Certified credit Professionals 60 MCQs

  Certified credit  Professionals  60 MCQs

01. Statutory corporations are controlled by which act for credit management.
a) Indian contract act
b) Company act
c) Act that created them
d) Indian partnership act
e) Indian trust act and public act
Ans: c
02. Which one of the following is not a non fund base credit?
a) Letter of credit
b) Bill discounting
c) Co-acceptance of bills
d) Forward contract
e) Derivatives
Ans: b
03. Mr. Shyam has a house in a rural village, very near to Agra. His house is very old and
required some repairing work. So, Mr. Shyam visited Agra main branch for a loan, how much
amount of loan he can avail from bank under housing finance.
a) 1 lakh
b) 2 Lakh
c) 5 Lakh
d) 10 Lakh
e) 20 Lakh
Ans: a
04. Small enterprises advance and export credit does not financed by both public sector and
PSU (export does not comes under priority sector advance) what percentage of small
enterprises advance and export credit is supposed to be given ___ and ___ respectively.
a) 40 and 32 %
b) 18 and 10%
c) 10 and 12%
d) No target and 12%
e) 10% and no target
Ans: c
05. RBI to free the landing rates of scheduled commercial banks for credit limit over ___.
a) 01 Lakh
b) 02 Lakh
c) 05 lakh
d) 10 Lakh
e) 20 Lakh
Ans: b
06. BPLR system of lending rates replaced by base rate system it was effected from ____.
a) 01 Jun 2010
b) 01 Jul 2011
c) 01 Jan 2010
d) 01 Jul 2010
e) 01 Jul 2003
Ans: d
07. No penal interest should be charged with effect from 10 Oct 2000 to borrower�s loan
under priority sector up to Rs _____.
a) 10000
b) 20000
c) 25000
d) 50000
Ans: c
08. No collateral security is required loan under MSME both manufacturing and production and
providing or rendering of services up to Rs ___.
a) 1 lakh
b) 2 lakh
c) 5 lakh
d) 10 lakh
e) 20 lakh
Ans: C
09. Which accounting standard makes it mandatory for some enterprises to prepare cash Flow
Statement for the accounting period?
a) AS-1
b) AS-3
c) AS-9
d) AS-17
Ans: b
10. Industries & business enterprises whose turnover for the accounting period exceeds Rs.
50 crore has to submit segment-wise reporting as per _____.
a) AS-3
b) AS-7
c) AS-17
d) AS-21
e) AS-22
ANS: C
11. MR. Rohit want to invest some money in XYZ co., he want to purchase some stocks of this
co. How Mr. Rohit can assess to financial statement of the XYZ co.
a) By balance sheet
b) By EPS
c) By financial statement
d) all
Ans: d (EPS- earning per Share)
12. Basic concept used in preparing of financial statements is given below pick up the odd
one.
a) Entity concept
b) Money market concept
c) Going concern concept
d) Dual aspect concept
e) Accrual concept
ANS: b
13. As per company act the maximum period of financial period is 15 months, MR Charles is
GM of ABC co. due to some contingency he is unable to prepare his Financial statement so he
want to extend his financial to another 03 months i.e. 18 months maximum period of financial
statement so MR Charles has to approach to whom for such extension.
a) Income Tex office
b) Reserve bank of India
c) Accountant general of region
d) Registrar of company
Ans: d
14. The companies Act classifies liabilities which shown on the left side of the horizontal form
pick up the odd one.
a) Share capital
b) Reserve & surplus
c) Miscellaneous expenditure
d) Secured & unsecured loans
e) Current liability & provisions
Ans: c
15. Revenue reserve represents accumulated retained earnings from the profits of normal
business operations. These are held in various forms that are given below pick up odd one
___.
a) General reserve
b) Investment allowance reserve
c) Advance payment received
d) Capital redemption reserve
e) Dividend equalization reserve
Ans: c
16. 17. Current liabilities and provisions as per classification under the co. act consist of the
following except one given below.
a) Advance payments received
b) Accrued expenses
c) Pre-paid expenses
d) Unclaimed dividend & dividends
e) Provisions for taxes
f) Gratuity and pensions
Ans: c
17. Which committee has prescribed inventory norms for various industries?
a) Narasimham committee
b) Raghawan committee
c) Tandon committee
d) Chakraborty committee
Ans: c
18. ____ % of small enterprises advances should go to micro enterprises in case of foreign
banks.
a) 20
b) 40
c) 60
d) 80
Ans: c
19. In order to avoid the problem in delay in realization of bills, bank may take advantage of
improved computer/communication network ___.
a) GUI
b) SFMS
c) ETF
d) SWIFT
ANS: b
20. Bank guarantee should normally have a maturity of more than ___.
a) 5 years
b) 10 years
c) 15 years
d) 20 years
e) 25 years
Ans: b
21. The conduct of LC business is governed by����..
a) RBI
b) IRDA
c) UCPDC 600
d) AMFA
e) GOI
Ans: c
22. What should bank do if the owner of the collateral security is someone other than the
borrower?
a) Reject the loan
b) Transfer security to the name of borrower
c) He should become first guarantor of the loan and create charge over the security
d) Security should be hypothecated to the banker
Ans: c
23. What bank should do to avoid asset-liability maturity mismatch that may arise out
extending long tenor to infrastructure projects.
a) Return on investment
b) break- even analysis
c) Liquidity support from IDFC
d) Take-out financing arrangement
e) Sensitivity analysis
Ans: d
24. Frequency of review should vary depending on the magnitude of risk for the average risk
account.
a) 01 month
b) 03 months
c) 06 Months
d) 12 Months
Ans: c
25. In case of company, the charge should be registered with ROC within ___ days from the
date of execution of documents.
a) 15 days
b) 30 days
c) 45 days
d) 2 m
Ans: b
26. What is Priority sector target of Direct & Indirect Agriculture for Domestic banks?
a) 13.5% of ANBC or Off Balance Sheet Items whichever is higher. 4.5% for Indirect Agri.
b) 10% of anbc or 6% for indirect agri
c) 12% of anbc or 4.5% for indirect agri
d) No target
Ans: a (it is 18% in total 13.5 % is direct Ans 4.5% is indirect agric)
27. What are targets and sub-targets of DRI advances?
a) 1% of total outstanding advances of previous year
b) Out of which 40% should go to SC/St
c) 2/3rd must route though Rural and Semi Urban branches
d) All of these
ANS: d
28. What are prudential norms for individuals and Groups as per RBI guidelines? Pick up odd
one.
a) Individuals Groups General 15% of Capital Funds
b) 40% of Capital Funds of borrower group
c) Infrastructure 20% of Capital Funds single borrower
d) 50% of Capital Fund to gp infrastructure project
e) Oil Companies 25% of Capital Funds
f) All correct
ANS: f
29. Monetary and Credit policy is issued by RBI how many times in a year?
a) Monetary Policy is issued annually
b) With quarterly review
c) Credit Policy twice a year
d) All of these
Ans: d
30. RBI has restricted bank to finance against/to _______________.
a) Bank�s own shares
b) Relatives of Directors and Senior Officers
c) Sensitive commodities under selective control measures
d) FDRs of other banks, CDs, Companies for buy back of shares and Industries consuming
Ozone Depleting Substance (ODS)
e) All of these
Ans: e
31. Explain Delivery of credit for WC limits of 10 crore and above.
a) CC component -20% & WCTL component-80%
b) WCTL component-80% & CC Components-20%
c) WCTL components-50% & CC Components-50%
d) CC Components-15% & WCTL components-85%
ANS: a- The proportion is not fixed but is flexible according to requirement of borrower.
32. What are provisioning norms for Standard Assets? Pick up odd one.
a) Direct SME and Direct Agriculture 0.25%
b) Others 0.40%
c) Commercial Real Estate 1%
d) Teaser Housing Loans 2%
e) None of these
Ans: e (It is Classification Rate of provision)
33. In how many years, Foreign banks with 20 branches and above in India need to achieve
PS target of 40%?
a) 2 years
b) 3 years
c) 4 years
d) 5 years
e) 7 years
Ans: d -starting from 1.4.2013 up to 1.4.2018.
34. What is ANBC?
a) Bank Credit in India + Bills Rediscounted with RBI/other approved institutions + Investment
in Non-SLR bonds under HTM category + other investments eligible to be treated as PS
b) Bank Credit in India + Investment in Non-SLR bonds under HTM category + other
investments eligible to be treated as PS
c) Bank Credit in India + Bills Rediscounted with RBI/other approved institutions + Investment
in Non-SLR bonds under HTM category
d) Bank Credit in India + Bills Rediscounted with RBI/other approved institutions + other
investments eligible to be treated as PS.
Ans: b
(Now amended) as per http://www.rbi.org.in/scripts/NotificationUser.aspx?Id=7460&Mode=0
35. Base Rate is determined in each bank by ___.
a) ALCO
b) BPLR
c) ALM
d) DSCR
e) SFMS
Ans: a (Asset Liability Management Committee)
36. The target given for advances to weaker sections in percentage of ANBC is ___.
a) 10% for domestic banks
b) 12% for foreign banks
c) No target for domestic banks
d) 10% for foreign banks
Ans: a
37. Mark the incorrect statement.
a) No target is given to domestic banks for small enterprise advances
b) No target is given for agriculture advances in for foreign banks
c) Export credit does not form a part of priority sector for domestic banks
d) Export credit does not form a part of priority sector for foreign banks
Ans: d
38. Gain on revaluation of asset is a ____.
a) General reserve
b) Investment allowance reserve
c) Capital reserve
d) Revenue reserve
Ans: c
39. Banks can file a civil suit for recovery of their dues in civil courts. This option is used for
dues ____.
a) Up to 5 lacs
b) Up to 10 lacs
c) Above 10 lacs only
d) Above 20 lacs only
Ans: c
40. What are provisioning norms for NPAs? Classification of assets Provision on Secured
Provision on Unsecured
a) Sub-Standard 15% 25%
b) Doubtful (D1) 25% 100%
c) Doubtful (D2) 40% 100%
d) Doubtful (D3) 100% 100%
e) Loss Assets 100% 100%
f) All correct
Ans: f
41. You are a loan in charge of ABC one of your a/c of personal loan in the name of Mr.
subhash is not paying his dues in time lots of reminder have been send by you for recovery ,
you have approached him for rehabilitation, he has agreed for that. What will be next step?
a) Rescheduling/restructuring
b) Legal action
c) Exit from the account
d) Compromise
e) Write off
Ans: d
42. Lok adalat (peoples� court) at present resoling issue of NPAs, the enhanced limit from
Aug 2004 is ___.
a) 5 lakh
b) 10 lakh
c) 20 lakh
d) 25 lakh
e) 25 lakh above
Ans: 20
43. Banks and FIs for expediting the recovery cases to DRTs (Debt Recovery Tribunals) for
NPAs value in excess of ___.
a) 05 lakh
b) 10 lakh
c) 20 lakh
d) 25 lakh
e) 25 lakh above
Ans: b
44. SARFAESI Act 2002 has been extended to cover co-operative banks by notitification dated
___.
a) 21 June 2002
b) 21 Jul 2002
c) 21 Jul 2010
d) 28 Jan 2003
e) 01 Jan 2003
Ans: d
45. CDR is a ____ mechanism.
a) Statutory
b) Non-statutory
c) Core
d) None of these
Ans: b (Corporate Debt Restructuring)
46. Define Small Business on the basis of annual Turnover?
Ans. Whose Annual turnover is less than 50 crore.
47. How will you define Retail Customers?
Ans. Borrowers with exposure of more than 5.00 crore
48. What is Priority sector target of Direct & Indirect Agriculture for Domestic banks?
Ans. 13.5% of ANBC or Off Balance Sheet Items whichever is higher. 4.5% for Indirect Agri.
49. What are targets and sub-targets of DRI advances?
Ans. 1% of total outstanding advances of previous year. Out of which 40% should go to SC/St
and 2/3rd must route though Rural and Semi Urban branches.
50. Priority Sector Target For Housing Loan
Ans. Housing Loan ----Rs. 25 lac for Metro stations having population 10.00 lac and above. Rs.
15 Lac for other cities.
For Repair-----------up to 2.00 (Rural and SU) and Rs. 5.00 lac (Urban and Metro)
51. Define Small and Marginal farmer.
Ans. Farmers having land up to 1 hector are Marginal Farmers and others having land up to 2
Hector are Small Farmers.
52. Define Micro, Small and medium for manufacturing and service units.
Ans. Investment in Plant and Machinery for Manufacturing Units
Investment in Equipment For Service Units
Micro Up To Rs. 25 lac Up To Rs. 10 lac
Small Up To Rs. 5.00 crore Up to Rs. 2.00 crore
Medium Up To Rs. 10.00 crore Up To Rs. 5.00 crore
53. What are provisioning norms for NPAs?
Classification of assets Provision on Secured Provision on Unsecured
Sub-Standard 15% 25%
Doubtful (D1) 25% 100%
Doubtful (D2) 40% 100%
Doubtful (D3) 100% 100%
Loss Assets 100% 100%
54. What are Prudential norms for individuals and Groups as per RBI guidelines?
Ans. Individuals Groups
General 15% of Capital Funds 40% of Capital Funds
Infrastructure 20% of Capital Funds 50% of Capital Funds
Oil Companies 25% of Capital Funds
55. How much amount of loan can be sanctioned to Agriculture and SME without Collateral?
Ans. Agriculture --------------1.00 lac
SME----------------------10.00 lac
56. Monetary and Credit policy is issued by RBI how many times in a year?
Ans. Monetary Policy is issued annually with quarterly review and credit Policy twice a year.
57. RBI has restricted bank to finance against/to _______________?
Ans.
1. Bank�s own shares
2. Relatives of Directors and Senior Officers.
3. Sensitive commodities under selective contro measures.
4. FDRs of other banks, CDs, Companies for buy back of shares and Industries consuming
Ozone Depleting Substance (ODS)
58. Explain Delivery of credit for WC limits of 10 crore and above.
Ans. CC component --------20%
WCTL component-----80%
The proportion is not fixed but is flexible according to requirement of borrower.
59. What are provisioning norms for Standard Assets?
Ans. Classification Rate of provision
Direct SME and Direct Agriculture 0.25%
Others 0.40%
Commercial Real Estate 1%
Teaser Housing Loans 2%
60. What are PS targets for Micro and Small Enterprises?
Ans. All MSE loans will be treated as PS. But sub-targets within overall MSE loans are as
under:
40% 20% 40%
Manufacturing units
having Investment in Plant and Machinery
Up to Rs. 5.00 lac
Above 5.00 up Rs. 25.00 lac
Above 25.00 lac
Service Units having Investment in Equipment
Up to Rs. 2.00 lac
Above Rs. 10.00 lac
Above Rs. 10.00 lac
61. What are PS targets for Foreign Banks having less than 20 branches in India?
Ans. Total Priority Sector 32% of ANBC or Off Balance Sheet Items (Higher)
Agriculture No specific target but forms part of Total PS
MSE units No specific target but forms part of Total PS
Export No specific target but forms part of Total PS
Weaker sector No specific target but forms part of Total PS
62. In how many years, Foreign banks with 20 branches and above in India need to achieve
PS target of 40%?
Ans. 5 years starting from 1.4.2013 up to 1.4.2018.
63. What are PS targets of weaker sector for Domestic banks and Foreign banks having 20
and above branches in India?
Ans. 10% of ANBC or Off Balance Sheet Items whichever is higher.
64. What is ANBC?
Ans. Bank Credit in India + Bills Rediscounted with RBI/other approved institutions +
Investment in non-SLR bonds under HTM category + other investments eligible to be treated
as PS.
65. Base Rate is determined in each bank by ____.
Ans. Asset Liability Management Committee (ALCO)Top of Form