Retail Wholesale International Banking MCQ | JAIIB PPB

Retail Wholesale International Banking MCQ

Here is the quiz series for Principles and Practices of Banking. This quiz covers the topics of Retail Wholesale International Banking MCQ. Answers are given at the end of the quiz.

Q1. In which year CIBIL was incorporated?  

  1. 2000
  2. 2001
  3. 2003
  4. 2005

Answer: (1)
Established in 2000, TransUnion CIBIL Limited (formerly known as Credit Information Bureau (India) Limited) is India’s first Credit Information Company. It collects and maintains credit-related information of individuals and corporates, including loans and credit cards.

Q2. Which among the following is not a fund based service offered by banks?
  1. Working capital
  2. Export credit
  3. Bill discounting
  4. Bank guarantee

Answer: (4)

  • Working Capital: The working capital finance is a loan that is taken to finance a company’s everyday operations. These loans are not used to buy long-term assets or investments and are, instead, used to provide the working capital that covers a company’s short-term operational needs.
  • Export financing is a cash flow solution for exporters. Export Finance facilitates the commerce of goods internationally.
  • Bill Discounting is a trade-related activity in which a company’s unpaid invoices which are due to be paid at a future date are sold to a financier
  • A bank guarantee is a promise from a lending institution that ensures the bank will step up if a debtor can’t cover a debt.
Q3. Name the banking service that caters to the cross border transactions? 
  1. Wholesale Banking
  2. International Banking
  3. Retail Banking
  4. Investment Banking

Answer: (2)
International banking is a type of banking that has presence across international borders. It is a financial entity that offers financial services like lending opportunities and payment accounts to foreign clients

Q4. Banks provides pre-shipment finance facility to exporters. This type of facility is called?  
  1. Bank Guarantee
  2. Working Capital
  3. Export Packing Credit
  4. Investment Credit

Answer: (3)
‘Pre-shipment / Packing Credit’ means any loan or advance granted or any other credit provided by a bank to an exporter for financing the purchase, processing, manufacturing or packing of goods prior to shipment / working capital expenses towards rendering of services on the basis of letter of credit opened in his favour or in favour of some other person, by an overseas buyer or a confirmed and irrevocable order for the export of goods / services from India or any other evidence of an order for export from India having been placed on the exporter or some other person, unless lodgement of export orders or letter of credit with the bank has been waived.

Q5. Which account is  maintained in foreign currency with an Authorised Dealer that enables foreign exchange earners to credit 100 per cent of their foreign exchange earnings to the account?  
  1. Exchange Earners’ Foreign Currency Account (EEFC)
  2. NOSTRO Account
  3. VOSTRO Account
  4. FFC

Answer: (1)
Exchange Earners’ Foreign Currency Account (EEFC) is an account maintained in foreign currency with an Authorised Dealer Category – I bank i.e. a bank authorized to deal in foreign exchange. It is a facility provided to the foreign exchange earners, including exporters, to credit 100 per cent of their foreign exchange earnings to the account, so that the account holders do not have to convert foreign exchange into Rupees and vice versa, thereby minimizing the transaction costs.

Q6. Which model allows banking company to enter into strategic alliance with insurance companies for distribution of insurance products across their banking network? 
  1. Bancinsurance
  2. Bankassurance
  3. Bancassurance
  4. Bankinsurance

Answer: (3)
Bancassurance means selling insurance through banks. Banks and insurance companies collaborate in a partnership, where the bank sells the partner insurance company’s products to its customers.

Q7. Which instrument allows investors to hold shares in equity of other countries?  
  1. Bonds
  2. Depository receipts
  3. Debentures
  4. Fixed Deposits

Answer: (2)
A depository receipt (DR) is a negotiable certificate issued by a bank representing shares in a foreign company traded on a local stock exchange. The depositary receipt gives investors the opportunity to hold shares in the equity of foreign countries and gives them an alternative to trading on an international market

Q8. Who issues participatory notes?  
  1. RBI
  2. Foreign Companies
  3. SEBI
  4. Foreign Institutional Investor (FII)

Answer: (4)
A participatory note, commonly known as a P-note or PN, is an instrument issued by a registered foreign institutional investor (FII)  to an overseas investor who wishes to invest in Indian stock markets without registering themselves with the market regulator, the Securities and Exchange Board of India (SEBI)

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