General and Banking Awareness
What this section tests
General and Banking Awareness checks RBI policy tools, banking terminology, financial inclusion, payment systems, and recent schemes, plus a small current-affairs layer. Federal Bank-specific facts can appear, so know that it is a private-sector scheduled commercial bank founded in 1931 with headquarters at Aluva, Kerala.
Core rules
- Repo rate: RBI lends to banks against government securities. Reverse repo/SDF absorbs liquidity.
- CRR is the share of net demand and time liabilities kept with RBI and earns no interest. SLR is held in approved securities.
- The MPC has six members and targets 4% CPI inflation within a ±2% band.
- Fiscal policy belongs to the government; monetary policy belongs to RBI.
- Payments: UPI, NEFT, RTGS, IMPS, and AePS differ in settlement timing and use case.
Worked example
A bank has net demand and time liabilities of ₹1,000 crore. CRR is cut from 4.0% to 3.5%. How much lendable resource is released? CRR at 4.0% = ₹40 crore; at 3.5% = ₹35 crore. Release = ₹5 crore. The bank can deploy this in loans or investments, subject to SLR.
Traps that cost marks
Swapping CRR and SLR; calling repo a government tool; mixing reverse repo with SDF; and assuming every “bank” is a scheduled commercial bank. In scheme questions, match the beneficiary and ministry, not just the name. For Federal Bank, do not confuse it with a nationalised bank.