Cheque

A Cheque can be

a) An open cheque – payable at the counter of the bank
b) Bearer Cheque – payable to the person who presents the cheque for encashment.
Transferable by mere delivery.
c) Order Cheque – payable to the person named in the cheque. When the word bearer is
cancelled it becomes an order cheque.
d) Crossed Cheque – cheque with two parallel transverse lines are drawn with or without
the words between the lines. It can only be credited to the account of the payee.
e) Stale Cheque – a Cheque whose validity period is over. An Out-dated cheque.
f) Ante-dated cheque – a cheque contains the date on which it is drawn. If it bears a
priordate or back date, it is called ante-dated cheque.
g) Post-dated cheque – cheque bearing a date later than the date on which it is drawn.
h) Mutilated cheque – torn into pieces.
a) General Crossing - cheque bearing two transverse parallel lines at the left hand top
corner, with or without words (not negotiable).
b) Special crossing – when a cheque bears the name of the bank with or without the words
(not negotiable) between the transverse lines.
c) Restrictive crossing / Account payee Crossing – cheque can be paid by way of credit to
account only. Marked as a/c payee between the lines.
d) Double Crossing – when a second bank act as an agent of the first collecting banker it is
said to be doubly crossed.

LOANS AND ADVANCES INCLUDING BALANCE SHEET ANALYSIS

1. ˜Credit Rating Agencies in India are regulated by: RBI
2. ˜CRISIL stands for: Credit Rating Information Services of India Ltd.
3. ˜Deferred Payment Guarantee is : Guarantee issued
when payment by applicant of guarantee is to be made in installments over a period of time.
4. ˜If Break Even Point is high, it can be construed that the margin of safety is ____: Low.
5. ˜Long Term uses – 12; total Assets – 30; Long Term source 16; What is net working capital : 4
6. ˜On which one of the following assets, depreciation is applied on Straight line method: Computers.
7. ˜Projected Turnover is Rs.400 lacs, margin by promoter is Rs. 20 lacs. What is maximum bank
finance as per Annual Projected Turnover method: 80 lakhs.
8. ˜Rohit was a loanee of the branch and news has come that he has expired. On enquiry, it was
observed that he left some assets. Upto what extent the legal heirs are liable to the Bank? Legal heirs are
liable for the liabilities upto the assets inherited by them.
9. ˜The appraisal of Deferred Payment Guarantee is same as that of a) Demand Loan b) OD c) Term
Loan d) CC : Term Loan.
10. A cash credit account will be treated as NPA if the CC limit is not renewed within ___days from the
due date of renewal: 180 days.
11. A director of a bank wants to raise loan of Rs 10 lakh from his bank against Life Insurance Policy with
surrender value of more than Rs 15 lakh. What will be done?: Bank can sanction.
12. A firm is allowed a limit of Rs.1.40 lac at 30% margin. It wants to avail the limit fully. How much will
be the value of security : Rs.2 lac
13. A guarantee issued for a series of transactions is called: Continuing guarantee
14. A lady who has taken a demand loan against FD come to the branch and wants to add name of her
minor son, as joint a/c holder. What you will do?: Name can be added only after adjustment of the loan.
15. A letter of credit which is issued on request of the beneficiary in favour of his supplier: Back to Back

LC
16. A loan is given by the bank on hypothecation of stock to Mr. A. Bank receives seizure order from
State Govt. What should bank do?: Bank will first adjust its dues and surplus if any wilt be shared with
the Govt.
17. A loan was sanctioned against a vacant land. Subsequently a house was constructed at the site.
What security is available now to the bank? : Both
18. A minor was given loan. On attaining majority he acknowledges having taken loan and promises to
pay. Whether the loan can be recovered? : He can not ratify the contract. Hence recovery not possible.
19. A negotiating bank and issuing bank are allowed days each for scrutiny of documents drawn
under Letter of credit to ensure that documents are as per LC: 5 banking days each.
20. Age limit staff housing loan: 70 years;
21. An L/C is expiring on 10.05.2008. A commotion takes place in the area and bank could not open.
Under these circumstances can the LC be negotiated?: The L/C can not be negotiated because expiry date
of LC can not be extended if banks are closed for reasons beyond their control.
22. As per internal policy of certain banks, the net worth of a firm does not include: a. Paid up capital b.
Free Reserve c. Share Premium d. Equity received from Foreign Investor : Revaluation Reserves
23. Authorised capital is Rs.10 lac. Paid up capital Rs.6 lac. The loss of previous year is Rs.1 lac. Loss in
current year is Rs3 _ lac. The tangible net worth is : Rs.2 lac
24. Authorised capital= 10 lac, paid-up capital = 60%, loss during current year = 50000, loss last year =
2 lacs, what is the tangible net worth of the company? : 3.5 lac
25. Bailment of goods by a person to another person, to secure a loan is called : Pledge
26. Balance outstanding in a CC limit is Rs.9 lakh. Value of stock is Rs.5 lakhs. It is in doubtfUl for more
than two years as on 31 March 2012. What is the amount of provision to be made on 31-03-2013?: Rs.9
lakhs (100% of liability as account is doubtful for more than 3 years)
27. Balance Sheet of a firm indicates which of the following – Balance Sheet indicates what a firm
owes and what a firm owns as on a particular date.
28. Bank limit for working capital based on turn over method: 20% of the projected sales turnover
accepted by Banks
29. Banks are required to declare their financial results quarterly as per provisions of : SEBI
30. Banks are required to maintain -a margin of ___ for issuing Guarantee favouring stock exchange on
behalf of share Brokers.
31. Banks are required to obtain audited financial papers from non corporate borrowers for granting
working capital limit of: Rs.25 lakh &above
32. Banks provide term loans and deferred payment guarantee to finance capital assets like plant and
machinery. What is the difference between these two: Outlay of funds.
33. Benchmark Current Ratio under turn over method is: 1.25
34. Break Even Point: No profit no loss. ( TR-TC=Zero)
35. Calculate Debt Equity ratio – Debenture – Rs 200, capital 50; reserves – 80; P& L account credit
balance – Rs 20: 4: 3 ( 200 divided by 150).
36. Calculate Net working capital– Total assets 1000; Long Term liabilities 400; Fixed assets, Intangible
assets and Non current assets (i.e. long term uses) Rs 350; What is net working capital : 400- 350= Rs
50
37. Calculate Tangible Net Worth: Land and building: 200 Lacs; Capital:80000 intangible asset:15000:

KYC AML Terms

AML Anti-Money Laundering
BM Branch Manager
BDD Basic Due Diligence
CAP Customer Acceptance Program
CBI Central Bureau of Investigation
CBS Core Banking Solution
CCR Counterfeit Currency Report
CRCM Customer Risk Categorisation Model
CDD Customer Due Diligence
CIP Customer Identification Program
CRO Customer Relationship Officer
CTR Cash Transaction Report
DCCB District Central Cooperative Bank
EDD Enhanced Due Diligence
FATF Financial Action Task Force
FIU-IND Financial Intelligence Unit - India
HNI High Net Worth Individual
HUF Hindu Undivided Family
IBA Indian Banks’ Association
KYC Know Your Customer
ML Money Laundering
NRI Non-Resident Indian
PACS Primary Agricultural Cooperative Societies
PEP Politically Exposed Person
PIO Person of Indian Origin
PMLA Prevention of Money Laundering Act 2002
PMLR Prevention of Money Laundering Rules 2005
PO Principal Officer
RBI Reserve Bank of India
RRB Regional Rural Banks
NABARD National Bank for Agriculture and Rural Development
NAFSCOB National Federation of State Cooperative Banks
NRI Non Resident Indian
NSDL National Securities Depository Limited
NTR Non-Profit Organisation Transaction Reports
SA Staff Assistant
SCB State Cooperative Banks
SDD Simplified Due Diligence
STR Suspicious Transaction Report
UAPA Unlawful Activities Prevention Act
UN United Nations
UNSCR United Nation Security Council Resolution

Mortgage and various types of charges

mortgage
A legal agreement that conveys the conditional right of ownership on an asset or property by its owner (the mortgagor) to a lender (the mortgagee) as security for a loan. The lender's security interest is recorded in the register of title documents to make it public information, and is voided when the loan is repaid in full.

Virtually any legally owned property can be mortgaged, although real property (land and buildings) are the most common. When personal property (appliances, cars, jewelry, etc.) is mortgaged, it is called a chattel mortgage. In case of equipment, real property, and vehicles, the right of possession and use of the mortgaged item normally remains with the mortgagor but (unless specifically prohibited in the mortgage agreement) the mortgagee has the right to take its possession (by following the prescribed procedure) at any time to protect his or her security interest.

In practice, however, the courts generally do not automatically enforce this right when it involves a dwelling house, and restrict it to a few specific situations. In the event of a default, the mortgagee can appoint a receiver to manage the property (if it is a business property) or obtain a foreclosure order from a court to take possession and sell it. To be legally enforceable, the mortgage must be for a definite period, and the mortgagor must have the right of redemption on payment of the debt on or before the end of that period. Mortgages are the most common type of debt instruments for several reasons such as lower rate of interest (because the loan is secured), straight forward and standard procedures, and a reasonably long repayment period.

The document by which this arrangement is effected is called a mortgage bill of sale, or just a mortgage.

Purpose, Various types of charges:

1. Pledge - It is used when the bank (or, lender, known as pledgee) takes

actual possession of the securities, such as goods, certificates, golds,

etc, (you provide it to bank to avail loan) which are generally movable in nature.



Bank keeps the securities with itself, and provide loan to you.

Bank will return the securities (possession of goods) to you (borrower,known

as pledgor), after you repay all the debts (i.e., loan) to the bank. In case you

are unable to pay back, then the bank has the right to sell the assets,

and recover the loan amount (with interest).

Example - Gold loans, Jewellry loans, warehouse finance.

2. Hypothecation - It is used when you (borrower) have the

actual possessionof the asset, for which you have taken the loan. Generally,

this is charged against loans for movable assets, like car, bus, etc.

(i.e., vehicle loans). Here, the assets (bus, car, etc.) remain with you, and you

are hypothecated to the bank for the loan granted.

In case you are unable to repay the loan amount, then the bank has the right

to sell the asset (bus, car, etc.), (which is possessed by you) and recover the

total amount (with interest).

Example - Car loans, Bus loans, etc.

3. Mortgage - It is used when you (borrower) have the

actual possession of the assets, for which you are granted loan (e.g., house

loan), or against whichyou are granted loan (e.g., house

mortgaged). Mortgages are generally those assets, which

are permanently attached with Earth surface, like house, land, factory etc.

In case you are unable to repay the loan amount, the bank has

the right to seize and sell the mortgage, and recover the loan amount (with

interest).



4. Lien - It is almost similar to Pledge, except that in case of lien,

the lendercan only detain the asset/goods until the borrower repays the loan,

but have no right to sell the asset, unless explicitly declared in the lien

contract. (For a pledge, the lender can sell the asset, if the borrower is unable

to pay the loan). Loan against FD is a lien .

5. Assignment: It is done in case of loan is provided on documents of some

other organization. Like, Loan against assignment policies, NSC, etc. A

notification is required to be sent to the concerned organization to inform that the

original document is with you as a security for loan. Else, the customer can apply

with indemnity to the concerned organization for issuance of duplicate doc and

defraud you.

A&L

According to Accounting terms

ASSETS

Assets are the economic resources of business or we can say assets are the property owned by the business to get benefit on future.

In other words, assets are valuable resources owned by a business which were acquired at a measurable money cost for usefulness.

The various types of assets are:

1- Fixed assets: those assets which are acquired for the purpose of increasing profit earning capacity of the business and are purchased not for sale purpose, they will remain in the business till the business winds up. Example, land and building, plant and machinery etc

2- Current assets: those which can be converted into cash within a short period say one year. These are short term assets for the purpose of converting them into cash. Example, cash in hand, debtors, stock, bank balance etc.

3- Liquid assets: similar to current assets, but they are those assets which can be easily and in a very short period of time can be converted into​ cash, so all current assets except stock and prepaid expenses are considered liquid assets.

4- Tangible assets: assets which having some physical existence or we say which can be touched and seen like land and building, machinery, stock etc

5- Intangible assets: those assets which can't be seen or touched and there revenue generation is assumed to be uncertain. Moreover they can't be purchased or sold in open market examples are goodwill, patents, trademarks etc.

6- Fictitious assets: those assets which do not have any real value and do not have any physical form but are called assets on the basis of legal and technical grounds, as they do not have any real value so they are written off in the future, for example preliminary expenses, discount on issue of shares and debentures etc.

7- Wasting assets: those assets when with the passage of time value of assets decreases, example patents, leasehold property.

LIABILITIES

Liabilities are the claims against those resources or liabilities are the amount which a business owes to outsiders or claim of outside towards business. We should remember one thing that we take all the claims against business except the claims of proprietors. Because claim of proprietors against business is called internal liability or capital.

Example of liabilities are, creditors, bills payable, bank overdraft etc.

We should note that total assets are always equals to total liabilities.

Types of liabilities are:

1- Fixed liabilities: which are payable after a long period or normally one year. Example long term loans, debentures etc.

2- Current liabilities: those which are payable within one year example, bills payable, creditors etc

3- Contingent liabilities: those liabilities which are not a liability for today but it may be liability in future depending on the future events, they are uncertain liabilities so that is why they are called doubtful liabilities also. Example, value of bill discounted, cases pending in court etc.

Total assets=total liabilities

Or

Total assets= internal liabilities+external liabilities

Or

Total assets= Capital+ liabilities

Or

Liabilities= Assets-capital.

Different types of banking

Para Banking:

Para banking activities are defined as those banking activities which a bank performs apart from its daily activities like withdrawal or deposit of money.

Under para banking activities banks can undertake activities either departmentally or by setting up subsidiaries.

Narrow Banking:

This is a type of banking in which banks invest money mostly in government bonds and securities.

This is done to avoid risk in the market.

Banks dedicated to such type of banking are also known as Narrow Banks.

Offshore Banking

When a bank accepts currencies of countries abroad, such an activity is known as Offshore banking

Sometimes people require more than their local banks can offer. In such cases, they opt for Offshore banking.

It provides financial and legal benefits like privacy and minimal taxation.

Green Banking

Green banking promotes deployment of clean energy technologies.

It stresses on environmentally friendly practices and aims at reducing the carbon footprint from banking activities.

These activities seek to reduce costs of energy for ratepayers, private sector investments and other economic activities.

Retail Banking

Retail banking is a type of banking in which direct dealing with the retail customers is done. This type of banking is also popularly known as consumer banking or personal banking

Retail banking is the visible face of banking to the general public.

Wholesale Banking

Wholesale banking can be referred to as the services provided by banks to organisations like Mortgage Brokers, corporate clients, medium scale companies, real estate developers and investors, international trade finance businesses, institutional customers (such as pension funds & government agencies) and services offered to other banks or financial institutions.

Universal Banking

The recommendation of the concept of Universal Banking was done by the R H Khan committee.

This is a type of banking in which banks are allowed to undertake all types of financial activities regarding banking or development in accordance with the statutory and other requirements of RBI, Government and related legal Acts.

Universal Banking includes activities like accepting deposits, issuing credit cards, investing in securities, merchant banking, foreign exchange operations, etc.

Different types of banking

Islamic Banking

Islamic banking is a kind of banking activity which strictly follows the principles of the Islamic law (Sharia) and its application practically through the development in Islamic economics

A better and more apt term for Islamic banking is Sharia Compliant Finance.

Unit Banking

USA is where such type of banking was first introduced.

In such a type of banking, all the operations are performed from a single branch.

A customer having an account in a specified branch has to undergo all banking activities through that branch.

Examples are Regional Rural Banks and Local Area Banks.

Mixed Banking

Mixed banking is a type of banking in which deposits and investment activities take place simultaneously.

It can also be described as the dual functioning of investment banking and commercial banking.

Chain Banking:

Chain banking is a type of banking which is a group of minimum 3 banks held together by a group of people to carry out effective banking activities.

Instead of having a holding company the bank functions independently.

The revenue is maximised since there is no overlap of activities.

Relationship Banking

In such a type of banking, the the major needs of the customers are understood by the bank and accordingly banking services are provided to the individual.

Banks get to know if the customer is credit worthy since they have to gather information about its customers.

Correspondent Banking

In more than 200 countries, this type of banking is prevalent and is considered the most profitable way of doing business.

In such a type of banking, the bank does not have a physical presence or any limitations in the permission of operations.

It acts as a banking agent for a home bank.

Very Nice article on The importance of a vibrant MSME sector

 Very Nice article on The importance of a vibrant MSME sector

The importance of a vibrant MSME sector in the context of the aggregate economy can’t
be over-estimated as it accounts for:
• Roughly one-third of aggregate economy gross value added
• Approximately one-third of manufacturing output in the country
• 45% of all Indian exports
• Three-fourths of all establishments in the country
• Provide employment to around 131.2 million people

However, the MSME sector has not received the due attention it deserves from the financial system on account of the various
challenges inherent in servicing this segment. Like we demonstrated earlier, lending to MSMEs should allow the banks to ameliorate the
deleterious impact of the secular trend of Disintermediation and the cyclical challenges of rising NPAs due to an over-extended largesize
corporate sector.
Thus, it would be fair to surmise that a business realignment towards MSME lending is the antidote to the ills afflicting the Indian banking
system currently. This is one of the rare instances where the commercial imperative of higher growth and profitability is aligned with the
societal imperative of financial inclusion.
The rest of this report deals with the key issues impacting the supply and demand of credit to the MSME segment. Effort has been made
to diagnose the key financial and operational challenges involved in servicing this segment. Finally, the key thrust of this report is to
illustrate the similarities between the business models for the retail and the MSME segment and the relevance of applying the key
success strategies especially the adoption of a credit scoring fueled information lending model in achieving robust and sustainable risk
adjusted growth.
MSME FINANCING – SUPPLY, DEMAND & GAP ANALYSIS
Source: RBI & TransUnion CIBIL Calculations
Overall bank credit to the Micro & Small Enterprises (MSE) has increased at a CAGR of 15.2% from INR 2.5 trillion in FY08 to INR 9.0
trillion FY17. This is marginally ahead of the 13.4% and 13.9% growth exhibited by the Nominal GDP and the Non-food Credit
respectively over the same time period. Thus, MSE credit penetration (as measured by proportion to GDP) has increased from around
5.2% in FY08 to a high of 6.4% in FY15.
Ongoing deceleration in economic activity and the emergence of the NPA overhang in the past couple of years has meant that credit
growth to the MSE sector has slowed down considerably. This has manifested itself in share of MSE Lending coming down as a
proportion of the GDP as well as a proportion of the total non-food credit.
Most SMEs in India face poor access to finance within a financial system dominated by banks. The following points will conclusively
highlight the scale of funding challenges faced by the Indian MSME sector:
• MSME bank credit to GDP ratio for India was at around 6.2% in FY 15 – less than one-sixth of the levels seen in countries like Korea
and China. It is around one-fourth of countries like Thailand and Malaysia and is even lower than Bangladesh.
• As per IFC, the total financing demand of the Indian MSME sector is around INR 32.5 trillion – comprised of entrepreneur’s contribution
of INR 4.6 trillion and estimated external finance demand of INR 27.9 trillion.
• Considering that the MSMEs have access to formal finance of around INR 10 trillion, the sector is grappling with a formal credit gap of
around INR 17.9 trillion. The enormity of the financial challenge is clear from the fact that the credit gap is close to twice the actual
outstanding amount of formal credit extended to the sector.

From a sectoral perspective, the credit gap for the manufacturing sector (73% of aggregate credit gap) is much higher than services
sector due to the capital intensive nature of the manufacturing enterprises. This trend is exacerbated by the fact the bank lending to the
Services sector has expanded at the expense of Manufacturing. Share of Services sector in aggregate MSE lending has increased from
47% in FY08 to 59% in FY17.

• As per the sixth economic census, roughly 78% of all enterprises in India are self-financed and have no access to financing from
formal sources.
MSME FINANCING – KEY CHALLENGES

Inadequate access to financing by the MSMEs is a function of the inherent limitations of the current business models of the financial
institutions. The underlying heterogeneity, pervasive geographical presence of the MSME sector and the utilization of physical bank
branches for bulk of the loan origination means that entrepreneurs in remote locations lack access to finance. Even though Banks have
tried to ease this issue through the usage of the Banking Correspondents model, access remains a key challenge – especially for
entrepreneurs based out of low-income or geographically far-flung areas.


The current business model is also characterized by manual check-list based risk assessment at the origination stage. MSMEs are also
bedeviled by the insistence of the banks on following a cumbersome and inflexible documentation procedure that is difficult for new
borrowers. The net result is a significant increase in turnaround times. Currently, the sector is characterized by turnaround times (for
loans < INR 1 Million) ranging from 17 days for the NBFC sector to 30 days for PSU Banks.
Such high level of turnaround time means that the formal financial sector is unable to provide timely credit to entrepreneurs in times of a
crisis – especially important as MSME entrepreneurs have very limited financial capabilities to handle life cycle shocks. These
entrepreneurs turn to informal sources in such crisis situations and it is difficult to bring them back into the formal financial sector after
such an experience.
Despite the preponderance of evidence to the contrary (NPA analysis by size segments showed that the MSME-CMR segment had one
of the best performance), most financial sector participants consider the MSME sector to be massively risky and are loath to disburse
loans without adequate collateral. World Bank Enterprise surveys show that around 81% of all loans in South Asia are collateralized –
significantly higher than the 64% share in high income OECD countries. Further, most financial institutions insists on immovable
collateral like land or buildings on account of unenforceable secured transaction laws. Thus, MSME loans have comparatively higher


rejection rate for feasible projects.
The informal nature of most MSMEs, consequent lack of adequate compliance to tax and other legal regulations means that most
MSMEs find it difficult to adapt to the high levels of document requirements of the formal financial system. This situation is exacerbated
by the lack of qualified personnel for preparing the annual financial statements. Consequently, most MSMEs gravitate towards the
informal system that ask for little documentation.
The combination of the above discussed trends of physical branch based origination systems, low access, high turnaround times due to
complicated processes, inadequate access to collateral and documentation and perceptions of higher risk translate into significantly
higher cost of funding in terms of both the interest rate as well as processing costs for the MSMEs. The high cost of financing in turn has
a significant adverse impact on the future profitability and growth of the sector.
MSME LENDING – CREDIT SCORING BASED INFORMATION LENDING
The centrality of the MSMEs in ensuring India’s future economic and employment growth and the inability of the formal financial sector in
supporting the continued robust growth of MSMEs underline the need for a radical redesign of the entire MSME lending value chain.
Fortunately, the banks and the NBFCs already have a business segment – Retail Lending – that can serve as a guidepost for
redesigning a business model that can facilitate robust volume growth whilst maintaining risk under control.
As our previous research article “Credit Bureaus, Scoring & Technology – Key Pillars Of Sustainable Retail Lending” illustrated, financial
institutions have been able to robust risk-adjusted growth in retail lending in the past few years as the confluence of the structural trends
of the advent of the Credit Bureaus like TransUnion CIBIL, increasing information technology intensity and the resultant development of
credit scoring based automatic decision making has radically redefined the consumer lending business model from “manual, judgmental
and relationship driven” to “digital, credit scoring and transaction driven”. This paradigm shift in the business model has translated into
multi-faceted benefits for consumer lending industry, consumers and the aggregate economy.

In contrast to the current practice of a one-size-fits-all risk assessment system based on financial statement analysis and
collateralization, banks need to come up with risk assessment systems that are targeted at different commercial client segments.

6/8
Financial Statement Lending is suitable for large enterprises with a significant history of audited financial statements and consequent
financial transparency. Risk assessment and monitoring is largely a function of achievement and maintenance of financial performance
covenants.
Asset Based Lending i.e. Collateralized Lending should be used for medium-sized firms that exhibit the characteristics of limited
financial transparency, inadequate future cash flow generation capacity but access to reasonable amount of moveable collateral like
high quality accounts receivables and inventory and immovable collateral like land and buildings.
Credit Scoring Based Information Lending is the most appropriate form of lending for Micro and Small Enterprises that may lack
updated financial statements as well as reasonable amounts of collateral. In this type of lending, decisions involving the approval of the
loan, pricing and the other terms and conditions are linked to the Credit Score.
Credit Scoring is a quantitative technique in which the future probability of default is determined by financial and non-financial
characteristics of both the business and the business owner. A well-known example of Credit Score is the CIBIL MSME Rank (MSME
(CMR)) score provided by TransUnion CIBIL. The MSME (CMR) measures and predicts the future probability of default over a one-year
horizon on a rank scale of 1 to 10 with 1 being the best and 10 being the worst.
CREDIT SCORING BASED INFORMATION LENDING – KEY BENEFITS
Just like Consumer Lending, judicious use of credit scoring results in multifaceted benefits to lenders, borrowers and the aggregate
economy.
Use of credit scoring and the associated change in risk assessment practices leads to greater process standardization and concomitant
increase in objectivity in risk assessment practices. Financial Institutions can achieve meaningful increase in profitability as credit
scoring can reduce the costs associated with the processing of individual applications whilst increasing the volumes as lenders are able
to safely approve marginal applications that an individual underwriter may have rejected.
Various international studies have documented the positive impact of credit scoring on the availability, price and risk of credit to micro
and small enterprises. A US Study examining the benefits of credit scoring for micro business lending estimated that the usage of credit
scoring resulted in the loan processing costs coming down from a range of USD 500-1800 to around USD 100. Another study by the
Federal Reserve Bank of Atlanta found out that usage of credit scoring led to significant increase in credit availability especially in lowincome
areas – traditionally the geographic segments facing the largest credit gap – due to the rise in objectivity of the credit
assessment process.
The usage of credit scoring has the potential of solving the access challenges faced by MSMEs based in geographically remote areas
that have comparatively lower penetration of formal financial sector. Research by Raghuram Rajan and Mitchell Peterson showed that
the confluence of the trend of availability of credit information from infomediaries like Credit Bureaus and ability of banks to synthesize
this information through Credit Scoring and Information Technology investments has resulted in significant expansion of the distance
between the small firms and their lenders.
The combination of credit scoring and automatic decisioning platforms provided by Credit Bureaus like TransUnion CIBIL can have a
significant impact on the turnaround time of micro and small business lending. Since the majority of applications come from applicants
that are low risk in nature, an automatic decision rule (say accept all companies having a MSME (CMR) rank of 4 or below) would
significantly reduce the turnaround time for bulk of the applicants. Conversely, turnaround times are also reduced by explicit rejection
rules e.g. reject all applicants having a MSME (CMR) rank of 8 or above. It is our opinion that the current turnaround time of 17-30 days
can be reduced to around 1-5 days by utilizing the credit scoring risk assessment system in conjunction with automatic rule-based
decisioning systems.
Proactive utilization of Consumer Bureau data as well periodic monitoring of bureau scores should lead to a meaningful reduction in bad
debts. It is a well-established fact that enterprises would exhibit certain behavior patterns like irregular payments, deteriorating credit
score, multiple financial enquiries etc. before showing actual delinquency. A well-thought out delinquency indicator alert system
developed in partnership with a Credit Bureau would allow a lender to identify the set of clients going through a challenging time. This in
turn allows the financial institutions to limit the bad debt exposure as well as implement risk mitigation strategies that benefit both the
lender and the borrower.
In addition to application scoring, Credit Scores like the MSME (CMR) developed by TransUnion CIBIL can be leveraged for Collections
purposes as well. Collection process efficiency and profitability can be significantly increased by segmenting the default and the neardefault
clients into collection priority buckets through the usage of scores and ability and propensity of future payments.
Thus, the principal benefits accruing to a lender – lower bad debt expense, reduced turnaround time, lesser processing / operational
cost – result in expanded credit at comparatively lower cost to the micro and small enterprises. Additionally, there is a meaningful
improvement in the service quality as well.
In conclusion, it would be fair to say that the usage of credit scoring would go a long way in expanding credit availability at comparatively
lower cost to the MSME sector – one of the prime movers of the Indian economy and one of the principal sectors suffering from financial
exclusion.
MSME LENDING – PROFITABILITY STRATEGIES
Conventional wisdom suggests that the profitability of the MSME segment is likely to below-par on account of myriad operational and
financial challenges in servicing this segment. The profitability question become even more challenging in today’s economic scenario
characterized by weakening economic growth and rising NPAs.
However, IFC research of MSME Banking business models across various countries shows that banks can tackle this challenge by
having some innovations in the business model. Following best practices that banks have used to enhance the profitability of the SME
lending segment:
• Transitioning the business model from a relationship based lending business model to a sophisticated high volume approach that
emphasizes quantitative credit score based risk assessment system to get scalability and efficiency advantages.
• Harnessing the synergy between the MSME lending and personal banking of the MSME owners through retail or personal banking
divisions to enhance aggregate profitability.
• Sophisticated risk-tier based pricing dynamic pricing to better capture the risk-adjusted profitability and allow differentiated lending to
different risk profiles.
• Successful banks have developed product-specific profitability models to identify the optimum bouquet of products / services for the
MSME segment. In addition to asset products, successful banks have targeted the sale of non-lending products to enhance the overall
risk-adjusted profitability.
• Early warning risk indicators that allow the bank to proactively tackle the loans that are about to become delinquent is also a major
factor that distinguishes between a profitable and loss making portfolio. Key attributes of this approach would include the ability to timely
respond to arrears, maintenance of credit relationships as long as the situation seems resolvable and proactive loss minimization when
risk mitigation fails.

Risk management

Risk management is the process of identifying, assessing and controlling threats to an organization's capital and earnings. These threats, or risks, could stem from a wide variety of sources, including financial uncertainty, legal liabilities, strategic management errors, accidents and natural disasters. IT security threats and data-related risks, and the risk management strategies to alleviate them, have become a top priority for digitized companies. As a result, a risk management plan increasingly includes companies' processes for identifying and controlling threats to its digital assets, including proprietary corporate data, a customer's personally identifiable information and intellectual property

Risk management standards
Since the early 2000s, several industry and government bodies have expanded regulatory compliance rules that scrutinize companies' risk management plans, policies and procedures. In an increasing number of industries, boards of directors are required to review and report on the adequacy of enterprise risk management processes. As a result, risk analysis, internal audits and other means of risk assessment have become major components of business strategy.

Risk management standards have been developed by several organizations, including the National Institute of Standards and Technology and the ISO. These standards are designed to help organizations identify specific threats, assess unique vulnerabilities to determine their risk, identify ways to reduce these risks and then implement risk reduction efforts according to organizational strategy.

The ISO 31000 principles, for example, provide frameworks for risk management process improvements that can be used by companies, regardless of the organization's size or target sector. The ISO 31000 is designed to "increase the likelihood of achieving objectives, improve the identification of opportunities and threats, and effectively allocate and use resources for risk treatment," according to the ISO website. Although ISO 31000 cannot be used for certification purposes, it can help provide guidance for internal or external risk audit, and it allows organizations to compare their risk management practices with the internationally recognized benchmarks.

The ISO recommended the following target areas, or principles, should be part of the overall risk management process:

The process should create value for the organization.
It should be an integral part of the overall organizational process.
It should factor into the company's overall decision-making process.
It must explicitly address any uncertainty.
It should be systematic and structured.
It should be based on the best available information.
It should be tailored to the project.
It must take into account human factors, including potential errors.
It should be transparent and all-inclusive.
It should be adaptable to change.
It should be continuously monitored and improved upon.
The ISO standards and others like it have been developed worldwide to help organizations systematically implement risk management best practices. The ultimate goal for these standards is to establish common frameworks and processes to effectively implement risk management strategies.

These standards are often recognized by international regulatory bodies, or by target industry groups. They are also regularly supplemented and updated to reflect rapidly changing sources of business risk. Although following these standards is usually voluntary, adherence may be required by industry regulators or through business contracts.

Risk management strategies and processes
All risk management plans follow the same steps that combine to make up the overall risk management process:

Risk identification. The company identifies and defines potential risks that may negatively influence a specific company process or project.
Risk analysis. Once specific types of risk are identified, the company then determines the odds of it occurring, as well as its consequences. The goal of the analysis is to further understand each specific instance of risk, and how it could influence the company's projects and objectives.
Risk assessment and evaluation. The risk is then further evaluated after determining the risk's overall likelihood of occurrence combined with its overall consequence. The company can then make decisions on whether the risk is acceptable and whether the company is willing to take it on based on its risk appetite.
Risk mitigation. During this step, companies assess their highest-ranked risks and develop a plan to alleviate them using specific risk controls. These plans include risk mitigation processes, risk prevention tactics and contingency plans in the event the risk comes to fruition.
Risk monitoring. Part of the mitigation plan includes following up on both the risks and the overall plan to continuously monitor and track new and existing risks. The overall risk management process should also be reviewed and updated accordingly.
Risk management approaches
After the company's specific risks are identified and the risk management process has been implemented, there are several different strategies companies can take in regard to different types of risk:

Risk avoidance. While the complete elimination of all risk is rarely possible, a risk avoidance strategy is designed to deflect as many threats as possible in order to avoid the costly and disruptive consequences of a damaging event.
Risk reduction. Companies are sometimes able to reduce the amount of effect certain risks can have on company processes. This is achieved by adjusting certain aspects of an overall project plan or company process, or by reducing its scope.
Risk sharing. Sometimes, the consequences of a risk is shared, or distributed among several of the project's participants or business departments. The risk could also be shared with a third party, such as a vendor or business partner.
Risk retaining. Sometimes, companies decide a risk is worth it from a business standpoint, and decide to retain the risk and deal with any potential fallout. Companies will often retain a certain level of risk a project's anticipated profit is greater than the costs of its potential risk.

Consumer disputes redressal agencies

Consumer disputes redressal agencies

Consumer disputes redressal agencies are established in each district and state and at national level.


i. District Forum: The forum has jurisdiction to entertain complaints, where value of the goods or services and the compensation claimed is up to Rs. 20 lakhs The District Forum is empowered to send its order/decree for execution to appropriate Civil Court.

ii. State Commission: This redressal authority has original, appellate and supervisory jurisdiction. It entertains appeals from the District Forum. It also has original jurisdiction to entertain complaints where the value of goods/service and compensation, if any claimed exceeds Rs. 20 lakhs but does not exceed Rs. 100 lakhs. Other powers and authority are similar to those of the District Forum.

iii. National Commission: The final authority established under the Act is the National Commission. It has original; appellate as well as supervisory jurisdiction. It can hear the appeals from the order passed by the State Commission and in its original jurisdiction it will entertain disputes, where goods/services and the compensation claimed exceeds Rs.100 lakhs. It has supervisory jurisdiction over State Commission.

All the three agencies have powers of a Civil Court.

Pecuniary limit for filing an application in DRT increases from 10 Lacs to 20 Lacs: MoF

Monetary limit for filing cases in DRT doubled to Rs 20 lakh

The move is aimed at helping reduce pendency of cases in DRTs. There are 39 DRTs in the country.

The government on Thursday doubled the pecuniary limit to Rs 20 lakh for filing loan recovery application in the Debt Recovery Tribunals (DRT) by banks and financial institutions.

The move is aimed at helping reduce pendency of cases in DRTs. There are 39 DRTs in the country.

The Central government has raised "the pecuniary limit from Rs 10 lakh to Rs 20 lakh for filing application for recovery of debts in the Debts Recovery Tribunals by such banks and financial institutions," said a Finance Ministry notification.

As a result, any bank or financial institution or a consortium of banks or financial institutions cannot approach DRTs if the amount due is less than Rs 20 lakh.

As per RBI data on global operations (with provisional data as on March 2018), aggregate amount of Rs 3,98,671 crore was written-off by banks over the last four financial years. Over the same period, their NPAs reduced by Rs 2,57,980 crore due to recoveries.

Banks and financial institutions' recovery of dues takes place on ongoing basis through legal mechanisms, which inter-alia includes Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act, Recovery of Debts to Banks and Financial Institution (DRT) Act and Lok Adalats.

The borrowers of such loans continue to be liable for repayment even when the loans have been removed from the balance sheet of the bank(s) concerned.

To make the tribunals more effective and to facilitate fast disposal of debt recovery cases, the government has made several amendments in different laws, including the SARFAESI Act.

Notification from Govt

MINISTRY OF FINANCE
(Department of Financial Services)
NOTIFICATION
New Delhi, the 6th September, 2018
S.O. 4312(E).—Whereas, sub-section (4) of section 1 of the Recovery of Debts due to Banks and Financial
Institutions Act, 1993 ( 51 of 1993) provides that the provisions of the said Act shall not apply where the amount of debt
due to any bank or financial institution or to a consortium of banks or financial institutions is less than ten lakh rupees or
such other amount, being not less than one lakh rupees, as the Central Government may, by notification, specify;
And whereas, the Central Government has considered it necessary to raise the pecuniary limit from ten lakh
rupees to twenty lakh rupees for filing application for recovery of debts in the Debts Recovery Tribunals by such banks
and financial institutions.
Now therefore, in exercise of the powers conferred by sub-section (4) of section 1 of the Recovery of Debts
Due to Banks and Financial Institutions Act, 1993, the Central Government hereby specifies that the provisions of the
said Act shall not apply where the amount of debt due to any bank or financial institution or to a consortium of banks or
financial institutions is less than twenty lakh rupees.
[F. No. 3/4/2018-DRT]
SUCHINDRA MISRA, Jt. Secy.

Single link for JAIIB Recollected

Jaiib Legal Recollected: 2018 May

Lc se question tha

Lok adalat

Ni

Indemnity

Gurantee

Collecting banker

Awards under banking ombundsman

5 questions from FEMA

Limitations act lot of 2 marks

Bailee bailor pledge mortgage

Mortgage 3-4 question English n equitable

Paid up capital
Securities questions
Saffaesi 2-4 questions
Lok adalat 3 questions
Ultra vires questions

Equity mortgage questions

Collecting bank 2 questions

JAIIB LEGAL RECOLLECTED:: Most important Previous years questions

1. Section on which partners are defined
2. Tenure of director of banking company
3. Preservation of records
4. Maximum share in company related one question
5. Question to the condition on which depositor has to deposit-25% amount
6. Who has power to inspect bank-rbi officer, state officer,police officer, custom officer
7. Bfs-one director nominated by
8. Central government power in banking
9. Term loan given and default occurs-limitation period-3 years
10. A issued a check with amount 300 and left space in both side i.e. in words as well as
figure. Some employee forged it to 3300 unknowingly and sign style was little different
but it was cleared-who should be responsible
11. Question related to responsibility of collecting banker
12. A cheque is a drawn on some bank what collecting bank should do
13. Check crossing related one question
14. Liability of paying banker
15. There is one partnership firm ABC. With operation E/S upto the limit of 5000. A
draws cheque to B for 4553. B transfers it to his account…then who is liable wand what
is the role of bank here
16. A minor shares profit of the firm does he will be have liability with the firm if
something went wrong
17. An OD facility is given the customer he but he has drawn beyond his limits and also
many cheques have been returned-what a bank should do?
18. To which type of company there is restriction on transfer of share-private company
19. Main objective and other objective are mentioned in-MOA
20. Question based on types non fund based credit facility21. No of parties in indeminity-2
22. A lost FD and asking bank to reissue duplicate bank issues it- what is the role of A
here?-indemnifier
23. Right of indemnity holder related one question
24. Types of bank guarantee based one question
25. Liability of a bank to honor BG
26. What does negotiating bank does?
27. Question related to with recourse and without recourse lc
28. DPG-deffered payment guarantee based question
29. One case study was given with relation to simple mortgage and equitable mortgageratio
of share on default was asked
30. Types of mortgage with examples, gold loan, car lone, home loan, lic policy arrange
it
31. What is fixed charge
32. Registration of charge-central registry
33. Banking ombudsman:
a. Matters where complain ts can be made
b. If not satisfied with BO then to whom w e should approach
34. Effects of non-registered company
35. DRT AND DRAT based question:
a. who is higher authority of drat
b. power to modify drt-central go vt
c. case related where only it can be handled by DRT
d. Property is somewhere loan is taken from another place where drt has to be
approached?
36. SARFAESI ACT based question:
a. Validity
b. Security interest
c. Security receipts
d. Cancellation of re gistration of SRC
e. Powers and its applicability , enfor cement of security interest
37. A guarantees OD for his son that it will be paid- which type of financing it is?
38. Bankers book evidence-prima facie related question
39. Consumer complaints
40. Who is the head of state consumer protection council-minister in charge of the
consumer affair?
41. Question related to tds and TAN NUMBER
42. CONDITION of contract
43. Liability of surety
44. Bailment of goods
45. Right of unpaid seller
46. Rti applicability area
47. Supply bills related 2-3 questions
a. It is related to whom
b. To whom it should be financed- 2 marks
48. Hypothication
49. Pledge
50. Mortgage
51. Charge
52. Contract of sale
53. Minor account
54. Question from FEMA
55. Reverse mortgage
56. Fees of RTI
57. Term of director of bank
58. Who is regulatory authority of DRT
59. Security receipt
60. Floating charges/Fixed charge

1. Members of public and private company - Public - Min-7, Max-No Restriction. Private -
Min-2, Max-200
2. No. Of directors in public and private company - Public - 3 to 15, Private - 2 to 15
3. Interest payable by RBI on CRR - 0 %
4. Pledge hypothetican
5. What is equitabe mortgage
6. NI Act
7. RTI
8. Questions based on limitation period
9. Diff b/w partenership and company
10. Questions on mortgage and cheque
11. Heads of object of memorandum of association
12. Related equitable mortgage
13. BR act
14. Partnership accounts
15. Person appeal to drt after receiving reply from sc with in period of
16. payment and settlement system regulated by
17. About mortgage types 4 questions
18. FEMA deals with transactions of
19. Bailment & pleadge
20. Equitable morgatge
21. Lc
22. Deferred payment guarantee
23. Limitation
24. In how many days TDS file to gov
25. For cancel of lease or rent how many month notice?

1. Section 131
2. Actionable claim
3. Which one is NI
4. Equitable mortgage
5. Mortgage deed is necessary foe which mortgage
6. Which LC is called anticipatory credit
7. Members and directors of pvt and public company (2questions)
8. Which is not a company classified under liability category
9. With what memo a cheque should be returned if collected by one bank and presented
by other bank
10. When a partnership will dissolve
11. Demand notice period under SARFAESI-ACT
12. DRT is applicable for : SBI, nationalised, RRB, all
13. DRT
14. Bank Guarantees
15. Many questions on mortgages
16. Income tax act
17. Preference shares
18. LC
19. Bill of exchange
20. Agreement
21. Hypothecation
1. Clatons rule
2. Minimum directors-3&2
3 Around 8 qtns from mortgage. like english, equitable, act for mortgage etc.
4. 4 qtns from MOA & AOA of company
5. Doctine of constructive
6. Diff. partnership and company
7. Indemnity-loss of fdr
8. Hypothication
9. Ddiff. pledge and lien
10. Consumer complaint act-complainant
11. Credit card award-1 lakh
12. Common seal
13. Green letter of credit
14. Negotiating bank
15. Surity is -secondary
16. Deffered guaranty
17. DRAT head post
18. Chq alteration not visible to naked eyes bank not liable
19. SARFAESI Act apeal to drt in how many days 45
20. LC credit related question credit allow something like that ans green lc
21. BO related complain how many days to dispose by BO.
22. RTI how many days to required by the PIO to settle the information.
23. Not registerd partnership firm related question can sue or not.
24. Min No of director in public and private
25. Arbitrage

Under which section of income tax donations come? - 80G of the Income Tax Act
Min and max no of member in private companies - 2 & 200
No. of members in public limited co (Min & Max) - 7 & unlimited
Banking ombudsman applicable - in whole india
Indemnity which type of liability? - Contingent.
Who can rectify the clerical or arithmetical errors in order passed by DRT? - Presiding
officer
Which income doesn't come under service tax? - Interest income
Within how many days can a consumer file complaint if he is not satisfied with the
service? - 30 Days
Which is the negotiating bank in case of LC? - Exportrs country bank
Relationship between bank n customer in case of pledge - pawnor-pawnee'
Debt recovery tribunal established by - Government of India under an Act of Parliament
(Act 51 of 1993)
How many types of LC ? - 8
Jurisdiction of appellate tribunal - The Central Government is also empowered to decide
and specify the areas within which the tribunal may exercise jurisdiction for entertaining
and deciding the applications filed before it.
DRT applicable - Above 10 Lakhs
DRT is controlled by - Recovery of Debts Due to Banks and Financial Institutions Act
(RDDBFI Act), 1993
RTI is not applicable to - J&K
UCPDC 600 is in respect of - Letters of credit
Pay as you earn is a...... tax - is a withholding tax on income payments to employees
20% profits should maintain with rbi - NBFC
NI act application - Whole India
Cersai time limit - within 30 days of creation of mortgage
Bills payable on demand are - paid when the payee asks for it.
Term of every member in national commission - 5 years or up to the age of seventy
years, which ever is earlie

A securitization company carries out the function of - Acquisition of financial asset from
the originator
Limitation period of for takng immovable property under sarfaesi? - 12 Years
Amount of TDS should be submitted before how many days? - 7th of the next month
Number of directors of private company? - 2 to 15 (Min & Max)
Casual vacancies of directors can be filled by? - the Board of Directors at a meeting of
the Board
Collecting bank will get safety under NI act for what - Forged sign of endroser
Which is not consider as NI - Share
Tax dedcuted from salary has to be payed as on - Monthly basis
Limitation perod for foreclosure is - 30 Years
Llimitation perod for possession of immovable property is - 12 years
Banking regulation act 1949 - Regulates banking

Banking ombudsman 4 questions
DRT appllete is headed by ........appointed by central govt.
LC 3 questions case study 1
Advising banking is called......
Whether advising bank is to take part in liability of LC
Macmillan book back questions 5-6 - Average 3-5 questions coming
Key used to create digital signature.....Private key
RTI Act .....Getting info from.....Public authorities
Exemption of RTI Act
Bankers book evidence 2 questions one from Macmillan book
How much we have to pay to get copy from the abovesaid paper n copies...
Sarfaesi 3-4 questions out of one case study....
What type of charge in case of goods under manufacturing.....
Under pledge unlike mortgage....Some differences were given in the options
N deposit in bank Z with branch manager C .L is the introducer of N.N got LOD from
that bank.Who has lended to whom?
R has shares in limited company.R dies what will happen to shares.....?
In case of safe deposit vault, customer is called as....
X a customer lost the TDR and bank gave duplicate receipt receiving indemnity from
X.Here who is indemnified to whom?
Parties in a contract......
Bank guarantee 2 questions...

What is reverse mortgage
Tenure of banking ombudsman
Fee require for RTI
Mode of accepting complain by banking ombudsman
One question on arranging orders for different type of mortgage
One question on arranging orders for different type of charges
Limitations period will be extended,-on credits to ac
Material alteration of cheque without authentiaction of bearer
Bank buy a cheque from A and give advance but cheque got returned-from whom bank
will recover
A presented a cheque for clearing and went abroad, cheque got returned for financial
reason after I year. A returned and found no credit in his account and bank lost the
cheque- responsibility of bank and customer
Lmitaton period of of account
Lok adalat is conducted by....

No. of max members in pvt company - 200
........................................
Pawnor pawnee
The bailment of goods as security for payment of a debt or performance of a promise is
called "pledge". The bailor is in this case called the "pawnor". The bailee is called the
"pawnee".
............... .........................
Min deposit to appeal to DRAT - 50000
........................................
Min and max directors in public limited co -
........................................
Complaints can lodge to banking ombudsman through - Authorised Representative
........................................
Safe custody of articles.. Bailment
........................................
Clubs n societies r registered under - either under the Companies Act, 1956 or under the
Societies Registration Act or the Co-operative Societies Act
........................................
Sale notice period ie. 30 days
........................................
Authorized officer of public sector bank min designation.. Chief manager
........................................
Jurisdiction of filing suit - at place of mortgaged property situated
1.Deffered credit
2.minimum and maximum members in private company..
3.accalaration.
4.equity mortgage..
5.demand biill also called as sight bill.
6.presiding officer tunere...
7.relationship in safe locker ..bank customer.
8.relatioanaship in loan on FD..
9.pladge..
10..origanater.
11.about drt
12.3days for book evidence..
Under how many phases is cases of sarfaesi settled under civil courts?
EM is required to be done in specified town of property
Payment to minor
Right of member in a company
Fund based non fund based
Metropolitan Magistrate
Endorsement in cheque
Advantages of corporate form of enterprises
To whom the assignment notice send in case of loan taking against insurance policy
Lok adalat max compensation?
Banking ombudsman
Title deed not required to be deposited in whch type of mortgage?
Mortgage-transfer of property act
Sale of goods act

partnership
Huf law
Safe deposit locker
FEMA
3 - 4 case studies on protection to collecting banker and paying banker
Appointment of banking ombudsman , regulation of tenure of banking ombudsman
Minimum and maximum number of members in private company
2-3 questions from MoA and AoA
Object is described in MOA /AOA
Difference between partnership and company..
If a director in company wants get member of another company what needs to effect in
both companies article of Asso.
For how many years a banking company use non banking assets- 10, 11,12 or 15 years
Mutual fund transaction which kind of account in dealing foreign transaction.
RTI act not applicable which of the following
Renounce sport board
Cabinet ministry
AD bills
Floating charge
Fixed change
If a customer deposit an order cheque to A bank and A bank put a collection stamp on it
but customer take the cheque and deposit to B bank but B bank return the cheque.What
The B bank site the return reason
National commission tenure
What is the conversion?
HUF created by
Who pays money to beneficiary in LC
Appeal days in DRT
............................. ...........

E filing system in charge registration
........................................
Contract two to three questions
........................................
SARFAESI act applicability
...................................... ..
DRT Applicability
......................... ...............
Banking omb
..................... ...................
According to tax lawas income definition
........................................
Major powers of RBI
.............................. ..........
Rti act
........... .............................
Law of limited for foreclosure of mortgage
........................................
What is called judgment of Banking ombdsuman is.Award
........................................
Indemnity
security or protection against a loss or other financial burden.
security against or exemption from legal responsibility for one's actions.
........................................
Deferred payment guarantees

JAIIB PAPER 1 PPB RECOLLECTED QUESTIONS:: Very important …..

BCSBI is framed as per?
Difference between mandate or POA
Loan against shares and debentures in demat and physical form
Half duplex
CBS networking
Stages of money laundering
Cyber banking
4p of marketing
Front end processor
Dumb computer
Lic assignment
Hypothecation
Lien is implied pledge
2 Q on NPA
Death case of a partner in chq
Match pair in bank customer relation
Bank guarantee
MSME
Education loan
Daily limit of mobile banking transaction
CPU consists of
Bima yojna
Sarfaesi act
Currency issue by rbi
Problem on L C.
National payment corporation of India set up by?
Crop loan interest subvention rate? Upto which amount?
Soiled notes incentive per packet?
Safe custody relationship banker and customer?
MCLR
Education loan covered under Priority sector upto limit
Credit gurantee for education loan upto what amount
CGTSME Limit
Validity of agricultural loan
NRE NRO questions
NPCI
Multi brand
Sericulture
Gorpher related qustion
eKYC
KCC loan related qustion
Which of these control LAN traffic : Central Node, Firewall, Hub, Repeater
Validity of dpn in loan documents?
SLR
RBI has share of - central or state govt?
Market stabilisation scheme related to -sebi or RBI?
Does bank charge anything for activation of dormant charges?
What is kite flying in banking?
Minimum days for fixed deposits?
Provisioning norms for sub standard assets?
Which is a process of disaster recovery? prevention monitoring recovery or testing?
Bank should not sanction to a loan until 5 yr?
If it is in RBI defaulter list or bank declares wilfu l defaulter.
CIC can display name if loan os is 25 lakh and above? If account is doubtful or loss.
. Rbi prepare it's monetary policy with- finance minister,dy governor,ED,governor
. KCC is for -short term crop production
To buy pumpset, to meet consumption pu rposes.
Rule of Clayton's applicable in
Right to set-off or bank general lie n,particular lien.
Decline stage where-sale is stagnat and cost is fixed.
Mortgage where mortgagee promise to return if paid due amount-conditional
mortgage
Why people will prefer bank- acc to service or location
Which doesn't include in 4c-customers choice.
What improve product marketing-packaging,perishability.
A and B has former or survivor ac. A dies.legal heir of a claim.who will receive.
Basel 3 should have how many %risk weight age.-4.5%
How much % need for pan for agril advance?10%of anbc of off balance sheet items.

Directors of public company
Types of company
Doctrine of ultra vires
Punishment in money laundering
Sarfeasi act
Banking ombudsmen
Partnership
Min and max no. Of members in private company
Basel
Minor account
Lost DD which doc obtained?
Urban co op bank regultd by
Demutualisation
NSE charge
KYC
Prime minister atal pension yojana
How loan in KCC get NPA - Not paid after 2 crop session in short term. 1crop session in
long term crop session.
Cheque truncation
Payment bank
Robert lanterborns 4p & 4 cs
High attrition rate
MTC Basel III
Clayton's rule
Provisioning in prio sector
Types of mutual funds
Types of LC
Network topology
Marketing mix
Purpose of marketing and pricing
Provision for standard loan sanctioned under SME
Right to Set off
Appointment
Lien and charge
Jandhan
Minimum qualification for agri clinics
Is export credit part of priority sector
Is bill of landing negotiable instrument
What is the ombudsman within banks called
Power of attorney questions
Relational information systems
How bank use social media
Pos limit per day
Oldest net in india
Horizental merzer
Government shares in rbi
Priorty sector advances in micro enterprises
Simplex transmission
IT risk in company
Land mark in electronic fund transfer
Function of cibil
LAN connection
White Label ATM
Which is not a type of topology
Setoff of the customer who is having bad debt of some amt n having credit balance in
his deposit account at different branch
but your bank is not yet CBS operated what step need to taken
RBI can stop a branch on voilation of ?
Kisan credit card are issued to farmers for
Payment bank and small bank
About CERSAI
Open market operation
Basel 3 norms
1. Relationship in Safe custody ...... Ans - Customer - Bailor & Bank - Bailee
2. NRLM replaced ...... Ans - Swarnajayanti Gram Swarozgar Yojana (SGSY) . The
scheme was succeeded by Deen Dayal Antyodaya Yojana on 25 September 2015.
3. Mortgage is defined in which act ...... Ans - Transfer of Property Act 1882
4. RBI Nationalised in which year ...... Ans - 1949
5. Area covered under LAN generally ...... Ans - 15 0 Meters
6. Banking services in the realm of Wealth management are best delivered through ......
Ans - Face to face transaction
7. A fraud committed by a larg e number of customers on bank would basically result in
...... Ans - Reputation risk
8. KYC procedure for open ing small account has been simplified for those person not
having an officially valid document, the balance at any time should not exceeds Rs.......
and Credit should not exceeding ...... Ans - 50000, 100000
9. In case of partnership one partner died then what will ha ppen in partnership? Ans -
Partnership firm dissolved
10. Function of RBI
11. Alliance and con tract
12. NPA Problem on prov isioning
13. Cr bal limit and transaction lim it for no frill accounts
14. Settlement of deposit for nominee
15. Half-Nest - Ans - Married with you ng children
16. Pillar - II - Ans - Supervisory Review Process
17. Basel - III
18. Question f rom Minor Account
19. Assessment of working capita l
20. Credit Monitoring
21. Agri Financing
22. Product Cycle
23. Marketing
23. SHG
24. Cred it Card
25. Off Balance Sheet items
26. Mutual Funds
27. NCPI
28. KYC N orms
29. Garnishee O rder
30. Banker's Lien
31. Right to set o ff
32. Priority Sector A dvances
33. MSME
34. CD iss ued by?
35. 4c's, 4p's matc h the following
36. Monetary policy by?
37. Banks doing insuran ce bussiness under which act? Insurance Regulatory and
Development Authority Act
38. Customer bank relation match the following?
39. SHG withdrawal must be signed by?
40. You have paid rs.40000 in business h ours for a customer. The account has balance
of 200000 remaining. U received garnishee order after business hours of Rs. 250000.
What would you do?
41. BG issued by you r bank. What is your bank?
42. NPCI Was introduced by?
43. Short term agriculture lon e becomes NPA for how much time? Ans - 2 crop season
44. Which is not comes under direct agriculture advance?
45. What is the first stage in new product development?
46. Mortgage is definitely need under which Act?
47. Write appropriate ans about RBI. Ans - RBI is started Apr 1. under RBI act
48. BASEL 2 consists of ?
49. What is the second st age In Kyc?
50. CC sanctioned based on Wt Proce dure.
51. If Banks not maintain min CRR requirem ent what is the penality?
52. What are the capital market instruments?
53. A bond which will issue below the face va lue? Ans - Discount bonds
54. What are the provisions for Doubtful assets 3? Ans - Secured - 40% , Unsecured -
100%
55. A & B are joins holder of FDR. If A died then what will happen to the FDR? Ans -
The surviving holder may claim the rights over deposit.
56. BANKNET uses which switching? Ans - Packet switic hing
57. Simplex transmission. Ans - Transmitting data only in on e direction
58. Mr A who is resident of outside India. His grand parents are Indians . Then A called
as ......
59. Rev olving LC
60. Once mortga ge created it has to register with whom?
61. Loan against term deposit on the name of minor
62. Paying bank protection of NI act..
63. How much loan sanction as educat ion loan of courses in India.
64. About marketing mix and 4p's total 3 questions


MOST IMPORTANT JAIIB AFB Recollected::

1. Preference share option related voting rights were given
2. Foreign exchange dollar hkd and rupees cross currency was asked in rs
3. Eosp when it is issued or employees has buy predermined rates
4. Depreciation wdv 2 questions and sum of years 1
5. Error of principle
6. Gold loan rules for sanctioning
7. Bond volatility
8. spot rate meaning
9. Value date
10. e-commerce is?
11. Computer software is developed by?
12. Cost of sales gross profit net profit
13. Reconciliation
14. Closing stock apear-trading and balance sheat
15. Contingent liability-bank garanty
16. AS 13 relates to investment
17. Medium risk-8 years
18. SHG- kyc not required of all member
19. Sinking fund formula same as - FV anuity
20. Prepaid exp-current liability
21. Depriciation 2 qtns from wdv method and one from wtd average method
22. Outstanding salary - personal act
23. Expenses and incomes - nominal act
24. Real a/c debited-what comes in
25. Statement record all ledger balance-trial balance
26. Small account credit in a year - 1 lakh
27. Govt Company - 51% share
28. Question on kyc
29. Saving ac interest calculation....
30. Question in cash book and pass book 
31. Long term Liabilities changes
32. Effect on assets
33. No question on SI, CI and EMI
34. Question from trial Balance
35. Real account, Personal account, Nominal account
36. 1 question is that Representative personal acc is 1
37. Question on wdv depreciation method
38. 2 marks question on foreign exchange rate
39. 1 question on ESOS
40. Floating rates are called ......
41. Back office may be situated in ......
42. Long term liabilities are payable after ......
43. High Financial Leverage means ......
44. Expenditure & Income reales to ......
45. Non Voting Shares
46. Double entry system means ......
47. Vaule date
48. Residual Value
49. YTM bond is ......
50. Spot
51. Call & Short Money
52. Credit & Debit Voucher
53. Chq clearing
54. Net profit value
55. Gross profit
56. Debt equity ratio
57. Issued shared
58. Banking manual
59. Question on cross currency rate 2 marks
60. Gross profit & net profit 2 marks
61. YTM 2 marks
62. Debit in real account refers to.....
63. KYC verification for shg group members....
64. CA cannot opened by....
65. Gross profit
66. Present value
67. Cash book passbook
68. Real nominal accounts
69. Fixed n floating rate
70. Call money notice money
71. Numerical Questions on gross profit, bond value, current yield, depreciation, present
value of some amount
72. Petty cash - 3question
73. Bank reconcile-2ques
74. 2 question from prepaid expenses
75. Main function of bank
76. Gross profit
77. Present annuity
78. Proprietorship firm
79. Meaning of holding company
80. Cash flow 55000, Useful Life 5 years, IRR 15%, Cost of capital 11%. Find NPV
81. What is consolidated voucher
82. Representative personal account
83. DE ratio owen fund current ratio total assets given n find the current asset
84. Sweat equity share
85. KYC - 2 questions
86. Salvage value in depreciation method 2 questions
87. Forex arithmetic 3ques's
88. Depreciation of machinery after 2 years written down value
89. kyc risks
90. STR report
91. Risk mgmt
92. BCSBI 1 question
93. Credit bal
94. Debit bal 2ques
95. Forfeiture of shares
96. Preference share

97. Dual concept
98. Accrual concept
99. Formula of depreciation
100. Sinking value 2 ques's
101. NPV VALUE OF Firm Calculation 2 Questions
102. Debt equity ratios...
103. Depreciations on fixed value...2-3ques...
104. Depreciation on straight line (residual value) ques...
105. Company having 51% share of another company...
106. Maximum limit of transaction in small (ovd )accounts in a year....
107. Current a/c cant be opened by....options were ...pardanashin women....minor
....blind...a ccompany..
108. Sweat equity shares...
109. GAAR full form...
110. Money market mutual funds are regulated by...
111. If a person transfer a/c frm one branch to another branch den required kyc???
112. Companiesare classified on the basis of...options were
...location...capital...managemnt...incorporation etc...
113. Bond value.....
114. Insurance premium for 45 days???
115. Typs of clerical errors.....
116. Periferal devices of computer...options were...keyboard windows..
117. A Suspesious Transion report where the report ( FIU-Ind)
118. Objective PMLA
119. When a minor open self operated account
120. Deleting Drawing 2 Questions debit or credit account
121. What is bond maturity value (YTM)
122. What is coupon rate
123. Prepaid expenses or outstanding account adjustment done or not
124. Samll account time
125. Rectification of error 4-5 Questions
126. Depreciation 4-5 Questions (3 Numerical)
127. Final Account 5-6 Questions
128. Foreign exchange 3 Questions all numerical
129. YTM 3 Questions
130. Education loan - 2 Question
131. Gold loan-1 Question
132. Consolidate voucher
133. Bank General ledger
134. Ratio 3 Question
135. How to improve current ratio
136. Inventory turnover ratio

Find cost of good sale if opening is80000; purchase is 120000;direct expense 5500;

indirect expense 4000 ;closing is9000

Bond par value is 100, market rate is 12% and 15% is .....find bond price

Ravi wants 500 at every quarter for 5 year , at the rate 10%.find initial deposite

When bond price is equal to Face value.

Interest paid in advance is a type of account

In which depreciation rate of interest is constant

Car purchase by a company is which type of expense

Auditor of a bank is appointed by

In cbs branch computer is connected to the server and all server are connected to main

data centre server

In India 1$=66.56-66.74and 1 euro=1.1456-1.1765$ then relation betwn rupee and

euro

Wages for installation of machine is debited wages acct is which type of error

Find closing balance if cost of goods sold ,puchase,indirect expense, opening balance is

given - For 1year, For 3years

A company deposited 5000at the beginning of the year to puchase amachinary for

20year at the rate 10% find present value of annuity

Schedule AS6 define

Which are the peripheral related to computer

Which of the work out sourced by bank - Ans loan recovery

Which work is not done at back office

Calculation of EMI

Calculation of interest on loan

E kyc is done at periodically to which type of customer

Why Ekyc is usefull

A loan is sanctioned and disbursed 100000 but after 1 year it shows outstanding of

101000. Than what is 1000

4 questions from identifying type of error

Gold loan eligibility

Bond face value one numerical pbm

Bank reconciliation statement given passbook balance and asked cash book balance and

viceversa-2numerical question and 2 case study type question in above

Cost sales netprofit numerical pbm

Given coupon rate,rate of interest and par value asked market price.

Accounting concepts AS29

Business entity,matching concept - give situation asked to find the type of concept

Benefits of CBS

Bill drawn by A on B endorsed it to c....After due date the entries are bills

receivable,noting charges-wat could have happened?

1. WDV Depreciation> 2problems

2. Who cannot open a Current a/c>minor, illiterate, blind or unregistered society

3. Balance sheet given. Calculate gross profit and net profit

4. Capital paid by shareholders >Paid up capital

5. Calculate PV and bond price>2 problems

6. Which is not true abou Company a/c

7. Cross currency problem

8. What is Spot

9. Due date of a bill from 29june(3months)

10. Suspicious transaction report to >FI UNIT

11. closing stock apear-trading and balance sheat

12. contingent liability-bank garanty

13. AS 13

14. medium risk-8 years

15. SHG- kyc not required of all member

16. sinking fund formula same as - FV anuity

17. Prepaid exp-current liability

18 depriciation 2 qtns from wdv method and one from wtd average method

19. outstanding salary - personal act

20. expenses and incomes - nominal act

21. real a/c debited-what comes in

22. statement record all ledger balance-trial balance

23. current yeild

24. bond value

25. mehod of accepting proposal-irr, npv,payback

Limited company pvt compny

account opening of huf

huf Kyc computerised a ccounting

simple interest que

wrongly credited de bited type question 3-4

Theoretical question on IRR and NPV

maximim 10 numericals 5 of 2 marks

2 marks numerical from ratio analysis

Depricition digit sum method numeric al

Acid test ratio=........... quick ratio

person who makes Promissory not e called - debtor (buyer)

gross profit, NPV numerical

related to cbs

according stan dards

capital or revenue ex penditure

earning per share theory quest ion

Dept turn over ratio problem

Bill receivable comes under a sset or liability

Under bills of exchange, which ac Dr.

Under bills of exchange, which ac Dr.

Sales and cost of goods sold gross pro fit

Foreign exchange and cross currency cal c

cross currency u have to add premiums an d sub discount

Composite voucher

Composition, redee mable, share preferential shares

1. Who prepared Bank Reconciliation Statement?

2. Who will bear the expenses charge creation?

3.cost of mationary is RS 12 lacs, scrap value is 0; useful life is 10 yrs; then find out the

book value for the 4th year.

4. P =10000; A= 11200; r=6℅ p.a then find out time?

5. Classification of ratios?

6. Credits = assets - ?

7. P= 10000 r= 8.5℅ pa compounded quarterly; T=4 yrs then find out A=?

8. Find out current yield on bond is RS 5000/- r = 12℅ pa and market value = 4500

9. Sweat equity shares will be given to ?

Document mgnrega card on identification on a/c opening.

Back office to be establised in ......

No of digits in Adhar, min no of persons in public ltd company

adhar card..bond value..irr.npv..com interest..cash book and passbook od..nominal act

real act ..expendture

balance sheet was given and profit was asked , how deaf is calculated, ytm npv,

bcsbi..kyc year..housing loan ...slm..and wdv method .interest differential..eroor

clerical...net profit ratio.5 qus on trial bal...

virus 1)affect hardware 2) is software 3) like virus of human 4) can not affect data - 2

Present value of bond

Which r 2 types of trial balance

Writing from journal to ledger is called?

2-3 qustns from foreign exchange arithmetic

Calculate amount given to petty cashier using imprest method

Current ratio based questions

Quick ratio is another name of -------?

Depreciation problems using wdv

Straight line method and sum of digits method

……………………………………………………………………

1) bond theorem -2 question 
2) bond sum
3) quick ratio 2sum
4) current ratio 1 sum
5) depreciation 4 sum
6) NPV
7) Pay back method 
8) ARR method _1 
9) Capital budgeting 1
10) Compound interest 2 sum 
11) Bond ARR value 
12) Concept of covertism 
13) Concept of consistency 
14) Full disclosure 
15) Accounting method -3 
16) Cost method 
17) Material method
18) Matching method 
19) Small savings bank account - who all can open , look 
20) EMI
21) Coupon rate 
22) Kyc 
23) Bcbsi account 
24) Trail balance error 
25) Company types - how it vil be registered 
26) LAN WAN - networking of 27)computreconcilation in which entry is required .... In which rectification entry not require 
28) Which error affects two accounts 
29) forward point - dollar to euro, euro to rupee 3 questions

Direct simple question on EMI
Twisted but very simple question in depreciation
Ratios some questions
KYC
LAN and WAN
Computer password
Reconsiliation
3 questions from cash book pass book. In this one question is sum others are theoretical
Conversion from euro to one unit of rupee
Direct questions on forward point
2-3 questions currency conversion dollars
Quick and current ratio - 4-5 questions
Emi 5 Lakhs 12% - monthly EMI for 2 years
Deprecation 3-4 questions numerical
The value get double at 9.75% in how many years
Single sided corr - 2-3 questions
RTGS related
Computer security related
Advantage of computerisation
Balance sheet
Prepaid expenses is what ...
Personal account
One more on real account based
Loan processing - 2 questions