JAIIB/Diploma in Banking & Finance LEGAL & REGULATORY ASPECTS OF BANKING - PowerPoint PPT Presentation

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JAIIB/Diploma in Banking & Finance LEGAL & REGULATORY ASPECTS OF BANKING

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  1. JAIIB/Diploma in Banking & FinanceLEGAL & REGULATORY ASPECTS OF BANKING MODULES C & D

  2. 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.

  3. 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

  4. 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

  5. 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

  6. 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

  7. 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

  8. 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.

  9. 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

  10. 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.

  11. 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

  12. 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.

  13. 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

  14. 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

  15. 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

  16. 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

  17. 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

  18. 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

  19. 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

  20. 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.

  21. 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

  22. 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

  23. 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

  24. 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

  25. 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

  26. 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.

  27. 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

  28. 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)

  29. 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

  30. 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

  31. 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.

  32. 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

  33. 32.. Which one is not associated with SARFAESI Act. a.. Obligor b.. Hypothecation c.. Security Receipt d.. None of the above

  34. 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

  35. 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

  36. 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

  37. 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)

  38. 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

  39. 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

  40. 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

  41. 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

  42. 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

  43. 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

  44. 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

  45. 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.

  46. 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

  47. 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

  48. 47.. Qualified Institutional Buyer (odd one) a.. Bank b.. Insurance company c.. A CEO of a leading MNC d.. An Asset Management Company

  49. 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

  50. 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.