Bank Promotion Exam Practice Tests Set 9

Ideally for calculating MPBF Current Ratio should be


Options are :

  • 1.33: 1
  • 1.25:1
  • 1:1.33
  • 1:1.25

Answer :1.33: 1

DSCR  =


Options are :

  • ( Net profit –Depcn- Annual amount of int.on LTLs)/Interest + principal
  • ( Net profit +Depcn+ Annual amount of int.on LTLs)/Interest -principal
  • ( Net profit +Depcn+ Annual amount of int.on LTLs)/Interest + principal
  • ( Net profit -Depcn+ Annual amount of int.on LTLs)/Interest + principal

Answer :( Net profit +Depcn+ Annual amount of int.on LTLs)/Interest + principal

The following is the quote of a bank in India  1USD= Rs 39.40.This method of quotation is-


Options are :

  • home currency quotation
  • direct quotation
  • foreign currency quotation
  • indirect quotation
  • 1 and 2
  • 3 and 4

Answer :1 and 2

Bank of India is having an account with Citi Bank New York. Central bank of India likes to refer this account while corresponding with Citi bank New York. it will refer this account as-


Options are :

  • Nostro account
  • Vostro account
  • Loro account
  • Demat account

Answer :Loro account

which of the following is not a market risk


Options are :

  • commodity risk
  • process risk
  • forex risk
  • liquidity risk

Answer :process risk

In the event of proceeds of cheque under collection was to be credited to OD Loan account of the customer, the interest on delayed collection will be


Options are :

  • SB rate
  • Time deposit rate for the number days delay
  • BPLR
  • bank rate
  • interest rate applicable to OD loan account

Answer :interest rate applicable to OD loan account

Bank Promotion Exam Practice Tests Set 1

Factoring involves


Options are :

  • services related to collection and accounting of receivables/sales
  • services related to project management
  • financial derivatives
  • debt instruments

Answer :services related to collection and accounting of receivables/sales

Current Ratio denotes


Options are :

  • productivity
  • solvency
  • liquidity
  • all of these

Answer :liquidity

What are the symptoms of liquidity risk


Options are :

  • Offering higher rate of interest on deposits
  • Delayed payment of matured proceeds
  • Delayed disbursement to borrowers against committed lines of credit
  • Deteriorating asset quality
  • All of the above

Answer :All of the above

Bank Promotion Exam Practice Tests Set 10

If  outstanding housing loan balance is Rs  25 lakhs and excluding  interest and other charges of Rs 5 lakhs  and the realisable value of security is 40 lakhs, the LTV ratio is


Options are :

  • 62.5%
  • 50%
  • 75%
  • data is insufficient

Answer :75%

Which of the following Factors does not Reduce Liquidity Risk?


Options are :

  • Availability of Refinance
  • LAF Facility
  • Open Market Operations
  • CBLO
  • Issue of IPO

Answer :Issue of IPO

LTV ratio in housing loan is used for –


Options are :

  • liquidity
  • assigning risk weight
  • sanctioning loan
  • none of these

Answer :assigning risk weight

Bank Promotion Exam Practice Tests Set 11

which of the following is not used to measure interest rate risk(IRR)-


Options are :

  • Maturity gap analysis : (to measure the interest rate sensitivity of earnings)
  • Duration : (to measure the interest rate sensitivity of capital)
  • Simulation
  • DSCR
  • Value at Risk

Answer :DSCR

As per fair practice code for lenders, copy of loan agreement and related documents to be given to-


Options are :

  • borrower on request in writing
  • guarantor on request in writing
  • both 1and 2
  • to borrower and guarantor even without request

Answer :to borrower and guarantor even without request

Form A1 is used for 


Options are :

  • Imports
  • Other than imports
  • Statement to RBI for transactions in NRI account
  • Transactions in FCNR account

Answer :Imports

Bank Promotion Exam Practice Tests Set 12

A is having a locker and sends the key by post with an intention to surrender the locker-


Options are :

  • Bank will be discharged of its liability, if key is accompanied by a letter stating the contents of the lockers as NIL
  • The bank will not be discharged of its liability
  • The bank should not accept
  • Bank can accept subject to its rights under reserve

Answer :Bank will be discharged of its liability, if key is accompanied by a letter stating the contents of the lockers as NIL

Your branch is not dealing in foreign exchange. One of your customers submitted a foreign bill for collection. You send this bill to the nearest branch dealing in foreign exchange for realisation. Both the branches pass contra entries for the notional amount of  bill. On closing day


Options are :

  • Your branch will reverse the contra entry
  • The branch dealing in foreign exchange will reverse the contra entry
  • both the branches will reverse the contra
  • both the branches will not reverse the contra

Answer :The branch dealing in foreign exchange will reverse the contra entry

A and B maintain an FD account with a locker and want to make single nomination for both the accounts:  


Options are :

  • Nomination can be made in both the accounts separately
  • Nomination cannot be allowed in lockers in joint names
  • It will depend on bank’s discretion
  • Nomination can be accepted

Answer :Nomination can be made in both the accounts separately

Bank Promotion Exam Practice Tests Set 13

A,B AND C are having a current account operated jointly by all of them .A stop payment instruction is issued by  C only and the cheque is presented in clearing. You will


Options are :

  • Return the cheque with reason payment stopped by drawer
  • Return the cheque with reason payment reportedly stopped by drawer and confirmation awaited
  • The cheque can be passed if otherwise in order as it was not given by all three jointly
  • Seek instructions from controlling office

Answer :Return the cheque with reason payment stopped by drawer

You receive a garnishee order for a current account maintained in your branch. A cheque is received for payment. What memo should be appended while returning the cheque:  


Options are :

  • Garnishee order received
  • Refer to drawer. Garnishee order received
  • Insufficiency of funds due to garnishee order
  • a and b
  • a to c

Answer :Garnishee order received

Who among the following will sign the account opening form for opening a current account in case of a partnership firm where the firm has three partners and a minor, aged 17, has been admitted to the firm for benefits?  


Options are :

  • all the three and the father of the minor
  • all the three and natural guardian of the minor
  • all the three and the minor himself
  • all the three partners only

Answer :all the three partners only

Bank Promotion Exam Practice Tests Set 14

The maximum number of members in a SHG( self help Group)


Options are :

  • 10
  • 20
  • 15
  • No such stipulation

Answer :20

In a Cash Credit Account the limit is Rs.2,00,000/- and the Stock Statement shows the Value of Stocks is Rs. 3,00,000/- out of which Rs.1,00,000/- is obtained on credit. If the margin is 25% the Value of Drawing Power will be


Options are :

  • 1,95,000/-
  • 2,25,000/-
  • 1,50,000/-
  • 2,00,000/-

Answer :1,50,000/-

A customer has a saving bank account and her husband had withdrawn the money from the bank on the basis of forged cheques at various occasions but the customer did not object to it. After his death, she comes to bank and demands the money: 


Options are :

  • Bank would refer the matter to the court
  • Bank is liable on forged cheques
  • The bank is negligent but not liable, as the customer is party to the forgery and did not inform the bank in time
  • loss shall be borne in the ratio of 50:50 by the bank and the customer

Answer :Bank is liable on forged cheques

Bank Promotion Exam Practice Tests Set 15

B is payee of a cheque, who endorses it to C. C lost the cheque which is found by D, who endorses it in favour of A for valuable consideration by way of forging C’ signatures. The cheque is dishonoured. A can recover from:  


Options are :

  • B
  • C
  • D
  • any of the previous parties

Answer :D

Restriction on access to a computer system by the unauthorized person is through


Options are :

  • Net working
  • firewall technology
  • virus technology
  • All the above

Answer :firewall technology

Repayment capacity in case of term loan proposals is judged by the banks with which of the following ratios : 


Options are :

  • debt equity ratio
  • internal rate of return
  • net present value
  • break even analysis
  • debt service coverage ratio

Answer :debt service coverage ratio

Bank Promotion Exam Practice Tests Set 16

Find the total current liabilities of a firm from the following given items 

Stock of Raw materials – Rs20.00lac, Sundry Creditors- Rs10.00lac, Finished    goods- Rs30.00lac, Advance payment of tax-Rs2.00lac, Outstanding in Cash Credit account-Rs5.00lac, Debtors- Rs4.00lac, Stock-in process- Rs1.00lac 


Options are :

  • Rs 25.00lac
  • Rs 15.00lac
  • Rs 12.00lac
  • Rs 35.00lac
  • Rs 30.00lac

Answer :Rs 15.00lac

“ICCOMS’ IS RELATED TO


Options are :

  • merchant banking
  • stock market
  • commodities future market
  • currency chest operations

Answer :currency chest operations

The rate of depreciation on computers is------% and the method adopted is


Options are :

  • 33.33%,written down method
  • 33.33%,straight line method
  • 20%, written down method
  • 20%, straight line method

Answer :33.33%,straight line method

Bank Promotion Exam Practice Tests Set 17

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