Jaiib Mock Testjaiib Candidates At Bangur-sealdah

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  • 1/60 Questions

    Which of the following is not a debt market instrument

    • Treasury Bills
    • Commercial Bills
    • 1+ 2
    • Debentures
    • 3 + 4
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Jaiib Mock Testjaiib Candidates At Bangur-sealdah - Quiz

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  • 2. 

    RBI performs which of the following function to control banks

    • Regulatory

    • Supervisory

    • Both

    • None

    Correct Answer
    A. Both
    Explanation
    The RBI performs both regulatory and supervisory functions to control banks. The regulatory function involves formulating and implementing rules and regulations for banks to ensure their stability and soundness. This includes setting capital adequacy requirements, conducting inspections, and enforcing compliance with anti-money laundering and other regulations. The supervisory function involves monitoring and overseeing the operations of banks to ensure their compliance with the regulations and to identify and address any risks or issues that may arise. By performing both functions, the RBI aims to maintain a safe and efficient banking system in the country.

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  • 3. 

    Which of the following instrument is not negotiable but transferable

    • Commercial papers

    • Bill of lading

    • Certificate of Deposit

    • Commercial Bills

    Correct Answer
    A. Bill of lading
    Explanation
    A bill of lading is a document issued by a carrier to acknowledge the receipt of goods for shipment. While it is transferable, meaning it can be assigned or transferred to another party, it is not negotiable. This means that it does not have the characteristics of negotiability, such as being freely transferable to a holder in due course, and therefore cannot be used as a means of payment or as a negotiable instrument in the same way as commercial papers, certificate of deposit, or commercial bills.

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  • 4. 

    A boy is stated to be minor in case he has not attained _______ years of age as per 

    • Indian Contract Act

    • Indian Majority Act

    • Indian Minority Act

    • None

    Correct Answer
    A. Indian Minority Act
    Explanation
    The Indian Minority Act defines a boy as a minor if he has not attained a certain age. This act determines the age at which a person is considered to be an adult and capable of entering into contracts. Therefore, the correct answer is the Indian Minority Act.

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  • 5. 

    A loan after becoming NPA will remain substandard category for maximum period of

    • 90 days

    • 12 months

    • 6 months

    • So long it is not classified as Doubtful Assets

    Correct Answer
    A. 12 months
    Explanation
    After a loan becomes a Non-Performing Asset (NPA), it will be classified as a substandard category for a maximum period of 12 months. This means that the borrower has failed to make the required loan payments for a period of time, and the loan is considered to have a higher risk of default. During this 12-month period, the bank or lender will closely monitor the loan and take necessary actions to recover the amount. If the loan is not classified as a Doubtful Asset within this period, it may undergo further classification or resolution processes.

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  • 6. 

    Maximum value of any pre paid instrument shall not exceed Rs

    • 10000

    • 25000

    • 50000

    • 75000

    Correct Answer
    A. 50000
    Explanation
    The maximum value of any pre-paid instrument in India is limited to Rs 50,000. This means that individuals cannot load more than Rs 50,000 into any prepaid instrument such as prepaid cards, mobile wallets, or other digital payment instruments. This limit is imposed to prevent money laundering, illegal transactions, and to ensure the safety and security of financial transactions in the country.

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  • 7. 

    OTCEI stands for

    • Over the counter exchange of India

    • Over the counter earning of income

    • Over the counter essential instruments

    • None

    Correct Answer
    A. Over the counter exchange of India
    Explanation
    OTCEI stands for Over the counter exchange of India. This refers to a stock exchange in India that operates on an over-the-counter basis, meaning that it does not have a physical trading floor like traditional stock exchanges. Instead, trades are conducted electronically, allowing for greater accessibility and flexibility. The OTCEI was established in 1990 with the aim of providing a platform for small and medium-sized companies to raise capital and trade their shares. It offers a transparent and efficient trading system, making it easier for investors to buy and sell securities.

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  • 8. 

    CCIL stands for

    • CLEARING CREDIT INVESTMENT AND LIQUIDITY

    • CREDIT CORPORATION OF INDIA LTD

    • CLEARING CORPORATION OF INDIA LTD

    • NONE

    Correct Answer
    A. CLEARING CORPORATION OF INDIA LTD
    Explanation
    CCIL stands for Clearing Corporation of India Ltd. This organization is responsible for providing clearing and settlement services for various financial instruments such as government securities, money market instruments, and foreign exchange derivatives in India. It ensures the safety and efficiency of the Indian financial markets by acting as a central counterparty and mitigating counterparty risks.

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  • 9. 

    Penalty clause for complaint related to ATM transaction over non compliance by banks beyond stipulated period is Rs. ________ per day beyond _______ days

    • 150 / 12

    • 150 / 10

    • 100 / 12

    • 100 / 7

    • None / None

    Correct Answer
    A. 100 / 7
    Explanation
    The penalty clause for a complaint related to an ATM transaction over non-compliance by banks beyond the stipulated period is Rs. 100 per day beyond 7 days.

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  • 10. 

    While preparing Final accounts the real assets will find the place in

    • Asset side of Profit & Loss

    • Asset side of Balance Sheet

    • Debit side of Profit & Loss a/c

    • Credit side of Trading a/c

    Correct Answer
    A. Asset side of Balance Sheet
    Explanation
    When preparing final accounts, real assets are recorded on the asset side of the balance sheet. The balance sheet is a financial statement that shows the company's assets, liabilities, and equity at a specific point in time. Real assets, such as land, buildings, machinery, and equipment, are long-term assets that are owned by the company and used in its operations. Placing these assets on the asset side of the balance sheet provides a clear and comprehensive overview of the company's total assets and their value.

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  • 11. 

    Which one of the following is an unsecured instrument

    • Commercial paper

    • Certificate of deposit

    • Bond

    • All

    • None

    Correct Answer
    A. All
    Explanation
    All of the options listed (commercial paper, certificate of deposit, and bond) are considered unsecured instruments. This means that they do not have any collateral backing them. In contrast, secured instruments are backed by assets or collateral that can be used to recover the investment in case of default. Unsecured instruments are typically considered riskier than secured instruments because there is no specific asset or collateral that can be claimed in case of default.

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  • 12. 

    In which year the Payment and Settlement System Act was passed and in which year Payment and Settlement System Regulations were framed to provide necessary statutory back up to RBI

    • 2007 / 2008

    • 2005 / 2006

    • 2006 / 2007

    • 2008 / 2009

    Correct Answer
    A. 2007 / 2008
    Explanation
    The Payment and Settlement System Act was passed in 2007 and the Payment and Settlement System Regulations were framed in 2008. These actions were taken to provide the necessary statutory back up to the Reserve Bank of India (RBI) in the field of payment and settlement systems.

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  • 13. 

    NGRTGS stands for

    • NEWLY GRADED RTGS

    • NEXT GENERATION RTGS

    • NEMERIC AND GRID RTGS

    • NUMBER GENERATED RTGD

    Correct Answer
    A. NEXT GENERATION RTGS
    Explanation
    NGRTGS stands for Next Generation RTGS. This acronym refers to an updated or advanced version of the Real-Time Gross Settlement (RTGS) system. The RTGS system is used for large-value and time-critical interbank fund transfers. The term "Next Generation" suggests that NGRTGS is a newer and improved version of the RTGS system, possibly incorporating enhanced features, technology, or functionality to facilitate faster and more secure transactions.

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  • 14. 

    CCIL plays the crucial role of a CCP in the government securities, USD - INR exchange and collaterised borrowing and lending operation. CCP stands for

    • CLEARING CORPORATION FOR PAYMENT

    • CENTRAL COUNTER PARTY

    • CASH AND CLEARING PAYMENT

    • NONE

    Correct Answer
    A. CENTRAL COUNTER PARTY
    Explanation
    CCIL plays a crucial role as a CCP in various financial operations such as government securities, USD - INR exchange, and collaterised borrowing and lending. A CCP, or Central Counter Party, is an entity that acts as an intermediary between buyers and sellers in financial transactions. It ensures the settlement of trades by becoming the buyer to every seller and the seller to every buyer, thereby reducing counterparty risk. In this context, the answer "CENTRAL COUNTER PARTY" accurately describes the role played by CCIL.

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  • 15. 

    Cash Reserve Ratio is defined in

    • B.R. Act

    • RBI Act

    • Sale of Goods Act

    • Transfer of Property Act

    Correct Answer
    A. RBI Act
    Explanation
    The correct answer is RBI Act. The Cash Reserve Ratio (CRR) is a monetary policy tool used by the Reserve Bank of India (RBI) to regulate the amount of funds that banks need to keep with the central bank. It is a legal requirement for banks to maintain a certain percentage of their net demand and time liabilities as cash reserves with the RBI. The RBI Act empowers the central bank to enforce this requirement and regulate the CRR as part of its role in controlling the money supply and ensuring financial stability in the country.

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  • 16. 

    Dematerialisation of share means

    • Conversion of shares from electronic to physical form

    • Transfer of shares from buyer to seller

    • Transfer of shares from seller to buyer

    • Converting shares from physical to electronic form

    Correct Answer
    A. Converting shares from physical to electronic form
    Explanation
    Dematerialisation of shares refers to the process of converting physical share certificates into electronic form. This process involves the elimination of physical share certificates and the creation of electronic records, which are held in a demat account. This allows for easy and convenient trading of shares, as the shares can be bought or sold electronically without the need for physical share certificates.

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  • 17. 

    IRDA is the

    • Regulatory authority for framing regulations to control insurance business

    • Regulatory authority for controlling short term money market operations

    • Regulatory authority for controlling bond markets

    • Regulatory authority for controlling forex business

    Correct Answer
    A. Regulatory authority for framing regulations to control insurance business
    Explanation
    The correct answer is "Regulatory authority for framing regulations to control insurance business." IRDA, or the Insurance Regulatory and Development Authority, is responsible for regulating and controlling the insurance industry in India. They set the guidelines and regulations that insurance companies must follow to ensure fair practices, protect policyholders' interests, and maintain the stability of the insurance market.

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  • 18. 

    Governor of RBI and four Deputy governors are appointed by

    • President of India

    • Central Government

    • Parliament

    • Empowered group appointed by finance dept GOI

    Correct Answer
    A. Central Government
    Explanation
    The correct answer is Central Government. The Governor of the Reserve Bank of India (RBI) and the four Deputy Governors are appointed by the Central Government. This is in line with the RBI Act, 1934, which grants the Central Government the authority to appoint these positions. The Central Government plays a crucial role in the selection and appointment of these key positions in the RBI, ensuring that individuals with the necessary qualifications and experience are chosen to lead the country's central bank.

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  • 19. 

    The rationale behind regulation of the banking / financial system is

    • To generate, maintain and promote confidence and trust of the public in the banking / financial system

    • To protect inventors' interest by adequate / timely disclosure by the institutions and access to the information by the investors.

    • To ensure that the financial markets are both fair and efficient

    • To ensure that the participants measure up to the rules of the market place

    • All of the above

    Correct Answer
    A. All of the above
    Explanation
    Regulation of the banking/financial system is necessary for multiple reasons. Firstly, it aims to generate, maintain, and promote confidence and trust of the public in the system. This is crucial for the stability and proper functioning of the financial sector. Secondly, regulation helps protect investors' interests by ensuring that institutions provide adequate and timely disclosure of information, allowing investors to make informed decisions. Additionally, regulation ensures that financial markets are fair and efficient, preventing any unfair practices or manipulation. Lastly, it ensures that all participants in the market adhere to the rules and regulations, promoting integrity and transparency. Therefore, all of the above reasons justify the regulation of the banking/financial system.

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  • 20. 

    The typical retail deposit products do not include

    • Senior citizen deposit product

    • Zero balance account for salaried class people

    • Term deposit products

    • Credit card products

    Correct Answer
    A. Credit card products
    Explanation
    The correct answer is credit card products. This is because credit cards are not considered as typical retail deposit products. Retail deposit products usually refer to accounts or products that involve depositing money into a bank or financial institution, such as savings accounts, fixed deposits, or current accounts. Credit cards, on the other hand, are a form of borrowing money from the bank or financial institution and do not involve depositing funds.

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  • 21. 

    Non fund based services include

    • Term loan

    • Letter of credit

    • Working capital finance

    • Export credit

    Correct Answer
    A. Letter of credit
    Explanation
    Non fund based services refer to financial services that do not involve the actual transfer of funds from the bank to the customer. These services are typically provided by banks to facilitate international trade and business transactions. A letter of credit is a specific type of non fund based service where the bank guarantees payment to the seller on behalf of the buyer, ensuring that the seller will be paid once the agreed-upon conditions are met. This eliminates the risk for both parties involved in the transaction and promotes trust and confidence in international trade.

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  • 22. 

    T- Bills is money market instrument of----------------authority

    • GOI

    • RBI

    • Either

    • No such instruments

    Correct Answer
    A. GOI
    Explanation
    T-Bills, also known as Treasury Bills, are short-term money market instruments issued by the government of a country to finance its short-term cash flow requirements. In this case, the correct answer is "GOI" which stands for Government of India. Therefore, T-Bills are money market instruments of the Government of India.

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  • 23. 

    The settlement of money market deals are operated through

    • NEFT

    • RTGS

    • Bankers' cheque

    • ECS

    Correct Answer
    A. RTGS
    Explanation
    RTGS (Real Time Gross Settlement) is the correct answer for the question. RTGS is a system used for settling high-value transactions in real-time. It allows for immediate transfer of funds from one bank to another on a gross basis. Unlike NEFT (National Electronic Funds Transfer), which operates in batches and settles transactions at specific intervals, RTGS settles transactions individually and instantly. Bankers' cheque and ECS (Electronic Clearing Service) are not specifically used for settling money market deals, making them incorrect options.

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  • 24. 

    FIU-INDIA stands for

    • Financial Intelligence Unity - India

    • Financial Integrated Unit - India

    • Financial Intelligence Unit - India

    • Finance and Industrial Unit - India

    Correct Answer
    A. Financial Intelligence Unit - India
    Explanation
    FIU-INDIA stands for Financial Intelligence Unit - India. This acronym refers to an organization in India that is responsible for collecting, analyzing, and disseminating financial information to combat money laundering, terrorist financing, and other financial crimes. The correct answer is Financial Intelligence Unit - India because it accurately represents the purpose and function of this organization.

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  • 25. 

    One of the key elements of KYC policy is

    • Customer Identification Policy

    • Customer Identification Procedure

    • Customer Acceptance Procedure

    • Customer Acceptance Principle

    Correct Answer
    A. Customer Identification Procedure
    Explanation
    The correct answer is "Customer Identification Procedure". KYC (Know Your Customer) policy is a set of guidelines and procedures that financial institutions must follow to verify and identify their customers. One of the key elements of KYC policy is the customer identification procedure, which outlines the steps and processes for verifying the identity of customers. This procedure helps ensure that financial institutions can accurately identify and assess the risks associated with their customers, as well as comply with anti-money laundering and counter-terrorism financing regulations.

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  • 26. 

    The objective of BCSBI is to ensure fair treatment to

    • Senior citizens

    • Bank Employees

    • Customers

    • Women Segments

    Correct Answer
    A. Customers
    Explanation
    The objective of BCSBI is to ensure fair treatment to customers. BCSBI stands for Banking Codes and Standards Board of India, which is an independent organization that sets standards for banks in India to ensure fair and transparent banking practices. The main focus of BCSBI is to protect the rights of customers and ensure that they are treated fairly by banks. This includes providing clear and transparent information, fair pricing, efficient complaint handling, and overall good customer service. BCSBI aims to build trust and confidence among customers in the banking system.

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  • 27. 

    In terms of SARFAESI Act 2002 obligor means

    • Bank

    • Borrower

    • Guarantor

    • Authorized person

    Correct Answer
    A. Borrower
    Explanation
    The term "obligor" refers to a person or entity who has an obligation or a legal responsibility towards someone else. In the context of the SARFAESI Act 2002, the obligor would be the borrower. This means that the borrower is the individual or entity who has borrowed funds from a bank or financial institution and is obligated to repay the loan amount according to the terms and conditions agreed upon. Therefore, the correct answer is "borrower."

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  • 28. 

    Economic life 7 years. Find the rate of depreciation ------ % for the 3 year under SYD

    • 3.57

    • 25

    • 17.85

    • None

    Correct Answer
    A. 17.85
    Explanation
    The rate of depreciation for the 3rd year under SYD (Sum of Years' Digits) method is 17.85%. The SYD method calculates depreciation based on the sum of the digits of the asset's useful life. In this case, the economic life is 7 years. The sum of the digits for a 7-year useful life is 28 (7+6+5+4+3+2+1). To calculate the depreciation for the 3rd year, we divide the remaining useful life (7-3=4) by the sum of the digits (28) and multiply by the initial value of the asset. This gives us 4/28 * 100 = 14.29%. Since this is the depreciation for the 4th year, the depreciation for the 3rd year would be double that amount, which is 17.85%.

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  • 29. 

    In which of the following methods of deprecation the book value of an asset would not be zero where there is no scrap value

    • SLM

    • Declining balance method

    • Double declining balance method

    • SYD

    Correct Answer
    A. Declining balance method
    Explanation
    The declining balance method of depreciation allows for a faster depreciation of an asset in the earlier years and slower depreciation in the later years. This method does not take into account the salvage or scrap value of the asset. Therefore, even when there is no scrap value, the book value of the asset would not be zero under the declining balance method of depreciation.

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  • 30. 

    Cost of a machine Rs. 150000. Economic life 5 years. Find the rate of depreciation under SLM and WDV 

    • 20%

    • 25%

    • 33.33%

    • None

    Correct Answer
    A. 20%
    Explanation
    The rate of depreciation under the Straight Line Method (SLM) is calculated by dividing the cost of the machine by its economic life. In this case, the cost of the machine is Rs. 150000 and the economic life is 5 years. So, the rate of depreciation under SLM would be 150000/5 = 30000 per year. To convert this into a percentage, we divide it by the cost of the machine and multiply by 100. Therefore, the rate of depreciation under SLM is (30000/150000) * 100 = 20%.

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  • 31. 

    A Motor Byke purchased in the month of July 2014 costing Rs. 60000. If economic life is five years and scrap value is 10000 find the amount of depreciation as of 31.03.2018 and find the book value of the asset as at the end of 31.03.2018

    • 37500 & 22500

    • 40000 & 20000

    • 45000 & 15000

    • None

    Correct Answer
    A. 37500 & 22500
    Explanation
    The amount of depreciation as of 31.03.2018 is Rs. 37,500. This can be calculated by subtracting the scrap value of Rs. 10,000 from the original cost of Rs. 60,000, and then dividing the result by the economic life of 5 years. The book value of the asset as at the end of 31.03.2018 is Rs. 22,500. This can be calculated by subtracting the amount of depreciation (Rs. 37,500) from the original cost of Rs. 60,000.

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  • 32. 

    You have planned to marry after six years when you need 10 lacs. How much you have to invest when rate of interest is 8% compounded quarterly

    • 596700

    • 624700

    • 621700

    • None

    Correct Answer
    A. None
  • 33. 

    Find the effective rate for the nominal rate of 12% compounded monthly

    • 12.36

    • 12.68

    • 12.26

    • 12.76

    Correct Answer
    A. 12.68
    Explanation
    The effective rate for a nominal rate compounded monthly can be calculated using the formula: (1 + (nominal rate / number of compounding periods))^number of compounding periods - 1. In this case, the nominal rate is 12% and it is compounded monthly. Plugging in the values, we get (1 + (0.12 / 12))^12 - 1 = 0.1268 or 12.68%. Therefore, the effective rate for the given nominal rate is 12.68.

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  • 34. 

    You have taken a loan of certain amount to be repaid in 24 EMI of Rs.5000 @9%. find the loan amount

    • 112460

    • 110460

    • 109460

    • None

    Correct Answer
    A. 109460
    Explanation
    The loan amount can be calculated using the formula for the present value of an annuity. In this case, the present value of 24 equal monthly payments of Rs.5000 at an interest rate of 9% is 109460. Therefore, the loan amount is 109460.

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  • 35. 

    Your branch debits account of customer P and credits customer Q for Rs 5000. The CBS system will post the transaction as follows

    • Debit P a/c Rs. 5000; and credit Q Account Rs. 5000,

    • Debit P a/c Rs. 5000; and credit Q Account Rs. 5000, then Debit Q a/c Rs. 5000; and credit Balancing Rs. 5000,

    • Debit P a/c Rs. 5000; and credit Balancing Account Rs. 5000, then Debit Balancing a/c Rs. 5000; and credit Q Account Rs. 5000,

    • None

    Correct Answer
    A. Debit P a/c Rs. 5000; and credit Balancing Account Rs. 5000, then Debit Balancing a/c Rs. 5000; and credit Q Account Rs. 5000,
    Explanation
    The correct answer is Debit P a/c Rs. 5000; and credit Balancing Account Rs. 5000, then Debit Balancing a/c Rs. 5000; and credit Q Account Rs. 5000. This is the correct sequence of debiting and crediting the accounts in the CBS system. Initially, the transaction debits customer P's account and credits the balancing account. Then, it debits the balancing account and credits customer Q's account. This ensures that the transaction is properly recorded and balanced in the system.

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  • 36. 

    On completion of day's transactions, branch performs 

    • Day end options

    • Day end operation

    • Day end opinion

    • Damy end optimum

    Correct Answer
    A. Day end operation
    Explanation
    The correct answer is "Day end operation." This refers to the tasks or processes that a branch completes at the end of the day in order to close out the day's transactions. It could include activities such as reconciling accounts, balancing cash drawers, preparing reports, and ensuring all transactions are recorded accurately.

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  • 37. 

    After business hours of the bank, the following function is not performed

    • Supplementary report is printed and filed

    • Cash denomoination report is printed and filed

    • Vouchers are tallied and signed

    • Intimation of branch closure is sent by mail

    Correct Answer
    A. Intimation of branch closure is sent by mail
    Explanation
    After business hours of the bank, all the functions mentioned in the options are performed except for sending the intimation of branch closure by mail. This task is typically done during business hours to inform the necessary parties about the closure of the branch.

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  • 38. 

    In CBS environment CDC stands for

    • Control Data Cabling

    • Central Data Centre

    • Core Device control

    • Core Data Centre

    Correct Answer
    A. Central Data Centre
    Explanation
    CDC stands for Central Data Centre. In a CBS environment, a Central Data Centre refers to a centralized location where all the data and information of an organization are stored, managed, and processed. It serves as the main hub for data storage, backup, and retrieval. The Central Data Centre ensures the availability, security, and efficient management of data for the organization.

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  • 39. 

    BCSBI publishes 

    • Code of Bank's Commitment to Customers

    • Code of Bank's Commitment to Micro & Small Enterprises

    • 1 + 2

    • Code of Bank's Commitment to Senior Citizens for Banking Services

    Correct Answer
    A. 1 + 2
    Explanation
    BCSBI publishes the Code of Bank's Commitment to Customers and the Code of Bank's Commitment to Micro & Small Enterprises. These codes outline the commitments and responsibilities that banks have towards their customers and micro & small enterprises. They provide guidelines for fair and transparent banking practices, ensuring that customers and small businesses are treated fairly and their rights are protected. By publishing these codes, BCSBI aims to promote trust and confidence in the banking sector and enhance customer satisfaction.

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  • 40. 

    Total Assets = Total claim of outsiders + Net worth  

    • True

    • False

    Correct Answer
    A. True
    Explanation
    This statement is true because total assets represent the sum of the claims of both outsiders (such as creditors and lenders) and the net worth of the company. The net worth is the difference between a company's total assets and its total liabilities. Therefore, the equation Total Assets = Total claim of outsiders + Net worth is accurate, as it accounts for all the claims on a company's assets.

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  • 41. 

    What will be the effect in Balance sheet when the business has purchased goods for Rs. 500000 on credit.

    • Balance in the bank a/c will be reduced by Rs. 500000

    • Balance in the purchase a/c will be reduced by Rs.500000

    • Balance in cash and Bank a/c will have direct proportionate impact of Rs.250000 each

    • Balance in Sundry Creditor a/c will be increased by Rs. 500000

    Correct Answer
    A. Balance in Sundry Creditor a/c will be increased by Rs. 500000
    Explanation
    When a business purchases goods on credit, it means that the business has received the goods but has not yet paid for them. This transaction increases the liability of the business towards its creditors. In this case, the balance in the Sundry Creditor account will be increased by Rs. 500000, representing the amount owed to the creditors for the goods purchased. This will have an impact on the balance sheet by increasing the liabilities of the business.

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  • 42. 

    In case of Low risk customers, norms for periodic updation of full KYC is 

    • 5 years

    • 8 years

    • 10 years

    • 12 years

    Correct Answer
    A. 10 years
    Explanation
    For low-risk customers, the norms for periodic updation of full KYC is 10 years. This means that these customers are required to update their KYC information every 10 years to ensure that their details are accurate and up to date. This longer time frame for updation is based on the assessment that these customers pose a lower risk in terms of money laundering or terrorist financing activities. By allowing a longer period between updations, it reduces the burden on both the customers and the financial institutions while still maintaining a reasonable level of risk mitigation.

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  • 43. 

    Peculiar features of accounting system in banks give 

    • Relatively lesser emphasis on books of prime entry such as cash books or journal

    • Relatively greater emphasis on books of prime entry such as cash books or journal

    • Highest emphasis on books of prime entry such as cash books or journal

    • None

    Correct Answer
    A. Relatively lesser emphasis on books of prime entry such as cash books or journal
    Explanation
    The correct answer is "relatively lesser emphasis on books of prime entry such as cash books or journal." This means that the accounting system in banks does not place as much importance on books like cash books or journals compared to other types of books. This could be because banks have specific accounting procedures and systems in place that prioritize other types of financial records.

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  • 44. 

    Need for bank reconciliation is 

    • To detect errors and to take timely action for correction of balances

    • To reconcile the balance shown as per the cash book and the balance as per the pass book

    • 1 & 2

    • Answer no 1 only

    Correct Answer
    A. 1 & 2
    Explanation
    The need for bank reconciliation is to detect errors and take timely action for correction of balances. It is also necessary to reconcile the balance shown as per the cash book and the balance as per the passbook. Therefore, the correct answer is option 1 & 2.

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  • 45. 

    Bank reconciliation is done by

    • Banks

    • Bank employees

    • Companies

    • None

    Correct Answer
    A. Companies
    Explanation
    Bank reconciliation is a process carried out by companies to compare their own records of transactions with the bank's records. This is done to identify any discrepancies or errors that may have occurred, such as missing deposits or unauthorized withdrawals. By reconciling their records with the bank's, companies can ensure the accuracy of their financial statements and detect any fraudulent activities. Therefore, companies are responsible for conducting bank reconciliations to maintain the integrity of their financial records.

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  • 46. 

    Back to Back LC means

    • LC which id issued as a back up to help the exporter

    • LC that is written both on the front side and back side of the undertaking

    • Further LC that can be opened on the basis of original LC

    • The LC exporter gets finance from the bank for production of goods to be expored.

    Correct Answer
    A. Further LC that can be opened on the basis of original LC
    Explanation
    Back to back LC refers to a letter of credit that is opened by a beneficiary (exporter) using another letter of credit as collateral. The original LC serves as security for the second LC, allowing the exporter to obtain financing or make payments to suppliers. This arrangement is commonly used when the exporter needs to purchase goods or services from a third party to fulfill the requirements of the original LC. By opening a back to back LC, the exporter can ensure smooth transactions and fulfill their obligations under the original LC.

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  • 47. 

    Issuing bank in the parlance of LC refers to

    • Applicant's bank issuing LC

    • Beneficiary's bank issuing LC

    • Exporter's bank issuing and negotiating documents.

    • Confirming bank issuing confirmation

    Correct Answer
    A. Applicant's bank issuing LC
    Explanation
    The issuing bank in the context of a Letter of Credit (LC) refers to the bank that is responsible for issuing the LC on behalf of the applicant. The LC is a financial instrument that guarantees payment to the beneficiary (exporter) upon the fulfillment of certain conditions. Therefore, the applicant's bank is the one that issues the LC, outlining the terms and conditions of the transaction and providing assurance to the beneficiary that they will receive payment.

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  • 48. 

    Deferred payment guarantee means

    • Any guarantee issued by buyer's bank for making future payments

    • Any guarantee issued by seller's bank for making future payments

    • Any of the above

    • None

    Correct Answer
    A. Any guarantee issued by buyer's bank for making future payments
    Explanation
    Deferred payment guarantee refers to a guarantee issued by the buyer's bank to ensure that future payments will be made. This means that if the buyer fails to make the payment at the agreed time, the bank will step in and fulfill the payment obligation on behalf of the buyer. It provides assurance to the seller that they will receive the payment even if the buyer defaults. Therefore, the correct answer is "any guarantee issued by buyer's bank for making future payments."

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  • 49. 

    As per Basel committee market risk may arise from

    • Treasury operations

    • Issuance Letter of Guarantee

    • High interest rate variation

    • Issuance of Letter of credit

    Correct Answer
    A. High interest rate variation
    Explanation
    Market risk refers to the potential for losses in financial markets due to factors such as changes in interest rates, exchange rates, or market prices. High interest rate variation is a valid explanation for market risk because when interest rates fluctuate significantly, it can lead to changes in the value of financial instruments such as bonds, loans, or derivatives. This can result in losses for financial institutions or investors who hold these instruments. Therefore, high interest rate variation is a potential source of market risk as identified by the Basel committee.

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Quiz Review Timeline (Updated): Aug 15, 2023 +

Our quizzes are rigorously reviewed, monitored and continuously updated by our expert board to maintain accuracy, relevance, and timeliness.

  • Current Version
  • Aug 15, 2023
    Quiz Edited by
    ProProfs Editorial Team
  • Apr 16, 2015
    Quiz Created by
    Bishnu1960

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