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JAIIB PPB Unit 14 — Responsibility of Collecting 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 14 — Responsibility of Collecting Bank (Module A — General Banking Operations). The Mock Centre holds 43 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 A43 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. Sec. 131 protects the COLLECTING bank; Sec. 131A extends it to DRAFTS; conversion = wrongful interference with the true owner's instrument.
  2. Four cumulative conditions: crossed BEFORE receipt, for a CUSTOMER, as MERE AGENT, in GOOD FAITH WITHOUT NEGLIGENCE — the bank bears the burden of proving them.
  3. Holder for value (value before realisation) ≠ agent — protection lost; specially-crossed-to-another-bank cheques must be REFUSED.

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
Section 131 of the NI Act protects the:
Why (b): Sec. 131 shields the COLLECTING banker against the true owner's claim, given its four conditions.
Question 2 of 5
The conditions of the collecting bank's protection are found in:
Why (c): The conditions of the collecting bank's protection are found in the NEGOTIABLE INSTRUMENTS ACT — Section 131 carries all four conditions.
Question 3 of 5
Courts decide the collecting bank's negligence by examining:
Why (b): The two windows: ONBOARDING diligence + COLLECTION vigilance (enquiry when circumstances demand).
Question 4 of 5
The collecting bank acts as HOLDER FOR VALUE (not mere agent) when it:
Why (b): Advance against uncleared effects converts the bank into holder for value: rights improve (HDC possibilities) but Sec 131's agent-only shield falls away.
Question 5 of 5
The two stages at which the collecting bank's negligence is examined are:
Why (b): The case-law grid: diligence failures at either gate — onboarding or the specific collection — cost the bank its Sec 131 shield.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Sec. 131Sec. 85/89/128Collecting bank's shield vs paying bank's shields
Sec. 131Sec. 131ACheques vs drafts
Practise all 43 questions on Unit 14. 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 13: Responsibility of Paying Bank · Unit 15: Ancillary Services → · 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.