R4RIN – MCQs, Mock Tests | BANK EXIM Finance MCQ Set 1

Incoterms cover

1. trade in intangibles
2. ownership and transfer rights
3. contracts of carriage
4. rights and obligations of parties to contract of sales

✅ Correct Answer: 4

Which of the following term cannot be used for transportation of goods by sea?

1. CFR.
2. DDP
3. DES
4. DEQ

✅ Correct Answer: 2

Which of the following term cannot be used for transportation of goods by sea?

1. CFR.
2. DDP
3. DES
4. DEQ

✅ Correct Answer: 2

Which of the following term cannot be used for transportation of goods by sea?

1. CFR.
2. DDP
3. DES
4. DEQ

✅ Correct Answer: 2

The incoterm providing least responsibility to seller is

1. EXW.
2. DDP
3. FOB
4. CIF

✅ Correct Answer: 1

The group of incoterms under which the seller’s responsibility is to obtain freight paid transport document for the main carriage is

1. E terms
2. C terms.
3. D terms
4. F terms.

✅ Correct Answer: 2

The incoterm should indicate the place of shipment in case of

1. F terms
2. E terms.
3. C terms.
4. D terms.

✅ Correct Answer: 1

Incoterm is specific about the responsibility for marine insurance in case of

1. FOB and EXW
2. FOB and CIF
3. CIF and CIP.
4. CPT and DDP.

✅ Correct Answer: 3

The group of terms arranged in order of increasing responsibility of exporter is.

1. . C,D,E and F terms.
2. D,E,F and C terms.
3. E,F,C and D terms.
4. F,C,E and D terms.

✅ Correct Answer: 3

The price quoted by the seller for the product

1. A. will vary depending upon the incoterm chosen.
2. irrespective of the incoterm.
3. will be the base price; the effect of incoterm to be added later
4. will include only cost.

✅ Correct Answer: 1

Adoption of incoterm is

1. compulsory for all international contracts
2. compulsory for all letter of credit transactions.
3. optional for the parties to the contract
4. mandatory for transactions with Europe.

✅ Correct Answer: 3

Which of the following term cannot be used for transportation of goods by Road or Air?

1. FAS.
2. DDP
3. EXW
4. CIP.

✅ Correct Answer: 1

Packing credit is

1. an advance made for packing goods for export.
2. pre-shipment finance for export.
3. a priority sector advance.
4. advance for importer.

✅ Correct Answer: 2

The amount of packing credit should not normally exceed

1. . the local cost of manufacture for the exporter.
2. FOB value of the export contract.
3. CIF value of the export contract.
4. D. the cost of manufacture or FOB value of the export contract whichever is les

✅ Correct Answer: 4

Which of the following person is not eligible for packing credit?

1. a .merchant exporter.
2. a person making deemed exports.
3. sub-suppliers to manufacture exporter
4. supplier to sub-supplier to manufacture exporter.

✅ Correct Answer: 4

The running account facility for packing credit is available for

1. A. status holders only.
2. export for specified goods.
3. exporters with good track record
4. exporters with orders above Rs. 100 crores.

✅ Correct Answer: 3

The advantage to the exporter of running account facility of packing credit is

1. . production of letter of credit or firm order is completely waive
2. the period of facility need not be adhered to.
3. production of letter credit on firm order is waived immediately they must be produced within a reasonable time.
4. . the rate of interest is low.

✅ Correct Answer: 3

The exemption from the condition credit should not exceed the domestic cost of production is not waived for

1. commodity eligible for duty drawback
2. commodity imported under advance licence
3. HPS groundnuts
4. agro-based productions like tobacco.

✅ Correct Answer: 2

The substitution of commodity/fresh export of adjustment of packing credit is not available for

1. advance against sensitive commodities.
2. transactions of sister/associate/group concerns.
3. . exports availing running account facility.
4. exports with imports.

✅ Correct Answer: 2

Normally the maximum period for which packing credit advances are made is

1. 90 days.
2. 135 days
3. 180 days
4. 360 days.

✅ Correct Answer: 3

A pre-shipment advance is not expected to be adjusted by

1. proceeds of export bill
2. export incentives
3. post-shipment finance
4. local funds.

✅ Correct Answer: 4

A packing credit was granted against an export order but the export could not take place

1. It should be reported to the RBI
2. The exporter should be blacklist
3. Claim should be preferred with ECG
4. Interest at domestic rate should be charged on the advance from the date of advance

✅ Correct Answer: 4

For direct export the packing credit should normally be granted only against

1. a letter of credit.
2. firm order.
3. export licence
4. a letter of credit or firm order.

✅ Correct Answer: 4

For packing credit in rupees the interest of period up to 180 days is chargeable at

1. BPLR minus 2.5%.
2. BPLR minus 3%.
3. not exceeding BPLR minus 2.5%.
4. not less than BPLR minus 2.5%.

✅ Correct Answer: 3

Pre-shipment credit in foreign currency is available for a period of

1. maximum 180 days.
2. minimum 180 days
3. maximum 270 days
4. maximum 360 days.

✅ Correct Answer: 1

Pre-shipment credit in foreign currency can be availed in

1. US Dolor only.
2. the currency of export only.
3. the currency of import only.
4. any permitted currency.

✅ Correct Answer: 4

Advising of letter of credit will be done by the bank

1. only to its customers
2. to any person provided the letter of the credit is issued by its correspondent bank.
3. free of charge to its customers and for a cost to others
4. to any beneficiary and from any issuing bank.

✅ Correct Answer: 2

The following is not a post-shipment advance

1. negotiation of bill under letter of credit
2. purchase of foreign bill.
3. advance against foreign bill for collection
4. packing credit.

✅ Correct Answer: 4

A bill drawn under a letter of credit contains discrepancies

1. the bank should refuse to negotiate documents
2. take the bill on a collection basis only.
3. must negotiate irrespective of discrepancies
4. may purchase it or take it for collection, but should not refuse to handle the bill.

✅ Correct Answer: 4

If an export bill which was purchased /negotiated is not realized within reasonable time from the due date the bank shouldis.

1. reserve the bill from the export bill purchase portfolio
2. make a claim with ECGC
3. report to RBI.
4. take further bills from the exporter only on collection bas

✅ Correct Answer: 1

The following is a must for an exporter

1. GR form.
2. EP form
3. PP form
4. GRX form.

✅ Correct Answer: 3

Duty drawback is the refund of duty chargeable on

1. Imported material
2. Exported material
3. Damaged material.
4. Mortgaged material

✅ Correct Answer: 1

Availing post-shipment credit in foreign currency is compulsory for

1. exporters who have not availed packing credit.
2. all exporters who have availed packing credit.
3. exporters who have availed pre-shipment credit in foreign currency
4. exporters who have availed credit from banks.

✅ Correct Answer: 3

Post-shipment credit in foreign currency can be availed by

1. use of on-shore foreign currency funds
2. banks raising foreign currency funds abroad
3. exporters arranging funds abroad
4. any of the above methods.

✅ Correct Answer: 4

Advance remittance from importer can be accepted by an exporter in India provided

1. the advance does not carry interest payment.
2. shipment will be made only after one year from the date of receipt of advance.
3. advance does not exceed 25% of export value
4. rate of interest,if payable, does not exceed Libor plus 1%.

✅ Correct Answer: 4

A bank may refuse to accept an export bill for collection

1. when the customer has sufficient limits under bill discounting facility. B. D.
2. when the documents have discrepancies when compared to letter of credit requirements.
3. when the documents are received from a non-customer
4. when the documents are received from a customer.

✅ Correct Answer: 3

If the importer refuses to accept the bill drawn on him the exporter

1. should reimport the goods.
2. must find an alternate buyer.
3. may reimport or sell to an alternate buyer depending upon commercial expediency
4. sue the importer.

✅ Correct Answer: 3

If export cargo is lost in transit, the exporter should

1. claim under marine insurance.
2. claim with ECGC
3. seek write off of post-shipment credit.
4. seek refund of customs duty.

✅ Correct Answer: 1

Pre-shipment rupee credit from Exim bank is available for

1. period up to 180 days.
2. period beyond 180 days
3. turnkey projects only
4. foreign currency components only.

✅ Correct Answer: 2

For export-oriented units, Exim bank finances

1. term loans only.
2. both working capital and term loans
3. term loans, working capital and long term working capital.
4. for investment from overseas.

✅ Correct Answer: 3

Which of the following is not a common feature of direct lending by Exim bank?

1. They are for medium or long term.
2. The size of the loan is high.
3. Security is not insisted upon
4. Interest rates are relatively low.

✅ Correct Answer: 3

Bid Bond issued as part of

1. supply bidding process
2. Turnkey project
3. Post-award clearance
4. Deferred payment

✅ Correct Answer: 1

Exim bank lending to foreign governments take the form of

1. soft loans.
2. commercial loans
3. lines of credit.
4. relending facility.

✅ Correct Answer: 3

The facility that is available to commercial banks in India from Exim bank is

1. refinancing of export credit.
2. export bill re-discounting
3. syndication of export credit risks.
4. All the above

✅ Correct Answer: 4

Exim bank issues guarantees on behalf of

1. all exporters from India.
2. exporters of construction and turnkey projects
3. banks in India.
4. Govt. of India.

✅ Correct Answer: 2

Exim bank issues guarantees to commercial for

1. all export advances
2. all export advances repayable beyond one year
3. post-shipment suppliers credit from one year to three years
4. . loans with refinance from Exim bank.

✅ Correct Answer: 3

Export factoring is available for

1. short term exports.
2. medium-term exports.
3. all exports
4. export under consignment basis.

✅ Correct Answer: 1

. Which of the following service is not provided by an export factor?

1. invoice discounting.
2. providing credit information
3. maintenance of debtors account.
4. None of the above

✅ Correct Answer: 4

Export factoring encourages the following method of payment

1. open account system.
2. letter of credit method
3. documentary bill.
4. advance payment.

✅ Correct Answer: 1

Export factoring encourages the following method of payment

1. open account system.
2. letter of credit method
3. documentary bill.
4. advance payment.

✅ Correct Answer: 1

Factoring refers to.

1. discounting of any export bill.
2. . discounting of medium-term export bill.
3. writing off unrealized export bill.
4. waiver of charges on export bills.

✅ Correct Answer: 2

Under supplier’s credit for deferred payment exports scheme of Exim bank

1. pre-shipment finance is available for periods beyond 180 days
2. post-shipment finance is available in Indian rupees for deferred payment exports.
3. post-shipment finance is available in foreign currency for deferred payment exports.
4. post-shipment finance is available in Indian rupees or foreign currency for deferred payment exports.

✅ Correct Answer: 1

Which of the following statements relating to consultancy and technology services finance programme of Exim bank is wrong?

1. The exporter is expected to get an advance payment of 25%
2. The export should be covered byECGC policy.
3. Minimum period of the loan is seven years
4. They should be secured by a government guarantee or letter of credit

✅ Correct Answer: 3

Pre-shipment credit is available from Exim bank is available for

1. period up to 180 days.
2. period beyond 180 days.
3. turnkey projects only.
4. foreign currency component only.

✅ Correct Answer: 2

Extension period of credit for export

1. 180 days
2. 220days
3. 90days
4. 270days

✅ Correct Answer: 3

The standard policy of ECGC covers the risk of

1. buyers failure to obtain import license
2. insolvency of the collecting bank
3. cancellation of the import licence in the buyers country.
4. all the above.

✅ Correct Answer: 3

The standard policy of ECGC is issued

1. 90% for political risk and 60% for commercial risk.
2. 90% for both political and commercial risk.
3. 60% for political risk and 90% for commercial risk
4. 60% for both political and commercial risk.

✅ Correct Answer: 2

The ERIC was renamed as

1. . ECPC
2. ECGC
3. EACP
4. ECPG

✅ Correct Answer: 2

The small exporter’s policy of ECGC is issued to

1. any exporter in the SSI category
2. any exporter who is exempt from excise duty
3. an exporter with an expected turnover of Rs. 1crore.
4. an exporter with an anticipated turnover in the next twelve months not exceeding of Rs. 50 lakhs.

✅ Correct Answer: 4

Which of the following information about the small exporter’s policy is wrong?

1. Risk coverage is 95% for commercial risks and 100% for political risk.
2. The policy issued for 12 months
3. The premium payable is less than the standard policy
4. None of the above.

✅ Correct Answer: 4

The maturity factoring facility of ECGC protects the exporters against

1. failure of the buyer to obtain authority as per the regulations of his country.
2. risk normally covered by General Insurance.
3. failure of the buyer to pay.
4. none of the above.

✅ Correct Answer: 3

Cover under the guarantee of ECGC is available to

1. the bank against the default of the importer.
2. the bank against the default of the exporter.
3. the bank against the default of the importer and exporter.
4. the exporter against the default of the importer.

✅ Correct Answer: 2

Pre-shipment advances granted in excess of FOB value of contract against duty drawback can be covered under

1. packing credit guarantee
2. whole turnover packing credit guarantee.
3. export production finance guarantee.
4. export finance guarantee.

✅ Correct Answer: 3

Export finance guarantee of ECGC protects

1. banks providing foreign currency loans to correspondents.
2. banks providing foreign currency loans to contractors.
3. overseas branches financing Indian exports
4. overseas branches financing Indian imports.

✅ Correct Answer: 2

Pre-shipment advances against export incentives can be covered under

1. post-shipment export credit guarantee
2. whole turnover post-shipment credit guarantee
3. export production finance guarantee.
4. export finance guarantee.

✅ Correct Answer: 4

The rate of premium payable to ECGC for eligible advances covered under whole turnover packing credit guarantee is

1. 6 paise per Rs.100 p. on daily average products
2. 6 paise per Rs.100 p.m. on daily average products.
3. 6 paise per Rs.100 p. on monthly average products.
4. 6 paise per Rs.100 p. on yearly average products.

✅ Correct Answer: 1

The risk to a bank in confirming a letter of credit is covered by ECGC under

1. export performance guarantee
2. transfer guarantee.
3. export finance guarantee.
4. import and export finance guarantee.

✅ Correct Answer: 2

Under exchange fluctuation risk cover, the ECGC provides cover

1. to the exporters on deferred payment terms against exchange fluctuations.
2. to banks for advances made in foreign currency to importers abroad
3. to banks against advances made deferred payment export.
4. to banks for advances made in foreign currency to importers and exporters abroad

✅ Correct Answer: 1

Working group consist of

1. RBI
2. EXIM Bank and ECGC
3. RBI, EXIM Bank and ECGC
4. RBI and ECGC

✅ Correct Answer: 3

How many percentage of contract value the exporter can receive as an advance

1. . 25%
2. 50%
3. 15%
4. 35%

✅ Correct Answer: 3

Commodity Boards do not differ from Export Promotion Councils in respect of the following

1. Commodity Boards deal with problems relating to production also.
2. Commodity Board is a statutory body.
3. Commodity Board covers a specific product.
4. None of the above

✅ Correct Answer: 3

A confirmed letter of credit is one

1. Confirmed by bank in the exporters country
2. . Confirmed by the importers to be correct
3. confirmed by the exporter that he agrees to the conditions
4. confirmed to be authentic

✅ Correct Answer: 1

The institution specializing in organizing fairs and exhibitions is

1. Indian Institute of Foreign Trade.
2. Federation of Indian Export Organization.
3. Indian trade Promotion Organization.
4. None of the above

✅ Correct Answer: 3

Funds allocated under ASIDE should be used for

1. developing infrastructure such as roads.
2. creation of free trade zone.
3. advertisements abroad
4. conducting trade tours.

✅ Correct Answer: 1

Market Access Initiative is not available for

1. A. Conducting market studies.
2. participation in international trade fairs.
3. testing charges for engineering products.
4. None of the above

✅ Correct Answer: 3

Duty drawback is available for

1. import duty on imported components.
2. central excess on indigenous companies.
3. both (a ) and (b) above.
4. (c) above and VAT.

✅ Correct Answer: 3

Excise duty exemption on exports is available for duty paid on

1. finished products only
2. components only
3. finished products and components.
4. imported item.

✅ Correct Answer: 3

Submission to the bank of the bill of entry as evidence of import is mandatory where the value of import exceeds

1. USD 10,000.
2. USD 25,000
3. USD 1,00,000.
4. USD 1,00,000 in a year.

✅ Correct Answer: 3

A bank receives for collection a bill drawn on an importer who is not it’s customer, for retirement of the bill, the bank

1. can accept payment in cash
2. should forward the bill to the importer’s bank for delivery of documents
3. can accept cheque drawn by the importer on his bank.
4. can accept cheque drawn in the favor of the importer duly endorsed in bank’s favor.

✅ Correct Answer: 3

The currency in which payment for import is made depends upon

1. The country from which the goods are shipped
2. The country of origin of goods.
3. The arrangement between the buyer and seller.
4. The bank which the importer’s bank has correspondent relationship.

✅ Correct Answer: 1