Mid-Term Banking Exam- 2010-11 Suggested Answer

8/4/2019 Mid-Term Banking Exam- 2010-11 Suggested Answer

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Q 5. There are two modesof delivery of documentsmadebya banker to the drawee ina bill transaction,knownasthe tenor of the bill in bankingparlance.What are those?My Answer is : J ) f ~ ])AQ 6. In countries like USA and Japan, issue of bank guarantee is prohibited, instead the banks thereissueaspecific type of Letter of Credit for this purpose.Namethis Letter of Credit?

~UM~~~ ~ye.b 1 c -My Answer is: .Q 7. The act of the borrower of using short term funds for long term use is popularly knownin bankingparlanceas ?My Answer is :Q 8. Write the expression for Tangible Net Worth (TNW) ?My Answer is : TN W - = = - l \ . . r f A ) - L-Q 9. Namethe policy rate at which RBI drains out excess liquidity from the CommercialBanks?MyAnsweris: 6LQ}ljt.{~ R~ y~e....-.Q 10. ExpandBCSBI? r { } S ~ ~0Jtt 1 OJ'( ciA g (J cvY'~My Answer is: (l, ~i~~Q 11. SLR,a legal reserve to bemaintainedby eachscheduledcommercialbank, is as per whichact?My Answer is: (1 P v . f t c . J ~ ' 9 ~ ~ .Q 12. A customer maintains a safe deposit locker with a bank.What is the banker-customer relationshipin this case?My Answer is :Q 13. Narashimam Committee recommendationsrelate to which area of the banking?My Answer is: (l,~. " i ~ e.c . . 4 - - - u r - ~~lrr(w.Q 14. ExpandKYC and AML ?

My Answer is: ~_~ ~t~


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STUDENrs NAME: SECTION ROLL #Q 15. What are chargeable current assets?My Answer Is: I> '-VvvJ - t (~.J.J.,Q 22. What is the maximum period for which a Term Deposit is accepted at present?My Answer is : 1 - 0 ~~ .Q 23. What is the appropriate mode for creating a charge on a Debt Security like Life Insurance Policyby a lending banker?My Answer Is: 4 ~ s .- [ l Y - ~Q 24. For loans facilities given to a Company, Banks are required under law to register a charge onthe assets of the Company. This charge is to be registered with whom?

RC)~y Answer is :


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::4 ::Q 25. What is the appropriate mode for creating a charge on a Immovable Property?My Answer is : M - 0 1 *~~ LQ 26. For loans facilities given to a Company, what is the time limit (from the date of creation ofcharge) for registration of charge on the assets of the borrowing company?My Answer is : . . 3 0 ~f.Q 27. Supply bill finance is a Secured or Unsecured Credit facility?My Answer is : O~ ~CJ.)Jf.(L~Q 28. Name the regular working capital credit facility in which the borrower is allowed to overdrawup to a pre-specified limit.

~~ el~l.t (k-My Answer is :Q 29. In a Bank Guarantee transaction, how many underlying contracts are there?My Answer is :Q 30. Name the organization that is dedicated to Export Credit Risk Insurance to both Exporters andExport Financing Bankers.

. r;::: ~ e ~ ik~My Answer IS : L- 9Q 31. In a transferable LC,who has the right to transfer the credit, part or full, in favour of anotherparty: the LCadvising bank, LCopening bank or the Beneficiary?

f\ _..nJL;I'.'~My Answer is : 6,j ~ lA aQ 32. Expand UCPDC in the context of International Trade Finance. 1 . " < /MyAnsweris: ~~'p'6"VVv ~f\.\S ~ f..ac .:h 'c .Jc J T" ~w~~Q 33. What is the threshold limit for the annual sales turnover for a non-corporate entity for therequirement of audited financial statements?

My Answer is : ~ I G o ~ O J K . iv .Q 34. In a Cash Credit facility the drawings in the account are regulated/monitored by twoparameters. What are those?My Answer is :

(Desirable time limit 35 minutes) [Total marks 34 x 0.5 = 17 marks]


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::5::STUDENrs NAME: SECTION: ROLL #

Q 35. Classify the following accounts into one of the following categories: (a) assets (b) liabilities (c)equity (d) revenue (e) expense (f) Off-Balance Sheet (OBS) activity. Give your answer by writing thecategory code (a, b, c. d. e or f) after the hyphen in each case.(1) Retail Deposits - ~ 1 (2) Paid-up-capital- ~ (3) LoanCommitments- f -(4) Consumer loans- o: (5) Interest on Investment securities- o L(6) Interest onSavings Bank Deposits- e: (7) Current Deposits- . . b(8) Letter of Credit- t - (9) Retained earnings- C .(10) Provision on NPA Loans- f ! . .. - ;(Desirablet ime limit 5 minutes) [Total marks 10 x 1 = 10 marks]

(Part - B/Numerical Questions)Q 1. If you know the following figures for M IS X YZ B ank :

Name of the items Amount Rs.

Total interest Income 290Total interest expenses 205Total non-interest income 27Total non-interest expenses 40Provision for loan losses 1 0Income taxes 15Dividends to common stockholders 1 1

Total Assets 3,000Earning Assets 2,500Total Liabilities 2,700


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******* Space for Answer to Q No.2/The Income Statement *******

Head of AccountSchedule No.I Schedule No./ Amount in Rs.mount in Rs.

Head of Account

\1 -i- .., f'LL. t 8- cr-t.J:-O' 2 . 1 ,s e-e

**************************TheEnd*******************************


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For XYZ Bank, calculate:(i) Net interest income (NIl)

My Answer is :(ii) Overhead or Burden (aka Net non-interest income)

My Answer is : r-- l~(iii) Operating Profit

My Answer is :(iv) Net income after taxes (PAT) ~ :f

My Answer is: A(v) Total operating Income (revenues)

My Answer is :

(vii) ROAMy Answer is : ~

, ~ ~ fit CJt /

(vi) Net Interest Margin (NIM)My Answer is : ---?" , . g

(viii) ROEMy Answer is :

(ix) EM (Equity Multiplier) 1 .oMy Answer is: ~

( x) AU (Asset Utilisation)My Answer is : - - - 3 Y '(xi) NPM (Net Profit Margin) ~ \'" ~j t J l DMy Answer is: --- / 1 7

(Desirable time limit 25 minutes) [Total marks 11 x 1 = 11 marks]


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STUDENrs NAME: SECTION: ROLL# 11- M c 0 h .ectO\/)Q 2. Label each item into one of the Income Statement categorieJ bcsed on Schedule No.13 to 16. Then Prepare a consolidated/aggregated Income Stctement based on the 4schedules (Sch. 13 - 16) and determine the bank's bottom-line net income. Only one table isrequired showing the aggregate figures for all the 4 schedules and net income (profitafter tax). (Put your Label)

.. ~ I~' E4 rr~). Interest paid on Term deposits Rs.100,OOO/- . . t o ~ >b. Interest paid on Certificate of deposits Rs.101,000/- ~ r.-vJ:. i ~ t ' - 2 \c. Interest received on GOI Securities Rs.44,500/- > 1. ~ ~d. Fees received on selling of insurance and mutual funds RS.23,000/-~. o * , f t l r 1~~.e. Dividends paid to Shareholders of RS.0.50 per share for 5,000 shares ~ ~''-b'' I!jf. Provision for loan losses/NPA provision Rs.18,000/-. Q ' > ~~~(No. .s c W \~ .p~g. Interest and discount on loans Rs.1,89,700/-.... > . ~ rJc, 't~~Ct~) yrLo1D {)h. Interest paid on SB accounts Rs.33,500/- e > lvJv, E~. {t~ ~I. Interest received on Corporate/PSU bonds Rs.60,000/- ~ y~. lV\.~O~jj. Employees salary and benefits Rs.1,45,000/- ---7 ~ ~! E '>Lf. C J - ' )k. Purchase of a new Computer system Rs.50,00%:fDe~reciation for the current year

Rs.10,000/-) ~~~~ R h ' r ~I r tiW f - ~ . () .D ,I. Service charge/commission receipts from cJstomer accounts Rs.41,000/- , . 1 . 1 - )m. Occupancy expenses for the bank building Rs.22,000/- L~ 4 . w . : r III~ ,~n. Taxes of 34/'o of taxable income are paid ~ / fip. 'C -1L ' 1o. Safe Deposit Locker rent receipt Rs.15,000/- _ ~ 7 " - P ~ . . lr J ~& .~ u :

'~~~Q/f 1 ~ c ~ (Desirabletime limit 20 minutes) [Total marks 12 marks]

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Mid-Term Banking Exam- 2010-11 Suggested Answer

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