Caiib BFM 150 mcqs

1. A company has four branches at Bangalore, Chennai, Delhi and Mumbai. IEC number should be
obtained by.
A. all bran ches simultaneously.
B. each branch separately.
C. any one branch, which c an be used by all branches.
D. the head office, which can be used by all branches.
ANSWER: D
2. An exporter who deals in multi products should get Registration-cum-Membership Certificate from.
A. all export promotion councils relevant to the products dealt in.
B. export promotion council nearest to the head office of the expo rter.
C. export promotion council of main line of activity or FIEO.
D. none of the above.
ANSWER: D
3. An exporter cannot obtain details about prospective buyers from.
A. yellow pages.
B. web sites.
C. Indian em bassy abroad.
D. none of the above.
ANSWER: D
4. A thorough buyer evaluation may be waived in case of.
A. buyers from advanced countries.
B. buyers from countries having bil ateral relations with India.
C. buyers having import licences.
D. transactions covered by full ad vance payment.
ANSWER: D
5. Force majuere clause in an export .
A. relates to penalty for non-fulfilm ent of contract.
B. exempts the exporter from liability from non-ful filment of contract due to reasons beyond his control.
C. provides for enforcing the contract compulsorily.
D. none of the above.
ANSWER: B
6. Obtaining quality certification is compulsory for.
A. export of commodities falling under mandator y inspection requirements of the government.
B. export of items meant for human consumption
C. all exports.
D. none of the above.
ANSWER: A
7. Booking of shipping space in advance is helpful to an exporter in.
.
A. saving in freight charges.
B. availing bank finance.
C. getting priority on inla nd movement of cargo by rail.
D. none of the above.
ANSWER: C
8. Under advance remittance as a method of payment the credit risk is borne by.
A. the importer.
B. the exporter.
C. importers ba nk
D. none.
ANSWER : A
9. Open account when used as a method of payment indicates.
A. the transactions are legal
B. the buyer has no money t o pay immediately.
C. the seller wants to sell desperately.
D. none of the above.
ANSWER: D
10. Open account method of payment is beneficial to
A. the buyer.
B. the seller.
C. the buying agent.
D. both the buyer an d the seller.
ANSWER: A
11. Cash on delivery method is normally used for.
A. bulk cargo with immediate market.
B. small but valuable items sent by po st.
C. slow moving items.
D. exports to countries with balance of payments problems.
ANSWER: B
12. Documents against payment term indicates
A. the documents are sent by post.
B. the export is risky.
C. the collecting bank will hand the documents to the buyer against payment.
D. the exporter delivers the documents to the bank against advance.
ANSWER: C
13. The best form of method of payment for an importer would be.
A. advance remittance.
B. letter of credit.
C. documents aga inst payment.
D. open account.
ANSWER: D
14. When goods are sent to an agent of an exporter in the importing country, the method of payment
adopted is.
A. open account.
B. letter of credit .
C. consignment sa le.
D. documents agains t acceptance.
ANSWER: C
15. The method of payment where the exporter relies on the undertaking of a bank to pay is.
A. bank guarantee.
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B. letter of credit.
C. letter of comfo rt.
D. none of the above .
ANSWER: B
16. Letter of credit transactions are generally governed by the provisions of.
A. Uniform customs and Procedures for Documentary Credits.
B. United Conference on Practices for Documentary Credits.
C. Uniform Customs and Practice for Documentary Credits.
D. Uniform Code and Procedure for Documentary Credits.
ANSWER: C
17. A letter of credit for a commercial transaction is.
A. a guarantee by the issuing bank to the exporter that bills drawn by the latter will be met.
B. undertaking by the issuing bank to the exporters bank that the exporters bills will be met by the
issuing bank.
C. undertak ing by the issuing bank to the exporter that documents conforming to the requirements of the
credit will be negotiated/paid against by the bank.
D. none of the above
ANSWER: C
18. The beneficiary under a letter of credit is.
A. the bank opening the credit.
B. the customer of the opening bank.
C. the confirming bank.
D. the exporter.
ANSWER: B
19. A letter of credit is opened on behalf of.
A. exporter customers.
B. importer customers.
C. any party wishing to make payment abroad.
D. none of the above.
ANSWER: B
20. A letter of credit is addressed to.
A. the beneficiary.
B. the negotiating bank.
C. the reimbursing bank .
D. the importer.
ANSWER: A
21. Bank B of Baroda nrgotiated on 12.3.2005 documents ynder a recovable letter of credit opened by
Bank C of California. On 13.3.2005 before the documents were dispatched by Bank B to Bank C, it
receives a notice from the latter, dated 11.3.2005 cancelling the letter of credit.
A. Bank B cannot get reimbursement from Bank C since the documents are n egotiated after the
cancellation of the letter of credit.
B. Bank B cannot get reimburse ment from Bank C, but have recourse to the exporter.
C. Bank B can get reimbursement from Bank C because the documents were negotiat ed before the
notice of cancellation could reach it.
D. Bank B can get reimbursement from Bank C since the notice of cancellation is invalid.
ANSWER: D
22. When a letter of credit does not indicate whether it is revocable or irrevocable, it is treated as.
A. revocable.
B. irrevocable .
C. revocable or irrevocable at the option of the beneficiary.
D. revocable or irrevocable at the option of the negotiating bank.
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ANSWER: B
23. Payment for bills drawn under letter of credit should be made by the negotiating bank.
A. immediately in all cases.
B. after the documents are a pproved by the issuing bank.
C. immediately or on a future date depending upon the te rms of credit.
D. only in foreign currency.
ANSWER: C
24. Under an acceptance letter of credit, the responsibility of the issuing bank is.
A. only to accept the bill.
B. to pay against the bill.
C. to accept the immediat ely and also to pay the amount of the bill on its due date.
D. to get the acceptance of the importer on the bill.
ANSWER: C
25. A confirmed letter of credit is one.
A. confirmed by a bank (other than t he opening bank) in the exporters country.
B. confirmed by the importer to be correct.
C. confirmed by the exporter that he agrees to the conditions.
D. confirmed to be authentic.
ANSWER: A
26. Under the confirmed letter of credit the undertaking the confirming bank is.
A. in addition to that of the opening bank.
B. in substitution of the undertaking of the opening bank.
C. subject to government policies to the exporter country.
D. none of the above.
ANSWER: A
27. A credit which provides for reinstatement of the amount as and when bills are drawn under it is called.
A. reinstatement credit.
B. reimbursement credi t
C. revolving credit.
D. back-to-back cre dit.
ANSWER: C
28. A transferable credit is one.
A. . which can be negotiated.
B. which can be transferred b y the importer to any other person.
C. which can be transferred by the beneficiary to any other perso n.
D. which provides for transfer of liability to another bank.
ANSWER: C
29. A transferable credit can be transferred.
A. once.
B. twice .
C. thrice.
D. any nu mber of times.
ANSWER: A
30. A transferable credit can be transferred to a third person in.
A. the same country.
B. a third country.
C. the same countr y or any third country.
D. none of the above.
ANSWER: C
.
31. A transferable letter of credit.
A. can be transferred to more th an one person even if partial shipment is prohibited.
B. can be transferred to more than one person only if partial shipment is allowed.
C. is one which contains words such as fractionable, assignable, etc.
D. . is transferred free of charge.
ANSWER: B
32. A back to back letter of credit.
A. is always an inland letter of c redit.
B. is a new letter of credit issued on th e strength of the letter of credit which is not transferable.
C. can be issued only when the original letter of credit is transferable.
D. can also be transferred.
ANSWER: B
33. A letter of credit that provides for granting of pre-shipment finance as well as storage of goods in the
name of the bank is.
A. a red clause let ter of credit.
B. a standby letter of credit.
C. a green clause letter of cr edit.
D. a secured letter of credit.
ANSWER: C
34. A letter of credit carries an undertaking of the opening bank to pay up to a specified amount in case of
non-performance of certain obligation by the applicant. This letter of credit is.
A. invalid.
B. an antic ipatory letter of credit.
C. standby letter of credit.
D. performance letter of cr edit.
ANSWER: C
35. The responsibility of an advising bank of a letter of credit is to.
A. vouch the genuineness of the letter of credit.
B. negotiate documents under the letter of credi t.
C. negotiate documents under the letter of credit, if the opening bank fails.
D. none of the above
ANSWER: A
36. Bank of Mumbai receives a bill under letter of credit opened by it. The importer instructs the bank not
to pay because he says the goods received are defective. The bank should.
A. return the bill with the reason payment refused.
B. seek clarification from the drawer; meanwhile k eep the bill with it.
C. refer the matter to International Chamber of Commerce.
D. make payment to the negotiating bank since the importe rs reason is untenable.
ANSWER: D
37. While scrutinizing the documents tendered under a letter of credit, the negotiating bank and issuing
bank should apply the doctrine of.
A. strict compliance
B. force majeure.
C. indemnity.
D. major com pliance.
ANSWER: A
38. Bank A has opened a letter of credit on behalf of its customers Imports India. When a bill under the
letter of credit is presented for payment by the negotiating bank it is found that Imports India do not have
sufficient balance in the account to pay the bill. The bank should.
A. intimate the negotiating bank by cable.
B. sue the customer for non-compliance w ith the letter of credit terms.

C. defer payment to the negotiating bank.
D. make payment to the negotiating bank immediately if documents are in order.
ANSWER: D
39. The expiry date of a letter of credit falls on 1st November, a bank holiday at exporters place.
A. The documents can be presented for negotiation the next working day.
B. The documents should be negotiated latest by the preceding working d ay.
C. Last date of negotiation and last date of shipment get postponed by a day.
D. The last date for shipment gets postponed but not the last date of negotiati on.
ANSWER: A
40. A letter of credit stipulates that the shipment should be made at the beginning og August 2005. It
means, the shipment can be made.
A. only on 1st August 2005.
B. during the first week of A ugust 2005.
C. any date between 1st and 10th of Aug ust 2005.
D. before the commencement of April 2005.
ANSWER: C
41. The letter of credit provides that shipment shall be made during the first half of February 2006. It
means the shipment can be made on any date between.
A. 1st and 4th of February 2006.
B. 1st and 15th of February 2006 .
C. 1st and 14th of February 2006; generally, with discretion to the negotiating bank to accept on 15th
February 2006 also.
D. 1st and 14th of February 2006; on 15th only if the port did not work on 14th.
ANSWER: B
42. If the letter of credit indicates the amount as about a specified amount, the drawing under the credit can
be.
A . 30% more than the specified amount.
B. 30% more or less than the Specified a mount.
C. 10% more than the specified amount.
D. 10% more or less than the specified a mount.
ANSWER: D
43. A letter of credit is opened for 100 kg of coffee for GBP 800. Documents for 102 kg of coffee for GBP
800 is presented for negotiation.
A. The bill cannot be accepted because quantity exceeds the letter of credit limit.
B. The bill cannot be accepted as the unit price get varied.
C. The bill can be accepted as it is beneficial to the import er.
D. The bill can be accepted since a tolerance of $5% in quant ity is allowed under UCP.
ANSWER: D
44. A teletransmission will be considered an operative instrument where.
A. it states full details to follow
B. it states mail confirmation w ill be the operating instrument.
C. it states airmailing our irrevocable letter of credit
D. none of the above.
ANSWER: D
45. A bank which issues a preliminary advice of issuance of an irrevocable credit.
A. A bank which issues a preliminary advice of issuance of an irrevocable credi t.
B. can later convert it as operative instrument.
C. may issue the operative instrument with dif ferent terms.
D. may issue the operative instrument with different terms.
ANSWER: A

46. A letter of credit is required to be completer and precise. It means.
A. it should not contain excessive details.
B. it should not refer to a previous credit w hich was amended.
C. both 1 and 2.
D. none of the a bove.
ANSWER: C
47. Expiry date of a letter of credit refers to.
A. the last date for shipment.
B. the last date for negotiatio n.
C. the last date for presentation of documents to issuing bank.
D. the last date of the month in which shipment can be made.
ANSWER: B
48. Unless otherwise required by the credit, the authentication of a document cannot be indicated by.
A. facsimile signature.
B. mark or stamp.
C. electronic meth od of authentication.
D. none of the above.
ANSWER: D
49. The obligation of the applicant of the credit to the beneficiary is.
A. to get the letter of credit opened confirming to terms of sale con tract.
B. to remain liable for the payment if the issuing bank fails to pay.
C. both 1 and 2 options.
D. only to get the credit opened.
ANSWER: C
50. Applicant for a letter of credit is not liable to the issuing bank.
A. for the charges of the issuing bank when collectable from the beneficiary, but he fails to pay.
B. actions of the intermediary bank.
C. the obligations imposed by foreig n laws and usages.
D. none of the above.
ANSWER: D
51. The responsibility of an accepting bank in a letter of credit is to.
A. accept bills drawn under the credit.
B. pay bills drawn under the credit.
C. accept and pay bills drawn under the credit.
D. accept the bill and get the payment from the issuing bank.
ANSWER: C
52. The responsibility of a negotiating bank is to.
A. verify that it negotiating only bills drawn und er credit advised by it.
B. the goods covered by the bill are safe and properly insured.
C. the documents tendered are as per the terms of credit.
D. both 2 and 3 above.
ANSWER: C
53. The responsibility of the confirming bank of a letter of credit is.
A. to negotiate and pay documents drawn under the credit.
B. vouchsafe the authenticity of the credit.
C. pay, if the issuing bank fails to pay docu ments that are in order.
D. pay, if the payment cannot be made by issuing bank due to gove rnment action.
ANSWER: A
54. Reimbursing bank under a letter of credit.
A. same as the issuing bank.
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B. the paying bank.
C. the bank from wh ich the negotiating bank can claim reimbursement.
D. branch of the issuing bank in the exporters country.
ANSWER: C
55. Under UCP, the banks involved in a letter of credit transaction are responsible for.
A. genuineness of documents submitted by the beneficiary.
B. non-fulfillment of obligations by the other banks.
C. delay in transmission of messages.
D. none of the above.
ANSWER: D
56. Under a letter of credit, the bill of exchange should be drawn on.
A. the issuing bank.
B. the issuing bank or any other bank as indicated in the credit.
C. the issuing bank or the importer as indicated in the credit.
D. any party as indicated in the credit.
ANSWER: B
57. As per Negotiable Instruments Act, the following will be a foreign bill.
A. A bill drawn in Mumbai on a party in New York and payable at Delhi .
B. A bill drawn in Chennai on a party in Kolkata and payable at Colombo .
C. A bill drawn in Bangalore on a party in Sydney and payable there.
D. none of the above.
ANSWER: C
58. As per UCP, the minimum amount for which marine insurance should be effected is.
A. FOB value.
B. CIF value.
C. FOB value plus 10%.
D. CIF value plus 10%.
ANSWER: D
59. The following document is not acceptable under a letter of credit unless specifically authorized by the
credit.
A. m arine insurance policy.
B. insurance document whic h specifies that the cover is subject to a excess.
C. certificate of insurance.
D. cover notes issued by br okers.
ANSWER: D
60. The currency in which the insurance policy is obtained should be the currency of .
A. the importers country.
B. the exporters country.
C. the letter of credit.
D. any country, which is easily exchangeable.
ANSWER: C
61. The date from which the marine insurance policy should be effective should be.
A. same as the date of the transport document.
B. same or later than the date of the transport d ocument.
C. same or earlier than the date of the transport documen t.
D. earlier than the date of the transport document.
ANSWER: C
62. General Average loss under marine insurance is.
A. the basis for calculation of premium.
B. losses suffered to compensate extraor dinary sacrifice made to save the property in common.

C. risks for which only average cost will be reimbursed.
D. none of the above.
ANSWER: B
63. Marine policy clause that currently gives widest coverage against risks is.
A. Institute Cargo Clause A.
B. Institute Cargo Clause B.
C. Institute Cargo Clause C.
D. All Risks Clause.
ANSWER: C
64. For Claiming under marine policy, the claimant should have insurable interest.
A. at the time of taking the policy.
B. when damage to or loss of good s occurs.
C. both at the time of taking the policy and o ccurrence of damage/loss.
D. either at the time of taking the policy or at the time of occurrence of damage/loss.
ANSWER: B
65. The description of goods in the following document should agree exactly with the description in the
letter of credit.
A. Bill of lad ing.
B. Commercial in voice.
C. Packing list.
D. all the above .
ANSWER: B
66. A certified invoice is one.
A. certified as correct by th e importers agent in the exporters country.
B. certified as correct by the consul of the importers country
C. certified as correct by Chamber of Commerce.
D. which includes a certificate of origin.
ANSWER: B
67. Certificate of origin indicates.
A. the country of shipment of g oods.
B. the place of manufacturer/product ion of goods.
C. the country of manufacturer/production of good s.
D. whether the product belongs to plant or animal ki ngdom.
ANSWER: C
68. Details about the exact contents of each package can be found in.
A. packing list.
B. packing cert ificate.
C. commercial invoice .
D. none of the above.
ANSWER: A
69. The following invoice does not evidence sale.
A. consular invoice.
B. certified invoice.
C. visaed invoice.
D. proforma invoi ce.
ANSWER: D
70. The following transport document is a document of title to goods.
A. bill of lading.
B. multimodal tr ansport document.
C. airway bill.
.

D. none of the above.
ANSWER: A
71. A bill of lading is.
A. a non-negotiable instrument.
B. a quasi-negotiable.
C. fully negotiable ins trument.
D. partly negotiable instrument .
ANSWER: B
72. A mates receipt is.
A. Document signed by an officer of a vessel evidencing receipt of a shipment on board the vessel.
B. a substitute bill of lading.
C. bill of lading evidencing g oods carried on deck.
D. a draft bill of lading.
ANSWER: A
73. In a bill of lading the consignees name is mentioned as to order. It means the goods will be delivered to
the order of.
A. consign or.
B. the bank.
C. the consig nee.
D. the shipping ag ent.
ANSWER: A
74. As per UCP, unless specifically authorized in the letter of credit, a bank will not accept.
A. through bill of lading.
B. short form bill of ladin g.
C. bill of lading indicating t hat the carrying vessel is propelled by sail only.
D. none of the above.
ANSWER: D
75. In the absence of specific mention in the letter of credit, under UCP a transport document is considered
stale.
A. if presented for negotiation 21 days after its issue.
B. if presented for negotiation after its issue.
C. if presented after expiry of the letter of cre dit.
D. if presented for negotiation after the goods rea ch the destination.
ANSWER: A
76. A straight bill of lading is one.
A. covering both land and water transport.
B. the goods covered by which are delivera ble to the consignee.
C. which is sent directly to the consignee.
D. none of the above.
ANSWER: B
77. Freight to pay bill of lading is acceptable if.
A. the contact term is CIF.
B. the contract term is CFR .
C. the contract term is FOB.
D. goods are carried by a for eign vessel.
ANSWER: C
78. The drawback of non-negotiable sea waybill is.
A. . it does not evidence contract of affreightmen t.
B. it increases the incidence of fraud.
C. goods will not be delivered withou t the waybill even if indemnity is executed.
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D. the buyer cannot sell the goods in transit by surrendering a paper document to a new buyer.
ANSWER: D
79. The following transport document is acceptable under a letter of credit.
A. house air waybill
B. house bill of ladin g.
C. warehouse receipt.
D. tramp bill of lading .
ANSWER: A
80. According to the Multimodal Transportation of Goods Act, a multimodal transport document cannot
be.
A . a bearer instrument.
B. an order instrument.
C. a non-negotiable inst rument.
D. none of the above.
ANSWER: D
81. Air waybill is prepared in.
A. three originals.
B. quadruplicate.
C. as many copie s as required by the exporter.
D. one original only.
ANSWER: A
82. Incoterms cover.
A. trade in intangi bles.
B. ownership and trans fer rights.
C. contracts of carriage
D. rights and obligation s of parties to contract of sales.
ANSWER: D
83. The following incoterms cannot be used for contracts providing for transportation of goods by sea.
A. CFR.
B. DDP.
C. DES.
D. DEQ.
ANSWER : B
84. The incoterm providing least responsibility to seller is.
A. EXW.
B. DDP.
C. FOB.
D. CIF.
ANSWE R: B
85. The group of incoterms under which the sellers responsibility is to obtain freight paid transport
document for main carriage is.
A. E terms.
B. C terms.
C. D terms.
D. F terms.
ANSWER: B
86. The incoterm should indicate the place of shipment in case of.
A. F terms
B. E terms .
C. C terms.
D. Dterms.
ANSWER: A
87. Incoterm is specific about the responsibility for marine insurance in case of.
A. FOB and EXW.
B. FOB and CIF.
C. CIF and CIP.
D. CPT and DD P.
ANSWER: C
88. The importer under FOB terms requests the exporter to book shipping space on vessel convenient to
the exporter. The exporter.
A. is bound to book the shipping space as it is his duty under FOB term.
B. Should refuse the request as it is the duty of the importer to book the shipping space.
C. may accept the request, but cannot recover the additional cost from the importer.
D. may accept and execute the request at the cost of the importer.
ANSWER: D
89. The group of terms arranged in order of increasing responsibility of exporter is.
A. C, D, E and E terms.
B. D, E, F and C terms.
C. E, F, C and D terms.
D. F, C, E and D terms.
ANSWER: C
90. The price quoted by the seller for the product.
A. Will vary depending upon the incoterm chos en.
B. is irrespective of the incoterm.
C. Will be the base price; the effe ct of incoterm to be added later.
D. none of the above.
ANSWER: A
91. Adoption of incoterms is.
A. compulsory for all intern ational contracts.
B. compulsory for all letter of credit transacti ons.
C. optional for the parties to the contract.
D. mandatory for transactions with Europ e.
ANSWER: C
92. Packing credit is.
A. an advance mad e for packing goods for export.
B. pre-shipment finance for export.
C. a priority sector advance.
D. none of the above.
ANSWER: B
93. The amount of packing credit should not normally exceed.
A. the local cost of manufacture for the exporter.
B. FOB value of the export contract.
C. CIF value of the export contract.
D. The cost of manufacture or the F OB value of the export contract, whichever is lower.
ANSWER: D
94. The following person is not eligible for packing credit.
A. merchant exporter.
B. a person making de emed exports.
C. sub-supplier to manufacturer expo rter.
D. supplier to sub-supplier to manufactur er exporter.
.
ANSWER: D
95. The running account facility for packing credit is available for.
A. status holders only.
B. exporters of specifi ed goods.
C. exporters with good track rec ord.
D. exporters with orders above Rs.10 0 crores.
ANSWER: C
96. The advantage to the exporter of running account facility of packing credit is.
A. production of letter of credit or firm order is completely waived.
B. the period of facility need not be adhered to.
C. production of letter of credit or firm order is waived immediately; they must be produced within
reasonable time.
D. the rate of i nterest is low.
ANSWER: C
97. The exemption from the condition that packing credit should not exceed domestic cost of production is
not waived for.
A. commodit y eligible for duty drawback.
B. commodity imported under advance lic ence.
C. HPS groundnuts.
D. agro based produ cts like tobacco.
ANSWER: B
98. The substitution of commodity/fresh export for adjustment of packing credit is not available for.
A. advance against sensitive commodities.
B. transactions of sister/associate/group co ncerns.
C. exporters availing running account facility.
D. none of the above.
ANSWER: B
99. Normally the maximum period for which packing credit advances are made in.
A. 90 days.
B. 135 days .
C. 180 days.
D. 360 days.
ANSWER: C
100. A per-shipment advance is not expected to be adjusted by .
A. proceeds of export bill.
B. export incentives.
C. post shipment fina nce.
D. local funds.
ANSWER: D
101. A packing credit was granted against an export order, but the export could not take place.
A. It should be reported to Reserve Bank of India.
B. The exporter should be blacklisted
C. Claim should preferred with ECGC .
D. Interest at domestic rate should be ch arged on the advance from the date of advance.
ANSWER: D
102. For direct exporters, the packing credit should normally be granted only against.
A. a letter of credit.
B. firm order.
C. export licen ce.
D. a letter of credi t or firm order.
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ANSWER: D
103. For packing credit in rupees, the interest for the period up to 180 days is chargeable at.
A. BPLR minus 2.5%.
B. BPLR minus 3%.
C. not exceeding BP LR minus 2.5%.
D. . not less than BPLR minus 2.5%.
ANSWER: C
104. Pre shipment Credit in Foreign Currency is available for a period of.
A. maximum 180 days.
B. minimum 180 days.
C. maximum 270 days.
D. maximum 360 days.
ANSWER: A
105. Pre-shipment Credit in Foreign Currency can be availed in.
A. US dollar only.
B. The currency of export only.
C. The currency of import only.
D. any permitted currency.
ANSWER: D
106. Advising of letter of credit will be done by the bank.
A. only to its customers.
B. to any person provide d the letter of credit is issued by its correspondent bank.
C. free of charge to its customers and for a cost to others.
D. . to any beneficiary and from any issuing bank.
ANSWER: B
107. The following is not a post-shipment advance.
A. Negotiation of bill under letter of credit.
B. Purchase of foreign bill.
C. Advance against bill for collection.
D. None of the above.
ANSWER: D
108. A bill drawn under the letter of credit contains discrepancies.
A. the bank should refuse to negotiate the documents.
B. take the bill on collection basis only.
C. must negotiate irrespective of the dis crepancies.
D. may purchase it or take it for collection, but sho uld not refuse to handle the bill.
ANSWER: D
109. The following is a must for an exporter
A. IEC number.
B. Exporters cod e number allotted by Reserve Bank.
C. A minimum local turnover of Rs 50 lakhs.
D. an export licence.
ANSWER: A
110. An export to Pakistan by post parcel should be declared in.
A. GR form.
B. EP form.
C. PP form.
D. GRX For m.
ANSWER: C

111. Realization of export proceeds in a period of 15 months from the date of shipment is allowed in the
case of.
A. all consignment exports.
B. exports on deferred paym ents terms.
C. exports to Nepal.
D. exports to Indian owned warehouses in Europe.
ANSWER: D
112. Generally, on exports the proceeds are to be realized within.
A. six months from the date of shipment.
B. one year from the date of shipment.
C. six months from the date of negotiat ion of documents.
D. one year from the date of negotiation of documents.
ANSWER: A
113. Availment of post shipment credit in foreign currency is compulsory for.
A. exports who have not availed packing credit.
B. all exporters who have availed packing credit .
C. exporters who have availed pre-shipment cred it in foreign currency.
D. none.
ANSWER : C
114. Post-shipment credit in foreign currency can be availed by.
A. use of on-shore foreign currency funds.
B. banks raising foreign currency funds ab road.
C. exporters arranging funds abroad.
D. Any of the above methods.
ANSWER: D
115. Advance remittance from the importer can be accepted by an exporter in India provided
A. the advance does not carry interest payment.
B. shipment will be made only after one year fro m the date of receipt of advance payment.
C. the advance does not exceed 25% of the export value.
D. the rate of interest, if payable, does not exceed Libor p lus 1%.
ANSWER: D
116. A bank may refuse to accept an export bill for collection.
A. when the customer has sufficient limits under bill discoun ting facility.
B. when the documents have discrepancies as compared to letter of credit requirements.
C. when the documents are received from a non-customer.
D. none of the above.
ANSWER: C
117. If the importer refuses to accept the bill drawn on him the exporter.
A. should reimport the goods.
B. must find an alternate buye r.
C. may reimport or sell to altern ate buyer depending upon commercial expediency.
D. sue the importer.
ANSWER: C
118. If export cargo is lost in transit, the exporter should.
A. claim under marine insurance.
B. claim with ECGC
C. seek write off of p ost-shipment credit.
D. forseek refund of customs duty.
ANSWER: A
119. Deferred payment export is a form of.
.
A. sellers credit.
B. buyers credit.
C. mutual credit.
D. market credit.
ANSWER: A
120. Buyers credit takes the form of.
A. exporters bank financing the bu yer directly.
B. exporters bank financing the buyers bank
C. both (a) and (b) above.
D. neither (a) nor (b) abov e.
ANSWER: C
121. Deferred payment exports refer to contracts where.
A. payment is to be made by the importer over 3 years and above.
B. payment is to be made by the importer after 6 months from the date of shipment.
C. the export for which the exporter avails deferred payment credit
D. lending in international markets on long-term basis.
ANSWER: B
122. Working Group for approval of project exports does not include.
A. Reserve Bank of India.
B. Financing bank.
C. Exim bank.
D. DGFT.
ANSWER: D
123. For project exports fulfilling norms for period of credit, in principle sanction can be given by.
A. the financing bank.
B. Exim bank.
C. The financin g bank for contracts worth up to Rs 25 crores and Exim bank for contracts worth up to
RS 100 crores.
D. the financ ing bank for contracts worth up to Rs 100 crores and Exin bank for contracts worth up to
Rs 25 crores.
ANSWER: C
124. Export of services on deffered payment terms requires clearance of the Working Group for.
A. contracts beyond Rs 5 crores.
B. all contracts.
C. contracts bey ond 20 crores
D. contracts beyond 10 crores .
ANSWER: B
125. In case of failure of the exporter, the liability of the bank which has issued the performance guarantee
is to.
A. c ompel the exporter to fulfil his obligation.
B. find alternative contractor who can execute the contract.
C. financially compensate the beneficiary up to the value of the contract.
D. financially compensate the beneficiary up to the guaranteed amount.
ANSWER: D
126. Advance payment guarantee assures.
A. the beneficiary that the exporter will make advance payments.
B. the exporter that the importer will make advance payments.
C. the importer to refund the money he has advanced to the exp orter, if the latter fails.
D. the exporter that the bank will extend credit for the contract
ANSWER: C
.

127. Indian parties are prohibited from making investment in foreign entity engaged in the business of.
A. real estate.
B. real estate or banking.
C. real estate or banking or agriculture.
D. none of the above.
ANSWER: B
128. Export Credit Guarantee Corporation(ECGC) policies do not cover risk against.
A. buyers protracted default to pay for the goods.
B. war in buyers country.
C. buyers failure to obtain necessary import licence or exchange authorization from authorities in his
country
D. ca ncellation of export licence. Answer:C
ANSWER: C
129. The standard policy of ECGC covers risk of.
A. buyers failure to obtain import licence.
B. cancellation of import license in the bu yers country.
C. insolvency of the collecting bank.
D. all the above.
ANSWER: B
130. The standard policy of ECGC protects loss to the extent of.
A. 90% for political risk and 60% for commercial risk.
B. 90% for both political and commercial risks.
C. 60% for political risk and 90% for commerci al risk.
D. 60% for both political and commercial risks.
ANSWER: B
131. The maximum amount of claim against an individual buyer that ECGC will accept under its standard
policy issued to an exporter is known as.
A. maximum liability.
B. credit limit.
C. individual li mit.
D. there is no such ceiling.
ANSWER: B
132. The standard policy of ECGC is issued.
A. on whole turnover for 12 months.
B. on whole turnover basis for 24 mo nths.
C. against each consignment separately.
D. on monthly basis.
ANSWER: B
133. The Small Exporters Policy of ECGC is issued to.
A. any exporter in the SSI category.
B. any exporter who is exempt from excise duty.
C. an exporter with an anticipated turnover in the next 12 months not exceeding 1 crore.
D. an exporter with an anticipated turnover in the next 12 months not exceeding 25 lakhs .
ANSWER: D
134. Which of the following information about the Small Exporters Policy is wrong?
A. Risk coverage is 95% for commercial risk and 100 % for political risk.
B. The policy is issued for a period of 12 months.
C. The premium payable is lower than under the s tandard policy.
D. All the above.
ANSWER: D
.
135. Under its maturity factoring facility ECGC offers which of the following services?
A. Credit protection and sales ledger maintenance.
B. Credit protection, sales ledger maintenance and collection.
C. Financing exports.
D. Invoice discountin g and sales ledger maintenance.
ANSWER: B
136. The maturity factoring of ECGC protects the exporter against.
A. failure of the buyer to obtain authority as per the regulations o f his country.
B. risk normally covered by General Insurers.
C. failure of the buyer to pay.
D. none of the above.
ANSWER: C
137. Cover under the guarantee of ECGC is available to.
A. the bank against the default of the importer.
B. the bank against the default of the exporter.
C. the exporter against the failure of the export er.
D. the bank and the exporter against the failure of the buyer.
ANSWER: B
138. Pre-shipment advances granted in excess of the FOB value of contract in anticipation of duty
drawback can be covered under.
A. Packing Credit Guarantee.
B. Whole Turnover Packing C redit Guarantee.
C. Export Production Finance Guarantee.
D. Export Finance Guarantee.
ANSWER: C
139. . Export Finance(Overseas Lending) Guarantee of ECGC protects.
A. banks providing foreign currency loans to their correspondents.
B. banks providing foreign currency loans to contractors executing projects abroad.
C. overseas branches financing Indian exports.
D. none of the above.
ANSWER: B
140. Post-shipment advances against export incentives can be covered under.
A. Post-shipment Export Credit Guarantee.
B. Whole Turnover Post-shipment Credit G uarantee.
C. Export Production Finance Guarantee.
D. Export Finance Guarantee.
ANSWER: D
141. The rate of premium payable to ECGC for eligible advances covered under Whole Turnover Packing
Credit Guarantee is.
A. 6 paise per Rs 100 p.a. on daily average products.
B. 6 paise per Rs 100 p.m. on monthly average produ cts.
C. 6 paise per Rs 100 p.m. on yearly average products.
D. 6% per annum.
ANSWER: A
142. The risk to a bank in confirming a letter of credit is covered by ECGC under
A. Export Performance Guarantee.
B. Transfer Guarantee.
C. Export Finance Gua rantee.
D. none of the above.
ANSWER: B

143. Under Exchange Fluctuation Risk Cover, the ECGC provides cover.
A. to the exporters on deferred payment terms against exchange fluctua tions.
B. to banks for advances made in foreign currency to importers abroad.
C. to banks against advances for deferred payments exports.
D. none of the above.
ANSWER: A
144. . In case of exports to countries placed by ECGC in its restricted cover categories.
A. the risk will be covered by ECGC only if specific applications from exporters are approved by them.
B. The corporation will not cover the exports.
C. the risk will be covered on intimation to EC XGC.
D. none of the above.
ANSWER: A
145. The Board of Trade is.
A. a wing of the board of Directors in companies engaged in foreign trade.
B. the authority that appraises foreign investment in India.
C. a consultative and advisory body for the Government if India on foreign trade policy.
D. an organization of exporters from India.
ANSWER: C
146. Commodity Boards do not differ from Exports Promotion Councils in respect of the following.
A. Commodity Boards deal with problems relating to production also.
B. . Commodity Board is a statutory body.
C. Commodity Board covers a specific pro duct.
D. none of the above.
ANSWER: C
147. Which of the following organization does not specialize in training activity?
A. Indian Institute of Foreign Trade.
B. Indian Trade Promotion Organisa tion
C. Indian Institute of Packaging.
D. none of the above.
ANSWER: B
148. The institution specializing in organizing fairs and exhibitions is.
A. Indian Institute of Foreign Trade.
B. Federation of Indian Export Orga nisations.
C. Indian Trade Promotion Oraganisations.
D. none of the above.
ANSWER: C
149. Market Access Initiative is not available for.
A. conducting market studies.
B. participation in internationa l trade fairs.
C. testing charges for engineering products .
D. none of the above.
ANSWER: D
150. Market Development Assistance is available to.
A. exporters with annual turnover up to Rs 10 cror es.
B. exporters with annual turnover up to Rs 5 crores.
C. exporters with annual turnover above Rs 10 crore s.
D. all exporters.
ANSWER: A
.

CAIIB BFM:



Balance sheet of a bank provides the following information:

Fixed Assets - 1000cr

Investment in central Govt Securities - Rs 10000cr

In standard loan accounts

Housing Loans - RS 6000c r (Secured, below Rs 10 lac)

the Retail loan - Rs 4000cr

Other loans - Rs 8000cr

sub-standard secured loans - Rs 1000cr

sub-standard unsecured loans - Rs 500c r

Doubtful loans (D-1, secured) - Rs 800cr

Doubtful loans (D-1, unsecured) - Rs 600c r

Doubtful loans (D-2, secured) - Rs 500cr

Doubtful loans (D-2, unsecured) - Rs 1000 cr

Doubtful loans (D-3, secured) - Rs 1000cr

Doubtful loans (D-3, unsecured) - Rs 600cr

Loss Assets - 50cr and

other assets - Rs 500cr .

Answer the following questions, based on this information, by using standard Approach for credit risk.

1. What is the amount of RWAs for investment in govt securities?

a. Rs 5000cr

b. Rs 3500cr

c. Rs 2500cr

d. Nil

2. What is the amount of RWAs for sub-standard unsecured accounts?

a. Rs 500cr

b. Rs 7500cr

c. Rs 1000cr

d. Rs 1500cr

3. What is the amount of RWAs for doubtful (D-1, unSecured) accounts?

a. Rs 300cr

b. Rs 500cr

c. Rs 800cr

d. Rs 900cr

4. What is the amount of RWAs for doubtful (D-2, unSecured) accounts?

a. Rs 300cr

b. Rs 500cr

c. Rs 800cr

d. Rs 900cr

5. What is the amount of RWAs for doubtful (D-3, unSecured) accounts?

a. Rs 300cr

b. Rs 500cr

c. Rs 800cr

d. Rs 900cr

6. What is the amount of RWAs for retail loans?

a. 3000cr

b. 4000cr

c. 5000cr

d. 6000cr

7. What is the amount of RWAs for housing loans?

a. 3000cr

b. 4000cr

c. 5000cr

d. 6000cr

Solution :

1. d

RW against Govt Securities = 0 %

So, RWA

= 10000 x 0%

= 0 Cr

2. a

If th e provision is less than 20 %, then RW is 150%

If the provision is 20-49 %, then RW is 100%

If the provision is 50% or more, then RW is 50 %

Provision in Sub-Standard Un-Secured - 25 %, and so, RW = 100 %

So, RWA

= 500 x 1 00 %

= 500 Cr

3. a

If th e provision is less than 20 %, then RW is 150%

If the provision is 20-49 %, then RW is 100%

If the provision is 50% or more, then RW is 50 %

Provision in doubtful (D-1, unsecured) - 100 %, and so, RW = 50 %

So, RWA

= 600 x 5 0 %

= 300 Cr

4. b

If th e provision is less than 20 %, then RW is 150%

If the provision is 20-49 %, then RW is 100%

If the provision is 50% or more, then RW is 50 %

Provision in doubtful (D-2, unsecured) - 100 %, and so, RW = 50 %

So, RWA

= 1000 x 50 %

= 500 Cr

5. a

If th e provision is less than 20 %, then RW is 150%

If the provision is 20-49 %, then RW is 100%

If the provision is 50% or more, then RW is 50 %

Provision in doubtful (D-3, unsecured) - 100 %, and so, RW = 50 %

So, RWA

= 600 x 5 0 %

= 300 Cr

6. a

RW on retail loans = 75 %

So, RWA

= 4000 x 75%

= 3000 Cr

7. a

RW on housing loans = 50 %

So, RWA

= 6000 x 50%

= 3000 Cr

Gist of fedai rules

Gist of Important FEDAI Rules

Rule 1: Hours of Business

1.1 The exchange trading hours for Inter-bank forex market in India would be from

9.00 a.m. to 5.00 p.m. No customer transaction should be undertaken by the

Authorised Dealers after 4.30 p.m. on any working day. 1.2 Cut-off time limit of 05.00 p.m. is not applicable for cross- currency transactions.

In terms of paragraph 7.1 of Internal Control Guidelines over Foreign Exchange

Business of Reserve Bank of India (February 2011), Authorised Dealers are

permitted to undertake cross-currency transactions during extended hours, provided

the Managements lay down the extended dealing hours. 1.3 For the purpose of Foreign Exchange business, Saturday will not be treated as

a working day. 1.4 “Known holiday” is one which is known at least 4 working days before the date. A holiday that is not a “known holiday” is defined as a “suddenly declared holiday”. Rule 2: Export Transactions

2.1. Post-shipment Credit in Rupees

(c) Application of exchange rate: Foreign Currency bills will be

purchased/discounted/ negotiated at the Authorised Dealer’s current bill buying rate

or contracted rate. Interest for the normal transit period and/or usance period shall

be recovered upfront simultaneously. (d) Crystallization and Recovery:

(ii) Authorized Dealers should formulate own policy for crystallization of foreign

currency liability into rupee liability, in case of non-payment of bills on the due

date. (iii) The policy in this regard should be transparently available to the customers. (iv) For crystallization into Rupee liability, the Authorised Dealer shall apply its TT

selling rate of exchange. The amount recoverable, thereafter, shall be the

crystallized Rupee amount along with interest and charges, if any.



(v) Interest shall be recovered on the date of crystallization for the overdue period

at the appropriate rate; and thereafter till the date of recovery of the

crystallized amount. (vi) Export bills payable in countries with externalization issues shall also be

crystallized as per the policy of the authorised dealer, notwithstanding receipt

of advice of payment in local currency. (d) Realization of Bills after crystallization: After receipt of advice of realization,

the authorised dealer will apply TT buying rate or contracted rate (if any) to convert

foreign currency proceeds. (e) Dishonor of bills: In case of dishonor of a bill before crystallization, the bank

shall recover:

(ii) Rupee equivalent amount of the bill and foreign currency charges at TT selling rate. (iii) Appropriate interest and rupee denominated charges. 2.2. Application of Interest

(c) Rate of interest applicable to all export transactions shall be as per the

guidelines of Reserve Bank of India from time to time. (d) Overdue interest shall be recovered from the customer, if payment is not

received within normal transit period in case of demand bills and on/or before

notional due date/actual due date in case of usance bills, as per RBI directive. (e) Early Realization: In case of early realization, interest for the unexpired period

shall be refunded to the customer. The bank shall also pay or recover notional swap

cost as in the case of early delivery under a forward contract. 2.3. Normal Transit Period:

Concepts of normal transit period and notional due date are linked to concessional

interest rate on export bills. Normal transit period comprises the average period

normally reckoned from the date of negotiation/purchase/discount till the receipt of

bill proceeds.

It is not to be confused with the time taken for the arrival of the goods at the destination. Normal transit period for different categories of export business are laid down as below:

(c) Fixed Due Date: In the case of export usance bills, where due dates are fixed, or are reckoned from date of shipment or date of bill of exchange etc, the actual due

date is known. Therefore, in such cases, normal transit period is not applicable. (d) Bills in Foreign Currencies – 25 days

(e) Exports to Iraq under United Nations Guidelines – Max. 120 days

(g) Bills drawn in Rupees under Letters of Credit (L/C)

(i) Reimbursement provided at centre of negotiation - 3 days

(ii) Reimbursement provided in India at centre different from centre of

negotiation - 7 days

(iii) Reimbursement provided by banks outside India - 20 days

(iv) Exports to Russia under L/C where reimbursement is provided by RBI - 20 days. (h) Bills in Rupees not under Letter of Credit - 20 days

(i) TT reimbursement under Letters of Credit (L/C)

(i) Where L/C provides for reimbursement by electronic means - 5 days

(ii) Where L/C provides reimbursement claim after certain number of days

from the date of negotiation - 5 days + this additional period. 2.4. Substitution/Change in Tenor:

(o) In case of change in the usance of a bill, interest on post-shipment credit shall

be charged to the customer, as per RBI guidelines. In addition, the bank shall

charge or pay notional swap difference. Interest on outlay of funds for such

swaps shall also be recovered from the customer at rate not below base rate

of the bank concerned. (p) It is optional for banks to accept delivery of bills under a contract made for

purchase of a clean TT. In such cases, the bank shall recover/pay notional

swap difference for the relative cover. Interest at the rate not below base rate

of the bank would be charged on the outlay of funds. 2.5. Export Bills sent for collection:

(a) Application of exchange rates: The conversion of foreign currency proceeds of

export bills sent for collection or of goods sent on consignment basis shall be

done at prevailing TT buying rate or the forward contract rate, as the case

may be. The conversion to Rupee equivalent shall be made only after the

foreign currency amount is credited to the nostro account of the bank. (b) On receipt of credit advice/statement of nostro account and compliances of

guidelines, requirements of the Bank and FEMA, the Bank shall transfer funds

for the credit of exporter’s account within two working days. (c) If the above stipulated time limit is not observed, the Bank shall pay

compensation for the delayed period at the minimum interest rate charged on

export credit. Compensation for adverse movement of exchange rate, if any, shall also be paid as per the compensation policy of the bank.



Rule 3: Import Transactions

3.1 Application of exchange rate:

(a) Retirement of import bills - Exchange rate as per forward sale contract, if

forward contract is in place. Prevailing Bills selling rate, in case there is no

forward contract. (b) Crystallization of Import - same as above bill (vide para 3.3 below)

(c) For determination of stamp - As per exchange rate provided by the duty on

import bills authority concerned. 3.2. Application of Interest:

(a) Bills negotiated under import letters of credit shall carry commercial rate of

interest as applicable to banks’ domestic advances from time to time. (b) Interest remittable on interest bearing bills shall be subject to the directive of

Reserve Bank of India in this regard. 3.3. Crystallization of Import Bill under Letters of Credit. Unpaid foreign currency import bills drawn under letters of credit shall be

crystallized as per the stated policy of the bank in this respect. Rule 4 Clean Instruments:

4.1. Outward Remittance: Outward remittance shall be effected at TT selling rate of

the bank ruling on that date or at the forward contract rate. 4.2. Encashment of foreign currency notes and instruments, Foreign currency

travelers’ cheques, currency notes, foreign currency in prepaid card, debit/credit

card will be encashed at Authorised Dealer’s option at the appropriate buying rate

ruling on the date of encashment. 4. 3. Payment of foreign inward remittance, Foreign currency remittance up to an

equivalent of USD 10,000/- shall be immediately converted into Indian Rupees. Remittance in excess of equivalent of USD 10,000 shall be executed in foreign

currency. The beneficiary has the option of presenting the related instrument for

payment to the executing bank within the period prescribed under FEMA. 4.4. The applicable exchange rate for conversion of the foreign currency inward

remittance shall be TT buying rate or the contracted rate as the case may be. 4.5. Compensation for delayed payment: Authorised Dealers shall pay or send

intimation, as the case may be, to the beneficiary in two working days from the date

of receipt of credit advice / nostro statement. In case of delay, the bank shall pay

the beneficiary interest @ 2 % over its savings bank interest rate. The bank shall

also pay compensation for adverse movement of exchange rate, if any, as per its

compensation policy



Rule 5 Foreign Exchange Contracts:

5.1. Contract amounts: Exchange contracts shall be for definite amounts and

periods. When a bill contract mentions more than one rate for bills of different

deliveries, the contract must state the amount and delivery against each such rate. 5.2. Option period of delivery: Unless the date of delivery is fixed and indicated in

the contract, the option period may be specified at the discretion of the customer

subject to the condition that such option period of delivery shall not extend beyond

one month. If the fixed date of delivery or the last date of delivery option is a known

holiday, the last date for delivery shall be the preceding working day. In case of

suddenly declared holidays, the contract shall be deliverable on the next working

day. Contracts permitting option of delivery must state the first and last dates of

delivery. For Example: 18th January to 17th February, 31st January to 29th Feb. 2012. “Ready” or “Cash” merchant contract shall be deliverable on the same day. “Value next day” contract shall be deliverable on the working day immediately

succeeding the contract date. A spot contract shall be deliverable on second

succeeding working day following the contract date. A forward contract is a contract

deliverable at a future date, duration of the contract being computed from spot value

date at the time of transaction”. 5. 3. Place of delivery: All contracts shall be understood to read “to be delivered or

paid for at the Bank” and “at the named place”. 5.4. Date of delivery: Date of delivery under forward contracts shall be:

(i) In case of bills/documents negotiated, purchased or discounted - the date of

negotiation/purchase/ discount and payment of Rupees to the customer. However, in case the documents are submitted earlier than, or later than the

original delivery date, or for a different usance, the bank may treat it as proper

delivery, provided there is no change in the expected date of realization of

foreign currency calculated at the time of booking of the contract. No early

realization or late delivery charges shall be recovered in such cases. (ii) In case of export bills/documents sent for collection - Date of payment of

Rupees to the customer on realization of the bills. (iii) In case of retirement/crystallization of import bills/documents - the date of

retirement/ crystallization of liability, whichever is earlier?

5.5. Option of delivery: In all forward merchant contracts, the merchant, whether a

buyer or a seller will have the option of delivery. 5.6. Option of usance: The merchant purchase contract should state the tenor of

the bills/documents. Acceptance of delivery of bills/documents drawn for a different

tenor will be at the discretion of the bank



5.7. Merchant quotations: The exchange rate shall be quoted in direct terms i.e. so many Rupees and Paise for 1 unit or 100 units of foreign currency. 5.8. Rounding off: Rupee equivalent of the foreign currency Settlement of all

merchant transactions shall be effected on the principle of rounding off the Rupee

amounts to the nearest whole Rupee i.e. without paise. RULE 6 Early Delivery, Extension and Cancellation of Foreign Exchange

Contracts

6.1. General

(i) At the request of a customer, unless stated to the contrary in the provisions of

FEMA, 1999, it is optional for a bank to: (a). Accept or give early delivery; or

(b). Extend the contract. (ii) It is the responsibility of a customer to effect delivery or request the bank for

extension / cancellation as the case may be, on or before the maturity date of

the contract. 6.2. Early delivery: If a bank accepts or gives early delivery, the bank shall

recover/pay swap difference, if any. 6.3. Extension: Foreign exchange contracts where extension is sought by the

customers shall be cancelled (at an appropriate selling or buying rate as on the date

of cancellation) and rebooked simultaneously only at the current rate of exchange. The difference between the contracted rate, and the rate at which the contract is

cancelled, shall be recovered from/paid to the customer at the time of extension. Such request for extension shall be made on or before the maturity date of the

contract. 6.4. Cancellation

(i) In case of cancellation of a contract at the request of a customer, (the request

shall be made on or before the maturity date) the Authorised Dealer shall

recover/ pay, as the case may be, the difference between the contracted rate

and the rate at which the cancellation is effected. The recovery/payment of

exchange difference on cancellation of forward contracts before the maturity

date may be either upfront or back-ended at the discretion of banks. (ii) Rate at which cancellation is to be effected:

(a) Purchase contracts shall be cancelled at T.T. selling rate of the

contracting Authorised Dealer

(b) Sale contracts shall be cancelled at T.T. buying rate of the contracting

Authorised Dealer



(c) Where the contract is cancelled before maturity, the appropriate forward

T.T. rate shall be applied. (bi) Notwithstanding the fact that the exchange contract between the customer

and the bank becomes impossible of performance, for whatever reason,

including Government prohibitory orders, the exchange contract shall not be

deemed to have become void and the customer shall forthwith apply to the

Authorised Dealer for cancellation, as per the provisions of paragraph 6.4.(i)

and (ii) above. (iv)

(d) In the absence of any instructions from the customer, vide para 6.1(ii), a

contract which has matured shall be cancelled by the bank on the 7th working

day after the maturity date. (e) Swap cost, if any, shall be recovered from the customer under advice to him. © When a contract is cancelled after the maturity date, the customer shall not be entitled

to the exchange difference, if any, in his favour, since the contract is cancelled on

account of his default. He shall, however, be liable to pay the exchange difference

against him. 6.5. Swap cost/gain:

(ii) In all cases of early delivery of a contract, swap cost shall be recovered from

the customer, irrespective of whether an actual swap is made or not. Such

recoveries should be made either back-ended or upfront at discretion of the

bank. (iii) Payment of swap gain to a customer shall be made at the end of the swap period. 6.6. Outlay and Inflow of funds:

Authorised Dealer shall recover interest on outlay of funds for the purpose of

arranging the swap, in addition to the swap cost in case of early delivery of a

contract.

If such a swap leads to inflow of funds, interest shall be paid to the customer. Funds

outlay / inflow shall be arrived at by taking the difference between the original

contract rate and the rate at which the swap could be arranged. The rate of interest

to be recovered / paid should be determined by banks as per their policy in this

regard.

Types of LCs

Different Types of LC



1. Irrevocable LC. This LC cannot be cancelled or modified without consent of the beneficiary (Seller). This LC reflects absolute liability of the Bank (issuer) to the other party.



2. Revocable LC. This LC type can be cancelled or modified by the Bank (issuer) at the customer's instructions without prior agreement of the beneficiary (Seller). The Bank will not have any liabilities to the beneficiary after revocation of the LC.



3. Stand-by LC. This LC is closer to the bank guarantee and gives more flexible collaboration opportunity to Seller and Buyer. The Bank will honour the LC when the Buyer fails to fulfill payment liabilities to Seller.



4. Confirmed LC. In addition to the Bank guarantee of the LC issuer, this LC type is confirmed by the Seller's bank or any other bank. Irrespective to the payment by the Bank issuing the LC (issuer), the Bank confirming the LC is liable for performance of obligations.



5. Unconfirmed LC. Only the Bank issuing the LC will be liable for payment of this LC.



6. Transferable LC. This LC enables the Seller to assign part of the letter of credit to other party(ies). This LC is especially beneficial in those cases when the Seller is not a sole manufacturer of the goods and purchases some parts from other parties, as it eliminates the necessity of opening several LC's for other parties.



7. Back-to-Back LC. This LC type considers issuing the second LC on the basis of the first letter of credit. LC is opened in favor of intermediary as per the Buyer's instructions and on the basis of this LC and instructions of the intermediary a new LC is opened in favor of Seller of the goods.



8. Payment at Sight LC. According to this LC, payment is made to the seller immediately (maximum within 7 days) after the required documents have been submitted.



9. Deferred Payment LC. According to this LC the payment to the seller is not made when the documents are submitted, but instead at a later period defined in the letter of credit. In most cases the payment in favor of Seller under this LC is made upon receipt of goods by the Buyer.



10. Red Clause LC. The seller can request an advance for an agreed amount of the LC before shipment of goods and submittal of required documents. This red clause is so termed because it is usually printed in red on the document to draw attention to "advance payment" term of the credit.

Basel 3

BASEL-III:

Originally set in 1974, the most recent set of norms, called Basel III. These are common set of global standards to be implemented by banks across countries. In India, lenders have to adhere to these regulations from 2019. After the 2008 financial crisis, need arose to strengthen the banking system further so that they could meet further risks. To meet these dangers, banks were asked to maintain a certain minimum level of capital and not lend all the money they receive from deposits. This acts as a buffer during hard times.

The Basel III norms also consider liquidity risk. The capital norms recommend Capital Adequacy ratio (CAR) be increased to 8 per cent internationally, while in India it is 9 per cent. CAR is a ratio of a bank‘s capital to its risk. This capital is further classified into two – Tier 1 (the main portion of the banks‘ capital, usually in the form of equity shares) and Tier 2 capital.

Domestic Systemically Important Banks (D-SIBs):

D-SIB means that the bank is too big to fail. According to the RBI, some banks become systemically important due to their size, cross-jurisdictional activities, complexity and lack of substitute and interconnection. Banks whose assets exceed 2% of GDP are considered part of this group. The RBI stated that should such a bank fail, there would be significant disruption to the essential services they provide to the banking system and the overall economy.

The too-big-to-fail tag also indicates that in case of distress, the government is expected to support these banks. Due to this perception, these banks enjoy certain advantages in funding.It also means that these banks have a different set of policy measures regarding systemic risks and moral hazard issues.

As per the framework, from 2015, every August, the central bank has to disclose names of banks designated as D-SIB. It classifies the banks under five buckets depending on order of importance. ICICI Bank and HDFC Bank are in bucket one while SBI falls in bucket three. Based on the bucket in which a D-SIB is, an additional common equity requirement applies. Banks in bucket one need to maintain a 0.15% incremental tier-I capital from April 2018. Banks in bucket three have to maintain an additional 0.45%.

"Too big to fail" describes the concept whereby a business has become so large that a government will provide assistance to prevent its failure because not doing so would have a disastrous ripple effect throughout the economy.

Capital Adequacy Ratio (CAR):

Capital Adequacy Ratio (CAR) is also known as Capital to Risk (Weighted) Assets Ratio (CRAR) is the ratio of a bank‘s capital to its risk. Central Bank regulates bank‘s CAR to ensure that it can absorb a reasonable amount of loss and complies with statutory Capital requirements.

It is a measure of a bank's capital. It is expressed as a percentage of a bank's risk weighted credit exposures.

This ratio is used to protect depositors and promote stability and efficiency of financial systems around the world.

Two types of capital are measured: tier one capital, which can absorb losses without a bank being required to cease trading, and tier two capital, which can absorb losses in the event of a winding-up and so provides a lesser degree of protection to depositors.

CAR = Tier I Capital + Tier II Capital / Risk Weighted Assets

TIER 1 CAPITAL = (paid up capital + statutory reserves + disclosed free reserves) - (equity investments in subsidiary + intangible assets + current & brought-forward losses)

TIER 2 CAPITAL = A) Undisclosed Reserves + B) General Loss reserves + C) hybrid debt capital instruments and subordinated debts

The Basel III norms stipulated a capital to risk weighted assets of 8%. However, as per RBI norms, Indian scheduled commercial banks are required to maintain a CAR of 9% while Indian public sector banks are emphasized to maintain a CAR of 12%.



Credit Risk:

Credit risk refers to the risk that a borrower may not repay a loan and that the lender may lose the principal of the loan or the interest associated with it or both.

This can occur on account of poor financial condition of the borrower, and it represents a risk for the lender.

Credit risks are calculated based on the borrowers' overall ability to repay. To assess credit risk on a consumer loan, lenders look at the five C's: an applicant's credit history, his capacity to repay, his capital, the loan's conditions and associated collateral

Operational Risk:

Operational risk is the prospect of loss resulting from inadequate or failed procedures, systems or policies.

 Employee errors

 Systems failures

 Fraud or other criminal activity

 Any event that disrupts business processes

This definition includes legal risk but excludes strategic and reputational risk.

Operational risk can play a key role in developing overarching (comprehensive) risk management programs that include business continuity and disaster recovery planning, and information security and compliance measures.

A first step in developing an operational risk management strategy can be creating a risk map -- a plan that identifies, assesses, communicates and mitigates risk.

Market Risk:

Market risk is the risk of losses in positions arising from movements in market prices.

There is no unique classification as each classification may refer to different aspects of market risk. Nevertheless, the most commonly used types of market risk are

 Equity Risk: The risk that stock or stock indices prices or their implied volatility will change.

 Interest rate Risk: The risk that interest rates or their implied volatility will change.

 Currency Risk: The risk that foreign exchange rates or their implied volatility will change.

 Commodity Risk: The risk that commodity prices (e.g. corn, crude oil) or their implied volatility will change.

Liquidity Risk:

Liquidity risk is the risk that a company or bank may be unable to meet short term financial demands. This usually occurs due to the inability to convert a security or hard asset to cash without a loss of capital and/or income in the process.

Liquidity risk generally arises when a business or individual with immediate cash needs, holds a valuable asset that it cannot trade or sell at market value due to a lack of buyers, or due to an inefficient market where it is difficult to bring buyers and sellers together.

Reputational Risk:

Reputational risk is the risk of damage to a bank‘s image and public standing that occurs due to some dubious actions taken by the bank. Sometimes reputational risk can be due to perception or negative publicity against the bank and without any solid evidence of wrongdoing. Reputational risk leads to the public‘s loss of confidence in a bank.

The bank‘s failure to honor commitments to the government, regulators, and the public at large lowers a bank‘s reputation. It can arise from any type of situation relating to mismanagement of the bank‘s affairs or non-observance of the codes of conduct under corporate governance.

Risks emerging from suppression of facts and manipulation of records and accounts are also instances of reputational risk. Bad customer service, inappropriate staff behavior, and delay in decisions create a bad bank image among the public and hamper business development.

RCSA:

RCSA (Risk Control Self-Assessment) is an empowering method/process by which management and staff of all levels collectively identify and evaluate risks and associated controls. It is a technique that adds value by increasing an operating unit‘s involvement in designing and maintaining control and risk systems as well as identifying risk exposures and determining corrective action. It aims to integrate risk management practices and culture into the way staff undertake their jobs, and business units achieve their objectives. It provides a framework and tools for management and employees to:

 Identify and prioritize their business objectives

 Assess and manage high risk areas of business processes

 Self-evaluate the adequacy of controls

 Develop risk treatment action plans

 Ensure that the identification, recognition and evaluation of business objectives and risks are consistent across all levels of the organization

Paripassu Charge:

A ‗Paripassu‘ charge gives lenders a right to the property on which a charge is created in proportion to the amount lent to the debtor. Let us assume two banks ‗X‘ and ‗Y‘ have lent to a company with the outstanding at Rs 70 lakh and Rs 30 lakh respectively and have‗paripassu‘ charge over the assets hypothecated. In case of liquidation of that company, the lenders ‗X‘ and ‗Y‘ will share the proceeds from liquidation in proportion to the outstanding loan amount, that is, 70:30

Reverse Mortgage and how does it work:

A reverse mortgage is a loan extended to senior citizens against the security of a house property owned by them. The loan is given in lump sum or in installments and it provides important cash flow to the senior citizens who require money during their old age. They continue to be the owners of the house and occupy it. The loan obligation is deferred till the death of the homeowner. The legal heirs of senior citizens can repay the loan amount after the death of the borrower and the bank will release the security on the house property.

LC and BG difference

Difference between Letter of Credit and Bank Guarantee
Difference between Letter of Credit and Bank Guarantee
📣📣📣📣📣📣📣
Introduction🏙
⬅⬅⬅⬅⬅⬅⬅⬅
This two terminology looks similar but both are very different. When one wants to expand the business means beyond the national boundary or within, one needs assurance from the buyer side that after delivery of goods or services the payment will receive and this can be done by the bank only.

In short, both these terms are used while doing business or transactions with domestic or international companies.
So, both these services are facilitated by the bank but in a different way as per the need of seller party.
Letter of Credit🏙
⬅⬅⬅⬅⬅⬅⬅⬅⬅
It is used while there is a high level of risk involves in business.It is used while doing import and export transactions with international companies.L/C is a written commitment issued by the bank or some other financial institutions for payment assurance to the seller party from buyer’s request.In L/C, the seller gets a guarantee of payment from the buyer’s banks on the due date payment will receive only if the seller meets all the conditions of deal like timely delivery etc.Banks offer a service like L/C on the basis of proof provided by the buyer’s party.If the buyer fails to make payment to the seller, the bank pays on behalf of a buyer and then the bank will recover it from a buyer anyhow.Banks will charge fees for this type of facilities.So in short, letter of credit is beneficial when product or service is delivered and payment is not done.It eliminates the financial risk involved in the business.

Types of Letter of Credit🎎
⬅⬅⬅⬅⬅⬅⬅⬅⬅⬅⬅
🗼Irrevocable Letter of Credit:
It is not modified or cancelled without the concern of all the parties.
🗼Revocable Letter of Credit:
In it, the issuing bank can revoke or cancel the letter of credit any time without prior notice to the seller.
🗼Confirmed Irrevocable Letter of Credit:
In it, the confirming bank gives more assurance to seller same as issuing bank.
🗼Unconfirmed Irrevocable Letter of Credit:
In it, an advisory bank from the seller's side performs as an agent for the issuing bank without any responsibility to the seller.
🗼Revolving Letter of Credit
This type of letter is used if in case regular transactions take place and remain valid for a long term without issuing the another letter of credit.

Bank Guarantee🏙
⬅⬅⬅⬅⬅⬅⬅⬅⬅⬅
🏦 guarantee is a service by which bank gives a guarantee to the seller on behalf of his client for assurance of payment.
🏢So, Bank guarantee has the same function as a letter of credit but with some differences.
🏦 guarantee generally used in domestic transactions.
🏦 guarantee is beneficial when contractual obligations are not fulfilled by the other seller party.
🏦 guarantee is used in infrastructure and real estate projects to reduce risk level.
⤵Letter of Credit V/s 🎎Bank Gurantee
Basis🎟
⤵Letter of CreditBank Guarantee-DefinitionA letter of credit is an obligation by the bank to the seller if the criteria met, the bank will make payment.

🎎In bank guarantee, if the opposing party doesn’t fulfil contractual obligations the Bank will make payment.
Boundary🎟
⤵It is used internationally.
🎎It is used domestically.
Protection🎟
⤵It protects both parties but favours exporter.
🎎It also protects both but favours buyer.
Industry🎟
⤵It is used by merchants.
🎎It is used by real estate and infrastructure developer.
L/Cs are frequently used in international transactions compared with bank guarantees. When comparing the two instruments, the market for bank guarantees is much larger than that for L/Cs.

Current affair s on 03.06.2019

Today's Headlines from www:

*Economic Times*

📝 Sebi wants 10% mandatory deposit before appeals at SAT against its orders

📝 DoT may auction 4G, 5G spectrum by October

📝 SCCL aims for Rs 50,000 crore turnover

📝 India expects US govt to restore benefits under GSP

📝 Gems, jewellery exports dip 5.32% in 2018-19

📝 Puravankara to launch 13 housing projects worth Rs 3,000 cr this fiscal

📝 TPDDL claims Rs 7 crore dues from NDMC, DSIIDC

📝 CIL's output falls 1.1%, off-take 1.4% in May

*Business Standard*

📝 India to make G20 pitch for taxing digital giants like Google, Facebook

📝 Corporate earnings down 0.1% YoY in March quarter due to slowdown in demand

📝 M&M to expand African footprint, plans manufacturing units in Sudan, Kenya

📝 International Udan takes off with Spicejet's Guwahati-Dhaka flight

📝 Economists caution govt over fiscal stimulus, call for RBI rate cut

📝 India's engineering sector in a tight spot after GSP withdrawal: Expert

📝 FPIs remain buyers for fourth consecutive month; infuse Rs 9,031 cr in May

*Financial Express*

📝 India, China to account for nearly half of air passenger growth in two decades, says IATA

📝 Google-backed Dunzo extends delivery service to retailers not listed on its platform

📝 Alibaba makes $100 million bet in Indian short video market dominated by ByteDance’s TikTok

📝 Reliance restarts lobbying with US lawmakers; ropes in new lobbyist

📝 Travel marketplace Ixigo’s revenue jumps to Rs 113 crore in FY19; Tier ll, lll cities drive traffic

📝 BoB proposes to raise Rs 11,900 crore through share sale in FY’20

📝 Ahead of potential IPO, WeWork’s revenue doubles in Q1 2019 while it continues to lose capital

*Mint*

📝 Small finance banks eye listing even as peers face challenges

📝 Startup funding witnesses a late-stage boom in 2019

📝 GSK Consumers Healthcare gets shareholders' approval for merger with HUL

📝 Bharti Infratel, Indus Towers merger gets NCLT nod

📝 Air cooler makers expects double-digit jump in sales this season

📝 ONGC topples Indian Oil to regain most profitable PSU tag

📝 Airports Authority of India pitches for adding its airports for foreign flights

📝 External commercial borrowings drop 20% in April.

Caiib BFM recollected questions on December 9th 2018 exam

CAIIB BFM Recollected questions on (09.12.2018)



1.Case studies form TT rates , similar question of EPC case study given in book, Basel and stock ratios.

2.5 numericals from TT Rate

3.5 from CRAR

4.5 from STOCK RATIOS

5 from EPC Export packing credit

6.1 direct question from Altzman score abt its definition

7.Numerical case study (5 questions) from yield and RWA

8.Pg no 563 for stock ratios, read definition and ratio formula

9.Pg no 123 for EPC- Pre n post shipment finance

10. Stock Approach and ratios

11.Volatile liabilities, total assets, deposits, loans etc given

12.Read the roles of various institutions like ECGC, EXIM Bank etc..In 1st sitting ECGC formation year was given, we had to identify the institution

13.1 case study on NRI a/c as well. Direct questions based on family tree.

14.1. VaR is used to find which type of risk?

15.. Select correct statement for exports to countries other than ACU

A) No export in INR

B) No export in any freely convertible currency

C) Export only in $ and euro

D) export from a 3rd party can be there

16.Like A is an Indian who now settled in UK and married B who is from Kenya but now a British citizen. They have 2 children (C &D) born in London. C is now married to a Pakistani citizen and settled in Karachi. D is working in London.



1. Status of D

A) NRI

B) Foreign National

C) Person of Indian origin

D) Person of Kenya origin



2. A can open which type of a/c?



3. Nominee A can make for her a/c out of her family)?

A) all

B) B

C) B&D

D) anyone



4. Can A add her dead Indian sister as nominee in FCNR a/c?



5. Can C open any account in India



17.case study on LC

18.Roles of various institutions like ECGC,EXIN bank



19. 2 to 3 corresponding bank questions



20.Questions on Treasury bills, NRI,RAROC



21.Question like How many days is NTP? How many days EPC canbe extended? ND all that



22.Total theoretical paper..

Numerical from NII, NIM, GAP, choose option in which to invest given risk weight and yield



23.5questions related to NRE



24.Max questions came from Market risk

25.Estimated level of operational risk,

Ratio in respect of liquidity risk management case study and one liner,

LCR,

T bills periods,

Policies for ALM,

identify risk,

CM period,

Case study on exchange rate,

Ripple effect which risk,

Going concern capital,

Vostro a/ c example,

NRE/NRO/FCNR,

SNRR,

LC case study for 5days, insurance risk cover, partial shipment,

DDA a/c,

Advance against undrwan balances,

Role of EXIM BANK,

SRP principles,

Tier I capital with CCB as on 31 mar 2018,

Stress testing,

Altman Zscore,

Securitization,

Heading meaning,

Operations risk cause based,

Operations risk measurement approach,

100%unpaired tier 1or usd10mn,

Interest rate swap,

RBI policy ratios,

Case study on call/put,

Case study on NII/NIM,

Crop loan NPA status,

Long term crop loan period,

Embedded option risk

Recollected questions of caiib abm on 02.06.2019

Re-collected questions posted by our members
---------------------------------------------------------------

1. Calculate GDP GNP, increase/decrease in GDP GNP

2. Calculate NNP 5 MARK

3. Freedom to learn comes under ? Ans : Organismic or humanistic theory

4. Sampling calculations

5. Break even point

6. NPV

7. NPA provision calculations

8. HRM 2 case study - Motivational factor, Appraisal, Training, Performance appraisal, career path planning, attitude etc
(Maximum question from HRM, Most of theories from HRM)

9. Numerical questions on Bond

10. 5 questions from Priority Sector Lending (PSL). To calculate NBC, ANBC, RIDF contribution, Weaker section - 10%, Micro enterprises - 7.5%

11. Calculating present value

12. Union budget 2018-19

13. 5 questions on linear programming

14. Demand & Supply break even point case study

15. Budget deficit sum

16. Many questions on simulation and time series

17. Effective ROI

18. Fiscal Deficit, Gross Fiscal Deficit, Personal Income

19. Case study based on export working capital limit

20. Calculation of national income and personal income

21. About CLR and SLR

22. Wealth theory By?

23. 1991 reforms which one not done?

24. Demand and supply equilibrium curve model 5M - Graph given

25. Motivational theories 1 mark questions for 5 questions

26. Performance appraisal method - Case Study 5 Mark

27. Difference between micro and macro economics

28. 5 questions from demand and supply curve

29. Cash budgeting

30. Employees feedback system

31. Job analysis

32. Calculate ANBC FIGURE

33. Calculate weaker section lending target

34. Johari window concept

35. Calculate Net Working Capital (NWC)

36. Calculate acid test ratio

37. Demand deposit with banking system includes what all?

38. 5 marks questions on Letter of credit and export credit

39. HDI rank of India?? 130

40. Functions of money

41. Meaning of "ends and scare means"

42. Laissez-Faire economy

43. Bond inversely proportional to interest

44. Tertiary sector

45. Tools of monetary policy

46. End of the period Annuity formula

47. Effective rate of interest calculation

48. Usage of Linea programming

49. Defination/Meaning/Use of Job Specifications

50. Related to Learning Theory

51. Related to career concept

52. Related to career path

53. Schein's Career Anchors

54. Locus of control

55. Transactional Analysis

56. Emotional Intelligence

57. TL, CC, LC sequence for a given case

58. 5 Questions from a case study regarding RBI guidelines for fund allocation for priority sectors

59. Acid Ratio Calculation

60. Turnover ratio calculation

61. Steps of loan document appraisal... stamping, filling, checking,etc

62. NPA account time frame for different categories

63. Micro and macro economics

64. Cash budget will be applicable on ...... 1. Educational institutions**, 2. Contractor, 3. Dairy farming taken, 4. Traders

65. Numerical questions on ECB - 5 marks

Current affair s on 02.06.2019

Today's Headlines from www:

*Economic Times*

📝 Indian Railways is emerging as a hub of innovation for service providers

📝 Proper nutrition policy can cut diet-related deaths in India: Experts

📝 Ircon eyes railway projects in Malaysia, Bangladesh

📝 Airtel bullish on firm tariffs as telecom sector returns to stability

📝 S&P 500 wipes out $4 trillion in its second-worst May since ‘60s

📝 No relief in sight, mercury set to rise in central, NW India: IMD

*Business Standard*

📝 US move 'unfortunate', says India as Trump ends GSP trade privileges

📝 GST collection crosses Rs 1 trillion for third straight month in May

📝 Maruti Suzuki sales slip 22% in May, posts sharpest fall in 7 years

📝 Australia's Cotton On enters India through Myntra, plans offline stores

📝 Number of ATMs dips, PoS centres see rise in digital payments push

📝 Life insurers take cover in loans to avert surrenders, improve persistency

📝 Tata Steel completes acquisition of Bhushan Energy for Rs 800 crore

📝 Govt to formalise PSU general insurance consolidation plan in three months

*Financial Express*

📝 Tata Motors domestic sales drop 26 per cent to 40,155 units in May

📝 China targets FedEx in escalating trade war with US, hinting of blacklisting "unreliable" foreign firms

📝 Uber Eats global commission down nearly 50% due to bruising battle with Zomato, Swiggy in India

📝 Odisha plans startup hubs to boost entrepreneurship ecosystem; recognises 423 ideas so far

📝 Slack’s Q1 revenue surges 67% to $134 million ahead of IPO

📝 Ducati India to scale up ‘riding experiences’

*Mint*

📝 India looks to Asian mills for SAIL tie-up on Arcelor deal delay

📝 IndiGo close to new engine deal, may drop Pratt & Whitney for CFM

📝 Investors seek relief as trade threats roil emerging markets

📝 US preparing antitrust probe of Google: Report

📝 Elon Musk loses $4.9 billion in Tesla's worst-ever start to a year

📝 NASA plans to send equipment to Moon from 2020, first time since 1970s

Caiib single link for all recollected questions

CAIIB ABM TODAY EXAM 55 QUESTIONS RECOLLECTED by Srinivas Kante

1.Hicks -Hansen synthesis
2.Basic difference between IS and LM curve
3.Increase in money supply Lowe interest rate and raising inflation
4.NDP @factor cost
5.Demand –pull inflation means
6.Erosion as per the role
7.Climate Survey
8.Case study one related to Budget
9.Central limit theorem
10.sampling methods .
11. job erosion
12 curreneaccountdefficit
13 Gross deficit etc.
case
14..standard deviations mean related
15 .Case 3 Xyz jewellery shop
Related
But the level oh complexity is very high..n ..
16 fiscal policy ,monetary policy
17.demand supply curve etc...
18.Correlation and regression numerical
19.NNP @ factor cost
20working capital
21. bank guarantee
22.Performance Appraisal
23. Halo effect Tendency..
24.NNP at market price
25.In correct characteristics in Business cycle
26 Notional income also known as..
27.Least squre method used in..
28.Fctoring of services the factor
29.Lender to sensitising test and scenerion analysis..Type of loans
30. Debt to equity of enter prises raatio is.05 its...
31.Bank Gaurantee to commoidity brokarage (margin %)..
32.find P(x bar >/85) ?
33Std error of the mean is????
34 Estimate of the population proportion is..
35 Commericial paper issued multiples of..
36.Commericial paper issued maximum period
37.Find P(88|
39.HRM
40.monetary policy
41.Annuity due prblems
42. Future Value problem
43.Estimation
44.Bond price
45.Revenue dediciat problem
46.Job evealution Job specfication case study
47. Turn over methodeapplied on leass than 5 cr
48. Factor of Supply schedule
49.Lional econmic statement.
50. GDP calculation
51. GNP at amrket price calculation
52. Sampling Methodes
53.Hallo effect
54 Cov(X,Y)=150 mean X=20 mean Y=10 standard deviation x=25 then equation of regression line is
55. 3 questions from HRM 5 marks each



Today CAIIB BFM Recollected questions by Srinivas Kante June 10 , 2018



1.Most of the questions from foreign exchange numericals

2. case study on DGAP, Leverage ratio

3. case study on LC

4. Risk weight on Housing loan

5.Diffence between basis risk, gap risk, and yield curve risk

6. Letter of credit related

7.Capital charge for PR questions

8.Problems on NII

9.YIELD On T BILL

10 .Tier 1 CRAR

11.Call risk

12.NRE ,NRO, FCNR account related

13 Beta factor and basic indicator approach

14.The main object of the LRM loan review mechanism

15.The notional transit period permitted ..

16. One case study on asset liability management

17. Exchange fluctuation risk of ecgc

18. Rupee account... nostro,vostro,loro,mirror are in option

19. case study on TT buying, selling

20. RAROC,Who decide maximum limit of risk

21.Corporate debt instrument characteristics

22.Basel 3 bank apply – for computing capital requirement from existing risk..

23.residual risk also known as..

24.Elements of common equity Tier 1 cap

25.In repo transaction in G-sec , the settlement carried in first leg is ------------ basis

26. BASEL 3 going concern capital is

27.Liqidity risk is a type of time risk??

28.GOI not issue T bill with ------------maturity days

29.Notice money market period is…

30Duration is the elasticity of the bond

31.In CP Buy bank offer may not be made before ----days

32.Features of hedging , Int, Arbitrage ,trading , Investment

33.Nostro Accounts are – accounts

34.Emp option risk about pre closure

35. Feature of CCB BASEL 3

36.FX clear is a forex dealing sym developed by

37.Features of CRR

38.Calculation of LCR under level1 Asset

39.Cross rate

40.Charactristics of foreign exchange market

41.Temporary Asset--- revaltion not present

42.Calculation of capital for General market risk

43.In stock of HQLA for the purpose of cap liquidity coverage ratio…

44. BCBS introduced new approach called..

45.Instrument having lower demand and trading…

46 In india short position allowd..

47.Features of LCR

48.Rapid Growth period bank can make…

49. RAROC,Who decide maximum limit of risk

50. case study on TT buying

51. what does CRR impact

52. no.of key priniciples in Supervising review process

53. Features of CCB in BASEL 3

54..5 marks case study from CALL and PUT option

55.Rupee account Vostro or Mirror?

56. Calculate price for a 270day CP having face value 100/- when yield is 7.57%?

a. 94.6970,a. 94.6770, c. 94.6570, d. 94.6370

57. Calculate yield on a 182 day T bill issued at 97.30/-?

a. 7.57,b. 7.75, c. 5.57, d. 5.75%

58.no.of key priniciples in Supervising review process

59. Features of CCB in BASEL 3

60. 1.yield in tBill

61.rwa

62. Case study o. Nii and nim

63. Case study on rwa and capital charge

64.case study on leverage ratio

65. Case study on lc , advising bank confirming bank etc

66 case study on foreign exchange

67. yield to maturity 02 questions asked

68.call money Nd term money

69. Approach basic indicator approach , advance approach

70. M duration

71. piller 3 ,spr

72. 5 marks case study from CALL and PUT option

73. NII - 5marks

74.CRAR - 5marks

75.FEDAI - 5marks

76.Exchnge rates- 5marks

(USD to INR)

77.Exchange rates - 5marks

(USD - Jap yen - GBpound)

78. Lc - 5 marks

79 DGAP nd Levarage ratio - 5marks

80.5 questions on USD JPY against foreign person returning to India 





CAIIB Retail Recollected 2018 June ::

Recalled questions



Bbps

Case study on hl income tax claim

Fv n pv

Fsi

NFS details

Credit card

Free charge

Emi Calculation, Rule 72, Questions on CIBIL, SLM and WDV

 housing loan cs education loan cs bbps cs ekyc depriciation cs question on time value of money and also more and more question on theory part



 Case study on

BBPS

HL income tax

CKYC

Depriciation

Case study on

Bcsbi 5 que

 Imps,UPI, *99#,mmid

[Credit card 5 que

 Sarfasi,, lokadalak, drt 5 que

Car loan new oold car 5; questions

Housing loan tax benefits 5 que

 Slm , wdv depreciation 3 que

Fund transfer mobile banking maximum per transaction and max per month per beneficiary

[Sub prime loan

[Bank charges under charge against future receivable cersai form 1 or 2 or not applicable

 Mortgage act

[ RTGS and neft

 Method of valuation of land and buildings which is to be attached as security for bank

 Product development stages

Rule 72 compounded annually doubles in 7 yrs and 6 months option 9 .6,10, 9.3,9



 Demat account can be opened in banks or DPS or brokers

If a bank issue card to customer and 10 lakh insurance cover what type of card bank issue rupay, visa, master, mastro

 If credit card a person purchases for 12000 at 37.20 annually. Per month interest. Per day ,, if he pays within time limit what is the interest charged



How can a bank protect themselves if he is relieving information about the customer

Ombudsman settlement



Kyc aml



Dispute between banks and reconstruction company securitization


[Back loading emi

 If a person wants to invest in a 10 yrs pention plan plan name?? Pmjsy, pmvvy, Jay,jsy

[Machinery value 1200 lakhs salvage value 300. End of 6 yrs under wdv method 15%

When salvage value become zero



Dep under straight line method

Cumulative depreciation value of 3rd 4th year under wdv





CAIIB HRM Recollected questions


Organic structure organization definition


Definitions for norming and performing (stages of group development)


Questions on six leadership styles (5 questions asked)


Definition of process diagnosis(in bpr implementation)


Identify best practices in change management


Key factors for successful implementatition of change within organization


Chief insecurity of most staff is change itself


Identify steps to successful change propsed by John p kotter


Responsibility charting is foundation for strong delegation


Forecasting activities in human resource planning include


What are two types of knowledge


In RAKID R stands for


Commonly used knowledge management tools are online discussion forums, online conferencing, communities of practice


Employees and managers can be classified in 4 categories. Identify-activist, reflector, theorist and pragmatist


Characteristics of training new generation - it should be short, entertaining, allows freedom


Problem on ROI


Definition of ROI


Types of motivation


Definition of motivation


Lowest need in need hierarchy theory


Which of the following is not hygiene factor-recognition


Goal efficiency is effected by- proximity, difficulty and specificity


According to Steven reiss motivation theory, how many basic desires? 16


Status is defined as need for social standing and importance


Human resource implications


Augmented learning-learning where learners interact with e learning environment


What are 3 domains of learning - cognitive. Psychomotor and affective


Psychomotor involves what characteristics


Principles of learning - readiness, exercise. Intensity and recency


One question on perception


Adult learning feature identify the wrong one


Definition of functional comptency


External factor effecting demand forecasting


One of the following is not advantage of external recruitment


Question on body language


What are the legislation on working conditions. Identify wrong act


Registering trade union gives then legal status


One of the following is not a social security act






BFM Recollected questions::





Daily votality is 5% 2.5 Find modified duration - Ans is 2.38

STRIPS (Separate Trading of Registered Interest and Principal Securities) is a ...... zero-coupon securities

Which is not a derivative product ? - Repo (Swap, Option, Forward, Repo)

ECB limit - USD 500 mn up to minimum period of 5 years and USD 20 mn up to minimum period of 3 years without prior approval of RBI

ECB is denominated in which currencies.....USD, Euro or JPY

Consessive rate of interest on postshipment rupee export credit to gold card status holder can be extended maximum - 365 days

One importer want import one machine from China.He has to open lc. The exporter wants advance payment. What type lc - red clause

Value at risk is a measure of? Gap risks in foreign exchange operations

Which office not under treasury ? Options given r Mid office, back office, front office, legal office*,

Under standard assets, provision for loss, RSV should be?? Ans - less than 10%

If interest of principle is not serviced for 90 days, what is the position of account? ans- outof order

Basel 3 teir 1 components. (Plz remember that Revaluation reserve is also now under Teir 1)

If treasury assets r withdrawn before maturity, what type of risk is it? ,

A 91 Day T bill of 93.21 wl have yield of?

If 91 days treasury is 88., then its implied yield is?

ICAAP is related to?

ADR related question

Double forward is called what ?

Related to Nro account

Nro account can be opened as sb,CA,FD type

Derivatives also lot of questions

Advising bank roles ... Like what he can do what can't

INCOTERM

IRS

Swap

Risk weightage

Lot of RWAs questions

Which is not included in calculation of NDTL/DTL for CRR/SLR

Component of tier 1

Rwa as per Basel III for housing loan based on LTV

Many questions sellect correct or incorrect about NRO NRE FCNR ECB EEFC CCIL

Estimated occurence of probability

Questions on currency derivatives, forwards, swaps

Forex market characteristics

One question related to embedded option risk

As per basic indicator approach calculation of capital charge 15% of average gross income over there years given but one of the year is having negative one that we have to ignore.

8.83GS2023price100.49 with yield 8.75 .....just it is given and based on this statement he asked for 5marks

Crystallization period for export

One question on American and europian option

Capital charge on operational risk based on standardized approach and basic indicator approach

Questions on ADR AND GDR

Questions on option and forward contact, future

Loan To Value Ratio

Risk Weight %

Swap Defination , ADR and INCOTERMS



RWA calculation for operational risk under Standardized approach

DGAP

Conceptual question on FCNR, RFC, NRO, NRE

Operational risk calculation all approaches

Modified duration

Tier 1 n tier 2 numerical

LC based case studies for 5 marks

Basic inducater appoach market risk 5 number

Modified duration of equity5 ques

Calculations of capital adequacy ratio quite a few questions

10 questions at from various risks associated with Treasury operations

Interest rate swap 5 questions

Bill buying 5 questions

EXCHANGE RATE

AAA A BB Rating Chart Questions for Risk Weighted Calculations

Yield Calculation

W RSA,RSL NUMERICAL

RATED BOND NUMERICAL

Yeild of bond numerical

BASIC INDICATOR APPROACH NUMERICAL

BPV

Forex t.bill

Leverage

Forward contact

CRAR

Operational risk

Treasury theoritical

60question theory easy

No ques from volatility and bpv

Call risk problems

packing credit problems

Rsl. Rsa.. Md problems

Leveage ratio related case study

BASEL III Tier 1 Tier 2 capital Minimum equity ratio related

BFM Book page no 415 ICCAP related question

BFM Book page no 443 stock approach related 05 question

BFM Book page no 477 - RSL/RSA/DGAP/Modified Duration Gaps

BFM Book page no 20 - Export Bill 5 marks

BFM Book page no 295 - Estimated level of Operational Risk



Case study numerical-TEIR 1 TEIR 2 CAPITAL CONVERSION BUFFER QUESTION BASEL ON BASEL3

Case study on RFC account 5 marks

Case study on forex exchange buying commission etc 5marks

Case study on mkdified duration gap 5marks

VAR - 1 QUESTION

TEIR 1 COMPONENT-2 QUESTION

CBLO- 1 QUESTIOn



Case Studies on

1. Cancellation of contract

2. NRE/NRO POA

3. RWA

4. MEAN & SD

5. SLR

6. YTM

7. SHORT LERM & LONG TERM GAP ASSET VS Liabilities

8. NII & NIM

9. Tier1, Tier2

10. Capital adequecy

11. Nostro Vostro Loro

12. Daily volatilty

13. Stop loss limit

14. Operational risk case study

15. Foreign exchange numericals

16. Swap numericals

17. Liquidity case study

18. Forward rate agreement 25 crore 3 month swap, three year three business line calculate yield and risk weightage

19. Calculate CET Basel 3

20. Calculate Aadditional tier 1

...........................................

2 to 3 question duration

5 question export bill(cancellation of contract rate, margin amount,rebook rate,etc)

5 question on capital adequacy (balance sheet provided, compute equity capital, tier 1 capital, total rw, capital adequacy, buffer capital)

5 question on nostro,loro vostro

5 question on FRA

5 question on net interest margin

2-3 question on bonds

3-4 question on LC

some 2-3 sums on bpv

...........................................

1. Rate qoute 1 ques

2.LC partial delivery UCPDC rule

3.FRA 6*9 dates of delivery and maturity

4.case study on rules and guidelines regarding NRE, NRO and FCNR accounts- amt of loan,POA,remittance,fund transfer limit etc

5.coupon swaps,forward contracts

6.securitization-SPV or Commercial bank allocation of assets

7.Case study on NII,NIM,EER

8.Case study on Cash flows,deviation during years,SD/mean

9.ECGC insurance premium bear by?

10.CHIPS-USA

11.treasury risk management 4-5 ques

12.European put option

13.Authorises person categ 2

14. ques on BOP expansion

15.bank margin calculation from rates

16.Stop loss given- asked whether buy or sell at what rate to book profit or stop loss

17.monthly volatility given-calculate daily volatility

18.modified duration calculation

19.case study on Nostro Vostro and Loro and Mirror accounts

20.which is not an off balance sheet item of following

21.crystallisation of sight bills 30 days

22.LC date expired due to bank closed due to hurricane UCPDC rule

23.standard ECGC policy cover-political risk

24.basel III - tier 2 capital req of total risk wtd assets, pillar 3 def

25.standardised approach and basic indicator approach and AMA all methods for operational risk calcualtion

24. volatility can also be measured by?

25.price volatility depends on yield volatility,BPV,Yield and price

26.VaR related 2 ques theoretical

27.derivatives hedge underlying risks

28.call risk

29.Maturity ladder or baskets case study

30.provision coverage ratio def

31.asset liability mismatch


32. Bond ytm,current yield 2-3 ques



CAIIB RETAIL BANKING PREVIOUS YEARS RECOLLECTED QUESTIONS BY Srinivas Kante


1. Sukanya samridhi yojana

2. Atal pension yojana

3. Basic saving ac - 1 qtn

4. Customer relationship management

5. Full form of CIA

6. one on IMPS

7. future value 2 qtn

8. BCSBI 7 qtn

9. Education loan 5 qtn

10. Who give subsidy on mudra loans?

11. One question on rule 72?

12. Ordinary annuity one question?

13. Product stage

14. Mobile banking limits?

15. Safety esteem self actualization

16. Reliability responsiveness

17. ROC pulling

18. Max limit for prepaid instruments, expiry of prepaid instruments

19. Mudra loan - It is 50000 to 10 lakhs

20. 80c rebate? - Rs. 1.5 lakhs

21. Withdrawal allowed in ATM's?

22. CERSAI is formed under which act?

23. Many questions from retail banking services

24. Reverse mortgage

25. Para banking

26. 80C limit

27. PM fosol bima yojona

28. CTR

29. CERSAI - which act

30. PMSBY - claim amout after losing one eye or one leg or hand

31. PMEGP - implemented through

32. POS

33. EWS_size

34. RML

35. CRM gap-iii between

36. Merchant banking means

37. Closed ended fund

38. APY

39. Advantage and disadvantage of retail banking

40. Limit of cash withdrawn from other bank ATM. Option 5000, 100000, 20000, 2500

How many neft settlements in a day?

Tax benefit in Home loan

Credit card cycle

NEFT/RTGS max n min limit

Basic diff.b/w rtgs n neft

Benefit of pvt. Banking

Wealth mgmt for corporates

Education loan repayment/defaults

EMI

Income tax

Rule 72

Essence of crm

Bharat bill paymnt systm

Priority of charge in mortgage

Brown label atm

Purpose of securitisation

Conditions for pension fund mgmt

Mutual fund conditions for bank

Approval for insurance

Propagate model

7Ps

ATM transactions in metro cities

SARFAESI

DRT

Internet banking

Mobile banking

Internet Banking- strategy adaptation

Depreciation by both methods

Capital gain

Annuity

FSI Calculations

Full form of CDO

Product meaning??

Airline company used which model..SBU..INTEGRATED MODEL???

RUPAY card is issued by NPCI

Case study related to Internet banking 5 questions

Case study related to credit card charges and other

Register mortgage date and deposit of title deed

Implementation model related

WRBR.. Full form??

Date of execution of documents.. 4 months

Augmented product...

Expected product...

Under NEFT, number of settlement on week days are..12

RTGS minimum and maximum amout...

Disadvantages of Retail banking...

Mobile banking maximum amout per txn and monthly threshold related 5 questions

IFSC CODE TOTAL ALPHA..and numerics

SFMS

Question on hni, super hni, ultra hni category..

Wether the cibil report can be given to customer after levying some charge or not..

Whether moratorium is given for second hand car...

Moslow theory : Case study on needs

RTGS : when processing

Education loan : case study about margin

On college fee hostel fee computer fee other expenses..

WDV : Case Study on Depreciation l

Credit Card : Case study on interest , risk , overdue amount....

Valuation of urban land ,agriculture land Method criteria etc.....

NEFT : 12 batches

Super affluent : 50-400 Lakhs

Case study on wdv method

Three questions on rent capitalization method

Case study on maslow hierarchy

Case study on tangibles..assurance..responsivess wale 5 factors

Emi calculation 2 questions

Theory was easy

Sbu 1 question

Horizontally organized model

credit card bill (case study 5 qus.)

Three questions on rent capitalization method

Neft batches - 12 batches

depreciation numerical...

case study on gift card...

Fullform of USP - Unique Selling Proposition

case study on education loan for abroad...

1. 2 Case studies on priority charge on mortgage

2. Problem on depreciation(By WDV)... eg. Wht will be the book value after 3 years?

3. Calculating future value

4. Diff between NEFT and RTGS

5. Questions on DSA

6. Case study on tax exemptions ( both interest and principal repayment)?

7. Prob on Depriciation by straight through method?

8. What does securitisation means?

9. Risk involved with DSA?

10. Questions on Potential product PROPAGATE?

11. EMI Calculation

12. Questions on vertical, horizantal model

13. How Many NEFT settlement on weekdays and saturday

14. How many characters in UTR?

15. Question on WRBR

16. Case study on education loan... all the fig are given ( eg. Hostel fee, tution fee,

other expenses and bank margin).... we have to calculate max permissible bank loan

17. One critical case study on credit card... credit card limt, free int period, int rate, over

limit penalty, due date and purchase date are given... We have to calculate int chraged

a. if the customer pays the amt due after 18 days from due date

b. If he pays half amt before due date then calculate int charged for remaining amt on a

particular date?

C. If the amt cro sses the limit then calculate the amt he has to pay

18. If we allow overdraft in CC a/c and the customer does not repay it, then can we

approach DRT ? There are four options and we have to choose the correct one

How many neft settlements in a day?

Tax benefit in Home loan

Credit card cycle

NEFT/RTGS max n min limit

Basic diff.b/w rtgs n neft

Benefit of pvt. Banking

Wealth mgmt for corporates

Education loan repayment/defaults

EMI

Income tax

Rule 72

Essence of crm

Bharat bill paymnt systm

Priority of charge in mortgage

Brown label atm

Purpose of securitisation

Conditions for pension fund mgmt

Mutual fund conditions for bank

Approval for insurance

Propagate model

7Ps

ATM transactions in metro cities

SARFAESI

DRT

Internet banking

Mobile banking


1. Case study on Prepaid instrument

2. Case study on Depreciation WDV and SLM methods

3. Case study on Bharat Bill Payment System

4. Case study on CERSAI

5. Case study on ekyc

6. Case study on car loan?

7. Case study on 'housing loan for all' by newly launched scheme

8. Case study on Vehicle loan

9. Case study on Credit card billing

10. Case study on Education loan problem

11. Case study on Future value of ordinary annuity

12. Case study on BCSBI - 10 questions (theory based)

13. Case study on Future value of bond/annuity

14. Case study on Maslow Needs

15. Case study on CRM

16. Case study on EMI

17. Case study on Capital gain

18. Case study on Calculate Present value

19. Case study on RML


Question on hni, super hni, ultra hni category..

Wether the cibil report can be given to customer after levying some charge or not..

Whether moratorium is given for second hand car...

Moslow theory : Case study on needs

RTGS : when processing

Education loan : case study about margin

On college fee hostel fee computer fee other expenses..

WDV : Case Study on Depreciation l

Credit Card : Case study on interest , risk , overdue amount....

Valuation of urban land ,agriculture land Method criteria etc.....

NEFT : 12 batches

Super affluent : 50-400 Lakhs

Case study on wdv method

Three questions on rent capitalization method

Case study on maslow hierarchy

Case study on tangibles..assurance..responsivess wale 5 factors

Emi calculation 2 questions

Theory was easy

Sbu 1 question

Horizontally organized model

credit card bill (case study 5 qus.)

Three questions on rent capitalization method

Neft batches - 12 batches

depreciation numerical...

case study on gift card...

Fullform of USP - Unique Selling Proposition

case study on education loan for abroad...

Numericals from book about

Encumberence ratio

Tax saving on HL

Case studies under IBA education loan

Calculation of PV FV

Case study on reliability, tangibility, assurance (customer expectations)

Masala bond

Prepaid instrument

MSME act

Full form of USP

Who heads DRAT?

Sum on WDV and SLM

................................. ......

Case study on UPI

AEPS

REVERSE MORTGAGE FOR SENIOR CITIZENS[RLEAC]

problems on straight line

WDV method

Educational loan on foreign study

5q on empathy,responsiveness,assurance

2q on augmented, core product

Reverse mortgage equity linked case study

FSI construction cost based

UPI based

80c/24(b) ICT act 1961 based

Priority sector in different sector with perc of ANBC

PROGATE full form

BBPS component

fraud in operation risk

straight line method

written down value method

encumbrance value

Home loan

Service quality based case study

PPI based case study

Total compound interest applicable

EMI

Present value and future value

Full form of MMID ?

UPI transaction max limit ?

Mobile banking per day and per month limit?

Housing loan % of priority sector?



Margin for RML (Reverse Mortgage Loan) with annuity ?

Emotional intelligence

Emotional intelligence

As per Daniel Goleman link between IQ test scores and the achievements in life is dwarfed (dusted) by the

totality of other characteristics that one brings to life. These characteristics are called emotional intelligence

(i.e. abilities such as being able to -motivate oneself and persist in the face of frustration, to control the impulse

and dealy gratification, to regulate one's moods and keep away distress from swamping the ability to think.

There are five components of emotional intelligence:

Self awareness: ability to recognize, understand, emotions and their effect on others.

Self regulation:ability to control disruptive impulse, to think before acting.

Motivation:Passion to work for reasons that go beyond money or status.

Empathy: Ability to understand emotions of others and treat people according to their

emotional reactions.

Social skills:Proficiency in managing relationships and building networks and ability to fund

common ground and build rapport.

Theories of motivation very important for CAIIB ABM exam

Theories of motivation very important for CAIIB ABM exam



There are various theories of motivation such as:



Scientific management or Rational EconomicView



FW Taylor contributed much to this theory. Theory states that:

-Physical work could be scientifically studied to determine the optimal method of

performing a job.

-Workers can be made efficient by giving prescription.

-Workers would be willing to accept these prescriptions, if paid on a differential piece

work basis.





Human Relations Model





As per Elton Mayo, social contracts at workplace are important in addition to money.

Workers can be motivated by acknowledging their social needs and making them feel

useful and important.



Abraham

Maslow's

Need

Hierarchy Theory

He identified five levels of needs:

1:Physiological needs: Food, rest, exercise, shelter etc.

2:Safety needs: Protection against danger, threat, deprivation.

3:Social needs: Need for belonging, for association, for acceptance, for giving

and receiving friendship and love.

4:Ego/esteem needs: Need For self confidence, for dependence, for achievement,

for knowledge and need for status, recognition, appreciation.

5:Self-fulfillment or self-actualisation needs: To realise one's own potentialities, to

experience continued self-development, to be creative.



Frederick Herzberg's

Two Factor Theory

It states that there are two sets of motivating factors i.e. hygiene or maintenance

factors relating to job environment and other the motivators relating to contents of the

job.

Motivational factors include recognition, advancement, responsibility, achievement,

possibility of growth & work itself.

Maintenance factors include company policy and administration, technical

supervision, salary, job security, personal life, working conditions, status, interpersonal

relations with peers and supervisors.

It is based on existence, relatedness and growth (ERG). People have needs in a

hierarchy and these-needs determine the human behaviour. ERG theory has three

levels of needs compared to 5 in case of Maslow. As per ERG theory, more than oneneed

may be operative at one point of time rather than only one need as per Maslow

theory.





Clayton Alderfer's

ERG Theory



It is based on existence, relatedness and growth (ERG). People have needs in a

hierarchy and these-needs determine the human behaviour. ERG theory has three

levels of needs compared to 5 in case of Maslow. As per ERG theory, more than oneneed

may be operative at one point of time rather than only one need as per Maslow

theory.



Achievement

Motivation Theory



According to DC McCelland, there are three needs i.e. for achievement, for power and

for affiliation.



Victor H Vroom's

Expectancy Model



This theory is known by other names also such as instrumentality theory, path-goal

theory, valence-instrumentality-expectancy theory. As per theory, motivation is

determined by the nature of reward people expect to get as a result of their job. Man

being rational tries to maximize his perceived value of such rewards. There are three

elements in the model i.e. expectancy, instrumentality and valence (value a person

assigns to the desired reward).



James Stacy Adams'

Equity Theory



Theory proposes that motivation to act, develops after the person compares the

inputs / outcomes with the identical ratio in comparison to the other person. Upon

feeling inequity, the person is motivated to reduce it.





Lyman W Porter and

Edward E Lawler—

Performance

satisfaction Model

It states that the motivation does not equal satisfaction and performance. These are

all separate variables. Effort does not lead to performance directly. The reward that

follows will determine the satisfaction.





Reinforcement Theory. The consequences of an individual's behaviour in one situation influences that

individual's behaviour in a similar situation.

FATF recommendations

THE FATF RECOMMENDATIONS:: Total 40

A – AML/CFT POLICIES AND COORDINATION

1 - Assessing risks & applying a risk-based approach *
2 - National cooperation and coordination

B – MONEY LAUNDERING AND CONFISCATION

3 Money laundering offence *
4 Confiscation and provisional measures *

C – TERRORIST FINANCING AND FINANCING OF PROLIFERATION

5 Terrorist financing offence *
6 Targeted financial sanctions related to terrorism & terrorist financing *
7 Targeted financial sanctions related to proliferation *
8 Non-profit organisations *

D – PREVENTIVE MEASURES

9 Financial institution secrecy laws
Customer due diligence and record keeping
10 Customer due diligence *
11 Record keeping
Additional measures for specific customers and activities
12 Politically exposed persons *
13 Correspondent banking *
14 Money or value transfer services *
15 New technologies
16 Wire transfers *

Reliance, Controls and Financial Groups

17 Reliance on third parties *
18 Internal controls and foreign branches and subsidiaries *
19 Higher-risk countries *
Reporting of suspicious transactions
20 Reporting of suspicious transactions *
21 Tipping-off and confidentiality

Designated non-financial Businesses and Professions (DNFBPs)

22 DNFBPs: Customer due diligence *
23 DNFBPs: Other measures *

THE FATF RECOMMENDATIONS
INTERNATIONAL STANDARDS ON COMBATING MONEY LAUNDERING AND THE FINANCING OF TERRORISM & PROLIFERATION
 2012 OECD/FATF 5

E – TRANSPARENCY AND BENEFICIAL OWNERSHIP
OF LEGAL PERSONS AND ARRANGEMENTS

24 Transparency and beneficial ownership of legal persons *
25 Transparency and beneficial ownership of legal arrangements *

F – POWERS AND RESPONSIBILITIES OF COMPETENT AUTHORITIES
AND OTHER INSTITUTIONAL MEASURES
Regulation and Supervision

26 Regulation and supervision of financial institutions *
27 Powers of supervisors
28 Regulation and supervision of DNFBPs
Operational and Law Enforcement
29 Financial intelligence units *
30 Responsibilities of law enforcement and investigative authorities *
31 Powers of law enforcement and investigative authorities
32 Cash couriers *
General Requirements
33 Statistics
34 Guidance and feedback

Sanctions

35 Sanctions

G – INTERNATIONAL COOPERATION

36 International instruments
37 Mutual legal assistance
38 Mutual legal assistance: freezing and confiscation *
39 Extradition
40 Other forms of international cooperation

Current affair s on 28.05.2019

Today's Headlines from www:

*Economic Times*

📝 Google invests $670 million to expand its data centre in Finland

📝 Government likely to introduce electronic invoice system under GST

📝 Airtel submits Rs 644 crore bank guarantee in TDSAT for Tata Tele merger

📝 ArcelorMittal, Resurgent said to mull joint bid for Essar plant

📝 Imports to halve as Coal India increases supplies to power plants

📝 RCom posts a consolidated loss of Rs 7,964 crore

📝 GoDaddy's new solution targets small businesses in India

📝 Digital battle for kiranas to get tough with Jio’s PoS

*Business Standard*

📝 NBFCs show fresh interest in on-tap licences, initiate talks with RBI

📝 RBI may relax norms for shareholders' vote on corporate debt restructuring

📝 Zee Entertainment logs 18.7% rise in revenues in FY19; ad income up 20%

📝 IndiGo Q4 profit up 400% to Rs 590 crore, rules out slowdown fears

📝 New H1B visa norms may affect Indian IT companies' margins in FY20

📝 HAL logs life high turnover of Rs 19,705 cr; PAT at Rs 2,282 cr in FY19

📝 Tech Mahindra bags $100-mn outsourcing contract from Vodafone New Zealand

📝 Anil Ambani to sell BIG FM for Rs 1,050 cr to Jagran's Music Broadcast

📝 10-yr govt bond slips by 7 bps to 7.17% amid FPI flow, fall in oil prices

*Financial Express*

📝 Indian Overseas Bank bets big on ‘bank on wheels’

📝 India Cements Q4 profit rises to Rs 43.85 crore

📝 Avendus fund buys minority stake in Bikaji Foods International

📝 Bitcoin jumps towards $9,000 in best-performing month since 2017

📝 DLF cuts net debt by 34 per cent in Q4 to Rs 4,483 cr

📝 Govt weighing scheme for fast refund of levies to exporters

📝 India Inc revenue growth in Q4 hits six-quarter low of 10.7 per cent

📝 Sistema.bio raises $12 million in Series A round of funding

*Mint*

📝 Singapore startup Trax raising funds at $1.1 billion value

📝 Lenders set two-week deadline to revive Jet Airways

📝 Samunnati raises $55 million from US-based Nuveen

📝 GDP growth in Q4 likely to moderate to 5.9%; may lead RBI to cut rates: Report

📝 Govt proposes WTO-compliant schemes to boost Make in India

📝 Colgate-Palmolive Q4 net sales up 6% to ₹1,146.6 crore

📝 NHPC Q4 net up over two-fold at ₹492 crore

📝 Patnajali expands dairy products to take on Amul and Mother Dairy.