Hypothecation Advance - Banking and Insurance Law and Practice - Exam, Exams of Banking Law and Practice

Download Hypothecation Advance - Banking and Insurance Law and Practice - Exam and more Exams Banking Law and Practice in PDF only on Docsity! 1/2009/BILP (OS) P. T. O. : 1 : 336 Roll No.......................... Time allowed : 3 hours Maximum marks : 100 Total number of questions : 8 Total number of printed pages : 5 P A R T — A (Answer Question No.1 which is compulsory and any two of the rest from this part.) 1. (a) Nav Chetan bank has given a hypothecation advance against inventory to Rajani Enterprises. In a periodical checking, the stocks are found short by the bank. The bank allows more finance to make good the shortage. Is the bank’s action correct ? Give reasons for your answer. (4 marks) (b) Bhumika received a cheque of Rs.51,000 as a gift from Vivek. Later on, the cheque was dishonoured. State whether Bhumika can bring an action against Vivek for dishonour of the cheque. (4 marks) (c) State, with reasons in brief, whether the following statements are correct or incorrect: (i) High interest rates in the economy for a long time may hit the growth scenerio. (ii) Liquidity is the cornerstone of banking operations. (iii) Under irrevocable letter of credit, interest of confirming bank is not protected. (iv) Credit Information Bureau of India Ltd. (CIBIL) helps to facilitate avoidance of adverse selection of borrowers. (1 mark each) (d) Choose the most appropriate answer from the given options in respect of the following : (i) As per section 17 of the Indian Stamp Act, 1899, instruments executed in India are required to be stamped — (a) Before execution (b) After execution (c) Before or at the time of execution (d) All of the above. (ii) Which of the following is called ‘core capital’ of a bank — (a) Tier-I capital (b) Tier-II capital (c) Hybrid capital (d) Subordinated debts. : 2 : 1/2009/BILP (OS) Contd... 336 (iii) If a cheque is dishonoured for insufficiency of funds in the account, the drawer of the cheque is liable for — (a) Imprisonment (b) Fine (c) Both (a) and (b) (d) None of the above. (iv) Which of the following mode is useful for bulk transfer of funds from one account to many accounts and vice-versa — (e) EFT (f) RTGS (g) ECS (h) None of the above. (1 mark each) (e) Re-write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s ) : (i) ________ per cent of advances of a bank should go to the designated priority sector, viz., agriculture, small industries and small units. (ii) Rural and semi-urban branches of banks are to maintain a credit-deposit ratio of at least _____ per cent of their deposits. (iii) _______ per cent of the advances to priority sector should go to the weaker sections of the community. (iv) A cheque has ___________ parties. (1 mark each) 2. Attempt any three of the following : (i) List down some of the strengths of the Indian banking system. (ii) How do banks minimise the risk involved in lending funds ? (iii) What is ‘cheque truncation’ ? What type of cheques can be presented in the cheque truncation system ? (iv) What are the factors affecting interest rates in the market ? Discuss them in brief. (5 marks each) 3. Attempt any three of the following : (i) Explain the significance of endorsements. (ii) “The bank is not required to give prior notice to the borrower before exercising its right of lien.” Examine the statement.