Q.1    Please write the alphabate of selected choice in the answer column:                           (06)
                                                                                                                                                 (Answer)

i	The primary relationship between the banker and the customer is: A) principal and agent              B) bailor & bailee C) debtor and creditor            D) pawner and pawnee E) None of the above
ii	When the banker accepts valuables for safe custody banker is: A) the bailee and customer is the bailor B) the agent and customer is the principal C) the debtor and customer is the creditor D) the pawnee and customer is the pawner E) None of the above
iii	When the banker lends money the relationship between banker and customer is: A) banker is bailee and customer is bailor B) banker is agent and customer is principal C) banker is pawnee and customer is pawner D) banker is creditor and customer is debtor E) None of the above
iv	Banking Companies are formed under: A) Banker’s Book Evidence Act, 1891 B) Banking Companies Ordinance, 1962 C) Negotiable Instruments Act, 1881 D) Companies Ordinance, 1984 E) None of the above
v	Banking law prescribes that a banking company in Pakistan will be a: A) Public limited company                   B) Private limited company C) Company limited by guarantee        D) Partnership firm E) None of the above
vi	Lien is a right of creditor to: A) retain the possession of goods and securities of the debtor B) protect the interest of the debtor C) create mortgage on the debtors property D) create a charge on the debtors assets E) None of the above

Q.2    Messrs Best Business Corporation is a public limited company operating for quite a few years.           The corporation wants to open its main business account with your bank:                    (15)
                                                                                                                                                 (Answer)

i	a) Enlist the documents you would need to open this account. i) _________________________________________________________ ii) _________________________________________________________ iii) _________________________________________________________ iv) _________________________________________________________ v) _________________________________________________________ vi) _________________________________________________________
ii	Why do you need the resolution of the Board of Directors to open his account?
iii	Why the bankers ask the copies of the financial statements of the last three years.
iv	What action you will take on the account of the company when you come to know that one of the members of the Board of Directors has died?
v	Where will you look for the following powers of the company? i) powers to borrow for the company ii) power/authority to borrow against fixed assets of the corporation.

Q.3    What action you will take in the following cases? (12)

a	A cheque of Rs 25,000/- dated 13 August, 2006 is presented for payment on August 18, 2006 after you have confirmed the death of the account holder on August 15, 2006.
b	A valued customer asks you on telephone to stop payment of the cheque No.3396054 dated July 14, 2006 which he has issued to Mr. Mahmood Ali Agha.
c	A customer has given you standing instructions to pay his daughter’s school fee by 10th of every month by pay order. You want to comply with this instruction but there is not sufficient credit balance in the account to issue the pay order.

Q.4 A customer of your bank wants to remit Rs 10,000/- to his daughter in another city in Paksitan. He wants the money to reach his daughter at the earliest. (09)

a	Which method of remittance you will recommend?
b	What precautions will be necessary to transfer the funds electronically?
c	Why you would apply test and code on the remittance message, if you are sending it by TT or MT?

Q.5 State Bank of Pakistan has issued a set of Prudential Regulations for Banks and DFIs. Answer the following questions about these regulations: (10)

a	Which Prudential Regulations cover the issue of Know Your Customer (KYC)
b	Which Prudential Regulations describe the precautions to avoid money laundering?
c	What are Suspicious Transactions? What are their forms, as described in the Prudential Regulations?
d	Describe the duration for which the record of disputed/under litigation cases is to be kept in easy availability according to Prudential Regulations.

Q.6 A sum of US$ 5600.00 is to be remitted to a university in USA. The student is keen to remit it at the earliest. (08)

a	Suggest various methods used for the purpose.
b	Evaluate the use of SWIFT method for the purpose.

 

Q.7 a)	Mr. Yamin has presented an open order cheque for Rs 5,000/- at the cash counter of your bank branch. He desires its encashment. How you will handle this matter so that your payment is in due course? (05)
b)	How you will handle the above cheque if it was payable per bearer? (05)

Q.8 Mr. Ghaffar wants to purchase a car and pay the price in 48 monthly installments. He has been advised to take it on a lease-and-buy-back or on hire-purchase. (10)

a	What options you will suggest to him and why?
b	How much down payment by Mr. Ghaffar will be needed?
c	How you will structure the monthly installment for adjustment of total price including IRR.

Q.9 Mr. Murtaza works in a public limited company as Systems Analyst. He is a permanent employee and draws a monthly salary of Rs 55,000/- after deduction of Income Tax and contribution to the Provident Fund his take-home salary is Rs 43,000/- per month.

He has approached you for a personal loan of Rs 120,000/- to pay the medical college fee of his daughter. Discuss the following issues in this connection: (10)

a	Will you allow this personal loan?
b	How you will secure banks position?
c	What shall be the role of the employer in the process of recovery?

Q.10 Write short notes on: (10)

a	Withdrawal of money through ATMs.
b	Travelers Cheque and their use.
c	Advantages and disadvantages of Credit Cards.
d	Effects of General Crossings and Special Crossing on Negotiable Instruments.