Free 2026 CAIIB Mock Exam
CAIIB Paper 1: Advanced Bank Management
Full 2026 IIBF pattern mock exam environment. Answer questions, flag items for review, and receive an instant diagnostic scorecard with topic breakdowns free.
Exam Attempt Completed
IIBF Passing Threshold is 50%. Your final scorecard breakdown is below.
Topic Performance & Weakness Diagnostics
| Topic Tested | Score | Accuracy (%) | Strength Status |
|---|---|---|---|
| Working Capital for MSMEs | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Large Exposure limits | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Altman Z-Score Model | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Standard and Sub-Standard Asset Provisioning | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Forensic Accounting & Related Party Siphoning | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Debt Service Coverage Ratio (DSCR) | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Tandon Committee Method II (MPBF) | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Forward Rate Calculation & Interest Rate Parity | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Risk Weighted Assets (RWA) & Capital Requirement | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| MCLR Component calculation | 0 / 1 | 0% | WEAK - REVISION NEEDED |
Detailed Solved Question Key & Explanations
A small manufacturing enterprise projects an annual turnover of Rs. 480 Lakhs. According to Nayak Committee recommendations for MSMEs (working capital limit up to Rs. 5 Crores), what is the minimum bank finance requirement?
As per Nayak Committee norms for MSMEs, Working Capital requirement is assessed at 25% of projected turnover (Rs. 120 Lakhs), promoter margin is 5% (Rs. 24 Lakhs), and minimum Bank Limit = 20% of Rs. 480 Lakhs = Rs. 96 Lakhs.
Bank Limit = 20% of Projected Annual TurnoverUnder the RBI Large Exposure Framework (LEF), what is the maximum sum of all exposure values of a bank to a single counterparty at any point of time?
Under the RBI Large Exposure Framework, the exposure limit to a single counterparty is 20% of the bank's Tier 1 Capital. The board can approve an additional 5% (raising the cap to 25%) under exceptional circumstances.
In Altman's Z-Score model for predicting corporate bankruptcy, if a manufacturing company has a computed Z-Score of 1.50, which zone of financial health does this place the borrower in?
In the Altman Z-Score model for public manufacturers: Z-Score < 1.81 is the 'Distress Zone' (insolvency likely); 1.81 <= Z-Score <= 2.99 is the 'Grey Zone' (moderate risk); Z-Score > 2.99 is the 'Safe Zone'. A score of 1.50 signals distress.
For a standard commercial real estate (residential housing sector) advance, what is the standard asset provisioning rate mandated by the RBI?
RBI standard asset provisioning rates are: (a) Agricultural & MSME standard accounts = 0.25%; (b) Commercial Real Estate (CRE) - Residential Housing = 0.75%; (c) CRE - General/Others = 1.00%; (d) Other Standard advances = 0.40%.
During a credit audit of an NPA borrower, the auditor notices substantial unsecured loans given to group associate companies with zero interest rates while the company pays 12% interest on bank borrowings. This pattern is a primary indicator of:
Diverting low/zero-interest funds to related entities while servicing high-cost bank debt is a primary RBI Red Flag Indicator (EWS #4 for Funds Diversion & Siphoning).
Diverted Funds = Non-Operating Advances to Related PartiesA borrowing firm has Net Profit (PAT) of Rs. 60 Lakhs, Depreciation of Rs. 30 Lakhs, Annual Interest Expense of Rs. 15 Lakhs, and Term Loan Principal Repayment of Rs. 30 Lakhs due this year. What is the DSCR?
DSCR = (PAT + Depreciation + Interest) / (Interest + Principal Repayment) = (60 + 30 + 15) / (15 + 30) = 105 / 45 = 2.33.
DSCR = (PAT + Depr + Interest) / (Interest + Principal Repay)Under Tandon Committee Method II, a borrower has Total Current Assets of Rs. 370 Lakhs and Current Liabilities (other than bank borrowings) of Rs. 140 Lakhs. What is the Maximum Permissible Bank Finance (MPBF)?
Under Method II of Tandon Committee norms, MPBF = 0.75 * (Current Assets - Non-Bank Current Liabilities) = 0.75 * (370 - 140) = 0.75 * 230 = Rs. 173 Lakhs.
MPBF = 0.75 * (Total CA - Non-Bank CL)The Spot USD/INR rate is 83.00. The 6-month risk-free interest rate in India is 7.0% p.a. and in USA is 5.0% p.a. According to Interest Rate Parity (IRP), what is the expected 6-month USD/INR forward rate?
Forward Rate = Spot Rate * [ (1 + r_INR * t) / (1 + r_USD * t) ] = 83.00 * [ (1 + 0.07*0.5) / (1 + 0.05*0.5) ] = 83.00 * (1.035 / 1.025) = Rs. 83.81.
F = S * [ (1 + r_INR * t) / (1 + r_USD * t) ]A bank advances a commercial loan of Rs. 200 Crores to a corporate borrower with a Risk Weight of 75% under Basel III Standardised Approach. If minimum RBI CRAR requirement is 11.5%, how much total capital must the bank hold for this loan?
RWA = Exposure * Risk Weight = 200 Crores * 75% = Rs. 150 Crores. Capital Required = RWA * 11.5% = 150 * 0.115 = Rs. 17.25 Crores.
Capital Required = (Exposure * Risk Weight %) * RBI CRAR %Which of the following is NOT one of the four components prescribed by the RBI for calculating the Marginal Cost of Funds based Lending Rate (MCLR)?
MCLR is calculated using the *Marginal* Cost of Funds (not the average cost of deposits), negative carry on CRR, operating costs, and tenor premium. The average cost of deposits was used under the older Base Rate system.
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