COOP

Question 1
Which of the following does not necessarily characterize a cooperative?
A. Autonomy
B. Common bond of interest
C. Voluntary involvement
D. Absence of capital

Answer: D.

Question 2
A cooperative whose members are natural persons is called
A. Primary
B. Natural
C. Parent
D. De jure

Answer: A.

Question 3
Which of the following is not a qualification for membership to a primary
cooperative?
A. Natural born resident citizen
B. Of legal age
C. Common bond of interest
D. Actually residing or working in the intended area of operation

Answer: A. The law only requires citizenship.

Question 4
A single-purpose cooperative may transform into a multi-purpose cooperative only
after at least how many years of operations?
A. 2
B. 3
C. 4
D. 5

Answer: A.

Question 5
Multi-purpose cooperatives must have a minimum paid-up capital of
A. P15,000
B. P50,000
C. P100,000
D. P250,000
Answer: C. With the exception of agricultural and agrarian reform cooperatives, only those
cooperatives with a minimum paid-up capital of P100,000 may be allowed to transform into
a multi-purpose cooperative.

Question 6
Duly registered cooperatives shall have what extent of liability?
A. Unlimited
B. Limited
C. None at all
D. To the extent fixed by its by-laws

Answer: B.

Question 7
Cooperatives have maximum legal life of 50 years. This period may be extended for
periods not exceeding 50 years in any single instance by an amendment of the
articles of cooperation. However, no extension can be made earlier than ______ prior
to the original or subsequent expiry date unless there are justifiable reasons for an
earlier extension.
A. 3 years
B. 5 years
C. 7 years
D. 10 years

Answer: B.

Question 8
The preferred share capital of a cooperative shall not exceed what percent of its total
authorized share capital?
A. 5%
B. 10%
C. 20%
D. 25%

Answer: D.

Question 9
No member shall own more than what percent of the subscribed share capital of a
cooperative?
A. 5%
B. 10%
C. 15%
D. 20%

Answer: B.

Question 10
When does a cooperative acquire juridical personality?
A. From the formation of all its members
B. From the transfer of funds to the cooperatives
C. From the issuance of certificate of registration by the CDA
D. From the assumption of offices by its directors

Answer: C. In addition, the certificate is conclusive evidence that the cooperative therein
mentioned is duly registered, unless it is proved that the registration has been cancelled.

Question 11
Which type of cooperative has the primary purpose of procuring and distributing
commodities to its members and non-members?
A. Credit
B. Consumers
C. Service
D. Producers

Answer: B.

Question 12
This type of cooperative undertakes joint production whether agricultural or
industrial.
A. Producers
B. Multi-purpose
C. Consumers
D. Marketing

Answer: A. It is formed and operated by its members to undertake the production and
processing of raw materials or goods produced by its members into finished or processed
products for sale by the cooperative to its members and non-members.

Question 13
This type of cooperative is organized for the primary purpose of engaging in savings
and credit services and other financial services.
A. Cooperative bank
B. Financial service cooperative
C. Lending cooperative
D. Commercial cooperative

Answer: B.

Question 14
A laboratory cooperative is one organized by
A. Scientists
B. People of scientific background
C. Minors
D. Researchers

Answer: C.
Question 15
What type of cooperative member has no right to vote or be voted upon and shall
only be entitled to any such rights and privileges as the bylaws may provide?
A. Regular member
B. Associate member
C. Loyal member
D. Disloyal member

Answer: B.

Question 16
It is the highest policy-making body of the cooperative.
A. Board of Directors
B. Board of Trustees
C. General Assembly
D. Cooperative Governance

Answer: C.
INSOLVENCY AND CORPORATE REHABILITATION

Question 1
It shall refer to the financial condition of a debtor that is generally unable to pay its or
his liabilities as they fall due in the ordinary course of business or has liabilities that
are greater than its or his assets.
A. Bankrupt
B. Insolvent
C. Indebted
D. Dissolved

Answer: B.

Question 2
Voluntary proceeding differs from involuntary proceeding in that it is initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver

Answer: B.

Question 3
Involuntary proceedings are initiated by the
A. Court
B. Insolvent debtor
C. Creditors
D. Receiver

Answer: C.

Question 4
An insolvent debtor may initiate involuntary proceeding by filing a petition for
rehabilitation with the court only if with the prior approval of the following (choose
the incorrect one):
A. the owner in the case of a sole proprietorship
B. the majority of the partners in the case of a partnership
C. the vote of at least 2/3 of the members of a nonstock corporation, in a member’s meeting
called for the purpose
D. the the majority of the vote of the board of directors or trustees and authorized by the
vote of the stockholders representing at least majority of the outstanding capital stock, in a
meeting called for the purpose

Answer: D. For the stockholders, the required vote is at least 2/3 of the outstanding capital
stock.

Question 5
Which of the following creditor or group of creditors may initiate involuntary
proceeding against the debtor by filing a petition for rehabilitation with the court?
A. A creditor with a claim of P500,000
B. Group of creditors with aggregate claim of P750,000
C. A creditor with a claim of P800,000
D. Group of creditors with aggregate claim of P1,000,000

Answer: D. Any creditor or group of creditors with a claim of, or the aggregate of whose
claims is, at least P1,000,000. or at least twenty-five percent (25%) of the subscribed capital
stock or partners’ contributions, whichever is higher, may initiate involuntary proceedings
against the debtor by filing a petition for rehabilitation with the court.

Question 6
An individual debtor who, possessing sufficient property to cover all his debts
but foreseeing the impossibility of meeting them when they respectively fall due, may
file a verified petition that he be declared in the state of __________________ by the
court of the province or city in which he has resides for six (6) months prior to the
filing of his petition.
A. bankruptcy
B. suspension of payments
C. insolvency
D. liquidation

Answer: B.

Question 7
In a petition for declaration for the state of suspension of payments, which of the
following is not required as a minimum attachment?
A. A schedule of assets and liabilities
B. An inventory of assets
C. A proposed agreement with creditors
D. A list of all loans in the last 5 years

Answer: D.

Question 8
It refers to the restoration of the debtor to a condition of successful operation and
solvency.
A. Reorganization
B. Rehabilitation
C. Reconditioning
D. Liquidation

Answer: B.

Question 9
Which of the following is least likely included as a rehabilitation plan?
A. Debt-equity conversion
B. Quasi-reorganization
C. Liquidation
D. Dacion en pago

Answer: C. Liquidation is the process of realizing the assets of the company, distributing the
proceeds to rightful claimants and bringing an end to the business, a process opposite to
rehabilitation.

Question 10
Which of the following is not an effect of a stay order or suspension order?
A. It suspends all actions or proceedings, in court or otherwise, for the enforcement of
claims against the debtor.
B. It suspends all actions to enforce any judgment, attachment or other provisional
remedies against the debtor.
C. It prohibits the debtor from selling, encumbering, transferring or disposing in any manner
any of its properties even if it is in the ordinary course of business.
D. It prohibits the debtor from making any payment of its liabilities outstanding as of the
commencement date except as may be provided in the Act.

Answer: C. A stay order or suspension order prohibits the debtor from selling, encumbering,
transferring or disposing in any manner any of its properties except in the ordinary course of
business.
PDIC

Question 1
Which of the following is not a function of the PDIC?
A. Deposit insurer
B. Co-regulator of banks
C. Receiver and liquidator of closed banks
D. Engage in the lending of funds obtained from the public

Answer: D. This is a function of banks or banking institutions.

Question 2
What is the amount of insured deposit?
A. Minimum of P500,000, gross
B. Maximum of P500,000, gross
C. Maximum of P500,000, net
D. Minimum of P500,000 net

Answer: C. The insured deposit is net of any obligation of the depositor to the insured bank
as of the date of closure, but not to exceed P500,000.

Question 3
True/False. Joint accounts shall be insured separately from any individually-owned deposit
account.

Answer: True.

Case 1 (for questions 4 to 8)

Juan dela Cruz has the following deposits in Bank 1:
– Individual account in his name: P600,000 savings deposit
– Joint account in his name AND Maria dela Cruz: P500,000 time deposit
– Joint account in his name OR Pedro dela Cruz: P800,000 demand deposit
Assume that for the joint accounts, there is equal sharing.
(Source: PDIC)

Question 4
What is the total insured deposit of Juan dela Cruz?
A. P500,000
B. P750,000
C. P1,000,000
D. P1,250,000

Answer: C. For the single/individual account = P500,000; for the AND joint account =
P250,000 (P500,000 maximum/2); for the OR joint account = P250,000 (P500,000
maximum/2)
Question 5
What is the total uninsured deposit of Juan dela Cruz?
A. P100,000
B. P250,000
C. P500,000
D. P600,000

Answer: B. For the single account = excess of P100,000; for the AND joint account = no
excess; for the OR joint account = excess of P150,000 (P300,000/2)

Question 6
What is the total insured deposit of Maria dela Cruz?
A. Zero
B. P250,000
C. P500,000
D. None of the choices

Answer: B. P500,000/2

Question 7
What is the total insured deposit of Pedro dela Cruz?
A. Zero
B. P250,000
C. P400,000
D. P500,000

Answer: B. Maximum P500,000/2

Question 8
What is the total uninsured deposit of Pedro dela Cruz?
A. Zero
B. P100,000
C. P150,000
D. P250,000

Answer: C. Excess of P300,000/2

Case 2 (questions 9 to 10)

In addition to the accounts in Case 1, assume that, the following joint account is also
maintained by Juan dela Cruz in the same bank:
– Joint account in his name or Maria dela Cruz or Pedro dela Cruz = P450,000 (equal
sharing)

Question 9
What is the total of insured deposit of Juan dela Cruz?
A. P500,000
B. P1,000,000
C. P1,150,000
D. None of the choices

Answer: B. The joint accounts will be insured separately from the individual account.
However, the share of Juan dela Cruz in the joint accounts shall not exceed P500,000 total
(which has been reached already in Case 1 Question 4). This means that the additional
P150,000 share (P450,000/3) will become uninsured deposit.

Question 10
What is the total of insured deposit of Pedro dela Cruz?
A. P250,000
B. P400,000
C. P500,000
D. P600,000

Answer: D. Share in joint OR account = P250,000 (maximum of P500,000/2); share in 3-

way joint OR account = P150,000 (P450,000/3)

Question 11
The portion of the deposit not insured shall
A. Be forfeited in favor of the bank
B. Be forfeited in favor of the Government
C. Become a claim against the asset of the closed bank
D. Be written off immediately by the depositor

Answer: C

Question 12
Deposits in which of the following banks are insured by the PDIC?
I. Commercial banks
II. Savings and mortgage banks
III. Private development banks
IV. Cooperative banks
V. Savings and loan associations
A. All except IV
B. All except V
C. All except IV and V
D. All banks enumerated above

Answer: D.

Question 13
True/False. Foreign currency deposits are also insured by the PDIC.

Answer: True. This is pursuant to RA No. 6426 and Central Bank Circular No. 1389.

Question 14
The PDIC will not pay deposit insurance on the following accounts or transactions.
Which is the exception?
A. Investments in bonds
B. Deposit products emanating from unsafe and unsound banking practices
C. Deposits from unlawful proceeds
D. Deposits in foreign currency

Answer: D.

Question 15
True/False. Deposits in different banks are added together for the purpose of the P500,000
maximum.
True/False. Deposits in different branches of the same bank are insured separately.
A. False, True
B. True, False
C. False, False
D. True, True

Answer: C. Deposits in different banks are separately insured. Deposits in different

branches of the same bank are considered as deposits in one bank.

Question 16
To file for claims on the insured deposits, which of the following is/are not required?
A. Original evidence of deposits such as savings passbook
B. Claim form
C. For all depositors, photocopy of birth certificate and valid ID of the parent
D. 1 valid original photo-bearing ID with clear signature of depositor

Answer: C. This is only required for depositors below 18 years old.

Question 17
Depositors with valid deposit accounts with balances of ___________________ are
not required to file claims, provided they meet other qualifications, as required.
A. P100,000 and below
B. P150,000 and below
C. P200,000 and below
D. P250,000 and below

Answer: A.

Question 18
A joint demand deposit account in the name of Juan dela Cruz and ABC Corporation
in the amount of P500,000 was held in Bank 1. What is the insured deposit of Juan
dela Cruz?
A. Zero
B. P250,000
C. P500,000
D. P100,000
Answer: A. The deposit is presumed to belong entirely to ABC Corporation, the juridical
person or entity in the joint account. Source.
GENERAL BANKING LAW

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.
ANTI BOUNCING CHECK

Question 1
Which of the following is not one of the elements of violation of BP Blg. 22?
A. the making, drawing, and issuance of any check to apply for account or for value
B. the knowledge of the maker, drawer, or issuer that at the time of issue he does not have
sufficient funds in or credit with the drawee bank for the payment of the check in full upon its
presentment
C. the subsequent dishonor of the check by the drawee bank for insufficiency of funds or
credit or dishonor for the same reason had not the drawer, without any valid cause, ordered
the bank to stop payment
D. the subsequent payment by the drawer to the holder of the check after it was dishonored
by the drawee bank upon presentment

Answer: D.

Question 2
A bounced or worthless check is also known as a
A. Post-dated check
B. Crossed check
C. Bum check
D. Special check

Answer: C.

Question 3
Which of the are checks without sufficient fund, as contemplated by BP Blg. 22.
I. A check dishonored by the bank upon presentment, due to insufficiency of funds, and the
issuer has knowledge of insufficiency at the time of issue
II. A check which would have been dishonored for insufficiency, were it not for the drawer’s
unjustifiable order to his bank to stop the payment of the check
III. A check dishonored for insufficiency when presented for payment within 90 days from
issue, even if there was sufficient fund at the time of issue
A. I and II only
B. I and III only
C. II and III only
D. I, II and III

Answer: D.

Question 4
A issued check in favor of B. A knew at the time of issue that the check has no
sufficient fund in the drawee bank. Upon presentment by B, the bank dishonored the
check for insufficiency. B filed charges against A for violation of BP Blg. 22. A,
however, subsequently issued another check to B in payment of the amount covered
by the original check. Can A still be charged with violation of BP Blg. 22?
A. No, because the subsequent check cleared the offense
B. No, because there is no more unpaid debt
C. No, because no person shall be imprisoned for debt
D. Yes, because what is punished is the act of issuing a worthless check

Answer: D. The law has made the mere act of issuing a bum check a malum prohibitum, an
act proscribed by legislature for being deemed pernicious and inimical to public welfare. The
gravamen of the offense under this law is the act of issuing a worthless check or a check
that is dishonored upon its presentment for payment. Thus, even if there had been
payment, through compensation or some other means, there could still be prosecution for
violation of B.P. 22. (Tan vs. Mendez, GR No. 138669, June 6, 2002).

Question 5
As used in BP Blg. 22, it shall mean an arrangement or understanding with the bank
for the payment of check.
A. Debit
B. Credit
C. Deposit
D. Withdrawal

Answer: B.

Question 6
When a worthless check is issued by a corporate entity, who shall be liable?
A. the shareholders
B. the corporate officers signing the check
C. the Board of Directors
D. no one

Answer: B. Where the check is drawn by a corporation, company or entity, the person or
persons who actually signed the check in behalf of such drawer (i.e. the corporation,
company or entity) shall be liable. This means that the officers signing the check for the
corporation will be the ones liable.

Question 7
Persons guilty of issuing checks without sufficient funds face which two of the
following sanctions?
A. Imprisonment of not less than 30 days but not more than 1 year
B. Imprisonment of not less than 60 days but not more than 2 years
C. Fine equal to the amount of the check
D. Fine of not less than but not more than double the amount of the check

Answer: A and D. The punishment shall be either imprisonment of not less than 30 days but
not more than 1 year, or fine of not less than but not more than double the amount of the
check.

Question 8
The making, drawing and issuance of a check payment of which is refused by the
drawee because of insufficient funds in or credit with such bank, when presented
within ninety (90) days from the date of the check, shall be
A. prima facie evidence of knowledge of such insufficiency of funds or credit
B. conclusive evidence of knowledge of such insufficiency of funds or credit
C. indisputable evidence of knowledge of such insufficiency of funds or credit
D. proof beyond reasonable doubt of knowledge of such insufficiency of funds or credit

Answer: A. However, this presumption does not apply when the maker or drawer pays the
holder of the check the amount due, or makes arrangement for payment in full by the
drawee of such check within 5 banking days after receiving notice that such check has not
been paid by the drawee.

Question 9
When a check presented has bounced, it is the drawee bank’s duty to
A. initiate the filing of charges against the drawer for violation of BP Blg. 22
B. advise the payee of the check to file charges against the drawer for violation of BP Blg.
22
C. cause to be written, printed, or stamped on the check, in plain language, or attached
thereto, the reason for its dishonor or refusal to pay
D. All of the above

Answer: C. Moreover, where there are no sufficient funds in or credit with such drawee
bank, such fact shall always be explicitly stated in the notice of dishonor or refusal.
ANTI MONEY LAUNDERING

Question 1
As to the character of the offense, “Money Laundering” is
A. Civil
B. Criminal
C. Political
D. Natural

Answer: B. Money laundering is a crime whereby the proceeds of an unlawful activity are
transacted, thereby making them appear to have originated from legitimate sources.

Question 2
What is the threshold figure for a “covered transaction”?
A. at least P500,000
B. more than P500,000
C. at least P4,000,000
D. more than P4,000,000

Answer: B. A covered transaction is a transaction in cash or other equivalent monetary

instrument involving a total amount of more than P500,000 within 1 banking day. (Note: the
more than P4,000,000 threshold was before the amendments made under RA No. 9194).

Question 3
True/False. The “more than P500,000” threshold applies to “suspicious transactions”.

Answer: False. Suspicious transactions are transactions with covered institutions,

regardless of the amounts involved, where any of the circumstances enumerated in the law
exist.

Question 4
Suspicious transactions are transactions with covered institutions, regardless of the
amounts involved, where any of the following circumstances exist (choose the
exception):
A. there is no underlying legal or trade obligation, purpose or economic justification
B. the client is not properly identified
C. the amount involved is commensurate with the business or financial capacity of the client
D. the transactions is in a way related to an unlawful activity or offense under the Act that is
about to be, is being or has been committed

Answer: C. The phrase should read as: “not commensurate”.

Question 5
Suspicious transactions shall be reported by covered persons. Which of the
following is least likely considered as a covered person?
A. Bank or banking institution
B. Insurance company
C. Jewelry dealer in precious metal
D. Lawyer acting as independent legal counsel

Answer: D. Covered persons shall not include lawyers and accountants acting as
independent legal professionals in relation to information concerning their clients or where
disclosure of information would compromise client confidences or the attorney-client
relationship.

Question 6
To which specific body shall covered persons report the occurrence of suspicious
transactions?
A. COA – Commission on Audit
B. BSP – Bangko Sentral Ng Pilipinas
C. AMLC – Anti-Money Laundering Council
D. PDIC – Philippine Deposit Insurance Commission

Answer: C. Covered persons shall report to the AMLC all covered transactions and
suspicious transactions.

Question 7
Within how many days shall covered persons report to the AMLC the occurrence of
suspicious transactions?
A. 1 working day
B. 3 working days
C. 5 working days
D. 7 working days

Answer: C. Covered persons shall report to the AMLC all covered transactions and
suspicious transactions within 5 working days from occurrence thereof, unless the AMLC
prescribes a different period not exceeding 15 working days.

For all of the new topic in Regulatory Framework for Business Transactions, click here.
For a list of all quizzes, check this page.
NEW CENTRAL BANK ACT

Question 1
It means that, when a currency is offered in payment of a debt, public or private, the
same must be accepted.
A. Purchasing power
B. Negotiability of instrument
C. Legal tender power
D. Liquidity of money

Answer: C.

Question 2
Which of the following does not constitute legal tender?
A. 1,000 pieces of P20-bill
B. 100 pieces of P20-bill and 100 pieces of P10-coin
C. 300 pieces of P5-coin
D. Centavo coins worth P100

Answer: C. Philippine currency notes (bills) have no limit to their legal tender power. For
coins, centavos are acceptable up to P100, while other coins (P1, P5, P10) are acceptable
up to P1,000.

Question 3
Which of the following has legal tender power?
I. Checks representing demand deposit
II. Negotiable promissory note
A. I only
B. II only
C. Both I and II
D. Neither I nor II

Answer: D. Checks representing demand deposits do not have legal tender power and their
acceptance in the payment of debts, both public and private, is at the option of the creditor:
Provided, however, That a check which has been cleared and credited to the account of the
creditor shall be equivalent to a delivery to the creditor of cash in an amount equal to the
amount credited to his account. Negotiable instruments do not have legal tender power.

Question 4
Which government institution has the sole authority to issue notes and coins for
circulation in the Philippines?
A. Bureau of Treasury
B. Bureau of Internal Revenue
C. Bangko Sentral Ng Pilipinas
D. Landbank of the Philippines

Answer: C.
Question 5
It is an attempt to save the bank from bankruptcy and eventual liquidation.
A. Liquidation
B. Conservatorship
C. Receivership
D. Dissolution

Answer: B. Broadly defined, conservatorship is an attempt to save the bank from

bankruptcy and eventual liquidation. Doing so entails appointment of a conservator who will
take steps such as management reforms and infusion of additional capital.

Question 6
Who appoints the conservator?
A. Monetary Board
B. Commission on Audit
C. Depositor
D. Court

Answer: A.

Question 7
Which of the following is not one of the functions of the conservator?
A. Take charge of the assets, liabilities and management of a bank or quasi-bank
B. Reorganize the management
C. Collect all monies and debts due to the bank
D. Administer the bank’s assets and liabilities for the benefit of its creditors

Answer: D. Administering the bank’s assets and liabilities for the benefit of creditors is a
function of a receiver, not conservator.

Question 8
The conservatorship shall be for a period
A. Of at least 1 year
B. Of at least 2 years
C. Not to exceed 1 year
D. Not to exceed 2 years

Answer: C. The conservatorship shall not exceed 1 year.

Question 9
It is the summary closure of the bank by the Bangko Sentral ng Pilipinas without the
need of prior notice and hearing.
A. Conservatorship
B. Receivership
C. Liquidation
D. Rehabilitation

Answer: B.
Question 10
The bank or banking institution is placed under receivership upon finding of the
Monetary Board of the following (choose the exception):
A. Inability to pay liabilities
B. Insufficiency of realizable assets to meet its liabilities
C. Inability to continue business without involving probable loss to depositors and creditors
D. Inability to declare dividends

Answer: D.

Question 11
Who among the following has the task of paying the claims of creditors and other
liabilities of the bank?
A. Conservator
B. Receiver
C. Liquidator
D. President

Answer: C.

Question 12
Receivership shall not exceed
A. 30 days
B. 90 days
C. 120 days
D. 60 days

Answer: B.

Question 13
Which of the following is not a function of a receiver?
A. Gather and take charge of all the assets and liabilities of the bank
B. Administer the assets and liabilities for the benefit of its creditors
C. Exercise the general powers of a receiver under the Revised Rules of Court
D. Pay or commit any act that will involve the transfer or disposition of any asset of the bank

Answer: D. With the exception of administrative expenditures, the receiver shall not pay or
commit any act that will involve the transfer or disposition of any asset of the
institution. However, the receiver may deposit or place the funds of the institution in non-
speculative investments.
SECRECY OF BANK DEPOSTIS

Question 1
Which of the following are covered by the bank secrecy law?
A. Only demand deposits
B. All deposits of whatever nature
C. Investments in bonds issued by the Philippine Government
D. B and D

Answer: D. The law states that all deposits of whatever nature with banks or banking
institutions in the Philippines including investments in bonds issued by the Government of
the Philippines, its political subdivisions and its instrumentalities are considered absolutely
confidential.

Question 2
True/False. Foreign currency deposits are excluded from the protection of bank secrecy
laws.

Answer: False. Republic Act No. 6426, known as the “Foreign Currency Deposit Act of the
Philippines”, Sec. 8 states that all foreign currency deposits are also considered of an
absolutely confidential nature.

Question 3
In all of the following cases, the deposits may be examined, inquired or looked into
by any person, government official, bureau or office. Choose the exception.
A. When permitted (written) by the depositor
B. In cases of impeachment
C. When the depositor is a public official
D. In cases where the money deposited or invested is the subject matter of litigation

Answer: C. Being a public official does not automatically waive the right to bank secrecy.
The deposit may only be examined, inquired or looked into upon order of competent court in
cases of bribery or dereliction of duty of public officials.

Question 4
Can independent external auditors inquire into or examine bank deposits during the
course of the audit?
A. Yes, anytime.
B. Yes, in the regular audit of the bank, with conditions
C. No, because of the absolute nature of secrecy
D. No, unless the auditor has reason to believe that bank fraud exists

Answer: B. Presidential Decree No. 1792, amending Republic Act No. 1405 states that,
during a regular audit of a bank by an independent auditor, the auditor may inquire,
examine or look into deposits, provided that the following conditions are satisfied: a)
the examination is for audit purposes only, and b) the results of the examination shall be for
the exclusive use of the bank.
Question 5
Violations of the bank secrecy law subjects the offender, upon conviction, to which
of the following?
A. Imprisonment of not more than 2 years or fine of not more than P20,000 or both
B. Imprisonment of not more than 5 years or fine of not more than P20,000 or both
C. Imprisonment of not more than 2 years or fine of not more than P40,000 or both
D. Imprisonment of not more than 5 years or fine of not more than P40,000 or both

Answer: B.