www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 1 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… ALL THE VERY BEST FOR YOUR EXAMS SAMPLE QUESTIONS FOR CAIIB RETAIL BANKING Though we had taken enough care to go through the questions, we request everyone to update yourself with the latest information through RBI website and other authenticated sources. In case you find any incorrect/doubtful information, kindly update us also (along with the source link/reference for the correct information). ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 2 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… Retail Banking ABC company just issued 50 Lakhs Rs. 100-par bonds payable carrying 8% coupon rate and maturing in 15 years. The bond indenture requires the company to set up a sinking up to pay off the bond at the maturity date. Semi-annual payments are to be made to the fund which is expected to earn 5% per annum. Find the amount of required periodic contributions. a. 1,83,81,820 b. 1,81,83,820 c. 1,13,88,820 d. 1,08,83,820 Ans - c Solution The future value required to be accumulated equals 50 Crores (50,00,000 × 100) Since the payments are semi-annual, the periodic interest rate = 5% ÷ 2 = 2.5% Number of periods = 2 × 15 = 30 Periodic Contribution to Sinking Fund PMT(FV) = ( FV / (((1+i)^n - 1) / i) ) PMT = Payment per Time Period FV = Future Value i = Interest Rate per Time Period n = Number of Time Periods = (50,00,00,000 / (((1+0.025)^30 - 1) / 0.025) = (50,00,00,000 / ((2.097567579 - 1) / 0.025) = (50,00,00,000 / (1.097567579 / 0.025) = (50,00,00,000 / 43.90270316) = 1,13,88,820 So, ABC company must deposit Rs. 1,13,88,820 at the end of each 6 months for 15 years in order to accumulate enough money to pay off the bonds when they are due. ............................................. XYZ Publishers buy a machine for Rs 20000. The rate of depreciation is 10%. Find the depreciated value of the machine after 3 years. Also find the amount of depreciation. What is the average rate of depreciation? a. 7.066 b. 8.033 ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 3 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… c. 9.033 d. 10.066 Ans - c Solution Original value of machine = Rs 20000, Rate of depreciation, i = 10% Hence the book value after 3 years = 20000 = 20000 (0·9)^3 = 20000 (0·729) = Rs. 14580 Amount of depreciation in 3 years = Rs 20000 - Rs 14580 = Rs 5420 Average rate of depreciation in 3 years = (5420/20000) x (100/3) = 9·033% ............................................. A company wants to set up a sinking fund for the repayment of a loan of Rs. 10 Crores at the end of four years. It makes equal deposits at the end of each month into a fund that earns interest at 12% per year compounded monthly. Determine the size of each deposit. Also construct a sinking fund schedule (the first three months only). a. 15,33,383 b. 15,88,383 c. 16,33,383 d. 16,88,383 Ans - c Solution : Loan is 10 Crores to be repaid at the end of 4 years. Monthly deposits are made. Interest rate is 12% per year compounded monthly. This is a Payment for a Future Value type problem. PAYMENT FOR A FUTURE VALUE EQUATION PMT(FV) = ( FV / (((1+i)^n - 1) / i) ) PMT = Payment per Time Period FV = Future Value ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 4 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… i = Interest Rate per Time Period n = Number of Time Periods FV = Rs. 10,00,00,000 i = 0.12 / 12 = 0.01 n = 12*4 = 48 Intermediate calculations would be: (1.01)^48 - 1 = 1.612226078 - 1 = 0.612226078 So, PMT = 10,00,00,000 / (0.612226078/.01) which would become: PMT = Rs. 16,33,383 Also, sinking fund schedule for the first three months are : End of month 1 = Rs. 16,33,383.54 End of month 2 = Rs. 16,33,383.54 * (1+i) = 16,49,717.378 + p = 32,83,100.92 End of month 3 = Rs. 32,83,100.92 * (1+i) = 33,15,931.929 + p = 49,49,315.47 ............................................. Reverse Mortgage (RML) Numerical Questions : Value of the property - Rs. 50,00,000 Loan Amount - 80% Loan Tenor - 15 years Rate of interest - 10% Calculate Monthly Installment Here, PV = 5000000 LTVR = 80/100 = 0.8 n = 15 * 12 = 180 I = 10/(12*100) = 10/1200 = 0.008333 = (5000000*0.8*0.008333)/((1+0.008333)^180-1) = Rs. 9651 So, the Monthly installment = Rs. 9651 ............................................. ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 5 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… You had purchased a license to engage in the transportation services for which you paid 5000. Moreover, you paid 30000 for the purchased car. You hope to replace a car with a new one every three years, hoping to allocate 30000 for a new car. In addition, you can sell the car for 10000. Determine the costs of this business, if the interest rate is 12%. a. 34892 b. 48932 c. 84392 d. 94832 Ans - c Solution : We have that the initial business costs are 35000, the replacement costs are R = 30000 - 10000 = 20000, In addition, i = 0.12 c = 3 p = 1.12^3 - 1 = 1.404928 - 1 = 0.404928, Then K = 35000 + (20000/0.404928) = 84392 Thus, the capitalized general business costs will be 84392 ............................................. Mr. Raj has bought : 2000 units of a stock at Rs. 20 on 1 Jan 2013, 2000 more units at Rs. 30 on 1 May 2013 2000 more units at Rs. 40 on 1 December 2013 and sold 5000 units at Rs. 50 on 30 December 2014, Should he go ahead with Indexed Capital Gains Tax or Non Indexed Capital Gains Tax to save some Tax. ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 6 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… CII for 2012-13 = 852 CII for 2013-14 = 939 CII for 2014-15 = 1024 a. Indexed Capital Gains Tax b. Non Indexed Capital Gains Tax c. Both are same d. None of the above Ans - b Solution : Each purchase/sale transaction is matched on a First-In-First-Out basis. All the units sold have been held for over one year, so long term capital gains tax applies. So here, out of the 5000 units sold, we have three separate pieces to be considered. The First 2000 are matched to the first 2000 bought, appropriately indexed, gains calculated and tax calculated. Here you get two years of Indexation (2012-13 and 2014-15) Indexed Purchase Price = 40,000 * (1024/852) = 48,075 Capital Gain = 100000 – 48075 = 51925 The non-indexed gain is Rs. (100000 - 40000) = Rs. 60000 Indexed Capital Gain: Rs. 51925 Non Indexed Capital Gain: Rs. 60000 The First 2000 are matched to the first 2000 bought, appropriately indexed, gains calculated and tax calculated. Here you get two years of Indexation (2013-14 and 2014-15) Indexed Purchase Price = 60,000 * (1024/939) = 65431 Capital Gain = 100000 – 65431 = 34569 The non-indexed gain is Rs. (100000 - 60000) = Rs. 40000 Indexed Capital Gain: Rs. 34569 Non Indexed Capital Gain: Rs. 40000 ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 7 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… The next 1000 units are sold at Rs. 50 and bought at Rs. 40, appropriately indexed, gains calculated and tax calculated. Here you get two years of Indexation (2013-14 and 2014-15) Indexed Purchase Price = 40,000 * (1024/939) = 43620 Capital Gain = 50000 – 43620 = 6380 The non-indexed gain is Rs. (50000 - 40000) = Rs. 10000 Indexed Capital Gain: Rs. 6380 Non Indexed Capital Gain: Rs. 10000 So let’s add them all up. Indexed Total Capital Gain = 51925 + 34569 + 6380 = 92874 Capital Gains Tax Appl (%) = 20% Capital Gains Tax = 18575 Non-Indexed Total Capital Gain = 60000 + 40000 + 10000 = 110000 Capital Gains Tax Appl (%) = 10% Capital Gains Tax = 11000 He should go ahead to choose the non-indexed option to save some tax of Rs. (18575 - 11000) = Rs. 7575/-. ............................................. Mr. Naveen borrowed an amount of Rs. 50000 for 8 years @ 18% roi. What shall be monthly payment? a. 986 b. 968 c. 896 d. 869 Ans – a Explanation : Here, ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 8 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… P = 50000 R = 18% = 18 % ÷ 12 = 0.015 monthly T = 8 yrs = 96 months EMI = P * R * [(1+R)^T/(1+R)^T-1)] EMI = 50000 * 0.015 * 1.01596 ÷ (1.01596 – 1) = 986 ............................................. Mr. Anup had applied for a Home loan of Rs. 10.00 Lakhs. The estimation of total cost for which is Rs. 11 Lakhs. What is the maximum loan amount which can be sanctioned to him? a. Rs. 8,25,000 b. Rs. 8,80,000 c. Rs. 10,00,000 d. Rs. 11,00,000 Ans - b ............................................. ISP in Internet Banking stands for ........ ? a. Internet Service Punching. b. Internet Service Providers. c. Internal Security Procedure. d. Internal Security Provider. Ans - b ............................................. Which of following is part of direct agriculture under Priority sector ? a. Loans upto 5 crore to dealers in fertilizers,pesticides,seeds etc. b. Loans to distressed farmers indebted to non-institutional lenders. c. Loans to small and marginal farmers for purchase of land for agricultural purposes. d. b & c Ans - d ............................................. ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 9 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… What is appropriate about incremental loans by banks under MSME to be reckoned as priority sector lending ? a. The incremental bank loans to medium service enterprises extended after November 13,2013, up to the credit limit of Rs. 10 crores, would qualify as Priority Sector Advances. b. In line with the above, similar incremental loans to micro and small service enterprises upto the credit limit of Rs. 10 crores, (as against the present ceiling of Rs. 5 crores), shall also be treated as priority sector advances. c. The above dispensation will remain in force up to March 31, 2014 d. All the above Ans - d ............................................. Who is small & marginal farmer ? a. Who holds land upto 5.50 acres irrespective whether irrigated or unirrigated. b. Farmers with landholding of up to 1 hectare is considered as Marginal Farmers. Farmers with a landholding of more than 1 hectare but less than 2 hectares are considered as Small Farmers. c. Farmers with landholding of up to 1 hectare is considered as Marginal Farmers. Farmers with a landholding of more than 1 hectare but less than 2 hectares are considered as Small Farmers. For the purpose of priority sector loans ‘small and marginal farmers’ include landless agricultural labourers, tenant farmers, oral lessees and share-croppers, whose share of landholding is within above limits prescribed for “Small and Marginal Farmer. d. Farmer who holds land upto 5 acre small and upto 2.50 acre marginal. Ans - c ............................................. An individual took a loan of Rs. 10.00 Lakhs for purchasing a plot of land during F.Y. 2005-06 & has paid around Rs. 1,10,000 towards Interest & around Rs. 57,000 towards principal during F.Y. 2006-07. He has not made any other contribution under Sections 80C, 80CCC, or 80CCD. He will be able to claim deduction of ……towards principal. a. Rs. 1,50,000 b. Rs. 1,10,000 c. Rs. 57,000 d. Rs. 0 Ans - d ............................................. ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442 www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in 10 Facebook Groups - JAIIB CAIIB STUDY MATERIALS / CAIIB DISCUSSION BANK PROMOTION EXAMS / ONLY FOR BANKERS [email protected], [email protected], 09994452442 ………………………………………………………………………………………………………………………………………………………………… Misselling retail loans by a DSA (Direct Selling Agent) and the resultant dissatisfaction of the customer results in ...... risk for the bank. a. credit b. liquidity c. operational d. reputation Ans - d ............................................. Which of the following facilities are available for mobile banking customers: a. Facility for using banking facility from anywhere b. Easy operations - instructions carried out by self. c. Option to pay utility bills. d. All the above. Ans - d ............................................. A credit Card Bill is Rs. 27200, Amount is not paid on the due date. How much will be the interest charged for the next billing cycle of 30 days. if rate of interest 2.75% p.a. a. 758.67 b. 745.89 c. 801.28 d. 768.37 Ans – b Solution Daily interest =27200*2.75%*12 month/36500 =24.8630 Interest payable for next installment Cycle=daily interest* no of days =24.8630*30 = 745.89 ............................................. ………………………………………………………………………………………………………………………………………………………………… www.jaiibcaiibmocktest.com, www.bankpromotionexams.com, www.onlyforbankers.in [email protected], [email protected], 09994452442