Rakesh Kumar Roshan Solutions for Chapter: Practice Set, Exercise 2: PRACTICE SET 2 FOR BANKING AWARENESS

Consider the following statements.

I. If the beneficiary of a cheque has lost the cheque, he can instruct the paying bank to stop payment of the cheque without waiting for the account holder's instructions.
II. While outsourcing, the only consideration should be cost savings.

Which of the statements given above is/are correct?

As per the notification issued by the banks, the 'third party ATM usage' will now be restricted to certain withdrawals and limits only. What does it really mean?

I. The ATM card holders will not be able to withdraw from other banks' ATMs under any circumstances.
II. Customers of one bank may be able to withdraw only a limited amount from other banks' ATMs.
III. ATM card holders will have to pay a fee if they withdraw money from other banks' ATMs frequently.

Select the correct answer.

The objectives of forming SHG is/are:

I. to build mutual trust and confidence between the bankers and the rural poor people.
II. to encourage banking activities, both on the thrift as well as credit sides, in a segment of the population that the formal financial institutions usually find difficult to cover.
III, to meet the needs of the poor by combining the flexibility, sensitivity and responsiveness of the Informal Credit System with the strength of technical and administrative capabilities and financial resources of the formal credit institutions.

Select the correct answer.

As reported in various newspapers, many banks have revised their interest rates on home loans, cars loans and other such loans. Which of the following phenomenon prompted these banks to make such an upward revision in their interest rates?
I. RBI has revised the CRR and other such rates upward, which has created a liquidity crunch in the market.
II. Stock markets in the country are showing very high fluctuations, as visible through their indexes. As a result, banks have lost a considerable amount of money in trading. Banks now want to recover that money by increasing their interest rates.
III. Banks need a considerable amount of money, as they have to give revised pay to all their employees.
Select the correct answer.

What is difference between banks and NBFCs?

I. NBFCs business activities are akin to that of banks as they can lend and make investments; however there are a few differences between them.
II. NBFCs cannot accept demand deposites. They cannot issue cheques as they do not form part of the payment and settlement system.
III. Deposit insurance facility of Deposit Insurance and Credit Guarantee Corporation is not available to depositors of NBFCs, unlike in case of banks.

Select the correct answer.

Many times, we hear about the 'Banking Ombusdsman'. What is/are the major roles of same?

I. Banking Ombudsman is a quasi-judicial authority having powers to summon, the banks and the customers both in case of dispute.
II. The Banking Ombudsman are appointed by the President of India and are retired judges of the High or Supreme Courts.
III. The decisions/judgements given by the Banking Ombudsman cannot be taken to any court of justice as their decisions are last in case of bank related problems disputes.

Select the correct answer.

The Reserve Bank of India keeps on changing various ratios/rates frequently. Why is this done?

I. To keep inflation under control.
II. To ensure that Indian rupee does not lose its market value.
III. To ensure that banks do not earn huge profits at the cost of public money.

Select the correct answer.

The legal relationship between a bank and its customer is a kind of

I. Debtor and creditor
II. Principal and agent
III. Pledgor and pledgee
IV. Mortgagor and mortgagee

Select the correct answer.