INDIAN INSTITUTE OF BANKING AND FINANCE,

MUMBAI
EXAMINATION: JAIIB
Question paper pattern for JAIIB examination
(I) PRINCIPLES OF BANKING
1 Message switcher is used to :
(a) Store and forward data to large number of terminals over a single communication channel
(b) Send more than one signal simultaneously over a single communication channel
(c) Intercept and handle communication activities for the host computer
(d) All of these
Correct Answer (a)
2. NABARD extends refinance to :
(a) State Land Development Banks and State Co-operative Banks.
(b) Regional Rural Banks.
(c) Commercial Banks and other Financial Institutions approved by RBI.
(d) All of these
Correct Answer (d)
3. The number of product items in a product line is called:
(a) Count
(b) Depth
(c) Length
(d) Width
Correct Answer (c)
4. Which of the following is affected by mistakes made by a firm in Pricing?
(I) Profit, (II) Growth, (III) Future Prospects
(a) (I)
(b) (II) and (III)
(c) (I) and (II)
(d) (I), (II) and (III)
Correct Answer (d)
5. Which of the following statements is not true?
(a) A minor may be appointed as an agent to act on behalf of his principal.
(b) A minor agent cannot be held responsible to his principal.
(c) The principal may be held responsible to the third parties in respect of the acts of his minor
agent.
(d) A minor may employ an agent to act on his behalf.
Correct Answer (d)
6. Non-resident (External) Accounts are opened in the form of :
(a) Savings accounts
(b) Current accounts
(c) Recurring and fixed deposit accounts
(d) All of these
Correct Answer (d)
7. Cash credit facility against merchandise (i.e., goods) is allowed by way of :
(a) Hypothecation (b) Pledge (c) (a) and (b) (d) None of these
Correct Answer (c)

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8. A valid pledge can be in respect of :
(a) goods or any other movable property (b) Stocks and shares
(c) documents of title to goods (d) All of these
Correct Answer (d)
9. Syndicated credit means:
(a) an agreement between two or more lending institutions to provide the credit facilities to a
borrower on the basis of common loan documentation.
(b) A facility which is granted to a Syndicate of stock brokers.
(c) Credit facilities sanctioned by Syndicate Bank
(d) None of these
Correct Answer (a)
10. A garnishee order is operative only when the relationship between two is of :
(a) Bailor and Bailee (b) Debtor and Creditor
(c) Trustee and Beneficiary (d) Principal and Agent
Correct Answer (b)

(II) ACCOUNTING & FINANCE FOR BANKERS

1. What annual rate of simple interest was paid if Rs. 500 earned Rs. 55 as interest in 2 years and 9
months?
(a) 3%
(b) 2%
(c) 3.5%
(d) 4%
Correct Answer (d)
2. At a certain rate of simple interest, a sum doubles itself in 10 years. It will treble itself in..
(a) 12 years
(b) 15 years
(c) 18 years
(d) 20 years
Correct Answer (d)
3. Recording business transactions on the basis of documents is to observe the accounting assumption
of ...
(a) Money measurement
(b) Going concern
(c) Accounting equity
(d) Verifiable objectives
Correct Answer (d)
4. Credit entries will decrease the balance of ...
(a) Capital Account
(b) Cash Account
(c) Creditor A/c
(d) Purchases Returns Account
Correct Answer (b)
5. Sales Book is maintained to record ..
(a) sale of fixed assets
(b) all cash sales of goods only
(c) all credit sales of goods only
(d) all sales (cash and credit)
Correct Answer (c)
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6. When A advances money to B in the course of joint venture, then A debits such money to..
(a) Joint Venture a/c
(b) Joint Bank a/c
(c) B's Personal a/c
(d) Expenses a/c
Correct Answer (a)
7. Maintenance of fixed assets is an example of ..
(a) revenue expenditure
(b) capital expenditure
(c) deferred revenue expenditure
(d) All of the above
Correct Answer (a)
8. Income & Expenditure Account is a ..
(a) Personal Account
(b) Real Account
(c) Nominal Account
(d) Either Real Account or Personal Account
Correct Answer (c)
9. Goodwill is an example of ..
(a) fictitious asset
(b) current asset
(c) tangible asset
(d) intangible asset
Correct Answer (d)
10. In the event of death of a partner, the accumulated profits and losses are shared by the partner in ..
(a) capital ratio
(b) new ratio
(c) old ratio
(d) sacrifice ratio
Correct Answer (c)

(III) LEGAL ASPECTS OF BANKING

1. What is nomination?
(a) A facility given to depositors by the government.
(b) It confers a right to the nominee to receive payment of a deposit after death of depositors
(c) It is a process of appointing legal heir by the depositor
(d) It is a part of will on behalf of a depositor
Correct Answer (b)
2. As per section 5 (f) of the Banking Regulation Act, 1949, time liabilities men:
(a) time deposits
(b) liabilities payable after a specified time
(c) liabilities which are not demand liabilities
(d) None of these
Correct Answer (c)
3. A company :
(a) Is a legal entity
(b) Has perpetual succession

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 (c) Has its own common seal
(d) All of these
Correct Answer (d)
4. The definition of 'contract of indemnity' as given in the Indian Contract Act includes:
(a) cases where the loss is caused by the conduct of the promisor himself or by the conduct of any
other person
(b) Implied promises to indemnify
(c) Cases where loss arises from accidents and events not depending on the conduct of the promisor
(d) None of these
Correct Answer (a)
5. What is meant by security agreement?
(a) An agreement, instrument or any other document or arrangement under which security interest
is created in favour of secured creditor
(b) Agreement given by the Borrower to the secured creditor permitting the securitization company
to acquire the security asset
(c) Any agreement that creates security in favour of securitization company
(d) Agreement entered into between securitization company and the Borrower
Correct Answer (a)
6. What is settlement under the Banking Ombudsman Scheme?
(a) An agreement reached by the parties either by conciliation or mediation by the Banking
Ombudsman
(b) The order or award passed by the Banking Ombudsman
(c) Settlement reached out of court by the parties
(d) Withdrawal of the complaint after mutual settlement
Correct Answer (a)
7. The difference between Bailment and Pledge is :
(a) Pledge is the Bailment of goods for specific purpose i.e., security for a loan
(b) Pledgee has right to sale, the Bailee does not have
(c) Pledgee has no right of using the goods pledged, where as bailee can
(d) All of these
Correct Answer (d)
8. Which of the following are not documents of title?
(a) Quotation obtained for the goods.
(b) Railway Receipt
(c) Bill of Lading/Dock warrant
(d) Warehouse certificate
Correct Answer (a)
9. The features of FOB (Free On Board or Rail) are :
(a) Seller has to deliver goods at the ship named in the contract.
(b) Seller has to bear all the expenses up to and including shipment on behalf of buyer.
(c) The buyer has to bear freight insurance and subsequent expenses.
(d) All of these
Correct Answer (d)
10. When a guaranteed loan is repaid by the guarantor the :
(a) guarantor steps in to the shoes of the bank
(b) securities in possession of creditors will be handed over to him
(c) guarantor is not entitled to the securities
(d) (a) and (b) above
Correct Answer (d)