MCQs on Islamic Banking Products - 1

1. The term Riba literally means

a. Any speculation 
b. Any excess
c. Any profit 
d. Any wealth

Answer (b)

2. The term Hawalah refers to a contract of

a. Profit loss sharing 
b. Repayment of loans
c. Assignment of debt 
d. Profit sharing

Answer (c)

3. Deposits placed with banks practically take the form of

a. Donations from depositors to the bank 
b. A sale contracts with the bank
c. Authority to the bank to lent monies 
d. Loans from depositors to the bank

Answer (d)

4. The Islamic financial system is founded on

a. Cancellation, revocation of debt
b. Absolute prohibition of the payment or receipt of any predetermined, guaranteed rate
of return
c. Imposition of an obligatory tax on earnings
d. Land and property tax levied by the state

Answer (b)

5. Ijarah literally means

a. Price of goods 
b. Type of transaction
c. Risk or loss or fraud 
d. To give something on rent

Answer (d)

6. The termWaqf refers to

a. Bill of exchange 
b. What is due to the state treasury
c. Promissory note 
d. Charitable foundation or trust

Answer (d)

7. The Arabic term Kafil means

a. A person taking possession of goods 
b. A person taking delivery of goods
c. A person providing surety 
d. A person withholding delivery of goods

Answer (c)

8.What does the abbreviation IFI stand for in Islamic banking?

a. Islamic Forum for Intermediation 
b. Islamic Finance Industry
c. Islamic Financial Instrument 
d. Islamic Financial Institution

Answer (d)

9. Islamic corporate governance promotes

a. Currency reserves 
b. Ethical and moral behaviour
c. Debt whose repayment is postponed 
d. Specialised large-scale commercial institutions

Answer (b)

10. The term Dhaman in Islamic commercial law refers to

a. Islamic banking operations
b. Several types of Islamic financial transactions
c. The taking on of a liability or responsibility of another person
d. Commercial activities of Islamic banks

Answer (c)


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