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PPB Mock Test 2

Principles & Practices of banking

JAIIB Exam Study Material: PPB Mock Test 2

Eligibility Criteria for Scheduled commercial banks (AD Category I) to become trading/clearing members of the currency derivatives segment to be set up by the stock exchanges recognized by SEBI ...... (i) Minimum Net Owned Fund of 500 crore, (ii) Minimum CRAR of 10 per cent, (iii) Net NPAs of less than 3 per cent and a profit making record for the last three years

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
.............................................

Which of the following statements, is correct? (i) Banks are required to submit a return of unclaimed deposits under section 26 of banking regulation Act, 1949, (ii) This includes all the accounts which have not been operated upon for ten years, (iii) The return of unclaimed deposits is required to be submitted on 31st March of every year

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
.............................................

Which of the following is not a function of capital market regulatory authority i.e. SEBI, in India?

a. regulation of debt market
b. control over the equity market
c. framing the rules for pension funds
d. supervision over listed companies

Ans - c
.............................................

Which of the following are characteristics of an equity share? (i) it is called ordinary share also, (ii) it represents complete ownership of the company, (iii) it provides voting right to the holder

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - b
.............................................

Which of the following is correct regarding loans to professional and self employed under the priority sector? (i) Total borrowings should not exceed Rs. 10 lac of which working capital not to exceed Rs. 2 lac, (ii) For qualified medical practitioners, total borrowings should not exceed Rs. 15 lac where working capital of Rs. 3 lac

a. Only (i)
b. Only (ii)
c. Either (i) or (ii)
d. Both (i) and (ii)

Ans - d
.............................................

Which of the following statements is notcorrect in connection with interest on loans & advances?

a. The bank may waives the part or full of interest charged to a borrower
b. The bank has liberty to provide interest free loan to a borrower
c. In case the interest charged by the bank is not in confirmity with the rate prescribed by the RBI, the court may disallow such excess interest
d. The bank can charge the interest below the prime lending rate

Ans - b
.............................................

What does moral suasion imply? (i) RBI may issue certain guidelines to be followed during a particular period, (ii) It is a kind of presentation and request made by RBI on commercial Banks, (iii) RBI may advise to provide favorable conditions for Bank credit in the period of business recession

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
.............................................

What are the powers of RBI under section 35A of the Banking Regulation Act 1949 for issuing directions to Bank? (i) To issue directions in the public interest or in the interest of Banking policy, (ii) To prevent affairs of banking company if it is detrimental to the interests of depositors, (iii) To secure the proper management of any banking company

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
.............................................

Equity investments by a bank in a subsidiary company, or a financial services company, including financial institutions, stock and other exchanges, depositories, etc., which is not a subsidiary should not exceed ...... of the bank’s paid-up share capital and reserves

a. 5 percent
b. 10 percent
c. 20 percent
d. 25 percent

Ans - b
.............................................

What is open market operations being conducted by the Reserve bank of India? (i) It has direct impact on cash base of the commercial bank, (ii) It is a process of buying and selling govt. securities by the RBI on behalf of the government, (iii) It doesn't have any direct impact on cash base of the commercial bank

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - a
.............................................

The maximum shareholding of a stock exchange can be held by a single investor, is restricted to ......

a. 2%
b. 5%
c. 10%
d. 15%

Ans - b
.............................................

RBI approval is required for appointment of a chairman of a bank. Which of the following statements, is correct? (i) RBI approval is required for appointment of a chairman of a bank, (ii) RBI is empowered to remove top managerial personnel of a bank, (iii) RBI may appoint suitable person in place of the person so removed

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
.............................................

Which of the following agencies maintain RIDF (Rural Infrastructure Development Fund)?

a. Ministry of Rural development
b. Reserve Bank of India
c. NABARD
d. SIDBI

Ans - c
.............................................

Which of the following are characteristics of a preference share? (i) holders get voting rights similar to an equity shareholder, (ii) owners get a fixed dividend, (iii) owners get the dividend in preference over the equity shareholders

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - c
.............................................

In the wake of liberalization policy of 1991, most of credit control tools have since been discontinued and are no longer used by RBI, Which are they? (i) Credit Rationing/Allocation and Credit Planning, (ii) Credit Authorisation, (iii) Inventory and Credit Norms

a. Only (i) and (ii)
b. Only (i) and (iii)
c. Only (ii) and (iii)
d. (i), (ii) and (iii)

Ans - d
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