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SBI CBO BANKING KNOWLEDGE – Top 200 Questions for SBI CBO 2026 EXAM ⏳ Updated: Feb 2026 | 🎯 200 MCQs
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The Reserve Bank of India issued a notification on January 17, 2026, introducing the new Integrated Ombudsman Scheme. According to this notification, on which date will the new RB-IOS, 2026 officially come into effect, replacing the 2021 framework?
Explanation:
Correct: B
Correct Answer is July 1, 2026. While the notification was released in January 2026, the Reserve Bank of India specified a transition period for Regulated Entities. The scheme becomes operationally effective from July 1, 2026. This aligns with the beginning of the second quarter of the financial year. Until that date, the existing provisions of the 2021 Scheme remain legally active, though banks are expected to prepare for the new compensation limits immediately.
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The Pradhan Mantri Mudra Yojana (PMMY) classifies loans into specific categories based on the stage of growth of the beneficiary unit.
Which of the following correctly identifies the loan limit for the newly introduced "Tarun Plus" category?
Which of the following correctly identifies the loan limit for the newly introduced "Tarun Plus" category?
Explanation:
Correct: B
The Tarun Plus category covers loans above ₹10 Lakh and up to ₹20 Lakh.
MUDRA Classification.
1. Shishu: Up to ₹50,000. 2. Kishore: Above ₹50,000 and up to ₹5 Lakh. 3. Tarun: Above ₹5 Lakh and up to ₹10 Lakh. 4. Tarun Plus: Above ₹10 Lakh and up to ₹20 Lakh. Historical Context: The "Tarun Plus" category was introduced (announced in Budget 2024-25) to support entrepreneurs who have successfully repaid their previous Tarun loans and need further capital for expansion.
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Under the RBI KYC Directions, the periodicity for "Periodic Updation" (Re-KYC) of customer identification data varies by risk category.
Which of the following combinations is CORRECT?
Which of the following combinations is CORRECT?
Explanation:
Correct: B
The Rule: The mandatory cycles for updating KYC documents are: 1. High Risk: At least once in every 2 years. 2. Medium Risk: At least once in every 8 years. 3. Low Risk: At least once in every 10 years. Exam Memory Tip: Remember the sequence "2-8-10". This applies even if there is no change in the customer's status, though Low Risk customers have relaxed "self-declaration" norms if their details haven't changed.
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As per the latest amendments to the Master Direction on KYC, identifying a customer as a "Money Mule" requires banks to check for specific "Red Flag Indicators."
Which of the following is considered a high-risk indicator for a potential mule account?
Which of the following is considered a high-risk indicator for a potential mule account?
Explanation:
Correct: B
Sudden high velocity followed by immediate withdrawal. Concept: Mule Indicators. The Pattern: Mules are used to "pass-through" stolen money. The money enters and leaves instantly (to prevent the bank from freezing it). Red Flag: A previously low-activity account suddenly receiving large sums that are immediately siphoned off (via ATM cash out or further transfer), leaving the balance at zero or minimum, is the classic "Mule" signature.
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According to the Reserve Bank of India's harmonization of Turn Around Time (TAT) framework,
what is the mandatory timeline for a bank to pro-actively reverse a failed ATM transaction where the account is debited but cash is not dispensed?
what is the mandatory timeline for a bank to pro-actively reverse a failed ATM transaction where the account is debited but cash is not dispensed?
Explanation:
Correct: C
The correct timeline is T plus 5 calendar days. Under the RBI circular on Harmonisation of Turn Around Time (TAT) and customer compensation for failed transactions (2019), if a customer's account is debited but cash is not dispensed from an ATM (including micro-ATMs), the card-issuing bank must pro-actively reverse the amount within a maximum of T plus 5 calendar days. Here, 'T' stands for the day of the transaction. If the reversal is done within this period, no compensation is payable.
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As of February 2026, what are the maximum per-transaction limit and the maximum total balance limit allowed in a "UPI Lite" on-device wallet?
Explanation:
Correct: B
Transaction Limit: ₹1,000; Wallet Balance: ₹5,000. Historical Context: Originally, the limits were ₹500 per transaction and ₹2,000 total balance. Regulatory Update: To encourage wider adoption of small-value digital payments, the RBI enhanced these limits (announced in late 2024/2025). This allows users to pay for slightly larger daily expenses (like groceries or fuel) without entering a PIN, while keeping the risk capped at ₹5,000.
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Scenario: Mr. Sharma is discharged from a hospital in Mumbai on February 10, 2026. His final bill is ₹4,20,000. He attempts to pay the full amount via a single UPI transaction to the hospital's verified merchant QR code. Based on current regulations, will this transaction succeed?
Explanation:
Correct: C
Concept: Application of Enhanced Limits (Category Code 5 Lakh). Rule: As of Dec 2023 (and in force in 2026), the RBI raised the UPI transaction limit to ₹5 Lakh specifically for payments to Hospitals and Educational Institutions. Condition: The merchant (Hospital) must be classified under the correct Merchant Category Code (MCC). If the merchant is "verified" under this category, a single transaction of ₹4.2 Lakh is permissible. Contrast: If this were a payment to a jewelry store (standard merchant), it would fail (limit ₹1 Lakh).
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Under the "Simplified Procedure" for settling claims without a nomination, up to what amount can a Commercial Bank settle a claim without insisting on a Succession Certificate?
Explanation:
Correct: D
Correct Answer: D Concept: Simplified Settlement Thresholds (2025). To reduce legal hardship, RBI standardized the thresholds for settling claims based on a simple Indemnity Bond (without court orders): Commercial Banks: Rupees 15 Lakh. Co-operative Banks: Rupees 5 Lakh. Banks may set a higher limit at their discretion, but they cannot set a lower one for this simplified process.
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As per the revised MSME classification norms (effective from April 1, 2025),
which of the following criteria correctly defines a "Micro Enterprise"?
Investment in Plant and Machinery or Equipment does not exceed ₹2.5 Crore.
Investment in Plant and Machinery or Equipment does not exceed ₹1 Crore.
Annual Turnover does not exceed ₹10 Crore.
Annual Turnover does not exceed ₹5 Crore.
Select the correct combination:
which of the following criteria correctly defines a "Micro Enterprise"?
Investment in Plant and Machinery or Equipment does not exceed ₹2.5 Crore.
Investment in Plant and Machinery or Equipment does not exceed ₹1 Crore.
Annual Turnover does not exceed ₹10 Crore.
Annual Turnover does not exceed ₹5 Crore.
Select the correct combination:
Explanation:
Correct: A
CRITICAL UPDATE (2025-26): The Union Budget 2025-26 revised the MSME limits to encourage scale and combat inflation. Old Limit (Pre-2025): Investment < ₹1 Cr / Turnover < ₹5 Cr. New Limit (Current 2026): A Micro Enterprise is now defined as an entity where the Investment does not exceed ₹2.5 Crore AND Turnover does not exceed ₹10 Crore. (Note: Both conditions must be met concurrently).
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As per the RBI (Co-Lending Arrangements) Directions, 2025 (effective January 1, 2026),
what is the minimum percentage of the individual loan amount that the Originating Entity (NBFC) must retain on its books?
what is the minimum percentage of the individual loan amount that the Originating Entity (NBFC) must retain on its books?
Explanation:
Correct: B
CRITICAL UPDATE (Jan 2026): Old Rule (2020): Minimum retention was 20 per cent. New Rule (2025/26): To encourage the co-lending model and release capital for NBFCs, the RBI reduced the mandatory retention share to 10 per cent of the individual loan exposure. Impact: This allows NBFCs to originate more loans with the same capital base while still maintaining "skin in the game". The bank takes the remaining 90 per cent.
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As of February 2026, banks are preparing for the transition from the "Incurred Loss" model to the "Expected Credit Loss" (ECL) framework. According to the RBI's roadmap, the ECL framework is proposed to be fully implemented for all commercial banks by:
Explanation:
Correct: C
The proposed implementation date is April 1, 2027.
ECL (Expected Credit Loss) is a forward-looking provisioning model where banks estimate potential future losses rather than waiting for a default to occur.
1. Implementation Date: April 1, 2027. 2. Glide Path: Banks are allowed a transition period (up to 5 years, ending 2031) to absorb the capital impact of the initial jump in provisions. 3. Stages: Assets will be classified into Stage 1 (12-month ECL), Stage 2 (Significant risk increase), and Stage 3 (Impaired). Historical Context: This moves Indian banking to align with global IFRS 9 standards, replacing the traditional IRAC norms (90-day rule) which were criticized for being "too little, too late."
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Regarding the "Tarun Plus" loan category under the Pradhan Mantri Mudra Yojana (PMMY) as referenced in Budget 2026,
identify the INCORRECT statement.
The maximum loan limit under "Tarun Plus" is ₹20 Lakh.
It is available to any entrepreneur, including first-time borrowers (startups).
It specifically targets entrepreneurs who have successfully repaid previous loans under the "Tarun" category.
The guarantee cover for these loans is provided by the CGFMU (Credit Guarantee Fund for Micro Units).
identify the INCORRECT statement.
The maximum loan limit under "Tarun Plus" is ₹20 Lakh.
It is available to any entrepreneur, including first-time borrowers (startups).
It specifically targets entrepreneurs who have successfully repaid previous loans under the "Tarun" category.
The guarantee cover for these loans is provided by the CGFMU (Credit Guarantee Fund for Micro Units).
Explanation:
Correct: B
Statement 2 is INCORRECT. While the limit is indeed ₹20 Lakh (Statement 1 is Correct), raised from the previous ₹10 Lakh cap, it is NOT for first-time borrowers. It is strictly for existing entrepreneurs who have a track record of successfully repaying a loan under the "Tarun" (₹5 Lakh to ₹10 Lakh) category (Statement 3 is Correct). This ensures that the higher risk of ₹20 Lakh is only taken on proven borrowers. The guarantee is provided by CGFMU (Statement 4 is Correct).
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According to the RBI guidelines on Customer Liability in Unauthorized Electronic Banking Transactions (valid as of February 2026), in
which of the following scenarios does a customer have "Zero Liability"?
which of the following scenarios does a customer have "Zero Liability"?
Explanation:
Correct: C
The customer has Zero Liability in cases of third-party breach if reported within 3 working days.
"Zero Liability" means the customer bears no financial loss for a fraudulent transaction.
Under the RBI Charter of Customer Rights and the Master Circulars, Zero Liability is granted in two specific cases: 1. Contributory Fraud or Negligence by the Bank: If the fraud occurs due to a lapse on the part of the bank (e.g., employee fraud or system compromise), the customer has zero liability regardless of when they report it. 2. Third-Party Breach: If the deficiency lies neither with the bank nor the customer (e.g., a malware attack or skimming), AND the customer notifies the bank within 3 working days of receiving the alert. Historical or Related Context: If the customer reports after 3 days but within 7 days, they face "Limited Liability." If they report after 7 days, the liability is determined by the Board Approved Policy of the bank.
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Under the ambit of the Reserve Bank Integrated Ombudsman Scheme, 2026,
what is the specific asset size threshold for Non-Banking Financial Companies, also known as NBFCs, to be covered?
what is the specific asset size threshold for Non-Banking Financial Companies, also known as NBFCs, to be covered?
Explanation:
Correct: B
The threshold is Assets of Rupees 100 Crore and above. The scheme mandates that NBFCs (excluding Housing Finance Companies) with an asset size of Rupees 100 Crore or more are automatically covered. This limit has been retained to ensure that systemically important NBFCs are accountable. For Urban Cooperative Banks (UCBs), the threshold remains different, based on deposits of Rupees 50 Crore or more. Entities below these limits do not fall under the Ombudsman but are handled by the Customer Education and Protection Cell.
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As per the RBI directive on "Framework for Due Diligence and Risk Management of AePS Touchpoint Operators" (effective January 1, 2026), if an AePS Touchpoint Operator (ATO) remains inactive for a specific continuous period, the acquiring bank must perform a fresh KYC (Re-KYC) before reactivating them. What is this inactivity period?
Explanation:
Correct: B
3 months. Concept: AePS Touchpoint Operator (ATO) Monitoring. Regulatory Update (Jan 2026): To prevent "dormant" IDs from being misused by fraudsters (who often buy inactive IDs to commit transaction fraud), RBI mandated that any ATO ID that shows no activity (financial or non-financial) for 3 continuous months must be deactivated. The acquiring bank cannot simply "switch it back on." They must conduct a fresh KYC (Know Your Customer) process to verify the agent's physical presence.
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Regarding the "One Agent – One Bank" model implemented to secure the Aadhaar Enabled Payment System (AePS),
which of the following statements is INCORRECT?
which of the following statements is INCORRECT?
Explanation:
Correct: A
Option A is INCORRECT. The "One Agent - One Bank" Rule: As of the January 1, 2026 effectivity, the RBI strictly enforces exclusivity. An agent can serve only one acquiring bank at a time. The reason is to prevent "ID Hopping," where a fraudulent agent blocked by Bank A immediately switches to Bank B to continue scamming. It ensures a single bank is fully accountable for the agent's due diligence.
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As of February 2026,
which of the following pairs of Bank Type and its corresponding Total PSL Target is INCORRECT?
which of the following pairs of Bank Type and its corresponding Total PSL Target is INCORRECT?
Explanation:
Correct: C
Correction: The total PSL target for Small Finance Banks (SFBs) is 60 per cent as of February 2026, not 75 per cent. The RBI lowered this target in the revised Master Direction (2025) to provide operational breathing room to these banks. Correct Pairs: Domestic SCBs: 40 per cent. RRBs: 75 per cent. Foreign Banks: 40 per cent.
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If a bank fails to reverse a failed ATM transaction within the stipulated T plus 5 days,
what is the mandatory compensation amount payable to the customer per day of delay?
what is the mandatory compensation amount payable to the customer per day of delay?
Explanation:
Correct: B
The mandatory compensation is Rupees 100 per day. As per the RBI guidelines for authorized Payment Systems, if the bank fails to re-credit the customer's account within T plus 5 calendar days after a failed ATM transaction, it must pay the customer a compensation of Rupees 100 for every day of delay beyond the T plus 5 timeline. This compensation must be credited to the customer's account automatically (suo moto) without the customer having to claim it.
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When a Reporting Entity (RE) opens a new account for a customer, it must upload the KYC data to the Central KYC Records Registry (CKYCR).
What is the strict timeline for this upload?
What is the strict timeline for this upload?
Explanation:
Correct: C
The Deadline: The RBI Master Direction mandates that Regulated Entities must capture the KYC information and upload it to the CKYCR system within 10 days of the commencement of the relationship (account opening). Effect: Once uploaded, the customer receives a 14-digit CKYC Identifier (KIN), which can be used at other banks to avoid submitting documents again.
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With reference to the Amendment Directions dated December 29, 2025, regarding the reliance on Central KYC Records Registry (CKYCR), consider the following statements:
The Regulated Entity (RE) that uploads or updates the customer’s KYC records in CKYCR is responsible for verifying the identity and address of the customer.
An RE downloading KYC records from CKYCR is fully exempted from all Customer Due Diligence (CDD) responsibilities, including transaction monitoring.
An RE downloading records from CKYCR is not required to re-verify the identity or address of the customer, provided the records are current and valid.
Select the correct combination:
The Regulated Entity (RE) that uploads or updates the customer’s KYC records in CKYCR is responsible for verifying the identity and address of the customer.
An RE downloading KYC records from CKYCR is fully exempted from all Customer Due Diligence (CDD) responsibilities, including transaction monitoring.
An RE downloading records from CKYCR is not required to re-verify the identity or address of the customer, provided the records are current and valid.
Select the correct combination:
Explanation:
Correct: B
The Legislation: The RBI (Commercial Banks – KYC) Amendment Directions, 2025 (Dec 29, 2025) clarified the liability matrix for CKYCR. Analysis of Statements: Statement 1 is Correct: The "Explanation" added to Paragraph 65 explicitly states that the RE uploading or updating the record is responsible for the core verification of identity/address. Statement 2 is Incorrect: The downloading RE is NOT exempted from all CDD. The direction states: "The bank downloading… shall remain responsible for all aspects of CDD procedure… except verification of identity and/or address." This means they must still perform risk categorization, transaction monitoring, and other due diligence. Statement 3 is Correct: The downloading RE is relieved specifically from the burden of re-verifying the identity/address if the downloaded CKYCR data is current and compliant.
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As per the revised Three-Tier structure for Housing Loans (effective April 2025),
what is the maximum loan limit for housing loans to individuals in Tier-2 Metropolitan centers (population 10 Lakh to 50 Lakh) to be eligible for PSL classification?
what is the maximum loan limit for housing loans to individuals in Tier-2 Metropolitan centers (population 10 Lakh to 50 Lakh) to be eligible for PSL classification?
Explanation:
Correct: C
Updated Tier Structure (2026): The RBI revised the limits to account for population density and cost. Tier 1 (Mega Metros > 50L): ₹50 Lakh. Tier 2 (Metros 10L - 50L): ₹45 Lakh (Cost Ceiling ₹57 Lakh). Tier 3 (Others < 10L): ₹35 Lakh. Note: This question reflects the specific limit for standard Metros, distinct from the Mega-Metros.
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Consider the following statements regarding the Default Loss Guarantee (DLG) in Digital Lending:
Assertion
Assertion
Explanation:
Correct: A
Both statements are true, and the Reason correctly explains the Assertion.
DLG, also known as FLDG or First Loss Default Guarantee, is an arrangement where a Lending Service Provider compensates the Lender for defaults.
The Rule (A): The RBI Circular explicitly caps DLG at 5% of the loan portfolio amount. The Logic (R): Prior to this rule, Fintechs often offered 100% guarantees, effectively acting as lenders without a license. This resembled "Synthetic Securitisation," which involves transferring risk without transferring the asset.
By capping the guarantee at 5%, the RBI ensures the Regulated Entity keeps "skin in the game" for the remaining 95% of the risk. This forces them to perform rigorous underwriting instead of relying blindly on the Fintech's guarantee.
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Under the Special Mention Account (SMA) framework for early identification of stress, an account is classified as "SMA-1" when the principal or interest payment is overdue for
which of the following periods?
which of the following periods?
Explanation:
Correct: B
SMA-1 classification applies when the overdue period is between 31 and 60 days.
The Special Mention Account (SMA) framework is a preventive tool to identify incipient stress in loan accounts before they turn into NPAs (which happens at >90 days). Banks must report SMA status to the Central Repository of Information on Large Credits (CRILC).
The 3 categories are: 1. SMA-0: Principal or interest overdue between 1 and 30 days. 2. SMA-1: Principal or interest overdue between 31 and 60 days. 3. SMA-2: Principal or interest overdue between 61 and 90 days.
This granular classification forces banks to initiate corrective action plans early. If an account crosses 60 days (SMA-2), it triggers immediate resolution processes under the Prudential Framework for Resolution of Stressed Assets.
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Regarding the "Out of Order" status for Cash Credit (CC) or Overdraft (OD) facilities, consider the following conditions:
The outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days.
The outstanding balance is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days.
The outstanding balance is less than the sanctioned limit/drawing power, but credits during the previous 90 days are not enough to cover the interest debited during the same period.
Which of the above conditions classifies the account as "Out of Order"?
The outstanding balance remains continuously in excess of the sanctioned limit/drawing power for 90 days.
The outstanding balance is less than the sanctioned limit/drawing power, but there are no credits continuously for 90 days.
The outstanding balance is less than the sanctioned limit/drawing power, but credits during the previous 90 days are not enough to cover the interest debited during the same period.
Which of the above conditions classifies the account as "Out of Order"?
Explanation:
Correct: D
An account is treated as "Out of Order" if any one of the three listed conditions is met.
For revolving facilities like CC/OD, where there are no fixed repayment dates for principal, the concept of "Overdue" is replaced by "Out of Order."
Condition 1 (Limit Breach): Outstanding Balance > Sanctioned Limit OR Drawing Power for 90 days. Condition 2 (No Velocity): Balance is within limit, but NO credits (deposits) for 90 days. Condition 3 (Interest Coverage): Balance is within limit and there are credits, but the sum of credits < sum of interest debited in the previous 90-day period.
The third condition is critical; a borrower might deposit small amounts to keep the account "active," but if they aren't even covering the interest charged, the debt is effectively compounding, signaling stress.
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Under the KYC Directions, 2025, a "Beneficial Owner" (BO) is determined based on controlling ownership interest.
What is the specific ownership threshold for determining the Beneficial Owner of a Company versus a Trust?
What is the specific ownership threshold for determining the Beneficial Owner of a Company versus a Trust?
Explanation:
Correct: B
Concept: Beneficial Owner (BO) refers to the natural person(s) who ultimately own or control a juridical person. The Structure (Thresholds): 1. Company: The BO is the natural person having a controlling ownership interest of more than 10% (reduced from the earlier global standard of 25% in older years) of the shares, capital, or profits. 2. Trust: The BO includes the author, trustees, and beneficiaries with 10% or more interest in the trust, or any natural person exercising ultimate effective control. 3. Partnership / Unincorporated Association: The threshold is more than 15% of property/capital/profits. Key Nuance: Note the distinction: Companies/Trusts are pegged at the 10% mark, whereas Partnerships/Associations are at 15%.
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Regarding the enhanced compensation limits in the RB-IOS, 2026, consider the following statements:
The maximum compensation for any actual loss suffered by the complainant is capped at Rupees 30 Lakh.
The maximum compensation specifically for mental agony and harassment is capped at Rupees 3 Lakh.
Which of the statements above is or are correct?
The maximum compensation for any actual loss suffered by the complainant is capped at Rupees 30 Lakh.
The maximum compensation specifically for mental agony and harassment is capped at Rupees 3 Lakh.
Which of the statements above is or are correct?
Explanation:
Correct: C
Both statements are correct. The 2026 Scheme introduced a significant hike in compensation limits to account for inflation and higher-value digital frauds. The Limit for Actual Loss increased from Rupees 20 Lakh (in 2021) to Rupees 30 Lakh. The Limit for Mental Agony increased from Rupees 1 Lakh (in 2021) to Rupees 3 Lakh. This structure applies to all covered entities, including banks and NBFCs.
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The 2025 Directions have institutionalized the Video-Based Customer Identification Process (V-CIP).
Which of the following conditions is MANDATORY for a valid V-CIP?
The V-CIP process must be operated/triggered from the domain of the Regulated Entity (RE), not a third-party vendor's domain.
The live video interaction must include geo-tagging to ensure the customer is physically present in India.
The process can be fully automated using AI without any human intervention from the RE's side.
Which of the following conditions is MANDATORY for a valid V-CIP?
The V-CIP process must be operated/triggered from the domain of the Regulated Entity (RE), not a third-party vendor's domain.
The live video interaction must include geo-tagging to ensure the customer is physically present in India.
The process can be fully automated using AI without any human intervention from the RE's side.
Explanation:
Correct: A
The V-CIP Protocol: Statement I (Domain): Mandatory. The V-CIP application/activity log must be under the control and domain of the RE. Links to third-party domains (like Zoom/Skype hosted externally) are prohibited for the core process. Statement II (Geo-tagging): Mandatory. The RE must capture the live location (latitude/longitude) to ensure the customer is in India during the process. Statement III (Automation): Incorrect. While AI/Face Match is used for assistance, the V-CIP must involve a live audio-visual interaction with an Official of the RE. It cannot be a fully automated, human-less flow.
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What is the current annual premium payable by a subscriber for the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) for the coverage period starting June 1, 2025?
Explanation:
Correct: B
The annual premium is ₹436.
PMJJBY is a one-year renewable term life insurance scheme offering coverage for death due to any reason.
1. Premium: Revised from ₹330 to ₹436 per annum (effective since June 1, 2022). 2. Coverage Amount: ₹2 Lakh (₹2,00,000). 3. Eligibility: Individuals aged 18 to 50 years with a savings bank account. Historical Context: The premium was originally ₹330 but was hiked to ₹436 in 2022 due to a high claim ratio. This rate remains applicable for the 2025-26 cycle.
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According to the provisions of the SARFAESI Act, 2002, the measures of the Act do NOT apply if the outstanding amount of debt due to the secured creditor is less than
which of the following thresholds?
which of the following thresholds?
Explanation:
Correct: C
The provisions of the SARFAESI Act do not apply if the amount due is less than Rupees 1.00 Lakh. Statutory Reference: Section 31(h) of the SARFAESI Act states that the Act does not apply to any security interest created in financial assets for an amount not exceeding one lakh rupees. Additional Threshold: Furthermore, Section 31(j) specifies that the Act also does not apply if the remaining debt is less than 20% of the principal amount and interest. Both conditions serve to prevent the invoking of harsh enforcement measures for trivial amounts.
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As of February 2026, what are the minimum default thresholds required to initiate the Corporate Insolvency Resolution Process (CIRP) and the Pre-Packaged Insolvency Resolution Process (PPIRP), respectively?
Explanation:
Correct: B
CIRP Threshold: Under Section 4 of the IBC, the Central Government raised the minimum default threshold for initiating CIRP to Rupees 1 Crore to prevent the overburdening of Tribunals with small cases. PPIRP Threshold: The Pre-Packaged Insolvency Resolution Process (PPIRP), designed specifically for MSMEs, has a lower default threshold of Rupees 10 Lakhs. Rationale: The lower limit for PPIRP ensures that smaller MSMEs can access the resolution framework, while the higher CIRP limit filters out trivial cases for larger corporates.
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Under the Priority Sector Lending norms applicable in 2026, loans to individuals for educational purposes, including vocational courses, are eligible for priority sector classification up to what limit?
Explanation:
Correct: C
The Limit: The eligible limit for Education Loans under Priority Sector Lending remains fixed at ₹25 Lakh per borrower. The eligible limit for Education Loans under Priority Sector Lending was increased from ₹20 Lakh to ₹25 Lakh in the Revised Guidelines (March 2025) to account for rising education costs. Scope: This limit applies regardless of whether the course is pursued in India or abroad. Any amount sanctioned above ₹25 Lakh would not be classified as Priority Sector (or the excess would be disqualified depending on specific reporting formats, but ₹25 Lakh is the classification cap).
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Regarding the Priority Sector Lending limit for Renewable Energy projects,
which of the following statements correctly describes the borrower limits as of February 2026?
which of the following statements correctly describes the borrower limits as of February 2026?
Explanation:
Correct: A
Renewable Energy Limits: 1. Corporate/Project Limit: Loans to borrowers for purposes like solar based power generators, biomass-based power generators, wind mills, and micro-hydel plants are eligible for Priority Sector Classification up to ₹35 Crore. 2. Individual Household Limit: Loans to individuals (e.g., for rooftop solar installation) are capped at ₹10 Lakh per borrower. The loan limit for Renewable Energy borrowers (solar generators, biomass, etc.) was enhanced to ₹35 Crore (up from ₹30 Crore) in the 2025 guidelines. The individual household limit remains ₹10 Lakh.
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Under the Reserve Bank of India's "Positive Pay System" (PPS) directives, banks are mandatorily required to enable this facility for all account holders issuing cheques for amounts of:
Explanation:
Correct: A
The Positive Pay System (PPS) is a fraud prevention tool where the issuer re-confirms key details of the cheque (date, beneficiary, amount) to the bank electronically. The RBI directive mandates that banks must provide this facility to all account holders for cheques of 50,000 Rupees and above. While the facility is mandatory for banks to offer at this threshold, it is generally discretionary for the customer to use it, although banks may consider making it mandatory for cheques of 5 Lakh Rupees and above to limit liability.
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Effective January 3, 2026, the Reserve Bank of India implemented "Phase 2" of the Continuous Clearing System for cheques.
What is the mandatory "Confirmation Window" for drawee banks under this specific phase?
What is the mandatory "Confirmation Window" for drawee banks under this specific phase?
Explanation:
Correct: B
Under the "Continuous Clearing" framework (Phase 2) which became active on January 3, 2026, the Reserve Bank of India moved away from fixed batch processing to a near-real-time model. For cheques presented during the business window (10:00 AM to 4:00 PM), the drawee bank is mandated to confirm payment or return the instrument within T plus 3 clear hours (where T is the time of presentation). If the drawee bank fails to provide a status update within this specific 3-hour window, the system triggers a "Deemed Approval," automatically settling the funds in favor of the presenting bank to ensure faster credit to the beneficiary.
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The Reserve Bank of India (RBI), supported by Budget 2026, is rolling out the "Unified Lending Interface" (ULI).
What is the primary function of the ULI platform?
What is the primary function of the ULI platform?
Explanation:
Correct: B
ULI enables "Frictionless Credit" via seamless data flow. Often called the "UPI for Credit," ULI is a digital platform designed to speed up loan approvals, especially for rural borrowers. Currently, a farmer needs to physically fetch land records to get a loan. ULI connects the Lender (Bank) directly to the Data Provider (State Land Record Database, Satellite Data) via standard APIs. It does not replace the Account Aggregator (which handles financial data like bank statements). ULI handles non-financial data (land, weather, satellite info) critical for agri/MSME credit.
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Effective from October 1, 2022, a significant eligibility amendment was made to the Atal Pension Yojana (APY). Who among the following is specifically excluded from joining the scheme after this date?
Explanation:
Correct: C
Income Tax Payers are excluded.
The "Taxpayer Exclusion Rule" was introduced to better target the subsidy.
1. The Rule: Any citizen who is or has been an income tax payer (as per the Income Tax Act, 1961) is not eligible to join APY from October 1, 2022. 2. Consequence: If an income tax payer joins APY on or after this date, the account will be closed, and the accumulated pension wealth will be returned to the subscriber. 3. Rationale: The scheme is intended for the poor and underprivileged sections of society, not for those who are already economically well-off.
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Regarding the consequences faced by a borrower classified as a "Wilful Defaulter,"
which of the following statements is INCORRECT?
which of the following statements is INCORRECT?
Explanation:
Correct: D
Statement D is INCORRECT. Wilful Defaulters are liable to be removed from the boards of other companies.
The "Fit and Proper" criteria for directorships are violated by Wilful Default status.
1. Section 29A of IBC: They are barred from being resolution applicants (cannot buy back their own firm). 2. Board Membership: Lenders must mandate the removal of such persons from the boards of any other company seeking credit. 3. Credit Freeze: No new funds. 4. Cooling Period: The 5-year ban on new ventures (Option B) applies after they pay up/clear the default, acting as a lingering penalty.
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According to the RBI (Project Finance) Directions, 2025, a project loan for an Infrastructure project can retain its "Standard Asset" classification if the DCCO is deferred due to reasons beyond the promoter's control (exogenous reasons), provided the deferment does not exceed:
Explanation:
Correct: C
For Infrastructure projects, the deferment can be up to 3 years from the original DCCO while retaining Standard status.
This is a regulatory forbearance to account for the complex delays (environmental clearances, land acquisition) inherent in infrastructure projects.
1. Infrastructure Projects: Max deferment of 3 years. 2. Non-Infrastructure Projects (including CRE): Max deferment of 2 years (reduced/harmonized in 2025 norms). 3. Condition: The account must otherwise be standard, and the revised repayment schedule must be viable.
Infrastructure projects have long gestation periods and high public utility; hence, the regulator allows a longer leash (3 years) compared to commercial projects (2 years) before classifying them as stressed.
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Consider the following statements regarding the "India Climate Finance Taxonomy" (Draft Framework 2025/26):
Assertion
Assertion
Explanation:
Correct: A
Both are true and R explains A. A "Taxonomy" is a rulebook that defines what counts as "Sustainable Investment." Tier 1 (Green) covers activities that are inherently low-carbon (e.g., Solar Power, EV manufacturing). Tier 2 (Transition) is critical for India because we cannot shut down steel plants overnight. We need to finance their shift to greener tech (e.g., Green Hydrogen steel). If we only had a "Green" tag, these sectors would be starved of capital. Hence, the "Transition" tag (Reason) justifies the dual-tier structure (Assertion).
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As per the Banking Laws (Amendment) Act, 2025,
what is the maximum number of nominees a depositor can now appoint for a single deposit account?
what is the maximum number of nominees a depositor can now appoint for a single deposit account?
Explanation:
Correct: D
Correct Answer: D. Four individuals. Concept: Multiple Nominations Limit (2025 Amendment). Structure: Old Rule: Only one nominee was allowed per account (individual capacity). New Rule (Effective Nov 1, 2025): The Act amended Section 45ZA of the Banking Regulation Act to allow a depositor to nominate up to four individuals. Context: This facility allows for either Simultaneous nomination (sharing the money) or Successive nomination (priority list) for deposit accounts. This change was introduced to provide flexibility to depositors and reduce disputes among heirs.
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As per the current PMEGP guidelines (valid in 2026), what are the maximum admissible project costs for setting up a new enterprise in the Manufacturing and Service sectors respectively?
Explanation:
Correct: B
Manufacturing ₹50 Lakh; Service ₹20 Lakh.
Project Cost Ceilings.
1. Manufacturing Sector: The limit was enhanced from ₹25 Lakh to ₹50 Lakh to account for inflation and technology costs. 2. Service/Business Sector: The limit was enhanced from ₹10 Lakh to ₹20 Lakh. 3. Significance: If a project cost exceeds these limits, the remaining amount must be funded by the bank without any government subsidy component. The subsidy is calculated only up to these caps.
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Regarding the "Upgradation of Loan Accounts" classified as NPAs, consider the specific regulatory requirement clarified by the RBI: "An NPA account can be upgraded to Standard Asset category only if __." Which statement correctly fills the blank?
Explanation:
Correct: C
An NPA can only be upgraded to Standard if the entire arrears (interest + principal) are paid.
This is known as the "Clean Record" or "Zero Tolerance" on arrears for upgradation.
1. The Rule: Partial payments do not allow for an upgrade. If the borrower pays 90% of the overdue amount, the account remains NPA. 2. Implications: This prevents "evergreening" where borrowers pay just enough to slip under the 90-day radar. 3. Exception: For accounts undergoing restructuring, upgradation happens only after a "monitoring period" of satisfactory performance (usually 1 year), but for normal NPAs, immediate upgradation requires full clearance of overdues.
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Scenario: The Reserve Bank of India imposes "All Inclusive Directions" on a stressed Co-operative Bank, restricting depositors from withdrawing funds. Under Section 18A of the DICGC Act,
what is the timeline for DICGC to pay the insured amount to the depositors?
what is the timeline for DICGC to pay the insured amount to the depositors?
Explanation:
Correct: B
The timeline is Within 90 days. This is known as the 90-Day Payout Rule, introduced by the DICGC (Amendment) Act, 2021. Timeline Breakdown: 1. First 45 Days: The bank must submit the claim list (depositor details) to DICGC. 2. Next 45 Days: DICGC must verify the data and remit the payment to the depositors. 3. Total: 90 Days. Significance: Prior to this amendment in 2021, depositors often had to wait for the final liquidation order, which could take years. Section 18A ensures interim relief even while the bank is under moratorium.
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Which of the following terms best describes the "UPI Circle" feature introduced by the NPCI, and
what is the primary operational relationship it establishes between users?
what is the primary operational relationship it establishes between users?
Explanation:
Correct: B
"UPI Circle" is a feature designed by the National Payments Corporation of India (NPCI) to enable Delegated Payments. It allows a "Primary User," who holds the bank account, to link a "Secondary User," such as a family member or employee, to their UPI ID.
1. Primary User: This user controls the funding account and sets the spending limits. 2. Secondary User: This user can initiate payments using the Primary's account. They can do this either independently under "Full Delegation" or with approval under "Partial Delegation." 3. Capacity: A Primary User can authorize up to 5 Secondary Users. Historical Context: Launched broadly between late 2024 and early 2025, this feature targets financial inclusion for dependents, such as minors or the elderly, who may not have their own bank accounts. It effectively replaces the need for physical "Add-on Cards" in the digital UPI ecosystem.
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Consider the following assertion and reason regarding the "Deemed Approval" mechanism in CTS 2026.
Assertion
Assertion
Explanation:
Correct: C
Assertion (A) is True: The "Deemed Approval" mechanism is a core feature of the 2026 Continuous Clearing rules. If the drawee bank is silent for T+3 hours, the system assumes the cheque is good for payment to prevent delays. Reason (R) is False: The burden of verification (checking signatures, balance, stop payments) remains strictly with the Drawee Bank. The rule does not shift this burden to the Presenting Bank; rather, it enforces operational discipline on the Drawee Bank to verify faster. The goal is efficiency, not a transfer of liability.
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In the context of "Settlement of Claims for Missing Persons," a bank can settle a claim before the statutory 7-year waiting period if the claimant produces which specific set of documents?
Explanation:
Correct: B
Correct Answer: B. An FIR and a Non-Traceable Report issued by the police. Concept: Missing Person Settlement (Simplified). The Law: Legally, a person is "presumed dead" only if unheard of for 7 years (Section 108, Indian Evidence Act). The Exception: To avoid hardship for small amounts, RBI allows banks to settle claims earlier if the claimant provides: 1. FIR (First Information Report) lodged with the police. 2. Non-Traceable Report issued by the police (stating the person could not be found after investigation). Note: The bank will also take an Indemnity Bond to protect itself in case the missing person returns alive.
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Scenario: An NBFC has a total digital loan portfolio of ₹100 Crore sourced through a specific Fintech partner. They have a Default Loss Guarantee (DLG) arrangement. If the actual defaults in this portfolio amount to ₹8 Crore,
what is the maximum amount the Fintech partner can legally reimburse the NBFC under the current RBI guidelines?
what is the maximum amount the Fintech partner can legally reimburse the NBFC under the current RBI guidelines?
Explanation:
Correct: C
₹5 Crore.
Application of the 5% DLG Cap. The Calculation: 1. Portfolio Size: ₹100 Crore. 2. Regulatory Cap: 5% of the Portfolio Amount = 0.05 * 100 = ₹5 Crore. 3. Actual Default: ₹8 Crore. The Outcome: Even though the default is ₹8 Crore, the Fintech (Lending Service Provider) can only pay up to the capped amount of ₹5 Crore. The Impact: The remaining loss of ₹3 Crore (₹8 Crore - ₹5 Crore) must be absorbed by the NBFC. This forces the NBFC to be careful about who they partner with, as they cannot offload 100% of the risk.
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Before an account becomes "Unclaimed" (at 10 years), it is first classified as "Inoperative" or "Dormant." According to RBI guidelines,
what is the specific period of non-operation (no customer-induced transaction) after which a Savings or Current account is classified as Inoperative?
what is the specific period of non-operation (no customer-induced transaction) after which a Savings or Current account is classified as Inoperative?
Explanation:
Correct: B
Correct Answer: B. Over 2 years. Concept: Inoperative Account Trigger. The Rule: A Savings or Current Account constitutes "Inoperative" if there are no Customer-Induced Transactions in the account for a period of over two years. Impact: Once classified as Inoperative, the bank must segregate the account in the system to prevent fraud. Penalties for non-maintenance of minimum balances are not applicable to inoperative accounts. Interest must still be credited.
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Consider the following statements regarding the "Margin Money" requirements under the Stand-Up India Scheme:
The scheme envisages a margin money requirement of up to 15% of the project cost.
The borrower is required to bring in a minimum of 10% of the project cost as their own contribution.
The remaining margin money (gap) can be provided through convergence with other Central or State Government schemes.
Which of the statements given above are correct?
The scheme envisages a margin money requirement of up to 15% of the project cost.
The borrower is required to bring in a minimum of 10% of the project cost as their own contribution.
The remaining margin money (gap) can be provided through convergence with other Central or State Government schemes.
Which of the statements given above are correct?
Explanation:
Correct: D
All statements (1, 2, and 3) are correct.
Margin Money (Borrower's Equity).
1. Revised Norms: Originally, the margin was 25%. It was reduced to 15% (Budget 2021) to make it easier for SC/ST and Women entrepreneurs. 2. Own Contribution: The borrower must pay at least 10% from their own pocket. 3. Convergence: If the scheme requires 15% margin and the borrower pays 10%, the remaining 5% can come from state subsidies or other support schemes.
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Consider the following statements regarding the PMEGP Subsidy Lock-in:
Assertion
Assertion
Explanation:
Correct: A
Both are true, and R explains A.
Subsidy Adjustment Mechanism.
1. Mechanism: The subsidy is not given to the borrower as cash. It is held by the bank in a Term Deposit Receipt (TDR). 2. Interest: No interest is paid on this TDR, and no interest is charged on the loan amount equal to the TDR. 3. Adjustment: Only after successful physical verification of the unit after 3 years, the TDR is liquidated and adjusted against the loan principal.
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Consider the following statements regarding the "Turnover Method" (Nayak Committee) and "Maximum Permissible Bank Finance" (Tandon Committee):
The Nayak Committee norms are generally applicable for working capital limits up to 50 million rupees (5 Crores).
The Tandon Committee Method II calculates MPBF as 75% of (Current Assets minus Current Liabilities).
The Nayak Committee assumes a minimum borrower margin of 5% of the annual turnover.
Which of the statements given above are correct?
The Nayak Committee norms are generally applicable for working capital limits up to 50 million rupees (5 Crores).
The Tandon Committee Method II calculates MPBF as 75% of (Current Assets minus Current Liabilities).
The Nayak Committee assumes a minimum borrower margin of 5% of the annual turnover.
Which of the statements given above are correct?
Regarding the consequences faced by a borrower classified as a "Wilful Defaulter,"
which of the following statements is INCORRECT?
which of the following statements is INCORRECT?
Scenario: Ms. Rina, a shopkeeper aged 58, wishes to enroll in a social security scheme. She has a functional savings bank account but no prior insurance. She approaches you to join PMJJBY and PMSBY. Based on the eligibility rules (as of 2026),
what is the correct course of action?
what is the correct course of action?
When an account is classified as a "Sub-standard Asset,"
what is the general provisioning requirement on the secured portion of the outstanding balance?
what is the general provisioning requirement on the secured portion of the outstanding balance?
Regarding "Pipeline Flows" (credits or cheques received in the name of a deceased depositor after their death),
which of the following approaches are authorized by the RBI?
The bank may return the instrument to the remitter with the remark "Account Holder Deceased".
The bank may open a temporary account styled "Estate of Mr. X, Deceased" to credit such flows.
The bank may credit the funds directly to the Nominee's personal savings account.
which of the following approaches are authorized by the RBI?
The bank may return the instrument to the remitter with the remark "Account Holder Deceased".
The bank may open a temporary account styled "Estate of Mr. X, Deceased" to credit such flows.
The bank may credit the funds directly to the Nominee's personal savings account.
Consider the following statements:
Assertion
Assertion
According to the RBI (Project Finance) Directions, 2025, a project loan for an Infrastructure project can retain its "Standard Asset" classification if the DCCO is deferred due to reasons beyond the promoter's control (exogenous reasons), provided the deferment does not exceed:
Under the RBI's Limited Liability framework for unauthorized electronic transactions reported between 4 to 7 working days, the maximum liability of the customer is capped based on the account type.
Which of the following pairs is INCORRECTLY matched?
Which of the following pairs is INCORRECTLY matched?
As per the current guidelines of the Pradhan Mantri Jan Dhan Yojana (PMJDY),
what is the maximum limit for the Overdraft (OD) facility available to eligible account holders, and
what is the upper age limit to avail this facility?
what is the maximum limit for the Overdraft (OD) facility available to eligible account holders, and
what is the upper age limit to avail this facility?
Regarding the UDGAM (Unclaimed Deposits – Gateway to Access inforMation) Portal,
which of the following actions can a user NOT perform on the portal?
which of the following actions can a user NOT perform on the portal?
Which of the following statements regarding "Sovereign Green Bonds" (SGrBs) and the "Greenium" concept are Correct?
SGrBs are classified as "Specified Securities" under the Fully Accessible Route (FAR) for non-residents.
"Greenium" refers to the higher interest rate the government pays to investors for green projects.
Funds raised from SGrBs cannot be used for nuclear power projects.
SGrBs are classified as "Specified Securities" under the Fully Accessible Route (FAR) for non-residents.
"Greenium" refers to the higher interest rate the government pays to investors for green projects.
Funds raised from SGrBs cannot be used for nuclear power projects.
Regarding the "Key Fact Statement" (KFS) under the RBI Digital Lending Guidelines,
which of the following pairs of components and their treatment is INCORRECTLY matched?
which of the following pairs of components and their treatment is INCORRECTLY matched?
With reference to the IBC (Amendment) Bill, 2025 regarding the admission of insolvency applications, consider the following statements:
The Adjudicating Authority "must" admit a Section 7 application if debt and default are established.
The amendment legislatively overrides the Supreme Court's Vidarbha Industries judgment which gave NCLT discretionary power to reject applications based on solvency.
The record of default with an Information Utility is now conclusive proof for admission.
Which of the statements given above are correct?
The Adjudicating Authority "must" admit a Section 7 application if debt and default are established.
The amendment legislatively overrides the Supreme Court's Vidarbha Industries judgment which gave NCLT discretionary power to reject applications based on solvency.
The record of default with an Information Utility is now conclusive proof for admission.
Which of the statements given above are correct?
Regarding the provisioning norms for "Doubtful Assets," consider the following matching of Doubtful Categories (based on age) with their required provision percentages on the secured portion:
Doubtful-I (Up to 1 year) — 25%
Doubtful-II (1 to 3 years) — 40%
Doubtful-III (More than 3 years) — 100%
Which of the above pairs are correctly matched?
Doubtful-I (Up to 1 year) — 25%
Doubtful-II (1 to 3 years) — 40%
Doubtful-III (More than 3 years) — 100%
Which of the above pairs are correctly matched?
The "Stand-Up India" scheme mandates that loans must be provided for setting up a "Greenfield Enterprise." In the context of this scheme, what does the term "Greenfield Enterprise" strictly imply?
Scenario: Ms. Geeta, an aspiring entrepreneur from a Rural area belonging to the SC category, applies for a PMEGP loan to start a pottery unit. The total project cost is ₹10 Lakh.
What is the Rate of Subsidy (Margin Money) she is eligible to receive from the government?
What is the Rate of Subsidy (Margin Money) she is eligible to receive from the government?
Scenario: Mr. Raj, an APY subscriber, fails to maintain the required balance in his savings account for the monthly contribution auto-debit. The contribution for April 2026 remains unpaid.
What is the consequence of this default?
What is the consequence of this default?
What is the insurance premium rate paid to DICGC as of the financial year 2025-26, and who bears the burden of this cost?
Consider the following account holding patterns to determine insurance coverage limits:
Account A is held by "Mr. X and Mr. Y" (Jointly).
Account B is held by "Mr. X, Mr. Y, and Mr. Z" (Jointly).
Account C is held by "Mr. Y and Mr. X" (Jointly, names reversed).
How many separate insurance limits of Rupees 5 Lakh are applicable here?
Account A is held by "Mr. X and Mr. Y" (Jointly).
Account B is held by "Mr. X, Mr. Y, and Mr. Z" (Jointly).
Account C is held by "Mr. Y and Mr. X" (Jointly, names reversed).
How many separate insurance limits of Rupees 5 Lakh are applicable here?
[Updated Feb 2026] Consider the following statements regarding the "Continuous Clearing" of cheques under CTS:
As of January 2026 (Phase 2), the clearing cycle has shifted from batch processing to "Real-Time" or "Continuous" clearing with settlement occurring within hours.
Under the new regime, cheques presented up to 4:00 PM are cleared and credited on the same day.
The "Paper to Follow" (P2F) physical movement of cheques is now mandatory for all values above ₹1 Lakh.
Which of the statements given above is/are correct?
As of January 2026 (Phase 2), the clearing cycle has shifted from batch processing to "Real-Time" or "Continuous" clearing with settlement occurring within hours.
Under the new regime, cheques presented up to 4:00 PM are cleared and credited on the same day.
The "Paper to Follow" (P2F) physical movement of cheques is now mandatory for all values above ₹1 Lakh.
Which of the statements given above is/are correct?
Which of the following best describes the primary operational difference between the legacy Electronic Clearing Service (ECS) and the modern National Automated Clearing House (NACH)?
Which of the following correctly distinguishes between "Vishing" and "Smishing" as modes of social engineering attacks in banking?
Consider the following statements regarding the Co-Lending Model (CLM) between Banks and Non-Banking Financial Companies (NBFCs):
The NBFC acts as the single point of interface for the customer.
The Bank must take a minimum of 80% share of the individual loans on its books.
The NBFC must retain a minimum of 20% share of the individual loans on its books.
Which of the statements given above is/are correct?
The NBFC acts as the single point of interface for the customer.
The Bank must take a minimum of 80% share of the individual loans on its books.
The NBFC must retain a minimum of 20% share of the individual loans on its books.
Which of the statements given above is/are correct?
As per the revised guidelines (effective 2025), loans to Start-ups (as defined by Ministry of Commerce and Industry) are eligible for Priority Sector Lending classification up to what limit?
According to the Income Recognition norms for Non-Performing Assets (NPAs),
which of the following statements is NOT correct?
which of the following statements is NOT correct?
According to the RBI norms for Standard Asset Provisioning,
what is the required provision percentage for the "General" category of advances (i.e., loans not falling under Agriculture, SME, or Commercial Real Estate)?
what is the required provision percentage for the "General" category of advances (i.e., loans not falling under Agriculture, SME, or Commercial Real Estate)?
With reference to the procedure under Section 13 of the SARFAESI Act, consider the following statements:
The secured creditor must issue a demand notice giving the borrower 60 days to discharge the liabilities.
The borrower has the right to make a representation or objection to the notice, and the secured creditor must respond within 15 days.
If the borrower fails to pay, the creditor can take possession of the asset under Section 13(4) immediately after the 30th day.
Which of the statements given above are correct?
The secured creditor must issue a demand notice giving the borrower 60 days to discharge the liabilities.
The borrower has the right to make a representation or objection to the notice, and the secured creditor must respond within 15 days.
If the borrower fails to pay, the creditor can take possession of the asset under Section 13(4) immediately after the 30th day.
Which of the statements given above are correct?
Consider the following statements regarding appeals under the SARFAESI Act:
Assertion
Assertion
Consider the following statements regarding the "Waterfall Mechanism" under Section 53 of the IBC:
Assertion
Assertion
Consider the following statements:
Assertion
Assertion
According to Section 138 of the Negotiable Instruments Act, 1881,
what is the maximum term of imprisonment prescribed for the offence of dishonour of a cheque?
what is the maximum term of imprisonment prescribed for the offence of dishonour of a cheque?
As per Section 6 of the Negotiable Instruments Act, 1881,
which of the following is the defining characteristic that distinguishes a "Cheque" from a standard Bill of Exchange?
which of the following is the defining characteristic that distinguishes a "Cheque" from a standard Bill of Exchange?
Section 10 of the NI Act defines "Payment in Due Course."
Which of the following conditions is NOT required to claim protection under this section?
Which of the following conditions is NOT required to claim protection under this section?
A "Material Alteration" renders a negotiable instrument void under Section
87.
Which of the following changes is NOT considered a Material Alteration?
87.
Which of the following changes is NOT considered a Material Alteration?
Section 131 of the Negotiable Instruments Act provides statutory protection to a "Collecting Banker."
Which of the following is the primary condition that must be satisfied for a banker to claim this protection?
Which of the following is the primary condition that must be satisfied for a banker to claim this protection?
Under Section 85(1), a Paying Banker is discharged from liability if he pays an "Order Cheque" in due course, even if:
Under the updated RBI Guidelines for "Settlement of Death Claims," once the bank receives all the necessary documents from the claimant (nominee or legal heir), within what time period is the bank mandatorily required to settle the claim?
According to the RBI Master Direction on Customer Service,
what is the minimum threshold limit up to which banks are advised to settle claims in respect of deceased depositors without insisting on legal representation (like a Succession Certificate) in the absence of a nominee?
what is the minimum threshold limit up to which banks are advised to settle claims in respect of deceased depositors without insisting on legal representation (like a Succession Certificate) in the absence of a nominee?
In the context of "Settlement of Claims for Missing Persons," a bank can settle a claim before the statutory 7-year waiting period if the claimant produces which specific set of documents?
Before an account becomes "Unclaimed" (at 10 years), it is first classified as "Inoperative" or "Dormant." According to RBI guidelines,
what is the specific period of non-operation (no customer-induced transaction) after which a Savings or Current account is classified as Inoperative?
what is the specific period of non-operation (no customer-induced transaction) after which a Savings or Current account is classified as Inoperative?
According to Section 26 of the Banking Regulation Act, 1949, a deposit account is legally classified as "Unclaimed" and the funds must be transferred to the Depositor Education and Awareness (DEA) Fund if the account has not been operated for a period of how many years?
Regarding the UDGAM (Unclaimed Deposits – Gateway to Access inforMation) Portal,
which of the following actions can a user NOT perform on the portal?
which of the following actions can a user NOT perform on the portal?
Regarding the specific nomination rules for Safe Deposit Lockers and Articles in Safe Custody,
which of the following is ALLOWED under the 2025 framework?
which of the following is ALLOWED under the 2025 framework?
As per the Banking Laws (Amendment) Act, 2025,
what is the maximum number of nominees a depositor can now appoint for a single deposit account?
what is the maximum number of nominees a depositor can now appoint for a single deposit account?
In the context of the "Cyber Swachhta Kendra" (Botnet Cleaning and Malware Analysis Centre),
which of the following descriptions is INCORRECT?
which of the following descriptions is INCORRECT?
In the context of Video-based Customer Identification Process (V-CIP) for KYC,
which of the following technological checks is MANDATORY to ensure the customer is physically present and not using a recording?
which of the following technological checks is MANDATORY to ensure the customer is physically present and not using a recording?
Consider the following statements regarding the "Shared Responsibility Model" in Cloud Computing for banks.
The Cloud Service Provider (CSP) is responsible for the security OF the cloud (physical infrastructure, networking).
The Bank is responsible for security IN the cloud (data classification, identity management, encryption).
The RBI Master Direction on Outsourcing of IT Services mandates that banks cannot outsource "Core Management Functions" to the cloud provider.
The Cloud Service Provider (CSP) is responsible for the security OF the cloud (physical infrastructure, networking).
The Bank is responsible for security IN the cloud (data classification, identity management, encryption).
The RBI Master Direction on Outsourcing of IT Services mandates that banks cannot outsource "Core Management Functions" to the cloud provider.
Which of the following terms best describes the "UPI Circle" feature introduced by the NPCI, and
what is the primary operational relationship it establishes between users?
what is the primary operational relationship it establishes between users?
Consider the following statements regarding the "Wholesale CBDC" (e₹-W) pilots conducted by the RBI as of 2026:
The e₹-W pilot is primarily used for the settlement of secondary market transactions in Government Securities (G-Secs).
The "Call Money Market" settlement was added as a use case in the e₹-W pilot.
Retail users can access e₹-W for high-value transactions above ₹2 Lakh.
Which of the statements given above is/are correct?
The e₹-W pilot is primarily used for the settlement of secondary market transactions in Government Securities (G-Secs).
The "Call Money Market" settlement was added as a use case in the e₹-W pilot.
Retail users can access e₹-W for high-value transactions above ₹2 Lakh.
Which of the statements given above is/are correct?
Regarding the "Offline Functionality" of the Retail CBDC (e₹-R) introduced in the 2024-2025 pilots,
which of the following statements is INCORRECT?
which of the following statements is INCORRECT?
The Account Aggregator (AA) framework is designed around the principle of being "Data Blind." What does this specifically mean for the AA entity (NBFC-AA)?
In the context of the "Programmability" pilot for Retail CBDC (e₹-R) launched in 2024-2025,
which of the following use cases was successfully tested in states like Gujarat and Andhra Pradesh?
which of the following use cases was successfully tested in states like Gujarat and Andhra Pradesh?
The Account Aggregator (AA) ecosystem connects Financial Information Providers (FIPs) with Financial Information Users (FIUs). As of February 2026,
which of the following entities is NOT typically considered a valid FIP in the ecosystem?
which of the following entities is NOT typically considered a valid FIP in the ecosystem?
Consider the following statements distinguishing CBDC from UPI:
Assertion
Assertion
Scenario: A small business owner, Mr. X, applies for a business loan. The lender asks him to share his GST returns and Bank Statements via an Account Aggregator (AA). Mr. X consents. A month later, he decides he no longer wants the lender to access his daily transaction data. Under the AA framework, what is Mr. X's right?
In August 2024, the RBI Governor announced the launch of "ULI" to speed up the credit appraisal process. What does the acronym ULI stand for, and which pilot project did it evolve from?
According to the RBI’s "Fair Lending Practice" circular regarding Penal Charges (effective 2024 and valid in 2026), how must a Regulated Entity (RE) treat late payment penalties?
Under the RBI’s Digital Lending Guidelines regarding data collection by Digital Lending Apps (DLAs),
which of the following mobile permissions is a DLA explicitly permitted to request from a borrower?
which of the following mobile permissions is a DLA explicitly permitted to request from a borrower?
Consider the following statements regarding the Co-Lending Model (CLM) between Banks and Non-Banking Financial Companies (NBFCs):
The NBFC acts as the single point of interface for the customer.
The Bank must take a minimum of 80% share of the individual loans on its books.
The NBFC must retain a minimum of 20% share of the individual loans on its books.
Which of the statements given above is/are correct?
The NBFC acts as the single point of interface for the customer.
The Bank must take a minimum of 80% share of the individual loans on its books.
The NBFC must retain a minimum of 20% share of the individual loans on its books.
Which of the statements given above is/are correct?
Regarding the recognition of Self-Regulatory Organizations for the FinTech Sector (SRO-FT) by the RBI,
which of the following statements is INCORRECT?
which of the following statements is INCORRECT?
Consider the following statements regarding RuPay Credit Cards on UPI:
Assertion
Assertion
Identify the correct statement regarding the reporting of "Digital Lending" loans to Credit Information Companies (CICs).
Which of the following best defines the core objective of "Credit Appraisal" in a banking context, and which principle of lending is generally considered the most critical?
In the context of banking credit facilities,
which of the following clearly distinguishes a "Fund-Based" limit from a "Non-Fund Based" limit?
which of the following clearly distinguishes a "Fund-Based" limit from a "Non-Fund Based" limit?
Regarding the "Operating Cycle" in working capital assessment,
which of the following statements is NOT correct?
which of the following statements is NOT correct?
Consider the following statements regarding the "Turnover Method" (Nayak Committee) and "Maximum Permissible Bank Finance" (Tandon Committee):
The Nayak Committee norms are generally applicable for working capital limits up to 50 million rupees (5 Crores).
The Tandon Committee Method II calculates MPBF as 75% of (Current Assets minus Current Liabilities).
The Nayak Committee assumes a minimum borrower margin of 5% of the annual turnover.
Which of the statements given above are correct?
The Nayak Committee norms are generally applicable for working capital limits up to 50 million rupees (5 Crores).
The Tandon Committee Method II calculates MPBF as 75% of (Current Assets minus Current Liabilities).
The Nayak Committee assumes a minimum borrower margin of 5% of the annual turnover.
Which of the statements given above are correct?
Identify the pair of "Charge Type" and "Asset Nature" that is INCORRECTLY matched:
Consider the following statements regarding Fixed vs. Floating Charges:
Assertion
Assertion
Scenario: A textile manufacturer needs to purchase a new automated loom (machinery) expected to last 10 years. They also need funds to buy cotton bales (raw material) for the upcoming season. Action: The bank manager suggests a Term Loan for the loom and a Cash Credit limit for the cotton. Why is this structural distinction necessary?
Scenario: A bank grants a loan against the security of a warehouse full of paddy. The bank puts its own lock and key on the warehouse and appoints a security guard. The key remains with the Bank Manager. Which legal mode of charge has been created?
In the context of Term Loan appraisal, what does the Debt Service Coverage Ratio (DSCR) primarily indicate, and what is generally considered the minimum acceptable benchmark for most banks?
Which type of Mortgage is created by the simple delivery of documents of title to immovable property with the intent to create security, and is valid only in notified towns?
When calculating the Current Ratio for working capital assessment,
which of the following is strictly NOT classified as a Current Liability?
which of the following is strictly NOT classified as a Current Liability?
Regarding the calculation of Maximum Permissible Bank Finance (MPBF) under the Tandon Committee recommendations:
Method I: The bank lends 75% of the "Working Capital Gap" (Current Assets minus Current Liabilities).
Method II: The bank lends 75% of "Total Current Assets" minus Current Liabilities.
Method II is more liberal (gives a higher loan amount) than Method I.
Which of the statements given above are correct?
Method I: The bank lends 75% of the "Working Capital Gap" (Current Assets minus Current Liabilities).
Method II: The bank lends 75% of "Total Current Assets" minus Current Liabilities.
Method II is more liberal (gives a higher loan amount) than Method I.
Which of the statements given above are correct?
Identify the INCORRECT statement regarding "Assignment" as a mode of creating a charge:
Consider the following statements regarding liquidity ratios:
Assertion
Assertion
Scenario: A borrower has the following stock position: Total Stock Value: ₹100 Lakhs Sundry Creditors (unpaid stock): ₹20 Lakhs Bank Margin stipulated: 25% Calculate the Drawing Power (DP) available to the borrower.
Scenario: A company has a Term Loan from Bank A secured by a First Charge on Plant and Machinery. Later, the company takes a Working Capital loan from Bank B. Bank B wants a charge on the same Plant and Machinery as collateral security. What type of charge can Bank B hold on the Plant and Machinery?
Which of the following statements most accurately defines the primary objective and scope of the SARFAESI Act, 2002?
According to the provisions of the SARFAESI Act, 2002, the measures of the Act do NOT apply if the outstanding amount of debt due to the secured creditor is less than
which of the following thresholds?
which of the following thresholds?
Section 31 of the SARFAESI Act, 2002 explicitly excludes certain types of properties and transactions from the purview of the Act.
Which of the following is NOT covered under the SARFAESI Act?
Which of the following is NOT covered under the SARFAESI Act?
Identify the INCORRECT statement regarding the Central Registry of Securitisation Asset Reconstruction and Security Interest of India, known as CERSAI.
A borrower is aggrieved by the action of a bank taking possession of his commercial shop under Section 13(4) of the SARFAESI Act. He wishes to file an application against this action. Which forum must he approach and within what timeline?
Scenario: 'Apex Textiles Ltd' has defaulted on a loan of Rupees 50 Lakhs. The bank issued a Section 13(2) notice on January 1st. Apex Textiles did not reply. On March 5th, the bank took symbolic possession of the factory. Apex Textiles claims the action is illegal because the bank did not approach the DRT before taking possession. Based on the SARFAESI Act, is the borrower's claim valid?
Which of the following statements best describes the fundamental shift in the Indian insolvency regime introduced by the IBC, 2016, compared to the earlier SICA regime?
Section 29A of the IBC renders certain persons ineligible to be Resolution Applicants.
Which of the following is NOT a ground for disqualification under Section 29A?
Which of the following is NOT a ground for disqualification under Section 29A?
Identify the INCORRECT statement regarding the Liquidation Process as per the 2025 amended framework.
'TechNova Solutions', an MSME, is facing financial stress. The promoters want to resolve the debt but wish to retain management control to preserve business continuity. Which mechanism under IBC is most suitable for them?
Scenario: 'Skyline Buildtech' and 'Skyline Infra', two separate companies with the same promoters, are developing a township. Homebuyers have allotted units in both. In February 2026, homebuyers filed a single joint Section 7 petition against both companies. The companies challenged this, arguing they are separate legal entities. Based on the Supreme Court judgment in Satinder Singh Bhasin (Feb 2026), is the joint petition maintainable?
Identify the pair that correctly matches the Scheme with its eligible entry age and premium payment mode:
Consider the following statements:
Assertion
Assertion
Consider the following statements regarding the claim limits and benefits under various Financial Inclusion schemes as of 2026:
Under PMJJBY, the death benefit payable to the nominee is fixed at ₹2 Lakh.
Under PMSBY, the compensation for partial permanent disability (such as loss of one eye) is ₹1 Lakh.
Under PMJDY, the "Unconditional Overdraft" limit available without stringent conditions is ₹5,000.
Which of the statements given above are correct?
Under PMJJBY, the death benefit payable to the nominee is fixed at ₹2 Lakh.
Under PMSBY, the compensation for partial permanent disability (such as loss of one eye) is ₹1 Lakh.
Under PMJDY, the "Unconditional Overdraft" limit available without stringent conditions is ₹5,000.
Which of the statements given above are correct?
Scenario: Mr. Raj, an APY subscriber, fails to maintain the required balance in his savings account for the monthly contribution auto-debit. The contribution for April 2026 remains unpaid.
What is the consequence of this default?
What is the consequence of this default?
Who is the regulatory authority responsible for the administration and supervision of the Atal Pension Yojana (APY)?
The "Stand-Up India" scheme mandates that loans must be provided for setting up a "Greenfield Enterprise." In the context of this scheme, what does the term "Greenfield Enterprise" strictly imply?
Which of the following activities is NOT eligible for financing under the Pradhan Mantri Mudra Yojana (PMMY)?
Consider the following statements regarding the "Margin Money" requirements under the Stand-Up India Scheme:
The scheme envisages a margin money requirement of up to 15% of the project cost.
The borrower is required to bring in a minimum of 10% of the project cost as their own contribution.
The remaining margin money (gap) can be provided through convergence with other Central or State Government schemes.
Which of the statements given above are correct?
The scheme envisages a margin money requirement of up to 15% of the project cost.
The borrower is required to bring in a minimum of 10% of the project cost as their own contribution.
The remaining margin money (gap) can be provided through convergence with other Central or State Government schemes.
Which of the statements given above are correct?
To be eligible for the "Tarun Plus" loan category (loans between ₹10 Lakh and ₹20 Lakh) under MUDRA, a borrower must satisfy a specific condition.
Which of the following is that condition?
Which of the following is that condition?
Match the Loan Schemes in List I with their correct financial limits in List II.
List I (Scheme)
I. MUDRA Shishu
II. MUDRA Kishore
III. MUDRA Tarun
IV. Stand-Up India
List II (Loan Limit)
₹50,001 to ₹5 Lakh
₹10 Lakh to ₹1 Crore
Up to ₹50,000
₹5 Lakh to ₹10 Lakh
Select the correct matching code:
List I (Scheme)
I. MUDRA Shishu
II. MUDRA Kishore
III. MUDRA Tarun
IV. Stand-Up India
List II (Loan Limit)
₹50,001 to ₹5 Lakh
₹10 Lakh to ₹1 Crore
Up to ₹50,000
₹5 Lakh to ₹10 Lakh
Select the correct matching code:
Consider the following statements:
Assertion
Assertion
Scenario: Mr. Sharma (General Category, Male) and Ms. Anjali (General Category, Female) both approach a bank branch to apply for a Stand-Up India loan of ₹25 Lakh to start a new textile business. Neither has any prior business experience. Who is eligible for the loan under this scheme?
Which of the following agencies acts as the single national-level "Nodal Agency" for the implementation of the Prime Minister’s Employment Generation Programme (PMEGP)?
As per the current PMEGP guidelines (valid in 2026), what are the maximum admissible project costs for setting up a new enterprise in the Manufacturing and Service sectors respectively?
Scenario: Ms. Geeta, an aspiring entrepreneur from a Rural area belonging to the SC category, applies for a PMEGP loan to start a pottery unit. The total project cost is ₹10 Lakh.
What is the Rate of Subsidy (Margin Money) she is eligible to receive from the government?
What is the Rate of Subsidy (Margin Money) she is eligible to receive from the government?
Consider the following statements regarding the "Own Contribution" (Beneficiary's Share) required under PMEGP:
Beneficiaries under the General Category must contribute 10% of the project cost from their own sources.
Beneficiaries under the Special Category (including SC/ST/Women) must contribute only 5% of the project cost.
The own contribution must be deposited after the sanction of the loan but before the release of the first installment.
Which of the statements given above are correct?
Beneficiaries under the General Category must contribute 10% of the project cost from their own sources.
Beneficiaries under the Special Category (including SC/ST/Women) must contribute only 5% of the project cost.
The own contribution must be deposited after the sanction of the loan but before the release of the first installment.
Which of the statements given above are correct?
Under the Deendayal Antyodaya Yojana - National Rural Livelihoods Mission (DAY-NRLM),
what is the limit for collateral-free loans provided to Self Help Groups (SHGs) as per the latest RBI Master Circular (2025-26)?
what is the limit for collateral-free loans provided to Self Help Groups (SHGs) as per the latest RBI Master Circular (2025-26)?
The DAY-NRLM provides an Interest Subvention Scheme for Women SHGs.
Which of the following statements correctly describes the effective interest rate for prompt payees in 2026?
Which of the following statements correctly describes the effective interest rate for prompt payees in 2026?
Consider the following statements regarding the PMEGP Subsidy Lock-in:
Assertion
Assertion
Scenario: Mr. Raj wants to set up a manufacturing unit under PMEGP with a total project cost of ₹15 Lakh. He has completed his education only up to the 5th standard. Is he eligible for the loan under the PMEGP guidelines?
Consider the following statements regarding the Atal Pension Yojana (APY):
Assertion
Assertion
According to the Union Budget 2026-27,
what is the revised Fiscal Deficit target set for the financial year 2026-27, expressed as a percentage of GDP?
what is the revised Fiscal Deficit target set for the financial year 2026-27, expressed as a percentage of GDP?
The Union Budget 2026-27 announced the formation of a "High-Level Committee on Banking" (HLC-B).
What is the specific mandate of this committee as stated in the budget speech?
What is the specific mandate of this committee as stated in the budget speech?
To boost the "Municipal Bond" market, the Budget 2026-27 introduced a specific monetary incentive.
Which of the following accurately describes this incentive?
Which of the following accurately describes this incentive?
The Budget 2026-27 proposed a significant change to the Foreign Exchange Management (Non-debt Instruments) Rules regarding "Persons Resident Outside India" (PROI).
What is the new investment limit for an individual PROI in the equity capital of a listed Indian company?
What is the new investment limit for an individual PROI in the equity capital of a listed Indian company?
To support the growth of "High-Potential" MSMEs, the Budget 2026-27 announced the creation of a dedicated "SME Growth Fund."
What is the total corpus of this fund?
What is the total corpus of this fund?
The Budget 2026-27 highlighted the success of the "Credit Assessment Model" (CAM) for Public Sector Banks (PSBs). This new model primarily relies on which type of data for sanctioning MSME loans?
To deepen the corporate bond market, the Budget 2026-27 proposed the introduction of a "Market Making Framework." This framework specifically allows access to funds and derivatives on which underlying asset?
Under the "Direct Listing Scheme" operationalized by the Ministry of Corporate Affairs (MCA), which category of Indian companies is currently eligible to list their equity shares exclusively on International Exchanges in GIFT City?
The Budget 2026-27 introduced the concept of "Corporate Mitras." Who are these "Corporate Mitras" and
what is their primary function?
what is their primary function?
The Finance Minister proposed specific measures to leverage the TReDS platform in Budget 2026.
Which of the following is NOT one of those announced measures?
Which of the following is NOT one of those announced measures?
A major structural reform in the Union Budget 2026-27 was the increase in the Foreign Direct Investment (FDI) limit for the Insurance Sector.
What is the new FDI cap?
What is the new FDI cap?
To support the agricultural sector, the Union Budget 2026-27 announced an enhancement in the limit for "collateral-free" loans under the Kisan Credit Card (KCC) scheme (Modified Interest Subvention Scheme).
What is the new limit?
What is the new limit?
Scenario: "FinBank Ltd" holds a large portfolio of invoices (receivables) from Power Sector CPSEs on its TReDS platform. To free up capital, it wants to sell these receivables to a Mutual Fund. Under the Budget 2026 reforms, what specific mechanism enables this transaction?
Which of the following statements regarding the "Pradhan Mantri Awas Yojana - Urban 2.0" (PMAY-U 2.0) Interest Subsidy Scheme (ISS) are Correct?
The scheme provides a 4% interest subsidy on the first ₹8 Lakh of the housing loan.
The maximum eligible subsidy amount per beneficiary is capped at ₹1.80 Lakh.
The Middle Income Group (MIG) category covers households with annual income between ₹12 Lakh and ₹18 Lakh.
The scheme provides a 4% interest subsidy on the first ₹8 Lakh of the housing loan.
The maximum eligible subsidy amount per beneficiary is capped at ₹1.80 Lakh.
The Middle Income Group (MIG) category covers households with annual income between ₹12 Lakh and ₹18 Lakh.
Under the "PM Surya Ghar: Muft Bijli Yojana" (Rooftop Solar Scheme), the government provides subsidies based on system capacity.
Which of the following subsidy slabs is INCORRECT?
Which of the following subsidy slabs is INCORRECT?
Regarding the "NPS Vatsalya" scheme introduced to promote financial inclusion for minors,
identify the INCORRECT statement.
The account can be opened for any minor citizen of India.
The minimum annual contribution required to keep the account active is ₹5,000.
Upon attaining 18 years of age, the account seamlessly converts into a regular NPS Tier-1 account.
The account is operated by the guardian until the minor becomes a major.
identify the INCORRECT statement.
The account can be opened for any minor citizen of India.
The minimum annual contribution required to keep the account active is ₹5,000.
Upon attaining 18 years of age, the account seamlessly converts into a regular NPS Tier-1 account.
The account is operated by the guardian until the minor becomes a major.
To secure the supply chain for EV batteries, the Budget 2026-27 announced specific incentives under the "Critical Mineral Mission."
Which of the following is a key component of this mission?
Which of the following is a key component of this mission?
Scenario: Mr. Sharma, an urban resident with an annual household income of ₹5 Lakh, wishes to buy his first pucca house. He applies for a loan under PMAY-Urban 2.0. Which category does he fall under, and what is his primary eligibility criterion regarding house ownership?
Consider the following Assertion and Reason regarding Electronic Cheques.
Assertion
Assertion
Which of the following is an example of a "General Crossing"?
Mr. A endorses a cheque to Mr. B by adding the words "Sans Recourse" to his signature. The cheque is subsequently dishonoured.
What is the legal liability of Mr. A in this scenario?
What is the legal liability of Mr. A in this scenario?
Regarding the territorial jurisdiction for filing a complaint under Section 138 (Dishonour of Cheque), consider the following statements based on Section 142 and recent judgments:
If the cheque is delivered for collection through an account, the complaint must be filed where the branch of the bank where the payee maintains the account is situated.
If the cheque is presented otherwise than through an account (over the counter), the complaint must be filed where the branch of the drawer's bank is situated.
Which of the statements given above is/are correct?
If the cheque is delivered for collection through an account, the complaint must be filed where the branch of the bank where the payee maintains the account is situated.
If the cheque is presented otherwise than through an account (over the counter), the complaint must be filed where the branch of the drawer's bank is situated.
Which of the statements given above is/are correct?
Consider the following regarding the liability of a "Drawee in Case of Need".
Assertion
Assertion
Which of the following specific endorsements converts a "Bearer" instrument into an "Order" instrument?
Endorsement in Blank
Endorsement in Full
Restrictive Endorsement
Select the correct option:
Endorsement in Blank
Endorsement in Full
Restrictive Endorsement
Select the correct option:
Scenario: A company issues a cheque signed by its Director, Mr. Sharma. The cheque is dishonoured due to "Insufficient Funds." The complainant files a case under Section 138 against Mr. Sharma (Director) without making the Company an accused in the complaint. Based on the binding Supreme Court precedent (Aneeta Hada case), is the complaint maintainable against Mr. Sharma?
What is the legal effect of adding the words "Not Negotiable" to a crossing on a cheque under Section 130 of the NI Act?
Under Section 85(1), a Paying Banker is discharged from liability if he pays an "Order Cheque" in due course, even if:
Scenario: A cheque is drawn by Mr. X in favor of Mr. Y. A thief steals the cheque, forges Mr. Y's endorsement, and transfers it to Mr. Z, who takes it for value and in good faith. Mr. Z presents it to the bank. Who is the "Holder in Due Course" in this scenario?
Consider the following statements regarding Section 89 of the NI Act (Payment of instrument on which alteration is not apparent):
If a material alteration is made efficiently and is not visible to the naked eye (invisible alteration), the paying banker is protected if he pays it in due course.
The paying banker is liable to refund the amount even if the alteration was invisible, as the instrument was void.
This protection applies to both Promissory Notes and Cheques.
Which of the statements given above is/are correct?
If a material alteration is made efficiently and is not visible to the naked eye (invisible alteration), the paying banker is protected if he pays it in due course.
The paying banker is liable to refund the amount even if the alteration was invisible, as the instrument was void.
This protection applies to both Promissory Notes and Cheques.
Which of the statements given above is/are correct?
Scenario: A branch manager opens a current account for a new customer, Mr. Fraud, accepting only a generic electricity bill as proof of address, without obtaining an officially valid document (OVD) or verifying the identity as per RBI KYC norms. Two days later, Mr. Fraud deposits a stolen crossed cheque of 50 Lakh Rupees into this account. The bank collects the proceeds. It is later found that Mr. Fraud was an imposter. Is the collecting banker protected under Section 131?
Which of the following statements regarding the "Premature Termination of Term Deposits" in the event of the depositor's death is INCORRECT?
Consider the following:
Assertion
Assertion
Scenario: A customer dies leaving a Savings Account balance of Rupees 4 Lakh. There is no nomination. The deceased has three children. Child A approaches the bank with a "Simple Indemnity Bond" and a "Letter of Disclaimer" from Child B and Child C. The Branch Manager refuses to settle the claim, demanding a Succession Certificate from the Civil Court. Is the Branch Manager's action correct?
According to Section 26 of the Banking Regulation Act, 1949, a deposit account is legally classified as "Unclaimed" and the funds must be transferred to the Depositor Education and Awareness (DEA) Fund if the account has not been operated for a period of how many years?
For an account to remain "Active," there must be a "Customer Induced Transaction."
Which of the following is considered a valid Customer Induced Transaction under RBI guidelines?
Which of the following is considered a valid Customer Induced Transaction under RBI guidelines?
According to the Revised Instructions on Inoperative Accounts (effective from 2024), which channels are banks permitted to use for the Re-activation of inoperative accounts to ensure customer convenience?
Video-Customer Identification Process (V-CIP).
Authorized Business Correspondents (BCs) at remote locations.
Only the "Home Branch" where the account was opened.
Video-Customer Identification Process (V-CIP).
Authorized Business Correspondents (BCs) at remote locations.
Only the "Home Branch" where the account was opened.
Which of the following statements regarding the interest payable on Unclaimed Deposits transferred to the DEA Fund is INCORRECT?
Consider the following:
Assertion
Assertion
Scenario: A student opened a "Zero Balance" Savings Account for receiving a Government Scholarship in 2023. The scholarship stopped in 2024. The student has not done any transaction since then. It is now 2026 (more than 2 years). The Bank Manager classifies this account as "Inoperative" and stops debiting transactions. Is the Manager's action consistent with RBI guidelines?
Which of the following statements is TRUE regarding the fees or costs involved in filing a complaint under the Reserve Bank Integrated Ombudsman Scheme?
Completed!
Final Score: 0/200
SBI CBO BANKING KNOWLEDGE encompasses the latest Reserve Bank of India (RBI) circulars, digital banking limits, and statutory updates relevant for the 2026 Circle Based Officer exam. Key areas include the Integrated Ombudsman Scheme 2026, Mudra Tarun Plus limits (₹20 Lakh), and the Unified Lending Interface (ULI). Mastering these topics is essential for the high-weightage professional knowledge section.
About 200 MCQ test for SBI CBO BANKING KNOWLEDGE
| Topic | SBI CBO BANKING KNOWLEDGE |
| Total Questions | 200 MCQs |
| Level | Moderate to Hard (Officer Level) |
| Target Exams | SBI CBO 2026 EXAM |
| Updated | 2026 |
Mastering SBI CBO BANKING KNOWLEDGE is crucial for clearing the SBI CBO 2026 EXAM. In this guide, we cover the 200 most important questions derived from recent financial developments. The next part of 200 more MCQs will be published later. This comprehensive mock test is specifically designed for SBI CBO 2026 EXAM candidates to help you master concepts like Digital Lending, IBC amendments, and revised KYC norms quickly.
Why This SBI CBO BANKING KNOWLEDGE Test Matters?
Exam Weightage: The Banking Knowledge section forms the core of the objective test in CBO, directly testing your operational and regulatory awareness.
Important Topics: The SBI CBO BANKING KNOWLEDGE syllabus covers:
- RBI Circulars (2025-2026): Updates on Ombudsman, KYC, and Digital Lending.
- Government Schemes: PMEGP, MUDRA (Tarun Plus), and PMJJBY/PMSBY revisions.
- Legal Frameworks: SARFAESI, IBC, and Negotiable Instruments Act.
Practice SBI CBO BANKING KNOWLEDGE (Live Mock Test)
Quick Revision: Key Facts for SBI CBO BANKING KNOWLEDGE
1. UPI Limits: UPI Lite limit is ₹1,000/txn and ₹5,000 wallet balance; Hospital/Education UPI limit is ₹5 Lakh.
2. Mudra Tarun Plus: New category for loans ₹10 Lakh to ₹20 Lakh for existing successful borrowers.
3. PMEGP Limits: Project cost cap is ₹50 Lakh for Manufacturing and ₹20 Lakh for Services.
4. DICGC Coverage: Insurance cover is ₹5 Lakh per depositor per bank; Premium is 12 paise per ₹100.
5. IBC Thresholds: Minimum default to initiate CIRP is ₹1 Crore; Pre-Pack Insolvency is ₹10 Lakh.
6. Digital Lending: Default Loss Guarantee (DLG) is capped at 5% of the portfolio amount.
7. Inoperative Accounts: Classified if no customer-induced transaction occurs for over 2 years.
8. Unclaimed Deposits: Transferred to DEA Fund after 10 years; Interest rate is determined by RBI (currently 3%).
9. SHG Loans: Collateral-free limit under DAY-NRLM is up to ₹20 Lakh.
10. Stand-Up India: Loans between ₹10 Lakh and ₹1 Crore for SC/ST and Women for Greenfield projects.
11. Housing Loans: PSL limit for Metros (Tier 1) is ₹50 Lakh; Tier 2 is ₹45 Lakh.
12. Cheque Truncation: “Continuous Clearing” (Phase 2) requires clearing within T+3 hours.
13. Positive Pay System: Mandatory facility for banks to offer for cheques > ₹50,000.
14. NBFC Ombudsman: Covers NBFCs with asset size of ₹100 Crore and above.
15. Fiscal Deficit: Target for 2026-27 is set at 4.3% of GDP.
Frequently Asked Questions: SBI CBO BANKING KNOWLEDGE
What constitutes SBI CBO BANKING KNOWLEDGE?
It includes General Banking, RBI Circulars, Credit Management, Digital Banking, and Government Schemes relevant to the 2026 syllabus.
What is the Re-KYC period for High-Risk customers?
High-Risk customers must undergo Re-KYC once every 2 years.
What is the maximum subsidy under PMEGP for rural areas?
For Special Category beneficiaries in rural areas, the subsidy is 35% of the project cost.
Does the Ombudsman Scheme cover NBFCs?
Yes, NBFCs with assets of ₹100 Crore and above are covered under the RB-IOS 2026.
What is the new limit for Tarun Plus in Mudra Yojana?
The limit is above ₹10 Lakh up to ₹20 Lakh.
What is the compensation for delayed ATM reversal?
₹100 per day of delay beyond T+5 calendar days.
What is the FDI limit in the Insurance sector for 2026?
The FDI limit in the Insurance sector is 100%.
What is the purpose of the ULI platform?
The Unified Lending Interface (ULI) enables frictionless credit by streamlining data flow (land records, etc.) to lenders.
What is the lock-in period for PMEGP subsidy?
The subsidy is kept in a TDR with a lock-in period of 3 years.
Can a minor open an NPS account?
Yes, under the “NPS Vatsalya” scheme, minors can have an account managed by guardians.
What is the “Greenium” in Sovereign Green Bonds?
It is the lower yield (interest rate) the government pays because investors accept lower returns for green assets.
What is the provisioning for Sub-Standard Assets?
15% on the secured portion and 25% on the unsecured portion.
Who is the Nodal Agency for PMEGP?
Khadi and Village Industries Commission (KVIC) is the single national nodal agency.
What is the maximum imprisonment for cheque dishonour?
Up to 2 years under Section 138 of the NI Act.
Is the UDGAM portal for claiming deposits?
No, UDGAM is only for searching; claims must be filed directly with the respective bank.