VERY IMPORTANT FOREIGN EXCHANGE MCQs

VERY IMPORTANT FOREIGN EXCHANGE MCQs



1.Our Branches report their foreign currency transactions to __________________

(a) International Banking Department, Mumbai

(b) Treasury, Mumbai

(c) International Banking Division, LHO

(d) RBI

Ans: b

2.The foreign currency account maintained by our Foreign Department with our foreign

ranches/correspondents in different countries is known as __________________

(a) Special account...

(b) Vostro account

(c) Nostro account

(d) FCNR account

Ans: c

3.Transactions having international financial implications are regulated in our country by

(a) External Affairs Ministry, New Delhi

(b) The Foreign Exchange Dept., RBI, Mumbai

(c) Institute of Foreign Trade, New Delhi

(d) International Division, SBI, Bombay

Ans: b

4.All the forex transactions are reported to Treasury through

(a) Special account

(b) Branch Clearing General Account Schedules 3 and 7

(c) Foreign Currency General Account

(d) FCNR account

Ans: c



5.The account maintained by an our Foreign Branches / Correspondents with our domestic branch (in

India) is known as _________________

(a) Loro a/c

(b) Vostro a/c

(c) Special a/c

(d) Nostro a/c

Ans: b

6.Rate applied for a foreign exchange transaction which involves immediate conversion of currency is

known as _________________

.(a) ready rate

(b) forward rate

(c) merchant rate

(d) long rate

Ans: a

7.A quotation in which the home currency unit is the standard unit and the rate is expressed in variable

units of foreign currency is called _________________

(a) direct rate

(b) spot rate

(c) indirect rate

(d) forward rate

Ans: c

8.When conversion/exchange of currencies takes place at some future date at a rate of exchange agreed

upon now, such a transaction is known as

(a) spot transaction

(b) cover transaction

(c) cash transaction

(d) forward transaction

Ans: d




9.The maxim applied in respect of Direct Quotation is

(a) buy low, sell low

(b) buy low, sell high

(c) buy high, sell low

(d) buy high, sell high

Ans: b

10.A rate of exchange established between any two currencies on the basis of the respective quotation of

each currency in terms of a third currency is known as

(a) cross rate

(b) merchant rate

(c) wash rate

(d) composite rate

Ans: a

11.When branches pass forex transactions at provisional rates, the entries are passed by debit to

(a) Forex Clearing gen. a/c

(b) Br. Cl. Gen. a/c 3 and 7

(c) IBIT

(d) None of the above

.Continue....



Ans: c

12.

The rate quoted for issue of Drafts/TTs is _________________

(a) Bill Selling rate

(b) Inter-Office rate

(c) Forward rate

(d) TT Selling rate

Ans: d

13.

The rate applicable for an export bill tendered for negotiation is _________________

(a) bill buying rate

(b) bill selling rate

(c) composite rate

(d) TT buying rate

Ans: a

14.

The rate quoted for inward remittances by TT/DD, where the cover fund has already been credited to

our Nostro a/c is

.

..Notes Page 6

(a) TT buying rate

(b) DD buying rate

(c) Inter-Office rate

(d) Cross rate

Ans: a

15.

How many types of rates are quoted in respect of foreign exchange sales transactions?

(a) 5

(b) 4

(c) 3

(d) 2

Ans: b

16.

How many types of rates are quoted in respect of foreign exchange purchase transactions?

(a) 6

(b) 5

(c) 4

(d) 3

Ans: a

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17.

When foreign currency notes are purchased by branches not designated to retain foreign currencies, the

rate applied while debiting the Designated Branch through Branch Clearing General Account is

____________

(a) TT buying rate

(b) Foreign currency note buying rate

(c) Inter-Office rate

(d) DD buying rate

Ans: c

18.

A swap transaction involves ____.

(a) purchase of currency

(b) sale of currency

(c) purchase of currency against sale or forward sale of the currency.

(d) simultaneous purchase and sale of one currency against another for different settlement dates.

Ans: d

19.

The transactions of the Bank undertaken to sell the surplus and buy the required foreign currencies in

order to keep its position ‘square’ are known as ___.

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..Notes Page 8

(a) cover operations

(b) merchant transactions

(c) exchange transactions

(d)forward transactions

Ans: a

20.

A foreign currency travellers cheque is valid for ____.

(a) 3 months

(b) 6 months

(c) 1 month

(d) no time limit unless otherwise mentioned therein

Ans: d

21.

The rate quoted for clean instruments returned unpaid is

(a) TT selling rate

(b) DD buying rate

(c) Inter-Office rate

(d) TT buying rate

.


Ans: a

22.

A traveller returning from abroad should surrender his unused foreign exchange in excess of USD 2000

to an authorised dealer within:

(a) 90 days of his return to India, if he is holding foreign currency notes, and 180 days if he is holding

travellers cheques

(b) 60 days of his return to India

(c) 30 days of his return to India

(d) None of these

Ans: a

23.

Maximum foreign exchange that can be released by an Authorised Dealer for medical treatment abroad

is

(a) USD 50,000.

(b) USD 1,00,000

(c) as per estimate from the Doctor in India / Hospital / Doctor abroad.

(d) any amount sought by the applicant.

Ans: b,c

24.

All the outward remittances such as DDs/TTs/Debit Authorisations issued by branches on our foreign

offices should be issued under Double Signature System if:-

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..Notes Page 10

(a) The amount of such remittance is greater than USD/GBP 3000 or equivalent of Rs.10000 in other

currencies

(b) The amount of such remittance is of the equivalent of Rs.50,000/- and above.

(c) The amount of such remittance is over the equivalent of Rs.1 lac.

Ans: b

25.

For outward remittance other than imports, the applicant should submit

(a) Form A2 (b) Form A1

(c) Form A4 (d) Form A3

Ans: a

26.

‘R’ returns are submitted to RBI as on every

(a) month

(b) 10th, 20th & 30th

(c) 15th & last working day of the month

(d) every week

Ans: c

27.

How many types of ‘R’ return are required to be submitted at present?

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..Notes Page 11

(a) 5 (b) 6

(c) 7 (d) 2

Ans: d

28.

Name the different types of ‘R’ returns.

(a) Nostro & Vostro (b) Nostro

(c) Vostro (d) Nostro & Vostro, Loro a/c

Ans: a

29.

In documentary credit transactions

(a) all parties deal with documents and not goods

(b) all parties deal in documents and goods as well

(c) buyer and seller deal in goods and banks in documents

(d) all parties deal in goods only

Ans: a

30.

A documentary letter of credit has normally

(a) two parties (b) one party

(c) four parties (d) no one

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..Notes Page 12

Ans: c

31.

The buyer or importer who procures a letter of credit from his banker is called

(a) opener of the credit (b) beneficiary of the credit

(c) negotiator of the credit (d) none of these

Ans: a

32.

The bank through whom the credit is advised and who confirms the letter of credit when required and

negotiates the documents tendered is called

(a) Opening Bank (b) Foreign Bank

(c) Advising Bank (d) None of these

Ans: b

33.

An L/C which can be amended or cancelled by the Issuing Bank at any time prior to its expiry without

notice to the Beneficiary is called a / an

(a) Confirmed L/C (b) Irrevocable L/C

(c) Revolving L/C (d) Revocable L/C

Ans: d

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..Notes Page 13

34.

A L/C that cannot be cancelled or amended without the consent of the parties concerned is known as a /

an

(a) Confirmed L/C (b) Irrevocable L/C

(c) Transferable L/C (d) Back to back L/C

Ans: b

35.

When the Advising Bank, at the request of the issuing Bank, adds its confirmation which would

constitute a definite undertaking by the former the L/C is known as a / an

(a) Irrevocable L/C (b) Transferable L/C

(c) Confirmed L/C (d) Revolving L/C

Ans: c

36.

An irrevocable LC which authorises the advising bank to extend preshipment/packing credit upto a

certain amount to the beneficiary to enable him to meet preshipment expenses is known as a / an

(a) Irrevocable LC (b) Transferable LC

(c) Revolving LC (d) Red Clause LC

Ans: d

37.

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..Notes Page 14

An LC which authorises the Advising Bank, to transfer, at the request of the Beneficiary ( First

Beneficiary) the credit available in whole or in part to one or more other beneficiaries ( Second

Beneficiaries) is known as

(a) Anticipatory LC (b) Revolving LC

(c) Transferable LC (d) Back to back credit

Ans: c

38.

An ancillary LC which arises when the seller(beneficiary) uses the LC opened in his favour to support

another LC opened by the Seller’s Bank, favouring his supplier is called

(a) Transferable LC (b) Back to Back LC

(c) Revolving LC (d) none of these

Ans: b

39.

Non-resident Indian is defined for banking purpose in

(a) FEMA (b) Income Tax Act 1961

(c) Wealth Tax Act 1957 (d) None of the above

Ans: a

40.

Import licenses are valid for shipment

(a) 12 months from the date of issuance of licence

(b) 1 week after the arrival of goods into the country

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..Notes Page 15

(c) upto last day of the month in which they expire

(d) 18 months from the date of arrival of goods.

Ans: c

41.

The face value of an Import Licence should take care of:

(a) Cost of goods only

(b) Cost, Insurance and Freight (i.e) CIF

(c) CIF plus interest

(d) CIF, Interest and Agency Commission, if any.

Ans: d

42.

A customer wants to know the provisions for importing a motor vehicle. Which book should he refer to?

(a) Exchange Control Manual

(b) Codified Foreign Dept. Circulars

(c) Handbook of Import-Export Procedures

(d) Customs Manual

Ans: c

43.

An import licence is valid for

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..Notes Page 16

(a) 12 months from the date of issue

(b) 18 months

(c) upto the validity of import licence and if no period is specified until 31st March of the licensing year.

(d)

no time limit

Ans: b

44.

The exchange control copy of import licence submitted by the importer for opening LC/making

remittance should, after full utilisation, be

(a) forwarded to RBI along with `R’ Return

(b) retained by AD for scrutiny by inspecting officials

(c) handed over to the importer

(d) forwarded to the Trade Control authorities

Ans: b

45.

Importers should retire the demand bills drawn under LC on

(a) the day on which the bill is received at the branch

(b) before the expiry date of license

(c) within 10 days from the date of receipt of the bill.

(d) no specific period

Ans: c

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..Notes Page 17

46.

Usance bills drawn under Import LC should be retired

(a) 10 days from the date of receipt of the bill

(b) on due date

(c) last day of the month in which the licence expires

Ans: b

47.

Recovery of commission and transit period interest, on import bills is required to be done even when

100% cash margin is retained on the LCs. Is this statement true or false?

(a) True (b) False

Ans: a

48.

For making payment towards imports into India, application from importers is obtained on

(a) Form A1 (b) Form A4

(c) Stat 4 (d) R 6

Ans: a

49.

Branches should submit return of overdue import bills

(a) monthly (b) quarterly

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..Notes Page 18

(c)half yearly

(d)fortnightly as on 15th & last working day of each month

Ans: d

50.

GR forms are submitted in respect of

(a) Import transactions (b) FOCNA transactions

(c) Export transactions (d) NRE transactions

Ans: c

51.

Packing credit limits are granted

(a) to cover specifically packing charges incurred for goods meant for export

(b) against LC or firm orders

(c) against duly packed goods stored in warehouse

(d) to an importer in a foreign country in respect of goods exported from India

Ans:b

52.

The Uniform Customs and Practice for Documentary Credits are drawn by

(a) RBI

(b) FEDAI

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..Notes Page 19

(c) International Chamber of Commerce

(d) IBA

(e) GOI

Ans:c

53.

Agencies involved in export finance are controlled by

(a) RBI (b) IDBI

(c) ECGC (d) EXIM Bank

Ans:d

54.

Balance of Trade of a country is :

(a) The difference between the Inward and Outward remittances made in foreign exchange

(b) The surplus generated shown in a Trading Account

(c) The difference between exports and imports

Ans:c

55.

A registered exporter is one who is registered with

(a) Export Trade Control Authorities

(b) Reserve Bank of India

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..Notes Page 20

(c) Export Promotion Council/Commodity Board

(e)Customs authorities

Ans:c

56.

Certificate of Origin is necessarily called for in import transactions

(a) to arrive at the country’s trade figures

(b) to determine method of payment

(c) for Customs to determine the duty payable

(d) None of the above

Ans:b

57.

Remuneration of foreign exchange transaction is credited to

(a) Exchange a/c (b) Interest a/c

(c) Commission a/c (d) Discount a/c

Ans:a

58.

Certificate for Encashment of Foreign Currency Travellers Cheques is issued on

(a) FD 119 (b) FD 125

(c) FD 123 (d) FD 124

.

..Notes Page 21

Ans:c

59.

Minimum maturity period for FCNB deposits is __________________ months

(a) 3 (b) 6

(c) 12 (d) none of the above

Ans:c

60.

Under the revised categorisation of branches, ‘C1’ category branches are authorised to handle

(a) only service related transactions in both foreign currencies and Indian rupees

(b) only service related transactions in Indian rupees

(c) both trade and service related transactions in foreign currencies and Indian rupees through another

designated branch.

(d) all types of transactions

Ans:c

61.

FCNB a/c can be in

(a) all foreign currencies

(b) DM, Japanese Yen

(c)Pound Sterling, US $, & Euro

(d) Pound Sterling, US $, Euro, Yen, Canadian $, Australian $

.

..Notes Page 22

Ans:d

62.

Interest Rates on FCNB Deposit, withdrawn prematurely will be as follows :

(a) At the contracted rate, without levy of penalty

(b) Two percent below the rate applicable to the period the deposit remained with the Bank

(c) One percent below the rate applicable for the period the deposit remained with the Bank.

(d) USD, British Pounds Sterling, Euro, Yen, Canadian Dollar and Australian Dollar

Ans:c

63.

Interest rates on FCNB deposits are subject to change from time to time and is advised by __________

(a) International Banking Group, Corp. Centre, Mumbai

(b) FOCNA Link Office

(c) FD, Kolkata

Ans:a

64.

Form FCNB-1 is used to report the following transactions to FD Kolkata

(a) Payment of the FCNB TDR on maturity

(b) Premature payment of FCNB TDR/STDR

(c) Issuance / Renewal of FCNB TDR/STDR.

.

..Notes Page 23

Ans:c

65.

Form FCNB 2/2A is used for reporting :

(a) Repayment of Principal amount of the FOCNA TDR/STDR

(b) Repayment of Interest only

(c) Repayment of FCNB deposit principal and interest.

Ans:c

66.

In case of loans/overdrafts against FCNB deposit the margin requirement should be calculated on the

rupee equivalent at ___________ rate.

(a) TT selling rate (b) Bill selling rate

(c) Others (d) Notional rate

Ans:d

67.

All accounting entries in respect of transactions in respect of C1 category branch will originate

(a) at Link Office (b) at Linked Branch

(c) at FD, Kolkata (d) at Overseas Branch

Ans:a

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..Notes Page 24

68.

Commission in respect of LC business will be shared between LO & LB at....

(a) 50:50 basis (b) 30:70 basis

(c) 70:30 basis (d) 20:80 basis

Ans:a

69.

Exchange remuneration will be shared between LO & LB at

(a) 70:30 (b) 30:70

(c) 50:50 (d) 20:80

Ans:b

70.

Loans against NRE TDRs can be granted upto Rs. ____ to the NRI depositor.

(a) Rs.25,000 (b) Rs.50000

(c) Rs.1,00,000 (d) Rs. 20 lakhs

Ans:d

71.

The ceiling for repatriation of funds from NRE/FCNR accounts is :

(a) Rs.2 lacs (b) Rs.5 lacs

(c) Rs.10 lacs (d) No ceiling

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..Notes Page 25

Ans:d

72.

An Ordinary Non-Resident Account (NRO) can be opened with:

(a) Proceeds of foreign inward remittance

(b) Conversion of existing resident account

(c) All the above

(d) None of the above.

Ans:c

73.

What are the tax concessions that are available to NRIs?

(a) Wealth tax, Income tax (b) Income tax, Gift Tax

(c) Gift tax, Wealth Tax (d) Wealth tax, Gift tax and Income tax

Ans:d

74.

Interest for the transit period has to be recovered in the case of

(a) all purchases (b) all bills negotiated/purchased

(c) only usance bill purchases (d) only demand bill purchases

Ans:b

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..Notes Page 26

75.

Nomination facility is available for NRO/ FCNB deposits

Yes/No

Ans:a

76.

RBI will sell (spot) only the following currency

(a) Pound Sterling (b) US Dollar

(c) Deutsche Mark (d) Japanese Yen

Ans:b

77.

RBI will buy (spot and forward) the following currency(ies)

(a) Pound Sterling(b) US Dollar

(c) Deutsche Mark (d) Japanese Yen

(e) All the above currencies

Ans:b

78.

Gift can be sent without RBI’s approval upto a ceiling of

(a) $1,000/- (b) $2,000/

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..Notes Page 27

(c) $4,000/- (d) $5,000/ (per remitter / donor per annum)

Ans:d

79.

Under FCNB Deposit scheme who absorbs the exchange risk involved

(a) The bank that accepts such deposits (b) RBI

(c) GOI (d) The Depositor

Ans:a

80.

Monthly interest can be paid on NRE term deposits

True / False

Ans:a

81.

Investment by NRIs in units of UTI should be done only through an Authorised Dealer

Yes / No

Ans:a

82.

Loans/OD granted against FCNR/NRE TDRs/STDRs may be liquidated

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..Notes Page 28

(a) by Indian rupee remittance (b) by Foreign inward remittance

(c) by adjustment against TDR/STDR proceeds

(d) by any method mentioned above

Ans:d

83.

What is an OCB ?

(a) It is a trust (b) It is a foreign company

(c) Overseas Commercial Bank (d) Overseas Corporate Body

Ans:d

84.

How much silver can be brought in by NRI to India ?

(a) 50 Kg (b) 75 Kg

(c) 200 Kg (d) 100 Kg

Ans:d

85.

Persons of Indian Origin but with foreign citizenship are freely permitted to purchase immovable

property in India

True / False

Ans:a

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..Notes Page 29

86.

Commercial Paper issued by an Indian Company in favour of NRIs will be on _______ and _______ basis.

(a) non-repatriable, transferable (b) repatriable, non-transferable

(c) non-repatriable, non-transferable (d) repatriable, transferable

Ans:b

87.

E.E.F.C account is

(a) Exchange Earners Foreign Currency Account

(b) Exchange Entitlement for Civil servants

(c) Export Earnings and Foreign Currency Account

(d) None of the above

Ans:a

88.

Before establishment of letter of credit, in the absence of sale contract, Authorised Dealer can accept

(a) order together with confirmation of overseas suppliers

(b) proforma invoice of supplier, duly counter-signed by the importer

(c) Indent/offer from Overseas supplier

(d) Any one among a, b, c

Ans:d

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..Notes Page 30

89.

Applications for opening letter of credit providing for payment against documents other than shipping

documents

(a) should be referred to RBI for prior approval

(b) should be referred to ITC authorities

(c) can be entertained directly by Authorised Dealers

Ans:a

90.

The negotiating bank, while claiming reimbursement from another bank should certify that the terms

and conditions of the letter of credit have been complied with

True / False

Ans:a

91.

Unless otherwise specified in the credit, Bank can accept as originals, the documents produced by

reprographic systems, computerised systems or as carbon copies, if marked as originals.

True / False

Ans:a

92.

Compounding of interest on FCNB deposit is done

(a) monthly (b) quarterly

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..Notes Page 31

(c) half-yearly (d) yearly

Ans:c

93.

Granting of loans to third parties against NRI deposits by ADs require sanction from

(a) RBI (b) IBA

(c) FEDAI (d) None of these

Ans:d

94.

A foreign citizen of Indian origin who is having NRE STDR for Rs.20.00 lacs with you asks for a loan of

Rs.12.00 lacs against STDR to buy a house

(a)the loan can be granted.

(b)the loan cannot be granted as the loan amount exceeds the limit of Rs.5.00 lacs

(c) prior permission from controllers necessary

(d) none of the above

Ans:a

95.

ADs may grant loans and overdrafts to a foreign national without reference to RBI

(a) without any limit as long as the loan is collaterally secured.

(b) within a ceiling of Rs.5.00 lacs

(c) only to the extent of Rs.1 lac for personal purposes.

.

..Notes Page 32

Ans:c

96.

What is the validity period for a foreign draft?

(a) 3 months (b) 6 months if not mentioned otherwise

(c) 6 months (d) 30 days

Ans:b

97.

An NRI is eligible for wealth tax exemption for _______ years after his/her return to India

(a) 5 years (b) 3 years

(c) 1 year (d) 7 years

Ans:d

98.

How much foreign currency Mr. Ramamoorthy residing in T. Nagar, Chennai can keep with him?

(a) US $ 500 or its equivalent

(b) US$ 1000 or its equivalent

(c) US $ 2000 or its equivalent

(d) US $ 5000 or its equivalent

Ans:c

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..Notes Page 33

99.

Export Credit should reach_____% of the net bank credit.

(a) 5% (b) 10%

(c) 12% (d) 17%

Ans:c

100.

In India, foreign exchange rates are quoted as under :

(a) Direct Quote (b) Indirect Quote

(c) Cross Rate (d) None of the above

Ans:b

101.

Deposits under FCNB scheme can be opened for a maturity period of

a) cannot open

(b) One year only

(c) 1-3 years

(d) 1 – 5 years

Ans:d

102.

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..Notes Page 34

All demand bills in foreign currency drawn under and import LC will be crystalised into Rupee liability on

________th day from the date of receipt of document.

(a) 10 (b) 7

(c) 15 (d) 30

Ans:a

103.

Branches are to recover interest on EBR loans upfront and on PCFC loans at quarterly intervals or on

closure thereof and credit to

(a) Branch Interest A/c.

(b) F.D. Kolkata

(c) Branch Discount A.c.

(d) Exchange Account

Ans:a

104.

Inward Remittance Certificate can be issued only on security paper, if the amount of remittance exceeds

(a) Rs.10,000/- (b) Rs.15,000/-

(c) Rs.25,000/- (d) Rs.50,000/-

Ans:d

105.

Exchange Bureaux, and ADs in airports/seaports may, at their discretion convert unspent Indian

currency of non-resident travellers who are leaving after a visit to India, if for bonafide reasons the

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..Notes Page 35

person is unable to produce Encashment Certificate provided the value of amount to be reconverted

doesn’t exceed Rs. ____________

(a) Rs.1,000/- (b) Rs.5,000/-

(c) Rs.10,000/- and Rs.25,000/-

Ans:a

106.

Periodicity of XOS statement is

(a) Monthly (b) Quarterly

(c) Half yearly (d) Annual

Ans:c

107.

A person bringing in foreign exchange in the form of foreign currency notes and travellers cheques have

to declare in form CDF in the following cases

(a) amount exceeds US $2,000 or its equivalent

(b) amount exceeds US $10,000 or its equivalent

(c) if the amount of foreign currency notes exceeds US $ 5,000 and the amount of foreign currency notes

plus travellers cheque exceeds US $ 10,000/-

(d) Need not declare

Ans:c

108.

Margin that is to be retained on loans granted to the depositor against FCNRB deposits is

.

..Notes Page 36

(a) 10% (b) 15%

(c) 25% (d) No margin

Ans:a

109.

Margin that is to be retained on loans to third parties against FCNB deposits is

(a) 15% (b) 10%

(c) 25% (d) No margin

Ans:c

110.

Standard Transaction Reference Number (STRN) on export bill covering schedules consists of _______

digits

(a) 8 (b) 10

(c) 12 (d) 16

Ans:d

111.

Under FCNB scheme, Fixed Notional Rate (FNR) for the US $ for the purpose of accounting in branch

books is

(a) Rs.40/- (b) Rs.44/-

(c) Rs.45/- (d) Prevailing TT buying rate

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..Notes Page 37

Ans:b

112.

How much gold can be brought in by NRIs

(a) 5 kg (b) 20 kg

(c) 10 kg (d) 30 kg

Ans:c

113.

NRIs are permitted to invest on non-repatriation basis with the prior permission of RBI/SEBI in Money

Market Mutual Funds (MMMFs) floated by

(a) Domestic public/private sector companies

(b) Commercial banks and Public/Private sector, financial institutions

(c) Both by (a) and (b).

(d)Not permitted to invest in MMMFs

Ans:c

114.

Import bills may be received by the banker of the buyer directly from overseas sellers, if the bank is

satisfied and if the value of such import bill does not exceed _______________

(a) Rs.10,000/-

(d)Rs.2 lacs

(c)US $ 10,000/-

(d)US $ 25,000/-

.

..Notes Page 38

Ans:d

115.

Facilities such as PCFC, EEFC, and discounting of bills abroad are available for exporters for transactions

in ACU dollar

Yes / No

Ans:a

116.

Transactions between India and Nepal will be routed through revised ACU mechanism

Yes/No

Ans:b

117.

Request for cash payment against FTC/FCN may be accepted upto the extent of US$ _______________

or its equivalent per transaction at non metro centres

(a) US $ 2,000 (b) US $ 1,000

(c) US $ 500 (d) Only against RBI's approval

Ans:c

118.

Under revised procedure, FCNB transactions should be reported to

.

..Notes Page 39

(a) FOCNALO, Mumbai (b) IB Division, Chennai

(c) Foreign Department, Kolkata (d) International Division, CorporateCentre

Ans:c

119.

BEF (Bill of Entry Form) statement should be submitted to RBI

(a) Fortnightly (b) Monthly

(c) Half yearly (d) Yearly

Ans:c

120.

Export of computer software in non-physical form should be declared in

(a) GR Form (b) PP Form

(c) SOFTEX Form (d) ENC Form

Ans:c

121.

Interest/income earned on investments made by NRIs in India on non-repatriation basis

(a) cannot be repatriated at all

(b) cannot be repatriated in full

(c) only net Interest/income (after tax) can be repatriated

(d) Can be repatriated after a lock in period of 5 years

.

..Notes Page 40

Ans:c

122.

ADs may allow advance remittance for import of goods upto a ceiling of

(a) US $ 5,000 (b) US $ 10,000 (c) US $ 20,000

(d) If advance remittance exceeds US @ 100000 an unconditional irrevocable standby letter of credit or

guarantee from an International Bank

Ans:d

123.

What is the rate of customs duty payable by NRI on gold brought in by them

(a) Rs.250 per 10gm (b) Rs.1000 per 10gm

(c) Rs.500 per 10gm (d) None

Ans:a

124.

What is the approved method of sending remittance into India

(a) Through normal banking channel (b) Through foreign banks

(c) Through authorised money changers

Ans:a

125.

.

..Notes Page 41

Requests for cash payments against Foreign Currency Travellers Cheques and Foreign Currency Notes

may be accepted up to the extent of USD _______________ or its equivalent per transaction in the

Metro centres

(a) 10000 (b) 5000

(c) 1000 (d) 500

Ans:c

126.

Forex transactions are reported to Treasury, Mumbai through _________________

(a) FOREX 3 (b) DATANET

(c) ELENOR (d) SWIFT

Ans:c

127.

We offer Resident Foreign Currency Account (RFC) in ________designated currency (ies)

(a) 4 (b) 3

(c) 2 (d) 1

Ans:d

128.

Maximum quantum of Foreign exchange that can be released to Residents for business visits abroad

(a) $25000/- (b) $15000/-

(c) $5000/- (d) $1000/-

.

..Notes Page 42

Ans:a

129.

On return from abroad, a traveller should surrender his unspent travellers’ cheques, within ________

days from date of return

(a) 90 (b) 180

(c) 30 (d) 60

Ans:b

130.

International Gateway for SWIFT is situated in

(a) London (b) Frankfurt

(c) Brussels (d) New York

Ans:c

131.

A transferable letter of credit can be transferred

(a) Twice (b) Once

(c) any number of times (d) five times

Ans:b

132.

.

..Notes Page 43

Export usance bills should be crystallised on ____________ day from due date

(a) 15th (b) 30th

(c) 45th (d) 60th

Ans:b

133.

Rate to be applied when an export bill is cyrstallised

(a) Bill buying

(b) Bill selling

(c) TT buying

(d) TT selling

Ans:d

134.

Rate to be applied when a crystallised export bill is realised

(a) Bill buying

(b) TT buying

(c) Bill selling

(d) Bill selling

Ans:b

135.

.

..Notes Page 44

Normal Transit Period allowed for export sight bills

(a) 20 days

(b) 25 days

(c) 30 days

(d) 35 days.

Ans:b

136.

Import / Export Trade in India is regulated by

(a) RBI (b) EXIM Bank

(c) DGFT (d) ECGC

Ans:c

137.

FEMA 1999 came into force with effect from

(a) 01 Jan 1999

(b) 01 June 1999

(c) 01 June 2000

(d) 01 June 2001

Ans:c

138.

.

..Notes Page 45

What is the periodicity of submitting `R’ Returns?

(a) Weekly

(b) Fortnightly

(c) Monthly

(d) Quarterly

Ans:b

139.

Which of the following is correct about transactions above Rs.2.5 lacs but lessthan Rs.5 lacs?

a) upto 5 paise improvement over Card Rate allowed

b) To be reported to FD for online rate

c) Only Card Rate - No improvement

d) Competitive (Fine/Very Fine) Rate to be quoted liberally

Ans:a

140.

Which of the following documents evidences import of goods into India?

a) Bill of Entry form b) Commercial invoice

c) Bill of Lading d) Courier Receipt

Ans:a

141.

.

..Notes Page 46

An importer should furnish to the AD document evidencing import within

a) 6 months from the date of remittance

b) 3 months from the date of shipment

c) 3 months from the date of remittance

d) No period restriction.

Ans:c

142.

A customer of your branch requests for release of foreign exchange for travel to Kathmandu, Nepal,.

How much will you release?

a) USD 500

b) USD 1000

c) USD 5000

c) USD 10000

e) NIL

Ans:e

143.

An NRI sells gold brought by him to residents against rupees. What can he do with the rupee proceeds?

a) can be freely repatriated

b) can be credited to his NRE a/c

c) FCNB can be opened by converting the proceeds to USD

d)can be credited to his NRO account only

.

..Notes Page 47

Ans:d

144.

Documents pertaining to exports are to be submitted to A.D within ___ days from the date of export.

a) 7

b) 10

c) 15

d) 21

Ans:d

145.

The duplicate copy of GR/PP/SDF Forms is returned to the exporter under the following circumstances.

a) Bill sent on collection returned unpaid

b) Crystallized FCSB/BE is paid by the exporter from his local resources

c) When the unrealized export bill is written off

d) Should not be returned to exporter except for rectification of errors and resubmission.

Ans:d

146.

Who is authorized to write off unrealized export bills?

a) RBI

b) ECGC

c) EXIM Bank

.

..Notes Page 48

d) Authorized Dealer subject to

certain conditions.

Ans:d

147.

Authorised Dealer may normally allow advance remittance for import of goods without guarantee from

an international bank of repute upto

a) USD 5000

b) USD 10000

c) USD 25000

d) USD 100000

Ans:d

148.

What is the normal period within which physical import of goods into India should be made when

advance payment is effected?

Ans:Within 6 months from the date of remittance (36 months for capital goods).

149.

Despatch of encashed foreign currency notes through post, (viz. Registered Insured Post) should be

restricted to

a) Rupee value of foreign currency notes per packet not to exceed Rs.25 lacs

b) Rupee value of foreign currency notes per packet not to exceed Rs.1 lac

c) Rupee value of foreign currency notes per packet not to exceed Rs.10000

.

..Notes Page 49

d)No restriction.

Ans:c

150.

________ has introduced Uniform Customs and Practices for Documentary Credits (UCPDC)

a) RBI

b) FEDAI

c) Government of India

d) International Chamber of Commerce, Paris.

Ans:d

151.

INCOTERMS refer to

a) Incorporated Terms

b) International Commercial Terms

c) Indian Commercial Terms

d) None of the above.

Ans:b

152.

As per RBI guidelines, banks are to provide export finance to the extent of

a) 10% of net bank credit b) 12% of net bank credit

.

..Notes Page 50

c) 18% of net bank credit d) No stipulation.

Ans:b

153.

Documents evidencing import into India received by an Authorised dealer

a) should be sent to RBI along with “R” return

b) should be sent to RBI along with “BEF” return

c) to be returned to importer for submission to Customs Authorities

d) should be preserved by A.D for a period of 1 year from the date of it’s verification by internal

Inspectors/Auditors

Ans:d

154.

Importer –Exporter code number is allotted by

a) RBI

b) DGFT

c) EXIM BANK

d) ECGC

e) NONE OF THE ABOVE

Ans:b

155.

A returning non-resident Indian

.

..Notes Page 51

a) can continue to hold his foreign currency assets abroad

b) can hold a Resident Foreign Currency a/c to keep his foreign currency assets

c) both a) & b)

e)None of the above. Such assets should be converted into Indian Rupees.

Ans:c

156.

In regard to balances in NRE/FCNB accounts of Returning Non-Resident Indians,

a) ADs would redesignate such accounts as resident accounts immediately on their return to India but

continue to pay the interest at the rate originally fixed for the full term.

b) eligible persons can transfer the balance to RFC a/c without penalty for premature payment

c) Has to be closed before maturity and converted into Indian rupees

d) a) & b)

Ans:d

157.

An Indian citizen going abroad on a private visit to countries other than Nepal & Bhutan is eligible for

foreign exchange

a)Upto USD 5000 in any calendar year

b)Upto USD 10000 in any calendar year

c)Upto USD 25000 in any calendar year

d)Upto USD 30000 in any calendar year

Ans:b

.

..Notes Page 52

158.

An Indian citizen going abroad on a private visit to Nepal & Bhutan is eligible for foreign exchange

a)Upto USD 5000 in any calendar year

b)Upto USD 10000 in any calendar year

c)Upto USD 25000 in any calendar year

d)No foreign exchange

Ans:d

159.

An Indian citizen going abroad for higher studies is eligible for foreign exchange

a) Upto USD 5000 or upto the estimate of the institution abroad, whichever is higher.

b) Upto USD 10000 or upto the estimate of the institution abroad, whichever is higher.

c) Upto USD 25000 or upto the estimate of the institution abroad, whichever is higher.

d) Upto USD 100000 or upto the estimate of the institution abroad,

whichever is higher.

Ans:d

160.

An Indian citizen going abroad for employment is eligible for foreign exchange

a) Upto USD 100000 on production of letter of employment

b) Upto USD 100000 on self declaration basis

c) Upto USD 25000 on production of letter of employment

.

..Notes Page 53

d) No foreign exchange

Ans:b

161.

An Indian citizen going abroad on emigration is eligible for foreign exchange

a) Upto USD 100000 or amount prescribed by the country of immigration on the basis of visa

b) Upto USD 100,000 on self declaration basis

c) Upto USD 25000 or amount prescribed by the country of immigration on the basis of visa

d) No foreign exchange.

Ans:b

162.

An Indian citizen going abroad for medical treatment is eligible for foreign exchange

a) Upto USD 10000 on self declaration basis and in excess thereof as per the estimate from a doctor or

hospital in India or overseas

b) Upto USD 20000 and in excess thereof as per the estimate from a doctor or hospital in India or

overseas

c) Upto USD 30000 and in excess thereof as per the estimate from a doctor or hospital in India or

overseas

d) Upto USD 100000 and in excess thereof as per the estimate from a doctor or hospital in India or

overseas.

Ans:d

163.

.

..Notes Page 54

An Indian citizen is eligible for foreign exchange for miscellaneous purpose without production of any

document upto

a) USD 500 b) USD 1000

c) USD 2000 d) USD 5000

Ans:a

164.

An Indian citizen is eligible for foreign exchange for gift / donation per annum upto

a) USD 10000 per remitter / donor b) USD 5000 per remitter / donor

c) USD 25000 per remitter / donor d) US 1000 per remitter / donor

Ans:b

165.

An Indian citizen going abroad for medical treatment is eligible for foreign exchange in addition to the

medical expenses as per estimate

a) upto USD 10000 per person for meeting boarding, lodging & travel expenses of the patient and the

attender

b) upto USD 25000 per person for meeting boarding, lodging & travel expenses of the patient and the

attender

c) upto USD 50000 per person for meeting boarding, lodging & travel expenses of the patient and the

attender

d) upto USD 100000 per person for meeting boarding, lodging & travel expenses of the patient and the

attender.

Ans:b

.

..Notes Page 55

166.

Sale proceeds of immovable property acquired in India by an NRI out of repatriable funds

a) can be repatriated without any lock in period

b) cannot be repatriated

c) can be repatriated after 10 years from the date of purchase

d)NRI is not permitted to buy immovable property in India.

Ans:a

167.

What is the time limit within which the bank has to sanction a fresh / enhancement export credit

proposal ?

a)

30 days b) 45 days c) 15 days d) 10 days

Ans:b

168.

Export Packing Credit is normally sanctioned for a period of

a)90 days b) 180 days c) 270 days d) 365 days

Ans:b

169.

.

..Notes Page 56

For travellers proceeding to Iraq and Libya, exchange in the form of foreign currency notes and coins

may be sold up to

a)US $ 2000 or its equivalent

b)US $ 5000 or its equivalent

c)Unlimited

d)No foreign currency notes/coins to be sold

Ans:b

170.

Exchange Earners Foreign Currency (EEFC)Account can be maintained

a) Only in the form of non-interest bearing current account

b) Only in the form TDR/STDR

c) Only in the form of SB A/c

d) Any one of above

Ans:a

171.

The cost of premium in respect of Whole Turnover Post-Shipment Guarantee is

a) Recovered from the exporter

b) Borne by the Central Government

c) Absorbed by the bank

d) Shared by the exporter and the bank at 50:50 basis

Ans:c

.

..Notes Page 57

172.

Refinance for PCFC is available to the banks from

a) No refinance is available

b) RBI

c) EXIM Bank

Ans:a

173.

Amount from NRO account that can be repatriated

a) No repatriation is allowed from NRO account for any bonafide purpose

b) US $ 1million per calendar year subject to payment of applicable taxes

c) Upto US$ 1,00,000

d) Up to US $ 10,000

Ans:b

174.

Foreign Trade Policy is framed by

a) RBI

b) EXIM bank

c) DGFT

d) Ministry of Commerce, Govt. of India

.

..Notes Page 58

Ans:d

175.

Opinion Report on foreign buyers can be obtained from

a) Reserve Bank of India

b) EXIM bank

c) Dun & Bradstreet

d) Ministry of Commerce, Govt of India

Ans:c

176.

The following risk is not covered under Specific Shipment Policy-Short Term

(SSP-ST)

a) Insolvency of the buyer

b) Buyer’s failure to accept the goods(subject to certain conditions)

c) Insolvency of the L/C opening Bank

d) Exchange rate fluctuation.

Ans:d

177.

Exporters are permitted to open EEFC accounts in

a) US $ only

b) Euro only

.

..Notes Page 59

c) Any one of the four currencies viz US$, GBP, EURO, YEN

d) Both a and b.

Ans:c

178.

A Student going abroad for studies is eligible for all facilities available to NRI.

Therefore

a) he has to close educational loan if any already availed by him

b) he has to close other loans, if any, availed by him

c) need not close educational loan

d) he may continue all the loans

Ans:d