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

Section 37

Section 39

Section 36

Section 38

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

Unlimited

Not more than 15%

Not more than 10%

Not more than 5% (except government)

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

Section 13

Section 8

Section 12

Section 9

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

Section 38

Section 44

Section 34

Section 42

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

10 years

5 years

6 years

3 years

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

Section 24

Section 26

Section 44

Section 22

7. Which section mandates maintenance of liquid assets?

Section 31

Section 29

Section 28

Section 30

8. Which section regulates moratorium on banking companies?

Section 52

Section 69

Section 58

Section 72

9. Which section makes licensing of banking companies mandatory?

Section 30

Section 26

Section 27

Section 25

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

Section 13

Section 15

Section 19

Section 10

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

Section 30

Section 31

Section 27

Section 28

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

Securities & Exchange Commission

Parliament

Finance Ministry

State Bank of Pakistan

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

Section 38

Section 35

Section 40

Section 39

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

Section 38

Section 39

Section 36

Section 34

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

Section 9

Section 7

Section 8

Section 11

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

Section 42

Section 39

Section 36

Section 41A

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

Section 53

Section 50

Section 55

Section 52

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

Distributed among shareholders

Donated to charities

Deposited with SBP

Written off by bank

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

Registrar of Companies

SBP nominee

Federal Government

High Court official

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

Federal Government

High Court

State Bank of Pakistan

Ministry of Finance

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

2% of time liabilities and 5% of demand liabilities

10% of all liabilities

2% of demand liabilities

5% of time liabilities

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

Section 83

Section 86

Section 85

Section 88

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

3 years

7 years (extendable by 5 years with SBP approval)

10 years

5 years

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

Section 10

Section 15

Section 19

Section 13

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

Section 2

Section 5

Section 9

Section 7

Page 2 of 2

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

Up to 3 years imprisonment or fine

Fine only

Life imprisonment

5 years imprisonment

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

Banking Tribunal

Sessions Court

High Court

Civil Court

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

Section 83

Section 83A

Section 85

Section 84

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

Section 41

Section 37

Section 40

Section 35

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

Ministry of Finance

Securities and Exchange Commission

State Bank of Pakistan

Federal Government

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

A bank included in the schedule of SBP Act 1956

A bank incorporated abroad

A bank recognized by Finance Ministry

A cooperative bank only

32. What happens to unclaimed deposits after 10 years?

Returned to depositors automatically

Written off by the bank

Transferred to State Bank of Pakistan

Donated to welfare funds

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

Whole of Pakistan

Sindh and Balochistan

Punjab only

Federal Capital only

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

Finance Minister

Securities & Exchange Commission

Federal Government

State Bank of Pakistan

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

Section 46

Section 45

Section 44

Section 43A

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

Section 45

Section 41C

Section 41B

Section 47

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

Section 89

Section 90

Section 91

Section 92

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

1,000,000 rupees

50,000 rupees

500,000 rupees

100,000 rupees

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

Section 47

Section 45

Section 46

Section 48

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

Creditors only

Shareholders only

State Bank of Pakistan

Federal Government

41. Which section prohibits advertising for deposits?

Section 26

Section 25

Section 27A

Section 28

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

Section 41C

Section 42

Section 41B

Section 41A

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

Section 21

Section 19

Section 23

Section 25

44. Which year was the Banking Companies Ordinance enacted?

1960

1972

1956

1962

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

Section 55

Section 52

Section 60

Section 50

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

Section 45

Section 55

Section 69

Section 47

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

Section 48

Section 45

Section 58

Section 55

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

Section 13

Section 14

Section 12

Section 15

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

Section 22

Section 23

Section 24

Section 26

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

Section 41B

Section 41C

Section 42

Section 41A

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Mustansar KhanLast Updated: September 16, 2025

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