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Multiple Choice Questions

1. In promissory note the liability of the maker on note is :

(a) Primary and absolute

(b) Secondary

(c) Conditional

(d) Unconditional

2. A collecting Bank gets Statutory Protection under :

(a) R. B. I. Act

(b) Banking Regulation Act

(c) Negotiable Instrument Act

(d) Indian Contract Act

3. A garnishee order is applicable to :

(a) Demand deposit

(b) Time deposit

(c) Recurring deposit

(d) All of the above

4. Any change which alters the business effect of an instrument is considered as material alteration as per :

(a) Section 87

(b) Section 123

(c) Section 124

(d) Section 148

5. A formal certificate of Notary Public attesting the dishonor of the bill by non-payment is called as :

(a) Noting

(b) Protesting

(c) Bouncing of Cheque

(d) None of the above

6. A bill is inland bill if :

(a) It is drawn in India on a person residing in India—Whether payable in or outside India.

(b) Drawn in India on a person residing outside India but payable in India

(c) Both (a) and (b)

(d) None of the above

7. Rights of set off can be exercised immediately on the happening of :

(a) Insolvency

(b) Death of the customer

(c) Income Tax attachment order

(d) All of the above

8. Commercial Bank cannot commence the business of banking without obtaining licence from :

(a) Central government

(b) State government

(c) Reserve Bank of India

(d) Co-operative Bank

9. Mutual funds in India are regulated by :

(a) SEBI

(b) RBI

(c) AMFI


10.Liability of party to negotiate instrument is discharged by the operation of law which may occur on the following ground :

(a) By Lapse of Time

(b) By Merger

(c) Law of Insolvency

(d) All of the above

11. The liability of drawer on dishonour of a cheque under Negotiable Instruments Act is contained in :

(a) Section 140

(b) Section 141

(c) Section 138

(d) Section 139

12. Which of the following is correct statement ?

(a) A cheque is a bill of exchange

(b) A cheque is a bill of lading

(c) Every bill of exchange is a cheque

(d) Every bill of lading is a cheque

13.The objective of KYC (Know Your Customer) requirement as stated in RBI guidelines is :

(a) to enable the customer to open an account

(b) to prevent banking system from being used by antisocial/criminal/terrorist elements

(c) to maintain banker-customer relationship

(d) None of the above

14. Securitisation is a process of acquiring the loans classified as :

(a) Bank debts

(b) Bad debts

(c) Performing debts

(d) Non peforming debts

15. The long form of ATM is :

(a) All Time Money

(b) All Tale Money

(c) Automated Teller Machine

(d) All of the above


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