Question 1

The 'Pradhan Mantri Fasal Bima Yojana (PMFBY)' is a crop insurance scheme. What is the maximum liability of the insurance company under PMFBY for a single claim?

Accepted Answer

The Pradhan Mantri Fasal Bima Yojana (PMFBY), launched in January 2016, is a comprehensive crop insurance scheme designed to protect farmers against crop loss due to natural calamities, pests, and diseases. Under PMFBY, the insurance company's liability is determined by the sum insured, which is calculated based on the Loanable Value (LV) for loanee farmers and the Threshold Yield (TY) for non-loanee farmers. There is no fixed maximum liability cap per claim; instead, the liability is proportional to the sum insured declared at the time of enrollment. The scheme is implemented through authorized insurance companies as per guidelines issued by the Ministry of Agriculture and RBI. Therefore, answer is D.

Question 2

The Reserve Bank of India launched the 'Pradhan Mantri Jeevan Jyoti Bima Yojana' (PMJJBY) in partnership with banks to provide life insurance coverage. Under this scheme, what is the annual premium amount that a beneficiary is required to pay?

Accepted Answer

The Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY) is a government-backed life insurance scheme launched by the Ministry of Labour & Employment in association with RBI and participating banks. The scheme provides life insurance coverage of ₹2 lakh in case of death due to any reason. The annual premium is fixed at ₹330 per annum, which is deducted from the bank account of the beneficiary between May 31 and June 30 each year. This scheme targets unorganised sector workers and informal economy participants, making it one of the most affordable life insurance products in India. Therefore, the answer is B.

Question 3

The 'Pradhan Mantri Suraksha Bima Yojana' (PMSBY) is an accident insurance scheme launched by the Government of India. Which of the following correctly states the annual premium and coverage amount under PMSBY?

Accepted Answer

The Pradhan Mantri Suraksha Bima Yojana (PMSBY) is an accidental death and disability insurance scheme launched on May 28, 2015, by the Ministry of Labour & Employment in coordination with RBI and participating banks. The scheme provides accidental death/disability coverage of ₹2 lakh (₹1 lakh for partial disability) with an annual premium of ₹12 per annum. This premium is deducted from the bank account of the beneficiary between May 31 and June 30 each year. The scheme is designed to provide affordable accident insurance to informal sector workers and is one of the most cost-effective insurance products in India. Therefore, the answer is C.

Question 4

The 'Atal Pension Yojana (APY)' is a government-backed pension scheme designed for unorganized sector workers. At what age can a subscriber begin receiving pension under APY?

Accepted Answer

The Atal Pension Yojana (APY), launched in May 2015, is a defined contribution pension scheme for unorganized sector workers. Subscribers can begin receiving pension at the age of 60 years. The scheme requires subscribers to contribute regularly during their working years (from age 18 to 59), and upon reaching 60, they receive a guaranteed monthly pension. The pension amount ranges from ₹1,000 to ₹5,000 per month, depending on the contribution made. Therefore, answer is B.

Question 5

Under the 'Pradhan Mantri Jan Dhan Yojana (PMJDY)', what is the maximum limit of accidental death insurance coverage provided to account holders?

Accepted Answer

The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched in August 2014, provides basic banking services to the unbanked population. Account holders receive accidental death insurance coverage of ₹1 lakh (₹100,000) at no additional cost. This is a core feature of PMJDY, designed to provide financial security to low-income account holders. The insurance is provided through a tie-up between banks and insurance companies as per RBI guidelines. Therefore, answer is C.

Question 6

Under the 'Sukanya Samriddhi Yojana (SSY)', a girl child's account can be opened by a parent or legal guardian. Up to what age of the girl child can the account be opened?

Accepted Answer

The Sukanya Samriddhi Yojana (SSY), launched in January 2015, is a savings scheme for the girl child. An account under SSY can be opened for a girl child up to the age of 10 years. The account must be opened by a parent or legal guardian in the name of the girl child. The scheme offers tax benefits and a competitive interest rate. Deposits can be made until the girl child turns 21 years old, and the account matures when she turns 21. Therefore, answer is A.

Question 7

The Reserve Bank of India launched the 'Pradhan Mantri Mudra Yojana (PMMY)' to provide collateral-free loans to micro and small enterprises. Under this scheme, loans are provided through which of the following categories?

Accepted Answer

The Pradhan Mantri Mudra Yojana (PMMY), launched in April 2015, provides collateral-free loans to micro and small enterprises through three product categories: Shishu (loans up to ₹50,000), Kishore (loans from ₹50,001 to ₹5 lakh), and Tarun (loans from ₹5 lakh to ₹10 lakh). These categories are designed to support entrepreneurs at different growth stages. The scheme is implemented through scheduled commercial banks, RRBs, and microfinance institutions. Therefore, answer is B.

Question 8

Under the RBI's 'Regulatory Sandbox' framework, which of the following correctly describes the scope and duration of testing for fintech innovations?

Accepted Answer

The RBI's Regulatory Sandbox framework, operationalized from 2019 onwards, allows fintech companies and banks to test innovative financial products and services in a controlled environment. The framework permits testing for a duration of up to 6 months (extendable to 12 months in specific cases), with a limited participant base and capped transaction limits. The sandbox is NOT a permanent regulatory exemption — it is a time-bound testing phase. Participants must comply with core RBI regulations on consumer protection, data security, and anti-money laundering (AML/KYC), even within the sandbox. Therefore, answer is B.

Question 9

The RBI introduced the 'Account Aggregator (AA)' framework under the Consent-based Information Architecture. Which statement correctly reflects the role and regulatory status of Account Aggregators?

Accepted Answer

The Account Aggregator (AA) framework, operationalized by RBI under the Non-Banking Financial Company – Account Aggregator (NBFC-AA) category, allows regulated entities to aggregate financial information from multiple sources (banks, insurance companies, mutual funds, pension funds) with explicit customer consent. AAs are classified as NBFCs and are regulated by RBI. They do NOT hold customer funds — they only aggregate and share financial data. AAs operate under the Consent-based Information Architecture, which mandates explicit, revocable consent from customers before data sharing. Therefore, answer is D.

Question 10

The RBI's 'Liquidity Coverage Ratio (LCR)' requirement under Basel III framework mandates that banks maintain a minimum LCR of what percentage, and what is the primary objective of this requirement?

Accepted Answer

Under Basel III framework, implemented by RBI via Master Directions on Basel III, banks are required to maintain a minimum Liquidity Coverage Ratio (LCR) of 100%. The LCR is calculated as the ratio of High-Quality Liquid Assets (HQLA) to total net cash outflows over a 30-day stress scenario. The primary objective is to ensure that banks have sufficient liquid assets to survive acute liquidity stress lasting 30 days. This requirement was phased in from 2015 onwards and became fully effective from January 1, 2019. Therefore, answer is A.

Question 11

Under the RBI's 'Ombudsman Scheme for Digital Payments', which of the following is a correct statement regarding the scope of complaints and compensation limits?

Accepted Answer

The RBI introduced the Ombudsman Scheme for Digital Payments (effective from 2019) to address customer grievances related to digital payment transactions. The scheme covers complaints related to unauthorized transactions, non-crediting of funds, defective transactions, and service failures in digital payment systems (UPI, NEFT, RTGS, IMPS, cards, etc.). The maximum compensation limit under the scheme is ₹1 lakh per complaint. However, the scheme does NOT cover complaints related to forex transactions, credit decisions by banks, or interest rate disputes — these fall outside the scope. Therefore, answer is C.

Question 12

Under the RBI's 'Revised Framework for Regulation of Microfinance Institutions (MFIs)' issued in 2023, which category of institution is now permitted to lend to microfinance borrowers WITHOUT being classified as an MFI, provided certain conditions are met?

Accepted Answer

The RBI issued a revised regulatory framework for MFIs in March 2023 to streamline oversight and reduce regulatory arbitrage. Under this framework, Non-Banking Financial Companies (NBFCs) that lend to microfinance borrowers are classified as NBFC-MFIs only if they meet specific criteria: (1) microfinance lending constitutes at least 50% of their total assets, and (2) they comply with MFI-specific regulations on interest rates, customer protection, and lending limits. However, Small Finance Banks (SFBs) and Commercial Banks are explicitly permitted to lend to microfinance borrowers WITHOUT being classified as MFIs, as long as they comply with RBI's lending norms and customer protection guidelines. The revised framework recognizes that banks have stronger regulatory oversight and consumer protection mechanisms. Therefore, answer is C.

Question 13

The Reserve Bank of India launched the 'Pradhan Mantri Mudra Yojana (PMMY)' to provide collateral-free loans to micro and small enterprises. Under this scheme, loans are categorized into three categories based on loan amount. Which of the following correctly identifies the loan category and its corresponding maximum loan limit?

Accepted Answer

The Pradhan Mantri Mudra Yojana (PMMY), launched in April 2015, categorizes loans into three tiers: (1) Shishu — up to ₹50,000; (2) Kishore — from ₹50,001 to ₹5 lakh; (3) Tarun — from ₹5 lakh to ₹10 lakh. The scheme is implemented through banks, NBFCs, and MFIs to promote entrepreneurship among unorganized sector workers and first-time entrepreneurs. The correct answer is Option B, which accurately reflects the Tarun category limit of ₹10 lakh. This is a foundational scheme under the Ministry of Micro, Small and Medium Enterprises (MSME) and RBI's financial inclusion mandate.

Question 14

Under the Pradhan Mantri Jan Dhan Yojana (PMJDY), banks are mandated to provide a RuPay debit card to account holders. Which of the following statements correctly describes the accident insurance coverage provided with the RuPay card issued under PMJDY?

Accepted Answer

The Pradhan Mantri Jan Dhan Yojana (PMJDY), launched in August 2014, mandates that all eligible account holders receive a RuPay debit card with built-in accident insurance coverage. The accident insurance cover is ₹1 lakh (₹100,000) for accidental death or permanent disability, and ₹50,000 for partial disability. This insurance is provided at no additional cost to the account holder and is underwritten by insurance partners. The scheme is overseen by the Department of Financial Services (DFS) and implemented through all scheduled commercial banks. Option B correctly identifies the accident insurance structure. This is a critical component of PMJDY's social security architecture.

Question 15

The Reserve Bank of India introduced the 'Payments System Vision 2021' to enhance digital payment infrastructure. One of the key objectives was to increase the proportion of digital transactions. Which of the following correctly identifies a major payment system initiative launched under this vision that specifically targets retail digital payments?

Accepted Answer

RBI's Payments System Vision 2021 (released in 2019) outlined strategic objectives to strengthen India's payment ecosystem. A cornerstone initiative under this vision was the expansion of the Unified Payments Interface (UPI), which was designed to facilitate real-time, peer-to-peer, and merchant payments at retail level. UPI, developed by NPCI (National Payments Corporation of India), enables instant fund transfers using a single mobile application. Another key initiative was the promotion of BHIM (Bharat Interface for Money), also developed by NPCI, to drive digital payments among unbanked and underbanked populations. The vision also emphasized interoperability across payment systems and reducing cash dependency. Option B correctly identifies UPI as a major retail digital payment initiative under the Payments System Vision 2021. This is critical for IBPS Clerk candidates as they will handle customer queries on digital payment channels.

Question 16

The Reserve Bank of India introduced the 'Regulatory Sandbox' framework to enable fintech companies and banks to test innovative financial products and services in a controlled environment. Which of the following correctly describes a key characteristic of the RBI Regulatory Sandbox framework?

Accepted Answer

The RBI Regulatory Sandbox (launched in April 2019) is a controlled testing environment that allows fintech companies, startups, and banks to experiment with innovative financial products, services, and business models without full regulatory compliance initially. Key characteristics include: (1) Time-limited testing period (typically 6 months, extendable); (2) Limited customer base (capped at a defined number); (3) Relaxed regulatory requirements during the testing phase; (4) Real-world transaction testing with actual customers; (5) Structured feedback mechanism to RBI; (6) Potential for regulatory approval post-successful testing. The framework operates under RBI's oversight and is designed to foster innovation while maintaining financial stability and consumer protection. Option B correctly identifies the time-limited nature and controlled customer base as defining characteristics. This is important for IBPS Clerk candidates to understand emerging banking trends and RBI's regulatory approach.

Question 17

The Reserve Bank of India introduced the 'Liquidity Coverage Ratio (LCR)' as part of Basel III implementation to ensure banks maintain sufficient high-quality liquid assets. Which of the following correctly describes the primary objective and minimum requirement of the LCR framework?

Accepted Answer

The Liquidity Coverage Ratio (LCR), introduced as part of Basel III reforms and implemented in India by RBI, is designed to ensure that banks maintain a minimum level of high-quality liquid assets (HQLA) to survive a severe liquidity stress scenario lasting 30 days. The LCR requirement mandates that a bank's stock of HQLA must be at least equal to its total net cash outflows over a 30-day stress period. In other words, LCR = HQLA / Total Net Cash Outflows (30-day period) ≥ 100%. RBI implemented LCR in phases: 60% from January 2015, 80% from January 2016, and 100% from January 2017 onwards. HQLA includes cash, central bank reserves, and high-quality government securities. The framework is governed by RBI's Basel III guidelines and is critical for systemic stability. Option B correctly identifies the 30-day stress period and the 100% minimum requirement. This is essential for IBPS Clerk candidates to understand banking regulation and capital adequacy frameworks.

Question 18

The Reserve Bank of India launched the 'Unified Payments Interface (UPI) 2.0' framework to enhance digital payments. Which of the following is NOT a feature introduced or emphasized under UPI 2.0 guidelines?

Accepted Answer

UPI 2.0, operationalized by NPCI (National Payments Corporation of India) from 2023 onwards, introduced features such as recurring payments (autopay), one-time mandate (OTM) for subscription services, and enhanced security protocols. However, UPI 2.0 does NOT mandate the use of biometric authentication for every transaction — it remains optional and transaction-risk-based. The framework focuses on interoperability, merchant payments, and recurring transaction support, but does not impose mandatory biometric verification at point of transaction. Therefore, answer is C.

IBPS Clerk New Banking Schemes

New Banking Schemes— Rules & Concept

Key Points to Remember

Exam-Specific Tips

New Banking Schemes — Practice Questions

60-Second Revision — New Banking Schemes