1 Mark Q

1 which among the following is correct with regard to definition

of 'Banking" under the provisions of Banking regulations Act?
a. under section 5(b)
b.not defined
c. indirectly defined
d.not defined clearly

2 which of the following section defines 'banking' under the

provision of Banking regulation Act?
a.section 5©
b.section 5(b)
c.section 5(e)
d.section 5(f)

3 The relationship between a customer who has deposited money

with the bank and and the banker is one of:
a. debtor and creditor
b.creditor and debtor
c.bailor and bailee
d.lessor and lessee

4 Section 31 deals with paying bank's responsibilities under which act

a.BR Act
b.RBI Act
c.NI Act
d.CONTRACT Act

5 You receive a cheque for payment after the death of the

customer
a.cheque will be paid irrespective of the death
b.cheque will not be paid as reliable information about the death of
the customer has been received
c.cheque will be paid
d.cheue will be kept in abeyance.

6 A cheque is drawn by Ram on bank 'B" favouring Dinesh.Who is

the drawee of the cheque?
a.Ram
b.bank 'B'
c.Dinesh
d.both (a) & (b)
7 A Cheque in fafour of Lord Rama or order is presented for
payment.what will be your decision?
a.bank can pay
b.bank can reuse payment
c.It can be paid to the beneficiary or it can be credited to trust a/c in
the name of Lord Rama
d.bank can pay to the presentor

8 One of the following statement is incorrect.Identify the same.

a.once a bearer always a bearer
b.drawer of the cheque is the customer
c.section 31 of NI act applies to all the parties to the cheque

d.section 85 of NI act deals with protection to the paying banker

9 Paying banker must refuse payment of the cheque when?

a.Insolvency petition against the customr has been received
b.order cheque has been issued by the customer
c.bearer cheque has been issued by the cutomer to his foe
d.an order cheque has been issued in favour of Lord Krishna

10 A letter of credit or documentary credit is a very common and

familiar instrument used for:
a.settlements across the globe
b.trade settlements across the globe
c.dispute settlements across the globe
d.margin settlements across the globe

11 A documentary credit is defined in Uniform Customs and

Practices for Documentary credit under :
a.article 22
b.article 21
c.article20
d.article2

12 A letter of credit is isuued by:

a.seller's bank
b.buyer' bank
c.both buyer's bank and seller's bank
d.the Central bank Of the country

13 ICC standa for:

a.International Clearance of Commerce
b.International Chambers of Council
c.International Chambers of Commerce
a.International Chambers of customs

14 UCPDC rules are framed by:

a.International Clearance of Commerce
b.International Chambers of Council
c.International Chambers of Commerce
a.International Chambers of customs

15 UCPDC standa for:

a.Unform Council and Practices for Documentary Credit
b.Unform Customs and Procedures for Documentary Credit
c.Uniform Customs and Practices for Documentary Credit
d.Uniform Customs and Practices for Delayed Credit

16 ICC is headquartered in :
a.Basle
b.Frankfurt
c.Oslo
d.Paris

17 Preshipment Finance means:

a.Loan to exporter
b.Loan to exporter against shipment of goods already made and
converted in the form of receivables
c.loan to arrange the shipment
d.loan to importer

18 In a Letter of Credit, the apllicant is:

a.banker
b.importer
c.exporter
d.exporter's bank

19 In a Letter of Credit the beneficiary is:

a.Importer
b.an exporter
c.Importer's bank
d.opening bank

20 In a Letter of Credit, the exporter's bank is known as :

a.opening bank
b.confirming bank
c.negotiating bank
d.issuing bank
 2 Marks Q
1 Banks have been prohibited to stapple the currency notes by RBI
by issuing strict directives for implementation.Under which of the
following, these directives have been issued?
a.section 35 A of Indian currency act
b.section 35 A of RBI act
c.section 35 A of NI act
d.section 35 A of Banking Regulation act

2 A' branch has been opened by the bank recently and has been
given ambitious targets for deposits and advances.it is approached
by a chit fund company which is expected to deposit by means of an
FD for Rs 10croresfor three years:

a.Bank will issue FDR,which will help in achieve the deposit target
b.Bank will issue FDR after RBI's consent
c.Bank will not issue since RBI's directives do not allow FDR in the
name of chit company
d.Bank can issue deposit for one year

3 You receive a cheque for payment but the cheque neither bears
the words 'order' or 'bearer':what will you do?
a.It will be treated a 'bearer' cheque and the payment will be made
accordingly.
b.it will be treated as an order cheque and the payment will be
made accordingly.
c.it will be treted as an ambiguous instrument and return the
cheque.
d.it will be treted as an incomplete instrument and return the
cheque.

4 A savings bank customer of your branch has issued a cheque

which bears the words 'order' as well as 'bearer'. What is your
decision?
a.it will be treted as an ambiguous instrument and return the
cheque.
b.it will be treted as an incomplete instrument and return the
cheque.
c.it will be treated as an order cheque and the payment will be
made accordingly.
d.It will be treated a 'bearer' cheque and the payment will be made
accordingly.

5 Ms Asha a customer is having a savings bank a/c and her

husband had withdrwan the money from the bank on the basis of
forged cheques.She comes to the bank and demands the money.
a.bank will refer the matter to the court.
b.bank is negligent but not liable.
c.bank is liable
d.loss will be borne in ratio of 50:50 basis by the bank and
customer

6 X issues a cheque in favour of Y and Z steals it.By forging Y's

signatures, he delivers it to W, who obtains the payment of the
cheque from your branch.As a paying bank can u get protection?
a.yes under section 131 and 10
b.yes under section 85(1)
c.no it is forgery
d.no,not permitted under section 31

7 An award shall not be binding on a bank against which it is

passed unless the complaint furnishes to it within a period of -----
-days,and a ------------ ---------- of the award in full and final
acceptance.
a.15, letter of acceptance
b.30,letter of acceptance
c.15,letter of agreement
d.30,letter of agreement

8 A bank not agreeing to accept the Award passed under the

scheme may file a ----------- application before ---------- -----------,
within ----- month from the date of receipt of copy of the Award
a.review, deciplinary authority, one
b.review, review authority,two
c.review, review authority,one
a.review, deciplinary authority, two

9 What is the maximum compensation that a Banking

Ombudsman can Award against the bank is limited to Rs ------
lakh and a bank not agrreing to accept the Award may file a
review application before the review authority within a period -----
-- from the date of receipt of the Award.
a.no limit, 30 days
b.1 million, 15 days
c.1million,30 days
d.1 million, 45 days

10 ABC bank issued a bank guarantee and the validity period

was mentioned as '31 August 2008' and the claim shoud be
prefered with in three months of the validity period.However
the claim was preferred on 2 nd December 2008. what should
the banker do?
a.pay the claim as thereis no information of fraud
b.pay the clain as it is prefered within the claim period
c.do not pay the claim amount as per the extant instructions
d.pay the claim and get reimbursement
11 Prior to the amendment of Section 28 of the Indian contract
act ,most bank gurantees had a standard clause at the end of
their guarantee period which states that the beneficiary was
required to enforce :
a.within three months from the validity period
b.within six months from the validity period
c.within three to six months from the validity period
d.within six to nine months from the validity period
 4 Marks Q

1 You receive information about the death of a depositor of your

branch through his nominee, who comes to get the payment of the
deposit. At that time the legal heirs of the deceased also approach
the bank for payment of the deposit amount.In this connection the
legal heirs hand over a copy of the plaint, for a court case filed by
them to get succession cetificate:
a.payment shall not be made till the dispute is settled.

b.payment will be made to legal heirs and nominee in equal ratio.

c.payment will be made to legal heirs only.
d.payment ill be made to the nominee only.

2 Sri Girdharilal opens a term deposit account with Universal Bank

and nominates his niece Ms Rashmi. He expires in an accident but
Ms Rashmi does not turn up eventhough a notice was sent from the
bank.In the meantime, the legal heirs of Sri girdharilal,his two sons
visit the bank and request the bank for making the payment of
deposit.They also present a probate from court of law in which they
are the executors of the will of the deceased.What is your decision?
a.the payment of the deposit will be made to legal heirs in terms of
probate.
b.pament will be made to Ms Rashmi only.

c.payment will be made legal heirs and nominee in equal proportion

d.The bank will advice the legal heirs to bring specific order from the
court, inview of the nomination.

3 Your branch customer Mr Anil issues a cheque for Rs 15000/- in

favour Mr krishana who endorses the cheque in favour of Vivek
who misplaces the cheque.The cheque falls in the hands of Mr pal
who forges the signature of Mr Vivek and obtains payment from the
bank.Mr Anil and Mr Vivek requests the bank to reverse the
entry,as the payment has been made on the basis of forged
endorsement:
a.bank is liable on the payment but will refuse the revarsal of the
entry.
b.bank is liable on the payment and will reverse the entry.
c.bank is reponsible to Mr Vivek
d.bank is not liable as the paying bank is protected against a
forged endorsement
4 MR Karthik ,your savinga bank customer issues a cheque, in
favour of Mr Narayan who negotiates the cheque to Mr
Ram.Branch receives the cheque in clearing for payment, but a
notice of death of Mr Karthik is received.What will you do with this
cheque?
a.cheque will be paid as Mr Naraan is alive
b.cheque will be returned.
c.cheque will be paid in normal course.
d.cheque will be paid on the indemnity of Mr Narayan

5 Mr Sundar, company secretary of M/S Surya software Limited

which is having a current account with your branch,comes to your
branch at 4.45 p.m. for encashment of a cheque ,issued by his
colleague who maintains a savings bank account for Rs 4500/-.The
Branch is normally closed by the bank for customer transactions by
3.00 p.m. He Mr Sundar insists for payment which is very urgently
needed by him as he has to proceed to Delhi the same
eveninig.How will you accommodate the payee?
a.the cheque can be paid as this is not only a small amount,but to
an employee of a known company.
b.the cheque cannot be paid after close of business hours.
c.the cheque can be paid
d.the cheque if paid will be entered in the branch records next
dayby follwing the usual procedure.

6 Mr A , a shop keeper took a fire insurance policy for his

godown from an insurance company,which undertakes to pay a
certain amount to the policy holder in the event of a fire in the
godown and subject to the condition of the policy and payment
of premium by the shop keeper.such a type of policy is not dealt
under section 124 of the Contract Act.such contracts are
classified as :
a.contract of guarantee
b.contract of Indemnity
c.contract of hypothecation
d.contract of lien

7
Mr Ganesh was he holder of Government promissory note
which he had handed over to Mr Avinash, his broker.MR
Avinash forged Mr Ganesh's signature and endorsed it for
value to the bank.The bank in good faith apllied to the
Government Public Debt Office to have the note exchanged in
their name which was complied with.Mr Ganesh on coming to
know that he has been defrauded sued the Government
against the loss suffered by him. the court's decision would be
:
a.bank is not liable as there is no contract between the bank
and Mr Ganesh
b.Mr Avinash is liable to pay the loss suffered by Mr Ganesh
c.bank is liable on the gronds that the bank is responsible for
an injury to a third party's rights.
d.Government is liable since it should have verified the
signature.