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JAIIB/Diploma in Banking & Finance LEGAL & REGULATORY ASPECTS OF BANKING. MODULES C & D. 01.. Identify which one is correct. a.. A contract of guarantee has two persons b.. A contract of indemnity has two persons. c.. A minor can take an education loan as a borrower

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01 identify which one is correct
01.. Identify which one is correct.

a.. A contract of guarantee has two persons

b.. A contract of indemnity has two persons.

c.. A minor can take an education loan as a borrower

d.. A pledge in respect of company advance has to be registered with ROC.

02 the award of a banking ombudsman will be reviewed by
02..The award of a Banking Ombudsman will be reviewed by

a.. The Executive Director of RBI

b.. The Deputy Governor in charge of Rural

Planning and Credit Department of RBI.

c.. The Finance Secretary

d.. The Banking Ombudsman himself

03 which is not correct banking ombudsman
03..Which is not correct (Banking Ombudsman)

a.. The maximum amount the Banking

Ombudsman can award as compensation is Rs.10 lacs.

b.. Limitation period for filing of the review application is one month.

c.. Failure to honor guarantee does not come under its purview .

d.. None of the above

slide5
04..Means an agreement reached by the parties either by conciliation or mediation under the scheme (Banking Ombudsman)

a.. Mutual agreement

b.. Mutual Consent

c.. Reconciliation

d.. None of the above

slide6
05..Which one is appropriate (Banking Ombudsman)

a.. A complaint can be lodged by a bank on another bank

b.. Complaint can neither be given in writing (manually) nor electronic means

c.. RRB is not within the purview of this scheme

d.. Central Government is the authority to appoint a Banking Ombudsman

slide7
06.. A complaint alleging deficiency in banking service may be filed with the Banking Ombudsman having the jurisdiction

a.. Issue of drafts to customers and others

b.. Inordinate delay in collection of bills

c.. Both a & b

d.. Only b

slide8
07..No complaint to the Banking Ombudsman shall lie unless the complainant had before making a complaint to the Banking Ombudsman made a written representation to the bank and either the bank had rejected the complaint or the complainant had not received any reply within a period of one month after the bank concerned received his representation or the complainant is not satisfied with the reply given to him by the bank.
slide9
08.. The complaint is made not later than one year after the cause of action has arisen.

..The complaint is not in respect of the subject matter, which was settled through the office of the Banking Ombudsman in any previous proceedings

slide10
09.. If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as considered by Banking Ombudsman, he can pass an award.

.. He shall be guided by the evidence placed before him, the principles of law and practice, directions, instructions and guidelines issued by RBI from time to time to pass the necessary award.

slide11
10..A person has applied for a loan . The bank has not sanctioned the loan since the bank felt the person was not eligible. The person

a.. Can approach the bank once again

b.. Cannot take up the matter with the bank

c.. Can refer the matter to Banking Ombudsman

d.. Can request Banking Ombudsman to instruct the bank to sanction the loan

slide12
11.. A bank not agreeing to accept the Award passed under the Banking Ombudsman scheme may file a review application before the Review Authority within one month from the date of receiving copy of the Award. Bank’s application to be approved by the bank’s Chairman or in his absence by the Managing Director or any other officer of equal rank.
slide13
12..Reserve Bank of India appoint one or more persons as Banking Ombudsman for a period not

a.. Exceeding 4 years at a time

b.. Exceeding 3 years at a time

c.. Exceeding 2 years at a time

d.. Exceeding 1 year at a time

slide14
13.. Banking Ombudsman ( identify the odd one)

a.. Non-acceptance of applications for loans without furnishing valid reasons to the applicant

b.. Refusal to accept taxes, as required by the Government

c.. Acceptance of small denomination coins tendered for any purpose

d.. Non-adherence to the fair practices code as adopted by the bank

slide15
14..With regard to complaints relating to credit card operations, the banking ombudsman shall take into consideration

a.. The loss of complainant’s time

b.. Expenses incurred

c.. Financial loss, harassment and mental anguish suffered

d.. All of these

slide16
15.. A copy of the award need not be sent to the complainant under the Banking Ombudsman Scheme.

a.. True

b.. False

c.. It has to be sent not only to the complainant but also to the bank named in the complaint

d.. It is the discretion of the Banking Ombudsman and not mandatory to send the copies of the award

slide17
16.. The banks covered by the Scheme of Banking Ombudsman has to appoint specified officer at their Regional / Zonal Offices.

a.. Not required

b.. Not essential

c.. Not specified officer

d.. None

slide18
17.. A complaint has been filed against a Bank (Banking Ombudsman Scheme). The Banking ombudsman directed the bank concerned to furnish necessary information. Then it is to be carried out by

a.. Designated officer of the bank for this purpose

b.. Nodal Officer of the bank

c.. Chief Manager or the person equivalent to his position in the Regional / Zonal Office of the bank concerned

d.. None of them

slide19
18.. Ashis Kumar is an Advocate. He is not satisfied with the service of the bank which has delayed his collection of cheque. He has taken up the matter with the bank concerned. Since he has not got a proper response, he has decided to approach Banking Ombudsman.

a.. He will not be entitled as per the scheme

b.. He can very well take up the matter

c.. There is bar for the advocate to involve themselves in approaching Banking Ombudsman

d.. Asish Kumar has the option to request his friend Advocate to represent him

slide20
19.. It has been observed by a customer while going though the entries in the account (pass book), that the bank has debited wrongly his account. On account of that the customer has to suffer.

He wish to refer the matter to Banking Ombudsman.

a.. He can, provided he takes up the matter first with the bank concerned in writing

b.. Considering the seriousness of the matter there is no need to refer the matter to the bank concerned that too in writing

c.. Straight away take up the matter with Banking Ombudsman and intimate the Bank concerned

d.. Straight away take up the matter with Banking Ombudsman and there is no need to intimate the bank, since Banking Ombudsman is part of RBI which is always considered superior.

slide21
20.. Limitation period for filing of the review application against the award of the Banking Ombudsman is

a.. 90 days

b.. Not 90 days

c.. Not available since review is beyond the purview of the scheme

d.. None

slide22
21..The Banking Ombudsman

a.. May reject a complaint, at any stage

b.. Can reject a complaint not before 45 days of receipt of such complaint

c.. Can not reject a complaint

d.. Has to pass an order in respect of any complaint made to him and does not have the powers to reject

slide23
22..Thorat is the agent of a bank who has assured that the bank would extend certain specific services and succeeded in giving a credit card to one Thomas. Later on the bank has not provided the services assured. Thomas can refer the matter

a.. Only to the bank concerned

b.. To the Banking Ombudsman after following the steps required in the scheme

c.. Thomas cannot refer the matter to Banking Ombudsman.

d.. Such complaints are beyond the purview of the scheme

slide24
23..Banking Ombudsman - A bank wish to file an appeal before the Appellate Authority. The same should be with the previous sanction of the

a.. Board of Directors of the Bank

b.. Nodal Officer

c.. Designated Official

d.. None of these

slide25
24..A compensation claimed is around Rs.16 lacs in a complaint filed against the bank. Then the matter

a.. Can also be brought under the Banking Ombudsman Scheme

b.. Can be brought under the Banking Ombudsman Scheme for compensation up to Rs.10 lacs and for the balance to be taken up with the competent court

c.. Can not be brought under the Banking Ombudsman scheme

d.. Can be brought under the Banking Ombudsman Scheme as a special case based on merits

slide26
25..SARFAESI Act 2002, extends to whole of India including the State of Jammu & Kashmir. Also applicable to housing finance companies.

.. The act is effective from 21.06.2002. It also covers the earlier loans which were outstanding.

slide27
26.. SARFAESI Act has

a.. Prospective effect

b.. Retrospective application

c.. Effect from 21st June 2002 only

d.. Effect from 21st June 2002 cases taken up on that day and there after only

slide28
27..Based on the observation of the Supreme Court in the Mardia Chemicals vs Union of India case, the Government of India issued notification amending the provisions of the SARFAESI Act. The amendment stipulates payment of 50% amount instead of 75% as originally enacted. (When appealed)
slide29
28..Bank Z had advanced on the collateral security of the third party deposit receipt of N, to L. The bank has also obtained a personal guarantee of D to secure the loan. For recovery, Z can use the provisions of SARFAESI Act.

a.. Allowed

b.. Not allowed

c.. Since pledge and only personal securities the provisions of the Act not applicable

d.. There may not be any need since the Fixed deposit can be adjusted for the loan outstanding. Additionally personal guarantee is also available for the bank

slide30
29.. The provisions of the SARFAESI Act will protect the interest of the secured creditor (lending banker) irrespective of

a.. Defective Documents and any type of charge on the security

b.. Non availability of Limitation on the documents

c.. Both a & b

d.. None of the above

slide31
30.. For a mortgaged property to sell the same permission of the competent court essential. As per provisions of SARFAESI Act

a.. The same continues

b.. The same is not continuing

c.. Since there is no intervention of court contemplated under this Act, even for mortgaged property, the secured creditor can sell the property without court’s permission

d.. Under the Act, the mortgaged property cannot be considered at all.

slide32
31.. ABF Bank has advanced to a partnership firm. The security include Pledge of Gold ornaments of one of the partners, Hypothecation of vehicle and stock and Pledge of Fixed deposit of the firm. The borrowing has not become NPA though there is a default.

a.. Provisions of SARFAESI Act not applicable

b.. Provisions of SARFAESI Act applicable

c.. Provisions of SARFAESI Act not applicable for vehicle and stock

d.. Provisions of SARFAESI Act applicable for vehicle and stock but not for pledge of gold ornaments / Fixed deposit

slide33
32.. Which one is not associated with SARFAESI Act.

a.. Obligor

b.. Hypothecation

c.. Security Receipt

d.. None of the above

slide34
33..Which one is not coming under the purview of SARFAESI Act.

a.. Moveable property under the possession of the secured creditor

b.. Moveable assets under the possession of

the debtor who has offered the security to the secured creditor

c.. Immoveable assets not under the possession of the secured creditor

d.. Immoveable assets with the mortgagor

slide35
34..Identify the odd one (Securitization matter)

a.. Hypothecation of stock

b.. Mortgage of Machinery

c.. Personal guarantee of the Managing Director

d.. Goods in transit offered as security

slide36
35..Appellate Tribunal is constituted by

a.. Central Government

b.. As per the provisions of the appropriate Act

c.. As per the provisions of the Recovery of Debts due to Bank and Financial Institutions Act.1993

d.. Both a & c

slide37
36..Take over of loans or advances from the Bank or Financial Institution for the purpose of recovery is known as Asset reconstruction.

. The word Board is used in the Act refers to the Securities and Exchange Board of India (SEBI)

slide38
37.. The SARFAESI Act is applicable to

a.. Regional Rural Banks

b.. Nationalized Banks & Co-operative banks

c.. State Bank of India and their Associate banks

d.. Both b & c and not to a

slide39
38..Acquisition of any right or interest, of any bank or financial institution, in any financial assistance, by any securitization company or reconstruction company, for the purpose of realization of such financial assistance is known as

a.. Asset Reconstruction

b.. Securitization

c.. Both a and b

d.. Reconstruction

slide40
39.. As per the provisions of the SARFAESI Act, a borrower is one

a.. Who has obtained finance from a banker

b.. Who has given the guarantee for the person (a)

c.. Who has created any mortgage in favor of the bank for obtaining finance

d.. All of these

slide41
40.. SARFAESI Act applicable in respect of

a.. Temporary Over draft in a current account

b.. Overdraft on the security of shares

c.. Both a & b

d.. Work in progress taken as security

slide42
41..Default should have been committed by the debtor.

. The borrower’s account should have been classified as NPA as per the guidelines of RBI.

. The Act is applicable only to a Secured creditor and not to an unsecured creditor

slide43
42.. Bank U has lent to A a sum of Rs.5 lacs on the hypothecation of a van. Identify the Originator as per the provisions of the SARFAESI Act.

a.. Borrower A

b.. Bank U

c.. Neither A nor U

d.. Debtor A

slide44
43.. He is the owner of a financial asset that is acquired by a securitization or reconstruction company for the purpose of securitization or asset reconstruction.

a.. Originator

b.. Lending Bank

c.. Lending Financial Institution

d.. All the three

slide45
44.. Obligor is a person liable to pay to the lender (originator).

As per the contract terms and conditions or otherwise.

He has to discharge any obligation in respect of a financial asset whether existing, future, conditional or contingent or and includes a borrower.

slide46
45.. Identify the Obligor in respect of a loan given to one N by bank J. The security offered by N include his gold ornaments, two wheeler and collateral security of his flat.

a.. N

b.. J

c.. N & J

d.. None

slide47
46.. Under the provisions of the Act (SARFAESI) which one is not considered as Property

a.. Future Receivables

b.. Know how

c.. Land

d.. None of these

slide48
47.. Qualified Institutional Buyer (odd one)

a.. Bank

b.. Insurance company

c.. A CEO of a leading MNC

d.. An Asset Management Company

slide49
48..Which one is not pertaining to Hypothecation.

a.. A charge in or upon any movable property

b.. Right in favour of the creditor

c.. Possession also with the lender

d.. Retaining the ownership with the owner of the property

slide50
49.. The securitization company or reconstruction

Company to raise funds from qualified

institutional buyers by formulating schemes.

.Separate scheme wise accounts to be

Maintained.

.The Scheme invites subscription to security

receipts proposed to be issued by such company

under the scheme.

slide51
50.. Bank R is the secured creditor and W is the borrower who happens to be the defaulter .The branch head is C. W has given his land as security which is under his possession. The outstanding liability is shown under NPA. Identify the Obligor & Originator.

a.. R and C respectively

b.. W and R respectively

c.. W and C respectively

d.. R and W respectively

slide52
51.. Who will receive the Security receipt from whom.? (SARFAESI Act)

a.. Secured Creditor from Principal Debtor

b.. Institutional Investor from Securitization company.

c.. Securitization company from Institutional investor

d.. Secured Creditor from Reconstruction company

slide53
52..Identify the regulatory authority for all securitization and reconstruction companies.

a.. SEBI

b.. RBI

c.. Company Law Board

d.. IRDA

slide54
53..GNMV, the secured creditor. After completing the formalities / procedures (as per SARFAESI ACT) the assets mortgaged by RJJH were purchased by a Securitization and Reconstruction company called JFI for Rs.30 lacs. Then

a.. JFI will issue a security receipt to GNMV

b.. GNMV will receive debentures from RJJH

c.. RJJH will issue security receipts to JFI.

d.. GNMV will get debentures from JFI

slide55
54..In Mardia Chemicals vs Union of India Supreme Court as declared that

A.. SARFAESI Act is Constitutionally valid

B.. Except a part of Section 17(2)

C.. To Deposit 75% for appeal, the Apex court was not in favor

D.. All the above

slide56
55.. A reconstruction company

a.. is engaged as property developer

b.. is formed for the purpose of asset reconstruction

c.. is registered with SEBI

d.. is not registered under the Companies Act

slide57
56..The Government of India has

a.. issued an order

b.. issued a notification amending the Sec17(2) of SARFAESI Act.

c.. Instead of 75%, the borrower filing an appeal has to deposit 50%

d.. Both B & C are appropriate

slide58
57..A Mutual fund, an Asset Management Company and a Foreign Institutional Investor would like to invest in Securitization and Reconstruction company as as qualified institutional buyers. Then they will have to

a.. Register with SEBI

b.. Register with SEBI is not a must

c.. Register with SEBI is a must

d.. Register with SEBI when directed only

slide59
58..J F D a Securitization and reconstruction company acquired financial asset from PNM, a secured creditor. In view of the same, JFD would become

a.. Purchaser

b.. Seller

c.. Owner

d.. None of these

slide60
59..The Securitization Company not only to be registered under the Companies Act but also needs registration from RBI as per

A.. RBI Act

B.. Companies Act

C.. SARFAESI Act

D.. SEBI Act

slide61
60.. A person who is holding 15% of the paid up equity capital of the reconstruction company is known as

a.. Sponsor

b.. Obligor

c.. Originator

d.. Institutional investor

slide62
61.. Identify the beneficiaries of the trusts formed by Securitization company. ICE is the Securitization company. GZH is the Secured creditor. BDE is the Institutional investor.

a.. GZY

b.. BDE

c.. ICE

d.. None of them

slide63
62.. A security receipt is

A.. Similar to Bank’s Term Deposit receipt

B.. Issued to Securitization Company

C.. Issued by Securitization Company

D.. Issued to a Secured Creditor and also to an Institutional Investor

slide64
63... The Securitization company can acquire financial asset without execution of any deed of assignment or transfer in its favor by the original creditor.

a.. True

b.. False

c.. Without agreement it cannot be legally valid

d.. Deed of Assignment is a must.

slide65
64.. Debenture as per the provision of SARFAESI

a.. Appears on the left hand side of the balance sheet

b.. It is shown as liability representing commitment

c.. It is for payment of consideration to be paid to the bank for acquisition of financial asset from it

d.. It represents the money borrowed.

slide66
65..SARFAESI Act

a.. Security Receipt issued by Securitization Company

b.. Security Receipt is not issued to a Secured Creditor

c.. Security Receipt is issued to Institutional Investors who are also called Qualified Institutional Buyers

d.. All the above

slide67
66.. Identify the incorrect one (Reconstruction Company)

a.. It has to obtain registration certificate from RBI.

b.. It has to have minimum capital of Rs.100 crores at the time of registration

c.. It can formulate separate schemes for acquisition of financial assets

d.. It has to disclose the risk factors to the investors.

slide68
67..The Security receipt (not having any interest or right and so on in immovable property) issued to the holder by the Securitization company attract registration as per the Registration Act,1908.

a.. True

b.. False

c.. Registration compulsory for such receipts.

d.. None of the above

slide69
68..As per the provisions of the SARFAESI Act, the charge against property to be registered with

a.. Registrar of Companies

b.. SEBI

c.. RBI

d.. None

slide70
69.. A Limited Company has been sanctioned a Bills limit and the outstanding liability has been classified as NPA. Then the provisions of SARFAESI Act includes

a.. Book debts

b.. Assignment of Book debts

c.. Hypothecation of Book debts

d.. None

slide71
70..Bank G E H has advanced to SSS a sum of Rs.2.75 lacs. It has been classified as NPA. OPQ a Securitization company has shown interest to take over the assets offered by SSS as security to Bank G E H. Identify the Secured Creditor, Who will issue Debenture to whom and the Debtor.

a.. G E H , OPQ to G E H and SSS

b.. G E H , OPQ to SSS and G E H

c.. G E H , G E H to OPQ and SSS

d.. G E H , SSS to OPQ and G E H

slide72
71.. Whenever any lender takes any security from the borrower, the lender gets interest in that security. As per the SARFAESI Act this is known as

a.. Secured interest

b.. Charged interest

c.. Secured creditor’s interest

d.. None of these

slide73
72..ABC and co has not paid the debt. Declared NPA. Securitization process held. The secured creditor JIT has handed over the security to the securitization company STB. Then ABC paid some amount.

a.. JIT can use the funds so got

b.. JIT has to hand over the same to ABC

c.. JIT has to hand over to STB

d.. None

slide74
73..This evidences the purchaser’s undivided right, title and interest in the security.

a.. Deposit Receipt

b.. Security Receipt

c.. Both a & b

d.. Only a

slide75
74.. A securitization company is contemplating to change its name.

a.. They can do so by informing the appropriate authority

b.. Seek approval from SEBI after the change

c.. Needs prior approval from the Company Law Board

d.. None

slide76
75..Securitization or reconstruction companies

a.. Do invest their own funds to acquire assets

b.. Do not invest their own funds to acquire assets

c.. Use the money invested on risk assessment and act on careful considerations for asset acquisition decision.

d.. Excepting a other two are appropriate

slide77
76..Cancellation of Certificate of Registration for a Securitization company possible (odd one)

a.. The company ceases to receive or hold any investment from a qualified institutional buyer.

b.. The company continues to receive or hold any investment from a qualified institutional buyer.

c.. The company fails to comply with any of the directions issued by the Reserve Bank

d.. The company fails to obtain prior approval of Reserve Bank of India for change in management

slide78
77..The securitization or reconstruction company whose registration is cancelled can prefer an appeal within 45 days from the date of communication of order, to Reserve Bank of India Governor . The company is required to be given a hearing before rejecting the appeal.

a.. Appropriate

b.. Not 45 days but 30 days and Not RBI but Central Government

c.. Only change is 30 days instead of 45 days

d.. Not RBI but Central Government

slide79
78..The securitization transaction involves

a.. Acquisition of financial assets and undivided interest therein

b.. Issue of security receipts in favor of the investors for the purpose of raising money from investors.

c.. Both a and b

d.. None

slide80
79..This, for the payment of consideration, is to be paid to the bank or the financial institution for the acquisition of financial asset from it.

a.. Debenture

b.. Security Receipt

c.. Security Deposit

d.. Security Interest

slide81
80..Under the Securitization process, debenture issued period not to exceed

a.. 5 years

b.. 6 years

c.. 7 years

d.. 9 years

slide82
81.. Under the Securitization process the debenture

a.. To carry interest which cannot be less than one and half percent above the Bank Rate as on the date of issue of the debentures

b.. To carry interest which cannot be more than one and half percent above the Bank Rate as on the date of issue of the debentures

c.. To carry interest which should be equal to the Bank Rate as on the date of issue of the debentures

d.. Not to carry any interest

slide83
82.. XZY bank has decided to dispose off the security to a Securitization company BDG for consideration. The debtor being a Limited company (RTU(P) Ltd.,). XZY has decided to give a notice to the debtor.

a.. XZY to give notice to ROC as well

b.. XZY need not give any notice to ROC

c.. Giving notice is not compulsory

d.. Giving notice is optional and hence there is no need for XZY to give a notice to ROC

slide84
83..If there is a dispute among the bank, securitization company and the qualified institutional buyer, then the same to be settled by conciliation or arbitration as provided in the

a.. Reserve Bank of India Act

b.. SARFAESI Act

c.. Arbitration and Conciliation Act

d.. Both a & c

slide85
84..An institutional investor MNG wish to transfer the security receipt (Which has an undivided interest in the financial asset) to MVN.

a.. Registration under the Registration Act required.

b.. Registration optional

c.. Registration need not be insisted.

d.. Registration of Security receipts does not arise.

slide86
85..If the cause of default in a unit is any mismanagement or lack of expertise on the part of the existing management, the securitization or reconstruction company has the powers to take over the management or change the management.

This power can be exercised even when there is no default

slide87
86.. The power given to the secured creditor, as creditor has overriding effect over the provisions related to mortgage in

a.. The Registration Act

b.. The Contract Act

c.. The SARFAESI Act

d.. The Transfer of Property Act

slide88
87..The Securitization company can set up separate trusts scheme wise and act trustees for such schemes as provided in the Securitization Companies and Reconstruction Companies (Reserve Bank) Guidelines and Directions,2003. The beneficiaries of such trusts are

a.. Debenture holders

b.. Lending bankers

c.. Debtors

d.. None of them

slide89
88...Acquisition of financial asset from the originator, by Securitization or reconstruction company is known as

a.. Reconstruction

b.. Securitization

c.. Transfer of Assets

d.. Purchasing

slide90
89.. Securitization company is a company registered under the Companies Act,1956 for the purpose of securitization. It also needs registration from RBI under the provisions of SARFAESI Act.

.. Security agreement includes an agreement, instrument or any other document or arrangement under which security interest is created in favor of secured creditor

slide91
90.. The minimum capital requirement for securitization or reconstruction company, at the time of registration is

a.. Rs. 30 Crore

b.. Rs. 75 Crore

c.. Rs.100 Crore

d.. None of the above

slide92
91..TT has created a mortgage by way of deposit of title deeds with the secured creditor bank JJ. This represents

a.. Security Receipt

b.. Secured Debenture

c.. Security Agreement

d.. Secured Debt

slide93
92..Secured debt means a debt which is secured by any security interest.

..Secured Asset means the property on which security interest is created.

.. The powers given by SARFAESI Act for enforcement of securities are against secured assets only

slide94
93..Security Receipt is issued

a.. To Debtor by the Secured Creditor

b.. To Qualified Institutional buyer by the Reconstruction Company

c.. To Securitization Company by the Secured Creditor

d...To Securitization company by the Reconstruction company

slide95
94. .Which one is appropriate. (SARFAESI)

a.. RJS is the institutional investor and will receive Bonds in lieu of Debentures

b.. TRK is the Securitization company will issue Security receipt as well as Debentures

c.. GU is the Secured creditor and will receive security receipt from the secured debtor

d.. JNS a borrower of the bank will handover Debenture in lieu of payment towards outstanding

slide96
95.. Depending on the nature of security asset RBI has the powers to specify different amounts of owned funds for different companies.

..The company can formulate separate schemes for acquisition of financial asset.

.. The securitization or reconstruction company can act as trustees for such trusts and manage the assets held in trust.

slide97
96..STV a Securitization and Reconstruction company wish to have funds by way of deposits.

a.. They can approach public for the same.

b.. Cannot raise funds by way of deposits

c.. If need arises with the permission of RBI

d.. They can raise funds by way of Deposits on Private placement basis only.

slide98
97..The Securitization or reconstruction company can acquire financial asset without execution of any deed of assignment or transfer in its favor by the concerned bank or the financial institution.

.. Assignment is complete on the acquiring company issuing debenture or bond and incorporating therein the terms and conditions of acquisition.

slide99
98.. As per RBI guidelines,

a.. an acquisition of funded assets should not

include take over of outstanding commitments,

if any, of any bank or financial institution to lend

further.

b.. terms of acquisition of security interest in non-

fund based transactions should provide for the

relative commitments to continue with bank or

financial institute till demand for further funding

arises

slide100
99..Which one is correct (Securitization matter)

a.. Security receipt is not in favor of investor

b.. Security receipt is issued with permission from

Company Law Board

c.. Security receipt can be transferred by the

secured creditor

d.. Security receipt is issued in favor of the institutional investor

slide101
100..Bank F decides that the financial asset now be acquired by the securitization company VR. The Asset was given as security by L , an individual. In such an event, a notice of such development to be given to

a.. L and such notice is not compulsory.

b.. Such notice is not optional

c.. The Obligor, which is compulsory as per the Act

d.. VR

slide102
101.. If the obligor is a company there is no need for modification of charge, when the notice regarding acquisition of financial asset by a securitization company, is not given to the debtor company.

However, if such notice is given to the obligor company, then notice to the Registrar of companies becomes essential.

slide103
102.. Bank J had advanced to U who had defaulted leading to a securitization company acquiring the financial asset. In fact no notice has been issued to U. After some time, U remits some amount towards his dues to J from where he had availed the financial facility.

a.. J to retain the funds

b.. J has an obligation to remit to the securitization company

c.. J first of all should not accept such payment since his contract with U is over on account of securitization transaction.

d.. J has to find out the reason why U had not paid earlier when the liability was outstanding with them.

slide104
103..The securitization or reconstruction company raises funds for acquisition of asset by issue of security receipts. Public/individual investors are barred from investing in a securitization or reconstruction company by the Act.

.. Realization of the asset is held and applied towards redemption. i.e., repayment of investments as assured while issuing the security receipt.

slide105
104.. In case there is no realization and repayment by the securitization or reconstruction company, then the qualified institutional buyers are entitled to call a meeting of all qualified institutional buyers making investments in that scheme and the resolution passed in the meeting.

a.. The first institutional buyer has the right to call for such meeting

b.. The qualified institutional buyers holding not less than 75%

of the total value of security receipts has the right

c.. Any one of the Institutional investor who takes the lead gets the priority

d.. The Institutional Investor identified and nominated by RBI for this purpose has the right

slide106
105..NPN has got a security receipt from a securitization company called BCB. NPN wish to retain the security receipt. Then

a.. Such security receipt need not be registered

b.. Such security receipt has to be registered

c.. Such security receipt cannot be transferred

d.. Such security receipt has to be retained by NPN who is the original institutional investor and hence there is no question of registration / non registration.

slide107
106..Asset reconstruction means acquisition of any right or interest of any bank or financial institution in any financial asset for the purpose of realization. Powers to take measures for asset reconstruction are given without any prejudice to the provisions contained in any other law
slide108
107.. The SARFAESI Act is silent about the grounds or reasons on the basis of which action of acquisition can be taken. Therefore, loan agreements between bank/financial institution and the borrower are required to be taken into account as provisions of this do not have overriding effect on existing contracts and laws.
slide109
108.. When the asset is acquired for reconstruction there is limit of six years for such reconstruction.

a.. Correct

b.. Incorrect

c.. Not 6 years but 5 years

d.. It is 7 years and not 6 years

slide110
109..RTM a Securitization company is taking over the financial asset from the secured creditor BB. Then BB will get

a.. Debenture

b.. Security Receipt

c.. Commitment

d.. None of these

slide111
110..Which one is incorrect

a… At the time of enforcing securities as per the provisions of SARFAESI Act, the Securitization company may itself acquire secured assets for use or resale, if such resale is through a public auction.

b.. The Securitization company is permitted to set up trusts who can issue security receipts.

c.. While issuing security receipts detailed disclosures are not required to be made by the Securitization company

d.. While issuing security receipts detailed disclosures are required to be made by the reconstruction company.

slide112
111..A Securitization company can act as a receiver
  • If appointed by any Court
  • If appointed by any Tribunal
  • If appointed by the Central Government
  • Either a or b
slide113
112..Which one is correct (Securitization aspect)

a.. During the planning period (which is 12 months) an asset can be classified as Standard Asset

b.. Non performing Asset is linked to the security’s strength or weakness and not to over due period

c.. Maintaining capital adequacy optional

d.. Raising funds by way of deposits not prohibited

slide114
113..Provisions of mandatory arbitration and conciliation not applicable to the dispute by or against

a.. Secured Creditor

b.. Obligor

c.. Qualified Institutional Investor

d.. Securitization or Reconstruction Company

slide115
114..Who has the powers to issue guidelines under the SARFAESI Act

a.. SEBI

b.. RBI

c.. Central Government

d.. Law Ministry

slide116
115 ..Under the SARFAESI act a secured creditor can enforce the security interest created in his favor without the

INTERVENTION

of the Court or Tribunal.

..The act deals with how the notice to be given by the secured creditor asking for repayment of the out standings.

slide117
116..The secured creditor bank to give a notice asking the debtor to clear the liability in full within 60 days from the date of notice.

.. The above is applicable to such debtors who have defaulted and classified as NPA.

.. There is no bar for the creditor to seek the other legal remedies such as resorting to filing of suit in a competent court

slide118
117..Identify which one is not incorrect. (SARFAESI Act)

a.. Notice as per the provisions of the act to be given to the Creditor.

b.. Notice as per the provisions of the act is a statutory notice.

c.. The Act does contemplate a reply form the borrower to the notice.

d.. When the offer of sale of property is accepted by the purchaser and the secured creditor accepting the offer confirms the sale, the purchaser need not deposit any token deposit of the offer price.

slide119
118.. Bank DT has decided to invoke the relevant provisions of the SARFAESI Act, by giving the first notice calling for clearance of the dues. Then as per Sec 13(2) of the SARFAESI Act the first notice to be given asking for clearance of full liability within

a.. 30 days

b.. 60 days

c.. 60 days from the date of notice

d.. 60 days from the receipt of notice

slide120
119.. Debtor DD has been asked to repay outstanding liability of Rs.25.73 lacs (as per provisions of SARFAESI Act) by his Secured Creditor banker KK. DD has sent a reply in writing giving his side’s version. The bank responded to the notice and made their position clear. Based on that reply, DD wish to file an appeal

a.. in the high court

b.. in the DRT

c.. Not possible / nor permissible

d.. In the appropriate court for their intervention

slide121
120.. For a Public Sector bank an Authorized Officer

a.. General Manager

b.. At least a Chief Manager

c.. Senior Branch Manager

d.. As identified and nominated by the Board of Directors.

slide122
121..The secured creditor in an anxiety to recover his funds would like to publish a possession notice without issuing the first notice as per the relevant provisions of the SARFAESI Act.

a.. Not Permissible

b.. Permissible

c.. Not necessary to issue any notice before releasing the possession notice in a leading newspaper

d.. It is left to the Authorized Officer to take appropriate action like issuing of possession notice to safe guard the interest of the lending banker.

slide123
122..For classification of any account as NPA it is important that the classification is done as per

A.. Directives of Head Office of the Bank concerned

B.. Viewpoints of R B I

C.. Guidelines of the Concerned Bank’s Corporate Office

D.. None of these

slide124
123..An authorized officer issues the second notice as per the provisions of the SARFAESI Act known as

a.. Recalling

b.. Possession

c.. Take Over

d.. Auction

slide125
124..If the offer of sale of property is accepted by the purchaser and the secured creditor confirms then the purchaser has to deposit

a.. 25%

b.. 75%

c.. 50%

d.. No such pre condition

slide126
125..Which one is correct,

a.. The authorized officer has to publish possession notice in two leading newspapers.

b.. Both papers should be in vernacular language

c.. Before 60 days of sale of immovable property the borrower should be given notice about the sale

d.. If the price of secured asset is coming less than the reserve price, the authorized officer to sell the asset at a lower price with the consent of creditor only and not that of the debtor

slide127
126..The authorized officer is authorized to issue sale certificate. Such certificate is conveyance of immovable property and requires stamping as per the provisions of Stamp Act.

a.. True

b.. False

c.. Relevant State Laws

d.. Central Laws

slide128
127.. As the powers of enforcing securities need to be exercised prudently, fairly and with due care and caution the Rules framed under SARFAESI Act provide that Authorized Officer should be of the level equivalent to Chief Manager of a public sector bank or equivalent or any other authorized person exercising powers of superintendence, direction and control of the business or affairs of the creditors, as the case may be
slide129
128..For taking possession and then sale of immovable property, the secured creditor is required to serve a possession notice on the borrower and by affixing the possession notice on the outer door or at the conspicuous place at the property.

..The authorized officer is required to publish the possession notice in two leading newspapers, one of which should be in vernacular language.

slide130
129..Kamath is the Authorized officer of a bank. The price for secured asset (Flat) is coming less than the reserve price, then Kamath decides to sell the asset at a lower price to the highest bidder. Under the circumstances

a.. The decision of the Authorized Officer cannot be questioned and his decision will be final

b.. He can take independent decision

c.. With the consent of the borrower and the secured creditor, he has to take his decision

d.. Without consulting any one he can take his own decision

slide131
130..When the secured creditor is required to take possession or control of the secured asset or to sell such secured asset, he can take the help of the Chief Metropolitan Magistrate or District Magistrate.

..For seeking their help a request in writing is required.

..To approach the authority within whose jurisdiction the secured asset or documents related to it are situated.

slide132
131..When the secured creditor takes over the management of business of a borrower, he may publish a notice in a newspaper published in English language and in a newspaper published in Indian language in circulation in the place where the principal office of the borrower is situated, for appointment of

a.. If the borrower is a company as defined in the Companies Act, 1956 to be the directors of such company, or

b.. In any other case, to be the administrator of the business of borrower.

slide133
132.Any person, including borrower, aggrieved by any of the measures taken by the secured creditor or his authorized officer for taking possession of the security may make an application along with the prescribed fees to the Debt Recovery Tribunal having jurisdiction within 45 days from the date on which such measures are taken.
slide134
133..As per the provisions of the SARFAESI Act, the DRT has to dispose off the application preferred seeking justice, within a period of

a.. 30 days

b.. 45 days

c.. 60 days

d.. 90 days

slide135
134..As per the provisions of the SARFAESI act, against the DRT’s order, appeal can be filed to the appellate Tribunal within 30 days from the date of receipt of the order of Debt Recovery Tribunal. The Tribunal has the powers not to entertain such an appeal unless the borrower deposits 75% of the debt claimed by the secured creditor. (Now stands reduced to 50%)

a.. True

b.. False

c.. Neither 75% nor 50 % but 25%

d.. Continues to be not less than 50%

slide136
135..A secured creditor is seeking justice under the provisions of the SARFAESI Act. Stage is set for preferring an appeal before the DRT. The amount in dispute is Rs.7.87 lacs

a.. DRT does not have the power to entertain such appeal

b.. Since jurisdiction of DRT is Rs.10 lacs and above what is stated in (a) is appropriate

c.. Since it is SARFAESI matter, DRT will have to take up the appeal

d.. Such appeals to go to Civil Court and not to DRT in view of the claim amount (which is less than Rs.10 lacs)

slide137
136.. SARFAESI Act is not applicable to

a.. Urban Co –operative Bank

b.. Nationalized Bank

c.. State Bank of India Associate Bank

d.. None of these

slide138
137.. The security asset has been sold then the proceeds to be appropriate at first

a.. Towards payment of cost, charges and expenses for the preservation and protection of securities including payment of appropriate insurance charges and so on

b.. Towards legal charges incurred by secured creditor

c.. Towards the satisfaction of dues of the secured banker

d.. Towards payment of fees to the Authorized Officer and his team of officials and support staff

slide139
138..B has given his personal guarantee to a loan taken by a debtor D. The loan was provided by Bank G. As security D gave his asset (hypothecation). Since the loan became NPA, G took up Securitization measures.

a.. B can object that SARFAESI Act provisions not applicable to him

b.. B cannot object since the SARFAESI Act provides that the Creditor can also call for payment due to the borrower from the third party

c.. B can object that SARFAESI Act not applicable to him and hence the secured creditor cannot seek remedy under the Act when a guarantor is involved

d.. B cannot object to the action of the secured creditor since the measures taken are mainly against D

slide140
139.. Registration with Central Registry (Under SARFESI) is not required on certain things and charges. Identify the Act.

a.. Merchant Shipping Act,1958

b.. Patents Act,1970

c.. Designs Act 2000

d.. None of the above

slide141
140..Identify which one is incorrect (Central Registry)

a.. Maintaining the records of the ‘ Registry’ on computers in permissible under SARFAESI Act.

b.. Registration under the Act is in substitution of the other registrations under different laws

c.. Registration under different laws will have priority of charge depending on the provisions of respective registration laws

d.. Creation of security interest to be registered under the provisions of the Act.

slide142
141.. A security interest has been created on 14th of this month. Then it is to be filed with the Central Registrar within

a.. 30 days after the date of transaction

b.. 45 days after the date of transaction

c.. Any time before the next step is taken to dispose off the security

d.. 60 days after the date of transaction

slide143
142.. The particulars required to be filed by the securitization or reconstruction company or the secured creditor, as the case may be. The delay in filing the required particulars can be condoned by the Central Registrar for a period of next 30 days after the first thirty days prescribed, on payment of fees not more than 10 times of the prescribed fees
slide144
143.. A security interest is registered with the central registrar with delay. However the delay was duly condoned and after remitting the fees along with penalty the work was got done. Now it requires to be modified. Then it is not the duty of

a.. Secured Creditor

b.. Reconstruction Company

c.. Secured Debtor

d.. Securitization Company

slide145
144.. The borrower Keshav & sons repaid in full the debt. (Securitization process since taken) Then the secured creditor DD bank has to file

a.. Registration of Security Interest

b.. Modification of Security Interest

c.. Satisfaction of Security Interest

d.. All the above in the same order

slide146
145..A record to be maintained at the Head Office of the Central Registrar to record transactions relating to

a.. Securitization of financial assets

b.. Reconstruction of financial assets

c.. Creation of security interests

d.. All the three

slide147
146..The Central Registrar has received the satisfaction of charge (security interest) from the secured creditor within the prescribed period, then

a.. He can proceed to satisfy the charge

b.. He can call for show cause not exceeding 14 days before proceeding further

c.. He can call for show cause not exceeding 30 days before proceeding further

d.. He has to issue satisfaction certificate within 7 days

slide148
147.. Having cleared the dues with secured creditor (securitization measures since initiated under the Act) the borrower has to file the satisfaction with the Central Registrar within 30 days.

a.. True

b.. False

c.. It is the duty of the Secured creditor

d.. It is not the duty of the Debtor

slide149
148.. RKK a Reconstruction company failed to comply with some of the directions issued by RBI. Then RKK is punishable by RBI with fine not exceeding Rupees Five lacs for the default. For further continuation of the offence an additional fine is up to Rs.2000/= per day of default can be imposed.

a.. Partially Correct

b.. True

c.. Rs.5 lacs and Rs.10000/- per day respectively

d.. Rs.7 lacs and Rs 5000/- per day respectively

slide150
149..The provisions of SARFAESI Act not applicable in respect of

a.. A pledge of movable within the meaning of the Indian Contract Act,1872(sec172)

b.. Any right of an unpaid seller as per Sale of Goods Act,1930 (sec 47)

c.. Any security interest created in an agricultural land

d.. All the above

slide151
150..Which one is incorrect (Provisions of SARFAESI Act not applicable )

a.. Creation of security interest in any vessel as defined within the meaning of the Merchant Shipping Act,1958.

b.. Any case in which the amount due is less than twenty five percent of the principal amount and interest there under.

c.. Any security interest created on an hypothecation of asset worth rs.6.5 lacs

d.. Creation of any security in any aircraft as defined in sec 2 of Aircraft Act 1934

slide152
151.. PNC bank has sold the security after invoking the provisions of SARFAESI Act. After that they wish to proceed in the civil court as the liability outstanding is Rs.6.88 lacs plus accumulated interest of Rs.2.42 lacs

a.. Not possible

b.. Possible

c.. Impossible

d.. Doubtful

slide153
152..Bank C has exhausted the measures of recovery through SARFAESI Act provisions. Still there is a liability of Rs.7.38 lacs to be recovered from GH . The original documents has life.

a.. C can still proceed in the Civil Court by filing a suit against GH.

b.. Since C has opted for Securitization process, has to satisfy with whatever they could get by disposing of the security

c.. Once the SARFAESI Act provisions invoked by the secured creditor and the proceedings over, automatically the creditor looses his further rights against the debtor.

d.. Only C has to worry. Whereas GH need not worry for the balance amount, since the security stands disposed off. Further by opting for Securitization measures C has sealed the other options to recover legally from GH

slide154
153..Bank DOM had lent Rs.9 lacs to one KU, a borrower and obtained security in the possession of the debtor by way of hypothecation. DOM had to use the provisions of the SARFAESI Act which resulted in a recovery of Rs. 7.32 lacs only. Still the outstanding dues works out to Rs. 3.87 lacs. Then DOM

a.. Cannot proceed against KU under Civil Law

b.. Since the bank had availed the support of SARFAESI Act has to forego the balance outstanding

c.. DOM should have applied their mind before invoking Securitization Act

d.. The bank can proceed against the borrower under Civil Law subject to the provisions of Limitation Act as well.

slide155
154..Bank KA has used the Securitization Act provisions and could recover only Rs. 16 lacs . Still they will have to recover Rs.11 lacs plus interest from SR. Fortunately for KA the limitation period on the loan documents is intact.

a.. KA has to seek legal remedy through the Civil Court.

b.. Bank has to seek legal remedy through DRT

c.. KA has to forego since they have already availed the legal avenue

d.. KA may have to approach the borrower straight away and request him to settle the balance amount.

slide156
155. .Secured Creditor Bank Q has succeeded partially recovering the debt. After completion they are left with only personal security of the borrower L. However the loan documents have become time barred . The balance outstanding being Rs.10.83 lacs + interest and other charges.

a.. Q will fail on legal grounds

b.. Q will succeed on legal grounds

c.. Q to move DRT

d.. Q to take up the matter with Banking Ombudsman

slide157
156..Whenever the Government makes a rule under the SARFAESI Act, the rule is so required to be kept before each House of Parliament, while in session for a total period of thirty days. Both the Houses should agree to the rules as framed and they can make modifications therein or decide not to make the rules.
slide158
157..A borrower knows that the bank (secured creditor) is contemplating to seek remedies under the provisions of the SARFAESI act. He decides to approach the court preventing the creditor to proceed accordingly

a.. The borrower would not succeed in his attempt

b.. The borrower would succeed

c.. The court will entertain the borrower’s application

d.. The Secured Creditor can not proceed under the circumstances

slide159
158.. Bank UT has advanced on the security of book debts. Since the payment not forthcoming they would like to proceed against the borrower WX using the appropriate provisions of SARFAESI Act.

a.. Assignment beyond the purview of the Act

b.. Assignment within the purview of the Act

c.. Bank UT can proceed based on (b)

d.. Bank UT can not proceed based on (a)

slide160
159.. Bank B a secured creditor has transferred the security of the debtor LM to the securitization company AY for an agreed sum and obtained debentures. Since B has not got the money, B can

a.. Ask LM to pay

b.. Not ask LM to pay

c.. Not ask LM to pay since in lieu of money they have got the debentures

d.. Ask LM to pay in spite of getting debentures from AY

slide161
160..During the process of Securitization measures, the borrower JH has cleared the entire debt taken from the secured creditor bank BC. There are no other outstanding dues from JH. Then

a.. JH should get all the securities free of charges

b.. BC to release their right on the securities

c.. Both a & b

d.. BC can still hold the securities for the future finance of JH

slide162
161..Identify the one which is appropriate (SARFAESI Act)

a.. The authorized officer has to give a notice 30 days before sale of the immoveable property to the borrower about the sale

b.. There is no need to give a separate notice to the borrower about the sale of immoveable property and no time limit stipulated.

c.. In case of immoveable property, the purchaser has to deposit at least 50% of the amount within a reasonable period

d.. The authorized officer’s duty to obtain Sale certificate from the Registrar and hand over to the purchaser

slide163
162..The date agreed upon by the secured creditors representing not less than three-fourths in value, of the amount outstanding on such date. Any decision taken by such creditors is then binding on all other remaining creditors.

a.. Recorded Date

b.. Record Date

c.. Agreed Date

d.. Appropriate Date

slide164
163..Asset reconstruction means acquisition of any right or interest of any bank or financial institution in any financial asset for the purpose of realization. Powers to take measures for asset reconstruction are given without any prejudice to the provisions contained in any other law.
slide165
164.. If the cause of default in an unit is mismanagement or lack of expertise on the part of the existing management the securitization or reconstruction company has the powers to take over the management or change the management. This power can be exercised even when there is no default.
slide166
165..The SARFAESI Act is silent about the grounds or reasons on the basis of which action of acquisition can be taken. Therefore, loan agreements between bank/financial institution and the borrower are required to be taken into account as provisions of this do not have overriding effect on existing contracts and laws.
slide167
166.. If a complaint is not settled by agreement within a period of one month from the date of receipt of the complaint or such further period as considered by Banking Ombudsman, he can pass an award.

.. He shall be guided by the evidence placed before him, the principles of law and practice, directions, instructions and guidelines issued by RBI from time to time to pass the necessary award.

slide168
167.. A person duly appointed and authorized by a complainant to act on his behalf and represent him before a banking ombudsman, for consideration of his complaint is

a.. An Aggrieved Person

b.. Appointed representative

c.. Authorized representative

d.. Constituted representative

slide169
168..The Banking Ombudsman Scheme is in force wef

a.. 1 January 2002

b.. 1 January 2003

c.. 1 January 2005

d.. 1 January 2006

slide170
169.. E is the NRI having a Non Resident External Account in one of the cities in India. He has sent a remittance. There has been in ordinate delay on the part of his banker in India to credit the proceeds. He had taken up the matter with the bank. The response has been very very poor. E

a.. Cannot take up the matter with Banking Ombudsman

  • Can take up the matter with Banking Ombudsman
  • Since E is not in India he looses the opportunity to avail the benefit of Banking Ombudsman scheme
  • At the most E can once again refer the matter to his banker only and his case is beyond the purview of Banking Ombudsman Scheme
slide171
170..Identify the odd one ( Banking Ombudsman)

a.. Delay in payment of inward remittances

b.. Levying charges with prior intimation to the customer concerned

c.. Non- observance of Reserve Bank of India directives on interest rates

d.. Refusal to open a Recurring deposit account in the name of the minor

slide172
171..A complaint under the Banking Ombudsman scheme can be

a.. Given only by the affected person

b.. Given only by the complainant

c.. Given by the Authorized representative

d.. Any one of the above

slide173
172.. For a Debt Recovery Tribunal, the Presiding Officer holds office for a term of 5 years from the date on which he enters upon his office or until he attains the age of 62 years, which ever is earlier.

a.. Correct

b.. In correct

c.. Not 5 years and 62 years but 3 years and 65 years respectively

d.. Not 5 years but 7 years whereas 62 years of age is correct .

slide174
173..As per the observation of the High Court, the DRT has power to entertain the application for execution of the decree of foreign court.

.. Every application to be filed before the DRT shall be accompanied by appropriate fees.

.. The Tribunal may , on giving opportunity to both the sides of being heard, pass interim or final order for payment of amount including interest thereon.

slide175
174. .A Civil suit which is pending stands transferred to the DRT. Then the fees payable

a.. Will be decided by the DRT

b.. Standard fees to be paid as applicable to a new case referred to the DRT

c.. No fees required to be paid

d.. None of the above

slide176
175..The DRT mechanism is not applicable to dues of

a.. Nationalized Banks

b.. Co-operative Banks

c.. Regional Rural Bank

d.. State Bank of India

slide177
176.. One of the employees of a bank has committed fraud resulting in a recovery of around Rs.13.70 lacs. Then the amount recoverable from him is a debt within the meaning of DRT Act.

a.. True

b.. False

c.. Not treated as a debt

d.. Considered as a debt only

slide178
177..In the ordinary course of business a bank has permitted overdrawing in the current account of the party without a regular over draft limit. The amount outstanding being more than Rs.12 lacs.

a.. It is a debt recoverable under the DRT Act

b.. It is not a debt recoverable under the DRT Act

c.. The question of debt under the DRT Act does not arise because there has not been any limit sanctioned as overdraft facility specifically

d.. It is considered as debt since money is taken by the party

slide179
178..The debt recoverable through DRT has to be

a.. Secured

b.. Clean finance

c.. Unsecured

d.. Any one of the above

slide180
179.. At the time of sanction of the facility and obtaining the finance, the amount was Rs.7.50 lacs. Over the period there has been accumulation and present liability is Rs.11.29 lacs.

a.. Matter can be taken up with DRT.

b.. Matter has to be taken up with Civil Court

c.. Matter can be taken up with DRT after getting proper permission form the Civil Court

d.. None

slide181
180..The Recovery Officer under DRT has to report to

a.. The Manager

b.. The Superior Officer

c.. The Presiding Officer

d.. None

slide182
181.. Presiding Officer of DRT is

a.. Appointed by the Committee of Bankers

b.. Appointed by the RBI

c.. Appointed by the RBI in consultation with Central Government

d.. None of the above.

slide183
182.. Debt Recovery Tribunal is made up of more than one Presiding Officer.

a.. True

b.. False

c.. Not more than one

d.. Depending upon the size more no of Presiding Officers would be decided by the Government

slide184
183.. Which one is correct (DRT)

a.. A person is qualified for appointment as presiding officer of a tribunal if he is, or has been, or is qualified to be appointed as a District Judge.

b.. A person is qualified for appointment as presiding officer of a tribunal if he is, or has been, or is qualified to be appointed as a High Court Judge.

c.. A person is qualified for appointment as presiding officer of a tribunal if he is, or has been, or is qualified to be appointed as a Metropolitan Judge.

d.. None of these

slide185
184.. Under DRT, an Appellate Tribunal has to be headed by

a.. Only One person

b.. Presiding Officer

c.. Chairperson

d.. Both a & c

slide186
185..The Tribunal (DRT) may pass on interim order against the defendant to debar him from transferring or dealing with the property in any manner without the permission of the Tribunal. Such an order may be by way of

a.. Injunction

b.. Stay

c.. Attachment

d.. Any one of the above

slide187
186.. Appeal before the Appellate Tribunal to be disposed off finally from the date of receipt of appeal within

a.. 3 months

b.. 6 months

c.. 180 days

d.. None of these

slide188
187..There is no provision in the DRT Act for further appeal against the order passed by the Appellate Tribunal.

a.. True

b.. Writ Jurisdiction of High Court and Supervisory jurisdiction of High court not barred

c.. Special Leave Petition before the Supreme Court not barred

d.. All the above are correct

slide189
188.. The Correction any clerical or arithmetical mistake in Recovery Certificate has to be done by (Certificate issued by the Presiding Officer)

a.. Concerned Clerk himself

b.. The Presiding Officer of the Tribunal

c.. The Recovery Officer

d.. Any one of them

slide190
189..Bank A has received a notice from a Recovery Officer (DRT) directing the bank to remit a sum of Rs.25000/- lying with them in the account of their depositor R who happens to be the debtor for another bank S. The notice directed A to remit the money to the Recover Officer.

a.. Bank A has to oblige

b.. Bank A need not oblige

c.. Since it is not a Garnishee order by a competent Court Bank A need not oblige

d.. Bank A to ignore otherwise R can take objection

slide191
190..The Recovery officer while carrying out his job, a third party is affected. Then he can file an appeal

a.. Within 30 days

b.. To the Tribunal

c.. Both A& B are correct

d.. Both A & B are wrong

slide192
191..Who is not the public servant as per the Sect 21 of the Indian Penal Code.

a.. The Chairperson of an Appellate Tribunal

b.. A Director of a Public Limited Company

c.. The Recovery Officer

d.. The Presiding Officer of a tribunal

slide193
192.. The DRT issues Recovery Certificate to the applicant. Recovery Officer has to proceed to recover the amount specified in the Recovery Certificate, by adopting

a.. Attachment and sale of movable and immovable property of the defendants

b. Arrest of the defendant and his detention in prison

c.. Appointment of a receiver for the management of the movable and immovable properties of the defendant.

d.. Any one of the above.

slide194
193..Any person aggrieved by the order passed by the Tribunal or deemed to have been passed by the Tribunal under DRT Act, may prefer an appeal to the concerned Appellate Tribunal.

a.. Within 45 days form the date on which copy of the order is received.

b.. Within 45 days from the date of the order

c.. Within 30 days from the date of the order

d.. Within 60 days from the date on which copy of the order is received.

slide195
194.. Bank SK has moved the DRT for justice. Before the final order is passed Bank BY, who had also advanced to the same borrower has approached the DRT for inclusion in the same proceedings.

a.. Permissible

b.. Not permissible

c.. Not permissible since both the contracts are different

d.. DRT would not entertain and advise the bank to file a separate case.

slide196
195..Identify which one is incorrect (DRT matters)

a.. Recovery officer can ask the defendant to furnish by affidavit particulars of his assets.

b.. The defendant can raise a plea before the Recovery Officer about correctness of the amount ordered to be paid.

c.. A counterclaim filed before DRT has the same effect as a plaint in cross-suit.

d.. For the matters for which the Tribunals are empowered the Civil Courts have no jurisdiction.

slide197
196..Under the Bankers Book Evidence Act, the term Judge refers to

a.. Judge of a special Court

b.. Judge of a High Court

c.. Judge of a DRT

d.. Judge of Civil Court

slide198
197..The Bankers’ Book Evidence Act extends to whole of India except the Sate of Jammu & Kashmir,.

..Bankers’ books’ include ledgers, daybooks, cashbooks, account books and all other records used in the ordinary course of business of a bank.

slide199
198..A certified copy of any entry in a Bankers’ Book is received in legal proceedings as conclusive evidence for existence of such entry.

a.. Correct

b.. In correct

c.. It is not Conclusive but prima facie evidence

d.. Support

slide200
199.. For making the order that bank officer should either produce the books of account or appear as witness (as per the Bankers Book Evidence act) can be made by the Court or Judge with out summoning the bank. Such order shall be served on the bank at least 5 days before the same is to be obeyed.

a.. True

b.. False

c.. Not 5 days but 3 days

d.. At least 3 clear working days

slide201
200..If after taking out the copy from the books of the bank, the original books are destroyed in usual course of the bank’s business a further certificate to that effect of having destroyed the book is not necessary.

a.. True

b.. False

c.. The records associated with court matters should never be destroyed

d.. The records before destroying should ( in such cases) have the permission of the competent court

slide202
201..For Compromise or settlement of disputes between parties this system organized under the Legal Services Authorities Act,1987 known as

a.. Lok Adalats

b.. Ombudsman

c.. Arbitration

d.. None of these

slide203
202.. Identify the incorrect one (Lok Adalats)

a.. The monetary ceiling of amounts regarding which civil disputes can be settled under this mechanism is Rs.20 lacs

b.. The monetary ceiling of amounts regarding which civil disputes can be settled under this mechanism is upto Rs10 lacs only

c.. Lok Adalats are not organized under the Lok Adalats Act

d.. There can be an appeal against the award of the Lok Adalat

slide204
203...Consumer Protection Council( identify the incorrect one)

a.. The Collector of the District to be the Chairman of the District Council

b.. State Consumer Protection Council to meet at least 3 meetings every year.

c.. For Central Consumer Protection Council the Chairman will be the Minister in charge of the consumer affairs in the Central Government.

d.. The highest council is the Central Council who has the jurisdiction for the entire country.

slide205
204..The Consumer Protection Act,1986 applies to

a.. All goods and services

b.. Goods for resale

c.. Goods for commercial purposes

d.. Both b & c are excluded

slide206

205..For filing any complaint before a District Forum, State Commission or the National Commission the limitation period is from the date of cause of action.

a.. 1 year

b.. 2 years

c.. 3 years

d.. None of the above

slide207

206.. If the compensation claimed is above Rs.20 lacs but does not exceed Rs1 Crore then the appeals against the orders of any District Forum to be preferred before

a.. The High Court

b.. The State Commission

c.. The Central Council

d.. The National Council

slide208
207..The Consumer Protection Act is not applicable in the State of Jammu and Kashmir.

..The Act is for better protection of the interests of the consumers and for that purpose to make provision for the establishment of consumer councils and other authorities for the settlement of consumers’ dispute.

..The Act is social welfare benefit oriented legislation for the consumer providing self-contained quasi-judicial machinery to provide speedy and simple redressal to consumer disputes.

slide209
208..A dispute where the person against whom complaint has been made, denies or disputes the allegations contained in the complaint.

a.. Complaint

b.. Consumer Dispute

c.. Dispute

d.. Allegation

slide210
209....District Consumer Protection Council to meet as an when necessary. There has to be at least two meetings every year.

a.. Correct

b.. Incorrect

c.. At least One meeting

d.. At least Three meetings

slide211
210..Service of Notice under the Consumer Protection Act could be by way of (identify the incorrect one)

a.. Registered post with acknowledgement due

b.. Speed post

c.. Local courier

d.. Fax

slide212
211..It refers to such goods and services which are claimed to be genuine but they are actually not so.

a.. Defective goods

b.. Inefficient services

c.. Bogus goods and services

d.. None

slide213
212..Identify the odd one (Consumer Protection Act, 1986) Person

a.. An unregistered firm

b.. A co-operative Society

c.. Both a & b

d.. None

slide214
213..A price stated to be a bargain price by reference to an ordinary price or a price at which the product is ordinarily sold or otherwise. (Consumer Protection Act,1986)

a.. Agreed Price

b.. Arrived Price

c.. Final Price

d.. None

slide215
214..Under the Consumer Protection Act,1986, he is the person, in relation to any goods means a person who sells or distributes any goods for sale and includes the manufacturer thereof, and whereas such goods are sold or distributed in package form, includes the packer thereof.

a.. Packer

b.. Trader

c.. Seller

d.. Final Distributor

slide216
215..In one of the cases relating to consumer dispute, the addressee has refused to take delivery of the notice (not the approved method of serving) and in such cases the responsibility lies with whom to confirm that the notice had been duly served to the concerned addressee

a.. District Forum

b.. State Commission

c.. National Commission

d.. Any one of them (as the case may be)

slide217
216.. Which one is correct (Consumer Protection Act. 1986)

a.. All notices required to be served on the opposite party are deemed to be sufficiently served if addressed to the place where business or profession is carried on by him

b.. All notices required to be served on the opposite party are deemed to be sufficiently served if addressed to the place, where he permanently resides

c.. All notices required to be served on the opposite party are deemed to be sufficiently served if addressed to the place where he is presently living

d.. All notices required to be served on the opposite party are deemed to be sufficiently served if addressed to the place which is furnished in the records as his address

slide218
217..For the trial of offences under the Consumer Protection Act,1986, the District Forum, State Commission or National Commission as the case may be deemed as and is conferred with the powers of

a.. High Court Judge

b.. First Class Judicial Magistrate

c.. Supreme Court Judge

d.. Metropolitan Magistrate

slide219
218..In the interest of Justice the National Commission may transfer, on the application of the complainant or on its own motion, any proceeding at any stage from one District Forum of one State to a District Forum of another State and from one State Commission to another State Commission. (Consumer Protection Act)
slide220
219..National Commission’s chief is known as the President. (Consumer Protection Act)

a.. He is appointed by the Central Government after clearance from the Parliament

b.. He is appointed by the Central Government who need not consult any one

c.. He is appointed by the Central Government in consultation with the Chief Justice of India

d.. He is appointed by the President of India

slide221
220.. A person who is or has been Judge of a High Court, who shall be the President of the State Commission. (Consumer Protection Act)

a.. His appointment need not be made in consultation with the Chief Justice of the Supreme Court

b.. His appointment need to be made in consultation with the Chief Justice of the High Court

c.. Both a and b

d.. None

slide222
221..Which one is correct (Consumer Protection Act)

a.. Any aggrieved person by the order passed by the District Forum cannot prefer an appeal to the State Commission within a period of 30 days from the date of the order

b.. The State Commission do not have the powers to condone the delay in preferring an appeal.

c.. Every member of the State Commission shall hold office for a term of 5 years or up to the age of 65 years, whichever is earlier.

d.. Every appointment as a member of the State Commission has to be mad by the State Government on the recommendations of the Chief Justice of the High Court

slide223
222..Consumer Protection Act (For appointment as a member of the State Commission has to be done by the State Government on the recommendations of the Selection Committee)

a.. The President of the State Commission, who shall be the Chairman of Selection Committee

b.. Secretary, Law Department of the State, who shall be the member of the Selection Committee

c.. Secretary-in-Charge of the department dealing with Consumer Affairs in the State, who shall be the member of the Selection Committee

d.. All the above mentioned persons

slide224
223..Every proceedings before the District Forum shall be deemed to be a judicial proceeding within the meaning of appropriate provisions of the Indian Penal Code and the District Forum shall be deemed to be a Civil Court for the appropriate provisions of the code of Criminal Procedure
slide225
224..In a proceedings (District Forum) the President and one member differ on one point

a.. The point of difference to be ignored

b.. The view point of the President will prevail

c.. The point of difference to be taken into consideration for proper discussion followed by appropriate decision

d.. None

slide226
225..A Bench (National Commission) may be constituted by

a.. Supreme Court

b.. President of the National Commission

c.. High Court

d.. Committee of High Courts Judges headed by the Judge of the Supreme Court

slide227
226.. An interim order has been passed by the State Commission for attachment. If within a certain period of attachment of property, the person does not comply with the order, the attached property is sold. Identify the period specified.

a.. 30 days of the order

b.. 3 months

c.. No such specific period but at the discretion of the respective forum / Commissions

d.. None of these

slide228
227.. Debtor R has executed a Demand Promissory Note and a Hypothecation agreement to Bank BOM. Then the bank has made available the finance.

a.. Valid contract

b.. Invalid contract

c.. Quasi contract

d.. No contract

slide229
228.. J the Debtor had executed a demand promissory note on 16.03.2006. Identify the correct limitation date.

a.. 16.03.09

b.. 15.03.09

c.. 17.03.09

d.. None of the above

slide230
229 .. V & S have taken a loan from bank T, by executing a demand promissory note and other documents jointly.

a.. S is not the promisor

b.. V is the promisor

c.. S & V are promisors

d.. T,S &V are promisors

slide231
230.. D had executed an acknowledgment of debt on 22.02.08 for the Demand Promissory Note executed on 20.12.05 and handed them over to the Creditor W on the respective dates. Find out the exact limitation date available to W to proceed legally.

a.. 22.02.11

b.. 20.12.08

c.. 19.12.08

d.. 21.02.11

slide232
231..Period of limitation is always in relation to a document which entitles the beneficiary to take action in a court of law. Period of limitation means the period of limitation prescribed for any suit, appeal or application by the Schedule, prescribed period means the period of limitation computed in accordance with the provisions of this Act (Limitation Act,1963)

Suit does not include an appeal or an application

slide233
232.. Identify the limitation period not three years in respect of

a.. A Demand Promissory Note

b.. An Hypothecation Agreement

c.. A Mortgage Deed

d.. An Acknowledgement of Liability

slide234
233.. B the borrower of bank C had executed a DPNote on 22.04.05. When the bank wanted to obtain an acknowledgement of debt they came to know he has gone out of the country since 27.05.07 and returned only on 12.10.08.

a.. Bank C had lost the opportunity to sue B filing a suit

b.. Bank C has not yet lost the legal right to file a suit

c.. Bank C should have taken recourse on or before 27.05.07

d.. Since the debt is time barred, Bank C has lost its legal right to recover

slide235
234.. While calculating the limitation period there has been an error resulting in approaching the court on the next day of the reopening day of the court after court holidays.

a.. Plaintiff may not succeed

b.. A suit may be admitted

c.. The suit should have been filed on the reopening day

d.. There is no such odd and fast rule

slide236
235.. Bank G has issued a Bank guarantee. The due date (expiry date) being 31.10.08. In case of dispute identify the limitation date. Guarantee not invoked by the beneficiary.

a.. 3 years from the due date

b..12 years from the due date

c.. No limitation date since guarantee not invoked

d.. Usually the limitation period in these cases should be from the date of claim only

slide237
236.. Bank SX has obtained loan documents from the borrower/s (including the surety) on 13.03.06. Borrower D and Guarantor J.

D has executed a DP Note and J a guarantee agreement on the said date. Then the limitation period

a.. 3 years against both of them

b.. 3 years against only D

c.. 3 years against only J

d.. None

slide238
237.. The guarantor U refused to pay when asked to pay by the creditor H. The main borrower being C.

a.. H can still proceed against U

b.. H has to forego his legal right against U

c.. H cannot proceed against both C & U

d.. None

slide239
238..Bank D has not been successful in getting the limitation period on a DP Note executed by L. The three years period expired on two days ago. D

a.. Has to forego the legal right

b.. May depend upon the repayment (if made) by L or his authorized agent subject to certain conditions

c.. May not succeed

d.. May fail and L will receive the benefit

slide240
239.. There has been a part payment made in the borrower’s account when the document was having life. Relying on that the Bank wanted to proceed legally. On verification it has been found that the voucher accompanied the payment has not been signed by any one and the amount is only Rs.100/- Under the circumstances

a.. Still the bank can proceed

b.. Bank cannot proceed

c.. What is required is part payment and hence Bank would succeed

d.. Bank has the discretion to proceed on the basis of the above payment

slide241
240.. A time barred debt can be revived as per the provisions of the

a.. Limitation Act

b.. Negotiable Instruments Act

c.. Banking Regulation Act

d.. None

slide242
241.. A person has taken an installment loan . The loan has to be repaid on yearly basis for 10 years. The documents executed on 01.01.2002. The first installment started wef 01.01.2004 on wards. The borrower has paid till 01.01.07. Bank has not obtained any Acknowledgement of debt so far.

a.. Bank has to forego the outstanding amount

b.. Bank cannot file a suit

c.. Since the debt is time barred bank will loose its legal rights

d.. None

slide243
242..Identify the assessment year as per the IT Act for the financial year ending 31st March 2008.

a.. 2007-08

b.. 2008-09

c.. 2009-10

d.. None

slide244
243..The income accruing or arising, to a person is taxed on the basis of ‘Assessment Year’. The term Assessment Year represents the period of 12 months beginning from 1st April every year. Identify the person mentioned

a.. An assessor

b.. An assessee

c.. A tax payer

d.. An employee

slide245
244..C is the NRI customer of Bank Q. He has earned income in his NRO account. Then his banker is obliged to deduct tax at source and remit to the concerned ITO

a.. True

b.. NRI customer is not taxed

c.. In view of (b) the bank need not deduct TDS

d.. In addition to (a) unless otherwise the NRI produces a proper order from concerned ITO exempting, the banker has to deduct TDS and remit which is statutory.

slide246
245.. Which statement is correct (Income Tax)

a.. NRE deposit interest attracts Income Tax

b.. FCNR interest is taxable

c.. NRI and persons who are not ordinarily resident in India, any income derived abroad is not taxable and only income accruing or arising in India is liable to tax in India

c.. NRO interest earned beyond the purview of IT.

slide247
246..Banking Cash Transaction Tax which was introduced wef 01.06.05

a.. Still in vogue

b.. Since withdrawn

c.. Since modified

d.. Being continued in selected areas

slide248
247.. Identify the odd one (Service tax for Banking Transactions)

a.. Lockers

b.. Interest income of the bank

c.. Advisory services

d.. Demand Draft issuing

slide249
248.. Service Tax is not applicable for import of goods.

a.. Appropriate

b.. Not appropriate

c.. The correct position is it is applicable for import of services

d.. It is applicable to export of services and not for import

slide250
249.. Advance tax need to be paid in a single stroke.

a.. True

b.. False

c.. It has to be paid in 4 installments

d.. There is no concept called Advance Tax

slide251
250..A person deducting TDS has to file a return of TDS

a.. Monthly

b.. Bi monthly

c.. Half yearly

d.. None

slide252
251.. A is earning an annul income of less than Rs.1.00 lac. He has deposits (Term) which gives him an annual interest of Rs.27500. A has informed the Bank not to deduct tax.

a.. His bank has to carry out his request

b.. Unless he gives an appropriate form, the bank will have to deduct TDS

c.. As a part of Customer Service the bank has to support the customer

d.. Bank is not obliged to deduct TDS since the total income inclusive of interest not coming under tax bracket

slide253
252..Banks generally help their customers in filing their individual IT returns

a.. True

b.. Not True

c.. Banks do not undertake this type of services

d.. Unless specifically authorized the Banks do not undertake such services

slide254
253..Identify which is not a valid contract.

a.. Proposal and acceptance

b.. Consideration

c.. Free consent

d.. Agreement without consent

slide255
254.. D has bailed his goods with R. Who is responsible in case there is a loss to the goods bailed.

a.. R

b.. R. Provided he has not taking adequate care

c.. Not R but D

d.. D

255 under pledge the possession is with the
255..Under Pledge, the possession is with the

a.. Borrower

b.. Creditor

c.. Owner

d.. Debtor

256 consideration not required for
256..Consideration not required for

a.. An agency

b.. Safe Custody Article

c.. Mortgage

d.. Safe Deposit locker

slide258
257.. B has sold goods to A on credit basis. The sold goods are under the possession of A. Who has the right of re sale

a.. Obviously A

b.. Only B

c.. None of them

d.. With the permission of A, B has the right

slide259
258.. Contract could be

a.. Valid

b.. Invalid or Void

c.. Voidable

d.. Any one

slide260
259..A father of a minor has availed a loan on the security of Minor’s term deposit

While obtaining the loan documents the banker has overlooked to record the purpose of the loan even though such a paper has been obtained.

a.. Bank’s interest will not be protected

b.. Set of documents will support the banker

c.. Bank’s interest need not depend on that particular issue

d.. At least in future the banker has to be careful

slide261
260.. A loan has been taken by O. There is no security. O dies during the loan is pending. Bank B who has given the loan cannot get back the dues.

a.. Since O died the contract has come to an end

b.. Bank B may get back the dues by taking appropriate steps

c.. Bank B should have properly secured their finance

d.. Bank’s negligent will cost them

slide262
261.. E has approached bank S for a finance on the strength of the Life Policy. The bank has considered the request and loan granted after competing the formalities. In case E survives on the maturity date of the policy, who will get the money from Life Insurance Company.

a.. E

b.. Assignee of E

c.. Nominee of E

d.. Assignor

slide263
262.The right of subrogation is available for

a.. Guarantor

b.. The Insurance Company

c.. Both a & b

d.. Only the Surety

slide264
263.. A person takes an insurance policy on his life. After receipt of the policy documents ( within 3 days from the date of taking the policy) unfortunately he dies. The insurance company is

a.. Not obliged to settle the claim

b.. Obliged to settle the claim

c.. Having the right to probe into the matter before taking decision

d.. Not required to settle the claim since the policy has not completed the minimum period of 3 years

264 to receive rents and profits arising from the property
264.. To receive rents and profits arising from the property

a.. Simple Mortgage

b.. Usufructuary Mortgage

c.. English Mortgage

d.. Mortgage By way of Conditional Sale

slide266
265..Bank X has lent money to R on the personal guarantee of Y. X took a demand promissory note from R and a guarantee agreement from both Y & R. Among other contents, the guarantee agreement protected the bank with special clauses for which Guarantor Y has given his consent. When R failed to repay, X asked Y to repay the loan. He promptly refused and advised the bank to approach R who only has taken the money. After trying and exhausting all the remedies against R, then only X can approach him and not before that, that is what Y told the bank.

a.. The stand of Y is not incorrect

b.. The stand of X is appropriate

c.. What Y revealed has substance which would protect him

d.. X would still succeed if they proceed against Y even without

proceeding against R based on the guarantee agreement contents

slide267
266..Where there are co-sureties, a release by the

creditor of one of them does not discharge the

others. Also, the surety released does not become

free from his responsibility to the other sureties.

..A surety has the right of Subrogation.

..Any guarantee obtained by means of

misrepresentation made by the creditor is invalid.

..Any guarantee which the creditor has obtained by

means of keeping silence as to material circumstance is also

invalid.

slide268
267..JN, a Director of the Private Limited company had given his personal guarantee for the credit facilities extended to the company. After some months he left the company (resigned ) and joined some other organization. While leaving the company, he has intimated in writing to the bank that he is resigning from the company. Later on the Bank decided to proceed against the company for recovery. They have decided to implead JN as well

a.. Bank will be in order in doing so

b.. Since JN is no more part of the debtor, Bank cannot implead him

c.. Since Bank is the creditor and JN has not been replaced by any other guarantor bank can do so

d.. Bank will not succeed in proceeding against JN. Instead they should concentrate on the company and other existing directors

slide269
268..Z has appointed U as his agent In turn U has appointed L (another person) to look after the affairs of Z for whom U has been appointed. Then L is

a.. Not a Principal

b.. Sub Agent

c.. Substituted Agent

d.. Manager

slide270
269.. No consideration is necessary to create an agency.

.. In an emergency, an agent has authority to do all acts to protect his principal form loss as would be done by a person in his own case.

.. An agent can detain money received by him on account of goods sold, even if all the goods consigned to him for sale are not sold.

slide271
270.. A bank as a collecting banker has

misplaced the cheque accepted for collection.

The customer when he approached to know

about the realization of the cheque, then only

the bank could realize it has misplaced the

Cheque.

a.. The bank is responsible

b.. Till the cheque is realized or returned, the bank is not responsible.

c.. If the cheque had been purchased then the bank would have been responsible and not for collection item.

d.. The bank is not responsible

slide272
271.. Bank D has been entrusted the assignment of getting the payment from an upcountry bank branch. D has sent the cheque in question. After that at the request of the Payee E, D has purchased the cheque already sent. Identify the role of D.

a.. Agent for E

b.. Principal for E

c.. Collecting Banker

d.. None

slide273
272.. The agent has been authorized by the Principal to spend a sum up to Rs.7000/- in the ordinary course of business. The agent spent Rs.7200/-

a.. Agent is well within the powers conferred

b.. Agent has to seek approval

c.. Agent has to seek ratification

d.. Agent can show the expenditure as Rs.6900 /- and Rs.300 to avoid complications

slide274
273.. D is having a Savings Bank account. He wish to appoint another person V to operate the account in his absence. Then

D can give

a.. Power of Attorney in favor of V

b.. A Letter of Authority in favor of V

c.. Either one

d.. None

slide275
274..Whether a stipulation in a contract of sale is condition or warranty depends on the types of contract. Even if the parties have agreed that a stipulation is a warranty, in fact, it may be a condition if it is the basis of the contract.

.. If the sale of goods is by description, there is an implied condition that the goods shall correspond with the description.

slide276
275.. A B C & co a partnership firm has a current account with bank Y. The account is operated by any one of the partners. A cheque (open cheque) received signed by one of the partners B, representing the firm and in favour of B. Another cheque signed by C representing the firm favouring Self.

a.. The bank is in order in paying both the cheques

b.. The bank is not in order in paying both the cheques

c.. The bank is in order in paying the cheque signed by B and not by C

d.. The bank is in order in paying the cheque signed by C and not by B

slide277
276..Bank E has got the documents executed by a Limited Company. However they have overlooked to get the Common Seal affixed on these documents. A reference to the Articles of Association has revealed that affixing the Common Seal for the documents has not been mentioned. In other words, the Articles of Association is silent with regard to the same.
  • Bank will get protection
  • Bank cannot recover the dues based on the documents so executed without common seal
  • Affixing of Common Seal is compulsory in such cases.
  • Affixing of Common Seal is not compulsory unless it is specifically stated in the Articles of Association
slide278
277..When a company exercise its powers to promote and/or realize any of its objects stated in the Memorandum of Association, it is known as Intra vires ( i.e., within the powers of ) the company.

.. Any other act of the company which is outside the scope of the objects clause of the Memorandum of Association is called Ultra vires(i.e., beyond the powers of ) the company

slide279
278.. Doctrine of Constructive notice states that every outsider is assumed to have read the Memorandum of Association and Articles of Association.

.. Doctrine of Indoor Management lays down that the outsiders are not required to see the compliance of internal regulations of the company.

slide280
279..A company has been formed for promotion of science. They would like to have the name without Private Limited. Then the permission is to be given by

a.. Company Law Board

b.. Registrar of Charges

c.. Registrar of Companies

d.. None

slide281
280..Capital Clause in the Memorandum of Association to discuss about the

a.. Authorized Capital

b.. Issued Capital

c.. Subscribed Capital

d.. Paid up Capital

slide282
281.. The memorandum of association is a dominant instrument as is states the purposes of the company and the reasons for which it has come into existence.

.. The articles of association are always held to be subordinate to the memorandum of association because the articles of association are merely the internal regulations of the company while the memorandum of association states the objects of the company beyond which the company cannot go.

slide283
282.. A Private Limited Company wish to change its Registered Office to another State. Then

a.. They can do so and intimate Registrar of Companies of both the States

b.. They have to pass a Special resolution and with the sanction of Company Law Board they can proceed further

c.. The post facto approval from the Central Government (Law Ministry ) essential

d.. Matter to be referred to Company Affairs Authority for guidance

slide284
283..Bank H has not fully gone through the contents of the Object Clause of the Memorandum of Association (MA) They lent to the company for a particular purpose. After the loan has been availed by the company, it came to the knowledge of the bank, that the company is not dealing with the goods (as per the MA ) for which finance has been given.

a.. Bank need not worry

b.. Company, if they do not pay, can be insisted legally

c.. Bank can still get the money, since they have taken necessary loan documents

d.. Bank need to worry

slide285
284..A person is deemed to become a member of a company if he allows his name to be put on the register of the members or otherwise holds himself out as a member even if there is no agreement to become a member.

a.. Membership by Acquiescence

b.. Membership by Association

c.. Special Member

d.. Share Transmission

slide286
285.. Shares had been issued in the name of F. He has recently died. F had not nominated any person. Then his wife J (only legal representative) wish to become the share holder.

a.. Transfer of Shares

b.. Transmission of Shares

c.. Acquiescence of Shares

d.. Allotment of Shares

slide287
286.. Although a company is a separate legal entity distinct from shareholders in reality, it is an association of persons who are the beneficial owners of all the corporate property. Hence it may sometime become necessary to look at the persons who are behind the Corporate Veil. The Corporate Veil is said to be lifted or pierced when the Court ignores the separate entity of the company and directly concerns itself with the members or directors of the company. There is no specific law as to when this should be done. Court decides this as application on case to case basis.
slide288
287..Who cannot be a member of a company

a.. Partner

b.. Company

c.. NRI

d.. None

slide289
288..Which one is not a statutory right

a.. Transfer of Shares

b.. To receive dividends

c.. Receive Copy of Balance Sheet

d. To file a petition to the High Court to order winding up of the company

slide290
289.. To participate in the distribution of assets in case of liquidation of the company is called

a.. Statutory Right

b.. Proprietary Right

c.. Ordinary Right

d.. Documentary Right

slide291
290.. Statement by Expert has to be part of

a.. Articles of Association

b.. Resolution

c.. Memorandum of Association

d.. None

slide292
291.. A Prospectus can be issued

a.. Before formation of the company

b.. Only after the Incorporation of the Company

c.. At the discretion of the Registrar of Companies

d.. At the will of the concerned Company

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292..The provisions of FEMA(1999) extend to all over India and also apply to all branches, offices and agencies outside India owned or controlled by a person resident in India and also to any contravention committed outside India by any such person to whom this Act applies.
slide294
293..Currency under FEMA means and includes

a.. Postal Notes

b.. Postal and Money orders

c.. Letter of Credit

d.. All

slide295
294.. Identify which one is not a Current Account Transaction

a.. Payments due as interest on loans and as income from investments

b.. Remittances for living expenses of parents, spouse and children residing abroad

c.. Remittances into NRI account holder in India

d.. Expenses in connection with foreign travel for medical treatment of a resident

slide296
295.. Capital account transactions means transactions by which there may be a change (either an increase or decrease) in the assets or liabilities outside India or persons resident in India or assets or liabilities in India of persons resident outside India
slide297
296.. A contract of sale of goods is a contract under which the seller transfers or agrees to transfer the property in goods to the buyer for a price. When the property in the goods is transferred from the seller to the buyer, the contract is called a sale.
slide298
297..Goods means every kind of moveable property (other than actionable claims & money).

* Stock and shares, growing crops , grass and things attached to or forming part of land which are agreed to be severed before sale or under the contract of sale.

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298..When the transfer of the property in the goods to take place at a future time or subject to some condition thereafter to be fulfilled, the contract is called an agreement to sell.
  • Under sale the risk in goods is with the buyer.
  • Under sale both parties have already performed their part.
  • Under sale the ownership stands transferred whether the goods are delivered or not
slide300
299..Under sale the seller does not deliver the goods the buyer can file a suit and demand specific performance and delivery of the goods.

* In case the buyer fails to pay, the seller has the right to file a suit and demand the price

slide301
300..Under an agreement to sell both the parties are yet to perform.
  • The ownership remains with the seller
  • The risk in goods still with the seller, only after the sale is effected it will pass on to the buyer
  • If seller fails to deliver the goods/property then, the buyer can only claim damages in a suit
  • Here the seller may not part with the goods till payment is made by the proposed buyer.
slide302
301..Express conditions and warranties are those which are expressly stated in the contract. Implied conditions and warranties are those which the law implies into every contract of sale of goods.

*** In a sale of goods by description, there is an implied condition that the goods shall correspond with the description

slide303
302..If the sale is by sample there is an implied condition that the bulk shall correspond with the sample in quality.

Further, the buyer will have an opportunity to compare the bulk with the sample.

Goods should be free from any defects

slide304
303.. Caveat means a warning or caution. It is the responsibility of the buyer to check or examine before purchasing. The Caveat emptor means Buyers Beware. After selecting by his own judgment later on the purchaser cannot complain or put the blame on the seller. While purchasing the buyer has to be careful to avoid complications later on.
slide305
304..Unpaid seller’s rights against the Buyer personally arise out of breach of contract and the seller can file a suit to claim damages, claim the price of goods with interest and he can also repudiate the contract.
slide306
305.. A partner is the agent of the firm for the purpose of the business of the firm.

A partner can make the firm liable by his acts, if done in the name of the firm and in the ordinary course of business of the firm.

An act done by a partner to carry on the kind of business done by the firm ( in the usual way) binds the firm. This authority of a partner to bind the firm is called his “ implied authority”.

slide307
306.. J has been admitted to receive the benefits of the firm when he was a minor. Subsequently J became a major. He has not given any public notice to the effect whether he wanted to become a partner or not.

a.. J will not become a partner

b.. J will become a partner automatically on completion of six months from the date on which he has become the major

c.. Since J did not give any public notice he will not be allowed to become a partner

d.. It is left to J to become a partner or not and there is no specific notice required

slide308
307.. Among other clauses in the Partnership deed, it has been clearly mentioned that the bank account can continue even after the death of any one of the partners. The firm has 4 partners. One of them died recently. Then the bank

a.. Has to close the account

b.. Can allow the existing partners to use the existing account

c.. Usually closes the account to avoid complications

d.. Can rely on the Partnership Act provisions

slide309
308..The Right to Information Act is applicable through out India except the State of Jammu and Kashmir.

..As per the Right to Information (Regulation of Fee and Cost)Rules,2005, the application shall be accompanied by a fee of Rs.10/-

.. The Act provides opportunities to call for information which could provide vital details to proceed further in case of need.

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309..The Central Government can constitute a body called the Central Information Commission and the State Government to set up the State Information Commission. Appeal could be filed within 30 days from the expiry of period (normally 30 days)
slide311
310..The Prevention of Money Laundering Act,2002 was enacted to prevent money laundering. The Act provides rigorous punishment for the offence of money laundering .Central Government has in consultation with RBI has framed certain rules. They include what records to be maintained, retention of records, verification of identity of client and furnishing information in respect of the transactions to the Director and so on
slide312
311..According to the Information Technology Act,2000 certifying authority means a person who has been granted a licence to issue a Digital Signature Certificate.

..Digital Signature means authentication of any electronic record by a subscriber by means of an electronic method or procedure

..Key pair is an asymmetric crypto system, means a private key and its mathematically related public key, which are so related that the public key can verify a digital signature created by the private key.

slide313
312.. The key of a key pair used to create a digital signature.

a.. Private key

b.. Public key

c.. Both

d.. None

slide314
313.. The key of a key pair used to verify a digital signature and listed in the Digital Signature Certificate

a.. Public key

b.. Private Key

c.. Both

d.. None

slide315
314..As per the provisions of the Information Technology Act 2002, who shall advise the Government as regards any rules or for any other purpose connected with the said Act.

a.. Not below the rank of the Deputy Superintendent of Police

b.. Ministry of Information Technology

c.. Reserve Bank of India in consultation with the Prime Minister’s Office

d.. None

slide316
315.. The Information Technology Act facilitated the amendments to

a.. Indian Penal Code and the Indian Evidence Act

b.. Bankers’ Book Evidence Act and Reserve Bank of India Act

c.. Both a and b

d.. None of the above

slide317
316.. A system of a secure key part consisting of a private key for creating a digital signature and a public key to verify the digital signature.

a.. Access

b.. Asymmetric crypto system

c.. Control system

d.. Function

slide318
317..(1)The mortgagor apparently sells the mortgaged property to the mortgagee (2) The mortgagor delivers possession of the mortgaged property to the mortgagee

a.. Simple & Equitable

b...Conditional Sale & Usufructuary

c.. Simple & Usufructuary

d.. English & Conditional Sale

slide319
318..Identify the mortgage not popular with bankers while obtaining immovable properties as security.

a.. Mortgage by way of Conditional Sale

b.. Usufrctuary Mortgage

c.. Simple Mortgage

d.. Both a & b

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