State Bank of India, Team SBLC, Siliguri, West Bengal

MCQ on Home Loans

Compiled by Sri A K Marandi, Manager (Training), SBLC, Siliguri, West Bengal (1) Takeover of Home loans above Rs. __________ lacs is permissible only in cases where the Home Loan account (proposed to be taken over) has a minimum seasoning tenor of ______ years a) Rs. 10.00 lacs; 5 years c) Rs. 100.00 lacs; 2 years b) Rs. 50.00 lacs; 3 years d) Rs. 200.00 lacs; 4 years Home Loan account (proposed to be Taken over from other Banks/HFCs/FIs) should have a satisfactory track record of a minimum of two years from the date of _____________ and the account should be `Standard as per IRAC norms. a) Takeover c) Receipt of application for Takeover b) Sanction of the Loan d) First disbursement Due diligence of the applicants based on ___________________ etc. a) KYC documents, CIBIL data, c) Verification of Residence/Office address, b) Verification of PAN/Income Tax Returns/Form-16 e) All of the above and Salary Certificate, In case of substantial increase/decrease in the current income of the applicants vis--vis the previous years income, the reasons thereof should be _____________________. a) Ignored c) recorded b) advised to controllers for approval d) ascertained and evidenced Where the applicants are Businessmen/Professional & Self Employed, their Audited Balance Sheet/P&L Statement/Income Statement (as applicable) for the last ______________ should be obtained a) 3 years b) 4 years c) 2 years d) 1 year Due diligence on the Builders (in case of _______ Flats)/Seller (in case of _________ property) should be ensured & disbursement of the loan amount should be made directly to the Bank account of the Builders/Seller. a) Resale; New b) New; Resale c) New; New d) Resale; Resale _________ Valuation Reports from different empanelled Valuers of the Bank should be obtained and lower value out of the __________ valuations should be considered for assessment of the eligible loan amount. a) Two b) Four c) Three d) None of the above A Search Report/Encumbrance Certificate for the intervening period, i.e. from ________________________ should be obtained and held on record, as part of the Equitable Mortgage (EM) documents. a) the date of Sanction to the date of deposit of original Title Deeds/creation of EM b) the date of TIR to the date of deposit of original Title Deeds/creation of EM c) the date of TIR to the date of execution of loan documents d) the date of sanction to the date of execution of loan documents An enquiry should be made from CERSAI site (www.cersai.org.in) to ascertain the noting/record of prior encumbrances, if any, on the property being financed by us. a) www.cersai.com b) www.cersai.edu.in c) www.cersai.gov.in d) www.cersai.org.in Where the Sale of Property takes place based on a Power of Attorney, the registration of the Power of Attorney _________________ in all cases a) is not required b) is optional c) may not be insisted upon d) mandatory In case of sale of property through Power of Attorney the Banks empanelled advocate is required to mention (in the Title Investigation Report) that ______________________________________. a) the Power of Attorney is registered with competent authority b) appropriate stamp duty has been paid to the Government c) the issuer of the Power of Attorney is alive and that the Power of Attorney is not revoked d) the KYC of the donor and donee have been verified and found to be satisfactory All cases of property Sale Transactions executed by the holder of a Power of Attorney shall henceforth be examined by the _______________ besides the obtention of the relative Title Verification Report from the Banks panel Advocate. a) Branch Head b) Banks Law Officer c) Controller of the Branch d) None of the above As per the revised instruction if the Builder is a Pvt. Ltd. Company and authorizes some of its Directors/ authorized representatives by way of a POA to sign Flat Allotment Letters, NOCs, Agreements of Sale, Sale Deeds in favour of the buyers, a ___________________________should be obtained from the Builder Company along with a letter confirming that the same is still in force and has not been rescinded, modified or withdrawn. a) letter addressed to the Branch Head/ CPC Head c) a certified copy of the POA b) a certified copy of Board Resolution d) none of the above

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However, in cases, where two or more Directors/ authorized persons have been authorized by execution of a Power of Attorney under the Common Seal of the Company to sign Flat Allotment Letters, NOCs, Agreements of Sale, Sale Deeds in favour of the buyers, ___________should be obtained along with_______________ that the said Power of Attorney is still valid in force and has not been revoked or withdrawn. a) the original POA; a copy of Board Resolution b) a copy of Board Resolution; a letter addressed to Branch Head c) a certified copy of the Power of Attorney; a confirmation letter d) None of the above The verification/comparing the above certified copy with the _____________ can be done either by the operational functionaries or by the Banks empanelled Advocate entrusted with the work of issuing the relative Title Investigation Report. a) original POA b) original Board Resolution c) original TIR d) original letter In case of the builder being a Partnership firm it is necessary that _________ partners execute the Power of Attorney in favour of the one or more persons who are authorized to sign and execute Agreement of Sale, Sale deeds, etc. in favour of the purchaser of the flats/units. Alternatively, one partner can be authorized specifically by _____________ to execute a Power of Attorney on behalf of the firm in favour of one or more persons. This authorization by the remaining partners in favour of one partner should be specific and in writing. a) any, all the partners c) any one; the partner himself b) all the; the remaining partners d) all the; the active partners In case of Individuals or Proprietary Concerns whenever a Power of Attorney is executed in favour of one or more persons, a _______________ should be obtained and verified with the original Power of Attorney. Further, a letter should be obtained from the Builder confirming that the Power of Attorney executed in favour of the person/s is ____________ and has not been revoked or withdrawn. a) a Board Resolution; properly stamped b) a letter addressed to the Branch/ CPC Head; duly signed c) Article of Association/ Memorandum of Association; neatly typed d) a certified copy of the same (POA); still valid In terms of our extant norms, Home Loans upto Rs.20 lacs are sanctioned with LTV ratios upto ____ and Home Loans above Rs.____ lacs are sanctioned with LTV ratios upto 80%. a) 80%; 10 b) 85%; 50 c) 90%; 20 d) None of the above Home Loans upto Rs.75 lacs attract a lower Risk Weight if the LTV ratio of such loans is lower than _________. a) 90% b) 85% c) 80% d) 75% The Revaluation of Assets should be done _______ so that the correct Loan-to-Value (LTV) ratio is worked out for the entire Home Loan portfolio and the correct computation of Capital Adequacy of our Bank ensured. a) once in three years b) once in two years c) every year d) not to be done after sanction of the loan Circle RACPC: contains a list of accounts (Home Loan accounts having LTV ratios of more than 75%) at RACPCs, where the security should be revalued on the basis of ________ Residex a) RBI b) NHB c) HDFC d) SBI In the list of accounts at RACPCs, the particular accounts which are not covered under NHB Residex will be revalued on the basis of _______ . a) valuation report c) Statutory Auditors b) assessment made by Branch operating officials d) current market prices Home Loans given up to Loan to Value (LTV) ratio of 75% attract relatively lower Capital Risk Weight (CRW) but Loans given above LTV ratios of 75%, attract a higher CRW i.e. ______. a) 90% b) 95% c) 100% d) 150% Risk weights assigned by the Reserve Bank of India on Home Loans upto Rs. 30.00 lacs where LTV Ratio is upto 75% is ________ a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Risk weights assigned by the Reserve Bank of India on Home Loans upto Rs. 30.00 lacs where LTV Ratio is above 75% is ________ a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Risk weights assigned by the Reserve Bank of India on Home Loans Above Rs. 30.00 lacs and below Rs. 75.00 Lacs where LTV Ratio is upto 75% is ________ a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Risk weights assigned by the Reserve Bank of India on Home Loans Above Rs. 30.00 lacs and below Rs. 75.00 Lacs where LTV Ratio is above 75% is ________ a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Risk weights assigned by the Reserve Bank of India on Home Loans for Rs. 75.00 lacs and above where LTV Ratio is upto 75% is ________ a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Risk weights assigned by the Reserve Bank of India on Home Loans for Rs. 75.00 lacs and above where LTV Ratio is above 75% is ________

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a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio In order to derive the benefit of a lower CRW, the appreciation in property value needs to be assessed through periodical revaluations of the property till such time that the relative LTV ratio goes below ______. a) 50% b) 75% c) 100% d) 125% irrespective of LTV Ratio Housing Price Index has been launched by the National Housing Bank for tracking movements of property prices a) inflation b) Petroleum Prices c) value of US Dollar d) property prices The details of City-wise and Area-wise RESIDEX is also available on _____ website. a) RBI b) SBI c) NHB d) HDFC Places for which NHB RESIDEX is not available the current market prices are ascertained through enquiries with a few reputed builders in the area/guideline value at the Registrars Office/ real estate market, which would give a fair indication of the current prices. a) local persons; Land Revenue; local market b) reputed builders; Registrars; real estate market c) Govt. Officials; Block/ Taluka Development; city market d) reputed persons; Ruling Party; hardware market Assuming that the average life of a building is about ______ years, a depreciation of ____% per annum on the value of building may be deducted from the present market value. a) 50 years; 2% b) 40 years; 2.5% c) 25 years; 4% d) 20 years; 5% The revaluation should be done only once a year in _________, for loans sanctioned during the last three years, so that the valuation could be taken into CRW computation as at the end of the financial year. a) October b) November c) December d) January Such valuations would not be necessary from the ______ year onwards after commencement of repayments for Home Loans that are __________ Assets if, by that time, the LTV ratio of such loans comes down to _____ or below through regular repayments, even if there is no appreciation in the value of the property. a) first; Doubtful; 80% b) second; Substandard; 85% c) third; Loss; 90% d) fourth; Standard; 75% If there is steep volatility in the real estate prices, which does occur sometimes, every asset should be revalued during the month _______ in order to arrive at the correct CRW. a) November b) December c) January d) February In the case of Home Loans with outstandings of above Rs.________ that are Standard Assets, the underlying properties should be revalued once in every _____ years by engaging an empanelled architect/ engineer/valuer a) Rs. 4.00 Crore; 4 years b) Rs. 3.00 Crore; 3 years c) Rs. 3.00 Crore; 1 years d) Rs. 1.00 Crore; 3 years A Reverse Mortgage Loan Asset remains classified as Standard Asset till _____ days after the due date. If the outstandings is not liquidated (within the aforesaid period), then it will be classified as a Sub-standard Asset on the ____th day after the due date. a) 90 days; 91st day b) 90 days; 90th day c) 89 days; 90th day d) All of the above In Reverse Mortgage Loan permanent move means that the date on which the Bank is advised that ________. a) the borrower has moved out of the house to settle down permanently at some other place and he will not come back in future years b) neither the Borrower nor any other co-borrower has lived in the house continuously for the previous one year/ does not intend to live there continuously c) the borrower has decided to sell the property to liquidate the Bank Loan and to purchase another property with a fresh loan d) None of the above The settlement of outstandings in Reverse Mortgage Loan has to be made by the _________________. a) proceeds received from the sale of underlying house through enforcement SARFAESI a) proceeds received from the sale of underlying house through enforcement Civil Suit c) proceeds received from the sale of underlying house or prepayment made by borrowers or by legal heirs of the borrowers d) All of the above In Reverse Mortgage Loan the _______________ shall be provided with the first right to settle the outstanding with or without the sale of underlying house a) purchaser and his/ her representative b) SARFAESI agent and their legal representative

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c) borrower and their legal heirs d) None of the above A reasonable amount of time (________________) may be provided to the legal heirs for selling the house and settlement of the outstandings from the date the outstanding amount falls due for repayment before initiating recovery measures (However the outstandings in the account should be classified as sub-standard if it has remained outstanding beyond the due date for 90 days or more). a) (upto the 3 months) b) (upto the 6 months) c) (upto the 9 months) d) (upto the 12 months) The Tripartite Agreement duly signed by the Borrower, Builder and the Authorized _______________ is obtained in all Home Loans emanating from approved Builder Tie-ups, wherever the creation of equitable mortgage is scheduled to take place subsequent to the disbursal of the loan. a) official of the Registrar office b) official of the Bank c) official of the Land Revenue office d) official of the local PS As per the revised norms SBI Pre-approved Loan Arrangement Letter (PLAL) will be valid for a period of ____. a) 2 months b) 3 months c) 4 months d) 5 months The Interest Rate prevailing on the date of issue of Pre-approved Loan Arrangement Letter will not be protected. The Interest Rate prevailing on the date of sanction of Home Loan will be applicable. a) on the date of receiving the Home Loan application b) on the sanction of Home Loan c) on the date of disbursement of Home Loan d) on the date of execution of document of Home Loan On the expiry of the validity period, _______________ from the appropriate sanctioning authority. a) revalidation of earlier sanction should be obtained b) no fresh sanction should be obtained c) fresh sanction should be obtained d) none of the above In case a request for revalidation is received from the customer and ________% of the applicable Processing Fee would be recovered for each revalidation of sanction. a) 20% b) 30% c) 40% d) 50% As per the revised norms home Interiors/ furnishings as part of the project cost can be extended upto 10% of the cost of the house/ flat or Rs. __________, whichever is lower. However, the maximum loan amount will be restricted to the stipulated LTV Ratio. a) Rs. 3 lacs b) Rs. 5 lacs c) Rs. 6 lacs d) Rs. 8 lacs The amount sanctioned towards Interiors/Furnishings will be a part of the total project cost and will be disbursed only after the completion of construction of house/flat. a) at the time of first disbursement b) after completion of the project c) before completion of the project d) in a phased manner during the construction of the house Answers (MCQ on Home Loan) (b) 21 (b) 26 (b) 31 (d) 22 (d) 27 (c) 32 (c) 23 (c) 28 (d) 33 (d) 24 (a) 29 (d) 34 (c) 25 (c) 30 (b) 35

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(d) (c) (b) (b) (d)

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(d) (c) (d) (c) (b)

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(c) (c) (b) (b) (c)

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(b) (c) (d) (c) (b)

(Based on e-Circular Nos. NBG/PBU/HL-HOME LOANS/55/2012 13 dated 09/03/2013; NBG/PBU/HL-HOME LOANS/44/2012 13 dated 28/12/2012; NBG/PBU/HL-HOME LOANS/ 51/ 2012 13 dated 28/02/2013; NBG/PBU/HL-HOME LOANS/39/2012 13 dated 01/12/2012; NBG/PBU/HL-HOME LOANS/38/2012 13 dated 26/11/2012, NBG/PBU/HL-HOME LOANS/52/2012 13 dated 28/02/2013;)