JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 17

M/s Taylor Pvt. Ltd. was disbursed a term loan of Rs.25 lac on 20th Aug 2003 by Ban k of India. The charge on the assets were got registered by the bank on 10th Sept., 2003. In meanwhile, the Company got CC (Hyp.) limit of Rs.50 lac on 25th Aug, 2003, from Central Bank of India and the plant and machinery, land and building was charged as collateral security. Central Bank of India got the charge registered with Registrar of Companies on 1st Sept, 2003. Discuss which bank has priority of charge.


Options are :

  • The bank will have pari-passu charge
  • The priority of charge is decided on the basis of the date of registration of charge with ROC, and not on the date of documents
  • The priority of charge is decided on the basis of the nature of charge i.e., equitable or legal mortgage
  • The priority of charge is decided on the basis of the date of document and not on the date of registration of charge with ROC

Answer :The priority of charge is decided on the basis of the date of document and not on the date of registration of charge with ROC

JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 18

A contract of insurance is a contract of 


Options are :

  • Indemnity
  • Indemnity & Guarantee
  • Guarantee
  • None of the above

Answer :Indemnity

 Unless otherwise specified in the LC, the Insurance amount should be expressed in:


Options are :

  • In the currency of LC
  • SDR
  • Indian Rupees
  • US Dollars
  • Sterling Pound

Answer :In the currency of LC

Mr. Headstrong maintaining a Current account with your branch Issues a cheque in favour of his supplier. The cheque is presented in the clearing and since the cheque was in order and there was sufficient balance the same was passed by your branch. He now requests you to return the instrument to him. How will you handle his request?


Options are :

  • None of the above
  • The bank may give true copy of the cheque to Mr. Headstrong
  • As per Banking Regulation Act, bank is not permitted to part with cheque, as after making the payment, the instrument is the property of the bank:
  • As per Banking Regulation Act, paid instruments are customer's property and he has every right to get the same

Answer :As per Banking Regulation Act, paid instruments are customer's property and he has every right to get the same

JAIIB Accounting and Finance for Bankers Mock Tests Set 1

Official language Policy of Govt. of India (Constitution provisions, Official language Act, (O.L. Rules etc.) applies to


Options are :

  • All organisation owned and controlled by Central Govt.
  • Railways only
  • Central Govt. offices only
  • Banks & Financial institution only
  • Central offices

Answer :All organisation owned and controlled by Central Govt.

Mr. Shahrukh Khan wrote a letter to Amir Khan that he is to pay Rs. 50, 000/- to State Bank of Patiala as he has taken the loan. Amir Khan gives this letter to the bank:


Options are :

  • Acknowledgment of debt letter need not be addressed to creditor and it may be addressed to third party.
  • It will be a valid acknowledgment and extend the period of limitation if the date of letter is within the limitation period of documents
  • Acknowledgment of debt letter must be addressed to creditor only as the loan contract is between banker and customer and third party has no concern with that rd party.
  • Personal letters do not fall into the category of acknowledgment of debt & security --> rd party.
  • a & b above t & security --> rd party.

Answer :a & b above t & security --> rd party.

In case a document is over stamped in the first state (lower stamp area) to make up the deficiency in the second state of


Options are :

  • None of these
  • This document will be invalid and a fresh one will be executed
  • It is valid in second state, as adequate stamps in accordance with stamp duty of higher duty area have been affixed.
  • It is not valid and fresh stamps duty between the high stamp area and lower stamp area need to be affixed.

Answer :It is not valid and fresh stamps duty between the high stamp area and lower stamp area need to be affixed.

JAIIB Accounting and Finance for Bankers Mock Tests Set 10

Syndicate Bank sanctioned a loan to M/s Krishnamurti Iyer and Co. against pledge of goods. One of the clauses of the pledge agreement obtained by the bank from the borrowers states that In case of default In payment, the Bank can sell the pledged goods without giving any notice to the borrowers. As the borrowers did not pay the money, when demanded by the bank, Syndicate Bank recovered the amount after exercising the right of private sale. The borrowers challenged the act of the bank and prayed before the court to declare the sale null and void. Explain the legality of sale conducted by the bank.


Options are :

  • Even though right of private sate is available to the bank under Section 176 of the Contract Act, the same cannot be exercised without giving reasonable notice to the customers (borrowers). The right of the borrowers to notice cannot be contracted out even through an agreement. As such, the action of the bank to sell the goods without giving reasonable notice to the customers (borrowers) is unlawful; the sale is invalid.
  • Private sale of the pledged goods is not permitted by law. Sale of goods by public auction is, however, permitted.
  • The sale is in order pledged goods can be sold by the pledgee at any time, even without notice
  • Since the loan Agreement specifically gave power of sale without notice to tt1e bank, the sale of the goods by the bank for recovery of its due cannot be questioned.

Answer :Even though right of private sate is available to the bank under Section 176 of the Contract Act, the same cannot be exercised without giving reasonable notice to the customers (borrowers). The right of the borrowers to notice cannot be contracted out even through an agreement. As such, the action of the bank to sell the goods without giving reasonable notice to the customers (borrowers) is unlawful; the sale is invalid.

Which of the following committees has recommended that companies entering into merger and acquisition transactions, making preferential allotment of shares to related partis and proposing buyback of shares must appoint registered valuer for independent valuation of shares and assets?


Options are :

  • Vema Committee
  • Naresh Chandra Committee
  • None of these
  • Narasimham Committee
  • Shroff Committee

Answer :Shroff Committee

Acceptance is not required in the case of


Options are :

  • none of these
  • Promissory Note
  • Demand bill of exchange
  • Both of these

Answer :Both of these

JAIIB Accounting and Finance for Bankers Mock Tests Set 11

The "protest" is the


Options are :

  • Court's direction to the paying banker not to pay a cheque
  • None of these
  • Formal notarial certificate attesting the dishonour of the bill, and based upon the noting
  • Protest lodges by the parties in disputes 19 a Negotiable Instrument

Answer :Formal notarial certificate attesting the dishonour of the bill, and based upon the noting

Which of the following do not fall within the implied powers of a partner under section 19(2) of the Partnership Act, 1932


Options are :

  • All of these
  • Withdrawing suit or proceeding filed on behalf of the firm
  • Opening a banking' account on behalf of the firm in his own name.
  • Compromising or relinquishing any claim or portion of a claim by the firm.

Answer :All of these

Garnihee Order is issued under


Options are :

  • The Garnishee Order Act, 1960
  • N.I. Act 1881
  • The Banking Regulation Act, 1949.
  • Rule 46 of Order XXI of the Schedule to the' code of Civil procedure 1908

Answer :Rule 46 of Order XXI of the Schedule to the' code of Civil procedure 1908

JAIIB Accounting and Finance for Bankers Mock Tests Set 12

Borrowing powers of a company are mentioned in 


Options are :

  • Memorandum of association
  • Memorandum of association in case of public Ltd. co.
  • None of the above
  • Board resolution
  • Articles of association

Answer :Articles of association

Registration of charge is not necessary when the company has been granted credit facility against 


Options are :

  • Hypothecation of Stocks
  • Pledge Account
  • Book Debts
  • FDR
  • a and d

Answer :a and d

Red Clause LC is one which


Options are :

  • Authorises release of pre-shipment finance to the beneficiary
  • Prohibits Tran shipment
  • Prohibits Transferring
  • Restricts Negotiations

Answer :Authorises release of pre-shipment finance to the beneficiary

JAIIB Accounting and Finance for Bankers Mock Tests Set 13

Parties to a guarantee are


Options are :

  • Principal Debtor, Surety & Creditor
  • Promisor, promisee
  • Debtor, Creditor
  • None of these

Answer :Principal Debtor, Surety & Creditor

 Prospectus is:


Options are :

  • A document furnishing prospects of the company
  • None of the above.
  • A document furnishing last 3 years Balance sheet.
  • An invitation to the public to subscribe shares or debentures or deposits.

Answer :An invitation to the public to subscribe shares or debentures or deposits.

 Minor is not competent to contract as per the provisions of Contract Act still we allow the minor to open the self-operated deposit account. This is as per:


Options are :

  • RBI directives
  • Provisions contained in banking regulation act
  • Deposit contract is for the benefit of the minor
  • There is no liability in case of deposit account
  • As per Section 26 of NI Act

Answer :As per Section 26 of NI Act

JAIIB Accounting and Finance for Bankers Mock Tests Set 14

 Ramnath is having loan of Rs One lac against his fixed deposit' of Rs Two lac, with your branch. He approaches you and informs you of his bad health and request to add the name of his minor son. How will you handle the request of Ramnath?


Options are :

  • Since loan is outstanding the name of minor cannot be added. However the name of major can be added.
  • The request of Ramnath can be considered only on the adjustment of the loan account.
  • The request of Ramnath will be considered.
  • Ramnath be asked to discount the FDR and thereafter the name of minor can be added.
  • None of the above

Answer :The request of Ramnath can be considered only on the adjustment of the loan account.

Mortgage suit before DRT can be filed:

 


Options are :

  • b & c
  • Where the mortgage property is situated
  • As per the discretion of the bank
  • Where the cause of action has been arisen
  • Where defendant resides

Answer :b & c

The Securitisation, Reconstruction Qf Financial Assets and Enforcement of Security Interest Act 2002 will cover loans 1 advances with outstanding of


Options are :

  • Rupees Five lac and above
  • Rupees Ten lac and above
  • Rupees Twenty lac and above
  • Rupees One lac and above

Answer :Rupees One lac and above

JAIIB Accounting and Finance for Bankers Mock Tests Set 15

The document execution register is to be signed by 


Options are :

  • The witnesses to documentation
  • All the borrowers
  • The bank officials in whose presence documentation was done
  • None of these

Answer :The bank officials in whose presence documentation was done

In case a document travels from higher stamp area to lower stamp


Options are :

  • Such a document will not be valid and a fresh one will have to executed
  • Additional stamps as per lower stamps area need to be affixed
  • Additional stamps are not required to be affixed
  • None of these

Answer :Additional stamps are not required to be affixed

Finder of lost goods shall return to the true owner, if found, provided the true owner:


Options are :

  • Compensates all reasonable expenses incurred.
  • Finder need not return the goods
  • Pays half the price of the goods.
  • Demands within one month.

Answer :Compensates all reasonable expenses incurred.

JAIIB Accounting and Finance for Bankers Mock Tests Set 2

Mr. Simon, a Coal Trader, draws a Usuance bill on Mr. Henry. He has given the purchaser credit term of 60 days for making payment. This bill was sent by Patna Branch of Citi Bank to its Kanpur Branch. On receipt of the bill, Kanpur branch presented it to Mr. Henry, the drawee of the bill. In fact, the bill was presented for acceptance to the drawee, by the in-charge of the bill department after closure of the branch. The in-charge of the bill department thought that as the business place of the drawee was on his way to residence, the bill could be presented by him while going home. What is the legal position of this presentation?


Options are :

  • The presentation is in order but the date of acceptance should be treated as the next day of working of the branch, for calculating due date of the bill.
  • The presentation should be during the working hours of the branch and the accepted bill must remain overnight in the custody of bill incharge. In the instance case, the bill was taken by the bill in-charge to his residence and it remained in his personal custody overnight, which is illegal.
  • The presentation is not in. order because the bill in-charge presented it after closing of the branch.
  • The usance bill must be presented to its drawee for acceptance during business hours at his business place. The words "business hours" have no relation with the business hours of the bank, but they have direct relation with the business hours of the trader (drawee). As the bill has been presented to the drawee during his business hours, it is a proper presentation under the law, and the bank stands discharged from liability.

Answer :The usance bill must be presented to its drawee for acceptance during business hours at his business place. The words "business hours" have no relation with the business hours of the bank, but they have direct relation with the business hours of the trader (drawee). As the bill has been presented to the drawee during his business hours, it is a proper presentation under the law, and the bank stands discharged from liability.

The bank while disbursing the loan did not stamp the promissory note for the appropriate value. The options for the bank is


Options are :

  • Unstamped / Under stamp promissory note cannot be rectified
  • None of the above
  • Pay penalty upto 10 time

Answer :Unstamped / Under stamp promissory note cannot be rectified

Bipartite settlements are registered under which act:


Options are :

  • Shop and establishment act
  • Factories act
  • None of the above
  • Industrial Dispute Act
  • Payment of wages act

Answer :Industrial Dispute Act

JAIIB Accounting and Finance for Bankers Mock Tests Set 3

Som Mohan is having a Current OD with overdraft of Rs. 25,000/-. He deposits Rs. 40,000/- in cash in the bank for issuing the draft  in  favour  of  his  suppliers. The  bank  wants  to  set off Rs. 25,OOO/- towards adjustment of the Current OD. Sam Nath has written a letter and has threatened the bank with legal action, if Rs. 25,000/- are utilized for adjustment of the Current overdraft account


Options are :

  • Right of set-off is not available as it has not been credited in the overdraft account
  • As per the Contract Act, the bank has the right of set-off when the individual has liability outstanding and it has become due and has been recalled through proper recall notice
  • As per the Contract Act, the bank has the right of set-off when the individual has liability outstanding and it has been recalled.
  • As per the Contract Act, when the amount is deposited for specific purpose like issuing of draft, then the right of set-off is not available to the bank

Answer :As per the Contract Act, when the amount is deposited for specific purpose like issuing of draft, then the right of set-off is not available to the bank

When a bill is drawn in a set of three & third is presented for payment 


Options are :

  • None of above
  • It can be paid
  • Payment should be refused
  • Payment will be made after complete set is presented
  • Payment may be made against indemnity

Answer :It can be paid

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