JAIIB · November 2026
JAIIB free mock test
Twenty original questions across PPB, AFM and RBWM, to show you where you stand. Pick an answer and you’ll see the working straight away.
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A short free test, not a full paper: IIBF’s papers have 100 questions in 2 hours. Rules as on 30 June 2026. IIBF’s own notice decides the exam.
PPB: Principles & Practices of Banking
Question 1 · PPB
Under Section 31 of the Reserve Bank of India Act, 1934, a promissory note payable to bearer on demand can be issued only by:
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Answer: the RBI or, where the Act expressly allows it, the Central Government
Section 31 bars everyone in India other than the RBI, or the Central Government where the Act expressly authorises it, from issuing such an instrument. This protects the RBI’s monopoly over currency: a bearer note on demand would work like money.
Source: Reserve Bank of India Act, 1934, Section 31
Question 2 · PPB
A payee signs only his name on the back of a cheque, without naming the person to whom it is to be paid. This is:
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Answer: a blank indorsement
An indorsement with the indorser’s signature alone is in blank. If it also names the person to be paid, it is in full. A cheque indorsed in blank can pass by delivery.
Source: Negotiable Instruments Act, 1881, Section 16
Question 3 · PPB
A cheque crossed ‘Not Negotiable’ is stolen, and the thief passes it to an innocent person for value. Under Section 130 of the Negotiable Instruments Act, that person:
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Answer: does not have, and cannot give, a better title than the thief had
The words ‘not negotiable’ do not stop transfer. They only mean that the taker has no better title than the person from whom he took it. A thief has no title, so neither does this taker.
Source: Negotiable Instruments Act, 1881, Section 130
Question 4 · PPB
A borrower defaults on a loan against pledged goods. Under Section 176 of the Indian Contract Act, 1872, the bank as pawnee may sell the goods:
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Answer: after giving the pawnor reasonable notice of the sale
On default the pawnee may sue on the debt and keep the goods as collateral, or sell them after giving the pawnor reasonable notice of the sale. No court decree is needed.
Source: Indian Contract Act, 1872, Section 176
Question 5 · PPB
Under Section 59 of the Transfer of Property Act, 1882, when the principal money is ₹100 or more, which mortgage can be created without a registered instrument?
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Answer: Mortgage by deposit of title deeds
Section 59 requires a registered instrument for a mortgage securing ₹100 or more, and makes an exception only for a mortgage by deposit of title deeds, also called an equitable mortgage.
Source: Transfer of Property Act, 1882, Section 59
Question 6 · PPB
A documentary credit subject to UCP 600 does not say whether it is revocable. It is treated as:
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Answer: irrevocable
Article 3 of UCP 600 says that a credit is irrevocable even if there is no indication to that effect.
Source: ICC Uniform Customs and Practice for Documentary Credits (UCP 600), Article 3
Question 7 · PPB
In an 11-character IFSC, the fifth character is:
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Answer: the digit 0
The first four characters are letters showing the bank, the fifth is 0 (zero), and the last six identify the branch.
Source: RBI, FAQs on National Electronic Funds Transfer (NEFT)
Question 8 · PPB
Virtue ethics judges a banker’s conduct mainly by:
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Answer: the moral character the person shows
Virtue ethics, which goes back to Aristotle, asks what a person of good character would do. The greatest benefit is utilitarianism, and duty whatever the result is deontology.
Source: Aristotle, Nicomachean Ethics; IIBF, Principles & Practices of Banking, Module D
AFM: Accounting & Financial Management for Bankers
Question 9 · AFM
A firm’s cash book shows a bank balance of ₹75,000. Cheques of ₹12,000 it issued have not been presented, and cheques of ₹8,000 it deposited have not been credited. What balance should the bank statement show?
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Answer: ₹79,000
Cheques not yet presented are still in the bank’s balance, so add them; cheques not yet credited are not, so deduct them. ₹75,000 + ₹12,000 − ₹8,000 = ₹79,000.
Source: Bank reconciliation method; IIBF, Accounting & Financial Management for Bankers, Module A
Question 10 · AFM
A machine costing ₹2,00,000 is depreciated at 20% a year on the written-down value method. What is the depreciation for the second year?
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Answer: ₹32,000
Year 1: 20% of ₹2,00,000 = ₹40,000, leaving ₹1,60,000. Year 2: 20% of ₹1,60,000 = ₹32,000. ₹40,000 is the straight-line answer.
Source: Written-down value method of depreciation; IIBF, AFM, Module A
Question 11 · AFM
Opening stock is ₹8 lakh, purchases ₹42 lakh, closing stock ₹10 lakh and sales ₹50 lakh. What is the gross profit ratio on sales?
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Answer: 20%
Cost of goods sold = 8 + 42 − 10 = ₹40 lakh. Gross profit = 50 − 40 = ₹10 lakh. Gross profit ratio = 10 ÷ 50 = 20%. 25% is the markup on cost, not the ratio on sales.
Source: Gross profit ratio; IIBF, AFM, Module C
Question 12 · AFM
How much must be deposited today at 10% a year, compounded annually, to receive ₹1,33,100 after 3 years?
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Answer: ₹1,00,000
Present value = 1,33,100 ÷ (1.10)³ = 1,33,100 ÷ 1.331 = ₹1,00,000.
Source: Time value of money; IIBF, AFM, Module C
Question 13 · AFM
Fixed costs are ₹3,00,000 a year. A product sells at ₹50 and its variable cost is ₹30 a unit. What is the break-even point?
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Answer: 15,000 units
Contribution per unit = 50 − 30 = ₹20. Break-even = 3,00,000 ÷ 20 = 15,000 units.
Source: Break-even analysis; IIBF, AFM, Module D
Question 14 · AFM
A deposit pays 12% a year, compounded quarterly. What is its effective annual rate?
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Answer: 12.55%
Quarterly rate = 3%. Effective rate = (1.03)⁴ − 1 = 12.55%. 12.36% is half-yearly compounding and 12.68% is monthly.
Source: Effective annual rate; IIBF, AFM, Module C
RBWM: Retail Banking & Wealth Management
Question 15 · RBWM
Which of these best describes retail banking?
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Answer: Many small-value accounts and loans for individuals and small businesses
Retail banking serves individuals and small businesses through a large number of standard, low-value products, which spreads risk across many customers.
Source: IIBF, Retail Banking & Wealth Management, Module A
Question 16 · RBWM
A home loan of ₹10,00,000 is taken at 12% a year for 10 years, with monthly reducing-balance EMIs. What is the EMI, to the nearest rupee?
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Answer: ₹14,347
Monthly rate r = 1%, n = 120. EMI = P × r × (1 + r)ⁿ ÷ [(1 + r)ⁿ − 1] = 10,00,000 × 0.01 × 3.30039 ÷ 2.30039 = ₹14,347. ₹18,333 is the flat-rate figure, and ₹10,000 is only the first month’s interest.
Source: Reducing-balance EMI formula; IIBF, RBWM, Module B
Question 17 · RBWM
A bank’s policy caps total fixed obligations at 50% of net monthly income. An applicant’s net monthly income is ₹80,000 and he already pays an EMI of ₹10,000. What is the highest new EMI allowed?
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Answer: ₹30,000
50% of ₹80,000 = ₹40,000. Less the existing EMI of ₹10,000, the new EMI can be up to ₹30,000.
Source: Fixed obligations to income ratio; IIBF, RBWM, Module B
Question 18 · RBWM
The services marketing mix adds three Ps to product, price, place and promotion. They are:
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Answer: People, process and physical evidence
Booms and Bitner added people, process and physical evidence because services differ from goods: they are intangible, and are usually produced and used at the same time. In a bank these are the staff, the steps in serving a customer and the branch or app.
Source: Booms and Bitner (1981); IIBF, RBWM, Module C
Question 19 · RBWM
A fund returned 14% with a standard deviation of 16%. The risk-free rate is 6%. What is its Sharpe ratio?
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Answer: 0.50
Sharpe ratio = (return − risk-free rate) ÷ standard deviation = (14 − 6) ÷ 16 = 0.50.
Source: Sharpe ratio; IIBF, RBWM, Module D
Question 20 · RBWM
A mutual fund scheme has assets of ₹110 crore, liabilities of ₹10 crore and 5 crore units. What is its NAV per unit?
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Answer: ₹20
NAV = (assets − liabilities) ÷ units = (110 − 10) ÷ 5 = ₹20.
Source: Net asset value calculation; IIBF, RBWM, Module D
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Questions about this test
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