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WorksheetsPPB Module B Unit 3 & 4
Total questions: 66
Worksheet time: 50mins
Name
Class
Date
1.
What replaced the BPLR system in July 2010?
a)
PLR
b)
Base Rate System
c)
MCLR
d)
CRR
e)
Operating Costs
2.
When were floating rate rupee loans priced with reference to the Base Rate?
a)
Before July 1, 2010
b)
Between July 1, 2010 and March 31, 2016
c)
After March 31, 2016
d)
Between July 1, 2015 and March 31, 2016
e)
None of the above
3.
What concept replaced the Base Rate system in December 2015?
a)
PLR
b)
Base Rate System
c)
MCLR
d)
CRR
e)
Operating Costs
4.
Which of the following is an internal benchmark for pricing rupee loans?
a)
PLR
b)
Base Rate System
c)
MCLR
d)
CRR
e)
Operating Costs
5.
What are the five MCLRs that banks are required to publish?
a)
Overnight MCLR
b)
One week MCLR
c)
One month MCLR
d)
Three-month MCLR
e)
One year MCLR
6.
Which type of loans are exempt from benchmark-based interest rates?
a)
Government schemes loans
b)
Personal loans
c)
Fixed rate loans
d)
Small business loans
e)
Home loans
7.
What external benchmark was introduced in September 2019 for certain loans?
a)
Repo rate
b)
3-Months Treasury Bill yield
c)
6-Months Treasury Bill yield
d)
Base Rate
e)
MCLR
8.
What is the focus of credit management?
a)
Maximizing revenue
b)
Monitoring accounts
c)
Asset liability management
d)
Risk pricing policy
e)
Capital adequacy norms
9.
What does "Credit Exposure" refer to?
a)
Exposure to sunlight
b)
Bank's exposure to a single counterparty
c)
Credit card limit
d)
Exposure to foreign exchange
e)
Exposure to stock market
10.
What is the maximum exposure limit to a single NBFC for a bank?
a)
10% of bank's eligible capital
b)
20% of bank's eligible capital
c)
15% of bank's eligible capital
d)
25% of bank's eligible capital
e)
No limit
11.
Which of the following activities should not exceed 10% of total advances?
a)
Real estate loans
b)
Leasing services
c)
Hire Purchase services
d)
Factoring services
e)
Education loans
12.
What is the primary objective of credit audit?
a)
Collecting interest
b)
Improving credit quality
c)
Identifying potential NPAs
d)
Reducing loan interest rates
e)
Recommending corrective action
13.
What is the role of the Credit Audit Department?
a)
Collecting loan payments
b)
Reviewing credit applications
c)
Analyzing Credit Audit findings
d)
Following up with controlling authorities
e)
Processing loan applications
14.
What does credit monitoring aim to achieve?
a)
Minimizing NPAs
b)
Maximizing NPAs
c)
Minimizing interest rates
d)
Increasing loan disbursement
e)
Minimizing credit applications
15.
What should the bank do when the borrower defaults on interest payments?
a)
Increase interest rate
b)
Collect the interest on a yearly basis
c)
Collect the interest on a monthly basis
d)
Charge a penalty
e)
Conduct frequent visits
16.
What does CRILC stand for?
a)
Central Registry of Indian Loans and Credits
b)
Credit Reporting and Information Loan Company
c)
Central Repository of Information on Large Credits
d)
Central Repository of Indian Loans and Credits
e)
Central Registry of Information on Large Credits
17.
What does CERSAI stand for?
a)
Central Electronic Registry of Securitization Asset Reconstruction and Security Interest
b)
Central Registry of Securitization Asset Reconstruction and Security Interest
c)
Central Repository of Securitization Asset Reconstruction and Security Interest
d)
Central Electronic Registry of Security Interest and Asset Reconstruction
e)
Central Registry of Security Interest and Asset Reconstruction
18.
What is the maximum age limit for an individual applying for a vehicle loan?
a)
55 years
b)
60 years
c)
65 years
d)
70 years
e)
No age limit
19.
What is the maximum loan tenure for vehicle loans?
a)
36 months
b)
48 months
c)
60 months
d)
72 months
e)
84 months
20.
What is the maximum Loan to Value Ratio (LTV) for vehicles above Rs. 10 lakh?
a)
0.65
b)
0.7
c)
0.75
d)
0.8
e)
0.85
21.
What should banks do immediately after a vehicle purchase regarding hypothecation?
a)
Transfer ownership
b)
Get a copy of the insurance policy
c)
Get hypothecation marked in the Registration Certificate (RC)
d)
Transfer the RC to the borrower
e)
Sell the vehicle
22.
What is the primary objective of credit monitoring?
a)
Maximizing NPAs
b)
Reducing loan interest rates
c)
Minimizing interest rates
d)
Minimizing NPAs
e)
Increasing loan disbursement
23.
What do banks need to frame based on RBI guidelines for lending?
a)
Fair Practices Code
b)
Loan application forms
c)
Credit audit reports
d)
Risk assessment policy
e)
Interest rate policies
24.
What is the purpose of the Marginal Cost of Funds Based Lending Rate (MCLR)?
a)
To calculate interest rates on fixed loans
b)
To calculate the cost of funds for banks
c)
To calculate the inflation rate
d)
To calculate the stock market performance
e)
To calculate foreign exchange rates
25.
Which of the following is NOT one of the components of MCLR?
a)
Marginal cost of funds
b)
Negative carry on account of CRR
c)
Operating costs
d)
Tenor premium
e)
Risk premium
26.
How many MCLRs must banks publish according to the guidelines?
a)
Three
b)
Four
c)
Five
d)
Six
e)
Seven
27.
What is the primary purpose of the Credit Management process?
a)
Appraising and sanctioning loans
b)
Increasing revenue
c)
Monitoring loan recovery
d)
Risk management
e)
Calculating interest rates
28.
What does ALM stand for in the context of credit management?
a)
Asset Liability Management
b)
Annual Loan Monitoring
c)
Average Loan Management
d)
Asset and Liability Management
e)
Asset Loan Management
29.
What is the maximum percentage of the bank's available eligible capital base for exposure to a single counterparty?
a)
0.1
b)
0.2
c)
0.25
d)
0.3
e)
0.4
30.
What type of loans should have a limit of 20 percent of the bank's Tier I Capital in exposure?
a)
Loans to small businesses
b)
Loans to large corporations
c)
Loans to foreign nationals
d)
Loans to government agencies
e)
Loans to individuals
31.
What is the function of the Credit Audit Department?
a)
Processing loan applications
b)
Analyzing Credit Audit findings
c)
Following up with controlling authorities
d)
Collecting loan payments
e)
Reviewing credit applications
32.
What is the main purpose of the Central Repository of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)?
a)
To maintain and operate a Registration System
b)
To manage government warehouses
c)
To regulate loan interest rates
d)
To track foreign exchange rates
e)
To control inflation
33.
What should banks do when forwarding a default case to a recovery agency?
a)
Keep it confidential
b)
Notify the police
c)
Inform the borrower
d)
Post details on the bank's website
e)
Carry out unethical practices
34.
What is the maximum age limit for an individual applying for an educational loan?
a)
18 years
b)
21 years
c)
25 years
d)
30 years
e)
No age limit
35.
What is the maximum loan tenure for educational loans?
a)
5 years
b)
7 years
c)
10 years
d)
15 years
e)
20 years
36.
Which document should the branch obtain when processing a vehicle loan application?
a)
Birth certificate
b)
Audited financial statements
c)
Marriage certificate
d)
Income tax returns
e)
Driver's license
37.
What does LTV stand for in the context of vehicle loans?
a)
Loan-to-Value
b)
Life Time Value
c)
Loan Type Variation
d)
Loan Term Value
e)
Loan Tracking Value
38.
What does CIBIL stand for in the context of credit management?
a)
Credit Investment and Banking Information
b)
Credit Information Bureau of India Limited
c)
Credit Interest and Banking Information
d)
Credit Investigation and Borrower Information
e)
Credit Investment and Borrower Insight
39.
What is the purpose of the Fair Practices Code for Lenders?
a)
To calculate loan interest rates
b)
To increase loan disbursement
c)
To ensure ethical and transparent lending practices
d)
To monitor stock market performance
e)
To manage foreign exchange rates
40.
What should banks do regarding timelines for conveying credit decisions?
a)
Keep them confidential
b)
Display them on the website
c)
Share them with the government
d)
Inform the borrower
e)
Publish them in newspapers
41.
What replaced the PLR as an internal benchmark?
a)
Base Rate System
b)
MCLR
c)
BPLR System
d)
RBI Regulations
42.
When did the Base Rate system replace the BPLR system?
a)
July 1, 2010
b)
March 31, 2016
c)
2015-12-01 00:00:00
d)
2019-09-01 00:00:00
43.
What is the internal benchmark for pricing all rupee loans and limits?
a)
MCLR
b)
Base Rate
c)
BPLR
d)
RBI Repo Rate
44.
Which loans are exempt from benchmark-based interest rates?
a)
Government of India Schemes
b)
Advances to banks' depositors
c)
Working Capital Term Loan
d)
Fixed rate loans above 3 years
e)
Loans under refinance schemes
45.
What external benchmarks can be used for floating rate personal loans?
a)
RBI policy repo rate
b)
Government of India 6-Months Treasury Bill yield
c)
Government of India 3-Months Treasury Bill yield
d)
Any other benchmark by FBIL
46.
What is the maximum exposure limit to a single counterparty?
a)
20 percent
b)
25 percent
c)
10 percent
d)
30 percent
e)
15 percent
47.
What does the Credit Audit department review?
a)
Credit Risk Assessment
b)
Regulatory compliance
c)
Early warning signals
d)
Loan review mechanism
e)
Independent review
48.
What is the main objective of credit monitoring?
a)
Minimize NPA
b)
Maximize NPA
c)
Reduce interest rates
d)
Verify borrower identity
e)
Monitor credit score
49.
What is the minimum current ratio that banks should maintain?
a)
1.33
b)
1.25
c)
2
d)
1.5
e)
1.75
50.
What is the purpose of the Central Repository of Information on Large Credits (CRILC)?
a)
Monitor credit quality
b)
Track leverage
c)
Create credit reports
d)
Report defaults
e)
Share credit information
51.
What is CERSAI's objective?
a)
Registration of transactions
b)
Creation of security interest
c)
Licensing banks
d)
Operating a warehouse
52.
What is the loan tenure for educational loans?
a)
15 years
b)
10 years
c)
5 years
d)
20 years
e)
12 years
53.
What is the maximum LTV ratio for vehicle loans above Rs. 10 lakhs?
a)
0.8
b)
0.85
c)
0.9
d)
0.75
e)
0.7
54.
What guidelines should banks follow for fair practices in lending?
a)
RBI guidelines
b)
IBA guidelines
c)
SEBI guidelines
d)
IRDA guidelines
55.
What is the Marginal Cost of Funds Based Lending Rate (MCLR) composed of?
a)
Marginal cost of funds
b)
Negative carry on CRR
c)
Operating costs
d)
Tenor premium
e)
Bank's profit margin
56.
How many MCLRs are banks required to publish?
a)
Five
b)
Four
c)
Three
d)
Six
e)
Two
57.
What can cause an increase in the spread charged to an existing borrower?
a)
Deterioration in credit risk
b)
Change in government policy
c)
Bank's profit margin
d)
Decreased interest rates
58.
What types of loans are exempt from benchmark-based interest rates?
a)
Advances to banks' depositors
b)
Advances to bank employees
c)
Loans linked to external benchmarks
d)
Fixed-rate loans below 3 years
59.
What is the primary purpose of credit management?
a)
Increase bank revenue
b)
Monitor loan recovery
c)
Appraise loans
d)
Manage interest rates
60.
What is the maximum exposure limit to a borrower group?
a)
25 percent
b)
20 percent
c)
15 percent
d)
30 percent
e)
10 percent
61.
What should banks do to assess compliance with their sanction and post-sanction processes?
a)
Conduct credit audit
b)
Conduct loan review
c)
Analyze regulatory compliance
d)
Collect loan applications
62.
What is the purpose of credit monitoring?
a)
Minimize NPA
b)
Maximize NPA
c)
Verify borrower identity
d)
Monitor credit score
63.
What should banks maintain the current ratio at?
a)
Minimum 1.33
b)
Minimum 1.25
c)
Minimum 2.00
d)
Minimum 1.50
e)
Minimum 1.75
64.
What is the objective of the Central Repository of Information on Large Credits (CRILC)?
a)
Monitor credit quality
b)
Track common exposures
c)
Report defaults
d)
Share financial reports
65.
What is the primary objective of the Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)?
a)
Registration of transactions
b)
Creation of security interest
c)
Licensing banks
d)
Operating a warehouse
66.
What should banks do to ensure fair practices in lending?
a)
Follow RBI guidelines
b)
Follow IBA guidelines
c)
Follow SEBI guidelines
d)
Follow IRDA guidelines
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