Jaiib Principle & Pactice Of Banking Final Mock

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Jaiib Principle & Pactice Of Banking Final Mock

B. P. SARKHEL Ex-Faculty Central Bank Of India. Time: 2 hours. No Negatives, Take the Certificate ,Find your grey area and reviseMay copy the Test to your database


Questions and Answers
  • 1. 
    Factor in factoring refers to
    • A. 

      Purchase goods as per sales of goods Act

    • B. 

      Conduct auction of goods

    • C. 

      Purchase receivables created out of sales of goods and services

    • D. 

      All

    • E. 

      None

  • 2. 
    Factoring is a service that is concerned with the financing and collection of account receivable generally in domestic
    • A. 

      True

    • B. 

      False

  • 3. 
    Factoring is an arrangement for
    • A. 

      Management of receivables

    • B. 

      Maintaining sales ledgers and submitting sales accounts

    • C. 

      Collecting debt

    • D. 

      All

  • 4. 
    Factoring can be
    • A. 

      With recourse

    • B. 

      Without recourse

    • C. 

      Either

    • D. 

      Neither

  • 5. 
    With recourse factoring refers to
    • A. 

      The client of the factor continues with his responsibility

    • B. 

      The factors of the client takes the entire responsibilities and makes the client free

    • C. 

      In India all factoring are with recourse

    • D. 

      In with recourse factor will pay not 100% but maximum 85% of the invoice to the client/seller

    • E. 

      1+3+4

  • 6. 
    Factor collects dues from the purchase(client's debtor on due date) and pays to the client(seller/creditor)
    • A. 

      True

    • B. 

      False

  • 7. 
    The balance payment is paid by the factor to the client /seller after recovering from the client's debtor/purchaser
    • A. 

      True

    • B. 

      False

  • 8. 
    The factor recovers financial charges from the client for funds prepaid to the later
    • A. 

      True

    • B. 

      False

  • 9. 
    Factors are entitled to service charges for maintenance of sales receivables
    • A. 

      True

    • B. 

      False

  • 10. 
    Factor may or may not incumbent credit risk
    • A. 

      True

    • B. 

      False

  • 11. 
    Factoring enables companies to sale their outstanding book debts against cash
    • A. 

      True

    • B. 

      False

  • 12. 
    There are two types of factoring,Recourse factoring and Without recourse factoring
    • A. 

      True

    • B. 

      False

  • 13. 
    Under recourse factoring , while the factor fails to collect the dues from the debtor of the client, the factor will recover the amount already paid to the client
    • A. 

      True

    • B. 

      False

  • 14. 
    In non recourse factoring the factor provides both finance and credit protection
    • A. 

      True

    • B. 

      False

  • 15. 
    In non-recourse factoring factors bear the risk of bad debts on failure to collect the dues from the purchaser / client's debtor.
    • A. 

      True

    • B. 

      False

  • 16. 
    A factor operates by buying from the client/selling company, their invoiced debts.This purchase by the factor is usually done providing credit protection to the client and bear    responsibility of credit control/collection and sales accounting work and thereby facilitating the management of the client company to concentrate on production and sales without being concerned with already sold receivables
    • A. 

      True

    • B. 

      False

  • 17. 
    Domestic factoring refers to  management of receivables emanated from domestic trade
    • A. 

      True

    • B. 

      False

  • 18. 
    Under domestic factoring the bills receivable is met up by the factors to the seller drawers on acceptance by the buyer/drawees as a prepayment of about 80% of invoiced value after deducting factor's discount at normal rate of interest for the usance period to the client supplier and the balance invoice value shall be paid to the client on collection from the purchaser
    • A. 

      True

    • B. 

      False

  • 19. 
    When the purchaser of the client seller fails to  pay the due amount on due date, the client supplier shall make good to the factor of the payment
    • A. 

      True

    • B. 

      False

  • 20. 
    Mutual Fund organization is licensed by RBI but mutual fund instruments are regulated by SEBI
    • A. 

      True

    • B. 

      False

  • 21. 
    Common Equity under Basel III should be 4.5 % as per Basel but it should be 5.5 % as per RBI.
    • A. 

      True

    • B. 

      False

  • 22. 
    Minimum Tier I capital & Capital Conservation Buffer under Basel III for banks in india should be 8 % whereas as per Basel it should be 7 %
    • A. 

      True

    • B. 

      False

  • 23. 
    CCB & CCCB in Basel III stands for:
    • A. 

      Capital Conservation Buffer / Counter Cyclical Capital Buffer

    • B. 

      Credit conservation buffer & counter cyclical credit buffer

    • C. 

      Credit creation buffer & capital & credit conservation buffer

    • D. 

      None

  • 24. 
    LCR in Basel III stands for:
    • A. 

      Limit Coverage Ratio

    • B. 

      Liquid Credit Ratio

    • C. 

      Liquidity Coverage Ratio

    • D. 

      None

  • 25. 
    Common Equity under Basel II is min.--------------------------%
    • A. 

      2

    • B. 

      2.5

    • C. 

      3.5.

    • D. 

      4.5

    • E. 

      5.5

  • 26. 
    Minimum Capital under Tier-I as per Basel II in Indian context is-----------------------%
    • A. 

      5

    • B. 

      6

    • C. 

      7

    • D. 

      8

  • 27. 
    Pillar III under Basel II refers to:
    • A. 

      Capital requirement

    • B. 

      Supervisory Review process

    • C. 

      Market Discipline

    • D. 

      None

  • 28. 
    Pillar I & pillar II in Basel II refers to
    • A. 

      Capital Requirement / Market Discipline

    • B. 

      Supervisory review process / market discipline

    • C. 

      Capital requirement / supervisory review process

    • D. 

      Supervisory Review Process / Operational risk

  • 29. 
    Tier III capital can be maximum ----------------------% subject to  min. Capital for Market risk subject to min--------------------------% should be Tier-I capital out of total min. capital capital for Market Risk
    • A. 

      250 / 28.5

    • B. 

      200 / 28.5

    • C. 

      125 / 28.5

    • D. 

      100 / 28.5

  • 30. 
    Provision on standard assets as loss reserve under tier II capital can be maximum ----------------% of RWA
    • A. 

      2.25

    • B. 

      1.25

    • C. 

      3.25

    • D. 

      4.25

  • 31. 
    Revaluation Reserve as one of the Tier II capital is to be discounted at the rate of ------------------% to reckon as tier-II capital
    • A. 

      55

    • B. 

      45

    • C. 

      50

    • D. 

      60

  • 32. 
    Subordinated Debt is one of the component of Tier II capital which is taken at discounted value according to remaining period of maturity @--------------------% on cumulative basis
    • A. 

      25

    • B. 

      20

    • C. 

      30

    • D. 

      10

  • 33. 
    Discounted value of Subordinated Debt can be reckoned as Tier-II capital subject to maximum:
    • A. 

      50 % of both Tier i & Tier II

    • B. 

      50 % of tier II

    • C. 

      50 5 of Tier I

    • D. 

      None

  • 34. 
    Bank issues bond for 5 years and one year is over. it is example of-------------------------for the purpose of reckoning as Tier-II capital
    • A. 

      Tier-I

    • B. 

      Tier-II

    • C. 

      Tier-III

    • D. 

      None

  • 35. 
    Convertible portion of Convertible Debenture is the example of--------------------Capital for CAR
    • A. 

      Tier-I

    • B. 

      Tier-II

    • C. 

      Tier-III

    • D. 

      Not counted

  • 36. 
    Total of Tier I & Tier II Capital is 900 crore which is the min.level as required under Basel II. Find out the RWA
    • A. 

      10000 crore

    • B. 

      5000 crore

    • C. 

      7500 crore

    • D. 

      None

  • 37. 
    If min capital requirement for market risk is 1000 crore, that of for credit risk is 2000 crore and that of for operational risk is 500 crore, what is the RWA for Operational Risk under basel II
    • A. 

      5400 approx.

    • B. 

      4400 aprox

    • C. 

      6500 approx

    • D. 

      None

  • 38. 
    Commercial Bills is-----------------------market instrument
    • A. 

      Money

    • B. 

      Stock

    • C. 

      Debt

    • D. 

      (!+3)

  • 39. 
    REPO is ------------------------------Borrowing by bank
    • A. 

      Unsecured

    • B. 

      Collateralized

    • C. 

      Clean

    • D. 

      Bank can not borrow under REPO

  • 40. 
    Increase in Repo Rate makes credit----------------------
    • A. 

      Costlier

    • B. 

      Cheaper

    • C. 

      No effect

    • D. 

      Can not be determined

  • 41. 
    ----------------------------is direct instrument under Liquidity Adjustment Facility(LAF)
    • A. 

      Bank Rate

    • B. 

      CRR

    • C. 

      SLR

    • D. 

      REPO

  • 42. 
    MSF can be availed by bank max Rs.------------------------ and for max. period of ------------------------days
    • A. 

      1 % of previous fortnight NDTL / overnoght

    • B. 

      2% of previous fortnight NDTL / 3 days

    • C. 

      500 crore max / overnight

    • D. 

      2 % of previous fortnight NDTL / overnight

  • 43. 
    In the Mardia Chemicals vs Union of India,2004,what did the Supreme Court declare as invalid?
    • A. 

      Entire SARFAESI Act,2002

    • B. 

      Creation of Security Interest

    • C. 

      Formation of Reconstruction Companies

    • D. 

      Condition to pay 75% of the amount as a precondition while preferring appeal to the DRT

    • E. 

      NONE

  • 44. 
    Whether moveable securities in possession of the bank can be sold without the intervention of the court?
    • A. 

      Now a court order is a must to sell the security

    • B. 

      Yes, bank can sell as per provisions in Indian Contract Act,1872

    • C. 

      Yes, as the SARFAESI Act,2002 has made provisions to that effect

    • D. 

      No, until the account is declared as NPA by the bank

  • 45. 
    When any bank or financial institution obtains a charge against property , with which authority will the transaction have to be registered under the SARFAESI Act,2002?
    • A. 

      With the Central Registry within 30 days from the date of the charge

    • B. 

      With ROC within 60 days from the date of charge creation

    • C. 

      With the Registrar of Assurances within whose jurisdiction the property lies

    • D. 

      With RBI

    • E. 

      With SEBI

  • 46. 
    Which from amongst the following may be a reason for cancellation of registration of Securisation company by RBI without giving a hearing opportunity?
    • A. 

      The Company fails to keep accounts as per RBI norms

    • B. 

      The company ceases to carry on the business of Securitisation or Reconstruction

    • C. 

      The company fails to hold investment from the qualified investor

    • D. 

      The company does not fulfil any of the conditions imposed at the time of registration

    • E. 

      None

  • 47. 
    Besides the SARFAESI Act , some other laws require some registration of charge created in the property.Is such double registration avoidable?
    • A. 

      Yes, the creditor can choose under which law he needs registration

    • B. 

      No, registration under SARFAESI Act as well as any other applicable law will have to be made.. SARFAESI Act is not substitute of any other law

    • C. 

      Yes, if one charge charge noting is by a registered document

    • D. 

      No, as the Civil Courts and DRT still have jurisdiction against the property, both Registrations are required

  • 48. 
    After coming into operation , the provisions relating to CERSAI,the banks and financial institutes will have to register  all security interests created in the asset
    • A. 

      True

    • B. 

      False

  • 49. 
    Insurance contracts are contracts of ----
    • A. 

      Absolute good conduct

    • B. 

      Absolute good faith

    • C. 

      Absolute good security

    • D. 

      Absolute bad security

  • 50. 
    • A. 

      True

    • B. 

      False

  • 51. 
    Bank has obtained recovery certificate against a defaulting borrower in a DRT. The aggrieved borrower preferred appeal before the Appellate Tribunal. If the recovery certificate was for Rs 64 lac, whether any amount has to be deposited?
    • A. 

      No , the borrower can straightway put an appeal

    • B. 

      Yes, the borrower has to deposit Rs 48 lac minimum before filing the appeal

    • C. 

      The borrower has to deposit minimum Rs.30 lac

    • D. 

      No appeal can be filed against the order of DRT