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JAIIB PPB Unit 13 — Responsibility of Paying Bank: 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 13 — Responsibility of Paying Bank (Module A — General Banking Operations). The Mock Centre holds 44 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 A44 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. Sec. 31: the drawee BANKER must honour when funds suffice and are properly applicable; wrongful dishonour → damages to the DRAWER (traders: beyond the cheque amount — reputation).
  2. Protection map: 85(1) order-cheque endorsements, 85(2) bearer, 85A drafts, 89 non-apparent alterations, 128 crossed-as-crossed; all conditioned on PAYMENT IN DUE COURSE (Sec. 10).
  3. Drawer's forged signature = NO mandate, NO protection (Canara Bank vs Canara Sales, 1987); joint-mandate one-signature forgery = bank's loss (Bihta Co-op, 1967).

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 law on payment of cheques and the banker's protections is contained in:
Why (c): The NI Act houses the payment duty (Sec. 31), the due-course standard (Sec. 10) and the protections (85, 85A, 89, 128).
Question 2 of 5
The paying bank's duty to honour cheques is in:
Why (b): Sec. 31: honour when funds are sufficient and properly applicable — else compensate the drawer.
Question 3 of 5
Canara Bank vs Canara Sales Corporation (SC 1987) settled that:
Why (b): The Supreme Court anchored the no-mandate doctrine: forged instruments cannot bind the account; mere failure to spot forgery in statements isn't negligence disentitling the customer.
Question 4 of 5
A cheque is presented after the drawer's DEATH is known to the bank. The bank:
Why (b): Notice of death terminates the banker's authority to pay the deceased's cheques (payment before notice, in due course, is protected).
Question 5 of 5
Funds are NOT 'properly applicable' to a cheque when:
Why (b): 'Sufficient funds properly applicable' excludes legally encumbered balances — the Sec 31 duty presupposes freely usable money.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Drawer's forged signatureForged endorsementNO protection ever vs Sec. 85 protects the due-course payer
Sec. 128Sec. 129Discharge for compliant payment vs liability for breach of crossing
Practise all 44 questions on Unit 13. 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.
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← Unit 12: Payment and Collection of Cheques and Other Negotiable Instruments · Unit 14: Responsibility of Collecting Bank → · All PPB 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.