Chap# 08 Q1 Precautions of Advances

Banker may grant loans to all sectors/ business of the economy, this is called ____________

• Safety of loan

• Best Policy in granting of loan

• Liquidity of loan

• Diversification of loan

A banker may accept Liquid security from customer, Liquid security means ________

• easily convertible into cash

• security of Fixed Assets

• Cash Only

• Security of Current Assets

One of the precautionary measures is that banker may

• give short term loans

• Security may not be disputed

• Amount of loan may be small

• All of them

Illiterate person provides to the bank for his identification

• Birth Certificate

• Impression of Thumb

• Photograph

• All of the above

The main sources of banks funds are __________________________

• Deposits

• Banks own Capital

• Reserve Fund

• All of the above

Which of the following cannot be accepted by banks as security when granting loans?

• Gold or Silver

• Property

• Shares and Debentures

• Letter of Credit

When money is borrowed with land or immovable property as security it is called _____________

• Lien

• Pledge

• Mortgage

• Hypothecation

When bank grant loan against Current Assets, Bank ______________ the Current Assets.

• Lien

• Pledge

• Mortgage

• Hypothecation

In _________________Possession and Ownership Remain with Borrower, Only Right to sell the Fixed Assets (Movable) is with the bank in case of non repayment of loan.

• Lien

• Pledge

• Mortgage

• Hypothecation

Normally bank mark lien on ____________

• Property documents and

  TDR

• Property

• Goods in Godown

• Gold and Silver