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Test: Principles and Practices of Banking - 1 - Bank Exams MCQ


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100 Questions MCQ Test Mock Test Series for JAIIB Exam 2025 - Test: Principles and Practices of Banking - 1

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Test: Principles and Practices of Banking - 1 - Question 1

Among the given, which of the following statement is not correct in context of financial literacy?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 1

Benefits of Financial literacy:

  • Financial literacy promotes financial inclusion and ultimately financial stability. In India, its need is even greater, due to low levels of literacy and the large section of the population, remaining out of the formal financial set-up.
  • Financial Literacy is the process by which people improve their knowledge and understanding of the use of financial products and services. It is also described as one's ability to make informed judgements and to take effective decisions regarding the use and the management of money.
  • The financial literacy is promoted by the provision of financial education and is a prelude to financial inclusion in villages. Financial literacy, besides acquiring and/or acquainting with the information on financial services through the process of financial education by an individual, is a state of mind at which the individual is equipped with the skills necessary to access resources to make him capable of dealing with financial intermediaries, like banks.
  • The delivery of financial education comprises of three key themes: building skills, increasing knowledge and developing understanding and within each of these an individual's confidence should also be developed, which alone will pave way for faster financial inclusion of the hitherto excluded population in the rural areas. One of the aims of financial education is to guide the rural population in management of existing debt and the exit methods.

Hence, option (a) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 2

Among the given, which of the following doesn't come under the category of PSL?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 2

Different categories under priority sector Priority Sector includes the following categories:
i. Agriculture
ii. Micro, Small and Medium Enterprises
iii. Export Credit
iv. Education
v. Housing
vi. Social Infrastructure
vii. Renewable Energy
viii. Others
Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 3

Among the below given statements, which of the following is an incorrect statement in context to Data mining?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 3

What is Data Mining?

  • In enormous data sets, data mining seeks out hidden, true, and potentially helpful patterns. Finding unexpected or previously undiscovered correlations among the data is the main goal of data mining.
  • It is a multidisciplinary talent that makes use of database technologies, AI, statistics, and machine learning.
  • Data mining insights may be applied to marketing, fraud detection, and scientific research, among other things.
  • Knowledge discovery, knowledge extraction, data/pattern analysis, information harvesting, etc. are other names for data mining.

Hence, option (b) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 4

Which of the following distinctions between ethics and values are appropriate?
I. Ethics are a system of moral principles and values that are stimuli for thinking
II. Ethics constraints whereas value motivate
III. Ethics determines the level of importance whereas values determine the extent of the appropriateness of options
IV. Ethics vary according to individuals whereas values vary according to the profession

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 4

DISTINCTION BETWEEN ETHICS & VALUES ARE AS FOLLOWS:

  • Ethics are a system of moral principles and values that are stimuli for thinking
  • Ethics constraints whereas value motivate
  • Therefore, Options I & II are correct.
  • Values determine the level of importance whereas ethics determines the extent of the appropriateness of options
  • Values vary according to individuals whereas ethics varies according to the profession.

Hence, Option (c) is the correct answer.

Test: Principles and Practices of Banking - 1 - Question 5

The following is/are called threats of IS Security.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 5

Banks must meet their customer's requirements for security aspects specially on many levels. Threats to IS Security are Phishing Attacks, Hacker's attacks, Vishing, and E-mail Viruses.

Test: Principles and Practices of Banking - 1 - Question 6

The objective of Computer Auditing is ______.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 6

Computer auditing is a systematic and logical process that follows a risk-based approach to determine whether the information systems of an entity, including its detailed information technology processes, controls, and activities, will achieve its IT objectives and will thereby ultimately enable the organization to achieve its organizational goals.

The objective of Computer Auditing is:

  • Assets safeguarding.
  • Preserving data integrity.
  • Achieving system efficiency.
Test: Principles and Practices of Banking - 1 - Question 7

Among the given which of the following is correct about the rate of interest provided by bank in case of home loan?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 7

The interest rate for a house loan is lower than the interest rate for other loans. The majority of banks provide an interest rate that is lower than the "Bench Mark Prime Lending Rate" (BPLR) . Additionally, banks provide borrowers the choice between a fixed rate and a fluctuating rate.

Hence, (d) is correct.

Test: Principles and Practices of Banking - 1 - Question 8

What gives you the ability to powerfully deal with not only specific situations but also in other areas of one's life?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 8

Individual Integrity and responsibility

Integrity is explained as firm adherence to a code of values. For an individual or for a Business, Integrity is the quality or state of being complete or undivided. In other words, it means being true to our values and ourselves and also keeping our commitment not only towards others but to ourselves also. In the individual value-set, Integrity is the core value, which makes an individual complete or undivided.

Why is it important to restore integrity?
This is mainly because it gives you the ability to powerfully deal with not only specific situation but also in other areas of one's life

Hence option a is correct

Test: Principles and Practices of Banking - 1 - Question 9

Banks in India have the obligation to follow the:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 9

Obligations of Bank

  • Obligation to Honour Cheques
  • Obligation to Maintain Secrecy
  • Obligation to follow all financial instructions of customers
  • Obligation to keep records in order
  • Obligation to give Notice before closing the account
  • Besides the Obligation towards the bank's customers, they also have got the obligation to follow all the laws, guidelines, directives and policies of the regulator RBI

Hence option b is correct

Test: Principles and Practices of Banking - 1 - Question 10

Ashutosh is creating a wonderful system in his branch, in which a special frame, passed from node to node, that gives a node permission to enter a frame into the ring is available. Can you find which system he used in his bank?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 10

Some of the commonly used types of adapters are Ethernet and Token-RING. In the ethernet system, the listen-before-transmit media sharing system is called the Carrier-Sense Multiple Access with Collision Detection (CSMA/CD) system is used. Ethernet cards share the common wire by transmitting only when the channel is clear.

Token-ring systems use what is termed as a deterministic media-access control system. The 'token' in 'token-ring' is actually a special frame, passed from node to node, that gives a node permission to enter a frame into the ring.

Hence, option (c) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 11

Among the given, below statement, which of the following statements is not correct in context to Set off?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 11

Essential Features of Set-off
(a) It is a statutory right that may also result from an understanding between the parties.
(b) The claim and the cross claim must both be for specific amounts, and there must be mutual indebtedness between the parties.
(c) Both the claims and the cross-claims must be for specific dollar amounts. The customer's credit balance cannot be offset against the borrowers' obligations if the customer has served as a guarantee to another party until the guarantee amount is established. A bank's whole network of branches is taken into account when calculating set-off.
(d) The set-off can be applied only to those debts, which are due and recoverable on the date of exercising the set-off.
(e) Indebtedness should arise in the same rights. Where the bank has noticed that the amount in the customer account is held under trust, the bank cannot exercise the right against a debit balance on A deceased's credit account and a customer's debit account cannot be combined.
Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 12

If an individual is trying to determine the ethical goals or an objective that he or she is trying to achieve, which of the following processes he/she should follow?
I. Raise questions
II. Use the information
III. Utilizes concepts
IV. Makes assumption

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 12

Ethical Reasoning and Real-world Application

Ethical reasoning is the process of recognizing which decision requires ethical judgments, determining the potential reasonable course of action, finding support for the potential course of action, and then selecting the course of action best supported. General purpose: Firstly, an individual is trying to determine the ethical goals or an objective that he or she is trying to achieve.

  • Raise questions: The key ethical question a person is trying to answer, that is the identification of issues he or she is facing and then formulating key ethical questions embedded in the issues, keeping in mind the relevant point of view.
  • Use information: One must identify the information, and collect all the data and facts, which will enable a person to understand and consider the requirement of evidence or observations relevant to others. Individuals' own experiences also help in developing suitable reasons.
  • Utilizes concepts: The key ethical concepts and principles that would assist in developing a thought process. Identification of ethical definitions, theories, models etc. that is applicable for reasoning through the issues.
  • Makes assumption: The main assumptions pre- suppositions used in reasoning in the ethical issue. Assumptions should also be justified for reasoning. Assumptions must also be evaluated from the perspective of understanding the ethical issues along with available alternatives.

Hence, the correct answer is Option (d) .

Test: Principles and Practices of Banking - 1 - Question 13

Which of the following statement(s) is/are correct:
i. Data mining techniques help companies to get knowledge-based information.
ii. Data mining helps organizations to make profitable adjustments in operation and production.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 13

Data mining is the process of sorting through large data sets to identify patterns and relationships that can help solve business problems through data analysis. Data mining techniques and tools enable enterprises to predict future trends and make more-informed business decisions.
Statement I is correct as Data mining techniques help companies to get knowledge-based information.
Statement II is correct as Data mining helps organizations to make profitable adjustments in operation and production.

Test: Principles and Practices of Banking - 1 - Question 14

According to the "seven-step, ethical decision-making model", what is the third step of the model?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 14

Ethical Decision-Making Model
It has been incorporated the work of Forester-Miller and Rubenstein (1992) , Haas and Malouf (1989) , Kitchener (1984) , Stadler (1986) , and Van Hoose and Paradise (1979) into a practical, sequential, seven-step, ethical decision-making model.
Step 1. Identify the problem.
Step 2. Apply the ACA Code of Ethics.
Step 3. Determine the nature and dimensions of the dilemma.
Step 4. Generate potential courses of action.
Step 5. Consider the potential consequences of all options and determine a course of action.
Step 6. Evaluate the selected course of action.
Step 7. Implement the course of action.
Hence, the correct answer is Option (b).

Test: Principles and Practices of Banking - 1 - Question 15

Identify the major ethical issues and challenges faced by the Indian Banking system.
I. Unable to make an adequate return on investment
II. Poor coordination and rude behaviour with customers
III. Unable to provide quality service to customers
IV. Increasing fraud and scams shook the banking industry

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 15

Ethical issues and challenges faced by the Indian banking industry:

  • The Indian banking industry is still lacking behind in making enough return on investment, or the return on equity, that shareholders require.
  • In the Indian Banking system banker behaviour towards their customer looks unfavourable and non-cooperative, this is due to the high volume of work pressure, less knowledge, and unfavourable behaviour from the customers' end.
  • Every business's success depends on customer experience and many banks are pressurised because they are not delivering the quality of service which customers are demanding, especially concerning technology.
  • Increasing fraud and scams shook the banking industry.

Hence, Option (d) is the correct answer.

Test: Principles and Practices of Banking - 1 - Question 16

Mark the incorrect:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 16

Section 58 of the act provides that no person in position of an instrument with a defect of title can claim the amount of instrument unless he' s a holder in due course.

The moment an instrument comes into the hands of a holder in due course, not only does he get a title which is free from all defects, but having passed through his hands the instrument is cleaned of all defects.

Hence option d is correct.

Test: Principles and Practices of Banking - 1 - Question 17

Among the given, which of the following is incorrect about a Multi-user computer network?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 17

In such system computers are based on the centralised processing concept. All information is kept and processed at the main central machines and various terminals are attached to the main computer. The main computer can store a huge amount of information and possesses high-processing speeds enabling many users to be connected to the main central computer. Each user has his/her own terminal. Systems like Unix are used as operating system. These systems work on a time-sharing basis and are well suited for the development of online applications. Most of the banking systems are developed using the centralised computing concept. This is due to the widespread popularity of the Unix system. Most of the Relational Data Base Management Systems (RDBMSs) and other Data Base Management Systems (DBMSs) use the Unix platform.

Hence, option (c) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 18

Which of the following is not one of the four vital banking parameters mentioned in the BASEL III guidelines?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 18

In 2010, Basel III guidelines were released. These guidelines were introduced in response to the financial crisis of 2008. A need was felt to further strengthen the system as banks in the developed economies were under-capitalized, over-leveraged and had a greater reliance on short-term funding. Also, the quantity and quality of capital under Basel II were deemed insufficient to contain any further risk. Basel III norms aim at making most banking activities such as their trading book activities more capital-intensive. The guidelines aim to promote a more resilient banking system by focusing on four vital banking parameters viz. capital, leverage, funding and liquidity.

Test: Principles and Practices of Banking - 1 - Question 19

A garnishee order imposed on a bank attaches the credit amount in the account of the customer mentioned, to the extent indicated in the order, pursuant to Indian Civil Procedure Code Order 21 of which rule?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 19

GARNISHEE ORDERS

  • It is a legal procedure in favour of the judgment-creditor for a debt due from the judgment-debtor (bank customer) upon a third party for attachment.
  • A garnishee order is a court order obtained by a judgement creditor attaching the funds belonging to a judgement debtor in the hands of his debtors, including a bank, who is called the garnishee.
  • A garnishee order imposed on a bank attaches the credit amount in the account of the customer mentioned, to the extent indicated in the order, pursuant to Indian Civil Procedure Code Order 21 Rule 46 of the Act.
  • If no amount is indicated, the order attaches all monies owed and accruing to the client as of the day and time it is served and accepted by the bank, regardless of how much is owed. After the garnishee order has been served, checks should be returned with the note "Refer to Drawer."
  • The preliminary court processes are the serving of the garnishee order nisi. Garnishee absolute refers to the further court actions necessary to make it absolute after this.
  • The order can only be related to the client's current account balance, or the amount that is due and accruing due or payable to the customer at the moment the order is received.

Hence, option (b) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 20

Among the given, which of the following is correct about EDP?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 20

In most of the computerised information systems, the data is processed at one EDP department. The EDP department must process large volumes of data every day and a considerable amount of infrastructure and maintenance is required. In this approach, the terminals have limited powers and cannot process the information locally. Whatever information required and processed is through the central machine only. The load on the central machine increases with the increase in the number of users.

Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 21

RTGS offers the following advantage(s) over the other modes of funds transfer _____. 

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 21

Advantages of RTGS

  • It is a safe and secure system for funds transfer.
  • RTGS transactions/transfers have no amount cap.
  • The system is available on all days on a 24x7x365 basis. There is the real-time transfer of funds to the beneficiary account.
  • The remitter need not use a physical cheque or a demand draft.
  • The beneficiary need not visit a bank branch for depositing the paper instruments.
  • The beneficiary need not be apprehensive about loss/theft of physical instruments or the likelihood of fraudulent encashment thereof.
  • A Remitter can initiate the remittances from his / her home/place of work using internet banking if his / her bank offers such service.
  • The transaction charges have been capped by the RBI.
  • The transaction has legal backing.
  • RTGS is available 24x7x365 with effect from December 14, 2020.
  • The RTGS system is primarily meant for large value transactions. The minimum amount to be remitted through RTGS is ₹ 2,00,000/- with no upper or maximum ceiling.
  • With effect from July 01, 2019, the Reserve Bank has waived the processing charges levied by it for RTGS transactions. Banks may pass on the benefit to their customers.

Hence all the above options are correct.

Test: Principles and Practices of Banking - 1 - Question 22

For opening an account of a Partnership Firm, the Certified Copies of each of the following documents is/are required.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 22

Below documents are required for opening an account of Partnership firm

Test: Principles and Practices of Banking - 1 - Question 23

Which of the following are the benefits of having a strong work ethic in an organisation?
I. Results in higher productivity
II. Balanced respectful workplace culture
III. Creates a wider pool of talents
IV. Builds public image and brand value

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 23

The benefits of having a strong work ethic in an organization are as follows:

  • People with a strong work ethic take pride in their jobs and see every task they do as important which ultimately results in higher productivity.
  • People with strong work ethics are true professionals as they respect their fellow employees, their higher-ups, and those that they come into contact with which creates a balanced and respectful culture to work in.
  • When employees work with a strong work ethic from the beginning, you can keep your strongest assets within the company as they will continue their dedication as they advance in their careers which results in a wider pool of talents in an organisation.
  • Employees with a strong work ethic present themselves as professionals in every sense of the word which will build public image and brand value for an organisation.

Hence, Option (d) is the correct answer.

Test: Principles and Practices of Banking - 1 - Question 24

Among the given, choose which of the following is not correctly matched?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 24
  • The Board received financial assistance from the Reserve Bank of India, which covered its first five years' worth of expenditures.
  • The Banking Codes and Standards Board of India (BCSBI) was set up on 18th February 2006 as a collaborative effort of RBI and Banks, on the lines of a similar set up in UK to oversee the "Banking Code", a voluntary Code, evolved by the British Bankers Association (BBA) , which is adopted by all banks in UK.
  • The proposal for setting up the BCSBI was based on the recommendation made by the Committee on Procedures and Performance Audit on Public Services (Tarapore Committee) .
  • It provides valuable protection for customers on a day-to-day basis as also in times of financial difficulty.
  • The code applies to savings deposits and current accounts, card products and services, loans and overdrafts and payment services including foreign exchange.
  • Hence, option (a) is the correct choice.
Test: Principles and Practices of Banking - 1 - Question 25

Among the below given matches, which of the following is correctly matched on the basis of the business ethics and business values?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 25

Business Ethics

  • Ethics refers to the guidelines for conduct, that address questions about morality
  • Moral Principal system
  • What is morally correct or incorrect in the given situation?
  • The magnitude of the rightness or wrongness of one's options.

Business Values

  • Value is defined as the principles and ideals, that help people make judgments about what is more important.
  • Induces thinking
  • What do we want to be or achieve?
  • It explains the level of significance.

Hence, option (a) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 26

Among the given, which of the following statements is/are the correct statement in context to PSL?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 26

The following are the correct statements:

  • Priority Sector Lending is a significant responsibility given by the RBI to the banks for the purpose of allocating a specific percentage of bank lending to a few specific sectors, such as agriculture and related activities, micro and small enterprises, low-income individuals for housing, students for education, and other weaker groups. Instead of concentrating just on the financial sector, this is primarily intended for the development of the economy as a whole.
  • The Government of India emphasised that commercial banks should boost their engagement in the financing of priority sectors, namely, agriculture and small-scale businesses, during a meeting of the National Credit Council held in July 1968.
  • Although initially there was no specific target fixed in respect of priority sector lending, the Reserve Bank advised the banks in November 1974 to raise the share of these sectors in their aggregate advances to the level of 33 and one-third per cent by March 1979.
  • At a meeting of the Union Finance Minister with the CEOs of public sector banks held in March 1980, it was agreed that banks should aim at raising the proportion of their advances to priority sectors to 40 per cent by March 1985.
  • All commercial banks were urged to reach the aim of priority sector lending at 40% of the total bank loans by 1985 based on the recommendations of the working group on the methods of execution of priority sector lending and the twenty-point economic programme by the bank.
  • Sub targets for lending to agriculture and the weakest segments of the priority sector were also set. The scope of priority sector lending as well as the objectives and sub-targets applicable to different bank groups have undergone several adjustments since that time.

Hence, option (a) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 27

Which of the following denotes the cash management service?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 27

In a banking institution, the term Cash Management refers to the day-to-day administration of managing cash inflows and outflows. Because of the multitude of cash transactions on a daily basis, they must be managed. The ultimate goal of cash management is to maximize liquidity and minimize the cost of funds.
Hence option b is correct.

Test: Principles and Practices of Banking - 1 - Question 28

As per which section of Indian Partnership Act, a partnership is defined as a relationship between people who have agreed to split the earnings of a firm that is operated by all of them acting for all of them?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 28

A partnership is defined as a relationship between people who have agreed to split the earnings of a firm that is operated by all of them acting for all of them under Section 4 of the Indian Partnership Act, 1932.
Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 29

Identify the correct/appropriate ways to prevent unethical behaviour at the workplace.
I. Preventing justification for unethical behaviour
II. Providing training on ethical decision-making and ethical leadership
III. Focus on performance goals rather on learning goals for employees
IV. Implement proper monitoring systems

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 29

Ways to prevent unethical behaviour in the workplace are as follows:

  • When justifications for unethical behaviour are available, an employee can maintain their honest person image and see their conduct as less severe or even rightful therefore having a reasonable justification to behave unethically is the strongest factor leading people towards unethical behaviour.
  • Training the workforce on ethical decision-making and ethical leadership tends to reduce the incidences of unethical behaviour at work.
  • When companies ask their employees to continue learning, to keep improving professionally, and to be better than before (learning goals) , unethical behaviour is reduced drastically but when they focused on performance goals (asking people to do better than others) unethical behaviour increases. Therefore, Option (c) is incorrect.
  • Monitoring systems like recording calls and video surveillance, signals that unethical behaviour will be detected and wrongdoers will be held accountable.
  • Therefore, statements I, II & IV are correct.

Hence, Option (b) is the correct answer.

Test: Principles and Practices of Banking - 1 - Question 30

Which of the following are the correct conditions of indirect finance to SHGs through NGOs?
I. A statement of credit is required by SHGs
II. Resolution to borrow from banks
III. Provision of in-laws of NGOs to borrow for SHG activities
IV. NGO is registered under the society/company/partnership/cooperative act
V. Audited balance sheet for five-year analysis

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 30

The correct conditions of indirect finance to SHGs through NGOs are:

  • A statement of credit is required by SHGs
  • Resolution to borrow from banks
  • Provision of in-laws of NGOs to borrow for SHG activities
  • NGO is registered under the society/company/partnership/cooperative act
  • Audited balance sheet for three-year analysis

Thus, Statements I, II, III & IV are correct.
Hence, the correct answer is Option(d) .

Test: Principles and Practices of Banking - 1 - Question 31

Among the below given matches, which of the following is correctly matched on the basis of the bank guarantee?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 31

A bank guarantee is a contract between 3 different parties and they include:
i) The applicant (the party that requests a bank guarantee from the bank and borrows from a creditor)
ii) The beneficiary (the party that receives a partial guarantee)
iii) The bank (the party that agrees to sign and assures payment in case the applicant fails to repay the loan)
Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 32

When was the shared payment network system (SPNS) or SWADHAN network of ATMs set up by the Indian Banks' Association?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 32

Indian Banks' Association (IBA) was the first to set up a shared payment network system (SPNS) or SWADHAN network of ATMs of its member banks in Mumbai. The network went live on 1 February, 1997. The objective behind the SWADHAN network is to provide 24 hours, 7 days a week electronic banking service to the customer of a member bank anywhere in the city of Mumbai

Test: Principles and Practices of Banking - 1 - Question 33

Which of the following is an ethical decision-making weighing factor?
I. The desired outcome of a decision
II. The means used to achieve the desired outcome
III. The motivation behind the decision
IV. The possible consequences of the decision

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 33

Ethical decision-making has involved weighing of four factors as under:

  • The desired outcome of a decision.
  • The means used to achieve the desired outcome,
  • The motivation behind the decision; and
  • The possible consequences of the decision.

Hence, the correct answer is Option (d) .

Test: Principles and Practices of Banking - 1 - Question 34

Which of the following is true
Statement I: HUF, Trust cannot invest in PPF Accounts.
Statement II: When the bank accepts articles for keeping in safe custody, the relationship between the banker and the customer is that of a Bailee and Bailor
Statement III: The locker cannot be allotted on hire to the minor.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 34
  • As per RBI guidelines. HUF and Trusts cannot invest in PPF accounts. However they are eligible for investing in SGB.
  • In case of Safe custody of Articles, the relationship between the customer and Bank is that of a Bailee or Bailor .
  • As any agreement with minor is considered void, hence the locker cannot be allotted on hire to minor.
  • Hence all the statements are correct.
Test: Principles and Practices of Banking - 1 - Question 35

Which of the following statements with regard to non-Performing assets (NPA) are correct?
I. A NPA is a loan or an advance where interest and/ or instalment of principal remain overdue for a period of more than 90 days in respect of a term loan.
II. Any amount due to the bank under any credit facility is 'overdue' if it is not paid on the due date fixed by the bank.
III. An asset would be classified as doubtful if it has remained in the substandard category for a period 9 months.
IV. A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection and the amount has been written off wholly.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 35
  • A NPA is a loan or an advance where interest and/ or installment of principal remain overdue for a period of more than 90 days in respect of a term loan.
  • Any amount due to the bank under any credit facility is 'overdue' if it is not paid on the due date fixed by the bank. An asset would be classified as doubtful if it has remained in the substandard category for a period of 12 months. A loss asset is one where loss has been identified by the bank or internal or external auditors or the RBI inspection but the amount has not been written off wholly. In other words, such an asset is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value.
Test: Principles and Practices of Banking - 1 - Question 36

If the customer by mistake left his or her goods in the bank. What is the relationship between banker and customer in such a case?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 36

If a customer keeps certain valuables or securities with the bank for safe-keeping or deposits a certain amount of money for a specific purpose, the banker, besides becoming a bailee, is also, a trustee. A trustee holds money or assets and performs certain functions for the benefit of another person called the beneficiary.

Hence option a is correct.

Test: Principles and Practices of Banking - 1 - Question 37

Among the given statements, which of the following is an incorrect statement in context to MIS?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 37

An information system used for decision-making, as well as for the coordination, control, analysis, and visualisation of information inside an organisation, is known as a management information system. the examination of management information systems that put employees, business procedures, and technology to the test in an organisational setting.

  • The study of people, technology, organisations, and their connections is known as management information systems (MIS) . MIS specialists assist businesses in getting the most out of their investments in people, technology, and operational procedures.
  • MIS is a people-focused industry with a focus on providing services using technology. A degree in MIS could be right for you if you're interested in technology and want to utilise it to make people's lives better.
  • For the administration of data, MIS specialists develop information systems (i.e., storing, searching, and analysing data) . To suit the demands of managers, employees, and clients, they also handle a variety of information systems.
  • MIS experts are able to play a significant role in areas like information security, integration, and exchange by cooperating with other members of their work group as well as with their customers and clients.
  • You may improve the efficacy and efficiency of your firm by learning how to creatively develop, implement, and use business information systems as a MIS major.

Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 38

"Officially Valid Document" (OVD) means ________.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 38

Officially Valid Document‖ (OVD) or the equivalent e-document means it should contain the details of identity and address. Hence any of the above can be accepted as OVD.

Test: Principles and Practices of Banking - 1 - Question 39

The banker must consider the RBI's instructions for specific objectives that forbid the issuance of bank guarantees, as well as the extended liability time that has been prompted as a result of amending which of the following section of the Indian Contract Act with respect to Guarantees issued in favour of the government department?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 39

Bank Guarantees: A bank guarantee is a commitment made by a bank or other financial institution that, in the event that a particular borrower defaults on a loan, it would cover the associated losses. Through this bank guarantee, the bank will reassure the original creditor that if the borrower is unable to pay his or her obligations, the bank will take care of them. The banker must consider the RBI's instructions for specific objectives that forbid the issuance of bank guarantees, as well as the extended liability time that has been prompted as a result of amending Section 128 of the Indian Contract Act with respect to Guarantees issued in favour of the government department.

Test: Principles and Practices of Banking - 1 - Question 40

Read the following statements and choose the correct option.
Statement I: SHGs act as pressure groups through which pressure can be mounted on the government to act on important issues
Statement II: SHGs help reduce corruption through social audits

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 40

Self-help groups: SHGs are informal associations of people who come together to find ways to improve their living conditions. They are generally self-governed and peer-controlled.
Statement I is correct SHGs act as pressure groups through which pressure can be mounted on the government to act on important issues
Statement II is correct SHGs help reduce corruption through social audits
Hence, the correct answer is Option(d).

Test: Principles and Practices of Banking - 1 - Question 41

Match the following with appropriate answer

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 41

A bus network is a network topology in which nodes are directly connected to a common half-duplex link called a bus. A host on a bus network is called a station. In a bus network, every station will receive all network traffic, and the traffic generated by each station has equal transmission priority. Where as in Star topology, all devices are connected to a central hub. Ring topology is a network in such each node connects to exactly two other nodes. Hence Option b is correct match.

Test: Principles and Practices of Banking - 1 - Question 42

When was the knowledge Technology (Reasonable Security Practices and Procedures and Sensitive Personal knowledge or Information) Rules introduced?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 42

The govt. of India also introduced the knowledge Technology (Reasonable Security Practices and Procedures and Sensitive Personal knowledge or Information) Rules, 2011 with an aim of making a sturdy legislation, which might protect customer's sensitive personal data by solely permitting banks to unleash data once the customer has expressly consented to such disclosure. The principles also permit banks to solely collect sensitive personal information for lawful functions connected with the performance or activity of banks and once the gathering of the knowledge is critical for such purpose.
Hence, the correct answer is Option (c).

Test: Principles and Practices of Banking - 1 - Question 43

Among the given statements, which of the following is not correct about RuPay?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 43

Rupay Card

  • RuPay, which was established by NPCI in 2012, only operates domestically.
  • The service is available to RuPay cardholders for card payments, internet purchases, and ATM withdrawals.
  • In compared to Visa and MasterCard, RuPay card processing costs and times are considerably cheaper. In both urban and rural regions of the nation, RuPay cards are accessible.

Hence, option (a) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 44

Among the given, with which of the following the business ethics is related?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 44

Business ethics are related to-

  • morally right and wrong behaviour,
  • in the business context,
  • including questions of fairness, justice, and equity,
  • that which require application of moral standards by persons in the organizations
  • the moral standards that are not separate, but derived from society

Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 45

Ram sticks on objective and rational reasons, among the given, on the basis of which of the accounts, he is a standpoint?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 45
  • Based on the Kantian account we can extract some important features for a standpoint, as follows:
  • An ethical principle should be based on objective and rational reasons
  • An ethical principle should provide freedom to agent to perform the actions
  • An ethical principle should treat humanity (society) as well as the environment as ends in themselves.
  • Hence, option (a) is the correct choice.
Test: Principles and Practices of Banking - 1 - Question 46

Among the given, which of the following is correctly matched?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 46

Legal Framework for Electronic Transactions
Consequent upon the recognition given to the electronic records, electronic documents and electronic signatures, incidental amendments have also been made in the following acts:

  • The Indian Penal Code, 1860
  • The Indian Evidence Act, 1872
  • The Bankers' Books Evidence Act, 1891
  • The Reserve Bank of India Act 1934

Hence, option (c) is the correct matched.

Test: Principles and Practices of Banking - 1 - Question 47

Orders received from the revenue authorities (income tax/sale tax authority) are called as?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 47

Orders received from the court for recovery of certain debts are called garnishee orders.
Orders received from the revenue authorities (income tax/sale tax authority) are called attachment orders.
Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 1 - Question 48

Among the given statements, which of the following statements is not correct with reference to the guidelines on credit card operation of banks?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 48

Guidelines on Credit Card Operations of Banks

  • The Reserve Bank of India had constituted a working group on the regulatory mechanism for cards.
  • The group has suggested various regulatory measures aimed at encouraging growth of credit cards in a safe, secure and efficient manner as well as to ensure that the rules, regulations, standards and practices of the card issuing banks are in alignment with the best customer practices.
  • Each bank/NBFC must have a well-documented policy and a 'Fair Practices Code' for credit card operations.
  • In March 2005, the IBA released a 'Fair Practices Code' for credit card operations which could be adopted by the banks/ NBFCs.
Test: Principles and Practices of Banking - 1 - Question 49

Which of the following is an example of simplex mode of transmission?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 49

A simplex transmission is capable of transmitting data in only one direction. The sender cannot receive and the receiver cannot send. Commercial radio broadcast is a simplex type of transmission. This type of transmission is useful in analogue sampling.
Walkie-talkie and modem are examples of half-duplex transmission and telephone is full duplex transmission.

Test: Principles and Practices of Banking - 1 - Question 50

Satish always treats others with respect, and shows suitable behaviour. Wearing proper attire, using fine language and conducting them with professionalism are part of the job. Among the given, which of the following nature of Satish is described here?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 50

Employee conduct is an exact significant value in ethics. Workers must treat others with respect, and show suitable behaviour. Wearing proper attire, using fine language and conducting them with professionalism are part of the job.
Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 1 - Question 51

MFI stands for ___________ and its role is to ___________.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 51

Micro-Finance Institutions (MFIs) provide small loans to poor and low-income households and aim at financial inclusion of the poor to come out of poverty and improve their living standards.

Test: Principles and Practices of Banking - 1 - Question 52

Direction: There are different types of customers in a bank based on how often they perform operations on their bank account like depositing funds, withdrawing money, transfer of money from one account to another, etc. On this basis, there are two extreme types of customers. On one hand, some customers perform such transactions multiple times a day like corporate clients, business individuals, etc. On the other hand, some customers had not performed any such transaction for months or even years. Such accounts are called Inoperative accounts and the deposits of such transactions remain still in their bank accounts and so they are called unclaimed deposits. Such accounts, seemingly harmless, carry a risk of being used for fraudulent activities by unscrupulous persons, whether employees or outsiders. Such accounts are treated distinctively by the banks.

Q. Can the deposits of a person be returned if he claims them after transferring the same to "The Depositor Education and Awareness Fund" (DEAF) when their accounts were inoperative for more than 10 years?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 52

As per this scheme, the depositor is entitled to claim from the bank his/ her deposit or any other unpaid deposits or operate the account even after the amount has been transferred to the fund.

Test: Principles and Practices of Banking - 1 - Question 53

Direction: There are different types of customers in a bank based on how often they perform operations on their bank account like depositing funds, withdrawing money, transfer of money from one account to another, etc. On this basis, there are two extreme types of customers. On one hand, some customers perform such transactions multiple times a day like corporate clients, business individuals, etc. On the other hand, some customers had not performed any such transaction for months or even years. Such accounts are called Inoperative accounts and the deposits of such transactions remain still in their bank accounts and so they are called unclaimed deposits. Such accounts, seemingly harmless, carry a risk of being used for fraudulent activities by unscrupulous persons, whether employees or outsiders. Such accounts are treated distinctively by the banks.

Q. In which of the following cases, the bank account is considered 'inoperative'?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 53

All the above cases are the exceptions to consider an account as inoperative, other than the (b) option where the account will be considered inoperative if it's a normal bank account but has not operated for 2 years.

Test: Principles and Practices of Banking - 1 - Question 54

Direction: There are different types of customers in a bank based on how often they perform operations on their bank account like depositing funds, withdrawing money, transfer of money from one account to another, etc. On this basis, there are two extreme types of customers. On one hand, some customers perform such transactions multiple times a day like corporate clients, business individuals, etc. On the other hand, some customers had not performed any such transaction for months or even years. Such accounts are called Inoperative accounts and the deposits of such transactions remain still in their bank accounts and so they are called unclaimed deposits. Such accounts, seemingly harmless, carry a risk of being used for fraudulent activities by unscrupulous persons, whether employees or outsiders. Such accounts are treated distinctively by the banks.

Q. After how much time of no transactions from an account is the account considered inoperative or dormant?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 54

A savings deposit account or a current account is treated as inoperative/dormant if there are no transactions for over two years.

Test: Principles and Practices of Banking - 1 - Question 55

Which among the following service(s) is/are provided under the Business facilitator model of financial inclusion?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 55

Under the Business Facilitator model of financial inclusion, the collection and preliminary processing of loan applications is one of the services that can be provided. Business Facilitators act as intermediaries between banks and customers, and they are authorized to provide certain banking and financial services in underserved and unbanked areas of the country.

Test: Principles and Practices of Banking - 1 - Question 56

In the case of the death of Karta, who among the following is eligible to become the next Karta in the ancestral business as per the laws of the Hindu Succession Act?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 56

Earlier only the next eldest male member of the family was eligible to be the next Karta but after the 2005 amendment to the Hindu Succession Act, it was held that the eldest female member of the family can be its Karta in a HUF.

Test: Principles and Practices of Banking - 1 - Question 57

Direction: Extending loans and advances is a conventional yet primary function of banks. Credit is a loan or debt of whatever form sanctioned by a bank to its customer. But there is a risk attached to extending loans and credits to customers. To avoid or minimize that risk, the banks have to evaluate the loan request by a prospective borrower through various techniques. Banks and other credit rating agencies give credit ratings to customers based on the borrower's financial standing.

Q. What is credit risk?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 57

Credit risk is simply the possibility of counterparty default (here, borrower).

Test: Principles and Practices of Banking - 1 - Question 58

Direction: Extending loans and advances is a conventional yet primary function of banks. Credit is a loan or debt of whatever form sanctioned by a bank to its customer. But there is a risk attached to extending loans and credits to customers. To avoid or minimize that risk, the banks have to evaluate the loan request by a prospective borrower through various techniques. Banks and other credit rating agencies give credit ratings to customers based on the borrower's financial standing.

Q. Which of the following is not a parameter of lending regarding credit appraisal?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 58

The creditworthiness of the borrower is evaluated, rather than the lender.

Test: Principles and Practices of Banking - 1 - Question 59

In cyberspace, a threat actor can be___

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 59

A threat actor is an individual or a group of individuals that take part in a malicious act to cause harm to IT assets, like computers.

Test: Principles and Practices of Banking - 1 - Question 60

Which of the following warehouse receipts can be used as a security against advances?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 60

Advances may be made against the security of Warehouse Receipts issued by Central and State Government Warehouses. However, Warehouse Receipts issued by Private Agencies maintaining such Warehouses should not be accepted unless such Private Agencies have been approved by the bank.

Test: Principles and Practices of Banking - 1 - Question 61

In case of advances given to a limited company against its assets, the required forms are to be presented to:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 61

In case of advances given to limited companies against its assets, the required forms are to be presented to the Registrar of Companies as a legal procedure to be followed.

Test: Principles and Practices of Banking - 1 - Question 62

Section 131 of the Negotiable Instruments Act protects to:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 62

Section 131 of the Negotiable Instruments Act protects the collecting bank if the collecting banker acts in good faith and without negligence.

Test: Principles and Practices of Banking - 1 - Question 63

What is a mandate?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 63

A mandate is an authority given by the account holder in favor of a third person to operate the account on his/her behalf after informing the bank and following the required procedure.

Test: Principles and Practices of Banking - 1 - Question 64

If there is a dishonored cheque by the paying bank when the cheque is properly drawn with sufficient balance in the account _____________.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 64

As per the law, a banker is liable to the drawer of the cheque for any loss/damage, due to any wrongful dishonor of the customer's cheque.

Test: Principles and Practices of Banking - 1 - Question 65

What are the guidelines issued by the Hon'ble Supreme Court of India to prevent sexual harassment in workplaces?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 65

In February 1998, the RBI advised all commercial banks to implement the guidelines given by the Hon'ble Supreme Court of India titled Sexual Harassment in Work Places – Guidelines by Supreme Court to Prevent Such Harassment. These guidelines provide a framework for preventing and addressing sexual harassment in the workplace.

Test: Principles and Practices of Banking - 1 - Question 66

Net asset value is disclosed by a mutual fund:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 66

Net Asset Value (NAV) of a mutual fund is disclosed by the fund house depending on the scheme. NAV represents the per-unit market value of a mutual fund scheme's assets minus liabilities. It is calculated by dividing the total value of the scheme's assets by the total number of units outstanding. The NAV is an important metric for investors as it provides a snapshot of the scheme's performance and the underlying assets.

Test: Principles and Practices of Banking - 1 - Question 67

Direction: In commercial transactions, when a customer wants to avail of some credit, he/she sometimes has to give a bank guarantee as an alternative to the cash security deposit. The guarantee is required if the credit history or financial position of a customer is not known to the lender or creditor. So, to avoid any kind of counterparty risk of default, a guarantee is required, given by someone who understands the financial standing of the customer. Whether a particular contract is a contract of indemnity or guarantee has to be decided by examining the language of the documents entered into between the parties and the nature of transactions.

Q. What happens to the guarantee given in case of the death of surety in general circumstances?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 67

The contract of guarantee is passed on to the legal heirs of the surety. While the liability of the surety continues and is passed on to their legal heirs, the terms of the guarantee contract may specify that the liability of the surety ends on their death. Additionally, local laws may vary and can impact the liability of the legal heirs in such cases. Therefore, it is important to review the specific terms of the guarantee contract and to seek legal advice in case of any uncertainties or disputes.

Test: Principles and Practices of Banking - 1 - Question 68

Direction: In commercial transactions, when a customer wants to avail of some credit, he/she sometimes has to give a bank guarantee as an alternative to the cash security deposit. The guarantee is required if the credit history or financial position of a customer is not known to the lender or creditor. So, to avoid any kind of counterparty risk of default, a guarantee is required, given by someone who understands the financial standing of the customer. Whether a particular contract is a contract of indemnity or guarantee has to be decided by examining the language of the documents entered into between the parties and the nature of transactions.
Mr. A contract with Mr. B, a shopkeeper to allow Mrs. A to take whatever goods she may need from his shop, up to the amount of 50,000. Mr. A will be liable for the debts incurred by Mrs. A up to the given amount.

Q. Which of the following types of guarantees is given by Mr. A to Mr. B?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 68

The above case is an example of continuing guarantee. It is a type of guarantee used in recurring transactions.

Test: Principles and Practices of Banking - 1 - Question 69

Direction: In commercial transactions, when a customer wants to avail of some credit, he/she sometimes has to give a bank guarantee as an alternative to the cash security deposit. The guarantee is required if the credit history or financial position of a customer is not known to the lender or creditor. So, to avoid any kind of counterparty risk of default, a guarantee is required, given by someone who understands the financial standing of the customer. Whether a particular contract is a contract of indemnity or guarantee has to be decided by examining the language of the documents entered into between the parties and the nature of transactions.

Q. What is meant by a bank guarantee?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 69

A bank guarantee is a kind of guarantee from a lending organization (here, bank) as the bank understands the financial standing of the customer.

Test: Principles and Practices of Banking - 1 - Question 70

What is the difference between a demand draft and a cheque?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 70

A Demand Draft cannot be payable to the bearer as it would amount to currency notes and will be a violation of Sec 31 of the RBI Act 1934.

Test: Principles and Practices of Banking - 1 - Question 71

Which among the following computers was deployed during the initial stages of the computerization of banks?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 71

During the initial stages of the computerization of banks, standalone computer systems were deployed in the banking industry. Standalone computers are those which can be used by only one person at a time but they were best suited for the decision-making process.

Test: Principles and Practices of Banking - 1 - Question 72

Which of the following provides a system of resolving disputes related to failed transactions in their respective payment system?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 72

RBI has advised the Payment System Operators (PSOs) to provide a system to cover disputes related to failed transactions in their respective payment systems.

Test: Principles and Practices of Banking - 1 - Question 73

Whistle blower policy of private sector and foreign banks were brought under the purview of _ while the whistle-blower policy for public sector banks was brought under the purview of ___________.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 73

The Whistleblower policy for the public sector banks and RBI was brought under the purview of the Central Vigilance Commission while in the case of Private sector and foreign banks, RBI brought out the "Protected Disclosures Scheme for Private sector and Foreign Banks."

Test: Principles and Practices of Banking - 1 - Question 74

_________ is authorized to store and safeguard the KYC records of the customers in digital form and _ is authorized to act and perform the functions of the former entity and __________ is the code assigned to a customer from the former entity.

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 74

Central KYC Records Registry (CKYCR) is an entity authorized to receive, store, safeguard, and retrieve the KYC records of a customer in digital form. GOI has authorized the Central Registry of Securitization Asset Reconstruction and Security Interest of India (CERSAI) to act as, and perform the functions of the CKYCR. KYC Identifier is the unique code assigned to a customer by the CKYCR.

Test: Principles and Practices of Banking - 1 - Question 75

Direction: With an increase in the growth and development of economies, traders and service providers find new ways and methods of exploiting consumers. The civil courts are not a suitable option to address this issue because of their complex nature. So, the law comes to the protection of the interest of the consumers from unfair trade practices, misleading advertisements, and much more. Owing to its importance, various separate forums are formed to safeguard the interest of the consumers and their rights under the Consumer Protection Act, which has been amended from time to time. These forums are formed on District, State as well as National levels depending upon certain circumstances.

Q. Who establishes the District Consumer Protection Council?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 75

For every district, the State Government establishes the District Consumer Protection Council and chaired by the District Collector.

Test: Principles and Practices of Banking - 1 - Question 76

Direction: With an increase in the growth and development of economies, traders and service providers find new ways and methods of exploiting consumers. The civil courts are not a suitable option to address this issue because of their complex nature. So, the law comes to the protection of the interest of the consumers from unfair trade practices, misleading advertisements, and much more. Owing to its importance, various separate forums are formed to safeguard the interest of the consumers and their rights under the Consumer Protection Act, which has been amended from time to time. These forums are formed on District, State as well as National levels depending upon certain circumstances.

Q. The Consumer Protection Act, 2019 extends to:

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 76

The Consumer Protection Act, 2019 extends to the whole of India including the Union Territory of Jammu & Kashmir.

Test: Principles and Practices of Banking - 1 - Question 77

What is the limit to bringing foreign exchange to India?

Detailed Solution for Test: Principles and Practices of Banking - 1 - Question 77

Foreign Exchange can be brought to India without any limit. However, if the value in cash exceeds USD 5,000 or its equivalent and/or cash plus Traveller's cheque exceeds USD 10,000 or its equivalent, a declaration should be made to the customs authorities in Currency Declaration Form (CDF).

Test: Principles and Practices of Banking - 1 - Question 78

Which of the following statements is true about business ethics?