General Awareness: Indian Economy, Banking and Infrastructure Finance
What the section covers
General Awareness in IIFCL Grade A is not a trivia quiz; it checks whether you can place Indian macro policy, banking regulation and infrastructure financing in the same frame. Expect questions on GDP and inflation, RBI policy tools, priority-sector lending, NPAs and resolution, government infrastructure programmes, and the role of specialised institutions such as IIFCL.
Core rules and institutions
- Macro: real GDP measures output at constant prices; CPI is the RBI's flexible inflation-targeting anchor, with a target of 4% and a tolerance band of 2-6%. The MPC sets the repo rate; CRR and SLR are reserve requirements, not policy rates.
- Banking: Basel III in India requires minimum CET1 of 5.5%, Tier 1 of 7% and total CRAR of 9%, plus a capital conservation buffer of 2.5%. Priority-sector target is 40% of adjusted net bank credit; weak PSL performance can lead to RIDF deposits.
- Infrastructure: NIP, PM Gati Shakti and NMP are complementary-project pipeline, coordinated execution and monetisation. InvITs/REITs recycle capital; TOT and HAM allocate traffic and construction risk differently. IIFCL provides long-term debt, takeout finance and credit enhancement to infra projects.
Worked example
A bank has ANBC of ₹10,000 crore and PSL lending of ₹3,600 crore. Target is 40% × ₹10,000 crore = ₹4,000 crore. Shortfall = ₹400 crore. The bank must review eligible categories-agriculture, MSME, education, housing, renewable energy-rather than count all infrastructure lending as PSL.
Traps that cost marks
Do not confuse repo with reverse repo, CRR with SLR, or nominal GDP with real GDP. In PSL, 'adjusting' ANBC matters. In infrastructure, do not treat every PPP as BOT; HAM, TOT and InvIT have different cash-flow and risk profiles.