Indian institute of banking & finance jaiib module (A & B) legal aspects of banking operations thursday 17 april 08 t m c vasudevan

a.. Cash

b.. Unencumbered approved securities

c.. Partly in both

d.. Only in encumbered approved securities

30.... The State Bank of India is empowered under Section 47 to inspect the subsidiary banks.

• A.. The above statement is not false.

• B.. The above statement is incorrect

• C.. Only RBI can inspect and not State Bank

• D.. One subsidiary bank to inspect another and so on.

• 31..At least 51% of the total number of directors shall be persons who have special knowledge or practical experience in respect of accountancy, agriculture and rural economy, banking, co-operation and so on

• ..The directors of a banking company not to hold office for more than 8 years continuously

• ..The whole –time Chairman and a Managing Director shall hold office for a period not exceeding 5 years

• 32.. The Whole-time Chairman or the Managing Director of a banking company should have special knowledge or practical experience of the working of a banking company or State Bank of India or a subsidiary bank or a financial institution or financial, economical or business administration.

• 33.. As per the provisions of the Reserve Bank of India Act, the Whole time Chairman or the Managing Director of a banking company to hold qualification shares of minimum 50.

• It is not 50 but 200

• They need not hold any qualification shares

• They need to have minimum qualification shares of 10 as per the provisions of Banking Regulation act and not RBI act

• They need to hold qualification shares but no restriction with regard to the numbers.

• 34.. Banks have to file a return on their unclaimed deposit within 30 days of the end of each calendar year.

• .. All deposits not operated in 10 years

• .. For term deposits, the period of 10 years starts from the expiry of the period of the deposit

• 35.. RBI issues directions from time to time regulating the lending operations of banking companies

• ..The tools employed for exercising Selective Credit Control are

• ..Minimum margins for lending against selected commodities

• .. ceilings on the levels of credit and

• .. charging of minimum rate of interest on advances against specified commodities

• 36.. RBI is authorized to regulate interest rates on loans and advances as well as deposits.

• The Usurious Loans Act. 1918 prohibits lending at exorbitant rates. The law has been made to protect the weaker borrowers from the powerful moneylenders

• ..RBI has issued guidelines in respect of internet banking. These cover a.. Technology and Security issues b.. Legal issue and c . Regulatory and supervisory issues

• 37..Banking Ombudsman is an authority established under the Banking Ombudsman Scheme, 1995 by the RBI. The purpose is to resolve and settle the complaints of banking public against the commercial banks and the scheduled primary cooperative banks without resorting to courts.

• 38.. ** Banking Ombudsman scheme applicable to all commercial banks, RRBs and schedules primary co-operative banks.

• .. Disputes between two banks can also be taken up with the Banking Ombudsman

• .. Even the Credit card related issues can be taken up with the Banking Ombudsman

• ..A banking ombudsman may act as an arbitrator

• 39.. identify the odd one (Banking ombudsman)

• a.. Observance of Reserve Bank directives on interest rates

• Non-acceptance of application for loans without assigning valid reasons to the applicant

• Non-issuance of Demand Drafts to non-customers

• Non-adherence to prescribed working hours by branches

• 40.. Appropriation of any amount from the reserve fund or the share premium account has to be reported to RBI within 21 days of such appropriation.

• .. Every scheduled bank has to submit a return to RBI showing the demand and time liabilities and borrowings from banks in India

• 41..A bank has to submit a Friday statement to RBI . The said Friday(15th of a particular month) has not been declared as holiday under the Negotiable Instruments Act, but the previous and subsequent working days were declared . Then the statement to be prepared as on

• a.. 16th of that month b.. 14th of that month

• c.. 15th of that month d.. 17th of that month

• 42.. Every banking company has to maintain in India certain amount of assets as per the provisions of BR act.

• .. At the close of business on the last Friday of every quarter, such assets shall not be less than 75% of the demand and time liabilities of the banking company in India.

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