JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 20

Case under 138 can be filed in a court of:


Options are :

  • a. b & c above
  • 1st Class Judicial Magistrate
  • 1st Class Executive Magistrate
  • Metropolitan Magistrate
  • a & b above

Answer :a & b above

JAIIB Legal & Regulatory Aspects Of Banking Mock Test Set 3

M/s British & Co availing a Term Loan of Rs 25 Lac defaulted in repayment of loan. Since the borrower became willful defaulter bank decided to file the suit. On 14th Aug 2003 on scrutiny of documents, bank found that the documents were expiring on 15th Aug 2003 and on 16th Aug 2003 the bank was closed. What advice will you give to the manager to safeguard bank’s interest.


Options are :

  • None of the above.
  • As per the Limitation Act, suit cannot be filed on the next opening date of the court. The bank will approach Chief Judicial officer at his residence and seek extension for two days.
  • The dealing loan officer should be made personally liable.
  • As per the Limitation Act, suit can be filed on the next opening date of the court on the next date, the bank is closed but the court is opened, bank will have to ensure that the suit Is filed on 16th August.
  • The bank will seek the opinion from legal counsel head office.

Answer :As per the Limitation Act, suit can be filed on the next opening date of the court on the next date, the bank is closed but the court is opened, bank will have to ensure that the suit Is filed on 16th August.

Cash Reserve Ratio is maintained by the banks by


Options are :

  • Investing in approved securities..
  • None of these
  • Keeping cash balance in safe of other banks
  • Keeping cash balance with RBI

Answer :Keeping cash balance with RBI

The bank receives Garnishee Order. What is the relationship between banker and customer 


Options are :

  • Debtor Creditor
  • Bailor Bailee
  • Creditor Debtor
  • Lessor Lessee

Answer :Debtor Creditor

JAIIB Accounting and Finance for Bankers Mock Tests Set 1

A Stale Bill of Lading is one


Options are :

  • Which is presented to the Bankers after 20 days from the date of shipment
  • Which is presented to the banker after 15 days from the date of shipment
  • Which is a stolen Bill ment
  • Which is presented to the Bankers after 21 days from the date of shipment

Answer :Which is presented to the Bankers after 21 days from the date of shipment

Ramu & Co. a partnership consists of 3 partners A, B & C. The a/c is operated by A and B singly and C is a sleeping partner. C instructs the bank to stop the payment of a cheque issued by A.


Options are :

  • Can be stopped if other partners A & B are not available
  • Cannot be stopped since he is sleeping partner
  • Can be stopped
  • None of the above

Answer :Can be stopped

 Forward exchange contract is an agreement where:


Options are :

  • None of the above.
  • Exchange rate is determined at a future date
  • The AD is agreed to give at a future date on export policy
  • Foreign exchange is delivered at predetermined future date at a contracted rate

Answer :Foreign exchange is delivered at predetermined future date at a contracted rate

JAIIB Accounting and Finance for Bankers Mock Tests Set 10

Section 137 of the Transfer of Property Act also recognizes the negotiability of instruments by law or custom. Out of the following which has been recognized as such:


Options are :

  • Delivery orders
  • All the above
  • 'Banker's drafts
  • Railway receipts
  • Hundis

Answer :All the above

M/s Careless & Lazy, a partnership firm maintaining, a satisfactory Current account for last three years approaches you for sanction of a term loan of Rs 10 lac for the purchase and against the hypothecation of plant and machinery. You find the proposal viable and the loan is proposed   to secured by adequate collateral security. However you find that the partnership firm is not registered. What risk the bank is exposed to while lending to unregistered firm?


Options are :

  • a and c
  • A partnership firm may or may not be registered with Registrar of firms and such it does not make any substantial difference.
  • A registered firm enjoys certain benefits over an unregistered firm. While, both can be sued by others, an unregistered firm cannot sue others in its name.
  • In case the bank lends to unregistered firm, the bank is exposed to the risks, as the unregistered firm will not be able to file suit against its debtors for recovery of its dues. This may affect its repayment capacity towards the bank dues.
  • b and c

Answer :b and c

A contract of 'Guarantee' is defined as


Options are :

  • None of the above
  • A contract to perform or discharge the liability of principal debtor in case of his default in
  • A contract to perform or discharge the liability of creditor
  • A contract to perform or discharge the liability of surety

Answer :A contract to perform or discharge the liability of principal debtor in case of his default in

JAIIB Accounting and Finance for Bankers Mock Tests Set 11

If a document duly stamped in Delhi travels to J & K State 


Options are :

  • Additional stamps equivalent to full stamp duty of J & K state are required to be affixed
  • Additional stamps of difference amount are affixed
  • Fresh document are to be executed
  • None of these

Answer :Additional stamps equivalent to full stamp duty of J & K state are required to be affixed

In case borrower signs in a vernacular language, a banker must obtain 


Options are :

  • Duly witnessed certificate that the contents have been read out and explained
  • Both a & b
  • None of these
  • A certificate by the borrower in vernacular language that the document have been explained and understood

Answer :Both a & b

Debt service coverage ratio (DSCR) shows


Options are :

  • Number of times the value of fixed assets covers the amount of borrowed funds
  • Number of times the company's surplus generation cover the payment of interest and repayment of principal of long debt
  • Excess of Current assets over Current liabilities
  • Effective utilisation of assets and repayment of principal of long debt

Answer :Number of times the company's surplus generation cover the payment of interest and repayment of principal of long debt

JAIIB Accounting and Finance for Bankers Mock Tests Set 12

The purpose of mortgage is


Options are :

  • To transfer the property at the compulsion of Registrar of Assurances
  • To transfer of interest in securing a debt or obligation
  • To possess the ownership of others property
  • None of the above

Answer :To transfer of interest in securing a debt or obligation

According to Official Language Rules 1976, Gujrat comes, under which 


Options are :

  • A&B region
  • A region
  • Not applicable
  • C region
  • B region

Answer :B region

Bills drawn in respect of goods delivered by parties to various Government / Semi - Government Departments are known as


Options are :

  • Government Bills
  • None of these
  • Supply Bills
  • Usance Bills
  • Accommodation Bills

Answer :Supply Bills

JAIIB Accounting and Finance for Bankers Mock Tests Set 13

To avoid operation of rule in Clayton's case a banker should rule-­off the account which is overdrawn and open a fresh account for further transaction when:

 


Options are :

  • The bank receives notice of death or insolvency, of a partner or a joint account holder
  • None of the above
  • A new partner is admitted to a Partnership firm
  • There is a change in the board of directors of a company

Answer :The bank receives notice of death or insolvency, of a partner or a joint account holder

Your branch had opened a Letter of Credit on behalf of your valued customer. Now your customer approaches you and informs that he has come to know from reliable sources that the exporter has shipped poor quality / sub standard goods and requests you not to reimburse the amount of the bills drawn under LC. How will you handle the situation?


Options are :

  • The bank will accept the instructions of the customer provided the customer furnishes stamped letter of indemnity
  • The bank will straight away oblige the valued customer. No bills will be accepted for negotiation
  • The bank will firmly but politely decline the request although the applicant of LC can revoke it; and can also ask the issuing bank not to negotiate bills
  • Banks deal with documents and not in goods. As such, if the documents are in order and there is no discrepancy the bank is bound to reimburse the amount to the negotiating bank. In this case the request of the customer will not be honoured

Answer :Banks deal with documents and not in goods. As such, if the documents are in order and there is no discrepancy the bank is bound to reimburse the amount to the negotiating bank. In this case the request of the customer will not be honoured

What is the meaning of 'Executor'? 


Options are :

  • A beneficiary mentioned in the 'Will' but does not want the benefit
  • A person appointed by judicial Court to manage the properties of the deceased
  • None of these
  • A person appointed by the Court to realise the assets of the deceased
  • A person named in the 'Will' to manage the properties of the deceased

Answer :A person named in the 'Will' to manage the properties of the deceased

JAIIB Accounting and Finance for Bankers Mock Tests Set 14

A Banker can exercise the right of set.off only In respect of


Options are :

  • Customer's contingent liabilities
  • Debts due and determined
  • The money deposited by the customers for specific purpose.
  • Future debts

Answer :Debts due and determined

Which of the statements are true in connection with right of set-off with regards to banks 


Options are :

  • It is .the banker's discretion to exercise right of set-off & whole Bank constitutes one entity
  • (b) and (d)
  • It is applicable to contingent debts
  • It is applicable in the branch, where the accounts exists.
  • It is applicable when the banker customer relation is that of debtor­ creditor

Answer :(b) and (d)

Recovery certificate issued by president of Debt Recovery Tribunal is routed through:


Options are :

  • Arbitrator
  • Recovery Officer
  • Law Officer
  • Administrator

Answer :Recovery Officer

JAIIB Accounting and Finance for Bankers Mock Tests Set 15

A blind person, running a vegetable shop, approaches your branch to open a Current account in the name of his shop. Your branch refuses to open the account saying that blind person cannot read the bank documents and cannot understand the implications of transactions. What is the legal position of the Bank in refusing to open Current account?


Options are :

  • The blind person will be asked to open the Current account but grant Power I of Attorney to his son or daughter or wife who should be literate.
  • Bank has wrongfully refused to open the account, because every person who is competent to contract can open a bank account
  • No Current account will be opened in the name of blind person, even if he is engaged in business
  • The blind person will be advised to appoint a manager through Power of Attorney. The Current account will then be operated by the manager on behalf of a blind person.
  • none of these

Answer :The blind person will be asked to open the Current account but grant Power I of Attorney to his son or daughter or wife who should be literate.

Premium on Forward rate is advantageous to:


Options are :

  • Trader Importer
  • Importer
  • Merchant Importer
  • Exporter

Answer :Exporter

Limitation period on as honoured foreign bill is three years where protest has been made and notice Is given. This period will commence 


Options are :

  • None of the above
  • The date of noting
  • When the notice is given
  • The date of dishonour
  • The date of protesting

Answer :When the notice is given

JAIIB Accounting and Finance for Bankers Mock Tests Set 2

Punjab National Bank sanctioned clean overdraft to MIs Lara Dutta and Co. for' which demand promissory note was signed by the borrowers. However, through oversight, rate of Interest column was left blank. Subsequently, the overdraft account became Irregular and was recalled. Since MIs Lara Dutta and Co, did not pay the amount, the bank flied legal suit against the borrowers. During the course of proceedings, the borrower agreed to repay the principal amount and contended that bank sanctioned overdraft without charging any rate of interest. What Is the legal position of the bank?


Options are :

  • The court has discretion to award any amount of Interest at any reasonable rate because Interest was omitted to be mentioned In the documents
  • The bank is not authorized to claim Interest because interest clause was left blank in the Demand Promissory Note
  • Banks rate is the rate which will be awarded by the court as a matter of grace.
  • If no rate of Interest is agreed on the negotiable instrument then, 18% per annum Is payable by the borrower

Answer :If no rate of Interest is agreed on the negotiable instrument then, 18% per annum Is payable by the borrower

In case of garnishee order, when a partner of a firm is a judgement debtor, the account(s), which can be attached, are


Options are :

  • Personal account of partner partner
  • None of above
  • Other partners a/c also ormal'> is attached
  • Both his personal & partnership a/c is attached
  • Partners are jointly and severally liable as such the balance in the partnership a/c is only attached

Answer :Personal account of partner partner

Forfeiting refers to:

 


Options are :

  • Discounting of export bill without recourse to the seller
  • None of these
  • Discounting of export bill with recourse to the seller
  • Forfeit of shares

Answer :Discounting of export bill without recourse to the seller

JAIIB Accounting and Finance for Bankers Mock Tests Set 3

A minor has drawn a cheque In favour of Band B endorsed It to C and C to D and ultimately D endorsed It to E. Now E became the holder In due course and deposited the cheque In his account. The cheque was returned with the reason 'Insufficient balance In the account'. E, In' the capacity of holder In due course, gave the notice to D and demanded the money but he refused 'to make the payment saying that the drawer of the cheque Is a minor. Therefore, he Is not liable. His contention is that in case of return of the cheque, the ultimate liability II that of the drawer, and the drawer being a minor, he hi' no capacity to contract. What 18 the legal position of D?


Options are :

  • None of these
  • E can sue the guardian/natural guardian for recovery of the amount of the cheque, which has been dishonoured
  • D Is right. The drawer of the cheque Is the only person liable on the cheque. The drawer is minor and, therefore, the drawer cannot be sued. E has to bear the loss
  • A minor can be a drawer of the negotiable Instrument but he Is not personally liable on it. As the drawer Is minor, he Is not liable; the payee of the Instrument will be treated as drawer, and he, in his capacity of holder in due course, can demand the money from any of the previous parties. In the present case, he can demand money wrong and he will have to make payment to holder In due course and, thereafter, he can demand the money from any of the previous parties upto B i.e. the first payee. Even though A is the drawer, but being minor, he is not liable.
  • A, the minor, drawer of cheque can be sued under special circumstances In juvenile court

Answer :None of these

Garnishee Order attaches debts due or accruing due. This means


Options are :

  • None of these
  • Loans payable by the customer to Bank
  • Deposits payable on demand and payable at fixed future date
  • Credit balances in cash credit account

Answer :Deposits payable on demand and payable at fixed future date

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