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JAIIB PPB Unit 39 — Micro, Small & Medium Enterprises in India: 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 39 — Micro, Small & Medium Enterprises in India (Module B — Functions of Banks). The Mock Centre holds 68 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 B68 MCQs in the Mock Centre5 free belowPaper on 22 November 2026

Key facts examiners test from this unit

  1. MSMED Act 2006: 'industry' → 'enterprise'; 2020 composite criteria — micro ₹1/5 cr, small ₹10/50 cr, medium ₹50/250 cr; from 1-4-2025 — ₹2.5/10, ₹25/100, ₹125/500 cr.
  2. Upgrade on EITHER ceiling breach; downgrade needs both, effective next 1 April; PAN-level GSTIN aggregation; investment = ITR WDV; turnover excludes exports; PAN/GSTIN mandatory after 31-3-2021.
  3. PSL: all MSME credit eligible without ceiling; micro sub-target 7.5%; PM's Task Force — 20% YoY MSE credit growth, 10% micro-account growth, 60% of MSE credit to micro.

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 MSMED Act was notified in:
Why (b): The MSMED Act was notified in 2006, replacing the word 'INDUSTRY' with 'ENTERPRISE' — bringing services, not just manufacturing, into the definition.
Question 2 of 5
Under the MSMED Act, payment for MSE supplies must be made within:
Why (b): Under the MSMED Act, payment for MSE supplies must be made within 45 DAYS — the outer limit no agreement can exceed.
Question 3 of 5
CGTMSE was set up in:
Why (a): CGTMSE was set up in 2000 BY THE MINISTRY OF MSME AND SIDBI — the trust's corpus contributed 4:1 by GoI and SIDBI.
Question 4 of 5
Bank credit to MSMEs (per the PSL Directions) is:
Why (b): The 2020 Directions removed MSME PSL caps entirely; only the micro sub-target (7.5%) binds.
Question 5 of 5
An MSE loan application for credit up to Rs 25,000 must be disposed of within:
Why (b): Time norms for MSE applications: credit up to ₹25,000 is to be disposed of within 4 BUSINESS DAYS (the textbook's slab); larger limits get progressively longer windows under the bank's policy, and delayed disposal invites accountability.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
₹1 cr/₹5 cr₹2.5 cr/₹10 crMicro: 2020 vs 2025 criteria
₹50 cr/₹250 cr₹125 cr/₹500 crMedium: 2020 vs 2025
Practise all 68 questions on Unit 39. 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 38: Finance to MFIs & Co-Lending with NBFCs · Unit 40: Government Sponsored Schemes → · 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.