Bank Promotion Exam Quiz: Trivia!
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- 1.What is the sales turnover limit to classify an account under Regularly Retail Portfolio under BASEL II norms?
- A.
Upto Rs 10 crores
- B.
Upto Rs 50 crores
- C.
Upto Rs 100 Crores
- D.
No Sales Turnover norms
- E.
Only Size of Balance Sheet is reckoned
- 2.What is BCBS?
- A.
Basle Committee on Banking Supervision
- B.
Bank of Commerce Bumiputra Shd
- C.
Banking Companies Binary Software
- D.
Bilingual Committee on Banking Supervision
- E.
None of the above
- 3.What is the other name(s) given to Non Performing assets?
- A.
Impaired Assets
- B.
Stressed Assets
- C.
Assets with well defined credit weakness
- D.
Underperfoming assets
- E.
A & B & C above
- 4.What is the option available for computing capital on market risks?
- A.
Standardised Approach
- B.
Basic Indicator Approach
- C.
Standardised Duration Approach
- D.
Standardised Duration Approach
- E.
Health Code System
- 5.An asset which becomes NPA as soon as it is disbursed is known as
- A.
Quick NPA
- B.
Short Mortality Account
- C.
Immortality Account
- D.
Immature Asset
- E.
Quick Mortality Account
- 6.What is the maturity period of innovative instruments raised as Tier I capital?
- A.
Perpetual
- B.
5 years
- C.
Short Term equivalent to the maximum maturity of Treasury Bill
- D.
5 years with an enxtension of another 5 years
- E.
7 years
- 7.What are the elements of Tier I Capital?
- A.
Paid-up equity capital, statutory reserves, and other disclosed free reserves, if any
- B.
Capital reserves representing surplus arising out of sale proceeds of assets
- C.
Innovative perpetual debt instruments eligible for inclusion in Tier 1 capital, which comply with the regulatory require
- D.
Perpetual Non-Cumulative Preference Shares (PNCPS), which comply with the regulatory requirements
- E.
All the above
- 8.What is a consolidated Bank?
- A.
A Group of Banks
- B.
A Group of entities where a licensed bank is the controlling entity
- C.
A Group of Banks likely to be merged
- D.
State Bank of India
- E.
Indian Banks Association
- 9.Who is the counterparty in Bank credit transactions?
- A.
The person who stands across the counter to remit the EMI or part payment.
- B.
The third paty guarantor
- C.
The Co obligant
- D.
A party to whom a bank has an on- or off-balance sheet credit exposure.
- E.
The consultant who canvasses business
- 10.What are the various other risks not comprehensively covered under BASEL II norms?
- A.
Interest rate risk in the banking book and Credit concentration risk
- B.
Liquidity risk Settlement risk Reputational risk Strategic risk Risk of weakness in the credit-risk mitigants
- C.
Risk of under-estimation of credit risk under the Standardised approach
- D.
“Model risk” i.e., the risk of under-estimation of credit risk under the IRB approaches Residual risk of securitisation
- E.
All the above
- 11.What is a hair cut in Basel II?
- A.
A haircut is a percentage that is subtracted from the par value of the assets that are being used as collateral
- B.
The size of the haircut depends on the riskiness of the security offered as collateral
- C.
Deduction from Capital
- D.
Deduction from risk weight
- E.
A & B above
- 12.In the comprehensive approach, when taking collateral, banks will need to calculate their adjusted exposure to a counterparty for capital adequacy purposes in order to take account of the effects of that collateral. Banks are required to adjust both the amount of the exposure to the counterparty and the value of any collateral received in support of that counterparty to take account of possible future fluctuations in the value of either, occasioned by market movements. These are referred as ______.
- A.
Cushions
- B.
Deductions
- C.
Discount
- D.
Haircut
- E.
Exemptions
- 13.What is PNCPS?
- A.
Perpetual Non-Cumulative Preference Shares
- B.
Preferred Non Cumulative Preference Shares
- C.
Prirority Non Credit Purchase System
- D.
Primary Novel Cash Purchase Scheme
- E.
None of the above
- 14.In order to ensure a smooth transition to BASEL II,Banks are adivised to have a _______ ______ and the __________ of Banks should rview the results on a __________ basis.
- A.
Separate programme, results, annual
- B.
Parallel run, Board, Quarterly
- C.
Simple MIS , CMD, Monthly
- D.
Simulation tehnique, auditors, half yearly
- E.
None of the above
- 15.Revaluation Reserve will be considered at a _______ of __ % for inclusion in Tier-II Capital
- A.
Exchange , 0.25
- B.
Cap , 100%
- C.
Premium , 25
- D.
Discount , 55
- E.
None of the above
- 16.Banks are allowed to include the ‘General Provisions on Standard Assets', Floating Provisions ‘Provisions held for Country Exposures’, and ‘Investment Reserve Account’ in Tier 2 capital. However, these four items will be admitted as Tier 2 capital up to a maximum of ____ percent of the total risk-weighted assets.
- A.
100%
- B.
2%
- C.
75%
- D.
50%
- E.
1.25%
- 17.What is a hybrid debt capital instrument?
- A.
It is high yielding variety of capital
- B.
Created by artificial semanation techniques
- C.
A & B above
- D.
Which combine certain characteristics of equity and certain characteristics of debt
- E.
Quasi equity
- 18.When subordinated debt can be included in Tier II capital?
- A.
The instrument should be fully paid-up and unsecured
- B.
It should be subordinated to the claims of other creditors,free of restrictive clauses
- C.
They should not be redeemable at the initiative of the holder or without the consent of the Reserve Bank of India.
- D.
A & B above
- E.
A & C above
- 19.What is the maturity period of Subordinated debt for inclusion in Tier-II Capital?
- A.
Minimum five years
- B.
Residual maturity should bot be less than one year
- C.
Less Than five years and residual maturity less than 5 years
- D.
A & B above
- E.
A , B , C above
- 20.What are the items to be deducted from Tier I capital?
- A.
Intangible assets and losses in the current period and those brought forward from previous periods should be deducted from Tier 1 capital
- B.
Good will
- C.
Investment in Subsidiaries
- D.
Other intangible Assets
- E.
All the above
- 21.What is the maturity period of innovative instruments raised as Tier I capital?
- A.
5 years
- B.
5 years with an option to extend by another 5 years
- C.
Perpetual
- D.
Short Term equivalent to the maximum maturity of Treasury Bill
- E.
None of the above
- 22.The innovative instrument in excess of 15% of Total Tier I capital should be treated as
- A.
Other Time Liability
- B.
As Tier II Capital
- C.
Subject to limits prescribed for Tier 2 capital
- D.
B & C above
- E.
All the above
- 23.What is the rate of interest payable on the innovative instruments?
- A.
At a fixed rate
- B.
Or at a floating rate referenced to a market determined rupee interest benchmark rate
- C.
Bench Mark Prime Lending Rate (BPLR)
- D.
Bank Rate
- E.
A & B above
- 24.What are the available options under innovative instruments?
- A.
Call Option
- B.
Put Option
- C.
American Option
- D.
European Option
- E.
In the Money or Out of the Money Option
- 25.While exercising the call option, what are the conditions to be satisfied?
- A.
After the instrument has run for at least ten years
- B.
Call option shall be exercised only with the prior approval of RBI (Department of Banking Operations & Development).
- C.
There should not have been any default in payment of interest
- D.
There should not be a run on Banks during this period
- E.
A & B above
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