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LEGAL ASPECTS OF BANKING

OPERATIONS
JAIIB
MODULE C & D
06.11.06
01..Under SARFAESI Act, 2002, the word
Board is used to mean
A .. Reserve Bank of India
B .. Securities and Exchange Board of India
C .. Debt Recovery Tribunal
D .. Securitization Company
02..Which pair is not correct
A . Obligor Borrower
B . Lender - Originator
C . Sponsor Reserve Bank of India
D . Secured Financial Institution
Creditor -
03..This evidences the purchasers
undivided right, title and interest in the
security.
A . Ownership
B . Transfer Right
C . Right to possess and enjoy
D . None of these
04..Which one cannot be a Qualified
Institutional Buyer
A . Insurance company
B . Bank
C . A Partnership firm with financial
experience
D . A Foreign Institutional investor
05.. Which statement is correct
A . An asset reconstruction company need
not be registered under Companies Act.
B . A foreign institutional investor to be
registered with RBI
C . SARFAESI Act not applicable to RRBs
D . Securitization Company has also to be
registered with SEBI.
06..Securitisation companies can set up
separate trusts scheme wise and act as
trustee for such schemes. The
beneficiaries of such trusts are
A . Trustees
B . Borrowers
C . Creditors
D . None of them
07..The Securitisation company or
reconstruction company can acquire
financial asset of any bank or financial
institution by issuing
A . Debenture
B . Bond
C . Any other security
D . Any one of the above
08..Identify the odd one (Debenture)
A .A debenture for payment of consideration
to be paid to the bank for acquisition of
financial asset from it
B .The rate of interest on debenture cannot
be more than 1.5% above Bank rate
C .Redemption period not beyond 6 years.
D .Reconstruction company to issue
debenture
09..It has the owned funds not less than
Rs.2 crore or such other amount not
exceeding 15 % of total financial assets
acquired or to be acquired as the RBI
may specify.
A . Securitisation Company
B . Reconstruction Company
C . Both a & b D . None of these
10..The securitisation company or the
reconstruction company can acquire
financial asset of any bank or financial
institution
A . True B . False
C . Incorrect D . Not True
11.. Identify the correct one.
A .Acquisition of funded assets to include
take over of outstanding commitments, if
any, of any bank, to lend further.
B .If registration cancelled, Reconstruction
company can appeal within 45 days
C .Security receipt is in favour of investors
D .Scheme wise/ asset wise separate
accounts not required to be maintained
12.. A securitisation company or
reconstruction company can raise funds
by way of deposits.
A . Not False B.. Not True
C.. Not applicable to Securitization company
but to Reconstruction company
D.. Not applicable to Reconstruction
company but to Securitisation company
13..Identify the incorrect one (Securitisation)
A . Non performing asset is linked to
overdue period which is 90 days now
B .If the asset is taken for reconstruction
limit is 7 years for reconstruction
C .Capital Adequacy of 15% to be there
D .While issuing security receipts necessary
disclosures to be made without fail
14..The date agreed upon by the secured
creditors representing not less than three-
fourth in value of the amount outstanding
on such date.
A . Agreement Date B.. Agreed Date
C.. Record Date D.. Due date
15.. Which one is not coming under
Securitisation.
A . Hypothecation of Stock
B . Assignment of Book Debts
C . Mortgage of Land
D . Pledge of Goods
16..In case of sale of immovable property
the borrower should be given notice about
the sale before
A . 60 days B. 2 months
C . 90 days D. None of these
17.. An authorized officer has finalised the
sale of property for Rs. 10 lacs. Then the
purchaser has to remit
A . The amount immediately
B . Within 15 days
C . 25% of the offer price
D . Nothing at once
18.. The authorized officer can
A . Accept the Offer
B . Confirm the sale
C . Issue Sale Certificate
D . Perform all the above
19.. Securitisation (identify the odd one)
A. For taking possession and then sell the
immovable property (under mortgage)
court permission required.
B. Court permission not required
C. The authorised officer to publish the
possession notice
D. In two leading newspapers
20..An appeal to the Appellate Tribunal is to
be preferred within
A. One month from the date of receipt of the
order of Debts Recovery Tribunal.
B. 30 days
C. 60 days
D. None of these
21.. A record to be maintained at the Central
Registrar at their head office to record
transactions relating to
A . Securitization of financial assets
B . Reconstruction of financial assets
C . Creation of security interests
D . All the above
22.. When any security interest is registered
with the Central Registrar is modified, the
same is required to be filed before Central
Registrar within
A . 30 days B. One month
C . 45 days D. 60 days
23.. If a reconstruction company fails to
comply with any of the directions of RBI
then the company is punishable with fine
not exceeding
A . Rs.1 lac for the default.
B . Rs. 5000/- per day
C . Rs 10000/- per day
D . Rs. 5 lacs
24..Provisions of SARFAESI ACT not
applicable for
A . A pledge of movable assets
B . Hire purchase or lease in which no
security interest has been created
C . Any security interest created in
agricultural land
D . All the above
25..A bank has realized part of the liability
by using Securitisation procedure. The
balance outstanding is Rs.12 lacs without
any tangible security.
A . Bank will have to forego
B . Bank can approach DRT
C . Bank cannot approach any court
D . Bank will have to write off
26.. After recovery through Securitisation
process for balance outstanding to recover
the bank can approach competent court
provided
A . Limitation period is not over
B . Debt is time barred
C . Limitation period has not been extended
D . Borrower agrees
27..Banking Ombudsman review authority
is
A. Ombudsman himself
B. Awarding Official
C. RBI Executive Director
D. None of them
28..Banking Ombudsman which is incorrect
A . Provided with a Secretariat
B . Cost of Secretariat to be borne by RBI
C . Remuneration to be decided by RBI
D . He can not act as an arbitrator
29.Banking ombudsman- identify odd one
A . Non- adherence of prescribed working
hours by branches
B . Observance of RBI directives on interest
rates
C . Failure to pay guarantee amount
D . Non- issue of drafts to non customers
30..Banking Ombudsman as an arbitrator to
follow the scheme as well as the
provisions of
A . Banking Regulation Act
B . Reserve Bank of India Act
C . Arbitration Act
D . None of these
31..DRT Act not applicable to
A . Nationalized Banks
B . Regional Rural Banks
C . State Bank of India
D . None of these
32..Under DRT Act, a Recovery Officer is
one who is
A . Appointed by the respective Banks
B . Also known as Authorized Officer
C . Appointed by the Central Government
D . Also called Presiding Officer
33..Which one is incorrect (DRT)
A . An application for execution of the
decree of foreign court cannot be
entertained by Debt Recovery Tribunal.
B .The Limitation Act applies for DRT cases
C .Other Bank can join the application.
D .Tribunal to deal with cases above Rs,10
lacs
34..Identify the correct mode of recovery of
debts (DRT)
A . Attachment and sale of movable property
B . Sale of immovable property of the
defendant
C .Arrest of the defendant and his detention
in prison
D .Any one of the above
35.. The recovery certificate which has been
issued requires rectification of arithmetical
mistake. It can be done by
A . The Banker himself
B . The Competent Court
C . The Officer of the DRT
D . None of these persons
36..Any person aggrieved by the order of
Recovery Officer may appeal to the
Tribunal within
A . 15 days B . 30 days
C . 30 days from the date of the order
D . 30 days from the date of receipt of the
copy of the order.

37..According to Bankers Books Evidence Act
identify the correct one.
A.. The Act extends to the whole of India including
the State of Jammu & Kashmir
B .For a Computer Print out certificate by the
Principal Accountant is not acceptable
C .The certified copy need not have any
declaration.
D . The Act is not applicable to the State of
Jammu & Kashmir
38..For inspection of books by order of court
the same has to be served on the bank
A . Any time before banking business hours
B . Any of its branches
C . At least a week before the same is to be
obeyed
D . None of these
39...A dispute where the person against
whom complaint has been made, denies
or disputes the allegations contained in
the complaint refers to
A . Consumer Dispute
B . Customer Dissatisfaction
C . Consumer Complaint
D . Deficiency in Customer Service
40..Under the Consumer Protection Act,
who is not treated as a Person
A . An unregistered Firm
B . A Registered Firm
C . A Co-operative Society
D . None of the above
41..J applied for a loan which the bank
considered. However J went to the
consumer forum claiming that the loan
was inadequate. Then the consumer
forum
A . Can direct the bank to give balance loan
B . Cannot direct the bank C. Can entertain
the consumers request
D . None of these
42..Which one is correct
A .. The State Consumer Protection Council to
meet at least two times every year.
B .. The District Consumer Protection Council to
meet at least one time every year.
C .. The Central Consumer Protection Council to
meet at least two times in a year.
D ..The highest council is the National Council
43..Identify the odd one (Consumer
Disputes Redressal Agencies)
A . National Commission
B . District Forum
C . Central Council
D . State Commission
44..Every member of the District Forum to
hold office for a term of three years or up
to the age of sixty-five years, whichever
is earlier.
A . True B . False
C . Partially True D . It is not 3 years
but 5 years
45..An appeal against the District Forums order
has to be filed before State Commission within
30 days. In case of monetary involvement the
person filing appeal
A.. Need not remit any amount
B.. Has to remit 50 % of the amount ordered
C .. Rs.20,000
D .. B & C which ever is less
46..For filing any complaint before a District
Forum, State Commission or the National
Commission the limitation period from the
date of cause of action is
A .. 1 year B.. 2 years
C .. 3 years D.. No limitation period
47..An Agreement involving 3 persons is
called
A .. Unilateral Agreement
B .. Bilateral Agreement
C .. Multi person Agreement
D .. None of these
48.. It is the delivery of goods by one person
to another for some purpose . When the
purpose is accomplished, the goods are to
be returned or otherwise disposed of
according to the direction of the person
delivering them.
A . Hypothecation B . Bailment
C . Assignment D . Mortgage
49.. Under Pledge the pledgee is the
A . Debtor
B . Creditor
C . Borrower
D . None of them
50..Termination of Agency is possible
A . Principal revoking his authority
B . Agent dies during the agency period
C . Principal is adjudicated as insolvent
D . All the above
51.. Which one does not pertain to sale
A . The risk in goods is with the buyer
B . The Seller can only sue for damages
C . It is a contract in which the parties have
already performed their part
D . The ownership of goods have already
passed irrespective of whether the goods
are delivered or not
52..It is a stipulation collateral to the main
purpose of the contract. The breach of
such a stipulation gives rise to a claim for
damages only.
A . Condition B . Warranty
C . Guarantee D . Stipulation
53.. The unpaid seller (which one is not the
Right)
A . Right not to withhold delivery of goods
B . Right of re-sale
C . A lien on the goods for the price while
he is in possession of them
D . Right to stop goods in transit
54.. This type of partnership can be
dissolved by any partner by giving notice
in writing to all the other partners of his
intention to dissolve the firm.
A . Ordinary Partnership
B . Partnership at Will
C . Special Partnership
D . Particular Partnership
55..The implied authority of a partner does
not empower him to
A . Open a banking account on behalf of the
firm in his own name
B . Withdraw a suit filed on behalf of the firm
C . Admit any liability in a suit against him
D . Enter into partnership on behalf of the
firm
56.. A minor who was admitted to receive the
benefits of a firm, on attaining majority and
becoming a partner
A .His rights and liabilities as a minor continue
upto the date on which he becomes a partner
B .He is personally liable to 3
rd
parties for all the
acts of the firm done
C .Since he was admitted to the benefits of the
firm
D .All the above are applicable
57..Which one is incorrect
A . Registration of a firm is optional
B . Registration of a company is not
compulsory
C . A firm does not have a perpetual
existence
D . Common seal is not applicable to a firm
58.. Identify the odd one (Companies)
A . A private company can accept deposits
only from its members or directors
B . For Private company minimum issued
capital has to be Rs.1.oo lac
C . Minimum 3 directors required for Public
Ltd company
D . Memorandum of Association is a Public
document
59..Which does not require registration?
A . Pledge of company assets
B . Prospectus
C . Book Debts
D . Any share in a ship
60..Who is an authorised person under
FEMA
A . Any bank
B . Authorized Money Changer
C . Authorised Dealer
D . All the above
61.. The mortgagor agrees that in the event
of his failing to pay according to his
contract, the mortgagee has the right to
sell the mortgaged property and recover
his dues. Identify the mortgage
A . Simple B. Usufructuary
C . Conditional Sale D. English
62..On payment of the money the
mortgagee will re transfer the property to
the mortgagor. Which is that mortgage
A. Equitable
B. Simple
C. English
D. Conditional Sale
63..Which statement is true
A . Simple Mortgage has to be created in a
Notified Area
B . English Mortgage Private Sale is not
there
C . Equitable Mortgage Registration is not
applicable
D . Simple Mortgage Deed to be registered
within 30 days of execution
ALL THE BEST
THANKS
T.M.C. VASUDEVAN
(M) 9819500380
022-27606208
EMAIL vasu1611@yahoo.co.in