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

🔥 PLATINUM SERIES 2.0 | VOL. 206

📅 THURSDAY, 22 OCTOBER 2026

🎯 TARGET: IBPS PO • Banking Officers • Banking Aspirants

📝 20 MCQs | 20 MARKS | 20 MINUTES

⚠️ Negative marking: 0.25 mark for each incorrect answer.

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SECTION 1 — ADVANCED MOCK TEST

PART A — CURRENT BANKING & REGULATORY INTELLIGENCE

Q1. The RBI's Small Finance Banks (Miscellaneous) Amendment Directions, 2026, dated 19 October 2026, deleted which provision from the 2025 Directions:

A. Minimum savings deposit balance

B. Priority-sector lending targets

C. Limits for non-option derivative contracts

D. Deposit insurance coverage

E. Branch authorisation requirements

Q2. The RBI's Commercial Banks (Miscellaneous) Second Amendment Directions, 2026, dated 19 October 2026, were issued under which principal statutory provision:

A. Section 35A of the Banking Regulation Act, 1949

B. Section 45 of the Insurance Act, 1938

C. Section 11 of the SEBI Act, 1992

D. Section 42 of the RBI Act, 1934, exclusively

E. Section 10 of the SARFAESI Act, 2002

Q3. The RBI's circular dated 19 October 2026 under Section 51A of the Unlawful Activities (Prevention) Act, 1967, concerned amendments to entries in which sanctions list:

A. India's list of scheduled commercial banks

B. SEBI's list of registered intermediaries

C. The list of authorised foreign-exchange dealers

D. The list of recognised stock exchanges

E. The UN Security Council's ISIL (Da'esh) and Al-Qaida sanctions list

Q4. The RBI's Credit Valuation Adjustment (CVA) Framework Directions, 2026, primarily address which risk:

A. Risk arising exclusively from fluctuations in agricultural prices

B. The effect of counterparty credit risk on the valuation of derivatives

C. Risk arising from currency-note shortages

D. Risk of deposit withdrawals covered by deposit insurance

E. Risk arising exclusively from changes in employee costs

Q5. Under the RBI's October 2026 Foreign Exchange Risk Reserve (FERR) framework, the prescribed reserve for covered INR derivative contracts above the specified threshold is:

A. 5% of the notional amount

B. 10% of the notional amount

C. 15% of the notional amount

D. 20% of the INR equivalent of the notional amount

E. 100% of the notional amount

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PART B — ADVANCED BANKING CONCEPTS & APPLICATION

Q6. A bank observes that the Weighted Average Call Rate (WACR) is persistently above the policy repo rate. What is the most appropriate interpretation:

A. Overnight interbank funding conditions may be tight relative to the policy rate

B. All bank deposits have automatically become fixed-rate deposits

C. The RBI has abolished the Cash Reserve Ratio

D. Government securities have ceased to trade

E. Banks are prohibited from lending overnight

Q7. A Qualified Central Counterparty (QCCP) primarily performs which function in financial markets:

A. Issues currency notes to commercial banks

B. Provides deposit insurance to bank customers

C. Clears and settles eligible financial transactions while managing counterparty exposures

D. Determines the RBI policy repo rate

E. Sanctions agricultural subsidies

Q8. Which set correctly identifies the standard maturities of Indian Treasury bills:

A. 30, 60 and 90 days

B. 60, 120 and 240 days

C. 90, 180 and 360 days

D. 100, 200 and 400 days

E. 91, 182 and 364 days

Q9. Under the Cash Reserve Ratio (CRR) requirement, a scheduled commercial bank must maintain the prescribed reserve as:

A. Equity shares held in its investment portfolio

B. Cash balances with the RBI

C. Loans granted to priority-sector borrowers

D. Gold held exclusively in its own vaults

E. Government securities held with a stock exchange

Q10. Which of the following is generally eligible to count towards the Statutory Liquidity Ratio (SLR), subject to applicable RBI conditions:

A. Unsecured personal loans

B. Shares of any private company

C. Office furniture and equipment

D. Eligible government and other approved securities

E. Unbilled trade receivables

Q11. A bank has substantial short-term deposits but a large portfolio of long-term loans. Which function most directly helps it manage the resulting maturity mismatch and funding risk:

A. Customer Relationship Management

B. Know Your Customer verification alone

C. Asset-Liability Management (ALM)

D. Deposit insurance administration

E. Currency-note sorting

Q12. A bank's CASA ratio increases while its total deposits remain broadly unchanged. CASA refers to:

A. Current-account and savings-account deposits

B. Capital adequacy and statutory assets

C. Credit appraisal and security assessment

D. Cash reserves and sovereign assets

E. Current advances and secured assets

Q13. Net Interest Margin (NIM) is broadly measured as:

A. Gross NPAs divided by total advances

B. Total deposits divided by total branches

C. Capital divided by employee expenses

D. Operating expenses divided by fee income

E. Net interest income relative to average interest-earning assets

Q14. A lender wants to check whether a property offered as collateral has already been used to create a registered security interest in favour of another lender. Which institution's records are particularly relevant:

A. Deposit Insurance and Credit Guarantee Corporation (DICGC)

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

C. Securities and Exchange Board of India (SEBI)

D. Pension Fund Regulatory and Development Authority (PFRDA)

E. Insurance Regulatory and Development Authority of India (IRDAI)

Q15. Why are risk-weighted assets (RWAs) used in bank capital adequacy calculations:

A. To measure only the cash held at branches

B. To determine the number of customer accounts

C. To calculate the face value of currency notes

D. To reflect the regulatory risk characteristics of exposures when calculating capital requirements

E. To replace credit appraisal and internal risk management

Q16. Under the Prompt Corrective Action (PCA) framework, a bank may face supervisory corrective measures when specified financial indicators deteriorate. Which combination is most relevant:

A. Number of branches, ATMs and debit cards alone

B. Employee attendance and operating hours alone

C. Capital adequacy, asset quality and leverage

D. Number of savings accounts alone

E. Number of shareholders alone

Q17. A borrower's account shows repeated payment delays, falling turnover and deteriorating financial performance. Which mechanism should help the bank identify the emerging stress at an early stage:

A. Early Warning Signal (EWS) framework

B. Deposit insurance mechanism

C. Statutory Liquidity Ratio

D. Currency chest reconciliation

E. Dividend distribution policy

Q18. Which statement correctly describes the National Electronic Funds Transfer (NEFT) system:

A. It is available only during branch working hours

B. It settles transactions only once a week

C. It is restricted to transfers above ₹2 lakh

D. It is used only for interbank cash withdrawals

E. It operates 24×7, including holidays, with transactions processed in half-hourly batches

Q19. Under the standard RBI framework, the minimum amount for a customer transaction through Real Time Gross Settlement (RTGS) is:

A. ₹10,000

B. ₹2 lakh

C. ₹50,000

D. ₹1 lakh

E. No minimum amount

Q20. A farmer needs a flexible credit facility to meet eligible cultivation and specified allied-activity expenses. Which scheme is most directly designed for this purpose:

A. PMJDY

B. PMAY

C. Atal Pension Yojana

D. Kisan Credit Card (KCC) scheme

E. Stand-Up India exclusively for large corporations

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SECTION 2 — ANSWER KEY

Q1. C

Q2. A

Q3. E

Q4. B

Q5. D

Q6. A

Q7. C

Q8. E

Q9. B

Q10. D

Q11. C

Q12. A

Q13. E

Q14. B

Q15. D

Q16. C

Q17. A

Q18. E

Q19. B

Q20. D

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SECTION 3 — QUICK EXPLANATIONS

Q1. C — Limits for non-option derivative contracts

The RBI's amendment dated 19 October 2026 deleted Section C of Chapter IV, concerning limits for non-option derivative contracts, from the Small Finance Banks (Miscellaneous) Directions, 2025.

Q2. A — Section 35A

The RBI invoked Section 35A of the Banking Regulation Act, 1949, among the enabling provisions, for the Commercial Banks amendment. The deleted section concerned limits for non-option derivative contracts.

Q3. E — UN Security Council sanctions list

The circular updated three entries in the UN Security Council's ISIL (Da'esh) and Al-Qaida sanctions list. Regulated entities must follow the applicable UAPA and RBI KYC directions.

Q4. B — Counterparty credit risk

CVA reflects the effect of counterparty credit risk on the valuation of derivatives and certain other financial transactions.

Q5. D — 20% of the INR-equivalent notional amount

The FERR framework prescribes a cash reserve for covered INR derivative transactions exceeding the specified threshold. Applicability depends on the transaction and the relevant RBI directions.

Q6. A — Tight overnight funding conditions

WACR is the operating target for monetary policy. A sustained increase above the repo rate can indicate pressure in overnight interbank funding markets.

Q7. C — Clearing and settlement

A QCCP clears and settles eligible transactions and manages counterparty exposures under prescribed standards. Central clearing does not eliminate every financial or operational risk.

Q8. E — 91, 182 and 364 days

These are the standard maturities of Indian Treasury bills. They are short-term government securities generally issued at a discount and redeemed at face value.

Q9. B — Cash balances with RBI

CRR is the prescribed proportion of a bank's net demand and time liabilities maintained as cash balances with the RBI.

Q10. D — Eligible government and approved securities

SLR requires banks to maintain prescribed liquid assets. Eligibility and valuation must follow the applicable RBI rules.

Q11. C — Asset-Liability Management

ALM helps banks manage liquidity, funding, interest-rate sensitivity and maturity mismatches between assets and liabilities.

Q12. A — Current-account and savings-account deposits

CASA represents current and savings deposits. A higher CASA ratio may reduce the average cost of funds, depending on deposit pricing and the composition of liabilities.

Q13. E — Net interest income relative to average interest-earning assets

NIM is a key measure of a bank's interest-based profitability.

Q14. B — CERSAI

CERSAI maintains records of security interests and helps lenders identify potential multiple financing and collateral-related fraud.

Q15. D — Risk-sensitive capital calculation

RWAs assign regulatory risk weights to exposures. Capital adequacy ratios compare eligible capital with the relevant risk-weighted exposure base.

Q16. C — Capital adequacy, asset quality and leverage

The PCA framework enables supervisory corrective action when specified financial indicators breach applicable thresholds.

Q17. A — Early Warning Signal framework

EWS helps identify emerging borrower stress through indicators such as repeated delays, deteriorating turnover and other warning signs.

Q18. E — NEFT operates 24×7

NEFT is available round the clock, including holidays. Transactions are processed in half-hourly batches.

Q19. B — ₹2 lakh

RTGS is intended for large-value, real-time gross settlement transactions. The standard minimum amount is ₹2 lakh, with no RBI-prescribed maximum.

Q20. D — Kisan Credit Card

KCC provides eligible farmers with a convenient and flexible credit mechanism for cultivation and specified allied activities, subject to scheme conditions.

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SECTION 4 — HIGH-VALUE EXAM TRAPS

🔹 Derivative regulation: Read the exact scope of the amended provision; deletion of a specified limit does not mean that every derivative-related control has disappeared.

🔹 CVA vs capital adequacy: CVA concerns counterparty credit risk in valuation; capital adequacy concerns a bank's capital relative to its risk exposures.

🔹 FERR vs CRR: FERR is a specific foreign-exchange derivative-related reserve requirement; CRR is a general banking reserve requirement.

🔹 WACR vs repo rate: WACR reflects overnight interbank market conditions; the repo rate is the RBI's policy rate.

🔹 Treasury bills: Standard maturities are 91, 182 and 364 days—not 90, 180 and 360 days.

🔹 CRR vs SLR: CRR is maintained as cash balances with RBI; SLR comprises prescribed eligible liquid assets.

🔹 CASA vs NIM: CASA describes a deposit mix; NIM measures interest-based profitability.

🔹 CERSAI: Security-interest registration helps detect potential collateral conflicts; it does not guarantee repayment.

🔹 PCA vs EWS: PCA is a supervisory corrective framework; EWS is an early-detection mechanism used in credit monitoring.

🔹 NEFT vs RTGS: NEFT uses half-hourly batches; RTGS settles transactions individually in real time.

🔹 KCC: It facilitates eligible agricultural and allied credit; it does not automatically waive outstanding loans.

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SECTION 5 — CHECK YOUR SCORE

🏆 Maximum marks: 20

18–20: Excellent — strong command of banking awareness.

15–17.75: Very good — revise the concepts missed.

12–14.75: Good foundation — strengthen regulatory and conceptual knowledge.

Below 12: Revisit the explanations and attempt the mock again.

Scoring formula: Correct answers × 1 − incorrect answers × 0.25.

Unattempted questions carry zero marks.

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SECTION 6 — 60-SECOND RECALL

📌 19 October RBI amendments: Small Finance Banks and Commercial Banks

📌 Deleted provision: Limits for non-option derivative contracts

📌 UAPA Section 51A: Implementation of specified UN sanctions

📌 CVA: Counterparty credit risk in valuation

📌 FERR: Reserve requirement for covered INR derivative contracts

📌 WACR: Operating target for monetary policy

📌 Treasury bills: 91, 182 and 364 days

📌 CRR: Cash balances with RBI

📌 SLR: Prescribed eligible liquid assets

📌 ALM: Liquidity and maturity-mismatch management

📌 CASA: Current and savings deposits

📌 NIM: Net interest income relative to average interest-earning assets

📌 CERSAI: Security-interest registration

📌 PCA: Supervisory corrective framework

📌 EWS: Early identification of credit stress

📌 NEFT: 24×7; half-hourly batches

📌 RTGS: Minimum ₹2 lakh

📌 KCC: Eligible agricultural and allied credit

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