CAIIB · Advanced Business & Financial Management · Module A — The Management Process
CAIIB ABFM Unit 5 — Directing: 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 5 — Directing (Module A — The Management Process). The CAIIB Mock Centre holds 153 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 A153 MCQs in the Mock Centre5 free belowPaper on 13 December
Key facts examiners test from this unit
Directing: meaning, characteristics, importance and elements — directing guides, motivates, counsels, supervises and leads people to goals; it starts action and runs through every level, all the time.
Leadership: meaning, features, roles and qualities — leadership is learned influence that makes people pursue goals eagerly; a leader plays five roles and needs ten qualities.
Leadership models — five styles, from authoritarian to transformational; the right one depends on the situation, the team and the change needed.
Changed since the textbook
Government PLI framework for public sector bank employees (19 November 2024). A performance-linked incentive framework for public sector bank employees issued by the Department of Financial Services (dated 19 November 2024, as reported) links the incentive for officers in Scale IV and above to individual performance, up to 365 days of basic pay, while workmen and officers up to Scale III receive at most 15 days' basic pay plus DA. Bank unions objected that the PLI should be linked to each bank's overall performance and be uniform for employees and officers up to Scale VII. Source: ETV Bharat and HR Katha reports, September 2026
RBI: surprise mandatory leave for staff in sensitive positions (9 July 2021). RBI's circular on Mandatory Leave for Employees Posted in Sensitive Positions or Areas of Operation (9 July 2021), replacing its 23 April 2015 circular, asked banks to frame a policy, within six months, to send such employees on leave of at least 10 working days in a single spell every year without prior intimation, keeping an element of surprise. During the leave the employee has no access to physical or virtual resources related to the work, except the internal or corporate e-mail available to all staff. Source: RBI notification
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 153 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
Which feature of leadership says that no single model is better than all others?
Why (c): The textbook's fifth feature says there is no single model superior to all others; it depends on how the circumstance is managed. (The textbook prints "position" where the point is the situation.) (a) is wrong: That feature is about intelligence, maturity and personality. (b) is wrong: That feature is about leadership involving many people. (d) is wrong: That feature is about steering the group to the aim.
Question 2 of 5
"Put yourself in the shoes of those around you" describes which leadership quality?
Why (c): The textbook uses this saying for compassion: understanding employees' issues, complaints, needs and goals improves human relations. (a) is wrong: Intelligence is about analysing problems. (b) is wrong: Objectivity is about deciding on facts without bias. (d) is wrong: Responsibility is about accountability for results.
Question 3 of 5
In transformational leadership, the leader:
Why (a): The textbook says the transformational leader inspires followers with a clear vision, encourages and empowers them to achieve it, and serves as an example of the vision. (b) is wrong: That is transactional leadership. (c) is wrong: That is authoritarian leadership. (d) is wrong: That is delegative leadership.
Question 4 of 5
Which of these is a hygiene factor in Herzberg's theory?
Why (d): Herzberg's hygiene factors are company policies, supervision, relationships, working conditions, compensation and status. (a) is wrong: Growth is a motivator. (b) is wrong: Recognition is a motivator. (c) is wrong: Responsibility is a motivator.
Question 5 of 5
In Lasswell's model of communication, which element does a bank examine when it checks whether customers changed their behaviour after an SMS campaign?
Why (c): Lasswell's last question, 'with what effect', is about the result of the message on its audience, here whether customers acted on the SMS campaign. 'In which channel' is the medium (SMS), and 'to whom' is the audience reached, not the outcome. (a) is wrong: 'Who' is the sender. (b) is wrong: The channel is the medium, SMS. (d) is wrong: 'To whom' is the audience, not the outcome.
0 of 5 answered.
Traps in this unit
Every manager directs, not only top management.
Leadership is influence, not position.
Roles are what a leader does; qualities are what a leader has.
Practise all 153 questions on Unit 5. 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).
Independent study aid — not affiliated with, endorsed by, or sponsored by the Indian Institute of Banking & Finance (IIBF). Exam pattern, dates, fees and passing criteria are set by IIBF — always confirm the current rules at iibf.org.in. CAIIB content follows rules and developments up to IIBF's cut-off of 30 June 2026 (where a rule changed later, the update box says so); verify from official sources before relying on them in practice.