JAIIB Exam 2025 – IE&IFS Important Questions MCQs Quiz-23

01/03/2025

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JAIIB Exam 2025 IE&IFS Important Questions MCQs Quiz-23

JAIIB Exam Quiz 2025: The JAIIB exam is scheduled for 2025 by IIBF. Here, we are providing JAIIB IE&IFS MCQ-based quizzes on a regular basis. You can attempt the quizzes regularly to prepare for the upcoming JAIIB exam. The quizzes will be provided module-wise and unit-wise. You can attempt the JAIIB IE&IFS quizzes from the links below and improve your preparation by practicing regularly. These quizzes will help you boost your score in the JAIIB exam and guide you to clear the exam on your first attempt.

Q.1 Which of the following was the first Development Financial Institution (DFI) established in India, and in which year?
A) Industrial Credit and Investment Corporation of India (ICICI), 1955
B) State Financial Corporation (SFC), 1951
C) Industrial Finance Corporation of India (IFCI), 1948
D) Small Industries Development Bank of India (SIDBI), 1990

Q.2 Which of the following was NOT one of the gaps identified in the Indian banking system and capital markets postindependence?
A) Commercial banks focused mainly on working capital financing and avoided long-term finance.
B) The capital market faced a decline in investor confidence due to malpractices and speculation.
C) The government mandated all banks to provide long-term industrial finance immediately after independence.
D) There was a lack of issue houses and underwriting firms to support the securities market.

Q 3 Which of the following is NOT one of the four categories of Development Financial Institutions (DFIs) in India?
A) Development Banks
B) Specialised Financial Institutions
C) Commercial Banks
D) Investment Institutions

Q.4 Which of the following factors contributed to the dominance of Development Financial Institutions (DFIs) in long-term industrial financing in India?
A) DFIs were primarily funded by short-term deposits from commercial banks.
B) The absence of refinancing and down-selling markets required DFIs to hold loan assets till maturity.
C) Corporates had unrestricted access to External Commercial Borrowings (ECBs).
D) The capital market was deep and highly liquid, reducing the need for DFIs.

Q.5 What was the key outcome of the Narasimham Committee (1998) recommendations regarding Development Financial Institutions (DFIs) in the post-liberalization period?
A) DFIs were mandated to remain separate from commercial banking to focus exclusively on long-term financing.
B) The concept of Universal Banking was introduced, allowing banks to engage in both short-term and long-term financing.
C) RBI prohibited commercial banks from engaging in term lending to avoid financial risks.
D) DFIs were completely phased out, with all their functions transferred to Non-Banking Financial Companies (NBFCs).

Q.6 Which of the following statements about the Industrial Finance Corporation of India (IFCI) is correct?
A) IFCI was established in 1991 following the liberalization of the Indian economy.
B) Initially set up as a statutory corporation in 1948, IFCI was later converted into a company under the Indian Companies Act, 1956.
C) IFCI was primarily focused on short-term working capital finance for small businesses.
D) The authorized share capital of IFCI remained unchanged since its establishment in 1948.

Q.7 Which of the following is NOT a function performed by IFCI?
A) Providing medium and long-term financial assistance for industrial projects.
B) Offering corporate advisory services, including investment banking and business restructuring.
C) Issuing currency notes and regulating the monetary policy of India.
D) Facilitating foreign direct investment (FDI) by assisting foreign investors with approvals and market insights.

Q.8 Which of the following institutions was NOT established or promoted by IFCI?
A) Management Development Institute (MDI)
B) National Stock Exchange (NSE)
C) Securities and Exchange Board of India (SEBI)
D) Investment and Credit Rating Agency (ICRA)

Q.9 What was the primary reason for the establishment of ICICI in 1955?
A) To provide short-term working capital finance to Indian businesses.
B) To offer underwriting and investment facilities to emerging enterprises, addressing gaps in capital markets.
C) To regulate and supervise banking activities in India.
D) To act as India’s central bank and manage monetary policy.

Q.10 What was the key outcome of the 2002 merger of ICICI with ICICI Bank?
A) ICICI Ltd ceased to exist as a Development Financial Institution, transforming into a universal bank.
B) ICICI Bank was restructured as a pure-play development financial institution (DFI).
C) ICICI continued as an independent financial institution alongside ICICI Bank.
D) ICICI’s merger led to the closure of its international operations and delisting from the New York Stock Exchange.

Q.11 What was a significant step taken by ICICI in 1982 to expand its Merchant Banking Division?
A) It started providing credit rating services to Indian corporations.
B) It launched a dedicated division for underwriting only government securities.
C) It began offering investment counseling services to Non-Resident Indians (NRIs).
D) It restricted its merchant banking services to domestic companies only.

Q.12 What was the primary objective behind the establishment of the Industrial Development Bank of India (IDBI) in 1964?
A) To provide direct financial assistance to small-scale industries only
B) To act as an apex institution coordinating financial institutions and funding large industrial projects
C) To function as a commercial bank offering short-term loans to businesses
D) To replace the Industrial Finance Corporation of India (IFCI) as the primary lender for infrastructure projects

Q.13 What was the main purpose of the Soft Loan Scheme introduced by IDBI in 1976?
A) To provide financial assistance for setting up new businesses in backward areas
B) To support industrial units in specific industries for modernization
C) To provide concessional loans for working capital needs of small businesses
D) To finance large infrastructure projects through concessional credit

Q.14 What is the primary role of the Small Industries Development Bank of India (SIDBI)?
A) Providing long-term loans to large-scale industries for infrastructure development
B) Promoting, financing, and developing the MSME sector in India
C) Regulating the banking sector and overseeing financial institutions
D) Managing foreign investments in Indian industrial projects

Q.15 What are the three main types of financial assistance provided by SIDBI?
A) Direct Finance, Indirect Finance, and Micro Finance
B) Equity Investments, Infrastructure Finance, and Trade Finance
C) Retail Banking, Merchant Banking, and Treasury Operations
D) Industrial Finance, Agricultural Finance, and Housing Finance

Q.16 Under the SIDBI Make in India Soft Loan Fund for MSMEs (SMILE) scheme, what is the minimum loan size for purposes other than equipment finance?
A) ₹5 lakh
B) ₹10 lakh
C) ₹25 lakh
D) ₹50 lakh

Q.17 Which of the following funds was set up with RBI’s support to promote equity and equity-based investments in start-ups and MSMEs?
A) Fund of Funds for Start-ups
B) Aspire Fund
C) India Aspiration Fund
D) SMILE Scheme

Q.18 What is the primary role of the Export-Import Bank of India (EXIM Bank)?
A) Financing and promoting foreign trade in India
B) Providing microfinance to small businesses
C) Regulating commercial banks in India
D) Managing India’s foreign exchange reserves

Q.19 How does Buyer’s Credit benefit Indian exporters?
A) It reduces transaction costs and complexities of international trade transactions
B) It allows them to import foreign goods at LIBOR-based rates
C) It provides them with long-term working capital to set up manufacturing units abroad
D) It exempts them from paying export taxes

Q.20 Which of the following is NOT an objective of EXIM Bank’s loan assistance to Indian companies for their overseas ventures?
A) Providing equity investment in their overseas Joint Ventures (JV) or Wholly Owned Subsidiaries (WOS)
B) Financing working capital requirements of overseas JV/WOS
C) Offering term loans to Indian companies for setting up manufacturing units exclusively in India
D) Supporting acquisition of brands, patents, and intellectual property rights abroad

Q.21 How does EXIM Bank support Indian companies’overseas ventures through its guarantee facility?
A) It guarantees term loans and working capital for their overseas Joint Ventures (JV) or Wholly Owned Subsidiaries (WOS)
B) It provides direct equity investment in Indian startups looking to expand domestically
C) It offers tax exemptions for Indian exporters selling goods in foreign markets
D) It allows Indian companies to raise funds in foreign stock exchanges

Q.22 According to Section 41 of the NaBFID Act, 2021, which legal provision applies to NaBFID in the same manner as it does to a bank?
A) The Negotiable Instruments Act, 1881
B) The Bankers’ Books Evidence Act, 1891
C) The Companies Act, 2013
D) The Insolvency and Bankruptcy Code, 2016

Q.23 Which of the following statements is true regarding the winding up of NaBFID as per the NaBFID Act, 2021?
A) NaBFID can be liquidated through a special resolution passed by its shareholders
B) The winding-up of NaBFID shall be governed by the Insolvency and Bankruptcy Code, 2016
C) NaBFID cannot be placed in liquidation except by an order of the Central Government
D) The Reserve Bank of India has the sole authority to dissolve NaBFID under certain financial

Q.24 According to the NaBFID Act, 2021, what is the minimum percentage of shares that the Central Government must hold in NaBFID at all times?
A) 10%
B) 26%
C) 49%
D) 51%

Q.25 What is the primary objective of the National Bank for Financing Infrastructure and Development (NaBFID)?
A) To regulate and supervise all financial institutions involved in infrastructure financing
B) To provide long-term infrastructure financing and develop the bond and derivatives market for infrastructure funding
C) To offer direct credit facilities to small-scale industries and micro-enterprises
D) To manage government infrastructure projects and publicprivate partnerships

Q.26 What was the primary reason for establishing the National Housing Bank (NHB) in 1988?
A) To provide direct housing loans to individual borrowers across India
B) To act as the apex-level financial institution for housing finance and promote long-term housing credit
C) To regulate all commercial banks engaged in housing finance activities
D) To manage government-owned real estate projects and provide infrastructure financing

Answer:

Q1: C
Q2: C
Q3: C
Q4: B
Q5: B
Q6: B
Q7: C
Q8: C
Q9: B
Q10: A
Q11: C
Q12: B
Q13: B
Q14: B
Q15: A
Q16: C
Q17: C
Q18: A
Q19: A
Q20: C
Q21: A
Q22: B
Q23: C
Q24: B
Q25: B
Q26: B