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JAIIB Practice Questions

Principles and Practices of Banking
1. Capital Market in India is regulated by
6. Which of the following term does not
(a) RBI
belong to the capital market?
(b) PFRDA
(a) NSE
(c) SEBI
(b) IPO
(d) IRDAI
(c) KPO
Answer: (c)
(d) FPO
Answer: (c)
2. Hedging means
(a) Its a type of share
7. Which of the following is/are responsible
(b) It comes under money market for the fluctuations in the Sensex?
(c) When an investor invests its funds in (a) Political Instability
different sectors to minimise the risk
(b) Rain
(d) When investor invests its fund in a single
(c) Elections Results
company to raise funds for the company
(d) Monetary Policy
Answer: (c)
(e) All of the above
Answer: (e)
3. Which of the following cannot be included
in the money market?
8. Cash Reserve Ratio decided by RBI under
(a) Call or notice company
Section ............Act
(b) Certificate of deposit
(a) Section 42 of RBI Act
(c) Corporate securities
(b) Section 42 of BR Act
(d) Treasury Bills (c) Section 42(1) of RBI Act
(e) None of the above (d) Section 42(1) of BR Act
Answer: (c) Answer : (c)

4. Who regulates the commodity market? 9. Distribution of Insurance products as

(a) FMC corporate Agents is called ............
(b) SEBI (a) Insurance selling
(c) MoF (b) Bancassurance
(d) RBI (c) Indemnity
(e) Ministry of Commerce (d) Insurance guarantee
Answer: (a) Answer : (b)

5. How many companies are included in the 10. Call money is available for ..........
Sensex Index? (a) One day
(a) 20 (b) Two day
(b) 25 (c) Seven days
(c) 30 (d) Fifteen days
(d) 32 Answer : (a)
Answer: (c)
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11. Cost push inflation is due to....... 16. If there is delay in reporting to RBI by
(a) High demand currency chest or there is double/excess
(b) Low demand reimbursement, RBI charges interest at.....
(c) low cost of production (a) BANK RATE
(d) High cost of production (b) Bank rate + 1%
Answer : (d) (c) Bank rate + 2%
(d) Bank rate +3%
12. Contract to perform the promise or Answer : (c)
discharge the liability of a third person in case
of his default can be termed as......... 15. Inflation in India is measured on the basis
(a) Bill finance of
(b) indemnity (a) WPI
(c) guarantee (b) CPI
(d) insurance (c) BOTH
Answer : (c) (d) NOT
Answer : (b)
13. Banker customer relationship in standing
instruction ........... 16. Funding risk, time risk and call risk are
(a) Bailor & bailee types of............
(b) Agent & principal (a) Liquidity risk
(c) pledgor & pledgee (b) Solvency risk
(d) Guarantor & guarantee (c) Activity risk
Answer : (b) (d) Leverage risk
Answer : (a)
14. ................of Central Bank is to ensure that
proper capital has been provided for risk 17. Risk arising out of non-receipt of expected
exposure under Pillar II of Basel II: in flow of funds due to accounts turning as
(a) Market discipline NPA is known as .........risk:
(b) Supervisory review (a) Call risk
(c) Capital adequacy requirement (b) Time risk
(d) All of these (c) Funding risk
Answer : (b) (d) All of the above
Answer : (b)
15. Loss due to inadequacy or failure of
system, process, people or due to external 18. SEBI was established in which year:
events is called: (a) 1990
(a) Operational risk (b) 1989
(b) Credit risk (c) 1992
(c) Business risk (d) 1988
(d) Market risk Answer : (c)
Answer : (a)
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19. Risk of default by one financial institution 23. ......... has constituted two Funds
leads to default by other financial institutions constitution of two funds – Financial Inclusion
is called: Fund (FIF) and Financial Inclusion Technology
(a) 1.Embedded risk Fund (FITF) to meet the costs of various
(b) 2.CFR promotional and developmental initiatives
(c) 3.Skin in the game that will lead to better credit absorption
(d) 4. Rippling effect capacity among the poor and vulnerable
Answer : (d) sections and for application of technology for
facilitating the mandated levels of inclusion.
20. Risk of prepayment of loans or premature Since July2015, the FIF and FITF have been
withdrawal of deposit is called: merged into a single Financial Inclusion Fund
(a) Liquidity risk (FIF)
(b) Call risk (a) RBI
(c) Embedded risk (b) NABARD
(d) Funded risk (c) SEBI
Answer : (d) (d) CO-OPERATIVE SOCIETIES.
Answer : (b)
21. The Reserve bank of India PRISM stands
for........... Is a web based end- to –end 24. .......... means the capturing live photo of
workflow automation system, to strengthen the client and officially valid document or the
compliance by supervised entities proof of possession of Aadhaar, where offline
(a) Platform for regulated entities for verification cannot be carried out, along with
integrated supervision and monitoring the latitude and longitude of the location
(b) Platform for reserved entities and where such live photo is being taken by an
integrated supervision and monitoring authorised officer of the reporting entity (RE).
(c) Platform for regulated entities for (a) Money laundering
integrated system and messaging (b) Smurfing
(d) Platform for responsive enterprises for (c) Digital KYC
integrated system and messaging (d) Monetization
Answer : (a) Answer : (c)

22. .........................Rate is backward-looking 25. NBCFDC stands for .............

and historic and is based on transactions in (a) National bankers class for developing
the Treasury repurchase market and is seen companies
as preferable to LIBOR since it is based on (b) National Backward Classes Finance &
data from observable transactions rather Development Corporation
than on estimated borrowing rates. (c) National banks citatory for developing
(a) The sterling overnight index average communities
(b) Secured overnight financing rate (d) National backward classes fund &
(c) Swiss average rate overnight depository companies
(d) Tokyo overnight average rate Answer : (b)
Answer : (b)
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26. Under New Swarnima for Women scheme, 30. What is the maximum amount of fund
women belonging to backward classes living deposited under the Public Provident Fund:
below double the poverty line can obtain loan (a) 0.5 Lakh
upto Rs.1,00,000/- @......... (b) 1 Lakh
(a) 5% p.a (c) 1.5 Lakh
(b) 7% p.a (d) 2 Lakh
(c) 8% p.a Answer : (c)
(d) 12% p.a
Answer : (a) 31. Which one of the following is not a
function of financial market:
27. NCDEX stands for ...................and it is a (a) Mobilization of savings
nation-level, technology driven on-line (b) Price determination of securities
recognised stock exchange with an (c) Floating of companies
independent Board of Directors and (d) Lowering transaction cost
professional management. Answer : (c)
(a) National Commodity & Derivatives
(b) Exchange Limited 32. As per BASEL III, the risk weight on
(c) National commodity & demutualized exposure to government securities issued by
exchange limited the central government is......
(d) Nationally cumulated & dematerialized (a) 0%
exporters limited (b) 5%
(e) 4.National commodity & devalued (c) 8%
exchange limited. (d) 9%.
Answer : (a) Answer : (a)

28. The institution which provides a platform 33. RBI can issue notes of denomination
for trading of existing securities having long- Rs................to Rs..........:
term maturity: (a) 1 to 2000
(a) SEBI (b) 1 to 5000
(b) WTO (c) 1 to 10000
(c) Stock exchange (d) 2 to 10000
(d) RBI Answer : (d)
Answer : (c)
34. FDI and Portfolio Investment in
29. Formula to compute Capital adequacy nationalized banks are subject to overall
ratio is ....... statutory limits of ..............as provided under
(a) Debt/ Cap Section 3 (2D) of the Banking Companies
(b) Cap/equity (Acquisition & Transfer of Undertakings) Act.
(c) Cap/RWA (a) 10%
(d) RWA/Cap (b) 20%
Answer : (c) (c) 49%
(d) 74%
Answer : (b)
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35. Which section of the Banking Companies 39. Under ...... of the Reserve Bank of India
(Acquisition and Transfer of Undertakings) Act, RBI has sole right to issue currency notes
Act, 1970, allows the government to decide of various denominations except one rupee
on key aspects of the bank, including its notes.
capital structure, constitution of the board, (a) Section 8
amalgamation with other banks, etc: (b) Section 12
(a) Section 9 (c) Section 18
(b) Section 7 (d) Section 22
(c) Section 12 Answer : (d)
(d) Section 22
Answer : (a) 40. ................ Is the best indicator of
country’s growth
36. A .................is a corporate structure (a) GDP
which isolates illiquid and high risk assets (b) GNP
(typically non-performing loans) held by a (c) NDP
bank or a financial organization, or perhaps a (d) NNP
group of banks or financial organizations. Answer : (a)
(a) Debt bank
(b) Bad bank 41. Break even point is a level of sales at
(c) Commercial bank which there is.........
(d) Global bank (a) Only profit receipt
Answer : (b) (b) Only loss occurred
(c) No profit no loss
37. .............shall be the “Gateway for Bullion (d) Both profit & loss occurred
Imports into India”, wherein all the bullion Answer : (c)
imports for domestic consumption shall be
channelized through the exchange. 42. .......... Means the freedom to convert to
(a) Indian bullion market financial assets into foreign financial assets
(b) Indian bullion reserve and vice versa
(c) International bullion exchange (a) Asset conversion
(d) International bullion reserve (b) Currency conversion
Answer : (c) (c) Current account convertibility
(d) Capital account convertibility
38. For capital adequacy purposes, risk weight Answer : (d)
for personal loans is......
(a) 50% 43. Which category of banks are under dual
(b) 100% control of government and RBI:
(c) 125% (a) RRBs
(d) 200% (b) Public sector banks
Answer : (c) (c) Private Banks
(d) Cooperative banks
Answer : (d)
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44. The loan to value ratio for a home loan up 49. Hypothecation is defined under which of
to Rs. 30 lakh as stipulated by RBI is the following act:
(a) Maximum 80 % (a) Indian Contract act 1872
(b) Maximum 75 % (b) Negotiable Instrument Act.
(c) Maximum 60 % (c) Transfer of property Act.
(d) Maximum 90 % (d) SARFAESI Act, 2002
Answer : (d) Answer : (d)

45. Under Consumer Protection Act, the 50. The interest rate at which the central bank
district commission can entertain case of a country lends money to commercial
involving an amount of: banks for up to 90 days , is termed as:
(a) Up to Rs. 20.00 lakh (a) Bank rate
(b) Up to 50 lakh (b) Base rate
(c) Up to 100.00 lakh (c) Repo rate
(d) There is no such limit (d) Reverse repo rate
Answer : (b) Answer : (c)

46. The service which is concerned with the 51. Certificate of Deposits (CDs) may be
financing and collection of account issued by:
receivables in domestic trade is called (a) Scheduled Commercial Banks
(a) securitization; (b) Regional Rural Banks
(b) factoring; (c) Small Finance Banks
(c) forfeiting; (d) All of the above
(d) bancassurance Answer : (d)
Answer : (b)
52. A 'Customer' is defined as: a person or
47. In case of the death of a partner, the entity that maintains an account and/or has a
operations in the bank account are stopped. business relationship with the bank , as per
The operations can be allowed in the existing the provision of:
account: (a) Indian Companies Act.
(a) with the consent of remaining partners if (b) KYC Guidelines
they want to continue the firm; (c) General Clauses Act.
(b) with the consent of legal heirs and existing (d) Negotiable Instrument Act.
partners; Answer : (b)
(c) with the consent of remaining partners if
they want to wind up the business of the 53. When a manufacturer of a product keeps
firm the product price at a higher level considering
(d) at the discretion of the bank that the buyers would perceive the product to
Answer : (c) be of better value and quality, this is called
_______ pricing.
48. Revenue expenditure are: (a) 1.Geographical pricing
(a) Day to day expenditure (b) 2.Promotional pricing
(b) Monthly (c) 3. Market skimming pricing
(c) Yearly expenditure (d) 4. Psychological pricing
(d) Half yearly Answer : (d)
Answer : (a)
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54. Which sector has the highest share in GDP 59. Nifty is the index of
of India. (a) BSE
(a) Agriculture (b) NSE
(b) Industrial (c) MCX
(c) Service (d) NASDAQ
(d) All of the above Answer : (b)
Answer : (c)
60. .............. is issued by court when a person
55. Who headed the committee appointed by dies without leaving a Will
RBI for financial inclusion. (a) Letter of credit
(a) Kumar Manglam (b) Letter of guarantee
(b) Nachiket Mor (c) Letter of administration
(c) Chakravarti (d) None of these
(d) N.K.Singh Answer : (c)
Answer : (b)
61. In the case of DD, Drawee is............
56. Wholesale Price Index is calculated on...... (a) issuing bank
basis for food inflation and....... for aggregate (b) Receiving bank
inflation. (c) Person who demanded
(a) Daily, weekly (d) All of the above
(b) Weekly, yearly Answer : (a)
(c) Daily, monthly
(d) Weekly, monthly 62. Complaints under Consumer forum should
Answer : (d) be dealt with within (Where no testing of
commodities is required) ............ days.
57. Which of the following instrument has (a) 30
three parties i.e., drawer, payee and drawee, (b) 45
to the instrument (c) 60
(a) Bill of exchange and cheque (d) 90
(b) Bill of exchange and promissory note Answer : (d)
(c) Promissory note and cheque
(d) Promissory note and demand draft 63. Under RBI KYC directives, CFT stands for
Answer : (a) (a) Consuming finances of terrorism
(b) Combating financing of terrorism
58. A person is liable for Tax Deduction at (c) Combating funding for territories
Source (TDS) at ..... at the time of payment of (d) Consuming food for territories
the transfer of virtual digital assets. Answer : (b)
(a) 6%
(b) 1% 64. A bond issued at a discount and repaid at
(c) 5% its face value is called,
(d) 8% (a) Coupon bond
Answer : (b) (b) Convertible bond
(c) Commercial bond
(d) Zero coupon bond
Answer : (d)
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65. Full KYC is required at least once in ........ 70. A type of transferable financial instrument
years in case of high risk customer. traded on a local stock exchange of a country
(a) 10 year but represents a security issue by a foreign
(b) 8 year publicly listed company
(c) 2 year (a) Depository receipt
(d) 12 year (b) Derivative
Answer : (c) (c) Option
(d) Participatory notes
66. ......... is SEBI's online platform that Answer : (a)
provides a centralised database of all
complaints. 71. Which category of banks are under dual
(a) APPWAY control of government and RBI:
(b) 2.ALKAMI (a) RRBs
(c) FINFLUX (b) Public sector banks
(d) SCORES (c) Private Banks
Answer : (d) (d) Cooperative banks
Answer : (d)
67. Committee on Bankruptcy Law headed by
(a) T.K. Vishwanathan 72. The functions of purchase of receivable,
(b) C.K. Chakravarthy maintenance of receivable ledgers and
(c) N.K Singh collection of dues on due date, under
(d) Nachiket Mor factoring becomes the function of
Answer : (a) (a) Seller
(b) Factor
68. Minimum capital required for Small (c) Buyer
Finance Bank is (d) A & C
(a) Rs 100 cr Answer : (b)
(b) Rs 200 cr
(c) Rs 500 cr 73. Clearing house facility for payment and
(d) Rs 1000 cr delivery of securities is provided by
Answer : (b) (a) SEBI
(b) Stock Exchange
69. The purpose for which a company raises (c) Clearing Corporation of India
the loan from a bank should be mentioned in (d) All of the above
which of the following documents of a Answer : (d)
company
(a) Memorandum of Association; 74. Aggregate Capital Market exposure of a
(b) Articles of Association; bank should not be more than........ Of the net
(c) Certificate of Incorporation; worth of the bank.
(d) Certificate of Commencement of Business (a) 20%
Answer : (a) (b) 30%
(c) 40%
(d) 50%
Answer : (c)
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75. Authorized capital of a nationalized bank 80. Segmentation on basis of values and
cannot be less than Rs. attitudes and behavioural patterns is an
(a) 1000cr example of ......
(b) 2000cr (a) geographic location
(c) 3000cr (b) cultural factors
(d) 5000cr (c) economic factors
Answer : (c) (d) political and legal factors
Answer : (b)
76. Who regulates all the insurance related
products and general insurance companies 81. Targeting affluent customers with
(a) SEBI luxurious goods is an example of ......
(b) IRDAI (a) geographic segmentation
(c) Tariff Advisory Committee (b) income segmentation
(d) All the above (c) psychographic segmentation
Answer : (b) (d) behavioral segmentation
Answer : (b)
77. The loan to value ratio for a home loan up
to Rs. 30 lakh as stipulated by RBI is 82. Segmentation of international markets on
(a) Maximum 80 % basis of monetary regulations is an example
(b) Maximum 75 % of ......
(c) Maximum 60 % (a) geographic location
(d) Maximum 90 % (b) cultural factors
Answer : (d) (c) economic factors
(d) political and legal factors
78. Under Consumer Protection Act, the Answer : (d)
district commission can entertain case
involving an amount of: 83. Direct marketing through which products
(a) Up to Rs. 20. lakh are sold directly to customer on phone call is
(b) Up to 50 lakh classified as ......
(c) Up to 100.00 lakh (a) telephone marketing
(d) There is no such limit (b) online marketing
Answer : (b) (c) offline marketing
(d) offline marketing
79. _____ is a science and art of exploring , Answer : (b)
creating and delivering value to satisfy the
need of a target Market at a profit: 84. How much loan can be sanctioned by
(a) Targeting appropriate authority within powers
(b) Segmenting delegated to him to any relative of their own
(c) Marketing director or directors of other banks or relative
(d) positioning of director of another bank?
Answer : (c) (a) up to Rs 25 lakh
(b) Rs 25 lakh and above
(c) Less than Rs 25 lakh
(d) None of these as loan to relatives of bank's
directors can not be granted without RBI
permission
Answer : (c)
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85. The small companies/organizations that 90. In agriculture finance priority sector
have been created exclusively to deal in govt. lending, Loans for setting up of Agriclinics and
securities are called: Agri-business centres fall under which one of
(a) NBFCs the following?
(b) mutual funds (a) Farm Credit
(c) primary dealers (b) Agriculture Infrastructure
(d) asset management companies (c) Ancillary Services
Answer : (c) (d) Food Processing
Answer : (c)
86. As a cover for bank note issue, RBI keeps
some minimum value of total approved assets 91. Which of the following statement DOES
in the form of: NOT necessarily indicate the involvement of
(a) cash and bank balances 'test marketing' methods?
(b) cash, gold coins and bank balances (a) User acceptance testing (UAT) in software
(c) gold coins, bullion and foreign securities development
(d) all the above (b) For retail products it involves placement in
Answer : (c) a limited number of stores
(c) Marketers use A/B testing to send one
87. A cheque drawn by a Power of Attorney advertisement to some users and a
holder is presented for payment. You come to different one to others
know through reliable sources that the PA (d) It connotes a product's entry into the mass
holder has died. Which of the following market
actions will you take? Answer : (d)
(a) Return the cheque as agency is terminated
(b) Pay the cheque as Principal is alive 92. A firm consisting of not more than how
(c) Pay the cheque after obtaining Principal’s many partners or a company incorporated
confirmation under Indian Companies Act, 1956 can be a
(d) None of these bank?
Answer : (b) (a) 10
(b) 15
88. One of the objectives of Style (c) 20
improvement is ...... (d) No such limit
(a) Products' versatility Answer : (a)
(b) Aesthetic appeal
(c) Durability 93. Foreigners or Non-Resident Indians can
(d) Convenience invest in Indian stock market without
Answer : (b) registering with SEBI through which of the
following?
89. How many types of diversification are (a) Global Depository Receipt
generally observed? (b) American Depository Receipt
(a) 2 (c) Participatory Notes
(b) 3 (d) Masala Bonds
(c) 4 Answer : (c)
(d) 5
Answer : (b)
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94. Which among the following notes is/are 97. An authority given by the account holder
not issued presently by Reserve Bank of in favour of a third person to do certain acts
India? on his behalf is called
(a) Rupee 1 note (a) Power of Attorney
(b) Rupees 1000 note (b) Mandate
(c) Rupees 20 note (c) Banker's Lien
(d) Both 1 and 2 (d) Garnishee Order
Answer : (d) Answer : (b)

95. Which of the following gap occurs in 98. Which of the following categories are
Customer Relationship Management (CRM) eligible under priority sector lending?
when there is inadequate market research? a. Agriculture
(a) gap is between the service expected by the b. Micro, Small and Medium Enterprises
wholesalers/retailers and company (MSMEs)
perception of consumer expectations c. Import Credit
(b) gap is between the service expected by the d. Housing
customer and company perception of e. Social Infrastructure
consumer expectations (a) a, b, c
(c) gap is between the service expected by the (b) a, b, c, d, e
customer and stock market's perception of (c) a, b, d, e
consumer expectations (d) b, c, d, e
(d) gap is between the service expected by the Answer : (c)
customer and government's perception of
consumer expectations 99. National Payments Corporation of India
Answer : (b) (NCPI) is promoted by ......
(a) SEBI
96. Which one of the following should a bank (b) RBI
do in case of non- operation of locker by a (c) GoI
high-risk hirer for more than one year and (d) Major Public and Private Sector Banks
remains not operated even after bank asking Answer : (b)
the hirer to operate?
(a) Bank should give one more chance to hirer 100. Which of the following is not the
to operate common objective pursued by firms for short
(b) Bank should consider breaking open the term?
locker in the presence of District Magistrate (a) Profit optimization
only (b) Profit maximization
(c) Bank should consider breaking open the (c) Minimum return on sales turnover
locker in the presence of police (d) Fast turnaround or early cash recovery
(d) Bank should sue the hirer Answer : (a)
Answer : (c)
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101. If a bond is issued with the provision that 105. A good seller should have the following
the investor has option to replace the bond quality/qualities?
with equity at a fixed price, it is called ...... (i) Devotion to the work,
(a) Coupon bond (ii) Submissive,
(b) Convertible bond (iii) Sympathy
(c) Preference bond (a) Only (i) and (ii)
(d) Zero coupon bond (b) Only (i) and (iii)
Answer : (b) (c) Only (ii) and (iii)
(d) (i), (ii) and (iii)
102. Which of the following statements is/are Answer : (d)
correct?
(i) Price exist in different forms for products 106. Effective marketing helps in ......
of different nature, (i) Developing new products,
(ii) Price affects the consumer behavior in (ii) Creating a competitive environment,
deciding about acquiring the product, (iii) Building demand for product
(iii) Price is the only element that produces (a) Only (i) and (ii)
revenues (b) Only (i) and (iii)
(a) Only (i) and (ii) (c) Only (ii) and (iii)
(b) Only (i) and (iii) (d) (i), (ii) and (iii)
(c) Only (ii) and (iii) Answer : (d)
(d) (i), (ii) and (iii)
Answer : (d) 107. Home loans are granted to ......
(a) Individuals
103. Which of the following is not the (b) Institutions
professional market research agency? (c) Builders
(a) ORG (d) all of these
(b) MARG Answer : (a)
(c) DMA
(d) IMRB 108. ESOP stand for ......
Answer : (c) (a) Efficient Service of Promises
(b) Effective System of Projects
104. What are the benefits of credit card for (c) Employee Stock Option Plan
its holder? (d) Essential Security of Project
(i) Card holder is relieved of the Answer : (c)
risk/Botheration/tension of carrying cash
while staying in hotels, dinning in restaurants, 109. Which of the following is the benefit of
shopping, buying air or rail tickets etc, Depositories?
(ii) Card holder can draw money from ATMs (a) Reduction in the share transfer time of the
(a) Only (i) buyer
(b) Only (ii) (b) Reduced risk of stolen, fake, forged shares
(c) Either (i) or (ii) (c) No stamp duty on transfer of shares in
(d) Both (i) and (ii) dematerialized form
Answer : (d) (d) All of the above
Answer : (c)
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110. In the process of issuing a Garnishee 115. Which of the given statements is/are not
order, court first issues: associated with Derivatives?
(a) Order Nisi (a) Derivatives are financial instruments whose
(b) Order primary value depend on the value of some
(c) Order attachment underlying assets.
(d) Order absolute (b) Derivatives do not have any physical
Answer: a existence but emerge out of a contract
between two parties.
111. Which of the following is the benefit of (c) Derivatives do not have a value of their own
Depositories? but their value, in turn, depend on the
(a) Reduction in the share transfer time to the value of their physical assets which are
buyer called the underlying assets.
(b) Reduced risk of stolen, fake or forged (d) All of the above
shares (e) None of the above
(c) No stamp duty on transfer of shares in Answer : (e)
dematerialized form
(d) All of the above 116. Which of the following units guarantees
Answer: (d) that all buying and selling will be made by
traders?
112. Hedging means (a) Professional house
(a) Its a type of share (b) Trading house
(b) It comes under money market (c) Guarantee house
(c) When an investor invests its funds in (d) Clearing house
different sectors to minimise the risk (e) None of the above
(d) When investor invests its fund in a single Answer : (d)
company to raise funds for the company
Answer: (c) 117. Identify the correct pair of financial
institution and its regulatory body in India:
113. Which of the following cannot be i. Nidhi companies – State govt
included in the money market? ii. Housing finance companies – RBI
(a) Call or notice company iii. Venture capital companies – SEBI
(b) Certificate of deposit iv. Chit fund – State govt
(c) Corporate securities (a) All except i
(d) Treasury Bills (b) All except iv
(e) None of the above (c) All are correct
Answer: (c) (d) All except ii
Answer : a
114. Who regulates the commodity market?
(a) FMC 118. The main function of SEBI is/are:
(b) SEBI (a) To protect the interests of investors in
(c) MoF securities
(d) RBI (b) To promote the development of the
(e) Ministry of Commerce securities market
Answer: (a) (c) To regulate securities market
(d) To promote insider trading
(e) All except d
Answer : e
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119. Bonus issue is also known as: 123. __________ is the organisations,
1. Scrip issue institutions that provide long term funds.
2. Capitalization issue (a) Capital market
3. Rights issue (b) Money market
(a) Only 1 (c) Primary market
(b) Only 2 (d) Secondary market
(c) Only 1 and 3 Answer: a
(d) Only 1 and 2
(e) All 1, 2, 3 124. When securities are allotted to
Answer : d institutional investors & some selected
individuals is referred to as _________.
120. NSDL is promoted by (a) Initial public offer
1. BSE (b) Offer through prospectus
2. IDBI (c) Private placement
3. NSE (d) Offer for sale
(a) 2, 3 only Answer: c
(b) 1, 2 only
(c) Only 3 125. For Mobile banking registration, which of
(d) Only 1 the following option that cannot be used for
Answer : c this purpose?
(a) Through ATM channel
121. Which of the following statement is/are (b) At BC level authentication
correct about chicken market? (c) Sending e-mails with biometric
1. In chicken market there is a downward (d) At passbook printing counters /kiosks
trend of the indexes of stock market (e) Branch visit
2. The investors who are not willing to take Answer: c
risk are chicken investors
3. The investors who are greedy are chicken 126. __________ is (only one seller) exists
investors when a specific person or enterprise is the
(a) 1 2 only only supplier of a particular commodity,
(b) 1 3 only which relates to a single entity's control of a
(c) 1 only market to purchase a goods or service.
Answer : d (a) Monopoly
(b) Oligopoly
122. Investment in unencumbered (c) Monopsony
instruments under SLR include which among (d) Competitive market
the following? (e) None of the above
(a) T Bills Answer: a
(b) Dated Govt securities
(c) Both a and b
(d) None
Answer: c
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127. ____ is (few sellers) which consists of a 130. On the request of its customer Pappu,
few entities dominating an industry. Commercial Bank's branch, transferred the
(a) Monopoly account to its branch. A cheque was
(b) Oligopoly presented on the first (transferor) branch
(c) Monopsony which it returned with the reason 'refer to
(d) Competitive market drawer'. Customer claimed damages from the
(e) None of the above bank;
Answer: b (a) Bank is liable to the customer for not
having returned the cheques with a proper
128. Considering the progress made by reason
Payment Banks in furthering financial (b) Bank is liable to the customer for having
inclusion and with the objective of giving returned the cheques if the balance in the
more flexibility to the PBs, it has been other branch was adequate, where account
decided to enhance the limit of maximum was transferred.
balance at the end of the day: (c) Bank is not liable to the customer, as the
(a) ₹ 1 lakh per individual customer cheque could not have been paid, otherwise
(b) ₹ 2 lakh per individual customer (d) None of the above
(c) ₹ 5 lakh per individual customer Answer: a
(d) ₹ 50,000 per individual customer
Answer: b 131. Appu and his wife Bindu have a locker in
joint names and Appu is residing abroad.
129. The hirer of a safe deposit locker reports Bindu informs about loss of key of the locker
that the loss of key of the locker. In that case : and asks for breaking open the locker. Which
(a) He has to surrender the locker of the following is not the correct option?
(b) The safe will be broken open by the (i) Bank will not accept the request,
(c) representative of the manufacturer in the (ii) Bank can accept on basis of indemnity,
presence of hirer (iii) Bank can accept the request accompanied
(d) He will be advised to lodge FIR with police by power of attorney in her favour from Appu
authorities and thereafter it will be broken (a) Only (i) and (ii)
open in the presence of police inspector (b) Only (i) and (iii)
and a witness (c) Only (ii) and (iii)
(e) He will be issued a duplicate key or (d) (i), (ii) and (iii)
executing an indemnity bond Answer: a
Answer: d
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132. Which of the following is not a objective 136. A bank suffer loss due to adverse market
of RBI? movement of a security. The security was
(a) maintaining price stability while keeping in however held beyond the defeasance period.
mind the objective of growth Which type of risk bank has suffered?
(b) to facilitate external trade and payment (a) Credit Risk
and promote orderly development and (b) Reputational Risk
maintenance of foreign exchange market in (c) Operational Risk
India (d) Market liquidation Risk
(c) to give the public adequate quantity of Answer: d
supplies of currency notes and coins and in
good quality 137. Foreign exchange transactions: involve
(d) maintain public deposit to create monetary transactions:
confidence in payment and settlement (a) among residents of the same country
system (b) between residents of two countries
(e) None of the above (c) between residents of four or more
Answer: d countries
(d) among residents of at least three countries
133. Apna bank has given loan to Mr. Appu Answer: b
against security of railway receipt or goods
receipt. Which type of charge is created? 138. A settlement system in which the
(a) Pledge processing and final payment of funds
(b) Hypothecation transfer instructions takes place continuously,
(c) Assignment is called:
(d) Lien (a) debit clearing system
(e) Mortgage (b) credit clearing system
Answer: a (c) national clearing system
(d) real time gross settlement
134. What does the CIBIL score of -1denote? Answer: d
(a) highest likelihood of default
(b) lowest likelihood of default 139. A private limited company need not
(c) new to the field of credit submit the following document for opening
(d) have no credit history the account:
Answer: d (a) memorandum of association
(b) Articles of association
135. Which of the following is the risk of (c) certificate of incorporation
default on a debt that may arise from a (d) certificate of commencement of business
borrower failing to make required payment? Answer: d
(a) Market risk
(b) Credit risk 140. Technology has compelled the banks to
(c) Operational risk evolve a __________ Pricing system for
(d) Forex risk marketing better services which may
Answer: b sometimes result in higher:
(a) Opaque
(b) Increasing
(c) Decreasing
(d) Transparent
Answer: d
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141. The forfeiter is an intermediary between: 145. KCC scheme has been implemented on
(a) Exporter's bank and importer recommendations of which of the following
(b) Importer's bank and exporter committee?
(c) Importer and exporter (a) Narsinghman committee
(d) Exporter & his bank and importer & his (b) Gadgil committee
bank (c) Anant gitte committee
Answer: c (d) Kapoor committee
(e) RV Gupta committee
142. Which is/are correct as regard to Answer: e
smart/debit cards?
i) Banks are generally extending this facility to 146. In banking reference, credit risk refers to:
savings/current account, fixed deposit (a) Default of a banker in sanctioning credit
account holders with built in liquidity features limits to the borrower
ii) Smart/Debit card facility is extended also (b) Default of a banker in keeping sufficient
to loan account holders cost at branch level
(a) Only (i) (c) Default by a borrower in repayment of
(b) Only (ii) banks dues
(c) Either (i) or (ii) (d) All of the above
(d) Both (i) and (ii) Answer: c
Answer: a
147. Cross selling means:
143. RBI approval is required for appointment (a) One salesman selling to another salesman
of a chairman of a bank. Which of the (b) Selling across territories
following statements, is correct? (c) Selling additional products to existing
i) RBI approval is required for appointment of customers
a chairman of a private bank (d) Selling product BUY 1 GET 1 FREE basis
ii) RBI is empowered to remove top Answer: c
managerial personnel of a bank
iii) RBI may appoint suitable person in place 148. Mr Appu is maintaining a saving bank
of the person so removed: account which is showing a credit balance of
(a) Only (i) and (ii) Rs. 15000 on 30.09.2022 you receive a cheque
(b) Only (i) and (iii) of Rs. 15000 issued by Mr. Appu in clearing
(c) Only (ii) and (iii) what would be the course of action?
(d) (i), (ii) and (iii) (a) Bank has to pay the cheque if it is in order
Answer: d (b) Bank will not make payment advising the
drawer maintain minimum balance as per
144. CAR is required to be maintain by banks rules
in India as a ratio to risk weighted assets (c) The bank has to make the payment as there
which of the organization revaluate the same: is sufficient balance in the account to meet
(a) BIS the cheque under section 31 of NI act
(b) Ministry of finance (d) Bank makes a noting in recognizing slip to
(c) RBI "refer to drawer"
(d) Board director of the bank Answer: c
Answer: c
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149. The bank has received an information 153. The garnishee order does not attach the
that the one of the partners is an overdraft followings:
account has expired what action could you (a) Amount deposited 2 hours after the receipt
take? of the order
(a) Stop all the operations in the account (b) Undrawn balance in OD a/c
(b) Allow other partners to operate the (c) Amount received for safe custody
account (d) All of the above
(c) Obtain fresh account opening form signed Answer: d
by the surviving partners
(d) Close the existing account and open new 154. In case of MSME loan classified as
with signatures from the surviving partners standard assets provision is to be made at the
(e) None of the above rate of:
Answer: a (a) 0.25% of the outstanding amount
(b) 0.75% of the outstanding amount
150. Under PM Fasal Bima Yojna, what is the (c) 1% of the outstanding amount
premium rate for kharif crops? (d) 5% of the outstanding amount
(a) 2% of sum insured or actuarial rate, Answer: a
whichever is less
(b) 1.5% of sum insured or actuarial rate, 155. If garnishee order does not specify an
whichever is less amount, it will be applicable or not;
(c) 5% of sum insured or actuarial rate, (a) Applicable and full amount in the account
whichever is less will be attached
(d) None of the above (b) Applicable and half amount in the account
Answer: c will be attached
(c) Applicable and court mentioned amount in
151. A red flagged account is the account will be attached
a...................account. (d) Not applicable and no amount in the
(a) Potential Non-Performing Assets account will be attached
(b) Willful defaulter Answer: a
(c) Fraud prone
(d) Loss account 156. Cancellation of Enrollment for existing
Answer: c customers under Pradhan Mantri Jeevan
Jyothi Bima Yojana (PMJJBY) and Pradhan
152. Which of the following social media Mantri Suraksha Bima Yojana (PMSBY):
platform is famous for marketing through (a) Can be cancelled on customer submitting at
video only? written request
(a) LinkedIn (b) Can be cancelled by branch for undesirable
(b) Pinterest parties only
(c) Youtube (c) Can be cancelled only after 10 years
(d) Twitter (d) Cannot be cancelled at all
Answer: c Answer: a
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157. You receive a cheque in an overdraft 161. "Mr. Appu" a partner in “Appu & Co."
account for Rs.32,000.00. The debit balance in deposits a cheque drawn in his favour and
the account is Rs. 35,000.00 and the Over endorsed by him in the name of the firm for
Draft limit is Rs 60,000.00. What reason you credit to the firms account. You will-
will state while returning: (a) Not allow the same without verifying the
(a) Effects Not cleared genuineness of transaction
(b) Refer to drawer (b) Allow after getting consent of other
(c) Exceeds arrangement partners
(d) Endorsement incorrect (c) Not allowed as the Bank may be liable for
Answer: a conversion
(d) Collect the cheque if otherwise in order
158. If both the words bearer as well as order Answer: d
are written and none of these is deleted, the
cheque would be considered to be a: 162.Where nothing is mentioned about a
(a) Bearer cheque cheque being bearer or order, It should be
(b) Order cheque treated to be payable to:
(c) It can be order cheque or bearer it depends (a) It is considered as order cheque
on the discretion of the bank (b) It is considered as bearer cheque
(c) It can be bearer or order it depends on the
(d) It can be order cheque or bearer it depends
discretion of the bank
on the discretion of the payee
(d) It can be bearer or order it depends on the
Answer: a
discretion of the payee
Answer: a
159. The banker customer relationship in case
of a locker is that of:
163. Which of the following statement is not
(a) Lessee and lessor
correct about the close ended scheme?
(b) Trustee and beneficiary
(a) Restricts the freedom of entry and exit
(c) Agent and Principal
(b) It allows the investor to enter and exit at his
(d) Lessor and lessee convenience
Answer: d (c) It has a lock in period
(d) Investors cannot buy the units of a closed-
160. The MD of a Private Ltd company ended fund after its NFO period
endorses a cheque payable to the company in Answer: b
his favour and wants you to collect the same
in his personal account. What will you do: 164. What is the maximum number of HUFs
(a) Allow after verifying the genuineness of which can become partners in a partnership
endorsement firm?
(b) Allow only after verifying the genuineness (a) Maximum-2
of the transaction (b) Maximum-3
(c) Not allowed as the Bank may be liable for (c) Maximum- 4
conversion (d) HUFs cannot become partner in a
(d) Not allowed as cheque favouring a partnership firm
company cannot be endorsed Answer: d
Answer: c
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165. A and his wife W have a locker as either 169. In case of substandard assets having ab-
or survivor. Because of dispute, A asks the initio unsecured criteria, the provision is to be
bank not to allow an operation by W. When made at the rate of:
W comes to operate the locker. Bank will do: (a) 15% of the outstanding amount
(b) 25% of the outstanding amount
(a) Any of them can operate the locker (c) 40% of the outstanding amount
because it is either survivor (d) 100% of the outstanding amount
(b) Allow only joint operations as there is Answer: b
dispute between the customers
(c) Will not allow operations to W but will 170. "Right Issue" Is:
allow to A (a) Issue of securities to a select group of
(d) Allow operations by W as instructions are persons
either or survivor (b) Direct sale of securities from an unlisted
Answer: b company to the public for fixed price
(c) When a listed company proposes to issue
166. Which of following regulation pair does fresh securities to its existing shareholders
not match each other? (d) When a listed company makes a fresh issue
(a) Regulation of insurance market by- IRDAI of securities
(b) Regulation of capital market by- SEBI Answer: c
(c) Regulation of money market by- RBI
(d) Regulation of forex market by-SEBI
Answer: b 171. What is the meaning of operating cycle
in an industrial concern?
167. Ramesh and Suresh have a saving (a) Conversion of raw materials into semi
account with E or S operation mandate. A finished goods
cheque issued by Ramesh with the validation (b) Conversion of raw material into final goods
of the cheque extended under the signature (c) Conversion of raw material into finished
of Suresh was presented for payment. What goods than sundry debtors and back into
will bank do? cash
(a) Pass the cheque (d) Conversion finished goods into cash
(b) Return the cheque Answer: c
(c) Pass after getting signature of both
(d) Pass cheque as per discretion of the bank 172. Deposit accounts which have not been
Answer: a operated for more than 10 years are to be
classified as:
168. A cheque is signed by two trustee of (a) Inoperative accounts
trust one of them expired before the cheque (b) Dormant accounts
is presented for payment what bank will do? (c) Unclaimed accounts
(a) Stop payment (d) Dead accounts
(b) Pay the cheque Answer: c
(c) Ask the court order
(d) Return the cheque
(e) None of these
Answer: b
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173. What is the main tool of RBI under 177. What is the meaning of Pari Passu
monetary policy control money supply in Charge?
economy?
(a) Charge which enjoys priority
(a) Payment and clearing system
(b) Decreasing Floating Charges
(b) Repo rate and reverse repo rate
(c) Charge in favour of several creditors with
(c) Print new currency
equal priority
(d) Foreign exchange reserve
(d) It do not provide an equivalent right to the
Answer: b
share of specified assets of a borrowing
company to all the lenders
174. A depository participant
Answer: c
(a) is an investor who buys/sells shares
through the depository.
(b) Trades in the dematerialised shares.
(c) Destroys the share certificates and makes a 178. Which of the following RBI can use as a
credit entry for his clients. tool of credit control:
(d) is an agent of the depository and takes (a) Selective credit control measures
physical share certificates from his clients (b) CRR/SLR
and sends them for dematerialisation. (c) Bank Rate policy
Answer: d (d) Any one
Answer: d
175. A cheque dated/signed by one partner
before their death in respect of in partnership
accounts: 179. Requirement relating to CRR to be
(a) It should not be paid maintained by a banking company are given
(b) It should be paid in:
(c) It depends on the discretion of all (a) Section 42 of RBI Act, 1934
(d) It can pay on the order of the court (b) Section 42 of B. R. Act, 1949
Answer: a (c) Section 18 of B. R. Act, 1949
(d) Section 42 of RBI Act, 1934 for schedule
bank and Section 18 of B.R. Act, 1949 for
176. What is the maximum amount that can Non-schedule bank
be awarded by 'Banking Ombudsman? Answer: d
(a) Rs.10 lakh 180. Which type of NBFC out of the following
(b) Rs.5 lakh can be registered with RBI?
(c) Rs.20 lakh
(d) Rs.50 lakh (a) Asset Finance Company
Answer: c (b) Infrastructure Finance Company
(c) Investment Company
(d) All of the above
Answer: d
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181. The component of financial system 184. What is the an additional interest
consisting mainly of banks, financial subvention per annum for those farmers
institution, NBFCs, PDs is regulated by: repaying in time, i.e., from the date of
disbursement of the loan/s upto the actual
(a) PFRDA
date of repayment or upto the due date fixed
(b) SEBI
by the banks for repayment of such loan/s,
(c) MoF
whichever is earlier, subject to a maximum
(d) RBI
period of one year from the date of
Answer: d
disbursement?

(a) 2%
182. Making or issuing of a promissory note (b) 3%
expressed to be payable to bearer there of by (c) 4%
a person other than RBI or central govt. is (d) 7%
prohibited under: Answer: b

(a) Section 126 of NI Act, 1881

(b) Section 31 of NI Act, 1881
185. KCC scheme was further revisited in 2012
(c) Section 31 of RBI Act, 1934
by a working Group under the Chairmanship
(d) Section 24 of B. R. Act, 1949
of:
Answer: c
(a) Dr. M.S Swaminathan
(b) Shri T. M. Bhasin
183. For Short Term Loans for Agriculture and (c) Prof. V. M. Dandekar
Allied Activities availed through Kisan Credit (d) Dr. Dharm Narain
Card (KCC) during the financial year 2021-22, Answer: b
What is lending rate and rate of interest
subvention?
186. Which of the following is not the
(a) 4%, 2%
objective of KCC?
(b) 4%, 3%
(c) 7%, 2% (a) To meet the short term credit requirements
(d) 7%, 3% for cultivation of crops;
Answer: c (b) Post-harvest expenses;
(c) Produce marketing loan;
(d) Consumption requirements of farmer
household
(e) To build a dwelling unit for own purpose
Answer: e
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187. Reserve Bank of India (RBI) said it would 190. The scale of finance for different crops is
take up a pilot project for end-to-end decided every year by:
digitization of Kisan Credit Card (KCC) lending,
(a) State Level Technical Committee
developed by the central bank and its
(b) Block Level Technical Committee
subsidiary aiming to speed up the loan turn
(c) Individual banks
around time.
(d) District Level Technical Committee
(a) Reserve Bank Information Technology Answer: d
Private Limited (ReBIT)
(b) Indian Financial Technology and Allied
Services (IFTAS) 191. Who among the following is known as
(c) Reserve Bank Innovation Hub (RBIH) 'Father of crop Insurance' in India?
(d) Deposit Insurance and Credit Guarantee
Corporation of India (DICGC) (a) Dr. M.S Swaminathan
Answer: c (b) Dr. Verghese Kurien
(c) Prof. V.M.Dandekar
(d) Dr. Dharm Narain
Answer: c
188. A medium enterprise, where the
investment in plant and machinery or
equipment does not exceed:
192. The scale of finance for different crops is
(a) 1 crore rupees and turnover does not decided every year by:
exceed
(b) 10 crore rupees and turnover does not (a) State Level Technical Committee
exceed 50 crore rupees (b) Block Level Technical Committee
(c) 50 crore rupees and turnover does not (c) Individual banks
exceed 250crore rupees (d) District Level Technical Committee
(d) None of the above Answer: d
Answer: c

193. Who among the following is known as

189. Under CGTMSE scheme, Guarantee cover 'Father of crop Insurance' in India?
on unsecured part of the collateral security (a) Dr. M.S Swaminathan
under CGTMSE upto to the extent of: (b) Dr. Verghese Kurien
(a) Rs. 50 lakh (c) Prof. V. M. Dandekar
(b) Rs. 100 lakh (d) Dr. Dharm Narain
(c) Rs. 200 lakh Answer: c
(d) Rs. 500 lakh
Answer: c
194. Where a person in any of the towns,
which the State Government concerned may,
by notification in the Official Gazetted Specify
on this behalf, delivers to a creditor or his
agent document or title to immovable
property, with intent to create a security
thereon, the transaction is called a:

(a) Simple mortgage

(b) English mortgage
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(c) Equitable mortgage (b) Vertical Merger

(d) Anomalous mortgage (c) Extension Merger
Answer: c (d) Conglomerate
Answer: b

195. Labeling is important for three reasons-

promotional and legal reasons. What is the 199. Combining of two or more companies
third reason? into a single company where one survives
with its name and the others lose their
(a) Marketing
corporate existence is called:
(b) Branding
(c) Strategic (a) Merger
(d) Informational (b) Alliance
Answer: d (c) Consolidation
(d) Acquisition
Answer: d
196. There is imperative need for firms ,to
collect and analyze the data relating to
marketing for: 200. Letter of Credit is defined in the

(a) Enabling the top management to have a (a) Indian Contract Act
watchful control over the sales workforce (b) Negotiable Instruments Act
(b) Taking the needed steps for effective (c) Transfer of Property Act
marketing of their products (d) None
(c) Projecting the firm as having up to date Answer: d
knowledge about market condition,
(d) All of the above
(e) only (a) & (b) above 201. Which of the following is a formal and
Answer: b 'mutually agreed to' commercial collaboration
between companies, the partners pool,
197. After how many days does an account
exchange, or integrate specific business
become SMA-2?
resources for mutual benefits, yet they
(a) Principal or interest payment overdue up to remain separate businesses?
30 days
(a) Consolidation
(b) Principal or interest payment overdue
(b) Alliances
between 31-60 days
(c) Merger
(c) Principal or interest payment overdue
(d) Acquisition
between 61-90 days
Answer: b
(d) Principal or interest payment overdue
above 90 days 202. A revolving Letter of Credit is one which
Answer: c provides that the amount of drawing
stipulated in it will be available to the
beneficiary:
198. Merger of two companies that sell the
(a) Again and again as may be agreed between
same products in different markets or Two
the buyer and the seller within a stipulated
companies selling different but related
period.
products in the same market, it is known as:
(b) Any number of times
(a) Horizontal Merger (c) Only one once
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(d) None (b) performance bonds, bid bonds, warranties

Answer: a (c) Aggregate outstanding foreign exchange
contracts
(d) Equity settlements
203. Which of the following Guarantee in lieu Answer: d
of tender money/Earnest Money Deposit
207. Off-Balance Sheet Items are those items
(EMD), guarantee in lieu of security deposit
in the books of a bank, which are mentioned
and shipping guarantee?
in:
(a) Performance Guarantee
(a) Liability side of the balance sheet
(b) Financial Guarantee
(b) Assets side of the balance sheet
(c) Deferred Payment Guarantee
(c) Notes to the Balance Sheet
(d) General Guarantee
(d) Cash flow statement of the bank
Answer: a
Answer: d

204. Bank guarantee is one of the facilities

208. In SHG, if necessary, a maximum of_
that banks extend to their customers, Which
and in exceptional cases, where
of the following option is not correct?
essentially required, up to a maximum of_
(a) there are four persons in a contract of of the members in a group may be
guarantee taken from families marginally above the
(b) the person giving the guarantee is called poverty line living contiguously with BPL
the Guarantor or Surety, (Below Poverty Line) families.
(c) the person on whose behalf the guarantee
(a) 5%, 10%
is given is called the Principal Debtor
(b) 15%, 20%
(d) the person in favour of whom the
(c) 20%, 30%
guarantee is given is called the Creditor or
(d) 40%, 50%
Beneficiary
Answer: c
Answer: a

209. Which of the following statement is

205. A forward exchange contract is a firm
incorrect in respect of the SHG?
contract for the purchase/sale of a specified
quantity of a stated foreign currency at a pre- (a) Number of members in a group if exceed
determined exchange rate between the bank twenty, registration becomes compulsory
and its: (b) a self-help group may consist of ten to
twenty persons
(a) exporters
(c) In difficult areas like deserts, hills and areas
(b) importers
with scattered and sparse population and in
(c) both (a) and (b)
case of economically weaker and/ or
(d) none
physically disabled persons, this number
Answer: c
may be from five to twenty
(d) all members of the group should belong to
families above the poverty line
206. Which of the following is not Included in Answer: d
Off- Balance Sheet Items?

(a) general guarantees of indebtedness

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210. Forfeiting provides to the exporter 214. Which of the following statements is not
against receivables: true with regard to Treasury bills?

(a) 100 per cent financing (a) Are issued in the form of a promissory note.
(b) 80 per cent financing (b) They are highly liquid and have assured
(c) depending on the contract with the yield
forfeiter (c) They carry high risk of default.
(d) depending on the contract between (d) They are available for a minimum amount
exporter and importer of ₹25,000 and in multiples thereof.
Answer: a Answer: c

211. The type of arrangement under which a 215. Which of the following statements is not
bank pays the seller the value of the bill and true with regard to Commercial paper?
later collects it from the buyer on the due
(a) Is a long-term unsecured promissory note
date is called:
with a fixed maturity period.
(a) Bill discounting (b) It usually has a maturity period of 7 days to
(b) Factoring one year.
(c) Forfaiting (c) It is sold at a discount and redeemed at par.
(d) None (d) Companies use this instrument for bridge
Answer: a financing.
Answer: a

212. Forfaiting provides finance against the

export receivables to an exporter 216. Which of the following statements is not
true with regard to Call money?
(a) with recourse to the exporter
(b) without recourse to the exporter (a) It is short-term finance repayable on
(c) without recourse to the Importer demand.
(d) with recourse to the Importer (b) Its maturity period ranges from one day to
Answer: b fifteen days.
(c) There is a direct relationship between call
rates and other short-term money market
213. Which of the following statements is not instruments.
true with regard to money market? (d) It is used for interbank transactions
Answer: c
(a) It involves low market risk.
(b) It is situated at specific locations.
(c) Deals in unsecured and short-term debt
instruments.
(d) The instruments traded are highly liquid.
Answer: b
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217. Which of the following statements is not 221. What is used as an alternative to bank
true with regard to primary market? borrowing for large and creditworthy
companies,
(a) Is also known as the old issues market.
(b) It facilitates the transfer of investible funds (a) Commercial bill
from savers to entrepreneurs. (b) Commercial papers
(c) It deals with new securities being issued for (c) Call money
the first time. (d) None of the above
(d) It facilitates the transfer of investible funds Answer: c
from savers to entrepreneurs.
Answer: a
222. What is a method by which banks
borrow from each other to be able to
218. Raj Enterprises wishes to invest maintain the cash reserve ratio. :
₹1,10,000 in treasury bills. What is the
(a) Commercial bill
maximum number of treasury bills it can buy
(b) Commercial papers
with this fund?
(c) Call money
(a) 6 (d) None of the above
(b) 7 Answer: c
(c) 4
(d) 2
Answer: c 223. A rise in call money rates makes other
sources of finance such as commercial paper
and certificates of deposit :
219. Which of the following statements is true
(a) Expensive in comparison with banks who
with regard to financial markets?
raise funds from these sources.
(a) They link the households which save funds (b) Cheaper in comparison with banks who
and business firms which invest these raise funds from these sources.
funds. (c) Creates no effect on other sources.
(b) They work as an intermediary between the (d) None of the above.
savers and the investors by mobilising funds Answer: c
between them.
(c) They allocate funds available for investment
into their most productive investment 224. Stock exchanges provide an opportunity
opportunity. to the investors to disinvest and invest.
(d) All of the above Identify the related function of the stock
Answer: d exchange.

(a) Providing scope for speculation.

(b) Providing liquidity and marketability to
220. The allocated function is performed by:
existing securities.
(a) Financial market (c) Pricing of security.
(b) Capital market (d) Spreading of equity cult.
(c) Money market Answer: b
(d) All of the above
Answer: d
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225. The process of holding shares in 229. On this day, the exchange will deliver the
electronic form is known as share or make payment to the other broker,

(a) Demutualisation (a) Pay-in day

(b) Dematerialisation (b) Pay-out day
(c) Speculation (c) Transaction day
(d) None of the above (d) None of the above
Answer: b Answer: b

226. It acts like a bank and keeps securities in 230. When is a trade confirmation slip issued
electronic form on behalf of the investor, to the investor?

(a) Depository Participant (a) On placing an order

(b) Depository (b) On execution of the order
(c) Stock exchange (c) On settlement of the order
(d) None of the above (d) None of the above
Answer: b Answer: b

227. Identify the correct sequence of steps to 231. After the trade has been executed, the
be followed in the trading at Stock Exchange : broker issues a Contract Note to the investor
within :
(a) Opening a trading account and Demat
account, Placing an order, Settlement of (a) 52 hours
order, Execution of order (b) 24 hours
(b) Settlement of order, Opening a trading (c) 48 hours
account and Demat account, Placing an (d) 12 hours
order, Execution of order Answer: b
(c) Opening a trading account and Demat
account, Placing an order, Execution of
order, Settlement of order 232. SEBI has constituted a committee under
(d) Placing an order, Opening a trading account TK Viswanathan for .
and a Demat account, Execution of Order
Answer: c (a) Fair market conduct
(b) Manufacturing market conduct
(c) Partial market conduct
(d) Both a and c
228. It is a legally enforceable document
Answer: a
which is issued by a stock broker within 24
hours of the execution of a trade order:

(a) PAN number

(b) Unique Order Code
(c) Contract Note
(d) None of the above
Answer:
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233. What relationship is created when the 236. Recently RBI has introduced which of the
bank collects a cheque for clearing? following scheme related to digital
transactions in banking system for bank’s
(a) Holder for value
customer?
(b) Clearing member and principal
(c) Agent and principal (a) Reserve Bank Information Technology
(d) Collecting bank and holder Private Limited (ReBIT)
(e) None of the above (b) Payment and settlement systems act
Answer: c (c) Public Credit Registry (PCR)
(d) Ombudsman for digital transactions (ODT)
Answer: d
234. Apna Bank received a cheque of Rs.
20000 written in figure & Rs. Two lacs in
words. The bank: 237. What is MMID:-

(a) is required to return the cheque as the (a) ID for RTGS

mandate is not clear (b) ID for transfer of money IMPS
(b) is required to pay the lower of the amount (c) ID for opening account
written in words & figure (d) ID for transferring money through finacle
(c) is required to pay the amount in figures Answer: b
(d) is required to pay the amount written in
words
Answer: d 238. The person purchasing shares in the
hope of the raising of the value of shares in
future market is called:
235. AMFI is dedicated to developing the
(a) High market
Indian Mutual Fund Industry on professional,
(b) Bear Market
healthy and ethical lines and to enhance and
(c) Dear Market
maintain standards in all areas with a view
(d) Bull market
AMFI protecting and promoting the interests
Answer: d
of mutual funds and mutual funds unit
holders. What is the full form of AMFI?

(a) Associated of Mutual Funds in India

(b) Associate of Mutual Funds in India
(c) Association of Mutual Funds in India
(d) Applied to Mutual Funds in India
Answer: c
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239. An advance was given to a Mr. Appu 242. Deferred Payment guarantee is:
against pledge of stocks. The loan has
(a) It merely guarantees that if its customer
defaulted and bank wants to sell the stock.
fails to perform it will be liable to pay the
During the scrutiny of documents, it is
guarantee money and its customer’s client
observed that borrower has given authority
is the sole arbiter of its customer's
to bank to sell the stocks without notice to
performance.
borrower. How shall bank deal in this case?
(b) Guarantee issued when payment by
(a) Bank can sell the goods only with the applicant of guarantee is to be made in
permission of the court installments over a period of time. It is a
(b) Bank can sell the goods without financial guarantee.
intervention of the court and without giving (c) A guarantee is given to related parties if
notice to the borrower one company takes on the financial
(c) Bank can sell the goods without obligation of another company and fails to
intervention of the court but after giving meet the financial obligations.
notice to the borrower (d) An agreement by which one person
(d) Bank can sell the goods after obtaining undertakes
permission of the court and without giving Answer: b
notice to the court
Answer: c
243. Providing banking facilities to the poor
people of the society for mutual benefit of
240. What is the relationship between bank poor person as well as bank is called:
and customer in the case of standing
(a) Financial literacy
instructions?
(b) Narrow banking
(a) Agent and Principal (c) Universal banking
(b) Debtor and creditor (d) Financial inclusion
(c) Bailee and Bailor Answer: d
(d) Indemnified and Indemnifier
Answer: a
244. Capital adequacy is worked out based
on:
241. Which of the following invests its clients'
(a) Total demand and time liabilities
pooled funds into securities that match
(b) Net demand and time assets
declared financial objectives, It provide
(c) Risk weighted assets
investors with more diversification and
(d) Risk weighted liabilities
investing options than they would have by
Answer: c
themselves?

(a) Sponsor
(b) Asset Management Company
(c) Trustee
(d) Custodians
Answer: b
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245. A savings account was opened in the 248. In case of return of cheque, As per
name of a minor under guardianship of his Goiporia Committee, Such cheques to be
father to be operated by the father 5 years retruned to the customers within:
back. The minor has now become major.
(a) 12 hours
What will bank do?
(b) 24 hours
(a) Delete the name of the guardian and (c) 48 hours
continue the account in the single name of (d) 36 hours
the minor now turned major Answer: b
(b) Close the old account and must pay the
amount to the minor now major and not
allowed him to continue the account 249. The important feature of the negotiable
(c) Pay the amount to the natural guardian instrument is ......
accordingly
(d) Demand for the court order and pay (a) Consideration
accordingly (b) Transferable
Answer: a (c) Validity
(d) Unconditional
(e) All of above
Answer: e
246. An attempt to obtain sensitive
information such as username, password and
credit/debit card details for malicious reasons
by disguising as a trustworthy entity in an 250. An instrument in writing containing an
electronic communication is called: unconditional order, addressed to a banker,
to pay on demand a certain sum of money
(a) Hacking only to or to the order of certain person or to
(b) Viruses the bearer of instrument is called ......
(c) Spyware
(d) Phishing (a) Cheque
Answer: d (b) Bill of Lading
(c) Bill of Exchange
(d) Hundi
Answer: a
247. There has been crowding at bank
counters in Corporate Bank. The bank desires
251. In Manufacturing sector, small
to improve the service at reduced cost. Which
enterprises investment in plant and
of the following is the best alternative?
machinery is
(a) To install automatic teller machines a. Less than 25 lakhs
(b) Increase counters at the branch b. 10 Lakhs to 2 Crores
(c) Take new premises for additional counters c. 25 Lakhs to 5 Crores
(d) To provide Home Banking d. 5 Crores to 10 Crores
Answer: a Ans – c
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252. While opening an account in the name of 256. Fortnightly average borrowing
a Joint Hindu Family a JHF letter is obtained. It outstanding of Commercial Banks should not
will be signed by? exceed more than ...... % of their capital
a. Karta funds.
b. Adult Coparceners a. 100
c. Minor Coparceners b. 125
d. Only by a and b c. 150
Ans - d d. 175
Ans - a

253. The measurement and evaluation of

progress against the goals and targets of plans 257. The bank is required to comply with the
falls under... execution of the award of banking
a. Planning ombudsman within the bank is required to
b. Implementation comply with the execution of the award of
c. Control and review banking ombudsman within;
d. Analysis a. 7 days
Ans – c b. 15 days
c. 30 days
d. 60 days
254. ABC Company purchased Hear Music and
Ans - b
began making compilation music CDs to play
and sell in its stores. It has also tested new
restaurant concepts. It is considering which of 258. Relationship between Banker &
the following strategies? Customer in case of Deposit Account is ......
a. Product development a. Creditor- Debtor
b. Market development b. Bailer – Bailee
c. Diversification c. Debtor – Creditor
d. Market penetration d. Licensor – Licensee
Ans - a Ans - c

255. A cheque drawn by a Power of Attorney 259. There is a joint account in the names of A
holder is presented for payment. You come to and B to be operated upon by both of them
known through reliable source that Principal jointly. On the death of A, the credit balance
has died. Which of the following action you in the account is payable to ......
will take? a. B
a. Return the cheque b. B and Legal heirs of A Jointly
b. Pay the cheque c. Either a. or b.
d. Confirm the legal heirs of the principle d. None of these
c. None of these Ans - b
Ans - a
260. What can be a characteristic of Physical
Products?
a. Inseparability
b. Heterogeneity
c. Homogeneous
d. Perishability
Ans - c
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261. Apart from Product, price and place, 266. Mode of communication capable of
which is the other one in 4Ps? receiving and transmitting at all time (i.e.,
a. Profit two-way communication simultaneously
b. Plan possible) is ......
c. Promotion a. Simplex
d. People b. Semi duplex or half duplex
Ans - c c. Duplex
d. None of the above
262. The banking ombudsman may reject the Ans - c
complaint on the following grounds
a. complaint is without sufficient cause. 267. Which one doesn't offer voting rights?
b. complaint is not pursued with reasonable a. Equity shares
diligence. b. Preference shares
c. there is no loss or damage or inconvenience c. Bonus Shares
suffered by the complainant. d. Rights shares
d. any one or all of the above Ans - b
Ans - d
268. Which is not an objective of Test
263. Which of the following is not true in Marketing?
respect of Guardian to Minor? a. To know how the consumers and dealers
a. Guardian of Illegitimate minor child – react to handling, using and repurchasing the
Mother actual product
b. Guardian of Hindu married minor girl – Girl’s b. To learn the size of the market
Father-in-law, If Husband Minor c. To test the product in authentic consumer
c. Testamentary Guardian becomes effective settings
after death of father and mother d. All the above
d. Natural Guardian varies from religion to Ans - d
religion
Ans - b 269. Mode of communication capable of
receiving and transmitting both but only one
264. Which of the following forms of business at a time is ......
are permissible under BR Act: a. Simplex
a. Borrowing b. Semi duplex or half duplex
b. Issuance of Letters of Credit c. Duplex
c. Buying and selling of bullion d. None of the above
d. All of the above Ans - b
Ans - d
270. Who is eligible to issue CPs?
265. FIMMDA’s general principles and a. Corporates
procedures are applicable to: b. PDs
a. Fixed Income Markets c. FIs
b. Money Markets d. All of them
c. Derivatives Markets Ans - d
d. All of the above
Ans - d
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271. LC is issued by the opening bank on 277. A direct marketing channel is also called
request of ... ...... level channel
a. Seller a. Zero
b. Supplier b. One
c. Applicant c. Two
d. Beneficiary d. Three
Ans - c Ans - a

272. ...... are not Commercial Banks 278. In the recent years, important of
a. Public Sector Banks marketing has increased due to ...
b. Cooperative Banks a. Availability of information to customer
c. Private Sector Banks b. Target and customised communications and
d. Foreign Banks offerings
Ans - b c. Consumer has wider choices
d. All the above
273. The bank that makes payment to the Ans - d
beneficiary on receipt of documents as per
terms of Letter of Credit is... 279. In a book built issue allocation, RIIs, NIIs
a. Advising Bank and QIBs are in the ratio of
b. Negotiating Bank a. 30:20:50
c. Confirming Bank b. 35:50:15
d. Opening Bank c. 35:15:50
Ans - b d. 30:50:20
Ans - c
274. Equity shares are issued on redemption
of bond to the holder of ...... bond. 280. Bank can grant loans against ...
a. Coupon a. LIC Policy
b. Convertible b. CDs
c. Preference c. FD issues other bank
d. Zero Coupon d. Mutual fund
Ans - b Ans - a

275. NREP has been merged into : 281. CIBIL came into effect with effect from?
a. EAS a.1999
b. NRY b.2000
c. JRY c.2001
d. PMRY d.2002
Ans - c Ans - b

276. The deposit of cash under CRR 282. Which is not a retail deposit product?
requirement with RBI is ...... requirement. a. credit card
a. Voluntary b. term deposits
b. Discretionary c. senior citizen deposits
c. Mandatory d. No frills acct
d. None of the above Ans – a
Ans - c
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283. Marketing passes through the 287. Which of the following statements, is
management functions of ...... correct regarding nomination?
a. Analysing (i) Two or more hirers of a locker with joint
b. Planning signatures may nominate one or more
c. Controlling persons as nominee who may have
d. All the above access to the locker,
Ans - d (ii) Even a minor can appoint a nominee but a
major person has to sign on its behalf,
284. As per Foreign Exchange Regulation Act (iii) If the nominee dies before the death of
1973 which one of the following forms is to the depositors, the nomination automatically
be used by the exporter for declaring the terminates
exports made to all countries otherwise than a. Only (i) and (ii)
by post? b. Only (i) and (iii)
a. PP Forms c. Only (ii) and (iii)
b. G R Forms d. (i), (ii) and (iii)
c. V P Forms Ans - d
d. COD Forms
Ans - b 288. In case of Unitary elastic demand, the
value of Ed is ......
285. Which of the following conditions should a. Zero
be fulfilled by a business Enterprises b. One
providing any service under priority sector c. Infinite
loans? d. Greater than one
(i) The original cost of equipment does not Ans - b
exceed Rs. 20 lac with a working capital limit
of Rs. 10 lac or less, 289. Once a Bearer is always a bearer is
(ii) The aggregate of term loan and working applicable in respect of ......
capital should not exceed Rs. 20 lac a. A bill of exchange payable after 90 days
a. Only (i) b. A cheque
b. Only (ii) c. A demand promissory note
c. Either (i) or (ii) d. A certificate of deposit
d. Both (i) and (ii) Ans - b
Ans - d
290. Blue chip securities refer to ......
286. Which of the following statements, is a. shares of any company
correct? b. shares of companies, which are listed at any
a. RBI may decide interest rate to be charged of the stock exchange
by a Bank on individual loans c. shares of good companies
b. Margin amount on secured loans can be d. All of the above
decided by the RBI Ans - c
c. RBI may stipulate norms for the banks for
the commission to be charged on guarantee
d. Maximum amount of loan which can be
considered by a bank to a single party having
regard to the paid up capital, Reserves &
Deposits of the individual.
Ans - a
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291. When a bank lends money to the 295. The mortgagor who has redeemed the
corporate person the relationship between mortgage is entitled on redemption to the
bank and corporate person is ...... following right ......
a. borrower and lender a. To get back from the mortgagee, the
b. creditor – debtor mortgage deed and all the other related
c. debtor - creditor documents
d. customer and client b. To obtain possession of the mortgaged
Ans - b property
c. To have the mortgaged property re
292. Garnishee order is issued by ...... transferred at his cost to him or to such third
a. Police Officer person as he may direct
b. Revenue Officer d. All of the above
c. CBI Ans - d
d. Courts of Law
Ans - d 296. The DSS and ESS bring about a lot of
transparency in ......
293. The various dangers to any computer a. Data Processing System
system can be classified as ...... b. Cheque Processing
(i) Physical damage due to natural calamities, c. Decisions Making Process
(ii) Damage due to operational problems like d. Withdrawal Processing
power failure, System Ans - c
malfunction etc,
(iii) Human errors 297. Total investments made in all
a. Only (i) and (ii) subsidiaries and other entities that are
b. Only (i) and (iii) engaged in financial services activities
c. Only (ii) and (iii) together with equity investments in entities
d. (i), (ii) and (iii) engaged in non-financial services activities
Ans - d should not exceed ...... of the bank’s paid-up
share capital and reserves
294. Attachment order is issued by ...... a. 5 percent
(i) Income Tax Officer, b. 10 percent
(ii) Public Debt Officer, c. 20 percent
(iii) Sales Tax Officer d. 25 percent
a. Only (i) and (ii) Ans - c
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
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298. Choose the correct statement/s about 301. Which of the following statements, is
RTGS ...... correct?
(i) RTGS went live on March 26, 2004 for (i) Banks are required to submit a return of
settlement of inter-bank transactions, unclaimed deposits under section 26 of
(ii) From April 29,2004. the RTGS has been banking regulation Act, 1949,
opened for the settlement of customer (ii) This includes all the accounts which have
transactions, not been operated upon for ten years,
(iii) The receiving bank is under an obligation (iii) The return of unclaimed deposits is
to credit the beneficiary customer's account required to be submitted on 31st March of
within two hours of receiving the credit every year
notification at its payment systems gateway a. Only (i) and (ii)
a. Only (i) and (ii) b. Only (i) and (iii)
b. Only (i) and (iii) c. Only (ii) and (iii)
c. Only (ii) and (iii) d. (i), (ii) and (iii)
d. (i), (ii) and (iii) Ans - d
Ans - d
302. Which of the following is not a function
299. Eligibility Criteria for banks to apply for of capital market regulatory authority i.e.
PD licence ...... SEBI, in India?
(i) Minimum Net Owned Fund of 1,000 a. regulation of debt market
crore, b. control over the equity market
(ii) Minimum CRAR of 9 per cent, c. framing the rules for pension funds
(iii) Net NPAs of less than 3 per cent and a d. supervision over listed companies
profit making record for the last three years Ans - c
a. Only (i) and (ii)
b. Only (i) and (iii) 303. All pre-paid payment instruments issued
c. Only (ii) and (iii) in the country shall have a minimum validity
d. (i), (ii) and (iii) period of ...... from the date of
Ans - d activation/issuance to the holder.
a. One month
300. What type of function is carried by the b. Three months
banks under bancassurance? c. Six months
a. the banks develop their own insurance d. Twelve months
products and sell to their customers Ans - c
b. the banks develop their own insurance
products and sell through of other companies 304. Scheduled commercial banks (SCBs) and
c. the banks dstribute insurance products of primary dealers (PDs) have been allowed with
other companies to their customers as agents effect from November 2006, to cover their
d. the banks distribute insurance products of short positions within an extended period of
other companies to their customers as agents ......
with with-risk or without-risk features a. five trading days
Ans - c b. two trading days
c. short sales not permitted
d. none
Ans - a
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305. Real Time Gross Settlement System 309. The Officer who Issues a Notice under
means a payment system in which ...... SARFAESI Act should be at least
a. both processing and final settlement of a. Branch Manager
funds transfer instructions can take place b. Chief Manager
continuously c. Assistant General Manager
b. final transaction takes place at the end of d. Deputy General Manager
the day Ans - b
c. final payment is physically affected within 24
hours 310. Which is not correct with regard to
d. Final settlement of funds take place at 3 PM Marketing?
daily a. Focus is on the consumer
Ans - a b. Marketing is a broader concept than selling
c. Focus is on the products
306. A computer network mainly used to d. Profit maximises with customer satisfaction
share ...... Ans - c
a. Data
b. Software 311. Based on Product, markets can be
c. Hardware grouped into ......
d. All of the above a. Real Estate Market
Ans - d b. Regional Market
c. Cash/Spot Market
307. Audited copies of Balance sheet is to be d. Commodity Market
submitted to ...... Ans - a
(i) 3 copies to RBI,
(ii) 3 copies to 312. What is the time period under SARFAESI
Registrar of Companies, Act for replying the borrower, in case he
(iii) Annual General Body Meeting raises an objection for possession of the
a. Only (i) and (ii) asset:
b. Only (i) and (iii) a. 60 days
c. Only (ii) and (iii) b. 30 days
d. (i), (ii) and (iii) c. 7 days
Ans - d d. 3 days
Ans - c
308. What is the maximum time limit for
publishing a bank balance sheet in the 313. Govt. Securities are called gilt-edge
newspaper? securities because ......
a. Within 2 months from the date of balance (i) these securities carry fixed interest rate,
sheet (ii) they are easily realizable,
b. Within 3 months from the date of balance (iii) their prices generally do not fluctuate
sheet adversely
c. Within 6 months from the date of balance a. Only (i) and (ii)
sheet b. Only (i) and (iii)
d. No such time limit c. Only (ii) and (iii)
Ans – c d. (i), (ii) and (iii)
Ans - d
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314. A withdrawal slip is a ...... 318. Which of the following is the advantage
a. Cheque of bancassurance business to banks (which
b. Bill of Exchange one cannot be included)?
c. Promissory Note (i) improved customer retention and overall
d. All of these customer satisfaction,
Ans - c (ii) higher employee productivity,
(iii) means of earning risk free non-interest
315. Eligibility Criteria for Scheduled income
commercial banks (AD Category I) to become a. Only (i) and (ii)
trading/clearing members of the currency b. Only (i) and (iii)
derivatives segment to be set up by the stock c. Only (ii) and (iii)
exchanges recognized d. (i), (ii) and (iii)
by SEBI ...... Ans - d
(i) Minimum Net Owned Fund of 500 crore,
(ii) Minimum CRAR of 10 per cent, 319. Phone are sophisticated electronic
(iii) Net NPAs of less than 3 per cent and a devices that can deliver E-mail, their focus
profit-making record for the last three years away from the domestic market to the ......
a. Only (i) and (ii) a. Ordinary
b. Only (i) and (iii) b. Intelligent
c. Only (ii) and (iii) c. Smart
d. (i), (ii) and (iii) d. Both a and b
Ans - d Ans - c

316. Some banks are using mobile ...... 320. Under the finger print identification
mounted on trucks to offer regular cash systems, the customers use bank cards
withdrawal like pension payments at remote wherein the ___ of the index finger stored on
areas. the magnetic strip on the card is used to
a. Cheque Dispenser Machines match the impression with that scanned at
b. ATMs the time of making withdrawal
c. Cash Dispenser Machines a. Magnetic Ink Impression
d. Both a and b b. Ink Impression
Ans - c c. Embossed Impression
d. Digitized Impression
317. Smart card ...... Ans - d
(i) has an integrated circuit with
microprocessor chip embedded in it so that it 321. Bailor – bailee relationship is applicable
could perform calculations, maintain records in ......
and act as electronic purse, a. cash deposited with cashier by customer
(ii) has built in facility for protection against b. safe deposits locker
fraudulent operations, c. demand draft issued by bank
(iii) can either be rechargeable or d. keeping articles in safe custody with bank
exchangeable Ans - d
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
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322. Which of the following is the 327. In addition to the normal services as
supplementary liquid reserve requirements of defined in the Banking regulation Act, banks
banks, in addition to CRR? also undertake activities like project
a. CRAR appraisal, underwriting of issue, technical
b. Marginal Ratio know-how etc. This business is called ......
c. SLR a. Consultancy services
d. CAR b. Bancassurance
Ans - c c. Merchant banking
d. Advisory services
323. Motor car for a busy doctor is a ...... Ans - c
a. Necessary
b. Comfort 328. Under National Electronic Funds Transfer
c. Luxury (NEFT), bank to afford credit to beneficiary
d. None of these accounts immediately upon completion of a
Ans - a batch or else return the transactions within
...... hours of completion of batch settlement,
324. Wrist watch for a college student is a ...... if credits are unable to be afforded
a. Necessary a. immediately
b. Comforts b. half an-hour
c. Luxury c. one hour
d. None of these d. 2 hours
Ans - a Ans - d

325. Match the following: 329. The functions of purchase of receivable,

i) IRDA a. Insurance maintenance of receivable ledgers and
ii) Garnishee Order b. Judgement debtor collection of dues on due date, under
iii) ATMs c. Assignment factoring becomes the function of ......
iv) Book debt d. E- Banking a. Seller
a. i-D,ii-C,iii-A,iv-B b. Factor
b. i-A,ii-B,iii-D iv-C c. Buyer
c. i-B,ii-A,iii-D,iv-C d. a & c
d)i-D,ii-C,iii-B,iv-A Ans - b
Ans - b

326. State which of the following statement/s

is/are correct?
(i) KYC norms is applicable only to deposit
accounts,
(ii) A cash credit facility is a fund based limit,
(iii) An incomplete negotiable instrument is
called as an inchoate instrument
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
JAIIB Practice MCQs Free e-book

330. You have a current account of XYZ Limited, 334. Which of the following represent the
a public company, account is operated by acronyms of age groups?
Its managing director and one more director (i) PUPPIES,
singly. You receive a notice of death of (ii) SKIPPIES,
managing director and another notice that (iii) DINKS
liquidation process has been initiated against a. Only (i) and (ii)
the company. Two cheques signed by them b. Only (i) and (iii)
(one each) are received for payment. What will c. Only (ii) and (iii)
be bank do? d. (i), (ii) and (iii)
a. Cheque signed by director will be paid and Ans - d
other cheque signed by managing Director will
be returned 335. A ...... is a type of transferable financial
b. Both the cheques will be paid as the directors instrument which is traded at local stock
are only agents exchange of a country but represents a
c. Both the cheques will be returned as with security (usually, in the form of equity) which
liquidation process the powers of Board of is issued by a foreign publicly listed company
Directors have ceased a. American Depository receipt
d. Cheques are issued for the purpose of the b. Depository Receipt
company, due to which these can be paid c. Global Depository Receipt
Ans - c d. Foreign Convertible Bonds
Ans - b
331. Which of the following is at zero channel
level?
a. Retailer
b. Jobber
c. Internet
d. Wholesaler
Ans - c

332. In which of the following accounts, the

funds (the principal and interest) can be
repatriated outside India?
a. FCNR, NRO account only
b. NRO, NRE accounts only
c. FCNR, NRE only
d. None of the above
Ans - c

333. A crossing is direction of the drawer to

Which among the following is not correct?
a. General crossing - to collection bank
b. Not-negotiable crossing - to collecting bank
c. Account payee crossing – to paying bank
d. All are correct
Ans - c
JAIIB Practice MCQs Free e-book

Accounting and Finance for Bankers

1. Under the diminishing balance method 6. In the books of D Ltd. The machinery
depreciation, depreciation amount will not… account shows a debit balance of Rs. 60,000
i. Increase every year as on April 1, 2019. The machinery was sold
ii. Remain constant every year on September 30, 2020 for Rs. 30, 000. The
iii. Decrease every year company charges a depreciation @20% p.a.
(a) Only i and ii on diminishing balance method.
(b) Only i and iii (a) Rs. 6,000
(c) Only ii and iii (b) Rs. 9,000
(d) i, ii and iii (c) Rs. 4,800
Answer: (c) (d) Rs. 12,000
Answer: (b)
2. The spot exchange rate and the forward
exchange rate differ by the 7.What is the profit/loss on the sale in
(a) Location of the trade Question 6?
(b) Type of trader (a) Rs. 13,200 Profit
(c) Type of currency exchanged (b) Rs. 13,200 Loss
(d) Timing of the actual currency exchange (c) Rs. 6,800 Profit
Answer: (d) (d) Rs. 6,800 Loss
Answer: (c)
3. Effect of 14% compounding quarterly on
effective annual interest rate _____% 8.Which one is the principle of Double Entry
(a) 14.25 System?
(b) 14.50 (a) Purchase increases debit, income decreases
(c) 14.75 credit
(d) 15.00 (b) Expense increases debit, income decreases
Answer: (c) credit
(c) Receiver is debit and giver is credit
4. X invested Rs. 100000 in a bank FDR at 6% (d) Receiver is credit and giver is debit
p.a. for one year. If interest is compounded Answer: (c)
on half-yearly basis, the amount payable
shall be? a) Trial balance, adjusting entries, work sheets,
(a) 106000 financial statement
(b) 106160 (b) Adjusting entries, trial balance, financial
(c) 106130 statement, works sheet
(d) 106090 (c) Works sheet, trial balance, adjusting
Answer: (d) entries,
financial statement
5. The price at which one can enter into a (d) Trial balance, works sheet, adjusting
contract today to buy or sell a currency 30 entries,
days from now is called a _________ financial statement
(a) Reciprocal exchange rate Answer: (a)
(b) Effective exchange rate
(c) Exchange rate option
(d) Forward exchange rate
Answer: (d)
JAIIB Practice MCQs Free e-book

10. The rate of interest on a sum of money is 14. A minor 16 years of age, is having an FDR
4%PA. for the first 2 years, 6% p.a. for the of Rs. 10,000 with the bank. He requested for
next 4 years, 8 % p.a. for the period beyond 6 before-maturity payment. Can the bank
years. If the simple interest accrued by the allow the before maturity payment?
sum for a total period of 9 years is Rs. 1680, (a) Bank can accept the request of the minor
what is the sum? (b) Bank can accept the request, if
(a) Rs. 3000 accompanied by another require from the
(b) Rs. 5000 guardian
(c) Rs. 4700 (c) Bank can accept the request for loan and
(d) Rs. 5500 not
Answer: (a) pre-mature cancellation, as that amount to
breaking the contract, for which he has no
11. The KYC guidelines take into account the authority
recommendations of an international (d) Bank cannot accept the request
Financial Action Task Force… Answer: (a)
i. on anti-money laundering standards
ii. on combating the financing of terrorism Working capital of a company is Rs. 1,35,000
iii. on manipulation of economic offences and current ratio is 2.5. Liquid ratio is 1.5 and
(a) Only i and ii the proprietary ratio is 0.75. Bank overdraft
(b) Only i and iii is Rs. 30, 000. There are no long-term loans
(c) Only ii and iii and fictitious assets. Reserves and surplus
(d) i, ii and iii amount to Rs. 90,000 and the gearing ratio
Answer: (a) (Equity capital/Preference capital) is 1.2.
From the above, calculate:
12. A sleeping partner asks the bank to stop 15. Current assets
operations. The next day he comes to (a) Rs. 60,000
request that the instruction was given by (b) Rs. 90,000
mistake (c) Rs. 1,35,000
(a) Bank can allow operations if he gives in (d) Rs. 2,25,000
writing Answer: (d)
(b) Bank can allow operations if all the
partners make a request 16. Quick Liabilities
(c) Bank cannot allow operation even when (a) Rs. 60,000
requested by all (b) Rs. 90,000
(d) Any of the above (c) Rs. 1,35,000
Answer: (b) (d) Rs. 2,25,000
Answer: (b)
13. A minor could be allowed to open a
saving bank account, where he On the basis of the information given below,
(a) Could sign and his age is at least 12 years answer the following information:
(a) Forward trading i. Rate of depreciation under the written
(b) Spot trading down method = 20%
(c) Triangular trading ii. Original cost of the asset = Rs. 1,00,000
(d) Revaluation iii. Residual value of the asset at the end of
Answer: (d) useful life = Rs. 40,960

17. The estimated useful life of the asset is

(a) 4 years
(b) 5 years
(c) 6 years
(d) 7 years
Answer: (a)
JAIIB Practice MCQs Free e-book

23. For the purpose of reconciliation

18. Depreciation for the first year = statement, if there is positive balance, it
(a) Rs. 20,000 appears on ________ side of the cash book
(b) Rs. 16,000 and ________ side in the pass book.
(c) Rs. 12,800 (a) Debit, credit
(d) Rs. 10,240 (b) Credit, debit
Answer: (a) (c) Debit, debit
(d) Credit, credit
19. Depreciation for the second year = Answer: (a)
(a) Rs. 20,000
(b) Rs. 16,000 24. In context of reconciliation which of
(c) Rs. 12,800 these is correct:
(d) Rs. 10,240 A. Credit balance as per cash book means
Answer: (b) overdraft
B. Direct deposit by a firm’s debtor in the
20. Depreciation for the third year = bank is first recorded by the bank
(a) Rs. 20,000 C. Debit of bank charges by the bank reduces
(b) Rs. 16,000 the balance
(c) Rs. 12,800 (a) A to C all
(d) Rs. 10,240 (b) A and B only
Answer: (c) (c) B and C only
(d) A and C only
21. Depreciation for the fourth year = Answer: (a)
(a) Rs. 20,000
(b) Rs. 16,000 25.Which of the following statements does
(c) Rs. 12,800 not match in the context of trial balances:
(d) Rs. 10,240 (a) Trial balance takes care of arithmetic
Answer: (d) accuracy
(b) In the trial balance, the balances of
22. The balance of cash book and the balance liabilities are recorded on the debit side
as per pass book of the bank are required to (c) In the trial balance, the balances of the
be reconciled because of which of the expenses are recorded on the debit side
following reasons? (Which is not true) (d) In the trial balance, the balances of the
(a) Some entries are recorded in the pass capital amount are recorded on the debit
book first and cash book later on. side.
(b) Some entries are recorded in the pass Answer: (b)
book later and cash book first
(c) Some entries are recorded either in the 26. The trial balance in which the total of
pass book or the cash book with delay debit side and the total of credit side of each
(d) Some entries are recorded in both the ledger is taken into account is called:
books, before the date of reconciliation (a) Main trial balance
Answer: (d) (b) Net trial balance
(c) Trial balance
(d) Gross trial balance
Answer: (d)
JAIIB Practice MCQs Free e-book

27. If trade discount allowed appears in the 31. Paid the cash dividend – dividend yield
trial balance, it will finally be adjusted as: (a) Increase
(a) Debit entry in the profit and loss account (b) Decrease
(b) Debit entry in the trading sheet and (c) Remain unchanged
manufacturing account (d) None of the above
(c) Asset in the balance sheet Answer: (c)
(d) Deduction from sales in the trading
account. 32. Find the difference between the simple
Answer: (d) interest and compound interest at 10% p.a.
for 3 years on principle of Rs. 5000.
ABC Ltd. Completed the transactions listed (a) Rs. 230
below: (b) Rs. 190
State whether each of the below given (c) Rs. 155
transaction would cause the ratio listed (d) Rs. 210
opposite to increase, decrease or remain Answer: (c)
unchanged
28. Redeemed debentures by issuing ABC Limited Profit and Loss Account for the
ordinary shares-Rate of return on the year ended 31.03.2017 is given below.
ordinary shareholders' equity Turnover: 7300
(a) Increase Cost of sales: 4234
(b) Decrease Distribution costs: 1320
(c) Remain unchanged Admin expenses: 480
(d) None of the above Interest: 200
Answer: (b) Tax: 372
Dividend: 400
29. Purchased inventory on credit- Quick Proposed dividend: 400
ratio Taxation: 170
(a) Increase Accurals: 120
(b) Decrease Net current assets: 1540
(c) Remain unchanged 10% debenture: 2000
(d) None of the above Financed by: 3500
Answer: (b) Ordinary shares: 900
Retained profit: 2600
30. Sold inventory for cash – Current ratio Balance sheet as of 31.03.2017
(a) Increase Fixed assets plant and machinery: 3960
(b) Decrease Current assets: 2430
(c) Remain unchanged if sales price is equal to Stocks: 1390
cost. Increase if sales price is greater than Debtors: 800
cost. Bank: 238
(d) None of the above Current liabilities: 890
Answer: (c) Trade creditors: 200

31. Declared a cash dividend on ordinary Calculate the following based on the above
shares – dividend payout information:
(a) Increase 33. Gross profit
(b) Decrease (a) 1266
(c) Remain unchanged (b) 3066
(d) None of the above (c) 4234
Answer: (a) (d) 7300
Answer: (b)
JAIIB Practice MCQs Free e-book

34. Operating profit 41.The concern concept according to which a

(a) 294 fact or happening which cannot be expressed
(b) 694 in terms of money is not recorded in the
(c) 1066 accounting books is called________
(d) 1266 (a) Cost concept
Answer: (d) (b) Matching concept
(c) Realization concept
35. Operating profit (d) Money measurement concept
(a) 294 Answer: (d)
(b) 694
(c) 1066 42.Which of the following customer falls
(d) 1266 under the low-risk category under KYC
Answer: (c) guidelines?
i. Salaries employees
36. Profit attributable to shareholders ii. Trusts
(a) 294 iii. Persons from lower strata of the society
(b) 694 (a) Only i and ii
(c) 1066 (b) Only i and iii
(d) 1266 (c) Only ii and iii
Answer: (b) (d) i, ii, and iii
Answer: (b)
37. Retained profit
(a) 294 43.The ratio that explains how efficiently
(b) 694 companies use their assets to generate
(c) 1066 revenue
(d) 1266 (a) Revenue asset ratio
Answer: (a) (b) Receivable turnover ratio
(c) Income ratio
38. Gross profit margin (d) Asset turnover ratio
(a) 17.34% Answer: (d)
(b) 23.02%
(c) 33.33% 44. A ratio that compares the investors’ and
(d) 42% creditors’ stake in a company
Answer: (d) (a) Debt ratio
(b) Debt to equity ratio
39. Operating margin (c) Equity ratio
(a) 17.34% (d) Investor credit ratio
(b) 23.02% Answer: (b)
(c) 33.33%
(d) 42% 45. Compliance of accounting standards is
Answer: (d) not the duty of ____
i. Board of Directors
40. The process known as ____ takes ii. Auditor
advantage of an opportunity to make a iii. Company secretory
riskless profit using three exchange rates (a) Only i and ii
(a) Forward trading (b) Only i and iii
(b) Spot trading (c) Only ii and iii
(c) Triangular trading (d) i, ii and iii
(d) Revaluation Answer: (c)
Answer: (c)
JAIIB Practice MCQs Free e-book

46. A company comes into existence when it 52.What is the currency deposit ratio (CDR)?
gets the certificate of (a) ratio of oney held by the public in
(a) Incorporation currency to that of money held in bank
(b) Commencing the business deposits
(c) Income tax department (b) ratio of money held by public in bank
(d) None of the above deposits to that of money held by public in
Answer: (a) currency
(c) ratio of money held in demand drafts to
47. Principle of Prudence is also known as that of money held in treasury bonds
(a) Materiality (d) none of the above
(b) Consistency Answer: (a)
(c) Conservatism
(d) None of the above 53.Why do banks borrow money in the call
Answer: (c) money market?
(a) To meet sudden demand for funds arising
48. The method in which depreciation rate is out of large outflows
constant is (b) To fill the temporary mismatches in funds
(a) Straight line method (c) To meet the Statutory Reserve
(b) Declining balance method requirements
(c) Double declining balance method (d) All of the above
(d) Accelerated depreciation Answer: (d)
Answer: (b)
54.Which of the following was the first
49. ___ capital is the amount with which a commercial bank established by Indians in
company is formed 1881?
(a) Authorized (a) Reserve Bank of India
(b) Subscribed (b) Imperial Bank of India
(c) Both a and b (c) Awadh Commercial Bank
(d) None of the above (d) State Bank of India
Answer: (a) Answer: (c)

50.As per RBI guidelines, banks can’t 55.Describe the status of the following
outsource: person: X and Y are legal heirs of Z. Z died in
i. Determining compliance with KYC norms 2018 and X and Y carry on his business
ii. According sanction for loans without entering into a partnership.
iii. Management of investment portfolio (a) Firm
(a) Only i and ii (b) Limited Liability Partnership
(b) Only i and iii (c) Company
(c) Only ii and iii (d) Body of Individual
(d) i, ii and iii Answer: (d)
Answer: (d)
56. Loan is obtained by X for purchase of a
51.Which of the following concept assumes car for Rs. 1.5 lac @ 12% interest for over 2
that the business enterprise will not be sold years. What is the amount of weekly
or liquidated in the near future? payment at simple rate of interest?
(a) Conservatism concept (a) 3398.12
(b) Money measurement concept (b) 3458.19
(c) Going concern concept (c) 3576.92
(d) Accounting period concept (d) 3697.02
Answer: (c) Answer: (c)
JAIIB Practice MCQs Free e-book

57. Which of the following will not affect Bharat QR - A QR code consists of black
Trial Balance? squares arranged in a square grid
(a) Goods sold on credit not recorded in books on a white background, which can be read by
(b) Overstating of sales register an imaging device such as a
(c) Rent account credited instead of debit camera. QR contains information about the
(d) Salary debited to the extent ½ the amount item to which it is attached.
Answer: (a) Answer the following questions regarding
Bharat QR.
58. Compound interest is paid on which of 62. Bharat QR is ...... Mobile payment
the following: solution
(a) Principal amount (a) P2P (Person to Person)
(b) Interest amount (b) P2M (Person to Merchant)
(c) Principal amount and interest already (c) M2P (Merchant to Person)
accrued (d) M2M (Merchant to Merchant)
(d) Principal amount and interest to accrue Answer: (b)
Answer: (c)
63. Bharat QR is mutually derived among ......
59. Annuity is defined as ...... payment networks.
(a) Equal cash flows at equal intervals forever (i) NPCI
(b) Equal cash flows at equal intervals for a (ii) Visa
specified period (iii) Mastercard
(c) Unequal cash flows at equal intervals for (a) Only (i) and (ii)
specified period (b) Only (i) and (iii)
(d) Unequal cash flows at equal intervals (c) Only (ii) and (iii)
forever (d) (i), (ii) and (iii)
Answer: (b) Answer: (d)

60. If interest is to be compounded halfyearly, 64. What are the charges for using Bharat
which of the following will be used: QR?
(a) P (1+r)n (a) No additional charges for making
(b) P (1+r/2)n x 2 transaction through Bharat QR
(c) P (1+r /4)n x 4 (b) Depends on the Bank
(d) P (1+r /12)n x 12 (c) Depends on the App
Answer: (b) (d) Depends upon the transaction amount
Answer: (a)
61. What is the present worth of Rs. 132 due
in 2 years at 5% simple interest per 65. Can multiple bank cards be linked on
annum? same App?
(a) 110 (a) No. Multiple cards can't be linked in a
(b) 120 single app
(c) 130 (b) Yes. Multiple cards of multiple banks can
(d) 140 be linked in a single app
Answer: (b) (c) Yes. Multiple cards of the same bank can
be linked in a single app
(d) None of the above
Answer: (c)
JAIIB Practice MCQs Free e-book

Consider the following information: 71. A fund flow statement is a statement of

Revenue from Operations: 3,40,000 _____ for a definite period between two
Cost of Revenue from Operations: 1,20,000 definite dates.
Selling expenses: 80,000 i. source of funds
Administrative Expenses: 40,000 ii. use of funds
66. Gross Profit (a) Only i
(a) Rs. 2,00,000 (b) Only ii
(b) Rs. 2,20,000 (c) Either I or ii
(c) Rs. 2,40,000 (d) Both I and ii
(d) Rs. 2,60,000 Answer: (d)
Answer: (b)
72. The right of set off cannot be exercised
67. Operating Cost by a bank if
(a) Rs. 2,00,000 (a) The funds are in the same right and belong
(b) Rs. 2,20,000 to the customer
(c) Rs. 2,40,000 (b) There is an agreement between bank and
(d) Rs. 2,60,000 customer to exclude the right of set off
Answer: (c) (c) Debts are due and not contingent
(d) Debts have crystallised
68. Which of the following commission is not Answer: (d)
an error?
a) A sale of ₹.660/- not recorded in a book at 73. An ante-dated cheque if presented for
all payment after expiry of the validity period
b) Rent paid to the landlord but not posted to can be paid if it revalidated by
his account (a) The collecting banker with seal and
c) A purchase of ₹.990/- was wrongly recorded signature
to sales account (b) The drawer under his signature
d) Credited Ram instead of crediting Arjun (c) The payee with his signature
Answer: (a) (d) Any one of the above
Answer: (b)
69. Received ₹.20,000/- from Anu and
credited to Paras account. It is an error of? 74. If a firm has 100 in inventories, a current
(a) Principal ratio equal to 1.2, and a quick ratio equal to
(b) Omission 1.1, what is the firm’s Net Working Capital?
(c) Commission (a) 0
(d) Compensatory (b) 100
Answer: (c) (c) 200
(d) 1000
70. State the Error of Principle from the Answer: (c)
following options.
(a) The purchased book was overcast by 75. Share of a limited company can be
₹500/- classified into ______
(b) Credit sale to Arun ₹700 recorded as a (a) Equity
purchase from Arun (b) Preference
(c) Good returned to Chetna ₹4,000 posted in (c) Equity and Preference
Chiru A/c (d) None of the above
(d) For installation of machinery, wages were Answer: (c)
paid to the wages A/c
Answer: (d)
JAIIB Practice MCQs Free e-book

76. The ____ is affixed on all important 80. On 1st January 2002, a firm purchased
documents and contracts of a company. machinery worth Rs. 1 lakh, and on 1st July
(a) Registered seal 2004, it buys additional machinery worth Rs.
(b) Common seal 20,000 and spends Rs. 2000 on its erection.
(c) Government seal Annual depreciation is 10% on straight-line
(d) All of the above method. What will be written down value at
Answer: (b) the end of the 5th year?
(a) Rs. 66,000
77. The balance of cash book and the balance (b) Rs. 66,500
as per pass book of the bank are required to (c) Rs. 65,000
be reconciled because of which of the (d) Rs. 56,500
following reasons? (Which is not true) Answer: (b)
(a) Some entries are recorded in the pass
book first and cash book later on. 81. Cash: 50,000
(b) Some entries are recorded in the pass Debtors: 1,00,000
book later and cash book first Inventories: 1,50,000
(c) Some entries are recorded either in the Current Liabilities: 1,00,000
pass book or the cash book with delay Total Current Assets: 3,00,000
(d) Some entries are recorded in both the Find the Current Ratio.
books, before the date of reconciliation (a) 1:1.5
Answer: (d) (b) 1:3
(c) 1.5:1
78. The BCSBI has been set up to _____ (d) 3:1
(a) Provide redressal mechanism to customers Answer: (d)
for non-compliance of the codes
(b) Look into complaints to the extant it points 82. ABC Company just issued a bond with a
to any systemic failure in compliance with the Rs. 1,000 face value and a coupon rate of 8%.
codes If the bond has a life of 20 years, pays annual
(c) Provide additional grievance mechanism, coupons, and the yield to maturity is 7.5%,
in addition to the Banking Ombudsman, for what will the bond sell for?
deficiency in customer service (a) Rs. 951
(d) None of the above (b) Rs. 975
Answer: (a) (c) Rs. 1,020
(d) Rs. 1,051
79. A truck costs 8,900 with a residual value Answer: (b)
of 500. It is estimated that the useful life of
the truck is 4 years. The amount of 83. A and B are in need of funds on 1.1.2017.
depreciation expense in year 2 by using the A drew a bill for 2,00,000 for 6 months on B.
declining balance at twice the straight-line On 4.1.2017, A got the bill discounted at 10%
rate is ____ p.a. and remitted 40% of the proceeds to B.
(a) 2,225 The cheque sent to B is for ______
(b) 4,200 (a) 80,000
(c) 4,450 (b) 72,000
(d) 8,400 (c) 76,000
Answer: (c) (d) 70,000
Answer: (c)
JAIIB Practice MCQs Free e-book

84. A machinery is purchased for Rs. 3,00,000 89. In which of the following would you find
and Rs. 50,000 is spent on its installation. Rs. the account of a supplier?
5,000 is spent on fuel. What will be the (a) Purchase Ledger or Trade Payable Ledger
amount of capital expenditure? (b) Sales Ledger or Trade Receivable Ledger
(a) Rs. 3,00,000 (c) Impersonal Ledger
(b) Rs. 3,50,000 (d) Nominal Ledger or General Ledger
(c) Rs. 3,55,000 Answer: (a)
(d) None of the above
Answer: (b) The following differences between the Cash
Book entries and information in the bank
85. Certain principal amount plus its 5 years’ statement have been identified:
simple interest makes an amount of Rs. 500. i. An amount incorrectly credited to the
If the interest is 1/4th of its principal, find out company's account by the bank
the rate of interest and the principal amount. ii. Lodgements into bank not reported in the
(a) 4%, Rs, 400 bank statements
(b)5%, Rs, 400 iii. Dishonour of a cheque deposited into the
(c) 5.5%, Rs, 300 bank
(d) 6%, Rs, 250 iv. Bank loan interest recovered by the bank
Answer: (b) v. Cheques drawn by the company yet to be
presented to bank.
A trader carries an average inventory of Rs. 90. Which set of alternatives correctly
40,000. His inventory turnover ratio is 8 analyses treatment of these?
times. If he sells goods at a profit of 20% on (a) In Cash Book: ii, iv; In bank rec: i, iii, v
Revenue from operations, find – (b) In Cash Book: iii, iv; In bank rec: i, ii, v
86. Cost of Revenue from operations (c) In Cash Book: ii, iv, v; In bank rec: i, iii
(a) Rs. 80,000 (d) In Cash Book: i, ii, iii; In bank rec: iv, v
(b) Rs. 2,20,000 Answer: (b)
(c) Rs. 3,20,000
(d) Rs. 4,00,000 91. A Pass Book is a copy of
Answer: (c) (a) A Customer's account in the Bank's Books
(b) Cash Book relating to bank column
87. Revenue from operations (c) Cash Book relating to cash column
(a) Rs. 80,000 (d) Firm's receipts and payments
(b) Rs. 2,20,000 Answer: (a)
(c) Rs. 3,20,000
(d) Rs. 4,00,000 92. When banks sell third party products
Answer: (d) (such as insurance, mutual funds etc. as
agents the responsibility for ensuring
88. Gross Profit compliance with KYC/AML/CFT regulations
(a) Rs. 80,000 ......
(b) Rs. 2,20,000 (a) lies with the bank marketing the product
(c) Rs. 3,20,000 (b) lies with the third-party issuer
(d) Rs. 4,00,000 (c)lies with both the bank as well as the third
Answer: (a) party
issuer
(d) depends on whether the customer pays
the money in cash or otherwise
Answer: (b)
JAIIB Practice MCQs Free e-book

93. Relationship between the Bank and the In the books of D Ltd., the machinery account
Customer is "Creditor - Debtor" in the shows a debit balance of Rs. 60,000 as on
following Transactions. April 1, 2019. The machinery was sold on
(i) Loan from Bank (Debit balance in September 30, 2020 for Rs. 30,000. The
account), company charges depreciation @20% p.a. on
(ii) issue of draft (after issue of draft), diminishing balance method.
(iii) Debit Balance in CC/OD account 97. Depreciation for 2019-20 = ......
(a) Only (i) and (ii) (a) Rs. 6,000
(b) Only (i) and (iii) (b) Rs. 9,000
(c) Only (ii) and (iii) (c) Rs. 4,800
(d) (i), (ii) and (iii) (d) Rs. 12,000
Answer: (b) Answer: (d)

94. Partnership type of business is formed by 98. Depreciation for 2020-21 = ......
the mutual agreement of partners. (a) Rs. 6,000
What kind of agreement is it? (b) Rs. 9,000
(a) Oral agreement (c) Rs. 4,800
(b) Written agreement (d) Rs. 12,000
(c) Oral or written agreement Answer: (c)
(d) None of the above
Answer: (c) 99. Profit / Loss on sale = ......
(a) Rs. 13,200 Profit
95. According to Indian Minority Act, a minor (b) Rs. 13,200 loss
whose guardian is appointed by the court, (c) Rs. 6,800 profit
continues to be a minor upto the age of ...... (d) Rs. 6,800 loss
(a) 10 Answer: (b)
(b) 18
(c) 21 100. A high turnover of accounts receivable,
(d) 25 which implies a very short days-sales
Answer: (c) outstanding, could indicate that the firm ......
(a) Has a relaxed (lenient) credit policy
96. Which of the following are true in case of (b) Offers small discounts
Basic Savings Bank Deposit Account (c) Uses a lockbox system, synchronizes cash
(BSBDA)? flows, and has short credit terms
(i) it shall not have the requirement of any (d) Has an inefficient credit and collection
minimum balance, department
(ii) account holders will be allowed a Answer: (c)
maximum of four withdrawals in a month,
(iii) no charge will be levied for nonoperation 101. Sacrificing ratio is equal to
/ activation of in-operative 'Basic (a) Old ratio
Savings Bank Deposit Account’ (b) New ratio
(a) Only (i) and (ii) (c) Old ratio - New ratio
(b) Only (i) and (iii) (d) New ratio -Old ratio
(c) Only (ii) and (iii) Answer: (c)
(d) (i), (ii) and (iii)
Answer: (d)
JAIIB Practice MCQs Free e-book

101. Final accounts of a limited company d. Debit Bank Account credit Cash Account
consist of _________ Ans - b
(a) Balance sheet
(b) Profit and loss account 106. Cash Flow Statement is also known as
(c) Trading account ......
(d) Both a and b a. Statement of Changes in Financial Position
Answer: (d) on Cash basis
b. Statement accounting for variation in cash
102. Which of the following parties in a Bill of c. Both a and b
Exchange do match: d. None of the above
(a) Drawer: The person who orders the other Ans - c
Person to make payment
(b) Payee: The person who is to make 107. Profit for the objective of calculating a
payment ratio may be taken as ......
(c) Drawee: The person who is to receive the a. Profit before tax but after interest
payment as per order of the drawer b. Profit before interest and tax
(d) None of the above c. Profit after interest and tax
Answer: (a) d. All of the above
Ans - d
103. X draws a Bill of Exchange on Y for Rs.
5,000 payable 60 days after date of the Bill.
He discounts the bill with his bank and pays 108. Timeframe for collection of outstation
discount of Rs. 50. What will be the journal cheques in case of Cheques drawn on Major
entry? Cities ......
(a) Debit Y, Credit Bank and discount a. 2 Days
(b) Debit bank and discount, credit bills b. 7 Days
receivable c. 10 Days
(c) Debit bills receivable, credit bank and d. 14 Days
discount Ans - c
(d) Debit bills receivable and discount, credit
bank 109. Which of the following accounts will
Answer: (b) have a balance on the credit side?
a. Carriage Outwards account
104. Which of the following statements is not b. Motor vehicles account
true: c. Return Outwards account
(a) Amount of Bill is received by payee d. Carriage Inwards account
(b) Drawee is the maker of the Bill of Ans - c
Exchange
(c) Acceptance by the Drawee is compulsory 110. Credit Note is prepared by ......
in usance bill a. Seller
(d) Before acceptance of a bill, the drawee is b. Purchaser
not liable on the bill. c. Bank
Answer: (b) d. None of these
Ans – a
105. The accounting entry required when the
bank advises that a bank loan has been 111. Operating profit is
approved ...... a. profit after deducting financial costs
a. Debit Cash Account credit Bank Loan b. profit after deducting taxes
Account c. profit after deducting normal operating
b. Debit Bank Account credit Bank Loan expenses including depreciation
Account d. equal to net profit
c. Debit Cash Account credit Bank Account Ans - c
JAIIB Practice MCQs Free e-book

117. The rate of return earned by an investor

112. Which financial statement is used to who purchases the bond and holds it till its
show what the firm owns? matures is
a. income statement called ......
b. balance sheet a. rate of return
c. statement of retained earnings b. current yield of the bond
d. cash flow statement c. yield to maturity
Ans - b d. any of the above
Ans - c
113. The implementation of KYC in banks
primarily addresses which one of the 118. Companies profit divided among
following risks? shareholder is ..
a. Reputation risk a. interest
b. Legal risk b. reserve
c. Money laundering risk c. dividend
d. Compliance risk d. surplus
Ans – c Ans - c

114. The accounting cycle represents a series 119. According to accounting equation assets
of steps that a business uses are equal to?
a. to record and classify the transactions a. liabilities
b. to summarize the transactions b. liabilities and equities
c. to communicate financial events c. equities
d. for all of these d. none of these
Ans - d Ans - b

115. When the required rate of return is equal

to the coupon rate, the value of the bond is Given the following information:
...... Total assets = Rs. 3,00,000
a. less than face value Non-current liabilities = Rs. 80,000
b. more than face value Shareholders’ Funds = Rs. 2,00,000
c. equal to face value Non-Current Assets:
d. maturity value Fixed assets = Rs. 1,60,000
Ans - c Non-current Investments = Rs. 1,00,000

116. Debenture carrying charge on particular 120. Calulate Current Assets

asset on the company is know as.. a. Rs. 20,000
a. fixed
b. Rs. 30,000
b. mortgage
c. Rs. 40,000
c. naked
d. floating d. Rs. 50,000
Ans – d Ans – c

121. Calulate Current Liabilities

a. Rs. 20,000
b. Rs. 30,000
c. Rs. 40,000
d. Rs. 50,000
Ans – a
JAIIB Practice MCQs Free e-book

122. Calulate Current Ratio 126. A bond with a coupon rate of 8%, paid
a. 1 : 1 annually, and a face value of Rs. 1,000
b. 1 : 2 matures in 21 years. If the current annual
c. 2 : 1 market interest rate is 10%, what is the
d. 2 : 1.5 bond's market value?
Ans – c a. Rs. 827
b. Rs. 872
123. If gross profit on sale is 20% and cost of c. Rs. 927
goods sold is 2,500, What will be amount of d. Rs. 854
sales? Ans – a
a. Rs.2500
b. Rs.2750 127. Which of the following statements are
c. Rs.3125 true?
d. Rs.3500 A) Cash flow reveals only the inflow of cash
Ans – c B) Cash flow reveals only the outflow of cash
C) Cash flow is a substitute for income
124. Mrs. X lent Rs. 5000 to Bahubali for 2 statement
years and Rs. 3000 to Chinky for 4 years on D) Cash flow statement is not a replacement
simple of funds flow statement.
interest at the same rate of interest and a. Only A
received Rs. 2200 in all from both of them as b. Only B
interest. c. Both B and C
The rate of interest per annum is: d. Only D
a. 5% Ans - d
b. 7%
c. 7 1/8% 128. Liquidity ratios are expressed in ......
d. 10% a. Pure ratio form
Ans – d b. Percentage
c. Rate or time
125. Find the amount of Rs. 5000 invested at d. None of the above
10% during the period from 1st Jan, 2017 to Ans – a
15 Apr
2017. What would be the impact of the following
a. Rs. 4935.25 errors on the Trial Balance?
b. Rs. 5345.5
c. Rs. 5200 129. A copy of a sales invoice for Rs. 4,000 is
d. Rs. 5143.8 not recorded in the Sales Day Book.
Ans – d a. Excess credit Rs. 4,000
b. Excess debit Rs. 4,000
c. No impact
d. None of the above
Ans - c
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130. A supplier's invoice for Rs. 2,500 is 135. A change in credit policy has caused an
posted to the debit of the Trade Payable's increase in sales, an increase in discounts
account. taken, a reduction of the investment in
a. Excess credit Rs. 2,500 accounts receivable, and a reduction in the
b. Excess debit Rs. 2,500 number of doubtful accounts. Based on this
c. Excess debit Rs. 5,000 information, we know that ......
d. None of the above a. Net profit has increased
Ans - c b. The average collection period has decreased
c. Gross profit has declined
131. The daily total of the Sales Day Book is d. The size of the discount offered has
stated as Rs. 345,000 instead of Rs. 315,000 decreased
(i.e. overcast by Rs. 30,000). Ans - b
a. No impact
b. Excess debit Rs. 30,000 136. A firm following an aggressive working
c. Excess credit Rs. 30,000 capital strategy would
d. None of the above a. Hold substantial amount of fixed assets
Ans - c b. Minimize the amount of short-term
borrowing
132. A purchase invoice is recorded in the c. Finance fluctuating assets with long-term
Purchases Day Book as Rs. 18,500, without financing
taking account of 10% of that amount offered d. Minimize the amount of funds held in very
as trade discount. liquid assets
a. Excess credit Rs. 1,850 Ans - d
b. Excess debit Rs. 1,850
c. No impact 137. What will be the ratio of simple interest
d. None of the above earned by a certain amount at the same rate
Ans - c of interest for 6 years and that for 9 years?
a. 1 : 3
133. A sales invoice for Rs. 21,000 has been b. 1 : 4
posted to the Customer's account as Rs. c. 2 : 3
12,000. d. Data inadequate
a. Excess credit Rs. 12,000 Ans – c
b. Excess debit Rs. 12,000
c. Excess credit Rs. 9,000 138. From the following which is method for
d. None of the above the preparation of Trial Balance ......
Ans - c a. Balance Method
b. Total Method
134. The simple interest accrued on an c. Total-cum-Balance Method
amount of Rs. 22,500 at the end of four years d. All of the above
is Rs. 10,800. What should be the compound Ans - d
interest accrued on the same amount at the
same rate of interest at the end of two years?
a. Rs 4566
b. Rs 4852
c. Rs 5724
d. Rs 4375
Ans – c
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139. Bank reconciliation is a statement 143. What type of accounts, do appear in the
prepared to reconcile ...... balance sheet, out of the following?
a. Trial balance a. Real and nominal
b. Cash book b. Real and personal
c. Bank A/c c. Personal and nominal
d. Cash as per cash book with bank balance as d. Real, personal, nominal
per bank pass book Ans - b
Ans - d
144. Which liabilities are not included in the
140. Where banks open a bank account of a totals of a balance sheet but their mention is
foreign student, pending the verification of made in the balance sheet?
local address, a/c shall be operated with a a. Intangible liabilities
condition of allowing foreign remittances not b. Fictitious liabilities
exceeding ...... or equivalent into the account c. Current liabilities
and a cap of ...... on aggregate in the same d. Contingent liabilities
a. USD 500, Rs.25000 Ans - d
b. USD 10000, Rs.50000
c. USD 15000, Rs.75000 145. The historical cost in the context of
d. USD 20000, Rs.1 lac inventory valuation includes ...... (a) cost of
Ans - b purchase (b)
cost of conversion (c) other costs incurred for
141. Banks shall furnish to Financial bringing the inventory
Intelligence Unit-India (FIU-INd. as per Rule 3 a. A and b only
of PML b. B and c only
(Maintenance of Records) Rules, the periodic c. A and c only
cash transaction report of large size cash d. A to c all
transactions of ...... Ans - d
a. single transaction or total monthly
transactions of Rs.1 lac and above 146. Which is correct ......
b. single transaction or total monthly (a) when goods are purchased, the ‘purchases
transactions of Rs.5 lac and above account’ is used
c. single transaction or total monthly (b) when goods are sold, the
transactions of Rs.10 lac and above ‘sales account’ is used
d. single transaction or total monthly (c) when goods are returned by the customers
transactions of Rs.15 lac and above of the firm, the ‘returns outward’ is used
Ans - c (d) when the goods are returned by the firm
to its suppliers, the ‘purchases returns’ is
142. In the balance sheet of a firm, the notes used.
relating to those facts are included, that do a. a to d all
not find a b. b, c and d
place in the accounting statements. This is c. a, b and d
due to ...... d. a, b and c
a. convention of materiality Ans - c
b. convention of conservatism
c. convention of accounting of full disclosure
d. convention of consistency
Ans - c
JAIIB Practice MCQs Free e-book

147. Many small transactions are not 152. If a firm has been following the straight-
recorded separately in the accounts of a firm. line method of depreciation, it should
These are included in the miscellaneous items continue to follow the same rather than
for recording purposes. This is done because changing to the written down value method.
of use of ...... This is due to ......
a. convention of materiality a. convention of materiality
b. convention of conservatism b. convention of conservatism
c. convention of account of full disclosure c. convention of account of full disclosure
d. convention of consistency d. convention of consistency
Ans - a Ans - d

148. Which among the following account 153. Which of the following is correct formula
concepts is observed at the recording stage for calculation of future value of an annuity
(and not the reporting stage) of the due (beginning of period)?
transactions ...... a. C × ((1+r)n -1/r)
a. matching concepts b. C × ((1+r)n- 1/r) × (1+r)
b. business entity concept c. C / ((1+r)n- 1/r) × (1+r)
c. materiality concept d. C × ((1+r)n -1/r) / (1+r)
d. matching concept Ans - b
Ans - b
154. Which of the following is true?
149. Returns of goods from the customers of a. Balance of real account, personal account
the firm should be credited to ...... and and nominal account are carried over to the
debited to next accounting period
a. Customer account, sales returns b. Debit side of the cash book is called
b. Sales account, sales returns payment and credit side is called receipt
c. Customer account , sales account c. Discount allowed by the creditor is recorded
d. Sales returns, customer account on the payment side of the cash book
Ans - a d. A person who owes a firm some amount is
called debtor.
150. An entry on the left side of a nominal Ans - c
account represents ......
a. Income or expenditure 155. An equipment has original cost of
b. Only income Rs.100000 with a salvage value of Rs.25000
c. Income or gain and useful life of 5 years. Calculate
d. Expense or loss depreciation for the 2nd year by using sum of
Ans - d year’s digit (SYD) method
a. 20000
151. The ...... concept makes a distinction b. 22000
between the receipt of cash and right to c. 25000
receive it or payment of cash and obligation d. 26600
to pay cash ...... Ans - a
a. realization system
b. cash concept
c. accrual concept
d. consistency concept
Ans - c
JAIIB Practice MCQs Free e-book

156. Which of the following statement is 160. A sum of Rs. 25000 becomes Rs. 27250 at
correct in the context of book keeping and the end of 3 years when calculated at simple
accounting? interest. Find the rate of interest.
a. Accounting deals with recording of a. 2 percent
transactions of business and book keeping b. 3 percent
deals with the interpretation c. 4 percent
b. Book keeping deals with recording of d. 5 percent
transactions of business and accounting deals Ans – b
with the interpretation
c. Book keeping and accounting deals both 161. In an account is classified as high risk, the
with recording of transactions of business and fresh KYC documents are be obtained after
their interpretation ...... years
d. Book keeping deals with recording of a. 10 years
transaction of business and accounting deals b. 8 years
with the audit of those transactions. c. 3 years
Ans - b d. 2 years
Ans - d
157. Bank paid some interest to the party.
Firm deposited one cheque with the bank. 162. As per Section 269 T of Income Tax Act,
The entry in respect of these two would be in case bank pays the principal plus interest or
made first by ...... and ...... respectively interest of term deposit above the prescribed
a. Bank, bank limit in cash, penalty will be ......
b. Bank, firm a. Rs. 5,000
c. Firm, firm b. Rs. 10,000
d. Firm, bank c. Rs. 20,000
Ans - b d. Equal to amount paid
Ans - d
158. Entry for the transaction which is
recorded on both side fo the Cash Book is 163. RBI has specifically asked banks not to
called ...... open SB accounts in the name of ......
a. Closing Entry (i) Govt. Departments,
b. Contra Entry (ii) Municipal Corporations or Committees,
c. Opening Entry (iii) State Text Book Publishing Corporations
d. Adjustment Entry or Societies
Ans - b a. Only (i) and (ii)
b. Only (i) and (iii)
159. A consumer purchase ...... c. Only (ii) and (iii)
a. Is a purchase from someone in the business d. (i), (ii) and (iii)
of providing consumer goods or services Ans - d
b. Is a purchase - other than a cash purchase -
from someone in the business of selling
consumer goods or services
c. Is a purchase that may involve the purchase
of goods by a merchant for resale
d. Is a purchase of goods for a business or
professional use
Ans - b
JAIIB Practice MCQs Free e-book

164. An amount of Rs.1,00,000 is invested in 168. No member of staff other than the
two types of shares. The first yields an Cashier/Teller should receive money over the
interest of 9% p.a. and the second, 11% p.a. If counter from depositors. Notices to this effect
the total interest at the end of one year is should be prominently displayed in English
93⁄4%, then the amount invested in each and also the regional language near the ......
share was : (i) cash department,
a. Rs.52,500, Rs.47,500 (ii) BM's Cabin,
b. Rs.62,500, Rs.37,500 (iii) entrance
c. Rs.72,500, Rs.27,500 a. Only (i) and (ii)
d. Rs.82,500, Rs.17.500 b. Only (i) and (iii)
Ans – b c. Only (ii) and (iii)
d. (i), (ii) and (iii)
165. BCSBI has in collaboration with the Ans - b
Indian Banks' Association (IBA), evolved two
codes. Which are they? 169. Mr. Z took a loan of Rs. 1200 with simple
(i) Code of Bank's Commitment to Customers, interest for as many years as the rate of
(ii) Code of Bank's Commitment to interest. If he paid Rs. 432 as interest at the
Senior Citizens, end of the loan period, what was the rate of
(iii) Code of Bank's Commitment to Micro and interest?
Small Enterprises. a. 3.6
a. Only (i) and (ii) b. 6
b. Only (i) and (iii) c. 18
c. Only (ii) and (iii) d. Data inadequate
d. (i), (ii) and (iii) Ans – b
Ans - b
Mr. Ram's Capital on 1 April 2017 was Rs.
166. In case of jointly operated lockers, right 74,200. What would be his capital by 31
of nominee(s) starts ...... march 2018, during the year ending on that
(i) only after death of all locker date?
holders,
(ii) immediately after death of any of the 170. Net profit was Rs. 18,200 and drawings
hirers none.
a. Only (i) a. Rs. 74,200
b. Only (ii) b. Rs. 92,400
c. Either (i) or (ii) c. Rs. 56,000
d. Both (i) and (ii) d. Rs. 110,600
Ans - b Ans - b

167. As per KYC guidelines, which one of the 171. Net profit was Rs. 22,600 and drawings
following customers is having high risk? Rs. 5,000.
a. Central Govt. employee a. Rs. 91,800
b. State Govt. employee b. Rs. 56,600
c. Small business man c. Rs. 46,600
d. Politically exposed person resident abroad. d. Rs. 101,800
Ans - d Ans - a
JAIIB Practice MCQs Free e-book

172. Net loss was Rs. 15,400 and drawings Based on the above information, answer the
none. below questions.
a. Rs. 74,200
b. Rs. 58,800 176. The company's working capital
c. Rs. 105,000 a. 60,000
d. Rs. 89,600 b. 66,000
Ans - b c. 96,000
d. 196,000
173. Net Loss was Rs. 18,200 and drawings Rs. Ans – b
6,000.
a. Rs. 86,400 177. The company's current ratio
b. Rs. 62,000 a. 0.67 : 1
c. Rs. 50,000 b. 1.0 : 1
d. Rs. 98,400 c. 2.1 : 1
Ans - c d. 2.6 : 1
Ans – c
174. There is 50% increase in an amount in 5
years at simple interest. What will be the 178. The company's quick ratio
compound interest of Rs. 10,000 after 2 years a. 0.67 : 1
at the same rate? b. 1.0 : 1
a. Rs. 2450 c. 2.1 : 1
b. Rs. 2100 d. 2.6 : 1
c. Rs. 1855 Ans – a
d. Rs. 2200
Ans – b Balance Sheet (in lakhs) as on 31.03.2017
Assets
175. Revenue receipts are shown in ...... Current Assets Cash - 500
a. Balance Sheet Accounts Receivable - 300
b. Profit and Loss appropriation A/c Inventory - 200
c. Manufacturing A/c Total Current Assets - 1000
d. Trading and Profit and Loss A/c Fixed Assets
Ans - d Property, Plant, and Equipment - 2100
Less Accumulated Depreciation - 400
On 31.03.2017, a company's records show the Net Fixed Assests - 1700
following information: Total Assets - 2700
Cash - 10,000 Liabilities and Owners' Equity
Accounts receivable - 30,000 Current Liabilities
Inventory - 80,000 Accounts Payable - 400
Prepaid Insurance - 6,000 Notes Payable - 200
Long-term assets - 2,00,000 Total Current Liabilities - 600
Accounts payable - 30,000 Long-Term Liabilities
Notes payable due in 10 months - 25,000 Long-Term Debt - 1200
Wages payable - 5,000 Total Long-Term Liabilities - 1200
Long-term liabilities - 70,000 Owners' Equity
Stockholders' (Owner's) Equity - 1,96000 Common Stock (1 Par) – 600
JAIIB Practice MCQs Free e-book

Capital Surplus - 200 182. Days' Receivables

Retained Earnings - 100 a. 91.25 Days
Total Owners' Equity - 900 b. 121.67 Days
Total Liab. and Owners' Equity - 2700 c. 182.5 Days
Profit and Loss Account (in Lakhs) for the year d. 365 Days
ended 31.03.2017 Ans – b
Sales - 900
Cost of Goods Sold - 600 183. Inventory Turnover
Administrative Expenses - 300 a. 1 time
Depreciation - 362 b. 2 times
Earnings Before Interest and Taxes - -362 c. 3 times
Interest Expense - 130 d. 4 times
Taxable Income - (-)492 Ans – c
Taxes - (-)81
Net Income - (-)411 184. Days' Inventory
Dividends - 0 a. 91.25 Days
Addition to Retained Earnings - (-)411 b. 121.67 Days
Other Information c. 182.5 Days
Number of Shares Outstanding (lakhs) - 600 d. 365 Days
Price per Share - 1.8 Ans – b

Calculate the following ratios: 185. A cheque for Rs. 1,000 received from
179. Current Ratio Rebecca Jones, a trade debtor, should be
a. 1 : 1 accounted for as ......
b. 1.33 : 1 a. Debit Rebecca Jones’ Account credit Cash
c. 1.67 : 1 Account.
d. 2 : 1 b. Debit Cash Account and credit Rebecca
Ans – c Jones’ Account
c. Debit Bank Account and credit Rebecca
180. Quick Ratio Jones’ Account.
a. 1 : 1 d. Debit Cash Account and credit Sales Account
b. 1.33 : 1 Ans - b
c. 1.67 : 1
d. 2 : 1 186. Loan to Value (LTV) Ratio against pledge
Ans – b of gold ornaments and jewellery for non-
agricultural purposes should not exceed ......
181. Receivables Turnover of the value of gold ornaments and jewellery
a. 1 time a. 70 per cent
b. 2 times b. 75 per cent
c. 3 times c. 80 per cent
d. 4 times d. 90 per cent
Ans – c Ans - b
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187. Margin money required for Education Given the following information, Calculate...
Loan Upto Rs.4 lakh is ...... Revenue from Operations 3,40,000
a. No margin Cost of Revenue from Operations 1,20,000
b. 5 percent Selling expenses 80,000
c. 10 percent Administrative Expenses 40,000
d. 15 percent
Ans - a 191. Gross Profit
a. Rs. 2,00,000
188. Under capitalization method of goodwill b. Rs. 2,20,000
valuation, which of the following formulas is c. Rs. 2,40,000
used to calculate the “value of whole d. Rs. 2,60,000
business”? Ans – b
a. Value of whole business=Profit / Reasonable
rate of return X 100 192. Operating Cost
b. Value of whole business= Total assets / a. Rs. 2,00,000
Reasonable rate of return X 100 b. Rs. 2,20,000
c. Value of whole business= Equity-Net assets c. Rs. 2,40,000
d. None of the above d. Rs. 2,60,000
Ans - a Ans – c

189. Petty expenses are recorded in which of 193. Gross profit ratio
the following Cash Book ...... a. 64.71%
a. Petty Cash Book b. 66.71%
b. Simple Cash Book c. 68.59%
c. Two-Column Cash Book d. 70.59%
d. Three-Column Cash Book Ans – a
Ans - a
194. Operating ratio
190. The bank statement reports a credit a. 64.71%
transfer of Rs. 400 from a customer on 29th b. 66.71%
July. c. 68.59%
Accounting entries for this are ...... d. 70.59%
a. A debit in the Bank Account and a credit in Ans - d
the account of the customer concerned
b. A debit in the Cash Account and a credit the 195. In case of death of depositor, interest for
account of the debtor concerned overdue period will be paid at ...... if
c. A debit in the account of the debtor depositor dies before maturity of FDR.
concerned and a credit in the Bank Account a. Saving rate
d. A debit in the Bank Account and a credit in b. FD rate as on date of maturity
the Cash Account c. FD rate as on date of death
Ans - a d. Whichever is more from the above
Ans - b
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196. Relationship between the Bank and the 200. As per KYC norms, branches should
Customer is "Trustee - Beneficiary" in the monitor ......
following Transactions. a. cash deposits 10 lakhs and above in deposit
(i) Payee of draft, accounts
(ii) Goods left negligently by customer, b. cash payment of 10 lakhs and above in
(iii) Money deposited. No instructions for its deposit accounts
disposal c. cash receipt/cash payment Rs. 10 lakhs or
a. Only (i) and (ii) above in deposits accounts including CC/OD
b. Only (i) and (iii) d. Only cash deposit in Savings account for Rs
c. Only (ii) and (iii) 10 lakhs and above
d. (i), (ii) and (iii) Ans - c
Ans - d
201. What is the rate of simple interest for
197. An amount is invested in two schemes, A the first 4 years if the sum of Rs. 360 becomes
and B. Ratio of investment in A to that of B is Rs. 540 in 9 years and the rate of interest for
17:8. A gives interest after 2 years at 10% the last 5 years is 6%?
compound interest while B gives interest a. 4 percent
after 2 years at 21% simple interest. What will b. 10 percent
be the ratio of interest earned through A to c. 8 percent
that of B? d. 5 percent
a. 9:11 Ans – d
b. 17:16
c. 14:11 From the following balance sheet of ABC Co.
d. 16:13 Ltd. as on March 31, 2017. Calculate ......
Ans - b I. Equity and Liabilities - 7,00,000
1. Shareholders’ funds
198. In the general form of partnership, a) Share capital 4,00,000
liabilities of partners are ...... b) Reserves and surplus 1,00,000
a. limited 2. Non-current Liabilities
b. unlimited Long-term borrowings 1,50,000
c. limited to the business capital 3. Current Liabilities 50,000
d. None of the above II. Assets - 7,00,000
Ans - b 1. Non-current Assets
a) Fixed assets 4,00,000
199. Interest on drawings is ...... b) Non-current investments 1,00,000
a. Debited to partner’s current a/c 2. Current Assets 2,00,000
b. Credited to partner’s current a/c
c. Not shown in current account 202. Debts
d. None of the above a. Rs. 1,50,000
Ans - a b. Rs. 5,00,000
c. Rs. 5,50,000
d. Rs. 6,50,000
Ans – a
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203. Equity 209. If a sum of Rs16 becomes Rs81 in 4yrs

a. Rs. 1,50,000 then find the rate of interest at compound
b. Rs. 5,00,000 interest?
c. Rs. 5,50,000 a. 33(1/3) percent
d. Rs. 6,50,000 b. 40 percent
Ans – b c. 50 percent
d. 66(2/3) percent
204. Capital Employed Ans – c
a. Rs. 1,50,000
b. Rs. 5,00,000 210. Which of the following is not recorded in
c. Rs. 5,50,000 the partners current accounts?
d. Rs. 6,50,000 a. Drawings
Ans – d b. Interest on Drawings
c. Partners salaries
205. Debt-Equity Ratio d. Administrative expenses
a. 0.23 : 1 Ans - d
b. 0.3 : 1
c. 0.71 : 1 211. Under the KYC guidelines, banks need to
d. 4.67 : 1 conduct EDD - "Enhanced due diligence" in
Ans – b the following cases ......
a. Correspondent accounts
206. Total Assets to Debt Ratio b. Non-face-to-face customers
a. 0.23 : 1 c. Firms with sleeping partners
b. 0.3 : 1 d. Trustees, Nominees and fiduciaries
c. 0.71 : 1 Ans - all
d. 4.67 : 1
Ans - d 212. Timeframe for collection of outstation
cheques in case of Cheques drawn on State
207. Proprietory Ratio Capitals ......
a. 0.23 : 1 a. 2 Days
b. 0.3 : 1 b. 7 Days
c. 0.71 : 1 c. 10 Days
d. 4.67 : 1 d. 14 Days
Ans – c Ans - b

208. Debt to Capital Employed Ratio 213. Which one of the following is the
a. 0.23 : 1 method of goodwill valuation?
b. 0.3 : 1 a. Average capital method
c. 0.71 : 1 b. Super capital method
d. 4.67 : 1 c. Capital intensity method
Ans – a d. Super profit method
Ans - d
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214. As per RBI, gold jewellery accepted as 218. The year-end balance in a Trade
security/collateral will have to be valued at Receivable's account has been carried down
the average of the closing price of 22 carat as Rs. 14,800, instead of Rs. 18,400.
gold for the preceding ...... as quoted by the a. Excess debit Rs. 3,600
Indian Bullion and Jewellers Association Ltd. b. Excess credit Rs. 3,600
a. 7 days c. No impact
b. 10 days d. None of the above
c. 14 days Ans - a
d. 30 days
Ans - d 219. The total of the Returns Outwards Day
Book, amounting to Rs. 9,800, has been
215. Margin money required for Education posted to the debit of the Purchases Returns
Loan above Rs.4 lakh for Studies abroad is account.
...... a. No impact
a. No margin b. Excess debit Rs. 9,800
b. 5 percent c. Excess debit Rs. 19,600
c. 10 percent d. None of the above
d. 15 percent Ans - c
Ans - d
220. A man lends a certain sum of money at
216. If the difference between CI and SI simple interest. Rate of interest for first one
earned on a certain amount at 20% pa at the and half years is 4% per annum, for next 6
end of 3 years months is 5% per annum and after that 8%
is Rs.640, find out the principal. per annum. If he received Rs. 8737.5 at the
a. Rs. 5500 end of 3 years, what was his principal?
b. Rs. 6500 a. Rs. 6850
c. Rs. 4500 b. Rs. 7200
d. Rs. 5000 c. Rs. 7380
Ans – d d. Rs. 7500
Ans – d
What would be the impact of the following
errors on the Trial Balance? 221. Which of these errors effect only one
account?
217. A Credit Note for Rs. 2,400 received from a. Errors of casting
a supplier has been posted to the credit of the b. Errors of carry forward
supplier's account. c. Errors of posting
a. Excess credit Rs. 2,400 d. All the three
b. Excess credit Rs. 4,800 Ans - d
c. Excess debit Rs. 2,400
d. None of the above
Ans - c
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222. Visually challenged person can avail 226. Eligible Courses under Education Loan
which of the following banking facilities? Scheme include ......
(i) Cheque book facility including third party (i) School education including plus 2 stage,
cheques, (ii) Graduation & Post Graduation courses,
(ii) ATM/Net banking facility, (iii) Professional courses, computer certificate
(iii) Credit cards courses etc.
a. Only (i) and (ii) a. Only (i) and (ii)
b. Only (i) and (iii) b. Only (i) and (iii)
c. Only (ii) and (iii) c. Only (ii) and (iii)
d. (i), (ii) and (iii) d. (i), (ii) and (iii)
Ans - d Ans - d

223. Security required for Education Loan 227. Under fluctuation method of capital,
Upto more than Rs 4 lakh but up to Rs 7.5 what is the treatment of “interest on
lakh is ...... capital”?
(i) Third party Guarantee, a. Credited to capital account
(ii) Co obligation of parent b. Debited to capital account
a. Only (i) c. No treatment or adjustment needed
b. Only (ii) d. Credited to current account
c. Either (i) or (ii) Ans - a
d. Both (i) and (ii)
Ans - d 228. Mr. X commenced business introducing a
vehicle worth Rs. 24,000, furniture valued at
224. Margin money required for Education Rs. 8,000, and Rs. 5,000 in cash along with a
Loan above Rs.4 lakh for Studies in India is bank loan of Rs. 2,500. His Capital account
...... balance at commencement of business is ......
a. No margin a. Rs. 34,500
b. 5 percent b. Rs. 32,000
c. 10 percent c. Rs. 24,000
d. 15 percent d. Rs. 37,000
Ans - b Ans – a

225. A partner that doesn’t take part in the 229. In a Statement of financial position the
management of business, but he/she has drawings by the proprietor should be shown
made investment in business and liable to ......
creditors of the business is known as: a. along with Trade Receivables balances
a. Active partner b. as a deduction from the Capital account
b. Nominal partner balance
c. Junior partner c. along with Trade Payables balances
d. Dormant partner d. as an addition to the Capital account
Ans - d balance
Ans – b
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230. A lent Rs. 4000 to B for 3 years and Rs. 235. What type of accounting error has
5000 to C for 4 years on simple interest at the occurred when an amount received from Ram
same rate of interest and received Rs. 3200 in is posted to Raj?
total from both as interest. The rate of a. Error of duplication
interest per annum is: b. Error of commission
a. 6 percent c. Double entry error
b. 12 percent d. Error of principle
c. 15 percent Ans - b
d. 10 percent
Ans – d 236. Is India a member of FATF?
a. Yes
231. At what rate of % per annum will b. No
Rs.2304 amount to Rs. 2500 in 2 years c. Has applied for inclusion
compounded annually. d. Is likely to be made a member
a. 5.2 percent Ans - a
b. 4.16 percent
c. 3.45 percent 237. Bank cannot discriminate among
d. 4.5 percent customers regarding payment of interest
Ans – b except for single deposits of ......
a. Rs 5 lac and above
232. Simple interest on a certain sum of b. Rs 10 lac and above
money for 3 years at 8% per annum is half the c. Rs 15 lac and above
compound interest on Rs. 4000 for 2 years at d. Rs 25 lac and above
10% per annum. The sum on simple interest is Ans - c
a. Rs. 1400
b. Rs. 1525 238. X purchases a coat for Rs.2400 cash or
c. Rs. 1750 for Rs.1000 cash down payments and two
d. Rs. 1620 monthly installments of Rs.800 each. Find the
Ans – c rate of interest.
a. 80 percent
233. A sum of Rs 343 becomes 512 in 3 years b. 100 percent
at C.I. Find the rate of interest. c. 110 percent
a. 14 (2/7) percent d. 120 percent
b. 12.5 percent Ans – d
c. 8 (2/3) percent
d. 16 (2/3) percent 239. Relationship between the Bank and the
Ans – c Customer is "Agent - Principal" in the
following transactions.
234. Total number of Subsidiary Books are (i) Collection of cheque & Standing
a. 5 instruction,
b. 4 (ii) Purchase/sale of securities on
c. 8 behalf of customer,
d. 2 (iii) Currency Chest on behalf of RBI
Ans – c a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
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240. As per Section 269 T of Income Tax Act, 245. A sum of money trebles itself in 15 years
the payment should be made through credit 6 months. In how many years would it double
to account or issuing account payee cheque or itself?
DD, if the interest of term deposit is ...... a. 6 years 3 months
a. Above Rs. 10,000 b. 7 years 9 months
b. Rs. 10,000 or above c. 8 years 3 months
c. Above Rs. 20,000 d. 9 years 6 months
d. Rs. 20,000 or above Ans – b
Ans - b
246. What type of accounting error has
241. The officer holding charge of cash will occurred when a sale, entered in the Sales
check the whole of the bank Cash Balance by Day Book has not been posted?
test check of different denominations and a. Entry error
Register evidence of such check in the Cash b. Double entry error
Balance Book, at least ...... c. Error of duplication
a. once a week d. Error of principle
b. once a week on different days Ans - b
c. once a month
d. once a month on different days 247. Banks in India can't outsource ......
Ans - b (i) KYC,
(ii) Marketing,
242. A certain principal amounts to Rs. 15000 (iii) Corporate planning
in 2.5 years and to Rs. 16500 in 4 years at the a. Only (i) and (ii)
same rate of interest. Find the rate of b. Only (i) and (iii)
interest. c. Only (ii) and (iii)
a. 5 percent d. (i), (ii) and (iii)
b. 6 percent Ans - b
c. 7 percent
d. 8 percent 248. A person invests some money in bonds
Ans – c on which interest would be received by him
on half- yearly basis at the end of each 6th
243. Claim owes by the Business are called month. Such payment can be said to be ......
a. Liabilities a. At the end annuity
b. Assets b. At the beginning annuity
c. Expenses c. Ordinary annuity
d. Income d. Sinking annuity
Ans - a Ans - c

244. Credit purchase of Furniture will be

recorded in ......
a. Purchase Book
b. Sales Book
c. Journal Proper
d. Cash Book
Ans - c
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249. Forex rate in Delhi is: 254. KYC guidelines of RBI protect banks from
1 US $ = 48.80/90. being used for ......
In London the 1 Euro = US $ 1.60/65 pound (i) money laundering purpose by
sterling. criminals,
What is the cross rate for Euro? (ii) Financing terrorism,
a. 78.08 (iii) for financing black marketing activities
b. 77.92 a. Only (i) and (ii)
c. 77.65 b. Only (i) and (iii)
d. 77.02 c. Only (ii) and (iii)
Ans - a d. (i), (ii) and (iii)
Ans - a
250. The value stated on the bond certificate
is called ...... 255. Provision is done on ......
a. market value a. Outstanding ledger balance
b. redemption value b. Outstanding record balance
c. face value c. Closure balance
d. net present value d. None of the above
Ans - c Ans - a

251. Coupon rate of a bond means ...... 256. A party draws a bill of exchange in Delhi
a. the maturity value payable in Bangalore by a foreigner and no
b. the interest rate payable on the bond sale or purchase has actually taken place.
c. the value accepted at the time of issue of Such bills are called ......
the bond a. Documentary bills
d. the market value at a given point of time. b. Foreign bills
Ans - b c. Accommodation bills
d. Usance bills
252. The value which an investor receives on Ans - c
maturity of a bond is called,
a. market value 257. A bill has been received by a drawee X
b. redemption value from drawer Y and has been dishonored and
c. face value noted. What journal entries will be passed in
d. net present value the books of the drawee?
Ans - b a. Debit bills receivable, credit Y and noting
charges
253. Cash book is book of ...... b. Debit bills payable, credit noting charges & Y
a. Prime entry c. Debit bills payable & noting charges, credit Y
b. Final entry d. Debit Y & noting charges, credit bills payable
c. Both of the above Ans - c
d. None of the above.
Ans - c
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258. Cash discount is ...... 262. The books in which all particulars
(i) The allowance to expedite cash receipts relating to bills accepted are recorded is
and payments within a specified period, called bills ...... (receivable/payable) books
(ii) It is a loss for the firm receiving the and the entry is posted to the debit of
payment and again for the firm making respective ...... (debtor/creditor)
the payment, a. Payable, creditor
(iii) Discount allowed is entered on debit side b. Payable, debtor
and discount earned on the credit side of cash c. Receivable, creditor
book. d. Receivable. Debtor
a. Only (i) and (ii) Ans - a
b. Only (i) and (iii)
c. Only (ii) and (iii) 263. The journal entries are posted in the
d. (i), (ii) and (iii) ledger ......
Ans - d a. In order of their category
b. In order of their dates
259. The present value of a bond is equal to c. In order of their importance
...... d. As per discretion of the firm
a. the amount of interest it will earn Ans - b
b. the amount of future cash to be received in
future till maturity of the bond 264. Accounts opened under PMJDY are
c. the present value of cash to be received in eligible for a life insurance cover for Rs. ......
future till maturity of the bond a. Rs. 5000
d. the amount to be received on maturity b. Rs. 30000
Ans - c c. Rs. 50000
d. Rs. 100000
260. Current yield of a bond can be calculated Ans - b
as under ......
a. current interest / current market price 265. What should be recorded regarding
b. coupon interest / face value records of employee training on AML/KYC?
c. coupon interest / current market price (i) date of training,
d. current interest / face value (ii) nature of the training received,
Ans - c (iii) attendance
a. Only (i) and (ii)
261. A machinery is purchased for Rs.4 lac. Its b. Only (i) and (iii)
rate of annual depreciation is 20% under c. Only (ii) and (iii)
written down value method. Its depreciated d. (i), (ii) and (iii)
value at the end of 2nd year would be ...... Ans - d
a. Rs.2.56 lac
b. Rs.2.04 lac 266. When the balance as per the cash book is
c. Rs.2.40 lac staring point, in the reconciliation, the
d. Rs.1.60 lac amount of cheques issued and not presented
Ans - a are ......
a. Subtracted
b. Added
c. Either added or subtracted
d. None of the above
Ans - b
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267. To make provision on bad debts, which 271. There is a current account in the name of
of the following journal entry is correct ...... a trust. The nomination in this account can be
a. Debit the profit & loss and credit the bad allowed if the nominee is a ......
debt account a. Trustee
b. Debit the profit and loss account and credit b. Person named in the trust deed
provision on bad debts account c. Manager
c. Debit the provision account and credit the d. Nominee cannot allowed
bad debt account Ans - d
d. Debit the provision and credit the account of
individual customer. 272. Economic life of an enterprise is split into
Ans - b the periodic interval as per..
a. Money measurement concept
268. ...... value of an asset is equal to the b. Matching concept
present value of the benefits associated with c. Going concern concept
it. d. Accrual Concept
a. market value Ans - c
b. sale or purchase value
c. intrinsic value 273. What is the amount of gross profit/loss
d. net present value when opening stock is Rs. 18,000, purchases
Ans - c Rs. 78,000, cost of good sold Rs. 1,06,000 and
sales Rs. 1,49,000?
269. Retained earning is synonymous to.. a. Rs. 44,000 profit
a. accumulated profit and loss account b. Rs. 42,000 profit
b. profit for the year c. Rs. 43,000 profit
c. operating profit d. Rs. 43,000 loss
d. gross profit Ans - d
Ans - a
274. Which of the following is an example of
270. A person having Basic Savings Bank fictitious assets?
Deposit Account (BSBDA) in a bank can have a. Machinery
which of the following accounts in the same b. Stock
bank? c. Patent
(i) Savings Account, d. Preliminary Expenses
(ii) Fixed Deposit, Ans - c
(iii) Recurring Deposit
a. Only (i) and (ii) 275. What is the main purpose of Bank
b. Only (i) and (iii) Reconciliation?
c. Only (ii) and (iii) a. To locate cashier’s mistake
d. (i), (ii) and (iii) b. Reconciliation of the cash book and bank
Ans - c balances
c. To find out bank balances
d. to find out cash balances
Ans - b
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276. Double entry book-keeping was started 280. When the accounting standards are not
by followed by a business ......
a. F.W Taylor (i) the auditors qualify their audit reports,
b. Henry Fayol (ii) if auditors d do not qualify their audit
c. Lucas Pacioli reports they are guilty of professional
d. Adam Smith misconduct,
Ans - c (iii) the management is held responsible
a. Only (i) and (ii)
277. The holding period of bond for which the b. Only (i) and (iii)
interest rate risk disappears is called ...... c. Only (ii) and (iii)
a. yield to maturity d. (i), (ii) and (iii)
b. duration of the bond Ans - d
c. maturity period of the bond
d. redemption period of the bond 281. The depreciation under sum of year’s
Ans - b digit (SYD) is calculated with the help of which
of the following?
278. The rate of return earned on a bond a. (written down value-salvage value)*
when purchased at its current price when (remaining useful life / sum of year’s digit)
coupon interest is received is called ...... b. (original cost-salvage value)*(sum of year’s
a. rate of return digit / remaining useful life)
b. current yield of the bond c. (written down value-salvage value)* (sum of
c. yield to maturity year’s digit / remaining useful life)
d. any of the above d. (original cost-salvage value)* (remaining
Ans - b useful life / sum of year’s digit)
Ans - d
279. Which of the following accounts is called
valuation account or contra account? 282. Which of the following does not match?
(a) provision for depreciation account a. Purchase of machinery for sale- revenue
(b) provision for doubtful debts account expenditure
(c) stock reserve account b. Advertisement expenses – deferred revenue
(d) reserves and surpluses account expenses
a. a to d all c. Payment of wages to labourer- revenue
b. a, b and c only expenditure
c. a, c and d only d. Purchase of goods for trade- capital
d. b, c and d only expenditure
Ans - b Ans - d

283. The pass book of the firm has been

showing debit balance of Rs.75000. it is
observed that the bank has not debited a
cheque of Rs.1000 issued by the firm and has
debited Rs.300 on account of interest. What is
the balance as per cash book.
a. 75700 Dr
b. 76300 Dr
c. 76300 Cr
d. 75700 Cr
Ans - d
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284. Which of the following statements best 288. Depreciation is the result of ......
explains the relationship between Journal & (a) wear and tear due to use
Ledger? (b) fall in market price
a. First recording in Journal and then posting to (c) obsolescence
ledger completes the double aentry of the (d) passage of time
transactions. a. A to d all
b. Journal is the book of original entry where b. A to c only
as the ledger is the book of second entry c. B to d only
c. The journal is the book for analytical record d. A, b and only
and the ledger is the book for chronological Ans - a
record
d. The process of recording in the Journal is 289. An asset is purchased for Rs.4 lac on
called posting, the process of recording in the 1.10.2012 and its rate of depreciation is 10%
ledger is called journalizing. at diminishing value. Its amount of
Ans - b depreciation during the year and written
down value at March 31,2015 would be ......
285. An entry of Rs.500 was wrongly posted a. 38000,342000
to wages A/c instead of Machinery Account, b. 35900,325900
as wages are to be capitalized. It is an error of c. 34200,307800
...... d. None of the above
a. Commission Ans - c
b. Principle
c. Omission 290. The promoter brings capital of Rs.10000
d. Clerical out of which he purchases furniture worth
Ans - c Rs.2000. The balance sheet of the firm will
show ......
286. Overdraft as per Cash book means ...... a. Capital at Rs.8000 & furniture at Rs.2000
a. Credit balance in the cash book b. Capital at Rs.10000 & furniture at Rs.2000
b. Credit balance in the bank column of the c. Capital at Rs.10000 & furniture at Rs.2000 &
cash book cash Rs.8000
c. Neither of the two d. Capital at Rs.8000 & furniture at Rs.2000 &
d. Both of the two cash Rs.10000
Ans - a Ans - c

287. The bank account pass book of XYZ has 291. Which of the following error will be
been showing a balance of Rs.30200. One of disclosed by the trial balance?
the debtors of the firm has deposited Rs.3000 (i) Omitting to post an amount from a
directly in the account of the firm which bank subsidiary book,
has credited to the account of the firm which (ii) Omitting to post the totals of subsidiary
bank has credited to the account of one of the books into the ledger,
partners. What is the balance as per cash (iii) Omission in writing the cash book balance
book? in the trail balance
a. Rs.30200 a. Only (i) and (ii)
b. Rs.27200 b. Only (i) and (iii)
c. Rs.33200 c. Only (ii) and (iii)
d. Rs.26800 d. (i), (ii) and (iii)
Ans - a Ans - d
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292. A person purchased a lap top for 296. In the event of delay in reporting
Rs.30000 by raising a loan from the bank at currency chest transactions, penal interest
12% on simple rate of interest, payable in 2 will be levied on the amount due from the
years as weekly payment. The total amount chest holding bank for the period of delay
of interest would be Rs. ...... and the weekly which will be calculated on ......basis.
installment would be Rs. ...... However, Reserve Bank may at its discretion
a. 7200, Rs.357.60 grant appropriate grace period in the
b. 3600, Rs.357.60 matter of levy of penal interest
c. 7200, Rs.715.20 a. T+0 basis
d. 3600, Rs.715.20 b. T+1 basis
Ans - a c. T+2 basis
d. T+3 basis
293. The provision for bad and doubtful debts Ans - a
at the time of dissolution of a firm is
transferred to which of the following 297. When the balance as per the cash book is
accounts ...... staring point, in the reconciliation, the
a. Realization account amount of cheques issued and not presented
b. Capital account of partners equally are ......
c. Capital account of partners in their sharing a. Subtracted
ratios b. Added
d. Debtors’ accounts c. Either added or subtracted
Ans - a d. None of the above
Ans - b
294. The sale of business asset on credit is
recorded in ...... 298. Where a reporting entity provides an
a. Sales journal option for One Time Pin (OTP) based e-KYC
b. General journal process for on-boarding of customers, the
c. Cash receipt in cash book aggregate credit in a financial year, in such
d. Nominal accounts accounts can be ......
Ans - b a. Rs. 25000
b. Rs. 50000
295. In a business the net assets as on Jan. 1st c. Rs. 1 lac
are Rs.6000 and on January 31st are Rs.1000, d. Rs. 2 lac
the net income during January is ...... Ans - d
a. 2500
b. 1500 299. Which among the following is not correct
c. 500 in the context of annuity?
d. 1600 a. Term of annuity-total time during which
Ans - a regular payments are made
b. Payment period- the regular rime periods
during which payments are made
c. Ordinary annuity- where payments are made
at the end of the period
d. Annuity date- when payments are made at
the end of the period
Ans - d
JAIIB Practice MCQs Free e-book

300. Accounting cycle includes ...... 304. Where banks open a bank account of a
(i) Recording, foreign student, a declaration about the local
(ii) Classifying, address shall be obtained within a period of
(iii) Summarising ...... days of opening the account and the said
a. Only (i) and (ii) local address is verified
b. Only (i) and (iii) a. 15 days
c. Only (ii) and (iii) b. 30 days
d. (i), (ii) and (iii) c. 60 days
Ans - d d. six months
Ans - b
301. Nominal accounts relate to ......
(a) incomes 305. A person wants to have Rs.2 lac annually
(b) expenses for 20 years by investing the amount in an
(c) assets annuity interest rate of 5%. He will have to
(d) liabilities invest ......
a. a to d all a. Rs.24 lac
b. a and b only b. Rs.2492440
c. b and c only c. Rs.2429000
d. a and c only d. Rs.25 lac
Ans - b Ans - b

302. Which of the following is a key element 306. A sinking fund can be created for using it
of KYC policy of a bank, as per RBI directions for
...... (a) pay a loan in lump sum
(1) customer acceptance policy (b) to redeem a bond
(2) risk management (c) to buy new machinery
(3) customer identification procedure (d) to replace a worn out equipment ......
(4) monitoring of transactions a. A to d all
(5) reporting of transactions b. A, b and c only
a. 1 to 5 all c. A, c and d only
b. 1 to 4 only d. B, c and d only
c. 1 to 3 only Ans - a
d. 1 and 2 only
Ans - b 307. When the required rate of return is (less
than / more than) the coupon rate, the
303. In a Basic Savings Bank Deposit Account discount on the bond ...... as maturity
(BSBDA) – Small Account, what is the limit on approaches ......
amount of withdrawals and transfers in a a. More than, increases
month? b. Less than, increase
a. Rs 5,000 c. Less than, constant
b. Rs 10,000 d. More than, declines
c. Rs 20,000 Ans - d
d. Rs 25,000
Ans - b
JAIIB Practice MCQs Free e-book

308. X gets a car on hire purchase basis 312. When two sides of an account are
costing Rs.250000. The down payment is equalized by putting the difference on the
Rs.50000. The balance is to be paid in 24 side where amount is short, the process is
monthly instalments at 10% rate of interest. called ......
The EMI would be ...... a. Balancing
a. Rs.11500 b. Journalizing
b. Rs.11000 c. Posting
c. Rs.10000 d. A or c
d. Rs.9500 Ans - a
Ans - c
313. The debit balance of an account may
309. Which of the following is a correct represent either an asset or an expense.
statement regarding a cash book Which of the following is not in connection
(a) it is book of original with the debit balance?
(b) it is subsidiary book and a ledger account a. Cash account- asset
also b. Rent account- expense
(c) it records all cash transactions c. Pre-paid expenses- asset
(d) the fundamental rule that each entry d. Pre- operative expenses – expense
should be first recorded in the book of prime Ans - d
entry and then posted applies to cash book
also ...... 314. Which of the crime is/are included under
a. A to d all correct PMLA, 2002 for proceeds of crime?
b. A, b and c are correct (i) Drug trafficking,
c. B, c and d are correct (ii) Kidnapping,
d. A, b and d are correct (iii) Murder
Ans - b a. Only (i) and (ii)
b. Only (i) and (iii)
310. The accounting cycle of business c. Only (ii) and (iii)
transactions follows the following order ...... d. (i), (ii) and (iii)
a. Summarizing – recording – classifying Ans - d
b. Classifying – summarizing – recording
c. Recording – classifying – summarizing 315. In case of a deposit account in the joint
d. None of the above name of X & Y and the nominee is A. Mr. X
Ans - c died in an accident. The balance is payable to
......
311. A company raised funds from public a. Nominee A
through a public issue ar premium. The b. Nominee A, legal heirs of X & Y
amount premium can be used for c. Y & legal heirs of X
(a) issue of fully paid bonus shares d. Y only
(b) paying premium on redemption Ans - c
expenses.
a. A, b and c only
b. B, c and d only
c. A, c and d only
d. A to d all
Ans - d
JAIIB Practice MCQs Free e-book

316. Debit in real account means 321. The following differences between the
(a) the value of the asset whose account is Cash Book entries and information in the
being debited has increased bank statement have been identified:
(b) the value of the asset whose account is i) An amount incorrectly credited to the
being debited has decreased company's account by the bank
(c) business has acquired more of that asset ii) Lodgements into bank not reported in the
(d) business has sold that asset ...... bank statements
a. A or c only iii) Dishonour of a cheque deposited into the
b. B or c only bank
c. A or d only iv) Bank loan interest recovered by the bank
d. C or d only v) Cheques drawn by the company yet to be
Ans - a presented to bank
Which set of alternatives correctly analyses
317. Cash which is not due as income of the treatment of these?
business is not credited to income under ...... a. In Cash Book: ii, iv; In bank rec: i, iii, v
system and cash received whether due or not b. In Cash Book: iii, iv; In bank rec: i, ii, v
is taken as income of the business under ...... c. In Cash Book: ii, iv, v; In bank rec: i, iii
system d. In Cash Book: i, ii, iii; In bank rec: iv, v
a. Accrual, accrual Ans - b
b. Accrual, cash
c. Cash, accrual 322. If the Petty Cash Book is treated as
d. Cash, cash merely a subsidiary book of accounts, Rs. 78
Ans - b paid by the Cashier to restore the petty cash
balance to the level of the imprest should be
A trader carries an average inventory of Rs. accounted for as ......
40,000. His inventory turnover ratio is 8 a. Debit Petty Cash Book and credit Cash
times. If he sells goods at a profit of 20% on Account
Revenue from operations, find ...... b. Debit Petty Cash Account and credit Cash
318. Cost of Revenue from operations Account
a. Rs. 80,000 c. Debit Petty Cash Account and credit Bank
b. Rs. 2,20,000 Account
c. Rs. 3,20,000 d. Debit Cash Account and credit Petty Cash
d. Rs. 4,00,000 Account
Ans – c Ans - b

319. Revenue from operations 323. A sum of money four folds itself in 24
a. Rs. 80,000 years o compound interest. With the same
b. Rs. 2,20,000 rate per cent per annum the amount becomes
c. Rs. 3,20,000 sixteen times itself in.
d. Rs. 4,00,000 a. 48 years
Ans – d b. 72 years
c. 24 years
320. Gross Profit d. 96 years
a. Rs. 80,000 Ans - a
b. Rs. 2,20,000
c. Rs. 3,20,000
d. Rs. 4,00,000
Ans - a
JAIIB Practice MCQs Free e-book

324. When drawing up a BRS, if you start with 328. Which of the following error is an error
a Credit balance as per the Pass Book, the of principle?
unpresented cheques should be ...... a. Rs. 5,000 received from Sham credited to
a. Added Ram A/c
b. Deducted b. Rs. 5,000 incurred on installation of new
c. Not required to be adjusted plant debited to travelling expenses A/c
d. None of the above c. Rs. 500 paid for wages debited to salary A/c
Ans - b d. Rs. 500 being purchase of raw material
debited to purchase A/c Rs. 50
325. The credit entries in a Bank Account ...... Ans - b
a. Will not be supported by a cheque number
only when payment is by BACS or Standing 329. A lent Rs. 6000 to B for 3 years and Rs.
Order 7000 to C for 4 years on simple interest at the
b. Should each be supported by a cheque same rate of interest and received Rs. 4600 in
number which depends on when the cheque all from both of them as interest. The rate of
was posted interest per annum is:
c. Should each be supported by a sequential a. 12 percent
cheque number b. 10 percent
d. Will not be supported by a cheque number c. 8 percent
when payment is by BACS or Standing Order or d. 9 percent
when cash is drawn out from Cash Machine or Ans – b
when the bank recovers bank charges.
Ans - d 330. When banks sell third party products
(such as insurance, mutual funds etc.) as
326. A Pass Book is a copy of ...... agents, the responsibility for ensuring
a. A Customer's account in the Bank's Books compliance with KYC/AML/CFT regulations
b. Cash Book relating to bank column a. lies with the bank marketing the product
c. Cash Book relating to cash column b. lies with the third party issuer
d. Firm's receipts and payments c. lies with both the bank as well as the third
Ans - a party issuer
d. depends on whether the customer pays the
327. Which of these errors affect two or more money in cash or otherwise
accounts? Ans - b
a. Errors of complete omission
b. Errors of principle 331. Relationship between the Bank and the
c. Errors of posting to wrong account Customer is "Creditor - Debtor" in the
d. All the three following Transactions.
Ans - d (i) Loan from Bank (Debit balance in account),
(ii) issue of draft (after issue of draft),
(iii) Debit Balance in CC/OD account
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - b
JAIIB Practice MCQs Free e-book

332. Partnership type of business is formed by 335. Find the compound interest on Rs. 1000
the mutual agreement of partners. What kind at the rate of 20% per annum for 18 month
of agreement is it? when interest is compounded half yearly.
a. Oral agreement a. Rs. 662
b. Written agreement b. Rs. 545
c. Oral or written agreement c. Rs. 620
d. None of the above d. Rs. 568
Ans - c Ans – a

333. Where there is no partnership

agreement exists between partners, what will
be the profit sharing ratio between the
partners?
a. Equal
b. Unequal
c. It will depend on a partner’s capital
d. It will depend on the experience of a partner
Ans - a

334. Any excess in the Cash Balance must be

credited to ...... on the same day itself.
a. Sundry Creditors Account
b. Sundry debtors Account
c. Suspense Account
d. Any one of the above
Ans - a
JAIIB Practice MCQs Free e-book

Legal and Regulatory Aspects of Banking

1. Which of the following document in respect 6. Complaint can be made to Banking
of a company is a conclusive proof of Ombudsman only in case of the following:
existence of a company? (a) Where bank did not send any reply for a
(a) Memorandum of Association period of a least 2 months
(b) Articles of Association (b) The issue has looked into by the
(c) Certificate of Incorporation Ombudsman but customer is not satisfied
(d) Certificate of Commencement of Business (c) The complaint relates to loan where bank is
Answer: (c) demanding collateral security of a value higher
than the sanctioned amount
2. In case of a disparity between Articles of (d) Where bank is not complying with the Fair
association and memorandum of association, Practice Code for Lenders' Liability
it is the that prevails Answer: (d)
(a) Articles LRAB Practice MCQs Free e-book
(b) Memorandum 7. The main objects for which a company is
(c) Depends on which is clearer incorporated are mentioned in which
(4) Left to the discretion of the Company documents?
Answer: (b) (a) Memorandum of Association
(b) Articles of Association
3. A person to be treated as resident, should (c) Resolution of Board Directors
be residing in India for......during the (d) Certificate of incorporation
preceding financial year, in addition of Answer: (d)
fulfilment of other conditions
a) More than 182 days 8. A system of a secure key pair consisting of a
b) More than 180 days private key for creating a digital signature and
c) Less than 190 days a public key to certify the digital signature, is
d) 182 days called:
Answer: (a) (a) Digital Signature
(b) Asymmetric crypto system
4. Which of the following group is not (c) Electronic Monitoring
included in term goods, as per sale of Goods (d) E-commerce
act? Answer: (b)
a) Shares and Stocks
b) Grass and Shares 9. If the banking license of a company is
c) Actionable claims cancelled, the appeal can be made to___
d) Stocks and Grass within___from
Answer: (c) Date of order rejecting the license
(a) High Court, 60 days
5. Under Prevention of Money Laundering (b) High Court, 30 days
Act, 2002, banks are required to maintain (c) Central Govt. 30 days
record of (d) Central Govt. 60 days
cash transactions of the value of: Answer: (c)
(a) Rs 1 Lakh and above
b) Rs 10 Lakh and above
c) Rs 5 Lakh and above
d) Rs 50,000 and above
Answer: (b)
JAIIB Practice MCQs Free e-book

10. Regional Rural Banks (RRBs) are: 16. The sale becomes absolute in case of
(a) Cooperative Societies Mortgage by conditional sale when
(b) Companies created under Companies Act (a) When the limitation expires
(c) Body Corporates created under a special (b) Loan is re-structured
statue (c) Borrower fails to make payment of due
(d) Public sector undertakings of the central amount
government (d) Borrower makes the payment of due
Answer: (c) amount
Answer: (c)
11. The Information Technology Act was
introduced on the initiative of which of the 17. Cyber laws in India are contained in which
following: of the following
(a) Reserve Bank of India (a) Cyber Technologies Act 2000
(b) Information Technology Ministry (b) Information Technology Act 2000
(c) UN Commission on International Trade Law (c) Information and Cyber Technology Act 2000
(d) Parliament of India (d) Cyber Law of India
Answer: (c) Answer: (b)

12.Who is primarily liable in a letter of credit? 18. A bank releases document of title to the
(a) Nominating Bank goods to the borrower without payment to
(b) Confirming Bank cover such transactions, the bank obtains:
(c) Issuing Bank (a) Mortgage Deed
(d) Beneficiary (b) Hypothecation letter
Answer: (b) (c) Pledge agreement
(d) Trust Receipt
13.Without Stamp Duty which instrument is Answer: (d)
considered valid?
(a) Promissory Note 19. As per Sales of Goods Act, the Goods
(b) Bills of Exchange means the goods identified and agreed upon,
(c) Agreement at the time of a contract of sale is made:
(d) Cheque (a) Movable
Answer: (d) (b) Immovable
LRAB Practice MCQs Free e-book (c) Future
14. A normal Lok Adalat (other than organized (d) Specific
by DRT) can entertain disputes involving: Answer: (d)
(a) Up to Rs. 20 lacs
(b) Up to Rs. 15 lacs 20. If on recommendation of RBI a
(c) Up to Rs. 10 lacs moratorium is imposed on a bank by the
(d) Up to Rs. 5 lacs government, the total period of such
Answer: (a) moratorium can be extended by government
but not exceeding:
15. Section 43A of Banking Regulation Act (a) 3 months
deals with (b) 6 months
(a) Notification of rules for preservation of (c) 12 months
records (d) 9 months
(b) Rules governing nomination Answer: (b)
(c) Voluntary winding up of a banking company LRAB Practice MC
(d) Preferential payments on liquidation of a
bank Qs Free e-book
Answer: (d)
JAIIB Practice MCQs Free e-book

21. Banks are required to obtain license from 27. Banker’s Lien is:
RBI for commencing operation due to which (a) A special type of mortgage
of the following reasons? (b) An implied pledge
(a) To prevent indiscriminate formation of (c) A hypothecation transaction
banking companies (d) None of the above
(b) To make the provision of Banking Answer: (b)
Regulation Act applicable
(c) To regulate the formation of a banking 28. Payment in due course means:
company (a) In accordance with the apparent tenor of
(d) All of the above the cheque
Answer: (a) (b) In good faith and without negligence
(c) To the person possessing the instrument
22. Cheque is always payable (d) All of the above
(a) After a specified future date Answer: (d)
(b) At the will of the bank
(c) On demand 29. Under SARFAESI Act, the Central Register
(d) If presented after business hours shall register the following types of
Answer: (c) transactions (which is not correct):
(a) Securitization of financial assets
23. The drawee of a cheque is always: (b) Reconstruction of financial assets
(a) Account Holder (c) Creation of security interest
(b) Payee (d) Sale of financial assets
(c) Collecting Banker Answer: (c)
(d) Paying Banker
Answer: (d) 30. The Recovery Certificate in case of DRT is
issued by:
24. Under which section of the Sale of Goods (a) Auctioneer of DRT
Act 1930, exception to the principle of caveat (b) Recovery Officer of DRT
Emptor is given: (c) Advocate appointed by Recovery Officer
(a) Section 12 (d) Presiding Officer of DRT
(b) Section 16 Answer: (d)
(c) Section 18
(d) Section 22 31. Under the Securitization and
Answer: (b) Reconstruction Act, if the borrower does not
make the payment the authorized officer of
25. Banking Ombudsman is appointed by RBI secured creditor can take possession and sell
under which Act: the immovable assets after giving a public
(a) RBI Act notice of:
(b) Banking and Regulation Act (a) 90 days
(c) Central Government Notification (b) 45 days
(d) Both a & b (c) 30 days
Answer: (b) (d) No further notice is required
Answer: (c)
26. A contract that arises out of certain
circumstances and not made by a regular
offer and Acceptance, is known as:
(a) Void Contract
(b) Valid Contract
(c) Quasi Contract
(d) Semi Contract
Answer: (c)
JAIIB Practice MCQs Free e-book

32. Civil Procedure Code provides the 37. An agreement reached by the parties
exemption provision for arrest in execution of either by conciliation or mediation by the
decree for money under Section 56. parties is called under banking Ombudsman
(a) Illiterate Scheme.
(b) Blind (a) Agreement
(c) Women (b) Compromise
(d) Members of Parliament (c) Settlement
Answer: (c) (d) Order
LRAB Practice MCQs Free e-book Answer: d
33. In case of appeal against the award of
Ombudsman Appellate Authority will be: 38. If the due date of the bill falls on a
(a) Appeal can be filled before appropriate holiday, the bill should be retired,
court (a) Next preceding business day
(b) Bank can take the help of IBA and customer (b) On succeeding business day
can move to Court. (c) On succeeding working day
(c) Bank and customer can file the review (d) None of the above
application before governor of RBI. Answer: a
(d) Bank and customer can file the review
application before RBI's Deputy Governor 39. As per FEMA, authorised person means:
Answer: d (a) Authorised dealer
(b) Money changer
34. Debt Recovery Tribunals have been (c) Offshore banking unit
established under: (d) All of the above
(a) Recovery of Debts due to Banks and Answer: a
Financial Institutions Act 1993 LRAB Practice MCQs Free e-book
(b) Recovery of outstanding amount to banks 40.Which act was amended recently to
act 1993 remove the minimum and maximum on CRR
(c) Recovery of dues by public sector banks act holdings?
1993 (a) RBI Act
(d) Recovery of banking dues by special courts (b) Banking Regulation Act
act 1993 (c) Both
Answer: a (d) Neither a or b
Answer: a
35.Which rate is not decided by the Reserve
Bank of India? 41. Copies of balance sheet and profit and
(a) Bank Rate loss account, prepared by banks, are to be
(b) Base Rate submitted to
(c) Repo Rate RBI within months. Banking Companies are
(d) Reverse Repo Rate also to submit three copies to:
Answer: b (a) 2 copies, 2 months, SEBI
(b) 3 copies, 3 months, SEBI
36. Primarily banking business in India is (c) 2 Copies, 3months Registrar of Companies
regulated by? (d) 3 copies, 4 months, Registrar of Companies
(a) Reserve Bank of India Answer: c
(b) Central Government
(c) Registrar of Companies
(d) a and b
Answer: d
JAIIB Practice MCQs Free e-book

42. ABC bank has a display board with the 45. The essential elements of a Sale as per
words "Gold coins available". Can this be sale of goods act 1930 are :
constituted as (a) There should be minimum two parties
an offer? (b) Contract must be Sale of goods as defined
(a) Yes, it is a clear offer (c) Both a & b
(b) No, it is only an intention to offer or an (d) Neither a nor b
invitation to offer Answer: c
(c) Yes, as long as Coins were available only
(d) No, the offer takes place only when the 46. The appeal against award of which of the
customer contacts the manager following is not allowed?
Answer: b (a) DRT
(b) Lok Adalat
43. In the context of the Indian Contract Act (c) High Court
1872(sec 13) when the parties agree to the (d) Consumer Court
same thing in the same sense it is to be Answer: b
treated as
(a) Free consent 49. Section 8 of the Banking Regulation Act
(b) Mutual understanding prohibits a banking company from engaging
(c) Mutual benefit directly or indirectly in
(d) Free will (a) Insurance Business
Answer: a (b) Finance Business
(c) Trading Business
44. A partnership agreement may be oral or (d) None of the above
written, but it must have all the elements of a Answer: c
(a) Association
(b) Contract 50. If a cheque is drawn on AXIS Bank and
(c) Society made payable to “AXIS Bank", then :
(d) Club (a) Drawer and Drawee are same
Answer: b (b) Drawer and Endorsee are same
(c) Drawer and Payee are same
45. Banks are restricted to advance against its (d) Drawee and Payee are same
own shares as per: Answer: d
(a) Banking Regulation Act
(b) RBI Act 51. A bill of exchange is payable after sight, its
(c) Banking Regulation & RBI Act due date shall be calculated with reference
(d) All the above to:
Answer: a (a) Date of presentation
LRAB Practice MCQs Free e-book (b) Date of acceptance
44. In which of the following processes are (c) Date of sight
nonliquidated financial assets converted into (d) Date of bill
marketable securities (Security receipts)? Answer: b
(a) Liquidation of NPAs
(b) Securitization of NPAs 52. Section 49-A of Banking Regulation Act
(c) Reconstruction of NPAs makes provisions for which of the following?
(d) Factoring of NPAs (a) Restrictions on the type of business that
Answer: b the banks cannot undertake
(b) Declaration of Bank rate
(c) No person other than a bank is authorised
to accept deposits withdrawable by cheque
(d) Acceptance of deposits by banks
Answer: c
JAIIB Practice MCQs Free e-book

53. Under RTI Act 2005, the information can 58. The mortgage property is transferred in
be taken in the form of: the name of the bank with the condition that
(a) Diskettes or floppies it will be retransferred on repayment of the
(b) tapes or video cassettes loan, in case of :
(c) Printouts or in any other electronic form (a) English mortgage
(d) All the above (b) Usufructuary mortgage
Answer: d (c) Simple mortgage
(d) Anomalous mortgage
54. An agreement in which a party to the Answer: a
agreement has the option to treat the
agreement illegal is called: 59. Under provisions of SARFAESI Act, where
(a) Void agreement the borrower wants to approach DRT against
(b) Voidable agreement the bank to stop the bank from taking
(c) Illegal agreement d possession of the charged asset it can do so
(d) Quasi legal agreement within:
Answer: a (a) 7 days
(b) 30 days
55. A contract to perform the promise or (c) 45 days
discharge the liability of defaults, is called, a (d) 60 days
contract of Answer: c
(a) Insurance
(b) Guarantee 60. With regard to DRT an appeal to the
(c) Indemnity Appellate Tribunal is to be made
(d) Assurance within…………days of the order of the DRT.
Answer: b (a) 30 Days
(b) 45 Days
56. The definition of money laundering is (c) 60 Days
given in : (d) 90 Days
(a) Prevention of Money laundering Act Answer: b
(b) Narcotic drugs and psychotropic substances
Act 1985 61. A charge on the assets of a company that
(c) Foreign exchange management Act is not attached to specific assets is called:
(d) None of the above (a) Pari- passu charge
Answer: b (b) Floating charge
(c) Fixed charge
57. A 60 days’ notice is to be given to the (d) Exclusive charge
owner of assets under SARFAESI Act before Answer: b
taking over the possession JAIIB LRAB Practice MCQs Free e-book
(a) u/s 13(2) 62. Cash Reserve Ratio is to be maintained by
(b) u/s 17(1) banks with reference to which of the
(c) u/s 10(3) following?
(d) u/s 14(4 a. Time liabilities
Answer: a b. Demand liabilities
c. Gross time and demand liabilities
d. Net demand and time liabilities
Ans – d
JAIIB Practice MCQs Free e-book

63. A letter of credit is defined in? 68. A minor is not competent to contract as
a. Negotiable Instruments Act per the provisions of Contract Ace, yet we still
b. Indian Contract Act allow the minor to open the self-operated
c. Sale of Goods Act deposit account. This is as per
d. None of the above a. RBI directives based on the RBI Act
Ans – d b. RBI directives based on Section 26 of NI Act
c. Provisions contained in Banking Regulation
64. The essential features of a contract Act
include d. There is no liability in case of a deposit
a. Consideration account
b. Free consent Ans – b
c. Capacity to contract for all the parties JAIIB LRAB Practice MCQs Free e-book
involved 69. SARFAESI Act 2002 is not applicable in
d. All of the above which of the following cases?
Ans – d a. Any security interest not exceeding 1 lac
rupees
65. To open an Executor Account, the bank b. Pledge of movable as per Section 172 of
should insist on Contract Act
a. Probate c. Right of unpaid seller under Section 47 of
b. Certificate of Registration Sales of Goods Act
c. Will of the deceased d. All of the above
d. None of the above Ans – d
Ans – a
70. The implied authority of a partner does
66. A partnership firm has three partners A, B, not include
C and a minor D, son of X. The Account a. Receiving payments of debt due to firm and
opening form should be signed by issuing receipt
a. All the partners including the minor b. Opening a bank account on behalf of the
b. All the partners with the minor’s natural firm in his own name
guardian c. Borrowing money on firm’s credit even by
c. Only the partners other than the minor pledging firm’s assets
d. None of the above d. Rendering accounts to the creditors
Ans – c Ans – b

67. Many times, banks do not take revival 71. A hire-purchase contract is a
letters and the debts concerned become time- a. Contract of bailment
barred. Here the underlying contract can say b. Contract of sale
to have become c. Contract of bailment followed by contract of
a. Unenforceable sale
b. Unlawful d. Contract of lease followed by contract of
c. Illegal bailment
d. Bad Ans – c
Ans – a
JAIIB Practice MCQs Free e-book

72. An aunt tells her niece that she will settle 77. A Certified Copy of any entry in a Banker’s
all her property on her if she (the niece) book shall be treated as:
stayed with her till her a. Evidence
death. The niece does so. There is no written b. Secondary evidence
deed. Is this contract valid? c. Prima facie evidence
a. Yes, the offer and acceptance (implied) exist d. No more treated as evidence
b. No, it needs to be written down as there Ans – c
was plenty of time on both sides
c. Though the offer is clear, the niece did not 78. Deferred Payment Guarantee constitutes
express acceptance an undertaking by the issuing bank to ensure
d. Irrespective if anything said or done, the a. Timely payment
property would go to the legal heirs only b. There is no loss
Ans – a c. Timely interest servicing
d. b & c
73. In case a banker refuses payment of a Ans – d
cheque wrongfully, he is liable only to the
drawer and no one else 79. A hire-purchase contract is a
except a. Contract of bailment
a. When bank is being wound up and a holder b. Contract of sale
becomes a creditor c. Contract of bailment followed by contract of
b. When payment has been made disregarding sale
the crossing d. Contract of lease followed by contract of
c. Both of the above bailment
d. Neither of the above Ans – c
Ans – c
80. Which of the following is called Charter of
74. The limitation period for filing a suit of the Company
foreclosure is a. Certificate of Commencement of Business
a. 12 years b. Certificate of Incorporation
b. 3 years c. Articles of Association
c. 30 years d. Memorandum of Association
d. No limitation Ans – d
Ans – c
81. Universal Bank has issued a bank
75. Under the SARFAESI Act, who has the guarantee on behalf of its customer. The bank
power to condone delay in filling the has given this guarantee to cover the security
particulars? deposit which the government department
a. National Company Law has asked for, to cover performance of a
b. RBI contract. The guarantee is a:
c. Appellate Tribunal a. Legal guarantee
d. SEBI b. Financial guarantee
Ans – c c. Performance guarantee
d. Performance-cum-financial guarantee
76. A person employed by and acting under Ans - b
the control of the original agent is called
a. Junior Agent
b. Sub-agent
c. Broker
d. Cannot be employed
Ans - b
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82. With regard to DRT, find the incorrect: 87. The Indian Contract Act 1872, which was
a. The act extends to the whole of India except enacted on 25th April, 1872 came into force
the state of Jammu and Kashmir with effect from:
b. Debts secured by mortgage of immovable a. 1st May 1872
property are not covered under DRT b. 1st September 1872
c. The presiding officer of the tribunal is c. 1st October 1872
appointed by the Government of India d. 1st November 1872
d. The RRB’s can also file suit with DRT for Ans – b
recovery of debt
Ans – b 88. For determining the advance amount, the
valuation of the shares will be done on the
83. In respect of terms and conditions of basis of:
service of its workmen, opening and closing of a. Face value of the share
its branch premises, b. Average price for the last 12 months
a bank is answerable to: c. Market price of the shares
a. Reserve Bank of India d. Average price for the last 12 months or
b. Labour Authorities market price of the shares, whichever is lower
c. Its Head Office Ans – d
d. Its corporate office
Ans – a 89. Disputed related to SARFAESI Act, can be
referred to which of the following?
84. Identify which is an actionable claim: a. Lok Adalat
a. Life policy b. DRT & DRAT
b. Cheque c. District Court & High Court
c. Promissory Note d. Any of the above
d. Bills of Exchange Ans – b
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90. Under the RTI Act 2005, the information
85. Section 134 of the Companies Act 1956 doesn’t include which of the following:
deals with which of the following aspects: a. E-mails
a. Registration of charge by the company b. Press releases
where its assets are charged to a creditor c. Log books
b. Property of charge if an asset is charged d. None of the above
favour of 2 creditors Ans – d
c. Duty of the company to get the charge
registered 91. Within how much period should the
d. Maintenance of register of charge at its negotiating bank scrutinize the documents
principal office tendered to it by the
Ans – c beneficiary?
a. Maximum 7 days
86. A buyer of goods gets additional period b. Minimum 7 days
for payment of documents in a letter of credit c. Maximum banking days 5 days
called: d. Minimum banking days 5 days
a. Demand LC Ans – c
b. Irrevocable LC
c. Red Clause LC
d. Usance LC
Ans – d
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92. Which section of the RBI allows the RBI to 96. Which section of the RBI Act allows the
provide loans to banks and state financial RBI to form rules regarding thr exchange of
corporations? damaged and
a. 17 imperfect notes?
b. 18 a. 17
c. 19 b. 21
d. 20 c. 28
Ans – a d. 42(1)
Ans – c
93. Official language is governed under which JAIIB LRAB Practice MCQs Free e-book
Act? 97. During the dissolution of a firm, if
a. The National Languages Act, 1963 goodwill appears in the balance sheet, it is
b. Central Languages Act, 1963 transferred to
c. The Official Languages Act, 1963 a. Realisation a/c
d. Central Government Directives b. Appropriation a/c
Ans – c c. Cash a/c
d. Firm a/c
94. If a borrower has been outside India for Ans – a
some time, for the purpose of calculation of
limitation, that 98. Who are competent to contract
period: a. Every person is competent to contract who
a. Shall be included is of age of majority according to the law to
b. Shall be included if the bank could not prove which he is subject, and who is of sound mind
his absence and is not disqualified from contracting by any
c. Shall be excluded law to which he is subject.
d. Shall be excluded if the bank could prove his b. Every person is competent to contract who
absence is of any age and who is of sound mind and is
Ans – c not disqualified from contracting by any law to
which he is subject.
95. In a bill of exchange c. Every person is competent of contracting
(a) holder is the person who is entitled to the who is the age of majority according to the law
possession of the bill to which he is subject.
(b) holder in due course is the person who is d. Every person is competent to contract who
in possession of the instrument for a valuable is of the age of majority according to the law to
consideration which he is subject and who is of sound mind
(c) holder for value, is the bank when a bill is Ans – a
purchased or discounted
a. a to c all correct 99. The delivery of goods by one person to
b. a and b only are correct another for some purpose upon a contract
c. b and c only are correct that they shall when
d. a and c only are correct the purpose is accomplished be returned or
Ans – a otherwise dispose of upon discretion of the
delivering person
the contract is called
a. Indemnity
b. Bailment
c. Contingent contract
d. None of the above
Ans – b
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100. X, Y and Z are partners sharing profits in

the ratio of 2:2:1. Z retired. The new profit- 106. Which of the following reasons
sharing ratio between X and Y will be, prompted for set up of Debt Recovery
a. 2:1 Tribunal?
b. 1:1 a. Under delay in setting the claims by courts.
c. 3:1 b. Delay in extension the decree.
d. 1:3 c. Non-availability of Assets with the borrower
Ans - b due to inordinate delay in courts.
d. All the above.
101. Promissory note can be ...... Ans – d
(i) Demand PN,
(ii) Usance PN 107. In case of pledge, the possession and
a. Only (i) ownership of the goods remains with......
b. Only (ii) a. possession with bank and ownership with
c. Either (i) or (ii) borrower
d. Neither (i) nor (ii) b. possession with the borrower and
Ans - c ownership with the bank
c. possession and ownership with borrower
102. Attachment order is issued by ...... d. possession and ownership with the bank
a. Drawer of a cheque Ans - a
b. Revenue authority
c. Manager of bank 108. If the acknowledgement of debt by the
d. None of these borrower is for part amount only......
Ans - b a. the limitation is extended for the entire loan
b. the limitation is extended for that portion of
103. .......... is one of the modes of lending by the loan
a banker. c. the limitation is not extended for the loan
a. Documentary Bills d. such method of extension of limitation is
b. Bill of purchase unlawful
c. Supply Bills Ans - a
d. Bill finance
Ans – d 109. The category not ordinarily residents is
not relevant for which of the following types
104. In a contract of indemnity, there are of assessee as per Income Tax Act......
parties...... a. individuals
a. one party, the indemnifier b. Hindu Undivided family
b. two parties, the insurer and the insured c. company
c. two parties, the indemnifier and the d. none of the above
indemnity holder Ans - c
d. two parties, the guarantor and the
beneficiary 110. A collecting bank gets protection for
Ans - c collecting a demand draft subject to certain
conditions, u/s of ......
105. Under which of the following, a a. 131, NI Act
protection is not available to the paying b. 31, NI Act
bank? c. 31, RBI Act
a. Section 10 of NI Act d. 131A, NI Act
b. Section 85 of NI Act Ans - d
c. Section 89 of NI Act
d. Section 131 of NI Act
Ans - d
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111. The objective of enactment of Consumer 116. The bank is required to comply with the
Protection Act 1986 is...... execution of the award of banking
a. to help bank customer to file suit in a ombudsman within ......
consumer court a. 7 days
b. better protection of the interests of the b. 15 days
consumers c. 30 days
c. quick remedy to the consumer though
d. 60 days
normal courts
Ans - c
d. all the above
Ans - b
117. What is the maximum time for
112. Previous year means the year, settlement of a claim before passing an award
immediately preceding the ...... year, of an by the banking ombudsman?
assessee ...... a. within 15 days from the date of receipt of
a. financial year, calendar year complaint
b. calendar year, assessment year b. within 1 month from the date of receipt of
c. financial year, assessment year complaint
d. assessment year, financial year c. within 2 months from the date of receipt
Ans – c complaint
d. within 3 months from he date of receipt of
113. What is the time limit for disposing an
complaint
appeal by Appellate Authority ?
Ans - b
a. Within 2 months.
b. Within 3 months.
c. Within 6 months. 118. Banking ombudsman scheme does not
d. No such limit. cover......
Ans - c a. Scheduled commercial banks
b. Regional rural banks
114. How many Debt Recovery Appellate c. Co-operative banks
Tribunals have been set up? d. Financial Institutions
a. 2 Ans – d
b. 5
c. 7 119. Can the order of Central Government
d. 10
appointing Presiding Officer of the Tribunal
Ans - b
be challenged in any Court?
115. Where an appeal against the order of a. Yes, before the Appellate Tribunal.
Appellate Tribunal can be made? b. No.
a. No where. c. No, unless the High Court permits for it
b. High Court. d. Yes, under Constitution Article 226 before
c. Supreme Court. the High Court.
d. Concerned District Court. Ans - b
Ans – b
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120. Which among the following are classified 123. A company is under winding up process.
as Capital Account Forex Transactions? Whether High Court permission is required to
(i) investment in foreign securities, a Bank to proceed against it before DRT?
(ii) raising foreign currency loans in India and a. No, as the DRT Act being a special Law
abroad, having overriding effect over other laws.
(iii) payments due in connection with foreign b. Yes, as Companies Act specially provides to
trade, short-term banking and credit facilities that effect.
in the ordinary course of business c. Depends on the stage of winding up process.
a. Only (i) and (ii) d. No permission but concurrence of High
b. Only (i) and (iii) Court required.
c. Only (ii) and (iii) Ans - a
d. (i), (ii) and (iii)
Ans - a 124. According to section 3 of Evidence Act,
the Document can be defined:
121. When a civil suit filed in Civil Court is a. Any matter expressed or described upon any
transferred to DRT, if fresh court fee is substance by means of letter, figure or marks.
required to be paid? b. Or by any other means.
a. No c. It intends to be used for purpose of
b. Yes, as the authorities are different. recording that matter.
c. No, if there is no counterclaim. d. All the above.
d. Yes, as the court fee stamps are different. Ans - d
Ans - a
125. The term corresponding new bank under
122. While filling appeal before the appellate banking co. (acquisition & transfer of
tribunal if any amount is required to be undertaking) act 1970 stands for ...
depositted? a. New private banks
a. No, amount is required to be deposited till b. Old private banks
the appellate tribunal decides. c. RRBs
b. Yes, Court fee on the appeal amount is d. Nationalised banks
required to be paid. Ans - d
c. Yes, 75 per cent of the amount determined
by the tribunal is required to be deposited at 126. Which was the first committee
the timing of filling of the appeal. recommended for establishment of special
d. Yes, after admission of the appeal 75 per Recovery tribunals for Books and Financial
cent of the amount determined by the tribunal Institution?
is required to be deposited. a. Tiwari committee.
Ans - c b. Ojha Committee.
c. Narasimham Committee.
d. Rangrajan Committee.
Ans - a

127. The main outcome of the FSLC's work

was a draft ......
a. Indian Financial Standards
b. Indian Financial Code
c. Indian Economic Code
d. Indian Economic Standards
Ans - b
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128. The rate of CRR is fixed from time to time 133. Central govt. can give direction to RBI
by: only after consulting:
a. RBI a. Governor RBI
b. IBA b. Central Board of RBI
c. Ministry of Finance c. Finance Commission
d. RBI in consultation with Ministry of Finance d. President of India
Ans - a Ans - a

129. For the purpose of exposure norms, what 134. The Companies Act applies to the
is the meaning of 'Group'? banking companies:
a. Majority of the directors should be common a. irrespective whether the provisions of the
b. The Managing Director should be same Banking Regulation Act
c. Commonality of Management and effective b. insofar as the provisions are consistent with
control the provisions of Banking Regulation Act
d. All of these c. in relation to their registration and winding
Ans – c up
d. all the above
130. The company related issues of the Ans - c
banking companies are regulated by which of
the following: 135. The Banking Regulation Act applies to
a. authorities under Companies Act cooperative banks:
b. Reserve Bank of India a. as provided in the State cooperative Act
c. Central Govt. b. as provided in the Central cooperative Act
d. Securities and Exchange Board of India c. as provided in the modification of Section 56
Ans - a d. as applicable to other commercial banks
Ans - c
131. Banks are undertaking trading in shares
and securities and this activity is regulated by: 136. In public sector banks, the shareholding
a. authorities under Companies Act of the Central govt. is :
b. Reserve Bank of India a. not less than 50%
c. Central Govt. b. 51% or more
d. Securities and Exchange Board of India c. more than 50%
Ans - d d. less than 50%
Ans - a
132. The term corresponding new banks is
used in relation to which of the following: 137. Which of the following is correct
a. State group banks statement in the context of lease?
b. nationalized banks a. the price is called rent
c. foreign banks b. the money paid for lease is called premium
d. new private banks c. the transferee is called the lessee
Ans - b d. all the above
Ans - c
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138. Bank companies can promote a 143. Which of the following statements, is
subsidiary for the business activities correct regarding valuation of immovable
mentioned: secured asset?
a. in the Resolution passed by their Board of a. Authorized officer will obtain estimated
Directors value from the approved valuer.
b. in their Articles of Association b. The borrower need not involved in the
c. Section 6 (1) of Banking Regulation Act valuation process.
d. Section 22 of Banking Regulation Act when c. Valuation by approved valuer and fixing of
issued license by RBI. reserve price is mandatory in case of
Ans - c immovable Assets.
d. All the above.
139. A banking company requires ____ from Ans - d
____ to undertake banking business as per
provision of Section ___ of Banking 144. Drawee of a Cheque is ......
Regulation Act: (i) An A/c holder,
a. registration, RBI, 23 (ii) Always a banker
b. license, RBI, 22 a. Only (i)
c. registration, Registrar of Companies, 24 b. Only (ii)
d. certificate of commencement of business, c. Either (i) or (ii)
Registrar of Companies, 24 d. Neither (i) nor (ii)
Ans - b Ans - b

140. If a bank has to shift its branch in ____ 145. What are the provisions of depositing
(area), it requires RBI permission u/s 23 of 75% amount by the borrower while
Banking Regulation Act: submitting appeal?
a. same district a. No appeal will be entertained unless 75% of
b. same city the amount is not deposited.
c. same town b. DRT an waive or reduce the amount
d. same village required to be deposited.
Ans - a c. The amount will include installments which
were not due.
141. Under Section 11 of Banking Regulation d. All the above.
Act, the foreign banks have to deposit ___ Ans – d
arising out of their business in India with, RBI:
a. 10% of their deposits 146. The essential features of pay through
b. 20% of their deposits certificates are:
c. 20% of their profit for each year a. It involves specific sale of asset cash flow to
d. 20% of their net demand and time liabilities SPV.
Ans - c b. The SPV issues pay through certificates to
the investors.
142. The shareholder of a banking company c. The cash is collected by the SPV from the
can exercise maximum ___ % of the total borrower and then distributed
voting rights of all shareholders: d. the cash is colleted by the SPV from the
a. 2% borrow and then distributed to certificate
b. 5% holders.
c. 10% Ans – d
d. no such limit.
Ans - c
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147. Can a customer from whose account 151. Once the dispute before the Banking
fraudulently someone has withdrawn money Ombudsman is referred to arbitration can
make complaint before the Banking new claim or counterclaim be made?
Ombudsman? a. No, as the reference on the issues has
a. No, as the offence committed is of criminal already been made.
nature FIR with police has to be filed. b. Yes, provided the claim and counterclaim
b. Yes, but if the police authorities who have are within the terms of reference.
received FIR permit filing of complaint with c. Yes, provided additional stamp duty is paid
Ombudsman. thereon.
c. Yes, as this aspect comes under the powers d. No, because arbitration is by mutual consent
of Banking Ombudsman. so stage of claim and counter claim does not
d. No, as the loss caused to the customer is of arise.
a civil nature for recovery, civil suit is required Ans - b
to be filed.
Ans - c 152. Section 5(b) of ...... Act gives the
definition of the term ‘Banking’
148. The securitization Company can acquire a. Contract Act
financial assets from Banks in the following b. Negotiable Instruments Act
manner: c. Banking Regulation Act
a. by issuing Debenture or Bonds. d. Transfer of Property Act
b. By entering into an arrangement with the Ans - c
Bank/Financial Institution.
c. (a) or (b) 153. Principal functions of the Bank are:
d. (a) and (b) a. Dispatch of statements
Ans - c b. Adjustment of Interoffice Transactions
c. Clearing
149. What is the role of qualified Institution d. Acceptance of deposits for Lending and
Buyers in the securitization process? investment
a. The qualified investors would invest in the Ans - d
Financial Asset Scheme.
b. The securitized company issues Security 154. In case of safe custody of articles relation
Receipts to qualified investors. between Bank and Customer is Bank ...... and
c. The security receipt represents undivided Customer ......
interest in the Financial Asset. a. Agent, Principal
d. The securitized company will realize b. Lessor, Lessee
Financial Assets and redeem the investment. c. Bailor, Bailee
Ans - a d. Debtor, Creditor
Ans - c
150. Letter of Credit where in addition to
advance payment, the beneficiary is entitled 155. Line is a/an ...... of the creditor to retain
to payment of storage charges is called possession.
a. LC a. Obligation
b. Red clause credit b. Right
c. Yellow clause credit c. Interest
d. Green clause credit d. Protection
Ans - d Ans – b
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156. Which one among the following 160. Which section of IT Act deals with the
formulates the fiscal policy in India ? appointment of Controller of certifying
a. Planning Commission authorities?
b. Finance Commission a. Section 17
c. The Reserve Bank of India b. Section 15
d. Ministry of Finance c. Section 10
Ans - d d. Section 5
Ans - a
157. The aggregate exposure of a bank to the
capital markets in all forms (both fund based 161. At the time of a new partner good will
and non-fund based) on solo basis as well as ......
consolidated basis should not exceed % of its a. Belongs to all partners, new and old
net worth as on March 31 of the previous b. Belongs only to the new partners who is
year and the bank's direct investment in going to be admitted.
shares, convertible bonds / debentures, units c. Belongs only to the old partner who have
of equity-oriented mutual funds and all credited it
exposures to Venture Capital Funds (VCFs) d. None of the above.
should not exceed % of its net worth. Ans - c
a. 20%; 40%
b. 15%; 40% 162. What is the punishment for identity theft
c. 40%; 20% in IT Act?
d. 50%; 20% a. Three-year imprisonment or 2 lakh rupees
Ans - c penalty or both
b. Two-year imprisonment or 1 lakh rupees
158. As per Banking Regulation Act, banks will penalty or both
be required to maintain minimum SLR of ...... c. Three-year imprisonment or 1 lakh rupees
% of NDTL penalty or both
a. 25% d. None of the above
b. 20% Ans - c
c. 15%
d. None of these as it is fixed by RBI 163. Mortgage is defined under ......
Ans - d a. contract act
b. sale of goods act
159. Which doctrine has been involved in the c. transfer of property act
provision regarding condition precedent? d. none of the above
a. Doctrine of Acceleration Ans - c
b. Doctrine of Cy-pres
c. Rule against Perpetuity 164. In contract of guarantee the person who
d. Rule of Perpetuity gives guarantee is called ......
Ans - b (i) Surety,
(ii) Principal debtor
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)
Ans - a
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165. When a secured creditor takes over the 170. What is the maximum amount of fee
management of business of a borrower, he payable for filing a Recovery case with the
may appoint ...... Debt Recovery Tribunal?
a. As many persons as it thinks fit to be the a. Rs. 1 lac.
directors/administrators of the business of b. Rs. 1,20,000
that borrower, as the case may be c. Rs. 1,50,000
b. As many persons as it thinks fit to be the d. 12% of the Debt amount.
registered valuers of the business of that Ans - c
borrower
c. The auditors of the business of that 171. How much is the fee payable if a suit is
borrower transferred to Debts Recovery Tribunal from a
d. The liquidator who shall take over the court?
liquidation proceedings a. Rs. 1,00,000.
Ans - a b. Rs. 1,50,000.
c. 80% of the debt amount.
166. One of your customers lost the Fixed d. No such fee is payable.
Deposit Receipt issue by the bank. To obtain a Ans - d
duplicate FD he needs to furnish ......
a. A Promissory note 172. In how many days the DRT should
b. A Guarantee summons to the defendant to show cause?
c. A Letter of Credit a. Within 7 days.
d. An Indemnity bond b. Within 10 days.
Ans – d c. Within 30 days.
d. Within 60 days.
167. Which of the following High Courts Ans – c
rejected implementation of DRT act, 1993 in
its State in 1995? 173. The maxim applied in respect of Direct
a. Delhi High Court. Quotation is ......
b. Allahabad High Court. a. buy low, sell low
c. Japan High Court. b. buy low, sell high
d. Mumbai High Court. c. buy high, sell low
Ans - a d. buy high, sell high
Ans - b
168. The Presiding officer of DRT is appointed
by : 174. What is the time limit for DRT to
a. Reserve Bank of India. complete the process?
b. Supreme Court. a. Within 6 months.
c. Central Government b. Within 9 months.
d. High Court. c. Within 12 months.
Ans – c d. No such limit.
Ans - a
169. What is the fee payable for the Debt
amount above Rs. 10 lac? 175. What is the tenure of Presiding officer?
a. Rs. 1000 for every Rs. 1 lac and part thereof. a. 1 year.
b. Rs. 1200 for every Rs. 1 lac and part thereof. b. 3 years.
c. Rs. 1500 for every Rs. 1 lac and part thereof. c. 5 years.
d. Rs. 2000 for every Rs. 1 lac and part thereof. d. No such limit.
Ans - a Ans – b
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176. ...... in relation to a cooperative society, 181. The essential features of securitization
for the puposes of BR Act, includes a member are:
of any committee or body for the time being a. Acquisition of Financial Assets by a
vested with the management of the affairs of Securitisation or Reconstruction Company.
that society . b. The Assets may be NPA or standard.
a. Director c. On sale the Assets goes out of the Books of
b. Member the originator.
c. Manager d. All the above.
d. None of the above Ans - d
Ans - a
182. What are the main functions of Assets
177. A bank has lent Rs.8 lakhs to a pvt.ltd.co. Reconstruction Company?
to purchase a pick up van. Therefore the a. Setting up of a company.
bank's charge b. Acquiring Assets for Reconstruction.
a. has to be registered with RTO/ROC c. Acquire Assets for Asset Reconstruction.
b. need not be registered with ROC d. All the above.
c. registration is optional Ans - d
d. none of above
Ans - a 183. Which of the following is correct?
a. The borrower can file an appeal with the
178. ...... goods are to be manufactured / DRT only after the secured creditor takes
produced /acquired by the seller after making possession of Asset.
of the contract of sale. b. Borrower can not file an appeal in the Civil
a. Future Court.
b. Specific c. Writ petition can be filed in the High Court at
c. Moveable any time.
d. Immoveable d. All the above.
Ans - a Ans - d

179. What are the main features of SARFAESI 184. Possession is with the mortgagee in ......
Act, 2002? (i) Conditional Mortgage,
a. To put a legal system for securitization. (ii) Usufructuary Mortgage,
b. Empowering banks and financial institutions (iii) English Mortgage
to take possession of the mortgaged securities. a. Only (i) and (ii)
c. To sell the securities without intervention of b. Only (i) and (iii)
court. c. Only (ii) and (iii)
d. All the above. d. (i), (ii) and (iii)
Ans - d Ans - c

180. What are the main issues with which 185. The important features of Enforcement
SARFAESI Act, 2002 deals with? of Securities are:
a. securitization of Assets. a. take possession of the Secured Assets.
b. Setting up of an Assets Reconstruction b. Take over management of Secured Assets.
Company. c. To acquire pending recovery cases from DRT.
c. Enforcement of securities. d. Act as an Agent for Recover.
d. All the above. Ans - d
Ans - d
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186. Which of the following is not a function 191. Legislation gives which body the power
of Asset Reconstruction Company? to specify a code of conduct for surveyors and
a. To acquire pending recovery cases from loss assessors?
DRT. a. Institute of Insurance and Risk Management
b. Act as an Agent for Recover. b. Insurance Regulatory and Development
c. Act as Manager. Authority
d. Act as Receiver of Court/Tribunal. c. Life Insurance Council
Ans - a d. Securities and Exchange Board of India
Ans - b
187. The important features of Enforcement
of Securities are: 192. Which of the following is true about the
a. take possession of the Secured Assets. functions performed by RBI?
b. Take over management of Secured Assets. (i) It is the Bank of Issue,
c. Recover dues from the debtors of the (ii) It acts
borrower as banker to the Government,
d. All the above. (iii) It regulates the flow of credit
Ans - d a. Only (i) and (ii)
b. Only (i) and (iii)
188. In which of the following Acts, the c. Only (ii) and (iii)
provisions of Mortgage of an Asset are dealt d. (i), (ii) and (iii)
with? Ans - d
a. Transfer of Property Act.
b. Sale of Goods Act. 193. Value of good will agreed upon Rs. 30000
c. Negotiable Instrument Act. on C,S admission and allowing him 1⁄4 share
d. Indian Company Law. of total profit Good will is brought in cash, the
Ans - a amount of good-will be as ......
a. Rs. 30000
189. The delivery of goods by one person to b. Rs. 7500
another for some purpose upon a contract c. Rs. 150000
that they shall when the purpose is d. Rs. 120000
accomplished be returned or otherwise Ans - b
dispose of upon discretion of the delivering
person the contract is called ...... 194. Which section of IT Act deals with
a. Indemnity Hacking of computer systems and its
b. Bailment penalties?
c. Contingent Contract a. Section 65
d. None of above b. Section 66
Ans - b c. Section 62
d. Section 67
190. Which of the following are qualitative Ans - b
control methods?
a. Margins
b. Maximum limit of credit for specific purpose
c. Differential rate on certain types of
advancement
d. All of the above
Ans - d
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195. “Men may come and men may go but 200. When RBI is the lender of last resort
the company exist”- this explains which what does it mean?
characteristics of the company as per a. RBI advances necessary credit against
companies Act 1956? eligible securities
a. Separate legal entity b. Commercial banks give funds to RBI
b. Perpetual Succession c. RBI advances money to public whenever
c. Capacity to sue there is an emergency
d. None of the above d. All of the above
Ans - b Ans - a

196. Actual possession of property by another 201. Which of the following is true about the
must put of such property on his guard, than restrictions on RBI?
its amount to notice for ...... (i) It is not to compete with the commercial
a. Purchaser banks
b. Municipality (ii) It is not allowed to pay interest on its
c. Seller deposits
d. Registration office (iii) It cannot engage directly or indirectly in
Ans - a trade
(iv) It cannot acquire or advice loans against
197. Mr. X issues a stop payment instruction immovable property
to his banker to Stop payment of a cheque for (v) It is prohibited from purchasing its own
Rs,20,000.00. This is ...... shares or the shares of any other bank or any
a. A request from Hari company or granting loans on such security
b. An intimation from Hari a. only (i),(ii),(iii), and (iv)
c. An advice from Hari b. only (v)
d. A mandate from Hari c. all the above
Ans - d d. none of the above
Ans - c
198. A negotiable instrument is endorsed as
Pay to Shalini only. This is called as ...... 202. A proposes by letter to sell a house to B
a. Blank endorsement The Communication of the proposal is
b. Restrictive endorsement complete ......
c. Sans recourse endorsement a. When A make such proposal
d. Endorsement in Full b. When B accepts the proposal
Ans - b c. Both a. and (b)
d. None of above
199. In a demand draft the word “order” is Ans - b
changed to “bearer” by the holder of the DD.
It is called as ...... 203. For the firm interest on drawing is ......
a. Endorsement a. Expense
b. Material alteration b. Income
c. Crossing c. Liability
d. None of the above d. None
Ans - b Ans - b
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204. Where an unpaid seller has made part 208. Mr. X a transporter has been granted a
delivery of the goods he may exercise his right loan for purchase of a truck. You will create
...... which of the following charge ......
a. Return on the remainder a. Assignment
b. Of lien on the remainder b. a mortgage
c. Sale to any other person c. pledge
d. None of above d. hypothecation
Ans - b Ans - d

205. Within how many days shall the Central 209. For which of the following assets the
Registrar be intimated regarding satisfaction charge hypothecation is not created ......
of security interest? a. land
a. 30 days from the date of such payment or b. machine
satisfaction c. stock
b. 60 days from the date of such payment or d. vehicle
satisfaction Ans - a
c. 120 days from the date of such payment or
satisfaction 210. For the purpose of exposure norms, what
d. 90 days from the date of such payment or is the meaning of capital fund?
satisfaction a. paid up capital and reserves
Ans - a b. Tier I capital
c. Tier I & Tier II capital
206. Which court shall try any offence d. None of these
punishable under this Act? Ans - c
a. No Court inferior to that of Metropolitan
Magistrate or a Judicial Magistrate of Second 211. Consider the following statements
Class i. American depositary receipts are securities
b. No Court inferior to that of High Court of a non-US company that trade in the US
c. No Court inferior to that of Metropolitan financial markets.
Magistrate or a Judicial Magistrate of First ii. ADR is a negotiable security which
Class represents securities of companies that is
d. No Court inferior to that of Principal Junior foreign to the market which the DR trades.
Civil Judge or a Judicial Magistrate of First Class
Ans - c 212. Which of the statements given above
is/are correct?
207. The mortgager transfers the mortgaged a. Only 1
property to the mortgagee on the condition b. Only 2
that it will be retransferred upon payment of c. Both 1 and 2
mortgaged money. This is ...... d. Neither 1 nor 2
a. Simple mortgage Ans - c
b. English mortgage
c. equitable mortgage
d. mortgage by conditional sale
Ans - b
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213. Good will of the firm is valued Rs. 30000. 218. Which of the following does not fall
C an incoming partner purchase 1⁄4 share of under financial asset?
total profit Good will be raised in the books. a. A mortgage, charge, hypothecation or
a. Rs. 30000 pledge of movable property
b. Rs. 7500 b. Any right or interest in the security, whether
c. Rs. 120000 full or part underlying such debt or receivables
d. Rs. 7000 c. Any financial assistance
Ans – a d. Prepaid expenses undertaken with respect
to a movable or immovable property
214. Which of the following is not a clause of Ans - d
memorandum of association?
a. situation 219. Appellate Authority is vested with ......
b. capital a. Deputy Governor of RBI
c. subscription b. Head Governor of RBI
d. directors c. Finance Ministry
Ans - d d. None of The Above
Ans - a
215. Section 5, of the Contract Act, deals with
...... 220. Loan against LIC policies are given based
a. Communication of contract on ......
b. Acceptance of contracts a. surrender value
c. Revocation of proposals and acceptances b. paid up value
d. None of above c. Insured value
Ans - c d. market value
Ans - a
216. If a person contravenes or abates
contravention of any provision of this Act or 221. Which of the following is not considered
rules, he shall be punishable ...... material alternation?
a. With imprisonment for a term which may a. changing the date
extend to three years or with fine or both b. changing the amount
b. With imprisonment for a term which may c. changing the relation of the parties
extend to two years or with fine or both d. none of them
c. With imprisonment for a term which may Ans - d
extend to one year or with fine of minimum Rs.
10,000 or both 222. In case of joint financing under this Act, a
d. With imprisonment for a term which may creditor can ......
extend to one year or with fine or both a. Take any action independently
Ans - d b. Take action only when it is agreed upon by
creditors holding 60% of the amount
217. The contract of guarantee is a contract in outstanding on record date
which a person perform the promise or c. Take action only when it is agreed upon by
discharge the liability of ...... creditors holding 50% of the debt outstanding
a. The contractor as on that date
b. Stranger d. Take action with the permission of all the
c. Third person other creditors involved
d. None of above Ans - b
Ans - c
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223. Commercial mortgages, farm mortgages 228. Which is the appeal court on the orders
and home mortgages are categories of ...... issued by Cyber appellate tribunal?
a. swapped mortgages a. Supreme Court
b. sovereign mortgages b. District Court
c. secondary mortgages c. High Court
d. primary mortgagees d. Munsiff Court
Ans - d Ans - c

224. In the case of a joint stock co the 229. Which of the following is not a ground
registration of a charge is not required with for cancellation of certificate of registration
registrar of companies for ...... granted to an asset reconstruction company
a. Pledge of moveable property by Reserve Bank of India?
b. hypothecation of moveable property a. When the ARC fails to comply with any
c. assignment of book debts direction issued by RBI
d. mortgage of fixed assets b. When the ARC ceases to receive or hold any
Ans - a investment from a qualified buyer
c. When the ARC fails to maintain accounts in
225. A usance bill is presented for acceptance accordance with the requirements of any law
to the drawee. He has to accept in ...... d. When the ARC has incurred loss for a year
a. within 24 hrs Ans - d
b. within 48 hrs
c. within 72 hrs 230. An application under Section 5A of the
d. no time limit SARFAESI Act for transfer of applications
Ans - b pending before two or more Debt Recovery
Tribunals may be filed by an Asset
226. When did the National Housing Bank Reconstruction Company before?
start its operations? a. High Court
a. July, 1982 b. National Company Law Appellate Tribunal
b. July, 1988 c. Special Court
c. April, 1980 d. Debt Recovery Appellate Tribunal
d. March, 1971 Ans - d
Ans - b
231. At the time of admission of a new
227. Which of the following are quantitative partner, general reserve is: ......
control methods? a. Debited to capital of old partners
(i) Bank rate & CRR, b. Credited to capital of old partners
(ii) Statutory Liquidity ratio, c. Allowed to remain is balance sheet
(iii) Open market operations d. Debited to current account
a. Only (i) and (ii) Ans - b
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
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232. The liability of the guarantee is co- 236. A negotiable instrument is discharged by
extensive with that of the principal debtor ......
means...... a. payment in due course by or on behalf of
a. if the borrower is liable the guarantor the party primarily liable
continues to be liable b. payment in due course by the party
b. if borrower defaults, the payment shall be accommodated
made by the guarantor c. intentional cancellation thereof by the
c. the guarantor remains liable even when the holder
limitation against the principal debtor expires. d. none of them
d. all the above Ans - d
Ans - d
237. If any loss suffered by the complainant,
233. Which of the following can be appointed then complainant will get ......
as Ombudsman and for how much time? a. Rs. 5,00,000 for any huge loss
a. General Manager of RBI only for 5 years at a b. Rs. 10,00,000 for any huge loss
time. c. amount arising directly out of the act or
b. General Manager or Chief General Manager omission of the bank or Rs. 10,00,000,
of RBI for 3 years at a time. whichever is lower
c. Chief General Manager of RBI only for 3 d. None of The Above
years at a time. Ans - c
d. Any other suitable person as per criteria
fixed by RBI, for 3 years at a time. 238. Bank rate means ......
Ans - b a. Rate at which commercial banks lend money
b. Rate at which RBI lends to commercial bank
234. In pledge, the bailee is called ...... c. Rate of interest paid by banks to its
a. pledger depositors
b. pledgee d. None of the above
c. pawnor Ans – b
d. pawnee
Ans - d 239. As per Sale of Goods Act, when the
transaction becomes a sale......
235. The Distt. Forum under Consumer a. only when the goods are delivered to the
Protection Act consists of which of the buyer by the seller
following...... b. only when the property in goods is
a. Person qualified to be a Distt. Judge to be transferred from seller to buyer with
president and three other members one of possession
whom to be a woman. c. when the property in goods is transferred
b. Person qualified to be a Distt. Judge to be from seller to buyer with or without
president and 2 other members one of whom possession
to be a woman. d. all the above
c. Person qualified to be a Distt. Judge to be Ans - c
president and one other member
d. Person qualified to be a Distt. Judge to be
president and one other member who should
be a woman
Ans - b
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240. RRBs also to maintain same CRR as 244. If a return of loss is not filed on time......
applicable for SCBs w.e.f. ...... a. it can be filed any time to carry forward loss
a. 12.01.2002 to set off in future years
b. 01.12.2002 b. it cannot be filed subsequently
c. 12.01.2005 c. it can be filed subsequently but the carry
d. 01.12.2005 forward loss will not be allowed to be set off in
Ans - a future years
d. none of the above
241. Every banking company shall, within 30 Ans - c
days after the close of each calendar year,
submit a return to the Reserve Bank as at the 245. The agencies appointed under Consumer
end of such calendar year of all accounts in Protection Act are......
India which have not been operated upon for a. completely judicial in nature
...... years b. not judicial in nature
a. 2 c. quasi judicial in nature
b. 5 d. none of the above
c. 10 Ans - c
d. 20
Ans - c 246. The Chairman and Managing Director of
a banking company so appointed by the
242. As per Banking Regulation Act, what can Reserve Bank where the office of the
be the maximum rate of SLR? Chairman or the Managing Director is vacant,
a. 15 percent shall be in the whole-time employment of
b. 20 percent the banking company and shall hold office for
c. 30 percent such period not exceeding ......
d. 40 percent a. 3 years
Ans - d b. 5 years
c. 7 years
243. Winding up of a coop bank may be d. 9 years
sought by RBI in which of the following Ans - a
situations?
(i) bank has not been fulfilling the 247. Which of the following statement does
requirement of minimum paid up capital and not match?
reserves, a. RRBs are not required to maintain CRR -
(ii) bank is not entitled to carry on banking false
business in India u/s 22 of Banking Regulation b. State Bank associate banks are not to
Act, maintain SLR - false
(iii) bank has been prohibited by RBI u/s c. SBI can make regulations for carrying out the
35 (4) of B R Act, to accept further deposits. purposes of SBI Act in consultation with RBI
a. Only (i) and (ii) and with prior approval of Central Govt. - True
b. Only (i) and (iii) d. Central govt. cannot give directions to SBI in
c. Only (ii) and (iii) the matter of policy relating to public interest -
d. (i), (ii) and (iii) True
Ans - d Ans - d
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248. Out of the total number of Directors of a 251. X appointed Y his agent and authorized Y
banking company, not less than 2 shall be that he can get cheques in X name collected
persons having special knowledge or practical through account of Y. Later on, Y
experience in respect of ...... misappropriated the number of certain
(i) agriculture and rural economy, cheques......
(ii) co-operation, a. the bank was negligent in accepting such
(iii) small-scale industry instruction. Hence bank is liable
a. Only (i) and (ii) b. the bank did not take adequate precaution
b. Only (i) and (iii) due to which bank is liable
c. Only (ii) and (iii) c. bank is not liable, as there was express
d. (i), (ii) and (iii) authority from the customer
Ans - d d. despite express authority from customer,
the bank is liable for conversion
249. The money of a company has been spent Ans - c
by the directors on acquiring a property but
ultra-vires...... 252. The law relating to indemnities is laid
a. the company cannot be owner of such down as per ......
property a. Section 131 and 133 of Negotiable
b. the directors are liable for that and they will Instrument Act
be owners of that property b. Section 121 and 122 of Indian Evidence Act
c. the company can be lawful owner, although c. Section 124 and 125 of Indian Contract Act
it has been wrongly acquired. d. Section 126 and 127 of Indian Contract Act
d. the property has to be disposed off Ans - c
immediately and company money restored.
Ans - c 253. In a contract of indemnity, the liability
of......
250. If a bank collects a cheque for a a. indemnifier is primary
customer, which actually does not belong to b. indemnifier is secondary
him, it is called ...... c. indemnity holder is primary
a. material alteration d. indemnity holder is secondary
b. forgery Ans - a
c. fraud
d. conversion 254. Which of the following bills is called, a
Ans – d sight bill?
a. an ambiguous bill
b. a demand bill
c. a usance bill
d. all inland bills are sight bills
Ans - b

255. The share capital of RRBs is held by ......

(which one does match)
a. Sponsor Banks - 50%
b. Central Govt. - 35%
c. State Govt. - 15%
d. none of the above
Ans - c
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256. Nationalized banks can raise capital in 259. What are the provisions regarding appeal
which of the following forms, as per against grounds of rejection of complaint by
provisions of Banking Companies (Acquisition the Ombudsman?
and Transfer of Undertaking) and FI Laws a. the customer can appeal against the
(Amendment) Act 2006...... grounds of rejection of complaint to Governor
(i) by way of a public issue, RBI
(ii) by way of preferential allotment, b. the customer can appeal against the
(iii) by way of private placement grounds of rejection of complaint within 45
a. Only (i) and (ii) days
b. Only (i) and (iii) c. the customer can appeal against the grounds
c. Only (ii) and (iii) of rejection of complaint to Dy. Governor RBI
d. (i), (ii) and (iii) within 30 days
Ans - d d. the customer can appeal against the
grounds of rejection of complaint to Dy.
257. The acknowledgement or the part Governor RBI within 45 days
payment, for the purpose of extension of Ans - c
limitation......
a. can be any time 260. The decision or order of the
b. can be any time before expiry of limitation Ombudsman, in the scheme is called......
c. can be any time after expiry of limitation a. Decree of the Ombudsman
d. can be before or after expiry of limitation b. Award of the Ombudsman
Ans - b c. Order of the Ombudsman
d. Judgement of the Ombudsman
258. Which of the following is not required to Ans - b
file a return of income if the income in the
previous does not exceed the amount which 261. In the capital of nationalized banks, the
is not liable to tax? share of the Central govt. should not be less
a. individual than ......
b. partnership firm a. 74%
c. company b. 67%
d. all the above c. 51%
Ans - a d. 49%
Ans - c
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262. Which of the following types of 265. When parties in a contract agree that the
cooperative societies are exempted from sale of goods shall be regarded as final sale
using the word bank, banker or banking, as only on the fulfillment of certain conditions
part of their name? either before or after the conclusion of the
(i) a primary credit society, contract for sale, it is called......
(ii) a coop society formed for the protection a. absolute sale
of the mutual interest of coop banks, b. conditional sale
(iii) a coop society other than a primary credit c. agreement to sell
society formed by employees of the State d. sale agreement
Bank, associated banks, nationalized bank. Ans - b
a. Only (i) and (ii)
b. Only (i) and (iii) 267. The bailee can use the goods delivered
c. Only (ii) and (iii) by the bailor......
d. (i), (ii) and (iii) a. as per discretion of the bailee
Ans - d b. as per direction given by the bailor
c. as per the purpose to be decided by the
263. Which of the following statement bailee
regarding, cooperative banks is not correct? d. none of the above
a. if a cooperative bank operates in one state, Ans - b
State laws are applicable
b. if a cooperative bank operates in more than 268. If there is some ultra-vires transaction
one state, Central laws are applicable undertaken by the directors of the company,
c. the business of banking of cooperative banks for the company......
is regulated by Banking Regulation Act a. it can be ratified by the Board of Directors
d. a primary agricultural credit society is also b. It can be ratified by the shareholders
regulated by Banking Regulation Act c. it can be ratified by the Board of Directors or
Ans - d Shareholders
d. It cannot be ratified either by Board or
264. Three persons have joined together to Shareholders.
share the profits and returns arising from Ans - d
property (which one is correct)
a. the persons shall be called partners 269. In case of nationalized banks, a
b. the group of these persons shall be preference share holder can exercise,
collectively called firm maximum ...... of the total voting rights
c. the name under which they shall carry the a. 1%
transaction shall be called the firm name b. 2%
d. it is not a partnership firm, since they shall c. 5%
not carry on any business d. 10%
Ans - d Ans - a
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270. No time period for payment of a bill of 274. The summary assessment under Income
exchange is mentioned. Such bill of exchange Tax Act means......
is treated ...... a. when the assessment is completed by
a. a demand bill Assessing Officer in short manner
b. a usance bill b. when the assessment is completed by
c. either demand bill or usance bill at Assessing Officer without any further enquiry
discretion of the drawee c. when the assessment is completed by
d. it is ambiguous bill Assessing Officer with further enquiry
Ans - a d. none of the above
Ans - b
271. RRBs can carry which of the following
types of business ...... 275. In case of partnership firm, which of the
(i) as an agent of sponsor bank only, following is not correctly matched......
(ii) business of banking u/s 5 (b) of Banking a. the persons who enter into partnership with
Regulation Act only, one another are individually called partners
(iii) other business as specified u/s 6 (1) of b. the persons who enter into partnership with
Banking Regulation Act only one another are collectively called firm
a. Only (i) and (ii) c. the name under which their business is
b. Only (i) and (iii) carried, is called firm name.
c. Only (ii) and (iii) d. the firm is a separate legal entity separate
d. (i), (ii) and (iii) from the partners
Ans - c Ans - d

272. If bank makes payment of a cheque 276. No banking company can hold any
disregarding crossing by the drawer, the bank immovable property howsoever acquired,
is liable to ...... except such as is required for its own use, for
a. true owner only any period exceeding ...... from the
b. payee only acquisition thereof
c. endorsee only a. 3 years
d. drawer only b. 5 years
Ans - a c. 7 years
d. 9 years
273. The bank granted a term loan payable in Ans - c
half-yearly instalments in 5 years. The
limitation in this case is ...... and begins from: 277. When RBI appoint a suitable person in
a. 3 years, when there was loan default for the place of the Chairman or Director or Chief
first instalment Executive Officer or other officer or employee
b. 3 years, from date of loan who has been removed from his office, shall
c. 2 years, from due date of the last instalment hold office for a period not exceeding ...... or
d. 3 years, from due date of each instalment of such further periods not exceeding ....... at a
the loan time as the Reserve Bank may specify
Ans - d a. 3 years, 3 years
b. 3 years, 5 years
c. 5 years, 3 years
d. 5 years, 5 years
Ans - a
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278. Banks in India fall in the following 282. Which of the following is an exception of
categories ...... doctrine of indoor management, i.e., the
(i) Banks being body corporates constituted person dealing with the company can suffer
under special Acts the Parliament such as SBI, loss?
(ii) Banks being companies registered under a. where a person dealing with a company has
Companies Act 1956 or a foreign company actual knowledge of internal irregularity
such as UTI Bank Limited, b. where the situation is such that a person
(iii) Banks registered as Cooperative Societies dealing with a company could have obtained
under Central or State Act information about internal irregularity
a. Only (i) and (ii) c. where an official of the company is acting
b. Only (i) and (iii) unauthorizedly and the person dealing with
c. Only (ii) and (iii) the company has information about this.
d. (i), (ii) and (iii) d. all the above
Ans - d Ans - d

279. A contract by which one party promises 283. If a person finds that he has not properly
to save the other party from loss likely to be disclosed the income in his return, he can file
caused, it called...... revised return......
a. a contract of indemnity a. within 6 months from the end of the
b. a contract of guarantee assessment year or before completion of
c. a quasi-contract assessment
d. a contract to compensate b. within 300 days from the end of the
Ans - a assessment year or before completion of
assessment
280. If one partner of a firm cheats a c. within one year from the end of the
customer, which of the following is not assessment year or before completion of
correct...... assessment
a. all the partners are liable for the loss to the d. he cannot file any revised return
customer Ans - c
b. the partner that has cheated the customer is
liable to other partners for loss to them 284. The bank granted a term loan payable in
c. only the partner who has cheated the half-yearly instalments in 5 years. The
customer, is liable to the customer limitation in this case is ...... and begins from:
d. none of the above a. 3 years, when there was loan default for the
Ans - c first instalment
b. 3 years, from date of loan
281. To distinguish the Memorandum of c. 2 years, from due date of the last instalment
Association from Articles of Association, d. 3 years, from due date of each instalment of
which statement is correct...... the loan
a. Memorandum of Association is subordinate Ans - d
document
b. Articles of Association is a subordinate
document
c. Articles of Association is dominating
document
d. Memorandum of Association and Articles of
Association, both are dominant documents
Ans - b
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285. Which of the following is correct 288. Out of the total number of Directors of a
regarding the Consumer Protection Act? banking company, not less than 2 shall be
a. The Act is applicable on all India basis persons having special knowledge or practical
including J & K State experience in respect of ......
b. the Act applies generally to all goods and (i) agriculture and rural economy,
services (ii) co-operation,
c. the goods covered for resale or for (iii) small-scale industry
commercial purpose and services rendered a. Only (i) and (ii)
free of charge. b. Only (i) and (iii)
d. all the above c. Only (ii) and (iii)
Ans - b d. (i), (ii) and (iii)
Ans - d
286. A party has produced a certified copy of
books of account and the defendant party 289. RRBs also to maintain same CRR as
wants the bank officer as a witness to prove applicable for SCBs w.e.f. ......
the contents of copy...... a. 12.01.2002
a. the defendant party has no such right b. 01.12.2002
b. the defendant party has the right to call the c. 12.01.2005
bank officer d. 01.12.2005
c. the certified copy being prima facie evidence Ans - a
is admissible as evidence. Hence no
requirement of calling the bank officer to 291. Every banking company shall, within 30
prove. days after the close of each calendar year,
d. the certified copy being prima facie submit a return to the Reserve Bank as at the
evidence is admissible as evidence. But still the end of such calendar year of all accounts in
defendants has the right of calling the bank India which have not been operated upon for
officer to prove. ...... years
Ans - c a. 2
b. 5
287. The preferential payments shall be made c. 10
by the official liquidator or adequate d. 20
provision for such payments shall be made by Ans - c
him within ...... from the date of the winding
up order of the Bank 292. If a DRT is set up, which of the following
a. 1 week courts cannot exercise the jurisdiction for
b. 1 month cases of Rs.10 lac and above......
c. 3 months a. Distt. courts
d. 6 months b. High Courts
Ans - c c. Supreme Courts
d. all the above
Ans - d
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293. What are the provisions regarding appeal 297. A banking company shall be deemed to
against grounds of rejection of complaint by be unable to pay its debts if it has refused to
the Ombudsman? meet any lawful demand made at any of its
a. the customer can appeal against the offices or branches within ...... working days if
grounds of rejection of complaint to Governor such demand is made at a place where there
RBI is an office, branch or agency of the Reserve
b. the customer can appeal against the Bank, or within ...... working days if such
grounds of rejection of complaint within 45 demand is made elsewhere
days a. 1, 2
c. the customer can appeal against the grounds b. 2, 3
of rejection of complaint to Dy. Governor RBI c. 3, 5
within 30 days d. 5, 7
d. the customer can appeal against the Ans - c
grounds of rejection of complaint to Dy.
Governor RBI within 45 days 298. Which of the following types of amounts
Ans - c do not form part of the term debt under
RDDB Act (DRT Act) 1993?
294. If a loan is secured by mortgage of an a. fraud committed by an employee
immovable property, the limitation period is b. any liability payable under a mortgage or
...... and begins from ...... money payable under a decree or civil court
a. 30 years, from date of mortgage c. any liability for which there is no security
b. 12 years, from date of mortgage d. none of the above
c. 3 years, from date of mortgage Ans - a
d. 3 years, from date of default
Ans - b 299. Which of the following provides details
about various types of deductions allowable
295. The accounts and balance-sheet of a from gross total income of the assessee?
Bank together with the Auditor's report shall a. Section 10 of Income Tax Act
be published in the prescribed manner and b. Chapter IV of Income Tax Act
three copies thereof shall be furnished as c. Chapter VIA of Income Tax Act
returns to the Reserve Bank within ...... from d. Chapter VIIA of Income Tax Act
the end of the period to which they refer Ans - c
a. 1 week
b. 1 month 300. Within the meaning of SARFAESI Act, the
c. 3 months term security interest represents any right or
d. 6 months title or interest upon a property created in
Ans - c favor of any secured creditor and does not
include......
296. The central consumer protection council a. mortgage
holds meetings, the periodicity of which is...... b. hypothecation
a. once in a year c. assignment
b. twice in a year d. pledge or lien
c. once in every quarter Ans - c
d. once in every month
Ans - a
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301. A bank had given loan to a party with 305. The liability of the members of the
outstanding balance of Rs.10.15 lac although company can be limited by ......
the sanctioned limit was Rs.9.50 lac, which (i) Share,
has become difficult of recovery. (ii) Guarantee
a. the suit has to be filed in a civil court as the a. Only (i)
limit is Rs.9.50 lac b. Only (ii)
b. the bank can decide regarding in which c. Either (i) or (ii)
court, the suit is to be filed d. Both (i) and (ii)
c. bank can file this case in DRT only, which has Ans - d
the jurisdiction.
d. bank can file this case in High Court directly. 306. The validity of the cheque will not be
Ans - c affected by the death of the ......
a. Drawer
302. No Director of a banking company, other b. Drawee
than its Chairman or whole-time Director, by c. Endorser
whatever name called, shall hold office d. In all cases the cheque loses validity
continuously for a period exceeding ...... Ans - c
a. 7 years
b. 8 years 307. Introduction in all deposits accounts is:
c. 9 years a. optional
d. 10 years b. compulsory
Ans - b c. discretion of the bank
d. None of these
303. Which of the following includes `banking Ans - b
business' as per Banking Regulation Act?
(i) Acceptance of deposit, 308. To open an Executor Account the Bank
(ii) Collection of bills, should insist on ......
(iii) Buying of foreign exchange a. Probate
a. Only (i) and (ii) b. Certificate of Registration
b. Only (i) and (iii) c. Will of the deceased
c. Only (ii) and (iii) d. None of the above
d. (i), (ii) and (iii) Ans - a
Ans - d
309. As per-section 201, of the Contract Act
304. Which of the following instrument is an agency can be terminated by ......
issued by a securitization company for (i) The principal revoking his authority,
securitization of a financial asset, that (ii) The agent renouncing the business of the
represents undivided interest in the security, agency,
under provisions of SARFAESI Act? (iii) The completion of agency business
a. pass through certificate a. Only (i) and (ii)
b. debenture certificate b. Only (i) and (iii)
c. security receipt c. Only (ii) and (iii)
d. security sharing certification d. (i), (ii) and (iii)
Ans - c Ans - d
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310. Section 4, of the Sale of Goods Act 1930, 314. Issuance of DRs is based on the increase
deals with ...... of demand in the ......
(i) Sale, a. Local market
(ii) Agreement to sell b. International market
a. Only (i) c. Existing shareholders
b. Only (ii) d. All of the above
c. Either (i) or (ii) Ans - b
d. Both (i) and (ii)
Ans - c 315. ADRs that do not qualify or are not
intended to be listed on stock exchanges are
311. Mr.Raj, one of your customer had referred to as ......
deposited an outstation cheque for collection. a. Level 1 ADRs
Before receiving the proceeds, he expires. b. Level 2 ADRs
Now, on realisation the amount should be c. Level 3 ADRs
credited to ...... d. None of the above
a. The account of Late.Mr. Raj Ans - a
b. Suspense account pending court’s order
c. The account of the legal heirs / nominee 316. The performance of which scheme does
d. Sundry creditors account the National Housing Bank monitor?
Ans - a a. Liberalized Finance Scheme
b. Golden Jubilee Rural Housing Finance
312. According to the rule in clayton’s case Scheme
the moneys paid in by a customer in his c. Energy Efficient Housing Finance Scheme
current account are to be applied towards d. Finance scheme for indirect loans
adjustment of overdraft ...... Ans - b
a. at the option of the banker
b. as agreed to between the banker and the 317. Voting right can’t be exercised in case of:
customer mutually (i) Calls in advance,
c. in the order of time in which the debts were (ii) Calls in arrears
incurred a. Only (i)
d. as directed by the customer b. Only (ii)
Ans - c c. Either (i) or (ii)
d. Both (i) and (ii)
313. RBI promotes commercial banking by Ans - b
......
(i) Providing cheap rediscounting facilities to 318. Revaluation account is operated to find
banks, out gain or loss at the time of:
(ii) Providing liberalized rediscounting (i) Admission of a partner,
facilities to banks, (ii) Retirement of a partner,
(iii) Giving subsidies to new bank (iii) Death of a partner
a. Only (i) and (ii) a. Only (i) and (ii)
b. Only (i) and (iii) b. Only (i) and (iii)
c. Only (ii) and (iii) c. Only (ii) and (iii)
d. (i), (ii) and (iii) d. (i), (ii) and (iii)
Ans - d Ans - d
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319. Appointment Committee of Central Chief 324. As per section 2(1)(m) of Consumer
Information Commissioner (CIC) includes: Protection Act 1986, "person" includes:
(i) Prime Minister, (i) a firm whether registered or not,
(ii) Leader of the Opposition in the Lok Sabha, (ii) a Hindu undivided family,
(iii) One Union Cabinet Minister to be (iii) a co-operative society
nominated by the Prime Minister a. Only (i) and (ii)
a. Only (i) and (ii) b. Only (i) and (iii)
b. Only (i) and (iii) c. Only (ii) and (iii)
c. Only (ii) and (iii) d. (i), (ii) and (iii)
d. (i), (ii) and (iii) Ans - d
Ans - d
325. As per section 4, of The Limitation Act of
320. Which of the following has been included 1908 where the period of limitation
in the eligible investments for the purpose of prescribed for any suit, appeal or application
SLR? expires on a day when the Court is closed ......
a. Cash Management Bills a. The suit appeal or application can not be
b. inter Bank Participation Certificates filed later
c. Investment in securitized assets b. The suit, appeal or application may be
d. Only b and c instituted preferred on the day when Court re-
Ans - a opens
c. Both a and b
322. The basic objective of prudential norms d. none of the above
for exposure are: Ans - b
(i) higher profitability,
(ii) better risk management, 326. Which among the following is/are
(iii) avoidance of credit risk correct?
a. Only (i) and (ii) (i) Banking Ombudsman is a senior official
b. Only (i) and (iii) appointed by RBI,
c. Only (ii) and (iii) (ii) The Offices of Banking Ombudsman is
d. (i), (ii) and (iii) mostly situated at State Capitals,
Ans - c (iii) All Scheduled Commercial Banks, Regional
Rural Banks and Scheduled Primary Co-
323. What is Integrated Goods and Services operative Banks are covered under the
Tax? Banking Ombudsman Scheme
a. Tax imposed on imported goods and a. Only (i) and (ii)
services b. Only (i) and (iii)
b. Tax imposed on value additions to exports c. Only (ii) and (iii)
c. Tax imposed on interstate trade d. (i), (ii) and (iii)
d. Tax on international trade Ans - d
Ans – c
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327. Which one of the following is the rate at 331. Under Section 9 of the Consumer
which the RBI lends money to commercial Protection Act, which of the following
banks in the event of any shortfall of funds? Consumer Disputes Redressal Agencies were
a. Benchmark Prime Lending Rate constituted for the purposes of this Act?
b. Annual Percentage Rate (i) a Consumer Disputes Redressal Forum in
c. Bank Rate each district of the State,
d. Repo Rate (ii) a Consumer Disputes Redressal
Ans - d Commission in the State,
(iii) a National Consumer Disputes Redressal
328. When is it necessary for a bank to form Commission
consortium for lending a borrower though RBI a. Only (i) and (ii)
has waived requirement for the same? b. Only (i) and (iii)
(i) when credit facilities are more than 15% of c. Only (ii) and (iii)
capital fund of the financing d. (i), (ii) and (iii)
bank in case of single borrowers, Ans - d
(ii) When financing an infrastructure project,
(iii) When credit facilities are more than 40% 332. Service tax is a charge on ......
of capital fund of the financing bank in case of a. Taxable service provided
group b. Taxable service to be provided
a. Only (i) and (ii) c. Taxable service provided or to be provided
b. Only (i) and (iii) d. Any service provided or to be provided
c. Only (ii) and (iii) Ans - c
d. (i), (ii) and (iii)
Ans - b 333. Which of the statements given above
is/are correct?
329. When a borrower has availed credit (i) Small Industry Development Bank of India
facilities from more than one bank, banks (SIDBI) was set-up as a whole owned
should exchange information about the subsidiary of the RBI,
conduct of the borrowers' accounts with (ii) SIDBI has taken over the responsibility of
other banks at least at intervals. administering Small Industry Development
a. monthly Fund managed by the IDBI.
b. quarterly a. Only (i)
c. half yearly b. Only (ii)
d. yearly c. Both (i) and (ii)
Ans - b d. Neither (i) nor (ii)
Ans - b
330. Open market operations, one of the
measures taken by RBI in order to control 334. Which among the following is incorrect?
credit expansion in the economy, means ...... a. RBI is the Bank of Issue
a. Sale or purchase of Government securities b. RBI acts as Banker to the Government
b. Issuance of different types of bonds c. RBI is Banker's Bank
c. Auction of gold d. RBI does not regulate the flow of credit
d. To make available direct finance to Ans – d
borrowers
Ans - a
JAIIB Practice MCQs Free e-book

335. Which of the following is/are associated

with the risk involved in ADRs?
(i) Political risk,
(ii) Exchange rate risk,
(iii) Inflationary risk
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - d
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