--------------------------------------------------------------------------------------------------------------------------Section: 1.

Overview of Banking
--------------------------------------------------------------------------------------------------------------------------1-Only banks allow the facility of withdrawing deposits by cheque.
2The difference between payorder and a cheque:-guarentee of payment,same branch
for pay order
3Alex from Mumbai imports machinery from New York and needs to remit money to th
e supplier. Why is the settlement transaction complex compared
to a transaction
within India?:- due to involment of diffrent currency
4In their roles as intermediaries banks manage:- collection of bills
5-Crossed cheques cannot be encashed across the counter.Ans:- true
6-Which of the following is a retail loan?:- house,car,durable,personal,shares,f
ixed deposites
7-Which of the following is a physical instrument used for transferring funds?:multicity cq
8-Which of the following transactions costs less for a bank?:- electronic fund t
ransfer
9-Arjun approaches Bank A at Delhi for issue of Demand draft payable at Trichy.
Bank A does not have a branch in Trichy. :-It can issue a dd
10-Arun, based in Delhi needs to pay his admission fees to Delhi University. He
needs :-pay order
11-When a customer uses his debit card to pay merchants, who pays the transactio
n fee?:-merchent
12-In case of bill purchase, the interest recovered at the time of advance is ca
lled:- commission
13-The most common mode of payment in business
14-Why would savers be reluctant to lend their money to the entrepreneurs?
15-Which of these are activities performed by a Bank as per definition of bankin
g:- safe keeping
16-Insitutions and Government departments accept payorders because:-to avert the
possibilites of boucing of cq
17-Once a cheque is issued, a drawer cannot stop the payment.
18-Trade remittances hardly involve foreign exchange.
19-Overdraft amount is interest free.:-false
20-The trust of savers is influenced by their perception of how:- prudent the ba
nk is in its practise
21-Raj Chemicals Ltd want to distribute dividends to around 5000 shareholders el
ectronically. The service they should use:- electronic fun transfer
22-A payee of a cheque must own a bank account with the drawee bank to encash ch
eques.:- false
23-Distribution of ________ through banks is called bancassurance.:-insurance
24-Banks are obliged to customers to ensure absolute secrecy of customer informa
tion.:-true
25-Only public sector banks are authorised to collect government taxes.:-false
26-The payee of a cheque cannot give the cheque to a third party as payments tow
ards his dues to the third party.ans:- false
27-Similar to a multi-city cheque, a demand draft can be payable at any city.:false
28-When an asset is leased to a company by the bank, both parties jointly own th
e asset.:-false
29-Tax collection service does not include collection of customs duty.:-false
30-Electronic fund transfers between two different banks cannot be processed wit
hout a common centralised computer system.:-false
31-If a credit card customer does not pay the credit amount by the due date, int
erest is charged from the due date.:-false
32-Banks issue pay order free of cost.:- false
33-All banks must maintain accounts with the settlement bank to be able to clear

cheques.
34-Under cheque purchase service, the bank disburses the amount of the cheque
35-When money is advanced against a usance bill for collection, it is called :-d
iscount
36-Which of the following is a working capital facility offered by a bank to com
panies?:- overdraft,cash credit,packagin credit,demand loans,buissiness card
37-Which of the following intermediary services is mainly meant for exporters?:packing credit
38-Which of the following is not a post-sale finance service?:- cq purchase,bill
purchased,bill discount,bill negotiate,gautrentees,letter of credit.
39-Like Retail Loans, Term Loans also ask for a margin to be contributed by the
borrowing company.
40-To process a payment using the customer`s debit card, a merchant needs_______
____________.:-POS terminal
41-The trust that customers have in the bank is shaken when:42-A Letter of Credit is as good as cash credit as the buyer is concerned.:-true
43-Bank`s earning on distribution of shares depends on:-no of applications and t
otal cash collected
44-PIN of a debit card stands for Ans:- personal identificaion no
45-Payment collection and payment status reporting services provided by banks to
large companies are known as:-cash manegment system
46-If a purchased cheque is returned unpaid, the bank recovers the amount from:customer
47-A pay order is a cheque issued by a bank on :-same branch of the bank
48-Which of the following services cannot be offered by a bank?Ans:-mutualfund a
ndinsurance
selling of gol
d coin
collection of
utility bill
49-Mary wants to save Rs.5000 every month from her salary to pay for her daughte
r`s higher education. She should open a :-savings acc
50-Business cards allow a interest-free period for payments like a credit card d
oes. Ans :-true