Principles of Banking MCQs
The primary object of a central bank is to
(A) Earn profit
(B) Advance loans to traders
(C) Safeguard the national interest
(D) All of these
Commercial banks create following money
(A) Metallic
(B) Credit
(C) Paper
(D) All of these
The following is not used in E-Banking
(A) Credit card
(B) Debitocard
(C) Cheque
(D) All of these
Credit money in the country is controlled by
(A) Central bank
(B) Cemr ercial bank
(C) Industrial bank
(D) Agneuitural bank
Scheduled bank means a bank which is registered with
(A) Stock exchange
(B) Central bank
(C) World bank
(D) All of these
On which account a bank does not pay interest
(A) Saving account
(B) Fixed deposit
(C) Current account
(D) All of these
Before opening account in bank a married woman is asked about her
(A) Husband’s name
(B) Father’s name
(C) Mother’s name
(D) Alf of these
Loans which can be recovered on demand are called
(A) Short term loans
(B) Demandloans
(C) Over draft
(D) All of these
Crossing makes the cheque
(A) Un-safe
(B) Un-acceptable
(C) Safe
(D) Acceptable
Main parties of prornissory note are
(A) One
(B) Two
(C) Three
(D) Four
No “I OWE YOU” is written instrument drawn by
(A) Trader
(B) Debtor
(C) Creditor
(D) All of these
What is the objective of foreign exchange control
(A) To stabilize exchange rate
(B) To increase government revenue
(C) Favourable balance of payment
(D) All of these
Money market deals in
(A) Promissory note
(B) Bill of exchange
(C) Marketable securities
(D) All of these
When the State Bank of Pakistan came into existence
(A) 1947
(B) 1948
(C) 1955
(D) 1972
Which function is not performed by central bank
(A) Credit creation
(B) Advancing loans
(C) Lender of last resort
(D) Bank of the public
When was Islamic banking system introduced in Pakistan
(A) 1970
(C) 1981
(B) 1972
(D) 1982
Who was the founder of commercial bank
(A) Goldsmiths
(B) Merchants
(C) Money lenders
(D) All of these
Which of the following cannot open account in a bank
(A) Pardah-nasheen woman
(B) Minor or infant
(C) Lunatic or mental patient
(D) Non-trading concerns
The loans which are issued for the period of one to five year called
(A) Demand loans
(B) Short term loans
(C) Medium term loans
(D) Long term loans
Drawee of the bank draft is a
(A) Bank on which draft is drawn
(B) Bank which issues a draft
(C) Payee of the draft
(D) Sender of amount by draft
The document which reveals the ownership of goods kept on port
(A) Bill of lading
(B) Dock warrant
(C) Delivery order
(D) Railway receipt
Stock certificate is a document issued by
(A) Commercial bank
(B) Central bank
(C) Limited companies
(D) Stock market
What percentage of total assets, a scheduled b bound to kept with in the country
(A) 60%
(B) 70%
(C) 80%
(D) 90%
The term foreign exchange includes
(A) Bank draft
(B) Letter of credit
(C) Foreign B/E
(D) All of these
Joint stock company can open the following account in bank
(A) Fixed
(B) Current
(C) Saving
(D) All of these
Which principle is followed by central bank to issue currency notes
(A) Currency principle
(B) Banking principle
(C) Both A & B
(D) None of both
An account holder does not need to write a cheque to withdraw money from following account
(A) Saving account
(B) Fixed deposit account
(C) Current account
(D) None of these
Which bank does discount the bill of public
(A) Commercial bank
(B) Agriculture bank
(C) Industrial bank
(D) All of these
Imperial Bank was established in
(A) 1921
(B) 1925
(C) 1932
(D) 1937
The Commercial Banks may be
(A) Scheduled
(B) Non-scheduled
(C) Foreign
(D) All of these
E-Banking provides benefits to the following
(A) Account holders
(B) Banker
(C) Economy
(D) All of these
controls credit money in the country
(A) Central bank
(B) Commercial bank
(C) Industrial bank
(D) Agriculture bank
Non-scheduled bank can
(A) Deal in foreign exchange
(B) Attain public confidence
(C) Open new branch without permission
(D) All of these
The nature of relations between bank and customers is
(A) Debtor & creditor
(B) Agent & principal
(C) Bailer & bailee
(D) All of these
The goods or items accepted as a security for advaning loan should be
(A) Durable
(B) Insured
(C) Under burden
(D) All of these
Cheque is always crossed by
(A) Drawer
(B) Drawee
(C) Holder
(D) All of these
The main parties of promissory note are
(A) One
(B) Two
(C) Three
(D) Four
Which one can be crossed?
(A) Money order
(B) Postal order
(C) Credit card
(D) All of these
Which instrument is not dealt at stock exchange?
(A) Shares
(B) Debentures
(C) Both
(D) Bills of exchange
PICIC was established as
(A) Private company
(C) Partnership
(B) Limited company
(D) None of these
PICIC was established in
(A) 1950
(B) 1951
(C) 1957
(D) 1961
Modaraba may be
(A) Specific or multi purpose
(B) Prepetual
(C) For specific period
(D) All of these
Document used for deposit money in bank is
(A) Receipt of fixed account
(B) Pay in slip
(C) Debit advice
(D) Credit advice
The customer can transact in online banking with
(A) Only with related branch
(B) Any branch of related bank
(C) Any branch of any bank
(D) Where the facility of online is available
The duty of State Bank of Pakistan is
(A) Issue note
(B) Issue loans to people
(C) Acts as trustee
(D) Money transfer to traders
The actual reason of variation in rate of exchange is
(A) Trading situation
(B) Change in value of money
(C) Political situation
(D) Change in demand and supply of currencies
Agricultural Development Bank formed in
(A) 1949
(B) 1951
(C) 1956
(D) 1961
Commercial Banks were nationalized in Pakistan in
(A) 1965
(B) 1974
(C) 1981
(D) 1984
Central Bank for all country’s banks is
(A) Leader
(B) Custodian
(C) Fellow
(D) Lord
Commercial Bank is the financial adviser for
(A) Government
(B) Account holders
(C) Financial institutions
(D) Local government
Treasury bill is issued by
(A) Central bank
(B) Government
(C) Commercial bank
(D) Trader
The pates in pledge are
(A) Two
(B) Three
(C) Four
(D) Five
Facility of overdraft is provided only to
(A) Shareholder
(B) Debenture holder
(C) Account holder
(D) All of these
Banks can be formed
(A) Under partnership
(B) Under joint stock company
(C) Under cooperative society
(D) All of above
When interest free banking started in Pakistan
(A) 1st January, 1971
(B) 1st July, 1975
(C) 1st January, 1981
(D) 1st July, 1984
In country, the Central Bank is the custodian for
(A) Economic system
(B) Financial system
(C) Industrial system
(D) Economic and financial system
The account exempt from zakat and income tax is
(A) Saving account
(B) Fixed account
(C) Foreign currency account
(D) Government employees account
Reserve Bank of India was established in
(A) 1935
(B) 1934
(C) 1937
(D) 1936
Foreign exchange control reduces
(A) Circulation of capital
(B) Export of capital
(C) Import of capital
(D) None of these
In Pakistan Bank has monopoly of issue note
(A) Commercial Bank
(B) Industrial Bank
(C) State Bank
(D) None of these
When Agricultural Development Bank was established
(A) 1957
(B) 1965
(C) 1961
(D) 1969
Days of grace are given on document
(A) Bill of exchange
(B) Promissory note
(C) Cheque
(D) Draft
A trustee is the of property
(A) Owner
(B) Caretaker
(C) Mortgagee
(D) None of these
Money deposited in the bank is considered by a customer as
(A) Asset
(B) Liability
(C) Saving
(D) Investment
Schedule bank means a bank which is registered with
(A) Stock exchange
(B) Central Bank
(C) World Bank
(D) All of these
Pakistan Central Bank established in
(A) 1947
(B) 1948
(C) 1949
(D) 1950
The primary objective of central bank is to
(A) Earn profit
(B) Advance loans to traders
(C) Safeguard to national interest
(D) Alf of these
Term “dishonouring of cheque” is used when
(A) Bank refuse to pay
(B) Bank stop payment
(C) Bank delay the payment
(D) All of these
Which document is attached to the application for the registration of bank
(A) Memorandum of bank
(B) Articles of bank
(C) Prospectus of bank
(D) All of these
Which things can be accepted by bank as security at the time of granting loans
(A) Gold and silver
(B) Property
(C) Shares and debentures of company
(D) All of these
A commercial bank does the business of
(A) Accepts deposits and advances loan
(B) Issue currency notes
(C) Rediscounting of bill of exchange
(D) All of these
A drawee of cheque is
(A) Payee
(B) Bank
(C) Customer
(D) Endorsee
Central Bank of Pakistan was established in
(A) 1947
(B) 1948
(C) 1949
(D) 1950
What percentage of total assts a scheduled bank is bound to keep within the country?
(A) 60%
(B) 70%
(C) 80%
(D) 90%
Which one of the following banks performs its function according to the instructions, of Central
Bank?
(A) Foreign Bank
(B) Scheduled Bank
(C) Non-Scheduled Bank
(D) All of these
Which of the following banks is called “lender of last resort”?
(A) Saving Bank
(B) Mortgage Bank
(C) Central Bank
(D) Schedule Bank
Which was the first Central Bank of India?
(A) Reserve Bank
(B) Bank of India
(C) Imperial Bank
(D) Bank of Venice
Which of the following is an Agency Service of Commercial Banks?
(A) Collection of dividends
(B) Issuance of credit instruments
(C) Receipt of Zakat and Ushr
(D) Receipt of Hajj applications
What is received by the post office on money order?
(A) Profit
(B) Interest
(C) Commission
(D) Duty
Long-term loan is advanced against the following security
(A) Non-material
(B) Material
(C) Personal
(D) All of these
Pay-in-slip is a written proof of
(A) Transferring money
(B) Depositing money
(C) Withdrawing money
(D) All of those
Which of the following accounts was introduced by the Government of Pakistan on 1st January,
1981?
(A) Saving account
(B) Profit and loss sharing saving account
(C) Profit and loss sharing term deposit
(D) Current account
Acceptance is compulsory for
(A) Letter of credit
(B) Bill of exchange
(C) Promissory note
(D) Cheque
Money deposited in the bank is considered for bank.
(A) Asset
(B) Liability
(C) Investment
(D) Saving
Which of the following banks is not prevailing in Pakistan?
(A) Consumers Bank
(B) Saving Bank
(C) Exchange Bank
(D) School Bank
Which of the following banks is an association of international banks?
(A) Foreign Bank
(B) Central Bank
(C) Exchange Bank
(D) Consortium Bank
What does bank demand for opening a new account?
(A) Phone number
(B) Academic qualification
(C) Introductory reference
(D) Birth certificate
Bank is responsible for country’s economic and monetary progress
(A) Central
(B) Commercial
(C) Agricultural
(D) Co-operative
Qualitative methods of monetary policy do not include
(A) Direct actions
(B) Publicity
(C) Bank rate policy
(D) Moral persuasion
What are the objectives of monetary policy?
(A) Stability in price
(B) Exchange stability
(C) Stability in capital market
(D) All these
State Bank of Pakistan was inaugurated by
(A) Laiquat Ali Khan
(B) Miss Fatima Jinnah
(C) Quaid-e-Azam Muhammad Ali Jinnah (RA)
(D) Ayub Khan
Schedule Bank is registered under State Bank of Pakistan Act
(A) 1965
(B) 1956
(C) 1950
(D) None of these
The bank formed under Royal Charter is
(A) Bank of Venice
(B) Bank of Spain
(C) State Bank of Pakistan
(D) Chartered Bank of England
Which Bank was formed under the Royal order
(A) Bank of Venice
(B) State Bank of Pakistan
(C) Bank of Barcelona
(D)Chartered Bank of England
Which bank does discount the bill of public
(A) Commercial bank
(B) Agriculture bank
(C) Industrial bank
(D) All of these
Which Bank protects costly things of public?
(A) Commercial Bank
(B) Central Bank
(C) Industrial Bank
(D) Agricultural Bank
Stock certificate is a document issued by
(A) Commercial bank
(B) Central bank
(C) Limited companies
(D) Stock market
A Commercial Bank keeps less cash reserve if
(A) Cheque is used in most of the transactions
(B) Clearing House facility is available
(C) Rediscounting facility is available
(D) All these
Commercial Bank can be regarded by nature as
(A) Depository Bank
(B) Central Bank
(C) Investment Bank
(D) None of these
The primary objective of Commercial Bank is
(A) To earn profit
(B) To help the govt.
(C) To help the poor
(D) To issue notes
In Pakistan Clearing House is
(A) Commercial Bank
(B) Scheduled Bank
(C) Central Bank
(D) none of these
Commercial bank advises its customers on
(A) Household matters
(B) Financial matters
(C) Political matters
(D) All of these
Commercial bank is economic advisor of
(A) Customers
(B) Government
(C) Local government
(D) Public
Which is the guardian of credit money?
(A) Central Bank
(B) Commercial Bank
(C) Saving Bank
(D) Scheduled Bank
The rate at which the Central Bank and Commercial Banks purchases and sell foreign currency is
called
(A) Spot rate
(B) Inter bank rate
(C) Forward rate
(D) Market rate
Cash reserve of a Commercial Bank may consist of
(A) Cash in hand
(B) Cash kept with Central Bank
(C) Cash kept with other Banks
(D) All of above
Which has monopoly to issue currency notes?
(A) Commercial Bank
(B) Government
(C) Central Bank
(D) All of these
Commercial banks normally advance loan for
(A) Long-term period
(B) Medium-term period
(C) Short-term period
(D) For progress of trade
Basic objective of commercial bank is
(A) Welfare of people
(B) Help of government
(C) To earth profit
(D) Arrangement of foreign exchange
If drawer of cheque is a payee himself then what word is written after the word pay
(A) Order
(B) Bearer
(C) Self
(D) None of these
For which cheque bank pays money ar its counter?
(A) Bearer cheque
(B) Order cheque
(C) Crossed cheque
(D) Both A and B
Each leaf of the Cheque Book contains customer’s
(A) Father’s name
(B) Address
(C) Telephone number
(D) Account number
Cheque is an un-conditional order
(A) From customer
(B) From Bank
(C) From government
(D) None of them
A cheque which can be cashed by its holder
(A) Bearer cheque
(B) Order cheque
(C) Cross cheque
(D) All these
The parties of cheque are
(A) Two
(B) Three
(C) Four
(D) Five
The cheque which cannot be encashed at bank counter is called
(A) Bearer cheque
(B) Order cheque
(C) Cross cheque
(D) Blank cheque
In which account, cheque book is not issued?
(A) Current a/c
(B) Saving a/c
(C) Foreign currency a/c
(D) Fixed deposit a/c
Acceptable credit instruments are
(A) Written
(B) Oral
(C) Foreign
(D) Domestic
Which instrument is not dealt at stock exchange?
(A) Shares
(B) Debentures
(C) Both
(D) Bills of exchange
Bills of exchange is a negotiable instrument that contains
(A) A written order
(B) Conditional written order
(C) Unconditional written order
(D) None of these
Generally, the instruments which are used in foreign receipts and payments called
(A) Exchange control
(B) Foreign exchange
(C) Letter of credit
(D) All these
Credit instrument drawn by one bank on another bank is called
(A) Cheque
(B) Bill of exchange
(C) Bank draft
(D) Postal order
The credit instrument which has four parties is
(A) Bill of exchange
(B) Cheque
(C) Bank draft
(D) Promissory note
The parties bill of exchange are
(A) Three
(B) Five
(C) Six
(D) Seven
Which is comparatively used more?
(A) Bill of exchange
(B) Cheque
(C) Draft
(D) Promissory note
Banks were nationalised in Pakistan in
(A) 1971
(B) 1974
(C) 1978
(D) 1979
Head office of National Bank of Pakistan is situated in
(A) Lahore
(B) Islamabad
(C) Quetta
(D) Karachi
National Bank of Pakistan was established in
(A) 1948
(B) 1949
(C) 1950
(D) 1951
Islam forbids
(A) Investment
(B) Partnership
(C) Trade
(D) Interest
When was Islamic banking system introduced in Pakistan
(A) 1970
(B) 1972
(C) 1981
(D) 1982
For withdrawal of amount bank issues to account holders
(A) Cash book
(B) Cheque book
(C) Bank draft
(D) Pass book
Bank is an institution
(A) Social
(B) Religious
(C) Financial
(D) Welfare
The person who opens a bank account is called
(A) Owner of the bank
(B) Customer of the bank
(C) Employee of the bank
(D) Director of the bank
Overdraft facility is available in
(A) Saving account
(B) Fixed account
(C) Current account
(D) None of these
On which of the following amount of overdraft. Bank receives interest
(A) Fix
(B) Total
(C) Used
(D) All these
Who chooses Governor of Central Bank
(A) Public
(B) Shareholders
(C) Government
(D) Minister of State
Which of the following Bank performs its functions according to the instructions of Central Bank
(A) Foreign Bank
(B) Schedule Bank
(C) Non-Schedule Bank
(D) All these
Central Bank was established
(A) 1948
(B) 1950
(C) 1951
(D) 1960
Which account is suitable for business community?
(A) Fixed account
(B) Current account
(C) Saving account
(D) All these
Which method is prevailing in Pakistan for issuing note
(A) Fixed fiduciary system
(B) Proportional reserve system
(C) Both A & B
(D) All these
The following is used in E-Banking
(A) Debit card
(B) Credit card
(C) Both A & B
(D) None of these
Which Banks can open their branches in foreign countries?
(A) Scheduled Bank
(B) Non scheduled Bank
(C) Both A & B
(D) None of these
Which of the following changes cause to change in foreign exchange
(A) Change in exports and imports
(B) Change in capital flow
(C) Change in Bank rate
(D) All these
What percentage of total assets a scheduled bank is bound to kept with in the country
(A) 60%
(B) 70%
(C) 80%
(D) 90%
Modaraba may be
(A) Specific or multi purpose
(B) Prepetual
(C) For specific period
(D) All of these
A document which shows the title of goods shipped through a general ship is called
(A) Bill of lading
(B) Proforma invoice
(C) Bill of entry
(D) License
Bank provide cash finance facility to such account holders who have
(A) Saving account
(B) Current account
(C) Foreign currency account
(D) Basic banking account
The document/s used in on line banking is / are
(A) Debit card
(B) Credit card
(C) A.T.M. card
(D) All of these
Bank provide Qarz-e-Hasna to
(A) Entrepreneur
(B) Industrialist
(C) Capitalist
(D) Students
The share of federal government in the paid up capital of Industrial Development Bank of Pakistan is
(A) 50%
(B) 51%
(C) 54%
(D) 57%
Obtaining loan against life insurance policy is
(A) Easy
(B) Difficult
(C) Complicated
(D) Impossible
Document used to deposit money into Bank
(A) Bank statement
(B) Pay in slip
(C) Credit voucher
(D) Pass book
The parties of promissory note are
(A) 2
(B) 3
(C) 4
(D) 5
Which affairs of bank are revealed by Articles of Association?
(A) Internal
(B) External
(C) Political
(D) Financial
What is necessary to withdraw money through ATM?
(A) I. D. card
(B) Cheque
(C) Pin code
(D) None of these
Illiterate person provides to the bank for identity
(A) Birth certificate
(B) Thumb impression
(C) Photograph
(D) All of these
Refund of demand loans is done
(A) After six months
(B) On demand
(C) On fixed period
(D) After three months
The word “Bank” has been derived from German word
(A) Back
(B) Bancus
(C) Banco
(D) None of these
If a Bank is unable to submit prospectus at the time of registration, then it has to submit
(A) Statement in lieu of prospectus
(B) Certificate of incorporation
(C) Certificate of commencement
(D) None of these
What is the purpose of using credit card
(A) To purchase goods and services
(B) To win the prices from Bank
(C) To travel abroad
(D) To invest the savings
In case of inflation in the country, the rate of margin is
(A) Increased
(B) Reduced
(C) Waived
(D) All these
Pay-in-slip is written evidence of
(A) Transferring money
(B) Depositing money
(C) Withdrawing money
(D) All these
A trustee is the
(A) Owner of property
(B) Care-taker of pi-operty
(C) Mortgagee of property
(D) None of these
Long term loan is advanced against the following security
(A) Non-material
(B) Material
(C) Personal
(D) All these
What is received by the Post Office on money order
(A) Profit
(B) Interest
(C) Commission
(D) Duty
A developed or organized money market is always
(A) Elastic
(B) Less elastic
(C) More elastic
(D) Not elastic
Where is Head Office of Z.T.B.L.
(A) Karachi
(B) Lahore
(C) Peshawar
(D) Islamabad
The amount of money in the account of account holder is called
(A) Profit
(B) Interest
(C) Deposit
(D) Loan
Capital market does not deal in
(A) Shares
(B) Treasury bill
(C) Debenttires
(D) Bonds
Which letter of credit is accompanied by some documents
(A) Confirmed
(B) Documentary
(C) Non-documentary
(D) All these
The nature of relationships between Bank and customer are
(A) Debtor and creditor
(B) Agent and principal
(C) Bailor and Bailee
(D) All these
Bank of England was formed in
(A) 1594
(B) 1694
(C) 1794
(D) 1894
