Forex basics

Foreign Exchange basic numerical

1)  TOD rate or Cash Rate Same day (it is also called ready rate)

TOM Rate Next working day

Spot Rate 2nd working day (48 hours)

Forward Rate After few days/months

 If Next day or 2nd day is holiday in either of the two countries, the

settlement will take place on next day. For example Spot deal is

stuck on 23rd Dec. 25th is Christmas Day and 26th is Sunday. Under

such circumstances, value date will be 27th i.e. Monday.

 There are two types of rates- Fixed and Floating. Floating rates are

determined by market forces of Demand and Supply. India

switched to Floating exchange rates regime in 1993.

2) Buy Low Sell High (Direct Quotations)

Buy rate is also called Bid Rate and Sell Rate is called Offer Rate.

Buy High Sell Low (Indirect Quotations)

 When Local Currency is fixed, bank will like to have more foreign

currency while buying and give less foreign currency while selling.

3) Direct Rates Indirect Rates

1 US $ = Rs.49.40 Rs.100 = US $ 2.51

DIRECT QUOTATION

In a direct quotation, there is a variable unit of the home currency and fixed unit of the foreign currency.

When it is quoted that 1 US = Rs.49.10, it is a direct quotation.With a view tomake profit, the rule

followed for quotation is buy low and sell high. For instance, if the US $ is purchased at Rs.48.90 and

sold at Rs.49.10, there will be gain to the dealer. By buying low, the dealer will be required to pay

lesser units of home currency and by selling high, he would receivemore units of home currency.

INDIRECT QUOTATION

In an indirect quote, there is fixed unit of home currency and a variable unit of foreign currency.When

Rs.100 = US $ 2.04 is quoted, it is a case of indirect quotation. The principle followed in indirect

quotation to earn profit is to buy high and sell low. By buying high, the dealer will getmore US $ per

Rs.100 and by selling low he would have to part with lesser US $.

4) TWO WAY QUOTATIONS : Banks quote two rates in foreign exchange quotation out of which one is for

buying and the other for selling. For instance, when the quotation is US $ 1 = Rs.48.90 - 49.10, the buying

rate on the basis of principle of buy low and sell high, would be Rs.48.90 and the selling rate Rs.49.10.

The buying rate is also called a 'bid rate' and the selling rate as 'offer rate'.



5)CROSS RATES OR CHAIN RULE : When rate between two currencies is not directly available, it has

to be calculated through a 3rd currency which is called cross rate. This is done by using chain rule.

For example, US $ 1 = Rs.50.00 and US $ 1 = Euro 0.7500. Euro 1 = 50 / 0.75 = Rs.66.67

A bank is offered to purchase an export bill of Pound 100000 and the inter-bank rates are US $

1 = Rs.50.00/10 and Pound 1 = US $ 1.5000/10.

In this case, the bank will purchase pounds at given US $ rate of Rs.50 and deliver rupees to exporter.

Bank will sell pounds in London in inter-bank market at US $ 1.50. The amount will be worked with chain

rule. Pound 1 = 1.50 x 50 = Rs.75.



6) Date of Contract Delivery

   Date / settlement

date

                                       Rate to be used

Oct 12, 2008 Oct 12, 2008 Cash/ Ready Rate

Oct 12, 2008 Oct 13, 2008 Tom Rate

Oct 12, 2008 Oct 14, 2008 TT or Spot Rate

Exchangemargin—While selling or buying foreign exchange banks retain sufficientmargin to cover the

administrative cost, cover the exchange fluctuation and also tomake some profit on the transaction. This is

done by adding or reducing themargin fromthe prevailingmarket rate.



7) Forward Rates (Premium is  always added and Discount is always deducted from Spot Rate to

arrive at Forward Rate)

It is required when currency is exchanged after few months/days.

Buy Transactions :

Spot Rate (+ ) premium OR ( - ) Discount

( Lower premium is added OR Higher discount is deducted )

Sale Transactions:

Spot Rate (+ )Higher premium OR (-) Lower discount

(So that currency may become cheaper while buying and dearer while

selling

In India, Forward Contracts are available for Maximum period

of 12 Months.


Examples of

Forward rates

Euro 1 = USD$1.3180/3190

Forward differentials:

1M = 15/18, 2M= 30/37, 3M=41/49

Calculate 2M Bid rate and 3M Offer rate

2M Bid rate = 1.3180+.0030 = 1.3210

3M Offer rate = 1.3190+.0049=1.3239



8) ExchangeMargin::

Exchange margin is deducted while buying and added while selling.

9) Direct, Indirect &Cross Rates

Direct Rates

Foreign Currency is fixed ---say 1USD = INR 55.70

Indirect Rates

Local currency remains fixed---say Rs. 100 = 1.93 USD

At present, following 4 currencies are quoted in Indirect mode:

EURO, GBP, AUD and NZ$

Cross Rates

Cross rate is price of currency pair which is not directly quoted. It is arrived

at from price of two other currency equations.

1. Suppose bank hasto Quote GBP against INR, but in India, GBP is

not quoted directly. In India,

1USD =48.10 and GBP/USD is quoted as 1GBP= USD1.6000.

Therefore 1 GBP = 48.10X1.6 = 76.96

2. An Import bill of GBP 100000 has to be retired. Rates are:

1 GBP=1.5975/85 USD

1USD = 48.14/15 INR

TT margin =.20%

Here Cross selling rate of both currencies will apply.

Bank has to remit GBP. GBP/USD Quote (Indirect) will be available in

International market whereas USD/Rupee Quote (Direct) is available in

local market. Bank will sell USD to buy GBP.

While buying GBP, bank would like to quote higher rate as Buy high Sell

Low maxim will apply. 1GBP = 1.5985

While selling USD, bank will opt to quote higher rate as Buy Low Sell High

maxim will apply.

1GBP=1.5985*48.15 = 76.9675 + Margin@.20% = 77.1214 (say

77.1225)



10) Per Unit and 100

Unit Quotes

All currencies are quoted as per unit of currency whereas the following

currencies are quoted as 100 units of Foreign currency:

1. Japanese Yen

2. Indonesian Rupiahs

3. Kenyan Schilling.

4. Belgian Francs

5. Spanish Peseta

Intervening Currencies in India

1. US Dollar

2. British Pond

Cross Rates

where two

markets are

involved and

one of them is

international

market

Suppose, In India, 1USD=42.8450/545 and in UK, 1USD=.7587/.7590

EURO. The customer intends to remit Euro and he desires to know 1 Euro

= ? INR. We will buy Euro against sale of USD. (One is domestic market

and other is International market)

Calculation

Sell rate of 1USD = .42.8545 and Buy Rate of Euro is 1USD=.7587

.7587Euro = 1USD = INR 42.8545

1 EURO = 42.8545/.7587 = 56.48

In India, there is Full Convertibility of Current Account transactions.

Example Where one currency is bought and another currency is sold

A wants to remit JPY 100.00 million at TT spot with margin @.15%. Given

USD/INR at 48.2500/2600 and in Japan USD/JPY = 90.50/60

Solution:

We will buy Japanese Yen and sell USD and the rate to be applied is:

48.2600/90.50 = .533260 per JPY

Rate per 100 JPY = 53.3260 + Margin @.15%(.0799) = 53.4059 (say

53.4050)

Following 4 types of buying and selling rates are important:

1.    TT Buying rate

2.    Bill Buying rate

3.    TT Selling rate

4.    Bill Selling rate



In Interbank market, exchange rate is quoted up to 4 decimals in multiples of 0.0025. e.g. 1USD=53.5625/5650



For customers the exchange rate is quoted in two decimal places i.e. Rupees and paisa. e.g. 1 USD =Rs. 55.54.



Amount being paid or received will be rounded off to nearest Rupee.



TT Buying Rate


It is required to calculate when our Nostro account is already credited or being credited without delay e.g. Receipt of DD, MT, TT or collection of Foreign bills. This rate is used for cancellation of Forward Sales Contract.

Calculation



Spot Rate –  Exchange Margin



Bill Buying Rate     Bill Buying rate is applied when bank gives INR to the customer before receipt of Foreign Exchange in the Nostro account i.e. Nostro account is credited after the purchase transaction. In such cases.



Examples are:

·         Export Bills Purchased/Discounted/Negotiated.

·         Cheques/DDs purchased by the bank.

Calculation



Spot Rate + Forward Premium (or deduct forward discount) – Exchange margin.



TT Selling RateAny sale transaction where no delay is involved is quoted at TT selling rate. It is desired in issue of TT, MT or Draft. It is also desired in crystallization of Export bills and Cancellation of Forward purchase contract.



Calculation



Spot Rate + Exchange Margin



Bill Selling Rate     It is applied where handling of documents is involved e.g.  Payment against



Import transactions:

Calculation



Spot Rate + Exchange Margin for TT selling + Exchange margin for Bill Selling





Examples

Q. 1

Bank received MT of USD 5000 on 15th Sep. The Nostro account was already credited. What amount will be paid to the customer: Spot Rate 34.25/30. Oct Forward Differential is 22/24. Exchange margin is .80%



Solution



TT buying Rate will be applied

34.25 - .274 = 33.976 Ans.

Q. 2

On 15th July, Customer presented a sight bill for USD 100000 for Purchase under LC. How much amount will be credited to the account of the Exporter. Transit period is 20 days and Exchange margin is 0.15%. The spot rate is 34.75/85. Forward differentials:


Aug: .60/.57

Sep:1.00/.97

Oct: 1.40/1.37

Solution


Bill Buying rate of August will be applied.



Spot Rate----34.75

Less discount .60

= 34.15

Less Exchange Margin O.15% i.e. .0512

=34.0988 Ans.


( Transit period is rounded to next month since currency will be cheaper as it is buy transaction)

Q. 3
Issue of DD on New York for USD 25000. The spot Rate is  IUSD = 34.3575/3825   IM forwardrate is 34.7825/8250

Exchange margin: 0.15%

Solution:

TT Selling Rate will Apply

Spot Rate = 34.3825                Add Exchange margin (.15%) i.e. 0.0516

TT Selling Rate = Spot Rate + Exchange Margin = 34.4341 Ans.



Q. 4On 12th Feb, received Import Bill of USD-10000. The bill has to retired to debit the account of the customer. Inter-bank spot rate =34.6500/7200. The spot rate for March is 5000/4500. The exchange margin for TT selling is .15% and Exchange margin for Bill selling is .20%. Quote rate to be applied.


Solution

Bill Selling Rate will be applied.


Spot Rate + Exchange margin for TT Selling + Exchange margin for Bill selling = 34.7200+.0520+.0695 = 34.8415 Ans.



Forward Contract – Due date and Transit period (Bill Buying Rates and Bill Selling Rates)

If due date after adding transit period and forward period falls in a particular month



Buy Transactions



Quote rates applicable to lower month (if currency is at premium) and same month (if currency is at discount) due to the reason that currency becomes cheaper and Buy low and Sell High



Sale Transactions



Quote rates applicable to Same month (if currency is at premium) and lower month (if currency is at discount) due to the reason that currency becomes dearer and Buy low and Sell High Forward contracts can be booked by Resident Individuals up to USD1lac.



Buy



Spot Rate on 16.07.2012 is 1 USD = 34.6850/7275



Transactions-



Spot August = 4000/4200,

Spot Sep = 7500/7700,  Spot Oct = 1.05/1.07

Currency at



Spot Nov =1.40/1.42





Premium



Transit Period = 25 days ,

Exchange Margin = 0.15%



Transit Period is



Calculate Forward Buying Rate of 3 M Usance bill.



rounded off to lower month in



Due date of realization of Bill = 16.7.2012 + 3M + 25 days = 9.11.2012

which due date



By Rounding Transit period to lower month, Oct Rate will be as under:

falls



34.6850+1.05 - .0536 (exchange margin) = 35.6814



Buy



On 22.7.2013,





Transactions-



Spot Rate is 35.6000/6500

Forward 1M=3500/3000

2M=5500/5000

Currency at



3M=8500/8000





Discount



Transit Period ----20 days

Exchange Margin = 0.15%.







Find Bill Buying Rate & 2 M Forward Buying Rate



Transit Period is rounded off to 
Solution


same month in



Bill Buying Rate (Ready) : Bill Date +20 days = 11.8.2013



which due date


Spot Rate = 35.6000 Less Forward Discount 1M (0.3500) Less Exchange

falls



Margin 0.15% (0.529)



i.e. 35.6000-.3500-.0529(0.15% of 35.2500) = 35.1971


2 M Forward Buying Rate:  = Transaction date +2M +20 days =11.10.13

3 Month Forward Buying Rate will be applied.



Spot Rate = 35.6000 Less Forward Discount of 3M (.8500) Less Exchange Margin (.0521)

i.e. 35.6000-.8500-.0521(0.15% of 34.7500) = 34.6979 Ans.



Cancellation of



Deal                         Cancellation of Buy contract is done at TT selling rate and cancellation of Sale contract is done at TT buying rate.



Example



A bank purchased export bill of USD 50000 at Rs. 42.66, which was dishonored for non-payment. How much amount will be recovered from exporter, if Spot rate is 42.2000/3000. Exchange margin is 0.15%.



Solution



TT  selling rate will be applied to recover the amount TT Selling rate= Spot rate +Exchange margin



=42.3000+0.06345 = 42.36345= 42.3625 (Rounding off to nearest .0025)

Amount to be debited to customers‟ account =50000*42.3625=2118125 --------------Ans.



Value Date



It is date on which payment of funds or entry to an account becomes effective. Under TT transaction, value date is same. In other spot and forward contracts, Value Date is the date when Nostro Account is actually credited.




Arbitrage



It consists of purchase of one currency in one center accompanied by


immediate resale against same currency at other center.

Per Cent and Per



1% is on part of 100 whereas per mille is 1 part of thousand

Mille

AuthorizedDealers



Authorized dealers are called Authorized Persons. The categories are as


under:

AP category 1 -----AD banks, FIs dealing in Forex transactions.


AP  category  2-----Money  changers  authorized  to  sell  and  purchase


Foreign currency notes, TCs and Handle remittances.


AP  category  3----Only  purchase  of  Foreign  currency  and  Travelers



Cheques. These were earlier called “Restricted Money Changers.”



Forward Point

Spot Rate


Calculation



Euro 1 = US$1.3180

3 Month Forward Rate

Euro 1 = US$1.3330


Forward Point = 1.3330 – 1.3180 = 150 points


Arbitrage &;



It consists of purchase of one currency in one center accompanied by

Forward Point



immediate resale against same currency at other center.

Calculation



Example:


Let us borrow from one center and lend at other center at higher rate. In

USA, rate of interest is 6% whereas in Germany, rate of interest is 3% for EURO. We will borrow from Germany and lend in USA where 1EURO =1.5 USD



Forward Point Calculation for 3 Months



Spot Rate x Interest rate difference x Forward Period 100 x Nos. of days in a year



= 1.5 x 3 x 90

100*360

=0.01125



3 month swap rate = 1.5 + 0.01125 = 1.5112

Calculation of Interest Differential



Forward Points x Nos. of Days x 100

Forward Period x Spot Rate



=  0.01125 x 360 x 100

=3%

1.5 x 90


Some additional examples
Ex.1

Calculate TT selling rate for GBP/INR, if USD/INR is 43.85/87 & GBP/USD is 1.9345/49. A

margin of 0.15% is to be loaded.

Solution ; TT selling rate of GBP/INR



1 GBP = 1.9349 USD

= (1.9349 *43.87)+Margin 0.15%

=84.8841+.1273=85.0114 INR 85.0114-------------------------Ans.



Ex.2



A foreign correspondent intends to fund his Vostro Account maintained with Mumbai branch of SBI. What rate will be quoted if 1 USD = 44.23/27 and margin is 0.08% Solution : TT buying rate will quoted



44.23-.035 = 44.195 ---------------------------------------Ans.



Ex.3



If Swiss Franc is quoted as USD = CHF 1.2550/54 and in India, USD =INR43.50/52, how much INR will exporter get for his export bill of CHF 50000.

Solution :



Swiss Franc will be sold for USD in overseas market and USD will be bought in local market i.e. Sell Rate of CHF and Buy rate of USD.(Buy Low Sell High in both quotations)



1 USD = 1.2554 CHF           and  1USD=INR 43.50



1CHF=43.50/1.2554 = 34.6503

Amount as paid to exporter = 34.6503*50000=17,32,515/- ----------------Ans.



(Both are direct quotations and Maxim Buy Low Sell High will apply in both)

Ex.4



If Swiss Franc is quoted as USD = CHF 1.2550/54 and USD =INR43.50/52, how much INR will Importer pay for his import bill of CHF 50000.

Solution :



Swiss Franc will be bought against USD in overseas market and USD will be sold in local market i.e. Buy rate of CHF and Sell rate of USD.



1 USD = 1.2550 CHF and 1USD=INR 43.52 1CHF=43.52/1.2550 = 34.6773



Amount to be received from Importer = 34.6773*50000 =17,33,865/- ----Ans.



(Both are direct quotations and Maxim Buy Low Sell High will apply in both)





Q. 5



Exporter received Advance remittance by way of TT French Franc 100000.



The spot rates are in India IUSD = 35.85/35.92               1M forward =.50/.60



The spot rates in Singapore are 1USD = 6.0220/6.0340 1M forward =.0040/.0045 Exchange margin = 0.8%



Solution



Cross Rate will apply

USD will be bought in the local market at TT Buying rate and sold at Spot Selling Rates in

Singapore for French Francs:



TT  Buying Rates USD/INR = Spot rate – Exchange margin = 35.8500-.0287 = 35.8213 Spot Selling Rate for USD/Francs = 6.0340



Inference:



6.0340 Franc = 1USD

= INR 35.8213

1 franc = 35.8213/6.0340 = INR 5.9366 Ans.



(Both are direct quotations and Maxim Buy Low Sell High will apply in both)



Q.6 What rate will be quoted for repatriation of FCNR deposit (spot rate or TT rate) Ans. No rate as the amount is to be paid in Foreign currency itself.

What is priority lending certificate?

What is priority lending certificate?
The priority sector lending certificates are certificates issued by banks that have over reached their priority sector
lending targets. PSLCs thus can be issued only up to the extent of their over lending to the stipulated sectors. Buyers of
PSLCs are usually those banks who could not meet their priority sector lending targets. The price of PSLCs will be
determined on the basis of demand and supply that will be reflected in the auction under the RBI‟s e-Kuber training
platform.
As per RBI guidelines, Banks can issue four types of PSLCS including three subsector PSLCs – agriculture, small and
marginal farmers, micor enterprises and one PSLC for general.

CRILC : Central Repository of Information on Large credits

CRILC : Central Repository of Information on Large credits
In a bank or financial institution, performing asset do not get converted to non-performing, overnight. There are some early signs of
distress which if ignored, can lead to delinquency. With strong systems in place, warning signs can be recognized well in advance to
prevent problems and also alert other players within the system, to curb the negative effects. Hence, monitoring NPA is of immense
importance for a Lender and the regulator. To help overcome some of the challenges, RBI, introduced in 2014, u/s 27(2) of BR Act
1949 the "Central Repository of Large Common Exposures-Across Banks” by subsuming the erstwhile quarterly Form A return on
Large Borrowers (Rs 100 million and above).
Objective of creation of CRILC: To collect, store and share information with Lenders w.e.f. 01.04.2014.
What do Financial Institutions have to Report under CRILC? Banks and financial institutions have to separately send CRILCMain
and CRILC-SMA2.
I. CRILC-Main, is a monthly submission w.e.f. 1.4.2018 (earlier quarterly) that comprises four sections namely:
a. Section 1: Exposure to large borrowers (Rs.5 cr or above)
b. Section 2: Reporting of technically/prudentially written-off accounts,
c. Section 3: Reporting of balance in current account (Rs.1 cr or more)
d. Section 4: Reporting of non-cooperative borrowers.
II. CRILC-SMA 2 : Apart from above regular monthly submissions, banks are to submit this report on an ‘as and when’ basis, i.e.
whenever a large borrower’s account becomes overdue for 61 days (SMA2).
RAF Accounts : In addition banks are to send report on loan accounts markeed Red Flagged or classified as Fraud Account with a
threshold exposure of Rs.500 million or more at the level of a bank irrespective of the lending arrangement (whether solo banking,
multiple banking or consortium), together with the dates on which the accounts were classified as such.
Filing Dates for CRILC Submissions?
1. The CRILC-Main Report is required to be submitted on a monthly basis effective April 1, 2018.
2. In addition, the lenders shall report to CRILC, all borrower entities in default (with aggregate exposure of Rs. 50 million and
above), on a weekly basis, at the close of business on every Friday, or the preceding working day if Friday happens to be a
holiday. The first such weekly report shall be submitted for the week ending February 23, 2018.
How Can Banks Benefit with CRILC Data?
i) RBI shares the CRILC data with all lending institutions which help lenders to look at and tackle their NPA.
ii) Lending banks can also search whether their borrower customers are having current account with other banks, with large
balances.
Banks opening a current account of a large corporate, can use the data available in the CRILC platform to know whether the
customer is availing credit facility from another banks.

Important Forex

NOSTRO Account of a domestic bank outside the country. Say, a/c of SBI with Citibank in New York in $. h,50
called our account with you.
VOSTRO Account of a foreign bank in domestic area. Say Citibank a/c with SBI in New Delhi in Indian Rupee. Also
called your account with us.
LORO NOSTRO & VOSTRO account of other banks are LORO account for a bank. Also called their account with
them. SBI a/c or Citibank a/c in above example are LORO account for PNB.
Categorisation of branches for forex business


A Branch that maintains NOSTRO & VOSTRO accounts
B Branch that does not maintain NOSTRO & VOSTRO accounts but could operate such accounts maintained
by A category branch
C Branch that conducts its business through A or B class branches
Gain or loss to parties in exchange rate movem n
Party FC rate appreciation FC rate depreciation
Exporter (who has forex) Gains Loses
Importer (who need forex) Loses Gains
Bank with overbought position Gains Loses
Bank with oversold position Loses Gain


Positions in Foreign Currency

Where no balance is receivable or payable (sale = purchase) Closed position
Balance is either receivable or payable (i.e. sale > purchase or purchase > sale) Open position
Where sale > purchase (oversold) Short position
Where purchase > sale (over bought) Long position

Oversold (Short) position is squared by Purchase of foreign currency
If rates are appreciating Bank incurs loss
If rates are declining Bank gains
Overbought or Iong Position is squared by
If rates are increasing Bank gains
If rates are declining Bank incurs loss
Balance in hand during day time (it is more than balance at close of a day) Day light position
Balance in hand at close of the day Overnight position

#Some_Important_Acts

#Some_Important_Acts

�NEGOTIABLE INSTRUMENTACTS -1881

⚫Section 4 :- Promissory Notes

⚫Section 5 :-Bill of Exchange

⚫Section 6 :- Cheque

⚫Section 13 :- Negotiable instrument

⚫Section 123 :- Cheque Crossed Generally

⚫Section 124,126 : -Cheque Crossed Specially

⚫Section 130 : -Cheque bearing Not Negotiable

⚫Section 118 :- Presumption as to Negotiable instrument

�RESERVE BANK ACT (RBI ACT 1934)

⚫Section 17 :- Define Banking Business

⚫Section 18 :-Deals With Emergency Loan To Bank

⚫Section 22 :-Exclusive Rights To Issue Currency Notes In India

⚫Section 24 :-Maximum Denomination a Note Can Be Rs 10,000

⚫Section 26 :- Describe The Legal Tender Character of Indian Bank Notes

⚫Section 28 :-Form Rule Regarding The Exchange Of Damaged and imperfect Notes

⚫Section 31 :-In India only RBI or the central government issue and accept promissory notes that are payable on demand

⚫Section 42 :-Every schedule bank must have an average daily balance with RBI

�BANKING REGULATION ACT -1949

⚫Section 10 :-Power of RBI to appoint chairman of banking company

⚫Section 11 :-Recruitment as to minimum capital and reserve.

⚫Section 12 : -Regulation of Paid of capital, authorized capital,voting rights of shareholder

⚫Section 21 :-To control advances by banking company

⚫Section 21(A) : - Rate of interest charged by banking company

⚫Section 22 :- license of banking company

⚫Section 23 :-Restriction on opening transfer of business

⚫Section 29 :-Account and balance sheet

⚫Section 36 :-Power of central government to acquire banking company in a certain case

⚫Section 44 :-Amalgamation of banking company

⚫Section 47 :-Power of RBI to impose penalty

�Some Other Important Acts Related To Banking -

⚫SBI ACT: -1955

⚫SBI SUBSIDIARY ACT: - 1959

⚫DICGC ACT :- 1961

⚫EXIM ACT: - 1981

⚫NABARD ACT: - 1981

⚫RRB ACT: - 1976

⚫NHB ACT: - 1987

⚫SIDBI ACT :- 1989

⚫SARFASI ACT :- 2002

⚫FEMA ACT: - 1999

⚫CREDIT INFORMATION CORP :- 2005

⚫PMLA ACT: -2002

JAIIB today's exam recollected 04 November 2018 ...Link will be continuously updated

JAIIB today's exam recollected 04 November 2018 ... Link will be continuously updated

1.Two questions on Basel 2 and 3 ... each 2 marks question

2.NEFT and RTGS details for 4questions

3.Can you accept it with as NEFT or RTGS or vice versa

4. Sections are asked from NI Act  around 6 questions
5.PMDJY - 3Qtns
6.A has dream cheque at Delhi, and sent for clearing to bank Y where he has his AC, it was returned due to insufficient funds 
Which Court A can approach
A resident location
Delhi
Y Bank
7.Mandate holder features in two questions
8.Can Two minors open a Joint AC?
9.LC issued for 10 lakh, at the time payment it was found in the bills mentioned as 10.90.. can it be acceptable or not   Answer Accept
10.Use of DRS system to CBS
11.Matching of 
Lien
Set off
Pledge
Appropriation 
with 

Rights of Physical property FD created before maturity of loan
12.Where as ASBA can be used
13.One qtsn Selective Credit Control.
Asked to find out which is not a feature of SCC
14.No of Cycle of a Product
15.Stages of Product   ..4
16.What's your reason while accept/not to accept to provide an acknowledgement for Loan request
17.Electronics chq is defined under sec...
18.Sec 6 ni act
19.Which asset cannot assign for loan?
Book Dept
LIC
Share certificate
Copy rights**
20.Minimum credit rating of company for issue CP should be _ 
A1
AAA
Aa1
A3**
21.Asset of mutual fund are held by 
Custodian**
Registar
Trusstee
Amc
22.Corporate security dealt with  __market    money market
23.Codes which are withdrawn by RBI?

24.Question related to bcsbi was there..
25.Which one is stamp duty
Lc
Bill purchase
Bank guarantee**
Bill discounting

26.A partner acts as agent of firm is called______
27.In call money what% can commercial bank take an advance?125
28.Electronic cheque is defined in section 6

29.Under LRS resident can remit______
30.. Servuction means what, 
31. Pull strategy pull means demand, supply, price, quality. 
32. Who introduces NEFT. 
34. in joint account nominee is their A expired in that what you will do. 
35. Kotler  marketing defination.
36.Forfiating,factoring
37.BG

                                            

                                             

                                            

MSME todays recollected questions 03.11.2018

MSME todays recollected questions 03.11.2018
*Fiwe headquarters?
*Sarfaesi act in the year?
*Mudra is being regulated by?
*Qns from shishu,kishore,tarun limits?
*WTO in the year?
*One time settlement is under the control of?
*Loss asset?
*Penal measures for wilful defaulters?
*Potentialy viable?
*Symptoms of incipient sickness?
*Qns.from internal and external causes of sickness?
*When an enterprise is considered as sick ?
*Rehabilitation package within 6 months?
*SEEDA as an enterprise hub network party to assist in n/w ing btwn firms?
*ITCOT in ..tamilnadu?
*Number of stages of credit process?
*A problem from clcss subsidy calculation?
*TUF sponsored by ministry of textiles?
*Diffusion effect?
*Credit rating for small industries being provided by?
*Qns from debt equity ratio and debt service coverage ratio?
*Impact of lower break even point... adequate margin of safety?
*Working capital gap?
Important C in 5C's of management appraisal?
*Back to back LC?
*Red clause LC ....extending an unsecured credit to the seller?
*Preshipment advance?
*Qns from bank guarantee types?
*Composite loan limit?
*Mahila vikas nidhi?
*Alternative sources of capital...angel,venture etc?
*Iso 9000 reimbursement?
*Disposal of loan application time limit with amount?

PPB- BANK SPECIAL RELATIONSHIP

PPB- BANK SPECIAL RELATIONSHIP

✅1. A mandate (an unstamped agreement) is an authority given by the account holder in favour of a third person to do certain acts on his behalf.

✅2. Institutions cannot issue mandate, instead they issue a power of attorney.

✅3. Power of Attorney is a legal document (as it is a stamped document and is executed in the presence of a notary public/magistrate of a court/authorized government official) executed by one person called donor (principal) in favor of another person called donee agent to act on behalf of the former, as per the authority given in the document.

✅4. Donee means the person who issues Power of Attorney and donor means the person to whom Power of Attorney is given.

✅5. General/universal power of attorney is issued for acting in more than one transaction while special/limited Power of Attorney is issued for only one transaction.

✅6. Garnishee order is an order of the court obtained by a judgement creditor attaching the funds belonging to a judgement debtor (customer) in the hands of his debtors, including a bank, who is called a garnishee, advising not to release the money until directed by the court to do so.

✅7. Cheques presented after service of the garnishee order should be returned with the ?refer to drawer? remark.

✅8. Preliminary proceedings of a court are called garnishee order nisi.

✅9. Subsequent proceedings of a court are called garnishee absolute.

✅10. When a bank has a prior right to set-off, the bank is not bound by the garnishee order.

✅11. When a lien is marked on fixed deposit receipts, it cannot be attached by a garnishee order.

✅12. Any excess over the lien is attachable by the garnishee order.

✅13. Orders received from the court for recovery of certain debts are called garnishee order.

✅14. Orders received from the revenue authorities (income tax/sale tax authority) are called attachment order.

✅15. Credits received after garnishee orders are not attachable because debts due or accruing at the time of receipt of order are only attachable.

✅16. In ""Joint Accounts"" with ""Either or Survivor"" clause, ""Garnishee Order"" if in a single name, cannot be attached.

✅17. In ""Joint Accounts"" with ""Former or Survivor"" clause, ""Garnishee Order"" if in a single name, can be attached.

✅18. The personal accounts of a partner can be attached with garnishee order for the firm?s debt.

✅19. The trust?s account cannot be attached garnishee order.

✅20. When a customer has more than 1 account and one is in credit and other is in debit, then the garnishee order can be attached only if the net result is in credit.

✅21. A lien is a right of the banker to retain possession of the goods and securities owned by the debtor until the debt due from the latter is paid.

✅22. The banker?s lien is an implied (understood) pledge (promise/guarantee).

✅23. In case of lien, the bank can sell the goods and securities in case the debt is not paid under section 171 of the Indian Contract Act 1872.

✅24. Lien cannot apply in safe deposit locker.

✅25. Set-off means adjusting debit balance in one account with an account having credit balance of the same customer.

✅26. A deceased credit account and a customer debit account cannot be combined.

Current Affairs on 03.11.2018

Today's Headlines from www:

*Economic Times*

📝 Loan in 59 minutes: Modi launches portal to ease credit for MSMEs

📝 CIL's supplies to power plants up 22 million tonnes in April-October

📝 BSE posts 4% rise in Q2 standalone total income at Rs 152.47 crore

📝 SBI to raise Rs 4,116 crore via Basel III bonds

📝 HAL to roll out more Tejas fighters from new facility

📝 India's Petronet, ONGC Videsh eye stake in Tellurian project

📝 Microfinance companies plan to create common pool of assets for securtisation

📝 L&T Construction bags Rs 138-cr order from Bengaluru Metro

*Business Standard*

📝 Apple posts flat growth in India in September quarter over weakening rupee

📝 Amazon's India marketplace unit posts nearly $1 billion loss in FY18

📝 Govt extends implementation of tracking system for export of drugs

📝 Tea producers, exporters cheer as India exempted from Iran sanctions

📝 Bharat Forge Q2 profit jumps 11.6% to Rs 2.28 bn; total income up 32%

📝 Satyam scam: Sebi asks Raju, three others to return Rs 8.13 billion

📝 Fresh H1-B hiring to get tougher, US introduces more stringent provisions

*Financial Express*

📝 Reliance Jio adds 1.3 crore users in September; Airtel, Vodafone, Idea lose over 1 crore customers

📝 Forex reserves down by USD 1.444 bn to USD 392.078 billion

📝 SAIL posts Rs 554-crore profit as earnings jump

📝 PFC profit rises 12% to Rs 1,325 crore in Q2, firm raises borrowing limit

📝 City Union Bank Q2 profit up 16%

📝 Pune civic body to raise Rs 1,000 crore via Muni Bonds

📝 Domestic turmoil may see ECB draw-downs sniffing at $35-40 billion by March: Icra

*Mint*

📝 No end to PNB woes as Q2 loss hits ₹4,532 crore

📝 Axis Bank’s profit up 83% at ₹790 crore in September quarter

📝 RBI allows banks to provide partial credit enhancement of NBFC bonds

📝 Adani Gas plans to invest ₹8,000 crore in next 5 years: Pranav Adani

📝 Indian Oil Q2 profit drops on higher forex, raw material costs

📝 Hindalco to invest $180 million in Brazil, close Aleris deal by April

📝 NTPC Q2 profit falls marginally, misses estimates

📝 Rural market presents $10-12 bn opportunity for e-commerce firms.

General banking JAIIB

1.Mutual Funds are controlled by: SEBI.
2.Duplicate DD should be issued within: 14 days from date of request.
3.Public Debt Office (PDO) is an ______: Autonomous body and Investment Banker to Central Govt.
4.What is the rate of TDS in case of Savings Bank deposit account as per Income Tax Act Section 80TTA : TDS is not applicable in
savings bank interest.
5.What is the rate of TDS in case the customer does not submit PAN card and 15G/ 15H : @ 20%.
6. Complaints under Consumer forum should be dealt with within (Where no testing of commodities is required) : 90 days
7.Locker Operation to be categorised under High and Low risk. In case of non-operation of such accounts for ____ and ______: 1
year and 3 years respectively.
8.Maximum deposit for allotting a locker: 3 year advance rent plus locker breaking charges.
9.What is the latest RBI directives for issuing DD for amount of Rs. 20,000 and above: It should Account Payee only.
10. RBI can issue bank note with highest denomination : Upto Rs. 10,000
11. Govt. of India can issue currency note in denomination of : Rs. 1
12. In FDR if the principal and interest is Rs. 20,000 or above it is not to be paid in cash as per: Section 269T of Income Tax Act.
13. SB /CD to be treated as inoperative if there are no transaction for over a period of: 2 years
14. If counterfeit notes up to _______ are detected in a single cash transaction in the bank branch, the bank should send a
consolidated report to the Police at the end of the month?: Less than 5.
15. Letter of Administration is issued by court when: A person dies without leaving a Will ( Intestate).
16. When is letter of administration issued:When a person dies intestate.
17. Differential rate of interest can be paid on fixed deposit if deposit is for: Rs.1.00 crore and above.
18. What is Hybrid debt instrument? a) Debenture b) Bond c) Preference shares d) Convertible Bonds*
19. Implied authority of a partner does not allow ______ singly? Settle a dispute relating to the business of the firm thru
arbitration.
20. If ____ number of counterfeit notes are detected in single transaction, a consolidated report sent to police station: Less than
5.
21. Under Ombudsman, on receiving the award both the bank and the complainant can appeal to the appellate authority in how
many days: 30 days.

22. TDS deducted for interest amount: If interest amount is above Rs 10,000/-.
23. Minimum subscription in PPF cannot be less than: Rs.500/-.
24. The single portal initiated by Ministry of Corporate Affairs for one stop solution for all Companies: MCA21.
25. The RBI is using _____ index of inflation for policy making: Consumer Price Index.
26. BCSBI is affiliated or regulated by? An independent body.
27. Certificate of Incorporation is: Not required in case of Pvt Ltd Co’s.
28. What is full form of IFRS: International Financial Reporting Standards.
29. General Insurance works on principle of: Spread of Risk.
30. Contract of Insurance is a contract of: Indemnity.
31. FIR to be filed if number of Counterfeit notes in a single deposit is: 5 or above.
32. Under RBI KYC directives, CFT stands for: Combating Financing of Terrorism
33. Full KYC is required at least once in __ yr in case of high risk customer: 2 years
34. Govt. of India issue which note : Re. 1
35. Letter of administration is issued by court when: there is no Will and there is estate to manage.
36. Time limit for preservation of record under KYC: 5 years from close of account in respect of records relating to opening of
account and 5 years from date of transaction in respect of transactions reported to FIU.
37. If Locker rent is Rs.7400/- per year, locker breaking charge:Rs.2000/-, how much Maximum deposit can be taken from the
lessee while allotting a locker?: Rs.24200/-
38. ALCO does not decide: Budgets and Targets
39. The focus of Asset Liability Management is: To protect Net InterestMargin.
40. A customer deposited huge amount in cash several times. When Branch manager enquired about the same, the customer did
not give the details. What should be done?: Report to FIU as part of Suspicious Transaction Repot.
41. When the letter of Administration is issued by court?: When the customer expired without writing will.
42. R Gandhi commitee related to: Urban Co-operative Banks (UCBs); to strengthen co operative banking structure.
43. Headquarter of world economic forum: Cologny, Switzerland
44. What payment bank cannot do: Lending
45. SLR w.e.f. 2016-17: 20.50%
46. Under Sovereign Gold Bond scheme maximum units acquired up to: 500 unit (i.e. 500 gm gold).
47. SCORES is related to - a)SEBI; b)IRDAI; C)PFRDA: SEBI. SCORES is Sebi's online platform that provides a centralised database of
all complaints.
48. In case of Fixed Deposits premature payment option is must for the deposit up to : Rs.15 lac
49. Scoring is related to which of the following - a.RBI. b.NSE c.PFRDA d. None of these:
50. Maximum foreign investment in Public sector bank: 20%
51. For Payment bank, Reliance Industries tie up with: SBI
52. Gold Monetisation Scheme: MTGD interest rate: 2.25%
53. Committee on Bankruptcy Law: T.K.Vishwanathan
54. Money market mutual fund regulated by? Earlier by RBI and now by SEBI
55. What is the target for CPI based inflation in Jan 2016?: 6%
56. Bhartiya Mahila Bank is a) Nationalized bank, b) Gramin bank, c) Public sector bank, d) Private bank: Public Sector Bank
57. Indian Currency Rupee is in circulation in two more countries. One is Nepal, the other is _______: Bhutan.
58. Why International Financial Reporting System (IFRS) should be implemented: For comparison of financials of companies
operating in two different international jurisdictions.
59. The value of a gift that can be given by banks to its customers cannot exceed rupees: Rs. 250
60. Which is not the function of ALCO: Achieving Budget target.
61. Maximum age under PMSBY: 70 Years.
62. Monthly consolidated report to Police in case of how many counterfeit notes: Detected upto 5 and above pieces in a
63. What is incorrect about RTI: Reason to be mentioned in RTI application.
64. Which of the following is not a case of bailment?: When cash is deposited with bank.
65. Full form of P-notes in financial jargon? Participatory Notes
66. International Financial Reporting System (IFRS) should be implemented: For comparison of financials of companies operating in
two different international jurisdictions.
67. After issuing a Garnishee Order by court, Bank is referred is _______: Garnishee.
68. What is Regressive Taxation: As the tax base increases or income increases, the taxation rate decreases.
69. The coins of which denomination have been released as part of the 125th birth anniversary year celebrations of Dr. B.R.
Ambedkar? (10 rupee and 125 rupee)
70. According to report of the Global Financial Integrity’s (GFI’s), India has been placed at which position in black money outflows

among the developing and emerging economies? (Fourth)
71. Who is the CEO of NITI Aayog? (Amitabh Kant)
72. Name the Central bank of U.S. (Federal Reserve System)
73. Who has been appointed as an Executive Director on the board of International Monetary Fund (IMF). (Former RBI Deputy
Governor Subir Gokaran)
74. Which bank has recently been pulled up by the CBI for disbursing Rs. 950 crore to KFA despite it having an unfavourable rating?
(IDBI Bank)
75. Name the New Finance Secretary: Ratan Watal.
76. NABARD undertakes supervision on which type of Bank: RRBs.
77. Hindi day is celebrated on: 14th Sept.
78. Annual Inspection of large loans is carried out by RBI inspectors. What is this audit is called? Statutory Audit.
79. What is minimum amount of DD which should be issued by bank with account payee crossing: Rs. 20,000.
80. Aggregate Capital Market exposure of a bank should not be more than: 40% of net worth of bank
81. Minimum capital required for Small Finance Bank and Payment Banks is Rs. _______: Rs.100 cr.
82. Service Tax increased to 14.50% with effect from : 15.11.2015 and 0.5% wef 01.06.2016 (KISAAN CESS)
83. What should be the Promoter contribution in Small Bank: 40%
84. What is the interest rate in case of Sovereign Gold Bond scheme: 2.50%.

Very Very useful general banking MCQs

Very Very useful general banking MCQs

1. ______is a money market instrument, which enables collateralized short term borrowing through Govt. securities: Repo
Rate.
2. While issuing DD of Rs.50,000/- and above what should not be accepted: By cash
3. Call option stands for: Right to Buy but without obligation to buy.
4. ˜Call Money market refers to the market for short term funds ranging from _____: Overnight funds
5. ˜In Ultra Small Branches, a designated offi cer will visit the connected to Bank’s central server (CBS): Bank discretion.
6. ˜Maximum deposit in PPF in a FY: Rs.1,50,000
7. CRR decided by: RBI
8. ˜Public Debt Office (PDO) is an ______: Autonomous body and Investment Banker to Central Govt.
9.Clean Audit Report means : An audit report without any qualifications
10. ˜What is full form of USB: Ultra Small Branch.
11. cross selling: Offering banks products to existing customers
12. What is callable security: which can be called at any predetermined date.
13. Under Atal Pension Yojana (APY), the Central Govt will contribute 50% of total contribution or Rs 1000 whichever is lower, to
eligible subscribers account, for a period of: 5 years.
14.A bank cannot grant loan against security of which type of shares - other bank’s shares, own shares: own shares.
15.A cheque will be valid for: 3 months from date of issue
16.A DD is required to be crossed with account payee crossing if the amount of DD is: Rs 20000 and above
17.A Financial that derives its value from another financial product is called: Derivative.
18.A granted power of attorney to B for operating account of A. You receive information about death of A and simultaneously a
cheque signed by B on account of A is presented for payment. What should the Bank do?: Cheque will not be paid.
19.A minor will attain majority at the age of: 18 years
20.A private limited company must have minimum ___directors?: 2
21.After 6 months of successful transaction, which facility will be provided for accounts opened under PMJDY scheme?: Overdraft
22.Age limit in PrimeMinisters Jeeven Jyoti Bima Yojna: 18 —50
23.All scheduled commercial banks to convert their opening balance sheet as at April 1, 2013 in compliance with the IFRS.
24.An officer does not require permission of Branch Manager for: making payment of a pay order which was issued on account of
purchase of furniture by the bank.
25.Appeal against decision of Banking Ombudsman can be made to: Deputy Governor RBI.
26.Application for information under RTI Act 2005 should be disposed off within: 30 days
27. As per Atal Pension Yojana (APY), the minimum age of joining the scheme is 18 years and maximum age is and the age of
exit and start of pension would be 60 years: 40 years
28.As per Atal Pension Yojana (APY), the minimum period of contribution by the subscriber
29.As per KYC guidelines, Demand draft of how much amount cannot be issued against cash?: Rs 50,000 and above
30.As per latest change, what is the maximum PPF contribution that can be paid in a F.Y?: Rs 150,000
31.As per Official Language Policy, in Region "C", how much percentage of the Sign Boards should be in Hindi?: No specific target.
32.As per Pradhan Mantri Suraksha Bima Yojana (PMSBY) Scheme, all saving bank account holders are entitled to join the scheme in
the age between: 18 to 70 years.
33.As per RBI guidelines, Base rate is to be reviewed by bank on _______: Quarterly basis.
34.As per RBI Guidelines, the charges for closure of bank account before stipulated period should not exceed: not applicable as
banks are free to fix account closure charges
35.As per RTI Act, information is required to be given by public authority within how many days?: 30days
36.As per RTI Act, information related to life and liberty should be submitted within: 48 hrs.
37.As per section 107 and 108 of Indian Evidence Act, a person can be presumed to have died if he is missing for : 7 years
38.As per Supreme Court who cannot be a partner? HUF.
39.At present, who is the Governor of RBI?: Dr Raghuram Rajan
40.Atal Pension Yojana (APY) offers fixed amount of pension ranging between depending upon the contribution which will be based
on the age of joining the APY: Rs 1000 to Rs 5000
41.Balance lying in the account of a company. When winding up proceedings of the company started funds in the account will be at
disposal of: Official Liquidator
42.Bank Customer relation in safe custody: Bailee- Bailor.
43.Banker customer relationship in standing instruction: Agent and Principal
44.Banking Codes and Standards Board of India (BCSBI) is a – (a) subsidiary of RBI (b) Department of Ministry of Finance (c)
Department of Indian Banks Association: None of these as it is an independent and autonomous watch dog to monitor and ensure
that the Banking Codes and Standards adopted by the banks are adhered to.
45.Banks are required to maintain Minimum and maximum CRAR of: Min 9% in India. There is no maximum.
46.Banks should disclose the details of fees/remuneration received in respect of the Bancassurance business undertaken by them, in
the ‘Notes to Accounts’.
47.BCSBI is affiliated or regulated by? An independent body
48.Best indicator of country's growth?: GDP
49.Bharathi Airtel tie up with which bank regarding payment bank?: Kotak Mahindra Bank.
50.Break even point: Level of sales at which there is no profit no loss
51.Broad money is represented by: M3.
52.Business correspondent appointed by bank work as- (a) Bank dealers; (b) Agent of the Bank (c) Customer's agent; (d) RBI agents
(e) RRB Agents (f) Trustees of customer: Agents of the bank.
53.Business correspondent in bank are for banking business: Bank is the Principal and correspondent is the Agent.
54.Call money is available for: one day
55.Call option stands for: Right to Buy but without obligation to buy.
56.CAMEL rating is done by: RBI to judge the health of banks
57.Capital account convertibility means the freedom to convert to financial assets in to foreign financial assets and vice versa.
58.Capital adequacy ratio related to? : CRAR- capital fund.
59.Carbon credits relates to: environment
60.CARE STANDS FOR : CREDIT ANALYSIS & RESEARCH LTD
61.Certificate of incorporation issued by: Registrar of Companies
62.Chairman of SEBI: U K Sinha.
63.Clayton’s Rule is related to which of the following rights?: Right of Appropriation
64.Clean Audit Report means : An audit report without any qualifications
65.Contact less Debit Card has been issued by: ICICI Bank.
66.Contract of Insurance is a contract of: Indemnity.
67.Contract to perform the promise or discharge the liability of a third person in case of his default can be termed as - (a)Guarantee;
(b) Indemnity; (c) Contingency; (d) Subrogation: Guarantee.
68.Cost push inflation is due to: High cost of production
69.Counter Cyclic Buffer required as per Basel III will be made at: normal times
70.CP is issued for amount of: Rs.5.00 lac and multiples of Rs 5 lac.
71.CPPC STANDS FOR : CENTRAL PENSION PROCESSING CELL
72.Cross selling: Offering banks products to existing customers
73.CRR decided by: RBI
74.CRR is based on which act: Sec 42(1) of RBI Act
75.CRR is calculated on: net demand & time liability.
76.Current account operated by finance director of a limited compnay. Cheque signed by him presented for payment after his death:
Cheque should be paid
77.Customer day is observed by banks at what periodicity?: once in a month (15th day of every month)
78.DEATH CLAIM SETTLEMENT IN HOW MANY DAYS? : 15 DAYS
79.Delayed collection beyond abnormal period: SB Rate + 2%.
80.Distribution of Insurance products as Corporate Agents is called: Bancassurance
81.DRP: Disaster Recovery Plan
82.DSB Returns relate to: Off Site Surveillance
83.Duplicate DD to be issued in how many days?: 14 days from the date of request
84.Elasticity of Demand is least in the case of: Items of necessity.
85.Existing total No. of RRBs as on 31-03-2012: 82
86.Expand IFRS -International Financial Reporting System
87.Expand the abbreviations GAAS: Generally Accepted Auditing Standards
88.Facility for Exchange of Notes and Coins: The facility of exchange of cut/mutilated banknotes, in addition to soiled notes and issue
of good quality clean banknotes/coins, should be made available at all bank branches (including those of co-operative banks and
RRBs). This facility should be provided to all members of public without discrimination on all working days
89. FIR is required to be filed in case where the counterfeit notes found are acknowledgement is to be obtained from the concerned
police authorities: Five pieces and above.
90.First Unique Identification Card (Aadhar card) was issued in which state – Maharashtra; Sikkim; Manipur; Karnataka?:

Maharashtra ( To Ranjana Sonawne of Tembhli village in Maharashtra)
91.For counterfeit notes a consolidated report as per prescribed format to be submitted to police authorities if in a single Txn note
is: five pieces or more in one transaction and if four pieces then consolidated report through nodal office to local police station.
92.For creation of Equitable mortgage, the town for deposit of title deeds to be notified by – (a)State Govt; (b) RBI; (c) Central Govt;
(d) Bank: State Govt
93.For injection of liquidity Txn done by RBI: Repo Rate.
94.For seeking information under RTI what is not required?: Reason for seeking information not to be disclosed.
95.For Ultra Small Branches a designated officer will visit the village on a prefixed date and time every ______with laptop and will be
connected to Bank’s central server (CBS): Week
96.Forged currency note: not to be returned & should be impounded
97.Fraudulent Draft presented and paid, who is to lodge complaint: Paying banker
98.FSDC: Financial Stability and Development Council
99.Full form of FDI: Foreign Direct Investment
100. Full form of IRDAI is: Insurance Regulatory & Development Authority of India.
101. Full form of MUDRA: Micro Units Development and Refinance Agency Ltd (MUDRA)
102. Full form of NIM: Net Interest Margin
103. Full form of Nrega: National Rural Employment Guarantee
104. Full form of PRAN?: Permanent Retirement Account No
105. Funds received in Consolidated Fund of India are maintained with: RBI (Reserve Bank of India is the main banker of the
Government and other authorised Banks function as its agents while handling Government transactions).
106. General insurance works on which principle: Principle of utmost faith.
107. Gift City: Gandhi Nagar, Gujarat;
108. Govt securities are known as: Gilt edged securities
109. Govt. infused capital in 9 PSBs in the beginning of 2015 amounting to: Rs.6990 crore
110. Green revolution is related to production of : Wheat and Rice
111. Growth of people in a country is reflected in: real per capita income
112. Guidelines on having Investor Protection Funds by Stock exchanges issued by: SEBI.
113. Head Office of Asian Development Bank is located at: Manila (Philippines)
114. Head Office of International Labour Organisation is located at: Geneva
115. Head office of NABARD is located at: Mumbai (S!DBI Head Office at Lucknow)
116. How much exemption from income is allowed as per section 80 C of Income Tax Act for the financial year 2015-16?: Rs
150,000
117. Hyper inflation- when a country experiences very high and usually accelerating inflation. The general price level within a
specific economy increases rapidly as the functional or internal currency, loses its real value very quickly.
118. IBPP STANDS FOR : INTERNET BILL PRESENTATION & PAYMENT
119. ICAAP full form: Internal Capital Adequacy Assessment Process.
120. If a Garnishee Order is received by the bank in which amount to be attached is not mentioned, what should the bank do?:
Full amount to be attached
121. If there is delay in reporting to RBI by currency chest or there is double/excess reimbursement, what is the rate of
interest charged by RBI?: Bank rate+2%.
122. in 1969, the 14 Bank Nationalised. At that time the Prime Minister of India: Smt. Indira Gandhi
123. In a partnership formed under Indian Partnership Act 1932, what is the liability of a partner?: Partner is liable jointly and
severally i.e. as partner as well as in his personal capacity. Therefore, liability is unlimited
124. In which type of charge possession is with creditor and ownership is with debtor?: Pledge
125. Income Rs.1.00 lac- Tax Rs.0.10 lac, Income Rs.2.00 lacs: Tax Rs.0.30 lacs, Income Rs.0.50 lac-Tax Rs.0.03 lac-This is
example of Progressive Tax
126. Inflation in India is measured on the basis of : Wholesale Price Index
127. Insurance amt in PMJDY: Rs 1 lac.
128. Insurance sector in India is regulated by: IRDA
129. Internal audit is meant for : internal operational check ups
130. Investment Fluctuation Reserve is calculated on which type of security? Available for Sale category and Held for Trading
category.
131. Investment Fluctuation Reserve is maintained on securities classified as: "Held for Trading" and "Available for Sale '
132. Investment Fluctuation Reserve is part of which type of capital: Tier I Capital.
133. Islamic banking has the features of : Conservative banking
134. CMD of a public sector bank is appointed by: Central Govt.
135. Issue of Rs 5 coins to commemorate the occasion of "150th Birth Anniversary of Swami Vivekananda": The Government of

India has minted the above mentioned coins.
136. Issue of Rs 5 coins to commemorate the occasion of "60th year of India Government
137. Job rotation for clerical staff should be done in every ______: 6 months.
138. Kisan Vikas Patra scheme was discontinued in 2010 due to which reason?: Fraud
139. Kite flying means accommodation receipts and payments and not genuine trade transactions
140. KV Kamat has become first chairman/President of which bank?: New Development Bank (NDB) of BRICS
141. LAFAR is submitted by whom?: Statutory Auditor
142. Letter received in Hindi in Region B, answer to be given in %age: 100%
143. LFAR returns relate to: Statutory audit
144. Life Certificate of pensioners is taken in which month?: November
145. Loan should not be granted to a director of the bank against: shares of own bank ( Loan can be granted against bank’s own
deposits; insurance policy; govt security).
146. Main Objective of Infrastructure Development Corporation is : Development of infrastructure of the country.
147. Marginal standing facility rate: 7.75%
148. Maximum period for filing case with Ombudsman: 12 months from receiving reply from bank
149. May I help you counter on how much staff: 10 and above.
150. Meeting of the Official Language Committee is held: Quarterly
151. MGNREGA: Mahatma Gandhi National Rural Employment Guarantee Act
152. MIN SUBSCRIPTION IN PPF CANNOT BE LESS THAN: Rs.500/-
153. Minimum amount of CD – Rs.1. lakh
154. Minimum and Maximum amount that can be deposited in PPF account is _____: Minimum Rs. 500/- & Maximum Rs. 1.50
lacs.
155. Money market mutual funds are regulated by: RBI
156. Mutual fund Market regulated by: SEBI
157. Name of device used by Business Correspondents: Biometric device.
158. Net Interest Income is Equal to: Interest received on assets о /ŶƚĞƌĞƐƚ ƉĂLJŵĞŶƚƐ ŽŶ ůŝĂďŝůŝƟĞƐ
159. New name of Planning Commission: “National Institution for Transforming India” or “NITI”
160. NITI full form: National Institution for Transforming India (Chairman PrimeMinister; Dy Chairman Arvind Panagariya).
161. Nobel Price for Microcredit: Muhammad Yunus
162. Number of directors in a public limited company can be: between 3 to 15. For more than 15, special resolution passed by
shareholders is required
163. Payment of DD more than 20000 only by crediting to account and not in cash as per: RBI guidelines
164. PERIODICITY OF CUSTOMERMEET IN A BRANCH: MONTHLY.
165. Perpetual Non redeemable preference share is a part of: Tier -1 capital
166. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme offers a life insurance cover of: Rupees 2 lakh
167. Premium in Prime Minister Suraksha Bima Yojana: Rs.12 per year and claim available is Rs.2 lac in case of accidental death
only.
168. Primary Deficit is Fiscal deficit?: Always less
169. Purchaser of DD cannot do the following: Stop the DD
170. Rating of Bank is carried by RBI on CAMELS criteria, what do “C” stands for? Capital Adequacy.
171. RBI at which rate purchases or rediscounts B/E or other Commercial Bks: Bank Rate (7.75%)
172. RBI can issue bank note upto: Rs 10000
173. RBI gives credit to bank on which rate: Repo rate
174. RBI Governor's main concerns in monetary Policy: Inflation and Fiscal Deficit
175. RBI has issued star series notes for replacement of wrongly printed currency notes. Currently, these notes have been
issued in the denomination of : Rs 10, Rs 20, Rs 50, Rs 100.
176. Regulator of Capital market: SEBI
177. Reporting time before 15 minutes from starting of public dealings in: Metro/urban/Semi Urban & Rural area.
178. Revaluation Reserve discounting factor to be taken to which capital: 55% & Tier II Capital.
179. Review of RBI credit and monetary policy: Bi-Monthly
180. RTI: Person seeking information need not give reason as to why he is seeking the information.
181. Sabbatical can be availed maximum: 24 months and two times in your tenure.
182. Safe custody of Articles comes under which act: Indian Contract Act
183. Safe deposit locker – maximum deposit that can be asked is: 3 year advance rent plus locker breaking charges.
184. SAFTA is related to :TRADE
185. Security officer visit for high risk branches: Once in a quarter.
186. Sensex of 30 scrips is related to: Bombay Stock Exchange (BSE)
187. Shares transferred in electronic form: Dematerialization.
188. Spread in the context of bank profit loss account means: Interest earned - interest expended
189. Statutory Audit of banks is done as per provisions of: Banking Regulation Act
190. Subordinate Debt should not be more than % of tier-I capital? 50%
191. Subordinated debt instruments together with all other instruments of Tier - II capital are to be limited to ___ of Tier I: 100%.
192. Subordinated Debt which is a component of Tier II capital, is shown in the balance sheet as a part of: Other Liabilities and
Provisions on the liability side
193. Subprime crisis means : Problem created by lending to borrowers not meeting the credit rating criteria.
194. The Branch Level Customer Service Committee may meet to study complaints/ suggestions, cases of delay, difficulties
faced / reported by customers / members of the Committee and evolve ways and means of improving customer service: at least
once a month
195. The charge levied by banks for under utilization or non utilization of sanctioned CC/OD limits is called: Commitment charge.
196. The Committee on Listing of Stock Exchanges was headed by Dr Bimal Jalan. The Committee has recommended against
listing of Stock Exchanges.
197. The country of Euro Zone facing crises is: Greece and Cyprus (latest Cyprus)
198. The liability of Introducer in case of fraud by the customer: No legal liability
199. The main source of infrastructure finance are: FDI investment, Pension funds, Insurance funds.
200. The police seeks information regarding conduct of an account being maintained in your branch in connection with some
investigation. Can the bank pass on the information? : Yes, if the information is asked by an official of the rank of incharge of Police
Station or above and in writing.
201. The present Bank Rate is: 7.75%
202. The recent committee on urban coop banks was headed by: R. Gandhi
203. Tier I capital also known as: core capital.
204. Tier II capital can be maximum up to : 100% of Tier -1 capital.
205. Total number of Banking Ombudsman in India: 15
206. Transfer of interest in specific immovable property to create security for a debt is called: Mortgage
207. Treasury bill is issued for: 91 days,182 days,364 days
208. UCBs will start TDS at source if interest on term deposit in a financial year is more than Rs.10,000/- from which date: 1st
June 2015
209. Unclaimed deposits with banks which have not been claimed for last 10 years will be transferred to: Depositor Education
and Awareness Fund.
210. Under new pension scheme- minimum subscription in a year: Rs.6000 in a year ( min 500 at one time and for max there is
no upper limit)
211. Under Pardhan Mantri Suraksha Bima Yojana (PMSBY) Scheme, the uniform premium amount of Rs plus service tax
should be applicable per annum per person: Rs 12
212. Under PMJDY Scheme announced by PrimeMinister the debit card will be issued to every account holder. The type of debit
card will be: Rupay Card;
213. Under PMJDY, what is the time limit for lodging a claim in respect of the accident as covered under accident insurance
cover:Within 90 days of accident.
214. Under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme, the uniform premium amount of is
applicable per annum per member: Rs 330
215. Under Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) scheme, the individual is eligible to join the scheme at the age
between: 18 years to 50 years
216. UNDR NPS MINIMUM SUBSCRIPTION IN A YR : Rs.6000
217. Uniformity in Intersol Charges: Banks should follow a uniform, fair and transparent pricing policy and not discriminate
between their customers at home branch and non-home branches. Accordingly, if a particular service is provided free at home
branch the same should be available free at non home branches also. There should be no discrimination as regards intersol charges
between similar transactions done by customers at home branch and those done at non-home branches. Cash handling charges may
not be included under intersol charges
218. Upon finding the counterfeit currency note on the counter, the action of the bank should be: Impound the currency note
but credit full amount to customer. Receipt not to be issued to depositor.
219. Voting rights to an individual shareholder in Private banks not to exceed: 10 % (being increased to 26%)
220. What are the total number of digits in Aadhar Card: 12
221. What does LAF stands for_____: Liquidity Adjustment Facility.
222. What is a special purpose vehicle? A special purpose vehicle is a legal entity (usually a limited company of some type or,
trust or a limited partnership) created to fulfill narrow, specific or temporary objectives. Its operations are limited to the acquisition
and financing of specific assets.
223. What is Accrual concept: Every income or expense is taken in to account when becomes due irrespective of the fact
whether it is received or paid or not.
224. What is age limit in PMJeeven jyoti Bima yojna?: Eligible all saving accounts holder in the age of 18 to 50 years; Benefits
Rs. 2 lac on death due to any reason; Premium – Rs. 330 per annum per member.
225. What is Certificate of Incorporation?: Certificate issued by Registrar of Companies to a limited company, which is a
conclusive evidence of existence of company as a separate body corporate.
226. What is Debt securitization: Converting illiquid financial assets in to liquid marketable securities.
227. What is factoring?: Purchasing of Book debt
228. What is forfaiting?: Without recourse discounting of export bills
229. What is full form of FDI?: Foreign Direct Investment
230. What is full form of GDP?: Gross Domestic Product
231. What is full form of GST?: Goods and Service Tax
232. What is full form of IFRS?: International Financial Reporting Standards.
233. What is full form of ULIP?: Unit Linked Insurance Plan
234. What is guarantee corpus in MUDRA bank or funds allocated for MUDRA: Rs 20000 crore
235. What is Hybrid debt instrument? a) Debenture b) Bond c) Preference
shares d) Convertible Bonds.
236. What is incorrect about RTI?: Reason for seeking information to be mentioned in RTI application
237. What is meant by 'sensitivity' in economics terms? Sensitivity analysis (SA) is the study of how the variation (uncertainty) in
the output of a statistical model can be attributed to different variations in the inputs of the model. It is a technique for
systematically changing variables in a model to determine the effects of such changes
238. What is Personal Accident insurance cover for death and permanent disability due to accident in PrimeMinister Jan Dhan
Yojana (PMJDY): Rs.1.00 Lac
239. What is rate of Premium in Pradhan Mantry Suraksha Bima Yojana (PMSBY)?: Premium payable Rs. 12 per annum per
member; sum insured Death / permanent disability Rs. 2 lacs; Partial disability Rs. 1 lac.
240. What is short selling?: Selling securities by a dealer which he does not possess at the time of sale.
241. What is the age limit for coverage under Prime Minister Suraksha Bima Yojna (PMSBY): 18 years to 70 Years
242. What is the amount of insurance cover in case of PrimeMinister Jeevan Jyoti Bima Yojan (PMJJBY): Rs 2 lakh
243. What is the cut off point for reporting of Non Cooperative Borrowers – Rs.5. Crore and above.
244. What is the date for final implementation of Basel III?: 31.03.2019
245. What is the effect of Bonus Issue of Shares on Debt-equity ratio? No effect at all as neither there is a change in term liability
nor in net worth of the company.
246. What is the full form of QIP?: Qualified Institutional Placement.
247. What is the full from of GIFT city?: Gujarat International Financial Tech City.
248. What is the impact of increase in Inflation rate?: Purchasing power decreases
249. What is the initial tax exemption limit for Normal Senior Citizens i.e. aged between 60 years to less than 80 years? Rs 3 lakh
250. What is the liability of a bank in case of payment of forged cheque?: Bank is liable to drawer for having made payment
without authority as also for wrongful dishonor of another cheque due to insufficient funds.
251. What is the lock in period for deposits under PPF scheme: 15 years
252. What is the main concern of Indian Economy today?: Rising Inflation
253. What is the maximum age of Govt’s nominee on Board of Directors of a bank?: 70 years
254. What is the maximum amount for which award can be given by Banking Ombudsman in cases other than complaints
relating to credit card: Rs 10 Lac
255. What is the maximum amount of award that can be given by Banking Ombudsman in case of credit cards?: Rs 1 lakh
256. What is the meaning of delegation? Delegation means the granting of authority subordinates to operate within the
prescribed limits. It means subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.
Authority can be delegated but responsibility cannot be delegated.
257. What is the meaning of financial closure? Financial Closure occurs when there is legally binding commitment of private
sponsors to mobilize funding or provide services.
258. What is the minimum paid capital required for setting up a payment bank?: Rs 100cr
259. What is the nature of business of Insurance Co: indemnifying the insured, collective sharing of risks
260. What is the objective of selling mutual fund product by a bank?: To earn non interest income
261. What is the percentage in Region A to bring training materials bilingually?: 100%
262. What is the period of 12th Five year plan :2012-2017
263. What is the Purpose of nomination? To settle claims easily and quickly in case of death of depositor
264. What is the reason for allowing appointment of a Non Banking Financial company as BC?: For increasing financial inclusion.

265. What is the relation between debenture holder and company: Creditor and debtor
266. What is the relation between purchase of a DD and Bank?: Creditor and Debtor
267. What is the relationship between bank and customer in case of Garnishee order?: Debtor and Creditor
268. What is the role of nominee in term deposit?: He is trustee of legal heirs
269. What is the Service Charge for a remittance of Rs.20,000/- to Nepal if payee not customer of NSBL: Rs 100
270. What is the stake of Central Govt., Sponsoring Bank and State Govt. in RRB capital structure: 50:35:15.
271. What is the time within which death of account holder under Prime Minister Jan Dhan Yojna (PMJDY) should be advised to
bank? 30 days
272. What is the transaction code no for DD in the MICR cheques: 16
273. What is Variable cost:Which changes with production like Raw material, wages, power etc.
274. What refers to P-Notes: Participatory Notes used by Foreign Institutional Investors for investment by overseas investors
who are not registered with SEBI.
275. What right is available to paying bank in respect of DD - stop payment, cancellation, revalidation: revalidation
276. What should the minimum holding of Government in public sector banks?: 51%
277. What was the target for opening accounts under PrimeMinister Jan Dhan Yojana which was to be achieved by 26 Jan 2015?
Initially 7.5 crore accounts which was later increased to 10 crore accounts.
278. When a bank in addition to accepting deposits and making advances, provides various other types of financial services, it is
called: Universal Banking
279. When a complainant receives copy of award from Bank Ombudsman, within how many days, he is required to give his
acceptance?: 30 days from date of receiving the copy of award.
280. When banks borrow fund for overnight, what is it called: call money
281. When does the right of a nominee start in case of deposits? On the death of all account holders.
282. When is customer day celebrated : 15th of each month
283. When letter of administration issued: When a person dies intestate.
284. When remittance done to currency chest, counting in front of bank officials will be done for denomination of: Rs.500 and
Rs.1000 notes.
285. Which company has got license to start new private sector bank in the year 2014?: Bandhan Financial Services Ltd.
286. Which describes insurance business most?: Disaster risk cover.
287. Which is example of Direct Tax: Income Tax
288. Which is not the function of ALCO?: Fixing Budgets and Targets
289. Which is the central bank of India? : Reserve Bank of India.
290. Which is the first Credit information company of India?: COL
291. Which is the largest source of liquidity in equity market? FII
292. Which of the following can not be done by the purchase of a Demand Draft – (a) Stop payment of DD; (b) Obtain duplicate
DD in case of loss; (c) Getting the DD revalidated; (d) endorse the DD: Stop payment of DD.
293. Which of the following does not come under Tier II capital? a) Capital reserves b) Undisclosed reserves c) Revaluation
reserves d) Cumulative Perpetual shares: Capital Reserves.
294. Which of the following does not have share in RRB? (a) Sponsor Bank (b) Central govt (c) State govt (d) Nabard: Nabard.
295. Which of the following has become new member of Asian Clearing Union: Maldives Monetary Authority. (Other members
are Bangladesh Bank, Royal Monetary Authority of Bhutan, Reserve Bank of India, Central Bank of the Islamic Republic of Iran,
Central Bank of Mynamar, Nepal Rashtra Bank, Central Bank of Sri Lanka, State Bank of Pakistan)
296. Which of the following is a Direct Tax - Excise duty, custom duty, service tax, VAT, gift tax: Gift Tax
297. Which of the following is an indirect tax? Sales Tax
298. Which of the following is Chairperson of NABARD: Sh. Prakash Bakshi
299. Which of the following is index of National Stock Exchange – (a) Nifty; (b) Sensex; : Nifty
300. Which of the following is the financial capital of India – Delhi, Ahmedabad, Mumbai: Mumbai
301. Which of the following will be reduced with increase in inflation? (i) Purchasing Power of money (ii) Interest rate (iii) Cannot
say (iv) CRR (v) None of these: Ans is Purchasing power of Money.
302. Which of the following-is a subsidiary of Standard & Poor? CRISIL
303. WHICH OF THE ITEMS WILL NOT BE AN ASSET IN BANKS BAL SHEET – ADVANCES/FIXED ASSET/ DEPOSITS/
: Deposits
304. Which one is not under core sector: automobile
305. Which sector has highest share in GDP of India?: Services
306. Which tax has been abolished in Budget 2015-16?: Wealth tax
307. Which type of charge to be created on Bank’s FD?: Assignment
308. While giving guarantee favouring stock exchange on behalf of brokers, minimum margin should be (a) 50 % out of which
minimum 25% should be cash margin (b) 50 % out of which minimum 20 % should be cash margin (c) 50 % out of which 10 % should

be cash margin: Ans is (a)
309. While increasing or decreasing interest rate, we often hear basis point. 100 Basis point will be equal to: 1 %.
310. Who can stop payment of a Demand Draft?: Nobody
311. Who decides Saving Bank rate: Bank- ALCO committee.
312. Who has never been Governor of RBI – (a) C Rangarajan; (b) Y V Reddy; (c) Bimal Jalan; (d) Pratip Kumar: Pratip Kumar
313. Who headed the committee appointed by RBI for financial inclusion?: Nachiket Mor (The Committee on Comprehensive
Financial Services for Small Businesses and Low Income Households)
314. Who is Drawee in case of DD - paying branch, collecting bank, issuing branch; purchaser, holder?: Paying branch of issuing
bank.
315. Who is not promoter of CIBIL: RBI....
316. Who is regulator of commodity market in India? 1)sebi 2) Ncedex 3) mcx 4) Forward Market Commission: Forward Market
Commission.
317. Who is the regulator of capital market?: SEBI
318. Who is the regulator of insurance sector?: IRDA
319. Who is the Regulator of LIC: IRDA
320. Who issue Garnishee Order: Court
321. Who was President of India before Ms Pratibha Patil: A P J Abdul Kalam
322. Who will decide Base Rate of a Bank?: Bank itself.
323. Wholesale Price Index is calculated on which basis?: Weekly basis for food inflation and monthly for aggregate inflation.
324. Why International Financial Reporting System (IFRS) should be implemented: For comparison of financials of companies
operating in two different international jurisdictions.
325. Within how many days appeal against Ombudsman can be filed?: 30 days
326. Within how many days, appeal can be made by a bank against the Award of Banking Ombudsman to the Appellate Authority
i.e. Deputy Governor RBI: 30 days from receiving the acceptance from customer
327. You need to issue a Demand draft for Rs 10,000 favouring Mr X of Chandigarh.Which one of the following will not be the
option while issuing DD – (i) Payee will be Mr X or Bearer (ii) Payee will be Mr X Chandigarh (iii) Payee will beMr X State Bank of India
A/C 31435195901: Mr X or Bearer

RISK Management Very important MCqs

RISK Management Very important MCqs

01.ALM not responsible for: achieving budgets and targets (it helps in managing liquidity risk and interest rate risk).
02.At present banks are required to maintain capital adequacy ratio of 9% and Tier II capital should not be more than Tier I. It
means that banks are required to bring Tier I capital of at least 4.5% of the risk weighted assets. With effect from which date,
banks will be required to bring Tier I capital of 6% of the risk weighted assets?: 31't March 2010.
03.Documents not stamped properly is what kind of risk?: Legal Risk
04.For calculation of capital adequacy ratio, the risk weight for Commercial Real Estate for commercial bldg is : 100%
05.For capital adequacy purposes, risk weight for personal loans is : 125%
06.Fraud – what type of risk : Operational risk
07.General Insurance works on principle of: Spreading the Risk.
08. If an Outsourcing agency does not serve properly – which type of Risk is faced by the bank?: Reputation Risk and Operational
Risk
09. Investment in perpetual bonds is risky because: the interest is not payable if the CRAR falls below the stipulated target.
10.Legal risk is part of: operational risk.
11.Loss due to inadequacy or failure of system, process, people or due to external events is called: Operational risk
12.Risk weight for claim on Banks which complies to Min CRAR requirement : Scheduled Banks 20%
13.Risk weight for exposure to Scheduled Commercial Bank that maintains CRAR as per RBI requirement: 20%
14.Sub-prime is an risk. (Operational and Credit Risk)
15.The capital adequacy ratio is computed by the following formula: Capital/Risk Weighted Assets
16.Tier 2 - general provisioning & loss reserves only up to 1.25% of total risk weighted assets.
17.Tier I should be at least 6% of Risk weighted assets and should be achieved before by all scheduled commercial banks:

31.3.2010.
18.What are the components of credit risk?: Transaction risk or default risk and portfolio risk
19.When does liquidity risk arises?: Liquidity risk arises when maturing liabilities are more than maturing assets-
20.While doing Risk Rating, an asset is downgraded from A+ rating to A rating. What type of risk is involved: Credit Risk

BASEL MCQs

BASEL
01.A subordinate debt with remaining maturity of 30 months will be taken as part of Tier II capital at a discount of: 60%
02.An exposure is called Retail Exposure as per implementation of Basel II, if it is not more than:5 crore.
03.As per Basel II, banks are required to bring capital for __risk in addition to capital for credit risk and market risk: Operational risk
04.As per BASEL III Guidelines, the Loans guaranteed by State Govt will attract Risk weight of: (i)20% (ii) 50% (iii) 100% (iv) 75% (v)
0%: 20%
05.As per BASEL III, what is the risk weight on exposure to Govt securities issued by Central Government?: 0%
06.As per Basel-II, RBI has recommended adoption of __approach for operational risk : basic indicator approach
07.BASEL Accords are related to: Capital Adequacy.
08.Basel II consists __Pillars and number 2 pillar is __ : 3 pillars, Supervisory Review is Pillar no.2
09.Basel II norms to be completed by Foreign banks and banks having foreign branches by 31,03.2008.
10.For banks which do not have overseas braches, Basel II norms have to be implemented with effect from: 31.3.09
11.For being part of Tier II capital, Rupee Denominated subordinated debts should have minimum maturity period of and maximum
maturity period of : Minimum maturity:5 years Maximum: Perpetual(no maturity prescribed
12. In Basel II, Pillar I covers which types of risks: Credit Risk, Market Risk, Operational Risk.
13.Subordinate Debts are part of: Tier-II capital
14.Supervisory Review according to which Central Bank of the country is to ensure that proper capital has been provided for risk
exposure and maintain proper system for the same is provided under?: Pillar II of Basel IL
15.The minimum capital adequacy ratio implemented in India, by RBI is __% and as per Basel II recommendations it is __ % : 9%, 8%
16.The objective of the Pillar III as per BASEL-II is ____: Market discipline through public disclosures
17.The revaluation reserves as per Balance Sheet of a bank is Rs 200 lakh. How much of it will be taken as part of Tier II capital?: Rs
90 lakh (Revaluation Reserve are taken as part of Tier II capital at 55% discount)
18.Under BASEL II, for calculating capital for Operational Risk which method is to be applied for the time being: Basic Indicator
Approach
19.Under BASEL-II, what is the RiskWeightage on the Loans and advances given to Staff of the bank secured by Mortgage /
superannuation benefits: 20%
20.Upper Tier 2 -minimum maturity is 15 years for Debt capital
21.What is the date for final implementation of Basel III? 31.03.2019.
22.Which of the following is part of Tier II Capital? (a) Statutory Reserves (b) Other disclosed reserves (c) Capital reserves from
sale of assets (d) Revaluation Reserve e)none pf these Ans is E

Current Affairs on 02.11.2018

Today's Headlines from www:

*Economic Times*

📝 50 Indian items face heat as US revokes duty-free privileges on import of 90 products

📝 Mobile manufacturing a $230 billion opportunity: Report

📝 TCS acquires London-based W12 Studios

📝 NBCC stops open transport of building material

📝 Danube Home makes India foray from Hyderabad, to invest Rs 1,400 cr over 10 years

📝 Croma gets Rs 250 cr from Tata Sons to speed up expansion

📝 Reserve Bank of India gives licence to Kirloskar Capital

📝 ONGC to draw perspective plan to integrate business

*Business Standard*

📝 Non-ETFs pull out $1 bn from India in September; GEM funds falls to 9.7%

📝 Sebi directs Sahara group, its chief Subrata Roy to refund Rs 141 bn

📝 Arvind's Q2 profit rises 18% to Rs 730 mn, revenue up 12% to Rs 30.53 bn

📝 HPCL Q2 net profit down 37% to Rs 11 bn; merger with MRPL to happen in FY20

📝 After a 25-year journey in India, Arrow aims for a wider brand footprint

📝 State Bank of India withdraws insolvency plea against Uttam Galva Steels

📝 UPI-based payments for IPOs from Jan 1, 2019 in a three-phased manner

*Financial Express*

📝 Manufacturing grows at quickest pace in 4 months

📝 Banks’ consumer durable loan portfolio falls 82% in Sept

📝 Airlines may post steepest losses in a decade: Crisil

📝 Hindustan Petroleum Corp’s Q2 net declines 37%

📝 Matrimony.com second quarter consolidated net drops 30%

📝 Sundaram Finance posts flat net profit growth at Rs 154 crore

📝 FPIs offload over Rs 1 lakh-cr funds in FY19 amid growth concerns

📝 Cabinet clears ordinance to amend Companies Act

*Mint*

📝 Govt delays imposition of retaliatory tariffs on US goods till 17 Dec

📝 Auto sales grow in single digits in October

📝 DLF Q2 profit rises thirty-fold to ₹373.21 crore

📝 Govt sells 3.18% in Coal India, to get Rs 5,300 crore

📝 GST collection crosses Rs 1 trillion in October

📝 HDFC Q2 net profit rises 25% to Rs 2,467 crore

📝 Airtel charts out a new strategy to take on Reliance Jio

📝 Mondelez set to bring global offerings to India.