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JAIIB PPB Unit 24 — Operational Aspects of Loan Accounts: 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 24 — Operational Aspects of Loan Accounts (Module B — Functions of Banks). The Mock Centre holds 91 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 B91 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. Rate regimes: BPLR → Base Rate (1 Jul 2010, Mohanty WG, quarterly review, 3-year methodology) → MCLR (Dec 2015/Apr 2016; 4 components; 5 tenors; monthly review; not for foreign branches) → EBLR (1 Oct 2019 retail/MSE; 1 Apr 2020 medium; repo/T-bill/FBIL benchmarks; one per category; 3-month reset; switch ≠ foreclosure).
  2. Penal charges (1 Apr 2024) replace penal interest — no capitalisation; credit cards/ECB/trade credit exempt.
  3. Exposure limits: single 20% (+5%) / group 25% of Tier I; single NBFC 20% (gold-loan NBFC 7.5%) / NBFC group 25%; leasing/HP/factoring 10% of advances each; UFCE policy at US$10 mn; overseas JV/WOS 20% of unimpaired capital; fully-drawn TL exposure = outstanding; no ceiling on vehicle loans.

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 correct evolution of the lending-rate framework is:
Why (b): The lending-rate framework evolved BPLR (2003) → BASE RATE (2010) → MCLR (2016) → EBLR (2019) — each reform chasing better transmission of policy rates.
Question 2 of 5
For a GROUP of connected counterparties, the exposure limit is:
Why (b): For a GROUP of connected counterparties the limit is 25% of the bank's eligible capital base (Tier 1 capital) under the Large Exposures Framework — five points above the 20% single-counterparty line.
Question 3 of 5
The first step in loan handling is:
Why (b): Application intake starts the chain (appraisal → sanction → documentation → disbursal → monitoring).
Question 4 of 5
The maximum vehicle-loan tenure is:
Why (c): The maximum vehicle-loan tenure is 84 MONTHS (7 years) — the typical scheme ceiling.
Question 5 of 5
Who determines the MCLR?
Why (c): THE BANKS THEMSELVES determine their MCLR — each bank computes its own rate under RBI's framework; RBI sets the rules, not the rate.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
Base Rate (quarterly)MCLR (monthly)Review cycles
1 Oct 20191 Apr 2020EBLR: retail/MSE vs medium enterprises
Practise all 91 questions on Unit 24. 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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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.