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

Life imprisonment

Fine only

5 years imprisonment

Up to 3 years imprisonment or fine

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

Parliament

State Bank of Pakistan

Securities & Exchange Commission

Finance Ministry

3. Which section prohibits advertising for deposits?

Section 26

Section 28

Section 25

Section 27A

4. What happens to unclaimed deposits after 10 years?

Donated to welfare funds

Transferred to State Bank of Pakistan

Written off by the bank

Returned to depositors automatically

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

Section 88

Section 85

Section 83

Section 86

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

Shareholders only

State Bank of Pakistan

Federal Government

Creditors only

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

Section 9

Section 7

Section 8

Section 11

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

Section 27

Section 31

Section 28

Section 30

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

Ministry of Finance

Federal Government

State Bank of Pakistan

High Court

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

Section 41C

Section 41B

Section 42

Section 41A

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

Section 38

Section 34

Section 36

Section 39

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

Whole of Pakistan

Sindh and Balochistan

Federal Capital only

Punjab only

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

Ministry of Finance

State Bank of Pakistan

Federal Government

Securities and Exchange Commission

14. Which year was the Banking Companies Ordinance enacted?

1960

1962

1972

1956

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

Section 55

Section 47

Section 69

Section 45

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

1,000,000 rupees

500,000 rupees

50,000 rupees

100,000 rupees

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

State Bank of Pakistan

Finance Minister

Securities & Exchange Commission

Federal Government

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

Section 7

Section 9

Section 5

Section 2

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

Section 52

Section 60

Section 55

Section 50

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

Section 14

Section 15

Section 13

Section 12

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

Section 10

Section 13

Section 15

Section 19

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

Not more than 10%

Not more than 5% (except government)

Not more than 15%

Unlimited

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

Section 58

Section 45

Section 55

Section 48

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

Section 35

Section 40

Section 37

Section 41

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

3 years

10 years

6 years

5 years

Page 2 of 2

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

Section 13

Section 10

Section 15

Section 19

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

10% of all liabilities

5% of time liabilities

2% of demand liabilities

2% of time liabilities and 5% of demand liabilities

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

Section 41C

Section 45

Section 41B

Section 47

29. Which section regulates moratorium on banking companies?

Section 72

Section 52

Section 58

Section 69

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

Sessions Court

Civil Court

High Court

Banking Tribunal

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

Section 43A

Section 44

Section 45

Section 46

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

Section 42

Section 41B

Section 41C

Section 41A

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

Section 84

Section 83A

Section 83

Section 85

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

Section 92

Section 91

Section 90

Section 89

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

Section 23

Section 25

Section 19

Section 21

36. Which section mandates maintenance of liquid assets?

Section 31

Section 29

Section 30

Section 28

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

Section 50

Section 53

Section 55

Section 52

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

Section 38

Section 39

Section 40

Section 35

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

High Court official

Federal Government

SBP nominee

Registrar of Companies

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

Written off by bank

Deposited with SBP

Distributed among shareholders

Donated to charities

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

Section 39

Section 38

Section 37

Section 36

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

Section 38

Section 42

Section 34

Section 44

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

3 years

5 years

10 years

7 years (extendable by 5 years with SBP approval)

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

Section 44

Section 22

Section 24

Section 26

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

Section 12

Section 8

Section 13

Section 9

46. Which section makes licensing of banking companies mandatory?

Section 27

Section 30

Section 26

Section 25

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

A cooperative bank only

A bank incorporated abroad

A bank included in the schedule of SBP Act 1956

A bank recognized by Finance Ministry

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

Section 42

Section 41A

Section 36

Section 39

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

Section 23

Section 24

Section 22

Section 26

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

Section 45

Section 46

Section 47

Section 48

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Mustansar KhanLast Updated: September 16, 2025

Law Banking Companies Ordinance 1962 Test

Law Banking Companies Ordinance 1962 Test

Law Banking Companies Ordinance 1962 Test Online MCQs

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