Legal & Statutory provisions affecting Bankers -

1. DSB returns called by RBI from banks are part of –a. Basel-II implementation b. on-site supervisionc. market discipline under Basel-II d. Off-site supervision e. none of these

2. Banks disclose the information about their borrowers to RBI under provisions of – a. Directives of RBI b. Sec 45-C, RBI Act c. Sec 45 of Bkg Reg Act d. Directions of Finance Ministry e. As per our Internal Policy 3. The Bank Rate means – a. Rate of interest charged by commercial banks from borrowers b. Rate of interest at which commercial banks discounted bills of their borrowers c. Rate of interest allowed by commercial banks on their deposits d. discount rate at which RBI rediscounts bills of exchange of commercial banks to provide credit to commercial banks

e. Rate of interest that commercial banks charge if funds provided to RBI4. What is the minimum value of stock of gold coins, bullion and foreign

securities, which RBI has to maintain at any point of time?

a. Rs.200 Cr b. Rs.215 Cr c.115 Cr d.500 Cr e. no such restriction 5. you are approached by a chit fund company which wants to open FD of Rs.10 Cr for –3- years. a. Bank will issue FD b. Bank will issue FD after contacting Regional Office c. Bank can issue the same for 1 year at the rate obtained from their treasury d. Bank will not issue as RBI directives do not permit FDRs in the name of Chit Fund Companies

e. Bank will issue after taking a special permission from RBI 6. What is the highest denomination bank note that RBI can issue as per provisions of RBI Act? a. Rs.1,000/- b. Rs.2,000/- c. Rs.5,000/- d. Rs.10,000/- e. no such provi. 7. Banks have been prohibited to staple bank/currency notes by RBI by issuing strict directives for implementation. Under which of the following, these directives have been issued. a. Indian Currency Act b. NI Act c. Banking Regulation Act d. RBI Act e. Issue of Fresh Currency Act 8. The Annual Return of unclaimed deposits u/s 26 of Banking Regulation Act should be submitted to RBI within ___ after close of the calendar year. a. 15 days b. 90 days c. 30 days d. 45 days e. 21 days

9. What is the maximum extent, up to which a bank can hold the shares of a company when it is pledgee or mortgagee or absolute owner? a. no ceiling b. 5% of the total unsecured loans c. 30% of its own paid up capital and reserves or 30% of the paid up capital of the company, whichever is lower. d. 30% of its own paid up capital and 30% of the paid up capital and reserves of the company, whichever is lower. d. 30% of the capital e. none of these 10. The instrument such as (a) airway bill (b) bank note (c) letter of credit (d) demand draft are not treated as Negotiable Instrument. Which of these is correct?

a. a, b, cb. a, c, dc. a, b, c, dd. a, b, de. only c

11. As per provisions of NI Act Sec 48, an order cheque is transferable (negotiated) only by – a. delivery b. endorsement & delivery c. blank endorsement d. all the above e. a or b

12. Which of the following is payment in due course? a. Crossed cheque paid over counter b. Cheque with the forged signature of the bearer c. Bearer cheque with forged endorsement on it d. cheque paid after receipt of garnishee order e. none of the above

13. A has received an order cheque which bears a forged endorsement in his favour. The cheque was originally issued in favour of Mr X who endorsed in favour of Y but Y had misplaced it and Z who found this cheque endorsed it in favour of A by forging X’s signature. The holder of cheque will be – a. A b. Y c. Z d. All e. None

14. The holder of a negotiable instrument in holder in due course if (a) he has right of possession (b) he receives the instrument for lawful consideration (c) the instrument is in his possession.. which of these is correct?a. a & b only b. b & c only c. a & c only d. a to c all above e. none

15. which of the following is not a condition essential for constituting a person as a holder of a negotiable instrument?a. he could be payee of the instrumentb. he could be an endorsee of the instrumentc. he should receive the instrument for valuable consideration only and not otherwised. he has the right of possession to the instrument

16. On which of the following types of cheques alterations are not allowed by RBI?a. Paper cheque b. CTS cheque c. Electronic cheque d. all the above e. none

17. Which of the following can not be endorsed?a. a fixed deposit receiptb. a Bank draftc. a promissory noted. a usance bill of exchangee. a cheque

18. Z endorsed a cheque in favour of B and B endorsed it to C who just signs the cheque. The cheque is stolen by D, who converts this blank endorsement in favour of Ashok (an old creditor of the D) for a valid consideration. Ashok took the payment of the cheque. In this case Ashok is liable to whom –a. he is liable to the bankb. he is liable to the debtorc. he is liable to the all partiesd. he is not liable to any one since he is holder in due coursee. he is not liable to any one since he has already obtained the payment

19. An uncrossed cheque was deposited with the bank for collection and bank crossed the cheque at its own end and collected the proceeds –a. Bank will get protection u/s 131 of NI Actb. Bank will not get protectionc. Bank will get protection u/s 130 of NI Actd. None of the abovee. The paying Bank will be held responsible

20. “A customer is a person who maintains an account with a bank.” This definition of the customer is available as per –a. Banking Regulation Actb. NI Actc. RBI Actd. KYC guidelines of RBIe. Consumer Protection Act

21. The period of limitation for exercising banker’s lien is –a. 2 years b. 1 year c. 3 years d. 12 years e. NO limit

22. Under section 131,collecting bank gets protection only if:

i) Collection is in good faith and without negligenceii) payment is received for a customeriii) Cheque generally or specially crossed before it is presented to the payee Bank iv) All of the above

23. Which of the following statements is not correct as per NI Act –a) The holder can covert special crossing into general crossing or he can cancel any crossing under his signature. b) the holder can cross a cheque c) If a cheque is simply crossed, he can add special crossing d) If cheque is simply or specially crossed he can add the words ‘not-negotiable’ in it.

24. Mr. Ramesh has issued a cheque amounting to Rs. 2900/- .There is no date on the cheque;a.It is a valid chequeb.It is not a valid instrumentc.Any presenter has a right to put the dated.Bank should pay the cheque if there is no datee.Mr Ramesh can only put the date

25. What is the maximum amount of compensation that Ombudsman can allow, for a case referred to it?a. Rs.2 lacs b. Rs.5 lacs c. Rs.10 lacs d. Rs.25 lacs e. any amount

26. What remedy is available to the customer when Ombudsman passes an order with which customer is not satisfied:a. can make a review application to Ombudsmanb. can make a review application to Review Authorityc. can go in for appeal in DRTd. can appeal to Appellate Authority within 30 dayse. can file a suit in a consumer court only

27. A complaint that is made to Ombudsman should not related to an issue (a) already settled by Ombudsman (b) pending with a court (c) already decided by a court (d) where limitation period has expired. Which of the following options is correct?a. a, b, c only b. b,c,d only c. a, c, d only d. a, b,c,d all e. a only

28. The customers are allowed immediate credit of their outstation instruments subject to compliance with certain conditions. It was originally initiated on the recommendations of –a. Talwar Committeeb. Rangarajan Committeec. Narsimhan Committeed. Goiporia Committeee. Saraf Committee

29. A joint either/survivor operated account is maintained in the name of A, B and C. C has become insane. The payment in the account can be obtained by –a. A only b. B only c. A&B jointly d. A&B jointly with receiver of Ce. A B & C jointly

30. There is an ‘either or survivor’ FDR of A and B but A dies before its maturity. B also dies one week after his death before maturity. FD amount is payable to –a. Legal heirs of A b. Legal heirs of B c. Legal heirs of either A or Bd. Legal heirs of A and B e. Legal heirs of the person who died earlier

31. A mandate in a partnership account can be cancelled by –a. All the partners b. Any one of the partners c. Majority of the partnersd. By the partners who are authorized to operate the account d. None of the above

32. A banker should not pay the cheques drawn by a customer who has been sentenced and sent to jail for –a. Rape b. Criminal liability c. moral ground d. Insolvency e. a & b

33. The Karta of HUF can not do which of the following, in relation to business of the family-a. Can borrow moneyb. Can sign documentsc. Can create charge on propertiesd. Can deal with HUF property for benefit of the HUFe. None of the above

34. YZ Bank has granted a loan to a limited company against pledge of stocks. Within how many days the charge particulars should be got filed with register of companies (ROC) from date of creation of the charge-a. within 30 days b. within 60 days c. within 90 days d. No registration needede. within 15 days

35. Pari passu charge in case of a consortium advance by banks to a big borrower means which of the following –a. each bank has equal charge on the securityb. banks allowed the loan first, will have first chargec. each bank will have charge on security in the ratio of loans sanctionedd. each bank will have pro-rate charge on the security in the ratio of their outstanding balance within the limits approved by the consortiume. None of the above

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Wish you all Good Luck….Dear Barodians… M. Suresh Kumar, Faculty, TC, Chennai