Sunday, January 27, 2013

BANKING RELATED STATEMENTS


 “T” represents “True” and “F” represents “False”

1. The damage payable in the case of wrongful dishonour of a cheque depends upon the amount of the cheque. (F)

2. Maintenance of secrecy of a customer’s account is an absolute obligation. (F)

3. When the funds are deposited for a specific purpose, the banker becomes a trustee. (T)

4. The Law of Limitation runs from the date of the deposit. (F)

5. A banker can exercise his particular lien on the safe custody articles. (T)

6. A negative lien does not give any right of possession to the creditor. (T)

7. The banker has a statutory obligation to honour customers bills. (F)

8. To constitute a person as a customer, there must be a single transaction of any nature. (F)

9. A current account can be opened in the name of a minor. (T)

10. Probate is nothing but an official copy of a will. (T)

11. A guarantee given by an adult in respect of a minor’s debt is valid. (F)

12. An account can be opened in the name of a partner on behalf of a firm. (F)

13. The duty of a banker is over as soon as particulars regarding creation of charges are sent to the Registrar within 30 days of their creation. (T)

14. Contracts by lunatics in India are always void. (F)

15. The most undesirable customer is an undischarged bankrupt. (T)

16. Account payee crossing restricts the transferability of a cheque. (F)

17. Any holder of a cheque can cross it. (T)

18. A general crossing cannot be converted into a special crossing. (F)

19. Two parallel transverse lines are not essential for a special crossing. (T)

20. Double crossing, except for the purpose of collection is not valid. (T)

21. The safest form of crossing is general crossing. (F)

22. A cheque which is not crossed is called a bearer cheque. (F)

23. The cancellation of crossing is called opening of crossing. (T)

24. Account payee crossing is a direction of collecting banker. (T)

25. Endorsement is a must for a bearer cheque. (F)

26. A bearer cheque will always be treated as a bearer cheque. (T)

27. In sans frais endorsement, the endorser waives some of his rights. (F)

28. The endorser can be made liable only if he is served with a notice of dishonour. (T)

29. Assignment includes the assumption of liability. (F)

30. Partial endorsement is not valid. (T)

31. There is a statutory obligation on the part of a banker to give reasons while dishonouring a cheque. (F)

32. A Garnishee order can not attach a foreign balance. (T)

33. Any holder can count term and the payment of cheque before it is presented for payment. (F)

34. Payment made outside the banking hours does not amount to payment in due course. (T)

35. Statutory protection as given under Section 85 is not available to a bearer cheque. (F)

36. When the amount stated in words and figures differ, the banker can honour the smaller amount. (F)

37. When a Garnishee order is issued by the court attaching the account of the customer, the banker is called Garnishor. (F)

38. The statutory protection is available to a collecting banker only when he acts a holder for value. (F)

39. It is the duty of a collecting banker to note and protect a foreign bill, in case, it is dishonoured. (T)

40. The banker’s rights as a holder for value is similar to that of a holder in due course. (T)

41. The wrongful interference with the goods of another is called “mutilation.” (F)

42. If a banker takes a cheque as an independent holder by way of negotiation he cannot get statutory protection. (T)

43. Mortgage of Movables is called pledge. (F)

44. Advances against guarantees are secured loans. (F)

45. The extended of pledge is a case of hypothecations. (T)

46. Business people generally prefer a legal mortgage to an equitable mortgage. (F)

47. No right of sale is available in the case of conditional mortgage. (T)

48. An equitable mortgage can be created in respect of real estate. (T)

49. The most risky charge from a banker’s point of view is pledge. (F)

50. Bill of lading is a quasi-negotiable instrument. (T)

51. Banker’s receipt is issued in respect of goods deposited with the bank. (F)

52. Goods can be released before the repayment of the loan against trust receipts. (T)

53. Loans can be granted on the face value of a life policy. (F)

54. Garnishee order is issued by the court on the request of the debtor. (F)

55. ATM permits a depositor to withdraw and deposit money any time he likes. (T)

56. While appropriating payments, the money received is to be first applied towards payment of principal and then towards interest. (F)

57. In India the rules regarding appropriation of payments have been given in the Negotiable Instruments Act. (F)

58. In case of a multi-deposit scheme, a deposit may withdraw the money required without breaking his entire deposit. (T)

59. A banker has a right to retain the securities for any number of years till the loan is repaid. (T)

60. A banker’s lien is not barred by the Law of Dimitation. (T)

61. A banker is given a special privilege of charging compound interest. (T)

62. Industrial banks help industries by supplying them short-term credit. (F)

63. Land Development Banks grant short-term loans to farmers. (F)

64. Bank creates money. (T)

65. The volume of bank credit depends on the cash reserve ratio the banks have to keep. (T)

66. Unit banking system is most suitable to India. (F)

67. Branch banking system originated in U.S.A. (F)

68. One of the main objectives of nationalisation of banks was to extend credit facilities to the borrowers in the so far neglected sectors of the economy. (T)

69. Narasimham committee strongly recommended the introduction of computerisation in banks. (T)

70. Money market is the market for long-term funds. (F)

71. Capital market deals in capital goods. (F)

72. Investor protection is assigned to stock exchange. (F)

73. Capital Issues Control Act, 1947 has been abolished. (T)

74. SEBI is to protect the interest of investors. (T)

75. SEBI has no role in the working of stock exchanges. (F)

76. SEBI is authorised to control capital market. (T)

77. Capital market helps in improving investment environment. (T)

78. Stock market is the constituent of capital market. (T)

79. Capital market is concerned with the working of financial institutions. (T)

80. Preferential allotment permitted along with right issues. (F)

81. A banking company cannot advance against own shares. (T)

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