MCQs on Banking & Finance Current Affairs

1.

Beyond traditional banking metrics, what structural factor has consistently supported the improved performance of Public Sector Banks (PSBs) in recent years, including their strong Q1 2026 results?

A Decreased government equity infusion and support.

B Enhanced focus on digital transformation and governance reforms.

C A significant reduction in their branch network.

D Increased reliance on high-cost wholesale funding.

2.

A key indicator of improved financial health for Public Sector Banks (PSBs) often cited in their strong performance reports, such as in Q1 2026, is:

A An increase in Gross Non-Performing Assets (GNPAs) ratio.

B A decrease in Provision Coverage Ratio (PCR).

C A reduction in Net Non-Performing Assets (NNPAs) ratio.

D Stagnant growth in deposits.

3.

Which of the following factors is most likely to contribute significantly to the strong Q1 performance of Public Sector Banks (PSBs) in 2026?

A A substantial increase in Non-Performing Assets (NPAs).

B Robust credit growth coupled with improved asset quality.

C Significant decline in Net Interest Margins (NIMs).

D Reduced focus on retail lending.

4.

In the context of RBI's framework for digital lending, what is the current stance on First Loss Default Guarantee (FLDG) arrangements between Regulated Entities (REs) and Lending Service Providers (LSPs) as of 2026?

A FLDG arrangements are completely prohibited to prevent moral hazard.

B FLDG arrangements are permitted, provided the guarantee is backed by a deposit or bank guarantee from the LSP, up to a certain percentage of the loan portfolio.

C LSPs can provide unlimited FLDG to REs without any collateral.

D FLDG is only allowed for loans below a certain threshold amount.

5.

Under the RBI's framework for digital lending, what is a mandatory requirement regarding data collection by Digital Lending Apps (DLAs)?

A DLAs can access a borrower's mobile phone resources like contacts, call logs, and media gallery for credit assessment.

B DLAs must obtain explicit consent from borrowers for specific data access, avoiding unnecessary data.

C Borrowers are not required to provide consent for data access if it's for improving credit scores.

D Data collected by DLAs can be shared with third-party marketing agencies without borrower's approval.

6.

Which of the following is a key provision of the Reserve Bank of India's (RBI) framework for digital lending, effective by 2026?

A All loan disbursals and repayments must be executed directly between the borrower and the Regulated Entity (RE).

B Lending Service Providers (LSPs) are permitted to handle loan disbursals and repayments on behalf of REs.

C Digital lending apps can access a borrower's contact list and call logs without explicit consent.

D There is no mandatory cooling-off period for digital loans.

Banking & Finance MCQs - 2026-08-17