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The Banning of Unregulated Deposit Schemes Act MCQs Set-1
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1. The Banning of Unregulated Deposit Schemes Act came into force in:
a. 2017
b. 2018
c. 2019
d. 2020
2. The Act number of the Banning of Unregulated Deposit Schemes Act, 2019 is:
a. Act No. 12 of 2019
b. Act No. 21 of 2019
c. Act No. 31 of 2019
d. Act No. 19 of 2019
3. The Banning of Unregulated Deposit Schemes Act, 2019 received assent on:
a. 15 August 2019
b. 26 January 2019
c. 31 July 2019
d. 1 July 2019
4. The main object of the Act is to:
a. Promote banking activities
b. Ban unregulated deposit schemes
c. Nationalize financial institutions
d. Regulate stock exchanges
5. The Act seeks to protect the interest of:
a. Shareholders
b. Creditors
c. Depositors
d. Directors
6. The Act bans:
a. All deposit schemes
b. Regulated deposit schemes
c. Unregulated deposit schemes
d. Government savings schemes
7. Deposits taken in the ordinary course of business are:
a. Expressly excluded from the Act’s prohibition
b. Declared illegal
c. Punishable with imprisonment
d. Regulated by RBI only
8. The Banning of Unregulated Deposit Schemes Act, 2019 was enacted by:
a. State Legislature
b. Reserve Bank of India
c. Parliament
d. Supreme Court
9. The Act aims to provide a comprehensive mechanism for:
a. Recovery of taxes
b. Ban on unregulated deposit schemes
c. Regulation of elections
d. Prevention of corruption
10. The long title of the Act indicates that the legislation also deals with:
a. Constitutional amendments
b. Matters connected therewith or incidental thereto
c. International banking treaties
d. Criminal trials only
11. Section 1(1) of the Banning of Unregulated Deposit Schemes Act, 2019 deals with:
a. Definitions
b. Penalties
c. Short title
d. Attachment of property
12. The short title of the Act is:
a. Unregulated Deposits Act, 2018
b. Deposit Regulation Act, 2019
c. Banning of Unregulated Deposit Schemes Act, 2019
d. Illegal Deposits Prohibition Act, 2019
13. Under Section 1(2), the Act extends to:
a. Delhi only
b. Whole of India except the State of Jammu and Kashmir
c. Whole of India including Jammu and Kashmir
d. Union Territories only
14. The Act is deemed to have come into force on:
a. 31 July 2019
b. 1 January 2019
c. 21 February 2019
d. 15 August 2019
15. The commencement provision under Section 1(3) states that the Act:
a. Came into force prospectively only
b. Is deemed to have come into force on 21 February 2019
c. Came into force after notification by RBI
d. Requires State approval for enforcement
16. Under Section 2(1), “appropriate Government” for a Union Territory without legislature means:
a. State Government
b. Supreme Court
c. Central Government
d. Local Authority
17. In relation to the Union Territory of Puducherry, the “appropriate Government” means:
a. Central Government
b. Government of Puducherry
c. Lieutenant Governor only
d. Ministry of Finance
18. Under Section 2(1), for the Union Territory of Delhi, the “appropriate Government” is:
a. Government of that Union Territory
b. Central Vigilance Commission
c. Parliament
d. Reserve Bank of India
19. In respect of a State, the “appropriate Government” under Section 2(1) means:
a. District Magistrate
b. Central Government
c. State Government
d. High Court
20. The definitions clause under the Act applies:
a. Only when specifically notified
b. Unless the context otherwise requires
c. Only in criminal proceedings
d. Only to financial institutions
21. Under Section 2(2) of the Banning of Unregulated Deposit Schemes Act, 2019, the term “company” has the same meaning as assigned under:
a. Companies Act, 1956
b. Banking Regulation Act, 1949
c. Companies Act, 2013
d. RBI Act, 1934
22. “Competent Authority” under Section 2(3) means an Authority appointed under:
a. Section 5
b. Section 7
c. Section 9
d. Section 11
23. The Competent Authority is appointed by:
a. Supreme Court
b. Reserve Bank of India
c. Appropriate Government
d. Parliament
24. Under Section 2(4), “deposit” includes money received:
a. Only as fixed deposits
b. Only in cash
c. By way of advance or loan or in any other form
d. Only through banks
25. A “deposit” under the Act involves a promise to return:
a. Only in cash
b. Only with interest
c. Either in cash, kind or specified service
d. Only after a fixed period
26. Which of the following may accompany repayment of a deposit?
a. Interest
b. Bonus
c. Profit
d. All of the above
27. Amounts received as loan from a scheduled bank are:
a. Included within “deposit”
b. Excluded from “deposit”
c. Punishable deposits
d. Illegal transactions
28. Loans received from a co-operative bank are excluded from “deposit” under:
a. Section 2(4)(a)
b. Section 2(4)(b)
c. Section 3
d. Section 7
29. Financial assistance from a non-banking financial company registered with RBI is:
a. Treated as unregulated deposit
b. Excluded from the definition of deposit
c. Punishable under the Act
d. Allowed only with State approval
30. Section 2(4)(b) excludes loans from Public Financial Institutions notified by the Central Government:
a. Without consultation with RBI
b. With consultation with RBI
c. With approval of Parliament only
d. By Supreme Court notification
31. Amounts received from the appropriate Government are:
a. Included within “deposit”
b. Excluded from “deposit”
c. Punishable deposits
d. Illegal receipts
32. Repayment guaranteed by the appropriate Government falls under:
a. Included deposit
b. Exempted amount under Section 2(4)(c)
c. Unregulated scheme
d. Fraudulent deposit
33. Amounts received from a statutory authority constituted under an Act of Parliament are:
a. Deposits under the Act
b. Excluded from the definition of deposit
c. Illegal financial assistance
d. Treated as profit
34. Amounts received from foreign Governments are excluded from “deposit” subject to compliance with:
a. Companies Act, 2013
b. Income Tax Act, 1961
c. Foreign Exchange Management Act, 1999
d. Insolvency and Bankruptcy Code, 2016
35. Which of the following foreign entities is specifically mentioned in Section 2(4)(d)?
a. Foreign export credit collaborators
b. Municipal corporations
c. State police authorities
d. Gram Panchayats
36. Contributions towards capital by partners of a partnership firm are:
a. Deposits
b. Excluded from deposits
c. Illegal contributions
d. Regulated deposits only
37. Amounts received by a limited liability partnership from partners towards capital are:
a. Included as deposits
b. Excluded from deposits
c. Prohibited transactions
d. Criminally punishable
38. Loan received by an individual from his relatives is:
a. A deposit under the Act
b. Excluded from the definition of deposit
c. Illegal unless registered
d. Allowed only through banks
39. Credit received by a buyer from a seller on sale of property is:
a. A deposit
b. Excluded from “deposit”
c. Punishable credit
d. A banking transaction only
40. Amounts received by an asset reconstruction company registered under the SARFAESI Act, 2002 are:
a. Deposits
b. Illegal deposits
c. Excluded from the definition of deposit
d. Treated as public money
41. Any deposit made under section 34 or amount accepted by a political party under section 29B of the Representation of the People Act, 1951 is:
a. A punishable deposit
b. Included within deposit
c. Excluded from the definition of deposit
d. Illegal political funding
42. Periodic payments made by members of self-help groups are excluded from “deposit” if:
a. Approved by Parliament
b. Within ceilings prescribed by State or Union Territory Government
c. Deposited in nationalized banks only
d. Made through companies
43. Under clause (k), other amounts collected for prescribed purposes are excluded if:
a. Approved by Supreme Court
b. Within ceilings prescribed by State Government
c. Collected by banks only
d. Tax is deducted at source
44. Amount received in the course of business with genuine connection to such business is:
a. Always a deposit
b. Excluded from “deposit”
c. Always punishable
d. Treated as political funding
45. Advance payment for supply or hire of goods is excluded from “deposit” when:
a. It bears genuine connection with business
b. It is received in cash only
c. It is approved by RBI
d. It exceeds prescribed ceiling
46. Advance received towards immovable property is excluded provided:
a. It is adjusted against the property as per agreement
b. It is registered before police authorities
c. It is less than one lakh rupees
d. It carries no interest
47. Security or dealership deposit for performance of contract for supply of goods or services is:
a. A deposit under the Act
b. Excluded from “deposit”
c. Illegal unless bank guaranteed
d. Taxable penalty
48. Advances under long-term projects for supply of capital goods are:
a. Included as deposits
b. Excluded from deposits
c. Prohibited transactions
d. Allowed only to companies
49. If amounts under items (i) to (iv) become refundable, they shall be deemed deposits after:
a. 7 days
b. 10 days
c. 15 days
d. 30 days
50. The proviso to clause (l) applies when:
a. Refund becomes due and unpaid
b. Business closes permanently
c. Interest is not paid
d. Deposit is made by Government
51. Under Section 2(5), “depositor” means:
a. A person who regulates deposits
b. A person who makes a deposit under the Act
c. Only a bank customer
d. A Government authority
52. “Deposit taker” under Section 2(6) includes:
a. Only companies
b. Only partnership firms
c. Various persons and entities specified in the Act
d. Only financial institutions
53. Which of the following is a deposit taker under Section 2(6)?
a. Individual
b. Proprietorship concern
c. Company
d. All of the above
54. A partnership firm is a deposit taker:
a. Only if registered
b. Only if unregistered
c. Whether registered or not
d. Only with RBI approval
55. A limited liability partnership becomes a deposit taker if registered under:
a. Companies Act, 2013
b. Banking Regulation Act, 1949
c. Limited Liability Partnership Act, 2008
d. Partnership Act, 1932
56. Which of the following is specifically included as a deposit taker?
a. Association of persons
b. Municipal corporation only
c. Supreme Court registry
d. Election Commission
57. A trust under Section 2(6)(vii) includes:
a. Only public trusts
b. Only private trusts
c. Both private and public trusts
d. Religious trusts only
58. A private trust referred to in Section 2(6)(vii) is governed by:
a. Companies Act, 2013
b. Indian Trusts Act, 1882
c. Transfer of Property Act, 1882
d. Societies Registration Act, 1860
59. A public trust under Section 2(6)(vii) may be:
a. Only registered
b. Only unregistered
c. Whether registered or not
d. Approved by RBI only
60. Which of the following societies is included within “deposit taker”?
a. Housing society only
b. Co-operative society or multi-State co-operative society
c. Political society only
d. Foreign society only
61. “Designated Court” under Section 2(7) means a court constituted by:
a. Supreme Court
b. High Court
c. Appropriate Government
d. Reserve Bank of India
62. The Designated Court is constituted under:
a. Section 5
b. Section 7
c. Section 8
d. Section 10
63. Under Section 2(8), “insurer” has the same meaning as assigned in:
a. Companies Act, 2013
b. Banking Regulation Act, 1949
c. Insurance Act, 1938
d. RBI Act, 1934
64. The definition of “insurer” is borrowed from clause (9) of section 2 of:
a. Insurance Act, 1938
b. Companies Act, 1956
c. SARFAESI Act, 2002
d. SEBI Act, 1992
65. “Notification” under Section 2(9) means a notification published in:
a. Newspaper
b. Official Gazette
c. Parliament bulletin
d. RBI circular
66. The expression “notify” under the Act shall be construed in relation to:
a. Court order
b. Police report
c. Notification published in Official Gazette
d. Government press conference
67. Under Section 2(10), “person” includes:
a. Individual
b. Hindu Undivided Family
c. Company
d. All of the above
68. Which of the following is specifically included within the definition of “person”?
a. Limited liability partnership
b. Foreign embassy only
c. District court only
d. Election tribunal
69. A trust under Section 2(10) is included within:
a. Depositor only
b. Person
c. Competent Authority
d. Appropriate Government
70. An association of persons is:
a. Excluded from the definition of person
b. Included within the definition of person
c. Treated as Government authority
d. Considered only a depositor
71. The term “prescribed” under Section 2(11) means:
a. Prescribed by Supreme Court
b. Prescribed by rules made under the Act
c. Prescribed by RBI circulars only
d. Prescribed by Parliament resolution only
72. Rules under the Act may be made by:
a. Central Government or State Government
b. High Courts only
c. District Magistrate only
d. SEBI only
73. “Property” under Section 2(12) includes:
a. Only movable property
b. Only immovable property
c. Property or assets of every description
d. Only tangible assets
74. Under Section 2(12), property may be:
a. Corporeal or incorporeal
b. Tangible or intangible
c. Movable or immovable
d. All of the above
75. Deeds and instruments evidencing title or interest in property are:
a. Excluded from property
b. Included within property
c. Treated as deposits only
d. Invalid under the Act
76. “Public financial institution” has the same meaning as assigned in:
a. Insurance Act, 1938
b. Companies Act, 2013
c. RBI Act, 1934
d. Banking Regulation Act, 1949
77. A “Regulated Deposit Scheme” means schemes specified in:
a. Second Schedule
b. Reserve Bank notification
c. Column (3) of the First Schedule
d. Companies Act only
78. “Regulator” under Section 2(15) means the regulator specified in:
a. First Schedule
b. Second Schedule
c. Official Gazette only
d. RBI circular
79. “Schedule” under the Act refers to:
a. Any Government timetable
b. Schedule appended to the Act
c. Criminal Procedure Schedule only
d. Banking Schedule only
80. An “Unregulated Deposit Scheme” means a scheme or arrangement under which deposits are:
a. Accepted or solicited by way of business by any deposit taker
b. Accepted only by banks
c. Guaranteed by Government
d. Regulated by First Schedule
81. Section 5 prohibits wrongful inducement in relation to:
a. Regulated Deposit Schemes
b. Insurance schemes
c. Unregulated Deposit Schemes
d. Banking transactions
82. Under Section 5, a person shall not knowingly make any:
a. False statement
b. Deceptive promise
c. Misleading forecast
d. All of the above
83. The false or misleading representation under Section 5 must relate to:
a. Material facts
b. Personal beliefs
c. Judicial opinions
d. Tax liabilities only
84. Section 5 also prohibits:
a. Delay in repayment
b. Deliberate concealment of material facts
c. Filing of complaints
d. Borrowing from banks
85. The object of wrongful inducement under Section 5 is to induce another person to:
a. Become a judge
b. Invest in or participate in an Unregulated Deposit Scheme
c. Purchase Government bonds
d. File civil proceedings
86. Section 5 applies to:
a. Companies only
b. Firms only
c. Any person by whatever name called
d. Banks only
87. Under Section 6, a prize chit banned under the 1978 Act shall be deemed to be:
a. Regulated Deposit Scheme
b. Unregulated Deposit Scheme
c. Valid chit fund
d. Banking activity
88. A money circulation scheme banned under the Prize Chits and Money Circulation Schemes (Banning) Act, 1978 is:
a. Expressly validated
b. Treated as Unregulated Deposit Scheme
c. Excluded from this Act
d. Regulated by RBI only
89. Section 6 creates:
a. A rebuttable presumption
b. A legal fiction deeming certain schemes as Unregulated Deposit Schemes
c. A banking exemption
d. A taxation mechanism
90. The Prize Chits and Money Circulation Schemes (Banning) Act referred to in Section 6 was enacted in:
a. 1968
b. 1972
c. 1978
d. 1986
91. Under Section 7(1), the Competent Authority is appointed by:
a. Supreme Court
b. Reserve Bank of India
c. Appropriate Government
d. Parliament
92. The appointment of Competent Authority shall be made by:
a. Circular
b. Government order
c. Notification
d. Judicial direction
93. An officer appointed as Competent Authority shall not be below the rank of:
a. District Magistrate
b. Secretary to the Government
c. Joint Secretary
d. Superintendent of Police
94. Under Section 7(2), the appropriate Government may appoint officers to:
a. Replace the Competent Authority
b. Assist the Competent Authority
c. Conduct elections
d. Audit banks only
95. Officers assisting the Competent Authority are appointed through:
a. Gazette notification
b. Court decree
c. RBI circular
d. Presidential ordinance
96. Before provisional attachment under Section 7(3), the Competent Authority must:
a. Obtain High Court permission
b. Record reasons in writing
c. Consult Parliament
d. Issue public notice only
97. Provisional attachment under Section 7(3) may be ordered where the Competent Authority believes that:
a. Deposits are lawfully regulated
b. Deposit taker is soliciting deposits in contravention of Section 3
c. A civil dispute exists
d. Tax has not been paid
98. The belief under Section 7(3) must be based on:
a. Rumours only
b. Anonymous complaints only
c. Information and particulars as may be prescribed
d. Media reports alone
99. Under Section 7(3), the Competent Authority may provisionally attach:
a. Deposits held by the deposit taker
b. Money or other property acquired by the deposit taker
c. Property acquired in another person’s name from deposits collected
d. All of the above
100. The order of provisional attachment under Section 7(3) shall be:
a. Oral
b. In writing
c. Approved by depositors only
d. Issued by police authorities only
101. Under Section 7(4), the Competent Authority has powers vested in:
a. Criminal Court under CrPC
b. Civil Court under the Code of Civil Procedure, 1908
c. High Court under Constitution
d. Sessions Court under IPC
102. The powers of the Competent Authority under Section 7(4) may be exercised while conducting:
a. Trial only
b. Election proceedings
c. Investigation or inquiry
d. Arbitration proceedings
103. Which of the following is a power of the Competent Authority under Section 7(4)?
a. Discovery and inspection
b. Compelling production of records
c. Receiving evidence on affidavits
d. All of the above
104. Under Section 7(4)(b), the Competent Authority may:
a. Arrest any person without warrant
b. Enforce attendance of any person and examine him on oath
c. Grant bail
d. Pass decree of divorce
105. The Competent Authority may issue commissions for:
a. Recovery of taxes
b. Examination of witnesses and documents
c. Registration of companies
d. Conducting elections
106. Under Section 7(5), the Competent Authority may summon any person:
a. Only to give evidence
b. Only to produce documents
c. Either to give evidence or produce records
d. Only after court permission
107. Persons summoned under Section 7 are bound to:
a. Attend in person or through authorised agent as directed
b. State the truth during examination
c. Produce required documents
d. All of the above
108. Proceedings under Sections 7(4) and 7(5) are deemed to be:
a. Administrative proceedings
b. Revenue proceedings
c. Judicial proceedings
d. Arbitration proceedings
109. Judicial proceedings under Section 7(7) are within the meaning of sections 193 and 228 of:
a. Code of Civil Procedure, 1908
b. Indian Penal Code, 1860
c. Criminal Procedure Code, 1973
d. Indian Evidence Act, 1872
110. Under Section 7(6), summoned persons are bound to state:
a. Only written submissions
b. The truth upon matters respecting which they are examined
c. Opinions of advocates only
d. Facts approved by Government only
111. Section 8 of the Banning of Unregulated Deposit Schemes Act, 2019 deals with:
a. Competent Authority
b. Designated Court
c. Appeals
d. Punishment
112. The Designated Court is constituted by:
a. Supreme Court
b. Reserve Bank of India
c. Appropriate Government
d. Parliament
113. The constitution of a Designated Court requires concurrence of:
a. Governor of the State
b. Chief Justice of the concerned High Court
c. Chief Minister
d. Attorney General of India
114. A Designated Court is constituted through:
a. Circular
b. Notification
c. Ordinance only
d. Judicial decree
115. The Designated Court may be constituted for:
a. Specific area or areas
b. Specific case or cases
c. Matters specified in notification
d. All of the above
116. The Designated Court shall be presided over by a Judge not below the rank of:
a. Civil Judge
b. Metropolitan Magistrate
c. District and Sessions Judge or Additional District and Sessions Judge
d. Chief Judicial Magistrate
117. Under Section 8(2), jurisdiction in matters under the Act lies:
a. With all Civil Courts
b. Only with High Courts
c. Exclusively with the Designated Court
d. With consumer forums
118. No court other than the Designated Court shall have:
a. Revisional power
b. Administrative control
c. Jurisdiction in matters under the Act
d. Power to issue summons
119. The notification constituting Designated Courts is issued by:
a. High Court
b. Appropriate Government
c. Supreme Court
d. RBI
120. A Judge presiding over a Designated Court may be:
a. Additional District and Sessions Judge
b. Civil Judge (Junior Division)
c. Executive Magistrate
d. Revenue Officer
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