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JAIIB IE&IFS Unit 39 — Lease Finance and Hire Purchase: 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 39 — Lease Finance and Hire Purchase (Module D — Financial Products and Services). The Mock Centre holds 83 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 D83 MCQs in the Mock Centre5 free belowPaper on 1 November 2026

Key facts examiners test from this unit

  1. Lease = right to USE for consideration; lessor owns/lessee uses/lease rental pays; akin to BAILMENT (Sec 148; lessor = bailor); AS 19; deemed sale → GST on rentals.
  2. History: First Leasing Company of India 1973 (Farouk Irani + A.C. Muthiah; sole till 1980) → ICICI entry 1983 → banks allowed 1994 → Dahotre Committee (bank funding norms) → GE Capital's foreign wave.
  3. Finance (capital) lease: full economic life, non-cancellable, lessee maintains and bears obsolescence; operating lease: short slice (25-year aircraft leased 5 years), cancellable, LESSOR maintains — but the textbook's Check-Your-Progress key flips the maintenance answer to 'operating'; reproduce the book's key on that one.

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
The asset's OWNER in a lease contract:
Why (b): The LESSOR is the owner of the asset in a lease contract — he keeps legal title while renting out the use of the asset to the lessee.
Question 2 of 5
Who remains OWNER but parts with possession and economic use:
Why (c): The LESSOR remains the owner but parts with possession and economic use — that split (title with one party, use with the other) is the essence of leasing.
Question 3 of 5
A finance lease is also known as a:
Why (a): A finance lease is also known as a CAPITAL lease — same animal, two names: the lessee effectively finances the asset's whole life through rentals.
Question 4 of 5
An advantage of lease finance to the LESSOR:
Why (b): The lessor's advantage is RENTAL INCOME WHILE RETAINING OWNERSHIP — a steady income stream plus the asset's title and residual value stay with him.
Question 5 of 5
In hire purchase, the asset's owner is also called the:
Why (b): In hire purchase the owner is also called the HIREE (or hire-vendor), while the user-buyer is the hirer — keep the mirror pair hirer/hiree straight.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
LessorLesseeOwner vs user
HirerHireeBuyer-user vs owner-vendor
Practise all 83 questions on Unit 39. 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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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.