Mock TestJAIIB Mock Test PPB Mock Test (100 MCQ) Set-02- JAIIB By gyanedu15 - June 27, 2021 0 32 Facebook Twitter Pinterest WhatsApp Welcome to your Principles & Practices of Banking(100MCQ) SET-02 - JAIIB Name Email 1. Banking operations in India are governed mainly by ________ Act and ______ Act and the regulator of banks _____.Banking Regulation Act, NI Act, RBIRBI Act, NI Act, RBIBanking Regulation Act, RBI Act, RBIBanking Regulation Act, RBI Act, SEBI 2. Banking means acceptance of _____ for the purpose of lending and _____u/s _____ of Banking Regulation Act. Deposits, investments, 6 (c) (i)Deposits, investments, 5 (b)Deposits, investments, 5 (c)Deposits, investments, 5 (d) 3. Which of the following is helping the banking system in sharing the information about the credit history of householdsBanking codes and standard Board of IndiaCredit Information Bureau India LimitedCRISILAll the above 4. A bank purchases a commercial complex from XYZ in realization of loan. What is the disposal period RBI discretion to extend the said disposal period u/s ______ of Banking Regulation Act7 years, 5 years, Sec 97 years, 7 years, Sec 95 years, 7 years, Sec 6 (1)5 years, 5 years, Sec 6 (1) 5. Private banks and foreign banks are regulated by ______ Act for their constitution Act and _____ Act for their business of BankingCompanies Act, NI Act, RBI ActNI Act, B R Act, RBI ActCompanies Act, B R Act, RBI ActCompanies Act, B R Act, NI Act 6. Which of the following cannot be included in value added services that are offered under wholesale banking by banksDerivative deskLetter of creditEmployee trustChannel financing 7. . U/s 22 of RBI Act, RBI (which of the following is not correct)Has authority to issue and manage currency of IndiaIssues bank notes and currency notesCan issue bank notes having denomination Rs.2 to Rs.10000The bank notes are legal tender at any place in India 8. Govt. regulates the banking system by affecting the decision making by RBI since (a) Govt. holds the entire share capital of RBI (b) Govt. can give direction to RBI u/s 7 (1) of RBI Act. (c) Govt. has absolute powers over the banking systemA to c all correctA and b only are correctB and c only are correctA and c only are correct 9. A ______ is a type of transferable financial instrument traded on a local stock exchange of a country but represents a security issue by a foreign publicly listed companyDepository receiptDerivativeOptionParticipatory notes 10. Any transfer of shares in a banking company which exceeds ____ % of paid up capital of the bank requires acknowledgment by _____ before registration of in the books of the company5%, SEBI5%, RB I10%, RBI10%, Company Law Board 11. Authorized capital of a nationalized bank cannot be less than Rs.______ cr100cr500c1000cr3000cr 12. Customer is defined as per provisions ofIndian Contract ActNegotiable instrument ActGeneral Clauses ActKYC Guidelines 13. A bank which is authorized by the issuing company to issue depository receipts against issue of foreign currency convertible depository receipts against issue of goreign currency convertible bonds or ordinary shares of the issuing company, is calledOverseas depository bankInland depository bankCustodian bankAuthorized bank 14. Bank’s obligation to pay the cheque drawn by the customer u/s 31 if NI act exists, In which of the following circumstancesWhen the amount in words and figures differsWhen there is notice of death of the customerWhen an attachment order has been receivedWhen the signatures of the drawer are genuine but differ 15. Bankers’ obligation to maintain secrecy of customer’s account is (which of the following is not correct):As per provision of Banking Companies (Acquisition & Transfer of Undertakings) Act 19670As per implied contract between bank and customerIt continues during currency of the account and also after closurenone of the above 16. Issue of securities in the primary market is subject to fulfillment of a no. of requirement stipulated bySEBIIRDARBIAll the above 17. Definition of the term ‘banking’ is as per Section 5 (b) of the which of the followingBanking Companies (Acquisition and transfer of Undertakings) ActBanking Regulation ActRBI ActNI Act 18. U/s 171 of Indian Contract Act, the general lien is available to (a) banker (b) wharfingers (c) factors (d) attorneys of High Court provided there is no agreement to the contraryA, b and d onlyB, c and d onlyA, b and c onlyA to d all 19. Which of the following statement regarding a broker is not trueHe is a member of stock exchangeHe is registered with SEBIA sub-broker is affiliated to a member of recognized stock exchange and registered with SEBINone of the above 20. First item on the debit side of the account is discharged reduced by the first item on the credit side in the chronological order as per which of the followingRule if appropriationRule in Clayton caseRight of set offBanker’s general lien 21. Which among the following is not an essential features of a mandateIt is given on a simple paperIt does not require registration with any Govt. authorityIn joint accounts and in partnership it should be signed by all account holders / all partnersIt should be properly stamped 22. A bond issued at a discount and repaid at its face value is called, a _______ bondsCoupon bondConvertible bondCommercial bondZero coupon bond 23. An attachment order of Rs.40000 on a partnership firm is received; whose current account shows a balance of Rs.4000. The individual accounts of the partners A,B and C are showing credit balance of Rs.20000, Rs.17000 and Rs.1250 respectively. To meet the payment stated in the order, how much amount will be payable from A’s accountRs.16250Rs.17750Rs.18750Rs.40000Rs.19750 24. Your branch receives a garnishee order. It attaches all sums owning or accruing due to Mr. Ashok and Mr. Anand. There is no account at the branch in the joint names of Mr. Ashok and Anand. But they maintain their individual accounts. Under these circumstancesThe court should be advised that there is no account in the joint names of Ashok and Mr. Anand. Hence, the garnishee order can not be given effect toThe garnishee order will attach the individual accounts of Mr.Ashok and Mr. Anand as they are jointly and severally liable for the joint debtThe matter should be referred to the court for clarificationSince the order is not applicable, the bank need not take any action thereon 25. Security receipt is issued by the _______ to a qualified institutional buyer in pursuance to a securitization programCentral GovtSecuritization CompaniesRated companiesAll the above 26. Which of the following instrument has three parties i.e.drawer, payee and drawee, to the instrumentBill of exchange and chequeBill of exchange and promissory notePromissory note and chequePromissory note and demand draft 27. Which of the following is not a feature of an ‘account payee crossing’It is defined as per Section 130 of NI ActIts payee is holder onlyIt can be endorsed and transferred any no. of timesAll the above 28. Which of the following is not a function of SEBITo regulate securities marketTo protect the interest to investors in securitiesTo promote the development of securities marketNone of the above 29. Which among the following is a false statementSignature of the payee or endorsee for negotiation of the cheque is called endorsementEndorsement can be only on the back side or separate sheet of paper called allongeA cheque can be endorsed for any number of timesEndorsement is possible on bill of exchange, promissory note and cheque 30. Which of the following endorsements match their descriptionPay to X Rs.10000 and Y Rs.2000 (the cheque is for Rs.12000)- partial endorsementPay to X only-restricted endorsementPay to X when he returns from UK-conditional endorsementPay to X without my responsibility – sans recourse endorsement 31. The mechanism for pooling resources from the public by issuing units to them and investing the funds, so collected in securities in accordance with objectives disclosed in an document, is calledPublic issueMutual fundSecuritizationInitial public offering 32. A cheque is a dated January 12,2016 and presented for payment by the payee on April 13,2016. The paying bank returns the cheque stating that it is stale. Which among the following is not correct in this connectionThe term ‘stale’ is defined in NI Act Section 138The cheque becomes stale after 3 months from date of its issueThe term ‘stale’ is used as a matter of practiceA stale cheque can be revalidated with fresh validity up to 3 months 33. A post-dated cheque is returned by the bank without payment because, the bank is exposed to the following risk (a) customer dies before date of the cheque (b) if garnishee order is received before date of the cheque (c) if payment is stopped by the drawer before date of the cheque (d) if another cheque is returned for insufficiency of funds, after date of the post-dated chequeA, b and c are correctA to d all are correctA, c and d only are correctB, c and d are correct 34. In a gilt fund, the mutual funds make investment inGovt. securitiesCorporate securitiesCorporate debtGovt. and corporate debt 35. Bank B made payment of a cheque with following endorsements. In which of these cases the payment will not be deemed to be a payment in due courseEndorsement by X the payee, in favour of Mr. Y and the cheque has not negotiable crossingEndorsement by X, to Y, Y to Z and Z to AEndorsement by Renu wife of Mr. Sunil Kumar, while the cheque is in favour of Mrs. Sunil KumarEndorsement by X the payee in favour of Mr. Y while the cheque is having payee’s account crossing 36. Bank B makes payment of the following cheque. For which of these the bank will not get protectionA cheque with one endorsement as forged endorsementA bearer cheque bearing an endorsement in favour of X while payment is received by Y without endorsement from XA cheque the amount of which has been filled by the payee and was left blank by the drawerA cheque having amount in words as Rs:five thousand while amount in figures was left blank 37. For collection of which of the following, the collecting bank will get protectionA cheque that does not bear any crossing before it is handed over to the bank. Bank puts its own stamp to present the cheque for clearingA cheque, as first deposit in the newly opened account after complying with KYC guidelinesA cheque written in two inks, two handwritings and two scriptsAll the above 38. The legal status of a mutual fund is in the form of aPartnership firmProprietorshipJoint stock companyTrust 39. Which of the following is not correct in the context of dishonor of cheque for insufficiency of fundsTo file the suit, holder is required to give a notice to drawer within 30 days of receipt of information about dishonorTo file the suit, the holder is to give notice to draw to make payment within 30 days of receipt of notice by drawerCourt can impose fine up to double the amount of cheque on the drawerDrawer can be imprisoned up to 2 years, if found guilty 40. In which of the following situations, the bank can favorably accommodate the customerMr. Suresh, a valued customer comes to obtain payment of a cheque drawn in his favour and crossed by him, by mistake and now demands cash paymentMr. Phadke, comes with a cheque in favour of his wife and crossed account payee, for credit to his account. His wife has endorsed the cheque in his favourA cheque dated June 12,2004 is presented for payment on dec 12,2004 as Dec 11,2004 was a SundayA cheque in which date, amount and payee’s name is left blank by the drawer and is completed by Mr. Dinesh, who demands its payment 41. Who fixes the insurance premium rates for some of the general insurance productsSEBIInsurance Regulatory & Development AuthorityTariff Advisory CommitteeAll the above 42. Obtaining introduction from the existing customer for opening a new deposit account is essential (a) to get protection u/s 131 of NI Act against conversion (b) to prevent money laundering (c) to comply with KYC directives of RBINone of the aboveA and b onlyB and c onlyA and c only 43. Which of the following correct with regard to a minorA minor is a person if less than 21 years of age where the guardian is appointed by a courtA minor can open a bank account under provisions of Indian Contract Act with the provision that no transaction should result in debit balance in his accountA minor can open a self operated bank account because he can draw a cheque and has been permitted to open the account by RBI alsoLoan given to minor for necessities is recoverable from him personally 44. Insurance policy taken by a business firm on the life of very important person to project the firm against financial loss, is calledMaster policyKeyman policyVIP Protection policyUmberrima fides 45. In the following situations, which decision taken by a bank is not correct, in case of an insolvent customerA cheque signed by the insolvent person as drawer is presented for payment and bank returns it unpaidInsolvent person comes to open a new deposit account and bank refuses to open the accountAn insolvent person comes as payee of a cheque and bank refuses ti pay to himNone of the above 46. To address customer grievances in respect of insurance contract on personal lives, there is an institution called_______:Insurance OmbudsmanInsurance regulatorInsurance IntermediaryInsurance Regulatory and development Authority 47. Karta in a HUF does not have which of the following authorityTo manage the business or propertyTo raise loan to run the family business and create charge on HUF assets to a secure such loanTo appoint agent that may be one of the coparceners or even outsideNone of the above 48. Which of the following is not a correct statement in the context of registration of a partnership firmProvisions for registration of a firm are u/s 58 of Indian Partnership ActRegistration of a firm is optional and not compulsoryIf a firm is not registered, neither it can file suit in its own name, nor anyone else can file suit on this firmIf a firm is registered, it can file suit in its own name and suit can be filed on the firm by others, whether registers or unregistered 49. The minimum capital to start a new Insurance company in India isRs.100crRs.75crRs.50crRs.10cr 50. Where a minor is admitted for benefit, in an existing firm (a) he has the authority to become partner on attaining majority (b) he has the right not to become partner on attaining majority (c) if he remains silent regarding whether to be partner of not to be, he is deemed to have not become partner (d) if he chooses to be a partner his liability begins from date of his becoming full-fledged partnersA, c and d are correctA, b and d are correctOnly a and b are correctOnly a and c are correct 51. A bank has to give loan to a company for which the company has given certified copy of Articles of Association . bank has doubt that the Articles of Association stands amended and the company has not given the amended copy. What source can be used by the bank to have copy of the amended documentsOther bank of the companySEBIRegistrar of CompaniesAny of the above 52. Borrowing powers of the Board of Directors of a company (which is not true)Are mentioned in the Articles of AssociationIf not mentioned , in the Articles, it is equal to paid up capital + reserves of the companyWhere board of directors does not have adequate powers, it has to approach the shareholders u/s 293 (d) (i)None of the above 53. If there is default of repayment by the buyer in case of factoring and the factor is able to recover the amount from the seller, it is calledNon- recourse factoringWithout recourse factoringRecourse factoringBills discounting 54. . Bank-B is maintaining account of a sports club which is operated by its Secretary and President jointly. Bank receives a notice (on Feb 10,2016) of death of the President on Jan 31,2016. Two cheques of Rs.5000 each dated Jan 12, 2016 and dated feb 02, 2016 are presented for payment on Feb 24,2016. The bank shallPass both the cheques as these are signed by them in the capacity of an agentReturn both the cheques as the death of one of the drawers has taken placePass the 1st cheque and return the 2nd chequePass the 2nd cheque and return the 1st cheque 55. . A charitable trust has a current account with your bank and now it wants to raise a loan for furtherance of its activities. The loan can be allowedIf the trustee decide and pass a resolution to that effectIf the current account operating trustee make a request and offer his guarantee alsoIf the Trust Deed provides for that the loanThe loan will not be allowed to a trust 56. When the seller of machinery or other capital equipment is agreeable to extend long term credit to the buyer of the machinery, on the guarantee of a bank, such guarantee is calledSpecific guaranteeDeferred payment guaranteeParticular guaranteePerformance guarantee 57. A customer of the bank has written a will and he has died. The execution of this Will will be carried byAdministratorAssigneeLiquidatorNone of the above 58. Which of the following statements can be considered to be trueMemorandum of Association of a company is called document of Indoor management as it contains internal rules of the companyTrustee can rise loan for the trust at their discretionObjects of a company are stated in Articles of AssociationA person appointed by a court to manage the property of a deceased person is called ‘administrator’ 59. The Basel Committee on Banking Supervision, is a committee that was constituted byRBI and World BankInternational Monetary FundUnited NationsNone of the above 60. Which is not correct with regard to rate of interest in NRI opened accountsNRE FDR account- as per ceiling rate fixed by RBI and linked to Bank RateFCNR account- as per ceiling rate fixed by RBI and linked to LIBORNRE-Saving account- bank discretion but not more than domestic ratesNRO account- bank discretion but not more than domestic rates 61. In which of the following circumstance, the banker customer relationship does not come to an endDeath of the customerInsolvency of the customerInsanity of the customerReceipt of garnishee order which has been satisfied by payment 62. X is maintaining a SB account with Popular Bank and wrongly credited an amount of Rs.12500 to his account. This was entered in his pass book also. Later on when the mistake came to bank’s notice it debited customer’s account but did not inform the customer. Meanwhile the customer issued a cheque on the basis of this balance which was dishonoured by the bankCustomer can ask for damages for return of his cheque although amount was recoverable from him, had the cheque been paidCustomer cannot ask for damages as bank has only rectified the mistakeIt was customer’s duty to check the pass book for bringing the error to bank’s notice. Hence customer cannot claim any damagesNone of the above 63. 2nd Pillar in Basel 2 relates toMinimum capitalSupervisory reviewMarket disciplineRisk management 64. Which among the following statements is true in connection with customer accountOn receipt of information of customer’s death verbally, the bank cannot stop payment in the accountWhen an account is to be closed by the bank, it is not under obligation to tell the reasons to the customerWhen a customer wants to close his account with the bank, he is not under obligation to disclose the reasons to the bankPass-book is the copy of the bank records, available with the customer 65. RBI conducts on site inspection and off-site supervision of Indian banks and based on its finding. RBI rates the banks on important parameters called ________. The word A of these parameters stands for _______:CACS, advancesCAMELS, assetsCACS, asset qualityCAMELS, asset quality 66. As per Basel 2 recommendations, the Tier 3 is limited to ___ % of a bank’s Tier I capital that is required support market risk500%250%100%50% 67. Mr. K had deposited a sum of Rs.2 lac in his saving bank account. A letter is received from the local Police that Mr. K has been arrested for committing a fraud. A cheque of Rs.15000 has been received through clearing fin the account for payment, after receipt of notice from the policeCheque will be paidCheque will be paid after having permission from the PoliceCheque will be paid after getting permission from the customer and the poCheque will not be paid 68. X is issued a cheque of Rs.22000 payable to B or order. The cheque is misplaced and found by C. C forges B’s signatures and endorses in favour of D, who obtains payment from the bankThis is payment in due course and bank will protection u/s 85 (1) of NI ActThis is payment in due course and bank gets protection u/s 131 of NI ActFor this payment on the basis of a forged endorsement, bank is liableBank and C are liable in equal proportion 69. Market risk takes the form of (which one is not correctCommodity price riskInterest rate riskLoan default riskLiquidity risk 70. A demand draft is purchased by P. After 5 days, P comes to the bank and requests the bank to stop the payment, as the DD is reported to have lost in transitThe issuing branch will immediately instruct the drawee branch to stop payment of DDThe issuing branch will first verify the non-payment and then give the instructions for stop paymentThe payment of DD cannot be stopped. Hence request of P will not be entertainedIf it is common request from payee and drawee branch, it will be done 71. Which among the following is the objective of issuing KYC guidelines by RBICheck fraudulent activities of the borrowersCheck money laundering activitiesAvoid undesirable customer to enter the banking systemA and bB and c 72. In which of the following situations different partners of the combination remain separate entitiesAllianceAmalgamationConsolidationMerger 73. What is the objective of securitization of financial assetsTo enable the banks in speedy recovery of bad loansTo sell the securities without intervention of the court, only if loan goes badTo acquire assets and then sell the same at profitRecycling of funds 74. The functions of purchase of receivable, maintenance of receivable ledgers and collection of dues on due date, under factoring becomes the function ofSellerFactorBuyerA & C 75. In addition to the normal services as defined in the Banking regulation Act, banks also undertake activities like project appraisal, underwriting of issue, technical know how etc. This business is calledConsultancy servicesBancassuranceMerchant bankingAdvisory servicesNon-fund credit business 76. A eCommerce transaction refers tpo exchange of information by way of ________. For selling and buying between the customer and the sellerCredit cardsDebit cardsPaperless instructionsAll the above 77. Which of the following is not correct in respect of targets within priority sectorWeaker section target for Indian banks is 25% of priority sectorMicro & small enterprises credit target for foreign banks ins not minimum percentage basisExport credit is 12% of ANBC for Indian banksAgriculture credit target is 45% of priority sector credit for Indian banks 78. Two companies are merged. One of these is supplier of goods to the other. This merger is known asHorizontal mergerVertical mergerConglomerate mergerConcentric merger 79. Under Tandon Committee’s 2nd method of lending, the working capital margin i.e. net working capital should be25% of the project sales25% of current assets25% of the banks limits25% of the long term sources 80. Which of the following is not a source of working capital for a manufacturing firmSundry creditorUnsecured advancesBank term loanBank overdraft 81. Banking Codes and Standards Board of India, has been constituted as aJoint stock companyTrustSocietyPartnership firm 82. Computeration in banks can bring improvement in the area of (a) customer service (b) house-keeping (c) decision making (d) productivity. Which of these is corr4ectA, b and c onlyB, c and d onlyA, c and d onlyA to d all 83. Which of the following is not an advantage of the multi-user computer system through networkingCorporate level information is available at one placeCostly hardware can not be shared between various user due to which it is not effectiveInformation can be shared easily between various usersComputing resources can be used economically by processing the high volume data 84. In _______ each node is joined to the central node by a separate limkStar topologyBus topologyRing topologyNone of the above 85. In star topology for a local area networkEach node is joined to each other by a common linkAll nodes are linked to the server through individual nodesEach node is joined to the central node by a separate linkThe nodes are connected through a continuous cable 86. In a ATM, the PINStands for postal index numberIs randomly generated sequence of girlsStored in magnetic strip of the cardB and c both 87. Cheque truncation can be done by (a) using image processing (b) using MICR data (c) sending by courier or speed post for early deliveryA, b and c allA and b onlyB and c onlyA and c only 88. Spend now and pay later stands forATM cardCredit cardDebit cardElectronic purse 89. The decision support system makes use (a) query language (b) adhoc report generator (c) statistical analyzer (d) graphicsA to c onlyB and c onlyA to d allB, c and d only 90. The cheque truncation can be done (A) by using MICR data (b) by sending chequesx courier (c) using imaging technologyOnly cOnly aOnly a and cA to c all 91. . Compared to a manual system, the consequences of an error in a computerized system are more serious due to (A) errors being generated at high speed will involve higher cost to correct them (b) computer system processes more data (c) users of computer systems perceive the computer output to be always correctA to c allOnly b and cOnly a and bOnly a 92. Which of the following features do not match in case of goods and services, as a productGoods are search products services are experienced productsGoods and services are tangibleGoods relate to a stage prior to purchase of useServices are the products that relate to a stage after buying or consuming 93. A restaurant provides food as well as service along with the infrastructure for use. This type of product can be classified asPure tangible goodsTangible goods with accompanying servicesHybridMajor service with accompanying minor goods 94. A product means something that can be offered to satisfy a want or need which can be physical goods, services, persons, place, idea etc. Which of the following does not matchIdea- adult educationPlaces- Goa, KashmirPersons- Bismilla KhanServices- tooth paste 95. Amount is immediately recovered from the card holder online for the amount of card used, in case ofA debit cardA post-paid cardA credit cardAll the above 96. If there are declining sales leading to decilining profits and no possibility of increasing and improving them, which of the following strategy will be adopted by an organizationProduct modificationMore of product modification and some production eliminationSome production modification and more of production eliminationProduct elimination 97. Which among the following is correct in the context of branding of productsA brand can be a sign or symbol but not a nameValue of brand is its power to capture consumer preference and loyaltyBrands help in providing legal protection due to unique featuresStrong brands enjoy high level of consumer awareness and loyalty 98. A manufacturer of a consumer product keeps the pric4e of a new product at a substantially high and over a time period to reduce it when dthe demand reduces. Such pricing is calledGeographical pricingPromotional pricingMarket skimming pricingPsychological pricing 99. Which among the following is a component of promotion mix (a) advertising (b) personal selling (c) public relations (d) sales promotion:A to d allA, b and c onlyA, b and d onlyA, c and d only 100. The system of marketing information is ______ that pertains to marketingThe structure of people, equipment and procedures for generation and processing of InformationThe software used for collection of informationThe computer hardware which is used for handling databaseThe set of inputs to collate the information Time is Up!