MCQ – FOREIGN EXCHANGE

FEMA, NR Deposits & Remittances

1. What do you mean by ‘FEMA’

a) Foreign Exposure Management Act

b) Foreign Exchange Managing Act

c) Fedai Exchange Monitoring Act

d) Foreign Exchange Management Act

Answer: d) Foreign Exchange Management Act

2. When the FEMA Act was passed in Parliament?

a) Ist July,1999

b) 28th December,1999

c) 29th December,1999

d) 30th December,1999

Answer: c) 29th December,1999

3. Which Government body monitors ‘FEMA’?

a) DGFT b) Customs c) RBI d) Ministry of

Commerce

Answer: c) RBI

4. What is the objective of this FEMA, 1999 Act?

a) Replacing FERA

b) For Prevention of Money Laundering

c) Control in Balance of Payments in India

d) Facilitating external trade & Payments & promoting, development &

maintenance of foreign exchange market in India
Answer: d) Facilitating external trade & Payments & promoting, development
& maintenance of foreign exchange market in India

5. Please quote the section under FEMA 1999 which defines ‘A

person resident in India’?

a) Section 49 (i) b) Section 9 (vi)

c) Section 2 (v) (i) d) None of the

above.

Answer: c) Section 2 (v) (i)

6. What is the period a ‘Resident’ has to be in India in the preceding

financial year?

a) 180 days b) 6 months c) more than182 days d) 181 days

Answer:c)morethan182days

7. If a Foreign citizen who stay in India for employment, business

etc. for an indefinite period of stay, will be considered

a) As Resident b) As foreign citizen

c) As PIO d) None of the above.

Answer: a) As Resident

8. If an Indian citizen proceed abroad for business visit, medical

treatment, training for short duration will be considered as

a) To be considered as a NRI b) To be considered as Resident

only

c) Persons of Indian Origin d) None of these

Answer: b) To be considered as Resident only

9. For release of foreign exchange to resident Indians for current

account transactions, Authorized dealer to be guided by which
section of ‘FEMA’?

a) Section 3 b) Section 2(ii) c) Section 5 d) Section

9

Answer: c) Section 5
10. What do you mean by ‘Schedule III’ & to whom it has been
delegated?

a) RBI b) Authorized dealer Banks c) Customs d) None of the above.

Answer: b) Authorized dealer Banks

11. In terms of drawl exchange as per ‘Schedule I’, certain

categories are permitted?

a) Foreign Travel b) Education

c) Expressly prohibited d) None of these.

Answer: c) Expressly prohibited

12. Out of overall foreign exchange (USD 250,000) being sold to a

traveler going to Libya, exchange in the form of foreign currency
notes & coins how much can be sold ?

a) USD 3000 b) USD 5000 c) USD 5000 or its equivalent

d) No limit for Libiya as like Islamic Republic of Iran.

Answer: c) USD 5000 or its equivalent

13. How much a resident Indian is allowed to take INR to other

countries (other than Nepal & Bhutan) ?

a) Rs 50,000 b) Rs 10,000 c) Rs 25,000 d) No

limit

Answer: c) Rs 25,000

14. Which Form we have to obtain from traveler releasing currency

other than application?

a) Form A1 b) Form A4 c) Form A2 d) Form A

Answer: c) Form A2

15. To which department of Government of India the Dance

troupes, artistes should apply for foreign exchange while
undertaking tours?

a) Department of Education & Culture under the Ministry of Education

b) Department of Education & Culture under the Ministry of Ministry of

Human Resources
 c) Department of Foreign Affairs

d) No permission required, An Authorized dealer or FFMC can disburse.

Answer: b) Department of Education & Culture under the Ministry of Ministry

of Human Resources

16. What is the maximum eligibility for private visits to abroad

(other than Nepal & Bhutan)?

a) Rs 50,000

b) USD 250,000

c) Rs 250,000 equivalent foreign exchange

d) None of the above.

Answer: b) USD 250,000

17. For going abroad on employment, emigration how much

amount a person can draw foreign exchange in a financial year
under LRS scheme?

a) Rs 100,000 b) Rs 250,000 c) USD 250,000

d) None of the above.

Answer: c) USD 250,000

18. The individuals having proprietorship firms, what is maximum

drawl amount while visiting abroad irrespective of the number of
visits during a financial year?

a) No limit b) Rs 250,000 equivalent foreign exchange

c) USD 250,000 d) USD 50,000

Answer: c) USD 250,000

19. If a resident individual going abroad for medical treatment &

submit an estimate from the doctor what is the maximum
eligibility?

a) Rs 250,000

b) Up to estimated amount

c) Up to estimated amount or USD 250,000 whichever is more.

d) Up to estimated amount or Rs 250,000 whichever is less

Answer: c) Up to estimated amount or USD 250,000 whichever is more

20. The resident individuals for studies abroad for purchase of

foreign exchange under LRS of USD 250,000, what documents
required other than “Application cum undertaking’?

a) Form A1 b) Form A4 c) Form A2 d) Application cum

undertaking’ only

Answer: c) Form A2

21. Which account a resident individual in India can open, hold &
maintain with an authorized dealer out of foreign exchange
acquired in the form of currency notes, bank notes & traveler
cheques?
a) FCNR b) RFC c) RFC (D) d) Domestic SB

Answer: c) RFC

22. What is the limit the Authorized Dealer may accept in cash for
amounts against sale of foreign exchange for travel abroad?

a) Rs 25,000 b) Rs 10,000 c) Rs 50,000

d) No limit

Answer: c) Rs 50,000

23. Up to what amount AD-I banks can release forex in the cash for
Traveller proceeding for HAJ/UMARAH pilgrim?

a) Up to USD10000

b) Up to the cash limit specified by HAZ committee of India

c) A or B whichever is lower

d) A or B whichever is higher

Answer: b) Up to the cash limit specified by HAZ committee of India

24. How much forex can be released for travel to Nepal or Bhutan?

a) USD5000

b) USD10000

c) Forex can’t be released for travel to Nepal or Bhutan

d) USD 25000
Answer: c) Forex can’t be released for travel to Nepal or Bhutan

25. An NRI resident in Dubai has come back to India to settle

permanently. Which of the following account as a Banker you will
suggest as per FEMA,1999 to keep his present & future earnings
in foreign currency, facility of future repatriation facility & to
earn interest thereon:

a) Foreign Currency Nonresident account

b) Exchange earner foreign currency account

c) Resident foreign currency domestic account

d) Resident foreign currency account.

Answer: d) Resident foreign currency account.

26. The rate of interest on resident foreign currency deposit

a) domestic savings bank rate on savings bank account

b) its Bank discretion

c) fixed by RBI.

d) linked with London inter banking offer rate linked rate of interest.

Answer: b) its Bank discretion

27. Foreign currency fluctuation risk is born by the customer in

respect of

a) FCNR account b) EEFC account c) RFC – Domestic

d) NRE (rupee account)
Answer: d) NRE (rupee account)

28. Funds lying in EEFC account can be used by the account holder
for

a) advances to overseas importer

 b) giving trade related loans outside India

c) repayment of pre shipment credit

d) b & c only

e) a to c all

Answer: e) a to c all

29. Which among the following amount is allowed to repatriated

under the NRE deposit A/c for NRIs

a) the prinicipal & the interest portion after deduction of tax

b) interest only

c) no repatriation permitted

d) the amount of principal & interest thereon

Answer: d) the amount of principal & interest thereon

30. Upto what extent of debits can be allowed by ADs for

remittance from NRO account of NRI/PIO representing sale of
immovable property:

a) US$ 100000 in a calendar year

b) US$ 100000 in a financial year

c) US$ 1 million in a financial year

d) permission to be obtained by Ads from RBI

Answer: c) US$ 1 million in a financial year

31. Mr Bharat is returning permanently to India from USA after

staying 23 Years & now he wants to retain the repatriation
facility of all the money he has earned & also the pensions
earnings & rent owned by him in abroad from the foreign firm. As
a Banker what will be your suggestion to him & to suit his needs?
 a) FCNR(B) account b) RFC (D) account c) RFC account
d) any of the above

Answer: c) RFC account

32. Which of the following credits can be credited to NRO account?

a) Telegraphic transfer, currency (self only), demand draft, cheques

b) rent, dividends earnings in India

c) sale proceeds of assets including immovable property.

d) all of the above.

Answer: d) all of the above.

33. A person of foreign origin (foreigner) opens an NRO account in

India & below which is not correct:

a) he is on visit in India

b) period of deposit restricted to 6 months

c) the balance in the account can be converted into foreign currency

provided no local credits are credited

d) if account is maintained for more than 6 months RBI permission is

required.

Answer: d) if account is maintained for more than 6 months RBI

permission is required.

34. NOSTRO account means:

a) Foreign currency account of an Indian Bank in India

b) Foreign currency account of an Indian Bank abroad.

c) Foreign currency account of a Foreign Bank

d) Indian currency account of a Foreign Bank.

Answer: b) Foreign currency account of an Indian Bank abroad.

35. The visits by a resident Indian to which of the following
countries are not eligible for obtaining foreign exchange.

a) Iraq & Libiya b) all SAARC countries c) Russian Federation

d) Nepal & Bhutan

Answer: d) Nepal & Bhutan

36. Canara Bank opens a current account with Citi Bank, New York
for its day to day business transaction in US dollars. Which of the
following kinds of accounts, it will be known to Canara Bank?

a) Vostro account b) Nostro account

c) Loro account d) Escrow account

Answer: b) Nostro account

37. Which accounts are called “your account with us”

a) Loro account b) Vostro account

c) Nostro account d) none of the above

Answer: b) Vostro account

38. Current Account full convertibility introduced by RBI on

a) 01.08.1994 b) 08.08.1994 c) 19.08.1994

d)19.09.1994

Answer: c) 19.08.1994

39. Which of the following does not match in case of drawl of

foreign exchange by residents:?

a) Schedule I transaction not permitted

b) Schedule II transaction – permission of Central Government.

c) Schedule III transaction with permission of RBI

d) none of the above.

Answer: c) Schedule III transaction with permission of RBI

40. Foreign currency nonresident (Banks) accounts can be opened

in the name of the following:
 a) non-resident b) Overseas Corporate
bodies

c) none of the above d) a & b both

Answer: a) non-resident

41. A non-resident account cannot be opened by which of the

following:

a) an Indian National gone USA for medical treatment for a longer period

b) as Indian national working with a foreign airline with his base in Hong
Kong

c) an Indian student gone abroad for studies.

d) none of the above.

Answer: a) an Indian National gone USA for medical treatment for a longer
period

42. The foreign exchange risk shall be borne by the bank, in which
of the nonresident account.

a) NRO b) NRE c) FCNR d) All the above

Answer: c) FCNR

43. Joint operation joint account with a resident can be opened by

an NRI (Number 1) in which of the following with clause Number 1
or Survivor.

a) NRO b) NRE c) FCNR d) all the above

Answer: d) all the above

44. An NRI residing in USA has come back to India to settle

permanently, which of the following account would be opened by
him to keep his balance in foreign currency, to earn interest

a) Resident foreign currency account

b) Resident foreign currency Domestic account

c) Foreign currency nonresident account

d) Exchange earner foreign currency account

 Answer: a) Resident foreign currency account

45. Which of the following type of account cannot be opened by a

person resident in India?

a) Resident foreign currency account (D)

b) Exchange earner foreign currency account

c) Nonresident ordinary account

d) All above
Answer: c) Nonresident ordinary account

46. What is the maximum amount that can be deposited in EEFC

Account?

a) 75 % b) 50 % c) 100 % d) 25 %

Answer: c) 100 %

47. What is the maximum limit up to which a resident individual

can make investment under ODI(LRS scheme)?

a) USD 50,000 b) USD 2,50,000 c) USD 2,00,000 d) USD

5,00,000

Answer: b) USD 2,50,000

48. Pre-payment of Import bills permissible without deduction of

interest for unexpired portion of 3 to 4 days.

a) not permitted b) clean rate of interest to

be collected

c) permitted d) upto USD 1,00,000

Answer: c) permitted

49. Power of Branch Managers regarding relaxations of Status

report/OPL of advance remittance under imports of a Importer
with satisfactory operations in a year.
 a) USD 10,000 & cumulative USD 1,00,000

b) USD 10,000 & cumulative USD 50,000

c) USD 10,000 & cumulative USD 75,000

d) none of the above.

Answer: b) USD 10,000 & cumulative USD 50,000

50. How regulates the Foreign Trade Policy in India

a) Reserve Bank b) Ministry of Finance

c) Ministry of commerce d) FEDAI

Answer: c) Ministry of commerce

51. Who regulate the Foreign trade in India?

a) RBI b) DGFT c) FEDAI d) SEBI

Answer: b) DGFT

52. What is the residential status of a student from India having

gone abroad for studies purpose:

a) a person of Indian origin b) a Nonresident

Indian

c) a resident Indian d) a foreign national

Answer: b) a Nonresident Indian

53. An NRI has been issued a credit card by our bank. The balance
drawn by him under the card shall be adjusted by which of the
following:

a) Any one of the below modes.

b) transfer from NRE Account

c) transfer from his FCNR account

d) transfer from his NRO account

Answer: a) Any one of the below modes.

54. If an NRI is having an Nonresident External (Rupee account)
term deposit & return to India

a) the account will continue as till maturity

b) the A/c will be closed treated as domestic deposit

c) the account will be converted as resident foreign currency deposit

d) any of the above

Answer: d) any of the above

55. Transfer between NRO accounts of the same NRI Customer is

a) not permitted

b) freely permitted

c) permitted at the Bank’s discretion

d) none of the above.

Answer: b) freely permitted

56.Amendment to Master Direction (MD) on KYC for OVDs of

NRIs/PIO Customers, branch should obtain the certified copy verified
by any of the following

a) Official of overseas branch of Scheduled Commercial Banks registered

in India,
b) Branches of overseas banks with whom Indian banks have
relationships,
c) Notary Public abroad or Court Magistrate or Judge
d) Indian Embassy/Consulate General of the country
e) Any one of the above

Answer:e) Any one of the above

57.Select the correct option with regards to additional interest rate
for FCNR (B) Deposit

a) 0.50% above the applicable ROI for senior Citizen

b) 1.00% above the applicable ROI for senior Citizen
c) Ex-employee, additional 1.50% above the applicable ROI
d) No additional ROI for Senior Citizens, employee, ex-employee

Answer:d) No additional ROI for Senior Citizens, employee, ex-

employee

58.Prior clearance before accepting/ renewing any FCNR/RFC

deposit of USD 1 million & above (or its equivalent in other
currencies) for fixing the interest ROI, required from

a) Circle Head (through MIPD of respective Circle Office)

b) Forex Dealing room, Integrated Treasury Wing, Mumbai
c) R.O. Head (through MIPD of respective Regional Office)
d) No such permission required

Answer:b) Forex Dealing room, Integrated Treasury Wing, Mumbai

59. Funds flow from the Donor Agencies placed under Prior
Reference Category (PRC), the funds are allowed to be credited into
the account of the recipient only after clearance / prior permission
from the

a) Ministry of Home Affairs, Govt. of India.

b) Ministry of Commerce, Govt. of India
c) Reserve Bank of India
d) Ministry of Corporate Affairs, Govt. of India

Answer: a) Ministry of Home Affairs, Govt. of India.

EXPORTS
1. RBI issues directives on export credit under which of the
following

a) Sec 27 of RBI act

b) Sec 2(v) (i) of Fema Act,1999

c) Sec 23 & Sec 56 of Banking Regulation Act

d) Sec 21 & 35A of Banking Regulation Act

Answer: c) Sec 23 & Sec 56 of Banking Regulation Act

2. Pre shipment credit can be allowed on the basis of which of the

following:
a) letter of credit opened in favour of the exporter or any other person.

b) confirmed or irrevocable order for export of goods.

c) letter of credit opened in favour of an exporter.

d) any of the above.

Answer: d) any of the above.

3. Specific Approval List (SAL) on the exporters is issued by

a) Exim Bank b) RBI c) ECGC d) Ministry of

Finance

Answer: c) ECGC

4. Exporter’s caution list issued by

a) our Bank b) RBI c) ECGC d) none of these.

Answer: b) RBI

5. Restricted cover countries list is issued by

a) our Bank b) RBI c) ECGC d) none of these

Answer: c) ECGC

6. The period of export credit is restricted to:

a) discretion of the bank b) 90 days c) 270 days

d) 360 days
Answer: c) 270 days

7. The pre shipment credit is liquidated out of

a) converting pre shipment into post shipment credit

b) balances in EEFC account
c) proceeds of bills drawn for the export of the same consignment or
other consignments
d) other rupee resources of exporter representing the export has actually
taken place.

a) a & b only b) a, b & d only c) a to d all d) a only

Answer: c) a to d all

8. Running account pre-shipment credit is permitted, which of the

following is correct:

a) period of individual credit not to exceed prescribed 360 days

b) Adjustment is on first in first out basis.

c) Pre-shipment credit can be adjusted from proceeds of those exports for

which pre-shipment credit not availed

d) all of the above.

Answer: d) all of the above.

9. Before discounting the export bill the branch has to verify the

a) Physical copy of the shipping bill

b) physical copy submitted by the exporter to be verified on line in the ICE

c) GATE portal of customs

d) no need to verify the shipping bill

e) none of the above

Answer: b) physical copy submitted by the exporter to be verified on line

in the ICE

10. In the case of ECGC post shipment finance, the ECGC premium
is to be

a) paid by the exporter

 b) paid by the Bank

c) Bank has the discretion to waive the premium basing on the standing
of the party

d) none of the above

Answer: b) paid by the Bank

11. As per FEMA full value of export to be realized ______ from the
date of shipment

a) 6 months b) 9 months c) 12 months d) 18

months
Answer: b) 9 months

12. Export documents to be submitted by the exporters to the

Bank within ---------- from the date of export

a) 7 days b) 15 days c) 21 days d) 30

days

Answer: c) 21 days

13. An exporter of Bharat Commercial Bank receives a letter of

credit issued by a Bank in Singapore for exporting jute bags. The
condition stated in the FLC that exporter can negotiate
documents with Indian Commercial Bank only. This FLc to be
stated as:

a) confirmed letter of credit b) red clause letter of credit

c) back to back letter of credit d) restricted letter of credit

Answer: d) restricted letter of credit

14. All categories of foreign exchange earners are allowed to

credit ____% of their foreign exchange earnings to their EEFC
Accounts.

a) 25% b) 50% c) 10% d) 100%

Answer: d) 100%
15. During the COVID 19 situation RBI notified, period of
realization and repatriation of the export proceeds to India has
been extended from 9 months to __________Months, if export is
made before 31.07.2020

a) 12 months b) 15 month c) 18 month d) 24

month

Answer: b) 15 month

16. Exporters receiving advance payment for long term export

contracts from the overseas buyers can pay interest (interest
bearing advance remittance) on the amount received at LIBOR
(London Inter Bank Offered Rate) at _____

a) LIBOR + 200 bps b) at LIBOR + 400 bps

c) LIBOR + 250 bps d) cannot pay any
interest

Answer: a) LIBOR + 200 bps

17. Exporters having a minimum of three years’ satisfactory track

record are allowed to receive long term export advance up to a
maximum tenor of ........years to be utilized for execution of long
term supply contracts.

a) 5 years b) 10 years

c) 12 years d) no such provision under

FEMA

Answer: b) 10 years

18. Firms / Companies and other organizations participating in

Trade Fair/Exhibition abroad can gift the unsold items to the
extent of USD _____

a) US$ 5000 per exporter

b) US$ 10000

c) US$ 5000 per exporter, per exhibition/trade fair.

d) no such provision.

Answer: c) US$ 5000 per exporter, per exhibition/trade fair.

19. In case of exporters undrawn balance is permitted in certain of
trade up to------of the export value

a) 5% b) 10% c) 25% d) 50% e) not applicable

Answer: b) 10%

20. Reduction in invoice value in normal course is permitted for

exports up to____of export value by an AD – category 1 Bank.

a) 5% b) 10% c) 25% d) 50% e) 100%

Answer: c) 25%

21. In Exports the term ‘Satisfactory track record’ means the

export outstanding do not exceed .......... of the average annual
export realization during preceding three financial years.

a) 25 % b) 10 % c) 5% d) 1%

Answer: c) 5%

22. Self “write-off” by an exporter (other than Status holder

exporter) of unrealized export bills is ....... % of the total export
proceeds realized during the previous calendar year subject to
certain condition.

a) 10 % b) 25 % c) no powers d) 5 %

Answer: d) 5 %

23. The exporters would be caution listed if any shipping bill

against them Remains Open/unpaid for more than ------------ from
the date of export in EDPMS provided no extension is granted by
AD Category –I bank / RBI.

a) 6 months from the date of export b) 1 year from the date of export

c) 2 years from the date of export d) 3 years from the date of export

Answer: c) 2 years from the date of export

24. Request for issuance of guarantees to caution listed exporters

can be done

a) by Banks under the RBI delegated powers

b) can be issued against 100% deposit

c) Banks cannot issue requires RBI prior approval.

d) none of the above

 Answer: c) Banks cannot issue requires RBI prior approval.

25. Where exports are through warehouse cum display centers

abroad, the period of realisation of exported goods is:

a) 15 months b) 6 months c) 12 months d) no time

limit

Answer: a) 15 months

26. Pre shipment credit in foreign currency allowed at ...........

related interest rates.

a) EURIBOR b) LIBOR c) EURO LIBOR d) any of the

above.

Answer: d) any of the above.

27. If an Indian company wants to open office overseas, the AD-

category 1 Banks can permit remittance for normal business
expenses up to .........% of average turnover of previous 2 years.

a) 20 % b) 5 % c) 10 % d) 15 %

Answer: c) 10 %

28. If an exporter requests for change of the buyer, the AD

Category – 1 bank can allow, provided (a) there is no reduction in
value (b) reduction in value is restricted pto 25 % (c) the
realisation take place within original 9 months from the date of
export. d) The exporter is not in the caution list of RBI.

a) a only b) b only c) b & c only d) b, c & d

only

Answer: d) b, c & d only

29. RBI has delegated powers to AD Category – 1 Banks to extend

the period of realisation of export proceeds beyond stipulated
period (presently 9 months) from the date of export, upto a
period of .......... months at a time (first extension request)
irrespective of the invoice value.

a) 12 months b) 6 months c) 3 months d)

180 days

Answer: b) 6 months
30. Customs office returns to the exporter which copy of export
declaration form

a) currency control copy b) trade control copy

c) export declaration copy d) exchange control

copy

Answer: d) exchange control copy

31. The export declaration form used for software export (in
triplicate)in nonphysical form is:

a) COD b) Software declaration form c) Softex

d) EDF
Answer: c) Softex

32. An Exporter M/s Trueback India receives a confirmed export

order, as per terms of the sale agreement goods are to be
delivered to the shipping company without putting the goods on
board the ship & now which of the kind of incoterms 2010 can be
termed as putting the goods by the side of the ship in the yard.

a) Ex- works b) Free on board c) CIF d) FAS

Answer: d) FAS

33. A company dealing in rough or cut or polished diamonds,

wants to open diamond dollar accounts & what is the maximum
no of accounts the company can open.

a) single account only b) 4

accounts

c) 3 accounts d) 5 accounts

Answer: d) 5 accounts

34. An exporter has approached a Banker to open a EEFC account

to deposit the exchange earnings. Which account would you
suggest to the exporter.

a) term deposit account

b) escrow account

c) current account

d) any of the above account without payment of interest thereon.

 Answer: c) current account

35. The SWIFT security control to prevent automatic changes

during transmission is Called

a) encryption b) checksum

c) key authentication d) decryption

Answer: b) checksum

36. Customers who deals with international business are expected

to obtain Import export code. Which authority issues the code:
a) by any Nationalised Bank b) EXIM Bank

c) RBI d) Director General of Foreign

Trade.

Answer: d) Director General of Foreign Trade.

37. For delinking the export bill the rate to be applied is

(Crystallisation)

a) TT selling rate b) bill selling rate

c) Bill buying rate d) TT buying rate

Answer: a) TT selling rate

38. Export Letters of Credit (EOLC’s) can be processed and advised

to the Export Customers by

a) Only Vostro Section, Integrated Treasury Mumbai

b) Foreign Department

c) Designated branches

d) FDs, Designated branches and Fex cells.

Answer: d) FDs, Designated branches and Fex cells.

39. Listed country means that

a) Exports cannot be made to that country

 b) Exports to be made with prior permission from RBI

c) Exports bills may be realized with time delay

d) Exports to that country (which is having balance of payments problem)

shall be made with prior permission.

Answer: d) Exports to that country (which is having balance of payments

problem) shall be made with prior permission.

40. An exporter should have:

a) The ways & means to actually export the goods

b) Importer/Exporter code number assigned

c) An export order or LC in his name.

d) All the above conditions should be satisfied.

Answer: d) All the above conditions should be satisfied.

41. Payment under reserve means

a) Payment will be made after getting confirmation from the LC issuing

banker

b) When export documents under LC are discrepant, payment is made

against indemnity.

c) Payment made under protest.

d) None of the above.

Answer: b) When export documents under LC are discrepant, payment is

made against indemnity.

42. SDF means

a) State development forum b) Special discount

form

c) Statutory Declaration form d) None of the

above.

Answer: c) Statutory Declaration form

43. Valuation of Computer software through satellites links will be
done by officials of:

a) RBI

b) Financing Bank

c) DGFT

d) Department of Electronics, Government of India.

Answer: d) Department of Electronics, Government of India.

44. The ostensible date of delinking for demand or sight bills:

a) 15 th day after the expiry of transit period normally allowed.

b) 15 plus 3 grace days from the date of negotiation of bill

c) 15 days maximum from the expiry of the NTP.

d) 15 days from the expiry of the normal transit period.

Answer: d) 15 days from the expiry of the normal transit period.

45. The ostensible date of delinking for usance bill is:

a) 15 th day from the acceptance of the bill

b) 15 th day from the actual date after DA period

c) 15 plus 3 days from the actual due date after DA period.

d) 15 th day from the actual due date / notional due date of bill (if actual
due date is not received.

Answer: d) 15 th day from the actual due date / notional due date of bill
(if actual due date is not received.

46. Select correct answer regarding revised RBI guidelines of

Caution listing of exporter

a) Any shipping bill pending more than 2 years

b) Auto caution listing through EDPMS for default more than 2 years
c) caution listed /de-caution listed as per recommendation of AD Bank
 d) Once related bills are realized/closed than auto de-cautioned listing

Answer:c) caution listed /de-caution listed as per recommendation of

AD Bank

47. Bill drawn on DP/At Sight Basis and not under Letter of Credit
(LC) for Bills in Rupees, the normal transit period (NTP) will be

a) 15 days
b) 20 days
c) 25 days
d) 30 days

Answer:b) 20 days

48. Period for TT reimbursement under Letters of Credit(L/C) where

L/C provides for reimbursement by electronic means

a) 3 days
b) 5 days
c) 7 days
d) 10 days

Answer:b) 5 days

49. Select the incorrect option. The exporter may be caution listed
based on the recommendation of AD bank in the matter -

a) Exporter has come to the adverse notice of ED/CBI etc.

b) Case where Exporter is not traceable
c) Exporter is not making any serious efforts for realization of export
proceeds.
d) Auto caution listing by RBI, no recommendation from AD bank.

Answer: d) Auto caution listing by RBI, no recommendation from AD

bank.
 IMPORTS

1. Merchandise which can be imported into India, eligibility of

importers is governed by Foreign Trade Policy, which authority
notifies under Section 5 of Foreign Trade Act, 1992

a) Director General of Foreign Trade

b) Export Import promotion council

c) Government of India, Ministry of Commerce & Industry

d) None of the above

Answer: c) Government of India, Ministry of Commerce & Industry

2. Which Authority is responsible for formulating & execution of

Foreign Trade policy including licensing.

a) Reserve Bank of India b) Director General of Foreign Trade

c) FEDAI d) none of the above

Answer: b) Director General of Foreign Trade

3. Which Authority Issue Importer-Exporter code no

a) Export-Import promotion council b) Indian Chamber of

Commerce

c) DGFT d) Reserve Bank of India

Answer: c) DGFT

4. As per RBI guidelines import bill payment has to be settled by the

importer in India

a) 3 months from the date of shipment

b) 3 months from the date of receipt of goods in to India

c) 6 months from the date of shipment

d) 6 months from the date of receipt of goods in to India.

Answer: c) 6 months from the date of shipment

5. When the importer submits the original/Xerox copy of Bill of Entry
the same has to be verified by the branch

a) physical copy with a customs seal and stamp

b) no physical copy only on line verification to be done

c) need not be done as RBI has exempted submission of bill of Entry

d) in the BOE settlement file, duly linking the same to outstanding

outward remittance message (ORM)

Answer: d) in the BOE settlement file, duly linking the same to

outstanding outward remittance message (ORM)

6. As per RBI, Banks can extend time up to …… for payment of

import bills

a) upto 12 months from the date of shipment

b) up to 18 months from the date of shipment

c) up to 24 months from the date of shipment

d) up to 36 months from the date of shipment.

Answer: d) up to 36 months from the date of shipment.

7. In case of advance remittance for imports other than capital

goods the physical import of goods should be made within

a) 3 months from the date of remittance

b) 6 months from the date of remittance

c) 3 years from the date of remittance

d) no restriction in the period.

Answer: b) 6 months from the date of remittance

8. In case of advance remittance towards capital goods within how

many days the importer should produce bill of entry.

a) within a period of 3 months & 15 days

 b) within a period of 6 months & 15 days

c) within a period of 3 years & 15 days

d) within a period of 12 months & 15 days.

Answer: c) within a period of 3 years & 15 days

9. For permitting advance remittance for import for a customer, the

Customer should be having satisfactory dealing with our Bank for
a period of

a) 6 months

b) 3 months
c) 1 year

d) no restriction on the period only satisfactory dealings.

Answer: c) 1 year

10. Import of above USD 1,00,000 on sight basis the importer to

submit the appropriate documentary evidence viz, exchange
control copy of bill of entry (proof of import) to the Authorized
dealer Category 1 Banks by the importer_______

a) within 3 months from the date of remittance

b) 6 months from the date of remittance

c) no need to submit as RBI has exempted

d) 12 months from the date of remittance

Answer: a) within 3 months from the date of remittance

11. Letter of credit (LCs, also known as Documentary credits) are

governed by provisions of ……… …. set by International
Chamber of Commerce(ICC) Paris

a) ISBP b) eUCP c) UCPDC d) URR 725

Answer: c) UCPDC
12. Uniform Customs & Practice for Documentary Credits, 2007
Revision, ICC Publication 600 operative from

a) 4th July,2007 b) 1st July,2007

c) 2 nd July,2007 d) 3 rd July, 2007

Answer: b) 1st July,2007

13. Uniform Customs & Practice for Documentary Credits 600 are
rules that apply to:

a) all Foreign LCs only

b) all LCs

c) any LC where the text indicates that it is subject to this rules.

d) any LC in which these have not been restricted to be applicable.

Answer: c) any LC where the text indicates that it is subject to this rules.

14. Under UCPDC – 600, the documents to be presented by or on

behalf of the beneficiary for payment, not later than …. after the
date of shipment, but not later than the expiry date.

a) 21 calendar days b) 21 business days

c) 21 banking days d) 21 working days

Answer: a) 21 calendar days

15. As per Incoterms 2010, the seller delivers the goods & pays
the Freight.

a) FOB b) CIF c) C & I d) CFR

Answer: d) CFR

16. An LC is issued in favour of the ultimate supplier of

beneficiary, on request of the beneficiary on the strength of the
original LC.
a) Irrevocable LC b) Confirmed Lc

c) Red Clause LC d) Back to Back LC

Answer: d) Back to Back LC

17. An LC provides for pre shipment credit as well as warehouse

storage of goods,
 It called as:

a) Standby LC b) Green clause LC

c) Revolving LC d) Red clause LC

Answer: b) Green clause LC

18. M/S Vishal Export House receives a letter of credit for export of
jute Bags to US but the expiry date of the credit is 15th August,
Tuesday. In this case the documents for negotiation can be
submitted to the negotiating bank on:

a) the preceding business day b) the succeeding business day

c) the succeeding banking day d) the preceding banking day

Answer: c) the succeeding banking day d) the preceding banking day

19. In case of import calling for Lloyds certificate is applicable

where

a) individual shipment is above 30 lakhs

b) individual shipment is above 10 lakhs

c) individual shipment is above 15 lakhs

d) none of the above.

Answer: c) individual shipment is above 15 lakhs

20. In case of import calling for SGS certificate (pre shipment

inspection) is applicable where

a) individual shipment is above 30 lakhs

b) individual shipment is above 10 lakhs

c) individual shipment is above 15 lakhs

d) none of the above.

Answer: a) individual shipment is above 30 lakhs

21. As per Foreign exchange Regulation Importers can receive
import bills directly from the overseas supplier up to a value of
USD does not

a) USD 5,00,000 b) USD 2,00,000

c) USD 3,00,000 d) cannot receive import bills

directly.

Answer: c) USD 3,00,000

22. In view of outbreak of COVID-19 pandemic, RBI extended time

period for completion of remittances against normal imports has
been extended from ___months to _____months, if shipment of
such import is made before 31.07.2020
a) 6,9 b) 6,12

c) 9,12 d) 12,15

Answer: b) 6,12

23. Advance remittance for imports exceeding ……… branches

should obtain an unconditional, irrevocable standby letter of
credit or a guarantee from an international repute situated
outside India, or a guarantee of an Authorized Dealer Category I
Bank in India.

a) USD 50,000 or its equivalent b) 2,00,000 or its equivalent,

c) USD 1 Million d) USD 10,000

Answer: b) 2,00,000 or its equivalent,

24. As per the article 14 (b), of UCPDC (uniform Customs and

Practices for Documentary Credits) a nominated bank acting on
its nomination, a confirming bank, if any and issuing bank shall
each have a maximum of ------ banking days following the day of
presentation to determine, if a presentation is complying.

a) 7 Banking days b) 10 Banking days

c) 5 Banking days d) 14 Banking days

Answer: c) 5 Banking days

25. Submission of Bill of Entry (BEF) statement to RBI by the Banks

a) once in six months in June and Dec

b) once in a year (March 31st)

 c) discontinued

d) once in six-month Mar and Sep

Answer: c) discontinued

26. Import bill to be delinked at

a) bill buying rate b) TT selling rate

c) bill selling rate d) TT buying rate

Answer: c) bill selling rate

27. Form A1 is used for obtaining foreign exchange

a) for import payments b) for amount upto US$ 5000

c) for remittance other than imports d) it is discontinued.

Answer: d) it is discontinued.

28. As per foreign exchange trade, suppose days 1, 2, 3 and 4 are

all working days. If day 4 is declared as a holiday on day 1, it will
be called as
a) a suddenly declared holiday.
b) a known holiday
c) a normal holiday
d) a normal working day

Answer:a) a suddenly declared holiday.

29. As per foreign exchange trade, suppose days 1, 2, 3 and 4 are all
working days. If day 4 is declared as a holiday prior to day 1, it will be
called as
a) a suddenly declared holiday.
b) a known holiday
c) a normal holiday
d) a normal working day

Answer:b) a known holiday

 CURRENCY RATE/QUOTATIONS & MISC

1. Purchase transactions by banks in the context of foreign

exchange means:

a) converting rupees into foreign currency.

b) converting foreign currency into rupees.

c) converting rupees into pounds.

d) selling currency to customers.

Answer: b) converting foreign currency into rupees.

2. In respect of sale or purchase of foreign exchange, which

following principles would be followed, when we are quoting
direct rate.

a) sell low buy low b) sell low

c) buy high d) buy low sell high

Answer: d) buy low sell high

3. The forward rate of dollar being quoted by a dealer at a premium.

Among the following who will be benefited.

a) exporters b) merchant importers

c) software importers d) all of the above

Answer: a) exporters

4. An exporter M/s Vishal Trading submits an export bill in US$ for

negotiation under letter of credit. As a dealer which rate you will
apply.

a) Bills buying rate b) TT buying rate

c) TT selling rate d) Bills selling rate

Answer: a) Bills buying rate

5. Which of the following methods applied for quoting the foreign
exchange rates in India?

a) Cross rates b) Indirect rate

c) Interbank rate d) Direct rate

Answer: d) Direct rate

6. An establishment is authorized by RBI for dealing in purchase & sell of

foreign traveler cheques & foreign currency notes from/to the foreign
tourist.

a) Authorized dealer b) Authorized money changer

c) Full-fledged money changer d) Authorised authority money

changer

Answer: c) Full-fledged money changer

7. An exporter M/s Singhania Agencies approaches to an Authorized

dealer for negotiation of a document under Documentary letters
of Credit in EURO. It will be categorized as.

a) negotiation transaction b) purchase transaction

c) sale transaction d) arbitrage transaction.

Answer: b) purchase transaction

8. When the future value of a currency is lower than the spot value,
the currency is said to be in.

a) at par b) premium c) discount d)

none of the above

Answer: c) discount

9. As per RBI requirements all the ECB (External Commercial

Borrowings) raised by the customers are to be

a) Compulsorily hedged up to 100% of the borrowing including interest

b) partial hedging permitted at the discretion of the bank

c) RBI approval to be obtained for waiving the hedge

d) Banks can permit waiver depending on the standing of the party

 Answer: a) Compulsorily hedged up to 100% of the borrowing including
interest

10. Associations/trusts receiving donations from abroad under

FCRA (Foreign Contribution Regulation act has to register with
which Authority.

a) Ministry of finance b) Ministry of Home

affairs

c) Ministry of Communication d) Ministry of External

affairs

Answer: b) Ministry of Home affairs

11. The foreign exchange market in India operates daily (except
Saturday and Sunday) from

a) 8 am to 1 pm b) 9 am to 6 pm

c) 10 am to 4 pm d) 9 am to 5 pm

Answer: b) 9 am to 6 pm

12. A “over bought” position in foreign exchange of a Bank

denotes

a) When the sale of foreign exchange is more than the purchase

b) when purchase of foreign exchange is more than the sales

c) when the Bank Treasury borrowers from abroad

d) When the Bank borrowers from RBI in foreign currency

Answer: b) when purchase of foreign exchange is more than the sales

13. Masala Bonds are the bonds

a) bonds raised by Indian Masala Traders for funding their business in

India

b) Foreign currency bonds raised by Indian Corporates in India

c) Rupee denominated bonds raised in Overseas by the Indian Corporates

d) Foreign currency bonds raised in Indian Corporates abroad

 Answer: c) Rupee denominated bonds raised in Overseas by the Indian
Corporates

14. The imports into a country are more than the exports of goods
& services from the country, this will directly effect to:

a) balance of payments b) balance of

currencies

c) balance of trade d) balance of foreign

exchanges

Answer: c) balance of trade

15. When the delivery under a forex deal is completed on the next
working day from the date of the contract, the rate is
a) spot rate b) Forward rate

c) ready or cash rate d) Tom rate

Answer: d) Tom rate

16. Foreign currency rates are declining compared with Indian

currency. Which category will be benefited for this movement of
rate.

a) Exporters b) both exporter & importer

c) Importer d) banks having long

position.

Answer: c) Importer

17. Canara Bank opened a current account with Wachovia Bank in

New York for its daily transaction in US $. Which of the following
kinds of accounts, it will be known for Canara Bank as?

a) Loro Account b) Mirror account

c) Nostro account d) Vostro account

Answer: c) Nostro account

18. From Bank’s angle, when there is inflow of foreign exchange &
outflow of rupees, these transactions are called

a) sales b) Inward remittances

c) Outward Remittances d) both a & c above

Answer: b) Inward remittances

19. A spot contract shall be deliverable on

a) deliverable on the same day

b) on the working day immediately succeeding the contract date.
c) Second succeeding working day following the contract date.
d) Third succeeding working day following the contract date

Answer:c) Second succeeding working day following the contract date.

20. When expiry date of an option contract falls on a “known

holiday”, expiry date is

a) pre-poned to the previous working day.

b) Post poned to the next working day.
c) Option contract treated as invalid.
d) One day after next working day.

Answer:a) pre-poned to the previous working day.

21. Priority sector Export Credit (other than in Agri & MSME):
Incremental export credit over corresponding date of the preceding
year, up to 2 per cent of ANBC or CEOBE whichever is higher,
subject to a sanctioned limit of up to

a) ₹ 20 Crore per borrower

b) ₹ 40 Crore per borrower
c) ₹ 60 Crore per borrower
d) ₹ 100 Crore per borrower

Answer: b) ₹ 40 Crore per borrower