Very Very useful general banking MCQs

Very Very useful general banking MCQs

1. ______is a money market instrument, which enables collateralized short term borrowing through Govt. securities: Repo
Rate.
2. While issuing DD of Rs.50,000/- and above what should not be accepted: By cash
3. Call option stands for: Right to Buy but without obligation to buy.
4. ˜Call Money market refers to the market for short term funds ranging from _____: Overnight funds
5. ˜In Ultra Small Branches, a designated offi cer will visit the connected to Bank’s central server (CBS): Bank discretion.
6. ˜Maximum deposit in PPF in a FY: Rs.1,50,000
7. CRR decided by: RBI
8. ˜Public Debt Office (PDO) is an ______: Autonomous body and Investment Banker to Central Govt.
9.Clean Audit Report means : An audit report without any qualifications
10. ˜What is full form of USB: Ultra Small Branch.
11. cross selling: Offering banks products to existing customers
12. What is callable security: which can be called at any predetermined date.
13. Under Atal Pension Yojana (APY), the Central Govt will contribute 50% of total contribution or Rs 1000 whichever is lower, to
eligible subscribers account, for a period of: 5 years.
14.A bank cannot grant loan against security of which type of shares - other bank’s shares, own shares: own shares.
15.A cheque will be valid for: 3 months from date of issue
16.A DD is required to be crossed with account payee crossing if the amount of DD is: Rs 20000 and above
17.A Financial that derives its value from another financial product is called: Derivative.
18.A granted power of attorney to B for operating account of A. You receive information about death of A and simultaneously a
cheque signed by B on account of A is presented for payment. What should the Bank do?: Cheque will not be paid.
19.A minor will attain majority at the age of: 18 years
20.A private limited company must have minimum ___directors?: 2
21.After 6 months of successful transaction, which facility will be provided for accounts opened under PMJDY scheme?: Overdraft
22.Age limit in PrimeMinisters Jeeven Jyoti Bima Yojna: 18 —50
23.All scheduled commercial banks to convert their opening balance sheet as at April 1, 2013 in compliance with the IFRS.
24.An officer does not require permission of Branch Manager for: making payment of a pay order which was issued on account of
purchase of furniture by the bank.
25.Appeal against decision of Banking Ombudsman can be made to: Deputy Governor RBI.
26.Application for information under RTI Act 2005 should be disposed off within: 30 days
27. As per Atal Pension Yojana (APY), the minimum age of joining the scheme is 18 years and maximum age is and the age of
exit and start of pension would be 60 years: 40 years
28.As per Atal Pension Yojana (APY), the minimum period of contribution by the subscriber
29.As per KYC guidelines, Demand draft of how much amount cannot be issued against cash?: Rs 50,000 and above
30.As per latest change, what is the maximum PPF contribution that can be paid in a F.Y?: Rs 150,000
31.As per Official Language Policy, in Region "C", how much percentage of the Sign Boards should be in Hindi?: No specific target.
32.As per Pradhan Mantri Suraksha Bima Yojana (PMSBY) Scheme, all saving bank account holders are entitled to join the scheme in
the age between: 18 to 70 years.
33.As per RBI guidelines, Base rate is to be reviewed by bank on _______: Quarterly basis.
34.As per RBI Guidelines, the charges for closure of bank account before stipulated period should not exceed: not applicable as
banks are free to fix account closure charges
35.As per RTI Act, information is required to be given by public authority within how many days?: 30days
36.As per RTI Act, information related to life and liberty should be submitted within: 48 hrs.
37.As per section 107 and 108 of Indian Evidence Act, a person can be presumed to have died if he is missing for : 7 years
38.As per Supreme Court who cannot be a partner? HUF.
39.At present, who is the Governor of RBI?: Dr Raghuram Rajan
40.Atal Pension Yojana (APY) offers fixed amount of pension ranging between depending upon the contribution which will be based
on the age of joining the APY: Rs 1000 to Rs 5000
41.Balance lying in the account of a company. When winding up proceedings of the company started funds in the account will be at
disposal of: Official Liquidator
42.Bank Customer relation in safe custody: Bailee- Bailor.
43.Banker customer relationship in standing instruction: Agent and Principal
44.Banking Codes and Standards Board of India (BCSBI) is a – (a) subsidiary of RBI (b) Department of Ministry of Finance (c)
Department of Indian Banks Association: None of these as it is an independent and autonomous watch dog to monitor and ensure
that the Banking Codes and Standards adopted by the banks are adhered to.
45.Banks are required to maintain Minimum and maximum CRAR of: Min 9% in India. There is no maximum.
46.Banks should disclose the details of fees/remuneration received in respect of the Bancassurance business undertaken by them, in
the ‘Notes to Accounts’.
47.BCSBI is affiliated or regulated by? An independent body
48.Best indicator of country's growth?: GDP
49.Bharathi Airtel tie up with which bank regarding payment bank?: Kotak Mahindra Bank.
50.Break even point: Level of sales at which there is no profit no loss
51.Broad money is represented by: M3.
52.Business correspondent appointed by bank work as- (a) Bank dealers; (b) Agent of the Bank (c) Customer's agent; (d) RBI agents
(e) RRB Agents (f) Trustees of customer: Agents of the bank.
53.Business correspondent in bank are for banking business: Bank is the Principal and correspondent is the Agent.
54.Call money is available for: one day
55.Call option stands for: Right to Buy but without obligation to buy.
56.CAMEL rating is done by: RBI to judge the health of banks
57.Capital account convertibility means the freedom to convert to financial assets in to foreign financial assets and vice versa.
58.Capital adequacy ratio related to? : CRAR- capital fund.
59.Carbon credits relates to: environment
60.CARE STANDS FOR : CREDIT ANALYSIS & RESEARCH LTD
61.Certificate of incorporation issued by: Registrar of Companies
62.Chairman of SEBI: U K Sinha.
63.Clayton’s Rule is related to which of the following rights?: Right of Appropriation
64.Clean Audit Report means : An audit report without any qualifications
65.Contact less Debit Card has been issued by: ICICI Bank.
66.Contract of Insurance is a contract of: Indemnity.
67.Contract to perform the promise or discharge the liability of a third person in case of his default can be termed as - (a)Guarantee;
(b) Indemnity; (c) Contingency; (d) Subrogation: Guarantee.
68.Cost push inflation is due to: High cost of production
69.Counter Cyclic Buffer required as per Basel III will be made at: normal times
70.CP is issued for amount of: Rs.5.00 lac and multiples of Rs 5 lac.
71.CPPC STANDS FOR : CENTRAL PENSION PROCESSING CELL
72.Cross selling: Offering banks products to existing customers
73.CRR decided by: RBI
74.CRR is based on which act: Sec 42(1) of RBI Act
75.CRR is calculated on: net demand & time liability.
76.Current account operated by finance director of a limited compnay. Cheque signed by him presented for payment after his death:
Cheque should be paid
77.Customer day is observed by banks at what periodicity?: once in a month (15th day of every month)
78.DEATH CLAIM SETTLEMENT IN HOW MANY DAYS? : 15 DAYS
79.Delayed collection beyond abnormal period: SB Rate + 2%.
80.Distribution of Insurance products as Corporate Agents is called: Bancassurance
81.DRP: Disaster Recovery Plan
82.DSB Returns relate to: Off Site Surveillance
83.Duplicate DD to be issued in how many days?: 14 days from the date of request
84.Elasticity of Demand is least in the case of: Items of necessity.
85.Existing total No. of RRBs as on 31-03-2012: 82
86.Expand IFRS -International Financial Reporting System
87.Expand the abbreviations GAAS: Generally Accepted Auditing Standards
88.Facility for Exchange of Notes and Coins: The facility of exchange of cut/mutilated banknotes, in addition to soiled notes and issue
of good quality clean banknotes/coins, should be made available at all bank branches (including those of co-operative banks and
RRBs). This facility should be provided to all members of public without discrimination on all working days
89. FIR is required to be filed in case where the counterfeit notes found are acknowledgement is to be obtained from the concerned
police authorities: Five pieces and above.
90.First Unique Identification Card (Aadhar card) was issued in which state – Maharashtra; Sikkim; Manipur; Karnataka?:

Maharashtra ( To Ranjana Sonawne of Tembhli village in Maharashtra)
91.For counterfeit notes a consolidated report as per prescribed format to be submitted to police authorities if in a single Txn note
is: five pieces or more in one transaction and if four pieces then consolidated report through nodal office to local police station.
92.For creation of Equitable mortgage, the town for deposit of title deeds to be notified by – (a)State Govt; (b) RBI; (c) Central Govt;
(d) Bank: State Govt
93.For injection of liquidity Txn done by RBI: Repo Rate.
94.For seeking information under RTI what is not required?: Reason for seeking information not to be disclosed.
95.For Ultra Small Branches a designated officer will visit the village on a prefixed date and time every ______with laptop and will be
connected to Bank’s central server (CBS): Week
96.Forged currency note: not to be returned & should be impounded
97.Fraudulent Draft presented and paid, who is to lodge complaint: Paying banker
98.FSDC: Financial Stability and Development Council
99.Full form of FDI: Foreign Direct Investment
100. Full form of IRDAI is: Insurance Regulatory & Development Authority of India.
101. Full form of MUDRA: Micro Units Development and Refinance Agency Ltd (MUDRA)
102. Full form of NIM: Net Interest Margin
103. Full form of Nrega: National Rural Employment Guarantee
104. Full form of PRAN?: Permanent Retirement Account No
105. Funds received in Consolidated Fund of India are maintained with: RBI (Reserve Bank of India is the main banker of the
Government and other authorised Banks function as its agents while handling Government transactions).
106. General insurance works on which principle: Principle of utmost faith.
107. Gift City: Gandhi Nagar, Gujarat;
108. Govt securities are known as: Gilt edged securities
109. Govt. infused capital in 9 PSBs in the beginning of 2015 amounting to: Rs.6990 crore
110. Green revolution is related to production of : Wheat and Rice
111. Growth of people in a country is reflected in: real per capita income
112. Guidelines on having Investor Protection Funds by Stock exchanges issued by: SEBI.
113. Head Office of Asian Development Bank is located at: Manila (Philippines)
114. Head Office of International Labour Organisation is located at: Geneva
115. Head office of NABARD is located at: Mumbai (S!DBI Head Office at Lucknow)
116. How much exemption from income is allowed as per section 80 C of Income Tax Act for the financial year 2015-16?: Rs
150,000
117. Hyper inflation- when a country experiences very high and usually accelerating inflation. The general price level within a
specific economy increases rapidly as the functional or internal currency, loses its real value very quickly.
118. IBPP STANDS FOR : INTERNET BILL PRESENTATION & PAYMENT
119. ICAAP full form: Internal Capital Adequacy Assessment Process.
120. If a Garnishee Order is received by the bank in which amount to be attached is not mentioned, what should the bank do?:
Full amount to be attached
121. If there is delay in reporting to RBI by currency chest or there is double/excess reimbursement, what is the rate of
interest charged by RBI?: Bank rate+2%.
122. in 1969, the 14 Bank Nationalised. At that time the Prime Minister of India: Smt. Indira Gandhi
123. In a partnership formed under Indian Partnership Act 1932, what is the liability of a partner?: Partner is liable jointly and
severally i.e. as partner as well as in his personal capacity. Therefore, liability is unlimited
124. In which type of charge possession is with creditor and ownership is with debtor?: Pledge
125. Income Rs.1.00 lac- Tax Rs.0.10 lac, Income Rs.2.00 lacs: Tax Rs.0.30 lacs, Income Rs.0.50 lac-Tax Rs.0.03 lac-This is
example of Progressive Tax
126. Inflation in India is measured on the basis of : Wholesale Price Index
127. Insurance amt in PMJDY: Rs 1 lac.
128. Insurance sector in India is regulated by: IRDA
129. Internal audit is meant for : internal operational check ups
130. Investment Fluctuation Reserve is calculated on which type of security? Available for Sale category and Held for Trading
category.
131. Investment Fluctuation Reserve is maintained on securities classified as: "Held for Trading" and "Available for Sale '
132. Investment Fluctuation Reserve is part of which type of capital: Tier I Capital.
133. Islamic banking has the features of : Conservative banking
134. CMD of a public sector bank is appointed by: Central Govt.
135. Issue of Rs 5 coins to commemorate the occasion of "150th Birth Anniversary of Swami Vivekananda": The Government of

India has minted the above mentioned coins.
136. Issue of Rs 5 coins to commemorate the occasion of "60th year of India Government
137. Job rotation for clerical staff should be done in every ______: 6 months.
138. Kisan Vikas Patra scheme was discontinued in 2010 due to which reason?: Fraud
139. Kite flying means accommodation receipts and payments and not genuine trade transactions
140. KV Kamat has become first chairman/President of which bank?: New Development Bank (NDB) of BRICS
141. LAFAR is submitted by whom?: Statutory Auditor
142. Letter received in Hindi in Region B, answer to be given in %age: 100%
143. LFAR returns relate to: Statutory audit
144. Life Certificate of pensioners is taken in which month?: November
145. Loan should not be granted to a director of the bank against: shares of own bank ( Loan can be granted against bank’s own
deposits; insurance policy; govt security).
146. Main Objective of Infrastructure Development Corporation is : Development of infrastructure of the country.
147. Marginal standing facility rate: 7.75%
148. Maximum period for filing case with Ombudsman: 12 months from receiving reply from bank
149. May I help you counter on how much staff: 10 and above.
150. Meeting of the Official Language Committee is held: Quarterly
151. MGNREGA: Mahatma Gandhi National Rural Employment Guarantee Act
152. MIN SUBSCRIPTION IN PPF CANNOT BE LESS THAN: Rs.500/-
153. Minimum amount of CD – Rs.1. lakh
154. Minimum and Maximum amount that can be deposited in PPF account is _____: Minimum Rs. 500/- & Maximum Rs. 1.50
lacs.
155. Money market mutual funds are regulated by: RBI
156. Mutual fund Market regulated by: SEBI
157. Name of device used by Business Correspondents: Biometric device.
158. Net Interest Income is Equal to: Interest received on assets о /ŶƚĞƌĞƐƚ ƉĂLJŵĞŶƚƐ ŽŶ ůŝĂďŝůŝƟĞƐ
159. New name of Planning Commission: “National Institution for Transforming India” or “NITI”
160. NITI full form: National Institution for Transforming India (Chairman PrimeMinister; Dy Chairman Arvind Panagariya).
161. Nobel Price for Microcredit: Muhammad Yunus
162. Number of directors in a public limited company can be: between 3 to 15. For more than 15, special resolution passed by
shareholders is required
163. Payment of DD more than 20000 only by crediting to account and not in cash as per: RBI guidelines
164. PERIODICITY OF CUSTOMERMEET IN A BRANCH: MONTHLY.
165. Perpetual Non redeemable preference share is a part of: Tier -1 capital
166. Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme offers a life insurance cover of: Rupees 2 lakh
167. Premium in Prime Minister Suraksha Bima Yojana: Rs.12 per year and claim available is Rs.2 lac in case of accidental death
only.
168. Primary Deficit is Fiscal deficit?: Always less
169. Purchaser of DD cannot do the following: Stop the DD
170. Rating of Bank is carried by RBI on CAMELS criteria, what do “C” stands for? Capital Adequacy.
171. RBI at which rate purchases or rediscounts B/E or other Commercial Bks: Bank Rate (7.75%)
172. RBI can issue bank note upto: Rs 10000
173. RBI gives credit to bank on which rate: Repo rate
174. RBI Governor's main concerns in monetary Policy: Inflation and Fiscal Deficit
175. RBI has issued star series notes for replacement of wrongly printed currency notes. Currently, these notes have been
issued in the denomination of : Rs 10, Rs 20, Rs 50, Rs 100.
176. Regulator of Capital market: SEBI
177. Reporting time before 15 minutes from starting of public dealings in: Metro/urban/Semi Urban & Rural area.
178. Revaluation Reserve discounting factor to be taken to which capital: 55% & Tier II Capital.
179. Review of RBI credit and monetary policy: Bi-Monthly
180. RTI: Person seeking information need not give reason as to why he is seeking the information.
181. Sabbatical can be availed maximum: 24 months and two times in your tenure.
182. Safe custody of Articles comes under which act: Indian Contract Act
183. Safe deposit locker – maximum deposit that can be asked is: 3 year advance rent plus locker breaking charges.
184. SAFTA is related to :TRADE
185. Security officer visit for high risk branches: Once in a quarter.
186. Sensex of 30 scrips is related to: Bombay Stock Exchange (BSE)
187. Shares transferred in electronic form: Dematerialization.
188. Spread in the context of bank profit loss account means: Interest earned - interest expended
189. Statutory Audit of banks is done as per provisions of: Banking Regulation Act
190. Subordinate Debt should not be more than % of tier-I capital? 50%
191. Subordinated debt instruments together with all other instruments of Tier - II capital are to be limited to ___ of Tier I: 100%.
192. Subordinated Debt which is a component of Tier II capital, is shown in the balance sheet as a part of: Other Liabilities and
Provisions on the liability side
193. Subprime crisis means : Problem created by lending to borrowers not meeting the credit rating criteria.
194. The Branch Level Customer Service Committee may meet to study complaints/ suggestions, cases of delay, difficulties
faced / reported by customers / members of the Committee and evolve ways and means of improving customer service: at least
once a month
195. The charge levied by banks for under utilization or non utilization of sanctioned CC/OD limits is called: Commitment charge.
196. The Committee on Listing of Stock Exchanges was headed by Dr Bimal Jalan. The Committee has recommended against
listing of Stock Exchanges.
197. The country of Euro Zone facing crises is: Greece and Cyprus (latest Cyprus)
198. The liability of Introducer in case of fraud by the customer: No legal liability
199. The main source of infrastructure finance are: FDI investment, Pension funds, Insurance funds.
200. The police seeks information regarding conduct of an account being maintained in your branch in connection with some
investigation. Can the bank pass on the information? : Yes, if the information is asked by an official of the rank of incharge of Police
Station or above and in writing.
201. The present Bank Rate is: 7.75%
202. The recent committee on urban coop banks was headed by: R. Gandhi
203. Tier I capital also known as: core capital.
204. Tier II capital can be maximum up to : 100% of Tier -1 capital.
205. Total number of Banking Ombudsman in India: 15
206. Transfer of interest in specific immovable property to create security for a debt is called: Mortgage
207. Treasury bill is issued for: 91 days,182 days,364 days
208. UCBs will start TDS at source if interest on term deposit in a financial year is more than Rs.10,000/- from which date: 1st
June 2015
209. Unclaimed deposits with banks which have not been claimed for last 10 years will be transferred to: Depositor Education
and Awareness Fund.
210. Under new pension scheme- minimum subscription in a year: Rs.6000 in a year ( min 500 at one time and for max there is
no upper limit)
211. Under Pardhan Mantri Suraksha Bima Yojana (PMSBY) Scheme, the uniform premium amount of Rs plus service tax
should be applicable per annum per person: Rs 12
212. Under PMJDY Scheme announced by PrimeMinister the debit card will be issued to every account holder. The type of debit
card will be: Rupay Card;
213. Under PMJDY, what is the time limit for lodging a claim in respect of the accident as covered under accident insurance
cover:Within 90 days of accident.
214. Under Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) Scheme, the uniform premium amount of is
applicable per annum per member: Rs 330
215. Under Pradhan Mantri Jeevan Jyoti Yojana (PMJJBY) scheme, the individual is eligible to join the scheme at the age
between: 18 years to 50 years
216. UNDR NPS MINIMUM SUBSCRIPTION IN A YR : Rs.6000
217. Uniformity in Intersol Charges: Banks should follow a uniform, fair and transparent pricing policy and not discriminate
between their customers at home branch and non-home branches. Accordingly, if a particular service is provided free at home
branch the same should be available free at non home branches also. There should be no discrimination as regards intersol charges
between similar transactions done by customers at home branch and those done at non-home branches. Cash handling charges may
not be included under intersol charges
218. Upon finding the counterfeit currency note on the counter, the action of the bank should be: Impound the currency note
but credit full amount to customer. Receipt not to be issued to depositor.
219. Voting rights to an individual shareholder in Private banks not to exceed: 10 % (being increased to 26%)
220. What are the total number of digits in Aadhar Card: 12
221. What does LAF stands for_____: Liquidity Adjustment Facility.
222. What is a special purpose vehicle? A special purpose vehicle is a legal entity (usually a limited company of some type or,
trust or a limited partnership) created to fulfill narrow, specific or temporary objectives. Its operations are limited to the acquisition
and financing of specific assets.
223. What is Accrual concept: Every income or expense is taken in to account when becomes due irrespective of the fact
whether it is received or paid or not.
224. What is age limit in PMJeeven jyoti Bima yojna?: Eligible all saving accounts holder in the age of 18 to 50 years; Benefits
Rs. 2 lac on death due to any reason; Premium – Rs. 330 per annum per member.
225. What is Certificate of Incorporation?: Certificate issued by Registrar of Companies to a limited company, which is a
conclusive evidence of existence of company as a separate body corporate.
226. What is Debt securitization: Converting illiquid financial assets in to liquid marketable securities.
227. What is factoring?: Purchasing of Book debt
228. What is forfaiting?: Without recourse discounting of export bills
229. What is full form of FDI?: Foreign Direct Investment
230. What is full form of GDP?: Gross Domestic Product
231. What is full form of GST?: Goods and Service Tax
232. What is full form of IFRS?: International Financial Reporting Standards.
233. What is full form of ULIP?: Unit Linked Insurance Plan
234. What is guarantee corpus in MUDRA bank or funds allocated for MUDRA: Rs 20000 crore
235. What is Hybrid debt instrument? a) Debenture b) Bond c) Preference
shares d) Convertible Bonds.
236. What is incorrect about RTI?: Reason for seeking information to be mentioned in RTI application
237. What is meant by 'sensitivity' in economics terms? Sensitivity analysis (SA) is the study of how the variation (uncertainty) in
the output of a statistical model can be attributed to different variations in the inputs of the model. It is a technique for
systematically changing variables in a model to determine the effects of such changes
238. What is Personal Accident insurance cover for death and permanent disability due to accident in PrimeMinister Jan Dhan
Yojana (PMJDY): Rs.1.00 Lac
239. What is rate of Premium in Pradhan Mantry Suraksha Bima Yojana (PMSBY)?: Premium payable Rs. 12 per annum per
member; sum insured Death / permanent disability Rs. 2 lacs; Partial disability Rs. 1 lac.
240. What is short selling?: Selling securities by a dealer which he does not possess at the time of sale.
241. What is the age limit for coverage under Prime Minister Suraksha Bima Yojna (PMSBY): 18 years to 70 Years
242. What is the amount of insurance cover in case of PrimeMinister Jeevan Jyoti Bima Yojan (PMJJBY): Rs 2 lakh
243. What is the cut off point for reporting of Non Cooperative Borrowers – Rs.5. Crore and above.
244. What is the date for final implementation of Basel III?: 31.03.2019
245. What is the effect of Bonus Issue of Shares on Debt-equity ratio? No effect at all as neither there is a change in term liability
nor in net worth of the company.
246. What is the full form of QIP?: Qualified Institutional Placement.
247. What is the full from of GIFT city?: Gujarat International Financial Tech City.
248. What is the impact of increase in Inflation rate?: Purchasing power decreases
249. What is the initial tax exemption limit for Normal Senior Citizens i.e. aged between 60 years to less than 80 years? Rs 3 lakh
250. What is the liability of a bank in case of payment of forged cheque?: Bank is liable to drawer for having made payment
without authority as also for wrongful dishonor of another cheque due to insufficient funds.
251. What is the lock in period for deposits under PPF scheme: 15 years
252. What is the main concern of Indian Economy today?: Rising Inflation
253. What is the maximum age of Govt’s nominee on Board of Directors of a bank?: 70 years
254. What is the maximum amount for which award can be given by Banking Ombudsman in cases other than complaints
relating to credit card: Rs 10 Lac
255. What is the maximum amount of award that can be given by Banking Ombudsman in case of credit cards?: Rs 1 lakh
256. What is the meaning of delegation? Delegation means the granting of authority subordinates to operate within the
prescribed limits. It means subdivision and sub-allocation of powers to the subordinates in order to achieve effective results.
Authority can be delegated but responsibility cannot be delegated.
257. What is the meaning of financial closure? Financial Closure occurs when there is legally binding commitment of private
sponsors to mobilize funding or provide services.
258. What is the minimum paid capital required for setting up a payment bank?: Rs 100cr
259. What is the nature of business of Insurance Co: indemnifying the insured, collective sharing of risks
260. What is the objective of selling mutual fund product by a bank?: To earn non interest income
261. What is the percentage in Region A to bring training materials bilingually?: 100%
262. What is the period of 12th Five year plan :2012-2017
263. What is the Purpose of nomination? To settle claims easily and quickly in case of death of depositor
264. What is the reason for allowing appointment of a Non Banking Financial company as BC?: For increasing financial inclusion.

265. What is the relation between debenture holder and company: Creditor and debtor
266. What is the relation between purchase of a DD and Bank?: Creditor and Debtor
267. What is the relationship between bank and customer in case of Garnishee order?: Debtor and Creditor
268. What is the role of nominee in term deposit?: He is trustee of legal heirs
269. What is the Service Charge for a remittance of Rs.20,000/- to Nepal if payee not customer of NSBL: Rs 100
270. What is the stake of Central Govt., Sponsoring Bank and State Govt. in RRB capital structure: 50:35:15.
271. What is the time within which death of account holder under Prime Minister Jan Dhan Yojna (PMJDY) should be advised to
bank? 30 days
272. What is the transaction code no for DD in the MICR cheques: 16
273. What is Variable cost:Which changes with production like Raw material, wages, power etc.
274. What refers to P-Notes: Participatory Notes used by Foreign Institutional Investors for investment by overseas investors
who are not registered with SEBI.
275. What right is available to paying bank in respect of DD - stop payment, cancellation, revalidation: revalidation
276. What should the minimum holding of Government in public sector banks?: 51%
277. What was the target for opening accounts under PrimeMinister Jan Dhan Yojana which was to be achieved by 26 Jan 2015?
Initially 7.5 crore accounts which was later increased to 10 crore accounts.
278. When a bank in addition to accepting deposits and making advances, provides various other types of financial services, it is
called: Universal Banking
279. When a complainant receives copy of award from Bank Ombudsman, within how many days, he is required to give his
acceptance?: 30 days from date of receiving the copy of award.
280. When banks borrow fund for overnight, what is it called: call money
281. When does the right of a nominee start in case of deposits? On the death of all account holders.
282. When is customer day celebrated : 15th of each month
283. When letter of administration issued: When a person dies intestate.
284. When remittance done to currency chest, counting in front of bank officials will be done for denomination of: Rs.500 and
Rs.1000 notes.
285. Which company has got license to start new private sector bank in the year 2014?: Bandhan Financial Services Ltd.
286. Which describes insurance business most?: Disaster risk cover.
287. Which is example of Direct Tax: Income Tax
288. Which is not the function of ALCO?: Fixing Budgets and Targets
289. Which is the central bank of India? : Reserve Bank of India.
290. Which is the first Credit information company of India?: COL
291. Which is the largest source of liquidity in equity market? FII
292. Which of the following can not be done by the purchase of a Demand Draft – (a) Stop payment of DD; (b) Obtain duplicate
DD in case of loss; (c) Getting the DD revalidated; (d) endorse the DD: Stop payment of DD.
293. Which of the following does not come under Tier II capital? a) Capital reserves b) Undisclosed reserves c) Revaluation
reserves d) Cumulative Perpetual shares: Capital Reserves.
294. Which of the following does not have share in RRB? (a) Sponsor Bank (b) Central govt (c) State govt (d) Nabard: Nabard.
295. Which of the following has become new member of Asian Clearing Union: Maldives Monetary Authority. (Other members
are Bangladesh Bank, Royal Monetary Authority of Bhutan, Reserve Bank of India, Central Bank of the Islamic Republic of Iran,
Central Bank of Mynamar, Nepal Rashtra Bank, Central Bank of Sri Lanka, State Bank of Pakistan)
296. Which of the following is a Direct Tax - Excise duty, custom duty, service tax, VAT, gift tax: Gift Tax
297. Which of the following is an indirect tax? Sales Tax
298. Which of the following is Chairperson of NABARD: Sh. Prakash Bakshi
299. Which of the following is index of National Stock Exchange – (a) Nifty; (b) Sensex; : Nifty
300. Which of the following is the financial capital of India – Delhi, Ahmedabad, Mumbai: Mumbai
301. Which of the following will be reduced with increase in inflation? (i) Purchasing Power of money (ii) Interest rate (iii) Cannot
say (iv) CRR (v) None of these: Ans is Purchasing power of Money.
302. Which of the following-is a subsidiary of Standard & Poor? CRISIL
303. WHICH OF THE ITEMS WILL NOT BE AN ASSET IN BANKS BAL SHEET – ADVANCES/FIXED ASSET/ DEPOSITS/
: Deposits
304. Which one is not under core sector: automobile
305. Which sector has highest share in GDP of India?: Services
306. Which tax has been abolished in Budget 2015-16?: Wealth tax
307. Which type of charge to be created on Bank’s FD?: Assignment
308. While giving guarantee favouring stock exchange on behalf of brokers, minimum margin should be (a) 50 % out of which
minimum 25% should be cash margin (b) 50 % out of which minimum 20 % should be cash margin (c) 50 % out of which 10 % should

be cash margin: Ans is (a)
309. While increasing or decreasing interest rate, we often hear basis point. 100 Basis point will be equal to: 1 %.
310. Who can stop payment of a Demand Draft?: Nobody
311. Who decides Saving Bank rate: Bank- ALCO committee.
312. Who has never been Governor of RBI – (a) C Rangarajan; (b) Y V Reddy; (c) Bimal Jalan; (d) Pratip Kumar: Pratip Kumar
313. Who headed the committee appointed by RBI for financial inclusion?: Nachiket Mor (The Committee on Comprehensive
Financial Services for Small Businesses and Low Income Households)
314. Who is Drawee in case of DD - paying branch, collecting bank, issuing branch; purchaser, holder?: Paying branch of issuing
bank.
315. Who is not promoter of CIBIL: RBI....
316. Who is regulator of commodity market in India? 1)sebi 2) Ncedex 3) mcx 4) Forward Market Commission: Forward Market
Commission.
317. Who is the regulator of capital market?: SEBI
318. Who is the regulator of insurance sector?: IRDA
319. Who is the Regulator of LIC: IRDA
320. Who issue Garnishee Order: Court
321. Who was President of India before Ms Pratibha Patil: A P J Abdul Kalam
322. Who will decide Base Rate of a Bank?: Bank itself.
323. Wholesale Price Index is calculated on which basis?: Weekly basis for food inflation and monthly for aggregate inflation.
324. Why International Financial Reporting System (IFRS) should be implemented: For comparison of financials of companies
operating in two different international jurisdictions.
325. Within how many days appeal against Ombudsman can be filed?: 30 days
326. Within how many days, appeal can be made by a bank against the Award of Banking Ombudsman to the Appellate Authority
i.e. Deputy Governor RBI: 30 days from receiving the acceptance from customer
327. You need to issue a Demand draft for Rs 10,000 favouring Mr X of Chandigarh.Which one of the following will not be the
option while issuing DD – (i) Payee will be Mr X or Bearer (ii) Payee will be Mr X Chandigarh (iii) Payee will beMr X State Bank of India
A/C 31435195901: Mr X or Bearer

RISK Management Very important MCqs

RISK Management Very important MCqs

01.ALM not responsible for: achieving budgets and targets (it helps in managing liquidity risk and interest rate risk).
02.At present banks are required to maintain capital adequacy ratio of 9% and Tier II capital should not be more than Tier I. It
means that banks are required to bring Tier I capital of at least 4.5% of the risk weighted assets. With effect from which date,
banks will be required to bring Tier I capital of 6% of the risk weighted assets?: 31't March 2010.
03.Documents not stamped properly is what kind of risk?: Legal Risk
04.For calculation of capital adequacy ratio, the risk weight for Commercial Real Estate for commercial bldg is : 100%
05.For capital adequacy purposes, risk weight for personal loans is : 125%
06.Fraud – what type of risk : Operational risk
07.General Insurance works on principle of: Spreading the Risk.
08. If an Outsourcing agency does not serve properly – which type of Risk is faced by the bank?: Reputation Risk and Operational
Risk
09. Investment in perpetual bonds is risky because: the interest is not payable if the CRAR falls below the stipulated target.
10.Legal risk is part of: operational risk.
11.Loss due to inadequacy or failure of system, process, people or due to external events is called: Operational risk
12.Risk weight for claim on Banks which complies to Min CRAR requirement : Scheduled Banks 20%
13.Risk weight for exposure to Scheduled Commercial Bank that maintains CRAR as per RBI requirement: 20%
14.Sub-prime is an risk. (Operational and Credit Risk)
15.The capital adequacy ratio is computed by the following formula: Capital/Risk Weighted Assets
16.Tier 2 - general provisioning & loss reserves only up to 1.25% of total risk weighted assets.
17.Tier I should be at least 6% of Risk weighted assets and should be achieved before by all scheduled commercial banks:

31.3.2010.
18.What are the components of credit risk?: Transaction risk or default risk and portfolio risk
19.When does liquidity risk arises?: Liquidity risk arises when maturing liabilities are more than maturing assets-
20.While doing Risk Rating, an asset is downgraded from A+ rating to A rating. What type of risk is involved: Credit Risk

BASEL MCQs

BASEL
01.A subordinate debt with remaining maturity of 30 months will be taken as part of Tier II capital at a discount of: 60%
02.An exposure is called Retail Exposure as per implementation of Basel II, if it is not more than:5 crore.
03.As per Basel II, banks are required to bring capital for __risk in addition to capital for credit risk and market risk: Operational risk
04.As per BASEL III Guidelines, the Loans guaranteed by State Govt will attract Risk weight of: (i)20% (ii) 50% (iii) 100% (iv) 75% (v)
0%: 20%
05.As per BASEL III, what is the risk weight on exposure to Govt securities issued by Central Government?: 0%
06.As per Basel-II, RBI has recommended adoption of __approach for operational risk : basic indicator approach
07.BASEL Accords are related to: Capital Adequacy.
08.Basel II consists __Pillars and number 2 pillar is __ : 3 pillars, Supervisory Review is Pillar no.2
09.Basel II norms to be completed by Foreign banks and banks having foreign branches by 31,03.2008.
10.For banks which do not have overseas braches, Basel II norms have to be implemented with effect from: 31.3.09
11.For being part of Tier II capital, Rupee Denominated subordinated debts should have minimum maturity period of and maximum
maturity period of : Minimum maturity:5 years Maximum: Perpetual(no maturity prescribed
12. In Basel II, Pillar I covers which types of risks: Credit Risk, Market Risk, Operational Risk.
13.Subordinate Debts are part of: Tier-II capital
14.Supervisory Review according to which Central Bank of the country is to ensure that proper capital has been provided for risk
exposure and maintain proper system for the same is provided under?: Pillar II of Basel IL
15.The minimum capital adequacy ratio implemented in India, by RBI is __% and as per Basel II recommendations it is __ % : 9%, 8%
16.The objective of the Pillar III as per BASEL-II is ____: Market discipline through public disclosures
17.The revaluation reserves as per Balance Sheet of a bank is Rs 200 lakh. How much of it will be taken as part of Tier II capital?: Rs
90 lakh (Revaluation Reserve are taken as part of Tier II capital at 55% discount)
18.Under BASEL II, for calculating capital for Operational Risk which method is to be applied for the time being: Basic Indicator
Approach
19.Under BASEL-II, what is the RiskWeightage on the Loans and advances given to Staff of the bank secured by Mortgage /
superannuation benefits: 20%
20.Upper Tier 2 -minimum maturity is 15 years for Debt capital
21.What is the date for final implementation of Basel III? 31.03.2019.
22.Which of the following is part of Tier II Capital? (a) Statutory Reserves (b) Other disclosed reserves (c) Capital reserves from
sale of assets (d) Revaluation Reserve e)none pf these Ans is E

Current Affairs on 02.11.2018

Today's Headlines from www:

*Economic Times*

📝 50 Indian items face heat as US revokes duty-free privileges on import of 90 products

📝 Mobile manufacturing a $230 billion opportunity: Report

📝 TCS acquires London-based W12 Studios

📝 NBCC stops open transport of building material

📝 Danube Home makes India foray from Hyderabad, to invest Rs 1,400 cr over 10 years

📝 Croma gets Rs 250 cr from Tata Sons to speed up expansion

📝 Reserve Bank of India gives licence to Kirloskar Capital

📝 ONGC to draw perspective plan to integrate business

*Business Standard*

📝 Non-ETFs pull out $1 bn from India in September; GEM funds falls to 9.7%

📝 Sebi directs Sahara group, its chief Subrata Roy to refund Rs 141 bn

📝 Arvind's Q2 profit rises 18% to Rs 730 mn, revenue up 12% to Rs 30.53 bn

📝 HPCL Q2 net profit down 37% to Rs 11 bn; merger with MRPL to happen in FY20

📝 After a 25-year journey in India, Arrow aims for a wider brand footprint

📝 State Bank of India withdraws insolvency plea against Uttam Galva Steels

📝 UPI-based payments for IPOs from Jan 1, 2019 in a three-phased manner

*Financial Express*

📝 Manufacturing grows at quickest pace in 4 months

📝 Banks’ consumer durable loan portfolio falls 82% in Sept

📝 Airlines may post steepest losses in a decade: Crisil

📝 Hindustan Petroleum Corp’s Q2 net declines 37%

📝 Matrimony.com second quarter consolidated net drops 30%

📝 Sundaram Finance posts flat net profit growth at Rs 154 crore

📝 FPIs offload over Rs 1 lakh-cr funds in FY19 amid growth concerns

📝 Cabinet clears ordinance to amend Companies Act

*Mint*

📝 Govt delays imposition of retaliatory tariffs on US goods till 17 Dec

📝 Auto sales grow in single digits in October

📝 DLF Q2 profit rises thirty-fold to ₹373.21 crore

📝 Govt sells 3.18% in Coal India, to get Rs 5,300 crore

📝 GST collection crosses Rs 1 trillion in October

📝 HDFC Q2 net profit rises 25% to Rs 2,467 crore

📝 Airtel charts out a new strategy to take on Reliance Jio

📝 Mondelez set to bring global offerings to India.

Current Affairs on. 1.11.2018

Today's Headlines from www:

*Economic Times*

📝 LPG price hiked by Rs 2.94 per cylinder

📝 Tatas reach pact with ATC; to pay $320 million as 1-time settlement, sell 13% stake

📝 Reliance AMC’s net profit up 12% at Rs 114 crore

📝 LIC seeks CCI nod for IDBI Bank deal

📝 Dalmia Bharat Q2 profit falls 88%; board okays amalgamation with OCL India

📝 SoftBank arm, Essel group to jointly develop 500-mw solar park

📝 ZEE launches online platform for retail advertisers

📝 Walmart India to invest USD 500 million to open 47 more stores by 2022

*Business Standard*

📝 IL&FS submits revival plan to NCLT, proposes capital infusion, assets' sale

📝 Amid stiff competition from rivals, Mondelez unveils R&D centre in Mumbai

📝 Govt, RBI must bring in more measures to improve liquidity scenario: Ficci

📝 Strides Pharma Q2 net loss at Rs 87 million on poor operating income

📝 Wire and cable maker Polycab India files IPO papers with Sebi

📝 Canara Bank Q2 profit rises 16% to Rs 3 bn; net interest rate grows 18%

📝 Real estate investment platforms, JVs raise $6 bn to date for India: JLL

📝 TPG Growth leads $42-million equity investment in Ess Kay Fincorp

*Financial Express*

📝 Rail freight up 8.75% for most commodities

📝 Raymond’s gross debt increases 24.5% y-o-y to Rs 2,260 crore

📝 Crisil expects B&M retailers’ capex to rise 60% in 3 fiscals

📝 Cyrus Investments seeks representation in Tata Sons’ board of directors

📝 Strengthen NFRA to deal with challenges related to audit firms: Govt panel

📝 Royal Enfield takes production hit of 25,000 units due to ongoing strike

📝 PM Modi to unveil package for MSMEs, sops may include higher subsidy, PSU procurement

📝 India looks to adopt deterrent penalties in data protection law: IT Secretary

📝 Core sector growth slows down to 4-month low of 4.3pc in September

*Mint*

📝 India ease of doing business rank jumps 23 places to 77 in World Bank’s Doing Business 2019 survey

📝 Tata Motors posts Q2 loss on lean JLR sales, one-off charge

📝 L&T Q2 profit rises 23% to Rs2,230 crore, beats estimate

📝 Jet Airways gets payment delay notice from aircraft lessors

📝 Lupin Q2 profit plunges 41.5% to ₹266 crore

📝 Adani Power net profit grows 22% to Rs 387 crore in Jul-Sep quarter

📝 Vedanta Q2 profit dips 34% to Rs1,343 crore

📝 NIIF buys infra debt provider IDFC Infrastructure Finance.

Types of Endorsements:-

Types of Endorsements:-

1)     Blank Endorsements: section 16(1) it means endorser only signs his name with adding any words or directions this endorsement makes the instrument payable to bearer.

2)     Endorsement in Full: - The endorser added the name of endorsee specifically.

3)     Conditional Endorsement: Here the endorser puts some conditions for endorsee Here the binding of conditions is between endorsee and endorser only. 

4)     San recourse Endorsement: - Endorser added the words without recourse to me.

5)     Facultative Endorsement: - Where an endorser waives the condition of notice of dishonour.

6)     Endorsement on Bearer Cheque: - The endorsement on bearer cheque is meaning less as the cheque once bearer is always bear.

Crossing:-

General Crossing (Sec.123): Two parallel transverse lines on the face of instruments with or without word ‘Not negotiable’. It is direction to the paying bank that do not pay the cheque across the counter.

Special Crossing (Sec.124): In addition of general crossing the cheque bears the name of collecting bank either with or without the words ‘Not negotiable’.

Collection of cheques:-

Section 131: a banker who has in good faith and without negligence received payment for a customer of a cheque (not available for B/E and P/N) crossed generally or specially.  The present section gives protection provided following conditions are fulfilled…

a)    The bank must have acted in good faith and without negligence.

b)    Bank has received the payment as an agent for collection.

c)    Bank has collected the cheque in the duly introduced account of customer only.

d)    The cheque collected must be crossed.

Payment of cheques:-

Liability of drawee (paying banker): It is obligation of the banker to honour the cheques of a customer provided there is sufficient balance and the cheque is otherwise in order.  Section 31 of NI act provides that “The Drawee of a cheque:

a)    Must have sufficient funds in the account.

b)    Properly applicable to the payment of such cheque.

c)    Must pay the cheque when duly required to do so.

d)    In default of such payment, must compensate the drawer for any loss or damage.

Protection for paying banker in case of cheque:-

Regularity of endorsement Section 85(1): Paying banker’s liability is to ensure the regularity of the endorsement and is not concerned with genuineness of endorsement.  The genuineness of endorsement is the liability of collecting banker.  Therefore, protection is available to the paying banker in case of forged endorsements.

Payment in due course (Section-10):-

a)    In accordance with the apparent tenor of the instrument.

b)    In good faith and without negligence.

c)    To the person in possession of the instrument.

d)    Under the circumstances which do not afford a reasonable ground for believing that he is not entitled to receive the payment of the amount mentioned therein.

When bank should not pay:-

a)    The death of the drawer in case of individual’s account terminates the contractual relationship.

b)    Insane customers: in case of insanity.

c)    Insolvent drawers: The bank should stop the operation of such account as if drawer adjudged insolvent and balance in the account vested with official receiver/assignee.

d)    Countermanded by drawer: on receipt of valid stop payment instruction by the drawer.

e)    Others: when a cheque is post dated, with insufficient balance in the account, cheque is of doubtful legality, or cheque is irregular, ambiguous, materially altered or stale etc.

Dishonour of cheques (Sec. 138-147):-

The payee or holder in due course should give notice to drawer within 30 days of return of cheque with the reason “Insufficient balance” and demanding payment within 15 days of his receiving information of dishonour. Drawee can make payment within 15 days of the receipt of notice and only if he fails to do so prosecution could take place.  The complaint is to be made with in one month of the cause of action arising that is expiry of the notice period.

Punishments:

a)    Summary proceedings: fine up to Rs. 5000/- and imprisonment up to one year or both.

b)    Regular proceedings: fine up to the double the amount of cheque or imprisonment up to 2 years or both.

Security standards and best practices

Security standards and best practices
The Standard of Good Practice for Information Security, published by the Information Security Forum (ISF), is a business-focused, practical and comprehensive guide to identifying and managing information security risks in organizations and their supply chains.
The most recent edition is 2016, an update of the 2014 edition.
The 2011 Standard is the most significant update of the standard for four years. It includes information security 'hot topics' such as consumer devices, critical infrastructure, cybercrime attacks, office equipment, spreadsheets and databases and cloud computing.
The 2011 Standard is aligned with the requirements for an Information Security Management System (ISMS) set out in ISO/IEC 27000-seriesstandards, and provides wider and deeper coverage of ISO/IEC 27002 control topics, as well as cloud computing, information leakage, consumer devices and security governance.
In addition to providing a tool to enable ISO 27001 certification, the 2011 Standard provides full coverage of COBIT v4 topics, and offers substantial alignment with other relevant standards and legislation such as PCI DSS and the Sarbanes Oxley Act, to enable compliance with these standards too.
The Standard is used by Chief Information Security Officers (CISOs), information security managers, business managers, IT managers, internal and external auditors, IT service providers in organizations of all sizes.
The 2011 Standard is available free of charge to members of the ISF. Non-members are able to purchase a copy of the standard directly from the ISF.

IT Governance Standards and Best Practices
ISO/IEC 27000 family of Information Security Management Systems - This document provides an overview of ISO/IEC 27000 family of Information Security Management Systems which consists of inter-related standards and guidelines, already published or under development, and contains a number of significant structural components.
ISO 27001 - This document provides the ISO standards of the requirements for establishing, implementing, maintaining and continually improving an information security management system within the context of the organization.
ISO 27002 - This document introduces the code of practice for information security controls.
British Standard 7799 Part 3 - This set of guidelines is published by BSI Group for the information security risk management.
COBIT - The Control Objectives for Information and related Technology (COBIT) is published by the Standards Board of Information Systems Audit and Control Association (ISACA) providing a control framework for the governance and management of enterprise IT.

Insolvency and Bankruptcy Code 2016

Insolvency and Bankruptcy Code 2016::

Insolvency and Bankruptcy Code 2016 is one of the biggest economic reforms adopted by India. It is a rare example of a much-needed law which has witnessed speedy roll-out and implementation.

Being a one-stop solution which addresses all insolvencies in a time-bound and economically viable setup, the law has significantly helped India in achieving the historic 30-spot jump in the ease of doing business rankings.

The Insolvency and Bankruptcy Code, 2016 (IBC) is the bankruptcy law of India which seeks to consolidate the existing framework by creating a single law for insolvency and bankruptcy. The Insolvency and Bankruptcy Code, 2015 was introduced in Lok Sabha in December 2015. It was passed by Lok Sabha on 5 May 2016. The Code received the assent of the President of India on 28 May 2016.a Certain provisions of the Act have come into force from 5 August and 19 August 2016. The bankruptcy code is a one stop solution for resolving insolvencies which at present is a long process and does not offer an economically viable arrangement. A strong insolvency framework where the cost and the time incurred is minimized in attaining liquidation has been long overdue in India. The code will be able to protect the interests of small investors and make the process of doing business a less cumbersome process

One of the essential business supporting element is a mechanism to settle failed or bankrupt entities without causing damage to any players in the economy.  Continuation of financially non-viable businesses leads to locking of funds and physical assets. Similarly, it may lead to stress for the lender who have provided loan to the distressed business entity. For this, a bankruptcy code in the form of set of laws for the resolution of failed entities/individuals is needed. 

What is bankruptcy?

Bankruptcy is a financial condition where a firm/individual is unable to repay debts to creditors.  Under India’s Insolvency and Bankruptcy Code 2016, a bankrupt entity is a debtor who has been adjudged as bankrupt by an adjudicating authority through passing a bankruptcy order.

Need for Bankruptcy Code

In every economy, there should be a legal procedure accompanied by institutions that collectively can resolve or settle the problems of failed institutions. An early resolution with sound principles will help the related parties like banks not to suffer from the failure of the business entity to whom they have provided a loan. Similarly, the Insolvency and Bankruptcy Procedures will help to ensure confidence of banks, foreign investors, associated companies in crisis mitigation mechanism related to business entities in the country.

A situation where investable money locked for a long time in litigations is the least preferred situation for business partners and lenders.  Use of the bankruptcy procedure also may help the failing entity to resolve its problems early without going to a worst case scenario.

Insolvency and Bankruptcy Code 2016

For establishing an insolvency regulation related to entities and individuals, the Parliament has enacted Insolvency and Bankruptcy Code 2016. The Code offers a uniform, comprehensive insolvency legislation encompassing all companies, partnerships and individuals (other than financial firms). For financial firms like banks, insolvency is a much delicate issue and for this a separate resolution regime will be enacted later.

The Code provides clear, coherent and speedy process for early identification of financial distress and resolution of entities if the underlying business is found to be viable. It suggests two options – a restructuring if the firm is viable and liquidation if it is not financially viable. Resolution should be done quickly and judiciously to ensure that business is not stuck.

The new code will replace existing bankruptcy laws and cover companies, limited liability partnerships, partnership firms, other corporate persons, and individuals, and any other body specified by the Government. There are Sick Industrial Companies Act, the Recovery of Debt Due to Banks and Financial Institutions Act, and Securitization and Reconstruction of Financial Assets and Enforcement of Security Interest Act, 2002 (SARFAESI). Besides, DRTs, Lok Adalats are also dealing with bankruptcy procedures. All these will be substituted/guided by the Insolvency and Bankruptcy Code on bankruptcy matters as it consolidates/improves the existing laws. 

Features of Insolvency and Bankruptcy Code 2016

The Code specifies a timeframe — 180 days after the process is initiated, plus a 90-day extension — for resolving insolvency.

A major feature of the Code is that it creates a four pillars of institutional infrastructure for administering the bankruptcy procedure. These entities/agencies are:

Insolvency and Bankruptcy Board of India: is the regulator that will oversee the new entities.

Insolvency Professionals: will conduct the insolvency resolution process, take over the management of a company, assist creditors in the collection of relevant information, and manage the liquidation process,

Insolvency Professional Agencies: will examine and certify the insolvency professionals, and

Information Utilities: collect, collate and disseminate financial information related to debtors,

An important prerequisite for the success of the Code is the presence of sophisticated institutions and professionals who should facilitate the resolution procedure. Highly skilled insolvency professionals and matured institutions critical for making the entire process workable.

How insolvency procedures are conducted under the new law?

As per the new law, when a loan default occurs, either the borrower or the lender approaches the NCLT or DRT (Debt Recovery Tribunal) for initiating the resolution process. The Code provides two options if a firm files insolvency: first is an Insolvency Resolution Process, during which creditors assess whether the debtor’s financial position is viable for him to continue and if so, they have to search options for the rescue of the firm. The second option is liquidation.

The adjudicating authority for insolvency issues of a Company/LLP is prescribed to be the NCLT and National Company Law Appellate Tribunal (NCLAT), and for individuals and partnership firms, it is the extant DRT and Debt Recovery Appellate Tribunal (DRAT).

Next step is that creditors appoint an interim Insolvency Professional (IP) to take control of the debtor’s assets and company’s operations, collect financial information of the debtor from information utilities, and constitute the creditors’ committee.

Third step is that the committee has to then take decisions regarding insolvency resolution by a 75% majority. During the insolvency resolution period, the management of the debtor is placed in the hands of an resolution professional.

Fourth step is that once the resolution is passed; the committee has to decide on the restructuring process through either a revised repayment plan or liquidation of the assets of the company. If no decision is made, the debtor’s assets will be liquidated to repay the debt.

The final step is that the resolution plan will be sent to the tribunal for final approval, and implemented once approved.

The bankruptcy code has provisions to address cross-border insolvency through bilateral agreements with other countries.

The Code proposes shorter time duration for the completion of insolvency process. Filing for bankruptcy has to be done in three months and other procedures like filing claims and appeals are also to be done quickly. The entire process will be completed within 180 days

Workers’ interests are highly protected under the law. Here, the money due to workers and employees from the provident fund, the pension fund and gratuity fund shouldn’t be included in the estate of the bankrupt company or individual. Similarly, in case of liquidation, workers’ salaries for up to 24 months will get first priority, ahead of secured creditors.

Anyone who was declared is not allowed to hold public office, and politicians and government officials cannot hold any public office if they are declared bankrupt.

The Insolvency and Bankruptcy Code is thus a comprehensive and systemic reform, that ensures speedy solution to insolvency and bankruptcy. Such a swift procedure will help creditors considerable as well as avoid distressed firms negatively affecting the economic and financial activities. The Code is big stride for ease of doing business in India




Key Features
Insolvency Resolution : The Code outlines separate insolvency resolution processes for individuals, companies and partnership firms.The process may be initiated by either the debtor or the creditors. A maximum time limit, for completion of the insolvency resolution process,has been set for corporates and individuals. For companies, the process will have to be completed in 180 days, which may be extended by 90 days, if a majority of the creditors agree. For start ups (other than partnership firms), small companies and other companies (with asset less than Rs. 1 crore), resolution process would be completed within 90 days of initiation of request which may be extended by 45 days.

Insolvency regulator: The Code establishes the Insolvency and Bankruptcy Board of India, to oversee the insolvency proceedings in the country and regulate the entities registered under it. The Board will have 10 members, including representatives from the Ministries of Finance and Law, and the Reserve Bank of India.

Insolvency professionals: The insolvency process will be managed by licensed professionals. These professionals will also control the assets of the debtor during the insolvency process.

Bankruptcy and Insolvency Adjudicator: The Code proposes two separate tribunals to oversee the process of insolvency resolution, for individuals and companies: (i) the National Company Law Tribunal for Companies and Limited Liability Partnership firms; and (ii) the Debt Recovery Tribunal for individuals and partnerships.

The four pillars of the IBC framework
Adjudication: In the case of insolvency of companies, the adjudication authority is the National Company Law Tribunal (NCLT), while the cases involving individuals and limited liability partnerships are dealt by the Debts Recovery Tribunals (DRTs).

Insolvency Professional (IP): They play a key role in resolution, liquidation and bankruptcy processes.

Information Utilities (IU): Electronically store data about lenders.

Regulator: Insolvency Bankruptcy Board of India.

Procedure
A plea for insolvency is submitted to the adjudicating authority (NCLT in case of corporate debtors) by financial or operation creditors or the corporate debtor itself. The maximum time allowed to either accept or reject the plea is 14 days. If the plea is accepted, the tribunal has to appoint an Insolvency Resolution Professional (IRP) to draft a resolution plan within 180 days (extendable by 90 days). following which the Corporate Insolvency Resolution process is initiated by the court. For the said period, the board of directors of the company stands suspended, and the promoters do not have a say in the management of the company. The IRP, if required, can seek the support of the company’s management for day-to-day operations. if the CIRP fails in reviving the company the liquidation process is initiated.

Amendments
The Bill prohibits certain persons from submitting a resolution plan in case of defaults. These include: (i) wilful defaulters, (ii) promoters or management of the company if it has an outstanding non-performing debt for over a year, and (iii) disqualified directors, among others. Further, it bars the sale of property of a defaulter to such persons during liquidation.


Major positive recent events happened due to IBC
Vedanta recently acquired bankrupt Electrosteel Steels, which made a loan default of Rs. 10,273cr, for Rs. 5,320cr under the IBC.

Further, last month, Tata Steel bought bankrupt Bhushan Steel for Rs. 35,500cr. Bhushan Steel had a loan default of Rs. 44,478cr to banks.

The two companies were among the RBI's list of 12 corporate borrowers which account for 1/4th of Indian banking industry NPAs

Part A:
How it works in case of a company?

When a company makes a payment default of at least Rs. 1 lakh, an insolvency application can be made either by the company's creditors or debtors to the NCLT.

Then, the NCLT appoints an interim insolvency resolution professional (IRP), placing the company under a moratorium.

Upon the appointment of IRP, the board of the company gets suspended till the completion of the resolution process.


Part B:
How it works in case of a company?

IRP then creates a committee of creditors of the company, which appoints the final insolvency resolution professional (IP).

IP drafts a resolution plan which requires the approval of the committee of creditors within 180 days, with a grace period of another 90 days, and the final approval of the NCLT.

If the plan doesn't get approved in 270 days, the company goes into liquidation.

Effect

How IBC is helping ailing Indian banking industry to recover?
To avoid losing the control of their business under the IBC, promoters of as many as 2,100 companies have cleared their bank dues of Rs. 83,000cr.

By now, at least 2,434 fresh cases have been filed before NCLT and at least 2,304 other cases seeking the winding-up of companies have been transferred from various high courts.

Of these, 2,750 cases have been disposed of.


Who's paid first when a company is liquidated under IBC?
Priority Order

Who's paid first when a company is liquidated under IBC?
Under IBC, the proceeds of a liquidation are distributed in the following order of priority:

Insolvency resolution process, liquidation costs

Workmen' dues pending 24 months, secured creditors

Unpaid dues owed to employees other than workmen for 12 months

Unsecured creditors

Any amount due to the Central Government and the State Government

Any remaining debts/dues

Preference shareholders

Equity shareholders, partners
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Some More details:::

THE CODE
The Code offers a uniform, comprehensive insolvency legislation encompassing all companies, partnerships and individuals (other than financial firms). The Government is proposing a separate framework for bankruptcy resolution in failing banks and financial sector entities.

One of the fundamental features of the Code is that it allows creditors to assess the viability of a debtor as a business decision, and agree upon a plan for its revival or a speedy liquidation. The Code creates a new institutional framework, consisting of a regulator, insolvency professionals, information utilities and adjudicatory mechanisms, that will facilitate a formal and time bound insolvency resolution process and liquidation.

KEY HIGHLIGHTS
1. Corporate Debtors: Two-Stage Process
To initiate an insolvency process for corporate debtors, the default should be at least INR 100,000 (USD 1495) (which limit may be increased up to INR 10,000,000 (USD 149,500) by the Government). The Code proposes two independent stages:

Insolvency Resolution Process, during which financial creditors assess whether the debtor's business is viable to continue and the options for its rescue and revival; and

Liquidation, if the insolvency resolution process fails or financial creditors decide to wind down and distribute the assets of the debtor.

(a) The Insolvency Resolution Process (IRP)
The IRP provides a collective mechanism to lenders to deal with the overall distressed position of a corporate debtor. This is a significant departure from the existing legal framework under which the primary onus to initiate a reorganisation process lies with the debtor, and lenders may pursue distinct actions for recovery, security enforcement and debt restructuring.

The Code envisages the following steps in the IRP:

(i) Commencement of the IRP

A financial creditor (for a defaulted financial debt) or an operational creditor (for an unpaid operational debt) can initiate an IRP against a corporate debtor at the National Company Law Tribunal (NCLT).

The defaulting corporate debtor, its shareholders or employees, may also initiate voluntary insolvency proceedings.

(ii) Moratorium

The NCLT orders a moratorium on the debtor's operations for the period of the IRP. This operates as a 'calm period' during which no judicial proceedings for recovery, enforcement of security interest, sale or transfer of assets, or termination of essential contracts can take place against the debtor.

(iii) Appointment of Resolution Professional

The NCLT appoints an insolvency professional or 'Resolution Professional' to administer the IRP. The Resolution Professional's primary function is to take over the management of the corporate borrower and operate its business as a going concern under the broad directions of a committee of creditors. This is similar to the approach under the UK insolvency laws, but distinct from the "debtor in possession" approach under Chapter 11 of the US bankruptcy code. Under the US bankruptcy code, the debtor's management retains control while the bankruptcy professional only oversees the business in order to prevent asset stripping on the part of the promoters.

Therefore, the thrust of the Code is to allow a shift of control from the defaulting debtor's management to its creditors, where the creditors drive the business of the debtor with the Resolution Professional acting as their agent.

(iv) Creditors Committee and Revival Plan

The Resolution Professional identifies the financial creditors and constitutes a creditors committee. Operational creditors above a certain threshold are allowed to attend meetings of the committee but do not have voting power. Each decision of the creditors committee requires a 75% majority vote. Decisions of the creditors committee are binding on the corporate debtor and all its creditors.

The creditors committee considers proposals for the revival of the debtor and must decide whether to proceed with a revival plan or liquidation within a period of 180 days (subject to a one-time extension by 90 days). Anyone can submit a revival proposal, but it must necessarily provide for payment of operational debts to the extent of the liquidation waterfall.

The Code does not elaborate on the types of revival plans that may be adopted, which may include fresh finance, sale of assets, haircuts, change of management etc.

(b) Liquidation
Under the Code, a corporate debtor may be put into liquidation in the following scenarios:

(i) A 75% majority of the creditor's committee resolves to liquidate the corporate debtor at any time during the insolvency resolution process;

(ii) The creditor's committee does not approve a resolution plan within 180 days (or within the extended 90 days);

(iii) The NCLT rejects the resolution plan submitted to it on technical grounds; or

(iv) The debtor contravenes the agreed resolution plan and an affected person makes an application to the NCLT to liquidate the corporate debtor.

Once the NCLT passes an order of liquidation, a moratorium is imposed on the pending legal proceedings against the corporate debtor, and the assets of the debtor (including the proceeds of liquidation) vest in the liquidation estate.

Priority of Claims

The Code significantly changes the priority waterfall for distribution of liquidation proceeds.

After the costs of insolvency resolution (including any interim finance), secured debt together with workmen dues for the preceding 24 months rank highest in priority. Central and state Government dues stand below the claims of secured creditors, workmen dues, employee dues and other unsecured financial creditors. Under the earlier regime, Government dues were immediately below the claims of secured creditors and workmen in order of priority.

Upon liquidation, a secured creditor may choose to realise his security and receive proceeds from the sale of the secured assets in first priority. If the secured creditor enforces his claims outside the liquidation, he must contribute any excess proceeds to the liquidation trust. Further, in case of any shortfall in recovery, the secured creditors will be junior to the unsecured creditors to the extent of the shortfall.

2. Insolvency Resolution Process for Individuals/Unlimited Partnerships
For individuals and unlimited partnerships, the Code applies in all cases where the minimum default amount is INR 1000 (USD 15) and above (the Government may later revise the minimum amount of default to a higher threshold). The Code envisages two distinct processes in case of insolvencies: automatic fresh start and insolvency resolution.

Under the automatic fresh start process, eligible debtors (basis gross income) can apply to the Debt Recovery Tribunal (DRT) for discharge from certain debts not exceeding a specified threshold, allowing them to start afresh.

The insolvency resolution process consists of preparation of a repayment plan by the debtor, for approval of creditors. If approved, the DRT passes an order binding the debtor and creditors to the repayment plan. If the plan is rejected or fails, the debtor or creditors may apply for a bankruptcy order.

3. Institutional Infrastructure
(a) The Insolvency Regulator
The Code provides for the constitution of a new insolvency regulator i.e., the Insolvency and Bankruptcy Board of India (Board). Its role includes: (i) overseeing the functioning of insolvency intermediaries i.e., insolvency professionals, insolvency professional agencies and information utilities; and (ii) regulating the insolvency process.

(b) Insolvency Resolution Professionals
The Code provides for insolvency professionals as intermediaries who would play a key role in the efficient working of the bankruptcy process. The Code contemplates insolvency professionals as a class of regulated but private professionals having minimum standards of professional and ethical conduct.

In the resolution process, the insolvency professional verifies the claims of the creditors, constitutes a creditors committee, runs the debtor's business during the moratorium period and helps the creditors in reaching a consensus for a revival plan. In liquidation, the insolvency professional acts as a liquidator and bankruptcy trustee.

(c) Information Utilities
A notable feature of the Code is the creation of information utilities to collect, collate, authenticate and disseminate financial information of debtors in centralised electronic databases. The Code requires creditors to provide financial information of debtors to multiple utilities on an ongoing basis. Such information would be available to creditors, resolution professionals, liquidators and other stakeholders in insolvency and bankruptcy proceedings. The purpose of this is to remove information asymmetry and dependency on the debtor's management for critical information that is needed to swiftly resolve insolvency.

(d) Adjudicatory authorities
The adjudicating authority for corporate insolvency and liquidation is the NCLT. Appeals from NCLT orders lie to the National Company Law Appellate Tribunal and thereafter to the Supreme Court of India. For individuals and other persons, the adjudicating authority is the DRT, appeals lie to the Debt Recovery Appellate Tribunal and thereafter to the Supreme Court.

In keeping with the broad philosophy that insolvency resolution must be commercially and professionally driven (rather than court driven), the role of adjudicating authorities is limited to ensuring due process rather than adjudicating on the merits of the insolvency resolution.

CONCLUSION
India currently ranks 136( As on 2018  now it is 100) out of 189 countries in the World Bank's index on the ease of resolving insolvencies. India's weak insolvency regime, its significant inefficiencies and systematic abuse are some of the reasons for the distressed state of credit markets in India today. The Code promises to bring about far-reaching reforms with a thrust on creditor driven insolvency resolution. It aims at early identification of financial failure and maximising the asset value of insolvent firms. The Code also has provisions to address cross border insolvency through bilateral agreements and reciprocal arrangements with other countries.

The unified regime envisages a structured and time-bound process for insolvency resolution and liquidation, which should significantly improve debt recovery rates and revitalise the ailing Indian corporate bond markets.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

Recent Economy Current Affairs Sept 2018

Recent Economy Current Affairs  Sept 2018

As per Association of Mutual Funds of India’s (AMFI) statistics, Maharashtra tops the chart for state with the maximum penetration & Assets Under Management (AUM).

As per the RBI, India's external debt declined 2.8% to USD 514.4 billion at June-end over the previous quarter on account of a decrease in commercial borrowings, short-term debt & non-resident Indian (NRI) deposits.

Economic Affairs Secretary SC Garg announced a reduction in gross borrowing estimate for the current fiscal by 70,000 crore rupees & maintained that the government will contain fiscal deficit target at 3.3%.

Department of Financial Services (DFS), Ministry of Finance & National Informatics Centre (NIC) jointly developed a mobile app called Jan Dhan Darshak as a part of financial inclusion (FI) initiative. This app will act as a guide for the common people in locating a financial service touch point at a given location in the country.

FDI in the telecom sector has jumped nearly five times in the last three years – from USD 1.3 Billion in 2015-16 to USD 6.2 Billion in 2017-18.

Global research agency Fitch has raised India’s growth forecast for the current fiscal to 7.8 per cent from the earlier 7.4 per cent.

Employees’ State Insurance Corporation (ESIC) has approved a new scheme- Atal Bimit Vyakti Kalyan Yojna for Insured Persons covered under the Employees’ State Insurance Act.

Central Board of Direct Taxes (CBDT) announced that no withholding tax will apply on interest payments made by an Indian company or a business trust to a non-resident in respect of offshore rupee-denominated bonds issued between September 17, 2018 & March 31, 2019.

Government has announced an array of steps to check the rising Current Account Deficit (CAD), & the fall in rupee. It decided on a number of steps to contain CAD, which widened to 2.4% of the GDP in the first quarter of 2018-19.

India’s overall exports (Merchandise & Services combined) in April-August 2018-19 (as per the RBI Press Release) are estimated to be USD 221.83 Billion,exhibiting a positive growth of 20.70% over the same period last year.

Indian economy grew by 8.2% in the first quarter (April-June) of the current fiscal, the highest in over two years. Manufacturing sector grew by 13.5% which signals very good turnaround in the sector.

Union Ministry of Micro, Small & Medium Enterprises (MSME) approved a proposal by the Khadi & Village Industries Commission (KVIC) to increase the wages of artisans by over 36%. With this, the wages will be increased from Rs 5.50 per hank previously to Rs 7.50 per hank.

"Certified Auditing and Accounting Professional" yesterday exam recollected

"Certified Auditing and Accounting Professional"

1. AS 21 CASE STUDY 5M
2.LFAR   CASE STUDY 5M
3.CASH flow statements 2 simple questions
4.GST plus which tax -VA7
5.1Q from MIS
6.ITEM IN SCHDULE3
7. 2 Q from BRS
8.1Q from capital and revenue expenditure
9.1Q  CAPITAL RECEIPTS
10. NPA provision related 2 q
11.3 Q from NPA types like doubt full, loss...
12.ADVANCES 5M - schedule 9
13.interest earned schdule 13
14.item in schedule 6
15.identify  which is SLR Security
16.profit on sale of investment
17.Brokarage ---Interest earned or other income?
18.assets and liabilities
19.direct tax which is incorrect
20.26QB
21.24Q,27Q, 26Q, 25Q which is incorrect

22.foresnsic audit
23.BASEL 3
24.CRAR, RWA
25.MOC
26. 15 TO 20 questions from B module of auditing in books

27.Tier 1 capital items
28.Book audit question no1 page 482
29. Book audit question no1 page 500
30.Ratio calculations
31.Book audit question no1 page 24

32.AS 7 cashflow statements

33.user of financial statements

34.stewadship accounting  page no 10

35.recognition  of income