CAIIB · Banking Regulations & Business Laws · Module C — Important Acts/Laws & Legal Aspects of Banking Operations, Part B
CAIIB BRBL Unit 23 — The Law of Limitation: 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 23 — The Law of Limitation (Module C — Important Acts/Laws & Legal Aspects of Banking Operations, Part B). The CAIIB Mock Centre holds 120 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 C120 MCQs in the Mock Centre5 free belowPaper on 20 December
Key facts examiners test from this unit
Purpose, definitions and the bar — the Limitation Act, 1963 fixes time limits for suits, appeals and applications; late ones are dismissed even if limitation is not pleaded.
Computing time and fresh starts — exclude the starting day, court holidays, copying time, notices, stays and absence abroad; a signed acknowledgement or part payment before expiry starts a fresh period.
Schedule periods for bankers — three years for loans, deposits, current accounts and bills; twelve for mortgage money and execution; thirty for foreclosure and Government suits.
Changed since the textbook
Balance sheet need not name the creditor (29 Jul 2025). In IL&FS Financial Services v. Adhunik Meghalaya Steels, the Supreme Court held that a borrower's balance sheet, read with its other admitted financial statements, was a valid acknowledgement of a subsisting liability under Section 18 even though the creditor was not named; an acknowledgement must relate to a subsisting liability and show an intention to admit the debtor-creditor relationship. Source: Verdictum
OTS proposal and balance sheet revive limitation (22 Oct 2024). In Vidyasagar Prasad v. UCO Bank, the Supreme Court upheld the admission of UCO Bank's insolvency application: the borrower company's balance sheet entries, read with the auditor's note, and its one-time settlement proposal were acknowledgements of the debt under Section 18, so the application was within limitation. 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 120 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
Under Section 2(l), 'suit' does not include:
Why (d): Section 2(l) says that 'suit' does not include an appeal or an application. (a) is wrong: A plaint starts a suit. (b) is wrong: That is a suit. (c) is wrong: A civil claim by plaint is a suit.
Question 2 of 5
Which of these cannot be saved by Section 5?
Why (a): Section 5 does not apply to suits; appeals and applications may be admitted for sufficient cause. (b) is wrong: Appeals can be saved. (c) is wrong: Applications can be saved. (d) is wrong: Review applications can be saved.
Question 3 of 5
A borrower's loan fell due on 1 June 2022. On 15 May 2025 he pays ₹10,000 towards interest, and the payment is recorded in a letter he signs. Until when can the bank sue?
Why (a): Under Section 19, a payment made before the period expires, and acknowledged in a writing signed by the payer, starts a fresh three years from the payment: 15 May 2025 to 15 May 2028. (b) is wrong: Limitation still applies after a payment. (c) is wrong: The payment restarted the clock. (d) is wrong: The fresh period runs from the payment, not from the old expiry.
Question 4 of 5
An acknowledgement under Section 18 must be:
Why (a): Section 18 requires an acknowledgement in writing signed by the party or his authorised agent. (b) is wrong: A signature is required. (c) is wrong: Notarisation is not required. (d) is wrong: Stamping is not required.
Question 5 of 5
The period for a bill payable at sight runs from:
Why (b): Article 32 runs three years from when the bill is presented. (a) is wrong: The date of the bill is not used. (c) is wrong: Acceptance is not the test. (d) is wrong: Protest is not the test.
0 of 5 answered.
Traps in this unit
Waiting for the defendant to plead limitation.
Counting the judgment day.
Running a demand loan from the demand.
Practise all 120 questions on Unit 23. 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.