100+ Free China Junior Banking Practice Questions

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Intermediate Banking Professional Qualification (中级银行从业, China)

Practice Questions100 questions

2026 Statistics

Key Facts: China Junior Banking Exam

60 / 100

Passing score per paper (60%)

China Banking Association (CBA)

120 mins

Time limit per examination paper

CBA Examination Regulations

RMB 500,000

Maximum statutory deposit insurance coverage per depositor per bank

PRC Deposit Insurance Regulations (《存款保险条例》)

2 years

Rolling validity window to pass compulsory + elective papers

CBA Qualification System

10%

Maximum loan exposure to a single borrower relative to bank capital

PRC Commercial Banking Law Article 39

June & Oct

Biannual national computer-based examination sittings

CBA Examination Schedule

The China Junior Banking Professional Qualification Examination is China's official entry-level banking credential administered biannually (June & October) by the China Banking Association (CBA) and MOHRSS. Candidates take 120-minute computer-based papers with a 60/100 passing threshold. The examination tests Chinese monetary policy mechanisms (RRR, MLF, LPR), banking operations (deposits, loans, settlement, RMB 500k deposit insurance), regulatory mandates under the Commercial Banking Law and Civil Code, anti-money laundering (AML/CTF), professional ethics, wealth management product classification under the New Asset Management Rules, corporate/personal lending workflows, loan amortization mathematics, and risk management (five-tier classification, LCR, and capital adequacy ratios). This bank delivers a 100-question verified English-language study adaptation.

Sample China Junior Banking Practice Questions

Try these sample questions to test your China Junior Banking exam readiness. Each question includes a detailed explanation. Start the interactive quiz above for the full 100+ question experience with AI tutoring.

1In the macroeconomic monetary statistics compiled by the People's Bank of China (PBOC), how is the narrowest money supply indicator, M0, specifically defined?

A.Currency in circulation outside the banking financial system (流通中现金)

B.M0 plus demand deposits of non-financial corporations and institutions

C.Total cash reserves held in commercial bank vaults

D.Total liquid assets held by the central bank and policy banks

Explanation: In China's money supply hierarchy, M0 represents currency in circulation (流通中现金), which is the total physical banknotes and coins held by the public outside the banking system. It possesses absolute liquidity and functions as the immediate medium of exchange for daily retail transactions.

2Which of the following components is included in China's narrow money supply measure (M1) but EXCLUDED from M0?

A.Household savings demand deposits (个人储蓄活期存款)

B.Corporate and institutional demand deposits (单位活期存款)

C.Corporate fixed time deposits (单位定期存款)

D.Non-bank financial institution deposits (非银行金融机构存款)

Explanation: Under PBOC statistical methodology, M1 equals M0 plus corporate and institutional demand deposits (单位活期存款). In China, household personal savings deposits (including personal demand deposits) are classified under quasi-money (准货币) within broad money (M2), rather than M1, because personal demand deposits historically faced certain transaction restrictions relative to corporate settlement accounts.

3When financial analysts in China observe that the year-on-year growth rate of M2 significantly outpaces that of M1 (a widening 'M2-M1 scissors gap' / M2-M1 剪刀差), what macroeconomic phenomenon does this primarily reflect?

A.Corporate operating activities are overheating and accelerating short-term capital expenditure

B.The central bank is aggressively hiking the statutory reserve requirement ratio (RRR)

C.Funds are staying in longer-term deposits and wealth management, indicating lower willingness of enterprises to invest in immediate operational activities

D.Households are withdrawing time deposits to purchase real estate and equities aggressively

Explanation: A widening M2-M1 scissors gap (where M2 growth exceeds M1 growth) indicates that funds are accumulating in quasi-money (household savings and corporate time deposits) rather than flowing into corporate demand deposits for active production, procurement, or investment. This reflects enterprise caution and capital staying idle in financial deposits.

4When the People's Bank of China (PBOC) decides to lower the Statutory Deposit Reserve Requirement Ratio (RRR / 降准), what is the direct transmission effect on commercial banks and the real economy?

A.Commercial banks must deposit more funds into non-interest-bearing central bank accounts

B.The benchmark one-year deposit interest rate ceiling is automatically lowered by an equal percentage

C.Commercial banks are forced to curtail interbank lending and reduce new loan disbursements

D.Commercial banks free up locked statutory reserves into usable excess reserves, expanding their credit supply capacity to the real economy

Explanation: A reduction in the statutory reserve requirement ratio (RRR) releases long-term liquidity that was previously frozen at the central bank. This increases commercial banks' excess reserves and money multiplier capacity, lowering their funding costs and encouraging them to expand lending to the real economy.

5In the People's Bank of China's Open Market Operations (OMO / 公开市场操作), when the central bank conducts a 7-day 'Reverse Repurchase Agreement' (逆回购 / Reverse Repo), what is the immediate transaction flow and market effect?

A.The central bank purchases securities from primary dealers and injects short-term funds into the interbank market

B.The central bank sells securities to primary dealers to absorb and drain excess liquidity from the banking system

C.The central bank issues central bank bills (央行票据) with maturities exceeding one year

D.The central bank raises the statutory reserve requirement ratio for joint-stock banks

Explanation: In Chinese central bank terminology, a Reverse Repo (逆回购) occurs when the PBOC purchases securities (such as treasury bonds) from primary dealers with an agreement to sell them back in the future. By buying securities today, the central bank injects base money/liquidity into the interbank money market.

6Which PBOC monetary policy facility was created in 2014 to provide medium-term base money (typically 1 year) to qualified commercial and policy banks against high-quality collateral, and currently serves as the pricing anchor for the Loan Prime Rate (LPR)?

A.Standing Lending Facility (SLF / 常备借贷便利)

B.Medium-term Lending Facility (MLF / 中期借贷便利)

C.Pledged Supplementary Lending (PSL / 抵押补充贷款)

D.Temporary Liquidity Facility (TLF / 临时流动性便利)

Explanation: The Medium-term Lending Facility (MLF / 中期借贷便利), introduced by the PBOC in September 2014, provides 3-month to 1-year loans against high-grade collateral (such as treasury bonds and policy financial bonds). Following interest rate reforms, the 1-year MLF interest rate serves as the primary policy pricing anchor for the monthly Loan Prime Rate (LPR) quotes.

7What is the primary operational feature and policy role of the Standing Lending Facility (SLF / 常备借贷便利, colloquially called 'Suanlafen' 酸辣粉)?

A.It is an open bidding auction held by the central bank every Tuesday and Thursday

B.It provides unsecured credit loans exclusively to non-bank financial micro-lenders

C.It is initiated by financial institutions on a one-on-one basis to satisfy short-term liquidity needs, acting as the upper bound of the central bank's interest rate corridor

D.It is a quantitative easing facility used solely to purchase equity ETFs on the Shanghai Stock Exchange

Explanation: The Standing Lending Facility (SLF) is a standing window initiated on-demand by commercial banks and financial institutions facing temporary short-term liquidity shortages. By providing emergency funds against collateral at a predetermined rate, the SLF rate effectively caps money market rate spikes, functioning as the upper ceiling of China's interest rate corridor.

8Under the reformed Loan Prime Rate (LPR / 贷款市场报价利率) formation mechanism implemented in August 2019, how is the monthly LPR quotation calculated and published?

A.The PBOC Governor sets the LPR unilaterally based on the quarterly Gross Domestic Product growth rate

B.It is the weighted average yield of 10-year Chinese government bonds traded on the Shanghai Stock Exchange

C.It is computed as the simple average of commercial bank 1-year retail time deposit interest rates

D.Eighteen designated quotation banks submit their prime lending rates as a spread over the 1-year MLF rate, and the National Interbank Funding Center calculates the arithmetic average after trimming the highest and lowest bids

Explanation: Under the reformed LPR mechanism, a panel of 18 representative quotation banks (including state-owned, joint-stock, city, rural, and foreign banks) submit their quotes on the 20th of each month (or next business day) formatted as: 1-year MLF interest rate + bank credit risk/funding cost spread. The National Interbank Funding Center removes the highest and lowest quotes and calculates the arithmetic mean.

9In China's money market, what is the key conceptual difference between the Shanghai Interbank Offered Rate (Shibor) and the Depository-Institutions Pledged Repo Rate (DR007)?

A.Shibor is an uncollateralized interbank quote, whereas DR007 reflects actual traded repo transactions exclusively between deposit-taking banking institutions backed by sovereign debt collateral

B.Shibor is traded only on the stock exchange, whereas DR007 is traded over the counter at retail bank counters

C.Shibor includes only 10-year maturities, whereas DR007 is exclusively an overnight rate

D.DR007 includes non-bank institutions such as trust companies and securities firms, whereas Shibor excludes them

Explanation: Shibor is a quote-based, unsecured interbank offered rate spanning 8 standard maturities (O/N to 1Y). In contrast, DR007 (Depository-Institutions Repo Rate for 7 days) tracks actual executed collateralized repo transactions exclusively among depository banking institutions, eliminating credit risk through sovereign bond pledging. The PBOC considers DR007 the primary indicator of banking liquidity.

10What is the official characterization of the People's Republic of China's foreign exchange rate regime?

A.A rigid pegged exchange rate regime strictly fixed to the United States Dollar with no daily fluctuation band

B.A managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies (以市场供求为基础、参考一篮子货币进行调节、有管理的浮动汇率制度)

C.A purely freely floating currency regime with zero central bank oversight or macroprudential counter-cyclical adjustment

D.A currency board system backed 100% by foreign gold reserves

Explanation: Since the July 2005 currency reform and subsequent refinements, China officially operates a managed floating exchange rate regime based on market supply and demand with reference to a basket of currencies (the CFETS RMB Index, BIS basket, and SDR basket), maintaining the Renminbi's exchange rate basically stable at an adaptive and equilibrium level.

About the China Junior Banking Exam

The China Junior Banking Professional Qualification Examination (银行业专业人员初级职业资格考试) is the standard national entry credential for banking sector professionals across the People's Republic of China, jointly administered by the China Banking Association (CBA) and the Ministry of Human Resources and Social Security (MOHRSS) under the supervisory oversight of the National Financial Regulatory Administration (NFRA) and the People's Bank of China (PBOC). The qualification requires passing the compulsory paper 'Banking Laws, Regulations and Comprehensive Ability' (银行业法律法规与综合能力) along with at least one specialized elective paper (such as Personal Wealth Management, Risk Management, Corporate Credit, or Personal Loans). This study repository presents an English-language multiple-choice adaptation covering Chinese financial markets, central bank monetary policy tools, commercial banking operations, deposit insurance, payment clearing systems, PRC Commercial Banking Law and Civil Code guarantee provisions, AML/CTF statutory compliance, credit analysis, mortgage calculations, five-tier loan classification, and Basel III capital management standards.

Assessment

Question count varies by module

Time Limit

120 minutes per paper

Passing Score

60 / 100 (60%)

Exam Fee

RMB 61 per paper under the current CBA registration standard (China Banking Association (中国银行业协会 / CBA) & MOHRSS)

China Junior Banking Exam Content Outline

20%

Economic & Financial Foundations

Currency and money supply definitions (M0, M1, M2), central bank monetary policy tools (RRR, open market repo/reverse repo, MLF, SLF, LPR), interest rate marketization, foreign exchange regime, and China's multi-tiered financial system.

25%

Banking Operations & Payment Systems

Personal and corporate deposit products, Deposit Insurance Regulation (RMB 500,000 limit), working capital and fixed asset loan rules, syndicated lending, negotiable settlement instruments (bills, promissory notes, checks), and electronic clearing architectures (HVPS, BEPS, IBPS, CIPS).

20%

Banking Regulation, Commercial Banking Law & Civil Code

NFRA and PBOC supervisory remits, Commercial Banking Law core prudential ratios (10% single-borrower limit, connected lending prohibitions), Civil Code guarantee provisions (general vs. joint-and-several guaranty presumption, real estate mortgage registration, rights pledge, lien), and AML/CTF reporting thresholds.

15%

Professional Ethics, Compliance & Risk Management

CBA Banking Code of Conduct (integrity, client confidentiality, conflict of interest recusal, anti-bribery), Three Lines of Defense compliance framework, five-tier loan classification (Normal, Special Mention, Substandard, Doubtful, Loss), credit, market, operational, and liquidity risk metrics.

20%

Professional Practice: Wealth Management, Corporate Credit & Personal Loans

New Asset Management Rules (fixed-income, equity, hybrid, commodity/derivatives), NAV-based pricing, qualified investor thresholds, corporate credit 5Cs and entrusted payment triggers, residential mortgage types, and repayment formulas (equal principal & interest vs. equal principal).

How to Pass the China Junior Banking Exam

What You Need to Know

Passing score: 60 / 100 (60%)
Assessment: Question count varies by module
Time limit: 120 minutes per paper
Exam fee: RMB 61 per paper under the current CBA registration standard

Keys to Passing

Work through all 100 available questions
Review every answer and explanation
Track weak areas and revisit them
Use our AI tutor for tough concepts

China Junior Banking Study Tips from Top Performers

1Memorize the key statutory ratios: 10% maximum loan exposure to a single borrower, 15% group customer concentration, and RMB 500,000 deposit insurance coverage limit.

2Master the Civil Code guarantee shift: ambiguous guaranty agreements are now legally presumed to be General Guaranty (一般保证) rather than Joint and Several Guaranty.

3Understand the mechanics of PBOC monetary policy tools: RRR, OMO reverse repo, MLF, and the LPR monthly quotation system.

4Drill the five-tier loan classification: Normal and Special Mention are performing loans; Substandard, Doubtful, and Loss represent Non-Performing Loans (NPL).

5Know the New Asset Management Rules: 80% asset threshold for fixed-income/equity/commodity products, net-asset-value (NAV) mark-to-market pricing, and qualified investor income/asset standards.

6Compare loan repayment formulas: Equal Principal & Interest (fixed monthly cash flow) vs. Equal Principal (declining monthly cash flow, lower total interest).

Frequently Asked Questions

What are the requirements to obtain the Junior Banking Professional Qualification Certificate in China?

Candidates must pass the compulsory subject 'Banking Laws, Regulations and Comprehensive Ability' (银行业法律法规与综合能力) plus at least one elective professional practice subject (Personal Wealth Management, Risk Management, Corporate Credit, Personal Loans, or Bank Management) within two consecutive examination years.

What is the format and duration of each exam paper?

Each subject paper is administered as a 120-minute closed-book computer-based test (CBT). The official paper consists of single-choice questions, multiple-choice questions, and true/false judgment questions for a total of 100 points with a 60-point passing score.

How does China's Civil Code impact banking guarantee and mortgage practices?

Under the PRC Civil Code (effective 2021), if the type of guaranty is not specified or agreed unclearly, it is legally presumed to be General Guaranty (一般保证), conferring the benefit of discussion. Real estate mortgages become effective upon registry filing, and 'lex commissoria' (automatic forfeiture of collateral ownership upon default) is strictly prohibited.

What are the regulatory thresholds for AML large-value transaction reporting in China?

Under PBOC AML regulations, financial institutions must report: (1) single or cumulative daily cash transactions of RMB 50,000 or USD 10,000+; (2) corporate bank account transfers of RMB 2,000,000+; and (3) individual cross-border transfers of RMB 200,000+ or USD 10,000+.

What is the difference between Equal Principal and Interest versus Equal Principal repayment?

Equal Principal and Interest (等额本息) keeps the monthly payment constant, with interest decreasing and principal increasing each month. Equal Principal (等额本金) fixes the monthly principal repayment, so monthly interest and total monthly payments decrease over time, resulting in less total interest paid overall.