JAIIB · Principles & Practices of Banking · Module A — General Banking Operations
JAIIB PPB Unit 12 — Payment and Collection of Cheques and Other Negotiable Instruments: Free MCQs with Explanations
By Swarnakshi Jha (ex-banker) · Updated 20 September 2026 · Paper 2 of the November 2026 cycle (22 November 2026)
This page is a free slice of our JAIIB PPB question bank for Unit 12 — Payment and Collection of Cheques and Other Negotiable Instruments (Module A — General Banking Operations). The Mock Centre holds 72 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.
PPB · Module A72 MCQs in the Mock Centre5 free belowPaper on 22 November 2026
Key facts examiners test from this unit
Definitions: PN Sec. 4 (promise, 2 parties, money only), BoE Sec. 5 (order, 3 parties), cheque Sec. 6 (bill on a banker, on demand, incl. electronic/truncated); HIDC = consideration + before maturity + good faith.
Payment scrutiny: branch, date (post-dated no; stale 3 months), payee, order/bearer, words-vs-figures (Sec. 18 — WORDS prevail), crossing, endorsements, alteration (Sec. 87 voids; drawer's full signature authenticates; CTS — no alterations), mutilation, drawer's signature, stops/ attachments/death.
Forgery map: drawer's signature forged → NO mandate, no protection (Canara Bank 1987); forged ENDORSEMENT → Sec. 85(1) order/85A draft protection; bearer → 85(2) ('once a bearer always a bearer'); crossed due-course payment → Sec. 128; non-apparent alteration → Sec. 89.
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 cheque is defined in:
Why (c): Sec. 6: a bill of exchange drawn on a specified banker, payable on demand — including electronic and truncated cheques.
Question 2 of 5
A cheque older than what period is 'stale' and not paid?
Why (b): A cheque older than 3 MONTHS from its date is STALE and not paid — RBI cut the period from six months effective 1 April 2012 under Section 35A BR Act.
Question 3 of 5
The offence of cheque dishonour is in:
Why (b): Sec. 138: dishonour for insufficiency of funds (or exceeding arrangement) — a criminal offence.
Question 4 of 5
The 'not negotiable' crossing (Sec 130) has the effect that:
Why (b): Not-negotiable crossing shifts theft risk to the taker: buy a stolen cheque and you inherit the thief's (nil) title.
Question 5 of 5
A HOLDER IN DUE COURSE is one who takes the instrument:
Why (b): HDC status is negotiability's crown: value + timing + good faith = better title than the transferor — the feature 'not negotiable' crossing disables.
0 of 5 answered.
Traps in this unit
Confusable A
Confusable B
The difference
Promissory note
Bill of exchange
PROMISE, 2 parties vs ORDER, 3 parties
Drawer's forged signature
Forged endorsement
No mandate — bank liable vs Sec. 85 protects the payer
Practise all 72 questions on Unit 12. The free demo opens a slice of every subject with the same explanations; the PPB Online-only pass unlocks all 3,280 PPB 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.
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.
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