INDIAN INSTITUTE OF BANKING

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INDIAN INSTITUTE OF BANKING

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Title: INDIAN INSTITUTE OF BANKING


1
INDIAN INSTITUTE OF BANKING
FINANCEJAIIBMODULE (C D) LEGAL ASPECTS OF
BANKING OPERATIONSSaturday19,April, 08T M C
VASUDEVAN
2
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.

3
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

4
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

5
  • 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.

6
  • 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    instead of 75 as originally enacted.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)

7
  • 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)

8
  • 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

9
  • 08..Default should have been committed by the
    debtor.
  • . The borrowers 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

10
  • 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.

11
  • 10.. Not considered as Qualified Institutional
    Buyer
  • a.. Bank
  • b.. Insurance company
  • c.. Individual Investor
  • d.. An Asset Management Company

12
  • 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

13
  • 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.

14
  • 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

15
  • 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

16
  • 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

17
  • 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

18
  • 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

19
  • 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

20
  • 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

21
  • 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

22
  • 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

23
  • 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

24
  • 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

25
  • 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

26
  • 25.. A security receipt is
  • A.. Similar to Banks Fixed Deposit receipt
  • B.. Issued by Securitisation Company
  • C.. Issued to Securitisation Company
  • D.. Issued to a Secured Creditor

27
  • 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.

28
  • 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.

29
  • 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.

30
  • 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

31
  • 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

32
  • 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.

33
  • 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

34
  • 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

35
  • 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

36
  • 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

37
  • 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

38
  • 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

39
  • 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

40
  • 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

41
  • 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

42
  • 41.. ..The security receipt evidences the
    purchasers 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.

43
  • 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.

44
  • 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.

45
  • 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.

46
  • 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

47
  • 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

48
  • 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.
  • bterms of acquisition of security interest in
    non-fund based transactions should provide for
    the relative commitments to continue with bank or
    financial institute till demand for further
    funding arises

49
  • 48..Which one is correct (Securitisation matter)
  • Security receipt is in favor of investor
  • Security receipt is issued with permission from
    Company Law Board
  • Security receipt can be transferred by the
    secured creditor
  • Security receipt is issued to the borrower who
    has failed to repay

50
  • 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

51
  • 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.

52
  • 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.

53
  • 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.

54
  • 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

55
  • 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.

56
  • 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

57
  • 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.

58
  • 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.

59
  • 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

60
  • 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

61
  • 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.

62
  • 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.

63
  • 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

64
  • 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.

65
  • 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

66
  • 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

67
  • 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

68
  • 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 Banks Corporate
    Office
  • D.. None of these

69
  • 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

70
  • 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.. 25
  • B.. 75
  • C.. 50
  • D.. No such pre condition

71
  • 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

72
  • 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

73
  • 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

74
  • 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

75
  • 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.

76
  • 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.

77
  • 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.

78
  • 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.

79
  • 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

80
  • 79..Against the DRTs 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

81
  • 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

82
  • 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

83
  • 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

84
  • 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

85
  • 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

86
  • 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

87
  • 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.

88
  • 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.

89
  • 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.

90
  • 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.

91
  • 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

92
  • 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.

93
  • 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

94
  • 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.

95
  • 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

96
  • 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. Banks application
    to be approved by the banks Chairman or in his
    absence by the Managing Director or any other
    officer of equal rank.

97
  • 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

98
  • 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
99
  • 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

100
  • 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

101
  • 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 .

102
  • 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.

103
  • 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

104
  • 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.

105
  • 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

106
  • 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

107
  • 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

108
  • 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

109
  • 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.

110
  • 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.

111
  • 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.

112
  • 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.

113
  • 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

114
  • 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.

115
  • 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

116
  • 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

117
  • 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.

118
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

119
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

120
  • 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.

121
  • 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

122
  • 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

123
  • 122..Which one is not correct (Consumer
    Protection matters).
  • 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.
  • 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.
  • 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
  • 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.

124
  • 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

125
  • 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

126
  • 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

127
  • 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

128
  • 127.. . Identify which is not a valid contract.
  • a.. Proposal and acceptance
  • b.. Consideration
  • c.. Free consent
  • d.. Agreement under force

129
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

130
129..Under Pledge, the possession is with the
  • A.. Borrower
  • B.. Creditor
  • C.. Owner
  • D.. Surety

131
130..Consideration not required for
  • A.. An agency
  • B.. Safe Custody Article
  • C.. Mortgage
  • D.. Safe Deposit locker

132
131..The right of re-sale is available to
  • A.. An unpaid seller
  • B.. The user
  • C.. The Debtor
  • D.. All

133
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

134
  • 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

135
  • 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.

136
  • 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

137
  • 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.

138
  • 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

139
  • 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.

140
  • 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

141
  • 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.
  • Bank will get protection
  • Bank cannot recover the dues based on the
    documents
  • Affixing of Common Seal is compulsory in such
    cases.
  • Affixing of Common Seal is not compulsory unless
    it is specifically stated in the Articles of
    Association

142
  • 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

143
  • 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.

144
  • 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.

145
  • 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

146
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