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Test: Principles and Practices of Banking - 2 - Bank Exams MCQ


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100 Questions MCQ Test Mock Test Series for JAIIB Exam 2025 - Test: Principles and Practices of Banking - 2

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

Mr. Patnaik, who is the founder of Alpha deal Associates, asked his operation team and planning team for preparing a business plan for next year on the basis of the analysis and the scenario of market risk. Mr. Mishra who is Chief planning officers calls a general meeting and asked the team for analysing the market risk. For deeply analysing the market risk, the team must keep focus on certain variables defined by RBI. Among the below given risks which of the following parameter the team can ignore in preparing the market risk progression?

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

RBI has defined market risk as the possibility of loss to a bank, caused by changes in market variables, which are:
(a) Interest rate risk
(b) Commodity price risk
(c) Liquidity risk
(d) Foreign exchange rate risk
(e) Equity price risk
Hence, option (d) is the correct choice.

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

Mr. Shukla, who is the branch manager of a Maharashtra Grameen bank, trying to ensure that the funds are utilised for the sanctioned purposes and at the same time complying with all sanction terms and conditions, so that he can avoid the time lag and cost overruns and easily detect the early signals of incipient sickness in the units financed by banks and to initiate timely action for recovery or rehabilitation. Under the credit monitoring arrangements, he should ensure which of the following?

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

The credit monitoring in a bank is to ensure that the funds are utilised for the sanctioned purposes and at the same time complying with all sanction terms and conditions. The purpose of the exercise is also to avoid the time lag and cost overruns, to detect early warning signals and symptoms of incipient sickness in the units financed by banks and to initiate timely action for recovery or rehabilitation. Under Credit Monitoring Arrangement, banks ensure the following:
(a) Borrower should maintain reasonable estimates of current assets, current liabilities and working capital.
(b) Should maintain classification of current assets and current liabilities as per bank's guidelines.
(c) Should maintain a minimum current ratio of $1.33$ except for export industry and for new units.
(d) Should submit annual audited accounts in time for annual review by banks.
(e) Ad hoc limits are sanctioned for periods not exceeding three months.
(f) As far as possible, post-sale limits are sanctioned in the form of Bill Finance.

Test: Principles and Practices of Banking - 2 - Question 3

Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address ______________.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 3

Central Vigilance Commission (CVC) is an apex Indian governmental body created in 1964 to address governmental corruption. In 2003, the Parliament enacted a law conferring statutory status on the CVC. It has the status of an autonomous body, free of control from any executive authority, charged with monitoring all vigilance activity under the Central Government of India, advising various authorities in central Government organizations in planning, executing, reviewing and reforming their vigilance work.
Hence, the correct answer is Option (a).

Test: Principles and Practices of Banking - 2 - Question 4

Which of the following complaints will be entertained by consumer disputes redressal commission?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 4

Overcharging or deceptive charging, Unfair or restrictive trade practices, Sale of defective goods and services, sale of hazardous goods and services which are dangerous to life all these will be entertained by consumer disputes redressal commission.
Hence option d is correct.

Test: Principles and Practices of Banking - 2 - Question 5

Among the given, which of the following is not included in the general details of the partnership deed in case of opening a partnership firm account?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 5

Partnership firm Account
The following information must be included in a partnership deed:
A. General Details:

  • Name and address of the firm and all the partners
  • Nature of business
  • Date of starting of business Capital to be contributed by each partner
  • Capital to be contributed by each partner
  • Profit/loss sharing ratio among the partners

B. Specific Details:
Apart from these, certain specific clauses may also be mentioned to avoid any conflict at a later stage:

  • Interest on capital invested, drawings by partners or any loans provided by partners to firm
  • Salaries, commissions or any other amount to be payable to partners
  • Rights of each partner, including additional rights to be enjoyed by the active partners
  • Duties and obligations of all partners
  • Adjustments or processes to be followed on account of retirement or death of a partner or dissolution of firm.
  • Other clauses as partners may decide by mutual discussion

Hence, option (d) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 6

Match list 1 with list 2

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 6


Hence option a is correct

Test: Principles and Practices of Banking - 2 - Question 7

Mrs. Dindekar, always gives importance to the quality of good as well as it should take rules and preferences in the account of morality, on the basis of which of the accounts, she is a standpoint?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 7

Based on the utilitarian account we can extract some important features for a standpoint, as follows:
An ethical principle should be practical as well as it should take the human nature, conditions, and consequences in the account of morality
An ethical principle should work for the general maximization of good
An ethical principle should give importance to the quality of good as well as it should take rules and preferences in the account of morality.
Hence, option (b) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 8

For the funds availed under the Pradhan Mantri Rozgar Yojana in India. The repayments done in EMIs. What is the repayment schedule of the PMRY?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 8
  • The scheme of the Pradhan Mantri rozgar yojana (PMRY) was launched by the central government to offer sustainable self-employment prospects. It is given to 10 lakh educated and unemployed youth and women in India.
  • For the funds availed under the Pradhan Mantri Rozgar Yojana in India, required to make repayments in EMIs. The repayment schedule of the PMRY ranges 3 years to 7 years.
  • Hence, the correct answer is Option(a).
Test: Principles and Practices of Banking - 2 - Question 9

Under the prime minister rozgar yojana, preference is given to weaker sections including women. The scheme envisages __________ percent reservation for SC/ST and ____ percent for the other backward classes.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 9
  • The Prime Minister's Rozgar Yojana (PMRY) has been designed to provide employment to the educated employed youth by setting up micro enterprises by the educated unemployed poor. It relates to the setting up of the self-employment ventures for industries, services and business.
  • Under the prime minister rozgar yojana, preference is given to weaker sections including women. The scheme envisages 22.5 percent reservation for SC/ST and 27 percent for the other backward classes.
  • Hence, the correct answer is Option (b) .
Test: Principles and Practices of Banking - 2 - Question 10

Which of the following is/are correct about the financing of self-help groups under PMRY?
I. The loan may be provided as per individual eligibility taking into account the requirement of the project
II. The upper ceiling on loan
III. Required margin money contribution (i.e., subsidy and margin to be equal to 20 percent of the project cost) should be brought in by the SHG collectively
IV. Required margin money contribution (i.e., subsidy and margin to be equal to 15 percent of the project cost) should be brought in by the SHG collectively
V. The exemption limit for obtaining collateral security will be Rs 5 lakh per borrower account for the project under the industry sector

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 10

Self-help groups (SHG) could be considered for financing under the PMRY provided:

  • The loan may be provided as per individual eligibility taking into account the requirement of the project
  • No Upper ceiling on loan
  • Required margin money contribution (i.e., subsidy and margin to be equal to 20 percent of the project cost) should be brought in by the SHG collectively
  • The exemption limit for obtaining collateral security will be Rs 5 lakh per borrower account for the project under the industry sector

Thus, Statements I, III & V are correct.
Hence, the correct answer is Option(b) .

Test: Principles and Practices of Banking - 2 - Question 11

Branch representatives should visit the village after ___________ of the second session to make sure that the residents received their cards.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 11

The programme should be implemented at each site in three stages, each lasting a minimum of two hours, with a visit to guarantee that cards are delivered on time. Two weeks after the first session, there will be a second session. Branch representatives should visit the village after 15 days of the second session to make sure that the residents received their cards.
Hence, option (b) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 12

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

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 12

The concept of Bank Computerisation practically started after 1980-81 and more precisely gained pace in the year 1983-84, after setting up a committee in the year 1983 under the chairmanship of the then Deputy Governor of RBI, Dr. C. Rangarajan.

The following are the correct matched:

  • Standalone computer system - one person at a time
  • Multi user system - several people at the same time
  • Multi user computer networking - centralised processing concept.

Hence, option (c) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 13

Among the given, which of the following is/are the advantages of using a centralised data processing system?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 13

The advantages of using a centralised data processing system are namely,
(a) availability of corporate level information at one location is possible
(b) cost of acquiring hardware, software and other infrastructure is more profitable than acquiring the same for individual departments
(c) due to the high volume of data processing the computing resources can be fully utilised
(d) technical manpower can also be efficiently managed at a central level
(e) costly resources like leased telephone lines, satellite links, etc., can be shared among the various departments
Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 14

For communication between the computers, the data has to travel through some medium during its transmission. Which of the following is/are the prevalent technology/technologies for data communication media?
I. Terrestrial
II. Microwave
III. Satellites
IV. Multiplexers

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 14

For communication between the computers, the data has to travel through some medium during its transmission. There are the prevalent technologies for data communication media, such as:

  • Terrestrial- three of the most wiring techniques in this are twisted pairs, coaxial cables and fibre optics.
  • Microwave systems- these use very high-frequency radio signals used in telephone systems and television transmission
  • Satellites- communication satellites are now becoming very popular for data communication between computers. The speed of the satellites in orbit equals the speed of rotation of the earth, thus the satellites are stationary relative to the earth. The satellite is filled with transmitters and receiving antennas called transponders.

Multiplexers are communication processors.
Thus, Statements I, II & III are correct and IV is incorrect.
Hence, the correct answer is Option(d) .

Test: Principles and Practices of Banking - 2 - Question 15

Which of the following was commenced by the RBI in 1991 and is a packet-switched X.25 based network with nodes at Mumbai, Delhi, Chennai and Kolkata, and a switching Centre at Nagpur?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 15
  • The committees on communication networks for banks, set up in 1987 under the chairmanship of Shri T.N. Anantharam Iyer, executive director, Reserve Bank of India, had strongly recommended the establishment of a cooperative communication network, especially for the banking industry.
  • Based on the recommendations of this Committee, a communication network, 'Banknet' was set up in the year 1991 by the RBI to facilitate the inter-bank transfer of messages within India. It is primarily meant for the exclusive use of the banking industry and other financial institutions and links seven cities, viz., Mumbai, New Delhi, Kolkata, Chennai, Bangalore, Hyderabad and Nagpur through leased lines
  • Hence, the correct answer is Option(d).
Test: Principles and Practices of Banking - 2 - Question 16

The concept of good as opposed to evil helps us define the banking business from the point of view of ethics, and is known as ____________.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 16

Ontologism based on the concept of good as opposed to evil helps us define the banking business from the point of view of ethics. The idea of awareness or conscience of the need for banking products or services inevitably comes to mind. This simplified parallel leads us to the conclusion that full awareness of and the related ethics about the importance of banking products and services is imminent to all economies, regardless of their economic development.
Hence, the correct answer is Option (b).

Test: Principles and Practices of Banking - 2 - Question 17

Among the given, which of the following statements is not correct in context to LAN?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 17

Local Area Network (LAN) : The computer network that links computers and peripherals within a localised area say, within a building is known as LAN.

  • Generally, LAN will not extend beyond 150 metres. However, it can be up to a maximum spread of 1 km and the number of devices supported may also vary from 2 to as many as 1000.
  • In LANs, each independent system is known as a node and when such nodes are interconnected, it is known as a LAN.
  • Usually, there will be one central node (Server) providing and controlling all the services of the network.
  • The client nodes route their requests to the server and obtain the necessary services.

Hence, option (b) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 18

_________ investigates whether morality exists.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 18
  • Normative ethics: It is concerned with principles of morality, usually assuming an affirmative answer to the existence question and therefore deals with the reasoned construction of moral principles, and at its highest level, determines what the fundamental principle of morality is.
  • Applies ethics: It also usually assumes an affirmative answer to the existence question and addresses the moral permissibility of specific actions and practices.
  • Meta-ethics: It deals with the existence of morality and explores the status, foundations, and scope of moral values, properties, and words. Therefore, Option (c) is correct.
  • Business ethics: It is a study of the moral issues that arise when human beings exchange goods and services, where such exchanges are fundamental to our daily existence.
  • Hence, Option (c) is the correct answer.
Test: Principles and Practices of Banking - 2 - Question 19

Loan up-to how much rupees is given per borrower to dealers/ sellers of fertilizers, pesticides, seeds, cattle feed poultry feed, agricultural implements and other inputs?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 19

Other Indirect Agriculture Loans
i. Loans up to Rs 5crs. per borrower to dealers/ sellers of fertilizers, pesticides, seeds, cattle feed poultry feed, agricultural implements and other inputs.
ii. Loans up to Rs 5crs to cooperative societies of farmers for disposing of the produce of members.
Hence, option (c) is correct.

Test: Principles and Practices of Banking - 2 - Question 20

Read the following statement and choose the correct option as per Importance of Ethics in Business.

Statement I: Accounting Ethics is primarily a field of applied ethics, the study of moral values and judgements as these apply to accountancy.
Statement II: First introduced by Florina Edward, the 15th century Mathematician and later expanded by governments, Professional organizations and independent companies.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 20

Ethics of Banking / Financial Management

  • Accounting Ethics is primarily a field of applied ethics, the study of moral values and judgements as these apply to accountancy. First introduced by Luca Pacioli, the 15th century Mathematician and later expanded by governments, Professional organizations and independent companies.
  • Creative accounting, earning management, misleading financial analysis
  • Insider trading, securities fraud, ghost companies. forex scams, manipulation of financial markets
  • Executive compensation, specially to Chief Executives

Hence, the correct answer is Option (a) .

Test: Principles and Practices of Banking - 2 - Question 21

_______ complaints will not be covered under the Scheme and such complaints will not be entertained.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 21

As Public Sector Banks and Reserve Bank of India (since it is an entity established under Central Statute) have already been brought under the purview of Government of India scheme, with a view to avoid duplication, this Scheme would cover all private sector and foreign banks operating in India.

The complaints under the Scheme would cover the areas such as corruption, misuse of office, criminal offences, suspected / actual fraud, failure to comply with existing rules and regulations such as Reserve Bank of India Act, 1934, Banking Regulation Act 1949, etc. and acts resulting in financial loss / operational risk, loss of reputation, etc. detrimental to depositors' interest / public interest.

  • Under the Scheme, employees of the bank concerned (private sector and foreign banks operating in India) , customers, stake holders, NGOs and members of public can lodge complaints.
  • Anonymous / pseudonymous complaints will not be covered under the Scheme and such complaints will not be entertained.
  • Reserve Bank of India (RBI) will be the Nodal Agency to receive complaints under the Scheme. RBI would keep the identity of the complainant secret, except in cases where complaint turns out to be vexatious or frivolous and action has to be initiated against the complainant as mentioned in the below point.
  • The institution against which complaint has been made can take action against complainants in cases where motivated / vexatious complaints are made under the Scheme, after being advised by RBI. An opportunity of hearing will, however, be given by the concerned bank to the complainant before taking such action.
  • Final action taken by RBI on the complaint will be intimated to the complainant.

Hence option b is correct

Test: Principles and Practices of Banking - 2 - Question 22

Among the given under which of the following cases the automatic right of set off is not arises without any notice?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 22

Automatic right of set-off (i.e. set-off without notice) arises in the following cases:
(i) Death or insanity/insolvency of the customer
(ii) Insolvency of a partner or on the winding up of a company
(iii) Receipt of garnishee order
(iv) Receipt of notice of assignment of customer's credit balances (v) Receipt of a notice of secured mortgage over the security charged to the bank. The account of a sole proprietor (of a trading firm) and his individual account can be combined. A customer does not have a right of set-off against various accounts of various branches
Hence, option (d) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 23

In the case of a personal loan, the eligibility of the amount is what percent of gross loan?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 23

For meeting marriage/educational and medical expenses, to celebrate family functions and for other household expenses.
Eligible Amount:

  • The eligible amount of a loan is calculated based on so many times of the gross/net salary. While arriving at the quantum of loan, the minimum takes home pay say, forty per cent of the gross salary, will be stipulated after the proposed EMI.

Hence, option (a) is correct.

Test: Principles and Practices of Banking - 2 - Question 24

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

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 24

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.
Test: Principles and Practices of Banking - 2 - Question 25

Which of the following is false about Rangarajan Committee recommendations on computerisation in banking?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 25
  • The Reserve Bank of India has played an important role in implementation of information technology in the banking sector. Dr. Rangarajan Committee had drawn up in 1983-84 the first blueprint for computerisation and mechanisation in banking industry and looked into modalities of drawing up a phased plan for mechanisation for the banking industry covering the period 1985-89. The Committee in its report in 1984, recommended introduction of computerisation and mechanisation at Branch, Regional Office/Zonal Office and Head Office levels of banks.
  • In 1988 another committee was constituted under the Chairmanship of Dr. Rangarajan for making plans for computerisation for the next five years from 1990 to 1994 for the banking industry. It identified the purpose of computerisation as improvement in customer service, decision making, housekeeping and profitability. The Committee observed that 'Banking is a service industry and improved efficiency will lead to a faster rate of growth in output and help to expand employment all around. The workforce in the banking industry must, therefore, look upon computerisation as a means to improve customer service and must welcome it in that spirit'.
Test: Principles and Practices of Banking - 2 - Question 26

Among the given, which of the following is an advantage of update driven methodology?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 26

Advantages of Update-Driven Methodology
These are the benefits of this strategy:

  • This strategy offers great performance.
  • In a semantic data store, the data is copied, processed, integrated, annotated, compiled, and reorganised beforehand.
  • Processing data from local sources does not require an interface.

Hence, option (d) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 27

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 - 2 - Question 27

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 - 2 - Question 28

Smart card with an embedded Microchip, provides multiple options _____. Which of the following is/are Smart Card (s) ?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 28

A smart card is a physical card that has an embedded integrated chip that acts as a security token. Smart cards are typically the same size as a driver's license or credit card and can be made out of metal or plastic. They connect to a reader either by direct physical contact also known as chip and dip-or through a short-range wireless connectivity standard such as radio-frequency identification (RFID) or Near-field communication.

Test: Principles and Practices of Banking - 2 - Question 29

Among the given which of the following are the initiatives taken by BCSBI for spreading awareness of the codes amongst customers and banks?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 29

B2CSBI Also undertakes campaigns and initiatives to spread awareness of the Codes amongst customers and Banks such as:-

  • Provides faculty support to training establishment of Banks
  • Participates in On- location workshops held by member banks to increase coverage
  • Associate with customer awareness Programmes conducted by Banking Ombudsman
  • Provide Credit counselling services in Mumbai
  • Publishes quarterly newsletter entitled "Customer Matter" containing matters of interest to customers

Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 30

Which of the following are correct as regards to time deposits?
I. Repaid after the expiry of the Deposit Period.
II. High-interest rates, which vary according to period.
III. Time deposits from 7 days to 120 months period with or without reinvestment plans.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 30

Features of time deposits:

  • Repaid after the expiry of the Deposit Period.
  • High-interest rates, which vary according to period.
  • Time deposits from 7 days to 120 months period with or without reinvestment plans.
  • Interest is paid on quarterly rests and is cumulative every quarter

Hence option d is correct.

Test: Principles and Practices of Banking - 2 - Question 31

Among the given, which of the following are included under the category of basic right of consumer under Consumer protection act?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 31

Basic rights of consumers include

  • Right to be protected against marketing of goods and services that are hazardous to life and property
  • Right to be informed about the quality, quantity, standard, and price of goods or services so as to protect the consumer against unfair trade practices
  • Right to receive assured access, wherever possible, to a variety of goods and services at competitive prices
  • Right to be heard and to be assured that consumers' interests will receive due consideration at appropriate forums.
  • Right to seek redressal against unfair trade practices.

Hence, option (d) is correct.

Test: Principles and Practices of Banking - 2 - Question 32

Complaints to the CVC include failure to comply with regulations like:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 32

The complaints under the Scheme would cover the areas such as corruption, misuse of office, criminal offences, suspected / actual fraud, failure to comply with existing rules and regulations such as Reserve Bank of India Act, 1934, Banking Regulation Act 1949, etc. and acts resulting in financial loss / operational risk, loss of reputation, etc. detrimental to depositors' interest / public interest.
Hence option d is correct

Test: Principles and Practices of Banking - 2 - Question 33

Any other unwelcome physical, verbal or non-verbal conduct at the workplace constitutes:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 33

Sexual harassment is a type of harassment technique with explicit or implicit sexual overtones, including the unwelcome or inappropriate promise of rewards in exchange for sexual favors. Sexual harassment includes a range of actions from verbal transgressions to sexual abuse or assault.

The Guidelines and norms prescribed included the definition of sexual harassment and details as under:

  • Physical Contact
  • A demand or respect for sexual favours
  • Sexually coloured remarks
  • Showing pornography
  • Any other unwelcome physical, verbal or non-verbal conduct or sexual nature

Hence option c is correct

Test: Principles and Practices of Banking - 2 - Question 34

Selection of the correct set of documents is which stage of documentation procedure.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 34

Documentation procedure: For a document to be error free and proper, the steps are to be followed are:

  • Selection of Correct Set of Documents: Documentation varies depending upon the nature of facility and type of person. The document prescribed for a cash credit facility may not be used for a term loan facility. Similarly, a document meant for an individual borrower cannot be used for a company or partnership borrower
  • Stamping: The next aspect of documentation is stamping. A document shall be stamped in accordance with the Indian Stamp Act as amended by the concerned State Governments. Indian Stamp Act contains provisions regarding time of stamping for instruments executed in India and out of India.
  • Filing: The next aspect of documentation procedure is filling. As bankers are generally using the pre-printed formats of documents with blanks in appropriate places, it is necessary to fill these blanks as per the terms of sanction of the credit facility before execution. Once the document is executed it becomes a concluded contract and any subsequent filling by bank without the consent of the executant will invalidate it.
  • Execution: After filling, the next step in the documentation procedure is the execution or signing of the document. It should be ensured that the signature in the document tallies with the signature as appearing in the application for the loan and also with the specimen signature in case the party maintains a deposit account with the bank. In case, of execution in the representative capacity of sole proprietor or partner or director or agent or trustee or executor, etc., the property should be clearly mentioned.
  • Legal Formalities: In some cases, after execution of the document, certain legal formalities are required to be undergone. For example, in case of advances to limited companies against its assets, the required forms are to be presented to the Registrar of Companies with the thirty days from the date of execution. Similarly, in the case of creation of registered mortgages, the mortgage deed is presented for registration before the Registrar of Assurances within four months from the date of execution of the deed
  • Keeping Documents alive: The documents taken by banks for a credit facility do not have perpetual life. The provisions of the Limitation Act apply to them. The limitation Act prescribes the period of limitation for different types of documents. For example, the period of limitation for a DPN is three years from the date of execution. If a loan is not repaid within the period of limitation, then the bank has to get fresh document/s for extending the period of limitation as per the provisions of limitation Act. As per Section 18 of the Act, when the borrower acknowledges the debt before the expiry of the period of limitation, then the life of the document is extended by one more period from the date of such acknowledgement.

Thus, the Selection of the correct set of documents is the First stage of the Correct set of documents.

Hence, the correct answer is Option(a) .

Test: Principles and Practices of Banking - 2 - Question 35

Which of the following is true
Statement I: NEFT works on Gross Batch Settlement Principle.
Statement II: 10 Digits are present in IFSC Code.
Statement III: IN SFMS, S stands for Structured.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 35
  • NEFT works on the principle of Deferred Net Settlement Principle.
  • IFSC code has 11 digits
  • SFMS means Structured Financial Messaging System (SFMS)
  • Hence Only Statement III is correct.
Test: Principles and Practices of Banking - 2 - Question 36

Fill in the blanks

Ethics in the workplace is defined as the moral code that guides the behaviour of employees with respect to what is right and wrong in regard to ____________ and _______________.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 36

Ethics in the workplace is defined as the moral code that guides the behavior of employees with respect to what is right and wrong regarding conduct and decision-making. Ethical decision making in the workplace considers the individual employee's best interest and considers the best interest of those impacted. The latter of the definition is often where individual employees struggle to act ethically. Furthermore, ethical behavior doesn't only apply to individual employees, the organization itself should exemplify standards of ethical conduct.
Hence, the correct answer is Option (d).

Test: Principles and Practices of Banking - 2 - Question 37

Which of the following parties are involved in the credit card business?
I. Card issuing bank
II. Merchant
III. Merchant bank or acquiring bank
IV. Collecting bank

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 37

Credit card: The difference between the credit and charge card is that in the case of a charge card, the amount becomes payable immediately on the debit to the account. In the case of credit cards, the cardholder is sent a bill indicating the dues and he/she has the option to pay the entire amount as soon as the bill is received or choose to pay only a certain percentage of the amount billed, in which case the cardholder gets a credit to the extent of the balance amount of the bill.
The following parties are involved in the credit card business :

  • Cardholder: The person on whose name the card has been issued.
  • Card Issuing Bank: This is the bank which identifies the customer and issues the card. This bank will raise a bill on the customer as per the agreed billing schedule.
  • Merchant: The person who has accepted payment through a credit card.
  • Merchant Bank or Acquiring Bank: Once the card is swiped in the shop, the merchant will seek credit from his/her bank. The bank which reimburses the merchant is known as the merchant bank or acquiring bank.
  • Collecting Bank: The Merchant Bank will claim the payment from the card-issuing bank. This is known as the collecting bank, vi) VISA and MasterCard are companies which run the credit card operations and they capture all deals and settle the dues among the different intermediaries.

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

Test: Principles and Practices of Banking - 2 - Question 38

Mr. Tripathi, a branch manager of a nationalised bank, get an application of Dhruv Associates. After analysing the report, he gets that the current ratio of the bank is in range of 1.25 to 1.33 or higher. On the merit of the case, in such circumstances, Mr. Tripathi can accept which of the following alternatives?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 38

The projected net working capital, if higher than the current level maintained by the borrower, would be built up progressively with the growth in production, sales and profits. Therefore, during the initial stages in the current year, the NWC would generally be lower than the assessed, and in such circumstances, the borrower may not be able to maintain the stipulated current ratio, ranging from 1.25 to 1.33 or higher.

On the merits of each case, banks, in such circumstances, may accept either of the two alternatives.
(i) Release the assessed limits/credit on the borrower's undertaking to augment the NWC to the required level within a time frame of 2 quarters, provided the borrower maintains a current ratio between 1.17 and 1.25. In the meantime, the borrower brings in short-term funds from other sources to meet the shortfall in NWC.
(ii) Release a temporary limit equivalent to the shortfall in NWC for a short term, say one quarter, in addition to the duly assessed limits. In this case, the short-term loan from the bank is in lieu of the market borrowings that the borrower had to raise as the other alternative: Here again, the borrower has to maintain a lower current ratio between 1.17 and 1.25, but restore the ratio within a stipulated time frame.

Hence, option (c) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 39

The CEO asks his sister-in-law to buy more shares in the company he runs, just one week before a big government project is announced, because he is sure that this news will sky-rocket share prices. This practice is called:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 39

The above situation explains insider trading. In India, SEBI (Insider Trading) Regulation, 1992 framed under the Section 11 of the SEBI Act, 1992 intends to curb and prevent the menace of insider trading in securities. An insider is a person who is an accepted member of a group or organization who has special knowledge regarding his firm

Hence option d is correct

Test: Principles and Practices of Banking - 2 - Question 40

On the basis of a utilitarian account, which of the following is correct in the context of an ethical person?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 40

Based on the utilitarian account we can extract some important features for a standpoint, as follows:

  • An ethical principle should be practical as well as it should take the human nature, conditions, and consequences in the account of morality
  • An ethical principle should work for the general maximization of good
  • An ethical principle should give importance to quality of good as well as it should take rules and preferences in the account of morality

Hence, option (c) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 41

Among the given, which of the following is/are correctly matched on the basis of types of preventive vigilance?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 41

TYPES OF VIGILANCE

  • Preventive Vigilance: It plays an important role in strengthening the vigilance set up of any organisation. Preventive Vigilance sets up procedure and systems to restrain the acts of wrong doing and misconduct in the various areas of the functioning of department.
  • Detective Vigilance: Effective use and scan of Complaints, Inspection Reports, Audit Reports etc. Detection of Corrupt Practices, Malpractices, Negligence, Misconduct and better surveillance of public contact points. Close watch on officers at sensitive posts of doubtful integrity and detect fraud and scrutiny of decision taken by officials having discretionary powers.
  • Punitive Vigilance: It includes investigation and collection of evidence and speedy departmental inquiries. Swift and deterrent action against the real culprit.

Hence, option (a) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 42

Among the given, the emphasis on branch-level computerisation is for which of the following reasons?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 42
  • The emphasis on branch-level computerisation is for two important reasons. First, customer interface is at the maximum at the branch level. Increased use of computers and advanced technology can lead to reductions in waiting time, accuracy in reporting statement of accounts and expeditious transfer of funds. All these lead to improved customer service.
  • Second, the emphasis on online transactions processing at the branch level is because only if the data is initially captured in the machines, further processing becomes speedier and easier.
  • Hence, option (c) is correct choice.
Test: Principles and Practices of Banking - 2 - Question 43

In which year, Indian bank entered the IT world with INFINETwhich was set up by RBI & IDRBT?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 43

In India, banks as well as other financial entities entered the world of information technology with Indian Financial Net (INFINET) . INFINET, a wide area satellite-based network (WAN) using VSAT (Very Small Aperture Terminals) technology, was jointly set up by the Reserve Bank and Institute for Development and Research in Banking Technology (IDRBT) in June 1999.

Hence, Option (a) is the correct answer.

Test: Principles and Practices of Banking - 2 - Question 44

Among the below given statements which of the following is not correct?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 44

Wide Area Networks (WAN) are defined as a large-scale computer network spread over a span of sizeable geographic area, normally utilising the telecommunication network.

In the banking sector, the WANs are generally used to interconnect branches with the regional offices, and regional/zonal offices to head office, etc.

CORE BANKING

  • In core banking, there is a central database for the bank and transactions are done centrally, online. It offers integrated products and services to customers round the clock.

Automated Teller Machines (ATMs)

  • Automated Teller Machines (ATMs) are primarily used for performing some of the banking functions such as the withdrawal of cash or the deposit of cash/cheque, etc., by using an ATM card.
  • The committee headed by Dr. C. Rangarajan recommended the setting up of ATMs in India.

HWAK (The Intelligent Auto-teller and Netware Management System)

  • Intelligent auto-teller systems are a special breed of auto-teller machines capable of thinking for themselves, that means they are fast, impose less demands on your banking systems and serve the customers more like a personal banker than less sophisticated auto teller systems.
  • HWAK provides unsurpassed service even without the benefit of a reliable communication network.
  • Hence, option (b) is correct choice.
Test: Principles and Practices of Banking - 2 - Question 45

_____ is constructed by integrating data from multiple heterogeneous sources that support analytical reporting, structured and/or ad hoc queries, and decision making.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 45

Data warehousing is the process of constructing and using a data warehouse. Data warehousing involves data cleaning, data integration, and data consolidations.

Test: Principles and Practices of Banking - 2 - Question 46

Loans up to how much rupees is given to producer companies set up inclusively by only small and marginal farmers under part IXA of companies Act 1956 for agricultural and allied activities?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 46

Indirect Finance to Agriculture
i. If the aggregate loan limit per borrower is more than Rs. 2cr. in respect of para 20.3.1
ii. above, the entire loan will be treated as indirect finance to agriculture.
iii. Loans up to Rs.5crs. to producer companies set up inclusively by only small and marginal farmer under part IXA of companies Act 1956 for agricultural and allied activities
Hence, option (c) is correct.

Test: Principles and Practices of Banking - 2 - Question 47

Before making payment of a cheque, the bank should ensure that it is made in due course to enable it to get protection under the various provisions of the N.I. Act, the following under which section of N.I. act?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 47

Section 10 of the N.I. The Act defines payment in due course. Before making payment of a cheque, the bank should ensure that it is made in due course to enable it to get protection under the various provisions of the N.I. Act.
Hence, option (a) is the correct choice.

Test: Principles and Practices of Banking - 2 - Question 48

Among the given, on which of the following factor the base rate calculation in India is not dependent?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 48

In India, the base rate is determined by the RBI (Reserve Bank of India) . This is established by the RBI to ensure uniform rates across all Indian banks.
All the components of loan rates that are universal among borrowers in different categories make up a base rate.
The interest rate at which a bank loans money to its clients is known as the lending rate.
The running cost of a product, tenor premium, credit risk premium, and borrower-specific cost are all included in the loan rate. As a result, it varies from section to segment.
The calculation of base rate is based on different factors. A few of them are:

  • Deposit cost
  • Administrative cost
  • Unallocated overhead cost
  • The amount of profit a bank earns in the last financial year

Hence, option (a) is correct choice.

Test: Principles and Practices of Banking - 2 - Question 49

Which of the following is NOT an obligation of the bank?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 49

Interest and commission are incomes for the bank. They are hence the RIGHT of the bank and not an obligation.
Hence option c is correct

Test: Principles and Practices of Banking - 2 - Question 50

Among the given, which of the following is not the scope of system Audit?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 50

Scope of System Audit is:

  • Review of operations to establish compliance
  • Review of the adequacy of procedures and controls
  • Integrity review focused at fraud detection/prevention of IT system
  • Audit Trail is a chronological record of all events occurring in a system.
  • Hence, option (a) is the correct choice.
Test: Principles and Practices of Banking - 2 - Question 51

Which of the following statements is/are incorrect about Norms-
I. These are internalized standards, which describe what is desirable for all and not just for a selected few.
II. These are informal guidelines for behavior and actions that are considered normal social behavior in a particular group.
III. We continue to learn them even subconsciously and they get imbibed in our personality.
IV. They may arise in an individual out of some of the probable events or certainties of his/her life.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 51

I, III, and IV statements do not talk about "norms". Statements I and III describe "values" which are internalized as core beliefs in an individual and are concepts of desirable behavior for all and we continue to learn them right from our childhood. Similarly, Statement IV talks about "beliefs" which are true by a person and may get instilled due to some probable events or consequences, etc. of one's life.

Test: Principles and Practices of Banking - 2 - Question 52

Which among the following is true about the financial assistance provided by banks to help their employees in purchasing shares of their bank?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 52

"The banks cannot extend finance to its employees to purchase shares of their bank", is true about the financial assistance provided by banks to help their employees in purchasing shares of their bank.

Test: Principles and Practices of Banking - 2 - 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. Which of the following details are mentioned by the banks in the list of Inoperative accounts/Unclaimed deposits on the bank's website?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 53

As a general measure, the banks are required to display on their respective websites the list of accounts that are inactive or inoperative for more than 10 years and the list must contain only the name of the account holder and their address, no other details should be included in the list.

Test: Principles and Practices of Banking - 2 - 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. Should interest credited to an SB account from a TD account be considered a customer-induced transaction?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 54

If a customer has been given a mandate for crediting the interest on TDs to the SB account, then such transactions should be created as customer-induced transactions.

Test: Principles and Practices of Banking - 2 - Question 55

Which of the following cannot be used by an individual to get a loan from a bank?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 55

An individual can get a loan against convertible debentures, convertible bonds, units of equity-oriented mutual funds, and shares but the amount of such loan should not exceed Rs. 10 lakhs if the shares are in physical form and not exceed Rs. 20 lakhs if the shares are in demat form.

Test: Principles and Practices of Banking - 2 - Question 56

SARFASEI Act stands for _____.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 56

SARFASEI Act stands for Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002.

Test: Principles and Practices of Banking - 2 - 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. Which of the following is not a valid purpose for establishing a business about extending credit to the business?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 57

"Start a business by inducing due to the success of other persons", is not a valid purpose for establishing a business about extending credit to the business.

Test: Principles and Practices of Banking - 2 - 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 information must be verified by the bank before extending credit to a company?
I. Verifying the Certificate of Incorporation and the Memorandum of Articles of the company
II. Visiting the factory or office of the applicant
III. Verifying the Financial statements of the company
IV. The resolution passed by the BOD to avail credit

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 58

The respective bank should collect and assess all the above-mentioned information about the company before extending any credit to minimize the credit risk.

Test: Principles and Practices of Banking - 2 - Question 59

EASE stands for __________ and aims at _____________.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 59

EASE stands for the Enhanced Access and Service Excellence and aims at aims at automation and digitisation of banking services in public sector banks.

Test: Principles and Practices of Banking - 2 - Question 60

The Digital India flagship program of the Government of India aims to turn India into a digitally empowered society by _____.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 60

Digital India, the GOI's flagship program, aims to turn India into a digitally empowered society and knowledge-based economy by the year 2030.

Test: Principles and Practices of Banking - 2 - Question 61

Which among the following types of damage involves damage to the banking industry from individuals with mala fide intentions who wish to disrupt the services for financial gains?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 61

Malicious damage refers to intentional damages by disgruntled employees or individuals for financial gain. For example- Fraud.

Test: Principles and Practices of Banking - 2 - Question 62

Which among the following facilities is offered for the visually impaired at an ATM/branch of a bank?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 62

Talking ATMs with Braille keypads should be provided for the visually impaired.

Test: Principles and Practices of Banking - 2 - Question 63

Which of the following is not associated with Electronic Banking?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 63

Bank Teller is an employee of a bank whose responsibilities include the handling of customer cash and negotiable instruments in the traditional, brick-and-mortar form of banking.

Test: Principles and Practices of Banking - 2 - Question 64

Identifying the organization's core values is important because:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 64

The core values of an organization describe what it stands for and a company can survive in this competitive world only by determining its core values and implementing them within all its decisions.

Test: Principles and Practices of Banking - 2 - Question 65

Under Bill finance, a usance bill is also called:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 65

Usance bills are also called, "Bills payable after sight" as under this, the drawer draws a BOE and specifies the time within which the payment shall be made.

Test: Principles and Practices of Banking - 2 - Question 66

The banks manage and mitigate money laundering risks through the following approaches, except this:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 66

The introduction of new technological products like smart cards, net banking, etc. post new money laundering risks for the banks and the banks should have appropriate KYC procedures before introducing such types of products to manage the risks involved.

Test: Principles and Practices of Banking - 2 - Question 67

Who should sign the Power of Attorney if the account is jointly held by 2 or more persons?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 67

In the case of a joint account, all the joint account holders must sign the Power of Attorney to empower the third party to operate the account.

Test: Principles and Practices of Banking - 2 - 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.

Q. Who is the beneficiary in the case of a bank guarantee?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 68

The beneficiary is the creditor i.e., who will get the money in case of default.

Test: Principles and Practices of Banking - 2 - 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. How is the liability of the two co-sureties distributed in the absence of any contract in a contract of guarantee?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 69

Where two or more persons are co-sureties for the same debt, the co-sureties, in the absence of any contract to the contrary, are liable, as between themselves, to pay each an equal share of the whole debt, or of that part of it which remains unpaid by the principal debtor.

Test: Principles and Practices of Banking - 2 - Question 70

Which of the following banks helps in Initial Public Offering (IPO)?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 70

Merchant banks also known as Investment banks are financial intermediaries which help a corporate in the transfer of capital like IPO, FPO, etc.

Test: Principles and Practices of Banking - 2 - Question 71

What is the composition of the Central Information Commission under the Right to Information Act, of 2005?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 71

The Central Information Commission shall consist of (a) the Chief Information Commissioner; (b) Central Information Commissioners not exceeding ten. They are appointed by the President on the recommendation of a committee.

Test: Principles and Practices of Banking - 2 - Question 72

The Positive Pay System is most closely associated with which of the RBI's measures of the betterment of the Banking Industry?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 72

The Positive Pay System is introduced as a measure under the Cheque Truncation System (CTC) in which the key details of cheques of Rs 5,00,000 or above are cross-checked or confirmed electronically to deter cheque fraud.

Test: Principles and Practices of Banking - 2 - Question 73

What was the core objective of RBI behind the formation of the National Payments Corporation of India (NPCI)?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 73

The core objective was to consolidate and integrate the multiple systems with varying service levels into a nationwide uniform and standard business process for all retail payments systems.

Test: Principles and Practices of Banking - 2 - Question 74

What happens if the individuals requesting Personal loans from the bank do not have any collateral security?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 74

In case of non-availability of collateral security, banks may ask for a third-party guarantee.

Test: Principles and Practices of Banking - 2 - 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. Read the following statements regarding the Consumer Protection Act-
I. The Consumer Mediation Cells are attached to Redressal Commissions and Regional Benches and extend lawyer services to the consumers to resolve disputes in the relevant Courts.
II. Under this act, the Director General has the authority to enter at any reasonable time into such premises and search for and seize any document or article or any such evidence.

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 75

Statement I is false and the correct statement is - The Consumer Mediation Cells try to get the disputes settled through mediation without entering the court of law.

Test: Principles and Practices of Banking - 2 - 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. Which of the following forums is not a part of the Consumer Protection Act?

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 76

There is only one Consumer Protection Authority i.e. at the central level- Central Consumer Protection Authority to regulate matters relating to the violation of consumers’ rights.

Test: Principles and Practices of Banking - 2 - Question 77

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 District Consumer Redressal Commission:

Detailed Solution for Test: Principles and Practices of Banking - 2 - Question 77

The District Consumer Redressal Commission entertains complaints where the value of goods or services does not exceed Rs 50 lakhs and the District Consumer Redressal Commission must have a President and at least 2 members consulted by the Central Government out of which at least one member or President must be a woman.

Test: Principles and Practices of Banking - 2 - Question 78

The provisioning coverage ratio indicates: