TYPES OF CHARGES, SECURITIES &
DOCUMENTATION is a very important topic from internal Bank promotion exams
point of view. Every year 1 to 5 questions are asked in the internal bank
promotion exams question paper depending on the cadre. You may expect same
number of questions this year also. We have prepared some very important
questions from the mentioned topic for your guidance and studies. Questions are
also followed by the answers so that you develop an excellent understanding of
the topic before entering the examination hall. Let us discuss some more
multiple choice questions related to the topic.
61. Mode of
charging securities by Assignment is prescribed in
A. Indian Contract
Act, 1872
B. RBI Act, 1934
C. Transfer of
property Act, 1882
D. B R Act, 1949
The correct answer is C. Transfer of property Act, 1882
62. Which of the
following statements is/are not true about hypothecation of stocks?
A. Borrower can
sell the goods hypothecated and substitute the same by new stocks
B. Borrower takes
undertaking to hand over the possession of security when asked by the bank
C. Borrower holds
the hypothecated goods as a trustee for the bank
D. None of these
The correct answer is D. None of these
63. The charge by way of hypothecation is
A. a floating charge
B. fixed charge
C. innocuous charge
D. running charge
The correct answer is A. a floating charge
64. In the context of bank lending, floating charge
stands for:
A. charge created
on any goods that can float on water
B. charge created
on sailing ships or vessels
C. a charge not on
any particular item but fluctuating stock of the borrower
D. either B. or C.
above
The correct answer is C. a charge not on any particular
item but fluctuating stock of the borrower
65. In case a loan is granted by more than one bank by
creating pari passu charge on the same security it means
A. bank, which had
given loan earlier, will have priority over the security
B. all banks will
share the sale proceeds equally on default by borrower
C. all banks will
have charge on the security in proportion to their outstanding advance
D. a charge which
is not required to be registered with Registrar of companies
The correct answer is C. all banks will have charge on
the security in proportion to their outstanding advance
66. When hypothecation is converted to pledge, the
creditor (bank) gets the rights of a
A. pledgee
B. owner
C. hypothecate
D. both A.& B.
The correct answer is A. pledgee
67. In case, the borrower who had pledged the goods as
security does not repay the loan, the bank as a pledgee may take which of the
following actions under Section 176 of the Indian Contract Act, 1872?
A. bring a suit
against the pledgor
B. retain the
pledged goods as a collateral security
C. sell the goods
pledged after giving the pledgor reasonable notice of sale
D. both A. & B.
The correct answer is C. sell the goods pledged after
giving the pledgor reasonable notice of sale
68. A charge on
book debts of the borrower is normally created by:
A. Hypothecation
B. Pledge
C. Mortgage
D. lien
The correct answer is A. Hypothecation
69. The charge on
book debts can be created by way of
A. Pledge
B. Assignment
C. Hypothecation
D. either B. or C. above
The correct answer is A. Hypothecation
70. who of the
following is not eligible to raise a loan from the bank?
A. Illiterate
person
B. Blind person
C. Married
women.
D. None of these
The correct answer is D. None of these
71. In case of
loan to an HUF, the documents should be got signed from
A. only Karta as he is authorized to borrow and charge
HUF property
B. Karta and all co parceners
C. Karta and major co parceners
D. Karta and major
coparceners and the guardians of minor coparceners
The correct answer is C. Karta and major co parceners
72. which of the
following is the most appropriate statement regarding loan to a partnership
firm?
A. it should be seen that the firm is registered one
B. the firm may be registered or unregistered
C. while it is
preferable to finance registered firms, unregistered firms can be legally
financed
D. if the firm is not registered, bank will not be able
to recover the loan from the firm
The correct answer is C. while it is preferable to
finance registered firms, unregistered firms can be legally financed
73. which of the
following should be ensured while granting term loan to a limited company?
A. the object for which loan is being given is as stated
in Memorandum of Association
B. There is a
board resolution authorizing certain officials or directors to execute loan
documents
C. The loan being
raised is within the borrowing powers mentioned in Articles of Association
D. All of these
The correct answer is D. All of these
74. The borrowing
powers of directors are contained
A. certificate of incorporation
B. articles of association
C. memorandum of association
D. board resolution
The correct answer is B. articles of association
75. The common
seal of the company should be affixed on the loan documents in the presence of
A. company secretary of the company
B. Managing Director
of the company
C. officials who have been authorized by board of
directors in this regard
D. officials who have been authorized by shareholders in
the general body meeting
The correct answer is C. officials who have been
authorized by board of directors in this regard
76. Mr. Amar has been sanctioned a loan of Rs. 10 lakh but before execution of documents, he
had to go abroad due to certain reasons.
He executes a power of attorney in favour of his minor son
A. Request cannot
be acceded to as minor is incompetent to enter into an agreement.
B. Request cannot
be acceded to as a power of Attorney cannot execute the documents
C. Bank may
consider accepting request of borrower as minor is acting as an agent and his acts
are binding upon the principal borrower.
D. The request may
be considered provided minor is more than 14 years old
The correct answer is C. Bank may consider accepting
request of borrower as minor is acting as an agent and his acts are binding
upon the principal borrower.
77. What is the
full form of SHCIL?
A. Share Holding
Corporation of India Limited
B. Stock Holding
Corporation of India Limited
C. Stock Holding
Committee of India Limited
D. Share Holding
Committee of India Limited
The correct answer is B. Stock Holding Corporation of
India Limited
78. Registered office of SHCIL is in
A. Delhi
B. Chennai
C. Bengaluru
D. Mumbai
The correct answer is D. Mumbai
79. On which of
the following documents stamp duty is levied as per rates prescribed by state
government?
A. Promissory note
B. Bill of
exchange
C. insurance policy
D. Power of
Attorney
The correct answer is D. Power of Attorney
80. On which of the following documents stamp duty is
levied as per rates prescribed by central government
A. Hypothecation
agreement
B. Mortgage deed
C. Indemnity Bond
D. None of these
The correct answer is D. None of these
35 MCQs Types of Customers and Accounts (Part 2) Bank
Promotion exams (2022-23)
81. Summary suit can be filed for money decree on the
strength of those documents where there is a prima facie evidence of a
defendant’s liability. Such documents
include
A. promissory note
B. bill of
exchange
C. cheque
D. all above
The correct answer is D. all above
82. Documents which require stamping should be stamped
A. before filing a
suit
B. before
execution
C. at the time of
execution
D. either B. or C.
above
The correct answer is D. either B. or C. above
83. A promissory note which is payable otherwise than on
demand attracts
A. stamp duty of
25 paisa
B. stamp duty of
Re. 1/-
C. same stamp duty
as a bill of exchange of like amount and tenor payable otherwise than payable on
demand
D. stamping of
Rs. 5 only
The correct answer is C. same stamp duty as a bill of
exchange of like amount and tenor payable otherwise than on demand
84. Which of the following documents, in the event of
their being unstamped or under stamped cannot be admitted in evidence in a
court of law even after paying penalty as per laid down procedure?
A. Letter of
credit
B. Letter of
hypothecation/pledge
C. DP note
D. none of these
The correct answer is D. none of these
85. If a document
is unstamped or under-stamped, what can be done to make it admissible?
A. The document
will not be admissible as evidence in the court of law
B. The document
can be admitted in evidence on payment of Penalty of ten times the deficit
C. The document
can be admitted by on payment of deficit amount along with a penalty which is
minimum Rs. 5 and maximum ten times the deficit amount.
D. either A. or C.
as per discretion of the collector of stamps
The correct answer is C. The document can be admitted by
on payment of deficit amount along with a penalty which is minimum Rs. 5 and maximum ten times the deficit amount.
86. Which of the
following is not true regarding stamp duty on a demand promissory note?
A. Amount of loan
upto Rs. 250: stamp duty 5 paise
B. Amount of loan
more than Rs. 250 but upto to Rs. 1000: Stamp duty 10 paise
C. Amount of loan
more than Rs. 1000: stamp duty 15 paise
D. None of these
The correct answer is D. None of these
Part 2 : TYPES OF CHARGES, SECURITIES & DOCUMENTATION
With Multiple Choice Questions and answers (MCQs) for Bank Promotion Exams
87. A Promissory
note/bill of exchange executed abroad should be stamped by its first holder in
India
A. within 3 months
of its receipt in India
B. within 3 months
of its acceptance, payment or negotiation
C. before
presenting the same for acceptance, payment or negotiation
D. any of these,
whichever is later
The correct answer is C. before presenting the same for
acceptance, payment or negotiation
88. A Power of
Attorney executed outside India is required to be stamped as per Indian stamp
law within months of its receipt in India.
A. 1
B. 2
C. 3
D. 4
The correct answer is C. 3
89. Which of the
following documents is/are not required to be stamped?
A. Demand
Promissory Note
B. Demand Bill of
Exchange
C. Usance
Promissory Note
D. usance Bill of exchange
The correct answer is B. Demand Bill of Exchange
90. Assuming that
stamp duty rate on an agreement executed in Delhi is Rs. 10/-, in Lucknow Rs. 100, in Patna Rs. 50, and in Jammu Rs. 20/-.
choose the most appropriate statement (s) relating to stamp duty on an
agreement executed first in Delhi by partner A, next in Lucknow by partner B,
then in Patna by partner C and finally in Jammu by partner D.
A. Stamp duty of
Rs. 100 will be paid in Delhi
B. Stamp duty of
Rs. 10 will be paid in Delhi, Rs. 100 in Lucknow, Rs. 50 in Patna &
Rs. 20 in Jammu
C. Stamp duty of
Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow and Rs. 20 in Jammu
D. Stamp duty of
Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow, Rs. 40 in Patna
The correct answer is C. Stamp duty of Rs. 10 will be paid in Delhi, Rs. 90 in Lucknow and Rs. 20 in Jammu
