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EXIM Finance MCQ Set 1
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EXIM Finance MCQ Set 1
1
Incoterms cover
A
trade in intangibles
B
ownership and transfer rights
C
contracts of carriage
D
rights and obligations of parties to contract of sales
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✅ Correct Answer: 4
2
Which of the following term cannot be used for transportation of goods by sea?
A
CFR.
B
DDP
C
DES
D
DEQ
Show Answer
✅ Correct Answer: 2
3
Which of the following term cannot be used for transportation of goods by sea?
A
CFR.
B
DDP
C
DES
D
DEQ
Show Answer
✅ Correct Answer: 2
4
Which of the following term cannot be used for transportation of goods by sea?
A
CFR.
B
DDP
C
DES
D
DEQ
Show Answer
✅ Correct Answer: 2
5
The incoterm providing least responsibility to seller is
A
EXW.
B
DDP
C
FOB
D
CIF
Show Answer
✅ Correct Answer: 1
6
The group of incoterms under which the seller’s responsibility is to obtain freight paid transport document for the main carriage is
A
E terms
B
C terms.
C
D terms
D
F terms.
Show Answer
✅ Correct Answer: 2
7
The incoterm should indicate the place of shipment in case of
A
F terms
B
E terms.
C
C terms.
D
D terms.
Show Answer
✅ Correct Answer: 1
8
Incoterm is specific about the responsibility for marine insurance in case of
A
FOB and EXW
B
FOB and CIF
C
CIF and CIP.
D
CPT and DDP.
Show Answer
✅ Correct Answer: 3
9
The group of terms arranged in order of increasing responsibility of exporter is.
A
. C,D,E and F terms.
B
D,E,F and C terms.
C
E,F,C and D terms.
D
F,C,E and D terms.
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✅ Correct Answer: 3
10
The price quoted by the seller for the product
A
A. will vary depending upon the incoterm chosen.
B
irrespective of the incoterm.
C
will be the base price; the effect of incoterm to be added later
D
will include only cost.
Show Answer
✅ Correct Answer: 1
11
Adoption of incoterm is
A
compulsory for all international contracts
B
compulsory for all letter of credit transactions.
C
optional for the parties to the contract
D
mandatory for transactions with Europe.
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✅ Correct Answer: 3
12
Which of the following term cannot be used for transportation of goods by Road or Air?
A
FAS.
B
DDP
C
EXW
D
CIP.
Show Answer
✅ Correct Answer: 1
13
Packing credit is
A
an advance made for packing goods for export.
B
pre-shipment finance for export.
C
a priority sector advance.
D
advance for importer.
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✅ Correct Answer: 2
14
The amount of packing credit should not normally exceed
A
. the local cost of manufacture for the exporter.
B
FOB value of the export contract.
C
CIF value of the export contract.
D
D. the cost of manufacture or FOB value of the export contract whichever is les
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✅ Correct Answer: 4
15
Which of the following person is not eligible for packing credit?
A
a .merchant exporter.
B
a person making deemed exports.
C
sub-suppliers to manufacture exporter
D
supplier to sub-supplier to manufacture exporter.
Show Answer
✅ Correct Answer: 4
16
The running account facility for packing credit is available for
A
A. status holders only.
B
export for specified goods.
C
exporters with good track record
D
exporters with orders above Rs. 100 crores.
Show Answer
✅ Correct Answer: 3
17
The advantage to the exporter of running account facility of packing credit is
A
. production of letter of credit or firm order is completely waive
B
the period of facility need not be adhered to.
C
production of letter credit on firm order is waived immediately they must be produced within a reasonable time.
D
. the rate of interest is low.
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✅ Correct Answer: 3
18
The exemption from the condition credit should not exceed the domestic cost of production is not waived for
A
commodity eligible for duty drawback
B
commodity imported under advance licence
C
HPS groundnuts
D
agro-based productions like tobacco.
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✅ Correct Answer: 2
19
The substitution of commodity/fresh export of adjustment of packing credit is not available for
A
advance against sensitive commodities.
B
transactions of sister/associate/group concerns.
C
. exports availing running account facility.
D
exports with imports.
Show Answer
✅ Correct Answer: 2
20
Normally the maximum period for which packing credit advances are made is
A
90 days.
B
135 days
C
180 days
D
360 days.
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✅ Correct Answer: 3
21
A pre-shipment advance is not expected to be adjusted by
A
proceeds of export bill
B
export incentives
C
post-shipment finance
D
local funds.
Show Answer
✅ Correct Answer: 4
22
A packing credit was granted against an export order but the export could not take place
A
It should be reported to the RBI
B
The exporter should be blacklist
C
Claim should be preferred with ECG
D
Interest at domestic rate should be charged on the advance from the date of advance
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✅ Correct Answer: 4
23
For direct export the packing credit should normally be granted only against
A
a letter of credit.
B
firm order.
C
export licence
D
a letter of credit or firm order.
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✅ Correct Answer: 4
24
For packing credit in rupees the interest of period up to 180 days is chargeable at
A
BPLR minus 2.5%.
B
BPLR minus 3%.
C
not exceeding BPLR minus 2.5%.
D
not less than BPLR minus 2.5%.
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✅ Correct Answer: 3
25
Pre-shipment credit in foreign currency is available for a period of
A
maximum 180 days.
B
minimum 180 days
C
maximum 270 days
D
maximum 360 days.
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✅ Correct Answer: 1
26
Pre-shipment credit in foreign currency can be availed in
A
US Dolor only.
B
the currency of export only.
C
the currency of import only.
D
any permitted currency.
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✅ Correct Answer: 4
27
Advising of letter of credit will be done by the bank
A
only to its customers
B
to any person provided the letter of the credit is issued by its correspondent bank.
C
free of charge to its customers and for a cost to others
D
to any beneficiary and from any issuing bank.
Show Answer
✅ Correct Answer: 2
28
The following is not a post-shipment advance
A
negotiation of bill under letter of credit
B
purchase of foreign bill.
C
advance against foreign bill for collection
D
packing credit.
Show Answer
✅ Correct Answer: 4
29
A bill drawn under a letter of credit contains discrepancies
A
the bank should refuse to negotiate documents
B
take the bill on a collection basis only.
C
must negotiate irrespective of discrepancies
D
may purchase it or take it for collection, but should not refuse to handle the bill.
Show Answer
✅ Correct Answer: 4
30
If an export bill which was purchased /negotiated is not realized within reasonable time from the due date the bank shouldis.
A
reserve the bill from the export bill purchase portfolio
B
make a claim with ECGC
C
report to RBI.
D
take further bills from the exporter only on collection bas
Show Answer
✅ Correct Answer: 1
31
The following is a must for an exporter
A
GR form.
B
EP form
C
PP form
D
GRX form.
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✅ Correct Answer: 3
32
Duty drawback is the refund of duty chargeable on
A
Imported material
B
Exported material
C
Damaged material.
D
Mortgaged material
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✅ Correct Answer: 1
33
Availing post-shipment credit in foreign currency is compulsory for
A
exporters who have not availed packing credit.
B
all exporters who have availed packing credit.
C
exporters who have availed pre-shipment credit in foreign currency
D
exporters who have availed credit from banks.
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✅ Correct Answer: 3
34
Post-shipment credit in foreign currency can be availed by
A
use of on-shore foreign currency funds
B
banks raising foreign currency funds abroad
C
exporters arranging funds abroad
D
any of the above methods.
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✅ Correct Answer: 4
35
Advance remittance from importer can be accepted by an exporter in India provided
A
the advance does not carry interest payment.
B
shipment will be made only after one year from the date of receipt of advance.
C
advance does not exceed 25% of export value
D
rate of interest,if payable, does not exceed Libor plus 1%.
Show Answer
✅ Correct Answer: 4
36
A bank may refuse to accept an export bill for collection
A
when the customer has sufficient limits under bill discounting facility. B. D.
B
when the documents have discrepancies when compared to letter of credit requirements.
C
when the documents are received from a non-customer
D
when the documents are received from a customer.
Show Answer
✅ Correct Answer: 3
37
If the importer refuses to accept the bill drawn on him the exporter
A
should reimport the goods.
B
must find an alternate buyer.
C
may reimport or sell to an alternate buyer depending upon commercial expediency
D
sue the importer.
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✅ Correct Answer: 3
38
If export cargo is lost in transit, the exporter should
A
claim under marine insurance.
B
claim with ECGC
C
seek write off of post-shipment credit.
D
seek refund of customs duty.
Show Answer
✅ Correct Answer: 1
39
Pre-shipment rupee credit from Exim bank is available for
A
period up to 180 days.
B
period beyond 180 days
C
turnkey projects only
D
foreign currency components only.
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✅ Correct Answer: 2
40
For export-oriented units, Exim bank finances
A
term loans only.
B
both working capital and term loans
C
term loans, working capital and long term working capital.
D
for investment from overseas.
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✅ Correct Answer: 3
41
Which of the following is not a common feature of direct lending by Exim bank?
A
They are for medium or long term.
B
The size of the loan is high.
C
Security is not insisted upon
D
Interest rates are relatively low.
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✅ Correct Answer: 3
42
Bid Bond issued as part of
A
supply bidding process
B
Turnkey project
C
Post-award clearance
D
Deferred payment
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✅ Correct Answer: 1
43
Exim bank lending to foreign governments take the form of
A
soft loans.
B
commercial loans
C
lines of credit.
D
relending facility.
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✅ Correct Answer: 3
44
The facility that is available to commercial banks in India from Exim bank is
A
refinancing of export credit.
B
export bill re-discounting
C
syndication of export credit risks.
D
All the above
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✅ Correct Answer: 4
45
Exim bank issues guarantees on behalf of
A
all exporters from India.
B
exporters of construction and turnkey projects
C
banks in India.
D
Govt. of India.
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✅ Correct Answer: 2
46
Exim bank issues guarantees to commercial for
A
all export advances
B
all export advances repayable beyond one year
C
post-shipment suppliers credit from one year to three years
D
. loans with refinance from Exim bank.
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✅ Correct Answer: 3
47
Export factoring is available for
A
short term exports.
B
medium-term exports.
C
all exports
D
export under consignment basis.
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✅ Correct Answer: 1
48
. Which of the following service is not provided by an export factor?
A
invoice discounting.
B
providing credit information
C
maintenance of debtors account.
D
None of the above
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✅ Correct Answer: 4
49
Export factoring encourages the following method of payment
A
open account system.
B
letter of credit method
C
documentary bill.
D
advance payment.
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✅ Correct Answer: 1
50
Export factoring encourages the following method of payment
A
open account system.
B
letter of credit method
C
documentary bill.
D
advance payment.
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✅ Correct Answer: 1
51
Factoring refers to.
A
discounting of any export bill.
B
. discounting of medium-term export bill.
C
writing off unrealized export bill.
D
waiver of charges on export bills.
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✅ Correct Answer: 2
52
Under supplier’s credit for deferred payment exports scheme of Exim bank
A
pre-shipment finance is available for periods beyond 180 days
B
post-shipment finance is available in Indian rupees for deferred payment exports.
C
post-shipment finance is available in foreign currency for deferred payment exports.
D
post-shipment finance is available in Indian rupees or foreign currency for deferred payment exports.
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✅ Correct Answer: 1
53
Which of the following statements relating to consultancy and technology services finance programme of Exim bank is wrong?
A
The exporter is expected to get an advance payment of 25%
B
The export should be covered byECGC policy.
C
Minimum period of the loan is seven years
D
They should be secured by a government guarantee or letter of credit
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✅ Correct Answer: 3
54
Pre-shipment credit is available from Exim bank is available for
A
period up to 180 days.
B
period beyond 180 days.
C
turnkey projects only.
D
foreign currency component only.
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✅ Correct Answer: 2
55
Extension period of credit for export
A
180 days
B
220days
C
90days
D
270days
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✅ Correct Answer: 3
56
The standard policy of ECGC covers the risk of
A
buyers failure to obtain import license
B
insolvency of the collecting bank
C
cancellation of the import licence in the buyers country.
D
all the above.
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✅ Correct Answer: 3
57
The standard policy of ECGC is issued
A
90% for political risk and 60% for commercial risk.
B
90% for both political and commercial risk.
C
60% for political risk and 90% for commercial risk
D
60% for both political and commercial risk.
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✅ Correct Answer: 2
58
The ERIC was renamed as
A
. ECPC
B
ECGC
C
EACP
D
ECPG
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✅ Correct Answer: 2
59
The small exporter’s policy of ECGC is issued to
A
any exporter in the SSI category
B
any exporter who is exempt from excise duty
C
an exporter with an expected turnover of Rs. 1crore.
D
an exporter with an anticipated turnover in the next twelve months not exceeding of Rs. 50 lakhs.
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✅ Correct Answer: 4
60
Which of the following information about the small exporter’s policy is wrong?
A
Risk coverage is 95% for commercial risks and 100% for political risk.
B
The policy issued for 12 months
C
The premium payable is less than the standard policy
D
None of the above.
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✅ Correct Answer: 4
61
The maturity factoring facility of ECGC protects the exporters against
A
failure of the buyer to obtain authority as per the regulations of his country.
B
risk normally covered by General Insurance.
C
failure of the buyer to pay.
D
none of the above.
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✅ Correct Answer: 3
62
Cover under the guarantee of ECGC is available to
A
the bank against the default of the importer.
B
the bank against the default of the exporter.
C
the bank against the default of the importer and exporter.
D
the exporter against the default of the importer.
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✅ Correct Answer: 2
63
Pre-shipment advances granted in excess of FOB value of contract against duty drawback can be covered under
A
packing credit guarantee
B
whole turnover packing credit guarantee.
C
export production finance guarantee.
D
export finance guarantee.
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✅ Correct Answer: 3
64
Export finance guarantee of ECGC protects
A
banks providing foreign currency loans to correspondents.
B
banks providing foreign currency loans to contractors.
C
overseas branches financing Indian exports
D
overseas branches financing Indian imports.
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✅ Correct Answer: 2
65
Pre-shipment advances against export incentives can be covered under
A
post-shipment export credit guarantee
B
whole turnover post-shipment credit guarantee
C
export production finance guarantee.
D
export finance guarantee.
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✅ Correct Answer: 4
66
The rate of premium payable to ECGC for eligible advances covered under whole turnover packing credit guarantee is
A
6 paise per Rs.100 p. on daily average products
B
6 paise per Rs.100 p.m. on daily average products.
C
6 paise per Rs.100 p. on monthly average products.
D
6 paise per Rs.100 p. on yearly average products.
Show Answer
✅ Correct Answer: 1
67
The risk to a bank in confirming a letter of credit is covered by ECGC under
A
export performance guarantee
B
transfer guarantee.
C
export finance guarantee.
D
import and export finance guarantee.
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✅ Correct Answer: 2
68
Under exchange fluctuation risk cover, the ECGC provides cover
A
to the exporters on deferred payment terms against exchange fluctuations.
B
to banks for advances made in foreign currency to importers abroad
C
to banks against advances made deferred payment export.
D
to banks for advances made in foreign currency to importers and exporters abroad
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✅ Correct Answer: 1
69
Working group consist of
A
RBI
B
EXIM Bank and ECGC
C
RBI, EXIM Bank and ECGC
D
RBI and ECGC
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✅ Correct Answer: 3
70
How many percentage of contract value the exporter can receive as an advance
A
. 25%
B
50%
C
15%
D
35%
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✅ Correct Answer: 3
71
Commodity Boards do not differ from Export Promotion Councils in respect of the following
A
Commodity Boards deal with problems relating to production also.
B
Commodity Board is a statutory body.
C
Commodity Board covers a specific product.
D
None of the above
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✅ Correct Answer: 3
72
A confirmed letter of credit is one
A
Confirmed by bank in the exporters country
B
. Confirmed by the importers to be correct
C
confirmed by the exporter that he agrees to the conditions
D
confirmed to be authentic
Show Answer
✅ Correct Answer: 1
73
The institution specializing in organizing fairs and exhibitions is
A
Indian Institute of Foreign Trade.
B
Federation of Indian Export Organization.
C
Indian trade Promotion Organization.
D
None of the above
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✅ Correct Answer: 3
74
Funds allocated under ASIDE should be used for
A
developing infrastructure such as roads.
B
creation of free trade zone.
C
advertisements abroad
D
conducting trade tours.
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✅ Correct Answer: 1
75
Market Access Initiative is not available for
A
A. Conducting market studies.
B
participation in international trade fairs.
C
testing charges for engineering products.
D
None of the above
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✅ Correct Answer: 3
76
Duty drawback is available for
A
import duty on imported components.
B
central excess on indigenous companies.
C
both (a ) and (b) above.
D
(c) above and VAT.
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✅ Correct Answer: 3
77
Excise duty exemption on exports is available for duty paid on
A
finished products only
B
components only
C
finished products and components.
D
imported item.
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✅ Correct Answer: 3
78
Submission to the bank of the bill of entry as evidence of import is mandatory where the value of import exceeds
A
USD 10,000.
B
USD 25,000
C
USD 1,00,000.
D
USD 1,00,000 in a year.
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✅ Correct Answer: 3
79
A bank receives for collection a bill drawn on an importer who is not it’s customer, for retirement of the bill, the bank
A
can accept payment in cash
B
should forward the bill to the importer’s bank for delivery of documents
C
can accept cheque drawn by the importer on his bank.
D
can accept cheque drawn in the favor of the importer duly endorsed in bank’s favor.
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✅ Correct Answer: 3
80
The currency in which payment for import is made depends upon
A
The country from which the goods are shipped
B
The country of origin of goods.
C
The arrangement between the buyer and seller.
D
The bank which the importer’s bank has correspondent relationship.
Show Answer
✅ Correct Answer: 1
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