GENERAL BANKING LAW OF 2000 (MCQ)

1. In case a bank does not comply with the prescribed minimum ratio, the Monetary Board
a) may limit or prohibit the distribution of net profits by such bank and may require that
part or all of the net profits be used to increase the capital accounts of the bank until
the minimum requirement has been met
b) the Monetary Board may temporarily relieve the surviving bank, consolidated bank, or
constituent bank or corporations
c) May prescribe the composition and the manner of determining the net worth and total
risk assets of banks and their subsidiaries
d) May not restrict or prohibit the acquisition of major assets and the making of new
investments by the bank until the minimum required capital ratio has been restored

2. Loans and other credit accommodations against real estate shall

a) exceed seventy-five percent (75%) of the appraised value of the respective real estate
security, plus sixty percent (60%) of the appraised value of the insured improvements
b) not exceed seventy-five percent (75%) of the appraised value of the respective real
estate security, plus sixty percent (60%) of the appraised value of the insured
improvements
c) not exceed sixty percent (60%) of the appraised value of the respective real estate
security, plus seventy-five percent (75%) of the appraised value of the insured
improvements
d) not exceed sixty percent (60%) of the appraised value of the respective real estate
security, plus seventy-five percent (75%) of the appraised value of the insured
improvements

3. Which of the following statements is true?

a) loans and other credit accommodations against real estate shall not exceed seventy-five
percent (75%) of the appraised value of the security
b) loans and other credit accommodations on security of chattels and intangible
properties shall not exceed seventy-five percent (75%) of the appraised value of the
security
c) loans and other credit accommodations against real estate shall not exceed seventy-five
percent (60%) of the appraised value of the security
d) loans and other credit accommodations on security of chattels and intangible properties
shall not exceed seventy-five percent (60%) of the appraised value of the security

4. Statement 1: If the bank finds that the proceeds of the loan or other credit accommodation
have been employed, without its approval, for purposes other than those agreed upon with the
bank, it shall have the right to terminate the loan or other credit accommodation and demand
immediate repayment of the obligation
 Statement 2: The Monetary Board may prescribe the maturities, as well as related terms and
conditions for various types of bank loans and other credit accommodations
Statement 3: The Monetary Board may prescribe the maturities, as well as related terms and
conditions for various types of bank loans and other credit accommodations
Statement 4: In case of loans and other credit accommodations with maturities of more than
ten (10) years, provisions must be made for periodic amortization payments, but such payments
must be made at least annually

Which statements above are true?

a) 1 and 2
b) 1,2, and 3
c) 4 only
d) 2 and 4

5. Statement 1: A borrower 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 between the bank and its borrower.
Statement 2: The Bangko Sentral shall provide incentives to banks which, with 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.
Statement 3: The Monetary Board may fix, by regulation or by order in a specific case, the
amount of reserves for bad debts or doubtful accounts or other contingencies.
Statement 4: All debts due to any bank on which interest is past due and unpaid for such period
as may be determined by the Monetary Board, even if the same are well-secured and in the
process of collection shall be considered bad debts

Which statements above are false?

a) 1 and 2
b) 1,2, and 3
c) 4 only
d) 2 and 4

6. Section 35 of the General Banking Law of 2000 states that: Except as the MB may otherwise
prescribe, 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) 30%
b) 25%
c) 20%
d) 15%
 e) 10 %

7. The total amount of loans, credit accommodations and guarantees prescribed in the first
paragraph of Section 35 of R.A. 8791may be increased by an additional _____ of the net worth of
such bank provided the additional liabilities of any borrower are adequately secured.

a) 5%
b) 10%
c) 15%
d) in all instances, the limit can not be increased
e) none of the above

8. Which of the following is/are included in the computation of Single Borrower’s Limit?

Statement 1: the direct liability of the maker or acceptor of paper discounted with or sold to such bank
and the liability of a general indorser, drawer or guarantor who obtains a loan or other credit
accommodation from or discounts paper with or sells papers to such bank

Statement 2: in the case of a corporation, all liabilities to such bank of all subsidiaries in which such
corporation owns or controls a majority interest

Statement 3: in the case of a partnership, association or other entity, the liabilities of the members thereof
to such bank

a) Statement 1 only
b) Statement 2 only
c) Statements 1 and 2
d) Statements 2 and 3
e) All of the statements are included

9. Which of the following statements are true?

Statement 1: The limit prescribed in Section 35 of R.A. 8791 also applies to loans, credit accommodations
and guarantees extended by a cooperative bank to its cooperative shareholders.

Statement 2: Loans and other credit accommodations secured by obligations of the Bangko Sentral or of
the Philippine Government are included in the computation of Single Borrower’s Limit.

Statement 3: Other loans or credit accommodations which the Monetary Board may from time to time,
specify as non-risk items are excluded in the computation of Single Borrower’s Limit.

a) “Statements 1, 2 and 3” are true

b) Two (2) statements are true
c) Only “Statement 2” is true
d) Only “Statement 3” is true
 e) None of the above

10. Per Section 35 of the General Banking Law of 2000, which of the following is/are included in the
computation of Single Borrower’s Limit?

a) loans and other credit accommodations fully guaranteed by the government as to the
payment of principal and interest

b) loans and other credit accommodations covered by assignment of deposits maintained in

the lending bank and held in the Philippines

c) loans, credit accommodations and acceptances under letters of credit to the extent
covered by margin deposits

d) All of the above

e) None of the above

11. Which of the following is/are not considered as related interest?

I. Partnership of which a director, officer, or stockholder of a bank or his spouse or relative
within the first degree of consanguinity or affinity, or relative by legal adoption, is a secret
partner
II. Spouse or relative within the first degree of consanguinity or affinity, or relative by legal
adoption, of a director, officer or stockholder of the bank
III. Corporation, association or firm of which any or a group of directors, officers, stockholders of
the lending bank and/or their spouses or relatives within the first degree of consanguinity or
affinity, or relative by legal adoption, hold or own at most twenty percent (20%) of the
subscribed capital of such corporation, or of the equity of such association or firm;
IV. Corporation, association or firm in which the lending bank and/or its parent/subsidiary holds
or owns at most twenty percent (20%) of the subscribed capital of such corporation, or in the
equity of such association or firm, or has an existing management contract or any similar
arrangement with the lending bank or its parent/subsidiary.

a. Statement II
b. Statements II and IV
c. Statements I and III
d. Statements I, III, and IV
e. All are considered as related interest
f. All are not considered as related interest

12. In order to grant loans to DOSRI,

I. First, there must be an approval of all members of the board, written or oral.
II. Second, such approval must be reported to the BSP.
III. Lastly, the DOSRI borrowings must comply to the ceiling requirements unless said borrowings
constitute not greater than 20% of the bank’s total loans outstanding.
 a. All statements are true
b. Only statement III is false
c. Only statements I and III are true
d. Only statement I is false
e. Only statement II is true

13. The individual ceiling for DOSRI borrowings is

a. Total unencumbered deposits + BV of the additional paid-in capital contribution, provided
that unsecured loans is not greater than 20% of the total loans
b. Total unencumbered deposits + BV of the paid-in capital contribution, provided that
unsecured loans is not greater than 30% of the total loans
c. Total unencumbered deposits + BV of the additional paid-in capital contribution, provided
that unsecured loans is not greater than 30% of the total loans
d. Total unencumbered deposits + BV of the paid-in capital contribution, provided that
unsecured loans is not greater than 20% of the total loans

14. The aggregate ceiling for DOSRI borrowings is

a. 15% of the total loan portfolio or 100% net worth, whichever is higher
b. 20% of the total loan portfolio or 100% net worth, whichever is lower
c. 15% of the total loan portfolio or 100% net worth, whichever is lower
d. 20% of the total loan portfolio or 100% net worth, whichever is higher

15. Unencumbered deposits shall refer to savings, time and demand deposits, which are not subject
to an assignment or hold-out agreement or any other encumbrance.
II. Total loan portfolio shall refer to the sum of all loan accounts outstanding, gross of valuation
reserves, as reflected in the bank's consolidated statement of condition, excluding outstanding
loans financed by special/specific funds from the government financial institutions.
III. Net worth shall mean the total of the unimpaired paid-in capital including paid-in surplus,
retained earnings and undivided profit, net of valuation reserves and other adjustments as may
be required by the BSP.

a. All statements are true

b. Only statement III is false
c. Only statements I and III are true
d. Only statement I is false
e. Only statement II is true

16. The following are other services that may be rendered by a bank, except
a) Rent out safety deposit boxes.
b) Receive in custody, funds, documents and valuable objects
 c) Act as financial agent and buy and sell by order of and for the account of their
customers, shares, evidences of indebtedness and all types of securities
d) Make collections and payments for the account of others and perform such other
services for their customers as are not incompatible with banking business
e) Engage directly in insurance business as insurer or preneed business as the preneed
company

17. Which of the following statements is true?

I. A bank shall not directly engage in insurance business as the insurer
II. A director, officer, employee, or agent of any bank can enter into a contract between
the bank and a service provider for the latter to supply, or any act whereby the latter
supplies, the manpower to service the deposit transactions of the former.
a) I only
b) II only
c) Both statements are correct
d) Neither of the statements is correct

18. Which of the following statements is false relating to the Monetary Board’s determination of
whether the particular act or omission may be deemed as conducting business in an unsafe or
unsound manner?
a) The act or omission has resulted or may result in material loss or damage, or abnormal
risk or danger to the safety, stability, liquidity or solvency of the institution;
b) The act or omission has resulted or may result in material loss or damage or abnormal
risk to the institution's depositors, creditors, investors, stockholders or to the Bangko
Sentral or to the public in general;
c) The act or omission has caused any undue injury, or has given any unwarranted
benefits, advantage or preference to the bank or any party in the discharge by the
director or officer of his duties and responsibilities through manifest partiality, evident
bad faith or gross inexcusable negligence; or
d) The act or omission involves entering into any contract or transaction manifestly and
grossly disadvantageous to the bank, quasi-bank or trust entity, whether or not the
director or officer profited or will profit thereby.
e) None of the above.

19. Which of the following statements is/are true?

I. A bank, quasi-bank or trust entity incorporated under the laws of the Philippines may
publish the amount of its authorized or subscribed capital stock without indicating at
the same time and with equal prominence, the amount of its capital actually paid up.
II. The Bangko Sentral should not charge equitable rates, commissions or fees, as may be
prescribed by the Monetary Board for supervision, examination and other services
which it renders under the General Banking Act.
a. I only
 b. II only
c. Both statements are correct
d. Neither of the statements is correct

20. Which of the following statements is/are true?

a) Subject to guidelines issued pursuant to the Foreign Banks Liberalization Act, the
Monetary Board may authorize a foreign bank to acquire up to fifty percent (50%) of the
voting stock of only one (1) bank organized under the laws of the Republic of the
Philippines.
b) the Monetary Board shall adopt measures as may be necessary to ensure that at all
times the control of sixty percent (60%) of the resources or assets of the entire banking
system is held by banks which are at least majority-owned by Filipinos.
c) In the case of a foreign bank which has more than one (1) branch in the Philippines, all
such branches shall be treated as one (1) unit for the purpose of the General Banking
Act, and all references to the Philippine branches of foreign banks shall be held to refer
to such units.
d) The Monetary Board should not revoke the license to transact business in the
Philippines of any foreign bank, if it finds that the foreign bank is insolvent or in
imminent danger thereof or that its continuance in business will involve probable loss to
those transacting business with it.

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1. Which of the following is not a condition for the authorization of the organization of a bank or quasi-
bank?

A. Entity is a stock corporation

B. Funds are obtained from the public

C. Minimum capital requirements prescribed by the Monetary Board are satisfied

D. None of the above

2. S1: A bank can purchase or acquire shares of its own capital stock.

S2: Each foreign individual and non-bank corporation may own or control up to forty percent of the
voting stock of the domestic bank.

A. True, True

B. True, False

C. False, True

D. False, False
 3. Which of the following statements is not correct?

i.Stockholdings of family groups or related interests must be fully disclosed in some transactions by such
an individual with the bank.

ii.Three or more corporations owned or controlled by the same family group or same group of persons
shall be considered related interests under this Act.

iii.Banks shall issue par value stocks only.

A. i,ii,iii

B. i,ii

C. i

D. None of the above

4. Stockholdings of individuals related to each other within the ____ degree of consanguinity or affinity,
legitimate or common law, shall be considered family groups or related interests under this Act.

A. 3rd

B. 4th

C. 5th

D. 6th

5. S1: The Securities and Exchange Commission shall not register the articles of incorporation of any
bank, or any amendment thereto, unless accompanied by a certificate of authority issued by the
Monetary Board.

S2: Non-Filipino citizens are prohibited to become members of the board of directors of a bank.

A. True, True

B. True, False

C. False, True

D. False, False
6. In case of a bank merger or consolidation, the number of directors shall not exceed

A. 15

B. 18

C. 20

D. 21

7. S1: No appointive or elective public official, except part-time, shall at the same time serve as
officer of any private bank.

S2: A bank and its branches and offices shall be treated as one unit.

S3: All banks including their branches and offices shall transact business on all working days for at least
six hours a day.

S4: A foreign bank may own or control up to forty percent of the voting stock of the domestic bank.

S5: Branches of foreign banks within and outside the Philippines shall be treated as one unit for the
purpose of this Act.

A. Only one statement is correct

B. Two statements are correct

C. Three statements are correct

D. Four statements are correct

8. A commercial bank may have equity investments in the following, except:

A. Non-allied enterprises

B. Non-financial allied enterprises

C. Financial allied enterprises

D. None of the above

9. A universal bank may have equity investments in the following, except:

A. Non-allied enterprises

B. Non-financial allied enterprises

C. Financial enterprises
D. None of the above

10. A universal bank’s total or aggregate investments in allied and non-allied enterprises shall not
exceed:

A. 25% of the bank’s net worth

B. 35% of the bank’s net worth

C. 40% of the bank’s net worth

D. 50% of the bank’s net worth

11. A universal bank may invest in another commercial or universal bank that is publicly listed up to

A. 100% of the total equity of the investee bank

B. 100% of the voting stock of the investee bank

C. 100% of the investee bank’s net worth

D. 49% minority interest

12. A commercial bank’s single or individual investment in an allied enterprise shall not exceed:

A. 25% of the bank’s net worth

B. 35% of the bank’s net worth

C. 40% of the bank’s net worth

D. 50% of the bank’s net worth

13. A commercial bank may invest in other financial allied enterprises other than rural or thrift banks up
to

A. 100% equity of such enterprise

B. 35% of the total equity in that enterprise, nor shall it exceed 35% of the voting stock in that
enterprise

C. 49% of the equity minority interest of such enterprise

D. 100% of the voting stock in that enterprise

14. A universal bank may invest in non-allied enterprises up to

A. 100% equity of such enterprise

B. 35% of the total equity in that enterprise, nor shall it exceed 35% of the voting stock in that
enterprise

C. 49% of the equity minority interest of such enterprise

D. 100% of the voting stock in that enterprise

15. S1: The provisions of the General Banking Law should always be applicable to other banking laws, i.e.
The Thrift Banks Act, The Rural Banks Act, etc.

S2: Regulations of Islamic banks is governed by special laws.

A. True, False

B. False, True

C. True, True

D. False, False

16. What is needed for the registration of the by-laws and articles of incorporation of the trust entity?

A. BIR registration form

B. Certificate from SEC

C. Certificate of Authority approved by the Monetary Board

D. None of the Above

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

A. Act as trustee on any mortgage or bond issued by any municipality, corporation, or any body politic
and to accept and execute any trust consistent with law

B. Act as administrator of the estate of any deceased person, as left in the will, with the will annexed, or
as administrator of the estate of any deceased person

C. Act under the order or appointment of any court as guardian, receiver, trustee, or depositary of the
estate of any minor or other incompetent person, and as receiver and depositary of any moneys paid
into court by parties to any legal proceedings and of property of any kind which may be brought under
the jurisdiction of the court

D. Accept and execute any trust for the holding, management, and administration of any estate, real or
personal, and the rents, issues and profits

18. The General Banking Law took effect on

A. May 23, 2000

B. June 7, 2000

C. June 8, 2000

D. June 13, 2000

19. Which section of the Central Bank Act governs the conservatorship of banks?

A. Sec. 52

B. Sec 29 and the last two paragraphs of Sec 30

C. Sec 30

D. Sec 66 and the last paragraph of sec 68

20. S1: Any stock corporation or a person who registers with the Monetary Board can engage in trust
business and shall act as a trustee or administer any trust or hold property in trust or on deposit for the
use, benefit, or behoof of others

S2: Such corporation allowed is referred to as a trust entity.

A. Both statements are true

B. S1 is false, S2 is true

C. Both statements are not true

D. S1 is true, S2 is false

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QUESTIONS:

1. Republic Act 8791 is also known as ______________.

a. The General Banking Law of 2000
b. The General Banking Law of 2001
c. The Philippine Banking Law of 2000
d. The Philippine Banking Law of 2001

2. The following are classified under Thrift Banks except

a. Savings and Mortgage Banks
b. Stock Savings and Loan Associations
c. Public Development Banks
d. Private Development Banks

3. I.) For this purpose, the Monetary Board may prescribe ratios, ceilings, limitations, or other
forms of regulation on the different types of accounts and practices of banks and quasi-banks
which shall, to the extent feasible, conform to internationally accepted standards, including of
the Bank for International Settlements (BIS).

II.) The Monetary Board may exempt particular categories of transactions from such ratios,
ceilings, and limitations, but limited to exceptional cases or to enable a bank or quasi-bank
under rehabilitation or during a merger or consolidation to continue in business, with safety to
its creditors, depositors and the general public.

a. Statement I is true
b. Statement II is true
c. Both statements are true
d. Both statements are not true

4. Which is not a supervisory power of the Bangko Sentral?

a. The conduct of examination to determine compliance with laws and regulations if the
circumstances so warrant as determined by the Monetary Board.
b. Overseeing to ascertain that laws and regulations are complied with.
c. Inquiring into the solvency and liquidity of the institution.
d. Regular investigation which shall be oftener than once a year from the last date of examination
to determine whether an institution is conducting its business on a safe or sound basis: Provided,
That the deficiencies/irregularities found by or discovered by an audit shall be immediately
addressed.

5. The Monetary Board may authorize the organization of a bank or quasi-bank subject to the
following conditions except
a. That the entity is a stock corporation.
b. That its funds are obtained from the public, which shall mean twenty (20) or more persons.
c. That its funds are obtained from the public, which shall mean twenty (20) persons.
d. That the minimum capital requirements prescribed by the Monetary Board for each category of
banks are satisfied.
6. I. The Monetary Board shall not registerany amendmen to the by-laws of any bank unless
accompanied by a certifcate of authority to register.
II. No bank is allowed to acquire its own stock through purchase or through accepting it own
shares as security for a loan unless allowed by the Monetary Board.
A. S1 False S2 True
B. S1 True S2 True
C. S1 True S2 False
D. S1 False S2 False

7. Banks can issue:

A. Par value stocks only
B. no-par value stocks as long as they are issue for atleast P5 per share
C. Both A and B
D. None of the above

8. Stocks acquired by banks are required to be sold within:

A. six months from date of acquisition
B. 12 months from date of aquisition
C. Banks are not allowed to acquire stocks under any case.
D. six months from original issuance of stocks

9. There must be __ member(s) from the board of directors who is an independent director.
A. Two
B. Atleast two
C. Atleast one
D. One

10. The rule that gives the Monetary Board the power to prescribe, pass upon and review the
qualifications and disqualifications of individuals elected bank directors orofficers and disqualify
those found unfit is called the:
A. Fit and Proper Rule
B. The Monetary Board has no such power but SEC does.
C. Integrity Check rule
D. Qualifications Check rule

11. How many directors are needed in case of a bank merger or consolidation?
A. More than 21
B. 21 or more
C. 21 or less
D. None of the above
12. The Monetary Board (MB) may regulate the payment by the bank to its directors and officers
under the following scenarios, except:
A. When a bank is under comptrollership or conservatorship
B. When a bank is found by the Monetary Board to be in an unsatisfactory financial
condition.
C. When a bank is found by the Monetary Board to be conducting business in an unsafe
or unsound manner
D. When a bank has the power to invest in a non-allied enterprise

13. Which of the following is true?

A. Unsettled after seven (7) calendar days shall be reported by the Secretary of Labor to
the Bangko Sentral.
B.No appointive or elective public official, whether full-time or part-time shall at the same time
serve as officer of any bank.
C. The equity investment in any one enterprise, whether allied or non-allied, shall not exceed
twenty-five percent (25%) of the net worth of the bank.
D. A publicly-listed universal or commercial bank may own up to one hundred percent (100%) of
the voting stock of two other universal or commercial bank.

14. Statement 1: Universal or commercial banks may open branches or other offices within or outside
the Philippines upon prior approval of the Bangko Sentral.
Statement 2: A bank and its branches and offices shall be treated separately.

A. Statement 1 is false; Statement 2 is true.

B. Statement 1 is true ; Statement 2 is false.
C. Both statements are true.
D. Both statements are false.

15. Banks may open for business on Saturdays, Sundays or holidays for at least:
A. Three (3) hours a day
B. Six (6) hours a day
C. Seven (7) hours a day
D. Eight (8) hours a day

16. A universal bank may own up to ____ of the equity in a non-financial allied enterprise
A. 25%
B. 35%
C. 50%
D. 100%
17. The equity investment of a universal bank, or of its wholly or majority-owned subsidiaries, in a
single non-allied enterprise shall not exceed ____ of the total equity in that enterprise nor shall
it exceed ___ of the voting stock in that enterprise
A. 25% , 25%
B. 25% , 35%
C. 35% , 25%
D. 35% , 35%

18. A commercial bank shall have, in addition to the general powers incident to corporations, all
such powers as may be necessary to carry on the business of commercial banking, such as:

I. Accepting drafts and issuing letters of credit

II. Discounting and negotiating promissory notes, drafts, bills of exchange, and other
evidences of debt
III. Accepting or creating demand deposits
IV. Receiving other types of deposits and deposit substitutes
V. Buying and selling foreign exchange and gold or silver bullion
VI. Acquiring marketable bonds and other debt securities
VII. Extending credit, subject to such rules as the Monetary Board may promulgate

a. Only 4 items are correct

b. Only 2 items are wrong
c. Only 6 items are correct
d. No item is wrong

19. A commercial bank may invest only in the equities of allied enterprises provided that (except as
the Monetary Board may otherwise prescribe):
I. The total investment in equities of allied enterprises shall not exceed 25% of the net
worth of the bank, and
II. The equity investment in any one enterprise shall not exceed 35% of the net worth
of the bank

a. Only statement I is correct

b. Only statement I is wrong
c. Both statements are correct
d. Both statements are wrong

20. In case a bank does not comply with the prescribed minimum ratio, the Monetary Board may
I. Limit or prohibit the distribution of net profits by such bank and may require
that part or all of the net profits be used to increase the capital accounts of the
bank until the minimum requirement has been met.
 II. Restrict or prohibit the acquisition of major assets and the making of new
investments by the bank including purchases of readily marketable evidences of
indebtedness of the Republic of the Philippines and Bangko Sentral.

a. Only statement I is correct

b. Only statement I is wrong
c. Both statements are correct
d. Both statements are wrong

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1. All of the following are duties of a conservator, except

a) take charge of assets only
b) reorganize the management
c) collect monies and debts
d) exercise powers necessary to restore viability

Answer: A, take charge of assets and liabilities (Sec. 67 of GBA; Sec 29 of NCA)

2. Involving controversies in banks, quasi-banks or trust entities, other government agencies shall
consult
a) Securities and Exchange Commission
b) Bangko Sentral ng Pilipinas
c) Bureau of Internal Revenue
d) Department of Justice

Answer: B, Sec. 63 of General Banking Act

3. The Monetary Board may revoke the license to transact business in the Philippines of any
foreign bank for the following reasons except:
a) the foreign bank is insolvent
b) the foreign bank is in imminent danger
c) continuance in business will be probable
d) continuance in business will involve probable loss to those transacting business with it

Answer: C, Sec. 78 of GBA

4. Who shall fully guarantee the prompt payment of all liabilities of its Philippine branch to protect
interests of depositors and creditors?
a) Bangko Sentral ng Pilipinas
b) Philippine branch itself
c) Securities and Exchange Commission
d) head office of Philippine branch

Answer: D, Head Office Guarantee, Sec. 75 of GBA

5. If foreign bank has more than 1 branch in the Philippines, all branches shall be treated as 1 unit.
 a) True
b) False

Answer: A, One Unit Rule, Sec. 74 of GBA

6. During a voluntary liquidation, the Monetary Board has no right to intervene and take steps
necessary to protect interests of investor and creditors.
a) True
b) False

Answer: B, Sec. 68 of GBA

7. The Bangko Sentral is not allowed to charge equitable rates, commissions for supervision,
examination, and other services it renders
a) True
b) False

Answer: B, Sec. 65 of GBA

8. Any activity resulting from a trustor-trustee relationship involving the appointment of a trustee
by a trustor for the administration, holding, management of funds for the use or benefit or
advantage of the trustor of of others called beneficiaries
a. Partnership business
b. Trust Business
c. Business Corporation
d. Trusteeship Business

Ans: B. Trust Business

9. A non-stock corporation can act as a trustee or administer any trust or hold property in trust or
on deposit for the use, benefit, or behoof of others as long as it is duly authorized by the
Monetary Board.
a. True
b. False

Ans: B. False. Only a stock corporation or a person duly authorized by the Monetary Board to engage in
trust business shall act as a trustee or administer any trust or hold property in trust or on deposit for the
use, benefit, or behoof of others (Sec. 79)

10. The Minimum paid-in capital for Trust Corporations shall be atleast
a. P100 million
b. P300 million
c. P500 million
d. No limit, as long as the corporation has complied with the proper documents.

Ans: B. P300 million

11. Powers of a Trust Entity include/s

 a. Power to act as administrator of the estate of any deceased person, with the will annexed, or as
administrator of the estate of any deceased person when there is no will
b. Power to act as the executor of any will when it is named the executor thereof
c. Power to establish and manage common trust funds, subject to such rules and regulations as
may be prescribed by the Monetary Board
d. All of the above

Ans: D. All the above

12. The amount of deposit, in cash or securities approved by the Monetary Board, with the BSP as a
security for the faithful performance of Trust entities’ duties should be equal to an amount
a. Not less than P100,000
b. Not less than P300,000
c. Not less than P500,000
d. Any amount will do

Ans: C. Not less than P500,000 or such higher amount as may be fixed by the Monetary Board.

13. The ceiling on investments in certain assets is

A. 50% of the combined capital accounts
B. 30% of the combined capital accounts
C. 35% of the combined capital accounts
D. 25% of the combined capital accounts

Ans: A. 50% of the combined capital accounts

14. Any real property acquired or held by way of satisfaction of claims shall be disposed of by the
bank within a period of
A. 3 years
B. 10 years
C. 4 years
D. 5 years

Ans: D. 5 years

15. The bank shall perform the other banking services permitted under Subsections 53.1, 53.2, 53.3
and 53.4 of The General Banking Law as a
A. Insurer
B. Agent
C. Principal
D. Middle man

Ans: B. Agent

16. The bank is prohibited to act as a

A. Insurer
 B. Agent
C. Principal
D. Middle man

Ans: A. Insurer

17. The Publication of Financial Statements shall be made

A. At least once every quarter
B. At least once every year
C. At least once semiannually
D. At least once every month

Ans: A. At least once every quarter

18. The Monetary Board may allow banks, quasi-banks, and trust entities to defer the publication of
financial statements in periods of national or local emergency if at least __ of its members will
vote
A. 5
B. 3
C. 4
D. All

Ans: A. 5

19. The making of false reports or misrepresentation or suppression of material facts by personnel
of the Bangko Sentral ng Pilipinas shall constitute fraud and shall be subject to
A. administrative sanctions provided under the New Central Bank Act
B. criminal sanctions provided under the General Banking Law of 2000
C. administrative and criminal sanctions provided under the New Central Bank Act
D. administrative and criminal sanctions provided under the General Banking Law of 2000

Ans: C. administrative and criminal sanctions provided under the New Central Bank Act

20. The terms of engagement by an Independent Auditor chosen from a list of certified public
accountants acceptable to the Monetary Board shall be
A. For at least 1 year
B. 3 years
C. Agreed upon by the bank and the independent auditor
D. Prescribed by the Monetary board

Ans: D. Prescribed by the Monetary board

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1. What Republic Act provides for the regulation of the organization and operations of banks, quasi-
banks, trust entities and for other purposes.

a. Republic Act No. 8791 “The General Banking Law of 2000”

 b. Republic Act No. 8791 “The General Banking Law of 2009”
c. Republic Act No. 8761 “The General Banking Law of 2000”
d. Republic Act No. 7891 “The General Banking Law of 2000”

2. The operations and activities of banks shall be subject to supervision of the ______.
a. Land Bank of the Philippines
b. Board of Accountancy
c. Bangko Sentral ng Pilipinas
d. Boy Scouts of the Philippines

3. Foreign individuals and non-bank corporations may own or control up to ______ of the voting
stock of a domestic bank. This rule shall apply to Filipinos and domestic non-bank corporations.
a. 40%
b. 30%
c. 50%
d. 51%

4. _________ shall refer to entities engaged in the lending of funds obtained in the form of deposits.

a. Landbank of the Philippines

b. Banks
c. Non-profit corporations
d. Commercial Banks

5. True or False.
Non-Filipino citizens may become members of the board of directors of a bank to the extent of
the foreign participation in the equity of said bank.

The Securities and Exchange Commission shall register the by-laws of any bank, or any
amendment thereto, unless accompanied by a certificate of authority from the Bangko Sentral.

a. True; True
b. False; False
c. False; True
d. True; False

6. In the case of a bank merger or consolidation, the number of directors shall not exceed _______.
a. 20
b. 21
c. 15
d. 25
7. All banks including their branches and offices shall transact business on all working days for at
least ____ hours a day.
a. 8
b. 5
c. 10
d. 6

8. True or False.
Universal or commercial banks may open branches or other offices within or outside the
Philippines upon prior approval of the Bangko Sentral ng Pilipinas.

In determining whether an individual is fit and proper to hold the position of a director or officer
of a bank, regard shall be given to his integrity, experience, education, training, and
competence.

a. True; True
b. False; False
c. False; True
d. True; False

9. Stockholding of individuals related to each other within the _____ degree of consanguinity of
affinity, legitimate or common-law, shall be considered family groups or related interests and
must be fully disclosed in all transactions by such an individual with the bank.
a. fifth
b. second
c. fourth
d. third

10. Sec. 21 of this RA states that working days shall mean Mondays to _______, except if such days
are holidays.

a. Fridays
b. Saturdays
c. Thursdays
d. Sundays

11. The total investment in allied and non-allied enterprises shall not exceed __________ of the
net worth of the bank.
a. 25% b. 60% c. 50% d. 35%

12. The following are the powers possessed by a commercial bank except:
a. accepting drafts and issuing letters of credit;
b. discounting and negotiating promissory notes, drafts, bills of exchange, and other
evidences of debt;
 c. accepting or creating demand deposits
d. promote, sponsor, or otherwise assist and implement ventures, projects and programs
that contribute to the economy’s development
13. It is the total of the unimpaired paid-up capital including paid-in surplus, retained earnings, and
undivided profit, net of valuation reserves and other adjustments as may be required by the BSP
a. net worth b. equity c. working capital d. net loss

14. To promote competitive conditions in financial markets, the Monetary Board may further limit
to _________ equity investments of universal banks in quasi-banks.
a. 40% b. 35% c. 50% d. 30%

15. Dealings of a bank with any of its directors, officers or stockholders and their related interests
shall be upon 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. as favorable to the bank with those offered to others
d. not less favorable to others than those offered to the bank

16. A type of financial institution that accepts deposits, offers checking and savings account
services, and makes loans
a. thrift bank b. rural bank c. investment house d. commercial bank

17. Loans, other credit accommodations and guarantees shall include:

a. fully guaranteed by the government as to the payment of principal and interest;
b. covered by assignment of deposits maintained in the lending bank and held in the
Philippines;
c. loans, credit accommodations and acceptances under letters of credit to the extent
covered by margin deposits
d. none of the above

18. A bank other than a universal or commercial bank cannot accept or create demand deposits
except upon prior approval of, and subject to such conditions and rules as may be prescribed by
the
a. Department of Finance
b. Board of Directors
c. Monetary Board
d. Board of Accountancy

19. The investment in equities of allied enterprises of a commercial bank in any one enterprise shall
not exceed _________ of the net worth of the bank.
a. 35% b. 40% c. 25% d. 30%

20. Statement I: A bank shall grant loans and other credit accommodations only in amounts and for
the periods of time essential for the effective completion of the operations to be financed.
Statement II: The Monetary Board may Issue regulations as it may deem necessary with respect
to unsecured loans or other credit accommodations that may be granted by banks.
Statement III: A borrower 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 between the bank and its borrower.
a. Only Statement I is true
b. Only Statements I and II are true
c. Only Statements II and III are true
d. All Statements are true