Banking Operations and Management
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Questions and Answers

What is the nature of the relationship between a bank and its clients?

  • Informal
  • Contractual
  • Formal
  • Fiduciary (correct)

    • What is the supreme responsibility of a bank towards its customers?

  • Providing loans
  • Investing in stocks
  • Protecting customers' deposit and secrecy (correct)
  • Issuing credit cards

    • How should a bank deal with its customers?

  • Partial and non-discriminatory
  • Impartial and non-discriminatory (correct)
  • Partial and discriminatory
  • Impartial and discriminatory

    • What is a bank's role in the economy?

    <p>A financial intermediary</p> Signup and view all the answers

    Why is the banking system important for economic development?

    <p>Because it facilitates economic development</p> Signup and view all the answers

    What is the nature of the relationship between a banker and a customer?

    <p>Contractual</p> Signup and view all the answers

    In a depositor-banker relationship, who is the creditor?

    <p>The depositor</p> Signup and view all the answers

    What is the relationship between a banker and a customer when the bank lends money to its customer?

    <p>Creditor and Debtor</p> Signup and view all the answers

    What is the relationship between a banker and a customer when the banker accepts items like securities or documents for safe custody of the customers?

    <p>Trustee and Beneficiary</p> Signup and view all the answers

    Why does the bank accept deposits of money from its customers?

    <p>For the purpose of lending and investment</p> Signup and view all the answers

    What is the primary source of funding for a bank's business activity?

    <p>Deposits from retail and corporate customers</p> Signup and view all the answers

    Why do banks diversify their sources of funds?

    <p>To reduce dependence on funds from other banks</p> Signup and view all the answers

    What is the primary objective of deposit mobilization in banking?

    <p>To mobilize savings through intensive deposit collection</p> Signup and view all the answers

    What is the main purpose of a bank's deposit schemes?

    <p>To attract deposits from various customer groups</p> Signup and view all the answers

    What is the role of deposit collection in banking?

    <p>It is a major task of banking</p> Signup and view all the answers

    What is the primary focus of Chapter 2 in the manual?

    <p>Banker customer relationship</p> Signup and view all the answers

    What is discussed in Chapter 3 of the manual?

    <p>Opening and operations of different bank accounts</p> Signup and view all the answers

    What is NOT discussed in the manual?

    <p>International trade financing</p> Signup and view all the answers

    What is the purpose of incorporating questions in the manual?

    <p>To provide answers to related chapters</p> Signup and view all the answers

    How many chapters does the manual consist of?

    <p>12</p> Signup and view all the answers

    What is the primary goal of banks in terms of customer service?

    <p>To keep customers coming back</p> Signup and view all the answers

    How do banks continually strive for improvements in customer service?

    <p>By taking customer surveys and monitoring calls</p> Signup and view all the answers

    What is the role of the Managing Authority of a bank in terms of customer service?

    <p>To have direct involvement with customer service quality</p> Signup and view all the answers

    What is the significance of customer service in banking?

    <p>It is a crucial aspect of banking operations</p> Signup and view all the answers

    What motivates bank employees to improve customer service?

    <p>Incentives such as customer service awards</p> Signup and view all the answers

    What can terminate the banker-customer relationship?

    <p>All of the above</p> Signup and view all the answers

    What is the primary objective of relationship banking?

    <p>To provide cost-effective services to customers</p> Signup and view all the answers

    Why is customer service important in the banking industry?

    <p>To deliver financial services efficiently</p> Signup and view all the answers

    What is the ultimate goal of relationship banking?

    <p>To create a long-term, mutually beneficial relationship</p> Signup and view all the answers

    What happens when a Garnishee Order is received?

    <p>The banker-customer relationship is terminated</p> Signup and view all the answers

    What is the banker's liability in case of wrongful dishonor of a cheque?

    <p>To compensate the customer</p> Signup and view all the answers

    What is the banker's obligation towards the customer's account?

    <p>To maintain secrecy of the customer's account</p> Signup and view all the answers

    What happens if the banker makes a mistake in maintaining the customer's records?

    <p>The banker is liable</p> Signup and view all the answers

    What is the purpose of customer due diligence for banks?

    <p>To know the customers with whom they are dealing</p> Signup and view all the answers

    What are the risks that banks may face if they do not have adequate customer due diligence?

    <p>Reputational, operational, legal, and concentration risks</p> Signup and view all the answers

    What is essential for a bank to maintain a good relationship with its customers?

    <p>Offering excellent personalized services</p> Signup and view all the answers

    Why is it important for banks to know their customers?

    <p>To avoid legal and reputational risks</p> Signup and view all the answers

    What can happen if a bank does not maintain proper records of customer transactions?

    <p>The banker is liable for any mistakes</p> Signup and view all the answers

    What is the banker's obligation regarding the customer's financial position?

    <p>To maintain secrecy of the customer's financial position</p> Signup and view all the answers

    What is the importance of customer due diligence in banking?

    <p>To know the customers and avoid reputational, operational, legal, and concentration risks</p> Signup and view all the answers

    What type of relationship exists between a bank and its customer when the bank lends money to its customer?

    <p>Debtor and Creditor</p> Signup and view all the answers

    What is the nature of the relationship between a bank and its customer when the bank accepts deposits of money?

    <p>Debtor and Creditor</p> Signup and view all the answers

    What is the primary characteristic of the relationship between a bank and its customer?

    <p>Contractual</p> Signup and view all the answers

    What is the relationship between a banker and a customer when the bank accepts items like securities or documents for safe custody?

    <p>Trustee and Beneficiary</p> Signup and view all the answers

    What gives rise to important legal rights and duties in the relationship between a bank and its customer?

    <p>The relationship itself</p> Signup and view all the answers

    What is the primary objective of deposit mobilization in banking?

    <p>To mobilize savings through intensive deposit collection</p> Signup and view all the answers

    What is the main source of funding for a bank's business activity?

    <p>Deposits from retail and corporate customers</p> Signup and view all the answers

    What is the significance of customer due diligence for banks?

    <p>To verify the customer's identity</p> Signup and view all the answers

    What is the nature of the relationship between a banker and a customer?

    <p>Contractual</p> Signup and view all the answers

    Why do banks diversify their sources of funds?

    <p>To reduce their dependence on other banks</p> Signup and view all the answers

    What is the ultimate objective of relationship banking?

    <p>To create a long-term, mutually beneficial relationship with customers</p> Signup and view all the answers

    What happens when a customer requests to terminate their account?

    <p>The banker-customer relationship is terminated</p> Signup and view all the answers

    What is the significance of customer service in the banking industry?

    <p>It has great significance in the banking industry</p> Signup and view all the answers

    What is the nature of the relationship between banks and their clients?

    <p>Fiduciary</p> Signup and view all the answers

    What happens when a Garnishee Order is received by the bank?

    <p>The relationship between the banker and customer is terminated</p> Signup and view all the answers

    What is the banker's supreme responsibility towards its customers?

    <p>Protecting customers' deposit and secrecy</p> Signup and view all the answers

    What is the focus of relationship banking in terms of regulators?

    <p>To build solidarity with fellow banks and regulators</p> Signup and view all the answers

    What is the significance of commercial banks in the development process?

    <p>They facilitate economic development</p> Signup and view all the answers

    What is the primary role of a bank in the economy?

    <p>Facilitating economic development</p> Signup and view all the answers

    What is expected of a bank in its dealings with customers?

    <p>Impartiality and non-discrimination</p> Signup and view all the answers

    What is the primary goal of banks in terms of customer service?

    <p>To provide timely and thorough responses to customer queries</p> Signup and view all the answers

    What is the role of the Managing Authority of a bank in terms of customer service?

    <p>To have direct involvement with customer service quality</p> Signup and view all the answers

    What is the banker's obligation towards the customer?

    <p>To work for the customer's benefit</p> Signup and view all the answers

    What motivates bank employees to improve customer service?

    <p>Incentives, such as customer service awards</p> Signup and view all the answers

    Why is customer service important in the banking industry?

    <p>To keep customers coming back</p> Signup and view all the answers

    What is the main topic of Chapter 2 of the manual?

    <p>Banker customer relationship</p> Signup and view all the answers

    What type of relationship is discussed in Chapter 2 of the manual?

    <p>General and Special Relationship</p> Signup and view all the answers

    What is not a topic of Chapter 2 in the manual?

    <p>Negotiable Instruments</p> Signup and view all the answers

    What is discussed in Chapter 2 in addition to general relationship?

    <p>Special relationship</p> Signup and view all the answers

    What is the context in which the banker customer relationship is discussed in the manual?

    <p>In the context of general banking activities</p> Signup and view all the answers

    What is the consequence of a banker refusing to pay a customer's cheque on unreasonable grounds?

    <p>The banker is liable to compensate the customer.</p> Signup and view all the answers

    What is the banker's obligation towards a customer's account?

    <p>To maintain secrecy of the customer's account.</p> Signup and view all the answers

    What is the purpose of customer due diligence for banks?

    <p>To identify potential risks associated with the customer.</p> Signup and view all the answers

    What may happen if a bank does not maintain adequate customer due diligence?

    <p>The bank will face reputational, operational, legal and concentration risks.</p> Signup and view all the answers

    Why is it essential for a bank to maintain proper records of customer transactions?

    <p>To reduce the risk of financial loss.</p> Signup and view all the answers

    What is essential for a bank to maintain a good relationship with its customers?

    <p>Offering excellent personalized services.</p> Signup and view all the answers

    What can terminate the banker-customer relationship?

    <p>Termination of the banker-customer agreement.</p> Signup and view all the answers

    What is the banker's liability if the banker makes a mistake in maintaining the customer's records?

    <p>The banker is liable for the mistake.</p> Signup and view all the answers

    What is the primary focus of customer due diligence for banks?

    <p>To identify potential risks associated with the customer.</p> Signup and view all the answers

    Why is it important for banks to know their customers?

    <p>To identify potential risks associated with the customer.</p> Signup and view all the answers

    What is the primary characteristic of the relationship between a banker and a customer?

    <p>Fiduciary</p> Signup and view all the answers

    What obligation does a bank have towards its customers?

    <p>To maintain secrecy and protect deposits</p> Signup and view all the answers

    What is essential for a bank to maintain a good relationship with its customers?

    <p>To be impartial and non-discriminatory</p> Signup and view all the answers

    What is the significance of the banking system in the development process?

    <p>It plays a crucial role in economic development</p> Signup and view all the answers

    What is the nature of the banker's responsibility towards customers' deposit?

    <p>The banker is responsible for protecting the deposit</p> Signup and view all the answers

    What is the primary reason why a bank accepts deposits of money from its customers?

    <p>For the purpose of lending and investment</p> Signup and view all the answers

    In a banker-customer relationship, what is the role of the customer when the bank lends money to them?

    <p>Debtor</p> Signup and view all the answers

    What is the relationship between a banker and a customer when the bank accepts deposits of money?

    <p>Debtor and Creditor</p> Signup and view all the answers

    Under what circumstances will the banker-customer relationship terminate?

    <p>When the customer's account becomes dormant</p> Signup and view all the answers

    What is the significance of the contractual relationship between a banker and a customer?

    <p>It specifies the terms of the deposit contract</p> Signup and view all the answers

    What is the primary objective of relationship banking?

    <p>To create a long-term, mutually beneficial relationship</p> Signup and view all the answers

    What is the significance of customer service in the banking industry?

    <p>It is important for customer retention and loyalty</p> Signup and view all the answers

    What is the primary characteristic of the relationship between a banker and a customer?

    <p>Contractual in nature</p> Signup and view all the answers

    What happens when a bank receives a Garnishee Order?

    <p>The bank must observe the court's instructions</p> Signup and view all the answers

    What is the focus of relationship banking in terms of regulators?

    <p>Building solidarity with fellow banks</p> Signup and view all the answers

    What is the primary reason for banks to introduce various deposit schemes?

    <p>To attract deposits from retail and corporate customers</p> Signup and view all the answers

    What is the key aspect of a banker-customer relationship?

    <p>The contractual obligations between the banker and customer</p> Signup and view all the answers

    What is the main objective of deposit mobilization in banking?

    <p>To mobilize savings through intensive deposit collection</p> Signup and view all the answers

    What is the primary role of customer due diligence for banks?

    <p>To know their customers and prevent fraudulent activities</p> Signup and view all the answers

    What is the significance of relationship banking in the banking industry?

    <p>It is essential for banks to maintain a good relationship with their customers</p> Signup and view all the answers

    What is the primary objective of a banker in maintaining a customer's records?

    <p>To ensure the confidentiality of customer information</p> Signup and view all the answers

    What type of relationship is emphasized in Chapter 2 of the manual?

    <p>Special relationship</p> Signup and view all the answers

    What is the primary implication of a banker's failure to maintain accurate customer records?

    <p>Legal liability for the banker</p> Signup and view all the answers

    What is the primary focus of the banker-customer relationship in Chapter 2?

    <p>Customer service</p> Signup and view all the answers

    What is the primary consequence of a banker's breach of confidentiality in maintaining customer records?

    <p>Loss of customer trust</p> Signup and view all the answers

    What is the critical aspect of customer service in banking?

    <p>Meeting customer expectations</p> Signup and view all the answers

    Why do banks continually strive for improvements in customer service?

    <p>To stay ahead of competitors</p> Signup and view all the answers

    What is the role of the Managing Authority in customer service?

    <p>To have direct involvement with customer service quality</p> Signup and view all the answers

    What is the importance of interacting with customers in banking?

    <p>To keep customers coming back</p> Signup and view all the answers

    Who is dependent on whom in the banker-customer relationship?

    <p>The banker is dependent on the customer</p> Signup and view all the answers

    What is the primary reason for a banker to maintain secrecy of a customer's account?

    <p>To protect the customer's credit and business</p> Signup and view all the answers

    What is the consequence of a banker's refusal to pay a customer's cheque on unreasonable grounds?

    <p>The banker is liable to compensate the customer</p> Signup and view all the answers

    What is the primary objective of customer due diligence for banks?

    <p>To know the customers with whom they are dealing</p> Signup and view all the answers

    What is the banker's obligation in maintaining proper records of customer transactions?

    <p>The banker is responsible for maintaining accurate records</p> Signup and view all the answers

    What is the primary reason for termination of a banker-customer relationship?

    <p>Business decision of the bank</p> Signup and view all the answers

    What is the primary characteristic of a banker-customer relationship?

    <p>Service-oriented relationship</p> Signup and view all the answers

    What is the consequence of a bank's failure to maintain adequate customer due diligence?

    <p>All of the above</p> Signup and view all the answers

    What is the primary goal of a bank in maintaining a good relationship with its customers?

    <p>To provide excellent personalized services</p> Signup and view all the answers

    What is the banker's liability in case of wrongful dishonor of a cheque?

    <p>The banker is liable to compensate the customer</p> Signup and view all the answers

    What is essential for a bank to maintain a good relationship with its customers?

    <p>Providing excellent personalized services</p> Signup and view all the answers

    Which chapter covers Cash and Vault Management?

    <p>Chapter 7</p> Signup and view all the answers

    What is the banker's supreme responsibility towards its customers?

    <p>To protect customers' deposits and secrecy</p> Signup and view all the answers

    What is the nature of the relationship between a banker and a customer?

    <p>Fiduciary</p> Signup and view all the answers

    What is the significance of commercial banks in the development process?

    <p>They help in economic development</p> Signup and view all the answers

    What is the primary role of a bank?

    <p>To act as a financial intermediary</p> Signup and view all the answers

    What is the primary focus of Chapter 5 in the manual?

    <p>Cash and Vault Management</p> Signup and view all the answers

    What is the importance of Cash Management in banking?

    <p>To maintain liquidity</p> Signup and view all the answers

    What is the primary objective of measures for safe keeping of cash in banking?

    <p>To prevent theft or loss</p> Signup and view all the answers

    What is a critical aspect of Cash and Vault Management in banking?

    <p>Safe storage and handling of cash</p> Signup and view all the answers

    Why is Cash Management important for a bank's operations?

    <p>To maintain liquidity and solvency</p> Signup and view all the answers

    What is covered in Chapter 5 of the manual?

    <p>BACH, BACPS Cash, and vault managements, measures for safekeeping of cash</p> Signup and view all the answers

    What aspect of banking is discussed in Chapter 5 of the manual?

    <p>Cash and vault management</p> Signup and view all the answers

    Which of the following is NOT discussed in Chapter 5 of the manual?

    <p>Negotiable Instruments</p> Signup and view all the answers

    What is the main focus of Chapter 5 in the manual?

    <p>Cash and vault management</p> Signup and view all the answers

    Which chapter of the manual discusses measures for safekeeping of cash?

    <p>Chapter 5</p> Signup and view all the answers

    What is the primary role of a bank in the economy?

    <p>To act as a catalyst for economic growth and development</p> Signup and view all the answers

    What is the significance of cash and vault management in banking?

    <p>It ensures liquidity and funds availability</p> Signup and view all the answers

    What is the main objective of cash and vault management?

    <p>To maximize cash availability and liquidity</p> Signup and view all the answers

    What is the importance of reconciling cash and vault balances?

    <p>To detect fraudulent activities</p> Signup and view all the answers

    What is the main benefit of maintaining a cash reserve?

    <p>To ensure liquidity and meet customer demands</p> Signup and view all the answers

    What document is required to be submitted by the heirs in case of unclaimed deposits?

    <p>Affidavit or Notary Public</p> Signup and view all the answers

    What is the section in the Bank Company Act 1991 that deals with unclaimed deposits?

    <p>Section 35</p> Signup and view all the answers

    What is the purpose of annexure-6 in the study material?

    <p>It provides a detailed list of files and documents along with the time limit for maintenance of bank records.</p> Signup and view all the answers

    What is the purpose of annexure-7 in the study material?

    <p>It provides an instruction circular letter regarding procurement of fresh and renewal of corporate deposits.</p> Signup and view all the answers

    What is the purpose of annexure-5 in the study material?

    <p>It provides relevant circulars regarding maintenance of unclaimed deposit account.</p> Signup and view all the answers

    What is a 'Trust' in the context of Trust Act, 1882?

    <p>An obligation annexed to the ownership of property</p> Signup and view all the answers

    Who is the 'author of the trust'?

    <p>The person who reposes or declares confidence</p> Signup and view all the answers

    What is the 'Trust Deed'?

    <p>The instrument by which the trust is created</p> Signup and view all the answers

    What should a banker thoroughly examine when opening an account in the names of persons as trustees?

    <p>The trust deed</p> Signup and view all the answers

    What is the 'trust property'?

    <p>The subject matter of the trust</p> Signup and view all the answers

    Who accepts the confidence in a trust?

    <p>The trustee</p> Signup and view all the answers

    What is the 'beneficial interest'?

    <p>The beneficiary's right against the trustees as owner of the trust property</p> Signup and view all the answers

    What is governed by the 'Trust Act, 1882'?

    <p>Trusts, Trustees, Trust deed and other relevant issues</p> Signup and view all the answers

    What should a banker do when opening an account in the names of persons as trustees?

    <p>Examine the trust deed</p> Signup and view all the answers

    What is the role of the 'trustee'?

    <p>To accept the confidence</p> Signup and view all the answers

    What is the main purpose of deposit mobilization in banking?

    <p>To attract deposits from retail and corporate customers</p> Signup and view all the answers

    What is the primary source of funds for banks?

    <p>Deposits from retail and corporate customers</p> Signup and view all the answers

    Why are banks diversifying their sources of funds?

    <p>To reduce dependence on funds from other banks</p> Signup and view all the answers

    What is the purpose of banks introducing several deposit schemes?

    <p>To attract deposits from various customers</p> Signup and view all the answers

    What is the primary objective of managing deposits in banks?

    <p>To ensure safekeeping of money</p> Signup and view all the answers

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