Banking & Finance MCQs: RBI, PSBs, CBDC (May 2026)

1.

The 'e₹' (digital rupee) is a digital form of fiat currency issued by the central bank. Which of the following is a key characteristic of CBDC?

A It is a decentralized cryptocurrency like Bitcoin.

B It is a liability of the central bank.

C Its value is determined by market forces alone.

D It is not backed by any government or central bank.

2.

What is the primary purpose of conducting a pilot program for India's Central Bank Digital Currency (CBDC)?

A To replace all existing digital payment systems immediately.

B To assess the feasibility, security, and impact of a digital rupee before a full-scale launch.

C To generate revenue for the Reserve Bank of India.

D To encourage the use of cryptocurrencies.

3.

The expansion of India's Central Bank Digital Currency (CBDC) pilot to Tier-2 cities signifies:

A The immediate discontinuation of physical currency.

B A move towards wider adoption and testing of CBDC in diverse urban settings.

C The completion of the CBDC pilot phase.

D A reduction in the number of participating banks.

4.

Robust earnings for Public Sector Banks in Q4 FY26, driven by asset quality improvement, would likely lead to which of the following positive outcomes?

A Increased reliance on government bailouts.

B Reduced capacity to lend to the economy.

C Enhanced financial stability and potential for higher dividends.

D A decrease in their credit ratings.

5.

An improvement in asset quality for banks generally implies:

A An increase in the number of loans that are overdue or unlikely to be repaid.

B A decrease in the proportion of loans that are performing well.

C A reduction in Non-Performing Assets (NPAs) and better recovery rates.

D Higher provisioning for bad loans.

6.

What was a primary driver for the robust Q4 FY26 earnings reported by Public Sector Banks (PSBs)?

A A significant increase in non-performing assets (NPAs).

B A decline in net interest margins (NIMs).

C Improvement in asset quality and reduction in NPAs.

D Reduced government capital infusion.

7.

The RBI's new regulations for digital lending platforms mandate that loan disbursals and repayments should be directly routed through the bank accounts of the borrower and the regulated entity (RE). Which of the following is a primary reason for this mandate?

A To facilitate faster loan approvals.

B To prevent misuse of funds and ensure transparency in financial flows.

C To reduce the transaction costs for digital lenders.

D To encourage the use of digital wallets.

8.

As per the recent RBI guidelines, digital lending platforms are generally required to disclose all-in costs, including fees and charges, to the borrower. What does 'all-in cost' typically encompass?

A Only the principal loan amount.

B Interest rate, processing fees, and any other charges levied.

C Penalties for late payments only.

D Administrative costs of the lending institution.

9.

Which of the following is a key objective behind the Reserve Bank of India's (RBI) introduction of stricter norms for digital lending platforms?

A To encourage unregulated lending practices.

B To protect borrowers from predatory lending and ensure fair practices.

C To reduce the number of digital lending platforms in operation.

D To increase the interest rates charged by digital lenders.

Banking & Finance MCQs - 2026-05-18