AHSEC| CLASS 11| FINANCE| SOLVED PAPER - 2021| H.S. 1ST YEAR
2021
FINANCE
Full Marks: 100
Time: 3 hours
The figures in the margin indicate full marks for the questions
1. Answer the following:
(a) Fill in the blanks: 1x2=2
(i) Imperial Bank of India was established in the year 27 January 1921.
(ii) Banking services provided to a common man are known as Retail Banking.
(b) Write the full forms of the following abbreviations: 1x2=2
(i) CRAR.
Ans:- Capital Adequacy Ratio (CAR) is also known as Capital to Risk (Weighted) Assets Ratio (CRAR).
(ii) NHB.
Ans:- National Housing Bank (NHB).
(c) Choose the correct answer from the alternatives given below: 1x2=2
(i) When a Joint A/c is operated by any one of the holders independently, mode of operation of the account is
(1) Jointly.
(2) Eihter or Survivor.
(3) Latter or Survivor.
(ii) Which of the following is the exact opposite of inflation?
(1) Stagflation.
(2) Disinflation.
(3) Hyperinflation.
(4) Deflation.
(d) Write True or False: 1x2=2
(i) Cash credit is granted only through Current Account. True
(ii) Disinflation means that the general price level is increasing at a high rate. False
2. What precautions should be taken by a banker to open a Bank Account in the name of a minor? 2
Ans:- Precautions a banker should take while opening the account of a minor:-
(i) The banker should open a savings account and not a current account.
(ii) The guardian can operate the account in the name of the minor.
(iii) If the minor turns 12 years old then he can operate the account.
(iv) Suppose if the father of a minor dies then the mother becomes the guardian.
(v) If the minor dies then the remaining amount is given to the guardian.
(vi) Overdrawing facility is not allowed in the accounts of minors.
3. What is Recurring Deposit Account? 2
Ans:- Recurring deposit is a special type of fixed deposit offered by Indian banks and post offices that helps people with regular income to deposit a fixed amount every month in their recurring deposit account and earn interest at the rate applicable to fixed deposits .
4. Give the meaning of variable cash reserve ratio. 2
Ans:- CRR is an essential monetary policy tool used to control the money supply in the economy, this regulation is enforced in almost every country by the central bank of that country.
CRR rate is the minimum percentage of cash deposits (as specified by RBI) that must be maintained by every commercial bank as per the requirement of the central bank i.e. RBI.
5. Write two objective of regional rural bank. 2
Ans:- The objectives of Regional Rural Banks in India are:-
(i) Opening of bank branches in rural areas
(ii) To provide loans to small farmers, agricultural labourers, small entrepreneurs etc. for the development of agricultural sector.
6. What is recession? 2
Ans:- A recession is a significant, widespread, and long-lasting slowdown in economic activity. The general rule of thumb is that two consecutive quarters of negative gross domestic product (GDP) growth means a recession, but many use more complex measures to determine whether an economy is in recession.
7. Write about the three departments of commercial bank. 3
Ans:- Three different departments of a commercial bank are:-
(i) Retail Banking: This department deals with individual customers and provides services like savings accounts, checking accounts, personal loans and mortgages.
(ii) Corporate Banking: This department focuses on providing financial services including loans, credit and treasury services to large businesses and corporations.
(iii) Investment Banking: This department is involved in financial advisory services, underwriting, mergers and acquisitions and securities trading for institutional clients and high net worth individuals.
8. What are the precautions to be taken by a banker to open a Bank A/c in the name of a company? 3
Ans:- Any company can open an account in the bank. But a banker should carefully check the following precautions before opening an account in the company name.
(i) Memorandum of association.
(ii) Articles of association.
(iii) Certificate of incorporation.
(iv) Copies of annual accounts etc.
9. Write three disadvantages of e-banking. 3
Ans:- There are three disadvantages of e-banking:-
(i) Disruption in services related to technology: E-banking is possible only with proper internet connection, and a good internet connection is mandatory to access the features of e-banking. Moreover, if there are frequent interruptions due to power cuts and low internet speed, it becomes difficult to use e-banking.
(ii) Security breaches: Despite the precautions taken by banks, e-banking transactions are still vulnerable to breaches. Furthermore, with the advancement of technology, hackers have devised ways to break the encryption used to protect user data from being compromised.
(iii) Difficulties for beginners: Only a few people are familiar with the technology used in e-banking. Many people need help using or learning this new skill, making it more difficult.
10. Give three characteristics of the Central Bank. 3
Ans:- The main features of the central bank are:-
(i) Monetary Authority: RBI implements and monitors monetary policy. The objective of formulating monetary policy is to maintain price stability and ensure adequate flow of credit to productive sectors as well as adequate money supply in the economy.
(ii) Regulator and supervisor of the financial system: RBI sets the broad parameters of banking operations within which the banking and financial system of the country functions. The objective of formulating common rules and regulations for the entire banking industry is to maintain public confidence in the system, protect the interests of depositors and provide cost effective banking services to the public.
(iii) Foreign Exchange Managers: Adequate foreign exchange reserves and efficient foreign exchange rates establish good reputation in the globalized world. RBI is responsible for managing foreign exchange reserves and their conversion rates. This management of reserves is regulated under the Foreign Exchange Management Act, 1999. Its objective is to facilitate external trade, payments and promote the orderly development and maintenance of the foreign exchange market in India.
11. Write a note on agricultural bank. 3
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