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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.
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Law Banking Companies Ordinance 1962 Test Online MCQs

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Page 1 of 2

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

Section 44

Section 45

Section 43A

Section 46

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

Section 21

Section 23

Section 25

Section 19

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

Section 40

Section 35

Section 39

Section 38

4. 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 cooperative bank only

A bank incorporated abroad

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

Section 89

Section 91

Section 92

Section 90

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

Securities and Exchange Commission

State Bank of Pakistan

Federal Government

Ministry of Finance

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

Section 58

Section 55

Section 48

Section 45

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

Section 19

Section 15

Section 10

Section 13

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

Section 85

Section 83

Section 84

Section 83A

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

Section 22

Section 26

Section 24

Section 23

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

Section 38

Section 34

Section 42

Section 44

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

2% of time liabilities and 5% of demand liabilities

2% of demand liabilities

5% of time liabilities

10% of all liabilities

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

Banking Tribunal

Sessions Court

Civil Court

High Court

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

3 years

5 years

10 years

6 years

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

Punjab only

Federal Capital only

Whole of Pakistan

Sindh and Balochistan

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

Section 36

Section 42

Section 41A

Section 39

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

Section 37

Section 40

Section 41

Section 35

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

Section 86

Section 88

Section 83

Section 85

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

Section 55

Section 45

Section 47

Section 69

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

Section 12

Section 13

Section 14

Section 15

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

Section 38

Section 36

Section 39

Section 34

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

Section 36

Section 37

Section 38

Section 39

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

State Bank of Pakistan

High Court

Federal Government

Ministry of Finance

24. Which section prohibits advertising for deposits?

Section 26

Section 25

Section 28

Section 27A

25. 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

Page 2 of 2

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

500,000 rupees

1,000,000 rupees

50,000 rupees

100,000 rupees

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

Section 48

Section 45

Section 46

Section 47

28. Which section makes licensing of banking companies mandatory?

Section 26

Section 25

Section 30

Section 27

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

Section 9

Section 2

Section 5

Section 7

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

Section 9

Section 12

Section 8

Section 13

31. Which section regulates moratorium on banking companies?

Section 72

Section 58

Section 52

Section 69

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

Section 41C

Section 45

Section 41B

Section 47

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

7 years (extendable by 5 years with SBP approval)

5 years

10 years

3 years

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

Section 41B

Section 41C

Section 42

Section 41A

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

Distributed among shareholders

Donated to charities

Written off by bank

Deposited with SBP

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

Section 31

Section 27

Section 28

Section 30

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

Section 9

Section 8

Section 11

Section 7

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

Securities & Exchange Commission

Federal Government

State Bank of Pakistan

Finance Minister

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

Section 55

Section 50

Section 52

Section 60

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

Creditors only

Federal Government

Shareholders only

State Bank of Pakistan

41. Which section mandates maintenance of liquid assets?

Section 29

Section 28

Section 30

Section 31

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

Up to 3 years imprisonment or fine

Life imprisonment

Fine only

5 years imprisonment

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

Parliament

Securities & Exchange Commission

Finance Ministry

State Bank of Pakistan

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

Section 50

Section 55

Section 52

Section 53

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

Not more than 5% (except government)

Not more than 15%

Unlimited

Not more than 10%

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

Section 10

Section 13

Section 19

Section 15

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

Section 22

Section 44

Section 24

Section 26

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

Section 41C

Section 42

Section 41B

Section 41A

49. Which year was the Banking Companies Ordinance enacted?

1972

1960

1956

1962

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

High Court official

Federal Government

Registrar of Companies

SBP nominee

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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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