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Cfm 304: Banking Law And Practice (Saturday) Question Paper

Cfm 304: Banking Law And Practice (Saturday)

Course:Bachelor Of Commerce

Institution: Kca University question papers

Exam Year:2009

1
UNIVERSITY EXAMINATIONS: 2008/2009
FIRST YEAR STAGE 1 EXAMINATION FOR THE DEGREE OF
BACHELOR OF COMMERCE
CFM 304: BANKING LAW AND PRACTICE (Saturday)
DATE: APRIL 2009 TIME: 2 HOURS
INSTRUCTIONS: Answer question ONE and any other TWO questions
QUESTION ONE
a) Explain the Principles of lending (7 marks)
b) What are the essential characteristics of a negotiable instrument? (8 marks)
c) Elucidate principles which underline the acceptance of a bill of exchange (5 marks)
d) Explain the role of the bank in a developing economy (5marks
e) Explain the important considerations a banker should keep in mind while opening and operating
a joint account for a group of friends (5 marks)
QUESTION TWO
a) Explain measures put in place for regulation of the operation of commercial banks by the Central
bank of Kenya (10 marks)
b) Explain how banker-customer relationship is terminated? (10 marks)
QUESTION THREE
With help of decided cases, discuss what is meant by ‘Banking Business’ (15 marks)
Explain the meaning of ‘bank’ (5 marks)
2
QUESTION FOUR
Write short explanatory notes on:
a) The various ways by which banks finance commercial dealings, with special reference to foreign
trade? (8 marks)
b) Discharge bill of exchange (8 marks).
c) Noting and protesting of bills (4 marks)
QUESTION FIVE
Advice on the legal position, explaining the exceptions if any:
a) Janice was arranging for a loan from a money lender. The proceeds of the loan would have been
used to sort out a debt which was owed by Janice to her bank. The bank somehow passed
information to the money lender on Janice’s financial liability to it which led the money lender
not to give the loan. Janice wants to sue the banker. (10 marks)
b) Mercy’s Bank mistakenly credited her account with the same remittance twice. The sum of
money involved was quite substantial and mercy wants to draw a cheque to Minnie who she
owes so much money. (5 marks)
c) Julie drew a number of forged cheques on her husband , Jeddy’s account. The Jeddy discovered
the fraud by Julie who then successfully pleaded with Jeddy not to report the matter to the bank.
Despite assurances that she would no longer forge cheques against Jeddy’s account, Julie
continued to do so and when Jeddy discovered he reported all the forgeries to his bank. The bank
refused to act. (5 marks)

Cfm 304: Banking Law And Practice (Saturday) Question Paper

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