NOMINATION FACILITIES IN BANKS

Bank account
nomination refers to adding a family member as the nominee for a bank account.
This is usually done to ensure that the money in the account is in the hands of
the successor authorized by the account holder in the unfortunate event of
his/her demise. It is not mandatory to update a nominee as per law. Let us
study some multiple-choice questions pertaining to nomination in bank accounts
for a better understanding of the topic.

 

1.  Nomination facilities were extended to
customers of the banks after legislation was passed making amendments in.

Option A.  Banking Regulation Act, 1949.

Option B.  Reserve Bank of India Act, 1934.

Option C.  Banking Companies (Acquisition and Transfer
of Undertakings), Act, 1970.

Option D.  all above.

 

The correct answer is Option A.
Banking Regulation Act, 1949.

 

 

2.  Nomination facilities are available.

Option A.  in deposit accounts.

Option B.  on safe deposit lockers.

Option C.  on articles deposited for safe custody.

Option D.  in all above.

 

The correct answer is Option D.
in all above.

 

 

3.  Nomination facilities relating to deposit
accounts are available in.

Option A.  individual accounts in single name.

Option B.  individual accounts in joint names.

Option C.  sole proprietorship accounts.

Option D.  all above.

 

The correct answer is Option D.
all above.

 

 

 

4.  Nomination facility is not available in.

Option A.  account in the name of a club or a society.

Option B. account in the name of
partnership firm.

Option C.  account in the name of trust.

Option D. all above.

 

The correct answer is Option D.
all above.

 

 

5.  Nomination facility is not available in.

Option A.  lockers in joint names.

Option B.  articles accepted for safe custody from more
than one person.

Option C.  deposit account in joint names.

Option D.  none of the above.

 

The correct answer is Option B.
articles accepted for safe custody from more than one person.

 

 

6.  In case of deposit account in more than one
name the number of nominees can be.

Option A.  one.

Option B.  two.

Option C.  three.

Option D.  not more than number of account holders.

 

The correct answer is Option A. one.

 

 

7.  A depositor has appointed his minor son aged
12 years as nominee.  He will be required.

Option A.  to appoint a major as second nominee.

Option B.  to appoint some major person as his nominee
in place of minor.

Option C.  not to exercise any nomination at all.

Option D.  to appoint a major person to receive payment
on behalf of minor nominee in the event od death of depositor.

 

The correct answer is Option D.
to appoint a major person to receive payment on behalf of minor nominee in the
event od death of depositor.

 

 

8.  A minor above the age of 15 years opened his
individual savings account in his single name. in this account nomination
facility is:

Option A. not available as a
minor cannot appoint an agent.

Option B.  available as minor has completed 14 years of
age.

Option C.  available only if his father indemnifies the
bank.

Option D. either Option A. or Option
C. above.

 

The correct answer is Option A.
not available as a minor cannot appoint an agent.

 

 

9.  A literate depositor has exercised nomination
in favour of his cousin. This nomination requires.

Option A. no objection
certificate from his legal heirs.

Option B. attestation by notary
public.

Option C.  attestation by two witnesses.

Option D.  none of the above.

 

The correct answer is Option D.
none of the above.

 

 

10.  A deposit was accepted with instructions
‘either or survivor ‘from two depositors A and B.  A died before due date.  B approaches the bank to cancel nomination
earlier exercised by them. In this case:

Option A.  nomination once exercised is irrevocable.

Option B. it can be allowed as
survivor can cancel, change or even exercise fresh nomination.

Option C.  nomination can ‘t be cancelled as it requires
consent of both the depositors.

Option D. either Option A. or Option
C. above.

 

The correct answer is Option B.
it can be allowed as survivor can cancel, change or even exercise fresh
nomination.

 

 

11.  In the event of death of depositor who
exercised nomination, the bank gets valid discharge by payment:

Option A.  to the nominee.

Option B.  to nominee and legal heirs jointly.

Option C. to legal heirs only.

Option D. to court of law.

 

The correct answer is Option A.
to the nominee.

 

Recalled MCQs for Bank Promotion Exams

 

12. Bank will get valid discharge
on payment of balance in deposit account of depositor who has expired provided:

Option A. there is no objection
on behalf of legal heirs of the deceased.

Option B.  bank has made it clear to nominee that he is
getting the payment as trustee of legal heirs of the deceased.

Option C.  there are no legal heirs of the depositor.

Option D.  either Option A. or Option B. above.

 

The correct answer is Option B.
bank has made it clear to nominee that he is getting the payment as trustee of
legal heirs of the deceased.

 

 

13. In a deposit account in the
name of two persons, either of them can singly:

Option A. change the existing
nomination.

Option B. exercise fresh
nomination.

Option C.  cancel existing nomination.

Option D.  none of the above.

 

The correct answer is Option D.
none of the above.

 

 

14. A locker is let out to one
person.  He can appoint.

Option A.  one nominee only.

Option B.  any number of nominees.

Option C.  two or three nominees.

Option D. no nominee can be
appointed as nomination is allowed only in deposit accounts.

 

The correct answer is Option A.
one nominee only.

 

 

15.  A locker is let out to two persons with
instructions ‘either or survivor.  In
this case.

Option A. there can be no
nomination as nomination is allowed in deposit accounts only.

Option B.  there can be 2 or 3 nominees.

Option C.  there can be only one nominee.

Option D.  nomination cannot be allowed as per instructions.

 

The correct answer is Option C.
there can be only one nominee.

 

 

16.  A locker is let out to three persons with
operating instructions ‘any two of us jointly ‘.

Option A. nomination is not
allowed as it is not a deposit account.

Option B.  nomination is not permitted in a jointly
operated locker account.

Option C.  there can be only one nominee.

Option D.  there can be more than one but not more than
two nominees.

 

The correct answer is Option D.
there can be more than one but not more than two nominees.

 

 

 

17. An illiterate depositor
exercises nomination, it is required to be.

Option A.  witnessed by two persons.

Option B.  attested by a Gazetted officer of central or
State Government.

Option C.  brought to the notice of his legal heirs.

Option D.  verified by the Notary Public.

 

The correct answer is Option A.
witnessed by two persons.

 

 

18. We normally donot obtain
signatures of nominee.  In the event of
death of depositor, we get identification of nominee through.

Option A.  two persons acceptable to the Bank.

Option B.  any Gazetted Officer of Central government or
State Government.

Option C.  First Class Magistrate.

Option D.  any one of the above.

 

The correct answer is Option D.
any one of the above.

 

 

19.  As per current guidelines of RBI where
nomination has not been exercised, the bank can make payment to legal heirs of
the deceased depositor without insisting on production of succession certificate
upto:

Option A.  Rs.  50,000.

Option B.  Rs.  5 lakh.

Option C.  Rs.  1 lakh.

Option D.  any amount.

 

The correct answer is Option D.
any amount.

 

 

20.  As per current guidelines of RBI besides not
insisting on succession certificate for payment of deposit amount on being
otherwise satisfied, the banks have been advised to release goods/securities,
etc. Forming security for an advance to heirs of the deceased borrower without
insisting on production of succession certificate upto value of.

Option A.  Rs.  1
lakh.

Option B.  Rs.  50,000.

Option C.  Rs.  5
lakh.

Option D.  any amount.

 

The correct answer is Option D.
any amount.

 

 

21.  Your branch paid a sum of Rs.  627, 212 along with up to date interest to
the nominee of a depositor after proper identification and after observing
usual formalities on 10.  10.  2014 and on 25.  11. 
2014 you receive a notice from the legal heirs of the deceased depositors
the payment has been wrongly made and that the nominee being a distant relation
of the deceased was not entitled to the amount. 
Under the circumstances:

Option A.  the bank is fully discharged in respect of
its liability for the deposit though the claim of legal heirs against the
nominee may be legally valid.

Option B.  the bank is discharged in full after making
payment to the nominee and claim of legal heirs against the nominee is not
valid.

Option C.  the bank should write to the nominee for
refund and payment to the legal heirs.

Option D.  the bank should have obtained no objection
certificate from the legal heirs before effecting payment to the nominee.

 

The correct answer is Option A.
the bank is fully discharged in respect of its liability for the deposit though
the claim of legal heirs against the nominee may be legally valid.

 

 

22.  A had deposited certain articles for safe
custody with your branch and had appointed B as his nominee.  A died and B approaches you for return of the
articles.  The bank should.

Option A.  obtain claim form from ‘B ‘and return the
articles to him and obtain receipt.

Option B.  obtain claim form, prepare an inventory of
the said articles which should be signed by the nominee and give him one copy
along with the articles.

Option C.  ask him to come along with legal heirs of the
deceased and deliver articles on getting their joint discharge.

Option D.  release the articles after only properly
identifying B and without insisting on claim form and without preparing any inventory.

 

The correct answer is Option B.
obtain claim form, prepare an inventory of the said articles which should be
signed by the nominee and give him one copy along with the articles.

 

 

23.  While allowing access to a nominee of locker holder,
and preparing inventory we find among other things a sealed packet. We should:

Option A.  tear it open and specifically mention the
article It contained in the inventory.

Option B.  mention it as sealed packet in the inventory
and deliver it along with other things after observing usual formalities.

Option C.  allow delivery of all other loose articles
but keep the sealed packet which should be delivered in the presence of two
independent witnesses.

Option D. either Option A. or Option
C.

 

The correct answer is Option B.
mention it as sealed packet in the inventory and deliver it along with other
things after observing usual formalities.

 

 

24.  Your branch, after observing usual formalities,
delivered articles in a locker to the nominee of the locker holder.  You receive a legal notice from the heirs of
the locker holder challenging the delivery of articles to the nominee.  In this case:

Option A.  bank should have ensured to deliver articles
jointly to nominee and all legal heirs and is hence liable.

Option B.  on removal of contents of locker by the nominee,
the liability of the bank in relation to contents of the locker stands
discharged provided bank had made it clear to the nominee that he is receiving
the articles as trustee of legal heirs of the deceased.

Option C.  bank should advise the legal heirs to a file
a suit against the nominee.

Option D.  bank should seek legal opinion immediately.

 

The correct answer is Option B.
on removal of contents of locker by the nominee, the liability of the bank in
relation to contents of the locker stands discharged provided bank had made it
clear to the nominee that he is receiving the articles as trustee of legal
heirs of the deceased.

 

 

25. Legal heirs of G, a locker
holder of your branch, who had nominated H as his nominee, have threatened to
file a suit for damages against the bank for allowing to the locker and liberty
to remove articles to H.  In this case.

Option A.  no suit, prosecution or other legal
proceeding shall lie against the bank.

Option B.  bank is liable and should try for a
compromise.

Option C.  bank should request for some time to enable
to it approach the nominee and retrieve articles as per inventory prepared at
the time of delivery.

Option D.  either Option B. or Option C.

 

The correct answer is Option A.
no suit, prosecution or other legal proceeding shall lie against the bank.