Question 1

In a CBS environment, Inter-Branch transactions are reconciled:

Through the Inter-Branch Reconciliation (IBR) department.Manually at the end of the month.They do not need reconciliation.Real-time and automatically by the system.

View Explanation

Unlike legacy systems where IBR was a huge manual task, CBS uses a central database. A debit in Branch A and credit in Branch B happens simultaneously in the central server, ensuring automatic real-time reconciliation.

Question 2

In CBS, the "Day End" process ensures that:

The date of the system changes to the next working day after balancing books.All ATMs are closed.No more customers can enter the branch.Staff salaries are paid.

View Explanation

The End of Day (EOD) process validates transactions, checks GL balance, calculates interest if due, and logically moves the system date forward.

Question 3

If a bank wants to introduce a new deposit product with a specific interest rate structure in CBS, it is done through:

Writing new code in C++.Buying new hardware.Parameterization / Master setup.Manually calculating interest for each customer.

View Explanation

CBS is driven by parameters. New products are created by defining parameters (rules) in the system master, without changing the core software code.

Question 4

In CBS, the module that handles the definition of Products, Interest Rates, and Service Charges is typically called:

Reporting Module.Product Setup / Master Maintenance Module.Transaction Processing Module.General Ledger Module.

View Explanation

This module allows the bank to parameterize new schemes. Interest rates or charges defined here are automatically applied to all accounts linked to that product code.

Question 5

In CBS, ensuring that the sum of debits equals the sum of credits for every transaction batch is a control known as:

Authorization check.Input Validation.Run-to-run totals.Check Digit verification.

View Explanation

Run-to-run totals involve checking that control totals (like total batch value) match from one processing stage to another, ensuring data completeness and accuracy.

Question 6

Which of the following is an advantage of Centralized Processing in CBS?

Slower transaction speed.Increased manual work at branches.Uniform application of interest rates and charges across all branches.Dependence on branch servers.

View Explanation

Since rules are defined centrally in the Data Center, any change (like a rate cut) is applied instantly and uniformly to all accounts across all branches, eliminating local errors.

Question 7

The "Disaster Recovery Site" (DR Site) in a CBS architecture is used when:

ATM network is down.The Primary Data Center (PDC) fails due to a calamity.Staff are on strike.The branch server is slow.

View Explanation

The DR Site is a replica of the Primary Data Center located in a different seismic zone. It takes over operations if the PDC goes down to ensure business continuity.

Question 8

In a 3-tier CBS architecture, the "Application Server" handles:

Business Logic and Processing.Data Storage (Database).User Interface (Presentation).Printing.

View Explanation

Tier 1 is Presentation (Client), Tier 2 is Application (Logic/Calculation), and Tier 3 is Database (Storage). The Application Server executes the core banking rules.

Question 9

In CBS, what is the concept of "Maker-Checker"?

One person initiates a transaction, and another authorizes it.The system checks the user's password automatically.One person creates the software, another tests it.The customer makes a request, and the bank checks it.

View Explanation

This is a fundamental internal control mechanism to prevent fraud and error. No single employee should be able to complete a critical financial transaction from start to end.

Question 10

Sharing User IDs and Passwords in a CBS environment leads to violation of:

Non-RepudiationData WarehousingData RedundancyData Mining

View Explanation

Non-repudiation ensures that a user cannot deny having performed an action. If IDs are shared, accountability is lost, and the specific user cannot be pinpointed.

Question 11

Which component of Information Security Policy ensures that data is accessible only to those authorized to access it?

Non-repudiationConfidentialityAvailabilityIntegrity

View Explanation

The CIA triad of security stands for Confidentiality, Integrity, and Availability. Confidentiality specifically deals with restricting access to authorized personnel only.

Question 12

Which of the following is an application of "Data Mining" in banks?

Connecting ATMs.Calculating Interest.Printing Passbooks.Identifying customer segments likely to default on loans based on past behavior patterns.

View Explanation

Data mining involves analyzing large datasets to discover patterns and relationships. Banks use it for credit scoring, fraud detection, and targeted marketing (CRM).

Question 13

What is "RPO" (Recovery Point Objective) in the context of CBS Disaster Recovery?

The maximum acceptable amount of data loss measured in time.The cost of recovery.The location of the DR site.The time taken to recover the system.

View Explanation

RPO defines how much data you can afford to lose. If RPO is 15 mins, backups must be frequent enough so that in a crash, you lose no more than 15 mins of data. (RTO is Recovery Time Objective - how fast you are back up).

Question 14

One of the main benefits of Centralized Banking Solution (CBS) is "Anywhere Banking". This means:

Banks have no branches.Customers can only bank at their home branch.Customers can operate their accounts from any branch of the bank.Customers can withdraw cash only from ATMs.

View Explanation

Since data is central, the customer belongs to the bank, not just the branch. They can access services from any location.

Question 15

Modern CBS architecture is based on SOA. SOA stands for:

System Oriented ArchitectureSecure Open ApplicationStandard Operating ArchitectureService Oriented Architecture

View Explanation

SOA allows different applications (like Loans, Deposits, Payments) to communicate with each other as distinct services, making the system modular and flexible.

JAIIB Quiz

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