CAIIB · Bank Financial Management · Module A — International Banking
CAIIB BFM Unit 5 — Facilities for Exporters and Importers: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper II of the December 2026 cycle (Saturday 12 December 2026)
This is the free practice page for CAIIB BFM Unit 5 — Facilities for Exporters and Importers (Module A — International Banking). The CAIIB Mock Centre holds 321 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.
BFM · Module A321 MCQs in the Mock Centre5 free belowPaper on 12 December
Key facts examiners test from this unit
Regulators and exporters' guidelines — DGFT controls the goods, RBI the money, the ICC the documents and FEDAI bank practice; every export is declared and realised on time.
Facilities for exporters — the AD bank's exceptions desk for commission, discounts, late or lost proceeds, and foreign currency holdings.
Export finance: packing credit — pre-shipment credit on the lower of FOB and domestic value, less margin, for 180 days (up to 360), liquidated from the export bill.
Changed since the textbook
New TReDS Master Direction (23 Jun 2026). RBI's Master Direction on the Trade Receivables Discounting System, effective at once: insurance companies and Government credit guarantee fund trusts join as participants; financiers may insure discounted receivables, but the premium cannot be passed on to the MSME seller; financiers may re-discount or sell discounted receivables to other financiers. It covers domestic MSME receivables. Source: CorpLaw Updates
Export realisation period back to 9 months (5 Jun 2026). Notification FEMA 23(R)/(8)/2026-RB amended the 2015 export regulations, replacing "fifteen months" with "nine months" for realising export value, until the 2026 regulations start. Source: CorpLaw Updates
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 321 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
A refund of export proceeds, for goods re-imported because of poor quality, may be allowed by:
Why (a): The textbook says the refund can be allowed by the AD through whom the export proceeds were originally received. (b) is wrong: It must be the same AD that received the proceeds. (c) is wrong: The DGFT only certifies the position on export incentives. (d) is wrong: A foreign bank cannot allow a remittance from India.
Question 2 of 5
EEFC balances can be used for:
Why (b): The textbook says EEFC balances can be used for any current account transaction, including repayment of packing credit, whether in rupees or foreign currency. (a) is wrong: The textbook allows current account transactions. (c) is wrong: Use is not limited to ACU countries. (d) is wrong: Use is not limited to gold.
Question 3 of 5
The forfaiter's commitment fee is:
Why (b): The textbook gives a commitment fee of 0.50–1.50% a year, and it is not refundable. (a) is wrong: The fee is 0.50–1.50% a year and non-refundable. (c) is wrong: The fee is 0.50–1.50% a year and non-refundable. (d) is wrong: There is a commitment fee as well as the discount charge.
Question 4 of 5
Why can a forfaiter finance 100% of a bill's value without recourse, while a factor keeps back 20–25%?
Why (a): A forfaiter buys bills or notes that are avalised or guaranteed by the importer's bank, so it can pay 100% of their value without recourse to the exporter; a factor, dealing in open-account receivables, typically advances 75–80% and holds back the rest until the debtor pays. (b) is wrong: The exporter gives no collateral in a without-recourse purchase. (c) is wrong: Forfaiting relies on the bank guarantee, not ECGC. (d) is wrong: Forfaiting finances medium-term bills, not sight bills.
Question 5 of 5
For non-capital goods, trade credit may run for up to:
Why (b): The textbook gives 1 year or the operating cycle, whichever is less. (a) is wrong: 3 years is the limit for capital goods. (c) is wrong: 6 months is the ordinary import payment period. (d) is wrong: The lower of the two applies.
0 of 5 answered.
Traps in this unit
Margin on FOB, not CIF. Flexibility on margin and security, never on viability.
Forfaiting is finance, not insurance.
TT buying rate is not the D/A bill rate. The customer's credit date is not the realisation date.
Practise all 321 questions on Unit 5. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the BFM Online Mock Centre unlocks all 7,600+ BFM 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.