Bank Promotion Exam Practice Tests Set 2

Noting and Protesting is not applicable to 


Options are :

  • Promissory Notes
  • Bills of Exchange
  • Cheques
  • Foreign Bills
  • None of these

Answer :Cheques

Bank Promotion Exam Practice Tests Set 20

The basic difference in Pledge and Hypothecation relates to 


Options are :

  • Ownership of stocks
  • Valuation of stocks
  • Possession of stocks
  • Margin requirements
  • Insurance of stocks

Answer :Possession of stocks

What is 'Foreclosure'


Options are :

  • On default by the mortgagor to repay the debt, the mortgagee has a right to get a decree from the court that the mortgagor be debarred forever to redeem the property
  • To recover the loan from the borrower
  • To enforce the mortgage through court of law
  • To stop the borrower to sell the mortgaged properly

Answer :On default by the mortgagor to repay the debt, the mortgagee has a right to get a decree from the court that the mortgagor be debarred forever to redeem the property

When is the remission on stamp duty of bill available


Options are :

  • When the bill represents genuine trade transaction.
  • When the Usance period of bill is not more than three months
  • When the bill is routed through banking channel
  • All the (a) to (c) above
  • None of these.

Answer :All the (a) to (c) above

Bank Promotion Exam Practice Tests Set 1

Stamp Duty on which of the following documents does not vary from state to state


Options are :

  • Mortgage agreements
  • Hypothecation Agreements
  • Guarantee agreements
  • Bills of Exchange
  • None of these

Answer :Bills of Exchange

Which among the following is not found 'In the Memorandum of Association of a Company


Options are :

  • Objects of the company
  • Authorised capital
  • Borrowing powers of Directors
  • Registered Office

Answer :Borrowing powers of Directors

Your Bank comes to know that the security hypothecated for an advance granted to a borrower is being under disposal I sold by the customer. What is the most effective action bank should take?

 


Options are :

  • Get a stay order from the court
  • Report the matter to the police.
  • Convert hypothecation into pledge and take possession
  • Report the matter to Head Office
  • None of these

Answer :Convert hypothecation into pledge and take possession

Bank Promotion Exam Practice Tests Set 10

Stamp duty on a Usance Promissory Note depends on


Options are :

  • Tenor and the amount
  • Only the amount
  • Only the tenor
  • All of the above
  • None of these

Answer :Tenor and the amount

Limitation period is case of pledged goods is


Options are :

  • 3 years from the date of pledge
  • 3 years from the date of documents
  • 5 years from the date of pledge
  • 5 years from the date of documents
  • None of these

Answer :None of these

Which of the following is abinitio void


Options are :

  • Mortgage Deed executed by a Minor
  • Mortgage Deed in favour of a Minor
  • Mortgage of leasehold rights
  • All of these

Answer :Mortgage Deed executed by a Minor

Bank Promotion Exam Practice Tests Set 11

Documents of Title to goods are transferable by


Options are :

  • Endorsement and delivery
  • Delivery
  • Endorsement
  • None of these

Answer :Endorsement and delivery

When companies release their public issues, the word 'underwriter' is mentioned. What does the word 'underwriter' mean


Options are :

  • This is the name of the firm, which prepares draft for advertisements
  • These are bankers of the companies, which sell application papers
  • These are, the brokers/firms or Banks, which guarantee the selling of stocks
  • These are the legal advisers of companies
  • None of these

Answer :These are, the brokers/firms or Banks, which guarantee the selling of stocks

A usance bill is accepted by the attorney of the drawee. Subsequently, the drawee revokes the power of attorney before the bill is due. What will you do in the case?


Options are :

  • Drawee is justified in refusing payment of the bill.
  • It is deemed to be accepted by the drawee and he is liable
  • Recourse could be made only to the attorney
  • No action can be brought against the attorney and the drawee
  • None of these

Answer :It is deemed to be accepted by the drawee and he is liable

Bank Promotion Exam Practice Tests Set 12

MIs Taxamati Rice Mill, Kamal, a partnership firm approaches your branch for sanction of CC ( Hyp) limit of Rs 60 lacs. The loan officer on scrutiny of the balance sheet observes that a Joint Stock Co, is a partner in the firm. He approaches you seeking guidance in the matter as to whether a limited Co can be a partner of a firm. You will guide him as follows


Options are :

  • The account can be opened as a limited company can be a partner of a partnership firm
  • When a company is made a partner, it becomes association
  • Account can be opened after having permission from Registrar of Companies
  • Account should be opened after taking permission from Head Office.
  • None of the above

Answer :The account can be opened as a limited company can be a partner of a partnership firm

M/s Rajwant Tubes, has been sanctioned a CC (Hyp) limit for Rs 50 lacs and Bank Guarantee for Rs 10 lacs. The firm approaches you with the request to issue bank guarantee of Rs 10 lacs in favour of Customs Ceptt., and submits the duly stamped application for opening of bank guarantee and also counter guarantee signed by all the partners in individual capacity and also on behalf of the firm. The counter guarantee is covered under which act


Options are :

  • Indemnity Bond under Stamp Act
  • Indemnity Agreement as per State Stamp Act
  • Undertaking to refund the money in case for making payment
  • Contract to refund the money in case bank has to make the payment.
  • None of the above

Answer :Indemnity Agreement as per State Stamp Act

M/s Impex Pvt Ltd, an exporter having a satisfactory current account approaches you and seeks your guidance about an export order which he has received from USA for export of garments. On scrutiny of the export order, you observe that there is a clause that Letter of Credit will follow in due course. He enquires from you as to which type of LC is safest from the point of view of exporter. You will guide him to ask for


Options are :

  • Red-clause LC
  • Transferable LC.
  • Irrevocable confirmed LC
  • Revocable credit
  • Confirmed LC

Answer :Irrevocable confirmed LC

Bank Promotion Exam Practice Tests Set 13

Return of unclaimed deposits is required to be submitted to RBI under which act:


Options are :

  • Sec 26 of Banking Regulation Act
  • Sec 26 of RBI Act
  • Sec 26 of Indian Contract Act
  • KYC norms.

Answer :Sec 26 of Banking Regulation Act

Your branch has disbursed a term loan to Master Bobby to meet his education expenses, which was guaranteed by his father. The loan account became irregular and despite repeated reminders, Bobby or his father did not regularize the term loan account. The loan officer approaches you for guidance regarding course of action, which the bank can undertake. Which of the following action you will propose to safeguard banks Interest?


Options are :

  • Loan can be recovered from Master Bobby as it was provided for meeting necessities of life. As such bank should proceed against Bobby
  • Loan can be recovered from his father as well as the guarantor as per the option of the bank
  • Loan cannot be recovered from the borrower or the guarantor, as the contract with the minor is void ab-initio
  • The bank should wait till the minor becomes major and thereafter proceed for recovery of loan amount

Answer :Loan cannot be recovered from the borrower or the guarantor, as the contract with the minor is void ab-initio

A Garnishee Order for Rs. 10,000 and income tax attachment order for Rs. 15,000 are received simultaneously in the branch in the account of Mr. Rohit who is having a clean OD limit of Rs.1 lac with debit balance of Rs. 15,000. Which one of them will have preference


Options are :

  • Income Tax Attachment order will have preference as it is for recovery of statutory dual
  • Garnishee order will have preference since it has been issued by the Court.
  • Amount will be shared proportationatly between Garnishee Order and Attachment Order
  • None of these

Answer :None of these

Bank Promotion Exam Practice Tests Set 14

A loan account is due and inspite of repeated reminder the principle debtor  refused to pay. The guarantor was also served the notice and to avoid litigation, he adjusts the loan in full and final. The right of the guarantor to step in the shoes of creditor upon full payment of debt is called the right of 


Options are :

  • Forfeiting
  • Redemption
  • Foreclosure
  • Subrogation

Answer :Subrogation

The responsibility for verification I scrutiny of the documents submitted by the exporter under LC for discrepancy is of:


Options are :

  • Opening Bank
  • Advising Bank
  • Negotiating Bank
  • All of the above

Answer :Negotiating Bank

In loan cases where repayment of the major or large part of a loan is stipulated in a single payment following payment of smaller instalment is referred as


Options are :

  • Equated payment schedule
  • Balloon payment schedule
  • Bullet payment schedule
  • None of the above

Answer :Balloon payment schedule

Bank Promotion Exam Practice Tests Set 15

Zero base budgeting refers to


Options are :

  • Budgeting which has resulted into erosion of capital of the unit
  • Budgeting infusion of fresh capital by way of public issue
  • Budgeting in which figures are developed from scratch every year
  • None of the above

Answer :Budgeting in which figures are developed from scratch every year

In a Letter of Credit backed mechanism, the Advising bank's responsibility is to


Options are :

  • Inform issuing bank as to whom to issue the letter of credit
  • Advise the buyer the dispatch of documents by the seller
  • Inform the beneficiary / seller about the letter of credit
  • None of the above

Answer :Inform the beneficiary / seller about the letter of credit

A notice to acting partner relating to affairs of the firm is treated as the notice to the firm except in the case of :


Options are :

  • Fraud committed by that partner
  • Fraud consented by that partner
  • Fraud committed by the third person
  • Fraud committed by debtors of the firm
  • a and b above both

Answer :a and b above both

Bank Promotion Exam Practice Tests Set 16

Your bank has sanctioned a loan to a non-farmer for construction of Godown for storage for agriculture produce in the urban place. The advance will be classified as :


Options are :

  • Indirect finance to agriculture
  • Direct finance to agriculture
  • Direct finance to SSI
  • Indirect finance to SSI
  • None of the above

Answer :Indirect finance to agriculture

Ram Lal and Sham Lal are two partners in two different partnership firms namely M/s Ram Lal and Sham Lal and the other being M/s Sham Lal and Ram La!. The account of Ram Lal and Sham Lal is showing debit balance and the account of Sham Lal and Ram Lal is showing credit balance. Can the bank exercise the right of set-off in the above two firms:


Options are :

  • Since the partners are the same, the accounts are in the same order and same capacity and bank can exercise the right of set-off.
  • Since the firms are different, the accounts are not in same order and same capacity and as such the bank cannot exercise the right of set-off
  • Since partnership firms are dealing In different products the account are not In same order and same capacity and as such the bank cannot exercise the right of set-off
  • None of the above

Answer :Since the partners are the same, the accounts are in the same order and same capacity and bank can exercise the right of set-off.

Section 17 (2) of the SARFAESI Act 2002, was struck down by Supreme Court in Mardia Chemicals vs. Union Bank of India. The said section contained


Options are :

  • Any borrower aggrieved by the action of secured creditors (bank) can file the appeal but has to deposit 50% of the amount claim with the DRT before the filing the appeal
  • To takeover of the management of the business by the bank
  • Empowering the bank to take possession, sell or lease the secured assets
  • Any borrower aggrieved by the action of secured creditors (bank) can file the appeal but has to deposit 75% of the amount claim with the DRT before filing the appeal

Answer :Any borrower aggrieved by the action of secured creditors (bank) can file the appeal but has to deposit 75% of the amount claim with the DRT before filing the appeal

Bank Promotion Exam Practice Tests Set 17

A hire-purchase transaction implies 


Options are :

  • Contract of bailment
  • Contract of sale
  • Contract of bailment followed by contract of sale
  • None of the above

Answer :Contract of bailment followed by contract of sale

When in Letter of Credit the confirming bank confirms the credit, it


Options are :

  • Does not take any liability
  • Undertakes to make timely delivery of the documents and bills to the buyer or his bank
  • Undertakes to negotiates the documents subject to the condition that the documents are as per the terms and conditions of the LC
  • None of the above

Answer :Undertakes to negotiates the documents subject to the condition that the documents are as per the terms and conditions of the LC

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