Showing posts with label BNK601 Mid Term Papers. Show all posts
Showing posts with label BNK601 Mid Term Papers. Show all posts

13.10.26

BNK601 Mid Term Papers

This post collects BNK601 (Banking Laws & Practices) midterm solved MCQs from several files in one place. It has 98 MCQs (duplicates removed); tap Show answer to check yourself.

MCQs

Q1. According to the Section 4 of State Bank of Pakistan Act, 1956, which of the following is the face value of the share of a Bank?

  1. Rs. 10
  2. Rs. 20
  3. Rs. 50
  4. Rs. 100
Show answer

Answer: (d) Rs. 100

Q2. According to Section 4 of State Bank of Pakistan Act, 1956, which of the following should be the original Capital of the Bank?

  1. Rs. 20 Millions
  2. Rs. 30 Millions
  3. Rs. 40 Millions
  4. Rs. 50 Millions
Show answer

Answer: (b) Rs. 30 Millions

Q3. Under section 10 (Penalty) of the co-operative societies and co-operative banks (repayment of loans) ordinance, 1966, if a person whoever contravenes any of the provisions of his ordinance or the rules made shall be punishable with imprisonment of which of the following?

  1. Term which may extend to five years
  2. Term which may extend to six years
  3. Term which may extend to seven years
  4. Term which may extend to eight years
Show answer

Answer: (c) Term which may extend to seven years

Q4. Which of the following has defined the banker as "Any person carrying on a bonafide banking business in the United Kingdom is a banker"?

  1. American version
  2. United Kingdom's version
  3. Finance Act, 1915
  4. Negotiable instruments Act, 1881
Show answer

Answer: (c) Finance Act, 1915

Q5. Which of the following is also called the Legal Mortgage?

  1. Equitable Mortgage
  2. Registered Mortgage
  3. Un-registered Mortgage
  4. Non-equitable Mortgage
Show answer

Answer: (b) Registered Mortgage

Q6. All of the following are included in the financial intermediaries, EXCEPT:

  1. Mutual Funds
  2. Pension Funds
  3. Stock Exchange
  4. Credit Union
Show answer

Answer: (c) Stock Exchange

Q7. According to Section 23 of Banking Companies Ordinance, 1962, a subsidiary to banking company can perform which of the following function(s)?

  1. To carry on of banking business strictly in conformity with Islam
  2. To carry on business of modaraba
  3. Such other purposes as are incidental to the business of banking
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q8. All of the following are contents of the Memorandum of unlimited company, under Banking Companies Ordinance, 1962, EXCEPT:

  1. Name of the company
  2. Objects
  3. Limited liability of shareholders
  4. Authorized capital
Show answer

Answer: (c) Limited liability of shareholders

Q9. Which of the following condition(s) makes the purpose of the trust unlawful?

  1. If it is forbidden by law
  2. If it is fraudulent
  3. If it involves or implies injury to the person or property of another
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q10. According to the State Bank of Pakistan Act, 1956, "Member" refers to which of the following?

  1. Member of the Local Board
  2. Member of the Committee
  3. Member of the Legislature
  4. Member of the Bank
Show answer

Answer: (a) Member of the Local Board

Q11. All of the following are merits of Nationalization of banks, EXCEPT:

  1. Availability of funds to the government for meeting its social sector targets
  2. Equitable distribution of credit to the different sectors, industries and regions
  3. Centrally coordinated policy frame work
  4. Excessive government control leading to the decisions on non professional considerations
Show answer

Answer: (d) Excessive government control leading to the decisions on non professional considerations

Q12. Banking, not in the present from but in its elementary stages was traced as old as:

  1. 1000 B.C
  2. 2000 B.C
  3. 3000 B.C
  4. 4000 B.C
Show answer

Answer: (b) 2000 B.C

Q13. Which of the following is/are the requirement(s) to become a customer?

  1. Customer should be of the age of majority
  2. Customer should be of sound mind
  3. Customer should not be debarred under any law
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q14. Which of the following condition(s) may lead to cancellation of license of a banking company?

  1. If the company ceases to carry on banking business in Pakistan
  2. If the company at any time fails to comply with any of the conditions imposed upon it under sub-section (1)
  3. If at any time, any of the conditions referred to in sub-section (3) ceases o be fulfilled
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q15. Which of the following is NOT the primary purpose of Mortgage?

  1. Securing the payment of money advanced or to be advanced by way of loan
  2. Securing the payment for future lending
  3. Securing the payment for an existing debt or future debt
  4. Securing the payment for performance of an engagement which may give rise to pecuniary liability
Show answer

Answer: (b) Securing the payment for future lending
Note: One solved file marks (a), but (a) is the primary purpose of a mortgage.

Q16. Which of the following refers to "a person employed to do any act for another person or to represent another person in dealing with third person"?

  1. Employee
  2. Agent
  3. Representative
  4. Shareholder
Show answer

Answer: (b) Agent

Q17. According to Section 17 of Banking Companies Ordinance, 1962, the banking company cannot create charge on which of the following?

  1. Paid up capital
  2. Issued capital
  3. Unpaid capital
  4. Subscribed capital
Show answer

Answer: (c) Unpaid capital

Q18. Which of the following refers to "rules that regulate the conduct of individuals, businesses, and other organizations within society"?

  1. Jurisprudence
  2. Law
  3. Legal system
  4. Legal opinion
Show answer

Answer: (b) Law

Q19. As per Banking Companies Ordinance, 1962, the total suspension time of the operation of all or any provision of Companies ordinance, 1962 should not exceed:

  1. Three months
  2. Six months
  3. Nine months
  4. One year
Show answer

Answer: (d) One year

Q20. According to the section 30 of Banking Companies Ordinance, 1962, at the close of business on any day, the assets in Pakistan of every banking company shall not be less in value than such percentage of its time and demand liabilities in Pakistan as may be prescribed by the State Bank from time to time provided that the percentage so prescribed shall not exceed:

  1. 65% of time and demand liabilities
  2. 75% of time and demand liabilities
  3. 85% of time and demand liabilities
  4. 95% of time and demand liabilities
Show answer

Answer: (c) 85% of time and demand liabilities

Q21. How many foreign banks were there in Pakistan, at the time of independence?

  1. 09 banks
  2. 19 banks
  3. 29 banks
  4. 39 banks
Show answer

Answer: (b) 19 banks

Q22. According to Section 16 of Banking Companies Ordinance, 1962, which of the following is the MAXIMUM commission, brokerage, discount or remuneration paid by banking company on issue of share capital?

  1. 2% of the paid up value of the issued shares
  2. 2.5% of the paid up value of the issued shares
  3. 3% of the paid up value of the issued shares
  4. 3.5% of the paid up value of the issued shares
Show answer

Answer: (b) 2.5% of the paid up value of the issued shares

Q23. Which of the following refers to "a financial market in which new issues of a security such as bonds or stocks are sold to initial buyers"?

  1. Equity Market
  2. Over the Counter Market (OTC)
  3. Primary Market
  4. Secondary Market
Show answer

Answer: (c) Primary Market

Q24. Subscribed Capital is part of which of the following?

  1. Paid up capital
  2. Issued capital
  3. Un-issued capital
  4. Retained capital/equity
Show answer

Answer: (a) Paid up capital

Q25. All of the following are the components of Part IV (Special Provisions for Speedy Disposal of Winding up Proceedings) of Banking Companies Ordinance, 1962, EXCEPT:

  1. Transfer of pending proceedings
  2. Settlement of list of debtors
  3. Special provisions to make calls on contributories
  4. Preferential payments to depositors
Show answer

Answer: (d) Preferential payments to depositors

Q26. Which of the following parties are engaged in a letter of credit?

  1. Advising banks
  2. Confirming banks
  3. Negotiating banks
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q27. Which of the following is termed as "science of civil law"?

  1. Jurisprudence
  2. Business Law
  3. Legal system
  4. Legal opinion
Show answer

Answer: (a) Jurisprudence

Q28. Which of the following is NOT the category of the Share Capital?

  1. Authorized capital
  2. Un-issued capital
  3. Issued capital
  4. Retained capital/equity
Show answer

Answer: (d) Retained capital/equity
Note: Retained capital/equity is not a category of share capital.

Q29. Which of the following is the MINIMUM capital requirement for banks/Direct Financial Institutions as set out by the State Bank of Pakistan by 31/12/2009?

  1. Rs 3 billion
  2. Rs 4 billion
  3. Rs 5 billion
  4. Rs 6 billion
Show answer

Answer: (d) Rs 6 billion

Q30. In 14th century, Banking in structured form started in which of the following countries?

  1. U.S.A
  2. England
  3. France
  4. Germany
Show answer

Answer: (b) England

Q31. Which of the following statements holds TRUE for law?

  1. It is to redress wrongs
  2. It ensures public order
  3. It is to maintain rights
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q32. Which of the following refers to "U.S. dollars deposited in foreign branches of U.S. banks or in foreign banks outside the United States"?

  1. Bills of Exchange
  2. Bankers' Acceptances
  3. Repurchase Agreements
  4. Eurodollars
Show answer

Answer: (d) Eurodollars

Q33. A banking company can engage itself in which of the following businesses under section 7 of Banking Companies Ordinance, 1962?

  1. Borrowing, raising, or taking up of money
  2. The lending or advancing of money either upon or without security
  3. The granting and issuing of letters of credit
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q34. In which of the following financial markets, buyers and/sellers agree to trade certain quantity of commodity for a specific price at a specified date in future?

  1. Equity Market
  2. Over the Counter Market (OTC)
  3. Future Market
  4. Secondary Market
Show answer

Answer: (c) Future Market

Q35. Which of the following is NOT the regulation of paid-up capital, subscribed capital and authorized capital and voting rights of share-holders under section 14 of Banking Companies Ordinance, 1962?

  1. The subscribed capital of the company is not less than one half of the authorized capital
  2. The capital of the company consists of ordinary shares only
  3. Paid-up capital should be less than one half of the subscribed capital
  4. The voting rights of any one shareholder, except those of the Federal Government or a Provincial Government do not exceed five per cent of the total voting rights of all the shareholders
Show answer

Answer: (c) Paid-up capital should be less than one half of the subscribed capital

Q36. Which of the following countries adopted the model for the redressal of public grievances against agencies of state after Sweden?

  1. Finland
  2. Denmark
  3. New Zealand
  4. France
Show answer

Answer: (a) Finland

Q37. In which of the following years, European Union established the first European Ombudsman?

  1. 1985
  2. 1986
  3. 1995
  4. 1996
Show answer

Answer: (c) 1995

Q38. At the time of independence, how many branches of scheduled banks were there in Pakistan?

  1. 457 branches
  2. 467 branches
  3. 487 branches
  4. 497 branches
Show answer

Answer: (c) 487 branches

Q39. Which of the following refers to "a bank for the time being included in the list of banks maintained under sub-section (1) of Section 37; under Banking Companies Ordinance, 1962"?

  1. Scheduled Bank
  2. Commercial Bank
  3. Investment Bank
  4. Financial Intermediary
Show answer

Answer: (a) Scheduled Bank

Q40. In which of the following years, "Wafaqi Mohtasib" was established?

  1. 1983
  2. 1995
  3. 2000
  4. 2005
Show answer

Answer: (a) 1983

Q41. Which of the following terms is used under the Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance, 1966 for a loan which is not secured by mortgage, pledge, hypothecation or assignment of such property of the borrower, as in the case of a loan not exceeding five hundred thousand rupees?

  1. Unsecured Loan
  2. Secured Loan
  3. Insufficiently Secured
  4. Insufficiently Unsecured
Show answer

Answer: (a) Unsecured Loan

Q42. In which of the following years, an ombudsman was first established?

  1. 1806
  2. 1809
  3. 1919
  4. 1929
Show answer

Answer: (b) 1809

Q43. Relationship between Principal and Agent is known as which of the following?

  1. Business relationship
  2. Formal relationship
  3. Agency relationship
  4. Personal relationship
Show answer

Answer: (c) Agency relationship

Q44. Which of the following studies is the evolution of law over a period of time?

  1. Analytical Jurisprudence
  2. Historical Jurisprudence
  3. Ethical Jurisprudence
  4. Behavioral Jurisprudence
Show answer

Answer: (b) Historical Jurisprudence

Q45. Which of the following factor leads towards the economic prosperity of a country?

  1. Industrial growth
  2. Stable law and order situation
  3. Strong financial institutions
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q46. Short term sale of Government securities with an agreement to repurchase the securities at a higher price is called _______________.

  1. Federal fund
  2. Repo
  3. Banker's acceptance
  4. Open market operation
Show answer

Answer: (b) Repo

Q47. Short-term financial instrument used in the money market is known as:

  1. Document
  2. Paper
  3. Bond
  4. Bill
Show answer

Answer: (d) Bill

Q48. According to Establishment of Federal Bank for Co-Operative and regulation of Co-Operative Banking Act, 1977, the term "Time Liabilities" refers to which of the following?

  1. Liabilities which are to be met on demand
  2. Liabilities which are not demand liabilities
  3. Liabilities which are to be met in due course of time
  4. Liabilities which are contingent in nature
Show answer

Answer: (b) Liabilities which are not demand liabilities

Q49. Which of the following refers to "An obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner is the person who reposes or declares the confidence"?

  1. Agency
  2. Trust
  3. Branch
  4. Sole ownership
Show answer

Answer: (b) Trust

Q50. If report of State Bank is not submitted with the application of stay order against winding up to the High Court, the high court can extend a stay order for which of the following Maximum periods?

  1. 15 Days
  2. 30 Days
  3. 45 Days
  4. 60 Days
Show answer

Answer: (c) 45 Days

Q51. Which of the following are intermediate-term and long-term obligations issued by large, high-quality corporations to finance plant and equipment spending?

  1. Bills of Exchange
  2. Bankers' Acceptances
  3. Corporate Bonds
  4. Eurodollars
Show answer

Answer: (c) Corporate Bonds

Q52. All of the following are the components of Part III (Suspension of Business and winding up of Banking Companies) of Banking Companies Ordinance, 1962, EXCEPT:

  1. Power to dispense with meetings of creditors, etc
  2. Booked depositors' credits to be deemed proved
  3. Preferential payments to depositors
  4. Special provisions to make calls on contributories
Show answer

Answer: (d) Special provisions to make calls on contributories

Q53. All of the following are types of financial market, EXCEPT:

  1. Foreign exchange markets
  2. Stock markets
  3. Bond markets
  4. Future markets
Show answer

Answer: (d) Future markets

Q54. According to the State Bank of Pakistan Act, 1956, "Central Board" refers to which of the following?

  1. Central Board of Revenue
  2. Central Board of Directors of the Bank
  3. Central Board of Information Technology
  4. Central Board of Investments
Show answer

Answer: (b) Central Board of Directors of the Bank

Q55. All of the following are demerits of Nationalization of banks, EXCEPT:

  1. Excessive government control leading to the decisions on non professional considerations
  2. Equitable distribution of credit to the different sectors, industries and regions
  3. Neglect of personalized services to the customers
  4. Mismanagement leading to alarming size of non-performing loans portfolio
Show answer

Answer: (b) Equitable distribution of credit to the different sectors, industries and regions

Q56. Which of the following is also known as Repos?

  1. Bills of Exchange
  2. Bankers' Acceptances
  3. Repurchase Agreements
  4. Eurodollars
Show answer

Answer: (c) Repurchase Agreements

Q57. Which of the following terms is NOT defined by the Companies Ordinance, 1984?

  1. Paid-up capital
  2. Debenture
  3. Dividend
  4. Preference share
Show answer

Answer: (c) Dividend

Q58. Which of the following markets may, at preliminary stage, be termed as "market for bonds and stock market"?

  1. Equity Market
  2. Financial Market
  3. Primary Market
  4. Secondary Market
Show answer

Answer: (b) Financial Market

Q59. According to Section 36 of Banking Companies Ordinance, 1962, the Federal Government can issue a certificate of Moratorium, upon an application of State Bank, for which of the following MAXIMUM periods?

  1. Three Months
  2. Six Months
  3. Nine Months
  4. One Year
Show answer

Answer: (b) Six Months

Q60. Which of the following is NOT the kind of shares issued by the company under Law?

  1. Ordinary shares
  2. Preference shares
  3. Deferred shares
  4. Future shares
Show answer

Answer: (d) Future shares

Q61. The word "Bank" is derived from which of the following?

  1. Bancus
  2. Banque
  3. Bench
  4. All of the given options
Show answer

Answer: (b) Banque

Q62. Which of the following studies theory of legislation, precedent and customs?

  1. Analytical Jurisprudence
  2. Historical Jurisprudence
  3. Ethical Jurisprudence
  4. Behavioral Jurisprudence
Show answer

Answer: (a) Analytical Jurisprudence

Q63. All of the following are provisions regarding transfer of ownership of banks, under The Banks (Nationalization) Act, 1974, EXCEPT:

  1. The ownership, management and control of all banks shall stand transferred to, and vest in, the Federal Government on the commencing day
  2. The Federal Government may, if it deems necessary, appoint a Chairman of the Board in respect of a bank
  3. The safety of all deposits in banks shall stand guaranteed by the Federal Government
  4. The provisions of this Act and the vesting of the shares of the banks in the Federal Government thereunder shall not in any way affect the status of the banks as bodies corporate
Show answer

Answer: (b) The Federal Government may, if it deems necessary, appoint a Chairman of the Board in respect of a bank

Q64. ------Studies history of law and evolution of law over a period of time and also amendments, introduction of new principles of law.

  1. Analytical Jurisprudence
  2. Social Jurisprudence
  3. Historical Jurisprudence
  4. Ethical Jurisprudence
Show answer

Answer: (c) Historical Jurisprudence

Q65. According to UCP 600, which of the following refers to any arrangement, however names or described, that is irrevocable and thereby constitutes a definite undertaking the issuing bank to honor a complying presentation?

  1. Credit
  2. Letter of credit
  3. Confirmation
  4. Honor
Show answer

Answer: (a) Credit
Note: UCP 600 defines "Credit" in these words; "Letter of credit" is the instrument itself.

Q66. Which of the following is the assumption of support for the company in case of a crisis?

  1. Negative effect
  2. Variable effect
  3. Positive effect
  4. Dreary effect
Show answer

Answer: (c) Positive effect

Q67. Which of the following refers to "the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability"?

  1. Pledge
  2. Hypothecation
  3. Mortgage
  4. Lien
Show answer

Answer: (c) Mortgage

Q68. Which of the following refers to as "a promise that the bank will pay the amount of funds indicated to the recipient"?

  1. Bills of Exchange
  2. Bankers' Acceptances
  3. Repurchase Agreements
  4. Eurodollars
Show answer

Answer: (b) Bankers' Acceptances

Q69. Which of the following refers to "an instrument issued by a bank in which the bank furnishes its credit which is both good and well known, in place of the buyer's credit, which may be good but is not so well known"?

  1. Letter of credit
  2. Open account
  3. Documentary collection
  4. Payment in advance
Show answer

Answer: (a) Letter of credit

Q70. Which of the following is/are the function(s) of a microfinance institution under Section 6 of the Corporate and Industrial Restructuring Corporation Ordinance, 2000?

  1. To accept deposits
  2. To provide storage and safe custody facilities
  3. To borrow and raise money and open bank accounts
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q71. According to the State Bank of Pakistan Act, 1956, "The Bank" refers to which of the following?

  1. Commercial bank
  2. Investment Bank
  3. SBP Banking Services Corporation
  4. State Bank of Pakistan
Show answer

Answer: (c) SBP Banking Services Corporation

Q72. Which of the following should be the capital of bank under Section 6 of SBP Banking Services Corporation Ordinance, 2001?

  1. One Billion or any amount determined by SBP
  2. Two Billion or any amount determined by SBP
  3. Three Billion or any amount determined by SBP
  4. Four Billion or any amount determined by SBP
Show answer

Answer: (a) One Billion or any amount determined by SBP

Q73. In which of the following Countries, an ombudsman was first established?

  1. Switzerland
  2. Sweden
  3. Finland
  4. Denmark
Show answer

Answer: (b) Sweden

Q74. According to Section 20 of Banking Companies Ordinance, 1962, of the following who CANNOT be a director of the banking company?

  1. Any person who is a director in any other banking company
  2. A federal or provincial minister
  3. A person in the service of Pakistan who is not appointed by Government as a director
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q75. Which of the following represent individuals or companies?

  1. Public Agents
  2. Private Agents
  3. General Agents
  4. Special Agents
Show answer

Answer: (b) Private Agents

Q76. Among the following, who has defined banker as "A banker is a dealer in capital, or, more properly, a dealer in money. He is an intermediate party between the borrower and the lender. He borrows from one party and lends to another"?

  1. J.W. Gilbert
  2. Dr. Herbert L. Hart
  3. Sir John Paged
  4. Halsbury's Laws of England
Show answer

Answer: (a) J.W. Gilbert

Q77. Which of the following is the function(s) of commission under Section 7 of Pakistan Banking and Finance Services Commission Act, 1992?

  1. To conduct open competitive examinations for recruitment to Grade III or higher posts in the financial institutions
  2. To conduct interviews and tests for recruitment to posts in grades higher than Grade III
  3. To conduct tests for promotion of existing employees from lower cadres to Grade III and above
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q78. All of the following are the components of Part II (Business of Banking Companies) of Banking Companies Ordinance, 1962, EXCEPT:

  1. Appointment of director by the State Bank
  2. Power to make declaration
  3. Restriction on term of office of directors
  4. Disposal of non-banking assets
Show answer

Answer: (b) Power to make declaration

Q79. What is the bailment of goods as security for payment of a debt or performance of a promise called?

  1. Hypothecation
  2. Mortgage
  3. Lien
  4. Pledge
Show answer

Answer: (d) Pledge

Q80. An endorsement is said to be Blank endorsement, if it satisfies which of the following conditions?

  1. If the endorser signs his name only
  2. If the endorser adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person
  3. If the endorser restricts or excludes the right to further negotiate the instrument
  4. If the endorser purports to transfer to the endorsee only a part of the amount payable
Show answer

Answer: (a) If the endorser signs his name only

Q81. Which of the following is NOT the essential of a cheque?

  1. It must be in writing
  2. It must by signed by drawer
  3. The amount must be certain amount
  4. It must not have date of issue
Show answer

Answer: (d) It must not have date of issue

Q82. According to the Section 35 of Banking Companies Ordinance, 1962, an auditor shall hold office for which of the following durations?

  1. 2 Years
  2. 3 Years
  3. 4 Years
  4. 5 Years
Show answer

Answer: (b) 3 Years

Q83. All of the following makes the endorsement complete, EXCEPT:

  1. The holder signs on the face or back of the instrument
  2. The instrument is delivered to the endorsee
  3. It is signed and delivered with the intention of vesting the endorsee with the rights of the holder
  4. It is signed and delivered with the intention of vesting the endorsee with the duties of the holder
Show answer

Answer: (d) It is signed and delivered with the intention of vesting the endorsee with the duties of the holder

Q84. According to the Contract Act, 1872, which of the following is/are the cause of a biased consent?

  1. Coercion
  2. Misrepresentation
  3. Mistake
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q85. An endorsement is said to be Restrictive endorsement, if it satisfies which of the following conditions?

  1. If the endorser signs his name only
  2. If the endorser adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person
  3. If the endorser restricts or excludes the right to further negotiate the instrument
  4. If the endorser purports to transfer to the endorsee only a part of the amount payable
Show answer

Answer: (c) If the endorser restricts or excludes the right to further negotiate the instrument

Q86. All of the following are kinds of endorsement, EXCEPT:

  1. Blank endorsement
  2. Full endorsement
  3. Reactive endorsement
  4. Partial endorsement
Show answer

Answer: (c) Reactive endorsement

Q87. Which of the following is/are the right(s) of customer towards his banker?

  1. To receive a statement of his account from a banker
  2. To sue the bank for any loss and damages
  3. To sue the banker for not maintaining the secrecy of his account
  4. All of the given options
Show answer

Answer: (d) All of the given options

Q88. All of the following are examples of Quasi Negotiable Instruments, under the Negotiable Instrument Act, 1881, EXCEPT

  1. Dividend Warrants
  2. Share Warrants
  3. Bearer Debentures
  4. Promissory Note
Show answer

Answer: (d) Promissory Note

Q89. Which of the following agents work along with the principal?

  1. Public Agents
  2. Private Agents
  3. General Agents
  4. Co-agents
Show answer

Answer: (d) Co-agents

Q90. All of the following are requirements for opening bank account of Clubs, Societies and Associations, EXCEPT:

  1. Resolution passed by managing committee
  2. Certified copy of by- laws/rules
  3. Signatures of the persons authorized to operate account
  4. The request for opening an account must be made by competent authority
Show answer

Answer: (d) The request for opening an account must be made by competent authority

Q91. Which of the following is NOT the essential requirement for the endorsement as per Negotiable Instrument Act, 1881?

  1. It should be on the instrument
  2. It should be made by the holder or the maker
  3. Signatures should be in ink and not by pencil or rubber stamp
  4. It should contain unconditional order
Show answer

Answer: (d) It should contain unconditional order

Q92. Which of the following may be cancelled or modified after its date of issue, by the issuing bank?

  1. Revocable letter of credit
  2. Irrevocable letter of credit
  3. Irrevocable confirmed letter of credit
  4. Revolving credit
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Answer: (a) Revocable letter of credit

Q93. An endorsement is said to be Full endorsement, if it satisfies which of the following conditions?

  1. If the endorser signs his name only
  2. If the endorser adds a direction to pay the amount mentioned in the instrument to, or to the order of, a specified person
  3. If the endorser restricts or excludes the right to further negotiate the instrument
  4. If the endorser purports to transfer to the endorsee only a part of the amount payable
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Answer: (a) If the endorser signs his name only

Q94. Which of the following refers to "a business in which a person participates with his money and another with his efforts or skill or both his efforts and skill and shall include unit, trust and mutual fund by whatever name called"?

  1. Musharika
  2. Modaraba
  3. Istisna
  4. Ijara
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Answer: (b) Modaraba

Q95. The letter of credit includes all of the following documents, EXCEPT:

  1. A commercial invoice
  2. A transport document
  3. A certificate of origin
  4. A certificate of investment
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Answer: (d) A certificate of investment

Q96. All of the following are examples of Negotiable Instruments, under the Negotiable Instrument Act, 1881, EXCEPT:

  1. Promissory note
  2. Bill of exchange
  3. Cheque
  4. Bearer debentures
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Answer: (d) Bearer debentures

Q97. According to the Corporate and Industrial Restructuring Corporation Ordinance, 2000, "Customer" means a person in whose name a deposit is held by which of the following?

  1. A Commercial Bank
  2. An Investment bank
  3. A Microfinance Institution
  4. An Islamic Bank
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Answer: (c) A Microfinance Institution

Q98. In letter of credit, which of the following is payable as soon as it is presented for payment?

  1. Demand draft
  2. Time draft
  3. Sight draft
  4. Order draft
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Answer: (c) Sight draft

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ACC501 Mid Term Papers