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ETHICS Previous Year Questions & Exam-Pattern Practice (2026)

IIBF doesn't release official question papers. Practice these exam-pattern recall questions instead — modeled on the current ETHICS syllabus and difficulty, with answers and explanations.

15 hard practice questions Answers + explanations included

Why "previous year questions" don't officially exist for ETHICS

IIBF does not publish past question papers, and no verified bank of actual previous-year questions exists anywhere. Every question on this page is an exam-pattern practice question written to match the current Ethics in Banking syllabus and difficulty — it is not an actual exam question. That's the honest way to prepare for the recall-based pattern.

ETHICS subject

Ethics in Banking

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1

A customer of a private-sector bank discovers a suspected fraud and wishes to lodge a protected disclosure with the regulator. Under the RBI's Protected Disclosures Scheme for Private Sector and Foreign Banks (2007), which statement is correct?

  1. A. Only employees of the bank may complain, and the CVC is the nodal agency
  2. B. RBI is the nodal agency, and employees, customers, stakeholders, NGOs and members of the public may complain, but anonymous/pseudonymous complaints are not entertained
  3. C. Anonymous complaints are encouraged to protect identity
  4. D. Complaints must be filed with the CBI, not the RBI
Show answer & explanation

Correct answer: B. RBI is the nodal agency, and employees, customers, stakeholders, NGOs and members of the public may complain, but anonymous/pseudonymous complaints are not entertained

Correct: (B) Why correct: The chapter states under the 2007 scheme that 'Reserve Bank of India (RBI) will be the Nodal Agency', complaints may be lodged by 'employees of the bank concerned, customers, stakeholders, NGOs and members of public', and 'Anonymous/pseudonymous complaints will not be covered.' Why others wrong: (A) wrongly restricts complainants and names CVC (CVC handles PSBs/RBI under PIDPI, not private banks); (C) anonymous complaints are expressly excluded; (D) complaints go to RBI's Fraud Monitoring Cell, not the CBI.

Study this chapter: WORK Ethics and the Workplace
2

The chapter notes that nurturing a banker's ethical qualities requires the practical 'principles of ethical power' proposed by Blanchard and Peale. These five principles are:

  1. A. Purpose, Patience, Persistence, Perspective and Pride
  2. B. Profit, Power, Position, Prestige and Productivity
  3. C. Planning, Performance, Promotion, Probity and Punctuality
  4. D. Prudence, Patience, Profit, Pride and Perspective
Show answer & explanation

Correct answer: A. Purpose, Patience, Persistence, Perspective and Pride

Correct: (A) Why correct: The chapter explicitly lists 'purpose, patience, persistence, perspective and pride' as the principles of ethical power proposed by Blanchard and Peale, which enable managers to consistently do what is right. Why others wrong: (B), (C) and (D) substitute plausible-sounding 'P' words but do not match the five principles named in the text.

Study this chapter: WORK Ethics and the Workplace
3

For a public sector bank, an officer wants to make a protected disclosure about corruption. Under the PIDPI Resolution framework, which authority is the designated agency and from which date was the whistleblower mechanism for PSBs and RBI brought under it?

  1. A. RBI; with effect from April 18, 2007
  2. B. Central Vigilance Commission (CVC); with effect from April 21, 2004
  3. C. CBI; with effect from May 2014
  4. D. SEBI; with effect from 2010
Show answer & explanation

Correct answer: B. Central Vigilance Commission (CVC); with effect from April 21, 2004

Correct: (B) Why correct: The chapter states the whistleblower policy for public sector banks and the RBI 'has been brought under the purview of the Central Vigilance Commission (CVC) with effect from April 21, 2004', and the PIDPI Resolution authorises the CVC as the designated agency. Why others wrong: (A) RBI and 18 April 2007 relate to the Protected Disclosures Scheme for private/foreign banks; (C) May 2014 is the Whistleblowers Protection Act assent; (D) SEBI/2010 is not connected to this PIDPI mechanism.

Study this chapter: WORK Ethics and the Workplace
4

Under the Whistleblowers Protection Act, 2014, which set of consequences correctly matches the offences described in the chapter?

  1. A. False/frivolous complaint: up to 2 years imprisonment and fine up to Rs. 30,000; revealing complainant's identity negligently/mala fide: up to 3 years and fine up to Rs. 50,000
  2. B. False complaint: up to 5 years and Rs. 1,00,000; revealing identity: life imprisonment
  3. C. False complaint: only a warning; revealing identity: up to 1 year
  4. D. False complaint: up to 3 years and Rs. 50,000; revealing identity: no penalty
Show answer & explanation

Correct answer: A. False/frivolous complaint: up to 2 years imprisonment and fine up to Rs. 30,000; revealing complainant's identity negligently/mala fide: up to 3 years and fine up to Rs. 50,000

Correct: (A) Why correct: The chapter states the Act 'lays down punishment up to two years in prison and a fine of up to Rs. 30,000 for false or frivolous complaint' (total penalty not exceeding Rs. 50,000), and that 'the penalty for revealing the identity of the complainant negligently or due to mala fide reasons is imprisonment up to 3 years and a fine up to Rs. 50,000.' Why others wrong: (B), (C) and (D) misstate the prison terms and fine amounts given in the chapter.

Study this chapter: WORK Ethics and the Workplace
5

While arguing that whistleblowers — not audits or regulators — are the single most important source for uncovering wrongdoing, the chapter cites several real cases. Which trio of whistleblowers is correctly matched to their organisations?

  1. A. Sherron Watkins–Enron; Cynthia Cooper–WorldCom; Harry Templeton–Maxwell pension fund (UK)
  2. B. Sherron Watkins–WorldCom; Cynthia Cooper–Satyam; Harry Templeton–Enron
  3. C. Cynthia Cooper–Enron; Sherron Watkins–LIBOR; Harry Templeton–Satyam
  4. D. Harry Templeton–WorldCom; Sherron Watkins–Satyam; Cynthia Cooper–Maxwell
Show answer & explanation

Correct answer: A. Sherron Watkins–Enron; Cynthia Cooper–WorldCom; Harry Templeton–Maxwell pension fund (UK)

Correct: (A) Why correct: The chapter names Sherron Watkins who voiced concern at Enron before its collapse, Cynthia Cooper the internal auditor who uncovered about $3.8 billion of questionable entries at WorldCom, and Harry Templeton who challenged Robert Maxwell's plundering of the pension fund (the Maxwell Saga in the UK). Why others wrong: (B), (C) and (D) scramble the names and organisations stated in the chapter.

Study this chapter: WORK Ethics and the Workplace
6

A bank officer aggrieved by a CVC order imposing a penalty (for not furnishing reports / revealing a complainant's identity) under the Whistleblowers Protection Act, 2014 asks about appeal rights and the Act's reach. Which is correct?

  1. A. Appeal lies to the Supreme Court within 30 days; the Act applies to the armed forces
  2. B. Appeal lies to the High Court within 60 days; the Act does not apply to J&K, the armed forces and special protection groups, and excludes national-security information
  3. C. No appeal is permitted; the Act covers national-security matters fully
  4. D. Appeal lies to the District Court within 90 days; the Act applies to the SPG
Show answer & explanation

Correct answer: B. Appeal lies to the High Court within 60 days; the Act does not apply to J&K, the armed forces and special protection groups, and excludes national-security information

Correct: (B) Why correct: The chapter states 'Any person aggrieved by the order of Central Vigilance Commission... may file an appeal to the High Court within 60 days', that 'Information related to national security has been kept out of the purview of the Act', and that the Act 'is not applicable to J&K, the armed forces and the special protection groups.' Why others wrong: (A), (C) and (D) misstate the appellate forum, the limitation period, or the Act's exclusions.

Study this chapter: WORK Ethics and the Workplace
7

An auditor visiting a branch wants to quickly judge whether it is an 'ethical workplace' without using organisation-theory expertise. Which observed practice would the chapter treat as a sign of an ETHICAL workplace rather than a red flag?

  1. A. Staff insisting on documents beyond the regulator's prescribed minimum to be safe
  2. B. Strict adherence to minimal prescribed documentation and not insisting on extra documents from the borrower
  3. C. Staff hinting to a customer to meet them outside the branch for guidance
  4. D. Quiet acceptance of small gifts as a goodwill gesture
Show answer & explanation

Correct answer: B. Strict adherence to minimal prescribed documentation and not insisting on extra documents from the borrower

Correct: (B) Why correct: The chapter lists 'strict adherence to minimal prescribed documentation as prescribed by the regulator/internal management and not insisting for additional documents from the borrower' as a way to recognise an ethical workplace. Why others wrong: (A) contradicts that very point; (C) is listed as unethical ('No direct or indirect hints to customers to meet the employees outside the workplace'); (D) violates 'No expectations or acceptance of gifts/favors irrespective of the amount'.

Study this chapter: WORK Ethics and the Workplace
8

In a sales unit, employee B exceeds targets by promising after-sales services the bank cannot honour, and is publicly applauded, while employee A who met a smaller target ethically is ignored. The chapter classifies this signalling failure as which specific CAUSE of unethical behaviour?

  1. A. Lack of fear of action
  2. B. Influence of co-employees
  3. C. Means are not appreciated
  4. D. Non-availability of code of ethics manual
Show answer & explanation

Correct answer: C. Means are not appreciated

Correct: (C) Why correct: The chapter's 'Means are not appreciated' cause uses exactly this A-vs-B example, concluding that applauding B and not A 'will emit signals that the organization does not visibly believe in appreciating the ethicality of means', so employees focus on ends only. Why others wrong: (A) is about absence of punishment; (B) is peer pressure from colleagues; (D) is the missing ethics manual — none captures the ends-over-means signalling that this example illustrates.

Study this chapter: WORK Ethics and the Workplace
9

A mid-career banker, realising in his mid-30s that a career offers only about 30-35 active years, decides to contribute to environmental causes beyond his job. The chapter places such causes at the top of a hierarchy of life-purpose. Which is the correct ascending order of that hierarchy?

  1. A. Self → Family → Community → Religion → Society → Global causes
  2. B. Family → Self → Society → Community → Religion → Global causes
  3. C. Self → Community → Family → Society → Religion → Global causes
  4. D. Religion → Self → Family → Community → Global causes → Society
Show answer & explanation

Correct answer: A. Self → Family → Community → Religion → Society → Global causes

Correct: (A) Why correct: The chapter lists the hierarchy of purpose as Oneself, Family, Community, Religion, Society at large, and Global causes (like peace, human rights, environment). Why others wrong: (B), (C) and (D) jumble the sequence; the chapter is explicit that it ascends from self outward to global causes, with environment cited as a global cause.

Study this chapter: WORK Ethics and the Workplace
10

A relationship manager regularly files his own and his relatives' income-tax returns, completes his child's school assignments and runs comparisons for online shopping during office hours, citing 'unquestioned job security'. Under the chapter, this behaviour is best categorised as:

  1. A. Acceptable multitasking that boosts overall productivity
  2. B. Conducting personal business during office time, driven by low work ethic and unquestioned job security
  3. C. Legitimate whistleblowing about workload
  4. D. The recovery paradox in action
Show answer & explanation

Correct answer: B. Conducting personal business during office time, driven by low work ethic and unquestioned job security

Correct: (B) Why correct: The chapter's section 'Conducting Personal Business During Office Time' lists exactly these tasks (tax returns for self/relatives, completing kids' school assignments, online shopping comparisons) and names reasons such as 'Low work ethic and least respect for customers' and 'Unquestioned job security.' Why others wrong: (A) misframes a clearly unethical act; (C) whistleblowing is about exposing wrongdoing, not personal chores; (D) recovery paradox concerns regaining trust after a violation.

Study this chapter: WORK Ethics and the Workplace
11

A Chief Manager gives free maths tuition to his boss's son after office hours, fearing transfer to a distant place if he refuses. The chapter would classify this primarily as which organisational vice?

  1. A. Lying
  2. B. Favoritism by the boss
  3. C. Abuse of official position
  4. D. The recovery paradox
Show answer & explanation

Correct answer: C. Abuse of official position

Correct: (C) Why correct: The chapter gives this exact illustration under 'Abuse of Official Position' — individuals let personal interests override the mandated purpose, e.g., 'a Chief Manager used to take free math's tuitions of his boss's son after the office hours out of the fear of transfer.' Why others wrong: (A) lying is falsifying information; (B) favoritism is unearned promotions/benefits disregarding merit; (D) recovery paradox is about restoring trust after a lapse — none fits this coercive misuse of hierarchical power.

Study this chapter: WORK Ethics and the Workplace
12

In review meetings, an articulate, convent-educated employee repeatedly claims credit for tasks actually done by a quieter colleague from a humble rural background who lacks public-speaking skills. The chapter says the ROOT CAUSE of 'taking credit for others' work' is:

  1. A. Insufficient salary increments for performers
  2. B. Inappropriate amalgamation of individual responsibilities into team-based work
  3. C. Excessive surveillance by management
  4. D. Lack of an ethics manual
Show answer & explanation

Correct answer: B. Inappropriate amalgamation of individual responsibilities into team-based work

Correct: (B) Why correct: The chapter states 'The root cause for this problem is inappropriate ways of mixing individual responsibilities with the so-called team work', so weak or low-work-ethic members evade tasks and claim others' work during reviews. Why others wrong: (A) and (D) are unrelated to the credit-claiming mechanism the chapter describes; (C) management is actually urged to probe deeper, not blamed for over-surveillance here.

Study this chapter: WORK Ethics and the Workplace
13

Citing Paul D Sweeny (2014) and Schminke, the chapter draws on service-recovery research to argue that decisively addressing an ethical violation can sometimes increase employee trust above its prior level. This phenomenon is termed:

  1. A. The whistleblower's dilemma
  2. B. The (ethical) recovery paradox
  3. C. Moral licensing
  4. D. The Protestant work ethic
Show answer & explanation

Correct answer: B. The (ethical) recovery paradox

Correct: (B) Why correct: The chapter explains that Schminke and colleagues suggest 'an ethical recovery paradox may exist if firms go the extra mile to deal with an ethical violation in a highly effective way', restoring and even enhancing employee confidence — paralleling the airline-luggage recovery paradox. Why others wrong: (A) is the whistleblower's loyalty conflict, discussed elsewhere; (C) moral licensing is not named in the chapter; (D) is the historical origin of work ethic, unrelated to recovery from lapses.

Study this chapter: WORK Ethics and the Workplace
14

A branch officer works very hard, is loyal, dependable and self-motivated, taking pride in every task he performs. Separately, his bank expects all staff to never disclose customer information to third parties as a matter of professional standard. In the terminology of the chapter, the first describes his __ and the second is an example of __.

  1. A. work ethics; work ethic
  2. B. work ethic; workplace ethics (work ethics)
  3. C. integrity; transparency
  4. D. duty-mindedness; confidentiality clause
Show answer & explanation

Correct answer: B. work ethic; workplace ethics (work ethics)

Correct: (B) Why correct: The chapter states a person who 'works very hard and exhibits a great deal of pride in that work' is said to have a good 'work ethic', while 'work ethics' (workplace ethics, plural with an s) is a set of moral standards for each profession, e.g. 'bankers would never disclose information about their customers to third parties.' Why others wrong: (A) reverses the two terms; (C) and (D) name component virtues but miss the specific work ethic vs work ethics distinction the chapter draws.

Study this chapter: WORK Ethics and the Workplace
15

An employee escalates a serious misconduct only through the bank's internal HR hotline. When the same wrongdoing is later reported to a government regulator or the media because internal resolution seems unlikely, the chapter would describe the two acts respectively as:

  1. A. External whistleblowing; internal whistleblowing
  2. B. Internal whistleblowing; external whistleblowing
  3. C. Both internal whistleblowing
  4. D. Grievance redressal; defamation
Show answer & explanation

Correct answer: B. Internal whistleblowing; external whistleblowing

Correct: (B) Why correct: The chapter defines internal whistleblowing as using internal channels (HR, internal hotline), and external whistleblowing as using external channels such as regulators, government or media, typically when proper internal resolution seems unavailable. Why others wrong: (A) reverses the labels; (C) ignores the external regulator/media route; (D) mislabels a protected disclosure as defamation.

Study this chapter: WORK Ethics and the Workplace

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