Banking Management Chapters 7-11 Quiz

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Questions and Answers

What type of relationship exists between banks and their clients?

  • Contractual
  • Fiduciary (correct)
  • Informal
  • Formal

What is the primary responsibility of a bank?

  • Protecting customers' deposit and secrecy (correct)
  • Granting loans
  • Investing in stocks
  • Providing financial advice

What is the significance of commercial banks in the development process?

  • They grant loans to individuals
  • They play a crucial role in economic development (correct)
  • They invest in stocks
  • They provide financial advice

What is a bank considered in terms of its function?

<p>A financial intermediary (D)</p> Signup and view all the answers

What is the bank's duty towards its customers?

<p>To carry out duties in utmost good faith and due diligence (D)</p> Signup and view all the answers

What is the primary focus of chapter 5 in the manual?

<p>Clearing and Collection of Instruments (A)</p> Signup and view all the answers

Which of the following is NOT discussed in chapter 5?

<p>Bills Collection and Remittance (B)</p> Signup and view all the answers

Where can one find the discussion on Bills Collection and Remittance in the manual?

<p>Chapter 6 (C)</p> Signup and view all the answers

What is the main topic of chapter 6 in the manual?

<p>Bills Collection and Remittance (C)</p> Signup and view all the answers

What is BACH an acronym for in the context of chapter 5?

<p>Bangladesh AutomatedClearingHouse (C)</p> Signup and view all the answers

What is the abbreviation for Automated Clearing House?

<p>ACH (D)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Receiving Bank (B)</p> Signup and view all the answers

What is the process of exchanging payment instructions between banks?

<p>Clearing (B)</p> Signup and view all the answers

What does the abbreviation 'CBS' stand for in the context of banking?

<p>Core Banking Solution (B)</p> Signup and view all the answers

What is the term for the bank that initiates the payment instruction?

<p>Paying Bank (A)</p> Signup and view all the answers

What is the primary source of funding for a bank's business?

<p>Deposits from retail and corporate customers (D)</p> Signup and view all the answers

What is the main objective of deposit mobilization in banking?

<p>To collect money from various customer groups (D)</p> Signup and view all the answers

Why are banks introducing various deposit schemes?

<p>To attract deposits from various customer groups (A)</p> Signup and view all the answers

What is the primary reason banks are opening branches across the country?

<p>To reduce dependence on urban deposits (A)</p> Signup and view all the answers

What is the primary function of deposit mobilization in banking?

<p>To collect money from various customer groups (A)</p> Signup and view all the answers

What is the primary function of the Presenting Bank in the clearing process?

<p>To present the instrument to the Paying Bank (D)</p> Signup and view all the answers

What is the role of the Paying Bank in the clearing process?

<p>To settle the amount with the Presenting Bank (B)</p> Signup and view all the answers

What is the term for the processing of instruments at the Participating Bank Module?

<p>PBM (A)</p> Signup and view all the answers

What is the name of the real-time settlement system?

<p>RTGS (B)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day?

<p>Same Day Clearing (C)</p> Signup and view all the answers

When a customer has multiple debts outstanding, what is the role of the bank in appropriating payment?

<p>The bank can exercise its right to appropriation without needing the customer's direction (D)</p> Signup and view all the answers

What is the purpose of a Garnishee Order?

<p>To instruct the bank to hold funds until directed by the court (D)</p> Signup and view all the answers

What is the banker's obligation when a customer issues a cheque?

<p>To verify the customer's account and then honour the cheque (B)</p> Signup and view all the answers

What is the bank's implied right in relation to services rendered?

<p>To charge interest and commission on services rendered (A)</p> Signup and view all the answers

What is the banker's obligation in relation to customer records?

<p>To maintain proper and accurate records (C)</p> Signup and view all the answers

What is the purpose of obtaining a clear instruction from joint account holders?

<p>To avoid disputes in making payments (A)</p> Signup and view all the answers

What does the term 'garnishee' refer to?

<p>The person who has been served with the order (C)</p> Signup and view all the answers

What is the purpose of the 'Garnishee Order Nisi'?

<p>To give the banker an opportunity to prove the order is incorrect (C)</p> Signup and view all the answers

What happens to the customer's cheques if the 'Garnishee Order Absolute' is issued?

<p>The banker must dishonor all cheques (C)</p> Signup and view all the answers

Why should a banker carefully examine the terms of the 'Garnishee Order'?

<p>To understand the extent of the garnishment (D)</p> Signup and view all the answers

What should a banker do if a 'Garnishee Order' is received after debiting the account but before making cash payment?

<p>Refuse payment with an appropriate objection (D)</p> Signup and view all the answers

What is the primary consequence of a 'Garnishee Order Absolute' on a customer's account?

<p>The customer's account is garnished (B)</p> Signup and view all the answers

What is the banker's responsibility when a 'Garnishee Order' is issued?

<p>To carefully examine the terms of the order (B)</p> Signup and view all the answers

What is the significance of the 'Garnishee Order Nisi' becoming an absolute order?

<p>The order is enforced and becomes absolute (D)</p> Signup and view all the answers

What is the purpose of having clear instructions from joint account holders when opening an account?

<p>To avoid disputes in making payments (A)</p> Signup and view all the answers

What is the primary function of the Presenting Bank in the clearing process?

<p>To submit the instrument to the Clearing House (C)</p> Signup and view all the answers

Which chapter of the manual discusses the Bills Collection and Remittance?

<p>Chapter 6 (A)</p> Signup and view all the answers

What is the role of the Paying Bank in the clearing process?

<p>To make the payment to the Collecting Bank (D)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Ordering Bank (B)</p> Signup and view all the answers

What is the process of exchanging payment instructions between banks?

<p>Clearing (B)</p> Signup and view all the answers

What is the primary role of the Collecting Bank in the clearing process?

<p>To present the instrument to the Paying Bank for payment (A)</p> Signup and view all the answers

What is the term for the process of exchanging payment instructions between banks?

<p>Clearing (C)</p> Signup and view all the answers

What is the primary responsibility of the Paying Bank in the clearing process?

<p>To make payment to the payee (C)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Originating Bank (C)</p> Signup and view all the answers

What is the term for the bank that initiates the payment instruction?

<p>Originating Bank (A)</p> Signup and view all the answers

What is the primary purpose of a banker's efforts to diversify sources of funds?

<p>To reduce dependence on retail deposits (B)</p> Signup and view all the answers

What is the primary function of deposit mobilization in banking?

<p>To mobilize savings through intensive deposit collection (C)</p> Signup and view all the answers

What is the primary source of funding for a bank's business?

<p>Deposits from retail and corporate customers (B)</p> Signup and view all the answers

Why are banks introducing various deposit schemes?

<p>To attract deposits from various customer groups (C)</p> Signup and view all the answers

What is the primary role of a bank in the economy?

<p>To play a major role in the development process (C)</p> Signup and view all the answers

Which of the following is the primary function of the Clearing House in the clearing process?

<p>To facilitate the exchange of instruments between banks (D)</p> Signup and view all the answers

Which bank is responsible for verifying the authenticity of the instruments in the clearing process?

<p>Presenting Bank (C)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day in the Bangladesh banking system?

<p>RTGS (Real Time Gross Settlement) (D)</p> Signup and view all the answers

Which of the following is an abbreviation for 'Bangladesh Automated Clearing House'?

<p>BACH (D)</p> Signup and view all the answers

What is the term for the bank that initiates the payment instruction in the clearing process?

<p>Originating Bank (B)</p> Signup and view all the answers

What is the primary responsibility of the Paying Bank in the clearing process?

<p>To verify the genuineness of the instrument (D)</p> Signup and view all the answers

What is the term for the bank that initiates the payment instruction?

<p>Originating Bank (C)</p> Signup and view all the answers

What is the term for the processing of instruments at the Participating Bank Module?

<p>PBM (B)</p> Signup and view all the answers

What is the primary function of the Collecting Bank?

<p>To present the instrument to the paying bank (C)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day?

<p>Same Day Clearing (B)</p> Signup and view all the answers

What happens when a customer has multiple debts outstanding and no direction is given to the banker?

<p>The bank can exercise its right of appropriation and apply it in payment of any debt. (C)</p> Signup and view all the answers

What is the implied right of a banker in relation to services rendered?

<p>To charge for services rendered and sold to a customer. (A)</p> Signup and view all the answers

What is the obligation of a banker when a customer issues a cheque?

<p>To honour the customer’s cheque after the necessary verifications. (A)</p> Signup and view all the answers

What is the purpose of a Garnishee Order?

<p>To instruct a bank that funds held on behalf of a debtor should not be released until directed by the court. (D)</p> Signup and view all the answers

What is the obligation of a banker in relation to customer records?

<p>To maintain secrecy of customer’s account and maintain proper records. (B)</p> Signup and view all the answers

What is the primary consequence of a 'Garnishee Order Absolute' on a customer's cheques?

<p>The cheques are dishonored regardless of the amount (C)</p> Signup and view all the answers

What should a banker do if a 'Garnishee Order' is received after debiting the account but before making cash payment?

<p>Refuse payment with an appropriate objection (C)</p> Signup and view all the answers

What is the purpose of having a clear instruction from joint account holders when opening an account?

<p>To avoid complications in making payment that may arise as a future dispute (A)</p> Signup and view all the answers

What is the significance of the 'Garnishee Order Nisi' becoming an absolute order?

<p>It attaches the customer's account and the banker must dishonor the cheques (B)</p> Signup and view all the answers

What happens if a 'Garnishee Order' is received after debiting the account but before making cash payment?

<p>The payment is refused with an appropriate objection (A)</p> Signup and view all the answers

What is the role of the bank in relation to a 'Garnishee Order'?

<p>To attach the customer's account and dishonor the cheques (A)</p> Signup and view all the answers

What is the primary consequence of a 'Garnishee Order' on a customer's account?

<p>The account is attached and the banker must dishonor the cheques (A)</p> Signup and view all the answers

What is the significance of the 'Garnishee Order Nisi'?

<p>It gives the banker an opportunity to prove that the order could not be enforced (C)</p> Signup and view all the answers

What is the role of the bank in relation to a customer's cheques?

<p>To dishonor the cheques if a 'Garnishee Order Absolute' is issued (D)</p> Signup and view all the answers

What happens to the customer's account if a 'Garnishee Order Absolute' is issued?

<p>The account is attached and the banker must dishonor the cheques (C)</p> Signup and view all the answers

What is the main focus of Chapter 5 in the manual?

<p>Clearing and Collection of Instruments (C)</p> Signup and view all the answers

What is the role of the Paying Bank in the clearing process?

<p>To receive the payment instruction from the payer (B)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Paying Bank (A)</p> Signup and view all the answers

What is the primary function of the Collecting Bank in the clearing process?

<p>To collect the payment on behalf of the customer (C)</p> Signup and view all the answers

What is the abbreviation for Bangladesh Automated Clearing House?

<p>BACH (B)</p> Signup and view all the answers

What is the primary function of the Presenting Bank in the clearing process?

<p>To process the payment instruction (D)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Receiving Bank (B)</p> Signup and view all the answers

What is the primary responsibility of a bank in relation to its customers?

<p>To protect customers' deposits and secrecy (C)</p> Signup and view all the answers

What is the abbreviation for Bangladesh Automated Clearing House?

<p>BACH (D)</p> Signup and view all the answers

What is the nature of the relationship between banks and their clients?

<p>Fiduciary and based on trust (A)</p> Signup and view all the answers

What is the primary function of the Collecting Bank in the clearing process?

<p>To collect the payment on behalf of the customer (A)</p> Signup and view all the answers

What is a bank's role in the economy?

<p>To act as a financial intermediary (B)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day?

<p>Same Day Clearing (C)</p> Signup and view all the answers

What is the significance of commercial banks in the development process?

<p>They facilitate economic development (C)</p> Signup and view all the answers

What is the bank's supreme responsibility?

<p>To protect customers' deposits and secrecy (D)</p> Signup and view all the answers

What is the purpose of deposit mobilization in banking?

<p>To diversify sources of funds for the bank (D)</p> Signup and view all the answers

What is the primary source of funding for a bank's business?

<p>Deposits from retail and corporate customers (D)</p> Signup and view all the answers

What is the main objective of a bank's efforts to diversify sources of funds?

<p>To reduce dependence on other banks (A)</p> Signup and view all the answers

What is the primary role of a bank in the economy?

<p>To facilitate transactions and provide financial services (C)</p> Signup and view all the answers

What is the term for the process of exchanging payment instructions between banks?

<p>Clearing (A)</p> Signup and view all the answers

What does the term 'BACH' stand for in the context of chapter 6?

<p>Bangladesh Automated Clearing House (C)</p> Signup and view all the answers

What is the responsibility of the Presenting Bank in the clearing process?

<p>To initiate the payment instruction to the Paying Bank (A)</p> Signup and view all the answers

What is the term for the processing of instruments at the Participating Bank Module?

<p>PBM (C)</p> Signup and view all the answers

What is the primary responsibility of the Paying Bank in the clearing process?

<p>To settle the payment instruction with the Presenting Bank (B)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day?

<p>Same Day Clearing (A)</p> Signup and view all the answers

What is the right of the customer regarding the appropriation of payment made by him?

<p>Banker's right to appropriate payment (A)</p> Signup and view all the answers

What is the obligation of a banker regarding customer's cheques?

<p>To honour the customer's cheque after verification (A)</p> Signup and view all the answers

What is the purpose of a garnishee order?

<p>To instruct a bank not to release funds (A)</p> Signup and view all the answers

What type of order is a garnishee order?

<p>Court order (D)</p> Signup and view all the answers

What happens if a customer has multiple debts outstanding and no direction is given to the banker?

<p>The banker can exercise its right of appropriation and apply it in payment of any debt (D)</p> Signup and view all the answers

What is the purpose of obtaining clear instruction from joint account holders when opening an account?

<p>To avoid any future dispute between the joint account holders (D)</p> Signup and view all the answers

What is the significance of 'Garnishee Order Nisi'?

<p>It is an opportunity for the banker to prove that the order cannot be enforced (C)</p> Signup and view all the answers

What should the banker do if a 'Garnishee Order' is received after debiting the account but before making cash payment?

<p>Refuse payment with an appropriate objection (C)</p> Signup and view all the answers

What happens to the customer's cheque if a 'Garnishee Order Absolute' is issued?

<p>The cheque will be dishonored (D)</p> Signup and view all the answers

What is the primary consequence of a 'Garnishee Order Absolute' on a customer's account?

<p>The account is fully attached (D)</p> Signup and view all the answers

What is the responsibility of the banker when a 'Garnishee Order' is received?

<p>To go through the terms of the order carefully (A)</p> Signup and view all the answers

What should the banker do when a customer has multiple debts outstanding and no direction is given?

<p>Appropriate the payment as the banker sees fit (D)</p> Signup and view all the answers

What is the term for the bank that receives the payment instruction from the payer?

<p>Presenting Bank (A)</p> Signup and view all the answers

What is the role of the Collecting Bank in the clearing process?

<p>To present the instruments to the Paying Bank (B)</p> Signup and view all the answers

What is the term for the system where instruments are cleared on the same day?

<p>Same-day Clearing (A)</p> Signup and view all the answers

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