Daily JAIIB Quiz 24 Oct 2026

The Resident Foreign Currency (RFC) account is available to eligible resident individuals under the applicable FEMA/RBI framework, including certain residents returning to India after a period abroad. A Resident Foreign Currency (Domestic) account (RFC(D)) is a distinct facility for eligible foreign exchange acquired from specified sources while resident in India. Eligibility, permitted credits/debits and account conditions must be checked against current RBI directions.

CMS helps businesses manage collections, payments, liquidity and reconciliation more efficiently. Depending on the service, a bank may provide collection solutions, payment processing, virtual accounts, reporting and integration with the customer’s systems. CMS is not limited to physically transporting cash, nor does it guarantee that a business will never face a liquidity shortfall; it improves visibility and operational control over cash flows.

A paying banker must examine a cheque with reasonable care and follow the Negotiable Instruments Act, clearing rules and bank procedures. An apparent material alteration that is not properly authenticated is a warning sign; the bank should not pay it as though it were regular. The legal effect depends on the type of alteration and circumstances, but statutory protection for payment in due course cannot be assumed where the bank pays negligently or disregards an obvious irregularity.

Section 131 of the Negotiable Instruments Act provides qualified protection to a banker who, in good faith and without negligence, receives payment for a customer of a crossed cheque, subject to the statutory conditions. The bank should collect for a customer, observe due care, and investigate suspicious circumstances where appropriate. Protection is not automatic merely because the collecting institution is a bank; negligence or failure to meet the statutory conditions may defeat it.

NEFT processes transfers in batches at half-hourly intervals under the current system, while RTGS settles transactions individually in real time on a gross basis. RBI has removed the minimum amount requirement for NEFT; RTGS has a minimum transaction amount of ₹2 lakh and no RBI-prescribed upper ceiling, though a bank may set its own limits. Both operate round the clock, subject to the current system framework and participant/bank processes.

Business Correspondents act as permitted agents of banks to extend basic banking services, especially in underserved and remote areas. Depending on the bank’s arrangement and applicable RBI instructions, services can include account opening support, deposits, withdrawals, remittances and other permitted transactions. A BC is not an independent bank and cannot perform every banking activity without restriction; the bank remains responsible for the services provided through its authorised channel.

Banks should provide a channel to report unauthorised transactions, take prompt steps to prevent further unauthorised activity, investigate and apply the RBI framework on customer liability. The customer’s liability can depend on factors such as whether the fraud resulted from bank deficiency, a third-party breach, or customer negligence, and how quickly the customer reported it. A bank should not automatically tell every customer that liability is unlimited; the applicable circular and facts must be assessed.

A banker’s duty of confidentiality is important but not absolute. Disclosure may be justified by law, a duty to the public, the bank’s own legitimate interests in appropriate circumstances, or the customer’s express or implied consent, subject to applicable law and safeguards. A bank should not disclose account information merely because a third party asks for it. Legal orders and statutory reporting obligations must be handled in accordance with their scope and governing rules.

As a general rule, the customer must first lodge a complaint with the regulated entity. If the entity rejects it wholly or partly and the customer is dissatisfied, or gives no reply within 30 days, the customer may approach the RBI Ombudsman, subject to the scheme’s other eligibility conditions and time limits. If the entity replies within 30 days, the customer need not wait further if dissatisfied, but should ensure the complaint is otherwise maintainable under the scheme.

The Central Consumer Protection Authority (CCPA) is established under the Consumer Protection Act, 2019 and has powers relating to violations of consumer rights, unfair trade practices and false or misleading advertisements, as provided by the Act. Consumer Disputes Redressal Commissions adjudicate eligible consumer disputes at district, state and national levels. The CCPA and the commissions have different roles, so they should not be treated as interchangeable bodies.

A public sector bank is generally a public authority under the RTI Act and must process eligible requests through its designated Central Public Information Officer (CPIO), subject to statutory exemptions and the Act’s procedure. The ordinary response period is 30 days from receipt of the request; matters concerning life or liberty have a shorter statutory period of 48 hours. Personal or confidential information may be exempt in appropriate circumstances, and the law contains processes for appeals and other exceptions.

The relationship is generally that of debtor and creditor: the bank becomes the debtor and the customer becomes the creditor because the bank owes the deposited amount to the customer, subject to the account terms and applicable law. The relationship is not ordinarily trustee and beneficiary because the bank may use deposited funds in its banking business. Other relationships, such as agent–principal or bailee–bailor, can arise for particular services or property entrusted to the bank.

The Financial Intelligence Unit–India (FIU-IND) receives and analyses prescribed financial transaction reports, including Suspicious Transaction Reports (STRs), from reporting entities under the Prevention of Money Laundering Act framework and related rules. A bank should report a suspicious transaction based on the prescribed criteria even where the transaction amount is not large. RBI supervises regulated banks, while law-enforcement agencies investigate offences within their respective powers.

KYC rules prescribe specified Officially Valid Documents and related identification requirements. The precise list and treatment of documents must be read with the current RBI KYC Directions and amendments; Aadhaar is subject to the applicable statutory framework and permitted-use conditions, rather than being a universally compulsory document for every banking relationship. Banks must follow customer due diligence, verification and record-updating requirements relevant to the account and risk category.

The bank should identify and verify the firm and its beneficial owners as required, obtain relevant constitution and business documents, and establish who is authorised to operate the account. The partnership deed and mandate/authority help determine the partners’ powers and account operation instructions. A firm’s account should not be treated exactly like an individual’s account, and an oral instruction from one person is not a substitute for proper authority and documentation.

The bank should deal with the matured deposit according to the customer’s instructions, the deposit contract and applicable RBI directions. It should not assume that every matured deposit automatically renews on identical terms. Where a deposit remains unclaimed or unpaid, the applicable rules on interest, customer contact, classification and eventual transfer to the Depositor Education and Awareness Fund may become relevant depending on the period and circumstances. The bank should preserve accurate records and act in accordance with current instructions.

Cheque truncation stops the physical movement of the cheque beyond a point in the clearing process. The presenting bank sends an electronic image and relevant data through the prescribed clearing system, reducing transit time and the risks and costs associated with physical cheque movement. The paper cheque is not simply destroyed at the customer’s counter, and truncation does not remove the need to check the instrument and follow clearing rules.

A garnishee order is a court process directed to a third party who owes money to the judgment debtor; a bank may be a garnishee in relation to a customer’s credit balance. The bank must carefully read the order, identify the covered account and amount, and comply with the applicable legal requirements. The order does not automatically attach every kind of account or every future credit in all circumstances; the effect depends on the wording of the order and applicable law.

The RBI’s LRS generally permits a resident individual to remit up to USD 250,000 per financial year for permitted current or capital account transactions, or a combination of both, subject to the scheme’s exclusions and conditions. It is not a scheme for companies, firms or other entities. Banks must apply the latest RBI/FEMA requirements, purpose declarations and tax-collection rules where applicable; a permitted limit does not mean every transaction purpose is allowed.

An NRE account is generally used for eligible foreign earnings remitted to India; balances and interest are generally repatriable, subject to applicable rules. An NRO account is generally used to manage income earned in India by a non-resident, such as rent or pension; repatriation is subject to prescribed conditions and limits, and tax treatment differs. Banks should apply current FEMA directions and tax law rather than assuming both accounts have identical repatriation and tax treatment.