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Law Banking Companies Ordinance 1962 Test

Mustansar KhanLast Updated: September 16, 2025

Law Banking Companies Ordinance 1962 Test

Total Questions:	50
Time Allowed:	25 Minutes
Total Marks:	50
How to Attempt Test:	Please choose the right Option in MCQ-type question.
Test Helpful For:	Police Test CTD Police Test Interview Questions about Police Recruitment Tests

Law Banking Companies Ordinance 1962 Test Online MCQs

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Page 1 of 2

1. Under which section can SBP supersede the board of directors of a bank?

Section 41C

Section 41A

Section 42

Section 41B

2. Which section empowers SBP to impose monetary penalties on banks?

Section 85

Section 83A

Section 84

Section 83

3. Which court handles winding up proceedings of banking companies?

High Court

Banking Tribunal

Civil Court

Sessions Court

4. What happens to unclaimed deposits after 10 years?

Transferred to State Bank of Pakistan

Written off by the bank

Returned to depositors automatically

Donated to welfare funds

5. Which section prohibits advertising for deposits?

Section 25

Section 28

Section 26

Section 27A

6. Which section requires every banking company to create a Reserve Fund?

Section 19

Section 21

Section 25

Section 23

7. Which section makes licensing of banking companies mandatory?

Section 26

Section 30

Section 27

Section 25

8. Which section deals with restrictions on employment of managing agents?

Section 48

Section 47

Section 46

Section 45

9. Who has the power to appoint a director in a banking company under Section 15A?

State Bank of Pakistan

Securities & Exchange Commission

Finance Minister

Federal Government

10. Which section restricts banks from engaging in trading of goods?

Section 9

Section 8

Section 11

Section 7

11. What is meant by a “scheduled bank” under this Ordinance?

A bank recognized by Finance Ministry

A bank included in the schedule of SBP Act 1956

A bank incorporated abroad

A cooperative bank only

12. Which year was the Banking Companies Ordinance enacted?

1962

1960

1956

1972

13. Which authority regulates and supervises banks under this Ordinance?

Securities and Exchange Commission

State Bank of Pakistan

Ministry of Finance

Federal Government

14. Who can issue directions to banking companies in public interest?

Parliament

Finance Ministry

State Bank of Pakistan

Securities & Exchange Commission

15. Which section mandates maintenance of liquid assets?

Section 31

Section 29

Section 30

Section 28

16. What happens to unclaimed deposits after 10 years under Section 31?

Written off by bank

Distributed among shareholders

Donated to charities

Deposited with SBP

17. For how long can a director (not CEO) hold office consecutively?

6 years

5 years

3 years

10 years

18. Which section protects SBP and its officers from legal suits for actions in good faith?

Section 88

Section 86

Section 85

Section 83

19. For how long can a banking company hold immovable property not required for its own use?

3 years

10 years

5 years

7 years (extendable by 5 years with SBP approval)

20. Who acts as official liquidator in bank winding up?

SBP nominee

Registrar of Companies

High Court official

Federal Government

21. Which section regulates moratorium on banking companies?

Section 72

Section 58

Section 52

Section 69

22. Which section deals with the minimum paid-up capital requirement?

Section 13

Section 10

Section 15

Section 19

23. Which section prohibits loans against bank’s own shares?

Section 24

Section 26

Section 23

Section 22

24. What is the extent of the Banking Companies Ordinance, 1962?

Federal Capital only

Sindh and Balochistan

Punjab only

Whole of Pakistan

25. Which section restricts loans to directors and related parties?

Section 26

Section 22

Section 44

Section 24

Page 2 of 2

26. Which section gives SBP the power to inspect banking companies?

Section 41

Section 40

Section 35

Section 37

27. What is the maximum penalty for contravening provisions of the Ordinance?

100,000 rupees

1,000,000 rupees

50,000 rupees

500,000 rupees

28. Which section empowers SBP to apply to court for winding up of a bank?

Section 47

Section 55

Section 45

Section 69

29. Which section defines “prohibited business” for banks?

Section 13

Section 12

Section 8

Section 9

30. Which section prohibits payment of unsecured loans to directors?

Section 46

Section 45

Section 43A

Section 44

31. What is the punishment for false statements in required documents?

5 years imprisonment

Fine only

Up to 3 years imprisonment or fine

Life imprisonment

32. Which section allows SBP to appoint auditors for banks?

Section 35

Section 40

Section 38

Section 39

33. Which section allows SBP to frame rules for carrying out provisions of the Ordinance?

Section 89

Section 92

Section 91

Section 90

34. Which section of the Ordinance defines “banking”?

Section 9

Section 5

Section 7

Section 2

35. Which section empowers SBP to take control of a banking company?

Section 42

Section 41B

Section 41A

Section 41C

36. What is the requirement of cash reserve for non-scheduled banks under Section 22?

2% of time liabilities and 5% of demand liabilities

5% of time liabilities

2% of demand liabilities

10% of all liabilities

37. Which section empowers SBP to supersede management in case of mismanagement?

Section 41C

Section 45

Section 47

Section 41B

38. Which section ensures priority of depositors in winding up?

Section 60

Section 55

Section 50

Section 52

39. Which section provides procedure for amalgamation of banking companies?

Section 55

Section 58

Section 48

Section 45

40. Which section requires publication of annual accounts and balance sheet?

Section 42

Section 44

Section 38

Section 34

41. Which section mandates submission of half-yearly returns?

Section 39

Section 36

Section 34

Section 38

42. What is the restriction on voting rights of shareholders in a banking company?

Unlimited

Not more than 5% (except government)

Not more than 10%

Not more than 15%

43. Which section deals with licensing of new banking branches?

Section 28

Section 31

Section 27

Section 30

44. Who can control and regulate advances of banking companies under Section 25?

High Court

Ministry of Finance

Federal Government

State Bank of Pakistan

45. Who can apply for winding up of a banking company?

Creditors only

Shareholders only

State Bank of Pakistan

Federal Government

46. Which section requires banks to submit returns and information to SBP?

Section 36

Section 39

Section 42

Section 41A

47. Which section provides SBP the power to call for information from banks?

Section 36

Section 39

Section 38

Section 37

48. Which section deals with preferential payments during winding up?

Section 55

Section 50

Section 52

Section 53

49. Which section regulates acquisition of shares in banking companies?

Section 14

Section 13

Section 15

Section 12

50. Which section prohibits payment of dividend until capital requirements are met?

Section 15

Section 10

Section 19

Section 13

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Mustansar KhanLast Updated: September 16, 2025

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Law Banking Companies Ordinance 1962 Test

Law Banking Companies Ordinance 1962 Test

Law Banking Companies Ordinance 1962 Test Online MCQs

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