GENERAL QUERIES

Q.1 Which ministry of Government of India decide permissibility of goods for export
from india and import in to India?

1. Ministry of Commerce
2. Ministry of Finance
3. Ministry of External Affairs
4. Ministry of Micro, Small and Medium Enterprises

Correct Answer – 1

Explanation: Please refer the Foreign Trade Policy 2015-20

Q.2 What do you understand from 'Drawal of Foreign Exchange' in context of the FEMA

1. Funds withdrawn in foreign currency from Bank Account with A D Bank by NRI
customer
2. Foreign Exchange purchased for permitted transaction under FEMA from Authorised
Person in India
3. Foreign Currency or Foreign Currency Travellers Cheque purchased by authorised
person from visiting foreign tourist
4. Drawing funds from RBI from IMF (International Monetary Fund)

Correct Answer – 2

Explanation: Please refer Section 3, 4 and 5 of FEMA

Q.3 Which of the following departments of RBI issue direction under FEMA?

(a) Foreign Exchange Department

(b) Department of Banking Regulations
(c) Financial Markets Operations Department
(d) Financial Market Regulation Department
1. (a) and (c)
2. (b) and (d)
3. (a) and (d)
4. (c) and (d)

Correct Answer – 3

Explanation: Please refer AP(Dir) Circulars issued by RBI

Q.4 Authorised Person comprise of ....................?

1. Only Authorised Dealer-I

2. Only Authorised Dealer-II
3. Only Authorised Dealer-III
4. All the above

Correct Answer – 4

Explanation: Please refer S.2(c) of FEMA

Q.5 Who decides charge for Foreign Exchange services rendered by in AD Category-I
banks in India?

1. RBI
2. FEDAI
3. Banks are free to determine charges for their Foreign Exchange Services
4. Banking Code and Standard Board of India (BCSBI)

Correct Answer – 3

Explanation: Please refe FEDAI Circular SPL-79/99 dated 28 September 1999

Q.6 In the case of an import LC, commission charges and out of pocket expenses are
recovered from importer as prescribed by

1. RBI
2. FEDAI
3. Respective Individual Bank
4. None of the above

Correct Answer – 3

Explanation: Please refe FEDAI Circular SPL-79/99 dated 28 September 1999

Q.7 FEDAI is an association of

1. AD I
2. AD II
3. a and b above
4. all banks in India

Correct Answer – 1

Explanation: FEDAI is Non-profit Company registered under section 25 of Companies Act

and all AD-I category banks are member of it

Q.8 Which one of the given options is not a function of the FEDAI?

1. Publishing average rates of identified nine foreign currencies for the use in
compliance to AS-11 (Accounting Standard)
2. Publishing daily foreign exchange turnover data
3. Publishing month end Revaluation Rate for important foreign currencies
4. Publishing 'Base Rate' for FCNR Deposits on the last working day of every month

Correct Answer – 2

Explanation: Refer topic 'Rates' FEDAI Home Page of FEDAI Website www.fedai.org.in. Daily
foreign exchange turnover data is published by the RBI

Q.9 Each of the tangible goods is represented by unique ITC HS Code. Where could one
check, whether the goods with given HS Code is permitted for import in to India?

1. Foreign Trade Policy 2015-20 (Chapter 1 to Chapter 9)

2. FTP Handbook of Procedure Volume -I
3. FTP Handbook of Procedure Volume -II
4. None of these

Correct Answer – 3

Explanation: Refer FTP Handbook of Procedure Volume -II as notified by the Department of
Commerce, Director General of Foreign Trade on 01 April 2015
Q.10 Which document is known as 'Document of Title of Goods'?

1. Airway Bill issued by Airlines

2. Shipping Bill issued by Customs Department
3. Bill of Lading issued by Shipping Company.
4. Bill of Exchange (Hundi) drawn by seller

Correct Answer – 3

Explanation: The 'Airway Bill' is not negotiable and 'Shipping Bill' or 'Bill of Exchange'
does not hold title of goods

Q.11 To which forum any dispute between two Fx Market Participant Banks related to
FEDAI Rule No. 8 'Interbank Settlement' is required to be referred?

1. Reserve Bank of India

2. FEDAI (Foreign Exchange Dealers' Association of India)
3. FEBAI (Foreign Exchange Brokers' Association of India)
4. FBIL (Financial Benchmark India Pvt. Ltd.)

Correct Answer – 2

Explanation: Please refer FEDAI Code of Conduct

Q.12 What is Central Counter Party (CCP) in context of clearing and settlement functions
for transactions in Money, G-Secs, Foreign Exchange and Derivative markets?

1. Central Bank of country such as RBI in India, is called CCP

2. An entity e.g. CCIL in Indian which provides clearing and settlement services for
transactions in Money, G-Secs, Foreign Exchange and Derivative markets.
3. Industry body like FEDAI which forms the rules for Fx Market in India is known as
CCP.
4. None of above

Correct Answer – 2

Explanation: Please refer the Consultaive Report of Technical Committee of the IOSCO
March 2014, issued by Bank of International Settlement and RBI Circular DBOD.No.
BP.BC.82/21.06.217/2013-14 dated January 07, 2017
Q.13 What are the SCHOMET Items (Special Chemical, Organism, Material, Equipment
and Technology) as indicated in Appendix-3 of Schedule 2 of ITC(HS) Classification
of export & Import Items under FTP?

1. Exporters of these items are entitled to special incentives under Foreign Trade Policy
2015-20
2. Items for which duty free import in India is allowed
3. These are items in negative list for which trade (Export or Import) is not permitted.
4. Trade (Export or Import) in these items require specific authorisation under Foreign
Trade Policy 2015-20

Correct Answer – 4

Explanation: Please refer to Foreign Trade Policy Handbook of Procedure

Q.14 Who imposes sanctions by notifying name of SDN (Specially Designated National) in
the list popularly known as OFAC List (Office of Foreign Assets Control)?

1. UNO - United Nations Organisation

2. USA - United States of America
3. EU - European Union
4. FATF - Financial Assets Task Force

Correct Answer – 2

Explanation: Please visit OFAC Website www.treasury.gov/

Q.15 What among the following statements is not true in context of the Marine Insurance
Policies (MIP)?

1. Benefit under MIP could be assigned to third party with concurrence of issuer
2. MIP is contract of indemnity
3. MIP is transferable instrument under Negotiable Instrument Act
4. MIP could either be issued on per consignment basis or for consolidate amount &
period covering all consignment within given amount & period

Correct Answer – 3

Explanation: Please refer definition in the Section 13 of Negotiable Instrument Act 1881
Q.16 Under the FTP 2015-20, the date of shipment (DoS) is reckoned in terms of Para 9.11 of
Handbook of Procedure. Which of the following is not true in context of the policy

1. DoS in case of Sea Shipment – date of issuance of Bill of Lading

2. DoS in case of shipment by Air – Date of relevant Airway Bill
3. DoS in case of landlocked Country – Date of dispatch of goods by rail, road or other
recognised mode of transport to consignee
4. DoS in case of Post Parcel – Date stamped by office of dispatch on the packet or
Dispatch Note

Correct Answer – 1

Explanation: Please refer Para 9.11 of Handbook of Procedure FTP 2015-20

Q.17 In context to regulation applicable to international trade of goods (Export or Import)

in India, IEC stands for .........?

1. International Exchange of Currency

2. Importer Exporter Customs number issued by Customs Department
3. It is Indian Economic Classification Code issued by Export Inspection Agency of
India
4. It is Importer Exporter Code issued by Director General of Foreign Trade

Correct Answer – 4

Explanation: Please refer Para 1.11 and 2.05 of FTP 2015-20

Q.18 The DGFT vide Trade Notice No. 09 dated 12.06.2017 informed that with onset of
GST, PAN Number of entity will be used for the purpose of IEC. Does the
requirement of registration and obtaining of IEC Number from DGFT still hold good
with change of guidelines?

1. Yes, DGFT shall continue with issuance of IEC Number and that number will be
same as PAN Number of the entity
2. No, new exporter/importer can use the PAN Number without approaching DGFT for
obtaining IEC Number
3. Exporter/Importer can use PAN number as IEC number and inform DGFT
subsequently.
4. Banks can allow customer to use PAN number in lieu of IEC and report to DGFT.

Correct Answer – 1

Explanation: Please refer the Trade Notice No. 09 dated 12.06.2017 issued by the Joint
Director of Foreign Trade, DGFT, Ministry of Commerce, New Delhi

Q.19 SWIFT Message Types, Message Fields, Field Specifications are standardised and
convey definite meaning. Message type x95 Series (Like MT195, MT795 or MT995) are
used for raising queries. Which MT message series is used for replying MTx95
message?

1. MT x99 Messages (Like MT199, MT799 or MT999)

2. There is no MT Series for Answer messages
3. MT999 for all series query messages
4. MTx96 Messages (Like MT196, MT796 or MT996)

Correct Answer – 4

Explanation: Please refer SWIFT User handbook. Limited information is available on

www.swift.com
Q.20 Which of the following is a financial document? (A) Invoice, (B) Bill of Exchange, (C)
Airway Bill and (D) Promissory Note

1. B and D
2. B only
3. A only
4. C only

Correct Answer – 1

Explanation: Please refer Article 2(b) of URC 522

Q.21 What does FATF stands for and what role this organisation plays?

1. Financial Assets Trust Forum, provides rating to financial assets on sale

2. Financial Assets Trust of America, they monitor Anti Money Laundering Activities all
over the world
3. Financial Action Task Force, recommend measures for prevention of money
laundering, monitor progress made in jurisdiction across the globe and classified
countries on certain parameters
4. Financial Action Task Force, they investigate financial crimes in coordination of
various jurisdictions across the globe and classified countries on degree of global
cooperation

Correct Answer – 3

Explanation: Please visit website www.fatf-gafi.org

Q.22 The DGFT issues License at the request of business entities. Which statement is true
in context of this statement?

1. License is only issued for Export by DGFT as per FTP

2. License is only issued for import by DGFT as per FTP
3. License is issued for both export and import by DGFT as per FTP
4. License is issued by Commissioner of Customs for export or import as per FTP

Correct Answer – 3

Explanation: Please refer FTP 2015-20

Q.23 Execution and acceptance of Bill of Exchange is subject to levy of stamp duty under
Indian Stamp Act 1899. Why does A D Bank not insist for stamp duty while handling
or negotiating Bill of Exchange drawn by exporter in relation to an export transaction?

1. Since the Bill of Exchange is accepted at overseas place by non-resident buyer

2. Since the Bill of Exchange is drawn in Foreign Currency
3. Since Bill of Exchange drawn by exporter in relation to an export transaction is
exempted
4. Since the Bill of Exchange drawn order the drawee to pay the A D Bank

Correct Answer – 3

Explanation: Please refer Government of India, Ministry of Finance Notification SO No.

804(E) Dated 08 July 2014

Q.24 An AD Bank receives remittance from Non-resident person to be placed as security

deposit with Indian company (Beneficiary) under requirement of Companies Act 2013
for election of Board of Directors. What action shall AD Bank take?

1. Bank may credit the amount to beneficiary account

2. Bank should insist for permission of Registrar of Companies
3. Bank should refer the matter to RBI
4. Bank should return funds back as none other than the A D Bank can accept deposit
from non-resident person

Correct Answer – 1

Explanation: Please refer RBI AP(Dir) Circular No. 59 dated April 13, 2016. Also refer FEMA
Regulation 5(R)/2016-RB dated April 1, 2016

Q.25 Which of the following countries is not a member of European Union?

1. Switzerland
2. France
3. Germany
4. Italy

Correct Answer – 1

Explanation: Please visit European Union webpage (https://europa.eu/european-

union/about-eu/money/euro_en)
Q.26 In general, what do you understand from R-return reporting by AD Bank to RBI in
context to foreign exchange?

1. Reporting of export bill returned unpaid

2. Reporting of Remittances Returned
3. Reporting of each entry in Nostro or Vostro representing funds received in or sent
out, including transfer from one bank to another bank
4. It is reporting of only all merchant transactions where bank either sale or purchase
foreign currency

Correct Answer – 3

Explanation: Please refer direction resting with AP (Dir Series) Circular No. 77 dated March
13, 2004

Q.27 Is ECGC, export risk underwriting company, also providing without recourse export
factoring services?

1. Yes
2. No, it is export financing and none other than commercial banks are allowed to offer
export finance
3. In India, any entity can provide export factoring services under Indian Companies Act
2013
4. No, factoring is not permitted for export

Correct Answer – 1

Explanation: Please visit following link (www.ecgc.in/wp-

content/themes/pcwebecgc/images/pcECGPagePDF/Factoring/Factoringdoc.pdf)

Q.28 What is Free Trade Warehouse Zone (FTWZ)?

1. It is second name of customs bonded warehouse

2. It is warehouse provided to overseas business coming to India for exhibition
3. It is a special category of SEZ, focussed on trading and warehousing
4. It is warehouse of exporter outside Indian territory

Correct Answer – 3

Explanation: Please refer definition under Section 2(n) of SEZ Act 2005 and SEZ Rule 18(5)
Q.29 What is the criterion for granting Status Holder Certificate under Foreign Trade
Policy?

1. Total export turnover calculated on FOB Basis

2. Net foreign currency earning i.e. export earning less import expenses
3. Total export turnover calculated on CIF Basis
4. Incremental export turnover

Correct Answer – 1

Explanation: Please refer DGFT Notification No.04 dated 29 April 2016

Q.30 Goods imported in to India can only be unloaded at customs notified area, that is
............................... and delivery can be taken by filing of Bill of Entry?

1. Sea Port and Airport

2. Inland Container Depot
3. Land Customs Stations
4. All of these

Correct Answer – 4

Explanation: Please refer Para 7, Chapter 8 of FEDAI Book No.6

Q.31 Benchmark Interest Rate MIBOR as declared by Financial Benchmark India Limited,
stands for.......?

1. Mumbai Interbank Overnight Rate

2. Mumbai Interbank Outright Rate
3. Mumbai Interest Overdue Rate
4. Mumbai Interbank Offer Rate

Correct Answer – 2

Explanation: Please refer webpage www.fbil.org.in home page option TERM MIBOR
Q.32 Which country is member of European Union but not adopted Euro as their currency

1. Spain
2. Belgium
3. Netherland
4. Denmark

Correct Answer – 4

Explanation: Please refer webpage https://europa.eu/european-union/about-eu_en

Q.33 Which one of the following action of bank is not influenced by FEDAI Guidelines or
instructions?

1. Issuing of eBRC
2. Issuing of eFIRC
3. Display of Fx. Card Rate for public notice
4. None of these

Correct Answer – 1

Explanation: eBRC is issued as per Foreign Trade Policy and instructions of DGFT. Please
refer FAQ issued on eBRC by DGFT and available at www.dgft.gov.in.

Q.34 The Banking Ombudsman receives a complaint from person resident outside India
against an AD Bank on delay in credit. Can the complaint be taken on board for
redressal of grievance under the Ombudsman Scheme?

1. No, complaint related to foreign exchange is dealt only by FEDAI

2. No, the Banking Ombudsman Scheme is available only for residents
3. Yes, the ombudsman will dispose of complaint on merits
4. No, only NRI and PIO out of non-resident person can lodge complaint under the
scheme

Correct Answer – 3

Explanation: Please refer the scheme available on following link

https://rbidocs.rbi.org.in/rdocs/Content/PDFs/BOS2006_2302017.pdf