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JAIIB PPB Unit 16 — Financial Inclusion and Financial Literacy: 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 16 — Financial Inclusion and Financial Literacy (Module A — General Banking Operations). The Mock Centre holds 60 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 A60 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. FI = affordable delivery to the disadvantaged; exclusion = its absence; basic services = payments, savings, loans, insurance (+pension); FI (supply) + literacy (demand) = twin pillars.
  2. BF facilitates only (NGOs, SHGs, KVKs, post offices, panchayats — never political functionaries); BC transacts (small credit/deposits, recovery, remittances) — Board policy + due diligence; bank fully liable; commission from the BANK only; ICT/biometric processing.
  3. NBFC-ND can be BC (no co-mingling, no forced bundling); USB = officer-visited low-cost structure; BC complaints → Ombudsman after 60 days (RB-IOS 2021). [Law update, Sep 2026] The scheme in force since 1 July 2026 is RB-IOS 2026 (₹30 lakh + ₹3 lakh; 90-day window).
Law update, September 2026. Current position: the CLM of November 2020 stands replaced by the RBI (Co-Lending Arrangements) Directions 2025, effective 1 January 2026 — all lending covered, minimum 10% retention by each lender, DLG capped at 5%.

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
Financial exclusion correctly means:
Why (b): Financial EXCLUSION is the condition where financial services do NOT reach the disadvantaged — the unbanked and underbanked reality that inclusion policy attacks.
Question 2 of 5
Which activity falls within a Business Correspondent's scope?
Why (b): The BC transacts: small credit/deposits, recovery of principal/interest, micro-products, remittances.
Question 3 of 5
Under the SHG-Bank Linkage Programme, scheduled commercial banks are advised to:
Why (b): The totality principle: banks fund the members' FULL credit needs through the group.
Question 4 of 5
Financial literacy is best defined as:
Why (b): Financial literacy means UNDERSTANDING AND USING financial products — the knowledge, skills and attitude for informed money decisions, not mere account opening.
Question 5 of 5
RSETI (Rural Self Employment Training Institutes) is an initiative of:
Why (b): RSETI — Rural Self Employment Training Institutes — is an initiative of the MINISTRY OF RURAL DEVELOPMENT, modelled on the RUDSETI experiment.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Business FacilitatorBusiness CorrespondentFacilitates only vs transacts (cash/credit/deposits)
Payments BankSmall Finance BankNo lending, ₹2 lakh cap vs lends with 75% PSL/small-ticket rules
Practise all 60 questions on Unit 16. 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.
Take the free test Open the free demo

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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.