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

🔥 PLATINUM SERIES 2.0 | VOL. 212

📅 TUESDAY, 27 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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Q1. Following the October 2026 monetary policy decision, what is the RBI policy repo rate:

A. 5.50%

B. 5.25%

C. 5.75%

D. 6.00%

E. 5.00%

Q2. What is the prescribed Cash Reserve Ratio (CRR) used in the current RBI framework:

A. 2.50%

B. 3.00%

C. 3.50%

D. 4.00%

E. 4.50%

Q3. From the fortnight beginning 16 October 2026, what is the revised minimum daily CRR maintenance requirement for scheduled banks:

A. 80%

B. 90%

C. 99%

D. 95%

E. 85%

Q4. What was the notified amount of the four-day Variable Rate Repo (VRR) auction conducted by the RBI on 26 October 2026:

A. ₹50,000 crore

B. ₹75,000 crore

C. ₹1,00,000 crore

D. ₹1,50,000 crore

E. ₹2,00,000 crore

Q5. What was the approximate aggregate value of bids received in the RBI's four-day VRR auction on 26 October 2026:

A. ₹1,00,000 crore

B. ₹1,25,000 crore

C. ₹1,50,000 crore

D. ₹1,75,000 crore

E. ₹1,86,666 crore

Q6. What amount was allotted in the RBI's four-day VRR auction conducted on 26 October 2026:

A. ₹1,50,007 crore

B. ₹1,25,000 crore

C. ₹1,00,000 crore

D. ₹1,86,666 crore

E. ₹75,000 crore

Q7. What was the cut-off rate in the RBI's four-day VRR auction conducted on 26 October 2026:

A. 5.25%

B. 5.55%

C. 5.50%

D. 5.75%

E. 6.00%

Q8. What was the weighted average rate in the same VRR auction:

A. 5.25%

B. 5.50%

C. 5.59%

D. 5.75%

E. 6.00%

Q9. What was the total notified amount of Government of India dated securities announced for re-issue through the auction scheduled for 30 October 2026:

A. ₹25,000 crore

B. ₹30,000 crore

C. ₹35,000 crore

D. ₹33,000 crore

E. ₹40,000 crore

Q10. During which period were the announced Government securities eligible for When-Issued trading:

A. 26–29 October 2026

B. 28–31 October 2026

C. 29 October–2 November 2026

D. 30 October–3 November 2026

E. 27–30 October 2026

Q11. A bank's Common Equity Tier 1 (CET1) capital is ₹480 crore and its risk-weighted assets are ₹6,000 crore. What is its CET1 capital ratio:

A. 8%

B. 6%

C. 10%

D. 12%

E. 15%

Q12. A borrower has failed to pay a term-loan instalment for 45 days. Assuming the amount remains continuously overdue and standard RBI prudential norms apply, which Special Mention Account (SMA) classification is generally applicable:

A. SMA-0

B. SMA-1

C. SMA-2

D. NPA in every case

E. Written-off account

Q13. Under the RBI's revised investment portfolio framework for commercial banks, which category is a subcategory of Fair Value through Profit and Loss (FVTPL):

A. Held to Maturity (HTM)

B. Available for Sale (AFS)

C. Held for Trading (HFT)

D. Statutory Liquidity Ratio (SLR)

E. Investment Reserve Account

Q14. A borrower's current assets are ₹500 lakh, inventory is ₹140 lakh, prepaid expenses are ₹20 lakh, and current liabilities are ₹300 lakh. What is the quick ratio, excluding inventory and prepaid expenses:

A. 1.00:1

B. 1.20:1

C. 1.50:1

D. 1.13:1

E. 1.75:1

Q15. A borrower generates ₹180 lakh in cash accruals available for debt servicing. Annual principal repayment is ₹100 lakh and interest payable is ₹20 lakh. What is the Debt Service Coverage Ratio (DSCR):

A. 1.20 times

B. 1.25 times

C. 1.40 times

D. 1.80 times

E. 1.50 times

Q16. A bank has average interest-earning assets of ₹4,000 crore, interest income of ₹320 crore and interest expenses of ₹200 crore for the same annual period. What is its Net Interest Margin (NIM):

A. 3%

B. 2%

C. 2.5%

D. 4%

E. 5%

Q17. A depositor holds savings deposits of ₹4 lakh and a fixed deposit of ₹3 lakh in different branches of the same insured bank, in the same right and capacity. What is the maximum DICGC insurance cover for the combined deposits, including eligible interest:

A. ₹3 lakh

B. ₹5 lakh

C. ₹7 lakh

D. ₹4 lakh

E. ₹10 lakh

Q18. What is the principal purpose of Priority Sector Lending Certificates (PSLCs) in India's banking system:

A. To transfer ownership of the underlying loans to another bank

B. To guarantee repayment of all priority-sector loans

C. To help eligible banks meet priority-sector lending targets without transferring the underlying loans

D. To exempt banks from priority-sector lending obligations

E. To replace credit appraisal of priority-sector borrowers

Q19. A bond has a modified duration of 5. If its yield increases by 0.50 percentage points, what is the approximate percentage change in its price, ignoring convexity:

A. An increase of 2.5%

B. A decrease of 5.0%

C. An increase of 5.0%

D. A decrease of 2.5%

E. A decrease of 1.0%

Q20. A company reports earnings before interest and tax (EBIT) of ₹36 lakh and annual interest expense of ₹9 lakh. What is its interest coverage ratio:

A. 2 times

B. 3 times

C. 5 times

D. 6 times

E. 4 times

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✅ ANSWER KEY

Q1. A

Q2. B

Q3. C

Q4. D

Q5. E

Q6. A

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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📖 EXPLANATIONS & LEARNING POINTS

Q1. Repo Rate

The policy repo rate is the rate at which the RBI lends short-term funds to eligible banks against eligible collateral under the repo framework.

Q2. Prescribed CRR

CRR is the proportion of a bank's Net Demand and Time Liabilities (NDTL) that it must maintain as cash balances with the RBI.

Q3. Minimum Daily CRR Maintenance

The minimum daily maintenance requirement was raised from 90% to 99% from the fortnight beginning 16 October 2026. This is distinct from the prescribed CRR rate.

Q4. VRR Notified Amount

The RBI notified ₹1,50,000 crore for the four-day VRR auction conducted on 26 October 2026.

Q5. Aggregate Bids

Banks submitted bids worth ₹1,86,666 crore, exceeding the notified amount.

Q6. Amount Allotted

The RBI allotted ₹1,50,007 crore. The allotment was marginally above the notified amount.

Q7. VRR Cut-off Rate

The cut-off rate was 5.55%. A VRR auction injects short-term liquidity at market-determined rates.

Q8. Weighted Average Rate

The weighted average rate was 5.59%, reflecting the accepted bids weighted by their respective amounts.

Q9. Government Securities Auction

The notified amount was ₹33,000 crore for the re-issue of four Government of India dated securities.

Q10. When-Issued Trading

The securities were eligible for When-Issued trading from 27 to 30 October 2026, subject to applicable conditions.

Q11. CET1 Capital Ratio

CET1 ratio = CET1 capital ÷ Risk-weighted assets × 100

= ₹480 crore ÷ ₹6,000 crore × 100

= 8%

Additional Tier 1 capital is excluded from the CET1 numerator.

Q12. SMA Classification

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.

At 45 days overdue, the account generally falls under SMA-1.

Q13. Investment Classification

Under the revised framework, HFT is a subcategory of FVTPL. HTM and AFS are separate investment categories.

Q14. Quick Ratio

Quick assets = Current assets − Inventory − Prepaid expenses

= ₹500 lakh − ₹140 lakh − ₹20 lakh

= ₹340 lakh

Quick ratio = ₹340 lakh ÷ ₹300 lakh

= 1.13:1, approximately.

Q15. DSCR

Total debt service = Principal repayment + Interest

= ₹100 lakh + ₹20 lakh = ₹120 lakh

DSCR = Cash accruals available for debt servicing ÷ Total debt service

= ₹180 lakh ÷ ₹120 lakh

= 1.50 times

Q16. Net Interest Margin

Net interest income = ₹320 crore − ₹200 crore = ₹120 crore

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

= ₹120 crore ÷ ₹4,000 crore × 100

= 3%

Q17. DICGC Insurance Cover

The maximum cover is ₹5 lakh per depositor per insured bank, including eligible principal and interest, across branches held in the same right and capacity.

Q18. Priority Sector Lending Certificates

PSLCs help eligible banks meet priority-sector lending targets. The underlying loans remain with the originating bank; the certificates do not transfer ownership of those loans.

Q19. Modified Duration

Approximate percentage price change = −Modified duration × Change in yield × 100

= −5 × 0.005 × 100

= −2.5%

The estimated price decline is 2.5%, ignoring convexity.

Q20. Interest Coverage Ratio

Interest coverage ratio = EBIT ÷ Interest expense

= ₹36 lakh ÷ ₹9 lakh

= 4 times

A higher ratio generally indicates greater capacity to meet interest obligations from operating earnings.

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🎯 FINAL REVISION CAPSULE

🏦 Repo Rate: 5.50%

📌 Prescribed CRR: 3.00%

📊 Minimum daily CRR maintenance: 99% from 16 October 2026

💰 VRR notified amount: ₹1,50,000 crore

📈 VRR bids received: ₹1,86,666 crore

🏦 VRR amount allotted: ₹1,50,007 crore

📉 VRR cut-off rate: 5.55%

📊 VRR weighted average rate: 5.59%

💹 Government securities auction: ₹33,000 crore

📅 When-Issued trading: 27–30 October 2026

📘 CET1 Ratio: CET1 capital ÷ Risk-weighted assets × 100

📌 SMA-1: More than 30 days and up to 60 days overdue

📊 Quick Ratio: Quick assets ÷ Current liabilities

💰 DSCR: Cash accruals available for debt servicing ÷ Total debt service

📈 NIM: Net interest income ÷ Average interest-earning assets × 100

🛡️ DICGC Cover: Up to ₹5 lakh per depositor per insured bank

🏦 PSLCs: Help eligible banks meet priority-sector lending targets

📉 Modified Duration: Estimates bond-price sensitivity to changes in yield

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