✅ IMPORTANT MCQs

AI & ML in Banking (1–12)

1. Which of the following is a bank chatbot example for a Bank?
   a) Alexa
   b) HDFC EVA
   c) Siri
   d) Google Assistant
   Answer: b. (HDFC’s EVA is listed.)
2. AI/ML in banks is used for which of these purposes (as per the document)?
   a) Hyper-personalization
   b) Weather forecasting only
   c) Manufacturing optimization
   d) Road construction
   Answer: a. (Hyper-personalization explicitly mentioned.)
3. Which use of AI helps banks assess creditworthiness of customers with little/no credit history?
   a) Classical statistics
   b) Alternative data analysis (utility bills, GSTN, digital footprints)
   c) Door-to-door surveys only
   d) Newspaper reviews
   Answer: b. (Alternative data for underwriting.)
4. AI in banking is employed for real-time _____ detection. Fill the blank.
   a) Certificate
   b) Fraud
   c) Loan
   d) Branch
   Answer: b. (Real-time fraud detection is noted.)
5. Which of these is NOT listed as an AI application?
   a) Chatbots
   b) Credit underwriting using alternative data
   c) Fraud detection
   d) Physical branch cleaning robots
   Answer: d.
6. Which data source is explicitly mentioned for MSME credit underwriting?
   a) Passport records
   b) GSTN data
   c) Meteorological data
   d) Postal records
   Answer: b. (GSTN is given as example.)
7. AI-powered chatbots improve banks’ operations by:
   a) Eliminating all staff instantly
   b) Handling customer queries 24×7 and reducing human load
   c) Printing bank statements faster
   d) Opening branches automatically
   Answer: b. (24×7 handling reduces human agent load.)
8. Which bank’s chatbot ‘SIA’ ?
   a) ICICI
   b) SBI
   c) Axis
   d) PNB
   Answer: b. (SBI’s SIA is named.)
9. Hyper-personalization means:
   a) Same product to everyone
   b) Personalized product recommendations using transaction data
   c) Giving cash to everyone
   d) Bank staff wearing uniforms
   Answer: b. (Explicit in the text.)
10. AI/ML helps fraud detection by:
    a) Manual verification only
    b) Real-time pattern analysis & instant flagging of anomalies
    c) Reducing internet speeds
    d) Adding more paper forms
    Answer: b. (Real-time pattern detection is stated.)
11. Which phrase best describes the current role of AI in banks?
    a) Luxury
    b) Necessity
    c) Irrelevant
    d) Optional hobby
    Answer: b. (AI is described as a necessity.)
12. AI in underwriting leverages ‘alternative data’. Which of these is an example of alternative data listed?
    a) Utility bill payments
    b) Stock exchange tickers
    c) Satellite images only
    d) Road conditions
    Answer: a. (Utility bill payments given as example.)

API / Open Banking / Account Aggregator (13–20)

13. The Account Aggregator (AA) framework mentioned in the document is led by which body?
    a) SEBI
    b) RAHI (Reserve Bank Innovation Hub)
    c) IMF
    d) World Bank
    Answer: b. (AA is described as a RAHI-led framework.)
14. Account Aggregators primarily enable:
    a) Forced data sharing
    b) Secure, consent-based financial data sharing across institutions
    c) Currency conversion only
    d) ATM cash dispensing
    Answer: b. (Secure consent-based sharing is core.)
15. Which of these examples are given for Account Aggregator providers?
    a) CAMS FinServ and Finvu
    b) Google Pay and PhonePe
    c) SBI and PNB
    d) Visa and Mastercard
    Answer: a. (CAMS FinServ, Finvu mentioned.)
16. ‘Embedded Finance’ refers to:
    a) Banks embedding employees in firms
    b) Banking services integrated inside non-financial platforms (e.g., loans at checkout)
    c) Physical ATMs in malls only
    d) Old banking ledgers
    Answer: b. (Embedded finance example given.)
17. ‘Banking-as-a-Service (BaaS)’ means:
    a) Banks selling branches
    b) Banks offering licensed capabilities (payments, lending, compliance) as white-label services to other businesses
    c) Only issuing debit cards
    d) Creating banks in villages only
    Answer: b.
18. Open banking inspiration in India mentioned in the file references which European directive?
    a) GDPR
    b) PSD2 (Second Payment Services Directive)
    c) MiFID II
    d) Basel III
    Answer: b. (PSD2 cited as inspiration.)
19. A direct benefit of Account Aggregators is:
    a) Less transparency
    b) Consolidated view of finances & easier access to credit
    c) Higher paperwork
    d) No change in customer experience
    Answer: b. (Consolidated finance view & easier credit.)
20. Account Aggregators operate on the principle of:
    a) Data hoarding by banks
    b) Customer consent & secure transfer of data
    c) Mandatory public disclosure
    d) None of the above
    Answer: b. (Consent-based model is emphasized.)

Blockchain / CBDC / Trade Finance (21–26)

21. Which pilot CBDC (Central Bank Digital Currency) is mentioned?
    a) eDollar
    b) e₹ (Digital Rupee)
    c) eEuro
    d) eYen
    Answer: b. (Digital Rupee e₹ pilot by RBI.)
22. Blockchain’s use in trade finance helps mainly by:
    a) Increasing paperwork
    b) Streamlining documentation, reducing fraud and processing time from weeks to days
    c) Slowing down transactions
    d) Removing insurance
    Answer: b. (Trade finance efficiency highlighted.)
23. Which banks are named as having piloted blockchain projects for trade finance?
    a) ICICI and Axis
    b) SBI and PNB only
    c) HDFC and Kotak only
    d) None mentioned
    Answer: a. (ICICI and Axis cited.)
24. Blockchain can improve cross-border payments by making them:
    a) Slower and costlier
    b) Faster, cheaper and more transparent
    c) Only local
    d) Irrelevant to banks
    Answer: b. (Cross-border payments benefits stated.)
25. CBDC stands for:
    a) Central Business Data Centre
    b) Central Bank Digital Currency
    c) Corporate Banking Digital Compliance
    d) Consumer Banking Deposit Code
    Answer: b. (CBDC = Central Bank Digital Currency.)
26. The Digital Rupee (e₹) pilot is an application of which technology?
    a) API only
    b) DLT / Blockchain
    c) Spreadsheet macros
    d) Fax machines
    Answer: b. (e₹ as DLT application.)

Cloud & Partnerships (27–31)

27. Banks moving to cloud infrastructure gain benefits such as:
    a) Reduced scalability
    b) Enhanced scalability, faster time-to-market, cost reduction
    c) Only more branches
    d) More paper usage
    Answer: b. (Cloud benefits listed.)
28. Which cloud providers are mentioned as partners for major banks?
    a) Amazon and IBM only
    b) Google Cloud and Microsoft Azure
    c) Oracle and SAP only
    d) Yahoo and Baidu
    Answer: b. (HDFC & Kotak with Google Cloud and Microsoft Azure.)
29. RBI’s role regarding cloud adoption is described as providing:
    a) No guidance
    b) Regulatory clarity accelerating cloud adoption
    c) Only bans on cloud use
    d) None of the above
    Answer: b. (RBI guidelines gave clarity.)
30. Bank–FinTech partnerships are now characterized by:
    a) Only competition
    b) Collaboration where banks provide license & trust, FinTechs provide tech & agility
    c) Total separation
    d) Hostility only
    Answer: b. (Shift to collaboration is emphasized.)
31. Neo-banks in India operate by:
    a) Having full independent bank licences (the file says India does not yet issue full digital bank licences)
    b) Partnering with traditional banks to offer digital experiences
    c) Operating only physical branches
    d) Ignoring regulators
    Answer: b. (Neo-banks partner with traditional banks.)

Examples / Names (32–36)

32. Which of the following is listed as an example of a neo-bank?
    a) Fi Money
    b) Paytm Payments Bank (as a neo-bank)
    c) Visa
    d) Mastercard
    Answer: a.
33. Other neo-bank examples given include:
    a) Jupiter and Niyo
    b) SBI and HDFC
    c) Axis and ICICI
    d) Google Pay and PhonePe
    Answer: a. (Jupiter and Niyo listed.)
34. Which banks are named for successful blockchain pilot projects?
    a) HDFC and Kotak
    b) ICICI and Axis
    c) PNB and BoB
    d) RBI and SEBI
    Answer: b. (ICICI and Axis.)
35. Which AA providers are cited as examples?
    a) CAMS FinServ and Finvu
    b) Paytm and MobiKwik
    c) PhonePe and Google Pay
    d) Razorpay and Cashfree
    Answer: a. (CAMS FinServ, Finvu mentioned.)
36. Which technology is highlighted for trade finance and cross-border payments?
    a) Mainframe computing
    b) Blockchain / DLT
    c) Fax machines
    d) Paper ledgers
    Answer: b. (Blockchain/DLT highlighted.)

Inclusive Banking & UPI (37–40)

37. ‘UPI for All’ features mentioned:
    a) UPI 123Pay and *99# for feature phones
    b) Only smartphone apps
    c) Only bank-branch solutions
    d) ATM exclusive features
    Answer: a. (UPI 123Pay and *99# cited.)
38. *The 99# USSD service allows:
    a) Cardless ATM only
    b) UPI payments without a smartphone (feature phone users)
    c) Foreign exchange trading only
    d) Printing bank statements automatically
    Answer: b. (*99# enables feature phone UPI payments.)
39. Which of the following is a direct benefit of inclusive banking initiatives in the document?
    a) Exclusion of the poor
    b) Bridging gap for unbanked and underbanked populations
    c) More paperwork for customers
    d) Reducing digital payment options
    Answer: b. (Inclusive banking bridges the gap.) EmergingTrend
40. Regional language support in banking apps is used to:
    a) Confuse customers
    b) Cater to a wider audience and increase adoption
    c) Reduce functionality
    d) Increase costs only
    Answer: b. (Regional language support increases reach.)

Customer Experience / Biometrics (41–44)

41. ‘Omnichannel banking’ means:
    a) Only branch banking
    b) Seamless experience across app, branch, ATM, website
    c) Cash-only transactions
    d) Single-channel service
    Answer: b. (Omnichannel = seamless across channels.)
42. Which biometric methods are mentioned as being used/tested by banks?
    a) Fingerprint, facial recognition, iris scanners
    b) Blood type scanning only
    c) Palm reading only
    d) Voice only (no other biometrics)
    Answer: a. (Fingerprint, face, iris noted.)
43. Contextual and real-time engagement involves:
    a) Random marketing messages only
    b) Sending offers or alerts at the right moment using data (e.g., pre-approved loan when a balance threshold is reached)
    c) Only monthly statements
    d) Only branch posters
    Answer: b. (Data-driven real-time engagement illustrated.)
44. Biometric authentication in mobile banking enhances:
    a) Security and convenience
    b) Paper usage
    c) Queue length at branches
    d) None of the above
    Answer: a. (Enhances security + convenience.)

Regulation, Security & Green Banking (45–50)

45. Which security architecture is mentioned as a best practice in digital banking?
    a) Trust everything architecture
    b) Zero Trust Architecture (“never trust, always verify”)
    c) Open access architecture
    d) Paper-based verification only
    Answer: b. (Zero Trust described.)
46. The data protection law referenced is:
    a) GDPR (EU only)
    b) Digital Personal Data Protection Act (DPDPA), 2023
    c) HIPAA
    d) None mentioned
    Answer: b. (DPDPA 2023 is cited.)
47. Which green finance instruments?
    a) Green Bonds and Green Deposits
    b) Only coal bonds
    c) Only cash bonds
    d) None of the above
    Answer: a. (Green Bonds, Green Deposits cited.)
48. Paperless operations in banking include:
    a) More paper forms
    b) e-KYC, digital statements, reduced carbon footprint
    c) Printing daily newsletters for customers
    d) Increasing physical records only
    Answer: b. (e-KYC and digital statements mentioned.)
49. Which of the following is listed as a major challenge in adopting digital trends?
    a) Unlimited skilled workforce
    b) Data security & privacy concerns, cyber threats, digital literacy gap, legacy integration, regulatory compliance
    c) Too much simplicity
    d) No regulation at all
    Answer: b. (Challenges listed in the document.)
50. The future banking model described in the file is called:
    a) Only branch-centric
    b) Phygital (physical + digital)
    c) Paper-heavy banking
    d) Cash-only banking
    Answer: b. (Future described as ‘phygital’.)