B.Com 1st Sem Indian Financial System Previous Papers

B.Com 1st Sem Indian Financial System Question Paper May 2013 with Answers

Time : 3 hours
Max. Marks : 100

SECTION – A

I. Answer any ten sub questions. Each question carries two marks. (10 x 2 = 20)

Question (a)
What is a Bank?

Question (b)
Who is an Indigenous Banker?

Question (c)
Expand SHCIL.

Question (d)
What is SLR?

Question (e)
Give the meaning of ‘Liquidity’.

Question (f)
What is meant by Financial System?

Question (g)
What is IDBI?

Question (h)
State any four financial resources of SFC.

Question (i)
What is call money market?

Question (j)
State two credit controls used by RBI.

Question (k)
Give the meaning of capital market.

Question (l)
What is consumer finance?

SECTION – B

II. Answer any four questions. Each question carries eight marks. (4 x 8 = 32)

Question 2.
What are the functions and objectives of EXIM Bank?

Question 3.
Explain tile components of money market.

Question 4.
What is Commercial Bank? State its functions.

Question 5.
State the functions of Secondary Market.

Question 6.
Explain the importance of financial services.

SECTION – C

III. Answer any three questions. Each question carries 16 marks. (3 x 16 = 48)

Question 32.
Briefly explain the objectives and functions of SEBI.

Question 33.
Discuss the recommendations of Narasimham Committee Report banking sector reforms.

Question 34.
Discuss the types of financial market and differentiate between the money market and capital market.

Question 35.
Briefly explain the functions of R.B.I.

B.Com 1st Sem Indian Financial System Question Paper with Answers

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
What is a private sector bank?

Question (b)
What is housing finance?

Question (c)
What is acceptance market?

Question (d)
What is overdraft?

Question (e)
What is commercial bank?

Question (f)
What are the three objective RBI?

Question (g)
What do you mean by inter bank term money?

SECTION – B

II. Answer any Three questions. Each question carries 6 marks. (3 x 6 = 18)

Question 2.
Explain the features of financial services.

Question 3.
Discuss briefly the organisational structure of RBI.

Question 4.
State the general utility functions of commercial banks.

Question 5.
Write a note on Exim Bank.

Question 6.
Distinguish between capital and money market.

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 7.
Write a note on National Bank for agriculture and Rural Development (NAB ARD).

Question 8.
What is a commercial bank? Explain the primary functions of commercial banks.

Question 9.
Explain the advantages of investing in mutual funds.

Question 10.
Explain the various money market instruments.

Question 11.
Explain the important financial services.

B.Com 1st Sem Indian Financial System Question Paper November 2014 with Answers

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
What is a Money Market?

Question (b)
Classify the financial assets with examples.

Question (c)
Expand the following:

  • IDBI
  • SIDCs

Answer:

  • IDBI = Industrial Development Bank of India
  • SIDCs = The State Industrial Development Corporations

Question (d)
What are the various utility services provided by banks to the public?
Answer:
Banks performs the service like factoring, venture capital, leasing, hire purchase, mutual funds debit and credit cards, foresee services etc.

Question (e)
Define Non-performing Asset.
Answer:
Non performing assets refers individually or collectively to sub standard, doubtuful and loss assets. Non peroforming assets pose problems as regards the recovery of principal and interest.

Question (f)
What is monetary policy?

Question (g)
What is Mutual Fund?

SECTION – B

II. Answer any Three questions. Each question carries six marks. (3 x 6 = 18)

Question 2.
List out the functions of indigenous banks.
Answer:
Indigenous banks are established by private persons and money lendors. These banks are under the control of private people. Following are the functions of indigenous banks.

  • Indigenous banks provide the short term financial assistance to needy borrower.
  • The rate of interest charged by these moneylenders are very high.
  • These indigenous banks give quick financial loans to borrowers.
  • These indigenous banks help to develop the rural economy by providing finance to poor people in advance.
  • These banks provide loan for the development of agriculture, trade, commerce, industry and other productive activities in rural areas.
  • It provides loan facilities to small scale industries to buy seasonal raw material.
  • It collects the deposits with in the local area as resources for lendings.

Question 3.
State the functions of EXlM Bank.

Question 4.
Mention six functions of RBI.

Question 5.
Describe the organizational set up to of the Reserve Bank of India.

Question 6.
What is factoring? State any 4 functions of factoring.

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 41.
Discuss the role and functions of financial markets.

Question 42.
Explain the functions of IDBI.

Question 43.
Define Commercial Bank. Also discuss the functions of Commercial Bank.

Question 44.
Describe the quantitative and qualitative credit control weapons available with the RBI.

Question 45.
Write short notes on:
(a) Housing and vehicle finance
(b) Venture capital.
Answer:
(a) Housing and vehicle finance:
Lending is one of the primary function of banking. Banks provide loans to its customers for different purposes. Banks lend financial helps to purchase house and vehicles.

Following are the procedure for availing housing loan:

  • Customers of bank need to file an application and apply for home or vehicle loan.
  • These applied applications are verified by the banks to see the requirements are met or not.
  • Banks receive the quotation of vehicle or value of site to grant loan.
  • The amount of loan sanctioned depends on the estimate given by the rulers.
  • Banks also design repayment schedule.
  • Banks give cheque or demand draft in the name of applicant.
  • Now a day’s banks are tie up with big builders or vehicle companies and pro vide loans to buyers.

(b) Venture capital

B.Com 1st Sem Indian Financial System Question Paper November 2015 with Answers

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
What is Capital Market?

Question (b)
Give the meaning of Financial Institutions.

Question (c)
What is Group Bank?

Question (d)
Expand the following.
(i) LIC (ii) S.I.D.C.s
Answer:

  • LIC: Life Insurance Corporation
  • S.I.D.C.s: State Industrial Development Corporation

Question (e)
State any two functions of IDBI.

Question (f)
Mention any two objective of Integrated Rural Development Programme (IRDP).
Answer:
Integrated Rural Development programme is a major mechanism for the alleviation of rural poverty.
The main objectives of IRDP are –

  • To raise families of identified target group below poverty line.
  • To create sustainable opportunities for self employment in the rural sector.
  • To give assistance in the form of subsidy by the government.
  • To reach the move vulnerable sectors of the society.

Question (g)
What is factoring?

SECTION – B

II. Answer any Three questions. Each question carries 6 marks. (3 x 6 = 18)

Question 17.
Explain, briefly the features of a developed money market.

Question 18.
Write a note on Differential Rate of Interest Scheme (DRI).
Answer:
DRI scheme is implemented by all Indian Scheduled commercial banks. The main objective of DRI schedule is to provide finance at concessional rate to the weaker section of the community of engaging in productive and gainful activities to improve their economic conditions. This scheme is implemented throughout the country. This is a social banking activities introduced by commercial banks to neglected sectors like agriculture, small scale industries, services etc., with special emphasis on borrowers of small means. These borrowers are provided credit facilities to achieve the objective of nationalisation. This scheme is introduced by banks to play the role of social upliftment in an effective and systematic manner in all districts in the countries.

The banks provide benefits to SC and ST category people at not less than 40% of their DRI. There is no collateral securely or third party guarantee is required to grant loans. The loan repayment should be made with in 5 years of sanction and a grace period of two years are granted in case of special cases.

Question 19.
State the functions of SEBI.

Question 20.
Give the classification of venture capital funds.
Answer:
Venture capital is a type of private equity capital typically provided for early stage, high potential, and growth companies in the interest of generating a return through an eventual realisation event such as a trade scale of the company. Venture capital typically comes from institutional investors and high net worth individuals and is pooled together by dedicated investment firms.

There are three types of venture capital:
(a)Early stage financing: Early stage financing includes seed financing. Start up financing and first stage financing. Seed financing is a start up loan provided by financial institutions in small amount for the purpose of beginning of business. Start up financing is given for the purpose of finishing the development of production and services. This type of venture capital is used for initial marketing activities of company. Companies need this capital for beginning business activities at the full scale.

(b) Expansion financing: Expansion financing is also called as second stage financing. It is provided to companies for the purposes of begining their expansion. It is also known as mezzanine financing. It is provided basically for the purpose of assisting a particular company to expand in a major way. It is provided with small rate of interest for major business.

(c) Acquisition or buy out financing: Acquisition or buyout financing is categorized into acquisition finance or leveraged buyout financing. Acquisition financing, assists a company to acquire certain parts or an entire company. Management or leveraged buyout financing helps a particular management group to obtain a particular product of another company.

Question 21.
What are the features of Financial Services?

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 7.
What is Secondary Market? Explain its functions.

Question 8.
What is a mutual fund? Explain the different types of mutual funds.

Question 9.
What are the objectives and functions of EXIM Bank?

Question 10.
What is Credit Control? Explain the different method of Selective Credit Control.

Question 11.
Explain the changing role of Commercial Banks in Indian Economy.

B.Com 1st Sem Indian Financial System Question Paper November 2016 with Answers

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
Give the meaning of financial asset.

Question (b)
What are marketable securities? Give any two examples.
Answer:
Marketable securities are financial instruments that can be converted into cash. Or redeemed with in a year. These securities are classified as marketable equally security and marketable debt security.
Example: Government bonds, Common Stock or Certificate of deposit.

Question (c)
Expand NBFC and NABARD.
Answer:

  • NBFC = Non Banking Finance Companies.
  • NABARD = National Bank for Agriculture and Rural Development.

Question (d)
State any four primary functions of commercial banks.

Question (e)
When is a bank considered as Scheduled Bank?

Question (f)
Mention any two objectives of RBI.

Question (g)
State any two features of financial service.

SECTION – B

II. Answer any Three questions. Each question carries 6 marks. (3 x 6 = 18)

Question 2.
Briefly explain any six functions of financial system.

Question 3.
Discuss any three distinctions between capital market and money market.

Question 4.
Bring out any three distinctions between Banking Companies and Non-Banking Finical Companies.
Answer:
Difference between banking Companies and Non-Banking Companies, are as below Banking companies and non banking financial companies are key financial intermediaries offers scholar services to customers. But –

  • Banks are started under the banking companies act. But non banking financial companies are started under company act 1956.
  • Banking companies receiver deposits and landing loans and advances. But non – banking financial companies cannot accept demand deposits.
  • Banking companies issues self drawn cheques and demand draft. But non-banking companies cannot issues self drawn cheques and demand draft.
  • Banking companies are government authorised financial intermediary that aims at providing. Banking services to the general public. But non banking financial companies provides banking services to people without holding a banking licence.
  • In banking companies maintenance of reserve ratio is compulsory. But in non banking finance companies maintenance of reserve ratio is not required.

Question 5.
Explain any three credit control measures of RBI.

Question 6.
Give the meaning of liquidity and explain the types of liquidity with reference to a commercial bank.
Answer:
It is one of the factor affecting the investment policy of a commercial bank. The term liquidity refers to ability of a banks in meeting its withdrawals of its depositors and its capability in securing the confidence of depositing public and run the business smoothly Types of liquidity with reference to commercial bank.

Liquidity means it can be easily be converted into cash to meet financial obligations on short notice without any loss. Banks should maintain a liquidity level to meet all its anticipated and unanticipated expenses.
There are two common types of liquid assets in banks they are –

  • Finds in servings accounts.
  • Marketable services such as stocks and bonds.

Commercial banks are following liquidity methods they are –

  • Cash balance account: This is highest form of liquidity but it does not earns any amount of interest.
  • Overdraft arrangements with banks.

This facility in available to current account holders.
(a) Marketable securities: These are short term securities which can be easily converted into cash without any redactions in principal amount which can qualify for short term investments.

(b) Factoring: Factoring is the out right sale of account receivables to a banks finance company without recourse the advantages of factoring are that it offers immediate cash and there helping liquidity.

(c) Inter company deposits: It is a short term deposits with other companies and attractive form of short term investment.

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 7.
Give the meaning of financial system and briefly explain its components.

Question 8.
What is stock exchange? Discuss the features and advantages of stock exchange.
Answer:
In a financial market, where the existing securities are traded is referred as stock ex-change market. Stock exchange market companies of equity and the debt markets. All securities whether government or corporate which are already floated in the securities market, are dealt in stock exchange market.
(I) Features of Stock Exchange Market:

  • It deals with securities already existing in the market.
  • The activities in the secondary market is restricted to a specific area e.g. Stock Ex-change activities of Mumbai will be dealt which are listed on it.
  • Only transfer of Securities takes place.
  • Only those companies can enter into the ‘Tray’ which are listed or already has issued capital.
  • Totally under the control of specific Administration.
  • Example – Bombay Stock Exchange is controlled by its Bye-laws.
  • Subject to regulations of specific company whose, securities are dealt in.
  • No such creation of securities, it largely depends sale purchase activities. Companies which have easy liquidity.
  • The entire financial strengths depends on the volume of transactions per day. More transactions means more fund mobilisation.

(II) Advantages of Stock Exchange Market:

Question 9.
Explain the meaning, features and types of mutual funds.

Question 10.
Discuss the meaning and primary functions of commercial banks.

Question 11.
Write a note on the following:
(a) Factoring
(b) Leasing and
(c) Venture capital

B.Com 1st Sem Indian Financial System Question Paper November 2018 with Answers

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
Give the meaning of financial system.

Question (b)
What do you mean by Income Funds?
Answer:
Income fund are type of mutual fund or exchange traded fund that emphasises current income either monthly or quarterly basis. These funds are usually holds money market instruments of different government departments.

Question (c)
Define banking.

Question (d)
What is Statutory Liquidity Ratio?

Question (e)
State any two objectives of RBI.

Question (f)
State any two distinguishing points between Primary Market and Secondary Market.

Question (g)
What is Venture Capital?

SECTION – B

II. Answer any Three questions. Each question carries 6 marks. (3 x 6 = 18)

Question 2.
Explain the functions of money market.

Question 3.
State the functions of LIC.

Question 4.
Discuss the primary functions of Commercial Banks.

Question 5.
Discuss the powers of SEBI.

Question 6.
Explain in brief the capital Market Instruments.

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 56.
Write in detail the various money market instruments.

Question 57.
Explain various types of financial services.

Question 58.
Explain in detail the various types of mutual funds.

Question 59.
Explain functions of RBI.

Question 60.
Write short notes on:
(a) Factoring
(b) Leasing
(c) Consumer Finance
(d) Housing Finance

SECTION – A

I. Answer any Five questions. Each question carries two marks. (5 x 2 = 10)

Question (a)
What is Primary Market?

Question (b)
Expand IDBI, EXIM.
Answer:

  • IDBI – Industrial Development Bank of India
  • EXIM – Export Import Bank.

Question (c)
What is Mutual Fund?

Question (d)
What is Cash Credit?

Question (e)
What is SLR?

Question (f)
What is Lease Financing?
Answer:
Lease Financing is one of the important sources of medium and long term financing in which the owner of an asset gives right to another person to use asset against periodical payments the owner of the asset is known as lessor and the user is called lesser.

Question (g)
Give the meaning of Letter of Credit.

SECTION – B

II. Answer any Three questions. Each question carries 6 marks. (3 x 6 = 18)

Question 2.
What is Capital Market? Explain the characteristics of Capital Markets?

Question 3.
Explain the Objectives and functions of LIC.

Question 4.
Write a note on Investment Policy of Commercial Banks.
Answer:

Question 5.
Briefly explain the role of RBI in the Economic Development of the Country.

Question 6.
Write a note on Factoring.

SECTION – C

III. Answer any three questions. Each question carries 14 marks. (3 x 14 = 42)

Question 61.
Explain the structure and components of Indian Financial System.

Question 62.
Explain in detail various functions of modern commercial banks.

Question 63.
What is SEBI? Explain the functions of SEBI.

Question 64.
Explain in detail the important Financial Services.

Question 65.
What is Credit Control? Discuss the quantitative and qualitative Credit Control Techniques of Reserve Bank of India.