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I BCOM[2018-2021]
SEMESTER II
SKILL BASED SUBJECT:BANKING LAW AND PRACTICE -202D
Multiple Choice Questions.
1. The primary relationship between a banker and customer starts from the time
A. when customer visits that bank
B. when customer opens account
C. when customer visits that bank to made queries
D. All of the above
ANSWER: B
3. Which one of the following is the most important relationship between banker and customer
A. Debtor and Creditor
B. Bailee and Bailor
C. Agency and Principal
D. Trustee and Beneficiary
ANSWER: A
4. When customer's account overdrawn or when customer has taken loan from banker, then the
customer
A. Creditor
B. Agent
C. Debtor
D. Bailor
ANSWER: C
5. When banker received deposits from the customer, then the banker becomes -------------- of the
customer
A. Debtor
B. Creditor
C. Bailee
D. Trustee
ANSWER: A
6. ------------- accepts the bailment of certain things on the condition that the things bailed will not
utilised
A. Bailor
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B. Trustee
C. Bailee
D. Beneficiary
ANSWER: C
7. It is a ----------------- obligation of a banker to honour the cheques of the customer drawn against
current account
A. Mutual
B. Statutory
C. Unstatutory
D. All of the above
ANSWER: B
8. Which bank have given the instructions to the commercial banks regarding the immediate credit of
outstation cheques?
A. Reserve Bank of India
B. Central Bank
C. World Bank
D. All of the above
ANSWER: A
10. Special damages refers to damages payable by a banker to his customer for the actual -------------
loss suffered by customer
A. Financial
B. Special
C. Unpecuniary
D. Unfinancial
ANSWER: A
11. ---------- is the right of a person to retain the property of another person in his possession untill the
debt from that owner of that property is repaid
A. Lien
B. Retainment
C. Retrenchment
D. Libel
ANSWER: A
12. The bank can consider ------------------ lien as their protection against loss on loan or overdraft
which was given to its customers
A. Special
B. Particular
C. General
D. Lending
ANSWER: A
13. The idea behind the bankers right to set-off is to enable the banker to reduce the -------------- amount
due to him from a customer
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A. Gross
B. Net
C. Partial
D. None of the above
ANSWER: B
14. A ---------------- refers to the right of banker to adjust the credit and debit balance of customers
without obtaining any letter of set-off or without giving any notice to the customers
A. Automatic set-off
B. Proper set-off
C. Legal set-off
D. Special set-off
ANSWER: A
15. The right of set-off customers account can be exercised only by a A. Creditors
A. Creditors
B. Debtors
C. .Banker
D. Customer
ANSWER: C
16. Usually incidental charges are levied on which type of account holders
A. Savings account
B. . Fixed deposit account
C. Current Account
D. Recurring deposit account
ANSWER: C
17. The -------------- rule is followed in appropriation of accounts if neither debtor nor creditors does not
makes any specific appropriation
A. Pagets
B. Kinlay
C. Sheldon
D. Claytons
ANSWER: D
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22. Which banks which accept deposits from the public and lend them mainly to commerce for short
periods?
A. Commercial Bank
B. . Industrial Bank
C. Agricultural Bank
D. Central Bank
ANSWER: A
28. In the which type of deposit, the high rate of interest is provided by the Bank?
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A. Current Account
B. Recurring Deposit Account
C. Fixed Deposit Account
D. Savings Account
ANSWER: C
29. Loan is a financial arrangement under which an advance is granted by a bank to a borrower on a
separate account called
A. Cash credit account
B. . Overdraft account
C. Loan account
D. Discount account
ANSWER: C
30. The rate of interest charged for the loan by the banker compared to overdraft and cash credit is
generally
A. High
B. Low
C. Same
D. Based on the amount
ANSWER: B
31. Which type of account holder has the permission to overdraw the amount from his/her account
A. Savings account
B. Current account
C. Fixed deposit account
D. Recurring deposit account
ANSWER: B
32. Usually in Overdraft, to protect the interest of the banker, they levy ------------------- Discounting of
Bills of Exchange is an arrangement under which an banks takes a bill of exchange maturing with a
short period of
A. 20 days or 40 days
B. 50 days or 100 days
C. 60 days or 90 days
D. 35 days or 75 days
ANSWER: C
33. The main aim of a banker for performing the subsidiary services is to earn a ------------ of the
customers
A. Money
B. Documents
C. Valuables
D. Goodwill
ANSWER: D
34. The services rendered by a banker as an agent of his customers are called
A. Principal services
B. Agency services
C. General utility services
D. Social services
ANSWER: B
35. The written instructions given by the customers to banker to perform the services like collection and
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36. A -------------- is a person who is entrusted with some property by the settler or the author of the
trust for the benefit of another person called beneficiary
A. Attorney
B. Executor
C. . Administrator
D. Trustee
ANSWER: D
38. Services rendered by a banker not only to his customers, but also to the general public are called as
A. Principal services
B. Agency services
C. General utility services
D. Social services
ANSWER: C
39. In Negotiable Instruments Act 1881, which section defines promissory note?
A. Section 1
B. Section s
C. Section 3
D. Section 4
ANSWER: D
40. . ------------ is a system under which an individual bank carries on banking business with a network
of branches spread all over the country.
A. Mixed Banking
B. Branch Banking
C. Unit Banking
D. Corresponding Banking
ANSWER: B
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C. Preemptive cheque
D. Ante dated cheque
ANSWER: D
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51. Name the person to whom the amount of the cheque is payable?
A. Drawer
B. Payee
C. Drawee
D. Acceptor
ANSWER: C
55. ------ is an endorsement in which the endorser merely signs his name on the book of the instrument
without mentioning the name of the person to whom the instrument is endorsed
A. Blank Endorsement
B. Restrictive Endorsement
C. Qualified Endorsement
D. San Frais Endorsement
ANSWER: A
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ANSWER: C
62. In which system computers are based on the centralized processing concept?
A. Multi-user computer networking
B. Stand alone computer networking
C. Processing computer system
D. Frame computer system
ANSWER: A
65. ATMs are primarily used for performing the __________ functions
A. Infrastructure
B. Computer based
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C. Banking
D. Hospitalized
ANSWER: C
68. . ________ is a technology that allows you to access your bank account from a mobile device
A. Home Banking
B. Mobile Banking
C. Internet Banking
D. Television Banking
ANSWER: B
69. . ____ is the result of combining technology and traditional bank services through websites that
customers use to access their bank accounts
A. Home Banking
B. Mobile Banking
C. Internet Banking
D. Television Banking
ANSWER: C
70. A ______ is the market for short term bills which are generally of 3 months duration
A. Bill market
B. Money market
C. Credit market
D. Open market
ANSWER: A
72. If the endorser signs his name only, the endorsement is said to be
A. Blank Endorsement
B. Conditional Endorsement
C. Restricted Endorsement
D. Full Endorsement
ANSWER: D
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73. The paying banker who makes cash payment of a cross cheque at the counter shall be liable for the
loss of
A. Drawer of the cheque
B. True owner of the cheque
C. Collecting banker
D. the First endorser
ANSWER: B
76. Drawing of two parallel transverse lines on the face of the cheque is called
A. Special crossing
B. General Crossing
C. Upper Crossing
D. Lower Crossing
ANSWER: B
77. Addition of the name of a banker across the face of a cheque is called as
A. General crossing
B. Special crossing
C. Upper Crossing
D. Lower Crossing
ANSWER: B
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84. In which year, Electronic Fund Transfer (EFT) was launched in India?
A. 1994
B. 1995
C. 1999
D. 2000
ANSWER: B
85. Maximum limit on the amount of individual transactions permitted for fund transfer per transaction
is
A. Rs. 1 Lakh
B. Rs. 2 Lakhs
C. Rs. 5 Lakhs
D. Rs. 10 Lakhs
ANSWER: C
87. . --------- allows worldwide financial institutions to exchange standardized messages relating to
international financial transaction
A. NEFT
B. SWIFT
C. ECS
D. EPS
ANSWER: B
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88. To done banking through WAP (Wireless Application Protocol) enabled mobile phone, customer
should get which type of connection?
A. Telephone
B. Internet
C. Television
D. Electrical
ANSWER: B
89. When the banking operations are carried out through electronic means, it take the form of
A. E-banking
B. M-banking
C. T-Banking
D. None of the above
ANSWER: A
90. . --------- credit refers to a series of electronic payment instructions that are generated to replace
proper instruments
A. Electronic Payment System
B. Electronic Clearing Service
C. Electronic Data Interchange
D. None of the above
ANSWER: B
91. . ----- has been introduced for the purpose of networking of banks
A. Generic Architecture
B. Core Banking
C. Centralized Fund Management Systems
D. INFINET
ANSWER: A
92. To facilitate the growth in government securities market and for smoother trading, RBI introduced a
---------- which provides for screen based trading of government securities
A. Security Settlement System
B. Negotiated Dealing System
C. . Security Marketing System
D. Security Safety System
ANSWER: B
93. Banking transaction that takes placed in a virtual ambience on the website of a banking company is
termed as
A. Internet Banking
B. Telephone Banking
C. Mobile Banking
D. Modern Banking
ANSWER: A
94. All banks having operations in India and intending to offer Internet Banking services to the public
must obtain an approval for the same from
A. Government of India
B. Central Bank
C. Reserve Bank of India
D. All of the above
ANSWER: C
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95. Telephone Banking has found a high level of acceptability especially among ----------- level of
people
A. Professional
B. Salaried
C. Retired
D. Business
ANSWER: A
96. --------- are workstations that act as a nucleaus of the functioning of the telephone banking system
operated through fully computer-integrated telephone system
A. Telephone centre
B. Enquiry centre
C. Computer centre
D. Call centre
ANSWER: D
97. The ATM pin is ---------- digit code number used for authenticiating and authroizing the use of the
ATM facility by a customer
A. Four
B. Five
C. Three
D. Six
ANSWER: A
98. ------- is a technique under which effective customer authorization takes place on the basis of the
biological attributes of a bonafide person
A. Manometrics
B. Bonametrics
C. Miometrics
D. Biometrics
ANSWER: D
100. . ------ ATMs are a boost to smaller banks who cannot afford opening the ATMs in many places as
possible
A. Lobby
B. Off-site
C. International
D. Shared
ANSWER: D
101. In which year and date, Reserve Bank of India was established?
A. May 1, 1935
B. April 1, 1935
C. . October 1, 1935
D. December 1, 1935
ANSWER: B
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102. A convenient way of making a purchase or paying for a service without holding cash is called as
A. Electronic Payment System
B. Electronic Clearing Service
C. National Electronic Fund Transfer
D. Electronic Fund Transfer
ANSWER: A
104. An electronic payment device that involves the use of networking services where by the
e-customer issues digital cheques to e-merchant malls to settle transactions carried over the internet
A. Electronic cash
B. e-purse
C. Digital cheques
D. Electronic card
ANSWER: C
106. A wallet-sized smart card, embedded with programmable chip which storeds e-money to be used
in a virtual trading environment for making payment is called
A. Electronic card
B. Digital card
C. Electronic purse
D. Electronic cash
ANSWER: C
107. Use of personal computers at home for conducting their banking operation with their banks is
called
A. Mobile Banking
B. Anywhere Banking
C. Internet Banking
D. Home Banking
ANSWER: D
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B. China
C. USA
D. UK
ANSWER: C
110. Which of the first subsidiary bank of State Bank of India to do whole computerization of all its
branches?
A. State Bank of Patiala
B. State Bank of Hyderabad
C. State Bank of Saurashtra
D. State Bank of Travancore
ANSWER: A
111. In which year, MICR system for cheque was implemented in India?
A. 1987
B. 1996
C. 1990
D. 1993
ANSWER: A
114. Which was the first Joint Stock Bank established by an Indian establishment?
A. Bank of Bombay
B. Oudh Commercial Bank
C. Bank of Hindustan
D. Hindustan Commercial Bank
ANSWER: C
115. Which is the first change in banking sector of India after independence?
A. Nationalization of Banks
B. Social control on Banks
C. Establishment of SBI
D. Establishment of RBI
ANSWER: B
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117. What are the major change in banking sector of India after nationalization of Banks?
A. Expansion of bank branches
B. Cut throat competition in Banking sector
C. Introduction of Banking Regulation Act
D. Establishment of RBI
ANSWER: A
119. The reasonable period allowed in India for the presentation of a cheque is
A. 1 year
B. 3 months
C. 9 months
D. depending upon custom
ANSWER: B
122. The electronic funds transfer using a two-way communications system is referred to as a
A. Pay or cheque
B. Wire transfer
C. Depository transfer cheque
D. Payable through draft
ANSWER: B
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130. An institution whose principle business is accepting deposits and forwarding loans is called
A. Mutual Fund Business
B. Company
C. . Bank
D. Ombudsman
ANSWER: C
131. Which of the following term do not represent any part of Banking technology?
A. NEFT
B. RTGS
C. ITC
D. EPS
ANSWER: C
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B. . Accepting deposits
C. Providing lockers
D. . Selling real estate properties
ANSWER: D
133. The MICR cheque details given. Pick the wrong statement
A. MICR means Magnetic Ink Character
B. MICR introduced to increase the standards of the cheques
C. MICR issued by bank
D. In the MICR portion, the customer allowed to write in it
ANSWER: D
134. Which electronic fund transfer system run on the basis of "Deferred Net Settlement"
A. NEFT
B. RTGS
C. SMS
D. BIFSC
ANSWER: A
135. In both cases of RTGS and NEFT, the service charges are decided by
A. Customer
B. IMF
C. . Banker
D. Transferee
ANSWER: C
137. Which of the following is not the name of the bank functioning in India?
A. Central Bank of India
B. UCO Bank
C. Aegon Religare
D. Dena Bank
ANSWER: C
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144. What are the major change in banking sector of India after nationalization of Banks?
A. Expansion of bank branches
B. Cut throat competition in Banking sector
C. Introduction of Banking Regulation Act
D. Establishment of RBI
ANSWER: A
147. A card is used to obtain cash, goods or services automatically debiting the payments to the card
holders bank account instantly upto the credit balance which exists in the customers bank account
A. Credit
B. Gold
C. Debit
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D. Business
ANSWER: C
148. ----------are workstations that act as a nucleaus of the functioning of the telephone banking system
operated through fully computer-integrated telephone system
A. Telephone centre
B. Enquiry centre
C. Computer centre
D. Call centre
ANSWER: D
149. -------is the most favoured technology for secure Internet banking service
A. Public Key Instructions
B. Public Key Information
C. Public Key Infrastructure
D. People Key Infrastructure
ANSWER: C
150. When the banking operations are carried out through electronic means, it take the form of
A. E-banking
B. M-banking
C. T-Banking
D. None of the above
ANSWER: A
Staff Name
Kavitha P .
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