Banking Industry MCQs

Questions and Answers

What does MCQ stand for in the context mentioned in the content?

Multiple Choice Questions

Who wrote the foreword for the Multiple Choice Questions booklet?

K Swaminathan (correct)

Karnam Sekar (correct)

A K Srivastava (correct)

D Palanisamy (correct)

K V Subbarao (correct)

What key aspect is emphasized as important for growth in the banking industry?

Knowledge

Is the Multiple Choice Questions booklet part of an initiative to bridge the knowledge gap in various banking areas?

True Signup and view all the answers

According to the content, what is mentioned as a significant factor in managing operational risks in banking?

Well trained, skilful, and knowledgeable staff Signup and view all the answers

Which of these is not a type of undesirable account?

Subsidy accounts Signup and view all the answers

A sleeping partner is one who does not take active part in the management of the business & only contributes to the share capital of the firm. Blocked accounts & unclaimed deposits are kept in which category?

RIP-2 Signup and view all the answers

A method of customer identification by an official of the Bank by undertaking seamless, secure, real-time, consent based audio-visual interaction with the customer is known as?

V-CIP Signup and view all the answers

In case of Accounts opened using OTP based e-KYC, in non-face-to-face mode the sum of all credits in a financial year should not exceed what amount?

$500,000 Signup and view all the answers

Which of these is not a required document for CDD in case of companies?

Certification documents Signup and view all the answers

A General Lien gives power to…………………….

RETAIN & SELL Signup and view all the answers

A Promissory Note must contain a promise to pay…………………….

MONEY Signup and view all the answers

Printed signatures on ……………………..cheques that are issued by companies in bulk, are acceptable by banks.

PAYMENT Signup and view all the answers

Endorsement is made on the back of the instrument, or by attaching a slip of paper called…………………….

ALLONGE Signup and view all the answers

When the endorser signs only his name on the back of the instrument, it is termed as a ……….endorsement.

BLANK Signup and view all the answers

Possession of the negotiable instrument is essential to be…………………….

HOLDER Signup and view all the answers

Punishment under the section 138 is with imprisonment for a term up to …………...or with fine which may extend to ………..

2 YEARS,TWICE THE AMOUNT Signup and view all the answers

RBI issues KYC guidelines in exercise of the powers given under section………….of ………………..ACT

35A,RBI ACT Signup and view all the answers

In case there is a variance in KYC/AML standards prescribed by the Reserve Bank of India and the host country regulators,Banks have to adopt……………………………….

MORE STRINGENT STANDARDS OF THE TWO Signup and view all the answers

Maximum coverage under free personal accidental cover available in savings bank scheme of our bank is…………….。

5,00,000 Signup and view all the answers

WEF 01.10.2019,interest rate on savings bank has been linked to…………..for amounts above ……………….。

RBI RATE,25 LACS Signup and view all the answers

The banker-customer relationship in case of safe deposit lockers is………………………..。

BAILEE-BAILOR Signup and view all the answers

In the case of partnership accounts, the letter carrying the revocation of STOP Payment instructions must be signed by……………………….of the firm.

ANY ONE OF THE PARTNERS Signup and view all the answers

On receipt of notice of insolvency of ……………………..of the Joint Hindu Family firm, all operations in the account of the Joint Hindu Family firm must be stopped.

KARTA OR KARTA & COPARCENERS Signup and view all the answers

Insanity of KARTA or coparcener in a HUF will……………………………..HUF.

DISRUPT THE HUF Signup and view all the answers

In case the loan account is reported under …………...category and higher, the current account opening bank should mandatorily obtain prior NOC/Permission from the lending bank.

SMA-2 Signup and view all the answers

The separate Bank Account for election expenditure can be opened any time, but not later than ………….before the date on which the candidate files his nomination papers.

15 DAYS Signup and view all the answers

Right of………………is available for time barred debts also.

SET OFF Signup and view all the answers

Right of set off is available on the deposit balance held in………………………….

ANY BRANCHES OF THE SAME BANK Signup and view all the answers

The NI Act came into force on……………………………..

01.04.1882 Signup and view all the answers

The NI Act is having……………sections & ……………chapters.

148,26 Signup and view all the answers

A bank which is incorporated in a country where it has no physical presence and is unaffiliated to any regulated financial group is known as…………….?

OFFSHORE BANK Signup and view all the answers

A person designated by the Bank to ensure overall compliance with the obligations imposed under Chapter IV of the PML Act and the Rules is known as…………….?

PRINCIPAL OFFICER Signup and view all the answers

Which of these is not a risk category for customers?

NONE OF THESE Signup and view all the answers

NPO/NGO promoted by United Nations or its agencies are categorized as…………….?

MEDIUM RISK Signup and view all the answers

A customer who opens an account without visiting the branch or meeting the officials of Bank is known as…………….?

ONLINE CUSTOMER Signup and view all the answers

Risk category has to be reviewed every…………….in case of High risk customers.

HALF YEAR, IN JUNE & DECEMBER Signup and view all the answers

The maximum amount of term loan that can be sanctioned is…………….?

100000 Signup and view all the answers

For the limited purpose of address Proof, Utility Bill not more than…………….will be deemed to be OVD.

6 months Signup and view all the answers

The maximum STTL allowed for any type of customer is…………….?

50000000 Signup and view all the answers

The time limit for sending STR is within…………….days of arriving at the conclusion that the transaction is of suspicious nature.

5 Signup and view all the answers

In case of Foreign students, an ……………..account will be opened by banks.

SB-STUDENT Signup and view all the answers

The First line Manager of the Branch will submit a KYC Compliance Certificate to Regional Office ………….?

EVERY FORTNIGHT Signup and view all the answers

CKYC has to be introduced by all scheduled commercial banks wef…………….?

01.01.2018 Signup and view all the answers

Central KYC Registry will allot a ….digit number to every customer.

12 Signup and view all the answers

Pending receipt of acknowledgement of Thanks Letter, against which type of credits only, withdrawals should be allowed?

NEFT/RTGS TRANSFERS Signup and view all the answers

In case of SHGs, CDD of………………………is required for opening of savings bank account.

ALL THE MEMBERS Signup and view all the answers

An account for a PEP (Politically Exposed Person) can be opened……………………….?

WITH PRIOR PERMISSION Signup and view all the answers

The presenting banks are required to preserve the physical instruments in their custody securely for a period of ………….?

5 YEARS Signup and view all the answers

As per CTS -2010 Standard, no changes/correction should be carried out on the cheques other than for…………….?

VALIDATION PURPOSE Signup and view all the answers

Photographs are not insisted in accounts of…………….?

SENIOR CITIZENS Signup and view all the answers

A partner of a partnership firm approaches the branch for opening an account in the similar name of the firm with him as a proprietor.

BRANCH WILL DECLINE THE ACCOUNT Signup and view all the answers

Savings bank account should not be opened for ……………..?

STATE ELECTRICITY BOARDS Signup and view all the answers

In case of credit, in a running loan/cash credit account, the first item on the debit side of an account is discharged or reduced by the first item on the credit side as per…………….rule.

OHM'S RULE Signup and view all the answers

Study Notes

Indian Overseas Bank: Multiple Choice Questions (MCQs) on Banking

Forewords

The MD & CEO, Executive Directors, and GM HR of Indian Overseas Bank have written forewords to the MCQ booklet, emphasizing the importance of knowledge and skill in banking.
The forewords highlight the dynamic nature of banking and the need for well-trained staff to manage operational risks.

Multiple Choice Questions (MCQs)

KYC, CKYC, Rights of Banker, General Banking, NI Act

A bank without a physical presence in a country is known as an Offshore Bank.
A Designate is a person designated by the bank to ensure overall compliance with the obligations imposed under Chapter IV of the PML Act and the Rules.
Low Risk customers include NPO/NGO promoted by the United Nations or its agencies.
A customer who opens an account without visiting the branch or meeting the bank's officials is known as an Online Customer.
Risk category has to be reviewed every Year in case of High Risk customers.
The maximum amount of term loan that can be sanctioned for an OTP-based E-KYC account is Rs. 1 lakh.
Utility bills more than 3 months old are not deemed to be OVD (Officially Valid Documents) for address proof.
The maximum STTL (Short Term Temporary Loan) allowed for any type of customer is Rs. 50,00,000.
The time limit for sending an STR (Suspicious Transaction Report) is within 3 days of arriving at a conclusion that the transaction is of a suspicious nature.
For foreign students, an SB-Student account will be opened by banks.
The First Line Manager of the Branch will submit a KYC Compliance Certificate to the Regional Office every fortnight.
CKYC was introduced by all scheduled commercial banks w.e.f. 01.01.2017.
Central KYC Registry will allot a 14-digit number to every customer.
Pending receipt of acknowledgment of Thanks Letter, against which type of credits only, withdrawals should be allowed? CASH only.
In case of SHGs, CDD of all the members is required for opening a savings bank account.
An account for a PEP (Politically Exposed Person) can be opened with prior permission of the Regional Office.
The presenting banks are required to preserve the physical instruments in their custody securely for a period of 1 year.

Endorsements and Negotiable Instruments

A Promissory Note must contain a promise to pay money only.
Printed signatures on cheques that are issued by companies in bulk are acceptable by banks.
Endorsement is made on the back of the instrument, or by attaching a slip of paper called an allonge.
When the endorser signs only his name on the back of the instrument, it is termed as a blank endorsement.
Possession of the negotiable instrument is essential to be holder in due course.

RBI and Banking Regulations

RBI issues KYC guidelines in exercise of the powers given under section 35A of the RBI Act.
In case of a variance in KYC/AML standards prescribed by the Reserve Bank of India and the host country regulators, banks have to adopt more stringent standards.
WEF 01.10.2019, the interest rate on savings bank has been linked to RBI Repo Rate for amounts above 10 lacs.
The maximum coverage under free personal accidental cover available in savings bank scheme of our bank is 10,00,000.

Account Operations and Management

General Lien gives power to retain and sell.
A partner of a partnership firm can open an account in the similar name of the firm with him as the proprietor.
The banker-customer relationship in case of safe deposit lockers is bailor-bailee.
In the case of partnership accounts, the letter carrying the revocation of STOP Payment instructions must be signed by all the partners.
On receipt of notice of insolvency of karta or karta & coparcener of the Joint Hindu Family firm, all operations in the account of the Joint Hindu Family firm must be stopped.

NI Act and Other Regulations

Punishment under the section 138 of the NI Act is with imprisonment for a term up to 2 years or with fine which may extend to twice the amount of the cheque.
The NI Act came into force on 01.04.1881.
The NI Act is having 148 sections and 13 chapters.
A nominal partner is one who does not take active part in the management of the business & only contributes to the share capital of the firm.

Customer Identification and Account Management

A method of customer identification by an official of the Bank by undertaking seamless, secure, real-time, consent-based audio-visual interaction with the customer is known as E-CIP.
In case of Accounts opened using OTP-based e-KYC, in non-face-to-face mode the sum of all credits in a financial year should not exceed 200000.
Blocked accounts & unclaimed deposits are kept in RIP-1 category.

Special Types of Customers

Thumb impression of the account holder is required to be attested by one witness.
How many nominees can be accepted for jointly deposited safe custody of articles? Two.
Banks which open current accounts without obtaining NOC from the lending bank are liable to be penalized under RBI Act.
Wherever thumb or toe impression of the sick/old/incapacitated account holder is obtained, it should be identified by one witness known to the bank, one of whom should be a responsible bank official.### Duplicate Demand Draft
A duplicate draft can be issued to the purchaser up to Rs. 50,000 on the basis of adequate indemnity, without seeking non-payment advice from the drawee office, regardless of the legal position.
Banks should issue a duplicate demand draft to the customer within a specific timeframe from the receipt of the request:
- Rs. 5,000: 3 days
- Rs. 10,000 to Rs. 20,000: 10 days
- Rs. 50,000: 1 week
- Above Rs. 50,000: 1 fortnight or 1 month
If there is a delay beyond the stipulated period for issuing a duplicate demand draft, banks are advised to pay interest to compensate the customer for the delay.
The interest rate for compensation is:
- Bank rate + 2%
- MCLR (Marginal Cost of Funds based Lending Rate) + 1%
- Repo rate + 2%
- 1-year deposit rate + 1%

SPGRS (Customer Complaint Redressal)

The time limit for redressal of customer complaints under SPGRS is 30 days.

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Test your knowledge of the banking industry with these multiple-choice questions, covering aspects such as risk management, account types, and growth strategies.