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

🔥 PLATINUM SERIES 2.0 | VOL. 220

📅 WEDNESDAY, 4 NOVEMBER 2026

🎯 TARGET EXAMINATIONS

IBPS PO Mains • SBI PO • Other Banking Examinations

📝 20 QUESTIONS | 20 MARKS | 15 MINUTES

📊 Priority Sector Lending • Agricultural Finance • MSME Finance • Financial Inclusion • KYC & AML • Digital Banking • Payment Systems • Deposit Insurance • Monetary Operations • Treasury Management • Foreign Exchange • Trade Finance

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### SECTION I — ADVANCED BANKING INTELLIGENCE MCQs

Q1. Under RBI's Priority Sector Lending Directions, 2025, what is the overall PSL target for domestic commercial banks, excluding RRBs and Small Finance Banks:

A. 30% of ANBC.

B. 40% of ANBC or CEOBSE, whichever is higher.

C. 50% of total deposits.

D. 60% of total advances.

E. 75% of ANBC.

Q2. What is the prescribed sub-target for lending to Small and Marginal Farmers (SMFs) for domestic commercial banks under the applicable PSL framework:

A. 5% of ANBC.

B. 7.5% of ANBC.

C. 8% of ANBC.

D. 10% of ANBC or CEOBSE, whichever is higher.

E. 14% of total deposits.

Q3. A bank has achieved its overall PSL target but has a shortfall in the agriculture sub-target. It purchases a Priority Sector Lending Certificate (PSLC). Which statement best describes the transaction:

A. It enables the bank to meet eligible PSL achievement without transferring the underlying loan or its credit risk.

B. It transfers ownership of agricultural loans to the purchasing bank.

C. It automatically converts the shortfall into Tier 1 capital.

D. It eliminates the need for PSL reporting.

E. It converts the underlying loans into government securities.

Q4. A farmer requires finance for crop cultivation, harvesting, post-harvest expenses and maintenance of farm assets. Which banking facility is specifically designed to meet these recurring agricultural credit requirements:

A. Letter of Credit.

B. Bank Guarantee.

C. Kisan Credit Card (KCC).

D. Export Credit.

E. Factoring Facility.

Q5. A group of economically weaker women mobilises savings, undertakes internal lending and approaches a bank for credit under the SHG-Bank Linkage Programme. Which principle is most relevant to this model:

A. Individual collateral-based corporate lending.

B. Mandatory mortgage of agricultural land.

C. Lending exclusively against government securities.

D. Financing only through equity participation.

E. Group-based financial intermediation supported by savings discipline and collective responsibility.

Q6. A group of farmers forms a Farmer Producer Organisation (FPO) to aggregate produce, procure inputs collectively and improve market access. What is the principal economic advantage of this arrangement:

A. Elimination of all agricultural market risks.

B. Economies of scale through collective input procurement, aggregation and marketing.

C. Automatic waiver of institutional loans.

D. Exemption from all statutory registrations.

E. Guaranteed minimum profits irrespective of market conditions.

Q7. With effect from 1 April 2025, an enterprise has investment in plant and machinery or equipment of ₹2 crore and annual turnover of ₹8 crore. Assuming both figures satisfy the prescribed limits, how will it be classified:

A. Small enterprise.

B. Medium enterprise.

C. Not eligible for MSME classification.

D. Micro enterprise.

E. Large enterprise.

Q8. A bank sanctions a collateral-free loan to an eligible micro enterprise under a credit guarantee arrangement supported by CGTMSE. What is the principal role of CGTMSE:

A. Providing credit guarantee cover to eligible lending institutions against specified credit facilities.

B. Directly sanctioning and disbursing every MSME loan.

C. Replacing the borrower's repayment obligation.

D. Guaranteeing 100% repayment of every loan without conditions.

E. Providing interest-free loans to all entrepreneurs.

Q9. An MSME supplier raises an invoice on a large corporate buyer and wants finance before the invoice due date. Multiple financiers are invited to bid for the receivable through an electronic platform. Which mechanism is being used:

A. Core Banking Solution.

B. National Electronic Funds Transfer.

C. Trade Receivables Discounting System (TReDS).

D. Letter of Credit.

E. Cash Reserve Ratio.

Q10. Under RBI's general risk-based KYC periodic updation framework, what is the minimum prescribed frequency for a low-risk customer:

A. Once every two years.

B. Once every three years.

C. Once every five years.

D. Once every eight years.

E. Once every ten years.

Q11. A bank wants to retrieve an existing customer's KYC records from a centralised repository instead of repeatedly collecting the same documents, subject to applicable consent and requirements. Which facility supports this process:

A. CERSAI Security Registry.

B. Central KYC Records Registry (CKYCR).

C. Credit Information Bureau.

D. National Payments Corporation of India.

E. Deposit Insurance and Credit Guarantee Corporation.

Q12. A customer transfers funds instantly from one bank account to another using a mobile application by entering the beneficiary's UPI ID. Which organisation operates the UPI platform:

A. Securities and Exchange Board of India.

B. Insurance Regulatory and Development Authority of India.

C. NABARD.

D. National Payments Corporation of India (NPCI).

E. Deposit Insurance and Credit Guarantee Corporation.

Q13. A corporate customer wants to transfer ₹3 crore between two bank accounts through a payment system that settles transactions individually in real time. Which payment system is most appropriate:

A. Real Time Gross Settlement (RTGS).

B. National Automated Clearing House (NACH).

C. Cheque Truncation System (CTS).

D. Immediate Payment Service (IMPS) only.

E. National Financial Switch (NFS).

Q14. Which statement correctly describes the operational features of the National Electronic Funds Transfer (NEFT) system:

A. It operates only during normal banking hours.

B. It is exclusively meant for international remittances.

C. It operates 24×7×365 and processes transactions in half-hourly batches.

D. It requires a minimum transfer of ₹2 lakh.

E. It settles every transaction individually in real time on a gross basis.

Q15. An individual maintains savings deposits of ₹3 lakh and fixed deposits of ₹4 lakh in different branches of the same insured bank, in the same right and capacity. What is the maximum aggregate amount covered under DICGC deposit insurance:

A. ₹3 lakh.

B. ₹7 lakh.

C. ₹10 lakh.

D. ₹2 lakh.

E. ₹5 lakh.

Q16. A bank identifies a transaction pattern that appears suspicious, although the underlying offence has not been conclusively established. Under the PML framework, which report should the bank consider filing with FIU-IND:

A. Cash Reserve Ratio Return.

B. Suspicious Transaction Report (STR).

C. Statutory Liquidity Ratio Return.

D. Capital Adequacy Return.

E. Priority Sector Lending Return.

Q17. Under RBI's liquidity adjustment framework, which facility enables eligible banks to place surplus funds with RBI without providing collateral:

A. Marginal Standing Facility.

B. Bank Rate.

C. Market Stabilisation Scheme.

D. Standing Deposit Facility (SDF).

E. Open Market Purchase of Government Securities.

Q18. When RBI purchases government securities from the market through Open Market Operations, what is the immediate liquidity impact, other things remaining unchanged:

A. Liquidity is injected into the banking system.

B. Liquidity is absorbed from the banking system.

C. CRR automatically increases.

D. SLR automatically decreases.

E. Bank deposits are compulsorily frozen.

Q19. An Indian importer expects to make a payment of US$1 million after three months. To protect against adverse exchange-rate movements, it enters into an agreement with its bank to buy dollars at a predetermined rate on the future date. Which instrument is being used:

A. Currency option purchased without premium.

B. Foreign currency deposit.

C. Forward foreign exchange contract.

D. Spot foreign exchange transaction.

E. Foreign currency traveller's cheque.

Q20. An Indian importer requests its bank to issue a documentary credit in favour of an overseas exporter. The exporter presents documents complying with the credit's terms. What is the fundamental obligation of the issuing bank:

A. To verify the physical quality of goods before payment.

B. To make payment only after the importer resells the goods.

C. To pay only when the importer provides fresh consent.

D. To guarantee the exporter's commercial profitability.

E. To honour a complying presentation in accordance with the terms of the credit and applicable rules.

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### SECTION II — ANSWER KEY

Q1.B

Q2.D

Q3.A

Q4.C

Q5.E

Q6.B

Q7.D

Q8.A

Q9.C

Q10.E

Q11.B

Q12.D

Q13.A

Q14.C

Q15.E

Q16.B

Q17.D

Q18.A

Q19.C

Q20.E

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### SECTION III — DETAILED EXPLANATIONS

Q1. Priority Sector Lending Target — Option B

Domestic commercial banks, excluding RRBs and Small Finance Banks, have an overall PSL target of 40% of ANBC or CEOBSE, whichever is higher.

Important sub-targets:

* Agriculture: 18%.

* Non-Corporate Farmers: 14%.

* Small and Marginal Farmers: 10%.

* Micro Enterprises: 7.5%.

* Weaker Sections: 12%.

Q2. Small and Marginal Farmers — Option D

The prescribed sub-target for SMFs is 10% of ANBC or CEOBSE, whichever is higher.

This 10% target is included within the agriculture target of 18%, not an additional target.

Q3. PSLC — Option A

Priority Sector Lending Certificates help banks manage category-wise PSL shortfalls.

Important features:

* No transfer of the underlying loan.

* No transfer of credit risk.

* Facilitates PSL target achievement.

* Traded through the RBI-prescribed mechanism.

Q4. Kisan Credit Card — Option C

KCC provides timely and flexible institutional credit for agricultural requirements.

It covers eligible crop production expenses, post-harvest expenses, household requirements within prescribed limits, farm asset maintenance and eligible allied activities.

Q5. SHG-Bank Linkage — Option E

The programme promotes financial inclusion through:

* Regular savings.

* Internal lending.

* Collective responsibility.

* Bank credit linkage.

* Financial discipline and empowerment.

Q6. Farmer Producer Organisation — Option B

FPOs enable farmers to obtain economies of scale through collective input procurement, produce aggregation, marketing and value addition.

They also improve bargaining power and access to organised markets.

Q7. MSME Classification — Option D

Revised classification effective 1 April 2025:

| Category | Investment | Turnover |

| Micro | ₹2.5 crore | ₹10 crore |

| Small | ₹25 crore | ₹100 crore |

| Medium | ₹125 crore | ₹500 crore |

Both investment and turnover criteria must be satisfied.

Q8. CGTMSE — Option A

CGTMSE stands for Credit Guarantee Fund Trust for Micro and Small Enterprises.

It provides guarantee support to eligible lending institutions for eligible credit facilities.

The bank sanctions the loan, the borrower remains responsible for repayment, and guarantee coverage is subject to scheme conditions.

Q9. TReDS — Option C

TReDS facilitates electronic financing of MSME trade receivables.

Process:

* MSME uploads invoice.

* Buyer accepts invoice.

* Financiers submit bids.

* MSME receives discounted payment.

* Financier receives payment on maturity.

Q10. KYC Periodicity — Option E

General RBI periodic updation requirements:

* High-risk: Every 2 years.

* Medium-risk: Every 8 years.

* Low-risk: Every 10 years.

Banks must follow applicable transitional provisions and special instructions.

Q11. CKYCR — Option B

Central KYC Records Registry provides a centralised repository of customer KYC records.

It facilitates retrieval of existing KYC information and reduces repetitive document collection, subject to applicable requirements.

Q12. UPI — Option D

Unified Payments Interface is operated by NPCI.

Features include instant payments, VPA-based transfers, merchant payments and interoperability among participating banks.

Q13. RTGS — Option A

Important features:

* Minimum transaction: ₹2 lakh.

* No RBI-prescribed maximum limit.

* Available 24×7×365.

* Individual transaction-wise real-time gross settlement.

Q14. NEFT — Option C

NEFT operates 24×7×365 and processes transactions in half-hourly batches.

There is no RBI-prescribed minimum or maximum transaction limit.

Unlike RTGS, NEFT follows deferred net settlement.

Q15. DICGC — Option E

DICGC provides deposit insurance up to ₹5 lakh per depositor per insured bank, including principal and interest.

Deposits across branches of the same bank are aggregated when held in the same right and capacity.

Q16. STR — Option B

Suspicious Transaction Reports are filed with FIU-IND under the applicable PML framework.

Suspicion does not require conclusive proof of an offence.

CTR and STR are distinct reporting categories.

Q17. SDF — Option D

Standing Deposit Facility enables eligible banks to park surplus funds with RBI without providing collateral.

It is a liquidity absorption instrument and serves as the floor of the Liquidity Adjustment Facility corridor.

Q18. OMO — Option A

* RBI purchases government securities: Liquidity injection.

* RBI sells government securities: Liquidity absorption.

OMOs are used for managing systemic liquidity.

Q19. Forward Contract — Option C

A forward foreign exchange contract fixes an exchange rate for a specified future transaction.

It helps importers and exporters hedge foreign exchange risk and obtain greater certainty regarding future cash flows.

Q20. Letter of Credit — Option E

A documentary Letter of Credit is an undertaking by the issuing bank to honour a complying presentation.

Key principles:

* Documentary nature.

* Independence from the underlying commercial contract.

* Examination of documents rather than physical goods.

* Compliance with the credit's terms and applicable rules.

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SECTION V — IBR READER ENGAGEMENT & CALLS TO ACTION

🔥 IBR PLATINUM CHALLENGE

Attempt all 20 questions in 15 minutes without referring to the answer key.

Evaluate your performance:

* 18–20: Excellent — Mains-ready.

* 15–17: Very Good.

* 12–14: Needs improvement.

* Below 12: Strengthen conceptual understanding.

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