INDIAN BANKING RADAR (IBR) - IBPS PO MAINS — BANKING INTELLIGENCE MOCK

🔥 PLATINUM SERIES 2.0 | VOL. 216

📅 SATURDAY, 31 OCTOBER 2026

🎯 TARGET EXAMINATIONS

IBPS PO Mains • SBI PO • Other Banking Examinations

📝 QUESTIONS: 20

🎯 MAXIMUM MARKS: 20

⏱️ SUGGESTED TIME: 15 MINUTES

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BANKING INTELLIGENCE MOCK — 20 MCQs

Q1. A farmer avails an agricultural loan for cultivating a short-duration crop. The principal instalment remains overdue for two crop seasons. Under the general RBI norms applicable to agricultural advances, how should the account be classified?

A. Non-performing asset (NPA)

B. Standard asset until the next financial year

C. SMA-0 only

D. SMA-1 irrespective of crop seasons

E. Loss asset automatically

Q2. A secured creditor intends to enforce a valid security interest under Section 13(2) of the SARFAESI Act, 2002. What is the general period specified in the demand notice for the borrower to discharge the liability?

A. 15 days

B. 60 days

C. 90 days

D. 120 days

E. 180 days

Q3. A lender seeks access to a customer's financial information held by multiple financial institutions through the Account Aggregator ecosystem. Which condition is fundamental to this process?

A. The customer must surrender all banking passwords to the Account Aggregator.

B. The Account Aggregator must guarantee the customer's loan repayment.

C. Financial information must be shared in accordance with the customer's explicit consent and its specified terms.

D. The lender must obtain ownership of the customer's deposit accounts.

E. Customer consent is unnecessary if the lender is a regulated entity.

Q4. A bank breaches specified financial thresholds under the RBI's Prompt Corrective Action framework. What is the principal regulatory objective of the framework?

A. To guarantee government capital support immediately.

B. To exempt the bank from normal prudential requirements.

C. To ensure automatic liquidation of the bank.

D. To facilitate timely supervisory intervention and corrective measures.

E. To guarantee a minimum dividend to shareholders.

Q5. A commercial bank's term-loan instalment remains continuously overdue for 95 days. Assuming no special regulatory exception applies, what is the appropriate asset classification?

A. Standard asset

B. SMA-0

C. SMA-1

D. SMA-2

E. Non-performing asset (NPA)

Q6. A bank has net demand and time liabilities (NDTL) of ₹50,000 crore. Assuming a prescribed CRR of 3%, what cash balance must it maintain with the RBI towards CRR?

A. ₹2,000 crore

B. ₹1,500 crore

C. ₹2,500 crore

D. ₹4,000 crore

E. ₹5,000 crore

Q7. A bank detects transactions that are inconsistent with a customer's known business profile and raise reasonable suspicion of money laundering. What should the bank do when the applicable reporting criteria are met?

A. Inform the customer before making any report.

B. Submit a Suspicious Transaction Report (STR) to FIU-IND through the prescribed process without tipping off the customer.

C. Ignore the activity unless a criminal conviction occurs.

D. Automatically close every account linked to the customer's family.

E. Report the transactions only to the local police, regardless of applicable reporting requirements.

Q8. A bank implements the Cheque Truncation System (CTS). Which operational benefit is most directly associated with CTS?

A. Guaranteed payment of every cheque presented.

B. Elimination of all cheque-return reasons.

C. Electronic processing of cheque images and data, reducing the need for physical cheque movement during clearing.

D. Automatic conversion of cheques into demand drafts.

E. Removal of the requirement to verify signatures and other relevant cheque details.

Q9. Under the Basel III framework applicable to Indian scheduled commercial banks, the Capital Conservation Buffer is generally prescribed at what level?

A. 0.625% of total deposits

B. 1% of net demand and time liabilities

C. 5% of gross advances

D. 2.5% of risk-weighted assets

E. 10% of total borrowings

Q10. A bank identifies a prospective customer as a Politically Exposed Person (PEP). Which approach is generally appropriate under the applicable KYC framework?

A. Reject the customer automatically in every case.

B. Waive customer due diligence because the customer holds public office.

C. Permit account opening without assessing relevant risks.

D. Apply ordinary monitoring without considering PEP-related risk.

E. Apply prescribed enhanced due diligence, including source-of-funds or wealth assessment, senior-management approval where required, and ongoing monitoring.

Q11. A lender discovers that another secured creditor may already have registered an interest in an asset offered as security. Which system is particularly relevant for checking registered security interests?

A. Central Registry of Securitisation Asset Reconstruction and Security Interest of India (CERSAI)

B. National Automated Clearing House (NACH)

C. Central Repository of Information on Large Credits (CRILC)

D. Financial Intelligence Unit–India (FIU-IND)

E. Deposit Insurance and Credit Guarantee Corporation (DICGC)

Q12. Which activity is not permitted for a Payment Bank under the RBI's regulatory framework?

A. Providing eligible payment and remittance services

B. Undertaking lending activities

C. Facilitating eligible electronic transactions

D. Accepting eligible deposits within applicable limits

E. Providing specified banking services within its authorised scope

Q13. A government department needs to transfer subsidies electronically to a large number of beneficiaries. Which payment infrastructure is designed to facilitate bulk, repetitive electronic payments and collections?

A. RTGS exclusively

B. Cheque Truncation System

C. National Automated Clearing House (NACH)

D. Central Registry of Securitisation Asset Reconstruction and Security Interest of India

E. Treasury Bill auction system

Q14. A 91-day Treasury Bill with a face value of ₹100 is issued at ₹98.20. What is its approximate annualised bank discount yield, using a 365-day year?

A. 1.80%

B. 5.00%

C. 6.00%

D. 7.22%

E. 9.10%

Q15. A bank has surplus eligible funds that it wishes to place with the RBI under the Standing Deposit Facility (SDF). Which statement best describes this facility?

A. It provides unsecured overnight borrowing to banks from the RBI.

B. It provides long-term refinance exclusively for agricultural lending.

C. It requires banks to purchase government securities from the market.

D. It is a mechanism for guaranteeing deposits held by the public.

E. It allows eligible banks to place funds with the RBI without collateral, subject to applicable terms.

Q16. A bank prices an eligible floating-rate loan using MCLR plus a prescribed spread. Which statement best describes MCLR?

A. It is an internal lending-rate benchmark based on specified funding and other prescribed cost components.

B. It is the statutory minimum return on government securities.

C. It is the rate paid by DICGC on insured deposits.

D. It is a uniform lending rate that eliminates all differences between borrowers.

E. It is the maximum rate the RBI permits banks to charge on every loan.

Q17. Which statement best describes the Net Stable Funding Ratio (NSFR)?

A. It measures a bank's capacity to meet net cash outflows over a 30-day stress period.

B. It promotes a stable funding profile relative to the liquidity characteristics of assets and specified exposures over a one-year horizon.

C. It measures the percentage of deposits insured by DICGC.

D. It determines the maximum interest rate on savings deposits.

E. It measures only the return earned on shareholders' equity.

Q18. A bank experiences losses because employees fail to follow established procedures and an internal processing error results in unauthorised payments. Which risk category most directly captures this event?

A. Market risk

B. Sovereign risk

C. Operational risk

D. Foreign exchange translation risk

E. Interest-rate risk

Q19. A bank funds long-term, fixed-rate assets largely through short-term deposits that reprice frequently. Which function should primarily analyse the resulting maturity and repricing mismatches?

A. Customer relationship management

B. Deposit insurance administration

C. Branch premises management

D. Asset-Liability Management (ALM)

E. Cash-in-transit management

Q20. A customer disputes a transaction appearing in a bank statement. Which statement best describes the role of a Credit Information Company (CIC) in India's credit system?

A. It adjudicates all banking complaints.

B. It guarantees repayment of every loan reported to it.

C. It sanctions loans on behalf of all regulated lenders.

D. It determines the RBI's policy interest rate.

E. It maintains credit information and provides credit reports and scores to authorised users; it is not the primary mechanism for adjudicating an individual banking transaction dispute.

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📘 ANSWER KEY

Q1.A

Q2.B

Q3.C

Q4.D

Q5.E

Q6.B

Q7.B

Q8.C

Q9.D

Q10.E

Q11.A

Q12.B

Q13.C

Q14.D

Q15.E

Q16.A

Q17.B

Q18.C

Q19.D

Q20.E

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📚 DETAILED EXPLANATIONS & LEARNING POINTS

Q1. Correct Answer: A — Non-performing asset

Under the general RBI norms for agricultural advances, an advance relating to a short-duration crop becomes an NPA if principal or interest remains overdue for two crop seasons. Long-duration crops are subject to the applicable one-crop-season norm.

Exam trap: Agricultural advances have crop-season-based norms; do not automatically apply the ordinary 90-day term-loan rule.

Q2. Correct Answer: B — 60 days

Section 13(2) of the SARFAESI Act generally provides a 60-day demand-notice period for the borrower to discharge the liability before the secured creditor proceeds under Section 13(4), subject to the Act.

Remember: The notice period is not the same as the limitation period for other legal proceedings.

Q3. Correct Answer: C — Explicit consent

The Account Aggregator framework enables consent-based sharing of specified financial information between participating financial institutions. Information must be shared in accordance with the consent provided and applicable regulatory requirements.

Learning point: Account Aggregators facilitate data sharing; they do not themselves guarantee loans or require customers to surrender their banking passwords.

Q4. Correct Answer: D — Timely corrective intervention

The PCA framework enables supervisory action when a bank breaches specified financial-risk thresholds. Corrective measures are intended to address weaknesses and support financial stability.

Exam trap: PCA does not automatically mean liquidation or a government bailout.

Q5. Correct Answer: E — NPA

For a term loan, the general RBI norm is classification as an NPA when principal or interest remains overdue for more than 90 days, subject to applicable provisions.

Remember: The applicable rules differ for certain facilities, including agricultural advances subject to crop-season norms.

Q6. Correct Answer: B — ₹1,500crore

CRR = Prescribed CRR percentage × NDTL

Q7. Correct Answer: B — STR reporting

Banks must report suspicious transactions to FIU-IND when the applicable criteria are met. An STR does not require the bank to establish that a criminal offence has already been proved.

Learning point: Reporting must follow the prescribed process, and customers must not be tipped off about an STR.

Q8. Correct Answer: C — Electronic cheque clearing

CTS enables cheque clearing using electronic images and associated data, reducing the need for physical transportation of cheques through the clearing process.

Q9. Correct Answer: D — 2.5% of risk-weighted assets

The Capital Conservation Buffer for applicable Indian scheduled commercial banks is generally 2.5% of risk-weighted assets, maintained in eligible capital in addition to minimum capital requirements.

Q10. Correct Answer: E — Enhanced due diligence

PEP identification calls for risk-sensitive due diligence under the applicable KYC framework. Measures include assessing the source of funds or wealth, obtaining senior-management approval where required and conducting ongoing monitoring.

Q11. Correct Answer: A — CERSAI

CERSAI maintains a central registry of specified security interests. Checking relevant records can help lenders identify existing registered interests and reduce risks associated with multiple financing against the same asset.

Q12. Correct Answer: B — Lending activities

Payment Banks can undertake permitted payment and remittance services and accept eligible deposits within the applicable regulatory limits. They are not permitted to undertake lending activities.

Q13. Correct Answer: C — NACH

NACH facilitates bulk and repetitive electronic transactions, including subsidies, pensions, salaries and authorised recurring collections.

Q14. Correct Answer: D — Approximately 7.22%

Q15. Correct Answer: E — Unsecured placement with RBI

The Standing Deposit Facility enables eligible banks to place surplus funds with the RBI without collateral, subject to the facility's applicable terms. It forms part of the RBI's liquidity-management framework.

Differentiate: Under repo operations, eligible collateral is involved; the SDF accepts deposits without requiring collateral.

Q16. Correct Answer: A — Internal lending-rate benchmark

MCLR is an internal lending-rate benchmark based on specified components, including marginal cost of funds, applicable operating costs and other prescribed factors.

Q17. Correct Answer: B — Stable funding over one year

NSFR promotes a more stable funding structure by relating available stable funding to the required stable funding for assets and specified exposures over a one-year horizon.

Differentiate:

- LCR: Short-term liquidity resilience over a 30-day stress period.

- NSFR: Structural funding stability over a one-year horizon.

Q18. Correct Answer: C — Operational risk

Operational risk arises from inadequate or failed internal processes, people and systems, or from external events. Procedural failures and processing errors are typical examples.

Q19. Correct Answer: D — Asset-Liability Management

ALM analyses maturity gaps, repricing mismatches, liquidity gaps and their impact on earnings and the economic value of a bank's balance sheet.

Q20. Correct Answer: E — Credit information and scoring

CICs maintain credit information and provide credit reports and scores to authorised users in accordance with applicable requirements.

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📢 INDIAN BANKING RADAR — YOUR DAILY EXAM EDGE

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Disclaimer: This is an educational practice mock, not an official examination paper. Candidates should consult the latest applicable RBI and other official instructions for regulatory details.