Principles and Practices of Banking Study Notes and Quiz for JAIIB

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Published on 6 July 2026 by

IIBF JAIIB Principles and Practices of Banking – Exams for JAIIB/DBF are conducted twice a year by the Indian Institute of Banking & Finance. Taking this exam is an excellent way for bank employees to advance their careers. An important element of the JAIIB exam is to ensure candidates have a solid understanding of banking and financial services, including the ability to maintain healthy customer relationships and to understand basic accounting and legal aspects. In this blog, learners can go through the short notes in one of the most important topics of PPB and the Principles and Practices of Banking Notes PDF in the link given below.

Download JAIIB PPB Notes and Practice Quiz PDF

The JAIIB Principles and Practices of Banking (PPB) Notes and Practice Quiz PDF helps candidates revise important banking concepts in one place. The PDF covers topic-wise study notes, key points, and practice questions based on the latest JAIIB syllabus. It is useful for quick revision and helps candidates improve their understanding before attempting the examination.

ParticularsLink
JAIIB PPB Module A Practice QuizAttempt Quiz and Download PDF
JAIIB PPB Module B Practice QuizAttempt Quiz and Download PDF
JAIIB PPB Module C Practice QuizAttempt Quiz and Download PDF
JAIIB PPB Module D Practice QuizAttempt Quiz and Download PDF
JAIIB PPB Module Wise Mind Maps PDFDownload PDF
JAIIB PPB Case Study QuizDownload PDF
JAIIB PPB Numerical Practice Quiz PDFDownload PDF

What topics are important in the Principles and Practices of Banking paper?

The PPB paper covers many topics related to banking operations, financial markets, regulations, and customer services. Some topics carry more weight in the exam and are asked regularly based on previous exam analysis. Candidates should focus on these topics during preparation.

Unit 1: Indian Financial System

The Indian Financial System plays a key role in the country’s economic growth. Here’s a simplified overview:

  • NBFCs (Non-Banking Financial Companies) raise money from the public and provide loans through hire purchase, leasing, and bill discounting.
  • Primary dealers participate in buying and selling government securities in both primary and secondary markets.
  • Financial Institutions (FIs) provide long-term funds to sectors like industry and agriculture.
  • Cooperative banks can accept deposits and offer loans to the public. Urban cooperative banks are regulated by RBI and state governments, while other co-ops are supervised by NABARD and state governments.
  • CRR (Cash Reserve Ratio) is the portion of a bank’s total deposits that must be kept with the RBI.
  • SLR (Statutory Liquidity Ratio) is the share of deposits that banks must maintain in government securities.
  • Banks also raise funds by issuing corporate bonds and debentures.
  • Securities include shares, bonds, and derivatives.
  • SEBI regulates the capital markets, licenses merchant bankers, and allows FIIs to invest in Indian markets.
  • Depositories store securities in digital (Demat) form.
  • Mutual Funds pool money from investors and invest in various financial instruments.
  • Regulatory bodies: RBI (banking), SEBI (capital markets), IRDAI (insurance).
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Unit 2: Banking Regulation in India

Banking regulation ensures stability and smooth functioning of the financial system.

  • RBI, India’s central bank, was set up under the RBI Act, 1934, and started operations on April 1, 1935.
  • After nationalization in 1948, RBI became government-owned.
  • RBI manages currency, foreign exchange, and monetary policy in India.
  • RBI regulates interest rates, liquidity, and banking operations through CRR, SLR, and Open Market Operations (OMO).
  • The Bank Rate is the interest rate at which RBI lends to commercial banks.
  • Selective Credit Control (SCC) is used to prevent hoarding of essential goods and control inflation.
  • RBI does not allow banks to hold more than 30% of a company’s capital as security against loans.

Unit 3: Retail Banking, ADR, GDR, and P-Notes

Retail and corporate banking serve different customer segments:

  • Retail banking deals with individual customers and includes services like savings accounts, loans, credit/debit cards, lockers, and insurance.
  • Wholesale banking serves businesses and includes services like loans, LC, BG, FX, RTGS, and tax collection.
  • International banking covers cross-border financial services.
  • Universal banking provides a one-stop shop for banking, investment, and insurance services.
  • Depository Receipts (DRs) such as ADRs and GDRs allow foreign companies to raise money from Indian markets.
  • Participatory Notes (P-notes) are issued by FIIs for those who wish to invest in Indian markets without registering with SEBI. However, FIIs cannot issue P-notes to Indian citizens or companies owned by NRIs.

Unit 4: Fixed Income, Money Markets, Forex & FEMA

Understanding different markets is essential for bank operations:

  • Money markets help manage short-term funds (less than one year) and are key to liquidity management.
  • Instruments: CP (Commercial Paper), CD (Certificate of Deposit), Treasury Bills, Call Money, and Bill Rediscounting.
  • Government securities are safe, liquid, and usually offer semi-annual interest. These include Promissory Notes, Bonds, and Dated Securities.
  • Corporate bonds are issued by companies to raise debt; they do not offer ownership.
  • Interest Rate Swaps (IRS) and Futures help manage interest rate risks.
  • FEMA (Foreign Exchange Management Act), 1999 governs all foreign exchange transactions in India.
  • LIBOR (London Interbank Offered Rate) is a global benchmark for short-term interest rates, though it is being replaced by other benchmarks.
  • Indian Interbank Market is where banks borrow and lend short-term funds to each other.
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What is the exam pattern for the JAIIB PPB paper?

The Principles and Practices of Banking paper in the IIBF JAIIB 2026 exam consists of approximately 120 multiple-choice questions (MCQs), carrying a total of 100 marks. Some of these questions may be based on case studies to test practical understanding. There is no negative marking for incorrect answers, giving candidates the freedom to attempt all questions.

ParticularsDetails
Conducting BodyIndian Institute of Banking & Finance (IIBF)
Exam ModeOnline (Computer-Based Test)
Exam LevelNational
EligibilityCandidates working in banks & financial institutions and who are IIBF members
Exam FrequencyTwice a Year (May & November)
Official Websiteiibf.org.in

How should you prepare for the IIBF JAIIB PPB paper?

A proper study plan helps candidates complete the syllabus on time and revise effectively. Along with reading study notes, candidates should regularly practice quizzes and mock tests to improve their performance.

  1. Read one topic from the PPB notes every day.
  2. Revise important banking terms regularly.
  3. Solve topic-wise quizzes after every chapter.
  4. Attempt full-length mock tests every week.
  5. Analyse mistakes and revise weak topics.
  6. Practice previous year questions before the exam.

What is the passing criteria for JAIIB?

To successfully clear the JAIIB 2026 examination, candidates must meet the minimum passing criteria set by the Indian Institute of Banking & Finance (IIBF), which is at least 50 marks out of 100 in each paper. However, candidates who score a minimum of 45 marks in each paper and achieve an overall aggregate of 50% across all papers will also be considered as having passed. The details of the JAIIB passing criteria are as follows:

ConditionRequirement
Minimum Marks per Subject50 out of 100
Alternate Passing Option45 per paper + 50% aggregate in one attempt
Credit RetentionAllowed within the attempt/time window
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JAIIB “Class of Pass” Criteria

IIBF awards a Class of Pass to candidates based on their overall performance in JAIIB. This classification is applicable only in the first physical attempt (the very first time a candidate appears for the exam).

  1. First Class: Candidates who score 60% or more marks in aggregate and pass all subjects in the first attempt.
  2. First Class with Distinction: Candidates who score 70% or more marks in aggregate and also secure 60 or more marks in each subject in their first attempt.
  3. Pass Class: Awarded to candidates who pass the exam but do not meet the above distinction criteria.

FAQs

Q1. How many questions will each paper contain?

Ans. Each paper will consist of 120 objective-type multiple-choice questions (MCQs).

Q2. Can the Institute change the number of questions that can be asked for each subject?

Ans. The Institute has the authority to change the number of questions that will be asked for each subject. There are no penalties for incorrect answers.

Q3. How many marks are required to pass the exam?

Ans. A pass is defined as a score of at least 50% in total and at least 45 in each topic in a single try.

Q4. What role does SEBI play in the Indian financial system?

Ans. SEBI regulates capital markets, licenses merchant bankers, and allows FII investments.

Q5. Is there negative marking in the JAIIB PPB paper?

Ans. No, there is no negative marking for incorrect answers.