writing authorize a subsidiary bank to
undertake other form of business.
..The State Bank is empowered to inspect
the subsidiary banks
..The auditors are appointed by State Bank
of India in consultation with RBI

91..With regard to the subsidiary banks of
the State Bank of India
a.. The Central Government is empowered
to make rules
b.. The State Bank of India is also
empowered to make regulations
c.. Both a & b
d.. Incorrect it should have been vice versa
92.. Regional Rural Banks have the holding
pattern such as Central Government 50%
, Sponsor Bank 35% and State
Government 15%
Two or more RRBs may be amalgamated
by the Central Government by notification
in the Official Gazette.


93.. The issued capital of the Regional Rural
Bank is held as 15 %:50%:35% by
a.. Regional Rural Bank : State Government
: Sponsor Bank
b.. State Government : Central Bank (RBI):
Sponsor Bank
c.. State Government : Reserve Bank of
India : State Bank of India
d.. None of these

94..The chairman of a RRB is appointed by
a.. The Sponsor Bank
b.. The Sponsor Bank in consultation with
NABARD
c.. The Sponsor Bank in consultation with
NABARD or otherwise in consultation with
the Central Government
d.. The Sponsor Bank only as it has full
power to appoint
95.. In respect of Nationalized Banks, the
shares other than those held by the
Central Government are freely
transferable. No shareholder other than
the Central Government can exercise
voting rights in excess of 1 % of the total
voting rights of all the shareholders.


96..The directors of Nationalized banks are
nominated by the Central Government or
elected from shareholders.
.. Among others one Chartered Accountant
with not less than 15 years of experience
nominated in consultation with RBI.
.. Not more than 6 directors to be nominated
by Central Government


97..The number of existing Nationalized
banks are
a.. 06
b.. 14
c.. 27
d.. none

98.. Identify the appropriate one (Nationalized Banks)
a.. For the purpose of Income Tax Act, a Nationalized
Bank is treated as a separate entity
b.. For the purpose of Income Tax Act, a Nationalized
Bank is treated as an Indian company
c.. For the purpose of Income Tax Act, a Nationalized
Bank is not as an Indian company
d.. For the purpose of Income Tax Act, a Nationalized
Bank is treated as a Government of India undertaking
(Public sector undertaking)


99.. State Bank of India act was amended to divide
capital into shares of Rs.10 each instead of
Rs.100/-
The Banking Companies (Acquisition and
Transfer of Undertakings )Act amended to
facilitate public holdings of shares.
Authorized capital could be up to Rs.1500/-
crore divided into shares of Rs.10/-each and
also to increase or reduce the authorized capital
between Rs.1500 crore and Rs.3000 crore

100.. All the Nationalized banks have two
Executive Directors.
a.. True
b.. False
c.. The criteria is that a Nationalized bank
has to cross Rs.1 lac crore business to
have more than one ED
d.. Yes. At the discretion of Reserve Bank of
India
101..The minimum paid up capital and
reserves to start banking business by a
cooperative bank is not less than Rs.1.00
lac
.. A co-operative bank not to lend on its own
shares/ unsecured loans or advances to
its directors/ any company or associates
wherein the director has interest

102.. Restrictions not applicable for
unsecured loans/ advances made by a co-
operative bank against bills for supplies or
services made to government or bills of
exchange arising out of bona fide,
commercial or trade transactions.
.. A co-operative bank to get permission of
RBI to open a branch in a new place.

103..A co-operative bank has to maintain liquid
assets not less than 25% or such other % not
exceeding 40% as the RBI may stipulate by
notification. The amount has to be maintained as
at the close of business on
a.. The last day of the quarter.
b.. The last Friday of each calendar quarter
c.. Any day
d.. The last day of the month
104..Three copies of balance sheet and
other connected documents along with the
auditors report to be submitted to
Reserve Bank of India by a Co-operative
bank within
a.. 12 weeks
b.. 3 months
c.. 9 months
d.. None

105..A State Co-operative Bank and a
Central Co-operative Bank have to submit
Annual balance sheet to
a.. Reserve Bank
b.. National Bank
c.. Both a & b
d.. Only a
106..If a co-operative bank fails, the depositors of
such a bank is protected upto Rs.1. lac subject
to the provision that
a.. The depositor is not having more than Rs.1 lac
at the time of failure of the bank
b.. The bank has registered with the DICGC
c.. The depositor has is not having more than one
deposit account
d.. The depositor has opted for insurance
coverage specifically
107..Banking Ombudsman is
a.. Discontinued and a new company has
been set up.
b.. Not applicable to delays in receipt of
export proceeds
c.. Applicable to adherence to prescribed
working hours by branches.
d.. All the above are not True.

108.. Bank G and Bank N are engaged in
the process of merging with another and
to form into a new company.
a.. Amalgamation
b.. Merger
c.. Take Over
d.. Consolidation

109.. Identify the odd one
A.. State Bank of India
B.. State Bank of TamilNadu
C.. State Bank of Indore
D.. State Bank of Hyderabad

110..Identify the appropriate one
A.. RBI prescribes the minimum period for
which deposits can be accepted
B.. RBI prescribes the maximum period for
which deposits can be accepted
C.. Both a & b
D.. None

111.. An urban co-operative bank cannot
undertake this business (identify)
a.. Accepting of daily collection deposits
b.. Special deposit schemes for Senior
Citizens
c.. Making available Safe deposit lockers
d.. None of the above
112.. B is the depositor of an Urban co-operative bank. His
deposit got matured on Sunday 4
th
of a particular month
(the bank holiday). He approached the bank on the next
day 5
th
of that month (Monday- working day). The bank
made the payment of interest only up to Saturday 3
rd
of
that month. B demanded interest for Sunday 4
th
of that
month as well, at contractual rate.
a.. The bank is in order in paying interest up to 3rd of that
month
b.. The customer is entitled for his claim
c.. The customers demand is not justified
d.. The bank need not make the payment of one days
interest
113.. Identify the possible
a.. A private sector bank cannot take over another
private sector bank
b.. A private sector bank cannot be taken over by a
Nationalized bank
c.. A private sector bank has been taken over by
one more private sector bank which has been
taken over subsequently by another private
sector bank
d.. All are possible
114.. An officer appointed to conduct court
proceedings for winding up of companies and
includes Reserve Bank of India or other persons
appointed to conduct winding up of banking
companies under the appropriate provisions of
the Banking Regulation Act.
a.. Inspector
b.. Notary Public
c.. Pleader
d.. None of these

115.. For public sector banks, the principles of corporate
governance have been statutorily recognized as per
a.. Banking Companies (Acquisition and Transfer of
Undertakings) Financial Institutions Laws (Amendment)
Act,2006.
b.. Banking Companies (Acquisition and Transfer of
Undertakings) Act1970.
c.. Banking Companies (Acquisition and Transfer of
Undertakings) Act,1980
d.. Nationalized Banks (Management and Miscellaneous
Provisions) Scheme, 1970 & 1980.




116.. Which is within the purview of
Corporate Governance
a.. Banking Ombudsman
b.. Fit and Proper criteria
c.. Know Your Customer
d.. None of these
117..Identify the correct one
A.. A Primary co-operative bank to have
paid up share capital and reserves not
less than rs.1 lac
B.. A Private Limited company to have
minimum paid up capital of Rs.5 lac
C.. A Public Limited company to have
minimum paid up capital of Rs.1 lac
D.. none
118.. Find out the odd one
a.. A scheduled Bank cannot accept Recurring
deposits
b.. A Nationalized Bank can give loans against the
hypothecation of shares
c.. A Private Sector bank is generally prohibited
from offering Home loans
d.. State Bank of India can conduct the Clearing
House in the absence of RBI office.
119..D is the customer of a Bank for last 7
years. He has not operated the account for
last around 5 months. The bank will have
to treat his account as
a.. Dormant
b.. In operative
c.. Still operative
d.. Unclaimed
120..Bank Js depositor has died. The nominee L has
approached the bank with the necessary claim
application along with the death certificate. On
verification it has been found that before his death J had
cancelled the nomination and not nominated any other
person.
a.. L will not get the amount
b.. Since L is not aware about cancellation he is eligible to
get the amount
c.. J should have consulted L before cancelling the
nomination in favor of L
d.. Bank has to ignore Ls claim and proceed to settle the
amount in favor of the legal heirs of J only
121..NN has been introduced by CC and the
account has since been opened by bank
KK. The liability of CC in this respect
would be that of
a.. Monetary
b.. Moral
c.. Pecuniary
d.. Voluntary
122.. A person is having both savings bank
account and a current account. The savings
bank account is showing a balance of Rs.2345/-
(cr) whereas the Current account is showing a
balance of Rs.458/-(dr). Then the
a.. Banker owes the money in respect of current
account.
b.. Banker has to get the money for savings bank
account
c.. In both cases the relationship remains the same
d.. In both cases the relationship not same
123.. When the customers signature on the
cheque is forged there is no mandate to the
bank to pay. As such a banker is not entitled to
debit the customers account on such forged
cheque.
.. The drawee of a cheque having sufficient funds
of the drawer in his hands properly applicable to
the payment of such cheque must pay the
cheque when duly required to do so, and, in
default of such payment, must compensate the
drawer for any loss or damage caused by such
default.


124..Payment in due course means
payment in accordance with the apparent
tenor of the instrument in good faith and
without negligence to any person in
possession thereof under circumstances
which does not afford a reasonable ground
for believing that he is not entitled to
receive payment of the amount therein
mentioned.


125.. A cheque has been received in
clearing on 25
th
of this month bearing the
date as 20
th
of four months ago. The
cheque to be returned on the grounds
a. Stale Cheque
b.. Ante Dated Cheque
c.. Not to be returned
d.. Post Dated

126.. A cheque has been received by the drawee bank in
local clearing. At that time the account has clear balance
to meet the cheque amount. However, it has been noted
that the Words and Figures differ. The cheque
contained Rs Eleven thousand one hundred and one in
words but in figures read as Rs.11100/- Bank has to
a. Make the payment
b. Dishonor the cheque
c.. Make payment for only Rs.11100/- as per figures
d.. Act as a prudent banker


127.. A cheque has been received for collection. The
Collecting banker has given his necessary certificates on
the reverse of the cheque, which had more than two
endorsements. (not crossed as account payee)
a. It is the responsibility of the collecting banker to verify
the regularity of endorsements
b. It is not the responsibility of the paying bank to verify
the regularity of endorsements
c.. The Collecting bank as well as the paying bank are
responsible to verify the regularity of endorsements
d.. None of the above

128.. M has issued a cheque favoring N which has been
received by the drawers banker. On scrutiny, it has been
observed that the word bearer was altered into order
again re-altered into bearer. M has signed only the
cheque and not authenticated the alteration.
a.. The drawee bank to make payment.
b.. The paying banker will be in order to return the same
with a reason Material alteration requires drawers
authentication
c.. The above is not a material alteration.
d.. The responsibility lies with the payees banker and not
that of the drawers banker.

129.. Allonge is associated with
a.. Will
b.. Insurance
c.. Nomination
d.. None

130..A collecting banker is not responsible
a.. If a cheque is returned for want of funds
b.. If endorsements are not regular
c.. If a cheque specially crossed is collected
d.. All the above

131.. On an uncrossd cheque tendered by P to the
credit of his account, the collecting banker Q
affixed his crossing (using the rubber stamp
crossing seal of the bank) on receipt and sent for
collection. Drawee bank being C.
a.. Bank Q will not get protection
b.. Bank Q will get protection
c.. Bank C is in the picture
d.. Bank C is not in the picture

132..A paying banker should not act in a
casual manner. To get appropriate
protection under the provisions of NI
Act,1881, he should act in good faith. He
should not have any doubt that the
payment is being made to the incorrect
person. He should act without negligence.

133..A Collecting banker should act in
good faith.
He should collect cheques only for his
customer
Cheques should have been crossed
(Generally or specially)
Without negligence he should act.

134.. The banker to understand his customer
properly and the collecting banker should not act
in a haste or in a causal manner.
The proper identification and opening of account
with due care assumes lot of importance.
A collecting banker cannot avoid his
responsibility, even at a later date, when it is
proved that the account opened was not
properly opened.

135.. A cheque has been collected by Bank Y. But
the cheque bore the crossing in favour of Bank
S. The cheque is issued by D having account
with Bank X.
a.. The drawee can make the payment since it has
been collected by a bank.
b.. X not to honor
c.. Y is not in order in collecting such a crossed
cheque
d.. Both b & c

136..V has issued a cheque favouring M for Rs.879/-
The cheque has been otherwise in order and the
account has enough balance. M is having account with
BS bank and V is the account holder of JJ bank.

a.. JJ bank not to refuse payment
B.. JJ bank will receive payment
C.. BS bank will not receive payment
D.. BS bank to refuse payment

137..The paying banker has paid the cheque over
looking the endorsements. Later on it came to
the knowledge that the endorsements were
regular but third endorsement was forged.
a.. The drawee is not protected
b.. It is a payment in due course
c.. The paying banker will get protection
d.. Excepting (a) the other two are appropriate

138.. Bank W has received the cheque signed by their
customer E. The cheque was issued around 4 months
ago. Around 25 days ago at the request of E a fresh
signature was obtained by Bank W. The bank returned
the cheque in question when received ( yesterday in
local clearing) on the ground signature varies.
a.. Bank W will get the protection
b.. Bank W obviously not get the protection
c.. It appears Bank W overlooked the new signature lodged
recently and returned the cheque which is having the
earlier signature
d.. Both b & c
139..A collecting banker fails to obtain payment within a
reasonable period from an up country branch.
a.. He has to compensate the payee for whom he has
undertaken the collection
b.. He has to approach the paying banker for payment or in
lieu of that the cheque sent in clearing with proper
reason for return.
c.. He can keep quite till the payment is received or
otherwise.
d.. His responsibility is only to send the instrument for
collection and payment or non payment is not in his
hands
140.. An account holder has appointed his brother as a
Letter of Authority Holder (LAH) to operate the account.
A cheque issued by the LAH has been received for
payment. But it has come to the knowledge of the bank
that the LHA had recently died.
a.. The bank will be in order in making the payment since
the account holder is alive
b.. The bank will be in order in making the payment since
the LAH is not the account holder
c.. The bank will be in order in making the payment if the
same is counter singed by the drawer
d.. The bank will have to take a decision based on the
association with that of the customer and his support to
the bank

141..Bank S opened an account 5 months ago. At the time
of opening of the said account, the bank relied on the
signature of an existing customer of another branch of
the same bank. A few weeks ago they have collected a
demand draft (issued by Bank KJ) on behalf of the
account holder and released the payment .
Subsequently, it came to the knowledge of S that the
said demand draft was so altered as to the place of
payment as well as the amount.
a.. Bank S is not at fault
b.. Bank KJ has to bear the loss
c.. Bank KJ is not at fault
d.. Bank S is responsible
142.. A cheque has come in clearing. It was torn. The
collecting banker has not certified. The paying banker
has
a.. To honour the cheque ignoring the above fact that the
cheque is torn
b.. To dishonor the cheque to the collecting banker seeking
his confirmation for mutilation
c.. To pay the cheque,if it is otherwise in order and there is
sufficient balance in the said account to meet the
cheque
d.. To honour the cheque since mutilation is not amounting
to material alteration
143.. Sisters K & C are having a joint SB account.
Operation condition being Several. A cheque bearing the
signature of both of them have come in clearing and
honored by their banker H. It has been found later on
that one of the signatures was forged. Then bank H
a.. Will get protection
b.. Will not get protection
c.. Will get protection since the operation condition is any
one
d.. Will get protection since it has not been found out within
the reasonable time.
144.. Raja issued a crossed cheque in
favour of Sunder for Rs.7345/=. Despite
that the drawee bank has made the
payment over the counter i.e., Cash
Payment. Under the circumstances
a.. The Drawee Bank is not responsible
b.. The Drawee Bank is responsible
c.. The Drawers bank is responsible
d.. Both b & c
145..A Collecting Banker will get protection under the
provisions of the Negotiable Instruments Act,1881,if
a.. He has collected for a non customer
b.. He has collected for an account holder whose
account has been opened in a very causal manner by
not applying Know Your Customer requirements
properly.
c.. He has collected for an account holder whose
account should not have been opened at all
(incompetent to contract)
d.. He has collected for an account holder whose
account has been introduced by one of the retired
employees of the bank.
146..UB, collecting bank has collected a specially
crossed cheque. The crossing has been in favor
of another banker JI. UB is not the agent for JI.
The cheque is issued by an account holder of
bank DE.
a.. DE can make the payment since it has been
collected by a bank.
b.. The drawee bank not to pay
c.. UB is not in order in collecting such a crossed
cheque
d.. Both b & c


147..Bank W has paid the cheque issued by his customer T
for a sufficient sum in favor of S whose banker M has
collected the cheque. The cheque was issued on 3
rd
of
March and collected by the collecting bank on 5
th
of July
the same year.
a.. A payment in due course
b.. Since not collected within a reasonable period W will
not be protected
c.. Both M and W have not done their respective jobs
properly
d.. Not a payment in due course
148.. As per the relevant provisions of of NI Act,1881 a bank can
seek protection only, if there is a material alteration in the cheque
and does not appear to have been altered.

a.. The above is correct
b.. The above is in correct
c.. The material alteration will not alter the
position.
d.. The material alteration will, to some extent alter
the position.

149.. A Court order has come and the bank has to make
the payment of Rs.2200/- to the court. Next day a
cheque issued by the drawer for Rs.2828/- has come
and at that time the bank had only Rs.1587/- (in view of
the payment made to the court the previous day). The
bank has to return the cheque for Rs.2828/- to the
collecting banker with the reason
a.. Funds insufficient
b.. Refer to Drawer
c.. Attachment by Court
d.. Garnishee Order received
150..Bank SI has paid the cheque for which the drawer has
requested for a stop payment. The bank had duly
acknowledged the letter seeking stop payment. However
honored the cheque in question. The bank defended
their action quoting the acknowledgement in which it has
been clearly mentioned that on account of beyond
control of the bank if anything happens the bank cannot
be held responsible.
a.. The drawer would not get the protection
b.. The drawee would get the protection
c.. The customer would have to be compensated by the
bank
d.. The banks stand would be supported
151..Bank QR has paid the cheque signed by the Letter of
Authority holder in good faith. However, they overlooked
the fact that last week the Letter of Authority holders
power has been cancelled by the drawer and duly
intimated the bank in writing. The cheque bore the date
of yesterday. Bank QR
a.. Will not get protection
b.. Not a payment in due course
c.. Both a & b
d.. Bank QR to get protection since they have acted in
good faith.
152.. Bank D has collected the proceeds on a cheque from Bank O. A,
the customer of D, has not with drawn the amount so collected. At
that time a request comes from Bank O that they have made the
payment by mistake and the cheque in question should not have
been paid since not only the signature of the drawer does not belong
to him but also the entire cheque has been altered. Hence,
requested Bank D to return the amount in question wrongly paid by
Bank O
a.. Bank D need not oblige
b.. Bank D has to oblige
c.. Bank D is answerable to their customer A only, on whose behalf the
cheque has been collected and credited to his account
d.. Bank O can not get the payment, since it was not a payment in due
course
153..Paying banker X has returned a cheque
wrongly due to pressure of work. By the time
they could realize, necessary damage has
already been done. X
a.. Acted with negligent
b.. Not a payment in due course
c.. Both a & b
d.. Bank cannot be held responsible since the
happening had not happened with intention.
154..A cheque is drawn on a bank holiday.
Then it is payable on
a.. The same day
b.. Succeeding working day of the bank
c.. Preceding working day of the bank
d.. None of the above
155.. A cheque has been issued by drawer Arun
in favour of payee Arvind. The said cheque has
been collected by Krishnas bank. In fact Arvind
has endorsed the cheque in favor of Krishna.
Then the payment will be received
a.. From Arvinds bank
b.. From Aruns bank
c.. By Krishnas bank
d.. Both b & c
156.. A cheque issued for Rs.22222/- had to be
returned by the drawee since the balance in the
account at the time of receipt of the said cheque
has been only Rs.2222/- Then the paying
banker has to use the reason
a.. Refer to drawer
b.. Insufficient Funds
c.. Either a or b
d.. Exceeds arrangement
157..RGK, a banker has been asked to
collect a bill of exchange on behalf of its
customer. Then the banker would not get
protection as per NIAct,1881 provisions,
as a collecting banker
a.. True
b.. Incorrect
c.. False
d.. Not True
158..Identify the inappropriate one (Collecting
banker)
a.. The collecting banker should act in good faith.
b.. The collecting banker should act with negligent
c.. The collecting banker should collect for his
customer
d.. The collecting banker should collect only
crossed cheques and not uncrossed cheques
159.. A cheque has been issued by E an agent of an
account holder B who maintains the account with Bank
G. The cheque is issued in favor of E singed by E on
bank G. E has requested G to credit the amount to his
(Es) account also maintained with G only. G obliges.
a.. Amounts to conversion
b.. Not amounts to conversion
c.. If not specifically permitted by B , then amounts to
conversion
d.. G has carried out the instructions appearing on the
cheque hence will get protection
160..Which instrument will always payable
to the payee or to the order
a.. Cheque
b.. Bill of exchange
c.. Promissory Note
d.. None
161..After F, collecting the amount on a demand draft,
(which has been chemically altered and parted with the
money), U, the paying banker demanded the payment
from the collecting banker. F expressed their inability
since the payee is not traceable. During discreet
enquiries by U (affected banker), it has come to the
notice ,that the collecting banker has not applied due
diligence in opening the account of the payee. U is
contemplating to proceed legally.
a.. U would succeed
b.. F would get the order in their favor
c.. U would not succeed but F would not be spared
d.. F since helpless, U would have to bear the loss

162.. B is the collecting banker. The cheque is
crossed in favor of two banks (of which one is in
favor of B). Then the bank
a.. Will be in order in collecting the cheque
b.. Will not be in order in collecting the cheque
c.. Will be in order provided B is collecting as
agent of another bank whose name is also
appearing in the crossing
d.. Will be in order and it is the responsibility of the
paying banker to make payment or not
163..A person approached the bank B for opening of an account giving
the reference of a VIP of the town. At the request of the new person,
the banker B contacted the VIP over phone based on the telephone
number furnished by the new person. After the conversation, the
account was opened. Subsequently, a cheque collected by B
happens not to belong to the payee. Then bank B
a.. Would not get protection
b.. Would get protection, since the bank has taken the precaution to
talk to the VIP before opening of the account
c.. Would get protection
d.. Would get protection, since there is no negligent on the part of B
and further B has acted in good faith and collected for his customer
only
164.. A banker
a.. Cannot be a paying as well as collecting
banker
b.. Can only be a paying banker
c.. Can be a paying as well as collecting
banker
d.. Can only be a collecting banker
165..Bank PR has acted in good faith but with
negligence in collecting a cheque which has not
been crossed. Cheque in question has been
paid by Bank JG (drawee). In case of dispute
a.. Bank JG will be held responsible
b.. Bank PR will be held responsible
c.. Both JG as well as PR would be held
responsible
d.. Neither JG nor PR would be held responsible

166.. While sending the cheque on collection to an
outstation cheque the collecting bank has not
noticed the tearing on the cheque.
a.. The paying banker returned the cheque on
technical ground
b.. The paying banker is in order
c.. Both a & b
d.. The collecting banker can sue the paying
banker for non payment.
167.. M,V & N are the partners of a firm. The
operation condition being any two partners to
sign. One has to be V. A cheque received in
clearing bearing the signatures of N & M
a.. To be honored
b.. After paying confirmation to be got from V
c.. Not to be honored
d.. Bank need not strictly adhere

168..A new person has approached the bank for opening of
an account. He has the address proof, identify proof and
appears to be a genuine person. He has been asked to
bring an introduction of the customer of the bank.
Accordingly a person has been brought. The said person
closed the account two days ago on personal reasons.
The banker
a.. Need not open the account
b.. Has to act as a prudent banker
c.. Need to request for another existing customers
introduction only
d.. Need not show interest in opening such account and
avoid
169.. A banker has to obtain a letter of
guarantee while issuing a duplicate term
deposit receipt to protect their interest.
A.. Appropriate
B.. Not appropriate
C.. Not Letter of guarantee but Bank
guarantee
D.. Only an indemnity
170..A contract of indemnity has two parties.
.. The indemnifier has to make good the loss
as soon as it occurs.
.. There are only two parties to a contract of
indemnity and hence only one contract.
.. An indemnity is for the reimbursement of
loss

171.. In an indemnity the risk is contingent
whereas in a guarantee the liability is subsisting.
a.. The above is correct
b.. The above is incorrect
c.. For indemnity the risk is subsisting and for
guarantee the liability is contingent.
d.. For both risk contingent and liability subsisting

172..Identify the role of indemnity.
a.. Bank has given a loan to C on the surety
of F.
b.. Bank has settled the death claim in favor
of minor legal heirs
c.. Bank for issuing a demand draft to a
student
d.. Bank for issuing a credit card to one of
the valued customers
173..TA has executed an indemnity
agreement in favor of KA. Identify the
indemnified.
a.. TA
b.. KA
c.. Both TA as well as KA
d.. None

174..In banks generally the indemnity is part
of
a.. Issuing a Duplicate or Triplicate demand
draft
b.. To cover the possible future loss
c.. To break open the locker under special
circumstances
d.. All the above
175.. Indemnity holder SVC has incurred
certain genuine expenses.
a.. She is entitled to recover from the person
who has given the indemnity.
b.. She is entitled to recover from the
indemnifier
c.. Both a & b
d.. She is entitled to recover from the
indemnified
176..Contract of indemnity is discussed in
a.. Securitization Act
b.. Transfer of Property Act
c.. Contract Act
d.. Banking Regulation Act as well
177.. Which one is appropriate.
a.. For a contract of indemnity there are two
parties
b.. For a contract of indemnity there are
three parties
c.. For a contract of indemnity there are
more than three parties
d.. For a contract of indemnity not more
than one party
178.. Which statement is appropriate
(indemnity)
a.. The other name for surety is indemnity
b.. There is no other name for indemnity
c.. The other name for guarantee is
indemnity
d.. Indemnity is also known as counter
guarantee
179..Issuing of Bank guarantees is one of
the functions of a banker.
It is a Non fund based finance extended by
a bank.
To secure the bank guarantee in addition to
necessary securities, the bank will have to
obtain a suitable Counter guarantee or
Counter indemnity to safe guard their
interest


180.. Bank V has issued a guarantee on
behalf of their borrower D in favor of the
Department E. Identify the Surety,
Beneficiary and Principal debtor
a.. V, D & E
b.. E, D & V
c.. D, E & V
d.. V, E & D
181.. Bank has issued a guarantee with a protective clause
in which it is mentioned that their liability will cease after
the expiry date. Still the bank insist the beneficiary to
return the guarantee (original) duly cancelled or to that
effect a written communication that there are no claims
from the beneficiary is obtained to
a.. Protect the interest of the banker
b.. Protect against any possible development
c.. Fulfill one of the formalities attached to issuing of Bank
guarantees
d.. Complete the normal function of a banker who issues a
Bank guarantee.
182.. Bank guarantee is the commitment
given by the issuing bank (Guarantor) to
the beneficiary.
If the claim is made by the beneficiary
within the guarantee period and as per the
terms and conditions of the bank
guarantee, then the bank should make the
payment without fail and also without any
delay.


183.. Courts will not interfere in the
functions of a banker with regard to bank
guarantees issued by them.
The Courts will not prevent the bank from
making the claim amount on the bank
guarantee.
The Courts will interfere only when there is
a mala fide intention or fraud or forgery
takes place.

184.. A bank guarantee has been issued by Bank Y on
behalf of its customer H in favor of P. The guarantee
amount being Rs.3.25 lacs. When the claim received
by Y from P, the bank has a balance of Rs.3.27 lacs in
the current account of H. Then the bank Y
a.. Can debit Hs current account with the claim amount
and make a demand draft in favor of P and send.
b. Before doing so Y to consult H and seek his
permission.
c. Bank Y to consult and discuss with P
d. Y need not consult P since he is the person to receive
money from Bank Y.
185.. Banks generally issue Performance
guarantees.
Advance payment , Deferred payment and
Statutory guarantees are also being issued by
banks
Before issuing a bank guarantee, the bank will
go through the draft copy and after satisfying
with the contents they agree to issue.
Besides the documents for various types of
securities, appropriate counter guarantee also to
be taken.

186..Amount of guarantee, period,
protective clause, claim period ,
beneficiary are some of the important
aspects which are to be clearly
understood and put in place to avoid
complications at a later date.
.. If claim has come from the beneficiary
utmost importance to be given and due
action to be taken.

187.. Beneficiary U has invoked the guarantee. Bank B
has to make the payment. At that time B has a collateral
security of Rs.3 lacs (Term deposit) and not enough
balance in the current account of the party. The claim
amount is Rs.7 lacs.
a.. Obviously B will have to foreclose the Term deposit and
make payment
b.. For the balance amount B can approach U with a
request for some more time
c.. Since the amount of the collateral security will not be
sufficient to meet the claim amount, B can desist from
settling the claim of U.
d.. None of these

188.. Having given the commitment under a Bank
guarantee, Bank JK had to make the payment when
revoked by the beneficiary DG. In the process JK
advanced a sum of Rs.2 lacs to F and adjusted the
collateral security of Rs.3 lacs (by closing before maturity
the Fixed deposit )and settled the claim .
a.. F can take objection for the action of JK.
b.. JK is in order in carrying out as stated
c.. The counter guarantee given by F allows JK to act
accordingly
d.. Both b & c
189.. Bank CP has issued a guarantee on behalf
of NV for Rs.37 lacs. Beneficiary DJ has invoked
the guarantee on the last date of the guarantee
and received by CP on 5
th
day after the expiry
date of the bank guarantee.
a.. DJ not eligible to get the payment
b.. CP not obliged to settle the claim
c.. DJ will get and CP to settle
d.. Claim should have come before the expiry and
not after that date.
190..Bank EF has issued a guarantee in favor of Telephone
department for an allotment of STD booth on behalf of ZA. As a
security EF taken 100% margin by way of a fixed deposit. The same
has been got discharged in favor of the bank and necessary Pledge
documents obtained. The counter guarantee has been issued on an
unstamped paper.
a.. Bank will not be able to contest in the court of law in case of
developments
b.. Since the guarantee has been fully secured there is no requirement
of any counter guarantee
c.. Still a counter guarantee should have been obtained having a proper
stamp duty only
d.. Bank EF is correct in obtaining an unstamped counter guarantee.
191.. When the contingent liability on a
bank guarantee becomes a regular
liability?
a.. On invocation of the guarantee
b.. When payment is made by the bank
c.. When payment is refused by the bank
d.. None of these

192.. Bank JY has issued a performance
guarantee (fully secured by way of Fixed
Deposit). Then JY
a.. Need not obtain counter guarantee or counter
indemnity
b.. Need to obtain counter guarantee or counter
indemnity as applicable
c.. can waive both of them
d.. Better to consult its Head Office before
proceeding further

193.. Bank OL had given the guarantee for their
customer 7 months ago. Recently they came to
know that the customer has closed down the
business and left the place. The beneficiary has
invoked the guarantee.
a.. OL need not honor the claim
b.. OL is not obliged to settle the claim
c.. OL cannot refuse payment
d.. OL can postpone payment

194.. A bank guarantee has been invoked by the
beneficiary and the bank has settled the claim. The
banks customer on whose behalf the said guarantee
was issued refused to repay the amount paid by the
bank.
a.. Bank has to forego the amount
b.. Bank can recover based on the counter guarantee
obtained
c.. Bank should not have given guarantee for such persons
d.. Bank has to seek the help of the beneficiary to recover
the amount so paid
195..A Letter of Credit is a commitment by
the LC opening bank to the beneficiary
(Exporter or Seller) to make payment.
.. Banks under a LC deal in documents
.. LC terms and conditions should not be
vague .


196.. As in the case of Bank guarantee, the
payment under the LC Banks obligation
is primary.
.. Exceptional cases the Court would
interfere with the machinery of irrevocable
obligations assumed by the banks, such
as, clear cases of fraud of which the banks
have notice.

197..LC documents include Bill of
exchange, Invoice, Transport documents
(like Airway bill, Bill of Lading, LR,RR,)
Post parcel receipts, Insurance
documents, Packing list, Certificate of
Origin, Quality certificate and so on

198.. A Negotiating banker (the bank in the
beneficiary / Exporters country) negotiates the
bills (makes payment on the bills drawn by the
seller and accepts the documents). He is also
known as Nominated or Paying banker.
.. A confirming banker has to undertake on its
part the liabilities of the credit vis--vis the
beneficiary or the Negotiating bank.
.. Reimbursing bank is appointed by the issuing
bank to make reimbursement to the Negotiating,
Paying or Confirming bank

199..Types of LC include
Revocable / Irrevocable credit
Confirmed credit
With / without recourse credit
Back to back credit
Revolving credit
Anticipatory credit
200.. The bank in the Beneficiary / Exporters
country through which the LC is advised to
the beneficiary is called Advising bank.
The other name for advising bank is
a.. Notifying bank
b.. Nominated bank
c.. Paying bank
d.. Notified bank

201..Which one is a transport document
a.. Bill of Exchange
b.. Bill of Entry
c.. Bill of Lading
d.. None of these
202.. Among other requirements LC specifically
required that the invoice to contain quantity in 10
kg basis. However,the invoice has been made
for 100 kg instead of 10 kg basis.
a.. Will be treated as a discrepancy & not likely to
get payment
b.. Not an insignificant one
c.. Not an alarming issue
d.. It is insignificant
203.. This is also known as Laws of Letter of
Credit.
a.. Letter of Credit Act
b.. UCPDC
c.. Both a & b
d.. None
204.. Uniform Custom and Practice for
Documentary Credits UCPDC 600 came
into effect on
a.. 25
th
October 2006
b.. 25
th
October 2007
c.. 1
st
July 2007
d.. 1
st
July 2008
205.. According to UCPDC 600 reasonable
time for acceptance or refusal of document
by a
a.. Definite period of 5 banking days
b.. Definite period of 5 working days
c.. Definite period of 3 banking days
d.. Definite period of 7 banking days

206..A Deferred payment guarantee is
generally associated with
a.. Current goods purchase and sale
b.. Capital goods purchase and sale
c.. Both a & b
d.. None
207..Bills are classified into inland, foreign,
demand, Usance, Clean, Documentary.
.. Demand bills are always purchased
whereas time bills are discounted.
.. Bills can also be accepted by banks on
collection basis

208..A has drawn a bill on D, on 13
th
of last
month. D has accepted the said bill on
25
th
of last month. The period of the bill
being 75 days. Then such a bill is called
a.. At sight bill
b.. On demand bill
c.. After sight bill
d.. Not a time bill

209..When a bill is transferred for
consideration to any person so as to
entitle him to claim the amount
represented by bill, then such transfer is
called
a.. Endorsement
b.. Assignment
c.. Negotiation
d.. Passing on the title
210..M, a customer has tendered an upcountry
cheque to his banker J, who accepted on
collection basis. After sending the cheque for
collection, at the request of M, J has purchased
the same. Then the relationship between the
banker and customer would be
a.. Agent Principal
b.. Creditor Debtor
c.. Debtor Creditor
d.. Principal - Agent

211.. Seller Kasi has drawn a bill from
Mumbai and accepted by a purchaser
Kumaran in Chennai.
a.. An inland bill
b.. A documentary bill
c.. A sight bill
d.. A demand bill
212.. A bill of exchange has been drawn in
Australia and the drawee has agreed to
pay the same in America.
a.. Not a foreign bill
b.. A foreign bill
cA domestic bill
d.. An inland bill
213..A banker becomes a holder for value,
when he
a.. Collects a cheque on behalf of his
customer
b.. Discounts a cheque on behalf of his
customer
c.. Collects on behalf of another banker
d.. Purchases a cheque on behalf of his
customer

214.. Noting and Protest applicable
a.. When a bill is dishonored on account of
non acceptance
b.. When a bill is dishonored on account of
non payment
c.. When a foreign bill meets with the
situation mentioned in both a and b
d.. All of these

215.. A cheque purchased has been
returned with the reason Funds
insufficient. Then the bank which
advanced finance has to
a.. Recover the finance from the drawer
b.. Recover the finance from the drawee
c.. Recover the finance from the payee
d.. Forego the advance lent

216..Depending upon the nature, value of
securities accepted by the banks,
necessary/ appropriate Loan documents
are to be taken to secure the securities/
money lent and also to protect the interest
of the bank.
.. If proper / adequate precautions are not
taken bank not only loose the security but
also the chances of recovery.

217..Various types of Bank securities
include Land/ Real Estate, Stocks and
Shares, Debentures, Goods, Documents
of Title to goods, Trust receipts, Life
Policies, Post office NScs,, Term deposits,
Book debts, Gold ornaments and so on.
Banks also consider Supply Bills finance
as well.

218.. Without stamp duty which instrument
is considered valid?
a.. Agreement
b.. Cheque
c.. Promissory Note
d.. Acknowledgement of liability

219..Bank has considered the Life policy of
the borrower as security. Then the
transaction will involve
a.. Pledge
b.. Hypothecation
c.. Assignment
d.. Both c & a


220.. The ownership and possession of the
security with the borrower.
a.. Pledge & Mortgage
b.. Pledge & Third party pledge
c.. Hypothecation & Mortgage
d.. Pledge & Hypothecation


221.. Bank XX has considered a loan on
their Fixed deposit. The deposit holder is V
and the loan has to be given to N. Then N
would give /execute
a.. Letter of Pledge
b.. Third Party Letter of Pledge
c.. Demand Promissory Note
d.. Duly discharged Fixed deposit receipt

222....YAR (P) Ltd company has been sanctioned a
Supply Bills limit of Rs.5 lacs.
a.. The Charge need not be registered with the
Registrar of Companies since Supply Bills is
treated as an unsecured finance
b.. The Charge has to be registered
c.. The Charge has to be registered since Book debts
are considered as Collateral security
d.. No connection with the Registrar of Companies
since the bank only gives the finance

223.. Identify which one is an actionable
claim
a.. Life Policy
b.. Cheque
c.. Promissory Note
d.. Bill of Exchange
224.. The Irrevocable Power of Attorney is
also insisted as one of the documents in
respect of
a.. Life Policy Loan
b.. Term deposit Loan
c.. Clean OD
d.. Supply Bills Finance

225.. Identify the inappropriate one
(Securities)
a.. It should be durable
b.. Its storing should not create problems
c.. It should be subject to wider price
fluctuations
d.. It should be easily and freely transferable
226.. To protect the banks security,
insurance to be taken
a.. For the full value of the property
b.. For the full value of the security
c.. For the average value of the property
d.. For the average value of the security
227.. Bank GD has advanced on the security of a
life policy of the borrower. The same has been
dully assigned and registered in favor of the
assignee. When the repayments are regular, the
borrower dies. Then claim amount will be made
by the insurance company to
a.. Nominee
b.. Assignee
c.. Assignor
d.. Legal Heirs of the borrower
228.. There are 6 types of Mortgages.
The Transfer of Property Act discusses
about the Mortgages.
The basic requirements include
An intention to create mortgage by the
owner of the property (mortgagor) in favor
of the Mortgagee (Creditor) to secure a
debt

229.. (1) The sale is ostensible and not real. (2) The
mortgagee has the right to receive rent on the property
mortgaged (3) Mortgage is put through in a Notified area
(4) Private Sale possible- Identify the mortgages
a.. Simple Mortgage/ English Mortgage/ Equitable
Mortgage/ Anomalous Mortgage
b.. Mortgage by way of Conditional Sale/ Usufructuary
Mortgage / Equitable Mortgage / English Mortgage
c.. Registered Mortgage / English Mortgage / Mortgage by
way of Deposit of Title Deeds / Simple Mortgage
d.. Mortgage by way of Conditional Sale / Equitable
Mortgage / Usufructuary Mortgage / Anomalous
Mortgage

230..Find out the correct mode of charge in respect of(1)
Vehicle loan,(2) Cash Credit (stock with the
borrower)(3)Gold ornaments loan & (4) Flat purchase.
a.. Pledge / Hypothecation / Hypothecation/ Mortgage
b.. Hypothecation / Assignment / Pledge / Mortgage
c.. Hypothecation / Hypothecation / Pledge / Mortgage
d.. Pledge / Mortgage / Hypothecation / Hypothecation

231.. BBH, a Ltd company has availed
finance by way of Simple Mortgage. Then
there
a.. Will be two types of Registrations
b.. One with the Registrar of Companies
c.. Another with the Sub Registrar of
Assurances in whose jurisdiction the
mortgaged property is situated
d.. All of these

232..As per the provisions of the
Registration Act,1908, a registered
document operates, not from the date of
its registration , but from the time of its
execution. Thus a Mortgage document
executed earlier, though registered later
than another, has priority over the
documents executed later

233..The limitation period for filing a suit for sale of
mortgaged property is 12 years from the date
the mortgage debt becomes due.
.. The limitation period for filing suit for foreclosure
is 30 years form the date the money secured by
mortgage becomes due..
.. Foreclosure means the loss of the right
possessed by the mortgagor to redeem the
mortgaged property.
.. Under the Mortgage by way of conditional sale,
the mortgagee can sue for foreclosure, but not
sale of the property.

234.. A property mortgaged (Equitable mortgage)
is in a village X which is not a Notified Area. The
bank branch which gave the loan is in a Notified
area J. If the bank wish to file a suit, then
a.. Suit has to be filed in the district headquarters
of the bank branch
b.. Suit to be filed with the Mortgage court
c.. Such loan not possible (Property in a different
area and the lending bank in another area)
d.. None of these

235.. Under a Mortgage suit there are two
decrees possible
a.. Yes
b.. First is called the initial decree
c.. Second is called final decree
d.. First is known as preliminary decree
which is followed by final decree

236..On 22.07.09 an equitable mortgage has been created
by W in favor of Bank VPV. On the same property W
succeeded in getting a finance by way of Simple
mortgage on 10.09.09 from Bank B. Bank B ensured that
the said mortgage was registered in their favor on
10.09.09 itself.
a.. Bank B will get the priority
b.. Bank VPV will get the priority
c.. Bank B will get the priority since they have got the
registration of the mortgage within the permitted period
d.. Neither Bank B nor VPV would get the priority
237..Limitation period on a Term loan
a.. 3 years
b.. 12 years
c.. 3 years from the date of disbursement
d.. None of these

238.. Bank M has considered a simple mortgage on 25
th
of
June. The same borrower managed to obtain another
mortgage loan (Simple mortgage) on 27
th
July (same
year) from another bank (Bank E) on the same property.
Bank E got the simple mortgage deed registered on 27
th

of subsequent month. Bank M also got the mortgage
deed registered in their favor on 24
th
three months from
the date of mortgage. Which bank would get the priority
a.. Bank M
b.. Bank E
c.. Both will not get priority
d.. Priority will have to be decided by a competent court
based on the merits
239..Identify the type of mortgage which
provides a personal covenant to pay on a
specified date notwithstanding the
absolute transfer of the property to the
mortgagee.
a.. English Mortgage
b.. Simple Mortgage
c.. Equitable Mortgage
d.. All the above

240.. (1) Borrower C has offered his gold
ornaments as security to Bank F. (2) Bank
K has obtained the landed property from
the Debtor J. Identify the pledgee and the
mortgagor in these cases.
a.. Pledgee K & Mortgagor C
b.. Pledgee C & Mortgagor K
c.. Pledgee F & Mortgagor J
d.. Pledgee F & Mortgagor K
241..Pledge cannot be created in the case
of
a.. Goods which are existing
b.. Future goods
c.. Both a as well as b
d.. None
242.. Goods are pledged to a bank. The
banker need not insure the same.
a.. True
b.. Since it is in possession of the bank, no
insurance cover is required
c.. It is prudent to have proper insurance
cover
d.. False

243.. Which one assumes significance in the
case of pledge
a.. Possession of the goods pledged with
the pledgor
b.. Pledgee is having only the equitable right
and not the actual possession
c.. Giving a reasonable notice to the pledgor
d.. Ownership automatically gets transferred
to the creditor under a pledge
244..(1) There is no transfer of interest but
only an obligation to repay the debt (2)
There is transfer of interest in the asset to
the creditor.
a.. Mortgage & Hypothecation
b.. Hypothecation & Mortgage
c.. Mortgage & Pledge
d.. Third party pledge & Hypothecation
245.. The term Hypothecation is not
discussed in
a.. Transfer of Property Act
b.. Contract Act
c.. Sale of goods Act
d.. All of these
246.. Which one is more appropriate when
the goods in process has been considered
as one of the securities by the lending
banker.
a.. Hypothecation
b.. Assignment
c.. Pledge
d.. Lien
247..XZB a partnership firm is having Cash
credit facility on the security of
hypothecated stock. Then the creditor
banker has to conduct
a.. Inspection of stocks
b.. At irregular intervals by different officials
c.. At regular intervals by the In charge of
the branch
d.. Excepting c other two are appropriate
248..A partnership firm is enjoying the credit
facilities by way of pledge, hypothecation and
Mortgage of the firms assets. Then charge
registration has to be done within 30 days from
the date of creation of charge for all these
charges.
a.. True
b.. False
c.. Not applicable to Pledge
d.. Applicable to Hypothecation only and not to
Mortgage and Pledge
249.. BDG & Co is an existing partnership firm.
There are 4 partners. One of the partners son
who is yet to become a major has been taken as
the 5
th
partner with the consent of the other
existing partners.
a.. Possible
b.. Not possible
c.. He can be a partner only to receive benefits
d.. Still he cannot be a partner
250.. While a bank advances to a
partnership firm they generally
a.. Do not obtain the personal guarantee of
the individual partners
b.. Do obtain the personal guarantee of the
individual partners
c.. Do obtain signatures of all the partners
on the loan documents
d.. Both b & c
251..When Lokesh has been admitted to the
partnership on 13.06.09 he was a minor. He
gave his consent to be a regular partner in the
firm wef 13.09.09. He became major on
13.08.09. Identify from which date he would be
held liable.
a.. 13. 08.09
b.. 13. 09.09
c.. 13. 06.09
d.. None
252..Mitakshara Law is applicable
a.. In Bengal
b.. In erstwhile Bengal province
c.. Other than a & b
d.. In all parts of India
253.. The Hindu Undivided Family is a
creature of Customary Law among Hindus
and is governed by personal laws.
a.. Dayabhag Law
b.. Mitakshara Law
c.. Both a and b
d.. None of these
254..Though the Karta is considered as an
important person in the affairs of a Joint Hindu
Family it is
a.. Advisable to obtain the signatures of the adult
members as well as the karta while opening a
bank account
b.. Same as mentioned in (a )is applicable while
lending
c.. It is enough if only karta signs the documents
d.. In addition to c it is advisable to intimate the
other adult co parceners about the happening.
255..Which one is appropriate
a.. Firm has to have maximum 20 members if they
are involved in a banking business
b.. A Private Limited company can have minimum
2 members
c.. A Private Limited company can have more than
150 members as a special case
d.. A Partnership firm can have more than 20
members but not to exceed 60. Otherwise, it
would be treated as a Private Limited company
and not a firm
256..Identify the Public documents
a.. Memorandum of Association & Certificate
of Commencement of Business
b.. Certificate of Incorporation & Certificate
of Commencement of Business
c.. Articles of Association & Resolution
d.. None
257..In a Public Limited Company, Public
associated with
a.. Equity Shares
b.. Debenture
c.. Public Deposit
d.. All
258.. Which one is not appropriate (Private Limited
Company)
a.. Restrictions on the right to transfer its shares
b.. Maximum members only 50
c.. Limitation on number of members to
50(excluding the people, who are employees
and ex-employees of the company)
d.. Prohibition as to participation by general public
in its capital requirements
259..Precautions to be taken while lending to
Clubs, Societies, Associations, schools and
other non trading associations.
Same is the case with that of trusts and lending
to trustees.
Appropriate understanding of the respective
provisions of bye laws, resolutions, laws a must
to avoid complications at a later stage.
In all these cases, mostly public money is
handled more care and attention throughout
assumes significant
260..Identify which one is not classified as
Non fund based finance.
a.. Bank Guarantee
b.. Co-accepted Bills finance
c.. Letters of Credit
d.. None of these
261..A customer of a bank has been enjoying an overdraft
facility. Since his dealings have not been satisfactory,
the bank terminated the overdraft limit after giving him
reasonable opportunity including in writing. Subsequently
the cheques issued by the customer not honored. The
aggrieved customer
a.. Can charge the bank for their inaction
b.. Can get protection since he has been put to
inconvenience by the banker
c.. Both a & b not possible
d.. Both a & b possible
262..D has taken a vehicle loan from Bank V. Besides Demand
Promissory Note, she has executed Hypothecation agreement. One
of the clauses in that agreement clearly states that even if one
installment or one interest is not paid automatically that over due will
make the entire liability over due. Further the creditor bank has the
right to ask the borrower to repay the entire liability. D has not paid
2 installments. Then
a.. V can recover the entire money outstanding
b.. V can recover the entire money outstanding plus updated interest
and other charges (as agreed if any)
c.. D is required to regularize the account by paying only the unpaid
installments and interest
d.. D is not required to pay any amount now and she can pay once at a
time in lump sum after certain period.

263..The person in charge of the credit department has
overlooked the contents of the Memorandum of
Association (objects clause) and made an advance to a
Private Limited Company. Later on the company chose
not to repay.
a.. The banker can recover the amount lent
b.. The banker cannot recover the amount lent
c.. The loan documents will safe guard the interest of the
bank
d.. The loan documents and the fact that the company has
taken the money would come to the rescue of the bank
264.. A Public Limited company has an Authorized Capital
of Rs.16 lacs. The issued and subscribed capital Rs.12
lacs and the paid up capital is Rs.10 lacs and free
Reserves Rs.2 lacs. The Company wish to obtain
finance to the extent of Rs16 lacs. Then
a.. Bank can lend on the usual resolution which includes
the borrowing powers
b.. Bank cannot lend on the usual resolution which included
the borrowing powers
c.. Bank need to obtain separate resolution only when the
borrowing is exceeding the capital. Since the same is not
exceeding in the instant case, there is no need for
special resolution
d.. None of the above
265..A Company has approached the bank for finance. The
documents have been executed. But the Common Seal
has not been affixed on the loan documents while
executing .
a.. Bank cannot recover the amount lent
b.. Bank can recover the amount lent
c.. Unless other wise specified in the Articles of
Association, affixing of Common seal is only
optional
d.. If both the parties agree (lender / creditor bank and the
borrower/ company) then affixing of common seal can be
waived.
266..There are 9 charges as specified in the
Companies Act requires compulsory
registration with the Registrar of
Companies.
a.. True
b.. False
c.. Not 9
d.. Less than 9
267..A LTD company has been sanctioned certain
credit limits . The date of application 12
th

February; Sanction letter by the bank
27
th
February; Execution of loan documents 22
nd

March and Finance availed on 29
th
March (all in
the same year). Then charge to be registered
within 30 days wef
a.. 27
th
February
b.. 22
nd
March
c.. 12
th
February
d.. 29
th
March
268..Identify which one is within the purview of
Registration of charge.
a.. Personal guarantee of the Managing Director
b.. Vehicle belonging to one of the directors
offered as a collateral security to the companys
borrowing
c.. Receivables taken as collateral security
d.. Fixed deposit of the company as collateral
security
269.. Modification applicable
a.. When enhancement in the amount of the
finance enjoyed by the company already
registered
b.. Change in the margin for a stock security
under hypothecation
c.. Additional security of the companys land
under Simple Mortgage
d.. All these cases
270..Which form used for Modification
a.. Form 8
b.. Form 14
c.. Form 8 & 13
d.. Form 13 & 17
271..Identify the odd one (Registration of charge)
a.. Charge registration to be done by the borrowing
company
b.. Even the lending banker can effect registration
of charge
c.. Charge by way of hypothecation as well as
pledge attracts compulsory registration
d.. Besides manual even charge registration
possible through electronic mode as well

272.. Bank K has advanced to a Limited Company. Initially the
company was doing well. For one reason or other the company went
into liquidation and the Official liquidator has taken over the assets
of the company to settle the liabilities on pro rata basis. He will have
an access to the assets secured by the banker as well.
a.. True
b.. False
c.. Provided the banker has not got the registration done within the
stipulated time and the manner in which required as per the
provisions of the Companies Act
d.. Once the documents are taken and the bank has the right on the
assets secured, non registration or registration will not alter the
position. The banker only will have the exclusive right
273..For satisfaction of charge it is enough
the bank informs the same to the Registrar
of Companies once the liability is cleared
in full by the company.
a.. True
b.. Not True. Bank has to inform by filing
form 13 & 17
c.. There is no need to satisfy the charge
d.. False
274..Bank DD has advanced to HIJ (P) Ltd company. The bank has the
security of stock (hypothecation) Fixed deposit( Pledge) Vehicle
(hypothecation) and Building (Mortgage). All belongs to the
company. Charge registration in favor of the bank where ever
applicable, already done. The company goes into liquidation and the
Official liquidator demands the Fixed deposit (since not registered)
from the bank while taking charge of the companys assets for pro
rata distribution.
a.. Bank to close the term deposit and issue a demand draft in favor of
the Official Liquidator.
b.. Bank need not adhere to the request of the Official Liquidator
c.. Bank can adjust the liability of the company by adjusting the Fixed
deposit receipt
d.. Still the banker will be considered only as a secured creditor and the
request of the official liquidator will not be tenable, in addition to

275..Government of India has introduced
electronic filing of returns. Banks and other
charge holders are required to file the
particulars of the charges created in their
favor by the companies under this method.
This is to ensure reduction in delays and
one point availability of information about
any company
All the best
Vasudevan
09821125518
09819500380
02227606208
vasu1611@yahoo.co.in
vasu1611@rediffmail.com
vasu1611@yahoo.co.in
vasu1611@rediffmail.com
Contact R : 022 27606208
M : 9819500380
9821125518