ADVANCED MCQs ON ESCROW ACCOUNT
ADVANCED MCQs ON ESCROW ACCOUNT
1.
The Escrow amount is calculated based on:
A. Lease Area
B. Excavation Area
C. Total Project Area ✅
D. Forest Area
Answer: C
2.
The annual Escrow deposit is determined by dividing the total closure cost by:
A. Balance mine life
B. Balance production life of the mine ✅
C. Lease period
D. Remaining extractable reserve
Answer: B
3.
The revised Escrow rates prescribed in the Guidelines are indexed with:
A. CPI
B. GDP Deflator
C. WPI declared by Government of India ✅
D. Inflation Rate
Answer: C
4.
The base WPI for Escrow escalation is:
A. January 2025
B. April 2024
C. May 2024 ✅
D. April 2025
Answer: C
5.
The Escrow amount deposited every year is compounded at:
A. Simple interest @5%
B. Compound interest @5% annually ✅
C. WPI rate only
D. RBI Repo Rate
Answer: B
6.
Which authority updates the WPI while opening the Escrow Account?
A. DGMS
B. Coal Controller ✅
C. Ministry of Coal
D. CMPDI
Answer: B
7.
Financial Assurance becomes effective:
A. After EC
B. After FC
C. Before Mine Opening Permission ✅
D. After commencement of production
Answer: C
8.
The mine owner may choose:
A. Any Nationalized Bank
B. Any Scheduled Bank ✅
C. RBI only
D. CIL Bank
Answer: B
9.
Failure to deposit annual Escrow amount may result in:
A. Suspension of production
B. Withdrawal of Mine Opening Permission ✅
C. EC cancellation
D. Lease cancellation automatically
Answer: B
10.
The revised Escrow provisions became effective from:
A. 31 Jan 2025
B. 1 April 2025 ✅
C. 30 Sept 2025
D. 1 Jan 2026
Answer: B
Reimbursement
11.
Maximum annual reimbursement excluding accrued interest is:
A. 25%
B. 40%
C. 50% ✅
D. 75%
12.
Annual reimbursement is limited to:
A. Actual expenditure or 50% deposited amount, whichever is less ✅
B. Actual expenditure only
C. Entire expenditure
D. 75%
13.
Annual reimbursement claim must include:
A. Auditor Certificate
B. Self-certification
C. Drone/Satellite evidence
D. All of the above ✅
14.
For Opencast mines, reimbursement requires:
A. Google Earth Image
B. Drone or Georeferenced Orthorectified Multispectral Satellite Image ✅
C. DGPS Survey
D. Mine Plan
15.
Annual reimbursement claims shall be submitted before:
A. 31 July
B. 30 September ✅
C. 31 December
D. 31 March
16.
Coal Controller shall release reimbursement normally by:
A. 30 Sept
B. 31 Oct
C. 31 Dec ✅
D. 31 March
17.
Five-year reimbursement includes:
A. Interest also ✅
B. Principal only
C. WPI adjustment only
D. None
18.
In the year when 5-year reimbursement is claimed:
A. Annual reimbursement also allowed
B. Annual reimbursement not allowed ✅
C. Double reimbursement allowed
D. Interest forfeited
19.
The balance Escrow amount is released after:
A. Progressive Closure
B. Final Mine Closure compliance ✅
C. Production completion
D. Mine abandonment
20.
Final reimbursement requires certification by:
A. DGMS
B. Coal Controller ✅
C. SPCB
D. IBM
Community Development
21.
Minimum amount earmarked for Community Development is:
A. 10%
B. 15%
C. 25% ✅
D. 40%
22.
Community Development expenditure forms part of:
A. Progressive Closure activities ✅
B. Production Cost
C. Capital Cost
D. CSR only
23.
Claim under one Community Development activity cannot exceed:
A. 25%
B. One-third of earmarked five-year amount ✅
C. 50%
D. Entire amount
24.
Community Development primarily includes:
A. Livelihood
B. Skill Development
C. Rehabilitation
D. All of these ✅
25.
The indicative list of Community Development activities is provided in:
A. Appendix VII
B. Appendix VIII
C. Appendix IX ✅
D. Appendix X
Just Transformation
26.
Balance retained after 90% reimbursement is meant for:
A. Mine reopening
B. Just Transformation Fund ✅
C. New machinery
D. Royalty payment
27.
The Just Transformation Fund equals:
A. 5%
B. 10% of balance Escrow amount ✅
C. 20%
D. 25%
28.
The Just Transformation Plan shall be prepared:
A. Before reimbursement of final 90% ✅
B. Before EC
C. Before FC
D. Before production
29.
The Just Transformation Plan shall be implemented through:
A. District Administration only
B. Project Proponent through an implementing agency ✅
C. SPCB
D. DGMS
30.
Major objective of Just Transformation is:
A. Improve production
B. Livelihood generation after mine closure ✅
C. Increase coal reserve
D. Reduce stripping ratio
Compliance
31.
Escrow calculation shall be revised:
A. Every year
B. Every five-year compliance period ✅
C. Every month
D. Never
32.
Five-year Compliance Report shall include:
A. Revised Escrow calculation
B. Revised balance life
C. Closure activities
D. All of these ✅
33.
Existing Escrow Agreements are required to be revised within:
A. Six months
B. One year ✅
C. Two years
D. Five years
34.
Failure to revise Escrow Agreement may attract:
A. Interest only
B. Withdrawal of Mine Opening Permission or penalty ✅
C. Lease cancellation immediately
D. EC suspension
35.
Penalty for non-deposit of annual Escrow amount is:
A. 2% per month
B. 1% per month ✅
C. 5% annually
D. No penalty
Final Closure
36.
Final Mine Closure Plan should be submitted:
A. At mine opening
B. Five years before intended final closure ✅
C. After mine closure
D. Two years before closure
37.
Final Closure is considered complete after:
A. Production stops
B. Third-party audit accepted by Coal Controller ✅
C. DGMS inspection
D. EC expires
38.
Post-mining closure period is:
A. Two years
B. Three years ✅
C. Five years
D. Seven years
39.
Post-closure monitoring period is:
A. One year
B. Two years ✅
C. Three years
D. Five years
40.
Combined duration of closure and monitoring shall not exceed:
A. Five years
B. Six years
C. Seven years ✅
D. Eight years
Analytical Questions
41.
Interest accrued in Escrow Account is:
A. Ignored
B. Included in five-year reimbursement calculation ✅
C. Paid annually
D. Forfeited
42.
Financial Assurance is primarily intended to:
A. Increase mine profit
B. Ensure completion of mine closure even if the owner defaults ✅
C. Pay taxes
D. Finance production
43.
Which of the following is NOT considered while calculating annual Escrow deposit?
A. Total Project Area
B. Balance Production Life
C. Escalated Rate
D. Annual Coal Production ✅
44.
If closure funds become insufficient, who bears additional liability?
A. Ministry of Coal
B. State Government
C. Mine Owner/Project Proponent ✅
D. Coal Controller
45.
Deviation from approved Mine Closure activities may attract penalty up to:
A. 10%
B. 15%
C. 20% of annual Escrow deposit ✅
D. 25%
46.
The Coal Controller may forfeit the Escrow amount when:
A. Production decreases
B. Approved closure measures are not carried out after due notice ✅
C. Mine reserve reduces
D. DGMS recommends
47.
The primary financial objective of the Escrow mechanism is:
A. Revenue generation
B. Financial security for scientific mine closure ✅
C. Employee welfare
D. Equipment modernization
48.
Reimbursement under the Escrow mechanism is processed through:
A. State Government
B. Dedicated Portal (or existing system until portal operational) ✅
C. DGMS Portal
D. CIL ERP
49.
For fly ash dumping in separable abandoned mine voids, the Escrow amount retained is mainly for:
A. Machinery replacement
B. Topsoil management, biological reclamation, safety and environmental monitoring ✅
C. Production enhancement
D. Railway siding
50.
Which statement regarding Escrow Account is correct?
A. It is a one-time deposit.
B. It is linked only with annual production.
C. It provides financial assurance throughout the life of the mine and closure period. ✅
D. It is closed immediately after coal production stops.
Answer: C
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