Financial Institution Act

June 2016
8 (b) XYZ Company Limited, a non-banking financial institution granted an
unsecured loan to ABC Company Limited aggregating 15% of the total paid up
capital and reserves of XYZ Company Limited. ABC Company Limited is the
subsidiary of BCD Company Limited where the major portion of the shareholding is
in the name of Mr. Chowdhury who is also a director of XYZ Company Limited.
Discuss the matter in light of the Financial Institution Act, 1993.
6
Dec 2015
8. What aspects are to be taken into consideration by Bangladesh Bank while
granting license to a financial Institution? 5

June 2015

6. a) XYZ was incorporated in the year 2000 under the Financial Institutions Act
1993. Soon after commencement of business it diverted its business to foreign
import-export and purchased land to establish garment industries out of its paid up
capital amounting 70% without any license or permission from the government. Is
there any violation of provisions of the Financial Institutions Act 1993? If the answer
is yes, what punishment may be imposed? Discuss. 6

Dec 2014
8. (a) Mention the conditions for which Bangladesh Bank may cancel the license granted
to a financial
institution. 7

June 2014
7. Describe the consequences or legal provisions with regard to the followings:
i) Mr. X is a director of ABC Bank Limited, MNO Company Limited, a nonbanking
financial institution and other two insurance companies. All are incorporated in
Bangladesh; 5
ii) XYZ Company Limited, a NonBanking Financial Institution failed to maintain the liquid
assets as required by Financial Institution Act, 1993; 5
iii) XYZ Company Limited, a NonBanking Financial Institution amended its Articles of
Association without informing Bangladesh Bank. 5

Dec 2013

June 2013
5. a) Please describe the procedures for appointment of Statutory Auditors of a Non-
Banking Financial Institution. 8
b) What are the consequences if a Non-Banking Financial Institution fails to appoint
the statutory auditor? 2

Dec 2012
June 2012
7. State the requirement of maintaining reserve fund under the Financial Institution Act
1993.What restrictions are there in payment of dividend and mention the provisions
relating to the holding of liquid assets under the said Act? 15

Dec 2011
June 2011

Dec 2010
6. Explain the term financial institution as defined in the Financial Institution Act, 1993.
Narrate the circumstances under which the licence of a financial institution may be
cancelled. 9

Insurance Act

June 2016
9. (a) Discuss the prohibition on giving and accepting any rebate of premium, as
enacted in the Insurance Act, 2010.
6
(b) Is there any statutory restriction on granting loan to any employee by an
insurer? Discuss. 6

Dec 2015
9. (a) What do you mean by the surrender value of life insurance policy?
4
(b) Mr. X had taken a Life Insurance Policy for 15 years for BDT1,50,000 and the
premium payable was BDT 12,000 per annum. X paid premium for three years and
then stopped. The premium paid is BDT 12,000 x 3=36,000 and payable is BDT
12,000 x 15= 1,80,000. Calculate the surrender value of the above policy.
3

June 2015
9. (a) Discuss about the prohibition on giving and accepting any rebate of premium,
as enacted in the Insurance Act, 2010. 4
(b) Is there any statutory restriction on granting loan to any employee by an
insurer? Discuss. 6

Dec 2014

9. ABC, Chartered Accountants, has been appointed by XYZ Insurance Company Limited
as a joint auditor of the company for the year 2014. Subsequent to the above
appointment made by AGM on 6 June 2014, the Insurance Controlling Authority has
appointed ABC to conduct a special audit of the company for the year 2013.

ABC is interested to undertake both the assignments.

(a) Can ABC undertake both the assignments in accordance with the Insurance Act
2010? 3
(b) What are the differences in the scope of above two audit? 7
(b) Describe the rules regarding renewal of registration certificate of an insurance
company. 5

June 2014

6. a) What is meant by Assignment and Nomination of Life Insurance Policies? Mention

the various rules regarding assignment of life policies. 6
b) Discuss the various payments required by section 58 of the Insurance Act 2010
procuring business. 6

Dec 2013
7. (a) Enumerate the provisions of The Insurance Act, 2010 relating to : (i) determination
of premium and (ii) collection of premium. 5
(b) Discuss the power of the Insurance Development and Regulatory Authority (IDRA) to
inspect and ask for information etc. under section 49 of the Insurance Act, 2010. 5

June 2013
7. a) Describe the provisions relating to insurance in abroad. 5
b) Describe the conditions to be fulfilled for solvency margin in accordance with The
Insurance Act, 2010. 5

Dec 2012
6. (a) Mr. X insured his ship against total loss with Y insurance company. The ship sank
in the deep sea. Y pays the value to X in full. Subsequently the ship was salvaged and
sold for some money. Explain who is entitled to the sale proceeds of the ship, Mr. X or Y
insurance company. 4

(b) What action the IDRA can take against an insurer when return furnished by the
insurer under the provisions of the Insurance Act, 2010 is found to be inaccurate or
incorrect in any respect? 5
(c) Who can survey the Insurance claims? What are the exemption limits in respect of
survey under the provisions of Insurance Act? In case of disagreement with surveyors
statement, what steps can the aggrieved party take? 5

June 2012
5. (a) What do you mean by the `Surrender value of life insurance policies? 4
(b) Suppose that Mr. X takes out an endowment policy for 15 years for Tk.15,000 and
the premium payable is Tk.1,200 per annum. He pays premium for three years and then
stops. The premium paid is Tk.1,200 x 3 = Tk.3,600. The premium payable is Tk.1,200 x
15 = Tk.18,000.
Calculate the surrender value of the above policy. 5
(c) What is `Solvency Margin? Mention the conditions to be fulfilled by an insurer for
maintenance of solvency margin. 8

Dec 2011
5. (a) What is meant by Assignment and Nomination of Life insurance Policies?
Mention the
various rules regarding assignment of life policies. 6
(b) Discuss the power of the Insurance Development and Regulatory Authority
(IDRA) to inspect and ask for information etc. under Section 49 of the Insurance Act,
2010. 6
(c ) Under what grounds loans by insurance companies are prohibited? 3

June 2011
6. (a) Mention the conditions to be fulfilled by an insurer for maintenance of `Solvency
Margin. 6
(b) Discuss the provisions of the Insurance Act, 2010 relating to (i) determination of
premium rate for nonlife insurance business and (ii) collection of premium. 6
(c) Discuss some grounds under which Loan of Insurance Company are prohibited. 5

Dec 2010

Bank Companies Act

June 2016
8. (a) A company namely Asian Holdings Limited has approached the BD Bank
Limited to avail a term loan facility. Asian Holdings Limited has currently 4 credit
facilities with 4 separate banks and now is reported as defaulter by one of the
lending banks where its overdue is 7 months.

Can BD Bank Limited in terms of the Bank Companies Act provide loan to the Asian
Holdings
Limited? 6

Dec 2015

The draft audited financial statements for the year ended 31 st December 2014 of CD
Bank Ltd. (a schedule commercial bank) has been placed in the board meeting for
authorization to issue. The financial results depict that as per BSEL-III ,the total
capital of the bank stood at BDT 7130 million (Paid up-capital BDT 4,000 million,
Statutory Reserve BDT 1,830 million, Retained Earnings BDT 825 million, 1%
Provision of Loans & Advances BDT 475 million). The Risk Weighted Assets (RWA) of
Bank as per BASEL-III stood at Taka BDT 69,200 million and as per BRPD circular ref:
18 dated 21/12/2014, the minimum required Capital Adequacy Ratio is 10% and as
such the Risk Based Capital requirement is BDT 6,920 million. In a confidential note,
the Risk Management Division (RMD) of the bank has informed to the Managing
Director that some of big clients rating may be downgraded in the next year due to
Middle East Crisis and RMD has forecasted that RWA may rise to BDT 73,500 in the
next quarter. Face value of share is BDT 10 per share. The majority of the members
in the board opined 20% cash divided while a few including chairman opined to
keep the limit to 10% cash and 10% bonus as dividend.
(a) As a CFO of the Bank, chairman is seeking your professional advice as to how to
resolve the dividend
decision as per Bank Companies Act 1991 considering the capital maintenance
issue of the bank. 5

(b) Assume that, the RWA is 73,500 i.e. required capital maintenance increased to
BDT 7,350 million.
You are required to brief the board on dividend issue, Capital Reservation and future
legal consequences with reference to section-13 & 22 of Bank Companies Act1991.
5

(c) In another agenda, the Treasury Department has the following proposals for
board approval:
(i) to enhance the existing investment limit of BDT 900 million to 1800 million in
capital market.
The existing limit has dried up and treasury had good performance in the capital
market in the last two years and Management has full confidence on Treasury Head.
(ii) The entire budget (enhancement) would like to invest in the securities of CSD
Ltd. It is mentioned here that that paid up capital of CSD Ltd. is BDT 5000 million.

As a CFO, you are also required to suggest the maximum amount of investment
limit for the capital market and the amount to be invested in CSD Ltd. in line with
the provisions 26KA of Bank Companies Act 1991. 7
Hints: As per BASEL-III, total capital means = Shareholders Equity + 1%
General Reserve on
Loans & Advance + 50% Revaluation Reserve)

June 2015
8. (a) Mr. A, B and C are shareholders of ABC Ltd., a private limited company. Mr. A
and B are also
directors of ABC Ltd. ABC Ltd. has taken a loan of Tk.100 million from SB Bank
Limited, a state owned bank. An instalment amount of Tk.5 million of the above
loanalong with interest thereon has fallen over due for payment for the last 7
months. Will Mr. A, B and C or any of them be considered as loan defaulter(s)?
Discuss. 5

(b) Mr. X is a director of CB Bank Ltd., a private scheduled bank listed in DSE and
CSE. He fails
to pay Tk.50 million due from him on account of a guarantee given by him against a
loan of Tk.75 million extended to his friend Mr. Y by JB Bank Ltd., a state owned
bank. What could be the consequences with regard to his directorship of CB Bank
Ltd. and his due amount to JB Bank Ltd.? Discuss. 5

Dec 2014

7. (a) ABC & Co., Chartered Accountants, has been appointed by XYZ Bank Ltd. in its
AGM held on 31-3- 2014 as one of the joint auditors of the bank for the year 2014.On
20-4-2014 Bangladesh Bank declared ABC & Co. unfit to audit any banking company for
2 years. Can Bangladesh Bank declare an auditor, holding valid practicing license issued
by ICAB, to be unfit to audit any banking company? If so, on what grounds can
Bangladesh Bank do so and what procedures are they required to follow? What will XYZ
Bank Ltd. do now? 8

(b) Mr. X is a director of a state owned bank. Bangladesh Bank is satisfied that it is
necessary to remove him in order to secure, in the public interest, the proper
management of the bank. Does Bangladesh Bank have power to remove Mr. X from the
directorship? Will the situation be different if the above bank is not a state owned bank?
Discuss in accordance with the relevant provisions, if any, of the relevant statute. 6

June 2014

Dec 2013
5. (a) Describe the circumstances under which Bangladesh Bank may apply for winding
up of a bank. 6
(b) Narrate the circumstances under which the Bangladesh Bank can dissolve the Board
of Directors of a banking company. 5
6. (a) State the restrictions on payment of dividend by a banking company other than a
new bank or specialized bank. 5
(b) Discuss the procedure to be followed by the Bangladesh Bank to disqualify an
auditor. 4

June 2013
6. a) Describe the circumstances when the position of a director of Bank become
vacant in line with
the provisions of the Banking Companies Act, 1991 4
b) Describe the consequences or legal provisions of the following cases: 6
i) Mr. X is a director of ABC Bank Limited as well as MNO Bank Limited. Both are
incorporated in Bangladesh;
ii) Mr. Y is a director of a bank. His bank borrowed money from another bank. He
resigned from the board of directors of the bank about which the lending bank was
not informed;
iii) ABC Bank Limited was incorporated in Bangladesh. It relocated one of its
branches without informing the Bangladesh Bank.

Dec 2012

5. (a) Explain the provision of Bank Companies Act regarding restrictions on different
types of appointment. 5
(b) Explain the provision of Bank Companies Act regarding paid up capital and reserve.
5
(c) Explain the requirement of maintaining reserve fund under the Bank Companies Act
1991. 5

June 2012
6. Explain the requirement of maintaining reserve fund under the Bank Company Act
1991. State the provisions of the Bank Company Act, 1991 regarding holding of liquid
assets by a Bank Company and also what are the restrictions on payment of loans and
advances. 10

Dec 2011
6. (a) Discuss the various bars imposed by Section 23 of the Bank Companies Act,
1991 on common director. 5
(b) Discuss the powers of the Bangladesh Bank for giving directions to other
Banking Companies as provided in section 45 of the Bank Companies Act, 1991. 5
(c ) RBA Bank Limited re-valued its properties on 31 December 2010 by a
professional valuation company. Land and buildings of the bank has been re-valued
to Tk. 100 million from Tk. 10 million, historical cost of the land & building. The bank
accounted for the revaluation surplus in Other Reserve Account. The bank now
wanted to issue bonus share against the other reserve. Board of Directors of the
company approved the financial statements and approved 25% bonus share to be
issued for 2010. State the legal provisions for declaring dividend of a banking
company with reference to the Company Act 1994 and Bank Companies Act 1991. 5

June 2011
5. (a) State the restrictions as to payment of dividend by a banking company other than
a new bank or a specialized bank. 6
(b) Discuss the powers of the Bangladesh Bank to control advances by Banking
Companies. 6
(c) Make a checklist identifying special points in presentation financial statements of
banking company in line with BRPD circular and in compliance to International
Accounting Standards. 7

Dec 2010
5. a) Narrate the circumstances under which the Bangladesh Bank can dissolve the
Board ofDirectors of a banking company. 6
b) What are the restrictions on payment of loans and advances as provided in the Bank
Companies Act, 1991. 6
c) State the duties of an Auditor under the Bank Companies Act, 1991. 6

DSE, SEC Regulation

June 2016

7. Describe the rules regarding audit of financial statements of a listed company

and submission of the
same in accordance with the provisions of Dhaka Stock Exchange (Listing)
Regulations, 2015. 12

Dec 2015

(b) What are the reasons for which a listed company can be delisted or suspended
by the Dhaka Stock
Exchange as per its listing Regulations in force? 4

June 2015
7. (a) Discuss about the Lock in provision as given in the Securities and Exchange
Commission (Public Issue) Rules, 2006. 4
(b) What risk factors and managements perception are required to be included in
the prospectus in accordance with the above Rules? 4
(c) What ratios of the issuer are required to be included in the prospectus and for
which years/periods in accordance with the above Rules? 5

b) "Securities and Exchange Commission is empowered to protect the rights of the

investors,
Discuss some of those protection measures under the Securities and Exchange
Commission Act 1993. 7

Dec 2014

6. (a) What is meant by net capital according to the Securities and Exchange Rules
1987? 2
(b) What is the minimum amount of net capital balance in the capital account that a
member of DSE is required to maintain at all times? How much is the amount in the
case of CSE? 2
(c) What are the regulatory requirements that a member of DSE must comply with
regard to deposit of money received from and for, and payment of money to and for,
the customers? State in accordance with the Securities and Exchange Rules 1987. 3

June 2014
Dec 2013

June 2013
4. (a) What are the restrictions on dealing in securities? 4
(b) What are the provisions for appeal by a person aggrieved by an order of a
member or an officer of the Securities Exchange Commission? 5
(c) Discuss the provisions for submission of annual reports under the SEC Rules
1987. 5
(d) What are the requirements of presenting financial statements by an IPO aspiring
public limited company? 4

Dec 2012
(a) Give eight examples of companys affairs or market conditions typically requiring
disclosure. 6

(b) Discuss about the additional requirements to directors report apart from those of
Companies Act, 1994
(i) under the listing rules of stock exchange of Bangladesh ;
(ii) Notifications of SEC 6
(c) Under what circumstances SEC can impose penalty under SEC Ordinance, 1969?
What is the amount of such penalty? 6
June 2012
Dec 2011

June 2011
3. (a) Securities and Exchange Commission is empowered to protect the rights of the
Investors,
discuss some of those protection measures under SEC Act 1993. 5
(b) What are the provisions relating to Qualification of Members to the meeting of the
Securities
and Exchange Commission? 5
(c) There are some restrictions on gratuity payment, loan and advance of a bank. What
are those
restrictions? 6

Dec 2010
4. a) Narrate the salient features of the listing rule of DSE. 6
b) Describe the main functions of SEC. 5
c) Enumerate the powers and functions of Securities and Exchange Commission as per
the provisions of the Securities and Exchange Commission Act 1993. 6
d) Draft a plan of operation and the financial conditions to be incorporated in the
Prospectus
by a public limited company according to Public Issue Rules, 1998. 6