Mock test Diploma in Banking & Finance ,JAIIB

PAPER 1 - PRINCIPLES & PRACTICES OF BANKING

Time: 30 minits Marks : 30
1. All 60 Questions to be attended.
2. There will be negative marking for each 4 wrong answers, one mark will be deducted from the marks
obtained.
3. Please mention right answer by tick.

1. Call Money means money lent/borrowed between banks and entities like PDs for _____.
a. 1 day

b. 2-14 days

c. More than 14 days

d. None of these

2. BCSBI has been set up on the recommendations of _____ Committee.

a. Jankiraman

b. Narasimhan

c. Tarapore

d. Rangarajan

3. Which of the following products in retail banking do not fall under retail deposit products?
a. no frill accounts

b. deposit accounts of senior citizens

c. depository services

d. all the above

4. Inter-Bank Term money means, borrowings among banks for _____.

a. 1 day

b. 2-14 days

c. more than 14 days

d. None of these
5. Under forfaeiting, the exporter is able to transfer _____ risk.
a. Credit

b. Political

c. Interest Rate

d. All the above

6. CPs are issued normally for a tenure of_____.

a. 30 Days

b. 60 Days

c. 90 Days

d. 120 Days

7. The validity period of SEBI's observation letter for IPO offer document is_____.
a. 1 month

b. 2 months

c. 3 months

d. 6 months

8. Reforms in the financial services sector were initiated on the recommendations of _____
Committee.
a. Jankiraman

b. Narasimhan

c. Tarapore

d. Rangarajan

9. Which of the following is value added service as part of wholesale banking?

a. structured finance

b. channel financing

c. supply chain management

d. letter of credit
10. Treasury bills are issued for a period of up to_____.
a. 31 days

b. 91 days

c. 182 Days

d. 364 days

11. Notice Money means money lent/borrowed between banks and entities like PDs for _____.
a. 1 day

b. 2-14 days

c. More than 14 days

d. None of these

12. Coins are issued by ____.

a. RBI

b. Govt of India

c. both a and b

d. None of these

13. The negotiable financial instrument which is traded on a stock exchange of another country
but represents security issued by foreign listed company is called _____.
a. buyers credit

b. depository receipt

c. cross listed stock

d. participatory note

14. Universal Banking means _____.

a. International Banking

b. Wholesale Banking

c. Offering multiple Financial Products

d. All of the above

15. Which is not a major promoter of CIBIL?
a. HDFC

b. SBI

c. RBI

d. Trans Union International Inc.

16. Normally what type of movement is seen in interest rate with change in bank rate by RBI?
a. if bank rate is reduced, interest rate of Banks increase

b. if bank rate is increased, interest rate of Banks decrease

c. if bank rate is reduced, interest rate of Banks decrease

d. if bank rate is reduced or increased, there is no change in the interest rate of Banks

17. Which one is not a fund based service?

a. Short term finance

b. Letter of Credit

c. Bill discounting

d. Export credit

18. Which of the following can't be included in the definition of "Financial Intermediary"?
a. Financial Institutions

b. Banks

c. NBFC & Mutual Funds

d. None of these

19. In strategic Alliance, the alliance partners ______.

a. Merge with each other

b. One partner acquires the other

c. Remain separate entities

d. None of these
20. Which of the following is an important reason for regulation of banking system?
a. to promote confidence of public in banking system

b. to protect interest of the investors

c. to regulate the govt policies

d. to regulate the functioning of banks.
e. both A and D

21) Reserve Bank of Indias functions are classified into:

a) Supervisory & Regulatory

b) Promotional & Developmental
c) Refinance Activities
d) All of the above

22) Minimum Bank Rate is:

a) 3%
b) 4%
c) 5%
d) None

23) KYC means

a) Know Your Customer very well

b) Know Your existing Customer very well
c) Know Your prospective Customer very well
d) Satisfy yourselves about the customers identity and activities.

24) Hypothecation is applicable in the case of

a) Movable goods
b) Immovable property
c) Book debts
d) Corporate guarantee

25 ) A cheque is dated 12/05/05.the due date is:

a) 12/08/05
b) 14/09/05
c) 12/11/05
d) None

26) Charge created on LIC Policy is:

a) Hypothecation
b) Pledge
c) Assignment
d) Mortgage

27) Your bank grants a working capital finance to ABC & Co, a partnership firm, against
hypothecation of inventory. The charge is to be registered with Registrar of Companies within

a) 30 days from the date of advance

b) 30 days from the date of hypothecation agreement
c) 30 days from the date of sanction of loan
d) None
28 ) Which one of the following is not barred by law of limitation?

a) Pledge
b) Hypothecation
c) Bankers lien
d) Guarantee

29) Bancassurance is

a) An insurance scheme to insure bank deposits

b) An insurance scheme to insure bank advances
c) A composite financial service offering both bank and insurance products
d) A bank deposit scheme exclusively for employees of insurance companies

30) John & James are friends aged 14 & 15 respectively. They want to open a joint account in
your bank. You will

a) Allow them to open a joint account to be operated jointly

b) Allow them to open a joint account with operating instructions Either or Survivor
c) Allow them to open a joint account with operating instructions Former or Survivor
d) Allow them to open a joint account with operating instructions Any one or Survivor

31) Mr.Atmaram as director of a Ltd company expired. Bank received a cheque signed by
Mr.Atmaram as director of the Ltd company. The bank

a) Can honour the cheque only after obtaining confirmation from other directors
b) Can honour the cheque
c) Cannot hounour the cheque
d) The company should issue a stop payment instructions to the bank

32 ) Tele banking service is based on

a) Virtual Banking
b) Online Banking
c) Voice processing
d) Core Banking

33)The minimum percentage of Priority Sector advances to be maintained by foreign banks in

India 2019-20

A ) 40%
b) 18%
c) 32%
d) 60%

34) Loan to farmer against ware receipt up to Rs50 lac is covered under Prirority Sector as
----------- advances

a) Direct Agriculture
b) Indirect Agriculture
c) Self Employment Scheme
d) Allied to indirect Agriculture

35) Which of the following known as national bank :

a) RBI
b) SIDBI
c) NABARD
d) SEBI

36) As per FIMMDAs guidelines, the Mid-Office is responsible for:

a) Dealing activities
b) Risk Management
c) Reconciliation
d) Confirmation of deals

37) Interest is calculated on actual/365 days basis in respect of the following products, except
one :

a) Call Money
b) Notice Money
c) Term Money
d) GOI dated securities

38 ) Which was the first Mutual Fund started in India:

a) SBI Mutual Fund
b) Kotak Pioneer Mutual Fund
c) Indian Bank Mutual Fund
d) Unit trust of India

39) The regulator for Mutual Funds in India is:

a) FIMMDA
b) AMFI
c) RBI
d) SEBI

40 ) FIMMDAs general principles and procedures are applicable to:

a) Fixed Income Markets
b) Money Markets
c) Derivatives Markets
d) All of the above

41)Which of the following forms of business are permissible under BR Act:

a) Borrowing
b) Issuance of Letters of Credit
c) Buying and selling of bullion
d) All of the above

42 ) A Co-Operative Bank operating in different States are regulated by:

a) State Co-Operative Societies Act
b) Banking Regulation Act
c) Multi Unit Co-Operative Societies Act
d) Banking Laws (applicable to Co-Operative Societies)

43 ) In respect of Regional Rural Banks, the share holding pattern is:

a) Central Government 50%,State Government 35%,Sponsoring Bank 15%
b) Central Government 50%,State Government 15%,Sponsoring Bank 35%
b) Central Government 15%,State Government 35%,Sponsoring Bank 50%
b) Central Government 35%,State Government 50%,Sponsoring Bank 15%

44) A bank in India, wants to undertake capital market activities, it should:

a) Obtain special license from AMFI

b) Obtain special license from FIMMDA
c) Both a and b
d) Register with SEBI

45) FIMMDA stands for:a) Foreign Exchange Markets and Derivative Markets
b) Fixed Income Markets Money Markets and Derivatives Markets
c) Fixed Income Markets and Derivatives Markets
d) None of the above

46) Except one of the following others are known as Non Fund based facilities:

a) Letters of Credit
b) Bank Guarantees
c) Co-acceptance of Bills
d) Trust Receipt

47) Except one of the following others are part of Public Sector Banks:

a) State Bank of Hyderabad

b) Central Bank of India
c) Regional Rural Bank, sponsored by a nationalized bank
d) FEDERAL BANK

48). A computer Accounting system runs based on a set of instructions called the software
programmes developed by a person who is a computer software professional and he is
called -------
a) Programmer
b) Software Engineer
c) IT man
d) None of the above.

49. Accounting software may be written in any one of the computer languages such as
a) Windows, UNIX etc
b) JAVA C+ etc
c) COBOL, Foxpro etc
d) None of the above.
50. Computers are basically classified into
a) Analogue Computers and Digital computers
b) Hardware and software
c) Wipro and Infosysis
d) All the above
51. A Customer Service Meet should be organized at every Branch
a) Once in a Fortnight
b) Once in a Quarter
c) Once in a Month
d) Once in a Half-Year
52. Who cannot file a complaint under Consumer Protection Act?
a) Banks
b) State Government
c) Public Interest Litigation Group
d) Persons receiving services free of charge
 53 Banking Ombudsman is appointed by
a) Central Government / Ministry of Finance
b) State Government
c) IDBI
d) RBI

54). DRT has jurisdiction relating to cases pertaining to Banks, Financial Institutions with
debt
amount of
a) Rs. 1 lakh and above
b) Rs. 5 lakh and above
c) Rs. 10 lakh and above
d) Rs. 20 lakh and above

55 .Wholesale Banking refers to doing banking business with

a) Individuals
b) Industrial and business entities including government and public sector companies
c) Only companies registered under the Companies Act
d) Large borrowers irrespective of their category.
56. Participatory Notes are like contract notes issued by
a) Foreign Institutional Investors (FIIs) to entitites that want to invest in the Indian stock market but do not
want to register themselves with the SEBI.
b) Commercial banks to their investors.
c) Government of India to banks
d None
57. Factoring Service means;
a) Collection of bills
b) Discounting of bill
c) Maintain of account books
d) All the above.
58.) The minimum maturity period of certificates of deposit (CDs) with effect from April 29, 2005 is.
a) 8 days
b) 15 days
c) 21 days
d) None.
59. What relationship is created when the bank collects a cheque in clearing ?
a) Holder for value
b) Clearing member and principal
c) Agent and principal
D) Collecting bank and holder
60. In saving account deposits interest is paid on __________ balance in the account .
a) Maximum MONTHLY
b) Minimum montly
c) Average mothly
d) daily balance
ANS.1 A 2 C 3C 4C 5 D 6C 7C 8B 9B 10 D 11B 12B 13 B 14 C
15C 16 C 17B 18 D 19C 20D 1 D 22 D 23 D 24 A 25 D 26 C 27 D28 C 29 C30 A 31 B 32
C33 A 34 A 35 C 36 B 37 D 38 D 39D40 D41 D 42 C 43 B 44 D45 B46 D 47 D48 A 49 B 50 A 51C
52 D 53 D 54 C 55 B 56 A57 B 58 59C60D