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JAIIB · Retail Banking & Wealth Management · Module B — Retail Products and Recovery

JAIIB RBWM Unit 16 — Securitization: Free MCQs with Explanations

By Swarnakshi Jha (ex-banker) · Updated 2 November 2026 · Paper 4 of the November 2026 cycle (29 November 2026)

This page is a free slice of our JAIIB RBWM question bank for Unit 16 — Securitization (Module B — Retail Products and Recovery). The Mock Centre holds 81 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.

RBWM · Module B81 MCQs in the Mock Centre5 free belowPaper on 29 November 2026

Key facts examiners test from this unit

  1. Origins: US early 1970s, mortgage pools; instruments — bonds/PTCs/CDOs/MBS (never equity); repaid from pool P+I; two stages — sell to bankruptcy-remote SPV for cash, then repackage into tradable securities.
  2. Role map: obligor (pays) / originator (sells pool) / SPV (buys, bankruptcy-remote to isolate originator risk) / sponsor (promotes SPV).
  3. Pools homogeneous by credit type, maturity, rate risk; advantage — off-balance-sheet, capital-free, liquidity, debt→capital-market efficiency; limitation — lender risk + opaque security risk.
Law update, November 2026. Under the RBI's Securitisation of Standard Assets Directions 2021, the minimum holding period is 3 months for loans with a tenor of up to 2 years and 6 months for longer loans. Under the 2021 Directions the MHP is 3 months for loans with a tenor of up to 2 years and 6 months for longer loans. Under the RBI's revised ARC framework of 11 October 2022, an ARC must hold at least 15% of the transferors' investment in the SRs or 2.5% of the total SRs issued, whichever is higher.

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
Securitization began with the pooling of:
Why (b): The first assets ever pooled were HOME MORTGAGES — the Ginnie Mae era of mortgage pass-throughs. Housing loans built the market.
Question 2 of 5
Under securitization, assets are sold to:
Why (b): The mechanics: assets are sold to a BANKRUPTCY-REMOTE SPV which PAYS THE BANK NOW — immediate cash for the originator, and the SPV repackages the pool for investors.
Question 3 of 5
According to the textbook, the RBI revised the MHP:
Why (b): RBI relaxed the Minimum Holding Period FROM 12 MONTHS TO 6 MONTHS — halving the wait so credit could recycle faster.
Law update, November 2026: Under the 2021 Directions the MHP is 3 months for loans with a tenor of up to 2 years and 6 months for longer loans.
Question 4 of 5
A bank securitises a ₹200 crore pool of 5-year car loans. Under the 2021 Directions it must retain at least:
Why (a): Loans with an original maturity above 24 months carry a 10% minimum retention requirement: 10% of ₹200 crore = ₹20 crore. (5% applies to loans of up to 24 months and to RMBS.)
Question 5 of 5
Ireland's NAMA (2009) was:
Why (a): The National Asset Management Agency took over bad property loans from Irish banks; with the US TARP it is a crisis-era template cited before India's NARCL.
0 of 5 answered.

Traps in this unit

Confusable AConfusable BThe difference
ObligorOriginatorPays the debt vs sells the pool
OriginatorSponsorSells assets vs promotes the SPV
Practise all 81 questions on Unit 16. The free demo opens a slice of every subject with the same explanations; the RBWM Online-only pass unlocks all 1,900+ RBWM 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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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.