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Question 1 of 20
1. Question
Which statement correctly describes documentary letter of credit?
Correct
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 2 of 20
2. Question
A credit officer is reviewing documentary letter of credit. Which approach is most appropriate?
Correct
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 3 of 20
3. Question
For JAIIB purposes, which option best explains documentary letter of credit?
Correct
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 4 of 20
4. Question
Which action follows sound banking practice in a case involving documentary letter of credit?
Correct
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 5 of 20
5. Question
Which principle should guide a bank when dealing with documentary letter of credit?
Correct
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: An undertaking to honour a complying presentation under the credit terms. Banks deal with documents under the credit, not the physical goods or every underlying contract dispute. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 6 of 20
6. Question
Which statement correctly describes sole proprietorship borrower?
Correct
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 7 of 20
7. Question
A credit officer is reviewing sole proprietorship borrower. Which approach is most appropriate?
Correct
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 8 of 20
8. Question
For JAIIB purposes, which option best explains sole proprietorship borrower?
Correct
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 9 of 20
9. Question
Which action follows sound banking practice in a case involving sole proprietorship borrower?
Correct
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 10 of 20
10. Question
Which principle should guide a bank when dealing with sole proprietorship borrower?
Correct
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: The proprietor is the borrower and is personally liable for business debts, subject to law. A proprietorship is not a separate legal person from its proprietor. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 11 of 20
11. Question
Which statement correctly describes partnership borrower?
Correct
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 12 of 20
12. Question
A credit officer is reviewing partnership borrower. Which approach is most appropriate?
Correct
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 13 of 20
13. Question
For JAIIB purposes, which option best explains partnership borrower?
Correct
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 14 of 20
14. Question
Which action follows sound banking practice in a case involving partnership borrower?
Correct
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 15 of 20
15. Question
Which principle should guide a bank when dealing with partnership borrower?
Correct
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify the partnership deed and borrowing authority. The firm‘s constitution and authority should be checked; partner liability differs from company liability. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 16 of 20
16. Question
Which statement correctly describes company borrower?
Correct
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 17 of 20
17. Question
A credit officer is reviewing company borrower. Which approach is most appropriate?
Correct
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 18 of 20
18. Question
For JAIIB purposes, which option best explains company borrower?
Correct
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 19 of 20
19. Question
Which action follows sound banking practice in a case involving company borrower?
Correct
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
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Question 20 of 20
20. Question
Which principle should guide a bank when dealing with company borrower?
Correct
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Incorrect
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.
Unattempted
Correct answer: Verify legal existence, borrowing powers and authorised signatories. A company is a separate legal entity and must act through authorised persons. The distractors are incorrect because they conflict with the applicable lending, legal, risk-management or operational principle. In practice, officers should also check the latest RBI directions, the relevant statute and their bank‘s current approved policy.