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JAIIB IE&IFS Unit 44 — Para Banking and Financial Services Provided by Banks: 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 44 — Para Banking and Financial Services Provided by Banks (Module D — Financial Products and Services). The Mock Centre holds 66 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 D66 MCQs in the Mock Centre5 free belowPaper on 1 November 2026

Key facts examiners test from this unit

  1. Para banking = beyond normal banking; Master Circular 1-7-2015 → Master Direction 26-5-2016 (added investment advisory); routes = departmental OR subsidiary (Sec 6(1) businesses; Sec 19(1) subsidiaries, BR Act).
  2. Definitions map: factoring — 2011 Act; hire purchase — 1972 Act; MF — SEBI 1996; investment advisory — SEBI 2013; PMS — SEBI 1993; pension — PFRDA 2014; IDF — notification 21-11-2011.
  3. Caps: 10% per financial subsidiary; 20% aggregate; non-financial 10→30% window; deposit-taking NBFC ≤10%; REIT/InvIT ≤10%; AIF Cat III barred; factoring aggregate 10%; VCF >10% strategic.

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
Para banking activities are those a bank carries out:
Why (b): Para banking activities are those a bank carries out OUTSIDE its normal day-to-day work — leasing, insurance distribution, mutual fund sales and the like, beyond core deposits-and-loans.
Question 2 of 5
Banks may do para-banking:
Why (c): Banks may conduct para-banking DEPARTMENTALLY OR THROUGH A SUBSIDIARY — both routes exist, with activity-specific rules deciding which applies.
Question 3 of 5
Maximum equity a bank SPONSORING an IDF-NBFC can contribute:
Why (c): A bank SPONSORING an IDF-NBFC may contribute equity in the 30–49% band, so the MAXIMUM is 49% — enough to anchor, never enough to own outright.
Question 4 of 5
A Primary Dealer is authorised to:
Why (b): A Primary Dealer is authorised to BUY AND SELL GOVERNMENT SECURITIES — the gilt market-maker that underwrites auctions and quotes two-way prices.
Question 5 of 5
Mutual fund business WITH risk participation only through:
Why (b): Mutual fund business WITH risk participation (asset management) runs only through a SUBSIDIARY or JOINT VENTURE — the same separation principle as insurance.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Sec 6(1)Sec 19(1)Permissible businesses vs subsidiary formation
1-7-201526-5-2016Master Circular vs Master Direction
Practise all 66 questions on Unit 44. 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 43: Pension Products · Unit 45: REITs and InvITs → · 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.