JAIIB PPB Paper Guide 2026 — Syllabus, Case Studies & Strategy
PPB = Principles & Practices of Banking · 100 MCQs, 120 minutes, no negative marking · Pass mark: 45/100 · Difficulty: High — highest failure rate of 4 papers · Recommended study: 3–4 weeks · May 2026 exam: 9 May 2026
PPB (Principles & Practices of Banking) is Paper II of JAIIB and consistently has the highest failure rate of the four papers. It is the most comprehensive paper — covering banking law, lending, KYC/AML, NPA norms, negotiable instruments, SARFAESI, digital banking, and ethics. The syllabus is wide, but the bigger challenge is the case-study MCQs — 20 to 30 scenario-based questions where you must apply regulations to realistic banking situations. Candidates who only read the book and do not practice case-study MCQs almost always fail PPB.
PPB Syllabus 2026 — Module-wise Breakdown
| Module | Key Topics | ~MCQs | Priority |
|---|---|---|---|
| A — Indian Banking System | History of banking in India · Types of banks (commercial, cooperative, RRBs, SFBs, payment banks) · Banking Regulation Act 1949 · RBI as banking regulator · Basel norms overview · Banking sector reforms | 12–15 | Medium |
| B — Functions of Banks | Banker-customer relationship (general & special) · Types of accounts (savings, current, FD, NRE, NRO, FCNR) · KYC/AML norms — CDD, EDD, PEPs, STR · Negotiable Instruments Act 1881 (cheques, BoE, PN, crossing, endorsement) · Banking services (remittances, collections, guarantees, LCs) · Deposit insurance (DICGC — up to ₹5 lakh) | 25–30 | 🔴 Highest |
| C — Banking Technology | Core Banking Solution (CBS) · Internet banking & mobile banking · ATM operations, debit/credit cards · Cyber security — phishing, vishing, malware, ransomware · Digital KYC, Video KYC · Payment systems (covered in IE&IFS too) | 10–12 | Medium |
| D — Support Services | Marketing of banking services · Customer Relationship Management (CRM) · HR in banking — training, performance appraisal · Bancassurance · Cross-selling | 8–10 | Low |
| E — Ethics & Corporate Governance | Professional ethics in banking · Corporate governance norms · Fraud — definition, categories, early warning signals · Whistleblower policy · Board composition & RBI guidelines | 5–8 | Low |
| F — Credit & Advances (Lending) | Principles of lending · Types of credit facilities (OD, CC, TL, DL) · Working capital assessment · NPA classification — Substandard, Doubtful, Loss · Provisioning norms · SARFAESI Act 2002 · DRT Act · Lok Adalat · Credit guarantee schemes (CGTMSE, ECLGS) | 20–25 | 🔴 Highest |
Case-Study MCQs — The PPB Differentiator
Case-study MCQs are scenario-based questions where IIBF describes a real-life banking situation and asks what the correct action is under banking law or RBI guidelines. These are not answered by memorising facts — they require understanding how to apply a regulation. PPB has 20–30 such questions in every attempt.
Scenario: A customer aged 72 wants to open a savings account. He produces his Aadhaar card but says he does not have a PAN card. He wants to deposit ₹3 lakh in the account on day one. What should the bank officer do?
Scenario: A term loan account has not received any payment for 92 days. The borrower says payment will come next week. The branch manager wants to know the NPA status of this account. What is the correct classification?
Scenario: A cheque is drawn “Pay to Ramesh or order” and bears two parallel transverse lines across its face with the words “Account Payee” written between them. Ramesh endorses the cheque to Suresh. Can the bank pay Suresh?
High-Yield Topics — What Gets Asked Most
- OVDs: Aadhaar, PAN, Voter ID, Passport, Driving Licence, NREGA job card
- PAN / Form 60 required for cash transactions above ₹50,000
- CDD (Customer Due Diligence): standard for normal risk customers
- EDD (Enhanced Due Diligence): for high-risk customers and PEPs
- PEP (Politically Exposed Person): senior politicians, military/judicial officers, their families
- Banks must file STR (Suspicious Transaction Report) to FIU within 7 days
- CTR (Cash Transaction Report): cash ≥ ₹10 lakh — filed with FIU monthly
- Expect 12–18 MCQs including case studies on KYC/AML every attempt
- Cheque: drawn on a bank, payable on demand
- Bill of Exchange: unconditional order in writing, 3 parties (drawer, drawee, payee)
- Promissory Note: unconditional promise in writing, 2 parties (maker, payee)
- Crossing: General (double lines) · Special (bank name) · Account Payee (restrictive)
- Endorsement types: Blank, Full/Special, Restrictive, Conditional, Partial (invalid)
- Holder in Due Course: gets better title than the original holder
- Dishonour: Section 138 NI Act — criminal liability for cheque bounce (up to 2 years)
- Expect 10–15 MCQs including case studies per attempt
- NPA: loan overdue >90 days for term loans; OD/CC out of order for 90 days
- Substandard: NPA for ≤12 months — 15% provision (10% unsecured)
- Doubtful: NPA for >12 months — 25–100% provision based on age
- Loss: fully written off or identified but not yet written off — 100% provision
- SARFAESI Act 2002: allows banks to recover NPA without court for secured loans ≥₹1 lakh
- SARFAESI: 60-day demand notice → possession → sale. Cannot be used for agriculture land
- DRT (Debt Recovery Tribunal): for NPA loans above ₹20 lakh
- Lok Adalat: up to ₹20 lakh, compromise settlement, no appeal
- For deposits: bank = Debtor, customer = Creditor
- For loans: bank = Creditor, customer = Debtor
- For safe custody: bank = Bailee, customer = Bailor
- For safe deposit locker: bank = Lessor, customer = Lessee
- For collection of cheques: bank = Agent, customer = Principal
- Right of general lien: bank can retain customer’s goods until dues paid
- Right of set-off: bank can set off credit balance against debit balance
- Obligation to maintain secrecy of customer accounts (with 4 exceptions)
Key Facts to Memorise for PPB
| Fact / Rule | Value / Answer |
|---|---|
| NPA — 90-day rule | Loan overdue >90 days = NPA (from 2004; was 180 days earlier) |
| NPA — Substandard | NPA for ≤12 months · Provision: 15% (secured) / 25% (unsecured) |
| NPA — Doubtful I | 12–24 months NPA · Provision: 25% on secured + 100% on unsecured |
| NPA — Doubtful II | 24–36 months NPA · Provision: 40% on secured + 100% on unsecured |
| NPA — Doubtful III | >36 months NPA · Provision: 100% on secured + 100% on unsecured |
| NPA — Loss | Identified by bank/auditors/RBI as uncollectable · Provision: 100% |
| SARFAESI minimum loan | ₹1 lakh (secured loan) · cannot be used for agricultural land |
| SARFAESI demand notice | 60 days · if not repaid, bank may take physical possession |
| DRT jurisdiction | Loans above ₹20 lakh · Recovery of Debts Act 1993 |
| Lok Adalat | Settlement up to ₹20 lakh · binding, no appeal allowed |
| DICGC insurance | Up to ₹5 lakh per depositor per bank (from 4 Feb 2020) |
| KYC — PAN required above | ₹50,000 cash (deposit/withdrawal); Form 60 if no PAN |
| CTR threshold | ₹10 lakh cash · filed with FIU monthly |
| STR deadline | Within 7 days of suspicion · filed with Financial Intelligence Unit (FIU-IND) |
| Cheque validity | 3 months from date of issue (was 6 months before April 2012) |
| Section 138 NI Act | Cheque bounce — imprisonment up to 2 years OR 2× cheque amount |
| Banking Regulation Act | 1949 · governs commercial banks · RBI derives supervisory powers from this |
| CGTMSE | Credit Guarantee Fund Trust for Micro & Small Enterprises · covers up to ₹5 crore |
| Priority sector — MSME | 7.5% of ANBC (micro enterprises sub-target within PSL) |
| SFB (Small Finance Bank) | Can accept deposits · lend primarily to unserved segments · min capital ₹200 crore |
| Payment Bank | Can accept deposits up to ₹2 lakh per account · cannot lend |
| Garnishee Order | Court order attaching funds in customer’s account · bank must comply |
| Right of Lien | Bank can retain goods until dues are repaid; general lien over all goods |
Study Strategy for PPB — 4-Week Plan
PPB needs 3–4 weeks. The split: 3 weeks reading + 1 week pure case-study MCQ practice. Do not attempt mock papers before completing the reading — you will score poorly and lose confidence. The reading comes first, then the MCQ drills.
- Do not skip the case studies — they are 20–30 MCQs. You cannot score 45 by ignoring them.
- KYC is the single highest-weight topic — know all OVDs, every threshold, and CDD vs EDD.
- NPA rules are tested literally — “92 days overdue” is NPA; “88 days” is not. Know the exact 90-day rule.
- Negotiable Instruments — focus on crossing and endorsement types — these generate most case-study MCQs.
- SARFAESI cannot be used for agricultural land — this exact fact appears in MCQs repeatedly.
Best Book for JAIIB PPB — Official Macmillan
IIBF prescribes one official textbook for PPB, published by Macmillan Education India. This book is mandatory — every case-study scenario in the JAIIB exam is drawn from situations covered in this text. Do not use other publishers’ guides as your primary study material for PPB.
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For paper-wise book reviews for all four JAIIB papers, see the Best Books for JAIIB 2026 →
Frequently Asked Questions
Why is PPB the hardest JAIIB paper?
PPB has the highest failure rate among the four JAIIB papers for two reasons. First, it has the widest syllabus u2014 covering banking law, KYC/AML, negotiable instruments, NPA norms, SARFAESI, digital banking, and ethics across six modules. Second, 20u201330 MCQs are case-study based u2014 scenario questions that require applying banking regulations to realistic situations. Candidates who only read the book without practising case-study MCQs consistently fail these questions and do not reach the 45-mark threshold.
What is the NPA classification in JAIIB PPB?
NPA classification under RBI guidelines: A loan becomes NPA when overdue for more than 90 days. Substandard u2014 NPA for 12 months or less; provision 15% on secured portion, 25% on unsecured. Doubtful I u2014 NPA for 12 to 24 months; 25% secured, 100% unsecured. Doubtful II u2014 NPA for 24 to 36 months; 40% secured, 100% unsecured. Doubtful III u2014 NPA beyond 36 months; 100% on both. Loss u2014 identified as uncollectable by bank, auditor, or RBI inspection; 100% provision required immediately.
What are the KYC documents (OVDs) under JAIIB PPB?
Officially Valid Documents (OVDs) for KYC under RBI guidelines: Aadhaar card (UIDAI), PAN card, Voter Identity Card (Election Commission), Passport, Driving Licence, and NREGA job card signed by a State Government officer. For cash transactions above Rs. 50,000, the customer must provide PAN or submit Form 60 if they do not have PAN. Cash transactions above Rs. 10 lakh must be reported to FIU-IND as Cash Transaction Reports (CTR). Suspicious transactions must be reported as STR within 7 days of suspicion.
What is SARFAESI Act and how is it tested in JAIIB PPB?
The SARFAESI Act 2002 (Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act) allows banks and financial institutions to recover NPA loans without court intervention for secured loans of Rs. 1 lakh or more. The process: issue a 60-day demand notice to the borrower. If unpaid after 60 days, the bank can take possession of the secured asset and sell it. SARFAESI cannot be used for agricultural land. In JAIIB, expect MCQs on the 60-day notice period, the minimum loan threshold, exceptions (agriculture), and the difference between SARFAESI, DRT (above Rs. 20 lakh), and Lok Adalat (up to Rs. 20 lakh).
How should I prepare for case-study MCQs in JAIIB PPB?
Case-study MCQs in JAIIB PPB test how well you can apply banking regulations to real-life scenarios u2014 not just recall facts. To prepare: first, read the full Macmillan PPB book for context. Second, for the final week before the exam, do 50 case-study MCQs per day. Focus on three areas that generate most case-study failures: KYC and AML scenarios, Negotiable Instruments Act (crossing, endorsement, dishonour), and NPA classification with SARFAESI recovery scenarios. The IIBF official mock papers and the practice questions in the Macmillan book are the best sources for realistic case-study MCQs.
Latest Updates — PPB 2026
- 9 May 2026 — PPB Paper II exam for the May 2026 JAIIB attempt.
- 1 May 2026 — This guide published. Syllabus, case-study examples, key facts table, and 4-week plan added.
- February 2026 — IIBF confirmed May 2026 exam dates.
- 2023 — JAIIB syllabus revised. PPB remains Paper II with updated content on digital banking and cyber security.
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