CAIIB BFM : UNIT 4 Documentary Letters of Credit

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1. UCPDC full form ?
Ans- Uniform Customs and Practices For Documentary Credits

2. ICC Full form ??
Ans- International Chamber of Commerce

3. Headquaters of ICC??
Ans- Paris

4. First UCPDCwas published in which year?
Ans- 1933

5. Latest UCPDC was published in which year?
Ans- 2007

6. updated UCPDC in 2007 is called what??
Ans- UCPDC 600

7. UCPDC was implemented on ??
Ans- 1.7.2007

8. ..... LC can be amended or cancelled at any moment by issuing bank without the consent of any other party?
Ans- Revocable LC

9. ..... LC holds a commitment by the issuing bank to pay or reimburse the negotiating bank,provided conditions of the LC are complied with ??
Ans- Irrevocable LC

10. ..... LC is an unconditional undertaking by the issuing bank to make payment on submission of documents confirming to the terms and conditions of the LC
Ans- Irrevocable LC

11. Change in number of articles in UCPDC 600??
a) 49 to 39
b) 39 to 49
c) 36 to 46
d) 42 to 49
Ans- 49 to 39

12. What is 600 in UCPDC?
Ans- Publication Number

13. As per UCPDC , the issuing bank has .......... banking days to accept or refuse the documents drawn under LC.
Ans- 5 banking days

14. INCOTERM full form??
Ans- International Commercial Terms

15. ucp norms is max ............days aftr shipment date for presentation of documents
Ans-21

16. which clause related to riots, acts of god??
Ans- Force Majeure

17. UCPDC is :

a) SET of rules applicable to cctransactions
b)set of rules having 500 articles
c) set of rules framed by ICC governing LC business globally
d) set of universaly applicable rules governing LC business in INDIA only

Ans- c

18. ICC is ::
a) the issuer of the LC under UCPDC
b) The trade body governing the UCPDC rules
c) A trade for Indian exporters helping to increase exports
d) The confirming bank, which governs rules for LC drawn under UCPDC

Ans- b

19. In an LC transaction,following parties are not involved...
a) The exporter
b) The Issuing bank
c) The advising bank
d) The opening banks representative office in beneficiary's country, who helps source business for the issuing bank

Ans- d

20. Which of the following issues LC?
a) sellers bank
b)buyers bank
c Negotiating bank
d)Advising bank

Ans- b

21. The beneficiary of an LC insists that another bank should give gurantee for payments to the opening bank . Which type of LC will be opened?
a)condirmed lc
b) Restricted LC
c) Standby LC
d) Transferable LC

Ans- a

22. When a bank in India binds itself to honour the drafts drawn by the beneficiary of the LC without recourse to it, this gurantee is known as ....
a. packing credit insurance
b. export finance gurantee
c. transfer gurantee
d. exchange fluctuation risk cover scheme

Ans- c

23. w.e.f 01.07.2007, which will be applicable for foreign LC
a. UCPDC - 400
b. UCPDC 600
c. UCPDC 500
d. UCPDC 700

Ans- b

24. Normally , who will request for the confirmation of LC from the confirming bank ?
a. Exporter
b. Importer
c. Opening bank
d. Advising Bank

Ans- c

25. ICC is ........... Governing the UCPDC rules
a. statuory
b. Non statuory
c. Trade body
d. Self Oriented body

Ans- c

Please correct me in case of any mistake. Happy reading :)