MCQS 132 NO: PAPER II – PRINCIPLES & PRACTICES OF BANKING | MODULE A: GENERAL BANKING OPERATIONS

PAPER II – PRINCIPLES & PRACTICES OF BANKING | MODULE A: GENERAL BANKING OPERATIONS MCQs

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1. Banker-Customer Relationship

Q1: What is the relationship between a banker and a customer?

• A) Trustee and Beneficiary
• B) Debtor and Creditor
• C) Bailee and Bailor
• D) Agent and Principal

Answer: B) Debtor and Creditor

Q2: In which of the following relationships is the banker obligated to maintain confidentiality?

• A) Banker and Customer
• B) Employer and Employee
• C) Agent and Principal
• D) Bailee and Bailor

Answer: A) Banker and Customer

2. Requirements to be Called a Bank

Q3: Which of the following is a basic requirement for an institution to be recognized as a bank?

• A) It must provide loans
• B) It must be registered under the Banking Regulation Act, 1949
• C) It must be a member of the RBI
• D) It must have a national presence

Answer: B) It must be registered under the Banking Regulation Act, 1949

3. AML-KYC Guidelines

Q4: What is the purpose of the Know Your Customer (KYC) guidelines in banking?

• A) To maintain customer privacy
• B) To prevent money laundering and financing of terrorism
• C) To promote digital banking
• D) To encourage foreign investments

Answer: B) To prevent money laundering and financing of terrorism

Q5: Which of the following is a document that a bank can accept for KYC verification?

• A) Voter ID
• B) Passport
• C) Aadhaar card
• D) All of the above

Answer: D) All of the above

4. Money Laundering & Financing of Terrorism Risks

Q6: Which of the following is a major risk under the AML framework?

• A) Tax evasion
• B) Illegal funding of terrorist activities
• C) Currency manipulation
• D) None of the above

Answer: B) Illegal funding of terrorist activities

5. Operational Aspects of KYC

Q7: What does the Central KYC Records Registry (CKYCR) do?

• A) It stores the KYC information of individuals
• B) It monitors customer accounts
• C) It regulates foreign exchange transactions
• D) It maintains account balances

Answer: A) It stores the KYC information of individuals

6. Foreign Exchange Remittance Facilities for Individuals

Q8: Which remittance scheme allows for the transfer of money between India and Nepal?

• A) Indo - Nepal Remittance Scheme
• B) Indo - Sri Lanka Remittance Scheme
• C) Indo - Pakistan Remittance Scheme
• D) Indo - Bangladesh Remittance Scheme

Answer: A) Indo - Nepal Remittance Scheme

7. Cash Management Services and Its Importance

Q9: What is one of the key services provided under Cash Management Services (CMS)?

• A) Payment Processing
• B) Loan Disbursement
• C) Forex Management
• D) Insurance

Answer: A) Payment Processing

8. Financial Inclusion & Financial Literacy

Q10: Which initiative has been introduced to promote financial inclusion in rural areas?

• A) RSETI (Rural Self Employment Training Institutes)
• B) NABARD
• C) PMGDISHA
• D) PMAY

Answer: A) RSETI (Rural Self Employment Training Institutes)

9. The Consumer Protection Act, 2019

Q11: Under the Consumer Protection Act, 2019, what is the purpose of the Central Consumer Protection Authority?

• A) To settle customer disputes
• B) To regulate unfair trade practices
• C) To monitor consumer complaints
• D) All of the above

Answer: D) All of the above

10. The Right to Information Act, 2005

Q12: Under the Right to Information Act, who is responsible for disposing of a request for information?

• A) Public Information Officer (PIO)
• B) Central Information Commission (CIC)
• C) State Information Commission (SIC)
• D) Information Commissioner

Answer: A) Public Information Officer (PIO)

11. Payment and Collection of Cheques and Other Negotiable Instruments

Q13: Which section of the Negotiable Instruments Act, 1881, deals with the duties of a collecting bank?

• A) Section 10
• B) Section 31
• C) Section 129
• D) Section 148

Answer: B) Section 31

Q14: What is the primary responsibility of the paying bank under the Negotiable Instruments Act?

• A) Ensuring the instrument is signed by the account holder
• B) Ensuring the instrument is in proper form and meets legal requirements
• C) Verifying the endorser's identity
• D) None of the above

Answer: B) Ensuring the instrument is in proper form and meets legal requirements

12. Responsibility of Paying Bank

Q15: What happens if a paying bank makes a payment on a cheque with a forged signature?

• A) The payment is considered valid
• B) The payment is considered void
• C) The payment is only valid if the account holder authorizes it
• D) The bank is liable for the loss

Answer: D) The bank is liable for the loss

Q16: Under which circumstances can a paying bank seek protection for making a payment on a cheque?

• A) If the payment is made in good faith
• B) If the payment is made under a legal order
• C) If the cheque is post-dated
• D) If the customer has been notified of the payment

Answer: A) If the payment is made in good faith

13. Ancillary Services

Q17: What is a key feature of Mobile Banking in India?

• A) It is only available for checking account balances
• B) It enables fund transfers and bill payments
• C) It can only be used in rural areas
• D) It is used exclusively for loan applications

Answer: B) It enables fund transfers and bill payments

Q18: Which of the following is NOT part of the National Electronic Funds Transfer (NEFT) system?

• A) It is a real-time settlement system
• B) It allows for online banking payments
• C) It allows for interbank transfers
• D) It is a secure electronic money transfer system

Answer: A) It is a real-time settlement system

14. Financial Inclusion & Financial Literacy

Q19: Which technology has played a crucial role in promoting financial inclusion in India?

• A) Biometric Authentication
• B) Mobile Banking
• C) Internet Banking
• D) All of the above

Answer: D) All of the above

Q20: Which of the following programs aims at improving financial literacy in India?

• A) Pradhan Mantri Jan Dhan Yojana
• B) Financial Literacy Week (FLW)
• C) Rashtriya Krishi Vikas Yojana
• D) Atal Pension Yojana

Answer: B) Financial Literacy Week (FLW)

15. Customer Service in Banks

Q21: What is a primary feature of the ATM operations policy in banks?

• A) ATM withdrawals are free
• B) Banks are responsible for monitoring ATM security
• C) ATM transactions can only be conducted during business hours
• D) Customers can make unlimited transactions without any charges

Answer: B) Banks are responsible for monitoring ATM security

Q22: What does the Banking Codes and Standards Board of India (BCSBI) primarily aim to do?

• A) Standardize banking charges
• B) Set out a code of conduct for banking services
• C) Regulate the financial inclusion programs
• D) Ensure compliance with global banking norms

Answer: B) Set out a code of conduct for banking services

16. Duties & Rights of a Banker and Customer Rights

Q23: What duty does a banker have concerning the customer's account information?

• A) Duty of disclosure
• B) Duty of confidentiality
• C) Duty of compliance
• D) Duty of ownership

Answer: B) Duty of confidentiality

Q24: Which of the following is NOT a right of a customer under banking norms?

• A) Right to seek grievance redressal
• B) Right to transfer their accounts to any bank
• C) Right to demand higher interest rates
• D) Right to access the bank's policies

Answer: C) Right to demand higher interest rates

17. Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Q25: What is the primary role of the RBI Integrated Ombudsman Scheme?

• A) To resolve banking disputes related to loan defaults
• B) To address customer complaints regarding bank services
• C) To regulate foreign exchange transactions
• D) To ensure compliance with KYC norms

Answer: B) To address customer complaints regarding bank services

Q26: What must a customer do before approaching the RBI Ombudsman?

• A) Wait for at least 30 days after submitting the complaint to the bank
• B) Attempt to resolve the issue with the bank’s customer service team
• C) File a police report
• D) None of the above

Answer: B) Attempt to resolve the issue with the bank’s customer service team

18. The Consumer Protection Act, 2019

Q27: Under the Consumer Protection Act, 2019, what is the maximum period within which a complaint can be filed with the District Commission?

• A) 1 year
• B) 2 years
• C) 3 years
• D) 5 years

Answer: B) 2 years

Q28: What is the role of the Central Consumer Protection Authority (CCPA) under the Consumer Protection Act, 2019?

• A) To settle consumer disputes
• B) To impose penalties on erring businesses
• C) To regulate unfair trade practices and misleading advertisements
• D) To monitor the prices of goods and services

Answer: C) To regulate unfair trade practices and misleading advertisements

19. The Right to Information Act, 2005

Q29: Which of the following is exempt from providing information under the Right to Information Act?

• A) Information affecting the sovereignty of India
• B) Information related to commercial secrets
• C) Personal information of individuals, unless it is in public interest
• D) All of the above

Answer: D) All of the above

Q30: Under the Right to Information Act, who has the authority to impose a penalty for non-compliance by a public authority?

• A) Information Commissioner
• B) Public Information Officer (PIO)
• C) Chief Information Officer
• D) Central Information Commission

Answer: A) Information Commissioner

20. Operational Aspects of NRI Business

Q31: Which type of account can be opened by Non-Resident Indians (NRIs) in India to park their foreign income?

• A) NRO (Non-Resident Ordinary) Account
• B) NRE (Non-Resident External) Account
• C) FCNR (Foreign Currency Non-Resident) Account
• D) All of the above

Answer: D) All of the above

Q32: What is the main feature of the NRE (Non-Resident External) Account?

• A) The account can only hold Indian Rupees
• B) The account is used for converting foreign currency into Indian Rupees
• C) It allows repatriation of funds to the NRI's home country
• D) It is for depositing income earned in India

Answer: C) It allows repatriation of funds to the NRI's home country

21. Foreign Exchange Remittance Facilities for Individuals

Q33: Which of the following is a permissible outward remittance under the FEMA guidelines?

• A) Payment for medical treatment abroad
• B) Education expenses abroad
• C) Investment in foreign securities
• D) All of the above

Answer: D) All of the above

Q34: Which entity regulates the foreign exchange market in India?

• A) Reserve Bank of India (RBI)
• B) Securities and Exchange Board of India (SEBI)
• C) Ministry of Finance
• D) Ministry of External Affairs

Answer: A) Reserve Bank of India (RBI)

22. Cash Management Services and Its Importance

Q35: What is the key objective of Cash Management Services (CMS) for businesses?

• A) To optimize liquidity and reduce operational costs
• B) To manage investment portfolios
• C) To provide loans to businesses
• D) To assist in foreign exchange transactions

Answer: A) To optimize liquidity and reduce operational costs

Q36: Which of the following is a component of Cash Management Services (CMS)?

• A) Payment collections
• B) Fund transfers
• C) Disbursement services
• D) All of the above

Answer: D) All of the above

23. Payment and Collection of Cheques and Other Negotiable Instruments

Q37: Under the Negotiable Instruments Act, which section deals with the payment in due course by the paying bank?

• A) Section 10
• B) Section 31
• C) Section 128
• D) Section 38

Answer: B) Section 31

Q38: If a cheque is dishonoured, who is responsible for compensating the payee?

• A) The drawer of the cheque
• B) The drawee bank
• C) The payee
• D) The collecting bank

Answer: A) The drawer of the cheque

24. Secrecy Obligations

Q39: What is the primary objective of a bank's duty of secrecy?

• A) To prevent fraudulent transactions
• B) To maintain the confidentiality of the customer's financial information
• C) To protect the bank from legal liabilities
• D) To ensure proper accounting

Answer: B) To maintain the confidentiality of the customer's financial information

Q40: Under what condition can a bank disclose a customer’s financial information without violating the duty of secrecy?

• A) With the customer’s consent
• B) When required by law or under a court order
• C) For internal audits or investigations
• D) All of the above

Answer: D) All of the above

25. Foreign Currency Accounts for Residents and Other Aspects

Q41: Which of the following is a permissible foreign currency account for residents in India?

• A) FCNR (Foreign Currency Non-Resident) Account
• B) Resident Foreign Currency (RFC) Account
• C) NRE (Non-Resident External) Account
• D) None of the above

Answer: B) Resident Foreign Currency (RFC) Account

Q42: What is the purpose of the Foreign Contribution (Regulation) Act, 2010?

• A) To regulate foreign exchange transactions
• B) To monitor foreign contributions to non-profit organizations
• C) To control outward remittance
• D) To oversee foreign investments in Indian markets

Answer: B) To monitor foreign contributions to non-profit organizations

26. Financial Inclusion & Financial Literacy

Q43: What is the main objective of financial inclusion in India?

• A) To provide banking services to all citizens
• B) To increase foreign direct investment in India
• C) To regulate the stock market
• D) To promote digital payments in rural areas

Answer: A) To provide banking services to all citizens

Q44: Which government initiative is aimed at improving financial literacy and providing banking access to all households?

• A) Pradhan Mantri Jan Dhan Yojana (PMJDY)
• B) Financial Literacy Week (FLW)
• C) Atal Pension Yojana (APY)
• D) Bharat Interface for Money (BHIM) App

Answer: A) Pradhan Mantri Jan Dhan Yojana (PMJDY)

27. Customer Service in Banks

Q45: What is a bank’s obligation when a customer’s ATM card is lost or stolen?

• A) To immediately block the card and issue a new one
• B) To charge the customer a replacement fee
• C) To investigate and report the loss to law enforcement
• D) To transfer all funds to a new account

Answer: A) To immediately block the card and issue a new one

Q46: What is the role of a bank in ensuring ATM security?

• A) To monitor ATMs for fraudulent activities
• B) To ensure that ATMs are stocked with cash
• C) To maintain the physical security of the ATM machines
• D) All of the above

Answer: D) All of the above

28. Duties & Rights of a Banker and Customer Rights

Q47: Which of the following is a banker’s right in relation to a customer’s account?

• A) Right to dishonor a cheque
• B) Right to charge fees for services
• C) Right to access the customer’s personal information without consent
• D) Right to disclose account details to third parties

Answer: B) Right to charge fees for services

Q48: What is the duty of a banker regarding the safety of the customer's deposits?

• A) To ensure that the deposits are secure and protected from fraud
• B) To invest customer deposits in high-risk assets
• C) To ensure that deposits earn the highest interest rates
• D) To provide personal loans to customers from deposit funds

Answer: A) To ensure that the deposits are secure and protected from fraud

29. Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Q49: What is the purpose of the RBI Integrated Ombudsman Scheme?

• A) To resolve disputes between banks and their customers
• B) To regulate foreign exchange operations
• C) To monitor the interest rates on loans
• D) To impose penalties on erring banks

Answer: A) To resolve disputes between banks and their customers

Q50: How can a customer approach the RBI Ombudsman if their complaint is unresolved by the bank?

• A) By writing directly to the bank’s head office
• B) By filing a complaint on the RBI’s official portal
• C) By seeking legal action in court
• D) By filing an appeal with the District Consumer Court

Answer: B) By filing a complaint on the RBI’s official portal

30. The Consumer Protection Act, 2019

Q51: Who can file a complaint under the Consumer Protection Act, 2019?

• A) Any consumer
• B) Only registered consumer organizations
• C) Only government authorities
• D) Only individual consumers with proof of purchase

Answer: A) Any consumer

Q52: Under the Consumer Protection Act, 2019, what is the maximum penalty for unfair trade practices?

• A) Rs. 1 lakh
• B) Rs. 10 lakh
• C) Rs. 50 lakh
• D) Rs. 1 crore

Answer: C) Rs. 50 lakh

31. The Right to Information Act, 2005

Q53: Under the Right to Information Act, 2005, what is the time limit for disposing of an RTI application?

• A) 30 days
• B) 45 days
• C) 60 days
• D) 90 days

Answer: A) 30 days

Q54: Which of the following is a public authority under the Right to Information Act, 2005?

• A) Central Government
• B) State Government
• D) All of the above

Answer: D) All of the above

32. Opening Accounts of Various Types of Customers

Q55: What is the key requirement when opening an account for a minor under the Banking Regulations?

• A) The minor must be at least 18 years old
• B) A guardian must open the account on behalf of the minor
• C) The minor must provide a photo ID proof
• D) Only a minor’s parent can open the account

Answer: B) A guardian must open the account on behalf of the minor

Q56: What document is required to open a current account for a legal entity?

• A) Proof of address
• B) Legal Entity Identifier (LEI)
• C) Company’s Memorandum and Articles of Association
• D) All of the above

Answer: D) All of the above

33. Operational Aspects of Deposit Accounts

Q57: Which of the following is a prohibited activity for a deposit account holder?

• A) Making deposits at an ATM
• B) Withdrawing funds without sufficient balance
• C) Adding a nominee to the account
• D) Closing the account after 3 years

Answer: B) Withdrawing funds without sufficient balance

Q58: What is the consequence of an account being classified as “inoperative”?

• A) The account is automatically closed
• B) The account continues to accrue interest
• C) The account will not be allowed for withdrawals or transactions
• D) The account holder will be charged a penalty fee

Answer: C) The account will not be allowed for withdrawals or transactions

34. Foreign Exchange Remittance Facilities for Individuals

Q59: Which of the following is a permissible inward remittance under FEMA guidelines?

• A) Payments for educational purposes
• B) Payments from family members for personal expenses
• C) Payments for importing goods into India
• D) All of the above

Answer: D) All of the above

Q60: Under the Foreign Exchange Management Act (FEMA), what is the maximum amount that can be remitted for personal use to foreign countries?

• A) USD 10,000 per year
• B) USD 250,000 per year
• C) USD 100,000 per year
• D) USD 500,000 per year

Answer: B) USD 250,000 per year

35. Cash Management Services and Its Importance

Q61: Which of the following is not considered a Cash Management Service (CMS)?

• A) Fund transfer services
• B) ATM cash replenishment services
• C) Payroll management services
• D) Personal loan facilities

Answer: D) Personal loan facilities

Q62: What is the main benefit of utilizing CMS for a business?

• A) Reduction in tax liabilities
• B) Efficient cash flow management
• C) Simplified investment tracking
• D) High-interest rates on deposits

Answer: B) Efficient cash flow management

36. Payment and Collection of Cheques and Other Negotiable Instruments

Q63: What is the effect of crossing a cheque?

• A) The cheque can only be deposited in the payee’s account
• B) The cheque is invalid for any transaction
• C) The cheque must be presented in person at the bank’s counter
• D) The cheque can be endorsed and transferred to another person

Answer: A) The cheque can only be deposited in the payee’s account

Q64: What is the time limit for presenting a cheque for payment under the Negotiable Instruments Act?

• A) 6 months
• B) 3 months
• C) 1 year
• D) 2 years

Answer: A) 6 months

37. Responsibility of Paying Bank

Q65: What is the responsibility of a paying bank in case of a forged cheque?

• A) The paying bank is not responsible
• B) The paying bank is liable to compensate the customer
• C) The paying bank should report the forgery to the police
• D) The paying bank should return the cheque to the drawer

Answer: B) The paying bank is liable to compensate the customer

Q66: In which of the following scenarios can a paying bank refuse to make payment on a cheque?

• A) The signature of the drawer is forged
• B) The account has insufficient funds
• D) All of the above

Answer: D) All of the above

38. Statutory Protection to Collecting Bank, Duties of the Collecting Bank

Q67: What is the primary duty of the collecting bank in relation to a cheque?

• A) To ensure the authenticity of the cheque
• B) To honor the cheque and make payment to the payee
• C) To collect the cheque on behalf of the drawer
• D) To return the cheque if it is dishonoured

Answer: C) To collect the cheque on behalf of the drawer

Q68: When can a collecting bank be held liable for dishonouring a cheque?

• A) If the cheque is presented after the validity period
• B) If the bank has not properly authenticated the cheque
• C) If the bank accepts a post-dated cheque
• D) All of the above

Answer: D) All of the above

39. Ancillary Services

Q69: Which of the following is not a form of electronic payment system in India?

• A) Real Time Gross Settlement (RTGS)
• B) National Electronic Funds Transfer (NEFT)
• C) Electronic Benefit Transfer (EBT)
• D) Cash on Delivery (COD)

Answer: D) Cash on Delivery (COD)

Q70: Which of the following is a feature of Mobile Banking in India?

• A) Access to branch-only services
• B) Limited transaction types
• C) Real-time transaction updates and fund transfers
• D) Only available for large corporate accounts

Answer: C) Real-time transaction updates and fund transfers

40. Financial Inclusion & Financial Literacy

Q71: What is one of the key elements of financial inclusion in India?

• A) Ensuring that all citizens have access to bank loans
• B) Extending banking services to underserved and unbanked populations
• C) Offering high-interest savings accounts to all customers
• D) Restricting financial products to only government employees

Answer: B) Extending banking services to underserved and unbanked populations

Q72: What initiative is aimed at increasing financial literacy in rural India?

• A) National Financial Literacy Mission (NFLM)
• B) Pradhan Mantri Jan Dhan Yojana (PMJDY)
• C) Financial Literacy Week (FLW)
• D) All of the above

Answer: D) All of the above

41. Customer Service in Banks

Q73: Which of the following is considered a part of good customer service at a bank?

• A) Providing clear information about products and services
• B) Ensuring prompt resolution of complaints
• C) Offering personalized financial advice
• D) All of the above

Answer: D) All of the above

Q74: What should a bank do if a customer complains about unauthorized transactions on their account?

• A) Ignore the complaint if it’s a small amount
• B) Immediately block the account and investigate the issue
• C) Ask the customer to report the incident to the police
• D) Charge a fee for the investigation

Answer: B) Immediately block the account and investigate the issue

42. Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Q75: Under the RBI Integrated Ombudsman Scheme, what is the maximum time frame for resolving a complaint?

• A) 15 days
• B) 30 days
• C) 45 days
• D) 60 days

Answer: B) 30 days

Q76: What can a customer do if the complaint filed with the bank is not resolved under the RBI Ombudsman Scheme?

• A) File a complaint in the Consumer Forum
• B) Approach the High Court
• C) Escalate the complaint to the Banking Codes and Standards Board of India (BCSBI)
• D) Escalate the complaint to the RBI Ombudsman

Answer: D) Escalate the complaint to the RBI Ombudsman

43. The Consumer Protection Act, 2019

Q77: Which of the following is a new feature introduced in the Consumer Protection Act, 2019?

• A) Establishment of the Central Consumer Protection Authority (CCPA)
• B) Introduction of Online Mediation
• C) Enhanced penalties for misleading advertisements
• D) All of the above

Answer: D) All of the above

Q78: What is the maximum time limit for filing a complaint in the District Consumer Disputes Redressal Forum?

• A) 2 years from the date of cause of action
• B) 3 years from the date of cause of action
• C) 5 years from the date of cause of action
• D) 1 year from the date of the issue

Answer: A) 2 years from the date of cause of action

44. The Right to Information Act, 2005

Q79: What is the maximum time period for a public authority to respond to an RTI application?

• A) 30 days
• B) 45 days
• C) 60 days
• D) 90 days

Answer: A) 30 days

Q80: Which of the following is considered exempt under the Right to Information Act, 2005?

• A) Information related to the privacy of individuals
• B) Information on national security
• C) Information covered by legal privilege
• D) All of the above

Answer: D) All of the above

45. Banker-Customer Relationship

Q81: Which of the following is true regarding the banker-customer relationship?

• A) A bank must act in the best interest of its customers
• B) The relationship is primarily based on trust
• C) The bank has the right to refuse service under certain conditions
• D) All of the above

Answer: D) All of the above

Q82: In a banker-customer relationship, which of the following is a duty of the bank?

• A) To ensure the confidentiality of the customer’s information
• B) To act with reasonable care in handling customer transactions
• D) All of the above

Answer: D) All of the above

46. AML-KYC Guidelines

Q83: What is the main purpose of Anti-Money Laundering (AML) regulations?

• A) To identify and prevent financial crimes
• B) To increase profitability for banks
• C) To reduce the risk of foreign currency fluctuation
• D) To promote cross-border trade

Answer: A) To identify and prevent financial crimes

Q84: What does the "Know Your Customer" (KYC) process primarily aim to do?

• A) Verify the identity of customers
• B) Detect and prevent financial crimes
• C) Ensure that customers have the necessary funds
• D) Both A and B

Answer: D) Both A and B

47. Money Laundering & Financing of Terrorism Risks

Q85: Which of the following is considered a risk factor in money laundering?

• A) Large, irregular cash deposits
• B) Transactions with countries known for lax AML regulations
• D) All of the above

Answer: D) All of the above

Q86: What is the role of the Financial Action Task Force (FATF) in combating money laundering?

• A) It provides guidelines to prevent money laundering
• B) It monitors and evaluates countries' AML frameworks
• C) It issues blacklists of countries with weak AML regulations
• D) All of the above

Answer: D) All of the above

48. Foreign Exchange Remittance Facilities for Individuals

Q87: What is the primary objective of the Foreign Exchange Management Act (FEMA)?

• A) To regulate the foreign exchange market
• B) To facilitate foreign investments
• C) To manage foreign exchange transactions in India
• D) All of the above

Answer: D) All of the above

Q88: Which of the following is true regarding inward remittances under FEMA?

• A) They are only allowed for specific purposes like education and medical treatment
• B) They must be transferred through authorized dealers only
• C) They can be received in both INR and foreign currency
• D) Both B and C

Answer: D) Both B and C

49. Operational Aspects of NRI Business

Q89: Which of the following accounts is a Non-Resident Indian (NRI) allowed to open in India?

• A) Non-Resident External (NRE) Account
• B) Non-Resident Ordinary (NRO) Account
• C) Foreign Currency Non-Resident (FCNR) Account
• D) All of the above

Answer: D) All of the above

Q90: What is the main purpose of a Non-Resident External (NRE) account?

• A) To manage foreign income in India
• B) To repatriate income earned abroad to India
• C) To hold and invest in Indian assets
• D) All of the above

Answer: D) All of the above

50. Foreign Currency Accounts for Residents and Other Aspects

Q91: Under which circumstances can a resident individual open a foreign currency account in India?

• A) Only for purposes related to travel
• B) Only for trading in foreign currencies
• C) Only for making investments in foreign countries
• D) As permitted by the Reserve Bank of India

Answer: D) As permitted by the Reserve Bank of India

Q92: Which of the following is true about foreign currency accounts held outside India by residents?

• A) Indian residents are permitted to hold accounts in foreign currency outside India
• B) Indian residents must obtain prior approval from the RBI to open such accounts
• C) They are only permitted for foreign nationals
• D) Indian residents can hold them without any restrictions

Answer: B) Indian residents must obtain prior approval from the RBI to open such accounts

51. Cash Management Services and Its Importance

Q93: What is the primary benefit of Cash Management Services (CMS) for businesses?

• A) Increased revenue from interest
• B) Improved management of cash flow and liquidity
• C) Reduction in banking fees
• D) None of the above

Answer: B) Improved management of cash flow and liquidity

Q94: Which of the following is typically offered by Cash Management Services?

• A) Collection and payment services
• B) Reconciliation and reporting of transactions
• C) Cash forecasting and liquidity management
• D) All of the above

Answer: D) All of the above

52. Payment and Collection of Cheques and Other Negotiable Instruments

Q95: According to the Negotiable Instruments Act, what is the primary condition for the payment of a cheque?

• A) The cheque must be signed by the drawer
• B) The cheque must be presented within the validity period
• C) The cheque must have sufficient funds in the account
• D) All of the above

Answer: D) All of the above

Q96: In the case of a dishonoured cheque, who is liable for the penalty?

• A) The drawer
• B) The payee
• C) The collecting bank
• D) The endorsers

Answer: A) The drawer

53. Responsibility of Paying Bank

Q97: What is the responsibility of a paying bank when a cheque is presented for payment?

• A) To verify the authenticity of the cheque
• B) To ensure that there are sufficient funds in the drawer’s account
• D) All of the above

Answer: D) All of the above

Q98: If a bank pays a cheque with a forged signature, which of the following is true?

• A) The bank is liable to pay the amount
• B) The bank is not liable and may charge the customer
• C) The bank has the right to refuse payment
• D) None of the above

Answer: B) The bank is not liable and may charge the customer

54. Statutory Protection to Collecting Bank, Duties of the Collecting Bank

Q99: What is the statutory protection granted to a collecting bank under the Negotiable Instruments Act?

• A) Protection against claims for the dishonour of cheques
• B) Protection against fraudulent endorsements
• C) Protection for collecting the cheque in good faith
• D) None of the above

Answer: C) Protection for collecting the cheque in good faith

Q100: Which of the following is a duty of a collecting bank when collecting a cheque?

• A) To ensure that the endorsement is valid
• B) To ensure the cheque is properly dated
• C) To examine the cheque for any signs of alteration
• D) All of the above

Answer: D) All of the above

55. Ancillary Services

Q101: Which of the following services is included under ancillary banking services?

• A) Demand Drafts (DD)
• B) Telegraphic Transfer (TT)
• C) Real-Time Gross Settlement (RTGS)
• D) All of the above

Answer: D) All of the above

Q102: What is the key advantage of using Electronic Funds Transfer (EFT) systems like NEFT and RTGS?

• A) It allows faster processing of payments
• B) It ensures security of financial transactions
• C) It reduces the need for physical banking visits
• D) All of the above

Answer: D) All of the above

56. Financial Inclusion & Financial Literacy

Q103: Which of the following is the goal of financial inclusion in the banking sector?

• A) To ensure that everyone has access to financial products and services
• B) To limit access to financial services to the upper class
• C) To promote high-interest savings accounts
• D) To reduce the number of bank branches

Answer: A) To ensure that everyone has access to financial products and services

Q104: What role does financial literacy play in promoting financial inclusion?

• A) It helps individuals make informed decisions about banking and investments
• B) It improves the ability to manage personal finances
• C) It aids in understanding the risks associated with financial products
• D) All of the above

Answer: D) All of the above

57. Customer Service in Banks

Q105: Which of the following is an example of poor customer service in a bank?

• A) Timely response to customer queries
• B) Offering products suited to customer needs
• C) Ignoring customer complaints
• D) Providing clear and transparent information

Answer: C) Ignoring customer complaints

Q106: What is the role of a bank in managing customer complaints?

• A) To address complaints promptly and fairly
• B) To refer all complaints to higher authorities
• C) To avoid handling complaints and leave them unresolved
• D) To charge fees for handling complaints

Answer: A) To address complaints promptly and fairly

58. Grievance Redressal & RBI Integrated Ombudsman Scheme 2021

Q107: Under the RBI Integrated Ombudsman Scheme, what happens if a bank fails to resolve a customer’s complaint?

• A) The customer can approach the Ombudsman for further assistance
• B) The customer is entitled to a refund of all banking fees
• C) The customer is asked to submit the complaint to the Reserve Bank of India directly
• D) The customer has to wait for another 60 days for resolution

Answer: A) The customer can approach the Ombudsman for further assistance

Q108: What is the maximum compensation a customer can receive under the RBI Ombudsman Scheme for non-fulfillment of customer service commitments?

• A) Rs. 5 lakhs
• B) Rs. 10 lakhs
• C) Rs. 20 lakhs
• D) Rs. 50 lakhs

Answer: B) Rs. 10 lakhs

59. The Consumer Protection Act, 2019

Q109: Which of the following is true about the Consumer Protection Act, 2019?

• A) It provides for the establishment of consumer redressal forums
• B) It empowers the Central Consumer Protection Authority (CCPA) to act against unfair trade practices
• C) It includes provisions for resolving complaints related to e-commerce
• D) All of the above

Answer: D) All of the above

Q110: Which of the following is a major provision under the Consumer Protection Act, 2019?

• A) Consumer disputes can be filed in consumer courts
• B) E-commerce businesses must adhere to consumer protection guidelines
• C) Mediation is now an integral part of dispute resolution
• D) All of the above

Answer: D) All of the above

60. The Right to Information Act, 2005

Q111: Under the Right to Information (RTI) Act, who can file an application for seeking information?

• A) Any citizen of India
• B) Only government employees
• C) Only residents of a specific state
• D) Only legal professionals

Answer: A) Any citizen of India

Q112: How long does it take for a public authority to respond to an RTI application if the information concerns the life and liberty of a person?

• A) 30 days
• B) 45 days
• C) 10 days
• D) 60 days

Answer: C) 10 days

61. Banker-Customer Relationship

Q113: In a banker-customer relationship, which of the following is the bank’s duty?

• A) To honor the customer's cheque if the account is in order
• B) To act as a fiduciary of the customer’s funds
• C) To provide accurate information about products and services
• D) All of the above

Answer: D) All of the above

Q114: What is the banker’s duty when a customer requests for withdrawal of funds from a joint account?

• A) The bank must ensure that the request is signed by all joint account holders
• B) The bank must honor the request if the balance is sufficient, without checking signatures
• C) The bank is not responsible for withdrawal requests in joint accounts
• D) The bank must refer the matter to the legal heirs

Answer: A) The bank must ensure that the request is signed by all joint account holders

62. AML-KYC Guidelines

Q115: Which of the following is required for a bank to comply with KYC norms?

• A) Verification of identity and address of the customer
• B) Ensuring that the customer is not involved in illegal activities
• C) Periodic updating of customer records
• D) All of the above

Answer: D) All of the above

Q116: What is the consequence of not adhering to the AML-KYC regulations?

• A) The bank may face penalties and regulatory actions
• B) The customer’s account may be frozen
• C) The bank may lose its operating license
• D) All of the above

Answer: D) All of the above

63. Banker as a Trustee

Q117: In a banker-trustee relationship, what is the primary responsibility of the banker?

• A) To act in the best interest of the trust beneficiaries
• B) To manage the funds as per the trust deed
• C) To avoid personal gain from the trust funds
• D) All of the above

Answer: D) All of the above

Q118: What is a common example of a trustee relationship in banking?

• A) A bank managing an employee provident fund
• B) A bank acting as a custodian for securities
• C) A bank holding assets in a trust account
• D) All of the above

Answer: D) All of the above

64. Bailee-Bailor Relationship

Q119: What is the primary duty of a bailee in the bailee-bailor relationship in banking?

• A) To return the goods or property to the bailor in the same condition
• B) To sell the goods for the bailor
• C) To transfer ownership of the goods to a third party
• D) To safeguard the goods until they are needed

Answer: A) To return the goods or property to the bailor in the same condition

Q120: If a customer deposits valuables in a bank's safe deposit locker, what is the nature of the relationship between the bank and the customer?

• A) Bailee and Bailor
• B) Trustee and Beneficiary
• C) Agent and Principal
• D) None of the above

Answer: A) Bailee and Bailor

65. Agent-Principal Relationship

Q121: In an agent-principal relationship, which of the following is true?

• A) The agent has the authority to act on behalf of the principal
• B) The agent must act in the best interest of the principal
• C) The agent is entitled to a commission for services rendered
• D) All of the above

Answer: D) All of the above

Q122: A bank acting on behalf of a customer to execute a financial transaction is an example of which relationship?

• A) Bailee-Bailor
• B) Agent-Principal
• C) Trustee-Beneficiary
• D) None of the above

Answer: B) Agent-Principal

66. Lessor and Lessee

Q123: What is the role of a lessor in a lease agreement with a lessee?

• A) To transfer the ownership of property to the lessee
• B) To provide the lessee with the right to use the property for a specified period
• C) To manage the property and ensure it remains in good condition
• D) None of the above

Answer: B) To provide the lessee with the right to use the property for a specified period

Q124: Which of the following is an example of a lessor-lessee relationship in banking?

• A) A bank leasing a building to a business
• B) A bank lending money to a business
• C) A bank offering investment services to clients
• D) A bank acting as a trustee for a customer

Answer: A) A bank leasing a building to a business

67. Indemnifier and Indemnified

Q125: In an indemnity agreement, what is the role of the indemnifier?

• A) To compensate the indemnified party for any losses or damages
• B) To provide legal services to the indemnified party
• C) To act as a guarantor for the indemnified party
• D) None of the above

Answer: A) To compensate the indemnified party for any losses or damages

Q126: If a bank guarantees repayment of a loan on behalf of a customer, what is the bank’s role?

• A) Indemnifier
• B) Lessee
• C) Bailee
• D) Agent

Answer: A) Indemnifier

68. Different Deposit Products or Services

Q127: Which of the following is a type of deposit account offered by banks?

• A) Fixed Deposit (FD)
• B) Recurring Deposit (RD)
• D) All of the above

Answer: D) All of the above

Q128: What is the main difference between a Fixed Deposit (FD) and a Savings Account?

• A) FD offers higher interest rates, and funds are locked for a specific period
• B) A savings account offers higher interest rates
• C) FDs are available for withdrawal at any time
• D) A savings account has no interest rate

Answer: A) FD offers higher interest rates, and funds are locked for a specific period

69. AML-KYC Framework in India

Q129: Which regulatory body oversees the implementation of Anti-Money Laundering (AML) and Know Your Customer (KYC) norms in India?

• A) Securities and Exchange Board of India (SEBI)
• B) Reserve Bank of India (RBI)
• C) National Bank for Agriculture and Rural Development (NABARD)
• D) Ministry of Finance

Answer: B) Reserve Bank of India (RBI)

Q130: According to AML-KYC guidelines, what is the primary purpose of customer identification?

• A) To detect and prevent money laundering activities
• B) To ensure the financial stability of the bank
• C) To collect personal data for marketing purposes
• D) None of the above

Answer: A) To detect and prevent money laundering activities

70. Reporting Obligations under FATCA/CRS

Q131: What does FATCA stand for?

• A) Financial Accounts Transparency and Compliance Act
• B) Foreign Account Tax Compliance Act
• C) Federal Account Transaction Compliance Act
• D) None of the above

Answer: B) Foreign Account Tax Compliance Act

Q132: Under FATCA/CRS, which of the following entities is required to report information on foreign accounts?

• A) Banks
• B) Financial Institutions
• C) Insurance Companies
• D) All of the above

Answer: D) All of the above