CIBN Banking Law
Past Questions
32+ verified Banking Law past questions for CIBN. Step-by-step worked answers in 5 Nigerian languages.
Banking Law topics (2)
Sample Banking Law past questions
1. BVN expands to:
- A. Bank Verification Number
- B. Bank Validation Network
- C. Branch Verified Note
- D. Bank Voucher Number
Answer: A
AI Explanation
**The reasoning** BVN stands for **Bank Verification Number**. This is a unique 11-digit identifier assigned to every bank customer in Nigeria by the Central Bank of Nigeria (CBN). It was introduced in 2014 to reduce banking fraud, standardize customer identification across all banks, and strengthen Know Your Customer (KYC) regulations. Your BVN stays with you for life, even if you switch banks — it's tied to your biometric data (fingerprints, photo, etc.), not to any specific account. **Why the wrong options tempt you** - **B) Bank Validation Network** sounds technical and official, mixing "validation" (which relates to verification) with "network" (suggesting connectivity between banks). But it's just close enough to mislead. - **C) Branch Verified Note** and **D) Bank Voucher Number** use familiar banking words but have no real connection to the BVN system. They're distractors playing on surface-level recognition. **Quick takeaway** BVN = **Bank Verification Number** — your permanent banking identity card in Nigeria's financial system, linking YOU (not just your account) across all banks.
2. A cheque is a kind of:
- A. Promissory note
- B. Negotiable instrument
- C. Bond
- D. Share
Answer: B
3. Crossed cheques can be paid only:
- A. In cash
- B. Into a bank account
- C. By messenger
- D. Anywhere
Answer: B
AI Explanation
**The reasoning** A crossed cheque has two parallel lines drawn across its top left corner (sometimes with "& Co." or "A/C Payee Only" written between them). This crossing is a **security instruction** that restricts how the cheque can be cashed. When a cheque is crossed, the bank **must** deposit the money into the payee's bank account — it cannot pay out cash over the counter. This creates a traceable record of who received the money, reducing fraud and theft. Think of it as forcing the payment through the banking system for accountability. **Why the wrong options tempt you** - **A) In cash** — This is exactly what crossing *prevents*. An uncrossed (open) cheque can be cashed, but not a crossed one. - **C) By messenger** — A messenger can *deliver* the cheque, but that doesn't determine *how* it's paid. Still goes into an account. - **D) Anywhere** — Sounds flexible, but crossing actually *restricts* where payment happens — only through bank accounts. **Quick takeaway** Crossed cheque = forced bank deposit = paper trail for security. The lines literally block cash payments!
4. The relationship between banker and customer is essentially:
- A. Principal-agent only
- B. Debtor-creditor
- C. Trustee only
- D. Partnership
Answer: B
5. KYC stands for:
- A. Know Your Customer
- B. Keep Your Cash
- C. Key Yearly Check
- D. Known Yield Curve
Answer: A
6. A holder in due course of a cheque takes it:
- A. With all defects
- B. Free of prior defects
- C. Void
- D. Unpaid
Answer: B
7. Money laundering involves disguising the origin of:
- A. Legal funds
- B. Illegally obtained money
- C. Salaries
- D. Loans
Answer: B
8. A banker must honour a customer's cheque if funds are:
- A. Insufficient
- B. Sufficient
- C. Frozen
- D. Closed
Answer: B
9. Garnishee order affects a customer's:
- A. Health
- B. Account funds
- C. Salary slip
- D. Passport
Answer: B
10. The principal legislation regulating banks in Nigeria today is:
- A. BOFIA 1969
- B. BOFIA 1991
- C. BOFIA 2007
- D. BOFIA 2020
Answer: D
AI Explanation
BOFIA 2020 replaced BOFIA 1991 (as amended), expanding CBN's supervisory and resolution powers.
11. Bank–customer confidentiality has its origin in the English case:
- A. Foley v Hill
- B. Tournier v National Provincial Bank
- C. Donoghue v Stevenson
- D. Salomon v Salomon
Answer: B
AI Explanation
Tournier v National Provincial & Union Bank (1924) lays down the banker's duty of secrecy and its four exceptions.
12. Which is an EXCEPTION to banker–customer confidentiality?
- A. Customer's embarrassment
- B. Court order compelling disclosure
- C. Bank's own marketing
- D. Staff curiosity
Answer: B
AI Explanation
Tournier exceptions: compulsion of law (e.g. court order), duty to the public, bank's interest, customer's consent.
13. KYC requirements in Nigerian banking principally aim to combat:
- A. Tax planning
- B. Money laundering and terrorist financing
- C. Currency volatility
- D. Insider trading
Answer: B
AI Explanation
KYC under MLPPA 2022 and CBN AML/CFT regulations requires identity verification to combat ML/TF.
14. Money Laundering (Prevention and Prohibition) Act 2022 sets the cash-transaction limit for individuals at:
- A. ₦100,000
- B. ₦500,000
- C. ₦5,000,000
- D. Unlimited
Answer: C
AI Explanation
MLPPA 2022: ₦5,000,000 for individuals and ₦10,000,000 for corporates; amounts above must go through financial institutions.
15. 'Insider abuse' in banking means:
- A. External hacking
- B. Improper use of position by directors/staff for personal gain
- C. Customer fraud
- D. Audit findings
Answer: B
AI Explanation
Insider abuse — self-lending, fund diversion etc. — is heavily penalised under BOFIA 2020.
16. A whistleblower policy is intended to:
- A. Identify slow tellers
- B. Encourage internal reporting of wrongdoing and protect the reporter
- C. Reward customer complaints
- D. Monitor competitors
Answer: B
AI Explanation
Whistleblower policies create a safe channel for staff to report fraud/misconduct and protect them from retaliation.
17. The professional body of bankers in Nigeria is:
- A. CBN
- B. NDIC
- C. CIBN
- D. NSE
Answer: C
AI Explanation
Chartered Institute of Bankers of Nigeria (CIBN), under CIBN Act 2007 (originally Act 12 of 1990).
18. 'Tipping off' in AML compliance is:
- A. Leaving a service tip
- B. Alerting a subject that an STR has been or will be filed
- C. Stock tipping
- D. Sharing market intelligence
Answer: B
AI Explanation
Tipping off is a criminal offence under Nigerian AML law — warns the subject and frustrates law-enforcement.
19. A Politically Exposed Person (PEP) is:
- A. Any famous person
- B. A person entrusted with a prominent public function
- C. Any influencer
- D. Any celebrity
Answer: B
AI Explanation
PEPs (heads of state, ministers, senior judges etc.) require enhanced due diligence given higher corruption risk.
20. Which is a core ethical principle for bankers?
- A. Maximum profit at any cost
- B. Integrity and trust
- C. Customer pressure tactics
- D. Aggressive cross-selling
Answer: B
AI Explanation
Integrity, trust, professionalism, confidentiality and fairness are CIBN core ethical principles.
21. Under BOFIA 2020, the licensing authority for Nigerian banks is:
- A. NDIC
- B. CBN
- C. Ministry of Finance
- D. FIRS
Answer: B
AI Explanation
CBN issues, varies and revokes bank licences under BOFIA 2020.
22. Which of these constitutes an offence under BOFIA?
- A. Disclosure to a court
- B. Carrying on banking business without a CBN licence
- C. Filing returns to CBN
- D. Paying dividends
Answer: B
AI Explanation
Carrying on banking business without a CBN licence is a criminal offence under BOFIA, with severe penalties.
23. The Cybercrimes Act 2015 in Nigeria primarily addresses:
- A. Tax fraud
- B. Computer-related fraud and offences in cyberspace
- C. Maritime piracy
- D. Land disputes
Answer: B
AI Explanation
Cybercrimes (Prohibition, Prevention etc.) Act 2015 criminalises hacking, phishing, identity theft and computer-related fraud.
24. Which document creates the contract between a customer and a bank?
- A. Account opening mandate
- B. BVN slip
- C. Cheque book
- D. ATM card
Answer: A
AI Explanation
The signed account-opening mandate (plus the bank's general terms) forms the contract between customer and bank.
25. Suspicious Transaction Reports (STRs) in Nigeria are submitted to:
- A. CBN
- B. NFIU (Nigerian Financial Intelligence Unit)
- C. Police
- D. SEC
Answer: B
AI Explanation
NFIU is the central national agency for receiving and analysing STRs and CTRs under the MLPPA framework.
Start practicing Banking Law
Get AI breakdowns on every answer. Free to start.
Practice now →