QA Series No 55 - General Part 5

 

The Banking Tutor

Question Answer Series 2025

S No 55                                                                  02-09-2025

General -  Part 5

 

161. In which cases we go for Forensic Audit ?                                                    

Forensic Audit is applicable to

a) Accounts classified in SMA 02 or NPA category with exposure of Rs. 25.00 Crore or more irrespective of the lending arrangement (whether solo banking, multiple banking or consortium) on case to case basis. 

b) Accounts which are in SMA 02 category for temporary period due to liquidity crunch or otherwise should not be considered for forensic audit, if other parameters have no negative features. 

c) Red fagged loan (RFA) accounts with exposure of ₹ 25.00 Crore or more (solo/consortium basis) on case to case basis. 

162. What is the time limit for completion of Forensic Audit?

Time limit for completing forensic audit is 2 months (extendable by 1 month) from authorising the audit.

The overall time allowed for the entire exercise to be completed is 6 months from the date when the first member bank reported the account as Red Flag Account (RFA) or Fraud on the CRILC platform.

163. What are Unclaimed Deposits?

Term Deposit accounts which are overdue for 10 years or more are classified as unclaimed deposits.

164. What is full form of UDGAM and what it is?

UDGAM stands Unclaimed Deposits-Gateway to Access inforMation, which is an online portal developed by RBI. It facilitates the registered users to search unclaimed deposits/accounts across multiple banks at one place in a centralised manner.

165. Up-to what amount DICGC cover available for Bank Deposits?

DICGC Cover of for Bank depositors is enhanced from the present level of Rs.1 lakh to Rs.5 lakh per depositor with effect from February 4, 2020.

166. What is eBAAT ?

eBAAT - electronic banking awareness and training (eBAAT) is a programme of RBI. The programme aims to facilitate increased usage of  electronic banking products and digital banking channels like internet and mobile banking by creating awareness among the Bank's customers about their usage.

167. What are RBI directives related to payment of interest on Term Deposits?

As per RBI directives, interest on term deposits is to be calculated at quarterly rests and not at calendar quarters/half years. In view of this, whenever interest is agreed to be paid quarterly/half yearly, such interest should be paid exactly one quarter/one half year from the date of deposit i.e., on the date corresponding to date of the deposit after one quarter/ one half year.

168. Whether Hypothecation of Vehicles need to be registered with CERSAI?

Hypothecation of Vehicles need not be Registered with CERSAI.

169. What is Average Clause in case of Insurance Policies of assets?

As per Average Clause (in Insurance Policy) , in case of under insurance, the claim will be settled only proportionately in the same proportion between the amount of insurance and total value of goods.

170. What is Bank Clause in case of Insurance Policies (Assets) ?

Bank clause enable Insurance Company to pay Moneys payable under the Policy to the Bank directly as Agents of the Borrowers.

171. Which committee submitted recommendations related to Education Loans?

Damodaran Committee Recommendations related to education loans.

172. In “FBR Safe” what is full form of FBR?

FBR – Fire & Burglary Resistant (Cabinet/Almira)

173. What is the full form of FRRC?

FRRC - Fire Resistant Record Cabinet. (Storage Almirah)

174. What is SRCC in Insurance Policy?

SRCC stands for Strike, Riot and Civil Commotion.

175. What is a Paid-up Policy (Insurance)

A paid-up policy having surrender value can be accepted as security for advance. A paid up life policy is one which is declared as ‘paid-up‘. The effect of making a policy ‘paid-up‘ is that no further premium is to be paid on it, although the term of the Policy has not expired.

176. What is Surrender Value ? (Insurance)

Surrender value is the present cash value of the policy which is payable by LIC under the policy if the contract is terminated i.e., if the policy is surrendered.

105. The SWIFT code is an 8 or 11 alphanumeric characters code that uniquely identifies financial institution throughout the world.

177. What is full form of SWIFT?

SWIFT stands for ‘Society for Worldwide Interbank Financial Telecommunication’.

178. What is the other name for SWIFT Code?

SWIFT Code is also known as BIC (Business Identifier) Codes; SWIFT-BIC and ISO 9362.

179. In which City Head Quarters of SWIFT is located?

Headquarters of SWIFT is located in La Hulpe, Belgium.

180. What is the difference between Swift Code and IFSC?

SWIFT Code is used for international money transfer, whereas IFSC is used for domestic money transfer (within India).

181. What is Lloyds Certificate in LCs?

Lloyds Certificates is a certificate issued by Lloyds Registry of Shipping certifying the age, classification and seaworthiness of the vessel in order to ensure marine insurance cover under Institute Classification Clause.

182. What is SGS Certificate ?

SGS Certificate is a certificate of Pre-shipment Inspection of merchandise by International inspection agencies like Societe Generale De Surveillance (SGS) or its subsidiary or Lloyds Inspection. Agency certifying that the quality, Quantity and description of merchandise loaded on the vessel conform to the sale Contract/FL Inspection agencies also undertake supervision while loading the cargo on Board the vessel.

183. Can Bank exercise its right of lien during the currency of deposit?

Right of lien would be conferred only on the maturity of the deposit.

184. What is rate of interest for delayed payment of locker rent?

No interest need be collected on delayed payment of locker rent. However, penalty (Service Charges) to be collected for the delay.

185. What is the due date for collection of locker rent?

Due date for collection of all Safe Deposit Locker Rentals will be 1st April of every year.

186. What are the norms related to acceptance of letter of authority to operate lockers ?

Letters of authority to operate the locker issued to a third party other than the close relatives (spouse, parents, sons, daughters, brothers, sisters) of the employee should not be accepted.

Authority to operate the locker  should not be accepted in respect of lockers hired out to a minor either singly or jointly.

187. How to convert Locker in single name into joint names?

Unlike deposit accounts, lockers held solely cannot be converted into lockers in joint names by adding names. Wherever, request for conversion of lockers held singly into lockers in joint names is received, the hirer /s are to be advised to surrender the locker and hire a locker afresh in joint names.

188. What are the important points to be observed while extending loan against Partly Paid-up Shares?

No loans to be considered against partly paid up shares as they carry a contingent liability for payment of difference amount.

189. What is ENAM?

National Agriculture Market (eNAM) is a pan-India electronic  trading portal which networks the existing APMC (Agricultural   Produce Market Committee) mandis (market yards) to create a unified  national market for agricultural commodities.

190. What is SFAC?

Small Farmers Agri- business Consortium (SFAC) is the lead agency for implementing eNAM  under the aegis of Ministry of Agriculture and Farmers’ Welfare.

191. What is NIRVIK?

NIRVIK: Ministry of Commerce & Industry has introduced a new Export Credit Insurance Scheme called NIRVIK - “Niryat Rin Vikas Yojana” in tie up with the Export Credit Guarantee Corporation to enhance loan availability to exporters and to ease the lending process. Under the scheme, up to 90% of the principal amount and interest will be covered through insurance.

192. What is OSMOS?

OSMOS refers to Of-Site Surveillance and Monitoring System. The RBI requires banks to submit detailed and structured information periodically under OSMOS. On the basis of OSMOS, RBI analyzes the health of the banks.

193. What are Bonded Goods?

Bonded Goods are landed import goods stored under the supervision of customs authorities in bonded warehouses for which the customs duty is yet to  be paid. After customs clearance and payment of duty, bonded-goods are released either for re-export or released to the importer for home consumption.

194. What is EShakthi?

EShakthi is online digital platform for processing SHG loans. EShakti is a pilot project for digitization of SHGs launched by NABARD in 250 identified districts. Project aims at digitization of SHG accounts and enables them to submit the online loan application to Bank Branches through EShakti portal.

195. What is Negative Lien?

Negative Lien is an undertaking by owner of asset for not selling and creating charge on assets without permission from the creditor. It has no legal force.

196. What is GeM?

GeM - Government e-Marketplace is a one stop portal to facilitate online procurement of common use Goods & Services required by various Government Departments / Organizations / Public Sector Undertakings (PSUs).

197. What is PM FME?

PM FME - PM Micro Food Processing Enterprises Scheme ( for Food Processing – for upgradation of existing food processing activities. Units engaged in processing of One District One Product (ODOP) are eligible. Individual, Co-operative with turnover of Rs 1 Crore and SHG with 3 years experience.

Subsidy – 35% of Project cost with Max. 10 lakh.

(Centre-State share at 60:40 (90:10 for Himalayan & NE Sates).

Margin -10 %.       ;        CGTMSE coverage – up to 2 Cr.

Repayment -60 months with maximum repayment holiday of 6 months.

198. What is  Truncated Cheque?

Truncated cheque means a cheque which is truncated during the course of a clearing cycle, either by the clearing house or by the bank whether paying or receiving payment, immediately on generation of an electronic image for transmission, substituting the further physical movement of the cheque in writing.

199. What is meant by Archival?

Archival is the process of consolidating and moving data from a primary online storage medium to less-expensive near-line secondary storage medium while keeping this archived information available for use at a later date.

200. What is Cloud Storage?

Cloud storage is a service model in which data is maintained, managed, backed up remotely and made available to users over a network.

201. What/Who is the Queen of Indian Financial System?

RBI is regarded as a queen of Indian financial system.

202. What is the other name foe Accommodation Bills?

Accommodation bills are also known as  Kite bills.

203. What the full form of CORE in CBC?

The full form ‘CORE’ in core banking services - "Centralized Online Real-time Exchange".

204. What is Cash Reserve Ratio , who decides it and what is the other name for Cash Reserve Ratio?

The minimum percentage of demand and time liabilities which a bank has to maintain in the form of liquid assets is known as Cash Reserve Ratio.

Cash Reserve Ratio (CRR) Rate  decided by the RBI is called "Policy Rate”.

205. Which is the Small Investor Gateway to Big Companies?

The small investor gateway to enter into big companies is Mutual Fund.

206. What is the other name of World Bank?

World Bank is also known as IBRD.

207. What are Bretten Wood twins?

World Bank and IMF known as Bretten Wood Twins

208. What is Udaan?

Udaan is a portal launched by CGTMSE to increase the reach of Credit Guarantee Scheme to eligible entrepreneurs and entities.  Udaan means “Fly”

209. What is meant by Subrogation?

Subrogation is defined as substituting one creditor for another creditor, transferring any rights or duties that originally belonged to the first creditor to the second.

210. What is Liability Insurance Policy?

Liability insurance is a policy that offers protection to businesses and individuals from risk that they may be held legally or sued for negligence, malpractice or injury. This insurance policy protects the insured from legal costs for which the policy holder is deemed to be responsible.

211. What is Form B Extract from RTO?

Form B Extract from RTO - In transaction of sale of used vehicle, the document required to get from the RTO Department is B-Extract. It contains important details of the Vehicle and also history of the Vehicle (details of accidents, penalties etc.). If the Vehicle to be financed is already used, Banks insist on Form B extract to know history of the vehicle. This is needed to avoid any problems for getting transferred ownership. If any cases of accidents or penalties pending RTO may not Transfer ownership. As such Banks should obtain Form B extract at pre-sanction stage itself. We may compare Form B extract (in case of vehicle) with EC (in case of landed properties).

212. What is meant by Commitment Charge?

The charge levied by banks for under utilization or non utilization of sanctioned CC/OD limits is called: Commitment charge.

213. What is meant by Intersol charges?

The word “sol‟ means branch. Thus intersol charges mean inter-branch charges. These are charges levied by banks for using service of branches other than the home branch where a customer originally opened his account.

214. What is the Core Theme of Payments Vision 2025 ?

The core theme of Payments Vision 2025 is Four Es - ‘E-Payments for Everyone, Everywhere, Every time -  with an overall objective to provide every user with safe, secure, fast, convenient, accessible, and affordable e-payment options.

215. What is ZCZP?

ZCZP stands for Zero Coupon Zero Principal instruments (ZCZP).  ZCZP security is one where neither interest is paid nor principal is repaid. Companies can issue such securities to utilise their fund marked for social responsibility. The non-profit organisations can get such funds in a transparent manner.

216. What is the other name for Consumer Price Index?

Consumer Price Index (CPI) also called Retail inflation.

217. What is the other name for Wholesale Price Index?

Wholesale Price Index (WPI) also called factory-gate inflation.

218. What is the 4R Strategy for PSBs?

To improve the financial health of PSBs, the GoI implemented in the past the 4Rs strategy- Recognition of NPAs transparently, Resolution and recovery of value from stressed accounts, Recapitalization of PSBs, and Reforms in PSBs.

219. What is a Unfit Currency Note?

Unfit Note (Currency) is one which is not fit for recirculation. An unfit note is a note that is not suitable for recycling because of its physical condition or belongs to a series that has been phased out by Reserve Bank of India.

220. What is a Chatbot?

A Chatbot or Bot is a computer program designed to talk with the customer and reply his queries over the internet like a call centre.

221. What precautions to be taken while accepting Currency Notes as Security?

Currency notes are not accepted as security. A security should either be a good as defined u/s 2{7} of the scale of Good Act 1930, or a bill /promissory note as a defined u/s 4&5 of the Negotiable  instruments Act, 1881 or a security u/s 2{b}of securities Contracts [Regulation] Act 1956 or an immoveable property. Currency notes/ banks notes being none of the above but legal tender can not be accepted as security.

222. What precautions to be taken while accepting Bank’s Own Shares as Security?

Banks don’t accept their shares as security for loans and advances Sec. 20 of Banking Regulation Act 1949 prohibits sanction of loan against Bank's own shares. Moreover, it will tantamount to reduction of its own shares.

223. What precautions to be taken while accepting Guarantee of a Partnership Firm?

Guarantee of a partnership firm is not accepted - It is not the business of a partnership firm to stand a surety for credit to others. Therefore execution of surety bond for and on behalf on the firm does not come within the purview of section 19{1} of the partnership Act 1932 hence is invalid.

224. What is the purpose of mentioning place of execution in Agreements?

Place of execution is mentioned on all agreements - Place of execution determines the jurisdiction of court of law, in case a dispute arises later on. It is also important to determine the stamp duty payable on the agreement, as the stamp duty on agreements is subject matter of each state and differ from one state to the other.

225. Why Bank affix “All our Stamps Cancelled” while returning the cheques given for collection?

Bank affix the stamp `All our stamps cancelled' while returning the cheques - This is done to ensure that the Bank does not incur any liability in future as an agent for collection of the instrument. Also Holder can renegotiate the instrument through the same or even other Bank.

226. What is Narrow Money?

Narrow Money (M1) is the sum of Currency with the Public, Demand Deposits with the Banking System, and ‘Other’ Deposits with RBI.      

227. What is a Price Index?

A price index  is  a weighted average of price relatives for a given class of goods or services in a given region, during a given interval of time.

228. What is B2C?

B2C: Business-to-Consumer  refers to the process of selling products and services directly between a business and consumers who are the end-users of its products or services. Most companies that sell directly to consumers can be referred to as B2C companies.

229. What is meant by Impact Investment?

Impact investing refers to investments made into companies, organizations, and funds with the intention to generate a measurable, beneficial social or environmental impact alongside a financial return.

230. What is full form of DIPAM?

DIPAM stands for The Department of Investment and Public Asset Management.

231. What is full forms of WALR and WADTDR?

WALR stands for Weighted Average Lending Rate

WADTDR stands for Weighted Average Domestic Term Deposit Rate

232. What is meant by Froth?

Froth refers to a market condition where an asset's price begins to increase beyond its intrinsic value.

233. What is “Silent Period” in case of Monetary Policy?

The members of Monetary Policy Committee need to observe a "silent period" of 7 days before and after the rate decision of key policy rates.

234. What is known as Paper Gold?

SDR (Special Drawing Right) is known as Paper Gold.              

Sekhar Pariti

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