MODEL QUESTIONS --- JAIIB principles

1)    When a cheque is drawn on a bank, the bank is called the
a)Payee
b)Drawee
c)Drawer
d)Endorsee                                                                                             (b)
2)    One of the State Government  avails of a  temporary financial       
assistance  from Reserve Bank of India. This type of finance
is called :
     a)Overdraft
     b)Temporary loan
     c)Short term finance
     d) Ways and Means advance                                                   (d)

3)    Maximum Bank Rate is:
a) 6%
b) 20%
c) 25%
d) None                                                                                                    (a)

4)    Obligation of a Banker to maintain secrecy is applicable to
a) Only in case of existing deposit accounts
b) Only in respect existing loan accounts
c) Only in case of closed accounts
d) All types of deposit/loan accounts (existing/closed)                   (d)  

5)    Bank A allows one of its clients to withdraw against
     clearing of a cheque. The banker is called as:
     a) Collecting and Paying banker
     b) Holder in due course
     c) Holder for value
     d) Reimbursement banker                                                            (c)

6)    As per the provisions of NI Act,1881 a banker gets protection
     for payment of a cheque only if it is a :
     a)  Holder in due course
     b)  Payment in due course
     c)  Holder for value
     d)  All of the above                                                                                  (b)
7) At a Railway station, you withdraw cash from ATM of State Bank of India. SBI is a :
a) Paying Banker
b) Collecting Banker
c) Advising Banker
d) Issuing Banker                                                                                  (a)

8) Management of a Bank vests with
 a) Reserve Bank of India
 b) Asset Liability Committee (ALCO)
 c) Board of Directors
 d) None of  the above                                                                           (c)

9)    Hari issues a stop payment instructions to his banker to
Stop payment of a cheque for Rs,20,000.00. This is
      a) A request from Hari
      b) An intimation from Hari
      c) An advice from Hari
      d) A mandate from Hari                                                             (d)
10) Except one of the following instruments others are issued
at discount. Identify the exception:
a)    A Certificate of Deposit (CD)
b)    A Treasury Bill (TBill)
c)    A  Commercial Paper (CP)
d)    A Fixed Deposit (FD)                                                                       (d)


11) Cash Reserve Ratio (CRR) is to be maintained on Net
Demand and Time Liabailities (NDTL).SLR is to be
maintained on:
a)    Total Demand and Time Liabilities
b)    Net Demand and Time Liabilities
c)    Total Demand and Time Assets
d)    Net Demand and Time Assets                                              (b)
12) Garnishee order is issued by:
a)    Judgement Debtor
b)    Judgement Creditor
c)    Judgement Debtor’s Debtor
d)    None of the above                                                                        (d)
13) CAMEL model is used by
a)    Bankers to evaluated a credit proposal
b)    Bankers to manage their risks
c)    RBI inspectors to evaluate banks functions
d)    Merchant Bankers to evaluate portfolio investment             (c)
14) One of your NRI customers wants to place FCNR
deposits in Canadian $ with your bank. You will
a)    Accept his request and open a FCNR a/c
b)    Will not accept his request to open FCNR a/c in
Canadian $
c)    Will inform the customer to place FCNR in any
one of the currencies (US$/GBP/JPY/EUR)
    d)   Both b and c                                                                                (a)
     15) Which one of the Non Resident Deposit schemes
           is not permitted.
a)    FCNR  a/cs
b)    NRNR a/cs
c)    NRE a/cs
d)    NRO a/cs                                                                                     (b)


16)At the time of receipt of a garnishee order your customer’s
     accounts showed :
      i)SB a/c uncleared balance Rs.2,000.35 (Cleared balance Rs
       550.35)
     ii) An overdue fixed deposit  for Rs.25,753.22 matured one week earlier
    iii)OD account showed a credit balance of Rs.8,728.96
    iv)CC account showed a credit balance of Rs,2,247.18
         Indicate the amount which can be attached by the garnishee order?
a)    Rs.28,550.75
b)    Rs.10,228.96
c)    Rs.37,729.71
d)    Rs   4,247.53                                                                          (c)
17)You receive a cheque in an overdraft account for Rs.27,000.00.
The debit balance in the account is Rs.30,000.00 and the OD
limit is Rs 55,000.00.What reason you will state while returning
a)    Refer to drawer
b)    Effects Not cleared
c)    Exceeds arrangement
   d)  Endorsement not correct                                                            (b)
  18) Match the following:
        i) Payment in Due Course                A)  Insurance
       ii) Karta                                                   B)  Cash Credit
      iii) IRDA                                                   C)  HUF
       iv) Hypothecation of Inventory        D)  Paying Banker
a)    i-D,ii-C,iii-A,iv-B
b)    i-A,ii-B,iii-C,iv-D
c)    i-B,ii-A,iii-D,iv-C
d)    i-D,ii-C,iii-B,iv-A                                                                                    (a)





 19) Match the following:
    Identify the Committees:
       i)Classification of  Assets                 A) Nayak
      ii)Computerisation in Banks           B) Tarapore
     iii)Working Capital for SSIs              C) Narasimham
     iv)Capital Account Convertability    D) Rangarajan
a)    i-B,ii-D,iii-C,iv-A
b)    i-D,ii-C,iii-A,iv-B
c)    i-B,ii-A,iii-C,iv-D
d)    i-C,ii-D,iii-A,iv-B                                                                  (d)
20) Match the following:
      i)Financial intermediaries              A) Mutual funds
     ii)ATMs                                             B) E- Banking
    iii)Certificate of Deposits                 C) Money Markets
     iv)Book debts                                        D)Assignment
a)    i-C,ii-D,iii-A,iv-B
b)    i-D,ii-C,iii-B,iv-A
c)    i-A,ii-B,iii-C,iv-D
d)    i-A,ii-C,iii-B,iv-D                                                                  (c)   
21) RTGS stands for :
     a)Real Time Settlement System
     b)Real Time Gross Settlement System
     c)Real Gross Settlement System
     d)None of the above                                                                 (b)
22) The banker acts as a Bailee and the customer as Bailor,
this relationship is applicable:
    a)when a bank lends funds to a corporate customer
    b)when a bank accepts US$ FCNR  deposits form a NRI customer
    c)when a customer operates a safe deposit locker
    d)when a customer keeps articles in safe custody with a bank (d)


 23)One of your customers lost the Fixed Deposit Receipt issued
     by the bank. To obtain a duplicate FD  he needs to furnish
     a)A Promissory note
     b)A Guarantee
     c)A Letter of Credit
     d)An Indemnity bond                                                              (d)
24) In a demand draft the word “order” is changed to “bearer”
      by the holder of the dd. It is called as:
     a)Endorsement
     b)Material alteration
     c)Crossing
     d)None of  the above                                                                 (b)     
25) Capital adequacy is worked out based on:
     a) Total demand and time liabilities
     b) Net demand and time assets
     c) Risk weighted assets
     d) Risk weighted liabilities                                                  (c)
26) One of your customers dies without leaving a will and
      The court appoints a person to handle the customer’s
      Property. Such a person is called as
       a)An administrator
       b)An executor
       c)A liquidator
       d)A successor                                                               (a)
27)A negotiable instrument is endorsed as Pay to Raju only
     This is called as:
     a)Blank endorsement
     b)Restrictive endorsement
     c)Sans recourse endorsement
     d) Endorsement in Full                                                            (b)