12th class Principles of Banking chapter wise Short Question with answers for Principles of Banking

Question # 1

What is the role of discount houses and bill brokers in money market.

Ans 1: In developed money markets private companies operate discount housed where as bill brokers operate in udner developed money markets. Both this act as intermediaries between borrowers and the lenders by discounting bills of exchange at a nomianal commission.

Question # 2

What is the basic banking account.

Ans 1: In order no facilitate and provide basic banking facilites to the low income people in Pakistan. NBP has introduced BBA facility to low income peoples.

Question # 3

What is the meant by Bank GIRO creadit.

Ans 1: Bank GIRO Creadits can be paid into a bank account by the customer of the business, in which case th amunts will appear automaticlly on the business's bank statement.

Question # 4

What is the meant by negotiatin bank.

Ans 1: The bank whihc negotiate bills and makes payment of bill to the seller the advising and negotiating bank may or may not be same.

Question # 5

What is bank statement of account.

Ans 1: It is a documet whihc is sent by the bank in which the transactions on the account of a customer are stated.

Question # 6

What is meant by Electronic money.

Ans 1: Transactions through magnetic strip cards such as ATM cards, Debit cards, credit cards tec.all these are serving as Electronic money. These are helpingintransfer of mney but they are not consider as money.

Question # 7

Who can enjoy benefits of E-Banking.

Ans 1: i- Account Holders ii- Customers of bank iii- Bankers.
Ans 2: iv- Government v- Economy

Question # 8

Describe the principles of Central Bank.

Ans 1: i- Custodian of Banking system.
Ans 2: ii- Free from political iii- Econimic Stability
iv- National intrest Custodian of credit system.

Question # 9

What is sort of documents are requried if a non scheduled bank want sto change its status.

Ans 1: If a non scheduled bank wants to chang it ssttus and convert into a scheduled bank it has to provide the followign documents.
Ans 2: 1- Memorandum of associationof bank
Ans 3: 2- Articles of association of Bank
Ans 4: 3- Audited Annual Report of Bank

Question # 10

What are teh important terms of loans.

Ans 1: Lien: According to section 171 of contract act 1872, lien means the legal or equities right of lender on the borrower's property, which has been kept as security againts a certain loan.
Ans 2: Pledge: According to section 172 of contract act 1872, pledge in acutal delivery or right as weel as the possession of the good to the bank against cetain lona. the ownership of the property remasins with the pledger . In case of non paymnet the banker serves a notice.
Ans 3: Hypothecation: In case of hypoothercation goods are made available as security for the bad debts without transerring them to the lender. It means the possession and ownershp of goods remain with the borrower.
Ans 4: Mortage: Mortagage is written agreemnet between borrower and the lender for obtaining loan against immoveable property.

Question # 11

What are teh important eleemtn of a cheque.

Ans 1: i- Nanme of Bank 2- Account Number 3- Nature of account
Ans 2: 4- cheque number 5- Date 6- Word bearer or order
Ans 3: 7- Payee 8- Amount in words 9- Amount in figure
Ans 4: 10- Signatures of account holder 11- Name of account holder.

Question # 12

How the relationship between banker and customer can be terminated by Bank.

Ans 1: 1- Death of the customer 2- Insolvency of the customer
Ans 2: 3- Insanity of the customer 4- Not sufficinet funds 5- Order of court

Question # 13

Define Balance sheet of a bank

Ans 1: Balance sheet is a statemetn of the assets and liabilities of a trading concern at any particular point in time, usually at the last day in the financial year of the trading concern.

Question # 14

What are the various objectives of monetary policy.

Ans 1: i- Price stability ii- Foreign exchange stability iii- Economic development
Ans 2: iv- Increases in investment v- Capital market stability.

Question # 15

Define Revocable Letter of credit.

Ans 1: The L.C. that cna be cancelled or modified by the issueing bank without he consent of other party. This is usually not accepted by the bunissmen.

Question # 16

Which amout is consider intrest.

Ans 1: The amount can be considered as interest whcih contains.
Ans 2: i- Calculated on pre-determined rate
Ans 3: ii- Having no relationship with the risk of the business.

Question # 17

What is the meant by inter bank rate.

Ans 1: The rate of whihc centrla and commercial banks buy or sell foreign currency to each other is called inter bank rate.

Question # 18

Why pre-finance LC. is called Red clause LC.

Ans 1: It is called rdd clasuse LC becasue the pre-finance credit clasue is written in red ink.

Question # 19

What is the meant by regular crossing of a cheque.

Ans 1: If the two transverse paralle lines are drawn in the upper left of a cheque is called regular corssing of a cheque. There are two types of regualr crossing
Ans 2: 1- General crossing 2- Special crossing

Question # 20

What are the main parties of a cheque.

Ans 1: 1- Drawer of cheque ( account holder)
Ans 2: 2- Drawee of cheque ( Bank Branch)
Ans 3: 3- Payee ( The person who receive sthe amount of cheque)

Test Name	Total Questions	PDF File	Launch Test
ICOM Part 2 Principles of Banking Chapter 1 Short Questions Preparation	20	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 2 Short Questions Preparation	28	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 3 Short Questions Preparation	21	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 4 Short Questions Preparation	15	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 5 Short Questions Preparation	17	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 6 Short Questions Preparation	13	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 7 Short Questions Preparation	12	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 8 Short Questions Preparation	15	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 9 Short Questions Preparation	21	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 10 Short Questions Preparation	12	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 12 Short Questions Preparation	17	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 13 Short Questions Preparation	11	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 14 Short Questions Preparation	16	Download PDF	Launch Test
ICOM Part 2 Principles of Banking Chapter 15 Short Questions Preparation	18	Download PDF	Launch Test

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12th Class Principles of Banking Short Questions With Answer for Principles of Banking Full Book

Principles of Banking (E.M) ICOM Part 2 Principles of Banking Full Book Short Questions Preparation