CAIIB · Advanced Bank Management · Module D — Compliance in Banks and Corporate Governance
CAIIB ABM Unit 32 — Fraud and Vigilance in Banks: 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 32 — Fraud and Vigilance in Banks (Module D — Compliance in Banks and Corporate Governance). The CAIIB Mock Centre holds 178 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 D178 MCQs in the Mock Centre5 free belowPaper on 6 December
Key facts examiners test from this unit
Fraud and forgery — fraud is intentional deception for unfair gain, actual or attempted; since July 2024 a bank must give a show cause notice, at least 21 days and a reasoned order before declaring a fraud, then file the FMR within 14 days.
Where frauds happen — private banks report the most frauds by number, mainly card and internet; public sector banks lose the most money, mainly in advances.
Cyber frauds — cyber-attacks steal, extort or disrupt through six main threats; banks report every payment fraud, even attempts, to CPFIR within 7 calendar days.
Changed since the textbook
RBI Annual Report 2025-26: fraud data (29 May 2026). Banks reported 10,114 frauds of ₹1 lakh and above in 2025-26, fewer than in 2024-25, but the amount rose to ₹48,021 crore. Advances accounted for 8,640 cases and ₹40,774 crore (about 85% of the amount), including 314 older cases of ₹30,199 crore reported afresh after the Supreme Court's 2023 judgment on natural justice; card and internet frauds were 293 cases and ₹29 crore. Source: Bank fraud cases drop to 10,114 in 2025-26 but value reported rises to ₹48,021 crore
Authentication Mechanisms for Digital Payment Transactions Directions, 2025 (25 September 2025). RBI issued directions, effective 1 April 2026, requiring two factors of authentication for digital payments, with at least one factor dynamic (unique to the transaction), and allowing issuers to use risk-based checks. An issuer that does not comply must compensate the customer fully for the loss. Source: RBI Authentication Mechanisms for Digital Payment Transactions Directions, 2025
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 178 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 difference between black hat and white hat hackers?
Why (b): Black hat hackers break in to take control of or steal or destroy data; white hat hackers do so to find and fix weaknesses. (a) is wrong: The difference is purpose, not device. (c) is wrong: The difference is purpose, not target. (d) is wrong: White hats do not attack.
Question 2 of 5
When is the quarterly return (RBR) on theft, burglary, dacoity and robbery due?
Why (a): The RBR covers all such cases in the quarter and is submitted within 15 days of the quarter's end. (b) is wrong: 7 days is for the individual FMG report. (c) is wrong: The period is 15 days. (d) is wrong: The RBR runs from the quarter end, not the incident.
Question 3 of 5
Whose guidelines must public sector banks and AIFIs follow when examining staff accountability in fraud cases?
Why (d): PSBs and AIFIs conduct the examination of staff accountability as per CVC guidelines. (a) is wrong: The MCA administers company law. (b) is wrong: SEBI regulates securities markets. (c) is wrong: The IBA does not issue these guidelines.
Question 4 of 5
A bank finds that a customer's registered mobile number appears on the DoT's Mobile Number Revocation List. What should it do?
Why (d): RBI asks regulated entities to use the Mobile Number Revocation List to clean their customer databases and to monitor accounts linked to revoked numbers, which are often used as money-mule accounts or in cyber fraud. A revoked number alone is not proof of fraud, so freezing the account or reporting it as a fraud would be premature. (a) is wrong: A revoked number alone does not justify a freeze. (b) is wrong: OTPs to a revoked number may reach someone else. (c) is wrong: A revoked number is not proof of fraud.
Question 5 of 5
Which of these is NOT one of the ways complaints are disposed of in the Vigilance Complaint Register?
Why (a): Complaints are filed without inquiry, filed after verification, passed to the Complaints Cell, passed to the CBI or taken up for investigation; none is returned for a fee. (b) is wrong: Filing without inquiry is a category. (c) is wrong: Passing to the CBI is a category. (d) is wrong: Departmental investigation is a category.
0 of 5 answered.
Traps in this unit
Detection date is when the fraud came to light, not the approval date.
The FMR is needed whatever the amount.
Private banks lead by number, not by amount.
Practise all 178 questions on Unit 32. 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.