CAIIB · Banking Regulations & Business Laws · Module A — Regulations and Compliance
CAIIB BRBL Unit 4 — Returns, Inspection, Winding Up, Mergers & Acquisitions: 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 4 — Returns, Inspection, Winding Up, Mergers & Acquisitions (Module A — Regulations and Compliance). 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 A179 MCQs in the Mock Centre5 free belowPaper on 20 December
Key facts examiners test from this unit
Accounts, balance sheet and audit — accounts are signed by the manager and three directors, filed with the RBI in three months and published in six; auditors need the RBI's approval, and special audits are at the bank's cost.
Returns and records — banks file monthly, quarterly and yearly returns under Sections 18, 24, 25, 26, 27 and 31; they keep records 5–8 years under the 1985 Rules and PMLA records at least five years, and may return paid instruments after keeping true copies.
Inspection, scrutiny and the BFS — the RBI inspects under Section 35 (risk-based, through SPARC) and must inspect at the Centre's direction; scrutiny reports reach the bank only on request; the BFS, chaired by the Governor, oversees supervision, including PCA.
Changed since the textbook
Calendar fortnights for CRR and SLR returns (11 December 2025). The RBI's CRR and SLR directions now use calendar fortnights (1st–15th and 16th–month-end) instead of alternate Fridays; Form A becomes a single fortnightly return and Form VIII monthly, from 15 December 2025. Source: RBI circular RBI/2025-26/148
Consolidated, function-wise Master Directions (28 November 2025). The RBI issued about 238 consolidated Master Directions for 11 types of regulated entities and repealed about 9,445 circulars; its rules on financial statements, returns and other matters for commercial banks now sit in these function-wise directions. Source: TeamLease RegTech
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
Which of these must the auditor of a banking company state in the audit report under Section 30(3) of the BR Act?
Why (c): Section 30(3) adds bank-specific matters to the audit report: whether the information and explanations required were satisfactory, whether the transactions seen were within the bank's powers, whether branch returns were adequate for the audit, and whether the profit and loss account shows a true balance. (a) is wrong: ALM adequacy is not one of the Section 30(3) matters. (b) is wrong: Compliance with CRR and SLR is not a Section 30(3) statement. (d) is wrong: The soundness of credit appraisal is not one of the Section 30(3) matters.
Question 2 of 5
A State Government department asks its bank to return the paid cheques drawn on its accounts. Is it a 'customer' for the purposes of Section 45Z?
Why (d): For Section 45Z, 'customer' expressly includes a Government department and a corporation incorporated by or under any law, so the bank may return the department's paid instruments after keeping a true copy of their relevant parts. (a) is wrong: The Act expressly includes Government departments. (b) is wrong: Section 45Z applies to the department's accounts with the bank. (c) is wrong: Holding a loan account has nothing to do with it.
Question 3 of 5
What must the Central Government receive before acting under Section 36AE?
Why (a): Section 36AE operates on receipt of a report from the RBI on the bank's affairs. (b) is wrong: Shareholders do not trigger acquisition. (c) is wrong: No court order is needed. (d) is wrong: A public petition is not the trigger.
Question 4 of 5
Which of these is a ground on which the RBI may apply to the High Court for a bank's winding up under Section 38(3)?
Why (a): Section 38(3) lets the RBI apply for winding up where, among other things, the bank fails to meet the Section 11 capital requirement, becomes disentitled to carry on banking business (for instance when its licence is cancelled), is prohibited from accepting deposits, or would harm depositors by continuing. (b) is wrong: A fall in profits is not itself a ground. (c) is wrong: Being under PCA is supervisory action, not a ground for winding up. (d) is wrong: Removal of a chairman is not a ground for winding up.
Question 5 of 5
Kosi Bank keeps contravening a provision of the BR Act even after the RBI's written notice. What may the RBI do under Section 38?
Why (d): Under Section 38(3), the RBI may apply to the High Court for winding up where, among other grounds, the bank continues to contravene a provision of the Act after the RBI's written notice; the court, not the RBI, orders the winding up. (a) is wrong: The RBI applies; the High Court orders the winding up. (b) is wrong: Section 38 provides for winding up through the court, not on-the-spot cancellation. (c) is wrong: Section 38 deals with winding up, not fines.
0 of 5 answered.
Traps in this unit
All directors sign if there are three or fewer.
Bank auditors owe a duty to depositors and the public.
Connected transactions count across all of the customer's accounts.
Practise all 179 questions on Unit 4. 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.