GUJARAT TECHNOLOGICAL UNIVERSITY
MBA. Sem-III Regular Examination January 2011
Subject code: 839905 Subject Name: Banking and Insurance
Date: 10 /01 /2011 Time: 10.30 am – 01.00 pm
Total Marks: 70
1. Attempt all questions.
2. Make suitable assumptions wherever necessary.
3. Figures to the right indicate full marks.
Q.1 (a) Suppose you are manager of a bank, what precautions would you take at
the time of opening of new account and operation in the following types of
i. Hindu Undivided Family 03
ii. Club / Association 02
iii. Trust 02
(b) Explain the following terms:
i. Insurable Risk 03
ii. Money Laundering 02
iii. Electronic Clearing System 02
Q.2 (a) Read the following case and answer: Is it a case of non-disclosure of
material facts by the insured? If yes, what made the Court to decide the
case in favour of the insured?
“Mr. X took a policy in February 2008. He died within two years, in
August 2009. The insurer investigated the claim and found that he had
consulted a doctor, and had taken medicine on various occasions in 2006,
2007 and 2008. In the proposal for the question: Have you within the past
five years consulted any medical man for any ailment not necessarily
confining to your house? The response gien was ‘NO’.
The insurer repudiated the claim alleging that the inssured had deliberately
suppressed facts about his illness which was a material fact. When the issue
was taken to court, the insurer could prove that the insured had been taking
medicines and injections but not that he was suffering from any particular
The doctor who gave evidence about the medicines taken also stated ‘the
diseased was usually of neurasthenic type, that his condition was almost
normal. Occasionally took medicines from him and used to make much
fuss about even small ailments, and he would be quite upset over such
The judgment was in favour of the claiment.”
Hyperchondria: an abnormal condition characterized by a depressed
emotional state and imaginary ill health, referable to the physical
condition of the body or one of its parts.
(b) What is ‘Nomination Facilty’? Give salient features of the nomination
facility extended by the banks for deposit accounts. What difficulties does
the legal hier may face in claiming the balance in the deceased customer’s
account in absence of nomination?
(b) How does Reserve Bank of India monitor flow of money supply in
economy by altering CRR, SLR and Repo rates?
Q.3 (a) What is priority sector? Which are the sectors considered as priority sector
for bank lending? What are the targets fixed by RBI for Priority Sector
(b) What is ‘Banker’s Lien’? How is it different than the ‘General Lien?
What is ‘Right of Set Off’? Explain the situations where a banker can
exercise this right.
Q.3 (a) What is ‘Right of Appropriation’? When is the ‘Clayton’s Rule’ applied?
What are the consequences if precautions are not taken to adhere to the
provisions of Clayton’s Rule?
(b) Enlist important recommendations of Narsimham Committee Report – I for
the financial system of India. Do you observe implementation of these
recommendations in banking sector?
Q.4 (a) The need for good service in life insurance is not over emphasised.
Elaborate. How can quality be ensured in customer service?
(b) There is strong need for regulation in insurance. Discuss. Elucidate the
provisions to protect the interests of the policy holders.
Q.4 (a) What are the conditions to be fulfilled by the claimant in a maturity claim,
and death claim?
(b) Why does selling have a special place in life insurance marketing?
Describe the stages in the traditional way of selling process.
Q.5 (a) Whar are insurable risks? How does insurance work as a risk transfer
(b) What is ‘Annuity’? How the insurers include different options to make
annuity plan offers attractive?
Q.5 (a) How do you feel about the impact of Insurance on the country’s economy
and on the lives of individuals?
(b) What is material fact? Why has it to be disclosed to the insurer? 07