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

🔥 PLATINUM SERIES 2.0 | VOL. 217

📅 SUNDAY, 1 NOVEMBER 2026

🎯 TARGET EXAMINATIONS

IBPS PO Mains • SBI PO • Other Banking Examinations

📝 20 QUESTIONS | 20 MARKS | 15 MINUTES

📊 Banking Concepts • Credit Appraisal • Risk Management • Regulatory Awareness

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Q1. A bank's term-loan account has become a non-performing asset (NPA). Under the general RBI income-recognition principles, how should interest income on the NPA ordinarily be recognised:

A. On the original loan sanction date

B. According to the contractual repayment schedule, irrespective of recovery

C. On the basis of the borrower's credit rating

D. On realisation, subject to applicable RBI instructions

E. At the end of every financial quarter, irrespective of recovery

Q2. A commercial bank is assessing its exposure to a single corporate group to ensure that concentration risk remains within applicable regulatory limits. Which framework is most directly relevant:

A. Large Exposures Framework under the RBI's Concentration Risk Management Directions

B. Liquidity Coverage Ratio framework

C. Priority Sector Lending framework

D. Deposit Insurance framework

E. Asset-Liability Management framework alone

Q3. A bank is appraising a term loan for a rice mill. The projected annual cash accrual available for debt servicing is ₹180 lakh, while annual principal and interest obligations total ₹150 lakh. What is the projected Debt Service Coverage Ratio (DSCR):

A. 0.83 times

B. 1.00 time

C. 1.20 times

D. 1.50 times

E. 1.80 times

Q4. A bank outsources a critical technology function to an external service provider. A control failure at the provider causes a customer-data incident. Which statement best reflects the bank's regulatory responsibility:

A. The service provider automatically assumes all regulatory responsibility

B. The bank remains responsible only if the customer proves negligence

C. The bank's applicable regulatory responsibilities continue, including appropriate oversight of outsourcing risks

D. The bank's responsibility ends when the outsourcing contract is signed

E. The bank is responsible only for direct financial losses

Q5. A standard term-loan account has an instalment overdue for 75 days. Assuming no special regulatory provision applies, how should it generally be classified under the SMA framework:

A. SMA-0

B. SMA-2

C. SMA-1

D. Standard, without SMA classification

E. NPA

Q6. A bank reports eligible regulatory capital of ₹5,400 crore against risk-weighted assets of ₹45,000 crore. What is its capital adequacy ratio, based on these figures:

A. 12%

B. 10%

C. 11%

D. 13.5%

E. 15%

Q7. An eligible participant in the RBI's liquidity framework wants to place surplus funds with the RBI without providing collateral. Which facility is designed for this purpose:

A. Marginal Standing Facility

B. Bank Rate

C. Repo operation

D. Standing Deposit Facility

E. Market Stabilisation Scheme

Q8. An MSME supplier needs finance against eligible trade receivables accepted by a corporate buyer. Which electronic mechanism is specifically designed to facilitate the financing or discounting of such receivables:

A. Central Repository of Information on Large Credits

B. National Electronic Funds Transfer

C. Trade Receivables Discounting System

D. Real Time Gross Settlement

E. Legal Entity Identifier

Q9. A bank earns net interest income of ₹900 crore during a financial period. Its average interest-earning assets are ₹30,000 crore. What is its net interest margin (NIM), using the figures provided:

A. 2.0%

B. 3.0%

C. 3.5%

D. 4.0%

E. 4.5%

Q10. A bank receives a demand under a bank guarantee. The demand complies with the guarantee's terms, and no applicable legal or contractual ground justifies refusal. What should the bank ordinarily do:

A. Wait until the borrower repays the underlying loan

B. Obtain fresh consent from the borrower before acting

C. Reject the demand if the borrower disputes the underlying liability

D. Convert the guarantee automatically into a term loan

E. Honour the demand in accordance with the guarantee's terms

Q11. Which RBI reporting mechanism is specifically associated with credit information on large borrowers reported by banks and other entities covered by applicable requirements:

A. Central KYC Records Registry

B. Credit Guarantee Fund Trust for Micro and Small Enterprises

C. Central Repository of Information on Large Credits

D. Financial Intelligence Unit–India

E. National Electronic Funds Transfer

Q12. A bank needs to identify a legal entity consistently across financial transactions and jurisdictions. Which globally recognised identifier is designed for this purpose:

A. Legal Entity Identifier

B. Permanent Account Number

C. Aadhaar number

D. Indian Financial System Code

E. Magnetic Ink Character Recognition code

Q13. A customer approaches a payments bank for a conventional loan, with the payments bank acting as the lender. Under the applicable payments-bank model, which statement is correct:

A. It may lend freely if the loan amount is small

B. It may lend if the borrower maintains a savings account

C. It may lend only against gold collateral

D. It may lend if the loan is digitally originated

E. It is not permitted to undertake lending activities as a payments bank

Q14. A bank must maintain sufficient eligible high-quality liquid assets to withstand a prescribed 30-calendar-day liquidity stress scenario. Which regulatory metric is most directly relevant:

A. Net Stable Funding Ratio

B. Liquidity Coverage Ratio

C. Capital Adequacy Ratio

D. Credit-Deposit Ratio

E. Net Interest Margin

Q15. The Reserve Bank introduced a new integrated grievance-redress scheme effective from 1 July 2026. What is its correct name:

A. Banking Regulation and Inspection Scheme, 2026

B. Deposit Insurance Protection Scheme, 2026

C. Financial Stability and Resolution Scheme, 2026

D. Reserve Bank–Integrated Ombudsman Scheme, 2026

E. Digital Banking Licensing Scheme, 2026

Q16. A bank has a significant portfolio of fixed-rate loans. Its deposit and other funding costs rise, but the yields on these loans do not adjust immediately. Assuming other factors remain unchanged, what is the most likely near-term effect:

A. Automatic improvement in capital adequacy

B. Elimination of credit risk

C. Pressure on net interest margin

D. Automatic reduction in non-performing assets

E. Increase in the value of every fixed-rate loan

Q17. A 91-day Treasury Bill with a face value of ₹100 is issued at ₹98.20. Using a 365-day year and the simple bank discount yield formula based on face value, what is the approximate annualised discount yield:

A. 7.22%

B. 6.50%

C. 5.80%

D. 8.10%

E. 9.00%

Q18. A bank employee bypasses an established internal control, resulting in an incorrect transaction and financial loss. Which risk category most directly captures this event:

A. Market risk

B. Sovereign risk

C. Strategic risk

D. Foreign-exchange risk

E. Operational risk

Q19. A floating-rate loan is priced at MCLR plus a contractual spread. What is the principal role of MCLR in this arrangement:

A. It represents the bank's deposit-insurance premium

B. It serves as an internal lending-rate benchmark for applicable loans

C. It represents the borrower's credit score

D. It represents the bank's statutory liquidity reserve

E. It represents the bank's regulatory capital ratio

Q20. A rural cooperative credit institution seeks refinance support for eligible agricultural and rural-sector lending. Which institution has a central role in providing such support within its mandate:

A. Securities and Exchange Board of India

B. Insurance Regulatory and Development Authority of India

C. Pension Fund Regulatory and Development Authority

D. National Bank for Agriculture and Rural Development

E. Competition Commission of India

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🔐 ANSWER KEY

Q1.D

Q2.A

Q3.C

Q4.E

Q5.B

Q6.A

Q7.D

Q8.C

Q9.B

Q10.E

Q11.C

Q12.A

Q13.E

Q14.B

Q15.D

Q16.C

Q17.A

Q18.E

Q19.B

Q20.D

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📚 DETAILED EXPLANATIONS

Q1. Correct Answer: D — On realisation

Under the general RBI income-recognition principles, income from NPAs is ordinarily recognised on a realisation basis rather than merely accruing according to contractual terms. Applicable directions and specific exceptions must be observed.

Q2. Correct Answer: A — Large Exposures Framework

The RBI's Commercial Banks (Concentration Risk Management) Directions, 2025 include the Large Exposures Framework. It addresses exposure concentration involving individual counterparties and groups of connected counterparties, subject to the applicable provisions and limits.

Q3. Correct Answer: C — 1.20 times

DSCR = Cash available for debt servicing ÷ Annual debt-service obligations.

= ₹180 lakh ÷ ₹150 lakh

= 1.20 times

A DSCR above 1 indicates that projected cash available covers the stated debt-service obligations. The acceptability of the ratio depends on the lender's appraisal norms and the project's risk profile.

Q4. Correct Answer: E — The bank retains its applicable responsibilities

Outsourcing does not automatically transfer a bank's regulatory responsibilities. Appropriate due diligence, risk assessment, monitoring and oversight remain essential.

Q5. Correct Answer: B — SMA-2

For ordinary term loans under the standard SMA framework:

- SMA-0: Overdue up to 30 days.

- SMA-1: Overdue for more than 30 days and up to 60 days.

- SMA-2: Overdue for more than 60 days and up to 90 days.

- NPA: Generally, overdue for more than 90 days, subject to applicable provisions.

At 75 days overdue, the account falls under SMA-2.

Q6. Correct Answer: A — 12%

Capital Adequacy Ratio = Regulatory capital ÷ Risk-weighted assets × 100.

= ₹5,400 crore ÷ ₹45,000 crore × 100

= 12%

This is the ratio calculated from the supplied figures. Compliance must be assessed against the applicable capital requirements.

Q7. Correct Answer: D — Standing Deposit Facility

The Standing Deposit Facility enables eligible participants to place funds with the RBI without collateral. It serves as an instrument for absorbing surplus liquidity.

Q8. Correct Answer: C — TReDS

The Trade Receivables Discounting System is an electronic platform for financing or discounting eligible MSME trade receivables through participating financiers. It facilitates access to finance against eligible receivables.

Q9. Correct Answer: B — 3.0%

NIM = Net interest income ÷ Average interest-earning assets × 100.

= ₹900 crore ÷ ₹30,000 crore × 100

= 3.0%

NIM measures net interest income relative to average interest-earning assets.

Q10. Correct Answer: E — Honour the demand

A bank guarantee is governed by its terms and applicable law. When a demand complies with the guarantee and no valid ground for refusal applies, the bank must honour its obligation in accordance with those terms.

Q11. Correct Answer: C — CRILC

The Central Repository of Information on Large Credits is an RBI reporting mechanism for credit information on large borrowers under applicable reporting requirements. It supports supervisory monitoring of credit exposures.

Q12. Correct Answer: A — Legal Entity Identifier

The Legal Entity Identifier (LEI) is a globally recognised identifier for legal entities participating in financial transactions. It improves consistency and transparency in financial-market data.

Q13. Correct Answer: E — Payments banks cannot undertake lending

Payments banks operate under a restricted banking model. They can provide permitted deposit, payment and remittance services but cannot undertake lending activities as payments banks.

Q14. Correct Answer: B — Liquidity Coverage Ratio

The Liquidity Coverage Ratio measures a covered bank's ability to meet net cash outflows under a prescribed 30-calendar-day liquidity stress scenario using eligible high-quality liquid assets.

Q15. Correct Answer: D — Reserve Bank–Integrated Ombudsman Scheme, 2026

The Reserve Bank–Integrated Ombudsman Scheme, 2026 came into force on 1 July 2026, replacing the 2021 scheme for matters governed by the new framework.

It provides a cost-free, expeditious and non-adversarial grievance-redress mechanism for eligible complaints concerning deficiency in service by regulated entities covered under the scheme.

Transitional provision: Complaints received before 1 July 2026, appeals arising from decisions under the 2021 scheme and execution of awards under that scheme continue to be governed by the earlier framework and applicable RBI instructions.

Q16. Correct Answer: C — Pressure on NIM

When funding costs rise but fixed-rate loan yields remain unchanged, interest expenses increase relative to interest income. Other things being equal, this compresses the bank's net interest margin.

Q17. Correct Answer: A — 7.22%

Discount = Face value − Issue price.

= ₹100 − ₹98.20

= ₹1.80

Bank discount yield:

= Discount ÷ Face value × 365 ÷ Days to maturity × 100

= ₹1.80 ÷ ₹100 × 365 ÷ 91 × 100

≈ 7.22%

This is the bank discount yield using face value as the denominator. It differs from an investment yield calculated using the purchase price.

Q18. Correct Answer: E — Operational risk

Operational risk includes potential losses arising from inadequate or failed internal processes, people and systems, or external events. The employee's control breach and resulting transaction error fit this category.

Q19. Correct Answer: B — Internal lending-rate benchmark

MCLR stands for Marginal Cost of Funds Based Lending Rate. It is an internal benchmark used for applicable bank loans. In an MCLR-plus-spread arrangement, the lending rate is determined by the benchmark and the contractual spread, subject to the loan terms and applicable regulations.

Q20. Correct Answer: D — NABARD

The National Bank for Agriculture and Rural Development plays a central role in agricultural and rural development finance. Its functions include refinance support for eligible institutions and activities under applicable schemes and guidelines.

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🎯 YOUR 15-MINUTE CHALLENGE

✅ Attempt all 20 questions within 15 minutes.

✅ Review every incorrect answer.

✅ Rework the numerical questions without looking at the explanations.

✅ Revise the regulatory concepts and their applicable provisions.

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🔥 IBR PLATINUM SERIES 2.0

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EDITORIAL DISCLAIMER

This mock is intended for educational and examination practice. Regulatory provisions, eligibility conditions and reporting requirements should be checked against the latest applicable official RBI directions before being relied upon for professional decisions.