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INDIAN INSTITUTE OF BANKING & FINANCE. LEGAL ASPECTS OF BANKING OPERATIONS JAIIB MODULE A & B 04.11.06. 01.. Identify the Act which regulates entry into Banking Business by Licensing A. Banking Regulation Act B. Indian Contract Act C. Reserve Bank of India Act D. All of these.

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    2. 01.. Identify the Act which regulates entry into Banking Business by Licensing • A. Banking Regulation Act • B. Indian Contract Act • C. Reserve Bank of India Act • D. All of these

    3. 02.. Raj has appointed Chitra as the nominee for his Life policy whereas Chitre has been appointed as nominee for his Term deposits. In case Chitra and Raj both die. • A. Chitre will not get Term deposit amount • B. Chitre will get Term Deposit amount • C. Chitra is not in the picture • D. Chitre will also get Life Policy money

    4. 03..Unclaimed deposit return to be filed within A.. 30 days as per RBI Act B.. 30 days of the close of financial year C.. 30 days of the close of calendar year D.. 30 days of the close of half year

    5. 04..Surti has approached the paying bank to handover the original cheque issued in his favor by Suraj (since paid) • A. Drawee bank has to hand over • B. Drawee bank need not hand over • C. Suraj is not the drawer but only payee • D. A photocopy can be given

    6. 05..A company approached RBI for bank licence which was refused by them. • A..The company can still function as a mini banker. • B.. The company can undertake banking business on a limited basis • C.. The company can carry on money lending business • D.. The company cannot do any business

    7. 06..Identify the odd one (Foreign Banks) • A. Need not comply with the provisions of BR Act • B. Need to comply with the provisions of BR Act • C. Has to keep cash, unencumbered approved securities or partly in both • D. For business in Kolkata Rs.20 lacs

    8. 07..The scheduled banks have to submit their returns to RBI about their demand and time liabilities as per the provisions of the • A. Banking Regulations Act,1949 • B. Banking Regulations Act,1970 • C. Banking Regulation Act,1980 • D. None of these

    9. 08..Every banking company has to prepare its balance sheet and profit and loss account as stipulated in • A. Reserve Bank of India Act • B. Banking Regulation Act • C. Both a & b • D. None of these

    10. 09..The return of liquid assets of the bank has to be submitted to RBI within • A.. 7 days from the end of the month • B. 14 days from the last Friday of the month • C. 20 days from the end of the month • D. 21 days from the last Friday of the month

    11. 10..Non Scheduled banks to submit return of cash reserve to RBI A.. Within 21 days from the end of the month B.. Within 3 weeks from the end of the month C.. Within 4 weeks from the end of the month D.. Before the 20th day of every month.

    12. 11..Apart from regular inspection, RBI is empowered to conduct scrutiny of the affairs and the books of the banking company by A.. Executive Director of the concerned bank B.. DGM of State Bank of India C.. External Auditor D.. None of them

    13. 12..The Board for Financial Supervision (Board) consists of (identify the odd one) A.. Governor of RBI B.. Deputy Governors of RBI C.. Four Directors from the Central Board of RBI D.. Three Executive Directors of RBI

    14. 13..With regard to Moratorium and Amalgamation of Banks, the moratorium period can be upto A.. 2 months B.. 3 months C.. 6 months D.. Any period as decided by RBI

    15. 14..The sanction by them is the conclusive evidence that the amalgamation / reconstruction has been done in compliance with the provisions of the relative Act. • Reserve Bank of India • State Government • State and Central Government • Central Government

    16. 15..Who can be an official liquidator in respect of bank liquidations. A.. RBI B.. SBI C.. Any other bank notified by Central Govt D.. All the above

    17. 16..Under the provisions of BR Act, if RBI impose penalty for default of contravention, then A.. The same can be altered by the court B.. The same cannot be altered by the court C.. No complaint shall be filed in the court D.. Complaint can be filed in the court

    18. 17..RBI holds shares of State Bank of India. A.. Shares are freely transferable B.. RBI cannot transfer the shares if such transfer would result in reducing its holding below 51 % of the issued capital C.. They cannot transfer below 50% of the paid up capital D.. None of these

    19. 18..Banks were established under State Bank of India (Subsidiary Banks)Act,1959. Identify which is not correct. • State Bank of Mysore • State Bank of Travancore • State Bank of Saurashtra • State Bank of Bikaneer and Jaipur

    20. 19..The State Bank of India has to close its books and balance accounts each year as on 31 December or such other date as may be specified by the Reserve Bank of India. A.. True B.. False C.. Partially Correct D.. It is 31st March and not December

    21. 20..The State Bank of India is empowered to inspect the subsidiary banks A.. The above statement is not incorrect. B.. The above statement is incorrect C.. Only RBI can inspect and not State Bank D.. None of these

    22. 21.. State Bank of Mysore was established as per the provisions of A.. Reserve Bank of India Act B.. State Bank of Mysore Act C.. State Bank of India Act D.. None of the above

    23. 22..The issued capital of the Regional Rural Bank is held as 35% : 50% : 15% by A.. RRB :State Government : Sponsor Bank B.. RBI :State Bank of India : RRB C.. Sponsor Bank: Central Govt : RBI D.. None of these

    24. 23..Identify the odd item (Subsidiary Banks of SBI) A.. A body corporate B.. Perpetual succession and has common seal C.. Cannot sue in its own name D.. Others can sue

    25. 24..A nationalized bank has to hold an annual general meeting of shareholders within A.. 3 weeks of the date of Balance sheet B.. 6 weeks of the date of Balance sheet C.. 6 months of the date of Balance sheet D.. None of these

    26. 25..The State Bank of India Act was amended by the State Bank of India (Amendment) Act,1993 and modified to divide capital into shares of A.. Rs.100 into Rs.10 each B.. Rs.1000 into Rs.100 each C.. Rs.1000 into Rs. 50 each D.. Rs.100 into Re 1 each

    27. 26.. The licensing part of the Co-operative Banks, hether to looked after by RBI has been shifted to A.. Respective State Governments B.. Respective Registrar of Co-operatives C.. No such change and RBI looks after D.. Centralized with Central Registrar

    28. 27.. Displaying of an audited balance sheet not later than the first Monday in August of any where the business held A.. Applicable to all banks B.. Applicable to New Private banks C.. Applicable to Multi State Co-op Banks D.. None of the above

    29. 28...Banking Ombudsman is A.. Discontinued B.. A new company has been set up C.. Applicable to adherence to prescribed working hours by bank branches D.. All the above are not correct

    30. 29..The paying banker will get protection in respect of A.. Forged signature of the drawer B.. Forged signature on the endorsement C.. Paying a post dated cheque, about which he has knowledge D.. A cheque which is torn not certified by collecting banker

    31. 30..Identify the odd item( Transfer by way of an Assignment) A.. The right over an Life Policy B.. The right on receivables C.. The right over the bank fixed deposit D.. None of the above

    32. 31..A cheque has been paid having visible alterations (without authentication) on figures and date. The drawee A. Will not get protection under Sec10/NI Act B. Will get protection under Sec89/NI Act C. Will get protection under both sections. D. Will not get protection under both sections

    33. 32..Identify the odd one (negligence on the part of collecting banker) A ..Collected for a customer B ..Verified the crossing before collection C.. Opened the account without proper identification D.. Refused to collect third party cheque

    34. 33.. An uncrossed cheque has been collected for a customer. However the collecting bank affixed their crossing seal (rubber stamp) before collecting. A.. Amounts to negligence B.. Collecting bank will not get protection C.. Collecting bank will get protection D.. Crossing by bank serves the purpose

    35. 34..A customer issued a cheque favouring Telephone Dept. However in the account there was no sufficient balance. The bank dishonoured the cheque • The bank is in order • The bank is not in order • The customer can claim damages • The drawer need not inform in advance

    36. 35..The bank obtains indemnity in all the following cases excepting one. Identify. A.. To issue Duplicate DD for Rs.1.00lac B.. To settle the death claim where one of the claimants is a minor C.. To issue Duplicate Fixed deposit receipt D.. None of these

    37. 36.. Which statement is in correct. A.. A paying banker will not get protection if it is not a payment in due course B.. A collecting bank will get protection if he is negligent C.. There is only one contract in an indemnity D.. Indemnity if witnessed will be treated as a bond and attracts ad valorem stamp duty.

    38. 37. A performance guarantee has been invoked by the beneficiary. At the time of receipt, there is no sufficient balance in the account of the client • The bank can ignore the invocation • The bank can postpone making payment • The bank has to pay • None of these

    39. 38.. A bank while issuing a bank guarantee with 100% margin A. Need not obtain Counter Guarantee B. As it is fully secured • Need to obtain stamped Counter Guarantee • Unstamped Counter Guarantee is enough since it is fully secured with 100%

    40. 39.. The client approached the bank not to honour the guarantee since he has a dispute with the beneficiary. The customer is a good customer. A. Bank to oblige B. From the angle of customer service, bank to support him C. Bank is bound to protect customer’s interest D. All the above are not correct

    41. 40. On a Letter of Credit, the court will not interfere, since it is a commitment by an individual banker to the beneficiary. A.. Not True B.. Not False C.. Unless a fraud or forgery the court will not interfere D.. Court will interfere at the request of the party

    42. 41.. The Red Clause LC and Green Clause LC are one and the same. A.. True B.. False C.. Both are usual LCs D.. Green Clause LC is the refinement of Red Clause LC

    43. 42..This bank is appointed by another bank to make reimbursement to the Negotiating, Paying or Confirming Bank. A.. LC opening bank & Reimbursing Bank B.. Issuing Bank & Advising Bank C.. Reimbursing Bank & Advancing Bank D.. None of these

    44. 43..The combined Transport bill is also called as A.. Multiple Bill of Lading B.. Multiple Bill of Entry C.. Multiple Bill of Exchange D.. None of these

    45. 44.. LASH (Lighter Alongside Ship) Bill of Lading will not be accepted when trans-shipment is prohibited by Letter of Credit A.. The above is not incorrect B.. The above is incorrect C.. Not related to LC subject D.. This is not a major issue

    46. 45..Which statement is incorrect (LC) • Banks will accept documents dated prior to the date of LC, unless LC prohibits • Banks will accept Bill of Lading showing third party shipment, unless LC prohibits • The beneficiary can directly present the documents to the opening bank • Banks will accept BL showing shipment on deck when LC is silent.

    47. 46..A transferable Letter of Credit can be transferred • Only 2 times • Any number of times • Only 1 time • With the consent more than one time

    48. 47..A further credit issued in favour of the beneficiary’s supplier on the basis of LC in favour of the beneficiary • Revolving Credit • Green Clause Credit • Back to Back Credit • Red Clause Credit

    49. 48.. The bank that makes payment on the bills drawn by the seller or exporter is also known as the paying bank • Negotiating Bank • Exporter’s Bank • Importer’s Bank • Advising Bank

    50. 49.. When capital goods are imported this type of Bank guarantee is insisted A.. Performance Guarantee B.. Advance Payment Guarantee C.. Deferred Payment Guarantee D.. All of these