Question 1

Which of the following does not characterize a bank or banking institution?

A. Authorized to engage in lending of funds
B. Funds for lending are obtained mainly from private institutions
C. Funds are from receipt of deposits or sale of bonds
D. It conducts banking activities on a regular basis

Answer: B. The funds used by the bank from lending are mainly from the public through the receipt of deposits or the sale of bonds,
securities, or obligations of any kind.

Question 2
Which of the following is excluded from the term “banking institution”?
A. Building and loan association
B. Money changer
C. Trust company
D. Savings bank

Answer: B. Bank or banking institutions include commercial, savings and mortgage banks, trust companies, savings and loan
associations, Philippine branches and agencies of foreign banks and all other corporations, companies, partnerships and associations
performing banking functions in the Philippines.

Question 3
True/False. Insurance companies are included in the provisions of Republic Act No. 337 or the General Banking Law.

Answer: False. Insurance companies are exempted from the provisions of RA No. 337.

Question 4
Which of the following security cannot be issued by banks?
A. Preferred stock
B. Common stock
C. Bonded instrument
D. No par value stock

Answer: D. No banking institution shall issue no par value stock.

Question 5
At least what percent of the capital stock of any banking institution shall be owned by citizens of the Philippines?
A. 50%
B. 60%
C. 75%
D. 90%

Answer: B.

Question 6
What type of banking institution is one which accepts or creates demand deposits subject to withdrawal by check?
A. Trust company
B. Mortgage bank
C. Commercial bank
D. Building and loan association

Answer: C.

Question 7
Which of the following is not a purpose of a building and loan association?
A. to accumulate the savings of its stockholders
B. to repay to stockholders their accumulated savings and profits upon surrender of their shares
C. to loan its funds to stockholders of the security of unencumbered real estate
D. to act as trustee or administer any trust or hold property in trust or on deposit for the benefit of others

Answer: D. What is described here is the purpose of a trust corporation.

Question 8
True/False. Commercial banking institutions cannot engage in the business of a trust company.

Answer: False. A commercial banking corporation may, with the approval of the Monetary Board, be authorized to engage in the
business of a trust company, but shall be subject to the provisions related to the trust corporations as regards its trust business.

Question 9
What does the D in DOSRI represent?
A. Dividends
B. Directors
C. Discounts
D. Depreciation

Answer: D. DOSRI stands dealings with Directors, Officers, Stockholders and their Related Interests.
Question 10
DOSRI should be in the regular course of business and the dealings should be upon which terms?
A. Not more favorable to the bank than those offered to others
B. Not less favorable to the bank than those offered to others
C. Exactly similar to those offered to others
D. Double those offered to others

Answer: B. The dealings should be upon terms not less favorable to the bank than those offered to others.

Question 11
A substantial stockholder shall mean a person, or group of persons whether natural or juridical, owning such number of
shares that will allow such person or group to elect at least _______________ of the board of directors of a bank or who is
directly or indirectly the registered or beneficial owner of more than _______________ of any class of its equity security.
A. 1 member; 20%
B. 2 members; 10%
C. 1 member; 10%
D. 2 members; 20%

Answer: C.

Question 12
What does SBL stand for?
A. Standard By Laws
B. Secured Banking Legislation
C. Single Borrower’s Limit
D. See Bottom Line

Answer: C.

Question 13
Per Bangko Sentral ng Pilipinas Circular No. 425, series of 2004, consistent with national interest, the total amount of loans,
credit accommodations and guarantees that may be extended by a bank to any person, partnership, association, corporation
or other entity shall at no time exceed ______ of the net worth of such bank.
A. 10%
B. 20%
C. 25%
D. 40%

Answer: C.

Question 14
With certain requirements, SBL can be increased by what percent?
A. 5%
B. 10%
C. 15%
D. 20%

Answer: B. It can be increased by an additional 10%; Provided, That the additional liabilities are adequately secured by trust receipts,
shipping documents, warehouse receipts or other similar documents transferring or securing title covering readily marketable, non-
perishable goods which must be fully covered by insurance.