Download GTU (Gujarat Technological University) MBA 2019 Winter 5th Sem 3559921 Banking And Insurance Previous Question Paper
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (PART TIME) ? SEMESTER V EXAMINATION WINTER ? 2019
Subject Code: 3559921 Date: 04/12/ 2019
Subject Name: Banking and Insurance
Time: 10:30A.M. TO 1:30 P.M. Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Explain the following terms in short.
a) Credit Card
b) Insurer
c) Digital Payment
d) ULIP
e) KYC
f) Group Insurance
g) Term Loan
14
Q.2 (a)
Explain the essential principles of an insurance contract
07
(b)
Explain in brief the role and main functions of Reserve Bank of India?
07
OR
(b)
What do you mean by Priority Sector Lending? Which are the different
categories included under priority sector?
07
Q.3 (a)
?Insurance Regulatory and Development Authority (IRDA) plays pivotal role
in the development of insurance industry in India? Comment on this
statement.
07
(b)
Are you in favor of digital banking services? Yes or No. Justify your answer
properly.
07
OR
Q.3 (a)
Compare the traditional life insurance plans and market related variable life
insurance plans along with suitable examples.
07
(b)
Are you in support of having health insurance policy or against it? Justify your
answer with appropriate reasons either for support it or against it.
07
Q.4 CASE STUDY:
Deposits and Movement of funds between bank accounts with no
business rationale
Facts of the Case
Company A received ?2.250.000 from Company B in the form of a loan.
By the next day Company A instructed the Bank to transfer the funds as
follows:
a) ?1.180.000 in another account of Company A with another bank.
b) ?1.000.000 issue of a banker?s draft in favor of Company C ? based
on loan agreement
c) ?70.000 Cash withdrawal ? no business explanation Following the
above transactions, Company A instructed for the account to close (after
8 months from opening).
Company C received ?2.250.000 from Company B in the form of a loan.
A month later in the accounts of Company C a banker?s draft amounting
to ?1.000.000 was also deposited (from Company A above) Funds were
used as follows:
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Page 1 of 2
Seat No.: ________ Enrolment No.___________
GUJARAT TECHNOLOGICAL UNIVERSITY
MBA (PART TIME) ? SEMESTER V EXAMINATION WINTER ? 2019
Subject Code: 3559921 Date: 04/12/ 2019
Subject Name: Banking and Insurance
Time: 10:30A.M. TO 1:30 P.M. Total Marks: 70
Instructions:
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 Explain the following terms in short.
a) Credit Card
b) Insurer
c) Digital Payment
d) ULIP
e) KYC
f) Group Insurance
g) Term Loan
14
Q.2 (a)
Explain the essential principles of an insurance contract
07
(b)
Explain in brief the role and main functions of Reserve Bank of India?
07
OR
(b)
What do you mean by Priority Sector Lending? Which are the different
categories included under priority sector?
07
Q.3 (a)
?Insurance Regulatory and Development Authority (IRDA) plays pivotal role
in the development of insurance industry in India? Comment on this
statement.
07
(b)
Are you in favor of digital banking services? Yes or No. Justify your answer
properly.
07
OR
Q.3 (a)
Compare the traditional life insurance plans and market related variable life
insurance plans along with suitable examples.
07
(b)
Are you in support of having health insurance policy or against it? Justify your
answer with appropriate reasons either for support it or against it.
07
Q.4 CASE STUDY:
Deposits and Movement of funds between bank accounts with no
business rationale
Facts of the Case
Company A received ?2.250.000 from Company B in the form of a loan.
By the next day Company A instructed the Bank to transfer the funds as
follows:
a) ?1.180.000 in another account of Company A with another bank.
b) ?1.000.000 issue of a banker?s draft in favor of Company C ? based
on loan agreement
c) ?70.000 Cash withdrawal ? no business explanation Following the
above transactions, Company A instructed for the account to close (after
8 months from opening).
Company C received ?2.250.000 from Company B in the form of a loan.
A month later in the accounts of Company C a banker?s draft amounting
to ?1.000.000 was also deposited (from Company A above) Funds were
used as follows:
Page 2 of 2
a) cash withdrawal ?1.038.000 ? no business explanation
b) ?1.656.000 issue of a banker?s draft in favor of Company D ? based
on loan agreement
c) ?95.000 issue of a banker?s draft in favor of Company E ? based on
loan agreement
d) ?350.000 transfer to Company F ? based on loan agreement
e) ?100.000 turned into a Fixed Deposit upon maturity of which the
funds have been withdrawn in cash. Following the above transactions,
Company C instructed for the account to close (after 8 months from
opening).
Company D received ?1.656.000 from Company C in the form of a loan.
No further transactions.
(a) What are the red flags identified which might indicate money laundering
activity and/or terrorist financing in this case?
07
(b) What are the risks and the potential threats that the accounting firm may be
faced with in this situation?
07
OR
Q.4 (a) What KYC/Due Diligence work could the accounting firm have carried out
and when?
07
(b) What steps may the accounting firm undertake to mitigate its risks and
possible exposure?
07
Q.5
CASE STUDY:
A quality of assets held by banks is a critical indicator of the health of the
financial system. A high quality of assets reflects the level of bank?s credit risk
and efficiency in allocation of resources to the productive sector. Non-
Performing Assets (NPA) are loans given by a bank or financial institutions
wherein the borrower defaults or delay the interest or principal payments. As
per the RBI norm, any interest or principal delayed beyond 90 days known as
NPA. Further it is classified in to Standard Assets, Sub Standards Assets,
Doubtful Assets and Loss Assets. NPA puts negative impact on the
development of an economy. Currently, the Indian Banking sector facing the
problem of high level of Non-Performing Assets and a recent report revealed
by CARE rating puts the Indian economy on the top 5 countries with highest
amount of bad loan in the world with NPA ratio of 9.9. Some of the reasons
behind this situation include, defective lending process, lack of demand,
ineffective recovery mechanism, natural calamities, industrial sickness, and
changes in government policy, use of outdated technology, willful defaults,
poor credit appraisal system and managerial deficiencies. Therefore, it is
essential to take some remedial measures immediately. Now banks and
financial institutions saddled with bad loans have multiple options to manage
their NPA like One-time settlement scheme, Lok Adalats, Debt Recovery
Tribunals, Corporate Debt Restructuring (CDR), SARFAESI Act and Assets
Reconstruction Companies. The provisions of Indian laws do not facilitate
speedy and effective enforcement of securities. Hence in order to make the
process faster and result oriented recently newer mechanism like Insolvency
and Bankruptcy Code, 2016 (IBC Code, 2016), Formation of National
Company Law Tribunal (NCLT) and Prompt Corrective Action (PCA) have
been initiated by regulators. It is expected to solve the issue of bad loan in a
quick and efficient manner for Indian banking sector
(a) Identify the causes of high level of NPA in the Indian Banking sector.
07
(b) Which are the tools available for Banks to manage their NPA?
07
OR
Q.5 (a) What is a Non-Performing Assets (NPA)? What are the types of NPA and
reasons of NPA?
07
(b)
Which are the newer mechanism of NPA recovery and which are the old
mechanisms? Why a regulator has initiated newer mechanisms?
07
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This post was last modified on 19 February 2020