CAIIB 2020 Retail Banking Mock Tests Set 4

Current guidelines stipulate MRR of ____of  the book value of the loans being securitized for Loans with an original maturity of more than 24 months.


Options are :

  • 5%
  • 10%
  • 15%
  • 20%

Answer :10%

CAIIB 2020 Retail Banking Mock Tests Set 5

Bullet payment loans with tenor up to 24 months extended to individuals for agricultural activities where both interest and principal are due only on maturity and trade receivables with tenor up to 12 months discounted/ purchased by banks from their borrowers. However, only those loans/ receivables are eligible for securitisation where -


Options are :

  • a borrower (in case of agricultural loans)/ a drawee of the bill (in case of trade receivables) has fully repaid the entire amount of last two loans
  • receivables (one loan, in case of agricultural loans with maturity extending beyond one year) within 90 days of the due date.
  • Both A and B
  • A or B

Answer :Both A and B

The asset classification and provisioning rules in respect of the exposure representing the Minimum Retention Requirement (MRR) is/are-


Options are :

  • The originating bank may maintain a consolidated account of the amount representing MRR if the loans transferred are retail loans.
  • In the case of transfer of a pool of loans other than retail loans, the originator should maintain borrower-wise accounts for the proportionate amounts retained in respect of each loan.
  • If the originating bank acts as a servicing agent of the assignee bank for the loans transferred, it would know the overdue status of loans transferred which should form the basis of classification of the entire MRR/individual loans representing MRR as NPA in the books of the originating bank, depending upon the method of accounting followed.
  • all of the above

Answer :all of the above

Which of the assets are considered under Acquisition of Stressed Financial Assets by ARCs?


Options are :

  • Fund based financial assets
  • Non- fund based financial assets.
  • Assets classified as SMA-2.
  • all of the above

Answer :all of the above

CAIIB 2020 Bank Financial Management Mock Tests Set 1

Every ARC has to invest in the Security Receipts issued by trusts set-up for the purpose of securitization an amount not less than ______  under each scheme. Every ARC continues to hold such security receipts issued by them under each scheme on an ongoing basis till the redemption of all the security receipts issued under each scheme.


Options are :

  • 5%
  • 10%
  • 15%
  • 20%

Answer :15%

Which one of the following statements is appropriate in respect of Securitisation Process?

I)The lender first selects the assets they want to securitise.

II)The issuer (Special Purpose Vehicle) makes payment to the lender for the loans securitised.

III)The assets are converted into a pool of securities by the lender for the purpose of issuing Pass through Certificate (PTC).

IV)The PTCs are sold to other investors who are willing to invest.


Options are :

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

Answer :Only I,II,IV

Securitization can be effected for _______________________.


Options are :

  • Standard assets only
  • Rated accounts only
  • Standard & Sub-standard assets
  • All the above

Answer :All the above

CAIIB 2020 Bank Financial Management Mock Tests Set 10

The Instrument issued by the an SPV should have which of the following characteristics-

I) Be capable of being offered to the public or private placement.

II) Permit free or restricted transferability.

III) Permit issuance of pass through or pay through Securities.

IV) Represent the amounts invested and the undivided interest or share in the assets (and should not constitute debt of SPV or the Originator).


Options are :

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

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

With respect to advances, MHP(Minimum Holding Period) is defined with reference to -


Options are :

  • the number of instalments to be paid prior to securitisation.
  • the moratorium period as per norms of different banks.
  • Neither A nor B
  • both A and B

Answer :the number of instalments to be paid prior to securitisation.

For Bullet repayment loans/receivable, ____ of the book value of the loans is securitized.


Options are :

  • 5%
  • 10%
  • 15%
  • 20%

Answer :10%

CAIIB 2020 Bank Financial Management Mock Tests Set 11

Which of the following is/are method of Securitization of NPAs?


Options are :

  • Sale of Stressed Assets by Banks
  • Acquisition of Stressed Financial Assets by ARCs
  • Issue of Security Receipts (SRs)
  • all of the above

Answer :all of the above

SARFAESI Act can be initiated in case of multiple lenders/consortium advances, ensure lenders having a minimum of ____ of dues outstanding are agreeable for initiating action under SARFAESI Act 2002.


Options are :

  • 15%
  • 25%
  • 60%
  • 100%

Answer :60%

On receipt of the SARFAESI notice if the borrower makes any representation or raises any objection, the secured creditor has to communicate his reply to the borrower within ______ of the receipt of such representation based on factual position and on merits.


Options are :

  • 15 days
  • 30 days
  • 45 days
  • 60 days

Answer :15 days

CAIIB 2020 Bank Financial Management Mock Tests Set 12

Sec 13(13) of the SARFAESI Act provides that after receipt of the demand notice, the Borrower/Mortgagor/Guarantor shall not transfer any of the secured assets by way of-


Options are :

  • sale
  • lease
  • without the prior written consent of the Bank.
  • all of the above.

Answer :all of the above.

In SARFAESI, Within seven days of taking possession, the possession Notice should also be published in two leading Newspapers -

I) one of which should be in the vernacular language, having sufficient circulation in that locality where the property is situated.

II) one must be English newspaper

III) one must be Hindi  National Newspaper.


Options are :

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

Answer :Only I is must.

The Chief Metropolitan Magistrate /Chief Judicial Magistrate/ or District Magistrates hall after satisfying the contents of the affidavit pass suitable orders under Sec 14 for the purpose of taking possession of the secured assets within a period of ______ from the date of application.


Options are :

  • 15 Days
  • 30 Days
  • 45 Days
  • 60 Days

Answer :30 Days

CAIIB 2020 Bank Financial Management Mock Tests Set 13

As per SARFAESI, The Authorised Officer should serve ______  ‘Sale Notice’ on the borrowers/ mortgagors/ guarantors.


Options are :

  • 16 Days
  • 31 Days
  • 46 Days
  • 61 Days

Answer :31 Days

e-Auction is compulsory for public sale through SARFAESI except for the cases where-


Options are :

  • The book o/s at the time of auction is less than Rs. 5 lakh.
  • The FSV of the property being brought for auction is less than Rs. 5 lakh.
  • Neither A nor B
  • Both A and B

Answer :Both A and B

__________ are apex bodies to settle recovery issues in case of loans extended by financial institutions.


Options are :

  • DRTs
  • SARFAESI
  • RBI
  • NABARD

Answer :DRTs

CAIIB 2020 Bank Financial Management Mock Tests Set 14

Each Debt Recovery Tribunal is presided over by a Presiding Officer. The Presiding Officer is a person has been or is qualified to be, _______.


Options are :

  • a District Judge
  • a District Magistrate.
  • a Chief Metropolitan
  • a Tehsildar.

Answer :a District Judge

Application for recovery of debts due under DRT is accompanied with a fee payable as


Options are :

  • Where amount of debt due is ?. 10 lakh: ?. 12,000
  • Where the amount of debt due is above ?. 10 lakh: ?. 12,000/- plus ?. 1,000/- for every one lakh rupee of debt due or part thereof in excess of ?. 10 lakh subject to a maximum of ?. 1,50,000/-
  • Neither A nor B
  • Both A and B

Answer :Both A and B

The Recovery Officer on receipt of the copy of the certificate proceed to recover the amount of debt specified in the certificate by which of the following modes-

I) Attachment and sale of the movable or immovable property of the defendant

II) Taking possession of property over which security interest is created or any other property of the defendant and appointing receiver for such property and to sell the same

III) Arrest of the defendant and his detention in prison

IV) Appointing a receiver for the management of the movable or immovable properties of the defendant.


Options are :

  • Only II,III
  • Only III,IV
  • 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 2

Lok Adalat is organised under the provisions of -


Options are :

  • The Legal Services Authorities Act, 1987.
  • SARFAESI
  • Banking Regulations Act, 1934
  • Reserve Bank of India Act.

Answer :The Legal Services Authorities Act, 1987.

Pre-litigative cases relating to recovery/accounts with outstanding upto Rs.20 lakh and Suit filed cases/accounts where the plaint amount does not exceed ______ can be referred to Lok Adalat.


Options are :

  • ?1 lakh
  • ?5 lakh
  • ?10 lakh
  • ?20 lakh

Answer :?20 lakh

Under Lok Adalats, the settlement may be made prudently as per which of the following terms -


Options are :

  • Down Payment of awarded amount at the time of settlement itself.
  • Full payment of the awarded amount within a short duration.
  • Full payment of the awarded amount in instalments within a short duration.
  • all of the above

Answer :all of the above

CAIIB 2020 Bank Financial Management Mock Tests Set 3

Which of the following statements are correct w.r.t. provisions for taking possession of property mortgaged/ Hypothecated to banks?

I) Notice period before taking possession,

II) Circumstances under which the notice period can be waived,

III) The procedure for taking possession of the security,

IV) A provision regarding final chance to be given to the borrower for repayment of loan before the sale/auction of the property,

V) The procedure for giving repossession to the borrower, and

VI) The procedure for sale/auction of the property.


Options are :

  • All of the above except V
  • All of the above except III
  • All of the above except II,IV
  • All of the above viz. I to VI

Answer :All of the above viz. I to VI

What is the objective behind recovery process?


Options are :

  • Increasing number of corporate loans
  • Increasing NPAs
  • Reducing NPAs
  • Reducing number of loans

Answer :Reducing NPAs

_________ means a person who is liable, whether under a contract or otherwise, to pay a debt or receivables or to discharge any obligation in respect of a debt or receivables.


Options are :

  • Obligor
  • Originator
  • Sponsor
  • Securitisation

Answer :Obligor

CAIIB 2020 Bank Financial Management Mock Tests Set 4

________  a process by which a single performing asset or a pool of performing assets are sold to a bankruptcy remote SPV and transferred from the balance sheet of the originator to the SPV in return for an immediate payment.


Options are :

  • Obligor
  • Originator
  • Sponsor
  • Securitisation

Answer :Securitisation

_______ means any person who establishes or promotes a special purpose distinct entity.


Options are :

  • Obligor
  • Originator
  • Sponsor
  • Securitisation

Answer :Sponsor

Comment / Suggestion Section
Point our Mistakes and Post Your Suggestions