JIB-211-PPB-M-A-E040

PRINCIPALS AND PRACTICE OF BANKING   ::   MCQ FROM BOOK

TEST No:JIB-211-PPB-M-A-E040 :: No of Questions:  040   ::   Time Allowed : 33  Minutes
Directions: Please Tick Appropiate Option and Submit, Inform Serial Number of Questions where you need detailed Explanations to bhagirathprayash@gmail.com or Massage to 9462900411

Question 1:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Factoring service means:
(a) Collection of bills 
(b) Discounting of bills 
(c) Maintenance of account books 
(d) All of the above. 

Answer: (d) All of the above.

Question 2:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The type of arrangement under which a bank pays the seller the value of the bill and later collects it from the buyer on the due date is called:
(a) Bill discounting 
(b) Factoring 
(c) Forfeiting 
(d) None. 

Answer: (a) Bill discounting

Question 3:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The type of factoring under which the factor collects back from the seller the amount paid by him in case of non-payment of the bills on the due date is called:
(a) Recourse factoring 
(b) Non-recourse factoring 
(c) Bills discounting 
(d) Bills purchased. 

Answer: (a) Recourse factoring

Question 4:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Under domestic factoring, the payment of the bills that the seller gets from the factor is:
(a)100 per cent of the value of the bills immediately on submission. 
(b) nearly 80 per cent of the bill amount upon tendering the bill and the balance on due date. 
(c) nearly 80 per cent of the bill amount upon tendering the bill and the balance on due date after collecting it from the buyer.  
(d)100 per cent of the value of the bill only after collection from the buyer. 

Answer: (c) nearly 80 per cent of the bill amount upon tendering the bill and the balance on due date after collecting it from the buyer.

Question 5:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In international factoring, the number of factors will be:
(a) 2 
(b) 1 
(c) 1  
(d) more than 2 

Answer: (a) 2

Question 6:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Forfeiting provides finance against the export receivables to an exporter:
(a) with recourse to the exporter 
(b) without recourse to the exporter 
(c) both 
(d) either one 

Answer: (b) without recourse to the exporter

Question 7:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Forfaiter is:
(a) an intermediary between an exporter and importer 
(b) an exporter 
(c) an importer 
(d) a bank. 

Answer: (a) an intermediary between an exporter and importer

Question 8:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Forfaiting provides to the exporter against receivables:
(a) 100 per cent financing 
(b) 80 per cent financing 
(c) depending on the contract with the forfaiter 
(d) none. 

Answer: (a) 100 per cent financing

Question 9:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Forfaiting enables the exporter to avoid the following risks:
(a) interest-rate risk 
(b) Currency risk 
(c) Credit risk and political risk 
(d) all. 

Answer: (d) all.

Question 10:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Bank Guarantees are issued by:
(a) any bank 
(b) only specified banks 
(c) only banks permitted to do this type of business 
(d) none. 

Answer: (a) any bank

Question 11:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In a bank guarantee, the numbers of parties involved in the agreement are:
(a) three 
(b) two 
(c) many 
(d) one. 

Answer: (a) three

Question 12:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Letter of Credit is defined in the:
(a) Indian Contract Act 
(b) Negotiable Instruments Act 
(c) Transfer of Property Act 
(d) None. 

Answer: (d) None.

Question 13:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

A revolving Letter of Credit is one which provides that the amount of drawing stipulated in it will be available to the beneficiary: again and again as may be agreed between the buyer and the seller within a stipulated period.
(a) Any number of times 
(b) Only one once 
(c) None 
(d) Two Times 

Answer: (a) Any number of times

Question 14:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

A forward exchange contract is a firm contract for the purchase/sale of a specified quantity of a stated foreign currency at a pre-determined exchange rate between the bank and its:
(a) exporters 
(b) importers 
(c) both 
(d) none 

Answer: (c) both

Question 15:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

One of the following forms may not result in credit risk:
(a) in the case of direct lending: principal and/or interest amount may not be repaid; 
(b) in the case of guarantees or letters of credit: funds may not be forthcoming from the constituents upon crystallisation of the liability; 
(c) in the case of securities trading businesses: funds/securities settlement may not be effected; 
(d) none. 

Answer: (d) none.

Question 16:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Operational risk is the risk of loss arising from various types of:
(a) Human error 
(b) Failed systems and procedures in the bank 
(c) Breakdown in internal controls 
(d) all of the above. 

Answer: (d) all of the above.

Question 17:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The Basel Committee on Banking Supervision is a committee of banking supervisory authorities that was established by:
(a) the central bank governors of the Group of ten countries 
(b) European countries 
(c) India 
(d) USA. 

Answer: (a) the central bank governors of the Group of ten countries

Question 18:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Under the Basel I Accord, BCBS fixed the minimum requirement of capital funds for banks at:
(a) 8 per cent of the total risk weighted assets 
(b) 9 per cent of the total risk weighted assets 
(c) 10 per cent of the total risk weighted assets 
(d) 1000 crore.  

Answer: (a) 8 per cent of the total risk weighted assets

Question 19:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

On how many pillars is the Basel I Framework based?
(a) 4 
(b) 3 
(c) 2 
(d) 1 

Answer: (b) 3

Question 20:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The risks considered for capital requirements under Basel II are:
(a) credit risk, market risk and operational risk 
(b) credit risk, interest rate risk and foreign exchange risk 
(c) credit risk, political risk and country risk 
(d) None. 

Answer: (a) credit risk, market risk and operational risk

Question 21:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The first pillar under Basel II talks about:
(a) minimum capital requirements 
(b) supervisory review 
(c) market discipline 
(d) disclosure norms 

Answer: (a) minimum capital requirements

Question 22:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

As per Basel II Framework, the total of Tier 2 capital is permitted up to a maximum of:
(a) 100 per cent of Tier 1 capital 
(b) 250 per cent of Tier 1 capital 
(c) 80 per cent of Tier 1 capital 
(d) 50 per cent of Tier 1 and Tier 3 capital 

Answer: (a) 100 per cent of Tier 1 capital

Question 23:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Tier I capital of a bank consists of its:
(a) paid-up equity capital 
(b) issued and fully paid ordinary shares/common stock and perpetual non-cumulative preference shares and disclosed reserves 
(c) authorised capital 
(d) none. 

Answer: (b) issued and fully paid ordinary shares/common stock and perpetual non-cumulative preference shares and disclosed reserves

Question 24:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Subordinated term debt will be limited to a maximum of:
(a) 50 per cent of Tier 1 elements . 
(b) 100 per cent of Tier 1 elements 
(c) 85 per cent of Tier 1 elements 
(d) none. 

Answer: (a) 50 per cent of Tier 1 elements .

Question 25:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Tier 3 capital will be limited to:
(a) 250 per cent of a bank's Tier 1 capital that is required to support market risks 
(b) 100 per cent of a bank's Tier 1 Capital 
(c) 250 per cent of a bank's Tier 1 capital 
(d) none. 

Answer: (a) 250 per cent of a bank's Tier 1 capital that is required to support market risks

Question 26:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In case of Strategic Alliances,
(a) the partners will remain as separate entities 
(b) the partners will lose their individual identities 
(c) one partner will get merged with the other 
(d) none 

Answer: (a) the partners will remain as separate entities

Question 27:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Three mid-sized public sector banks have entered into a 'strategic alliance' in October 2006. They are:
(a) Indian Bank, Corporation Bank and Oriental Bank of Commerce 
(b) Indian Bank, Punjab National Bank and Canara Bank 
(c) Union Bank of India, Syndicate Bank and Corporation Bank 
(d) Canara Bank, Syndicate Bank and Corporation Bank. 

Answer: (a) Indian Bank, Corporation Bank and Oriental Bank of Commerce

Question 28:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Combining of two or more companies into a single company where one survives with its name and the others lose their corporate existence is called:
(a) Merger 
(b) Alliance 
(c) Consolidation 
(d) Acquisition. 

Answer: (a) Merger

Question 29:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In 1921, the three presidency banks - the Bank of Bengal, the Bank of Bombay and the Bank of Madras was amalgamated into one Bank which is now called the:
(a) State Bank of India 
(b) Reserve Bank of India 
(c) Indian Bank 
(d) none. 

Answer: (a) State Bank of India

Question 30:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

One of the following does not own 10 per cent equity stake in the capital of CIBIL:
(a) HDFC 
(b)SBI 
(c) ICICI Bank 
(d) Standard Chartered Bank 

Answer: (d) Standard Chartered Bank

Question 31:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

CIBIL as a credit bureau caters to:
(a) consumer segments 
(b) commercial segments 
(c) both commercial and consumer segments 
(d) none. 

Answer: (c) both commercial and consumer segments

Question 32:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The Consumer Credit Bureau covers credit availed by:
(a) individuals 
(b) proprietary concerns 
(c) private and public limited companies 
(d) banks. 

Answer: (a) individuals

Question 33:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Credit information reports can be accessed by:
(a) only those members who have provided all their data to CIBIL 
(b) by any bank 
(c) by any Indian citizen 
(d) none. 

Answer: (a) only those members who have provided all their data to CIBIL

Question 34:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In case of receipt of request for transfer of borrowal account, the consent or objection of the lender, if any, should be conveyed within:
(a) twenty-one days from the date of receipt of request 
(b) fifteen days from the date of receipt of request 
(c) immediately on receipt of request 
(d) none. 

Answer: (a) twenty-one days from the date of receipt of request

Question 35:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The Banking Codes and Standards Board of India was registered on 18 February, 2006 under:
(a) RBI Act 
(b) Banking Regulation Act 
(c) the Societies Registration Act, 1860 
(d) none. 

Answer: (c) the Societies Registration Act, 1860

Question 36:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The 'Bankers' Fair Practice' code was brought out in June 2004 by:
(a) IBA 
(b) RBI 
(c) Government of India 
(d) None. 

Answer: (a) IBA

Question 37:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

In the call/notice money market the following participants are allowed to trade:
(a) all corporates 
(b) all banks, Primary Dealers and Mutual funds 
(c) only banks 
(d) none. 

Answer: (c) only banks

Question 38:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

The minimum maturity period of certificates of deposit (CDs) with effect from 29 April 2005 is:
(a) 8 days 
(b) 15 days 
(c) 21 days 
(d) none. 

Answer: (a) 8 days

Question 39:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Scheduled commercial banks (SCBs) and primary dealers (PDs) have been allowed with effect from November 2006, to cover their short positions within an extended period of:
(a) five trading days 
(b) two trading days 
(c) short sales not permitted 
(d) none. 

Answer: (a) five trading days

Question 40:  http://nextgenjaiib.blogspot.in/-JIB-211-PP  

Resident individuals are free to remit in a financial year for any current or capital account transaction or a combination of both up to:
(a) US$ 25,000 
(b) US$ 50,000 
(c) US$ 10,000 
(d) none. 

Answer: (b) US$ 50,000

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