LPGB 6th Banking Professional Examination Short Questions

According to Bangladesh Bank guidelines, what percentage of immovable property can a financial institution acquire or hold, relative to its paid-up capital and reserves?

Answer: According to Bangladesh Bank guidelines, a financial institution can hold up to 25% of its paid-up capital and reserves in immovable property.

What is the minimum monetary value of a suit that can be filed in the Artha Rin Adalat?

Answer: Under the Artha Rin Adalat Act, the minimum value of a suit file is Tk. 500000.

Which act regulates the use of digital signatures in Bangladesh?

Answer: The Information and Communication Technology Act, 2006, regulates the use of digital signatures in Bangladesh.

As per the ICT Act, 2006, what is the retention period for electronic records in Bangladesh?

Answer: As per the ICT Act 2006, the retention period of an electronic record is at least 5 years.

What is the punishment for conducting financing business without a valid license under the Financial Institutions Act, 1993?

Answer: Punishment for conducting financing business without a valid license under the Financial Institutions Act, 1993 is imprisonment of two years, or a fine of Tk. 500000, or both.

What do you know about Contact Point Verification (CPV)?

Answer: Contact Point Verification (CPV) is a process used to verify the details and documents provided by customers, such as ID proof, address proof, and income proof, to prevent fraudulent activities. Financial institutions conduct these verifications by hiring trained verifiers/agents who collect all relevant data regarding the customer. When opening a customer’s account, the bank may use Contact Point Verification to get accurate data about the customer.

What is standing instructions?

Answer: Standing instructions are the instructions given by a customer to his banker that relate to certain financial dealings, for example:

Receipts,
Transfer, and
Payments of money

These instructions relate to dealings that are generally repetitive in nature. Some of these instructions are as follows:

Payment of life insurance premiums periodically.
Payment of periodic membership fee/ subscription to clubs, libraries, professional associations, etc.
Payment of various bills of the customer.
Transfer of a specific amount from one account of the customer to another account.
Collection of dividends on behalf of customers.
Collection of pensions from the Government. Dept. Collection of pensions from the Government. Dept.
Collection of interest on Govt securities held in safe custody or otherwise.

A Standing Instruction (SI) is a service offered to customers of a bank, wherein regular transactions that the customer wants to make are processed as a matter of course instead of initiating specific transactions each time. Once initiated, a standing instruction may go on for many months, or even years, with each cycle being processed automatically.

Example: Let us say, a customer has instructed your bank/branch in writing to send Tk. 10,000/- to his mother’s account every month, this is a standing instruction (SI). The branch will keep sending money to his mother’s account as instructed by the customer until he stops it in writing. Of course, there are charges involved. The bank meticulously follows the standing instruction.

What is the significance of crossing a cheque?

Answer: Crossing a cheque signifies that the amount should be credited to a bank account only and cannot be paid in person.

What is the limitation period for filing a suit for breach of contract?

Answer: As per the Limitation Act, 1908, the limitation period is 3 years from the date of breach.

Which document must a customer submit to the bank to obtain a duplicate Fixed Deposit Receipt (FDR)?

Answer: The customer must submit an Indemnity Bond (usually with a stamp), and sometimes a GD copy if the FDR is lost.

(Laws and Practice of General Banking, 6th BPE, Question No:10, Marks: 10*2= 20)