1. The "Code of Bank's Commitment to Customers" was issued by which body?
Reserve Bank of India (RBI)
Ministry of Finance
Indian Banks' Association (IBA)
Banking Codes and Standards Board of India (BCSBI)
Explanation:
BCSBI (now dissolved, but historically relevant for the code) issued voluntary codes setting minimum standards of banking practices for member banks to follow.
2. If a bank fails to resolve a complaint within ____ days, the customer can approach the RBI Integrated Ombudsman.
30 Days
45 Days
21 Days
15 Days
Explanation:
The Internal Grievance Redressal mechanism of the bank is given 30 days to resolve the issue. If rejected or unresolved after 30 days, the customer can escalate to the Ombudsman.
3. If a failed ATM transaction (cash not dispensed but account debited) is not reversed within T+5 days, the bank must pay a compensation of:
No compensation.
Interest at Savings rate.
?50 per day of delay.
?100 per day of delay.
Explanation:
RBI mandates automatic reversal within 5 days. Failure attracts a penalty of ?100 per day beyond T+5, payable to the customer without demand.
4. In case of an unauthorized electronic transaction where the fault lies with the customer (e.g., sharing password), the customer will bear the loss until:
The end of the month.
Forever, even after reporting.
The bank detects it.
They report the unauthorized transaction to the bank.
Explanation:
Once the customer reports the incident, any subsequent loss is borne by the bank. However, the loss incurred *before* reporting is the customer's liability due to their negligence.
5. Banks must have a Board-approved "Compensation Policy" to cover:
Financial loss to customers due to deficiency in service (e.g., unauthorized debits, lost cheques).
Employee bonuses.
Losses due to bad loans.
Marketing expenses.
Explanation:
This policy ensures transparency and standardized compensation for customers when the bank is at fault.
6. Banks are mandated to provide "Doorstep Banking" services to:
NRIs only.
Senior Citizens (>70 years) and Differently Abled persons.
All customers.
Corporate customers only.
Explanation:
To ensure financial inclusion for vulnerable groups, RBI mandates doorstep services (cash pickup/delivery, KYC, Life Certificate) for seniors over 70 and the differently abled.
7. If a customer reports an unauthorized electronic banking transaction within 3 working days, their liability is:
Limited to ?5,000.
Limited to ?10,000.
50% of the transaction value.
Zero.
Explanation:
As per RBI guidelines on limiting liability, if the customer reports the unauthorized transaction within 3 working days of receiving the communication from the bank, the customer has **Zero Liability**, regardless of whether the fault lies with the bank or a third party.
8. One of the key commitments under the BCSBI Code is "Right to Privacy". This implies:
Banks will keep customer information confidential unless required by law or authorized by the customer.
Banks will not ask for PAN/Aadhaar.
Banks will not share data even with RBI.
Banks will hide their charges.
Explanation:
Confidentiality is a core banker-customer duty. Exceptions include legal compulsion (Income Tax, Court), public duty, or customer consent (Credit Bureaus).
9. Regarding "Life Certificate" submission for pensioners, banks are mandated to:
Accept it only physically at the home branch.
Ask the pensioner to visit the treasury.
Accept it only in November.
Accept it at any branch of the pension paying bank or via Digital Life Certificate (Jeevan Pramaan).
Explanation:
To ease the burden on senior citizens, banks must allow submission at any branch or digitally via Jeevan Pramaan (biometric). Doorstep banking is also an option.
10. The "Internal Ombudsman" (IO) in a bank examines complaints that are:
Against the RBI.
Rejected partly or wholly by the bank's internal grievance mechanism.
Resolved fully in favor of the customer.
Related to staff fraud.
Explanation:
The IO acts as an independent apex level authority within the bank. Before the bank finally rejects a customer's complaint, it must be reviewed by the IO to ensure fairness.
11. Under "Tournier vs National Provincial and Union Bank of England" (1924), which of the following is NOT a valid exception for disclosing customer information?
Request from a curious neighbor.
Duty to the Public.
Compulsion of Law.
Interest of the Bank.
Explanation:
The four exceptions established are: 1. Under Law, 2. Public Duty, 3. Bank's Own Interest (e.g., suing customer), 4. Customer's Consent. Casual requests are strictly denied due to confidentiality.
12. A customer has Zero Liability for an unauthorized transaction in which of the following cases?
Both A and B.
Third-party breach where the deficiency lies neither with the bank nor with the customer, but notifies within 3 working days.
Fraud/Negligence on the part of the bank.
Customer shares OTP with fraudster.
Explanation:
Zero liability applies if the bank is at fault OR if there is a system breach elsewhere reported within 3 days. If the customer is negligent (shares OTP), they bear the loss until reporting.
13. The "Code of Bank's Commitment to Customers" was issued by which body?
Ministry of Finance
Banking Codes and Standards Board of India (BCSBI)
Reserve Bank of India (RBI)
Indian Banks' Association (IBA)
Explanation:
BCSBI (now dissolved, but historically relevant for the code) issued voluntary codes setting minimum standards of banking practices for member banks to follow regarding transparency and fairness.
14. If a bank fails to resolve a complaint within ____ days, the customer can approach the RBI Integrated Ombudsman.
30 Days
21 Days
15 Days
45 Days
Explanation:
The Internal Grievance Redressal mechanism of the bank is given 30 days to resolve the issue. If rejected or unresolved after 30 days, the customer can escalate to the Ombudsman.
15. If a failed ATM transaction (cash not dispensed but account debited) is not reversed within T+5 days, the bank must pay a compensation of:
?100 per day of delay.
?50 per day of delay.
Interest at Savings rate.
No compensation.
Explanation:
RBI mandates automatic reversal within 5 days. Failure attracts a penalty of ?100 per day beyond T+5, payable to the customer without demand.
16. In case of an unauthorized electronic transaction where the fault lies with the customer (e.g., sharing password), the customer will bear the loss until:
They report the unauthorized transaction to the bank.
The end of the month.
Forever, even after reporting.
The bank detects it.
Explanation:
Once the customer reports the incident, any subsequent loss is borne by the bank. However, the loss incurred *before* reporting is the customer's liability due to their negligence.
17. Banks must have a Board-approved "Compensation Policy" to cover:
Losses due to bad loans.
Marketing expenses.
Financial loss to customers due to deficiency in service (e.g., unauthorized debits, lost cheques).
Employee bonuses.
Explanation:
This policy ensures transparency and standardized compensation for customers when the bank is at fault.
18. Banks are mandated to provide "Doorstep Banking" services to:
All customers.
Corporate customers only.
NRIs only.
Senior Citizens (>70 years) and Differently Abled persons.
Explanation:
To ensure financial inclusion for vulnerable groups, RBI mandates doorstep services (cash pickup/delivery, KYC, Life Certificate) for seniors over 70 and the differently abled.
19. If a customer reports an unauthorized transaction after a delay of 4 to 7 working days, their liability is limited to:
Full transaction value.
50% of the transaction value.
Transaction value or a fixed amount (?5,000 to ?25,000 based on account type), whichever is lower.
Zero.
Explanation:
For a delay of 4-7 days, the customer's liability is capped (e.g., ?5,000 for Basic Savings accounts, ?10,000 for other SB accounts, up to ?25,000 for Credit Cards with limit > ?5 Lakh). Beyond 7 days, it is as per board-approved policy.
20. As per the Cheque Collection Policy, if a local cheque is not collected within the stipulated timeframe (usually T+2), the bank must pay compensation at:
Repo Rate + 2%.
Saving Bank Interest Rate.
Fixed Deposit Rate.
Saving Bank Interest Rate + 2%.
Explanation:
For delays in collection of local cheques beyond the timeline, banks typically pay interest at the Savings Bank rate for the period of delay. (For outstation cheques, higher rates apply for longer delays).
21. To facilitate tax exemption on interest income for Senior Citizens, banks must accept which form?
Form 16
Form 15G
Form 15H
Form 60
Explanation:
Form 15H is specifically for resident individuals aged 60 years or more to declare that their tax liability is nil, preventing TDS on interest.
22. As per RBI's "Harmonization of TAT" for failed transactions, if an IMPS transaction fails and is not reversed by T+1 day, what is the compensation payable?
?100 per day.
?50 per day.
No compensation.
Repo Rate interest.
Explanation:
The penalty for delayed reversal of failed transactions (ATM, IMPS, UPI, Cards) is standardized at ?100 per day of delay beyond the prescribed TAT (T+1 for IMPS).
23. Which of the following is NOT a valid ground for complaint to the Banking Ombudsman?
Non-payment/delay in payment of cheques.
Failure to issue demand draft.
Levying of charges without prior notice.
Rejection of loan application based on valid commercial reasons (e.g., low credit score).
Explanation:
The Ombudsman does not interfere in the commercial decisions of the bank (like credit sanctioning) unless there is a violation of RBI guidelines or fair practice code.
24. Can banks charge for "Doorstep Banking" services provided to Senior Citizens?
Yes, but only if the transaction amount is high.
No, RBI pays for it.
Yes, reasonable charges can be levied, which must be transparently displayed.
No, it must be free.
Explanation:
While the service is mandatory for eligible customers, banks are permitted to charge a reasonable fee for the service to cover costs.