JAIIB · AFM · Chapter 10

Back Office Functions / Handling Unreconciled Entries in Banks

Chapter notes, video classes, MCQ practice tests and quick-revision one-liners for Accounting and Financial Management for Bankers — JAIIB.

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Q

Define back office in banking.

A

Administration and support personnel performing processing, settlement, recording and verification without direct customer interaction.

Q

What is the primary source of truth for all rupees passing through a branch?

A

General Ledger (GL), maintained by the back office.

Q

Name five major back-office functions.

A

Book-keeping, deposits processing, loans processing, regulatory compliance, e-banking operations.

Q

What is the current CRR rate as of February 2025?

A

4.00% of NDTL (reduced from 4.50% in December 2024).

Q

Define reconciliation in banking context.

A

Matching entries in bank's books with corresponding entries in another party's books to isolate and clear differences.

Q

What are the three perspectives of the same foreign currency account?

A

NOSTRO (our account abroad), VOSTRO (foreign bank's deposit), LORO (another bank's reference).

Q

State the fundamental rule of intra-branch reconciliation.

A

GL Control A/c balance must equal sum of all subsidiary ledger balances daily.

Q

What is an Inter-Office Account (IOA)?

A

Accounting bridge recording transactions between branches and Head Office within the bank.

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