Series OSS                                                                                                                         Code No. 210

                                                                         LENDING OPERATIONS
                                                                             (Theory) Paper II
Time allowed : 3 hours                                                                                          Maximum Marks : 60

General Instructions :
(i) All questions are compulsory.
(ii) Marks allotted to questions are indicated against each of them.
(iii) Questions 1, 2, 3, 4 and 5 are long answer type questions. Their answers should normally not exceed 150 words each.
(iv) Questions 6, 7, 8 and 9 are short answer type questions. Their answers should normally not exceed 70 words each.
(v) The remaining questions are very short answer type questions. Their answers should not exceed 30 words each.
(vi) Be brief and precise in your answers.

 

 

 

 

1. Differentiate between Cash Credit and Demand  Loan. Give four points of distinction.    6
                                                   OR
    Define Cash Credit. How does it differ from an overdraft ? Give three points of distinction.    2+4=6

 

2. The market value of a vacant land in Delhi is Rs. 25 lakhs. For construction of a house a loan of Rs.15 lakhs is being demanded. Would you sanction the loan ? What precautions would you take in this connection ?

 

3. Define a Bill of Exchange. Would you sanction a loan of full amount of the Bill ? If not, why ? Give two reasons.    2+3=5
                       OR
   Explain the functions of DICGC.    5

 

4. Define Guarantee. How does it differ from Indemnity ? Give two points of distinction.    3+2=5

 

5. What is a Bank Deposit ? Give three kinds of Bank Deposit.    2+3=5

 

6. What two types of securities will you ask from the borrower for the purchase of a washing machine ?    4

 

7. Differentiate  between a warehousing receipt and a bank godown receipt. Give four points of distinction.    4

 

8. What is a Railway Receipt ? What two precautions would you take while sanctioning a loan against it ?    2+2=4

 

 
9. Distinguish between a Cheque and a Bank Draft.    4

 

10. What is a Godown Receipt ?    2

 

11. Explain mortgage.    2

 

12. What is hypothecation ?    2

 

13. A retail shopkeeper applies for a loan of Rs. 25,000 against his shop worth Rs. 1,00,000. How would you proceed to sanction a loan to him ?    2

 

14. Would you like to sanction Rs. 25,000 as loan to a fishing pond owner against the said pond security ? Give two reasons.    2

 

15. What two precautions would you take to sanction a loan to a wholesale cycle merchant ?    2

 

16. Name priority sectors for financing.    2

 

17. Give two advantages of discounting a bill.    2

 

18. Should a Bank Manager advance a loan of Rs. 5,000 without security ?    2