Attempting the CAIIB Rural Banking PYP Quiz and practising the free PDF can help candidates revise important concepts, improve accuracy, and build exam confidence. The paper covers practical topics such as Priority Sector Lending (PSL), NABARD, SHGs, government schemes, and basic project appraisal. Since many questions are concept-based and one-liner in nature, solving Previous Year Paper (PYP) questions helps improve quick recall and exam readiness.
Download CAIIB Rural Banking Previous Year Papers
Improve your CAIIB Rural Banking 2026 preparation by practising questions from Previous Year Papers (PYPs). Download the CAIIB Rural Banking Previous Year Papers using the direct link provided below.
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Attempt CAIIB Rural Banking Previous Year Paper Quiz
Check your preparation level with our CAIIB Rural Banking Previous Year Paper Quiz designed especially for banking professionals preparing for the Rural Banking elective paper.
Case Scenario 1: Priority Sector Lending & Target Non-Achievement (Q1 – Q5)
Scenario:
Surya Vikas Bank Ltd., a domestic commercial bank, recorded an Adjusted Net Bank
Credit (ANBC) of ₹1,20,000 crore and Credit Equivalent of Off-Balance Sheet
Exposure (CEOBE) of ₹1,10,000 crore as of March 31 of the previous financial year.
During the annual PSL assessment, its total Priority Sector Lending achievements
stood as follows:
Total Priority Sector Advances: ₹45,600 crore
Total Agricultural Advances: ₹19,800 crore (out of which Small & Marginal
Farmers comprised ₹10,200 crore)
Advances to Weaker Sections: ₹13,800 crore
Micro Enterprises: ₹8,700 crore
1. What is the applicable base figure for determining the PSL targets for Surya Vikas Bank?
2. What is the bank’s target shortfall or surplus in the Small & Marginal Farmers (SMF) sub-target?
3. In the event of an overall PSL or sub-target shortfall, the bank will be mandated to contribute to:
4. Under RBI PSL guidelines, what incentive mechanism is provided for incremental priority sector credit in identified districts with comparatively low credit flow (per capita PSL below ₹9,000)?
5. (MSQ) Which of the following qualify under the Priority Sector ‘Weaker Sections’ category?
I. Small and Marginal Farmers
II. Beneficiaries of the DAY-NRLM and DAY-NULM schemes
III. Distressed farmers indebted to non-institutional lenders
IV. Individual women beneficiaries with credit facilities up to ₹1,00,000 per borrower
Case Scenario 2: Kisan Credit Card (KCC) Assessment & Operational Rules (Q6 – Q10)
Scenario:
Farmer Ramesh owns 5 acres of irrigated land and cultivates Sugarcane (Scale of
Finance = ₹40,000/acre) and Wheat (Scale of Finance = ₹25,000/acre). He
approaches the Gramin Bank branch for a 5-year Kisan Credit Card facility.
6. What will be the assessed crop loan limit for Year 1 for crop cultivation alone (excluding household/post-harvest and maintenance allowances)?
7. Under standard KCC operational guidelines, what percentage is added for (i) Household/consumption purposes and (ii) Maintenance of farm assets respectively?
8. What is the total composite limit sanctioned for the 1st year (Production + Consumption + Asset Maintenance)?
9. For subsequent years (Years 2 to 5), the KCC sub-limit is escalated annually at what compound rate for limit determination in the 5th year?
10. What is the ceiling on collateral-free agricultural loans under current RBI guidelines?
Case Scenario 3: Financial Evaluation of an Agri-Term Loan (Q11 – Q15)
Scenario:
An agro-processing unit requires a capital outlay of ₹10,00,000 with a scrap value of
zero after 5 years. It generates the following net cash flows: Year 1: ₹3,00,000; Year
2: ₹3,50,000; Year 3: ₹4,00,000; Year 4: ₹3,00,000; Year 5: ₹2,00,000. Discount rate
is 10%.
PV Factors at 10%:
Year 1 = 0.909, Year 2 = 0.826, Year 3 = 0.751, Year 4 = 0.683, Year 5 = 0.621
11. What is the Net Present Value (NPV) of the agro-processing project?
12. What is the Benefit-Cost Ratio (BCR) of the project at the 10% discount rate?
13. If the Internal Rate of Return (IRR) is greater than the Opportunity Cost of Capital (Discount Rate), the project should be:
14. (MSQ) Which of the following investment appraisal techniques are categorized as “Discounted Cash Flow” (DCF) techniques?
I. Payback Period
II. Net Present Value (NPV)
III. Internal Rate of Return (IRR)
IV. Accounting Rate of Return (ARR)
15. In agricultural project finance, what is the standard Debt Service Coverage Ratio (DSCR) benchmark generally considered acceptable by banks?
Standalone MSQs & Conceptual Rural Banking Questions (Q16 – Q25)
16. Which committee recommended the introduction of the Lead Bank Scheme based on the “Area Approach”?
17. (MSQ) Regarding the Regional Rural Banks (RRBs), which of the following statements is/are correct?
I. The shareholding pattern is: Central Govt 50%, State Govt 15%, Sponsor Bank 35%.
II. RRBs are required to maintain a minimum CRAR of 9%.
III. RRBs have a Priority Sector Lending target of 75% of ANBC.
IV. RRBs were established under the RRB Act, 1976 based on the Narasimham Working Group recommendations.
18. Under the Modified Interest Subvention Scheme (MISS) for short-term crop loans up to ₹3.00 lakh:
19. What is the maximum insurance premium payable by a farmer under Pradhan Mantri Fasal Bima Yojana (PMFBY) for Kharif foodgrain crops?
20. Under the DAY-NRLM guidelines, what minimum Cash Credit Limit (CCL) should banks sanction to an eligible SHG for a period of three years?
21. (MSQ) Which of the following conditions satisfy the revised RBI regulatory framework for Microfinance Loans (2022 onwards)?
I. Collateral-free loan to a household having annual income up to ₹3,00,000.
II. Limit on monthly loan repayment obligations not exceeding 50% of the monthly household income.
III. No prepayment penalty on microfinance loans.
IV. Complete flexibility in interest rate caps with board-approved transparent pricing policy.
22. Under the Pradhan Mantri Formalisation of Micro food processing Enterprises (PMFME) scheme, the credit-linked capital subsidy is provided at:
23. Under restructuring norms for agricultural loans affected by natural calamities, when the crop loss is assessed between 33% and 50%:
24. What is the apex body responsible for the preparation of Potential Linked Credit Plans (PLP) across every district in India?
25. (MSQ) Which of the following portals/digital public infrastructures are correctly matched with their primary purpose?
I. e-NAM: Pan-India electronic trading portal networking existing APMC mandis.
II. CIMS: RBI’s centralized information management system replacing XBRL.
III. EnviStats India: Portal for issuing Kisan Credit Cards digitally.
IV. TReDS: Electronic platform facilitating the financing/discounting of trade receivables of MSMEs.
Case Scenario 4: Financing Commercial Dairy Development (Q26 – Q30)
Scenario:
Progressive Dairy Farm, a partnership entity, approaches Prathama Gramin Bank for
setting up a 10-animal crossbred dairy farm (5 Crossbred Jersey and 5 Murrah
Buffaloes). The project cost details appraised by the rural branch manager are:
Cost of 10 milch animals: ₹7,00,000 (average ₹70,000 per animal)
Shed construction, silage pit, and water infrastructure: ₹2,00,000
Milking machines, chaff cutter, and milk testing equipment: ₹1,00,000
Initial working capital capitalized into term loan: ₹50,000
Margin prescribed by the bank: 15%
Repayment period: 5 years in monthly installments with a 6-month grace
period on principal.
26. What is the total eligible loan amount to be sanctioned after deducting the borrower’s equity contribution?
27. To minimize cash-flow fluctuations during the dry period of milch animals, NABARD unit-cost guidelines suggest purchasing animals in:
28. What is the primary parameter used by lending banks to assess the technical viability of a dairy term loan proposal?
29. Under the Animal Husbandry Infrastructure Development Fund (AHIDF), what is the interest subvention provided to eligible dairy processing and value-addition units?
30. (MSQ) Which of the following are important appraisal parameters for a commercial dairy term loan?
I. Availability of green and dry fodder resources (minimum 0.5 to 1 acre of irrigated land per 5 animals)
II. Tie-up arrangements for regular milk collection and marketing with a cooperative or private dairy
III. Comprehensive insurance of milch animals with permanent identification (RFID/ear tagging)
IV. Compulsory minimum personal guarantee of a village Sarpanch
Quiz Summary
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Which modules carried the highest weightage in the CAIIB Rural Banking exam?
Most questions were asked from Module B and Module C, making them important areas for preparation. Module B mainly covered Project Appraisal, while Module C focused on Priority Sector Lending (PSL). Questions were also asked from Internal Rate of Return (IRR) and Net Present Value (NPV), making these financial evaluation concepts important for revision.
| Module | Important Topics Asked |
| Module C | Priority Sector Lending (PSL), rural credit structure |
| Module B | Project Appraisal, IRR, NPV, Financial evaluation |
| Other areas | Basic rural banking concepts |
Which Project Appraisal topics were asked in the CAIIB Rural Banking exam?
Project Appraisal was an important and scoring section of the exam, with questions based on fundamental financial concepts. Candidates were tested on topics such as Internal Rate of Return (IRR), Net Present Value (NPV), and Benefit-Cost Ratio through both numerical and conceptual questions. Those who had a clear understanding of these project evaluation methods found this section relatively easy to score well in.
- IRR-based numerical questions
- NPV where value becomes zero at IRR
- Benefit-Cost Ratio (discounted benefits vs costs)
- Basic financial and economic appraisal concepts
- Rural and agricultural project evaluation
Which committees and governance topics were asked in CAIIB Rural Banking exam?
Several questions were asked from poverty estimation and rural governance, including the Tendulkar Committee and Rangarajan Committee and their recommendations on poverty measurement. Questions also covered Panchayati Raj Institutions, constitutional provisions, election-related concepts, the L.M. Singhvi Committee, and the Panchayati Raj Act, making these important topics for preparation.
- Tendulkar Committee (poverty estimation method)
- Rangarajan Committee (poverty line recommendations)
- L.M. Singhvi Committee (Panchayati Raj reforms)
- Panchayati Raj Act provisions
- Election and local governance structure
Which rural development schemes and SHG topics were asked in the exam?
The exam included questions from key government schemes and Self Help Groups (SHGs). Topics like SHG savings, lending practices, meeting frequency, and Panchasutra were asked. Government schemes such as ASPIRE, MGNREGA, PMGSY, PMKSY, and PM Awas Yojana were also included. MGNREGA’s 100 days of guaranteed employment was specifically highlighted.
- ASPIRE scheme
- MSME-related schemes
- PMGSY (rural roads)
- PMKSY (irrigation)
- MGNREGA – 100 days guaranteed employment
- PM Awas Yojana – housing-related provisions
- SHG criteria, savings, lending, meetings
- Panchasutra of SHGs
Which financial models and lending topics were included in the exam?
The paper also tested basic lending models used in rural banking and financial institutions. Questions from Differential Rate of Interest (DRI) Scheme were asked along with bank and NBFC lending models. These questions were mostly conceptual and easy to attempt for candidates familiar with rural credit systems.
- Differential Rate of Interest (DRI) Scheme
- Bank-NBFC lending structures
- Rural credit delivery models
- Basic financial inclusion mechanisms
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FAQs
They help in understanding exam pattern, repeated topics, and question trends.
Module B and Module C carry the highest weightage.
Priority Sector Lending (PSL) is the most important topic.
Mostly one-liner and concept-based questions.
Tendulkar Committee, Rangarajan Committee, and L.M. Singhvi Committee.
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