Banking Diploma Examination— June, 2014
JAIBB
LAWS AND PRACTICE OF BANKING
[Answer any five questions of which two must be from group B.]
Group A
1.
Write short notes on any five of the following:
a) Liquidity Ratio;
b) Micro Finance;
c) Core Risk Management;
d) Convertible Bond;
e) Mutual Fund;
f) Legal Tender;g) Clearing House;
h) Conversion;
i) Garnishee Order;
j) A.T.M;
k) Revolving Credit;
l) Bank Rate;
m) Clayton's Rule;
n) K.Y.C;
o) Non-issuable notes and Re-issuable notes;
p) Subordinate Debt;
q) C.I.B;
r) Asian Clearing Union;
s) Bankers books abidance act
t) Non-Performing Loan;
u) SME;
v) Contingent Liability;
w) Material Alteration.
2.
a) Briefly discuss the main functions of a commercial bank.
b) What role does a commercial bank play in the development of an area?
c) How does a commercial bank create deposits?
3.
a) What is meant by a Payee/Paying Bank?
b) Discuss the duties and responsibilities of a Paying Bank.
c) Discuss the protection offered by law to the Paying Banker under the Negotiable Instruments Act 1881?
d) A cheque of Tk. 1,000 is drawn by your customer is presented through clearing on 2nd January 2011 for payment when the balance in the account is Tk. 501 only. The customer happens to have a fixed deposit of Tk. 500 with your bank. It is however observed that the chaque is dated 30th December. 2010. How will you act in the circumstances?
4.
a) What do you mean by Money Laundering?
b) Why is prevention of money laundering necessary?
c) How can a banker perform his duties in prevention of money laundering under the existing law regarding money laundering?
5.
a) What do you understand by a 'customer of a Bank?
b) What do you mean by bank-customer relationship?
c) Discuss the procedure for opening the following types of accounts:-
(i) Joint Stock Company;
(ii) Club;
(iii) Trust Account.
6.
Distinguish between any four of the followings:
a) Bank Rate and LIBOR:
b) Working Capital and Venture Capital;
c) CRR & SRR;
d) Bad Debt Provision and Reserve;
e) Merchant Bank and Offshore Bank,
f) Bid bond and Personal Guarantee;
g) Core capital and Supplementary capital;
h) Fixed charge and Floating charge;
i) Accommodation Bill and Trade Bill;
j) Euro and SDR;
k) Share and Debenture;
l) Holder in due course & holder for value;
m) Retail banking and wholesale banking;
n) Authorized Capital and paid up capital;
o) Lien and mortgage;
p) Bill of entry and bill of exchange;
q) Broad money and narrow money;
r) Payment in due course and Holder in due course.
Group B
1.
Discuss the procedure for sanction of loans against the following securities:
a) Life Insurance Policy;
b) Shares;
c) Guarantee:
d) I.C.B. Unit Certificate.
e) Work Order:
f) Trust Receipts;
g) Immovable Properties
h) Financial Obligations:
2.
a) Describe the formalities to be observed and safeguards to be adopted when lending against Life Insurance Policy as security.
b) Mr. Bashar has been sanctioned an advance of Tk. 5.00 lacs against the security of goods valued at Tk. 10.00 lacs. He proposes to insure the goods as required by the bank but only to the extent of the bank's advance amount e. e, Taka 5.00 lacs only. How will you react to the proposition and why?
3.
a) Discuss the significance of Bank Loan.
b) What are the main points considered by a Banker in processing a loan application?
c) Why is it necessary to keep provisions against classified loans and advances?
4.
a) What is fraud and forgery?
b) Discuss the various means adopted in committing fraud and forgery in banks.
c) Suggest measures to check fraud and forgery activities.
5.
a) What is mortgage?
b) What are the rights and liabilities of a mortgagor and a mortgagee?
c) What factors should be considered while taking security?
6.
a) What is loan syndication?
b) Merits and demerits of loan syndication
c) What is lead bank?
d) Explain the roles of lead bank in loan syndication
7.
a) What do you understand by liquidity of a bank?
b) What is liquidity crunch?
c) What are the causes for liquidity crisis of a bank?
d) How does a bank strike a balance between liquidity and profitability'? Excess liquidity is also a crisis— Discuss.
8.
a) Discuss the salient features of Bankruptcy Law in Bangladesh?
b) Discuss the main provisions of Artha Rio Adalat.
c) Do you think the existing laws relating to the Artha Rio Adalat and Bankruptcy Law is adequate to deal with the delinquent borrowers? Discuss.
9.
a) Define Working Capital.
b) Explain how you will assess the Working Capital requirement of a small scale business Unit.
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