Banking Important Questions
Sign in to use this feature.
Banking Important Questions - sample questions with answers
-
1. "Various legal provisions are made to ensure sound operations, corporate governance, and financial stability of banks and financial institutions. When an institution enters financial distress and can no longer protect depositor interests, it may be placed into liquidation proceedings via court or special regulatory processes. Such statutory forced dissolution procedures are stipulated within a dedicated chapter of the law." In accordance with the above context, which chapter of the Bank and Financial Institutions Act, 2073 contains provisions relating to compulsory liquidation?
Show answer
Answer: Chapter 12
Chapter 12 of the Bank and Financial Institutions Act, 2073 provides legal provisions concerning the compulsory liquidation of banks and financial institutions.
-
2. Within how many days of receiving an application can Nepal Rastra Bank grant an operating license if the criteria for conducting banking transactions are met?
Show answer
Answer: 120 days
According to banking laws, Nepal Rastra Bank may grant an operating license within 120 days of receiving the application if all required criteria are fulfilled.
-
3. According to the Bank and Financial Institutions Act, 2073, which institutions are denoted by the term 'Bank'?
Show answer
Answer: Commercial Bank and Infrastructure Development Bank
As per the definition in the Bank and Financial Institutions Act, 2073, 'Bank' refers to Commercial Banks and Infrastructure Development Banks.
-
4. According to the definition in the Bank and Financial Institutions Act, 2073, which of the following does NOT fall under 'Financial Institution'?
Show answer
Answer: Commercial Bank
Under BAFIA 2073, 'Financial Institution' denotes Development Banks, Finance Companies, and Microfinance Financial Institutions, whereas Commercial Banks are defined as 'Banks'.
-
5. Where must a bank or financial institution register its securities prior to making a public offering according to the law?
Show answer
Answer: Securities Board of Nepal
According to securities laws and the Banks and Financial Institutions Act, any corporate body or financial institution must register its securities with the Securities Board of Nepal prior to making a public offering. Although banks need prior approval from Nepal Rastra Bank for their capital plans, the formal registration and issuance approval of securities are strictly regulated and granted by the Securities Board of Nepal.
-
6. According to the Banks and Financial Institutions Act, 2073, what is the maximum shareholding threshold below which a company does not require prior approval to sell or transfer its shares?
Show answer
Answer: Less than 2 percent
According to BAFIA 2073, an entity holding less than 2 percent of the paid-up capital of a bank or financial institution does not require any prior approval to sell or transfer its shares.
-
7. Consider the following statements regarding the submission of directors' details in banks and financial institutions: 1. A director must submit their details to the institution within 7 days of appointment. 2. A director must submit their details to the institution within 15 days of appointment. 3. A director must submit their details to the institution within 30 days of appointment. Which of the above statements is correct?
Show answer
Answer: Only 1 is correct
According to BAFIA, a director must submit their personal and financial disclosures to the institution within 7 days of being appointed.
-
8. Within how many days must Nepal Rastra Bank be notified if there is a change in the details of a director or a change of director in a bank or financial institution?
Show answer
Answer: 15 days
Under BAFIA, notice of any change in directors or their details must be submitted to Nepal Rastra Bank within 15 days.
-
9. To whom is the Chief Executive Officer of a bank or financial institution accountable for their actions?
Show answer
Answer: Board of Directors
According to the Banks and Financial Institutions Act, the Chief Executive Officer of a bank or financial institution is accountable to the Board of Directors for their work.
-
10. According to the Banks and Financial Institutions Act, 2073, what is the minimum age required to be appointed as a director of a bank or financial institution?
Show answer
Answer: 25 years
According to BAFIA 2073, an individual must be at least 25 years of age to be eligible for appointment as a director.
-
11. As per the provisions that Nepal Rastra Bank may prescribe, what is the maximum percentage of paid-up capital of a bank or financial institution that a single individual, firm, or company can invest in?
Show answer
Answer: 15 percent
Under the law, Nepal Rastra Bank may prescribe that an individual, firm, or company can hold a maximum of 15 percent of the paid-up capital of any single bank or financial institution.
-
12. Consider the following statements regarding the submission of financial statements by banks and financial institutions: 1. The balance sheet and profit and loss account must be submitted to Rastra Bank within 3 months of the end of the fiscal year. 2. The balance sheet and profit and loss account must be submitted to Rastra Bank within 6 months of the end of the fiscal year. 3. The balance sheet and profit and loss account must be submitted to Rastra Bank within 1 month of the end of the fiscal year. Which of the above statements is correct?
Show answer
Answer: Only 1 is correct
Banks and financial institutions must submit their balance sheet and profit and loss account to Nepal Rastra Bank within 3 months of the end of the fiscal year.
-
13. According to the Banks and Financial Institutions Act, 2073, under whose coordination must the Audit Committee in a bank or financial institution be formed?
Show answer
Answer: Non-executive Director
As per the Act, a 3-member Audit Committee must be constituted under the coordination of a non-executive director.
-
14. The Banks and Financial Institutions Act, 2073 was enacted to strengthen Nepal's financial sector. It lays down comprehensive provisions across distinct chapters concerning the incorporation of institutions, their board of directors, capital funds, and regulatory oversight. To ensure that public deposits are soundly channeled and recovered, a strict legal framework governs credit operations. Accordingly, what subject matter is governed under Chapter 8 of the Banks and Financial Institutions Act, 2073?
Show answer
Answer: Provisions relating to credit disbursement and recovery
Chapter 8 of the Banks and Financial Institutions Act, 2073 governs the provisions relating to credit disbursement and recovery.
-
15. The Banks and Financial Institutions Act, 2073 (BAFIA) was enacted to make Nepal's financial sector resilient, transparent, and competitive. This umbrella act systematically regulates essential banking aspects—including incorporation, licensing, capital structure, board governance, auditing, and mergers—across different chapters. Looking at its structural framework, how many total chapters are there in the Banks and Financial Institutions Act, 2073?
Show answer
Answer: 14
The Banks and Financial Institutions Act, 2073 comprises a total of 14 chapters and 134 sections.
This chapter has 48 questions. Practise them all with timing, answers and explanations.