SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)

Program: PGDBF
Subject: Management of Bank

Sample Questions:
Section I: Subjective Questions

1. What are the essential factors, which make a PBS succeed in banks?

2. Explain the three most important roles played by treasury.

3. Explain the concept of Repo / Reverse Repo Auction.

4. What is the need for HRM in banks?

5. Which control activities help banks in implementing the internal control system?

6. Explain the concept of Digital Signature.

7. Write a short note on need for compensation management.

8. Discuss the activities covered in management of credit risk.

Section II: Objective Questions

Multiple Choice Single Response

1. Normally, the following types of customers require higher due diligence under KYC
norms, except
1] farmers with land holding over 10 acres
2] politically exposed persons (PEPs) of foreign origin.
3] non-resident customers
4] high net worth individuals
2. One of the purposes of PBS at the branch level has been to introduce planning
1] at the grass root level
2] at the lower most employee level
3] at the general employee level
4] at the highest level
3. Net Interest Margin NIM is defined as
1] Net interest income divided by total earning assets
2] Interest income minus interest expenses.
3] Total interest income divided by total assets.
4] Total interest income minus total assets.
4. Asset utilization represents the
1] income earning capability of bank assets
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank

2] income earning capability of bank liabilities

3] a profit and risk measurement
4] a market value of equity and risk appetite
5. In banks, the following summarizes all major human resources policies and
procedures that are currently in force
1] HR manual
2] Branch manual
3] Service manual
4] Operation manual
6. The major area which is covered in the training of banking personnel include
1] Process Training
2] Psychology
3] Production management
4] Crop Management
7. The mandatory minimum percentage of Net Demand and Time Liabilities (NDTL),
which scheduled commercial banks must invest in notified securities is termed as
1] Statutory Liability Ratio
2] Repo Ratio
3] Reverse Repo Ratio
4] Capital Reserve Ratio
8. Bulk of the Forex treasury operations is on behalf of
1] the clients
2] the central government
3] the state governments
4] Foreigners
9. Performance budgeting postulates that the planning becomes a meaningful exercise
and is
1] Bottom's up approach
2] Top down approach
3] Circle approach
4] Flat approach
10. NRI, as an individual, can remit funds into India through
1] normal banking channels
2] normal specialised banking channels
3] non-banking channels
4] deposits
Multiple Choice Multiple Response

11. According to the risk diversification principle of bank lending, diversification should
be in terms of
1] customer base
2] geographic location
3] nature of business
4] credit needs
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank

12. Showing concern to the customer needs

1] empathy
2] understanding
3] marketing
4] sales
13. Which of the following factors are included in the control environment
1] Organization Structure
2] Management Philosophy
3] Management Control System
4] RBI Regulations
14. The "Security Department of the bank is divided into three wings
1] Administration Wing
2] Fire and Fighting Wing
3] Security Wing
4] Surveillance Wing
15. RBI controls the commercial banks through
1] periodic inspection of banks
2] calling for returns and other information
3] control of funds
4] currency printing
16. Which of the following are the most important responsibilities of bank treasury
1] There is enough cash
2] Capital is available when required
3] fund arrangement on need basis
4] Employees get salary in time
17. The structural reform measures in corporate governance in banks include
1] mandating a higher proportion of independent directors on the boards
2] inducting board members with diverse sets of skills and expertise
3] setting up of board committees for key functions like risk management,
compensation, investor grievances redressal and nomination of directors.
4] to undertake acquisition of businesses, close or merge unviable branches, open
overseas offices, set up subsidiaries, take up new lines of business or exit existing
ones
18. The complaints of bank customers should be analysed
1] to identify frequent sources of complaint
2] to identify customer service areas in which the complaints are frequently received
3] to identify systemic deficiencies
4] for initiating appropriate action to make the sources of complaint more effective.
Fill in the Blanks

19. Banking facilitates business activities and is considered as an important auxiliary to

__________.
1] trade
2] business
3] commerce
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank

4] economy
20. The unsecured exposures which are identified as substandard would attract additional
provision of 10 per cent, i.e. __________.
1] a total of 25 per cent on the outstanding balance.
2] a total of 0.25 per cent on the outstanding balance.
3] a total of 0.40 per cent on the outstanding balance.
4] a total of 1.00 per cent on the outstanding balance.
21. A bank benefits from customers loyal behaviour consequent upon these __________.
1] attitudes and beliefs
2] attitudes and needs
3] needs and beliefs
4] needs and wants
22. The credit risk management process is articulated in the banks __________.
1] Loan Policy
2] Risk policy
3] Default Loan policy
4] Strategic business policy
23. The ability of an institution to replace liability run off and fund asset growth promptly
and at a reasonable price is termed as __________.
1] Liquidity
2] Sustainability
3] Credibility
4] Treasury
24. Banks typically face __________.
1] credit risk
2] monetary risk
3] fiscal risk
4] budgetary risk
25. For setting up of Off site Mobile ATM ,RBI gives permission __________.
1] general permission
2] specific permission is required
3] is automatic provided same number of branches are opened in metros
4] No permission is given as Off site ATMs are not to be opened
26. A risk management technique designed to earn an adequate return while maintaining
a comfortable surplus of assets beyond liabilities is termed as __________.
1] Asset Liability Management
2] Securitization
3] Netting
4] Reserve Management
27. The securities acquired by the banks with the intention to hold them up to maturity
will be classified as __________.
1] Held to Maturity
2] Held for Trading
3] Available for sale
 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank

4] Yield to Maturity
28. Bank's investment in unlisted non-SLR securities should not exceed __________ of
its total investment in non-SLR securities.
1] 10%
2] 5%
3] 15%
4] 12%
State True or False

29. The organization structure in a public sector bank is similar to that of a private sector
bank.
30. Independent persons, who are not the employees of bank, should not be allowed to
conduct check on various internal control systems of the bank.
31. A loan cannot be repaid in lump sum by the borrower.

32. Zonal/Regional offices of PSBs do not control the work of branches.

33. Interest rate risk is the risk where changes in market interest rates might favorably
affect a bank’s financial condition.
34. Length of the supervisory cycle is based on the overall risk rating of the bank.

35. MIS is basically an integrated system which transforms the reports into data for
facilitating decision-making.
36. Where the complaints are redressed within the next working day, banks need not
include the same in the statement of complaints.
37. The Trading Book includes all the assets that are held with intention of trading that
are marketable.
38. The most common problem faced by banks is creation of short term assets and long
term liabilities resulting in balance sheet mismatch.

Match the Following

39. 1] SLR Securities 1] Central Government Securities

2] SLR Securities are 2] State Government Securities

3] Non-SLR Securities 3] Mutual Funds

4] Non-SLR Securities are 4] Corporate Bonds

5] MSME Bonds

6] Asset Backed Securities

 SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank

40. 1] Leadership skills of the branch 1] motivates his staff

manager

2] Adequate training of the branch 2] helps in better budgeting exercise

manager

3] Top management support 3] ensures timely submission of

performance budget

4] Commitment to the concept of 4] ensures preparation of quality and

performance budgeting system timely performance budgeting

5] compels the staff to cooperate in

preparing the PB

6] helps in making the branch

overconfident

41. 1] Customers who keep on coming back 1] Now the goal of an organization.
again and again is

2] It is Zero customer defection as the 2] not zero defects

“Mantra” and

3] Enduring relationships with customers 3] duplicated by competitors

cannot be

4] The impetus for the development of 4] the long-term financial benefits

relationship marketing has been the
growing awareness of

5] replicated by competition

6] now the habit of the organization

42. 1] PIN 1] Personal Identification Number

2] Query based transaction 2] Mobile banking

3] Responsible to clear a card transaction 3] Acquiring bank

4] Authorization 4] Checking the validity & availability of

balance on a card

5] Person's Individual Number

6] Clearing House of RBI

SYMBIOSIS CENTRE FOR DISTANCE LEARNING (SCDL)
Program: PGDBF
Subject: Management of Bank