Escrow Account – Multiple Choice Questions


Escrow Account – Multiple Choice Questions

1. What is the primary purpose of an Escrow Account?

A. Salary payment
B. Equipment purchase
C. Funding Mine Closure activities ✅
D. Coal transportation

Answer: C

2. The Escrow Account is opened in:

A. Reserve Bank of India
B. Any Cooperative Bank
C. A Scheduled Bank ✅
D. State Treasury

Answer: C

3. The Escrow Account is opened in consultation with:

A. DGMS
B. Coal Controller Organization (CCO) ✅
C. CPCB
D. IBM

Answer: B

4. Who is the exclusive beneficiary of the Escrow Account?

A. State Government
B. Mine Owner
C. Coal Controller Organization (on behalf of Central Government) ✅
D. District Collector

Answer: C

5. The Escrow Account should be opened:

A. After mine closure
B. Before commencement of mining activities ✅
C. After production starts
D. After obtaining EC

Answer: B

6. What is the base Escrow rate for Opencast Mines?

A. ₹10 lakh/ha
B. ₹12 lakh/ha
C. ₹14 lakh/ha ✅
D. ₹15 lakh/ha

Answer: C

7. What is the base Escrow rate for Underground Mines?

A. ₹1 lakh/ha
B. ₹2 lakh/ha ✅
C. ₹5 lakh/ha
D. ₹10 lakh/ha

Answer: B

8. The base Escrow rates are applicable from:

A. January 2025
B. May 2024 ✅
C. April 2025
D. January 2024

Answer: B

9. Escrow rates are linked to:

A. Consumer Price Index
B. Wholesale Price Index (WPI) ✅
C. Inflation only
D. Coal Price Index

Answer: B

10. Escrow rates may be revised by the Ministry of Coal every:

A. 2 years
B. 3 years
C. 5 years ✅
D. 10 years

Answer: C

11. Annual Escrow amount is calculated based on:

A. Production only
B. Total Project Area and Balance Production Life ✅
C. Number of employees
D. Coal grade

Answer: B

12. Escrow deposits are compounded annually at:

A. 3%
B. 4%
C. 5% ✅
D. 10%

Answer: C

13. Annual Escrow deposits should normally be made by:

A. 31 March
B. 30 June
C. 30 September ✅
D. 31 December

Answer: C

14. Delay in Escrow deposit attracts interest of:

A. 0.5% per month
B. 1% per month ✅
C. 5% per annum
D. 2% per month

Answer: B

15. Existing operating mines must revise their Escrow Agreement within:

A. 6 months
B. 1 year ✅
C. 2 years
D. 5 years

Answer: B

16. Failure to revise the Escrow Agreement may lead to:

A. No consequence
B. Withdrawal of Mine Opening Permission ✅
C. Cancellation of EC
D. Cancellation of Lease

Answer: B

17. The revised Escrow rates become effective from:

A. 1 January 2025
B. 1 April 2025 ✅
C. 1 July 2025
D. 31 January 2025

Answer: B

18. Up to what percentage of the previous year's deposited Escrow amount (excluding interest) can be reimbursed annually?

A. 25%
B. 50% ✅
C. 75%
D. 100%

Answer: B

19. Annual reimbursement is based on:

A. Auditor certification
B. Self-certification
C. Drone/Satellite evidence (for OC mines)
D. All of the above ✅

Answer: D

20. The annual reimbursement claim should be submitted by:

A. 31 March
B. 30 June
C. 30 September ✅
D. 31 December

Answer: C

21. Coal Controller should normally release eligible reimbursement by:

A. 31 October
B. 31 December ✅
C. 31 March
D. 30 June

Answer: B

22. During every five-year progressive closure period, up to how much of the remaining Escrow amount (including interest) may be released?

A. 25%
B. 50% ✅
C. 75%
D. 100%

Answer: B

23. At least what percentage of the five-year Escrow amount must be used for community development and livelihood activities?

A. 10%
B. 20%
C. 25% ✅
D. 50%

Answer: C

24. After the post-closure monitoring period, what percentage of the remaining Escrow balance can be released?

A. 50%
B. 75%
C. 90% ✅
D. 100%

Answer: C

25. The remaining 10% balance is retained mainly for:

A. Mine expansion
B. Just Transformation Fund ✅
C. Machinery purchase
D. Coal exploration

Answer: B

26. The Just Transformation Fund supports:

A. Blasting operations
B. Skill development and sustainable livelihoods ✅
C. Coal transportation
D. Railway siding

Answer: B

27. If the mine owner fails to complete mine closure activities, the Escrow fund serves as:

A. Employee bonus
B. Financial security for completing mine closure ✅
C. Tax refund
D. Production incentive

Answer: B

28. If the Escrow fund is insufficient, who must provide the additional money?

A. State Government
B. Coal India Limited
C. Mine Owner/Project Proponent ✅
D. District Administration

Answer: C

29. Deviation from the approved Mine Closure Plan may attract a penalty up to:

A. 5%
B. 10%
C. 20% of the annual Escrow amount ✅
D. 50%

Answer: C

30. Which Chapter of the Guidelines deals primarily with Escrow Account provisions?

A. Chapter I
B. Chapter II
C. Chapter III ✅
D. Chapter V

Answer: C


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