COMPANIES & PARTNERSHIP ACT
1. A modification of charge under Section 125 of Companies Act, 1956, is registered by using which
Form Nos. Form Nos 8 & 13. The revised system for registration of charge with ROC is through
Electronic mode – MCA 21 (E-filing)
2.While granting advances to a company with charge created on securities which require registration
under Section 125, what is to be seen as a banker? As a banker, we should ensure that there is no
prior charge on the same securities by inspecting register of mortgages and charges at the office of
registrar of companies
3.Under Section 125 of Companies Act, a charge created by a joint stock company is required to be

STAMP ACT
1. Under the Indian Stamp Act, stamping is required on Demand promissory note, usance bill of
exchange, LC, Bill of Lading, Debentures, Transfer of LIC Policy, Proxy, Receipt etc
2. In case of demand bills stamp duty Not payable.
3. Stamp Duty chargeable has been waived by GOVT in respect of usance bills in the following cases:
Arising out of genuine trade transactions
Which are payable not more than 3 months after date or sight?
Which are drawn on or in favour of commercial/cooperative banks/SIDBI?
4. STAMP DUTY for AOD (CBRL), Indemnity, EQM, Regd Mortgage, Lease Deed, Agreement, Sale
Deed etc document is determined by the State Laws
5. An under stamped agreement can be set right by:

CONTRACT ACT
1. A mandate may not continue to be operative in cases of Death of agent, Lunacy of Agent,
Insolvency of Agent etc
2. The term ― Power of Attorney refers to An instrument by which one person i.e. Agent acts on
behalf of another i.e. Principal
3. Your customer Mr. Qureshi had executed a power of attorney in favour of Mr.Ahmed who operates
the account. You received a notice of death of Mr. Qureshi when a cheque signed by Mr. Ahmed is
presented for payment. Whether Cheque can be paid? Cheque should not be paid. (principal has died
– authority is derived from principal)
4. Mr. Modi maintains a current account in your branch which is operated by Mr. Jain in whose favour
Mr. Modi has executed a Power of Attorney. A notice about the death of Mr.Jain is received.

COPRA & OMBUDSMAN
1. Under COPRA 1986, what is the limit upto which State Forum can handle cases? Above 20
lakhs & upto 100 lakhs
2. What is the structure of consumer disputes redressal forum? Three Tier system
3. Limitation for filing complaint under COPRA from the date of cause of action is:Within 24 months
4. If a consumer is aggrieved with the verdict of the National Commission under C P Act, whether he
can appeal? YES. He can appeal to the Supreme Court
5. Under COPRA, a consumer can file a case at National Commission if the compensation claimed
exceeds: Rs. 100 lakhs

DRT MATTERS
1. The normal cut off limit to file an application in DRT shall be Rs. 10 lakhs and above
2. Where the cases before Debt Recovery Tribunal are decided, Tribunal awards Certificate of
Recovery (RC – Recovery Certificate).
3. The appeal on a DRT judgment is to be filed at Appellate Tribunal at respective centres
4. Whether already decreed accounts in various courts can be transferred to DRT YES, Where E P
amount reaches Rs. 10 Lakhs & above
5. Cases before DRT are presented by- Empanelled Advcoate

LIMITATION ASPECTS
1. Law of Limitation bars only the right and not the remedy (for eg. right to sell the seized goods,
pledged goods, right of set off etc Can be resorted to in time barred accounts)
2. The number of times the AOD can be obtained from the borrower without getting a fresh set of
documents is No such stipulation
3. Limitation period for applying for final decree Three years (from the date given/expiry of time
given) in the preliminary decree
4. The limitation period in the case of guarantees obtained by the bank from the borrower is:
is not renewed
5. AOD obtained after expiry of pronote - Not valid

LOK ADALAT:
1. Lok Adalats can handle the following disputes Fresh disputes not pending with courts and disputes
on which suits are Pending in the court
2. On the award made by the Lok Adalat No appeal is provided
3. Execution of the Award of Lok Adalat can be done by Civil Court
4. Lok Adalat is a Legal Authority under Legal Services Authority Act, 1987.
5. When a dispute is under consideration of Lok Adalat No change in the limitation period
6. Lok Adalat is organised for settling the disputes in respect of All commercial Banks
7. The cases to be referred to Lok Adalat are All recovery cases, wherein Borrower has expressed his

SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF

SECURED ASSETS ORDINANCE 2002 - SARFAESI Act - 2002

1. Is it necessary to classify the account as NPA for initiating action under the Act? YES

2. The above Act is applicable in respect of debts due to Nationalised Banks only

3. The Provisions of the Act are applicable in respect of All NPA a/cs with liability above Rs. 1 lac

4. Enforcement is not possible under this Act in respect of Time barred debts, where the present

liability is less than 20% of principal + int. &where the secured asset is an Agricultural Land

5. Whether limitation is suspended or saved while proceeding under the act? No

6. Movables seized under this Act have to be got valued by Valuer in the panel approved by the

Board of the Bank

SARFEASI ACT
• The act has two parts, first part stands for securitization and reconstruction of financial assets and
other part is enforcement of security interest.
• Eligible assets under the act may be enforced without intervention of court or tribunal with the laid
down procedure under the act.
• If party failed to deposit the amount, possession of charged/ secured assets is obtained from the
bank under section 13(4) of the act. Publication of possession notice in the act within 07 days is
mandatory.
• No secured creditor shall exercise any right, unless exercise of such right is agreed upon by the
secured creditors representing not less than 3/4th in value of the amount outstanding.
• If borrower restricts the bank to take physical possession of secured assets, petition is filed under
section 14 of the act to the CMM/DM praying to get the physical possession of the assets.
• No action is taken before 45 days of taking possession, as 45 days time is given under the act to
appeal against the action of the bank.
• Appeal with DRT can be filed by the party only after taking possession of the assets under section
17 of the act. Thereafter appeal can also be filed with DRAT under section 18 of the act. Civil court
does not jurisdiction to entertain any suit under provision of the act.
• Secured assets can be disposed off / sold giving 30 days notice to the parties concerned followed
by 30 days publication of sale through auction/ tender notice of these assets in the vernacular
newspaper and national daily.
• 60 days notice is served under 13(2) of SARFEASI
• Action is taken for the dues exceed Rs.1 lakh
• Agriculture Land and lease hold property can not be enforced
• Appeal is made within 45 days of possession of secured asset

• 30 days notice is served indicating there in the sale of asset
• 30 days publication is made for auction of secured assets
• Possession of property is obtained under 13(4) SARFEASI Act
• Publication of possession of property -within 7 days from the date of possession.
• SERFEASI ACT 2002 does not apply to the following assets –
A -lien on any goods, money or security.
B -A pledge of moveable.
C – Creation of any security in any aircraft or vessel.
D – Any property that can not be attached under any other law.
E – Any security interest for securing repayment any financial asset not exceeding Rs.1 lac.
F – Any case in which the amount due is less than 20% of the principal amt.
G – Any interest created in agriculture land.

Negotiable instruments act

NEGOTIABLE INSTRUMENTS ACT

1. What is the Section which contains the provisions relating to bouncing of cheques? Sec 138 to

147 of NI Act

2. What is the characteristic of a negotiable instrument? It must be transferable by delivery. & b) It

must enable the holder to sue in his own name

3. Who is the holder in the context of the negotiable instruments? Holder is the person who is

entitled to the possession of the instrument and to receive the amount of the instrument in his own

name

4. A cheque dated 3rd Jan 2005 bears the striking of the pre-printed year 19., can be passed? YES.

Striking need not be authenticated and cheque can be passed.

5. Whether protection is available to the paying banker in case of a cheque where drawer‘s signature

is forged? No.

Banking sector IT guidelines

Banking Sector IT guideline
The Reserve Bank of India issued new guidance in April 2011 for banks to mitigate
the risks of use of information technology in banking operations. RBI guidelines are
result of the Working Group's recommendations on information security, electronic
banking, technology risk management and cyber fraud. The Working Group was formed
under the chairmanship of G. Gopalakrishna, the executive director of RBI in April 2010.
The guidance is largely driven by the need for mitigating cyber threats emerging from
increasing adoption of IT by commercial banks in India.
Recommendations are made in nine broad areas, including-
1. IT Governance: emphasizes the IT risk management accountability on a bank's
board of directors and executive management. Focus includes creating an
organizational structure and process to ensure that a bank's IT security sustains
and extends business strategies and objectives.
2. Information Security: maintaining a framework to guide the development of a
comprehensive information security program, which includes forming a separate
information security function to focus exclusively on information security and risk
management, distinct from the activities of an information technology
department. These guidelines specify that the chief information security officer
needs to report directly to the head of risk management and should not have a
direct reporting relationship with the chief information officer.
3. IT Operations: specialized organizational capabilities that provide value to
customers, including IT service management, infrastructure management,
application lifecycle management and IT operations risk framework.
4. IT Services Outsourcing: places the ultimate responsibility for outsourcing
operations and management of inherent risk in such relationships on the board
and senior management. Focus includes effective selection of service provider,
monitoring and control of outsourced activities and risk evaluation and
management.
5. Information Security Audit: the need for banks to re-assess IS audit processes
and ensure that they provide an independent and objective view of the extent to
which the risks are managed. This topic focuses on defining the roles and
responsibilities of the IS audit stakeholders and planning and execution of the
audit.
6. Cyberfraud: defines the need for an industry wide framework on fraud
governance with particular emphasis on tackling electronic channel based frauds.
Focus includes creating an organizational structure for fraud risk management
and a special committee for monitoring large value fraud.


7. Business Continuity Planning : focuses on policies, standards and procedures

to ensure continuity, resumption and recovery of critical business processes.
Also, this topic emphasizes implementing a framework to minimize the
operational, financial, legal, reputational and other material consequences arising
from such a disaster.
8. Customer Education: the need to implement consumer awareness framework
and programs on a variety of fraud related issues.
9. Legal Issues: defines the need to put effective processes in place to ensure that
legal risks arising from cyber laws are identified and addressed at banks. It also
focuses on board's consultation with legal department on steps to mitigate
business risks within the bank.

Types of Charges : Very simple way

Purpose, Various types of charges:
1. Pledge - It is used when the bank (or, lender, known as pledgee) takes
actual possession of the securities, such as goods, certificates, golds,
etc, (you provide it to bank to avail loan) which are generally movable in nature.

Bank keeps the securities with itself, and provide loan to you.
Bank will return the securities (possession of goods) to you (borrower,known
as pledgor), after you repay all the debts (i.e., loan) to the bank. In case you
are unable to pay back, then the bank has the right to sell the assets,
and recover the loan amount (with interest).
Example - Gold loans, Jewellry loans, warehouse finance.
2. Hypothecation - It is used when you (borrower) have the
actual possessionof the asset, for which you have taken the loan. Generally,
this is charged against loans for movable assets, like car, bus, etc.
(i.e., vehicle loans). Here, the assets (bus, car, etc.) remain with you, and you
are hypothecated to the bank for the loan granted.
In case you are unable to repay the loan amount, then the bank has the right
to sell the asset (bus, car, etc.), (which is possessed by you) and recover the
total amount (with interest).
Example - Car loans, Bus loans, etc.
3. Mortgage - It is used when you (borrower) have the
actual possession of the assets, for which you are granted loan (e.g., house
loan), or against whichyou are granted loan (e.g., house
mortgaged). Mortgages are generally those assets, which
are permanently attached with Earth surface, like house, land, factory etc.
In case you are unable to repay the loan amount, the bank has
the right to seize and sell the mortgage, and recover the loan amount (with
interest).

Large Exposures Framework full details

Large Exposures Framework

1. Introduction

1.1 A bank’s exposures to its counterparties may result in concentration of its assets to a single counterparty or a group of connected counterparties. As a first step to address the concentration risk, the Reserve Bank, in March 1989, fixed limits on bank exposures to an individual business concern and to business concerns of a group. RBI’s prudential exposure norms have evolved since then and a bank’s exposure to a single borrower and a borrower group is currently restricted to 15 percent and 40 percent of capital funds respectively. A comprehensive policy framework on the subject is consolidated in the Master Circular – Exposure Norms/Master Direction - Prudential Norms on Banks’ Exposures.

1.2 In January 1991, the Basel Committee on Banking Supervision (BCBS) issued supervisory guidance on large exposures, viz., Measuring and Controlling Large Credit Exposures. Further, the Core Principles for Effective Banking Supervision (Core Principle 19), published by BCBS in October 2006 (since revised in September 2012) prescribed that local laws and bank regulations set prudent limits on large exposures to a single borrower or a closely related group of borrowers. In order to foster a convergence among widely divergent national regulations on dealing with large exposures, the BCBS issued the Standards on ‘Supervisory framework for measuring and controlling large exposures’ in April 2014. The Reserve Bank has decided to suitably adopt these standards for banks in India and, accordingly, the instructions on banks' Large Exposures (LE) is described in the following paragraphs.

LARGE EXPOSURES FRAMEWORK (LEF)

LARGE EXPOSURES FRAMEWORK (LEF)
The following write up on Large Exposures Framework (LEF) is based on RBI
Notification No. RBI/2016-17/167 DBR.No.BP.BC.43/21.01.003/2016-17 dated December
1, 2016. Candidates are advised to refer to the Notification for additional details.
In order to align the exposure norms for Indian banks with the BCBS standards, RBI has laid
down the guidelines on Large Exposures Framework on December 1, 2016. The guidelines are
aimed at significant tightening of norms pertaining to concentration risks of banks, especially
in relation to large borrowers. The guidelines come into effect from April 1, 2019.
A large exposure is defined as any exposure to a counter-party or group of counter-parties
which is equal to 10 per cent of the bank’s eligible capital base (defined as tier-I capital).
LARGE EXPOSURE LIMITS
Single Counterparty: The sum of all the exposure values of a bank to a single counterparty
must not be higher than 20 percent of the bank’s available eligible capital base at all times. In
exceptional cases, Board of banks may allow an additional 5 percent exposure of the bank’s
available eligible capital base. Banks shall lay down a Board approved policy in this regard.
Groups of Connected Counterparties: The sum of all the exposure values of a bank to a
group of connected counterparties, as defined below, must not be higher than 25 percent of the
bank’s available eligible capital base at all times.

Information Technology (Amendment) Act, 2008 full details

Information Technology (Amendment) Act, 2008
BRIEF HISTORY
The Indian Information Technology Act 2000 (“Act”) was a based on the Model Law on Electronic Commerce adopted by the United Nations Commission on International Trade Law[1]; the suggestion was that all States intending to enact a law for the impugned purpose, give favourable consideration to the said Model Law when they enact or revise their laws, in view of the need for uniformity of the law applicable to alternatives to paper-based methods of communication and storage of information. Thus the Act was enacted to provide legal recognition for transactions carried out by means of electronic data interchange and other means of electronic communication, commonly referred to as "electronic commerce", which involved the use of alternatives to traditional or paper-based methods of communication and storage of information, to facilitate electronic filing of documents with the Government agencies. Also it was considered necessary to give effect to the said resolution and to promote efficient delivery of Government services by means of reliable electronic records. The Act received the assent of the President on the 9th of June, 2000.

The Act was subsequently and substantially amended in 2006 and again in 2008 citing the following objectives:
• With proliferation of information technology enabled services such as e-governance, ecommerce and e-transactions, protection of personal data and information and implementation of security practices and procedures relating to these applications of electronic communications have assumed greater importance and they require harmonization with the provisions of the Information Technology Act. Further, protection of Critical Information Infrastructure is pivotal to national security, economy, public health and safety, so it has become necessary to declare such infrastructure as a protected system so as to restrict its access.
• A rapid increase in the use of computer and internet has given rise to new forms of crimes like publishing sexually explicit materials in electronic form, video voyeurism and breach of confidentiality and leakage of data by intermediary, e-commerce frauds like personation commonly known as Phishing, identity theft and offensive messages through communication services. So, penal provisions are required to be included in the Information Technology Act, the Indian Penal Code, the Indian Evidence Act and the Code of Criminal Procedure to prevent such crimes.
• The United Nations Commission on International Trade Law (UNCITRAL) in the year 2001 adopted the Model Law on Electronic Signatures. The General Assembly of the United Nations by its resolution No. 56/80, dated 12th December, 2001, recommended that all States accord favorable consideration to the said Model Law on Electronic Signatures. Since the digital signatures are linked to a specific technology under the existing provisions of the Information Technology Act, it has become necessary to provide for alternate technology of electronic signatures for bringing harmonization with the said Model Law.
• The service providers may be authorized by the Central Government or the State Government to set up, maintain and upgrade the computerized facilities and also collect, retain appropriate service charges for providing such services at such scale as may be specified by the Central Government or the State Government.

Today's KYC aml recollected questions

KYC/AML recollected questions 8-7-18

Paper was difficult & twisted.

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DC MSME schemes very important

Development Commissioner (DC-MSME) Schemes
Related scheme: 1. Credit Guarantee
Description Ministry of Micro, Small and Medium Enterprises, GoI and Small Industries
Development Bank of India (SIDBI), established a Trust named Credit Guarantee Fund Trust
for Micro and Small Enterprises (CGTMSE) to implement Credit Guarantee Fund Scheme for
Micro and Small Enterprises. The corpus of CGTMSE is being contributed by GoI and SIDBI.
Nature of assistance Collateral free loans up to a limit ofRs.50 lakh - for individual MSEs
Who can apply Both existing and new enterprises are eligible to be covered under the scheme.
How to apply Candidates meeting the eligibility criteria may approach banks/financial
institutions, which are eligible under the scheme, or scheduled commercial banks and select
Regional Rural Banks.
Related scheme: 2. Credit Linked Capital Subsidy (CLCS) forTechnology Upgradation
Description Technology upgradation would ordinarily mean induction of state-of-the-art or near
state-of-the-art technology. In the varying mosaic of technology obtaining in more than 7,500

MSME organizational set up

Organisational Setup
The M/o MSME has two Divisions called Small & Medium Enterprises (SME) Division and Agro &
Rural Industry (ARI) Division. The SME Division is allocated the work, inter- alia, of administration,
vigilance and administrative supervision of the National Small Industries Corporation (NSIC) Ltd., a
public sector enterprise and the three autonomous national level entrepreneurship
development/training originations. The Division is also responsible for implementation of the
schemes relating to performance and credit rating and assistance to training institution, among
others. SME Division is also responsible for preparation and monitoring of Results Framework
Document (RFD) as introduced in 2009 by the Cabinet Secretariat under Performance Monitoring
and Evaluation System (PMES). The ARI Division looks after the administration of two statutory
bodies viz. the Khadi and Village Industries Commission (KVIC), Coir Board and a newly created
organization called the Mahatma Gandhi Institute for Rural Industrialization (MGIRI). It also
supervises the implementation of the Prime Minister's Employment Generation Programme
(PMEGP).

MSME institutional frame work and overview

INSTITUTIONAL FRAMEWORK & MSME Financing

The importance of MSMEs is recognised in the 12th five year plan for 'faster, sustainable and more
inclusive Growth (Planning Commission, 2011). It is understood that MSMEs provide a vehicle to
build more inclusive growth, with higher disbursement compared to larger scale enterprises. With
MSMEs, comes the opportunity for unrestricted creativity and innovation driven by individual of
entrepreneurship. Backed by Hon'ble Prime Minister Shri Modi's ambitious 'Make in India'
campaign, there are number of growth advantages that MSMEs can benefit from. They have
significantly higher labour to capital ratios and as such offer significant opportunities for job
production, as well as growth through rural urbanisation which comes as a result of a strong
degree of operational flexibility. The MSME sector remains one of the most cost-effective
employment creation resources. A number of capital resources can be mobilised by the increased
spread of entrepreneurship that would otherwise have been left immobile. Similarly, with
increased MSME job production comes the opportunity to utilise the nation's skills that may have

MSME CDP very important for exam

MSE-CDP
Micro & Small Enterprises - Cluster Development Programme (MSE-CDP)
The Ministry of Micro, Small and Medium Enterprises (MSME), Government of India (GoI) has adopted the Cluster Development approach as a key strategy for enhancing the productivity and competitiveness as well as capacity building of Micro and Small Enterprises (MSEs) and their collectives in the country. A cluster is a group of enterprises located within an identifiable and as far as practicable, contiguous area and producing same / similar products / services. The essential characteristics of enterprises in a cluster are (a) Similarity or complementarity in the methods of production, quality control and testing, energy consumption, pollution control, etc (b) Similar level of technology and marketing strategies / practices (c) Similar channels for communication among the members of the cluster (d) Common challenges and opportunities.

Objectives of the Scheme:

(i) To support the sustainability and growth of MSEs by addressing common issues such as improvement of technology, skills and quality, market access, access to capital, etc.

ii) To build capacity of MSEs for common supportive action through formation of self help groups, consortia, upgradation of associations, etc.

(iii) To create/upgrade infrastructural facilities in the new/existing industrial areas/ clusters of MSEs, including setting up of Flatted Factory Complexes.

(iv) To set up common facility centres (for testing, training centre, raw material depot, effluent treatment, complementing production processes, etc.)

Components:

(i) Setting up of CFCs: Creation of tangible “assets” as Common Facility Centers (CFCs) like Common Production/Processing Centre (for balancing/correcting/improving production line that cannot be undertaken by individual units), Design Centres, Testing Facilities, Training Centre, R&D Centres, Effluent Treatment Plant, Marketing Display/Selling Centre, Common Logistics Centre, Common Raw Material Bank/Sales Depot, etc. The GoI grant will be restricted to 70% of the cost of project of maximum Rs 15.00 crore. GoI grant will be 90% for CFCs in NE & Hill States, Clusters with more than 50% (a) micro/ village (b) women owned (c) SC/ST units.

(ii) Infrastructure Development: Consist of projects for infrastructural facilities like power distribution network, water, telecommunication, drainage and pollution control facilities, roads, banks, raw materials storage and marketing outlets, common service facilities and technological backup services for MSEs in the new/ existing industrial estates/areas. The GoI grant will be restricted to 60% of the cost of project of Rs 10.00 crore. GoI grant will be 80% for projects in NE & Hill States, industrial areas/ estates with more than 50% (a) micro (b) women owned (c) SC/ST units.