1. Which of the following documents MUST be
signed?
a) Packing list.
b) Certificate of origin.
c) Commercial invoice.
d) Weight specification.
2. You customer has presented documents
under a freely negotiable irrevocable letter of credit. Upon examination of
documents, you find that the description of goods in the invoice is not as per
L/c. However, your customer wants to be paid before the documents are
dispatched to the issuing bank. Which of the following options do you have as a
nominated bank?
A) Return the documents to the beneficiary
for correction
B) Send message to the issuing bank for
permission to negotiate despite the
discrepancy
C) Send message to the applicant for
permission to negotiate despite the
discrepancy
D) Request the beneficiary to obtain an
amendment from the issuing bank
changing the description of goods
a) A & B
b) A, B & C
c) A, B & D
d) All of the above
3. Bank A receives documents from the
nominated bank under a letter of credit issued by it. The nominated bank’s
schedule states that they have negotiated documents under reserve due to
discrepancies. The schedule also lists down the discrepancies. Which of the
following statements is true?
a) Bank A must reimburse the nominated bank
since they have negotiated
documents
b) Bank A is not required to send a notice
of refusal
c) Bank A is required to send a notice of
refusal, only if it finds discrepancies other than the ones mentioned in the
nominated bank’s schedule
d) Bank A may choose to waive the
discrepancies mentioned in the schedule and reimburse the nominated bank
4. Your bank had issued an irrevocable
documentary credit which expires on March 20th and is available with
and confirmed by bank N. Beneficiary makes compliant presentation to bank N on
March 20th. The presentation is not honored by Bank N. The beneficiary then sends the documents
directly to you on March 25th for payment. Which of the following
correctly reflects your position?
a) You are not liable to pay the beneficiary
as documents were not received by
you within the expiry date of the L/c
b) You should urge bank N to pay the
beneficiary, since they have added
confirmation and then reimburse bank N
c) You should return the documents to the
beneficiary and request them to send
the documents through another bank
d) You should pay the beneficiary
5. Which of the following statements is
false:
a) In case of non-confirming documents,
there is no liability for the nominated
bank to pay beneficiary
b) Payment made by issuing bank to
beneficiary is without recourse
c) Payment made by issuing bank to
confirming bank is without recourse
d) Payment made by nominated bank to
beneficiary is without recourse
6. L/c stipulates that credit would only be
honored at the counters of the issuing bank. The advising bank receives
documents what should it do?
a) Examine documents and inform beneficiary
of any discrepancies found
b) Examine documents and pass it on to the
issuing bank
c) Forward documents directly to the
issuing bank without any document checking
d) Ask beneficiary to route the documents
through any other bank
7. Bank Good Hope negotiates a set of
documents presented by its customer and forwards it to the issuing bank.
Issuing bank accepts the documents and forwards them to the applicant.
Applicant finds that the certificate of analysis does not conform to the L/c
and insist that the issuing bank refund the money debited from its account. Who
is responsible?
a) Negotiating bank
b) Beneficiary
c) Issuing bank
d) Applicant is not allowed to check
documents
8. Where a presentation has been made by a
beneficiary to his bank. Which of the following statement is most suitable?
a) Notice of refusal need not be given
b) Notice of refusal must be given by
telecommunication only
c) Oral notice of refusal may be given if
the beneficiary is in discussion with the
document checker at the counters of the bank
d) Oral notice of refusal may not be given
even is the beneficiary is in discussion with the document checker at the
counters of the bank as it is not allowed by UCP 600.
9. Which of the following statements are
true while handling pending dishonoured documents
A) The documents are held at the disposal
of the applicant
B) The documents securely stored
C) The presenter needs to be informed at
regular intervals
D) The presenter need not be informed at
regular intervals
a) A&B
b) A&C
c) B&C
d) B&D
10. Bank I receives documents under a L/C
it has issued on 6th March. Bank finds the documents to be discrepant.
Which of the following notice of refusal sent by Bank I is valid? [ 7th March is Friday, Bank I
does not work on Saturdays and Sundays , there are no bank holidays in March ]
a) A message sent on 13th March
by tele – transmission stating “we received your documents presented under our
L/C. However we refuse to pay as the documents are discrepant. Meanwhile we are
holding documents at your disposal”
b) message sent on 12th March by
tele – transmission stating “We refuse your presentation as the documents
contain the following discrepancies – Late Shipment, partial shipment. We are
returning the documents to by courier”
c) A message was sent on 10th
March through tele – transmission stating “We refuse payment as the documents
contain the discrepancy late shipment. We will effect payment when documents
are accepted by the applicant”
d) A message was sent on 16th
March through tele – transmission ststing “ We refuse payment as the documents
contain the discrepancy late shipment. We are holding documents pending further
instructions ”
11. Your customer presents an document
under an L/C confirmed by yourself. You find the documents to be in compliance
with the credit terms and negotiate the documents and forward the same to the
issuing bank for payment, which reach the issuing bank on the same day. Issuing
bank refuses the documents after five banking days stating a valid discrepancy.
Which of the following statements is true?
a) You have recourse to the beneficiary
b) You have recourse to the issuing bank
c) You have recourse to the applicant
d) You have no recourse neither to the
beneficiary or the issuing bank
12. An LC issued by Bisco Bank evidences
the following:
Quantity is 30000 pairs
Amount is USD 555,000.00
Bisco Bank issued an amendment on 18th
March changing the following
Quantity as 50000 pairs
Amount as USD 700,000
Beneficiary did not communicate its
acceptance of the amendment but shipped 50000
pairs of shoes on 5th March 2007 for USD 700,000 and sent the
documents directly to Bisco bank. The documents reached the Bisco bank on 20th
March 2007.
a) Issuing bank is not liable to pay as the
shipment was effected before the L/c
amendment
date
b) Issuing bank should ascertain from the
applicant if beneficiary was informed of the amendment before its issuance
c) Issuing bank is liable to pay as the
documents comply with LC and amendment
d) Issuing bank is not liable to pay
because beneficiary did not communicate
acceptance of the amendment
13. You receive an L/c with the following
conditions:
Certificate stating that the ship will not
sail to any Israeli port
Quality certificate from a first class
agency
Beneficiary presents the following
documents
Beneficiary certificate stating that the
ship will not sail to any Israeli port
Quality and Quantity certificate issued by
a subsidiary of the beneficiary
a) Both documents are acceptable
b) Both documents are unacceptable
c) Ist acceptable but II is not
d) II is acceptable but I is not
14. Which of the following is true
regarding sending documents on approval basis?
a) Issuing bank need not examine documents
b) Documents do not meet L/c requirements
c) Negotiating bank send documents only
after it gets approval from issuing bank
d) All of the above
15. Which of the following is not a transport
document?
a) Charter party bill of lading
b) House bill of lading
c) House air way bill
d) Forwarder’s cargo receipt
16. If a documentary credit calls for a
certificate of origin to be issued by official authority, which of the
following issuers are not acceptable?
a) Manufacturer (who is different from the
beneficiary)
b) Chamber of commerce
c) Government
d) None of the above
17. An L/c in which partial shipment is
prohibited is issued for USD 100,000.00 with a tolerance of +10% applicable. Subsequently
an amendment is issued reducing the LC amount to USD 90,000.00. The beneficiary
did not expressly communicate his acceptance/rejection to the amendment,
however, presented documents for USD 98,000.00. Then,
a) The beneficiary has accepted the amendment
and documents presented are
clean
b) The beneficiary has rejected the
amendment, but documents are discrepant as
partial
shipment is prohibited
c) The presentation is not valid, as the
beneficiary has not mentioned whether the amendment is accepted/rejected
d) The presentation is clean, though
beneficiary’s acceptance/rejections is not
determinable
18. If a credit issued by MT 999 and
without stating “full details to follow”, do you regard the transmission as the
“operative instrument”
a) Credit is sent via SWIFT medium, hence
it is an operative instrument
b) Credit does not state “full details to
follow”, hence it is an operative instrument
c) Both A & B are true
d) Credit is not an operative instrument
19. Which of the following statement is/are
False:
a) Unless the nominated bank is the
confirming bank, a nomination by the issuing bank does not constitute any
undertaking by the nominated bank to pay, to incur a deferred payment
undertaking, to accept drafts or to negotiate
b) The issuing bank can only request and
cannot instruct a bank to add confirmation to a credit even if the bank is its
own correspondent bank
c) Credits are rarely issued as available
with issuing bank
d) The nominated bank does not have to
accept the nomination of the issuing bank, but mere fact of nomination imposes
an obligation on nominated bank
20. The additional conditions in LC states
“shipment to be effected on Full Container Load (FCL) basis”. The condition
should be satisfied in which of the documents:
a) Invoice
b) Bills of lading
c) Separate certificate should be issued by
the carrier/agent stating the above
condition
is fulfilled
d) Should be disregarded since the L/c does
not specify the document which need
to
evidence the above condition
21. Bank A receives documents from the
nominated bank under a letter of credit issued by I. The nominated bank’s
schedule states that they have negotiated documents under reserve due to
discrepancies. The schedule also lists
down the discrepancies. Which of the following statements is true?
a) Bank A must reimburse the nominated bank
since they have negotiated
documents
b) Bank A is not required to send a notice
of refusal
c) Bank A is required to send a notice of
refusal, only if it finds discrepancies other
than the ones mentioned in the nominated
bank’s schedule
d) Bank A may choose to waive the
discrepancies mentioned in the schedule and
reimburse the nominated bank
22. The issuing bank which receives a
request or authority to pay againt discrepant documents from a nominated bank
a) Need not refer the discrepancies to the
applicant, if the discrepancies are
acceptable to it
b) Must refer the discrepancies to the
applicant for their approval
c) Must replay to the nominated bank within
5 banking days following the date of
receipt of such request
d) The issuing bank is not bound to check
documents if it authorises the
nominated bank to pay
23. Your customer has presented documents
under a documentary credit which had the following terms
Documents required – Certificate of origin
issued by chamber of commerce
Documents required – Manually signed
commercial invoice
Special condition – All packages to be mark
with country of origin – India
Which of the following statements are most
appropriate?
a) A separate certificate or an
certification on the invoice stating all packages
are marked with country of origin is
required
b) Certificate of origin must show all
packages are marked with country of origin
c) A separate certificate is not
required, is the certificate of origin
states all
packages
are marked with country with country of origin
d) Special condition can be ignored
24. The confirming bank receives documents
on Friday 02 April and finds them to be in order on 05th April.
Tenor is 30 days after the bill of lading date. The bill of lading is dated 01st
April, and the confirming bank agrees to pay the beneficiary immediately. On
what date would the confirming bank expect to receive funds from the issuing
bank?
a) 05th April
b) 12th April
c) 30th April
d) 03rd May
25. If an applicant requests that the
documentary credit expires for presentation at the issuing bank with drafts
drawn on the issuing bank 90 days after sight, how should the documentary credit
be made available?
a) By sight payment
b) By deferred payment
c) By acceptance
d) By negotiation
26. A documentary credit that will become available for presentation
of shipping documents to the issuing bank only after it has received and
approved a performance guarantee is usually described as :
a) Standby
b) Revocable
c) Inoperative
d) Advance Payment
27. In accordance with UCP, what is the
maximum number of banking days (inclusive of presentation date) that a
confirming bank is allowed to refuse the documents?
a) One
b) Three
c) Five
d) Six
28. If an applicant request that the
documentary credit expires at the counters of beneficiary’s bank with drafts
drawn on that bank at 60 days after shipment date, how should the documentary
credit be made available?
a) By mixed payment
b) By deferred payment
c) By negotiation
d) By acceptance
ANSWERS
1.
B
2.
C
3.
D
4.
D
5.
D
6.
C
7.
C
8.
C
9.
D
10.
B
11.
B
12.
C
13.
A
14.
B
15.
D
16.
D
17.
D
18.
D
19.
D
20.
D
21.
D
22.
A
23.
D
24.
D
25.
C
26.
C
27.
D
28.
D