General Awareness / Banking Awareness
General Awareness / Banking Awareness in IBPS PO tests RBI and banking structure, monetary policy, financial markets, government schemes, static GK and current economic news. Banking awareness questions are often definitional but precise: know which institution does what and which rate is which.
Core rules
- RBI functions: currency issue except coins, monetary policy, banker to government and banks, foreign exchange management and payment systems oversight. It does not lend directly to the public.
- Policy rates: repo is RBI lending to banks against securities; reverse repo absorbs liquidity; MSF is emergency borrowing; bank rate is a long-term reference. CRR is cash held with RBI; SLR is liquid assets held by banks.
- Monetary policy is decided by the six-member MPC and targets inflation. Open market operations change liquidity and yields.
- Schemes: PMJDY for financial inclusion, MUDRA for micro-enterprise loans, Stand-Up India for SC/ST and women entrepreneurs, Atal Pension Yojana for pension.
Worked example
If RBI sells government securities in the open market, it absorbs rupees from banks. Bank reserves fall, liquidity tightens, and short-term rates tend to rise; bond prices fall and yields rise. This is a contractionary OMO operation.
Traps
Do not swap CRR and SLR, or repo and reverse repo. Do not assume the RBI sets every bank's lending rate; it signals the policy rate, while banks price loans off it. Current rates and scheme caps change, so verify them with the latest RBI notifications rather than memory alone.