LRAB Paper 3 Jaiib Mock Tests Etc

Bankers ZONE ARENA
MOCK TEST PAPER 3 JAIIB LRB

ANSWERS AT THE END
1. If an Indian bank has place of business in more than one state and no office
in Mumbai or Kolkata, what is the amount of minimum capital:
a. Rs.1 lac
b. Rs.2 lac
c. Rs.5 lac
d. Rs.10 lac
2.Banker’s lien is a/an ......

a. Hypothecation
b. Mortgage
c. Implied pledge
d. Pledge
3.In case of goods, Banker’s lien is not applicable.

a. owner’s goods
b. stolen goods
c. finished goods
d. None of these
4. The right of set-off is ......

a. Customer’s right
b. Banker’s right
c. Banker’s obligation
d. Bank’s discretion
5. Garnishee order is issued by ....

a. Police officer
b. Revenue authority
c. Enforcement authority
d. Court of Law
6. No banking company can hold any immovable property howsoever

acquired, except such as is required for its own use, for any period
exceeding ....................................... from the acquisition thereof
a. 3 years
b. 5 years
c. 7 years
d. 9 years
7. A collecting bank gets protection for collecting a demand draft subject to

certain conditions, u/s of ......
a. 131, NI Act
b. 31, NI Act
c. 31, RBI Act
d. 131A, NI Act
8. The objective of enactment of Consumer Protection Act 1986 is......

a. to help bank customer to file suit in a consumer court
b. better protection of the interests of the consumers
c. quick remedy to the consumer though normal courts
d. all the above
9. Bank-A wants to file a suit in a DRT. The suit can be filed within the
local limits of which of the following DRT (which one is not correct)......
a. where the defendant resides or carries on the business
b. where any of the defendants (where there are more than one) resides or
carries on the business
c. where the cause of action has arisen
d. it is at the discretion of the bank
10. When RBI appoint a suitable person in place of the Chairman or

Director or Chief Executive Officer or other officer or employee who
has been removed from his office, shall hold office for a period not
exceeding ...... or such further periods not exceeding at a time as
the Reserve Bank may specify
a. 3 years, 3 years
b. 3 years, 5 years
c. 5 years, 3 years
d. 5 years, 5 years
11. Which of the following types of loss cannot be recovered under a contract
of indemnity?
a. damages paid in a suit
b. cost paid in a suit
c. payment made in compromise that are not contrary to the indemnity
d. none of the above
12. In case of pledge, the possession and ownership of the goods remains
with......
a. possession with bank and ownership with borrower

b. possession with the borrower and ownership with the bank
c. possession and ownership with borrower
d. possession and ownership with the bank
13. If the acknowledgement of debt by the borrower is for part amount

only......
a. the limitation is extended for the entire loan
b. the limitation is extended for that portion of the loan
c. the limitation is not extended for the loan
d. such method of extension of limitation is unlawful
14. A banking company shall be deemed to be unable to pay its debts if

it has refused to meet any lawful demand made at any of its offices or
branches within…………. .................................. working days if such
demand is made at a place where there is an office, branch or agency
of the Reserve Bank, or within……..working days if such
demand is made elsewhere
a. 1, 2
b. 2, 3
c. 3, 5
d. 5, 7
15. Which of the following types of amounts do not form part of the
term debt under RDDB Act (DRT Act) 1993?
a. fraud committed by an employee
b. any liability payable under a mortgage or money payable under a decree or
civil court
c. any liability for which there is no security
16. The preferential payments shall be made by the official

liquidator or adequate provision for such payments shall be made
by him within................................ from the date of the winding up
order of the Bank
a. 1 week
b. 1 month
c. 3 months
d. 6 months
17. The category not ordinarily residents is not relevant for which of the
following types of assesses as per Income Tax Act......
a. individuals
b. Hindu Undivided family
c. company
18. In a contract of indemnity, there are parties......

a. one party, the indemnifier
b. two parties, the insurer and the insured
c. two parties, the indemnifier and the indemnity holder
d. two parties, the guarantor and the beneficiary
19. To get protection against conversion, the cheque or demand draft should
be crossed as ............................................................................................ (i)
generally
crossed, (ii) specially crossed, (iii) not-negotiable or account payee crossed
a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)
20. Which of the following reasons prompted for set up of Debt Recovery
Tribunal?
a. Under delay in setting the claims by courts.
b. Delay in extension the decree.
c. Non-availability of Assets with the borrower due to inordinate delay in
courts.
d. All the above.
21. A Bank has allowed a current A/c holder ad hoc overdraft of Rs 15

lakh. The amount is due. Whether this is recoverable under provisions of
DRT Act?
a. No, as it is not a regular loan.

b. No, as only secured loans can be recovered under the DRT Act.
c. Yes, as it is a legally recoverable amount by the Bank.
d. Yes, but if the tribunal grants special permission to lodge the case.
22. Promissory note can be (i) Demand PN, (ii) Usance PN
a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Neither (i) nor (ii)
23. Attachment order is issued by ......
a. Drawer of a cheque
b. Revenue authority
c. Manager of bank
d. None of these
24. Who is Garnishee

a. debtor
b. bank
c. creditor
d. none of above
25. .......... is one of the modes of lending by a banker.
a. Documentary Bills
b. Bill of purchase
c. Supply Bills
d. Bill finance
26. The bank is required to comply with the execution of the award of banking
ombudsman within ......
a. 7 days
b. 15 days
c. 30 days
d. 60 days
27. What is the maximum time for settlement of a claim before passing
an award by the banking ombudsman?
a. within 15 days from the date of receipt of complaint
b. within 1 month from the date of receipt of complaint
c. within 2 months from the date of receipt complaint
d. within 3 months from he date of receipt of complaint
28. Banking ombudsman scheme does not cover......
a. Scheduled commercial banks

b. Regional rural banks
c. Co-operative banks
d. Financial Institutions
29. Can the order of Central Government appointing Presiding Officer of the
Tribunal be challenged in any Court?
a. Yes, before the Appellate Tribunal.

b. No.
c. No, unless the High Court permits for it
d. Yes, under Constitution Article 226 before the High Court.
30. When a civil suit filed in Civil Court is transferred to DRT, if fresh court fee is
required to be paid?
a. No
b. Yes, as the authorities are different.
c. No, if there is no counterclaim.
d. Yes, as the court fee stamps are different.
31. While filling appeal before the appellate tribunal if any amount is required
to be deposited?
a. No, amount is required to be deposited till the appellate tribunal decides.

b. Yes, Court fee on the appeal amount is required to be paid.
c. Yes, 75 per cent of the amount determined by the tribunal is required to
be deposited at the timing of filling of the appeal.
d. Yes, after admission of the appeal 75 per cent of the amount
determined by the tribunal is required to be deposited.
32. A company is under winding up process. Whether High Court

permission is required to a Bank to proceed against it before DRT?
a. No, as the DRT Act being a special Law having overriding effect over other
laws.
b. Yes, as Companies Act specially provides to that effect.
c. Depends on the stage of winding up process.
d. No permission but concurrence of High Court required.
33. On which of the following a collecting bank will get protection u/s 131 of
NI Act:
a. Crossed draft
b. Crossed promissory note
c. Crossed bill of exchange
d. Crossed cheque
34. According to section 3 of Evidence Act, the Document can be defined:
a. Any matter expressed or described upon any substance by means of letter,

figure or marks.
b. Or by any other means.
c. It intends to be used for purpose of recording that matter.
d. All the above.
35. Banks are undertaking trading in shares and securities and this activity is
regulated by:
a. authorities under Companies Act

b. Reserve Bank of India
c. Central Govt.
d. Securities and Exchange Board of India
36. The term corresponding new banks is used in relation to which of the
following:
a. State group banks

b. nationalized banks
c. foreign banks
d. new private banks
37. Central govt. can give direction to RBI only after consulting:
a. Governor RBI
b. Central Board of RBI
c. Finance Commission
d. President of India
38. Which of the following actions can be done by a partner singly (i.e. falls
within implied authority of a partner) to bind the partnership firm:
a. Sale of immovable property
b. Give guarantee to secure loan of other firm
c. Acknowledge debt already raised by the firm
d. Appoint an agent for the business of the firm
39. The Companies Act applies to the banking companies:
a. irrespective whether the provisions of the Banking Regulation Act

b. insofar as the provisions are consistent with the provisions of Banking
Regulation Act
c. in relation to their registration and winding up
d. all the above
40. The Banking Regulation Act applies to cooperative banks:
a. as provided in the State cooperative Act

b. as provided in the Central cooperative Act
c. as provided in the modification of Section 56
d. as applicable to other commercial banks
41. A banking company requires from to undertake banking business as

per provision of Section
of Banking Regulation Act:
a. registration, RBI, 23
b. licence, RBI, 22
c. registration, Registrar of Companies, 24
d. certificate of commencement of business, Registrar of Companies, 24
42. If a bank has to shift its branch in (area), it requires RBI permission
u/s 23 of Banking Regulation Act:
a. same district
b. same city
c. same town
d. same village
43. Under Section 11 of Banking Regulation Act, the foreign banks have
to deposit……..arising out of their business in India with, RBI:
a. 10% of their deposits

b. 20% of their deposits
c. 20% of their profit for each year
d. 20% of their net demand and time liabilities
44. The shareholder of a banking company can exercise

maximum……% of the total voting rights of all shareholders:
a. 2%
b. 5%
c. 10%
d. no such limit.
45. _______ is a document issued by a company acknowledging its

indebtedness to the bearer or a registered holder:
a. Preference share
b. Debenture
c. Equity share
d. Sweat equity shares
46.Which of the following statements, is correct regarding valuation of

immovable secured asset?
a. Authorised officer will obtain estimated value from the approved valuer.
b. The borrower need not involved in the valuation process.
c. Valuation by approved valuer and fixing of reserve price is mandatory incase
of immovable Assets.
d. All the above.
47. Drawee of a Cheque is (i) An A/c holder, (ii) Always a banker
a. Only (i)
b. Only (ii)
48. What are the provisions of depositing 75% amount by the borrower while
submitting appeal?
a. No appeal will be entertained unless 75% of the amount is not deposited.

b. DRT an waive or reduce the amount required to be deposited.
c. The amount will include installments which were not due.
d. All the above.
49. The securitization Company can acquire financial assets from Banks in the
following manner:
a. by issuing Debenture or Bonds.

b. By entering into an arrangement with the Bank/Financial Institution.
c. (a) or (b)
d. (a) and (b)
50. Letter of Credit where in addition to advance payment, the beneficiary is

entitled to payment of storage charges is called
a. LC
b. Red clause credit
c. Yellow clause credit
d. Green clause credit
51. Once the dispute before the Banking Ombudsman is referred to

arbitration can new claim or counterclaim be made?
a. No, as the reference on the issues has already been made.

b. Yes, provided the claim and counterclaim are within the terms of reference.
c. Yes, provided additional stamp duty is paid thereon.
d. No, because arbitration is by mutual consent so stage of claim and counter
claim does not arise.
52. Section 5(b) of Act gives the definition of the term ‘Banking’
a. Contract Act
b. Negotiable Instruments Act
c. Banking Regulation Act
d. Transfer of Property Act
53. Principle functions of the Bank are:
a. Dispatch of statements
b. Adjustment of Interoffice Transactions
c. Clearing
d. Acceptance of deposits for Lending and investment
54. In case of safe custody of articles relation between Bank and Customer is
Bank ...... and Customer ......
a. Agent, Principal
b. Lessor, Lessee
c. Bailor, Bailee
d. Debtor, Creditor
55. Lien is a/an of the creditor to retain possession.
a. Obligation
b. Right
c. Interest
d. Protection
56. Which one among the following formulates the fiscal policy in India ?
a. Planning Commission
b. Finance Commission
c. The Reserve Bank of India
d. Ministry of Finance
57. Which section of IT Act deals with the appointment of Controller of

certifying authorities?
a. Section 17
b. Section 15
c. Section 10
d. Section 5
58. At the time of a new partner Good will ......
a. Belongs to all partners, new and old

b. Belongs only to the new partners who is going to be admitted.
c. Belongs only to the old partner who have credited it
d. None of the above.
59. What is the punishment for identity theft in IT Act?
a. Three year imprisonment or 2 lakh rupees penalty or both

b. Two year imprisonment or 1 lakh rupees penalty or both
c. Three year imprisonment or 1 lakh rupees penalty or both
d. None of the above
60. Mortgage is defined under ......
a. contract act
b. sale of goods act
c. transfer of property act
61. In contract of guarantee the person who gives guarantee is called (i)
Surety, (ii) Principal debtor
a. Only (i)
b. Only (ii)
d. Both (i) and (ii)
62. One of your customers lost the Fixed Deposit Receipt issue by the bank.
To obtain a duplicate FD he needs to furnish ......
a. A Promissory note
b. A Guarantee
c. A Letter of Credit
d. An Indemnity bond
63. Which of the following is not a security interest?
a. Any mortgage, charge, hypothecation, assignment or any right, title or

interest of any kind, on tangible asset, retained by the secured creditor as
an owner of the property, given on hire or financial lease or conditional sale
or under any other contract
b. Such right, title or interest in any intangible asset or assignment or
licence of such intangible asset which secures the obligation to pay any
unpaid portion of the purchase price of the intangible asset or the
obligation incurred or any credit provided to enable the borrower to
acquire the intangible asset or licence of intangible asset
c. A lien on any goods, money or security given by or under the Indian
Contracts Act, 1872 or the Sale of Goods Act, 1930 or any other law for the
time being in force
d. Lien of goods, pledge of movables, security interest
of less than Rs. One Lakh for Limited Insolvency
64. The Presiding officer of DRT is appointed by :
a. Reserve Bank of India.

b. Supreme Court.
c. Central Government
d. High Court.
65. In how many days the DRT should summons to the defendant to show
cause?
a. Within 7 days.
b. Within 10 days.
c. Within 30 days.
d. Within 60 days.
66. The maxim applied in respect of Direct Quotation is ......
a. buy low, sell low

b. buy low, sell high
c. buy high, sell low
d. buy high, sell high
67. What is the time limit for DRT to complete the process?
a. Within 6 months.
b. Within 9 months.
c. Within 12 months.
d. No such limit.
68. A bank has lent Rs.8 lakhs to a pvt.ltd.co. to purchase a pick up van.
Therefore the bank's charge
a. has to be registered with RTO/ROC
b. need not be registered with ROC
c. registration is optional
d. none of above
69. ...... goods are to be manufactured/produced/acquired by the seller after

making of the contract of sale.
a. Future
b. Specific
c. Moveable
d. Immoveable
70. In which of the following Acts, the provisions of Mortgage of an Asset are
dealt with?
a. Transfer of Property Act.

b. Sale of Goods Act.
c. Negotiable Instrument Act.
d. Indian Company Law.
71. Under UCPDC provisions, where a letter of credit does not specify
whether revocable or irrevocable this is treated as:
a. Irrevocable
b. Revocable
c. With recourse
d. a and c
72. The delivery of goods by one person to another for some purpose upon
a contract that they shall when the purpose is accomplished be returned
or otherwise dispose of upon discretion of the delivering person the
contract is called ……
a. Indemnity
b. Bailment
c. Contingent Contract
d. None of above
73. Which of the following are qualitative control methods?

a. Margins
b. Maximum limit of credit for specific purpose
c. Differential rate on certain types of advancement
d. All of the above
74. Legislation gives which body the power to specify a code of conduct for
surveyors and loss assessors?
a. Institute of Insurance and Risk Management

b. Insurance Regulatory and Development Authority
c. Life Insurance Council
d. Securities and Exchange Board of India
75. Which section of IT Act deals with Hacking of computer systems and its
penalties?
a. Section 65
b. Section 66
c. Section 62
d. Section 67
76. “Men may come and men may go but the company exist”- this explains
which characteristics of the company as per companies Act 1956?
a. Separate legal entity

b. Perpetual Succession
c. Capacity to sue
77. Mr. Hari issues a stop payment instructions to his banker to Stop
payment of a cheque for Rs,20,000.00. This is ......
a. A request from Hari

b. An intimation from Hari
c. An advice from Hari
d. A mandate from Hari
78. A negotiable instrument is endorsed as Pay to Shalini only. This is called as

......
a. Blank endorsement
b. Restrictive endorsement
c. Sans recourse endorsement
d. Endorsement in Full
79. In a demand draft the word “order” is changed to “bearer” by the holder
of the DD. It is called as ......
a. Endorsement
b. Material alteration
c. Crossing
80. When RBI is the lender of last resort what does it mean?
a. RBI advances bank necessary credit against eligible securities

b. Commercial banks give funds to RBI
c. RBI advances money to public whenever there is an emergency
d. All of the above
81. A proposes by letter to sell a house to B The Communication of the

proposal is complete ......
a. When A make such proposal

b. When B accepts the proposal
c. Both a. and (b)
d. None of above
82. For the firm interest on drawing is ......
a. Expense
b. Income
c. Liability
d. None
83. Where an unpaid seller has made part delivery of the goods he may
exercise his right ......
a. Return on the remainder

b. Of lien on the remainder
c. Sale to any other person
d. None of above
84. Within how many days shall the Central Registrar be intimated
regarding satisfaction of security interest?
a. 30 days from the date of such payment or satisfaction

b. 60 days from the date of such payment or satisfaction
c. 120 days from the date of such payment or satisfaction
d. 90 days from the date of such payment or satisfaction
85. The mortgager transfers the mortgaged property to the mortgagee on

the condition that it will be retransferred upon payment of mortgaged
money. This is ......
a. Simple mortgage
b. English mortgage
c. equitable mortgage
d. mortgage by conditional sale
86. Mr. X a transporter has been granted a loan for purchase of a truck.
You will create which of the following charge ......
a. Assignment
b. a mortgage
c. pledge
d. hypothecation
87. For which of the following assets the charge hypothecation is not created
......
a. land
b. machine
c. stock
d. vehicle
88. For the purpose of exposure norms, what is the meaning of capital fund?
a. paid up capital and reserves

b. Tier I capital
c. Tier I & Tier II capital
d. None of these
89. Which of the following is not a clause of memorandum of association?
a. situation
b. capital
c. subscription
d. directors
90. Section 5, of the Contract Act, deals with ......
a. Communication of contract
b. Acceptance of contracts
c. Revocation of proposals and acceptances
d. None of above
91. The contract of guarantee is a contract in which a person perform the

promise or discharge the liability of ......
a. The contractor
b. Stranger
c. Third person
d. None of above
92. Which of the following does not fall under financial asset?
a. A mortgage, charge, hypothecation or pledge of movable property

b. Any right or interest in the security, whether full or part underlying such
debt or receivables
c. Any financial assistance
d. Prepaid expenses undertaken with respect to a movable or immovable
property
93. Loan against LIC policies are given based on ......
a. surrender value
b. paid up value
c. Insured value
d. market value
94. Which of the following is not considered material alternation?
a. changing the date

b. changing the amount
c. changing the relation of the parties
d. none of them
95. Commercial mortgages, farm mortgages and home mortgages are

categories of ......
a. swapped mortgages
b. sovereign mortgages
c. secondary mortgages
d. primary mortgagees
96. In the case of a joint stock co the registration of a charge is not required
with registrar of companies for
......
a. Pledge of moveable property

b. hypothecation of moveable property
c. assignment of book debts
d. mortgage of fixed assets
97. A usance bill is presented for acceptance to the drawee. He has to accept
in ......
a. within 24 hrs
b. within 48 hrs
c. within 72 hrs
d. no time limit
98. Which is the appeal court on the orders issued by Cyber appellate
tribunal?
a. Supreme Court
b. District Court
c. High Court
d. Allahabad high Court
99. At the time of admission of a new partner, general reserve is: ......
a. Debited to capital of old partners

b. Credited to capital of old partners
c. Allowed to remain is balance sheet
d. Debited to current account
100. A negotiable instrument is discharged by ......
a. payment in due course by or on behalf of the party primarily liable

b. payment in due course by the party accommodated
c. intentional cancellation thereof by the holder
d. none of them
101. When the goods are in a godown and the borrower hands over the
key of the godown to the bank, it is called ......
a. actual pledge
b. constructive pledge
c. symbolic pledge
d. it is not a pledge at all
102. If the Pawnee has to incur extra-ordinary expenses on the goods pledged
......
a. he can recover the amount from the goods

b. he can recover the amount from the goods if the amount was incurred with
consent of the pawner
c. he cannot recover from the goods but he has to file suit for recovery
103. Which of the following is correct regarding a contract of guarantee ......
a. it is dependent on the underlying contract between the beneficiary and the

applicant
b. the liability under the contract will be determined by the applicant and the
beneficiary together
c. it is independent contract despite the fact that there is an
underlying contract between the beneficiary and the applicant
d. the payment shall be made by the bank when the default is proved
beyond doubt and the applicant accepts the default.
104. Under the provisions of SARFAESI Act 2002, an institution making

investment by way of buying the security receipts is known as_______:
a. Securitization Company
b. Reconstruction Company
c. Qualified Institutional Buyer
d. FII
105. For a loan given by the bank, which of the following is not liable
personally due to which the loan cannot be recovered from them
personally?
a. Minor
b. insolvent
c. insane
d. all the above

106. If buyer of machinery wants to purchase machinery from supplier

on a long- term credit basis and the machinery supplier is agrees to
supply the machinery on the basis of a bank guarantee, which type of
guarantee shall be required ......
a. financial guarantee
b. performance guarantee
c. deferred payment guarantee
d. performance-cum-deferred payment guarantee
107. Which of the following banks is called the negotiating bank?
a. the bank that verifies the apparent authenticity of LC

b. the bank that makes the payment to the beneficiary on receipt of
documents as mentioned in LC
c. the bank that guarantees the payment to the beneficiary in case the opening
bank does not pay
d. the bank that purchases the documents at a discount, if these are not drawn
as per terms of LC
108. When the Articles of Associations are signed by the promoter ......
a. it should be in the presence of at least one witness

b. it should be in the presence of at least two witnesses
c. it should be in the presence of at least two witnesses which
should be another signatory to the Articles
d. there is no requirement of witnessing
109. Deferred payment guarantee is issued by bank in case of following type

of business transactions ......
a. guarantee for purchase of raw material by the applicant (buyer)

b. guarantee for purchase of capital goods by the applicant on instalment basis
c. guarantee for performance of a contract
d. guarantee for payment of tax liabilities over a no. of year
110. In which of the following cases, creation of only hypothecation is possible

(and not pledge)?
a. stock in process
b. a running retail trader shop
c. where the goods have to be constantly handled in bulk such as a rice mill or
oil mill
d. all the above

111. In case of pledge, the position of ownership and possession of goods is as

under ......
a. possession with the bank and ownership with the borrower

b. possession with the borrower and ownership with the bank
c. possession and ownership with the borrower
d. possession and ownership with the bank
112. By action of one partner, in which of the following cases, the other
partners will not be liable ......
a. withdrawal of suit filed in a court

b. appointment of agent for the firm
c. mortgage of property of the firm to secure a loan given to a partnership firm
d. to give guarantee on behalf of the firm when the firm is engaged in the
business of giving guarantees.
113. Under the Registration Act, Mortgage by deposit of title deeds is

___________:
a. Must be registered
b. Not to be registered
c. Either 1 or 2
114. How much consideration is necessary to create contract
a. Rs. 1
b. Maximum 10 lac
c. No consideration
d. Depend on the parties concerned
115. Can minor be Agent:

a. No
b. Yes, with limited Liabilities
c. Yes
d. None of above
116. The charge on movable assets to be created is known as:

a. Set-off
b. Assignment
c. Mortgage
d. Hypothecation
117. An unsecured debenture does not require any registration because it is

not Secured by _________:
a. Fixed charge
b. Floating charge
c. Both (a) & (b)
118. Under the provisions of SARFAESI Act 2002, an institution making

investment by way of buying the security receipts is known as_______:
a. Securitization Company
b. Reconstruction Company
c. Qualified Institutional Buyer
d. FII
119. Charge on LIC policy is known as:
a. Hypothecation
b. Set off
c. Pledge
d. Assignment
120. Drawee of a Cheque is: (i) An A/c holder, (ii) Always a banker
a. Only (i)
b. Only (ii)
BEST OF LUCK
1c 2c 3b 4d 5d 6c 7d 8b 9d 10a
11d 12a 13a 14c 15a 16c 17c 18c 19d 20d
21c 22c 23b 24b 25d 26c 27b 28d 29b 30a
31c 32a 33d 34d 35d 36b 37a 38d 39c 40c
41b 42a 43c 44c 45b 46d 47b 48d 49c 50d
51b 52c 53d 54c 55b 56d 57a 58c 59c 60c
61a 62d 63c 64c 65c 66b 67a 68a 69a 70a
71a 72b 73d 74b 75b 76b 77d 78b 79b 80a
81b 82b 83b 84a 85b 86d 87a 88c 89d 90c
91c 92d 93a 94d 95d 96a 97b 98c 99b 100d
101a 102c 103c 104b 105d 106c 107b 108a 109b 110d
111a 112d 113b 114c 115c 116d 117c 118b 119d 120b
Bankers ZONE ARENA
MOCK TEST JAIIB PAPER 3 LRAB
ANSWER AFTER EVERY 30 QUESTIONS
1. The Transfer of Property Act contains provisions relating to the transfer of:
a) Goods
b) Movable assets
c) Actionable claims
d) None of the above
2. Under FEMA 1999, there is a provision of appeal. The first such appeal can be made to:
a) High Court
b) Supreme Court
c) Director- Appeals
d) Appellate Tribunal
3. SARFAESI Act 2002 is applicable to housing finance companies whose names are notified by:
a) Reserve Bank
b) National Housing bank
c) Central Govt through finance ministry.
d) State Govt. concerned
4. Under what circumstances security cannot be enforced?

a. If it is an Agriculture Land.
b. When the amount due is less than Rs. One lac.
c. When the Borrower has repaid more than 80% of principal and interest.
d. All the above.
5. Individual borrowers are governed by the ......

a. RBI Act
b. BR Act
c. Indian contract Act
d. None of these
6. Under the RTI Act 2005, the period for providing information is:
a) 10 days
b) 20 days
c) 30 days
d) 40 days
7. What are the provisions of remuneration of the banking ombudsman:
a) he is eligible for remuneration and other perquisites

b) this will be determined by the RBI
c) this has to be borne by banks proportionately
d) all the above
8. Can the Banking Ombudsman resolve the dispute between banks or between bank and
its customer by arbitration reference:
a) No, the Banking Ombudsman has no arbitral powers.

b) Yes, if Banking Ombudsman himself feels and decides to do so.
c) No, as the Banking Ombudsman has no powers of Civil Court.
d) Yes, if both the parties to the complaint agree for the same.
9. Before enforcement of security interest i.e. sale of the security, the creditor, to show his intention
to take possession, is required to obtain possession of the security by giving.
a) A notice of 20 days
b) A notice of 40 days
c) A notice of 60 days
d) A notice of 90 days
10. A stipulation collateral to the main purpose of a contract, under the sale of Goods Act, is
called:
a) A condition
b) A warranty
c) A guarantee
d) An undertaking
11. A company has been sanctioned enhanced credit limits by its bank. For modification of
change with the register of Companies, which among the following forms are to be used.
a) Form 8
b) Form 8 and 10
c) Form 8 and 17
d) Form 10 and 17
12. Which of the following group is not included in term goods, as per the Sale of Goods
Act?
a) Shares & stocks

b) Stock and grass
c) Grass and shares
d) Actionable claims and stock
13. A suit is deemed to have been instituted (filed) in a court:
a) When the court fee has been paid

b) When plaint has been acknowledged by the court
c) When plaint is presented to the proper officer in the court
d) Any of the above
14. As per the Sale of Goods Act, the ____ goods mean the goods identified and agreed
upon, at the time of a contract of sale is made:
a) Future
b) Specific
c) Movable
d) Immovable
15. As per the Sale of Goods Act, the _____ goods which are to be manufactured by the
seller after making a contract of sale:
a) Future
b) Specific
c) Movable
d) Immovable
16. In case if non-resident persons, which of the following income is taxable:
a) Earned in India only

b) Earned while outside India only
c) Earned outside India, when in India only
d) All the above
17. As per the Sale of Goods Act, the ______ of the seller is terminated when the buyer gets
possession of the goods:
a) Warranty
b) Condition
c) Lien
d) Agreement
18. A bank has made payment across the counter, of a cheque issued as a crossed cheque
and the holder claims damages from the bank. Under such circumstances, the bank is liable:
a) To the drawer of the cheque

b) To the true owner of the cheque i.e. holder
c) To the drawer and also the payee
d) All the above
19. Under FEMA, the term authorized person means:
a) Authorized dealers, money changers, all banks

b) Authorized dealers and all banks
c) Authorized dealers and money changers
d) All the above
20. Under Prevention of Money Laundering Act, 2002, banks are required to maintain
record of cash transactions of the value of
a) Rs. 50000 and above

b) Rs. 1 lac and above
c) Rs. 10 lac and above
d) above Rs. 10 lac
21. Section 49-A of Banking Regulation Act makes provisions for which of the following?
(a) Declaration of bank rate (b) Restrictions on the type of business that the banks cannot
undertake (c) No person other than a bank is authorised to accept deposits withdrawable
by cheque (d) Acceptance of deposits by banks
a) Only (a)
b) Only (a) and (c)
c) Only (c)
d) Only (b)
22. Banks can undertake permitted business activities u/s 6 (1) of Banking Regulation Act
such as
(a) buying or selling of bullion (b) undertaking and executing trusts (c) undertaking the
administration of estates as executors and trustees (d) providing of safe deposit vaults
a) (a), (b) and (c) only

b) (b), (c) and (d) only
c) (a), (c) and (d) only
d) All of the above
23. RBI can make application to High Court for winding up of a banking company if
(a) government directs RBI to do so (b) company fails to maintain minimum paid-up capital
and reserves as per Sec 11 of BR Act (c) RBI has prohibited the bank to accept fresh deposits
u/s 35-4 of BR Act (d) bank has failed to remain entitled to carry on banking activities
a) Only (a), (b) and (d)

b) Only (a), (c) and (d)
c) (b), (c) and (d)
d) All of the above
24. The ‘fit and proper’ criterion is used by companies
a) while conducting the shareholders’ meeting
b) while appointing directors
c) while appointing the managing director
d) passing resolutions by the board members
25. Section 45s of RBI Act relates to which of the following?
a) Prohibits unincorporated association of persons from accepting deposits from public
b) Prohibits banks from accepting deposits from public
c) Allows government companies to accept deposits from public
d) Restricts the banks to pay counter interest
26. If a securitisation company fails to comply with RBI guidelines, under SARFAESI Act, who can
impose penalties and up to what extent:
a) RBI, fine up to Rs. 5 lac and if default continues, Rs. 10000 per day
b) SEBI, fine up to Rs. 5 lac
c) RBI, fine up to Rs. 1 lac
d) SEBI, fine up to Rs. 5 lac and if default continues, Rs. 10000 per day
27. Which of the following is incorrectly matched?
a) Section-8 of Banking Regulation Act: prohibitions for a banking Company for trading activities
b) Section-9 of Banking Regulation Act, 1949: holding immovable
property for period exceeding 7 years, except for its own use
c) Section 10(1) of Banking Regulation Act, 1949: banking company shall employ or be managed
by a managing agent
d) Section 5(0) of Banking Regulation Act, 1949: Central Government has the authority to specify
the activities that can be undertaken by a bank
28. Regional rural banks are
a) cooperative societies
b) companies created under Companies Act
c) body corporates created under a special statute
d) public sector undertakings of the Central Government
29. Section 6(1)(o) of Banking Regulation Act deals with which of the following aspects?
a) RBI powers to recommend amalgamation of a bank

b) Central Government authority to notify other forms of business of a banking companies
c) Central Government authority to order merger of a bank
d) RBI powers to supersede the management of a bank
30. For banking business, the banking companies are licensed by which of the following?
(a) RBI (b) Company Law Board (c) Registrar of Companies (d) Security and Exchange Board of
India
a) Only (a)
b) Only (a), (b) and (c)
c) Only (a) and (d)
d) All of the above
Answer: 1c 2c 3c 4d 5c 6c 7d 8d 9c 10b 11a 12d 13c 14b 15a 16a 17c 18a 19c 20c
21c 22d 23c 24b 25a 26a 27c 28c 29b 30a
31. RBI can issue direction to banks u/s 21 and u/s 35-A of Banking Regulation Act for (a) Section
21 in public interest (b) Section 35-A in public interest (c) Section 21 relating to loans (d) Section
35-A relating to loans
a) Only (a) and (b)

b) Only (a) and (d)
c) Only (b) and (c)
d) Only (c) and (d)
32. If a borrower has been outside India for some time, for the purpose of calculation of
Limitation , that period shall be:
a) included
b) included if bank could not prove his absence
c) excluded
d) excluded if the bank could prove his absence
33. RBI issues instructions on rate of interest to banks. The provisions u/s 21A of Banking
Regulation Act relate to
a) maximum interest rate ceiling imposed by RBI

b) method for fixing BPLR
c) rate of interest fixed by banks as per RBI guidelines are not subject to scrutiny by courts
d) cases of NPA accounts in which interest can be debited only when it is recovered
34. Bank B sanctioned a term loan to XYZ, repayable in 28 quarterly instalments. The party did
not pay few due instalments and bank wants to file suit. Which of the following is the most
appropriate answer?
a) Bank can file the suit within 3 years for the entire amount.
b) Bank can file the suit within 3 years for instalments not paid from the due date of respective
instalment.
c) Bank can file the suit within 3 years for instalments not paid from the due date of respective
instalment and also the balance amount, if the agreement provides for that.
d) Bank can file suit for due amount and for the balance amount bank will have to wait.
35. In which of the following processes are non-liquidated financial assets (NPAs) converted into
marketable securities (security receipts)?
a) Liquidation of NPAs
b) Factoring of NPAs
c) Securitisation of NPAs
d) Reconstruction of NPAs
36. RBI can remove the chairman or director of a bank under _____ against which appeal can be
made to the Central Government within ________ days from date of communication of such order.
a) RBI Act, 45 days

b) Banking Regulation Act, 30 days
c) Banking Regulation Act, 45 days
d) RBI Act, 30 days
37. For an Indian bank, as per Section-11 of Banking Regulation Act, the minimum paid-up capital
and reserves should be:
(a) Rs. 5 lac, if the bank is having business in more than one state
(b) Rs. 10 lac, if business is in more than one state and includes Mumbai or Kolkata or both
(c) Rs. 2 lac, if place of business is in the state and does not included Mumbai or Kolkata
a) Only (a), (b) and (c)

b) Only (a) and (b)
c) Only (b) and (c)
d) All of the above
38. In computing the period of limitation, the day from which such period is to be reckoned
shall be:
a) excluded
b) included
c) taken into account
39. ______ copies of balance sheet and profit and loss account, prepared by banks, are to be
submitted to RBI within ______ months. Banking companies are also to submit three copies to
a) 2 copies, 2 months, SEBI

b) 3 copies, 3 months, SEBI
c) 2 copies, 3 months, Registrar of Companies
d) 3 copies, 4 months, Registrar of Companies
40. Banks are required to obtain licence from RBI for commencing operation due to which of the
following reasons?
a) To make the provision of Banking Regulation Act applicable

b) To prevent indiscriminate formation of banking companies
c) To regulate the formation of a banking company
d) All of the above
41. Which of the following pairs is incorrectly matched?
a) Nationalised banks - Banking Companies Act, 1969

b) State Bank of India - SBI Act, 1955
c) State Bank Associate Banks - State Bank (Subsidiary Banks) Act, 1955
d) RRBs - RRB Act, 1976
42. The benefits provided by an employer to its employees attract payment of tax. It is called
a) income tax
b) perquisites tax
c) fringe benefit tax
d) super-benefit tax
43. Where a bank has been charging interest rate from a borrower at a rate prescribed by RBI,
such rates of interest cannot be questioned in a court of law under the provisions of which of the
following?
a) RBI directives
b) Section 16 of Usurious Loans Act
c) Section 21(A) of Banking Regulation Act
d) Usurious Loans Act, 1918
44. The provisions of SARFAESI Act are not applicable in case of a loan account in which the
amount due is
a) 20% or less of principal amount

b) less than 20% of principal amount
c) 20% or less of principal amount and interest
d) less than 20% of principal amount and interest
45. To fulfil its SLR requirement, a bank, among others, can invest in approved securities. It refers
to the securities
a) u/s 12 of Banking Regulation Act

b) u/s 20 of Indian Trust Act
c) u/s 18 of Government Securities Act
d) u/s 343 of the Companies Act
46. Name of a bank can be included in the 2nd schedule of RBI Act to make it a scheduled bank
if it is a/an:
(a) state cooperative bank
(b) company defined u/s 3 of Companies Act
(c) institution notified by the Central Government in this behalf
(d) company incorporated outside India under the foreign law

a) Only (a), (c) and (d)
c) Only (b) and (c)
d) All of the above
47. Which of the following statements is incorrect?
a) Winding up means closing a company and settling the accounts.

b) Moratorium means a legal authority to a debtor to postpone payment of dues for a
specified time.
c) Amalgamation means breaking a company into two or more parts for the betterment of
the company.
48. The SARFAESI Act provisions are applicable in which of the following cases?
a) Creation of security interest in any vessel

b) Creation of security interest in any aircraft
c) Creation of security interest in land
49. Who performs the functions and exercises the powers of supervision and inspection of banks
under RBI Act and BR Act?
a) SEBI
b) BFS
c) Board of Governors
d) Inspection Department of RBI
50. Action under provisions of SARFAESI Act cannot be initiated by which of the following?
a) Commercial banks
b) Financial banks
c) Regional Rural Banks
d) Securitisation and reconstruction companies
51. Which of the following statements is not correct with regard to publication of accounts and
balance sheet of a bank?
a) Publication has to be in a newspaper in circulation at the place where the principal office of
the banking company is located.
b) Publication should be within 6 months from end of the period to which the account and
balance sheet relate.
c) Publication can only be in a newspaper that is published every day.
d) Publication is undertaken u/s 31 of BR Act.
52. Majority of share capital in RBI is held by which of the following?
a) Public
b) Central Government
c) RBI
d) Financial institutions
53. Which of the following is/are correct regarding FEMA, 1999?
a) It replaced FERA, 1973

b) It extends to the whole of India
c) It applies to branches of banks outside India also
d) All of the above
54. Which of the following provisions does not match in the context of loans by a bank?
a) Banks cannot grant loans on the security of their own shares – Section 20 of BR Act
b) Banks cannot commit themselves for granting loans on behalf of their directors –
Section 20 of BR Act
c) For remitting a loan in the name of a director, RBIs permission is required –
Section 20-A of BR Act
d) RBI can use selective credit control over banks - Section 36-A BR Act
55. Where a bank is wound up, the holder of a cheque (issued by a customer
of bank having sufficient funds), becomes
a) trustee
b) beneficiary
c) debtor
d) creditor
56. Which of the following statements are correct regarding the cash reserve that is maintained
by banks with RBI u/s 42 of RBI Act?
a) It is called cash reserve ratio.

b) It is maintained at minimum of 3% and maximum of 20% of NDTLs.
c) No interest is paid by RBI on this amount.
d) It is maintained as a fortnightly average balance with RBI.
a) Only (a), (c) and (d)

c) Only (a), (b) and (d)
d) All of the above
57. U/s 26 of Banking Regulation Act, the banks submit to RBI, a return on _______ basis, within
_____ from close of the said period, relating to-------.
a) half-yearly, one month, inoperative deposits

b) yearly, 30 days, unclaimed deposits
c) yearly, 15 days, inoperative deposits
d) half-yearly, 30 days, unclaimed deposits
58. When a guaranteed loan is paid by the guarantor, he gets the rights of the principal debtors
and is said to be stepping in to the shoes of the debtor.
This right is known as ......
a. Right of Novation
b. Right of Substitution
c. Right of Subrogation
d. Guarantor’s right
59. The provision regarding indemnity are available in section ____ of Indian Contract Act
a) 121
b) 122
c) 123
d) 124
60. Under the SARFAESI Act who has the power to condone delay in filling of the particulars
a) an arbitrator
b) registrar
c) central registrar
d) registrar of assurances
Answers: 31c 32c 33c 34c 35c 36b 37b 38a 39c 40b 41a 42c 43c 44d 45b 46d 47c
48d 49b 50c 51c 52b 53d 54d 55d 56a 57b 58c 59d 60c
61. If the possession of the mortgaged properties is not given to the Mortgagee (The lender),
it is called ......
a) Simple mortgage
b) English mortgage
c) Usufructuary mortgage
d) Mortgage by non deposit
62. Which among the following with regard to Information Technology Act, 2000 is NOT, correct?
a) It shall extend to the whole of India

b) it does not apply to any offence or contravention there under committed
outside India by any person
c) it is an act to provide legal recognition for transactions carried out by
means of electronic data
d) It is the primary law in India dealing with cybercrime and electronic
Commerce
63. “Digital signature” is defined under which section of IT Act,2000?
a) Section 1
b) Section 2
c) Section 8
d) Section 6
64. Information Technology Act, 2000 directed the formation of a Controller of Certifying
Authorities to regulate the issuance of?
a) Data license
b) IP address in India
c) digital signatures
d) internet service provider license
65. Information Technology Act, 2000 amended which among the following to make them
compliant with new technologies?
i. Indian Penal Code, 1860 ii. Indian Evidence Act, 1872 iii. Banker’s Book Evidence Act, 1891 iv.
Reserve Bank of India Act, 1934
a) i only
b) i and iii only
c) ii, iii and iv only
d) All the above
66. Which among the following was established under IT Act, 2000 to resolve disputes arising
from the law?
a) Cyber Appellate Tribunal

b) Technology Disputes Bureau
c) Cyber Administrative Tribunal
d) IT Disputes Tribunal
67. Which among the following is/are the major insertions in IT Act,2000 through Information
Technology (Amendment) Act, 2008?
a) Section 66A which penalized sending “offensive messages”

b) Section 69, which gave authorities the power of “interception or monitoring or decryption
of any information through any computer resource
c) it introduced provisions addressing – pornography, child porn, cyber terrorism

d) All the above
68. Which among the following offence under IT Act,2000 has the maximum penalty of
imprisonment up to life?
a) Using password of another person

b) Securing access or attempting to secure access to a protected system
c) Publication for fraudulent purpose
d) Acts of cyberterrorism
69. Section 66A of IT Act,2000 has been struck down by Supreme Court’s Order dated 24th March,
2015 in which case?
a) Shreya Singhal vs. Union of India

b) Putt swamy v. Union of India
c) Shayara Bano vs Union Of India
d) Indra Sawhney and Union of India
70. In the year 2020, Indian Government banned 59 Chinese mobile apps, including TikTok
invoking which Section of IT Act, 2000?
a) Section 66A
b) Section 66F
c) Section 72A
d) Section 69A
71. The data privacy rules was introduced in IT Act, 2000 in the year?
a) 2008
b) 2011
c) 2015
d) 2020
72. A person, who desires to obtain any information under RTI Act, shall make a request in writing
or through electronic means in which language?
a) English
b) Hindi
c) official language of the area in which the application is being made
d) All the above
73. Under which section of RTI Act, 2005 the CPIO has to transfer the application concerning
another public authority?
a) Section 6(3)
b) Section 6(1)
c) Section 2(e)
d) Section 5(2)
74. Which Section of RTI Act, 2005 prescribe designation of Public Information Officers?
a) Section 4
b) Section 3
c) Section 5
d) Section 2
75. The person making request for the information shall be provided the information free of
charge under which of the following circumstances?
a) where a public authority fails to comply with the time limits specified
b) where is fee required is below Rs.10/-
c) where the information pertains to the life and liberty of the person
d) All the above
76. What is the normal time limit for disposal of the RTI request from the date of its receipt?
a) 15 days
b) 20 days
c) 30 days
d) 45 days
77. Under Section 6(3) of RTI Act, 2005 the CPIO has to transfer the application concerning
another public authority within how many days of its receipt?
a) three days
b) five days
c) two days
d) six days
78. An applicant making request for information shall not be required to give?
a) any reason for requesting the information

b) any other personal details except those that may be necessary for contacting him
c) Both A and B
79. Which section of RTI Act, 2005 prescribe “exemption from disclosure of information”?
a) Section 8
b) Section 7
c) Section 6
d) Section 5
80. If extra fees is requested by the CPIO, the period intervening between the despatch of
the said intimation and payment of fees shall be?
a) counted for the purpose of calculating the period of thirty days

b) excluded for the purpose of calculating the period of thirty days
c) taken as standard 5 days calculating the period of thirty days
81. Where an application for information or appeal is given to the Central/State Assistant Public
Information Officer, a period of _____ days shall be added in computing the period for response
specified under Section 7?
a) three days
b) five days
c) ten days
d) two days
82. If the information sought under RTI Act, 2005 concerns the life or liberty of a person, the
same shall be provided within?
a) 24 hours of its receipt

b) 48 hours of its receipt
c) 5 days of its receipt
d) 10 days of its receipt
83. Where a request has been rejected under RTI Act 2005, the CPIO shall communicate to the
person making the request?
a) the reasons for such rejection

b) the period within which an appeal against such rejection may be preferred
c) the particulars of the appellate authority
d) All the above
84. The Central Information Commission falls under which ministry?
a) Ministry of Home Affairs

b) Ministry of Personnel
c) Ministry of Human Resource Development
85. Who appoints the members and chairman of the Central Information Commission?
a) President alone can appoint
b) Chief Justice of Supreme of India
c) Committee under the leadership of Prime Minister
d) Home Minister of the country
86. What is the tenure of Chief Information Commissioner?
a) 5 years
b) 3 years
c) 6 years
d) Not fixed
87. The First Appellate Authority should decide on first appeals
a) Within 30 days from the receipt of the first appeals

b) In less number of days that the PIO concerned took to take a decision on the application
c) Within 45 days from the date of receipt of the appeal, if the reasons are recorded
d) Both a and c
88. Consider the following. A PIO:
a) Mala fidely denies information

b) Obstructed furnishing information
c) Knowingly gave incorrect, incomplete or misleading information. For which of these
actions can he / she be penalized by an Information Commission
d) All of these
89. A Public Information Officer will be liable to be imposed a monetary penalty for
a) refusal to receive an information application

b) not providing information within specified time limits
c) destroying information
d) Slide link
90. The time limit specified in the `RTI Act, 2005` for the Central / State Information
Commissions to decide on complaints is
a) 15 days
b) One Month
c) Two Months
d) No such time limit has been specified
Answer: 61b 62b 63b 64 c 65d 66a 67d 68d 69a 70d 71b 72d 73a 74b 75a 76c 77b
78c 79a 80b 81b 82b 83d 84b 85c 86a 87d 88d 89a 90d
91. What can be the maximum strength of the Information Commissioners?
a) 5
b) 7
c) 10
d) 12
92. Which of the following statement is/are correct about the Central Information Commission?
1. Post of Central Information Commission is derived from the RTI Act, 2005. 2. Chief Information
Commission and other commissioners can hold office for the period of 3 years. 3. On the advice
of Supreme court the President can remove the Chief Information Commission and other
commissioners.
a) Only 1 & 3
b) Only 3
c) Only 1 & 2
d) Only 1
93. The Second Schedule of the RTI Act, 2005 lists
a) the intelligence and security organizations established by the Central Government that
are exempted from the purview of the `RTI Act, 2005
b) All Departmental information of Central and State

c) All above
d) None
94. The Second Schedule of the RTI Act, 2005 can be amended by
a) Central Govt
b) State
c) Both
d) None
95. According to the `RTI Act, 2005`, as far as exempted organizations are concerned, the
exemption applies to
a) Certain organization of the Central Government as listed in the 2nd Schedule

a. and to the information submitted by these organizations to this Government
b) Certain organizations of the State Governments as may be notified by them in the Official
Gazette, but NOT to the information furnished by these organisations to the respective
State Governments
c) Both a & b
d) None
96. Where no provision is made by contract between the partners for the duration of their
partnership, or for the determination of their partnership, the partnership is called as:
a) Particular partnership
b) Partnership for a fixed term
c) partnership at will
97. Who can inspect the Register and filed documents at the office of the Registrar of Partnership:
a) Any Government servant

b) The Partners of the firm
c) The partners of the other firms
d) Any person
98. What is the dissolution of partnership means:
a) It means the dissolution of partnership between all the partners of a firm

b) It means the change in the relations of the partners
c) It means the reconstitution of the firm.
d) None of the above.
99. What would be the position, where a minor elects not to become a partner:
a) He shall be entitled to sue the partners for his share of the property and profits.
b) His rights and liabilities shall continue to be those of a minor under this section up to the
date on which he gives public notice.
c) His share shall not be liable for any acts of the firm done after the date of the notice.
d) All of the above
100. After a partner’s death the business is continued in the old firm name. Whether the legal
heirs of the deceased partner are liable for any acts of the firm:
a) The continued use of the name or of the deceased partner’s name as a part thereof shall
not of itself make his legal representative or his estate liable for any act of the firm done
after his death.
b) If the estate of the deceased person’s property is insufficient to make good, the personal
assets of the legal heirs will be liable for any of the acts done by the firm.
c) The estate of the deceased person is liable for any of the act done by the firm.
d) The legal heirs of the deceased partners shall be liable for any of the act done by the firm
after the demise of the partner
101. Whether a notice given to a partner, who habitually acts in the business of the firm of any
matter relating to the affairs of the firm, will be deemed as notice to the firm:
a) It will deem as personal information to that partner

b) Yes, it operates as notice to the firm, except in the case of a fraud on the firm committed by
or with the consent of that partner
c) It depends on the nature of the concerned partner whether he inform so to other partners
d) No, it will not deemed as notice to the firm.
102. What would be the position where a minor elects to become a partner.
a) His share in the property and profits of the firm shall be the share to which he was entitled
as a minor
b) His rights and liabilities as a minor continue up to the date on which he becomes a partner
c) He also becomes personally liable to third parties for all acts of the firm done since he was
admitted to the benefits of partnership
d) All of the above
103. When there is any change in the constitution of the firm, what would be the statue of the
continuing guarantee given to the firm
a) It shall be revoked as to future transactions from the date of any change in the constitution
of the firm.
b) Since it is the continuing guarantee, hence it be continuing.
c) Only the parties to the continuing guarantee can only decide over the matter.
104. Where a partner wilfully or persistently commits breach of agreements relating to the
management of the affairs of the firm or the conduct of its business, or otherwise so conducts
himself in matters relating to the business that it is not reasonably practicable for the other
partners to carry on the business in partnership with him. The other partner(s) may:
a) The partnership firm comes to an end automatically

b) The other partners may decide to leave the firm.
c) File a suit in the court for the dissolution of the firm.
d) The other partners may decide to expel the concerned partner
105. Who is not liable for the acts of the partners done after dissolution, if done before the
dissolution, until public notice is given of the dissolution
a) A partner who, not having been known to the person dealing with the firm to be a partner,
retires from the firm (sleeping or dormant partner).
b) The estate of a partner who dies
c) Who is adjudicated an insolvent
d) All of the above
106. Where a partner has paid a premium on entering into partnership of a fixed term, and the
firm is dissolved before the expiration of that term otherwise than by the death of a partner,
whether any repayment of the premium is permissible:
a) He will not be entitled for repayment of the premium if the dissolution is mainly due to his
own misconduct
b) He will not be entitled for repayment of the premium if the dissolution is in pursuance of an
agreement containing no provision for the return of the premium or any part of it
c) He shall be entitled to repayment of the premium or of such part thereof as may be
reasonable, regard being had to the terms upon which he became a partner and to the
length of time during which he was a partner
d) All of the above
107. Whether a partner after dissolution of the partnership firm, carry on the business in the
erstwhile business name of the firm
a) He can use the business name of the dissolved firm name, if he has brought the goodwill of
the firm.
b) He can’t use the business name of the dissolved firm.
c) He can use the business name of the dissolved firm, provided there was a contract
between the partners of the dissolved firm
d) Both the points mentioned at A and C are correct
108. The State Government may appoint Registrars of Firms for the purposes of this Act, every
Registrar shall be deemed
a) To be a Central Government Servant.

b) To be a public servant within the meaning of section 21 of the Indian Penal Code
c) To be State Government Servant
d) To be a private servant
109. What is the penalty for submission of false particulars to the Registrar of Firms:
a) He shall be punishable with imprisonment v- which may extend to three months, or with
fine, or with both
b) He shall be punishable with imprisonment which may extend to four months, or with fine,
or with both.
c) He shall be punishable with imprisonment which may extend to two months, or with fine,
or with both
d) He shall be punishable with imprisonment which may extend to one months, or with fine,
or with both
110. What is the amount of fee which shall accompany with the documents sent to the
Registrar of Firms, or which shall be payable for the inspection of documents in the custody of
the Registrar of Firms, or for copies from the Register of Firms:
a) The fees prescribed by each of the State shall not exceed the maximum fees specified in
Schedule I of the Indian Partnership Act, 1932
b) The State Government may by notification in the Official Gazette make rules describing
the schedule of fees.
c) Both A and B are correct.
111. On attaining the majority, the minor partner has to decide and give a public notice within
the prescribed period, whether he will continue as partner in the firm or will quit. What is that
prescribed period:
a) Within twelve months of his attaining majority or of his obtaining knowledge that he had
been admitted to the benefits of partnership, whichever date is later
b) Within three months of his attaining majority or of his obtaining knowledge that he had
been admitted to the benefits of partnership, whichever date is later
c) Within six months of his attaining majority or of his obtaining knowledge that he had been
admitted to the benefits of partnership, whichever date is later
d) Within nine month of his attaining majority or of his obtaining knowledge that he had been
admitted to the benefits of partnership, whichever date is later
112. In which conditions a person may be deemed as partner by estoppels or holding out:
a) When he by his conduct represents himself to be a partner in a firm

b) When knowingly permits himself to be represented, to be a partner in a firm.
c) When he expressly by words spoken or written let the others that he is a partner in a firm.
d) All of the above
113. A consideration is must for every contract. Partnership is also an agreement enforceable at
law, hence it is also a contract to carry on the business for profit. Whether consideration, which
is of essence for the formation of a contract, is essential for the formation of the partnership
a) Partnership is an extension of the law of agency hence no consideration is required

b) Yes, consideration is must for the formation of the partnership.
c) There is no need to have consideration in formation of the partnership since no
consideration is required to create an agency.
d) Only A and C are correct.
114. What shall be the treatment of goodwill in settling the accounts of a firm after dissolution:
a) The assessment of the amount of goodwill is a difficult task and cannot be precisely
calculated, hence it should not be considered
b) The goodwill shall, subject to contract between the partners, be included in the assets, and
it may be sold either separately or along with other property of the firm.
c) The goodwill is an intangible asset and should not be accounted for.
115. Which is the implied authority of a partner:
a) To carry on the business of the firm, in the usual way.

b) Compromise or relinquish any claim or portion of a claim by the firm
c) Submit a dispute relating to the business of the firm to arbitration
d) Open a banking account on behalf of the firm in his own name
116. Where partnership deed is silent, which of the following statement is NOT correct:
a) The partners are entitled to share equally in the profits earned, and shall contribute equally
to the losses sustained by the firm.
b) A partner making, for the purposes of the business, any payment or advance beyond the
amount of capital he has agreed to subscribe, is entitled to interest thereon at the rate of
18% per annum.
c) A partner is not entitled to receive remuneration for taking part in the conduct of the
business
d) Where a partner is entitled to interest on the capital subscribed by him such interest shall
be payable only out of profits
117. What is the liability of a retiring partner, after the date of his retirement'.
a) He shall not be liable for the act done by other partners during his tenure in the
partnership firm.
b) He and the partners continue to be liable as partners to third parties for any act done by
any of them which would have been an act of the firm if done before the retirement, until
public notice is given of the retirement
c) He shall be liable for the acts done by him only on behalf of the firm during his tenure,
towards the third party.
d) Only A and B are correct.
118. An outgoing partner may carry on a business competing with that of the firm and he may
advertise such business, but, subject to contract to the contrary, he may not:
a) Solicit the custom of persons who were dealing with the firm before he ceased to be a
partner. Agreements in restraint of trade.
b) Use the firm name
c) Represent himself as carrying on the business of the firm
d) All of the above
119. In which kind of partnership one partner has unlimited liability and other partner have
limited liability?
a) Partnership-at-will
b) Limited liability partnership
c) General partnership
d) Particular partnership
120. Which one of the following statements about limited liability partnerships (LLPs) is incorrect?
a) An LLP has a legal personality separate from that of its members.

b) The liability of each partner in an LLP is limited.
c) Members of an LLP are taxed as partners.
d) A limited company can convert to an LLP.
Answer: 91c 92a 93a 94c 95c 96c 97d 98b 99d 100a 101b 102d 103a 104c 105d
106d 107d 108b 109a 110c 111c 112c 113d 114b 115a 116b 117b 118d 119b 120d
BEST OF LUCK
Bankers ZONE ARENA
MOCK TEST JAIIB PAPER 3 LRAB
ANSWERS AFTER EVERY 25 QUESTIONS
1. A firm’s bank account should be opened in the name of the firm
only as Section_______of Indian Partnership Act restricts opening a
bank account on behalf of a firm_________
a) 19, by one partner;
b) 19 (1), by all partners;
c) 19 (2), in his own name;
d) 19 (2), by one partner.
2. In case of death of a partner, the operations in the bank account
are stopped. The operations can be allowed in the existing account:
a) with the consent of remaining partners if they want to
continue the firm;
b) with the consent of legal heirs and existing partners;
c) with the consent of remaining partners if they want to wind up
the business of the firm
d) at the discretion of the bank
3. Section 5(b) of……Act gives the definition of the term ‘Banking’
under which Act:
a) Contract Act
b) Negotiable Instruments Act
c) Banking Regulation Act
d) Transfer of Property Act
4. Once the dispute before the Banking Ombudsman is referred

to arbitration can new claim or counterclaim be made?
a) No, as the reference on the issues has already been made.

b) Yes, provided the claim and counterclaim are within the terms
of reference.
c) Yes, provided additional stamp duty is paid thereon.
d) No, because arbitration is by mutual consent so stage of claim
and counter claim does not arise.
5. When the company to be formed is to be One Person

Company what it is called:
a) Public Company:
b) Private company
c) Both (a) and (b)
6. If a bank has to shift its branch in (area), it requires RBI

permission u/s 23 of Banking Regulation Act:
a) same district
b) same city
c) same town
d) same village
7. A banking company requires from to undertake banking

business as per provision of Section -- of Banking Regulation
Act:
a) registration, RBI, 23
b) licence, RBI, 22
c) registration, Registrar of Companies, 24
d) certificate of commencement of business, Registrar of
Companies, 24
8. The Banking Regulation Act applies to cooperative banks:
a) as provided in the State cooperative Act

b) as provided in the Central cooperative Act
c) as provided in the modification of Section 56
d) as applicable to other commercial banks
9. The Companies Act applies to the banking companies:
a) irrespective whether the provisions of the Banking Regulation

Act
b) insofar as the provisions are consistent with the provisions of
Banking Regulation Act
c) in relation to their registration and winding up
d) all of the above

10. On which of the following a collecting bank will get protection
u/s 131 of NI Act:
a. Crossed draft
b. Crossed promissory note
c. Crossed bill of exchange
d. Crossed cheque
11. Can the order of Central Government appointing Presiding

Officer of the DRT Tribunal be challenged in any Court?
a) Yes, before the Appellate Tribunal.

b) No.
c) No, unless the High Court permits for it
d) Yes, under Constitution Article 226 before the High Court.
12. What is the maximum time for settlement of a claim before

passing an award by the banking ombudsman?
a) within 15 days from the date of receipt of complaint

b) within 1 month from the date of receipt of complaint
c) within 2 months from the date of receipt complaint
d) within 3 months from he date of receipt of complaint
13. In a contract of indemnity, there are parties......

a) one party, the indemnifier
b) two parties, the insurer and the insured
c) two parties, the indemnifier and the indemnity holder
d) two parties, the guarantor and the beneficiary
14. A banking company shall be deemed to be unable to pay its

debts if it has refused to meet any lawful demand made at
any of its offices or branches within……working days if such
demand is made at a place where there is an office, branch
or agency of the Reserve Bank, or within……..working days
if such demand is made elsewhere.
a) 1, 2
b) 2, 3
c) 3, 5
d) 5, 7
15. If the acknowledgement of debt by the borrower is for part

amount only......
a) the limitation is extended for the entire loan
b) the limitation is extended for that portion of the loan
c) the limitation is not extended for the loan
d) such method of extension of limitation is unlawful.
16. In case of pledge, the possession and ownership of the goods
remains with......
a) possession with bank and ownership with borrower
b) possession with the borrower and ownership with the bank
c) possession and ownership with borrower
d) possession and ownership with the bank
17. In case of---- goods, Banker’s lien is not applicable.
a) owner’s goods
b) stolen goods
c) finished goods
d) None of these
18. If an Indian bank has place of business in more than one state
and no office in Mumbai or Kolkata, what is the amount of minimum
capital:
a. Rs.1 lac
b. Rs.2 lac
c. Rs.5 lac
d. Rs.10 lac
19. RBI has issued KYC guidelines as per powers given under the
provisions of *
a) Section 35 A of Banking Regulation Act
b) Section 35 of RBI Act
c) Section 35 of Banking Regulation Act
d) Section 35 A RBI Act
20. One person company (OPC) can be established under which
section of Companies Act,2013
a) Section 2(62) of companies act 2013
b) Section 5 (69) of companies Act 1956
c) Section 8 (2) of companies Act 2013
d) Section 2(62) of Companies Act 1956
21. What is not true about Limited Liability Partnership:
a) It is a body corporate with separate legal entity from its partners.
b) LLP is liable to the extent of its assets.
c) No partner is liable on account of the independent or
unauthorized action of other partners or for their misconduct.
d) Registration is optional in LLP
22. As per the Companies Act 2013, every listed public company shall
have at least ……. of the total number of directors as independent
directors.
a) One -third
b) Two-third
c) One-half
d) 15
23. According to the which section of the RBI Act of 1934, RBI is liable
to pay the value of banknote to its holder:
a) Section 22
b) Section 24
c) Section 26
d) Section 28
24. Section 123 of the Companies Act 2013 deals with___:
a) Unpaid Dividend Account
b) Declaration of dividend
c) Remuneration of auditors
d) Auditors to attend general meeting
25. Section 270 of the Companies Act 2013 deals with___:
a) Rehabilitation and insolvency fund
b) Declaration of dividend
c) Remuneration of auditors
d) Modes of winding up
ANSWERS: 1c 2c 3c 4b 5b 6a 7b 8c 9c 10d 11b 12b 13c 14c 15a

16a 17b 18c 19a 20a 21d 22a 23c 24b 25d
26. Which section of The Companies act 2013 deals with the Effect of
registration?
a) Section 12 of The Companies act 2013
b) Section 9 of The Companies act 2013
c) Section 14 of The Companies act 2013
d) Section 20 of The Companies act 2013
27. Section 25 of The Companies act 2013 deals with_______?
a) Alteration of memorandum
b) Document containing offer of securities for sale to be deemed
prospectus.
c) Advertisement of prospectus
d) Service of documents
28. Section 29 of The Companies act 2013 provides _:
a) Public offer of securities to be in dematerialized form
b) Alteration of articles
c) Registered office of the company
d) Red herring prospectus
29. Section 12 of The Companies act 2013 deals with_______?
a) Registered office of the company
b) Formation of company
c) Service of documents
d) Articles
30. Which section of The Companies act 2013 deals with the
Prohibition on acceptance of deposits from public?
31. Which of the following section in the Companies Act, 2013
mentions about Red Herring prospectus:
a) 18 of the Companies Act, 2013
b) 25 of the Companies Act, 2013
c) 21 of the Companies Act, 2013
d) 32 of the Companies Act, 2013
32. Negotiable instruments are defined under ______.
a) Section 52 of the Banking regulation act, 1949
b) Section 25 of the Reserve bank of India act, 1934.
c) Section 13 of the Negotiable instruments act, 1881.
d) Section 14 of the companies act, 1956.
33. Under the provisions of the Transfer of Property Act, 1882, the
seller is duty bound to disclose:
a) Patent defects in the property
b) Latent defects in the property
c) both A and B
d) neither A nor B
34. What is the default interest payable under section 63 and 63 A of
the Transfer of Property Act, 1882?
a) 8% per annum
b) 9% per annum
c) 10% per annum
d) Interest rate is not mentioned in the sections
35. Where the mortgage is illegal for want of registration but the
mortgagee continues in possession of the mortgaged property, a valid
mortgage comes in existence after the expiry of:
a) 5 years
b) 10 years
c) 12 years
d) 20 years
36. Which of the following are valid illustrations of an anomalous
mortgage?
a) A possessory mortgage without a conditional sale

b) A possessory mortgage with a right to cause the mortgaged
property to sale in the event of default in payment
c) both A and B
d) neither A nor B
37. Which of the following instruments have been excluded by the
application of section 137 of the Transfer of Property Act, 1882?
a) Shares
b) Bills of Exchange
c) both A and B
d) neither A nor B
38. Which of the following is ‘English mortgaged’ as defined by the

Transfer of Property Act, 1882?
a) Where on payment of certain sum by the mortgagee the
property passes to him
b) Where there are two sales made, one at the start of mortgage
with the condition that after the mortgage amount is paid back,
the property will sell back
c) Where the mortgagee gets the possession of the property with
the rights of profits, rents etc.
d) Where the mortgage is made by submitting the title deed
39. Which of the following is the time limit given under Section 17 of
the Transfer of Property Act, 1882?
a) Life of the transferee
b) A period of 18 years from the date of transfer
c) either A or B whichever is longer
d) neither A nor B
40. Which of the following is true regarding the ‘right of subrogation’
as defined under the Transfer of Property Act, 1882?
a) Any person redeeming the property under provisions of section

91 of the Act, has the same rights as the mortgagor against the
mortgagee
b) Any person redeeming the property under provisions of section
91 of the Act, has the same right as the mortgagee against the
mortgagor
c) either A or B depending on the facts of the case
d) neither A nor B
41. Which of the following properties can be transferred under the
Transfer of Property Act, 1882?
a) Salary of a public officer
b) Right to sue
c) both A and B
d) neither A nor B
42. Which of the following section of the Transfer of Property Act,
1882 deal with the appointment of a receiver?
a) Section 68
b) Section 68A
c) Section 69
d) Section 69A
43. Which of the following sections of the Transfer of Property Act,
1882 do not apply to persons governed by Muhammadan law?
a) Section 55
b) Section 11
c) both A and B
d) neither A nor B
44. Which of the following statements is true regarding definitions
given under the Transfer of Property Act, 1882?
a) Term ‘instrument’ means both testamentary and non-
testamentary instrument
b) Term ‘actionable claims’ include debt secured by mortgage on
the residential house
c) The term ‘attached to earth’ will not means trees and shrubs
d) The term ‘attested’ means attested by two or more witness
45. Which of the following statements is true regarding suit for
redemption of mortgaged property under the Transfer of Property
Act, 1882?
a) Only mortgagor can bring the suit
b) Any creditor of the mortgagor who has obtained a decree, can
bring the suit
c) Any creditor irrespective of decree for the same, can bring the
suit
d) Any surety for the payment of the mortgage debt, can bring the
suit
46. C and B are two brothers living as joint family. They decided to
have a partition. In the partition deed the house with well fell on C,
and B was allowed to take water from the well out of brotherly love.
The right to take water will be in form of:
a) Easement
b) Revocable license
c) Irrevocable license
d) Interest in the property
47. Section 5 of the Transfer of Property Act, 1882:
a) Applies to property sold in auction sale
b) Does not apply to property sold in auction sale
c) Applies to compromise of doubtful rights
d) Does not apply to compromises of doubtful rights
48. The basic ingredients of the doctrine of lis pendens are:
a) The suit should be collusive
b) Property should have been transferred or otherwise dealt with
c) A litigation should be pending in a court of competent
jurisdiction
d) The suit must not be related to a specific immovable property
49. The provisions of section 60A of the Transfer of Property Act, 1882
do not apply when_________.
a) The mortgagor is in possession of the property
b) The mortgagor has recovered possession of the property
c) The mortgagee has defaulted in receiving payment
d) The mortgagor has not defaulted in making payments
50. The provisions of conditional transfer is provided in the Transfer
of Property Act, 1882:
(a) section 25
(b) section 26
(c) section 27
(d) section 29.
ANSWERS: 26b 27b 28a 29a 30a 31d 32c 33b 34b 35c 36a 37c
38b 39b 40a 41d 42d 43b 44d 45d 46c 47b 48c 49b 50a
51. Within how many days after receiving a reply on the First Appeal,
a Second Appeal can be filed under RTI Act 2005:
a) 90 days
b) 2 months
c) 30 days
d) 45 days
52. The Right to Information Act, 2005 replaced which Act?
a) Information Technology Act, 2000
b) Freedom of Information Act, 2002
c) Delimitation Act, 2002
53. What is the fee paid by an Indian National to file a First Appeal
under RTI Act if no reply is received?
a) Rs. 10
b) Rs. 50
c) Rs. 20
54. What is the age criteria to file an RTI application?
a) 18 years and above
b) 45 years and above
c) 16 years and above
d) No age bar
55. The Preamble to the RTI Act states that informed citizenry and
transparency of information is vital to_________.
a. Eradicate Corruption
b. Promote Corruption
c. Contain Corruption
d. Measure Corruption
56. Consider the following statements related to the RTI Act, 2005.
i) No court shall entertain any suit, application or other proceedings in
respect of any order made under this Act.
ii) No such order shall be called in question otherwise than by way of
an appeal under this Act.
iii) Democracy requires an informed citizenry and transparency of
information which are vital to its functioning and also to contain
corruption and to hold Governments and their instrumentalities
accountable to the governed.
Which of the above statement(s) is true?
a) Only (i)
b) Only (ii)
c) Only (i) and (ii)
d) All of them
57. Power of securities and exchange board (SEBI) to regulate issue

and transfer of securities is dealt under which of the following section
of Companies Act,2013:
a) Section 24
b) Section 25
c) Section 26
d) Section 27
58. Which of the following is correct with respect to Shelf Prospectus:

a) It does not need a separate prospectus for each offering.
b) It is a prospectus that lacks complete particulars about the
quantum or price of the securities.
c) The validity period of the shelf prospectus cannot exceed
more than 2 years.
d) A and C
59. Which of the following section in the Companies Act,2013

mentions about Red Herring Prospectus:
A) Section 30
B) Section 31
C) Section 32
D) Section 33
60. According to Section 29, Demat (Dematerialized form) is

compulsory for which of the following:
A) Companies going for public offer.
B) Companies going for private placement.
C) Prescribed unlisted companies.
D) A and C
61. Which of the following are correct with respect to Private

Placement.
1. It is mentioned in Section 40 of Companies Act ,2013
2. Maximum limit for the private placement in a financial year cannot
exceed 200.
3. Private placement must be made within 60 days.
a) 1 and 2
b) 2 and 3
c) 1 and 3
d) 3 only
62. Which of the following legislations regulate the public issue in

India:
a) Companies Act 2013
b) Securities (Contract) Regulation Act,1952
c) Securities and Exchange Board of India,1992
d) All of the above
63.Which of the following cases will be acted upon based on Section

38, Companies Act,2013:
a) A person fraudulently inducing persons to invest money in
securities.
b) A person making an application in a fictitious name.
c) Mis-Statements in the prospectus.
d) A and C
64. According to Section 43 of Companies Act,2013 ,How many types

of share capital exists
a) 2
b) 3
c) 4
d) 5
65. Which of the following Section of the Companies Act,2013
mentions about the voting rights of the Members:
a) Section 47
b) Section 45
c) Section 46
d) Section 49
66. Preference shareholders have the right to vote in which of the

following cases:
a) On every resolution of the company.
b) Resolutions which affect their rights.
c) Resolution for winding up of the company.
d) A and B.
e) B and C
67. Company can issue shares at premium under which of the

following sections of Companies Act,2013
a) Section 50
b) Section 49.
c) Section 51.
d) Section 52
68. Sweat Equity Shares can be issued to which of the following

employees:
a) A permanent employee of the company who is working in India.

b) A permanent employee of the company who is working outside
India.
c) A director of the company working in the subsidiary of the
holding company.
d) A director of the company working outside India.
e) All of the above
69. CRR is mentioned in Companies Act 2013.What does CRR stand for
a) Current Redemption Reserve.
b) Cash Reserve Ratio
c) Capital Redemption Reserve
d) Cash Redeemable Reserve
70. Which section of companies act mentions about the transfer and
transmission of shares
a) Section 52
b) Section 53
c) Section 54
d) Section 56
71. Which of the following is the new category of company introduced

in Companies Act 2013
a) Public Private Partnership
b) Two Person Company
c) Limited Liability Partnership
d) One Person Company
72. Which among the following is type of share issued to existing
shareholders to increase its subscribed share capital:
a) Bonus Shares
b) ESOP
c) Right Issue
d) Preference Shares
73. Which of the following alterations of share capital requires the
approval of NCLT (National Company Law Tribunal)
a) Increase of authorized share capital.
b) Consolidation and division all or any share capital which results
in increase in voting percentage of shareholders.
c) Conversion of all or any of the fully paid-up shares into stock.
d) Cancellation of shares
74. Section 62, Companies Act 2013 mentions about further issue of
share capital is applicable to which of the following companies?(1 M)
a) Private Companies.
b) Public Companies.
c) Listed Companies.
d) Unlisted Companies
e) All of the above
75. Which of the following section of Companies Act,2013 deals with

bonus shares:
a) Section 45
b) Section 52
c) Section 59
d) Section 63
ANSWERS: 51a 52b 53d 54d 55c 56d 57a 58a 59c 60d 61b 62d
63b 64a 65a 66e 67d 68e 69c 70d 71d 72c 73b 74e 75d
76. Bonus shares shall be issued from which of the following reserves:
a) Capitalizing reserves created by revaluation of assets.
b) Capital Redemption Reserve Account
c) Free Reserves
d) B and C
77. Buyback means repurchase by a company of its own shares. Which

of the following is correct with respect to buy back shares:
a) It is exercised to increase the number of shares of a company.
b) It eliminates the threats from shareholders who may be looking
for a controlling stake.
c) A company cannot buy back its equity shares.
d) A and B.
78. Which of the following are incorrect with respect to debentures:

a) A company may issue debentures with an option to be
converted into shares wholly or partly.
b) It can be issued with or without voting rights.
c) A company cannot issue debentures to more than 500 people
without appointing a debenture trustee.
d) A and C
79. As per Companies Act 2013, what is maximum tenure of

preference shares except for infrastructure projects?
a) 20 years
b) 15 years
c) 10 years
d) 5 years
80. Declaration of Dividend is mentioned in which of the following
Sections of Company Act 2013
a) Section 120
b) Section 121
c) Section 122
d) Section 123
81. As per the Companies Act, 2013, declaration of dividends can be
declared out of surplus reserves on which of the following conditions
a) The amount of declared dividend can’t be more than that of an
average rate of dividends which was declared in past 2 years.
b) The amount drawn from the reserves shall not exceed the
amount which is equal to 1/10th of the sum paid up capital and
free reserves.
c) The remaining balance of the reserve shall not fall below 20% of
the paid- up capital.
d) B and C.
82. The amount in the Unpaid Dividend Account of companies can be
transferred to the Fund Investor Education and Protection Fund if it
remains unpaid or unclaimed for a period of _____ years
a) 4
b) 5
c) 6
d) 7
83. What is the procedure for removal of an auditor before the expiry
of the term:
a) An ordinary resolution by the board of Directors of the Company.
b) An ordinary resolution by the Shareholders of the Company.
c) Special resolution with the approval by the Central Government
d) An ordinary resolution by SEBI.
84. According to provisions of Companies Act, 2013 an individual

auditor cannot be appointed for more than ____ consecutive years?
a) 4
b) 5
c) 6
d) 7
85. Which of the following is responsible for prescribing the standards

of auditing according to Section 143(10) of Companies Act:
a) Central Government
b) National Financial Reporting Authority
c) Institute of chartered Accountants of India
d) B and C
86. Abridged prospectus means__________
(a) The standards of accounting or any addendum thereto for

companies or class of companies referred to in section 133
(b) The articles of association of a company as originally framed or as
altered from time to time or applied in pursuance of any previous
company law or of this Act
(c) A memorandum containing such salient features of a prospectus as
may be specified by the Securities and Exchange Board by making
regulations in this behalf
(d) The standards of auditing or any addendum thereto for companies
or class of companies referred to in sub-section (10) of section 143
87. ________________means a company having the liability of its

members limited by the memorandum to the amount, if any, unpaid
on the shares respectively held by them.
(a) Company limited by guarantee

(b) Company limited by shares
(c) Both (a) and (b)
(d) None of these
88. The memorandum of a company is dealt under:
(a) section 12
(b) section 15
(c) section 6
(d) section 4
89. The company shall furnish to the Registrar verification of its

registered office within a period of ________ of its incorporation in
such manner as may be prescribed.
(a)60 days
(b)45 days
(c) 30 days
(d)15 days
90. Section 203 of the Companies Act 2013 deals with___?
a) Managing director,
b) Company secretary
c) Chief Financial Officer
d) All of the above
91. What is the punishment for the company If any of the provisions
of sections 139 to 146 is contravened?
a) Fine of Rs. 25000 up to 3 lakh rupees.

b) Fine of Rs. 20000 up to 2 lakh rupees.
c) Fine of Rs. 25000 up to 5 lakh rupees.
d) Fine of Rs. 10000 up to 5 lakh rupees.
92. Which section of The Companies act 2013 deals with Rectification
of the name of the company:
93. Every unlisted company is required to appoint Internal Auditor in
the following cases:
a) Outstanding deposits of Rs. 25 five crore rupees or more at any

point of time during the preceding financial year
b) Paid up share capital of Rs. 50 crore rupees or more during the
preceding financial year or Turnover of Rs. 200 crore rupees or
more during the preceding financial year.
c) Outstanding loans or borrowings from banks or public financial
institutions exceeding Rs. 100 crore rupees or more at any point
of time during the preceding financial year.
d) All the options are correct
94. Every private limited company is required to appoint Internal
Auditor in the following cases:
a) Outstanding loans or borrowings from banks or public financial

institutions exceeding Rs. 100 crore rupees or more at any point
of lime during the preceding financial year
b) Turnover of Rs. 200 crore rupees or more during the preceding
financial year.
c) Private company is not required to appoint Internal Auditor.
d) Options mentioned at A and B are correct (i.e. if any of the
condition is fulfilled, the concerned company is required to
appoint Internal Auditor.
95. In case of all listed companies and such public companies which
have a net worth of more than Rs. 1 crore rupees and turnover of more
than Rs. 10 crore rupees, the financial statements may be sent:
a) Where Shareholding is held otherwise than by dematerialised

format, to such members who have positively consented in
writing for receiving by electronic mode.
b) By despatch of physical copies through any recognised mode of
delivery as specified under section 20 of the Act, in all other
cases.
c) By electronic mode to such members whose shareholding is in
dematerialised format and whose email Ids are registered with
Depository for communication purposes
d) All the options are correct.
96. The Registrar of Companies may remove the name of a company
from the register of companies in terms of section 248(1)of the
Companies Act, 2013. However, the following categories of companies
shall not be removed from the register of companies:
a) Companies where inspection or investigation is ordered and

being carried out or actions on such order are yet to be taken up
or were completed but prosecutions arising out of such
inspection or investigation are pending in the Court.
b) Listed companies
c) Companies that have been delisted due to non-compliance of
listing regulations or listing agreement or any other statutory
laws.
d) All the options are correct.
97. How the President, the Chairperson or any Member may of NCTL,
resign from his office:
a) By notice in writing under his hand addressed to the Central

Government, resign from his office.
b) By notice in writing under his hand addressed to the President
of India, resign from his office.
c) By notice in writing under his hand addressed to the Chairperson
of the IBBI, resign from his office.
d) By notice in writing under his hand addressed to the Chief Justice
of Supreme Court, resign from his office.
98. The Chairperson or a Member of the Appellate Tribunal (NCLT)
shall hold office as such from the date on which he enters upon his
office, but shall be eligible for re-appointment
a) For a term of 5 years/for another term of 5 years

b) For a term of 3 years/for another term of 3 years
c) For a term of 2 years/for another term of 2 years
d) For a term of 4 years/for another term of 4 years
99. Chairperson of Appellate Tribunal (NCLT) shall hold Office as such
until he attains:
a) The age of 65 years

b) The age of 70 years
c) The age of 75 years
d) The age of 62 years
100. Every application or petition presented before the Tribunal and
every appeal filed before the Appellate Tribunal shall be dealt:
a) within nine months.
b) within six months.
c) within three months.
d) within twelve months.
ANSWERS:76d 77b 78b 79a 80d 81b 82d 83c 84b 85a 86c 87b
88d 89c 90d 91c 92a 93d 94d 95d 96d 97a 98a 99b 100c
BEST OF LUCK
Bankers ZONE ARENA
MOCK TEST JAIIB PAPER 3 LRB MODULE C
ANSWERS AFTER 20 QUESTIONS
1.DRT were established under Section---- of ----------Act:
a) 26, RBI Act 1934
b) 3, Recovery of Debts Due to Banks and Financial Institutions
Act, 1993,
c) 29, Banking Regulations Act 1949
d) 22, Legal Services Authorities Act 1987
2. What is the amount of fee payable in respect of appeal under
section 20 of the RDB Act, 1993, when the amount of debt due is
Rupees 10 lakh or more but less than Rupees 30 lakh:
a) Rs. 20000.
b) Rs. 15000
c) Rs. 10000
d) Rs. 5000.
3. An application for review of order may be made to the Appellate
Tribunal, who passed the order, but no application for review shall
be made after the expiry of a period of..................from the date of
the order.
a) Sixty days
b) Forty-five days
c) Thirty days
d) Fifteen days
4. Section 23 of SARFAESI Act has been amended to give banker
powers to:
a) Take possession after 30 days instead of 60 days
b) To give sale notice of 15 days instead of 30 days
c) Publish notice of possession in one newspaper instead of 2
d) Initiate possession even if secured asset is not registered with
CERSAI
5. Where an appeal is preferred by a person referred to in section 21

of the RDB Act, such appeal shall not be entertained by the Appellate
Tribunal unless such person has deposited with the Appellate
Tribunal of the amount of debt so due from him as determined by
the Tribunal under section 19 of the Act:
a) 50%
b) 40%
c) 30%
d) 20%
6. The proceedings of the Appellate Tribunal (DRAT) shall be
conducted in:
a) English
b) Hindi
c) Any Regional Language
d) English or Hindi
7. Section 2(g) of Recovery of Debt dues to bank & financial
Institutions,1993 defines ‘Debt’ which does not include the
following:
a) Payable under a decree
b) Payable under an order of any civil court or any arbitration
award.
c) Legally Unenforceable on the date of the application.
d) Secured, unsecured or assigned
8. When did The Recovery of Debt and Bankruptcy Act 1993, come
into force?
a. 01 April 1993
b. 01 March 1993
c. 01 May 1993
d. 24 June 1993
9. Which section of The Recovery of Debt and Bankruptcy Act 1993
deals with the Composition of Appellate Tribunal?
a. Section 12 of The Recovery of Debt and Bankruptcy Act 1993
b. Section 9 of The Recovery of Debt and Bankruptcy Act 1993
c. Section 14 of The Recovery of Debt and Bankruptcy Act 1993
d. Section 20 of The Recovery of Debt and Bankruptcy Act 1993
10. Section 25 of The Recovery of Debt and Bankruptcy Act 1993
deals with_______?
a. Application of certain provisions of Income-tax Act
b. Modes of recovery of debts
c. Transfer of pending cases
d. Chairperson, Presiding Officer and staff of Appellate Tribunal
and Tribunal to be public servants
11. Deposit of amount of debt due, on filing appeal, is provided in
section____ of The Recovery of Debt and Bankruptcy Act 1993
a) Section 24 of The Recovery of Debt and Bankruptcy Act 1993
b) Section 22 of The Recovery of Debt and Bankruptcy Act 1993
c) Section 21 of The Recovery of Debt and Bankruptcy Act 1993
d) Section 23 of The Recovery of Debt and Bankruptcy Act 1993
12. which of the following statement regarding security enforcement
is not true:
a) Security interest can be enforced by secured creditor without
intervention of the Court
b) If funds are raised through debt securities, then action can be
initiated even if secured debt was not classified as NPA
c) No action can be taken if the debt is time barred or it involves
agricultural land
d) No action can be taken when amount of due is more than Rs. 5
lakhs or when amount due is less than 40% of the principal
amount and interest thereon
13. Section 3(1)(b) of SARFAESI Act provides that the net owned fund
of an asset reconstruction company should:
a) Not be less than two crore rupees or such higher amount as the
Reserve Bank may notify
b) Not be less than three crore rupees or such higher amount as
the Reserve Bank may notify
c) Not be less than four crore rupees or such higher amount as
the Reserve Bank may notify
d) Not be less than one crore rupees or such higher amount as the
Reserve Bank may notify
14. An application under Section 5A of the SARFAESI Act for transfer

of applications pending before two or more Debt Recovery Tribunals
may be filed by an Asset Reconstruction Company before:
a) High Court
b) National Company Law Appellate Tribunal
c) Special Court
d) Debt Recovery Appellate Tribunal
15. What is the time limit within which the secured creditor can
initiate an action for enforcement of security:
a) If the liability is not discharged within 60 days of receipt of
notice from the secured creditor
b) If the liability is not discharged within 30 days of receipt of
c) If the liability is not discharged within 45 days of receipt of
d) If the liability is not discharged within 90 days of receipt of
16. In case of appeal by the borrower, what is the amount to be
deposited with the Appellate Tribunal:
a) Fifty percent of the amount of debt due
b) Forty percent of the amount of debt due
c) Sixty percent of the amount of debt due
d) Twenty percent of the amount of debt due
17. What is the time period for the validity of notice of caveat under
SARFAESI Act,2002
a) 60 days from the date of lodgement
b) 90 days from the date of lodgement
c) 120 days from the date of lodgement
d) 30 days from the date of lodgement
18. What is the eligibility of an authorised officer appointed by a
secured creditor:
a) He should not be below Deputy General Manager of a public
sector bank or equivalent
b) He should not be below Chief Manager of a public sector bank
or equivalent
c) He should not be below Assistant Manager of a public sector
bank or equivalent
d) He should not be below Senior Manager of a public sector bank
or equivalent
19. Which of the following is not an essential ingredient to initiate

action for enforcement of security under this act:
a) There must be a security agreement in which borrower is under
liability of the secured creditor
b) There must be a default in repayment of secured debt or
instalment thereof
c) The account must be classified as Non-Performing Asset
d) The security interest must be at least Rs. 20,000
20. If there are more than one borrower, how should the demand
notice be served:
a) Demand notice must be served only on those borrowers whose
borrowing is more than 40% of the debt
b) Demand notice must be served on any one of the borrowers
c) Demand notice must be served on the person whose name
appears first in the list
d) Demand notice must be served on all borrowers
ANSWERS: 1b 2a 3c 4d 5a 6d 7c 8d 9b 10b 11c 12d 13a 14d
15a 16a 17b 18b 19d 20d
21. In case of joint financing OR consortium under the SARFAESI Act,

a creditor can:
a) Take any action independently
b) Take action only when it is agreed upon by creditors holding
60% of the amount outstanding on record date
c) Take action only when it is agreed upon by creditors holding
50% of the debt outstanding as on that date
d) Take action with the permission of all the other creditors
involved
22. Which of the following does not fall under financial asset:
a) A mortgage, charge, hypothecation or pledge of movable
property
b) Any right or interest in the security, whether full or part
underlying such debt or receivables
c) Any financial assistance
d) Prepaid expenses undertaken with respect to a movable or
immovable property
23. If the payment is not made by the borrower in the prescribed
time after receipt of notice, which of the following steps cannot be
taken by the secured creditor:
a) Take possession of the secured assets of the borrower including
the right to transfer by way of lease, assignment or sale for
realising the secured asset
b) Appoint any person (manager) to manage the secured assets,
the possession of which has been taken over by the secured
creditor
c) To sell the assets of the borrower without further procedures
that is in the possession of the secured creditor and utilise the
amount against the amount due by the borrower
d) Takeover the management of business of the borrower
24. What is the time limit within which any person aggrieved by any
measure taken by secured creditors file an application to the Debt
Recovery Tribunal:
a) Within 45 days from the date on which such measure had been
taken
b) Within 30 days from the date on which such measure had been
taken
c) Within 15 days from the date on which such measure had been
taken
d) Within 60 days from the date on which such measure had been
taken
25. What is the time limit within which any person aggrieved by any
measure taken by secured creditors file an application to the Debt
Recovery Tribunal:
a) Within 45 days from the date on which such measure had been
taken
b) Within 30 days from the date on which such measure had been
taken
c) Within 15 days from the date on which such measure had been
taken
d) Within 60 days from the date on which such measure had been
taken
26. What happens when the Debt Recovery Tribunal does not
dispose of the case under Section 17 (Right to appeal by borrower)
within the prescribed time limit:
a) The Appellate Tribunal make take such cases on its own motion
and may make an order for expeditious disposal
b) Only the creditor may make an application to Debt Recovery
Appellate Tribunal and the Appellate Tribunal may make an
order for expeditious disposal
c) Such cases stand transferred to the Appellate Tribunal
d) Any party to the application may make application to Debt
Recovery Appellate Tribunal and the Appellate Tribunal may
make an order for expeditious disposal
27. What is the time limit within which appeal against penalties can
be made SARFAESI ACT:
a) 90 days from the date on which such order was passed
b) 30 days from the date on which such order was passed
c) 120 days from the date on which such order was passed
d) 60 days from the date on which such order was passed
28. What is the time limit within which appeal against penalties can
be made:
a) 90 days from the date on which such order was passed
b) 30 days from the date on which such order was passed
c) 120 days from the date on which such order was passed
d) 60 days from the date on which such order was passed
29. Which of the following debts not entertained by DRT:
a) Debt due to staff of the bank
b) Debt due to small industries
c) Debt due to Professional & self-employed persons
d) Any other debt of commercial nature
30. No person shall hold office as the Presiding Officer of a Tribunal
after he has attained the age o:
a) Sixty-five years
b) Sixty -two years
c) Sixty years
d) Fifty -Eight years
31. Appellate Tribunal (DRAT) shall consist of one person only
(referred to as the Chairperson of the Appellate Tribunal) to be
appointed, by notification, by:
a) The State Government
b) The Central Government
c) The High Court
d) The Supreme Court
32. The Chairperson of an Appellate Tribunal shall hold office for a
term of from the date on which he enters upon his office and shall be
eligible for reappointment.
a) Seven years
b) Five years
c) Three years
d) One year
33. No person shall hold office as the Chairperson of a Appellate
Tribunal after he has attained the age of:
a) Seventy- five years
b) Seventy years
c) Sixty- five years
d) Sixty years
34. On receipt of application under section 19 (1) or (2), the Tribunal
shall issue summons directing the defendant to show cause...........of
the service of summons as to why relief prayed for should not be
granted:
a) Within forty days
b) Within thirty days
c) Within twenty days
d) Within ten days
35. Any recovery certificate issued by the Presiding Officer under
section 19(22) shall be deemed to be:
a) Decree or order of the Court for the purposes of initiation of
winding up proceedings against a company registered under
the Companies Act, 2013.
b) Insolvency proceedings against any individual or partnership
c) Decree or order of the Court for the purposes of initiation of
winding up proceedings against a Limited Liability Partnership
registered under the Limited Liability Partnership Act, 2008
d) All of the above.
36. The word ‘property’ for suit file means:
a) Intangible assets
b) Movable or Immovable property
c) Any debt or any right to receive payment of money, whether
secured or unsecured; Receivables, whether existing or future;
d) All of the above.
37. The Central Government shall provide the Tribunal with and such
other officers and employees as that Government may think fit.
a) One or more Recovery Officers
b) Three Recovery Officers
c) Two Recovery Officers
d) One Recovery Officer
38. A person shall not be qualified for appointment as the Presiding
Officer of a DRT unless he is, or has been, or is qualified to be:
a) A Supreme Court Judge
b) A High Court Judge
c) A District Judge
d) A Session Judge
39. A Debt Recovery Tribunal (DRT) shall consist of:
a) Four persons
b) Three persons
c) Two persons
d) One person.
40. Where a bank or a financial institution has to recover any debt
from any person, it may make an application to the Tribunal within
the local limits of whose jurisdiction:
a) Any of the defendants where there are more than one, at the
time of making the application, actually and voluntarily resides,
or carries on business, or personally works for gain; or the
cause of action, wholly or in part, arises.
b) The branch or any other office of the bank or financial
institution is maintaining an account in which debt claimed is
outstanding, for the time being.
c) The defendant, or each of the defendants where there are
more than one, at the time of making the application, actually
d) and voluntarily resides, or carries on business, or personally
works for gain.
Answers: 21b 22d 23c 24a 25a 26d 27b 28b 29c 30a 31b 32b
33b 34b 35d 36d 37d 38c 39d 40a
41. If any application filed before the Tribunal for recovery of any
debt is settled prior to the commencement of the hearing before
that Tribunal or at any stage of the proceedings before the final
order is passed, the applicant may be:
a) The fee may be refunded at the discretion of the Tribunal.
b) The pro rata fees may be refunded.
c) There is no provision of refund of fees once paid.
d) Granted refund of the fees paid by him.
42. In how many days the defendant shall present a written
statement of his defence including claim for set-off or a counter•
claim if any in DRT:
a) within a period of forty days from the date of service of
summons.
b) within a period of thirty days from the date of service of
summons.
c) within a period of twenty days from the date of service of
summons.
d) within a period of ten days from the date of service of summon.
43. The application made to the DRT Tribunal under section 19(1) or
(2) shall be dealt with by it as expeditiously as possible and every
effort shall be made by it to complete the proceedings in two
hearings, and to dispose of the application finally from the date of
receipt of the application.
a) Within three hundred and sixty days
b) Within two hundred and seventy days
c) Within one hundred and eighty days
d) Within ninety days
44. A person shall not be qualified for appointment as the
Chairperson of an Appellate Tribunal unless he:
a) has been a member of the Indian Legal Service and has held a
post in Grade I of that Service for at least three years
b) has held office as the Presiding Officer of a Tribunal for at least
three years.
c) is, or has been, or is qualified to be, a Judge of a High Court
d) All of the options mentioned above are correct.
45. Banking Ombudsman may award compensation to the complainant
for mental agony and harassment upto how much amount?
a) 1 lakh
b) 2 lakhs
c) 3 lakhs
d) 5 lakhs
46. The Banking Ombudsman Scheme is introduced under
which of the following sections in Banking Regulation Act, 1949
a) Section 25 A
b) Section 30 A
c) Section 40 A
d) Section 35 A
47. Banking Ombudsman is a senior official appointed by the
RBI to redress customer complaint specified under which
clause of the Banking Ombudsman Scheme 2006:
a) Clause 7
b) Clause 6
c) Clause 8
d) Clause 5
48. What is the fee for filing complaint under Banking Ombudsman
scheme:
a) 5000
b) 1000
c) No fee
d) Depending on the amount of compensation
49. Which is the committee on Banking Ombudsman?
a) Parthasarathi Shome
b) B. Shivaraman Committee
c) Suma Verma Committee
d) Shri Raghuram Rajan Committee
50. A banking Ombudsman will not entertain Credit Cards

Complaints which are more than -----
old.
a. 3 months
b. 6 months
c. 9 months
d. 12 months
51. Banking Ombudsman Scheme is applicable to the business of
a. All scheduled commercial banks excluding RRBs

b. All scheduled banks except private banks
c. All scheduled commercial banks including RRBs
d. Only Public Sector Banks
52. When did The Bankers’ Book Evidence Act, 1891, come into
force?
a) 21 April 1892
b) 16 March 1893
c) 01 May 1892
d) 01 April 1892
53. Which section of The Bankers’ Book Evidence Act, 1891 deals
with the Mode of proof of entries in bankers’ books?
a) Section 1 of The Bankers’ Book Evidence Act, 1891
b) Section 3 of The Bankers’ Book Evidence Act, 1891
c) Section 4 of The Bankers’ Book Evidence Act, 1891
d) Section 2 of The Bankers’ Book Evidence Act, 1891
with the Inspection of books by order of Court or Judge:
a. Section 6 of The Bankers’ Book Evidence Act, 1891

b. Section 4 of The Bankers’ Book Evidence Act, 1891
c. Section 3 of The Bankers’ Book Evidence Act, 1891
d. Section 8 of The Bankers’ Book Evidence Act, 1891
with the Order of court to be construed to be order made by
specified officer:
a. Section 6 of The Bankers’ Book Evidence Act, 1891
b. Section 4 of The Bankers’ Book Evidence Act, 1891
c. Section 3 of The Bankers’ Book Evidence Act, 1891
d. Section 8 of The Bankers’ Book Evidence Act, 1891
56. What does NALSA stand for?

a) National Legal Services Association
b) National Legal Services Authority
c) National Law Services Association
d) National Law Services Authority
57. Maximum amount of claim that can be filed in Lok Adalat:
a) 20 lakhs
b) 10 lakhs
c) 05 lakhs
d) 12 lakhs
58. Banking ombudsman scheme does not cover......
a) Scheduled commercial banks
b) Regional rural banks
c) Co-operative banks
d) Financial Institutions
59. What is Maximum Amount of compensation in an Award given by
Ombudsman:
a) Rs.10 lacs & ₹ 1 lakh to the complainant for mental agony and
harassment
b) Rs.20 lac & ₹ 1 lakh to the complainant for mental agony and
harassment
c) Rs.15 lac & ₹ 2 lakh to the complainant for mental agony and
harassment
d) Rs.50 lac & 5 lac to the complainant for mental agony and
harassment
60. What time period is to be given to the borrower as a notice
before sale of the secured asset:
a) 30 days
b) 45 days
c) 60 days
d) 75 days
Answer: 41d 42b 43c 44d 45a 46d 47c 48c 49c 50d 51c 52d
53c 54a 55d 56b 57a 58d 59b 60a
61. Lok Adalats are constituted under
a) High court act
b) Judicial Services act
c) Legal Services Authorities Act 1987
d) SARFAESI Act 2002
62. What is the minimum amount of default by borrower eligible for
filing suit under DRT?
a) 10 lakhs
b) 15 lakhs
c) 20 lakhs
d) 25 lakhs
63. What is the limitation period in a suit by a landlord to recover
possession from a tenant after the date the tenancy is determined?
a) One year
b) Two years
c) Six years
d) Twelve years
64. The limitation period in a suit by a surety against co-surety when
the surety pays anything in excess of his own share is:
a) Two years
b) Three years
c) Five years
d) Twelve years
65. The period of limitation for filing of suit on the basis of a
promissory note from the date of it's execution is :
a) One year
b) Two years
c) Three years
d) Five years
66. The period of limitation for setting aside a sale on execution of
decree is:
a) 120 days
b) 90 days
c) 60 days
d) 30 days
67. As per section 4, of The Limitation Act of 1908 where the period
of limitation prescribed for any suit, appeal or application expires on
a day when the Court is closed:
a) The suit appeal or application cannot be filed later
b) The suit, appeal or application may be instituted preferred on
the day when Court re-opens
c) Both (a) and (b)
d) The preceding day
68. A person passes through legal disability can file suit, make
application:
a) Within limitation period
b) Out of limitation period
c) Depends upon courts discretion to permit such a litigant to do
so.
d) None of above
69. Section 8 of the Limitation Act deal with
a) Extension of time
b) Legal disability
c) Special exception
d) Persons who cannot contract
70. Section 11 of the Limitation Act, 1908 deals with suits
a) On local contracts
b) Foreign Contracts
c) Both (a) and (b)
d) None of above
71. As per section 12, of the Limitation Act, in computing the period
of limitation prescribed for any suit, the day from which such period
is reckoned:
a) Shall be excluded
b) Shall be included
c) Both (a) and (b)
d) From 3rd of execution of documents
72. Articles_____ to______ of the Limitation Act, 1908 deals with
computation of period of limitation
a. 12 to 25
b. 12 to 20
c. 15 to 25
d. 12 to 29
73. The Law of Limitation is not applicable to_____________?
a) Revenue matters
b) Civil matters
c) Inheritance matters
d) None of above
74. Where no period of limitation is provided in limitation Act's
Schedule or s. 48, of C.P.C. than
a. Article 181, of Limitation Act, is applicable
b. Article 183, of Limitation Act, is applicable
c. Article 186, of Limitation Act, is applicable
d. Article 184, of Limitation Act, is applicable
75. Section 5 of Limitation Act provides__________________?
a) Bar upon institution of suits
b) Bar upon institution of appeals
c) Extension of limitation period in certain cases
d) None of above
76. Which of the allowances are fully taxable
a. Dearness allowance
b. Lunch allowance
c. Medical allowance
d. All of the above
77. Incomes which accrue or arise outside India but received directly
in India are taxable in case of
a. resident and ordinarily resident only
b. resident but not ordinarily resident
c. non-resident
d. All of the above
78. Outstanding salary would be taxable basis
a. Due
b. receipts
c. both a & b
79. Previous year under Income Tax Act means the financial year
immediately preceding the
a. Accounting year
b. Assessment year
c. none of the above
d. both
80. salary is chargeable to tax on
a. Receipt
b. due
c. Receipt or due whichever is earlier
Answers: 61c 62c 63d 64b 65c 66d 67b 68b 69c 70b 71a 72a
73c 74a 75c 76d 77d 78c 79b 80c
81. What does a "bank" means in Payment and Settlement Systems Act,
2007, unless the context otherwise requires?
a) a bank included in the Second Schedule to the RBI Act

b) a post office savings bank
c) a banking company as defined in clause c of section 5, of
the Banking Regulation Act
d) all of the above
82. What does “derivative” mean in Payment and Settlement Systems
Act, 2007?
a) an instrument, to be settled at a future date

b) a payment, to be settled at a future date
c) an instrument, that has already got settled
83. Which section of PSS Act, 2007 defines a payment system?
a) Section 1
b) Section 2(3)
c) Section 2(1)
d) Section 3(1)
84. Which of the following is included in payment system of PSS
Act?
a) clearing
b) payment
c) settlement service
d) All of the above
85. What does S stands for in SFMS in relation to NEFT payment
method?
a) Statutory
b) Systematic
c) Structured
d) Savings
86. What is the maximum limit per transaction in NEFT?
a) Rs 1,00,000
b) Rs 50,000
c) Rs 1,50,000
d) No Such Limit
87. How many digits are present in IFSC code?
a) 9
b) 15
c) 10
d) 11
88. What is the minimum amount of money that can be
transferred through RTGS?
a) Rs 2 lakh
b) Rs 2.5 lakh
c) Rs 3 lakh
d) Rs 5 lakh
89. NEFT works on the principle of which of the following?
a) Gross Batch Settlement
b) Deferred Net Settlement
c) Priority Net Settlement
d) Domain Net Settlement
90. Which of these committees is related to BBPS? (Marks: 0)
a) Y Malegam committee
b) Rangarajan committee
c) G .Padmanabhan committee
d) Narsimaham committee
91. Under which act the banks, which are desirous of operating
as BBPOUs (BBPOUs i.e. Bharat Bill Payment Operating Units),
need to get the approval?
a) Banking & Regulation Act 1949

b) RBI Act 1934
c) Payments & settlement System Act ,2007
92. Which organisation will authorise the Bharat Bill Payment
Operating Units in the BBPS?
a) Finance Ministry
b) RBI
c) SEBI
d) NOCI
93. Who can become an authorised BBPOU under BBPS?
a) Banks
b) Non-Bank entities
c) Both Banks and Non-Bank entities
94. What does BHIM stand for?
a) Bharat Instant Money Transfer

b) Bharat Interface for Money
c) Bank Hotline Instant Money
d) Banking Hit Instant Money
95. Which organisation developed BHIM Application?
a) SBI
b) RBI
c) NPCI
d) SEBI
96. Which of the following methods can be used to send money
over UPI?
a) Mobile number
b) VPA
c) Bank Account Number
d) All of the above
97. Which of the following bank has launched ‘mVisa’ – a
mobile-based payments solution?
a) SBI
b) ICICI Bank
c) HSBC Bank
d) Canara Bank
98. Which of the following is not true about National Electronic
Funds Transfer (NEFT) system?
a) There is no limit on transaction through NEFT

b) NEFT operates in hourly batches.
c) NEFT is a payment system which facilitates one-to-one
funds transfer.
d) Only bank branches which are NEFT enabled, can be a part
of the NEFT funds transfer network.
99. Which of the following is not true about Unified Payments
Interface (UPI)? UPI is an instant payment system developed by
the National Payments Corporation of India (NPCI).
a) Through UPI, all payments are instant and takes place in
banking hours.
b) Under UPI person will have a single identity and password for
using multiple bank accounts.
c) UPI is based on the Immediate Payment Services (IMPS)
infrastructure.
100. Lock in Period for opening of Tax saver FDR:
a) 5 years
b) 10 years
c) 7 years
d) No time limits
Answers: 81d 82a 83c 84d 85c 86d 87d 88a 89b 90c 91c
92b 93c 94b 95c 96d 97a 98b 99a 100a
BEST OF LUCK
Bankers ZONE ARENA
JAIIB PAPER 3 LRAB
Last day important questions
1. Section 23 of the SARFAESI Act amendment: removal of the
timeline of 30 days, within which a secured creditor is required to file
certain types of security interest in its favour with the Central
Registry of Securitisation Asset Reconstruction and Security Interest
("CERSAI");
2. Maximum claim under LOK Adalat: 20 Lakhs
3. Minimum claim under DRT: 20 lacs
4. What is the minimum Requirement as to minimum paid up Capital
and Reserves for Co-operative banks: Min 1 (one) Lakh Section 11 of
BR Act 1949
5. What is the maximum Voting Rights per shareholder: Not in excess
of 10% of total voting rights of all the shareholders (Section 12 BR
Act)
6. How much every banking company to create reserve fund of its
profit before any dividend is declared: 20%
7. Under which section Banks cannot grant loans against security of
their own shares: Section 20 of BR Act 1949
8. What Section 36 AA deals: Power to RBI to remove chairman of
bank or any other employee of the Bank.
9. What is the term /period of office of Chairman of PSB: 8 years
(Max.)
10.What is the Maximum age for chairman of PSB: MAX. 75 Years
11. How much is cap on the Tenure of MD, CEO & wholetime
Director of Private sector Bank: 15 Year
12. What is the Maximum age for MD/ CEO/ Whole Time Director of
PRIVATE SECTOR BANK: 70 years
13. Penalty & Punishment Under BR Act for wilful misinformation in
balance sheet or any Return submitted under Section 46:
Imprisonment upto 3 years and/or fine.
14. Which Section of RBI Act provides which business RBI can take:
Section 17 of RBI Act 1934
15. Section 29 of RBI Act deals with: Bank note exempted from stamp
duty under Indian Stamp Act,1899
16. What could be the maximum Statutory Liquidity Ratio by RBI:
40%
17. What is maximum number of partners in a firm dealing in
Banking Business: 50
18. How much Interest is paid on Partner’s loan if no agreement: 6%
p.a.
19. Which Section of Companies Act,2013 provides for Minimum &
Maximum Directors in a Private & Public Limited Company: Section
149(a) of Companies Act 201
20. What are Minimum and Maximum shareholders in a Private
limited company: Min-2 Max-200
21. What are Minimum and Maximum Directors in a Private limited
company: Min=2 Max=1
22. What are Minimum and Maximum shareholders in a Public
limited company: Min-7 Max- Unlimited
23. What are Minimum and Maximum Directors in a Private limited
company: Min=3 Max=15
24. Share premium is shown in the balance sheet as an:
Shareholder`s Capital
25. Maximum Paid up Capital of OPC: 2 crores (Previously it was 50
Lakhs)
26. What can be the Maximum Average Annual Turnover of OPC: Not
to exceed 20 crores (Previously 2 crores)
27. Which section of which Act defines Contract of indemnity:
Section 124 of the Indian Contract Act, 1872 defines contract of
indemnity
28. Guarantee is defined which Act: Section 126 of Indian Contract
Act, 1872
29. Share premium money can be used for: Issue of Fully Paid-up
Bonus shares.
30. Deferred shares are generally issued to: Promoters
31. What is the Amendment to Section 28 of Indian Contact Act and
its effect on Bank Guarantee: The amendment to Section 28
permitted banks and financial institutions to limit the period to make
a claim may be 3 or six months or upto one year by incorporation of
an appropriate clause in the contract.
32. What is the Maximum period allowed for Buyer`s/ Supplier`s
credit in India: 3 years
33. What is Lien: Lien is the right of a creditor to retain in his
possession the goods & securities owned by the debtor/bank until
the debt has been paid.
34. What is negative lien: A negative lien is a right of a person to
restrict another person from disposing of or creating encumbrance
over a property belonging to the latter which is in the latter's
possession or control till the time the debt or other obligation is
discharged.
35. What is an Escrow Account: An escrow account is an account
where funds are held in trust whilst two or more parties complete a
transaction.
36. Under what section of Negotiable Act 1881, the duty of the bank
is laid down: Section 31
37. Protection of Collecting Banker in case of cheque: Sections 131 of
the Negotiable Instruments Act, 1881
38. Debt Recovery Tribunals (DRT) are enacted under which ACT:
Section 3 of RDDBFI, 1993
39. What is the tenure of Presiding Officer of DRT: 4 years or 65 years
whichever is earlier
40. Affected borrower under SARFAESI ACT can appeal to DRAT of
Order of DRT: within 30days from the date of receipt of Order.
41. 23. IN which cases SARFAESI Act not applicable:
1. On Agriculture Land
2. Loans with outstanding upto Rs. One Lac
3. The amount due is less than 20% of Principal & Interest thereon.
4. Where limitation has expired.
42. What is the new limit for NBFCs for debt recovery under
SARFAESI Act: Rs.100 crore of asset size (Previously 500 crores) & of
Rs.50 lakh loan size (Previously 1 crore).
43. Under which Section of the above Bankers Evidence Act the
officer of the bank should not be compelled to either produce
bankers’ books or appear as a witness for proving matters,
transactions, and accounts recorded : Section 5
44. Which section of the Information & Technology Act after the
amendment, includes records stored in microfilm, magnetic tape or
any other form of mechanical or electronic data retrieval mechanism
: Section 2(3)
45. What is Section 65 B (1) of Indian Evidence Act, 1872: Any
information contained in an electronic record, which is printed on
paper, stored, recorded or copied in optical or magnetic media
produced by a computer is deemed to be a document.
46. Under What Act Lok Adalat is constituted: The Legal Services
Authorities Act, 1987.
47. 45. What are the financial powers of District Forum President:
upto 20 lakh rupees as per COPRA,1986 & upto One crore as per
COPRA 2019.
48. What section 15 of COPRA Act say: Section 15 of the Act grants an
appeal against the decision of the District Forum within 30 days to the
State Commission. Also, the appellant must have paid 50 per cent of
the compensation decided against him or ₹25000, whichever is less.
49. What are the financial powers of State Commission President:
above 20 lakhs but not exceed 1 crore rupees as per COPRA ,1986 &
above One crore but upto 10 crore as per COPRA,2019
50. What are the financial powers of National Commission President:
above one crore as per COPRA ,1986 & above 10 crores.
51. What are Circuit Benches: When the National Commission work
outside of its ordinary place of the capital of India, New Delhi. These
are called Circuit Benches.
52. What is the maximum penalty for not filing Income tax return:
Rs.10000/-
53. Within how much time drawer of cheque to make payment to
consider no offence: 15 days of receipt of notice.
54. How much is the i nterim compensation during the pendenc y of
proceedings for the offence of dishonour: An amount not exceeding
20% of the value of the instrument. (Section 143)
55. Inchoate Instrument: Inchoate instrument section 20 means
incomplete instrument.
56. What are Offences& Penalties under IT Act,2000:
1. Section 44: Where a person fails to furnish any document, return,
report to the controller, or certifying authority, then he shall be liable
to pay penalty upto Rs.1,50,000/- per failure.
2. Section 65: Any person tamper, conceal, destroy, or alter any
computer source document intentionally, then he shall be liable
to pay penalty upto Rs.2,00,000/-, or Imprisonment upto 3 years, or
both.
3. Section 66: Any person dishonestly, or fraudulently does any act as
referred in Section 43, then he shall be liable to pay penalty upto
Rs.5,00,000/-, or Imprisonment upto 3 years, or both.
4. Section 66B: Any person dishonestly, or fraudulently receives or
retains any stolen computer resource or communication device, then
he shall be liable to pay penalty upto Rs.1,00,000/-, or Imprisonment
upto 3 years, or both.
5. Section 66C: Any person dishonestly, or fraudulently make use of
Electronic Signature, Password or any other Unique Identification
6. Feature of any other person, then he shall be liable to pay penalty
upto Rs.1,00,000/-, or Imprisonment upto 3 years, or both.
7. Section 66D: Any person dishonestly, or fraudulently by means of
any communication device or computer resource cheats by
personating, then he shall be liable to pay penalty upto Rs.1,00,000/-,
or Imprisonment upto 3 years, or both.
8. Section 66E: Any person intentionally captures, publishes, or
transmits image of private area of any person without consent, then he
shall be liable to pay penalty upto Rs.2,00,000/-, or Imprisonment upto
3 years, or both.
9. Section 66F: Any person does any act electronically, or with use of
computer with intent to threaten unity, integrity, security, or
sovereignty of India, then he shall punishable with Imprisonment for
Life.
57. A cheque has already been negotiated by X to Y and by Y to Z. How
many times, more, this instrument can be negotiated: No Limit
58. When a Missing Person is presumed dead A missing is presumed
dead if he is not found within 7 years from the date of report to Police.
59. Can a convict sign documents during imprisonment NO but can sign
during Parole.
60. Is the d ate of document is excluded when calculating expiring
period: Yes
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Bankers ZONE ARENA

MOCK TEST PAPER 3 JAIIB LRB

2.Banker’s lien is a/an ......

3.In case of goods, Banker’s lien is not applicable.

4. The right of set-off is ......

5. Garnishee order is issued by ....

6. No banking company can hold any immovable property howsoever

7. A collecting bank gets protection for collecting a demand draft subject to

8. The objective of enactment of Consumer Protection Act 1986 is......

10. When RBI appoint a suitable person in place of the Chairman or

a. possession with bank and ownership with borrower

13. If the acknowledgement of debt by the borrower is for part amount

14. A banking company shall be deemed to be unable to pay its debts if

16. The preferential payments shall be made by the official

18. In a contract of indemnity, there are parties......

21. A Bank has allowed a current A/c holder ad hoc overdraft of Rs 15

a. No, as it is not a regular loan.

22. Promissory note can be (i) Demand PN, (ii) Usance PN

23. Attachment order is issued by ......

24. Who is Garnishee

25. .......... is one of the modes of lending by a banker.

28. Banking ombudsman scheme does not cover......

a. Scheduled commercial banks

a. Yes, before the Appellate Tribunal.

a. No, amount is required to be deposited till the appellate tribunal decides.

32. A company is under winding up process. Whether High Court

34. According to section 3 of Evidence Act, the Document can be defined:

a. Any matter expressed or described upon any substance by means of letter,

a. authorities under Companies Act

a. State group banks

39. The Companies Act applies to the banking companies:

a. irrespective whether the provisions of the Banking Regulation Act

40. The Banking Regulation Act applies to cooperative banks:

a. as provided in the State cooperative Act

41. A banking company requires from to undertake banking business as

a. 10% of their deposits

44. The shareholder of a banking company can exercise

45. _______ is a document issued by a company acknowledging its

46.Which of the following statements, is correct regarding valuation of

47. Drawee of a Cheque is (i) An A/c holder, (ii) Always a banker

a. No appeal will be entertained unless 75% of the amount is not deposited.

a. by issuing Debenture or Bonds.

50. Letter of Credit where in addition to advance payment, the beneficiary is

51. Once the dispute before the Banking Ombudsman is referred to

a. No, as the reference on the issues has already been made.

55. Lien is a/an of the creditor to retain possession.

57. Which section of IT Act deals with the appointment of Controller of

58. At the time of a new partner Good will ......

a. Belongs to all partners, new and old

59. What is the punishment for identity theft in IT Act?

a. Three year imprisonment or 2 lakh rupees penalty or both

60. Mortgage is defined under ......

63. Which of the following is not a security interest?

a. Any mortgage, charge, hypothecation, assignment or any right, title or

64. The Presiding officer of DRT is appointed by :

a. Reserve Bank of India.

66. The maxim applied in respect of Direct Quotation is ......

a. buy low, sell low

69. ...... goods are to be manufactured/produced/acquired by the seller after

a. Transfer of Property Act.

73. Which of the following are qualitative control methods?

a. Institute of Insurance and Risk Management

a. Separate legal entity

a. A request from Hari