BBA 8th Semester
Banking Law and Regulation Board Question Paper 2021

The minimum loan loss provision of loan classification of watch list is 8%.

Bank only can provide the 50 % of collateral value as loan.

Nonperforming assets will generate the income for the banks.

Good collateral increases the risk to the banks.

Low and medium risk customers KYC forms are updated semiannually whereas the high risk customers are updated annually.

Demand deposits represent the largest deposit source of fund for commercial banks.

Collection of money for the customers is the core services of bank.

Maintaining a diversified loan portfolio helps a bank reduce systematic credit risk.

Loans may be granted only for short period by bank.

Nepal Rastra Bank (NRB) elect the board of director on behalf of bank.

What do you mean by credit? Explain the process of granting credit.

What is letter of credit and also explain its major components?

Describe the roles and responsibilities of board of director of the bank.

What do you mean by security in loan agreement? What are the key features of security?

What are the legal challenges in banking business? Explain banking fraud, cyber-crime.

Explain the procedure of account opening and account closing.

Read the following case carefully and answer the questions:
Paila is a well known shoe manufacturing company located in Kathmandu. Currently 400 employees are engaged in this company. It imports raw material from Pakistan. It has 10 foreign technicians from different countries. These technicians take salaries in their home currencies: dollar, yen, and pound and Indian rupees. It has imported modern machine form New Zealand which is used in making shoes. Its long-term capital is Rs 1,000 million which comprises Rs 400 million of equity and Rs 600 million of loans from bank. All employees receive their salary from bank. Most of the products are exported. Its major markets are Japan, India and America. However, about 20 percent of the shoes produced by the company are sold in major cities in the country. Company has central billing system, that is, it has no regional offices to collect the cash from customers.
a. What types of payment problems and financing problems would this company have to bear if there were no banking system?
b. Do you think that company would have to face problem in export and import if there were no banking system? How does a bank help to manage this problem?
c. Why banking system is needed for the development of economy? Explain.
d. Explain the importance of banking law and regulations.