CAIIB ABM MCQs, Most Expected 40 Case Study

CAIIB ABM MCQs

CAIIB ABM MCQs: Preparing for the CAIIB ABM (Advanced Bank Management) exam requires a strategic approach, as it combines in-depth knowledge with practical case study analysis and multiple-choice questions (MCQs). In this article, we will walk you through the most expected 40 case study & CAIIB ABM MCQs that are essential for your exam preparation. Whether you are looking to improve your theoretical understanding or solve complex case studies, this article will give you the tools to succeed.

Introduction to CAIIB ABM

The CAIIB (Certified Associate of the Indian Institute of Bankers) exam is one of the most recognized certifications in the banking industry. The ABM (Advanced Bank Management) paper is a core subject that focuses on the strategic, managerial, and operational aspects of banking. It covers a range of topics such as:

• Banking operations and regulations
• Risk management
• Credit management
• Financial management
• Case studies related to business banking scenarios

As an aspirant, you need to grasp the fundamental concepts while preparing for case studies and MCQs that challenge your practical application skills.

Most Expected CAIIB ABM MCQs

Now let’s dive into the most expected 40 MCQs based on the CAIIB ABM syllabus. These will help you test your knowledge on key topics like banking regulations, credit management, and risk assessment.

Banking Operations & Management

1. Which of the following is the primary objective of Risk Management in banking?
   • A) Maximizing profits
   • B) Minimizing risks
   • C) Increasing market share
   • D) Enhancing liquidity
   • Answer: B) Minimizing risks
2. What is the maximum amount a bank can lend to a single borrower under the prudential lending norms?
   • A) 10% of capital
   • B) 15% of capital
   • C) 25% of capital
   • D) 50% of capital
   • Answer: C) 25% of capital

Credit Management

3. Which of the following is NOT a part of credit risk assessment?
   • A) Borrower’s financial health
   • B) Industry analysis
   • C) External market conditions
   • D) Interest rate policies
   • Answer: D) Interest rate policies
4. In case of a default in loan repayment, what should be the first step for a bank?
   • A) Initiate legal proceedings
   • B) Restructure the loan
   • C) Write off the loan
   • D) Liquidate the collateral
   • Answer: B) Restructure the loan

Financial Management

5. What is the primary function of the financial inclusion process in banking?
   • A) Enhancing customer satisfaction
   • B) Expanding banking products
   • C) Providing banking services to the underserved
   • D) Minimizing operational costs
   • Answer: C) Providing banking services to the underserved
6. Which of the following is a key measure of a bank’s profitability?
   • A) Loan-to-deposit ratio
   • B) Return on assets (ROA)
   • C) Capital adequacy ratio
   • D) Non-performing asset (NPA) ratio
   • Answer: B) Return on assets (ROA)

Risk Management

7. Which of the following is a major risk faced by banks during economic downturns?
   • A) Interest rate risk
   • B) Liquidity risk
   • C) Credit risk
   • D) All of the above
   • Answer: D) All of the above
8. Which of the following tools is used to hedge against interest rate risk?
   • A) Options
   • B) Futures
   • C) Swaps
   • D) All of the above
   • Answer: D) All of the above
9. What is the key objective of Basel III regulations?
   • A) Enhancing liquidity standards
   • B) Improving market risk management
   • C) Strengthening capital adequacy
   • D) Reducing credit risk
   • Answer: C) Strengthening capital adequacy

Tips for Success in CAIIB ABM

To succeed in CAIIB ABM, here are a few tips to keep in mind:

• Understand Key Concepts: Focus on understanding key concepts in banking operations, credit management, and risk management.
• Practice Regularly: Solve MCQs and case studies regularly to improve your problem-solving skills.
• Stay Updated: Follow the latest developments in the banking industry, including RBI policies and financial regulations.
• Time Management: During the exam, manage your time effectively to ensure that you can attempt all questions.

Most Expected 40 CAIIB ABM MCQs

1. What is the maximum amount for which a bank can file a civil suit for recovery in a civil court?

A) ₹10 Lakhs
B) ₹20 Lakhs
C) ₹50 Lakhs
D) ₹1 Crore

Answer: B) ₹20 Lakhs

2. What is the investment and turnover criteria for classifying an entity as a micro-enterprise?

A) Investment up to ₹1 crore and turnover up to ₹2 crore
B) Investment up to ₹2 crore and turnover up to ₹5 crore
C) Investment up to ₹1 crore and turnover up to ₹5 crore
D) Investment up to ₹50 lakhs and turnover up to ₹1 crore

Answer: C) Investment up to ₹1 crore and turnover up to ₹5 crore

3. What is the minimum amount for which a bank can apply for a CIRP under the Insolvency and Bankruptcy Code?

A) ₹10 Lakhs
B) ₹50 Lakhs
C) ₹1 Crore
D) ₹5 Crore

Answer: C) ₹1 Crore

4. At what percentage of voting share can an IRP become the RP in a Committee of Creditors (CoC)?

A) 51%
B) 60%
C) 66%
D) 75%

Answer: C) 66%

5. What is the appeal process if a claim is rejected by the liquidator during a company’s liquidation process?

A) Appeal to the National Company Law Tribunal (NCLT)
B) Appeal to the High Court
C) Appeal to the Supreme Court
D) Appeal to the Ministry of Corporate Affairs

Answer: A) Appeal to the National Company Law Tribunal (NCLT)

6. What is the next step if a person is not satisfied with the decision of the NCLT?

A) Appeal to the NCLT Appellate Tribunal
B) Appeal to the Supreme Court
C) Appeal to the Ministry of Corporate Affairs
D) Appeal to the RBI

Answer: A) Appeal to the NCLT Appellate Tribunal

7. Can the Committee of Creditors (CoC) withdraw an application for insolvency proceedings?

A) Yes, with 90% voting share
B) Yes, with 75% voting share
C) Yes, with 66% voting share
D) No, once the application is filed, it cannot be withdrawn

Answer: A) Yes, with 90% voting share

8. What is the procedure for a person dissatisfied with an NCLT order?

A) Appeal to the National Company Law Appellate Tribunal (NCLAT)
B) Appeal to the Supreme Court
C) Appeal to the RBI
D) Appeal to the High Court

Answer: A) Appeal to the National Company Law Appellate Tribunal (NCLAT)

9. What is the criteria for an entity to be classified as a small enterprise?

A) Investment up to ₹10 crore and turnover up to ₹50 crore
B) Investment up to ₹1 crore and turnover up to ₹5 crore
C) Investment up to ₹5 crore and turnover up to ₹10 crore
D) Investment up to ₹10 crore and turnover up to ₹100 crore

Answer: A) Investment up to ₹10 crore and turnover up to ₹50 crore

10. If a person is dissatisfied with the decision of the educational authority under the law, what is the next course of action?

A) Appeal to the Appellate Authority
B) Appeal to the High Court
C) Appeal to the Supreme Court
D) File a review petition with the same authority

Answer: A) Appeal to the Appellate Authority

11. What is the role of the Committee of Creditors (CoC) in the CIRP process?

A) To select the Insolvency Professional
B) To approve the resolution plan
C) To initiate liquidation proceedings
D) To decide on the filing of an insolvency petition

Answer: B) To approve the resolution plan

12. What happens if the liquidation process of a company is initiated?

A) All creditors must be paid immediately
B) The company’s assets are sold to pay off creditors
C) The company continues operations under a new management
D) The company is dissolved without selling any assets

Answer: B) The company’s assets are sold to pay off creditors

13. What is the maximum limit for turnover to classify an entity as a micro-enterprise under the MSME criteria?

A) ₹2 crore
B) ₹3 crore
C) ₹5 crore
D) ₹10 crore

Answer: C) ₹5 crore

14. Which of the following is a primary responsibility of the Insolvency Resolution Professional (IRP)?

A) Conducting the resolution process
B) Liquidating the assets of the debtor
C) Making decisions regarding employee compensation
D) Forming the Committee of Creditors

Answer: A) Conducting the resolution process

15. What is the role of the National Company Law Tribunal (NCLT) in insolvency proceedings?

A) To resolve insolvency disputes
B) To hear appeals related to the insolvency process
C) To make a decision regarding the insolvency of a company
D) To appoint the Insolvency Professional

Answer: C) To make a decision regarding the insolvency of a company

16. What is the voting share required for creditors to approve the resolution plan in a Committee of Creditors (CoC)?

A) 51%
B) 60%
C) 66%
D) 75%

Answer: C) 66%

17. Under the Insolvency and Bankruptcy Code, what happens when a company’s debt exceeds ₹1 crore?

A) It is eligible for insolvency proceedings
B) It must pay off the debt within 90 days
C) The company must be liquidated immediately
D) No action is required until the debt exceeds ₹5 crore

Answer: A) It is eligible for insolvency proceedings

18. What is the purpose of the National Company Law Appellate Tribunal (NCLAT)?

A) To resolve disputes related to company law
B) To hear appeals against the decisions of the NCLT
C) To approve the resolution plans
D) To register companies

Answer: B) To hear appeals against the decisions of the NCLT

19. If a claim is rejected by a liquidator during the liquidation process, what can the claimant do?

A) Appeal to the National Company Law Tribunal (NCLT)
B) Appeal to the Committee of Creditors (CoC)
C) Re-file the claim with the liquidator
D) File a new claim with the RBI

Answer: A) Appeal to the National Company Law Tribunal (NCLT)

20. What is the minimum amount of default required for initiating CIRP under the Insolvency and Bankruptcy Code?

A) ₹50 lakhs
B) ₹1 crore
C) ₹5 crore
D) ₹10 crore

Answer: B) ₹1 crore

21. Which of the following is the maximum amount for which a civil suit can be filed in a civil court by a bank for recovery?

• A) ₹10 lakh
• B) ₹20 lakh
• C) ₹50 lakh
• D) ₹1 crore
• Answer: B) ₹20 lakh

22. What is the investment and turnover criterion for classifying an entity as a micro-enterprise?

• A) Investment up to ₹2 crore and turnover up to ₹5 crore
• B) Investment up to ₹1 crore and turnover up to ₹5 crore
• C) Investment up to ₹5 crore and turnover up to ₹10 crore
• D) Investment up to ₹50 lakh and turnover up to ₹1 crore
• Answer: B) Investment up to ₹1 crore and turnover up to ₹5 crore

23. In a Committee of Creditors (CoC), what percentage of voting share is required to appoint an Insolvency Resolution Professional (IRP) as the Resolution Professional (RP)?

• A) 50%
• B) 66%
• C) 75%
• D) 80%
• Answer: B) 66%

24. What is the minimum default amount required for initiating the CIRP process under the Insolvency and Bankruptcy Code (IBC)?

• A) ₹50 lakh
• B) ₹1 crore
• C) ₹5 crore
• D) ₹10 crore
• Answer: B) ₹1 crore

25. If a claim is rejected by the liquidator, which authority can the creditor approach to appeal?

• A) National Company Law Tribunal (NCLT)
• B) Insolvency and Bankruptcy Board of India (IBBI)
• C) Appellate Tribunal for Insolvency Cases
• D) High Court
• Answer: A) National Company Law Tribunal (NCLT)

26. Which body decides whether the IRP should continue as the RP during the CIRP process?

• A) NCLT
• B) CoC (Committee of Creditors)
• C) Insolvency and Bankruptcy Board of India (IBBI)
• D) Liquidator
• Answer: B) CoC (Committee of Creditors)

27. Which of the following can withdraw the application for Corporate Insolvency Resolution Process (CIRP) during the process?

• A) Any single creditor
• B) A committee of creditors with 90% voting share
• C) NCLT
• D) Debtor (Corporate Debtor)
• Answer: B) A committee of creditors with 90% voting share

28. If a person is aggrieved by the NCLT’s order, to which authority can they appeal?

• A) National Company Law Appellate Tribunal (NCLAT)
• B) Supreme Court
• C) High Court
• D) District Court
• Answer: A) National Company Law Appellate Tribunal (NCLAT)

29. What is the primary responsibility of the Committee of Creditors (CoC) in an insolvency resolution process?

• A) To appoint the Liquidator
• B) To appoint the Insolvency Resolution Professional (IRP)
• C) To decide on the debtor’s business recovery plans
• D) To approve the resolution plan
• Answer: D) To approve the resolution plan

30. Which of the following can initiate the process of Corporate Insolvency Resolution (CIRP) in case of a default?

• A) Government
• B) Corporate Debtor
• C) A single creditor
• D) Both A and B
• Answer: C) A single creditor

31. What is the role of the Insolvency Professional during the Corporate Insolvency Resolution Process (CIRP)?

• A) To assist in the liquidation process
• B) To develop and implement a resolution plan
• C) To make decisions regarding employee benefits
• D) To decide on creditor claims
• Answer: B) To develop and implement a resolution plan

32. When can a creditor initiate the Insolvency Resolution Process (IRP) under the Insolvency and Bankruptcy Code (IBC)?

• A) When the debtor defaults for 30 days
• B) When the default amount exceeds ₹1 crore
• C) When the debtor defaults for 90 days
• D) Only when the debtor requests for resolution
• Answer: B) When the default amount exceeds ₹1 crore

33. Which of the following is a feature of the Insolvency and Bankruptcy Code (IBC)?

• A) Aims to provide a speedy and transparent resolution of corporate insolvency
• B) Allows the debtor to continue operations with no changes
• C) Provides no option for creditor claims
• D) Only applies to individuals
• Answer: A) Aims to provide a speedy and transparent resolution of corporate insolvency

34. Which authority is responsible for overseeing the administration of the Insolvency and Bankruptcy Code (IBC) in India?

• A) RBI
• B) National Company Law Tribunal (NCLT)
• C) Insolvency and Bankruptcy Board of India (IBBI)
• D) Ministry of Corporate Affairs
• Answer: C) Insolvency and Bankruptcy Board of India (IBBI)

35. Which of the following statements is true about Corporate Insolvency Resolution Process (CIRP)?

• A) The CIRP process can be completed within 90 days
• B) CIRP cannot extend beyond 180 days unless the NCLT approves
• C) The CIRP process can be extended for up to 5 years
• D) The creditor has no role in the CIRP process
• Answer: B) CIRP cannot extend beyond 180 days unless the NCLT approves

36. What happens if the Committee of Creditors (CoC) approves a resolution plan during the Corporate Insolvency Resolution Process (CIRP)?

• A) The debtor company is liquidated
• B) The plan is submitted to the National Company Law Tribunal (NCLT) for approval
• C) The creditors lose their right to claim dues
• D) The Insolvency Professional gets replaced
• Answer: B) The plan is submitted to the National Company Law Tribunal (NCLT) for approval

37. Which of the following is a mandatory requirement for the initiation of the Corporate Insolvency Resolution Process (CIRP)?

• A) Insolvency claim must be above ₹10 crore
• B) Default amount must be greater than ₹1 crore
• C) A creditor must represent at least 51% of total debt
• D) The debtor must have defaulted for over a year
• Answer: B) Default amount must be greater than ₹1 crore

38. Who can serve as the Resolution Professional (RP) in a CIRP process?

• A) The debtor’s appointed lawyer
• B) Any employee of the corporate debtor
• C) A qualified Insolvency Professional
• D) A member of the Committee of Creditors
• Answer: C) A qualified Insolvency Professional

39. What is the main objective of the Insolvency and Bankruptcy Code (IBC) in India?

• A) To provide a simple way of claiming bankruptcy
• B) To provide a time-bound mechanism for resolving insolvency
• C) To protect defaulters from legal actions
• D) To regulate financial markets
• Answer: B) To provide a time-bound mechanism for resolving insolvency

40. Which of the following is a power of the Committee of Creditors (CoC) during the Corporate Insolvency Resolution Process (CIRP)?

• A) They can remove the Resolution Professional
• B) They can reduce the debtor’s liabilities
• C) They can liquidate the company directly
• D) They can approve or reject the resolution plan
• Answer: D) They can approve or reject the resolution plan

Importance of Case Studies and MCQs

In the CAIIB ABM exam, case studies and MCQs play a crucial role in evaluating your understanding of practical banking scenarios and theoretical knowledge. Here’s why these two formats are vital:

• Case Studies: They help you apply theoretical concepts to real-world situations. By analyzing a case, you can understand how to tackle issues like credit management, business decision-making, and financial planning.
• MCQs: These test your conceptual clarity, time management skills, and ability to recall key facts. They cover all major areas of the ABM syllabus, ensuring you’re well-prepared for the exam.

With the right practice, you can excel in both types of questions.

Most Expected 40 Case Study Questions

Here is a collection of most expected case study questions that have been observed in past CAIIB ABM exams:

No.	Case Study Topic	Key Focus Area
1	Risk management in lending to small businesses	Assessing risk profiles and loan structures
2	Credit analysis for corporate clients	Analyzing financial statements, cash flow projections
3	Managing liquidity crisis in banks	Developing strategies to improve liquidity
4	Impact of RBI policies on bank operations	Understanding the effect of monetary policy
5	Fraud detection and mitigation in banking	Identifying risks and implementing anti-fraud measures
6	Relationship management with corporate clients	Building long-term client relationships
7	Handling defaulting loans in the corporate sector	Resolution techniques and restructuring plans
8	Financial inclusion and its impact on banking growth	Identifying opportunities in rural banking
9	Role of technology in banking operations	Digital banking, blockchain, and cybersecurity
10	Managing a bank’s portfolio in volatile markets	Asset allocation strategies under uncertain conditions

Key Strategies to Tackle Case Studies:

• Read the Case Carefully: Understand the problem presented and focus on identifying the core issues.
• Analyze Data: Examine financial data, market conditions, and other factors relevant to the case.
• Provide Solutions: Suggest actionable solutions based on the concepts learned.
• Use Real-World Examples: Relate solutions to industry practices to strengthen your argument.

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