JIB-221-PPB-M-B-E124 MCQ FROM BOOK

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PRINCIPALS AND PRACTICE OF BANKING   ::   MCQ FROM BOOK TEST No:JIB-221-PPB-M-B-E124 :: No of Questions:  124   ::   Time Allowed : 99  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-221-PP  

Principle functions of banks are:
(a) accepting deposits
(b) lending and investing
(c) non-fund business and remittance services
(d) all of above

Answer: (d) all of above

Question 2:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

In deposit accounts, the main relationship between bank and customer is:
(a) creditor-bank, debtor-customer
(b) debtor-bank, creditor-customer
(c) agent-principal
(d) servant-owner

Answer: (b) debtor-bank, creditor-customer

Question 3:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

When a bank lends money to the corporate person the relationship is:
(a) borrower and lender
(b) creditor-debtor
(c) debtor-creditor
(d) customer and client

Answer: (b) creditor-debtor

Question 4:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Bailor-bailee relationship is applicable in:
(a) cash deposited with cashier by customer
(b) safe deposit locker
(c) demand draft issued by bank
(d) keeping articles in safe custody with bank

Answer: (d) keeping articles in safe custody with bank

Question 5:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

What relationship is created when the bank collects a cheque in clearing?
(a) holder for value
(b) clearing member and principal
(c) agent and principal
(d) collecting bank and holder

Answer: (d) collecting bank and holder

Question 6:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

When any FDR is lost by a customer of a bank, what document is executed:
(a) guarantee bond
(b) government bond
(c) promissory bond
(d) indemnity bond

Answer: (d) indemnity bond

Question 7:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A credit voucher for Rs. 44,444 favouring Tarun was wrongly posted to Varun Bose by the bank, the relationship established with Varun Bose is of:
(a) trustee and beneficiary
(b) debtor and guarantor
(c) creditor and indemnifier
(d) creditor and debtor

Answer: (d) creditor and debtor

Question 8:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Mr. Nanhe has a bank account and credited Rs. 20 lakh in it. Subsequently he was arrested on charge of fraud. The police informed the bank not to allow withdrawals from his account. Two days later, bank receives a cheque of Rs. 15,000 favouring Nanhe's creditor. What should the bank do?
(a) not to pay cheque
(b) return cheque with memo stating A/c holder in jail
(c) honour the cheque
(d) get police orders for payment

Answer: (c) honour the cheque

Question 9:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Account holder X draws a cheque for Rs. 5,000 favouring Rajesh (a minor aged 13 years) or bearer. Rajesh presents the cheque on counter duly signed on the back. What should the banker do with the cheque of a minor?
(a) refuse, since no contractual capacity
(b) pay the cheque after inquiring with X
(c) pay to Rajesh without any responsibility of bank
(d) ask Rajesh to bring his parents

Answer: (c) pay to Rajesh without any responsibility of bank

Question 10:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A cheque drawn for Rajkumar or order is stolen. The thief made endorsement as Rajkumar on the cheque in his favour. The cheque is presented in clearing and paid by bank. True owner later on sent legal notice to bank. What is the liability of the bank?
(a) the paying bank will get protection under N.I. Act
(b) forgery does not give any rights to bank, hence liable
(c) under section 85, the paying bank is liable
(d) under section 131, the paying bank is liable.

Answer: (a) the paying bank will get protection under N.I. Act

Question 11:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

After close of business hours by 1.30 hrs. the account holder himself availed payment. At 4.15p.m. (after close of 1.45 hrs) income tax attachment order is received by bank. What would be the liability of paying bank?
(a) payment is made in due course and as payment is debitable next day, bank is protected.
(b) payment is not in due course since paid after reasonable time (i.e. 1.30 hrs. late for today).
(c) attachment order will be effective after bank's right of lien over the late payment bank should approach the customer to get the order changed to next day.
(d) All above

Answer: (b) payment is not in due course since paid after reasonable time (i.e. 1.30 hrs. late for today).

Question 12:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Ritesh issued a cheque at 3:30 p.m. (one hour after close of business hours of the bank) to Shubha. Shubha approached to the bank and on request paid the money at 4:00 p.m. as late payment;Ritesh arrived to the bank and stopped payment of cheque issued to Shubha at 4:30 p.m. on the same day. Who is liable for loss?
(a) Payment after business hours is not a payment in due course hence bank is liable, Section 10 N.I. Act.
(b) Payment even though after business hours but within banking hours is protected under Section 31.
(c) Payment late for today is protected under Section 85.
(d) Refused to accept stop payment instructions since late for today.

Answer: (a) Payment after business hours is not a payment in due course hence bank is liable, Section 10 N.I. Act.

Question 13:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Section 131 of N.I. Act gives protection for collection of
(a) Bills of Exchange
(b) Promissory Note
(c) Hundis
(d) Cheque

Answer: (d) Cheque

Question 14:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Rajkumar wants a demand draft striking the word 'Order' and writing the word 'Bearer'. Can bank help him?
(a) Bearer Draft is unlawful under Section 31 of RBI.
(b) Bearer Draft can be issued like a cheque.
(c) Signature of the payee should be attested on the back of draft by the issuing branch.
(e) All of the above

Answer: (e) All of the above

Question 15:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A draft purchased is reported lost and the purchaser wants to stop the payment of the draft. Can the Bank do it?
(a) Bank cannot stop payment since it is a promissory note.
(b) Bank can stop payment since covered under negotiable instrument.
(c) Bank can ask the purchaser to suffer for negligence and bank cannot help.
(d) Bank would issue stop payment instructions only after two weeks from date of issue.

Answer: (a) Bank cannot stop payment since it is a promissory note.

Question 16:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Objectives of KYC:
(a) to ensure appropriate customer identification
(b) to monitor transactions of suspicious nature
(c) to ensure that he/she would not deceive the bank.
(d) if loan given it would not be a NPA

Answer: (e) Only (a) and (b)

Question 17:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Sources of credit information
(a) Information's on visit to business premises
(b) On interview with borrower and from documents submitted
(c) Information's from loan proposal
(d) All of above

Answer: (d) All of above

Question 18:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Demand Deposits are those which can be withdrawn:
(a) On Request
(b) On Sanction by Manager
(c) On Demand
(d) On Persuasion

Answer: (c) On Demand

Question 19:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Current accounts deposits are not entitled to
(a) Cheque book above 100 leaves
(b) Monthly Statements
(c) Cash Payments
(d) Interest

Answer: (d) Interest

Question 20:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

In saving account deposits, interest is paid on balance in the account between 10th to last day of month.
(a) Maximum
(b) Average
(c) Minimum
(d) Last balance at the end of month

Answer: (c) Minimum

Question 21:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Merchant bankers are:
(a) Financial Brokers
(b) Financial Intermediaries
(c) Credit Appraisers
(d) Underwriters

Answer: (b) Financial Intermediaries

Question 22:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Merchant bankers' activity relate to:
(a) Equity and equity related finance
(b) Debt and debt related finance
(c) Fund Business
(d) Non-Fund Business

Answer: (a) Equity and equity related finance

Question 23:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

of Lease Financing:
(a) Alternative use of funds
(b) Arrangement for faster and cheaper credit
(c) Increased capacity to borrow
(d) Trading on Tax Shield

Answer: (e) All of the above

Question 24:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

of Leasing:
(a) Deprivation of asset ownership
(b) Deprivation of asset in case of default.
(c) Attachment on owner going insolvent
(d) None of the above

Answer: (d) None of the above

Question 25:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Disadvantages to Credit Card holders:
(a) Over Spending Debt Trap
(b) Frauds due to loss or theft of cards
(c) Forged signatures
(d) Forged charge slips

Answer: (e) All of above

Question 26:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

difference between the credit and the debit card is:
(a) Your account gets debited immediately on using a credit card
(b) Your account gets debited immediately on using a debit card
(c) Your account does not get debited immediately on using a debit card
(d) None of the above

Answer: (b) Your account gets debited immediately on using a debit card

Question 27:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Credit risk to the bank is high from the:
(a) Credit cardholders
(b) Debit cardholders
(c) Both the above
(d) None of the above

Answer: (a) Credit cardholders

Question 28:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The bank which pays the merchant for the transactions is called as:
(a) issuer bank
(b) clearance bank
(c) acquiring bank
(d) All above

Answer: (c) acquiring bank

Question 29:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Fill in the blanks with the suitable option. Q. --------- Lien is a/an of the creditor to retain possession.
(a) right
(b) obligation
(c) instrument
(d) interest

Answer: (a) right

Question 30:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Particular lien gives the creditor right to retain -------- increase the expenses incurred are not paid.
(a) all goods
(b) ordered goods
(c) some goods/securities
(d) specific goods / securities

Answer: (d) specific goods / securities

Question 31:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Banker’s lien is an / a
(a) bailment of goods
(b) implied pledge
(c) agreement
(d) an stoppage

Answer: (b) implied pledge

Question 32:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Banker's lien is not applicable in case of _
(a) safe custody
(b) debts not due
(c)securities left negligently
(d) all of above

Answer: (d) all of above

Question 33:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Right to combine two accounts by banks is called
(a) garnishee
(b) lien
(c) set-off
(d) rating

Answer: (c) set-off

Question 34:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The right of set-off is a
(a) customer's right
(b) banker’s right
(c) bank's discretion
(d) payee’s right

Answer: (c) bank's discretion

Question 35:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Garnishee order is issued by a
(a) police officer
(b) revenue officer
(c) CID
(d) courts of law

Answer: (d) courts of law

Question 36:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Attachment order is issued by
(a) income tax officer
(b) sales tax officer
(c) both (a) and (b)
(d) public debt office

Answer: (c) both (a) and (b)

Question 37:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Mandate is a agreement.
(a) stamped
(b) unstamped
(c) memorandum
(d) calculated

Answer: (b) unstamped

Question 38:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Power of Attorney can be -------
(a) universal
(b) limited
(c) both (a) & (b)
(d) calculated

Answer: (c) both (a) & (b)

Question 39:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Person to whom power of attorney is given is called ----- and who gives it is called ------
(a) debtor-creditor
(b) bailor-bailee
(c) pawner-pawnee
(d) donor-donee

Answer: (d) donor-donee

Question 40:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

in 'due course' means
(a) on due date
(b) in accordance with apparent tenor
(c) in accordance with apparent signature and specimen
(d) due to sufficient funds.

Answer: (b) in accordance with apparent tenor

Question 41:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

of cheques is governed by sections under N.I. Act
(a) Section 10/31/85/126
(b) Section 15/16/17/131/141
(c) Section 131/138/147/142
(d) None of the above

Answer: (a) Section 10/31/85/126

Question 42:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The liability of drawee of cheque is to make payment, when there is availability of
(a) Sufficient funds
(b) Properly applicable for payment
(c) Required so by drawer
(d) All of above

Answer: (d) All of above

Question 43:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Crossing in a cheque
(a) may be on the face or back of cheque
(b) must always be between two parallel transverse line
(c)must be on the face of cheque
(d)can be cancelled by drawer as per N.I. Act.

Answer: (c)must be on the face of cheque

Question 44:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Notes/Bills of Exchange and Cheque are defined as
(a) trust Receipts
(b) judicial documents
(c) negotiable instruments
(d) documents of title to goods

Answer: (c) negotiable instruments

Question 45:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Cheque is payable on
(a) demand
(b) usance
(c) fixed future date
(d) after sight

Answer: (a) demand

Question 46:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Crossing is a direction to the
(a)drawer
(b) payee
(c) paying
(d) passing

Answer: (d) passing

Question 47:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following crossings is not provided for, in the N.I. Act
(a) account payee crossing
(b) not negotiable crossing
(c) general crossing
(d) special crossing

Answer: (a) account payee crossing

Question 48:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Acts done honestly are called acts done
(a) without negligence
(b) rashly
(c) mollified
(d) in good faith

Answer: (d) in good faith

Question 49:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

When the holder of an order cheque signs on the back of it, without specifying the person to whom the amount is to be paid, it is called
(a) full endorsement
(b) partial endorsement
(c) conditional endorsement
(d) restrictive endorsement

Answer: (e) blank endorsement

Question 50:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Sans recourse means
(a) without fear
(b) without physical touch
(c) without liability to me
(d) without liability to payee

Answer: (c) without liability to me

Question 51:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A bank on whom a cheque is drawn by the customer is
(a) collecting bank
(b) paying bank
(c) advising bank
(d) issuing bank

Answer: (b) paying bank

Question 52:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Section 131 of N.I. Act extends protection to the
(a) collecting bank
(b) paying bank
(c) drawee bank
(d) negotiating bank

Answer: (a) collecting bank

Question 53:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Where a customer, by a letter has advised the bank directing the banker not to honour/pay a oarticular cheaue such letter is called---------
(a) letter of credit
(b) stop payment letter
(c) mandate
(d) garnishee letter

Answer: (b) stop payment letter

Question 54:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Forged cheque is a.
(a) valid
(b) invalid
(c) post-dated
(d) stale-cheque

Answer: (b) invalid

Question 55:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Introduction in opening accounts is
(a) Optional
(b) Compulsory
(c) Discretionary
(d) Waived from year 2003.

Answer: (b) Compulsory

Question 56:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A minor for whom the court has appointed a guardian attains majority on completion of
(a) 21 years
(b) 18 years
(c) 15 years
(d) 17 years.

Answer: (b) 18 years

Question 57:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The minimum number of members in a public limited company is
(a) 50
(b) 20
(c) 10
(d) 7

Answer: (d) 7

Question 58:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Government companies are those companies where the government holds at least---------- shares.
(a) 51 per cent
(b) 26 per cent
(c) 100 per cent
(d) No such requirement

Answer: (a) 51 per cent

Question 59:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Delegation of powers under a trust is
(a) Possible
(b) Not possible
(c) Beneficiary's permission
(d) Charity commissioner's permission.

Answer: (b) Not possible

Question 60:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Which document stipulates internal rules of a company ?
(a) Memorandum
(b) Resolution
(c) Articles
(d) Declaration

Answer: (c) Articles

Question 61:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Minor's account can be opened in the guardianship of
(a) Mother and Father
(b) Mother or Father
(c) Grandmother
(d) Elder brother.

Answer: (b) Mother or Father

Question 62:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Two or more minors if desirous of opening a bank a/c in your bank, whether they can open
(a) Either or Survivor
(b) Jointly
(c) Only two can join
(d) Cannot open.

Answer: (d) Cannot open.

Question 63:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A Hindu minor having a natural guardian attains majority on completion of
(a) 18 years
(b) 21 years
(c) 13 years
(d) 13 years provided he has power of understanding.

Answer: (a) 18 years

Question 64:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Who shall be natural guardian in case of married minor girl?
(a) Father
(b) Mother
(c) Father-in-law
(d) Mother-in-law

Answer: (e) Husband

Question 65:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Sanjay, a minor aged 11 years, desires to open a saving account. His mother is illiterate and his father has become sanyasi. He has his grandparents. Who will be his natural guardian?
(a) Father
(b) Mother
(c) Grand father
(d) Guardian appointed by court

Answer: (b) Mother

Question 66:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

In a limited Co. certificate of incorporation was obtained though the memorandum was signed by two persons for all the seven signatories where the signatures were forged. Will the bank accept memo as genuine for opening bank a/c?
(a) Yes
(b) No
(c) Yes because incorporation certificate is valid
(d)No because forged documents cannot be accepted

Answer: (c) Yes because incorporation certificate is valid

Question 67:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

There should be two persons to open a partnership account in a bank. Which of the following is correct?
(a) X aged 25 years Y aged 17 years
(b) X aged 25 years Y aged 21 years
(c) X aged 17 years and Y aged 16 years
(d)Ku. Shubha aged 30 years and Ku. Rachna aged 16 years (daughter of Ku. Shubha)

Answer: (b) X aged 25 years Y aged 21 years

Question 68:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

HUF account is to be opened in a bank where there are three major persons Shivkumar - Father; Mrs. Ramawati - Shivkumar's Mother, Sharat Kumar - Son; Who can become Karta of HUF?
(a) Shivkumar
(b) Sharat Kumar
(c) Mrs. Ramawati
(d) Both Shivkumar and Ramawati

Answer: (a) Shivkumar

Question 69:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the directors of a Ltd. Co. expired and cheques signed by him are presented for payments should the bank pay those cheques?
(a) Cannot pay
(b) Company on other directors confirmation
(c) Can pay as a routine
(d) Payments be stopped by Co.

Answer: (c) Can pay as a routine

Question 70:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

X a partner in the firm xyz Co. wants to open a bank account in the firm's name. Does it require signatures of
(a) All partners
(b) Anyone
(c) Managing partner only
(d) Sleeping partner not required.

Answer: (a) All partners

Question 71:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A Demand Draft is issued by the banks to be valid for,
(a) 12 months
(b) 6 months
(c) 3 months
(d) None of the above

Answer: (b) 6 months

Question 72:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A customer is entitled to issuance of a duplicate DD in place of the lost one, provided
(a) he gives due intimation to the issuing branch
(b) payment of DD not already made by the drawee branch
(c) execution of an indemnity signed by both the payee and the purchaser of the DD
(d) payment of a fee as applicable for issue of such duplicate DD

Answer: (e) all the above

Question 73:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true with regard to a locker facility in the bank.
(a) In the case of a sole hirer of a safety locker, nomination can be made in favour of only one individual.
(b) A locker cannot be hired by limited companies, specified associations and societies etc.
(c) In the case of death of a sole locker-hirer (where there is nomination) access to locker may be given to the nominee
(d) Where there are joint locker-hirers having a contract of locker hire with a 'either or survivor' clause and where there is no nomination, access to the locker may be given to the survivor in case of death of one of the hirers.

Answer: (b) A locker cannot be hired by limited companies, specified associations and societies etc.

Question 74:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true with respect to RTGS:
(a) Funds are transferable from the branch of one bank to the branch of another bank.
(b) Only the corporate and Government departments can avail of the facility
(c) The RTGS system is maintained and operated by the RBI
(d) Each participant bank here of the RTGS will be required to open a dedicated settlement account for putting through its RTGS transactions.

Answer: (b) Only the corporate and Government departments can avail of the facility

Question 75:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true with respect to NEFT.
(a) Funds are transferable electronically from one customer account of a participant bank branch to another customer account of any other participant bank branch.
(b) The individual branches participating in NEFT can be located only in the urban/metro centres.
(c) The remitting branch prepares a structured financial messaging solution (SFMS) message and sends it to its service centre for NEFT.
(d) The RBI at the clearing centre sorts the transactions bank-wise and prepares the accounting entries of net debit or credit for passing on to the banks participating in the system.

Answer: (b) The individual branches participating in NEFT can be located only in the urban/metro centres.

Question 76:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

State True/False
(a) Portfolio management relies on the combination of securities to get most efficient portfolio
(b) Risk and return have the same meaning in selection of a portfolio
(c) The role of a portfolio manager lies in study of investor, investment strategy etc.
(d) A portfolio manager is any person who, pursuant to a contract or arrangement with a client, advises, directs or undertakes on behalf of the client the management or administration of a portfolio of securities or the funds of the client.

Answer: (a) Portfolio management relies on the combination of securities to get most efficient portfolio

Question 77:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Cardinal principles of lending are
(a) Safety and liquidity
(b) profitability and diversification of risks
(c) purpose and security
(d) Only (i) and (iii)

Answer: (e) All of (i) to (iii)

Question 78:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Liquidity with a banker means
(a)Cash on Hand
(b)Cash and Bank balances
(c) Short-term current assets to convert into cash
(d)All of above

Answer: (d)All of above

Question 79:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Customer profitability analysis means
(a)Exercise done by bank before lending to a customer
(b) Exercise before opening a new branch
(c) Assess the profitability of customer's business
(d)Only (i) and (iii)

Answer: (c) Assess the profitability of customer's business

Question 80:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Banker can reduce risk in lending to a borrower
(a) By obtaining adequate security
(b)By ensuring that there will be no problem of liquidity with borrower
(c) By ensuring that there will be no default on account of lack of liquidity and lack of willingness to pay on the part of the borrower.
(d) All above

Answer: (c) By ensuring that there will be no default on account of lack of liquidity and lack of willingness to pay on the part of the borrower.

Question 81:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

In banker's parlance, credit risk in lending refers to
(a) Default of repayment by a borrower
(b) Default of bankers in maintaining SLR
(c) Default of a banker to release credit to a borrower
(d) None of above

Answer: (a) Default of repayment by a borrower

Question 82:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Net working capital means
(a) Current assets - Current Liabilities
(b) Owned funds – Goodwill
(c) Use of assets + Sources of funds
(d) None of above.

Answer: (a) Current assets - Current Liabilities

Question 83:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Major Current assets are
(a) Marketable investments and Cash/receivables/inventories
(b) Inventories + Cash + Receivables
(c) Shares in sister concern + Unquoted shares + Cash
(d) All of above.

Answer: (a) Marketable investments and Cash/receivables/inventories

Question 84:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

What are the sources of working capital?
(a) Trade credits + Unsecured loans + Deposits
(b) Bank borrowings + Advance payments
(c) Net working capital
(d) All of above

Answer: (d) All of above

Question 85:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Working capital means
(a)Requirements for the day-to-day transactions
(b) Excess of current assets over current liabilities
(c)Fixed assets - Current assets
(d) None of above.

Answer: (a)Requirements for the day-to-day transactions

Question 86:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Term loans mean Loans
(a) Payable after one year to ten years
(b) Repayments are done in instalments
(c) Term loans are utilised for acquisition of fixed assets
(d) All of above

Answer: (d) All of above

Question 87:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Working capital needs are estimated by
(a) Operating cycle method
(b) Projected turnover method
(c) Cash budget method
(d) Any of above

Answer: (d) Any of above

Question 88:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Difference between cash budget and cash flow
(a) Cash flow deals with cash and non-cash funds.
(b) Cash budget deals with cash transactions only.
(c) Cash flow statements are generally for quarterly or half-yearly while cash budgets are for shorter periods.
(d) Cash budget is a projection into the future while a cash flow statement is historical.

Answer: (e) All of above.

Question 89:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Advantages of cash budget could be
(a) Borrower should plan in advance the cash requirements.
(b) Banker is able to spot a danger signal quickly and corrective measures are taken.
(c) Banker can plan his resources to meet credit demands.
(d) All of above.

Answer: (d) All of above.

Question 90:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Is there any exposure ceiling for banks in providing advances/loans to borrowers?
(a) 15 per cent of capital funds for single borrower and 40 per cent in a borrower's group.
(b) 10 per cent of capital funds for single borrower and 20 per cent in a borrower's group.
(c) 25 per cent of capital funds for single borrower and 50 per cent in a borrower's group for infrastructural projects.
(d) no such ceiling.

Answer: (a) 15 per cent of capital funds for single borrower and 40 per cent in a borrower's group.

Question 91:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Credit decisions are affected by risks like:
(a) Credit risk/market risk/operational risk
(b) Liquidity/ interest rate/ foreign exchange rate
(c) Commodity price/equity price risks
(d) None of the above

Answer: (a) Credit risk/market risk/operational risk

Question 92:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Housing Loans granted to individuals up to Rs.----- for construction of houses (excluding loans granted by banks to their employees) are treated as priority sector advances,
(a) 5 lakh
(b) 10 lakh
(c) 20 lakh
(d) 15 lakh

Answer: (c) 20 lakh

Question 93:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Educational loans granted to individuals for educational purposes up to Rs for studies in India, will be classified as priority sector.
(a) 7.5 lakh
(b) 10 lakh
(c) 15 lakh
(d) 20 lakh

Answer: (b) 10 lakh

Question 94:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The scheduled commercial banks are expected to enlarge credit to the priority sector and ensure that priority sector advances constitute
(a) 18 per cent of net bank credit
(b) 40 per cent of net bank credit
(c) 12 per cent of net bank credit
(d) 25 per cent of net bank credit

Answer: (b) 40 per cent of net bank credit

Question 95:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Kisan Cards are issued to farmers
(a) to withdraw money from ATM in rural branches
(b) to purchase farm equipments
(c) to purchase agricultural implements on credit from dealers
(d) to meet their cultivation needs and non-farm requirements, including purchase of inputs and other short-term requirements and working capital requirements for allied activities

Answer: (d) to meet their cultivation needs and non-farm requirements, including purchase of inputs and other short-term requirements and working capital requirements for allied activities

Question 96:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Under farm mechanization scheme, loan is given for
(a) providing irrigation facilities
(b) cultivation expenses
(c) purchase of farm equipments
(d) for digging wells

Answer: (c) purchase of farm equipments

Question 97:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A micro enterprise in manufacturing sector is one where the investment in plant and machinery does not exceed Rs.
(a) Rs. 10 lakh
(b) Rs. 20 lakh
(c) Rs. 25 lakh
(d) Rs. 50 lakh

Answer: (c) Rs. 25 lakh

Question 98:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The Government of India also provides subsidy to the SSI units for getting rated to the extent of 75 per cent of the charges/fees paid to the rating agency by the SSI units subject to a maximum of Rs
(a) Rs. 40,000
(b) Rs. 60,000
(c) Rs. 75,000
(d) Rs. 1 lakh

Answer: (a) Rs. 40,000

Question 99:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A medium enterprise in service sector is one,
(a) Where the investment in equipment is more than Rs. 3 crore but does not exceed Rs. 10 crore.
(b) Where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 10 crore.
(c) Where the investment in equipment is more than Rs. 5 crore but does not exceed Rs. 10 crore.
(d) Where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

Answer: (d) Where the investment in equipment is more than Rs. 2 crore but does not exceed Rs. 5 crore.

Question 100:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

'Swarnajayanti Gram Swarozgar Yojana' (SGSY) did not replace one of the following schemes:
(a) Integrated Rural Development Programme (IRDP)
(b) Training of Rural Youth for Self-Employment (TRYSEM)
(c) Development of Women and Children in Rural Areas (DWCRA)
(d) PMRY

Answer: (d) PMRY

Question 101:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Under SGSY, the group is entitled for a subsidy of
(a) Fifty per cent of the project cost subject to per capita subsidy of Rs. 10,000/subject to maximum of Rs. 1.50 lakh.
(b) Twenty-five per cent of the project cost subject to per capita subsidy of Rs. 10,000 subject to maximum of Rs. 1.25 lakh.
(c) Thirty-three per cent of the project cost subject to per capita subsidy of Rs. 10,000 subject to maximum of Rs. 1.50 lakh.
(d) Fifty per cent of the project cost subject to per capita subsidy of Rs. 10,000 subject to maximum ofRs. 1.25 lakh.

Answer: (d) Fifty per cent of the project cost subject to per capita subsidy of Rs. 10,000 subject to maximum ofRs. 1.25 lakh.

Question 102:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Under SJSRY, the percentage of women beneficiaries should not be less than
(a) 30 per cent
(b) 33 per cent
(c) 50 per cent
(d) 22.5 per cent

Answer: (a) 30 per cent

Question 103:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Under PMRY, the maximum age limit for availing loan by physically handicapped persons is
(a) 28
(b) 35
(c) 40
(d) 45

Answer: (d) 45

Question 104:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Maintenance of the following books, registers is not compulsory for SHG
(a) Minutes book
(b) Savings and Loan register
(c) Visitors book
(d) Members' passbook

Answer: (c) Visitors book

Question 105:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

SHGs, for assistance under PMRY may consist of
(a) 5-20 educated unemployed youth
(b) 3-15 educated unemployed youth
(c) 10-25 educated unemployed youth
(d) 2-10 educated unemployed youth

Answer: (a) 5-20 educated unemployed youth

Question 106:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true with respect to credit cards.
(a) The card issuing banks would not be responsible for fulfillment of KYC requirements, where agents solicit business.
(b) While issuing cards, the terms and conditions for issue and usage of a credit card should be mentioned in clear and simple language
(c) Card issuers should quote annualized percentage rates (APR) on card products.
(d) The card issuing bank/NBFC should not unilaterally upgrade credit cards and enhance credit limits. Prior consent of the borrower should invariably be taken whenever there are any change(s) in terms and conditions.

Answer: (a) The card issuing banks would not be responsible for fulfillment of KYC requirements, where agents solicit business.

Question 107:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

If the guidelines of the RBI in the matter of credit are violated, it can levy penalty on the violating bank under
(a) Reserve Bank of India Act
(b) Negotiable Instrument Act
(c) Indian Penal Code
(d) Banking Regulation Act

Answer: (d) Banking Regulation Act

Question 108:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

When banks give home loans, the nature of charge created is
(a) Hypothecation
(b) Mortgage
(c) Assignment
(d) Pledge

Answer: (b) Mortgage

Question 109:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

As per the Stamp Act, a document executed in India shall be stamped
(a) only before execution
(b) at any time, but before filing suit
(c) within 30 days after execution
(d) before or at the time of execution

Answer: (d) before or at the time of execution

Question 110:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true
(a) The Court cannot condone delay in filing suit as per Section 5 of the Limitation Act
(b) If a demand promissory note is not stamped before or at the time of execution in India, the defect can be cured by paying penalty
(c) When the borrower acknowledges the debt before the expiry of limitation period, the period of limitation is extended by one more period.
(d) If the borrower makes part payment in to the loan account before the expiry of limitation period, the period of limitation is extended by one more period.

Answer: (b) If a demand promissory note is not stamped before or at the time of execution in India, the defect can be cured by paying penalty

Question 111:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

One of the following statements is not true in the right of set-off.
(a) Set-off means partial or total merging of a claim of one person against another in a counter claim of the latter against the former.
(b) Both debts must be for certain sum.
(c) A debt accruing due cannot be set-off.
(d) A banker can set-off the credit balance in the guarantor's account before the liability of the guarantor to the bank is determined.

Answer: (d) A banker can set-off the credit balance in the guarantor's account before the liability of the guarantor to the bank is determined.

Question 112:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Which statement is true
(a) In the case of assignment of LIP as a security to an advance, the assignment is not complete unless a notice of assignment is given to the Insurance Company.
(b) The above notice of assignment may be given either by the assignor or by the assignee.
(c) The banker's lien is an implied pledge.
(d) When a customer inadvertently leaves a packet containing certain share certificates while leaving the bank premises, the banker can take these securities under lien against certain liability incurred by the customer to the bank.

Answer: (e) a) b) and c)

Question 113:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Which statement is true
(a) Right of lien and right of set-off can be exercised simultaneously at the same time.
(b) There is less risk for a bank when hypothecation facility is granted to a Company, because of the registration of the bank's charge with the ROC.
(c) One of the essential requirements of a pledge is the actual or constructive delivery of the goods pledged by the pawner to the pawnee,
(d) Limitation period for filing a suit for sale of mortgaged property is thirty years from the date mortgage debt becomes due.

Answer: (e) b) and (c)

Question 114:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The nature of charge created while advancing against LIC policies is
(a) Assignment
(b) Lien
(c) Pledge
(d) Set-off

Answer: (a) Assignment

Question 115:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Documents of title to goods has been defined in
(a) Indian Contract Act
(b) Negotiable Instruments Act
(c) Transfer of Property Act
(d) Sale of Goods Act.

Answer: (d) Sale of Goods Act.

Question 116:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

In the terms of Section 19(2) of the Banking Regulation Act, 1949, 'no banking company shall hold shares in any company, whether as pledgee, mortgagee or absolute owner, of an amount exceeding thirty per cent of the paid-up share capital of that company or thirty per cent of its ----- , whichever is less'. Shares held in a demat form should also be included for the purposes of determining the exposure limit.
(a) own paid up share capital and reserves
(b) tangible net worth
(c) risk weighted assets
(d) paid-up capital

Answer: (a) own paid up share capital and reserves

Question 117:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Loans against the security of shares, debentures and PSU bonds to individuals should not exceed the limit of per individual borrower, if the securities are held in the demat form.
(a) Rs. 10 lakh
(b) Rs. 15 lakh
(c) Rs. 20 lakh
(d) Rs. 50 lakh

Answer: (c) Rs. 20 lakh

Question 118:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Loan against minor's term deposit
(a) can be granted if the documents are signed if the minor has completed the age of 14 years
(b) cannot be granted under any circumstances as the minor does not have the contractual capacity
(c) can be granted to the guardian of the minor, if it is for the necessities of the minor
(d) can be granted only with the permission of the Court.

Answer: (c) can be granted to the guardian of the minor, if it is for the necessities of the minor

Question 119:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

When will a loan be NPA?
(a) Interest and/or loan instalments overdue for more than 90 days.
(b) A/c is out of order for more than 90 days in case of overdraft/cash credit
(c) Bill remains overdue for more than 90 days in BP/BD
(d) All of the above

Answer: (d) All of the above

Question 120:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Charging of interest at monthly rests would/would not change overdues under NPA.
(a) Would make overdue of 90 days from monthly interest debiting
(b) Would make overdue 90 days from previous quarter ending
(c) Both of above.
(d) None of above.

Answer: (b) Would make overdue 90 days from previous quarter ending

Question 121:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Direct advances to agriculture and SME under standard assets category requires provision at the rate of
(a) 0.40 per cent
(b) 0.10 per cent
(c) 1.00 per cent
(d) 0.25 per cent

Answer: (d) 0.25 per cent

Question 122:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

A substandard asset is one which has remained NPA for a period less than or equal to
(a) 12 months
(b) 6 months
(c) 90 days
(d) 180 days

Answer: (a) 12 months

Question 123:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

The scope of activities undertaken by the business correspondents will not include:
(a) disbursal of small value credit
(b) recovery of principal/collection of interest
(c) collection of small value deposits
(d) payment of money on demand drafts not exceeding Rs. 1,000

Answer: (d) payment of money on demand drafts not exceeding Rs. 1,000

Question 124:  http://nextgenjaiib.blogspot.in/-JIB-221-PP  

Bank cannot use the services of one of the following person/association/organisation as intermediaries in providing financial and banking services through the use of business facilitator and correspondent models
(a) non-governmental organizations
(b) self-help groups (NGOs/SHGs)
(c) village sarpanch
(d) Micro Finance Institutions (MFIs)

Answer: (c) village sarpanch

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