COMPLIANCE ROUTE
CDCS EXAM-01
1. Which of the following can be combined under a credit available with and requiring a
draft drawn on an issuing bank?
1. Payment.
2. Deferred payment.
3. Acceptance.
4. Negotiation.
A. 1 and 2 only
B. 1 and 3 only.
C. 2 and 3 only.
D. 3 and 4 only.
2. A documentary credit calls for a draft at 95 days bill of lading date drawn on the
confirming bank. The documentary credit is available by:
A. refinance.
B. acceptance.
C. sight payment.
D. deferred payment.
3. On 03 January XXXX an irrevocable documentary credit for USD 500,000.00 is
confirmed. On 17 January XXXX the confirming bank receives an amendment cancelling
the documentary credit which it advises to the beneficiary. As at 18 January XXXX, what
is the liability of both banks?
A. Issuing and confirming bank USD 0.00
B. Issuing and confirming bank USD 500,000.00.
C. Issuing bank - USD 0.00 Confirming hank – USD500,00.00
D. Issuing bank - USD 500,000.00 Confirming bank -USD 0.00.
4. A documentary credit is issued for an amount of GBP 60,000.00 and calls for drafts to be
drawn 30 days from bill of lading date. Documents have been presented with a bill of
lading dated 09 November XXXX. Which of the following tenors on the draft will NOT
be acceptable?
A. 09 December XXXX.
B. 30 days from bill of lading date.
C. 30 days after 09 November XXXX
D. 30 days date, draft dated 09 November XXXX.
5. Which of the following statements regarding UCP600 is correct?
A. A non-bank can never issue a Letter of Credit.
B. A non-bank can issue a Letter of Credit but not under UCP rules.
C. A non-bank can issue a Letter of Credit under UCP rules.
D. A non-bank other than a natural person can issue a Letter of Credit under UCP
rules.
6. A credit is available with a nominated bank by negotiation. The beneficiary presents a
complying presentation to the nominated bank and requests for negotiation. The
nominated bank agrees to advance funds if and when funds are received from the issuing
bank. Does it constitute negotiation?
A. Yes
B. No
7. Citibank Mumbai issued a credit under UCP600 Rules. Which of the following
statements is (are) correct?
I. Citibank Kolkata can advise the credit.
II. Citibank Kolkata can confirm the credit.
III. Citibank Bangladesh can advise the credit.
IV. Citibank Bangladesh can confirm the credit.
A. All the options are correct
B. (Ill) and (IV)
C. (I), (III) and (IV)
D. None of the options is correct
8. A credit states 'shipment is to be made on or about 25.09.20XX'. What is the latest date of
Shipment under the credit?
A. 30.09.20XX
B. 01.10.20XX
C. 25.09.20XX
D. None of the above.
9. A credit calls drafts at 90 days from the date of shipment. What is the date of maturity of
a complying presentation under the credit if the shipment date is 31.07.20XX?
A. 30.07.20XX plus 90 days
B. 31.07.20XXplus90days
C. 31.07.20XX plus 89 days
D. None of the above.
10. A credit states 'Shipment is to be made before the end of September 20XX but after the
end of August 20XX'. What is the valid shipment period under the credit?
A. 21-Aug-20XX to 30-Sep-20XX
B. 01-Sep-20XX to 30-Scp-20XX
C. 01-Sep-20XX to 20-Scp-20XX
D. None of the above
11. A credit states 'Shipment is to be made from the second half of September 20XX till on
or about 20 October 20XX'. What is the valid shipment period under the credit?
A. 15-Sep-20XX to 25-Oct-20XX
B. 20-Sep-20XX to 25-Oct-20XX
C. 15-Sep-20XX to 20-Oct-20XX
D. None of the above.
12. A credit states ‘Shipment is to be made from the second half of September 20XX till on or
about 20 October 20XX’. What is the valid shipment period under the credit?
A. 15-Scp-20XX to 23-Oct-20XX
B. 20.Sep-20XXto 23-Oct-20XX
C. 16 Sep-20XX to 25-Oct-20XX
D. None of the above
13. A confirmed credit available by negotiation with any bank can be negotiated by:
A. Any bank.
B. Confirming bank only
C. Any bank except issuing bank
D. Any bank except issuing and confirming bank
14. An issuing bank is irrevocably obligated to honor as of the time:
A. The credit is issued.
B. The credit is advised.
C. Complying presentation is made to the nominated bank.
D. Complying presentation is made to the issuing bank.
15. Advising of a credit/an amendment signifies:
A. Genuineness of a credit/an amendment advised
B. Complete Authenticity and accurate reflection of the terms and condition of the
credit/amendment advised
C. Apparent Authenticity and accurate reflection of the terms and condition of the
credit/amendment advised
D. All of the above
16. Amendment/Cancellation of a credit requires agreement of the:
A. Applicant and Beneficiary.
B. Applicant, Issuing Bank and Confirming Bank (if any).
C. Applicant, Issuing Bank, confirming Bank (if any) and Beneficiary.
D. Issuing Bank, Confirming Bank (if any) and Beneficiary
17. A credit gets amended when:
A. The amendment is issued
B. The amendment is advising
C. The amendment is received by the beneficiary.
:
D. The amendment is accepts by the beneficiary.
18. An Amendment binds the issuing bank when:
A. The amendment is issued.
B.
C.
D.
The amendment is advisee
The amendment is received by the beneficiary.
The amendment is accepted by the beneficiary.
19. A Credit which was issued on 05-Jul-2012 includes the following terms and conditions:
Credit Value USD75,000.00, Partial Shipment: Allowed, Expiry: 15-Sep-2012, Later, the
issuing bank issued an amendment on 15-Jul-2012 which
includes: Decrease of Credit
amount USD25,000.00, Partial Shipment:
Prohibited. The beneficiary remained silent
regarding acceptance of the amendment. The issuing bank received a: presentation of
USD50,000.00 on 10-Sep-2012. The presentation reflects:
A. Acceptance of the amendment by the beneficiary
B. Rejection of the amendment by the beneficiary
C. Neither acceptance nor rejection
D. Partial acceptance
20. A presentation was made to the issuing bank on 13-Jan-2012 which was a Friday. Saturdays
and Sundays are regular days off (non-banking days) for the bank. The bank remained
closed on 18th January 2012 due to a national holiday. What is the latest date for
determining compliance of the documents for the issuing bank?
A. 22-Jan-2012
B. 23-Jan-2012
C. 24-Jan-2012
D. None of the above.
21. An Issuing bank receives a presentation on 08-Oct-2019 (Monday). On 10-Oct-2019, the
issuing bank determines that the presentation is complying. Which of the following
statements is correct? (Note that Saturdays and Sundays are non-banking days for the
issuing bank)
A. The issuing bank must honor the presentation immediately.
B. The issuing bank must honor the presentation on 10-Oct-2019.
C. The issuing bank must honor the presentation within 15-Oct-2019.
D. The issuing bank must start the process of honor on 10-Oct-2019
22. Which of the following parties, as per UCP600, may approach the applicant for waiver of
discrepancies?
i.
Issuing Bank
ii. Confirming Bank
iii. Nominated Bank
iv. Beneficiary
A. (i) only
B. (i) and (ii)
C. (i), (ii) and (iii)
D. All of the above mentioned parties
23.
Which of the following statements regarding UCP600 is (are) correct?
24.
25.
26.
27.
28.
29.
30.
I. UCP 600 rules are still applicable to a Standby Letter of Credit.
II. Express indication is required in a credit for applicability of UCP 600 rules.
III. UCP 600 is a set of voluntary rule of practice.
IV. Cases of fraud are covered in UCP 600.
A. (I) only
B. Both (I) and (II)
C. (I), (II) and (III)
D. (I), (II), (III) and (IV)
Which of the following statements is (are) correct?
A. UCP 600 rules are application to Standby Credits in full extent.
B. UCP 600 rules have limited usage to Standby Credits.
C. UCP 600 rules are not applicable to Standby Credits.
D. None of the above
A Credit was issued by XYZ Bank on July 16, 2007, fifteen days after introduction of UCP
600 rules. The credit neither indicates UCP600 nor any other rules to be applicable to the
credit. What is the applicable rule(s) to the credit?
A. UCP 600.
B. UCP 500.
C. Any of the above.
D. None of the above.
‘Irrevocability of a credit depends on express indication in the credit': the statement isA. True
B. False
A credit is a definite undertaking of a/anA. Confirming Bank
B. Issuer whether bank or other entity
C. Issuing Bank only
D. Applicant
The characteristics of a credit is/are I.
Irrevocability
II.
definite undertakings
III.
to pay the beneficiaries of the credit
A. None of the above
B. I & II only
C. II & III Only
D. All of the above
UCPDC 600 is the:
A. Sixth version
B. Seventh version
C. Fifth version
D. Eighth version
When Local Laws conflicts with UCP which of the following get superiority:
A. UCP as both of the party agreed
B. Both party nominated arbitrator decide whether UCP or Local Laws get priority
31.
C. Local Laws
D. UCP for exporting country & Local Laws for importing country.
The UCPDC600 apply to a credit, when
A. Express indication in the sales contract/Pl
B. Any SWIFF transmitted Credit automatically subject to UCP
C. definite Indication in the Credit only
D. None of the above
32.
An issuing bank can excludeA. Any UCP Article
B. Article I can't be excluded as article 1 state the applicability of UCP
C. Article I (Application), 19-25 (transport articles) & 28 (Insurance article) can’t be
excluded
D. No UCF article can be excluded
33.
A documentary credit can be issued for:
I. dealt with goods
II. dealt with performance
III. dealt with services
A. I & III only
B. I & II only
C. II & III only
D. All of the above
34.
Which of the following party is/are responsible for honour against complying presentation?
I.
Issuing Bank
II.
Negotiating bank
III.
Nominated Bank
IV. Confirming, Bank
A. I & II only
B. I & III Only
C. I & IV only
D. II & IV only
35.
UCPDC 600 came into effect from
A. 1st June 2006
B. 1st July 2006
C. 1st June 2007
D. 1st July 2007
36.
Case study I:
Issuing Bank: IB
Nominated Bank: NB
Confirming Bank: CB
Applicant: Buyer Ltd.
Beneficiary: Seller Ltd.
A sales contract signed between Buyer ltd and seller ltd in which the buyer committed to pay
against presentation of documents at applicant's bank. The IB issues a credit in favour of
Beneficiary under UCP 600. After due shipment the seller ltd. Present original shipping docs to
IB. As the price sharply fall in international market the buyer lid denied to make payment of IB.
Accordingly IB inform the beneficiary that they will unable to make payment as applicant denied
and as per sales contract only buyer is under obligation to pay.
Now, which of the following party(ies) are under obligation to make payment under UCP:
I.
Issuing Bank
II. Confirming Bank
III. Applicant
IV. Nominated bank
A. I Only
B. I & II only
C. I & III only
D. III Only
37.
Case Study 2:
Issuing Bank: IB
Nominated Bank: NB
Confirming Bank: CB
Applicant: Buyer Ltd.
Beneficiary: Seller Ltd.
A DC issued on 15th Jan XXXXX. Latest presentation dale: 20 FebXXXX. Docs required by
credit: 1. Commercial invoice 2. BL 3. Inspection certificate. The seller ltd presented docs on 10
Feb XXXX. Presented docs are: Commercial invoice and BL. The IB raises discrepancy due to
non-presentment of required document of Inspection certificate. On return SWIFT A1T 799 the
beneficiary claim payment with late payment interest and inform that they are not bound to
provide Inspection certificate as the doc have no coverage under UCP and the credit issued under
UCP. They are not bound by LSBP as there are no indications of applicability of ISBP in the
credit. Which of the following party(ies) in right position as per UCP:
A. IB
B. Seller ltd
C. Seller's bank
D. None of the above
38.A Bank in Singapore issued a LC favoring a beneficiary at Shenzhen in
china available with any bank in China and sent the same to Citi Bank
NA Shanghai for advising. Citi Bank NA Shanghai (1st Advising Bank),
upon receipt, forwarded the LC to China Construction Bank (2nd
Advising Bank) for final advising changing the availability of the credit
with itself (Citi Bank NA Shanghai). China Construction Bank advised
the credit to the beneficiary. Who would shoulder the responsibility for
changing the credit term?
A. The issuing bank
B. The first advising bank
C. The second advising Bank
D. Both the first and Second Advising Bank
39.All of the following statements are correct EXCEPT:
A. Same channel must be used for advising an amendment as the
original credit was advised.
B. A bank must not advise a credit/an amendment, apparent
authenticity of which is not clear to it.
C. Partial acceptance of an amendment is like rejection.
D. Silence of the beneficiary regarding an amendment does not
indicate acceptance of the amendment.
40.An Amendment binds the confirming bank when:
A. The amendment is issued.
B. The amendment is advised by the confirming bank
C. The amendment is received by the beneficiary.
D. The amendment is accepted by the beneficiary.
41.An Amendment binds the Beneficiary when:
A. The amendment is issued.
B. The amendment is advised.
C. The amendment is received by the beneficiary.
D. The amendment is accepted by the beneficiary.
42.Acceptance of an amendment by the Beneficiary can be
communicated by:
A. Notification vide advising bank.
B. Informing the applicant.
C. Presentation of documents.
D. Silence.
A. (a) only
B. Both (a) and (b)
C. Both (a) and (c)
(c) D. All of the above.
43.Which of the following constitute Honour from the part of the issuing bank
under a credit available with the issuing bank:
A. A Complying presentation is paid at sight when the credit is available by
sight payment.
B. A Deferred Payment Undertaking is issued against a complying
presentation when the credit is available by Deferred Payment.
C. Acceptance of the draft is issued against a complying presentation when
the credit is available by Acceptance.
D. All of the above
44.Negotiation with recourse means:
A. Negotiation in due course
B. Right of a nominated bank to refuse a negotiation request.
C. Right of a negotiating bank to claim refund of negotiated amount from
the beneficiary.
D. Right of a negotiating bank to claim reimbursement of negotiated amount
from the issuing bank.
45.A credit issued by ABC Bank is available with XYZ Bank by acceptance of
beneficiary’s draft at 60 days sight. The beneficiary wishes to avail the credit
from the nominated bank, XYZ Bank, which has agreed to act on its nomination
and has communicated the same to the beneficiary. The draft prepared by the
beneficiary to be drawn on:
A. The issuing bank
B. The nominated bank
C. The applicant
D. Either of the issuing bank or nominated bank
46.A credit issued by ABC Bank is available with XYZ Bank by acceptance of
beneficiary’s draft at 120 days sight. The draft prepared by the beneficiary has
been drawn on the issuing bank. Which of the following statements is correct
given the documents have been presented to the nominated bank?
A. The nominated bank can accept the draft
B. The nominated bank cannot accept the draft
C. It is the discretion of the nominated bank to accept the draft or not
D. None of the above statements is correct
47.A confirming bank of an usance credit after receiving a discrepant document
from the beneficiary forwards, at beneficiary’s request, to the issuing bank. The
issuing bank, despite discrepancies, accepts the documents and communicates
maturity to the confirming bank. Which of the following statements is correct?
A. The confirming bank must negotiate now
B. The confirming bank cannot re-establish its confirmation without
authorization from the issuing bank.
C. The confirming bank can re-establish its confirmation without
authorization from the issuing bank.
D. None of the above.
48.A sight documentary credit nominates a bank to pay the beneficiary. Upon
receipt of complying documents directly from beneficiary, the issuing bank
should
A. Return the documents to the beneficiary for presentation to the nominated
bank
B. Forward the documents to the nominated banks for its processing of the
documents
C. Pay the nominated bank
D. Pay the beneficiary
49.Which of the following banks, as per UCP600, MAY have an undertaking to
negotiate a complying presentation?
I.
II.
III.
IV.
Issuing Bank
Confirming Bank
Nominated Bank
Reimbursing Bank
A. (I) and (II)
B. (II) and (III)
C. (III) and (IV)
D. (I) and (IV)
50.By issuing a credit available with a nominated bank, an issuing bank actually
issues:
A. No undertaking
B. A single undertaking.
C. Two separate undertakings.
D. Three separate undertakings.
51.A beneficiary requests the confirming bank to purchase complying documents
presented under a deferred payment credit. In accordance with UCP 600, which
of the following actions could the confirming bank take?
I. Obtain issuing bank’s agreement prior to purchase the documents
II. Refuse the beneficiary’s request and issue a deferred payment
undertaking
III. Prepay the deferred payment undertaking
IV. Obtain a recourse agreement from the beneficiary for purchasing the
documents
A. (I) only
B. (II) and (III)
C. (III) and (IV)
D. (IV) only
52. A confirmed credit available by negotiation with any bank can be
negotiated by:
A. Any bank.
B. Confirming bank only
C. Any bank except issuing bank
D. Any bank except issuing and confirming bank
Answer: C
53. Which of the following statements is correct?
A. A credit can be available by a draft drawn on the applicant.
B. A credit may require a draft drawn on the applicant.
C. A bank can negotiate a draft drawn on it.
D. None of the above statements is correct.
Answer: B
54. A credit issued by ABC Bank is available with XYZ Bank by acceptance
of beneficiary’s draft at 60 days sight. The beneficiary wishes to avail the
credit from the nominated bank, XYZ Bank, which has agreed to act on its
nomination and has communicated the same to the beneficiary. The draft
prepared by the beneficiary to be drawn on:
A. The issuing bank
B. The nominated bank
C. The applicant
D. Either of the issuing bank or nominated bank
Answer: B
55.A credit issued by ABC Bank is available with XYZ Bank by acceptance
of beneficiary’s draft at 120 days sight. The draft prepared by the
beneficiary has been drawn on the issuing bank. Which of the following
statements is correct given the documents have been presented to the
nominated bank?
a. The nominated bank can accept the draft
b. The nominated bank cannot accept the draft
c. It is the discretion of the nominated bank to accept the draft or not
d. None of the above statements is correct
56.A credit available with the issuing bank calls for a draft at 90 days sight.
The credit is available byA. Sight Payment
B. Deferred Payment
C. Acceptance
D. Negotiation
57.Which of the following payment terms are possible under a credit
available with, and requiring a draft drawn on, an issuing bank?
i. Sight Payment
ii. Deferred Payment
iii. Acceptance
iv. Negotiation
A. (I) and (II)
B. (II) and (III)
C. (I) and (III)
D. (III) and (IV)
58.A seller in Country ‘A’ wishes to receive payment from a buyer in
country ‘B’ as soon as possible. The credit should be available ____
A. By sight payment with the issuing bank in Country ‘B’
B. By negotiation with a nominated bank in Country ‘A’
C. By sight payment with a nominated bank in Country ‘A’
D. By acceptance with the issuing bank in Country ‘B’
59.A credit available with a confirming bank calls for a draft at 90 days sight
drawn on the confirming bank. The credit is available byii. Sight Payment
iii. Deferred Payment
iv.
v.
Acceptance
Negotiation
A. (II) or (III)
B. (III) or (IV)
C. (III) only
D. All of the options are possible except (I)
60.A credit calls for a draft at 90 days sight drawn on the issuing bank. The
credit can be available byI. Payment
II. Deferred Payment
III. Acceptance
IV. Negotiation
A. (II) and (III)
B. (III) and (IV)
C. (III) only
D. All of the options are possible except (I)
61.A credit available with the issuing bank by sight payment had an expiry
date of 20-Jan-XX. A presentation was made under the credit to the
issuing bank on 25-Jan-XX. Which of the following statements is (are)
correct?
A. The issuing bank has no obligation either to check the documents or to
honor
B. The issuing bank has no obligation to check the documents but must send
an advice of refusal quoting ‘credit expired’ as per UCP if it wishes to
avoid payment obligation
C. The issuing bank has obligation to check the documents and to quote all
the discrepancies found if it wishes to avoid payment obligation
D. The issuing bank has obligation to check the documents and to seek
applicant’s wavier of the found discrepancies.
62. Complying Presentation means a presentation that comply with:
a. The terms and conditions of the credit.
b. The terms and conditions of the credit as well as the applicable
UCP600 rules.
c. The terms and conditions of the credit, applicable UCP600 rules and
ISBP745.
d. The terms and conditions of the credit, applicable UCP600 rules and
International Standard Banking Practice.
63. A credit states in Documents Required Field: ‘Certificate of Origin to be
issued by a competent party’. The Certificate of Origin can be issued by
the following parties to comply EXCEPT:
a. Chamber of Commerce
b. Ministry of Commerce
c. Beneficiary
d. Export Control Board
64. A credit issued in favor of beneficiary in Country ‘X’ requires a
‘Certificate of Origin to be issued by local Chamber of Commerce’. The
product is of country ‘Y’ origin. Which of the following parties can issue
the certificate of origin?
a. Chamber of Commerce of country ‘X’ only
b. Chamber of Commerce of country ‘Y’ only
c. Either Chamber of Commerce of country ‘X’ or ‘Y’
d. Any chamber of commerce
65. A credit states ‘shipment is to be made on or about 25.09.2020’. What is
the latest date of Shipment under the credit?
a. 30.09.2020
b. 01.10.2020
c. 25.09.2020
d. None of the above.
66. A credit states ‘shipment is to be made on or about 25.09.2020’. What is
the earliest date of Shipment under the credit?
a. 25.09.2020
b. 21.09.2020
c. 20.09.2020
d. None of the above.
67. A credit was available with a nominated bank by negotiation. Which of
the followings constituted negotiation?
I. The nominated bank received a complying presentation and agreed to
advance funds if and when funds are received from the issuing bank.
II. The nominated bank received a complying presentation and advanced
fund instantly.
III. The nominated bank received a presentation and found the same
discrepant, obtained issuing bank’s approval to the discrepancies and
advanced funds to the beneficiary.
IV.
The nominated bank advanced fund to the beneficiary after
receiving acceptance of drafts from the issuing bank.
a. All
B. (II) only
C. (II) and (IV)
D. All except (I)
68. Which of the following parties can be an applicant of a credit?
I. A customer of the issuing bank.
II. A customer of a correspondent bank
III. A subsidiary of a bank’s customer
IV.
Issuing bank itself.
A. All
B. (I) only
C. (III)
D. All except (IV)
69. UCP can be applied to all of the following transactions EXCEPT
A. Letter of Credit
B. Standbys
C. Guarantees
D. Cash against documents
70. Which of the following statements is (are) correct?
A. Modification to an UCP600 rule requires an issuing bank to specifically state
the article number that has been modified.
B. Exclusion of an UCP600 rule requires an issuing bank to specifically state
the article number that has been excluded.
C. Both (A) and (B)
D. None of the above