50 Banking terms Updated

 FIFTY BANKING TERMS FOR BANK INTERVIEWS/EXAMS

1. Repo Rate

1.When RBI provides a loan to the bank for short-term between 1 to 90, RBI takes some interest from the bank which is termed as Repo Rate.

2. Reverse Repo Rate

⏫When bank deposit it's excess money in RBI then RBI provides some interest to that bank. This interest is known as Reverse Repo Rate.

3. SLR –(Statutory Liquidity Ratio)

⏫Every bank has to maintain a certain % of their total deposits in the form of (Gold + Cash + bonds + Securities) with themselves at the end of every business days. Current SLR is 20.75%.

4. Retail banking

⏫Retail banking is a type of banking in which direct dealing with the retail customers is done.

⏫This type of banking is also popularly known as consumer banking or personal banking.

⏫It is the visible face of banking to the general public.

5. Bitcoin

⏫Bitcoin is a virtual currency/ cryptocurrency and a payment system.

⏫It can be defined as decentralized means of tracking and assigning wealth or economy, it is a software protocol.

⏫Bitcoin uses two cryptographic keys, one public (username) and one private (password) are generated.

⏫1Bitcoin= 108 Satoshi.

6. Call money

⏫Call/Notice money is the money borrowed on demand for a very short period. When money is lent for a day it is known as Call Money.

7. Notice money

⏫When the money is borrowed or lent for more than a day up to 14 days it is called Notice Money.

8. Difference between Capital market and Money market

⏫A capital market is an organised market which provides long-term finance for business.

⏫Whereas Money market provides short-term finance for business

9. Scheduled bank

Banks which are included in 2nd Schedule of RBI Act 1934 are known as a scheduled commercial bank. These banks should fulfil two conditions:

⏫Paid up capital and collected funds should not be less than Rs.5 Lacs.

⏫Any activity of the Bank should not adversely affect the interests of the customers.

10. Non Performing Assets

⏫NPA is an asset of a bank which is not producing any income.

⏫Bank Usually classify as nonperforming assets any commercial loans which are more than 90 days overdue and any consumer loans which are more than 180 days overdue.

11. Money Inflation

⏫Money Inflation is a State in which the Value of Money is Falling and the Prices are rising, over a period of time.

12. Negative interest rate

⏫When there is less demand for loans the banks park their excess fund with the central bank by which they get an interest.

⏫Negative interest rate policy (NIRP) means that central banks will deduct money from commercial banks for depositing their money with the central bank. Commercial banks, in turn, will do the same to common people.

⏫So the end effect is that people will have to pay money to banks to hold their cash.

13. Green Banking

⏫Green banking means promoting environmentally friendly practices and reducing your carbon footprints from your banking activities.

⏫Green banking aims at improving the operations and technology along with making the clients habits environment-friendly in the banking business.

⏫It is like normal banking along with the consideration for social as well as environmental factors for protecting the environment.

14. Blockchain system

⏫These days the transactions in the banking sector are becoming a very tedious task and so as to ensure that this tedious task to be removed, our banking sector is trying to emerge towards blockchain technology.

⏫To simplify the transactions without the help of any third party in a secure manner is really a great challenge, but to overcome this challenge an anonymous online ledger (collection of financial accounts) which uses the data structure to simplify it is called blockchain technology.

15. Balloon mortgage

⏫A mortgage is a transfer of a right to stable property for the security purpose of a loan amount.

⏫Balloon mortgages are just for short term and it has fixed rate mortgage.

⏫In balloon mortgage, a monthly payment is lower because of large payment at the end of a term.

⏫A balloon payment is for the honest and qualified borrowers who have the good credit history.

16. Retail credit operations

⏫Retail Credit Operations means the sequential process which involves screening, evaluation of risk(s), and ensuring that the bank lends to a creditworthy client from the asset products applications sourced.

17. Skimming

⏫Skimming is a method used by fraudsters to capture customer's personal or account information of credit card.

⏫Customer's card is swiped through the skimmer and the information contained in the magnetic strip on the card is then read into and stored on the skimmer or an attached computer.

⏫Skimming is a tactic used predominantly for credit-card fraud, but it is also a tactic that is gaining in popularity among identity thieves.

18. Money laundering

⏫Money laundering is a process of conversion of illegal money from various sources to appear to have originated from legitimated (Legal) source.

⏫The major sources of illegal money are tax evasion, bribe, Smuggling etc.

19. Cheque

⏫Cheque is an unconditional order addressed to a banker, signed by the person who has deposited money with a banker, requesting him to pay on demand a certain sum of money only to the order of the certain person or to the bearer of the instrument.

20. Direct Debit

⏫Direct Debit is a financial activity in which one person withdraws funds from another person's bank account.

⏫It is a facility in which the payee withdraws the amount from the payer's account, the payer has instructed the bank to allow the payee directly withdraw the amount from the account.

21. Cash Credit

⏫Cash Credit is a proper limit sanctioned by the bank to the borrowing manufacturing/trading unit against the value of the raw materials, semi-finished goods and finished goods including stores.

22. Bill of Exchange

⏫A bill of exchange is a non- interest bearing written order which is used primarily in foreign trade which binds one party to pay a fixed amount of money to another party at a decided future date.

⏫A bill of exchange is signed by the creditor and accepted by a debtor.

23. Cash Reserves Ratio

⏫Every bank Maintain certain % of their total deposits with RBI in the form of Cash and Net demand & Time Liabilities.

⏫ Every Bank has to pay the amount to RBI on every 15 Days.

24. Bank Rate

⏫Bank rate is also termed as “Discount Rate”

⏫The rate through which RBI charges certain % for providing money to other banks without any security for a Long period of time for 90 Days 

25. Marginal standing facility

⏫MSF is the rate through which bank can borrow funds for Short time – Overnight basis.

26. Minimum Reserve system of RBI

⏫The current system of the Indian government to issue notes is “Minimum Reserve System”.

⏫Under this policy, the minimum reserves to be maintained in the form of gold and foreign exchange should consist of rupees 200 crores.

⏫Out this reserve, the value of gold to be maintained is rupees 115 crores.

⏫This system was introduced in 1956 replacing the proportional reserve system.

27. Clean note policy of RBI

⏫Lots of people in our country have a bad habit of writing something on the currency note, folding currency note, also somebody staple it which spoils the Note and reduces notes durability.

⏫So to avoid such occurrences RBI introduced the Clean Note Policy in 2001 in an order to increase the life of currency notes.

⏫The main objective of this Clean Note Policy is to provide good quality currency notes and coins to the citizens of our country.

28. CAMELS rating system

⏫CAMELS is a rating system developed in the US that is used by supervisory authorities to rate banks and other financial institutions.

⏫It applies to every bank in the U.S and is also used by various financial institutions outside the U.S.

Each factor is assigned a weight as follows:

⬅Capital adequacy 20 %

⬅Asset quality 20%

⬅Management 25%

⬅Earnings 15%

⬅Liquidity 10%

⬅Sensitivity 10%

29. Masala Bonds

⏫The bonds listed on the London Stock Exchange (LSE) is termed as Masala Bonds.

⏫These bonds are offered and settled in US dollar to hike Indian Rupee in International market .

⏫These bonds help to raise Indian rupees from International investors for infrastructural development in India.

⏫International Financial Corporation (IFC) converts bond from dollars into rupees and uses the rupees to finance private sector investment in India.

30. Core Banking Solutions

⏫Core Banking Solution (CBS) is networking of branches, which enables customers to operate their accounts, and avail banking services from any branch of the Bank on CBS network, regardless of where he maintains his account.

⏫The customer is no more the customer of a Branch.

⏫He becomes the Bank’s Customer.

31. Unified Payment Interface

⏫This interface will integrate the entire payment systems in India.

⏫It uses a single application programme interface with a series of Application Programme interface (API’S).

⏫The mobile devices are the primary object for all the payments.

32. Micro ATM S

⏫Micro ATMs are not any special type of ATMs

⏫It is the advanced version of Point of Sale (PoS) having an additional feature of Biometric scanning.

⏫It is also known as a mini version of ATMs.

⏫These machines are connected with the GPRS (General Packet Radio Service) mobile internet and it uses Core Banking Solution (CBS) platform to perform the different types of services.

33. Letter of Credit

⏫The letter of credit is one of the negotiable instrument.

⏫It is given by the bank, that guarantee’s buyer’s payment to the seller shall be received on time along with the proposed amount to be paid.

⏫In this instinct, if the buyer is unable to make the agreed payment to the seller, then the bank will cover the full or remaining amount of purchase.

34. Bancassurance

⏫Bancassurance is the concept of selling insurance products of insurance companies by banks.

⏫The bank acts as an agent and promotes Banca (bancassurance) products under section 6(1)(o) of the Banking Regulation Act, 1949.

⏫It was originated in Europe in the 1980s and was successful.

⏫The bancassurance business model is a globally accepted profitable business.

35. Banking Ombudsmen

⏫Banking Ombudsman is a senior official appointed by RBI.

⏫He handles and redresses customer complaints against deficiency in certain banking services.

⏫The Banking Ombudsman Scheme was introduced under Section 35 A of the Banking Regulation Act, 1949 by RBI with effect from 1995.

36. The Balance of Trade

⏫The difference of the country’s exports and the value of its imports are known as the Balance of Trade.

⏫It normally incorporates trade in services unless mentioned as the balance of merchandise trade.

⏫It includes earnings (interest, dividends, etc.) on financial assets.

37. A Balance of Payments

⏫A list that states a country’s transactions with other countries for a certain time period (generally 1 year).

⏫Payments into the country (receipts) are entered as positive numbers, called credits.

⏫Payments out of the country (payments) are entered as negative numbers called debts.

⏫A single number summarises the country’s international transactions: the balance of payments surplus.

38. NOSTRO Account

⏫A NOSTRO account is one which is maintained by an Indian Bank in the foreign countries.

39. VOSTRO Account

⏫A VOSTRO account is one which is maintained in India by a foreign bank with their corresponding bank.

40. LIBOR

⏫The full form of LIBOR is London Interbank Offered Rate.

⏫It is the interest rate at which funds are borrowed by banks in marketable size, from other banks in the London interbank market.

41. MIBOR

⏫The full form of MIBOR is Mumbai Interbank Offered Rate.

⏫It is the interest rate at which funds are borrowed by banks in marketable size, from other banks in the Mumbai interbank market.

42. CASA Account

⏫CASA stands for Current Account Savings Account.

⏫The CASA ratio displays the value of deposits maintained in a bank in the form of current and savings account deposits in the total deposit.

⏫A higher CASA ratio means the better operating efficiency of the bank.

43. RAFA Account

⏫RAFA stands for Recurring Deposit Account Fixed Deposit Account.

⏫The RAFA ratio shows how much deposit a bank has in the form of Recurring and fixed deposits.

44. DEMAT account

⏫The full form of Demat Account is Dematerialized account.

⏫This is a type of bank account for citizens in India so that they can trade in stocks or debentures which are listed in the stock market.

⏫Just as a savings account contains money saved, a demat account has stocks saved.

45. Legal Tender

⏫As per provisions of coinage Act 1996, bank notes, currency notes and coins (Re. 1 and above) are legal tender for the unlimited amount.

⏫The subsidiary coins (below Re. 1) are legal tenders for the sum not exceeding Re 1.

⏫Issue of 1, 2 and 3 paisa coins discontinued wef Sep 16, 1981.

46. Currency Chest

⏫Currency chests are operated by the Reserve Bank of India (RBI) so that they can provide good quality currency notes to the public.

⏫However, RBI has appointed commercial banks to open and monitor currency chests on behalf of RBI.

⏫The money kept in currency chests in the commercial banks is considered to be kept in RBI.

47. Insolvency

⏫An organization, a family, person, or company is declared as insolvent when they are unable to pay their debts back on time.

⏫One of the most common solutions for insolvency is bankruptcy.

48. Bankruptcy

⏫Bankruptcy is a legal declaration of person who is unable to pay off debts.

⏫In generally, Bankruptcy is of two types- Reorganization and Liquidation bankruptcy.

⏫Under the bankruptcy of reorganization, debtors should restructure their bill plans to make them more easily met.

⏫Whereas under liquidation bankruptcy, Debtors has to sell their assets to make money so that they can pay off their creditors.

49. Amortisation

⏫Amortization is a periodic payment of a debt like a loan or a mortgage.

⏫Amortization is the arrangement of a lump sum cash flow into many periodic instalments over a span of time, which is also called amortization agenda.

50. Credit Crunch

⏫A credit crunch is also known as a Credit squeeze or credit crisis.

⏫A credit crunch is a condition in which there is an immediate decline in the availability of a loan or the credit.

⏫A situation in which suddenly the credit becomes difficult to get.

⏫Sometimes it can be done by reverse actions like by strict rules and regulations to avail the fund from the financial institutions like banks, NBFCs, and many other lenders.

Very important legal

 Sole Prop: 

Rationale: There is no difference between the sole proprietary account and individual account.  Hence RBI advised banks to extend the facility of nomination to proprietary concerns also for smooth settlement of accounts.  No legal existence separate from owner.

JOINT HINDU FAMILY (HINDU UNDIVIDED FAMILY) :

A JHF can be formed for ancestral business

A JHF is governed by Hindu Succession Act

Generations : 3

All male members of the family are called as Coparceners and after the amendment of Hindu Succession Act in 2005, even the daughter of a coparcener get the status of a coparcener 

In the Mitakshara school of Thought the son/daughter acquires the right over the JHF property by birth 

In Dayabhaga the son/daughter acquires the right only after the death of his father (West Bengal)

Karta is the eldest coparcener of the family

Karta can bind the share of all the coparceners in JHF property for payment of any loan taken by him for JHF activity

Karta’s liability is unlimited whereas the coparceners’ liability is limited to the extent of their share in the JHF property

Karta can give a mandate to other coparceners (senior) to operate the bank account but not to third parties

Every  6 months confirm / authorize transaction done

Loan  request / document to be signed by all coparceners 

When the Karta dies, the next senior most coparcener will take over as Karta

A JHF cannot be a partner in a partnership firm.

If Karta becomes insolvent, stop operations on the account and await the court order. 

In case of minor coparceners, a signature of guardian is obtained on his attaining majority, fresh HUF letter is obtained.

Bank has designed JHF letter COS 38

CLUBS / ASSOCIATIONS :

Society Registration Act 1860 

Clubs and Associations need not be registered but Banks does not open account for unregistered societies.

If to be registered, then they must be registered with Registrar of Societies

Resolution, Registration Certificate & Bye-Lawsare  important documents to be obtained at the time of opening the account

Any cheque issued by the Secretary can be paid by the banker if presented even after his death

No loans can be given as these are non-trading bodies          

Nonprofit making companies(sec 25 of companies act)

Generally for promotion of Art, Literature, Religion

Govt. approval is required

TRUSTS :

Indian Trust Act 1882 mainly deals with Private Trust

A- Creator/Author/Settler

B – Grand Son / Daughter (beneficiary)

C- Trustee (X/Y/Z)

The trustee is supposed to take care of the trust even after the death of the Creator

A trust can be a Private Trust or a Public Trust which is also known as Charitable Trust

Private Trust is governed by Indian Trust Act whereasPublic Trust is governed by Public Trust  Act of the State concerned

Private Trust can be registered with Registrar of Assurances whereas a Charitable Trust can be registered with Charity Commissioner

There is no ceiling regarding the number of trustees

Trustees are acting in fiduciary capacity

A cheque drawn by a trustee can be paid even after his deathwhereas in the case of a sole trustee it is not paid after his death

Rationale: Trustee of a Trust is acting in a fiduciary capacity.  His death will not affect the trust unless he is sole Trustee.  The Banker can pay the cheques drawn by the Trustee even after his death.  If sole Trustee dies, the cheque will not be paid.  Another Trustee to be appointed by Creator / Court/  Does not affect if there is more than one Trustee.

A trustee cannot delegate his authority to third parties

Sec 190 of Contract Act – A delegate cannot further delegate

All trustees should sign the account opening form

The bank has to go as per the provisions of the trust deed

The bank should not open an account in the name of a trust unless it is clearly indicated in the title of the account

Document to identify the Trustees,Trust deed, Regn Certificate of Charity Commissioner, Resolution to open account, Authorised persons, Power to borrow are to be verified.

Trust accounts are to be scrutinized by the Branch Manager at the time of takeover of the branch and thereafter annually.

An insolvent person can act as a trustee.

In the case of a public trust (chairtable trust), a resolution passed by board of trustees has to be obtained to know the names of the trustees who will be operating the bank account and the mode of operation. It should tally with the provision in the trust deed.

PARTNERSHIP FIRMS :

Partnership act 1932

There should be minimum two partners in a firm as per Sec.4 of Partnership Act and maximum 100 as per Sec.464 of Companies Act

A partner is an agent of firm and also agent of other partners (Sec.18)

A partner has no implied authority for opening a bank account of the firm in his personal name (Sec.19)

Sec 19(1) The partner can bind the firm only if he signs for and on behalf of the firm 

Implied authority of a partner can be curtailed or enlarged by all the partners (sec 20)

Partners’ liability is joint and several(Sec.25)

A minor can be admitted to the benefits of a partnership (sec 30)with the consent of all the partners within 6 months of attaining majority.

A partner cannot continue as a partner if he becomes an insolvent (Sec.34)

Death or insolvency of a partner dissolves the partnership firm unless otherwise stated in the  partnership deed (Sec.42)

When the assets of the firm are insufficient to liquidate its liabilities, then any surplus in the individual partners’ assets after paying off their personal liabilities is brought into the firm and firm’s liabilities are paid off (Sec.49)

Registration of partnership firm is optional (Sec.58) Banks will not give loan to unregistered firms.

But an unregistered firm cannot sue its debtors (Sec.69)

Sec 59 to 61 of act rule in Clayton’s case – 1st creditwill wipe out 1st debit in the Partnership account.

Two firmscannot form a third partnership firm

But two companies can form partnership provided their MOA allows it.

A partner cannot delegate his authority to third parties without the consent of  other partners

A JHF cannot be a partner in the firm

Partnership Deed, Letter, Address proof ,Tel Bill in Firm Name & Partners, Regr. Certificate

Partnership Letter – to inform the Bank any change.Undertaking by the partners that the liability is joint and several.

Identical Firms – where partners are same

Partnership at will – Anyone can retire by giving reasonable notice

The firm is compulsorily dissolved on the happening of any of the following events

       a)  All the partners become insolvent

 b) When the business of the firm becomes unlawful

 c) When a competent court passes an order for the dissolution of the firm

COMPANIES :

One Person Company: Single Man company is different entity / concept. No compulsion on AGM. Minimum Capital 1 lac. Paid up capital up to Rs.50 lacs Turnover upto Rs.2 crores. Convert to Pvt. / Pub Ltd. if crossed.

The minimum paid-up capital of a Private limited company should be NIL and that of Public limited company should be NIL(amended in 2015).

Minimum number of shareholders for a private limited company is 2 and maximum is 200.

Minimum number of shareholders for a public limited company is 7 and there is no restriction regarding the maximum number of shareholders 

The minimum number of directors for a Private limited company should be two and for that of Public limited company should be threemaximum 15 in both cases. Max directors can be increased with prior approval from the central government.

A person can be director of 20 companies; independent director of 7.

One woman director S149(1) Paid up capital 100 crore or more & TO 300 crore or more; one director should be resident Indian.

Directors are acting in fiduciary capacity

Rationale: A company is separate legal entity and the directors are acting in fiduciary capacity.  Therefore, the death of the director will not affect the company.  Hence, Banks do not stop operations on the account of the company.

An insolvent director cannot continue as a director of the company

Borrowing powers of the company is mentioned in the Memorandum of Association whereas the borrowing powers of the directors is mentioned in Articles of Association

A company cannot be declared as an insolvent but it can be wound up

Certificate of commencement of business is issued by the ROC only after 90% of shares of the company are subscribed by the public has been withdrawn now.

Escrow Account – A collection account to be opened for collection of application money (collection of cheque and drafts) No debits allowed only credits

When the entire share capital is held by the Government, the company is called Public Sector Undertaking

If the Government is holding majority share capital of not less than 51%, it is called a Government company

Memorandum of Association contains the objects of the company, its activities, borrowing powers etc.

Articles of Association contain what the Board of Directors can do on behalf of the company to carry on the activities of the company and their borrowing powers.

Directors’ liability is limited to the extent of shares held by them in the company. Hence while  sanctioning a loan to the company, personal guarantee of the directors is obtained to make them personally liable

Death of a director does not dissolve the company. Bank need not stop operations on the account as long as the minimum number of directors as stipulated is maintained

The official liquidator is appointed by the Court when a company goes for compulsory winding up.

If the company decides to wind up voluntarily, then the board of directors appoint a liquidator after taking the approval of the shareholders in the general body meeting

A cheque drawn by a director can be paid even after his death since the director acted in fiduciary capacity. A company is defined as a separate legal entity with perpetual succession.

No separate introduction is obtained while opening an account in the name of company – because the memorandum, articles of association and certificate of incorporation provides enough documentary evidence to prove that the company has come into existence.  These documents can be accessed by the banks online in the website of the ROC.  Therefore, banks do not insist for separate third party introduction.

Board resolution is obtained at the time of opening an account in the name of company – as the resolution authorizes the company to appoint a particular banker as the banker of the company.  Further it also furnishes the name of the officials of the company who are authorized to operate the bank account together with the mode of operation.

DRT MATTERS

1. The normal cut off limit to file an application in DRT shall be Rs.  20 Laksand above

2. Where the cases before Debt Recovery Tribunal are decided, Tribunal awards Certificate of

Recovery (RC – Recovery Certificate).

3. The appeal on a DRT judgment is to be filed at Appellate Tribunal at respective centres

4. Whether already decreed accounts in various courts can be transferred to DRT YES, Where E P

amount reaches Rs. 20 Lakhs & above

5. Cases before DRT are presented by- Empanelled Advcoate

6. An appeal against the decision of DRT can be filed by customers - Before appellate tribunal (DRAT)

7. Time limit for filing application with DRT for Recovery Certificate in respect of civil court decrees

passed for less than Rs.20 lakhs 3 years from the date when the decretal amount accrues to Rs. 20

lakhs

GENERAL ASPECTS

1. Garnishee order is issued by: Any competent court

2. An income tax attachment order has been received in the name of Mr. Mishra who has an FDR

with your branch. The FDR has already matured for payment. Before payment to IT authorities -The

bank need not insist on production of FDR

3. A banker owes to his customer certain duties as implied contract out of which the most important

duty is - Duty of secrecy

4. Under Bankers Book Evidence Act, 1891 certified copies of banks books are admissible as

evidence in the court.

5. Bank A requests the Bank B for opinion on one of its customers. Bank B Will give information in

general terms disclaiming any responsibility

6. The person attesting the thumb impression/furnishes the attestation in Form No.821 must know

the language in which the loan documents are executed

7. Following documents need not be witnessed Agreement, hypothecation, Pledge etc

8. Which of the following documents need attestation? Mortgage Deed, Sale Deed, Will, Indemnity

Bond etc

9. When an advance is made to a Joint Hindu Family, the Loan documents are to be Signed by Only

the Kartha. However it is advisable to get it signed by all major members including female members

and minors to be represented by respective natural guardians.

10. Registration of documents is compulsory under Section 17 of the Registration Act in the case of

Gift, Sale Deed, Simple Mortgage etc

11. Payment of a cheque is complete: When cash is parted with

12. The Registration of a Will is: Optional

 

13. Average Clause ― in the insurance policy restricts the amount of claim in proportion to amount

of insurance and value of security.

14. Following documents can be treated as legally valid only originally typed copy of loan agreement

(not on copy/ carbon copy)

15. Legally, Bank is in order if part of the blank columns in the loan papers are filled up subsequent

to execution, if The executants put their signature authorising such filling up, after filling up

16. Stop payment instructions can be issued by Drawer

17. When cheques or bills of exchange are collected by the bank on behalf of its customer, the

relationship between them is that of A principal and an agent

18. What is the alternative if presenter of a cheque refuses to sign on its reverse? Money can be paid

after obtaining receipt on separate paper

19. A corporate customer requests the bank for returning to them the cheques drawn by them and

already paid by the bank - The cheques can be returned periodically after retaining the true copies

on record. The cost to be borne by the customer

20. Can the original cheques be returned to the drawer after payment?

YES, the bank can return the paid cheques if requested within the period for which bank is required

to preserve them

21. The banker and purchaser of a demand draft have a relationship of Seller and purchaser

22. The Banker can disclose information about the customer - When the customer expressly or

impliedly permits disclosure/when the Banker is compelled by law/when the Banks own interest is to

be protected.

23. In case of telegraphic transfer (RTGS/NEFT) of funds the relationship between the banker and

the remitter is that of Principal and agent

24. Collection of supply bills is undertaken by banks on the strength of Power of Attorney given by

supplier in favour of bank

25. Presentment of the bills received for collection to the drawees is done at - The address

mentioned in the bill/hundi

26. Whether protection is available to the bank for collection of inward bills received by it Under N I

Act NO

27. Banks keep cash in currency chest as a bailee

28. Supply bills are Not accompanied by Document of Title to Goods, are actionable claims and not

governed by N I Act

29. A suit against a common carrier for loss of or injury to goods entrusted to him for carriage

cannot be filed - Unless a written notice of such a loss is given within 6 months from the date of

notice of loss before institution of suit

30. Whether partner‘ s interest in a firm can be attached before judgment YES

31. The time limit for impleading legal heirs in a pending suit is 90 days from the notice of the date

of death

32. The Stop-Payment Instruction given by one of the two joint account holders can be lifted by:

Both of them jointly

33. The periodical interest payable on such deposits should be credited... Credited to respective loan

account, if any loan is a sanctioned against it.

34. With in how many days the rectification and compliance report of shortcomings pointed by

Labour enforcement officials during their inspection under Payment of Gratuity Act, 1972, Equal

Remuneration Act, 1976 and Payment of Bonus Act, 1965 should be sent to Deputy Chief Labour

Commissioner/Regional Lab

our Commissioner and Labour Enforcement Officer -Within 2 days by

Regd Post

SARFEASI ACT

• The act has two parts, first part stands for securitization and reconstruction of financial assets and

other part is enforcement of security interest.

• Eligible assets under the act may be enforced without intervention of court or tribunal with the laid

down procedure under the act.

• If party failed to deposit the amount, possession of charged/ secured assets is obtained from the

bank under section 13(4) of the act. Publication of possession notice in the act within 07 days is

mandatory.

• No secured creditor shall exercise any right, unless exercise of such right is agreed upon by the

secured creditors representing not less than 3/4th in value of the amount outstanding.

• If borrower restricts the bank to take physical possession of secured assets, petition is filed under

section 14 of the act to the CMM/DM praying to get the physical possession of the assets.

• No action is taken before 45 days of taking possession, as 45 days time is given under the act to

appeal against the action of the bank.

• Appeal with DRT can be filed by the party only after taking possession of the assets under section

17 of the act. Thereafter appeal can also be filed with DRAT under section 18 of the act. Civil court

does not jurisdiction to entertain any suit under provision of the act.

• Secured assets can be disposed off / sold giving 30 days notice to the parties concerned followed

by 30 days publication of sale through auction/ tender notice of these assets in the vernacular

newspaper and national daily.

• 60 days notice is served under 13(2) of SARFEASI

• Action is taken for the dues exceed Rs.1 lakh

• Agriculture Land and lease hold property can not be enforced

• Appeal is made within 45 days of possession of secured asset 

• 30 days notice is served indicating there in the sale of asset

• 30 days publication is made for auction of secured assets

• Possession of property is obtained under 13(4) SARFEASI Act

• Publication of possession of property -within 7 days from the date of possession.

• SERFEASI ACT 2002 does not apply to the following assets –

A -lien on any goods, money or security.

B -A pledge of moveable.

C – Creation of any security in any aircraft or vessel.

D – Any property that can not be attached under any other law.

E – Any security interest for securing repayment any financial asset not exceeding Rs.1 lac.

F – Any case in which the amount due is less than 20% of the principal amt.

G – Any interest created in agriculture land.

SECURITISATION & RECONSTRUCTION OF FINANCIAL ASSETS AND ENFORCEMENT OF

SECURED ASSETS ORDINANCE 2002 - SARFAESI Act - 2002

1. Is it necessary to classify the account as NPA for initiating action under the Act? YES

2. The above Act is applicable in respect of debts due to Nationalised Banks only

3. The Provisions of the Act are applicable in respect of All NPA a/cs with liability above Rs. 1 lac

4. Enforcement is not possible under this Act in respect of Time barred debts, where the present

liability is less than 20% of principal + int. &where the secured asset is an Agricultural Land

5. Whether limitation is suspended or saved while proceeding under the act? No

6. Movables seized under this Act have to be got valued by Valuer in the panel approved by the

Board of the Bank

7. When there is more than one creditor in respect of a secured asset, action under this Ordinance

can be initiated only if 75% of creditors in value agree

8. Whether advocate can issue notice under the Act? No.

9. Under SARFAESI ACT 2002 whether demand notice is required to be issued to Guarantor also?

Only when the guarantor extends his property as a security apart from his Personal guarantee

10. Can appeal under SARFAESI ACT 2002 would be made to DRT even in cases for claims less than

10 lakhs Appeal can be made with DRT in all the cases

11. For an agricultural loan, if any security other than agricultural land is taken whether it can be

enforced under the act? The Act is not applicable only where the security is agricultural land and

hence, we can enforce the securities in the referred case.

12. Can the Bank entrust the work of taking possession of securities to seizure agent? Authorised

officer alone is entitled to take possession of the property

13. Who is the authority to fix the reserve price when the assets are auctioned? Authorized officer in

consultation with the appropriate authority

14. Who can issue the sale certificate under the act? Authorised officer (SMGS IV and above)

15. Whether Banks attach salary of the borrower/guarantor under the act? No, as these are not

secured assets

16. Provisions of SARFAESI Act 2002 enables the Bank to sell their financial assets to Asset

reconstruction company AND Securitisation company

17. When Mortgaged property is a tenanted property before the mortgage whether under SARFAESI

Act Tenant can be evicted NO Bank has to evict the tenant only through eviction proceedings as per

Law covered under Indian Tenancy Act.

18. Whether the Lease/tenancy created after the Mortgage will bind the Bank No it is not binding

on the Bank

19. Whether the Mortgagor has powers to lease the property As per Sec 65A of Transfer of Property

Act the Mortgagor can lease the property but not for more than 6 months and that too the lease is

subject to mortgage

EXECUTORS / ADMINISTRATORS :

 EXECUTORS / ADMINISTRATORS :

• Executor is a person whose name is mentioned in the Will & Administrator is the person who is appointed by the Court

• Administrator is appointed when the executor refuses to execute the Will or when a person dies without leaving a Will (Intestate  death)

• Executor derives his power from the Will whereas Administrator derives his power from the Letter of Administration issued by the court and both of them cannot delegate this power to others

• Both of them are acting in a fiduciary capacity or representative capacity

ATTORNEY / AGENTS :

 ATTORNEY / AGENTS :

• A Power of Attorney executed outside India must be stamped within 3 months of its receipt in India. As per stamp act of the state concerned.

• A Power of Attorney should be unconditional

• Death, insolvency or insanity of the account holder terminates the Power of Attorney

• Minor cannot give a POA to others

• A Power of Attorney holder cannot overdraw/close/transfer the account of the Principal.  Registration of POA is optional

• Sec 201 of Indian contract act cancels the POA if POA holder dies, become insane or insolvent.

• Mandate letters do not attract stamp duty whereas Power of Attorney attracts stamp duty

Rationale: Mandate letter do not attract stamp duty because these letters are considered on as an operational instruction to the banker.  Such letters are exempted from stamp duty as per Indian stamp act.   Mandate letters should not be witnessed, otherwise it will attract stamp duty   

POA – Delegatee cannot further delegate. Sec 190 Indian Contract act. 

INSOLVENTS :

 INSOLVENTS :

Insolvency is civil death

Sec 4 of Insolvency Act 1920 – It is a state of Bankruptcy

Bankruptcy – Legal status of a person or organisation – imposed by Court order 

• An insolvent person cannot be a partner in a firm (S.34 of Partnership Act) including a sleeping partner.

• An insolvent person cannot be a director of a company (S.164 of new Companies Act)

• An insolvent person can be an agent, trustee, secretary etc 

• An un-discharged insolvent is a person who is unable to repay his liabilities

• Bank should stop operations on the joint account when one of the joint account holder becomes insolvent irrespective of mode of operation

• In the case of an insolvent, the Official Receiver will be the true owner to receive the money belonging to that person. 

If a credit is received, it should not be credited to insolvent but only to Official Receiver.

Rationale: Banks do not open account for un-discharged insolvent.  Assets of insolvent person rest with official receiver appointed by court.  Banks may have to handover the deposit to official receiver in case such an account is opened.

Liquidation: Company/Business/Firm terminated. After creditors are paid share holders get the remaining. 

PARDANASHIN LADY:

 PARDANASHIN LADY:

One who lives in exclusion of outside world; Orthodox lady. She lives in exclusion

• A contract with a pardanashin lady is voidable - Presumption of undue influence ; – free consent unavailable

Signature to be attested by husband if married

Signature to be attested by father if unmarried

• Banks do not open an account for an illiterate pardanashin lady

• It is the responsibility of banks to prove that the contract with a pardanashin lady was free from undue influence.

• Banks can open an account for literate pardanashin lady provided she completes the formalities of giving photographs and complying with KYC norms

• A pardanashin lady can be a partner in a partnership firm 

• A muslim pardanashin lady cannot be the natural guardian of a Muslim minor

• Banks do not open a current account for a pardanashin lady even if she is a literate as she may not understand the complexities of current accounts

MARRIED WOMEN :

 MARRIED WOMEN :

• Hindu married women are governed by Hindu Succession Act whereas for other religion it is Indian Succession Act / Married Women’s Property Act.

Changing name is permitted after getting evidence

She can enter into contract and enforceable against her separate estate.

Cannot be declared insolvent

• According to law, a married woman is defined as a person who has no independent of source of income and is dependent on her husband for her neccessaries of life.

• A married woman cannot be arrested or imprisoned for non-payment of a loan as per Civil Procedure Code (S.56) (1909) 

• Any loan sanctioned to a married woman for her necessaries with the consent of her husband, can be recovered from her husband

BLIND PERSONS:

 BLIND PERSONS:

• The bank can open all types of deposit accounts in the name of blind persons with single or joint operations. Cheque book facility can also be provided.

• Current account can also be opened in the name of a blind person.

Rationale: Chief Commissioner of Physically disabled - Court has given a judgement that the blind persons should be considered on par with other normal persons and all types of banking facilities should be extended to such persons. Accordingly RBI has advised all banks to provide all types of banking facilities to such persons.

Branch & ATMs : Provision of Ramps and Brailee Key Pads

ILLITERATES :

 ILLITERATES :

• An illiterate can enter into valid contracts.

• An illiterate can give a Power of Attorney to a person to operate his account.

• Banks do not open cheque book facility a/c for an illiterate only for operational difficulties. Those who do not desire should not be given ATM card.

• Banks also do not open current account for illiterates.

• Banks always take only left hand thumb impression on the withdrawal slip for an illiterate.

• Two illiterates can open a joint SB account on E or S basis.

• Such accounts are to be witnessed       

Illiterate’s Photo in Pass  Book : Ghosh Committee

JAIIB legal Minors

 MINORS :

• Under sec 3 of Majority act 1875 a person is a minor as per law if he has not attained 18 years of age.

• Also applicable in case of court appointed guardian.

• A minor cannot ratify the debt incurred by him during his minority after he attains majority.

• A contract with a minor is void ab-initio (Sec.11 of IC Act)

• The legal heirs of a minor are his natural guardians. 

Guardian appointed by Court : Legal Guardian

By will of father – Testamentary Guardian (only after death of Father and Mother)

• Supreme court judgement allows the Bank to open and operate account solely in the name of mother when father is alive. Father & Mother are natural guardians. 

• A minor cannot be a partner in the firm. He can be admitted only for the benefits (Sec.30 of partnership Act)Cannot be a director Sec 164 of Companies Act

• A minor can ratify the transactions of the firm only if he decides to become a partner of the firm.  In that case the bank has to obtain a ratification letter confirmation letter) from him to make him liable for all the activities of the firm during his minority.

• A minor cannot appoint an agent but he can be an agent (Sec.183 of IC Act) but he will not be personal liable, only the prinicpal will be liable for all the acts of the minor agent.

• Any necessaries supplied to the minor, it can be recovered out of his estate (S.68 of Indian Contract Act.

• Even if any loan is taken by the minor by misrepresenting his age, it cannot be recovered after he attains majority 

Rationale: If any loan is granted to the minor by taking a guarantee, it cannot be recovered either from the minor or from the guarantor since the guarantor’s liability exists only along with the borrower’s  liability. If the borrower is not liable, than the guarantor is also not liable.

Minor cannot nominate, however, personally authorized to act (guardian) on behalf of the minor can nominate.

• In the case of a Muslim minor, mother will not be a natural guardian. It is only the father, or executor of father’s will or father’s father or executor of father’s father’s will or court appointed guardian.

• Two minor can open a Joint SB account but to be operated jointly. No E or S account will be opened as it would amount to entering into a contract which is void.

• A minor cannot be declared insolvent. Since an insolvent is a person who cannot repay the liability as he has no assets to repay. But a minor cannot incur any liability as he is incapable of entering into contract. Hence he cannot be declared insolvent.

• Minor 10 years and above – SB / TDR account max Rs.2 lacs TDR period max 10 years – uniform signature. Banks risk. 14 years ATM classic card

• By guardian no age restriction. Consolidated balance Rs.20 lacs max. 

Pehli Udan – 10 years & above Uniform signature. Cheque leaf 10, ATM photo id card, ATM withdrawal 5,000; INB Rs.5000; MBS Rs.2000 A/c Rs.5 lacs; CIF Rs.10 lacs

Pehla Kadam – Jt. Operation or single operation by parent

Sole Name of Minor: on attaining majority formalities: a) confirm balance b) submit fresh SS/Photo; c) Declaration and Proof of majority; d) Form 60/61 or PAN card.

• Acc to Sec 26 of NI act, minor can draw, endorse or negotiate a cheque or Bill of Exchange but he cannot be held liable.  He cannot be sued. Bill is valid, other parties are liable.

Rationale : Minor cannot be declared insolvent – Insolvent is a person who is not capable of repaying his liabilities because he has no assets to repay whereas a minor cannot incur any liabilities during his minority since he is incapable of entering into contract as per sec 11 of contract act.  Hence a minor cannot be declared as an insolvent.

Rationale: Bank has to obtain rectification letter from the minor who has attained majority and has become a partner in a firm – This letter is obtained from him in order to make him liable for all the debts and liabilities incurred by the firm during his minority otherwise he may try to escape the liability of the firm incurred in the past.

Accountant Standards:-List of ICAI’s Mandatory Accounting Standards (AS 1~29)

 Updated list of accounting standards:-

AFB 

Accountant Standards:-List of ICAI’s Mandatory Accounting Standards (AS 1~29)

Download PDF copy of Mandatory Accounting Standards of ICAI (as on 1 July 2017 and onwards), as under:

Description

AS 1 Disclosure of Accounting Policies

AS 2 Valuation of Inventories (amended) *

AS 3 Cash Flow Statements

AS 4 Contingencies and Events Occurring after the Balance Sheet Date *

AS 5 Net Profit or Loss for the period,Prior Period Items and Changes in Accounting Policies

AS 6 Depreciation Accounting (withdrawn) *

AS 7 Construction Contracts (revised 2002)

AS 8 Accounting for Research and Development (withdrawn for AS 26)

AS 9 Revenue Recognition

AS 10 Accounting for Fixed Assets (amended) *

AS 11 The Effects of Changes in Foreign Exchange Rates (revised 2003) **

AS 12 Accounting for Government Grants

AS 13 Accounting for Investments (amended) *

AS 14 Accounting for Amalgamations (amended) *

AS 15 Employee Benefits (revised 2005)

AS 16 Borrowing Costs

AS 17 Segment Reporting

AS 18 Related Party Disclosures

AS 19 Leases

AS 20 Earnings Per Share

AS 21 Consolidated Financial Statements (amended) *

AS 22 Accounting for Taxes on Income

AS 23 Accounting for Investments in Associates in Consolidated Financial Statements

AS 24 Discontinuing Operations

AS 25 Interim Financial Reporting

AS 26 Intangible Assets

AS 27 Financial Reporting of Interests in Joint Ventures

AS 28 Impairment of Assets

AS 29 Provisions,Contingent Liabilities and Contingent Assets (amended) *. List of ICAI’s Non-Mandatory Accounting Standards (AS 30~32)

ICAI has announced on 15 Nov. 2016 that ‘AS 30- Financial Instruments: Recognition and Measurement’, ‘AS 31- Financial Instruments: Presentation’, ‘AS 32- Financial Instruments: Disclosures’ stands withdrawn

PPB recollected questions on 06.12.2020

 06.12.2020

SMA-0 Principal or interest payment not overdue for more than 30 days but account showing signs of incipient stress

SMA-1 Principal or interest payment overdue between 31-60 days

SMA-2 Principal or interest payment overdue between 61-90 days

Governor of the Reserve Bank of India – Chairperson, ex officio; (Shri Shaktikanta Das) of MPC

5 Mark's question are easy just odd one out you can manage them easily

Many questions on ethics and professionalism

One question was there on there on LC financing

Call money

Locker nomination

CRR

Conflict of interest

Penetration marketing

Minor do not want to be a partner

Basel 2 and 3,

Marketing mix,

case studies on nomination in locker accounts,

LANS,

business value,

Ethical dilemma,

pledge,

hypo, .

mortgage and assignment match the following,

numerical on NPA provision for doubtful assets.

Priority sector advances to weaker sections,

updated investment and turnover for micro industries,

diversification,

MKIS

customer banker relationship

question regarding SWITF

PMJDY

PMAPY

PMJJBY

PMSBY

Fair practice of lending

Non popular social networking site

Code of conduct for Direct Sales Agent made by?

Valuation of Mutual fund on...

Pre shipment credit

FCNR(B) is ___ form of term deposit

Data mining tools

Frauds committed by large number of customers

Call money market

Minor who doesn't want to be in partnership should do...

Business facilitator work on behalf of...

Ethical Dilemma

Increase in CRR...

type of mergers

Locker operation related

current ratio compare

Liberalized Remittance scheme related

marketing 15 question

ethics 15 questions

Cash management services related

Mutual fund scheme

NPA- D1, D2 related questions

Provisioning numerical

Priority sector related

Identify weaker section

Endorsement case study

Banking regulation act ke question

Rangarajan Committee

Narasimham committee

Classification of Assets 

Computerization in Banks 

Priority Sector – Target 

Money Market 

Marketing Ethics 

Match the Following – Vehicle, LIC Policy, Land, Hypothecation, Pledge Etc 

Provision of Doubtful Assets 

Banking Regulation ACT 

NPA 

General Banking – Either or Survivor 

MSME 

TNW 

Current Ratio 

SWIFT – related working DAYS 

CRILC – who developed (Ans: RBI) 

REPO RATE – Definition 

MICRO/SMALL /MEDIUM 

ISO Standards for smart cards – ISO 7816

ATM 

Weaker sections in PSL 

PMJJBY 

Mortgage 

MCLR 

PRODUCT MIX 

Ex-Officio chairman of MPC (Ans: RBI Governor)

Penalty of non-maintenance of CRR 

Debt Market 

Marketing & Product Development 

Product Life Cycle Stages 

NRLM Objective 

Letter of Credit 

Commercial Paper 

MKIS(Marketing Information System)

 Rangarajan Committee

Narasimham committee

Classification of Assets 

Computerization in Banks 

Priority Sector – Target 

Money Market 

Marketing Ethics 

Match the Following – Vehicle, LIC Policy, Land, Hypothecation, Pledge Etc 

Provision of Doubtful Assets 

Banking Regulation ACT 

NPA 

General Banking – Either or Survivor 

MSME 

TNW 

Current Ratio 

SWIFT – related working DAYS 

CRILC – who developed (Ans: RBI) 

REPO RATE – Definition 

MICRO/SMALL /MEDIUM 

ISO Standards for smart cards – ISO 7816

ATM 

Weaker sections in PSL 

PMJJBY 

Mortgage 

MCLR 

PRODUCT MIX 

Ex-Officio chairman of MPC (Ans: RBI Governor)

Penalty of non-maintenance of CRR 

Debt Market 

Marketing & Product Development 

Product Life Cycle Stages 

NRLM Objective 

Letter of Credit 

Commercial Paper

Business value

Ethical dilemma

Pledge, hypo, mortgage and assignment match the following

Numerical on NPA provision for doubtful assets

Priority sector advances to weaker sections

Updated investment and turnover for micro industries

Diversification

MKIS

Basel 2 and 3

Marketing Mix

Case studies on nomination in locker accounts

LAN

Questions on cheque conversion

call money market

PMJDY

Fair practice of lending

Non popular social networking site

Code of conduct for Direct Sales Agent made by?

Valuation of Mutual fund on…

Pre shipment credit

FCNR(B) is _ form of term deposit

Data mining tools

Frauds committed by large number of customers\

Call money market

Minor who doesn’t want to be in partnership should do…

Business facilitator work on behalf of…

Ethical Dilemma

Increase in CRR…

PMAPY

PMJJBY

PMSBY

Banking definition

Accept deposit purpose

Bank interest rates in marketing

Which one is not mkis

gross advance

Net working capital

Weaker section categories

Fair practice of lender 2 to 3 questions

mutual fund related 1

Rangarajan Committee

Narasimham committee

Classification of Assets

Computerization in Banks

Priority Sector – Target

Computerization in Banks

Priority Sector – Target

Money Market

Marketing Ethics

Match the Following – Vehicle, LIC Policy, Land, Hypothecation, Pledge Etc

Provision of Doubtful Assets

Banking Regulation ACT

NPA

General Banking – Either or Survivor

MSME

TNW

Current Ratio

SWIFT – related working DAYS

CRILC – who developed (Ans: RBI)

REPO RATE – Definition

MICRO/SMALL /MEDIUM

ISO Standards for smart cards – ISO 7816

ATM

Weaker sections in PSL

Mortgage

MCLR

PRODUCT MIX

Ex-Officio chairman of MPC (Ans: RBI Governor)

Penalty of non-maintenance of CRR

Debt Market

Marketing & Product Development

Product Life Cycle Stages

NRLM Objective

Letter of Credit

Marketing Ethics

Match the Following – Vehicle, LIC Policy, Land, Hypothecation, Pledge Etc

Provision of Doubtful Assets

Banking Regulation ACT

NPA

General Banking – Either or Survivor

MSME

TNW

Current Ratio

SWIFT – related working DAYS

CRILC – who developed (Ans: RBI)

REPO RATE – Definition

MICRO/SMALL /MEDIUM

ISO Standards for smart cards – ISO 7816

ATM

Mortgage

MCLR

Marketing & Product Development

Product Life Cycle Stages

NRLM Objective

Letter of Credit

Commercial Paper

MKIS(Marketing Information System)

JAIIB-ACCOUNTING & FINANCE FOR BANKERS-MOD-C

 JAIIB-ACCOUNTING & FINANCE FOR BANKERS-MOD-C

MODEL QUESTIONS

1) Which of the following may not be part of the reconciliation process.

a) Interest on overdraft

b) Dishonour of cheque

c) Cash drawn from bank

d) Cheque deposited but not collected

2) Which of the following is part of reconciliation.

a) Cash paid by customer to the trader

b) Cheque issued, presented, and on the debit side in the passbook and cashbook.

c) Bank charges debited.

d) b) & c)

3) Reconciliation of overcasting on receipts side of cash book

a) Increases the balance in the cash book.

b) Increases the balance in the passbook.

c) Decreases the balance in the cash book.

d) Decreases the balance in the passbook.

4) Which of the following is true

a) Bank Reconciliation Statement(BRC) is an account.

b) BRC is prepared by the bank.

c) BRC shows causes of disagreement between cash book & passbook.

d) BRC shows only excess of cash book over passbook.

5) If x is a credit balance in cash book carried forward on the debit side, then reconciliation is

a) Casting x on the debit side of cash book.

b) Casting 2x on the credit side of cash book.

c) Casting 2x on debit side of cash book.

d) Casting x on credit side of cash book.

6) If a trader enjoys an overdraft facility,then

a) His passbook will show debit balance.

b) His cash book will show credit balance .

c) Both a) & b).

d) Neither a) nor b).

7) Credit balance in a passbook indicates

a) excess of deposits over withdrawals.

b) excess of withdrawals over deposits.

c) debit balance in cash book.

d) b) & c).

e) a) & c).

8) At any point in time, cash book & passbook balances will not be same.

a) True.

b) False.

c) Maybe.

9) A trader has a strict overdraft limit of 10,000/-, overdraft balance of 9,500/-; issues 2 cheques of 500/- each, which are presented, then

a) His cash book will show higher overdraft balance than passbook.

b) His cash book will show lesser overdraft balance than passbook.

c) His cash book will show same balance as passbook.

d) Neither a) nor b) nor c).

10) Direct deposit by a customer in the bank with no overdraft facility

a) Shows a higher passbook balance than cash book.

b) Shows a lesser passbook balance than cash book.

c) Shows no difference.

d) None of the above.

11) Credit sale of X to Suresh is posted to his credit , then rectification is

a) Credit Suresh to the extent of 2X.

b) Credit Suresh to the extent of X.

c) Debit Suresh to the extent of 2X.

d) Debit Suresh to the extent of X.  

12) Freight expenses for carrying Machinery is carried to Travel a/c, then

rectification in trial balance is

a) Debit machinery a/c and credit travel a/c.

b) Credit machinery a/c and debit travel a/c

c) Credit profit and loss account and debit travel a/c.

d) Debit profit and loss a/c( P&L a/c) and credit travel a/c.

13) Goods worth X sold to Vijay was entered in purchase account;

       The rectification is

a) Credit purchases and credit sales to the extent of X each & debit Vijay.

b) Debit purchases and debit sales to the extent of X each & credit Vijay.

c) Debit sales to the extent of 2X.

d) Credit purchases to the extent of 2X.

14) Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. The rectification is

a) Credit sales 1200/-, debit machinery 1000/- and debit P&L a/c 200/-.

b) Debit sales 1200/- , credit machinery 1000/- and credit P&L a/c 200/-.

c) Credit machinery 1200/-, debit sales 1000/- and debit P&L a/c 200/-.

d) Debit machinery 1200/-, credit sales 1000/- and credit P&L a/c 200/-.

       15) Sales return of amount X from Vijay was wrongly entered in purchase book.

              The rectification is

a) Debit sales to the extent of 2X.

b) Credit purchases to the extent of 2X.

c) Credit Vijay 2X debit sales and purchases to the extent X each.

d) Debit sales return and credit purchases.

16) Which of the following will not affect Trial Balance

a) Goods sold on credit not recorded in books.

b) Overstating of sales register.

c) Rent account credited instead of debit.

d) Salary debited to the extent ½ the amount. 

17) Suspense a/c is not used in which of the following cases.

a) before trial balance.

b) after trial balance.

c) before final accounts.

d) none of the above.

18)Which of the following is true

a) Trial balance ensures arithmetical accuracy.

b) Trial balance errors are not located then the difference is sent to suspense a/c.

c) Trial balance is base for final accounts.

d) All of the above.

19) Statement showing debit and credit balances of ledger accounts is

a) Gross trial balance

b) Net trial balance

c) Trial balance

d) None of the above

20) Which of the following are true

a) Nominal accounts always have credit balances.

b) Real accounts always have debit balances.

c) Debit balance in ledger account is credit balance in trial balance.

d) P&L a/c appears in trial balance.

21) Freight expenses for moving machinery to factory is

a) Revenue expenses

b) Deferred revenue expenditure

c) Capital expenditure

d) None of the above

22) Which of the following is false

a) Replacement of defective part of machinery is revenue expenditure

b) Daily wages paid for erection /installing of machinery is capital expenditure

c) Underwriting commission for issue of shares is revenue expenditure

d) Excess of sale price of Machinery over its W D Value but less than cost price is treated as revenue receipt

23) Which of the following is not a deferred revenue expenditure

a) Preliminary expenses for setting up a company.

b) Rights issue amount.

c) Huge sales promotion expenditure in launch of new product

d) Cost of preparing project report

24) Match the columns:

  a) Purchase of land for premises 1) Deferred Revenue Expenditure (c)

  b) Purchase of machinery for sale 2) Capital Expenditure (a)

  c) Legal expenses for issue of shares 3) Revenue Expenses (b)

  d) Excess of sale price of asset over

       W D Value 4) Capital Receipt (e)

   e) Excess of sale price of asset over

       cost price 5) Revenue Receipt (d )

25) For an expense to be classified as revenue or capital depends on

  a) Kind of expense

  b) Duration of the benefit of the expenditure

  c) Effect on revenue earning capacity

  d) All of the above

26) Inflation of current profits could be on account of

  a) Inflation of closing stock in current year

  b) Deflation of closing stock in current year

  c) Inflation of closing stock in previous year

  d) None of the above

27) Cost of goods sold is

  a) Opening stock + purchases + closing stock

  b) Opening stock + purchases – closing stock

  c) Opening stock – purchases + closing stock

  d) None of above

28) In LIFO method of inventory valuation

  a) Issue of stocks to production is at latest price

  b) Closing stock is at latest price

  c) Both a) & b)

  d) Neither a) nor b)

29) In FIFO method of inventory valuation

  a) Closing stock is at latest price

  b) Issue of stocks to production is at earliest price

  c) Both a) & b)

  d) Neither a) nor b)

30)Which of the following is most desirable

  a) Pricing issue of goods to match current material costs

  b) Overstating profits

  c) Understating profits

  d) none of the above

31) In a market of falling prices which is the best option

  a) LIFO

  b) FIFO

  c) Weighted average cost method (WACM)

  d) a) or b)

  e) b) or c)

32) In a rising market which is the best option

  a) LIFO

  b) FIFO

  c) WACM

  d) a) or c)

  e) b) or c)

33) As per accounting standards which of the following is not a preferred method

        a) LIFO

        b) FIFO

        c) WACM

        d) All of them

34) Consider the following:

01/04 Opening stock of 1000 units at Rs. 10/- each

10/04 Purchases of 500 units at Rs. 9/- each

16/04 Purchases of 300 units at Rs. 11/- each

18/04 Goods of 300 units released to production

31/04 Books closed

 Answer the following: under LIFO under FIFO under WACM  

 Goods released to production @ Rs 11/- @ Rs. 10/- @ Rs. 9.89/-

 Closing stock @ Rs.10/- @ Rs. 11/- @ Rs. 9.89/

35)Cost of goods sold reflects the usual physical flow of goods. This

statement is true of

        a) LIFO

        B) FIFO

        c) WACM

        d) Adjusted selling price method

36) The ending inventory may be taken at prevailing prices years ago. This

statement is true of

         a) LIFO

         b) FIFO

         c) WACM

         d) Adjusted selling price method

         Read the following and answer :

         Drawer is ‘A’

         Drawee is ‘B’

         Endorsee is ‘C’

            In the books of ‘A’

      37) Bills receivable a/c dr.

              to B

        a) Bill accepted by ‘A’

        b) Bill accepted by ‘ B’

        c) Bill retired by ‘B’

        d) None of the above

      38) ‘C’ a/c dr.

                to Noting Charges   

                to Bills Receivable

a) Bill dishonoured and received back from ‘C’.

b) Bill accepted by ‘B’ but dishonoured

c) ‘A’ cancels endorsement

d) None of the above

                         .

      39) Bill sent for collection a/c dr.

                 To Bank

a) Bill is paid by ‘B’

b) Bill is dishonoured by ‘B’

c) Amount paid to bank by ‘A’ after dishonour

d) None of the above

              In the books of ‘B’

      40) Bills payable a/c dr.

                to bank  

a) Bill accepted by ‘B’

b) Bill retired by ‘B’

c) Bill dishonoured by ‘B’

d) Bill sent by ‘A’ for payment

      41) Bank a/c dr.

                  To bills payable

a) Bill accepted by ‘B’

b) Bill dishonoured by ‘B’

c) Bill paid by ‘B’

d) None of the above

42) Which of the following is not true

a) there is no difference in appearance between trade  

and accommodation bill.

b) A bill of exchange must be accepted

c) Drawee is maker of a bill

d) Accommodation bill is for an imaginary transaction

43) Which of the following is true

a) An insolvent is a person from whom some portion of the debt is recoverable

b) Drawer drags the drawee to court in case of dishonour of accommodation

Bill.

c) A bill drawn for mutual help is an accommodation bill

d) Drawee is a person to whom bill is endorsed

44) Noting charges are

a) Paid to bank for dishonour

b) Paid to drawer for dishonour

c) Paid to notary public for recording dishonour

d) None of the above.

45) Which of the is true

a) Del Credere commission is calculated on credit sales

b) Value of goods sent on consignment is debited to consignee a/c.

c) The relationship between consignor and consignee is that of principal and agent.

d) The statement of sales sent by consignee is called account sale.

46) Goods lost in transit is

a) Nominal loss

b) Abnormal loss

c) Casual loss

d) Conditional loss

47) Due to tsunami a ship of consignment goods sinks. This loss is called

a) contingent loss

b) Nominal loss

c) Abnormal loss

d) Casual loss

48) Which of the following is true for leasing and hire purchase

a) Lessor and vendor can claim depreciation.

b) Lessor and hirer can claim depreciation.

c) Lessee and hirer can claim depreciation.

d) Lessee and vendor can claim depreciation.

49) In sum of digits method for 5 years which of the following is the 1st year’s allocation ratio.

a) 1/15

b) 2/15

c) 3/15

d) 4/15

e) 5/15

50) Which of the following is true

a) Total lease rent = cost of asset - total finance income + residual value

b) Total finance income = total lease rent – cost of asset + residual value

c) Total finance income = cost of asset – total lease rent + residual value

d) Cost of the asset = total lease rent + residual value + total finance income

51) The break up of lease rentals into total finance income ,lease equalization and depreciation represents the principle of

a) Equity

b) Consistency

c) Conservatism

d) Materialism

52) Which of the following is not true for a lessee in a lease transaction?

a) reduction in capital investment

b) reduction in tax liability

c) risk of obsolescence

d) rentals can be expensive

53) Lease terminal adjustment account is a balance sheet account

Its treatment is in the following. Identify the correct one.  

a) if it is debit balance it is deducted from the W D V of the asset.

b) If it is credit balance it is added to the W D V of the asset.

c) If it is credit balance it is deducted from the W D V of the asset.

d) None of the above.

54) If statutory depreciation > annual lease charge then

a) The difference is added to the P & L a/c.

b) The difference is subtracted from the P & L a/c.

c) The difference is taken to the bank account

d) None of the above.

55) Residual value is

a) Possible resale value after the asset is written off in the books.

b) Real value arrived at after calculation.

c) Negligible balance after the asset is written off over the useful life of the asset.

d) a) or c)

56) In operating lease the period is

a) Less than the useful life of the asset.

b) Greater than the useful life of the asset.

c) Equal to the useful life of the asset.

57) In comparing lease & hire purchase (H P) there are differences & similarities.

       Of the following which one is not true?

a) In lease the user of the asset does not retain it, while in H P he does.

b) In lease the user does not claim depreciation while he does in H P.

c) Payment of rentals is on instalment basis in both.

d) The users of assets in both lease & H P run the risk of obsolescence.

58) Receipts and payments statement shows

a) Only revenue receipts and payments during a year.

b) Only capital receipts & payments during a year.

c) Both capital and revenue receipts during a year.

d) ‘Cash Only’ transactions.  

59) Income for the year = I, Outstanding Income for previous year = Id,

       Outstanding Income of current year = Idi, then Receipts for the year is

a) I – Idi + Id

b) I + Idi – Id

c) I + Idi + Id

d) None of the above.

60) Opening balance of asset = Oi, Closing balance of asset = Oc, Depn. = D,

       Then addition to the asset during the year is

a) Oc – D – Oi

b) Oi + D – Oc

c) Oc + D – Oi

d) Oi – D – Oc

      61) Tick in the appropriate column for a Non-Trading Organization

          Item Revenue Receipt Capital Receipt

         a) Donations for sports meet √

         b) Donations by Legacy/Will √

         c) Grant for playground √

         d) Life membership fees √

         e) Profit on sale of fixed assets √

62) For a Non- Trading Organization, a P & L statement is

       called an Income & Expenditure statement because.

They often make losses.

They are forbidden by statute to make profits

By object of their association they are non profit making bodies.

Their income & expenditure statement are a combination of capital & revenue

       receipts.

63) The useful or service life of a tangible asset is limited by physical process of wearing out. This is called.

obsolescence

deterioration

depreciation

depletion

64) All costs be they revenue or capital will have matching revenues

        over a period of time. This accounting process is called

amortization

depreciation

depletion

all of these

65) Which of the following is not true

Depreciation is an expense charged to the P & L a/c.

Depreciation is not a part of the operating costs.

Assets that are depreciated are tangible assets.

Depreciation is like an insurance expense.

66) Under written down value method of Depn., the W D V of the asset is always

a) equal to zero

b) < zero

c) > zero

67)Depreciation shrinks the

scrap value of the asset

market value of the asset

residual value of the asset  

book value of the asset

68) Depreciation is an estimate because

a) rates of depreciation are not fixed

b) residual value of the asset is not known

c) useful life of the asset is difficult to ascertain

d) a) & b)

e) b) & c)

69) In sinking fund method of depreciation accounting

a) A fund is created at the beginning to which

depreciation is charged annually.

b) Since acquiring an asset results in sunk costs

depreciation of the asset is called so.

c) Depreciation charged annually is transferred to a fund

which is invested in growth and income generating

securities to take care of the replacement of the asset.

d) None of the above.

70) What is G A A P

a) General American Accounting Practices.

b) Greatly Accepted Accounting Practices.

c) Generally Accepted Accounting Principles.

d) Good American Accounting Practices.

HOW TO BE HAPPY ALWAYS

 HOW TO BE HAPPY ALWAYS

Happiness – the mantra every human being on this earth is often chanting now a day. Then, we must know what actually the “happiness” is? If I ask this question, few people may reply that having bungalow, big car, handsome salary and good bank balance – is happiness. Some may say keeping good health, others may say earning name and fame in the society. Then after getting all the materialistic comforts like car, bunglow, bank balance, name and fame, is human being staying happily throughout their life? These things may keep the person happy for a temporary period only, but not always. In reality, happiness is available to all of us, right now. A bunglow or a new car won’t actually make a person happier; it is the simple joy in life that brings true happiness.

Then, what to do to attain the real happiness in our life, which will be with us forever. Here are some interesting areas one can choose as per their interest to lead a real happy life.

1. Help Others:

Sometimes after accomplishing their personal goals, people still feel empty inside because they have not made meaningful contribution to someone else’s life to those who are in real need. Helping needy and downtrodden people in the society makes people finding their own happiness.

2. Share with others:

When we share our ideas, our time and our abilities with others, we feel better for it. A life lived without sharing can become lonely and boring. When you share with others, they will also feel great towards you and help you to feel more happiness in your life.

3. Smile More:

Whenever there is an opportunity, smile and make people around you also smile. Smile costs nothing. In fact smile rejuvenates your nerves system, helps relief from tension. Smile can make you happier.

4. Spend time with your loved ones:

After completing your office / business work, spend the leisure time with your family and children. Try to take food with all the family members once in a day, preferably at night. Keep away all your electronic gadgets when you are spending time together. This enables focused attention towards our loved ones. Make sure that you are a fond member of the family who cares for them.

Friends and relatives are also plays a prominent role in our life. Try to allocate time and meet them occasionally and interact with them. Try to plan for holidays at least twice in a year with family and

friends. This helps not only keeps you happy, but makes the entire family and friends happy and strengthen the bondage among you all.

5. Dump negative thinking:

It is quite natural for a human being to carry negative feelings, negative thoughts for long time. Moreover, they do not leave this negativity easily. Because of this characteristic, people feel sorrow, stressed and unable to live happily. Once a person comes out from these negative thoughts then only they can be happy in their life. To overcome this, try to choose people with positive mindset as your companion and try to spend time with them.

6. Forgive and forget:

The greatest virtue in a human being is “Forgiveness”. A person who forgives faults, mistakes, and wrong doings of others will be adjudged as a saint. By virtue of this forgiveness, the heart and mind is clean always and he/she does not carry any grudge against any one, which enables the person to lead a happiest life.

7. Be yourself:

As Steve Jobs said, “your time is limited, so don’t waste it living someone else’s life”. Accept who you are, just be yourself and you will feel a world of difference.

Hope, everyone try to follow these small traits and get immense happiness throughout their life. Finally I would like to conclude this with the following saying of Lord Gautama Buddha

☕ 06.12.2020: Today's Banking / Financial News at a Glance

 🙏 Good Morning All.... 🌻👩‍👩‍👧‍👦

☕ 06.12.2020: Today's Banking / Financial News at a Glance

🍒 BBB recommends S Ramann for post of SIDBI chairman & managing director : The Banks Board Bureau (BBB), the headhunter for state-owned banks and financial institutions, on Saturday recommended S Ramann and Shivendra Tomar for the posts of CMD and MD of SIDBI and IFCI, respectively. The members of the Banks Board Bureau interviewed 20 candidates on December 4 and 5, 2020 for the vacancy of chairman and managing director (CMD) of Small Industries Development Bank of India (SIDBI), the BBB said in a statement. "Keeping in view their performance in the interview and their overall experience, the bureau recommends S Ramann for the position of chairman and managing director in SIDBI," it said. Ramann, 1991-batch Indian Audit & Accounts Service officer, is currently CEO of National E-Governance Services Limited (NeSL), India's first Information Utility. Besides, the Bureau recommended Shivendra Tomar for the post of MD and CEO of IFCI. - economic times

🍒 PNB to hold roadshow for proposed Rs 7,000 crore QIP next week : Punjab National Bank on Saturday said it will hold a roadshow for the proposed Rs 7,000 crore qualified institutional placement (QIP) issue next week. The bank will be participating again in the non-deal roadshow and meeting prospective investors on December 7-8, 2020, PNB said in a regulatory filing. The bank has taken approval for raising Rs 7,000 crore through Qualified Institutional Placement (QIP) route this fiscal. In a non-deal roadshow, nothing is for sale, a bank official said, adding it is an opportunity to discuss and develop interest in an upcoming offer. The bank has already taken approval from the board for raising Rs 14,000 crore by way of Tier II, Additional Tier 1 (AT-1) bonds and QIP (Qualified Institutional Placement), PNB Managing Director S S Mallikarjuna Rao had said last month. - Business Standard

🍒 Invest more in IT infrastructure for better reach: RBI Governor : The window to banking is now as wide as the worldwide web – so vast that protecting new-gen customers transacting online could soon tell success from failure in an industry that, for centuries, thrived on networking behind closed doors. With banking taking on an increasingly digital accent each passing day, Mint Road is now buttressing standards around grievance resolution and customer protection to ensure continued confidence in the burgeoning virtual channels that are crucial for financial inclusion. “Lakhs of internet banking customers cannot be put under distress,” Das said Friday, underscoring the need to strengthen both banking technology systems — and their supervision. “The financial sector is becoming increasingly IT-dependent and requisite investments by banks and NBFCs are necessary,” Das said. “We are constantly engaging with the entities around deficiencies…as the apex regulator of the banking and payment systems, certain action becomes unavoidable.”- economic times

🍒 RBI survey revises forecast for real GDP growth upwards for FY’21, FY’22 : The Reserve Bank of India’s (RBI) latest Survey of Professional Forecasters (SPF) has revised the forecast for real gross domestic product (GDP) growth upwards for FY21 and FY22 vis-a-vis the last round of SPF. The 67th round of SPF has projected a lower contraction of 8.5 per cent (median forecast) in real GDP in FY21 versus the 66th SPF round’s estimate of a 9.1 per cent contraction. Real GDP is expected to recover next year (FY22), when it is expected to grow by 9.5 per cent against earlier projection of 8.2 per cent, as per the Survey. The latest Survey has revised upwards the headline consumer price index (CPI) inflation projections for all the four quarters (Q3: October-December 2020 and Q4: January-March 2021; and Q1: April-June 2021 and Q2: July-September 2021) when compared with the previous survey round - Business Line

🍒 Consumer confidence takes a beating in November: RBI survey : Consumer confidence remained very low in November 2020 compared to a year ago, as reflected in the Current Situation Index (CSI), as per Reserve Bank of India’s (RBI) Consumer Confidence Survey. The weak confidence is attributable to consumer sentiments on the general economic situation, employment scenario, price levels and household incomes, according to the central bank. The November 2020 CSI reading came in at 52.3 against 85.7 in November 2019. The latest CSI reading, however, showed a marginal improvement over the all-time low of 49.9 recorded in the previous (September 2020) round. Households remain optimistic of the situation one year ahead, with the Future Expectations Index (FEI) remaining in growth terrain at 115.9, against 114.5 in the November 2019 round. - Business Line

🍒 ‘Investor response to PMC Bank resolution positive’ : Potential investors’ response to the Expression of Interest (EoI) floated by the scam-hit Punjab and Maharashtra Co-operative (PMC) Bank for investment/ equity participation for reconstructing the bank looks positive at this point of time, according to Reserve Bank of India (RBI) Governor Shaktikanta Das. To a specific question as to why YES Bank and Lakshmi Vilas Bank could be resolved quickly but not PMC Bank, Das said the situation in PMC Bank was completely different. “The last date for submission of EoI is December 15. Let us see what is the response and after that we can take a view on this,” said the Governor. The bank, and its management, are engaged with investors who have purchased the information memorandum, he added - Business Line

🍒 In growth push, RBI continues liquidity support : The Monetary Policy Committee (MPC) on Friday left the policy repo rate unchanged at 4 per cent, for the third time on the trot. This was widely expected given the sticky retail inflation which, in the RBI’s view, is likely to remain elevated. However, to support the nascent recovery in the economy, the six-member MPC persisted with its accommodative stance and decided to continue with it for as long as necessary to revive growth on a durable basis. The MPC forecast the retail inflation to hold above its midpoint target of 4 per cent in the second half of 2020-21. Its members unanimously voted to keep the policy rate unchanged. With the outlook for inflation turning adverse relative to expectations in the last two months, the MPC projected CPI (consumer price index) inflation at 6.8 per cent for Q3 FY 21 and 5.8 per cent for Q4 FY21. The CPI inflation for the first half of FY22 has been forecast at 4.6-5.2 per cent, with risks broadly balanced. - Business Line

🍒 KVG Bank launches OD facility for farmers : The Dharwad-headquartered regional rural bank, Karnataka Vikas Grameen Bank (KVGB), has launched an overdraft (OD) facility for farmers. Speaking at the launch of the ‘Kirishi OD’ scheme designed for farmers, P Gopi Krishna, Chairman of the bank, said that the farmers are provided with an OD facility based on the value of the land. The limit is capped to a maximum of ₹1.5 lakh per acre to irrigated lands and ₹1 lakh per acre to dry land. The facility can be used for working capital requirements such as maintenance of machinery and equipment, repair and replacement of machinery, agricultural allied activities and even for the repayment of private loans availed for personal use. He said the uncontrolled weather, escalating natural disasters, and the current Covid situation have made farmers vulnerable. “To ease the situation, KVGB has designed a special OD facility for the farmers to help them to cope with the situation,” he added. - Business Line

🍒 Satin Creditcare Network to expand in South India : Microfinance company Satin Creditcare Network Ltd plans to strengthen its presence in the South with the opening of a few more branches, said the company’s Chief Operating Officer K Thangaraju. As part of its expansion plan, the company opened four branches at Perundurai, Udumalpet, Kinnathukadavu and Dharapuram in this region about 10 days back, and a regional office in Coimbatore on Friday. With 84 branches in the South (of which 53 and 31 are in the states of Tamil Nadu and Karnataka respectively), the company is looking to further strengthen its network in the South. Thangaraju said that the company has extended loans amounting to ₹360 crore to women self-help groups (SHGs) over the last two years. - Business Line

🍒 Gold Prices Decline To Rs 49,209 Per 10 Gram, Gains 2.66% For The Week : Gold prices edged lower to settle at Rs 49,209 per 10 gram on December 4 as participants trimmed their long position as seen by the open interest. The precious metal after hitting a low of Rs 47,792 on Monday ended the week with a gain of 2.66 percent for the week. In the retail market, the bullion metal settled at Rs 49,316 per gram on Friday up nearly 1 percent for the week on hopes of additional US stimulus and weakness in the dollar. The gold/silver ratio currently stands at 78.19 to 1, which means the amount of silver required to buy one ounce of gold. The retail silver prices eased Rs 54 to Rs 63,064 per kg from its closing on December 3.

🍒 Sensex, Nifty Create History: Over 60 Stocks In bse500 Index Rise 10-50% In A Week : Indian market created history as bulls pushed benchmark indices beyond crucial psychological levels in the holiday-shortened week. The S&P BSE Sensex surpassed Mount 45K while Nifty50 managed to hold 13,100-13,200 levels. The S&P BSE Sensex rose 2.1 percent while the Nifty50 climbed 2.2 percent for the week ended December 4 while the action was more prominent in the broader market space.The S&P BSE Mid-cap index rose 2.8 percent while the S&P BSE Smallcap index closed with gains of 2.6 percent for the week ended December 4. There are as many as 65 stocks in the BSE500 index that rose 10-50% in just 4 sessions that include names like KNR Construction, Tata Power, Maruti Suzuki, Sun Pharma, Adani Enterprises, Hindalco, Oberoi Realty, SAIL, SpiceJet, Tata Chemicals, and Adani Power, etc. among others. - moneycontrol..

🙏 “All the Best… Have a Good day "🌻👩‍👩‍👧‍👦

💎*22 Pearls of financial wisdom*💎

 💎*22 Pearls of financial wisdom*💎

*1) Bonds are for storing wealth and equities are for creation of wealth*.

*2) In my opinion, the biggest asset one can have is zero debt*. 

*3) The greatest discipline in personal finance is living below your means*.

*4) As Ben Carlson says, emotions cannot be back tested. That’s why past bear market always looks like opportunities and future ones scary*. 

5) Early financial independence and early retirement are completely different. To me, the former is a blessing and the latter is a curse.

*6) Don’t think how it would have been if you’ve started 10 years ago. Start today and visualise how you would feel 10 years from now*. 

7) The neighbourhood we live determines our life style & spending. Need to be careful in choosing one which matches our goals and personality.

*8) Paying minimum balance regularly on credit card is the maximum sign that you’re getting into debt trap*.

9) Many are long term investors till next bear market. 

*10) Don’t take aggressive bets. Take measured risk. Remember one blunder can push you back by a decade or more in terms of wealth*. 

11) Big money can be made through high savings, wise investing and lots of patience. 

*12) One sign of progress in individual investor’s portfolio is no churn or very less churn*.

13) Trying to get rich fast is a foolproof way to lose what we have.

*14) Losing opportunities is far better than losing money. Don’t invest in fads*. 

15) “Making as much money as quickly as possible” is not an investment strategy. Unfortunately for most of us that is the strategy.

*16) Aggressive strategy cannot be a substitute for high savings. Save high and take moderate risk than saving less and taking high risk*. 

17) The day we realise not losing is as important as winning; we would stop blindly chasing returns. 

*18) Good periods are more than bad periods. By not timing, though we go through bad periods, do not miss even a single good period*. 

19) We’ll stop looking for quick money the moment we consider stocks as businesses and realise that our wealth grows in line with business growth.

*20) There are periods of high returns, low returns, no returns and negative returns. We need to go through all these to get long term returns*.

21) Listening to market forecasts is not only useless but can be very harmful too; if you start acting on them.

*22) The hard truth is only around 3% of our population are in a position to aspire for financial independence. Don’t waste this rare privilege*.