CHAPTER 10

MANAGEMENT OF BANKING INSTITUTIONS OBJECTIVE QUESTIONS

Complete the sentences by filling the gap using the right word/phrase from the choices given under each question. 1. Section 5 (3) (b) of __________________________defines banking as the accepting, for the purpose of lending or investment, of deposits of money from the public, repayable on demand or otherwise, and withdrawable by cheque, draft, order or otherwise. (a) Reserve Bank of India Act 1934 (b) The Banking Regulation Act 1949 (c) Companies Act, 1956 (d) Securities Contract Act, 1956 2. The minimum capital requirement to start a banking company is Rs 200 crore. (a) Rs.200 crore (b) Rs.100 crore (c) Rs.150 crore (d) Rs.300 crore

3. NBFCs applying for conversion to banks should have a credit rating of _______ or its equivalent in the year before they apply to RBI to conversion into commercial banking venture (a) BBB (b) AA (c) P1 (d) AAA

4. While shifting a branch outside the block the banks should ensure that branches being shifted are in existence for __________ or more and are incurring losses consecutively for the last three years; (a) three years (b) six years (c ) five years (d) ten years

5. However, under exceptional circumstances banks may approach RBI for permission to close their rural branch together with the _________ approval. (a) DCC (b) MoF (c) Lead Bank (d) Banks Board with the provisions of

6. While appointing CMD banks should comply Section___________of Banking Regulations Act. (a) 10 (d) (b) 10 (b) (c) 10(a) d) 10(c)

7. Normally the appointment of the CMD is for a maximum period of _________. 1

(a) one year (b) two years (c ) three years

(d) five years

8. Section 255 of the _______________________ stipulates that unless the Articles of Association of the company provide for retirement of all directors, not less than two third of directors should retire by rotation. The retired directors are eligible for re-election.

(a) Companies Act 1956 1999

(b) BR Act 1949

(c) RBI Act 1934

(d) SEBI Act

9. Category __________branches are maintaining the foreign currency positions, accounts with correspondent banks and dealing and trading in foreign currencies. (a) All (b) A (c) B (d) C

10. ___________ enables the banks to generate various returns under MIS without depending up on the branches for the figures (a) ATM (b) CBS (c) EDP (d) RRB

State whether the following statements are TRUE or FALSE

11. The banks need not approach RBI every time for opening of branches. 12. Call Centres entertain any direct transaction with customers or they undertake any banking transaction 13. A business facilitator can disburse small loans up to a certain limit 14. Banks can appoint Post Offices as business correspondent.

15. Banks are now permitted to deliver cash at the premises of the customer but are mot permitted to collect cash from the premises of the customer. 16. RBI has permitted banks to shift their branches from once location to another location in the same centre without their approval 17. A branch located in underbanked district can be shifted to another centre in an underbanked district only.

18.Any allotment of securities shall be void if permission for listing is not granted by all the stock exchanges before expiry of 10 week from the closure of the issue.

19. Banks are permitted to convert their general category branches into special category branches and vice versa freely without the prior approval of RBI. 20. Banks ca open extension counters in institutions like schools, colleges etc. without the prior approval of RBI. 21. Banks can merge the urban/metropolitan branches with out seeking approval from RBI 22.The director of a company can hold the post of CMD in a bank. 23. Directors of public sector banks are appointed by the Government of India in consultation with RBI.. 24. The Zonal office of a bank is under their regional offices.. 25. Company Secretary is statutorily responsible for sending various reports to SEBI, Company Law Board etc.

Answer Key 1. (b) 5. (a) 9.(b) 2. (d) 6. (b) 10.(b) 3. ( d) 7. (d) 4. (c) 8 (a)

11. TRUE 15 FALSE 19 TRUE 23. TRUE

12. FALSE 16 TRUE 20.TRUE 24.FALSE

13 FALSE 17 TRUE 21. TRUE 25. TRUE

14 TRUE 18 FALSE 22. FALSE