THIAGARAJAR COLLEGE: MADURAI – 625009

PG and Research Department of Commerce

Internal Test II
Modern Banking Practices

Course: II M. Com (Finance) Code: S4PMC2 Time: 2 Hours Maximum: 30 marks

Answer any thirty questions:
1) Which of the following is an external factor contributing to NPAs?

a) Defective Lending Policies c) Natural Calamities

b) Inappropriate technology d) Improper SWOT Analysis

2) The Insolvency and Bankruptcy Code (IBC) provides for a recovery process of
insolvent accounts within how many days?

a) 120 days c) 180 days

b) 90 days d) 300 days

3) Which among the following assets represent, idle physical assets in the economy?

a) Fixed assets c) Non-performing Assets (NPA)

b) Loose tools d) Liquid assets

4) Huge piles of NPAs have continued to ______________

a) Develop banks c) Enable banks in lending more

b) Drag on the performance of d) Influence banks politically
banks

5) NPAs affect the profitability, liquidity and the competitive functioning of the
___________industry.

a) Farming c) Banking
b) Steel d) Textile

6) IBAN in telephone banking stands for_________________

a) International Bank Account c) Individual Banking Account

Number Number
b) International Business Access d) Indian Banker Aadhar Number
Number

7) Telephone banking is a service provided by banks and financial institutions, enabling

customers to perform financial transactions over the _______

a) Internet b) Telephone
 c) Counter d) Limit

8) Telephone banking was first introduced in the 1980s by Girobank in the________

a) USA c) African Continent

b) Soviet Union d) United Kingdom

9) There are ____types of ATM machines

a) 3 c) 5
b) 2 d) 4

10) Which among the following is an input device in an ATM?

a) Keypad c) Cash depositor

b) Receipt printer d) Speaker

11) What is the extent of provision made by banks in the case of loss assets?

a) 10% of the outstanding c) 100% of the outstanding

b) 20% of the outstanding d) 0% of the outstanding

12) Which among the legal measures of managing NPAs uses securitisation, asset
reconstruction and enforcement of security as methods to recover NPAs?

a) Lok Adalats c) SARFAESI Act, 2002

b) Debt Recovery Tribunals d) Corporate Debt Restructuring
(DRT) (CDR)

13) For the purpose of recovery of NPAs, which special court has been established by the
central govt. with retired judges where cases of 10lakhs and above only can be filed?

a) Lok Adalats c) Corporate Debt Restructuring

b) Debt Recovery Tribunals (CDR)
(DRT) d) ARCIL

14) What is the minimum amount that can be transferred using RTGS?

a) 1 lakh c) 10 lakhs
b) 2 lakhs d) 5 lakhs

15) ____________provide banking services to customers round the clock, 24 hours a day,
7 days a week and 365 days a year

a) Professionals c) ATMs
b) Bankers d) Consultants

16) What is the full form of NEFT?

 a) National Electronic Fund c) Next Electronic System
Transfer Transfer
b) Near Settlement Transfer d) New Everyday Speed Transfer

17) Anyone with a credit card or debit card can access an _______

a) Event c) ATM
b) Locker d) Folder

18) The electronic transfer of money from one bank account to another through computer-
based systems, without the direct intervention of bank staff is called_____________

a) Money transfer c) Support system

b) Electronic Fund Transfer (EFT) d) Transfer of credit

19) In which of the following payment sytems, fund transfer happens in batches?

a) RTGS c) NEFT
b) IMPS d) SWIFT

20) The 5Cs of credit are__________

a) Communicate, cheque, capital, c) Chance, clarity, case, custody and

co-operation and cost cost
b) Character, capacity, capital, collat d) Counter, create, collateral, cost
eral, and conditions and count

21) _____________banking enables users to do transactions when on the move using a

mobile device like a Smartphone or tablet

a) Internet Banking c) Virtual Banking

b) Effortless Banking d) Mobile Banking

22) The ability of a loan applicant to repay the loan amount is assessed using the
_________procedure by banks.

a) Credit Appraisal c) Security

b) Compensation d) Financial

23) Credit appraisal procedure is followed in banks to maintain____________

a) Loan to Value c) More borrowers

b) Security of capital d) Good relationship with customers

24) A debit card is issued by a bank to

a) All customers of a bank c) All customers having loan

b) All customers having savings account with a bank
bank account with a bank d) All corporate people
25) Which among the following is a leading electronic payment technology firm?

a) Max c) Visa
b) SWAP d) Sensex

26) Debit/Credit cards when used for purchasing a product/payment of a service at a store,
are swiped in a terminal known as_________

a) Point of Sale c) Shopping terminal

b) Real time terminal d) Shipping charge

27) Banks issue debit cards for the purpose of making_________

a) More customers c) Delayed interest

b) Paperless Payments d) Assessment of Risks

28) Which among the following is necessary to transfer funds through the RTGS facility?

a) Beneficiary’s bank account c) There is a minimum amount

number specified for transfer
b) The IFSC number of the d) All the above
beneficiary’s bank branch

29) RTGS stands for_______

a) Real Time Gross Settlement c) Relative Total Gross Settlement

b) Reduced Time Gross Settlements d) Real Time Gross Security

30) In case of failed ATM transactions how much amount does a bank have to pay to its
customers for delays in re-crediting the amount beyond seven working days?

a) 500₹ c) 300₹
b) 200₹ d) 100₹

31) IFSC stands for________

a) International Finance Sector Care c) Indian Financial Secondary Code

b) Indian Financial System Code d) Ideal Finance System Code

32) ___________lending is a provision given by the RBI to the banks for lending to few
specific sectors like agriculture and allied activities.

a) Private Sector c) Priority Sector

b) Public Sector d) Primary Sector

33) Which among the following is not a private sector?

a) Export Credit c) Housing

b) Education d) Entertainment
 34) ____________ allow the bank’s customers to spend money by drawing on funds they
have deposited at the bank.

a) Smart Cards c) Debit Cards

b) Credit Cards d) Exchange Cards

35) __________ allow consumers to borrow money from the card issuer up to a certain

limit in order to purchase items or withdraw cash.

a) Smart Cards c) Debit Cards

b) Credit Cards d) Exchange Cards

36) Credit information used to determine the credit worthiness of a customer can be
obtained by banks with the help of_________

a) Credit rating agencies c) Past Experiences

b) Customer rating d) Other banks

37) Which among the following factors is not considered to be essential for sanctioning a
loan?

a) Income of the person c) Ability to repay

b) Asset Value d) Appearance

38) The ______ratio is a financial term used by lenders to express the ratio of a loan to
the value of the asset purchased. 

a) Asset-to-Value c) Mortgage Value

b) Loan-to-Value d) Business Value

39) __________check is the mandatory process of identifying and verifying the identity
of the customer when opening an account and periodically over time. 

a) KYC c) Smart
b) Medical d) Client

40) To prevent NPAs banks must ensure that the loan applicant utilises the loan
sanctioned for the ______of the loan.

a) Period c) Life
b) Purpose d) Penalty