3a4 © THE INSTITUTE OF BANKERS, BANGLADESH Banking Diploma Examination, November, 2011 JAIBB LAWS AND PRACTICE OF BANKING (LPB) Time—3 hours ‘Total marks—100 Pass marks—SO (N.B.—tThe figures in the right margin indicate full marks. Answer any five questions of which two must be from group B.] Group A Marks. i, | Write short notes on any five of the following — 4x5=20 (a) Garnishee Order; APM; Oo Mobile Banking; Bank Rate; (©) Clayton’s Rule; K.Y.C; {g) Non-issuable notes and Re-issuable notes; Subordinate Debt. 2. (a) _Briefiy discuss the main functions of a commercial bank. 10 (4) What role does a commercial bank play in the development 6 of an area? (©) How does a commercial bank create deposits? 4 3. (@ What is meant by a Collecting Bank? 5 (4) Discuss the duties and responsibilities of a Collecting Bank. 8 (c) Mr. Rahim opens a well introduced savings account with 7 you. He deposits a cheque crossed account payee and withdraws the amount. A few days later, the paying bank informs you that the drawer of the cheque has learnt that real Mr. Rahim has not received the cheque and it was stolen in transit. On further inquiry it appears that the man who opened the account with you is not traceable at the address given. Paying bank cails upon you to pay bank the amount as the cheque was wrongly collected by you. As branch manager how would you deal with the above? (Please turn over4. N fa) What is a cheque? Discuss the main characteristics of a cheque. (6) is the banker’s action legally justified in the following cases? Gi easons, () Retarning and not collecting a cheque crossed to two banks. (ii) Paying & cheque to ‘B’ which is drawn in favour of ‘A’ and marked ‘Not negotiable’. (tii) Paying a cheque drawn on the customer’s current account when there is insufficient balance in it by making a lien on the shares held in the same customer’s safe custody account. (S,) @®_ What do you mean by Money Laundering? @©_ Why is prevention of money laundering necessary? f© How can a banker perform 's duties in prevention of money laundering under the existing law regarding money laundering? @ What is meant by Banker’s right of Set-off? (6) When and how does a banker apply his right of Set-off? (©) ‘A’ has taken an overdratt of Ik. 00.00. Lhe customer has a credit balance of Tk. 7,000.00 in his savings bank account, ‘On customer's failure to adjust the account on due date and after due notice, the banker adjusts the customer’s overdraft from his saving bank account. {s the banker’s action legally justified? ©) _ Distinguish between any four of the following — Share and Mutual Fund; (@® CORR and SLR; (©) Holder in Due Course and Holder for Value; @ = Money Market and Capital Market; (2) Legal Mortgage and Equitable Mortgage: @)_ Primary Security and Collateral Security; @®) Retail Banking and Wholesale Banking. Marks & 12 an 5x4=203 Group B Marks 8. Describe the procedure for lending against the following 5x4=20 Securities :— (@ Financial Obligations; (b) Work Order; () Trust Receipis; (d) \mmovable Properties. & @_ Discuss the significance of Bank Loan. 8 What are the main points considered by a Banker in 6 processing a loan application? Oo Why is it necessary to keep provisions against classified 6 loans and advances? 10. (a) Discuss the salient features of Bankruptcy Law in 7 Bangladesh. (®) Discuss the main provisions of iaws relating to the Artha 7 Rin Adalat. (c) Do you think the existing laws relating to the Artha Rin 6 Adalat and Bankruptcy Law are adequate to deal with the delinquent borrowers? Discuss. a D Describe the risks a banker is likely to face in paying a 10 (DPost dated cheque GD Stale cheque and ({G)Crossed Cheque over the counter. @) A Demand Draft issued by you on one of your braniches is 10 lost before it reaches the recipient. As a banker what steps you will take when the purchaser of the draft demands his money back? Please turn over