General / Banking Awareness
What is tested
General/Banking Awareness covers the RBI, monetary policy, cooperative banking, financial inclusion, payment systems, banking products, regulators and recent schemes. MSC Bank is a cooperative institution, so the structure of cooperative credit is especially relevant.
Core facts
- RBI was established in 1935 under the RBI Act, 1934, and nationalised in 1949.
- Monetary policy tools include repo rate, reverse repo, marginal standing facility, CRR, SLR and open market operations.
- CRR is kept as cash with the RBI; SLR is held in approved securities and gold.
- Cooperative banks have a three-tier structure: PACS at village level, DCCBs at district level and StCBs at state level. NABARD is their refinance and supervisory institution.
- DICGC insures deposits up to ₹5 lakh per depositor per bank.
- NEFT, RTGS, IMPS and UPI are payment systems; RTGS is for high-value, real-time settlement.
Worked example
A bank's net demand and time liabilities are ₹2,000 crore and CRR is 4.5%. Required cash reserve = 2,000 × 4.5/100 = ₹90 crore. If CRR rises to 5%, the requirement becomes ₹100 crore, reducing lendable funds by ₹10 crore. CRR is a percentage of NDTL, not of total deposits or capital.
Traps
Confusing repo, where RBI lends to banks, with reverse repo, where RBI absorbs liquidity; mixing CRR with SLR; and assuming DICGC cover applies per branch. Do not confuse NABARD with SIDBI or EXIM Bank.