CAIIB · Banking Regulations & Business Laws · Module B — Important Acts/Laws & Legal Aspects of Banking Operations, Part A
CAIIB BRBL Unit 12 — Law Relating to Securities and Modes of Charge – I: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 29 October 2026 · Paper IV of the December 2026 cycle (Sunday 20 December 2026)
This is the free practice page for CAIIB BRBL Unit 12 — Law Relating to Securities and Modes of Charge – I (Module B — Important Acts/Laws & Legal Aspects of Banking Operations, Part A). The CAIIB Mock Centre holds 179 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.
BRBL · Module B179 MCQs in the Mock Centre5 free belowPaper on 20 December
Key facts examiners test from this unit
Charges and the mortgage — a charge is the lender's right over assets; land is charged by mortgage, the transfer of an interest in specific immovable property, made by registered, attested deed unless title deeds are deposited.
Simple mortgage and mortgage by conditional sale — a simple mortgagee sues for sale and recovers any shortfall personally; a mortgagee by conditional sale can only foreclose, with no personal remedy.
Usufructuary, English and anomalous mortgages — a usufructuary mortgagee holds the property and its rents until paid, with no sale or forfeiture; an English mortgage transfers the property absolutely subject to reconveyance; an anomalous mortgage is any other kind.
Changed since the textbook
RBI's instructions consolidated (28 Nov 2025). The RBI consolidated over 9,000 circulars into 238 Master Directions; legal audit of title documents for exposures of ₹5 crore and above continues. Source: Vinod Kothari
Title deeds after loan closure (12 Jun 2025). The Kerala High Court held a bank had no right to keep original title deeds after closing the loan; with the deeds lost, it imposed ₹50,000 costs. Source: Verdictum
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 179 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 instrument that effects a mortgage called?
Why (d): The instrument by which the transfer is effected is the mortgage deed. (a) is wrong: A sale deed transfers ownership. (b) is wrong: A memorandum may merely record a deposit; it is not the general name. (c) is wrong: An encumbrance certificate shows registered transactions; it does not create a mortgage.
Question 2 of 5
A mortgagee in possession, who is to apply the rents first to interest and then to principal, lets the property fall into disrepair and keeps no accounts of the rents. Which duty under Section 76 has he broken?
Why (a): Section 76 requires a mortgagee in possession to manage the property as a person of ordinary prudence would manage his own, to use his best endeavours to collect the rents and profits, to make necessary repairs out of them, and to keep clear, full and accurate accounts; loss caused by his failure is debited against him. (b) is wrong: The rents are applied to the debt, not handed over monthly. (c) is wrong: No court leave is needed to collect rents. (d) is wrong: Section 76 sets duties of management, not a duty to sell.
Question 3 of 5
What must the mortgagor do on a certain date under an English mortgage?
Why (b): In an English mortgage the mortgagor binds himself to repay the mortgage money on a certain date. (a) is wrong: No deposit of deeds is involved in an English mortgage. (c) is wrong: The mortgagor does not sell; the transfer is already absolute, subject to reconveyance. (d) is wrong: Stamp duty is not the covenant.
Question 4 of 5
Which provision of the Registration Act makes an earlier equitable mortgage prevail over a later registered mortgage deed?
Why (d): The proviso to Section 48 of the Registration Act makes a mortgage by deposit of title deeds take effect against any mortgage deed subsequently executed and registered. (a) is wrong: Section 47 makes registered documents operate from execution. (b) is wrong: Section 17 lists documents that must be registered. (c) is wrong: Section 50 favours registered over unregistered documents.
Question 5 of 5
When an owner transfers his right by an instrument, what is that instrument for the transferee?
Why (b): The instrument of transfer is a title deed for the transferee and may amount to conclusive proof of the transfer. (a) is wrong: It is not a copy. (c) is wrong: It is more than a receipt. (d) is wrong: A will takes effect on death; it is not this instrument.
0 of 5 answered.
Traps in this unit
A conditional-sale mortgagee cannot sue for sale or chase other assets.
A usufructuary mortgagee does not become owner after 30 years.
The property's location does not matter; the place of delivery does.
Practise all 179 questions on Unit 12. The free CAIIB demo opens Units 1–2 of every paper with full explanations; the BRBL Online Mock Centre unlocks all 5,800+ BRBL 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.