N.Rangarajan's Model Online Test For Promotion In Banks (India)
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This is an objective type test in which each question will have 4 to 5 options. The test Taker should click the most appropriate answer which will carry one mark. No negative Marks. Time allowed 60 Minutes. Best of Luck and efforts. 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 AddressOn your Name, Age,Address,Your Place of work/Study designation etc. ,N RangarajanSenior Managerof a Public Sector Bank Based at Trichy(Formerly Faculty Member of their Training System)
- 1.
- 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 are 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.
- 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 consoliadted 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.
- 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.
- 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.
- 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.
- A.
100%
- B.
2%
- C.
75%
- D.
50%
- E.
1.25%
- 17.What is 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.
- 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.
- 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.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 innovative instrument?
- 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 avialable options under innovative instrument?
- A.
Call Option
- B.
Put Option
- C.
American Option
- D.
European Option
- E.
In the Money or Out of the Money Option
- 25.While exercisng 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
- 26.What RBI will look into when the Banks application for exercise of call option reach them for a decision?
- A.
CRAR at the time of Call Option
- B.
CRAR after exercise of the call option
- C.
Net Interest Margin
- D.
Return on Assets
- E.
A & B above
- 27.What other option can be exercised by Banks at the time of Call Option?
- A.
None
- B.
Foreclosure
- C.
Step Up Option
- D.
Step Down
- E.
Conversion
- 28.When Issuing Bank need not pay interest in case of Innovative Debt Instruments?
- A.
If the bank’s CRAR is below the minimum regulatory requirement prescribed by RBI
- B.
If the impact of such payment results in bank’s capital to risk assets ratio (CRAR) falling below or remaining below the minimum regulatory requirement prescribed by Reserve Bank of India
- C.
A & B above
- D.
Payment of Interest cannot be defaulted
- E.
Payment of Interest can be deferred
- 29.Banks may still pay interest under innovative debt instruments with the prior approval of RBI when the impact of such payment may result in net loss or increase the net loss, provided the CRAR remains _____ the regulatory norm.
- A.
Equal to regulatory norm
- B.
Above
- C.
Below
- D.
Plus or Minus the regulatory norm by 5%
- E.
None of the above
- 30.Payment of interest under innovative debt instrument on a ________ basis.
- A.
Regular
- B.
Irregular
- C.
Cumulative
- D.
Non Cumulatice
- E.
Alternative
- 31.What is the claims of the investors in innovative instruments?
- A.
Superior to the claims of investors in equity shares
- B.
Subordinated to the claims of all other creditors
- C.
Subordinated to the International claims of all other creditors
- D.
A & B above
- E.
Subordinated to the Sovereign Claim
- 32.The total amount raised by a bank through innovative instruments shall not be reckoned as liability for calculation of net demand and time liabilities for the purpose of _______ requirements and, as such, will not attract ___ / ___ requirements.
- A.
Reserve , CRR/ SLR
- B.
Reserve, Repo/Reverse Repo
- C.
Quantitative, Rate/Bank Rate
- D.
Qualitative, Credit Control
- E.
All the above
- 33.A bank's investment in innovative instruments issued by other banks and Fiinancial institutions will be reckoned along with the investment in other instruments eligible for capital status while computing compliance with the overall ceiling of __ percent for cross holding of capital among banks/FIs prescribed
- A.
10
- B.
15
- C.
25
- D.
40
- E.
None of the above
- 34.What is the amount of loan that can be granted against innovative instruments?
- A.
25% of Face Value of the instruments
- B.
25% of The Maturity Value of the instrument
- C.
25% of Market Value of the instrument
- D.
25% of the YTM value of instrument
- E.
No loan can be granted
- 35.How the step up option can be exercised under innovative pepertual instruments?
- A.
Can be exercised only once during the whole life of the instrument
- B.
In conjunction with the call option
- C.
After the lapse of ten years from the date of issue
- D.
The step-up shall not be more than 100 bps
- E.
All the above
- 36.Market Discipline is all about ----------
- A.
Disclosures
- B.
Procedures
- C.
Practices
- D.
Principles
- E.
Ethics
- 37.Expand SREP
- A.
Supervisory Review and Evaluation Process
- B.
Special Regulatory Enabling Provision
- C.
Special Regional Economic Package
- D.
Systems Regulated Embedded Package
- E.
None of the above
- 38.What is ICAAP?
- A.
Internal Capital Adequacy Assessment Process
- B.
Institute of Chartered Accountants Accounting Procedures
- C.
Institute of Cost Accountants Accounting Practices
- D.
Internal Capital Adequacy Actuarial Practices
- E.
None of the above
- 39.What are the four key principles in regard to the Supervisory Review Process envisaged under Pillar 2?
- A.
Banks should have a process for assessing their overall capital adequacy in relation to their risk profile and a strategy for maintaining their capital levels
- B.
Supervisors should review and evaluate the banks’ internal capital adequacy assessments and strategies, as well as their ability to monitor and ensure their compliance with the regulatory capital ratios. Supervisors should take appropriate supervisory action if they are not satisfied with the result of this process
- C.
Supervisors should expect banks to operate above the minimum regulatory capital ratios and should have the ability to require the banks to hold capital in excess of the minimum.
- D.
Supervisors should seek to intervene at an early stage to prevent capital from falling below the minimum levels required to support the risk characteristics of a particular bank and should require rapid remedial action if capital is not maintained or restored.
- E.
All the above
- 40.
- 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.
“Model risk” i.e., the risk of under-estimation of credit risk under the IRB approaches Residual risk of securitisation
- D.
Risk of under-estimation of credit risk under the Standardised approach
- E.
All the above
- 41.Which committee recommended Income Recignition and Asset Classification norms?
- A.
Dr Manmohan Singh Committee
- B.
P Chidambaram Commmittee
- C.
S S Tarapore Committee
- D.
Robin Cook Committee
- E.
Narasimham Committee
- 42.When an asset becomes non performing?
- A.
When it fails to generate any income for the borrower
- B.
When it fails to generate any income forthe Bank
- C.
When it is dead
- D.
When there is no performance in the unit
- E.
When the Bank declares the asset as non performing
- 43.
- A.
An account should be treated as 'out of order' if the outstanding balance remains continuously in excess of the sanctioned limit/drawing power
- B.
In cases where the outstanding balance in the principal operating account is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days as on the date of Balance Sheet or credits are not enough to cover the interest debited during the same period
- C.
I f such accounts are not renewed within 180 days from the due date
- D.
All the above
- E.
A & B above A & B above
- 44.
- A.
2 monthly dues arrears
- B.
3 monthly dues arrears
- C.
Any amount due to the bank under any credit facility is ‘overdue’ if it is not paid on the due date fixed by the bank.
- D.
6 monthly dues arrears
- E.
Depends upon the repayment fixation
- 45.What is the method of recognising income in advances accounts?
- A.
Accrual basis
- B.
Actual record of recovery
- C.
Actuarial basis
- D.
Accounting Standard basis
- E.
Case to case to basis
- 46.
- A.
Advances against term deposits, NSCs, IVPs, KVPs and Life policies
- B.
However adequate Margin should be available in such accounts
- C.
Fees and commissions earned by the banks as a result of renegotiations or rescheduling of outstanding debts should be recognised on an accrual basis over the period of time covered by the renegotiated or rescheduled extension of credit.
- D.
All the above
- E.
A & B above
- 47.Where the finance charge component of finance income is defiened?
- A.
NI Act
- B.
Sch of Charges
- C.
Notes on Accounts
- D.
AS 19 of ICAI
- E.
All the above
- 48.If interest is debited to NPA account,where it should be parked?
- A.
Interest Suspense Account
- B.
Any Proforma Account like undebited interest
- C.
Banks can use their discretion
- D.
Banks can use their discretiion to choose either A or B
- E.
None of the above
- 49.What are the items to be deducted from Gross NPAs to arrive at Net NPAs?
- A.
Balance in Interest Suspense Account
- B.
DICGC/ECGC claims received and held, pending adjustment
- C.
Part payment received and kept in Sundry creditors account pending adjustment
- D.
Total provisions held
- E.
All the above
- 50.While deducting provisions from Gross NPAs what are the items to be excluded?
- A.
Technical write off
- B.
Provision on standard assets
- C.
Recovery in Writtenn off accounts
- D.
A & B above
- E.
A & B & C above
- 51.What is NBV?
- A.
Net Block Value
- B.
Net Banking Value
- C.
Non Banking Value
- D.
Net Book Value (i.e., book value less provisions held)
- E.
None of the above
- 52.What is RERFA?
- A.
Real Effective Rate For Arbitrage
- B.
Reserve for Exchange Rate Fluctuations Account
- C.
Real Exchange Rate Fluctuation Account
- D.
Rate Exposure for Residenr Foreign Account
- E.
None of the above
- 53.What is the provisionig to be made for Country Risk?
- A.
0.25%
- B.
100%
- C.
0.25% to 100% on a graded Scale
- D.
According to Country Risk
- E.
C & D above
- 54.Who classifies the country risk of individual countries?
- A.
ECGC
- B.
BASEL COMMITTEE
- C.
IMF
- D.
World Bank
- E.
International Chamber of Commerce(IMF)
- 55.
- A.
Only if it has remained a nonperforming asset for at least two years in the books of the selling bank
- B.
As per the Banks Board Directives
- C.
After Clearance from RBI
- D.
As per Buying Bank's Board Clearance
- E.
B & C & D above
- 56.On What basis,Banks can sell NPAs to another Bank?
- A.
Cash Basis
- B.
Accrual basis
- C.
Sans Recourse basis
- D.
With recourse
- E.
A & C above
- 57.
- A.
After 15 months of holding the same in their books
- B.
At any time
- C.
But should not sell it back to the Bank from whom it was purchased
- D.
All the above
- E.
A & C above
- 58.The difference in assessment in the value of securities among Bank,Borrower,Auditor and Valuer is known as
- A.
Convergence
- B.
Deviation
- C.
Difference
- D.
Divergence
- E.
Emergence
- 59.Stock Audit of NPAs with a balance of Rs 5 crore and should be conducted at _________ intervals
- A.
Once in three years
- B.
Annual
- C.
Half Yearly
- D.
Quarterly
- E.
Bi Monthly
- 60.Colllateral immovable property should be got valued once in ___________ years
- A.
2
- B.
3
- C.
4
- D.
5
- E.
6
- 61.The institiutions have also a right of ____________ of their debt into equity,when they are participating in the restructure exercise. What is this right?
- A.
Conversion
- B.
Reissue
- C.
Preferential issue
- D.
Recompense
- E.
None of the above
- 62.The creditors( participating in restructuring) right to claim their sacrifce at later date when the company turns around, is known as
- A.
Sacrifice
- B.
Recoup
- C.
Subrogation
- D.
Recompense
- E.
Substitution
- 63.What is the arrangement under which the institution/the bank financing infrastructure projects will have an arrangement with any financial institution for transferring to the latter the outstanding in respect of such financing in their books on a predetermined basis?
- A.
Takeout Finance
- B.
Securitisation
- C.
Amortisation
- D.
Collateralised Liquid Adjustment Facility
- E.
Swaption
- 64.
- A.
20% on secured portion
- B.
30% on secured portion
- C.
B & D below
- D.
100% on unsecured portion
- E.
All the above
- 65.What is the provison on Standard residential housing loans beyond Rs. 20 lakh?
- A.
2% on outstanding
- B.
At 1 per cent
- C.
1% on regular portion and 2% on irregular portion
- D.
No Provision on standard assets
- E.
5% on the value of Prime Security and 2.5% on the value of collateral security
- 66.The Income Recognition Asset Classification Provisioning and Capital Adequacyy norms replced the earlier -----------------
- A.
Pendharkar Committee Norms
- B.
Health Code-based system for classification of advances
- C.
Secretarial Return Forms
- D.
Credit Administration Forms (CAF)
- E.
Audit Return Forms (AR)
- 67.Even if there is no recovery, on what type of advances income can be recognised?
- A.
Advances against term deposits, NSCs, IVPs, KVPs and Life policies
- B.
However adequate Margin should be available in such accounts
- C.
Fees and commissions earned by the banks as a result of renegotiations or rescheduling of outstanding debts should be recognised on an accrual basis over the period of time covered by the renegotiated or rescheduled extension of credit.
- D.
All the above
- E.
A & B above
- 68.For the purpose of asset classification,the accounts are to be tackled
- A.
Borrowerwise
- B.
Facilitywise
- C.
Individual Accountwise
- D.
Liabilitywise
- E.
None of the above
- 69.For the advances under Consortium Arrangements, how will you arrive at the NPA status?
- A.
As per Leader Bank's Classification
- B.
Based on the record of recovery of the individual member banks
- C.
Depends upon the classification of 75% of the member Banks
- D.
As per Borrower's Auditor's observation
- E.
As per RBI Inspector's observation
- 70.When erosion in the value of security can be reckoned as significant to classify such account straightaway as "Doubtful"?
- A.
10 %
- B.
20 %
- C.
30 %
- D.
40 %
- E.
50 %
- 71.When the assets are to be classified as Loss Assets straightaway?
- A.
If the available value of realisable security is less than 10% of the loan oustanding
- B.
If the available value of realisable security is less than 20% of the loan oustanding
- C.
If the available value of realisable security is less than 50% of the loan oustanding
- D.
If the available value of realisable security is less than 75% of the loan oustanding
- E.
If the available value of realisable security is less than 100% of the loan oustanding
- 72.
- A.
Advances against term deposits, NSCs eligible for surrender, IVPs, KVPs and life policies
- B.
Advances against gold ornaments, government securities and all other securities
- C.
Provided adequate margin is available in the accounts
- D.
A & B above
- E.
A & C above
- 73.
- A.
Advances against term deposits, NSCs eligible for surrender, IVPs, KVPs and life
- B.
Advances against gold ornaments
- C.
Advances against government securities and all other securities
- D.
All the above
- E.
B & C above
- 74.An account is given holiday period for servicing of interest.When this account will become NPA?
- A.
90 days from the date of debit of Interest
- B.
90 days from the instalment date
- C.
A or B whichever is earlier
- D.
90 days from the due date of payment of interest and instalment if it remains uncollected
- E.
All the above on a case to case basis
- 75.What is the present delinquency norm for identifying an advance as NPA?
- A.
30 days
- B.
60 days
- C.
90 days
- D.
180 days
- E.
360 days
- 76.When the credit facilities granted under the guarantee of Central Government will be treated as NPA?
- A.
When the Guarantee is issued.
- B.
From the date of revocation of guarantee
- C.
When the guarantee is invoked by the beneficiary
- D.
When the guarantee amount is claimed and not paid within 90 days from the due date
- E.
When the Central Government repudiates the guarantee
- 77.What are the stages,at which the restructuring/rescheduling/renegotiation of the terms of loan agreement could take place?
- A.
Before commencement of commercial production
- B.
After commencement of commercial production and after the asset has been classified as sub standard.
- C.
The rescheduling, etc., of principal and/or of interest could take place, with or without sacrifice
- D.
After commencement of commercial production and before the asset has been classified as sub standard.
- E.
All the above
- 78.
- A.
Liquid securities like deposits,NSC,IVP,KVP and LIC Policy
- B.
Immovable property like Land And Building
- C.
Movable Assets like Plant and Machinery,Stock,Vehicles etc., or invisible assets like book debts
- D.
Charge on Intangible Assets like goodwill,Patent,Trade Mark,Franchise,Royalty etc.,
- E.
Personal Guarantee of Promoters,Partners,Directors etc.,
- 79.Banks can not reschedule /restructure /renegotiate borrowal accounts with _______________ effect
- A.
Prospective
- B.
Immediate
- C.
Contingent
- D.
Future
- E.
Retrospective
- 80.Any funding of interest in respect of NPAs, if recognised as income, should be fully ___________ for.
- A.
Provided
- B.
Accounted
- C.
Secured
- D.
Called for
- E.
All the above
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