Vasudev- Model Paper to -2010 With Key

G.VASUDEVA PRASAD, CHIEF MANAGER – TRAINING , SBLC, MASULIPATNAM 1

TRAINEE OFFICERS – EXAMINATION PATTERN

Exam Pattern Particulars Duration of Paper

(minutes) No.Of Questions Marks

Paper-I (Objective) Section-I General Knowledge (Awareness about Banking Environment )

75

25

Section- II General Banking

90

40 20

Paper II ( Descriptive) Section-A General Banking ( For & Against)

10

20

Section –B General Banking (Rationale)

10

20

Section-C General Banking Practical Problem

90

5 out of 8

15

Total Duration 3 hours 100

FINAL SELECTION PROCESS

ALLOCATION OF MARKS A Written Test ( normalized to 60) 60 marks

B Performance Appraisal 10 marks

C Additional Qualification viz., JAIIB/CAIIB, MBA, Dip in Banking, Finance, HR, Business Management, Marketing, Treasury, Intermediate CA/ICWA

10 marks

D Personal Interview 20 marks Total Marks 100 marks

QUALIFYING MARKS General Candidates SC/ST Written Test 65% 60% Interview 40% ( 8 marks) 35% ( 7 marks) Zone Of Selection for Interview – ZOS

In the ratio of 2 candidates for every vacancy in the descending order of merit

Appeal to the Aspirants : Please answer the model paper under real time scenario following the time norms. Please mail me for key after you answer for self – evaluation ( [email protected]). All the best.

STATE BANK LEARNING CENTRE, MASULIPATNAM

THE WINGS – TO SERIES

PREPARED BY - G VASUDEVA PRASAD


Please choose correct answer for the following questions from the given alternatives

PAPER – I :: DURATION – 90 MINUTES

GENERAL KNOWLEDGE ( Q.NO:1 TO Q.NO:75) Each question carries 1/3 marks

Regulators and central Bankers, meeting in Switzerland to discuss a set of global banking rules. The group of policy makers known as Basel Committee. How many countries are members of this policy makers group a) 24 b) 25

1.

c) 27 d) 29

[ ]

The Indian rupee will have its own symbol, a mix of the Devanagari ‘Ra’ and Roman ‘R’ to become the fifth currency in the world to have a distinct identity. Who has designed this new symbol ` a) Dr.Manmohan Singh b) D.Uday Kumar

2.

c) Dr.D.Subba Rao d) D. Ram Kumar

[ ]

Oil Price deregulation implemented on June 25,2010 based on the recommendation of ------- committee a) MM Parikh b) Kirit Parikh

3.

c) Parik Mehta d) None of the above

[ ]

A High level task force committee on MSMEs advised the banks to achieve --- % year on year growth in credit to micro & small enterprises a) 20 b) 40

4.

c) 55 d) 60

[ ]

The deposit insurance scheme-1962 to protect the interest of depositors was introduced with an amount of ` a) 1 lac per depositor b) 100

5.

c) 1000 d) 1500

[ ]

Sikkim Bank has been taken over by a) Federal Bank Ltd b) Bank of Baroda

6.

c) Punjab National Bank d) Union Bank of India

[ ]

Who among the following RBI Dy.Governors is also a Director in SBI Board a) Mrs.Usha Thorat b) Mr.Subir Gokarn

7.

c) Mrs.Shyama Gopinath d) Dr.K.C.Chakrabarty

[ ]

Who reported that the budgetary statistics based on which Greece joined the EU had been massively under reported by the Greek Government which lead to Greece Economic Crisis a) IMF b) World Bank

8.

c) Eurostat d) OECD

[ ]


The person who went to his bank too late to withdraw money invented ATM has died at the age 84 recently. Who is that India-born scot personality? a) John Shepherd Barron b) John Abraham

9.

c) John F Marshal d) John Kenedy

[ ]

3G technology is used to enhance mobile phone standards and enables simultaneous transfer both voice and non-voice data. The highlight of 3G is video telephony. The centre plans to raise ` ---- crore through auction of third generation mobile phone spectrum a) 40,000 b) 45,000

10.

c) 57,000 d) 67,000

[ ]

The nick name of Canadian Dollar coin a) Cable b) Loonie

11.

c) Toss d) Bill

[ ]

Government to contribute `----- per annum to each account holder under the new pension scheme a) 10 b) 100

12.

c) 500 d) 1000

[ ]

The fully air conditioned 5-coaches exhibition train launched on the eve of 150th Birth anniversary of Rabindranath Thakur to experience the rich legacy of his creative work & philosophy in moving museum on wheels is named as a) Sanskriti Express b) Jibon smriti Express

13.

c) Gitanjali Express d) Mukthodhara Express

[ ]

Name the film selected as an Indian official entry to Oscar Awards this year a) Angadi Theru b) Peepli Live

14.

c) Three Idiots d) Paa

[ ]

The word ‘Money’ has been derived from ‘Moneta’. Moneta belongs to which language a) Greek b) Latin

15.

c) Spanish d) French

[ ]

Who has been conferred with the prestigious Gyanpeet award for the year 2007 a) Ahlakkhan Shaharyar b) Sitakanth Mahapatra

16.

c) ONV Kuroop d) Yarlagadda Lakshmi Prasad

[ ]

The following sector has negative impact due to Union Budget 2010-11 a) Infrastructure b) Real Estate

17.

c) FMCG d) Information Technology

[ ]


G-20 Summit was held on 28.06.2010 at ------ a) Alaska b) Toronto

18.

c) New York d) New Delhi

[ ]

As per Global peace Index 2010, the following country has been rated most favored a) India b) Iceland

19.

c) Japan d) Newzeland

[ ]

An elephant named ------ is the official mascot of the 2010 Cricket World cup a) Bumpy b) Scurry

20.

c) Stumpy d) Hempty

[ ]

The government had initiated interest subvention scheme of 1 per cent interest subvention in respect of individual housing loans up to `10 lakh & with the cost of unit not being over ` ------ lacs as a measure to generate additional demand for credit and improve affordability of housing to eligible borrowers in middle and lower-income groups a) 15 b) 20

21.

c) 25 d) 50

[ ]

Towards financial inclusion drive, GOI has asked the Public sector banks to provide basic banking services to all unbanked villages with a population of over 2000 by a) March’2011 b) March’2012

22.

c) December’2010 d) December,2011

[ ]

The relationship between tax rates and the absolute revenue these rates generates for the government is represented by a) Sigma Curve b) Dorvin curve

23.

c) Laffer Curve d) Diminshing curve

[ ]

Name the new pension fund scheme launched for unorganized sector a) Swavalamban b) Swayamlamban

24.

c) Swayamkrushi d) None of the above

[ ]

Overnight Index Swap (OIS) is a ------- instrument a) Options b) Contracts

25.

c) Futures d) Derivative

[ ]

Foreign currency which has a tendency of quick migration is called a) Scarce currency b) Soft currency

26.

c) Cold currency d) Hot currency

[ ]

Which of the following is a better measurement of Economic Development a) GDP b) Disposable Income

27.

c) NNP d) Per Capita Income

[ ]


If the commodities manufactured in Surat are sold in Mumbai or Delhi then it is a) Territorial trade b) Internal trade

28.

c) International trade d) Free Trade

[ ]

Bank Rate refers to the interest rate at which a) Commercial banks receive

deposits from the public b) Central bank gives loans to

Commercial banks

29.

c) Government loans are floated d) Commercial banks grant loans to their customers

[ ]

All the goods which are scare and limited in supply are called a) Luxury goods b) Expensive goods

30.

c) Capital goods d) Economic goods

[ ]

In the budget figures of the Government of India the difference between total expenditure and total receipt is called a) Fiscal deficit b) Budget deficit

31.

c) Revenue deficit d) Current deficit

[ ]

"Slash and Burn agriculture" is the name given to a) method of potato cultivation b) process of deforestation

32.

c) mixed farming d) shifting cultivation

[ ]

Repo, Reverse Repo and Bank Rate are ----, ---- & ---- % respectively a) 6,5,6 b) 5.75,4.5,6

33.

c) 4.5,5.75,6 d) 5,6,6

[ ]

How many Indian companies find place in the Asia’s Best under one billion -2010 list a) 71 b) 82

34.

c) 20 d) 39

[ ]

On 25th Aug’10 RBI announced that a new district, Yadgir in Karanataka and the lead bank responsibility designated to ---- Bank a) SBM b) Syndicate Bank

35.

c) SBI d) None of the above

[ ]

Barmer is declared as Town of Excellence in respect of -------- a) Textiles b) Leather Goods

36.

c) Handicrafts d) Diamonds

[ ]

Foreign Trade policy 2009-2014 does not pronounce the following a) Zero duty EPCG Scheme

extended by one year b) DEPB scheme extended upto

30.06.2011

37.

c) Additional benefit of 2% bonus for 135 products under focus products scheme

d) All the above

[ ]


Who releases the World investment report a) UNICEF b) UNESCO

38.

c) UNCTAD d) UNO

[ ]

Which country stood next to US in respect of Global FDI inflows for the year 2009 a) Hongkong b) France

39.

c) China d) UK

[ ]

Rapid economic growth at home, high commodity prices, and FDI liberalization in host countries have been feeding a boom in outward investment from BRIC countries. BRIC countries are also called as a) Big Seven b) Big Four

40.

c) Big Three d) Big Five

[ ]

CCIs permission is not required if the turn over of the smaller company is less than ` --- crores or its net worth is under ` --- crores a) 750,250 b) 1000,750

41.

c) 750,500 d) 500,250

[ ]

According to a 2010 Asia-Pacific Wealth Report released by Merrill Lynch Global Wealth Management and Capgemini, the total number of HNIs in India at the end of 2009 was ----- a) 1,56,700 b) 1,36,700

42.

c) 1,46,700 d) 1,26,700

[ ]

Public sector banks (PSBs) will introduce a common banking entrance test was recommended by ---- committee a) Prof. Nouriel Roubini b) A.K. Khandelwal

43.

c) Gopalan d) Mukherjee

[ ]

The third most powerful nation as per “Global Governance 2025” report a) Brazil b) China

44.

c) India d) Russia

[ ]

One among the following are not the promoters of United Stock Exchange a) BSE b) India Potash

45.

c) MMTC d) SBI

[ ]

The prepaid debit card by India Post would have a minimum value of `1,000 and a maximum of ` a) 5,000 b) 10,000

46.

c) 25,000 d) None of the above

[ ]

An MVNO would offer wireless services under its own brand name by taking on lease spectrum and infrastructure from a new telecom operator. Who is the leading MVNO operator in the world a) Virgin Mobile b) ESPN

47.

c) Disney d) Airtel

[ ]


The first licence by RBI to use the `semi-closed wallet for starting financial services on mobile phones issued to a) Idea b) Aircel

48.

c) Bharti AirTel d) BSNL

[ ]

After more than a year, the Forward Market Commission (FMC) will allow sugar futures to start from ------ in view of expected bumper production of the sweetener in 2011-12 a) November’2010 b) October’2010

49.

c) December’2010 d) March’2011

[ ]

The following have not shifted to Base Rate regime a) SBI b) PNB

50.

c) ICICI d) HFC

[ ]

As on June 30, the capital adequacy ratio of the banking system stood at --- % a) 13.4 b) 12.28

51.

c) 9.30 d) 8.12

[ ]

The committee, headed by former Finance Minister Shri Yashwant Sinha, has suggested that companies with a net worth of `500 cr or more, or those that have an annual turnover of at least `1,000 cr, or companies with a net profit of `25 cr or more to set aside --- % of their average net profits during the preceding three years towards Corporate Social responsibility spending a) 1 b) 2

52.

c) 3 d) 5

[ ]

Maruti Suzuki India is having its plant at a) New Delhi b) Manesar

53.

c) Chennai d) None of the above

[ ]

The Number of SEZs started operations are ----- a) 577 b) 328

54.

c) 114 d) 416

[ ]

Who among the following are excluded from class-action suits under New Companies bill,2009 a) Members b) Share holders

55.

c) Creditors d) Banks

[ ]

According to a report by Fitch Ratings, titled “----- , Indian lenders are able to recover 30-50% of the loan amount taking recourse to recovery-driven and business re-organization forums a) SARFAESI, The New recovery

Mantra b) DRT- A route for recovery

56.

c) Recovery Made easy d) India’s Insolvency Regime

[ ]


After a deep synchronized recession, the global recovery is likely to be multispeed, with much of the advanced world displaying a sluggish below trend anemic pace of growth and the emerging world displaying closer to a V-shaped recovery. So 2010 would be a ---------- a) Year of Recovery b) Deflationary spiral

57.

c) Year of Anemic pace d) Year of Two Halves

[ ]

The earliest date for making application by banks to RBI to address the Credit risk under Internal Ratings Based Approach is ------ a) April 1,2010 b) March 31,2011

58.

c) March 31,2014 d) April 1,2012

[ ]

Oil seeds production during 2009-10 is ---- MTs a) 23.9 b) 24.9

59.

c) 14.6 d) 33.8

[ ]

The new Wholesale Price Index series has ---- as the base year instead of 1993-94 a) 1999-2000 b) 2003-2004

60.

c) 2004-2005 d) 2008-2009

[ ]

The Direct Taxes Code (DTC) 2010 will come into effect from financial year -- a) 2010-2011 b) 2011-2012

61.

c) 2012-2013 d) 2013-2014

[ ]

Customs duty on Gold as per budget 2010-2011 per KG is ` a) 10,000 b) 20,000

62.

c) 30,000 d) 50,000

[ ]

Limit for turnover which accounts need to be audited in respect of business is ` a) 40 lacs b) 15 lacs

63.

c) 45 lacs d) 60 lacs

[ ]

Unit cost under Indira Awas Yojana in hilly areas is ` a) 25,000 b) 45,000

64.

c) 48,500 d) 1,00,000

[ ]

Which bank is merged with ICICI Bank a) Bank of Rajasthan b) Bank of Maharastra

65.

c) Kotak Mahindra d) None of the above

[ ]

Who maintain DICGC a) NABARD b) RBI

66.

c) SIDBI d) SBI

[ ]


Biometric-based data including fingerprints and an iris scan is being used for the first time in the Project for creation of identity is called a) Uphaar b) Adhar

67.

c) Niradhar d) Freedom

[ ]

Under Money transfer Service scheme the remitters & beneficiaries are ---- & --- a) Companies & Individuals b) Individuals & Individuals

68.

c) Any body to any body d) All the above

[ ]

Which of the following public sector banks reported highest fall in net profit for the period ending March’2010 a) Indian Bank b) Bank of India

69.

c) Syndicate Bank d) State Bank of India

[ ]

Which country has the largest gold holdings in the world a) India b) UK

70.

c) China d) USA

[ ]

Which is the first Indian company to be listed in NASDAQ a) Reliance b) TCS

71.

c) HCL d) Infosys

[ ]

Which of the following is not a social development scheme a) Indira Awas Yojana b) Mid Day Meal

72.

c) Bharat Nirman Yojana d) Sarva Shiksha Abhiyan

[ ]

The logo of Bank of Baroda is Known as a) Sun Bank of Baroda b) Baroda Sun

73.

c) Bank of Baroda Rays d) Sunlight of Bank of Baroda

[ ]

Currency swap is an instrument to manage a) Currency risk b) Interest rate risk

74.

c) Currency & Interest Rate risk d) Cash flow in different countries

[ ]

RBI’s open market operation transactions are carried out with a view to regulate a) Liquidity in the economy b) Inflation

75.

c) Price of essential commodities d) All of the above

[ ]


GENERAL BANKING ( Q.NO:76 TO Q.NO:115) Each question carries ½ marks

Premature payment in respect of Annuity deposit is permitted a) At the request of the depositor b) In case of death of depositor

76.

c) On attaining majority by a minor

d) None of the above

[ ]

For classifying a SB account as Inoperative the following transactions should not be ignored a) Service Charges Levied b) Interest Credited

77.

c) Transactions induced at the instance of customers

d) All the above

[ ]

The additional rate of interest for Senior Citizens under Capital Gains a) 1% b) 0.75%

78.

c) 0.25% d) No additional interest

[ ]

Name the product developed using the generic fee collection functionality a) Power Premium b) Power Privilege

79.

c) Power Advantage d) Power Jyothi

[ ]

Payment of principle and/or interest either fully or partly exceeding `.---- /- other than by transfer to the depositor’s account requires discharge over revenue stamp a) 500 b) 1000

80.

c) 2000 d) 5000

[ ]

The penalty for delayed payment of installments in RD with a tenure of 66 months a) `.1.50 for every `.100/- per

month b) `.2.00 for every `.100/- per

month

81.

c) A service charge of `.10/- should be levied apart from(a)

d) A service charge of `.10/- should be levied apart from(b)

[ ]

What is the maximum amount of loan amount under Xpress credit scheme a) ` 5 lacs b) ` 10 lacs

82.

c) ` 15 lacs d) ` 25 lacs

[ ]

Risk categorization under KYC/AML of all accounts is reviewed at least once in ----- a) 3 months b) 6 months

83.

c) 9 months d) 12 months

[ ]

Extension of moratorium period has been extended to ---- months in genuine cases, after satisfying that the student did not get any employment after completing studies due to global meltdown a) 12 months b) 18 months

84.


[ ]


The minimum security deposit for Individual Business Correspondent is ` a) on average turnover of 2 days

with minimum 10 lacs b) 0.50 lacs

85.

c) on average turnover of 2 days with minimum Rs. 0.50 lacs

d) None of the above

[ ]

Hurdle rate under CRA for new connections is a) SB-9 b) SB-10

86.

c) SB-5 d) SB-6

[ ]

The minimum limit amount prescribed under SBI Home Loan PAL is ` a) 30 lacs b) 50 lacs

87.

c) 25 lacs d) 10 lacs

[ ]

The maximum amount of gratuity as per Payment of Gratuity Act,1972 is ` a) 10 Lacs b) 3.50 Lacs

88.

c) 7 Lacs d) None of the above

[ ]

Operation Sampark relates to a) SBI Life Cross Selling b) SBIMF Cross Selling

89.

c) Sale of Gold coins d) Enhance Contactability

[ ]

The interest rate of FRTD would be linked to our Bank’s Base Rate and would be reset every time the Base Rate changes. Currently FRTD would be offered in only three tenors. What is the rate of interest on 5 years tenor a) 50 points below base rate b) 25 points below base rate

90.

c) Base rate d) 25 points above base rate

[ ]

As per CTS-2010 standard "No changes/ corrections should be carried out on the cheques” and fresh cheque forms should be used by customers. Identify the correction permitted. a) Payee’s Name b) Courtesy Amount

91.

c) Legal Amount d) None of the above

[ ]

No Margin/security is required in respect of agricultural loans upto `.---- in respect of tenant farmers, share croppers and oral lessees a) 25,000 b) 50,000

92.

c) 1,00,000 d) 3,00,000

[ ]

Under the Rent Plus scheme, the following lessee will not be eligible a) MNC b) Large & Medium Sized

Corporates

93.

c) Group Company d) Bank

[ ]

What is the size of `20 note a) 157x73 mm b) 167x73 mm

94.

c) 137x63 mm d) 147x63 mm

[ ]


While issuing Viswa Yatra Foreign Travel card , to cover the cost of operations of FTC and improve profitability, it has been further decided with the approval of appropriate authority to apply ---- rate a) TT selling b) TT Buying

95.

c) Bill selling d) Bill Buying

[ ]

The farmer has to own a minimum of ---- animals to be eligible for finance under Bio-Gas Plants Family type scheme a) 2 b) 4

96.

c) 6 d) No stipulation

[ ]

What is the remuneration payable to a Home Loan Counseller a) Max `10,000/- per proposal b) Max `10,000/- per month

97.

c) Max `25,000/- per proposal d) Max `25,000/- per month

[ ]

The tenure of Term of Deposit in respect of Girl child is a) 10 years b) 18 years

98.

c) 18 years from the date of birth d) Till marriage

[ ]

Name the product based on Application Supported by Blocked Amount a) e-choupal b) e-credit

99.

c) e-invest d) e-transfer

[ ]

Streamlined Payout Procedure STP in WU Money transfer applied to ___ USD or equivalent a) Less than 1000 USD b) Equal or Less than 1000 USD

100.

c) No maximum Limit d) None of the above

[ ]

The Maximum tenure of Time Deposit is 120 months except for Girl Child Deposit Scheme. The stipulation of cap is put by a) RBI b) GOI

101.

c) SBI d) IBA

[ ]

QAB in respect of Power Premium & Power Lite accounts under SME Power series is ` -- & ` -- a) 5 Lacs & 4 Lacs b) 4 Lacs & 3 Lacs

102.

c) 3 Lacs & 2 Lacs d) 4 Lacs & 0.40 Lacs

[ ]

The period of realization and repatriation to India of the amount representing the full export value of goods or software exported is ---- months a) 3 months b) 12 months

103.


[ ]

Base rate is the composition of a) Cost of Deposits/Funds b) Negative Carry over SLR/CRR

104.

c) Unallocable Overhead Cost d) All the above

[ ]


Under RTI act , requisite fees of `10/- collected by the branches will be credited to a) P& T charges Recovered

account b) Commission Account

105.

c) Exchange Account d) Charges Account

[ ]

Under SBI Tiny Card remittance services the facility of remittances was made available for a) Tiny Card account to Tiny Card

Account b) Tiny Card account to CBS

Account

106.

c) CBS Account to Tiny Card Account

d) All the above

[ ]

In case of crop loans below `1,00,000/- financing can be made up to --------- for the crop(s) raised by the applicant a) Full extent of Cost of

cultivation b) SOF of DLTC

107.

c) SOF of Bank d) None of the above

[ ]

Annual Income criteria for an Individual to be classified as Affluent category is ` --- Lacs a) >2.4 -10 b) >10 - 50

108.

c) >50 - 75 d) >75- 100

[ ]

Risk weight on Home loan for loan amount above `30 Lacs with LTV ratio upto75% is --- % a) 50 b) 75

109.

c) 90 d) 100

[ ]

As per the provisions of section 108 of the Indian Evidence Act, presumption of death can be raised only after a lapse of ----- years from the date of his /her being reported missing a) one b) three

110.

c) five d) seven

[ ]

While opening an account, the time taken by is 21 minutes. The compensation payable by the bank is ` a) Nil b) 100

111.

c) 250 d) 500

[ ]

Savings Bank Account cannot be opened in respect of a) KVIC b) Municipal Corporation

112.

c) DWACRA d) PACS

[ ]

SBI has opened Kohinoor Banjara Premium Banking Centre at ------ a) Mumbai b) Hyderabad

113.

c) Baroda d) Kohinoor

[ ]


Gold Banking software has been introduced in all dealing branches for efficient management of Gold Banking business and cover operations names as a) Kubera b) Dream Gold

114.

c) Gold Grid d) Metagrid

[ ]

Which of the performance indicator of SBI improved over the last year as on 31.03.2010 a) Profit per Employee b) Return on Assets

115.

c) Return on equity d) Earnings per share

[ ]


KEY

Sl. Key Sl. Key Sl. Key Sl. Key Sl. Key

1 c 26 d 51 a 76 b 101 d

2 b 27 d 52 b 77 c 102 d

3 b 28 b 53 b 78 d 103 b

4 a 29 b 54 c 79 d 104 d

5 d 30 d 55 d 80 d 105 a

6 d 31 a 56 d 81 c 106 d

7 c 32 a 57 d 82 c 107 a

8 c 33 a 58 d 83 b 108 b

9 a 34 d 59 a 84 c 109 b

10 d 35 c 60 c 85 c 110 d

11 b 36 c 61 c 86 b 111 c

12 d 37 d 62 c 87 a 112 b

13 a 38 c 63 d 88 b 113 b

14 b 39 c 64 c 89 d 114 d

15 b 40 b 65 a 90 c 115 d

16 c 41 a 66 b 91 d

17 d 42 d 67 b 92 c

EVALUATION

18 b 43 b 68 b 93 c SECTION-I

19 d 44 c 69 b 94 d NO OF CORRECT ANSWERS :

20 c 45 d 70 d 95 c MARKS :

21 b 46 d 71 d 96 b SECTION-II

22 b 47 a 72 c 97 c NO OF CORRECT ANSWERS :

23 c 48 c 73 b 98 c

24 a 49 b 74 d 99 C MARKS:

25 d 50 d 75 d 100 b Total Marks :


PAPER –II

Duration : 90 minutes

SECTION- A :: GENERAL BANKING – FOR & AGAINST

Please answer all the questions. Each question carries 2 marks

1. Bankers say no to RBI on savings rate deregulation. For : Banks benefit from low cost Savings Deposits Making Savings interest rate market driven create instability When there is a squeeze on liquidity, the savings interest rates could rise to

the level of fixed deposit rates, as savings bank interest rate acts as an anchor for other rates

Savings deposits are seen as a bank’s core deposits and help in asset-liability management

Against : To free the savings deposit rate to smoothen monetary policy transmission,

which is hampered by the current fixed-rate regime. Deregulation can help bring more people into the formal banking system and

acts as a tool for financial inclusion. 2.Cultivation of Bt.Brinjal & Bt.Cotton should be encouraged in India For: Introduction of technology in agriculture is required for food security as also

for nutrition security Technology infusion is one of the options to reduce crop losses from pests With land constraints and water shortage beginning to be felt, there is also

the dire need to expand agricultural production by raising crop yields from the current low levels and by reducing crop losses caused by pest and disease attacks

Against : After feeding Bt brinjals to animals the ill-effects are noticed A study from Philippines showed that people living next to Bt corn crop fields

had developed many mysterious symptoms, especially during pollination time Farmers from various parts of the country are reporting a decline in their soil

productivity after growing Bt cotton


3.Nuclear Energy is the need of the hour For : The earth has limited supplies of coal and oil. Nuclear power plants could still

produce electricity after coal and oil become scarce. Nuclear power plants need less fuel than ones which burn fossil fuels. One

ton of uranium produces more energy than is produced by several million tons of coal or several million barrels of oil.

Coal and oil burning plants pollute the air. Well-operated nuclear power plants do not release contaminants into the environment

Against : Nuclear explosions produce radiation. The nuclear radiation harms the cells of

the body which can make people sick or even kill them. Illness can strike people years after their exposure to nuclear radiation

One possible type of reactor disaster is known as a meltdown. In such an

accident, the fission reaction goes out of control leading to a nuclear explosion and the emission of great amounts of radiation

Nuclear reactors also have waste disposal problems. Reactors produce

nuclear waste products which emit dangerous radiation. Because they could kill people who touch them, they cannot be thrown away like ordinary garbage. Currently, many nuclear wastes are stored in special cooling pools at the nuclear reactors

Due to these trade bans and lack of indigenous uranium, India has uniquely

been developing a nuclear fuel cycle to exploit its reserves of thorium 4. Nutrient based fertilizer subsidy policy made effective For : Better targeting of subsidies and ensure an improved fertilizer mix that would

stem the growing erosion of soil nutrients Under NBS, a wide variety of fertilizers customized to a farmer’s specific

needs will be available The new regime is expected to map the actual demand of fertilizers in the

country and promote realistic pricing of fertilizer products in the international market

The policy would encourage the use of secondary fertilizers and micro-nutrients such as sulphur and zinc that are required to make soils in various regions more balanced and conducive for enhancing Productivity

The Government hopes the NBS scheme will see fertilizer firms become more competitive as well and offer more economic rates as subsidy is capped

The new fertiliser policy is expected to help attract investment. International companies will now respond positively to this development


Against : The proposed NBS scheme could result in an increase in farm-gate prices of

fertilizers. Under NBS, subsidy is given directly to farmers. It may increase malpractices

and bureaucracy. Identification of farmers to give subsidy directly is a difficult task because

most of the farmers in India are tenants NBS would lead to increased fertilizer prices and hurt small and marginal

farmers. Currently, the Government subsidizes some fertilizers, but not nutrients.

NBS implementation during a sensitive period of high food inflation is considered inappropriate.

NBS benefits inefficient producers more than farmers and contributes to soil degradation by encouraging the use of urea in place of a balanced mix

5. Floating Rate Term Deposit (FRTD) with Interest Rate linked to the Bank’s Base Rate introduced For : To hedge retail investors against interest rate risk Investing in floating-rate

products appears to be the only alternative to lower their asset-liability mismatch

Floating Rate Term Deposit will allow the investor to take advantage of any interest rate changes even in the short term, as rates are reset periodically and based on Economic conditions

Against : General public, who are uninformed may not take advantage of the product Senior Citizens, if invested in the product may face adversities in their fixed

monthly income Financial Illiteracy may lead to wrong investment decisions

6. Penalties to be imposed on customers visiting the branches for those transactions which can be handled by themselves through alternate channels For : Acts as disincentive and promotes penetration of Alternate Channels Foot fall in branches reduces drastically leading to more focused attention on

customers visiting the branch which leads to customer delight Facilitates reduction in cost of transaction which may lead to reduction in

service charges as a consequential benefit to customers Reduction of costs will lead to better profitability & reduced foot fall allows

the staff to concentrate on operational risk focused areas Against : Due to the very high levels of cilliteracy and non-availability of technological

infrastructure ( Internet & fit mobiles) among customers , the idea may not be practicable


Customers may fly away from the Bank as they may not be willing to pay penalties by visiting the branch as they may not be in a position to conclude the transaction at Alternate channels which leads to fall in Business

Migration of customers to Alternate channels may strain the relationship management with customers

Senior Citizens will be effected adversely and various customer forums will raise serious objections

7. Statistics show that in many branches VVRs are not checked. Hence, VVR checking to be dispensed For : VVR exercise is a post-mortem and does not prevent frauds Checking of VVRs consumes lot of productive time of employees which

otherwise can be utilized on focused areas In the olden days of manual accounting system, writing, checking of day

books is a support tool for compiling final accounts of the branch. As this aspect is taken care by the CBS/Finance1, VVR checking may be dispensed

Against : VVRs play major role in detection of fraudulent transactions and facilitates

preventive vigilance and avoids recurrence of fraudulent transactions in future

VVR checking leads to accounting Excellency VVR checking leads to data purity in the system In the net worked environment, VVR checking leads to better monitoring of

transactions and reduces the operational risk 8.All RBOs should be shifted to their area of operation and Administrative offices should be vacated & AGM(Admin) would be located in the GMs ( Network) office in LHO For : To make role linkages more effective and ensure complete delayering of the

additional tier to achieve faster disposal of work Decision making will be faster due to better appreciation of ground realties Supervision & control over branches will be more effective and meaningful The overall quality of work will improve coupled with quick response to

querries and quick resolution of conflicts Administrative offices have continued in the premises of the erstwhile zonal

officers, often rented at high cost. De-hiring of rented premises will save upon cost

Alternate usage of buildings owned by the bank will lead to effective usage of own premises

Intervention of Associations/unions located at AU upon the various functionaries will be drastically reduced leading to better IR relations and smooth functioning


Against : Due to proximity to the area, customers & staff may have a tendency to visit

the on locale RBO, disturbing the smooth functioning of RBO Local pressures may affect decision making In the absence of modular structure & lack of proximity to immediate

controller, quality may suffer along with cropping up of indiscipline Associations/ unions may rise objections as it is an import subject matter of

restructuring which is reducing their proximity to the regional manager in resolving their issues

9.Oil Price deregulation is a welcome measure For : Improves margins for oil companies and make them competitive as under

recoveries burden will be reduced Private Oil Companies will look forward to a level playing field Reduction in Budgetary deficit due to reduction in subsidies and Budget

allocations towards the desired sectors can be made by the government Oil companies will determine the price based on international petroleum

market and improve their efficiencies leading to competition among the various oil companies

Government approach towards disinvest in IOC Better quality of oil & variety made available

Against : Full deregulation goes against the aam-admi in the wake of rising prices in

international market Cooking fuel does not form major chunk of subsidy and shall not lead to

material reduction in the overall subsidy burden of the sector In the short term inflation increases but will be off set in the long run due to

demand and supply dynamics 10. Bank recruited officers (Management Executives) in MMGS-II, with chances of swift promotion to Scale-III under a unique experiment For : Build a team of future leaders To meet the future requirements at Top Management in the years to Come as

Long term human resource planning To attract talented people and provide opportunities to grow and contribute

towards the growth of organization Will bring totally fresh perspective to business

Against : MEs joining directly from the B-Schools with qualifications do not posses

experience which may impact the quality of decisions and may not exhibit maturity


MEs acquire the skills and leave the organization by adding brand value to their CV to wander towards other green pastures- Attrition rate will be more

Due to attrition the cost of expenditure towards their training will go waste along with the loss of reaping benefits from the groomed MEs

Conflicts may arise due to cultural gaps between the existing generation and the Gen-Y culture.

MEs may be exhibit low levels of psychological contact and low levels of loyalty towards SBI

SECTION- B :: GENERAL BANKING - RATONALES

Please answer all the questions. Each question carries 2 marks

1. Mercury-Fx has been introduced

Solution for real-time Treasury-Branch interaction and conclusion of Forex Deals

Faster & easier reporting of forex transactions directly Access to dealing room online to obtain forex rates Leveraging our market share through better delivery to the customers, better

communication between the Branches and the Treasury and better MIS on customers

2. Base Rate has been introduced by RBI

Remove distortion in interest rates as part of financial sector reforms Transparency in pricing of Loans Better Assessment of transmission of monetary policy To promote healthy competition in the banking System

3. Good bye Basel II, hello Basel III To insulate banks from adverse shocks by increasing the amount of capital (

own funds) they hold on their books compared to deposits & other borrowings An improvement in the quantity and quality of capital over a period of time

that would allow growth and the financing of growth 4. SBI Home Loan PAL has been introduced Customer can confidently negotiate with the builder/seller. Builder/sellers who are apprehensive about our ability to deliver in time will

not find a need to influence the customer to go to other banks/HFCs. Database of Pre-approved loans will enable the Bank to negotiate with the

builders to offer better rates for SBI Home Loan borrowers 5. Producer Companies – Emerging Area in AGRI business Producer companies act as aggregators or intermediary institutions that can

pool produces in adequate quantity from various small farmers for further processing who can sell at a better price

Identification of Producer companies as an emerging area in AGRI business opportunities and to take advantage of revolutions in Agro marketing


6. Maintenance of Drafts/IOI lost register at branches is dispensed Blank Draft Forms reported lost are entered in to the CBS by the branches

and advised to DRD to update at the whole Bank level data/reconciliation systems subsequently

Blank IOI forms reported lost are entered in to CBS by Central Stationary department/ branch and data is generated and provided to DRD to update at the whole Bank level data/reconciliation systems subsequently

As the Draft Reconciliation Department is updating the whole Bank level data, the maintenance of ‘Draft/IOI lost register’ at Branches is redundant and hence is dispensed with

7. Universal Passbook is introduced

Significant standardization method Format suitable for all type of accounts viz., SB,RD,ACC etc Issues such as non-alignment, overlapping of details will be avoided leading

to customer satisfaction No manual updation and will be a safe guard against frauds Increases comfort & efficiency of operating staff

8. Value Added nomination Facilities made available to customers To allow disclosure of the name of the nominee in Passbooks/TDR/STDR

Advices/Statement of accounts in cases where the customer is agreeable to the same for the eventual guidance of the nominees

In furtherance of Depositor(s)/Nominee(s)/legal heir(s) convenience In case of death of the account holder, the relatives can know from the Pass

book/TDR/STDR Advice/Statement of Account about nomination availed & name of the nominee and to initiate suitable action

Compliance of RBI instructions on disclosure of nominee name in Passbook/TDR/STDR Advices/Statement of accounts

9. Obtention of revival letters and Balance confirmation letters in case of Term loan accounts in Personal Segment which are repaid regularly and are standard assets dispensed. Eventually a demand should not be made on the guarantor(s) unless it is decided to call up the loan and file civil suit or initiate legal action. Limitation starts from the date of default in the payment of any installments.

No need to obtain revival letter/debit confirmation so long there is no default in repayment of installments

Demanding the loan amount from the guarantor triggers the limitation period The bank will be required to obtain a fresh guarantee from the guarantor, if

the borrower regularizes the loan Obtention of revival letters & debit confirmations are consuming huge

resources in view of increasing number of retail loans and with this decision resources can be effectively utilized


10. Limited Liability Partnership Act – 2008 has been introduced

An alternative corporate business vehicle that would give the benefits of limited liability but would allow its members the flexibility of organizing their internal structure as a partnership based on an agreement.

No personal liability on a member for the Limited Liability Partnership’s debts and contracts. No joint and several liability for the negligence of any member

The Bill does not restrict the benefit of LLP structure to certain classes of professionals only and would be available for use by any enterprise which fulfills the requirements of the Act

While the LLP will be a separate legal entity, liable to the full extent of its assets, the liability of the partners would be limited to their agreed contribution in the LLP.

LLP shall be a body corporate and a legal entity separate from its partners. It will have perpetual succession. Indian Partnership Act, 1932 shall not be applicable to LLPs and there shall not be any upper limit on number of partners in an LLP unlike an ordinary partnership firm where the maximum number of partners can not exceed 20.

Limited liability partnership has fewer compliance and disclosure requirements than companies

SECTION-C :: PRACTICAL PROBLEMS

Please answer any 5 questions out of 8 questions given below . Each question carries 3 marks

1. Rajkumar Khurana kept two blank cheques in his office along with some stamp papers. Those were said to have been stolen from his office. Information as regards missing of the said cheques was also given to the bank. He lodged a First Information Report with regard thereto, on 21-04-01 in Police Station, Digras. The blank cheques were allegedly filled up on 24.06.2001. Those were presented before the bank but were returned dishonoured with the remarks "said cheque reported lost by the drawer" The payee of the cheque issued notices in terms of Section 138 of the NI Act requesting the Rajkumar Khurana to make payment of the above said cheque amount and Rajkumar Khurana sent reply through his Advocate denying his liability falsely taking the plea that the cheque in question was lost but was stolen by the complainant. The payee filed a complaint petition in the Court of Chief Metropolitan Magistrate under Sec-138. Whether the petition filed by the payee of the cheque is sustainable in the court of law? Solution : To attract prosecution under Section 138 of N.I. Act, the dishonour of cheque should be because of the amount of money standing to the credit of drawer is insufficient to honour the cheque, or it exceeds the amount arranged to be paid from that account by an agreement made with that bank. A refusal on the part of the bank to


honour the cheque for the reasons that the cheque was reported lost by the drawer would not bring the matter within the ambit of Section 138 of N.I. Act Keeping in view the facts and circumstances of the case, the for the aforesaid reasons that the complaint petition does not disclose an offence punishable under Section 138 of the Act and the petition filed by the payee is not sustainable 2. An influential customer of your branch entrusted a sealed box with your branch for safe custody. Due to heavy rush at the branch at that time, the branch official kept the box in an Almairah outside the strong room that day. By chance, on the same day, flood in a near by river inundated the branch premises. After two days, while retrieving the branch property, it came to light that the sealed packet was damaged. The customer did not accept the box back and preferred a damage of Rs. 3 Lacs. Is the customer claim sustainable?

Solution :

Section 151 of the Indian contract Act provides that in all cases of bailment, the bailee is bound to take as much care of the goods bailed to him as a man of ordinary prudence would, under similar circumstances, taken care of his own goods of the same bulk, quality and value. In the instant case, the bailee i.e., the Bank, did not take care of the goods as any banker would take. The bank officials should have kept the safe deposit article inside the strong room at a proper place, which they failed to do. Thus, the customer’s claim for damages is sustainable.

3.Mr.Perfect is a Savings Bank customer of your branch. On 13.09.2010, Monday he has tried to withdraw `10,000/- from Bank of Baroda ATM situated in the same town. ATM has not dispensed cash, but SB account of Mr.Perfect has been debited with the amount. On 14.09.2010, he approached you and lodged a written complaint. Immediately you have lodged a complaint in CMS. The complaint has not been resolved despite your best follow-up as the Bank of Baroda did not respond immediately due to technical problems in their ATM. On 29.09.2010, the amount has been credited to the SB account of Mr.Perfect and you have cross checked the status of complaint in CMS which shows the credit of amount on 29.09.2010. Mr.Perfect approached you ON 29.09.2010, with a letter in threatening language claiming compensation of `10,000/-. How will you respond? ( There are no public holidays in between 14th and 29th except two Sundays on 19th & 26th) Solution : As per the uniform guidelines issued by RBI which are issued under section 18 of Payment and Settlement Systems Act 2007 in respect of compensation to customer for settlement of disputed transactions, for any failure to re-credit the customers account within 12 working days from the date of receipt of the complaint, the bank shall pay compensation of `100/- per day, to the aggrieved customer. This compensation shall be credited to the customer’s account automatically without any claim from the customer, on the same day when the bank affords the credit for the failed ATM transaction. Branch has to manually calculate the compensation payable to the customer @ `.100 per day from the 13th day of the date of receipt of complaint from the


customer till the date of actual credit to the customer’s account and accord credit automatically along with the credit of the failed transaction. This has to be done even without any claim from the customer. In view of the RBI guidelines 12 working days were elapsed on 27.09.2010. The credit was afforded on 29.09.2010 i.e., 14th working day. The bank is liable to pay `100/- as one day delay on 28.09.2010. The claim of Mr.Perfect of `10,000/- need not be entertained and to be advised accordingly. As the reason for the delay is attributable to Bank of Baroda, we are entitled to claim such compensation from paid to the customer from Bank of Baroda. Record is to be maintained for putting up for verification by Controllers/Concurrent Auditors 4. The annual sales of a unit is `24lacs. Fixed costs `10lacs. Variable costs `12lacs. Selling price per unit is `25,000. Calculate BEP in terms of sales & in terms of units. What is the margin of safety? Solution: BEP Sales = FC X S = FC X S = 10,00,000 X 24,00,000 Contribution Sales- VC 24,00,000 – 12,00,000 = `20,00,000 BEP Units = BEP Sales = 20,00,000 = 80 units Sale Price per unit 25,000 Margin of Safety = Sales- BE sales X 100 = 24,00,000 – 20,00,000 X100 Sales 24,00,000 = 16.67% 5. Mr.Anand is working as a Single window operator. You are the Cash officer handling the SWO as a case manager. Mr. Harish, employee of Indian Oil Corporation out let deposits the cash every day in to their cash credit account. One day Mr.Anand identified a counterfeit note in the cash tendered by Mr.Harish. Mr. Harish is asking for return of note and tendering another note in lieu of counterfeit note. Mr.Anand is intending to destroy the note and demanding Mr.Harish to tender one more note. You being the Cash Officer, Please advise the correct procedure to be followed?


Solution: Each banknote, which, on examination of various security features /

parameters, is determined as a counterfeit one, shall be branded with a stamp "COUNTERFEIT BANKNOTE". For this purpose, a stamp with a uniform size of 5 cm x 5 cm with the inscription COUNTERFEIT BANKNOTE IMPOUNDED will be branded . Each such impounded note shall be recorded in a separate register, under authentication.

When a banknote tendered at the counter of a bank branch is found to be counterfeit, an acknowledgement receipt in running serial number should be issued to the tenderer, after stamping the note . Acknowledgement receipt may be issued even in cases where the tenderer is unwilling to countersign the receipt

A Counterfeit Note detected in the cash received by the bank branch across the counter shall be impounded in the presence of the tenderer and shall be forwarded to the local police authorities for investigation by filing the FIR. Particulars such as name, address of the tenderer and his / her statement as to how the said note came into his / her possession shall also be forwarded to the police authorities

A copy of the FIR shall be sent to the Forged Note Vigilance Cell constituted at the Head Office of the bank

Acknowledgement of the police authorities concerned has to be obtained in respect of note/s forwarded to them. If the Counterfeit Notes are sent to the police by insured post, acknowledgement of receipt thereof by the police should be invariably obtained and kept on record. A proper follow-up of receipt of acknowledgement from the police authorities is necessary

In no case, the Counterfeit Notes should be returned to the tenderer or destroyed by the bank branches

In addition, Counterfeit Currency Reports (CCRs) are required to be filed with Financial Intelligence Unit-India (FIU-IND) in all cases of detection of Counterfeit Currency Notes at the branches. Reporting of Counterfeit Currency to FIUIND is in addition to usual reporting of Counterfeit Currency detection to RBI, filing complaint/FIR with Police Authorities and National Crime Records Bureau, New Delhi, which should also be ensured

In the instant case, the counterfeit note has to be impounded and branded with stamp in the presence of Mr.Harish. A statement from Mr.Harish has to be obtained and the statement & Counterfeit note to be forwarded to police for filing of FIR. A record should be maintained at the branch in a register. A copy of FIR to be forwarded to Forged notes vigilance cell. Mr. Anand’s idea of destroying the counterfeit note is not correct . 6. Mr. Nangia is a pensioner maintaining SB account with your branch since long. One day, after withdrawing the pension from his account requested the SWO Mr.Naik to update his passbook. Mr.Naik thrown away the passbook on the face of Mr.Nangia saying that the Passbook printer was not working. Mr.Nangia approached you ( Branch Manager) and lodged a complaint in writing. However, you have got the passbook updated in another counter & offered apologies to Mr.Nangia. In the evening, you have discussed the matter with your Accountant and come to understand that Mr.Naik is putting pins into the printer which is stopping immediately and causing damage to printer head & belts. Accountant has also shown several reports signed by the Technician of AMC company. The technician from AMC firm has been contacted and the printer in the counter was repaired. This


time also, the technician made the same comments. You have observed the CCTV footage focusing on Naik counter and found that he is throwing pins in to the printer next day which lead to non-functioning of the printer next day itself. How will you deal with Mr.Naik? Solution : Mr.Naik act of damaging the printer comes under the expression gross misconduct which reads as “ wilful damage or attempt to cause damage to the property of the bank or any of its customers”. The act of Mr.Naik can also be categorized into wilful slowing down in performance of work under gross misconduct. The Act of throwing the passbook on the face of the customer is an expression under minor misconduct which read as “failing to show proper consideration, courtesy or attention towards officers, customers or other employees of the bank, unseemly or unsatisfactory behaviour while on duty”. An employee found guilty of gross misconduct may be dismissed from service without notice, be removed/ compulsory retired/ discharged from service with superannuation benefits, brought down to a lower stage to a maximum of two stages, increments stopped with/without cumulative effect, special pay withdrawn, censured/fined. An employee found guilty of minor misconduct may be warned/censured/ adverse remark entered against him/ increment stopped not longer than 6 months. A workman found guilty of misconduct, whether gross or minor, shall not be given more than one punishment in respect of any one charge. Mr.Naik has committed two acts one under gross misconduct & another under minor misconduct and to be awarded with two separate punishments as appropriate. 7. Mr.Jagan Mohan has been opened Savings Bank Account with a nominal amount. Large number of deposits at various centres, typically of identical, round amounts are made. The amount so accumulated are withdrawn using ATM cards. The credits received are withdrawn on the day of deposit itself and there is very small residual balance left in the account. Although, debit and credit summations in the accounts are in the range of Rs. 75 – 80 lacs, interest received in the account is less than Rs. 100.00. Discuss the situation in the wake of KYC/AML measures? Solution : Under KYC policy Monitoring of Cash transactions is a paramount responsibility casted upon the banker. All cash withdrawals and deposits for Rs. 10 lacs and above including individual cash transaction of less than Rs. 10 lacs but aggregating to Rs. 10 lacs in a calender month are to be reported by way of Cash Transaction Report (CTR) to Financial Intelligence Unit – India (FIU-IND) on prescribed format. Thresh hold limit is one such measure to monitor transactions. Thresh hold limit should be 25% of the annual income in case of individuals and one month turnover in case of business enterprises subject to a maximum of Rs.10 Lacs. Value just under the reporting threshold amount in an apparent attempt to avoid reporting. Value inconsistent with the client’s apparent financial standing.


As per Section 2G of PMLA Act,2002, Suspicious transaction means a transaction whether or not made in cash which, to a person acting in good faith

gives rise to a reasonable ground of suspicion that it may involve the proceeds of crime; or

appears to be made in circumstances of unusual or unjustified

complexity; or

appears to have no economic rationale or bonafide purpose. This appears to be case of ‘Ponzi Scheme’ which is likely to result with heavy losses to large number of innocent individuals. There are enough reasons to suspect the activities. STR has to be filed. If not reported attracts penalties & imprisonment as per Section 13 of PMLA Act,2002 8. Lamrin Branch has reported the following figures in the Performance Report for the month of August’2010. All figures in thousands. Interest & Discount on Advances 17469 Other Income 1655 Interest Paid on Deposits 8741 Salary & Allowances 2162 Overheads 1414 Central Office Interest receivable on Deposits 13255 Other Central Office Interest Receivable 1430 Central Office Interest Payable on advances 11753 Other Central Office Interest Payable 0 Average Monthly Deposits 372928 Average Monthly Advances 383893 Total No of employees including Part Time staff 14 Part Time Staff 3 Government commission accrued but not booked 38 Depreciation Accrued but not charged 225 Aggregate Deposits at the end of Aug’2010 362368 Aggregate Advances at the end of Aug’2010 397948 Calculate the following efficiency parameters:- 1.Average Business per employee 2. Net Profit per employee 3.GRR % 4. Expense Ratio 5. Average Interest spread 6. Transaction cost Solution : 1.Average Business per employee = Average Total Business / Total no of all categories of employees excluding part time employees = 372928+383893/14-3 = 756821/11 = 68802


2. Net Profit per employee = Net result/Total no of employees excluding part time employees Total Income = 17469 + 1655 + 38 = 19162 Total Expenditure = 8741+2162+1414+225 = 12542 Net Central Office Interest = 13255+1430-11753 = 2932 Operating Profit = 19162-12542 = 6620 Net profit = 19162-12542+2932 = 9552 Net profit per employee = 9552 X 12 = 2084 11 5 ( 12/5 indicates Annualized – 12 months in a year and 5 months from April to August) 3. GRR % = Net Result X 100 X 12 Average total business 5 = 9552/756821 X100 X 12/5 = 3.03% 4.Expense Ratio = Total Non- interest Expenses/ (Net Interest Income + other Income) Total Non-Interest Expenses = Staff Expenses + Overheads = 2162+1414+225 = 3801 Net Interest Income = (Interest Received on Advances + Interest received on Funds lent to CO) – ( Interest paid on deposits + Interest paid on funds borrowed from CO) = (17469 + (13255+ 1430) ) –( 8741+11753) = 11660 ER = 3801/ ( 11660+ (1655+38) ) = 3801/13353 = 28.47% 5.Average Interest Spread = Average Yield on Advances – Average cost of Deposits Average Yield on Advances = Interest & discount on Adv X 12 X 100 Average Monthly Advances 5 = 17469/383893 x 12/5 X 100 = 10.92% Average Cost of Deposits = Interest paid on Deposits X 12 X 100 Average Monthly Deposits 5 = 8741/372928 X 12/5 X 100 = 5.63%


Average Interest Spread = 10.92 - 5.63 = 5.29% 6. Transaction cost = Operating cost X 100 Total Business ( Deposits + Advances) Total Business = Aggregate business as at the end of the month Operating cost to be annualized Operating cost = 2162+1414+225 = 3801 Annualized operating cost = 3801 X 12/5 = 9122 Transaction cost = {9122 / ( 362368+397948)}x 100 = (9122/763016) X 100 = 1.20% ( In examination simple figures will be given & all the Efficiency parameters may not be asked)

Documents

Vasudev- Model Paper to -2010 With Key