CS Final - Group II : Banking and Insurance Law and Practice - December 2009

CS Final - Group II • Banking and Insurance Law and Practice • December 2009

This Paper has 62 answerable questions with 0 answered.

Roll No………
Time allowed : 3 hours	Maximum marks : 100
Total number of questions : 8	Total number of printed pages : 3

PART — A
(Answer Question No.1 which is compulsory and any two of the rest from this part.)

PART — A

(Answer Question No.1 which is compulsory
and any two of the rest from this part.)

(a)

Name the apex institution in the following areas :

(i)

Agriculture and rural development

(0)

(ii)

Export sector

(0)

(iii)

Housing sector

(0)

(iv)

Depository services

(0)

(v)

Currency note printing.

(0)

(1 mark each)

(b)

Choose the most appropriate answer from the given options in respect of the following :

(i)

Prime lending rate is determined by –

(a)	RBI
(b)	Each bank
(c)	The Finance Minister, Govt. of India
(d)	Money market.

(0)

(ii)

Repo rate is prescribed by the Reserve Bank of India in –

(a)	Credit and monetary policy
(b)	Economic survey
(c)	Annual budget
(d)	Annual general meeting.

(0)

(iii)

Foreign exchange reserves consist of –

(a)	Gold
(b)	Foreign currency assets
(c)	Special Drawing Rights (SDRs)
(d)	All of the above.

(0)

(iv)

Money at call and at short notice in India are granted –

(a)	To Bill Brokers
(b)	To Stock Brokers
(c)	By one bank to another
(d)	By RBI to the government.

(0)

(v)

Focus of Narasimhan Committee-II has been on reforms in –

(a)	Corporate sector
(b)	Financial sector
(c)	Banking sector
(d)	Infrastructure sector.

(0)

(1 mark each)

(c)

Re – write the following sentences after filling-in the blank spaces with appropriate word(s)/figure(s) :

(i)

____________ stamps are affixed on printed forms, like hypothecation deed, pledge agreement, letter of guarantee, etc.

(0)

(ii)

____________ are permitted to raise capital through the issue of GDRs or ADRs within the limits prescribed for FDI by the Government of India.

(0)

(iii)

____________ is risk capital supplied to high technology growing companies particularly in the form of equity participation.

(0)

(iv)

Rural banking institutions under the Banking Regulation Act, 1949 are regulated by ____________.

(0)

(v)

The current Cash Reserve Ratio (CRR) prescribed by the Reserve Bank of India is ____________.

(0)

(1 mark each)

(d)

State, with reasons in brief, whether the following statements are correct or incorrect :

(i)

Every cheque is a bill of exchange.

(0)

(ii)

Rate of interest charged by banking companies is subject to scrutiny by courts.

(0)

(iii)

Co–operative banks function within a given area.

(0)

(iv)

The banker’s lien is not barred by the limitation laws.

(0)

(v)

An increase in Statutory Liquidity Ratio (SLR) by the Reserve Bank of India increases liquidity of the commercial banks.

(0)

(1 mark each)

Attempt any three of the following :

(i)

‘Effective and efficient management of advances portfolio is the key to successful banking.‘� Comment.

(0)

(ii)

List the documents required by banks as per the know your customer (KYC) norms while opening accounts of companies.

(0)

(iii)

"Bank acts as a trustee to its customers." Elaborate.

(0)

(iv)

What are the various constituents of financial markets? How are these regulated?

(0)

(5 marks each)

Attempt any three of the following :

(i)

Discuss the effects of ‘account payee’ crossing and ‘not negotiable’ crossing of a cheque.

(0)

(ii)

Give a brief account of asset-liability management process in banking.

(0)

(iii)

What is the role of treasury management department of a bank with respect to its own funds management ?

(0)

(iv)

List out the parties involved in a ‘letter of credit’ and also state their roles and responsibilities.

(0)

(5 marks each)

(a)

Write a short note on State co–operative banks set–up in India.

(0)

(3 marks)

(b)

Illustrate nature of complaints considered by the Banking Ombudsman.

(0)

(3 marks)

(c)

‘For a cheque payable to order purport to be endorsed by or on behalf of the payee, the drawee is discharged by payment in due course.‘� Comment.

(0)

(3 marks)

(d)

Differentiate between ‘pledge’ and ‘hypothecation’.

(0)

(3 marks)

(e)

Distinguish between ‘demand bill’ and ‘usance bill’.

(0)

(3 marks)

PART — B
(Answer Question No.5 which is compulsory and any two of the rest from this part.)

PART — B

(Answer Question No.5 which is compulsory and any two of the rest from this part.)

(a)

Diwan takes out an insurance policy on his wife’s life and later gets a divorce. Is he entitled to the proceeds of the insurance policy upon the death of his former wife ? Give reasons in support of your answer.

(0)

(2 marks)

(b)

Anup sells his house to Naresh and a fire occurs before the insurance on the house is cancelled. Can Anup claim the insurance amount ? Give reasons in support of your answer.

(0)

(2 marks)

(c)

Distinguish between the following :

(i)

‘Term plan’ and ‘endowment plan’.

(0)

(ii)

‘Morale hazard’ and ‘moral hazard’.

(0)

(iii)

‘Third party policy’ and ‘comprehensive policy’.

(0)

(2 marks each)

(d)

State, with reasons in brief, whether the following statements are correct or incorrect :

(i)

Self-insurance is the same as insurance.

(0)

(ii)

Liability can be insured.

(0)

(iii)

Marine insurance is crowned as mother of all insurances.

(0)

(iv)

An insurance company can predict events more accurately if the frequency of occurrence is high.

(0)

(v)

Insurable interest and principle of utmost good faith are applicable to the life insurance contract.

(0)

(vi)

With respect to credit insurance and claim, the protracted default occurs within 90 days from the original due date.

(0)

(1 mark each)

(e)

Choose the most appropriate answer from the given options in respect of the following :

(i)

IRDA had categorised the licensing of surveyors into –

(a)	One category
(b)	Two categories
(c)	Three categories
(d)	Four categories.

(0)

(ii)

Those who primarily plan and schedule the work required to process a claim are –

(a)	Claim examiners
(b)	Claim adjustors
(c)	Insurance agents
(d)	Insurance companies.

(0)

(iii)

The minimum paid-up equity capital required for registration to carry on business of life insurance or general insurance is –

(a)	Rs.100 crore
(b)	Rs.200 crore
(c)	Rs.500 crore
(d)	Rs.1,000 crore.

(0)

(iv)

As per IRDA norms, for fire insurance business what percentage of the amount of premium, net of re-insurance, received or receivable during the preceding twelve months is required to be set aside towards reserve for unexpired risk –

(a)	50%
(b)	100%
(c)	20%
(d)	None of the above.

(0)

(1 mark each)

Attempt any three of the following :

(i)

What coverage is available under the public liability insurance policy ? What other add on benefits can be taken by paying additional premium ?

(0)

(ii)

‘The first function of a risk manager is to identify all pure loss exposures.‘� Explain.

(0)

(iii)

What is convertible term insurance plan ? At what period of time the option of conversion can be exercised ?

(0)

(iv)

What are five major exclusions under the cover of the standard fire and special perils policy ?

(0)

(5 marks each)

Attempt any three of the following :

(i)

What are the demographic assumptions needed in pricing an insurance product?

(0)

(ii)

State the role of claim examiners in life and health insurance business.

(0)

(iii)

State the provisions related to filing of compensation suits under the motor vehicle insurance.

(0)

(iv)

Explain ‘credit derivatives’ with few examples.

(0)

(5 marks each)

Write short notes on any five of the following :

(i)

Nominee in case of death of an insured

(0)

(ii)

Underlying principles of motor vehicle insurance policies

(0)

(iii)

E–insurance

(0)

(iv)

Risk management insurance

(0)

(v)

Licensing of surveyors and loss assessors

(0)

(vi)

Accounting standards for insurance companies.

(0)

(3 marks each)

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