Quizzer in Banking Laws

1. What is a bank?
A. Entities engaged in the business of giving out deposits
B. Entities engaged in the business of lending out money through deposits
C. Entities engaged in the business of receiving money through customer deposits
D. Entities engaged in the business of borrowing money without guarantee

2. What are included in the classifications of banks?

A. Commercial banks
B. Savings banks
C. Cooperative banks
D. All are included in the classifications of banks

3. Statement 1: Overseeing to ascertain that laws and regulations are complied by banks is a supervisory
power of the Monetary Board.
Statement 2: The conduct of examination to determine compliance with laws and regulations are
determined by the Bangko Sentral.
A. Statement 1 is true. Statement 2 is false
B. Statement 1 is false. Statement 2 is true.
C. Both statements are true.
D. Both statements are false.

4. Which government agency has the authority to prescribe ratios, ceilings, limitations, or other forms of
regulation on the different types of accounts and practices of banks and quasi-banks?
A. Monetary Board
B. Bureau of Internal Revenue
C. Bangko Sentral ng Pilipinas
D. Monetarial Board Secretary

5. The following are powers of a commercial bank, except:

A. Buying and selling foreign exchange and gold or silver bullion
B. Accepting and creating demand deposits
C. Inquiring into solvency and liquidity of the institution
D. Acquiring marketable bonds and other debt securities

6. Statement 1: No person or entity shall engage in banking operations or quasi-banking functions without
the authority from the Bangko Sentral.
Statement 2: The Bangko Sentral shall provide policy direction in the areas of money, banking and credit.
A. Statement 1 is true; Statement 2 is false
B. Statement 1 is false; Statement 2 is true
C. Both statements are true
D. Both statements are false

7. The Monetary board may authorize the organization of a bank or quasi-banks subject to the following
conditions, except for --
A. The entity is a stock corporation
B. Acts as financial agent, consultant or administrator
C. Funds are obtained from the public
D. Minimum capital requirements prescribed by the Monetary Board for each category of banks are
satisfied
8. Statement 1: The purpose of all loans and other credit accommodations shall be stated in the application
and in the contract between the banks and borrower.
Statement 2: Before granting a loan or other credit accommodation, a bank must ascertain that the debtor
is capable of fulfilling his commitments to the banks
A. Statement 1 is true; Statement 2 is false
B. Statement 1 is false; Statement 2 is true
C. Both statements are true
D. Both statements are false

9. Which of the following are the requirements for grant of loans or other credit accommodations?
A. Statement of Financial Position
B. Statement of Comprehensive Income
C. Statement of Changes in Equity
D. Both A and B

10. It is a type of financial institution that accepts deposits, offers checking account services, makes various loans,
and performs the functions of accepting deposits from the general public for investment with the aim of
earning profit.
A. Cooperative Banks
B. Commercial Banks
C. Rural Banks
D. Islamic Banks

11. One who hereby authorized to issue such regulations as it may deem necessary with respect to unsecured
loans or other credit accommodations that may be granted by banks.
A. Monetary Board
B. Board of Directors
C. Bangko Sentral
D. Offshore Banking System Decree

12. Statement 1: Foreign Banks in the Philippines shall be governed by the provisions of the Foreign Banks
Liberalization Act.
Statement 2: The Monetary Board may not authorize a foreign bank to acquire up to one hundred percent
of the voting stock of all banks organized under the laws of the Republic of the Philippines.
A. Statement 1 is true; Statement 2 is false
B. Statement 1 is false; Statement 2 is true
C. Both statements are true
D. Both statements are false

13. Statement 1: Non-Filipino citizens are not allowed to be a member of the board of directors of a bank to the
extent of the foreign participation in the equity of said bank.
Statement 2: The Board of Directors must have at least five, and a minimum of fifteen members, and two of
whom shall be independent directors.
A. Statement 1 is true; Statement 2 is false
B. Statement 1 is false; Statement 2 is true
C. Both statements are true
D. Both statements are false

14. A bank which provides a wide variety of comprehensive financial services, including those tailored to retail,
commercial and investment services.
A. Cooperative Banks
B. Rural Banks
C. Universal Banks
D. Commercial Banks
15. One of the following does not belong to the group
A. The entity is a stock corporation
B. Funds are obtained from the public
C. Minimum capital requirements prescribed by the Monetary Board
for each category of banks are satisfied
D. The entity is a partnership

16. Who has the authority to prescribe rules and regulations on the type of stocks a bank may issue?
A. Bangko Sentral ng Pilipinas
B. Board of Directors
C. Monetary Board
D. Offshore Banking System Decree

17. Statement I: No bank shall purchase or acquire shares of its own capital stock or accept its own shares as a
security for a loan, except when authorized by the Monetary Board
Statement II: Foreign individuals and non-bank corporations may own or control up to fifty percent (50%) of
the voting stock of a domestic bank.
A. True; True
B. False; False
C. True; False
D. False; True

18. How many directors are allowed in case of merger or consolidation of business?
A. 15
B. 21
C. 24
D. 30

19. Statement I: Owners of property that has been sold in a foreclosure sale prior to the effectivity of this Act
shall retain their redemption rights until their expiration.
Statement II: The registration of the certificate of foreclosure sale with the applicable Register of Deeds can
be more than 3 months from the foreclosure.
A. True; True
B. False; False
C. True; False
D. False; True

20. Statement I: The number of directors shall not exceed twenty-three (23).
Statement II: The by-laws of any bank, or any amendment thereto must be accompanied by a certificate of
authority from the Bangko Sentral for it to be subject for registration.
A. True; True
B. False; False
C. True; False
D. False; True

21. The following are the supervisory power of the Banko Sentral ng Pilipinas on the operations and activities of
Banks, except:
A. Regular investigation to determine whether an institution is supervising its business on a safe or
sound basis
B. Enforcing prompt corrective action
C. Inquiring into the solvency and liquidity of the institution
D. The conduct of examination to determine compliance with laws and regulations
22. Statement I: SEC shall not register the articles of incorporation of any bank, or any amendment thereto,
unless accompanied by a certificate of authority issued by the Department of Finance, under its seal.
Statement II: A bank’s Board of Directors must have at least five (5), and a maximum of fifteen (15)
members, and two (2) of whom shall be affiliated with the Monetary Board.
A. True; True
B. False; False
C. True; False
D. False; True

23. Statement I: A commercial bank has the power to acquire marketable bonds and other debt securities.
Statement II: A commercial bank has the power to discount and negotiate promissory notes, drafts, bills of
exchange, and other evidences of debt
A. True; True
B. False; False
C. True; False
D. False; True

24. Statement I: Loans and other credit accommodations against real estate shall not exceed 75% of the
appraised value of the respective real estate security, plus 60% of the appraised value of the insured
improvements, and such loans may be made to the owner of the real estate or to his assignees.
Statement II: A bank may acquire real estate and improvements, including bank equipment necessary for to
conduct its business and other purposes.
A. True; True
B. False; False
C. True; False
D. False; True

25. Foreign banks in the Philippines shall be governed by what provisions?

A. Batas Pambansa Blg. 22
B. Foreign Currency Deposits Act
C. Foreign Banks Liberalization Act
D. Human Security Act

26. The following are the powers of a trust entity, except:

A. Act as administrator of the estate of any deceased person, with or without the will annexed;
B. Accept and execute any trust for the holding, management, and administration of any estate, and the
rents, issues and profits thereof
C. Establish and manage common trust funds.
D. Extending credit

27. Statement I: Universal or commercial banks may open branches or other offices within or outside the
Philippines under prior approval of the Finance Department.
Statement II: Owners of property that has been sold in a foreclosure sale prior to the effectivity of General
Banking Law of 2000 shall retain their redemption rights until their expiration.
A. True; True
B. False; False
C. True; False
D. False; True
28. Statement I: The Monetary Board may revoke the license to transact business in the Philippines of any
foreign bank, if it finds that the foreign bank is insolvent
Statement II: The Bangko Sentral shall provide incentives to Trust Entities which, without government
guarantee, extend loans to finance educational institutions, cooperatives, hospitals and other medical
services, socialized or low-cost housing, local government units and other activities with social content.
A. True; True
B. False; False
C. True; False
D. False; True

29. The bank may acquire, hold or convey real property under the following circumstances, except:
A. Mortgaged to it in good faith by way of security for debts;
B. Conveyed to it in satisfaction of debts previously contracted in the course of its dealings; or
C. Purchase at sales under judgements, decrees, mortgages, or trust deeds held by it and such as it shall
purchase to secure debts due it.
D. Mortgaged to it by way of security for stocks

30. Who may at any time prior to the agreed maturity date prepay, in whole or in part, the unpaid balance of any
bank loan and other credit accommodation, subject to such reasonable terms and conditions as may be
agreed upon with the bank?
A. Testator
B. Borrower
C. Creditor
D. Administrator