CAIIB · Advanced Business & Financial Management · Module D — Emerging Business Solutions
CAIIB ABFM Unit 20 — Startup Finance: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper III of the December 2026 cycle (Sunday 13 December 2026)
This is the free practice page for CAIIB ABFM Unit 20 — Startup Finance (Module D — Emerging Business Solutions). The CAIIB Mock Centre holds 180 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five practice questions with explanations, and the traps that cost marks.
ABFM · Module D180 MCQs in the Mock Centre5 free belowPaper on 13 December
Key facts examiners test from this unit
Startups and the Startup India initiative — Startup India (DPIIT, January 2016) recognises scalable new ventures and eases their costs and compliance.
Definition, challenges, state policy and the pitch — young, small and innovative (or scalable), never a split-off; pitch the problem, the fix and the team.
Government programmes and competitions — startups get easier tenders, faster exit and many challenges, awards and research supports.
Changed since the textbook
Income-tax Act, 2025 in force (1 April 2026). From 1 April 2026 the Income-tax Act, 2025 replaced the Income-tax Act, 1961, with its provisions renumbered. Source: EY Global Tax News
Over 2.23 lakh DPIIT-recognised startups (31 March 2026). DPIIT recognised more than 55,200 startups in 2025-26, the most in any year since 2016, taking the total to over 2.23 lakh by 31 March 2026; recognised startups reported more than 23 lakh direct jobs. Source: Inc42
5 free practice questions — tap an option
Five practice questions from this unit. Answers lock on the first tap, exactly as in the exam, and an explanation opens underneath. The Mock Centre has all 180 questions on this unit, from easy to tough, with caselets and key-in numericals, why every other option is wrong and the exam tip — and tracks your score and revision dates.
Question 1 of 5
What is the main aim of the Startup India Yatra?
Why (d): The Yatra travels across Tier 2 and Tier 3 cities to identify entrepreneurs outside the metros and connect them with incubation and mentoring. (a) is wrong: States are ranked under the States' Startup Ranking. (b) is wrong: The Yatra travels within India. (c) is wrong: Auditing seed funds is not its purpose.
Question 2 of 5
Under DPIIT's startup definition as revised on 4 February 2026, which of these companies can be recognised as a startup (other than a deep-tech startup)?
Why (b): From 4 February 2026 an entity can be recognised as a startup for up to ten years from incorporation if its turnover has not exceeded ₹200 crore in any year (the 2019 limit was ₹100 crore), so the 6-year-old company qualifies. The 12-year-old firm is past ten years (only deep-tech startups get 20), a business formed by splitting up an existing one is never a startup, and ₹250 crore breaches the cap. (a) is wrong: It is past the ten-year limit for a non-deep-tech startup. (c) is wrong: A business formed by splitting up an existing one is not a startup. (d) is wrong: ₹250 crore breaches the ₹200 crore turnover cap.
Question 3 of 5
Which body selects incubators for SISFS and monitors the scheme?
Why (d): DPIIT's Expert Advisory Committee evaluates and shortlists incubators, allots seed money and monitors progress. (a) is wrong: NITI Aayog only has a representative on the EAC. (b) is wrong: SIDBI manages the Fund of Funds, not SISFS. (c) is wrong: The ISMC selects startups, not incubators.
Question 4 of 5
What support can a startup receive from an incubator under SISFS?
Why (a): Startups can get up to ₹20 lakh as a grant for proof of concept, prototype or product trials, and up to ₹50 lakh for market entry or commercialisation through convertible debentures, debt or debt-linked instruments. (b) is wrong: It swaps the amounts and the instruments. (c) is wrong: ₹5 crore is the incubator's grant. (d) is wrong: SISFS has no such loan.
Question 5 of 5
Under the Stand-Up India loan scheme, what holding must an SC/ST or woman entrepreneur have in a non-individual enterprise?
Why (c): In non-individual enterprises, at least 51% of the shareholding and the controlling stake must be held by an SC/ST or woman entrepreneur, aged at least 18. (a) is wrong: Full ownership is not required. (b) is wrong: The test is 51% and control. (d) is wrong: A directorship alone is not enough.
0 of 5 answered.
Traps in this unit
80% rebate is on patents; 50% on trademarks.
The turnover limit applies to every year since incorporation.
A split-off entity never qualifies.
Practise all 180 questions on Unit 20. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the ABFM Online Mock Centre unlocks all 4,000+ ABFM questions, the full-length papers with caselets and key-ins, module mocks and Smart Revision for 18 months (₹1,499).
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