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JAIIB IE&IFS Unit 22 — Banking Laws — RBI Act 1934 & BR Act 1949: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 1 of the November 2026 cycle (1 November 2026)

This page is a free slice of our JAIIB IE&IFS question bank for Unit 22 — Banking Laws — RBI Act 1934 & BR Act 1949 (Module C — Indian Financial Architecture). The Mock Centre holds 111 questions on this unit alone, every one with a why-right / why-wrong explanation; below are the facts examiners keep returning to, five of those questions to try, and the traps that cost marks.

IE&IFS · Module C111 MCQs in the Mock Centre5 free belowPaper on 1 November 2026

Key facts examiners test from this unit

  1. RBI Act: Hilton Young 1926 → business 1-4-1935; Burma till 1942, nationalised via 1948 Transfer Act (1-1-1949); capital ₹5 crore (Sec 4); 5 chapters.
  2. Governance: Sec 3 incorporation, Sec 7 Centre directions/Board management, ≤4 DGs, 4 local boards (Sec 9), 6 meetings/quarterly (Sec 13), 5-year terms.
  3. Business: Sec 17 permitted (incl. SDF via 2018 amendment), Sec 18A validity, Sec 19 prohibitions (no general lending/deposit interest), Sec 20/21/21A government banking (states by agreement).

5 free practice questions — tap an option

Five basic questions from this unit. Answers lock on the first tap, exactly as in the exam, and a short explanation opens underneath. The Mock Centre adds the moderate and tough questions, why every other option is wrong, the concept capsule and the exam tip — with your score and revision dates tracked.

Question 1 of 5
Banking in India is mainly governed by:
Why (b): Banking in India is governed by the twin statutes: THE RBI ACT 1934 (the central bank) AND THE BR ACT 1949 (the banks).
Question 2 of 5
The BR Act 1949 does NOT apply to:
Why (b): PACS and land-development credit institutions stay outside; cooperative BANKS came under a modified BR Act regime through Section 56 — with the 2020 Ordinance strengthening RBI's hand after PMC-type failures.
Question 3 of 5
Under BR Act Sec 8, banking companies are prohibited from:
Why (b): The trading ban keeps banks out of commodity commerce and its risks, with narrow realisation-of-security exceptions.
Question 4 of 5
Under BR Act Sec 26/26A, deposits unoperated for 10 years feed into:
Why (b): The DEA Fund warehouses unclaimed money for depositor-awareness use while preserving the customer's right to claim through the bank.
Question 5 of 5
Licence cancellation appeals under BR Act Sec 22 lie to:
Why (b): The Act routes licensing appeals to the Central Government — a check on the regulator's gatekeeping power.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
19351949RBI's start vs nationalisation/BR Act
Sec 17Sec 19RBI's permitted vs prohibited business
Practise all 111 questions on Unit 22. The free demo opens a slice of every subject with the same explanations; the IE&IFS Online-only pass unlocks all 3,032 IE&IFS questions, the full and module mocks, Smart Revision and the Readiness Score for one year (₹1,299). Not sure where you stand? Take the free 10-question test first.
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← Unit 21: Indian Banking Structure · Unit 23: Development Financial Institutions → · All IE&IFS units · JAIIB 2026 guide

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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. Regulatory figures verified as of September 2026; verify from official sources before relying on them in practice.