Bey Banking Regulation & Compliance and Legal Aspects Questions eo India’s #1 Learning Platform Start Complete Exam Preparation Ree a eros researc Gees ee ea a 2 Exerc D> Download App Question 1: View this Question Online > When was the Act establishing the Reserve Bank passed? 1, 1934 2. 1937 3. 1947 4. 1949 a“ Solution Below) Option 1: 1934India’s Super Teachers for all govt. exams Under One Roof Banking Regulation & Compliance and Legal Aspects Question 1 Detailed Solution The Correct Answer is : 1934 + Establishment Year: The Reserve Bahk of India was established on April 1, 1935, but the Act that facilitated this establishment, the Reserve Bank of India Act, was passed in 1934. + Initial Capital: The RBI was initially set up with a capital of Rs. 5 crores. This copital was entirely owned by private shareholders in the beginning + Nationalization: The government of India nationalized the Reserve Bank of India on January 1, 1949, making it a state-owned institution. This means that the RBI started as a privately owned entity but became a government-owned bank after its nationalization. + First Office: Initially, the RBI was set up in Kolkata but was permanently moved to Mumbai 1937. Mumbai became the financial capital of India, and the Reserve Bank's headquarters being there was fitting. + Main Functions: The RBI functions as the central bank of India, which means it controls the monetary and other banking policies of the Indian government. It is responsible for issuing and supplying the Indian rupee and regulating the Indian banking system + Architectural Design: The RBIs buildings in Mumbai, Kolkata, Delhi, and Chennai are notable for their architectural designs, reflecting the importance and stature of the institution. + Governor: The RBI is headed by a Governor. The first Governor of the Reserve Bank of India was Sir Osborne Smith, while CD. Deshmukh was the first Indian Governor. A ER APL aaa) Boe Dee er sa BS) la merlin Cae Tle L ed] POT ad [eras DOr eas Exot — ~ > Download App Ps a ed Question 2:Section 6 of Negotiable Instrument Act deal e 1. Cheques eget? rm of Cheque 4, All the above Answer (Detailed Solution Below) Option 4 : All the above Banking Regulation & Compliance and Legal Aspects Question 2 Detailed Solution <\ ‘The correct answer is All the above 6 Key Points Section 6. “Cheque”. - A cheque is a bill of exchange d expressed to be payable otherwise than on demand and i wn on in cheque and a cheque in the electronic form. § x ns Explanation |.-- For the purposes of this section, (a) a cheque in the electronic form .e drawn in electronic form by using any computer resource and signedhin.a secu with digital signature (with or without biometrics signature) and asymmetric stem or with electronic signature, as the case may be; (b)a truncated cheque m que which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing. Explanation |. -- For the purposes of this section, the expression clearing house means the clearing house managed by the Reserve Bank of India or a clearing house recognised as such by the Reserve Bank of Indi Explanation Ill. -- For the purposes of this section, the expressions asymmetric crypto system, computer resource, digital signature, electronic form and electronic signature shall have the seme meanings respectively assigned to them in the Information Technology Act, 2000 (21 of 2000).ee an era Po erlay Seo PS Element Ll) ira) ey aoa Cc) : Gestion Sank } ties Download App Question 3: View this Question Onlin =: Which of the following is/are Money Market Instruments? A. Bills 2. Commercial Papers 3. Certificate of Deposits 4. All of the above Answer (Detailed Solution Below) Option 4: All of the above Banking Regulation & Compliance and Legal Aspects Question 3 Detailed Solution The correct answer is ALL OF THE ABOVE * # Important Points + The money market is a market for short-term funds that deal in monetary assets having a maturity period up to one year. + They are close substitutes for money. + It isa market of low risk, unsecured, and short term debt instruments that are highly liquid + It has no physical location as such, + It helps in the raising of shortaterm funds for meeting the temporary shortages of cash and obligations and the temporary déployment of excess funds for earning returns. + The major participants in the market are the Reserve Bank of India(RBI), Commercial Banks, NonBanking Finance Companies, State Governments, Large Corporate Houses, and Mutual Funds,+ Instruments: * Treasury bill * Commercial paper « Certificate of deposits + Call money + Commercial bill ee eee eur parte) Start Complete Exam Preparation Ree eRe oss ca] Faded r= a) Teaco Classe: Download App Ean Question 4: View this Question Online > Effective from 15th March, 2003, The Information Technology Act, 2000 has been amended so as to bring which of the following instrument within its purview? ol, 2. Promissory notes 3. Hundis 4. Electronic cheques and truncated cheques Answer (Detailed Solution Below) ‘Option 4 : Electronic cheques and truncated cheques Banking Regulation & Compliance and Legal Aspects Question 4 Detailed Solution The correct answer is AMA tears and truncated cheques @® \Key Points Effective from 15th March, 2003, The Information Technology Act, 2000 has been amended so as to bring Electronic Cheques and Truncated Cheques within its purview.epee rut Poe) Start Complete Exam Preparation CR a oe est PROT fared 5 Teac aad Veo (ores ears D> Download App peor Question 5: View this Question Online > What is the relationship between demand and price? 1. mutually opposite 2. intimate » 4. odd Answer (Detailed Solution Below) Option 1: mutually opposite Banking Regulation & Compliance and Legal Aspects Question 5 Detailed Solution The correct answer is mutually opposite. © Key Points + The relationship between demand and price is generally “mutually opposite”, which is often referred to as an inverse relationship in economics. + This relationship is based on the law of demand, vhich states that, all else being equal, as the price of a product increases, quantity demanded falls; likewise, as the price of a product decreases, quantity demanded increases. + However, this is a simplified explanation and actual market conditions might be influenced by many other factors incl income levels, tastes and preferences, the accessibility of substitutes, and many oth Additional InformationLaw of demand + According to the law of demand a consumer demand shares an inverse relationship with the price of the good and vice versa + law of demand can not explain the extent of the relationship. Top Banking Regulation & Compli Cl India’s #1 Learning Platform Start Complete Exam Preparation Rea ones ma a Cres ears Exons DB Download App ‘Questioné View this Question Online > The Foreign Exchange Regulation Act was replaced by the in India. 1. Foreign Exchange Currency Act 2. Foreign Exchange Finances Act 3. Foreign Exchange Funds Act 4 PR crorce Management Act Answer (Vetailed Solution Below) ‘Option 4: Foreign Exchange Management Act Banking Regulation & Compliance and Legal Aspects Question 6 Detailed Solution The correct answer is Foreign Exchange Management Act. Foreign Exchange Regulations Act (FERA) is an act that imposes strict regulations on + Foreign exchange dealings + Securities and transactions having an indirect impact on foreign exchange + Import and export of foreign currency+ On conservation and optimal utilization of foreign exchange so as to promote economic development and growth + Certain kinds of payment in foreign currency. + FERA was passed in India in the year 1973 and it came into effect from 1st January 1974. Foreign Exchange Management Act (FEMA) is the act of the Parliament of India + To facilitate external tra payments for promoting the orderly maintenance + To develop foreign exch iarkets in India. + FEMA was passed in the winter session of Parliament on 29th December 1999. + FEMA paved the way for the introduction of the Prevention of Money Act, 2002 which became effective from 1st July 2005, + FEMA acts as a regulatory mechanism enabling the Reserve Bank of India (RBI) and the Central Government to pass rules related to Foreign exchange as per the Foreign Trade Policy of India. + FERA was replaced by FEMA in 1998 by the Government of Atal Bihari Vajpayee. + Toamend and ca ulations and laws related to foreign exchange & eee een Sear tere Start Complete Exam Preparation (gq) Daily Live Practice mara PON Ciel ace Cree Teac & Quizz Download App ‘Question7 View this Question Online > A paper instructing the bank to pay a specific amount from a person's account to another person in whose name it has been issued is known as: 1. cash 2. cheque 3. passbook 4. currency ~~ Answer (Detailed Solution Below)Option 2: cheque Banking Regulation & Compliance and Legal Aspects Question 7 Detailed Solution The correct answer is Cheque. © Key-Points » Cheque + A cheque is a bill of exchange in which one party instructs the bank to transfer funds to another party's bank account. I's a Negotiable instrument protected by the 1881 Negotiable instruments Act. There are three parties involved in the transaction - The drawer is the person who writes the cheque, the drawee is the bank that has to transfer the funds, and the payee is th: person whose name is on the cheque < Acheque can be issued against a savings account or a current account O A cheque is drawn from a particular bank and is always payable on demat = A cheque is valid for three months from the date of issuing (the date is inci top right-hand corner of the cheque). © There are two main types of cheques — O = Bearer Cheque — is a type of cheque in whi bear n encash the sum on presentation of the cheque before the 2 @ Order Cheque — is a type of cheque written on the cheque, “x sh + Passbook * A passbook, sometimes known as a bankbook, is a paper book used to record bank or building society transactions on a deposit account. « These were traditionally used for accounts with minimal transaction volumes, such as savings accounts. + Currency * Currency isa kind of payment that can be used to buy and sell products and services. in 2 nutshell, it's money, usually in the form of paper or coins, issued by a government and widely accepted as a means of payment at face value. don the * There are 180 currencies recognized as legal tender in United Nations (UN) member states, UN observer states, partially recognized or unrecognized states, and their dependencies.i ee eeu Pare) PS Element Ll) arated mara) (ores earu Exot Cee a ess Download App Question View this Question Online > is an asset that the borrower owns and uses as a guarantee to a lender, until the loan is repaid. A... 2. Ancillary 3. Bail 4, Collateral Answer (Detailed Solution Below) Option 4 : Collateral Banking Regulation & Compliance and Legal Aspects Question 8 Detailed Solution The correct answer is Collateral, © Key Points+ Collateral « An asset that the borrower owns and uses as a guarantee to the lender until the loan is repaid is called collateral. = Collateral is a type of security that banks take from their clients. © The collateral can be in the form of fixed deposits, property papers ete. © The collateral reduces the risk to the lenders. Ifa borrower defaults on the loan, the lender can seize the collateral and sell it to cover his loss. * Mortgage and car loans are two types of collateralized loans. + Other personal assets, such as a savings or investment account, can be used to secure a collateralized personal loan. ee ane ou Barely Start Complete Exam Preparation ca) ae od > Download App Questions View this Question Online > With which of the following functions of a bank would you associate the term ‘collateral’? 1. Accepting deposits 2. Portfolio management 3. A: cheques 4. Granting loans and advances Answer (Detailed Solution Below) Option 4 : Granting loans and advances Banking Regulation & Compliance and Legal Aspects Question 9 Detailed Solution The correct answer is Granting of loans and Services.© Key Points + Collateral > The term collateral refers to an asset that a lender accepts as security fora loan. + Collateral may take the form of real estate or other kinds of assets, depending on the purpose of the fl jence, Option 4 is correct. * The collateral acts 1m of protection for the lender. + That is, if the borrower defaults on their loan payments, the lender can seize the collateral and sellit to recoup some or all of its losses. + Collateral is an item of value used to secure a loan. + Collateral minimizes the risk for lenders. + Mortgages and car loans are two types of collateralized loans. + Other personal assets, such as a savings or investment account, can be used to secure a collateralized personal loan. ieee ABA Re claolaly BS Ela Orel une) (CS Clee Led) CR AR cece Download App Question10 View this Question Online > Under which section of Information Technology Act of 2000, updated in 2008, stealing any digital asset or information is considered as cyber crime? 1. 65 2 a! 3. 67 Answer (Detailed Solution Below) Option 1: 65Banking Regulation & Compliance and Legal Aspects Question 10 Detailed Solution Section 65 of the Information Technology Act of 2000, updated in 2008, stealing any digital asset or information is considered as cyber crime CP key-Points Section 65: ~a Tampering with computer source documents: Whoever knowingly or intentionally conceals, destroys or alters or intentionally or knowingly causes another to conceal, destroy, or alter any computer source code used for computer, computer programme, computer system, or computer network, when the computer source code is required to be kept or maintained by law for the time being in force, shall be punishable with imprisonment up to three years, or with fine which may extend up to two lakh rupees, or with both. & eae Rea) OR Rr esta Start Complete Exam Preparation ora ac Download App ‘Question11 Niew this Question Online > If anyone fraudulently or dishonestly makes use of the electronic signature, password or any other unique identification feature of any other person then under which section of IT Act 2000, punishment shall be given? 1. Section 63 2. Section 66B 3., Section 66C 4, Section 678 Answer (Detailed Solution Below)—,- Banking Regulation & Compliance and Legal Aspects Question 11 Detailed Solution The correct answer is Section 66C. Under the Information Technology Act, 2000 (IT Act 2000), if anyone fraudulently or dishonestly makes use of the electronic signature, password, or any other unique identification feature of another person, the relevant section that deals with the offense and punishment is Section 66C. Section 66C of the IT Act 2000 Is titled “Identity Theft” and states the following: + "Whoever, fraudulently or dishonestly makes use of the electronic signature, password or any other unique identificatiSfifeture of any other person, shall be punished with imprisonment of either description for a tert lich may extend to three years and shall also be liable to fine which may extend to rupees one lakh.” + This section is designed to address offenses related to identity theft, where an individual unlawfully uses someone else’s electronic signature, password, or other unique identification features to carry out fraudulent activities, impersonate the person, or gain unauthorized access to their digital accounts or systems. + It's important to note that the specific penalties and punishment may vary depending on the jurisdiction and the severity of the offense. It is always advisable to consult the relevant legal ‘authorities or legal professionals for precise interpretation and application of the law in a particular situation, Dee are Raita) ORC Rr ea Start Complete Exam Preparation D> Download App Question12 View this Question Online > Arrange in proper sequence the following benefits available to Information System Auditor who uses CATT: A. Check susceptibility to threat, Much of the accounting is done through cloud accounts or other online system B. Evaluating the system C. Data security D. Bolsters controls E. Develop IT GovernanceChoose the correct answer Cyr below: 1 £D.CBA XO . ‘ AB,CD,E 4. B,AE,C,D Answer (Detailed Solution Below) Option 3: A B,C, D, E Banking Regulation & Compliance and Legal Aspects Question 12 Detailed Solution The correct answer is A, B, C,D, E. © Key Points The correct sequence is: A. Check susceptibility to threat. Much of the accounting is done through cloud accounts or other online systems. Using CATT, auditors can assess the susceptibility of the accounting system to various threats, especially those related to online or cloud-based accounts. This step involves identifying potential risks and vulnerabilities in the system. B. Evaluating the system ¢ CATT helps auditors evaluate the information system by assessing its design, functionality, a effectiveness in achieving its objectives. This step involves examining the system's controls a processes. e C. Data security CATT can be used to assess the security measures in place to protect sen: . It helps auditors identify any vulnerabilities or risks related to data security and provi ‘endations for enhancing security measures. D. Bolsters controls CATT aids in strengther ernal controls by wy jeaknesses or gaps in the system. It allows auditors to test the effectiveness of con .d make recommendations for improving control mechanisms. E. Develop IT Governance Using CATT, auditors can evaluate the organization's IT governance framework. This step involves assessing the alignment of IT strategies and objectives with overall business goals and providing insights into improving IT governance practices. Therefore, the correct sequence is:A. Check susceptibility to threat. Much of the accounting is done through cloud accounts or other online systems. B. Evaluating the system C. Data security D. Bolsters controls E. Develop IT Governance & ere Start Complete Exam Preparation Re aero Cees hoc Mock Tests ey Cree ato Exon Download App Question13 View this Question Online > Which of the following issues are addressed by the Information Technology Act. 2000? (A) Legal recognition of electronic documents (B) Redressal of grievances (© Offenses and contraventions (D) Disputes settlements (€) Justice dispensation system for cyber crimes Choose the correct answer from the options given below: 1. A), (0), (0) Only 2. (Q), (D), (E) Only” 3. (@), (D).(E) Only ~ (A), (©), (© Only Answer (Detailed Solution Below)Option 4: (A), (C), (E) Only Banking Regulation & Compliance and Legal Aspects Question 13 Detailed Solution © Key Points Information Technology Act. 2000: + With passing the Information Technology Act of 2000, India became the 12th nation to adopt cyber legislation, + The Information Technology Act of 2000 gives transactions made via electronic data interchange, other electronic means of communication, or electronic commerce a legal status. Section 4 - Legal recognition of electronic records: Where any law provides that information or any other matter shall be in writing or in the typewritten or printed form, then, notwithstanding anything contained in such law, such requirement shall be deemed to have been satisfied if such information or matter is— + rendered or made available in an electronic form; and + accessible so as to be usable for a subsequent reference. Chapter XI of Information Technology Act. 2000 - Offences C e) Cyber offences are illegal acts that are carried out in a highly technical manner, either using computers as a tool, a target, or both. The offenses included in the IT Act 2000 are as follows: O + Tampering with the computer source documents. (Secti ‘Oo + Hacking with computer system (Section 66) + Publishing of information which is obscene in + Power of Controller to give directions¢Section 6 * Directions of Controller to a subscri ‘tend facilities to decrypt information (Section 69 + Protected system (Section 70) + Penalty for misrepresentation (Sectio + Penalty for breach of confidentiality end privacy (Section 72) + Penalty for publishing Digital Signature Certificate false in certain particulars (Section 73) + Publication for fraudulent purpose (Section 74) + Act to apply for offense or contravention committed outside India (Section 75) + Confiscation (Section 76) + Penalties or confiscation not to interfere with other punishments (Section 77) + Power to investigate offenses (Section 78) (Section 67) Chapter IX deals with Penalties, Compensation and Adjudication: This chapter describes the various penalties and compensations to be paid in context to various offenses. Chapter X deals with Appellate Tribunal: This chapter describes the various powers, procedures and rights in connection with the Appellate Tribunal. Both Chapter IX and X of IT Act 2000 covers Justice dispensation system for cyber-crimes. Hence, (A), (C), (E) Only are true.ag rere ncn Start Complete Exam Preparation CBDR Suncoast PaO eed eared ro sole researc & Quizzes D> Download App Question14 View this Question Online > Which are the important factor/factors required to maintain a quality relationship with the customer? 1. Trust and Commitment 2. Trust and Indolence. 3. > Suspect 4, Commitment and Denial Answer (Detailed Solution Below) Option 1: Trust and Commitment Banking Regulation & Compliance and Legal Aspects Question 14 Detailed Solution The correct answer is option 1 i.e Trust and Commitment Key concepts in relationship marketing: + Trust: * Trust is a critical factor fostering commitment among supply chain partners, + The presence of trust improves measurably the chance of successful supply chain performance. © Trust is a belief in the reliability. In other words, itis one party expectation that other party will behave in a certain predictable wey in a given situation.+ Commitment : a * Commitment is one party in a relationship feels motivated to do business with another arty. _ Fis eise ened so long-term desire to maintain a valued relationship. © A customer is committed to a supplier similarly expected loyalty from the supplier or service provider. + Attraction: ¢ The attraction is a third key concept in relationship marketing. © It means there should be something which makes the supplier or service provider interesting to give the customer. « Attraction can be based on the financial, technological or social factor. ad Des AL hi rene erst Start Complete Exam Preparation cies od Teac POs Cres a og Exon 22 D> Download App Question15 ‘View this Question Online > What is the relationship between demand and price? 1, mutually opposite 2. intimate 7. 4. odd Answer (Detailed Solution Below) Option 1: mutually opposite Banking Regulation & Compliance and Legal Aspects Question 15 Detailed Solution ‘The correct answer is mutually opposite.* which is often between demand and pri referred to as an inverse relationship in econ + This relationship is based on the law of d price of a product increases, quantity decreases, quantity demanded i opposite states that, all else being equal, as the lls; likewise, as the price of a product + However, this is a simplifieghex la ind actual market conditions might be influenced by many other factors in: ncome levels, tastes and preferences, the accessibility of substitutes, and many 3 Additional Information Law of demand + According to the law of demand a consumer demand shares an inverse relationship with the price of the good and vice versa + law of demand can not explain the extent of the relationship.