Model Online Promotion Test For Bank Officers On Banking Law & Practice
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This Test is on Banking Law and Practice in India. Questions on various Fundamental Laws �which are of daily relevance are included. Please take Quiz Password by e Mailing to [email protected] Com your full particulars like Name,Age,Place of Work/Study,Designation/Course,Phone/Mobile No and Address N Rangarajan Senior Managerof a Public Sector Based Bank @ Trichy
- 1.Mr A and B signed a joint and several promissory note to avail a Loan from Bank. Within a month the document is getting time barred. Mr A alone signs the revival letter and Mr B refuses to sign the RL.What is the position of liability of the borrowers?
- A.
If a suit is filed before the document expires, then Both A and B are liable.
- B.
If the suit is filed after the expiry of limitation, then A alone is liable and Bank cannot proceed against B
- C.
Once RL is not signed by both borrwers, the Bank has no option than to write off.
- D.
A & B both correct
- E.
None of the above
- 2.What is the type of lease under which the lessee does not get the benefit of depreciation?
- A.
Financial Lease
- B.
Rental Lease
- C.
Optional Lease
- D.
Dry Lease
- E.
Usufructuary Lease
- 3.
- A.
Depends upon Court Judgement
- B.
Priority of Mortgage is decided based on the date of execution.Hence Canara Bank will have priority
- C.
EM is superior as it is widely followed in India
- D.
None of the above
- 4.
- A.
Mumbai to have better control
- B.
Bangalore as the property is situated there
- C.
Chennai as the company's registered office is situated there
- D.
Hyderabad
- E.
Any Notified Centre in India
- 5.The relationship between a Remitting Customer and Banker in case of TT
- A.
Consumer and Banker
- B.
Agent and Principal
- C.
Principal and Agent
- D.
Trustee and Beneficiary
- E.
All the above
- 6.
- A.
Bankers Book Evidence Act
- B.
Civil Procedure Code
- C.
Banking Regulation Act 1949
- D.
Indian Contract Act
- E.
Banking Comapnies Acquisition and Transfer of Undertaking Act 1970
- 7.
- A.
Bank will be an unsecured creditor
- B.
Those creditors who have registered their charges will get priority
- C.
Only the mortgage is supreme . In such case registration of charge is not required
- D.
In case of pledge of goods, registration is not required.
- E.
A,B and D Correct
- 8.Which Act defines Hypothecation?
- A.
SARFAESI Act
- B.
It is only Banking Convention.
- C.
Sale of Goods Act
- D.
Indian Contract Act
- E.
Transfer of Property Act
- 9.
- A.
Can be acceded.
- B.
Will be declined as any one of the original names should be maintained.
- C.
Will refer to Regional Office Law Department.
- D.
Additon of Name is permitted but deletion is not permitted as per Banking Codes and Standards Board of India guidelines.
- E.
All the above
- 10.
- A.
If the secuirities are the property of guarantor, it can be parted with.
- B.
All securities can be given to the guarantor in the right of subrogation.
- C.
The right of substitution permits the same
- D.
If the securities are in the name of borrower,we will refer to higher authorities.
- E.
Can be released against indemnity.
- 11.Right of set off cannot be exercised by the Bank in respect of
- A.
Regular Debt
- B.
Time barred Debt
- C.
Revived Debt
- D.
Ascertained and quantifiable debt
- E.
Contingent Debt
- 12.What is the limitation period for exercising the right of lien?
- A.
3 years from the date of Demand
- B.
12 years from the date of Cause of Action
- C.
30 Years for Foreclosure
- D.
Right of Lien is not barred by Limitation
- E.
None of the above
- 13.Mr A has availed TOD against Term deposit. Later he is adjudged as insolvent.A claim is received from the Official receiver. In this case the Bank will,........
- A.
Pay the full amount of Deposit to Official receiver, as this is a claim from court of law.
- B.
Adjust the the TOD and pay balance amount to depositor, who will will in turn pay the official receiver
- C.
Pay the full amount of deposit to the depostor.
- D.
Adjust the TOD and Pay balance amount to Official Receiver
- E.
All the above may be applied on a case to case basis
- 14.Which one of the following is not an actionable claim?
- A.
Term Deposit Receipt
- B.
Life Insurance Policy
- C.
Book Debt
- D.
Overdraft availed at Bank
- E.
None of the above
- 15.Clayton's Rule will be applicable to
- A.
All running accounts like TOD,CC,Bills and PC
- B.
Non Fund Based Facility
- C.
Term Loan
- D.
Demand Loan
- E.
All the above
- 16.Safe Deposit Locker Service can be provided to Minors above the age of 12 and up to 18 (Special Minors)
- A.
True
- B.
False
- 17.As per Hindu Succession Act amendment in September 2005, Who gets coparcenery rights?
- A.
All Major Male Members.
- B.
The daughters of coparceners are also getting coparcenery rights
- C.
All female members in the family
- D.
Staus quo continues as per old provisions
- E.
None of the above
- 18.Nomination facility is available for Loan accounts under Banking Services
- A.
True
- B.
False
- 19.Partners have ----------------------- liability as per Section ------------- of Indian Partnership Act.
- 20.A minor can be admitted to ____ ________ of a Partnershio firm
- A.
The Capital
- B.
The Liabilities
- C.
The Responsibilities
- D.
The Deed
- E.
The Benefits
- 21.Under Which Act RBI can conduct inspection of Banks?
- A.
Sec 46 of Banking Regulation Act
- B.
Sec 35 of Banking Regulation Act
- C.
Sec 31 of RBI Act
- D.
Sec 26 of Banking Regulation Act
- E.
None of the above
- 22.
- A.
Erosion of Net Worth
- B.
Negative Net Worth
- C.
Break Even
- D.
Sick Industrial Company under SICA Act 1985
- E.
Company to be put under nursing / rehabilitation programme
- 23.What type of action can be brought under Consumer Protection Act against the Bank?
- A.
Deficiency of service
- B.
Deficiency of service that is fully paid for
- C.
Deficiency of service, even if it is partly paid for
- D.
Any delay in service
- E.
Not Granting Loan in Time
- 24.Why Banks insist for Regd memorandum nowadays?
- A.
It is mandatory
- B.
To increase the revenue of Govt
- C.
To reflect the Bank's name as mortgagee in the Encumberance certificate
- D.
To protect the interest of the Bank
- E.
A & C above
- 25.How will you elongate the limitation period of equitable mortgage?
- A.
By Supplemental Narration
- B.
By Redeposit of Title Deeds
- C.
By taking endorsement in the reverse of F 379
- D.
By security confirmation letter
- E.
By A & B Above
- 26.What is the effect of non registration of a document?
- A.
No Effect
- B.
Cannot be admitted as evidence
- C.
It is statutory
- D.
It will not confer right
- E.
None of the above
- 27.What is the format in our Bank for obtaining debit confirmation letter from guarantor?
- A.
F 237
- B.
F 237 A
- C.
F 301 B
- D.
F 16
- E.
F 301
- 28.The comprehensive document in our Bank which covers hypothecation of goods / Machinery/ Book Debts is _ ____ _
- 29.What is Limited Liability Partnership?
- A.
The LLP will be a separate legal entity, liable to the full extent of its assets.LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession.
- B.
The liability of the partners would be limited to their agreed contribution in the LLP
- C.
No partner would be liable on account of the independent or un-authorized actions of other partners, thus allowing individual partners to be shielded from joint liability created by another partner�s wrongful business decisions or misconduct
- D.
There is no maximum limit in the number of partners
- E.
All the above
- 30.How the Bank can revive the time Barred debt?
- A.
By granting fresh loan after adjusting the original loan
- B.
By taking express promissory note and adequately stamping it
- C.
By taking revivival letters for the broken periods
- D.
By verifying the reapyment vouchers in the loan and if he has remitted under his isgnature, limitation will run from that date
- E.
All the above
- 31.A garnishee order has been received attaching the TDR of a firm.The TDR has been taken as a security for a Bank Guarantee issued by the Bank on behalf of the firm.The Branch Manager wants to set off the deposit for the guarantee and does not want to honour the garnishee order. He has referred to you at Regional Office.Please guide
- A.
We will refer to Central Office as there are no guidelines vailable in Banks Book of Instructions.
- B.
Right of Set Off cannot be exercised for contingent liability aginst the debt of the firm.
- C.
However the deposit is payable only on the date of maturity to meet the garnishee order.
- D.
B and C above
- E.
We concur the opinion of Branch Manager and advise him to proceed further.
- 32.In Terms of Sec 370 of Indian Succession Act, a succession certificate is apllicable to
- A.
Liabilities
- B.
Assets
- C.
Contingent Liability
- D.
Debts and Securities
- E.
All the above
- 33.The Probate issued by which court is valid throughout India irrespective of the value of property as per Sec 223 of Indian Succession Act?
- A.
Munsiff Court
- B.
Sub Court
- C.
District Sessions Court
- D.
High Court
- E.
Supreme Court
- 34.What is satisfaction of charge?
- A.
If all terms and conditions are satisfactorily met as specified in the charge documents, it is called as satisfaction of charge.
- B.
The satisfactory reply given by the delinquent employee to the charge sheet given to him by the management
- C.
After repayment of all loans granted to the limited company we have to remove the charge we have created at the ROC by filing Form 17
- D.
Satisfaction of a particular charge like hypothecation or mortgage by the limited company and recording the same thereof at ROC
- E.
None of the above
- 35.
- A.
Refuse Payment as alteration should be done by the same person who originally signed the cheque.
- B.
Better to call for the confirmation of MR X alongside the alteration and then pay.
- C.
Refer to Law Officer at Regional Office over phone and pay.
- D.
Take the second signature of accountant and thereafter pay.
- E.
None of the above
- 36.
- A.
Send Form 8 and Form 13 duly filled in alonwith xerox copies of charge creating documents and the requisite fee to ROC of jurisdiction by registered
- B.
At present only E Filing of charges by adding digital signature of the comapny and bank alongwith scanned copies of charge creating documents.
- C.
Only through the comapny's auditor who will produce the charge certificate
- D.
We can employ consultants for this job for a small fee
- E.
We have to visit the ROC in person and do it
- 37.What is the effect of Non Registration of Charge with ROC in case of Limited company advances?
- A.
Our charge on the assets will become void against the liquidator of the comapny also against the other creditors.
- B.
Though the company is bound by the charge, the liquidator is not bound by the same and the Bank will rank as an unsecured creditor alongwith other
- C.
Charge can be subsequently registered with payment of penalty
- D.
A & B above
- E.
None of the above
- 38.
- A.
Matter now sub judice.We should not pass the cheque.
- B.
If we pass the cheque without taking into account the information given by the Public Prosecutor, we may also be accused of complicity and then arrested.
- C.
As per NI Act, the arrest of a person will not result in stopping operation in the account.Cheque can be passed.
- D.
Refer to Law Officer at Regional Office
- E.
Refer to Panel Lawyer.
- 39.What is doctrine of Inddor Management?
- A.
Management Philosophy propunded by Peter Druckker which says knowledge coupled with motivation will bring better results
- B.
It is a theory developed by Stephen R Covey on Team Spirit,Leadership and Time Management
- C.
It is the Marketing guru Zig Zaglar's idea of greater targets will bring great efforts
- D.
C.K.Prahlad's Corporate Governance Policy wherein Middle Level Shop Floor Engineers are trained in house in the art of Management
- E.
This is related to Memorandum and Article of Association of a company
- 40.The insurance document is
- A.
An indemnity
- B.
An Affidavit
- C.
A Guarantee
- D.
An Actionable Claim with a Contingent Liability for the deposit taker
- E.
Contract of utmost good faith
- 41.While lending to a limited company we want to verify whether the company has the powers to Borrow Money, requested under the proposal.Where will you search for the same?
- A.
The auditor will search for the prior charges in the Registrar of companies and submit a search report to confirm that there are no prior charges.After our lending and creation of charge, we will call for second search report to confirm that we are the sole charge holders.
- B.
Certificate of Incorporation
- C.
In the Power of Attorney given to the Managing Director
- D.
Memorandum of Association
- E.
Articles of Association
- 42.What is a Probate?
- A.
Will attested by Notary Public
- B.
Will Registered at the Registrar of Assuarances
- C.
Will Affirmed by the Testator
- D.
Intestate
- E.
Authorisation given by the court to give effect to the will.
- 43.The Ceiling on advances against company shares is prescribed under
- A.
Sec 19 of BR act
- B.
Lenders Liability Act
- C.
Sec 14 of Companies Act
- D.
Sec 31 of RBI Act
- E.
None of the above
- 44.Banker comes to know that the security hypothecated for an advance is likely to be disposed off by the customer. What action is to be taken by the Bank?
- A.
File a police complaint
- B.
File a suit in court to enforce collateral security.
- C.
Remain helpless
- D.
Convert Hypothecation into Pledge and take possession.
- E.
Employ Recovery Agents and teach a borrower a strong lesson.
- 45.It is a letter given by a company to their financing banker under taking not to charge any of their assets to any other financial institution or bank. What is its name?
- A.
No Lien Letter
- B.
Negative Lien
- C.
Specific or Particular Lien
- D.
Unavailed Bankers Lien
- E.
Letter of Estoppel
- 46.A cheque is presented across the counter after the death of POA holder who had signed the cheque. The Principal (A/C holder) is alive. The cheque is referred to you by the counter clerk.Please convey your decision.
- A.
As the signatory has passed away, there is no mandate for the Bank to pass the cheque.
- B.
Can be passed subject to availability of funds inthe account.
- C.
We can refer to Law Deaprtment at Regional Office and then decide.
- D.
Safely return the cheque with the reason "Signature differs with Specimen provided to Bank"
- E.
None of the above
- 47.Why insurance of stocks is done in the joint names of the Bank and the borrower?
- A.
Bank has insurable interest in the stock as creditor.
- B.
This will enable the Bank to make a claim directly to the insurance company in case of loss
- C.
Doctrine of "Uberimo Fidaei"
- D.
All the above
- E.
A & B above
- 48.What is the repercussion of lending to an unregistered partnership firm?
- A.
Bank cannot sue the firm for nonpayment of debt.
- B.
Others can sue the firm.
- C.
Bank cannot sue the counterparties of the firm
- D.
Firm cannot sue their debtors for recovery
- E.
An unregistered Partnership firm is not a legal entity and any contract entered with it is "ab initio void" in the eyes of law.
- 49.
- A.
Under Sec 125 of Companies Act, Hypothecation cane be registered with ROC which serves as notice to third parties.
- B.
There is no provision to register pledge with ROC under Companies Act.
- C.
Companies do not prefer pledge as they require the goods anytime because of the high volume of transaction.
- D.
All the above
- E.
A & B above
- 50.What is the liability of introducer of the bank account in case of fraud committed against the Bank by the account holder?
- A.
None under NI Act.
- B.
Under Criminal Law,KYC/AML the introducer can be subjected to investigation.
- C.
Introduction is only a formality without any implications.
- D.
A & B above
- E.
All the above
- 51.Why nominee's signature is not obtained in the Deposit account opening form?
- A.
As per RBI Guidelines
- B.
To make processing of claims and identification of Nominee, difficult for the Bank
- C.
To enable the depostor to maintain secrecy and change the nominee at asubsequent date
- D.
The Contract is between the depositor and Bank only and there is no privity of contract between the nominee and Bank.
- E.
C & D Above
- 52.Who can request for information from the Bank under RTI Act 2005?
- A.
Any citizen
- B.
An existing or prospective customer or consumer of the Bank
- C.
An existing customer or consumer of the Bank
- D.
Any Aggrieved Person against any organisation
- E.
A Registered Attorney of any court in India
- 53.What is the fees payable for getting information as per RTI Act 2005?
- A.
0.25% on the value of information to be given in INR Terms
- B.
Rs 100 + out of pocket expenses relating to the reply
- C.
Rs 10 only
- D.
Rupees two for each page (in A-4 or A-3 size paper) created or copied and actual charge or cost price of a copy in larger size paper and actual cost or price for samples or models and and for inspection of records, no fee for the first hours and a fee of rupees five for each subsequent hour or fraction thereof.
- E.
C & D above
- 54.If the reply is not satisfactory, what is option available for the person seeking information under RTI Act?.
- A.
Banking Ombudsman can be approcahed.
- B.
The Appellate Authority will entertain and dispose appeals against the decision of the CPIO as required under the Act.A General Manager is designated as Appeallate Authority in our Bank for this purpose.
- C.
Customer can file a suit in Court or a Police complaint as the case may be
- D.
Consumer redressal Forum can be approcahed under COPRA
- E.
All the above depending upon the merits of the case
- 55.Why Registrar of companies is not registering "pledge" as a charge?
- A.
Pledge is Bailment of goods in which the actual or constructive possession is with Bank.
- B.
Bankers Rights as pledgee is not affected by the claims of other creditors.
- C.
As a Matter of convention.
- D.
As Bankers normally lend under Hypothecation, Pledge is not registered
- E.
A & B above
- 56.
- A.
Action under SARFAESI will be redundant as there is already a case in DRT and Bank can await its outcome.
- B.
The matter is now subjudice.
- C.
If any action is taken now, it will be presumed as contempt of court.
- D.
A separate petition to be filed in DRT for withdrawing the case and initiating action under SARFAESI
- E.
None of the above
- 57.Is Garnishee Order applicable to unutilized portion of Cash Credit Limit?
- A.
Yes
- B.
No
- C.
Yes, if adequate drawing power is available
- D.
Yes, with borrower’s consent
- E.
C & D Above
- 58.Which one of the following is not applicable for future credits?
- A.
Garnishee Order
- B.
IT Attachment Order
- C.
Revenue Attachement Order
- D.
Appointment Order
- E.
Gazette Notification
- 59.A cheque specially crossed to a Particular Bank can be Paid to any Bank participating in clearing.
- A.
True
- B.
False
- 60.What is Section 85(2) of NI Act?
- A.
Protection to Paying Banker in case of Drafts
- B.
Protection to Collecting Banker
- C.
Once a Bearer always a Bearer
- D.
None of the above
- E.
Compensation for wrongful dishonour
- 61.An account holder gives a request for closure of the account and transfer of the same to New Delhi Greater Kailash Branch. Subsequent to the transfer of the account, a cheque issued by the customer was presented inclearing. The Bank returned the cheque with the reason "A/c Closed" The customer sues the Bank for damages.
- A.
Refer To drawer is the most appropriate reason
- B.
A/c Closed is the correct reason. No cause for damages.
- C.
Cheque Books should have been collected before closure of account and an indemnity regarding unpaid cheques issued already but not presented should be taken before transfer of account.
- D.
Reason " A/C transferred to Greater Kailash Branch" should have been given
- E.
Matter sub judice
- 62.A cheque without date is presented for payment . On pointing out the omission, the person who presented the cheque fills in the date
- A.
Cannot be paid as originally date was not filled in
- B.
Such instruments are infinitely valid and can be paid
- C.
Can be paid with the consent of Drawer
- D.
It is an Inchaote instrument . Any Bearer can fill it and the payment can be made and viewed as payment in due course
- E.
Refer RO/CO
- 63.Who can issue Demand Draft Payable to Bearer?
- A.
Any Bank
- B.
Any Licensed Scheduled Bank
- C.
Foreign Banks
- D.
RBI
- E.
Cooperative Bank
- 64.The conversion of a bearer cheque into an order cheque is
- A.
A Material Alteration
- B.
Not A Material Alteration
- C.
A Negotiable Instrument
- D.
Not a Negotiable Instrument
- E.
All the above
- 65.What does Sec 118 of NI act deal wih?
- A.
Punitive Clauses
- B.
Definition of Negotiable Instrument
- C.
Endorsement
- D.
Presumption
- E.
Promissory Note
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