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Objectives

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Objectives

mcb

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Appendix: Objective-Type Questions on Commercial Banking - Manag...

1 of 9

https://www.safaribooksonline.com/library/view/management-of-bankin...

Tick YES or NO for the following statements.

1. Retail banking means managing of individual customers on both
assets and liabilities side.
Yes

2. Customer segmentation refers to classification of customers into

different groups for the purpose of identifying their financial
requirements.
Yes

3. The Basel II Accord deals in capital adequacy norms to be

fulfilled by the banks.
Yes

4. Bundling of products means availability of various options within

the main product/service.
Yes

5. The success of retail lending depends on assessment of future

requirements of customer needs and to prepare for the same now.

Yes

6. Housing loan can be sanctioned to a property situated in any

industrial area.
Yes

Yes

7. Housing loan can also be considered for the purchase of a plot.

8. The maximum moratorium under a housing loan is 30 months.
9. Stamp duty/registration charges do not form a part of the project
cost in housing loans.
Yes

10. Under the flip method, the installments are graduated with a rise
in the income level of the borrower.
Yes

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Appendix: Objective-Type Questions on Commercial Banking - Manag...

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https://www.safaribooksonline.com/library/view/management-of-bankin...

11. The maximum IRR (installment to recovery ratio) to be

considered is 25 per cent under housing loans.
Yes

Yes

12. A third party can join as co-applicant in the case of housing loans.
13. There is no restriction on the number of co-applicants in housing
loans.
Yes

14. The house/property proposed to be purchased/constructed on

banks finance need not be held jointly by all the applicants.
Yes

Yes

15. Cross guarantee under group housing scheme can be permitted.

16. Delay in payment or instalment attracts penal interest in the case
of housing loans.
Yes

17. Second charge on house/property for extending finance under

housing loan scheme can be permitted, subject to certain terms

and conditions.
Yes

18. Finance to state-owned corporations and involved housing

projects and statutory bodies like housing boards can be treated

as direct housing finance.
Yes

19. Finance to firms/companies under the vehicle loan scheme may

be permitted.
Yes

20. Consumer durable loans backed by hypothecation of assets can

be termed as secured personal loan.
Yes

Yes

21. Margin under clean personal loan is 25 per cent.

22. Loan against mortgage (LAP) can be permitted to meet any
purpose/requirement.
Yes

23. The minimum margin under loan against mortgage is 50 per

cent.
Yes

24. The maximum quantum of loan under the education loan scheme
is Rs. 15 lakh.
Yes

25. Loans above Rs. 4 lakh under education loan require tangible
security.
Yes

Yes

26. Minimum margin under education loan in 25 per cent.

27. The repayment period under education loan is study period plus
one year or study period plus 6 months after securing
employment, whichever is earlier.
Yes

28. The allowable expenses under education loans include the

amount paid towards development fund.
Yes

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Appendix: Objective-Type Questions on Commercial Banking - Manag...

3 of 9

Yes

https://www.safaribooksonline.com/library/view/management-of-bankin...

30. Loan against shares will be considered only if the shares are in
the demat form.
Yes

Yes

31. Loan can be granted against pledge of share of any company.

32. Maintaining pension account is not mandatory in case loan is to
be considered for a senior citizen.
Yes

33. Top-up loans are a kind of supplementary finance extended to

home loan borrowers.
Yes

34. Loan against rent receivables is granted against total rent

receivable for the unexpired lease period.
Yes

35. Recovery in loans against rent receivables is ensured by debiting

the customers account.
Yes

36. The security under loan against rent receivable, the collateral

security should necessarily be the same property from which the

lease rentals are derived.
Yes

37. The maximum repayment tenure allowed in the case of loan

against rent receivables is to the extent of unexpired period of

lease or 84 months, whichever is earlier.
Yes

38. Banks individual credit policy governs the internal policies and
control with regard to credit dispensation.
Yes

39. Finance can be extended even to those activities which are

declared as low priority in credit policy of individual banks.

Yes

40. Rating of the borrower is one of the risk mitigating tools and
therefore it is mandatory in respect of all credit proposals.
Yes

41. Verification of authenticity of various documents is a part of due

diligence exercise.
Yes

42. The EMI can be permitted up to 50 per cent of gross monthly

income.
Yes

43. Floating rate of interest varies as and when there is change in

interest rate without a change in the BPLR.
Yes

44. Credit monitoring function is to ensure constant vigil on conduct

and operations of loan account.
Yes

45. By crediting the loan amount to the account of the customer, end
use of funds can be ensured.
Yes

46. Management information system (MIS) can be used as one of the

credit monitoring tools.
Yes

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Appendix: Objective-Type Questions on Commercial Banking - Manag...

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Yes

https://www.safaribooksonline.com/library/view/management-of-bankin...

48. Non-security documents, such as application forms and letters of

undertaking can be admitted as the main documents of evidence
in the court of law.
Yes

49. In the case of DP note executed by a partnership firm, the words

jointly and severally need to be inserted.
Yes

50. The liability of guarantor arises only in the event of failure of the
principal borrower.
Yes

51. The limitation period in the case of guarantee commences from

the date of execution of the guarantee itself.
Yes

52. Even if the principal borrower is absolved of his liability by virtue

of the DP noted getting time barred, the guarantor shall continue
to be liable for the debt.
Yes

53. Equitable mortgage does not attract any stamp duty, though, of

date, some of the state governments introduced stamp duty even

on equitable mortgage to increase revenue.
Yes

54. Search report and non-encumbrance certificate are not required

for creation of mortgage.
Yes

55. Security charged as prime security in the case of one loan account
can be extended as collateral security in the case of another loan.
Yes

56. Physical inspection of assets charged to the bank is necessary to

corroborate with the information furnished by the customer.
Yes

57. If two mortgages are created on the same propertyone is by way

of simple mortgage and another by way of equitable mortgage,
the second mortgage can enforce his right only after the debt
secured by the first mortgage is fully satisfied.
Yes

58. NEFT is an electronic fund transfer facility and came into force
with effect from 1 June, 2006.
Yes

Yes

59. Facility under NEFT is available only at select branches.

60. NEFT is distinct from RTGS.
61. Transaction under NEFT is on a gross settlement basis.
62. ECS facilitates bulk payment system easier.
63. Transactions under ECS are cleared through the National
Clearing House of the RBI.
Yes

64. RTGS is an electronic fund transfer system amongst different

bank's branches.
Yes

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Appendix: Objective-Type Questions on Commercial Banking - Manag...

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Yes

https://www.safaribooksonline.com/library/view/management-of-bankin...

67. Each bank is allotted a code under RTGS called IFS code.
68. Service under RTGS is not available on three national holidays
namely 26 January, 15 August and 25 December.
Yes