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

🔥 PLATINUM SERIES 2.0 | VOL. 196

📅 12 OCTOBER 2026 | MONDAY

🎯 TARGET: IBPS PO • SBI PO • IBPS RRB

📝 20 QUESTIONS | 20 MARKS

⏱️ TIME: 18 MINUTES

❌ NEGATIVE MARKING: 0.25 PER WRONG ANSWER

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🔥 SECTION A — INTELLIGENCE TEST

Q1. A cheque is presented through the Cheque Truncation System (CTS). A discrepancy is detected between the cheque image, cheque particulars and the presented data. What is the most appropriate response:

A. Increase the branch's deposit mobilisation target

B. Classify the transaction as priority sector lending

C. Apply prescribed verification and exception-handling controls before deciding whether to process the cheque

D. Eliminate verification because CTS is an electronic system

E. Increase the bank's capital adequacy ratio

Q2. A bank's Tier 1 capital is ₹4,000 crore, and its total leverage exposure measure is ₹80,000 crore. What is its leverage ratio, assuming the figures are calculated under the applicable Basel framework:

A. 5%

B. 4%

C. 8%

D. 10%

E. 20%

Q3. A depositor maintains a savings account with an eligible balance of ₹2.40 lakh and a fixed deposit of ₹3.60 lakh, including accrued interest. Both deposits are held in the same insured bank, in the same right and capacity. Assuming both are eligible for insurance, what amount is covered by DICGC:

A. ₹2.40 lakh

B. ₹3.60 lakh

C. ₹6.00 lakh

D. ₹4.00 lakh

E. ₹5.00 lakh

Q4. A bank's operating profit improves, but its net interest margin declines. During the same period, its average interest-earning assets expand substantially. Which explanation is most consistent with these facts:

A. Operating profit and net interest margin must always move in the same direction

B. Net interest income may have grown more slowly than average interest-earning assets, reducing the margin despite improved operating profit

C. A decline in net interest margin proves that interest income has become zero

D. Net interest margin measures only fee income and treasury profits

E. Expansion of interest-earning assets automatically eliminates interest-rate risk

Q5. A borrower has a working-capital limit of ₹10 crore. The latest eligible stock and receivables, after applying the stipulated margin and other adjustments, support drawing power of ₹7.50 crore. The borrower has utilised ₹8.20 crore. Assuming no separate contractual excess limit, what is the most appropriate credit-control response:

A. Increase the drawing power automatically because the sanctioned limit is ₹10 crore

B. Ignore the excess because the borrower has not crossed the sanctioned limit

C. Treat the entire outstanding as irrecoverable without further assessment

D. Investigate the excess over drawing power, verify eligible security and take appropriate action under the sanction terms and applicable policy

E. Increase the borrower's limit solely on the basis of past repayment history

Q6. During KYC review, a bank discovers that the person signing documents for a company is not necessarily the individual who ultimately owns or controls it. What should the bank establish under applicable customer due-diligence requirements:

A. The personal assets of every company employee

B. The identity of only the authorised signatory, without further inquiry

C. The beneficial ownership or control of the customer, as required by applicable rules

D. The company's future stock-market valuation

E. The identity of every customer of the company's business

Q7. A bank's financial position deteriorates and its indicators reach the applicable thresholds under the Prompt Corrective Action framework. Which outcome best reflects the framework's purpose:

A. Regulatory intervention and prescribed corrective measures to address financial weakness

B. Automatic cancellation of all outstanding loans

C. Guaranteed restoration of profitability within one quarter

D. Immediate closure of every branch irrespective of circumstances

E. Exemption from further supervisory reporting

Q8. A bank's net interest income and average interest-earning assets are measured over two equal-duration periods using the same calculation basis.

In Period 1, net interest income is ₹200 crore and average interest-earning assets are ₹5,000 crore.

In Period 2, net interest income is ₹225 crore and average interest-earning assets are ₹6,000 crore.

Which conclusion is correct:

A. NIM rises from 4.0% to 4.5%

B. NIM remains unchanged at 4.0%

C. NIM falls from 5.0% to 3.75%

D. NIM rises from 3.75% to 4.0%

E. NIM falls from 4.0% to 3.75%, despite higher net interest income

Q9. A bank proposes to classify a loan under a priority sector category because the borrower operates a small business. Which assessment is most appropriate:

A. Every small-business loan automatically qualifies, regardless of applicable conditions

B. Verify the relevant category, borrower and activity eligibility, applicable limits and other RBI conditions before classification

C. Classification depends exclusively on whether the loan is secured

D. Any loan from a rural branch automatically qualifies

E. Classification is determined exclusively by the interest rate charged

Q10. A bank's eligible regulatory capital is ₹1,500 crore, and its risk-weighted assets are ₹12,500 crore. If eligible regulatory capital increases by ₹100 crore while risk-weighted assets remain unchanged, what will the revised capital adequacy ratio be:

A. 10.0%

B. 11.2%

C. 12.0%

D. 12.8%

E. 13.5%

Q11. A customer disputes an electronic transaction. The bank's records show successful authentication, but the customer claims that a fraudster obtained the credentials through deception. Which conclusion is most appropriate:

A. Successful authentication alone does not conclusively determine liability; applicable RBI rules, reporting timelines, transaction circumstances and customer negligence must be assessed

B. The customer must always bear the entire loss once authentication succeeds

C. The bank must automatically reimburse every disputed transaction without investigation

D. The customer's occupation determines liability

E. The transaction should be excluded from fraud monitoring if the account had sufficient funds

Q12. A bank's liquidity position appears comfortable over the next 30 days, but a large proportion of its funding is short-term while its assets have much longer maturities. Which risk deserves particular attention:

A. Cheque truncation risk alone

B. Deposit insurance risk alone

C. Structural funding risk and the stability of available funding over the relevant time horizon

D. The risk of every deposit becoming a non-performing asset

E. The automatic conversion of long-term assets into cash at book value

Q13. A bank transfers eligible loan receivables to a special-purpose entity, which issues securities supported by the underlying cash flows. Investors purchase those securities. Which interpretation is most accurate:

A. The underlying borrowers are automatically released from repayment obligations

B. The transaction guarantees that the underlying loans cannot default

C. The bank has converted all loan receivables into regulatory capital automatically

D. The securities represent ordinary equity shares in every underlying borrower

E. The transaction is a form of securitisation; its risk-transfer and accounting or regulatory treatment depend on applicable conditions

Q14. A term-loan instalment remains unpaid for 91 days. Assuming the account is subject to the standard RBI term-loan asset-classification rules and no applicable exception changes the result, which classification ordinarily follows:

A. SMA-0

B. SMA-1

C. Standard asset solely because the borrower has offered collateral

D. Non-performing asset, subject to applicable RBI norms

E. SMA-2 indefinitely, regardless of the overdue period

Q15. A bank funds long-duration fixed-rate loans mainly through short-term liabilities whose interest rates reset frequently. Market interest rates rise. Which explanation best captures the potential banking-book risk:

A. The bank's credit risk automatically becomes zero

B. Funding costs may rise faster than asset yields, compressing net interest income and potentially reducing economic value

C. All fixed-rate loans automatically reprice immediately

D. Rising rates guarantee an increase in net interest margin

E. The bank becomes immune to liquidity risk because its loans are long-term

Q16. A company operates through multiple legal entities under common ownership. Each entity's loan is individually within the bank's internal exposure limit, but their combined exposure is substantial. What should the bank do:

A. Assess aggregate group exposure, common risk drivers, connected relationships and applicable regulatory and internal limits

B. Ignore group exposure because each company is a separate legal entity

C. Treat every group company as risk-free if one entity has a good credit rating

D. Eliminate individual borrower appraisal and assess only the group name

E. Increase all limits automatically because the entities share ownership

Q17. A bank's treasury desk has foreign-currency assets and liabilities with different currencies and maturity profiles. Which approach most effectively manages the resulting foreign exchange risk:

A. Monitor only the bank's total deposit balance

B. Assume currency movements cancel out even when exposures differ

C. Eliminate all foreign-currency transactions without assessing business requirements

D. Measure currency-wise net exposures and maturity mismatches, apply approved limits and monitor hedging effectiveness

E. Assess only the rupee value of equity capital at year-end

Q18. A bank discovers that a privileged system administrator changed critical payment-system settings outside the approved change-management process. Which evidence and control combination would best support investigation and accountability:

A. Informal verbal confirmation from the administrator alone

B. Deletion of old system records to avoid confusion

C. Tamper-resistant audit logs, privileged-access records, independent monitoring and change-approval evidence

D. Shared administrator credentials without individual attribution

E. Disabling system alerts after the first unusual change

Q19. A bank's cash-credit borrower reports rising sales, but receivables are growing faster than sales and inventory is accumulating. The borrower seeks an enhancement in its working-capital limit. What should the bank examine most closely:

A. Sales growth in isolation

B. The borrower's office location alone

C. The previous year's sanctioned limit without considering current conditions

D. The number of invoices issued, without checking collection patterns

E. Receivable ageing, inventory movement, operating-cycle assumptions, projected cash flows and repayment capacity

Q20. A bank's digital-payment volume grows sharply. Fraud attempts also rise, while the bank's existing controls rely mainly on passwords and post-transaction review. Which response best strengthens preventive and detective controls:

A. Remove transaction limits to reduce customer inconvenience

B. Apply risk-based authentication, transaction monitoring, appropriate limits, timely alerts and independent security review

C. Use one shared credential for all payment-system operators

D. Disable fraud alerts for high-volume customers

E. Rely exclusively on customer complaints after funds have been transferred

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🗝️ ANSWER KEY

Q1. C

Q2. A

Q3. E

Q4. B

Q5. D

Q6. C

Q7. A

Q8. E

Q9. B

Q10. D

Q11. A

Q12. C

Q13. E

Q14. D

Q15. B

Q16. A

Q17. D

Q18. C

Q19. E

Q20. B

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📊 PERFORMANCE BENCHMARK

🔥 18–20 → EXCELLENT

🟢 16–17 → STRONG

🟡 13–15 → REVISE

🟠 10–12 → STRENGTHEN BASICS

🔴 BELOW 10 → REBUILD FUNDAMENTALS

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💎 IBR PREMIUM — 90 DAYS OF UNLIMITED MOCK TESTS

🎯 IBPS PRELIMS • PO MAINS • AFO

🏛️ DCCB • PACS • JAIIB • CAIIB

✅ Exam-oriented mock tests

✅ Application-based questions

✅ Conceptual revision

✅ Weak-area identification and performance tracking

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INDIAN BANKING RADAR (IBR)