Banking Exam Cheat Sheet 2026

The 30 highest-yield Banking Exam facts, distilled from real exam questions. Print it, save it as a PDF, or study it here — free, no sign-up.

1. A 'balloon payment' in a commercial loan refers to: → A large lump-sum payment due at the end of the loan term after smaller periodic payments
2. The 'Pradhan Mantri Jan Dhan Yojana' (PMJDY) primarily aims to: → Ensure universal access to banking facilities for every household
3. Which risk metric measures the maximum expected loss over a given time horizon at a specified confidence level? → Value at Risk (VaR)
4. Which one of the following is not a General Insurance function? → Medical Insurance
5. A teller receives instructions from a manager to process a large cash transaction in two separate $6,000 amounts to avoid CTR filing. This practice is called: → Structuring (smurfing)
6. The 'SWIFT' code used in international banking transactions stands for: → Society for Worldwide Interbank Financial Telecommunication
7. What is 'wire fraud' in the context of banking awareness? → Using electronic communications to deceive someone for financial gain
8. In reading comprehension for IBPS PO, an 'inference' question asks you to: → Conclude information that is implied but not explicitly stated
9. What is 'duration gap' used to measure in banking? → The sensitivity of a bank's net worth to changes in interest rates
10. Under the Basel III framework, Tier 1 capital primarily consists of: → Common equity and retained earnings (Common Equity Tier 1 / CET1)
11. What Does Repo Rate Mean? → rate at which RBI lends to commercial banks
12. Which of the following best describes a bond? → A debt instrument where the issuer borrows money and pays periodic interest
13. A sum of $1,200 is divided among A, B, and C in the ratio 2:3:5. How much does C receive? → $600
14. What is the primary role of the Asset-Liability Committee (ALCO) in a bank? → Overseeing the bank's balance sheet structure, interest rate risk, and liquidity policy
15. Which of the following cities houses the Reserve Bank of India's headquarters? → Mumbai
16. Which credit risk metric measures the total amount a borrower owes at the time of default? → Exposure at Default (EAD)
17. Which financial statement is MOST useful for assessing a commercial borrower's ability to generate cash to service debt? → Statement of cash flows
18. What does 'screen scraping' refer to in the context of fintech data aggregation? → Using customer credentials to log into bank portals and extract data
19. What does the CRR mandate that banks do with a portion of their deposits? → Keep it as cash reserve with RBI
20. What is 'subprime lending'? → Extending credit to borrowers with poor or limited credit histories at higher rates
21. Which regulatory ratio requires U.S. commercial banks to hold a minimum percentage of deposits as reserves at the Federal Reserve? → Reserve requirement ratio
22. Which instrument is most commonly used by banks for overnight short-term liquidity management? → Federal funds
23. Which of the following is an example of a 'negative covenant' in a commercial loan agreement? → Borrower may not incur additional debt above a specified threshold without lender consent
24. What is a credit default swap (CDS)? → A derivative that transfers the credit risk of a debt instrument from one party to another
25. The prime rate is best described as: → The benchmark interest rate banks use for their most creditworthy commercial customers
26. Under Basel III capital requirements, what is the minimum Common Equity Tier 1 (CET1) capital ratio for U.S. banks? → 4.5%
27. Which of the following is the best indicator that a company is using aggressive revenue recognition practices? → Revenue growing much faster than accounts receivable collections
28. The primary purpose of the Federal Deposit Insurance Corporation (FDIC) is to: → Protect depositors and maintain stability by insuring deposits up to the statutory limit
29. Which type of corporate banking client would most likely use a 'borrowing base' structure in their credit facility? → A company with significant receivables and inventory used as collateral
30. The primary purpose of the Net Stable Funding Ratio (NSFR) under Basel III is to: → Require banks to fund long-term assets with stable, long-term funding sources