Professional Documents
Culture Documents
CENTRAL OFFICE
KUMBAKONAM
KNOWLEDGE IS POWER . . .
1
UNIT-I LEGAL FRAMEWORK OF REGULATION OF BANKS
2
10 ----------exercises the central Reserve Bank.
banking function in India.
11 Company matters of a banking Authorities under the Companies
company are regulated by------------. Act.
12 Trading in shares and securities by SEBI.
banks is subject to regulation by-----
------
13 One of the essential characteristics
of banking is------------
14 Banking companies operating in
India are constituted in the form of-
--------------.
15 Companies Act applies to banking
companies------------------.
16 Under the reserve Bank of India Act
, Reserve Bank regulates acceptance
of deposits by---------------.
15 BR Act is applicable to co-operative
banks---------------.
16 “Corresponding new banks” means-
--------------.
17 Central Government may give
directions to the Reserve Bank when
considered necessary in public
interest only after consulting----------
18 A Co-operative society registered
under the Multi-State Co-operative
Societies Act-----------------.
19 A multi-state CO-operative bank
means a multi-state co-operative
society which is a ----------------.
20 For the purposes of the BR Act, a
“co-operative society” means a
society registered or deemed to have
been registered under--------------.
3
UNIT-II CONTROL OVER ORGANISATION OF BANKS
4
(vi) A banking company cannot hold False
shares in any other company other
than a subsidiary.
3(i) A director of a banking company Substantial interest
should not have-----------in any other
company.
(ii) At least---------------of the directors 51 per cent
should have the qualifications
prescribed under Section 10A(2) of
the BR Act.
(iii) When the board of a banking By lots
company is ordered to be
reconstituted under section 10A of
the BR Act, directors will be
removed-----------for the purpose of
reconstitution.
(iv) Before removing the chairman of a Give opportunity to being heard.
bank from office,Reserve bank has
to---------------.
(v) The provisions of Section 36AA of Overriding effect.
the BR Act regarding removal of
managerial personnel have-----------
over other laws.
(vi) Reserve Bank is authorised to Additional Directors
appoint---------under section 36AB
of the BR Act.
(vii) The----------has stipulated the 'fit RBI
and proper' criteria for directors of
banking companies.
4(i) The maximum period of office that True
may be held continuously by an
ordinary director in a banking
company is eight years.
(ii) The decisions of the board of False
directors, during the period when
the board's constitution is defective
shell be void.
(iii) The post of chairman of a banking True
company may be on part-time basis.
(iv) The chairman of a banking False
company can hold office only for a
maximum period of eight years.
(v) From the order removing chairman True
of a banking company,appeal lies to
Central Government within 30 days
5
of order.
(vi) Reserve Bank has the power to True
remove any officer or other staff of
a banking company under section
36M of the BR Act.
(vii) The concept of 'fit and proper' False
criteria for directors is not
applicable to public sector banks.
5.(i) Reserve bank may issue licence to a
banking company under section 22
of the BR Act subject to--------------.
(ii) Reserve Bank is not empowered to
cancel the licence granted to a
banking company on the ground
that ---------------.
(iii) A bank requires permission of the
Reserve Bank for opening a new
branch or shifting an existing
branch------------
(iv) In addition to the requirements as
to minimum capital and reserves
under section 11 of the BR Act,
Reserve bank--------------.
(v) In the case of banking company,a
shareholder cannot exercise voting
rights on poll------------.
6 Choose the correct statements from
the following
(i) There are no restrictions in the BR
Act on payment of dividend by
banking companies.
(ii) Before payment of dividend by a
banking company, all its capitalised
expenses, unless specifically
exempted under the BR Act, have to
be completely written off.
(iii) Banking companies are not
permitted to pay dividend above ten
per cent of net profits.
7(i) There are no specific qualifications
required for the directors of a
banking company
(ii) At least fifty-one per cent of the
directors of a banking company
should consist of persons with
professional or other experience as
6
provided in the BR Act.
(iii) At least fifty-one per cent of the
directors of a banking company
should be charted accounts or
experts in finance.
8(i) There is no provision for
maintenance of reserves by a
banking company under the BR
Act.
(ii) Every banking company has to
maintain a reserve fund and
transfer before declaring
dividend,not less than twenty per
cent of the profit to the reserve
fund.
(iii) The maintenance of a reserve fund
is optional for a bank.
9(i) The chairman of a banking
company has to be always on whole
-time basis and should be entrusted
with the management of the whole
of the affairs of the banking
company
(ii) The chairman of a banking
company can be on part-time basis
and a managing director can be
appointed on whole-time basis who
shall be entrusted with the whole of
the affairs of the banking company.
(iii) The chairman of a banking
company can be on part-time basis
and the whole of the affairs of the
banking company shall be entrusted
to a committee of the board of
directors.
10(i) A banking company can from
subsidiaries for undertaking any
business approved by its board of
directors.
(ii) A banking company can form
subsidiaries for undertaking any
business mentioned in section 6(1)
(a) to (o) of the BR Act, which is
permissible for a banking company
to undertake.
(iii) A banking company does not
7
require the permission of the
Reserve Bank to form a subsidiary
for doing banking business
exclusively outside India.
8
UNIT-III REGULATION OF BANKING BUSINESS
9
3(i) The amount transferable to the 20 per cent
reserve fund by the banks
incorporated in India is --------------
of the profit for each year.
(ii) Every banking company has to Last Friday of every quarter
maintain certain amount of assets
under Section 25 of the banking
regulation Act as at the -----------
(iii) The penalty which is payable by a 3 per cent over the bank rate
banking company which is a
scheduled bank for failure to
maintain the cash reserve in any
week for the first time is--------------
(iv) ---------------have to maintain cash Banking companies which are not
reserve under Section 18 of the BR scheduled banks.
Act.
(v) The liquid assets to be maintained Not inclusive
under section 24(2A) of BR Act are-
----------of the balances maintained
under section 42 of the RBI Act.
(vi) The payment of penalty under Civil court
section 24 of BR Act can be
enforced by making an application
before-------------
4(i) Only scheduled banks have a duty True
to maintain cash reserve under
section 42 of the Reserve Bank of
India Act
(ii) Every banking company has to True
maintain the liquid assets as
required under section 24 of the
banking regulation Act.
(iii) The share capital and reserves of a False
banking company form part of its
demand and time liabilities for the
purpose of section 42 of the RBI Act
(iv) The cash reserve required under False
section 42(1) of the RBI Act will be
a minimum of three percent of the
demand and time liabilities
(v) Interest is payable to scheduled False
banks on the cash reserve
maintained as required under
section 42(1) of the RBI Act.
(vi) No banking company incorporated False
in India is required to maintain
10
reserve fund under section 17(1) of
the BR Act.
5.1. The directions of the Reserve bank
issued to the banking companies
under section 35A of the banking
Regulation Act are--------------.
2 A contract if entered into by a
banking company with any party in
contravention of a direction issued
by the reserve bank-------------
3 Liquid assets are required to be
maintained in India under section
24 of the BR Act,may be held in the
form of-----------------
4 For the purpose of maintenance of
liquid assets under section 24 of the
BR Act,unencumbered approved
securities shall be valued at----------
5 The penal interest chargeable on a
banking company under section
under section 24(2A) of the Act------
---------
6. Choose the correct statement from
(i) following:
There are no restrictions on a
banking company against grant of
loans or advances on the security of
its own shares.
(ii) A banking company can lend to any
firm in which its director is a
partner.
(iii) A banking company is prohibited
from entering into any commitment
for granting loans or advances to or
on behalf of any individual in
respect of whom any of its directors
is a partner or guarantor.
7.(i) The power of the Reserve Bank to
control advances extends to
specifying the purposes for which
advances may or may not be made.
(ii) A direction ,regarding advances
may be issued by Reserve Bank to
banking companies generally and
not to any banking company in
particular.
11
(iii) A direction regarding advance can
be issued by the Reserve bank only
in the interest of banking policy and
on no other grounds.
8(i) The depositor of a banking
company can make a nomination in
the form prescribed under the
banking Companies(Nomination)
rules,1985.
(ii) There is no no form prescribed for
nomination by depositors under
Banking Companies (Nomination)
Rules, 1985
(iii) The nominee is entitled to receive
the proceeds of the deposit on
maturity of the deposit during the
lifetime of the depositor or later.
9(i) Banking Ombudsman is appointed
by the Government under the
Banking Regulation Act.
(ii) Banking Ombudsman is appointed
by the Reserve bank under the
banking Ombudsman scheme,2006
framed in the nature of directions
under the Banking Regulation
Act,1949.
(iii) Banking Ombudsman is appointed
by the Reserve Bank under the
Reserve Bank of India Act.
10(i) For maintenance of cash reserve
under section 42 of the RBI
Act,'demand and time liabilities' do
not include paid-up capital of the
banking company.
(ii) Loan taken from the Reserve bank
and Exim Bank are included in
'demand and time liabilities' under
Section 42 of the RBI Act.
(iii) Any loan taken by a regional rural
bank from its sponsor, forms part of
its demand and time liabilities for
the purpose of cash reserve under
section 42 of the RBI Act.
12
UNIT IV RETURNS, INSPECTION, WINDING UP
13
SL.NO QUESTION ANSWER
a----------after consultation with the
Reserve Bank for carrying out the
purpose of part IIC of the BR Act, in
relation to an acquired bank.
(iii) ------------may apply to the high court Reserve Bank.
for winding up of a banking
company under section 38 of the of
the BR Act.
(iv) The High Court shall order winding Pay its debts
up of a banking company if the
banking company is unable to ---------
------
(v) In a winding up proceeding the Be deemed to have filed claim.
depositors shall ---------for the
amounts shown in the books of the
bank standing to their credit.
(vi) The-------------may apply to the Reserve Bank
Central Government for an order of
moratorium in respect of a banking
company.
(vii) The provisions of a scheme of Have overriding effect on
amalgamation sanctioned by the
Central Government under section
45 of the BR Act will--------------the
provisions of other laws.
4(i) Central Government can acquire the False
undertaking of a banking company
under Section 36AE of the banking
Regulation Act in the interest of
banking policy without any report
from the Reserve Bank on the affairs
of the banking company.
(ii) The undertaking of an acquired bank True
may vest in the Central Government
or in any company or corporation as
directed by the Central Government.
(iii) On the application of Reserve Bank, False
the High Court may stay the
commencement or continuance of
proceedings against any banking
company for any period.
14
SL.NO QUESTION ANSWER
(iv) The Reserve Bank or State Bank or True
another person as specified by the
Reserve Bank in its application
before the High Court may be
appointed as liquidator of a banking
company.
(v) On winding up of a banking False
company, all the depositors as a class
get the first preference for payment.
(vi) The reserve bank may prepare a True
scheme for reconstruction or
amalgamation of a banking company
under Section 45 of the BR Act.
(vii) Making any false statement in a True
return or other document submitted
under the provisions of the BR Act is
punishable with imprisonment and
fine also.
5(i) A banking company has to prepare
its annual accounts in the forms-------
---------
(ii) A banking company has to submit
three copies of its accounts and
balance sheet together with auditor's
report-------------------.
(iii) The expenses incidental to a special
audit under section 30(1B) of the BR
Act shall be borne by ------------.
(iv) The balance sheet and profit and loss
account of a banking company, have
to be audited, as stipulated under
section 30 the banking regulation
Act, by------------------.
(v) Reserve bank shall cause on
inspection of a banking company, by
one or more of its officers--------------.
6 Choose the correct statements from
following
(i) Reserve Bank may publish, if they
consider in the public interest to do
so, any information obtained by them
15
SL.NO QUESTION ANSWER
under the BR Act in such
consolidated form as it thinks fit.
(ii) Reserve Bank may not publish any
information in whatever form
collected from a banking company in
exercise of the powers under the BR
Act.
(iii) Reserve bank may not publish
information obtained during
inspection of a banking company
even in a consolidated form.
7(i) Board of Financial Supervision is a
body established by the Government
under the provisions of the BR Act.
(ii) Board of Financial Supervision is a
body established under the Reserve
Bank of India Act for the supervision
of banks and financial companies.
(iii) Board of financial supervision is a
body established by the Government
for supervising the securities market.
8(i) The Reserve Bank may order
moratorium in respect of a banking
company when it is satisfied that
there is good reason to do so.
(ii) The Central Government may order
moratorium on its own motion when
it is satisfied that the financial
position of the banking company is
not satisfactory.
(iii) The Central Government may after
considering the application made by
the Reserve Bank for an order of
moratorium in respect of a banking
company, order moratorium staying
the commencement and continuance
of all actions and proceedings against
the banking company.
9(i) The High Court shall under section
38 of the BR Act order winding up of
a banking company if it is unable to
16
SL.NO QUESTION ANSWER
pay its debts.
(ii) The High Court shall under section
38 of the BR Act order winding up of
a banking company if the
Government makes an application
therefore under section 37 of the BR
Act
(iii) The High Court shall under section
38 of the BR Act order winding up of
a banking company if the
continuance of the banking company
is prejudicial to the interests of its
shareholders and the Reserve bank
applies to the court on that ground.
10(i) No provisions of the Companies Act
apply to the liquidator in the winding
up of a banking company.
(ii) All provisions of the Companies Act
apply to the liquidator in the winding
up of a banking company.
(iii) All provisions of the Companies Act
relating to liquidator, insofar as they
are consistent with BR Act, apply to
a liquidator of a banking company.
17
UNIT-5 PUBLIC SECTOR BANKS AND CO-OPERATIVE BANKS
18
Act shall be construed as reference to a co-
operative bank.
16 ------------in relation to a co-operative society, Director
for the purpose of BR At, includes a member of
any committee or body for the time being vested
with the management of the affairs of that
society.
17 The requirement of minimum paid-up capital Rs.1Lakh
and reserves for a co-operative bank to
commence or carry on banking business is ------
18 There are restrictions on co-operative banks on Holding of shares
----in other co-operative societies under Section
19 of the BR Act.
19 Central and State co-operative banks have to Reserve Bank and National
submit their returns under Section 31 of BR Act Bank
to----
20 Under Section 23 of BR Act. Without the Central co-operative Bank
permission of Reserve Bank a---------can open a
new place of business within the area of its
operation
21 Co-operative Banks have to prepare their Banking Regulation Act
balance sheet and profit and loss account in the
forms set out in the Third Schedule to ---
22 Banking Regulation Act was made applicable to True
Co-operative banks by the Banking
Laws(Application to Co-operative Societies)
Act,1965
23 A primary co-operative bank does not require False
licence from the Reserve Bank to carry on (RA-)
banking business
24 The provisions of the Banking Regulation Act as True
provided in Section 56 of the Act apply to co-
operative banks.
25 A‟co-operative Bank‟ means a primary co- True
operative bank, central co-operative bank and
state co-operative bank
26 There are no restrictions under the BR Act on False
lending by co-operative banks to their directors (RA-)
or firms in which they are interested.
27 A scheduled co-operative bank has to maintain True
cash reserve as stipulated in section 42 if the
Reserve Bank of India Act(as applicable to co-
operative societies)
28 Inspection of co-operative banks is done by the False
State Government under the co-operative (RA-)
societies Act and the Reserve Bank has no
19
power to inspect under the Banking Regulation
Act.
29 State Bank may act as agent of the Reserve
Bank----------
30 ----------shall be the ex-officio chairman of the
subsidiary banks
31 The thrust of business of regional rural banks is
to make loans d advances available „in rural
areas‟
32 Nationalised Banks can undertake ----
33 The auditor of a Nationalised bank has to be
34
20
UNIT-6 CASE LAWS ON RESPONSIBILITY OF PAYING BANK
21
UNIT-7 CASE LAWS ON RESPONSIBILITY OF COLLECTING BANK
22
UNIT-8 INDEMNITIES
23
authorized the indemnity
holder to compromise the
suit
16 An indemnity holder can act beyond his False
authority
17 An indemnity holder can be compensated only False
for damages and not for the costs incurred by hi
18 An indemnity holder is entitled to compromise a False
suit as thought fit by him though contrary to the
orders of the indemnifier
24
UNIT-9 BANK GUARANTEES
25
UNIT-10 LETERS OF CREDIT
26
not comply with the terms of letter of credit
then the same can be accepted and sent for
confirmation of buyer
22 A bill of exchange is document to title to goods False
23 A bill of exchange is also called a „bill‟ or a True
„draft‟
24 Invoice in a letter of credit transaction is a False
document similar to a quotation based on which
the buyer places his order
25 A bill of lading on a bona fide transfer confers True
on the transferee a right to the goods
26 An airway bill is also a document evidencing False
title to goods
27
UNIT-11 DEFERRED PAYMENT GUARANTEE
28
UNIT-12 LAWS RELATING TO BILL FINANCE
29
UNIT-13 VARIOUS TYPES OF SECURITIES
30
UNIT-14 LAW RELATING TO SECURITIES AND MODES OF CHARGING-I
31
UNIT-15 LAW RELATING TO SECURITIES AND MODES OF CHARGING-II
32
UNIT-16 DIFFERENT TYPES OF BORROWERS
33
UNIT-17 TYPES OF CREDIT FACILITIES
34
UNIT-18 SECURED AND UNSECURED LOANS, REGISTRATION OF FIRMS,
INCORPORATION OF COMPANIES
35
UNIT-19 REGISTRATION AND SATISFACTION OF CHARGES
36
UNIT-20 INTRODUCTION TO SECURITISATION AND RECONSTRUCTION
OF FINANCIAL ASSETS AND ENFORCEMENT OF SECURITY INTEREST,
2002 (SARFAESI ACT, 2002)
37
UNIT-21 DEFINITIONS OF SARFAESI ACT, 2002
38
UNIT-22 REGULATION OF SECURITISATION AND RECONSTRUCTION OF
FINANCIAL ASSETS OF BANKS AND FINANCIAL INSTITUTIONS
39
UNIT-23 ENFORCEMENT OF SECURITY INTEREST
40
UNIT 24 CENTRAL REGISTRY
41
UNIT 25 OFFENCES AND PENALTIES
42
UNIT 26 MISCELLANEOUS PROVISIONS
43
UNIT 27 THE BANKING OMBUDSMAN SCHEME, 2006: PURPOSE, EXTENT,
DEFINITIONS, ESTABLISHMENT AND POWERS
44
UNIT 28 PROCEDURE FOR REDRESSAL OF GRIEVANCE
45
UNIT 29 RECOVERY OF DEBTS DUE TO BANKS AND FINANCIAL
INSTITUTIONS ACT, 1993 (DRT ACT) PRELIMINARY
46
UNIT 30 ESTABLISHMENT OF TRIBUNAL AND APPELLATE TRIBUNAL
47
UNIT 31 JURISDICTION, POWERS AND AUTHORITY OF TRIBUNALS
48
UNIT 32 PROCEDURE OF TRIBUNALS
49
UNIT 33 RECOVERY OF DEBTS DETERMINED BY TRIBUNAL AND
MISCELLANEOUS PROVISIONS
50
UNIT 34 THE BANKER'S BOOKS EVIDENCE ACT, 1891
51
UNIT 35 THE LEGAL SERVICES AUTHORITIES ACT, 1987: LOK ADALATS
52
UNIT 36 THE CONSUMER PROTECTION ACT, 1986: PREAMBLE, EXTENT
AND DEFINITIONS
53
UNIT 37 CONSUMER PROTECTION COUNCILS
54
UNIT 38 CONSUMER DISPUTES REDRESSAL AGENCIES
55
UNIT 39 THE LAW OF LIMITATION
56
UNIT 40 TAX LAWS
57
UNIT 41 MEANING AND ESSENTIALS OF A CONTRACT
58
UNIT 42 CONTRACTS OF INDEMNITY
59
UNIT 43 CONTRACTS OF GUARANTEE
60
UNIT 44 CONTRACT OF BAILMENT
61
UNIT 45 CONTRACT OF PLEDGE
62
UNIT 46 CONTRACT OF AGENCY
63
UNIT 47 MEANING AND ESSENTIALS OF A CONTRACT OF SALE
64
UNIT 48 CONDITIONS AND WARRANTIES
65
UNIT 49 UNPAID SELLER
66
UNIT 50 DEFINITION, MEANING AND NATURE OF PARTNERSHIP
67
UNIT 51 RELATIONS OF PARTNERS TO ONE ANOTHER
68
UNIT 52 RELATIONS OF PARTNERS TO THIRD PARTIES
69
UNIT-53 MINOR ADMITTEED TO THE BENEFITS OF PARTNERSHIP
70
UNIT-54-DISSOLUTION OF A FIRM
71
UNIT-55-EFFECT OF NON-REGISTRATION
72
UNIT-56-DEFINITION AND FEATURES OF A COMPANY
73
UNIT-57-TYPES OF COMPANY
74
UNIT-58-MEMORANDUM OF ASSOCIATION AND
ARTICLES OF ASSOCIATION
75
UNIT-59-DOCTRINES OF ULTRA VIRES/CONSTRUCTIVE NOTICE/
INDOOR MANAGEMENT
76
UNIT-60 MEMBERSHIP
77
UNIT-61-PROSPECTUS
78
UNIT-62-DIRECTORS
79
UNIT-63 FOREING EXCHANGE MANAGEMENT ACT 1999
80
UNIT-64-TRANSFER OF PROPERTY ACT 1882
81
16 A lease for an agricultural or manufacturing Year to year
purpose is deemed to be a lease for
82
UNIT-65-THE RIGHT TO INFORMATION ACT 2005
83
UNIT-66 RIGHT TO INFORMATION AND OBLIGATIONS OF PUBLIC
AUTHORITIES
84
UNIT-67 THE PREVENTION OF MONEY LAUNDERING ACT,2002
85
UNIT-68 INFORMATION TECHNOLOGY ACT ,2000
86