Banking Management - a Cheque Drawn for Rajkumar or Order Is Stolen. the Thief Made Endorsement as Rajkumar on the Cheque in His Favour

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Banking Management

Q 1) Account holder X draws a cheque for Rs. 5,000 favouring Rajesh ( a minor aged 13 years ) or, bearer. Rajesh presents the cheque on counter duly signed on the back. What should the banker, do with the cheque of a minor?

(a) reafuse, since no contractual capacity

(b) pay the cheque after inquiring with X

(c) pay to Rajesh without any responsibility of bank

(d) ask Rajesh to bring his parents

(e) Section 26 N.I. Act, 1881, does not allow minor to receive payment

Q.2) payment in `due course` means?

1. on the due date
2. in accordance with apparent signature and specimen
3. in accordance with apparent tenor
4. due to sufficient funds

Q.3) One of the following statements in not true in the right of set-off?

1. set-off means partial or total merging of a claim of one person against another in a counter

claim of the latter against the former.

1. Both debts must be for certain sum.
2. A debt accruing due cannot be set-off.
3. A banker can set-off the credit balance in the guarantor’s account before the liability of the,
   guarantor to the bank is determined.

Q.4) Does RBI have the power to control or influence directly or indirectly the interest  rates of banks in India and if so, in what manner and to what extent?

Q.5) `Overseas Depository Bank` means?

1. a bank authorized by the issuing company to issue Global Depository receipts against issue,

of Foreign Currency convertible Bonds or ordinary shares of the issuing company.

1. A bank authorized by the government to issue Global Depository receipts against issue of,

Foreign Currency Convertible Bonds or ordinary shares of the issuing company;

1. A bank authorized by the issuing company to issue Global Depository Receipts against receipt of foreign Currency;
2. A bank where deposits in foreign currencies can be made

Q.6) The retail loans given by commercial banks are generally for duration of?

1. Five to seven years with housing loans granted for a longer duration of 15-20 years
2. Less than 5 years only
3. Less than 1 year only
4. None

Q.7) A revolving Letter of Credit is one which provides that the amount  of drawing stipulated in it will be available to the beneficiary:

1. Again and again as may be agreed between the buyer and the seller within a stipulated period.
2. Any number of times
3. Only one once
4. Non

Q.8) As per Basel II Framework, the total of Tier 2 capital is permitted up to a maximum of:

1. 100 per cent of Tier 1 capital
2. 250 per cent of Tier 1 capital
3. 80 per cent of Tier 1 capital
4. 50 per cent of Tier 1 and Tier 3 capital

Q.9) When the holder of an order Cheque sign on the back of it, without specifying the person to whom the amount is to be paid, it is called

1. Full endorsement
2. Partial endorsement
3. Conditional endorsement
4. Restrictive endorsement
5. Blank endorsement

Q.10) Difference between cash budget and cash flow

1. Cash flow deals with cash and non-cash funds.
2.  Cash budget deals with cash transactions only.
3. Cash flow statements are generally for quarterly of half-yearly while cash budgets are for shorter periods.
4. Cash budget is a projection into the future while a cash flow statement is historical.
5. Any of the above

Q.11) Loan against minor’s term deposit

1. Can be granted if the documents are signed if the minor has completed the age of 14 years
2. Cannot be granted under any circumstances as the minor does not have the contractual capacity
3. Can be granted to the guardian of the minor, if it is for the necessities of the minor
4. Can be granted only with the permission of the Court.

Q.12) Impact of IT on banks can be

1. Change in organizational structure
2. Change in organizational orientation
3. Change in service delivery  channel
4. Change in customer aspiration
5. All of the above

Q.13) A medium enterprise in service sector is one,

1. Where the investment in equipment is more than Rs.3 crore but does not exceed Rs 10 crore
2.  Where the investment in equipment is more than Rs.2 crore but does not exceed Rs 10 crore
3. Where the investment in equipment is more than Rs.5 crore but does not exceed Rs 10 crore
4. Where the investment in equipment is more than Rs.2 crore but does not exceed Rs 5 crore

Q.14) Ritesh issued a cheque at 3:30p.m. (one hour after close of business hours of the bank ) to Shubha. Shubha approached to the bank and on request paid the money at 4:00 p.m. as late payment; Ritesh arrived to the bank and stopped payment of cheque issued to Shubha at 4:30 p.m. on the same day. Who is liable for loss?

1. Payment after business hours is not a payment in due course hence bank is liable, Section 10 N.I. Act.
2. Payment even though after business hours but within banking hours is protected under Section 31.
3. Payment late for today is protected under Section 85.
4. Refused to accept stop payment instructions since late for today.

Q.15) After close of business hours by 1.30 hrs. the account holder himself availed payment. At 4.15 p.m. (after close of 1.45 hrs) income tax attachment order is received by bank. What would be the liability of paying bank?