Free 2026 JAIIB Mock Exam
JAIIB Paper 2: Principles & Practices of Banking
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 |
|---|---|---|---|
| Banker's Right of Set-Off | 0 / 2 | 0% | WEAK - REVISION NEEDED |
| Agent and Principal Relationship | 0 / 2 | 0% | WEAK - REVISION NEEDED |
| SARFAESI Statutory Timelines | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Hypothecation vs Pledge vs Mortgage | 0 / 2 | 0% | WEAK - REVISION NEEDED |
| Safe Custody Legal Relationship | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| Safe Custody Relationship | 0 / 1 | 0% | WEAK - REVISION NEEDED |
| PSL Target for Domestic Scheduled Commercial Banks | 0 / 1 | 0% | WEAK - REVISION NEEDED |
Detailed Solved Question Key & Explanations
For a bank to exercise its Right of Set-Off between a customer's debit balance (loan) and credit balance (deposit) accounts, which of the following is a mandatory legal condition?
Right of Set-Off requires 'mutuality of debt', meaning accounts must be in the same name and in the same right/capacity (sole debt against sole deposit). A bank cannot set off an individual partner's personal loan against the firm's partnership account without consent.
When a bank collects cheques, dividend warrants, or bills of exchange on behalf of a customer, what is the legal relationship between the bank and the customer during the transit/collection phase?
While collecting cheques or bills for collection, the bank acts as an Agent for the customer (Principal). Once funds are realized and credited to the operative account, the relationship changes to Debtor (Bank) and Creditor (Customer).
Under Section 13(2) of the SARFAESI Act, 2002, how much notice time must a secured creditor bank give the defaulting borrower to discharge their liabilities before taking possession of security?
Section 13(2) mandates a 60-day demand notice. If the borrower fails to pay within 60 days, the bank can proceed under Section 13(4) to take physical possession of assets, subject to a 30-day public sale notice.
For a bank to exercise its Right of Set-Off between a customer's debit balance and credit balance accounts, which of the following is a mandatory legal requirement?
Set-off requires 'mutuality of debt', meaning the accounts must be held by the same customer in the same right and capacity (e.g. sole debt against sole deposit). A bank cannot set off a customer's sole debt against their trust or partnership account.
Which type of security charge is created when moveable goods remain in physical possession of the borrower, but equitable constructive possession and right to seize upon default are granted to the bank?
Hypothecation creates a charge on moveable property without delivery of physical possession (the borrower retains possession for business operations). In contrast, Pledge requires physical or constructive delivery of goods to the banker.
Hypothecation = Charge on Moveables with Borrower PossessionWhen a customer deposits sealed valuables, gold ornaments, or property documents with a bank for safe custody, what is the exact legal relationship between the bank and the customer?
For safe custody of valuables, the bank accepts temporary possession without taking ownership, acting as the Bailee, while the depositing customer is the Bailor under the Indian Contract Act.
Safe Custody = Bailee (Bank) / Bailor (Customer)Which type of security charge is created when moveable goods remain in physical possession of the borrower, but equitable constructive possession and right to seize are granted to the bank?
Hypothecation creates a charge on moveable property without delivery of physical possession (borrower retains possession). Pledge requires physical delivery of goods to the banker.
Hypothecation = Charge on Moveables with Borrower PossessionWhen a bank collects cheques, drafts, or bills of exchange on behalf of a customer, what is the legal relationship between the bank and the customer?
While collecting cheques or bills for collection, the bank acts as an Agent for the customer (Principal). Once funds are collected and credited to the account, the relationship changes to Debtor (Bank) and Creditor (Customer).
When a customer deposits sealed valuables or packets with a bank for safe custody, what is the legal relationship between the bank and the customer?
For safe custody of valuables, the bank accepts possession of goods without transferring ownership, acting as the Bailee, while the customer is the Bailor.
Safe Custody = Bailee (Bank) / Bailor (Customer)Under RBI guidelines, what is the mandatory overall Priority Sector Lending (PSL) target for Domestic Scheduled Commercial Banks (excluding RRBs and Small Finance Banks) as a percentage of Adjusted Net Bank Credit (ANBC)?
Domestic Scheduled Commercial Banks and Foreign Banks with 20 branches and above must achieve an overall Priority Sector Lending target of 40% of Adjusted Net Bank Credit (ANBC) or Credit Equivalent Amount of Off-Balance Sheet Exposure (CEOBE), whichever is higher.
Overall PSL Target = 40% of ANBC / CEOBEWelcome Back
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