Mock TestJAIIB Mock Test PPB Mock Test 100 MCQ (set-01)- JAIIB By gyanedu15 - June 26, 2021 0 36 Facebook Twitter Pinterest WhatsApp Welcome to your Principles And Practices of Banking Set-01 (100 MCQ)- JAIIB 1. If a banker allows an advance by keeping 25% margin and the amount of loan is Rs.1 lac, the value of security would beRs.1.25 lacRs.1.33 lacRs.1.50 lacRs.1 lacNone of the above 2. Collateral security & margin in loan to agriculture exempted for loanUp to Rs.10000Up to Rs.15000Up to Rs.25000Up to Rs.100000Discretion of the bank 3. Which of the following is the regulator and supervisor of depositoriesIRDARBISEBIPPFDA 4. What is the maximum extent of investment in plant & machinery for MSE ancillary unitsRs.250 lacRs.300 lacRs.500 lacRs.750 lacRs.1000 lac 5. The primary dealers deal mainly with which of the followingShares and debenturesGovt. securitiesMutual fund unitsAll the above 6. A firm has been allowed demand loan but it has not carried any operations in the account after disbursement of the full amount. What is the limitation period for this demand loan3 years from date of last withdrawal in the account3 years from date of last debit of interest in the account3 years from date of documentsA to c, whichever is earlierA to c, whichever is later 7. Inspection and processing fee in case of priority sector can be recovered if the amount of advance isRs.10000 or moreRs.25000 or moreRs.50000 or moreMore than Rs.25000More than Rs.50000 8. Which of the following expansion does match to the abbreviationSSC- Special Credit ControlAds- Authorized dealersOMO- Opposite market OperationAll the above 9. Whenever RBI wants to reduce the liquidity in the banking system it can resort to which of the followingRepoReverse repoReduction in the CRRReduction in the SLR 10. Deposits and advances of a bank branch have declined and the management of the bank wants to know the reasons for the same. This will fall under the purview ofMarket intelligenceMarketing technology systemTaking the required steps for effective marketing of their productsMarketing research systemAll the above 11. Federal reserve Board is the regulator of banking system inIndiaEuropeUnited StatesBritain 12. A loan secured by mortgage of immovable property is repayable on demand. The period of limitation in this case will beThree years12 years from date of mortgage deed3 years from date of mortgage deedNone of the above 13. Lahiri Committee Recommendation relate to which of the followingIssue of units by Mutual FundsIssue of Depository ReceiptsIssue of Participation Certificates by BanksIssue of Participatory notes by FIIs 14. Depository receipts are traded atStock exchanges of the same country in which the listed company issued the depository receiptStock exchanges of a country other than in which the listed company issued the depository receiptStock exchanges of any country including in which the listed company issued the depository receiptNone of the above 15. Mr. Akash Khanna is having his personal saving account with United Bank’s Chandigarh branch. He is also the sole trustee of Khanna Charitable Trust and operates the account of the trust which of also maintained with the bank. In connection with an important personal work he proposes to proceed abroad for 6 months and seeks your guidance for smooth operations in the accountsHe can give mandate in favour of some of his friend or relative for operations in the accountsHe can execute a power of attorney in favour of a known person for operations in both the accountsHe can give mandate or power of attorney for his personal accountHe cannot delegate the powers to any one in case of trust account and could leave some cheque leaves property signed for use in case of trust accountC and d 16. The process of segregation of ownership and trading rights of the members in a stock exchange is calledMutualizationDemutualizationRematerializationDematerialization 17. What is the maximum extent up to which the foreign institutional investors can invest in the stock exchanges in India24%26%. 49%74% 18. The _____ shares are the shares on which the dividend accumulates if it remains unpaid for a particular yearConvertible preference sharesCumulative preference sharesParticipatory preference sharesPreferred shares 19. If a bond is issued with the provision that the investor has option to replace the bond with equity at a fixed price, it is calledCoupon bondConvertible bondPreference bondZero coupon bond 20. Which of the following paves the way for listing and trading of the issuer company’s securities. Whose securities are already not listed on the stock exchangeinitial public offerinFurther public offeringBonus issueRights issue 21. . When a company issues shares to a select group of investor which is neither a public issue nor a rights issue, it is calledBonus issueRights issuePrivate placementQualified institutional placement 22. Which of the following is not correct in respect of targets within priority sectorWeaker section target for Indian banks is 25% of priority sectorMicro enterprises credit target is 7.5% of ANBCExport credit is 12% of ANBC for Indian banksAgriculture credit target is 45% of priority sector credit for Indian banks 23. The concept of ‘discovered price’ is used, in the context ofRights issueInitial public issueBook building issueBonus issue 24. . In which of the following types of fund, the investment is made exclusively in govt. securitiesLiquid fundsGilt fundsSector specific fundIndex fund 25. In the ______, the subscription and repurchase is available on a continuous basisGrowth fundOpen ended fundClose ended fundDebt oriented fund 26. The legal set up of a mutual fund is in the form of a a. Joint stock companyJoint stock companyTrustPartnership firmLimited liability partnership 27. When investment is made in other schemes of the same or different mutual funds, such fund is calledIndex fundGilt fundFund of fundsMutual fund 28. Which of the following statement is correct regarding premium on life insurance policiesThe premium rates for with profit policy are higher than the premium for without profit policyThe premium rates for with profit policy are lower than the premium for without profit policyThe premium rates for with profit policy are equal than the premium for without profit policyNone of the statement is correct 29. Which of the statement is correctTo have tight control over insurance companies and ensure consumer protectionTo promote market efficiency and to develop insurance marketTo promote insurance market efficiency and ensure consumer protectionAll the above 30. Which of the following transactions is backed by a letter of creditFactoringForfaitingSecuritizationLeasing 31. Which of the following guarantees, is not a financial guaranteeBank guarantee for supply of goods on credit basisBank guarantee in favour of customs authoritiesBank guarantee in favour of tax authoritiesNone of the above 32. The cases of deceased depositors where the claims have been received and are pending beyond the stipulated period are required to be reported to which of the followingBoard of Directors of the bankOmbudsmanReserve Bank of IndiaCustomer Service Committee of the BoardAll the above 33. . Which of the following can be taken as part of Off-balance sheet itemsTake out finance in the books of the taking over institutionOutstanding foreign exchange contractsOpen position in goldAll the above 34. Sales of an MSE unit for the previous year were Rs.200 lac. These are projected at Rws.300 lac for next year. As per Nayak Committee, the level of minimum bank working capital limits to be sanctioned would beRs.40 lacRs.60 lacRs.20 lacRs.100 lac 35. A letter of credit is defined in which of the followingIndian Contract ActCompanies ActPayment and Settlement System ActNone of these 36. The forfeiter is an intermediary betweenExporter’s bank and importerImporter’s bank and exporterImporter and exporterExporter & his bank and importer & his bank 37. The process of maintenance of account books, discounting of bills and collection of bills on due date is called by a person other than by the sellerSecuritizationFactoringForfaitingTake out finance 38. In a factoring transaction, where the factor retains the right to recover the amount from seller, if payment is not recovered from the buyer of goods, is calledWithout recourse factoringWith recourse factoringAdvance factoringBack factoring 39. Credit risk does not take form ofBank guaranteesTreasury operationsCross border exposureEquity price change 40. Credit risk emanates from a bank’s dealing withIndividualsCorporatesBanksAny of the above 41. . Market risk takes the form of which of the followingLC issued by a bankForeign exchange ratesError committed by a staff memberAny of the above 42. Under Basel -2, the supervisory review process is covered byPillar-1Pillar-2Pillar-3None of these 43. The securitization transactions are covered under _____risk, in the Basel-2 frameworkCredit riskMarket riskOperational riskLiquidity risk 44. A bank has risk weighted assets of Rs.1000 cr and it has undisclosed reserves of Rs.30 cr. What is the maximum amount of such reserves that can be included Tier-2 capitalRs.90 crRs.30 crRs.12.50 crRs.7.50 cr 45. A bank has revaluation reserves of Rs.300 cr what amount can be included in the Tier 2 capitalRs.300 crRs.165 crRs.135 crRs.30 cr 46. Subordinated debt can be included in Tier-2 capital fund, only where it is with an original maturity ofMax 10 yearsMin 10 yearsMax 5 yearsMin 5 years 47. . Bank – B has subordinated debt with remaining maturity of 17 months. These ne included in Tier-2 capital fund at ______discount80%60%40%20% 48. Bank-A has subordinated debt of original maturity of 7 years and remaining maturity period of 8 months. If the value of such debts is Rs.100 cr, what amount will be taken in Tier-2 capital fundRs.100 crRs.60 crRs.20 crNil 49. Which of the following is not part of operational risk under Basel-2 frameworkStaff errorFailed systemChange in interest ratesBreak –down of internal controls 50. Bank A and Bank B have been combined into a single bank. Where bank A survived and Bank B lost its corporate identity. This is calledAllianceMergerAcquisitionConsolidation 51. Fair Practice Code for lenders is a set of codes which banks are required to follow while dealing with borrowers. This code has been on the insistence of Indian industry after notification of which of the followingSARFAESI Act 2002RDDB Act 1993Legal Services Authority Act 1987None of the above 52. As per fair Practice Code for lenders, bankers should be constructive with a view to taking care of any lender-related genuine difficulty that borrower may face, for loans up to Rs.____Rs.25000Rs.1 lacRs.2 lacRs.5 lac 53. As per fair Practice Code for lenders, if a bank receives request from borrower for transfer of his loan account to another bank, the bank is to convey its consent objection within ______ from date of receipt of request30 days21 days15 days10 days 54. The Banking Codes and Standards Board of India was constituted on the recommendations of a Committee under Chairmanship of Sh_____SS TaraporeTalwarGoiporiaNarasimham 55. A bank has acquired an immovable property but it has not been able to dispose it of within 7 years. What remedy is available to the bankIt can seek Central Govt. permission which is available for 4 yearsIt has to seek State Govt. permission where it is located which has powers to extend the period of seven years by 5 yearsIt can seek RBI permission which has authority to extend it by 5 yearsIt can seek RBI and Company law Board PermissionBank will have to pay penalty for contravention of Statutory directives 56. Regional rural banks re licenced for banking business underA special statuteCompanies ActCooperative Societies ActBanking regulation Act 57. To take care of temporary liquidity problems of central and state govt., what kind of loan is given by RBITreasury billsDated securitiesShort duration bondsWays and means advanceAll the above 58. Section 7(1) of RBI Act concerns with which of the following aspectsRBI authority to regulate the banksNABARD authority to regulate RRBsGovt. authority to issued directions to RBIRBI authority to issue directions to banks in IndiaConstitution of Board of Directors of banks 59. If an Indian bank has place of business in one state only and has office in Mumbai or Kolkata, what is true regard to the amount of minimum capitalRs.5 lacRs.5 lac + Rs.25000 for each place of business outside Mumbai or kolkataTotal amount not exceeding Rs.10 lacB and cB and c 60. What is the amount of ceiling on payment of brokerage or commission or discount, or remuneration on sale of shares by a banking company1% of the authorized capital2% of the issued capital2.5% of the paid value of the shares5% of the subscribed share capitalThere is no ceiling 61. What %age of directors in a bank should have specialized knowledge10%24%40%51%75% 62. When a chairman of managing director is removed from his post, he ceases to be a director and cannot be appointed as director during the next ______years2 years3 years4 years5 years8 years 63. What is the requirement u/s 25 of b R Act, to be fulfilled by the banks in IndiaBanks are to maintain 75% of the demand and time liabilities as assets in IndiaThese assets would be there as on last Friday of each quarterIf such Friday is holiday, the preceding working day would be deemed to the relevant dayQuarter for the above purpose is of 3 monthsAll the above 64. Which of the following is not a correct statementOnly scheduled banks are to maintain cash reserve u/s 42 of RBI ActNon- scheduled banks are to maintain cash reserve u/s 18 or B R ActAdditional cash reserve can be prescribed to be kept by Central GovtInterest is required to paid by RBI on cash balances maintained with it u/s 24 of B R ActBanking companies are required to maintain reserve fund u/s 17 of B R Act 65. Where a bank is prohibited to accept the deposit despite prohibition for not accepting the depositing the deposits, what is the punishmentFine to extent of 20% of the amount of deposit, so acceptedFine to extent of 50% of the amount of deposit, so acceptedFine to extent of 100% of the amount of deposit, so acceptedFine to extent of 200% of the amount of deposit, so acceptedDeposit has to be returned back 66. A banking company fails to produce books, accounts and documents which it is bound to furnish under the provisions of RBI Act, what is the penalty as per Banking Law Amendment Act 2012It can be fined up to Rs.200000It can be fined up to Rs.5000If offence continues additional fine could be Rs.50000A and cB and c 67. A cheque of Rs.10000 issued by Ram Chander, one of your account holders, in favour of Shivaji is stolen by one RadheyShyam who forges Shivaji’s signatures and endorses it in favour of Ganeshilal, who obtain the payment from the bank. In this situation what would be bank’s positionBank will be liable for the forgeryBank will be liable only if the drawer proves that the instrument is forgedBank will not be liable if Ganeshi Lal agrees to refund the amountBank will get protection available to it under Section 85(1) NI Act and will not be liable for the payment made 68. . Your customer issues a cheque for Rs.10000 in discharge of his liability towards Mr. Shayam Prasad or order, who endorses the same in favour of Mr. Sita Ram In blank. This chequeCannot be endorsed further as the blank endorsement restricts further negotiationCan be negotiated by Mr. Sita Ram without endorsement by him and by the mere deliveryCan be negotiated further by Mr. Sita ram full endorsement by him followed be deliveryCan be endorsed by him in blank onlyNone of the above 69. A saving bank customer of Modern Bank issues a chaque of Rs.1500 in favour of M/s swastic Enterprises or order. The cheque is paid by the bank on presentation through clearing with endorsement from the payee as ‘Svastika Enterprises’. The endorsement is also confirmed by the collecting bank. The drawer claims that the payment has not been made in due course and claims refund of the amountThis is a payment on the guarantee by the collecting bank due to which paying bank’s position is safeThe cheque is of a small amount,. Hence the bank should refund the moneyIf customer is valuable, the customer’s request should be acceptedEndorsement is irregular due to which the paying bank is not protected under the provisions of Section 85 of NI ActAll the above 70. A is holder of a cheque who endorses sans recourse to B and B to c and C to D who endorses it to E. cheque is dishonoredE can claim from B,C and DE cannot claim from any oneE can claim from allE can claim from AA And c 71. What is true with regard the liability of a director of a company , in case of dishonor of cheque, issued by a companyAll the directors are liableNominated directors also liableDirectors responsible for conduct of the business of the company including managing directorOnly those directors who are responsible for accounts maintenance of the companyAll the above 72. A customer of your branch Sham, deposits a cheque, which he steals from another person named Sham. Your branch collects this cheque (on which te customer is having a defective title) without being aware about the defectCollecting bank is negligentCollecting bank will get protection if it has complied the requirement u/s 131Collecting bank is responsible for conversionCollecting bank is negligent but will get protectionNone of the above 73. . If the holder of a cheque removes the crossing in such a way so that the same is not easily detectable (with naked eye) and get the payment after presenting it at counter of the drawee bank will get protection u/s … of NI Act8911813187 74. What is the amount of bank draft that can be issued by banks in cash under KYC directives of RBIRs.50000 or lessRs.50000 or moreLess than Rs.50000More than Rs.50000More than Rs.1 lac 75. What is the time period during which the record of transactions is to be kept by banks under KYC directives15 years12 years5 years10 yearsTime frame prescribed by Central Govt 76. Popular Bank sanctioned a loan in the name of B, which he had not been repaying. The bank has come to know that B is having an FDR account with national Bank in the same city. At the time of maturity of the term deposit , letter is received by national Bank from Popular Bank to remit money to credit in the loan accountThe amount would be remitted by the National Bank to Popular BankIf indemnity bond id executed by Popular Bank, the amount can be remittedIf consent is given by the depositor and his nominee, the amount can be remittedThe amount cannot be remitted, as right of set-off is not available to Popular BankNone of the above 77. Mr. X is maintaining few accounts with Popular bank with its Trichur branch. The bank branch receives an attachment order. Which of the following accounts, will be attached by the orderOverdraft limit of rs.0.30 lac, in which there is nominal debit balanceOverdraft limit against shares of a company, where there is some unavailed balance availableAmount of term deposit of rs.1 lac minus the balance including interest in the overdraft li limit of Rs.0.50 lac against this Term DepositOverdraft limit of rs.0.40 lac against Gold ornamentsAll the above 78. The net asset value of a mutual fund investment is calculated as under(market value of the securities / no. of units on a particular day) – the scheme expensesMarket value of the securities less the scheme expenses / no. of units on a particular dayMarket value of the securities / no. of units on a particular dayMarket value of the securities plus the scheme expenses / no. of units on a particular day 79. A cheque drawn by a customer is presented for payment after a Garnishee order has been served on the account, the cheque will be returned with the reasonAccount garnishedAccount attached by the courtOperations on the account stopped by the courtGarnishee order received 80. A bank authorized by the issuing company to issue GDR against issue of foreign currency convertible bonds or ordinary shares for the issuing company, is calledCustodian bankDepositoryOverseas depository bankMandated bank 81. Universal Bank has granted cash credit limit of rs.10 lac to M/s Kala traders, a partnership firm. The account is showing a debit balance of rs.9.50 lac when the notice is received about the insolvency of one of the partners, which among the following steps should be initiated by the bank to safeguard its interestAccount should be recalled and party be asked to adjust to adjust the accountOperations in the account to be stopped and balance confirmation letter to be obtained from all the partnersOperations in the account to be stopped and notice of demand to be issued on the remaining partnersOperations in the account to be stopped and notice of demand to be issued on the remaining partnersC and d above 82. A partnership firm of XY&Z has been adjudged insolvent and its loan account is showing a debit balance of Rs.3 lac. Its partner Y is having a saving bank account in which there is balance of Rs.1.50 lacThe balance in partner’s account cannot be utilised for payment of dues of an insolvent firmThe balance in partner’s personal account cannot be utilised as that balance belongs to official assigneeThe balance in partner’s account can be utilised by exercising the right of set off sue to his joint and several liabilityThe balance can be utilised before it is objected to by the partnerAny of the above 83. The provisions in respect of removal on ceiling on borrowing powers of the Board of a public limited company or subsidiary of a public limited company, are given in Section … of the Companies Act 201312529318013445(e) 84. A cheque issued by a director of a Limited Company is presented for payment after death of the director which the bank pays, But the company raises the claim on the plea that bank cannot pay such cheque after death of the directorBank cannot pay the cheque as the drawer expiredBank can pay the cheque as the company is still a legally competent person to contract signed as agent of the companyBank should contact the Co. because loss will be of the company is case of disputeB and cNone of the above 85. In case of deferred payment guarantee. Normally _____ advance payment is made by the buyer of machinery to the supplier of the machinery, which is treated as margin by the bank5% to 10%5% to 30%10% to 15%20% to 30% 86. Current assets of a company are Rs.800 lac and other current liabilities Rs.80 lac.. if the amount of net working capital is Rs.170 lac what will be amount of excess borrowing, as per 2nd method of lendingRs.120 lacRs.80 lacRs.50 lacRs.30 lac 87. Your branch has sanctioned cash limit of Rs.12 lac to M/s United Pharmacy. As at the close of July 31, it has been carrying stocks worth Rs.9 lac, sundry creditors of Rs.3 lac and book debts of Rs.6 lac. Bank has prescribed a margin of 25% on stocks and 30% on book debts, what is the maximum amount that can be withdrawn in the cash credit limitRs.8.70 lacRs.8.30 lacRs.12 lacRs.6.75 lacRs.7.25 lac 88. The no.of which component of Central Board of Directors of RBI, does not matchGovernor-1Dy. Governors-6Directors-15None of the above 89. In the balance sheet of a bank, the off-balance sheet items are shownAssetsLiabilityAsset or liability as per its natureNotes to the balance sheet 90. To make the cost of credit costlier, which of the following is done by RBIDecrease in bank rateIncrease in repo rateIncrease in SLRAll the above 91. Foreign banks are to deposit in SEDF with SIDBI, the shortfall in respect ofExport advances target of 12%Overall priority sector target of 40%Micro & small enterprises target of 7.5%A and bA, b and c 92. The issue of and servicing of govt. debt, is management byCommercial BanksPublic Sector BankReserve BankGovt. itself 93. Which of the following statement is correct in the context of red herring prospectusThe price is mentioned in this prospectusThe no. of shares being offered is mentioned in this prospectusThe amount of issue is mentioned in this prospectusDetails or price, no of shares and amount of issue is not mentioned in this prospectus 94. What is the maximum extent up to which a single investor can hold shares in an Indian stock exchange1%2%5%10% 95. ______ is a tax levied on all transactions code on the stock exchange at rates prescribed by Central Govt. from time to timeTransactions taxStock exchange transactions taxStock exchange transactions taxSecurities tax 96. Who approves the appointment of the Chief Executive officer (CEO) of a private bankReserve BankBoard of the Bank concerned bankIf it is a listed bank, then SEBICentral Govt. in all cases 97. Which of the following organizations maintain the shares of companies in dematerialization formatSEBIDepositoriesRegistrars to the issueMutual funds 98. Which of the following Act, is meant to regulate the Indian Banking SystemNegotiable Instrument Act, Banking Regulation Act, Companies ARBI Act, Banking Regulation Act, Companies ActBanking Regulation Act, Prevention of Money laundering ActRBI Act, Banking Regulation Act 99. A _______ is a type of transferable financial instrument which is traded at local stock exchange of a country but represents a security (usually, in the form of equity) which is issued by a foreign publicly listed companyAmerican Depository receiptDepository ReceiptGlobal Depository ReceiptForeign Convertible Bond 100. The Urban Cooperative Banks are regulated byRBINABARDRegistrar of Coop Societies of the State GovtSEBI Time is Up!