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JAIIB PPB Unit 36 — Priority Sector Advances: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 2 November 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 36 — Priority Sector Advances (Module B — Functions of Banks). 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 B44 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. PSL formalised 1972; Master Directions Sept 2020 (revised 2025); base = ANBC or CEOBE, whichever HIGHER; not applicable to salary earners' banks.
  2. Targets: domestic SCBs 40% (agri 18%, micro 7.5%, weaker 12%, SMF 10%); RRBs 75%; SFBs 60% from FY 2025-26 (75% earlier); UCBs 60%; foreign <20 branches — exports up to 32% within 40%.
  3. District weights: 125% (per-capita PSL < ₹6,000) / 90% (> ₹25,000).
Law update, October 2026. The total PSL target for RRBs is 75% of ANBC — nearly double the commercial banks' 40%. Small Finance Banks, also at 75% under the 2020 Directions, were cut to 60% from FY 2025-26 (RBI circular, 20 June 2025). Current law: the PSL Directions 2025 (from 1 April 2025) raised the housing limits to ₹50 lakh in centres of 50 lakh+ population, ₹45 lakh for 10–50 lakh and ₹35 lakh below 10 lakh (dwelling cost caps ₹63/₹57/₹44 lakh). 'Per the textbook / 2020 MD' → ₹35 lakh; 'currently' → the 2025 slabs.

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 total priority-sector target for domestic commercial banks is:
Why (c): The total priority-sector target for domestic commercial banks is 40% of ANBC/CEOBE — the headline number of the framework.
Question 2 of 5
The AGRICULTURE sub-target for domestic banks is:
Why (c): The AGRICULTURE sub-target for domestic banks is 18% — with the small-and-marginal-farmer sub-target sitting inside it.
Question 3 of 5
FACTORING transactions count as MSME priority sector when the ASSIGNOR is:
Why (b): FACTORING transactions count as MSME priority sector when the ASSIGNOR IS AN MSME — the receivables must belong to an MSME seller.
Question 4 of 5
Weaker Sections include:
Why (b): Weaker sections include SC/STs, small and marginal farmers, SHGs, artisans and village and cottage industries (within limits), minorities, women beneficiaries (up to a limit), persons with disabilities and beneficiaries of specified government schemes.
Question 5 of 5
Under the PSL Directions, 'Agriculture' comprises:
Why (b): Under the PSL Directions, agriculture has three parts: farm credit (including allied activities and KCC), agriculture infrastructure and ancillary activities (e.g., agro-processing, custom service units).
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
40%75%Domestic SCBs vs RRBs total target (SFBs 60% from FY 2025-26)
18%10%Agriculture target vs SMF sub-target
Practise all 44 questions on Unit 36. The free demo opens a slice of every subject with the same explanations; the PPB Online-only pass unlocks all 3,200+ PPB questions, the full and module mocks, Smart Revision and the Readiness Score for 18 months (₹1,299). Not sure where you stand? Sit the free 120-question mock first (all four papers, questions drawn from pages like this one, real exam screen).
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← Unit 35: Personal Finance · Unit 37: Agricultural Finance → · 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 November 2026; verify from official sources before relying on them in practice.