Banking Operations and Management

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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?

A financial intermediary Signup and view all the answers

Why is the banking system important for economic development?

Because it facilitates economic development Signup and view all the answers

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

Contractual Signup and view all the answers

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

The depositor Signup and view all the answers

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

Creditor and Debtor 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?

Trustee and Beneficiary Signup and view all the answers

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

For the purpose of lending and investment Signup and view all the answers

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

Deposits from retail and corporate customers Signup and view all the answers

Why do banks diversify their sources of funds?

To reduce dependence on funds from other banks Signup and view all the answers

What is the primary objective of deposit mobilization in banking?

To mobilize savings through intensive deposit collection Signup and view all the answers

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

To attract deposits from various customer groups Signup and view all the answers

What is the role of deposit collection in banking?

It is a major task of banking Signup and view all the answers

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

Banker customer relationship Signup and view all the answers

What is discussed in Chapter 3 of the manual?

Opening and operations of different bank accounts Signup and view all the answers

What is NOT discussed in the manual?

International trade financing Signup and view all the answers

What is the purpose of incorporating questions in the manual?

To provide answers to related chapters Signup and view all the answers

How many chapters does the manual consist of?

12 Signup and view all the answers

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

To keep customers coming back Signup and view all the answers

How do banks continually strive for improvements in customer service?

By taking customer surveys and monitoring calls Signup and view all the answers

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

To have direct involvement with customer service quality Signup and view all the answers

What is the significance of customer service in banking?

It is a crucial aspect of banking operations Signup and view all the answers

What motivates bank employees to improve customer service?

Incentives such as customer service awards Signup and view all the answers

What can terminate the banker-customer relationship?

All of the above Signup and view all the answers

What is the primary objective of relationship banking?

To provide cost-effective services to customers Signup and view all the answers

Why is customer service important in the banking industry?

To deliver financial services efficiently Signup and view all the answers

What is the ultimate goal of relationship banking?

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

What happens when a Garnishee Order is received?

The banker-customer relationship is terminated Signup and view all the answers

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

To compensate the customer Signup and view all the answers

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

To maintain secrecy of the customer's account Signup and view all the answers

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

The banker is liable Signup and view all the answers

What is the purpose of customer due diligence for banks?

To know the customers with whom they are dealing Signup and view all the answers

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

Reputational, operational, legal, and concentration risks Signup and view all the answers

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

Offering excellent personalized services Signup and view all the answers

Why is it important for banks to know their customers?

To avoid legal and reputational risks Signup and view all the answers

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

The banker is liable for any mistakes Signup and view all the answers

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

To maintain secrecy of the customer's financial position Signup and view all the answers

What is the importance of customer due diligence in banking?

To know the customers and avoid reputational, operational, legal, and concentration risks 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?

Debtor and Creditor 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?

Debtor and Creditor Signup and view all the answers

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

Contractual 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?

Trustee and Beneficiary Signup and view all the answers

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

The relationship itself Signup and view all the answers

What is the primary objective of deposit mobilization in banking?

To mobilize savings through intensive deposit collection Signup and view all the answers

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

Deposits from retail and corporate customers Signup and view all the answers

What is the significance of customer due diligence for banks?

To verify the customer's identity Signup and view all the answers

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

Contractual Signup and view all the answers

Why do banks diversify their sources of funds?

To reduce their dependence on other banks Signup and view all the answers

What is the ultimate objective of relationship banking?

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

What happens when a customer requests to terminate their account?

The banker-customer relationship is terminated Signup and view all the answers

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

It has great significance in the banking industry Signup and view all the answers

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

Fiduciary Signup and view all the answers

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

The relationship between the banker and customer is terminated Signup and view all the answers

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

Protecting customers' deposit and secrecy Signup and view all the answers

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

To build solidarity with fellow banks and regulators Signup and view all the answers

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

They facilitate economic development Signup and view all the answers

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

Facilitating economic development Signup and view all the answers

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

Impartiality and non-discrimination Signup and view all the answers

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

To provide timely and thorough responses to customer queries Signup and view all the answers

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

To have direct involvement with customer service quality Signup and view all the answers

What is the banker's obligation towards the customer?

To work for the customer's benefit Signup and view all the answers

What motivates bank employees to improve customer service?

Incentives, such as customer service awards Signup and view all the answers

Why is customer service important in the banking industry?

To keep customers coming back Signup and view all the answers

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

Banker customer relationship Signup and view all the answers

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

General and Special Relationship Signup and view all the answers

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

Negotiable Instruments Signup and view all the answers

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

Special relationship Signup and view all the answers

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

In the context of general banking activities Signup and view all the answers

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

The banker is liable to compensate the customer. Signup and view all the answers

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

To maintain secrecy of the customer's account. Signup and view all the answers

What is the purpose of customer due diligence for banks?

To identify potential risks associated with the customer. Signup and view all the answers

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

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

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

To reduce the risk of financial loss. Signup and view all the answers

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

Offering excellent personalized services. Signup and view all the answers

What can terminate the banker-customer relationship?

Termination of the banker-customer agreement. Signup and view all the answers

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

The banker is liable for the mistake. Signup and view all the answers

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

To identify potential risks associated with the customer. Signup and view all the answers

Why is it important for banks to know their customers?

To identify potential risks associated with the customer. Signup and view all the answers

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

Fiduciary Signup and view all the answers

What obligation does a bank have towards its customers?

To maintain secrecy and protect deposits Signup and view all the answers

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

To be impartial and non-discriminatory Signup and view all the answers

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

It plays a crucial role in economic development Signup and view all the answers

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

The banker is responsible for protecting the deposit Signup and view all the answers

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

For the purpose of lending and investment 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?

Debtor Signup and view all the answers

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

Debtor and Creditor Signup and view all the answers

Under what circumstances will the banker-customer relationship terminate?

When the customer's account becomes dormant Signup and view all the answers

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

It specifies the terms of the deposit contract Signup and view all the answers

What is the primary objective of relationship banking?

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

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

It is important for customer retention and loyalty Signup and view all the answers

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

Contractual in nature Signup and view all the answers

What happens when a bank receives a Garnishee Order?

The bank must observe the court's instructions Signup and view all the answers

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

Building solidarity with fellow banks Signup and view all the answers

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

To attract deposits from retail and corporate customers Signup and view all the answers

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

The contractual obligations between the banker and customer Signup and view all the answers

What is the main objective of deposit mobilization in banking?

To mobilize savings through intensive deposit collection Signup and view all the answers

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

To know their customers and prevent fraudulent activities Signup and view all the answers

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

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

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

To ensure the confidentiality of customer information Signup and view all the answers

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

Special relationship Signup and view all the answers

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

Legal liability for the banker Signup and view all the answers

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

Customer service Signup and view all the answers

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

Loss of customer trust Signup and view all the answers

What is the critical aspect of customer service in banking?

Meeting customer expectations Signup and view all the answers

Why do banks continually strive for improvements in customer service?

To stay ahead of competitors Signup and view all the answers

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

To have direct involvement with customer service quality Signup and view all the answers

What is the importance of interacting with customers in banking?

To keep customers coming back Signup and view all the answers

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

The banker is dependent on the customer Signup and view all the answers

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

To protect the customer's credit and business Signup and view all the answers

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

The banker is liable to compensate the customer Signup and view all the answers

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

To know the customers with whom they are dealing Signup and view all the answers

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

The banker is responsible for maintaining accurate records Signup and view all the answers

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

Business decision of the bank Signup and view all the answers

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

Service-oriented relationship Signup and view all the answers

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

All of the above Signup and view all the answers

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

To provide excellent personalized services Signup and view all the answers

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

The banker is liable to compensate the customer Signup and view all the answers

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

Providing excellent personalized services Signup and view all the answers

Which chapter covers Cash and Vault Management?

Chapter 7 Signup and view all the answers

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

To protect customers' deposits and secrecy Signup and view all the answers

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

Fiduciary Signup and view all the answers

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

They help in economic development Signup and view all the answers

What is the primary role of a bank?

To act as a financial intermediary Signup and view all the answers

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

Cash and Vault Management Signup and view all the answers

What is the importance of Cash Management in banking?

To maintain liquidity Signup and view all the answers

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

To prevent theft or loss Signup and view all the answers

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

Safe storage and handling of cash Signup and view all the answers

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

To maintain liquidity and solvency Signup and view all the answers

What is covered in Chapter 5 of the manual?

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

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

Cash and vault management Signup and view all the answers

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

Negotiable Instruments Signup and view all the answers

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

Cash and vault management Signup and view all the answers

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

Chapter 5 Signup and view all the answers

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

To act as a catalyst for economic growth and development Signup and view all the answers

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

It ensures liquidity and funds availability Signup and view all the answers

What is the main objective of cash and vault management?

To maximize cash availability and liquidity Signup and view all the answers

What is the importance of reconciling cash and vault balances?

To detect fraudulent activities Signup and view all the answers

What is the main benefit of maintaining a cash reserve?

To ensure liquidity and meet customer demands Signup and view all the answers

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

Affidavit or Notary Public Signup and view all the answers

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

Section 35 Signup and view all the answers

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

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

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

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

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

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

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

An obligation annexed to the ownership of property Signup and view all the answers

Who is the 'author of the trust'?

The person who reposes or declares confidence Signup and view all the answers

What is the 'Trust Deed'?

The instrument by which the trust is created Signup and view all the answers

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

The trust deed Signup and view all the answers

What is the 'trust property'?

The subject matter of the trust Signup and view all the answers

Who accepts the confidence in a trust?

The trustee Signup and view all the answers

What is the 'beneficial interest'?

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

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

Trusts, Trustees, Trust deed and other relevant issues Signup and view all the answers

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

Examine the trust deed Signup and view all the answers

What is the role of the 'trustee'?

To accept the confidence Signup and view all the answers

What is the main purpose of deposit mobilization in banking?

To attract deposits from retail and corporate customers Signup and view all the answers

What is the primary source of funds for banks?

Deposits from retail and corporate customers Signup and view all the answers

Why are banks diversifying their sources of funds?

To reduce dependence on funds from other banks Signup and view all the answers

What is the purpose of banks introducing several deposit schemes?

To attract deposits from various customers Signup and view all the answers

What is the primary objective of managing deposits in banks?

To ensure safekeeping of money Signup and view all the answers

Banking Operations and Management

Podcast Beta

Questions and Answers

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

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

How should a bank deal with its customers?

What is a bank's role in the economy?

Why is the banking system important for economic development?

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

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

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

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?

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

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

Why do banks diversify their sources of funds?

What is the primary objective of deposit mobilization in banking?

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

What is the role of deposit collection in banking?

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

What is discussed in Chapter 3 of the manual?

What is NOT discussed in the manual?

What is the purpose of incorporating questions in the manual?

How many chapters does the manual consist of?

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

How do banks continually strive for improvements in customer service?

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

What is the significance of customer service in banking?

What motivates bank employees to improve customer service?

What can terminate the banker-customer relationship?

What is the primary objective of relationship banking?

Why is customer service important in the banking industry?

What is the ultimate goal of relationship banking?

What happens when a Garnishee Order is received?

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

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

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

What is the purpose of customer due diligence for banks?

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

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

Why is it important for banks to know their customers?

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

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

What is the importance of customer due diligence in banking?

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

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

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

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

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

What is the primary objective of deposit mobilization in banking?

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

What is the significance of customer due diligence for banks?

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

Why do banks diversify their sources of funds?

What is the ultimate objective of relationship banking?

What happens when a customer requests to terminate their account?

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

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

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

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

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

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

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

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

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

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

What is the banker's obligation towards the customer?

What motivates bank employees to improve customer service?

Why is customer service important in the banking industry?

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

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

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

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

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

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

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

What is the purpose of customer due diligence for banks?

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

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

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

What can terminate the banker-customer relationship?