MCQ Bank

______________________involves the borrower’s legal standings and management expertise in maintaining operations of the business, so that he can repay its debt obligations

A) Capacity
B) Character
C) Capital
D) Communications

AI Explanation

Capacity in credit analysis refers to the borrower's legal standing, operational competence, and ability to generate sufficient cash flows and manage operations effectively to repay debts.

BNK601 Final Term AI Solved

Q93

Which of the following is one in which the exporter has the right to request the paying, or negotiating bank to make either part, or all, of the credit value available to one or more third parties?

A) Irrevocable confirmed letter of credit
B) Red clause credit
C) Revolving credit
D) Transferable letter of credit

AI Explanation

A transferable letter of credit permits the primary beneficiary (the exporter) to make the credit available, in whole or in part, to one or more secondary beneficiaries (such as suppliers or sub-contractors).

BNK601 Final Term AI Solved

Q94

Negotiable Instrument Act recognizes the following types of promissory notes Except_____________________.

A) A promise to pay the bearer
B) A promise to pay
C) A promise to pay a certain sum of money to a person
D) A promise to pay a certain sum of money to the order of a certain person

AI Explanation

Under the Negotiable Instruments Act, a promissory note cannot be made payable to bearer on demand; legally, promissory notes must be payable to a specific person or to the order of a specified person.

BNK601 Final Term AI Solved

Q95

Which of the following banking facility is not available to an illiterate person?

A) Deposit money
B) Cash withdrawal by cheque
C) ATM card
D) All of the given options

AI Explanation

An illiterate person can typically deposit money and withdraw cash using standard bank withdrawal slips with thumb impressions, but issuing and using an ATM card requires technical literacy, PIN entry, and reading capabilities that make it restricted or unavailable.

BNK601 Final Term AI Solved

Q96

Equitable mortgage is created through deposit of _____________________ with the banks.

A) Title deed
B) Mortgage deed
C) None of the given options
D) Transfer deed

AI Explanation

An equitable mortgage is created by the deposit of title deeds of immovable property by the borrower to the bank as security for a loan, without requiring a formal registered mortgage deed.

BNK601 Final Term AI Solved

Q97

Which of the following agents work along with the principal?

A) Co-agents
B) Public Agents
C) General Agents
D) Private Agents

AI Explanation

Co-agents are secondary agents appointed by an original agent to assist in performing tasks along with the principal or the original agent.

BNK601 Final Term AI Solved

Q98

Agency can be created in the following ways Except:

A) By operation of Law
B) By ratification
C) By concent
D) By coercion

AI Explanation

An agency relationship can be legally created by consent, ratification, or operation of law, but coercion involves illegal force or duress and cannot form a valid legal agency.

BNK601 Final Term AI Solved

Q99

A minor can open his bank account with his/her ________________________.

A) Father
B) Guardian
C) Mother
D) All of the given options

AI Explanation

A minor is legally incompetent to contract, so a minor's bank account must be opened and operated under the supervision of a court-appointed or legally recognized guardian.

BNK601 Final Term AI Solved

Q100

A partner in a partnership is ______________________ of the firm.

A) Trustee
B) Agent
C) Principal
D) Executor

AI Explanation

In partnership law, every partner is an agent of the firm and of their other partners for the purpose of the business of the partnership, meaning their actions bind the firm.

BNK601 Final Term AI Solved

Q101

Customer is ___________________ in pledger-pledgee relationship.

A) Pawnee
B) None of the given options
C) Pledgee
D) Pledger

AI Explanation

In a pledger-pledgee relationship, the customer who delivers the goods or assets as security is the pledger (or pawnor), while the bank holding the security is the pledgee (or pawnee).

BNK601 Final Term AI Solved

Q102

Which of the following is NOT the operating instruction of a joint account?

A) Either or Survivor
B) Operated jointly by all the account holders
C) Operated by any one or more persons authorized to operate the account
D) Operated by the father of any of the accountholder in his absence

AI Explanation

Standard operating instructions for joint bank accounts include options like either-or-survivor, joint operation, or specific authorizations given to designated individuals, but a parent of an adult account holder does not automatically have authority.

BNK601 Final Term AI Solved

Q103

A banker receives a stop payment instruction of a cheque by any one of the joint account holders; banker can make the payment against that cheque if the payment instruction is signed by

A) Father of any of the joint account holder
B) All of the given options
C) Any one of the joint account holders
D) All the joint account holders

AI Explanation

If any one joint account holder issues a stop payment instruction, the bank must halt payment. To override this and clear the cheque, instructions and signatures from all joint account holders are required.

BNK601 Final Term AI Solved

Q104

Which one of the following is not the essential of a bill of exchange?

A) In writing
B) Unconditional order
C) Time of payment
D) Promise to pay

AI Explanation

A bill of exchange contains an unconditional order to pay, not a promise to pay. A promise to pay is the defining characteristic of a promissory note, making it the correct option that is not essential for a bill of exchange.

BNK601 Final Term AI Solved

Q105

Which of the following is the account opening requirement for an illiterate person?

A) Affix of thumb impression in front of the bank officer
B) All of the given options
C) Self-presence
D) Photographs

AI Explanation

Opening a bank account for an illiterate person typically requires personal self-presence, the affixation of a thumb impression in front of an authorized bank officer, and photographs for identification verification.

BNK601 Final Term AI Solved

Q106

When a customer deposits money in the bank, the bank receives money in the ______________ capacity.

A) creditor
B) fiduciary
C) debtor
D) lessor

AI Explanation

When a customer makes a deposit, the legal relationship established between the customer and the bank is that of creditor and debtor, where the bank acts as the debtor holding the customer's funds as a debt owed to them.

BNK601 Final Term AI Solved

Q107

Registered mortgage is created through a formal document called ______________________.

A) Transfer deed
B) Title deed
C) None of the given options
D) Mortgage deed

AI Explanation

A registered mortgage is formally created and executed through a legal document known as a mortgage deed, which is officially registered with the relevant land registry or authority.

BNK601 Final Term AI Solved

Q108

Which of the following represent a business, vocation or profession?

A) Public Agents
B) Special Agents
C) Private Agents
D) General Agents

AI Explanation

A general agent is authorized to conduct all transactions connected with a specific business, vocation, or profession on behalf of the principal, possessing broader authority than a special agent.

BNK601 Final Term AI Solved

Q109

All of the given persons can open a bank account Except__________________.

A) Female
B) Insane
C) Illiterate
D) Minor

AI Explanation

Under contract and banking law, an insane person lacks the legal capacity to enter into a valid contract, and therefore cannot legally open or operate a bank account.

BNK601 Final Term AI Solved

Q110

A ____________ is a person who has not attained the age of 18.

A) Major
B) lessor
C) Minor
D) Creditor

AI Explanation

Under general legal frameworks and banking laws, a minor is defined as a person who has not attained the age of majority, which is typically 18 years. Minors lack full legal capacity to enter into binding contracts.

BNK601 Final Term AI Solved

Q111

A banker’s authority to pay cheques is revoked or cancelled in the following situations EXCEPT_____________:

A) Countermand of payment
B) Notice of customer’s death
C) Notice of adjudication of the customer as insolvent
D) Customer’s absence from the country

AI Explanation

A banker's authority to pay cheques is terminated by countermand (stop payment), notice of the customer's death, or notice of insolvency. A customer simply being absent from the country does not revoke the mandate to honor their cheques.