100+ Free IIBF SFB Practice Questions

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2026 Statistics

Key Facts: IIBF SFB Exam

75%

Priority Sector Lending (PSL) Target of ANBC

RBI SFB Guidelines

₹200 Crore

Minimum Paid-up Equity Capital Requirement

RBI Licensing Rules

50%

Minimum loan portfolio containing loans up to ₹25 Lakh

RBI Portfolio Limits

15%

Minimum Capital to Risk-Weighted Assets Ratio (CRAR)

RBI Capital Adequacy

The IIBF SFB certification is a 2-hour online exam with 100 MCQs. Passing score is 50%. The exam fee is ₹1,100 for members and ₹1,600 for non-members. The syllabus covers licensing guidelines, banking operations, Priority Sector Lending (PSL) rules, and financial inclusion schemes.

Sample IIBF SFB Practice Questions

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

1What is the minimum paid-up equity capital requirement for starting a Small Finance Bank (SFB) in India under current RBI guidelines?

A.₹100 crore

B.₹300 crore

C.₹500 crore

D.₹200 crore

Explanation: Under the current RBI guidelines, the minimum paid-up equity capital for Small Finance Banks (SFBs) has been increased from the initial ₹100 crore to ₹200 crore. This ensures that the bank has sufficient capital buffer to manage its credit risk and operational requirements as a localized banking entity.

2What is the minimum initial promoter contribution required in the paid-up equity capital of a Small Finance Bank?

A.26% of the paid-up capital

B.51% of the paid-up capital

C.74% of the paid-up capital

D.40% of the paid-up capital

Explanation: According to RBI guidelines, the promoters of the Small Finance Bank must contribute a minimum of 40% of the paid-up equity capital of the bank initially. This requirement is set to ensure that promoters have a significant financial stake and long-term commitment to the bank's operations.

3For how many years is the minimum initial promoter contribution of 40% locked in from the date of commencement of business of the Small Finance Bank?

A.3 years

B.7 years

C.10 years

D.5 years

Explanation: The RBI guidelines mandate that the promoters' minimum initial contribution of 40% of the paid-up equity capital must be locked in for a period of 5 years from the date of commencement of the bank's business. This prevents promoter exit during the critical early years of the bank's setup.

4According to the RBI licensing guidelines, the promoter's equity stake in a Small Finance Bank must be brought down to what maximum percentage within 10 years of starting operations?

A.40%

B.26%

C.30%

D.15%

Explanation: The RBI guidelines require promoters to gradually dilute their stake in the bank over time. Specifically, the promoter's holding must be brought down to a maximum of 30% within 10 years, and further down to 15% within 15 years from the commencement of business.

5What is the maximum limit for foreign investment (FDI) in a Small Finance Bank under the current Indian foreign direct investment policy for private sector banks?

A.49%

B.74%

C.51%

D.100%

Explanation: Foreign investment in Small Finance Banks is governed by the Foreign Direct Investment (FDI) policy for private sector banks. Under this policy, the total foreign investment from all sources (including FDI, FPI, NRI) is capped at 74% of the paid-up capital, with up to 49% allowed under the automatic route.

6What is the minimum net worth requirement for a Primary (Urban) Co-operative Bank (UCB) that wishes to voluntarily transition into a Small Finance Bank?

A.₹50 crore, to be increased to ₹100 crore within 5 years

B.₹150 crore, to be increased to ₹300 crore within 5 years

C.₹100 crore, to be increased to ₹200 crore within 5 years

D.₹200 crore from the date of transition itself

Explanation: Urban Co-operative Banks (UCBs) are allowed to transition into SFBs. The entry-level net worth requirement for such transitioning UCBs is ₹100 crore, which must be increased to the regulatory minimum of ₹200 crore within a period of 5 years from the transition date.

7What is the minimum Capital Adequacy Ratio (CAR) that a Small Finance Bank is required to maintain on an ongoing basis?

A.9% of its risk-weighted assets

B.12% of its risk-weighted assets

C.15% of its risk-weighted assets

D.18% of its risk-weighted assets

Explanation: To ensure financial stability, the RBI requires Small Finance Banks to maintain a minimum Capital to Risk-Weighted Assets Ratio (CRAR) or CAR of 15% on an ongoing basis. This is higher than the 9% required for domestic commercial universal banks.

8Within the mandated 15% Capital Adequacy Ratio (CAR) for Small Finance Banks, what is the minimum requirement for Tier 1 capital?

A.6.0%

B.7.5%

C.9.0%

D.11.5%

Explanation: Out of the 15% minimum Capital Adequacy Ratio (CAR) prescribed for SFBs, the bank must maintain a minimum Tier 1 capital of 7.5% on an ongoing basis. Tier 1 capital represents core capital which provides the highest level of loss absorption.

9A Small Finance Bank must list its shares on a recognized stock exchange in India within how many years of reaching a net worth of ₹500 crore?

A.3 years

B.1 year

C.2 years

D.5 years

Explanation: Under the RBI guidelines for SFBs, once the net worth of a Small Finance Bank reaches ₹500 crore, listing its shares on a recognized stock exchange becomes mandatory. The bank must complete this listing process within 3 years from the date of reaching that net worth threshold.

10What percentage of the total number of banking outlets (branches) of a Small Finance Bank must be opened in unbanked rural centres (URCs)?

A.At least 15%

B.At least 40%

C.At least 50%

D.At least 25%

Explanation: To promote rural financial inclusion, the RBI mandates that at least 25% of the total number of banking outlets of a Small Finance Bank must be opened in unbanked rural centres (URCs) where population is less than 9,999. This requirement helps in extending banking services to remote villages and agriculture-heavy regions.

About the IIBF SFB Exam

The Certificate Examination for Small Finance Banks is developed by the Indian Institute of Banking & Finance (IIBF) to provide professional training to employees of Small Finance Banks (SFBs) and individuals looking to enter the microfinance and banking sector. The exam covers four modules: licensing requirements, operations and customer service, priority sector lending (PSL), and risk management. This practice bank provides exactly 100 high-quality practice questions designed to mimic the difficulty level and content coverage of the actual examination.

Questions

100 scored questions

Time Limit

2 hours (120 minutes)

Passing Score

50 out of 100 marks

Exam Fee

₹1,100 for Members, ₹1,600 for Non-members (plus taxes) (Indian Institute of Banking & Finance (IIBF))

IIBF SFB Exam Content Outline

25%

Regulatory & Licensing Framework for SFBs

Licensing requirements, minimum capital requirements (₹200 crore), promoter shareholding lock-in rules, foreign investment guidelines, and transition framework.

25%

Banking Operations & Customer Service

Deposit management, KYC/AML norms, digital banking platforms, customer grievance systems, and basic banking operational procedures.

30%

Credit & Priority Sector Lending (PSL)

Credit appraisal processes, Priority Sector Lending (PSL) targets (75% of ANBC), sub-sector targets, and small loan portfolios restrictions (50% of loans up to ₹25 lakh).

20%

Risk Management, Financial Inclusion & Support Schemes

Risk types, asset liability management, PMJDY, PMJJBY, PMSBY, APY, CGTMSE, MUDRA loans, and key financial inclusion initiatives.

How to Pass the IIBF SFB Exam

What You Need to Know

Passing score: 50 out of 100 marks
Exam length: 100 questions
Time limit: 2 hours (120 minutes)
Exam fee: ₹1,100 for Members, ₹1,600 for Non-members (plus taxes)

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 SFB Study Tips from Top Performers

1Thoroughly study the RBI Licensing Guidelines and Operating Guidelines for Small Finance Banks, specifically capital requirements, shareholding lock-in periods, and business restrictions.

2Pay special attention to Module C (Credit & PSL) which carries a 30% weightage. Focus on sub-sector targets for agriculture, micro-enterprises, and weaker sections.

3Memorize the key timelines and percentages, such as the minimum Capital Adequacy Ratio (CAR) of 15% and the requirement that the promoter's minimum initial contribution must be 40% locked in for 5 years.

4Understand the features of central government financial inclusion schemes like PMJDY, PMJJBY, PMSBY, APY, MUDRA, and credit guarantee schemes like CGTMSE.

5Take this practice mock exam under timed conditions (120 minutes) to check your speed and concept retention across all four modules.

Frequently Asked Questions

What is the purpose of the IIBF Small Finance Banks exam?

This examination aims to equip banking professionals and candidates with the necessary knowledge regarding the unique regulatory norms, operations, priority sector guidelines, and risk profiles of Small Finance Banks in India.

What are the passing criteria and negative marking rules?

To pass the examination, a candidate must score a minimum of 50 marks out of 100. There is no negative marking for incorrect answers.

What is the fee structure for this certification?

The examination fee for the first attempt and subsequent attempts is ₹1,100 for IIBF Members and ₹1,600 for Non-members (plus applicable taxes).

What are the key priority sector lending (PSL) rules for SFBs?

SFBs have a higher Priority Sector Lending (PSL) target of 75% of their Adjusted Net Bank Credit (ANBC), compared to 40% for Universal Banks. Additionally, at least 50% of their loan portfolio must consist of loans up to ₹25 lakh.

What are the eligibility requirements for taking this IIBF exam?

Candidates must have passed the 12th standard (HSC) or equivalent. The exam is open to both employees of banks/financial institutions (Members) and the general public (Non-members).

100+ Free IIBF SFB Practice Questions

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