RBI Banking Reforms & Financial Stability MCQs for Exams

1.

The RBI's new framework for stressed assets (2026) aims to improve the recovery rate of banks. Which of the following is a consequence of this improved resolution mechanism?

A Increased NPAs for banks.

B Reduced lending capacity for banks.

C Better capital allocation and improved financial health of banks.

D Higher interest rates for all borrowers.

2.

Under the 2026 framework, what is a key element introduced by the RBI for the resolution of stressed assets, particularly for large value loans?

A Mandatory sale of stressed assets to Asset Reconstruction Companies (ARCs) within 90 days.

B Establishment of a Central Repository for Stressed Assets (CRSA).

C A 'Resolution Plan' that must be invoked by lenders within 30 days of default.

D Automatic conversion of debt to equity for all stressed accounts.

3.

As of 2026, the RBI's new framework for resolving stressed assets in banks primarily focuses on:

A Increasing the number of banks to manage stressed assets.

B Encouraging banks to write off all bad loans immediately.

C Providing a structured and time-bound approach for early recognition and resolution.

D Shifting the burden of stressed assets to the government.

4.

In 2026, the RBI's enhanced digital lending framework prohibits which of the following practices by Digital Lending Apps (DLAs)?

A Collecting borrower data for credit assessment.

B Disclosing loan terms and conditions upfront.

C Automated top-up loans based on repayment history.

D Charging upfront fees that are not explicitly disclosed to the borrower.

5.

Under the revised RBI guidelines for digital lending (2026), what is the primary objective of mandating a standardized Key Fact Statement (KFS) for all digital loans?

A To allow lenders to charge higher interest rates.

B To ensure borrowers understand all costs, terms, and conditions before taking a loan.

C To facilitate faster loan disbursal.

D To reduce the regulatory burden on digital lending platforms.

6.

As per the enhanced digital lending framework by the RBI in 2026, which of the following is NOT a mandatory disclosure requirement for Digital Lending Apps (DLAs) before entering into an agreement with a borrower?

A All information about the loan, including all fee components, interest rate, and other charges.

B The name and full address of the lending institution and its branches.

C The minimum and maximum tenure of the loan.

D The borrower's credit score history for the past five years.

Banking & Finance MCQs - 2026-10-05