FEDAI DAILY QUIZ QUESTIONS ARCHIVES - ECB - FDI - ODI - BRANCH OR

PROJECT OFFICE

1. FC-GPR is Statement submitted by the recipient of FDI in India to RBI through their banker reporting issuance of
shares/ convertible debentures or warrants . What is the time limit for submitting this statement to RBI?

1. As and when shares are issued to the investor.

2. Within one year from date of receipt of Foreign Funds by the recipent company.
3. Within 30 days from date of issuance of equity shares.
4. Within one month from finalisation of Balance Sheet of the company after receipt of Foreign Funds.

Correct Answer : 3

Explanation : Please refer PART I, Section V, para 1 (iii) and (iv)(a) of Master Circular on Foreign Investment in
India. The company need to make allotment within 180 days days from the date of receipt of the inward
remittance and report in FC-DPR within 30 days of issuance of shares.

2. What is Foreign Portfolio Investment Scheme (PIS)

1. This is Scheme to allow Foreign Investment in Banks in India.

2. This is the scheme for allowing resident Indians to make overseas investment.
3. This is the scheme to allow NRI/PIO to make investment from NRE/FCNR Account.
4. This is the scheme to allow investments by NRI or SEBI Registered FPIs.

Correct Answer : 4

Explanation : Please refer PART I, Section II, para 1 Master Circular on Foreign Investment in India

3. Can a person other than Resident Indian set up Proprietorship/Partnership firm in India? Here, please consider
Partnership Firm different than the LLP (Limited Liability Partnership).

1. Yes, India is looking for more and more Foreign Investment.

2. No, Income Tax Act does not allow person other than Resident Indian to invest and generate income in India.
3. The FEMA does not allow person other than Resident Indians to invest in Partnership Firm in India.
4. As per FEMA only NRI and PIO (Person of Indian Origin) are allowed, subject to conditions, to invest in
Partnership Firm in India.

Correct Answer : 4

Explanation : Please refer PART II, para 1 Master Circular No. 15/2015-16 dated 01 July 2015 on Foreign
 Investment in India and Schedule 4 of Notification No. FEMA 20(R)/ 2017-RB dated 07 November 2017

4. FDI (Foreign Direct Investment) is prohibited in ...

1. Television Broadcasting Services

2. Atomic Energy Sector
3. Print Media (Newspaper and magazine) Sector
4. Aviation Industry

Correct Answer : 2

Explanation : Please refer Regulation 15 and 16 of RBI Notification No. FEMA 20(R)/ 2017-RB dated 07
November 2017

5. One of the following is not counted/included for calculating financial commitment of Indian Company to calculate
cap of ODI Investment limit i.e. 400% of net worth, under RBI guidelines?

1. Guarantees issued by Indian Company for the benefit of their overseas JV/WOS.
2. Loan given by resident company to their overseas JV/WOS.
3. Investment/Loan by resident company remitted from EEFC account, to their overseas JV/WoS.
4. Guarantees issued by Indian Company for the benefit of oversease second Step Down Subsidiary.

Correct Answer : 3

Explanation : Please refer para B.4 of FED Master Direction No. 15/2015-16 dated 01 January 2016

6. NRIs (Non Resident Indians) can purchase shares, convertible debentures and warrants issued by an Indian
company on non-repatriation basis, upto..........?

1. USD 250,000 provided consideration is paid by inward remittance through banking channels from abroad or
out of funds held in NRE/FCNR(B)/NRO account
2. USD 100,000
3. No limit, provided consideration is paid by inward remittance through banking channels from abroad or out of
funds held in NRE/FCNR(B)/NRO account
4. No limit

Correct Answer : 3

Explanation : Refer Annexure - 4 of FED Master Direction No.11/2017-18 date 04 January 2018

7. Which of the following type of financial commitments by an Indian Party is not permitted under ODI (Overseas
Direct Investment)?

1. Contribution to equity shares of the Joint Venture/ Wholly Owned Subsidiary abroad
2. Contribution to the Joint Venture/ Wholly Owned Subsidiary as preference shares (for reporting purpose to be
treated as loan)
3. Loans to its the Joint Venture/ Wholly Owned Subsidiary
4. Open ended corporate guarantee issued on behalf of its overseas Joint Venture/ Wholly Owned Subsidiary
 Correct Answer : 4

Explanation : Refer regulation no. 6(3) of Notification FEMA.120/RB-2004 dated: July 7, 2004

8. What is ceiling on All in Cost for Rupee denominated bonds (Known as Masala Bonds) issued overseas by Indian
entity?

1. "350 BPS (Basis Points) over 6 month USD LIBOR "

2. 350 BPS (Basis Points) over the prevailing yield over the Government of India securities of corresponding
maturity
3. 300 BPS (Basis Points) over the prevailing yield of the Government of India securities of corresponding maturity
4. In line with the market conditions

Correct Answer : 3

Explanation : Refer para 3.3.4 of FED Master Direction No. 5/2015-17 date 01 January 2016

9. Proceeds of Rupee denominated bonds issued overseas by Indian entity can’t be used for following purpose?

1. Refinancing an existing Foreign Currency External Commercial Borrowing

2. Real estate activities for development of integrated township / affordable housing projects in India
3. Investing in capital market and using the proceeds for equity investment domestically
4. Import of Capital Goods in India

Correct Answer : 3

Explanation : Refer para 2.4.5 of FED Master Direction No.5/2015-17 date 01 January 2016

10 . Indian company having overseas office requests bank to remit funds for purchase of immovable property
(Residential) outside India for its employees, should the bank allow it?

1. Yes, if the company is allowed to open overseas office, the company is free to purchase residential property for
employees' residence
2. No, purchase of immoveable property is capital account transaction and requires approval from RBI
3. Yes, it is allowed provided the total amount does not exceed the limit prescribed for initial and recurring
expenses for overseas office
4. No, under extant FEMA directions, companies are allowed to purchase immovable property only for business
purpose

Correct Answer : 3

Explanation : Refer A.P. (DIR Series) Circular No. 43/2015-16 [(1)/7(R)] date 04 February 2016

11 . Can Non-resident Indian (NRI) or an Overseas Citizen of India (OCI) purchase the following instruments on
repatriation basis, without limit?

1. Government dated securities (other than bearer securities) or treasury bills or units of domestic mutual funds
2. Bonds issued by a Public Sector Undertaking (PSU) in India
3. Bonds/ units issued by Infrastructure Debt Funds
4. All the above
 Correct Answer : 4

Explanation : Please refer Para 6 of FED Master Direction No. 11/2017-18 dated January 4, 2018

12 . The RBI FED Master Direction 5/2015-16 dated 01 January 2016 contains comprehensive guidance on External
Commercial Borrowing. With reference to these guidelines, which one of the following is not included in the ECB

1. Loan from overseas equity holder by the Indian Company

2. Foreign Currency Convertible Bond issued by the Indian Company and subscribed by the overseas entity
3. Buyer’s credit or Supplier’s Credit
4. Foreign Currency Term Loan by AD Bank which generally known as FCNR(B) Loan

Correct Answer : 4

Explanation : Please Para 2.2 FED Master Direction No. 5/2015-16 dated January 1, 2016

13 . Credit is received by AD Bank in its Nostro Account for their customer, a registered partnership firm. The
customer reports it as External Commercial Borrowing from an eligible overseas lender and submits duly filled
Form-83 requesting to credit the amount to their account. What response/action bank should take?

1. Bank shall credit the amount to customer’s account and submit Form-83 to RBI to obtain UIN (Unique
Identification Number)
2. Bank should advise customer to wait till they examine Form-83, verify KYC of the overseas lender and obtain
UIN from RBI before credit is passed to their account
3. Bank should return the funds to remitter under advice to the customer since External Commercial Borrowing is
allowed only to Companies and other approved entities
4. Bank should hold the credit in Nostro Account and approach RBI requesting permission for allowing ECB to the
partnership firm .

Correct Answer : 3

Explanation : Please refer Para 2.4.2 of FED Master Direction No. 5/2015-16 dated January 1, 2016. ECP is not
permitted to partnership firm under automatic route

14 . A resident company having Overseas Subsidiary Company (WOS) require credit facilities at WoS for which an
overseas bank agrees if sufficient collateral/security is provided. Can the onshore promoter company or its
associates including director offer onshore collateral/security?

1. No, creation of charge on domesti assets of resident in favour of non-resident i.e. overseas bank for credit
facilities requires RBI’s permission
2. Yes, creation of charge on assets in favour of non-resident i.e. overseas bank is permitted for fund based facility
drawn by WOS in interest of resident parent company
3. No, the creation of charge on doemstic assets in favour of non-resident i.e. overseas bank requires prior
permission from Ministry of Home Affairs in India
4. Yes, creation of charge on doemstic assets in favour of non-resident lender is allowed under automatic route
subject to compliance of certain conditions under the extant RBI Guidelines

Correct Answer : 4

Explanation : Please Para B.19 FED Master Direction No. 15/2015-16 dated January 1, 2016
15 . Bank has received FDI for a sector in which though investment is allowed under automatic route but is subject to
Sectoral Cap. In the context of the cap, when can bank credit account of customer?

1. As per RBI, bank can credit account of customer on receipt of FC-GPR Form with company secretary’s
confirmation of compliance in this regard
2. As per RBI, bank can credit account of customer after the filing of FC-GPR as acknowledged by RBI
3. As per RBI, bank can give credit only after receipt of confirmation from SEBI that Sectoral Cap is not breached
4. No procedural requirement or documentation suggested by RBI, the onus of compliance with the sectoral and
statutory caps on foreign investment and attendant conditions if any, is on the company receiving foreign
investment.

Correct Answer : 4

Explanation : Ref 5.2.8 of FED MD No. 11/2017-18 dt Jan 04, 2018

16 . A resident individual requests bank to remit USD 45000 under LRS for portfolio investment in shares of Apple Inc.
listed at NASDAQ. The desk officer after scrutinising the request asked customer to provide Form 15 CB and 15
CA. Is the requirement of desk officer valid?

1. No, only Form 15 CB which determines the liability of tax is required

2. No, only Form 15 CA which is evidence of payment of applicable tax, required
3. Yes, both Form 15 CA and CB is required for remitting funds overseas
4. No, neither of the forms is required

Correct Answer : 4

Explanation : Please refer Government of India Notification No. G.S.R. 978(E) dated 16 December 2015. Form
15 CA or CB is not require for LRS Remittances

17 . Foreign direct investment is prohibited in Real Estate Business or Construction of Farm Houses in India. Your bank
has received remittance for a company (Builder) engaged in development of townships, construction of
residential/ commercial premises, roads. Should bank credit customer's account?

1. No, bank sholud refer the transaction to RBI for approval

2. No, bank should refer the transaction to FEDAI for clarification
3. No, bank should return the fund back
4. Bank can credit customer's account

Correct Answer : 4

Explanation : Please refer Para 2.20 and Para 3 of FED Master Direction No.11/2017-18 date January 04, 2018

18 . Foreign Direct Investment (FDI) is the investment through capital instruments by a person resident outside India.
Which one of the following is not counted as capital instrument?

1. Equity Shares
2. Preference Shares or Share Warrants
3. Bonds
 4. Debentures

Correct Answer : 3

Explanation : Please refer Para 2.2 and Para 4 of FED Master Direction No.11/2017-18 date January 04, 2018

19 . Is the external commercial borrowing permitted under extant RBI Directions for repaying short term buyers credit
obtained for import of capital goods?

1. Permitted but maximum for the period three years from the date of shipment
2. Not permitted
3. Permitted only for consistent foreign exchange earners
4. Permitted

Correct Answer : 4

Explanation : Please refer Para 2.4.5 End Use Prescription in FED Master Direction No.5/2015-16 dt. 01 January
2016

20 . The FDI in an Indian Company comprise sum total of direct and indirect foreign investment. All investments made
directly by non-resident entities into the Indian company are counted towards 'Direct foreign investment. What is
indirect investment?

1. Receipt of foreign funds as debt instead of capital

2. Investment by another Indian investing company having foreign equity shareholding
3. foreign investors subscribing to capital through GDR (Global Deposit Receipt) route
4. Receipt of foreign fund through convertible debt instruments such as debentures or warrants

Correct Answer : 2

Explanation : Please refer para A 1 (vi) of Annexure to RBI AP (Dir) Circular No. 1 dated July 04, 2013. Para
9.1.15 of FED Master Direction No. 11/2017-18

21 . Is rollover of guarantee issued by a resident company in favour of an overseas bank, for securing credit facility to
its overseas subsidiary Permitted under automatic route?

1. Yes, subject to compliance of certain conditions

2. No, the company require prior permission of RBI
3. No, the company require prior permission from their designated A D Bank
4. No, the rollover is not permitted

Correct Answer : 1

Explanation : Please refer RBI AP(Dir) Circular No.83 dated January 3, 2014 Para B 18 of FED Master Direction
No. 15/2015-16

22 . In which format the borrower and AD Bank are required to report ECB Transactions conducted under automatic
route, to Reserve Bank of India?

1. Form 83
 2. ECB Form
3. FC-GPR Form

4. ODI Form

Correct Answer : 1

Explanation : Please refer Para 2.12 Reporting Requirement FED Master Direction No.5/2015-16 dt. 01 January
2016

23 . A wholly owned overseas subsidiary company of an Indian Company proposes right issue to parent holding
company at valuation below the value of equity. Is this permissible under the extant RBI directions?

1. Yes, since Indian Co. is benefitted

2. Yes, provided the investment including right issue does not exceeds limit prescribed under ODI
3. No, ODI investment is permitted only by subscribing the capital issue at par
4. No, this need to be referred to RBI

Correct Answer : 4

Explanation : Please refer FED Master Direction No. 15/2015-16 date January 01, 2016, in particular the para
B.1 Automatic Route

24 . The branch office of a foreign company has to acquire premises on lease in India for which the Land-lord insists
amount equal to six months’ rent as interest free refundable security deposit. Can the resident accept such
deposit from non-resident person?

1. Yes, with permission of RBI

2. No, only A D Bank can accept deposit from non resident
3. Yes, if AD Bank is satisfied on bonafied of the transaction
4. No, since accepting deposit is amounted to capital account transaction which is not permitted

Correct Answer : 3

Explanation : Please refer the answer of RBI to Question No.11 at AD Bank Conference held on 08 January
2017. Please go to link https://www.rbi.org.in/scripts/FEDUser.aspx (You can register here to view RBI inputs)

25 . An Indian resident made initial investment in overseas joint venture in FY 2016-17 under LRS. He submits request
on 30 June 2018, complying requirements under LRS Scheme, to further invest USD 50,000 in same JV under
automatic route. Can bank allow, subject to what conditions?

1. No, investment under LRS Scheme is permitted only once

2. Yes, bank shall remit
3. Yes, only if he submits last three year audit report of the JV
4. Yes, quoting the original UIN number

Correct Answer : 4

Explanation : Please refer Para 3.2(c) in Part –II of FED Master Direction No. 15/2015-16 dated January 1,2016
26 . Which one of the following declaration is mandatorily required by bank under FEMA for a trade transaction?
1. Declaration that goods is allowed for export or import under Foreign Trade Policy

2. Declaration as per Section 10 sub section 5 of FEMA

3. Declaration of purpose code
4. None of these

Correct Answer : 2

Explanation : Please refer FEDAI Circular FEMA/SPL-55/2000 dated 19th June 2000

27 . Which one of the following returns is not discontinued and still required to be submitted to RBI under extant
directives?

1. XOS Return for overdue export bills

2. Quarterly return for delay in utilisation of advance received for export
3. BEF Return for advance import remittance where corresponding Bill of Entry is not submitted
4. Quarterly statement of export advance recipient who are chronic defaulters in performing the export

Correct Answer : 4

Explanation : Please refer para B.8(4)(ii) in FED Master Direction No. 16/2015-16 dated January 1, 2016

28 . Which of the following statement is incorrect in context of transactions governed by FEMA?

1. RBI only regulates banking transactions

2. SEBI doesn’t regulate Fx transaction undertaken by companies
3. Capital account transactions are not regulated by the Government of India
4. None of these

Correct Answer : 1

Explanation : RBI is regulator for all sort of FEMA Transactions and issue directives by notification or AP (Dir
Series) Circular.

29 . The scope and interpretation of information provided in specific fields of SWIFT Message Type Format is drawn as
per standard provided.......?

1. By International Chamber of Commerce, Banking Commission

2. Uniform Rules of the International Chamber of Commerce
3. SWIFT Users Handbook
4. ISO Standards for electronic communications

Correct Answer : 3

Explanation : Please refer the SWIFT Users Handbook

30 . A bank is least likely to act upon the demand guarantee received through one of following types of SWIFT Message
Type?
 1. MT 700
2. MT 999
3. MT 760
4. MT 799

Correct Answer : 2

Explanation : Please refer the scope of SWIFT Message Type in SWIFT Users Handbook, MT 999 is
unauthenticated message type

31 . CFT the acronym, stands for?

1. Credit Funds Transfer

2. Commodity Futures Trading
3. Combating the Financing of Terrorism
4. Centres for Financial Training

Correct Answer : 3

Explanation : Refer RBI/2015-16/258 DBR. AML. No. 7312/14.01.001/2015-16 dt Dec.3’2015

32 . What does ITC (HS) code refer to and how many digits it has?

1. International Tariff Code, it is 12 digit code

2. International Trade Classification (High Synchronised) Code, it is 16 digit code
3. Indian Tariff Classification (High Sea Sale) Code, it is 8 digit code
4. Indian Tariff Classification (Harmonised System) Code, it is 8 digit code

Correct Answer : 4

Explanation : Please refer Para 9.27 in FTP 2015-20.

33 . What do you understand from the term DTA in context to transactionsundertaken in routine at AD Category I
Branch?

1. Delivery in Tariff Area on Customs clearance of imported goods

2. Declaration To Authority under FEMA
3. Domestic Tariff Area which is carved out and not governed by local tax laws
4. Domestic Tariff Area governed by local tax laws

Correct Answer : 4

Explanation : Please refer Para 9.16 in FTP 2015-20; DTA means area within India which is outside SEZs and
EOU/ EHTP/STP/BTP.

34 . FEDAI’s Certificate Examination on Foreign Exchange, mandatory certification as recognised by RBI, for AD I bank
employees working in this field is now conducted once in every....?

1. Year
 2. Half Year
3. Quarter
4. Month

Correct Answer : 3

Explanation : Please visit Website of IIBF over the web address www.iibf.org.in for details

35 . This city does not have FEDAI Local Committee?

1. Jaipur
2. Chennai
3. Kochi
4. New Delhi

Correct Answer : 1

Explanation : Please refer the list of FEDAI Local Committees available on the homepage overwww.fedai.org.in

36 . Foreign Exchange Reserve as computed and published by the Reserve Bank of India includes (i) Gold (ii) Special
Drawing Rights (iii) Foreign Currency Assets (iv) Foreign Currency Liabilities (v) Overseas Direct Investment by
Indian Companies (vi) Reserve Position in the IMF

1. (i), (ii) and (iv)

2. Only (vi)
3. (i), (ii), (iii) and (iv)
4. (i), (ii), (iii) and (vi)

Correct Answer : 4

Explanation : Please refer the www.rbi.org.in home page, Statistics/Data Release/ Weekly Statistical
Supplement available on the following linkhttps://www.rbi.org.in/Scripts/BS_ViewWSS.aspx

37 . R-return is filed by AD Banks reporting all inflow or outflow of funds from/to, out of India. The bank files the
return......?

1. One return for each currency

2. Only one return reporting in equivalent INR
3. Only one return each for Nostro, Vostro and ACU Currency Unit Account
4. One return for each Nostro/ Vostro Account

Correct Answer : 4

Explanation : Please refer RBI Guidelines on following link https://www.rbi.org.in/scripts/ECMUserView.aspx?

Id=55

38 . The (fixed) interest rate at which the Reserve Bank provides overnight liquidity to banks against the collateral of
government and other approved securities under the liquidity adjustment facility (LAF) is ...?

1. Bank Rate
 2. Repo Rate
3. Reverse Repo Rate

4. Prime Rate

Correct Answer : 2

Explanation : Refer RBI site for Repo rate definition

39 . In India, the Local Operating Unit i.e. LEI Number issuing agency for country is ......... and LEI is valid for ......period?

1. Legal Entity Identifier India Ltd., As long the company is in business

2. Registrar of Companies, As long the companyholds valid PAN Number
3. Reserve Bank of India, Five years
4. Legal Entity Identifier India Ltd., One year

Correct Answer : 4

Explanation : Please Quick Ref Guide on FEDAI website or FAQ on the https://www.ccilindia-lei.co.in/

40 . The digital currency (not a fiat currency) such as few popular one like Bitcoin, Ethereum or Ripple are generally
referred to as .............?

1. Fake currency
2. Digitalised currency
3. Crypto currency
4. Pseudo currency

Correct Answer : 3

Explanation : These are known as Crypto currency as well virtual currencies which are not backed by any
sovereign guarantee.

41 . In context of foreign exchange Capital Account transactions, which one of the following reporting system is very
recently revamped by the RBI?

1. Foreign investment in India - FDI

2. Overseas Direct Investment - ODI
3. R-Return
4. Realisation and monitoring of export bills through EDPMS

Correct Answer : 1

Explanation : Please RBIs FIRMS Application Guidelines dated June 27, 2018
https://rbi.org.in/Scripts/femaview.aspx?femaid=64

42 . By constitution, FEDAI is a........?

1. Voluntary Organisation
 2. Partnership Company
3. Limited Liability Partnership Firm
4. Limited company

Correct Answer : 4

Explanation : Please refer introduction of FEDAI on www.fedai.org.in FEDAI is a company constituted under
Section 25 of Ondian Companies Act 1956

43 . Financial Benchmark India (P) Ltd., benchmark administrators in India is promoted by...........?

1. FEDAI
2. FIMMDA
3. IBA
4. All of these

Correct Answer : 4

Explanation : Please visit webpage www.fbil.org.in, details of promoter is available in homepage

44 . Any transactions undertaken by a resident Indian that does not alter his assets or liabilities outside India are.......?

1. Current account transactions

2. Capital account transactions
3. P & L Transaction
4. Book Entry Transaction

Correct Answer : 1

Explanation : Please see definitions under section 2 of FEMA 1999

45 . In terms of FEMA, 1999, remittance towards which of the following purpose is a Capital account transaction?

1. Private visit
2. Gift to non-resident
3. Emigration expenses
4. Opening of Bank Account in Foreign Currency

Correct Answer : 4

Explanation : Please see definitions under section 2 of FEMA 1999

46 . Upto what aggregate amount in USD terms, a returning traveller is permitted to retain foreign currency TC/CNs
beyond 180 days?

1. USD 1000
2. USD 2000
3. USD 3000
4. USD 5000
 Correct Answer : 2

Explanation : Please refer RBI FAQ on Misc FOREX Facilities https://www.rbi.org.in/Scripts/FAQView.aspx?Id=66

47 . AD Banks are required to adhere with ........ guidelines in all their dealings under FEMA, 1999?

1. KYC
2. Anti Money Laundering
3. FATF and CRM
4. All of these

Correct Answer : 4

Explanation : All these guidelines are applicable as per directives issued under various circulars by RBI

48 . As per prescribed manner of payment under FEMA, 1999 the transactions with Nepal and Bhutan are to be settled
in.....?

1. ACU Dollar
2. Any freely convertible currency
3. Indian Rupee
4. Any of these by choice

Correct Answer : 3

Explanation : Please refer the RBI A.P. (DIR Series) Circular No. 11 [(1)/14(R)] dated October 20, 2016

49 . Which one of the following is not a scheme under Foreign Trade Policy 2015-20?

1. Agriculture Export Promotion Plan Scheme

2. Export Promotion Capital Goods Scheme
3. Merchandise Exports from India Scheme
4. Service Exports from India Scheme

Correct Answer : 1

Explanation : Please refer the FTP 2015-20. The AEPPS is scheme of APEAD

50 . The digital currency (not a fiat currency) such as few popular one like Bitcoin, Ethereum or Ripple are generally
referred to as .............?

1. Fake currency
2. Digitalised currency
3. Crypto currency
4. Pseudo currency

Correct Answer : 3
 Explanation : These are known as Crypto currency as well virtual currencies which are not backed by any
sovereign guarantee.

51 . In context of foreign exchange Capital Account transactions, which one of the following reporting system is very
recently revamped by the RBI?

1. Foreign investment in India - FDI

2. Overseas Direct Investment - ODI
3. R-Return
4. Realisation and monitoring of export bills through EDPMS

Correct Answer : 1

Explanation : Please RBIs FIRMS Application Guidelines dated June 27, 2018
https://rbi.org.in/Scripts/femaview.aspx?femaid=64

52 . By constitution, FEDAI is a........?

1. Voluntary Organisation
2. Partnership Company
3. Limited Liability Partnership Firm
4. Limited company

Correct Answer : 4

Explanation : Please refer introduction of FEDAI on www.fedai.org.in FEDAI is a company constituted under
Section 25 of Ondian Companies Act 1956

53 . Financial Benchmark India (P) Ltd., benchmark administrators in India is promoted by...........?

1. FEDAI
2. FIMMDA
3. IBA
4. All of these

Correct Answer : 4

Explanation : Please visit webpage www.fbil.org.in, details of promoter is available in homepage

54 . Any transactions undertaken by a resident Indian that does not alter his assets or liabilities outside India are.......?

1. Current account transactions

2. Capital account transactions
3. P & L Transaction
4. Book Entry Transaction

Correct Answer : 1

Explanation : Please see definitions under section 2 of FEMA 1999

55 . In terms of FEMA, 1999, remittance towards which of the following purpose is a Capital account transaction?

1. Private visit

2. Gift to non-resident
3. Emigration expenses
4. Opening of Bank Account in Foreign Currency

Correct Answer : 4

Explanation : Please see definitions under section 2 of FEMA 1999

56 . Upto what aggregate amount in USD terms, a returning traveller is permitted to retain foreign currency TC/CNs
beyond 180 days?

1. USD 1000
2. USD 2000
3. USD 3000
4. USD 5000

Correct Answer : 2

Explanation : Please refer RBI FAQ on Misc FOREX Facilities https://www.rbi.org.in/Scripts/FAQView.aspx?Id=66

57 . AD Banks are required to adhere with ........ guidelines in all their dealings under FEMA, 1999?

1. KYC
2. Anti Money Laundering
3. FATF and CRM
4. All of these

Correct Answer : 4

Explanation : All these guidelines are applicable as per directives issued under various circulars by RBI

58 . As per prescribed manner of payment under FEMA, 1999 the transactions with Nepal and Bhutan are to be settled
in.....?

1. ACU Dollar
2. Any freely convertible currency
3. Indian Rupee
4. Any of these by choice

Correct Answer : 3

Explanation : Please refer the RBI A.P. (DIR Series) Circular No. 11 [(1)/14(R)] dated October 20, 2016

59 . Which one of the following is not a scheme under Foreign Trade Policy 2015-20?
 1. Agriculture Export Promotion Plan Scheme
2. Export Promotion Capital Goods Scheme
3. Merchandise Exports from India Scheme
4. Service Exports from India Scheme

Correct Answer : 1

Explanation : Please refer the FTP 2015-20. The AEPPS is scheme of APEAD

60 . The acronym SWIFT stand for,...............?

1. Society for Worldwide Interbank Financial Telecommunication

2. Services for Worldwide Interbank Financial Transactions
3. Society for Worldwide Interbank Financial Transfer
4. Secured-network for Worldwide Interbank Financial Telecommunication

Correct Answer : 1

Explanation : Please visit www.swift.com

61 . Which one of the following countries is member of SAFTA (South Asian Free Trade Area)?

1. Myanmar
2. Afghanistan
3. Mauritius
4. Iran

Correct Answer : 2

Explanation : Please visit website SARC http://www.saarc-sec.org/ go to ‘Areas of Cooperation’ and then opt for
Economic and Financial Cooperation

62 . The validity of LEI number issued by Legal Entity Identifier India Limited by is for……?

1. Six months
2. One Year
3. 5 Years
4. Forever, till surrendered

Correct Answer : 2

Explanation : FEDAI - Book No. 1, Chapter 5, Topic - Introduction of LEI

63 . Bank can issue following categories of Card to their NRI Customers subject to certain regulatory guidelines?

1. Only Debit Card

2. Only Credit Card
 3. Only International Credit Card
4. All of these

Correct Answer : 4

Explanation : Please refer RBI Master Circular on Card DBOD.No.FSD.BC. 4/24.01.011/2013-14 dated July 1,
2013 and Para 3.4.1(vii) FED Master Direction No. 8/2015-16 dated January 1, 2016

64 . The HUNDI (Bill of Exchange) drawn under trade transaction are.............................?

1. Exempt from stamp duty

2. Subject to stamp duty as per the Stamp Duty Act of respective state of India
3. Subject to Indian Stamp Act 1899
4. Required to be stamped by adhesive stamp of rupee one

Correct Answer : 3

Explanation : Please refer Indian Stamp Act, in specific the Art. 13 of Schedule –I of the Act

65 . Which department of the RBI issue instructions to Authorised Person on KYC Norms / AML Standards/ CFT /
Obligations under Prevention of Money-laundering Act (PMLA), 2002?

1. Customer Service Department

2. Foreign Exchange Department
3. Department of Banking Regulation
4. Department of Banking Supervision

Correct Answer : 3

Explanation : Please refer A.P. (DIR Series) Circular No. 87 dated March 25, 2015

66 . Which one the following Act is amended recently through the Finance Bill 2019 and such changes in law have
direct consequence consequences upon banks?

1. Foreign Exchange Management Act 1999

2. Indian Stamp Duty Act 1899
3. Foreign Trade (Development and Regulation) Act 1992
4. Negotiable Instrument Act 1881

Correct Answer : 2

Explanation : Please refer following link http://egazette.nic.in/WriteReadData/2019/198304.pdf

67 . Which one these banks is not Domestic Systemically Important Bank (D-SIB) in India?

1. State Bank of India

2. Axis Bank
3. ICICI Bank
4. HDFC Bank
 Correct Answer : 2

Explanation : Please refer the RBI Press Release dated 14 March 2019
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=46553

68 . Which one of the following bank is recently categorised as private sector bank by the RBI?

1. IDBI Bank Ltd

2. Jammu & Kashmir Bank Ltd.
3. Dena Bank
4. Vijaya Bank

Correct Answer : 1

Explanation : Please refer the RBI Press Release dated 14 March 2019
https://www.rbi.org.in/Scripts/BS_PressReleaseDisplay.aspx?prid=46552

69 . What is Avalisation of bill of exchange in context with trade finance?

1. Assignment of rights by the holder in due course in favour of financer of the accepted bill of exchange
2. Co-acceptance of the Bill of Exchange by bank thus guaranteeing the payment to holder on due date
3. Payment of accepted bill of exchange on due date
4. Rejecting the demand under accepted bill of exchange

Correct Answer : 2

Explanation : Please refer any of financial dictionary

70 . Which one of the following bodies are not self-regulatory bodies, in India? a. CCIL, b. FIBL, c. FIMMDA d. AMFI e.
FEDAI

1. a, d and e
2. a and b
3. a, b, and d
4. b, c and e

Correct Answer : 2

Explanation : Please visit the website of these bodies to find out about their role in respective nature

71 Which of the following currencies is not included in Special Drawing Rights (SDR, notional currency of International
. Monitory Fund) Basket?

1. USD
2. JPY
3. RMB
4. MYR

Correct Answer : 4
 Explanation : Refer details on SDR at following link
https://www.imf.org/en/About/Factsheets/Sheets/2016/08/01/14/51/Special-Drawing-Right-SDR

72 . Which one of the following is not part of recently announced Amalgamation Scheme of Government of India for
amalgamation of Indian Public Sector Banks.

1. Indian Overseas Bank

2. Vijaya Bank
3. Bank of Baroda
4. Dena Bank

Correct Answer : 1

Explanation : https://rbi.org.in/scripts/BS_PressReleaseDisplay.aspx?prid=46687

73 . The FEDAI’s Certificate in Foreign Exchange Operations exam which is one of the recognised courses under RBI’s
Capacity Building exercise is conducted by…..and …..for employees working in Foreign Exchange Department in
AD Banks.

1. IIBF, Mandatory
2. IIBF, Optional
3. IBA, Mandatory
4. FEDAI, Optional

Correct Answer : 1

Explanation : Please refer Circular No. CIR/HR&IR/KSC/2017-18/2947 dated June 12, 2017 issued by IBA and
FEDAI Circular SPL-02/ 2017 dated 05th June 2017

74 . Which one of the following is not considered as trade barrier in the international trade?

1. Allowing free export or import to all items

2. Providing subsidies on the local agriculture produce
3. Levying of antidumping duty on import
4. Introducing quota for export or import

Correct Answer : 1

Explanation : All rest three policies are adopted for protecting local industry and restricting the global trade

75 . Which of the following activity generates fee-based income for Bank and no Credit Risk on the client? a. Adding
confirmation to LC, b. Issuance of Standby LC, c. Advising of LC or d. Booking a Forward Contract

1. Adding confirmation to LC
2. Issuance of Standby LC
3. Advising of LC
4. Booking a Forward Contract
 Correct Answer : 3

Explanation : Please refer Article 9 of the UCP 600

76 . Authorised Dealers Category II carries out ........foreign exchange transactions with their customers/ constituents?

1. Specified (current account)

2. Specified (capital account)
3. All type of current account
4. All type of capital account

Correct Answer : 1

Explanation : Please refer FED Master Direction No.3/2015-16 dated January 1, 2016

77 . Foreign Exchange means foreign currency and includes............? (i) Deposits, credits and balances payable in any
foreign currency (ii) Drafts, travellers cheques, LC or BoE, expressed or drawn in INR but payable in any foreign
currency(iii) Securities denominated in foreign currency (iv) Drafts, travellers cheques LC or BoEdrawn by banks,
institutions or persons outside India, but payable in INR.

1. (i), (ii) and (iii)

2. (ii), (iii) and (iv)
3. (i), (ii) and (iv)
4. (i), (iii) and (iv)

Correct Answer : 3

Explanation : Please refer definition of Foreign Exchange in FEMA 1999

78 . Which one of the following is recognised as close relative under Indian Companies Act 2013, read with Rule 4 of
Companies Rule 2014?

1. Father-in-law
2. Grand mother
3. Daughter’s husband (Son-in-law)
4. Grand son

Correct Answer : 3

Explanation : Please refer S.2(77) and Rule 4 of Companies Rule 2014

79 . What is current (10 June’2019) RBI Reverse Repo Rate?

1. 6.00%
2. 6.25%
3. 5.75%
4. 5.50%

Correct Answer : 4
 Explanation : Please refer RBI Second Bi-monthly Monetary Policy Statement, 2019-20 released on 06 June
2019

80 . Can services provided by a domestic company to 100% EOU to support their production be treated as Deemed
Export?

1. Yes, if SOFTEX is filed

2. Yes
3. Yes, provided the said service is covered under Service Export India Scheme
4. No, the principal of deemed export is applies only for supply of goods and not for services

Correct Answer : 4

Explanation : Please refer Chapter 7 of FTP 2015-20

81 . Which of the following business areas are not covered under FEDAI Rules? a. Business-hours for quoting merchant
rates b. Applicable interest rate for trade finance c. Nominal Transit Period d. Cancellation of Forward Contract e.
Turn-around Time for processing Trade Transactions

1. (a), (b) and (e)

2. (a), (c) and (d)
3. (b) and (e)
4. (d) and (e)

Correct Answer : 3

Explanation : Please refer FEDAI Rules

82 . The FTWZ Unit located in Special Economic Zone is permitted to undertake ......activities? a. Trading with or without
labelling b. Processing or manufacturing c. Packing or repacking d. Assembling of CKD or semi CKD Kit

1. (a), (b) and (c)

2. (b), (c) and (d)
3. (a), (c) and (d)
4. (a), (b) and (d)

Correct Answer : 3

Explanation : Please refer SEZ Rules 2006, rule no. 18(5)

83 . Which of the following transactions undertaken by a person resident in India is not governed by provisions of
FEMA 1999?

1. Insurance from an overseas insurance company, bought online by paying premium through international credit
card
2. Borrowing from an NRI friend
3. Subscribing to equity in an overseas company started bya relative
4. Indian National residing in India purchasing immovable property in India, from a Non-Resident by paying value
in Rupee
 Correct Answer : 4

Explanation : Indian national acquiring property or other assets in India and paying upfront in INR is a local
transaction. FEMA puts restrictions on Non-Residentsacquiring immovable property in India and/or remitting
sale proceeds of such assets.

84 . Which one of the following is not governed by provisions of FEMA 1999?

1. Exports out of India

2. Inward remittance from a foreign country
3. Guarantee by an overseas entity
4. None of these

Correct Answer : 4

Explanation : Please refer various regulations issued by RBI under FEMA 1999

85 . Which one of the following is not covered in Foreign Trade Policy?

1. What can be exported out ofor imported in toIndia

2. Who can undertake the activity of export/import, out/into India
3. Rate of customs duty payable for a particular import or export
4. Quantity of a particular item allowed for export or import, in case of restricted items

Correct Answer : 3

Explanation : Customs duty is determined by Ministry of Finance, rest three are subject to FTP issued by
Ministry of Commerce

86 . The Financial Intelligence Unit (FIU), Indiais ........and operates.............?

1. Regulator, Under instruction of Central Board of Indirect Taxes

2. Department of RBI, Under instruction of Governor of RBI
3. Independent Body, Under provisions of Prevention of Money Laundering Act 2002
4. Enforcement agency, Under Ministry of Home Affairs

Correct Answer : 3

Explanation : Please visit website https://fiuindia.gov.in to find more details

87 . Circulars/Notifications issued by RBI on subjects related to activities of AD Banks are........?

1. Available on RBI website for public at large

2. Available on RBI website but access is restricted to AD banks
3. Not Available on RBI website
4. Not Available on RBI website, made available on request

Correct Answer : 1
 Explanation : Please visit website https://rbi.org.in, all circular are available on home page under Index to RBI
Circulars

88 . A purpose code indicates........and.............?

1. Purchase of FCY by Bank, Purposefor which the funds are received

2. Sale of currency by Bank, Purpose for which funds are to be sent out of India
3. Either purchase or sale of FCY by Bank, Purpose for which the funds received or to be sent
4. None of given three options are correct

Correct Answer : 3

Explanation : Please refer list of Purpose Code

89 . Which of the following category of Authorised Persons can undertake Fx Transaction only incidental to their own
business?

1. Authorised Dealer Category I

2. Authorised Dealer Category II
3. Authorised Dealer Category III
4. None of these option is correct

Correct Answer : 3

Explanation : Please refer FEDAI Book No.2, Part I [Para A.(5)]

90 . Real Time Gross Settlement (RTGS) System is open for Customer Transactions.......?

1. From 8.00 hours till 18.00 hrs

2. From 7.00 hours till 18.00 hrs
3. From 7.00 hours till 20.00 hrs
4. From 8.00 hours till 19.45 hrs

Correct Answer : 2

Explanation : Please refer RBI Circular DPSS (CO) RTGS No.364/04.04.016/2019-20 dated August 21, 2019

91 . The concept of crystallisation of foreign currency exposure in to Indian Rupee for AD Bank is applicable to....?

1. Only on overdue export bill

2. Only on overdue import bill
3. Any exposure in foreign currency, which is overdue
4. None of the option has relevance with question

Correct Answer : 3

Explanation : Any liability is required to be either hedged or crystallised to avoid fluctuation in currency rates
92 . Under FEMA, which of these is an essential feature of a capital account transaction?

1. It is always transacted in foreign currency

2. Transaction between an Indian and a Foreigner
3. It alters the assets or liabilities, including contingent liabilities, outside India of persons resident in India OR
assets or liabilities in India of persons resident outside India
4. All of these

Correct Answer : 3

Explanation : Please refer the definition of Capital Account Transaction in section 2 of FEMA 1999

93 . Which one of the following is not the domain of DGFT?

1. Fixing Tariff rates on import of goods

2. Hand Book of Procedure Volume 1 and 2
3. Export Interest Equalisation Scheme
4. Foreign Trade Policy

Correct Answer : 1

Explanation : Please visit www.dgft.gov.in

94 . Who in India, is maintaining the Public Register for Fx Market Participant Banks having signed Statement of
Commitment to Fx. Global Code of Conduct?

1. Reserve Bank of India

2. Foreign Exchange Dealers' Association of India
3. Clearing Corporation of India Limited
4. Financial Benchmarks India Ltd.

Correct Answer : 2

Explanation : Please visit https://fedai.org.in/StatementsOfCommitment.aspx

95 . Which of these is not an Authorised Person, as per RBI authorisation vide section 10(1) of FEMA.

1. Authorised Dealer Category I

2. Full Fledged Money Changer
3. Authorised Dealer Category III
4. None of these

Correct Answer : 4

Explanation : All are Authorised Persons under Section 10(1) of FEMA. Refer Question 1 on FAQ for Money
Changing Activity at RBI Site https://www.rbi.org.in/Scripts/FAQView.aspx?Id=54#1

96 . EPCG License holder is allowed to procure capital goods ......., permitting certain tax concessions subject to
 fulfilling export obligation?
1. Only through import
2. Only through indigenous sources
3. Either through import or indigenous sources
4. For value addition in such goods

Correct Answer : 3

Explanation : Please refer Para 5.01 and 5.07 in FTP, updated on 05 December 2017

97 . The DGFT issues license under FTP 2015-20 for...........?

1. For import of any goods, which is ‘Restricted’

2. For export of any goods, which is ‘Restricted’
3. Goods, the export or import of which is ‘Restricted’
4. Any goods /service, the export or import of which is ‘Restricted’

Correct Answer : 4

Explanation : Please refer Para 9.47 in FTP 2015-20

98 . Which of these is not an Authorised Person, as authorised by RBI vide section 10(1) of FEMA.

1. Authorised Dealer Category I

2. Full Fledged Money Changer
3. Authorised Dealer Category III
4. None

Correct Answer : 4

Explanation : All these are Authorised Persons under Section 10(1) of FEMA. Refer Question 1 on FAQ for
Money Changing Activity at RBI Site https://www.rbi.org.in/Scripts/FAQView.aspx?Id=54#1)

99 . In interbank Money Markets, what does the much talked about replacement for Interbank Overnight Interest Rate,
RFR stand for?

1. Risk Free Rate

2. Repo Financing Rate
3. Regulated Fixed Rate
4. Risk Free Refinancing-rate

Correct Answer : 1

Explanation : Please refer glossary/dictionary for financial terms

100
Which is the busiest port of India handling maximum volume of export and import consignments?
.

1. Kolkata
 2. Nhava Sheva
3. Mumbai
4. Kandla

Correct Answer : 2

Explanation : Please refer the information available over http://dashboard-commerce.gov.in/

101
Where do you get information on forthcoming training programmes of FEDAI?
.

1. On the website of respective bank conducting the training

2. RBI Circular
3. FEDAI website
4. IIBF website

Correct Answer : 3

Explanation : Information on forthcoming FEDAI training programme with contact details of Chief Coordinator
is put on FEDAI website 3-4 weeks in advance

102
Name the most popular currency of trade invoicing, in terms of volume of international trade?
.

1. Chinese Yuan
2. United State’s Dollar
3. Euro
4. Japanese Yen

Correct Answer : 2

Explanation : Please refer the IMF External Sector Report, page 44 Currency of Trade Invoicing
https://www.imf.org/en/Publications/ESR/Issues/2019/07/03/2019-external-sector-report

103 Which one of the following organisation is not a market body/ entity associated with trades in Indian Foreign
. Exchange Market?

1. India Forex Committee

2. Indian Institute of Foreign Trade
3. Clearing Corporation India Ltd
4. Foreign Exchange Dealers Association of India

Correct Answer : 2

Explanation : IIFT is an educational institute

104 Name the Platform launched by CCIL for an anonymous and order driven dealing in the USD/INR currency pair for
. the Customers of banks.
 1. FlexTrade
2. Fx Retail
3. NDS-OM
4. Fx Clear

Correct Answer : 2

Explanation : The platform was launched in Aug.'2019 to help clients get more transparent, fine prices for their
Fx trades. For details pls refer https://www.ccilindia.com/AboutUs/Pages/FxRetailPlatform.aspx

105 Which one of the following assets or liability item in books of an AD Bank is impacted due to change in the
. currency exchange rates in the Fx Market?

1. Income accrued from overseas investment held out of surplus in Nostro Account
2. Liability in foreign currency due to credit balance in client’s FCY Accounts with bank
3. Liability in Indian Rupee due to NRI maintaining their NRE Account with bank
4. Balance held in Vostro Account of an overseas bank

Correct Answer : 1

Explanation : The income in terms of INR impacted due to change in currency exchange rates, rest all three
remained unaltered

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