JAIBB Question- 2011

THE INSTITUTE OF BANKERS, BANGLADESH

 Banking Diploma Examination, November, 2011
JAIBB
LAWS AND PRACTICE OF BANKING (LPB)

Time—03 hours                      Total marks—100
 Pass marks—50

[N. B. —The figures in the right margin indicate  full marks. Answer any five questions of which two must be from group B.]
                                                                      Group A

                                                                                                                                             Marks
1. Write short notes on any five of the following:—                                                                    4x5=20
(a) Garnishee Order;

(b) A.T.M;
(c)  Mobile Banking;
(d) BankRate;    ,     , .
(e)  Clayton's Rules

(f) K.Y.C;
(g) Non-issuable notes and Re-issuable notes;
(h) Subordinate Debt.
2. (a)   Briefly discuss the main functions of a commercial bank.                                                       10

(b) What role does a commercial bank play in the development                                                      6
of an area?
(c) How does a commercial bank create deposits? 

                                                                       4
3. (a)   What is meant by a Collecting Bank?                                                                                     5

(b) Discuss the duties and responsibilities of a Collecting Bank.                                                          8
(c) Mr. Rahim opens a well introduced savings account with you. He deposits a cheque crossed account payee and withdraws the amount. A few days later, the paying bank informs you that the drawer of the cheque has learnt that real Mr. Rahim has not received the cheque and it was stolen in transit. On further inquiry it appears the man who opened the account with you is not tracieible at the address given. Paying bank calls upon you to pay bank the amount as the cheque was wrongly collected by you. As branch manager how would you deal with the above?

4. (a)   What is a cheque? Discuss the main characteristics of a  cheque.                                        8
(b)  Is the banker's action legally justified in the following cases?  Give reasons.                           12
(i) Returning and not collecting a cheque crossed to two banks.
(ii) Paying a cheque to 'B' which is drawn in favour of 'A' and marked 'Not negotiable'.
(iii) Paying a cheque drawn on the customer's current account when there is insufficient balance in it by making a lien on the shares held in the same customer's safe custody account.
5. (a)   What do you mean by Money Laundering?                                                                          6

(b) Why is prevention of money laundering necessary?                                                                     6
(c) How can a banker perform his duties in preventton of money laundering under the existing law regiarding money laundering?                                                                                                                         8

6. (a) What is meant by Banker's right of Set-off?                                                                        6
(b) When and how does a banker apply his  right of Set-off?                                                       7
(c) 'A' has taken an overdraft of Tk. 5,000.00. The customer has a credit balance of Tk. 7,000.00 in his savings bank account. On customer's failure to adjust the account on due date and after due notice, the banker adjusts the custcunrar's overdraft from his saving bank account. Is the banker's action legally justified?                                                                                                                                    7
7. Distinguish between any four of the following:—                                                                   5x4=20
(a) Share and Mutual Fund;
(b) CRR and SLR;
(c) Holder in Due Course and Holder for Value;
(d) Money Market and Capital Market;
(e) Legal Mortgage and Equitable Mortgage; 

(f)  Primary Security and Collateral Security; 

(g)  Retail Banking and Wholesale Banking.
 

Group B
8. Describe the procedure for lending against the following Securities:—                        5x4=20

(a) Financial Obligations;
(b) Work Order,
(c) Trust Receipts;
(d) Immovable Properties.

9. (a)   Discuss the significance of Bank Loan                                                                      8

(b) What are the main points considered by a Banker in processing a loan application?       6
(c) Why is it necessary to .keep provisions against classified  loans and advances?              6
 

10.(a)   Discuss the salient features of Bankruptcy Law in Bangladesh.                               7
(b) Discuss the main provisions of  laws relating to the Artha  Rin Adalat.                          7
(c) Do you think the existing laws relating to die Artha Rin  Adalat and Bankruptcy Law are adecpiate to deal with the delinquent borrowers? Discuss.                                                                      6
(a)   Describe the risks a banker is likely to face in paying a
(i) Post dated cheque (ii) Stale cheque and (iii) Crossed cheque over the counter. (b)  A Demand Draft issued by you on om of your branches is  lost before it reaches the recipient. As a banker what steps you will take when the purchaser of the draft demands his money back?