1. Which of the following statement is not correct regarding
importance of credit?
Credit enables the consumer to spend more than what
they would have spent otherwise.
Increased demand induces the producer to produce
more and leads to increase in GDP
Excessive availability of credit for unproductive
purpose, does not affect the inflationary pressure in
any manner.
RBI makes uses of monetary tools to regulate the credit
Tradiotionally, the private money landers played an
important role in meeting credit needs of Individuals in
India, particularly in rural areas.
After nationalization of banks BRI was able to exercise
more control on the banks in credit matters
Which of the following is not an important principle of
credit?
Purpose of credit
Risk spread
Safety of funds
None of above
The different type of borrowers are regulated under
different Law. Which of the following does not match in
this context:
Partnership Act –Indian Partnership Act 1932
Companies – Companies Act 1956
Individuals -Limitation Act
Cooperative Societies – Co-Op Societies Act of Socities
Registration Act
Which of the following statement is not correct:

2. Credit can be fund based or non fund based
In case of fund based loans, there is actual transfer of
funds
In case of non fund based loans, the transfer of
funds never takes place
A bank guarantee falls under the on fund based
category
Which of the following is not a form of on funds based
commitment on the part of the bank
Letter of credit and bank guarantee
Co-aceptance
Forward contracts and other derivaties
None of the above
Banks have to report their business for public reporting
purpose, based on the geographical segments as:
Domestic transactions and international
transactions
Rupee transactions and foreign currency transaction
Banking business transactions and non banking
business transaction
All the above
The retail banking segment is one that fulfills the
following criteria
A] Orientation criterion
B] product criterion
C] Granularity criterion
D] low value of individual exposure
As per orientation criterion for retail banking segment,
the exposure should be to individuals or small business.
The small business for this purpose is one, where the
annual turnover is less than:

3. Rs. 50 crores
As per granularly criterion for retail banking segment,
the agreegate exposure to one counterparty should not
exceed:
0.2% of the overall retail potfolio
The loan policy of bank is framed by
Individuals bank for themselves
Which is the following factors influence the formulation
of the loan policy
A] market condition
B] loan policy of the other banks
C] RBI guidelines
D] government policy
All of above
The loan policy of a bank normally covers the guidelines
on the following aspects:
Exposure limits for single and group borrowes
Exposure limits for different industries, activities etc.
Discretionary loaning powers for sanctioning of credit
proposal, at various level
All of above
Which of the following is part of loan delivery process in
a bank?
Documentation only
Documentation and creation of charge over securities
only
Documentation, creation of charge over securities,
method of delivery onl

4. Documentation, creation of charge over securities,
method of deliveryand procedure for disbursement
Which of the following activity is not a category of
priority sector lending:
Agriculture
SME
Retail trade & education loan
Micro credit and House loans
Which among the following is correct for overall priority
sector lending target for banks:
For domestic banks and foreign banks with 20 or more
branches it is 40% and for foreign banks with less than
20 branhes it is 32% of ANBC or credit equivalent of of-
balance sheet exposure, whichever is higher
Within the prority sector lending targets for indirect
agriculture, which of the following is not correct:
It is maximum 4.5% ANBC or creit equivalent of off-
balance sheet exposure whichever is higher
It is restricted to 4.5 % of total agriculture advances
Lending beyond 4.5% of ANBC will not be taken into
account for computing 18% lending to agriculture
All indirect agriculrure advances will be taken as part of
priority sector lensing
Lending target for weaker section within the priority
sector are 10% of ANBC or creit equivalent of off
balance sheet exposure whichever it higher OR 25% of
PSL

5. Farmers cab be granted post harvet loans against
hypothecation or pledge or warehouse receipt for an
amount upto Rs. 25 lacs upto 12 months
Which of the following is not correct in connection with
PSL target for MSE:
For domestic banks, the overall target is 10% of
ANBC or credit equivalent of off balance sheet
exposure whichever is higher
Number of micro enterprise loan accounts to increase
10% annually
Within MSE lending, minimum 60% should be given to
micro enterpreise
Within MSE leaning 40% can be given to small
enterprise
Which of the following is correct with regard to lending
targets for export credit:
For Indian banks there is no target and foreign banks it
is 12% of ANBC
For Indian banks it is 10% of ANBC and foreign banks it
is 12% of ANBC
There is no specific target for export credit
For Indian banks there is no target within priority sector
although it is 10% of ANBC and foreign banks it is 10%
of ANBC within PSL
MSE (Service), engaged in providing services fulfilling
the investment criteria as per MSME Development Act
2006 can be allowed loan upto Rs. 1 crores to be
classified as direct MSE advance

6. Housing Unit (per family) for purchase or construction of
house, upto Rs. 25 lacs sanctioned in metropolitan
centres, can be classified as Housing Loans under PSL
For banks, which of the DRI target is not correct:
The target is applicable both for domestic banks
and foreign banks
40% of DRI loans should be to SC or ST
Two third of DRI loans should eb disbursed through
rural and semi urban branches of banks
There is no overall specific target
For a small enterprise in servicing, which of the
following investment criteria is correct:
Investment in equipment above Rs. 10 lac but upto
Rs. 2 crores
For a micro enterprise which of the following investment
criteria is correct:
Investment in equipment upto Rs. 10 lacs ad in P&M
upto Rs. 25 lacs
All advances granted to units in KVI sector irrespective
of size of operation, location and amount of original
investment in P&M are considered as:
Advances to micro enterprise for 60% within MSE
Housing loans (per family) for repair to the damaged
dwelling units can be classified as housing loan under
priority sector if the loan amount is upto Rs. 5 lacs in
urban and metro centers
Education loan can be allowed by a bank to the
following extent (which one is correct):

7. Education in India Rs. 10 and Education abroad Rs.
20 laces
Maximum ceiling on amount of loan given to input
dealer does not match in which of the following case:
Fertilizer delaer upto Rs. 1 crores
Poultry feed and cattle feed dealer upto Rs. 1 crroes
Agriculture machinery and irrigation equipment upto Rs.
1 croreos
None of above
A cooperative society of farmers to dispose off the
produce of the farmers, can be allowed maximum loan
of Rs. 5 crores as Indirect advances to agriculture.