Book Caiib - 1 Abm

CAIIB MADE SIMPLE (
FOR BUSY BANKERS)
CHAPARAN
GURUKUL (Your Career is your life / your dream
is your life, We make it)

\
PRESENTS
TEST YOURSELF : CAIIB PAPER -1
ADVANCED BANK MANAGEMENT ( Only 10

hours book Before your Examination )
COMPILED BY
Smt. Renu Kumari
(Ex-Chief Manager of Bank of Baroda )
Preface
Dear Colleagues,
“The capacity to learn is a gift; the ability to learn is a skill; the willingness to learn is a
choice” “Learn as if you were to live forever” – Mahatma Gandhi
Learning is a process that never stops, and nothing illustrates this better than the above quote from Mahatma Gandhi.
It is with a sense of great delight that I am presenting this e-booklet on Test Yourself – CAIIB-1/ ADVANCED
BANK MANAGEMENT, a small e-book, collections of Recalled Questions, Most Important Questions, Model Test
Papers Based on Recalled Questions so that your last minutes Practice help you to get good Marks with minimum
efforts.
Life is simple for none. Life gives challenges and opportunities to everyone. It is upto each and every individual, how
he utilizes each opportunity and how he faces the challenges in life. It is upto you how you want to mould your life.
Either make your life a daring adventure and do something different else lead a simple life with nothing at all. A
promotion in the organization facilitates an employee to move up in the hierarchical levels for shouldering higher
responsibilities. This requires an employee to have skillsets matching the future role requirements and an overall
understanding of the entire gamut of the Bank’s policies, systems and processes. More than 70% bankers are below
40 years of age and it is right time to well equip to face the challenges in future banking.
Team Champaran Gurukul is coming shortly with following books which are very useful for JAIIB,CAIIB & other Banking
Knowledge based examinations and their details are as under :
1. JAIIB-1 : PPB – Five Quick Books in very simple words, easy to understand & in the name of Teach Yourself JAIIB
1/PPB - Model A, B, C, D, E & Mock-Test Papers. Each Quick book contains both subjective Materials and MCQs
based on Previous years recalled Questions with sufficient number of Case Studies. Mock-Test Papers will consists
of minimum five similar Mock -Test papers of JAIIB-1 original examination, based on Previous years recalled
questions with Latest Changes.
2. JAIIB-2 : AFB – Four Quick Books in very simple words, easy to understand & in the name of Teach Yourself JAIIB
2/AFB - Model A, B, C, D & Mock-Test Papers. Each Quick book contains both subjective Materials and MCQs
based on Previous years recalled Questions with sufficient number of Case Studies. Mock-Test Papers will
consists of minimum five similar Mock -Test papers of JAIIB-2/AFB original examination, based on Previous years
recalled questions with Latest Changes.
3. JAIIB-3 : LRAB – Four Quick Books in very simple words, easy to understand & in the name of Teach Yourself JAIIB
3/LRAB - Model A, B, C, D & Mock-Test Papers. Each Quick book contains both subjective Materials and MCQs
based on Previous years recalled Questions with sufficient number of Case Studies. Mock-Test Papers will consists
of minimum five similar Mock -Test papers of JAIIB-3/LRAB original examination, based on Previous years recalled
questions with Latest Changes.
4. CAIIB-1,2 & Optional Papers(All)– Each Paper/Course having Quick Books in very simple words, easy to understand
& in the name of Teach Yourself CAIIB-1,2 & Optional paers - Model A, B, C, D & Mock-Test Papers. Each Quick
book contains both subjective Materials and MCQs based on Previous years recalled Questions with sufficient
number of Case Studies. Mock-Test Papers will consists of minimum five similar Mock -Test papers of CAIIB
original examination, based on Previous years recalled questions with Latest Changes.
Team Champaran Gurukul are team of working & retired executives of Nationalised Banks including SBI, Canara
Bank, BOB, PNB, UBI,BOI who has experience more than three decades with excellence academic & professional
experience. All above books which are going compile shortly will give you Guaranteed to success in Minimum Time
say each Quick Book/Module Maximum 4-6 hours with requirements for your exams.
We solicit your views on the content and quality of the topics for further improvement.
We also extend my best wishes to all the aspirants and am sure, they will make the best use of the booklet and
succeed in their endeavours.
With Best Wishes,
Smt. Renu Kumari (Ex-Chief Manager of Bank of Baroda)
Champaran Gurukul
Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 1 | P a g e

AbouttheAuthor
Smt. Renu Kumari, Ex-Chief Manager of Bank of Baroda, who took VRS in June 2021, Specially to reduce the
knowledge Gap among Bankers and Young Bankers in Particular, started to work in mission mode to reduce
knowledge gap among bankers with objective to provide educational support free of cost to all in general and
bankers in particular with objective to empower Banker colleagues specially young banker who join the bank in last
more than one decade for their better productivity, Sense of satisfaction, Customer delight with ultimate increase of
quality banking business for their organisations. She is having work experience of 22 years and Four months (
More than 13 years as Branch in charge at different parts of country including Mumbai & Goa),worked at various
capacity in all facets of Banking.
Mrs. Renu Kumari is M.Sc. (Bio-Chemistry), CAIIB, MBA, MBA (Finance),Diploma (IIBF) in Rural Banking,
Certificate (IIBF) in Trade Finance, Certificate in Anti-Money Laundering / Know Your Customer, Certificate
Examination in SME Finance for Bankers, Certificate Examination in Customer Service & Banking Codes and
Standards & Certificate Examination in Microfinance.
Seven Steps to Success : DREAM or DESIRE...strongly, DETERMINE... firmly, DISCRIMINATE...wisely,

DISCUSS...humbly, DEVOTE...fully, DEDICATE... completely, DO IT...whole-heartedly.
Team Champaran Gurukul are team of working & retired executives of Nationalised Banks including Bank of
Baroda,SBI, Canara Bank, PNB, UBI, BOI who has experience more than three decades with excellence
academic & professional experience.
Our Main aim Objective is to reduce Knowledge Gap among Bankers, particularly young Bankers and to
get success in JAIIB/CAIIB/IIBF/ PROMOTION TEST in very first attempt without cost and for this very
purpose, we are running three Telegram group namely Bankers Diksha Group where, we will provide every
things useful for Banking Sectors and your Personal benefits including JAIIB, CAIIB, IIBF, Promotion test etc.
Bankers Diksha-JAIIB & Bankers Diksha- CAIIB. Please go through File Section of Telegram group, you will get
all your desired study materials and MCQs.
Please Share among your Friends to join our Telegram Group
1.Bankers Diksha - Banking Group using group link : https://t.me/joinchat/V3-DqWBa4HTPvzkD
2.Bankers Diksha - JAIIB Group using group link : https://t.me/joinchat/-PaUywJbr-c1Y2E1
3.Bankers Diksha - CAIIB Group using group link : https://t.me/joinchat/21RLacoOuaVmOGVl

INDEX
SI. No
TABLE OF CONTENTS Page No.
1. 2.
SYLLABUS : CAIIB PAPER -1 ( ABM ) 4-5 CAIIB PAPER -1(ABM) : MOST IMPORTANT MEMORY BASED
3. 4.
RECALLED QUESTIONS 6-10 IMPORTANT FORMULA 11-12 LATEST RECALLED & EXPECTED
5.
QUESTIONS 13-27 MODULE ( A,B,C &D ) BASED IMPORTANT TERMINOLOGY & MCQs 28-85
6. 7.
MEMORY BASED PREVIOUS YEARS QUESTIONS OF CAIIB PAPER -1 : ABM 85-111 MODEL TEST
PAPER 112-116
Disclaimer: This is purely a voluntary effort for dissemination of knowledge and enabling people to pass JAIIB
exams in very first attempt test. Best efforts have been put to provide the accurate and updated information.
However, the users are requested to refer relevant Manuals, Circulars and policies of our Bank/RBI for further
clarity.
1. SYLLABUS : CAIIB COMPULSORY PAPER - I: ADVANCED BANK MANAGEMENT
MODULE - A: Economic Analysis

The fundamentals of Economics: Scarcity and Efficiency - Microeconomics & Macroeconomics in brief - Types of
economies - Market, Command and Mixed Economies - Macroeconomics: Business cycles - Money and banking
- Unemployment & inflation - Interestrate determination and various types of interest rates. Indian Economy (a)
Overview of the Indian economy including recent reforms (b) Interaction between fiscal, monetary & exchange
rate policies in India - Financial Markets (i) Money Market (ii) Capital Market (iii) Foreign Exchange Market -
globalization and its impact - Challenges ahead - Banking & Finance - current issues
MODULE - B: Business Mathematics

Concept of time Value of Money - Net Present Value - Discounted Cash Flow - Sampling methods - presentation
of data - analysis and interpretation of sample data - hypothesis testing
- Time series analysis - mean/ standard deviation - co-relation - Regression - covariance and volatility - Probability
distribution - Confidence interval analysis - estimating parameters of distribution - Bond valuation - duration -
modified duration.
Linear programming - decision making-simulation - Statistical analysis using spreadsheets. Features of Spread sheet
- Macros, pivot table, statistical and mathematical formulae.
MODULE - C: HRM in banks

Fundamentals of HRM, development of HRM in India, Relationship between HRM and HRD, Structure and functions
of HRD, Role of HR professional, Human implications of organizations;training and development, attitude and soft
skills development, role and impact of training, career path planning and counseling, employee behavior, theories of
motivation and their practical implications, role concepts and analysis, self-development., Performance Management
and appraisal systems; Reward/ punishment and compensation systems., HRM and Information Technology,
information and data management, knowledge management.
MODULE - D: Credit Management

Principles of Credit Management Credit Appraisal Analyzing Financial Performance - Relationship between items in
Balance Sheet and Profit and Loss Account. Trend Analysis, Comparative Statement - Common Size Statement,
Preparation of projected Financial Statements. - Ratio analysis - Interpretation and analysis of different Ratios,
Limitation of the use of ratios. Statement of Sources and Applications of Funds.
Structuring a Credit Proposal - Working Capital Concept and Management Appraisal techniques for different
constituents - trade cycle - credit rating - Technical and economic feasibility studies - Credit Rating - Rating
Methodology - Objectives and benefits of rating - Term Lending - Debt Service Coverage Ratio - Cash Flow Analysis -
Cash Budget - Bill Finance - Deferred Payment Guarantee - Credit Scoring - Credit Delivery System - Documentation
- Post sanction supervision, Control and monitoring of credit - Consortium finance, Multiple banking, Syndication of
loans. Infrastructure financing.
Dealing with credit defaults, Stressed assets, Corporate Debt restructuring, SARFAESI, NPAs,recovery options, write
off. Disclosure of the list of defaulters: objectives and procedure. Appraisal methodology for different type of clients/
products.
PATTERN OF EXAMINATION
Each Question Paper will contain approximately 100 objective type multiple choice questions, carrying 100 marks
including questions based on case study / case lets. The Institute may, however, vary the number of questions to be
asked for a subject. There will NOT be negative marking for wrong answers.
TYPES OF QUESTIONS: 100 Objective Type Multiple Choice Questions - carrying 100 marks – 120 minutes and
question will be based on Knowledge Testing, Conceptual Grasp, Analytical / Logical Exposition, Problem Solving &
Case Analysis.
Type of Questions – Basically four types of Multiple-Choice Questions asked in Exam of Which Type – A:
Concept based Straight Questions (40-50 QUES - 0.5 MARKS EACH); Type – B: Problems & Solutions
(15-20 QUES - 1.0 MARKS EACH); Type – C: Applied theory-based Questions (15-20 QUES - 2.0 MARKS
EACH); Type – D: Case Study & Case-lets based Questions (10-15 QUES - 2.0 MARKS EACH)

QUESTIONS MODELS: TYPES OF QUESTIONS
Type – A: MULTIPLE CHOICE – QUESTIONS & ANSWERS

The Best Method for assessing working capital limit used by the bank for seasonal Industries is: 1. Operating Cycle
Method, 2. Projected Networking Method, 3. Projected Turn over Method & 4. Cash Budget Method Type – B:
MULTIPLE CHOICE – PROBLEMS & SOLUTIONS
Mr. Ram Kumar is having overdraft account with Canara bank up to Rs.100,000. The present Debit Balance in the
account was Rs. 80550.00. The bank has received attachment order from Income tax deptt. For Rs. 16,200.00. What
can the bank do in this situation?
- Unless the bank is a debtor, there can be no attachment and an unutilized overdraft account does not render the
bank a debtor (but creditor) & hence cannot attach.
Type – C: MULTIPLE CHOICE – APPLIED THEORY – QUES. & ANS
Financial Institution wish to have the money lent by them repaid in time. Secured advances sanctioned by banks
possess what kind of security ?
- Secured Advances have impersonal security i.e. Tangible Security
Type –D : MULTIPLE CHOICE – CASE STUDIES & CASE LETS (PROBLEMS & SOLUTIONS)
Economic development of a country to a large extent depends upon Agri. & Industrial sectors. Development of Agri.
Depends upon irrigation facilities while industrial development on availability of power, good transport and fast
communication facilities. All these are called infrastructure. Read the caselet & explain which industries constitute
infrastructure ?
a. Energy, Transport & Communication
b. Irrigation, construction of bridges & dams over Rivers & stable govt. at Centre.
c. Availability of Funds for PMEGP, SJSRY & Indira Awas Yojana
2. MOST IMPORTANT MEMORY BASED RECALLED : CAIIB1- ABM
1. CRR & SLR Calculation Given Big Table - 5 Marks = 5M

2. Narrow Money, Broad Money (M1, M2, M3 & M4) - 5 M
3. Macro Economics - 1M
4. Types of Economics ( Market, Socialistic & Mixed) - 1 M
5. Price & Demand relation - 1M
6. Cost pull Inflation - 1 M
7. WPI - 1M
8. Characteristics of Business Cycle - 1M
9. CSO (3 Segments) - 1M
10. Real GDP - 1M
11. PV & FV - 2 M
12. PV of perpetuity 1 M
13. Sampling Numerical - 3M
14. Y=a+bx ( Given ∑X, ∑Y values find a, b, x values - 5M
15. Variance, Standard deviation, Mean related que - 5 M
16. YTM - 1 M
17. 3 Parts of job analysis ( Job Description, Job Specification & Job Evaluation) - 1M
18. Theories of Nadler ( Mechanistic, Cognitive, Organistic) - 1M
19. Attitude - 1 M
20. External locus of control - 1 M
21. Abraham Maslow 5 Needs order - 1M
22. HRIS Abbreviation - 1M
23. Case study related new project & Training Case study - 5 M
24. One more Case Study HRM - 5 M
25. Consortium, Multiple Lending - 1M
26. Provision for Standard Assets in MSE -0.25% - 1 M
27. Unsatisfactory/ Doubtful features of Borrower - 1 M
28. As per CIBIL willful defaulters 25L & Suit files 1 Cr - 1M
29. Quick ratio, Acid test ratio,Tandom Comm I & II Method Bank finance - 5M
30. ICR, DER, TOL/TNW, Creditor Turnover ratio- 5 M
31. Calculate the lc with eoq method
32. laissez fair economy is market economy
33. ends refer to wants
34. market equilibrium price quqntity demanded is quantity supplied
35. m3 = m1+ time dep with banking system
36. cpl is more relevant for consumers
37. Keynes theoy liquidity preferance theory of interest
38. Market economy is also known as...? Ans. capitalistic economy
39. depression phase is followed by recovery phase
40. higher growth in service sector
41. Questions based on mean, variance and standard deviation of 5
marks 42. interest is awarded for using capital and taking risk
43. Working capital gap
44. TOL and TNW calculative problem
45. simple question on calculating amount for compound intrest
46. queston on fvof bop annuity
47. standard deviation of sampling is called standard error
48. a portion of element choosen is called sample
49. second degree equation isrs in timseries analysis
50. You cannot see others dark blind etc
51. Numeric on capital
52. Nature and wealth management book s author
53. Reason for shift in demand curve,market economy,laissez faire economy 54. Govt
Measures to control inflation,5 marks pblms to find narrow monew,broad mny etc 55. CPI
issued by whom?
56. Full form of cso
57. Base rate,crr,slr,GDP
58. Calculation of pv,fv ,annuity
59. 5 mrks pblm frm correlatin, regression, linear programming
60. Many questions frm hrm like emotional intlgnce,career anchors,knowles theorems,type A nd type B
persons,hersbergs theory, etc
61. turnovr method of assesmnt, 5 marks questn frm LC relating to its lead time usance period etc,current
assets,working capital etc...
62. Standard Error, Mean, coefficient approx 10 questions..
63. What is Broad Money
64. What is Narrow Money , M3?
65. Stressed Assets ?
66. HR related 2 paragragh
67. CPI related??
68. LM curve : theory??
69. Deffered Payment Guarantee??
70. Business cycle?
71. Sampling : systemic/ stratified?
72. Laissez faire economy??
73. Depression is followed by....??
74. Group Formation ka order??
75. Calculate ---
76. working capital gap
77. Gross working capital
78. Fiscal deficit
79. Expenditure Non expenditure.
80. 5ques reg (m1 - m4)..Gwc 5 ques...Hrm 5 ques..standard deviation 5 ques and in primary gross & fiscal deficit 5
ques
81. one que was on Lc..if transit period comes down
82. One que on wc gap
83. Gross working capital..
84. Hrm..zohari window..one que was there
85. Effect of shift in demand due to????
86. Gdp deflator
87. Cso 3 segments of industrial sector
88. Fixed period between the stages of business cycle .ans- not any fixed period
89. Wht is not stressed asset
90. Narrow money?
91. Drt -conditions
92. ...is it can be only filed when it is fully secured
93. Or if loan amt is more then 10 lac
94. ends define...answer is wants
95. 2 wpi announced ....monthly
96. 3 cpi is released by ...labour bureau
97. Gdp announced ......
100. A question on herzberg's two factor on motivation-hygiene theory
101. schien's three dimension movements viz vertical, circumferential and radial
102. johari window concept: closed- known to self but not known to others
103. WPI
104. calculation of RD amount
105. numeicals on sampling
106. correlation regression
107. bonds
108. a set of quest on M1,M2,M3,M4
109. 2 paragraphs based on risk mgt, and hrm
110. and 10 ques based on them
111. numericals on union budget
112. statified n clustr sampling
113. numericals on point and interval estimation.
114. Major portion of today's exam
115. Case study on Him
116. Numerical on standard deviation, variance ,mean
117. Fiscal deficit numerical
118. Numerical on fv
119. Group formation
120. Numerical on share
121. Inflation CPI
122. Eri motivation theory
123. Case study on Lc
124. Narrow money
125. LM curve
126. Standard deviation
127. Covariance
128. Mean
129. CR ratio
130. 5 questions fr calculation of M1 M2 M3 M4
131. About ITES
132. Table based question on money supply m1 M2 M3
133. 2)Working cap limit …first method, 2nd metbod.
134. 3)Table based question on LC
135. 4)Johari window
136. 5)5 Question on Fv Pv and of formua pv=fv/(1+r)2
137. 6)corrilation regression table based.
138. 7)type I and type ll person 3 Questions
139. 8)demand and supply equilibrium 1 Question
140. 9) broad money and narrow money 2 Que.
141. 10) 40% Hrm question.
142. End refer to ---- Wants.
143. Cash Budget method is applied bet for appraisal of ......... business (seaspnal)
144. An Enqury into the Nature and causes of the wealthe off nations written by ....... Adam Smith. 145.
Narrow money M1
146. Broad Money M3
147. Micro enterised in manufacturing sector under MSMED 2006 cost of machines ect upto 25 Cr.
148. Phase of business follow Depression ---- Recovery.
149. Find the FV.
150. 10 Find Current ratio.
151. 11. Case study on S.D, Variance etc.12. case of Export finance.
152. 13. case of training need in HRM.
153. 14. 3-4 on sampaling, Linear programming .
154. 15. case study on Tondon 1 & 2.
RECALLED QUESTIONS DEC 2018 : CAIIB1- ABM
01. Direct agriculture SME 0.25% provisioning

02. If rate of interest is more than coupon rate bond will sell on higher price or lower price than face value? Lower
Price
03. Full form 'BARS' - Behaviourally Anchored Rating Scale
04. Maslow's theory of motivation
05. GDP, GNP and GDP factor cost case study 5 marks
06. 360-degree feedback
07. Halo Effect
08. Time series - Case study consisting of 5 numericals involving coding principle and residual method - 5 marks
09. Vroom expectancy MCQs
10. Motivation theories

11. Feedback methods
12. Performance appraisal methods
13. Theory questions on assets
14. Estimation - case study 5 marks
15. Balance sheet - case study 5 marks
16. Money supply 2 year case study 5 mark
17. Job Enrichment
18. DCSR
19. Effect of money supply on ROI and Inflation
20. Coefficient of Correlation - Case study 5 marks
21. Case study on M1, M2, M3
22. GDP deflator
23. Appraisal of individual merits and demerits
24. Sampling method
25. Hygiene and motivational factors
26. GDP(Y)
27. Simplex method
28. Training steps
29. IS curve
30. Payback period
------------
01. Performance Appraisal - Case study (5 marks)
02. Break even analysis and margin of safety - 5 Marks
03. GDP calculation - 5 marks
04. M1 M2 M3 M4 calculation - 5 Marks
05. Insolvency, secured creditors, etc - Case study (5 Marks)
06. SARFAESI Act -3 questions
07. Time value of money annuity ect - Mathematical problem - 4 questions
08. Bond value - 3 questions
09. HRM (Training) - 2 case studies
10. What does job enrichment means?
11. Finite population multiplier is? √(N - n )/(N-1)
12. Inventory ratio
13. Simplex method - practical questions 5
14. Velocity of money direct formula
15. Simplex method - practical questions 5 marks
16. Linear programming - practical questions 5 marks
17. SARFAESI Act - 3 marks
18. Sampling method - 3-4 questions
19. Training and learning - 5 marks
20. Micro economics
21. Narrow money
22. Current ratio
23. Debt asset ratio
24. KRA of employee
25. How will you determine DP of a firm from the given abs
26. Bond value
27. Classical theory
28. Entry variable in simplex method
29. Regression types
30. Gross operating cycle
.................................................
01. Authorised officcial for SARFAECI action. A) SC I B) RM C) AGM D) CM and Above
02. The priority of the Indian Economy. A) Stability B) growth C) Infrastructure D) ...
03. SARFAECI Notice issued on 13/2 issue don 1/1/2018 When can seize the property. A) 27/2/2018 B) 28/2/2018 C)
1/3/2018 D) 4/3/2018
04. Bankruptcy Act implemented in ...... A 2016 B 2018 C…. D….
05. Johari Window the area D indicates what??
06. GDP GNP Formulae & case study. Also related to Export & consumption related problems.
07. M1 M2 M3 M4 – Case study for 5 marks
08. The sequence of Business cycle
09. Bond problem 5 marks
10. Infrastructure projects fails
11. A Wrong Assessment B Faulty advance C Msmatch in cash flow
12. Simulation & Linear Programming problems
13. Performance Appraisal case study 5 marks- KRA & responsibilities
14. DSCR calculation & allied questions regarding repayment term and Project viability 5 marks
15. Housing Loan Priority criteria. Find out which of the following is not applicable condition. 16.
MCLR Depends on Components???
17. Fiscal policy related basic easy questions
18. Right Side Brain- Logical approach??
19. Inventory Turn over Ratio??
20. Wages- Workers Salary- Employee Remuneration- management. Find mismatch??
21. Motivation & Salary/ Rewards Relation
22. Holistic approach??
23. Reward includes A monetory B Non monetory C Both D None of the above. E……..
24. Organisation view- Relationship between esteem, Leadership, Value Etc.
25. Self regulation, Self Discipline, Self Awareness & Esteem, odd man out.
26. Net operating cycle
27. Break even analysis
28. Working capital method calculation
29. Bills discounting can be sanctioned to CC Holders???
30. Qualification of CA Etc???
............................................
01. Linear Programming problem
02. LM Curve how varies with Increased demand.
03. Firm problem. Debtor? Cr? Turnover?? And Two year comparison and comments on Net& gross Life cycle
??? 04. Documentation. Questions related Stamps, Power of Attorney, Authority & Limits?? 05. Training is
applied to which stage of the practical??
06. Which of the following is not a method of appraising??
07. Traditional type of appraisal method??
08. Which of the following is not a part of Willful Defaulter Definition??
09. Market size & Interest Rate which of the following is not true.
10. Relation between Increase in interest rate & money market?
11. DSCR 1.45 Required 1.5 what to do A increase tenure B Increase margin.
12. Which of the following diversion is under the power of RBI A Int rate. B Diversion of Fund C Siphoning of funds
D……… E……….
13. Difference between siphoning & diversion of funds
14. Which of the following is not a Narrow money part??
15. Traditional way of interpreting GDP.
16. Correlation ship Between Marks of SSC students & Height . A +ve B –ve C Reverse D Nil E
None 17. Cluster sampling ??
18. Random Sampling??
19. If sample not represents the normal population then.??
20. Job enlargement??
21. En & Sigma N formulae asked??
22. Bond & maturity- 3 problems & related 2 question.
23. Simulation Theory??
24. Labour Act Passed in A 1944 B 1976 C 1936 D… E None of the above.
25. Which of the following is not a Weaker section advance??
26. Covariance problem 1 mark
27. 02 Case Studies from Module-A
28. 02 Case Studies from Module-B
29. 04 Case Studies from HR (Module-C)
30. 02 Case Studies from credit (Module-D)
.................................................
3. IMPORTANT FORMULA : ADVANCED BANK MANAGEMENT
1. Raw material Turnover Ratio = Cost of RM used / Average stock of R M

2. SIP Turnover = Cost of Goods manufactured / Average stock of SIP
3. Debt Collection period = No. days or months or Weeks in a year/Debt Turnover Ratio. 4.
Average Payment Period = No. days or months or Weeks in a year/Creditors Turnover Ratio. 5.
Inventory Turnover Ratio = Cost of Goods Sold / Average Inventory.
6. Debtors Turnover Ratio = Net Credit Sales / Average Debtors.
7. Creditors Turnover Ratio = Net Credit Purchases / Average Credits.
8. Defensive Interval Ratio = Liquid Assets / Projected Daily Cash Requirement
9. Projected daily cash requirement = Projected operating cash expenses / 365.
10. Debt Equity Ratio = Long Term Debt / Equity.
11. Debt Equity Ratio = Total outside Liability / Tangible Net Worth.
12. Debt to Total Capital Ratio = Total Debts or Total Assets/(Permanent Capital + Current Liabilities)
13. Interest Coverage Ratio = EBIT / Interest.
14. Dividend Coverage Ratio = N. P. after Interest & Tax / Preferential dividend
15. Gross Profit Margin = Gross Profit / Net Sales * 100
16. Net Profit Margin = Net Profit / Net Sales * 100
17. Cost of Goods Sold Ratio = Cost of Goods Sold / Net Sales * 100.
18. Operating Profit Ratio = Earnings Before Interest Tax / Net Sales * 100
19. Expenses Ratio or Operating Ratio = Expenses / Net Sales * 100
20. Net Profit Ratio = Net Profit After interest and Tax / Net Sales * 100
21. Operating Expenses Ratio = (Administrative + Selling expenses) / Net Sales * 100
22. Administrative Expenses Ratio =(Administrative Expenses / Net Sales ) * 100
23. Selling Expenses Ratio =(Selling Expenses / Net Sales ) * 100
24. Financial Expenses Ratio = ( Financial Expenses / Net Sales ) * 100
25. Return on Assets = Net Profit After Tax / Total Assets.
26. Total Assets = Net Fixed Assets + Net Working Capital.
27. Net Fixed Assets = Total Fixed Assets – Accumulated Depreciation.
28. Net Working Capital = ( CA –CL ) – ( Intangible Assets + Fictitious Assets + Idle Stock + Bad Debts )
29. Return on Capital Employed = Net Profit Before Interest and Tax / Average Capital Employed. 30.
Average Capital employed = Equity Capital + Long Term Funds provided by Owners & Creditors at the
beginning & at the end of the accounting period divided by two.
31. Return on Ordinary Share Holders Equity = (NPAT – Preferential Dividends) / Average Ordinary Share
Holders Equity or Net Worth.
32. Earnings Per Share = Net Profit After Taxes and Preferential dividends / Number of Equity Share.
33. Dividend per Share = Net Profit After Taxes and distributable dividend / Number of Equity Shares.
34. Dividend Pay Out Ratio = Dividend per Equity Share / Earnings per Equity Share.
35. Dividend Pay Out Ratio = Dividend paid to Equity Share holders / Net Profit available for Equity Share
Holders.
36. Price Earning Ratio = Market Price per equity Share / Earning per Share.
37. Total Asset Turnover = Cost of Goods Sold / Average Total Assets.
38. Fixed Asset Turnover = Cost of Goods Sold / Average Fixed Assets.
39. Capital Turnover = Cost of Goods Sold / Average Capital employed.

40. Current Asset Turnover = Cost of Goods Sold / Average Current Assets.
41. Working Capital Turnover = Cost of Goods Sold / Net Working Capital.
42. Return on Net Worth = ( Net Profit / Net Worth ) * 100
43. DSCR = Profit after Tax & Depreciation + Int. on T L & Differed Credit + Lease Rentals if any divided by
Repayment of Interest & Installments on T L & Differed Credits + Lease Rentals if any. 44. Factory Cost =
Prime cost + Production Overheads.
45. Cost of Goods Sold = Factory Cost + Selling, distribution & administrative overheads
46. Contribution = Sales – Marginal Costs.
47. Percentage of contribution to sales = ( Contribution / Sales ) * 100
48. Break Even Analysis = F / ( 1 – VC / S )
F = Fixed costs, VC = Total variable operating costs & S = Total sales revenue
49. Break Even Margin or Margin of Safety = Sales – Break Even Point / Sales.
50. Cash Break Even = F – N / P – R or F – N / 1 – ( VC / S )
51. BEP = Fixed Costs / Contribution per unit.
52. Sales volume requires = Fixed cost + Required profit / Contribution per unit.
53. BEP in Sales = ( Fixed Costs / Contribution per unit ) * Price per unit.
54. Contribution Sales Ratio = ( Contribution per unit / Sale price per unit ) * 100
55. Level of sales to result in target profit after Tax = (Target Profit) / (1 – Tax rate / Contribution per unit) 56.
Level of sales to result in target profit = (Fixed Cost + Target profit) * sales price per unit Contribution per unit.
57. Net Present Value = - Co + C1 / (1 + r)
58. Future expected value of a present cash flow = Cash Flow ( 1 + r ) ^ t
59. Present value of a simple future cash flow = Cash Flow / (1 + r) ^ t
60. The Discount Factor = 1 / (1 + r) ^ t
61. Notation used internationally for PV of an annuity is PV ( A, r, n )
62. Notation used internationally for FV of an annuity is FV ( A, r, n )
63. The effective annual rate = ( 1 + r ) ^ t – 1 or (1 + (r / N) ) – 1 )
N = Number of times compounding in a year
64. PV of end of period Annuity = A { (1- (1 / (1+r) ^ n) / r
65. CR = CA : CL
66. Net Worth = CA - CL
67. DER = TL/TNW or debt/equity or TL/equity
68. Price Elasticity of Supply = (% change in quantity supplied/(% change in price)
69. PV = P / R * [(1+R)^T - 1]/(1+R)^T
70. PV = P / (1+R)^T
71. FV = P * (1 + R)^T
72. FV = P*(1-R)^T
73. FV = P / R * [(1+R)^T - 1]
74. FV = P / R * [(1+R)^T - 1] * (1+R)
75. EMI = P * R * [(1+R)^T/(1+R)^T-1)]
76. FV of annuity = A/r ×{(1+r)^n-1}
77. Bond Price = (1/(1+R)^t)((coupon*((1+R)^t-1)/R)+Face Value)

4. LATEST RECALLED & EXPECTED QUESTIONS
A.ONE LINER QUESTION – ANSWER ON LATEST RBI POLICIES 2020-21
Key highlights of RBI monetary policy – 5th Feb 2021

a. RBI has left the Repo rate unchanged at 4.00%. Policy stance is maintained at ‘Accommodative’ as long
as necessary at least in current and next Financial Year.
b. MSF & Bank rate remain unchanged at 4.25%. Reverse repo is unchanged at 3.35%.
c. CPI projection is at 5.2% for Q4FY21 and at 5-5.2% in H1FY22. Inflation has turned out to be better than what
was expected in Dec meeting. Inflation has eased below tolerance level of 6%.
d. Economy is recovering faster than anticipated and growth outlook has improved. GDP growth for FY22 is
projected at 10.5%.
e. RBI will ensure that ample liquidity will remain available to the system. CRR increased by 0.5% from March 27
and another 0.5% in May 21.
f. Retail participation in G Sec allowed
RBI Policy Rates as on 31.01.2021
Key Rate-As on 31.01.2021 31.12.2020
LAF/REPO RATE (22.05.2020) 4.00% 4.00% Reverse Repo Rate (22.05.2020) 3.35%
3.35% MSF/Bank Rate (22.05.2020) 4.25% 4.25% CRR (28.03.2020) 3% 3%
SLR (10.04.2020) 18% 18% Base Rate 7.30%-8.80% 7.30%-8.80% MCLR (Overnight)
6.55%-7.05% 6.55%-7.10% Savings Deposit Rate 2.70%-3.00% 2.70%-3.00% Term Deposit
Rate > 1 Year 4.90%-5.50% 4.90%-5.50% Overnight LAF (of NDTL) 0.25% 0.25% 14days
term Repo (of NDTL) 0.75% 0.75% BASE RATE(s) (of various banks) 7.30 to 8.80%
7.30 to 8.80%
42.72
FOREX RESERVES (Rs. in Cr) 42,71,528 42 ,57,257
42.72
FOREX RESERVES US ($ Million) 5,85,334 5,74,821 SCB TOTAL DEPOSITS (Rs. in Cr)
15006000.15 150059989.91 SCB TOTAL CREDIT (Rs. in Cr) 10928887.25 10839989.74
Credit: Deposit Ratio 71.85% 72.84%
Revision of Interest Rates on Small Savings Schemes w.e.f. 01.01.2021 to 30.06.2021

Scheme Revised Rate of Interest Compounding frequency
Senior Citizen Savings Scheme (SCSS) 7.4 % p.a. (wef 01.04.2020) Quarterly and paid Public Provident
Fund Scheme (PPF) 7.1 % p.a. (wef 01.04.2020) Annually Kisan Vikas Patra (KVP) 6.9 % p.a. (wef
01.04.2020)
Annually
(will mature in 124 months)
Sukanya Samriddhi Account Scheme 7.6 % p.a. (wef 01.04.2020) Annually 5-year NSC 6.8% (wef
01.04.2020) Annually
Reserve Bank of India, has informed that the Agency Commission rates on eligible Government transactions
has been revised as under, and has to be carried out with effect from July 01, 2020:
Sl Type of Transaction Unit Revised Rates

No
1 Receipts - Physical Per transaction Rs 40/-
2 Receipts – e-mode Per transaction Rs 9/-

3 Pension Payments Per transaction Rs 75/-
4 Payments other than Pension Per Rs 100 turnover 6.5 Paise PER 100
Government Business transactions, our Bank is earning: Rs 100/- for each Atal Pension Yojana (APY) account
opened by the branch, Rs 200/- for each National Pension System (NPS) account opened through SAS package /
our Corporate website and Rs 125/- for each e-NPS account opened through NSDL Site.
GUARANTEE EMERGENCY CREDIT LINE (GECL)

GECL 1.0:
a. Loan outstanding ( FB+NFB )- should not be more than Rs.50 Crores,
b. Maximum Eligible Loan Amount is 20% of Rs.50.00 Crores ie Rs.10.00 Crores
c. Annual Turn over was maximum Rs. 250 Crores earlier but no ceiling of Rs.250 Crores
waived. d. Loan should not be more 60 days overdue as 0n 29.02.2020 ie Over due upto SMA1,
e. No loans should be given to SMA2/NPA accounts as on 29.02.2020.
f. Scheme is valid/extended upto 31.03.2021 or till Rs.3.00 lakhs crore amount achied by MLI ( Member lending
Institution).
g. Loan is 100% covered by guarantee of M/S NCTG Limited and is nodal agency for the
scheme. h. Repayment- maximum in 48 months/four years with moratorium of 12 months.
GECL 2.0 :
a. Loan outstanding ( FB+NFB )- should not be more than Rs.50 Crores and upto Rs.500.00
Crores b. Maximum Eligible Loan Amount is 20% of Rs.500.00 Crores
c. Annual Turn over was maximum no ceiling .
d. Loan should not be more 30 days overdue as 0n 29.02.2020 ie Past due upto SMA0,
e. No loans should be given to SMA1, SMA2 & NPA accounts as on 29.02.2020.
f. Scheme is valid/extended upto 31.03.2021 or till Rs.3.00 lakhs crore amount achied by MLI ( Member lending
Institution) and full disbursement should be completed by 30.06.2020
g. Loan is 100% covered by guarantee of M/S NCTG Limited and is nodal agency for the
scheme. h. Repayment- maximum in 60 months/four years with moratorium of 12 months.
i. This is based on recommendation of Committee on Resolution headed by Mr Kamath and applicable for 26 sectors
1. RBI POLICY RATES & DATA BANK

1. The statutory minimum CRAR level required to be maintained by the NBFCs and HFCs respectively as per the
RBI guidelines are? -15% & 12%
2. Which of the following statement with respect to ‘On Tap TLTRO’ facility announced by RBI is true? a. The tenure of
On Tap TLTRO will be three years . The total fund outley of the facility will be upto ₹1,00,000 crore at a floating rate
linked to the policy repo rate. b. The liquidity availed under the scheme can be used by the banks to make
investments in corporate bonds, commercial papers, and non-convertible debentures issued by the entities in specific
sectors over and above the outstanding level of their investments in such instruments and also to extend bank loans
and advances to these sectors. c. Investments made by banks under this facility will be classified as held to maturity
(HTM) even in excess of 25 percent of total investment permitted to be included in the HTM portfolio. All exposures
under this facility will also be exempted from reckoning under the Large Exposure Framework (LEF). - All the above
3. Recently, to improve Liquidity in the System, RBI has increased the limits under Held to Maturity (HTM) category
from 19.5 per cent to 22 percent of NDTL, in respect of SLR securities acquired on or after September 1, 2020, up to
March 31, 2021. Now, RBI has set up a time frame for banks to restore the original position of 19.5% in a phased
manner and the same needs to be achieved before? -June 30, 2022.
4 Banks can deduct the equivalent amount of incremental credit disbursed by them as retail loans to automobiles,
residential housing, and loans to micro, small and medium enterprises (MSMEs), from their net demand and time
liabilities (NDTL) for maintenance of the cash reserve ratio (CRR), for __ years, till ____5 years, 24.01.2025 5
Under bank deposit insurance scheme of DICGC, the deposit insurance cover has been increased from __ to ___
wef 4.2.2020. - Rs.1 lac to Rs.5 lac
6 Under bank deposit insurance scheme of DICGC, the premium payable on deposit insurance cover has
been increased from 10 paise per Rs.100 per annum to ___ wef 1.4.2020. -12 paise
7 Which of the following is not an instrument used by RBI under Liquidity Adjustment Framework to manage short
term / transient liquidity, as part of new Liquidity Management Framework w.e.f. 14.02.20? -open market

operations
8 Which of the following is not an instrument used by RBI under Liquidity Adjustment Framework to manage durable
liquidity, as part of new Liquidity Management Framework w.e.f. 14.02.20? -Standing Deposit Facility (SDF) 9 As
per RBI monetary and credit policy announcement on May 22, 2020, RBI decided, as a onetime measure, to increase
a bank’s exposure to a group of connected counterparties from ___ to ___ of the eligible capital base of the bank.
The increased limit will be applicable up to June 30, 2021.-from 25 per cent to 30% 10. As per RBI monetary and
credit policy announcement on May 22, 2020, RBI reduced the Repo Rate by 40 basis points to: 4%
11 As per RBI monetary and credit policy announcement on May 22, 2020, RBI reduced the Repo Rate by 40
basis points and consequently the new Reverse Repo rate shall be: -3.35%
12 Under RBI’s liquidity adjustment framework w.e.f. 14.02.20, what is the min time period of long term variable
rate repo? -more than 14 days
13 Under RBI’s liquidity adjustment framework w.e.f. 14.02.20, what is the max time period of variable rate repo
and reverse repo (called fine tuned operations)? -up to 13 days
14 Under Long Term Repo Operation (LTRO), what is min bid amount? - Rs.100 lac
15 Under Long Term Repo Operation (LTRO), the interest compounding is annual and payment is made - on
maturity 16 As per RBI monetary and credit policy announcement on May 22, 2020, RBI reduced the Repo Rate by
40 basis points and consequently the new banks rate shall be: 4.25%
17 As per RBI monetary and credit policy announcement on May 22, 2020, RBI reduced the Repo Rate by 40
basis points and consequently the new marginal standing facility rate shall be: -4.25%
18 Generally banks are allowed to classify___% of total investments under held to maturity category (HTM): - 25% 19
A non-governmental organisation that sets and enforces rules and standards relating to the conduct of member
entities in the industry, with the aim of protecting the customer and promoting ethical and professional standards is
called ___: self-regulatory organization
20 Self-Regulatory Organisation (SRO) for Payment Systems Operators (PSOs) need recognition from ___ before
they start functioning? c RBI
21 As per revised regulatory framework for Housing Finance Companies, the total assets should have min _____
assets in the form of housing finance? - 60%
22 As per revised regulatory framework for Housing Finance Companies, out of total assets____ should be housing
loans for individuals. 50%
23 As per revised regulatory framework for Housing Finance Companies, the net worth of HFC should be min __
Rs.20 cr
24 As per revised directions, the amount of individual loan that can qualify as part of retail lending portfolio under
Basel III requirement, is restricted to: Rs.7.5 cr
25 As per revised RBI directions, the banks are to implement net stable funding ratio (NFSR) guidelines under Basel
III, by: 01.04.21
26 As per revised RBI directions, the banks are to implement capital conservation buffer guidelines under Basel III
by: 01.04.21
27 The minimum paid up capital of a new Private Universal Bank has to be: Rs.500 cr
28 What is the penalty for violation of any term of agreement with RBI (for opening and maintaining currency chests)
or deficiency in service in providing exchange facilities, as detected by RBI officials related to detection of mutilated /
counterfeit notes in re-issuable packets prepared by the currency chest branches. Rs.10000 29 What is the penalty for
violation of any term of agreement with RBI (for opening and maintaining currency chests) or deficiency in service in
providing exchange facilities, as detected by RBI officials related to nonconduct of surprise verification of chest
balances, at least at bimonthly intervals, by officials unconnected with the custody thereof and by the officials from the
Controlling Office once in six months. Rs.10000
30 What is the for penalty violation of any term of agreement with RBI (for opening and maintaining currency chests)
or deficiency in service in providing exchange facilities, as detected by RBI officials related to nonacceptance of lower
denomination notes (i.e. denomination of Rs.50 and below) tendered by members of public and linked bank
branches. Rs.10000
31 What is the penalty for shortages in soiled note remittances and currency chest balances, when the denomination
is up to Rs.50? Rs.50 per piece in addition to loss
32 What is the penalty for shortages in soiled note remittances and currency chest balances, when the denomination
is Rs.100 or above? equal to the denomination per piece in addition to loss
33 What is the penalty for mutilated notes detected in soiled note remittances and currency chest balances -
Rs.50/- per piece irrespective of the denomination
34 What is the penalty for noncompliance with operational guidelines by currency chests detected by RBI officials,
related to non-functioning of CCTV – Penalty of Rs.5000 for each irregularity.
35 What is the penalty for noncompliance with operational guidelines by currency chests detected by RBI officials,
related to branch cash/ documents kept in strong room -Penalty of Rs.5000 for each irregularity. 36 What is the
penalty for noncompliance with operational guidelines by currency chests detected by RBI officials, related to
non-utilization of note sorting machines (NSMs) for sorting of notes (NSMs not used for sorting of high denomination
notes received over counter or not used for sorting notes remitted to chest/ RBI) -Penalty of Rs.5000 for each
irregularity.
37 What is the penalty violation of any term of agreement with RBI (for opening and maintaining currency chests) or
deficiency in service in providing exchange facilities, as detected by RBI officials related to non-issue of coins over
counter to any member of public despite having stock. Rs.10000
38 What is the penalty for violation of any term of agreement with RBI (for opening and maintaining currency chests)
or deficiency in service in providing exchange facilities, as detected by RBI officials related to refusal by any bank
branch to exchange soiled notes / refusal by any currency chest branch to adjudicate mutilated notes tendered by
public Rs.10000
2.LOANS & ADVANCES
1. RBI increased the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and jewellery
for nonagricultural purposes from __ per cent to __ per cent.75 per cent to 90 per
2. As per the Banking Regulation Act-1949, Banks to file 3 copies of their Balance sheet and financial statements
along with the auditor’s report with RBI as returns within a period of? 3 months from the end of accounting period.
However, RBI can extend this requirement for further period of 3 months in an unavoidable circumstance. 3.
An interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the borrower
and the real yield to the lender or to an investor is known as Real Interest Rate 4. A Hypothecation becomes pledge
when, Goods are given for possession to the bank, by the borrower. 5. The Term ‘Hypothecation’ is defined
under? SARFAESI Act 2002
6. The Net Working Capital will be negative when? Current Liabilities are more than Current Assets. 7. A loan has
been sanctioned to a limited company against hypothecation of stocks. Company is required to get the charge
registered with Registrar of Companies
8. The Repayment capacity in case of Term Loans is assessed Through? Debt Service Coverage Ratio 9.
The limitation period for a ‘Demand Promissory Note’ is? 3 years from the date of execution of Demand
Promissory Note.
10 Which of the following groups of banks in not required to send credit information on large exposures to CRILC? a
scheduled commercial banks b Private bank c urban cooperative banks d none of these 11 Banks can deduct the
equivalent amount of incremental credit disbursed by them as ______, over and above the outstanding level of credit
to these segments as at the end of the fortnight ended January 31, 2020 from their net demand and time liabilities
(NDTL) for maintenance of the cash reserve ratio (CRR)- retail loans to automobiles, residential housing, and
loans to micro, MSMEs
12 As per the normal time norms, the working capital limits should be renewed by banks, at least once in a period of
___ 1 year
13 Banks can prescribe ____ for review/renewal of borrower limits so that lower rated borrowers whose financials
show signs of problems are subjected to renewal control more frequently. differential time schedules 14 Current
accounts in banks, as per RBI directions, can be in the form of 1)normal current account 2) collection account 3)
escrow account – 1, 2 and 3 all
15 No bank shall open current accounts for customers who have availed credit facilities in the form of ____ from the
banking system. cash credit or overdraft
16 Where a bank’s exposure to a borrower is less than ____ per cent of the exposure of the banking system to that
borrower, while credits are freely permitted, debits to the CC/OD account can only be for credit to the CC/OD
account of that borrower with a bank that has ___ per cent or more of the exposure of the banking system to that
borrower. 10%, 10%
17 Banks with exposure to the borrower of less than ___ per cent of the exposure of the banking system can offer
working capital demand loan (WCDL) / working capital term loan (WCTL) facility to the borrower. 10% 18 In case of
borrowers where exposure of the banking system is ____or more, banks shall be required to put in place an
escrow mechanism. 50 cr or more
19 In case of borrowers where exposure of the banking system is _____ , there is no restriction on opening of current
accounts by the lending banks. However, non-lending banks may open only collection accounts- a 5 cr or above but
< Rs.50 cr
20 In case of borrowers where exposure of the banking system is less than ____, banks may open current accounts
subject to obtaining an undertaking from such customers: 5 cr or more
21 A firm has obtained a term loan of Rs.12 lac and its capital is Rs.4 lac. The firm has created general reserve of
Rs.3 lac while it has been showing prepaid expenses of Rs.1 lac in its balance sheet. The debt equity ratio of the
firm is: 1.71:1
22 When book debts are recovered by a firm and amount credited to bank account, what is the effect: there is no
effect
3. PRIORITY SECTOR LENDINGS
1. The maximum loan amount availed for which Interest Subvention and Prompt Repayment Incentive is available for
the farmers who are involved in Animal Husbandry, Dairy and Fisheries (AHDF) activities is? Rs. 2 lakhs 2. As per the
amended definition of the MSME’s, a Small service enterprise is the one? Which has investment in equipments of
< Rs.10 cr & Annual Turnover < 50 crore
3. Recently Government of India has announced Interest subsidy of 2% for Mudra Loan Borrowers. Which category of
Mudra Borrowers are eligible under this scheme? Shishu
4. What is the maximum tenure of the loan which can be sanctioned by a bank under Emergency Credit Line
Guarantee Scheme (ECLGS)? 4 years
5. What is the maximum cap on interest rate a bank can charge on the credit facility extended under Credit
Guarantee Scheme For Subordinate Debt (CGSSD)? Bank can decide and that rate should be linked to an
external benchmark.
6. Which of these following Ministry of Government of India has recently launched ‘Champions’ Portal which is a
single window solution to the most of the issues faced by MSMEs in India? Ministry of Micro, Small and
Medium Enterprises
7.Under Emergency Credit Line Guarantee Scheme (ECLGS) a Scheduled commercial bank can sanctioned the
facility in the form of? Working Capital Term Loan
8. The maximum credit limit the banks can sanction to the promoters of MSME units under Subordinate Debt scheme
for Stressed MSMEs under Credit Guarantee Scheme announced in Atma Nirbhar Package is? Rs. 75 lakhs 9.
Recently RBI has permitted the banks to consider the loan sanctioned in Subordinate Debt scheme for Stressed
MSMEs under Credit Guarantee Scheme during their debt - equity calculation as? Equity/Quasi Equity 10. What is
the maximum credit facility can be sanctioned to eligible street vendors under PM SVANidhi scheme? Rs. 10,000/-
11. The eligible interest subsidy under PM SVANidhi scheme of Government of India is? 7% 12. What is the maximum
loan amount a MSME unit can apply through www.psbloansin59minutes.com? 5 crore 13. Which of the following is
the nodal agency for managing the portal www.psbloansin59minutes.com? SIDBI 14. GOI has recently amended the
definition of MSMEs. To re-classify the MSMEs according to the new system, banks to consider the value of Plant
and Machinary as per? Written Down Value of Plant and Machinery mentioned in Udyam Registration
Certificate without any requirement of documentary proof.
15. As per the revised MSME definition, a ‘Medium Enterprise’ is the one? Which has Investment in Plant
& Machinery of less than Rs. 50 crore and Turn over of less than 250 crore
16. A Self Help Group can have maximum number of members of 20
17. As per RBI guidelines, banks should not levy any loan related and ad hoc service charges/inspection charges for
priority sector loans up to ₹ 25,000. In case of Self Help Groups? In the case of eligible priority sector loans to
SHGs/JLGs, this limit will be applicable per member and not to the group as a whole
18. Scheduled Commercial banks and foreign banks with more than 20 branches to lend _______percent of their
ANBC/CEOBE to Weaker Sections? 12%
19. As per the latest Master circular on Priority Sector Advances, advances to startups either fall under the category
of MSME or involved in agriculture activities are eligible to get qualified under priority sector advances upto an
exposure limit of? Rs. 50 crore
20. With respect to loans to housing sector which are eligible to get classified under priority sector advances, which of
the following limit is appropriate? Loans to individuals up to ₹35 lakh in metropolitan centres and up to ₹25 lakh
in other centres provided the overall cost of the dwelling unit in the metropolitan centre and at other centres
does not exceed ₹45 lakh and ₹30 lakh respectively
21. As per the latest Priority sector guidelines, the applicable lending targets for the commercial banks to the
Weaker Sections is? 12% of ANBC or CEOBE, whichever is higher..
22. Scale of Finance with respect to Agriculture Crop Loans is fixed by? District Level Technical Committee (DLTC)
23 Affordable Housing is defined as a housing project using at least ___of the Floor Area Ratio (FAR)/Floor Space
Index (FSI) for dwelling units with carpet area@ of not more than 60 square meters: 50% 24 The urban cooperative
banks (UCBs) are required to maintain priority sector lending of ___% of adjusted net bank credit or credit equivalent
of off-balance sheet exposure, which ever is higher, which is to be achieved by 31.03.24?
75%
25 As per RBI’s 24.04.20 guidelines, in case of shortfall in achievement of priority sector lending targets, the Urban
Coop Banks have to deposit the amount with (a) RIDF of NABARD (b) other funds with NABARD or NHB or SIDBI (c)
MUDRA (d) EXIM Bank - a to c only
26 As per RBI’s 24.04.20 guidelines, the Urban Coop Banks have to calculate the achievement of priority sector
lending targets with reference to the following average outstanding PS loans at end of 4 quarters 27 With effect
from 1.4.2020, interest subvention in case of short term crop loans is available only if: advance is allowed
through KCC
28 As part of Govt. of India Covid19 Relief Package, Government of India will provide Interest subvention of ___% to
prompt payees for a period of 12 months for Shishu loanees under MUDRA scheme. 2%
29 As part of Govt. of India Covid19 Relief Package, special working capital credit facility shall be provided to street
vendors up to : Rs.10000
30 As part of Govt. of India Covid19 Relief Package, NABARD will extend additional refinance support of Rs. ___
crore for crop loan requirement of Rural Co-op Banks & RRBs. Rs.30000 cr
31 As part of Govt. of India Covid19 Relief Package, a new scheme to provide interest subvention @ ___ % per
annum to dairy cooperatives for 20-21. 2%
32 As part of Govt. of India Covid19 Relief Package, Financing facility of Rs. ___ crore will be provided for funding
Agriculture Infrastructure Projects at farmgate & aggregation points (Primary Agricultural Cooperative Societies,
Farmers Producer Organisations, Agriculture entrepreneurs, Startups, etc.) Rs.100000 cr 33 Which of the following
in general, is eligible, as a borrower, under National Rural Livelihood Mission (NRLM)? women self help groups
34 For consideration of sanction of loans to MSMEs, submission of ______ is a mandatory requirement.
Udyam Registration Certificate
35 For the purpose of classification as an MSME, which of the following should be considered as value of plant and
machinery or equipment? written down value
36 A core investment company is not required to be registered with RBI when its assets size is : less than Rs.100 cr
37 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), the
banks are to sanction cash credit loan for a period of __ 3 years
38 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), DP
for 2nd Year shall be 6 times of the existing corpus or minimum of ___ lakh, whichever is higher Rs.2 lac 39 As per
revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), DP for 4th
Year shall be more than ____ based on the Micro credit plan prepared by SHG and appraised by the Federations /
Support agency and the previous credit history. Rs.6 lac
40 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), DP
for 3rd Year shall be min ____ based on the Micro credit plan prepared by SHG and appraised by the Federations
/Support agency and the previous credit history. Rs.6 lac
41 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), in
case of Term Loan, banks are to sanction loan amount in doses. The amount of 1st dose shall be min ___: Rs.1 lac
42 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), in
order to facilitate use of loans for augmenting livelihoods of SHG members, RBI advised bank that at least ___ of
loans above Rs.2 lakh, be used primarily for income generating productive purposes. 50% 43 As per revised
provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), the banks are to
sanction cash credit loan of Rs.____, with the provision of annual drawing power. Rs.6 lac 44 As per revised
provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), DP for First Year shall
be 6 times of the existing corpus or minimum of ___ lakh, whichever is higher Rs.1 lac 45. Loan under which of the
following scheme/purpose, can be allowed within the DRI financing of 4%: housing loans up to Rs.20000 under
Indira Awas Yojna
46. Revised Priority Sector Guidelines Issued By RBI Vide Their Circular dated 4th September 2020 And The
Revised Guidelines and are operational w.e.f________04.09.2020.
47 The Cumulative target for priority sector lending, is ____ per cent of Adjusted Net Bank Credit (ANBC)or Credit
Equivalent of Off-Balance Sheet Exposures (CEOBE) 40%
48 The mandated target of Small and Marginal farmers is modified to ___ from of Adjusted Net Bank Credit
(ANBC)from the existing level of ____ ofAdjusted Net Bank Credit (ANBC). 10%; 8%
49 The mandated target of weaker sections is increased to ____of Adjusted Net Bank Credit (ANBC) from the
existing level of ____ofAdjusted Net Bank Credit (ANBC).12%;10 %
50. Loan limits for Renewable Energy have been increased to _____ Crore from the existing limit of ____Crore.
Rs30 Crore,Rs15 Crore
51. Loans up to ___ Crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of their
produce at a pre-determined price is classified under Priority Sector, i.e. Agriculture Farm Credit. Rs5 Crore 52
with in the ----% target for total agriculture, a target of ______percent is prescribed for Small and Marginal
farmers.18%;10 %
53. Lending by banks to NBFCs with Registered NBFCs and MFIs for on-lending under ‘Term lending’
component under Agriculture will be allowed up to ______per borrower Valid up to 31.03.2021. (b) Rs 10 Lakh
54. In case of priority sector loans the rates of interest on bank loans will be as per directives of _____?
Department of Regulation (DoR), RBI
55. Bank credit to NBFCs (including HFCs) cap on-lending will be allowed up to an overall limit of ______ of
individual bank’s total priority sector as applicable for priority sector lending .5%
56. Incremental export credit (other than in agriculture and MSME) over corresponding date of the preceding year, up
to 2 per cent of ANBC or CEOBE whichever is higher, subject to a sanctioned limit of up to ______ perborrower is
eligible for being considered under priority sector Rs 40 Crore
57.Loans to distressed persons [other than distressed farmers indebted to noninstitutional lenders] not exceeding
______ per borrower to prepay their debt to noninstitutional lenders. Rs 1.00 Lakh
58.As per RBI guidelines on priority sector credit banks: a register/ electronic record should be maintained by the bank
wherein the following information with thereof, etc. should be recorded. The aforesaid register/electronic record should
be reasons made available to all inspecting agencies (a)Date of Receipt (b) Date of Sanction/Rejection (c)Date of
Disbursement All of the above
59.To ensure continuous flow of credit to priority sector, the compliance of banks will be monitored on ‘______’
basis.Quarterly
60. The data on priority sector advances is required to be furnished by banks to FIDD, Central Office at ______ and
______ as per the reporting format -Quarterly, Annual
4. NPA & RECOVERY MANAGEMENT
1. RBI’s onetime restructuring plan for MSMEs is applicable to the MSME units with an exposure limit of The
aggregate Funded and Non funded Exposure with banks and financial institutions not exceeding Rs. 25 crore.
2. As per the recent Resolution Frame work released by RBI for handling Covid- 19 related stress, in case a bank
restructures an eligible MSME account, the percentage of provision it needs to keep for the restructured account is?
Additional provision of 5% over and above the provision already held by them for that account. 3. As per the
recent Resolution frame work announced by RBI to manage Covid 19 related stress on asset quality, the resolution
plan approved for an exposure of Rs. ____and above shall require an Independent Credit Evaluation (ICE) by any one
credit rating agency (CRA) authorized by the Reserve Bank Rs. 100 Cr
4. As per the recent Resolution frame work announced by RBI to manage Covid 19 related stress on asset quality,
which of the following can be a permissible resolution measure a bank can undertake in managing their exposure? a.
Restructuring of Advances and granting the moratorium for a maximum period of 2 years. b. Conversion of any
interest accrued, or to be accrued, into another credit facility or sanctioning additional credit facility. c. Compromise or
One Time Settlement in Account. d. All the above Only a & b
5. RBI has recently constituted an expert committee to recommend a list of financial parameters and sector specific
benchmark ranges for such parameters to implement a resolution plan in handling the Covid 19 related stress on loan
accounts. The chairman of the 5 members committee formed by RBI is? Mr. K V Kamath 6. As per the Resolution
Frame work announced by RBI to manage Covid-19 related stress, in case of the accounts under consortium of
Multiple Banking arrangement, the resolution plan should be accepted by 75 per cent by value of the total
outstanding credit facilities (fund based as well non-fund based) , and not less than 60 per cent of lending
institutions by number
7. A monetary ceiling of Rs.20 lac (max) has been imposed for entertaining cases by which of the following: Lok
Adalat
8. The period of limitation for execution of decree passed by the court is? 12 years
9. One time restructuring facility is available for MSME sector, where the loan amount is up to __ as on 01.01.20:
Rs.2500 lac
10 One time restructuring facility is available for MSME sector, where the loan amount was within prescribed limit, as
on 01.01.20 and : a standard account as on 01.01.20 b restructuring is implemented before 31.12.20 c borrower is
GST registered d all
11. If working capital limits are not renewed on time, the account shall be treated NPA after ____ from due date of
renewal. 180 days
12. Urban Coop Banks with total assets of ____ as on 31.03.20, are required to implement system based asset
classification wef 30.06.21- Rs.2000 cr or more
classification wef 30.09.21-Rs.2000 cr or more but less than Rs.3000 cr
14. An NPA has been sold by BankB to a bank. What is the minimum period for which the account should have been
in the books of Bank-B before sale to the bank: any NPA account
15. What will be due date for a bill dated 27.12.2016 payable 30 days after date: Jan 25, 2017 16. What type of right
the banks are having under SARFAESI Act in case of default by the borrower, in repayment of the loan: a take
possession of the secured assets, b takeover management of the assets c to sell or lease the secured assets any of
the above
17 What is the time period of the notice which is required to be given by a bank for sale of security charged to the
bank after taking possession under the provision of Securitisation and Reconstruction of Financial Assets and
Enforcement of Security Interest Act 2002: 30 days
18. As per extant instructions of RBI, what is the maximum amount limit that the bank can fix up to which minors may
be allowed to operate their deposit accounts independently. at discretion of banks 19. In a loan account, the Central
Govt. has given guarantee. The loan account is overdue for the last 2 years and 5 months. What is the provision
%age on the loan: No provision is to be made.
20 A loan is guaranteed by the Guarantee of State govt. and it is running irregular for the last 5 months. The loan
will be classified as ___: sub-standard secured account
5. GENERAL BANKING
1. As per the 11th bipartite settlement, it is proposed to increase the Bank’s contribution to NPS fund to _____% of
Basic Pay and DA of its employees from the existing 10%. 14%
2.The name of the Platform recently launched by the Government of India to induce Transparent Taxation System is
the country is? Honouring the Honest
3. What is the applicable rate of TDS, a bank need to deduct while making the payment during the cash withdrawl of a
customer who has not filed income tax return for last three assessment years and the time limit to file the return of
income u/s 139(1) is expired and the amount of cash withdrawn exceeds Rs. 1 crore in the financial year 5% 4.. As per
the Industrial Relations Code, 2020 which is passed recently, the establishment with ________number of workers
should seek prior permission of the government before closure or lay-off or retrenchment of employees.300 5. A
person who is regular in filing of income tax returns from past 3 years. He withdraws cash of Rs. 60 lakh in a financial
year. The applicable rate of TDS on his cash withdrawl is? Nil
06. Who among the following has been elected as Chairman of IBA for the term 2020-21? Shri Rajkiran Rai G 7. A
Bank can issue Certificate of Deposit for a minimum and maximum period of _____ & _______ with a minimum
amount of Rs. 1 lakh and in multiples of Rs. 1 lakh thereafter. 7 days and One year
8. Who among the following is not a serving Deputy Governor of RBI as on date? Shri S. S.
Mundra 9. Hindi day is observed on : Sept 14
10. The insurance company__becomes the 1st company in India to use Whatsapp chatbot Bharti AXA
General Insurance
11. Microsoft announced a partnership with which Bank to train differentlyabled people to find jobs in the banking,
financial services and insurance (BFSI) sector? SBI
12. Who has been appointed as new chairperson of PFRDA? Supratim Bandyopadhyay
13. Who has been appointed as the new Central Vigilance Commissioner Sanjay Kothari
14. Central Government notified certain NBFCs having assets worth rupees _____________, which shall be entitled
for enforcement of security interest in secured debts of certain amounts, as financial institutions for the purposes of
the said Act.Rs.100.00 crore and above.
15. Central Government notified certain NBFCs which shall be entitled for enforcement of security interest in
secured debts of rupees __________ and above, as financial institutions for the purposes of the said Act.
Rs.50.00 Lakh and above.
16. Microsoft announced a partnership with which Bank to train differentlyabled people to find jobs in the banking,
financial services and insurance (BFSI) sector? SBI
6. POLICY RELATED WITH COVID-19

01 As per RBI directions dated 27.03.20, banks can grant moratorium on term loan repayment for a period of 3
months i.e. 01.03.20 to 31.05.20 and now extended upto 31.08.2020
02 As per RBI directions dated 27.03.20, in cash credit or overdraft account, the recovery of which of the following
can be deferred for 3 months ending 31.05.20 and now extended upto 31.08.2020: interest applied to the accounts
03 As per RBI directions on Covid19 relief, if moratorium on term loan installment repayment is allowed or interest is
deferred for recovery in CC/OD accounts, the banks are to make provision ___ % if such accounts are in default but
in standard category: 10%
04 On 27.03.20, RBI reduced the cash reserve ratio rate from ___ to ___ as %age of net demand and time liabilities,
for a period of one year beginning from 28.03.20: 4% to 3%
05 On 27.03.20, RBI reduced the requirement of min daily balance under CRR to ___ % of average fortnightly
balance? 80% from existing 90%
06 On 27.03.20, RBI allowed banks to complete creation of capital conservation buffer (last installment) to bring the
CCB to 2.5% of RWAs, by ____ instead of 31.03.20: 30.09.20
07 On 27.03.20, RBI deferred the implementation of net stable funding ratio under Basle framework to 1.10.20 and
now extended for another 06 months,effective wef 01.04.2021
08 As per March 27, 2020 directions of RBI, wherever the exposure of a lending institution to a borrower is _______
as on March 1, 2020, the bank shall develop an MIS on the reliefs provided to its borrowers which shall inter alia
include borrower-wise and creditfacility wise information regarding the nature and amount of relief granted. Rs.5 cr
and above
09 On 27.03.20, RBI changed the repo rate. What is the new rate? 4.40% and now wef 22.05.2020 it is 4.00%
10 On 27.03.20, RBI changed the repo rate. Due to this change, the new marginal standing facility rate is?
4.65% and now wef 22.05.2020 it is 3.35%
11 On 27.03.20, RBI changed the repo rate. Due to this change, the new bank rate/MSF is? 4.65% and now wef
22.05.2020 it is 4.25%
12 As per RBI directions, the exposures shifted to a person resident outside India, will attract a minimum risk weight
of ____%. 150%
13 Asian Monetary Unit is denominated as 1) ACU Dollar, 2) ACU Euro 3) ACU Yen 4) ACU GBP 1 to 3 only 14
Banks were required to maintain liquidity coverage ratio of 100% w.e.f.1.1.19. To provide Covid-19 relief, the LCR
can be maintained at ___ % till 30.09.20 and is to be restored back to 100% w.e.f. 31.03.21. 80% 15 On Apr 17,
2020 RBI put restrictions on bank for ____ till further instruction: payment of dividend 16 On Apr 17, 2020, RBI
decided to reduce to 3.75%, which of the following: reverse repo rate and now wef 22.05.2020 it is 3.35%
17 RBI decided on 17.04.20, to conduct targeted long-term repo operations for an aggregate amount of Rs.50,000
crore, to begin with, in tranches of appropriate sizes. The funds availed by banks under this should be invested in
___ of NBFCs, with at least 50 per cent of the total amount availed going to small and mid-sized NBFCs and MFIs.
a investment grade bonds b commercial paper c non-convertible debentures -all the above 18 RBI decided on
17.04.20, to conduct targeted long-term repo operations for an aggregate amount of Rs.50,000 crore, to begin with,
in tranches of appropriate sizes. The funds availed by banks should be invested in different type of instruments of
NBFCs, with at least ___ of the total amount availed going to small and midsized NBFCs and MFIs. 50%
19 On 17.04.20, RBI decided to provide special refinance facilities for a total amount of Rs. 50,000 crore to NABARD,
SIDBI and NHB to enable them to meet sectoral credit needs. This will comprise (1) Rs. 25,000 crore to NABARD for
refinancing (2) Rs. 15,000 crore to SIDBI for on-lending (c) Rs. 10,000 crore to NHB for supporting housing finance
companies (HFCs). 1, 2 and 3 are correct
20 As per Govt. of India Covid19 Relief Package, what is the total amount of collateral free Emergency Working
Capital facility to be provided to MSME sector? Rs.300000 cr
21 As per Govt. of India Covid19 Relief Package, an MSME shall be eligible for collateral free Emergency Working
Capital facility where the borrower has outstanding credit of ____ and sales turnover up to Rs.____? 25 cr, 100 cr 22
As part of Govt. of India Covid19 Relief Package, in order to provide more funds at the disposal of the taxpayers, the
rates of Tax Deduction at Source (TDS) for non-salaried specified payments made to residents and rates of Tax
Collection at Source (TCS) for the specified receipts shall be reduced by _ % of the existing rates. 25% 23 As per
Govt. of India Covid19 Relief Package, what is the tenor of collateral free Emergency Working Capital facility to be
provided to MSME sector? 4 years
24 As per Govt. of India Covid19 Relief Package, what is the size of subordinated debt to be provided to stressed
MSME sector? Rs.20000 cr
25 As per Govt. of India Covid19 Relief Package, what is amount of equity infusion through Fund of Funds to be
provided to MSME sector? Rs.50000 cr
26 As per Govt. of India Covid19 Relief Package, for MSME sector, global tenders will be disallowed in Govt.
procurement tenders for value up to? Rs.200 cr
27 As part of Govt. of India Covid19 Relief Package, for MSME sector, a micro enterprise means a unit with
investment in plant and machinery up to ____ and fulfilling the turnover criteria:Rs.1 cr 28 As part of Govt. of India
Covid19 Relief Package, for MSME sector, a micro enterprise means a unit with annual
sales turnover up to ____ and fulfilling the investment criteria: Rs.5 cr
29 As part of Govt. of India Covid19 Relief Package, for MSME sector, a small enterprise means a unit with
investment in plant and machinery up to ____ and fulfilling the turnover criteria: Rs.10 cr 30 As part of Govt. of
India Covid19 Relief Package, for MSME sector, a small enterprise means a unit with annual sales turnover up to
____ and fulfilling the investment criteria: Rs.50 cr
31 As part of Govt. of India Covid19 Relief Package, for MSME sector, a medium enterprise means a unit with
investment in plant and machinery up to ____ and fulfilling the turnover criteria: Rs.50 cr 32 As part of Govt. of India
Covid19 Relief Package, for MSME sector, a medium enterprise means a unit with annual sales turnover up to ____
and fulfilling the investment criteria: Rs.250 cr
33 As part of Govt. of India Covid19 Relief Package, Government will launch a Rs. ___ crore Special Liquidity Scheme
Rs.30000 cr
34 As part of Govt. of India Covid19 Relief Package, PFC/ REC to infuse liquidity of Rs. ___ cr to DISCOMs
against receivables -Rs.90000 cr
35 Under Guaranteed Emergency Credit Line (GECL) for MSMEs and business enterprises and now this
scheme is extended upto 31.03.2020( earlier upto31.10.2020), which among the following accounts is not
eligible: Standard loans SMA2
36 To be eligible for loan under Guaranteed Emergency Credit Line (GECL) for MSMEs and business enterprises,
what is the max annual turnover for the financial year 2019-20: Rs.100 cr
37 The type of enterprises that are eligible under Guaranteed Emergency Credit Line (GECL), do not include which
of the following: Loans to individuals
38 What is the rate of interest that can be charged for Guaranteed Emergency Credit Line (GECL) by banks?
external benchmark prescribed by RBI + 1%
39 What is the max rate of interest that can be charged for Guaranteed Emergency Credit Line (GECL) by
banks? 9.25%
40 What is tenor of the loan under Guaranteed Emergency Credit Line, from date of disbursement, including
moratorium period? 5 years
41 What is no. of monthly instalments for loan under Guaranteed Emergency Credit Line? 36 42 Member
Lending Institutions (MLIs) can invoke the guarantee under Guaranteed Emergency Credit Line, by informing
NCTGC, the date on which the account was classified as NPA within ___days of the account being classified
as NPA 90 days
43 NCGTC is required to make ___ % payment of claim to MLIs under Guaranteed Emergency Credit Line, within? a
50% within 30 days and remaining on conclusion of recover process 75% within 30 days and remaining on
conclusion of recover process.
44 For capital adequacy ratio, the risk weight for loans under Guaranteed Emergency Credit Line, has been
prescribed by RBI as: 0%
45 The Scheme for grant of exgratia payment of difference between compound interest and simple interest for six
months to borrowers in specified loan accounts covers the following period? 1.3.20 to 31.8.20 46 The Scheme for
grant of exgratia payment of difference between compound interest and simple interest for six months to borrowers
covers loan accounts with amount up to ? Rs.2 cr
47 Which of the following provides credit default guarantee for loans under Guaranteed Emergency Credit Line
(GECL) for MSMEs and business enterprises NCGTC
48 What is extent of guarantee cover for loans under Guaranteed Emergency Credit Line (GECL) for MSMEs
and business enterprises 100%
49 What is extent of loan that can be sanctioned as additional loan under Guaranteed Emergency Credit Line (GECL)
for MSMEs and business enterprises? 20% of loan o/s as on 29.02.20
50 To be eligible for loan under Guaranteed Emergency Credit Line (GECL) for MSMEs and business enterprises,
what is the max o/s balance in loan accounts as on 29.02.20 -Rs.25 cr
B.RECALLED & EXPECTED QUESTIONS SUBJECT WISE
VARIOUS ACT/LAWS RELATED WITH INDIAN BANKING

1. Which section of SARFAESI Deals with Sale notice? (Ans: Section13)
2. What is the minimum bid amount to be paid by the successful bidder for confirmation of bid/sale in case of
auction of property under SARFAESI? (Ans.25%)
3. As per BCSBI, Banks have to return the mortgaged documents within how many days of closure of loan /
application for the same? (Ans: 15 days)

4. Reply to information sought under RTI to be given within a maximum period of___(Ans: 30 days) 5. As per
which act/section, Bank notes not to be stapled? (As per RBI directives issued under Section 35A of the Banking
Regulation Act, 1949)
6. Which act/section deals with Lien? (Ans: Section 170 & 171 of Indian Contract Act 1872)
7. Which act deals with Assignment? (Ans: Transfer of Property Act)
8. RBI is empowered to issue Priority Sector Lending guidelines under Which Act/Section? (Ans. Sections 21 and 35A
of the Banking Regulation Act, 1949)
9. What is the minimum limit of debt for admission of a case in DRT? (Ans. Rs.20.00 Lakh) 10. As per the Banking
Companies (Period of preservation of records) rules 1985, Banks are required to preserve the records for how many
years? (Ans. 5-8 years immediately preceding the current calender year) 11. Section 11 of Banking Regulation Act
deals with: (Ans. minimum paid-up capital and reserves required by a Banking Company)
12. Power of Court to try cases summarily for offences under NI Act is defined in : (Section 143 of NI Act) 8. Amount
of External Commercial Borrowing limit per Start-up in a financial year is limited to: (Ans. USD 3 million or
equivalent)
13. The minimum and maximum court fee that is required to be paid for filing a suit in a Debt Recovery Tribunal is:
Rs.12000,Rs. 1.50 lac without any minimum and maximum
14. What is the stipulated time requirement for giving a notice to the drawer by the holder of a cheque where he
wants to lodge a complaint u/s 138 of Negotiable Instrument Act against the drawer? within 30 days of date of
receipt of information from the bank by the holder
15. Which of the following is not a material alteration: the payee converts a bearer cheque into an order 16.
Jurisdiction of Distt. Commission under Consumer Protection Act 2019 is for cases an amount of: up to Rs.100 lac
17. A complaint has been rejected by the Ombudsman. The customer: can appeal within 30 days of date of
receipt of information about rejection
18. Under which of the following, RBI adopts selective credit control measures: Section 21 of Banking Regulation
Act 1949
19. Commencement of employees’ working hours should be 15 minutes before the commencement of business hours.
Which of the following committees gave these recommendations Goiporia Committee
20. The Attachment order will be applicable only when the banker and customer would be having following
relationship: Debtor and creditor
21. Which of the following is the unified authority to regulate all financial services in International Financial
Services Centers (IFSCs) in India? International Financial Services Centers Authority (IFSCA)
LOANS & ADVANCES
1. The banks can determine their actual lending rates on loans and advances with reference to: marginal cost
based lending rate
2. The banks can determine their actual lending rates on loans and advances with reference to: marginal cost
based lending rate
3. As per large exposure guidelines of RBI, the maximum exposure for a company engaged in infrastructure
activities is restricted to: 25% of Tier-1 capital
4. As per Section 269-T of Income Tax, the cash payment of FDR can be made for an amount: less than Rs.20000
including interest
5. The term ‘accrued’ in financial parlance, means : a what has been received or paid during what has become
due for receipt or payment during a financial period
6. What is the minimum capital requirement under Basel 3 as per Bank for International Settlement, prescription: 8%
7. The following categories of loans can be priced without being linked to MCLR as the benchmark for determining
interest rate: (1) Advances to banks’ depositors against their own deposits. (2) Advances to banks’ own
employees including retired employees. (3) Advances granted to the Chief Executive Officer / Whole Time
Directors. (4) Loans linked to a market determined external benchmark.1 to 4 all
8. Banks are to review and publish their Marginal Cost of Funds based Lending Rate (MCLR) of different maturities
every ___ on a pre-announced date with the approval of the Board or any other committee to which powers have
been delegated. month
9. Which of the following is not a domestic rating agency that has been accredited by RBI/SEBI for the purpose of
risk weighting the claims of banks for capital adequacy purpose: Standard and Poors’
10. Generally, tenure of external concurrent auditors with a bank shall not be more than ___ years on continuous
basis 5 years

FINANCIAL STATEMENT / BALANCE SHEET ANALYSIS
1. Expenses made for preparation of a project of a firm are classified as ____ in the Balance Sheet (Ans.
Preliminary and Pre-operative expenses).
2. On comparison of balance sheet of firm for two years, it is observed that its debt equity ratio has increased from
1.5:1 to 2:1 but its current ratio and the total of balance sheet has not changed. Which of the following is possibly
true in this regard the amount of long term liabilities has increased or amount of net worth had declined or
amount of intangible assets has increased
3. At the time of renewal of working capital limits of a partnership firm, it was observed by the appraising officer that
the quick ratio of the firm has declined substantially but the current ratio has not changed. Which among the
following could be true: a the amount of stocks has declined b the firm has become slow in recovery of its book
debts c the firm’s stocks as percentage of current assets have increased d the firm’s receivables as percentage
of current assets have declined c and d above
4. A firm has obtained a term loan of Rs.12 lac and its capital is Rs.4 lac. The firm has created general reserve of
firm is: 1.71:1
5. When book debts are recovered by a firm and amount credited to bank account, what is the effect: there is no
effect
6. A bank has an oversold position in foreign exchange on a particular day. It has to square its position at the end of
the day. The foreign exchange rates are increasing: the bank will incur loss
7. A firm has capital of 200, reserves of 300, debentures 50, goodwill 30, pre-paid expenses of 10. What is net
worth and tangible net worth: 500, 470
8. A firm has stocks of 30, debtors 50, creditors 20, preliminary expenses 10, bank overdraft What is the current
ratio 1.60:1
9. Capital 20, reserves 30, debentures 100, bank overdraft 10, prepaid expenses 10. The debt equity ratio is:2:1
10.In a public limited company, maximum and minimum no. of share-holders is: No limit and 7
PRIORITY SECTOR ADVANCES
1. Total Priority Sector Lending Target for Domestic scheduled commercial banks and foreign banks is___ (Ans. 40
per cent of Adjusted Net Bank Credit or Credit Equivalent Amount of OffBalance Sheet Exposure, whichever is
higher)
2. Within the 18 per cent target for agriculture under Priority Sector Lending, a target of ____percent of ANBC or
CBOE, whichever is higher is prescribed for Small and Marginal Farmers (Ans. 8%)
3. What is the Target for Micro Enterprises under Priority Sector Lending? (Ans. 7.5 per cent of ANBC or CBOE,
whichever is higher)
4. What is the Target for Weaker Sections under Priority Sector Lending? (Ans. 10 per cent of ANBC or CBOE,
whichever is higher)
5. For the purpose of priority sector lending, what does ANBC denotes? (Ans. the Outstanding Bank Credit in India -
bills rediscounted with RBI and other FIs + permitted non-SLR bonds/debentures under Held to Maturity (HTM)
category + other investments eligible to be treated as part of priority sector lending + Outstanding Deposits under
RIDF and other eligible funds on account of priority sector shortfall + outstanding PSLCs - Eligible amount for
exemptions on issuance of long-term bonds for infrastructure and affordable housing - Eligible advances extended
in India against the incremental FCNR(B)/NRE deposits, qualifying for exemption from CRR/SLR requirements -
Investments made by public sector banks in the Recapitalization Bonds floated by Government of India)
6. Loans to farmers up to ₹____ against pledge/hypothecation of agricultural produce (including warehouse receipts)
for a period not exceeding ______ will be classified under Farm Credit in Agriculture. (Ans. 50 lakh and 12
months)
7. Loans to corporate farmers, farmers’ producer organizations/companies of individual farmers, partnership firms
and co-operatives of farmers directly engaged in Agriculture and Allied Activities, up to an aggregate limit of _______
will be classified as Farm Credit-Agriculture under Priority Sector. (Ans. ₹2 crore per borrower)
8. Agriculture infrastructure loans up to an aggregate sanctioned limit of Rs._________ per borrower from the
banking system, will be classified as agriculture under Priority Sector (Ans. ₹100 crore per borrower) 9. Loans
up to Rs_______ to co-operative societies of farmers for disposing of the produce of members will be classified
as Agriculture Ancillary Activity under Priority Sector (Ans. ₹5 crore).
10. Loans for Food and Agro-processing up to an aggregate sanctioned limit up to Rs_______ per borrower from the
banking system will be classified as Agriculture Ancillary Activity under Priority Sector (Ans. ₹100 crore). 11.
Maximum Overdraft limit to PMJDY account holders has been raised to _______/-, and there will not be any
conditions attached for overdraft up to _______/- (Ans. ₹ 10,000 and ₹ 2,000)
12. In case of Domestic Banks, Incremental export credit over corresponding date of the preceding year, upto
_______ per cent of ANBC or CBOE, whichever is higher, effective from April 1, 2015 subject to a sanctioned
limit of up to ______per borrower will be classified as Priority Sector Lending. (Ans. 2%, ₹ 40 crore)
13. Loans to individuals for educational purposes including vocational courses up to what amount will be considered
as eligible for priority sector lending? (Ans. ₹10 lakh irrespective of the sanctioned amount) 14. Housing Loans to
individuals up to Rs__________in metropolitan centres (with population of ten lakh and above) and loans up to
Rs________in other centres provided the overall cost of the dwelling unit in the metropolitan centre and at other
centres does not exceed ₹45 lakh and ₹30 lakh, respectively. (Ans. ₹35 lakh and ₹25 lakh)
14. Loans for repairs to damaged dwelling units of families up to Rs___________in metropolitan centres and up to
Rs________in other centres will be classified under Priority Sector. (Ans. ₹5 lakh and ₹2 lakh) 15. Loan under
which of the following scheme/purpose, can be allowed within the DRI financing of 4%: housing loans up to
Rs.20000 under Indira Awas Yojna
AGRICULTURE
1. The maximum loan amount availed for which Interest Subvention and Prompt Repayment Incentive is available
for the farmers who are involved in Animal Husbandry, Dairy and Fisheries (AHDF) activities is? Rs. 2 lakhs 2. Bank
loans to any governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum
dwellers subject to a ceiling of Rs_________per dwelling unit will be classified as Priority Sector Lending (Ans. ₹10
lakh).
3. The loans sanctioned by banks for housing projects exclusively for the purpose of construction of houses for
Economically Weaker Sections (EWS) and Low-Income Groups (LIG), the total cost of which does not
exceed ₹______ per dwelling unit will be classified as Priority Sector (Ans. ₹10 lakh)
4. Bank loans to Housing Finance Companies (HFCs), for on-lending for the purpose of
purchase/construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of slum
dwellers, subject to an aggregate loan limit of Rs________per borrower will be eligible to be classified as
Priority Sector Lending. (Ans. ₹ 20 lakh)
5. Bank loans up to a limit of Rs_______per borrower for building social infrastructure in Tier II to Tier VI centres
will be eligible to be classified as Priority Sector Lending. (Ans. ₹5 crore)
6. Bank loans up to a limit of Rs______to borrowers for purposes renewable Energy will be eligible to be classified
as Priority Sector Lending. For individual households, the loan limit will be Rs________per borrower.(Ans. ₹15
crore, ₹10 lakh)
7. Loans to distressed persons [other than farmers] not exceeding Rs___________to prepay their debt to non
institutional lenders will be classified under Priority Sector (Ans. ₹1 lakh per borrower)
8. Bank credit to MFIs extended for on-lending to individuals and also to members of SHGs / JLGs will be eligible for
categorization as priority sector advance, provided not less than _____ percent of total assets of MFI (other than
cash, balances with banks and financial institutions, government securities and money market instruments) are in
the nature of “qualifying assets”. (Ans. 85%)
9. Bank credit to registered NBFCs (other than MFIs) for on-lending under Agriculture will be eligible for
classification as priority sector with the condition___ (Ans. Term lending’ component under Agriculture will be
allowed up to ₹ 10 lakh per borrower)
10. Bank credit to registered NBFCs (other than MFIs) for on-lending under Micro & Small enterprises up to
Rs________per borrowerwill be eligible for classification as priority sector. (Ans. ₹ 20 lakh) 11. No loan related
and adhoc service charges/inspection charges should be levied on priority sector loans up to Rs________ (Ans.
₹25,000)
12. What is the maximum limit of loan under PMEGP in first and 2nd dose? (Ans. First dose at Project cost of
Rs.25.00 Lacs for manufacturing and Rs.10.00 Lacs for service less 10% margin for General category or 5%
margin for special category. Second dose maximum loan @ and Rs.100.00 Lacs for manufacturing and Rs.25.00
Lacs for service sector.)
13. Which is the national level Nodal agency for PMEGP? (Ans. KVIC)
14. What is the maximum loan amount under Agriculture infrastructure project for inclusion under Priority Sector?
(Ans. ₹100 crore per borrower from the banking system)
15. Who formulated BASEL Committee on Banking Supervisions? (Ans. Central bank Governors of the G-10
countries in the year 1974)
16. Loan to small farmer for purchase of agricultural land is classified under which category of Priority Sector
Lending? (Ans. Agriculture Farm Credit)
17. Amount of Revolving Fund assistance to SHGs under DAY-NRLM is _____ (Ans. Minimum of ₹10, 000 and up
to a maximum of ₹15,000 per SHG)
18. Rearing/Farming of Fresh Water Fishes is called: (Ans. Aquaculture)
19. At least what percentage of loans granted to SHGs under NRLM to be used primarily for income generating
productive purposes? (Ans. 50% of loans above ₹2 lakh, 75% of loans above ₹4 lakh and 85% of loans above
₹6 lakh)
20. Interest in agriculture advances is to be charged on: yearly basis
21. Apiculture relates to which of the following:bee-keeping
22. As per the recent RBI guidelines, LTV ratio for Gold Loan has been increased to 90% upto the period of
31.03.2021. This norm is applicable to? All type of Gold Loans except for those sanctioned for
Agriculture Purpose.
MSME
1. The applicable risk weight the banks need to charge on the advances sanctioned under Emergency Credit Line
Guarantee Scheme (ECLGS) is ? Zero percent
2. As per the amended definition of the MSME’s, a Small service enterprise is the one?
a. has investment in equipments of < Rs.10 cr& Annual Turnover < 50 crore.
3. Recently Government of India has announced Interest subsidy of 2% for Mudra Loan Borrowers. Which category of
Mudra Borrowers are eligible under this scheme? Shishu
Guarantee Scheme For Subordinate Debt (CGSSD)? Bank can decide and that rate should be linked to
an external benchmark.
5. Which of these following Ministry of Government of India has recently launched ‘Champions’ Portal which is a
single window solution to the most of the issues faced by MSMEs in India? Ministry of Micro, Small and
Medium Enterprises
6. Under Emergency Credit Line Guarantee Scheme (ECLGS) a Scheduled commercial bank can sanctioned
the facility in the form of? Working Capital Term Loan
7. The maximum credit limit the banks can sanction to the promoters of MSME units under Subordinate Debt
scheme for Stressed MSMEs under Credit Guarantee Scheme announced in AtmaNirbhar Package is? Rs. 75 lakhs
8. Recently RBI has permitted the banks to consider the loan sanctioned in Subordinate Debt scheme for Stressed
MSMEs under Credit Guarantee Scheme during their debt - equity calculation as? Equity/Quasi Equity 9. As per
the revised MSME definition, Which has Investment in Plant & Machinery of less than Rs. 50 crore and Turn
over of less than 250 crore.
10. Who is the majority shareholder of CRISIL? (Ans. Standard & Poor's)
11. Who are the eligible candidates for finance under GECL Scheme? (Ans. All GST registered except (wherever
applicable) Business Enterprises including individual borrowers (existing customers) whose accounts are less than
60 days past due as on 29th February, 2020, with combined outstanding loans across all MLIs of up to Rs. 50
crores as on 29.2.2020 and having annual turnover not exceeding Rs.250 crore.)
12. What is the Full Form of TReDS ? (Ans. Trade Receivables e-Discounting System)
13. Loans granted to units in the KVI sector will be eligible for classification under: (Ans. Micro Enterprises under
MSME)
14. What is the maximum loan amount a MSME unit can apply through www.psbloansin59minutes.com? -5 crore
15. Which of the following is the nodal agency for managing the portal www.psbloansin59minutes.com? SIDBI 16.
In case of disputes related to online transactions, a customer can approach RBI ombudsman, if the grievance
remains unresolved for a period of more than? One month
FINANCIAL INCLUSION & GOVT. BUSINESS & SPONSORED SCHEMES

1. A person who is regular in filing of income tax returns from past 3 years. He withdraws cash of Rs. 60 lakh in a
financial year. The applicable rate of TDS on his cash withdrawl is? Nil
2. What is the eligible age group in respect of Atal Pension Yojna? 18-40 years
3. Financial literacy centres are eligible for funding support of maximum Rs. ___ per financial literacy camps?
Rs.15000
NPA & RECOVERY MANAGEMENT
1. BASEL-I guidelines published in which year? (Ans. 1988)
2. BASEL-II guidelines are published in which year? (Ans. June 2004)
3. What is the minimum capital requirement under BASEL-III guidelines and what is the minimum capital requirement
stipulated for Banks in India (Tier I + Tier-II excluding CCB)? (Ans. 8% and 9% respectively) 10. Who is
authorized to for setting business standards, rules and procedures for technical and business requirements for all
participants under Bharat Bill Payment System? (Ans. National Payments Corporation of India (NPCI))

4. Banks can open branches without RBI permission in Tier 3 to Tier 6 centres. These centres have population up to
___ as per census 2011: 49999
FOREIGN EXCHANGE & INTERNATIONAL TRADE
1. As per the amended finance bill, Non Resident Indian or PIO who is visiting and staying in India for a period of
120 days or more and has the Indian source of Income exceeding Rs. 15,00,000/-. For the taxation purposes he
will be treated as? Resident Indian
2. What is the applicable rate of Tax should be collected at source by the Authorized dealer, in case of the amount
remitted abroad by a resident account holder in a financial year under Liberalised remittance scheme exceeds Rs.
7 lakh for the purpose other than for loan repayment is? 5%
3. FX retail is related to? (Ans: An Online cplatform developed by Clearing Corporation of India Ltd which provides
for an anonymous and order driven dealing in the USD/INR currency pair for the retail customers of banks.) 4. What
is the maximum FX retail transaction limit? (Ans: USD 500,000)
5. A usance bill of exchange is presented by the payee to its drawee Mr. Narayan Dutt who accepts the same. It is
endorsed by the payee Mr. Sarwan Lal to Mr. Ramesh Kumar, who is a handicap. Looking into this fact, Mr. Sarwan
Lal also writes that in case of dishonour, he may not be given notice and would continue to be liable. Which of the
following kinds of endorsement has been made by Mr. Sarwan Lal: Facultative endorsement
6. What is the maximum amount that can be remitted outside India, from NRO account, representing sale proceeds of
the immovable property in India 1 million US $ per financial year.
7. A bank has an oversold position in foreign exchange on a particular day. It has to square its position at the end of
the day. The foreign exchange rates are increasing: the bank will incur loss
8. A kite flying transaction represents which of the following: when a bill is drawn without consideration by
seller of goods on buyer of good.
9. When a loan is given by a bank on the security of railway receipt (RR) or goods receipt (GR) issued by a transport
company, which type of charge is created pledge
10. Which of the following account can be opened by NRI, jointly with resident Indian ? Non-resident ordinary
account
11. A bank sold more foreign currency than it purchased during a particular day. The situation would be known as
short position
12. A person going abroad can carry, currency notes and coins as per following limits (which one is correct) a in
normal cases up to USD 3000 b in case of Iraq and Libya up to USD 5000 c Iran, Russia and CIS countries
without any ceiling all the above
13. If the bank is to square the oversold position and the rates of exchange are declining at that time, the bank:
gains
14. ‘LIBOR’ which is the most commonly used bench mark to price foreign currency borrowings will be discontinued
with effect from? 31st December 2021
15. Who among the following has been appointed as the first chairman of the International Financial Services Centre
Authority (IFSCA)? Mr. Injeti Srinivas
RETAIL BANKING
1. Green car loan is a product of which Bank, the Bank has introduced it first time in the country to finance
Electric vehicles? (Ans: SBI)
2. Repayment of Education loan interest can be shown for IT exemption under 80E for a maximum of how many
years? (Ans: 8 Years)
3. “Suraksha Aur Bharosa Dono” is the tagline of which company? (Ans: SBI General Insurance). 4. A uniform margin
of _____ is to be applied on all advances / financing of IPOs / issue of guarantees on behalf of share and
stockbrokers or on behalf of commodity brokers in favour of commodity exchanges viz. National Commodity &
Derivatives Exchange, Multi Commodity Exchange of India Ltd. & National Multi Commodity Exchange of India Ltd.
:50%
5. Risk Weightage on Consumer Credit/Credit Cards, for capital adequacy ratio purpose is100%

5. MODULE (A,B,C&D) BASED RECALLED MCQs
MODULE – A : ECONOMIC ANALYSIS (CAIIB 1- ABM )
ONE LINER QUESTION- ANSWER ON ECONOMIC SURVEY 2020-21 & BUDGET 2021-22
1. Who among the following introduced the detailed presentation of the annual Economic Survey 2021 to the
public? -Chief Economic Officer
2. What is the Real Growth Rate for FY21 as per the Survey? ) -7.7% MoSPI
3. The theme of the Economic Survey this year is?- COVID-19 warriors
4. India’s real GDP is projected to record how much growth in FY2021-2022? : 11.00% . 5. India’s nominal GDP is
projected to record how much growth in FY2021-2022 : 15.40% 6. What kind of economic recovery is India having
as per the Economic Survey 2020-21? - V-shaped 7. As per the Survey which state has been ranked the lowest
performer in cases of COVID 19 recovery and number of deaths? - Maharashtra
8. Which among the following states was an over- performer in the number of COVID-19 cases?: Uttar Pradesh
9. As per Economic Survey 2020-21, which state ranked highest when it came to accessing to bare necessities?:
Kerala
10. For Budget purpose, GDP growthhas been assumed at: Ans: 14% at current prices
11. Budget proposals are based on pillars :Ans: 6 pillars
12. For 2021-22, Revenue deficit isprojected at % of GDP : Ans: 5.1%
13. For 2021-22, effective revenue deficit is projected at % of GDP : Ans: 4.1%
14. For 2021-22, Fiscal deficit isprojected at % of GDP : Ans: 6.8%
15. For 2021-22, primary deficit isprojected at % of GDP : Ans: 3.1%
16. During 2021-22 banks willdisburse short term crop loans of : Ans: Rs.16500000 cr 17. SEBI Act, Depository Act
and Securities Contract Act shall bemerged in to : Ans: Securities Market Code 18. As per changes proposed for
DICGC Act, depositors will be able to have access to their funds in case of a bank in trouble, evenduring period :
Ans: Moratorium period
19. NBFCs with minimum asset sizeof Rs.___crores, the minimum loan size eligible for recovery SARFAESI Act, 2002
is to bereduced to : Ans: Rs.20 lakhs
20. Allocation to the RuralInfrastructure Development Fund shall be : Ans: Rs.40,000 crores. 21. Corpus of Micro
Irrigation Fund, (presently Rs.5,000 crores) to be enhanced to : Ans: Rs.10,000 crores. 22. Under Stand Up India for
SCs,STs, and women, margin moneyrequirement shall be reduced from 25% to : Ans: 15% 23. What is proposed to
beprivatized : Ans: 2 Public Sector Banks andOne Public Sector Insurer 24. Which large organization willbring its
public issue : Ans: LIC of India
25. Govt. additional contribution for capital of banks : Ans: Rs.20000 cr
26. Target for disinvestment :Ans: Rs.175000 cr
27. In insurance business FDI shallbe permitted up to : Ans: 74%
28. Bad Bank type organizations tobe created are : Ans: Asset Reconstruction Company (ARC) and Assets
Management Company (AMC)
29. Initial corpus of ARC / AMC shall be : Ans: Rs.10000 cr
30. For infrastructure finance new Development FinanceInstitution shall be created withan initial corpus of :
Ans: Rs.20000 cr
31. Business entities having min 95% transactions in digital modewill not required audit of accounts if turnover shall
be upto : Ans: Rs.10 cr
32. Senior citizen with age of need not file tax return for income from Pension and bank interest : Ans: 75 year or
above
33. Paid up capital limit of Smallcompanies shall be enhanced to : Ans: Rs.2 cr
34. Annual turnover limit for smallcompanies shall be enhanced to : Ans: Rs.20 cr
35. Interest on contribution aboveRs.in EPF will be taxable : Ans: Rs.250000
36. Tax exemption shall be availablefor maturity proceeds of ULIP with annual premium up to only w.e.f.
1.2.2021 :Ans: Rs.2.5 lac
37. Agriculture InfrastructureDevelopment Cess of Rs and shall be imposed on petroland diesel respectively with
affecting over all cost. : Ans: Rs.2.5 / litre Rs.4 / litre
38. Import duty on gold reduced from 12.5% to : : 7.5%
39. Sector which has been givenhighest allocation of funds : Ans: Defence
40. Which tax will have highestcontribution to tax revenue : Ans: GST
41. As per recommendations of 15th Finance Commission, the State will get ___ % of tax collections : Ans: 41% 42.
th
As per recommendations of 15 Finance Commission,central govt. fiscal deficit by 2025-26 should be: Ans: 4% of
GDP
43. According to Budget 2021, Real GDP in 2020-21 is estimated to contract by ______ : 7.7 PERCENT. 44. As per
Budget 2021, the Revised Estimates place fiscal and revenue deficits in 2020-21 at _____and_____ : 9.5% OF GDP
AND 7.5% OF GDP RESPECTIVELY.
45. Positive growth in real GVA in agriculture & allied sectors in 2020- 21 as per budget is ______ percent : 3.4%
46. The nominal growth of the economy in the financial year 2021- 22 is expected to be _______ in budget 2021 :
14.4 PERCENT
47. As per Budget 2021, Gross Value Added (GVA) at constant (2011-12) basic prices in 2020-21 is estimated to
contract by ______ : 7.2 PERCENT
48. The government aims to steadily reduce fiscal deficit by 2025- 26 to _______ : 4.5% OF GDP. 49. Gross Non
Performing Assets (NPAs) in Indian banks at endSeptember 2020 was ______ percent : 7.5% 50. The government
proposes to spend Rs. 34,83,236 crore in 2021-22, ______ higher than the budget estimate. : 13%
51. The receipts (other than borrowings) are expected to be Rs 19,76,424 crore in 2021-22, which is _____ higher
than the revised estimates of 2020-21 : 23%
52. Nominal GDP is expected to grow at _____ (i.e., real growth plus inflation) in 2021-22. : 14.4% 53. Revenue
deficit is targeted at _____ of GDP in 2021-22, which is lower than the revised estimate of 7.5% in 2020-21 :
5.1%
54. Fiscal deficit is targeted at ____ of GDP in 2021-22, down from the revised estimate of 9.5% in 2020-21 : 6.8%
55. In order to ease compliance burden of direct tax on senior citizen pensioners who are of ____ of age or above,
the budget has proposed to exempt them from the requirement of filing of income tax if the full amount of tax
payable has been deducted by the paying bank : 75 YEARS
56. The time-limit for re-opening of direct tax assessment is being reduced to ______ from the current 6 years from
the end of the relevant assessment year : 3 YEARS
57. The Budget has proposed reduction in the time limits for general assessment or processing of income tax return
by _____ months and also for filing of returns. : THREE
58. Dispute Resolution Committee is proposed to be constituted where a taxpayer having taxable income upto Rs.
____ and disputed income upto Rs. 10 lakh shall be eligible to approach the Committee : 50 LAKH 59. A ______
Tribunal Centre shall be established and all the communication between the Tribunal and the appellant shall be
made electronically: NATIONAL FACELESS INCOME TAX APPELLATE
60. The Budget has proposed to provide tax neutrality for the transition of Urban Cooperative Bank (UCB) to ______
: SMALL FINANCE BANK (SFB)
61. In case of purchase of affordable house, the eligibility period for claim of additional deduction for interest of Rs.
_______ paid for loan taken has been extended to 31st March 2022 : 1.5 LAKH
62. The Budget has extended the eligibility period of claiming Capital Gains exemption for investment made in the
Start-ups by one more year to______ : 31ST MARCH, 2022
63. The Budget has increased the limit for tax audit for persons who are undertaking 95% of their transactions
digitally from Rs. 5 crore to _____ : RS. 10 CRORE
64. In order to promote strategic disinvestment of PSU, the Budget has proposed relaxation of the condition
regarding carry forward of loss for disinvested PSU in case of _______ : AMALGAMATION
65. In order to allow funding of infrastructure, the Budget has proposed to make ________ issued by notified IDF
eligible for tax benefit : ZERO COUPON BONDS
66. For rationalization of the taxation of ULIP, the Budget has proposed to allow tax exemption for maturity
proceeds of the ULIP having annual premium up to ______ : RS. 2.5 LAKH
67. The Budget has clarified that no depreciation on Goodwill shall be allowed. However, the deduction for the
amount paid for acquiring Goodwill shall be allowed on ________ : SALE OF GOODWILL
68. The penalty proceedings initiated for fake invoice/sham transactions of more than _____ shall be eligible for
provisional attachment of assets : 2 CRORE
69. The Budget has proposed an increase in the limit on annual receipts for small trusts from present Rs. 1 crore to
Rs. _______ for non-applicability of various compliances like approval etc : 5 CRORE
70. As per budget 2021, in order to provide certainty, charitable trusts shall not be permitted to claim carry forward of
______: LOSS
71. A person in whose case TDS/TCS of Rs. 50,000 or more has been made for the past two years and who has not

filed return of income, the rate of TDS/TCS shall be at the double of the specified rate or____ percent,
whichever is higher: 5%
72. In order to widen the scope of TDS, the Budget has proposed to levy a TDS of 0.1% on a purchase
transaction exceeding Rs._____ in a year. : 50 LAKH
73. To ensure faster disposal of cases, the Budget has proposed to replace the Authority for Advance Rulings with a
________ : BOARD FOR ADVANCE RULINGS
74. As per budget 2021, in order to provide relief to employees, it is proposed to provide tax exemption to the
amount given to an employee in lieu of ____ subject to incurring of specified expenditure. : LTC 75. In order to
incentivise home buyers and real estate developers, the Budget has proposed to increase tax relief from 10% to
____ for the specified primary sale of residential units : 20%
76. Restriction imposed on tax exemption for the interest income earned on the employees’ contribution to various
provident funds to the annual contribution of Rs. _______ : 2.5 LAKH
77. In order to promote strategic disinvestment, the Budget has proposed to deem the transfer of assets by the PSU
to the resulting company as ______ : TAX NEUTRAL DEMERGER
78. The Budget has expressly clarified that transaction taxable under income-tax are ______ for equalisation levy. :
NOT LIABLE
79. The Budget has proposed empowering the Board to relax the rule relating to ________ return for a class of
taxpayers and to align due dates of return for certain taxpayers : DEFECTIVE
80. The Budget has proposed Rs. 64,180 crore outlay for a period of 6 years for a new centrally sponsored scheme to
be launched named _________ : AATMANIRBHAR SWASTH BHARAT YOJANA
81. The Budget has proposed an outlay of _______ for Jal Jeevan Mission (Urban) for a period of 5 years :
RS. 2,87,000 CRORE
82. To tackle air pollution, for 42 urban centers with a million-plus population the budget has allocated an amount of
________: RS. 2,217 CRORE
83. The Budget has allocated Rs. 1,41,678 crore for a period of 5 years for _______ mission. : URBAN
SWACHH BHARAT MISSION 2.0
84. As per Budget 2021, __________ amount allocated for COVID-19 vaccine: RS. 35,000 CRORE 85. Rs. 1.97
lakh crore has been allocated in budget for a period of next 5 years for _______ schemes in 13 Sectors to create
and nurture manufacturing global champions : PRODUCTION LINKED INCENTIVE (PLI) 86. ________ scheme
has been launched where 7 Textile Parks to be established over 3 years :MEGA INVESTMENT TEXTILES PARKS
(MITRA) SCHEME
87. _________ amount allocated in budget 2021 to set up and capitalize a Development Financial Institution (DFI) :
RS. 20,000 CRORE
88. Rs. 5.54 lakh crore capital expenditure in budget 2021-22 projected a sharp increase of ________ percent :
34.5%
89. As per Budget 2021, more than 13,000 km length of roads worth Rs. 3.3 lakh crore awarded for construction
under ___________ : BHARATMALA PARIYOJANA
90. Exports and imports of goods and services in budget 2020-21 are estimated to contract at ___and___ : 8.3% AND
20.5% RESPECTIVELY.
91. As per Budget 2021, over Rs. 34,000 crore to be allocated for 1300 km of NHs to be undertaken in next 3 years in
______ state : ASSAM
92. Rs. 1,10,055 crore outlay allocated for ______ in budget 2021 : RAILWAY INFRASTRUCTURE 93. National
Rail Plan for India - to create a ‘future ready’ Railway system by _____ year : 2030 94. _______and _____
technologies to provide metro rail systems at much lesser cost with similar experience. : ‘METROLITE’ AND
‘METRONEO’
95. _____ amount allocated in budget 2021 over 5 years for a revamped, reforms-based and result-linked new power
distribution sector scheme : RS. 3,05,984 CRORE
96. ______ to be notified as a regulator of Gold Exchanges and Warehousing Development. : SECURITIES
AND EXCHANGE BOARD OF INDIA (SEBI)
97. As per Budget 2021, capital infusion of _____ to Solar Energy Corporation of India : RS. 1,000 CRORE 98.
As per Budget 2021, increase in the permissible FDI limit from 49% to ____ percent : 74% 99. _______ amount
allocated in budget in 2021-22 to earmark further consolidation of the financial capacity of PSBs : RS. 20,000
CRORE
100. Deposit insurance increased to Rs. 5 lakh for bank depositors from an earlier amount of ______ in budget
2021: RS. 1 LAKH
101. Minimum loan size eligible for debt recovery for NBFCs under the SARFAESI Act proposed to be reduced to :
RS. 20 LAKH
102. The budget 2021 has proposed, Easing Compliance requirement of Small companies by increasing their
thresholds for Paid up capital to not exceeding Rs.____ crore and turnover not exceeding Rs. ____ crore: 2 ; 20.
103. Among the top 13 ministries with the highest allocations, the highest annual increase over 2019-20 is observed
in the Ministry of _______ : JAL SHAKTI (64%)
104. The budget 2021 has proposed to Reduce the residency limit for an Indian citizen to set up One Person
Companies from 182 days to _____ : 120 DAYS
105. Estimated receipts from disinvestment in budget estimate 2020-21 is ________ : RS.1,75,000 CRORE 106. As
per budget 2021, Agricultural credit target has been enhanced in FY22 to _______ : RS. 16.5 LAKH CRORE 107.
Rural Infrastructure Development Fund to be enhanced to Rs. 40,000 cr from an earlier amount of ___ : RS. 30,000
CR.
108. The budget 2021 has proposed _____ additional outlay for PM Awaas Yojana (PMAY) : RS. 18,000 CRORES
109. According to the Monetary Policy Committee since March 2020 the Reserve Bank has cut the repo rate by __ :
115 BPS
110. Under ______ Scheme for Scheduled Castes (SC), Scheduled Tribes (ST) and women - Margin money
requirement reduced to 15% : STAND-UP INDIA SCHEME
111. Budget has proposed that there will be no exemption on interest, if Provident Fund (PF) contribution is more than
_______ : RS. 2.5 LAKH
112. External Sector Merchandise exports (customs basis) during 2020-21 (April-December), stood at ___ : US$
200.8 BILLION
113. PSLV-CS51 to be launched by New Space India Limited (NSIL) carrying Brazil’s _____ satellite and some Indian
satellites : AMAZONIA SATELLITE
114. Foreign exchange reserves as on December 25, 2020 rose to ______ : US$ 580.8 BILLION 115.
______ amount allocated over 5 years in budget 2021 for Deep Ocean Mission survey exploration and
conservation of deep sea biodiversity : RS. 4,000 CRORE
116. ______ Mission to make governance and policy related knowledge available in major Indian languages :
NATIONAL LANGUAGE TRANSLATION MISSION (NTLM)
117. ______ amount allocated in budget 2021 for first digital census in the history of India : RS. 3,768 CRORE •
The Budget Estimate for major subsidies in 2021-22 pegged at _______ : RS. 3,35,361 CRORE 118. The budget
has proposed to allocate Rs. 1,000 crore for the welfare of Tea workers especially women and their children in
_____ and _____ : ASSAM AND WEST BENGAL
119. _____ scheme has been launched for beneficiaries to claim rations anywhere in the country : ‘ONE NATION
ONE RATION CARD’
120. Over _____ crore for the Department of Economic Affairs to provide for projects / programmes /
departments projecting good progress on Capital Expenditure : RS. 44,000
121. Rs. 5 lakh crore lending portfolio to be created under the proposed DFI in _____ years : 3 YEARS 122. As per
budget 2021, Capital infusion of Rs. ____ to Indian Renewable Energy Development Agency : RS. 1,500 CRORE
123. As per budget 2021, MSP will bet minimum __ times the cost of production across all commodities :1.5 TIMES
124. _____ scheme extended to 22 perishable products, to boost value addition in agri & allied products:
‘OPERATION GREEN’
125. Dispute Resolution Committee to be set up for taxpayers with taxable income up to ____ and disputed
income up to _______ : RS. 50 LAKH AND RS. 10 LAKH RESPECTIVELY
126. Budget has proposed that _____ more mandis to be integrated with e-NAM to bring transparency and
competitiveness : 1,000
127. Merchandise trade deficit improved from US$ 125.9 billion in 2019-20 to US$ _____ in 2020-21 (April-Dec.) :
57.5 BILLION
128. As per budget 2021, the Micro Irrigation Fund doubles to an amount of ____ : RS. 10,000 CRORE. 129. In case
of serious tax evasion, with evidence of concealment of income of Rs. 50 lakh or more with approval of the Principal
Chief Commissioner, assessment can be re-opened up to _____ : 10 YEARS
TEST YOURSELF (BASED RECALLED QUESTIONS) – 01
1) Micro-economic theory studies how an economy determines.

a)The price of goods b)The price of services c)The price of economic resources d) All of the above. 2) A producer's
positively sloped supply curve for a commodity represents. a)In one sense a maximum and in another sense a
minimum boundary of the.producer's intentions. b)A maximum boundary of the producer's intentions.c)A minimum
boundary of the producer's intentions. d)None of the above.
3) The theory of distribution refers to: a)The distribution of income among various factors of the production. b)The

distribution of income among different individuals in the economy. c)Both of the above d)None of these 4) Interest is
reward for parting with liquidity according to: a) B. Ohlin b) Von Haberler c) J.M. Keynes d) Alfred Marshall 5)
Economics may be divided into macro-economics and micro-economics. Among the subject matter of micro
economics may be found: a)The nature of value in exchange.b)The size of a country's national income c)The
allocation of resources among competing uses d) The relative prices of specific services.
6) The statement that'economics is positive and not normative' means:
a)That economics can be used to prove that capitalism is better than socialism.b)That economics tells us what kind
of economic behaviour or policy is wholesome and what evil c)That economics tells policy makers which alternative
to choose from among several efficient ones. d)That economics can only indicate consequences of policies,
choices, or conditions. 7) Which of the following statements is incorrect? a)Micro-economics is primarily concerned
with the problem of what, how and for whom to produce.b)Micro-economics is primarily concerned with the
behaviour of individual decision making units when at equilibrium.c)MiCro-economics is primarily concerned with the
time path and process by which one equilibrium position evolves into another d)Micro-economics is primarily
concerned with comparative static rather dynamics. 8) Economic laws may be described as: a)Principles derived
from analysis of price input / output determination. b)Generations concerning the economic behaviour of individuals
and institutions.c)Forecasts in quantitative terms of the economic development of society.d)Expression of the basic
features of competition.
9) The main difference between positive economics and normative economics is that the former. a)Discusses the
ethical implications of its laws.b)Concerns itself only with hypotheses which can generally be tested.c) Is based on
the value judgements of economists.d)Considers carefully the political significance of its laws for a democratic
society. 10) Adam Singh advocates: a) Laissez-faireb) Division of Labour c) Both of the above d) None of the above
11) The term'consumer goods' is used by economists to refer to: a) Goods produced for consumers in a free market
only.b) Goods other than free goods, whose use directly satisfies consumers wants.c) Goods produced by
consumers in return for a wage.d) Goods which are used by consumers in order to earn their living
12) The basic characteristic of a Capitalistic economy is: a) Full employment b) The private ownership of the
means of production.c) An absence of monopoly d) Large-scale production in primary industries.
13) In a free capitalist society the allocation of the factors of production among the various productive
activities is determined by: a) The pattern of consumer's spending b) The traditional employment of Locals
c) Decisions of the Government d) The wealth of the entrepreneurs.
14) Who believed that an automatic equilibrating mechanism of the perfectly competitive market, known as'invisible
hand' tended to maximize national wealth: a) Adam Smith b) Keynes c) J.B. Say d) None of the above 15) The
fundamental economic problem being faced is one of: a) Consumer's choice b) Decision-making by the governmentc)
'Multiplicity of wants and scarcity of resources.d) Shortage of labour.
16) Which one of the following is not directly the concern of the economist? a) Aid to underdeveloped countries b) The
effect of an increase in Bank rate c) The choice between alternative sites for a factory d) The use of taxation to
discourage smoking of cigarettes.
17) The meaning of the word'economic' is most closely connected with the word: a) Free b) Scarce c) Unlimited d)
Restricted 18) Which of the following is not an economic problem?
a) Deciding between extra paid work and extra leisure. b) Deciding between different ways of spending leisure
lime . c) ;:eciding on the level and form of personal saving d) Deciding between expenditure on one good and
another. 19) Which one of the following statement is not true?
a) Exchange is one method of helping to solve the basic economic problem. b) The basic ecolomic problem is one of
choice.c) Choice is necessary because of Limited wants.d) The means to satisfy wants i.e., the factors of production,
are limited. 20) Who gave scarcity definition of economics? a) Adam Smith b) Robbins c) Keynes d) J.B. Say
21) Who is known as the Father of Economics? a) Keynes b) Ricardo c) Adam Smith d) J.S. Mill
22) Many of the basic problems of economics emerge from:
a) Unlimited resources b) Incompetent govt. c) The use of limited resources to satisfy human wants d)
Unlimited wants 23) The utility may be defined as: a) The power of a commodity to satisfy wants b) The desire
for a commodity c) The usefulness of a commodity d) The necessity of a commodity
24) The utility of a commodity is: a) Its expected social value b) Its relative scarcity c) The extent of its practical use
d) The degree of its fashion
25) Marginal utility curve of a given consumer is also his: a) Indifference curve b) Demand curve c) Supply curve
d) Total utility curve
26) The total utility is maximum when: a) MU is zero b) AU is the highest c) MU is the highest d) MU is equal to
AU 27) The law of diminishing marginal utility states that:
a) As more of a commodity is consumed total satisfaction diminishes.b) The more you have of a particular commodity
the less you want more of it. c) As more units of a commodity are produced the price of the commodity will fall d) The
consumption of further units of a commodity will bring a steady thcrease in the amount of satisfaction obtained. 28)
The law of diminishing returns or increasing cost will operate at an earlier level, in agriculture than in industry because:
a) More mechanization is applicable to agriculture b) Agriculture is an industry where land is used extensively
c) Less mechanization is applicable to agriculture. d) More labour is used in agriculture.
29) Opportunity costs are also known as: a) Spillover costs b) Alternative cost c) Social costs d) Money costs
30) An increase in the price‘of a commodity, other things remaining same, results in:
a) Increase in pricing b) Increases in quantity supplied c) Increase in demand d) Taxes
31) Supply remaining constant, if demand increases, price will a) Rise b) Remains constant c) Fluctuate d) Fall 32)
Perfect competition is said to exist if: a) There are homogenous products b) Each firm in the industry accepts the
market price because it has to accept it. c) Price is fixed not by a firm d) All of the above
33) Consumer's surplus is highest in case of: a) Luxuries b) Necessities c) Comforts d) Conventional necessities. 34)
A "Giffen Goods" is one for which, in response to a small change in price. a) A zero income effect is just outweighed
by a positive substitution effect. b) A negative income effect is just outweighed by a positive substitution effect. c) A
zero income effect is matched by a zero substitution effect. d) A negative income effect outweighed any'substitution
effect. 35) Which is correct?
a) An "increase of demand" is not the same thing as an "extension of demand". b) An "increase of demand is the
same thing as an "extension of demand". c) An increase of demand is just equal to the extension of demand. d) All
the above statements are wrong e) An increase of demand invariably reduces the extension of demand.
36) Demand means: a) The desire and willingness of an individual for all goods and services for his standard of living.
b) The desire, ability and willingness of an individual to purchase goods and services at a given time and price c)
Both A and B d) None of the above
37) The demand function for a commodity is defined as: a) Quantity demanded as a function of the goods, own
price, the price of the substitute and the buyer's income b) Price of Substitutes as a functions of the goods own
prices c)Quantity demanded as a function of tne price of other goods d) All the above
38) In the typical demand schedule, quantity demanded.
a) Varies directly with price.b) Varies proportionately with price c) Is independent of price d) Varies inversely with
price 39) Law of demand states that when:
a) Income rises demand rises.b) Price rises demand rises.c) Price falls demand falls.d) Price falls demand rises 40)
The law of demand indicates: a) The relationship between income and quantity demanded b) The relationship
between price of a commodity and price of ifs cubstitutes c) The relationship between price of two commodity.d) The
relationship between the price of commodity and the quantity demanded.
41) Which of the following conditions is required condition for the operation of law of demand? a) Price of
subStitute change,,,b) Income and Taste of consumer remains constant c) Production does not increase d)
Taste of the consumer change
42) Demand curve shows:
a) Inverse relationship between quiantitydemailed and its cost of production.b) Inverse relationship between the rate
of change of demand and price.c) Inverse relationship between the rate of change in demand and cost of production
at a given times. d) Direct relationship between the demand and the price of a commodity at a given time. 43) When
we say that a demand curve for a commodity slopes downwards to the right we mean: a) More of the commodity will
be demanded as income increase b) More of the commodity will be demanded as the price of the substitutes falls. c)
More of the commodity will be demanded as population rise.d) More of the commodity will be demanded as its own
price falls.
44) A fall in the price of a commodity leads to:
a) A shift in demand b) A fall in demand c) A fall in the consumers real income d) A rise in the consumers real income
45) An exceptional demand curve is one that slopes: a) Upward to the lift b) Upward to the right c) DoWnward to the
right d) Horizontal
46) Which one is not an exception to the Law of Demand? a) Ignoranceb) Inferior good c) Normal good d)
Articles of Distinction
47) Demand for a commodity is elastic when has:
a) Only one use b) Many Use c) Uses, which cannot be postponed d) Uses very essential for the
consumer 48) Which of the following pairs of commodities is an example of substitute:
a) Coffee and milk b) Mustard oil and coconut oil c) Diamond and cow d) Pen and ink 49) For most customers apples
and oranges are substitute goods. Therefore, we would expect a rise in the price of apples to lead to: a) A rightward
shift in the supply curve of oranges b) A leftward shift in the supply curve of oranges. c) A fall in the price of oranges
d) An upward change in the demand curve of oranges.
50) A change in climate ,conditions resulting in hot weather, price remaining the same, would cause a consumer of
cold drinks: a) To move to a lower curve b) To move lower down the demand curve c) To move to a higher demand
curve d) To move up the same demand curve
51) When an individual's income falls (while everything else remains the same) his demand for an inferior
goods: a) Increase b) Remaining unchanged c) We cannot say without additional information d)
Decrease
52) A fall in the price of a commodity whose demand curve is a rectangular hyperbola causes total expenditure
on the commodity to: a) Remain unchanged b) Increasec) Decrease d) Any of the above
53) The relationship between demand for a commodity and price, ceteris paribus, is:
%a) Negative b) Positivec) Non-negative d) Non-positive
54) Other things being equal a decrease in the quantity supplied to the market at given prices leads to: a) A
higher price and a contraction of demand b) A higher price and an expansion of demand. c) A higher price and
an expansion of demand d) A lower price and a contraction of demand.
55) Law of demand explains: a) Quantitative relationship between price and demand b) Qualitative relationship
between price and demand c) Relationship between demand and supply d) Rate of change in price and demand
56) We can say with certainty that when the demand for TVs increases in the long run, prices:
a) Will go down b) Will go up c) Change proportionately d) Cannot be predicted with the knowledge of elasticity of
demand 57) In the normal demand schedule, quantity demanded:
a) Varies directly with price b) Is independent of price c) Varies inversely with price d) Varies proportionately with
price 58) An example of derived demand is demand for: a) Pen and ink b) Wool and mutton c) Petrol and Car d)
None of the above
59) By increase in demand we mean: a) Movement upwards on a demand curve b) Movement downwards on
demand curve c) Shifting upwards of a demand curve d) None of these
60) Law of demand operates because of
a) Price changes b) The principle of different income c) Changes in advertisement expenses d) None of
the above 61) Multiple uses of a commodity will make the demand go up when:
a) Price increases b) Price remains the samec) Price falls down d) None of the above
62) Status symbol goods are: a) Veblen goods b) Exception to law of demand c) Goods of conspicuous consumption
d) ALL OF THE ABOVE
63) Price - demand relationship in the case of Giffen goods is: a) Inverse b) Direct c) Absent d) None of the above 64)
The downward sloping demand curve may be partly explained by the "income effect" which refers to: a) People's
tendency to save more as their real incomes fall in the short period. b) An increase or decrease in the amount of a
good purchased because of a price-induced change in the purchasing power of a fixed income. c) Changes in the
relative importance of good purchased because of changes in the con imunity's tastes resulting from adverting. d)
Changes in the distribution of income in a community.
65) The demand curve for a commodity is generally drawn on the assumption that:
a) The commodity has no substitutes b) Tastes, income and aii other prices remain constant. c) The average
household consist of two persons d) Purchases of the commodity are made by a free market.
66) A fall in the price of a commodity leads to:
a) A shift in demand b) A fall in demand c) A rise in consumer's real income d) A fall in the consumer's real
income. 67) In the case of Giffin good like Bajra a fall in its price tends to:
a) Make the demand remain constant b) Reduce the demand c)Increase the demand d)Change demand in an
abnormal way. 68) Which of the following pairs of commodities is an example of substitutes:
a) Coffee and milk b) Diamond and cow c) Pen and ink d) Mustard oil and coconut oil.
69) For most consumers apples and oranges are substitute goods. Therefore, we would expect a rise in the price of
apples to lead to: a) A rightward shift in the demand curve of oranges b) A leftward shift in the supply curve of apples
c) A downward change in the demand curve of oranges d) A fall in the price of oranges
70) A change in climatic conditions resulting in hot weather, price remaining the same, would cause a consumer of
cold drink: a) To move to a higher demand curve b) To move up the same demand curve c) To move lower down the
curve d) To move to a lower demand curve.
71) If two goods are complementary, this means that a rise in the price of one commodity will induce: a) An upward
shift in demand for the other commodity b) Arise in the price of the other commodity c) A downward shift in demand
for other commodity d) No shift in demand for the other commodity.
72) If more is demanded at the same price or same quantity at a higher price, this fact of demand is known as:
Extension of demand b) Increase of demand c) Contraction of demand d) Decrease of demand. 73) Other things
being equal a decrease in demand can be caused by: a. rise in the price of the commodity b) A rise in the income of
the consumer c) A fall in the price of the commodity d) A fall in the income of the consumer 74) An increase in
demand can result from: a) A decline in market price b) An increase in income c) A reduction in the price of
substitutes d) An increase in the price of complementary goods e) All the above
75) Which of the following circumstances would be likely to bring about a change in the demand schedule for a
product? a) A fall in the price of the product b) An increase in the number of potential consumers c) A new method
of producing the product d) An increase in the quantity produced. e) Both a &b
76) If the price of good A affects the demand for good B, then: a) A is a substitute for B b) B is complement of A c)
Changes in the price of A will cause movement along the demand schedule for A d) Changes in the price of B will not
change the demand
for A. e) Changes in the price of A will shift or change the demand for B.
77) Cross demand is the change in the quantity demanded of a given commodity in response to the: a) Change
in the utility of another commodity b) Change in the price of another commodity c) Change in the nature of
another commodity d) Change in the size of another commodity.
78) The law of demand states that: a) Demand increases with increase in income b) When income and prices
rise. the demand also rises c) When income and prices rise. the demand also rises d) When price increases,
demand increases 79) A consumer's equilibrium choice or position is one at which:
a) His savings are maximised b) His assets are maximised c) His satisfaction is maximum d) Price of goods is
maximised 80) For most consumers, milk and tea are substitute goods. Therefore, we should expect a rise in price of
milk to lead to: a) A rightward shift in the supply curve of tea. b) A leftward shift in the supply curve of tea. c) A fall in
the price of tea. d) An upward shift in the demand curve for tea.
81) Other things being equal, a fall I contraction in demand can be caused by a: a) Rise in prices of the substitute a)
Rise in prices of the substitute b) Rise in prices of the substitute c) Rise in the income of the consumer d) Rise in the
price of the commodity
82) The demand for a good is elastic if:
a) The demand for that good increases when price falls b) A decrease in price results in a decrease in total
expenditure c) The quantity demanded increases less than proportionately with the decrease in price level
83) A rightwards shifts in supply schedule indicates:
a) A decrease in Supply b) A decrease in quantity supply c)An increase in quantity supply d) An increase in
supply. 84) A rightwards shift in supply curve indicates:
a) A decrease in supply b) An increase in quantity supplied c) An increase in supply d) None of
the above 85) A supply curve will generally take an upwardsslopin9 form left to right because:
a) Market price is normally above total costs of production. b) Consumers' income tend to increase in the long
period. c) Producers' costs tend 'to increase as their output expands d) Supply of most goods is essentially a
short-term phenomenon. 86) Other things being equal an increase in supply can cause by:
a) A rise in the price of the commodity b) An improvement in the techniques of production c) A rise in the income
of the consumer d) An increase in the income of the seller.
87) The shift of the supply curve for a commodity to the left may indicate, other things being equal, that: a) Shares in
the producing firms are in great demand on the Stock Exchange. b) Producers of the commodity wish to make and
sell less at same price. c) Prices raw materials used in the production of the commodity have fallen. d) Wages paid to
the producers' employees have fallen.
88) Ceteris paribus, a decrease in quantity supplied of a commodity can be caused by:
a) A fall in its price b) Fall in income c) Rise in price d) Fall in raw material
89) The supply schedule for a commodity is usually assumed to be directly open to influence by all the following
except: a) The quantity demanded b) The prices of the factors of production c) The costs of production d) The prices
of other goods 90) Which of the following could explain why the supply curve for a commodity slopes downwards? a)
Producers do not like increasing production. b) Producers have to lower price to induce consumers to buy more c)
Costs fall as production increases d) Diminishing marginal utility is in operation
91) "Free Trade Area" denotes: a) Pitlicy of Laissez faire b) A group of countries which have decided to impose no
duties of any kind on imports from other members of the group c) Free Exports & Imports d) All the above 92)
Temporary control of inflation can be effected by:
a) Lowering Bank Rate b) Purchasing of securities by RBI c) Restraint on the growth of money supply d) None of
these 93) The term "hyper-inflation" is used to denote: a) Creeping inflation b) Step by step inflation c) A "Runaway" or
"galloping" inflationary situation where the monetary unit becomes almost worthless d) None of these
. 94) In calculating a country's GNP at market prices one of the following is not included:
a) Depreciation b) Net factor income from abroad c) Net indirect taxes d) Transfer Payment
95) Indian Economy can be best described as:
a) Developed economy b) Undeveloped economy c) Developing economy d) Underdeveloped
96) The term "balance of trade" means: a) Difference between exports & imports b) Net Exports including
merchandise c) The difference between the cost of the imports and exports of a country. d) a and c
97) The open market operations refer to the sale and purchase by the RBI of:
a) Foreign exchange b) Gold c) Government securities d) All c' the above
98) At full employment level, which of the following would be most likely to lead to inflation?
a) A fall in taxation with no changes in gevemment expenditure b) An increase in productivity without any increase in
wages c) A fall in investment with no change in prosperity to consumer d) A rise in the prosperity to save with no
change in investment
99) Deflation is: a) Deficit budget b) Reduction in taxation c) Contraction in volume of money or credit that
results in a decline of price level d) Increase in public expenditure
100) Bank rate means: a) Interest rate charged by moneylenders, b) Interest rate charged by the scheduled banks c)
Rate of profit of the banking institution d) The official rate of interest charged by the central bank of the country
Micro-economic theory studies how an economy determines.
ANSWER
1 D 2 A 3 A 4 C 5 D 6 D 7 A 8 B 9 B 10 C
11 B 12 B 13 A 14 C 15 C 16 C 17 C 18 B 19 C 20 B
21 C 22 C 23 A 24 B 25 B 26 A 27 B 28 B 29 B 30 B
31 A 32 D 33 B 34 B 35 A 36 B 37 A 38 D 39 D 40 D
41 B 42 B 43 D 44 D 45 B 46 C 47 B 48 B 49 D 50 C
51 D 52 A 53 A 54 D 55 C 56 D 57 C 58 D 59 C 60 A
61 C 62 D 63 B 64 B 65 B 66 C 67 B 68 D 69 A 70 A
71 C 72 B 73 D 74 B 75 E 76 E 77 B 78 C 79 C 80 D
81 D 82 C 83 D 84 C 85 C 86 D 87 B 88 A 89 A 90 C
91 B 92 C 93 C 94 D 95 C 96 D 97 D 98 A 99 C 100 D
TEST YOURSELF (BASED RECALLED QUESTIONS) – 02
1) In the Keynes model above, which is independent:

a) Investment b) Consumption c) National income d) Consumption and investment
2) How many motives for demanding money has been given by Keynes: a) 1 b) 2 c) 3 d) 4 3) Recession is
associated with fall in: a) Demand b) Supply c) Disinvestment d) Investment 4) Devaluation means: a) Fall in
Marginal utility of Money b) Fall in printing of currency c) Risk in black money d) Fall in the value of money in terms
of foreign currency
5) Acute inflationary situation: a) Makes savings in the form of bank deposits less attractive b) Makes savings more
attractive c) Arises due to liquidity trap d) All the above
6) Inflation means: a) Increase in price b) Decrease in value of money c) Boom d) All of the above 7) The problem of
unemployment in rural areas is mainly due to: a)Seasonal and under employment b) Frictional unemployment c)
Structural unemployment d) Technical Lriernpleyrnent
8) NNP for a given year can be defined as: a) Market value of final goods only b) The market value of all final
goods and services c) The market value of all final services only d) None of the above
9) LiqUidity preference is the term, which is used to refer to: a) The Reserve Bank of India's shareholdings in
other financial institutions b) The extent to which investors prefer to keep their assets in money c) The
community's preference for a gold-backed currency d) An inducement to save.
10) Which of the following are among the major determinants of the interest rate in the Keynesian theory? a)
People's desire to hold money and to keep their wealth in liquid form b) The available stock of money c) The
intensity of speculation on the stock exchange d) The value of gold and silver on the world's markets 11) The
famous book written by J.M. Keynes is entitled: a) Principles of Economics b) Law of Markets c) The General
Theory of Employment, Interest and Money d)None of the above.
12) To a layman, investment means putting his money in a financial asset like bonds, fixed deposit etc. What does it
mean to an economist: a) Purchase of machines b) Stock of durable goods c) Purchase of real capital assets d) All of
the above
13) The liquidity preference arises due to: a) Transaction Motive b) Precautionary Motive c) Speculative Motive d) All
of these
14) Liquidity trap is likely to result when: a) Rate of Interest at its lowest b) Rate of Interest at its highest c) No
change in supply of money d) When an increase in the supply of money fails to reduce the rate of interest 15) Which
theory is called the Neo-Classical theory of rate of interest?
a) Risk Theory b) Liquidity Preference Theory c) a and b d) Loanable Funds Theory.
16) The agency estimating the National Income of India is:
a) Reserve Bank of India b) Planning Commission c) Ministry of Finance d) Central Statistical Organisation
17) The goals of monetary policy do not include a) Maximum output b) Full ernploymeot c) Price stability ,d)
Maximum tax revenue
18) Gross National Product (GNP) is: a) The total output of goods and services produced by the country's economy
b) The total domestic and foreign output claimed by residents of the country c) The sum of gross domestic
product and investment d) National income minus national expenditure
19) If an economy is in equilibrium at the point where plans to save and to invest are equal, then government
expenditure must be: a) Curtailed b) Equal to government income c) Increased d) None of the above 20) Which of
the following is correct regarding the gross domestic savings in India?
a) Contribution of corporate sector is largest b) Contribution of government sector is the largest c) Contribution of
household sector is the largest d) None of these
21) NNP (Net National Product) or National Income is the money value of
a) Final goods and services produced annually in the economy b) Annual service generation in the Economy c)
Tangible goods produced annually in the economy d) Tangible goods available in the economy 22) Which of the
following is included in the calculation of gross domestic product? a) Personal consumption expenditure b) Gross
domestic investment c) Purchase by the government d) All of the above 23) Gross National Product is greater than
gross domestic product when: a) NFI (from abroad) > 0 b) NFI < 0 c) NFI = 0,d) NFI = -1
24) Which of the following is deducted from gross national product in order to estimate net national product? a)
Depreciation b) compensation of employees c) expenditure on buildings d) expenditure on raw material 25)
Changes in the standard of living in a country are best reflected in changes in the: a) Social Welfare b)
Economic Welfare c) Per capita income at rent prices d) Per capital income at constant prices 26) Whicl: is
the primary indicator to recognise a country's rate of economic growth? a) Increase inter per capita income b)
Setting of more industries c) Rate of growth in national income More exports 27) NationalIncome is based on: a)
Total Production x prices b) Rent + wages + Interest,+ Profit c) Domestic Income + NFI d) The sum of all factor
incomes e) All the above
28) Net National Production excludes:
a) Gross Investment b) Netinvestment c) Foreign Investment d) Replacement investment 29) Here are four
statements about various national income / expenditure I product relationships. Which one of the following is true:
a) GNP less NIT = NNP b) GNP less NFI = NNP c) GNPplus depreciation = NNP d) GNP less depreciation
allowances = NNP
30) The term GDP incorporates the economic activity: a) Taking place within the geographical boundary of the
country b) Within the land territorial c)Within water territorial d) Within air space
31) The term "Hindu rate of growth" refers to the 3.5% per annum growth rate achieved by the Indian economy
over the first six Five-Year Plans. The term was coined by a) Chakravaty b) J.N. Bhagwati c) Raj Krishna d) K.N.
Raj
32) Essential services owned and controlled by government is called:
a) Public monopoly b) Public utility c) Public Sector d) All of the above
33) Which of the following is not a fiscal monopoly?
a) Printing of currency b) Minting of coins c) Electricity supply d) None of the above 34) In a planned economy
the economic problem of what shall be produced is determined primarily by: a) Computers deciding what
consumers want. b) Direction by the oovernment. c) The pattern of consumer's spending d) The independent
decisions of entrepreneurs.
35) Development means economic growth plus: a) Price stability b) Social change c) Inflation d) Deflation
36) Which Plan recommended Zero-Based Budgeting (ZBB) as a step to control public expenditure? a) Fifth
Plan b) Sixth Plan c) Seventh Plan d) Eighth plan
37) All revenues received, loans raised and money received in repayment of loans by the Union Government go
into. a) Public Account of India b) Contingency Fund in India c) Consolidated fund in India d) none of the above 38)
Which one of the following is not directly the concern of the economist? .a) Choices relating to location of a steel
plant b) Bargaining between the workers' unions and the employers c) Effects of a change in money supply. d)
Imposition of tax to discourage cigarette smoking
39) Customs duties, export duties, corporation taxes, taxes on capital value of assets (excluding agricultural land of
individuals and companies) ate: a) Taxes and duties levied by the Centre but wholly appropriated by the States b)
Taxes and duties levied by the Centre but collected by the States c) Taxes and duties that accrue wholly to the
Union Government d) Taxes levied and collected by the Union but which are shared with the States. 40) "Funded
debt" means: a) All Government securities which are marketable on the stock exchange market b) All private
securities c) Shares of Companies d) KisanVikasPatras
41) "Annual Financial Statement" is another name of:
a) Balance of payment b) Fiscal Budget, c) Budgetd) Debt & Credit
42) "Multi-Currency Basket" means: a) Relationship with world bank b) Currency + coins c) Number of major
international currencies to which the external value of the Indian rupee is linked d) None of the above 43) Which
of the following is not a seiective credit control measure?
a) Rationalizing of Credit b) Open market observations c) Changes in the statutory liquidity ratio d) a and -c 44)
Public finance is said to be: a) Science of taxes and pending b) Science of demand and supply of money c)
Science of money and cost d) Science of income and expenditure
45) One of the distinctions between public finance and private finance is that:
a) The State adjusts "income to expenditure' while an individual adjusts "expenditure to income" b) The State
maximizes the general welfare of the public while an individual maximizes his own satisfaction c) The State has no
coercive powers while the individual has d) The State cannot borrow money while the individual can get loans 46) A
tax takes away a higher proportion of one's income rise is termed is:
a) Proportional Tax b) Indirect Tax c) Regressive Tax d) Progressive Tax
47 Co orate tax is imposed by:
a) Local Government b) Central Government c) State Government d) Both Central and State Government 48)
Which of the following are direct taxes? a) Gift tax b) Income tax c) Corporation tax d) All of the above 49) From
the following, which is not a direct tax?
a) Tax on wealth b) Tax on entertainment c) Tax income d) Tax on expenditure
50) An Direct tax is one where: a) Tax is levied always on property b) Points of impact and incidence are different c)
Tax is levied on wealth d) Points of impact and incidence are the same
51) The name of Indirect tax is: a) Income tax b) Sale tax c) Corporate tax d) Wealth tax 52) A regressive tax will tend
to redistribute income more: a) Equally b) Equitably c) Unequally d) Inequitably 53) Which of the following does not
grant any tax rebate?
a) Indira VikasPatra b) Public Provident Fund c) National Saving Scheme d) National SavingCertificate 54)
The Indian Income tax is:
a) Direct and progressive b) Obssessive c) Indirect and proportional d) Direct and proportional 55) Temporary tax
levied to obtain additional revenue is called: a) Fee b) Surcharge c) Cess d) Rate 56) Which of the following
taxes is/are levied by the Central Govt. and collected appropriated by the States? a) Estate Duty b) Stamp
Duties c) Passenger and goods tax d) Taxes on Newspaper
57) Taxes raised are credited into:
a) Consolidated Fund b) Public Accounts c) Contingency Accounts ,d) Private Accounts 58) Generally tax on
production are: a) Indirect taxes b) Both A and B c) Direct taxes d) None of the above
59) Tax on incomes is: a) Indirect b) Both A and B c) Direct d) None of the above 60)
Which of the following taxes is levied on services?
a) Personal tax b) Value added tax c) Capital gains tax d) Corporate tax
61) Income tax is raised by:a) Local Government b) Central Government c) Municipality d) State Government 62)
Sales tax is levied by: a) Local government b) State government c) Central government d) None of the above 63)
Union Excise Duties are a part of Central Government's:
a) Tax revenueb) Capital receipts c) Non-tax revenue d) None of the above
64) All taxes come under: a) Capital receipts b) Revenue receipts c) Public debt d) Both A and C 65) In
India, the States gets maximum income from:
a) Sales tax b) State Excise duties c) Land Revenue d) Agricultural Income tax
66) Progressive tax in India is: a) Income taxb) Wealth tax c) Corporate tax d) Sales tax 67) Which of the following
is a direct tax? a) Sales tax b) Entertainment tax c) Excise duty d) Estate duty 68) Which of the most important
source of revenue to the State Government of India ? a) Land Revenue b) Agriculture Income-tax c) State excise
duties d) Sales tax
69) A budget is the summary of:
a) Proper allocation of resources b) Income reallocation c) Resource reallocation d) Revenue and expenditure 70)
The budget deficit refers to the difference between all-revenue and expenditure of: a) Revenue account only b)
Increased government expenditure c) Capital account only d) Both revenue and capital accounts 71) Borrowing from
capital market is a part of: a) Revenue budget b) Capital budget c) Both a and b d) None 72) Revenue deficit in India
is: a) Negative b) Positive c) Zero d) None of 'he above 73) Capital deficit in India is: a) Positive b) Zero c) Negative
d) None of the above 74) Funds, which do not belong to the government, are?
a) Consolidated fund b) Contingency fund c) Public accounts d) None of the above 75) Which budget in India
is passed separately? a) Airlines b) Railways c) Defence d) Atomic energy 76) Which one of the following
cannot be influenced by budgetary policy? a) Power of private monopolies b) Balance of trade c) General
level of prices d) Regional distribution of employment
77) Which budget is measured in financial terms only?
a) Dominance budget b) Programme performance budget c) Zero-base budget d) Central budget 78) Deficit Financing
means: a) Government spends in excess of revenue and capital receipt to that budget deficit
in incurred which is financed by borrowing from the RBI. b) Difference of total expenditure & income revenue from all
sources. c) Difference in borrowing an internal and external resources d) Capital expenditure on items of public
construction, public enterprises and public borrowings.
79) The need for deficit financing in India arises due:
a) Failure of the government to mobilize the desired volume of surplus for the public sector plans. b) The rapidly
growing expenditure incurred by the government c) Neither A nor B. ' d) Both A and B 80) Deficit financing leads to: a)
Inflation b) Capital formation c) Neither A nor B ?d) Both A and B 81) Deficit financing means: a) Difference in
borrowing and internal and external resources b) Capital expenditure on items of public construction, public
enterprises and public borrowings c) Government spends in excess of revenue and capital receipts so that budget
deficit is incurred which is financed by borrowing from the RBI. d) Difference of total expenditure and income by
revenue from all sources
82) The effect of deficit financing is: a) Never inflationary b) Always inflationary c) Sometimes inflationary and
sometimes not so depending cn conditions of the economy and the dose of deficit financing.d) None of these 83)
The direct effect of deficit financing is:
a) Deficit financing leads to extra money supply which in turn pushes up prices b) Demand and supply both
increase c) The price situation comes under complete control dj Deficit financing leads to extra money supply,
which in turn makes market more & more competitive.
84) Fiscal policy is related to: a) Exports and Imports b) Public revenue and expenditure c) Issues and circulation of
currencies d) Monetary Control measures
85) A restrictive monetary-fiscal policy is a good way to deal with:
a) Demand— shift inflation b) Any short of inflation that occurs when the economy falls below full employment c)
Demand — pull inflation d) Cost — push inflation
86) Grants—in-aid given by the Centre to the states is meant: a) To cover the gaps on revenue accounts. b) For
flood control c) Po( boosting agriculture in the State. d) For financing State plan projects 87) The finance
commission is appointed every: a) 7 years b) 6 years 'C) 5 years d) 3 years 88) The Narsimham Committee
submitted its report to the government on:
a) Depoliticising appointments in public sector undertakes b) Import and Export c) NPA d) Banking structure 89)
"Interest is the reward for pure waiting." Which theory of interest explains it? a)Time Preference Theory b)
Classical Theory c) Liquidity Preference Theory d) Loanable Funds Theory
90) What is not true for the Classical theory of interest? a) Demand and Supply Theory b) Saving-Investment
Theory c) Non-monetary Theory d) Monetary Theory of Interest
91) The Loanable Funds Theory of interest is also known as: a) The neo-classical theory of interest b) The
classical theory of interest c) The real theory of interest d) The modern theory of interest 92) Rate of interest is a
function of I, S, M, r = f (I, S, M, L) is explained by which of the following theories? a)Liquidity Preference Theory
b) Saving-Investment Theory c) Loanable Funds Theory d) Modern Theory 93) For which of the following motives
for liquidity preference, the demand for liquidity is determined by the rate of interest? a) Transaction motive b)
Precautionary motive c) Speculative motive d) All the three motives. 94) Which of the following is known as
monetary theory of interest?
a) Loanable Funds Theory b) ModernTheory c) Liquidity Pi eference Theory d) Saving-Investment Theory
95) What is not true of the modern theory of interest?
a) Neo-Keynesian Theory b) Hicks and Hansen's synthesis c) Monetary Theory d) IS-LM Curves
Analysis 96) Which of the following is not a c4Idracteristic of business cycles?
a) Recurrent in natureb) Periodicity c) Regular d) Cumulative
97) Who gave innovation theory of business cycles ? a) Pigou b) .1. A. Hobson c) Schumpeter d) J. Tinbergen 98)
Which of the following assumptions is not correct in relation to Hicks' theory of business cycle ? a) The equilibrium of
the economy is influenced by changes in consumption and investment b) Fall employment is the ceiling of expansion
c) Autonomous investment increases at some constant rate even during depression d) Accelerator remains operative
in all phases of business cycle, but the multiplier stops operating during depression 99) Economic growth refers to :
a) An increase in per capita income at current prices b) A sustained increase in per capita output c) An increase in
income and output in real terms and not in money d) An increase in economic welfare
100) National income differs from NNP at market prices by the amount of : a) Current transfers from the rest of the
world, b) Net indirect taxes .9-) National debt interest, d) It does not differ
ANSWER
1 A 2 C 3 A 4 D 5 A 6 B 7 A 8 B 9 B 10 C
1 C 12 C 13 D 14 A 15 D 16 D 17 D 18 B 19 B 20 C
1

2 A 22 D 23 A 24 A 25 D 26 C 27 E 28 D 29 D 30 A
1 A
3 C 32 D 33 C 34 B 35 B 36 C 37 C 38 A 39 C 40 A
1
4 C 42 C 43 D 44 D 45 A 46 D 47 B 48 D 49 B 50 B
1
5 B 52 C 53 A 54 A 55 B 56 A 57 A 58 C 59 C 60 B
1
6 B 62 B 63 A 64 B 65 A 66 A 67 D 68 D 69 D 70 D
1
7 B 72 A 73 A 74 C 75 B 76 A 77 B 78 A 79 D 80 D
1
8 C 82 C 83 A 84 B 85 B 86 A 87 C 88 D 89 B 90 D
1
9 A 92 C 93 C 94 C 95 C 96 C 97 C 98 D 99 B 100 B
1
MODULE - B: Business Mathematics (CAIIB 1- ABM )
TEST YOURSELF (BASED RECALLED QUESTIONS) - B: BUSINESS MATHEMATICS
MCQs on Time Value of Money

1.Money has a time value is shown by which of the following concepts:
a: market value b: face value c: present value d: b and c
2 The cash inflow is called:
a: negative cash flow
b: positive cash flow
c: balanced cash flow d. b or c
3 The cash outflow is known as :
a: negative cash flow
b: positive cash flow
c:balanced cash flow d. a or c
4 A cash flow of future has less value due to which of the following (which is not correct): a:
present consumption is preferred over future consumption
b: money value gets eroded due to inflation
c:receipt of cash in future is subject to uncertainties
d: none of the above
5 The process through which the future cash flows are adjusted is called:
a: discounting
b: compounding
c:balancing
d: any of the above
6 The rate at which the present and future cash flows are traded off (exchanged), is called:
a: interest rate
b: discount rate
c:compounding rate
d: yield to maturity
7 If inflation rate is higher in an economy, the
discountrate should generally:
a: be lower
b: be higher
c: be stable
d: be fluctuating
8 If there is lower level of uncertainty about future
cash flows, the discount rate should generally:
a: be lower b: be higher c: be stable d: be fluctuating
9 A lower discount rate leads to __ present
value for the future cash flows:
a: stable b: higher c: lower d: fluctuating
10 Cash flows of different points of time can be compared or aggregated by:
a: converting them to future flows
b: brining them to the same point in time
c: converting them to standard flows d. a or b
11. Which of the following is not a type of cash flow:
a: simple cash flow
b: annuities or growing annuities
c: perpetuities or growing perpetuities
d: future yields to maturities
12 A single cash flow in a specified future time period is called:

a: simple cash flow
b: annuities
c: perpetuities
d: growing annuities
13 The process in which a present cash flow is converted in to its expected future value is called:
a: discounting b: compounding c: balancing d: any of the above
14 Present value can be calculated as _
C i, where C 1 means the expected payoff at period 1
a: compounding factor
b: discount factor
C: interest factor
d: yield factor
15 Value today of Re 1 to be received in future is called:
a: present value
b: compound factor
c: discount factor
d: yield factor
16 Discount factor is denoted by which of the following:
a: 1 / (1-r) b: 1 / (1+r) c: 1 x (1-r) d: 1 x (1+r)
17 X is expecting a cash flow of Rs.10 lac at the end of one year. At 8% discount rate, what is the
present value: a: 952692 b: 962592 c: 925926 d: 925962
18 Present value — required investment = ?
a: discounted value
b: compounded value
c: net present value
d: future value
19 X is expecting a cash flow of Rs.10 lac at the end of one year for his investment of Rs.8 lac in a housing
property. At 8% discount rate, what is the net present value:
a: 152692 b: 125926 c: 162592 d: 125962
20 C 0 / {C 1 / (1+r)} (where C 0 represents cash flow at time 0 i.e. today and C1 at the end of one year),
stands for: a: present value
b: net present value
c: future value
d: discounted value
21 Real cash flow = ___ / (1 + inflation rate)
a: actual cash flow
b: nominal cash flow
c: present cash flow
d: future cash flow
22 Z decides to invest Rs.4 lac in an immovable property that fetches him Rs.5 lac, at the end of an year, what is
his return (use the formula profit / investment):
a: 10% b: 15% c: 20% d: 25%
23 An investment opportunity can be availed where the net present value is _:
a: zero
b: negative
positive
c:
none of the above
d:
24 An investment opportunity can be availed where the rate of return is their cost of capital: a:
less than, discount
b: more than, opportunity cost c. less than, opportunity cost, d: more than, discount
25 Future value of a simple cash flow =x (1+r) t
where r is discount rate:
a: future cash flow called CF
b: present cash flow called CF
c: discounted cash flow called CF 0
26 With the help of formula (1 + stated annual interest rate) n / N ) 1 (where N stands for no. of compounding periods
say semi-annual =2 and monthly = 12) which of the following can be calculated:
a: discounted value
b: nominal interest rate
c:effective interest rate
d: yield to maturity
27 The rate of interest is 8% and compounding is semi-annual, what will be effective interest
rate: a: 8%
b: 8.16%
c: 8.25%
d: 8.32%
28 If the rate of interest is 10% and compounding is annual, what will be the effective interest
rate: a: 10%
b: 10.25%
c:10.47%
d: 10.5171

29 If the rate of interest is 10% and compounding is semi-annual, what will be the effective interest rate: a:
10% h: 10.75% c: 10.47% d: 10.5171
30 If the rate of interest is 10% and compounding is monthly, what will be the effective interest
rate: a: 10% b: 10.25% c: 10.47% d: 10.5171
31 If the rate of interest is 10% and compounding is continuous, what will be the effective
interest rate: a: 10% b: 10.25% c: 10.47% d: 10.5171
32 A continuous cash flow that occurs at regular interval of time is called:
a: future value b: present value c: perpetuity d: annuity
33 Present value of annuity can be calculated by use of which of the formula: (where A = annuity, r=discount rate n =
no. of years, g= expected growth rate - a: PV (A, g,n) b: PV (A, r,n) C: PV (A, r,g) d: PV (g, r,n) 34 What is the present
value of Rs.180000 which is paid every year over a period of 5 years by assuming the rate of interest at 12%:
a: 348680 b: 346880 c: 348860 d: 384860
35 Future value of an end-of-the-period annuity can be calculated as:
a: FV (A, r, g) b: FV (A, g, n) c: FV (A, g, r) d: FV (A, r, n)
36 A loan for which only interest is paid during its repayment period while the principal is repaid at the end is
called: a: term loan
b: interest demand loan
c: lump-sum payment loans
d: balloon repayment loan
37 Which of the following is an example of a balloon repayment loan:
a: bonds and debentures
b: bonds and term loans
c: debentures and term loans
d: all the above
38 A fund which is created by companies to make
payment of balloon repayment loans by regular annual contributions to have adequate funds at the end of the
period, when repayment falls due is called:
a: reserve fund balloon fund
c: sinking fund
d: repayment fund
39 A cash flow that grows at a constant rate for a specified period of time is called:
a: annuity
b: perpetuity
c: growing annuity
d: growing perpetuity
40 Present value of a growing annuity for n years can be calculated, where r=9:
a: growing annuity x no. of periods over which cash flows are to be received or paid
b: annuity x no. of periods over which cash flows are to be received or paid
c: growing perpetuity x no. of periods over which cash flows are to be received or paid
d: none of the above.
41. A constant flow paid or received at regular time intervals for ever is known as:
a: annuity
perpetuity
c: growing annuity
42 A bond that has no maturity and pays a fixed coupon (or rate of interest) is called:
a: long term bonds
b: perpetual bonds console bonds
d: non-repayable bonds
43 A cash flow that is expected to grow at a constant rate forever, is called:
a: annuity
b: perpetuity
C: growing annuity
Answers
01 c 02 b 03 a 04 d 05 a
06 b 07 b 08 a 09 10 b
11 d 12 a 13 b 14 b 15 c
16 b 17 c 18 c 19 b 20 b
21 b 22 d 23 24 b 25 b
26 c 27 b 28 a 29 b 30 C
31 d 32 d 33 b 34 c 35 d
36 d 37 a 38 c 39 c 40 a
41 b 42 c 43 d
Objective Type Questions on Sampling Methods

1 Where items are included in a sample, based on the judgement of the person who is selecting the sample, it is called
non
random.
(True/False)
2 The statistic is a characteristic of a population (True/False)
3 A sampling plan that selects members from a population at uniform intervals in time order or space is called
stratified sampling.
(True/False)
4 As a general rule, it is not necessary to include a finite population multiplier in a computation for standard error
of the mean when
the size of the samples is greater than 50. (True/False)
5 The probability distribution of all the possible means of samples is known as the sample distribution of the
mean. (True/False)
6 The principles of simple random sampling are the theoretical foundation of statistical inference. (True/False) Z
The standard error of the mean is the standard deviation of the distribution of sample means (True/False) 8 A
sampling plan that divides the population into well defined groups from which random samples are drawn is
called as cluster sampling. (True/False)
9 With increasing sample size, the sampling distribution of the mean approaches normality, regardless of the
distribution of the
population (True/False)
10 The standard error of the means decreases in direct proportion to sample size. (True/False)
11 To perform a complete enumeration, one would need to examine every item in a population
(True/False) 12 In everyday life, we see many examples of infinite populations of physical objects.
(True/False)
13 To obtain a theoretical sampling distribution, we consider all the samples of a given size.
(True/False) 14 large samples are always a good idea because they decrease the standard error.
(True/False)
15 if the mean for a certain population were 15, it is likely that most of the samples we could take from that
population would have means of 15 (True/False)
16 the precision of a sample is determined by the no. of items in the sample and not the proportion of the total
population that is sampled. (True/False)
17 the standard error of a sample statistic is the standard deviation of its sampling distribution. (True/False) 18
judgement sampling has the disadvantage that it may lose some representativeness of a sample (True/False)
19 the sampling fraction compares the size of a sample to the size of the population. (True/False) 20 Any
sampling distribution can be totally described by its mean and standard deviation. (True/False) 21 the
precision with which the sample mean can be used to estimate the population mean decreases as the
standard error increases. (True/False)
22 Which of the following is a method of selecting samples from a population
a: judgement sampling b: random sampling c: probability sampling d:a and b but not c
23 Choose the pair of symbols that best completes this sentence : is a parameter, whereas is a statistics: a: N,
p b: a, S c: N, n d: all the above
24 In random sampling, we can describe mathematically how objective our estimates are. Why is
this ? : we always know the chance that any population element will be included in the sample
: every sample always has an equal chance of being selected
: all the samples are exactly the same size and can be counted
: none of the above e: a and b but not c
25 Suppose you are performing stratified sampling on a particular population and have divided it into strata of
different sizes. How
∙ can you make your sample selection?
a: • select at random an equal no. of elements from each stratum
b: draw equal no. of elements from each stratum and weigh the results
c: draw no. of elements from each stratum proportional to their weights in the population
d: a and b only e: b and c only
26 In which of the following situations would a g=cr/Vn be the correct formula to use for computing:
a: sampling is from an infinite population
b: sampling is from a finite population with replacement
c: sampling is from a finite population without replacement
d: a and b only e: b and c only.
27 The dispersion among sample means is less than the dispersion among the sampled items themselves
because: a: each sample is smaller than the population from which it is drawn.
b: very large values are averaged down and very small values are averaged up
c: the sampled items are all drawn from the same population
d: none of the above e: b and c and not a.
28 Suppose a population with N = 144 has p = 24. What is the mean of the sampling distribution of the mean for
samples of size 25:
a: 24 b: 2 c: 4.8 d: cannot be determined from the information given 29 The central limit theorem assures
us that the sampling distribution of the mean :
a: is always normal
b: is always normal for large sample sizes
c: approaches normality as sample size increases
d: appears normal only when Nis greater than 1000
30 Suppose that for a certain population a it is calculated as 20 when samples of size 25 are taken and as 10 when
samples of size 100 are taken. A quadrupling of sample size, then, only halved a R. We can conclude that
increasing sample size is:
a: always cost-effective b: sometimes cost•ef€ective c: never cost-effective d: none of the above
31 For the above questions, what must the value of a for this infinite population
a: 1000 b: 500 c: 377.5 d: 100
32 The finite population multiplier does not have to be used when the sampling fraction is :
a: greater than 0.05 b: greater than 0.50 c: less than 0.50
d: greater than 0.90 e: none of the above
33 The standard error of the mean for a sample size of two or more is:
a: always greater than the standard deviation of the population
b: generally greater than the standard deviation of the population
c: usually less than the standard deviation of the population
34 A broader patrol check point that stops every passenger van is using:
a: simple random sampling b: systematic sampling c: stratified sampling d: complete enumeration
35 In a normally distributed population, the sampling distribution of the mean:
a: is normally distributed
b: has a mean equal to the population mean
c: has a standard deviation equal to the population standard deviation divided by the square root of the sample
size d: both a and b
36 The central limit theorem:
a: requires some knowledge of the frequency distribution
b: permits us to use sample statistics to make inferences about population parameters
c: relates the shape of a sampling distribution of the mean to the mean of the sample
d: requires a sample to contain fewer than 30 observations.
Fill-in the blanks:
37 A portion of the elements in a population chosen for direct examination or measurement is a
38 the proportion of the population contained in a sample is the
39 is the process by which inferences about a population are made from information about a sample 40 The is the
distribution obtained by finding the sampling distribution of all samples of a given size of a population. 41 sampling
should be used when each group considered has small variation within itself but there Is wide variation between
different groups.
42 A method of random sampling in which elements are selected from the population at uniform intervals is
called sampling.
43 ______is the degree of accuracy with which the sample mean can estimate the population mean. 44 Within a
population, groups that are similar to each other (although the groups themselves have wide internal variation) are
called
45 A sampling distribution of the proportion is a probability distribution of the
State whether the following is true or false
46: A rupee to be received in future has less value than a rupee available today (T/F)
47: Money has been invested in capital of a firm instead of investment in bonds. The return on bonds is called
opportunity cost of capital (T/F)
48: When there are inflationary conditions the discount rates are low (T/F)
49: Present value of a perpetuity is expressed as = 1/r (T/F)
50: The difference between cash outflows and present value of inflows is called net
present value (T/F) Answers
01 T 02 F 03 F 04 F 05 T
06 T 07 T 08 F 09 T 10 F
11 T 12 F 13 T 14 F 15 F
16 T 17 T 18 T 19 T 20 F
21 T 22 d 23 b 24 e 25 e
26 d 27 b 28 a 29 c 30 b
31 d 32 u 33 d Si d 35 d
sample fraction
36 b 37 sample 38 39statistical
40 theoretical sampling inference
41 distribution stratified 42 .
systematic43 precision 44 cluster45 sample

46 T 47 T 48 F 49 T 50 T proportion
MCQs ON CORRELATION & REGRESSION
1 Coefficient of correlation is always , according to Karl Pearson:
a: plus or minus 1 b: plus 1
c: minus 1 d: 0
2 r = { xy /N ax ay refers to:
a: price index b: standard deviation
c: coefficient of correlation d: mean deviation
3 Where there is no correlation, the coefficient of correlation will be:
a: +1 b: -1
c: both d: none of the above
4 If two variables changes in the same ratio and in the upward direction, the correlation is said to
be: a: perfectly negative
b: perfectly positive
c: zero
d: negative
5 +1 refers to the coefficient of correlation being:
a: no correlation

b: negative correlation
c: positive correlation
d: perfect positive correlation
6 Correlation means which of the following:
a: measuring relationship between two variables
b: measures changes in prices
c: measuring average correlation between the variables
d: prediction
7 If r M -1, this means that there is:
e: positive correlation
b: negative correlation
c: perfectly positive correlation
d: perfectly negative correlation
8 If correlation is between + 0.9 and + 1, it means there is:
a: high degree of positive correlation
b: high degree of negative correlation
c: perfect degree of positive correlation
d: perfect degree of negative correlation
9 If the value of two series move in the opposite direction, there is:
a: perfect correlation b: positive correlation
c: negative correlation d: lack of correlation
10 Scatter diagram is used to :
a: determine the extent of correlation
b: know the direction of correlation
c: estimate the extent of rank correlation
11 What is the correct value of coefficient of correlation:
a: there is nn limit of it
b: it is between plus or minus 1
c: it is greater than 1
d: it is less than 1
12 There is positive correlation between X and Y when:
a: X and Y both increase
b: X and Y both decrease
c: X increases and Y falls
d: Y increases and X falls
13 The probable error of correlation is:
a: 0.6745 of standard error
b: 0.6745 of correlation co-efficient
c: 0.6745 of standard deviation
14 If two lines intersect each other at 90 degree angle, the co-efficient of correlation will be:
a: 0 b: -1 c: +1 d: none of the above
15 The relationship between price and supply is generally:
a: negative b: neutral c: positive d: linear
16 Between income and consumption there is generally:
a: no correlation b: positive correlation c:negative correlation d: partial correlation 17 Between ages of
husbands and wives, there is generally correlation:
a: negative b: neutral c: zero d: positive
18 If two series move in the same direction, the correlation is said to be:
a: positive b: negative c: zero d: none of these
19 Study of relationship between three or more variables is known as:
a: multiple correlation b: simple correlation c: neither of the two
20 When we consider more than two variables, but consider only two variables to be influencing each other, the
effect of other influencing variable being constant, it is called:
a: multiple correlation b: partial correlation c: simple correlation d: none of the above 21 If the amount of change in
one variable tends to bear constant ratio to the amount of change in other variable then the correlation is said to
be: a: linear b: non-linear c: none of the above
22 Correlation analysis deals with measurement of:
a: association between two ore more variables
b: degree of relationship between variables
c: co-variation between two or more variables
d: all the above
23 Correlation analysis tells:
a: degree of relationship between variables
b: cause and effect relationship between variables
c: none of the above
24 Correlation observed between variables that cannot conceivably be casually related is called:
a: spurious correlations
b: nonsense correlation
c: both a and b

25 The study of tea and coffee is known as :
a: partial correlation b: multiple correlation c: simple correlation d: none of the above 26 When we study the
relationship between the yield of rice per acre and both the amount of rainfall and fertilizers used, it is a
problem of:
a: multiple correlation b: simple correlation c: none of the above
27 The coefficient of correlation:
a: cannot be negative b: cannot be positive
c: can be positive
d: can be both positive or negative
28 Negative correlation implies that on an average as one variable is decreasing the other is:
a: decreasing b: increasing
c: neutral d: none of the above
29 If the amount of change in one variable does not bear a constant ratio to the amount of change in other
variable, this type of correlation is known as: a: linear b: non-linear c: scattered d: none of the above
30 Which is the non-mathematical method of studying the correlation between the variables:
a: scatter diagram method
b: graphic method
c: both the above
31 If 'r' is more than 6 times the probable error, the correlation is:
a: negative b: positive c: significant d: none of the above
32 The coefficient of correlation describes:
a: magnitude of correlation
b: direction of correlation
c: both the above
33 If sum of the product of deviations of X and Y series from their mean is Zero, the co-efficient of correlation
shall be: a: +1 b: 0 c: 1 d: none of the above
Answers
01 a 02 c 03 c 04 b 05 d
06 a 07 d 08 a 09 c 10 b
11 b 12 a 13 a 14 a 15 c
16 b 17 d 18 a 19 a 20 b
21 a 22 d 23 a 24 c 25 c
26 a 27 d 28 b 29 b 30 c
31 c 32 c 33 b
QUESTIONS ON REGRESSION ANALYSIS
1 Greater the value of r
a: better are the estimates obtained through regression analysis
b: worst are the estimates
c: really makes no difference
2 When one regression co-efficient is negative, the other would be:
a: negative b: positive c: zero d: none of the above
3 If the variables are independent of each other:
a: r is zero
b: lines of regression are at right angles
c: both a and b
4 Nearer the two regression lines from each other:
a: higher the degree of correlation
b: lesser the degree of correlation
c: neither a nor b
5 The more and more distance between two regression lines means:
a: higher degree of correlation
b: lesser the degree of correlation
d: both the above
6 Value of correlation coefficient is:
a: 4bxy and byx
b: + or - bxy and by:c
7 The regression lines cut each other at the point of:

a: average of X and Y b: Average of X only
c: Average of ? only d: none of the above
8 The regression line of Y on X:
a: minimize total of squares of the horizontal deviations b:total of the squares of the vertical deviations c:
both vertical and horizontal deviations d: none of the above

9 There will be only one regression line in case of two variables if:
a: r = 0 b: r = +1
c: r = -1 d: r is either +1 or -1.
10 The regression line of Y on X gives:
a: the most probable values of X for given value of Y b: the most probable value of Y for given value of X c:
either a or b d: none of the above
11 X on Y gives:
a: the most probable values of X for given value of Y b: the most probable values of Y for given value of X c:
any of the above d: none of the above
12 If byx = 0.6 andbxy= 1,3 then r+
a: 0.75 b: 0.73 c: 0.88 d: none of the above
13 Regression is:
a: measure of average relationship between 2 ore more variables
b: to find a relation between 2 or more variables that are related casually
c: any of the above
14 Coefficient of correlation is under-root of two:
a: standard deviations b: mean deviations a regression coefficients d: none of the above 15 The
farther the two regression lines cut each other:
a: the greater the degree of correlation , b. the lesser the degree of correlation c: does not matter d: none of
the above
16 Where r = 0, the regression line cut each other at:
a: an angle of 45 degree b: an angle of 60 degree c: an angle of 90 degree d: none of the above 17 The
regression equation X or Y is shown as:
a: X = a + by b: Y = a + bx c: Ex --- a +.b Ey d: EXY=aN-EbEy 2 18 The regression
equation Y or X is shown as:
a: Y = a + bx b: Y = a + by c: Y = Na + b EX d: none of the above 19 If two regression lines
are nearer to each other thEn there would be:
a: low degree of correlation
b: higher degree of correlation
c: no correlation
20 If coefficient of correlation between two variables is zero, the regression lines will be: a: coinciding each other b:
parallel to each other c: perpendicular to each other d: none of the above 21 If bxy = 1.3 and byx = 1.5, r would be:
a: 1.256 b: 1.296 c: 1.315 d: 1.396
Answer
01 a 02 as 03 c 04 a 05 b
06 a 07 a 08 a 09 d 10 b
11 a 12 c 13 b 14 c 15 b
16 c 17 a 18 a 19 b 20 c 21 d
OBJECTIVE TYPE QUESTIONS ON TIME SERIES
1 Ups and downs in the economy due to trade cycles are called:
a: cyclical variations b: seasonal variations c: secular tends d: none of the above 2 Which one of
the following is the indication of seasonal variation:
a: improvement in techniques b: demand of woolen clothes in winter c: purchase of books during the
beginning of the academic sessions d: none of the above 3 Y = ? in series:
a: TxS+C+1 b: T-S+C-1 c: T-SxCx1 d: TxSxCx1 4 The fluctuations which complete the whole sequence of
change within the span of a year or has some pattern year after year is known as:
a: secular trend b: seasonal variation c: cyclical fluctuation d: none of the above 5 Cyclical
fluctuations are also known as ;
e: oscillatory variations b: business cycle fluctuations c: either a or b d: none of the above
6 The period of moving average is to be decided on the basis of :
a: length of the cycle b: policies of the company c: both the aboved: none of the above
7 Method of [east squares is:
a: flexible in nature b: non-flexible in nature c: semi-flexible in nature d: none of the above 8 Method of
least squares cannot be used to fit:
a: Gompertz curve b: logistic curve c: both the above d: none of the above 9 In shifting the trend origin,
the value of 'b':
a: changes b: remains unchanged c: badly fluctuates d: either a or b 10 The moving average may
constitute a satisfactory trend for a series that is of:
a: linear duration b: whose cycles are regular in duration c: both the above d: none of the above
11 To convert an annual trend equation to a monthly basis, when original data are given as totals:
a: 'a' is divided by 12 and 'b' by 144 b: 'a' is divided by 12 and 'b' by 12 c: 'a' is divided by 144 and
'b' by 12 d: 'a' is divided by 144 and 'b' by 144
12 Changes that have taken place as a result of such forces that could not be predicted like floods etc. are known as:
a: seasonal variations b: erratic variation c: cyclical variation d: none of the above
13 Seasonal variations repeat during a period of:
a: 12 months b: 24 months c: 36 months d: 48 months 14 The most important factors
covering seasonal variations are:
a: growth of population b: technological improvements c: change in fashions d: weather
15 Seasonal moments are:
a: repetitive b: predictable around the trend time c: trend valued: none of the above 16 The general movement
persisting over long period is called:
a: secular trend b: seasonal trend c: trend value d: none of the above 17 The most widely used
method of measuring seasonal variations is :
a: ratio to moving averages method b: ratio to trend method
c: link relative method d: method of simple averages 18 Irregular variations are caused by:
a: floods b: strikes c: wars d: all the above 19 A time series is a set of observations taken at
specified time, usually at:
a: equal intervals b: unequal intervals c: only at short-term intervals d: none of the above 20 Which one of
the following is a component of time series:
a: secular trend b: seasonal variations c: cyclical variations
21 In Yc = a + bx, if b is positive, it shows:
a: rising trend b: seasonal variations c: cyclical variations d: all the above 22 We find irregular
variations due to:
a: lock outs b: transport bottlenecks c: floods d: all the above 23 How can be remove
seasonal variations:
a: reducing prices in seasons b: introducing different products having different seasons c: both the
above d: none of the above
24 What is the sequence of the following phases in business (i) depression, ii) prosperity, iii) recovery, iv)
recession): a: ii, iv, i, iii b: iv, c: iv, i, ii, iii d: iii, ii, iv, i 25 Which period give more tangible trend:
a: shorter period b: long period c: medium period
26 The seasonal changes are always:
a: periodic but not regular b: not periodic c: periodic and regular
27 Which is the feature of prosperity:
a: inflation b; optimism c: high profits
Answers
01 a 02 b 03 d 04 b 05 c 06 a 07 a 08 c 09 b 10 c 11 a 12 b 13 a 14 d 15 c 16 a 17 a 18 d 19 a
20 d 21 a 22 d 23 d 24 a 25 b 26 c 27 d
Bond Valuation - Objective Type Questions

1.Bonds have a maturity andvalue at maturity:
a.fixed, variable b. fixed, fixed c. variable, fixed d.variable, d.variable
2.Regular repayment in the form of interest on a bond is called:
a.discount, b.interest c.coupon d. dividend
3.On 8%, 5 year bond of Rs.10000, the investors gets annually, as
a. 80.00, interest, b. 800.130, discount, c. 80.00, coupon d. 800.00, coupon
4.A bond the value of which is changed into a share is called:
a.convertible bond, b.zero coupon bond, c.negative bond, d.floating rate bond
5.A bond where the interest rate can be reset is: a. convertible bond, b.zero coupon bond c. negative bond, d.floating
rate bond
6. Abond is issued at a price below its face value while on payment, the face value is
paid: a. convertible bond, b.zero coupon bond, c. negative bond d. floating rate bond
7.In which of the following bonds, no interest payment Is made:
a.convertible bond b. zero coupon bond, c. negative bond d. floating rate bond
8.The income that a bond earns from year to year Is called: a. coupon, b.yield to maturity, c. current yield,
d.effective yield
9.The actual yield to an investor, instead of nominal interest, is called: a. coupon, b.yield to maturity, c. current
yield, d.effective yield
10.The discount rate that makes the present value of bond's payment equal to its price is
called: a.coupon b. yield to maturity c. current yield d. effective yield
11. A risk that arises on account of change in the current market price of the bond, is known
as: a. interest risk b.yield risk c. return risk d. price risk
12.The return to an investor in case of zero coupon bond is different between the price and value: a:
sale, face
b: face, purchase
c: purchase, face

d: face, sale
13 The face value ofbond changes with current interest rates:
a: convertible bond
b: zero coupon bond
c: negative bond
d: floating rate bond
14 Coupon / (1+r), where ris compounded return =
a: future value
b: discount rate
c: present value
d: maturity value
15 To calculate present value under annuity formula, we use the following:
a: PV of investment + PV of face value
b: PV of coupon + PV of face value
c: PV of coupon + PV of investment
d: PV of interest + PV of investment
16 For a 3 year 6% bond of Rs.1000, the present value is if the compounding is annual:
a: Rs.1010.77
b: Rs.1010.91
c: Rs.1100.77
d: Rs.1017.11
17 For a 3 year 6% bond of Rs.1000, the present value is , if the compounding is semi-annual (half yearly): a:
Rs.1010.77 , b. 1010.91 , c.Rs.1100.77 , d. Rs.1017.11
18 Where the current market interest are lower that the fixed coupon rate of a bond:
a: bond is sold at a discount to face value
b: bond earns premium on face value
c: bond sells at par d. there is no effect
19 Where the current market interest rate is higher than the fixed coupon rate of a bond: a:
bond is sold at a discount to face value
c: bond sells at par
d: there is no effect
20 Where the current market rate of interest is equal to coupon rate of the bond:
a: bond is sold at a discount to face value
c: bond is traded at par d. there is no effect
Answers
01 b 02 c 03 d
04 a 05 d 06 b
07 b 08 c 09 d
10 b 11 d 12 c
13 c 14 c 15 b
16 a 17 b 18 b
19 a 20 c
Objective Type Questions on linear programming
1 The word 'linear' represents which of the following:
a: drawing lines for solving management problem b: representation of relationships by straightline. c:
solution for production problem through statistical methodsd:representing the solution on straight lines. 2
Linear programming is a __technique:
a: economics b: mathematical c: algebraic d: any of the above
3 Linear expression in linear programming is known as:
a: linear function b: algebraic function c: objective function d: main function 4 Linear inequalities in
linear programming are known as:
a: linear constraints b: linear functions c: linear relationships d: none of the above 5 The value of decision
variables can be:
a: negative or positive b: zero or negative c: positive or zero d: a and b
6 The decision variable in LP that should not assume negative values are called because they represent
impossible situation.
a: negative restrictions b: positive restrictions c: Non-negative restrictions d: non-negative and positive restrictions
7 The relationships to be expressed either as equations or inequalities should be:
a: positive b: straight c: cervical d: linear 8 The non-zero variables in a basic feasible solution
are called:
a: surplus variables b: slack variables c: artificial variables d: basic variables 9 Positive variables that are
added to the left hand side to the constraints to convert them to equalities are called: a: surplus variables
b: slack variables c: artificial variables d: basic variables
10 Positive variables that are subtracted to the left hand side to the constraints to convert them to equalities
are called: a: surplus variables b: slack variables c: artificial variables d: basic variables
11 The original linear programming problem is called:
a: original problem b: primary problem c: dual problem d: primal problem 12 The problem that is related to
original linear programming problem is called:
a: original problem b: primary problem c: dual problem d: primal problem 13 A linear programming
problem shows degeneracy:
a: when a basic variable acquires a zero value
b: in the final solution either the no. of basic variables is not equal to the no. of constraints
c: the no. of fern variable does not mita! the nn. of derision variahle.s
d: any of the above
14 For formulation of a linear programming problem, which of the following is an
important steps: a: determination of unknown variables
b: identification of constraints and expressing them in linear equations
c: identification of objectives and represent them as a linear function of decision variables
d: all the above
15 Which of the following combinations are the methods employed in linear programming problems:
a: geometrical, graphical methods b: simplex method, graphical methods c: geometrical, simplex
method d: b and c both
16 Geometrical method can be used effectively when the no. of variable is :
a: minimum 2 b: maximum 2 c: maximum 5 d: no restrictions on minimum and maximum
17 Which of the following is most effective methods under LPP:
a: graphical b: geometrical c: simplex d: all the above 18 An arithmetical step by step procedure is
called:
a: linear programming b: algorithm c: iterative procedure d: none of the above
19 Simplex method is basically and essentially procedure that evaluates corner points in search of the optimal
solution: a: iterative b: continuous c: regular d: minimum 20 In Simplex method, the value of objection function is
increased at each step of iteration till: a: further possibility of increase has ended b: maximum benefit has been
obtained c: no further improvement is possible d: none of the above
21 When Simplex method is used for problems such as maximization of production, profit or contribution, such
problem is called:
a: Simplex problem b:minimization problem c:maximization problem d : a o r c
22 When Simplex method is used for problems such as minimisation of cost or time, such problem is
called: a: Simplex problem b:minimization problem c:maximization problem d: a or c
23 In which of the following areas, the application of LP techniques can be done:
a: portfolio selection b: staffing problem c: profit planning d:all the above 24 In which of the following
areas, the application of LP techniques can not be done:
a: trimming of loss b: agriculture and contract awarding c: financial mix strategy, d. none of the above
Answer
01 b 02 b 03 c 04 a 05 c 06 c 07 d d 08 a 09 b 10 a
11 d 12 c 13 d 14 d 15 d 16 d 17 c c 18 b 19 a 20 c
21 c 22 b 23 d 24 d
MODULE - C: HRM in Banks (CAIIB 1- ABM )
TEST YOURSELF (BASED RECALLED QUESTIONS) - MODULE - C: HRM in Banks
1. HRD environment eventually means actions, tendencies and commitments which supports. a. openess and risks
taking b) Proactivity and autonomy c) Collides with each other d) Only (a) + (b) 2. Prerequisites for HRD is/are- a)
Examining appraisal systems b) Selection of chiefs for HRD among senior officers
c) Executive is made/leader d) Both (a) and (c)
3. What are the requirements for effective of HRM?
a. Posting of staff with appropriate skills and capabilities
b. Identify long term trends in the supply and demand for staff and plan accordingly

c. Incorporate employee performances in the deployment process/ ability to make changes in the staffing pattern d.
Giving continuous training to employees
4. Public Sector Banks whether business unit or HRD have any role in selection of candidates?
a. HR is solely responsible for staff management b) HR is primarily responsible
c) HR and Business units are jointly responsible d) Business units are solely responsible 5.
For Management Development Programme course contents include
a. Organisation/management principles/human relations b) Skills for other's development c)
Behavioural aspect of Management d) Both (a) + (b)
6. HRD practices in banks include- a)Staff meetings/Quality-Circle b) Brain Storming Sessions/Study Circles
c) Both (a) + (b) d) Executives Meeting
7. Where the most of jobs in banking are monotonous/ repetitive and routine, what is the role of the HRD
department?
a. empower employees through motivation organisational structure
b. engage employees through systems and procedure
c. emergiges employees through need to focus greater attention d) All above
8. If the challenges faced by banks is on sustaining profit and business development, then what are the related
issues?
a. Improving skill sets with the staff b) build a casual marketing staff
c) Slowly and steady develop skills to match the business priorities d) Both (a) and (b)
9. To sustain and improve the profit volume and margins, banks have to do
a. Developing new areas of business/improving service quality
b. Increasing operational effectiveness/deepening customer base,
c. Both (a) + (b) d) To continue traditional way of delivery channels.
10. Labour Welfare Officers appointment were first started under
a. Factories Act, 1948 b) Companies Act, 1922
c) Employees Provident Fund Act d) Industries Development (Regulation) Act
11. The general functional areas of personnel can be grouped
a. determining the staffing/measuring performance and developing potential
b. maintaining effective personnel management relationships
c. anticipating and coping with organisational changes d) All above e) Both (a) + (b)
12. The role of HRD personnel is to
a. description of entire process/analytical decomposition b) identification of HRD elements and resources b.
Both (a) + (b) d) Analytical decomposition only
13. The primary goal of HRD is
a. To increase productivity of workers/and organisational profitability
b. Improve workers' skill and enhance motivation, to prevent obsolesces at all levels
c. prevent obsolescence and increase organisational profitability only d) Both (a) ± (b) 14. To achieve, workers
increased productivity and organisational profitability, the role of a HRD manager is a. to assist employees in
obtaining knowledge/skills b) to play enabling role for providing the right context a. Intervention on individual and
organisational effectiveness c) Both (a) and (b) d) All above 15. There are various roles of a HRD officer as per
American Society for Training and Development. Which are 3 important among them?
a. Administrator's/evaluator's/career development advisor
b. Supporting individual's work/managing staff, unions discussion/ watching organisational behaviour
c. Leader's/facilitator's/provider of instructional material from management's role
d. Needs analysat's/organisational's change/basing decisions on traditional method's roles. 16. Under HRD Officer's
role, for providing co-ordination and support services, for the delivery of HRD programme, is called
a. Administrator's role b) Leader's Role c) Market role d) Need's analysists role
17. What activities are covered under HRD Officer's role or Researcher?
a. Identifying developing and testing new theories concepts and their implications
b. Identifying theories, concepts and technologies models
c. Developing and testing hardwares d) Testing and translating implications
18. For which activities, knowledge and internal skill, HRD consultants are appointed?
a) Training and management development programmes TQM/ISO:9000/quality

circles/BPR/Benchmarking
b) Value engineering/Just in time/total productive maintenance/six sigma, c) All above d) Both (c) and (b) 19.
Vedas say that there are 3 pathway for anyone, to opt under HRD. Which are to be opted by a HRD Manager? a.
Brahmajnaan prayaanam/dharma jhaana prayaraanam/Karma ]naana prayanam
b. Brahma Jnaana/Dharma c) Dharma/Karma d) Brahma/Karma
20. State the practical managerial principles from Vedas for HRD
a. Asathos Maa Sat Ga mayafTamaso maa 3yotir Gamaya/Mruthyormaa Anutham gamaya
b. Saha naa Vavatu/Saha naa Bhumktu
c. Satyaan no pramadithvyam/Bhadram Kernebhi Srunuyaam deva
d. All above e)) Both (a) + (b) only
21. Vedas lay great emphasis on proper Human Resource)..
a. Development b) Remuneration c) Practices d) Management
22. For personality development, what personality traints are prodminant in Vedas?
a. Annamaya + Pranamaya + Mano Maya + Vijananamaya + AnandaMaya
b. All above except manomaya c) All above except pranamaya + Vijnanamaya
d) All above except Anandmaya + Manomaya
23. Among the 5 types of personality traits in vedas, which is the most commonly observed phenonenon?
a. Annamaya (Physical + Materiaslistic) b) Pranamaya (enargetic + action oriented)
c) Mamomaya (emotional + sentimental) d) Vijnanamaya (Intellectual + Judgmental)
e) Anand Maya (Creative + Visionary)
24. Vedas have got Varnas and competency (classes) based on the core principle of division of work (because of
varying mental temperaments. Such varnas are
a. Brahman b) Khastriya c) Brahman + Khastriya + Vaisya + Shudra d) Shudra
25. Why such varna's were created in Vedas, based on which type of labour expertisation for Brahman?
a. Admministrator'execution/Governance b) Planning / advisory services / consulting / preaching c)
Service / physical labour d) Trade / Service / Manual Labour
26. Prodominant quality in each division of labour is different. What are predominant qualities for Ksastriya Varna? a.
Rajas - Tamar - Satva – Tamas b) Tamas – Satva c) Rajsik d) Tamsik
27. Vedic division of labour is meant for selecting any vocation or job that suits one's inherent
a. Mental temperament b) Birth c) Specialization d) Treatment
28. Vedic management structure (Asrama) in a business organisational environment depends on which dimensional
approach?
a) Brahmachari/Grihastha/Vanprastha/Sanyasi
b) ManagementTrainee/ Manager/ director/ management consultant Student / married person / forest hermit /
world renouncer c) All above have same meaning d) Only (b) (c)
29. In Vedic management structure Grihastha asrama represents -
a) Learning of management practices b) Learning of job under guidance of Grihastha c) Middle and senior level
manager who performs the job d) Top level management responsible for visioning
30. Under Vedic management Sanyasi refers to
a) neutral and independent management consultant
b) experienced executive, who has disassociated with any kind of job
c) broad policy layer for healthy corporate culture d) Guides and facilitates the work of Grihasthas
31. Leadership is the -
a. ability to influence other people b) ability to create within people an urge to do
c) ability to obtain willing co-operation of the followers d) All above e) Only (a) + (b) 32. A leader is concerned with-
a)Task b) Individuals c) Groups d) Task / individuals and groups 33. There are various styles of a leadership which
one is most useful? –a)1.1 style b) 1.9 style c) 9.9 style d) 9.1 style
34Leadership style of 1.9 type means -
a. having high concern for people and low for tasks
b.having low concern for people and also low for tasks
c. having equal high concern for birth task and people
d. having high concern for task and low concern for people
35. What is meant by Building Teams? –a)A common group b) A cohesive group c) A command group d) A
correlated group
36. A team is evaluated on features like- a)Co-operation / confrontation avoiding / common objectives a. Openess
of view and unwritten procedure systems, b)Regular review/appropriate leadership d) All above e) Both (b) + (c)
37. In building teams thing are evalulated on the basis of various features. While interacting with each other there
would be differences and misunderstandings, which are discussed to clear up, what it is called? a. Openess b)
Confrontation removal c) Support and trust Co-operation
38. In building team, what members do to clarify and improve working. This is called
a. Grievances settlement b) Regular Review c) Audit d) Supervision
39. What is intended in change?
a. Implying adaptation and transformation b) Improve effectiveness and should be appropriate c)
Both (a+) + (b) d) Transformation and appropriateness
40. The major elements of an organisation are?
a. Goals/structure/technology and people b) Targets/profitability/mechanisation
c) Result oriented goals/human resource management d) Both (b) + (c)
41. Management of change is concerned with context of
a. Organisation (inner and outer) / time of sequence b) Change c) Process of implementing change d. All
above e) Both (a) + (c)
42. In the context of organisation process of change includes
a. Trade unions / Government policy b) Political situation, popular opinion and all in (a) c)
Adaptation to environment d) Drift
43, The most common manifestations of drift are
a. Strong departmental perceptives as against conflicts
b. diffused contracts / low morale of employees / rigihtidity in style of functioning + all in (a) above c.
High accommodation in inter personal relationship d) All above
44. Changes in management may relate to which element of the system?
a) Goals - workgroup – skills b) b. Role relationship - updated technology - service functions and (a) above c)
structure-management styles-information systems-wages and incentives + (b) above
d) Loss of power I influence/status
45. Why there is resistance to change?
a) Loss of power - loss of influence - loss of status b) b. Loss of opportunities growth or career + (a) above c)
Inability to acquire new skills inability to fit in to new roles + (b) above
d) inconvenience in new working conditions and more burden and responsibility + (c) above
e) Only (c) + (a)
46. The resistance to change can decrease by -
a. Competent authority who directed for change b) authority is untrustworthy, promises are incredible c)
authority is seen as now sensitive to difficulties and concern of subordinates
d) When one is afraid for penalty if mistakes are made
47. Is there any system, by which resistance to change can be reduced?
a. by dose monitoring and guidance b) by success achieved by those who innovate being made known to others
c) both (a) + (b) d) Resistance can not be reduced
48. When superior uses his/her authority to make decisions and announces what he/she expects from others is
called a. Unilateral approach to change b) Shared approach to change
c) Delegation approach to change d) Shared and delegated approach to change
49. In group discussions, in which groups are given wide latitude to diagnose problems or to choose from alternatives
is called approach to change) – a) Unilateral b) Shared c) Delegation d) All above
50. An approach to change which lays emphasis on the subordinates reaching decisions, on their own is called
a. Delegation b) Shared c) Unilateral d) Both (b) + (c)
51. What is required to be done, when change management helps an organisation to stay on top of changes by
a. Building resilence b) Focus on critical issues and avoid energy description
c) Anticipate opportunities to become more competitive and manage in a climate of uncertainty, d) Only (a) + (c) e) All
above
52. The main activities of change management are
a. Filtering changes/managing changes/management reporting b) Reviewing and closing of requests for change c)
All above d) Providing management information
53. There are various conditions for change management. Tick minimal 3 such conditions : a. Ability to notice
weakesses/top management commitment with grant of services/appointment of staff non-
renewable period
b. Monitor changes at specific stages/experience of early success/ no deal in context of local situation, c. Trust and
candour rests with juniors/ensures non diversion of direction under day to day work/staff to oversee the
implementation d) All above
54. For Total Quality Management (TQM) the required qualities are :-
a. Understand customer's current and future needs/leaders establish unity of purpose/involvement of people for
organisation's benefit
b. achievement of desired results when resources and activities are managed as a process and (a)
above c. Mutually beneifical suppliers relationships enhances the ability to create value and (b) also d.
Should have a temporary objective of the organisation
55. What management system are available for TQM?
a. Organisational management system b) Human resource management system
c) Total quality management system d) All above
56. Business Process Re-engineering is all about
a. Searching new/business process
b. Implementation new/business process to achieve breakthrough results + (a) above
c. Fundamentals rethinking and radical redesign of business process + (b) above
d. It involves, going back to beginning and forget the earlier growth
57. The characteristics of BPR are
a. Structure to process orientation/business process/customer oriented/benchmarking of BPR
b. Number of business process varies/owning of responsibility/holistic view of process/role of
LT c) All above d) Some of (a) and some of (b)
58. Continuous improvement and radical innovations in order for reduce time and cost with enhancement of
organisational flexibility and customer satisfaction is the feature of
a. TQM b) BPR c) ISO 9000 d) Benchmarking
59. A system which cuts across functions/departments and boundaries of organistion, to achieve organisational
goals, is known
a. Quality Circle b) TQM c) BPR d) All above
60. In business and financial institutions, to manage the volume of transactions, to improve the quality standards of
service to customers and introduce new products or services, is named as
a. Customer Service b) TQM c) Quality Circle d) Role of I.T. in BPR
61. Objectives of BPR is/are
a. cost reduction/time and space shrinkage/quality enhancement
b. work life average/profit improvement/survival in present
c. Time and space enhancement/cost increase/increase customer satisfaction
d. Simply process for employees/maintain market share at quality dilution
62. Define the basic steps needed in BPR
a. Implementation of traditional process/designing and preparing a prototype of new process
b. Implementation of new process/reviewing and evaluating the progress.
c. Identification of IT. levels/discarding the existing processes
d. Development of business vision keeping the old objectives
63. BPR is a pre requisite for banking in
a) Core Banking Solutions b) Total Banking Solutions c) Networking d) All above
64. BPR in banking and finance aims at
a. Considerably reduction in the time lag of deliverables
b. Undertake transactions much more conveniently and improving profitability
c. Enhancement of business prospects and retention of clients d) All above e) Both (b) + (c) 65.
Banks do, by popularizing LT. based delivery channels, for reduction in transaction costs? a.
Telebanking b) Kiosks/Internet banking + (a) above
c) Remote customer enquiry terminals + (b) d) Phone banking only
66. Considerations, which are required to be thought before adopting BPR in banks?
a. Type of customer service improvement/their impact on performance
b. Total cost savings achievable/reduction in time cycles/unsuitability of present process + (a) above c. Commitment by
top management to re-engineering/support of employees/reasonable time limit for re-engineering process + (b) d) Low
feasibilty success
67. Common illness in BPR are
a. Resources used only to cope with crises/large number of errors and rework/numerous signs off
b. Lower ratio of total process time/normal complexity as a result of changes
c. Mountains of paper work/reports and files/rising customer complaints and system break down
d. Both (a) + (c)
68. Barriers to BPR are
a. Fear of employees and managers/employees sufferloss of morale
b) Willing acceptance by employees/adequate knowledge and skills
c) Benefits poorly communicated/resistance by employees/ organisational overload and lack of resources + (a)
above
d) All above
69. Implications of benchmarking technique used are for
a. Quality management b) Human resource management
c) Search for best practices + (a) d) Customer service with no difference
70. Benchmarking means
a. Copying ideas from competitors b) search for those best practices that would lead to superior
performance c) Systematic and continuous measurement process d) All above
71. An examination of a competitors, product to see addition of new features and use of new process by them is
called
a. Reverse engineering b) Process benchmarking c) BPR d) Combination of all
72. State the benchmarking process which does not necessarily lead to learning is called a. Process
benchmarking b) Xerox benchmarking c) Reverse engineering d) Internal Engineering 73. A process which
is aimed at understanding how a corporate's processes perform in comparison to competitors, is called
a. Process benchmarking b) TQM c) ISO 9000 d) Quality Circle
74. Which type of process benchmarking with indirect competitors in the banking/financial and insurance services
may be much better. The risk of legal action and accusation of collaboration are probably less a) Internal b)
Competitive c) Out of Industry d) All above
75. To facilitate the international exchange of goods and services formation of standardisation in done by a.
Central Government b) ISO-9000:2000 c) BPR d) Quality Circle
76. ISO 9001:2000 specifies requirements for
a. Quality Management b) Performance improvements , c) Certification on the basis of parameters d) All above 77.
Guidelines for standardised performance improvements are known by
a. ISO 9002:2000 b) ISO 9001:2000 c) ISO 9004:2000 d) ISO 9003:2000
78. In ISO 9000:2000 the various sections of standardisation are
a. Activities used to supply products b) Quality management/Management responsibility c)
Resource management and measurement analysis d) All above
79. Quality Circle is a circle of
a. Quality conscious people organised for quality improvement and work environments b. Small voluntary
group of people, from same work area for solving work related problems c. Quality circle is an important
management tool in the management for increased employee motivation and productivity
d. d) All above are the same
80. Which are the areas, where quality circle plays its part in customer service, in banks?
a. Reduction in transaction time/timely payment of pensions
b. Balancing of books/efficient functioning of ledger posting machine
c. Growth in resident deposits/recovery of monthly instalments of recurring deposits
d. Employment of staff on busy days/easy availability of vouchers/ form
81. What role the QC has in recovery of Non-Performing Assets of the bank?
a. Recovery of entire NPA b) Recovery of agricultural advances
c) Recovery of weaker sector advances d) Recovery of SME advances
82. All types of prevention of frauds is done by QC exercises. How far true?
a. All frauds prevention b) Frauds where outsiders are involved
c) Fraud preventation in outstation cheques sent for collection not under CBS,
d) Systematic change of duties of clerks/officers. e) Both (c) + (d)
83. What is easily, possible under QC for optimium utilisation of manpower?
a. Saving manhours/employment of staff on busy days overcoming shortage of peons/ improvement in
arrangements within the branch.
b. All of (a) above except overcoming shortage of clerks and officers.
c. All as in (a) except employment of staff on busy day and shortage of peons and clerks
d. Nothing since this is the job of the management
84. What QCS do for the providing of amenities to customers?
a. enough seating arrangement/easy availability of vouchers/necessary firm and stationery to
customers b. drinking water facility + all above
c. drinking water facility to staff and not to customers + all above as in (a)
d) easy availability of vouchers/forms to customers only
85. Is it possible to do any thing under QC for the personal growth of staff?
a. Improvement in job knowledge/increasing general awareness of staff
b. Better security to staff during working hours
c. Improvement in job knowledge is the work of employees' unions, rest of (a) (b), c) Both (a) + (b) 86.
What is not in the scope of the QC?
a. Cleanliness in the premises/beautification of branch
b. Guidance to illiterate and new customers especially school children
c. To transfer the unwanted employee/officers from the branch
d. To discuss their problem of increment/promotion and overloading in work e) Both (c) (d) 87. It is now well
appreciated by the corporate world, that the customers have their rightful expectations to buy quality products at
competitive price) For improving the bottom line (profit) synergy between their two can be called
a. QC b) TQM c) Six Sigma practices d) BPR
88. Designing and monitoring business activities to minimise waste and resources without compromising with
customer satisfaction, is in which quality practice?
a. TQM b) Six Sigma c) Quality Circle d) All above
89. What does differentiate six sigma with TQM?
a) Defects free b) Less Quality c) Good Quality d) Better Quality
90. Success of any bank or financial institution is measured in terms of
a. Market Share b) Profit c) Size d) All above
91. HRD department's work includes employees'
a. Selection/placement/induction/training/objective
b. Performance appraisal/career planning/potential development
c. Some of as in (a) and some as in (b) d) Both (a) (b)
92. What are the major challenges in bank's merger and acquistions-human due diligence?
a. Teams are cohesive groups
b. All groups are teams
c. Building team means one man output is another man's input, the another person being the external customer d.
Members of the team cooperate with each other this implies that they do not show concern and adjust to each
other
93. Members of the team take responsibility, for the team as a whole only if there is
a. Co-operation b) Support and trust c) Common objective d) Appropriate leadership 94.
Certain traits are essential for
a. Effective leadership b) Help in effective leadership c) Goal clarity d) Help produce result 95. The
leadership function is exercised by
a. The formal leader only b) Members other than the formal leader
c) Leaders to produce result d) Members to have goal clarity
96. Which of the following cause fear and resistance to change?
a) Shift away from your close friends b) Change in Junior c) Decrease workload d) Irresponsibility 97.
Which of the following helps to reduce resistance?
a. Learning the new skills b) Juniors are sensitive to concerns of subordinates
c) Information about negative results experienced elsewhere d) Both (b) (c)
98. The levels at which the changes takes place
a. Attitude of the group b) Knowledge at individual level
c) Behaviour level of individuals/organizational d) Both (a) + (b)
99. Change may also be resisted because one does not like
a. Initiation of the change b) Principles not justifying the change
c) Purposes sought to be achieved by the old system d) Both (b) (c)
100. The motivation to try out the changes improves
a. Mission clarified and accepted b) Values are not shared
c) Feeling of some liberty on the change agenda d) Sense of more liberty without responsibility or without any
status
101. What are the expectations from HR department?
a. Change a fact of corporate life b) Employee satisfaction c) Employees commitment d) All above 102. Why
people/employees of an organisation leave?
a. Valve-perceived worth to an organization b) Equity-perceived worth compared to other individuals b.
Finances-ability to maintain certain standard of living c) All above d) Both (a) + (c) 103. Employees who
leave any organisation due to reasons of
a, Jealousy due to non recognition/favourtism-person may be singled out to receive less
b) Anomaly-payment for attendance only/twisting precedent-nor recognition of similar actions in future c)

Both (a) + (b) d) Favouratism only
104. What is the object, under performance appraisal of the employee, in any organisation? a. Avoid
discimination in ranking the personnel b) Avoid professionalism to base the career of the personel c) To assess as
per whims of the seniors d) To assess as per exit policy of the organisation 105. Pension is given to employee for
a. Loyalty and compliance b) Susistance amount for old age
c) Not working any other organisation lower in rank d) Meet out the old age diseses expenses 106.
What is most appropriate for keeping employees in an organisation?
a. Extrinsic reward only b) Intrinsic motivation
c) Guaranteed employment without career d) Possibility of getting pension after retirement 107.
To produce optimum quality in banking industry, what is essential?
a. Extrinsic factors b) Intrinsic factors as beauty c) Both (a) + (b) d) Competition among employees 108.
Human due diligence means investigation of
a. Management team/staff b) Structure/issues/managerial capacity of a potential partner c)
Both (a) + (b) d) Financial due diligence
109. In mergers and acquisitions of banks in India, what are steps essential before M & A? a. Inclusion of 1-IRD
managers is core strategic team b) Analysis and offer to evaluate the fitness of companies c) Transition and
integration to be known to employees d) Both (a) + (b)
110. Discuss the fundamental is human due diligence?
a) Concrete and sound HR guidelines/motivation/suitable reward systems
b)neverance for management and staff/managerial competence/ training needs/feedback and learning
devices c)Internal alignment during integration/expendable skills of the potential bank/non availability of
resources d) Both (a) + (b) only
111. Human capital plays constructive role in M & A process. What is required for its effectiveness?
a. ensuring effective communications
b. achieving cultural alignment + formation of mobile team of transition executives + (a) above
c. treating those leaving with same respect and attention as those staying d) Both (b) (c)
112. What are the issues/constraints in CBS vis-a-vis involvement of FIR?
a. Out sourcing vs. recruitment for special task b) High average age of the employee/pruning of
staff c) Training, re-training seeds vis-a-vis low appetite of acquiring new skills d) All above
113. Important features of knowledge are
a. Does not suffer from scarcity/location no longer matters
b. Trade business, laws, taxes etc, cannot be applied easily +knowledge is difficult to quantify
c. Both (b) + (a) , d) Knowledge is difficult to quantify + (a) above
114. Knowledge management refers for critical issues of
a. Organisational adaptation b) Survival and competence against discontinuous
environmental change c) Synergisticscomination of data and information processing
capacity d) All above e) Only (a) + (c)
115. Knowledge management is the process of -a)Identifying knowledge resources b) Organising knowledge
resources
c) Manazing + Organisating + Identifying the knowledge resources d) Only (a) + (b)
116. In the process of implementation and scaling up, banks have faced variety of difficulties, such as a. Snapping of
connectivity/errors in software b) Slowdowns/down time/wrong entries in customer accounts + (a) above c) Natural
disasters like floods, earthquakes d) Fine tune contingency, planning and operational risk
117. The importance of training in banking sector depends upon the sense of seriousness of a. Chairman &
Managing Director b) Executive Director c) General Manager HRD and training, d) Reserve Bank of India
118. Banks have diversified platforms to deliver training such as
a. Classroom b) Business games/simulatious/online learning c) On job training/structured mentoring/coaching d) All
above e) Only (a) + (c)
119. In order to add value, training needs to be –a) Measured b) Invested c) mentored d) disseminated 120.
When can a bank employee be constructed as having professional attitude?
a. When punctual/respects the valuable time of others b) Follows the superior instructions/observant and
responsible c) Representative of his/her organisation's goodwill d) Both (a) to (c)
121. Demographic vairables do not influence the bank employees' overall work related attitude, such as
a.Age/income/length of service, b.Gender/educational qualification/ownership of bank
c. Length of service/income amount/cadre d) They do influence the attitude on all above
122. What influences the bank employees' attitude on work culture?
a. Educational qualification b) Ownership of bank c) Location of the branch d) All above e) Only (a) +
(c) 123. What is the major change in Public Sector Banks, after globalisation?
a. Shed off their traditional attitude b) resorted to aggressive marketing
c) Used better technology and customer orientation as against private sector banks
d) Success depends on the ability of banks for financial potential
124. Foreign banks are allowed to function in India, but this has led to- a)Restoration of PSBs net worth b) high level
of transparency
c) Indigenous banks to be competitive d) Both (a) + (b)
125. Most often training programmes are measured by reaction. Can it be on the basis of? a)Learning b) Behaviour,
c) Results , d) All above
ANSWER
1 D 2 A 3 C 4 C 5 D
6 C 7 D 8 A 9 C 10 A
11 D 12 C 1 D 1 E 15 A
3 4
16 A 17 A 1 D 1 C 2 A
8 9 0
2 B 2 A 2 A 2 C 2 B
1 2 3 4 5
2 C 2 A 2 D 2 C 3 A
6 7 8 9 0
3 D 3 D 3 C 3 A 3 B
1 2 3 4 5
3 D 3 B 3 B 3 C 4 A
6 7 8 9 0
4 D 4 B 4 B 4 C 4 D
1 2 3 4 5
4 A 4 C 4 A 4 B 5 A
6 7 8 9 0
5 E 5 C 5 A 5 C 5 D
1 2 3 4 5
5 C 5 C 5 B 5 D 6 D
6 7 8 9 0
6 A 6 B 6 D 6 D 6 C
1 2 3 4 5
6 C 6 D 6 C 6 C 7 D
6 7 8 9 0
7 D 7 C 7 A 7 B 7 B
1 2 3 4 5
7 D 7 C 7 D 7 B 8 A
6 7 8 9 0
8 D 8 E 8 A 8 B 8 A
1 2 3 4 5
8 E 8 C 8 B 8 A 9 D
6 7 8 9 0
9 D 9 A 9 D 9 B 9 B
1 2 3 4 5
9 A 9 A 9 B 9 A 10 A
6 7 8 9 0
10 D 10 D 10 C 10 A 10 A
1 2 3 4 5
10 B 10 B 10 C 10 D 11 D
6 7 8 9 0
111 D 112 C 113 D 11 D 11 C

4 5
116 B 117 A 118 D 11 A 12 D

9 0
12 D 12 D 12 A 12 C 12 D
1 2 3 4 5

MODULE - D: Credit Management (CAIIB 1- ABM )
TEST YOURSELF (BASED RECALLED QUESTIONS) – MODULE - D: CREDIT MANAGEMENT PRIORITY
SECTOR LENDINGS
1. The maximum loan amount availed for which Interest Subvention and Prompt Repayment Incentive is
available for the farmers who are involved in Animal Husbandry, Dairy and Fisheries (AHDF) activities is? a. Rs.
3 lakhs b. Rs. 5 lakhs c. Rs. 2 lakhs d. Rs. 10 lakhs
2. As per the amended definition of the MSME’s, a Small service enterprise is the one? a. Which has
investment in equipments of < Rs.10 cr & Annual Turnover < 50 crore. b. Which has investment in
equipments of < Rs.5 cr & Annual Turnover < 100 crore. c. Which has investment in equipments of < Rs.1 cr &
Annual Turnover < 5 crore. d. Which has investment in equipments of < Rs.5 cr & Annual Turnover < 50 crore.
3. Recently Government of India has announced Interest subsidy of 2% for Mudra Loan Borrowers. Which
category of Mudra Borrowers are eligible under this scheme? a. Kishor b. Shishu c. Tarun d. All the above 4.
What is the maximum tenure of the loan which can be sanctioned by a bank under Emergency Credit Line
Guarantee Scheme (ECLGS)? a. 5 years b. 3 years c. 4 years d. 10 years
Guarantee Scheme For Subordinate Debt (CGSSD)?
a. 9.25% b. 9% c. 9.50% d. Bank can decide and that rate should be linked to an external benchmark. 6.
Which of these following Ministry of Government of India has recently launched ‘Champions’ Portal which is a
single window solution to the most of the issues faced by MSMEs in India? a. Finance Ministry b. Ministry of
External Affairs c. Ministry of Corporate Affairs d. Ministry of Micro, Small and Medium Enterprises 7.Under
Emergency Credit Line Guarantee Scheme (ECLGS) a Scheduled commercial bank can sanctioned the facility
in the form of? a. Term Loan b. Over draft c. Working Capital Term Loan d. Any of the above 8. The maximum
credit limit the banks can sanction to the promoters of MSME units under Subordinate Debt scheme for
Stressed MSMEs under Credit Guarantee Scheme announced in Atma Nirbhar Package is? a. Rs. 100 lakhs b.
Rs. 50 lakhs c. Rs. 150 lakhs d. Rs. 75 lakhs
9. Recently RBI has permitted the banks to consider the loan sanctioned in Subordinate Debt scheme for
Stressed MSMEs under Credit Guarantee Scheme during their debt - equity calculation as? a. Term Loan b.
Current Liability c. Equity/Quasi Equity d. None of the above
10. What is the maximum credit facility can be sanctioned to eligible street vendors under PM SVANidhi
scheme? a. Rs. 1,00,000/- b. Rs. 10,000/- c. Rs. 50,000/- d. Rs. 25,000/-
11. The eligible interest subsidy under PM SVANidhi scheme of Government of India is?
a. 3% b. 5% c. 4% d. 7%
12. What is the maximum loan amount a MSME unit can apply through www.psbloansin59minutes.com?
a. 2 crore b. 10 crore c. 5 crore d. 4 crore
13. Which of the following is the nodal agency for managing the portal www.psbloansin59minutes.com?
a. SBI b. SIDBI c. CCIL d. RBI
14. GOI has recently amended the definition of MSMEs. To re-classify the MSMEs according to the new
system, banks to consider the value of Plant and Machinary as per?
a. Original purchase value of Plant and Machinery supported by the documentary evidence. b. Written Down
Value of Plant and Machinery mentioned in Udyam Registration Certificate which is supported by the
documentary proof. c. Written Down Value of Plant and Machinery mentioned in Udyam Registration
Certificate without any requirement of documentary proof. d. Written Down Value of Plant and Machinery
which is certified by a qualified Chartered Accountant.
15. As per the revised MSME definition, a ‘Medium Enterprise’ is the one? a. Which has Investment in Plant &
Machinery of more than Rs. 50 crore and Turn over of More than 250 crore. b. Which has Investment in Plant
& Machinery of less than Rs. 50 crore and Turn over of less than 250 crore. c. Which has Investment in
Plant & Machinery of less than Rs. 10 crore and Turn over of less than 50 crore. d. Which has Investment in
Plant & Machinery of less than Rs. 100 crore and Turn over of less than 250 crore.
16. A Self Help Group can have maximum number of members of ? a. 15 b. 20 c. 10 d. 12 17. As per RBI
guidelines, banks should not levy any loan related and ad hoc service charges/inspection charges
for priority sector loans up to ₹ 25,000. In case of Self Help Groups? a. This guideline is not applicable. b. This
guideline is applicable for the total Loan upto Rs. 25000 sanctioned to a group. c. In the case of eligible
priority sector loans to SHGs/JLGs, this limit will be applicable per member and not to the group as a
whole. d. This guideline is applicable for the total Loan upto Rs. 160000 sanctioned to a group 18. Scheduled
Commercial banks and foreign banks with more than 20 branches to lend _______percent of their
ANBC/CEOBE to Weaker Sections? a. 10 % b. 15% c. 13% d. 12%
19. As per the latest Master circular on Priority Sector Advances, advances to startups either fall under the
category of MSME or involved in agriculture activities are eligible to get qualified under priority sector advances
upto an exposure limit of? a. Rs. 10 crore b. Rs. 50 crore c. No Limit d. Rs. 100 crore 20. With respect to loans
to housing sector which are eligible to get classified under priority sector advances, which of the following limit is
appropriate? a. Loans to individuals up to ₹35 lakh in metropolitan centres and up to ₹25 lakh in other
centres provided the overall cost of the dwelling unit in the metropolitan centre and at other centres
does not exceed ₹45 lakh and ₹30 lakh respectively. b. Loans to individuals up to ₹50 lakh in metropolitan
centres and up to ₹40 lakh in other centres provided the overall cost of the dwelling unit in the metropolitan
centre and at other centres does not exceed ₹75 lakh and ₹50 lakh respectively. c. No limit d. Loans to
individuals up to ₹75 lakh in metropolitan centres and up to ₹50 lakh in other centres.
21. As per the latest Priority sector guidelines, the applicable lending targets for the commercial banks to the
Weaker Sections is? a. 10% of ANBC or CEOBE, whichever is higher. b. 15% of ANBC or CEOBE, whichever is
higher. c. 12% of ANBC or CEOBE, whichever is higher. d. 12.5% of ANBC or CEOBE, whichever is higher.
22. Scale of Finance with respect to Agriculture Crop Loans is fixed by? a. Respective Banks b. RBI c. Lead Bank
of the State d. District Level Technical Committee (DLTC)
23 Affordable Housing is defined as a housing project using at least ___of the Floor Area Ratio (FAR)/Floor
Space Index (FSI) for dwelling units with carpet area@ of not more than 60 square meters: a 75% b 60% c
50% d 40%
24 The urban cooperative banks (UCBs) are required to maintain priority sector lending of ___% of adjusted net
bank credit or credit equivalent of off-balance sheet exposure, which ever is higher, which is to be achieved by
31.03.24? a 40% b 60% c 75% d 85%
25 As per RBI’s 24.04.20 guidelines, in case of shortfall in achievement of priority sector lending targets, the
Urban Coop Banks have to deposit the amount with (a) RIDF of NABARD (b) other funds with NABARD or NHB
or SIDBI (c) MUDRA (d) EXIM Bank -a a to d all b a to c only c a and b only d a only
26 As per RBI’s 24.04.20 guidelines, the Urban Coop Banks have to calculate the achievement of priority sector
lending targets with reference to the following: a outstanding PS loans as on 31st March b outstanding PS loans
as on last Friday of March c average outstanding PS loans at end of 4 quarters d none of the above 27 With
effect from 1.4.2020, interest subvention in case of short term crop loans is available only if: a farmer is regularly
repaying the due amount b advance is allowed through KCC c farmer not aged beyond 60 years d advance is
covered under PM Fasal Bima Yojna.
28 As part of Govt. of India Covid19 Relief Package, Government of India will provide Interest subvention of
___% to prompt payees for a period of 12 months for Shishu loanees under MUDRA scheme. a 1% b 2% c
2.5% d 3%
29 As part of Govt. of India Covid19 Relief Package, special working capital credit facility shall be provided to
street vendors up to : a Rs.5000 b Rs.7500 c Rs.10000 d Rs.20000
30 As part of Govt. of India Covid19 Relief Package, NABARD will extend additional refinance support of Rs. ___
crore for crop loan requirement of Rural Co-op Banks & RRBs.
a Rs.30000 cr b Rs.25000 cr c Rs.20000 cr d Rs.15000 cr
31 As part of Govt. of India Covid19 Relief Package, a new scheme to provide interest subvention @ ___ % per
annum to dairy cooperatives for 20-21. a 1% b 2% c 2.5% d 3%
32 As part of Govt. of India Covid19 Relief Package, Financing facility of Rs. ___ crore will be provided for
funding Agriculture Infrastructure Projects at farmgate & aggregation points (Primary Agricultural Cooperative
Societies, Farmers Producer Organisations, Agriculture entrepreneurs, Startups, etc.) a Rs.30000 cr b
Rs.50000 cr c Rs.75000 cr d Rs.100000 cr
33 Which of the following in general, is eligible, as a borrower, under National Rural Livelihood Mission (NRLM)?
a SC/ST women and non-SC/ST women b women self help groups
c SC/ST and non-SC/ST men d any of the above
34 For consideration of sanction of loans to MSMEs, submission of ______ is a mandatory requirement.
a Udyam Registration Certificate b MSME Registration Certificate c Certificate of incorporation d certificate
of commencement of business
35 For the purpose of classification as an MSME, which of the following should be considered as value of plant
and machinery or equipment? a original cost b purchase cost c market cost d written down value 36 A core
investment company is not required to be registered with RBI when its assets size is : a less than Rs.10 cr b
Rs.10 cr or less c Rs.100 cr or less d less than Rs.100 cr
37 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission
(DAY-NRLM), the banks are to sanction cash credit loan for a period of __
a one-year b 2 years c 3 years d 5 years
38 As per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM),
DP for 2nd Year shall be 6 times of the existing corpus or minimum of ___ lakh, whichever is higher a Rs.1 lac b
Rs.2 lac c Rs.5 lac d Rs.6 lac
DP for 4th Year shall be more than ____ based on the Micro credit plan prepared by SHG and appraised by the
Federations / Support agency and the previous credit history. a Rs.1 lac b Rs.2 lac c Rs.5 lac d Rs.6 lac 40 As
per revised provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), DP for
3rd Year shall be min ____ based on the Micro credit plan prepared by SHG and appraised by the Federations
/Support agency and the previous credit history. a Rs.1 lac b Rs.2 lac c Rs.5 lac d Rs.6 lac 41 As per revised
provisions of Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM), in case of Term
Loan, banks are to sanction loan amount in doses. The amount of 1st dose shall be min ___: a Rs.1 lac b Rs.2
lac c Rs.5 lac d Rs.6 lac
in order to facilitate use of loans for augmenting livelihoods of SHG members, RBI advised bank that at least ___
of loans above Rs.2 lakh, be used primarily for income generating productive purposes. a 25% b 50% c 60% d
75%
(DAY-NRLM), the banks are to sanction cash credit loan of Rs.____, with the provision of annual drawing
power. a Rs.10 lac b Rs.6 lac c Rs.5 lac d Rs.3 lac
(DAY-NRLM), DP for First Year shall be 6 times of the existing corpus or minimum of ___ lakh, whichever is
higher a Rs.1 lac b Rs.2 lac c Rs.5 lac d Rs.6 lac
45. Loan under which of the following scheme/purpose, can be allowed within the DRI financing of 4%: a
housing loans up to Rs.20000 to poor families b housing loans up to Rs.20000 under National Housing bank
Scheme c housing loans up to Rs.20000 under Indira Awas Yojna d all the above
46. Revised Priority Sector Guidelines Issued By RBI Vide Their Circular dated 4th September 2020 And
The Revised Guidelines and are operational w.e.f________ (a)04.09.2020. (b) 23.09.2020 (c)22.10.2020
(d) 01.09.2020
47 The Cumulative target for priority sector lending, is ____ per cent of Adjusted Net Bank Credit (ANBC)or
Credit Equivalent of Off-Balance Sheet Exposures (CEOBE) (a)48 % (b) 60% (c)40% (d) 50% 48 The
mandated target of Small and Marginal farmers is modified to ___ from of Adjusted Net Bank Credit
(ANBC)from the existing level of ____ ofAdjusted Net Bank Credit (ANBC).
(a)7%; 8 % (b) 8 %; 6% (c)9%; 6% (d) 10%; 8%
49 The mandated target of weaker sections is increased to ____of Adjusted Net Bank Credit (ANBC) from the
existing level of ____ofAdjusted Net Bank Credit (ANBC). (a)12%;10 % (b) 12%; 8% (c)11%; 9% (d) 12%; 8%
50. Loan limits for Renewable Energy have been increased to _____ Crore from the existing limit of ____Crore.
(a)Rs35 Crore,Rs15 Crore (b) Rs20 Crore,Rs15 Crore (c)Rs15 Crore,Rs10 Crore (d) Rs30 Crore,Rs15 Crore
51. Loans up to ___ Crore per borrowing entity to FPOs/FPCs undertaking farming with assured marketing of
their produce at a pre-determined price is classified under Priority Sector, i.e. Agriculture Farm Credit. (a)Rs 10
Crore (b) Rs5 Crore (c)Rs25 Crore; (d) Rs30 Crore
52 with in the ----% target for total agriculture, a target of ______percent is prescribed for Small and Marginal
farmers. (a)18%;10 %
53. Lending by banks to NBFCs with Registered NBFCs and MFIs for on-lending under ‘Term lending’
component under Agriculture will be allowed up to ______per borrower Valid up to 31.03.2021. (a)Rs 25 Lakh
(b) Rs 10 Lakh (c)Rs 15 Lakh (d) Rs 100 Lakh
54. In case of priority sector loans the rates of interest on bank loans will be as per directives of _____?
(a)Priority Credit Wing, HO (b) Department of Regulation (DoR), RBI (c)Management Committee of the
Board (HO) (d) AEPS Wing HO
55. Bank credit to NBFCs (including HFCs) cap on-lending will be allowed up to an overall limit of ______ of
individual bank’s total priority sector as applicable for priority sector lending . (a)2 % (b) 3% (c)5% (d) 10%
56. Incremental export credit (other than in agriculture and MSME) over corresponding date of the preceding
year, up to 2 per cent of ANBC or CEOBE whichever is higher, subject to a sanctioned limit of up to ______
perborrower is eligible for being considered under priority sector
(a)Rs 15 Crore (b) Rs 20 Crore (c)Rs 35 Crore; (d) Rs 40 Crore
57.Loans to distressed persons [other than distressed farmers indebted to noninstitutional lenders] not
exceeding ______ per borrower to prepay their debt to noninstitutional lenders.
(a)Rs 0.50 Lakh, (b) Rs 1.00 Lakh, (c)Rs 1.50 Lakh, (d) Rs 2.00 Lakh,
58.As per RBI guidelines on priority sector credit banks: a register/ electronic record should be maintained by
the bank wherein the following information with thereof, etc. should be recorded. The aforesaid
register/electronic record should be reasons made available to all inspecting agencies (a)Date of Receipt (b)
Date of Sanction/Rejection (c)Date of Disbursement (d) All of the above
59.To ensure continuous flow of credit to priority sector, the compliance of banks will be monitored on
‘______’ basis. (a)Monthly (b) Quarterly (c)Half Yearly (d) Annual
60. The data on priority sector advances is required to be furnished by banks to FIDD, Central Office at
______ and ______ as per the reporting format
(a)Monthly, Quarterly (b) Quarterly, Half Yearly (c)Quarterly, Annual (d) Half Yearly, Annual
ANSWER
1 c 2 a 3 b 4 c 5 d 6 d 7 c 8 d 9 c 10 b 11 d 12 c 13 b 14 c 15 b 16 b 17 c 18 d 19 b 20 a 21 c 22 d 23 c
24 c 25 b 26 c 27 b 28 b 29 c 30 a 31 b 32 d 33 b 34 a 35 d 36 d 37 c 38 b 39 d 40 d 41 a 42 b 43 b 44 a
45 c 46 a 47 c 48 d 49 a 50 d 51 b 52 a 53 b 54 b 55 c 56 d 57 b 58 d 59 b 60 c
For the purpose of priority sector lending, ANBC denotes the outstanding Bank Credit in India [As
prescribed in item No.VI of Form ‘A’ under Section 42 (2) of the RBI Act, 1934]
Total Priority Sector: 40 % of ANBC or CEPBE, whichever is higher Agriculture : 18 % of ANBC & Sub
target - Small and Marginal Farmers:10 %, 2020-21- 8 % ,2021-22 -9 %, 2022-23- 9.5 %, 2023-24- 10 %
Micro Enterprises: 7.5 % of ANBC, Export -2 % of incremental credit, Advances to Weaker Sections :12
% of ANBC- 2020-21 -10 % ,2021-22- 11 %, 2022-23-11.5 %, 2023-24 -12 %, DIR :1 % of Previous year
gross advances Target to non-corporate farmers for FY 2020-21 will be 12.14 % of ANBC
No service charges/inspection charges should be levied on priority sector loans up to Rs. 25,000.
1 The targets and sub-targets set under priority sector lending, to be computed on the basis of the ANBC/
CEOBE as applicable as on the corresponding date of the preceding year, are as under:
Categories Domestic Foreign banks Regional Rural Banks Small
commercial with less than 20 Finance
banks (excl. branches Banks
RRBs & SFBs) &
foreign banks
with 20 branches
and above
Total 40 per cent of 40 per cent of ANBC 75 per cent of ANBC as 75 per cent of
Priority ANBC as computed as computed in para 6 computed in para 6 below or ANBC as
Sector in para 6 below or below or CEOBE CEOBE whichever is higher; computed in
CEOBE whichever whichever is higher; However, lending to Medium para
is higher out of which up to 32% 6 below or
can be in the form of Enterprises, Social CEOBE
Infrastructure and Renewable whichever is
higher.

lending to Exports and Energy shall be reckoned for
not less than 8% can priority sector achievement
be to any other priority only up to 15 per cent of
sector ANBC.
Agricultur 18 per cent of Not applicable 18 per cent ANBC or 18 per cent of
e ANBC or CEOBE, CEOBE, whichever is higher; ANBC or
whichever is higher; out of which a target of 10 CEOBE,
out of which a percent#is prescribed for whichever is
target of 10 SMFs higher; out of
percent#is which a target of
prescribed for Small 10 percent#is
and Marginal prescribed for
Farmers (SMFs) SMFs
Micro 7.5 per cent of Not applicable 7.5 per cent of ANBC or 7.5 per cent of
Enterprise ANBC or CEOBE, CEOBE, whichever is higher ANBC or
s whichever is higher CEOBE,
whichever is
higher
Advances 12 percent# of Not applicable 15 per cent of ANBC or 12 percent# of

to Weaker ANBC or CEOBE, CEOBE, whichever is higher ANBC or
Sections whichever is higher CEOBE,
whichever is
higher
# Revised targets for Agriculture and SMFs will be implemented in a phased manner as indicated above
The targets for lending to SMFs and for Weaker Sections shall be revised upwards from FY 2021-22
onwards as follows:
Categories Primary Urban Co-operative Bank
Total Priority 40 per cent of ANBC or CEOBE, whichever is higher, which shall stand increased to 75 per
Sector cent of ANBC or CEOBE, whichever is higher, with effect from March 31, 2024. UCBs shall
comply with the stipulated target as per the following milestones:
Existing target March 31, 2021 March 31, 2022 March 31,
March 31,
2023
2024
40% 45% 50% 60% 75%
Micro 7.5 per cent of ANBC or Credit Equivalent Amount of Off-Balance Sheet Exposure, whichever
Enterprises is higher
Advances to 12 per cent# of ANBC or credit equivalent amount of Off-Balance Sheet Exposure, whichever
Weaker is higher.
Sections
# Revised targets for weaker sections will be implemented in a phased manner as indicated below
Financial Year Small and Marginal Farmers target * Weaker Sections target ^
2020-21 8% 10%
2021-22 9% 11%
2022-23 9.5% 11.5%
2023-24 10% 12%
* Not applicable to UCBs ^ Weaker Sections target for RRBs will continue to be 15% of ANBC or
CEOBE, whichever is higher.
Export Credit (not applicable to RRBs and LABs)
Export credit under agriculture and MSME sectors are allowed to be classified as PSL in the respective
categories viz. agriculture and MSME. Export Credit (other than in agriculture and MSME) will be allowed to be
classified as priority sector as per the following table:
Domestic banks / WoS of Foreign banks/ Foreign banks with 20 Foreign banks
SFBs/ UCBs branches and above with less than
20

branches
Incremental export credit over corresponding Incremental export credit over Export credit up to
date of the preceding year, up to 2 per cent of corresponding date of the preceding 32 per cent of ANBC
ANBC or CEOBE whichever is higher, subject to year, up to 2 percent of ANBC or or
a sanctioned limit of up to ₹ 40 crore per CEOBE whichever is higher. CEOBE whichever is
borrower. higher.
LOANS & ADVANCES
1. RBI increased the permissible loan to value ratio (LTV) for loans against pledge of gold ornaments and
jewellery for nonagricultural purposes from __ per cent to __ per cent.
a 75 per cent to 90 per cent b 75 per cent to 85 per cent c 75 per cent to 80 per cent d
60 per cent to 75 per cent
2. As per the Banking Regulation Act-1949, Banks to file 3 copies of their Balance sheet and financial
statements along with the auditor’s report with RBI as returns within a period of?
a. 3 months from the end of accounting period. However, RBI can extend this requirement for further
period of 3 months in an unavoidable circumstance.
b. 6 months from the end of the accounting period. c. 6 months from the end of accounting period. However,
RBI can extend this requirement for further period of 3 months in an unavoidable circumstance. d. 12 months
from the end of the accounting period.
3. An interest rate that has been adjusted to remove the effects of inflation to reflect the real cost of funds to the
borrower and the real yield to the lender or to an investor is known as a. Absolute Interest Rate b. Real Interest
Rate c. Arbitraged Interest Rate d. Narrow Interest Rate
4. A Hypothecation becomes pledge when, a. Goods are given for possession to the bank, by the borrower.
b. Goods are held in a specified godown owned by the borrower. c. When the borrower who has hypothecated
the goods in favour of bank defaulted. d. All the above.
5. The Term ‘Hypothecation’ is defined under? a. Banking Regulation Act 1949. b. Transfer of Properties Act
1987 c. SARFAESI Act 2002 d. None of these
6. The Net Working Capital will be negative when?
a. Current Liabilities are more than Current Assets. b. Current Liabilities are less than Current Assets. c.
Term Liabilities and Equity are less than Fixed Assets d. Both (a) & (c)
7. A loan has been sanctioned to a limited company against hypothecation of stocks. Company is required to
get the charge registered with
a. Registrar of Companies b. Local Sub registrar c. Lead Bank d. Any of the above
8. The Repayment capacity in case of Term Loans is assessed Through?
a. Interest Coverage Ratio b. Debt Equity Ratio c. Debt Service Coverage Ratio d. All the above
9. The limitation period for a ‘Demand Promissory Note’ is?
a. 4 years from the date of sanction of the facility. b. 3 years from the date of sanction of the facility c. 3
years from the date of execution of Demand Promissory Note. d. 12 years from the date of execution of
Demand Promissory Note.
10 Which of the following groups of banks in not required to send credit information on large exposures to
CRILC? a scheduled commercial banks b Private bank
c urban cooperative banks d none of these
11 Banks can deduct the equivalent amount of incremental credit disbursed by them as ______, over and above
the outstanding level of credit to these segments as at the end of the fortnight ended January 31, 2020 from their
net demand and time liabilities (NDTL) for maintenance of the cash reserve ratio (CRR)- a retail loans to
automobiles, residential housing, and loans to micro, MSMEs b retail loans to consumer goods, residential
housing, and loans to micro, MSMEs c retail loans to personal loans, residential housing, and loans to micro,
MSMEs d retail loans to residential housing, and loans to micro, MSMEs only
12 As per the normal time norms, the working capital limits should be renewed by banks, at least once in a
period of ___ a 2 years b 1 year c 6 months d 3 month
13 Banks can prescribe ____ for review/renewal of borrower limits so that lower rated borrowers whose
financials show signs of problems are subjected to renewal control more frequently. a fixed time schedules b
suitable time schedules c differential time schedules d all the above
14 Current accounts in banks, as per RBI directions, can be in the form of 1)normal current account 2)
collection account 3) escrow account – a only 1 b 1 and 2 only c 1 and 3 only d 1, 2 and 3 all
15 No bank shall open current accounts for customers who have availed credit facilities in the form of ____
from the banking system.
a term loans b demand loans c cash credit or overdraft d letter of credit
16 Where a bank’s exposure to a borrower is less than ____ per cent of the exposure of the banking system to
that borrower, while credits are freely permitted, debits to the CC/OD account can only be for credit to the
CC/OD account of that borrower with a bank that has ___ per cent or more of the exposure of the banking
system to that borrower.
a 20%, 10% b 15%, 10% c 12.5%, 12.5% d 10%, 10%
17 Banks with exposure to the borrower of less than ___ per cent of the exposure of the banking system can
offer working capital demand loan (WCDL) / working capital term loan (WCTL) facility to the borrower. a 1% b
5% c 7.5% d 10%
18 In case of borrowers where exposure of the banking system is ____or more, banks shall be required to put in
place an escrow mechanism.
a 100 cr or more b 50 cr or more c 20 cr or more d 10 cr or more
19 In case of borrowers where exposure of the banking system is _____ , there is no restriction on opening of
current accounts by the lending banks. However, non-lending banks may open only collection accounts- a 5 cr
or above but < Rs.50 cr b 5 cr or above but < Rs.25 cr c 10 cr or above but < Rs.50 cr d 10 cr or above but <
Rs.25 cr
20 In case of borrowers where exposure of the banking system is less than ____, banks may open current
accounts subject to obtaining an undertaking from such customers:
a 10 cr or more b 5 cr or more c 2 cr or more d 1 cr or more
21 A firm has obtained a term loan of Rs.12 lac and its capital is Rs.4 lac. The firm has created general reserve of
firm is:
a 1.71:1 b 1.89:1 c 2.00:1 d data incomplete. Calculation not possible
22 When book debts are recovered by a firm and amount credited to bank account, what is the effect: a
current ratio increases b current ratio decrease c quick ratio increase d quick ratio decreases e there is no
effect
ANSWER
d
1 a 2 a 3 b 4 a 5 c 6 a 7 a 8 c 9 c 10
11 a 12 b 13 c 14 d 15 c 16 d 17 d 18 b 19 a 20
21 a 22 e
NPA & RECOVERY MANAGEMENT
1. RBI’s onetime restructuring plan for MSMEs is applicable to the MSME units with an exposure limit of? a.
Funded exposure with a single bank not exceeding Rs. 25 crore b. Both Funded and Non funded Exposure with a
single bank not exceeding Rs. 25 crore
c. The aggregate Funded and Non funded Exposure with banks and financial institutions not exceeding
Rs. 25 crore. d. The aggregate Funded and Non funded Exposure only with the scheduled commercial banks
not exceeding Rs. 25 crore.
2. As per the recent Resolution Frame work released by RBI for handling Covid- 19 related stress, in case a
bank restructures an eligible MSME account, the percentage of provision it needs to keep for the restructured
account is?
a.10% of the total funded and non funded exposure. b. 5% of the total funded and non funded exposure. c. 5%
of the total exposure. d. Additional provision of 5% over and above the provision already held by them for
that account.
3. As per the recent Resolution frame work announced by RBI to manage Covid 19 related stress on asset
quality, the resolution plan approved for an exposure of Rs. ____and above shall require an Independent Credit
Evaluation (ICE) by any one credit rating agency (CRA) authorized by the Reserve Bank. a. Rs. 50 Cr b. Rs. 75
Cr c. Rs. 25 Cr d. Rs. 100 Cr
4. As per the recent Resolution frame work announced by RBI to manage Covid 19 related stress on asset
quality, which of the following can be a permissible resolution measure a bank can undertake in managing their

exposure? a. Restructuring of Advances and granting the moratorium for a maximum period of 2 years. b.
Conversion of any interest accrued, or to be accrued, into another credit facility or sanctioning additional credit
facility. c. Compromise or One Time Settlement in Account. d. All the above e. Only a & b 5. RBI has recently
constituted an expert committee to recommend a list of financial parameters and sector specific benchmark
ranges for such parameters to implement a resolution plan in handling the Covid 19 related stress on loan
accounts. The chairman of the 5 members committee formed by RBI is? a. Mr. Diwakar Gupta b. Mr. K V
Kamath c. Mr. Ashvin Parekh d. Mr. Sunil Mehta.
6. As per the Resolution Frame work announced by RBI to manage Covid-19 related stress, in case of the
accounts under consortium of Multiple Banking arrangement, the resolution plan should be accepted by a. 60
per cent by value of the total outstanding credit facilities (fund based as well nonfund based) , and not less than
75 per cent of lending institutions by number. b. 75 per cent by value of the total outstanding credit
facilities (fund based as well non-fund based) , and not less than 60 per cent of lending institutions by
number. c. 60 per cent by value of the total outstanding credit facilities (fund based as well nonfund based) ,
and not less than 50 per cent of lending institutions by number. d. 60 per cent by value of the total outstanding
credit facilities (fund based as well nonfund based) , and not less than 80 per cent of lending institutions by
number.
7. A monetary ceiling of Rs.20 lac (max) has been imposed for entertaining cases by which of the following: a
Consumer Courts b Lok Adalat c District Courts d Debt Recovery Tribunals
8. The period of limitation for execution of decree passed by the court is?
a. 13 years b. 9 years c. 3 years d. 12 years
9. One time restructuring facility is available for MSME sector, where the loan amount is up to __ as on
01.01.20: a Rs.10 lac b Rs.100 lac c Rs.1000 lac d Rs.2500 lac
10 One time restructuring facility is available for MSME sector, where the loan amount was within prescribed
limit, as on 01.01.20 and : a standard account as on 01.01.20 b restructuring is implemented before 31.12.20 c
borrower is GST registered d all
11. If working capital limits are not renewed on time, the account shall be treated NPA after ____ from due
date of renewal. a 90 days b 180 days c 270 days d 360 days
classification wef 30.06.21- a Rs.1000 cr or more b Rs.2000 cr or more c Rs.5000 cr or more d Rs.10000 cr or
more
classification wef 30.09.21- a Rs.1000 cr or more but less than Rs.2000 cr
b Rs.2000 cr or more but less than Rs.3000 cr c Rs.5000 cr or more but less than Rs.10000 cr d Rs.10000 cr
or more but less than Rs.20000 cr
14. An NPA has been sold by BankB to a bank. What is the minimum period for which the account should have
been in the books of Bank-B before sale to the bank:
a 12 months as NPA b any NPA account c 24 months as doubtful account d 24 months as sub-standard
including special mention account status e sale of ARC is not permitted.
15. What will be due date for a bill dated 27.12.2016 payable 30 days after date:
a Jan 23, 2017 b Jan 25, 2017 c Jan 26, 2017 d Jan 27, 2017
16. What type of right the banks are having under SARFAESI Act in case of default by the borrower, in
repayment of the loan: a take possession of the secured assets, b takeover management of the assets c to sell
or lease the secured assets d any of the above
17 What is the time period of the notice which is required to be given by a bank for sale of security charged to
the bank after taking possession under the provision of Securitisation and Reconstruction of Financial Assets
and Enforcement of Security Interest Act 2002:
a 15 days b 30 days c 45 days d 60 days e 90 days
18. As per extant instructions of RBI, what is the maximum amount limit that the bank can fix up to which
minors may be allowed to operate their deposit accounts independently. a max Rs.2 lac b max Rs.1 lac c max
Rs.50000 d at discretion of banks
19. In a loan account, the Central Govt. has given guarantee. The loan account is overdue for the last 2 years
and 5 months. What is the provision %age on the loan: a 0.40% b 10% c 20% d 30% e: No provision is to be
made.
20 A loan is guaranteed by the Guarantee of State govt. and it is running irregular for the last 5 months. The
loan will be classified as ___: a standard account b special mention account c sub-standard unsecured account
d sub-standard secured account e: None of the above
ANSWER
d
1 c 2 d 3 d 4 e 5 b 6 b 7 b 8 d 9 d 10
11 b 12 b 13 b 14 b 15 b 16 d 17 b 18 d 19 e 20
d
1. As per RBI guidelines, the turnover method of assessment should be applied for working capital limits of up to Rs
in case of SSI units. (a) One Crore (b) Two Crore (c) Five Crore (d) Ten Crore
2. Interest rates, regulated by RBI, are applicable for credit limits up to Rs. _______ lakh
(a) One (b) Two (c) Five (d) Ten *(e) None of these
3. The total priority sector target for foreign banks, operating in India, with less than 20 branches is % of
ANBC or credit equivalent of Off Balance Sheet Exposure whichever is higher.
(a) 20% *(b) 32% (c) 40% (d) 18%
4. Net working capital meas which of the following?
(a) Total current assets minus bank finance
(b) Total current assets minus credit from suppliers
*(c) Total current assets minus total current liabilities , (d) Short term sources brought in by promoters 5.
Which of the following statements is not true for efficient inventory management?
(a) It results in reduction in inventory, (b) It reduces the working capital requirements of the enterprise. *(c) It reduces
the NWC available with the enterprise. (d) It increases the Inventory Turnover Ratio if the level of sales remains the
same.
6. Which of the following is not a source for meeting working capital requirements?
(a) Suppliers Credit (b) Bank Finance (c) Other current liabilities *(d) Advance payment to suppliers 7. Which
of the following is a liquidity ratio? -*(a) Quick Ratio (b) TOL/TNW (c) DSCR (d) DER 8. Which of the following
is not correct regarding Current Ratio?
(a) For same level of current assets, increase in NWC results in increased current ratio. (b) The current ratio can be
less than one *(c) The current ratio can be negative. (d) Current ratio is an indicator of liquidity.
9. The commercial paper can be issued by which of the following?
*(a) Corporates (b) Corporates and partnership firms (c) Any Business Entity (d) None 10.Which of the following is
not correct regarding forfeiting?
(a) It is a form of working capital finance
(b) It is used in export finance
*(c) It is with recourse to the drawer of the bill.
(d) Under this financier discounts the bills drawn on buyer. 11.Which of
the following is correct regarding Letters of Credit?
(a) These are opened by a bank for export sales by the client
(b) These are opened by a bank for local sales by the client.
(c) Letters of Credit do not carry much risk for the opening bank.
*(d) Letters of Credit are opened by a bank for purchase of goods by' the client.
12.Under Turnover method of assessment, the limit is sanctioned at per Cent of the projected turnover.
(a) 25 *(b) 20 (c) 30 (d) 35
13. Cash Budget Method of assessment is more suitable for those business enterprises which have (a) uniform level of
operations (b) High level of operations (c) Low level of operations *(d) Seasonal Operations
14.A DPG is issued by the bank for _____________ , by its client
(a) Sale of goods (b) Purchase of goods (c) Sale of capital goods *(d) Purchase of capital goods
15.Which of the following statements is not true for an infrastructure project? (a) It has long gestation period
*(b) It reduces the risk for the lender as his funds get assure deployment for a long time.
(c) The debt equity ratio is normally high for an infrastructure project. (d) The implementation period is usually long
16.Which of the following is not a source of funds for meeting the cost of purchase of fixed assets by an enterprise? (a)
Credit by supplier of assets (b) Internal accruals (c) Debentures *(d) DPG 17.Which of the following is a ratio indicative
of the repayment capacity of a borrower?
(a) Quick ratio (b) TOLJTNW *(c) DSCR (d) DER
18.Which of the following is not correct regarding term loans by the banks?

(a) Asset liability matching is an important consideration in term financing
b) Instalment•of term loan, payable within one year is considered as current liablility
c)Repayment of a term loan can be in equated monthly instalments. *(d) Current ratio is the most important ratio in
appraisal of a term loan
19. Project loans can be given by the bank to (a) Only corporate (b) Only corporate and partnership firms (c)
Only corporate, partnership firms and societies *(d) Any business entity
20.Which of the following is not correct regarding infrastructure project by the banks?
(a) Banks are allowed to funds promoters' equity in certain circumstances
(b) Exposure norms are relaxed by RBI
*(c) Asset liability mismatch has been permitted by RBI
(d) MFG provides liquidity support to banks
21. Which of the following statements is not correct for project appraisal?
(a) Examination of technical feasibility is carried out
(b) The contribution of promoters forms a part of economic appraisal
(c) Promoters' background is part of the management appraisal
*(d) Capacity of promoters to arrange for additional funds, in case of contingencies, forms a part of
economic appraisal
22.Which of the following is not a purpose of credit monitoring
(a) To ensure end use of the funds by the borrower
(b) To detect any deterioration in the security charged to the bank
(c) *To comply with the guidelines of the RBI
(d) To ascertain that the business continues to run on the projected lines
23.Which of the following is not a tool available to the bank for credit monitoring?
(a) *Sending regular reminders to the borrower
(b) Periodic visits to the business place for inspection
(c) Analysis of financial statements
(d) Examine conduct of borrower's account
24.Which of the following is not a method of detecting wrong mention of inventory in a stock statement?
(a) Stock audit
(b) Inspection of stocks
(c) *Analysis of financial statements
(d) Cross-check from the balance sheet figure
25.Which of the following is not a method of detecting wrong mention of receivables in statement submitted by the
borrower?
(a) *Analysis of financial statements
(b) Cross check from the balance sheet figure
(c) Receivables audit
(d) Inspection of books of account
26.Which of the following is not a danger sign about the direction of business of the borrower?
(a) Devolvement of LCs, invocation of Bank Guarantees
(b) Demand for higher limit
(c) Delays in submission of stock/receivables statements
(d) *Return of cheques/bills
27.Which of the following is not an unsatisfactory sign in conduct of the account of the borrower?
(a) Delay in payment of interest/instalments,
(b) Routing of transacrions with some other bank
(c) Frequent over drawings
(d) *High turnover
28.Which of the following is not the purpose of credit audit?
(a) Improvement in the quality of credit portfolio
(b) Review sanction process and compliance status of large loans
(c) Feedback on regulatory compliance
(d) *Stock inspection
29. Purpose of appointing bank's nominee on company's board of borrowing company is:
(a) *To keep a tab on the important decisions of the board
(b) To be a part of the management
(c) To guide the company for better working

(d) To safeguard the securities charged to the bank 30.Which of the
following is not a risk mentioned in the Basel II Accord
(a) Operational risk (b) Market risk *(C) Default risk (d) Credit risk 31.Which of the following
is not a credit risk?
(a) Unwillingness of a customer to meet his commitment relating to a financial transaction with the bank. (b) Inability of
the customer to reimburse the bank in case of invocation of a guarantee or devolvement of an L.C.
(c) Inability of a customer to meet his commitment relating to a financial transaction with the bank.
(d) *Loss to the bank due to fraud.
32.Which of the following is an external factor affecting credit risk
(a) *Government policies
(b) Faulty loan and repayment structuring
(c) Overexposure (concentration) of credit to a particular segment
(d) Lack of an efficient recovery machinery
33.Which of the following is not an internal factor affecting credit risk
(a) Excessive lending to cyclical industries
(b) Low quality of credit appraisal and monitoring
(c) Deficiencies in the loan policy of the bank
(d) *Protectionist policies of other countries.
34.Which of the following is not a macro level action for mitigation of credit risk/
(a) Periodically reviews of the exposure norms for single and group borrowers
(b) *Improving appraisal standards of credit proposals
(c) Frequent reviews of norms and fixing internal limits for aggregate commitments to specific sectors of the
industry/business
(d) Periodic review of total credit portfolio based on quality parameters 35.Which of
the following is not a micro level action for mitigation of credit risk?
(a) Improving sanctioning and delivering process
(b) Obtention of collateral security
(c) Monitoring and review of individual proposals/categories of proposals
(d) *Periodical reviews of the exposure limits for business/industry segment 36.Which of the
following statements is not true regarding credit derivative products?
(a) These are used to hedge credit risk to the bank
(b) The protection buyer is the lending bank
(c) The protection seller can be another bank or any other organization
(d) *The credit asset is transferred in case of derivatives 37.Credit
rating is a system of
(a) *Measuring risk
(b) Mitigating risk
(c) Migrating risk
(d) Credit appraisal 38.Internal
rating means:
(a) Rating the project
(b) Rating the promoters
(c) Rating the risk for internal use.
(d) *None of the above
.39.For external credit rating, banks depend on
(a) *Rating agencies
(b) Experienced staff of the bank
(c) Banking consultants
(d) None of the above
40.Which of the following is not an approach for assessment of credit risks, laid down under Basel II
Accord? (a) Standardised approach
(b) Foundation Internal Rating Based (IRBO approach
(c) Advanced Internal Rating Based (IRB) approach
(d) *Simplified Internal Rating Based (IRB) approach
41.Which of the following statements is true regarding Standardised approach?

(a) *It has already been adopted by all the banks
(b) It has been adopted only foreign banks operating in India.
(c) It has been adopted by the foreign banks operating in India and some of the Indian
banks (d) It has to be adopted by the all the banks by March 2010
42.RB1 has suggested which of the following earliest date of making application by banks to RBI regarding
implementation of the advanced approaches (Foundation as well as Advanced IRB)?
(a) *1, April 2012
(b) 1, April 2013
(c) 1, April 2014
(d) 1, April 2015
43.The aim of a rehabilitation programme is:
(a) *To make the operations of the enterprise viable again
(b) To help in employment generation
(c) To comply with RBI guidelines
(d) To increase bank's-advances
44. Banks enter into compromise with borrowers in case of default, because:
(a) Recovery through legal action is time consuming
(b) Adequate security is not available
(c) Realisation or security may be difficult3 (d)- *All the above ( ANSWER IS - * MARKS )
TEST YOUR SELF: PRIORITY SECTOR ADVANCES

01 RBI has revised the priority sector lending guidelines with effect from April 23, 2015 on the basis of
recommendations of an Internal Working Group (IWG) headed by: a) Ms Lily Vadera b) M. V. Nair c) C S Murthy d) R.
Gandhi
02 Which of the following has/have been included as part of priority sector?
a) Medium enterprises b) Social Infrastructure c) Renewable Energy, d) None of these, e) All of these 03
Which of these has been added in the list of priority sector?
a) Agriculture b) Small Enterprises c) Medium Enterprises d) Educational Loan 04 As per April 15 guidelines on
Priority Sector, which of the following distinctions have been dispensed with? a) Micro and Small Enterprises
b) Marginal and Small farmers
c) Direct and indirect agricultural advances d)Self Help Group and Joint Liability Group 05 Within agriculture, the target
for lending to small and marginal farmers has been prescribed as ___% of ANBC or CEOBE whichever is higher. a) 5%
b) 6% c) 7.5% d) 8%
06 The target for lending to Micro enterprises has been prescribed as ___% of ANBC or CEOBE whichever is higher. a)
5% b) 6% c) 7.5% d) 8%
07 As per April 15 guidelines on Priority Sector, the target for lending to weaker sections has been increased to of
ANBC or CEOBE, whichever is higher. a) 8% b) 10% c) 12% ,d) There is no change in the target for weaker sections. 08
Foreign Banks with 20 branches and above in India are required to achieve priority sector targets and sub-targets for
Agriculture and Weaker Sections by ___. a) March 31, 2018 b) 2019-20 c) 2020-21 d) 2015-16 09 Foreign Banks with
less than 20 branches in India are required to achieve priority sector targets and sub-targets for Agriculture and Weaker
Sections by ___. a) 2018-19 b) 2019-20 c) 2020-21 d) 2015-16
10 Bank loans to food and agro processing units will form part of _____.
a) Agriculture b) Small Enterprises c) Indirect agriculture d) Medium enterprises
11 Export credit upto ____% of ANBC or CEOBE, whichever is higher, will be eligible as part of priority sector for foreign
banks with less than 20 branches. a) 10% b) 25% c) 32% d) 40%
12 For domestic commercial banks and foreign banks with 20 or more branches in India, the incremental export credit
over corresponding date of the preceding year will be reckoned as priority sector upto ____% of ANBC or CEOBE,
whichever is higher. a) 1% b) 2% c) 5% d) 10%
13 The priority sector non-achievement will be assessed on _____ average basis at the end of the respective year from
2016-17 onwards. a)fortnightly b) monthly c) quarterly d) half yearly e) yearly 14.As per revised guidelines on PS (April
15), for domestic commercial banks, the target for Priority sector will be _____of Adjusted Net Bank Credit (ANBC) or
Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE),

whichever is higher.
a)32% b) 40% c) 42% d) 25%
15. Within the 18% target for agriculture, target for Small and Marginal Farmers will be 8% of ANBC or CEOBE,
whichever is higher. This target to be achieved in a phased manner i.e., 7% by _____and 8% by a)March 2017, March
2018 ; b) March 2018, March 2019 c)March 2016, March 2017 ; d)March 2015, March 2016 16.The target for Micro
Enterprises i.e. 7.5% of ANBC or CEOBE, whichever is higher to be achieved in a phased manner i.e. 7% by
______and 7.5% by _____ a)March 2017, March 2018 ; b) March 2018, March 2019 c)March 2016, March 2017 ;
d)March 2015, March 2016
17. For computation of Adjusted Net Bank Credit, following components are considered – (1) Bank Credit in India; (2)
Bills Rediscounted with RBI and other approved Financial Institutions; (3) Bonds/debentures in Non-SLR categories
under HTM category+ other investments eligible to be treated as priority sector +Outstanding Deposits under RIDF and
other eligible funds with NABARD, NHB and SIDBI on account of priority sector shortfall + outstanding PSLCs; (4)
Eligible amount for exemptions on issuance of long-term bonds for infrastructure and affordable housing; (5) Eligible
advances extended in India against the incremental FCNR (B)/NRE deposits, qualifying for exemption from CRR/SLR
requirements. Which of the following is correct regarding calculation of ANBC? : a) 1–2+3-4-5 b) 1+2+3-4-5 ; c)
1-2+3+4-5 d) 1-2-3+4+5
18. Lending to agriculture sector has been re-defined to include which of the following? : a) Farm Credit ; b) Agriculture
Infrastructure , c) Ancillary activities d) Both (a) and (b) only & e) All of these 19. Which of the following is not part of
agricultural advance?
a) Crop loans to farmers, which will include traditional/non-traditional plantations and horticulture, and, loans for allied
activities.
b) Housing Loan to farmers for their own residence. ;
c) Medium and long-term loans to farmers for agriculture and allied activities
d) Loans to farmers for pre and post-harvest activities, viz., spraying, weeding, harvesting, sorting, grading and
transporting of their own farm produce
20.As per revised guidelines on PS (April 15), loans to farmers up to _____ against pledge/hypothecation of agricultural
produce (including warehouse receipts) for a period not exceeding 12 months ; a) Rs 10 lakh b) Rs 20 lakh; c) Rs 50
lakh d) Rs 100 lakh
21 Which of the following is not an agricultural advance?
a) Loans to distressed farmers indebted to non-institutional lenders.
b) Loans to farmers under the Kisan Credit Card Scheme.
c) Loans to all farmers for purchase of land for agricultural purposes.
d) None of these
22 Loans to corporate farmers, farmers' producer organizations/companies of individual farmers, partnership firms and
co-operatives of farmers directly engaged in Agriculture and Allied Activities, viz., dairy, fishery, animal husbandry,
poultry, bee-keeping and sericulture will be part of priority sector provided loan is up to _____ per borrower. a) Rs 2
crore b) Rs 5 crore c) Rs 10 crore d) None of these
23 Loans for construction of storage facilities (warehouses, market yards, godowns and silos) including cold storage
units/ cold storage chains designed to store agriculture produce/products, irrespective of their location will be part of
priority sector provided aggregate sanctioned limit from the banking system is
up to Rs __________per borrower -a) Rs 10 crore b) Rs 20 crore c) Rs 50 crore d) 100 crore
24 Which of the following is not part of agriculture infrastructure as per PS guidelines issued in April 15?
a) Loans for construction of storage facilities to store agriculture produce/products.
b) Soil conservation and watershed development.
c) Plant tissue culture and agri-biotechnology, seed production, production of bio-pesticides, bio-fertilizer, and vermi
composting. d) None of these
25 Loans to co-operative societies of farmers for disposing of the produce of members will be part of agriculture
provided loan is up to Rs. a) Rs 1 crore b) Rs 2 crore c) Rs 5 crore d) Rs 10 crore
26 Loan for Food and Agro-processing will be part of Agricultural advance provided sanctioned limit from the banking
system is up to _____ per borrower ; a) Rs 10 crore b) Rs 20 crore c) Rs 50 crore d) Rs 100 crore
27 Which of the following is not part of agricultural advance?
a) Loans for setting up of Agriclinics and Agribusiness Centres.
b) Bank loans to Primary Agricultural Credit Societies (PACS), Farmers’ Service Societies (FSS) and Large-sized
Adivasi Multi-Purpose Societies (LAMPS) for on-lending to agriculture

c) Loans sanctioned by banks to MFIs for on-lending to agriculture sector.
d) Outstanding deposits under SEDF and other eligible funds with SIDBI on account of priority sector shortfall.
28 Farmers with landholding of up to ______ are considered as Marginal Farmers and farmers with a landholding upto
____ are considered as Small Farmers
a) 1 hectare, 2 hectares b) 2.5 hectare, 5 hectare c) 1 hectare, 2.5 hectare,d) 5 hectare, 10 hectare 29 Loans to farmers'
producer companies of individual farmers, and co-operatives of farmers directly engaged in Agriculture and Allied
Activities, is classified as Small and Marginal farmer where the membership of Small and Marginal Farmers is not less
than ____ by number and whose land-holding share is also not less than ____of the total land-holding
a) 50%; 50% b) 50%; 75% c) 75%; 75% d) 75%; 50%
30 Which of the following will not be classified as priority sector advance?
a) Loan to Micro manufacturing enterprises
b) Loan to Small manufacturing enterprises
c) Loan to Medium manufacturing enterprises, d) None of these
31 Bank loan to Micro, Small and Medium manufacturing Enterprises will be part of priority sector provided the loan is
up to _____. a) Rs 5 crore,b) Rs 10 crore c) Rs 20 crore d) Irrespective of amount of loan
32 Bank loan to Micro and Small service Enterprises will be part of priority sector provided the loan is up to _____. a)
Rs 2 crore b) Rs 5 crore c) Rs 10 crore d) Rs 20 crore e) None of these
33 Bank loan to Medium service Enterprises will be part of priority sector provided the loan is up to _____.
a) Rs 2 crore b) Rs 5 crore c) Rs 10 crore d) Rs 20 crore e) None of these
34 Loans to units in the Khadi and Village Industries sector will be eligible for classification as Micro enterprise under
the sub-target of 7%/7.5% prescribed for Micro Enterprises under priority sector provided the investment in plant and
machinery is up to _____.
a) Rs 10 lakh b) Rs 25 lakh c) Rs 2 crore d) Rs 5 crore e) None of these
35 Credit outstanding under General Credit Cards (including Artisan Credit Card, Laghu Udyami Card, Swarojgar Credit
Card, and Weaver’s Card etc. catering to the non-farm entrepreneurial credit needs of individuals) will be part of
advance to Micro and Small enterprises provided the loan is up to _____. a) Rs 50,000 b) Rs 500,000 c) Rs 10,00,000
d) None of these
36 Which of the following is not part of Micro, Small and Medium enterprises under priority sector advance? a) Loans to
entities involved in assisting the decentralized sector in the supply of inputs to and marketing of outputs of artisans,
village and cottage industries.
b) Loans to co-operatives of producers in the decentralized sector viz. artisans, village and cottage industries. c)
Loans sanctioned by banks to MFIs for on-lending to MSME sector.
d) Outstanding deposits with SIDBI on account of priority sector shortfall. e)None of these 37 As per revised PS
guidelines (April 15) banks are required to lend 40% of advance to Micro and Small enterprises to units with investment
in plant and machinery up to_____. a) Rs 2 lakh, b) Rs 4 lakh c) Rs 10 lakh d) None of these as there is no such target.
38 The MSME units will continue to enjoy the priority sector lending status up to _____years after they grow out of the
MSME category concerned. a) one b) two c) three d) four e) None of these
39 Incremental export credit over corresponding date of the preceding year, up to 2% of ANBC or CEOBE, whichever is
higher, effective from April 1, 2015 will be part of priority sector provided sanctioned limit is up to ___per borrower and
annual turnover of up to ______.
a) Rs 5 crore; Rs 10 crore b)Rs 10 crore; Rs 25 crore c) Rs 25 crore; 100 crore d) Rs 50 crore; Rs 100 Cr.
40 Loans to individuals for educational purposes including vocational courses in India will be part of Priority sector
provided loan is up to _____. a) Rs 5 lakh b) Rs 10 lakh c) Rs 20 lakh d) Rs 25 lakh
40 Loans to individuals for educational purposes for studies abroad will be part of Priority sector provided loan is up to
_____. a) Rs 5 lakh b) Rs 10 lakh c) Rs 20 lakh Rs 25 lakh e) None of these
41 A loan of Rs 20 lakh has been sanctioned to an individual for studies in India. How much of it will be part of priority
sector? a) Rs 5 lakh b) Rs 10 lakh c) Rs 20 lakh d) None of these
42 Loan for purchase/construction of a dwelling unit per family in a metropolitan area will be classified as priority sector
provided loan is up to _____ and the overall cost of the dwelling unit does not exceed ____. a) Rs 28 lakh; Rs 35 lakh,b)
Rs 24 lakh; Rs 30 lakh c) Rs 20 lakh; Rs 25 lakh d) Rs 32 lakh; Rs 40 lakh 43 Loan for purchase/construction of a
dwelling unit per family in a place with population less than 10 lakh will be
classified as priority sector provided loan is up to _____ and the overall cost of the dwelling unit does not exceed ____.
a) Rs 28 lakh; Rs 35 lakh, b) Rs 24 lakh; Rs 30 lakh, c) Rs 20 lakh; Rs 25 lakh, d) Rs 32 lakh; Rs 40 lakh 44 Loans for
repairs to damaged dwelling units will be part of priority sector provided loan is up to ____in metropolitan centres and up
to _____ in other centres.
a) Rs 2 lakh, Rs 1 lakh b) Rs 5 lakh, Rs 2 lakh ,c) Rs 4 lakh; Rs 2 lakh d) Rs 10 lakh; Rs 5 lakh 45 Bank loans to any
governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers will be
part of priority sector provide loan is up to ______ per dwelling unit. a) Rs 2 lakh b) Rs 5 lakh c) Rs 10 lakh ,d) Rs 20
lakh e) None of these
46 Loans for housing projects exclusively for the purpose of construction of houses for economically weaker sections
and low income groups, will be part of priority sector provide the total cost of the house does not exceed _____ per
dwelling unit a) Rs 1 lakh b) Rs 2 lakh c) Rs 5 lakh d) Rs 10 lakh
47 Loans for housing projects exclusively for the purpose of construction of houses for economically weaker sections
and low income groups, the total cost of which does not exceed Rs 10 lakh per dwelling unit for the purpose of
identifying the economically weaker sections and low income groups, the annual family income should not be more
than_____.
a) Rs 50,000 in rural areas and Rs 100,000 in other areas
b)Rs 100,000 in rural area and Rs 200,000 in other areas
c) Rs 160,000 irrespective of location d) Rs 200,000 irrespective of location
48 Bank loans to Housing Finance Companies (HFCs), approved by NHB for their refinance, for on-lending for the
purpose of purchase/construction/reconstruction of individual dwelling units or for slum clearance and rehabilitation of
slum dwellers, will be part of priority sector provided aggregate loan limit is up to _____ per borrower. a) Rs 10 lakh b)
Rs 5 lakh , c) Rs 2 lakh d) Rs 20 lakh
49 Bank loans for building social infrastructure for activities namely schools, health care facilities, drinking water facilities
and sanitation facilities in Tier II to Tier VI centres will be part of priority sector provided loan is up to ____per borrower.
a) Rs 5 crore b) Rs 1 crore , c) Rs 2 crore d) Rs 10 crore
50 Bank loans to borrowers for purposes like solar based power generators, biomass based power generators, wind
mills, micro-hydel plants and for non-conventional energy based public utilities viz. street lighting systems, and remote
village electrification will be part of priority sector provided loan amount is up to______. a) Rs 5 crore b) Rs 10 crore c)
Rs 15 crore d) Rs 20 croree) Rs 25 crore
51 Bank loans to individual households for purposes like solar based power generators, biomass based power
generators, will be part of priority sector provide the loan is up to ______ per borrower.
a) Rs 10 lakh b) Rs 20 lakh , c) Rs 25 lakh d) Rs 30 lakh
52 Loans to distressed persons other than farmers to prepay their debt to non-institutional lenders will be treated as
other priority sector provided loan per borrower is limited up to _____
a) Rs 25000 b) Rs 50,000 c) Rs 100,000 d) Rs 200,000
53 Overdrafts upto Rs 5,000/- under Pradhan Mantri JanDhanYojana (PMJDY) accounts will be classified as other
priority sector provided the borrowers household annual income does not exceed ____for rural areas and for non rural
areas.
a) Rs 60,000; Rs 120,000b) Rs 80,000; Rs 160,000 ,
c) Rs 100,000; Rs 1,60,000 d) Rs 100,000; Rs 200,000
54 Artisans, village and cottage industries are classified as weaker section provided individual credit limits do not
exceed _____.
a. Rs. 50,000 ; b. Rs. 1.00 lac ; c. Rs. 2.00 lacs & d. Rs.5.00 lacs
ANSWER
1 A 11 C 21 C 31 D 41 B 51 A
2 E 12 B 22 A 32 B 42 A 52 C
3 C 13 C 23 D 33 C 43 C 53 C
4 C 14 B 24 D 34 E 44 B 54 B
5 D 15 C 25 C 35 D 45 C
6 C 16 C 26 D 36 E 46 D
7 D 17 A 27 D 37 D 47 D
8 A 18 E 28 A 38 C 48 A

9 B 19 C 29 C 39 C 49 A
10 A 20 C 30 D 40 B 50 C
FINANCIAL STATEMENT ANALYSIS

1. Balance Sheet is a statement of Assets and Liabilities or statement of Sources and Uses *(a) as on a date
(b) as on 31st March (c) for 12 months (d) for a particular period (e) none of these 2. Assets can be represented
as :
(a) uses of funds (b) sources of funds (c)what the business owns *(d) both (a) and (c) above 3. Liabilities
can be represented as :
(a) sources of funds (b) uses of funds (c) what the business owes *(d) both (a) and (c) above 4. Current
assets are defined as :
(a) assets which are expected to be consumed within one year
(b) assets which are expected to be converted into cash within one year
*(c) either (a) or (b) (d) assets which are to paid out of current liabilities (e) none of the above 5. Fixed
assets are defined as :
(a) assets which are fixed to the land *(b)assets which are acquired for production and not meant for sale
(c) assets which have a fixed value (d) assets which can not be sold easily (e) none of the above 6. Term
liabilities are one :
(a) which are to be met within one year from the date of balance sheet
*(b) which are not payable within one year from the date of balance sheet
(c) which were raised for more than one year (d) which are not payable immediately (e) none of these 7. Current
Liabilities are those liabilities
(a) which are payable within one year (b) which are expected to be met from proceeds of current assets (c)
which are payable after one year *(d) both (a) & (b) (e) both (b) & (c)
8. Which of the following is not classified as current asset?
(a) stocks (b) prepaid expenses *(c) pre operative expenses (d) book debts (e) none Which of the following is
classified as intangible or fictitious asset?
(a) Goodwill (b) Preliminary expenses (c) Accumulated losses (d) Deferred Revenue Expenses *(e) All of these
10. Which of the following is a current liability for calculation of current ratio?
(a) Sundry creditors (b) Borrowings from banks (c) Provision for tax
(d) Instalment of term loan payable within one year *(e) All of these
11. Debtors which are old for more than 6 months are to be classified as
(a) Current Assets (b) Intangible Assets (c) Non Current Assets (d) Fixed Assets 12. Instalments of term
loan falling due within a year are treated as __for calculation of current ratio : *(a) current liability (b)
current asset (c) term liability (d) net worth 13. Quick assets mean:
(a) all assets minus inventory (b) all current assets minus inventory
(c) assets other than cash (d) all current assets minus inventory and prepaid expenses 14. Sales
minus cost of sales is referred to as :
(a) operating profit (b) net profit (c) profit before tax (d) profit after tax *(e) gross profit 15. Operating
profit is arrived at by :
*(a) reducing administrative, general and selling expenses from gross profit
(b) adding back depreciation to gross profit (c) adding back depreciation and interest to net profit (d) adding
back interest expenses to gross profit (e) none of the above
16. Cash profit is:
(a) gross profit before depreciation (b) net profit after depreciation
(c) net profit before depreciation (d) gross profit after depreciation (e) none of these 17.
Cash loss is:
(a) gross loss before depreciation (b) net loss after depreciation (c) net loss before depreciation (d) gross loss
after depreciation (e) none of these
18. Tangible net worth means :
*(a) Paid up capital and reserves minus intangible assets (b) Net worth minus investment in fixed assets (c)
Paid up capital and reserves minus instalment of term loan payable within one year (d) Net worth minus
current liabilities (e) Total Assets minus intangible assets 19. The term Liquid Surplus or Net working capital
refers to :
(a) total investment in current assets (b) excess of current liabilities over current assets *(c) excess of
current assets over current liabilities

(d) excess of capital plus free reserves over term liabilities (e) none of the above
20. Net working capital will be positive when :
(a) current assets are more than current liabilities (b) current liabilities are more than current assets (c)
current ratio is more than one (d) when current ratio is less than one *(e) both (a) & (c) 21. Liquidity ratios
include :
(a) Current Ratio (b) Quick Ratio (c) Debt equity ratio *(d) Both (a) & (b) (e) all above 22. Current Ratio
is obtained by :
(a) reducing current liabilities from current assets and dividing the resultant figures by current liabilities (b)
dividing current liabilities by current assets *(c) dividing current assets by current liabilities (d) dividing outside
liabilities by net worth (e) none of the above
23. Current Ratio is an indicator of ________________ of the borrower:
*(a) liquidity position (b) solvency (c) profitability (d) all above (e) none of the above 24. Current
Ratio of less than 1 indicates that the borrower:
(a) has sufficient current assets to meet current liabilities (b) may be unable to pay current dues (c)
has borrowed excessively from outsiders (d) any of the above (e) none of the above 25. Current ratio
as per second method of lending given by Tandon Committee works out to : (a) 1:1- (b) 2:1 (c) 1.17:1
(d) 1.33 : 1 (e)none of these 26. Acid Test Ratio is supportive ratio for ________
(a) Debt-Equity Ratio (b) Current Ratio (c) Gross Profit Ratio (d) Net Profit Ratio (e)
Debt-Service Coverage Ratio
27. The following are the Current and Quick Ratio of a firm for two consecutive years
Current Ratio 1.6:1 & 2.3:1; Quick Ratio 1.1:1 & 1:1. The trend indicates that : (a) the
borrower is relying heavily on term loans
(b) there is reasonable investment from current liabilities in current assets
(c) there is excessive investment in inventory and prepaid expenses
(d) more sales are being effected on credit than before (e) none of the above 28. Debt
Equity Ratio is relationship between :
(a) total liability and net worth (b) current assets and current liabilities
(c) term liabilities to total net worth *(d) term liabilities to tangible net worth (e) either (a) or (d) 29. A
decreasing Debt Equity Ratio means :
*(a) higher stake of owners (b) lower stake of owners (c) decrease in profitability of the business (d) sharp
increase in profitability of the concern . (e) none of the above
30. Profit & Loss account helps in computing
(a) Profitability Ratio (b) Solvency Ratio (c) Turnover Ratio (d) Liquidity Ratio 31. Return on
Investment (ROI) falls in the category of :
*(a) Profitability Ratios (b) Solvency Ratios (c) Liquidity Ratios (d) all above 32. Gross Profit
Ratio is obtained by :
(a) dividing gross profits by net sales and multiplying it with 100
(b) dividing net profit by gross sales and multiplying it with 100
(c) dividing gross profit by gross sales and multiplying it with 100
(d) net sales by net profit (e) none of the above
33. Which of the following ratios is one of the most important ratios to ascertain the profitability ?
(a) Debt Equity Ratio (b) Return on Investment (c) Working Capital Turnover Ratio (d)Gross Profit
Ratio (e) Quick Ratio
34. 'Activity Ratios' or 'Turnover Ratios' indicate :
(a) extent of profitability *(b) efficiency of the concern in the utilisation of assets (c) stake of
owners' funds (d) stake of term lending institutions (e) none of the above 35. Debtors Velocity
Ratio indicates :
(a) proportion of credit sales to annual sales (b) proportion of credit sales to fixed assets (c)
average time-lag between sales and the collection of debts
(d) average time taken in effecting sales to customers (e) none of the above 36. A
decreasing trend of Debtors Velocity Ratio implies :
(a) more credit being extended (b) less likelihood of bad and doubtful debts (c) poor debt collection (d)
more demand for product of the seller (e) none of the above
37. Debt Service Coverage Ratio (DSCR) indicates :
*(a) capability of unit to generate adequate cash accruals to pay instalments of term loans and interest
thereon (b) knowing short term liquidity of borrower (c) overall profitability of the unit
(d) ascertaining borrower's stake in business (e) none of the above
38. Debt Service Coverage Ratio is used for sanction of :
(a) Working Capital Facilities *(b) Term Loans (c) Bank Guarantee (d) Letter of Credit 39. Ideal DSCR
is
a) 1:1 (b) 1.33:1 (c) 1.5:1 *(d) 2:1 (e) None of these 40. Short term solvency of a unit
is indicted by
a) Debt equity Ratio b) Total indebtedness ratio c) proprietary ratio *d) Current ratio 41. A very
high Current Ratio of say 4:1 is :
(a) highly desirable as it shows capacity of the borrower to repay current dues without
difficulty *(b) not desirable as it means less efficient use of funds
(c) desirable as it means that the borrower is relying more on capital and reserves than on outside
borrowings (d) desirable as it ensures safety of bank funds in the long run (e)none of the above 42.
Proprietory Ratio is the relationship between :
(a) total assets to tangible net worth *(b) capital or shareholders' funds to total tangible assets (c)
net fixed assets to long-term debts (d).either (a) or (b) (e) none of the above 43. For calculating Debt
Service Coverage Ratio (DSCR), the numerator will be :
*(a) Profit after tax plus depreciation plus interest on term borrowings
(b) Profit before tax plus depreciation plus interest on term borrowings
(c) Profit after tax plus interest on term borrowings (d) Profit before tax plus interest on term'borrowings 44.
Which of the following is incorrect?
(a) For a dealer of cars, a car is a current asset
(b) Security deposits for electricity or telephone is a non current asset.
(c) Prepaid rent is a current asset
*(d) For a transport operator, a car is a current asset (e)Pre expenses is a fictitious asset 45.
The short term solvency of a unit can be judged by
a) Debt Equity Ratio *b) Current Ratio c) Debt collection period d) Gross profit margin
e) None of these
46. Debt Equity Ratio is calculated by dividing
*(a) Long term liability by tangible net worth b) Long term liability by paid up capital and reserves (c) Tangible
net worth by long term liability d) Paid up capital and reserves by long term liability (e) Total outside liability by
paid up capital
47. Working capital gap means
(a) Current Assets minus Current Liability
*(b) Current Asset minus Current Liability other than bank borrowing (c) Current
Assets minus inventory & prepaid expenses
(d) Current Assets minus paid up Stocks
(e) Quick Assets minus Current Liability other than bank borrowing
48. Which of the_following is not a fixed cost of a manufacturing unit? a) raw material
consumed b) rent paid for factory shed c) consumption of power d) salary of the office staff e)
commission paid to salesman f) salary of manager g) wages paid to production staff based on
production *(h) a,c,g & e (1) none 49. Break even point in a production process is the point
where:
a) fixed costs equal variable costs (b) fixed costs start rising on further production *(c) total of
fixed and variable costs just equals the total revenue (d) both (a) and (c) 50. Break Even Point
represent a level of sales at which :
(a) there is no profit or loss (b) sales revenue is equal to total cost (c) a firm is able to recover both fixed
and variable costs *(d) all of these (e) none of these 51. Operating cycle in an industrial concern means
a) Conversion of raw materials into semi-finished goods
b) *Conversion of raw materials into finished goods sundry debtors and back into cash c)
Conversion of raw materials into finished goods
d) Conversion of sundry debtors into cash e) none
52. As per first method of lending of Tendon Committee bank should finance 75% of: *a)
working-capital gap (b) total current assets (c) net working capital d) lower of (a) or (b) above (e)
none
53. In the second method of lending under Tendon Committee:

(a) Bank should finance 75% of working capital gap
(b) Bank should finance 50% of the current assets
*(c) Borrower should contribute 25% of total current assets and total current liabilities including bank
borrowing should not exceed 75% of current assets
(d) Lower of (a) & (b) e) none
54. As per Nayak Committee recommendations as modified from time to time, 20% of projected sales are to be
sanctioned as working capital to SSI units with WC limits up to
a) Rs. 50 lakh b) Rs. 100 lakh c) Rs. 200 lakh *d) Rs. 500 lakh e) none 55. Funds flow statement
means:
(a) operating statement for a period (b) statement of sources and use of funds as on a date *(c) statement
of sources and use of funds for a period (d) statement of assets and liabilities as on a date 56. Which of the
following is a long term source?
a) Paid up capital and reserves b) Term loan from financial institution
c) Plant and machinery *d) Both (a) & (b) e) Both (b) & (c)
57. Which of the following is not a long term use?
a) Goodwill b) Land & Building c) Investment in subsidiaries
*d) Debentures e) Pre operative expense
58. The profit retained in the business are classified as
b) Current asset as these are easily realizable (b)Current liability as these are payable to shareholders c)
Assets as these are owned by business *(d) Liabilities as this represent as a source of funds e) Long
term liability as these are payable to shareholders after one year
59. Which of the following is incorrect?
c) Increase in liabilities is a source of funds b) Decline in assets is a source of funds c) Increase in assets is a
use of funds d) Decline in liabilities is a use of funds *e) None of these NON PERFORMING ASSETS
1. What is the objective of introducing prudential norms for income recognition, asset classification and
Provisioning for the advances portfolio of the banks by RBI?
(a) for greater consistency in the published accounts (b) for transparency in the published accounts (c) to
apply principle of conservatism *(d) Both (a) & (b) (e) All of these
2. Non Performing Assets (N PAs) are categorized as:
(a) Sub Standard Assets (b) Doubtful Assets (c) Loss Assets *(d) any one of the above 3. With effect from the
year ending 31.03.2004, a term loan is treated as non-performing asset (NPA) if : (a) the balance outstanding is
more than the loan amount originally sanctioned
(6) interest remains overdue for more than 90 days
(c) installment remains overdue for more than 90 days
*(d) interest and/or installment remain overdue for more than 90 days (e) both (a) and (d) above 4. As
from the year ending 31.03.2004, a cash credit/overdraft account is classified as NPA if : (a) balance.is
beyond the sanctioned limit / D.P (b) interest has not been serviced for 4 quarters *(c) the account
remains out of order (d) both (b) and (c) (e) none of these 5. Crop loan granted for long duration crop
becomes NPA if :
(a) interest remains unpaid after it has become overdue for two years
(b) interest and /or installment remains unpaid after it has become overdue for two crop seasons (c) interest and/or
installment of principal remains unpaid after it has become overdue for two half years (d) interest and/or installment of
principal remains unpaid after it has become overdue for two crop seasons but for a period not exceeding two half
years
*(e) interest or instalment is overdue for one crop season.
6. Crop loan granted for short duration crop will become NPA if:
(a) the loan is overdue for 6 months (b) the loan is overdue for 12 months
*(c) the loan is overdue for two crop season (d) the loan is overdue for more than 2 crop seasons
7. Out of order account means an account where:
(a) the balance is continuously more than the sanctioned limit or drawing power
(b) where as on the date of Balance Sheet, there is no credit in the account continuously for 90 days or credit is
less than interest debited
(c) where stock statement has not been received for 3 months or more.
*(d) any of these (e) only (a) or (b)
8. In case of cash credit and overdraft, the account will be treated as NPA if

(a) the limit is not renewed/reviewed within 6 months from the due date of renewal. (b)
account remains out of order.
(c) the limit is not renewed within 3 months from the due date of renewal
*(d) Either (a) or (b) (e) none of these
9. Which of the following accounts will be classified as NPA?
(a) Loan against LIP when the balance outstanding is more than the limit sanctioned for 6 months but within
surrender value of LIP
(b) Interest debited in the educational loan account during moratorium period has not been recovered
simultaneously.
(c) Interest debited in a housing loan account for last 6 mouths has not been recovered from the date of sanction
and repayment was to start after 12 months from sanction.
(d) Loan is guaranteed by Central Govt and is overdue for more than 90 days. *(e) None of these 10.
Which of the following is not correct regarding income recognition in respect of NPA accounts? (a) Banks
should not charge and take to income account interest on any NPA.
(b) Interest on advances against term deposits, NSCs, IVPs, KVPs and Life policies may be taken to income
account on the due date, provided adequate margin is available in the accounts.
(c) If Central Government guaranteed advances become NPA, the interest on such advances should not be taken to
income account unless the interest has been realised. *(d) None of these 11. As per RBI guidelines, w.e.f the year
ending 31.03.2005 when an asset is identified as NPA it will be classified as sub-standard up to a period not exceeding
:
(a) 18 months (b) 5 years (c) 6 months *(d) 12 months (e) None of these 12. As per RBI guidelines, w.e.f the year
ending 31.03.2005, an account will be classified as Doubtful if it is NPA or sub standard for more than:
(a) 6 months *(b) 12 months (c) 18 months (d) 24 months (e) None of these3 years 13. An NPA account is straightaway
classified as doubtful without waiting for 12 months if the security deteriorates so much that its realizable value is:
(a) less than 10% of the outstanding balance (b) 10% or above the outstanding balance *(c) 10% or above
but less than 50% of the outstanding balance
(d) 10% or below the outstanding balance (e) None of these
14.An NPA account is straightaway classified as loss . if the security deteriorates so much that its realizable value is:
*(a) less than 10% of the outstanding balance (b) 10% or above the outstanding balance (c) 10% or above but less than
50% of the outstanding balance
(d) 10% or below the outstanding balance (e) None of these
15. In an NPA account, interest or any other charge will be recognized as income as per which of the following: (a) on
accrual basis (b) when borrower gives a firm commitment to regularize the account *(c) when it is actually realised (d)
(a) or (c) as per policy of the bank (e) None of these 16. A crop is considered as long duration crop if crop season is
more than 12 months. The crop season for each crop which means the period up to harvesting of the crops raised, is
determined by:
(a) Banks themselves *(b) State Level Banker's Committee (c) NABARD (d) RBI 17.
Provisioning is required to be made in the case of _____ assets.
a) Standard b) Sub standard c) Doubtful d) Only (b) & (c) *e) All of these 18. On which of the following types of loans,
provision is required to be made at the rate of 0.25% of the outstanding if the advance is classified in the standard
category?
*a) Direct advance to agriculture (b) Direct advance to SME
c)All advances to Agriculture & SME (d) Both (a) & (b) (e) None of these 19. The provision on standard assets made to a
person other than Direct advance to agriculture and SME and for commercial real estate are to be made at the rate of of
the outstanding balance on global basis. a) 0.25% *b) 0.40% c) 1% d) 0.50% e) None of these
20. Which of the following is correct regarding provision on standard assets in the following categories? *a)
Commercial Real estate: 1% of outstanding balance
b) Housing loan more than 30 lakh: 1% of the outstanding balance
c) Capital market exposure: 2% of the outstanding balance d) Both (a) & (b) only (e)-None of these 21. In the case of
advances classified as sub standard assets other than those which were unsecured abinitio, the provision is required
to be made as per which of the following?
a) For unsecured portion 100% and on secured portion 10%.
b) For unsecured portion 100% and on secured portion 20%.
*c) 15% of the outstanding balance without reference to security d) None of these

22. In the case of sub standard assets which were unsecured abinitio, the provisioning is required to be made at the
rate of of outstanding balance.
*a) 25% b) 50% c) 75% d) 100% e) None of these
23. A clean overdraft has become NPA and the outstanding is Rs 100,000. How much provision is to be made? (a) Rsl
0,000 *(b) Rs 25,000 (c) Rs 50,000 (d) Rs 100,000 (e) None of these
24. An advance was granted to farmer for poultry. Account is standard and outstanding in the_account is Rs 100,000
whereas realizable value of security is Rs 60,000 only. How much provision is to be made? (a) Rs 10,000 *(b) Rs 250
(c) Rs 40,150 (d) Rs 400 (e) None of these 25. An advance has been granted to a farmer for construction of house.
The account is standard and outstanding in the account is Rs 100,000. How much provision is to be made on this
account?
(a) Rs 250 *(b) Rs 400 (c) Rs 1000 (d) None of these
26. In the case of doubtful accounts, provision on unsecured portion is made at the rate of 100%. For secured portion,
the provision is made as a percentage of realizable value of security depending upon the period for which the account
is doubtful. For which of the following, the rate of provision for secured portion is not correct? a) DF1: 25% b) DF2:
40% *c) DF3: 50% d) DF3: 100% e) None of these 27. A loan has become more than 3 years old in the doubtful
category. In this case, the provision on secured portion as on 31.3.10 will be:
a) 50% b) 60% c) 75% *d) 100% e) None of these 28. An advance of Rs. 2,00,000 has been declared sub standard on
31.10.2011. It is covered by securities with realizable value of Rs. 1,50,000 . Total provision in the account as on
31.03.2012 will amount to: *(a) Rs. 30000 (b) Rs. 30,200 (c) Rs. 47,000 (d) Rs. 83,800 (e) none 29. The unsecured
exposure which are classified as sub standard attract a provision of 25% of the outstanding balance. For this purpose,
unsecured exposure means an exposure where the realisable value of the security, as assessed by the
bank/approved valuers/Reserve Bank's inspecting officers, is , ab--initio, of the outstanding exposure.
*(a) not more than 10% (b) not less than 10% (c) less than 10% (d) None of these 30. A cash credit account other than
agriculture and commercial state became out of order on 5.3.12. Balance outstanding in the account is Rs 200,000.
Value of security in the account is Rs 150,000. How much provision is required to be made as on 31.3.12?
(a) Rs 20,000 (b) Rs 50,000 (c) Rs 15,000 *(d) Rs 800
31. An account became sub standard on 5.3.09. Balance outstanding in the account is Rs 5 lac and realizable value of
security is Rs 4 lac. How much provision is required to be made as on 31.3.12.
(a) Rs 50,000 (b) Rs 220,000 (c) Rs 100,000 *(d) Rs 500,000 (e) None of these 32. How is the
provision on standard assets treated?
(a) it is deducted from Gross NPA (ii) it is deducted from Gross advances
*(c) shown as 'Contingent Provisions against Standard Assets' under 'Other Liabilities and Provisions -Others'
in Schedule 5 of the balance sheet.
(d) any of these but accounting practice should be followed consistently. (e) None of these 33. An advance has been
made by 3 banks under a consortium arrangement. The account becomes NPA with one of the banks, What should be
done by other banks?
(a) classify the account as NPA (b) classify the account as NPA but provision not to be made *(c) the
account will be classified as per record of recovery of each bank
(d) classify the account as NPA if the same is NPA with the leader bank (e) None of these 34. Advance against which of
the following will be subject to provisions of Asset classification, income Recognition and Provisioning even if sufficient
margin is available?
(a) own deposit (b) NSC *(c) government securities (d) LIP (e) None of these 35. RBI has proposed that total
provisioning coverage ratio of banks, including floating provisions, should not be less than _____________ .
Banks should achieve this norm not later than end-September 2010 (a) 30% (b) 40% (c) 50 *(d) 70% (e)
None of these
36. Which of the following is true about treatment of floating provisions?
(a) Floating provisions can be deducted from gross NPAs to arrive at net NPAs
(b) Floating provisions can be treated as part of Tier II capital
'lc) Either (a) or (b) (d) Both (a) & (b) (e) None of these
37. Cases with claims of____are filed with DRT and not with normal courts.
(a) less than Rs 10 lakh (b) Rs 10 lakh *(c) Rs 10 lakh and above (d) Rs 20 lakh 38. Choose incorrect statement(s)
regarding appeal to the Appellate Tribunal against the order of the Debt Recovery Tribunal :

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CAIIB MADE SIMPLE (

FOR BUSY BANKERS)

is your life, We make it)

TEST YOURSELF : CAIIB PAPER -1

ADVANCED BANK MANAGEMENT ( Only 10

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 1 | P a g e

Seven Steps to Success : DREAM or DESIRE...strongly, DETERMINE... firmly, DISCRIMINATE...wisely,

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 2 | P a g e

1. SYLLABUS : CAIIB COMPULSORY PAPER - I: ADVANCED BANK MANAGEMENT

MODULE - A: Economic Analysis

MODULE - B: Business Mathematics

MODULE - C: HRM in banks

MODULE - D: Credit Management

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 4 | P a g e

Type – A: MULTIPLE CHOICE – QUESTIONS & ANSWERS

1. CRR & SLR Calculation Given Big Table - 5 Marks = 5M

RECALLED QUESTIONS DEC 2018 : CAIIB1- ABM

01. Direct agriculture SME 0.25% provisioning

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 8 | P a g e

1. Raw material Turnover Ratio = Cost of RM used / Average stock of R M

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 11 | P a g e

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 12 | P a g e

A.ONE LINER QUESTION – ANSWER ON LATEST RBI POLICIES 2020-21

Key highlights of RBI monetary policy – 5th Feb 2021

Revision of Interest Rates on Small Savings Schemes w.e.f. 01.01.2021 to 30.06.2021

Sl Type of Transaction Unit Revised Rates

1 Receipts - Physical Per transaction Rs 40/-

2 Receipts – e-mode Per transaction Rs 9/-

3 Pension Payments Per transaction Rs 75/-

GUARANTEE EMERGENCY CREDIT LINE (GECL)

1. RBI POLICY RATES & DATA BANK

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 14 | P a g e

2.LOANS & ADVANCES

4. NPA & RECOVERY MANAGEMENT

6. POLICY RELATED WITH COVID-19

B.RECALLED & EXPECTED QUESTIONS SUBJECT WISE

VARIOUS ACT/LAWS RELATED WITH INDIAN BANKING

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 22 | P a g e

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 23 | P a g e

FINANCIAL INCLUSION & GOVT. BUSINESS & SPONSORED SCHEMES

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 26 | P a g e

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 27 | P a g e

MODULE – A : ECONOMIC ANALYSIS (CAIIB 1- ABM )

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 29 | P a g e

TEST YOURSELF (BASED RECALLED QUESTIONS) – 01

1) Micro-economic theory studies how an economy determines.

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 31 | P a g e

TEST YOURSELF (BASED RECALLED QUESTIONS) – 02

1) In the Keynes model above, which is independent:

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 39 | P a g e

MODULE - B: Business Mathematics (CAIIB 1- ABM )

TEST YOURSELF (BASED RECALLED QUESTIONS) - B: BUSINESS MATHEMATICS

MCQs on Time Value of Money

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 40 | P a g e

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 41 | P a g e

Objective Type Questions on Sampling Methods

systematic43 precision 44 cluster45 sample

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 44 | P a g e

Compiled by Smt Renu Kumari, Ex-Chief Manager, Bank of Baroda 45 | P a g e