2011 STUDY KIT FOR PROMOTION TEST APRIL 2011

27-29, Financial District, Nanakramguda, Gachibowali

Andhra Bank Staff College Phone : 65812553 e-mail abstc@andhrabank.co.in

Hyderabad-500 032

FOREWORD

, , , - We are glad to present this Study Kit for Promotion Test aimed to help the Officers appearing for the written test for promotion. While all precautions to Ensure the accuracy of the information to the extent possible were taken, the users are advised to update the information wherever required. We wish the Officers all success in their efforts.

, Principal & Members of Faculty , Dt. 09.03.2011 Andhra Bank Staff College, Hyderabad

2011 STUDY KIT PROMOTION TEST APRIL 2011 I N D E XSl. Topics 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. Banking Regulation / RBI Act Banker Customer Relationship Bank Deposit Schemes Loan Policy Agricultural Finance Priority Sector Advances/ SME Govt Sponsored Scheme Balance sheet Analysis Working capital loans Term Loans Bank Guarantee Retail Credit / Personal Banking Schemes Foreign Exchange Recovery Management Fee based & ancillary services Information & Technology Official Language Banking Concepts Bank Performance-2008-09,2009-10 &Dec.10 Test Miscellaneous Page No. 1 12 18 33 53 92 99 105 111 115 120 122 131 171 177 186 198 205 218 233 239FOR

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RBI ACT & BANKING REGULATION ACT 01. Present Bank Rate of RBI is 1. 5% p.a. 2. 11% p.a. 3. 12% p.a. 4.6% p,a. 5. None of the above.

02. Central Bank of our country, that regulates the functions of Banks etc., is 1 Central Bank of India 2. State Bank of India 3. Reserve Bank of India 4. Bank of India 5. Indian Bank 03. RBI was established in the year 1.1948 2. 1947 3. 1934 4. 1935 04. RBI was nationalised in the year ... 1.1949 2. 1935 3. 1955

5. 1950

4.

1934,

5. 1923

05. The percentage of NDTL, the commercial banks have to maintain as Cash Reserves (CRR) with RBI is 1. 4.75% 2.10% 3. 6.00% 4. 5.00% 5. 5.75% 06. The percentage of NDTL, Commercial banks have to maintain as Statutory Reserves (SLR) is 1. 31.5% 2. 25% 3. 30% 4.24% 5.20% 07. Maximum extent of shares of a limited company which can be held by any banking company as security or as absolute owner is 1.50% of paid up capital 2.30% of paid up capital of that company 3.30% of Banking Company's own paid up capital plus reserves 4. Out of both 2 & 3 whichever is lower 5. 25% of paid up capital of company of Banking company whichever is lower 08. Scheduled Bank is a 1. Bank whose name is included in the second Schedule of RBI Act 1934 2. Bank having paid up capital of 5 lacs 3. Bank having paid up of capital of 10 lacs 4. Commercial bank established in India 5. 1 & 2 09. RBI Governor is 1. Dr. Y V Reddy 2. Dr D Subba Rao 4. Mr. S. Venkata Ramaiah

3. Mr. C. Ranga Rajan 5. Mr. S. Jagannathan

10. The percentage of the issued share capital of R.R.B. to be subscribed by sponsor Bank is 1. 15% 2. 35% 3. 50% 4. 25% 5. 33-1/3% 11. RBI is empowered to issue licences to commercial banks for opening branches under 1. Banking Regulation Act 1949 2. RBI Act 1934 3. Negotiable

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Instruments Act 1881 5. None of the above

4. Acquisition of Banking Companies Act 1970

12. Total No. of nationalised banks today are 1. 14 2.27 3. 20 4. 19 13. Our Andhra Bank was nationalised on 1. 15.4.1980 2. 19.7.1969 3. 16.4.1980 20.11.1983

5. None of the above

4. 28.11.1983

5.

14. 'X' Share holder of Modern Bank Ltd approached the Bank for loan against security of shares of the Bank. The Bank can sanction loan Up to 1. 75% of face value 2. 75% of Market value or Face Value whichever is lower 3. 50% of face value or Market value whichever is lower 4. Cannot sanction any loan/advance on security of its own shares 5. 50% of face value 15. Nomination facility for payment of depositors money is governed under 1 Banking Regulation Act 1949 2. RBI Act 1934 3. Negotiable Instruments Act 1881 4. Indian Contract Act 1872 NEGOTIABLE INSTRUMENT ACT 16. Cheque is dated 30th February, what date do you take as date of cheque 1. I st March 2. Cheque is not drawn in proper form 3. Last day of the month 4. Subsequent working day 5. Preceding working day 17 Which amount is payable when there is a discrepancy in words and figure regarding amount of a cheque as per NI Act 1881 1. Amount mentioned in figures 2. Amount .mentioned in words 3. Amount whichever is lower between words and figures 4. Average of the amount in words and figures 5. Amount whichever is higher between words and figures 18. A crossed cheque with the words ."Not negotiable" means/denote 1. Cheque is not transferable 2. Cheque is transferable for one time only 3. Transfer of such cheque is governed by N1 Act. 4. Transfer is governed by Indian Contract Act 5. Cheque is transferable but transferee cannot get a better title than that of transferor 19. The payee of a cheque has endorsed on the back as "Pay to K. Rama Rao only". This endorsement is known as 1. Endorsement in full 2. Sans recourse endorsement 3. Facultative endorsement 4. Restrictive endorsement 5. None of the above 20. A Banker gets protection u/s 131 of NI Act for collection of cheques if 1. He collects for a customer 2. He collects a crossed cheque 3. He acts in good faith and without negligence 2011

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4. The customer's account is opened as per KYC norms 5. All of the above 21. "Account Payee only or Payee's Account only" This type of crossing on a cheque is 1. A special crossing 2. A general crossing 3. An endorsement sans recourse. 4. Instructions to collecting banker to collect the proceeds of cheque into payee's account only 5.3 & 4 of the above 22. Across the face of a cheque it bears the words "Andhra Bank" what it speaks? 1.Drawn on Andhra Bank 2. The cheque is specially crossed in favour of Andhra Bank 3. It is extraneous matter appearing on the cheque. Hence should be returned. 4. These words can be ignored and payment can be made accross the counter if it is other wise on order 5. None of the above 23. Who can cross a cheque 1 .The drawer 2. The payee 5. Any one of the above

3. The Holder 4. Holder in due course

24. Statutory protection is given to paying banker for payment of bearer cheques through 1. Sec 85 (1) of NI Act 2. Sec 85 (2) of NI Act 3. Sec 85 (A) of NI Act 4. Sec 131 of NI Act 5. None of the above 25. 'X' opened CD account with Modern Bank, Mumbai on 22.8.2005 and cheque book was issued. Today the branch received a cheque issued by 'X' on his account dated 20.6.2005. Can the cheque be paid? 1. The cheque cannot be paid as the account was opened only on 22.8.2005 and there is no contract between bank and X as on 20.6.2005. 2. The cheque can be paid till 20.12.2005 i.e. before it becomes stale. 3. It is only instruction to the Banker not to pay the cheque before its date 4. The cheque can be paid if it is otherwise in order 5. None of the above 26. Mr Ramesh payee of an order cheque for Rs. 10,000 endorsed it in favour of Radha for Rs. 5,000, Gopi Rs. 3,000 and Krishna for Rs. 2,000. All the three came to the Bank, presented the cheque and requested for payment across the counter 1. Instrument should be endorsed for full amount. Partial endorsement is not valid (cheque cannot be paid either across the counter or through clearing) 2. Endorsements should not be in favour of more than two persons. 3. Bank can pay cash as per endorsements after identifying the payee and endorsees 4. Cash cannot be paid but amounts can be credited to accounts of 3 endorsees 5. None of the above

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27. Nitin is maintaining a current account with Naveen Bank, Nagpur Branch with a balance of Rs. 30,200/- in the account. Today the branch received cheques No. Date Rs. 739630 10.1.05 30,000 739628 12.1.05 2,000 739632 10.1.05 20,000 739626 15.1.05 10,000 739630 12.1.05 8,000 739633 8.1.05 5,000 739635 9.1.05 1,000 Which of the above instruments can be paid by the Bank? 1. Cheques with higher amounts i.e. 30,000 to be passed 2. As many cheques as possible should be passed (i.e. cheques with lower amounts) 3. Cheques as per serial nos. printed to be passed first 4. Cheques as per date of cheques issued (i.e earlier) to be passed first 5. Bank can pay any cheque and return any cheque as per its choice 28. When the date of the cheque is subsequent to the date on which it is presented for payment, the cheque is called as 1. Ante dated cheque 2. Stale cheque 3. Post dated cheque 4. Invalid cheque 5. None of these 29. "A" Payee of an order cheque endorsed it to B,B endorsed it to C,C lost it. D gets the cheque and endorsed it in favour of E by forging signature of C,E endorsed it to F and F to G for payment when G presented the cheque it was returned as payment was countermanded by drawer. Mention the persons liable to G? 1. All previous endorsees including drawer as G is HIDC 2. Only E & F 3. D only as he forged the signature of C 4. D,E,F 5. None of these 30. "X" clerk of "A" has stolen a cheque leaf of A's cheque book and issued it to Y by forging A's signature for Rs. 10.000. Y accepted it in good faith and endorsed in favour of Z and Z in favour of Q. When presented the cheque was returned with the reason "Drawer's signature differs" Mention the persons who are liable to Q? 1. A who negligently kept cheque book accessible to X 2. Y,Z and A 3. Y & Z 4. X the thief of the cheque 5. None of the above

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31. Whether the following payments can be deemed as Payment in Due course? 1. Cheque dated 15th August 05 paid on 5th Aug 05 (it is payable on or after 15.8.05 and before 15.2.06 if it is otherwise in order) 2. A cheque crossed specially in the name of Union Bank of India was paid to United Bank of India (Payment should be made to Union Bank of India only) 3. A cheque with double crossing in the names of SBI and SBH is paid to SBH. Here SBH is acting as agents for collection on behalf of SBI. (Double crossed cheque can be paid to one of the banker if he is acting as agent for the other) 4. The signature of drawer is so cleverly forged that it was very difficult to detect the forgery. It was paid by the Drawee Bank. (There is no mandate from customer to debit his account, even though he negligently kept the book accessible to strangers) 5. Banker paid a cheque inadvertently for which "Payment was countermanded by drawer" (Banker cannot make payment of a cheque when payment is stopped by drawer) 6. A Banker paid a cheque with material alteration in date and payees name not confirmed by drawer (Any material alteration on the cheque should be confirmed with full signature of drawer) 7. 'A' is maintaining 2 accounts. S.B. Account and Abhaya Gold Account. Cheque issued by A from the book given for Abhaya gold on ordinary S.B. Account is paid by banker (Payment should be made for cheques issued from the same cheque book issued for that account only) 8. A peon of a company presented a cheque for Rs.l,50,000 favouring himself, the cheque was otherwise in order and Bank paid the cheque. Later on banker was informed that cheque was stolen from company. (Bank should have enquired from the company before the payment is made) 9. A crossed cheque was paid to payee across the counter (The payment should be made to a Banker only for Crossed cheque) 10. Cash was paid to a banker towards payment of a Account payee cheque (Cash can also be paid to a Banker for crossed cheques with proper endorsements) 32. An order cheque is payable to a woman in her maiden name Miss Aparna Rao. Now she is married to Sanjeev Kumar, She has to endorse it as 1. Aparna Rao 2. Aparna Kumar 3. Aparna Rao (Now Mrs. Sanjeev Kumar) 4. Aparna Kumar (formerly Aparna Rao) 5. Either 3 or 4 33. An order cheque is payable to Dr M.A. Rahim, MD. He has to endorse it as 1. M.A. Rahim, MD. 2. M. Abdul Rahim (Dr.) MD. 3. M.A. Rahim 4. Mohammed Abdul Rahim 5. 1 or 3 34. The endorsee of a Bill of Exchange is Major General J.S. Arora. He has to endorse it as 1. J.S. Arora. Major General 2. J.S. Arora 3. Major General Jagjit Singh Arora 4. Major General J.S. Arora 5. 1 or 2

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35. Your bank has opened a joint SB Account of A & B payable to E or S. A issued a cheque on the account 10,000. There was some material alteration in date of cheque. As A was out of station, B authenticated alteration with his signature whether it is valid? 1. A only has to confirm the material alteration 2. B can also confirm material alteration as Account is payable to E of S. 3. Both A & B have to confirm the material alteration 4.The Holder of a cheque has to confirm any material alteration by affixing his full signature thereat 5. 1&4 36. When a mutilated cheque is presented for payment 1. It cannot be paid if mutilation affects important particulars of cheque 2. It can be paid if mutilation is guaranteed by drawer 3. It can be paid if mutilation is guaranteed by collecting banker 4. It cannot be paid at all 5. 2 or 3 37. When a bearer cheque with 2 endorsements is presented for payment 1. The collecting banker need not confirm the endorsements 2. Paying banker is discharged by payment in due course to the bearer of the cheque 3. Paying banker need not take cognizance of any endorsements on the cheque 4. The bearer has to sign on the back of cheque as token of receipt of the amount of cheque if presented across the counter 5. All the above 38. Identify the regular endorsement in following cases when payees name is: Miss. Malathi Chandra now married to Mr. Rao 1. Malati Chandra 2. Malati Rao (Formerly Malathi Chandra) 3. Mrs. Malati Rao 4. Miss. Malati Chandra 5. 1 & 2 39. When an order cheque is presented for payment 1. If it is crossed, cash cannot be paid and the amount is to be paid to a banker. 2. If it s uncrossed, payment can be made if presenter is identified as payee of the cheque by customer/person known o bank 3. Bank can pay if the collecting banker confirms the endorsements 4. Even though it is a crossed cheque, cash can be paid if presented by a banker 5. All the above 40. Which is the due date of bill dated 31st January 05 payable one month after date accepted on 2nd Feb 05. 1. 28.2.05 2. 3.3.05 3. 4.3.05 4.5.3.05 5. 2.3.05

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Which is the due date of bill dated 10.9.05 payable 30 days after date 1.13.10.05 2. 10.10.05 3. 11.10.05 4. 14.10.05 5. None of these

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42. A bill falling due for payment on 15.8.05 is payable on 1. 14.8.05 2.16.8.05 3. 18.8.05 4. 17.8.05 of these 43. A demand bill dated 15.8.05 is payable on 1. On demand, at sight, on presentation 3. 18.8.05 4. 17.8.05

5. None

2. 16.8.05 5. None of these

44. In respect of a demand bill, stamp duty payable 1. is according to amount of the bill 2. Varies from state to state 3. is Uniform throughout the country 4. Depends upon the period and amount of the bill 5. is NIL 45. Usance bill can be drawn for a maximum period of 1.90 days 2. 180 days 3. 360 days 4.270 days 5. no time limit 46. When a bill is drawn, accepted and endorsed without consideration it is 1. Accommodation bill 2. Clean bill 3. Clean usance bill 4. Demand bill 5 None of these 47. When a demand bill is presented for payment, the drawee has to pay 1. Within 24 hours 2. Within 48 hours 3. Immediately 4. Within 72 hours 5. within 3 days excluding any public holiday 48. A bill of 15.7.05 is payable one month after date. The state government has declared 15,16,17,18 of August 05 as Public holidays under NI act. The bill falls due for payment on 1.19.8.05 2. 14.8.05 3. 17.8.05 4. 15.8.05 5. 22.8.05 49. Bill of Exchange accompanied by Document of title to goods is known as 1. Demand Bill 2. Usance Bill 3. Clean Bill 4. Documentary Bill 5. Accommodation Bill 50. When usance bill of exchange is presented to drawee for acceptance he has to 1. accept or refuse within 24 hours 2. accept or refuse within 48 hours 3. accept or refuse within 3 days 4. accept within reasonable time 5. accept immediately 51. When does the transferee cannot get better title than that of the transferor in transfer of a cheque? 1. Account payee crossing 2. Special crossing 3. General crossing 4. Either General or special crossing with the words "not negotiable" 5. None of these

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52. A person incompetent to endorse a negotiable instrument 1. Minor 2. Purdanashin lady 3. blind 4. Insane

5. illiterate

53. The words "account payee" and "not negotiable" are written across a bearer cheque. Then the cheque 1. should be returned as not in proper form 2. may be paid to collecting banker against its guarantee 3. Collecting banker may be contacted to know genuiness 4. account payee is not a special crossing. Two parallel transverse lines are must and words account payee should be written between these 2 lines. Hence cash can be paid 5. It can be paid to collecting bank if otherwise in order 54. When a cheque issued in discharge of debt/liability is dishonoured for "insufficiency of funds" the drawer will be punished with 1 . Imprisonment Up to 1 year 2. fine Up to twice the amount of cheque 3. fine Up to 10000 or double the amount of cheque whichever is higher 4. imprisonment Up to 2 years 5. 2& 4 55. Mr. Smart and Mr. Clever are partners in Firm "Innovations and Creations". An order cheque forRs. 50,000 was received by firm on its name from its debtors. Smart endorsed the cheque in his own favour and deposited with his banker for collection into his personal account. The collecting banker is 1. protected u/s 131 of NI Act for collection of this cheque 2. Liable for conversion 3. Negligent and not enquired in such doubtful case 4. Smart being partner has every right to endorse a NI 5. Both 2 & 3 56. Protection to paying banker u/s 85(2) is not available for payment of 1. Demand draft 2. bearer cheque 3. Order Cheque 4. Crossed order cheque 5. None of the above 57. When a cheque was wrongfully dishonoured by drawee bank it may be sued for damages by 1. payee 2. endorsee 3. drawer 4. holder in due course 5. collecting banker 58. Novelty Package Industries (P) Ltd is maintaining 2 current accounts with a Bank. A cheque for Rs. 50,000 was issued on No. 1 account where the balance is only Rs. 25,500. But in No. 2 account there is a balance of Rs. 1 lac. The paying banker has transferred Rs. 25,000 from A/c No. 2 to A/c No. 1 and paid the cheque. Drawee banker is 1. Negligent as he is not supposed to transfer funds from one account to other without consent/request of the account holder. He has to return the cheque. 2. Cannot pay the cheque as it is not a payment in due course. 3. has to return the cheque with reason "Funds insufficient" 4. Drawee banker has to contact, drawer and seek his instructions. 5. The drawee banker can act in any manner as mentioned in 1,2,3 & 4.

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59. Our Bank has returned the capital of ______________amount to Govt Of India 1.75 cr. 2. 48. crs. 3. 50 crores. 4. 110 crs. 5. No such contemplation. 60. What is the percentage of share holding of the Government in the total capital of our bank? 1.49.51%. 2. 56.10%. 3. 51.55%. 4. 50.20%. 5. NOA ANSWERS BR & NI Act 1.4 2.3 3.4 4.1 5.3 6.4 7.4 8.5 9.2 10.2 11.1 12.4 13.1 14.4 15.1 16.3 17.2 18.5 19.4 20.5 21.4 22.2 23.5 24.2 25.4 26.1 27.5 28.3 29.2 30.3 31.1)N 2)N 3)Y 4)N 5)N 6)N 7)N 8)N 9)N 10)Y 32.5 33.5 34.5 35.2 36.5 37.5 38.5 39.5 40.2 41.1 42.1 43.1 44.5 45.5 46.1 47.3 48.2 49.4 50.2 51.4 52.4 53.5 54.5 55.5 56.2 57.3 58.1 59.3 60.3

NOTES ON COMMERCIAL BANKS 1. Commercial Banks have to maintain CRR as Fixed by RBI from time to time (ranging between 0 % to 15% of NDTL) as per (sec. 42 (1) of ----------------------------a. Sec. 42(1) of RBI Act 1934 empowers RBI to stipulate minimum CRR 2. Commercial Banks have to maintain SLR as per-----------------------------------. a. Sec. (24 of BR Act 1948) It empowers RBI to stipulate minimum SLR 3. Bank Rate: is the rate at which RBI makes advances against approved securities or purchase rediscount eligible bills to provide financial accommodation to CBs and FIs. 4. The RBI is empowered to issue directives to Banks on lending policy under a. Sec. 21 of BR Act 1949 5. Selective Credit Control is Used to regulate distribution of Bank Credit to particular sectors of economy. The objective is to prevent speculative holding with help of Bank credit of certain essential commodities like food grains, edible oils, sugar, gur etc. RBI stipulates minimum margin, minimum Rate of Interest and ceiling on level of credit while lending against the specified essential commodities. NOTES ON BANKING & NI ACT 1. Components to be taken for arriving @ SLR requirements: 1. Cash with RBI in excess of CRR requirement 2. Balance in current account with SBI and its subsidiaries in India 3. Investments in Govt. securities, treasury Bills and other approved securities in India - Less Borrowings from RBI against approved Securities and Borrowings form SBI and other Notified Banks.

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2.

Rights of Holder of a Negotiable Instrument: 1. A holder can convert an endorsement in blank into endorsement in full 2. Holder can cross a cheque either generally or specially and also add the words "not negotiable" to the crossing. 3. Holder can negotiate the cheque to any third person if negotiation is not restricted as per tenor of the cheque. 4. Holder can claim payment for the instrument and can sue in his own name on the instrument 5. Holder can ask for a duplicate cheque if original is lost. Privileges of a Holder in Due course (HIDC) 1. HIDC possess better title free from all defects 2. Every prior party to a NI is liable to HIDC until instrument is duly satisfied 3. Rights of holder in due course to recover money are not affected even when originally incomplete instrument is later on filled up for higher amount by subsequent transfers. 4. The acceptor to a NI is liable to HIDC even when it is drawn on behalf of a fictitious person 5. The person liable to pay a NI cannot defend against HIDC that the instrument is obtained by unlawful means or for unlawful purposes. 6. the promisor or drawer of a NI cannot deny the original validity of the instrument 7. No endorser of a NI can deny the signature or capacity of any prior party to the instrument

3.

4. Payment in due course: means 1. Payment in accordance with the apparent tenor of the instrument 2. In good faith and without negligence 3. To any person in possession of NI 4. Under circumstances which do not afford a reasonable ground for believing that he is not entitled to receive the payment of the amount therein mentioned. 5. If payee of negotiable instrument is illiterate person, he may endorse the instrument by affixing his L.T.I. thereon. The LTI should be witnessed properly LTI of 'X' Attested by or witnessed by 'Z' - Advocate H.No. 2-2-12/1 Deshmukh Colony, Hyderabad - 500 007 6. Facultative Endorsement: The endorsee must give notice of dishnour of NI to endorser to make him liable. But when the endorser waives this condition by writing in the endorsement as notice of dishonour waived". It is called facultative endorsement. However the endorser remains liable to the endorsee for non payment of the instrument 7. 'Sans Recourse' Endorsement When an endorser of N.I. by express words in endorsement excludes his own liability thereon, the endorsement is called as 'Sans Recourse' endorsement. Eg" Pay to Ramakrishna Rao without recourse to me sd/Ramana Pay to Balakrishna or order @ his own Risk

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sd/Yashoda 8. Opening of Crossing: Even though, anybody can cross a cheque, but the crossing can be opened by drawer only. Paying banker should be careful while making payment of such cheque. The cash payment of such cheques should be made to drawer or his authorised agent only, and not to others or else it may lead to complications regarding position of different parties to it. 9. Essential requisite for general crossing - two parallel transverse lines - for special crossing - name of a banker

10. Incohate..; instrument is one which is incomplete as to its date, amount or name of payee. 11. Person who can countermand payment of a cheque is drawer, anyone of the joint account holders, authorised signatories, partner of a firm 12. "Stop Payment request letter" served earlier on Bank can be withdrawn only by the drawer, by all the joint account holders, by all authorised signatories together by a separate request letter. 13. Conversion means: Unlawful taking, using, disposing or destroying, interfering with goods which is inconsistent with the true owner's right of possession. 14. A bill may be dishonoured by non-acceptance or non-payment

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GENERAL BANKING BANKER CUSTOMER RELATIONSHIP 1. What is the maximum number of partners allowed in a firm carrying on the Business of Banking? 1.10 2.20 3. 2 4. 50 5. No limit 2. A person depositing his money in a Bank is 1. Secured Creditor 2. Unsecured Creditor 3. Depends upon the terms and conditions of the deposit 4. Some times secured creditor and in some other occasions unsecured creditor 5. None of these 3. A Garnishee Order served on Head Office of A Bank will come into force 1. Immediately on receipt of the order by Head Office 2. After receipt of the order by the Branch from Head Office 3. From the date of the order 4. After reasonable time for conveying the message to the branch where the account is maintained 5 None of these 4. Before affecting the Garnishee Order the Banker has a right to 1. Pay the cheques presented in clearing on that day, but are yet to be passed for payment 2. Pay the cheques presented across the counter on that day, but are yet to be passed for payment 3. Pay the cheques already passed for payment in respect of which the actual payment was not affected 4. Set off all debts due to the Bank at the time of the Order 5. All of the above 5. A banker would be justified in disclosing the affairs of his customer in the following case/cases 1. As per the practices and usages in the Banking business 2. With the express/implied consent of the customer 3. In Bank's own interest 4. In public/National interest 5. All of the above 6. Banker is permitted to disclose the affairs of the Customer under the following acts 1. RBI Act; 2. I.T. Act; 3. Companies Act; 4.1 & 2 above; 5. 1,2, & 3 above 7. Banker's obligation to honour its customers cheques ceases when: 1. Customer is sentenced to imprisonment 2. Customer meets with an accident 3. Customer is convicted in a case 4. Customer is adjudged as insolvent 5. All the above cases 2011

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The relationship of the Banker & Customer may be terminated 1. Voluntarily by the customer 2. By the banker by giving reasonable notice to the customer 3. By the process of Law as in the case of the death, bankruptcy etc. 4. On receipt of a garnishee order attaching the entire balance in the account 5. All of the above 9. A customer has submitted a cheque for collection through his tenant, who is a bank employee. The bank employee has fraudulently encashed the cheque and made some false entries in the pass book of the customer. In such a situation 1. Bank has to make good the loss caused to the customer 2. First the Bank has to recover the amount from the employee and there after it has to make good the loss 3. Bank has to reimburse the loss first and subsequently recover from his employee 4. Bank is not at all liable for the loss 5. None of these 10. Where a guardian has been appointed by a competent court for superintending the person or property or both of a minor, he will attain majority at the age of 1. 18 years 2.25 years 3.21 years 4.19 years 5. None of these 11. An account is opened by the guardian on behalf of the Minor. In the event of the minor predeceasing the guardian, the balance may be paid 1. To the mother of the deceased minor 2. To the guardian on production of minor's death certificate 3. To the legal heirs of minors. 4. Jointly to the mother and guardian 12. A joint account is in the names of X and Y operated by both of them jointly. On the death of X the credit balance in the account is payable to 1. Y 2. The legal heirs of X 3. As per the court orders only 4. Jointly to Y and the legal heirs of X 5. None of these 13. A mandate has to be registered with 1. Sub-registrar of assurances 2. Registrar of firms 3. Registrar of joint Stock Companies 4. The court under whose jurisdiction it falls 5. Need not be registered 14. A contract entered into by a minor is 1. Enforceable against him 2. Enforceable if the contract is ratified by him after attaining majority 3. Cannot be enforceable against him 4. Cannot be enforceable even if he ratifies the contract after attaining majority 5.3 & 4 above

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15. A Loan taken by the guardian of a Minor on behalf of the minor binds the estate of the minor only when 1. The guardian is legally competent to represent the minor 2. The contract entered into is on behalf of the minor 3. The contract is for the benefit of the minor 4. The minor ratifies the contract after attaining majority 5. Only when, 1,2 & 3 above are satisfied 16. While extending credit facilities to an illiterate person branches should 1. Get the thumb impression witnessed on all loan documents 2. Need not get the witness for thumb impressions on loan documents unless otherwise specified in documents 3. Explain the terms and conditions of the sanction in a vernacular language in the presence of a witness, 4. Explain the terms and conditions of sanction and a certificate need to be appended 5. 2 and 3 above 17. BCSBI is set up by 1. An act of Parliament 2. Indian banks Association 3. Department of RBI 4. Independent Society by RBI 5. None of these 18. BCSBI is set up to 1. To act as controller of Banks 2. To supervise the systemic deficiencies 3. To conduct Customer service meetings 4. To conduct meetings of Banks on customer service 5. To oversee implementation of Fair Practice Code evolved by IBA 19. The liability of a Partner for a Loan availed by the Firm is 1 . Equal share with other partners 2. Limited to his share or property in 3. As per his proportionate share in the partnership firm 4. Unlimited, and joint and several 5 None of these

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20. You have received a proposal from a partnership firm and on scrutiny of partnership deed you found that there is a clause in the deed saying that "any liability not shown in the books maintained by the firm shall not be binding on the firm". What course of action do you adopt? 1. Do not entertain such a proposal 2. Ignore the clause and take up the proposal 3. Refer to controlling office for clarification/guidance 4. Take up the proposal and obtain a letter signed by all the partners stating that "not withstanding the said clause, we are jointly and severally be liable for the entire amount borrowed from the Bank" 5. Seek the legal opinion from approved advocate and act accordingly 21. Partnership letter in a prescribed format (RF 23) duly signed by all the partners has to be obtained along with the application for advance because 1. Through this letter partners undertake that they do not borrow from other banks/FIs etc. 2. It authorises the Bank to proceed against the individual properties of partners. 3. It gives authority to the Bank to inspect the goods and provide access to the goods/securities 4. It casts a responsibility on the part of the firm/partners to give a notice in writing to the Bank in case of any change n the constitution of the firm. 5. It authorises one or more partners to borrow and execute documents on behalf of the firm 22. In case of manufacturing/trading firms the partners are not having implied power to borrow on behalf of the firm and bind all the partners in the following case/cases 1. To pledge goods/securities 2. To overdraw the account during the ordinary course of business; 3. To discount a bill of exchange 4. To mortgage a firm's immovable property; 5. In all the four cases 23. A loan proposal from a partnership firm in which Limited company / HUF are there as partners 1. Can be considered in the usual course of business 2. Should not be considered at all in view of the recent Supreme courts judgement 3. Can be considered with prior permission from controlling office 4. Can be considered 5. None of these 24. Maximum number of share holders in a Public limited Company 1.7 2.50 3. As decided by the Board of Directors As per the Articles of Association 5. No restriction 25. Maximum number of share holders in a Private Limited Company 1.50 2. 100 3.7 4. As per the Memorandum of Association 5. No restriction 2011

4.

15

,

26. If a Company intends to borrow more than its paid up capital and free reserves as prescribed under section 293 (1 d) of the Companies Act. 1. A resolution from Board of Directors is necessary 2. After borrowing the money, it has to be ratified by the share holders in a General Body Meeting 3. A resolution has to be passed by the share holders in a General Body Meeting prior to the borrowing 4. It can borrow in usual course and get it confirmed by the Board of Directors 5. None of these 27. As per Section 292 of the Companies Act, Board of Directors can delegate the powers to borrow monies otherwise than on debentures to . 1. Managing Director 2. Manager or any other Principal Officer of the Company 3. Principal Officer of the Branch Office, in case of a Branch Office of the company 4. A Committee of Directors 5. To any of the above 28. Charge that does not require registration under section 125 of the companies Act is 1. Hypothecation 2. Mortgage 3. Pledge 4. Assignment 5. None of these 29. Out station instruments Up to Rs. 15000/- submitted for collection are to be credited to customer's account if he so desires & is eligible within a period of ---------------------30. For the purpose of payment of penal interest on the delayed collection of outstation cheques, extra ordinary delay has been defined as: 1.period of 30 days 2.45 days beyond normal collection period 3.60 days beyond normal collection period 4. Delay exceeding 90 days beyond normal collection period. 5.120 days. 31. The Banking Ombudsman Scheme came into force : 1. Through a special enactment by parliament 2. As an amendment to the Consumer Protection Act 3. Through a Central Legislation 4. Through the Regulatory powers of RBI 5. None of these 32. Time allowed for collection of outstation cheques presented and drawn at all places other than state capitals (excluding North Eastern Region and Sikkim) and Metros------------- is days. 2011

16

,

33. Where the delay is beyond 45 days but not exceeding 90 days Interest at the rate of-----------------to be paid for delay in collection of instruments . 34. The Banking Ombudsman Scheme 2006 came into effect from ----------------------35. In respect of Instruments to be credited to Overdraft/Cash Credit/Loan A/c the rate of interest payable for delay in collection is: 1. SB + 2% 2. PLR Rate 3. Interest rate applicable to such an advance 4. BMPLR or Interest rate on such an advance which ever is lower 5. FD Int. for applicable period and 2% over FD Int. in case of abnormal delay.

ANSWERS Gen bnk 1.1 2.2 3.4 4.4 14.5 15.5 16.5 17.4 18.5 19.4 5.5 20.4 6.5 21.4 7.4 8.5 9.1 10.3 11.3 12.4 13.5 28.3

22.4

23.2 24.5 31.4

25.1

26.3

27.5

29. Immediately (instant credit) (Prevailing) Int. rate 34. 01.01.2006 35.3

30. 4

32.14 days 33.FD

---:O:---

2011

17

,

ANDHRA BANK & DEPOSIT SCHEMES 1. 2. Andhra Bank attained the rank of position among Global 500 top Banks for 2010 conducted by UK Based Brand Finance Co, 1. 192 2. 461 3. 158 4. 197 5.400 In terms of brand value, our Bank has been listed for .. million dollars for the year 2010 1. 520 2. 197 3. 134 4. 169 5. 736 The number of Regional Rural Banks sponsored by Andhra Bank are 1. 5 2. 2 3. 4 4. 1 5.2 Andhra Bank has launched credit card in the year 1.1979 2.1980 3. 1981 4.1984 5.1985 Aggregate deposits of Andhra Bank as on 31.3.2010 are 1. 33922 cr 2. 59354 cr 3. 77688 cr 4. 45100cr 5. 51200 cr Total advances of Andhra Bank as on 31.3.2010 is 1. 44431 cr 2. 34556 cr 3.34960 cr 4. 38110 cr 5.56505 cr The Net profit of Andhra Bank as on 31.3.2010 is 1. 95.01 cr 2. 653 cr 3. 726.80 cr 4. 841.22 cr 5. 1046 cr Deposit Loan should not be allowed in case of 1. Bhagya Lakshmi Deposit 2. FCNR Deposit 3. AB Tax Saver 4. NRE Deposit 5. all deposits What is the age limit for insurance coverage under Insurance Current Account 1.18 to 55 years 2. 18 to 60 years 3. 5 to 70 years 4. 5 to 60 years 5.0 to 70 years What is the age limit for insurance coverage under ABJ Special 1. 5 to 70 years 2. 0 to 70 years 3. 18 to 60 years 4. 18 to 55 years 5. None of the above Deposit Loan against term deposits of other branch 1. should not be allowed 2. can be allowed to staff members 3. can be allowed to important customers 4. can be allowed after informing to the branch holding the deposit 5. can be allowed if the loan amount is less than Rs. 20,000/Penalty for premature cancellation of a term deposit of an individual up to Rs1.00 lakh 1. 2% 2.1% 3. 2% if the contracted period of deposit is less than 91 days 4. 1% if the contracted period of deposit is 91 days and above 5. No penalty Which of the following statement is true with regard to AB Arogyadaan scheme? 1. It is a group Mediclaim Insurance Scheme which takes care of Hospitalisation expenses. 2. Issued as a Floater Policy, in association with M/s United India Insurance Company Ltd. 3. Age limit for the first time coverage is up to 60 years. 4. Statement 1&3 is true. 5. Statement 1,2&3 is true.

3. 4. 5. 6. 7. 8.

9. 10. 11.

12.

13.

2011

18

,

14.

15.

16. 17.

18. 19.

20.

21.

22. 23.

24.

25. 26.

The maximum Balance in S.B. Account that can be maintained by the account holder to get interest is 1. Rs. 3 lakhs 2. Rs. 5 lakhs 3. Rs. 10 lakhs 4. Rs. 1 crore 5. No limit What is the maximum amount of core instalment in case of Recurring Deposit Plus 1. 1000/2. 100,000/3. 100/4. 10000/5. No limit What is the maximum period for opening an RD Plus account? 1. 12 months 2. 24 months 3. 36 months 4. 48 months 5. 60 months Which of the following is not true with regard to AB Arogyadaan? 1. The policy will be valid for one full year from the date of joining the scheme. 2. A nominal amount of Rs.55/- per account is collected as scheme administrative charges. 3. The premium paid under the scheme is eligible for Income Tax relief u/s 80D. 4. The coverage is available starts from Rs.50,000/- onwards. 5. TPA is the third party administrator empanelled by Insurance Company. Minimum period for which Kalpataruvu Deposit can be accepted is 1.3 Months 2.6 Months 3.1 Year 4. 2 Years 5.46 days What is the eligible amount of accidental insurance coverage for Kiddy Bank A/c. 1. 1.00 lac to kid 2. 1.00 lac to parent 3. 2.00 lacs to both 4. 1.00 lac to each 5. NIL Cash payment of Term Deposit should not be made as per Sec. 269 T of I.T. Act if the aggregate of Deposits payable 1. Exceed Rs. 10000 2. Rs. 20000 & above 3. exceed Rs. 50000 4. Exceed Rs. 1 lakh 5. None of these If a deposit is cancelled prematurely before minimum period from the date of deposit, the rate of interest to be charged on the deposit loan allowed against it is 1. 2% over and above the Rate of interest on deposit 2. 2% 3. 1% over and above the rate of interest on deposit 4. No interest is charged 5. Commercial rate of interest presently BMPLR+3.5% After joining Arogyadan policy, upto what age can an individual continue to be eligible for medical insurance 1. 75 years 2. 70 years 3. 80 years 4. 85years 5. 68 years Minimum balance (QAB) in "AB Super Salary " Savings Bank Account 1. Rs. 1500 2. Rs. 2000 3. Rs. 2500 4. Rs. 4000 5. Rs.5000 Maximum Insurance coverage per individual in Abhaya Gold Savings Bank Account is 1. Rs. 10000 2. Rs. 25000 3. Rs. 100000 4. Rs. 200000 5. Rs. 500000 Insurance premium per individual to be remitted to Insurance Company in Abhaya Gold Savings Bank Account is 1. Rs. 200 2.Rs. 45.00 3. Rs.37.00 4. Rs. 50 5. Rs. 34.30 Service charges that will be credited to P & L a/c on each Abhaya Savings Bank Account every year at the time of remitting insurance premium is

2011

19

,

27.

28.

1. Rs. 12 2. Rs. 2.75 3. Rs.10 4. Rs. 15 5. Rs. 3 What is the penalty for premature closure of RD Plus Deposit account ? 1. Rs. 50 per '000 2. Rs. 10 per "000 3. 0.50% of balance Min.50/Max.500/-if closed within 6 months 4. Min.Rs100 per year , Max.Rs.500/5. Rs. 100 per year Penalty for delayed payment of instalment in Recurring Deposit Plus is calculated as follows: 1. 06 paise for every instalment of Rs. 5 per month 2. 08 paise for every instalment of Rs. 5 per month 3. 10 paise for every instalment of Rs. 5 per month 4. Nil 5. 12 paise for every instalment of Rs. 10 per month In case of ABJeevan Abhaya savings bank account ,the premium payable for the age group 51-55 years is 1. Rs.237 2. Rs.372 3. Rs.805 4. 855 5. None of the above Form to be used for variation of nomination by a depositor is 1. DA 1 2. DA2 3. DA3 4.DV1 5. DV2' The following can not be a nominee 1. Pardanashin woman 2. Minor 3. Charitable Trust 4. Other than a close relative of the depositor 5. None of these Nomination facility is not available for the following banking facility 1. Safe Deposit Locker 2. Kiddy Bank 3. Current account 4. Term deposit in the name of the minor 5. Gold Loan In the case of deposit held by joint persons, the nomination can be made in favour of 1. a single individual 2. more than one person in case deposit is payable jointly 3. more than one person in case deposit is payable to either or survivor(s) 4. Separate persons by each depositor 5. None of these In the case of Safe Deposit Lockers held by two hirers with operating instructions 'Either or Survivor' 1. there can be only one nominee 2. Each hirer is entitled to nominate separately 3. Both of them jointly nominate separate nominees 4. There is no nomination facility 5. None of these A Savings Account is in the joint names of X & Y payable jointly with a nomination in favour of Z. On the death of X, the credit balance held in the account is payable to 1 .Y 2. Z 3. Y & Z jointly 4. Y and legal heirs of X jointly 5. Y,Z and legal heirs of X jointly Capital Gains Account Scheme is first introduced in the year 1. 1980 2. 1971 3. 1988 4.1991 5.1986 Probate is required in the case of 1. Intestate claims 2. Testamentary claims 3. Nominee claims 4. Where succession certificate is submitted 5. None of these

29.

30. 31. 32.

33.

34.

35.

36. 37.

2011

20

,

38.

39. 40.

41. 42. 43. 44. 45.

46.

47.

48.

49.

50.

51.

In Intestate succession, the production of the following document does not arise 1. Indemnity Letter 2. Death certificate 3. Will executed by the deceased 4. Sworn Declaration by the major claimants 5. None of these What is the minimum balance in "AB Premium Current Account" 1.Rs. 50,000 2. Rs.1,00,000 3.Rs. 2,00,000 4. Rs. 5,00,000 5. Rs.5000 What is the minimum period for RD Plus account 1. 6 months 2.12 months 3 . 3 months 4. No Minimum months. 5. None of these Percentage of Net NPAs to Net Advances as on 31.3.2010 1. 1.02% 2. 0.17% 3. 3.80% 4. 3.33% 5. 7.5% The percentage of CASA to total deposits as on 31.3.2010 is 1.29.43% 2.8.53% 3. 9% 4. 10.5% 5. 17% Capital Adequacy ratio of our bank for the year ended 31.3.2010 is 1. 10% 2. 11% 3. 12% 4. 13% 5.13.93% The percentage of gross NPAs to gross advances for 31.3.2010 is 1. 0.86% 2. 2.7% 3. 1.5% 4. 2.0% 5. 1.25% Service Charges that will be credited to P&L A/c in insured C.D A/c per individual 1. Rs. 38/ 2. Rs.30.00 3.Rs. 35.90 4. Rs.17.95 5.Rs. 18/The rate of interest chargeable on loan against deposit with 10% margin to depositor, Partnership deposits of partner, to a proprietary concern against deposits of proprietor is 1. 3% over the Deposit Rate 2.4% over the Deposit Rate 3. 2.5% over the Deposit Rate 4. 2% over the Deposit Rate 5. 5% over the Deposit Rate The operating Profit of our bank as on 31-3-2010. 1.Rs.1810 Cr. 2.Rs.470.28 Cr. 3.Rs.456.72 Cr. 4.Rs.502.68 Cr. 5.Rs.575.57 Cr. Name of the insurance company that is jointly floated by our Bank, BOB & L&G. 1. National insurance 2. New India Assurance co ltd., 3. IFFCO-TOKIO 4. India first Insurance Co., 5. Oriental Ins. Productivity in banking industry means: 1.Total business of the bank 2.Earnings Per Share 3.Profit per employee 4.Business per employee 5.Return on Assets. What is the maximum amount that can be given if a withdrawal slip is presented by a depositor who did not bring the SB pass book? 1. Rs. 10000. 2. 2000. 3. 5000. 4. Any amount if the identity is known. 5. dont pay until he brings the pass book. What is the charge per leaf for SB account after utilising 25 leaves free of cost? 1.Rs.1.00 2.Rs.2.50 3.Rs.5.00 4.Rs.3.00 5.Rs.4.00

2011

21

,

52.

53.

With a view to increasing low cost deposits, it is decided to permit branches to open new SB Accounts with Zero balance for: 1. the salaried class. 2. Traders. 3. professionals. 4. SHGs. 5. Any body can open. Point out the incorrect statement out of the following with regard to opening SB account for government departments. 1. Banks are allowed to open Savings Bank Accounts in the names of central/State Government departments/bodies/agencies 2. only for operating grants/subsidies released for implementation of various programmes/schemes 3. Such programmes must have been sponsored by central/State Governments. 4. Banks must insist upon an authorization certifying the permission is accorded by the governments to open such account. 5. State Governments cannot open SB accounts for any purpose. Which Insurance company is tied up for AB JEEVAN ABHAYA (ABJ) scheme? 1. M/s Birla Sun Life Insurance Company Limited. 2. HDFC life insurance. 3. India first Insurance 4. LIC 5. M/S. IFCO TOKYO. The premium under ABJ deposit scheme is to be debited once in: 1. In a month. 2. A quarter. 3. half-year. 4. In a year. 5. NOA. The Insurance period under ABJ deposit scheme is: 1. August 1 to September 30, every year. 2. 1st December to 30th November every year. 3. April 30 to March 31 every year. 4. February 21 to February 20 every year. 5. January 1 to December 31 every year. In case of an accidental death of the policy holder with an assured amount of 1 lakh under ABJ scheme, the nominee will get a sum of. 1. 50000. 2. 1 lakh. 3. 2 lakhs. 4. 1.5 lakhs. 5. 5 lakhs. What is the age group required for opening an ABJ account in our bank? 1. 5 to 70 years. 2. 5 to 60 years. 3. 18 to 70 years. 4. 5 to 55 years. 5.18 to 55 years. What is the sum assured under ABJ Scheme in case of normal death? 1. 1 lakh. 2. 2 lakhs. 3. 50000. 4. 25000. 5. No insurance in case of normal death. Which of the following statements is not correct regarding the insurance policy under ABJ Scheme? 1. No individual Policy will be given 2. This is a Group Policy 3. There will be no Surrender Value. 4. Surrender value is 90% of the total premium paid. 5. None of 1,2 & 3 What is the amount to be deducted as service charges while operating ABJ deposit? 1. Rs. 50 2. Rs.22 3. Rs. 40.

54.

55. 56.

57.

58.

59.

60.

61.

2011

22

,

62.

63.

64.

65. 66. 67. 68.

69.

70. 71.

4. Rs. 41 5. Rs.53 Which of the following statements is false while disposing of claims under ABJ insurance policy in case of Suicide or self-inflicted injury? 1. See whether the Life Insured is medically sane or insane. 2. Suicide is exclusion in the first year of joining the scheme 3. From second year suicide is not exclusion 4. Sum insured of Rs. 1.00 lac will be paid by the Insurance Company, if such death occurs in the second year. Point out the falsifying statement with regard to the detection of fake notes across the counter. 1. The forged notes found in the note packets should be segregated and impounded. 2. The case should be reported to the police. 3. In no case, the entire note packet with forged notes should be returned to the tenderer. 4. The impounded note should be returned to the tenderer. 5. Forged notes are to be forwarded to the Issue Offices of the RBI What is the preferential rate of interest paid above the normal rate on deposits accepted from senior citizens 1. 0.75% 2. 0.50%. 3. 0.25%. 4. preferential rate withdrawn. 5. NOA How many operations are allowed free of charge for a locker in a quarter? 1. 10 2. 15 3. 20 4. 25 5. 06 What is the charge for additional operations/transactions over the permitted number of transactions? 1. Rs. 32.00 2. Rs. 38.00 3. Rs. 50.00 4. 25.00. 5. Rs. 10.00 Name the company that covers risk of the depositors under Kiddy Bank? 1. The GIC. 2. The oriental insurance. 3. UIICO 4. The national insurance.. 5. Ms IFCO TOKYO. What is the minimum balance to be maintained by the depositor under AB Kiddy Bank? 1. Rs. 150. 2. Rs. 100. 3. Rs. 250. 4. Rs. 400. 5. RS. 500. What is the sum assured to the parent/ guardian of depositor under Kiddy Bank, in case of accidental death? 1. 25,000 each to the parent/guardian. 2. 50,000 to the next of depositor. 3. 75,000 to the guardian only. 4. 1.00 lakh . 5. 2.00 lakh to the kith of depositor only. What is the insurance premia to be debited from the account-holder of Kiddy Bank to cover under the insurance scheme? 1. Rs. 32. 2. 18. 3. Rs. 50. 4. Rs. 12 5. 26.25. What is the amount of service charges to be debited to the account holder of Kiddy Bank while collecting insurance charges every year? 1. Rs. 32. 2. Rs20. 3. Rs. 50. 4. Rs. 12 5. Rs26.

2011

23

,

72.

73.

74.

75. 76.

77.

78. 79.

80.

Which of the following is correct relating to the accounting year for Kiddy Bank? 1. The year starts on April 1, and closes by March 31, every year. 2. Starts from February 21, to February 20, every year. 3. November 1st to October 31, every year. 4. October 1, to September 30, every year. 5. None of the above. Nomination is governed by which of the following Act ? 1. RBI Act 2. N I Act 3. B R Act 4. I T Act In case of Abhaya savings bank (ASB) which of the following statement is false 1. The total insurance premium is Rs.9/- per head. 2. The penal charges are collected from Pensioners, staff and senior citizens. 3. The service charges are Rs.10/- per head. 4. Individuals within the age group of 5 to 70 years are eligible to open the account. 5. All the joint account holders are to be compulsorily covered. Premium for ABJ for a depositor of 35 years of age: 1. Rs.238 2. Rs.235. 3. Rs.221. 4. Rs.250 5. Rs.236. Branches are required to maintain separate registers for recording entries of cash transactions of Rs. (CTRs) 1. 2 lakhs and above. 2. Not required 3. 5 lakhs and above. 4. Only for suspicious transaction. 5. Rs.10 lacs and above. Who is authorized to impound counterfeit currency notes? 1. Branches of PSBs. 2. The currency chests. 3. Treasuries. 4. All RBI Issue Offices. 5. All of the above. The interest payable on SB group accounts as per the revised norms & periodicity is 1. Monthly 2. Quarterly 3. Daily 4. Yearly 5. Half-yearly Name the insurance company with which our bank has entered in to an agreement to cover our Abhaya Savings Plus Account holders under Group Personal Accident Insurance Coverage. 1. UIICO. 2. Oriental insurance Company. 3. M/s IFFCO-TOKIO. 4. General Insurance Company. 5. None of the above Insurance charges of Rs.70/- to be debited to the Abhaya Gold account holder should be appropriated in the share of: 1. Rs. 25/- towards P&L and 46 to insurance co. 2. Rs 25/- to branch P&L and Rs/- 45/ to Insurance co. 3. Rs 45/- to our P&L and Rs/ 26 to the insurer. 4. Rs 46/- to branch P&L and Rs/-25 to the insurance co. 5. None of the above.

2011

24

,

81.

82.

83.

84.

85.

86.

87. 88.

Which of the following statements is incorrect with regard to Insurance Year of our deposit schemes? 1. Abhaya Gold commences from 1st November, of the year to 31, October, of the subsequent year. 2. For ICD the year starts from 21, February to 20th Feb of the next year. 3. Abhaya Savings Bank accounting year starts from 1 st September to 31, August of every next year. 4. All of the above. 5. None of the above. In the event of a death claim being admissible under the policy covering Abhaya Gold a/c, the funeral expenses that can be paid by the insurance company: . 1. Actual. 2. Max of Rs. 5000. 3. 2000 Rs. 4. max of Rs 2, 500. 5. No such provision now. What is the maximum compensation that can be paid for the education grant of dependent child aged above 10 years in the event of death of the insured under Kiddy /bank? 79.Rs. 5000. 2. Rs. 8,000. 3. Rs. 3000. 4. Rs. 5000 per child. 5. 10000/ Under Abhaya Gold deposit scheme, Intimation of accidents giving rise to claims shall be given to Insurance Company within how many days from the date of the accident? 1. 30 days. 2. 120 days. 3. 90 days 4. 60 days. 5. 180 days. Under Abhaya Gold scheme, claim forms are to be submitted to the insurance company Within: 1. 180 days from the date of accident. 2. 180 days after the intimation about the accident. 3. 90 days after the date of intimation about the accident. 4. 120 days after the date of the accident. 5. None of the above. The minimum amount for which a certificate of Deposit can be issued is 1. Rs. 5 lakhs with the multiples of 5 lakhs. 2. Rs. 5 lakhs with the multiples of 1 lakhs 3. Rs. 25 lakhs with multiples of 5 lakhs. 4. Rs. 1 lakh with multiples of 1 lakh. 5. None of the above. A minor can open and operate Savings Bank by him self, if he is of age above 1. 10 years 2.12 years 3.15 years 4. 18 years 5. 21 years In the event of death of a depositor of a term deposit before the maturity of the deposit, and if the deposit is claimed for payment after maturity, what is the rate of interest payable from the date of maturity till date of payment.. 1.Simple interest at applicable rate obtaining on the date of maturity, for the period for which the deposit has remained beyond the date of maturity 2.Compound interest at applicable rate obtaining on the date of maturity, for the period for which the deposit has remained beyond the date of maturity 3.Compound interest at applicable rate obtaining on the date of payment, for the period for which the deposit has remained beyond the date of maturity 4.Simple interest at applicable rate obtaining on the date of payment, for the period for which the deposit has remained beyond the date of maturity 5. NIL

2011

25

,

89.

90. 91. 92.

93. 94.

95.

In the event of death of a depositor of a term deposit after the maturity of the deposit, and if the deposit is claimed for payment after maturity, what is the rate of interest payable from the date of maturity till date of payment.. 1.Savings bank rate as applicable on the date of maturity, 2.No interest is payable 3.Compound interest at contracted rate 4.Simple interest at applicable rate obtaining on the date maturity 5. Compounded interest at prevailing rate. Andhra bank has tied up with how many Mutual Funds for distributing their products. 1. One 2.Six 3. Four 4. Six 5. Eleven The service tax applicable on the service charges collected by banks 1.10.20% 2.10.30% 3.15.50% 4.Nil. 5.None of the above Any complaint which is received through the office of Banking Ombudsman should be replied with in a maximum time limit of ________. 1. 3 days 2. 7 days 3. 30 days 4.10 days 5. 45 days What is our net interest margin for the year ended March 2010? 1. 3.03 2. 2.70 3. 3.21. 4. 3.01 5. 2.94 Which of the following is true in case of interest payment of delayed collection: 1. applicable only for inland instruments. 2.Payment of interest shall be made without any demand from customers. 3.Interest shall be paid only if it works out to Rs.5/- & more. 4. Statement 1, 2&3 are true. 5.Statement 1 & 3 are correct. Which of the following is incorrect in case of Abhaya savings Plus? 1. Individuals who have attained the age of 5 years and have not completed the age of 70 years shall be eligible to be covered . 2.Singly, jointly with 'E or S' or 'anyone or survivor', HUF accounts. 3.Clubs, Societies & Associations are eligible for coverage. 4.The premium payable is Rs.18/-. 5. The service charges are Rs.18/Which of the following is correct with regard to AB Money time? 1. Deposit Amount Minimum Rs.25,000/- and in multiples of Rs.1000/- thereafter. 2. Period of Deposit Min:15 months, Maximum: 120 months 3. Rate of Interest As applicable for Different maturities ruling from time to time( 0.5%extra payable to senior citizens) 4. Existing/Retired Staff are eligible for preferential rate of interest and concession rate of interest on loans against deposits. 5. All are correct. Which of the following is correct in case of AB Tax saver. 1.An assessee can invest in the term deposit of any amount not exceeding one lakh rupees in a year. 2.The amount to be invested in the term deposit shall be a minimum of one hundred rupees or multiples thereof. 3.No nomination shall be made in respect of a term deposit applied for and held by or on behalf of a minor. . 4.All are correct 5.None is correct

96.

97.

2011

26

,

98.

What is the quarterly average minimum balance to be maintained in " AB Super salary SB account" 1. Rs. 2000 2. Rs. 3500 3. Rs.4000 4. Rs. 5000 5. Rs.1000 What should be the last drawn take home pay of individual staff member in the case of "AB Super salary SB a/c" 1.Rs. 10,000 2. Rs.12,500 3. Rs.20,000 4. Rs. 15,000 5. No such stipulation.

99.

100. Which of the following is incorrect statement? 1. ABFSB can be attached to ATM card. 2. ABFSB can be attached to Debit card. 3. Cancellation of the units takes place as per First in First out FIFO method. 4. AB Freedom deposits offer liquidity to the customers. 5. Sweep & Auto reverse sweep facility is available. ANSWERS (OUR BANK & OUR DEPOSIT SCHEMES Q 1 11 21 31 41 51 61 71 81 91 A 2 1 5 3 2 2 3 2 5 2 Q 2 12 22 32 42 52 62 72 82 92 A 3 5 3 5 1 1 2 3 5 3 Q 3 13 23 33 43 53 63 73 83 93 A 2 5 5 1 5 5 4 3 5 5 Q 4 14 24 34 44 54 64 74 84 94 A 3 5 3 4 1 3 2 2 3 4 Q 5 15 25 35 45 55 65 75 85 95 A 3 2 2 4 2 4 1 2 1 3 Q 6 16 26 36 46 56 66 76 86 96 A 5 5 3 3 4 2 3 5 4 5 Q 7 17 27 37 47 57 67 77 87 97 A 5 4 3 2 1 2 3 5 1 4 Q 8 18 28 38 48 58 68 78 88 98 A 3 2 4 3 4 5 2 5 1 4 Q 9 19 29 39 49 59 69 79 89 99 A 3 4 3 2 4 1 4 1 1 5 Q 10 20 30 40 50 60 70 80 90 100 A 4 2 3 1 5 4 1 2 5 3

2011

27

Andhra Bank Staff College Hyderabad - Current Deposit (CD) (Insurance coverage optional) Eligibility Criteria Age (for Insured Current Deposit (ICD) Savings Bank SB (Insurance coverage optional)

Insurance linked Deposit Schemes- at a glance Abhaya Savings Bank ASB Abhaya Savings Bank Plus ASB+ Individuals Either single or joint Abhaya Gold (ABG) AB JEEVAN ABHAYA (ABJ) AB Kiddy Bank

Individuals, JHF, Prop. Concerns, Partnership firms, Pvt., Ltd. Co.s, Public Ltd., Cos. Accounts of OD/ Overdraft /Cash Credit/PAGCC 18 to 55 years 5 to 70 yrs 18 to 55 years

Children (Minors) Children up to 18

insurance coverage) Insurance Cover (Per person)

5 to 70 yrs

18 to 55 years

yrs. / Parents - 1870 yrs Rs.1 lac each for kid & parent /guardian

Rs.1.00 lac

Rs.1.00 lac

Rs.1.00 lac

Rs.25000/-

Rs.50000/-

Rs.1.00 lac

Rs.1.00 lac

Natural / accidental death. Risk covered (Risk coverage for natural death after 45 days from opening account) Age group/ Premium per person- p.a (Rs.) Service Charges Total/person/pa.Rs Periodicity of collecting premium / Service charges. Insurance Company Insurance year Transfer of Premium Information of accident Claim submission Area Minimum Balance With Cheque Book (Rs.) Without Chq. Book (Rs.) Circular @ 028/51/04 Dt.30.04.2010 R1000

Accidental death / partial or permanent disability

Natural / accidental death. (Risk coverage for natural death after 45 days from opening account) 18-35 235 36-50 407 40 447 51-55 805 40 845 10.00 19.00 18.00 36.00 25.00 70.00 Accidental death / partial or permanent disability

Natural / accidental death. (Risk coverage for natural death after 45 days from opening account) 9.00 18.00 45.00 18-35 235 40 275 36-50 407 40 447 5155 805 40 845 20 52.00 32.00 Accidental death# / permanent or partial disability

18-35 235 40 275

36-50 407 40 447

51-55 805 40 845

36.00 30.00 66.00

40 275

Premium for new accounts is to be collected on the day of opening of the account and renewal premium of existing accounts is to be debited on the last day of the insurance year to the credit of non-operative collection account of the respective company. Premium collected for new accounts is to be transferred to the main account of the insurance company maintained at different branches in Hyderabad at the end of each month and renewal premium is to be remitted on the first day of the insurance year along with details of premium collected. In case of PAGCC a/c, the scheme is optional and premium is payable by borrower directly and should not be debited to a/c. Service charges colleted on the day of opening of account and at the time of renewal are to be taken directly to P&L account. India first Life Insurance 1st Dec to 30th Nov UII Co.Ltd 21st Feb to 20th Feb India first Life Insurance 1st Dec to 30th Nov 1st Sep to 31st Aug Endowment Commissioner's office Extension Counter, Hyderabad A/c No.150911011000009 UII Co.Ltd 1st Nov to 31st Oct 1st Nov to 31st Oct Himayatnagar Branch A/c No. 02111011001846 India first Life Insurance 1st Dec to 30th Nov UII Co.Ltd 1st Nov to 31st Oct

Kandivalli, Mumbai A/C.No

Abid Road, Hyderabad 070511011021008 Within 30 days of accident directly to the Insurance Co.

Kandivalli, Mumbai A/C.No

Hyderguda Branch A/c No.020811011001395

Kandivalli, Mumbai A/C.No

Kachiguda Br, A/C.No032111011001070

121011100001361Within 90 days of death / accident directly to the Insurance company. S2000

121011100001361

121011100001361

Within 90 days from the date of accident/ death directly to the concerned Insurance company Within 180 days from the date of accident / death to the concerned Insurance Company, through Branch.

U3000

M5000

R1000

S2000

U3000

M5000

R 250

S 250

U 500

M 500

R 300

S 500

U 500

M 500

R 400

S 500

U 500

M Rs.750/-for those of 18-35 yrs of age in Rural, Semiurban & Urban Branches. & Rs.1000/- for rest of the branches and age groups. 500

Rs.1000/-

Rs.100/-

100

250

250

250

150

250

250

300

200

300

300

-407/51/25 Dt.19.02.2009

300

028/51/04 Dt.30.04.2010

028/51/04 Dt.30.04.2010

068/51/5 Dt.31.05.07

Service Charges are Exclusive of Service Tax

# Education grant of Rs.5000 & 10000 for 0-10 & 11-18 age groups respectively on accidental death of parents/ guardian + Life Insurance coverage can be extended to the parents aged between 18-55 yrs. under ABJ scheme by debiting additional premium.

Prepared by Rama Rao Chauhan - Updated on 21/03/2011

28

, AB PREMIUM CURRENT ACCOUNTWho can open ? Minimum balance Facilities available Individuals, Joint Account holders, HUF, Sole Proprietors, Partnership firms, Limited Companies. Rs.1,00,000/For all customers All facilities of Core banking 50% concession in Service charges for funds remittance within our bank No folio charges Free cheque books Free internet banking Free multi city cheque book if Monthly Average balance of Rs.5.00 lakhs or more is maintained. Free ATM/Debit card for 1st year For Individual & Sole proprietary accounts only Free monthly statement of account Free Demat account (Conditions apply) Free Credit card (Individuals & Sole Proprietor) Balance in excess of Rs.2.00 lakhs can be converted to Term deposit (in units multiples of Rs.10000/-) subject to AB Freedom guidelines. Rs.400/- Per Quarter

Penal charges for not maintaining minimum balance

AB SUPER SALARY SB ACCOUNTWho can open? Minimum balance Facilities Available Salaried Staff of any company / organization drawing salary through our Bank Can be opened with ZERO balance Quarterly average balance of Rs.5000/- to be maintained No folio,/ No transaction charges Free remittance up to Rs.25000/- per month Free internet banking facility Free access to Non Andhra Bank ATMs Free monthly statement of account per month. Free reply to e-mail to balance queries Free cheque book (50 leaves in a year.) Free multi city cheque book at select centres provided monthly average balance is Rs.50000/-. Free ATM/Debit card (first year) Free Credit card / PDC on specific request. Free Demat account / Online trading (conditions apply) Auto sweep of balances in excess of Rs.10000/- to term deposits, as applicable to AB freedom A/c. Depositors eligible for Retail Loan as per guidelines of respective loan facility. OD equivalent to last drawn net salary at BMPLR. Account holder having 60% net salary can draw up to the limit once in a quarter and repayment in 2 months. Free NEFT /RTGS facility twice in a month. Free personalised Chequebook (50 leaves in a year) for monthly average balance of Rs.10000/-and above. ABJ scheme can be extended as per extant guidelines. Rs.150/-Per Quarter Non salaried persons also can avail the above facilities provided they open account under this scheme with minimum balance of Rs.5000/- and NOT with zero balance. No OD facility is allowed.

Penal charges for not maintaining minimum balance NON SALARIED PERSONS

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29

ANDHRA BANK STAFF COLLEGE: HYDERABAD () TERM DEPOSITS (General) Scheme Plan Special feature Who can open account Min RD + RD Plus FDR Fixed KTD CC BLD Daily savings

RecurringStep up option: Up to 10 times and multiples of core installments any number of times during the month. Step down option: Any time but not below the core installment.

Reinvestment Higher return on deposit Power of compounding Round amt. of deposit & Odd amt. of MV. Odd amt. of deposit & Round amt. of MV.

Monthly installment

Monthly / Quarterly Interest payment facility

Small amounts make a big deposit.

Individuals, two or more individuals in joint names payable jointly or severally etc., minor to be operated by Parent/guardian, a Hindu Undivided Family or an Institution, a proprietary concern, Partnership firm, a company, Corporation, Trust, Association (subject to conditions) can open the account. Ra.5/Rs.100/Rs.100/Rs.100/Rs.100/-MV Rs.10/No limit. No limit. No limit. Ma Rs.1.00 Lakh (Multiplies of (Multiplies of (Multiplies of No limit. No limit. x. (Multiplies of Rs.100/-) Rs.5/-) Rs.50/-) Rs.100/-) Rs.100/-& for Rs.1000/Rs.50/Penalty for delay 10 paisa for in every payment installment of of Rs.10/-per Installmen month. t

0.5 % of outstanding balance with Min.of Rs.50/- & Max. of Rs.500/-

Deposit from Individuals up to 1 Lac for any period & from Corporates up to 100 Lac for up to 90 days - No Penalty. Rest of the depositors, amount & period - @1% Penalty

No penalty

-------------------------------------------------------Not applicable---------------------------------------------------

Prepared by Rama Rao Chauhan - 21 March 2011 30

ANDHRA BANK STAFF COLLEGE: HYDERABAD

Scheme Plan Special feature Who can open account Min Ma x. Min Ma x. AB Money Time Fixed

() TERM DEPOSITS (Special) AB Double AB Freedom Fixed/ Reinvestment Surplus amount in SB account will automatically transfer to Term Deposit (FD or KTD as per option) in a unit of Rs.1000/-with minimum of 5 units for a period opted. Except special minors, all others who are eligible to open SB Accounts, can open. No deposit receipts issued. However statement will be issued for SB as well as FD/KTD transactions. Rs.5000/No limit. (Multiplies of Rs.5000/-) 15 Days (for both Fixed & Re-investment plan) ONE Year (for both Fixed & Re-investment plan) Tax exemption under Sec. 80C of IT Act AB Tax Saver

Reinvestment

Monthly Income

Double the amount of investment.

Deposit amount

Individuals, two or more individuals in joint names payable jointly or severally etc., minor to be operated by Parent/guardian, a Hindu Undivided Family or an Institution, a proprietary concern, Partnership firm, a company, Corporation, Trust, Association (subject to conditions) can open the account Rs.25000/Rs.1000/No limit. (Multiplies of Rs.1000/-) 15 Months 10 Years No limit. (Multiplies of Rs.1000/-) Applicable period to become double the amount of deposit @ applicable rate of interest

Individual / HUF Income tax assesses

Rs.100/Rs.1.00 Lakh in a year (Multiplies of Rs.100/-) 5 Years. Applicable ROI for the period (quarterly compounded) to be paid on maturity

Deposit Period

Prepared by Rama Rao Chauhan - Updated on 9 March 2011

32

ANDHRA BANK STAFF COLLEGE: HYDERABAD

() TERM DEPOSITS (Special)

Interest

Interest @ applicable rate on deposit for first 3 Applicable rate of interest for Applicable ROI for Applicable rate of interest months will be SB & Term deposit. the period (quarterly for Term deposit. added to Principal (Periodical interest payment will be compounded) to be amount and allowed on quarterly basis) paid on maturity thereafter to be paid on discounted basis. --------------------------------------------------------Additional Interest of 0.5% for senior citizens & 1% for our staff members---------------------------------------------------------------------- Own deposits- 90% & Third Party deposit- 75%---------Allowed with interest at applicable rate for the expired period minus applicable penalty Deposit from Individuals up to 1 Lac for any period & from Corporates up to 100 Lac for up to 90 days No Penalty. Rest of the depositors, amount and period - @1% Penalty 270/51/19 Dt. 143/44/17 Dt.06.08.2008 19.10.2008 No deposit loan. However Lien marking is allowed on units Amount can be withdrawn from Term Deposit in units of Rs.1000/- through SB account. Premature withdrawal of units allowed No deposit Loan

Deposit Loan Premature Withdrawal

Not allowed

Penalty for Prematur e closure. Circular

No penalty

Not applicable

159/44/20 Dt.27.08.2008

431/51/30 Dt.13.03.2008

Prepared by Rama Rao Chauhan - Updated on 9 March 2011

32

,

LOAN POLICY GUIDELINES OBJECTIVE: To improve the credit off-take of the Bank and maximize profits. To ensure that there is a balanced growth of credit. Lopsided growth of credit to any particular sector of economy / segment of borrower is not desirable and needs to be avoided. To ensure that the loan policy of the Bank is competitive and flexible in relation to other Banks so as to attract and bring good Corporate/Non Corporate borrowers into our fold. Continue to maintain thrust to priority sector advances in consonance with Govt. of India / Reserve Bank of India guidelines and To ensure that the quality of credit is sound and the Bank is not exposed to avoidable and unwarranted risks. EXPOSURE NORMS: As per RBI guidelines, Banks maximum exposure to a single borrower. Not more than 15% of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. Banks maximum exposure to NBFCs as per RBI guidelines. Banks exposure to a single NBFC/ NBFC(Asset Finance Company) not to be more than 10% / 15% of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. (Cir 381 ref 26/66/ dt 31.01.2009) As per RBI guidelines, Banks maximum exposure to a Group. Not more than 40% of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. Banks maximum exposure norm to a single borrower for infrastructure Projects. 20% of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. Banks maximum exposure norm to a single NBFC/ NBFC(AFC) for financing infrastructure Projects. Banks exposure to a single NBFC/ NBFC (Asset Finance Company) for financing to infrastructure projects may exceed the exposure norm of 10% / 15% by additional 5% (i.e. upto 15% / 20%) of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. (Cir 381 ref 26/66/ dt 31.01.2009) As per RBI guidelines, Banks maximum exposure to a group for financing Infrastructure projects. Not more than 50 % of Banks Capital Funds i.e. Tier I Capital + Tier II Capital as per Audited Balance Sheet of the previous year. Borrower with substantial exposure: Any borrower enjoying limits of Rs.550 Crore & above is called a borrower with substantial exposure and is also known as a Large Borrower. Banks Substantial Exposure Limit. o The sum of limits sanctioned to Large Borrowers i.e., borrowers with substantial exposure (both individual & group borrowers) should not exceed Rs.16500 Crore. (300% of capital fund as on31.03.2008)

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The extent up to which Individual & Group borrower exposure norms can be exceeded by the Board of the Directors of the Bank : In exceptional circumstances, with the approval of the Board (individual & Group borrowers), additional exposure up to a maximum of further 5% of Capital funds is permitted, subject to the borrower consenting for disclosure in Banks annual report. Our Banks exposure norms for Film Industry. o Exposure to single party shall not exceed Rs.4 Crore. o At any point of time, we shall not extend finance to more than 6 parties. Our Banks maximum exposure limit to Infrastructure Project Finance per Project. o Rs.500 Crore per project Our Banks maximum prudential limit for Individual / Proprietary concern. Rs.20 Crore ( Rs.30 Crore for Group) / Rs.60 Crore by CMD/ED OR 6 Times of Net worth of the concern as per the Latest Audited Balance Sheet, which ever is less Our Banks maximum prudential limit for Partnership concerns. Rs.30 Crore ( Rs.40 Crore for Group) / Rs.60 Crore by CMD/ED OR 6 Times of Net Worth of the concern as per the latest Audited Balanced Sheet, whichever is less Our Banks maximum exposure limit for HUF concerns. o Rs.10 Crore. Our Banks maximum exposure limit for Trusts/Coop Societies / Association of Persons. Rs.20 Crore (Rs.30 Crore for Group) / Rs.60 Crore by CMD/ED OR 6 Times of Net Worth of the concern as per the latest Audited Balance Sheet, whichever is less. Our Banks maximum exposure limit for Private Limited Companies. Rs.80 Crore (Rs.100 Crore for Group) OR 6 Times of Net Worth of the company as per the latest Audited Balance Sheet, whichever is less. Our Banks maximum exposure limit for Closely held Public Limited Companies. o Rs.100 Crore (Rs.120 Crore for Group) Our Banks maximum exposure limit for Widely held Public Limited Companies and all other constitution of borrowers if sanctioned by MC. 15% of Banks Capital Fund (40% of Capital Fund for Group & 50% of Capital Fund in case of Infrastructure Projects under Group.) Administrative clearance required for sanction of credit facilities to Trust & HUF borrowal accounts. Administrative clearance from H.O is required for the first sanction. For subsequent renewals & enhancements it is not required provided there is no change in the composition / activity of HUF / Trust.

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The extent up to which Interest bearing Unsecured Loans promoters, friends and relatives) can be treated as Capital/Net Worth for exposure norms. 50% The extent up to which Non-interest bearing Unsecured (from promoters, friends and relatives) can be treated as Capital/Net Worth for exposure norms. 100%

(from Quasi Loans Quasi

The condition to consider 50% of Interest bearing Unsecured Loans as part of Net Worth. 1. Interest on unsecured loans shall not exceed rate of interest charged by the bank on the loans & advances extended. 2. Payment of interest and repayment of unsecured loans shall be subordinated to the bank borrowings. An undertaking to the above shall be obtained from the borrower and be kept on record. The condition to consider 100% of Non-interest bearing Unsecured Loans as part of Net Worth. i. Repayment of unsecured loans shall be subordinated to the bank borrowings. ii. An undertaking to this effect shall be obtained from the borrowers and be kept on record. The types of facilities for which exposure ceilings will not apply. o Loans & Advances against security of banks own term deposits and LCs / BGs covered by 100% cash margin. o Food Credit. o Rehabilitation of Sick / Weak Industrial units: Existing / additional credit facilities (including funding of interest and irregularities) granted to weak / sick industrial units under rehabilitation packages. o Govt. of India Guaranteed accounts where principal & interest are fully guaranteed. o Bills purchased/negotiated/discounted under LC( where the payment to the beneficiary is not made under reserve.) Our Banks maximum prudential exposure limit for Bank Guarantees. o 3 times of Net Worth of the Bank. Our Banks maximum prudential exposure limit for Letters of Credit. o 2 times of Net Worth of the Bank. Our Banks maximum Prudential exposure limit for Foreign Exchange commitments (Forward contracts etc.,). o Equal to the Net Worth of the Bank. The prudential limit up to which guarantees favouring other Banks, Financial Institutions and other agencies may be issued. o 10% of Banks capital funds i.e., 10% of Tier I capital Only Maximum exposure norm in respect of financing to Construction Company The fund based and non fund based limit to construction company shall not exceed 15 times of the Net Owned funds of the construction company.

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REPAYMENT PERIODS Maximum repayment period that can be allowed for Term Loans in case of Infrastructure Projects A+++, A++ (CRS/CRAS)& A++(CRRM)---- 15 years including gestation period. A+,A&B(CRS/CRAS)A+,A,B++(CRRM)--12years including gestation period Maximum repayment period that can be allowed for RTO Loans A+++,A++(CRS/CRAS)&A++(CRRM) -- 6 years including holiday period. A+, A&B (CRS/CRAS)& A+,A,B++(CRRM) rated--5 years including holiday period Maximum repayment period for Term Loans other than RTO Loans and Infrastructure Projects A+++, A++, A+, A & B(CRS/CRAS)A++,A+A,B++(CRRM) ---- 7 years excluding holiday period. Maximum tenure of Term Loan in respect of C(CRS/CRAS)B+,B(CRRM) rated borrowers---- 5 years excluding holiday period. CREDIT INVESTIGATION What is Credit Investigation? Credit investigation, as a preliminary study gives valuable information about prospective borrower, associate concerns, guarantors, market reports, details of the project and performance of the industry etc. It serves as preliminary information about the prospective borrower, before detailed evaluation is undertaken. What is the cut-off limit for conducting Credit Investigation? All new advances less than Rs 1 cr and all existing advances irrespective of the limit, except Agriculture advances, Government sponsored schemes and weaker section advances up to a limit of Rs.25 lakhs. What is the cut off limit for submission of Due diligence report ? All new advances of Rs 1Cr and above Due diligence report to be submitted. MARGINS AND SECURITIES: Restriction regarding obtention of Agricultural Lands / Rural buildings as collateral security for Bank Guarantees. Value of Agricultural Land and / or Rural Buildings should not exceed 30% of total collateral security requirement in case of new accounts and 50% in case of existing accounts that too in states where there is no ban on acceptance of agricultural land as security for non-agricultural purposes. Eligible bank finance against NSCs / KVPs 75% of the purchase value plus accrued interest of NSCs / KVPs. Stipulation / condition for allowing loans to general public against securities The loans should be extended only where the date of maturity is less than 3 years from the date of finance except where the facility of premature

2011

36

,

cancellation / surrender value is available. Minimum margin for advances against Book Debts 50% ( 30% for SMEs )and sanctioning authority can reduce margin to 25% on book debts of Govt.dept. What are the eligible Book Debts to arrive at Drawing Power Book Debts not older than 90 days & 180 days for MSME and which are not financed by way of purchase / discount of bills. Stipulation while financing second hand machinery for new units The Cost / Capacity of proposed second hand machinery shall not exceed 25% of total Cost/Capacity of machinery of the proposed scheme Stipulated margin on second hand machinery? 50% Security norms for Crop Loans / Agricultural Term Loans up to Rs.50,000/Hypothecation of Crops / Assets to be financed. Security norms for Crop Loans / Agricultural Term Loans above Rs.50,000 and up to Rs,1,00,000. In addition to hypothecation of Crops / Assets, Co-obligation / Third party guarantee is to be obtained. Security norms for Crop Loans / Agricultural Term Loans above Rs.1,00,000 or aggregate commitment per borrower exceeding Rs.1,00,000 ? In addition to hypothecation of Crops / Assets to be financed and Co obligation / Third party guarantee, 100 %Collateral security in the form of mortgage of land / charge creation under state laws are to be obtained . ASSESSMENT METHODS & IMPORANT RATIOS: TURNOVER METHOD :( for Working Capital limits up to & inclusive of Rs.6.00 Crore) A. Accepted Projected Sales Turnover B. 25% of Sales Turnover C. Margin @ 5 % of Sales Turnover D. Actual NWC available as per latest Audited Balance Sheet E. B-C F. B-D G. M.P.B.F = E or F, whichever is less. INVENTORY METHOD :(For Working Capital limits up to & inclusive of Rs.6.00 Crore) A. Total Current Assets B. Current Liabilities (other than Bank Borrowings) C. Working Capital Gap =A-B D. Margin @ 13% of Projected Current Assets E. Actual NWC available as per latest Audited Balance Sheet F. C-D G. C-E

2011

37

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H. M.P.B.F = F or G, whichever is less. INVENTORY METHOD :( For Working Capital limits above Rs.6.00 Crore) A. Total Current Assets B. Current Liabilities (other than Bank Borrowings) C. Working Capital Gap =AB D. Margin @ 25% of Projected Current Assets E. Actual NWC available as per latest Audited Balance Sheet F. C-D G. C-E I. M.P.B.F = F or G, whichever is less. Note:- If actual NWC is less than required margin, the borrower has to bring in the short fall and sanctioning authority has to ensure the same. Maximum Working Capital credit limit up to which Turn Over method can be extended. o Rs.6 Crores. Assessment system under which seasonal industries can be financed. Cash Budget System Basis for accepting future projections in the build up of Current Assets and Other Current Liabilities. The past inventory levels shall be the basis. However the sanctioning authority will have flexibility to accept higher levels provided there is enough justification on a case to case basis. Minimum acceptable Current Ratio in case of working capital credit facility up to Rs.6 Crore when assessed as per Turnover Method or Inventory Method. Minimum of 1.15 Minimum acceptable Current Ratio in case of Working Capital credit limit of above Rs.6 Crore. Minimum of 1.33 Maximum acceptable level of Total Debt- Equity Ratio. Maximum of 6 Formula for calculating Total Debt-Equity Ratio. Total Debt-Equity Ratio = TL + CL Tangible Net Worth Maximum permissible Gearing Ratio while assessing the eligibility for non-funded limits. Maximum of 10 Standard average D S C R specified as applicable for all Term Loans 1.50 to 2.00 Where there is assured source of income for repayment of instalments in Term Loans, the minimum DSCR stipulation is 1.20 Example of facilities, where lower DSCR of 1.20 can be accepted. Rural Godowns Scheme & Rent Receivable.

2011

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Penal interest in case of non-submission of all the required data / information and latest audited /provisional statements for yearly review / renewal of limits: For the first 3 months of the overdue Penal interest of period 1% Beyond 3 months of overdue period till Penal interest of submission of all the required data / 2% information GUIDELINES ON BALANCE SHEET ITEMS: Term Loan installments falling due for payment in next 12 months for the purpose of calculation of Current Ratio and MPBF. Term Liability in both the cases. Inter-corporate deposits are to be treated as Non-Current Assets. When it is not possible to bifurcate term liability component of Mobilisation Advance in case of construction company account, to treat such mobilisation Advance. 50% as Term Liability and 50% as Current Liability. STATEMENTS FOR MONITORING: Time stipulation for the obtention of Stock Statements. As on the last Friday of the month before 10th of succeeding month. Nature & periodicity of submission of stock statements Cash credit up to Rs 1 lakhs-abridged monthly More than Rs 1L and up to Rs 5L- Abridged monthly and detailed quarterly More than Rs5L(including book debts limit)-Detailed monthly

Penalty for the delayed / non submission of stock Statements. Penal Interest of 1% for the period of default on working capital outstanding. Minimum working capital limit to accept Book Debts as security. Cash Credit Limits of above Rs.5 Lakh. Periodicity for the obtention of Book Debts statements. Every month certified by the borrower and every quarter duly certified by a Chartered Accountant. Minimum working capital credit limit for the obtention of M S O D. Rs.100 Lakh and above from the Banking system. Time stipulation for the submission of MSOD: MSOD is to be submitted on or before 15th of next month. Penal provision for non-submission of MSOD. Penal interest of 1% to be charged the period of default. Various QIS statements to be obtained: QUARTERLY INFORMATION SYSTEM - QIS II and QUARTERLY INFORMATION SYSTEM - QIS III

2011

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What is QIS II? It is a Quarterly Statement showing the performance during the quarter. What is QIS III? It is an Half yearly Operating and Funds-Flow statement. Cut-off limits for obtention of QIS form II. I.. Funded working capital limits of above Rs.6.00 crore ( A & above rated) II.C( B & B+ for CRRM) rated accounts, with fund based working capital limits of Rs.1.00 crore and above III. B(CRS/CRAS)& B++(CRRM) rated accounts, with fund based working capital limits of Rs.2.00 crore and above Cut-off limits for obtention of QIS form III. I Funded working capital limits of Rs.3.00 cr and above (' A ' and above rated) II. C(B & B+ under CRRM) rated accounts, where fund based working capital limits of Rs.1.00 crore and above III. B(B++ under CRRM) rated accounts, where fund based working capital limits of Rs.2.00 crore and above Periodicity for obtention of QIS II & III. QIS II Every Quarter QIS III Every Half Year (Mar/Sept). Time stipulation for the submission of QIS II. Within six weeks from the close of the quarter. Time stipulation for the submission of QIS III. Within two months from the close of the half year. Penalty for non-submission of QIS II / QIS III. Penal interest @ 1% p.a for one full quarter on the working capital outstanding. Maximum over all penal interest chargeable in an account for any reason. 2% UNIT INSPECTIONS & AUDITS : Periodicity of Unit Inspection in case of credit facilities other than OCC irrespective of limits. Once in a quarter by an Officer; Once in half year by the Manager. Periodicity of Unit Inspection in case of Cash Credit/Overdraft limits below Rs.50 Lakh. Bi-monthly by the branch . Periodicity of Unit Inspection in case of Cash Credit limits of Rs.50 Lakh & above. Once in a month by Officer Once in a Quarter by Branch Manager Once in a month by Officer Short Inspection o Advances of above Rs3 crores(FB+NFB) by concurrent auditor -Fresh adv