CAIIB · Bank Financial Management · Module A — International Banking
CAIIB BFM Unit 8 — Role of EXIM Bank, RBI, Exchange Control in India – FEMA, and FEDAI and Others: 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 8 — Role of EXIM Bank, RBI, Exchange Control in India – FEMA, and FEDAI and Others (Module A — International Banking). The CAIIB Mock Centre holds 256 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 A256 MCQs in the Mock Centre5 free belowPaper on 12 December
Key facts examiners test from this unit
EXIM Bank — EXIM Bank, set up under its own Act of 1981, is India's principal long-term financier of exports and imports, down to lending foreign governments money to buy from India.
RBI and exchange control — RBI guards the rupee's external value, directs and fines authorised persons under FEMA section 11, and collects returns to build India's external data.
FEMA 1999 and remittances — FEMA (civil law, in force 1.6.2000) sorts current account payments into prohibited (Schedule I), Government-approved (II) and AD-allowed (III), with LRS at USD 2,50,000 a year.
Changed since the textbook
FEM (Authorised Persons) Regulations, 2026 in force (6 May 2026). Notification FEMA 401/2026-RB of 30 April 2026, in force 6 May 2026: fresh authorisations only as AD Category-I, II or III; no fresh FFMC licences (existing FFMCs continue); a new Forex Correspondent category acting as agent of an AD Category-I or II for money changing; AD Category-II may handle trade transactions up to ₹25 lakh each. Source: RBI Notification FEMA
RBI recognises FEDAI as a self-regulatory organisation (14 Jan 2026). RBI recognised FEDAI as a self-regulatory organisation for all authorised dealers under its Omnibus Framework for SROs. FEDAI has one year to bring its functioning and governance in line with the framework and to open membership to all categories of authorised dealers. Source: RBI press release
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 256 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
Exchange control in India was first introduced under:
Why (d): Exchange control began under the Defence of India Rules around the Second World War (the textbook dates them 1935; controls actually began in September 1939). (a) is wrong: FERA 1947 came later and made the controls law. (b) is wrong: FERA 1973 replaced FERA 1947. (c) is wrong: FEMA 1999 replaced FERA 1973.
Question 2 of 5
After investing abroad, the Indian Party must obtain share certificates or other evidence of investment within:
Why (a): The textbook gives six months (or longer if RBI allows). (b) is wrong: 60 days is the textbook's period for repatriating dues (90 days under the 2022 rules). (c) is wrong: The textbook gives six months. (d) is wrong: The textbook gives six months.
Question 3 of 5
Per the textbook, dues from the overseas JV/WOS, such as dividend, royalty and technical fees, must be repatriated within:
Why (c): The textbook requires dues from the JV/WOS, such as dividend, royalty and technical fees, to be repatriated to India within 60 days of falling due. That is the pre-2022 rule: since 22 August 2022 the Overseas Investment Regulations, 2022 give 90 days. (a) is wrong: Six months is the time for share certificates or other evidence of investment. (b) is wrong: 30 days is shorter than the 60 days the textbook allows. (d) is wrong: 180 days is three times the 60 days the textbook allows.
Question 4 of 5
An unpaid foreign currency export bill is crystallised into a rupee liability at:
Why (d): Rule 2.1(b) applies the TT selling rate. (a) is wrong: That is the rate for buying the bill. (b) is wrong: That applies when proceeds are realised. (c) is wrong: Banks use their own rates.
Question 5 of 5
In an interbank forward contract with an option of delivery, the buyer bank must give the seller bank notice of:
Why (b): Rule 8.10 requires 2 working days' notice. (a) is wrong: The rule requires 2 working days. (c) is wrong: 3 working days defines a known holiday. (d) is wrong: The rule requires 2 working days.
0 of 5 answered.
Traps in this unit
EVDLP is a loan, not a grant.
No fine without a hearing.
STAT 5 is FCNR(B), not NRE and NRO.
Practise all 256 questions on Unit 8. 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.