Regulations Relating to Banks MCQs with Answer in pdf

Regulations Relating to Banks MCQs with Answer in pdf

The banking industry is highly regulated and complex, with regulations that govern the activities of banks in order to protect customers and ensure the stability of the financial system.

Regulations relating to banks have evolved over time and in different countries, but they all have a similar objective – to ensure that customers are protected from fraud or economic disruption.

This article will explore some of the key regulations relating to banks, including those pertaining to capitalization, liquidity, lending practices, risk management and customer protection.

What is Regulations Relating to Banks ?

Regulations Relating to Banks are policies and rules that govern the operations of banks. These regulations exist to ensure that banks operate within a set of standards, practices, and procedures.

Compliance with these regulations is essential for maintaining financial stability and promoting trust in the banking sector.

Regulations Relating to Banks vary from country to country, but they generally cover areas such as capital adequacy requirements, liquidity management, risk management, customer protection, and anti-money laundering measures.

Adherence to these regulations is monitored by regulatory bodies such as central banks or financial regulatory agencies.

In recent years, there has been an increased focus on Regulations Relating to Banks due to high-profile scandals involving unethical behavior by some institutions.

The implementation of stricter regulations aims to prevent similar incidents from occurring in the future and protect consumers’ rights.

Regulations Relating to Banks

50 Regulations Relating to Banks with Answer in pdf

1. ___ is a transaction by which there may be a change (either increase or decrease) in the assets or liabilities outside India of person’s resident in India or assets or liabilities in India of person’s resident outside India.
Ans. Capital account transaction

2. ___ means a right of one person to retain possession of some goods belonging to another until some debt or claim of the person in possession is satisfied.
Ans. Lien

3. The right of set-off is also known as the right of ___ of accounts.
Ans. Combination

4. FEMA permits only authorised persons to deal in foreign exchange or foreign security. (True/False)
Ans. True

5. An authorised person shall, undertake any transaction in foreign exchange on behalf of any person. (True/False)
Ans. True

6. An authorisation granted by Reserve Bank cannot be revoked by the Reserve bank at any time. (True/False)
Ans. False

7. A ___ for the arrest of the defaulter may be issued by the adjudicating authority if he is satisfied, the defaulter is likely to abscond or leave the local limits of the jurisdiction of the adjudicating authority.
Ans. Warrant

8. Every appeal must be made within ___ from the date on which the copy of the order made by the adjudicating authority is received by the aggrieved person.
Ans. 45 days

9. ___ is a breach of the provisions of the Foreign Exchange Management Act (FEMA), 1999 and rules/regulations/notification/orders/ directions/circulars issued there under.
Ans. Contravention

10. The Appellate Tribunal shall consist of a ___ and such number of members, as the Central Government may deem fit.
Ans. Chairperson

11. The enforcement directorate has its headquarters at New Delhi with ___ Zonal offices across the country.
a) Seven b) Six
c) Five d) Four
Ans. a) Seven

12. The Zonal offices are headed by ___.
Ans. Deputy Directors

13. Under the Conservation of Foreign Exchange and Prevention of Smuggling Activities Act, ___, the directorate holds power to process and recommend cases for detention of habitual offenders.
Ans. 1974

14. Power to examine persons as per provisions of the Income Tax Act,___.
Ans. 1961

15. In ___ banker does not get the right to retain any assets of the borrower.
Ans. Negative lien

16. Section 17I of the Indian Contract Act, ___ confers the right of general lien.
a) 1871
b) 1856
c) 1872
d) 1883
Ans. C)1872

17. The banker can exercise his/her right of general lien over the securities deposited by the customer as a trustee with respect to his/her personal loan. (True/False)
Ans. False

18. No lien is possible where the account is with respect to a trust. (True/False)
Ans. True

19. Banker’s right of lien extends over goods and securities handed over to him/her. (True/False)
Ans. True

20. The banker possesses the right of lien on the documents or valuables left behind by the customer negligently or by mistake. (True/False)
Ans. False

21. A ___ is one which is available to the bailee against only those goods with respect to which he/she has rendered some service involving the exercise of labour or skill.
Ans. Particular lien

22. A ___ is a right to retain all the goods or any property (which is in possession of the holder) of another until all the claims of the holder are satisfied.
Ans. General lien

23. Finder of goods (Section 168) is example of persons with right of particular lien recognised by the Indian Contract Act. (True/False)
Ans. True

24. A lien may be extinguished or lost by abandonment. (True/False)
Ans. True

25. The ___can be exercised with respect to debts due and not with respect to future debts or contingent debts.
Ans. Right of set-off

26. According to Section ___, such right of appropriation is vested in the debtor, who makes a payment to his/her creditor to whom he/she owes several debts.
Ans. Section 58

27. A debtor owes two or more debts to a creditor and he/she pays some amount which is not sufficient to meet any debt to the creditor ___ is done.
Ans. Appropriation

28. Section 59 to 61 of the ___ Act contains provisions regarding the right of appropriation of payments in such cases.
Ans. The Indian Contract

29. Banker’s lien is a ___ recognised by law.
Ans. General lien

30. Banks and other financial institutions lend money based on ___ obtained except for clean loans.
Ans. Securities

31. ___ is established for the purpose of preferring appeal against the order passed by the Tribunal.
Ans. Appellate Tribunal

32. ___ means the registry set up or causes to bet set up under subsection (1) of section 20.
Ans. Central Registry

33. The Supreme Court has declared that the conditions of deposit of ___ of claim amount as unreasonable, oppressive, arbitrary, and violative of Article 14 of the Constitution.
Ans. 75%

34. The registered companies can raise ___ for their acquisition activities by issuing security receipts for formulating schemes.
Ans. Money

35. ___ means acquisition of any right or interest of any bank or financial institution in any financial asset for the purpose of realisation.
Ans. Assets reconstruction

36. The ___ or reconstruction company raises funds for acquisition by issue of security receipts.
Ans. Securitisation

37. Section ___ of the Act explains about the notice to be given to the borrower by the secured creditor.
Ans. 13(2)

38. The DRT has to dispose of the application as early as possible but within ___ days.
Ans. 60

39. The shareholders of the company cannot lawfully appoint any person to be a director of the company. (True/False)
Ans. False

40. Before 10 days of sale of immovable property, the borrower should be given notice about the sale. (True/False)
Ans. False

41. The authorised officer is authorised to issue sale certificate. (True/False)
Ans. True

42. Central Government has to setup or cause to set up ___ for registration of securitisation and reconstruction transaction and creation of security interest.
Ans. Central Registry

43. Under ___ of the SARFAESI Act, the Reserve Bank of India is statutorily empowered to issue directions to the securitisation company or reconstruction company.
Ans. Sec 12

44. All transactions involving creation of ___, modification, and satisfaction of charges also needs noting in prescribed form with payment of necessary fees.
Ans. Security interest

45. A pledge of movable is defined in Section 172 of the Indian Contract Act, 1872. (True/False) Ans. True

46. The Central Government can frame rules and notify them in the Official Gazette. (True/False)
Ans. True

47. If a company and its officers commit any offence under the provisions of the Act, the same is punishable. (True/False)
Ans. True

48. ___ means a public financial institution within the meaning of Section 4A of the Companies Act, 1956.
Ans. Financial institution

49. ___ means an application made to a Tribunal for recovery of the debt.
Ans. Application

50. The Tribunal consists of only one person called as ___
Ans. Presiding Officer


Understanding regulations relating to banks is essential for anyone who works in the banking industry.

This article has provided an overview of the important topics and presented MCQs with answers in a PDF format as a tool to help test knowledge on these topics.

It is highly recommended that those working in finance or banking consult these materials regularly to ensure they are aware of any changes and remain up-to-date with the latest regulations.

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