MSME
1. A Small Manufacturing Enterprise unit is considered as Sick Industrial Unit: when account remains sub
standard for more than six months or there is erosion in the net worth due to accumulated cash losses to
the extent of 50% or more of its net worth during the previous accounting year and the unit has been in
commercial production for at least two years
2. A small scale unit (manufacturing) can be treated as micro unit if the original investment in plant and
machinery does not exceed : Rs.25 lac
3. A unit in service enterprise is considered as medium if the investment in equipment is: more than Rs 2
crore but up to Rs 5 crore.
4. A Unit will be called as Small Service Enterprise if investment in equipments is up to: Rs 2 crore.
5. Amount of maximum loan given to micro and small enterprises that is covered under-CGFTMSEscheme
: Rs.100 lac
6. As per Micro, small and medium enterprise development Act 2006, a small manufacturing enterprise is
one in which original investment in plant and machinery is: more than Rs 25 lakh and up to Rs 5 crore.
7. As per RBI guidelines, banks are required to provide__% of advance to small enterprises to units in
which original investment in plant & machinery does not exceed Rs 10 lac in the case of manufacturing
units and does not exceed Rs 4 lac in equipment in the case of service enterprises: 40%
8. As per RBI guidelines, Loans to Agro and food processing Units are eligible to be classified under
Agriculture Ancillary Activity under Agril. Finance Priority Per borrower Rs. 100.00 crores.
9. Bank limit for working capital based on turn over method: 20% of the projected sales turnover
10. Banks are required to make 40% of advance to Micro and Small enterprises to manufacturing units
with investment up to Rs 10 lakhs and/or service enterprises with investment in equipment up to: No
criteria (earlier Rs 4 lakh) and now Micro has to reach 7.00% by March 2016 & 7.5% by March
2017 of ANBC/ceobe which ever is higher.
11. Banks will not obtain collateral security in respect of loans to micro and small enterprises which are
covered by Credit Guarantee Scheme for Micro and Small enterprises?: Rs 1 crore
12. CGTMSE fee: For North East & women; Loan up to Rs 5 lakh – 0.75% p.a.; Loan more than
Rs 5 lakh – 0.85% p.a.
13. Composite loan limit for Small Manufacturing enterprises: Rs.1.00 crore
14. For being defined as Medium enterprise, the original investment in plant & machinery should be: More
than Rs 5 crore and up to Rs 10 crore.
15. For being eligible to be classified as small (service) enterprise, the original investment in equipment
should not exceed: Rs 2 crore.
16. Full form of CGTSME: Credit Guarantee Fund Trust for Micro & Small Enterprises.
17. If a small enterprise in manufacturing has a good track record, collateral security can be waived up
to: 25.00 lacs
18. If an MSME units holds a margin of Rs.20 lac and its projected sales are Rs.400 lac, its working
capital limit will be : Rs.80 lacs
19. In case of advance granted to Micro and small enterprises, banks will not obtain collateral security up
to: Rs 10 lakh
20. In case of advance to Micro and Small manufacturing enterprises, working capital limit by a bank as
per turnover method is calculated as: 20% of projected annual turnover.
21. In case of loan guaranteed under CGTMSE, what is the extent of cover for loan upto 50 lac granted to
a women?: 80% of amount in default.
22. In case of loan to micro and small enterprises guaranteed by CGTMSE, no collateral security is
required for loans up to: Rs 100 lac.
23. Khadi Village Industry part of MSE; irrespective of investment in P&M.
24. Maximum Guarantee coverage for loans guaranteed by CGTMSE if loan up to Rs 5 lakh: 85% of the
amount in default with a maximum of Rs 425000.
25. Micro, Small and Medium Enterprises is under which Ministry: Ministry of Micro Small & Medium
Enterprises.
26. SMERA stands for: Small & Medium Enterprises Rating Agency.
27. The definition of Micro and Small enterprise in the manufacturing Sector is based on investment in :
Plant and Machinery.
28. Under CGFT scheme for MSE, for loans up to Rs 50 lac, 80% coverage is not available for: SC/ST
29. What is the maximum amount of loan covered guarantee scheme of CGTMSE for loans made to micro
and small enterprise: Rs.100.00 Lac
30. What is the rate of guarantee fees charged under CGSMSE for loan of more than Rs 5 lac to a
women?: 0.85% p.a. of limit sanctioned.
31. Advantages of Cluster based finance to MSMEs: Risk mitigation.
GOVT. SPONSORED SCHEMES & MISC.
1. __% outstanding under General Credit Card Scheme is to be treated as__ : 100 %, Other Priority
Sector Advance
2. 100% of GCC accounts and up to 50000/- overdraft permitted in no frill accounts will be treated as:
Other Priority Sector.
3. CGFTSI: 80% coverage not allowed to SC/ST (only to beneficiaries in North East states, women
beneficiaries)
4. CGMSE - upto 5 lakhs cover in North East : 0.75% p.a. of limit sanctioned.
5. CGTMSE has been set up by: Govt of India and SIDBI
6. Cluster based approach is applicable for: a) Priority credit advance b) SME c) SHG.
7. Debt Swap meaning: To extend finance to farmers for repayment of loan taken from noninstitution
lenders
8. Discontinuation of Service Area Approach is as per recommendations of : Vyas committee report
9. Financial Inclusion aims at : The delivery of banking services at an affordable cost to the vast sections
of disadvantaged and low income group.
10. Internal Rate of Return is arrived at a point where future cash flows on Net Present Value basis should
be: Zero.
11. Jandhan tag line? Mera Khata Mera Bhagya Vidatha
12. Maximum amount of loan to DRI beneficiary was revised as per Union Budget 2007-08. What is the
maximum loan other than the Housing Loan to SC/ST that can be granted to DRI beneficiary: Rs.20,000/-
13. Maximum Number of persons in JLG? : 10 ( 4-10 )
14. Maximum people in SHG? : 20 ( 10-20 ).
15. Minimum qualification for loan under PMEGP if project cost in manufacturing more than 10 lacs: 8th
pass. If up to Rs 10 lakh no min qualification
16. Minimum women Self Help Groups in SGSY? 50% of the total Self Help Groups
17. Mudra Bank full form: Micro Units Development Refinance Agency.
18. Mudra Card will be co branded with: MUDRA Ltd and will be Rupay Card
19. PEMGP Subsidy to be kept as: 3 Years FDR without Interest
20. PMEGP - Margin / Promoter contribution : 10% Genera! & 50/s for Spi category borrowers
21. Prime Minister’s Task Force on loan to micro and small enterprises was headed by: T K A Nair
22. The Committee which issued guidelines on P.S. advances in July 2012 was headed by: M.V.Nair
23. The extent of coverage under CGTMSE for Micro units upto Rs 5 lacs: 85% with maximum amount of
claim upto Rs 4.25 lacs.
24. The maximum amount of guarantee cover for loans granted to small and micro enterprises other than
beneficiaries in the North Eastern Region and women entrepreneurs and guaranteed by CGFT is: 75% of
the amount outstanding up to Rs 50 lakh and 50% thereafter as on the date of account becoming NPA
with a maximum of Rs. 50 lacs (coverage upto 100 lac)
25. Under CGFT, for loans more than Rs 5 lac but upto Rs 50 lakh, 80 % guarantee cover is available for:
Loan to Micro and Small enterprises in NE States, Women.
26. Under CGTMSE liability upto 5 lac how much cover available to micro Enterprises: 85% ( 4.25 lacs )
27. Under MUDRA lending will be for: Non Farm sector
28. What are the benefits of covering advances under CGSMSE: Bank can finance viable projects without
insisting for collateral security.
29. What can be the maximum project cost in case of Agri clinic: Rs 20 lac per individual (Highly
successful case – max Rs 25 lac). For group it is max Rs 1 crore.
30. What does JAM represent?: Jandhan, Aadhar, Mobile
31. What is Composite fee payable to under CGFT for loans more than Rs 5 lac in North East and other
areas: .85% p.a. of limit sanctioned for loans in North East or to woman or to micro enterprise and 1%
p.a. of limit sanctioned in other cases
32. What is financial inclusion: Providing banking services to poor sections at affordable cost.
33. What is the corpus of Guarantee fund under MUDRA?: Rs 3000 crore
34. What is the corpus of MUDRA as per budget of 2015-16: Rs 20000 crore
35. What is the income criteria for classifying a person as economically weaker section for the purpose of
housing loan under Priority sector?: Annual income not more than Rs 200000 (earlier Rs120000)
36. What is the limit for classifying the loan sanctioned to Drip and Sprinker irrigation dealer, for including
under Indirect finance to Agriculture?: - Now in MSME Service irrespective of Amount.
37. What is the margin under MUDRA loans?: For Shishu — Nil; for others — 25%
38. What is the maximum amount of loan that can be granted under DRI: Rs 15000
39. What is the maximum amount of loan under "Kishore" category under MUDRA: Rs 5 lac
40. What is the maximum amount of loan under "Shishu" category under MUDRA: Rs 50000
41. What is the maximum amount of loan under "Tarun" category under MUDRA: Rs 10 lac
42. What is the maximum amount of MUDRA card?: Rs 20000
43. What is the minimum education qualification required for an entrepreneur for a manufacturing project
of Rs.10 Lakhs to be considered under PMEGP? No educational qualification required
44. What is the tenure under MUDRA loans?: Shishu — 36 EMI; Others — 36 to 60 months
45. Which of the following Committees have advised that a full service approach to cater to the diverse
needs of the MSE sector may be achieved through extending banking services to recognized MSE clusters
by adopting a 4 –C approach: Ganguly Committee
46. Which of the following is not the strength of Self Help Group - super profit orientation, saving, internal
lending, mutual help, none of these: Super profit orientation.
NPA & RECOVERY MANAGEMENT
SARFAESI
01. As per a recent judgement of the Supreme Court, while initiating action under SARFAESI, the position
in case of suit filed in DRT would be: that no permission is required from DRT and action under SARFAESI
can be initiated as both the cases can run together.
02. As per provisions of Sarfaesi Act, after taking possession, for making sale, how many days notice is
required to be given to borrower?: 30 days.
03. Bank has served the possession notice under Sarfeasi. The borrower has raised any query. The bank
has to reply within: 15 days.
04. Central Registry provision when started: 31-3-11 under SARFAESI Act.
05. Charge where SARFAESI action can not be taken: Pledge
06. For acquiring securities charged to the bank under SARFAESI, notice of __ days is required to be given
to the borrower u/s 13(2) of the Act and for sale of securities so acquired notice of__ days is required.:
60 days, 30 days
07.For enforcing right under SARFESAI Act, in the case of consortium advances, consent of which bankers
is required?: consent of 60% bankers by value is required
08. For taking action under SARFAESI, the outstanding should be: More than Rs.1.00 lac
09. In case of SARFAESI Act, before preferring appeal to DRAT, how much amount is to be deposited by
the borrower with DRAT?: 50% of the claim amount which can be reduced to 25% by the DRAT. For
making application to DRT, no amount is to be deposited.
10. NBFC with assets size of Rs.500 Crore and registered with RBI can take action under: Sarfaesi.
11. Under SARFAESI Act, in the case of Consortium lending, % of creditors to agree to bring the action
under SARFAESI: 60% of creditors by value.
12.Under SARFESAI, appeal against decision of DRT can be made to DRAT within_____ days and if appeal
by borrower, he should deposit % of bank’s claim with DRAT: 30 days; 50%
13. Which is the latest recovery channel made available to the banks for speedy recovery of NPAs backed
by security: Action can be taken under SARFAESI.
CDR
01. Corporate Debt Restructuring is applicable when a limited company has raised finance from more than
one bank and the outstanding is: Rs 10 crore and above.
02.For implementation of restructuring proposal under CDR mechanism, consent of __ % lenders in value
and __ % in Number is required: 75% by value, 60% by number.
03. CDR 2 - (classified as Doubtful ) Mechanism can be permitted only - if a minimum 75% of creditors
by value and 60% creditors by number should satisfy themselves of the viability of study.
04. For making reference under CDR -I, what are the rules regarding consent of Creditors: Consent of
20% of creditors by value is required. (There is no condition regarding number).
05. Which accounts are not eligible for CDR: Accounts under Loss category
06. In which case CDR is not valid? Finance by single bank
07. Implementation of CDR package of SME to be completed in:60 days
08. CDR covers which type of accounts for restructuring?: Accounts of corporates dealing both in
industrial and non industrial activities. -
09. What conditions have to be satisfied for a loan being eligible for CDR?: Borrowing from more than one
bank; minimum outstanding amount Rs 10 crore and above; account to be standard, sub standard or
doubtful.
PROVISIONING
01.An asset is doubtful for more than 2 years. How much provision is required to be made on the
unsecured portion of the same: 100 %
02. Banks are required to make provision on standard assets at the rate of 0.25% on__ & __accounts :
Direct agriculture and Micro & Small enterprises.
03. General provision on standard assets except specified categories is: 0.40% of the balance outstanding
on global basis.
04. How Interest suspense account is to be treated?: Reduce the balance for calculation of provisioning
purpose
05. Provision in Standard category under Direct Agriculture & SME: 0.25% of outstanding.
06. Provision in sub standard account, which are abi-initio unsecured: 25% for other than infrastructure
07. Provision on secured Sub-Standard Loan: 15% of outstanding.
08. Provisions in case of accounts classified in Doubtful category for 12 months to 3 years is _____: Deficit
+ 40% of RVS
09. Prudential accounting norms include : asset classification, income recognition, provision norms.
10. What is the rate of provision in case of doubtful assets which is in D2 category i.e. which is doubtful
for two years?: Unsecured portion 100%; secured portion: 40%
11.What is the rate of provision on secured Sub Standard Loan:15% of outstanding
12. Where provision required (Standard, Sub Standard, Doubtful, Loss): In all cases
Restructuring
01. The substandard accounts which have been subjected to restructuring, whether in respect of principal
instalment or interest amount, and has satisfactory performance, would be eligible to be upgraded to the
standard category after : one year after the date when first payment of interest or of principal, whichever
is earlier, falls due, subject to satisfactory performance during the period.
02. Decision on debt Restructuring of SME should be taken within a period of ___ days: 60 days.
03. In the case of restructuring of SME which type of accounts are not eligible for restructuring?: Loss
accounts
04. A loan account was restructured. First payment was due on 31.12.2005 and payment was promptly
made on 30.12.2005 and thereafter the-account was regular for 12 months. The account can be treated
as standard from: 31.12.2006
05. An account was restructured on 30th June 2011 and first instalment was due on 31.12.11. The
instalment was deposited on 29.12.11. The account will be considered as standard if instalments are paid
regularly for 12 months with effect from: 31.12.12.
DRT / Lok Adalat
01. Limit for filing suit in DRT: Rs.10 lacs and above
02. For referring cases to Lok Adalat, the cut-off limit is: Upto 20 lacs. More than 20 lacs Lok Adalat set up
under DRT.
Misc
01. ˜A Cash Credit account becomes NPA even if regular, when the credit limits have not been reviewed
for more than ____ from due date: 6 months (180 days)
02. ˜Agency which purchases NPA from banks is called: Assets Reconstruction Company.
03. A bank can sell its NPA account to another bank only after keeping the same as NPA in the books of
selling book for at least: Anytime
04. A bank who has purchased NPA from other bank can resell the same, after holding the same in its
books for months from the date of purchase: 12 months
05. A company which purchases NPAs from banks and reconstructs or securitises the same is called:
Asset Reconstruction Company (ARC)
06. A loan associated with a short duration crop, becomes sub-standard after remaining special mention
account for a period of : two crop seasons
07. A Sub standard account becomes doubtful after: 12 months from date of becoming NPA.
08. Account need not be classified as NPA as long as adequate margin available: Loan against FDR, Life
Insurance Policy,Govt securities.
09. An NPA has been purchased by a bank from another bank. What will be the risk weight for the
purchasing bank for this account? 100%
10. Bank can sell NPA after it has remained in its books for: No lock in period now.
11. Bank/Fls should submit the list of suit-filed accounts of wilful defaulters of Rs. as at end-March,
June, September and December every year to Credit Information Bureau (India) Ltd. (CIBIL) and submit
the quarterly list of wilful defaulters where suits have not been filed only to RBI: 25 lakh and above
12. CC account credit not enough to meet interest: Out of order.
13. CC/OD A/c out of order for a period of _____ to become NPA: 90 days.
14. Classification of NPA in consortium advances: Each bank will classify the account according to its own
record of recovery.
15. Credit in 9 months in a cc account are not sufficient to recover the interest but outstanding is within
DP. What will be the position of account: It becomes NPA
16. Debt securitisation means: Conversion of receivables into debt instrument.
17. For purpose of classification of Wilful Defaulters for reporting to RBI, the outstanding should be:
Rs.25 lakhs and above
18. Full form of CRILC: Central Repository of Information on Large Credits (CRILC)
19. If in a NPA account, the value of security both primary and collateral deteriorates so much that its
realizable value is 10% and above but less than 50% of the amount outstanding, then this account is
directly classified as: Doubtful asset.
20. If Interest debited in an account is not recovered within _____ will be treated as NPA: 90 days
from the end of the quarter.
21. IF THE PRINCIPAL OR INT PAYMENT REMAINS OVERDUE BETWEEN 31-60 DAYS: SMA 1
CATEGORY
22. If value of security is less than 50%, then sub standard account can be straight way taken to Doubtful
category.
23. Legal Expenses incurred by Bank in respect of suit filed account to be debited to : P & L account
24. Long duration crop means a crop with harvest season of: More than 12 months.
25. NPA ACCOUNT WILL NOT BE CONSIDERED AS WILFUL DEFAULT: IF DUE TO ECONOMIC
RECESSION.
26. Sale of NPA is done on: Without recourse basis
27. Short Duration and long duration crop — who fixes: Agri Deptt of the Govt.
28. State Govt loan can be treated as NPA if a/c is overdue for : 90 days
29. Supervisory Review according to which Central Bank of the country is to ensure that proper capital
has been provided for risk exposure and maintain proper system for the same is provided under?: Pillar II
of Basel IL
30. The Exposure norms for a single borrower in normal case and when .financing to Infrastructure are:
15% and 20% respectively of the capital funds of the bank.
31. The net worth of Asset Reconstruction Company should be: 15% of the assets acquired or Rs 100
crore whichever is less.
32. There is no minimum CRR or SLR as per RBI Act and B R Act.
33. Under OTS, the compromise amount is calculated after taking in _______: Opportunity Cost.
34. What does R stands in ARC: RECONSTRUCTION
35. What is Accrual concept: Mercantile. It means when the amt becomes due you recognize and take it
to P & L account irrespective of the fact that the amount has not been recovered.
36. What is full form of NPA?: Non Performing Asset
37. What is the cut off point for reporting of Willful Defaulter to Credit Information Company?: Rs.25
lakh and above.
38. What is the definition of Quick Mortality: Account becoming NPA with in 12 months from date of first
disbursement.
39. What is the purpose of adopting IRAC (Income Recognition and Asset Classification) norms in India?:
to move towards greater consistency and transparency in the published accounts.
40. When a person does not repay bank’s loan though he has profit to pay, he is called: Wilful Defaulter
41. When account will be out of order, in case of non-receipt of Stock Statement: If statement not
received for last 3 months.
42. When advance is given to a customer by discounting bills, when the account will become NPA?: When
bill is overdue for more than 90 days.
43. Which of the following can purchase NPA? a) ARC b) Banks c) Financial Institutions d) NBFC e) All of
the above.
44. Which of the following entities has released report titled as Framework for Revitalising Distressed
Assets in Economy – Guidelines on Joint Lenders and corrective Action Plan - (i) RBI (ii) Govt of India (iii)
Bank Board (iv) IBA: RBI
45. Which of the following was formed first of all : (a) DRT (b) Lok Adalat (c)SARFAESI (d) CDR
46. Which one of the following is not a method as per any law for recovery of bank loan – (a) Filing a
case with DRT (b) Action under Sarfaesi Act (c) Compromise (d) Lok Adalat: Compromise.
47. Who is not willful defaulter: Default beyond the control of the borrower
RISKS
01. ALM not responsible for: achieving budgets and targets (it helps in managing liquidity risk and
interest rate risk).
02. At present banks are required to maintain capital adequacy ratio of 9% and Tier II capital should
not be more than Tier I. It means that banks are required to bring Tier I capital of at least 4.5% of the
risk weighted assets. With effect from which date, banks will be required to bring Tier I capital of 6% of
the risk weighted assets?: 31't March 2010.
03. Documents not stamped properly is what kind of risk?: Legal Risk
04. For calculation of capital adequacy ratio, the risk weight for Commercial Real Estate for commercial
bldg is : 100%
05. For capital adequacy purposes, risk weight for personal loans is : 125%
06. Fraud – what type of risk : Operational ris
07. General Insurance works on principle of: Spreading the Risk.
08. If an Outsourcing agency does not serve properly – which type of Risk is faced by the bank?:
Reputation Risk and Operational Risk
09. Investment in perpetual bonds is risky because: the interest is not payable if the CRAR falls below
the stipulated target.
10. Legal risk is part of: operational risk.
11. Loss due to inadequacy or failure of system, process, people or due to external events is called:
Operational risk
12. Risk weight for claim on Banks which complies to Min CRAR requirement : Scheduled Banks 20%
13. Risk weight for exposure to Scheduled Commercial Bank that maintains CRAR as per RBI
requirement: 20%
14. Sub-prime is an risk. (Operational and Credit Risk)
15. The capital adequacy ratio is computed by the following formula: Capital/Risk Weighted Assets
16. Tier 2 - general provisioning & loss reserves only up to 1.25% of total risk weighted assets.
17. Tier I should be at least 6% of Risk weighted assets and should be achieved before by all scheduled
commercial banks: 31.3.2010.
18. What are the components of credit risk?: Transaction risk or default risk and portfolio risk
19. When does liquidity risk arises?: Liquidity risk arises when maturing liabilities are more than maturing
assets-
20. While doing Risk Rating, an asset is downgraded from A+ rating to A rating. What type of risk is
involved: Credit Risk.
FOREX :PreShipment
01. A Letter of Credit that contains clause for giving advance for pre-shipment is called: Red Clause LC
02. Adhoc Export Credit to be sanctioned within – 15 days.
03. As per RBI guidelines, concessional interest on Pre Shipment Credit in rupees sanctioned up to 30th June 2010,
can be extended upto days: Ans: 270 days
04. Bill of lading to be submitted within 21 days : if date of shipment is 28th Sep 08, documents to be
tendered on or before 19th Oct 08.
05. In case packing credit in foreign currency is not adjusted within 180 days, what will be the rate of
interest chargeable on such advance after 180 days: Bank's discretion
06. Packing credit is allowed against letter of credit for: purchase of raw material, payment of wages
or power.
07. Packing credit is normally allowed for a maximum period of : as per bank discretion.
08. Packing_credit loan is adjusted out of the proceeds of: Export bills, export incentives and EEFC account
09. PCFC - Refinance - Not available
10. PCFC above 180 days, the rate of interest is: as per bank's discretion.
11. Pre shipment credit is normally linked to : FOB value
12. Rate of Interest on adhoc packing credit limit is: same rate of interest as for normal packing credit loan.
13. Which of the following is not true about "special running A/c" of pre-shipment credit? Bills pertaining to other exports
14. Within how many days, Export documents and Bill of Lading to be submitted to Authorised Dealer for
realization?: 21 days of shipment
UCPDC
01. A clean bill of lading means: a bill of lading in which the condition of goods or packing is not stated to
be defective.
02. As per UCPDC 600, beginning of the Month implies: 1st to 10th of month, Middle – 11th -20th, Last – 21st – last
day of the month.
03. As per UCPDC, the insurance policy should be taken for a minimum amount of : 110% of c.i.f.
value.
04. Expansion of UCPDC: Uniform Customs & Practices for Documentary Credit.
05. If there is no mention in LC regarding type of Bill of Lading that will be acceptable, then as per
UCPDC, bank will ask for: On Board Bill of Lading.
06. In case of Letter of Credit (LC), the importer is also known as - a.beneficiary; b.remitter; c.opener
bank; d. opener: Opener
07. Liability of confirming bank in LC: Bank makes additional undertaking to make payment under
LC in addition to undertaking of issuing bank.
08. UCPDC - for examination of documents – 5 banking-days (Act 14 b)
09. UCPDC is issued by: a) ICC b) RBI c) IMF d) any of these: ICC Paris.
10. Under UCPDC 600, what is the tolerance limit of variation in Quantity, if not specifically mentioned in LC: +/-
5%
11. Which type of documents under LC are preferred? A. On board bill of lading B. Clean Bill of lading C.
Caused bill of lading : On-Board & Clean Bill of lading
12. WHICH IS LATEST UCP- : UCP 600 ( wef 01.07.2007 )
1. A Small Manufacturing Enterprise unit is considered as Sick Industrial Unit: when account remains sub
standard for more than six months or there is erosion in the net worth due to accumulated cash losses to
the extent of 50% or more of its net worth during the previous accounting year and the unit has been in
commercial production for at least two years
2. A small scale unit (manufacturing) can be treated as micro unit if the original investment in plant and
machinery does not exceed : Rs.25 lac
3. A unit in service enterprise is considered as medium if the investment in equipment is: more than Rs 2
crore but up to Rs 5 crore.
4. A Unit will be called as Small Service Enterprise if investment in equipments is up to: Rs 2 crore.
5. Amount of maximum loan given to micro and small enterprises that is covered under-CGFTMSEscheme
: Rs.100 lac
6. As per Micro, small and medium enterprise development Act 2006, a small manufacturing enterprise is
one in which original investment in plant and machinery is: more than Rs 25 lakh and up to Rs 5 crore.
7. As per RBI guidelines, banks are required to provide__% of advance to small enterprises to units in
which original investment in plant & machinery does not exceed Rs 10 lac in the case of manufacturing
units and does not exceed Rs 4 lac in equipment in the case of service enterprises: 40%
8. As per RBI guidelines, Loans to Agro and food processing Units are eligible to be classified under
Agriculture Ancillary Activity under Agril. Finance Priority Per borrower Rs. 100.00 crores.
9. Bank limit for working capital based on turn over method: 20% of the projected sales turnover
10. Banks are required to make 40% of advance to Micro and Small enterprises to manufacturing units
with investment up to Rs 10 lakhs and/or service enterprises with investment in equipment up to: No
criteria (earlier Rs 4 lakh) and now Micro has to reach 7.00% by March 2016 & 7.5% by March
2017 of ANBC/ceobe which ever is higher.
11. Banks will not obtain collateral security in respect of loans to micro and small enterprises which are
covered by Credit Guarantee Scheme for Micro and Small enterprises?: Rs 1 crore
12. CGTMSE fee: For North East & women; Loan up to Rs 5 lakh – 0.75% p.a.; Loan more than
Rs 5 lakh – 0.85% p.a.
13. Composite loan limit for Small Manufacturing enterprises: Rs.1.00 crore
14. For being defined as Medium enterprise, the original investment in plant & machinery should be: More
than Rs 5 crore and up to Rs 10 crore.
15. For being eligible to be classified as small (service) enterprise, the original investment in equipment
should not exceed: Rs 2 crore.
16. Full form of CGTSME: Credit Guarantee Fund Trust for Micro & Small Enterprises.
17. If a small enterprise in manufacturing has a good track record, collateral security can be waived up
to: 25.00 lacs
18. If an MSME units holds a margin of Rs.20 lac and its projected sales are Rs.400 lac, its working
capital limit will be : Rs.80 lacs
19. In case of advance granted to Micro and small enterprises, banks will not obtain collateral security up
to: Rs 10 lakh
20. In case of advance to Micro and Small manufacturing enterprises, working capital limit by a bank as
per turnover method is calculated as: 20% of projected annual turnover.
21. In case of loan guaranteed under CGTMSE, what is the extent of cover for loan upto 50 lac granted to
a women?: 80% of amount in default.
22. In case of loan to micro and small enterprises guaranteed by CGTMSE, no collateral security is
required for loans up to: Rs 100 lac.
23. Khadi Village Industry part of MSE; irrespective of investment in P&M.
24. Maximum Guarantee coverage for loans guaranteed by CGTMSE if loan up to Rs 5 lakh: 85% of the
amount in default with a maximum of Rs 425000.
25. Micro, Small and Medium Enterprises is under which Ministry: Ministry of Micro Small & Medium
Enterprises.
26. SMERA stands for: Small & Medium Enterprises Rating Agency.
27. The definition of Micro and Small enterprise in the manufacturing Sector is based on investment in :
Plant and Machinery.
28. Under CGFT scheme for MSE, for loans up to Rs 50 lac, 80% coverage is not available for: SC/ST
29. What is the maximum amount of loan covered guarantee scheme of CGTMSE for loans made to micro
and small enterprise: Rs.100.00 Lac
30. What is the rate of guarantee fees charged under CGSMSE for loan of more than Rs 5 lac to a
women?: 0.85% p.a. of limit sanctioned.
31. Advantages of Cluster based finance to MSMEs: Risk mitigation.
GOVT. SPONSORED SCHEMES & MISC.
1. __% outstanding under General Credit Card Scheme is to be treated as__ : 100 %, Other Priority
Sector Advance
2. 100% of GCC accounts and up to 50000/- overdraft permitted in no frill accounts will be treated as:
Other Priority Sector.
3. CGFTSI: 80% coverage not allowed to SC/ST (only to beneficiaries in North East states, women
beneficiaries)
4. CGMSE - upto 5 lakhs cover in North East : 0.75% p.a. of limit sanctioned.
5. CGTMSE has been set up by: Govt of India and SIDBI
6. Cluster based approach is applicable for: a) Priority credit advance b) SME c) SHG.
7. Debt Swap meaning: To extend finance to farmers for repayment of loan taken from noninstitution
lenders
8. Discontinuation of Service Area Approach is as per recommendations of : Vyas committee report
9. Financial Inclusion aims at : The delivery of banking services at an affordable cost to the vast sections
of disadvantaged and low income group.
10. Internal Rate of Return is arrived at a point where future cash flows on Net Present Value basis should
be: Zero.
11. Jandhan tag line? Mera Khata Mera Bhagya Vidatha
12. Maximum amount of loan to DRI beneficiary was revised as per Union Budget 2007-08. What is the
maximum loan other than the Housing Loan to SC/ST that can be granted to DRI beneficiary: Rs.20,000/-
13. Maximum Number of persons in JLG? : 10 ( 4-10 )
14. Maximum people in SHG? : 20 ( 10-20 ).
15. Minimum qualification for loan under PMEGP if project cost in manufacturing more than 10 lacs: 8th
pass. If up to Rs 10 lakh no min qualification
16. Minimum women Self Help Groups in SGSY? 50% of the total Self Help Groups
17. Mudra Bank full form: Micro Units Development Refinance Agency.
18. Mudra Card will be co branded with: MUDRA Ltd and will be Rupay Card
19. PEMGP Subsidy to be kept as: 3 Years FDR without Interest
20. PMEGP - Margin / Promoter contribution : 10% Genera! & 50/s for Spi category borrowers
21. Prime Minister’s Task Force on loan to micro and small enterprises was headed by: T K A Nair
22. The Committee which issued guidelines on P.S. advances in July 2012 was headed by: M.V.Nair
23. The extent of coverage under CGTMSE for Micro units upto Rs 5 lacs: 85% with maximum amount of
claim upto Rs 4.25 lacs.
24. The maximum amount of guarantee cover for loans granted to small and micro enterprises other than
beneficiaries in the North Eastern Region and women entrepreneurs and guaranteed by CGFT is: 75% of
the amount outstanding up to Rs 50 lakh and 50% thereafter as on the date of account becoming NPA
with a maximum of Rs. 50 lacs (coverage upto 100 lac)
25. Under CGFT, for loans more than Rs 5 lac but upto Rs 50 lakh, 80 % guarantee cover is available for:
Loan to Micro and Small enterprises in NE States, Women.
26. Under CGTMSE liability upto 5 lac how much cover available to micro Enterprises: 85% ( 4.25 lacs )
27. Under MUDRA lending will be for: Non Farm sector
28. What are the benefits of covering advances under CGSMSE: Bank can finance viable projects without
insisting for collateral security.
29. What can be the maximum project cost in case of Agri clinic: Rs 20 lac per individual (Highly
successful case – max Rs 25 lac). For group it is max Rs 1 crore.
30. What does JAM represent?: Jandhan, Aadhar, Mobile
31. What is Composite fee payable to under CGFT for loans more than Rs 5 lac in North East and other
areas: .85% p.a. of limit sanctioned for loans in North East or to woman or to micro enterprise and 1%
p.a. of limit sanctioned in other cases
32. What is financial inclusion: Providing banking services to poor sections at affordable cost.
33. What is the corpus of Guarantee fund under MUDRA?: Rs 3000 crore
34. What is the corpus of MUDRA as per budget of 2015-16: Rs 20000 crore
35. What is the income criteria for classifying a person as economically weaker section for the purpose of
housing loan under Priority sector?: Annual income not more than Rs 200000 (earlier Rs120000)
36. What is the limit for classifying the loan sanctioned to Drip and Sprinker irrigation dealer, for including
under Indirect finance to Agriculture?: - Now in MSME Service irrespective of Amount.
37. What is the margin under MUDRA loans?: For Shishu — Nil; for others — 25%
38. What is the maximum amount of loan that can be granted under DRI: Rs 15000
39. What is the maximum amount of loan under "Kishore" category under MUDRA: Rs 5 lac
40. What is the maximum amount of loan under "Shishu" category under MUDRA: Rs 50000
41. What is the maximum amount of loan under "Tarun" category under MUDRA: Rs 10 lac
42. What is the maximum amount of MUDRA card?: Rs 20000
43. What is the minimum education qualification required for an entrepreneur for a manufacturing project
of Rs.10 Lakhs to be considered under PMEGP? No educational qualification required
44. What is the tenure under MUDRA loans?: Shishu — 36 EMI; Others — 36 to 60 months
45. Which of the following Committees have advised that a full service approach to cater to the diverse
needs of the MSE sector may be achieved through extending banking services to recognized MSE clusters
by adopting a 4 –C approach: Ganguly Committee
46. Which of the following is not the strength of Self Help Group - super profit orientation, saving, internal
lending, mutual help, none of these: Super profit orientation.
NPA & RECOVERY MANAGEMENT
SARFAESI
01. As per a recent judgement of the Supreme Court, while initiating action under SARFAESI, the position
in case of suit filed in DRT would be: that no permission is required from DRT and action under SARFAESI
can be initiated as both the cases can run together.
02. As per provisions of Sarfaesi Act, after taking possession, for making sale, how many days notice is
required to be given to borrower?: 30 days.
03. Bank has served the possession notice under Sarfeasi. The borrower has raised any query. The bank
has to reply within: 15 days.
04. Central Registry provision when started: 31-3-11 under SARFAESI Act.
05. Charge where SARFAESI action can not be taken: Pledge
06. For acquiring securities charged to the bank under SARFAESI, notice of __ days is required to be given
to the borrower u/s 13(2) of the Act and for sale of securities so acquired notice of__ days is required.:
60 days, 30 days
07.For enforcing right under SARFESAI Act, in the case of consortium advances, consent of which bankers
is required?: consent of 60% bankers by value is required
08. For taking action under SARFAESI, the outstanding should be: More than Rs.1.00 lac
09. In case of SARFAESI Act, before preferring appeal to DRAT, how much amount is to be deposited by
the borrower with DRAT?: 50% of the claim amount which can be reduced to 25% by the DRAT. For
making application to DRT, no amount is to be deposited.
10. NBFC with assets size of Rs.500 Crore and registered with RBI can take action under: Sarfaesi.
11. Under SARFAESI Act, in the case of Consortium lending, % of creditors to agree to bring the action
under SARFAESI: 60% of creditors by value.
12.Under SARFESAI, appeal against decision of DRT can be made to DRAT within_____ days and if appeal
by borrower, he should deposit % of bank’s claim with DRAT: 30 days; 50%
13. Which is the latest recovery channel made available to the banks for speedy recovery of NPAs backed
by security: Action can be taken under SARFAESI.
CDR
01. Corporate Debt Restructuring is applicable when a limited company has raised finance from more than
one bank and the outstanding is: Rs 10 crore and above.
02.For implementation of restructuring proposal under CDR mechanism, consent of __ % lenders in value
and __ % in Number is required: 75% by value, 60% by number.
03. CDR 2 - (classified as Doubtful ) Mechanism can be permitted only - if a minimum 75% of creditors
by value and 60% creditors by number should satisfy themselves of the viability of study.
04. For making reference under CDR -I, what are the rules regarding consent of Creditors: Consent of
20% of creditors by value is required. (There is no condition regarding number).
05. Which accounts are not eligible for CDR: Accounts under Loss category
06. In which case CDR is not valid? Finance by single bank
07. Implementation of CDR package of SME to be completed in:60 days
08. CDR covers which type of accounts for restructuring?: Accounts of corporates dealing both in
industrial and non industrial activities. -
09. What conditions have to be satisfied for a loan being eligible for CDR?: Borrowing from more than one
bank; minimum outstanding amount Rs 10 crore and above; account to be standard, sub standard or
doubtful.
PROVISIONING
01.An asset is doubtful for more than 2 years. How much provision is required to be made on the
unsecured portion of the same: 100 %
02. Banks are required to make provision on standard assets at the rate of 0.25% on__ & __accounts :
Direct agriculture and Micro & Small enterprises.
03. General provision on standard assets except specified categories is: 0.40% of the balance outstanding
on global basis.
04. How Interest suspense account is to be treated?: Reduce the balance for calculation of provisioning
purpose
05. Provision in Standard category under Direct Agriculture & SME: 0.25% of outstanding.
06. Provision in sub standard account, which are abi-initio unsecured: 25% for other than infrastructure
07. Provision on secured Sub-Standard Loan: 15% of outstanding.
08. Provisions in case of accounts classified in Doubtful category for 12 months to 3 years is _____: Deficit
+ 40% of RVS
09. Prudential accounting norms include : asset classification, income recognition, provision norms.
10. What is the rate of provision in case of doubtful assets which is in D2 category i.e. which is doubtful
for two years?: Unsecured portion 100%; secured portion: 40%
11.What is the rate of provision on secured Sub Standard Loan:15% of outstanding
12. Where provision required (Standard, Sub Standard, Doubtful, Loss): In all cases
Restructuring
01. The substandard accounts which have been subjected to restructuring, whether in respect of principal
instalment or interest amount, and has satisfactory performance, would be eligible to be upgraded to the
standard category after : one year after the date when first payment of interest or of principal, whichever
is earlier, falls due, subject to satisfactory performance during the period.
02. Decision on debt Restructuring of SME should be taken within a period of ___ days: 60 days.
03. In the case of restructuring of SME which type of accounts are not eligible for restructuring?: Loss
accounts
04. A loan account was restructured. First payment was due on 31.12.2005 and payment was promptly
made on 30.12.2005 and thereafter the-account was regular for 12 months. The account can be treated
as standard from: 31.12.2006
05. An account was restructured on 30th June 2011 and first instalment was due on 31.12.11. The
instalment was deposited on 29.12.11. The account will be considered as standard if instalments are paid
regularly for 12 months with effect from: 31.12.12.
DRT / Lok Adalat
01. Limit for filing suit in DRT: Rs.10 lacs and above
02. For referring cases to Lok Adalat, the cut-off limit is: Upto 20 lacs. More than 20 lacs Lok Adalat set up
under DRT.
Misc
01. ˜A Cash Credit account becomes NPA even if regular, when the credit limits have not been reviewed
for more than ____ from due date: 6 months (180 days)
02. ˜Agency which purchases NPA from banks is called: Assets Reconstruction Company.
03. A bank can sell its NPA account to another bank only after keeping the same as NPA in the books of
selling book for at least: Anytime
04. A bank who has purchased NPA from other bank can resell the same, after holding the same in its
books for months from the date of purchase: 12 months
05. A company which purchases NPAs from banks and reconstructs or securitises the same is called:
Asset Reconstruction Company (ARC)
06. A loan associated with a short duration crop, becomes sub-standard after remaining special mention
account for a period of : two crop seasons
07. A Sub standard account becomes doubtful after: 12 months from date of becoming NPA.
08. Account need not be classified as NPA as long as adequate margin available: Loan against FDR, Life
Insurance Policy,Govt securities.
09. An NPA has been purchased by a bank from another bank. What will be the risk weight for the
purchasing bank for this account? 100%
10. Bank can sell NPA after it has remained in its books for: No lock in period now.
11. Bank/Fls should submit the list of suit-filed accounts of wilful defaulters of Rs. as at end-March,
June, September and December every year to Credit Information Bureau (India) Ltd. (CIBIL) and submit
the quarterly list of wilful defaulters where suits have not been filed only to RBI: 25 lakh and above
12. CC account credit not enough to meet interest: Out of order.
13. CC/OD A/c out of order for a period of _____ to become NPA: 90 days.
14. Classification of NPA in consortium advances: Each bank will classify the account according to its own
record of recovery.
15. Credit in 9 months in a cc account are not sufficient to recover the interest but outstanding is within
DP. What will be the position of account: It becomes NPA
16. Debt securitisation means: Conversion of receivables into debt instrument.
17. For purpose of classification of Wilful Defaulters for reporting to RBI, the outstanding should be:
Rs.25 lakhs and above
18. Full form of CRILC: Central Repository of Information on Large Credits (CRILC)
19. If in a NPA account, the value of security both primary and collateral deteriorates so much that its
realizable value is 10% and above but less than 50% of the amount outstanding, then this account is
directly classified as: Doubtful asset.
20. If Interest debited in an account is not recovered within _____ will be treated as NPA: 90 days
from the end of the quarter.
21. IF THE PRINCIPAL OR INT PAYMENT REMAINS OVERDUE BETWEEN 31-60 DAYS: SMA 1
CATEGORY
22. If value of security is less than 50%, then sub standard account can be straight way taken to Doubtful
category.
23. Legal Expenses incurred by Bank in respect of suit filed account to be debited to : P & L account
24. Long duration crop means a crop with harvest season of: More than 12 months.
25. NPA ACCOUNT WILL NOT BE CONSIDERED AS WILFUL DEFAULT: IF DUE TO ECONOMIC
RECESSION.
26. Sale of NPA is done on: Without recourse basis
27. Short Duration and long duration crop — who fixes: Agri Deptt of the Govt.
28. State Govt loan can be treated as NPA if a/c is overdue for : 90 days
29. Supervisory Review according to which Central Bank of the country is to ensure that proper capital
has been provided for risk exposure and maintain proper system for the same is provided under?: Pillar II
of Basel IL
30. The Exposure norms for a single borrower in normal case and when .financing to Infrastructure are:
15% and 20% respectively of the capital funds of the bank.
31. The net worth of Asset Reconstruction Company should be: 15% of the assets acquired or Rs 100
crore whichever is less.
32. There is no minimum CRR or SLR as per RBI Act and B R Act.
33. Under OTS, the compromise amount is calculated after taking in _______: Opportunity Cost.
34. What does R stands in ARC: RECONSTRUCTION
35. What is Accrual concept: Mercantile. It means when the amt becomes due you recognize and take it
to P & L account irrespective of the fact that the amount has not been recovered.
36. What is full form of NPA?: Non Performing Asset
37. What is the cut off point for reporting of Willful Defaulter to Credit Information Company?: Rs.25
lakh and above.
38. What is the definition of Quick Mortality: Account becoming NPA with in 12 months from date of first
disbursement.
39. What is the purpose of adopting IRAC (Income Recognition and Asset Classification) norms in India?:
to move towards greater consistency and transparency in the published accounts.
40. When a person does not repay bank’s loan though he has profit to pay, he is called: Wilful Defaulter
41. When account will be out of order, in case of non-receipt of Stock Statement: If statement not
received for last 3 months.
42. When advance is given to a customer by discounting bills, when the account will become NPA?: When
bill is overdue for more than 90 days.
43. Which of the following can purchase NPA? a) ARC b) Banks c) Financial Institutions d) NBFC e) All of
the above.
44. Which of the following entities has released report titled as Framework for Revitalising Distressed
Assets in Economy – Guidelines on Joint Lenders and corrective Action Plan - (i) RBI (ii) Govt of India (iii)
Bank Board (iv) IBA: RBI
45. Which of the following was formed first of all : (a) DRT (b) Lok Adalat (c)SARFAESI (d) CDR
46. Which one of the following is not a method as per any law for recovery of bank loan – (a) Filing a
case with DRT (b) Action under Sarfaesi Act (c) Compromise (d) Lok Adalat: Compromise.
47. Who is not willful defaulter: Default beyond the control of the borrower
RISKS
01. ALM not responsible for: achieving budgets and targets (it helps in managing liquidity risk and
interest rate risk).
02. At present banks are required to maintain capital adequacy ratio of 9% and Tier II capital should
not be more than Tier I. It means that banks are required to bring Tier I capital of at least 4.5% of the
risk weighted assets. With effect from which date, banks will be required to bring Tier I capital of 6% of
the risk weighted assets?: 31't March 2010.
03. Documents not stamped properly is what kind of risk?: Legal Risk
04. For calculation of capital adequacy ratio, the risk weight for Commercial Real Estate for commercial
bldg is : 100%
05. For capital adequacy purposes, risk weight for personal loans is : 125%
06. Fraud – what type of risk : Operational ris
07. General Insurance works on principle of: Spreading the Risk.
08. If an Outsourcing agency does not serve properly – which type of Risk is faced by the bank?:
Reputation Risk and Operational Risk
09. Investment in perpetual bonds is risky because: the interest is not payable if the CRAR falls below
the stipulated target.
10. Legal risk is part of: operational risk.
11. Loss due to inadequacy or failure of system, process, people or due to external events is called:
Operational risk
12. Risk weight for claim on Banks which complies to Min CRAR requirement : Scheduled Banks 20%
13. Risk weight for exposure to Scheduled Commercial Bank that maintains CRAR as per RBI
requirement: 20%
14. Sub-prime is an risk. (Operational and Credit Risk)
15. The capital adequacy ratio is computed by the following formula: Capital/Risk Weighted Assets
16. Tier 2 - general provisioning & loss reserves only up to 1.25% of total risk weighted assets.
17. Tier I should be at least 6% of Risk weighted assets and should be achieved before by all scheduled
commercial banks: 31.3.2010.
18. What are the components of credit risk?: Transaction risk or default risk and portfolio risk
19. When does liquidity risk arises?: Liquidity risk arises when maturing liabilities are more than maturing
assets-
20. While doing Risk Rating, an asset is downgraded from A+ rating to A rating. What type of risk is
involved: Credit Risk.
FOREX :PreShipment
01. A Letter of Credit that contains clause for giving advance for pre-shipment is called: Red Clause LC
02. Adhoc Export Credit to be sanctioned within – 15 days.
03. As per RBI guidelines, concessional interest on Pre Shipment Credit in rupees sanctioned up to 30th June 2010,
can be extended upto days: Ans: 270 days
04. Bill of lading to be submitted within 21 days : if date of shipment is 28th Sep 08, documents to be
tendered on or before 19th Oct 08.
05. In case packing credit in foreign currency is not adjusted within 180 days, what will be the rate of
interest chargeable on such advance after 180 days: Bank's discretion
06. Packing credit is allowed against letter of credit for: purchase of raw material, payment of wages
or power.
07. Packing credit is normally allowed for a maximum period of : as per bank discretion.
08. Packing_credit loan is adjusted out of the proceeds of: Export bills, export incentives and EEFC account
09. PCFC - Refinance - Not available
10. PCFC above 180 days, the rate of interest is: as per bank's discretion.
11. Pre shipment credit is normally linked to : FOB value
12. Rate of Interest on adhoc packing credit limit is: same rate of interest as for normal packing credit loan.
13. Which of the following is not true about "special running A/c" of pre-shipment credit? Bills pertaining to other exports
14. Within how many days, Export documents and Bill of Lading to be submitted to Authorised Dealer for
realization?: 21 days of shipment
UCPDC
01. A clean bill of lading means: a bill of lading in which the condition of goods or packing is not stated to
be defective.
02. As per UCPDC 600, beginning of the Month implies: 1st to 10th of month, Middle – 11th -20th, Last – 21st – last
day of the month.
03. As per UCPDC, the insurance policy should be taken for a minimum amount of : 110% of c.i.f.
value.
04. Expansion of UCPDC: Uniform Customs & Practices for Documentary Credit.
05. If there is no mention in LC regarding type of Bill of Lading that will be acceptable, then as per
UCPDC, bank will ask for: On Board Bill of Lading.
06. In case of Letter of Credit (LC), the importer is also known as - a.beneficiary; b.remitter; c.opener
bank; d. opener: Opener
07. Liability of confirming bank in LC: Bank makes additional undertaking to make payment under
LC in addition to undertaking of issuing bank.
08. UCPDC - for examination of documents – 5 banking-days (Act 14 b)
09. UCPDC is issued by: a) ICC b) RBI c) IMF d) any of these: ICC Paris.
10. Under UCPDC 600, what is the tolerance limit of variation in Quantity, if not specifically mentioned in LC: +/-
5%
11. Which type of documents under LC are preferred? A. On board bill of lading B. Clean Bill of lading C.
Caused bill of lading : On-Board & Clean Bill of lading
12. WHICH IS LATEST UCP- : UCP 600 ( wef 01.07.2007 )
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