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What stage occurs when the loan is disbursed to the customer?
Which type of life insurance policy does not accumulate cash value?
Which investment fund is considered the least risky?
Which of the following cannot be used as collateral?
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What rider provides monthly income to the nominee upon the death of the life assured?
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What is the typical maximum amount in a mortgage loan in retail banking?
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Which of the following is not one of the 5Cs of credit decision making?
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Which account allows unlimited deposits and withdrawals?
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Which of the following describes an act of doing something or not doing something, or a promise to do or not do something?
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What type of contract has no legal effect?
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Which entity has the right to withhold financial securities until such rights are recovered?
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What constitutes the termination of a contractual relationship between parties?
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An advertisement is generally considered as which type of contract?
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What is the term for the sum specified in the contract that represents the actual loss due to a breach of contract?
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Who is referred to as the 'Debtor' in a legal context?
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Which Power of Attorney allows the agent to conduct any financial transaction on behalf of the principal?
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Which account is best for saving regularly to build up a fixed sum over time?
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Which of the following banking services is used to transfer funds inside and outside the country?
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Channles of banking reduce costs to both the bank and the customer.
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Deposits that lead to a net increase in the money supply are referred to as:
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In a mortgage relationship, who has the right to enforce the security in case of loan default?
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What is the maximum repayment period for a car loan?
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Which feature is NOT characteristic of a negotiable instrument?
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What stage involves conducting business and financial analysis on a customer?
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What type of account will be opened for a minor?
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What is known as the system for cheque clearance and settlement between banks?
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What defines the constitution, powers, and activities of a company?
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If a cheque is issued post-dated and a stop payment is made, who is liable?
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When Mr.B gives his cheque for collection to the bank, what is the bank legally classified as?
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What does KYC stand for?
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The process of concealing the origin of illegal money is known as:
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Closure of an account due to unsatisfactory conduct requires approval from:
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What must occur for any overwriting in cheques to be valid?
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Which of the following accounts does not receive a cheque book?
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What is the primary function of a bank regarding customer funds?
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What is the third stage of money laundering known as?
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What does signing on the back of a cheque only represent?
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In the context of a cheque, who is referred to as the maker of the instrument?
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What is a cheque that cannot be cashed at a bank due to being out of date referred to?
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What practice is used to signify ownership transfer by writing a person's name on the back of a cheque?
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Study Notes
Cheques and Banking Transactions
- Overwriting on a cheque needs to be confirmed by the drawer.
- The payee receives the amount specified on the cheque.
- Illiterate, joint, and minor accounts do not receive chequebooks or third-party mandates.
- Branch banking involves a bank operating across a large network of branches.
- The integration stage is the third stage in money laundering.
- An account can be closed after six instances of frequent cheque returns.
- Anti-Money Laundering (AML) is a system that helps detect and report suspicious activities.
- Layering is the second stage of money laundering.
- Banks can only pay a stale cheque if it is stolen.
- The Cheque Truncation System helps with better cash management.
- A crossing cheque is identified by two parallel lines on the left-hand upper corner of the cheque.
- A cheque is an instrument in writing containing an unconditional order.
- The drawer is the maker of the cheque.
- Accepting deposits and lending are the primary functions of a bank.
- Negotiable instruments are credit instruments that are transferrable, not non-transferrable.
- A lost or stolen cheque can be stopped, not only a stolen cheque.
- Endorsement is the act of writing a person's name on the back of a negotiable instrument.
- Authority, identity, and respectability are considered during account opening.
- In a cheque, the drawer is the maker of the instrument.
- Blank endorsement refers to signing on the back of an instrument without any direction.
- Mutilation refers to a cheque that is torn or damaged.
- Special endorsement involves signing on the back of the cheque with direction to pay the amount.
- A crossed cheque must be credited into an account, cash amounts cannot be paid.
- Credit creation refers to deposits that act as circulating money, leading to a net increase in the money supply.
- Transferability, good title, and the right to sue are features of negotiable instruments.
- Minors' accounts are opened as "Parent A/C Minor".
- Transferability refers to the ease of transferring a negotiable instrument through endorsement or delivery.
- Special accounts could refer to minor accounts, current accounts, or call deposit accounts.
- The Cheque Truncation System is responsible for cheque clearance and settlement between banks.
- In the context of cheques, the drawee is the banker.
- Placement is when money is introduced into the financial system.
- The drawer is liable if a post-dated cheque is issued before its due date by the bank and the drawer then stops the payment.
- Know Your Customer (KYC) is a term associated with identifying and verifying a customer's identity.
- Current accounts are preferred by businessmen.
- An account closure due to mental incapacity of the customer is done in accordance with the law.
- When stopping payment on stolen cheques, the client must provide details of the cheque.
- Money laundering is a process of concealing the illegal origins of money.
- A customer request is necessary to close an account due to a person moving out of the country.
- Unsatisfactory conduct leading to account closure (such as money laundering) requires approval from regulatory authorities.
- The paying bank may dishonour a cheque if there are insufficient funds.
- A promissory note is an instrument in writing containing an unconditional undertaking.
Credit and Investment
- The stage of credit administration involves disbursing the loan to the customer.
- The interest on a credit card is usually higher than a personal loan.
- Term Life insurance does not have a cash value.
- Money market funds are the least risky investment.
- Bank deposits, life insurance, and stocks and shares can be used as collateral.
- A disability rider offers monthly income to the nominee on the death of the life assured.
- In retail banking, there is no limit to the maximum amount for a mortgage loan.
- The cost is not a part of the five Cs of credit decisions.
- Savings, current, and fixed deposit accounts can all be issued chequebooks.
- Professionalism, diversification, and affordability are benefits of investment products.
- Call deposits require prior notice to be given to banks before withdrawal.
- Current accounts allow for unlimited deposits and withdrawals.
- The liquidity ratio measures the firm's ability to meet current obligations.
- Balanced funds invest funds equally across bonds and equity.
- The income statement presents the revenue and expenditure of a corporation.
- Standing order, direct debit, and SWIFT facility are banking services used for periodic payments.
- Income funds provide monthly income to investors from coupons and dividends.
- A recurring deposit is the best account for saving regularly over a period of time to build up a fixed sum.
- Remittance, Direct Debit, and Standing Order facilities are used to transfer funds domestically and internationally.
- Channels of banking can reduce costs for both banks and customers.
- In a mortgage relationship, the mortgagor (borrower) has the right to enforce the security in case of a loan default.
- A debenture is a written acknowledgment of debt issued by a company, not individuals.
- The repayment period for a car loan can extend up to 60 months.
- The credit approval stage involves business and financial analysis of the customer.
- The memorandum of association defines the constitution, powers, and activities of a company.
- The Civil Code or Civil transaction law does not pertain solely to commercial transactions.
- UAE banks are required to send a bank statement to the customer every month, unless there is an agreement to the contrary.
- In the context of a loan, the creditor (FAB Bank) is the lender, and Mr. A is the debtor.
- Legally, the bank is acting as a bailer when renting a locker to a customer.
- Every interaction between a customer and a bank is considered a transaction.
- All contracts are agreements, but not all agreements are contracts.
- At least 51% of the capital in companies under the CCL must be held by UAE nationals (this is known as national shareholding).
- The bank acts as an agent when a customer gives a cheque for collection.
- An implied contract is one where the agreement is not made explicitly in words or writing.
- A promise binds the maker unless he dies or becomes bankrupt.
- The customer's rights are the banker's duties.
- A promise can be an action, an inaction, or a promise to act or not act.
- A void contract has no legal effect.
- True, The one who owes is called a “Debtor”.
- A Bank Mandate is a written authorization given by a person allowing a bank to operate a specific account.
- An advertisement is not considered an offer.
- The shares of a Limited Liability Company are offered to the public for subscription.
- Both accepting deposits and giving loans are the primary functions of a commercial bank.
- Liquidated damages are a sum specified in the contract representing the actual loss if a breach occurs.
- A Banker's Lien gives the bank the right to withhold financial securities deposited until its right is recovered.
- Dissolution of a contract refers to the termination of the contractual relationship between parties.
- An injunction is a court order restraining a person from taking a specific action.
- A contract formed through misrepresentation occurs when one party makes a false statement to induce the other party to enter the contract.
- A general POA allows the agent to take any financial action on behalf of the principal.
- False, ABC and Company is a legal entity, not a natural person.
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Description
This quiz covers essential concepts related to cheques and banking transactions, including the roles of the drawer and payee, stages of money laundering, and the Cheque Truncation System. Test your knowledge on various aspects of banking operations and cheque management.
