Law Banking Companies Ordinance 1962 Test

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Question 1

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

Answer

Section 44

Answer

Section 42

Answer

Section 38

Answer

Section 34

Question 2

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

Answer

Not more than 10%

Answer

Not more than 5% (except government)

Answer

Not more than 15%

Question 3

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

Answer

Donated to charities

Answer

Written off by bank

Answer

Distributed among shareholders

Answer

Deposited with SBP

Question 4

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

Answer

Section 50

Answer

Section 55

Answer

Section 53

Answer

Section 52

Question 5

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

Answer

Section 35

Answer

Section 40

Answer

Section 38

Answer

Section 39

Question 6

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

Answer

Section 91

Answer

Section 89

Answer

Section 92

Answer

Section 90

Question 7

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

Answer

Section 13

Answer

Section 12

Answer

Section 14

Answer

Section 15

Question 8

8. Which section makes licensing of banking companies mandatory?

Answer

Section 26

Answer

Section 25

Answer

Section 27

Answer

Section 30

Question 9

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

Answer

Section 50

Answer

Section 55

Answer

Section 60

Answer

Section 52

Question 10

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

Question 11

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

Answer

5% of time liabilities

Answer

2% of time liabilities and 5% of demand liabilities

Answer

2% of demand liabilities

Answer

10% of all liabilities

Question 12

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

Answer

Finance Minister

Answer

Securities & Exchange Commission

Answer

State Bank of Pakistan

Answer

Federal Government

Question 13

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

Answer

Section 45

Answer

Section 47

Answer

Section 48

Answer

Section 46

Question 14

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

Answer

Parliament

Answer

State Bank of Pakistan

Answer

Securities & Exchange Commission

Answer

Finance Ministry

Question 15

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

Answer

Section 41A

Answer

Section 39

Answer

Section 36

Answer

Section 42

Question 16

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

Answer

100,000 rupees

Answer

1,000,000 rupees

Answer

500,000 rupees

Answer

50,000 rupees

Question 17

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

Answer

Section 19

Answer

Section 13

Answer

Section 15

Answer

Section 10

Question 18

18. What happens to unclaimed deposits after 10 years?

Answer

Written off by the bank

Answer

Donated to welfare funds

Answer

Returned to depositors automatically

Answer

Transferred to State Bank of Pakistan

Question 19

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

Answer

Creditors only

Answer

Federal Government

Answer

Shareholders only

Answer

State Bank of Pakistan

Question 20

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

Answer

Section 83

Answer

Section 86

Answer

Section 88

Answer

Section 85

Question 21

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

Answer

Section 10

Answer

Section 15

Answer

Section 13

Answer

Section 19

Question 22

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

Answer

Ministry of Finance

Answer

State Bank of Pakistan

Answer

Federal Government

Answer

High Court

Question 23

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

Answer

Section 11

Question 24

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

Answer

Section 42

Answer

Section 41A

Answer

Section 41B

Answer

Section 41C

Question 25

25. Which year was the Banking Companies Ordinance enacted?

Question 26

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

Answer

7 years (extendable by 5 years with SBP approval)

Question 27

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

Answer

Section 24

Answer

Section 23

Answer

Section 26

Answer

Section 22

Question 28

28. Which section prohibits advertising for deposits?

Answer

Section 28

Answer

Section 27A

Answer

Section 26

Answer

Section 25

Question 29

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

Answer

Section 26

Answer

Section 24

Answer

Section 22

Answer

Section 44

Question 30

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

Answer

Section 40

Answer

Section 35

Answer

Section 41

Answer

Section 37

Question 31

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

Answer

Section 41B

Answer

Section 41A

Answer

Section 41C

Answer

Section 42

Question 32

32. Which section mandates maintenance of liquid assets?

Answer

Section 31

Answer

Section 29

Answer

Section 30

Answer

Section 28

Question 33

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

Answer

Federal Government

Answer

State Bank of Pakistan

Answer

Ministry of Finance

Answer

Securities and Exchange Commission

Question 34

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

Answer

Whole of Pakistan

Answer

Punjab only

Answer

Federal Capital only

Answer

Sindh and Balochistan

Question 35

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

Answer

Section 13

Answer

Section 12

Question 36

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

Answer

Section 19

Answer

Section 25

Answer

Section 21

Answer

Section 23

Question 37

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

Answer

5 years imprisonment

Answer

Up to 3 years imprisonment or fine

Answer

Life imprisonment

Question 38

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

Answer

Section 48

Answer

Section 45

Answer

Section 58

Answer

Section 55

Question 39

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

Answer

Section 36

Answer

Section 39

Answer

Section 34

Answer

Section 38

Question 40

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

Answer

Section 41B

Answer

Section 45

Answer

Section 41C

Answer

Section 47

Question 41

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

Answer

Federal Government

Answer

SBP nominee

Answer

Registrar of Companies

Answer

High Court official

Question 42

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

Answer

Section 83

Answer

Section 84

Answer

Section 85

Answer

Section 83A

Question 43

43. Which section regulates moratorium on banking companies?

Answer

Section 58

Answer

Section 69

Answer

Section 52

Answer

Section 72

Question 44

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

Question 45

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

Answer

Section 45

Answer

Section 44

Answer

Section 43A

Answer

Section 46

Question 46

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

Answer

Section 30

Answer

Section 28

Answer

Section 31

Answer

Section 27

Question 47

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

Answer

A bank incorporated abroad

Answer

A bank recognized by Finance Ministry

Answer

A cooperative bank only

Answer

A bank included in the schedule of SBP Act 1956

Question 48

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

Answer

Section 37

Answer

Section 36

Answer

Section 38

Answer

Section 39

Question 49

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

Answer

Sessions Court

Answer

Civil Court

Answer

Banking Tribunal

Answer

High Court

Question 50

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

Answer

Section 47

Answer

Section 45

Answer

Section 69

Answer

Section 55

Question 51

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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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