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Posted By: Ishq Member Level: Gold Posted Date: 22 Apr 2008
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2007 ICSI Final December 2007 Banking and Insurance - Law and Practice Question paper
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2/2007/BILP P. T. O.
: 1 : 336
Roll No..........................
Time allowed : 3 hours Maximum marks : 100
Total number of questions : 8 Total number of printed pages : 4
PART—A
(Answer Question No.1 which is compulsory and any two of the rest from this part.)
1. (a) Nav Bharat Fertilizers Ltd. (NBFL) has been enjoying temporary overdraft facility upto Rs.5,00,000 with Kuber Bank for five years. No documents were executed nor any security was furnished. The bank unilaterally, without notice, terminated the overdraft facility and a cheque drawn by NBFL was dishonoured on the grounds of insufficient balance in the account. NBFL claimed damages for wrongful dishonour
of the cheque. Discuss the legal position in this case.
(4 marks)
(b) Assess the credit limits as per projected annual turnover method (Nayak Committee) from the following data/information :The sales of Grow Fast Ltd. are likely to go up from Rs.100 lakh during the year
2006-07 to Rs.120 lakh during the year 2007-08. Net profit will also mark a growth of 20%. Current assets and current liabilities would rise in tandem with the growth in sales.
(4 marks)
(c) (i) Ajay purchased a draft from a bank favouring Anish. The draft was lost in transit. For issuing a duplicate draft, the bank needed some formalities to be completed by Ajay. Can Anish file a case in a consumer forum against the bank as these formalities are delaying payment to him ?
(ii) Hotch-Potch Ltd. is under the winding-up process. Whether the High Court permission is required by a bank to proceed against it before Debt Recovery Tribunal (DRT) ?
(2 marks each)
(d) Re-write the following sentences after filling-up the blank space with appropriate word(s)/figure(s) so as to convey the correct meaning :
(i) The Negotiable Instrument Act, 1881 deals with _________, bills of exchange and cheques.
(ii) No bank incorporated in India can open its branches abroad without permission of ________.
(iii) A customer has a right to ask the bank to return him the paid instrument under the ________ Act,_____.
(iv) A _______ bill does not attract stamp duty.
(1 mark each)
(e) Name the Indian Statute/Act which is relevant for the following matters :
(i) Foreign exchange regulations.
(ii) Bank’s lien.
(iii) Production of certified copies of accounts in legal proceedings.
(iv) Penalties for dishonour of cheques.
(1 mark each)
2. Attempt any three of the following :
(i) What is ‘investment fluctuation reserve account’ ? How can the balance in such account be utilised ?
(ii) State the main objectives of rediscounting of bills and venture capital.
(iii) “Higher inflation affects interest rates in the country.” Discuss.
(iv) State the objectives of loan documentation.
(5 marks each)
3. Attempt any three of the following :
(i) Briefly explain ‘Tier-I capital’ and ‘Tier-II capital’.
(ii) “Consolidation in banking industry is the need of the hour in our country.” Discuss.
(iii) Distinguish between ‘internet banking’ and ‘tele-banking’.
(iv) Enumerate the principles of a sound lending policy.
(5 marks each)
4. Attempt any three of the following :
(i) Write a note on ‘off-shore banking’.
(ii) Explain whether the exposure norms have helped banks in containing the level of non-performing assets (NPAs) in India.
(iii) “There is a huge scope for gold banking business in India.” Comment.
(iv) Briefly explain the process of ‘securitisation’.
(5 marks each)
PART—B
(Answer Question No.5 which is compulsory and any two of the rest from this part.)
5. (a) Dev Anand has approached an agent of Life Insurance Corporation of India with a request to insure his life for Rs.5 crore. Explain him the relevant documents required at various stages.
(4 marks)
(b) Abhishek has mortgaged his house with a bank. How should the bank proceed for insurance of the house ?
(4 marks)
(c) Vivek had a jeep with a capacity of 6 persons. One day, his driver took 12 persons in the jeep. The jeep collided with a truck and 6 persons died on the spot. Insurance company refused to settle the claim on the plea that the jeep was carrying more passengers than its authorised capacity. State whether the action
of the insurance company is justified.
(4 marks)
(d) Distinguish between any two of the following :
(i) ‘Insurance agent’ and ‘composite insurance agent’.
(ii) ‘Risk management’ and ‘insurance management’.
(iii) ‘General average loss’ and ‘particular average loss’.
(2 marks each)
(e) State, with reasons in brief, whether the following statements are correct or incorrect :
(i) A transit policy cover does not consist of various clauses attached to it in accordance with the needs of a customer.
(ii) Credit derivatives are specialised contracts that allow a participant to increase or decrease credit exposure to a particular name for a particular period of time.
(2 marks each)
6. Attempt any three of the following :
(i) Describe the role of insurance ombudsman in redressal of complaints relating to claims.
(ii) What do you understand by ‘insurable interest’ and ‘reasonable premium’ ? How is the insurable interest created ?
(iii) State the procedure for appointment and licensing of surveyors.
(iv) What do you understand by the ‘sue and labour clause’ under the marine insurance ?
(5 marks each)
7. Attempt any three of the following :
(i) Why was opening up of the insurance sector to private participants considered necessary ?
(ii) State the major planks of ‘risk administration programme’.
(iii) What is the necessity for insurance against third party risks ?
(iv) Briefly explain the objectives of the reinsurance programme under the IRDA guidelines.
(5 marks each)
8. Write short notes on any five of the following :
(i) Types of pure risk
(ii) Emergency risk management
(iii) Overseas investment insurance
(iv) Inherent vice
(v) Declaration policy under fire insurance
(vi) Rural sector insurance.
(3 marks each)
——o——
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