CAIIB · Advanced Bank Management · Module D — Compliance in Banks and Corporate Governance
CAIIB ABM Unit 28 — Compliance Governance Structure: 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 28 — Compliance Governance Structure (Module D — Compliance in Banks and Corporate Governance). The CAIIB Mock Centre holds 128 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 D128 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
The compliance structure and responsibilities at the top — compliance runs through a clear structure from the Board to the branches, with the CCO reporting to the top and every compliance officer reporting to the CCO.
The compliance department at the corporate office — a formal, independent compliance department under a senior CCO identifies requirements, assesses risk and runs the bank's compliance machinery.
Overseas oversight, MIS, committees and functional departments — head office watches overseas branches monthly and quarterly, reports to the Board and ACB on a fixed calendar, and makes every functional department own its compliance.
Changed since the textbook
Divergence disclosure thresholds tightened to 5% and 5% (11 October 2022). RBI's circular RBI/2022-23/130 (DOR.ACC.REC.No.74/21.04.018/2022-23) revised the thresholds for disclosing divergence in the Notes to Accounts, for the financial statements of the year ended 31 March 2024 onwards: disclosure is required if the additional provisioning assessed by RBI exceeds 5% of the reported profit before provisions and contingencies, or the additional gross NPAs identified by RBI exceed 5% of the published incremental gross NPAs (UCBs: 5% and 15%). Source: RBI circular RBI/2022-23/130
Mandatory leave for staff in sensitive positions (9 July 2021). RBI's circular RBI/2021-22/70 (DoR.ORG.REC.31/21.06.017/2021-22) requires commercial banks, including small finance, local area and regional rural banks, and co-operative banks to send employees in sensitive positions or areas of operation, as listed by each bank's Board, on mandatory leave of not less than 10 working days in a single spell every year, without prior intimation. While on leave they have no access to physical or virtual work resources except internal or corporate email. Banks had six months to comply. Source: RBI
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 128 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
In India, who is a member of the Product Group Committee that vets new products and services?
Why (a): In the domestic set-up the CCO is a member of the Product Group Committee, which vets all new products and services from the compliance angle before launch. (b) is wrong: Internal audit stays separate. (c) is wrong: External auditors are not members. (d) is wrong: RBI has no nominee on it.
Question 2 of 5
Of which kind of committee may the CCO not be a member?
Why (a): The CCO may not join any committee that conflicts with the role, including one dealing with purchases or sanctions. (b) is wrong: The CCO may be a member of it. (c) is wrong: The CCO may be a member of or invitee to the CORM. (d) is wrong: The CCO may be a member of or invitee to the CRMC.
Question 3 of 5
What is the minimum scale of the senior officer designated as a functional department's compliance officer?
Why (c): Functional heads designate a senior officer, minimum in Scale IV or V, as the department's compliance officer. (a) is wrong: Scale II is too junior. (b) is wrong: Scale I is too junior. (d) is wrong: The textbook sets a minimum of Scale IV or V.
Question 4 of 5
How soon after receiving RBI's final Risk Assessment Report must a listed bank disclose divergence beyond the threshold?
Why (b): Head office Finance discloses the divergence not later than 24 hours after receiving the final RAR, as SEBI's circular of 31 October 2019 requires. (a) is wrong: The limit is 24 hours. (c) is wrong: The limit is 24 hours. (d) is wrong: The limit is 24 hours.
Question 5 of 5
To whom should an effective audit function report?
Why (b): An effective audit function is independent and reports to the Board without conflict or interference with management. (a) is wrong: Audit must be independent of business. (c) is wrong: Marketing is a business function. (d) is wrong: Audit reports to the Board.
0 of 5 answered.
Traps in this unit
RBI is told before, not after, a CCO change.
The Board, not the MD & CEO, approves the compliance policy.
Vet first, launch later.
Practise all 128 questions on Unit 28. 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.