Financial Ratios Analysis and Interpretation PDF

## Financial Ratios and Their Significance This document provides a breakdown of various financial ratios and their relevance for evaluating a business. ### Ratio Analysis and Interpretation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What does the equity ratio indic...

## Financial Ratios and Their Significance This document provides a breakdown of various financial ratios and their relevance for evaluating a business. ### Ratio Analysis and Interpretation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What does the equity ratio indicate about a company's future earnings? | The market perception of a company's future earnings | | multiple_c | Which ratio would be most useful to assess how much investors are willing to pay for a rupee of earnings? | Market Capitalization | | multiple_c | What does the dividend yield indicate? | The return on investment from dividends relative to the market price of the stock | | multiple_c | How is market capitalization calculated? | Total Assets - Total Liabilities | | multiple_c | What does the Receivables Turnover Ratio measure? | How effectively a company collects on its receivables. | | multiple_c | Which liquidity ratio excludes inventory from current assets? | Cash Flow Ratio | | multiple_c | What does the Interest Coverage Ratio assess? | The speed at which inventory is converted to sales. | | multiple_c | What does the Gross Profit Margin indicate in financial analysis? | Efficiency in utilizing total assets | | multiple_c | Which ratio evaluates how efficiently a company generates sales from its total assets? | Price to Earnings (P/E) Ratio | | multiple_c | What is the focus of the Price to Earnings (P/E) Ratio? | Liquidity management | | multiple_c | Which principle of lending primarily emphasizes the security of the lender's funds? | Profitability | ### Penal Interest on Loans | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the rule regarding penal interest charged by banks on loans? | It is set by borrower agreement. | | multiple_c | What is the maximum allowable penal charge for loans to individual borrowers compared to non-individual borrowers for similar non-compliance? | It must be lower than the charges for non-individual borrowers. | ### Joint Naval Exercise | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which countries are involved in the joint naval exercise 'Security Belt-2024'? | China, Brazil, and India | ### Prime Minister of Portugal | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Who was appointed as the new prime minister of Portugal? | Harris O'Sullivan | ### Inflation Rate Increase and Reliance Industries Stake | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the main reason cited for the inflation rate increase? | Increased consumer spending | | multiple_c | What stake did Reliance Industries acquire in Adani's power project? | 20% | ### IDEX Initiative | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the goal of the IDEX initiative? | To support startups in the technology sector | ### Tata Power Solar Systems Milestone | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What was the milestone achieved by Tata Power Solar Systems Limited? | Completed India's largest solar and battery energy storage project | ### Tata Power Solar Systems Partnership and Mahakumbh 2024 | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which institution is involved in the partnership with Tata Power Solar Systems? | Indian Institute of Technology Delhi (IIT Delhi) | | multiple_c | What significant project is Startup Mahakumbh 2024 associated with? | Developing green technologies | ### Tata Power Solar Systems Energy Focus, Indian Oil Fuel Name, and Flipkart's UPI Services | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of energy project does Tata Power Solar Systems Limited focus on? | Solar energy | | multiple_c | What is the name of the fuel manufactured by Indian Oil for Formula One racing? | Storm petrol | | multiple_c | In partnership with which bank did Flipkart launch its UPI services? | State Bank of India | ### ECB: All-In-Cost and Foreign Exchange Management Regulations | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What does the All-in-Cost in case of ECB and Trade Credit include according to the relevant regulations? | Only the guarantee fees and ECA charges | | multiple_c | Which of the following statements is true regarding the Foreign Exchange Management (Borrowing and Lending) Regulations? | They do not apply to authorized persons. | ### Guarantees for Credit Enhancement | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum allowed guarantee fee and associated costs for credit enhancement? | 1 percent of the principal amount | ### ECB Drawdown Requirement | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is required before a borrower can draw down on an ECB? | Written consent from the lender | ### Reporting under the ECB Framework | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of these is NOT a requirement for reporting under the ECB Framework? | Submission of a statutory auditor's certificate | ### Untraceable Entity Availng ECB | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What action should be taken if a borrower is deemed an untraceable entity availing ECB/Trade Credit? | File Revised Form ECB | ### Borrower's Reporting Obligations | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Within how many working days must borrowers report actual ECB transactions? | 15 working days | ### Reporting Changes in ECB | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following changes must be reported through a revised Form ECB? | Any party's contact information | ### Failing to Comply with ECB Reporting Requirements | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What happens if a borrower does not comply with ECB reporting requirements for eight quarters? | They must restructure their debt | ### Converting ECB to Equity | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | In what scenario can a borrower convert ECB into equity? | If both lender and borrower agree verbally | ### Raising ECB under Corporate Insolvency Resolution | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Under which condition can an entity under corporate insolvency resolution raise ECB? | If they have sufficient collateral to back the ECB. | ### Refinancing through ECB | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of loans can eligible corporate borrowers refinance through ECB if classified as SMA-2 or NPA? | Only unsecured loans. | ### Lending to Borrowers Raising ECB for Repayment of Rupee Loans | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which entities are permitted to lend to borrowers raising ECB for repayment of Rupee loans under specific conditions? | Only national banks within India. | ### ECB Information Dissemination and Primary Responsibility | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What information is disseminated monthly on the RBI's website regarding ECB? | Overall national debt and forecast. | | multiple_c | What is the primary responsibility for ensuring compliance with ECB guidelines placed upon? | The borrowing entity itself. | ### Trade Credit | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which parties can raise Trade Credit (TC) for imports according to the framework? | Any private company in India. | | multiple_c | For Trade Credit transactions involving Special Economic Zones, which document is treated as an import document? | The receipt of payment issued by the bank. | ### Security for Trade Credit | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of security can be offered by an importer for raising Trade Credit? | Only bank guarantees from Indian banks. | ### Foreign Trade Policy of India and Trade Credit | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | How does the Foreign Trade Policy of India relate to Trade Credits? | It restricts the types of goods that can be imported using TC. | ### Average Maturity for Oil Marketing Companies Raising ECB | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the minimum average maturity period for Oil Marketing Companies (OMCs) raising ECB under the automatic route? | 5 years | ### Maximum Borrowing Limit for Startups | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum borrowing limit per Startup under the ECB framework? | USD 10 million | ### Security for ECB Loan | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following can be provided as security for the ECB loan? | Movable and immovable assets | ### Recognized Lender for Startups | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Who qualifies as a recognized lender under the ECB guidelines for Startups? | Foreign banks only | ### Liabilities in Banking System | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is classified as a liability to the banking system? | Inter-bank assets | ### Liabilities Excluded from NDTL Computation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following liabilities are excluded from NDTL computation for CRR and SLR? | Borrowings through Tier2 capital instruments | ### Bank Loan Excluded from NDTL for CRR but Not SLR | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of bank loan is excluded from the NDTL computation for CRR but not for SLR? | Loans taken from NaBFID by scheduled co-operative banks | ### Claims Not Included in Bank's Liabilities for NDTL Computation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following claims is not included in the bank's liabilities for NDTL computation? | Promissory notes issued by the bank | ### Subsidy Exempted from NDTL | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of subsidy is treated as exempted from NDTL for CRR? | Loans with subsidized interest rates | ### Category for Inter-Bank Liabilities | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Inter-bank liabilities fall under which category in relation to NDTL for CRR? | Added to total liabilities | ### Effect of Borrowing from RBI on NDTL | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the effect of borrowing from the RBI on a bank's NDTL computation? | It is excluded entirely from NDTL calculation | ### Maximum Commission on Shares Issued by Banking Companies | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum amount a banking company can pay as commission on shares issued? | 2.50% | ### Reserve Fund Transfer | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What percentage of profits must a banking company transfer to its reserve fund before declaring dividends? | 20% | ### Shareholding Percentage in Another Company | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum percentage of shares a banking company can hold in another company? | 30% | ### Reserve Bank Power to Control Advances | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which section of BR act gives the Reserve Bank of India the power to control advances by banking companies? | Section 21 | ### Scrutiny of Interest Rates | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Are the rates of interest charged by banks subject to scrutiny by courts? | Only for non-scheduled banks | ### Issuing Shares to Employees | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is a banking company prohibited from doing regarding its own shares? | Issuing them to employees | ### Statutory Liquidity Ratio (SLR) | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the current Statutory Liquidity Ratio (SLR) that banks must maintain? | 15% | ### Assets Included in SLR Computation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of these assets can be included as part of the SLR? | Real estate holdings | ### Securities Excluded from CRR/SLR Computation | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of securities are excluded from CRR/SLR computations? | State development loans | ### Ceiling Percentage of SLR in India | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the ceiling percentage for SLR in India? | 30% | ### Maintaining Investments in Government Securities | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Where should all banks maintain investments in government securities? | In cash management accounts | ### Treating Treasury Bill for SLR Purposes | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following is treated as a Treasury Bill for SLR purposes? | Unsecured bank loans | ### Fair Valuation Frequency | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the minimum frequency for fair valuing the securities held in Available-for-Sale (AFS)? | Quarterly | ### Fair Valuation of Securities Classified under Held for Trading (HFT) | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | How often must securities classified under the Held for Trading (HFT) sub-category within Fair Value through Profit or Loss (FVTPL) be fair valued? | Monthly | ### Fair Value of Investments in Subsidiaries, Associates, and Joint Ventures | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | At what value should investments in subsidiaries, associates, and joint ventures be held? | Book value | ### Reclassifying Investments Between Categories | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is required before banks can reclassify investments between categories such as HTM, AFS, and FVTPL? | No approval is needed | ### Maximum Carrying Value of Investments Sold Out of HTM Portfolio | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum carrying value of investments that can be sold out of the HTM portfolio in any financial year without prior approval? | 5 percent | ### Sales Excluded from the Five Percent Regulatory Limit on HTM Sales | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which of the following sales is excluded from the five percent regulatory limit on HTM sales? | Sales to other banks | ### Evaluating Investments in Subsidiaries, Associates, and Joint Ventures | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | When should banks evaluate investments in subsidiaries, associates, and joint ventures for impairment? | Quarterly | ### Investment Classification When an Investee Ceases to be a Subsidiary, Associate, or Joint Venture | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What happens to the investment classification when an investee ceases to be a subsidiary, associate, or joint venture? | It should be ignored | ### NABARD Headquarters | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Where is the headquarters of NABARD located? | Kolkata | ### Refinace for Agriculture | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which organization provides refinance to Scheduled Commercial Banks for supporting agriculture? | UTI | ### Minimum Paid-Up Voting Equity Capital Required for a Commercial Bank | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the minimum paid-up voting equity capital required for a commercial bank? | 2 billion | ### Minimum Capital Requirement for Payment Banks | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the minimum capital requirement for Payment Banks? | ₹500 crore | ### Maximum Limit of Voting Rights for a Single Shareholder | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum limit of voting rights for a single shareholder in a banking company without prior approval from the Reserve Bank? | 20% | ### Minimum Ratio of Authorized, Subscribed, and Paid-Up Capital in a Banking Company | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the required minimum ratio of authorized, subscribed, and paid-up capital in a banking company? | 3:2:1 | ### Minimum Capital Requirement for Small Finance Banks (SFBs) | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the minimum capital requirement for small finance banks (SFBs)? | ₹300 crore | ### Duration to Preserve Paid Cheques | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the duration for which customers are required to preserve paid cheques? | 10 years | ### Maximum Period Allowed for Payment by Buyer to Supplier | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum period allowed for payment from the buyer to the supplier under the MSME Act? | 45 days | ### Interest Liability for Failing to Make Payment to MSME Suppliers | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of interest is the buyer liable to pay if they fail to make payment to the MSME supplier within the timeframe decided by Govt? | Fixed interest | ### Dispute Resolution Council for MSMEs | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which council is referenced for disputes regarding amounts due to the MSME supplier? | Banking Ombudsman | ### Committee Responsible for Examining Adequacy of Institutional Credit to the SSI Sector | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which committee was responsible for examining the adequacy of institutional credit to the SSI sector? | Chakrabarty Committee | ### Recommended Limit for Collateral-Free Loans to MSEs | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the recommended limit for collateral-free loans to MSEs after the review? | Rs. 5 lakh | ### Credit Facility to Extend in Case of Unforeseen Circumstances for MSEs | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What type of credit facility are banks advised to extend in case of unforeseen circumstances for MSEs? | Home loans | ### Bank's Action if a Loan Application is Rejected | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What must banks do if a loan application is rejected? | Explain the reasons for rejection in writing | ### Credit Guarantee Scheme for Micro and Small Enterprises | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | Which group reviewed the Credit Guarantee Scheme for Micro and Small Enterprises? | Nayak Working Group | ### Objectives of the High-Level Committee on Credit to the SSI Sector | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is one of the objectives of the high-level committee on credit to the SSI sector? | To eliminate small business loans | ### Confidentiality of Credit Related Information for MSMEs | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is required from banks in terms of the Confidentiality of online visibility of credit related information for MSMEs? | Confidentiality of all credit documents | ### Factor to Consider When Expanding Credit Limits for MSEs | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What factor should banks consider when expanding credit limits for MSEs? | Local employment rates | ### Maximum Guarantee Coverage Limit in the Credit Guarantee Scheme of CGTMSE | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | What is the maximum guarantee coverage limit under the Credit Guarantee Scheme of CGTMSE? | ₹500 lakh | ### NRI Customer's Bank Account Management | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | A Savings account holder of your Branch has recently gone abroad for a job. He is also having rental income from two flats at Mumbai. You have following products to offer the customer to maximize your business ensuring regulatory compliances. i) Advise to convert his SB Account into NRO, ii) Advise the customer to open an NRE Account to park local funds, iii) Advise the customer to mantain his SB account as it is and open and NRO and NRE Account | All are correct | ### Dealing with a Customer with Different Address in Aadhaar Card | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | A customer comes to Branch with his photo and Aadhaar card. It is found that the present address of the customer is different from the address mentioned in the Aadhaar. How to deal with the case? | Account can't be opened | ### Handling an Order Cheque for Payment in Cash | QuestionType | QuestionText | AnswerA | |---|---|---| | multiple_c | An Order cheque presented at counter for payment of Rs.5.00 Lakh over the counter by a third party for payment of cash. What is the best action to be done by the cashier? | An order cheque can't be paied in cash over the counter | ### Correct Answers for Ratio Analysis and Interpretation | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | The profitability generated from shareholder investments | The proportion of assets financed by debt | The proportion of assets financed by shareholder equity | D | | Price-to-Earnings (P/E) Ratio | Earnings Per Share (EPS) | Dividend Yield | B | | The total market value of a company's equity | The proportion of profits distributed as dividends | The average earnings available for each share of common stock | A | | Net Income / Average Outstanding Shares | Share Price x Total Outstanding Shares | Annual Dividends per Share / Earnings Per Share | C | | The efficiency of asset management to produce sales. | How well a company generates profits from its equity. | The frequency of inventory sold and replaced. | A | | Current Ratio | Quick Ratio | Cash Ratio | C | | The ability to pay short-term liabilities. | How easily a company can pay interest on outstanding debt. | The proportion of sales that exceeds the cost of goods sold. | C | | Overall profitability after all expenses | Percentage of revenue exceeding the cost of goods sold | Liquidity without considering current liabilities | C | | Asset Turnover Ratio | Net Profit Margin | Return on Equity (ROE) | B | | Efficiency in collecting receivables | Investor expectations regarding profitability and growth | Debt financing evaluation | C | | Transparency | Safety | Liquidity | C | ### Correct Answers for Penal Interest, Joint Naval Exercise, Prime Minister of Portugal, Inflation, Reliance Industries Stake, and IDEX Initiative | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | It is treated as penal charges and cannot be capitalized. | It should be added to the existing rate. | It can be calculated monthly. | B | | It must be equal to the charges for non-individual borrowers. | It can be more than the charges for non-individual borrowers. | It should be double the charges for non-individual borrowers. | B | | China, Iran, and Russia | Russia, the U.S., and Saudi Arabia | India, Iran, and Turkey | B | | Mahmoud Abbas Improved manufacturing output. | Luis Montenegro Rise in food articles and energy prices. | Mohammad Mustafa Government tax reforms | C | | 26% | 30% | 25% | B | | To enhance the capabilities of the Indian Army and Air Force. | To increase public awareness about renewable energy. | To promote financial services among Indian banks | B | ### Correct Answers for Tata Power Solar Systems Milestone, Partnership, and Mahakumbh 2024 | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Developed a new solar panel technology | Opened a new manufacturing facility. | Launched a solar energy awareness campaign. | A | | Indian Institute of Management | Delhi School of Economics | National Solar Energy Institute | A | | Social entrepreneurship training | Addressing healthcare challenges | Support for renewable energy initiatives | D | ### Correct Answers for Tata Power Solar Systems Energy Focus, Indian Oil Fuel Name, and Flipkart's UPI Services | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Nuclear energy | Fossil fuel energy | Hydropower | A | | RaceFuel | SpeedMax | TurboFuel | A | | Axis Bank | HDFC Bank | ICICI Bank | B | ### Correct Answers for All-In-Cost, Foreign Exchange Management Regulations, and Guarantee Fees | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | They govern both External Commercial Borrowings and Trade Credit. | They have not been amended since their inception. | They only pertain to domestic transactions. | B | | 2 percent of the principal amount | 3 percent of the principal amount | 4 percent of the principal amount | B | | Loan Registration Number (LRN) | Loan Registration Number (LRN) | Submission of loan agreement copies | C | ### Correct Answers for Reporting Requirements for ECB | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Obtaining a Loan Registration Number (LRN) | Changes in terms to be reported within 7 days | Monthly reporting of actual transactions | A | | Transfer the ECB to another bank | Increase reporting frequency | Submit a new ECB application | A | | 10 working days | 5 working days | 7 working days | D | | Change in repayment terms | Change in the loan agreement format | Change in the currency of the loan | B | | They can apply for new loans from any bank | They are labeled as untraceable entities | They are subject to penalties by the Reserve Bank | C | | If certain specified conditions are met | After 5 years of borrowing | Only with prior approval from the Reserve Bank | B | | If they can demonstrate significant cash flow improvements. | If it is specifically permitted under the resolution plan. | If raising ECB will help improve their internal processes. | C | ### Correct Answers for ECB Loan Types, Eligible Borrowers, and Information Dissemination | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Rupee loans for capital expenditures in manufacturing and infrastructure. | Eligible corporate borrowers classified as SMA-2 or NPA can refinance Rupee loans used for capital expenditure in specific sectors through ECB. | International loans acquired from foreign banks. | C | | Recognised lenders excluding foreign branches/subsidiaries of Indian banks. | Recognised lenders can provide ECB for repayment of Rupee loans, but foreign branches and subsidiaries of Indian banks are excluded. | Any financial institution authorized by the government. | C | | Details of borrower name, amount, purpose, and maturity of ECB. | Future projections for ECB trends. | Names of all banks participating in ECB. | B | | The government regulatory bodies. | The lending banks only. | External auditors and consultants. | A | | Units or developers in SEZ and DTA. | Only public sector units. | Only large multinational corporations. | B | ### Correct Answers for Inter Unit Receipt, Security for Trade Credit, and Foreign Trade Policy of India | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | A certificate from the Indian customs authority. | The invoice issued by the supplier. | An inter unit receipt generated through NSDL. | D | | Movable assets, immovable assets, and guarantees. | Real estate properties exclusively. | Cash collateral only from foreign investors. | B | | It only allows capital goods to be purchased with Trade Credit. | It does not play any role in TC transactions. | It outlines permissible imports for which Trade Credits can be raised. | D | ### Correct Answers for Average Maturity Period for OMCs, Borrowing Limit for Startups, and Security for ECB Loans | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | 1 year | 3 years | 2 years | C | | USD 3 million | USD 2 million | USD 5 million | B | | Only personal guarantees | Only real estate | Only financial securities | A | ### Correct Answers for Resident of a FATF Compliant Country, Amount Received by Correspondent Banks, and Capital Reserves | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | A resident of a FATF compliant country | The lender/investor must be a resident of a FATF compliant country to be recognized. | Any entity with a bank license | B | | Sums placed by banks for issuing drafts | Capital reserves | Amount received by correspondent banks | D | ### Correct Answers for Paid-Up Capital and Reserves, Loans Taken from NaBFID by Scheduled Banks, and Loans Taken From Foreign Banks | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Paid up capital and reserves | Deposits from customers | Securities issued on the open market | B | | Loans taken from NaBFID by scheduled commercial banks | Loans taken from NaBFID by non-scheduled banks | Loans taken from foreign banks | A | ### Correct Answers for Claims from Invoking ECGC Guarantees, Subsidy Exempted from NDTL, and Investment Tax Credits | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Claims from invoking ECGC guarantees | Claims from the DICGC | Verification expenses pending reimbursement | B | | Zero percent interest time deposit | Investment tax credits | Cash grants from the government | B | | Excluded from calculations | Reclassified as deposits | Included as assets | B | ### Correct Answers for Effect of Borrowing from RBI on NDTL, Maximum Commission on Shares Issued, and Reserve Fund Transfer | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | It is included in net liabilities | It decreases net income tax provision | It increases liabilities | A | | 1.50% | 3.00% | 5.00% | A | | 25% | 15% | 30% | B | ### Correct Answers for Shareholding Percentage, Reserve Bank Power to Control Advances, and Scrutiny of Interest Rates | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | 35% | 20% | 25% | A | | Section 19 | Section 21A | Section 22 | A | | Yes, always | Yes, under specific conditions | No, they are not subject to scrutiny | D | ### Correct Answers for Loan Security, Unencumbered Securities, and Repo | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Holding them as a pledgee | Selling at a loss | Granting loans on their security | D | | 20% | 18% | 25% | C | | Unencumbered dated securities of the Government of India | Debentures not secured by government securities | Corporate bonds | B | | Funds borrowed under repo | Dated securities | Government treasury bills | B | | 50% | 35% | 40% | D | ### Correct Answers for Maintaining Investments, Holding of Securities Classified Under HFT Sub-Category, Investments in Subsidiaries, Associates and Joint Ventures, and Reclassifying Investments | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | In Subsidiary General Ledger (SGL) accounts | In physical stock certificates | In savings accounts | B | | State development loans | Corporate bonds | Cash management bills | D | | Biannually | Monthly | Annually | A | | Weekly | Quarterly | Daily | D | | Acquisition cost | Fair value | Market value | B | | Approval from their Board of Directors | Approval from external auditors | Approval from the Department of Finance | B | ### Correct Answers for Five Percent Regulatory Limit on HTM Sales, Evaluating Investments, and Investment Classification When an Investee Ceases to be a Subsidiary, Associate, or Joint Venture | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | 20 percent | 10 percent | 15 percent | A | | Sales under liquidity management operations of RBI | Sales of bonds with high interest rates | Sales of equities | B | | Annually | Weekly | Monthly | A | | It must be sold immediately | It is reclassified to the respective category | It remains in the same category | C | ### Correct Answers for NABARD Headquarters, Minimum Paid-Up Capital for a Commercial Bank, and Minimum Paid-Up Capital for Payment Banks | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Mumbai | Delhi | Bangalore | B| | NABARD | Exim Bank | IDBI | B | | ₹5 billion | ₹10 billion | ₹1 billion | B | | ₹100 crore | ₹200 crore | ₹50 crore | B | ### Correct Answers for Maximum Voting Rights for a Single Shareholder, Minimum Ratio of Capital, Minimum Capital Requirements for SFBs, Duration for Preserving Cheques, and Payment Period under MSME Act | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | 10% | 15% | 5% | B | | 2:1:1 | 4:2:1 | 5:3:1 | C | | ₹200 crore | ₹100 crore | ₹500 crore | B | | 8 years | 5 years | 3 years | B | | 30 days | 60 days | 90 days | A | ### Correct Answers for Interest Types, Credit Guarantee Scheme, and Committee Responsible for Examining Adequacy of Institutional Credit to the SSI Sector | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Simple interest | Compound interest at three times the principal | Compound interest at two times the market rate | C | | Micro and Small Enterprises Facilitation Council | Small Industry Development Corporation | National Credit Guarantee Trustee Company | B | | Ganguly Committee | Nayak Committee | Kapur Committee | C | ### Correct Answers for Recommended Limit for Collateral-Free Loans, Standby Credit Facility, and Bank's Action if a Loan Application is Rejected | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Rs. 10 lakh | Rs. 15 lakh | Rs. 7 lakh | B | | Standby credit facility | Personal loans | Credit cards | B | | Explain the reasons for rejection in writing | Banks must convey in writing the main reason for loan application rejection within the Board approved sanction time norms. | Shri V.K.Sharma Working Group | A | ### Correct Answers for Objectives of High-Level Committee on Credit to the SSI Sector, Confidentiality of Credit Related Information, and Factors to Consider When Expanding Credit Limits | AnswerB | AnswerC | AnswerD | CorrectA | |---|---|---|---| | Shri V.K.Sharma Working Group | To assess the flow of credit to the MSE sector | To eliminate small business loans | D | | Display of credit timelines and document checklist prominently | All credit related information pertaining to MSMEs shall be displayed prominently on the bank’s website. | Removal of all credit information | B | | Changes in demand patterns | Banks should consider changes in the demand pattern of MSE borrowers when increasing credit limits. | Changes in demand patterns | D | ### Correct Answers for Maximum Guarantee Coverage Limit,