Which of the following is termed as “science of civil law”?

Jurisprudence
Business Law
Legal system
Legal opinion
LESSON 2
The legal experts term civil law as science of jurisprudence.

www.vuzs.info

Which of the following is NOT the category of the Share Capital?

Authorized capital
Un-issued capital
Issued capital
Retained capital/equity

LESSON 11
Categories of Share Capital
The term share capital used in connection with the capital of a limited company is used in several senses. So the capital of a company may be categorized as follows:
a. Authorized capital
b. Issued capital
c. Unissued capital
d. Subscribed capital
e. Paid-up capital

www.vuzs.info

Which of the following is the MINIMUM capital requirement for banks/Direct Financial Institutions as set out by the State Bank of Pakistan by 31/12/2009?

Rs 3 billion
Rs 4 billion
Rs 5 billion
Rs 6 billion
LESSON 11

www.vuzs.info

In 14th century, Banking in structured form started in which of the following countries?

U.S.A.
England
France
Germany
Ref: Banking in structured form started in England in 14th century.

Which of the following statements holds TRUE for law?

It is to redress wrongs
It ensures public order
It is to maintain rights
All of the given options

LESSON 2
Significance of law: Law is to maintain rights, uphold justice and redress wrongs. Law ensures public order, balance, harmony, peace among the persons within the state and inter-states. We can easily conceive that in the absence of law and legal system there would have been disorder, unrest and chaos all around us.

www.vuzs.info

Which of the following refers to “U.S. dollars deposited in foreign branches of U.S. banks or in foreign banks outside the United States”?

Bills of Exchange
Bankers’ Acceptances
Repurchase Agreements
Eurodollars
LESSON 4

A banking company can engage itself in which of the following businesses under section 7 of Banking Companies Ordinance, 1962?

Borrowing, raising, or taking up of money
The lending or advancing of money either upon or without security
The granting and issuing of letters of credit
All of the given options

In which of the following financial markets, buyers and/sellers agree to trade certain quantity of commodity for a specific price at a specified date in future?

Equity Market
Over the Counter Market (OTC)
Future Market
Secondary Market

www.vuzs.info

Which of the following is NOT the regulation of paid-up capital, subscribed capital and authorized capital and voting rights of share-holders under section 14 of Banking Companies Ordinance, 1962?

The subscribed capital of the company is not less than one half of the authorized capital
The capital of the company consists of ordinary shares only
Paid-up capital should be less than one half of the subscribed capital
The voting rights of any one shareholder, except those of the Federal Government or a Provincial Government do not exceed five per cent of the total voting rights of all the shareholders

Which of the following countries adopted the model for the redressal of public grievances against agencies of state after Sweden?

Finland
Denmark
New Zealand
France
LESSON 15
Sweden appointed an ombudsman, another Scandinavian country, Finland, adopted the Swedish model for the redressal of public grievances against agencies of state.

www.vuzs.info

In which of the following years, European Union established the first European Ombudsman?

1985
1986
1995
1996
LESSON 15
In 1995, the European Union established the first European Ombudsman under the Maastricht Treaty.

At the time of independence, how many branches of scheduled banks were there in Pakistan?

457 branches
467 branches
487 branches
497 branches
Ref: In Pakistan, before independence in March, 1947 there were 631 scheduled bank offices in the United Pakistan. Out of which 144 were located in Bangladesh and there were 130 offices of non-scheduled banks.

www.vuzs.info

Which of the following refers to “a bank for the time being included in the list of banks maintained under sub-section (1) of Section 37; under Banking Companies Ordinance, 1962”?

Scheduled Bank
Commercial Bank
Investment Bank
Financial Intermediary
LESSON 8
“Scheduled bank” means a bank for the time being included in the list of banks maintained under subsection of Section 37.

In which of the following years, “Wafaqi Mohtasib” was established?

1983
1995
2000
2005
LESSON 15

Which of the following terms is used under the Co-operative Societies and Co-operative Banks (Repayment of Loans) Ordinance, 1966 for a loan which is not secured by mortgage, pledge, hypothecation or assignment of such property of the borrower, as in the case of a loan not exceeding five hundred thousand rupees?

Unsecured Loan
Secured Loan
Insufficiently Secured
Insufficiently Unsecured

In which of the following years, an ombudsman was first established?

1806
1809
1919
1929
LESSON 15

www.vuzs.info

Relationship between Principal and Agent is known as which of the following?

Business relationship
Formal relationship
Agency relationship
Personal relationship
LESSON 9

Which of the following studies is the evolution of law over a period of time?

Analytical Jurisprudence
Historical Jurisprudence
Ethical Jurisprudence
Behavioral Jurisprudence
LESSON 2

www.vuzs.info

Which of the following factor leads towards the economic prosperity of a country?

Industrial growth
Stable law and order situation
Strong financial institutions
All of the given options

Short term sale of Government securities with an agreement to repurchase the securities at a higher price is called ___.

Federal fund
Repo
Banker’s acceptance
Open market operation
LESSON 4

Short-term financial instrument used in the money market is known as:

Document
Paper
Bond
Bill
LESSON 4

www.vuzs.info

According to Establishment of Federal Bank for Co-Operative and regulation of Co-Operative Banking Act, 1977, the term “Time Liabilities” refers to which of the following?

Liabilities which are to be met on demand
Liabilities which are not demand liabilities
Liabilities which are to be met in due course of time
Liabilities which are contingent in nature
LESSON 8
“Demand liabilities” means liabilities which must be met on demand, and “time liabilities” means liabilities which are not demand liabilities

Which of the following refers to “An obligation annexed to the ownership of property, and arising out of a confidence reposed in and accepted by the owner, or declared and accepted by him, for the benefit of another, or of another and the owner is the person who reposes or declares the confidence”?

Agency
Trust
Branch
Sole ownership
LESSON 10

www.vuzs.info

If report of State Bank is not submitted with the application of stay order against winding up to the High Court, the high court can extend a stay order for which of the following Maximum periods?

15 Days
30 Days
45 Days
60 Days
LESSON 15

Which of the following are intermediate-term and long-term obligations issued by large, high-quality corporations to finance plant and equipment spending?

Bills of Exchange
Bankers’ Acceptances
Corporate Bonds
Eurodollars
LESSON 4

www.vuzs.info

All of the following are the components of Part III (Suspension of Business and winding up of Banking Companies) of Banking Companies Ordinance, 1962, EXCEPT:

Power to dispense with meetings of creditors, etc.
Booked depositors’ credits to be deemed proved
Preferential payments to depositors
Special provisions to make calls on contributories
LESSON 7

All of the following are types of financial market, EXCEPT:

Foreign exchange markets
Stock markets
Bond markets
Future markets
LESSON 3

According to the State Bank of Pakistan Act, 1956, “Central Board” refers to which of the following?

Central Board of Revenue
Central Board of Directors of the Bank
Central Board of Information Technology
Central Board of Investments
LESSON 16

According to the Section 4 of State Bank of Pakistan Act, 1956, which of the following is the face value of the share of a Bank?

Rs. 10
Rs. 20
Rs. 50
Rs. 100

According to Section 4 of State Bank of Pakistan Act, 1956, which of the following should be the original Capital of the Bank?

Rs. 20 Millions
Rs. 30 Millions
Rs. 40 Millions
Rs. 50 Millions
LESSON 16
Share Capital: Sec 4: The original share capital of the Bank shall be three corers of rupees.

Under section 10 (Penalty) of the co-operative societies and co-operative banks (repayment of loans) ordinance, 1966, if a person whoever contravenes any of the provisions of his ordinance or the rules made shall be punishable with imprisonment of which of the following?
www.vuzs.info
Term which may extend to five years
Term which may extend to six years
Term which may extend to seven years
Term which may extend to eight years
LESSON 18

Penalty: Sec 10
Whoever contravenes any of the provisions of this Ordinance or the rules made there under shall be punishable with imprisonment for a term which may extend to seven years

Which of the following has defined the banker as “Any person carrying on a bonafide banking business in the United Kingdom is a banker”?

American version
United Kingdom’s version
Finance Act, 1915
Negotiable instruments Act, 1881
LESSON 20
According to Finance Act, 1915:
“Any person carrying on a bonafide banking business in the United Kingdom is a banker”

Which of the following is also called the Legal Mortgage?

Equitable Mortgage
Registered Mortgage
Un-registered Mortgage
Non-equitable Mortgage
LESSON 12
(Registered or Legal Mortgage): This is created through a formal document called mortgage deed. Mortgage deed is registered with the Registrar of titles. It is comparatively expensive as it involves stamp duty and registration fee.
www.vuzs.info
All of the following are included in the financial intermediaries, EXCEPT:

Mutual Funds
Pension Funds
Stock Exchange
Credit Union
LESSON 3
Financial institutions are also called Financial Intermediaries, these include the following:
Commercial Banks, Credit Unions, Savings and Loan Associations, Mutual Saving Banks, Mutual Funds, Finance Companies, Pension Funds etc.

According to Section 23 of Banking Companies Ordinance, 1962, a subsidiary to banking company can perform which of the following function(s)?

To carry on of banking business strictly in conformity with Islam
To carry on business of modaraba
Such other purposes as are incidental to the business of banking
All of the given options
LESSON 12
Sec 23, (aa) the carrying on of banking business strictly in conformity with the Injunctions of Islam as laid down in the Holy Quran and Sunnah;’’ the undertaking of the administration of estates as executor, trustee or otherwise.
(bb) the carrying on of business of modaraba under the provisions of the Modaraba Companies and Modaraba (Floatation and Control) Ordinance 1980 the providing of safe deposit vaults, with the previous permission in writing of the State Bank, the carrying on of the business of banking exclusively outside Pakistan.
(dd) the conduct of any from of business permitted by section 7.
(e) Such other purposes as are incidental to the business of banking.

All of the following are contents of the Memorandum of unlimited company, under Banking Companies Ordinance, 1962, EXCEPT:

Name of the company
Objects
Limited liability of shareholders
Authorized capital
LESSON 8
www.vuzs.info
Which of the following condition(s) makes the purpose of the trust unlawful?

If it is forbidden by law
If it is fraudulent
If it involves or implies injury to the person or property of another
All of the given options
LESSON 10

According to the State Bank of Pakistan Act, 1956, “Member” refers to which of the following?

Member of the Local Board
Member of the Committee
Member of the Legislature
Member of the Bank
LESSON 16
“Member” means a Member for the Local Board.

All of the following are merits of Nationalization of banks, EXCEPT:

Availability of funds to the government for meeting its social sector targets

Equitable distribution of credit to the different sectors, industries and regions
Centrally coordinated policy frame work
Excessive government control leading to the decisions on non professional considerations
LESSON 6

Banking, not in the present from but in its elementary stages was traced as old as:

1000 B.C
2000 B.C
3000 B.C
4000 B.C
Ref: The banking has been in practice in one way or other from the inception of societies. Some authors maintain that banking, not in the present form but in its elementary stages was traced as old as 2000 B.C.
www.vuzs.info

Which of the following is/are the requirement(s) to become a customer?

Customer should be of the age of majority
Customer should be of sound mind
Customer should not be debarred under any law
All of the given options
LESSON 20
Legal Requirements to be qualified as Customer: Customer should be of age of majority should be of sound mind Not debarred under any law there must be an offer/ proposal and acceptance of that offer/ proposal.

Which of the following condition(s) may lead to cancellation of license of a banking company?

If the company ceases to carry on banking business in Pakistan
If the company at any time fails to comply with any of the conditions imposed upon it under sub-section (1)
If at any time, any of the conditions referred to in sub-section (3) ceases o be fulfilled.
All of the given options
LESSON 19
The State Bank may suspend or cancel a license granted to a microfinance institution if such institution:
(a) At any time fails to comply with any of the conditions imposed upon it under sub-section (2);

(b) Fails to fulfill, at any time, any of the conditions referred to in sub-section (3);

(c) Has furnished false or misleading information in its application for a license.

Which of the following is NOT the primary purpose of Mortgage?

Securing the payment of money advanced or to be advanced by way of loan.
Securing the payment for future lending.
Securing the payment for an existing debt or future debt.
Securing the payment for performance of an engagement which may give rise to pecuniary liability.
LESSON 12
(Mortgage): A mortgage is the transfer of an interest in specific immoveable property for the purpose of securing the payment of money advanced or to be advanced by way of loan, an existing or future debt, or the performance of an engagement which may give rise to a pecuniary liability.
Which of the following refers to “a person employed to do any act for another person or to represent another person in dealing with third person”?

Employee
Agent
Representative
Shareholder
LESSON 22
Agent is a person employed to do any act for another or to represent another in dealing with a third persons.
www.vuzs.info

According to Section 17 of Banking Companies Ordinance, 1962, the banking company cannot create charge on which of the following?

Paid up capital
Issued capital
Unpaid capital
Subscribed capital
LESSON 12
Prohibition of charge on unpaid capital: Sec 17
No banking company shall create any charge upon any unpaid capital of the company and such charge, if created, shall be invalid.

Which of the following refers to “rules that regulate the conduct of individuals, businesses, and other organizations within society”?

Jurisprudence
Law
Legal system
Legal opinion
LESSON 2
“The law consists of rules that regulate the conduct of individuals, businesses, and other organizations within society”

As per Banking Companies Ordinance, 1962, the total suspension time of the operation of all or any provision of Companies ordinance, 1962 should not exceed:

Three months
Six months
Nine months
One year
LESSON 7
The Federal Government may, by notification in the official Gazette, extend from time to time, the period of any suspension under subsection for such period or periods, not exceeding sixty days at any one time, as it thinks fit so however that the total period does not exceed one year.
www.vuzs.info

According to the section 30 of Banking Companies Ordinance, 1962, at the close of business on any day, the assets in Pakistan of every banking company shall not be less in value than such percentage of its time and demand liabilities in Pakistan as may be prescribed by the State Bank from time to time provided that the percentage so prescribed shall not exceed:

65% of time and demand liabilities
75% of time and demand liabilities
85% of time and demand liabilities
95% of time and demand liabilities
LESSON 13
Assets in Pakistan: Sec 30
At the close of business on any day the assets in Pakistan of every banking company shall not be less in value than an amount representing such percentage of its time and demand liabilities in Pakistan as may be prescribed by the State Bank from time to time provided that the percentage so prescribed shall not exceed eighty five per cent.

How many foreign banks were there in Pakistan, at the time of independence?

09 banks
19 banks
29 banks
39 banks
Ref: There were 19 foreign banks having small branches and controlled through their head offices.
www.vuzs.info
According to Section 16 of Banking Companies Ordinance, 1962, which of the following is the MAXIMUM commission, brokerage, discount or remuneration paid by banking company on issue of share capital?

2% of the paid up value of the issued shares
2.5% of the paid up value of the issued shares
3% of the paid up value of the issued shares
3.5% of the paid up value of the issued shares

LESSON 12
Restriction on commission, brokerage, discount, etc. on sale of shares: Sec 16
Notwithstanding anything to the contrary in sections 105 and 105A of the Companies Act, 1913 , no banking company shall pay out directly or indirectly by way of commission, brokerage, discount or remuneration in any form in respect of any shares issued by it, any amount exceeding in the aggregate two and one-half per cent of the paid-up value of the said shares.

Which of the following refers to “a financial market in which new issues of a security such as bonds or stocks are sold to initial buyers”?

Equity Market
Over the Counter Market (OTC)
Primary Market
Secondary Market
LESSON 3
Primary Market and Secondary Markets
Primary Market is a financial market in which new issues of a security such as Bonds or stocks are sold to initial buyers whereas in secondary Markets there is further sale of already issued securities.

Subscribed Capital is part of which of the following?

Paid up capital
Issued capital
Un-issued capital
Retained capital/equity
LESSON 11
Paid-up Capital
Paid-up capital is that part of the issued capital which has been paid-up by the shareholders. Paid up capital is always equal to subscribed capital.

All of the following are the components of Part IV (Special Provisions for Speedy Disposal of Winding up Proceedings) of Banking Companies Ordinance, 1962, EXCEPT:

Transfer of pending proceedings
Settlement of list of debtors
Special provisions to make calls on contributories
Preferential payments to depositors

LESSON 7
Part –IV
Special Provisions for Speedy Disposal of Winding up Proceedings
following topics are covered under this part
o Power of High Court to decide all claims in respect of banking companies.
o Transfer of pending proceedings.
o Settlement of list of debtors.
o Special provisions to make calls on contributories.
www.vuzs.info
Which of the following parties are engaged in a letter of credit?

Advising banks
Confirming banks
Negotiating banks
All of the given options
LESSON 9
1) Applicant (opener of L.C)
2) Issuing bank (opening bank)
3) Advising bank
4) Confirming bank
5) Negotiating bank
6) Nominated Bank

According to Section 4 of State Bank of Pakistan Act, 1956, which of the following should be the original Capital of the Bank?

Rs. 20 Millions
Rs. 30 Millions
Rs. 40 Millions
Rs. 50 Millions
LESSON 16
The original share capital of the Bank shall be three corers of rupees divided into three hundred thousand fully paid-up shares of the nominal value of one hundred rupees each, out of which not less than fifty one per cent shall be held by the Federal Government and the balance by the public.