Multiple Choice Questions Set 5

1. What is full form of GST:

A. General Sales Tax

B. Goods and Services Tax

C. Gross Services Tax

D. Govt Sales Tax

2. Higher Foreign Exchange Reserves are associated with the risk of:

A. Country Risk

B. Exchange Rate fluctuation Risk

C. Operational Risk

D. Investor Risk

3. Import Licence are issued for:

A. CIF Value

B. FOB Value

C. EXW value

D. FAS value

4. Islamic Banking means:

A. Banking in Muslim owned banks

B. Banking in Islamic countries

C. Banking on principles of Shriat

D. Banking for Muslims

5. KYC norms were implemented to:

A. Prevent Corruption

B. Prevent Terrorism

C. Prevent Money Laundering

D. Prevent Deposits more than a given amount

6. Licence for starting a new Commercial bank is given by:

A. Ministry of Finance

B. High powered committee of parliament

C. Reserve Bank of India

D. President of India

7. Loss making banks can make donations totalling Rs ___ Lakhs only in a financial year:

A. Nil

B. 5Lakh

C. 50Lakh

D. 5 crore

8. Maximum Forex permissible to a Resident Indian going abroad as tourist:

A. USD 2000 per financial year

B. USD 5000 per financial year

C. USD 10000 per calendar year

D. USD 10000 per financial year

9. Minimum period for which a Commercial Paper can be issued is:

A. 1 day

B. 3 days

C. 7 days

D. 15 days

10. Monetary Museum of India established by RBI is located at:

A. Mumbai

B. New Delhi

C. Kolkata

D. Chandigarh

11. RBI rediscounts bills of the banks at:

A. SLR

B. Bank Rate

C. Repo Rate

D. Reverse Repo Rate

12. The cases referred to Lok Adalats formed by DRT is for:

A. Above ₹ 10Lakh

B. Above ₹ 20Lakh

C. Above ₹ 50Lakh

D. ₹ 1.00 crore and above

13. The country which has banned sale of Tobacco is:

A. China

B. Nepal

C. Bangladesh

D. Bhutan

14. The operation by US Special forces that killed Osama bin Laden in Pakistan was code-named:

A. Operation Osama

B. Operation Obama

C. Operation Seal

D. Operation Geronimo

15. Unqualified Audit Report means:

A. An Audit Report which is audited by unqualified auditors

B. An Audit Report which is not audited.

C. An Audit Report which contains no "Clauses"

D. An Audit Report which is not finance worthy

16. Which charge does not require registration in case of limited companies:

A. Mortgage

B. Hypothecation

C. Pledge

D. Floating charge

17. Which country has the Largest Petroleum Reserves (almost 1/4th of the World's proven total petroleum reserves) in the World:

A. Iran

B. Iraq

C. Saudi Arabia

D. Oman

18. Which State took the initiatives for consolidation of Co-operative banks:

A. Andhra Pradesh

B. Gujrat

C. Punjab

D. Maharastra

19. Working Group on information security, electronic banking, technology risk management, and cyber frauds:

A. G Gopalkrishna

B. K.J.Udeshi

C. M. Damodaran

D. P. Krishnamurthy

20. Working Group on Reporting of OTC Interest Rate and Forex Derivatives:

A. G Gopalkrishna

B. K.J.Udeshi

C. M. Damodaran

D. P. Krishnamurthy

21. As per Sec. 26 NI Act, Minor may ____________ Negotiable Instrument so as to bind all parties except himself:

A. Draw,

B. Endorse,

C. Deliver,

D. All of these

E. None of these

22. As per Section 58F of Transfer of Property Act, Mortgage by Deposit of title of deeds is:

A. English Mortgage

B. Registered Mortgage

C. Equitable Mortgage

D. Usufructuary Mortgage

23. Bearer demand draft cannot be issued as per under Section __ RBI Act:

A. Sec 31 of RBI Act

B. Sec 26 of RBI Act

C. Sec 42 of RBI Act

D. Sec 45 of RBI Act

24. Buyer takes possession of goods and enjoys as Sole Owner of goods although price of goods not fully paid:

A. Lease finance

B. Instalment finance

C. Hire Purchase

D. Sale Purchase

25. Can Bank exercise right of Set-off in respect of contingent liabilities:

A. Yes

B. No

C. In case the liability is in the same name and right

D. None of these

26. Clayton's Rule applies to:

A. Right of subrogation

B. Appropriation of payments

C. Right of set off

D. Right of Attachment of funds

27. Green back currency refers to:

A. USD

B. GBP

C. Euro

D. JPY

28. Guarantees covering series of transactions:

A. Continuing Guarantees

B. Serial Guarantees

C. Guarantees in Series

D. Contingent Guarantees

29. If a Sole Trustee dies, the Trust will be managed by:

A. District Magistrate

B. Court Appointed Trustee

C. Legal Heir of diseased trustee

D. Registrar for registration of trusts

30. If Operating Cycle of a manufacturing concern is longer it implies that:

A. Higher amount of working capital will be required

B. Lower amount of working capital will be required

C. Same amount of working capital will be required

D. Higher creditors required

31. In a cheque drawn by the drawer, the name of payee is written in English and the other parts, in vernacular language:

A. The cheque will be returned with the memo- Refer to Drawer

B. The cheque will be paid if otherwise in order

C. The payee will be advised to get the cheque amended

D. Bank will advise drawer to come and correct the cheque

32. Mortgage is defined under :

A. Land Revenue Act

B. Transfer of Property Act

C. SARFAESI Act

D. Mortgages Act

33. Mr B opened an account on 12.04.13, got issued cheque book on 17.04.13. A cheque dated 10.04.13 is presented for payment, what will be the fate of the cheque:

A. Dishonour the cheque

B. Honour the cheque, if otherwise in order

C. Take consent of the issuer

D. Advise the account holder to surrender the cheque book for such practices

34. Mr. A, a current A/c holder executed a power of attorney in favour of Mr. B to operate Current Deposit A/c. Mr. A's death notice is served on the Banker. A cheque duly signed by Mr. B. Is received for payment the Bank has to:

A. Honour the cheque

B. Dishonor the cheque

C. Take consent of the legal heirs

D. Honour if the cheque is issued prior to the death of the account holder

35. Pre-paid expenses in the shape of insurance premium are classified in the Balance Sheet as:

A. Current Assets

B. Current Expenses

C. Current year Income

D. Current Liabilities

36. RFC account can be opened by:

A. Any NRI

B. Home returned NRIs

C. Exchange Earners

D. Resident Indians

37. Section 45Z of Banking Regulation Act 1949 deals with:

A. Return of paid instruments to account holder

B. Inspection of Banks by RBI

C. Nomination

D. Maintenance of SLR

38. State-sponsored Corporation granted loan for on-lending to Weaker Section is covered by the bank under:

A. Direct Finance to Agriculture

B. Weaker Sector

C. Indirect advance to agriculture.

D. None of these

39. The Borrowing of the Board of Directors of the Public Ltd Company should not exceed:

A. Capital contributed by the board

B. Paid up capital and free reserves

C. 25% of the capital funds

D. No borrowing is allowed to the board of directors

40. The first city of India selected for Street View on Google Maps.

A. New Delhi

B. Hyderabad

C. Chandigarh

D. Bangluru

41. The term Hypothecation has been defined in:

A. Transfer of property Act

B. SARFAESI Act.

C. Indian Contract Act

D. Companies Act

42. The term which refers to purchase of book debts/receivables without recourse to the sellers:

A. Discounting

B. Buying

C. Factoring

D. Forfeiting

43. UCP 600 - Bill of Lading; which of the statements is not correct:

A. Bill of lading must indicate the name of the carrier and be signed by the carrier or a named agent

B. Bill of lading must indicate that the goods have been shipped on board a named vessel at the port of loading stated in the credit

C. Bill of lading must be the sole original bill of lading or, if issued in more than one original, be the full set as indicated on the bill of lading.

D. Bill of lading may be subject to a charter party.

44. UCP 600 - Which of the following is not true about force majeure?

A. A bank assumes no liability or responsibility for the consequences arising out of the interruption of it business due to force majeure.

B. A bank will, upon resumption of its business, honour or negotiate under a credit that expired during such interruption of its business.

C. Force Majeure covers- Acts of God, riots, civil commotions, insurrections, wars, acts of terrorism, or by any strikes or lockouts or any other causes beyond its control.

D. A bank will not, upon resumption of its business, honour or negotiate under a credit that expired during such interruption of its business.

45. UCP 600 - Which of the statements is not correct?

A. A bank has no obligation to accept a presentation outside of its banking hou₹

B. A bank assumes no liability or responsibility for the form, sufficiency, accuracy, genuineness, falsification or legal effect of any document,

C. A bank assumes no liability or responsibility for the description, quantity, weight, quality, condition, packing, delivery, value or existence of the goods, services or other performance represented by any document.

D. A bank has liability or responsibility for the consequences arising out of delay, loss in transit, mutilation or other errors arising in the transmission of any messages or delivery of letters or documents, when such messages, letters or documents are transmitted or sent according to the requirements stated in the credit, or when the bank may have taken the initiative in the choice of the delivery service in the absence of such instructions in the credit.

46. UCP 600 -Force Majeure has been covered under article:

A. Article - 35

B. Article - 36

C. Article - 37

D. Article - 38

47. Vostro account means :

A. Our account with them

B. Their account with them

C. Their account with us

D. The term does not relate to any account

48. When Guarantor steps into the shoes of creditor on discharging the liability of the principal borrower, the term is known as:

A. Takeover of liability

B. Guarantor called as lender

C. Right of subrogation

D. Guarantor to get the possession of security without intervention to the court

49. Which of the following statements is not correct as per Sec 148 of Indian Contract Act:

A. Bailment refers to delivery of goods from one person to another person

B. The delivery is for some purpose

C. When the purpose will be over, goods will be returned or disposed-off as per the direction of the deliverer

D. The purpose of delivery need not be defined.

50. Which section of NI Act 1881, Public holidays are excluded for determining time for presentation or acceptance:

A. Section 89

B. Section 100

C. Section 105

D. Section 138

51. Which state Govt has formed India's first agriculture cabinet?

A. Haryana

B. Punjab

C. Madhya Pradesh

D. Gujrat

52. Working Capital assessment for SME units sanctioned Working Capital limit upto Rs 5 crore is as per the recommendations of :

A. Kohli Committee

B. Chakravarti Committee

C. Kapur Panel

D. Nayak Committee

53. After effecting remittances under the license, banks may preserve the copies of utilized license till

A. They are verified by the internal auditors or inspectors

B. One year

C. Five years

D. None of these

54. After goods have been shipped, they are to be transferred to a buyer other than the original buyer in the event of default by the latter, provided the reduction in value, if any, involved does not exceed 25 per cent of the invoice value and the realization of export proceeds is not delayed beyond the period of 12 months from the date of export

A. RBI permission is required

B. AD can permit

C. None of the above

D. All of the above

55. As per FEMA In merchanting trade, the transactions do not involve foreign exchange outlay for a period exceeding

A. Three months.

B. Six Months

C. 12 months

D. One month

56. As per UCP-600 In documents other than,__________the description of the goods, services or performance, if stated , may be in General terms not conflicting with their description in the credit

A. The bill of lading

B. The commercial invoice

C. Bill of Exchange

D. None of these

57. As per UCP-600 Reimbursing bank charges are on account of

A. Applicant

B. Negotiating Bank

C. Issuing Bank

D. Reimbursing Bank

58. As per UCP-600 the drafts are to be drawn on

A. Applicant

B. Beneficiary

C. Issuing Bank

D. Negotiating Bank

59. As per UCP-600, A nominated bank acting on its nomination, a confirming bank, if any, and the issuing bank shall each have a maximum of_______ days following the day of presentation to determine if a presentation is complying

A. 5 days

B. 5 banking days

C. 7 days

D. 7 banking days

60. Banks should furnish to the Reserve Bank, on a half_yearly basis, a consolidated statement in Form XOS giving details of all export bills outstanding beyond six months from the date of export as at the end of June and December every year. The statement should be submitted in triplicate within _____days from the close of the relative half-year

A. 7 days

B. 10 days

C. 15 days

D. 30 days

61. Banks should normally dispatch shipping documents to their overseas branches or correspondents expeditiously. However, they may dispatch shipping documents direct to the consignees or their agents resident in the country of final destination of goods in cases where

a.    The export proceeds have been realized in full except for the amount written off, if any, in accordance with the extant provisions for write off. 

b.    The exporter is a regular customer of AD bank for a period of at least six months.

c.     The exporter’s account with the AD bank is fully compliant with Reserve Bank’s extant KYC / AML guidelines.

d.    All of the above.

62. COVER RATE is the rate at which

A. Ads can cover the transaction in the interbank market without making profit or incurring loss

B. Merchants cover the transaction with ads

C. Both of the above

D. None of the above

63. DIRECT QUOTATION means

A. A given number of units of foreign currency per unit of domestic currency e.g. ₹ 100=USD2.46

B. A given number of units of domestic currency per unit of foreign currency e.g. USD1=₹ 45.56

C. Any of the above

D. None of the above

64. Documents evidencing import into India should be preserved by bank for a period of _____from the date of its verification. However, in respect of cases which are under investigation by investigating agencies, the documents may be destroyed only after obtaining clearance from the investigating agency concerned

A. One year

B. Six Months

C. 3 months

D. 5 years

65. Exchange Fluctuation Risk Cover of ECGC is intended to provide a measure of protection to exporters of capital goods, civil engineering contractors and consultants who have often to receive payments over a period of years for their exports, construction works or services. Where such payments are to be received in foreign currency, they are open to exchange fluctuation risk as the forward exchange market does not provide cover for such deferred payments. Is available for maximum

A. 5 years

B. 10 years

C. 15 years

D. 7 years

66. General permission is available to any resident individual to surrender received or realized or unspent or unused foreign exchange to an Authorised Person within a period of ______ days from the date of receipt or realisation or purchase or acquisition or date of return of the traveller, as the case may be

A. 180 days

B. 90 days

C. One year

D. None of these

67. Gift per financial year per remitter or donor other than resident individual is

A. USD 10000

B. USD 20000

C. USD 5000

D. USD 25000

68. In case of all imports, where value of foreign exchange remitted or paid for import into India _______, it is obligatory on the part of the AD Category-1 bank through whom the relative remittance was made, to ensure that the importer submits evidence of imports

A. Exceeds USD 100,000 or its equivalent

B. Exceeds USD 10,000 or its equivalent

C. Exceeds USD 500,000 or its equivalent

D. None of these

69. In case of all imports, where value of foreign exchange remitted or paid for import into India _______, it is obligatory on the part of the AD Category-1 bank through whom the relative remittance was made, to ensure that the importer submits evidence of imports

A. Exceeds USD 100,000 or its equivalent

B. Exceeds USD 10,000 or its equivalent

C. Exceeds USD 500,000 or its equivalent

D. None of these

70. In case of paper presentation

A. UCP alone shall apply

B. Both UCP and e_UCP shall apply

C. Both of the above

D. None of the above

71. In cases where exporters present documents pertaining to exports after the prescribed period of 21 days from date of export, banks

A. May handle them without prior approval of the Reserve Bank, provided they are satisfied with the reasons for the delay

B. Return the documents to exporter

C. Seek RBI Approval

D. None of these

72. In forex market the maxim is Buy ___and sell ___

A. Low, High

B. High, Low

C. High, High

D. Low, low

73. Loan against deposits allowed to NRIsis to be credited to

A. NRE Saving fund account

B. NRO Saving fund account

C. To be paid in cash only

D. None of the above

74. Minimum period for NRE or FCNR (B) fixed deposits is

A. 7 days

B. 3 months

C. One year

D. Five years

75. Statement on half_yearly basis as at the end of June & December of every year, in form _____ furnishing details of import transactions, exceeding USD 100,000 in respect of which importers have defaulted in submission of appropriate document evidencing import within 6 months from the date of remittance

A. BEF

B. XOS

C. STAT

D. CDF

76. Supply of goods or services by Indian exporter to UN agencies for execution of projects in India where payment is realized in foreign currency is called as

A. Deemed exports

B. Merchanting trade

C. Domestic supply

D. None of these

77. TDS in case of NRI deposits interest is not to be deducted in

A. NRO saving fund account

B. NRE saving fund account

C. Both of these

D. None of these

78. The amount of undrawn balance is considered normal in the particular line of export trade, subject to a maximum of _____ per cent of the full export value.

A. 5

B. 20

C. 25

D. 10

79. The duplicate copies of GR or SDF or PP forms and shipping documents, once submitted to the banks for negotiation, collection, etc.

A. Should not ordinarily be returned to exporters, except for rectification of errors and resubmission

B. Should be sent to RBI

C. Should be sent to customs for revalidation

D. None of these

80. The Interest on deposits accepted under FCNR (B) scheme shall be paid on the basis of ____ days a year

A. 365 days

B. 366 days

C. 360 days

D. 365 or 366 days in accordance with leap year.

81. The loans allowed to NRIs cannot be utilized for the purpose of

A. Re-lending

B. For carrying on agriculture or plantation activities

C. For investment in real estate business

D. All of the above

82. The limit of loans to dealers/sellers of fertilisers, pesticides, seeds, cattle feed, poultry feed, agricultural implements and other inputs has been raised to:

A. 1 crore

B. 2 crore

C. 3 crore

D. 5 crore

83. The entitlement for foreign exchange to a person, irrespective of period of stay, for business travel, or attending a conference or specialized training abroad is:

A. USD 25000

B. USD 10000

C. USD 100000

D. USD 20000

84. Under Liberalized Remittance Scheme for Resident Individuals Authorized Dealers may freely allow remittances by resident individuals up to _______per financial year (August 2013) for any permitted current or capital account transactions or a combination of both

A. USD 200,000

B. USD 75000

C. USD 100000

D. USD 20000

85. What are provisions for Interest rates in case of NRE Fixed Deposits?

A. LIBOR or SWAP rates, as on the last working day of the previous month, for US Dollar of corresponding maturities PLUS 175 BASIS POINTS

B. LIBOR or SWAP rates, as on the last working day of the previous month, for US Dollar of corresponding maturities PLUS 100 BASIS POINTS

C. LIBOR or SWAP rates, as on the last working day of the previous month, for US Dollar of corresponding maturities PLUS 75 BASIS POINTS

D. None of the above.

86. What is income tax rate in case of NRO Deposits

A. Tax deductible irrespective of type of account and amount of interest, rate 20% in case of foreign remittance and 30% on deposits from local income. Surcharge and education cess extra

B. 10% in case PAN number submitted to bank

C. 20% in case PAN number not submitted to bank

D. Income tax is not applicable in case of NRO deposits.

87. What is Merchanting Trade?

A. The trade transactions where goods are not touching boarders of the country. Goods are procured by the trader from abroad and exported to third country

B. The trade between merchants of the same country

C. The trade between merchants of the two different countries .

D. None of these

88. What is relationship of e_UCP and UCP?

A. A credit subject to e_UCP also subject to UCP

B. Where e_ UCP applies, its provisions shall prevail to the extent they produce different results

C. Both of the above

D. None of the above

89. What is the maximum amount of Loan against NRE or FCNR (B) Deposits?

A. ₹ 100Lakh

B. ₹ 500Lakh

C. No limit

D. None of the above

90. When a bank is prepared to deal in the two ways quoted rates is called as

A. Market maker

B. Market user

C. Seller and Buyer

D. None of these

91. Where imports are made in non-physical form, i.e., software or data through internet or datacom channels and drawings and designs through email or fax, a certificate from a ________ that the software or data or drawing or design has been received by the importer, may be obtained

A. Chartered Accountant

B. Reserve Bank of India

C. Department of Electronics Govt. Of India

D. Registrar of Companies

92. Which account can be opened by a foreign national of non_Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India

A. NRO current account

B. NRO Saving account

C. Both of the above

D. None of the above

93. Which of these is not correct about FCNR(B) deposits

A. FCNR (B) can be opened and maintained by designated branches only.

B. Indian staff posted at Indian Embassy in Pakistan or Bangladesh and their non-resident dependents may open these accounts

C. These accounts can be opened in six currencies

D. None of the above

94. Write off in cases of Payment of Claims by ECGC and private insurance companies regulated by IRDA

A. Banks may write off the relative export bills and delete them from the XOS statement

B. RBI permission is required

C. Cannot be deleted from XOS till amount is realized in full

D. None of these

95. The term _____ means you bought and are holding it in the expectation that it will appreciate in value. ____means you are selling currency in the expectation that currency will depreciate in values

A. Long, Short

B. Short, long

C. Long, Long

D. Short, Short

96. The term BIOS represents which of the following

A. Basic input and output system

B. Basic input output standard

C. Base input outward system

D. Basic inward outward standard

97. The term broad money is known as

A. M1

B. M2

C. M3

D. M0

98. The term CAD in the context of use of computers, means

A. Computer application design

B. Computer aided design

C. Computer appraised data

D. Computer assisted deptt

99. The term e-Commerce represents which of the following

A. Economical commerce

B. Electrical commerce

C. Electronic commerce

D. Elementary commerce

100. The term RAM stands for which of the following

A. Read able memory

B. Random access memory

C. Readable accessing memory

D. Read & access memory