CAIIB · Advanced Bank Management · Module C — Credit Management
CAIIB ABM Unit 24 — Restructuring, Rehabilitation and Recovery: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper I of the December 2026 cycle (Sunday 6 December 2026)
This is the free practice page for CAIIB ABM Unit 24 — Restructuring, Rehabilitation and Recovery (Module C — Credit Management). The CAIIB Mock Centre holds 114 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.
ABM · Module C114 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
Credit default, stressed assets and wilful default — default takes many forms; stressed assets include likely defaults; wilful default is intentional and has five defined events.
Options for stressed assets — rectify if possible, restructure if viable, recover if neither; compromise on present value; write-off does not end liability.
RBI's restructuring guidelines and the MSME frameworks — restructure only viable accounts, never retrospectively; MSMEs got a committee-based framework and special windows.
Changed since the textbook
Expected credit loss directions for banks (27 April 2026). RBI issued final directions on asset classification, provisioning and income recognition that move banks to expected credit loss provisioning from 1 April 2027. Loans fall into three stages; a loan more than 30 days past due is presumed to have a significant rise in credit risk (Stage 2), and the 90-day NPA norm continues as the backstop for Stage 3. The first-day impact may be spread over four years. Source: RBI final ECL directions (summary by Sansa Legal)
RBI's instructions consolidated into 238 Master Directions (28 November 2025). RBI consolidated more than 9,000 circulars and directions into 238 Master Directions, effective 28 November 2025. The Prudential Framework (2019) and the asset classification and restructuring instructions the textbook cites now sit in these directions. Source: New commercial bank regulations
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 114 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 of these is NOT listed as diversion of funds?
Why (d): Early repayment to the lender is not diversion; the others are listed forms. (a) is wrong: It is listed diversion. (b) is wrong: It is listed diversion. (c) is wrong: It is listed diversion.
Question 2 of 5
Under SARFAESI, how long a demand notice must the secured creditor give before taking possession?
Why (d): The secured creditor may take possession after serving a 60-day notice of demand. (a) is wrong: It is not the notice period. (b) is wrong: It is not the notice period. (c) is wrong: 90 days is the NPA test.
Question 3 of 5
How is a tie resolved in the MSME committee?
Why (b): Decisions are by simple majority; the chairperson has the casting vote in a tie. (a) is wrong: RBI does not decide cases. (c) is wrong: The borrower does not vote. (d) is wrong: The casting vote settles it.
Question 4 of 5
From which reference date did the timelines apply to borrowers with exposure of ₹2,000 crore and above?
Why (c): The reference date is 7 June 2019 for ₹2,000 crore and above; 1 January 2020 for ₹1,500 crore to below ₹2,000 crore. (a) is wrong: It is not a reference date. (b) is wrong: It is for the next band. (d) is wrong: That applies below ₹1,500 crore.
Question 5 of 5
For how many sectors did the K.V. Kamath Committee specify ratio thresholds?
Why (b): Lenders considered the five ratios for eligible borrowers in 26 key sectors. (a) is wrong: Five is the number of ratios. (c) is wrong: It is not the number. (d) is wrong: It is not the number.
0 of 5 answered.
Traps in this unit
Standard assets need provisions.
Not every default is wilful.
A ₹15 lakh claim does not go to a DRT.
Practise all 114 questions on Unit 24. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the ABM Online Mock Centre unlocks all 4,600+ ABM 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.