SBI PO 2026-STATE BANK OF INDIA PROBATIONARY
OFFICER EXAM-QUESTIONS AND ANSWERS | ALL
PRACTICE Q&A 2026/2027 | A+ GRADED
|COMPREHENSIVE EXAM GUIDE 2026&2027
1. A branch manager notices that a customer's account has suddenly received several high-
value credits that are inconsistent with the customer's stated occupation and previous
transaction pattern. What should be the bank's immediate priority?
A. Close the account immediately
B. Ignore the transactions unless the customer complains
C. Conduct appropriate transaction monitoring and due diligence
D. Inform other customers about the transactions
Answer: C
The unusual activity should trigger appropriate monitoring and enhanced due diligence under
the bank's AML framework. Immediate account closure is not automatically required.
2. In a banking environment, which activity most directly represents the primary function
of accepting deposits?
A. Mobilizing funds from customers for banking operations
B. Selling insurance policies exclusively
C. Issuing equity shares to customers
D. Providing investment advice without holding deposits
Answer: A
Deposit mobilization is a core banking function through which banks collect funds from
customers and provide appropriate deposit products.
3. A customer wants to transfer funds electronically to another bank in India and the
transaction is time-sensitive. Which payment system is specifically designed for real-time
gross settlement of qualifying transactions?
A. NEFT
B. RTGS
C. ECS
D. NACH
Answer: B
,RTGS settles qualifying transactions individually in real time, making it appropriate for time-
sensitive high-value transfers.
4. A bank officer discovers that a customer has submitted an altered income document
while applying for a loan. What is the most appropriate professional response?
A. Approve the loan because the customer has maintained the account for years
B. Destroy the document to protect the customer
C. Ask another customer to provide a replacement document
D. Escalate the suspected document fraud through the bank's prescribed process
Answer: D
Suspected document fraud should be documented and escalated through established internal
controls rather than overlooked or concealed.
5. Which financial statement primarily presents a bank's assets, liabilities, and equity at a
particular point in time?
A. Balance sheet
B. Cash-flow statement
C. Profit-and-loss forecast
D. Sales report
Answer: A
A balance sheet provides a snapshot of assets, liabilities, and equity at a specific reporting
date.
6. If the Reserve Bank of India increases the repo rate, what is one likely immediate
transmission effect on banks?
A. Borrowing costs may increase
B. All deposit rates must immediately become zero
C. Bank reserves automatically become unlimited
D. Loan demand must increase in every sector
Answer: A
An increase in the repo rate can raise banks' marginal funding costs and may transmit into
lending and deposit rates depending on market conditions.
7. A customer complains that a bank employee discussed the customer's account balance
loudly in a public area. Which principle is most directly involved?
,A. Liquidity management
B. Credit appraisal
C. Customer confidentiality
D. Capital adequacy
Answer: C
Customer financial information should be handled confidentially and disclosed only in
accordance with applicable law and authorized banking procedures.
8. Which ratio is commonly used to assess a bank's ability to meet short-term obligations
using liquid assets?
A. Debt-equity ratio
B. Liquidity ratio
C. Gross profit ratio
D. Inventory turnover ratio
Answer: B
Liquidity ratios assess the institution's capacity to meet short-term obligations without
unacceptable financial stress.
9. A borrower has repeatedly missed scheduled loan payments despite receiving reminders.
Which risk is most directly increasing for the bank?
A. Market risk
B. Operational risk
C. Reputational risk
D. Credit risk
Answer: D
Repeated payment defaults increase the probability of credit loss and therefore directly
increase credit risk.
10. A bank employee is offered an expensive gift by a prospective borrower shortly before a
loan decision. What should the employee do?
A. Accept it privately
B. Accept it if the loan is later rejected
C. Follow the bank's conflict-of-interest and gift policy
D. Exchange it for cash
Answer: C
, Employees should follow institutional policies governing gifts and conflicts of interest to
protect impartial decision-making and integrity.
11. Which institution is India's central bank?
A. State Bank of India
B. Reserve Bank of India
C. Securities and Exchange Board of India
D. National Payments Corporation of India
Answer: B
The Reserve Bank of India is India's central bank and performs monetary, regulatory, and
supervisory functions.
12. A customer receives an OTP for a transaction that the customer did not initiate. What
is the safest immediate action?
A. Share the OTP with the caller claiming to be from the bank
B. Ignore the message and continue using the account
C. Forward the OTP to a friend
D. Avoid sharing the OTP and immediately report the unauthorized activity through official bank
channels
Answer: D
An unexpected OTP may indicate an attempted unauthorized transaction. The customer
should never disclose the OTP and should contact the bank through official channels.
13. What is the primary purpose of KYC procedures in banking?
A. To identify and verify customers
B. To guarantee investment returns
C. To eliminate all credit risk
D. To determine stock-market prices
Answer: A
Know Your Customer procedures help banks establish and verify customer identity and
support prevention of financial crime.
14. A bank wants to reduce the likelihood that a single borrower default will cause a
significant loss. Which lending practice is most appropriate?
A. Concentrating all lending in one borrower
B. Eliminating credit assessment
OFFICER EXAM-QUESTIONS AND ANSWERS | ALL
PRACTICE Q&A 2026/2027 | A+ GRADED
|COMPREHENSIVE EXAM GUIDE 2026&2027
1. A branch manager notices that a customer's account has suddenly received several high-
value credits that are inconsistent with the customer's stated occupation and previous
transaction pattern. What should be the bank's immediate priority?
A. Close the account immediately
B. Ignore the transactions unless the customer complains
C. Conduct appropriate transaction monitoring and due diligence
D. Inform other customers about the transactions
Answer: C
The unusual activity should trigger appropriate monitoring and enhanced due diligence under
the bank's AML framework. Immediate account closure is not automatically required.
2. In a banking environment, which activity most directly represents the primary function
of accepting deposits?
A. Mobilizing funds from customers for banking operations
B. Selling insurance policies exclusively
C. Issuing equity shares to customers
D. Providing investment advice without holding deposits
Answer: A
Deposit mobilization is a core banking function through which banks collect funds from
customers and provide appropriate deposit products.
3. A customer wants to transfer funds electronically to another bank in India and the
transaction is time-sensitive. Which payment system is specifically designed for real-time
gross settlement of qualifying transactions?
A. NEFT
B. RTGS
C. ECS
D. NACH
Answer: B
,RTGS settles qualifying transactions individually in real time, making it appropriate for time-
sensitive high-value transfers.
4. A bank officer discovers that a customer has submitted an altered income document
while applying for a loan. What is the most appropriate professional response?
A. Approve the loan because the customer has maintained the account for years
B. Destroy the document to protect the customer
C. Ask another customer to provide a replacement document
D. Escalate the suspected document fraud through the bank's prescribed process
Answer: D
Suspected document fraud should be documented and escalated through established internal
controls rather than overlooked or concealed.
5. Which financial statement primarily presents a bank's assets, liabilities, and equity at a
particular point in time?
A. Balance sheet
B. Cash-flow statement
C. Profit-and-loss forecast
D. Sales report
Answer: A
A balance sheet provides a snapshot of assets, liabilities, and equity at a specific reporting
date.
6. If the Reserve Bank of India increases the repo rate, what is one likely immediate
transmission effect on banks?
A. Borrowing costs may increase
B. All deposit rates must immediately become zero
C. Bank reserves automatically become unlimited
D. Loan demand must increase in every sector
Answer: A
An increase in the repo rate can raise banks' marginal funding costs and may transmit into
lending and deposit rates depending on market conditions.
7. A customer complains that a bank employee discussed the customer's account balance
loudly in a public area. Which principle is most directly involved?
,A. Liquidity management
B. Credit appraisal
C. Customer confidentiality
D. Capital adequacy
Answer: C
Customer financial information should be handled confidentially and disclosed only in
accordance with applicable law and authorized banking procedures.
8. Which ratio is commonly used to assess a bank's ability to meet short-term obligations
using liquid assets?
A. Debt-equity ratio
B. Liquidity ratio
C. Gross profit ratio
D. Inventory turnover ratio
Answer: B
Liquidity ratios assess the institution's capacity to meet short-term obligations without
unacceptable financial stress.
9. A borrower has repeatedly missed scheduled loan payments despite receiving reminders.
Which risk is most directly increasing for the bank?
A. Market risk
B. Operational risk
C. Reputational risk
D. Credit risk
Answer: D
Repeated payment defaults increase the probability of credit loss and therefore directly
increase credit risk.
10. A bank employee is offered an expensive gift by a prospective borrower shortly before a
loan decision. What should the employee do?
A. Accept it privately
B. Accept it if the loan is later rejected
C. Follow the bank's conflict-of-interest and gift policy
D. Exchange it for cash
Answer: C
, Employees should follow institutional policies governing gifts and conflicts of interest to
protect impartial decision-making and integrity.
11. Which institution is India's central bank?
A. State Bank of India
B. Reserve Bank of India
C. Securities and Exchange Board of India
D. National Payments Corporation of India
Answer: B
The Reserve Bank of India is India's central bank and performs monetary, regulatory, and
supervisory functions.
12. A customer receives an OTP for a transaction that the customer did not initiate. What
is the safest immediate action?
A. Share the OTP with the caller claiming to be from the bank
B. Ignore the message and continue using the account
C. Forward the OTP to a friend
D. Avoid sharing the OTP and immediately report the unauthorized activity through official bank
channels
Answer: D
An unexpected OTP may indicate an attempted unauthorized transaction. The customer
should never disclose the OTP and should contact the bank through official channels.
13. What is the primary purpose of KYC procedures in banking?
A. To identify and verify customers
B. To guarantee investment returns
C. To eliminate all credit risk
D. To determine stock-market prices
Answer: A
Know Your Customer procedures help banks establish and verify customer identity and
support prevention of financial crime.
14. A bank wants to reduce the likelihood that a single borrower default will cause a
significant loss. Which lending practice is most appropriate?
A. Concentrating all lending in one borrower
B. Eliminating credit assessment
