Paper: Insurance and Banking

General Instructions:

Code: 443A

The Student should submit this assignment in the handwritten form (not in the typed format) The Student should submit this assignment within the time specified by the exam dept The student should only use the Rule sheet papers for answering the questions. The student should attach this assignment paper with the answered papers.

Failure to comply with the above Four instructions would lead to rejection of assignment. Specific Instructions:
There are four Questions in this assignment. The student should answer all the four questions. Marks allotted 100. Each Question carries equal marks (25 marks) unless specified explicitly

Question No 1:
a) Pune branch of a bank had to procure a loan agreement from a constituent located at Madurai. The branch got the agreement typed out on stamp paper purchased in Maharashtra State and asked the constituent to execute it in Madurai. The required amount of stamp duty was paid in Maharashtra. Comment on the procedure followed

b) A bank disbursed a loan to its customer after obtaining a demand promissory note executed by its customer. It is later on noticed that the promissory note is not stamped. The bank considers two alternatives to remedy the situation. First, to affix the necessary stamp duty on the note which has already been executed, and the second to get a fresh promissory note duly stamped. The bank is advised against the second alternative on the ground that as the loan has already been disbursed, there would be no consideration to support the fresh promissory note. Discuss both the alternatives with reference to relevant statutory provisions and advise as to which alternative should the bank adopt and why ?

c)

A partnership firm Sohan & Co., with Sohan, Mohan and Rohan as partners, maintains current account with a bank. The bank has received a notice that Sohan has been declared insolvent. At that time, the account is overdrawn to the extent of Rs.50,000. How would the bank proceed ?

d) You, as a Bank Manager, have been asked to add confirmation to an irrevocable letter of credit by the issuing bank. Describe the meaning and implication of adding confirmation through the letter of credit.

Question No 2:

(i) What are the accepted norms the banks should follow to minimise the risk involved in lending ? (ii) Distinguish between development banking and commercial banking. (iii) Enumerate the main elements of prudential norms announced by the Reserve Bank of India. (iv) Analyse the various items appearing on the asset side of the balance sheet for enhancement of working capital.

Question No 3:
a) Suresh takes out an endowment policy for 15 years for Rs. 15,000 and the premium payable is Rs. 1,200 per annum. He pays premium for 3 years and then stops. What is the surrender value of the policy assuming that surrender value of bonuses already accrued is Rs. 300? b) Asha Trader has its stock insured against fire. Subsequently, fire destroyed a part of stock. Total stock valued on the date of fire was Rs.60,000. The stock was insured on an average clause. Stock valued at Rs.12,000 was salvaged. Stock was insured for Rs.36,000. Prepare a statement showing the calculation of claim c) An income-tax officer attached an LIC Policy in order to recover dues and directed the LIC not to pay policy money to his wife to whom the policy was assigned. Whether LIC should withhold the payment of this policy ? Give reasons

d) Explain the prescribed procedure for lodging claim under the public liability insurance

Question No 4

(I) Explain the following: a. b. c. d. e. f. Puffery Deposit insurance Credit derivatives Foreign equity in insurance sector Warehouse to warehouse clause Professional liability cover.

(II) Describe the role of 'insurance ombudsman' in complaints redressal relating to claims. (III) State the type of marine policy in the following cases : (a) Policy which covers voyage from one place to another. (b) Value of loss is fixed and remains constant. (c) Value of policy is left to be valued when the loss takes place. (d) Policy that covers losses within the particular time and place.

(e) Policy issued in foreign currency.