Q1. Which of the following statements is true?
a) The licence to open branches of bank is granted by Board of Directors of that Bank
b) There is no need of licenses to open branch of a bank
c) A licence to open a branch is issued by the Central Government
d) A licence to open a branch is issued by the Reserve Bank of India under the provisions of Banking Regulation Act, 1949
Q2. The important condition for granting licence of banking companies is?
a) Banking company need not plan to pay for future depositors
b) Banking company can plan for its capital structure once the licence is granted
c) The business undertaken by the banking company should not frustrate the interest of public
d) The banking company can undertake business other than banking with the permission of annual general body
Q3. Who of the following is not a party to the IPO?
a) Registrar of Issue
b) Investment Banker
c) Advertisement Agency
d) Registrar of Companies
Q4. Which of the following is not shown as an asset in the balance sheet of a Bank?
a) Investments
b) Advances
c) Cash Balances with other banks
d) Borrowings
Q5. The credit policy of a bank does not consists of?
a) Lending policies
b) Quality control
c) Loan product mix
d) Advertising of loan products
Q6. Which of the following is a function of the agent bank relating to flow of money in the process of loan syndication?
a) Receiving notices relating to cancellation of any part of the loan
b) Calling of loans in the event of default
c) Receiving the fee from the borrower and distributing among the participating banks
d) Receiving notices relating to transfers of banks
Q7. Which of the following is the parameter to recognize the SSI unit as sick unit?
a) The erosion in the net-worth due to accumulated losses is up to 25% of its net worth during the previous account year
b) The erosion in the net-worth due to accumulated losses is up to 50% of its net worth during the previous account year.
c) The unit should have been in commercial production for at least five years
d) Lack of updations in technological development
Q8. Which of the following is not the service provided by the Small Industries Service Institute?
a) Providing entrepreneurship development programs
b) Developmental efforts
c) Export promotion and liaison activities
d) Financial support
Q9. Service Area Approach (SAA) is associated with?
a) Rural and Semi-urban branches of commercial banks
b) Urban branches of commercial banks
c) Branches of commercial banks situated in metro cities
d) Development banks
Q10. Which of the following cannot be securitized?
a) Future rentals of a fishing boat
b) Hire purchase receivables
c) Demand drafts received by the banker during clearing
d) Future billings for an airline
Q11. Which of the following statements is true?
a) The special purpose vehicle (SPV) purchases the assets from the borrower directly during the securitization
b) The originator and obligor are the same persons in securitization process
c) Administrator collects the payments due from the obligor and passes it to the SPV and follows with defaulters
d) Mortgage based securitization provides high yields to the investor
Q12. The important feature of an anticipatory letter of credit is that?
a) The letter of credit can be used as back- to- back letters of credit
b) The beneficiary under the letter of credit may receive payment even at the pre-shipment stage
c) The beneficiary under the letter of credit may receive payment even at the post-shipment stage
d) The cash advance is not permitted against such letter of credits
Q13. The Shipping guarantee is a?
a) Type of a letter of credit
b) Guarantee issued by the ship captain to the purchaser
c) Guarantee issued to the borrower towards the loan granted by the shipping company
d) Deferred payment guarantee issued by a banker at the request of the consignee when the documents are not received and goods are received, for facilitating the delivery of goods.
Q14. Which of the following statements is true?
a) The charge card is a credit instrument
b) Under this facility the cardholders need to pay amount within ten installments
c) Cardholder has to pay the 100% of the purchase amount within 30 days of purchase
d) The charge card shall have revolving credit
Q15. Which of the following is not augmented feature of a credit card?
a) Personal accident insurance
b) Cash withdrawals
c) Add-on facility
d) Issue of deferred guarantee
Q16. Which of the following is the disadvantage of going for public issue?
a) Liquidity to existing shares
b) Increase in visibility and reputation to the company
c) Better pricing and placement with new investors
d) Need to make continuous disclosures
Q17. Which of the following is not a criterion to select the Investment Bankers?
a) No professional memberships or incorporations are required
b) General reputation in the market
c) Good rapport with market intermediaries
d) Distribution net work of the organization
Q18. Which of the following is not an asset of a bank?
a) Notes and small coins
b) Overdue recurring deposits
c) Short term loans
d) Staff advances
Q19. The banking company has restriction to sanction loan to?
a) Directors of the bank
b) Staff working in the bank
c) Students going abroad
d) Professionals
Q20. Which of the following is a non-depository institution?
a) Credit unions
b) Commercial banks
c) Mutual funds
d) Regional rural banks
Q21. The disadvantage associated with leasing company is?
a) Low costs
b) Flexibility in payments
c) Eliminates the risk of obsolescence
d) High competitions because of entry to all financial institutions
Q22. Which of the following theory is associated with the financial system in the economic growth?
a) Retributive theory
b) Reformative theory
c) Financial repression theory
d) Jurisdictional theory
Q23.Which of the following is not a financial intermediary in the financial markets?
a) Pension funds
b) Credit unions
c) Life insurance companies
d) Small scale service institute.
Q24 Which of the following is not a function of a commercial bank?
a) Registration of charges and mortgages
b) Transactions services
c) Asset transaction
d) Real-time Gross Settlement
Q25. Which of the following is one of the three pillars of new Basel Capital Award?
a) Market competitions
b) Market rapport
c) Market discipline
d) International market relations
Q26. The interest in savings bank accounts of a bank is calculated on?
a) Minimum amount of balance that is maintained in the account in between 10th and the last day of month
b) Maximum amount of balance that is maintained in the account in between 10th and the last of month
c) Minimum amount of balance that is maintained in the account in between 1st and the last day of month
d) Maximum amount of balance that is maintained in the account in between 1st and the last of month
Q27. The credit policy of a bank does not deal with?
a) Credit risk management
b) Documentation standards
c) Review and renewal of advances
d) Outstanding balances in deposit accounts
Q28. Issuing credit cards is a component of ?
a) Corporate banking
b) Rural banking
c) Retail banking
d) Micro finance
Q29. The origin of bank instruments can be traced to?
a) The priests and worship places of public deposits
b) Goldsmith receipts
c) Bonds issued by the British Government in India
d) Bank notes issued by Bank of Venice
Q30. Which of the following is not the function of commercial banks?
a) Providing transaction services
b) Intermediation in financial services
c) Providing transformation services
d) Regulating the issue of bank notes.
Q31 Which of the following is the most important challenge before the commercial bank?
a) Maintenance of foreign currency
b) Evaluating the need of the customers
c) Maintenance of SLR and CRR
d) Meet the technological revolution
Q32. The asset's side of balance sheet consists of ?
a) Cash balances with other banks
b) Fixed deposits of customers
c) Savings deposits
d) Recurring deposits
Q33. Which of the following is an income for a bank?
a) Depreciation on bank's property
b) Interest on inter bank borrowings
c) Profit on revaluation of investments
d) Provisions made on account of write-offs
Q34. Saving Bank Account can be opened in the name of ?
a) State text book printing corporations
b) District level housing cooperative societies
c) Communist Party of India
d) Aravind Samuel, Anurag Deepak and Amarish Sugandhi Jointly
Q35. The interest on recurring deposit is paid on the basis of ?
a) Simple interest calculated monthly basis
b) Simple interest on monthly products basis
c) Quarterly compounding
d) Interest calculated on daily products basis
Q36. Which of the following statements is true?
i. Term deposits are non-transaction deposits
ii. Cheques can be issued on short-term deposits
iii. All term deposits are interest bearing deposits
a) (i) only
b) (ii) only
c) (iii) only
d) (i) and (iii)
Q37. The credit policy laid down by the top management of a bank does not deal with?
a) Credit risk management
b) Pricing of the credit products
c) Appraisal of time and demand deposits
d) Documentation standards.
Q38. Which of the following factors is not required to be considered to analyze the repayment capacity of a borrower?
a) Working capital management
b) Personal educational qualifications
c) Financial leverage
d) Interest rate risk management
Q39. Which of the following is a facilitating service of core loan products of retail banking services?
a) Current or savings accounts
b) Legal services for documentation
c) Delivery of loan at promised time period
d) Flexibility in prepayment of loan
Q40. Which of the following is an most important advantage of retail banking on the resource side?
a) Consumer loans are low risk products
b) Innovative product development and disbursal
c) Increases the subsidiary business of a bank
d) Requires less efforts to market retail loan products
Q41. Lenders may not provide trade-offs to the borrowers on the basic term of consumer installment credit relating to?
a) Interest rate
b) Maturity of the loan
c) Maturity of the deposit
d) Quantum of finance
Q42. Which of the following is the risk associated with the retail banking?
a) Strong recovery strategy
b) Definite lending limits
c) Effective credit process and proposals
d) Inadequate risk pricing
Q43 The advantage of consortium finance is?
i. Speedy transactions and individual approach
ii. Involvement of huge amounts
iii. Use of expertise of all the banks
a) (i) only
b) (ii) only
c) (iii) only
d) (i), (ii) and (iii)
Q44 Which of the following is not a function of the agent bank in loan syndication?
a) Ensuring the compliance of conditions precedent under the loan agreement
b) Determining the LIBOR interest rate for each interest rate
c) Planning for future syndication of loans
d) Receiving notices relating to cancellation of any part of the loan
Q45. Which of the following is not a phase/step in the formation of loan syndication?
a) Finalization of supply agreement
b) Identify the needs of the borrower
c) Preparation of information memorandum
d) Invite other banks to participate
Q46. Which of the following statements is true?
a) SSI is an undertaking in which the investments in fixed assets in plant and machinery does not exceed one million
b) Small and medium enterprises both in size and shape are not homogenous in nature
c) The small and medium enterprises contribution towards the GDP is nominal
d) Small and medium enterprises do not support the large industries.
Q47. The Nayak Committee has suggested the turnover method for assessing the working capital and pegged it at?
a) 15% of the projected annual turnover, as working capital limit
b) 20% of the projected annual turnover, as working capital limit
c) 25% of the projected annual turnover, as working capital limit
d) 30% of the projected annual turnover, as working capital limit
Q48. Which of the following is not a part of the rehabilitation package granted for revival of sick industry?
a) Waiver of penal interests
b) Funding by sanctioning of term loans towards the unpaid installments of loans
c) Grant of additional working capital loans
d) Not demanding the promoters contribution towards the rehabilitation package
Q49. Service Area Approach is associated with?
a) Industrial finance
b) Microfinance
c) Rural finance
d) Consortium finance
Q50. Which of the following resources cannot be securitized?
a) Credit balances outstanding in cash credit accounts
b) Credit Card receivables
c) Hire purchase receivable
d) Mortgage in lieu of future payments
Punjab & Sind Bank Examination Question Papers - Financial Awareness
