Banking Awareness Questions for SBI CLERK

Reserve Bank of India — The Apex Bank

RBI is the central bank of India, established on 1 April 1935 under the RBI Act 1934. It was nationalised in 1949. RBI is the banker to the government, the banker to banks, and the currency issuer. Its headquarters is in Mumbai. The Governor heads RBI and is assisted by Deputy Governors (currently 4).

• Founded: 1 April 1935 | Nationalised: 1 January 1949
• HQ: Mumbai | Current Governor: Sanjay Malhotra (as of Dec 2024)
• RBI issues all currency except 1-rupee coin and note (issued by Ministry of Finance)
• RBI regulates commercial banks, cooperative banks, and NBFCs
• Lender of Last Resort — gives emergency loans to banks in crisis
• Manages foreign exchange under FEMA 1999

Monetary Policy and Key Rates

Monetary policy is RBI's tool to control money supply and inflation. The Monetary Policy Committee (MPC) meets every two months and decides key rates. Repo Rate is the rate at which RBI lends to commercial banks. Reverse Repo is the rate at which RBI borrows from banks. CRR and SLR are mandatory reserves banks must maintain.

• Repo Rate: RBI lends to banks — higher repo = costlier loans = less money in market
• Reverse Repo Rate: RBI borrows from banks — used to absorb excess liquidity
• CRR (Cash Reserve Ratio): % of deposits kept as cash with RBI — earns no interest
• SLR (Statutory Liquidity Ratio): % of deposits kept in gold, cash, or govt securities
• MSF (Marginal Standing Facility): Emergency overnight borrowing by banks at higher rate than repo
• Bank Rate: Rate at which RBI gives long-term loans — linked to MSF

Types of Bank Accounts

Banks offer different types of accounts for different needs. SBI Clerk exams frequently ask about features that distinguish these accounts — especially interest rates and purpose.

• Savings Account: For individuals, limited withdrawals, interest around 2.7-4%, KYC required
• Current Account: For businesses, no interest paid, overdraft facility available
• Fixed Deposit (FD): Lump sum for fixed period, higher interest, premature withdrawal allowed with penalty
• Recurring Deposit (RD): Fixed monthly installment for fixed period, good for salaried people
• BSBDA (Basic Savings Bank Deposit Account): Zero-balance account for financial inclusion under Jan Dhan
• NRE vs NRO: NRE is fully repatriable and tax-free in India; NRO is for Indian earnings of NRIs, taxable

Important Banking Terms

SBI Clerk GA is full of definition-based questions. These terms come up as direct questions or as part of current affairs. Learn the full form and one-line meaning for each.

• NEFT: National Electronic Funds Transfer — settled in batches, available 24x7 since Dec 2019
• RTGS: Real Time Gross Settlement — for large amounts above Rs 2 lakh, real-time settlement
• IMPS: Immediate Payment Service — instant, 24x7, up to Rs 5 lakh per transaction
• NACH: National Automated Clearing House — bulk payments like salaries, EMIs
• KYC: Know Your Customer — mandatory identity verification for all bank accounts
• NPA: Non-Performing Asset — loan unpaid for more than 90 days, a major banking problem

Financial Institutions and Regulators

India has multiple regulators for different parts of the financial system. SBI Clerk often asks which body regulates what. Remember: one regulator per sector.

• RBI: Regulates banks, NBFCs, payment systems, foreign exchange
• SEBI: Securities and Exchange Board of India — regulates stock markets and mutual funds
• IRDAI: Insurance Regulatory and Development Authority of India — regulates insurance
• PFRDA: Pension Fund Regulatory and Development Authority — regulates pension sector including NPS
• NABARD: Apex body for agriculture and rural development finance — refinances rural banks
• SIDBI: Small Industries Development Bank of India — finances MSMEs

Government Banking Schemes

Financial inclusion schemes launched by the government are high-frequency topics in SBI Clerk. Know the scheme name, launch year, and the bank or ministry behind it.

• PMJDY (2014): Jan Dhan Yojana — zero-balance accounts with RuPay card and overdraft up to Rs 10,000
• PMJJBY: Life insurance scheme — Rs 2 lakh cover at Rs 436/year for age 18-50
• PMSBY: Accidental insurance — Rs 2 lakh cover at Rs 20/year for age 18-70
• APY (Atal Pension Yojana): Pension scheme for unorganised sector workers via NPS platform
• Mudra Yojana: Loans for micro businesses — Shishu (up to 50K), Kishore (up to 5L), Tarun (up to 10L)
• Stand Up India: Loans to SC/ST and women entrepreneurs for greenfield enterprises

• Confusing Repo Rate and Reverse Repo Rate — remember Repo = RBI Provides (money to banks); Reverse = RBI Receives (money from banks)
• Thinking RBI issues the 1-rupee note — it is issued by Ministry of Finance, signed by Finance Secretary, not RBI Governor
• Mixing up NEFT and RTGS — RTGS is only for amounts above Rs 2 lakh and is real-time; NEFT is batch-based and has no minimum amount
• Confusing NRE and NRO accounts — NRE is for foreign earnings brought to India (fully repatriable); NRO is for income earned inside India by NRIs
• Forgetting that CRR earns no interest but SLR-eligible securities can earn interest — CRR is a dead reserve, SLR is a semi-productive reserve

• REPO = RBI Extends Purchase Option to banks (RBI gives money). REVERSE REPO = RBI Receives. Think of it as a two-way street — Repo is RBI giving, Reverse is RBI taking.
• Regulators by sector — BSIP: Banks=RBI, Stocks=SEBI, Insurance=IRDAI, Pension=PFRDA. Mnemonic: Big Snakes In Ponds.
• MUDRA loan tiers — SST: Small (Shishu 50K), Semi-big (Kishore 5L), Top (Tarun 10L). Think of a growing plant.
• For payment systems speed order: IMPS is Instant, NEFT is Next batch, RTGS is Real-Time but only big money. Remember INR in reverse order of speed: RTGS fastest but minimum limit, IMPS fastest and no minimum.

• SBI Clerk GA typically has 3-4 questions on RBI rates and monetary policy tools. Always check the latest Repo Rate and CRR before exam day as RBI reviews them bi-monthly.
• At least 2-3 questions come from government banking schemes — focus on PMJDY, Mudra, and insurance schemes as they are perennial favourites.
• Banking terms like NPA, NEFT, RTGS, IMPS appear as fill-in-the-blank or definition match — learn exact full forms, not just meanings.
• Current affairs banking news (new RBI Governor, new bank licences, merger of banks, DICGC insurance limit of Rs 5 lakh) are tested as static+current combo questions.
• Difficulty is low to medium — these are memory-based questions. A well-prepared aspirant should aim to answer 8-10 banking questions correctly in under 6 minutes.