Banking Services and Operations

A bank authorised by the issuing company to issue GDRs/ADRs against the issue of FCCBs/ordinary shares of the issuing company is known as an ODB, overseas depository bank.

Correct Answer: Bank will not accept such request.

The bank insurance model (BIM), also sometimes known as bancassurance or allfinanz, is the partnership or relationship between a bank and an insurance company, or a single integrated organisation, whereby the insurance company uses the bank sales channel in order to sell insurance products. 

Correct Answer: If after mandate, a power of attorney is given by the customer in favour of another person, the mandate ceases to operate.

In case of a debit card, a customer can make payment to the extent of balance lying in his account. In case of a credit cards, payments have to be made afterwards.

As per Rules under Prevention of Money Laundering Act 2002, the banks are required to obtain the following documents:

(i)   Certificate of incorporation and Memorandum and Articles of Association (ii)  Resolution of the Board of Directors to open an account and identification of those who have authority to operate the account (iii) Power of Attorney granted to its managers, officers or employees to transact business on its behalf (iv) Copy of PAN allotment letter (v)  Copy of the telephone bill

Thus, all the given documents are important. 

One's complaint will not be considered if:

• One has not approached his bank for redressal of his grievance first.
• The subject matter of the complaint is pending for disposal / has already been dealt with at any other forum like court of law, consumer court etc.
• Frivolous or vexatious
• The institution complained against is not covered under the scheme.
• The subject matter of the complaint is not within the ambit of the Banking Ombudsman.
• If the complaint is for the same subject matter that was settled through the office of the Banking Ombudsman in any previous proceedings.

Section 6(1) in BANKING REGULATION ACT,1949 permits: the buying, selling and dealing in bullion and specie, undertaking and executing trusts, undertaking the administration of estates as executor, trus­tee or otherwise and the providing of safe deposit vaults.

Introduction is not necessary for opening of accounts under PML Act and Rules or Reserve Bank’s extant KYC instructions. Banks should not insist on introduction for opening bank accounts of customers. All of the above statements are correct.

Amalgamation is the combination of one or more companies into a new entity. An amalgamation is distinct from a merger because neither of the combining companies survives as a legal entity. A completely new entity is formed to house the combined assets and liabilities of both companies. Thus, option 2 is the correct answer.

If a property's title has multiple mortgage liens and the loan secured by a first mortgage is paid off, the second mortgage lien will move up in priority and become the new first mortgage lien on the title. Documenting this new priority arrangement will require the release of the mortgage securing the paid-off loan. Thus, the priority will be according to the date. As mortgage in favour of Bank A was on January 14, 2007 and was the earliest, thus, will be dealt first and subsequently Bank B (January 28, 2007) and Bank C (February 10, 2007).

Correct Answer: Overdraft which is not availed

Shell Bank refers to the financial institution that does not have a physical presence in any country.

'Current account transaction' is a transaction other than a capital account transaction and such transaction includes payments due in connection with foreign trade, interest on loans and foreign travel, education and medical care of parents, spouse and children. 

In case the bank guarantees on behalf of one of its customers against some payment to be deposited by the customer in a pending court case, such guarantees are classified under statutory guarantees.