LEGAL ASPECTS OF BANKING OPERATIONS

JAIIBMODULE C & D

06.11.06

01..Under SARFAESI Act, 2002, the word Board is used to mean

A .. Reserve Bank of IndiaB .. Securities and Exchange Board of IndiaC .. Debt Recovery TribunalD .. Securitization Company

02..Which pair is not correctA . Obligor – BorrowerB . Lender - OriginatorC . Sponsor – Reserve Bank of IndiaD . Secured Financial Institution Creditor -

03..This evidences the purchaser’s undivided right, title and interest in the security.

A . OwnershipB . Transfer RightC . Right to possess and enjoyD . None of these

04..Which one cannot be a Qualified Institutional Buyer

A . Insurance companyB . BankC . A Partnership firm with financial

experienceD . A Foreign Institutional investor

05.. Which statement is correctA . An asset reconstruction company need

not be registered under Companies Act.B . A foreign institutional investor to be

registered with RBIC . SARFAESI Act not applicable to RRBsD . Securitization Company has also to be

registered with SEBI.

06..Securitisation companies can set up separate trusts scheme wise and act as trustee for such schemes. The beneficiaries of such trusts are

A . TrusteesB . BorrowersC . CreditorsD . None of them

07..The Securitisation company or reconstruction company can acquire financial asset of any bank or financial institution by issuing

A . DebentureB . BondC . Any other security D . Any one of the above

08..Identify the odd one (Debenture) A .A debenture for payment of consideration

to be paid to the bank for acquisition of financial asset from it

B .The rate of interest on debenture cannot be more than 1.5% above Bank rate

C .Redemption period not beyond 6 years.D .Reconstruction company to issue

debenture

09..It has the owned funds not less than Rs.2 crore or such other amount not exceeding 15 % of total financial assets acquired or to be acquired as the RBI may specify.

A . Securitisation CompanyB . Reconstruction CompanyC . Both a & b D . None of these

10..The securitisation company or the reconstruction company can acquire financial asset of any bank or financial institution

A . True B . FalseC . Incorrect D . Not True

11.. Identify the correct one.A .Acquisition of funded assets to include

take over of outstanding commitments, if any, of any bank, to lend further.

B .If registration cancelled, Reconstruction company can appeal within 45 days

C .Security receipt is in favour of investorsD .Scheme wise/ asset –wise separate

accounts not required to be maintained

12.. A securitisation company or reconstruction company can raise funds by way of deposits.

A . Not False B.. Not TrueC.. Not applicable to Securitization company

but to Reconstruction companyD.. Not applicable to Reconstruction

company but to Securitisation company

13..Identify the incorrect one (Securitisation)A . Non performing asset is linked to

overdue period which is 90 days nowB .If the asset is taken for reconstruction

limit is 7 years for reconstructionC .Capital Adequacy of 15% to be thereD .While issuing security receipts necessary

disclosures to be made without fail

14..The date agreed upon by the secured creditors representing not less than three-fourth in value of the amount outstanding on such date.

A . Agreement Date B.. Agreed DateC.. Record Date D.. Due date

15.. Which one is not coming under Securitisation.

A . Hypothecation of StockB . Assignment of Book DebtsC . Mortgage of LandD . Pledge of Goods

16..In case of sale of immovable property the borrower should be given notice about the sale before

A . 60 days B. 2 monthsC . 90 days D. None of these

17.. An authorized officer has finalised the sale of property for Rs. 10 lacs. Then the purchaser has to remit

A . The amount immediatelyB . Within 15 daysC . 25% of the offer priceD . Nothing at once

18.. The authorized officer canA . Accept the OfferB . Confirm the saleC . Issue Sale CertificateD . Perform all the above

19.. Securitisation (identify the odd one)A. For taking possession and then sell the

immovable property (under mortgage) court permission required.B. Court permission not requiredC. The authorised officer to publish the

possession noticeD. In two leading newspapers

20..An appeal to the Appellate Tribunal is to be preferred within

A. One month from the date of receipt of the order of Debts Recovery Tribunal.

B. 30 days C. 60 daysD. None of these

21.. A record to be maintained at the Central Registrar at their head office to record transactions relating to

A . Securitization of financial assetsB . Reconstruction of financial assetsC . Creation of security interestsD . All the above

22.. When any security interest is registered with the Central Registrar is modified, the same is required to be filed before Central Registrar within

A . 30 days B. One monthC . 45 days D. 60 days

23.. If a reconstruction company fails to comply with any of the directions of RBI then the company is punishable with fine not exceeding

A . Rs.1 lac for the default.B . Rs. 5000/- per dayC . Rs 10000/- per dayD . Rs. 5 lacs

24..Provisions of SARFAESI ACT not applicable for

A . A pledge of movable assetsB . Hire purchase or lease in which no

security interest has been createdC . Any security interest created in

agricultural landD . All the above

25..A bank has realized part of the liability by using Securitisation procedure. The balance outstanding is Rs.12 lacs without any tangible security.

A . Bank will have to foregoB . Bank can approach DRTC . Bank cannot approach any courtD . Bank will have to write off

26.. After recovery through Securitisation process for balance outstanding to recover the bank can approach competent court provided

A . Limitation period is not overB . Debt is time barredC . Limitation period has not been extendedD . Borrower agrees

27..Banking Ombudsman review authority is

A. Ombudsman himselfB. Awarding OfficialC. RBI Executive DirectorD. None of them

28..Banking Ombudsman which is incorrectA . Provided with a SecretariatB . Cost of Secretariat to be borne by RBIC . Remuneration to be decided by RBID . He can not act as an arbitrator

29.Banking ombudsman- identify odd oneA . Non- adherence of prescribed working

hours by branchesB . Observance of RBI directives on interest

ratesC . Failure to pay guarantee amountD . Non- issue of drafts to non customers

30..Banking Ombudsman as an arbitrator to follow the scheme as well as the provisions of

A . Banking Regulation ActB . Reserve Bank of India ActC . Arbitration ActD . None of these

31..DRT Act not applicable toA . Nationalized BanksB . Regional Rural BanksC . State Bank of IndiaD . None of these

32..Under DRT Act, a Recovery Officer is one who is

A . Appointed by the respective BanksB . Also known as Authorized OfficerC . Appointed by the Central GovernmentD . Also called Presiding Officer

33..Which one is incorrect (DRT)A . An application for execution of the

decree of foreign court cannot be entertained by Debt Recovery Tribunal.

B .The Limitation Act applies for DRT casesC .Other Bank can join the application.D .Tribunal to deal with cases above Rs,10

lacs

34..Identify the correct mode of recovery of debts (DRT)

A . Attachment and sale of movable propertyB . Sale of immovable property of the

defendantC .Arrest of the defendant and his detention

in prisonD .Any one of the above

35.. The recovery certificate which has been issued requires rectification of arithmetical mistake. It can be done by

A . The Banker himselfB . The Competent CourtC . The Officer of the DRTD . None of these persons

36..Any person aggrieved by the order of Recovery Officer may appeal to the Tribunal within

A . 15 days B . 30 days C . 30 days from the date of the order D . 30 days from the date of receipt of the

copy of the order.

37..According to Bankers’ Books Evidence Act identify the correct one.

A.. The Act extends to the whole of India including the State of Jammu & Kashmir

B .For a Computer Print out certificate by the Principal Accountant is not acceptable

C .The certified copy need not have any declaration.

D . The Act is not applicable to the State of Jammu & Kashmir

38..For inspection of books by order of court the same has to be served on the bank

A . Any time before banking business hoursB . Any of its branchesC . At least a week before the same is to be

obeyedD . None of these

39...A dispute where the person against whom complaint has been made, denies or disputes the allegations contained in the complaint refers to

A . Consumer DisputeB . Customer DissatisfactionC . Consumer ComplaintD . Deficiency in Customer Service

40..Under the Consumer Protection Act, who is not treated as a “Person”

A . An unregistered FirmB . A Registered FirmC . A Co-operative SocietyD . None of the above

41..J applied for a loan which the bank considered. However J went to the consumer forum claiming that the loan was inadequate. Then the consumer forum

A . Can direct the bank to give balance loanB . Cannot direct the bank C. Can entertain

the consumer’s request D . None of these

42..Which one is correctA .. The State Consumer Protection Council to

meet at least two times every year.B .. The District Consumer Protection Council to

meet at least one time every year.C .. The Central Consumer Protection Council to

meet at least two times in a year.D ..The highest council is the National Council

43..Identify the odd one (Consumer Disputes Redressal Agencies)

A . National CommissionB . District ForumC . Central CouncilD . State Commission

44..Every member of the District Forum to hold office for a term of three years or up to the age of sixty-five years, whichever

is earlier.A . True B . FalseC . Partially True D . It is not 3 years but 5 years

45..An appeal against the District Forum’s order has to be filed before State Commission within 30 days. In case of monetary involvement the person filing appeal

A.. Need not remit any amountB.. Has to remit 50 % of the amount orderedC .. Rs.20,000D .. B & C which ever is less

46..For filing any complaint before a DistrictForum, State Commission or the NationalCommission the limitation period from thedate of cause of action isA .. 1 year B.. 2 yearsC .. 3 years D.. No limitation period

47..An Agreement involving 3 persons is called

A .. Unilateral AgreementB .. Bilateral AgreementC .. Multi person AgreementD .. None of these

48.. It is the delivery of goods by one person to another for some purpose . When the purpose is accomplished, the goods are to be returned or otherwise disposed of according to the direction of the person delivering them.

A . Hypothecation B . BailmentC . Assignment D . Mortgage

49.. Under Pledge the pledgee is the A . Debtor B . CreditorC . Borrower D . None of them

50..Termination of Agency is possibleA . Principal revoking his authorityB . Agent dies during the agency periodC . Principal is adjudicated as insolvent D . All the above

51.. Which one does not pertain to saleA . The risk in goods is with the buyerB . The Seller can only sue for damagesC . It is a contract in which the parties have

already performed their partD . The ownership of goods have already

passed irrespective of whether the goods are delivered or not

52..It is a stipulation collateral to the main purpose of the contract. The breach of such a stipulation gives rise to a claim for damages only.

A . Condition B . WarrantyC . Guarantee D . Stipulation

53.. The unpaid seller (which one is not the Right)A . Right not to withhold delivery of goodsB . Right of re-saleC . A lien on the goods for the price while he is in possession of themD . Right to stop goods in transit

54.. This type of partnership can be dissolved by any partner by giving notice in writing to all the other partners of his intention to dissolve the firm.

A . Ordinary PartnershipB . Partnership at WillC . Special PartnershipD . Particular Partnership

55..The implied authority of a partner does not empower him to

A . Open a banking account on behalf of the firm in his own name

B . Withdraw a suit filed on behalf of the firmC . Admit any liability in a suit against himD . Enter into partnership on behalf of the

firm

56.. A minor who was admitted to receive the benefits of a firm, on attaining majority and becoming a partner

A .His rights and liabilities as a minor continue upto the date on which he becomes a partner

B .He is personally liable to 3rd parties for all the acts of the firm done

C .Since he was admitted to the benefits of the firm

D .All the above are applicable

57..Which one is incorrectA . Registration of a firm is optional B . Registration of a company is not

compulsoryC . A firm does not have a perpetual

existence D . Common seal is not applicable to a firm

58.. Identify the odd one (Companies)A . A private company can accept deposits

only from its members or directorsB . For Private company minimum issued

capital has to be Rs.1.oo lacC . Minimum 3 directors required for Public

Ltd company D . Memorandum of Association is a Public

document

59..Which does not require registration?A . Pledge of company assetsB . Prospectus C . Book Debts D . Any share in a ship

60..Who is an authorised person under FEMA

A . Any bank B . Authorized Money ChangerC . Authorised DealerD . All the above

61.. The mortgagor agrees that in the event of his failing to pay according to his contract, the mortgagee has the right to sell the mortgaged property and recover his dues. Identify the mortgage

A . Simple B. UsufructuaryC . Conditional Sale D. English

62..On payment of the money the mortgagee will re transfer the property to the mortgagor. Which is that mortgage

A. Equitable B. SimpleC. EnglishD. Conditional Sale

63..Which statement is trueA . Simple Mortgage has to be created in a

Notified AreaB . English Mortgage Private Sale is not

thereC . Equitable Mortgage Registration is not

applicableD . Simple Mortgage Deed to be registered

within 30 days of execution

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