Multiple Choice
Questions (MCQs) on Advances
Key Topics for Bank Promotion Exams
1. Lenders shall report
credit information, including classification of an account as SMA to CRILC, on
all borrowers having aggregate exposure of Rs. 5 crore and above with them.
CRILC stands for?
A. Central Repository
of Information on Large Credits.
B. Central Repository
of Information on Large Credit accounts.
C. Centralized
Repository of Information on Large Credits.
D. Central Repository
of Informatics on Large Credits.
The correct answer is Option
A. Central Repository of Information on Large Credits.
2. Which of the
following statement with respect to reporting of Advances to CRILC (Central
Repository of Information on Large Credits) by the banks is not correct?
A. Banks need to report
position of the advances of Rs. 5 crore and above to CRILC.
B. The CRILIC reporting
need to be done on fortnightly basis.
C. Lenders shall report
to CRILC, all borrower entities in default (with aggregate exposure of Rs. 5
crore and above), on a weekly basis.
D. The CRILIC reporting
on all accounts with an exposure of Rs. 5 crore and above need to be done on
monthly basis (Other than accounts in default).
The correct answer is Option
B. The CRILIC reporting need to be done on fortnightly basis.
3. Which of the
following is not a correct combination of Sub-category of Stressed Assets
(Number of days overdue) for Cash credit account?
A. SMA 0 – 1 day to 30
days.
B. SMA 1 – 31days to 60
days.
C. SMA 2 – 61 days to 90
days.
D. Sub Standard- 91st
day onwards.
The correct answer is Option
A. SMA 0 – 1 day to 30 days.
4. Red Flagging of
Accounts is a measure towards?
A. NPA management.
B. Credit Management.
C. Operational risk
management with respect to loan accounts.
D. Fraud risk control.
The correct answer is Option
D. Fraud risk control.
5. As per RBI
guidelines, if the account is Red flagged by considering EWS for fraudulent
activity, a bank can monitor the account as per its own discretion/guidelines
upto a limit of?
A. Rs. 5 crore.
B. Rs. 100 crore.
C. Rs. 50 crore.
D. Rs. 10 crore.
The correct answer is Option
C. Rs. 50 crore.
Retail Banking Questions for Bank Promotion Exams (PART 1)
6. What is the
Provision coverage ratio (PCR) stipulated by RBI for Scheduled commercial
banks?
A. 60%.
B. 70%.
C. 80%.
D. 75%.
The correct answer is Option
B. Rs. 70%.
7. In case of
Consortium banking arrangement, if a member bank notices suspected fraudulent
Early Warning Signals (EWS), the initial decision to classify account as RFA or
Fraud will be at its own level. It should report the details in CRILIC and
alert other banks. In such cases, the consortium meeting should be held?
A. Within 30 days of
such reporting.
B. Within 7 days of
such reporting.
C. Within 15 days of
such reporting.
D. Consortium meeting
is not required.
The correct answer is Option
C. Within 15 days of such reporting.
8. In case of Red
Flagged account, in case of consortium accounts, if minimum of percentage of
lenders decide to classify the account as Red Flagged, then all banks should
accept it and immediately Forensic Audit to be ordered.
A. 75%.
B. 66%.
C. 51%.
D. 60%.
The correct answer is Option
D. 60%.
9. is an examination
and evaluation of a firm’s or individual’s financial information for use as
evidence in the court of law.
A. Tax audit.
B. Forensic Audit.
C. Revenue Audit.
D. Legal Audit.
The correct answer is Option
B. Forensic Audit.
10. In case of forensic
audit, the auditors should audit the financial statements of the subject firm
or company for a minimum period of?
A. 3 years.
B. No minimum or
maximum limit.
C. 5 years and the
maximum is depending on requirement.
D. 2 years and the
maximum is depending on requirement.
The correct answer is Option
B. No minimum or maximum limit.
11. In case of
consortium or multiple banking arrangements, if the member banks orders for a
forensic audit of customer account, as per RBI guidelines, the same need to be
completed within a maximum period of?
A. 30 days.
B. 60 days.
C. 90 days.
D. 180 days.
The correct answer is Option
C. 90 days.
12. In respect of
borrowers having aggregate fund based working capital limit of Rs. ……………. from banking
system, a minimum level of and above from the percent shall disbursed by the
banks as loan component (working capital demand loan).
A. 150 crore and 50%.
B. 150 crore and 40%.
C. 50 crore and 40%.
D. 5 crore and 40%.
The correct answer is Option
B. 150 crore and 40%.
13. The undrawn portion
of cash credit/ overdraft limits sanctioned to the large borrowers with
aggregate working capital exposure of Rs. 150 crore and more, irrespective of
whether unconditionally cancellable or not, shall attract a ‘Credit conversion
factor’ of?
A. 20%.
B. 25%.
C. 30%.
D. 50%.
The correct answer is Option
A. 20%.
14. As per RBI’s
guidelines, restructuring of advance may involve modification of terms of the
advances / securities. The process of restructuring includes?
A. Alteration of
payment period / payable amount / the amount of instalments / rate of interest.
B. Roll over of credit
facilities.
C. Sanction of additional
credit facility/ release of additional funds for an account in default to aid
curing of default / enhancement of existing credit limits.
D. Compromise
settlements where time for payment of settlement amount exceeds three months.
E. All the above.
The correct answer is Option
E. All the above.
Mock test (SET 1) for Bank Promotion Exams
15. Which of the
following category of Advance is eligible for restructuring as per RBI
guidelines?
A. NPA accounts only.
B. NPA accounts in
Substandard category only.
C. Standard accounts
only.
D. Both NPA and
Standard accounts.
The correct answer is Option
D. Both NPA and Standard accounts.
16. As per RBI
guidelines, in case of MSME accounts with aggregate exposure less than Rs. 25
crore, the account can be upgraded only if it demonstrates satisfactory performance
during the specified period. Specified period refers to?
A. One year from the
commencement of the first payment of interest or principal, whichever is later.
B. Two years from the
commencement of the first payment of interest or principal, whichever is later.
C. 6 months from the
commencement of the first payment of interest or principal, whichever is later.
D. Three years from the
commencement of the first payment of interest or principal, whichever is later.
The correct answer is Option
A. One year from the commencement of the first payment of interest or
principal, whichever is later.
17. A Cash Credit
account is not considered as ‘Out of Order’ in which of the following cases?
A. If the outstanding
balance remains continuously in excess of the sanctioned limit/drawing power
for 90 days.
B. If the account is
not renewed for the period of 90 days from the renewal due date.
C. Outstanding balance
in the principal operating account is less than the sanctioned limit/drawing
power, but there are no credits continuously for 90 days.
D. The account has
Outstanding balance which is less than sanctioned limit, there are credits in
the account but the Credits are not sufficient to cover the interest debited
during the same period.
The correct answer is Option
B. If the account is not renewed for the period of 90 days from the renewal due
date.
18. A loan granted for
short duration crops will be treated as NPA, if the instalment of principal or
interest thereon remains overdue for a period of?
A. One crop season.
B. Two crop season.
C. 270 days.
D. 90 days.
The correct answer is Option
B. Two crop season.
19. A Loan account has
an outstanding exposure of Rs. 5 crore and it is considered as ‘Loss Asset’.
The value of security attached to the account is Rs. 50 Lakh. What is the
amount of Provisioning the bank needs to make?
A. Rs. 4 crore.
B. Rs. 5 crore.
C. Rs. 1.25 crore.
D. Rs. 2.25 crore.
The correct answer is Option
B. Rs. 5 crore.
20. A Loan account has
an outstanding exposure of Rs. 5 crore and it is considered as ‘Doubtful
Asset’. The realizable value of security attached to the account is Rs. 4
crore. The account is in Doubtful status from last 2 years. What is the amount
of Provisioning the bank needs to make?
A. Rs. 4 crore.
B. Rs. 2.60 crore.
C. Rs. 1 crore.
D. Rs. 2 crore.
The correct answer is Option
B. Rs. 2.60 crore.
