LEGAL AND REGULATORY ASPECTS OF BANKING SOLVED PAPER
1. When the LC Specifies the Bank that is to negotiate the bills drawn under the LC, then the bank is also called ...................................
a. Confirming Bank
b. Reimbursing Bank
c. Nominated Bank
d. None of the above
Answer : C
2. Acceptance of Deposits by Non-Banking financial bodies and companies is regulated by which of the following ?
a. SEBI & RBI
b. RBI & Govt
c. ROC & SEBI
d. Stock Exchange & SEBI
Answer : B
3. A company has to obtain a.................. from the reserve bank to commence banking business in terms of Section 22 of BR Act.
a. Registration
b. License
c. Commencement Certificate
d. None of the above
Answer : B
4. Every Public Company or a Private Company which is a subsidiary of a public company , having a paid -up share capital of Rupees ...............must have a managing or whole time director or a manager .
a. 1 Crore
b. 5 Crores
c. 1 Lakh
d. 5 Lakhs
Answer : B
5. Central Government can give directions to RBI in public interest after consulting ..............
a. Central Bank of RBI
b. RBI Governor
c. President of India
d. Finance Secretary
Answer : B
6. In which of the following areas, RBI can't issue directions to bank ?
a. Interest rate on deposit
b. Interest rate on advances
c. Margin on Bank Loans
d. None of the above
Answer: D
7. Max penalty for damage to computers or computer systems can be .......................
a. 5 Lakhs
b. 50 Lakhs
c. 1 Crore
d. 10 Crores
Answer : C
8. When the confirming bank confirm the credit it .........
a. does not take any liability
b. undertakes on its part the liability under the LC
c. undertakes to make timely of the documents and bills to the buyer or his bank
d. None of the above
Answer : B
9. Shifting of a bank's branch in the ..............does not require Reserve Bank's permission under Section 23 .
a. same district
b. same state
c. same city , town or village
d. None of the above
Answer : C
10. Reimbursing Bank is the bank ...............................
a. that reimburses the seller
b. that reimburses the negotiating / Paying or Confirming Bank
c. that reimburse the buyer on the goods being found defective
d. None of above
Answer : B
11. Agreement can be ...........
a. Oral
b. Written
c. Either a or b
d. None of these
Answer : C
12. Banking companies are not permitted to give dividend until all..............are written off.
a. bad debts
b. expenses
c. capitalised expenses
d. None of the above
Answer : C
13. A director of a banking company should not have ......................in any other company .
a. any interest
b. substantial interest
c. beneficial interest
d. None of the above
Answer : B
14. Foreign banks are required under Section 11 of the BR Act to deposit .........arising out of their business in India with the Reserve Bank .
a. 20% of Profit each year
b. 30% of Profit each year
c. 20% of the deposits collected each year
d. None of the above
Answer : C
15. Shareholders of Banking Companies can exercise voting rights up to ........ of the total voting rights of all shareholders .
a. 1%
b. 10%
c. 20%
d. 100%
Answer : B
16. At least ............ of the directors should have the qualification prescribed under Section 10A(2) of the BR Act .
a. 50%
b. 75%
c. 51%
d. 25%
Answer : C
17. A contract without ............... is void .
a. Indemnity
b.Guarantee
c. Consideration
d. Cash
Answer : C
18. A person who is indemnified can recover ............. for claiming the damages .
a. Damages
b. Costs
c. Both a and b
d. None of these
Answer : C
19. Who can retain goods bailed to them as security for a general balance of a/c ....
a. Bankers
b. Factors
c. Policy Brokers
d. All of them
Answer : D
20. A person who makes a proposal known as...........
a. Promisor
b. Principal Debtor
c. Surety
d. Guarantor
Answer : Promisor
a. Confirming Bank
b. Reimbursing Bank
c. Nominated Bank
d. None of the above
Answer : C
2. Acceptance of Deposits by Non-Banking financial bodies and companies is regulated by which of the following ?
a. SEBI & RBI
b. RBI & Govt
c. ROC & SEBI
d. Stock Exchange & SEBI
Answer : B
3. A company has to obtain a.................. from the reserve bank to commence banking business in terms of Section 22 of BR Act.
a. Registration
b. License
c. Commencement Certificate
d. None of the above
Answer : B
4. Every Public Company or a Private Company which is a subsidiary of a public company , having a paid -up share capital of Rupees ...............must have a managing or whole time director or a manager .
a. 1 Crore
b. 5 Crores
c. 1 Lakh
d. 5 Lakhs
Answer : B
5. Central Government can give directions to RBI in public interest after consulting ..............
a. Central Bank of RBI
b. RBI Governor
c. President of India
d. Finance Secretary
Answer : B
6. In which of the following areas, RBI can't issue directions to bank ?
a. Interest rate on deposit
b. Interest rate on advances
c. Margin on Bank Loans
d. None of the above
Answer: D
7. Max penalty for damage to computers or computer systems can be .......................
a. 5 Lakhs
b. 50 Lakhs
c. 1 Crore
d. 10 Crores
Answer : C
8. When the confirming bank confirm the credit it .........
a. does not take any liability
b. undertakes on its part the liability under the LC
c. undertakes to make timely of the documents and bills to the buyer or his bank
d. None of the above
Answer : B
9. Shifting of a bank's branch in the ..............does not require Reserve Bank's permission under Section 23 .
a. same district
b. same state
c. same city , town or village
d. None of the above
Answer : C
10. Reimbursing Bank is the bank ...............................
a. that reimburses the seller
b. that reimburses the negotiating / Paying or Confirming Bank
c. that reimburse the buyer on the goods being found defective
d. None of above
Answer : B
11. Agreement can be ...........
a. Oral
b. Written
c. Either a or b
d. None of these
Answer : C
12. Banking companies are not permitted to give dividend until all..............are written off.
a. bad debts
b. expenses
c. capitalised expenses
d. None of the above
Answer : C
13. A director of a banking company should not have ......................in any other company .
a. any interest
b. substantial interest
c. beneficial interest
d. None of the above
Answer : B
14. Foreign banks are required under Section 11 of the BR Act to deposit .........arising out of their business in India with the Reserve Bank .
a. 20% of Profit each year
b. 30% of Profit each year
c. 20% of the deposits collected each year
d. None of the above
Answer : C
15. Shareholders of Banking Companies can exercise voting rights up to ........ of the total voting rights of all shareholders .
a. 1%
b. 10%
c. 20%
d. 100%
Answer : B
16. At least ............ of the directors should have the qualification prescribed under Section 10A(2) of the BR Act .
a. 50%
b. 75%
c. 51%
d. 25%
Answer : C
17. A contract without ............... is void .
a. Indemnity
b.Guarantee
c. Consideration
d. Cash
Answer : C
18. A person who is indemnified can recover ............. for claiming the damages .
a. Damages
b. Costs
c. Both a and b
d. None of these
Answer : C
19. Who can retain goods bailed to them as security for a general balance of a/c ....
a. Bankers
b. Factors
c. Policy Brokers
d. All of them
Answer : D
20. A person who makes a proposal known as...........
a. Promisor
b. Principal Debtor
c. Surety
d. Guarantor
Answer : Promisor