CAIIB 2020 Retail Banking Mock Tests Set 14

Banks now need to use retail as a growth trigger. This requires -

I) product development and differentiation

II) innovation and business process re-engineering

III) prudent pricing

IV) technological upgradation


Options are :

  • Only I,II
  • Only I,II,IV
  • Only I,II,III
  • All of the above

Answer :All of the above

CAIIB 2020 Retail Banking Mock Tests Set 15

A bank product can be defined as -


Options are :

  • Anything that has the capacity to provide the satisfaction, use and return desired by the customer
  • Anything that has the capacity to provide the satisfaction and available at reasonable price.
  • Anything that has is available at reasonable price and return desired by the customer.
  • None of the above

Answer :Anything that has the capacity to provide the satisfaction, use and return desired by the customer

Which of the following is correct Bank Product Life Cycle?


Options are :

  • Product Introduction -> Growth -> Maturity -> Decline
  • Product Introduction -> Maturity -> Growth -> Decline
  • Product Introduction -> Pricing -> Growth -> Maturity -> Decline
  • Product Introduction -> Growth -> Pricing -> Maturity -> Decline

Answer :Product Introduction -> Growth -> Maturity -> Decline

When a product is introduced the sales volume is generally _____ and revenue from the products __________ to cover the cost of producing, marketing and servicing it.


Options are :

  • high, will not be sufficient
  • low, will not be sufficient
  • low, will be sufficient
  • None of the above

Answer :low, will not be sufficient

CAIIB 2020 Bank Financial Management Mock Tests Set 1

In which stage of product life cycle, sales volume is at its peak?


Options are :

  • Product Introduction
  • Growth
  • Maturity
  • Decline

Answer :Maturity

In which stage of product life cycle, the business and profits stagnate, and customer develop a tendency of indifference to the product.


Options are :

  • Product Introduction
  • Growth
  • Maturity
  • Decline

Answer :Decline

With respect to product life cycle , Banks should aim for keeping the product in the ________ stage as long as possible, so that business and profit maximization happens continuously.


Options are :

  • Product Introduction
  • Growth
  • Maturity
  • Decline

Answer :Maturity

CAIIB 2020 Bank Financial Management Mock Tests Set 10

In the banking scenario, some of the core products are -

I) Savings Bank A/c        II) Current Account A/c         III) Term Deposit A/c        IV) Retail Loans.


Options are :

  • Only I,II
  • Only I,II,IV
  • Only I,II,III
  • All of the above

Answer :All of the above

________  will have a stable life in the growth stage of product life cycle, because they are indispensable for the different segments of customers.


Options are :

  • Core Products
  • Secondary Products
  • Tertiary Products
  • Augmented Products.

Answer :Core Products

[CASE STUDY –Education Loan Eligibility] Mr. Joshi has availed one education loan of ?5 lakh for the studies of his elder daughter. The loan is running standard from last 2 years.Mr. Joshi is also depositing interest monthly into the loan account. Now, Mr. Joshi is in need of another education loan of ?5 lakh for his younger son, who recently got admission to IIT Delhi. He approached the bank, but credit officer denied the loan application with the argument that two children from same family cannot avail education loan simultaneously. 


Options are :

  • The credit officer is correct. As per RBI, due to risk measures RBI has limited the education loan to one per family.
  • The credit officer is correct. As per RBI, due to risk measures RBI has limited the education loan to one per family. However, the loan can be sanctioned if previous EL in the name of elder sister is closed.
  • The credit officer is correct. As per RBI, due to risk measures RBI has limited the education loan to one per family. However, Mr. Joshi can apply for Education loan in cooperative bank.
  • The credit officer in not correct. Existence of an earlier educational loan to the brother(s) and/or sister(s) will not affect the eligibility of another student from the same family.

Answer :The credit officer in not correct. Existence of an earlier educational loan to the brother(s) and/or sister(s) will not affect the eligibility of another student from the same family.

CAIIB 2020 Bank Financial Management Mock Tests Set 11

What information does a bank require to provide a person when he / she applies for a credit card?


Options are :

  • The bank is required to explain the relevant terms and conditions such as fees, charges and applicable interest rates, billing and payment, method of computation of overdues, renewal and termination procedures, and any other information that may be required to operate the card.
  • The bank is required to give a copy of the Most Important Terms and Conditions (MITC).
  • Only A
  • Both A and B

Answer :Both A and B

[CASE STUDY] Mrs. Jaylakshmi, opened an account with Salem City Coperative Bank. After few days she received a Credit Card (for which she didn't applied) . She approached the bank and asked for cancellation of Card as she doesn't require one. Counter clerk assured Mrs. Rajlakshmi that CC is in Inactive state and if she later feels requirement she can activate this anytime. After 6 months she received the Credit Card bill amounting ?1500. On inquiry counter clerk said its the annual maintainence charges of the CC. Mrs. Jaylaskhmi objected and asked for reversal of charges.


Options are :

  • Annual Maintaince charges can't be reversed after 3 months even if there was no customer's consent. Mrs. Jaylakshmi has to pay the amount outstanding.
  • Bank has to reverse the charges as CC was issued without the consent of Mrs. Jaylakshmi.
  • Bank can negotiate with Mrs. Jaylakshmi and resuade her to pay the negotiated amount.
  • Bank has to reverse the charges less GST amount as CC was issued without the consent of Mrs. Jaylakshmi.

Answer :Bank has to reverse the charges as CC was issued without the consent of Mrs. Jaylakshmi.

How does the bank keep the card-holder informed of the transactions with the credit card issued?


Options are :

  • Banks are required to send the online alerts on all CC transactions
  • Banks also send monthly statement to CC holders.
  • Only B.
  • both A and B.

Answer :both A and B.

CAIIB 2020 Bank Financial Management Mock Tests Set 12

Can a card-holder use his / her credit card to withdraw cash?


Options are :

  • Yes, upto ?5000 per day.
  • Yes, as permitted by bank but interest is charged as soon as the money is withdrawn.
  • No, Cash withdrawals are not permitted w.e.f. February 2020
  • No, Customer has to obtain a debit card for the same.

Answer :Yes, as permitted by bank but interest is charged as soon as the money is withdrawn.

The Credit Card bill / statement received by the card-holder indicates ‘Total Amount Due'. What is that?


Options are :

  • The amount indicated as ‘Total Amount Due' is required to be paid by the ‘payment due' date. In case this is not done, interest will be charged on the outstanding balance and on any new transaction undertaken from the date of the transaction till such time that the past dues are paid in full.
  • In case the ‘Total Amount Due' is paid, the card will remain valid and no late payment fee will be charged. However, interest will be charged on the amount due after the due date for payment. Interest will also be levied on all cash advances from the date of the transaction until the date of payment.
  • The amount indicated as ‘Total Amount Due' is required to be paid by the ‘payment due' date. In case this is not done, interest will be charged on the Principle due.
  • In case the ‘Total Amount Due' is paid, the card will remain valid and no late payment fee will be charged. However, interest will be charged on the amount due after the due date for payment. Excluding Interest on all cash advances from the date of the transaction until the date of payment.

Answer :The amount indicated as ‘Total Amount Due' is required to be paid by the ‘payment due' date. In case this is not done, interest will be charged on the outstanding balance and on any new transaction undertaken from the date of the transaction till such time that the past dues are paid in full.

The Credit Card bill / statement received by the card-holder indicates ‘Minimum Amount Due'. What is that?


Options are :

  • The amount indicated as ‘Minimum Amount Due' is required to be paid by the ‘payment due' date. In case this is not done, interest will be charged on the outstanding balance and on any new transaction undertaken from the date of the transaction till such time that the past dues are paid in full.
  • In case the ‘Minimum Amount Due' is paid, the card will remain valid and no late payment fee will be charged. However, interest will be charged on the amount due after the due date for payment. Interest will also be levied on all cash advances from the date of the transaction until the date of payment.
  • The amount indicated as ‘Minimum Amount Due' is required to be paid by the ‘payment due' date. In case this is not done, interest will be charged on the Principle due.
  • In case the ‘Minimum Amount Due' is paid, the card will remain valid and no late payment fee will be charged. However, interest will be charged on the amount due after the due date for payment. Excluding Interest on all cash advances from the date of the transaction until the date of payment.

Answer :In case the ‘Minimum Amount Due' is paid, the card will remain valid and no late payment fee will be charged. However, interest will be charged on the amount due after the due date for payment. Interest will also be levied on all cash advances from the date of the transaction until the date of payment.

CAIIB 2020 Bank Financial Management Mock Tests Set 13

What is the effect of accepting a One Time Settlement (OTS) on the borrower's credit history?


Options are :

  • There is negative impact on Credit Score in case of OTS.
  • No effect on credit score if borrower goes for OTS.
  • No effect on credit ratings if bank is assured that the reason for default was beyond borrowers control.
  • There is negative effect on credit score, but bank can charge extra fees for not informing the OTS to credit rating agencies.

Answer :There is negative impact on Credit Score in case of OTS.

In case of Credit Cards,  If you pay only the monthly 'minimum due amount', which is generally about 5 percent of the total amount of the bill, to the lender/issuer, you can repay the outstanding amount over a period of time. This process is commonly known as


Options are :

  • revolving credit facility.
  • marginalised credit facility.
  • minimalist credit facility
  • Lest due credit facility.

Answer :revolving credit facility.

__________  are products which are developed from formal products by combining two core products and adding value to the product in terms of benefits and comforts to the customer.


Options are :

  • Core Products
  • Secondary Products
  • Tertiary Products
  • Augmented Products.

Answer :Augmented Products.

CAIIB 2020 Bank Financial Management Mock Tests Set 14

A _______  is the statistical analysis of a person's past credit dealings and represents his or her Credit discipline.


Options are :

  • Credit Score
  • Credit reputation
  • Credit Analysis
  • Credit Assessment

Answer :Credit Score

Reserve Bank of India (RBI) has made it mandatory for all Credit Information Companies (CICs) in the country to give a _________  without any charge, on request, once a calendar year to individuals whose credit history is available. This rule has come into force from 1 January 2017.


Options are :

  • FFCR
  • CIVIL
  • CERSAI
  • VIR

Answer :FFCR

A credit score takes a ‘snapshot' of a consumer's credit report and through advanced analytics turns the information into a ______ representing the amount of risk he brings to a particular transaction.


Options are :

  • 3-digit number
  • 4-digit number
  • 5-digit number
  • 6-digit number

Answer :3-digit number

CAIIB 2020 Bank Financial Management Mock Tests Set 2

Credit score values range from -


Options are :

  • 300 to 600.
  • 300 to 700.
  • 300 to 800.
  • 300 to 900.

Answer :300 to 900.

Using the _________  provided by the bureau, bankers are able to avoid disasters like nonpayment of dues.


Options are :

  • FFCR
  • CIVIL
  • CERSAI
  • CIR

Answer :CIR

Whether a score is good or not will depend on the -


Options are :

  • Bank's internal policy
  • Its customer profile
  • Its risk appetite.
  • All of the above

Answer :All of the above

CAIIB 2020 Bank Financial Management Mock Tests Set 3

Generally , any score over ______  may be considered good by banks.


Options are :

  • 500
  • 700
  • 800
  • 400

Answer :700

In which of the following two cases Credit Score will increase?

I) Mr. A is sanctioned a limit of ?5,00,000 , but he avails only ?50,000 for last one year.

II) Mr. B is sanctioned a limit of ?5,00,000 which he avails fully and requested another ?50,000.


Options are :

  • Only I
  • Only II
  • Both I and II
  • Credit score of both will decrease.

Answer :Only I

Mr. Akash has the habit of unnecessary and frequent shopping for credit and also has too many new accounts. What will happen to the credit of Mr. Akash?


Options are :

  • Increase
  • Decrease
  • Remain same.(No Effect)
  • Cant Say

Answer :Decrease

CAIIB 2020 Bank Financial Management Mock Tests Set 4

Mr. James has 4 overdue accounts to his name, While Mr. George has 2 overdue accounts to his name. Whose credit score will be high?(ignoring other parameters)


Options are :

  • Mr. James
  • Mr. George
  • Both will have equal score, since overdue accounts doesn't add to the credit score.
  • Can't say

Answer :Mr. George

Which of the following are indicators of good score?

I) Evidence of financial discipline.

II) If the borrower has defaulted once or twice due to reasons beyond their control, those would show up as clear aberrations in an overall consistent payment history.

III)The longer the credit history, the better. The lender's assessment presumably improves as he gets bigger spans of repayment. One should be judicious about closing old accounts and opening new ones.


Options are :

  • Only I
  • Only II
  • Only III
  • all of the above

Answer :all of the above

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