Chapter 43: Operational Aspects of CBS Environment (JAIIB – Paper 2)
1. What is the main advantage of a Core Banking System (CBS)?
A. Branch-wise isolated customer data
B. Customers restricted to home branch only
C. Manual posting of entries at each branch
D. Anywhere banking through centralized database
CBS enables a centralized database across all branches, allowing customers to access services from any branch (anywhere banking).
2. In CBS, which component is responsible for real-time posting of customer transactions?
A. End-of-Day (EOD) batch process
B. Centralized transaction processing server
C. Local branch ledger
D. Manual voucher entry
CBS uses a centralized processing server to post transactions instantly, ensuring real-time updating across all delivery channels.
3. A customer deposits a cheque in Branch A, but the account is maintained in Branch B. In CBS, how is this transaction processed?
A. Cheque must be physically sent to Branch B for posting
B. Deposit cannot be accepted at Branch A
C. Transaction is posted centrally and reflected in Branch B’s account instantly
D. Entry will be made in both branches manually
In CBS, all customer accounts are maintained centrally, so the deposit at Branch A is processed centrally and updated in Branch B’s account in real time.
4. In the flow of transactions under CBS, what is the sequence?
A. Transaction initiated → Captured at delivery channel → Processed centrally → Updated in database
B. Transaction initiated → Sent to branch manager → Posted at branch → Updated at year-end
C. Transaction initiated → Entered manually at HO → Sent to RBI → Updated quarterly
D. Transaction initiated → Captured at teller only → Printed on passbook → Updated later
In CBS, transactions flow from the customer delivery channel (branch, ATM, internet, mobile) → centralized processing → core database → real-time account update.
5. Which of the following is NOT a function performed by CBS?
A. Anywhere banking
B. Real-time posting of transactions
C. Centralized customer information system
D. Manual reconciliation of branch-wise ledgers
CBS eliminates manual reconciliation by maintaining a centralized ledger, ensuring real-time updates and consolidated MIS.
6. In CBS, accounting entries for customer transactions are posted:
A. Only at the home branch of the customer
B. At both originating and home branches separately
C. Centrally in the core database, visible across all branches
D. Manually by the branch accountant at day-end
CBS ensures centralized posting of transactions in a common database, eliminating the need for branch-wise manual entries.
7. What is the primary purpose of End of Day (EOD) operations in CBS?
A. To ensure that all transactions for the day are validated, balanced, and reports are generated
B. To allow customers to withdraw cash at night
C. To perform ATM cash loading
D. To transfer funds from RBI to banks
EOD ensures that all transactions are reconciled, books are balanced, MIS/statutory reports are generated, and the system is prepared for the next day.
8. Begin of Day (BOD) operations in CBS are carried out to:
A. Close customer accounts
B. Allow only inter-bank settlements
C. Reconcile manual ledgers
D. Initialize the system for the new business day after successful EOD
BOD marks the opening of the new day in CBS, ensuring all previous day’s EOD processes are complete before new transactions begin.
9. Which of the following is NOT part of End of Day (EOD) activities in CBS?
A. Balancing of general ledger accounts
B. Opening of teller counters for customer service
C. Generation of daily MIS reports
D. Posting of accrual entries like interest and charges
Opening of teller counters is a Begin of Day (BOD) activity, while balancing, MIS generation, and accrual entries belong to EOD.
10. In CBS, interest accrual and system-driven charges are usually posted:
A. During End of Day (EOD) batch processes
B. At the discretion of branch accountant
C. Only at year-end closing
D. During Begin of Day (BOD) initialization
Interest, charges, and other automated postings are typically executed during EOD batch jobs, ensuring accuracy and uniformity across accounts.
11. Which of the following is a critical step in End of Day (EOD) operations?
A. Opening new customer accounts
B. Teller cash balancing for the next day
C. Ensuring all transactions are posted, verified, and books are balanced
D. Authorizing new loan applications
EOD ensures all day’s transactions are validated, balanced, and consolidated before closing the system for the day.
12. In CBS, password control is primarily implemented to:
A. Restrict unauthorized access to the system and safeguard customer data
B. Allow free access to employees for faster transactions
C. Reduce the need for encryption
D. Bypass maker-checker controls
Password control ensures only authorized users can log in to CBS, thereby maintaining data confidentiality and system integrity.
13. In banks, the password policy usually includes all of the following EXCEPT:
A. Mandatory password change after a fixed period
B. Allowing users to share passwords for convenience
C. Minimum length and complexity requirements
D. Automatic account lockout after failed login attempts
Password sharing is never allowed. Bank password policies require periodic change, complexity rules, and lockout after multiple failures.
14. In CBS, the Parameter/Master File is used for:
A. Recording customer complaints
B. Maintaining branch attendance of staff
C. Keeping physical vouchers
D. Defining rules like interest rates, product codes, GL heads, and account types
The Parameter/Master File stores system-level rules and codes like interest rates, product parameters, and GL accounts, ensuring uniform processing across all branches.
15. If an incorrect parameter is set in the Master File (e.g., wrong interest rate), what is the likely impact?
A. It will affect all transactions processed under that product across all branches
B. It will remain confined to one branch only
C. It will not affect actual transactions, only reports
D. It will auto-correct during EOD process
Since CBS operates on a centralized database, any wrong parameter in the Master File impacts all branches and related transactions until corrected.
16. Logical access control in CBS primarily ensures:
A. Physical entry to server rooms is restricted
B. Only customers can access their own accounts
C. Banks can prevent cybercrimes fully
D. Only authorized employees can access specific system applications and data
Logical access control regulates user rights within CBS, ensuring staff access only the applications and data needed for their role.
17. In CBS, the maker-checker principle is an example of:
A. EOD procedure
B. Password sharing control
C. Security control ensuring no single user can complete a financial transaction alone
D. Customer grievance redressal mechanism
Maker-checker principle ensures dual control by requiring one staff to enter a transaction and another to authorize it, reducing fraud risk.
18. Which of the following is an operational aspect of security control in CBS?
A. Daily cash reconciliation
B. Restricting user rights based on job role and monitoring audit logs
C. Issuing cheque books to customers
D. Printing passbooks at branches
Operational security controls in CBS include role-based access, monitoring of system activities, and maintaining audit trails for accountability.
19. Under CBS, what is the responsibility of the bank regarding customer data?
A. Ensuring confidentiality, integrity, and availability of customer information
B. Allowing third parties to freely use customer data
C. Storing customer data only in physical registers
D. Sharing customer data with staff without restrictions
Banks have a fiduciary duty to secure customer data under CBS, ensuring confidentiality, integrity, and availability as per RBI/IT Act guidelines.
20. Which of the following is NOT a responsibility of banks under CBS environment?
A. Implementing logical and physical access controls
B. Training staff on CBS security protocols
C. Ensuring system audits and compliance with regulations
D. Allowing unrestricted access to CBS data for faster processing
Banks must enforce security and compliance in CBS. Allowing unrestricted data access violates confidentiality and regulatory norms.
