Transcript INDIAN INSTITUTE OF BANKING & FINANCE JAIIB LEGAL ASPECTS OF BANKING

INDIAN INSTITUTE OF
BANKING & FINANCE
JAIIB
MODULE (C & D)
LEGAL ASPECTS OF BANKING
OPERATIONS
Saturday
19,April, 08
T M C VASUDEVAN
01.. Identify which one is correct.
A.. A contract of indemnity has two persons
B.. A contract of guarantee also has two
persons.
C.. A minor can take a loan as a borrower
D.. A pledge in respect of company advance
has to be registered with ROC.
02..The award of a Banking Ombudsman will be
reviewed by
A.. The Executive Director of RBI
B.. The Deputy Governor in charge of Rural
Planning and Credit Department of RBI.
C.. The Finance Secretary
D.. The Banking Ombudsman himself
03..Which is not correct (Banking
Ombudsman)
A.. The maximum amount the Banking
Ombudsman can award as compensation is
Rs.10 lacs.
B.. Limitation period for filing of the review
application is one month.
C.. Failure to honor guarantee does not come
under its purview .
D.. None of the above
04..SARFAESI Act 2002, extends to whole of
India including the State of Jammu &
Kashmir. Also applicable to housing finance
companies.
.. The act is effective from 21.06.2002. It also
covers the earlier loans which were
outstanding.
05..Based on the observation of the Supreme
Court in the Mardia Chemicals vs Union of
India case, the Government of India issued
notification amending the provisions of the
SARFAESI Act. The amendment stipulates
payment of 50% amount instead of 75% as
originally enacted. (When appealed)
06.. . Take over of loans or advances from
the Bank or Financial Institution for the
purpose of recovery is known as Asset
reconstruction.
. The word Board is used in the Act refers to
the Securities and Exchange Board of India
(SEBI)
07..Bank T has lent to S a sum of Rs.2 lacs on
the hypothecation of a van.. Who is the
Originator as per the provisions of the
SARFAESI Act.
a.. Borrower S
b.. Creditor T
c.. Both are not Originators
d.. SEBI
08..Default should have been committed by
the debtor.
. The borrower’s account should have been
classified as NPA as per the guidelines of
RBI.
. The Act is applicable only to a Secured
creditor and not to an unsecured creditor
09.. Obligor is a person liable to pay to the
lender (originator).
As per the contract terms and conditions or
otherwise.
He has to discharge any obligation in
respect of a financial asset whether existing,
future, conditional or contingent or and
includes a borrower.
10.. Not considered as Qualified Institutional
Buyer
a.. Bank
b.. Insurance company
c.. Individual Investor
d.. An Asset Management Company
11...Which one is not pertaining to
Hypothecation.
a.. A charge in or upon any movable property
b.. Right in favour of the creditor
c.. Possession also with the lender
d.. Retaining the ownership with the owner of
the property
12.. The securitization company or reconstruction
Company to raise funds from qualified
institutional buyers by formulating schemes.
.Separate scheme wise accounts to be
Maintained.
.The Scheme invites subscription to security
receipts proposed to be issued by such company
under the scheme.
13.. Bank X is the secured creditor and U is the
borrower and defaulter The branch head is R. U
has given his land as security which is under his
possession. The outstanding liability is shown
under NPA. Identify the Obligor & Originator.
a.. X and U respectively
b.. X and R respectively
c.. U and X respectively
d.. R and U respectively
14.. Who will receive the Security receipt from
whom.? (SARFAESI Act)
a.. Secured Creditor from Principal Debtor
b.. Institutional Investor from Securitisation
company.
c.. Securitization company from Institutional
investor
d.. Secured Creditor from Securitization company
15.. RGH, the secured creditor. After completing the
formalities / procedures (as per SARFAESI ACT)
the assets mortgaged by KWY were purchased by
a Securitisation and reconstruction company
called JFI for Rs.27 lacs. Then
a.. JFI will issue a security receipt RGH
b.. RGH will receive debentures from JFI
c.. KWY will issued security receipts to JFI.
d.. RGH will get debentures from KWY
16...In Mardia Chemicals vs Union of India
Supreme Court as declared that
A.. SARFAESI Act is Constitutionally valid
B.. Except a part of Section 17(2)
C.. To Deposit 75% for appeal, the Apex
court was not in favour
D.. All the above
17.. A reconstruction company
A.. is engaged as property developer
B.. is formed for the purpose of asset
reconstruction
C.. is registered with SEBI
D.. is not registered under the
Companies Act
18..The Government of India has
A.. issued an order
B.. issued a notification amending the
Sec17(2) of SARFAESI Act.
C.. Instead of 75%, the borrower filing
an appeal has to deposit 50%
D.. Both B & C are appropriate
• 19..A Life Insurance company, a Nationalised
bank and a foreign institutional investor have
formed a Company to invest in Securitisation
company as qualified institutional buyer. Then
they will have to
• a.. Register with SEBI
• B.. Register with SEBI is not a must
• C.. Register with SEBI is a must
• D.. Register with SEBI when directed only
20.. DEF a Securitisation and reconstruction
company acquired financial asset from
MNO secured creditor. On account of this
transaction DEF would become
A.. Purchaser
B.. Seller
C.. Owner
D.. None of these
21..The regulatory authority for Securitisation
and reconstruction company is
a.. Company Law Board
b.. Concerned Registrar of Companies
c.. SEBI
d.. None of these
22.. .The Securitisation Company not only to be
registered under the Companies Act but also
needs registration from RBI as per
A.. RBI Act
B.. Companies Act
C.. SARFAESI Act
D.. SEBI Act
23.. A person who is holding 12% of the paid up
equity capital of the reconstruction company is
known as
A.. Sponsor
B.. Obligor
C.. Originator
D.. Institutional investor
24.. Identify the beneficiaries of the trusts formed by
Securitisation compnay. ACE is the Securitisation
company. GHY is the Secured creditor. BDF is the
Institutional investor.
a.. GHY
b.. BDF
c.. ACE
d.. None of them
25.. A security receipt is
A.. Similar to Bank’s Fixed Deposit receipt
B.. Issued by Securitisation Company
C.. Issued to Securitisation Company
D.. Issued to a Secured Creditor
26... The Securitisation company can acquire financial asset
without execution of any deed of assignment or transfer in
its favour by the original creditor.
A.. True
B.. False
C.. Without agreement it cannot be legally
valid
D.. Deed of Assignment is a must.
27.. Debenture as per the provision of SARFAESI
A.. Appears on the left hand side of the balance
sheet
B.. It is shown as liability representing
commitment
C.. It is for payment of consideration to be paid
to the bank for acquisition of financial asset
from it
D.. It represents the money borrowed.
28.. Identify the incorrect one (Reconstruction
Company)
A.. It has to obtain registration certificate from
RBI.
B.. It has to have minimum capital of Rs.100 crores
at the time of registration
C.. It can formulate separate schemes for acquisition
of financial assets
D.. It has to disclose the risk factors to the investors.
29.. The Security receipt (not having any interest or right
and so on in immovable property) issued to the holder
by the Securitisation company attract registration as
per the Registration Act,1908.
A.. True
B.. False
C.. Registration compulsory for such
receipts.
D.. None of the above
30..If there is a dispute among the bank,
securitisation company and the qualified
institutional buyer, then the same to be settled by
conciliation or arbitration as provided in the
A.. Reserve Bank of India Act
B.. SARFAESI Act
C.. Arbitration and Conciliation Act
D.. Both a & c
31..An institutional investor NG wish to transfer the
security receipt (Which has an undivided interest
in the financial asset) to MV.
a.. Registration under the Registration Act required.
b.. Registration optional
c.. Registration need not be insisted.
d.. Registration of Security receipts does not arise.
32.. The power given to the secured creditor,
as creditor has overriding effect over the
provisions related to mortgage in
A.. The Registration Act
B.. The Contract Act
C.. The SARFAESI Act
D.. The Transfer of Property Act
33..The Securitisation company can set up separate
trusts scheme wise and act trustees for such
schemes as provided in the Securitisation
Companies and Reconstruction Companies
(Reserve Bank) Guidelines and Directions,2003.
The beneficiaries of such trusts are
a.. Debenture holders b.. Lending bankers c..
Debtors d.. None of them
34..Acquisition of financial asset from the
originator, by Securitisation or
reconstruction company is known as
a.. Reconstruction
b.. Securitisation
c.. Transfer of Assets
d.. Purchasing
35.. .. Securitisation company is a company
registered under the Companies Act,1956 for the
purpose of securitisation. It also needs registration
from RBI under the provisions of SARFAESI Act.
.. Security agreement includes an agreement,
instrument or any other document or arrangement
under which security interest is created in favor of
secured creditor
36.. The minimum capital requirement for
securitisation or reconstruction company, at
the time of registration is
a.. Rs. 35 Crore
b.. Rs. 55 Crore
c.. Rs.105 Crore
d.. None of the above
37..E has created a mortgage by way of
deposit of title deeds with the secured
creditor bank J. This represents
a.. Security Receipt
b.. Secured Debenture
c.. Security Agreement
d.. Secured Debt
38..Secured debt means a debt which is
secured by any security interest.
..Secured Asset means the property on which
security interest is created.
.. The powers given by SARFAESI Act for
enforcement of securities are against
secured assets only
39..Security Receipt is issued
a.. To Borrower by the Bank
b.. To Qualified Institutional buyer by the
Reconstruction Company
c.. To Creditor by the Securitisation Company
d...To Reconstruction company by the
Securitisation Company
40..Which one is appropriate. (SARFAESI)
a..B D F is the institutional investor and will receive
Debentures
b.. KRT is the Securitisation company will issue
Security receipt as well as Debentures
c.. GU is the Secured creditor and will receive
security receipt
d.. MNP, a borrower of the bank will issue
Debenture in lieu of payment towards outstanding
41.. ..The security receipt evidences the
purchaser’s undivided right, title and
interest in the security.
..These receipts are transferable in the market.
.. Sponsor is a person holding not less than
10% of the paid up capital of securitisation
or reconstruction company.
42.. ..Depending on the nature of security asset RBI
has the powers to specify different amounts of
owned funds for different companies.
..The company can formulate separate schemes for
acquisition of financial asset.
..The securitisation or reconstruction company can
act as trustees for such trusts and manage the assets
held in trust.
43.. IBF a securitisation and recosnstruction
company wish to raise funds by way of
deposits.
a.. They can approach public for the same.
b.. Cannot raise funds by way of deposits
c.. If need arises with the permission of RBI
d.. They can raise funds by way of Deposits
on Private placement basis only.
44.. ..The Securitisation or reconstruction company
can acquire financial asset without execution of
any deed of assignment or transfer in its favor by
the concerned bank or the financial institution.
..Assignment is complete on the acquiring company
issuing debenture or bond and incorporating
therein the terms and conditions of acquisition.
45.. .. The securitisation involves two stages.
In the first stage it is acquisition of financial
assets and undivided interest therein.
Second stage is issue of security receipts in
favor of investors for the purpose of raising
money from investors
46..As per the provisions of SARFAESI Act
the document to be executed requires
(identify which one is not correct)
a.. Payment of stamp duty
b.. As per the provisions of the Indian Stamp
Act
c.. State Stamp duty laws
d.. Central Stamp duty laws
47.. ..As per RBI guidelines,
a...an acquisition of funded assets should not include
take over of outstanding commitments, if any, of
any bank or financial institution to lend further.
b…terms of acquisition of security interest in nonfund based transactions should provide for the
relative commitments to continue with bank or
financial institute till demand for further funding
arises
• 48..Which one is correct (Securitisation matter)
a. Security receipt is in favor of investor
b. Security receipt is issued with permission from
Company Law Board
c. Security receipt can be transferred by the secured
creditor
d. Security receipt is issued to the borrower who has
failed to repay
49..Bank D decides that the financial asset now be
acquired by the securitisation company RV.
Originally the Asset was given as security by QL
(a partnership firm) In such an event a notice of
such development to be given to
a.. QL and such notice is not compulsory.
b.. Such notice is not optional
c.. The Obligor, which is compulsory as per the Act
d.. RV
50.. If the obligor is a company there is no
need for modification of charge, when the
notice regarding acquisition of financial
asset by a securitisation company, is not
given to the debtor company.
However, if such notice is given to the
obligor company, then notice to the
Registrar of companies becomes essential.
51.. Bank K had advanced to W who had defaulted leading to a
securitisation company acquiring the financial asset. In fact no notice
has been issued to W. Later on the debtor remits some amount towards
his dues to the bank from where he had availed the financial facility.
a.. K can retain the funds
b.. The bank has an obligation to remit to the securitisation company
c.. K first of all should not accept such payment since his contract with W
is over on account of securitisation transaction.
d.. The bank has to find out why the W had not paid earlier when the
liability was outstanding with them.
52.. ..The securitisation or reconstruction company
raises funds for acquisition of asset by issue of
security receipts. Public/individual investors are
barred from investing in a securitisation or
reconstruction company by the Act.
.. Realisation of the asset is held and applied towards
redemption. i.e., repayment of investments as
assured while issuing the security receipt.
53.. In case there is no realization and repayment by the securitisation or
reconstruction company, then the qualified institutional buyers are
entitled to call a meeting of all qualified institutional buyers making
investments in that scheme and the resolution passed in the meeting.
a.. The first institutional buyer has the right to call for such meeting
b.. The qualified institutional buyers holding not less than 75%
of the total value of security receipts has the right
c.. Any one of the Institutional investor who takes the lead gets the priority
d.. None of the above
54..GNP bank has got a security receipt from a
securitisation company called BBG. GNP wish to
transfer the security receipt. Then
a.. Such security receipt need not be registered
b.. Such security receipt has to be registered
c.. Such security receipt cannot be transferred
d.. Such security receipt has to be retained by the
bank who is the original institutional investor and
hence there is no question of registration / non
registration.
55.. ..Asset reconstruction means acquisition
of any right or interest of any bank or
financial institution in any financial asset
for the purpose of realisation. Powers to
take measures for asset reconstruction are
given without any prejudice to the
provisions contained in any other law
56.. ..If the cause of default in an unit is
mismanagement or lack of expertise on the
part of the existing management the
securitisation or reconstruction company
has the powers to take over the management
or change the management. This power can
be exercised even when there is no default.
57.. ..The SARFAESI Act is silent about the
grounds or reasons on the basis of which
action of acquisition can be taken.
Therefore, loan agreements between
bank/financial institution and the borrower
are required to be taken into account as
provisions of this do not have overriding
effect on existing contracts and laws.
58.. When the asset is acquired for
reconstruction there is limit of six years for
such reconstruction.
a.. Correct
b.. Incorrect
c.. Not 6 years but 5 years
d.. It is 7 years and not 6 years
59..While QRS a securitisation company is
taking over the financial asset from the
secured creditor AA. Then AA will receive
a.. Debenture
b.. Security Receipt
c.. Undertaking
d.. None of these
60..Which one is incorrect
a… At the time of enforcing securities as per the provisions of
SARFAESI Act, the securitisation company may itself
acquire secured assets for use or resale, if such resale is
through a public auction.
b.. The Securitisation company is permitted to set up trusts
who can issue security receipts.
c.. While issuing security receipts detailed disclosures are not
required to be made by the securitisation company
d.. While issuing security receipts detailed disclosures are
required to be made by the reconstruction company.
61.. ..Under the SARFAESI act a secured
creditor can enforce the security interest
created in his favor without the
INTERVENTION
of the Court or Tribunal.
..The act deals with how the notice to be given
by the secured creditor asking for
repayment of the out standings.
62.. ..The secured creditor bank to give a notice
asking the debtor to clear the liability in full
within 60 days from the date of notice.
.. The above is applicable to such debtors who have
defaulted and classified as NPA.
.. There is no bar for the creditor to seek the other
legal remedies such as resorting to filing of suit in
a competent court
63..Identify which one is not incorrect. (SARFAESI Act)
a.. Notice as per the provisions of the act to be given to the
Creditor.
b.. Notice as per the provisions of the act is a statutory notice.
c.. The Act does contemplate a reply form the borrower to the
notice.
d.. When the offer of sale of property is accepted by the
purchaser and the secured creditor accepting the offer
confirms the sale, the purchaser has to deposit 50% of the
offer price.
64..As per Sec 13(2) of the SARFAESI Act the first notice to be given
asking for clearance of full liability within
A.. 30 days
B.. 60 days
C.. 60 days from the date of notice
D.. 60 days from the receipt of notice
65.. Borrower C has been asked to repay outstanding liability of Rs.15.56
lacs (as per provisions of SARFAESI Act) by his Creditor banker DB.
He has sent a reply. The bank responded to the notice and made their
position clear. Based on that reply, C can file an appeal
A.. in the high court
B.. in the DRT
C.. cannot file an appeal
D.. In the appropriate court for their intervention
66.. For a Public Sector bank an Authorized Officer
A.. Deputy General Manager
B.. At least a Chief Manager
C.. Senior Branch Manager
D.. Minimum AGM level
67..For classification of any account as NPA it is
important that the classification is done as per
A.. Directives of Head Office of the Bank concerned
B.. Viewpoints of R B I
C.. Guidelines of the Concerned Bank’s Corporate
Office
D.. None of these
68..An authorised officer issues the second
notice as per the provisions of the act
known as
a.. Recalling
b.. Possession
c.. Take Over
d.. Auction
69..If the offer of sale of property is accepted by the
purchaser and the secured creditor confirms then the
purchaser has to deposit
A..
B..
C..
D..
25%
75%
50%
No such pre condition
70..Which one is correct,
a.. The authorised officer has to publish possession
notice in two leading newspapers.
b.. Both papers should be in vernacular language
c.. Before 60 days of sale of immovable property the
borrower should be given notice about the sale
d.. If the price of secured asset is coming less than
the reserve price, the authorised officer to sell the
asset at a lower price with the consent of creditor
only and not that of the debtor
71..The authorized officer is authorized to
issue sale certificate. Such certificate is
conveyance of immovable property and
requires stamping as per the provisions of
Stamp Act.
a.. True
b.. False
c.. Relevant State Laws
d.. Central Laws
72.. As the powers of enforcing securities need to be
exercised prudently, fairly and with due care and
caution the Rules framed under SARFAESI Act
provide that Authorized Officer should be of the
level equivalent to Chief Manager of a public
sector bank or equivalent or any other authorised
person exercising powers of superintendence,
direction and control of the business or affairs of
the creditors, as the case may be
73..If the price for secured asset is coming
less than the reserve price, the authorized
officer can sell the asset at a lower price
a.. Then his decision will be final
b.. With the consent of the secured creditor
c.. With the consent of the borrower and the
secured creditor
d.. Without consulting any one
74..For taking possession and then sale of
immovable property, the secured creditor is
required to serve a possession notice on the
borrower and by affixing the possession notice on
the outer door or at the conspicuous place at the
property.
..The authorised officer is required to publish the
possession notice in two leading newspapers, one
of which should be in vernacular language.
75..When the secured creditor is required to take
possession or control of the secured asset or to sell
such secured asset, he can take the help of the
Chief Metropolitan Magistrate or District
Magistrate.
..For seeking their help a request in writing is
required.
..To approach the authority within whose jurisdiction
the secured asset or documents related to it are
situated.
76..When the secured creditor takes over the management of
business of a borrower, he may publish a notice in a
newspaper published in English language and in a
newspaper published in Indian language in circulation in
the place where the principal office of the borrower is
situated, for appointment of
a.. If the borrower is a company as defined in the Companies
Act, 1956 to be the directors of such company, or
b.. In any other case, to be the administrator of the business of
borrower.
77..Any person, including borrower,
aggrieved by any of the measures taken by
the secured creditor or his authorised officer
for taking possession of the security may
make an application along with the
prescribed fees to the Debt Recovery
Tribunal having jurisdiction within 45 days
from the date on which such measures are
taken.
78..The DRT has to dispose off the application
preferred seeking justice, within a period of
a.. 30 days
b.. 45 days
c.. 60 days
d.. 90 days
79..Against the DRT’s order, appeal can be filed to
the appellate Tribunal within 30 days from the
date of receipt of the order of Debt Recovery
Tribunal. The Tribunal has the powers for reasons
to be recorded to reduce this amount to 33.33% of
the claim amount.
a.. True b.. False c.. Not 33.33& but 25%
d.. Not 33.33% but 50%
80. Registration with Central Registry (Under
SARFESI) is not required on certain things
and charges. Identify the Act.
A.. Merchant Shipping Act,1958
B.. Patents Act,1970
C.. Designs Act 2000
D.. None of the above
81..A record to be maintained at the Head
Office of the Central Registrar to record
transactions relating to
a.. Securitisation of financial assets
b.. Reconstruction of financial assets
c.. Creation of security interests
d.. All the three
82.. KRT a Reconstruction company failed to comply with
some of the directions issued by RBI, then KRT is
punishable by RBI with fine not exceeding Rupees Three
lacs for the default. For further continuation of the offence
an additional fine is up to Rs.2000/= per day of default can
be imposed.
a.. True
b.. False
c.. Rs.5 lacs and Rs.10000/- per day respectively
d.. Rs.7 lacs and Rs 5000/- per day respectively
83.. The provisions of SARFAESI Act not applicable
in respect of
a.. A pledge of movable within the meaning of the
Indian Contract Act,1872(sec172)
b.. Any right of an unpaid seller as per Sale of Goods
Act,1930 (sec 47)
c.. Any security interest created in an agricultural
land
d.. All the above
84..Which one is incorrect (Provisions of SARFAESI Act not
applicable )
a.. Creation of seucrity interest in any vessel as defined within
the meaning of Sec 3955) of the Merchnat Shipping
Act,1958.
b.. Any case in which the amount due is less than twenty five
percent of the principal amount and interest there under.
c.. Any security interest created in an agricultural land
d.. Creation of any security in any aircraft as defined in sec 2
of Aircraft Act 1934
85.. CBD
bank has sold the security after invoking the
provisions of SARFAESI Act. After that they wish to
proceed in the civil court as the liability outstanding is
Rs.7.38 lacs plus accumulated interest of Rs.1.32 lacs
A.. Not possible
B.. Possible
C.. Impossible
D.. Doubtful
86..Bank R has exhausted the measures of recovery through SARFAESI
Act provisions. Still there is a liability of Rs.5.38 to be recovered from
F . The original documents has life.
a.. R can still proceed in the Civil Court by filing a suit against F.
b.. R has to satisfy with whatever they could get by disposing of the
security
c.. Once the SARFAESI Act provisions invoked by the secured creditor
and the proceedings over, automatically the creditor looses his further
rights against the debtor.
d.. F need not worry for the balance amount, since the security stands
disposed off.
87..Bank z had lent Rs.9 lacs to a borrower and obtained
security in the possession of the debtor by way of
hypothecation. Later on by using the provisions of the
SARFAESI Act, bank could recover only Rs.6.50 lacs. The
outstanding dues works out to rs.6.05 lacs. Then the bank
a.. Cannot proceed against the borrower under Civil Law
b.. Since the bank had availed the support of SARFAESI Act
has to forego the balance outstanding
c.. The bank should have applied their mind before invoking
Securitisation Act
d.. The bank can proceed against the borrower under Civil
Law subject to the provisions of Limitation Act as well.
88..Bank H has used the Securitisation Act provisions and
could recover only Rs. 18 lacs . Still they will have to
recover Rs.14 lacs plus interest. Fortunately for the bank
the limitation period on the loan documents is intact.
a.. Bank has to seek legal remedy through the Civil Court.
b.. Bank has to seek legal remedy through DRT
c.. Bank has to forego since they have already availed the
legal avenue
d.. Bank may have to approach the borrower straight away
and request him to settle the balance amount.
89..Secured Creditor Bank O has taken measures to invoke
the provisions of SARFAESI Act. They succeeded partially
recovering the debt. After completion they are left with
only personal security of the borrower L. However the loan
documents have become time barred . The balance
outstanding being Rs.12.32 lacs + interest and other
charges.
a.. O will fail on legal grounds
b.. O will succeed on legal grounds
c.. O to file a civil suit
d.. Since the outstanding is beyond Rs10 lacs O to move
DRT.
90.. A complaint alleging deficiency in
banking service may be filed with the
Banking Ombudsman having the
jurisdiction
a.. Issue of drafts to non customers
b.. Inordinate delay in collection of cheques
c.. Both a & b
d.. None of the two
91..No complaint to the Banking Ombudsman shall
lie unless the complainant had before making a
complaint to the Banking Ombudsman made a
written representation to the bank and either the
bank had rejected the complaint or the
complainant had not received any reply within a
period of one month after the bank concerned
received his representation or the complainant is
not satisfied with the reply given to him by the
bank.
92..The complaint is made not later than one
year after the cause of action has arisen.
..The complaint is not in respect of the subject
matter, which was settled through the office
of the Banking Ombudsman in any previous
proceedings
93.. If a complaint is not settled by agreement within
a period of one month from the date of receipt of
the complaint or such further period as considered
by Banking Ombudsman, he can pass an award.
.. He shall be guided by the evidence placed before
him, the principles of law and practice, directions,
instructions and guidelines issued by RBI from
time to time to pass the necessary award.
94..The Banking Ombudsman while passing an
Award in respect of a complaint may direct the
complainant to furnish a surety for refund of
amount received under the Award along with
interest if any.
a.. There is no such requirement
b.. It is not Surety but Indemnity
c.. It is not only Indemnity but also suitable Surety
d.. None of the above
95..A bank not agreeing to accept the Award
passed under the Banking Ombudsman
scheme may file a review application before
the Review Authority within one month
from the date of receiving copy of the
Award. Bank’s application to be approved
by the bank’s Chairman or in his absence by
the Managing Director or any other officer
of equal rank.
96..The Banking Ombudsman assuming the charge
of an arbitrator shall follow the procedure as laid
down under the scheme read wit the provisions of
a.. The Arbitration Act, 1996
b.. The Reconciliation Act 1996
c.. The Reserve Bank of India Act,1934
d.. The Arbitration and Conciliation Act 1996
97..
The Banking Ombudsman from his
office could be removed in the
public interest by
A.. Parliament
B.. RBI Governor
C.. Central Government
D.. Finance Minister
98..A Banking Ombudsman is appointed by Reserve
Bank of India on the recommendations of a
Selection Committee of four persons exclusive of
the Governor of RBI.
a.. True
b.. False
c.. Inclusive of the Governor of RBI four persons.
d.. Governor is part of the Selection committee but
other than him four persons also select a Banking
Ombudsman
99..The Selection Committee for selecting the
Banking Ombudsman consists of
a.. Three Deputy Governors of RBI
b.. Three Executive Directors of RBI
c.. Additional Secretary, Finance, Department
of Economic Affairs as a Special invitee
d.. A & C only
100. For a Debt Recovery Tribunal, the Presiding
Officer holds office for a term of 5 years from the
date on which he enters upon his office or until he
attains the age of 62 years, which ever is less.
a.. Correct
b.. In correct
c.. Not 5 years and 62 years but 3 years and 65 years
respectively
d.. Not 5 years but 7 years whereas 62 years of age is
correct .
101..As per the observation of the High Court, the
DRT has power to entertain the application for
execution of the decree of foreign court.
.. Every application to be filed before the DRT shall
be accompanied by appropriate fees.
.. The Tribunal may , on giving opportunity to both
the sides of being heard, pass interim or final order
for payment of amount including interest thereon.
102..A Civil suit which is pending stands
transferred to the DRT. Then the fees
payable
a.. Will be decided by the DRT
b.. Standard fees to be paid as applicable to a
new case referred to the DRT
c.. No fees required to be paid
d.. None of the above
103.. Presiding Officer of DRT
is
a.. Appointed by the Committee of Bankers
b.. Appointed by the RBI
c.. Appointed by the RBI in consultation with Central
Government
d.. None of the above.
104.. Appeal before the Appellate Tribunal to
be disposed off finally from the date of
receipt of appeal within
A.. 3 months
B.. 6 months
C.. 180 days
D.. None of these
105.. The Correction any clerical or
arithmetical mistake in Recovery
Certificate has to be done by (Certificate
issued by the Presiding Officer)
A.. Concerned Clerk himself
B.. The Presiding Officer of the Tribunal
C.. The Recovery Officer
D.. Any one of them
106..The Recovery officer
while carrying out his job, a
third party is affected. Then he can file an appeal
A.. Within 30 days
B.. To the Tribunal
C.. Both A& B are correct
D.. Both A & B are wrong
107...Who is not the public servant as per the Sect 21 of
the Indian Penal Code.
A.. The Chairperson of an Appellate Tribunal
B.. A Director of a Public Limited Company
C.. The Recovery Officer
D.. The Presiding Officer of a tribunal
108.... The DRT issues Recovery Certificate to the applicant.
Recovery Officer has to proceed to recover the amount
specified in the Recovery Certificate, by adopting
a.. Attachment and sale of movable and immovable property
of the defendants
b. Arrest of the defendant and his detention in prison
c.. Appointment of a receiver for the management of the
movable and immovable properties of the defendant.
d.. Any one of the above.
109..Any person aggrieved by the order passed by the
Tribunal or deemed to have been passed by the Tribunal
under DRT Act, may prefer an appeal to the concerned
Appellate Tribunal.
a.. Within 45 days form the date on which copy of the order is
received.
b.. If the order was made by the Tribunal with the consent of
the parties no appeal possible
c.. Both a & b
d.. Within 60 days from the date on which copy of the order is
received.
110.. Bank V has moved the DRT for justice. Before
the final order is passed Bank C who have also
advanced to the same borrower has approached
the DRT for inclusion in the same proceedings.
a.. Permissible
b.. Not permissible
c.. Not permissible since both the contracts are
different
d.. DRT would not entertain and advise the bank to
file a separate case.
111..Identify which one is incorrect (DRT matters)
a.. Recovery officer can ask the defendant to
furnish by affidavit particulars of his assets.
b.. The defendant can raise a plea before the
Recovery Officer about correctness of the
amount ordered to be paid.
c.. A counterclaim filed before DRT has the same
effect as a plaint in cross-suit.
d.. For the matters for which the Tribunals are
empowered the Civil Courts have no jurisdiction.
112..Under the Bankers Book Evidence Act,
the term Judge refers to
a.. Judge of a special Court
b.. Judge of a High Court
c.. Judge of a DRT
d.. Judge of Civil Court
113..The Bankers’ Book Evidence Act extends
to whole of India except the Sate of Jammu
& Kashmir,.
..Bankers’ books’ include ledgers, daybooks,
cashbooks, account books and all other
records used in the ordinary course of
business of a bank.
114..A certified copy of any entry in a Bankers’
Book is received in legal proceedings as
conclusive evidence for existence of such entry.
a.. Correct
b.. In correct
c.. It is not Conclusive but prima facie evidence
d.. Support
115.. For making the order that bank officer should either
produce the books of account or appear as witness (as per
the Bankers Book Evidence act) can be made by the Court
or Judge with out summoning the bank. Such order shall
be served on the bank at least 5 days before the same is to
be obeyed.
a.. True
b.. False
c.. Not 5 days but 3 days
d.. At least 3 clear working days
116..Consumer Protection Council( identify the incorrect one)
A.. The Collector of the District to be the Chairman of the
District Council
B.. State Consumer Protection Council to meet at least 3
meetings every year..
C.. For Central Consumer Protection Council the Chairman
will be the Minister in charge of the consumer affairs in
the Central Government.
D.. The highest council is the Central Council who has the
jurisdiction for the entire country.
117..For filing any complaint before a District
Forum, State Commission or the National
Commission the limitation period is from the
date of cause of action.
A.. 1 year
B.. 2 years
C.. 3 years
D.. None of the above
118.. If the compensation claimed is above
Rs.20 lacs but does not exceed Rs1 Crore
then the appeals against the orders of any
District Forum to be preferred before
A.. The High Court
B.. The State Commission
C.. The Central Council
D.. The National Council
119.. ..The Consumer Protection Act is not applicable in the
State of Jammu and Kashmir.
..The Act is for better protection of the interests of the
consumers and for that purpose to make provision for the
establishment of consumer councils and other authorities
for the settlement of consumers’ dispute.
..The Act is social welfare benefit oriented legislation for the
consumer providing self-contained quasi-judicial
machinery to provide speedy and simple redressal to
consumer disputes.
120..A dispute where the person against whom complaint has
been made, denies or disputes the allegations contained in
the complaint.
a.. Complaint
b.. Consumer Dispute
c.. Dispute
d.. Allegation
121....District Consumer Protection Council to
meet as an when necessary. There has to be at least
two meetings every year.
a.. Correct
b.. Incorrect
c.. At least One meeting
d.. At least Three meetings
122…..Which one is not correct (Consumer Protection matters).
a.
Once the complaint is admitted by the District Forum it cannot be transferred to any
other Court or Tribunal or any authority set up under any law.
b.
Any person aggrieved by the order passed by the District Forum may prefer an
appeal to the State Commission within a period of 30 days from the date of the order.
c.
A person who is a Judge of the Supreme Court, to be nominated by the Law Ministry,
who shall be the Chairman of Selection Committee to the National Commission
d.
For filing any complaint before a District Forums, State Commission or the National
Commission the limitation period is 2 years from the date of cause of action.
123.. Debtor K has executed a Demand Promissory Note and
a Hypothecation agreement to Bank CBM. Then the bank
has made available the finance.
a.. Valid contract
b.. Invalid contract
c.. Quasi contract
d.. No contract
124..Borrower O had executed a demand promissory note on
12.03.2006. Identify the correct limitation date.
a.. 12.03.09
b.. 11.03.09
c.. 13.03.09
d.. None of the above
125..H & J have taken a loan from bank K, by
executing a demand promissory note and other
documents jointly.
a.. H is the promisor
b.. J is the promisee
c.. K the promisor
d.. K is the promisee and both H & J promisors
126.. D had executed an acknowledgment of debt on 22.07.07
for the Demand Promissory Note executed on
27.07.05.Find out the exact limitation date.
a.. 27.07.08
b.. 22.07.10
c.. 27.07.10
d.. 22.07.08
127.. . Identify which is not a valid contract.
a.. Proposal and acceptance
b.. Consideration
c.. Free consent
d.. Agreement under force
128..The bailee is responsible in
case there is a loss to the goods
bailed.
A.. Yes
B.. If he is not taking adequate care
C.. It is bailor and not bailee responsible
D.. False
129..Under Pledge, the
possession is with the
A.. Borrower
B.. Creditor
C.. Owner
D.. Surety
130..Consideration not required
for
A.. An agency
B.. Safe Custody Article
C.. Mortgage
D.. Safe Deposit locker
131..The right of re-sale is available to
A.. An unpaid seller
B.. The user
C.. The Debtor
D.. All
132.. To receive rents and profits arising
from the property
A.. Simple Mortgage
B.. Usufructuary Mortgage
C.. English Mortgage
D.. Mortgage By way of Conditional Sale
133...Bank Z has lent money to R on the personal guarantee of L. The
bank obtained a demand promissory note from R and a guarantee
agreement from both L & R. Among other contents, the guarantee
agreement protected the bank with special clauses for which Guarantor
L has given his consent. When R failed to repay, Z asked L to repay
the loan. He promptly refused and advised the bank to approach R who
only has taken the money. After trying only they can approach him and
not before that, that is what L told the bank.
a.. The stand of L is incorrect
b.. The stand of Z is incorrect
c.. What L says has relevant substance
d.. Z will succeed if they proceed against L even without
proceeding against R based on the guarantee agreement
134.. ..Where there are co-sureties, a release by the
creditor of one of them does not discharge the
others. Also, the surety released does not become
free from his responsibility to the other sureties.
..A surety has the right of Subrogation.
..Any guarantee obtained by means of
misrepresentation made by the creditor is invalid.
..Any guarantee which the creditor has obtained by
means of keeping silence as to material circumstance is also
invalid.
135..A has been appointed as his agent by D.
In turn A has appointed L (another person)
to look after the affairs of D for whom A has
been appointed. Then L is
a.. Not a Principal
b.. Sub Agent
c.. Substituted Agent
d.. Manager
136.. .. No consideration is necessary to create an
agency.
.. In an emergency, an agent has authority to do all
acts to protect his principal form loss as would be
done by a person in his own case.
.. An agent can detain money received by him on
account of goods sold, even if all the goods
consigned to him for sale are not sold.
137.. A bank as a collecting banker has
misplaced the cheque accepted for collection.
The customer when he approached to know
about the realisation of the cheque, then only
the bank could realise it has misplaced the
Cheque.
a.. The bank is responsible
b.. Till the cheque is realized or returned, the bank is not responsible.
c.. If the cheque had been purchased then the bank would have been
responsible and not for collection item.
d.. The bank is not responsible
138.. ..Whether a stipulation in a contract of sale is
condition or warranty depends on the types of
contract. Even if the parties have agreed that a
stipulation is a warranty, in fact, it may be a
condition if it is the basis of the contract.
.. If the sale of goods is by description, there is an
implied condition that the goods shall correspond
with the description.
139... A B C & co a partnership firm has a current account
with bank J. The account is operated by any one of the
partners. A cheque (open cheque) received signed by one
of the partners B, representing the firm and in favour of B.
Another cheque signed by C representing the firm
favouring Self.
a.. The bank is in order in paying both the cheques
b.. The bank is not in order in paying both the cheques
c.. The bank is in order in paying the cheque signed by B and
not by C
d.. The bank is in order in paying the cheque signed by C and
not by B
140.. . Bank F has got the documents executed by a Limited
Company. However they have overlooked to get the
Common Seal affixed on these documents. A reference
to the Articles of Association has revealed that affixing
the Common Seal for the documents has not been
mentioned. In other words, the Articles of Association is
silent with regard to the same.
a. Bank will get protection
b. Bank cannot recover the dues based on the documents
c. Affixing of Common Seal is compulsory in such cases.
d. Affixing of Common Seal is not compulsory unless it is
specifically stated in the Articles of Association
141.. ..When a company exercise its powers to
promote and/or realise any of its objects stated in
the Memorandum of Association, it is known as
Intra vires ( i.e., within the powers of ) the
company.
.. Any other act of the company which is outside the
scope of the objects clause of the Memorandum of
Association is called Ultra vires(i.e., beyond the
powers of ) the company
142.. .. Doctrine of Constructive notice states
that every outsider is assumed to have read
the Memorandum of Association and
Articles of Association.
…Doctrine of Indoor Management lays down
that the outsiders are not required to see the
compliance of internal regulations of the
company.
143..The provisions of FEMA extend to all
over India and also apply to all branches,
offices and agencies outside India owned or
controlled by a person resident in India and
also to any contravention committed outside
India by any such person to whom this Act
applies.
144..(1)The mortgagor apparently sells the
mortgaged property to the mortgagee (2)
The mortgagor delivers possession of the
mortgaged property to the mortgagee
a.. Simple & Equitable
b...Conditional Sale & Usufructuary
c.. Simple & Usufructuary
d.. English & Conditional Sale
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