General Awareness: Banking, Economy and Current Affairs
General Awareness
The General Awareness section tests banking and financial awareness first (RBI policy, banking terminology, reforms, institutions), then current affairs of roughly the last six months, and static banking/economic facts. Questions are recall-based and fast.
Core rules and concepts
- Policy corridor: the repo rate is RBI's lending rate to banks against government securities; MSF is the ceiling above it. The Standing Deposit Facility (SDF), introduced in April 2022, is the collateral-free absorption tool that sets the floor.
- Reserves: CRR is a cash balance held with RBI that earns no interest; SLR is held in cash, gold or approved securities and earns interest.
- MPC: six members - three from RBI (Governor as chair, Deputy Governor in charge of monetary policy, one RBI officer) and three external members appointed by the Central Government for four years. Inflation target: 4% with a ±2% band.
- NPA: a loan turns non-performing when dues are overdue more than 90 days. SMA-0 is 1–30 days, SMA-1 31–60, SMA-2 61–90.
- Capital and deposits: minimum CRAR 9% plus a 2.5% capital conservation buffer (11.5% total); DICGC insures deposits up to ₹5 lakh per depositor per bank.
- PSL: 40% of adjusted net bank credit, with 18% for agriculture and 12% for weaker sections.
Worked example
A bank reports CET1 ₹90 crore, Additional Tier 1 ₹15 crore, Tier 2 ₹20 crore and risk-weighted assets ₹1,000 crore. Total capital = 90 + 15 + 20 = ₹125 crore, so CRAR = 125/1,000 = 12.5%. Against the 11.5% requirement including the conservation buffer, the bank has a 1% cushion: compliant, not deficient.
Traps that cost marks
- Confusing SDF with reverse repo, or claiming CRR earns interest.
- Writing 180 days for NPA classification instead of 90.
- Mixing up bank rate (aligned with MSF) and repo.
- Choosing a near-correct institution: NABARD is agriculture/rural, SIDBI is MSME, EXIM is trade.