JAIIB RBWM cheat sheet

Under RBI's revised KYC Master Direction (effective 2025), periodic KYC updation for high-risk customers is every 2 years, medium-risk every 8 years, and low-risk every 10 years.

BSBDA-Small Account: aggregate credits up to ₹2 lakh per year; maximum balance ₹10,000; no minimum balance; eligible for Aadhaar OTP-based e-KYC at bank branches, BC points, and digital channels.

Basic Savings Bank Deposit Account (BSBDA) must not require minimum balance; holder is entitled to at least four free withdrawals per month including ATM, and any charges beyond must be disclosed.

Interest on savings deposits is calculated on daily closing balance method; banks must credit interest at least quarterly, and the rate is deregulated for commercial banks.

Recurring Deposit: interest is compounded quarterly; maturity value = P × [((1+r/400)^(4n) − 1)/(r/400)] × (1+r/400) for monthly deposit P, annual rate r, n years.

Fixed Deposit premature withdrawal: banks may levy a penalty of 0.5%–1% on the applicable rate; no penalty if the deposit is renewed at the contracted rate or closed due to death of depositor.

Nomination under Section 45ZA of the Banking Regulation Act, 1949 is mandatory for new deposit accounts; a nominee can be changed any number of times, and nomination is a facility, not a substitute for a will.

Senior citizens (age 60+) are eligible for higher FD rates as per bank policy; under Section 80TTB of the Income Tax Act, interest income up to ₹50,000 per year is deductible for senior citizens.

CRR is maintained as a percentage of Net Demand and Time Liabilities (NDTL) in cash with RBI; no interest is paid on CRR balances. SLR is held in approved securities (cash, gold, government securities) and earns interest.

Under the RBI (CRR) Directions, 2021, CRR must be maintained at least 90% of the required amount by the first day of the fortnight and 100% on every day of the fortnight.

Cheque truncation under the CTS: the collecting bank captures the cheque image and MICR data; the physical cheque need not move to the paying bank; the image and data are legally admissible under Section 81A of the Negotiable Instruments Act, 1881.

Section 138 of the Negotiable Instruments Act, 1881: dishonour of a cheque for insufficiency of funds is punishable with imprisonment up to 2 years or fine up to twice the cheque amount, or both, provided a 30-day demand notice is served.

Positive Pay System for cheques: for cheques of ₹5 lakh and above, the account holder must furnish details (cheque number, date, payee, amount) to the bank, which is then verified before payment; non-compliance may lead to return of the cheque.

Under the RBI Integrated Ombudsman Scheme, 2021, a complaint must first be made to the regulated entity; if unresolved within 30 days, the customer can approach the RBI Ombudsman online; the Ombudsman must resolve within 30 days of receipt.

Priority Sector Lending (PSL) targets: domestic scheduled commercial banks - 40% of Adjusted Net Bank Credit (ANBC) or credit equivalent of off-balance sheet exposure, whichever is higher; sub-targets include 18% for agriculture, 7.5% for micro enterprises, and 12% for weaker sections.

KYC: for low-risk customers, simplified measures may be applied; for high-risk customers, enhanced due diligence including source of funds and beneficial ownership verification is required; Politically Exposed Persons (PEPs) are always high-risk.

Banking Ombudsman awards: the Ombudsman may award compensation up to ₹2 lakh for loss of time, expenses, and harassment, in addition to the amount involved in the complaint.

EMI formula: EMI = P × r × (1+r)^n / ((1+r)^n − 1), where P = principal, r = monthly interest rate (annual rate/12/100), n = number of monthly instalments.

Fixed vs floating interest: in a fixed-rate loan, the EMI remains constant; in a floating-rate loan, the interest rate resets as per the benchmark (e.g., repo-linked lending rate), and the EMI or tenure adjusts.

Loan-to-Value (LTV) ratios for home loans (RBI): up to ₹30 lakh - 90%; ₹30–75 lakh - 80%; above ₹75 lakh - 75%. LTV is the loan amount divided by the property value.

Credit Information: CIBIL score ranges from 300 to 900; a score of 750+ is generally considered good; the score is based on repayment history, credit utilisation, age of credit, and enquiries.

Debt Service Coverage Ratio (DSCR) = Net Operating Income / Total Debt Service; a DSCR of 1.5 or above is typically preferred for commercial lending.

MSME classification (effective April 2025): Micro - investment in plant & machinery up to ₹2.5 crore and turnover up to ₹10 crore; Small - investment up to ₹25 crore and turnover up to ₹100 crore; Medium - investment up to ₹125 crore and turnover up to ₹500 crore.

Under the SARFAESI Act, 2002, a secured creditor may enforce security interest without court intervention after a 60-day notice to the borrower, provided the loan is classified as a Non-Performing Asset (NPA).

NPA classification: a loan account becomes an NPA when interest or principal is overdue for more than 90 days; sub-standard assets are NPAs for up to 12 months; doubtful assets are NPAs for more than 12 months.

Pradhan Mantri Mudra Yojana: Shishu - loans up to ₹50,000; Kishore - ₹50,001 to ₹5 lakh; Tarun - ₹5 lakh to ₹10 lakh; Tarun Plus - up to ₹20 lakh for those who have repaid Tarun loans.

UPI transaction limit: generally ₹1 lakh per transaction; for specific categories such as capital markets, insurance, and foreign inward remittances, higher limits apply; UPI Lite allows small-value offline transactions up to ₹1,000 per transaction with an overall limit of ₹5,000.

NEFT operates in 24×7 batches with settlement in half-hourly batches; RTGS is for high-value transactions (minimum ₹2 lakh) and operates 24×7 with real-time settlement.

IMPS: available 24×7, maximum limit ₹5 lakh per transaction; uses mobile number and MMID or account number and IFSC.

Aadhaar Enabled Payment System (AePS): allows banking transactions through a Business Correspondent using Aadhaar number and biometric authentication; daily withdrawal limit is ₹10,000 per customer.

Two-factor authentication (2FA) is mandatory for all electronic banking transactions; for card-not-present transactions, the second factor can be a PIN, OTP, or biometric.

Zero liability of a customer in unauthorised electronic banking transactions applies if the fraud is due to bank negligence and reported within 3 working days; limited liability (up to ₹25,000) applies if reported within 4–7 working days.

Digital Lending Guidelines (RBI, 2022): all loan disbursals and repayments must be executed directly between the bank and the borrower; no pass-through accounts; the lending service provider (LSP) must disclose all charges.

CBDC (Digital Rupee) is a legal tender issued by RBI in digital form; it is a sovereign currency, not a cryptocurrency, and is exchangeable with physical currency at par.

Card tokenisation: replacing sensitive card data with a unique token for online transactions; mandatory since October 2022 for all merchants except those exempted by RBI; the token is device-specific.