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In which of the following cases can the bank exercise its right of lien?
When securities are deposited with it in a locker for safe custody
When securities are deposited with it as a collateral for loan
When securities are deposited with it for another loan which has still not been disbursed
When securities have landed up with the bank by mistake.

Ramesh has a car loan and a personal loan with ABC Bank. He gives a single cheque for EMI payment without any instructions. The bank chooses to apply the payment to the loan accounts as per its own discretion. This is known as ________.
Right of general lien
Right of set off
Right of appropriation
Right of EMI distribution

"Pay to 'XYZ' only". This type of endorsement is known as ____________.
Blank endorsement
Partial endorsement
Restrictive endorsement
Special endorsement

Under which of the following circumstances can a contract become void?
Contract is made between parties competent to enter into a contract.
There is an intention to create legal obligation through offer and acceptance.
The consideration of the contract is legal.
The parties are under some sort of influence or duress.

______________ is a contract by which one party promises to save the other from loss caused to him by the conduct of the promisor himself, or any other person.
Contract of indemnity
Contract of guarantee
Contract of bailment
Tacit contract

With respect to lessor-lessee relationship, which of the following statement is incorrect?
Customer owns the content but not the locker.
When a bank hires out its locker to a customer, customer is known as lessee.
Bank owns the locker, but not its content.
When a bank hires out its locker to a customer, bank is known as lessee

As per contract of bailment, the person to whom the goods are delivered is known as bailee.
True
False

All funds paid into a customer's account are attachable only after a Garnishee notice has been issued.
True
False

"Pay to 'Lavanya Sharma Rs. 10000' on a bill of Rs 15000". This type of endorsement is known as __________.
Blank endorsement
Special endorsement
Partial endorsement
Restrictive endorsement

A contract with minor is considered to be void since inception.
True
False

Ganesh a small trader in Mumbai, draws a bill for his supplier located at Singapore. The bill is payable in Mumbai. This is an example of ________.
Inland instrument
Foreign instrument
Inchoate instruments
Ambiguous instruments

Which of the following statement is incorrect with regards to minor?
A minor is a person who is below 18 years of age.
Any promise made to a minor can be enforced against the promisor.
A minor could be a member of a partnership firm for getting only the benefits.
Bank can take properties in the name of minor as collateral security for loan availed for the benefit of the guardian.

The bank has the right to utilise as per their convenience an unspecified payment made to multiple debt accounts. This right of a bank is known as ______________
Right of general lien
Right of set off
Right of appropriation
Right to pay only when demanded

A cheque is always payable on demand.
True
False

In case of an order cheque, if the payee becomes insolvent then who among the following becomes the holder of the cheque?
Drawer as the cheque should be returned to the issuer
Payee's bank
Payee himself, as his insolvency does not make any difference
Official liquidator

Which of the following statement is incorrect with regards to endorsements?
Endorsement can be made on a separate paper and attached with the instrument.
Endorsement can be made by the holder of the instrument
An endorsement with only initials of endorser is not valid.
Endorsement must be for the entire amount of the bill.

Which of the following statement is incorrect with regards to a bearer cheque?
Bearer cheques are transferrable merely by delivery
A bearer cheque is always crossed by the drawer.
A bearer cheque is payable to the person specified on the cheque
A bearer cheque can be paid to any person who presents the instrument to bank for payment

In a promissory note there can be a promise to pay money, goods, or any other security.
True
False

If the date on which a bill of exchange becomes payable is a public holiday, then the bill has to be paid on next business day.
True
False

___________ is an incomplete instrument.
Inland instrument
Foreign instrument
Inchoate instruments
Ambiguous instruments

Which of the following is an example of special endorsement?
Pay to 'Priya Enterprise' in full
Pay to 'Priya Enterprise' only
Pay to 'Priya Enterprise Rs. 30000' on a bill of Rs. 45000
Pay to '_____________' . (Signed without mentioning payee).

When a bank rents a locker to the customer, the bank is called _________
Trustee
Agent
Lessor
Lessee

_________ means the right of the creditor to retain goods and securities owned by the debtor until the debt due from him is paid.
Lien
Retention
Possession
Hold

Which of the following statement is incorrect with regards to a Garnishee order?
A joint account in the name of husband and wife cannot be attached in the favour of husband's judgement creditor
Immediately after the garnishee order is received, the banker can exercise its right of set-off
Garnishee order against an individual partner cannot affect partnership accounts.
Funds paid into the customer's account after the notice to garnishee order has been issued are attachable.

The person who is named on the cheque to receive payment is known as __________.
Payee
Drawee
Drawer
Endorser

In case of an order cheque, if the payee dies, then who among the following becomes holder of the cheque?
Drawer, as the cheque should be returned to the issuer
Nominee
Drawer's bank, as the cheque should be returned to the bank
Legal heir

A bill of exchange must contain an unconditional order to pay.
True
False

In case of an endorsed order instrument, ___________ should be the holder of the instrument.
Drawer
Payee
Endorsee
Bearer

Rajesh has a savings account with ABC Bank. Rajesh issues a cheque of Rs. 10,000 to Mahesh. Mahesh intends to use the payment proceeds of this cheque for clearing his loan with XYZ Bank. In this case who is the drawee?
Rajesh
ABC Bank
Mahesh
XYZ Bank

Vikram, the holder of the cheque mentions the name of the person in whose favour the endorsement is being made along with his signature. This is an example of ________.
Blank endorsement
Special endorsement
Partial endorsement
Restrictive endorsement

Jaisal issues a cheque of ABC Bank of Rs. 5000 to Vineeta. Vineeta uses the same for making a payment to one of her suppliers Priti. Who is the endorsee in this case?
Jaisal
Vineeta
Priti
ABC Bank

A banker has a 'special' lien over customer's securities in its possession.
True
False

When a bank rents a locker to the customer, the bank is called _________
Trustee
Agent
Lessor
Lessee

Which of the following is an example of special endorsement?
Pay to 'Priya Enterprise' in full
Pay to 'Priya Enterprise' only
Pay to 'Priya Enterprise Rs. 30000' on a bill of Rs. 45000
Pay to '_____________' . (Signed without mentioning payee).

___________ is an incomplete instrument.
Inland instrument
Foreign instrument
Inchoate instruments
Ambiguous instruments

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