Unit study guide · NISM Series II-B
Banking Operations in Mutual Funds
12 questions in this unit
What this unit covers
- What does NEFT provide for mutual fund investors?
- What is RTGS mainly used for?
- What is the purpose of an investor's approved bank mandate for mutual fund operations?
- What does NACH typically support in systematic mutual fund investing?
- What does ASBA mean for an eligible mutual fund application?
- An RTA receives a purchase request but the collecting bank has returned the cheque unpaid. What is appropriate?
- Why is bank reconciliation important in a mutual fund subscription process?
- What is meant by realised or cleared funds for a mutual fund purchase?
- Why should an RTA check the destination account before processing a redemption payout?
- A bank reports a debit but the RTA lacks a matching application. Which action is appropriate?
- An investor sets up recurring payments but no valid mandate is recorded. What should happen?
- A redemption request has passed checks, but beneficiary bank details changed unexpectedly. What is the best control?
Key ideas
From the practice bank · 1
What does NEFT provide for mutual fund investors?
NEFT is an electronic system for transferring funds between bank accounts.
Hint Think about moving money between bank accounts.
II-B-116From the practice bank · 2
What is RTGS mainly used for?
RTGS processes eligible transfers individually on a real-time gross basis.
Hint Recall the settlement type named in the acronym.
II-B-117From the practice bank · 3
What is the purpose of an investor's approved bank mandate for mutual fund operations?
A bank mandate identifies authorised account instructions for relevant collections and payouts.
Hint Think about directing money to the correct account.
II-B-118From the practice bank · 4
What does NACH typically support in systematic mutual fund investing?
NACH supports automated bulk electronic payment collections and transfers using valid instructions.
Hint Think about regular electronic collections.
II-B-119From the practice bank · 5
What does ASBA mean for an eligible mutual fund application?
Under ASBA, the required application amount is blocked in the investor's account according to the facility rules.
Hint Think about earmarking money instead of transferring it immediately.
II-B-120From the practice bank · 6
An RTA receives a purchase request but the collecting bank has returned the cheque unpaid. What is appropriate?
A returned cheque means the expected collection has not been realised and must be reconciled.
Hint Distinguish money promised from money actually collected.
II-B-121From the practice bank · 7
Why is bank reconciliation important in a mutual fund subscription process?
Bank reconciliation identifies discrepancies between recorded subscriptions and cash movements.
Hint Follow the money through processing records.
II-B-122From the practice bank · 8
What is meant by realised or cleared funds for a mutual fund purchase?
Cleared funds are collected money available according to the relevant banking and scheme rules.
Hint Think about payment availability rather than intention.
II-B-123From the practice bank · 9
Why should an RTA check the destination account before processing a redemption payout?
Payout validation confirms the account is eligible and authorised before money is sent.
Hint Think about who should actually receive the money.
II-B-124From the practice bank · 10
A bank reports a debit but the RTA lacks a matching application. Which action is appropriate?
The RTA should trace unmatched collections to a valid application before allocating units or arranging corrections.
Hint Consider an unmatched-cash suspense workflow.
II-B-125From the practice bank · 11
An investor sets up recurring payments but no valid mandate is recorded. What should happen?
Recurring bank collections require a valid mandate and appropriate authentication.
Hint Think about payment consent.
II-B-126From the practice bank · 12
A redemption request has passed checks, but beneficiary bank details changed unexpectedly. What is the best control?
Unusual recent bank changes should be verified before releasing investor money.
Hint Look for a high-risk change close to payout.
II-B-127