CAIIB 2020 Retail Banking Mock Tests Set 3

The annual premium under PMSBY is -


Options are :

  • ?12
  • ?27
  • ? 289
  • ?330

Answer :?12

CAIIB 2020 Retail Banking Mock Tests Set 4

Which of the following is not covered under PMSBY?

I) Death/disability due to Earthquakes

II) Death/disability due to Floods

III) Death/disability due to Suicide

IV) Death/disability due to Murder


Options are :

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

Answer :Only III,IV

In case of PMSBY Is it necessary to report accidents to Police and obtain FIR for claiming benefits under the policy?

I) In case of incidents like Road, Rail and similar vehicular accidents, drowning the accident should be reported to police.

II) In case of incidents like snake bite, fall from tree etc, the cause should be supported by immediate hospital record.

III) In case of suidice or murder forensic experet’s report required.

IV) In case of  drowning no report required.


Options are :

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

Answer :Only I,II

____________ are government securities denominated in grams of gold. They are substitutes for holding physical gold. Investors have to pay the issue price in cash and the bonds will be redeemed in cash on maturity.


Options are :

  • Sovereign Gold Bonds
  • RBI Gold Certificates
  • Govt of India Gold Certificates
  • SEBI Gold Bonds

Answer :Sovereign Gold Bonds

CAIIB 2020 Bank Financial Management Mock Tests Set 1

Which of the following is correct w.r.t the maximum limit for investment in SGB?

I) 4 kg for individuals.

II) 4 kg for Hindu Undivided Family (HUF)

III) 20 kg for trusts

IV) 10 kg for trusts


Options are :

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

Answer :Only I,II,III

How is redemption price calculated in case of SGB?


Options are :

  • On maturity, the Gold Bonds are redeemed in Indian Rupees and the redemption price shall be based on Exponential average of closing price of gold of 999 purity of previous 3 business days from the date of repayment.
  • On maturity, the Gold Bonds are redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 5 business days from the date of repayment
  • On maturity, the Gold Bonds are redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment
  • On maturity, the Gold Bonds are redeemed in Indian Rupees and the redemption price shall be based on Weighted average of closing price of gold of 999 purity of previous 5 business days from the date of repayment.

Answer :On maturity, the Gold Bonds are redeemed in Indian Rupees and the redemption price shall be based on simple average of closing price of gold of 999 purity of previous 3 business days from the date of repayment

Which of the following statements are correct w.r.t Tax implications in SGB?

I) Interest on the Bonds will be taxable as per the provisions of the Income-tax Act, 1961 (43 of 1961).

II) The capital gains tax arising on redemption of SGB to an individual has been exempted. The indexation benefits will be provided to long terms capital gains arising to any person on transfer of bond.

III) TDS is not applicable on the bond.

IV) Deduction is application under section 80C


Options are :

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

Answer :Only I,II,III

CAIIB 2020 Bank Financial Management Mock Tests Set 10

Which of the following statements are correct w.r.t. SGB -

I) The bond can be gifted/transferable to a relative/friend/anybody who fulfills the eligibility criteria

II) SGBs are eligible to be used as collateral for loans from banks, financial Institutions and Non-Banking Financial Companies (NBFC).

III) Nomination facility is available as per the provisions of the Government Securities Act 2006 and Government Securities Regulations, 2007.

IV) The bonds are tradable from a date notified by RBI.


Options are :

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

Answer :All of the above viz. I,II,III,IV

A _________ is a time allowed for the borrowers, during the loan term, when they are not required to make any principal repayment. It is a waiting period before which repayment by way of EMIs begins.


Options are :

  • Holiday period
  • Moratorium period
  • Neither A nor B
  • A or B

Answer :A or B

In case of ________the loan amount with interest is paid in a single payment at the end of the loan period.


Options are :

  • Bullet payment
  • EMI
  • Fixed Payment
  • Drip Payment

Answer :Bullet payment

CAIIB 2020 Bank Financial Management Mock Tests Set 11

In ________  model of repayment, the loan is repaid in full in uniform monthly installments spread over the repayment period.


Options are :

  • Bullet payment
  • EMI
  • Variable instalment
  • Drip Payment

Answer :EMI

In EMI, the _______ component will be less during the initial months and the ______ component will be more.


Options are :

  • principal, interest
  • interest, principal
  • Debt, Asset
  • Asset, Debt

Answer :principal, interest

For a sustainable good relationship, which of the following fundamental requirements are necessary?

I) Credit is used for the intended purpose.

II) The payment of interest and instalments/principal is as per agreed terms.

III) The borrower gives all such information about security/hypothecation and conduct of business from time to time as per requirement.

IV) Neither the bank nor the borrower takes step which will jeopardize the relationship.


Options are :

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

Answer :All of the above viz. I,II,III,IV

CAIIB 2020 Bank Financial Management Mock Tests Set 12

In _________, the customers fail to repay the EMIs due to personal setbacks, job losses, unforeseen medical expenses, etc., in case of borrowers having a steady salary income.


Options are :

  • genuine defaults
  • Willful defaults
  • Malafied Defaults
  • Honest Defaults

Answer :genuine defaults

The term ‘willful default’ can be deemed to have occurred when which of the fooling event occurs?

I) Default in payment/repayment obligations to the lender even when the unit has capacity to honour the obligations.

II) Default in meeting payment/repayment obligations to the lender and has diverted the funds for other purposes not in terms of sanction.

III) Default in meeting its payment/repayment obligations to the lender and has siphoned off the funds and the funds are not available with the unit in the form of other assets.

IV) Defaulted in meeting its payment/repayment obligations to the lender and has also disposed off or removed the movable fixed assets or immovable property given for the purpose of securing a term loan without the knowledge of the bank/lender.


Options are :

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

Answer :All of the above viz. I,II,III,IV

What are some of the Penal Measures against Willful Defaulters -

I) No additional facilities should be granted by any bank/FI to the listed willful defaulters.

II) The legal process, wherever warranted, against the borrowers/guarantors and foreclosure for recovery of dues should be initiated expeditiously.

III) The lenders may initiate criminal proceedings against willful defaulters, wherever necessary.

IV) Wherever possible, the banks and FIs should adopt a proactive approach for a change of management of the willfully defaulting borrower unit.


Options are :

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

Answer :All of the above viz. I,II,III,IV

CAIIB 2020 Bank Financial Management Mock Tests Set 13

The term ________ should be construed to occur if any funds borrowed from banks are utilised for purposes unrelated to the operations of the borrower, to the detriment of the financial health of the  entity or of the lender.


Options are :

  • diversion of funds
  • Siphoning of Funds
  • Both A and B
  • Neither A nor B

Answer :Siphoning of Funds

A retail asset becomes ______  when it ceases to generate income for the bank.


Options are :

  • SMA-0
  • SMA-1
  • SMA-2
  • Non- performing

Answer :Non- performing

Which of the following statement is correct w.r.t income received from NPAs?


Options are :

  • Income from non-performing assets (NPA) is not recognised on accrual basis but is booked as income only when it is actually received.
  • Income from non-performing assets (NPA) is recognised on accrual basis and also booked as income when it is actually received
  • Income from non-performing assets (NPA) is not recognised on accrual basis but is booked as income only when it is partially/actually received
  • Income from non-performing assets (NPA) is recognised on actual basis and booked as income only when it is actually received.

Answer :Income from non-performing assets (NPA) is not recognised on accrual basis but is booked as income only when it is actually received.

CAIIB 2020 Bank Financial Management Mock Tests Set 14

A _______  is one, which has remained NPA for a period less than or equal to 12 months. Such an asset will have well defined credit weaknesses that jeopardise the liquidation of the debt and are characterised by the distinct possibility that the banks will sustain loss, if deficiencies are not corrected.


Options are :

  • Substandard Asset
  • Doubtful Asset
  • Loss Asset
  • All of the above

Answer :Substandard Asset

A _________ is an asset which is considered uncollectible and of such little value that its continuance as a bankable asset is not warranted although there may be some salvage or recovery value.


Options are :

  • Substandard Asset
  • Doubtful Asset
  • Loss Asset
  • All of the above

Answer :Loss Asset

If the realisable value of the security, as assessed by the bank/approved valuers/RBI is _______ of the outstanding in the borrowal accounts, the existence of security should be ignored and the asset should be straightaway classified as loss asset.


Options are :

  • less than 25%
  • less than 50%
  • less than 65%
  • less than 10%

Answer :less than 10%

CAIIB 2020 Bank Financial Management Mock Tests Set 2

All the members of the staff or any person authorized to represent the bank in collection or/and security repossession must follow which of the following guidelines-

I) Bank would respect privacy of its borrowers.

II) Bank is committed to ensure that all written and verbal communication with its borrowers will be in simple business language and bank will adopt civil manners for interaction with borrowers.

III) Normally bank’s representatives will contact the borrower between 0700 hrs and 1900 hrs, unless the special circumstance of his/her business or occupation requires the bank to contact at a different time.

IV) Borrower’s requests to avoid calls at a particular time or at a particular place would be honored as far as possible.     


Options are :

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

Answer :All of the above viz. I,II,III,IV

With an aim to provide a structured platform to the banking sector for managing its mounting NPA stocks and keep pace with international financial institutions, the _________ was put in place to allow banks and FIs to take possession of securities and sell them.


Options are :

  • SARFAESI Act.
  • DRI Act
  • Land Reforms Act
  • Debt Tribunal

Answer :SARFAESI Act.

As per SARFAESI Act, financial asset means debt or receivables and includes-

I) A claim to any debt or receivables or part thereof whether secured or unsecured.

II) Any debt or receivable secured by mortgage of or charge in immoveable property.

III) A mortgage charge, hypothecation of moveable property.

IV) Any right or interest in the security, whether full or part, securing debt.


Options are :

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

Answer :All of the above viz. I,II,III,IV

CAIIB 2020 Bank Financial Management Mock Tests Set 3

SARFAESI Act can be initiated when outstanding in the account including the interest accrued/applied is more than ______


Options are :

  • ?.50,000
  • ?.1,00,000
  • ?.1,50,000
  • ?.2,00,000

Answer :?.1,00,000

Originating banks can securitise loans only after these have been held by them for a minimum period in their books. The criteria governing the determination of MHP for assets reflects the need to ensure that-


Options are :

  • The project implementation risk is not passed on to the investors.
  • A minimum recovery performance is demonstrated prior to securitisation to ensure better underwriting standards.
  • A or B
  • Both A and B

Answer :Both A and B

MHP applicable to various loans depends upon -


Options are :

  • tenor
  • repayment frequency
  • Neither A or B
  • Both A and B

Answer :Both A and B

CAIIB 2020 Bank Financial Management Mock Tests Set 4

MHP for advances with original maturity of more than 2 years and upto 5 years and repayment weekly is -


Options are :

  • 3 months
  • 6 months
  • 12 months
  • 18 months

Answer :18 months

_________  is primarily designed to ensure that the originating banks have a continuing stake in the performance of securitised assets so as to ensure that they carry out proper due diligence of loans to be securitized.


Options are :

  • MHP
  • MRR
  • ARC
  • PTC

Answer :MRR

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