Are you appearing for the IIBF MSME Exam 2026? In this guide, we cover the 190 most important questions. This comprehensive mock test is specifically designed for the IIBF Certificate Course on MSME to help you master the concepts quickly.
Revised MSME Classification (Effective 2025-26)
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✅ General Practice
Q1As per the revised classification criteria announced in the Union Budget 2025 (effective April 1, 2025), which of the following correctly defines a "Small Enterprise" in the MSME sector?Q2With reference to the revised MSME Classification Limits effective from April 2025, consider the following statements regarding a Medium Enterprise:Q3Scenario: "GreenPack Solutions," a packaging firm, has the following financial data for the year ending March 2026:Q4Scenario: "TechSol Pvt Ltd" was classified as a 'Micro' enterprise in 2024. In the financial year ending March 2025, its turnover increased to Rupees 8 crore, and its investment in equipment remained at Rupees 2 crore.Q5Scenario: "GreenPack Solutions" has an investment in plant and machinery of ₹18 crore and an annual turnover of ₹85 crore.Q6Scenario: TechSol Private Limited has an Investment in Plant and Machinery of 18 Crore rupees and an Annual Turnover of 80 Crore rupees. Based on the revised MSME classification criteria effective April 1, 2025, how will this company be classified?Q7Regarding the "Composite Criteria" for MSME classification used in 2026, which of the following statements is INCORRECT?Q8The Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) facilitates collateral-free loans. As of the current guidelines (2025-26), what is the maximum loan amount per borrower that can be covered under this guarantee scheme?Q9Regarding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, as per the enhanced guidelines effective April 1, 2025, consider the following statements:Q10An MSME borrower has a credit facility covered under the Credit Guarantee Scheme (CGS-I) of CGTMSE. The account turns NPA. Based on the guidelines updated as of April 1, 2025, what is the maximum guarantee cover limit available per borrower?Q11Following the Union Budget 2025 announcement, the maximum guarantee coverage ceiling under the Credit Guarantee Scheme for Micro and Small Enterprises (CGTMSE) was enhanced effective April 1, 2025. What is the new maximum guarantee limit per borrower?Q12Regarding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme as of February 2026, which of the following statements is INCORRECT?Q13Regarding the Credit Guarantee Fund Trust for Micro and Small Enterprises (CGTMSE) scheme, identify the INCORRECT statement:Q14Consider the following statements regarding the Hybrid Security model under the CGTMSE scheme:Q15As per the RBI Priority Sector Lending (PSL) guidelines (updated and applicable in 2026), which of the following statements regarding the targets for Domestic Commercial Banks is INCORRECT?Q16Under the Priority Sector Lending (PSL) norms prescribed by the RBI, domestic commercial banks are required to lend 40% of their Adjusted Net Bank Credit (ANBC) to priority sectors. Within this, what is the specific sub-target mandated exclusively for Micro Enterprises?Q17Under the Reserve Bank of India’s Priority Sector Lending (PSL) guidelines (Master Directions updated 2025), what is the mandatory sub-target for lending to Micro Enterprises for Domestic Commercial Banks?Q18Consider the following statements regarding Priority Sector Lending (PSL) targets for MSMEs:Q19Under the "Public Procurement Policy for Micro and Small Enterprises (MSEs) Order, 2012" (as amended), every Central Ministry, Department, or PSU is mandated to procure a minimum of 25% of their total annual purchases from MSEs. Within this 25% limit, what is the specific sub-target reserved exclusively for MSEs owned by Women Entrepreneurs?Q20Regarding the "Prime Minister’s Employment Generation Programme" (PMEGP) guidelines effective in FY 2026, which of the following statements is NOT correct?Q21Consider the following statements regarding the rate of subsidy (Margin Money) provided under the Prime Minister’s Employment Generation Programme (PMEGP) for different categories of beneficiaries:Q22Consider the following statements regarding the Khadi and Village Industries Commission (KVIC):Q23Regarding the "Framework for Revival and Rehabilitation of MSMEs" (directed by RBI), consider the following statements about the Special Mention Account (SMA) classification for identifying incipient stress:Q24Under the "Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises" issued by the RBI, banks must identify incipient stress in MSME accounts. Which of the following correctly defines the SMA-1 (Special Mention Account-1) category?Q25Scenario: "Delta Textiles," a Micro Enterprise, is facing a severe cash crunch. Their loan account with "Bank X" has been overdue for 65 days. The bank wants to classify the account under the stress framework.Q26Scenario: An SME borrower's loan account has its Principal/Interest overdue for 65 days.Q27In the context of the "Framework for Revival and Rehabilitation of Micro, Small and Medium Enterprises," banks are required to identify incipient sickness. Which specific account classification triggers this identification?Q28When a bank identifies an MSME account as SMA-2, it must form a Committee to decide on a Corrective Action Plan (CAP). For a borrower with loans from a single bank, who constitutes this Committee?Q29Scenario: A bank reviews an SME Cash Credit account. The borrower has not submitted stock statements for 7 months. Consequently, the "Drawing Power" (DP) has not been updated or renewed for over 180 days.Q30According to the Reserve Bank of India’s prudential norms for asset classification, at what point is an MSME loan account classified as a Non-Performing Asset (NPA) based on the "overdue" period?Q31Scenario: An MSME borrower's loan account with a scheduled commercial bank has the following status as of March 31, 2026: The Due Date was January 1, 2026, and Principal and interest remain unpaid for 95 days. The bank classifies it as a Non-Performing Asset (NPA). The borrower claims that under the "Special MSME Relief," the NPA recognition period is 180 days. Is the borrower correct?Q32Under the "Turnover Method" of assessment recommended by the Nayak Committee (and mandated by RBI for MSE units requiring limits up to ₹5 crore), what is the minimum calculated Working Capital Fund Based Limit provided by the bank?Q33Scenario: "Apex Traders" is assessed using the Nayak Committee Turnover Method. Their projected annual turnover is ₹400 Lakh.Q34Scenario: A bank is assessing a loan for a Micro Enterprise. The branch manager decides to use the "MPBF Method II" (Tandon Norms) instead of the "Turnover Method" for a loan requirement of ₹15 Lakh.Q35With reference to the "Nayak Committee" (1991-92) recommendations for the SSI/MSME sector, consider the following statements:Q36Scenario: "Alpha Corp," a public limited company manufacturing auto parts, reported an annual turnover of Rupees 300 Crore in its audited balance sheet for the year ending March 31, 2025.Q37As per the Ministry of MSME notification and the subsequent amendments effective from 2025, the mandatory turnover threshold for companies to onboard the Trade Receivables Discounting System (TReDS) platform was revised. What is the new annual turnover limit above which companies are legally required to register on TReDS?Q38The Trade Receivables Discounting System (TReDS) is an electronic platform to facilitate the financing of trade receivables. Which of the following statements regarding TReDS is INCORRECT?Q39Regarding the "TReDS" (Trade Receivables Discounting System) platform, identify the INCORRECT statement:Q40The Trade Receivables Discounting System (TReDS) is a digital platform to solve the liquidity crunch of MSMEs. Which of the following entities are the mandatory participants in the TReDS ecosystem?Q41Under the Factoring Regulation (Amendment) Act, 2021, which significant change was made regarding the participation of Non-Banking Financial Companies (NBFCs) in the factoring business?Q42Consider the following regarding the "Delayed Payments" protection for MSMEs:Q43Under the MSMED Act, 2006, what is the maximum time period allowed for a buyer to make payment to a Micro or Small supplier if there is a written agreement?Q44Consider the following statements regarding the "MSME Samadhaan" portal and the "Delayed Payments" provisions under the MSMED Act, 2006:Q45Scenario: "SolarTech Solutions," a Micro Enterprise, has successfully supplied solar lamps worth Rupees 20 Lakh to a Central Public Sector Unit (PSU). The PSU accepted the goods on January 1, 2026. The contract did not specify a payment date. As of February 2026, the payment has not been made.Q46Regarding the MSME Development Act, 2006 provisions on Delayed Payments, consider the following statements:Q47Scenario: "Alpha Corp" purchased raw materials worth 5 Lakh rupees from a registered Micro Enterprise on January 1, 2026. The payment was made on April 15, 2026, which is 105 days later. According to Section 43B(h) of the Income Tax Act, what is the tax implication for Alpha Corp for the Financial Year 2025-26?Q48Which committee recommended the shift from the "Maximum Permissible Bank Finance" (MPBF) method to the "Cash Budget" system for assessing working capital requirements of large borrowers?Q49Scenario: A company has Total Current Assets (CA) of ₹1000 Lakh and Other Current Liabilities (excluding bank borrowing) of ₹400 Lakh.Q50The "Daheja Committee" (1969) is historically significant in Indian banking for introducing which fundamental concept regarding Working Capital finance?
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Page 1 of 4 (188 Total Questions)
Frequently Asked Questions
What is the passing criteria for the IIBF MSME Exam?
Candidates typically need to score at least 50 marks out of 100 to pass the IIBF Certificate Course on MSME.
What is the new definition of a Small Enterprise for the 2026 exams?
A Small Enterprise has Investment up to ₹25 Crore and Turnover up to ₹100 Crore, as per Union Budget 2025 revisions.
Is the IIBF MSME Exam syllabus updated with 2025 guidelines?
Yes, the exam covers the latest updates including the enhanced CGTMSE limit of ₹10 Crore and revised definition limits.
What is the maximum loan under the PMMY (MUDRA) Tarun Plus category?
The Tarun Plus category offers loans between ₹10 Lakh and ₹20 Lakh.
What is the mandatory TReDS registration threshold?
Companies with a turnover exceeding ₹250 Crore must register on the TReDS platform.
What is the interest rate penalty for delayed payments to MSMEs?
The buyer must pay compound interest with monthly rests at three times the Bank Rate notified by the RBI.
Does the IIBF MSME Exam cover the RAMP scheme?
Yes, the Raising and Accelerating MSME Performance (RAMP) scheme is an important topic in the syllabus.
What is the minimum default amount for MSME Pre-Pack Insolvency?
The minimum default amount to initiate PPIRP is ₹10 Lakh.
Can Retail and Wholesale Traders register as MSMEs?
Yes, they can register on Udyam but are eligible primarily for Priority Sector Lending (PSL) benefits.
What is the maximum subsidy under PMEGP?
The maximum subsidy is 35% of the project cost for Special Category beneficiaries in rural areas.
What is the Udyam Assist Platform used for?
It helps Informal Micro Enterprises (IMEs) generate a registration certificate without GSTIN to avail PSL benefits.
What is the risk weight for unrated MSME exposures?
The RBI has reduced the risk weight for unrated non-retail MSME exposures to 85%.
What is the PM Vishwakarma loan interest rate?
Beneficiaries are charged a fixed concessional interest rate of 5% per annum.
What is the maximum project cost for a CFC under MSE-CDP?
The maximum eligible project cost for calculating the grant is ₹30 Crore.
What is the MSME contribution to India’s exports?
The MSME sector contributes approximately 45% to 48% of India’s total exports.
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