1. _________ defines international banking as a sub set of commercial banking transactions a. b. c. d. Ans.

A Aliber Phillip callier Kotler Taylor

2. Public sector banks include:a. ationali!ed banks b. "#$ and its subsidiaries c. %egional %ural #anks d. All of the abo&e Ans. ' (. _________ refers to the cross-currency facts of banking businesses a. )ross-border banking b. $nternational banking c. *&erseas banking d. one of the abo&e Ans. # +. ,nder section +-A of the banking regulation act . o person other than bank is authori!ed to accept deposit /ithdra/al by che0ue1 23emptions to abo&e case are: a. b. c. d. Ans. ' "a&ings #ank scheme by go&ernment Any firm or person notified by go&ernment )entral go&ernment authority #oth a 4 b

5. Traditionally banks met their li0uidity needs by a. 6anipulating their asset structure b. Their li0uid assets c. %ely solely on asset management d. one of the abo&e Ans. A 7. ________ in terms of t/ice 4 cost in central to asset and liability management a. Asset li0uidity b. 8o/ .salable1 the bank9s c. #oth a 4 b d. one of the abo&e Ans. ) :. $n country like $ndia; 6a<ority of rural population /as go&erned by a. b. c. ,norgani!ed group of #ankers $ndigenous #anks 6oney lenders

d. All of the abo&e Ans. ' =. )entral #ank of a country:a. b. c. d. Ans. ' *ccupies a central position in the monetary 4 banking structure of the country Acts as the leader of money market "ole right of note issue All of the abo&e

-. The central #ank of $ndia is a. b. c. d. Ans. A %#$ "#$ $)$)$ $'#$

1>. ?i0uid assets normally maintained as a. b. c. d. Ans. A ?i0uidity buffer "alable bank9s assets @ield generators )an9t say

11. The central #ank functions under A a. b. c. d. Ans. ' Beneral superintendence )entral #oard of directors )entral regulatory authority #oth a 4 b

12. 'e&elopmental banks play the role of a. b. c. d. Ans. ) 'e&elopment corporation Cinance corporation #oth a 4 b *nly b

1(. $dentify the liability sourcesa. b. c. d. Ans. A 6oney markets ?i0uidity 'eposits Bo&ernment funds

1+. ______ structure is a key aspect of li0uidity management a. Product

b. Cunding c. 'eposits d. one of the abo&e Ans. # 15. A bank /ith a _________ deposit base ha&e fe&er li0uidity problems a. b. c. d. Ans. ' "table ?arge 'i&erse All of the abo&e

17. Camous $ndian bank transacts foreign e3change business a. b. c. d. Ans. A "#$ %#$ 8'C) $'#$

1:. )entral #oard of directors comprises a. b. c. d. Ans. ' Bo&ernor Cour deputy go&ernor 'irectors nominated by central go&ernment All of the abo&e

1=. _________ is used to refer to the o/nership of banks facilities located in one country by citi!ens of another a. b. c. d. Ans. # $nternational banking Coreign banking 2urocurrency banking All of the abo&e

1-. The term ________ refers to the location and o/nership of banking facilities in a large number of countries and geographic regions. a. b. c. d. Ans. A 6ultinational banking 2urocurrency banking $nternational banking Coreign banking

2>. $#Cs are directly e0ui&alent to the operations of ," banks /ith a. b. c. d. Ans. ' #ooking "hell #rass plate center All of the abo&e

21. _________ of a bank directly impacts cost of operation. a. b. c. d. Ans. # *rgani!ational structure Cunding structure #udget structure #oth a 4 b

22. Cunding structure determines a bank9s a. b. c. d. Ans. A Profit potential risk le&el Assets; liabilities 'eposits loans #oth a 4 b

2(. $nter-bank funding includes all a. b. c. d. Ans. ' 'eposits ?oans Ad&ances All of the abo&e

2+. ______ normally e3poses a bank to additional currency risk. a. $nter bank finding b. Coreign funding c. $nternational borro/ing d. one Ans. ) 25. The e3istence of ________ is a good indicator of international confidence. $n a country and its economy. a. b. c. d. Ans. # Dostro accounts Coreign funding 23port promotion agencies 2ndorsement

27. The money market is a market for _________ that are close substitutes of money a. "hort term financial assets b. ?ong term financial assets c. #oth a 4 b d. "udden demand Ans. A 2:. the most important feature of a money market instrument is a. b. c. $t is li0uid $t can be turned o&er 0uickly at lo/ cost $t pro&ides an a&enue for e0uilibrating the short term surplus finds of lendess and the re0uirements of bro/nness

d. All of the abo&e Ans. ' 2=. __________ is the ultimate determinant of a bank9s lending capacity a. b. c. d. Ans. ) #alance Cunds )apital 'eposits

2-. A bank9s balance sheet cannot be a e3pended beyond the le&el determined by its ______ a. b. c. d. Ans. A )apital ade0uacy ratio Assets liabilities ratio #uffer stock Amount of capital impacts

(>. $n _____ the based committee started consultations leading to issuance of ne/ capital accord. a. b. c. d. Ans. # 1--= 1--1--7 2>>>

(1. The additional pillars of ne/ capital frame/ork are a. b. c. d. Ans. ' An enhanced super&isory re&ie/ process 6inimum capital re0uirements 2ffecti&e use of market discipline #oth a 4 b

(2. #ased a record comprises a. b. c. d. Ans. ' 'efinition of regulatory capital 6easures of risk e3posures %ules specifying the le&el of capital maintained in relation to these risks All of the abo&e

((. #asel capital accord of 1-==; introduce a _________ based on the risk /eighted composition of a bank9s assets and off balance sheet e3posures a. b. c. d. Ans. A 'efector capital ade0uacy standard )onsistent ade0uacy ratio "afe guard sol&ency $ncomplete information

(+. $n; the _________ on banking super&isor took the lead the de&elop con&ergence of super&isory regulations go&erning the capital ade0uacy of internationally acti&e banks a. 1-:5; arasimha committee

b. 1--5s; Derma committee c. 1-=>s; #asel )ommittee d. All of the abo&e Ans. ' (5. ,ntil the 1-=> bank act /as passed; opening of foreign bank subsidiaries /ithin ________ /as prohibited a. b. c. d. Ans. # Eapan )anada %ussia #ritain

(7. A __________ is part of a parent organi!ation that is incorporated else /here a. b. c. d. Ans. ) )onsortium banks #ank agencies Coreign branch All of the abo&e

(:. ________ banks are <oint &entures of the larger commercial banks. a. b. c. d. Ans. A )onsortium Coreign ?ocal )entral

(=. )onsortium banks are primarily concerned /ith a. b. c. d. Ans. ' $n&estment They arrange large loans ,nder /rite stocks 4 bonds All of the abo&e

(-. )entral bank financing /as directed to/ard a special purpose determined by a. b. c. d. Ans. ) )apital Bo&ernment Bo&ernment policies Cinancial inno&ation

+>. The _________ of a bank represents the buffer a&ailable to protect creditors against losses a. b. c. d. Ans. A )apital Cunds ?oans Ad&ances

(2-Marks)
+1. ,nder _________ funds are transacted on o&ernight basis and under __________; funds are transacted for the period9s bF/ 2 days and 1+ days a. )all money market; notice money market b. otice money market; call money market c. $nter-bank market; notice money market d. one of the abo&e Ans. A +2. T/o essential functions of commercial banks are a. b. c. d. Ans. A #orro/ing lending 'eposits; /ithdra/al Tending; in&estments All of the abo&e

+(. Cormation and management of co-operati&e societies comes under the control of ________ /hile licensing and regulation of banking business nests /ith _____ a. b. c. d. Ans. # #% act; %#$ act "tate go&ernment %#$ )entral go&ernment )ooperati&e societies #oth a 4 b

++. $n Asia in ________ and in 2urope in _________ the financial crisis took place a. b. c. d. Ans. A 1--:; 1--= 1--7; 1--= 1--=; 1--5 1--:; 1--2

+5. $ndian financial system is classified into ________ 4 _________ sector a. "tructured; unstructured b. *rgani!ed; unorgani!ed c. Primary; "econdary d. one of the abo&e Ans. #

+7. The scheduled banks grouped into ______ banks and _________ banks. a. $ndian banks; foreign banks b. )o-operati&e; )ommercial c. )entral banks; 23change banks d. one of the abo&e Ans. A

+:. The ________ and _______ of capital impacts a bank9s competiti&e position a. b. c. d. Ans. # ?oans; ad&ances )ost amount "afety; soundness All of the abo&e

+=. )osts associated /ith monetary policy regulations are ________ and __________ a. 6inimum reser&e re0uirements; capital ade0uacy re0uirements b. )redit substitutes; )apital ade0uacy c. #oth a 4 b d. one of the abo&e Ans. A +-. $n order to grant _________and _____ a bank should be able to attract deposits from public a. ?oans; ad&ances b. )ost; amount c. Ad&ances; capital d. one of the abo&e Ans. A 5>. $ndustrial banks plays an important role in the _________ and _________ of the companies a. 'esigning 4 implementation of policies b. 6anagement 4 administration c. "hares and debentures d. one of the abo&e Ans. # 51. The proportion of ________ funding to ________ funding is a mean of measuring sensiti&ity to large depositors a. b. c. d. Ans. # $ndi&idual group Gholesale %etail #oth a 4 b ?i0uidity &olatility

52. #anks deploy their funds by ________ and _________ a. b. c. d. Ans. # ?ending ad&ancing ?oans; ad&ances and in&estment #oth a 4 b ?ending in&estment

5(. ___________ indicate /hat the bank o/ners and _________ represent /hat the bank o/es. a. b. c. d. ?iabilities; assets $ncome; e3penditure Assets; liabilities 23penditure; income

Ans. ) 5+. 'e&elopmental banking is to cater the needs of ________ and ________ finance in the country. a. b. c. d. Ans. ) Agricultural; non-agricultural $ndustrial; on-industrial Agricultural; industrial #oth a 4 b

55. Gith liability management the t/o sources of banks funds are __________ and ________ a. b. c. d. Ans. A )ore deposits; purchased funds )ore deposits; non-care deposits 'eposits funds Cunds; in&estments

57. _________ impro&ing measures affect banks balance sheets; /hile ___________ impro&ing measures affects the banks income a. Profitability; sol&ing b. "tock impro&ement; financial restructuring c. "ol&ency; profitability d. one of the abo&e Ans. ) 5:. "tock impro&ements emanate chiefly from __________ /hile sustainable flo/ impro&ements results from ___________ a. b. c. d. Ans. A Cinancial restructuring; operational restructuring "ol&ency; sustainable profitability *perational restructuring; financial restructuring Profitability; sol&ency

5=. The bank can be thought of as a price takes in __________ markets; /here as in ______ market bank can be &ie/ed as a price setter a. Purchased funds; core deposits b. )ore deposits; purchase funds c. Public; pri&ate d. one of the abo&e Ans. A 5-. Assets li0uidity is central to ________ and _________ a. Asset management b. ?iability management c. one of the abo&e d. #oth a 4 b Ans. ' 7>. 'eposits ________ including itemi!ation for all customers /ith deposits and deposit ______ including on the ade0uacy of the systems that record and control depositor transactions.

a. )oncentration; administration b. %ange; access c. Administration; concentration d. one of the abo&e Ans. A

(4-Marks)
71. Bood principle of lending are: 1. "afety and "ecurity 2. ?i0uidity (. Profitability +. Producti&e purposes 5. 'i&erse function of funds 7. "tatutory corporations a. b. c. d. Ans. ) 1; 2; (; 5;7 2; (; +; 5; 7 1; 2; (; +; 5 1; 2; (; +; 5; 7

72. 6atch the follo/ing 1. Cund-based credit facilities 2. on fund based credit facilities

HiI. Term loans HiiI. #ank guarantee HiiiI. #ill finance Hi&I. ?etter of credit facility H&I. )ash credits Fo&erdrafts

a. b. c. d. Ans. )

1 A HiI; HiiI; HiiiI 4 2 A Hi&I; H&I 1 A HiiI; Hi&I 4 2 A HiI; HiiiI; H&I 1 A HiI; HiiiI; H&I 4 2 A HiiI; Hi&I All of the abo&e

7(. 6atch the follo/ing 1. 'eregulation 2. 'isinter mediation

(. $nstitutionali!ation +. $nno&ation a. b. c. d. Ans. ) 1 A Hi&I; 2 A HiiiI; ( A HiI; + A Hi&I 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI

HiI significant liberali!ation of domestic banking and capital market regulation HiiI. 'isplacement of funds from international banking and sa&ing institutions; /hen deposits seek higher yields HiiiI $ncreasing domination of securities markets by financial institutions managed by professional manages Hi&I Proliferation of ne/ products.

7+ $dentify the .key 0uestions1 for analy!ing the measuring performance of banks

1. 8o/ far can gi&en acti&ity be sustainedJ 2. $s the bank dependent on some uni0ue or local factors for its market share or ad&ances focusJ (. 8o/ bank funds are obtained for stable demandsJ +. Ghy is the performance at &ariance /ith that of the peer groupJ a. b. c. d. Ans. ) 1; 2; (; + 1; 2; ( 1; 2; + 2; (; +

75. 6atch the follo/ing:1. "ection :HiI of %#$ Act 2. "ection 1># and (7AA of #% act (. "ection 22 of #% act +. "ection 57 in #% act a. b. c. d. Ans. ) 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I 1 A HiiiI; 2 A HiI; ( A Hi&I; + A HiiI 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI 1 A HiiI; 2 A Hi&I; ( A HiiiI; + A HiI

HiI in 1-75; cooperati&e banks ha&e come ,nder the pur&ie/ of %#$ HiiI )ancellation of #anking license. HiiiI %emo&al of managerial personal Hi&I Bo&ernment has the po/er to issue directions to %#$

77. "tate /hether the gi&en statements are correct or not 1. ,nder. "ection 7 of the #% act; banks may take up non-banking business in addition to banking business 2. The unorgani!ed sector of $ndian financial system is beyond the regulatory 4 go&ernmental authorities (. As per section +2 H7I of %#$ Act; scheduled bank means a bank included in second schedule +. )ompanies registered under companies act; 1-57 a. b. c. d. Ans. A 1 A T; 2 A T; ( A C; + A T 1 A C; 2 A T; ( A T; + A T 1 A T; 2 A C; ( A T; + A C All are correct

7:. 6atch the follo/ing: 1. "ecuriti!ation 2. $nno&ation (. $ntermediation +. Blobali!ation a. 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI b. 1 A HiiiI; 2 A Hi&I; ( A HiI; + A HiiI c. 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I d. one of the abo&e Ans. #

HiI Process of adapting firms and institutions to global markets HiiI Process of interlinking financial markets in different countries into a common /orld /ide pool of funds HiiiI Process of transferring assets from banks to financial markets; /here assets become freely traded Hi&I Proliferation of ne/ /ays of doing business

7=. 6atch the follo/ing 1. %*$ 2. %*A (. %*2 +. %#$ a. 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I b. 1 A HiiI; 2 A HiI; ( A Hi&I; + A HiiiI c. 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI d. one of the abo&e Ans. ) 7-. Blobali!ation has been caused by 1. 'eregulation abroad 2. Breater institutionali!ation abroad (. "uccess of euro markets +. $ntegration of markets 5. Technology and kno/-ho/ a. b. c. d. Ans. ) 1; 2; +; 5 1; 2; (; + 1; 2; (; +; 5 2; (; +; 5

HiI Derma committee to identify /eak banks HiiI et incomeFnet /orth HiiiI et incomeFtotal assets Hi&I et incomeF operating income

:>. 6atch the follo/ing "ource of Cunds 1. et income 2. $ncrease in liabilities (. 'isposal of securities and funds +. Total sources of cash reser&es a. b. c. d. Ans. A 1 A HiiiI; 2 A HiI; ( A Hi&I; + A HiiI 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI All of the abo&e

,ses HiI Premises 4 e0uipment HiiI 'ebentures; di&idends HiiiI $ncrease in assets Hi&I Cunds purchased

:1. $dentify the conse0uences of globali!ation 1. $ncrease cross-border in&estment 2. $ntegration of markets (. Gide range of alternati&es for clients +. Cree market capability 5. 6anagement comple3ities 7. eed for larger firms :. Breater commitment to o&erseas capital =. 6anagement comple3ities -. Breater risk e3posure 1>. Cree market capability a. 1; (; +; 5; 7; :; b. 1; 2; (; 7; :; =; c. one of the abo&e d. All of the abo&e Ans. A

:2. 6atch the follo/ing:1. )apital funds 2. Asset Kuality (. 2arnings +. %isk measures

HiI. %eturn %GA; 26$; 2*" %A $6 profit 6argin assets utili!ation HiiI Purchased funds to total assets gap Analysis net loans to total assets core 'eposits to net assets HiiiI %GA; A)%A% HAd<usted capital to risk; /eighted assetsI Hi&I PAs guaranteed by go&ernment; $n&estment in bandsFdebentures; gross PAs To total assets; ratio of off-balance sheet $tems to total assets

a. b. c. d. Ans. A

1 A HiiiI; 2 A Hi&I; ( A HiI; + A HiiI 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI 1 A Hi&I; 2 A HiI; ( A HiiiI; + A HiiI 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I

:(. A forfeiting transaction has typically three cost elements:1. )ommitment fee 2. %egistration fee (. 'iscount fee +. 'ocumentation fee 5. ?icensing fee a. b. c. d. Ans. # 1; 2; ( 1; (; 5 1; (; + 1; +; 5

:+. 6atch the follo/ing 1. Pledge 2. 8ypothecation (. 6ortgage +. Assignment of debt

HiI. 'efined in section 1:2 of contract act as #ailment of goods as a security for payment of a 'ebt HiiI. $t is neither in contract act nor in transfer of Property act. $t is the charge against property of the #orro/er for debt HiiiI. 'efined in section 5= of transfer of property Act; 1-=2 Hi&I. "ecurity charges o&er the ordinary course of #usiness

a. 1 A HiI; 2 A Hi&I; ( A HiiiI; + A HiiI b. 1 A Hi&I; 2 A HiiiI; ( A HiiI; + A HiI c. 1 A HiI; 2 A HiiI; ( A HiiiI; + A Hi&I d. one of the abo&e Ans. ) :5. $dentify the three methods follo/ed by banks for assessing /orking capital of a firm. 1. Traditional method 2. Turno&er method (. Assignment of debt +. )ash budget method 5. $nter-banking method

a. b. c. d. Ans. A

1; 2; + 2; (; 5 (; +; 5 2; (; +