Attempt CAIIB BFM Important MCQs and Download Free PDF

1. A resident individual purchased foreign exchange worth ₹42,000 in February paying entirely in cash. In June of the same year, the same individual again approaches the bank for foreign exchange worth ₹60,000 and wishes to pay ₹25,000 in cash. As per RBI/FEDAI guidelines on cash acceptance for sale of foreign exchange, what is the maximum cash the bank can accept in the June transaction?

2. The following forex quotes are available: ● EUR/USD: 1.0850 / 1.0855 ● USD/INR: 83.60 / 83.65 A customer wants to buy EUR and sell INR. What is the rate the bank will quote to the customer for EUR/INR (Ask rate)?

3. An NRI wishes to park his USD earnings in a bank account in India. He requires the interest income and principal to be freely repatriable to his country of residence without any restrictions. Which account is the MOST suitable?

4. Under the Liberalised Remittance Scheme (LRS), an individual remits USD 1,50,000 for overseas education in a financial year. The funds are sourced from the individual’s own bank account (not from an education loan). What is the applicable TCS rate on this remittance?

5. According to Article 14 of UCP 600, which of the following statements about the standard for examination of documents under a Letter of Credit is CORRECT?

6. Case Study — Export Bill Discounting: An exporter presents a usance (90-day) bill of USD 1,00,000 for purchase (discounting). What is the Bill Buying Rate applied by the bank?

7. Which of the following statements about the Standby Letter of Credit (SBLC) is CORRECT?

8. Under FEMA regulations, which of the following transactions is classified as a Capital Account Transaction?

9. An Indian exporter enters into a forward contract to sell USD 5,00,000 at ₹84.20 for delivery on 15 October. On 12 October, the exporter requests early delivery. What rate will the bank apply for early delivery?

10. Under the Uniform Rules for Bank-to-Bank Reimbursements (URR 725), which party is primarily responsible for ensuring that reimbursement instructions are incorporated into the credit?

11. An importer needs to pay EUR 2,00,000 to a European supplier in 90 days. What is the all-in forward rate the importer will be quoted for booking a 90-day forward contract?

12. Under the ECGC (Export Credit Guarantee Corporation of India), which type of policy provides comprehensive cover to banks against non-payment of post-shipment credit extended to exporters due to commercial and political risks?

13. Factoring and Forfaiting are both trade finance instruments. Which of the following correctly distinguishes the two?

14. The SWIFT MT 700 message type is used for which purpose in international banking?

15. Under the Liberalised Remittance Scheme (LRS), which of the following remittances is NOT permitted for a resident individual?

16. An Indian company receives a Letter of Credit from a foreign buyer. The LC is issued by ABC Bank (overseas) and advised through XYZ Bank in India. XYZ Bank adds its confirmation to the LC. Who bears the payment obligation?

17. Under FEMA, the External Commercial Borrowing (ECB) framework allows Indian entities to borrow from overseas. Which of the following is categorised under Track I?

18. An Indian exporter presents an export bill under LC. The issuing bank raises a discrepancy — the bill of lading date is 2 days after the expiry date of the LC. What should happen?

19. According to ISBP 745, what is the treatment of the term ‘about’ or ‘approximately’ in an LC?

20. An NRI maintains an NRO account. He earns rental income of ₹15 lakh in India during the year. What is the maximum amount he can repatriate, and what documentation is required?