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Jaiib Free Mock Test 2020

Principles & Practices of banking

JAIIB Exam Study Material: Jaiib Free Mock Test 2020



A bank should pay attention to which of the following parts, while sanctioning loans ? (i) Money advanced should earn reasonable yield to the bank, (ii) It is repaid in time, (iii) It raise the living standard of the borrower


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


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


Risk weight for bill purchased under LC, for capital adequacy purposes is ...... %


a. 10
b. 20
c. 25
d. 50


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


Blue chip securities refer to ......

a. shares of any company
b. shares of companies, which are listed at any of the stock exchange
c. shares of good companies
d. All of the above


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


Promissory note is ...... (i) In writing, containing unconditional undertaking or promise, (ii) Signed by the maker, (iii) requires payment of stamp duty

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


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


A power of attorney is terminated in the following occasions. (i) death of the customer, (ii) lunacy of the customer, (iii) insolvency of the customer


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


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


Under Tandon Committee’s 2nd method of lending, the working capital margin i.e. net working capital should be ......


a. 25% of the project sales
b. 25% of current assets
c. 25% of the banks limits
d. 25% of the long term sources


Ans - b
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Which of the following is not a source of working capital for a manufacturing firm?


a. Sundry creditor
b. Unsecured advances
c. Bank term loan
d. Bank overdraft


Ans - c
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No dues certificate in case of agricultural advances is exempted up to a loan of ......


a. Rs.25000
b. Rs.50000
c. Rs.75000
d. Rs.100000


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


Which of the following statement/s is/are true ? (i) An equitable mortgage of the building constructed on the land in cantonment areas is not considered to be a goods security. Only legal mortgage may be accepted, (ii) A mortgage by deposit of title deeds takes effect against any mortgage deed subsequently executed and registered which relates to the same property, (iii) If the mortgagor is a limited company, the charge by way of mortgage simple, equitable or of any other nature must be filed for registration with the Registrar of Companies.


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


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


what relationship is created when the bank collects a cheque in clearing?


a. holder for value
b. clearing member and principle
c. agent and principle
d. collecting bank and holder


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


In non-fund based credit facilities ...... (i) cash outflow may or may not take place, (ii) If it takes place that it is not immediate. It would be at future date, (iii) cash outflow is immediate


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


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


Keeping goods in safe custody is as per provisions of ......


a. NI Act
b. Indian Partnership Act
c. Indian Contract Act
d. All the above


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


Reserve Bank of India has given freedom to the participating banks in consortium to frame ground rules for the consortium arrangements, such as ...... (i) rules for entry/exist from the consortium, (ii) minimum and maximum share of each bank, (iii) number of participating banks


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


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


Primary security is one which ...... (i) is created out of loan amount, (ii) Is the main security to cover the advance and is owned by the borrower, (iii) can be sold in primary money market


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


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


A collateral security refers to ...... (i) is created out of loan amount, (ii) a security which is available parallel to or side by side with the bankers personal right of action against the borrower, (iii) a security which is offered in addition to prime security to secure the advance of the bank. Collateral security may belong to borrower on third party


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


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


It is advisable to have the bank's name boards prominently displayed on the go downs containing the hypothecated goods to ...... (i) avoid a possible attempt being made by the Receiver in the event of the borrower's insolvency to treat the borrower as the 'reputed owner' of the hypothecated goods, (ii) obviate the possibility of the same goods being hypothecated to another bank


a. Only (i)
b. Only (ii)
c. Both (i) and (ii)
d. Neither (i) nor (ii)


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


A director of the bank wants to raise loan from your bank against ......


a. FDR of other bank
b. share of same bank
c. surrender value of Life Policy. Loan can be given against
d. all the above


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


Banks evaluate a credit proposal based on which of the parameters? (i) character, capital, condition, (ii) capacity, collateral, compliance, (iii) capital, collateral, (iv) capacity, compliance


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


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


State which of the following statement/s is/are correct? (i) KYC norms is applicable only to deposit accounts, (ii) A cash credit facility is a fund based limit, (iii) An incomplete negotiable instrument is called as an inchoate instrument


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


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


Bill of lading, Railway Receipt are negotiable instruments under ......


a. NI Act
b. Sec 3 of Transfer of Property Act
c. Sec 137 of Transfer of Property Act
d. Sale of Goods act


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



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