Bankers-Customer Relationship: Quiz

Bankers-Customer Relationship: Quiz 5

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1.When a bank lends money to the corporate person the relationship is__________

(a)Borrower and lender

(b)Creditor- Debtor

(c)Debtor- Creditor

(d)Customer and Client

Answer & Explanation

Exp: Creditor- Debtor (Bank is a creditor and Customer is a Debtor)

When the bank lends money to the customer, the customer is the borrower and the bank is the lender. The relationship between the banker and the customer is therefore that of a creditor and a debtor.

2.When FDR is lost by a customer of a bank, what document is executed______

(a)Promissory bond

(b)Indemnity bond

(c)Guarantee bond

(d)Government bond

Answer & Explanation

Exp: Indemnity bond

Indemnity Bond Law and Legal Definition. An indemnity bond is a bond that is intended to reimburse the holder for any actual or claimed loss caused by the issuer’s conduct or another person’s conduct.

3.Merchant Bankers are_______

(a)Financial Brokers


(c)Financial Intermediaries

(d)All of the above

Answer & Explanation
Ans: C

Exp: Any person, indulged in issue management business by making arrangements with respect to trade and subscription of securities or by playing the role of manager/consultant or by providing advisory services, is known as a merchant banker.

4.Hybrid deposit means________

(a)Combination of SB and CD

(b)Combination of monthly income scheme and half yearly scheme

(c)Combination of Demand and Term deposit

(d)Both B and C

Answer & Explanation
Ans: C

Exp: Hybrid deposits or flexi deposits which combine the features of demand and term deposits. These deposits are introduced in recent times by some banks to meet customers’ financial needs and convenience and are known by different names in different banks.

5.A draft purchase is reported lost and the purchaser wants to stop the payment of the draft can the bank do it?

(a)Bank can stop payment since covered under negotiable instrument

(b)Bank cannot stop payment since it is a promissory note

(c)Bank would issue stop payment instruction only after two weeks from date is issue

(d)None of these

Answer & Explanation
Ans: B

Exp: Bank cannot stop payment since it is a promissory note

6.Advantage of leasing__________

(a)Trading on Tax shield

(b)Increased capacity to borrow

(c) Arrangement for  faster and cheaper credit

(d) All of the above

Answer & Explanation
Ans: D

Exp: To the Lessor:

Assured regular income: the lessor get lease rental by leasing an asset during the period of the lease which is an assured regular income.The benefit of tax: as ownership lies with the lessor, the tax benefit is enjoyed by the lessor by way of depreciation of respect of the leased asset.

To the lessee:

Tax benefits: a company is able to enjoy the tax advantage on lease payments as payments can be deducted as a business expense.

Cheaper: leasing is a source of financing which is cheaper than almost all sources of all the source of financing.

7.Baolor-bailee relationship is applicable in__________

(a)Keeping article in safe custody with bank

(b)Demand Draft issued by bank

(c)Safe deposit locker

(d)Cash deposited with cashier by customer

Answer & Explanation
Ans: A

Exp: As per the section 148 of the Indian Contract Act, 1872, a bailment is a contract where one person delivers goods to another person for some purpose. The person delivering the goods is the Bailor and the person receiving the goods is the Bailee. After the accomplishment of the purpose, the Bailee needs to return these goods to the Bailor or dispose of them according to the directions of the Bailor. Let us now discuss the duties of bailee and bailor.

The finder of lost goods (Section 71 Indian Contract Act) should return any increase in goods/animal to the true owner. Under section 164 (Indian Contract Act), The finder has to take care of such goods as an ordinary prudent man.

8.A credit voucher for Rs 49000 favouring Swati was wrongly posted to Abhinav by the bank, the relationship established with Abhinav is of_________

(a)Creditor and indemnifier

(b)Creditor and debtor

(c)Debtor and guarantor

(d)Trustee and Beneficiary

Answer & Explanation
Ans: B

Exp: Creditor and debtor

9.Which type of account is suitable for those who can save regularly and expect to earn a fair return on the deposits over a period of time ?

(a) Fixed Deposit Accounts

(b) Regular Deposit Account

(c) Recurring Deposit Account

(d) Investment Deposit Accounts

Answer & Explanation

Exp: While opening this type of account a person has to agree to deposit a fixed amount once in a month for a certain period.

10.What is the maximum deposit amount insured by the DICGC(Deposit Insurance and Credit Guarantee Corporation)?
(a) Rs. 50,000
(b) Rs.1,00,000
(c) Rs. 2,00,000
(d) Rs. 5,00,000

Answer & Explanation
Ans: D

Exp: Deposit Insurance and Credit Guarantee Corporation (DICGC) is a subsidiary of Reserve Bank of India. … DICGC insures all bank deposits, such as saving, fixed, current, Recurring deposit for up to the limit of Rs. 100,000 of each deposits in a bank.

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Related Links:

Paper 1 Module-Wise PDF

Paper 2 Module-Wise PDF

Paper 3 Module-Wise PDF


Download JAIIB Paper-3 CAPSULE PDF 2.0 (Legal & Regulation Aspects of Banking)

JAIIB Paper-2 CAPSULE PDF 2.0 (Accounting & Finance for Bankers)

JAIIB Paper-1 CAPSULE PDF 2.O (Principles & Practices of Banking)

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