JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 2

What is the basic documents to be obtained while openi ng a Trust Account


Options are :

  • Trust Letter
  • Trust Deed
  • Copy of Resolution
  • Memorandum of Association

Answer :Trust Deed

JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 20

A pledges an ornament to  a money lender who  issues him a cheque  for Rs.1,000/-. which A passes on to B, a merchant towards cost of goods purchased before. B presents the cheque to the Bank. The money lender discovers the ornament pledged by A to be spurious and countermands payment of his cheque. In such a case 


Options are :

  • B as a holder-in-due course can cl aim payment of the cheque from the money lender
  • B cannot claim payment of the cheque from money lender as A obtained it fraudulently
  • as the money lender is entitled to stop payment of his cheque B cannot claim payment

Answer :B as a holder-in-due course can cl aim payment of the cheque from the money lender

Conversion according to N.I. act means 


Options are :

  • transfer of the benefit of a negotiable instrument to holder in due course
  • Wrongful transfer of t he benefit of a negotiable instrument to a person who is not the true owner
  • changing the name of payee

Answer :Wrongful transfer of t he benefit of a negotiable instrument to a person who is not the true owner

Issue of probate of a will is governed by which act? 


Options are :

  • Indian Contract Act
  • Indian Succession Act
  • Negotiable Instruments Act
  • Transfer of Property Act

Answer :Indian Succession Act

JAIIB Accounting and Finance for Bankers Mock Tests Set 1

In terms of Section 115 of the NI  Act 1881, where a drawee in case of need is named in a Bill of Exchange or  any other endorsement there on 


Options are :

  • the bill should be first pres ented to drawee in case of need
  • the bill cannot be considered di shonoured until it has been dishonoured by such drawee
  • in case of dishonour of bill the holder should have recourse to drawee

Answer :the bill cannot be considered di shonoured until it has been dishonoured by such drawee

A cheque, payment of which was st opped by the customer was paid through Oversight


Options are :

  • The bank is not responsible, as such a responsibility is disclaimed
  • The bank is responsible and cannot debit the amount of t he cheque to the customers a/c.
  • The bank is not responsible as the customer cannot stop payment of a cheque which was properly issued
  • The payment of the cheque, once issued, cannot be stopped

Answer :The bank is responsible and cannot debit the amount of t he cheque to the customers a/c.

There is a joint account in the names of A and B to be operated by both of them jointly. There is a  debit balance of Rs.5,000/- and the Bank receives a notice of As death : 


Options are :

  • The amount can be recovered from B only
  • The amount can be recovered from the estate of the deceased A only
  • The amount can be recovered from B and/or the estate of the deceased account holder A.
  • Civil suit must be filed for recovery
  • None of the above

Answer :The amount can be recovered from B and/or the estate of the deceased account holder A.

JAIIB Accounting and Finance for Bankers Mock Tests Set 10

Every charge created by a joint stock company has to be registered with the Registrar of Joint Stock Companies within 30 days of its cr eation. This is a requirement under which section of Companies Act, 1956 


Options are :

  • Section 125
  • Section 120
  • Section 128
  • Section 124

Answer :Section 125

A cheque signed by X, a director of the company counter signed by the secretary is presented for payment after the bank comes to know about Xs death


Options are :

  • X had signed the cheque in a fiduc iary capacity and death does not affect its validity. The cheque will be honoured
  • The cheque will be returned with the remark Refer to drawer
  • The cheque will be returned with the answer X, the director signing cheque deceased
  • The cheque will be paid provided it is countersigned by another director authorised to operate

Answer :X had signed the cheque in a fiduc iary capacity and death does not affect its validity. The cheque will be honoured

Mr. P has executed a power of attorney in favour of Mr. Q to accept bills drawn on the former. Mr. Q can on behalf of P, : 


Options are :

  • Draw bills of exchange
  • Discount bills of exchange
  • Endorse bills of exchange
  • None of these

Answer :None of these

JAIIB Accounting and Finance for Bankers Mock Tests Set 11

The income tax officer issues an attachment order under 


Options are :

  • Section 216 of I.T. Act 1961
  • Section 226 of I.T. Act 1961
  • Section 262 of I.T. Act 1961
  • None of the above

Answer :Section 226 of I.T. Act 1961

Mr. Sinha enjoys an overdraft limit of Rs.20,000/-. The bank has received Garnishee order for Rs.5,000/- when t he debit balance in the account is Rs.10,000/-. 


Options are :

  • Bank is bound to comply with the garnishee order as there is an arrangement to overdraw
  • Bank is bound to comply with the order as even after paying the garnishee order the balance will be within limit.
  • Bank is not bound to comply with the order as the ba nk owes no money to the customer
  • None of the above

Answer :Bank is not bound to comply with the order as the ba nk owes no money to the customer

The bank has paid cheque on which the signature of  the drawer is cleverly forged. The bank can claim protection if it proves against the drawer 


Options are :

  • Negligence
  • Estoppel
  • Either negligence or estoppel
  • None of the above

Answer :Either negligence or estoppel

JAIIB Accounting and Finance for Bankers Mock Tests Set 12

In case of a minor Muslim boy whose father died without leaving behind a will, the guardian will be 


Options are :

  • Mother
  • Uncle
  • Paternal Grandfather
  • Guardian appointed by Court

Answer :Paternal Grandfather

A power of attorney stands extinguished on 


Options are :

  • Death of the principal
  • Death of the attorney (or agent)
  • Lunacy of the Principal
  • All the above

Answer :All the above

Mr. X a Savings Bank account holder has been arrested under section 420  of IPC on a charge of cheating. Y ou received a notice from Public Prosecutor asking the bank to stop operations in the account. Meantime a cheque for Rs.12,000/- is presented through clearing for payment. There is sufficient balance in the account. Under these circumstances. 


Options are :

  • Account should be stopped and cheque returned
  • Cheque can be paid if it was issued before his arrest
  • Bank is bound to honour the cheque despite his arrest
  • The operation should be stopped in the account

Answer :Bank is bound to honour the cheque despite his arrest

JAIIB Accounting and Finance for Bankers Mock Tests Set 13

X draws a cheque favouring Y or order. Z forges Ys endorsement and negotiates it to P who takes it for val ue and without any notice of defect in Zs title. P receives payment of the cheque from the drawee bank. X can recover money from: 


Options are :

  • P
  • Y
  • A drawee bank
  • None of the above

Answer :None of the above

A joint account is in the name of Hari and Krishna with instructions either or survivor Hari grants a power of attorney  in favour of Lakshman. We should : 


Options are :

  • Not allow Lakshman to operate the account without oral confirmation of Krishnan
  • Allow Lakshman to oper ate the account as either of account holders is Competent to appoint an attorney
  • Not allow Lakshman to operate the account
  • None of the above

Answer :Not allow Lakshman to operate the account

Summons to produce paid instruments  or other documents by Police Officer is issued under 


Options are :

  • 45(2) of Banking Resolation Act
  • Sec. 420 of Indian Penal Code
  • Sec. 91 of Cr. Procedure Code
  • Sec. 10 of N.I. Act

Answer :Sec. 91 of Cr. Procedure Code

JAIIB Accounting and Finance for Bankers Mock Tests Set 14

A minor has come to your bank for receiving the payment of a cheque for Rs.25,000/-. The bank cashier refuses to make the payment saying that the payment cannot be made to the minor as he is not competent to contract:  


Options are :

  • The action of the bank cashier is wrong as the minor is entitled to receive the payment and give a valid discharge to the bank and he cannot deny the liability after receiving the payment.
  • The cashier is right. The minor cannot give valid receipt for payment to the received by him on the reverse of the cheque or on a piece of paper. Minor can deny payment. He can be cheated by others. Others can use him to collect 'payment of stolen cheques. Therefore, minor should not be given payment of the cheque. The cashier has correctly refused to pay him the amount of the cheque of Rs. 25.000/-.
  • The cashier should have asked the status of the family of the minor. If the minor comes of a status family, he can be paid the amount of the cheque. If the minor belongs to an ordinary or poor family, he can be refused payment of cheque.

Answer :The action of the bank cashier is wrong as the minor is entitled to receive the payment and give a valid discharge to the bank and he cannot deny the liability after receiving the payment.

'Marina' a minor by fraudulently representing himself as a major induced a banker to sanction him a loan subsequently he refused to repay: 


Options are :

  • Bank can file a suit against Marina
  • Bank can not file a suit against Marina
  • Bank can file a suit against the Natural
  • Guardian of Marina
  • None of the above

Answer :Bank can not file a suit against Marina

Your branch is having account of Mr. Sukhdev (minor) under guardianship of his father, Mr. Manish. On attaining majority, Sachin serves a notice on the bank claiming the amount withdrawn by his father alleging that his father had mis utilised the money. Discuss the bank's position


Options are :

  • The guardian has a duty to spend the money for the benefit of minor. The minor can file suit in a court of law against the guardian to render full account to him.
  • A guardian has the legal authority to deal with the minor's property and payments received by him from the Bank will be in order: his acknowledgement/receipt given to the bank will be valid discharge to the bank. The bank incurs no liability.
  • The bank has to satisfy the minor that the money withdrawn by the guardian was spent for his benefit. The minor can claim damages from the bank if money was not spent for his benefit by the guardian.
  • The minor can file a suit against the bank for recovery of the amount misutilised by the guardian and for the fault of the bank in not ensuring that the guardian utilized the money for the benefit of the minor

Answer :A guardian has the legal authority to deal with the minor's property and payments received by him from the Bank will be in order: his acknowledgement/receipt given to the bank will be valid discharge to the bank. The bank incurs no liability.

JAIIB Accounting and Finance for Bankers Mock Tests Set 15

A minor who has completed the age of 10 years, approaches a bank for opening a savings Bank account. He has completed the account opening form and also affixed the thumb impression. The minor is duly introduced. The account has also been opened. Discuss whether the bank's action is in order or not. 


Options are :

  • The bank, by opening this account, has violated the Reserve Bank of India guidelines, which clearly state that for opening the account of a minor, he must have completed the minimum age of 10 years and must be literate.
  • The RBI has permitted opening of account by a minor of 10 years because at this age, the minor understands the implications of bank account The bank's action of opening account is in order.
  • The account can be opened. The minor will be asked to visit t he bank personally each time when he would want to operate the account
  • The account cannot be opened-rn the name of minor who is 10 years old. The minimum age limit of 14 has been fixed by the government of India for the purpose of opening saving bank account

Answer :The bank, by opening this account, has violated the Reserve Bank of India guidelines, which clearly state that for opening the account of a minor, he must have completed the minimum age of 10 years and must be literate.

Mr. Arun, father of a minor child 'Mrlkula opened an Alc of Miss Mrlkula under his natural guardianship. The date of birth of minor Is 06-07.76. On 07-07-94, Mr. Arun approaches you for withdrawal of repay the borrowed money Please discuss the bank's stand.  


Options are :

  • The money deposited belonged to Mr. Arun. Therefore, he will be allowed to withdraw
  • Mr. Arun will not be allowed to withdraw the amount as he has lost the capacity of a guardian after his child has become major. Now the erstwhile minor himself will operate the account, as he has become major.
  • Mr. Arun will be allowed to withdraw the money provided he gives a letter in writing on Deposits that the money will be spend for the benefit of his daughter
  • The withdrawal will be permitted if both Mr.Arun and his daughter, Miss Mrikula, sign the withdrawal form.

Answer :Mr. Arun will not be allowed to withdraw the amount as he has lost the capacity of a guardian after his child has become major. Now the erstwhile minor himself will operate the account, as he has become major.

Model Bank issued an FDR in the name of Mr. X and his wife W. Mrs W comes to the bank and request for premature payment to meet the expenses on treatment of Mr. X who is admitted to one hospital and cannot sign, because of fractured hands:    


Options are :

  • the request of W will be considered on sympathetic consideration
  • the request of W will be considered on production of certificate from the hospital the effect that Mr.X is admitted
  • the request of W will be turned down altogether
  • payment can be made after verifying the facts and after obtain thumb impression of Mr. X in the hospital, witnessed by the attending Doctor

Answer :payment can be made after verifying the facts and after obtain thumb impression of Mr. X in the hospital, witnessed by the attending Doctor

JAIIB Accounting and Finance for Bankers Mock Tests Set 2

Mr. X has been maintaining two loan accounts with your branch, one of which has become time barred due to non-cooperation of the borrower. A sum of Rs.15000 is deposited in the name of Mr. X by Mr. Z. How the bank would deal with this amount ?  


Options are :

  • it can be credited only to the loan account which is not time barred
  • it can be credited only to the loan account which is time barred
  • it can be credited to any of the loan accounts at the discretion of the bank
  • it can be credited to the time barred loan account with the consent of the borrower

Answer :it can be credited to any of the loan accounts at the discretion of the bank

A garnishee order has been received in the name of Mr. X who is associated with the following accounts maintained with your branch. In which of these accounts the order would be applicable:


Options are :

  • account in the name of his minor wife under his guardianship
  • overdraft account having un-availed limit of Rs.35000
  • account of a trust where he is the sole trustee
  • none of the above

Answer :none of the above

Introduction is must in respect of all deposit accounts because


Options are :

  • Introducer is responsible for any liability and losses created by the account holder he introduces
  • Protection under Section 131 of Nl Act will not available to the collecting Bank without introduction
  • Banking practice
  • It will enable the bank to check the frauds
  • None of the above

Answer :Protection under Section 131 of Nl Act will not available to the collecting Bank without introduction

JAIIB Accounting and Finance for Bankers Mock Tests Set 3

A Garnishee order is issued by -------------


Options are :

  • The RBI to scheduled bank for stopping payment in an account
  • The competent court for attaching funds due to a judgement debtor by a third party for payment to the judgement creditor
  • The Income Tax Recovery Officer attaching funds in the account maintained by the bank.
  • The district Magistrate requiring the bank to remit to his office a certain sum of money to the debit of particular account.

Answer :The competent court for attaching funds due to a judgement debtor by a third party for payment to the judgement creditor

When a Garnishee Nisi is served, the Banker should


Options are :

  • Pay the balances to the judgment Debtor
  • Pay the amount as the Branch Manager feels it right
  • Stop operations in the judgment debtors a/c upto amount mentioned in the garnishee order & allow the operations for balance amount
  • None of these

Answer :Stop operations in the judgment debtors a/c upto amount mentioned in the garnishee order & allow the operations for balance amount

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