CS Professional · December 2025 · Paper 7.4
CS Professional Banking and Insurance - Laws and Practice December 2025: paper analysis
Our own analysis of the official paper, as of 12 October 2026. The questions and answers belong to ICSI; read them on ICSI's website.
Chapter-wise marks
Where the marks were in this paper (out of 100; internal-choice alternatives not double counted).
What each question tested
In our words, by question number. Open the official paper for the full question.
| Q | Marks | Tests | Chapter |
|---|---|---|---|
| 1(a) | 2 | Role of the board risk management committee in a bank | Risk Management in Banks and Basel Accords |
| 1(b) | 2 | How internal audit supports risk management in banks | Risk Management in Banks and Basel Accords |
| 1(c) | 2 | Impact of reputation risk on a bank | Risk Management in Banks and Basel Accords |
| 1(d) | 2 | Capital to risk-weighted assets ratio and its bearing on bank stability | Risk Management in Banks and Basel Accords |
| 1(e) | 2 | Distinction between Tier 1 and Tier 2 capital | Risk Management in Banks and Basel Accords |
| 1(f) | 2 | Political stability as a factor reducing business risk | Risk Management in Banks and Basel Accords |
| 1(g) | 2 | Role of the asset liability management committee in managing risk | Risk Management in Banks and Basel Accords |
| 1(h) | 2 | Meaning of risk based internal audit | Risk Management in Banks and Basel Accords |
| 1(i) | 2 | Distinction between risk transfer and risk mitigation | Risk Management in Banks and Basel Accords |
| 1(j) | 2 | How the RBI helps banks manage risk | Risk Management in Banks and Basel Accords |
| 2(a) | 5 | Origin and development of SIDBI and its impact on industrial growth | Overview of Indian Banking System |
| 2(b) | 6 | RBI currency management and its relevance in the era of UPI and digital currency | Regulatory Framework of Banks |
| 2(c) | 4 | Classification of an overdue term loan as standard, SMA and NPA categories over time under IRAC norms | Performing and Non Performing Assets |
| 3(a)(i) | 2 | Branch opening by foreign banks in India and RBI licensing conditions | Banking Operations |
| 3(a)(ii) | 2 | Whether refusal of a banking licence by RBI can be challenged, with case law | Banking Operations |
| 3(b) | 4 | Drawing power for overdraft and bill discounting limits with stock and debtor exclusions | Advances, Securities and Documentation |
| 3(c)(i) | 1 | Use of social networks by cyber criminals for online fraud | Digital Banking |
| 3(c)(ii) | 6 | Distinguishing hacker and cracker, cyber-squatting and cyber stalking, phishing and smishing | Digital Banking |
| 3A(a) | 7 | Distinction between regional rural banks and co-operative banks | Overview of Indian Banking System |
| 3A(b) | 3 | Documents required to open a bank account for an LLP | Banking Operations |
| 3A(c) | 5 | Bank appraisal parameters for project loans: promoter contribution, debt equity, asset cover, DSCR, IRR | Advances, Securities and Documentation |
| 4(a) | 2 | Need for prudent investment of insurers funds | Functions in Insurance and Compliance related thereto (Part I) |
| 4(b) | 2 | Risks of derivative instruments in insurance investments | Functions in Insurance and Compliance related thereto (Part I) |
| 4(c) | 2 | Role of the chief investment officer in an insurer | Functions in Insurance and Compliance related thereto (Part I) |
| 4(d) | 2 | Harmful effects of insider trading in investment decisions | Functions in Insurance and Compliance related thereto (Part I) |
| 4(e) | 2 | Who reviews and certifies an insurers investment risk management system | Functions in Insurance and Compliance related thereto (Part I) |
| 4(f) | 2 | Meaning of liquidity risk in insurance business | Functions in Insurance and Compliance related thereto (Part I) |
| 4(g) | 2 | Ensuring internal control of insurance investment operations | Functions in Insurance and Compliance related thereto (Part I) |
| 4(h) | 2 | Rating agencies competent to rate insurers investments | Functions in Insurance and Compliance related thereto (Part I) |
| 4(i) | 2 | Money market instruments suitable for insurer investment | Functions in Insurance and Compliance related thereto (Part I) |
| 4(j) | 2 | Importance of periodic reporting to IRDAI for investment discipline | Regulatory Framework in Insurance |
| 5(a)(I) | 4 | Principle of causa proxima in insurance | Concept of Insurance |
| 5(a)(II) | 4 | Principle of subrogation in insurance | Concept of Insurance |
| 5(b) | 7 | Meaning of loading charges on premium and factors leading to loading | Functions in Insurance and Compliance related thereto (Part II) |
| 6(a) | 4 | Prohibition of rebates on insurance premium under the Insurance Act | Regulatory Framework in Insurance |
| 6(b) | 4 | Applying subrogation to a motor damage claim: elements, benefits and contractual waiver | Concept of Insurance |
| 6(c) | 4 | Role of insurance in national economic development | Concept of Insurance |
| 6(d) | 3 | Role of an insurance broker and distinction between direct and composite brokers | Functions in Insurance and Compliance related thereto (Part V) |
| 6A(a) | 3 | Directors and officers liability insurance policy explained | General and Health Insurance |
| 6A(b) | 4 | Life underwriting decision for a proposer with risk factors such as obesity and family history | Functions in Insurance and Compliance related thereto (Part I) |
| 6A(c) | 4 | Quota share reinsurance: ceded premium, claims, commission and net underwriting result | Functions in Insurance and Compliance related thereto (Part III) |
| 6A(d) | 4 | Burglary claim under a declaration policy with deductible and under-insurance | Functions in Insurance and Compliance related thereto (Part V) |
What stood out
- Banking (Part I, Q1 to Q3) and insurance (Part II, Q4 to Q6) carried 50 marks each, with alternatives offered for Q3 and Q6.
- Each part opened with a 20-mark passage-based question of ten 2-mark short answers, on bank risk management and IRDAI investment regulations respectively.
- Risk Management in Banks and Basel Accords was the single most tested chapter (10 entries), entirely through the Q1 passage.
- Practical numericals included drawing power, IRAC asset classification, quota share reinsurance and a burglary claim under a declaration policy.
- Most parts carried low marks (1 to 7), so the paper rewarded breadth across chapters rather than long answers.
Practise the chapters that carried the marks
Functions in Insurance and Compliance related thereto (Part I), Risk Management in Banks and Basel Accords, Concept of Insurance: study guides and practice questions in the CS Professional format.