General Banking Questions With Answer - Morshed

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TEST OF BANKING KNOWLEDGE

Part -1: General Banking
01. Which one of the following is a secondary financial instrument?

(A) Loans & Advances
(B) Shares
(C) Deposit
(D) Debentures
02. The Banker has a statutory obligation to -

(A) Exercise Lien,
(B) Maintain Secrecy of his customer’s account (3)
(C) Honour Customers Cheques (2)
(D) Honour Customers bills
03. The most undesirable customer is -

(A) An unregistered firm
(B) A minor
(C) A married women
(D) An undischarged bankrupt
03. The document drawn by a debtor on the creditor agreeing to pay a certain sum is called-
(A) Cheque
(B) Promissory Note
(C) Draft
(D) Bill of Exchange
04. The followings are the salient features of a Fixed Deposit account, except -
(A) It is repayable on the expiry of the specified period
(B) It is a transferable instrument
(C) Length of time is fixed
(D) Rate of interest is fixed
05. The Executor is appointed by a will. The certified copy (issued by the Court) of the will is known
as -
(A) Trust Deed
(B) Codicil
(C) Will Deed
(D) Probate
06. Which shariah principle is used for mobilizing current deposits by the Islamic banks of
Bangladesh -
(A) Mudaraba
(B) Musharaka
(C) Al-wadia
(D) None of these
07. A collecting banker is given protection only when the collects -

(A) A Crossed Cheque
(B) An Order Cheque
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(C) A Bearer Cheque (D) None of these
08. The safest form of crossing is -
(A) General Crossing
(B) Special Crossing
(C) Double Crossing
(D) A/C Payee Crossing
09. When Garnishee order is issued by the Court attaching the account of a Customer, the banker is
called-
(A) Judgement Debtor
(B) Judgement Creditor
(C) Garnishee
(D) Garnishor
10. As per the Bank Company Act, 1991, every banking company incorporated in Bangladesh shall
transfer to the reserve fund -
(A) At least 20% of current year’s profit before tax
(B) At least 5% of demand and time liabilities
(C) At least 13% of demand and time liabilities
(D) None of the above
11. Payment in due course is the -

(A) Payment to the last holder of the cheque
(B) Payment according to apparent tenor in good faith and without negligence.
(C) Payment according to apparent tenor
(D) None of the above
12. The limitation period of loan covered by a registered mortgage deed is -

(A) Three years
(B) Twelve years
(C) Fifteen years
(D) Twenty years.
13. Which of the following is the weakest method of charging security?

(A) A Pledge
(B) Mortgage
(C) Hypothecation
(D) Assignment
14. Transfer of possession of physical security is essential in the case of -

(A) Lien
(B) Mortgage
(C) Pledge
(D) Both (a) and (C)
15. Which one is not included in funded credit?

(A) Demand Loan
(B) Term Loan
(C) Letter of Credit
(D) Export Credit
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16. Which of the following is not an intangible asset?

(A) Goodwill
(B) Copyright
(C) Land
(D) Trademark
17. L/C is an undertaking of making payment given by -

(A) Importer to Beneficiary
(B) Issuing Bank to Negotiating Bank
(C) Opening Bank to Consignor
(D) Consignee to Consignor
18. Generally which bank makes initial payment to the exporter after receiving the documents?
(A) The Reimbursing Bank
(B) The Advising Bank
(C) The Negotiating Bank
(D) None of these
19. Which of the following belongs to pre-shipment credit?

(A) FBP
(B) PAD
(C) LIM
(D) Back to Back L/C
20. A Bill of Lading is -

(A) a negotiable instrument
(B) a non-negotiable instrument
(C) quasi-negotiable instrument
(D) None of these
21. Incoterm indicate who will bear -

(A) Cost of Carriage
(B) Risk of Carriage
(C) Both (a) and (b)
(D) None of these
22. An incoming passenger can bring -

(A) Any amount of foreign exchange with declaration
(B) Upto US$. 5,000.00 without declaration
(C) Upto US$. 10,000.00 without declaration
(D) Both (a) and (b)
23. Buying and selling of a foreign currency to make profit from discrepancies between exchange
rates prevailing at the same time in different centers is called -
(A) Future
(B) Arbitrage
(C) Swap
(D) None of these
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24. In a letter of credit transaction as per UCPDC, banks deal in -

A) Documents and not in goods
B) Goods and not in documents
C) Both documents and goods
D) None of these
25. A banking company cannot hold any immovable property, not acquired for its own use for a
period exceeding -
A) 5 Years
B) 7 Years
C) 10 Years
D) None of these
26. In a letter of credit transaction as per UCPDC, banks deal in -

A) Documents and not in goods
B) Goods and not in documents
C) Both documents and goods
D) None of these
27. A document containing the following is a promissory note -

A) I promise to pay Y Tk. 1,000 after his marriage with Z
B) I promise to pay as soon as possible a sum of Tk. 1,000 to X
C) I promise to pay X Tk. 1,000 seven days after the death of Y.
D) None of these
28. Acceptance of drawee is required in case of -

A) bill payable after sight;
B) bill payable on demand;
C) promissory note payable on demand.
D) None of these
29. A bill endorsed or delivered to a person with the understanding that it will be paid only if certain
conditions are fulfilled is knows as -
A) Accommodation bill;
B) Via;
C) Escrow
D) None of these
30. Protest is necessary in case of dishonour of -

A) Foreign promissory note;
B) Foreign Bill of Exchange
C) Inland Bill of Exchange
D) None of these
31. A bill of Exchange drawn in Delhi and payable in London is an example of -

A) Inland Bill
B) Foreign Bill
C) Clean Bill
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D) None of these
32. A X of Mumbai draws a bill of exchange on Y of Delhi payable at London. It is an example of -

A) Inland Bill
B) Foreign Bill
C) Accommodation Bill
D) None of these
33. If a bill of exchange dated January 31, 1983 is payable one month after date, the due date of the
instrument will be -
A) February 28, 1983
B) March 1, 1983
C) March 2, 1983
D) March 3, 1983
34. The person promising to pay money under a promissory note is known as -
A) Drawer
B) Maker
C) Drawee
35. A person who is legally entitled to the possession of the negotiable instrument in his own name
and to receive the amount thereof is known as -
A) Holder in due course
B) Holder
C) Holder for value
D) None of these
36. A minor -
A) cannot draw a negotiable instrument;
B) cannot be a payee of a negotiable instrument;
C) cannot be drawee of a negotiable instrument
37. A non-trading joint stock company can draw or accept negotiable instrument if it has been given
such power of by -
A) its memorandum of association; (it is alright)
B) its articles of association;
C) the Companies Act.
D) None of these
38. Presentment means placing before the drawee a negotiable instrument for -
A) acceptance;
B) payment;
C) sight, acceptance or payment.
D) None of these
39. A drawee is to be given for deliberations at least a time of -

A) 24 hours;
B) 48 hours;
C) 72 hours
D) None of these
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40. Presentment for acceptance is required in case of -

A) every bill of exchange;
B) every promissory note;
C) every bill of exchange payable after sight;
D) None of these
41. A bill should be presented for acceptance in case of insolvency of a drawee to -

A) official receiver;
B) drawee in case of need;
C) acceptor for honour
D) None of these
42. An order instrument can be made payable to the bearer by making -

A) conditional indorsement;
B) full indorsement;
C) General indorsement.
D) None of these
43. The indorser will not be liable to the holder on dishonour of a negotiable instrument if he makes -
A) sans-recourse indorsement;
B) facultative indorsement;
C) sans-frais indorsement
D) None of these
44. Negotiation – back implies -

A) return of the instrument back to the person who indorsed it earlier;
B) the indorser does not want the instrument to be indorsed back to him;
C) the indorser does not want the indorsee to incur any expenses on indorser’s account
D) None of these
45. Once a bearer instrument always a bearer instrument is true in case of -

A) a Cheque only;
B) a bill of exchange only;
C) all negotiable instruments;
D) None of these
46. Under Negotiable Instruments Act, whereby such words are added to an endorsement whereby
the endorser waives his right to receive notice of dishonour, it is known as -
A) Blank endorsement;
B) Endorsement in full;
C) Restrictive endorsement.
D) None of these (it should be conversion of indorsement in blank into indorsement in full).
47. Noting means -

A) a formal certificate of dishonour issued by the notary public;
B) authentic and official proof of presentment and dishonour of a negotiable instrument;
C) recording the fact that the instrument has been accepted for honour of some person liable on the
instrument.
D) None of these
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48. Payment for honour can be made by -
A) any party whether he is liable to the bill of exchange or not;
B) only by a party liable on the bill;
C) only by the acceptor for honour
D) None of these
49. Liabilities of all parties in case of bill of exchange terminate when -

A) it is held by the acceptor in his own right at or after maturity;
B) it is negotiated back;
C) the holder fails to give notice of dishonour
D) None of these
50. The relationship between a banker and its customer is basically that of -
A) a debtor and a creditor;
B) a trustee and the beneficiary;
C) a principal and an agent
D) None of these
51. The banker’s answer in case of dishonour of a cheque on account of insufficiency of funds is
generally -
A) Refer to drawer (RD);
B) No Funds (NF);
C) Not arranged for (NAF)
D) None of these
52. The title of the endorse will not be better than that of the endorser in case of a cheque is crossed
containing the words -
A) & Co.;
B) Not negotiable;
C) Account Payee;
D) None of these
53. Cancellation of crossing can be done by -

A) holder of the cheque;
B) payee of the cheque;
C) drawer of the cheque;
D) None of these
54. Travellers Cheques are issued by -

A) Travel Agencies;
B) Commercial Banks;
C) Tourist Department of Government of Bangladesh
D) None of these
55. When a banker accepts the securities for safe custody, the relationship between a banker and a
customer is that of -
A) a debtor and a creditor;
B) trustee and beneficiary;
C) principal and agent
D) None of these
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56. A right of appropriation first lies with the -

A) debtor;
B) creditor;
C) court;
D) None of these
57. The period of limitation in case of deposits with bankers begins from the date on which -
A) deposit was made;
B) deposit matures;
C) date of demand for payment by the customer;
D) None of these
58. The customer is one who -

A) frequently visits the bank;
B) has an account with bank;
C) intends to have an account with the Bank;
D) None of these
59. The banker is entitled to exercise right of lien in respect of the following -
A) Securities received for safe custody;
B) Bills under collection;
C) Dividend Warrants paid to the bank under a mandate;
D) None of these
60. A Garnishee Order is served on A and B jointly. They maintain a joint as well as individual
accounts with the Bank. The order shall attach -
A) only the joint account of A & B;
B) only the individual accounts of A & B;
C) the joint as well as the individual accounts of A & B;
D) None of these
61. Cancellation of crossing can be done by -

A. holder of the cheque;
B. payee of the cheque;
C. drawer of the cheque;
D. None of these
62. Pay Order is issued by the banker for -

A. local payments;
B. inter state payments;
C. foreign payment;
D. None of these
63. The upper limit of denomination of a stock invest is -

A. Tk. 5,000.00;
B. Tk. 10,000.00;
C. Nil;
D. None of these
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64. Travellers Cheques are issued in -
A. single name, (not in joint names or names or clubs, societies and companies etc.);
B. joint names;
C. single as well as in joint names;
D. None of these
65. The drawee banker of a Demand Draft has received intimation of the loss of the draft from the
purchaser. The banker should -
A. stop the payment;
B. exercise caution;
C. refuse to accept the notice, and
D. issue a duplicate draft.
66. A Traveller’s Cheque is valid for a period of -

A. three months from date of issue;
B. six months from date of issue;
C. three years from date of issue;
D. unlimited time
67. A customer requests for issue of a bearer demand draft. The banker should -
A. strike off the word ‘order’ and should put the word ‘bearer’ on the draft;
B. request the customer to go to the Head Office;
C. refuse to issue the draft;
D. None of these.
68. A and B have jointly hired a locker under “Either or Survivor” clause. A dies. The bank should -
A. permit B to operate the locker;
B. seal the locker and open it only in the presence of B and A’s legal representative;
C. permit operation by B and legal representative of A jointly;
D. not have allowed operation of the locker under “Either or Survivor” clause.
69. When the customer is operating the locker -

A. the banker should remain with the customer in the safe room;
B. the banker should not remain with the customer in the safe room;
C. no other person should be present in the safe room;
D. None of these
70. The customer when depositing or taking out articles from the safe deposit locker should -
A. declare the value to the banker;
B. declare the items to the banker;
C. show the items to the banker;
D. not be required to do any of the above.
71. Merchant banking includes -

A. managing issue of shares;
B. opening branches in mandis or bazars;
C. financing intermediary business;
D. None of these
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72. While encashing a traveller’s cheque, the payee is identified by -
A. the payee’s passport;
B. introduction from an existing customer;
C. introduction letter from the issuing bank;
D. signature of the payee on the cheque
73. In disclosed factoring -

A. the name of supplier is mentioned in the sale invoice;
B. the name of buyer is mentioned in the sale invoice;
C. the name of the factor (factor means financial institution) is mentioned in the sale invoice;
D. the name of the financing banker is mentioned in the sale invoice.
74. No interest is paid by the banks on -

A. Savings deposit account
B. Current deposit account
C. Fixed deposit account
75. The scheme of insurance of bank’s deposits provides insurance cover to every depositor to the
extent of -
A. Tk. 1,00,000.00;
B. Tk. 30,000.00
C. Tk. 50,000.00
76. The scheme under which the depositor is required to deposit a fixed amount every month for a
period selected by him is known as -
A. Current Deposit Scheme;
B. Savings Bank Deposit Scheme;
C. Recurring Deposit Scheme and
D. Fixed Deposit Scheme
77. The bankers do not insist upon succession certificate where amount to the credit of deceased
depositor does not exceed -
A. Tk. 25,000.00
B. Tk. 50,000.00
C. Tk. 10,000.00
78. Garnishee order is an order issued by a competent court or authority ordering the debtor -
A. To pay the debt to a specific creditor only;
B. Not to pay the debt at all to anybody;
C. To pay only to the court or the competent authority
D. None of the above
79. A minor can open and operate an account in his own name if he has at least attained the age of -
A. 12 years;
B. 16 years;
C. 15 years;
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80. The person appointed to operate the account after his death by the deceased himself before his
death is called -
A. Executor;
B. Administrator;
C. Attorney
81. A joint account can be opened by the banker on receipt of application signed by -
A. majority of the joint account holders;
B. all joint account holders;
C. any joint account holder
82. A minor cannot -

A. accept a bill;
B. draw a bill; but minor able to draw, endorse a bill.
C. endorse a cheque
83. A bank maintains an account in the names of A & B payable jointly. On the death of A, the
balance in the account is payable to -
A. B;
B. A’s legal representative;
C. B and A’s legal representative in equal proportion;
D. B and A’s legal representative jointly.
84. The object(s) for which a company has been formed, is/are found (in terms of Bangladeshi
Companies Act) in -
A. Articles of Association;
B. Certificate of Incorporation;
C. Certificate of Commencement;
D. None of the above, (it should be Memorandum of Association).
85. The limitation period in case of a mortgage of immovable property is -

A. 3 years;
B. 10 years;
C. 12 years;
86. Notice of assignment is required in case of advances against -

A. Life policies;
B. Motor vehicles;
C. Shares;
87. Continuing security clause is inserted in case of -

A. term loans;
B. cash credits; (only for Cash Credit, Overdraft or bill discounting)
C. mortgage loans;
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88. The end-use of funds can reasonably be ensured in case of -

A. term loans;
B. cash credits;
C. bills discounted and purchased;
89. All goods should be physically checked at least once in -

A. a month;
B. 6 month;
C. a year;
90. In a letter of credit – backed mechanism, the Advising Bank’s responsibility is to -

A. inform issuing Bank as to whom to issue the letter of credit;
B. advise the buyer the despatch of documents by the seller;
C. inform the beneficiary/ seller about the letter of credit;
91. In terms of UCPDC-600, in absence of any indication in the Letter of Credit, it will be treated as -
A. Revocable Letter of Credit;
B. Irrevocable Letter of Credit;
C. Not a Letter of Credit;
D. Cancelled Agreement.
92. When in a letter of credit the confirming bank confirms the credit, it -
A. does not take any liability;
B. undertakes to make timely delivery of the documents;
C. undertakes on its part the liability under the L/C;
93. In a situation of anticipated depreciation of home currency vis-a-vis dollar, an importer who has
invoiced the consignment in dollar should -
A. go in for forward contract;
B. not go in for forward contract;
C. should cancel forward taken earlier;
94. Liquid assets include -

A. cash in hand and balances with other banks;
B. investments in shares and stocks;
C. loans and advances;
95. In case of pledge, the possession of the security is with -

A. the debtor;
B. the creditor (bank);
C. the third party;
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96. A floating charge means -
A. a charge of the assets of a company which is being floated;
B. a charge on the shares of a company;
C. a charge on the current assets of the company which are constantly changing;
97. In case of hypothecation, the banker has -

A. the possession of goods;
B. right to sell the goods;
C. a specific interest in the goods;
D. None of the above rights
98. In case of hypothecation, insurance charge for the goods are borne by -
A. the borrower;
B. the bank;
C. the borrower and the bank jointly;
D. None, since no insurance is required.
99. In case of default by the borrower, the banker can sell the pledged goods -
A. immediately;
B. after issuing notice to the borrower;
C. after obtaining court’s order;
D. with the consent of the borrower.
100. Pledge can be created by -

A. actual delivery;
B. constructive delivery;
C. symbolic delivery;
D. any of the above methods.
101. The Letter of Continuity should be taken in the case of -

A. advances to companies;
B. Overdraft or Cash Credit Account;
C. time barred advances;
D. accounts of the deceased borrowers.
102. Mortgage other than by way of deposits of title deeds should be registered with -
A. the Sub-Register;
B. the Register of Companies;
C. the Register of Co-operative Societies;
D. Registrar of Firms.
103. The best option of charge to finance a car, for personal use by an individual, by a bank would be
-
A. Pledge;
B. Mortgage;
C. Hypothecation;
D. None of the above.
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104. For creating charge on work-in-process of a borrowing unit, the most appropriate charge will be
-
A. Hypothecation;
B. Pledge;
C. Mortgage;
105. The right to retain goods or property of a debtor for the debt is known as -
A. Set-off;
B. Lien;
C. Appropriation;
106. The limitation period for filing of suit for sale of mortgaged property is -
A. 3 years;
B. 7 years;
C. 10 years;
D. 12 years.
107. Stock Exchange Securities do not include -

A. Debenture of Companies;
B. Bonds issued by Port Trusts;
C. Government Promissory Notes;
D. Participation Certificates.
108. A bill of lading is -

A. a negotiable instrument;
B. quasi – negotiable instrument;
C. a non – negotiable instrument;
D. non – transferable instrument.
109. A life policy of which the wife of the borrower is the nominees is offered as a security for advance
in order to get the assignment in favour of the bank -
A. the wife should join in the execution of assignment;
B. the wife should execute a separate letter of consent;
C. the wife should be advised by the bank of assignment;
D. nothing from the wife is necessary.
110. Commercial Banks provide credit only to -

A. Trade and Industry;
B. Agriculture and Trade;
C. Trade, Agriculture and Industry;
111. Medium Term Credit needs are for a period between -

A. 1 to 5 years;
B. 5 to 10 years;
C. more than 10 years;
D. None of the above.777
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112. The term gross working capital is used for -
A. total current assets;
B. total of current assets and current liabilities ;
C. current assets – current liabilities;
113. Discuss whether either of the following is a promissory note -

E) A promises to pay the bearer the sum of Tk. 1000.00 six months after date.
F) A promises to pay B Tk. 500.00 one month after C’s death.
Ans. (a) No. A promissory note cannot be payable to a bearer on account of Section 31 of the Bangladesh
Bank Act. Moreover, it is not in the proper form.
(b) No. The instrument is not in the proper form and it has not been signed by the maker.
114. Is Bangladesh Bank a Schedule Bank?

(A) No, it is the Central Bank of Bangladesh.
(B) Yes, but exempted from keeping Liquidity like commercial banks by the Bank Companies Act-
1991
(C) No, it is the Central Bank Established under Negotiable Instrument Act-l 881
115. One of the Differences between an Investment Company and a Bank is that a Bank:
(A) Can accept deposit and also borrow money but an investment Company can accept deposit but
can not borrow money.
(B) Can accept deposit but can not borrow money whereas an Investment Company can not accept
deposit.
(C) Can accept deposit but an investment Company can not accept deposit.
116. IFIC Bank limited uses the word 'Limited' after its name because:
(A) Liability of the Bank to its depositors is limited to the extent of their amount deposited.
(B) Liability of the shareholders of the Bank is limited to the extent of the face value of the
shares and writing of the word 'Limited' after its name is compulsory under the Companies
Act.
(C) Liability of all the Officers of the Bank is limited and defined by the Board of Directors as per
Companies Act
117. In Case of Safe custody of valuables, the Banker enters into a relationship with the Customer.
In this case the Banker is:
(A) Debtor / Trustee.
(B) Pledged /Trustee
(C) Bailee / Trustee.
118. 'Shapla Traders', a Proprietary concern, approaches you to open a Savings account. Will you
open the account?
(A) Yes, if it is for trading purposes.
(B) Yes, if it is for non-trading purposes.
(C) No, under no circumstances.
119. A publicity traded Company approaches you to open an account. Among other documents, the
following two documents are necessary to ascertain whether the Company is legally created
entity and is working:
(A) Memorandum of Association and Articles of Association.
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(B) Certificate of Incorporation and Memorandum of Association.
(C) Certificate of Incorporation and Certificate of Commencement.
120. Laws governing day-to-day transactions of a bank are contained in:
(A) Negotiable Instrument Act-1881.
(B) Bank Companies Act-1991.
(C) N.I. Act.-1881 and Bank Companies Act.-1991.
121. In Currency note a "Promissory Note"?

(A) Yes, because the Central Bank issues it with a Promise to Pay.
(B) Yes, because the Government issues it with a Promise to Pay.
(C) No, because N.I. Act does not cover it as a "Promissory Note."
122. A Bill of Exchange is payable:

(A) Only on Demand or at a fixed time.
(B) On Demand or at a fixed or determinable future time.
(C) Only at a fixed time or determinable future time.
123. Who is the “Payee” of Cheque?
(A) The person named in Cheque to whom or to whose order the money is to pay is the
"Payee".
(B) The Person receiving payment of a cheque is the "Payee".
(C) "Payee" of a cheque is the person who presents it before a bank for payment.
124. "Payment in due course" must be:

(A) Payment according to apparent tenor and in good faith.
(B) Payment according to apparent tenor and in good faith and without negligence.
(C) Payment in good faith and without negligence.
125. An authorized police officer from Anti-corruption Bureau approaches you for production of
Bank Document in connection with one of your customers. Can you legally refuse to accede to
his request?
(A)Yes, Bank is legally bound to maintain secrecy of the account of any customer, except to the
court
(B)No, authorized Police Officer can ask for any bank document.
(C)Yes, because violation of secrecy clause as given in N.I. Act will constitute negligence on the part
of the Banker.
126. Secrecy of customers' accounts maintained with the bank is maintained because:
(A) It is a generally recognized relationship between banker and customer following court
cases.
(B) It is required under Bank Companies Act-1991.
(C) It is required under N.I. Act-1881.
127. Fixed Deposit Receipts are:

(A)Assignable
(B)Negotiable
(C)Transferable
128. Any Sale of Credit may be secured by:

(A)Bill of Exchange or Cheque or Cash.
(B)Cheque or Promissory Note or Currency Note.
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(C) Cheque or Bill of Exchange or Promissory Note.
129. Can the Payment of a draft be countermanded?

(A)Yes, as it can be crossed like a cheque, so payment also may be countermanded.
(B)No, in this respect draft is different from cheque.
(C)Yes, because all rules regarding cheque are applicable to drafts also.
130. "Account Payee" crossing signifies that:

(A) A banker should collect it for the payee only.
(B) A banker must collect it through any account simply.
(C) A banker must collect it as a holder for value.
131. Can a stale Cheque be paid?

(A)May be paid after confirmation of the drawer.
(B)May be paid without confirmation of the drawer but after proper inquiry.
(C)Must not be paid under any circumstances.
132. Before a Cheque is paid, the banker should ensure that all the endorsements are:
(A)Genuine to get statutory protection.
(B)Regular and genuine to get statutory protection.
(C)Regular to get statutory protection.
133. Do the 'Pay orders' get statutory protection in case of collection?

(A) Yes (B) No (C) Partly
134. Which one of the following is not material alteration?

(A) Additions of words like 'not negotiable' to a crossed Cheque.
(B) Converting order Cheque into bearer.
(C) Removal of crossing
135. Can a crossed Cheque be paid across the counter?

(A)Yes, if Manager approves
(B)Yes, if it is regularly endorsed
(C)No, banker will be liable to the true owner for any loss due to such payment.
136. On receipt of notice of customer's insanity would you stop payment of a cheque?
(A)No, because customer signed it before insanity.
(B)Yes, insanity terminates contract.
(C) No, because notice of insanity is not enough to dishonour a cheque.
137. In case of collection of cheques, the collecting banker gets statutory protection for only:
(A)Crossed cheques
(B)Order cheques
(C)All kinds of cheques
138. A collecting banker can collect a cheque either as:

(A) Agent or principal
(B) Trustee or holder for value
(C) Agent or holder for value
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139. In book-keeping, there are three kinds of accounts and they are:
(A) Personal, real and nominal
(B) Cash, clearing and transfer
(C) Asset, liability and contra
140. The rules for debiting and crediting are called:

(A) Golden theory *
(B) Double entry system **
(C) Single entry system
141. You have incurred an expenditure worth Tk.50/- on account of entertainment but have wrongly
debited the account by Tk.500/-. To correct the mistake, the following entry is required:
(A) Debit cash and credit entertainment
(B) Debit entertainment and credit cash
(C) Debit cash and credit miscellaneous
142. Share holders equity as shown in our bank's annual report is equivalent to:
(A) Authorized capital plus reserves
(B) Paid up capital plus deposits
(C) Paid up capital plus reserves and surplus
143. Statutory reserve as shown under the head: Reserve fund and other reserves: in our Bank's balance
sheet is:
(A) A liability
(B) An asset
(C) Contra item
144. IFIC Bank limited has been incorporated as a banking company under:
(A)Banking Companies Order, 1962
(B)Companies Act-1913
(C)Special Act of the Parliament
145. The Country where there is no single Central Bank but federation of central banks work as the central
bank is:
(A)USSR
(B)UK
(C)USA
146. Money consists of the following:
(A)Currency outside banks plus deposits
(B)Currency outside banks plus deposits plus cheques
(C)Cheques plus bills plus deposits
147. Currently scheduled commercial banks are required to maintain:

(A)Liquidity equivalent to 18 per cent of total deposit liabilities
(B)Liquidity equivalent to 25 per cent of time deposit liabilities
(C)Liquidity equivalent to 25 per cent of all liabilities including deposits.
148. A Joint Stock Company wants to open a savings bank account for placing their provident fund, will
you allow it?
(A) No, Joint Stock Companies are not allowed to open savings bank account under any
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circumstances
(B) No, Joint Stock Companies are required to maintain current account only under
Companies Act.
(C)Yes, Joint Stock Companies can open savings bank account for non-trading
purpose
149. Where instructions are given by a customer to his banker that a part of his money lying in his account
be forwarded to another bank to meet a bill payable by him and the banker sends the money as
directed, the banker acts as:
(A)Trustee
(B)Agent
(C)Pledgee
150. Post-dated Cheques are not paid by a banker because:

(A) Banker may face problems in future
(B) It does not constitute 'Payment in due course'
(C) It is the practice of the Banks
151. FDR is:

(A)Not negotiable
(B)Negotiable by endorsement and delivery
(C)Negotiable by delivery
152. A FDR is the names of husband and wife. Husband approaches you to incorporate his brother's name
in the FDR:
(A)It can not be done unless signed also by wife
(B)It can not be done, since no change in FDR is allowed
(C)It can be done because husband in this case has the right to do under law of
inheritance
153. Like Savings or Current accounts, Law of Limitation operates. In case of fixed deposits from the date
the demand is made for payment:
(A)True, because all deposits stand on the same footing so far as Law of Limitations is
concerned
(B)False, because in case of Fixed Deposits limitation would start running from the date it, is due.
Law of limitation starts from the date of demand.
(C)False, because fixed Deposits are not accounts, hence Law of Limitation is not
applicable .
154. 'Payment in due course' is the
(A) Payment to the last holder of the cheque
(B) Payment according to apparent tenor in good faith and without negligence
(C) Payment according to apparent tenor
155. Should a Customer's cheque be honoured after receiving the death news in the daily newspaper?
(A)Yes, newspaper report is not binding on the banker
(B)Yes, without formal notice, banker can not dishonour the cheque
(C)No, newspaper reports are treated as constructive notice pertaining to death of a customer
156. Where the banker pays cash before clearing of the cheque, he becomes:
(A)Holder in due course
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(B)Trustee
(C)Holder for value
157. Statutory protection has been given to the collecting banker:

(A)Only for crossed cheques
(B)Only for specially crossed cheques
(C)Both for open and crossed cheque
158. 'Not negotiable' cheque is:

(A) Neither transferable nor negotiable
(B) Transferable but not negotiable
(C) Transferable but not negotiability is subject to a caution about title
159. Is banker's action in returning and not collecting a cheque crossed to two banks legally justified?
(A)No, because bank can collect a cheque crossed to two banks without any legal problem
(B)Yes, unless the second banker is acting only as an agent of the first banker
(C)Yes, payment of a cheque crossed to two banks is legally barred by N.I. Act.
160. Payment of a Demand Draft:

(A)Can be countermanded since drafts and cheques are treated alike in case of crossing
(B)Can be countermanded since drafts are negotiable instruments
(C)Can not be countermanded since it is beneficiary's property.
161. One of the differences between promissory notes and cheques is:
(A)A promissory note contains a promise to pay and a cheque contains an order to pay
(B)A promissory note is always payable to bearer and a cheque contains an order to pay
(C)A promissory note is always crossed and a cheque may be crossed or uncrossed
162. Holder in due course of stolen cheque:

(A)Gets perfect title to the cheque
(B)Gets no title because it is stolen
(C)Gets no title because transferor has no title to the cheque
163. One of the two joint account holders dies. The account bears a mandate that it may be operated by
either of them. A cheque is presented after the death of one of them:
(A)Cheque may be paid since mandate covers
(B)Cheque may be paid since it is the practice of the banks
(C)No because death terminates the authority in this case
164. The action of a creditor banker in taking into account sums owing by him to the debtor in order to
arrive at the net sum is called:
(A)Set off
(B)Assignment
(C)Lien
165. In a contract of guarantee, the liability of the guarantor is:

(A)Always primary
(B)Always tertiary
(C)Always secondary
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166. "I promise to pay B Tk.5,000/- and all other sums which shall be due to him". Is it a promissory note?
(A) Yes
(B) No
(C) Partly
167. " Pay to A (without 'or order' / 'or bearer')" cheque is payable to:
(A) A only
(B) A or his order
(C) A or his agent only
168. In case of “Account payee" cheques payment will be made to:

(A) Account of the payee named in the cheque
(B) Since it does not prohibit negotiability it may be made to anybody's account maintaining a bank
account
(C) Neither of the above is true
169. When an asset is to be depreciated, the book-keeping entry will be:

(A) Debit cash Alc and credit asset A/c
(B) Debit depreciation A/c and credit asset A/c
(C) Debit asset A/c and credit depreciation A/c
170. Total assets minus outside liabilities is:

(A) Working capital
(B) Profit
(C) Capital
171. Money lent at call and short Notice appears:

A) In liability side of the balance sheet
B) In asset side of the Balance sheet
C) In both sides since it is a contra
172. Asset and Liability sides of the balance sheet of IFIC Bank are equal:
(A) Because Accounts of the Bank are balanced everyday
(B) Because this is prepared on the basis of Trial balance which always agrees
(C) Because it prepared under double entry system of book -keeping
173. In case of interest paid on deposits in cash book-keeping entries will be:
(A) Cash A/c debit interest paid credited
(B) Interest debited, party's a/c credited
C) Interest debited, cash a/c credited
174. As per Banking Company Act. 1991 "Banking Company" means:

(A) Any Company which transacts the business of Banking in Bangladesh and includes
a new Bank and a specialized Bank
(B) Any Company which transacts the business of Banking in Bangladesh and a Co-
operative Bank
175. Government owns 35% share:

(A) In all the private Commercial Banks of Bangladesh
(B) Only in IFIC Bank Limited
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176. IFIC Bank Limited topped the list of 500 leading Banks in Asia in respect of:
(A) Highest Equity Return
(B) Highest Deposits
177. The Name of the Central Bank of India is:

(A) State Bank of India (B) Reserve Bank of India
178. Demand Draft issued by one Branch of a Bank on its another Branch is :
(A) A Negotiable Instrument
(B) Not a Negotiable Instrument
179. Crossing of Cheque is:

(A) A material part of a cheque
(B) A material alteration of a cheque
180. A collecting Banker gets protection for collection of cheques under Section 131 of the N.I. Act if
the collecting Banker can satisfy the following conditions:
A) The cheque is CROSSED, collected for a CUSTOMER, in GOOD FAITH & WITHOUT
NEGLIGENCE
(B) The cheque is CROSSED, collected for a STRANGER & in GOOD FAITH
181. Where a cheque is crossed specially to more than one Banker except when crossed to an Agent for
collection:
A) The Banker on whom the cheque is drawn shall make payment
(B) The Banker on whom the cheque is drawn shall refuse payment
182. A valuable customer of your branch who maintain average balance of Tk.50.00 lac in his account
requests you over Trunk-call for Telegraphic Transfer of Tk. 8.00 Lacs by debiting his account to a
third party:
(A) You will make the Telegraphic Transfer
(B) You will not comply with the instruction
183. The account of a customer of your Branch became undesirable by unsatisfactory operation. In spite of
repeated requests to him to close the account, he does not pay heed of your requests. In such a
situation:
(A) You can close the account by giving sufficient notice in writing
(B) The account can not be closed by you even by giving sufficient notice in writing
184. At the time opening a new account introduction is essentially required:

(A) Form a customer of the Bank
(B) Form a Customer of the Bank or from a person acceptable to the Bank
185. A Demand Draft presented to your Bank for Payment:

(A) You will make payment to the presenter over the counter without any question
(B) You will make payment upon identification of the payee
186. Negotiable instruments payable to bearer is negotiated by delivery of the Instrument and negotiable
Instruments payable to order is negotiated by endorsement and delivery
(A) Yes
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(B) No
187. Payment of a Cheque in DUE COURSE discharges the liability of the paying banker:
(A) No
(B) Yes
188. A Cheque crossed “Not Negotiable” does not restrict negotiability of the Cheque but when a Cheque
is crossed “Account Payee only” it shall cease to be Negotiable:
(A) Yes
(B) No
189. A Cheque is not invalid only that it is Anti-Dated or Post-Dated provided that the Anti-Dating or
Post-Dating does not involve any illegal or fraudulent purpose or transaction
(A) Yes
(B) No
190. In case of Negotiable Instrument where amount is stated differently in figures and in words:
(A) Payment should not made
(B) Amount stated in words may be paid
191. UNCLEARED EFFECTS against which no drawing has been allowed to the Customer can
be attached under the "Garnishee Order" :
(A) No
(B) Yes
192. A & B maintain a Joint account at your Branch. By Mandate each is authorized to operate the account
Singly. Both of them in dispute and each of them instructed the Bank not to honour the Signature of
the other. In such a situation:
(A) You will allow operation because by mandate each of them is authorized to operate the account
singly.
(B You will stop operation pending settlement of the dispute and receipt of the fresh instruction
signed by both of them on settlement of the dispute.
193. A Cheque is always payable on Demand / presentment but a Promissory Note or a Bill of
Exchange may be payable at sight / presentment or at a determinable future date:
(A) Yes
(B) No
194. IFIC Bank Limited follows the "Double Entry System" in maintaining its Books of
Accounts:
(A) Yes
(B) No
195. To effect the payment for expenditure or refund of any amount on amount on behalf of the Bank
generally IFIC Bank Ltd., uses the following instruments:
(A) Demand Drafts
(B) Pay Orders
196. Inter Branch Transactions are settled through the IFIC General Account and as such:
(A) Inter Branch Transactions must be reconciled at the earliest to avoid complications and risks
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(B) Inter Branch Transactions need not be reconciled because records of the transactions are already
maintained by the Branches
197. Balance sheet is a Statement of Assets and Liabilities and in the Balance Sheet:
(A) Net Profit (after tax) is shown on the asset Side and Net Loss on the Liability Side
(B) Net Profit (after tax) is shown on the Liability Side and Net Loss on the Asset Side
198. General Ledger is the main Book of account of the Bank in watch:
(A) Main heads or Controlling heads of accounts are maintained
(B) Total Cash Receipts and total Cash Payments are maintained
199. Reserves are created by IFIC Bank Ltd. Out of its

(A) Profit
(B) Provisions
200. As per Bank Companies Act. 1991, Banking Means:

(A) Accepting Deposits only
(B) Accepting Deposits and making payments
(C) Accepting, for the purpose of lending or investment, deposits of money from the public,
repayable on demand or otherwise, and withdrawable by Cheque, draft, and order or
otherwise.
201. A Banking Company requires a license from the Central Bank to do Banking under:
(A) Bangladesh Bank (Nationalization) order, 1972
(B) Bank Companies Act. 1991
(C) Bangladesh order, 1972
202. A Co-operative Bank is established under:

A. Bank Companies Act. 1991
B. Co-operative Societies Act. 1985
C. Companies Act. 1994
203. Before becoming a Commercial Bank in 1983, IFIC was a company registered with
A. Registrar of Joint Stock Companies
B. Controller of Capital Issues
C. Registrar of Co-operative Societies
204. IFIC Bank Ltd. Has no Joint Venture in:

A. Oman
B. UAE
205. IFIC Bank has a sound equity base and is maintaining provision in excess of prescribed requirements
A. True
B. False
C. Partly True
206. Which one of the following is not a Central Bank:

A. Saudi Arabian Monetary Agency
B. State Bank of Pakistan
25
C. State Bank of India
207. How many scheduled banks are now operating in Bangladesh:

A. 62
B. 49
C. 48
208. The Current Bank Rate is: (2008)

A. 7 %
B. 6 %
C. 5 %
209. Out of 70 Branches of IFIC Bank Ltd. The numbers of Branches dealing in Foreign
Exchange as AD are:
A. 17
B. 19
C. 22
210. Which one of the following is not a negotiable instrument?

A. FDR
B. Bill of Exchange
C. Demand Draft
211. Under which crossing, further negotiation is restricted:

A. & CO
B. A/C Payee not negotiable
C. A/C Payment Negotiable
212. Negotiability of an instrument means:

A. The transferee of the instrument gets a better title
B. The transferee gets title as a holder in due course
C. The transferee gets the same title as the transferor
213. A paying Banker gets legal protection under Sec. 129 of Negotiable Instruments Act, 1881
if:
A. A crossed Cheque is paid to the holder over the counter
B. The payment is in due course
C. The payment is made to the bearer who has found a lost Cheque
214. Who can cancel a crossing on the Cheque:

A. Drawee
B. Drawer of the cheque.
C. Beneficiary
215. A Person has come to the bank to open a savings bank a/c for deposit of Tk.50,000/- but he
has no one to introduce. What would you do-
A. You will not open his a/c without introduction
B. You will open the a/c and obtain the introduction later on
C. You will introduce and open the a/c
216. Liability of an introducer while opening an account is limited to-

26
(A) All Liability of a/c holder
(B) Personification of the a/c holder
(C) All fraudulent transactions in the a/c
217. An account holder requests you over telephone to stop payment of a cheque already issued
by him. What will you do if the cheque is presented:
(A) You will make the payment of the cheque
(B) You will give objection memo with "Refer to drawer" remarks
(C) None of the above
218. You have received a "Garnishee Order" from the Court attaching a client's a/c and at the same time
you have receive a cheque through clearing. What would you do-?
(A) You will make payment of the cheque
(B) You will not make payment of cheque
219. X and Y are Joint a/c holders under a mandate to operate the a/c singly by both of them. Because of
dispute among them, 'X' instructed the bank not to honour cheque issued by 'Y' on the joint a/c. What
will you do-
(A) You will not make payment of any cheque
(B) You will make payment of cheque issued by 'X' only.
(C) You will not make payment of cheque issued by ‘Y’.
220. When a Locker is given to a customer on hire, what relationship is established between the banker
and the customer?
(A) Bailer and Bailee
(B) Agent and Principal
(C) Lessor and lessee
221. Interest on Savings ale is calculated annually on the basis of

(A) 360 days
(B) 365 days
(C) 364 days
222. Bank account are treated as dormant and transferred to dormant a/c ledger if there is no transaction in
the a/c's for
(A) 3 years
(B) 5 years
(C) 1 year
223. A DD issued to a purchaser was lost and he has requested for a duplicate. What will you do-
(A) Will issue a duplicate on getting confirmation from drawee branch
(B) Will issue a duplicate with an indemnity bond from the purchaser and confirmation from
drawee branch.
(C) Will not issue under any circumstances
111. A Public Limited company wants to open a current a/c with your branch. Which documents you
require with the application from:
(A) Certificate copies of Memorandum and Articles of Association and Certificate of Incorporation
(B) Documents mentioned at 'A' and certificate of commencement of business
27
(C) Documents mentioned at 'B' and resolution of the Board with list of Directors
TEST OF BANKING KNOWLEDGE

LOANS AND ADVANCES
01. One of the differences between overdraft and cash credit is:
(A) Overdraft is always subject to limit whereas cash credit has no limit
(B) Overdraft is allowed on any kinds of account whereas cash credit is allowed on current account.
(C) Overdraft is allowed on current account whereas cash credit is a separate account.
02. Documentary Bill is a bill with:

(A) Documents of title to goods.
(B) Documents of signature of the drawer.
(C) Documents of signatures of both drawer and drawee.
03. While giving advances to a partnership firm, without any partnership deed, banks prefer to
have the following documents signed by all the partners:
(A) Letter of partnership and letter of Guarantee.
(B) Letter of partnership and letter of authority.
(C) Letter of authority and letter of indemnity
04. Can a non-trading public company borrow money from a bank?

(A) No, non-trading company can not borrow money.
(B) Yes; because non-trading company has implied power to borrow.
(C) No, unless Memorandum of the company has given the power.
05. Lien, one of the modes of charging securities, is the right to retain:
(A) Goods and securities until debt is satisfied
(B) Property mortgaged to the bank.
(C) Both property and goods and securities.
06. When a manufacturer wants to borrow money on the security of raw materials or stock-in-
process which are in the process of being manufactured into finished products, bank prefers:
(A) Lien of goods.
(B) Hypothecation of goods.
(C) Pledge of goods.
07. Contract Act-1872 has defined pledge as:

(A) A charge against property for an amount of debt where neither ownership nor possession is
passed on to the creditor.
(B) The right to retain a particular commodity in respect of which the debt arose.
(C) A bailment of goods as security for payment of debt or performance of a promise.
08. Mortgage, a mode of charging security, has been defined in:

(A) Transfer of Property Act-1882.
(B) Sale of Goods Act-1876.
(C) N.I. Act-1876.
09. Will you give loan against a Fixed Deposit Receipt jointly held by two persons with the
instructions: payable to either or survivor?
28
(A) No, because either or survivor clause bars the bank
(B) No, because FDR is in the names of two persons
(C) No, unless necessary documents are signed by both the persons names of whom are
appearing on the FDR.
10. Can a bank give advance against documents of title to goods?

(A) Yes, because pledge of documents is tantamount to pledge of goods.
(B) No, because documents themselves are no security.
(C) None of the above two.
11. Goods as security under Hypothecation can:

(A) Be brought under pledge by a bank, if desired.
(B) Can never be brought under pledge since it is violation of contract.
(C) Can be brought under pledge if customers consents.
12. While giving loans against security of shares, one of the points a bank ensures that:
(A) The shares are partly paid because these are safe
(B) The shares are fully paid but not quoted in stock exchange.
(C) The shares are fully paid and quoted in stock exchange.
13. Can a minor be sanctioned an overdraft secured by guarantee:

(A) Yes, guarantee is the security.
(B) No, guarantee is not enforceable as minor is the borrower
(C) Yes, minor can borrow himself and bind himself with the bank
14. Can Public Limited Company give guarantee?

(A) Yes, if its Memorandum permits
(B) Yes, if Registrar of Joint Stock Companies gives permission in writing
(C) Yes, Controller of Capital Issues permits
15. Mr. White, a customer of your Branch approaches you for a loan facility against FDR for Tk.
50,000 of another Bank issued in his name. Will you accept it as security and give loan?
(A) Yes, FDR is equivalent to money, loan may be given.
(B) Yes, loan may be given provided he encashes the FDR and opens a savings account with us
(C) No, FDR of another Bank is not a good security and invites a lot of problems. Normally in this
case loan should not be given.
16. Letter of Continuity is taken in case of:

(A) Cash Credit or Overdraft.
(B) Pledge or Hypothecation.
(C) Term Loan.
17. One of the differences between cash credit and overdraft is:
(A) There is no limit in case of cash credit where there is limit in case of overdraft
(B) Drawing Power in case of cash credit is limited while in case of overdraft it is not limited
(C) Cash Credit is a separate account and Overdraft is allowed on an existing current account.
18. In case of Pledge, delivery of goods to the banker:

(A) May be actual or constructive.
(B) Must be actual.
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(C) Must be constructive.
19. In a contract of guarantee, there are three parties. They are:

(A) Promisor / Promisee / guarantee.
(B) Promisee / guarantee / contractor.
(C) Debtor / creditor / guarantor.
20. Banks grant advances to the borrowers for purchase of vehicles against creation of the
following charge:
(A) Hypothecation
(B) Pledge
(C) Mortgage
21. Cash Credit (CC) is a separate account having' Validity Period' and 'limit' within which it is to
be operated. It is not, however, subject to 'Drawing Power': 1994
(A) True.
(B) False.
(C) Neither A nor B
22. Which one of the following statement is true?

(A) Bank can easily sanction any amount of loan to a company with adequate security
(B) Bank can sanction as loan only 15% of its total capital to a single borrower
(C) Bank can make loans and advances against the security of its own share only when face
value of such shares are adequate to cover full amount of loan
23. Charging Securities means:

(A) Becoming owner of the security.
(B) Making security available as a cover for the said advance
(C) Selling / liquidating of the securities for adjustment of the loan without intimation/approval of
any other parties.
24. Pledge as a method of charging securities are defined in:

(A) Transfer of Property Act
(B) Contract Act -1872
(C) Sale of goods Act
25. In case of working capital finance to a public limited company against hypothecation of raw
materials, Bank always prefer to register the charges with registrar, Joint Stock Companies to:
(A) Ensure timely repayment of the loan
(B) Make effective supervision and to avoid fund diversion
(C) Become secured creditor
26. Can a bank accept 'Indemnity' from the borrower as collateral security for an advance?
(A) Yes, since there is no legal bar
(B) No, since such indemnity is immaterial
(C) May accept occasionally depending on the nature of advance and the status of the borrower
27. Banks can not directly engage in buying, selling, bartering of goods. On non-payment of the
loan by a borrower, bank can sell goods under pledge. His right is given in:
(A) Letter of pledge
30
(B) Companies Act
(C) Neither A nor B
28. Before accepting immovable property as security it is necessary to be sure that it is free from
prior charge. Which one of the following documents will reveal such information?
(A) Original title deed of the property
(B) C.S. & R.S. Khatian
(C) Non encumbrance certificate issued by the Sub-Registrar
29. Banker's right to cancel advance at any time with or without intimation is acknowledged by the
borrower by signing:
(A) D.P. Note
(B) Letter of request
(C) Letter of arrangement
30. An advance or any portion of an advance or interest thereon remaining overdue for one year or
more but less than three years should be classified:
(A) Substandard
(B) Doubtful
(C) Bad & Loss
31. In case of 'Cash Credit' advance:

(A) Both the limit and the drawing power are variable
(B) Limit is fixed but the drawing power is variable
(C) Drawing power is fixed but limit is variable
32. The common modes of creation of charge over the securities against loans and advances are:
(A) Registration, set-off, possession, and power of Attorney
(B) Pledge, Hypothecation, Mortgage, Lien and Assignment
(C) Pledge, Hypothecation, Mortgage and set-off
33. As a Banker which one of the following rules you agree with:
(A) Periodical inspection of godown / stock is necessary in case of pledge but it is not necessary in
case of Hypothecation
(B) Periodical inspection of godown / stock is necessary in case Hypothecation but it is not necessary
in case of Pledge.
(C) Periodical inspection of godown/stock is necessary both in case of pledge & Hypothecation
34. In case of advance to a limited company against hypothecation of stock and equitable mortgage
of property:
(A) Charge must be registered with the Registrar of Joint Stock Companies within specified
time
(B) Registration of charge with the Registrar of Joint Stock Companies is not necessary since
hypothecation document in case of hypothecation of stock and Memorandum of Deposit of Title
Deeds in case of Equitable Mortgage of Property duly signed are obtained.
35. In case of Indemnity and Guarantee:

(A) Liability both under the contract of Indemnity and Contract of Guarantee is Secondary
(B) Liability under the contract of Indemnity is primary and that of under the contract of Guarantee is
Secondary
31
(C) Liability under the contract of Indemnity is Secondary and that of under the contract of Guarantee
is Primary
36. As per Bangladesh Bank BCD circular no. 34 dated 16.11.89 and BCD circular no. 20 dated
27.12.94 and as per instruction of IFIC Bank ADV circular no. 28 dated 23.12.96:
(A) New loans which are overdue for 24 months or more and old loans overdue for 36 or more as on
31.12.96 are to be classified as DOUBTFUL
(B) New loans which are overdue for 24 months or more and old loans overdue for 36 or more as on
31.12.96 are to be classified as BAD & LOSS
37. Advances are of two types viz: "Secured" and "Unsecured". The following advances are
secured advances:
(A) Overdrafts and Cash Credit only
(B) Loans, Overdrafts, Cash Credits and all other advances covered by eligible / approved
securities.
38. Documents required in case of all secured advances are:

(A) Both charge documents and security documents
(B) Only the security documents
39. Reserves are created by IFIC Bank out of:

(A) Profit
(B) Provision
40. Pledge and Hypothecation relate to Movable property and Mortgage relates to Immovable
property
(A) Yes
(B) No
41. Floating charge is a charge over the present and future assets of a Company:
(A) No
(B) Yes
42. Henceforth only classified loans and Advances will be treated as overdue and the borrowers of such
overdue loans and advances will be treated as defaulter:
(A) Yes
(B) No
43. For recovery of stuck-up loans and Advances, Banks can take legal action under:
(A) ARTHA RIN ADALAT AIN 1990 and the INSOLVENCY (Bankruptcy) Act 1997
(B) ARTHA RIN ADALATAIN 1990 only
(C) The INSOLVENCY (Bankruptcy) Act 1997 only
44. LIEN is the right of the creditor to retain possession of the goods and securities owned by the debtor
until the debt due from him to paid. Banker's Lien is a General Lien:
(A) Yes
(B) No
45. A customer of your branch maintains a Current account which is overdrawn to the extent of
Tk.50,000/-. Inspite of repeated request he did not come forward to adjust the overdue amount. You
came to know that he maintains a savings account with the another branch of your Bank in the same
name having a credit balance of Tk. 80,000/- only:
32
(A) You may adjust the overdrawn amount by exercising your "Right of Set- off" on the Credit
balance of the savings account.
(B) You can not exercise the "Right of Set- off" since the savings account is maintained with another
branch of your bank.
46. Principles of sound lending mean:

(A) Safety, Security, Liquidity & Profitability of the fund
(B) Security, Safety, Purchase, Spread & National Interest
(C) Security, Safety, Purchase, Person & Capital
47. Advances are traditionally divided into following categories:

(A) Cash Credit, Overdraft and Loan
(B) Loan, Cash Credit, Overdraft, Bill Purchased & discounting
48. Lending Risk Analysis (LRA) is mandatory in case of Loans and Advances of:
(A) Tk. 50.00 Lac and above
(B) Tk. 10.00 Lac and above
49. Documentation is valid when it is:

(A) Properly executed by the competent parties, correctly stamped, Registered with competent
authority when necessary and not barred by Law of Limitation
(B) Executed by anybody and correctly stamped
(C) Executed properly, correctly stamped, undated & blank
50. How many parties a guarantee has:

(A) Two
(B) Three
51. Bank Credit includes all loans and advances (Cash Credit, Overdraft, PAD/LIM) and also bills
purchased and discounted:
(A) True
(B) False
(C) Partly True
52. One of the principles of lending of the banks is liquidity of funds. Which one you would prefer
against a loan as primary security:
(A) FDR, Merchandise and Securities
(B) Land and Building
(C) Guarantee
53. Cash Credit (CC) is a separate a/c having drawing power and a limit for drawing but no validity
period:
(A) True
(B) False
(C) Partly True
54. Pledge is one of the methods of charging securities against loans and advances and is defined in:
(A) Contract Act -
(B) Transfer of Properties Act
33
(C) Sale of Goods Act
55. Drawing power in a CC account is determined within sanctioned limit on the basis of
(A) Value of existing stock of goods
(B) Value of collateral securities
(C) Credit needs of the borrower
56. Pledge and hypothecation are related to movable properties and mortgage relates to immovable
properties-
(A) True
(B) False
(C) Partly true
57. Classified loans and advances mean:

(A) Loans and advances which are overdue and sticky
(B) Loans and advances the recovery of which is uncertain and against which provision is to be
made
(C) Loans and advances which are considered as loss
58. Loans are classified as loss under existing rules when the overdue period is:
(A) 12 months or more
(B) 24 months or more
(C) 36 months or more
59. Provision for Bad debts is made out of

(A) Income
(B) Profit
(C) Reserve
60. A Bank can sanction loan to a single party upto a maximum amount of
(A) 20 % of its capital
(B) 15 % of its capital
(C) 10 % of its capital
61. Performance of Budget of a branch includes

(A) Target for deposit, advance and income
(B) Target for business and expenditure
(C) Target for business, deposit, advance and profit
62. Rates of interest to be charged against various forms of advances are determined by:
(A) Bank's own policy
(B) As per directives of Bangladesh Bank
(C) Mutual Agreement with the borrower
63. In case of Hypothecation the possession of the merchandise is held with the:
(A) Banker / Lender
(B) Borrower
(C) Negotiator
34
64. The Banker has right to debit any customer's account which has credit balance to adjust any debit
balance in any other account of the same person. This right is called:
(A) Lien
(B) Set-off
(C) Right of redemption
65. Hypothecation is called as:

(A) Fixed charge
(B) Floating charge
66. Letter of disclaimer is taken from:

(A) Borrower
(B) Guarantor
(C) Owner of rented godown / premises
67. "A contract by which one party promises to save the other from the loss caused to him by the conduct
from the promissory himself or by the conduct of a third party" is called
(A) D.P. Note
(B) Guarantee
(C) Indemnity
68. Lien, one of the modes of charging securities, is the right to retain:
(A) Goods and securities until debt is satisfied
(B) Property mortgaged to the bank
(C) Both of above
69. Mortgage, a mode of charging security, has been defined in:

(A) Transfer of Property Act, 1882
(B) Sale of Goods Act, 1876
(C) Negotiable Instruments Act, 1881
70. Will you give loan against a FDR jointly held by two persons with the instructions payable to 'Either
or Survivor'?
(A) No, because either or survivor bars the bank
(B) No, because FOR is in the name of two persons
(C) No, unless both the persons sign necessary documents, names of whom are appearing on the
FDR
71. Can a non-trading Public Limited Company borrow money from a bank?
(A) No, non-trading company can not borrow money
(B) Yes, because non-trading company has implied power to borrow
(C) No, unless Memorandum of Association of the company has given that power
72. In case of goods kept in party's godown the signboard" The goods are pledged with IFIC Bank" is
hanged to:
A) Avoid further charge on the same goods
(B) Make the goods available for sale by the Bank
(C) Advertise for business expansion of the Bank
35
73. In case of loan against gold ornaments the charge should be created by:
(A) Hypothecation
(B) Pledge
(C) Mortgage
74. Cash credit is allowed generally against

(A) Pledge or Hypothecation of goods
(B) Immovable property
(C) Tangible security
75. In case of Hypothecation, the banker customer relationship is:

(A) Baylor -Bailee
(B) Debtor -Creditor
(C) Pledgor -Pledgee
76. In case of contract of mortgage-

(A) Ownership passes to the mortgagee
(B) Ownership is not passed to the mortgagee but legal or equitable interest is transferred
77. Which one of the following statement is correct:

(A) Both cash credit and overdraft advances are granted for business purposes.
(B) Cash credit is granted for business purpose only but overdraft may or may not be for
business purpose
(C) Overdraft is granted for business purpose only but cash credit mayor may not be for business
purpose.
78. Installment basis repayment is allowed in:

(A) Cash credit account
(B) Overdraft account
(C) Loan account
79. Letter of continuity is required for:

(A) Loan
(B) Overdraft
80. In case of transport loan the charge should be created by:

(A) Hypothecation
(B) Pledge
(C) Mortgage
81. The period of limitation for filling a suit for recovery of money lent under a Demand Promissory
Note is:
(A) Three years from the date of execution of the document
(B) Seven years from the date of execution of the document
(C) Twelve years from the date of execution of the document
82. While you are granting loan against Life insurance Policy, the charge should be:
(A) Set -Off
36
(B) Assignment
(C) Lien
83. Sources of fund available for an organization is shown at -------- side of the balance sheet
(A) Asset
(B) Liability
(C) Right
84. For filing suit against a defaulter borrower under 'Insolvency Act' the amount claim of the Creditor(S)
should be at least:
(A) Tk. 3.00 Lac
(B) Tk. 5.00 Lac
(C) Tk. 7.00 Lac
85. As per" Artha Rin Adalat Act, 2003" the bank/debtor should go to the following court for appeal
against the decree:
(A) Supreme Court
(B) District Judge Court
(C) High Court
86. For classification purpose Secured Overdraft falls under the following category:
(A) Demand Loan
(B) Continuous Loan
(C) Term Loan
87. A defaulter borrower may apply to the court to declare him "Insolvent" if he fails to repay loan
amounting not less than:
(A) Tk. 5,00,000/-
(B) Tk. 2,00,000/-
(C) Tk. 20,000/-
88. Project financing decision emphasis’s on

(A) Ability to procure revenue from the project
(B) Volume of production, capacity utilization, etc.
(C) Government policy
89. For financing a project bank selects the following type of advance:
(A) Cash Credit (Hypothecation)
(B) Secured Overdraft
(C) Term Loan
90. The decision of ' Whether interest of a classified loan is to be waived or written off' can be made by"
(A) The Branch Manager on the basis of banker customer relationship
(B) The Board of Directors of the Bank
(C) Bangladesh Bank
91. When a manufacturer wants to borrow money on the security of raw materials or stock-in-process
which are in the process of being manufactured into finished products, bank prefers:
(A) Lien of goods
(B) Hypothecation of goods
(C) Pledge of goods
37
92. Drawing Power in CC (Pledge) facility is calculated on the basis of:

(A) Limit & Stock
(B) Stock & Margin
(C) Stock, Margin & Limit
93. Counter Guarantee is taken from:

(A) Beneficiary
(B) Principal Debtor
(C) Guarantor
94. In case of advance against pledge of goods of a limited company, charge should be registered with:
(A) Registrar of Joint stock company within 21 days
(B) Controller of Capital Issues within 21 days
(C) Registration of such charge is not required
95. The borrowing power of a Company is to be determined by:

(A) Memorandum of Association
(B) Articles of Association
(C) Certificate of Incorporation
96. Equitable Mortgage means:

(A) Registered mortgage for token amount
(B) Legal mortgage for full amount
(C) More deposit of Title Deed
97. In case of an advance allowed to a limited company against legal mortgage of land of its own, the
property is to be registered with:
(A) The Sub-Registrar Office / District Registrar Office
(B) The Registrar of the Joint Stock Company
(C) Both of the above
98. Principles of sound lending is followed by the bankers:

(A) To minimize risk
(B) To maximise profit
99. Following are the common ways for charging a security:

(A) FDR, BSP/PSP, Share Certificates, Goods/Stocks, etc.
(B) Pledge, Hypothecation, Mortgage, Assignment, Set-Off, Lien.
(C) Both of the above
100. Lien is created over the securities held by the bank through:
(A) Letter of Lien
(B) Demand Promissory Note
(C) Letter of Disclaimer
101. In a guarantee, the liability of the surety is:

(A) Absolute
38
(B) Primary
(C) Conditional
102. When a loan is to be repaid within 3 (three) years, it should be regarded as:
(A) Short Term Loan
(B) Medium Term Loan
(C) Demand Loan
103. Which one of the charge documents is required for all types of advances?
(A) Demand Promissory Note
(B) Letter of Continuity
(C) Letter of Undertaking
104. For payment of Court Fee/Legal fees of Lawyer in connection with filing suit against defaulter
borrower, which one of the following Head of Accounts is to be debited:
(A) Sundry Asset A/C -Sundry Debtor
(B) Expenses Control A/C -Law Charges
C) Suspense A/C -Law Charges
105. Under what circumstances, as mentioned below, you will file Money Suit' against a defaulter
borrower under (the' Artha Rin Adalat Ain 2003':
(A) When property is mortgage with bank as collateral security
(B) When no property is mortgage with the bank as security
(C) When cheques are drawn and deposited by the party but dishonoured by the Drawee bank.
106. Under which act a document is not acceptable to the court as an evidence of contract between the
banker and customer due to under stamping:
(A) The Contract Act, 1872
(B) The Artha Rin Adalat Act, 1990
(C) The Stamp Act, 1899
107. According to 'Lending Risk Analysis' which of the following falls under 'Industry Risk':
(A) Performance Risk & Resilience Risk
(B) Supplies Risk & Sales Risk
(C) Security Control Risk & Security Cover Risk
108. Loan which is not backed by any security is called:

(A) Bad Loan
(B) Risky Loan
(C) Clean Loan
109. CIB Report is to be obtained about a new customer for granting loan amounting to:
(A) More than Tk. 1.00 crore
(B) More than Tk. 50.00 Lac
(C) Any amount
110. Rates of interest to be charged against various forms of advances are determined by:
(A) Bank's own policy
(B) As per directives of Bangladesh Bank
39
(C) Mutual agreement with the borrower
111. Which one of the following is not a continuous Loan:
(A) C.C. (Pledge)

(B) Overdraft
1. Which is the unclassified Loan?

A) SMA
B) SS
C) DF
D) BL
2. How does base for provision calculated in respect of Classified Loan?

A) Based on total outstanding
B) Total outstanding minus interest suspense
C) Total outstanding minus interest suspense minus eligible security
D) Total outstanding minus eligible security
3. What is the percentage of provision kept for Doubtful Loans and Advances?
A) 5% of base for provision
B) 20% of base for provision
C) 50% of base for provision
D) 100% of base for provision
4. When shall a continuous loan be past due/overdue?

A) After the date of expiry
B) After 3 month of expiry date
C) After 6 month of expiry date
D) After last payment date
5. Is it mandatory for continuous loan to convert term loan at the time of reschedulment?
A) Yes
B) No
6. We have to report the information of rescheduled loan in which department of Bangladesh Bank?
A) Credit Information Bureau
B) Off sight supervision
C) Inspection department
D) Statistics department
7. In case of availing fresh facility from other bank or financial institution what are the conditions have to
be fulfilled?
A) 15% of compromise amount including down payment as per guideline
B) 15% of compromise amount excluding down payment as per guideline
C) 15% of compromise amount excluding down payment as per guideline and NOC
D) 15% of compromise amount including down payment as per guideline and NOC
8. 2nd Execution Case to be filed within ________ of filing the 1st Execution Case.
A) 1 Year
40
B) 5 Year
C) 6 Year
D) 180 Days
9. Section 33 is about _______

A) Summon Notice
B) Auction Notice
C) Execution of Decree
D) Show Cause Notice
10. Who can be a Mediator?

A) Plaintiff’s Lawyer
B) Defendants Lawyer
C) Retired Judge
D) None of the above
11. Specify the period of time when filing of 2nd Execution Case barred by Law?
A) 1 Year
B) 5 Year
C) 6 Year
D) 180 Days
1. Bank Conduct Classification of Loan Activities as per BRPD circular No.05 dated. 05.06.2006 on
_______ basis.
A) Monthly
B) Quarterly
C) Half yearly
D) Yearly
2. Calculate the provision for SMA Loans and advances for outstanding Tk.50,00,000/-
Where interest suspense Tk.2,00,000/- and eligible security Tk.60,00,000/-
A) Tk.2,50,000/-
B) NIL
C) Tk.2,40,000/-
D) Tk.90,000/-
3. In case of Fixed Term Loans, repayable in more than five years, if the amount of defaulted installment is
equal to or more than the amount of installment due for 24 months. Which category of classification
shall it fall?
A) DF
B) BL
C) SMA
D) None of these
4. When shall a demand loan be classified as Sub-Standard?

A) After 3 month of past due
B) After 6 month of past due
C) After 9 month of past due
D) After 12 month of past due
41
5. Calculate the eligible security of the Land and Building Mortgaged with the Bank.
A) 100% of market value
B) 75% of market value
C) Maximum 50% of market value
D) Maximum 50% of market forced sell value
6. What percentage has to be made as down payment of a term loan rescheduled for 4th time?
A) 15% of overdue installment or 10% of total outstanding, which is less
B) 30% of overdue installment or 20% of total outstanding, which is less
C) 20% of overdue installment or 15% of total outstanding, which is less
D) 50% of overdue installment or 30% of total outstanding, which is less
7. What shall be the amount of down payment for continuous loan Tk.1,10,00,000?
A) 15% of outstanding
B) 10% of outstanding
C) Tk.15.00 lac
D) Tk.11.00 lac
8. When no fresh facility will be allowed till the full settlement of compromise amount?
A) Any interest waiver
B) Any principal waiver
C) 2nd time rescheduled loan
D) None of these
9. What’s the procedure of serving Summon?

A) Registered Post
B) Unregistered Post
C) News Paper Publication
D) A & C.
10. Auction Notice Under Section -12 of Artha Rin Adalal, 2003 to be arranged before filing _______.
A) Artha Rin Execution Case
B) Artha Rin Suit
C) C R Case
D) Civil Suit
11. What is the specific Time Period for submitting Mediation Report?
A) 90
B) 60
C) 30
D) 15
12. 1st Execution Case to be filed within __________ of obtaining Decree from the Lower Court.
A) 1 Year
B) 2 Year
C) 6 Month
D) 90 Days
13. Artha Rin Ain, 2003 contain _____ Imprisonment of _____.

A) Civil, 7 Month
42
B) Criminal, 6 Month
C) Civil, 6 Month
D) Criminal, 7 Month
1. What criteria from the following is not considered to classify a loan account as per Bangladesh Bank
Guidelines?
A) Date of Sanction
B) Date of Expiry
C) Qualitative Judgment
D) Period of Past due/overdue.
2. Why bank write-off their classified loans and advances?

A) To initiate more efforts to recovery the loans
B) To Clean-up the Bank’s Balance from Classified exposure.
C) To improve the assets quality.
D) All of the above
3. Is provision kept only against Classified Loans and Advances?

A) Yes
B) No
4. To recover the classified loan all classified loans and advances are categorized into three stages on
priority on the basis of __________?
A) Value of collaterals and borrowers worthiness
B) Stages of classification and loans and advances category.
C) Borrower’s intention and worthiness.
D) All of the above.
5. Which of the following body have the authority to allow remission of interest to ensure early recovery?
A) Executive Committee
B) Audit Committee
C) Board of Directors
Please Write T if the statement is true and F if the statement is false.
6. Recovery efforts need not to be continued through negotiation after filing suit. F
7. Loans that virtually have no chance to recover shall have to be classified as Bad & Loss. F
8. NPL doesn’t have any bad effect on Bank’s Capital. F
9. Second priority includes no collaterals and borrower is not traceable at all. F

10. All unclassified loan other than SMA and classified loan will be treated as standard. T
1. Which is Called NPL?

A) SMA
B) Standard Loan
C) Unclassified Loan
D) Classified Loan.
2. How do bank write-off its bad loan, if provision remains short fall?
43
A) Keeping 100% provision against the loan
B) Use the excess provision of other Loans and advances
C) Debiting the Income account of the current year.
D) None of the above.
3. Is it mandatory to file suit before writing-off the loans?

A) Yes
B) No
4. How do banks exert its recovery efforts toward adjusting the written-off loans & advances?
A) Through in house “debt collection unit”
B) By engaging outsourcing agent
C) A & B
D) None of these.
5. How could Bank reduce the percentage of NPL?

A) By decreasing total loans and advances
B) Reduce the Classified Loans and advances
C) By raising the total loans and advances
D) B & C
E) All of the above
6. Even after writing-off, the loan is to be reported to Bangladesh bank CIB reporting like other loans
and advances. T
7. Senior executives of Head Office only follow up the branch official in order to expedite the recovery
and settlement of classified loans & advances. F
8. Ex. Director, Directors related loans require Bangladesh Bank’s approval after writing-off. F
9. NPL eats the capital of the Bank. T
10. Written-off loans to be maintained in the same ledger. F
1. Under what section of Artha Rin Adalat Ain 2003 Bank publish auction notice?
A) Section 34
B) Section 11
C) Section 12
D) Section 46
2. Under what circular of BRPD we write-off the classified loan?

A) BRPD Circular No.02 dt.13.01.2003
B) BRPD Circular No.05 dt.30.07.2003
C) BRPD Circular No.03 dt.23.05.2003
D) BRPD Circular No.01 dt.01.01.2003
3. Is it mandatory to publish auction notice in the national daily news paper?

44
A) Yes
B) No
4. What is the provision requirement for writing-off loan?

A) 50%
B) 20%
C) 5%
D) 100%
5. To file criminal case under N.I. Act what we can use against the borrower?
A) Bounce Cheque of the Borrower
B) Acknowledgement of the borrower
C) Request letter of the borrower
D) Sanction of letter of the loan
6. Under what section of Negotiable Instrument Act we file criminal case?

E) Section 12
F) Section 112
G) Section 138
H) Section 133

7. If all amicable negotiations fail Bank has to auction the properties to recovery the outstanding. F
8. Third priority loan includes no collaterals and borrower is not traceable at all. T
9. To make the auction fruitful, we ensure arrangement of intending buyers so that many buyers
participate in the auction. T
10. NPL is no way a bad thing for the financial institution. F
1. Bank Conduct Classification of Loans & Advances as per BRPD circular No.05 dated. 05.06.2006 on
_______ basis.
A) Monthly
B) Quarterly
C) Half yearly
D) Yearly

B) After 3 month of expiry date
C) After 6 month of expiry date
D) After last payment date
3. Calculate the provision for SMA Loans and advances for outstanding Tk.50,00,000/-,
where interest suspense Tk.2,00,000/- and eligible security Tk.60,00,000/-
A) Tk.2,50,000/-
B) NIL
C) Tk.2,40,000/-
D) Tk.90,000/-
4. Which one indicates unclassified Loan?

45
A) SMA
B) SS
C) DF
D) BL
5. How does base for provision calculate in respect of Classified Loan?

A) Based on total outstanding
B) Total outstanding minus interest suspense
C) Total outstanding minus interest suspense minus eligible security
D) Total outstanding minus eligible security
A) 5% of base for provision
B) 20% of base for provision
C) 50% of base for provision
D) 100% of base for provision
shall it fall?
A) DF
B) BL
C) SMA
D) None of those
8. When shall a demand loan be classified as “Sub-Standard”?

A) After 3 months of past due
B) After 6 months of past due
C) After 9 months of past due
D) After 12 months of past due
9. Which one is the exact percentage to calculate the value of eligible security of the Land and Building
Mortgaged with the Bank?
A) 100% of market value
B) 75% of market value
C) Maximum 50% of market value
D) Maximum 50% of market forced sell value
10. The loans that become repayable on demand by the bank will be treated as ____________.
A) Continuous Loan
B) Demand Loan
C) Forced LIM, PAD
D) None of the Above
11. When shall a Fixed Term Loan over five years be past due/overdue?
B) After 3 months of expiry date
C) After 6 months of expiry date
D) After 12 months payment date
46
12. The interest Accrued on classified loan will be credited to _____________.

A) Income Account
B) Interest Account
C) Suspense Account
D) Interest Suspense Account
13. Which body of a Bank has the authority to declassify a loan that was classified by inspection Team of
Bangladesh Bank?
A) Board of Directors
B) Executive Committee
C) Audit Committee
14. If a borrower deposit full or part of the due in a classified account, what shall be realized first?
A) Interest Amount
B) Principal Amount
C) Interest & Principal Amount (Prorata basis)
D) Only Principal Amount.
15. Charging of interest will cease in which type of Classified Account?

A) Special Mention Account
B) Sub Standard Account
C) Doubtful Account
D) Bad & Loss Account.
16. Short-term Micro-Credit will include any micro-credits not exceeding __________ and repayable within
12(twelve) Months.
A) Tk. 15000
B) Tk. 25000
C) Tk. 35000
D) Tk. 45000
17. What do we term, if any installment(s) or part of installment(s) of a fixed term loan is not paid within the
due date?
A) Overdue Installment
B) Due Installment
C) Defaulted Installment
D) Unpaid installment.
E) SMA
F) SS
G) DF
H) BL
E) Based on total outstanding
F) Total outstanding minus interest suspense
G) Total outstanding minus interest suspense minus eligible security
H) Total outstanding minus eligible security
47
E) 5% of base for provision
F) 20% of base for provision
G) 50% of base for provision
H) 100% of base for provision

E) After the date of expiry
F) After 3 month of expiry date
G) After 6 month of expiry date
H) After last payment date
C) Yes
D) No
E) Credit Information Bureau
F) Off sight supervision
G) Inspection department
H) Statistics department
be fulfilled?
E) 15% of compromise amount including down payment as per guideline
F) 15% of compromise amount excluding down payment as per guideline
G) 15% of compromise amount excluding down payment as per guideline and NOC
H) 15% of compromise amount including down payment as per guideline and NOC
E) 2 Year
F) 5 Year
G) 6 Year
H) 180 Days

E) Summon Notice
F) Auction Notice
G) Execution of Decree
H) Show Cause Notice

E) Plaintiff’s Lawyer
F) Defendants Lawyer
G) Retired Judge
H) None of the above
48
14. Bank Conduct Classification of Loan Activities as per circular No.05 dated. 05.06.2006 on _______
basis.
E) Monthly
F) Quarterly
G) Half yearly
H) Yearly
A) Tk.2,50,000/-
B) NIL
C) Tk.2,40,000/-
D) Tk.90,000/-
shall it fall?
E) DF
F) BL
G) SMA
H) None of these

E) After 3 month of past due
F) After 6 month of past due
G) After 9 month of past due
H) After 12 month of past due
E) 100% of market value
F) 75% of market value
G) Maximum 50% of market value
H) Maximum 50% of market forced sell value
E) 15% of overdue installment or 10% of total outstanding, which is less
F) 30% of overdue installment or 20% of total outstanding, which is less
G) 20% of overdue installment or 15% of total outstanding, which is less
H) 50% of overdue installment or 30% of total outstanding, which is less
E) 15% of outstanding
F) 10% of outstanding
G) Tk.15.00 lac
H) Tk.11.00 lac
E) Any interest waiver
F) Any principal waiver
G) 2nd time rescheduled loan
49
H) None of these

E) Registered Post
F) Unregistered Post
G) News Paper Publication
H) A & C.
E) Artha Rin Execution Case
F) Artha Rin Suit
G) C R Case
H) Civil Suit
E) 90
F) 60
G) 30
H) 15
E) 1 Year
F) 2 Year
G) 6 Month
H) 90 Days

E) Civil, 7 Month
F) Criminal, 6 Month
G) Civil, 6 Month
H) Criminal, 7 Month

I) SMA
J) SS
K) DF
L) BL
I) Based on total outstanding
J) Total outstanding minus interest suspense
K) Total outstanding minus interest suspense minus eligible security
L) Total outstanding minus eligible security
I) 5% of base for provision
J) 20% of base for provision
K) 50% of base for provision
L) 100% of base for provision
50

I) After the date of expiry
J) After 3 month of expiry date
K) After 6 month of expiry date
L) After last payment date
E) Yes
F) No
I) Credit Information Bureau
J) Off sight supervision
K) Inspection department
L) Statistics department
be fulfilled?
I) 15% of compromise amount including down payment as per guideline
J) 15% of compromise amount excluding down payment as per guideline
K) 15% of compromise amount excluding down payment as per guideline and NOC
L) 15% of compromise amount including down payment as per guideline and NOC
I) 1 Year
J) 5 Year
K) 6 Year
L) 180 Days

I) Summon Notice
J) Auction Notice
K) Execution of Decree
L) Show Cause Notice

I) Plaintiff’s Lawyer
J) Defendants Lawyer
K) Retired Judge
L) None of the above
32. Specify the period of time when filing of 2nd Execution Case barred by Law?
E) 1 Year
F) 5 Year
G) 6 Year
H) 180 Days
27. Bank Conduct Classification of Loan Activities as per BRPD circular No.05 dated. 05.06.2006 on
_______ basis.
51
I) Monthly
J) Quarterly
K) Half yearly
L) Yearly
A) Tk.2,50,000/-
B) NIL
C) Tk.2,40,000/-
D) Tk.90,000/-
shall it fall?
I) DF
J) BL
K) SMA
L) None of these

I) After 3 month of past due
J) After 6 month of past due
K) After 9 month of past due
L) After 12 month of past due
I) 100% of market value
J) 75% of market value
K) Maximum 50% of market value
L) Maximum 50% of market forced sell value
I) 15% of overdue installment or 10% of total outstanding, which is less
J) 30% of overdue installment or 20% of total outstanding, which is less
K) 20% of overdue installment or 15% of total outstanding, which is less
L) 50% of overdue installment or 30% of total outstanding, which is less
I) 15% of outstanding
J) 10% of outstanding
K) Tk.15.00 lac
L) Tk.11.00 lac
I) Any interest waiver
J) Any principal waiver
K) 2nd time rescheduled loan
L) None of these
52
I) Registered Post
J) Unregistered Post
K) News Paper Publication
L) A & C.
I) Artha Rin Execution Case
J) Artha Rin Suit
K) C R Case
L) Civil Suit
I) 90
J) 60
K) 30
L) 15
I) 1 Year
J) 2 Year
K) 6 Month
L) 90 Days

I) Civil, 7 Month
J) Criminal, 6 Month
K) Civil, 6 Month
L) Criminal, 7 Month
11. What criteria from the following is not considered to classify a loan account as per Bangladesh Bank
Guidelines?
E) Date of Sanction
F) Date of Expiry
G) Qualitative Judgment
H) Period of Past due/overdue.
12. Why bank write-off their classified loans and advances?

E) To initiate more efforts to recovery the loans
F) To Clean-up the Bank’s Balance from Classified exposure.
G) To improve the assets quality.
H) All of the above
13. Is provision kept only against Classified Loans and Advances?

C) Yes
D) No
14. To recover the classified loan all classified loans and advances are categorized into three stages on
priority on the basis of __________?
E) Value of collaterals and borrowers worthiness
53
F) Stages of classification and loans and advances category.
G) Borrower’s intention and worthiness.
H) All of the above.
15. Which of the following body have the authority to allow remission of interest to ensure early recovery?
E) Executive Committee
F) Audit Committee
G) Board of Directors
16. Recovery efforts need not to be continued through negotiation after filing suit. F
17. Loans that virtually have no chance to recover shall have to be classified as Bad & Loss. F
18. NPL doesn’t have any bad effect on Bank’s Capital. F
19. Second priority includes no collaterals and borrower is not traceable at all. F
20. All unclassified loan other than SMA and classified loan will be treated as standard. T
11. Which is Called NPL?

E) SMA
F) Standard Loan
G) Unclassified Loan
H) Classified Loan.
12. How do bank write-off its bad loan, if provision remains short fall?
E) Keeping 100% provision against the loan
F) Use the excess provision of other Loans and advances
G) Debiting the Income account of the current year.
H) None of the above.
13. Is it mandatory to file suit before writing-off the loans?

A) Yes
B) No
14. How do banks exert its recovery efforts toward adjusting the written-off loans & advances?
E) Through in house “debt collection unit”
F) By engaging outsourcing agent
G) A & B
H) None of these.
15. How could Bank reduce the percentage of NPL?

F) By decreasing total loans and advances
G) Reduce the Classified Loans and advances
H) By raising the total loans and advances
I) B & C
J) All of the above

54
16. Even after writing-off, the loan is to be reported to Bangladesh bank CIB reporting like other loans
and advances. T
17. Senior executives of Head Office only follow up the branch official in order to expedite the recovery
and settlement of classified loans & advances. F
18. Ex. Director, Directors related loans require Bangladesh Bank’s approval after writing-off. F
19. NPL eats the capital of the Bank. T
20. Written-off loans to be maintained in the same ledger. F
11. Under what section of Artha Rin Adalat Ain 2003 Bank publish auction notice?
E) Section 34
F) Section 11
G) Section 12
H) Section 46
12. Under what circular of BRPD we write-off the classified loan?

E) BRPD Circular No.02 dt.13.01.2003
F) BRPD Circular No.05 dt.30.07.2003
G) BRPD Circular No.03 dt.23.05.2003
H) BRPD Circular No.01 dt.01.01.2003
13. Is it mandatory to publish auction notice in the national daily news paper?
A) Yes
B) No
14. What is the provision requirement for writing-off loan?

E) 50%
F) 20%
G) 5%
H) 100%
15. To file criminal case under N.I. Act what we can use against the borrower?
I) Bounce Cheque of the Borrower
J) Acknowledgement of the borrower
K) Request letter of the borrower
L) Sanction of letter of the loan
16. Under what section of Negotiable Instrument Act we file criminal case?
M) Section 12
N) Section 112
O) Section 138
P) Section 133

17. If all amicable negotiations fail Bank has to auction the properties to recovery the outstanding. F
18. Third priority loan includes no collaterals and borrower is not traceable at all. T
55
19. To make the auction fruitful, we ensure arrangement of intending buyers so that many buyers
participate in the auction. T
20. NPL is no way a bad thing for the financial institution. F
18. Bank Conduct Classification of Loans & Advances as per BRPD circular No.05 dated. 05.06.2006 on
_______ basis.
E) Monthly
F) Quarterly
G) Half yearly
H) Yearly

F) After 3 month of expiry date
G) After 6 month of expiry date
H) After last payment date
20. Calculate the provision for SMA Loans and advances for outstanding Tk.50,00,000/-,
where interest suspense Tk.2,00,000/- and eligible security Tk.60,00,000/-
A) Tk.2,50,000/-
B) NIL
C) Tk.2,40,000/-
D) Tk.90,000/-
21. Which one indicates unclassified Loan?

E) SMA
F) SS
G) DF
H) BL
22. How does base for provision calculate in respect of Classified Loan?
E) Based on total outstanding
F) Total outstanding minus interest suspense
G) Total outstanding minus interest suspense minus eligible security
H) Total outstanding minus eligible security
E) 5% of base for provision
F) 20% of base for provision
G) 50% of base for provision
H) 100% of base for provision
shall it fall?
E) DF
F) BL
G) SMA
H) None of those
56
25. When shall a demand loan be classified as “Sub-Standard”?

E) After 3 months of past due
F) After 6 months of past due
G) After 9 months of past due
H) After 12 months of past due
26. Which one is the exact percentage to calculate the value of eligible security of the Land and Building
Mortgaged with the Bank?
E) 100% of market value
F) 75% of market value
G) Maximum 50% of market value
H) Maximum 50% of market forced sell value
27. The loans that become repayable on demand by the bank will be treated as ____________.
E) Continuous Loan
F) Demand Loan
G) Forced LIM, PAD
H) None of the Above
28. When shall a Fixed Term Loan over five years be past due/overdue?
F) After 3 months of expiry date
G) After 6 months of expiry date
H) After 12 months payment date
29. The interest Accrued on classified loan will be credited to _____________.

E) Income Account
F) Interest Account
G) Suspense Account
H) Interest Suspense Account
30. Which body of a Bank has the authority to declassify a loan that was classified by inspection Team of
Bangladesh Bank?
E) Board of Directors
F) Executive Committee
G) Audit Committee
31. If a borrower deposit full or part of the due in a classified account, what shall be realized first?
E) Interest Amount
F) Principal Amount
G) Interest & Principal Amount (Prorata basis)
H) Only Principal Amount.
32. Charging of interest will cease in which type of Classified Account?

E) Special Mention Account
F) Sub Standard Account
G) Doubtful Account
H) Bad & Loss Account.
57
33. Short-term Micro-Credit will include any micro-credits not exceeding __________ and repayable within
12(twelve) Months.
E) Tk. 15000
F) Tk. 25000
G) Tk. 35000
H) Tk. 45000
34. What do we term, if any installment(s) or part of installment(s) of a fixed term loan is not paid within the
due date?
E) Overdue Installment
F) Due Installment
G) Defaulted Installment
H) Unpaid installment.
I)

General Banking Questions With Answer - Morshed

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1

TEST OF BANKING KNOWLEDGE

01. Which one of the following is a secondary financial instrument?

02. The Banker has a statutory obligation to -

03. The most undesirable customer is -

07. A collecting banker is given protection only when the collects -

11. Payment in due course is the -

12. The limitation period of loan covered by a registered mortgage deed is -

13. Which of the following is the weakest method of charging security?

14. Transfer of possession of physical security is essential in the case of -

15. Which one is not included in funded credit?

16. Which of the following is not an intangible asset?

17. L/C is an undertaking of making payment given by -

19. Which of the following belongs to pre-shipment credit?

20. A Bill of Lading is -

21. Incoterm indicate who will bear -

22. An incoming passenger can bring -

24. In a letter of credit transaction as per UCPDC, banks deal in -

26. In a letter of credit transaction as per UCPDC, banks deal in -

27. A document containing the following is a promissory note -

28. Acceptance of drawee is required in case of -

30. Protest is necessary in case of dishonour of -

31. A bill of Exchange drawn in Delhi and payable in London is an example of -

32. A X of Mumbai draws a bill of exchange on Y of Delhi payable at London. It is an example of -

39. A drawee is to be given for deliberations at least a time of -

40. Presentment for acceptance is required in case of -

41. A bill should be presented for acceptance in case of insolvency of a drawee to -

42. An order instrument can be made payable to the bearer by making -

44. Negotiation – back implies -

45. Once a bearer instrument always a bearer instrument is true in case of -

47. Noting means -

49. Liabilities of all parties in case of bill of exchange terminate when -

53. Cancellation of crossing can be done by -

54. Travellers Cheques are issued by -

56. A right of appropriation first lies with the -

58. The customer is one who -

61. Cancellation of crossing can be done by -

62. Pay Order is issued by the banker for -

63. The upper limit of denomination of a stock invest is -

66. A Traveller’s Cheque is valid for a period of -

69. When the customer is operating the locker -

71. Merchant banking includes -

73. In disclosed factoring -

74. No interest is paid by the banks on -

82. A minor cannot -

85. The limitation period in case of a mortgage of immovable property is -

86. Notice of assignment is required in case of advances against -

87. Continuing security clause is inserted in case of -

88. The end-use of funds can reasonably be ensured in case of -

89. All goods should be physically checked at least once in -

90. In a letter of credit – backed mechanism, the Advising Bank’s responsibility is to -

94. Liquid assets include -

95. In case of pledge, the possession of the security is with -

97. In case of hypothecation, the banker has -

100. Pledge can be created by -

101. The Letter of Continuity should be taken in the case of -

107. Stock Exchange Securities do not include -

108. A bill of lading is -

110. Commercial Banks provide credit only to -

111. Medium Term Credit needs are for a period between -

113. Discuss whether either of the following is a promissory note -

114. Is Bangladesh Bank a Schedule Bank?