Laws- Protection to paying Banker | Negotiable Instrument Act 1881 | CAIIB Banking Regulations & Business Laws

In this article, you will get the links to JAIIB most important MCQs on the topic of JAIIB’s 3rd paper i.e. Banking Regulations & Business Laws (BRBL). 

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Now, let us take a look at the Negotiable Instruments Act 1881 as per the Latest CAIIB Syllabus 2023:

Negotiable Instruments Act 1881 lays down the rules relating to the payment of customers cheque and various subsections deal with the protection available to the paying Banker. When customer deposits money with the bank, the customer is creditor and bank is a debtor. Therefore whenever the customer demands back the money, the bank has the duty to pay back the money, in default of such payment, must compensate the drawer for any loss or damage. The bank has to honour the cheque provided, the cheque is properly drawn, duly signed by the maker and there should be “properly available fund” in his account. The funds may not be available to pay the cheque if:-

a) the banker has exercised his right of set off for amounts due from the customer or

b) there is an attachment order from court, Income Tax officer or any other lawful authority restraining the bank from paying the money.

IMPORTANT JAIIB BRBL (Banking Regulations & Business Laws) QUESTIONS FOR CAIIB NOV 2023

Here is the list of all the question series of JAIIB BRBL Questions:

The Questions below are from the applicable CAIIB Syllabus & have been framed as per the latest prescribed IIBF CAIIB BRBL Syllabus 2023.

Indian Contract Act Legal Banking Questions PART 1

Q. Which of the below option is correct?

1. the qualified investors will get their payments from the proceeds of the realization of Financial Assets.
2. Any dispute between Bank securitization Co & qualified institutional investors is to be settled through arbitration process.
3. The lending company sells its loans to the investors through SPV (special purpose vehicle).
4. All the above options are correct.

Ans – 4

Legal and Regulatory Aspects of banking Imp Ques PART 2

Q. Dissolution of a partnership firm takes place if ……

(i) by mutual arrangement amongst the partners to liquefy,

(ii) death/bankruptcy/retirement of a partner,

(iii) function of law

1. Only (i) and (ii)
2. Only (i) and (iii)
3. Only (ii) and (iii)
4. All the options are correct

Ans – 4

Legal Banking Questions PART 3:

Q. Which of the following is true about the operations executed by RBI?

1. It is the Bank of Currency Issue,
2. It acts as banker to the Indian Government,
3. It is the banker of other banks

1. Only (i) & (ii)
2. Only (i) & (iii)
3. Only (ii) & (iii)
4. (i), (ii) & (iii)

Ans – 3

Legal Banking Questions PART 4:

Q. Which among the below provided a reasonable ground of complaining against banks to Banking Ombudsman?

• Levying any commission for accepting small denomination notes,
• Any delay in settlement of inward remittances or not paying the inward remittances,
• Any excessive delay or not paying the amounts collected from cheques, drafts, bills etc.

1. Only (i) & (ii)
2. Only (i) & (iii)
3. Only (ii) & (iii)
4. (i), (ii) & (iii)

Ans – 4

Legal Banking Questions PART 5:

Q. What is a Non-performing Asset (NPA)?

1. Where payment of interest amount or principal amount or both amounts are in arrears > 180 days.
2. Where loan account is in default for 90 days and more.
3. Where loan account is classified as sub-standard doubtful or loss Asset by the Bank as per RBI’s directions.
4. None of the above options.

Ans – 3

Legal Banking Questions PART 6:

Q. When a banking company is established under moratorium under Section 45 of B.R. Act, the RBI must formulate a scheme……………….

1. VRS for its staff
2. buy back its capital
3. reconstruction of the company or amalgamation with any other bank
4. None of the above

Ans – 3

Legal Banking Questions PART 7:

Q. Assumptions for neutral money are ……

(i) The amount of money has no effect on the prices,

(ii) When money becomes neutral price of the product will rely on effective power of the economy,

(iii) Neutral money policy implies that financial authorities should not alter supply of money in reaction to transformations in the supply of goods

1. Only (i) and (ii)
2. Only (i) and (iii)
3. Only (ii) and (iii)
4. (i), (ii) and (iii)

Ans – 4

Q. Which of the below directive must be defined in case of foreclosed loans?

1. It should cover the whole loan liability including installments which are not due.
2. It must mention future interest amount payable till the date of repayment.
3. None of the above
4. options 1 & 2

Ans – 4

Legal Banking Questions PART 8:

Q. What does a Negotiating bank does?

1. bargains the preliminary agreement of sale between the buyer and the seller
2. makes payment of the invoices drawn by the vendor and accepts the records
3. guarantees amount by the issuing bank
4. None of the above

Ans – 2

Legal Banking Questions PART 9

Q. After the SARFAESI Act came into force, what is it that the existing companies are required in regard to the registration with RBI?

1. They are automatically deemed to be registered.
2. They are required to stop functioning.
3. Existing companies are not required to get registered.
4. They have to get registered within 6 months from the inception of the Act.

Ans – d

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