Banking Laws (MCQ) Flashcards
XYZ Corporation obtained a loan from ABC Bank secured by a real estate mortgage on its land. XYZ Corporation defaulted payment , and so the mortgage was foreclosed and the land was sold at public auction. The redemption period of XYZ Corporation is:
a. Within three (3) months from the date of the auction sale.
b. Within one (1) year from the date of the auction sale.
c. Until the registration of the certificate of foreclosure sale with the Register of Deeds, but in no case exceeding three (3) months.
d. Until the registration of the certificate
b. Within one (1) year from the date of the auction sale.
BCD Banking Corporation was able to acquire a house and lot that was mortgaged to it in good faith by way of security for a loan. As a general rule, the bank is required by law to dispose the real property within period of:
a. Six(6) months
b. One(1) year
c. Five (5) years
d. Ten (10) years
c. Five (5) years
Under R.A. No 1405, otherwise known as the Bank Secrecy Law, which of the following acts of a bank official is covered by the Bank Secrecy Law?
a. Disclosing the amount of deposit of a judgment debtor to the court sheriff who is executing a garnishment order against him.
b. Disclosing the name of the drawer of a check to the payee.
c. Disclosing the amount of deposit of a taxpayer to a duty authorized BIR officer who is examining his income tax liability.
d. Disclosing the amount of deposit exceeding P500,000 in one (1) banking day to the Anti-Money Laundering Council.
c. Disclosing the amount of deposit of a taxpayer to a duty authorized BIR officer who is examining his income tax liability.
X, a government employee, purchased Land Bank bonds with a total value of P1,000,000 and receives bi-annual interest income from his investment. Under the Bank Secrecy Law , X’s investment may be inquired into without need of a court order by the:
a. Public Prosecutor handling an estafa case against X.
b. BIR officer auditing the value-added taxes of X.
c. Credit investigator of a lending institution where X applied for a loan.
d. None of the foregoing.
d. None of the foregoing.
X maintained the following deposit at CDP Bank:
P600,000 – saving deposit in the name of “X and /Y”
200,000 – time deposit in the name of “XYZ Partnership”
300,000 – current account in the name of “X”
ABC Bank was liquidated by the Bangko Sentral ng Pilipinas due to financial reverses.
How much can X personally recover from the Philippine Deposit Insurance Corporation (PDIC)?
a. P900,000
b. 600,000
c. 500,000
d. 300,000
c. 500,000
R.A. Act No. 3765, otherwise known as the Truth in Lending Act, applies to:
a. Pawnshops
b. Small-loan money lenders
c. Both (a) and (b)
d. Neither (a)nor (b)
c. Both (a) and (b)
Under R.A. No. 6426, otherwise known as the Foreign Currency Deposit Act, which of the following statements relative foreign currency deposits is false?
a. The foreign currency deposits maintained abroad by Filipino citizens are not covered by the provisions of the Act.
b. Depositary banks which have been qualified by the Monetary Board to function under the expanded foreign currency deposit system are exempt in maintaining the fifteen percent (15%) foreign currency for their liabilities in the form of foreign currency deposit with the Bangko Sentral.
c. Foreign currency deposits are of absolutely confidential nature, except upon the written permission of the depositor.
d. Foreign currency deposits are subject to attachment, garnishment or any other order or process of the court.
d. Foreign currency deposits are subject to attachment, garnishment or any other order or process of the court.
What is the primary purpose of the Anti-Money Laundering Act of 2001 (Republic Act
No. 9160)?
(a) To regulate the banking industry
(b) To prevent money laundering activities
(c) To increase government revenue
(d) To promote economic growth
(b) To prevent money laundering activities
Which of the following is NOT considered a covered transaction under the Anti-
Money Laundering Act?
(a) Transactions between a bank and a properly identified client
(b) Transactions exceeding Php 4,000,000
(c) Unusually large and complex transactions
(d) Transactions with an underlying trade obligation
(d) Transactions with an underlying trade obligation
Which entity is responsible for supervising insurance companies in the Philippines?
(a) The Central Bank
(b) The Department of Finance
(c) The Insurance Commission
(d) The Securities and Exchange Commission
(c) The Insurance Commission
What type of entity is considered a ‘covered institution’ under the Anti-Money
Laundering Act?
(a) Only banks
(b) Banks, insurance companies, and securities dealers
(c) Only government offices
(d) Only foreign exchange corporations
(b) Banks, insurance companies, and securities dealers
What is the minimum capital requirement for establishing a joint stock insurance
company performing life insurance business under the Insurance Law?
(a) PHP 500,000
(b) PHP 1,000,000
(c) PHP 2,000,000
(d) PHP 10,000,000
(b) PHP 1,000,000
In the context of the Anti-Money Laundering Act, what is the definition of ‘unlawful
activity’?
(a) Any activity involving illegal gambling
(b) Any activity involving fraud or deception
(c) Any act that involves illegal activities such as corruption, kidnapping, and smuggling
(d) Any activity that generates income without proper documentation
(c) Any act that involves illegal activities such as corruption, kidnapping, and smuggling
What is the required minimum equity capital for a mutual insurance company under
the Insurance Law?
(a) PHP 100,000
(b) PHP 250,000
(c) PHP 500,000
(d) It varies depending on the class of business
(d) It varies depending on the class of business
Under the Bank Secrecy Act, which of the following is a condition for the release of
information on bank deposits?
(a) The depositor’s written permission
(b) Approval from a government agency
(c) A warrant issued by a judge
(d) The depositor’s verbal consent
(a) The depositor’s written permission
Under the Anti-Money Laundering Act, which government entity is tasked with investigating and prosecuting money laundering offenses?
(a) The Securities and Exchange Commission
(b) The Anti-Money Laundering Council
(c) The National Bureau of Investigation
(d) The Department of Justice
(b) The Anti-Money Laundering Council
Which of the following is an example of an unlawful activity under the Anti-Money
Laundering Act?
(a) Tax evasion
(b) Money laundering through illegal gambling
(c) Bank fraud
(d) All of the above
(d) All of the above
What is the legal definition of ‘reinsurance business’ under the Insurance Law?
(a) Insuring the same risks as another company
(b) Transferring risk to another insurer
(c) Selling insurance policies to third parties
(d) Adjusting claims for insurance companies
(b) Transferring risk to another insurer
What is required for a mutual insurance company with limited contributions to settle
uncovered damage?
(a) Requesting additional contributions equal to members’ original contributions
(b) Using reserves from the government
(c) Reinsuring the risk
(d) Imposing higher premiums on members
(a) Requesting additional contributions equal to members’ original contributions
What is the definition of ‘covered transaction’ under the Anti-Money Laundering Act?
(a) A transaction involving amounts over Php 4,000,000
(b) A transaction that is public
(c) A transaction between two government entities
(d) A transaction between two parties without documentation
(a) A transaction involving amounts over Php 4,000,000
Under the Insurance Law, which of the following is classified as a life insurance
business?
(a) Crop insurance
(b) Health insurance
(c) Old-age pension insurance
(d) General liability insurance
(c) Old-age pension insurance
The stage in the money laundering process where funds are being constantly moved or recharacterized to conceal their origins. This stage is known as:
a. Placement
b. Layering
c. Integration
d. None of the foregoing
b. Layering
At which of the three stages of money laundering is it generally easiest to detect money laundering activity?
a. Placement
b. Layering
c. Integration
d. None of the foregoing
a. Placement
An accountant goes to a casino in Manila with illegal money and converts it into chips. He
later emerges with a large amount of winnings. This placement technique is known as:
a. Assets conversion
b. Insurance purchase
c. Alternative remittance
d. Gambling
d. Gambling