BCSBI recollected question and Exam Tips:;

BCSBI recollected question and Exam Tips:;

Very basic questions from IIBF prescribed book

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QUESTIONS ASKED IN TODAYS BCSBI.. ( based on memory) PART 2
1. Case studies based on nominee
2. two nominees applicable in which clause.. E OR S.. or F OR S
3.BSCBI is compulsry for banks to follow or not
4. educational. loan for 25 lakhs with 10 percnt margin... how much you insist for collateral
5. same. partners for different companies... wthr right of sett off can be applied or not for one of the firms debts
6. questions on HUF KARTA
7.BANKS CHALLENGE IN IMPLEMENTING DIGITAL TECHNOLOGY
8.banks time for calling customers over phone
9. mobile phone ettiquete
10.norms.for customers to approach BCSBI for guidance for geting loan.. a the limit of the loan
11.questions on customer orientation
12. under which sectn of NI act cheques has to be paid by the bank.... to be continued

1. Customer is defined in 
a. RBI Act b. NI Act c. BR Act d. KYC Policy 
2. Partnership firms M/s ABC and M/s CBA has same three partners. Account of M/s ABC is overdrawn by Rs. 75,000 and the other firm’s account has Rs. 90,000 as credit balance. Can bank use the right of set off? (2 marks) 
a. Can use as same partners b. Cannot set off as two different firms 
Don’t remember the other options
3. In which of these circumstances bank should not disclose customer details?
a. Request under Banker’s Books Evidence Act 1891
b. Under Section 133 of Income Tax Act
c. When asked by State /Central Govt official
d. In public interest 
4. A non-customer deposits Rs. 3000 to be credited to the account of Mr. Z in another station by NEFT. He had wrongly mentioned the account number and the amount is now in Bank’s suspense Account. What is the relationship between bank and Z?
a. Debtor-Creditor
b. Trustee etc 
5. A document duly stamped and given by a customer authorising another person to act on his behalf 
a. Power of attorney 
b. Mandate 
6. Incorrect statement about HUF 
a. Lady member can perform the role of Karta 
b. Karta and coparceners may possess self-acquired properties other than HUF property and these can be attached for HUF dues
c. On death of a coparcener, his share may be handed over to his wife, daughters and other female relatives 
7. Two of three trustees approach bank to open an account and allow the two of them to operate as the third trustee is abroad. As per trust deed, trust is to be jointly operated by three of them 
a. Get power of attorney from third trustee 
b. Account cannot be opened since trust deed mandates operation by three trustees.
8. Borrowing powers of the Board of Directors in a company are mentioned in which document?
a. Articles of Association
b. Memorandum of association
c. Certificate of Incorporation
d. Board resolution
9. In case of fixed deposit, interest can be charged as 
a. Daily basis on customer request 
b. Applied monthly or bimonthly as required provided that compounded amount does not exceed the amount to be paid quarterly 
c. Any periodicity requested by customer
d. Only at the end of maturity 
10. FCNR accounts can be opened in ---------------- and for a period of --------
a. Any freely convertible currency with period of 5 years
b. Any freely convertible currency with period of 3 years
11. Full form of DICGC 
12. Amount eligible to be transferred to DEAF
a. Any amount unclaimed in deposit account for a period of 10 years or more
b. Any amount remaining unclaimed in any account for a period of 10 years
c. Both a and b 
d. Any amount unclaimed for a period of two years or more 
13. In order to meet implied needs of a customer, ------------- is required from banker
a. Creativity and presence of mind
14. Good delivery constitutes which all elements ? 
a. Speed, timeliness , accuracy, courtesy and concern 
15. Transaction cap of mobile banking for purchase of goods and services 
a. As per each bank’s rule 
16. Mobile banking can be provided through 
a. Mobile banking App
b. USSD
c. SIM Kit
d. SMS service 
17. An asset can be classified as NPA when 
a. Interest or Principal is overdue for 90 days or more 
b. When CC Account is out of order for 180 days
c. When bill of exchange not honoured for 120 days etc 
18. Maximum amount that can be granted under Skill Loan Scheme?
1.5 lakhs
19. In order to set up extension counter in a hospital in a Tier I city, bank needs to take approval from 
a. RBI
b. No permission required 
c. Ministry of Finance etc 
20. Demat account can be used to hold 
a. Shares
b. Mutual funds 
c. Debentures
d. All of these 
21. Demat account cannot be use to hold 
a. Deposit to be handed over to broker
b. Exchange traded funds
c. Mutual funds etc 
22. Other negotiable instruments 
a. Interest warrant 
b. Bankers draft etc 
23. Which section of NI Act says that Bank should honour customer’s cheques?
a. Section 31 
24. Not a characteristic of negotiable instruments.
a. in writing
b. date of payment must be certain
c. Transferrable
d. Duly stamped
25. Which one of the following is not a structural difference between marketing of goods and services?
a. Intangibility
b. inseparability
c. Homogeneity
d. perishability
26. Marketing Mix does not contain
a. Product
b. Price
c. Place and promotion
d. Image of the organisation
27. Which one of the following are not permitted to carry out regular transactions for customers?
a. Business correspondents 
b. Business facilitators.
28. Which one of the following is not a difference in marketing goods and services?
a. Services are produced and consumed simultaneously
b. Services are intangible
c. Services provided are uniform
29. Constraints in digital banking 
a. Embracing of new technology
b. Customer education
c. Safe and friendly environment 
Choices are combinations of above
30. Biometric authentication in micro ATMS done by 
a. Business Correspondents
b. UIDAI by biometric association with its database
31. In mobile banking for debit transactions following checks are made
a. Face to face interaction with users 
b. Two factor authentication
c. End to end encryption of mPIN
Choices are combinations of above 
32. Estimates committee has made recommendation that succession certificate should not be insisted where amount of credit to the depositor does not exceed Rs. 25,000. What is the correct instruction?
a. If nomination/Survivor clause is present then succession certificate should not be insisted for any amount. 
33. Account opened with Anyone or survivor clause, all three of the account holders die together in an accident, the nominee has produced the death certificate and amount outstanding in account is Rs. 20,000. Action to be taken by bank
a. Ask nominee to provide Succession certificate 
b. Ask nominee to provide letter of administration
c. Probate to be given
d. Transfer the money without asking for documents (a) to (c).
34. As per Goiporia committee, Enquiry or May I Help You counter should be present in 
a. Head Office
b. Regional Office
c. All Urban and Metro branches
d. All branches except very small branches 
35. ---------------is a matrix of different components like source of funds, level of income, volume and frequency of transactions, origin and destination of funds etc. 
a. Transaction profile
b. Organisation Profile
c. Marketing Profile etc 
36. Main grievances of small depositors does not include
a. Difficulty in opening of account 
b. Delay in updating of passbook
c. Difficulty in closing of account
d. Account being classified as dormant/inoperative without any notice. 
37. What is meant by Grievance Escalation System?
If the customer is not satisfied with the reply offered by bank, then he can approach higher authorities for redressal of grievances
38. If branch manager is not able to respond to a complaint within how many days should he escalate the matter to regional office?
7 days 
39. In order to reduce the complaints filed to Banking Ombudman, what is suggested?
Appointment of internal Ombudsman
40. What all functions does not fall under customer service committee of the board?
a. Triennial audit of customer satisfaction surveys
b. Formulation of Comprehensive Deposit Policy 
c. Annual Survey of customer satisfaction
d. Salary increase to employees for better customer service
41. Which of the following is not part of mandatory displays in branches?
a. Information available in booklet form
b. Details of CEO of the bank
c. Banking Ombudsman details
d. Details of Regional Manager etc
42. What does not come under COPRA Act?
a. Right against unfair trade practices
b. Right to have access to variety of goods
c. Right to free education
43. Which of the following needs are most important for a person?
a. Emotional needs
b. Interpersonal needs etc 
44. Which are the three interpersonal needs?
a. Need for inclusion, Need for control and Need for affection
45. What is meant by encoding of message ?
Sender needs to use the appropriate language or expression
46. Correct order for communication.
a. Conceiving the message, Encoding the message, decoding the message and providing feedback
47. Which of the following about BCSBI is wrong?
a. Membership in BCSBI is compulsory
b. Membership is voluntary 
c. Its an independent and autonomous body
d. Registered as society
48. Who has authority to approve research activities in BCSBI?
Governing Council
49. Function of Chief Executive Officer in BCSBI 
a. Preparation of annual budget for submission to the Society
b. Sanction expenditure and investments of BCSBI
c. Financial and managerial powers etc
50. Who is the raison d’etre (main purpose) of BCSBI ?
a. RBI 
b. common man
c. Customer service 
51. BCSBI modelled on basis of which country?
UK
52. BCSBI rating of member banks is using a scoring scale of 
a. High, Above average, average and below average
53. In order to get credit counselling from BCSBI which is correct 
a. A fee has to be paid
b. Can apply only through member banks 
c. Concerned bank is free to accept the debt restructuring plan in full or with modifications
54. Customer of a bank not a part of BCSBI can escalate complaint to 
a. BCSBI
b. Banking Ombudsman
c. Customer Service Department of RBI
55. Which of the following not included under Code of Bank’s Commitment to Customers?
a. Deposit accounts
b. Remittances within India
c. Foreign Exchange services
d. Merchant banking
56. BCSBI puts following obligations on the customers?
a. No obligations
b. Obligation of customers varies from bank to bank 
57. Objectives of Code of Bank’s commitments to customers?
a. Fair treatment of customers
b. Increase transparency
c. foster confidence in banking system
Choices are combinations of three 
58. As per BCSBI Code regarding Do Not Call registry (Correct One)
a. Bank will not transmit unsolicited commercial information if you have registered with ‘Do not call registry’
b. Bank will enrol customer in Do Not Call Registry after 6 months of opening account etc 
59. Change in interest rate on loan products will be informed within 
a. Fortnight 
b. One-month etc 
60. As per BCSBI Code, if there is any change in fee or new fee is introduced, it will take effect 
a. Retrospectively if needed
b. revised charges retrospectively and new charges after one month
c. Prospective effect after giving notice of one month
61.As per BCSBI code, In case of revision in fees it will be communicated to customer by( Incorrect option)
a. Account statements
b. Email and SMS alerts 
c. TV advertisements 
d. Notice board at branches 
62. As per BCSBI code regarding privacy of customer(Incorrect option)
a. Bank will treat personal information as private and confidential till he is a customer of the bank
b. Bank will treat personal information as private and confidential even when he is no longer a customer of the bank. 
63. As per BCSBI code on CICs, which of the following is wrong 
a. Bank will provide information about credit availed by customer to CIC at periodic intervals
b. On request, will give information about CIC(s) to which details are shared
c. Bank will not share copy of credit information obtained from CIC 
64. In BCSBI Code, 
a. You denotes the customer and we denotes the bank
b. ‘You’ denotes the member bank and ‘We’ denote BCSBI etc 
65. As per BCSBI Code, when customer makes a complaint Bank will inform the customer
a. how to do so 
b. where a complaint can be made
c. Whom to approach for redressal 
d. same complaint is not raised again by customer 
options are combinations
66. As per BCSBI Code, for collection of dues customers should be contacted between 
a. 7 hrs and 1900 hours 
67. Nominee can be two persons in the case of accounts opened as 
a. Either or Survivor
b. Former or survivor
c. Joint accounts with joint operation etc 
68. in case of revision in minimum balance to be maintained in current account and as customer’s current account does not meet the minimum balance in the last quarter bank as per BCSBI code should 
a. Inform customers 30 days in advance of any change in minimum balance
69. As per BCSBI Code, in case of inoperative/dormant accounts
a. Bank should inform three months before account is made as inoperative
b. Inform when account is made inoperative etc 
70. In case of cheque collection policy, we will provide you compensation for delay in collection of instruments as per 
a. Compensation policy of respective bank
b. Compensation policy of RBI
c. compensation policy of IBA etc 
71. In case a cheque is lost in transit as per cheque collection policy,
a. Bank will help in obtaining duplicate cheque and offer compensation
72. In case of a cheque issued by B to A, amount in figures is Rs. 10,000 and in words is ten thousand which is striked off and written as five thousand. Alteration is duly signed by B. In that case, bank should 
a. Honour the cheque and pay the amount given in figures
b. Return the cheque as material alteration is not allowed
73. As per BCSBI Code, while opening a Term deposit we will (incorrect one)
a. Get instructions from you for disposal of deposit at maturity 
b. Inform about procedure to withdraw deposit before maturity
c. None of these
74. As per BCSBI code, on receiving a loan application (incorrect one)
a. acknowledges the receipt of application
b. Communicate in writing reasons for rejection of loan application
c. Provide a provisional sanction letter on receipt of loan proposal
75. As per BCSBI code, bank will return all securities/documents/title deeds to mortgaged property within --- days of the repayment of all dues
a. 15 days 
76. In the event of unauthorized transaction in internet banking after customer has received means to access Internet banking, maximum liability will be 
a. Full amount 
b. Nil 
c. Rs, 10,000/- 
77. Request for cancellation/closure of credit card will be processed in 
a. 7 days 
78. As per BCSBI Code, prepayment penalty of fixed rate loans is waived till 
a. 10 lakhs 
b. 5 lakhs
c. 10 lakhs etc 
79. For a unit to be classified as a sick unit, it should remain as ------------for three months or more or if there is erosion in the net worth due to accumulated losses to the extent of --- of net worth 
a. NPA ,50%
b. Doubtful,50%etc 
80. In small accounts, balance at any time should not exceed ---------- and total credits in a year not to exceed ----------
a. Rs. 50,000/- and Rs. 1,00,000
81. Banks can allow small accounts to operate for a period of 
a. up to 1 year 
b. up to 2 years 
82. A customer approaches a bank for opening an account without any of the required KYC documents, bank can open 
a. Small account 
b. Refused to open the account 
83. As per Consumer Protection Bill of 2015, cases not admitted within --- days will be deemed admitted 
a. 21 days 
84. Customer orientation means 
85. As per BCSBI Code, when customer avails a safe deposit locker (incorrect one)
a. Bank will not link fixed deposit to allocation of lockers
b. explains all the rules of allocating a locker
c. Explain the lesser and lessee relation created 
86. In case of illiterate persons, nomination can be given 
a. Thumb impression to be attested by two witnesses
b. No need to authenticate thumb impression
c. Authorized official should authenticate in the presence of customer etc 
87. Number of grids in grid based cheque truncation system 
a. Six
b. Ten 
c. Three 
d. Four 
88. In order to provide customer satisfaction, bank should 
a. Hire new staff in place of retirees 
b. Staff to be trained in handling complaints 
c. Deploy more staff in counters 
etc

Current Affairs on 15.01.2019

Today's Headlines from www:

*Economic Times*

📝 Business optimism falls 7% in January-March: Dun & Bradstreet

📝 FinMin wants PSU banks to bring down government equity to 52%

📝 Large deals push private equity, venture capital investment up 35% to $35.1 billion in 2018

📝 Brick and mortar to see additional sales of Rs 10,000-12,000 crore in 2020 due to recent FDI norms - Crisil

📝 BHEL bags Rs 565 cr order for solar power plants in Telangana

📝 Hindustan Copper chalks out strategy to ramp up output to 20 MT by 2024

📝 REITs may help generate 14% return annually to investors : Anarock

📝 Bharti Airtel in talks on a potential takeover of Telkom Kenya: sources

*Business Standard*

📝 Listed realty developers saddled with unsold properties worth Rs 1 trillion

📝 Lenders to bail out debt-laden Jet Airways after forensic clean chit

📝 NSE to list well-governed firms in new category to help new investors

📝 Govt may fall short of Rs 2.45-trn non-tax revenue target despite RBI funds

📝 Fund managers build positions in robust NBFCs to cash in on IL&FS overhang

📝 UK PM Theresa May mounts last-ditch bid to win support for Brexit deal

*Financial Express*

📝 OYO aims at 1 million rooms to become world's "largest" hotel chain

📝 Giant leap for RJio: Share of rural subscribers base jumps to 32% from 4.25% in 2 years

📝 Corp bond issuances hit 8-month high in December

📝 Amazon invests in Qualcomm-backed Israeli semiconductor startup

📝 Revised FDI policy might flush online sales up to Rs 40,000 cr down the drain: CRISIL

📝 India likely to overshoot fertiliser aid bill by $4.2 billion, banks may chip in: Sources

📝 Transport sector contributed 3.4 million jobs in FY18

*Mint*

📝 IAG weighs SBI General Insurance stake sale

📝 Etihad poised to take effective control of Jet Airways

📝 Stage set for RBI rate cut as retail inflation falls to 2.19%

📝 Sachin Bansal invests $100 mn in Ola in boost for Bhavish Aggarwal

📝 CapitaLand to buy Ascendas business units in $8 billion deal

📝 Auto firms cut output as inventories swell

📝 India’s crude steel output falls 1.4% to 8.936 MT in December

📝 Amazon announces sale before new e-commerce rules come into force.

FOREIGN EXCHANGE MANAGEMENT

FOREIGN EXCHANGE MANAGEMENT

Multiple Choice Questions.
1. Foreign exchange transactions involve monetary transactions
A. among residents of the same country
B. between residents of two countries only
C. between residents of two or more countries
D. among residents of at least three countries
ANSWER: B
2. Under FEMA, the RBI has been authorised to make ------ to carry out the provisions of the Act.
A. rules
B. regulations
C. both rules and regulations
D. notifications
ANSWER: B
3. A foreign currency account maintained by a bank abroad is its
A. nostro account
B. vostro account
C. loro account
D. foreign bank account
ANSWER: A

Srinivas kante

4. 'Non-resident Bank Accounts' refer to
A. nostro account
B. vostro account
C. accounts opened in offshore centres
D. none of the above
ANSWER: B
5. Non-resident bank accounts are maintained in
A. the permitted currencies
B. the currency of the country of the bank maintaining the account
C. the currencies in which FCNR accounts are permitted to be maintained
D. Indian Rupee
ANSWER: D

Gist of Important FEDAI Rules

Gist of Important FEDAI Rules
Rule 1: Hours of Business
1.1 The exchange trading hours for Inter-bank forex market in India would be from
9.00 a.m. to 5.00 p.m. No customer transaction should be undertaken by the
Authorised Dealers after 4.30 p.m. on any working day. 1.2 Cut-off time limit of 05.00 p.m. is not applicable for cross- currency transactions.
In terms of paragraph 7.1 of Internal Control Guidelines over Foreign Exchange
Business of Reserve Bank of India (February 2011), Authorised Dealers are
permitted to undertake cross-currency transactions during extended hours, provided
the Managements lay down the extended dealing hours. 1.3 For the purpose of Foreign Exchange business, Saturday will not be treated as
a working day. 1.4 “Known holiday” is one which is known at least 4 working days before the date. A holiday that is not a “known holiday” is defined as a “suddenly declared holiday”. Rule 2: Export Transactions
2.1. Post-shipment Credit in Rupees
(c) Application of exchange rate: Foreign Currency bills will be
purchased/discounted/ negotiated at the Authorised Dealer’s current bill buying rate
or contracted rate. Interest for the normal transit period and/or usance period shall
be recovered upfront simultaneously. (d) Crystallization and Recovery:
(ii) Authorized Dealers should formulate own policy for crystallization of foreign
currency liability into rupee liability, in case of non-payment of bills on the due
date. (iii) The policy in this regard should be transparently available to the customers. (iv) For crystallization into Rupee liability, the Authorised Dealer shall apply its TT
selling rate of exchange. The amount recoverable, thereafter, shall be the
crystallized Rupee amount along with interest and charges, if any.

(v) Interest shall be recovered on the date of crystallization for the overdue period
at the appropriate rate; and thereafter till the date of recovery of the
crystallized amount. (vi) Export bills payable in countries with externalization issues shall also be
crystallized as per the policy of the authorised dealer, notwithstanding receipt
of advice of payment in local currency. (d) Realization of Bills after crystallization: After receipt of advice of realization,
the authorised dealer will apply TT buying rate or contracted rate (if any) to convert
foreign currency proceeds. (e) Dishonor of bills: In case of dishonor of a bill before crystallization, the bank
shall recover:
(ii) Rupee equivalent amount of the bill and foreign currency charges at TT selling rate. (iii) Appropriate interest and rupee denominated charges. 2.2. Application of Interest
(c) Rate of interest applicable to all export transactions shall be as per the
guidelines of Reserve Bank of India from time to time. (d) Overdue interest shall be recovered from the customer, if payment is not
received within normal transit period in case of demand bills and on/or before
notional due date/actual due date in case of usance bills, as per RBI directive. (e) Early Realization: In case of early realization, interest for the unexpired period
shall be refunded to the customer. The bank shall also pay or recover notional swap
cost as in the case of early delivery under a forward contract. 2.3. Normal Transit Period:
Concepts of normal transit period and notional due date are linked to concessional
interest rate on export bills. Normal transit period comprises the average period
normally reckoned from the date of negotiation/purchase/discount till the receipt of
bill proceeds.
It is not to be confused with the time taken for the arrival of the goods at the destination. Normal transit period for different categories of export business are laid down as below:
(c) Fixed Due Date: In the case of export usance bills, where due dates are fixed, or are reckoned from date of shipment or date of bill of exchange etc, the actual due
date is known. Therefore, in such cases, normal transit period is not applicable. (d) Bills in Foreign Currencies – 25 days
(e) Exports to Iraq under United Nations Guidelines – Max. 120 days
(g) Bills drawn in Rupees under Letters of Credit (L/C)
(i) Reimbursement provided at centre of negotiation - 3 days
(ii) Reimbursement provided in India at centre different from centre of
negotiation - 7 days
(iii) Reimbursement provided by banks outside India - 20 days
(iv) Exports to Russia under L/C where reimbursement is provided by RBI - 20 days. (h) Bills in Rupees not under Letter of Credit - 20 days
(i) TT reimbursement under Letters of Credit (L/C)
(i) Where L/C provides for reimbursement by electronic means - 5 days
(ii) Where L/C provides reimbursement claim after certain number of days
from the date of negotiation - 5 days + this additional period. 2.4. Substitution/Change in Tenor:
(o) In case of change in the usance of a bill, interest on post-shipment credit shall
be charged to the customer, as per RBI guidelines. In addition, the bank shall
charge or pay notional swap difference. Interest on outlay of funds for such
swaps shall also be recovered from the customer at rate not below base rate
of the bank concerned. (p) It is optional for banks to accept delivery of bills under a contract made for
purchase of a clean TT. In such cases, the bank shall recover/pay notional
swap difference for the relative cover. Interest at the rate not below base rate
of the bank would be charged on the outlay of funds. 2.5. Export Bills sent for collection:
(a) Application of exchange rates: The conversion of foreign currency proceeds of
export bills sent for collection or of goods sent on consignment basis shall be
done at prevailing TT buying rate or the forward contract rate, as the case
may be. The conversion to Rupee equivalent shall be made only after the
foreign currency amount is credited to the nostro account of the bank. (b) On receipt of credit advice/statement of nostro account and compliances of
guidelines, requirements of the Bank and FEMA, the Bank shall transfer funds
for the credit of exporter’s account within two working days. (c) If the above stipulated time limit is not observed, the Bank shall pay
compensation for the delayed period at the minimum interest rate charged on
export credit. Compensation for adverse movement of exchange rate, if any, shall also be paid as per the compensation policy of the bank.

Rule 3: Import Transactions
3.1 Application of exchange rate:
(a) Retirement of import bills - Exchange rate as per forward sale contract, if
forward contract is in place. Prevailing Bills selling rate, in case there is no
forward contract. (b) Crystallization of Import - same as above bill (vide para 3.3 below)
(c) For determination of stamp - As per exchange rate provided by the duty on
import bills authority concerned. 3.2. Application of Interest:
(a) Bills negotiated under import letters of credit shall carry commercial rate of
interest as applicable to banks’ domestic advances from time to time. (b) Interest remittable on interest bearing bills shall be subject to the directive of
Reserve Bank of India in this regard. 3.3. Crystallization of Import Bill under Letters of Credit. Unpaid foreign currency import bills drawn under letters of credit shall be
crystallized as per the stated policy of the bank in this respect. Rule 4 Clean Instruments:
4.1. Outward Remittance: Outward remittance shall be effected at TT selling rate of
the bank ruling on that date or at the forward contract rate. 4.2. Encashment of foreign currency notes and instruments, Foreign currency
travelers’ cheques, currency notes, foreign currency in prepaid card, debit/credit
card will be encashed at Authorised Dealer’s option at the appropriate buying rate
ruling on the date of encashment. 4. 3. Payment of foreign inward remittance, Foreign currency remittance up to an
equivalent of USD 10,000/- shall be immediately converted into Indian Rupees. Remittance in excess of equivalent of USD 10,000 shall be executed in foreign
currency. The beneficiary has the option of presenting the related instrument for
payment to the executing bank within the period prescribed under FEMA. 4.4. The applicable exchange rate for conversion of the foreign currency inward
remittance shall be TT buying rate or the contracted rate as the case may be. 4.5. Compensation for delayed payment: Authorised Dealers shall pay or send
intimation, as the case may be, to the beneficiary in two working days from the date
of receipt of credit advice / nostro statement. In case of delay, the bank shall pay
the beneficiary interest @ 2 % over its savings bank interest rate. The bank shall
also pay compensation for adverse movement of exchange rate, if any, as per its
compensation policy

Rule 5 Foreign Exchange Contracts:
5.1. Contract amounts: Exchange contracts shall be for definite amounts and
periods. When a bill contract mentions more than one rate for bills of different
deliveries, the contract must state the amount and delivery against each such rate. 5.2. Option period of delivery: Unless the date of delivery is fixed and indicated in
the contract, the option period may be specified at the discretion of the customer
subject to the condition that such option period of delivery shall not extend beyond
one month. If the fixed date of delivery or the last date of delivery option is a known
holiday, the last date for delivery shall be the preceding working day. In case of
suddenly declared holidays, the contract shall be deliverable on the next working
day. Contracts permitting option of delivery must state the first and last dates of
delivery. For Example: 18th January to 17th February, 31st January to 29th Feb. 2012. “Ready” or “Cash” merchant contract shall be deliverable on the same day. “Value next day” contract shall be deliverable on the working day immediately
succeeding the contract date. A spot contract shall be deliverable on second
succeeding working day following the contract date. A forward contract is a contract
deliverable at a future date, duration of the contract being computed from spot value
date at the time of transaction”. 5. 3. Place of delivery: All contracts shall be understood to read “to be delivered or
paid for at the Bank” and “at the named place”. 5.4. Date of delivery: Date of delivery under forward contracts shall be:
(i) In case of bills/documents negotiated, purchased or discounted - the date of
negotiation/purchase/ discount and payment of Rupees to the customer. However, in case the documents are submitted earlier than, or later than the
original delivery date, or for a different usance, the bank may treat it as proper
delivery, provided there is no change in the expected date of realization of
foreign currency calculated at the time of booking of the contract. No early
realization or late delivery charges shall be recovered in such cases. (ii) In case of export bills/documents sent for collection - Date of payment of
Rupees to the customer on realization of the bills. (iii) In case of retirement/crystallization of import bills/documents - the date of
retirement/ crystallization of liability, whichever is earlier?
5.5. Option of delivery: In all forward merchant contracts, the merchant, whether a
buyer or a seller will have the option of delivery. 5.6. Option of usance: The merchant purchase contract should state the tenor of
the bills/documents. Acceptance of delivery of bills/documents drawn for a different
tenor will be at the discretion of the bank

5.7. Merchant quotations: The exchange rate shall be quoted in direct terms i.e. so many Rupees and Paise for 1 unit or 100 units of foreign currency. 5.8. Rounding off: Rupee equivalent of the foreign currency Settlement of all
merchant transactions shall be effected on the principle of rounding off the Rupee
amounts to the nearest whole Rupee i.e. without paise. RULE 6 Early Delivery, Extension and Cancellation of Foreign Exchange
Contracts
6.1. General
(i) At the request of a customer, unless stated to the contrary in the provisions of
FEMA, 1999, it is optional for a bank to: (a). Accept or give early delivery; or
(b). Extend the contract. (ii) It is the responsibility of a customer to effect delivery or request the bank for
extension / cancellation as the case may be, on or before the maturity date of
the contract. 6.2. Early delivery: If a bank accepts or gives early delivery, the bank shall
recover/pay swap difference, if any. 6.3. Extension: Foreign exchange contracts where extension is sought by the
customers shall be cancelled (at an appropriate selling or buying rate as on the date
of cancellation) and rebooked simultaneously only at the current rate of exchange. The difference between the contracted rate, and the rate at which the contract is
cancelled, shall be recovered from/paid to the customer at the time of extension. Such request for extension shall be made on or before the maturity date of the
contract. 6.4. Cancellation
(i) In case of cancellation of a contract at the request of a customer, (the request
shall be made on or before the maturity date) the Authorised Dealer shall
recover/ pay, as the case may be, the difference between the contracted rate
and the rate at which the cancellation is effected. The recovery/payment of
exchange difference on cancellation of forward contracts before the maturity
date may be either upfront or back-ended at the discretion of banks. (ii) Rate at which cancellation is to be effected:
(a) Purchase contracts shall be cancelled at T.T. selling rate of the
contracting Authorised Dealer
(b) Sale contracts shall be cancelled at T.T. buying rate of the contracting
Authorised Dealer

(c) Where the contract is cancelled before maturity, the appropriate forward
T.T. rate shall be applied. (bi) Notwithstanding the fact that the exchange contract between the customer
and the bank becomes impossible of performance, for whatever reason,
including Government prohibitory orders, the exchange contract shall not be
deemed to have become void and the customer shall forthwith apply to the
Authorised Dealer for cancellation, as per the provisions of paragraph 6.4.(i)
and (ii) above. (iv)
(d) In the absence of any instructions from the customer, vide para 6.1(ii), a
contract which has matured shall be cancelled by the bank on the 7th working
day after the maturity date. (e) Swap cost, if any, shall be recovered from the customer under advice to him. © When a contract is cancelled after the maturity date, the customer shall not be entitled
to the exchange difference, if any, in his favour, since the contract is cancelled on
account of his default. He shall, however, be liable to pay the exchange difference
against him. 6.5. Swap cost/gain:
(ii) In all cases of early delivery of a contract, swap cost shall be recovered from
the customer, irrespective of whether an actual swap is made or not. Such
recoveries should be made either back-ended or upfront at discretion of the
bank. (iii) Payment of swap gain to a customer shall be made at the end of the swap period. 6.6. Outlay and Inflow of funds:
Authorised Dealer shall recover interest on outlay of funds for the purpose of
arranging the swap, in addition to the swap cost in case of early delivery of a
contract.
If such a swap leads to inflow of funds, interest shall be paid to the customer. Funds
outlay / inflow shall be arrived at by taking the difference between the original
contract rate and the rate at which the swap could be arranged. The rate of interest
to be recovered / paid should be determined by banks as per their policy in this
regard.

Loans to NRIs NRI can avail the following loans:

Loans to NRIs NRI can avail the following loans:
1. Rupee Loans in India
- Up to up to any limit subject to prescribed margin. - For personal purpose, contribution to Capital in Indian
Companies or for acquisition of property. - Repayment of loan will be either from inward remittances or
from local resources through NRO accounts. 2. Foreign Currency Loans in India
- Against security of funds in FCNR-B deposits. - Maturity of loan should not exceed due date of deposits. - Repayment from Fresh remittances or from maturity proceeds of
deposits. 3. Loans to 3
rd Parties provided
- There is no direct or indirect consideration for NRE depositor
agreeing to pledge his FD. - Margin, rate of Interest and Purpose of loan shall be as per RBI
guidelines. - The loan will be utilized for personal purpose or business
purpose and not for re-lending or carrying out
Agriculture/Plantation/Real estate activities. - Loan documents will be executed personally by the depositor
and Power of attorney is not allowed. 4. Housing Loans to NRIs : HL can be sanctioned to NRIs subject to
following conditions: - Quantum of loan, Margin and period of Repayment shall be
same as applicable to Indian resident. - The loan shall not be credited to NRE/FCNR account of the
customer. - EM of IP is must and lien on assets. - Repayment from remittance abroad or by debit to NRE/FCNR
account or from rental income derived from property.