Banking Operations and Management
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Questions and Answers

What topic is discussed in chapter 10 of the manual?

  • Laws and Regulations Related to General Banking (correct)
  • Fraud, Forgeries & Malpractices Related to General banking
  • Risk Management
  • Bank Locker and their different issues

    • What is the primary responsibility of a bank?

  • To provide financial advice to clients
  • To provide loans to clients
  • To protect customers' deposit and secrecy (correct)
  • To make profits for shareholders

    • What kind of relationship exists between a bank and its clients?

  • Business partnership
  • Social
  • Contractual
  • Fiduciary (correct)

    • What is a bank's role in the economy?

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

    What is the significance of commercial banks in economic development?

    <p>They are a backbone of the economy</p> Signup and view all the answers

    How many chapters does the manual have?

    <p>Twelve</p> Signup and view all the answers

    What is the topic of chapter 3 of the manual?

    <p>Opening and operations of different bank accounts</p> Signup and view all the answers

    What is discussed in chapter 5 of the manual?

    <p>Clearing and Collection of Instruments, BACH, BACPS Cash, and vault managements</p> Signup and view all the answers

    What is the topic of chapter 2 of the manual?

    <p>Banker customer relationship</p> Signup and view all the answers

    What is included in the manual to facilitate learning?

    <p>A good number of questions</p> Signup and view all the answers

    What is the year of the Negotiable Instrument Act?

    <p>1881</p> Signup and view all the answers

    What is the year of the Money Laundering Prevention Act?

    <p>2012</p> Signup and view all the answers

    What is the year of the Anti-terrorism Act?

    <p>2009</p> Signup and view all the answers

    What is the name of the Act related to bankers' books evidence?

    <p>The Bankers' Books Evidence Act, 1891</p> Signup and view all the answers

    What chapter is related to Fraud, Forgeries, and Malpractices in banking?

    <p>Chapter 11</p> Signup and view all the answers

    What is the primary legislation that governs banking companies in Bangladesh?

    <p>The Bank Companies Act, 1991</p> Signup and view all the answers

    Which Act is relevant to contracts between banks and their customers?

    <p>The Contract Act, 1872</p> Signup and view all the answers

    Which chapter of the study material covers laws and regulations related to general banking?

    <p>Chapter 10: Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the year of the Companies Act, as mentioned in the study material?

    <p>1994</p> Signup and view all the answers

    Which Act is relevant to partnerships between banks and their customers?

    <p>The Partnership Act, 1932</p> Signup and view all the answers

    What is the name of the act that governs Trusts, Trustees, Trust deed and other relevant issues?

    <p>Trust Act, 1882</p> Signup and view all the answers

    Who is the person who reposes or declares confidence in a trust?

    <p>Author of the trust</p> Signup and view all the answers

    What is the instrument by which a trust is created?

    <p>Trust Deed</p> Signup and view all the answers

    What is the beneficial interest of the beneficiary in a trust?

    <p>Right against the trustees as owner of the trust property</p> Signup and view all the answers

    What should a banker do when opening an account in the names of persons in their capacity as trustees?

    <p>Thoroughly examine the Trust Deed</p> Signup and view all the answers

    When can a bank terminate its relationship with a customer?

    <p>When the customer requests</p> Signup and view all the answers

    What is the ultimate objective of relationship banking?

    <p>To earn sustainable growth in banking business</p> Signup and view all the answers

    What is the significance of customer service in the banking industry?

    <p>It has great significance in the banking industry</p> Signup and view all the answers

    What happens when a bank receives a garnishee order?

    <p>The bank terminates its relationship with the customer</p> Signup and view all the answers

    What is emphasized in relationship banking?

    <p>Managing relations among depositors, borrowers, and regulatory bodies</p> Signup and view all the answers

    What is the primary purpose of deposit mobilization in banking?

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

    What is the main source of funds for banks?

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

    Why are banks diversifying their sources of funds?

    <p>To reduce dependence on funds from other banks</p> Signup and view all the answers

    What is the purpose of opening branches across the country?

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

    What is customer complaint management?

    <p>Recording and resolving customer complaints</p> Signup and view all the answers

    What is the contractual relationship between a banker and a customer?

    <p>Debtor-creditor</p> Signup and view all the answers

    What is the purpose of customer due diligence for a bank?

    <p>To comply with anti-money laundering regulations</p> Signup and view all the answers

    How can a banker-customer relationship be terminated?

    <p>By mutual consent</p> Signup and view all the answers

    What is relationship banking?

    <p>A relationship between a banker and a customer</p> Signup and view all the answers

    What is the primary obligation of a customer to the bank?

    <p>To comply with the bank's regulations</p> Signup and view all the answers

    What is the main focus of chapter 4 of the manual?

    <p>Negotiable Instruments and their features</p> Signup and view all the answers

    What is the primary objective of the manual?

    <p>To provide information on general banking activities</p> Signup and view all the answers

    How many chapters are there in the manual?

    <p>12</p> Signup and view all the answers

    What is discussed in chapter 3 of the manual?

    <p>Opening and operations of different bank accounts</p> Signup and view all the answers

    What is the main focus of chapter 6 of the manual?

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

    What is the main purpose of the Money Laundering Prevention Act, 2012?

    <p>To prevent money laundering and terrorist financing</p> Signup and view all the answers

    What is the relevance of the Anti-terrorism Act, 2009?

    <p>To prevent terrorism and terrorist financing</p> Signup and view all the answers

    What is the purpose of the Negotiable Instrument Act, 1881?

    <p>To govern the use of negotiable instruments</p> Signup and view all the answers

    What is the relevance of the Bankers' Books Evidence Act, 1891?

    <p>To facilitate the admissibility of banking records as evidence</p> Signup and view all the answers

    What is the focus of Chapter 10 of the study material?

    <p>Laws and Regulations related to General Banking</p> Signup and view all the answers

    Which Act is relevant to contracts between a customer and the bank?

    <p>The Contract Act, 1872</p> Signup and view all the answers

    What is discussed in chapter 10 of the manual?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    Which Act is relevant to partnerships between banks and their customers?

    <p>The Partnership Act, 1932</p> Signup and view all the answers

    What is the primary legislation that governs banking companies in Bangladesh?

    <p>The Bank Companies Act, 1991</p> Signup and view all the answers

    Which chapter of the manual covers laws and regulations related to general banking?

    <p>Chapter 10: Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the primary purpose of examining the Trust Deed by the banker?

    <p>To know the names of the trustees and their powers</p> Signup and view all the answers

    What is the role of the person who reposes or declares confidence in a trust?

    <p>Author of the trust</p> Signup and view all the answers

    What is the trust property or trust money in a trust?

    <p>The subject matter of the trust</p> Signup and view all the answers

    What is the beneficial interest of the beneficiary in a trust?

    <p>The right against the trustees as owner of the trust property</p> Signup and view all the answers

    What is the relevance of the Trust Act, 1882 in the context of trusts?

    <p>It governs the creation and administration of trusts</p> Signup and view all the answers

    What is the significance of customer service in the banking industry?

    <p>To have the largest outreach for delivery of financial services</p> Signup and view all the answers

    What is the primary objective of relationship banking?

    <p>To earn sustainable growth in banking business</p> Signup and view all the answers

    What happens when a bank receives a garnishee order?

    <p>The bank has to honor the order and attach the customer's account</p> Signup and view all the answers

    When can a banker-customer relationship be terminated?

    <p>All of the above</p> Signup and view all the answers

    What is the focus of relationship banking?

    <p>Managing relations among depositors, borrowers, and regulatory bodies</p> Signup and view all the answers

    What is the primary source of funds for banks?

    <p>Retail and corporate customers' deposits</p> Signup and view all the answers

    What is the main objective of banks in deposit mobilization?

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

    Why are banks opening branches across the country?

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

    What is the significance of customer complaint management in banking?

    <p>It is an essential part of customer service</p> Signup and view all the answers

    What is the role of deposits in banking activity?

    <p>It is a major source of funds</p> Signup and view all the answers

    What is the primary objective of relationship banking?

    <p>To provide customer service and build long-term relationships</p> Signup and view all the answers

    What is the significance of diversifying sources of funds in banking?

    <p>It reduces the risk of dependence on a single source of funds</p> Signup and view all the answers

    What is the main benefit of deposit mobilization for banks?

    <p>It provides a stable source of funds</p> Signup and view all the answers

    What is the primary goal of banks in managing deposits?

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

    What is the significance of customer service in banking?

    <p>It is essential for building long-term relationships with customers</p> Signup and view all the answers

    What is the primary focus of Chapter 10 of the manual?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the significance of commercial banks in economic development?

    <p>They are crucial for economic development</p> Signup and view all the answers

    What is the nature of the relationship between a bank and its client?

    <p>Fiduciary</p> Signup and view all the answers

    What is the primary responsibility of a bank?

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

    What is a bank, fundamentally?

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

    What is the primary obligation of a banker in case of a dispute over a customer's cheque?

    <p>To maintain secrecy of the customer's account and compensate the customer</p> Signup and view all the answers

    What is the primary purpose of customer due diligence for banks?

    <p>To know the customer's financial position and creditworthiness</p> Signup and view all the answers

    What is the consequence of a banker's failure to maintain proper records of customer transactions?

    <p>The banker is liable for any mistakes</p> Signup and view all the answers

    What is the importance of maintaining secrecy of the customer's account?

    <p>To avoid disclosure of the customer's financial position and creditworthiness</p> Signup and view all the answers

    Why is it essential for banks to maintain a good relationship with their customers?

    <p>To provide excellent personalized services and maintain a good relationship</p> Signup and view all the answers

    What is the primary challenge that banks face in general banking operations?

    <p>Malpractices and fraudulent activities</p> Signup and view all the answers

    Why is it crucial for banks to strengthen their ability to manage different areas of general banking?

    <p>To minimize the risk of malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary objective of the legislative measures taken to address the challenges of malpractices and fraudulent activities in banking?

    <p>To increase the compliance requirements of banks</p> Signup and view all the answers

    What is the significance of relevant legislative measures and stringent compliance requirements in general banking?

    <p>To prevent the occurrence of malpractices and fraudulent activities</p> Signup and view all the answers

    What is the primary concern for banks in the context of general banking operations?

    <p>Fraud and money laundering</p> Signup and view all the answers

    What is the primary objective of the CDD obligations on banks?

    <p>To make it more difficult for banks to abuse the banking industry for money laundering or terrorist financing</p> Signup and view all the answers

    What factors should risk-sensitive CDD measures be based on?

    <p>Type of customers, business relationship, banking products, and transaction type</p> Signup and view all the answers

    What is the purpose of Enhanced Due Diligence (EDD) measures?

    <p>To conduct additional due diligence measures when necessary</p> Signup and view all the answers

    What is the relevance of the MLPA, 2012 in the context of CDD obligations?

    <p>It includes predicate offences and relevant offences under ATA, 2009</p> Signup and view all the answers

    What should banks be able to demonstrate to their supervisory authority?

    <p>That they have implemented adequate CDD measures</p> Signup and view all the answers

    What happens when a bank receives a garnishee order?

    <p>The bank is instructed to hold funds until directed by the court</p> Signup and view all the answers

    What is the implied right of a banker?

    <p>To charge interest and commission for services rendered</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 necessary verifications</p> Signup and view all the answers

    What is the right of a customer regarding debt appropriation?

    <p>To direct the bank to appropriate payment to any debt</p> Signup and view all the answers

    What is the consequence of a bank receiving a garnishee order on a customer's account?

    <p>The funds are held until directed by the court</p> Signup and view all the answers

    What is the primary legislation governing banking companies in Bangladesh?

    <p>Banking Companies Act, 1991</p> Signup and view all the answers

    Which Act is relevant to the opening of bank accounts in Bangladesh?

    <p>Contract Act, 1872</p> Signup and view all the answers

    What is the primary focus of the Banking Companies Act, 1991 in Bangladesh?

    <p>Regulating banking companies</p> Signup and view all the answers

    Which Act is relevant to partnerships between banks and their customers in Bangladesh?

    <p>Contract Act, 1872</p> Signup and view all the answers

    What is the primary legislation governing banking operations in Bangladesh?

    <p>Banking Companies Act, 1991</p> Signup and view all the answers

    What is the primary reason behind financial scams, financial frauds, and forgeries in the financial sector?

    <p>Lack of awareness and financial education of customers</p> Signup and view all the answers

    What is the purpose of displaying contact details of officials in the prominent place of the branches?

    <p>To make the complaint lodgment easier</p> Signup and view all the answers

    What is the primary challenge faced by banks in the context of customer relationship?

    <p>Communication gap between customers and bankers</p> Signup and view all the answers

    What is the primary objective of customer awareness programs in banking?

    <p>To bridge the information gap and communication gap between customers and bankers</p> Signup and view all the answers

    What is the significance of displaying customers' rights and obligations through various communication channels?

    <p>To increase customer awareness about banking laws and regulations</p> Signup and view all the answers

    What is the primary responsibility of a bank in relation to customer deposits?

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

    What is the nature of the relationship between a bank and its clients?

    <p>Fiduciary</p> Signup and view all the answers

    What is the main focus of Chapter 10 of the study material?

    <p>Laws and Regulations Related to General Banking</p> Signup and view all the answers

    What is the primary concern for banks in the context of general banking operations?

    <p>Compliance with Relevant Legislation</p> Signup and view all the answers

    What is the primary objective of the legislative measures taken to address the challenges of malpractices and fraudulent activities in banking?

    <p>To prevent fraud and malpractices</p> Signup and view all the answers

    What is the significance of relevant legislative measures and stringent compliance requirements in general banking?

    <p>To prevent fraud and malpractices</p> Signup and view all the answers

    What is the primary legislation that governs banking companies in Bangladesh?

    <p>Banking Companies Act, 1991</p> Signup and view all the answers

    What is the relevance of the Bankers' Books Evidence Act, 1891?

    <p>To provide evidence in banking disputes</p> Signup and view all the answers

    What is the primary objective of the Anti-terrorism Act, 2009?

    <p>To combat terrorism</p> Signup and view all the answers

    What is the significance of the Money Laundering Prevention Act, 2012?

    <p>To combat money laundering</p> Signup and view all the answers

    Study Notes

    Banking Overview

    • Banks primarily serve as financial intermediaries that accept deposits and provide loans.
    • Relationship between banks and clients is often based on trust, and it evolves through interactions and services provided.
    • Banks play a crucial role in the economy by facilitating transactions, providing credit, and mobilizing savings for investment.

    Economic Significance

    • Commercial banks are vital for economic development as they mobilize funds, provide loans for businesses, and support job creation.
    • Banks diversify their sources of funds to minimize risks and increase stability.
    • The Negotiable Instrument Act was enacted in 1881, governing negotiable instruments like cheques and promissory notes.
    • The Money Laundering Prevention Act was introduced in 2012 to prevent financial crimes.
    • The Anti-terrorism Act came into effect in 2009, addressing financing linked to terrorism.
    • The Bankers’ Books Evidence Act dates back to 1891, providing legal credibility to bank records.
    • The Trust Act of 1882 regulates trusts and fiduciaries to protect beneficiaries’ rights.

    Major Manual Chapters

    • The manual consists of several chapters, each addressing specific banking topics; details of their contents can enhance understanding of banking operations.
    • Chapter 2 discusses foundational aspects of banking.
    • Chapter 3 focuses on relationship banking and the dynamics between banks and customers.
    • Chapter 4 delves into laws and regulations that govern banking practices, aiming for compliance.
    • Chapter 5 examines types of banking services and products.
    • Chapter 6 covers the Money Laundering Prevention Act’s implications on banks.
    • Chapter 10 highlights regulations concerning fraud, forgeries, and banking malpractices.

    Relationship Banking

    • Relationship banking emphasizes long-term interactions, customer loyalty, and personalized services.
    • The ultimate objective is customer satisfaction and retention, leading to mutual benefits.
    • Effective customer service is critical for maintaining strong banking relationships.
    • Customer complaint management is essential for service improvement and customer trust.

    Obligations and Rights

    • A bank must maintain secrecy regarding a customer's account to uphold trust.
    • Banks have a primary obligation to perform due diligence, ensuring compliance with regulatory standards.
    • In disputes over a customer's cheque, a banker must act according to established procedures to protect client interests.

    Risk Management

    • Customer due diligence (CDD) is essential for identifying and mitigating risks associated with clients.
    • Enhanced Due Diligence (EDD) measures are implemented for high-risk clients, focusing on thorough background checks.
    • Compliance with CDD obligations demonstrates a bank's commitment to regulatory requirements and customer trust.

    Closing Relations and Termination

    • A bank may terminate its relationship with a customer for reasons such as fraud or persistent account mismanagement.
    • The process requires careful consideration of contractual agreements and legal implications.

    Banking Operations

    • Deposit mobilization is a key objective that allows banks to expand their lending capacity.
    • Banks typically use deposits as their primary source of funds, critical for operational viability.
    • Maintaining a portfolio of diverse funding sources strengthens a bank’s financial resilience.

    Conclusion

    • The banking industry operates under a framework of legal obligations aimed at protecting clients and maintaining market integrity.
    • Understanding the interplay between banking laws, customer relationships, and risk management is crucial for successful banking operations.

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