RBSE Prav Voc BFSI cheat sheet

BFSI stands for Banking, Financial Services and Insurance; its four pillars are banks, NBFCs and other financial institutions, insurance companies, and capital-market intermediaries such as brokers, mutual funds and merchant bankers.

Indian regulators by segment: RBI (banks, NBFCs, payment systems, currency), SEBI (securities markets), IRDAI (insurance), PFRDA (pensions) and IFSCA (GIFT City).

Bank categories include scheduled commercial banks, small finance banks, payments banks, urban and rural cooperative banks, and Regional Rural Banks (RRB Act 1976).

A payments bank may accept deposits up to the per-customer limit set by RBI and issue debit cards, but cannot lend or issue credit cards; a small finance bank must keep at least 75% of advances in priority sector lending.

Typical branch hierarchy: Branch Manager → Operations or Delivery Head → Relationship Managers → Tellers and Clerks → Customer Service Executives; support functions sit in centralised back offices.

Entry routes: 10+2 plus a vocational BFSI course for clerk, business correspondent and sales roles; graduation for probationary officer, insurance advisor and mutual fund distributor roles.

Role-linked credentials: IIBF JAIIB/CAIIB for bank staff, NISM certifications for securities and mutual fund distribution (ARN), IRDAI agent licence for insurance selling.

Non-bank career tracks: credit analyst, insurance surveyor, claims processor, AML/fraud analyst, wealth relationship manager, and BPO/KPO processing roles for banking clients.

Deposit types: savings (interest-bearing, withdrawal limits), current (no interest, meant for businesses), fixed (lump sum for a fixed tenure), recurring (monthly instalments), and NRE/FCNR/NRO for non-residents.

CRR is the share of net demand and time liabilities kept as cash with RBI and earns no interest; SLR is held in cash, gold or approved securities and earns interest.

CASA ratio = (Current account deposits + Savings account deposits) ÷ Total deposits × 100; a higher ratio lowers the cost of funds.

EMI = [P × r × (1+r)^n] ÷ [(1+r)^n − 1], where r = annual interest rate ÷ 12 ÷ 100 and n = tenure in months.

Credit appraisal uses the 5Cs: Character, Capacity, Capital, Collateral and Conditions; retail loans are also scored on bureau data such as CIBIL/ Experian scores.

A loan becomes an NPA when interest or principal is overdue more than 90 days; NPAs are classified substandard (up to 12 months), doubtful (over 12 months) and loss assets.

Domestic scheduled commercial banks must lend 40% of adjusted net bank credit to priority sectors, including 18% to agriculture and 7.5% to micro enterprises.

Repo rate is the rate at which RBI lends to banks against government securities; reverse repo is the rate at which RBI absorbs surplus liquidity from banks.

Security creation modes: pledge (movable goods in possession), hypothecation (movable assets without possession, such as stock or vehicles), mortgage (immovable property) and lien (deposits and securities).

Channels: ATM and cash recycler, POS and QR acceptance, micro-ATM/AePS, internet banking, mobile banking, UPI, USSD *99#, and WhatsApp or API-based banking.

NEFT runs in batches 24x7 with no minimum or maximum amount; RTGS is real-time gross settlement with a minimum of ₹2 lakh; IMPS is instant 24x7 within bank-set limits.

UPI addresses a bank account through a virtual payment address (for example name@bank) and is operated by NPCI, which also runs IMPS, RuPay, AePS and BHIM.

Card features: 16-digit number, expiry, CVV on the reverse, EMV chip, and additional factor authentication through OTP or PIN for online and ATM transactions.

Tokenisation replaces the actual card number with a device- or merchant-specific token, so merchants never store real card credentials.

Card economics: a debit card draws on a deposit account immediately, while a credit card is a revolving loan with an interest-free period of roughly 20–50 days if paid in full.

Mobile banking onboarding uses user ID, MPIN and SIM binding; SIM binding flags SIM-swap fraud because a new SIM breaks the registered device link.

Digital KYC variants: Aadhaar-based e-KYC with UIDAI authentication, OTP-based KYC, and video-KYC for remote customer verification.

Primary market issues new securities (IPO, FPO, rights issue, QIP, private placement) and the proceeds go to the issuer; the secondary market trades already-issued securities on NSE and BSE.

Money market instruments have maturities up to one year: treasury bills (91, 182, 364 days), commercial paper, certificates of deposit, call money, repo and TREPS.

Capital market instruments are long-term: equity shares, preference shares, debentures, bonds and units of mutual funds.

SEBI regulates the securities market under the SEBI Act 1992; an IPO requires filing a draft red herring prospectus (DRHP) and a SEBI-registered merchant banker.

Indices: Sensex covers 30 major BSE stocks and Nifty 50 covers 50 NSE stocks; both are free-float market-capitalisation weighted.

NSDL and CDSL are the two depositories holding securities in electronic form; a demat account plus a trading account with a SEBI-registered broker is needed to buy or sell shares.

A mutual fund pools investor money, is managed by an asset management company under SEBI regulations, and is priced by NAV per unit; categories include equity, debt, hybrid, index and ETFs.

Derivatives are futures and options contracts whose value derives from an underlying asset; they carry margin, position-limit and NISM certification requirements.

Core principles: insurable interest, utmost good faith, indemnity, contribution, subrogation, proximate cause and mitigation of loss.

Life insurance covers the life of a person; general insurance covers property, liability, health and motor risks; IRDAI is the sector regulator under the IRDAI Act 1999.

Term insurance pays the sum assured only on death; endowment pays on maturity or death; a ULIP invests part of the premium in market-linked funds with a lock-in of five years.

Motor third-party liability insurance is compulsory under the Motor Vehicles Act; own-damage cover is optional and usually carries a deductible.

Policy documents to read: proposal form, policy schedule, premium, sum assured or sum insured, deductibles, exclusions, waiting periods, grace period and free-look period (about 30 days).

Claim flow: intimation → document submission → surveyor or investigator assessment for general insurance → settlement or repudiation with written reasons.

Claim settlement ratio = claims paid ÷ claims reported × 100; it is a commonly used, though incomplete, indicator of an insurer's claims performance.

Nomination names the person who receives the policy money on the policyholder's death; assignment transfers the rights of the policy to another person or entity.

Reinsurance is insurance bought by an insurer to transfer part of its risk; GIC Re is India's national reinsurer.

Accounting equation: Assets = Liabilities + Capital; every transaction must keep this equation balanced.

Double entry: each transaction has equal debits and credits; debit increases assets and expenses, credit increases liabilities, capital and income.

Bookkeeping sequence: journal (first entry) → ledger (accounts classified) → trial balance (total debits = total credits) → profit and loss account → balance sheet.

Profit = Revenue − Expenses over a period; the balance sheet lists assets, liabilities and capital on a specific date.

Depreciation: straight line = (Cost − Salvage value) ÷ Useful life; written-down value = fixed percentage applied to the opening book value each year.

Simple interest = P × R × T ÷ 100; compound interest amount = P (1 + R/100)^T, so interest is earned on interest.

Accrual accounting records income when earned and expenses when incurred; cash accounting records them only when money actually moves.

Ratios: current ratio = current assets ÷ current liabilities; gross NPA ratio = gross NPAs ÷ gross advances; return on assets = net profit ÷ total assets.

Financial literacy basics: PAN for tax identity, Aadhaar for identity, TDS deducted at source on specified payments, and GST on most goods and services.

Service quality is measured on RATER: Reliability, Assurance, Tangibles, Empathy and Responsiveness.

Sales funnel: prospecting → lead qualification → needs analysis → product presentation → objection handling → closing → post-sale service and referral.

Needs analysis inputs: KYC profile, income and risk appetite, life stage, existing product holdings and questioning techniques such as SPIN (Situation, Problem, Implication, Need-payoff).

Cross-sell means an additional related product to an existing customer; up-sell means a higher-value variant of the same product; products-per-customer tracks both.

CRM systems record every interaction, complaint and preference, creating a single customer view used for retention and targeted offers.

Complaint handling: acknowledge, log with a ticket number, resolve within the bank's turnaround time; if unresolved or unanswered within 30 days, the customer can approach the RBI Ombudsman under RB-IOS 2021.

Retail segmentation bases: income and affluence, occupation, age, geography, and product usage such as CASA, loans or wealth.

Churn rate = customers lost during the period ÷ customers at the start of the period × 100; relationship pricing bundles accounts, cards and loans to reduce churn.

Key statutes: RBI Act 1934, Banking Regulation Act 1949, SEBI Act 1992, IRDAI Act 1999, FEMA 1999, PMLA 2002, IT Act 2000 and Companies Act 2013.

KYC means Customer Due Diligence: identify the customer, verify identity and address, understand the purpose of the account, and update records periodically based on risk.

Enhanced Due Diligence applies to high-risk customers such as politically exposed persons, non-face-to-face accounts and customers from high-risk jurisdictions; PEP accounts need senior management approval.

Reporting duties: cash transactions of ₹10 lakh or more in a month are reported to FIU-IND through CTRs, while suspicious transactions are reported through STRs irrespective of amount.

FATF sets global anti-money-laundering standards; UNSC sanctions lists and the RBI caution list require banks to freeze or deny transactions.

Reserve Bank – Integrated Ombudsman Scheme 2021 covers deposit, loan, card, payment and remittance complaints; the customer must first complain to the regulated entity.

Ethical duties include avoiding conflicts of interest, preventing mis-selling, protecting customer confidentiality, ensuring suitability of advice, and supporting whistle-blowing.

Cyber fraud types: phishing (email), vishing (phone), smishing (SMS), pharming, SIM swap, OTP theft and QR-code fraud; financial cyber fraud should be reported on helpline 1930 or cybercrime.gov.in immediately.

Employability skills for BFSI: communication, teamwork, problem-solving, numeracy, digital literacy, time management, adaptability and customer orientation.

The 7Cs of communication: clear, concise, concrete, correct, coherent, complete and courteous.

A resume carries contact details, objective, education, skills, projects or experience and references, usually in one or two pages, with no unverifiable claims.

STAR method for interviews: describe the Situation, Task, Action taken and Result achieved to give evidence of a competence in under two minutes.

Entrepreneurship path: idea → market research → business plan (product, market, operations, finance) → funding → registration → launch → review.

MUDRA loans: Shishu up to ₹50,000, Kishor ₹50,001 to ₹5 lakh, Tarun above ₹5 lakh up to ₹10 lakh; MSMEs register free on the Udyam portal.

Startup India offers DPIIT recognition with benefits available up to 10 years from incorporation and turnover up to ₹100 crore, subject to conditions.

Work-integrated practice: NAPS/NATS apprenticeships combine on-the-job training with a stipend, and a written contract plus PF/ESI applies to eligible employees.