Law Banking Companies Ordinance 1962 Test

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Question 1

1. 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 2

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

Answer

Banking Tribunal

Answer

Sessions Court

Answer

High Court

Answer

Civil Court

Question 3

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

Answer

Section 13

Answer

Section 15

Answer

Section 10

Answer

Section 19

Question 4

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

Answer

2% of demand liabilities

Answer

2% of time liabilities and 5% of demand liabilities

Answer

5% of time liabilities

Answer

10% of all liabilities

Question 5

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

Answer

Punjab only

Answer

Sindh and Balochistan

Answer

Federal Capital only

Answer

Whole of Pakistan

Question 6

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

Answer

Section 30

Answer

Section 31

Answer

Section 27

Answer

Section 28

Question 7

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

Answer

Section 39

Answer

Section 36

Answer

Section 37

Answer

Section 38

Question 8

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

Answer

Not more than 5% (except government)

Answer

Not more than 15%

Answer

Not more than 10%

Question 9

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

Answer

Ministry of Finance

Answer

State Bank of Pakistan

Answer

High Court

Answer

Federal Government

Question 10

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

Answer

Section 89

Answer

Section 91

Answer

Section 92

Answer

Section 90

Question 11

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

Question 12

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

Answer

Section 55

Answer

Section 53

Answer

Section 50

Answer

Section 52

Question 13

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

Answer

Section 47

Answer

Section 48

Answer

Section 45

Answer

Section 46

Question 14

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

Answer

High Court official

Answer

SBP nominee

Answer

Federal Government

Answer

Registrar of Companies

Question 15

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

Answer

Section 44

Answer

Section 42

Answer

Section 34

Answer

Section 38

Question 16

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

Answer

Section 40

Answer

Section 38

Answer

Section 35

Answer

Section 39

Question 17

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

Answer

Section 83

Answer

Section 85

Answer

Section 88

Answer

Section 86

Question 18

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

Answer

Section 45

Answer

Section 47

Answer

Section 55

Answer

Section 69

Question 19

19. Which year was the Banking Companies Ordinance enacted?

Question 20

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

Answer

Section 43A

Answer

Section 44

Answer

Section 46

Answer

Section 45

Question 21

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

Answer

50,000 rupees

Answer

100,000 rupees

Answer

1,000,000 rupees

Answer

500,000 rupees

Question 22

22. Which section makes licensing of banking companies mandatory?

Answer

Section 30

Answer

Section 25

Answer

Section 26

Answer

Section 27

Question 23

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

Answer

Section 24

Answer

Section 23

Answer

Section 22

Answer

Section 26

Question 24

24. What happens to unclaimed deposits after 10 years?

Answer

Donated to welfare funds

Answer

Transferred to State Bank of Pakistan

Answer

Written off by the bank

Answer

Returned to depositors automatically

Question 25

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

Answer

Section 45

Answer

Section 41B

Answer

Section 41C

Answer

Section 47

Question 26

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

Answer

Section 85

Answer

Section 84

Answer

Section 83A

Answer

Section 83

Question 27

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

Answer

Section 22

Answer

Section 26

Answer

Section 24

Answer

Section 44

Question 28

28. Which section mandates maintenance of liquid assets?

Answer

Section 29

Answer

Section 31

Answer

Section 30

Answer

Section 28

Question 29

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

Answer

Section 36

Answer

Section 38

Answer

Section 39

Answer

Section 34

Question 30

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

Answer

Section 11

Question 31

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

Answer

Up to 3 years imprisonment or fine

Answer

5 years imprisonment

Answer

Life imprisonment

Question 32

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

Answer

Section 10

Answer

Section 13

Answer

Section 19

Answer

Section 15

Question 33

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

Answer

Section 41B

Answer

Section 41A

Answer

Section 41C

Answer

Section 42

Question 34

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

Answer

State Bank of Pakistan

Answer

Federal Government

Answer

Ministry of Finance

Answer

Securities and Exchange Commission

Question 35

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

Answer

Securities & Exchange Commission

Answer

State Bank of Pakistan

Answer

Federal Government

Answer

Finance Minister

Question 36

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

Answer

Section 55

Answer

Section 60

Answer

Section 50

Answer

Section 52

Question 37

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

Answer

A bank recognized by Finance Ministry

Answer

A cooperative bank only

Answer

A bank incorporated abroad

Answer

A bank included in the schedule of SBP Act 1956

Question 38

38. Which section prohibits advertising for deposits?

Answer

Section 27A

Answer

Section 28

Answer

Section 25

Answer

Section 26

Question 39

39. Which section regulates moratorium on banking companies?

Answer

Section 52

Answer

Section 58

Answer

Section 72

Answer

Section 69

Question 40

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

Answer

Written off by bank

Answer

Distributed among shareholders

Answer

Donated to charities

Answer

Deposited with SBP

Question 41

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

Answer

Section 15

Answer

Section 12

Answer

Section 14

Answer

Section 13

Question 42

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

Answer

Section 12

Answer

Section 13

Question 43

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

Answer

Section 36

Answer

Section 41A

Answer

Section 39

Answer

Section 42

Question 44

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

Answer

Section 37

Answer

Section 35

Answer

Section 40

Answer

Section 41

Question 45

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

Answer

Finance Ministry

Answer

Parliament

Answer

State Bank of Pakistan

Answer

Securities & Exchange Commission

Question 46

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

Answer

Section 19

Answer

Section 25

Answer

Section 21

Answer

Section 23

Question 47

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

Answer

Federal Government

Answer

Shareholders only

Answer

State Bank of Pakistan

Answer

Creditors only

Question 48

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

Answer

Section 41B

Answer

Section 41C

Answer

Section 41A

Answer

Section 42

Question 49

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

Question 50

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

Answer

Section 58

Answer

Section 48

Answer

Section 55

Answer

Section 45

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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Law Banking Companies Ordinance 1962 Test

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Law Banking Companies Ordinance 1962 Test

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