IILM ACADEMY of HIGHER LEARNING, JAIPUR

II MID - TERM END EXAMINATIONS APRIL 2020

ROLL NO. ………………….. MBA BATCH ……………….

Time: 90 Minutes Max. Marks: 50

Subject Name-Banking & Insurance

All questions are compulsory. Q1 to Q5 are of 7 marks each and have to be

answered in 150 – 200 words. Q6 is a case study and carries 15 marks

Q.1 “As controller of credit, the central bank attempts to influence and control the
volume of Bank credit and also to stabilize business condition in the country”. Do
you agree?

Q.2 Differentiate between Reinsurance and Double insurance with an example.

Q.3 Discuss the concept of capital adequacy. What is the present position of capital
adequacy in Indian banks both private and public sectors?

Q.4 Explain the effect of Liberalization and Privatisation in Insurance Sector.

Q.5 State the precautions that must be taken and the practice generally followed by
bankers when advancing money against life insurance policies.

Case Study-

Q.6 In recent months, the news reports about India’s bad debts problems have been
appearing almost on a daily basis. With the ballooning NPAs or Non-Performing
Assets (the term used to refer to debts owed to banks going sour), the Central
government is grappling with the problem of these liabilities on the balance sheets
of the Indian banks. While the problem affects the public sector banks more, even
the privately owned and managed banks such as ICICI have been reporting a surge
in their liabilities. Indeed, the problem of bad debts in India is so dire that some
experts are predicting a liquidity and a recessionary crisis soon for the Indian
banking sector unless it cleans up its act. Though the problem of bad debts accruing
on the balance sheets is due to the cumulative build up loans going bad taken over
the years and especially during the boom years of the last decade, it needs to be
mentioned that this continued into the present government’s tenure and hence,
political partisanship should be avoided. This means that there must be a collective
political will to solve the problem rather than to point fingers which does not serve
the purpose.

Answer Following Questions-

Q.1 What the RBI and Indian Government are doing to address the Problem?

Q.2 What kind of solution do you suggest to solve this problem?