Deck 3: Banking and Negotiable Instrument

Question 1

In terms of the N.I.Act, finder of a lost cheque is :

A)a holder but not holder in due course, if payable to order
B)a holder in due course, if payable to bearer
C)both holder a
D)holder in due course, in either case

Answer 1

holder in due course, in either case

Question 2

The charge created on a security of National Savings Certificate is -

A)pledge
B)hypothecation
C)assignment
D).mortgage

Answer 2

pledge

Question 3

Internet is the cheapest of all banking channels and helps banks to gain substantially in terms of………….cost.

A)auditing
B)deposit
C)investment
D)transaction

Answer 3

transaction

Question 4

Drawing power in an account means

A)limit sanctioned
B)value of security
C)value of security minus unpa
D)stock

Question 5

Lien becomes time-barred three years after

A)the date of loan
B)date of delivery o the relative goods
C)due date of loan
D)lien has no limitation period

Question 6

Negative lien means -

A)a declaration by a company not to encumber assets of the company without previous consent of banker
B)deposit of title deeds with the bank with an oral declaration to mark bank's lien
C)a lien letter execut
D)by the company authorising the bank to mark lien on its fixed deposit receipt

Question 7

Letter of Probate means-

A)a letter attached with a will containing signatures of the witnesses
B)confirmation of succession certificate
C)a certificate issu
D)by the court containing the name of the person who has to administer the property of a deceased person

Question 8

Non-registration of a firm will affect in the following manner-

A)on dissolution of the firm, remaining partners will have to approach to the court for settlement of their dues.
B)bank will not allow an unregistered firm to open an account.
C)no partner shall be in a position to institute a suit against any other partner of the firm
D)none of these

Question 9

Working Capital Gap means-

A)total current assets minus total current liabilities
B)total assets minus intangible assets
C)total liabilities minus terms liabilities.
D)total current assets minus current liabilities (other than bank

Question 10

…………… constitute the largest source of funds for the banks

A)cash
B)loan
C)deposit
D)agency service

Question 11

Banker's lien is a type of security.

A)hypothecated
B)mortgaged
C)impli
D)pledge

Question 12

Section 85(1) of the Negotiable Instrument Act 1881 provides protection to the paying banker in respect of

A)forged endorsement
B)material alterations on the face of the cheque
C)forgery of drawer's signature
D)all of these

Question 13

Collection of cheques for customer is a………….function of bank.

A)agency function
B)trustee function
C)plann
D)function

Question 14

In periods of boom, which leads to economic instability, Reserve Bank resorts to

A)sale in the market of first class securities in its possession to reduce the supply of money as a measure of open market operations
B)buying of approved securities in the market as a measure of pen market operations
C)hike in the bank rate as a measure of open market operations
D)none of these

Question 15

Under Section 17 of the Banking Regulation Act 1949, every banking company incorporated in India is required to transfer each year to a reserve fund a sum equivalent to not less than

A)10 per cent of profit before dividends;
B)20 per cent of profit after interest tax and dividend;
C)25 per cent of profit before dividends;
D)5 per cent of gross profit

Question 16

After a customer has closed the account______

A)the banker is no more liable to observe secrecy of his account because the contractual relationship comes to an end
B)the banker is still bound by his duty of secrecy
C)the banker's duty of secrecy comes to an e
D)in terms of the provisions of the negotiable instrument act, 1881

Question 17

………….is a new scheme of deposit mobilization have been evolved by the Indian commercial banks.

A)current deposit
B)saving deposit
C)insurance link
D)deposit

Question 18

A mandate may continue to be operative even in the case of-

A)death of the agent
B)lunacy of the agent
C)insolvency of the agent
D)none of these

Question 19

….........is a document issued by the bank acknowledge the receipt of a fixed sum of money on deposit.

A)collection receipt
B)withdrawal receipt
C)fix
D)deposit receipt

Question 20

A bill should be presented for acceptance in case of insolvency of a drawee to

A)official receiver
B)drawee in case of need
C)acceptor for honour
D)none of the above

Question 21

An order instrument can be made payable to the bearer by making

A)conditional endorsement
B)full endorsement
C)general endorsement
D)none of the above

Question 22

The endorser will not liable to the holder on dishonor of a negotiable instrument if he makes

A)sans-recourse endorsement
B)facultative endorsement
C)sans-frais endorsement
D)none of the above

Question 23

Negotiation-back implies

A)return of the instrument back of he person who indorsed it earlier
B)the endorser does not want the instrument to be indorsed back to him
C)the endorser does not want the endorsee to incur any expenses on endorser's account
D)none of the above

Question 24

Once a bearer instrument always a bearer instrument is true in case of

A)a cheque only
B)a bill of exchange only
C)all negotiable instruments
D)none of the above

Question 25

……are treated as negotiable instrument by usage or custom of trade.

A)bill of exchange
B)promissory note
C)cash
D)hundies