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100+ Free IIBF Operational Risk Management Practice Questions

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2026 Statistics

Key Facts: IIBF Operational Risk Management Exam

100 MCQs

Total questions in the official exam

IIBF Guidelines

50 / 100

Minimum passing score

IIBF Rules & Syllabus

2 Hours

Examination duration

IIBF Rules & Syllabus

₹1,100 / ₹1,600

IIBF Member / Non-member registration fee (+ GST)

IIBF Rules & Syllabus

IIBF Operational Risk Management Certificate (2026): 100 MCQs, 2 hours, no negative marking, pass mark 50/100. Fee: ₹1,100 (members) / ₹1,600 (non-members) + GST. Eligibility: 12th pass. Focuses on Basel regulations, risk culture, RCSA, KRIs, and SMA.

Sample IIBF Operational Risk Management Practice Questions

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

1Who has the ultimate responsibility for approval and periodic review of the Operational Risk Management Framework (ORMF) in a bank?
A.The Chief Risk Officer (CRO)
B.The Board of Directors
C.The Internal Audit Department
D.The Operational Risk Committee
Explanation: The Board of Directors has the ultimate responsibility for approving and periodically reviewing the bank's Operational Risk Management Framework (ORMF) to ensure it is robust and aligned with the bank's risk appetite.
2In the 'Three Lines of Defense' model for operational risk management, which unit constitutes the first line of defense?
A.The Compliance Department
B.The Operational Risk Management Function (ORMF)
C.Business Units and Front-line Operations
D.The Internal Audit Department
Explanation: Business units and front-line operations are the first line of defense because they directly own, identify, and manage risks in their day-to-day operational activities.
3Under the Basel framework, operational risk is defined as the risk of loss resulting from inadequate or failed internal processes, people, and systems, or from external events. Which of the following is explicitly excluded from this definition?
A.Legal risk
B.Strategic risk
C.System failures
D.Internal fraud
Explanation: Strategic risk (along with reputational risk) is explicitly excluded from the Basel definition of operational risk, although legal risk is included.
4What is the primary role of the Operational Risk Management Function (ORMF) in a bank as the second line of defense?
A.To execute day-to-day operations and directly manage risks
B.To provide independent challenge, design policies, and oversee risk management
C.To perform independent review and validation of all controls
D.To approve the capital adequacy returns sent to the regulator
Explanation: The second line of defense (ORMF) designs the policies, provides independent challenge to business lines, and oversees risk management practices.
5Which of the following describes the third line of defense in operational risk governance?
A.The Board of Directors
B.Compliance Function
C.Internal Audit Function
D.Risk Management Department
Explanation: The Internal Audit Function provides independent, objective assurance to the Board and senior management regarding the effectiveness of the first and second lines of defense.
6A bank's Risk Appetite Statement (RAS) for operational risk should ideally be:
A.Expressed only in qualitative terms without any quantitative limits
B.Expressed in both qualitative statements and quantitative boundaries/limits
C.Set to zero tolerance across all business lines
D.Approved solely by the Chief Risk Officer without Board intervention
Explanation: An effective Risk Appetite Statement (RAS) combines qualitative values with quantitative limits, indicators, and tolerance levels to monitor risk effectively.
7Which governance committee is typically responsible for monitoring operational risk profiles and ensuring implementation of ORMF at the senior management level?
A.Audit Committee of the Board (ACB)
B.Operational Risk Management Committee (ORMC)
C.Asset Liability Committee (ALCO)
D.Customer Service Committee
Explanation: The Operational Risk Management Committee (ORMC) is a management-level committee tasked with implementing policies and monitoring the bank's operational risk profile.
8What does the term 'Risk Culture' in banking refer to?
A.The artistic and social activities organized by the bank's staff
B.The shared values, attitudes, and behaviors of staff regarding risk awareness and management
C.The corporate social responsibility (CSR) initiatives of the bank
D.The compliance checklists mandated by the central bank
Explanation: Risk culture represents the norms and behaviors that shape how risks are identified, discussed, and managed throughout the bank's organizational hierarchy.
9Which of the following is a key responsibility of the Chief Risk Officer (CRO) regarding operational risk management?
A.Directly operating the payment systems of the bank
B.Providing independent oversight and reporting operational risk profile to the Board/Committees
C.Undertaking the annual internal audit of the risk department
D.Sanctioning commercial credit proposals above a certain limit
Explanation: The CRO leads the independent risk management function and is responsible for reporting risk exposures and framework compliance to the Board and risk committees.
10Why is corporate governance critical to the Operational Risk Management Framework (ORMF)?
A.It helps to minimize the tax liability of the bank
B.It ensures that the Board and Senior Management establish clear accountability and risk oversight
C.It guarantees that the bank will never face any operational loss events
D.It is only required for marketing the bank's services to international investors
Explanation: Corporate governance establishes the structures, roles, and reporting lines that hold management accountable for executing risk policies and monitoring risk limits.

About the IIBF Operational Risk Management Exam

The IIBF Certificate in Operational Risk Management covers operational risk framework, governance, risk identification, assessment tools, internal and external loss database maintenance, Key Risk Indicators (KRIs), root cause analysis, and Basel norms. Crucially, it covers the computation of capital charge under the Standardized Measurement Approach (SMA) in line with current RBI guidelines.

Assessment

Single online objective-type examination containing 100 MCQs. There is no negative marking for incorrect answers.

Time Limit

2 hours

Passing Score

50 out of 100

Exam Fee

Members: ₹1,100 | Non-members: ₹1,600 (+ GST) (Indian Institute of Banking & Finance (IIBF))

IIBF Operational Risk Management Exam Content Outline

20%

Operational Risk Framework

Understanding operational risk, risk culture, governance, three lines of defense, and organizational responsibilities.

20%

Policy & Strategy

Risk management policy, strategic risk limits, Basel Committee norms, and RBI regulatory directives.

20%

Identification & Assessment

RCSA, Scenario Analysis, process mapping, control effectiveness, and mitigation planning.

20%

Loss Data & KRIs

Internal and external loss events, reporting thresholds, Key Risk Indicators design, and root-cause analysis.

20%

Capital Allocation

Transitioning from Basic Indicator (BIA) and Standardized Approach (TSA) to the Standardized Measurement Approach (SMA), computing Business Indicator and capital charge.

How to Pass the IIBF Operational Risk Management Exam

What You Need to Know

  • Passing score: 50 out of 100
  • Assessment: Single online objective-type examination containing 100 MCQs. There is no negative marking for incorrect answers.
  • Time limit: 2 hours
  • Exam fee: Members: ₹1,100 | Non-members: ₹1,600 (+ GST)

Keys to Passing

  • Complete 500+ practice questions
  • Score 80%+ consistently before scheduling
  • Focus on highest-weighted sections
  • Use our AI tutor for tough concepts

IIBF Operational Risk Management Study Tips from Top Performers

1Familiarize yourself with the Three Lines of Defense model: Business units (1st line), Risk Management/Compliance (2nd line), and Internal Audit (3rd line).
2Study RBI's implementation guidelines for Basel III operational risk standards, focusing on the transition to SMA.
3Understand how the Business Indicator (BI) is calculated, including its components (ILDC, SC, FC) and how the Business Indicator Component (BIC) is derived.
4Differentiate between Risk Control Self-Assessment (RCSA) and Key Risk Indicators (KRIs), noting that RCSA is subjective/qualitative and KRIs are objective/quantitative.

Frequently Asked Questions

What is the fee for the IIBF Operational Risk Management exam?

The registration fee is ₹1,100 for IIBF members and ₹1,600 for non-members. Applicable GST is charged extra.

What is the passing score for IIBF Operational Risk Management?

Candidates must secure a minimum of 50 marks out of 100 to pass and receive the certificate.

Is there negative marking in the exam?

No. The exam does not have negative marking for incorrect answers.

What is the syllabus of IIBF Operational Risk Management?

The syllabus is divided into 5 main areas: Operational Risk Framework, Policy & Strategy, Identification & Assessment, Loss Data & KRIs, and Capital Allocation (including the Standardized Measurement Approach).