Part V — General Awareness & Banking

Chapter 5: Static GK, Current Affairs & Banking Awareness

5.1 Static General Knowledge

Static GK covers Indian history, polity, geography, and general science at a level consistent with other Tier-1 government exams: major dynasties and freedom-movement milestones, the structure of the Constitution and its key articles/schedules, physical and economic geography of India, and basic science concepts relevant to daily life.

5.2 Banking Awareness — History and Structure

The Reserve Bank of India (RBI) was established on 1 April 1935 under the Reserve Bank of India Act, 1934, and was nationalised in 1949. It functions as India's central bank, responsible for monetary policy, currency issuance, banking regulation, and foreign exchange management. As of August 2026, the Governor of the RBI is Sanjay Malhotra.

India's banking structure includes the RBI (central bank), Scheduled Commercial Banks (public sector, private sector, foreign banks, regional rural banks), Cooperative Banks, and specialised institutions such as NABARD (agriculture and rural development), SIDBI (small industries), and EXIM Bank (export-import finance).

5.3 Monetary Policy Tools

The RBI's Monetary Policy Committee (MPC) sets the repo rate — the rate at which the RBI lends short-term funds to commercial banks — as its primary policy tool. As of August 2026, the repo rate stands at 5.25%. Related tools include the reverse repo rate (rate at which banks park funds with the RBI), Cash Reserve Ratio (CRR) (the fraction of deposits banks must hold as reserves with the RBI), and Statutory Liquidity Ratio (SLR) (the fraction of deposits banks must hold in approved liquid assets).

5.4 Banking Instruments and Concepts

Key terms frequently tested include NPA (Non-Performing Asset) — a loan on which interest or principal repayment is overdue beyond a specified period; NEFT, RTGS, and IMPS — electronic fund transfer systems differing in settlement speed and minimum/maximum transaction limits; KYC (Know Your Customer) — the process banks use to verify customer identity; and CIBIL score — a numeric credit-history rating used by lenders to assess creditworthiness.

5.5 Financial Inclusion Schemes

Government/RBI financial-inclusion initiatives include the Pradhan Mantri Jan Dhan Yojana (PMJDY) (basic zero-balance bank accounts), the Direct Benefit Transfer (DBT) scheme, and the Unified Payments Interface (UPI), developed by the National Payments Corporation of India (NPCI), which enables real-time interbank mobile-based transactions.

5.6 Practice Set — General Awareness & Banking (20 MCQs)

1. The Reserve Bank of India was established on:
   (a) 1 April 1935 (b) 15 August 1947 (c) 26 January 1950 (d) 1 April 1949
2. As of August 2026, the Governor of the RBI is:
   (a) Shaktikanta Das (b) Sanjay Malhotra (c) Urjit Patel (d) Raghuram Rajan
3. The RBI was nationalised in:
   (a) 1935 (b) 1947 (c) 1949 (d) 1969
4. The body responsible for setting the repo rate is the:
   (a) Monetary Policy Committee (MPC) (b) Union Cabinet (c) SEBI (d) NITI Aayog
5. As of August 2026, the repo rate stands at:
   (a) 4.00% (b) 5.25% (c) 6.50% (d) 7.25%
6. The "repo rate" refers to:
   (a) The rate at which the RBI lends short-term funds to commercial banks (b) The rate banks charge customers on savings accounts (c) The tax rate on banking profits (d) The exchange rate against the US Dollar
7. NABARD primarily supports:
   (a) Urban infrastructure (b) Agriculture and rural development (c) Foreign trade financing (d) Stock market regulation
8. SIDBI is primarily concerned with financing:
   (a) Small-scale industries (b) Large corporations only (c) Foreign governments (d) Agricultural exports only
9. CRR (Cash Reserve Ratio) refers to:
   (a) The fraction of deposits banks must hold as reserves with the RBI (b) The interest rate on home loans (c) The tax on cash withdrawals (d) The minimum balance in a savings account
10. An NPA (Non-Performing Asset) is:
    (a) A fully repaid loan (b) A loan on which repayment is overdue beyond a specified period (c) A type of fixed deposit (d) A government bond
11. Among NEFT, RTGS, and IMPS, which offers real-time, 24x7 fund transfer for smaller amounts typically initiated via mobile?
    (a) NEFT (b) RTGS (c) IMPS (d) SLR
12. KYC stands for:
    (a) Know Your Customer (b) Keep Your Cash (c) Know Your Credit (d) Keep Your Certificate
13. A CIBIL score is used primarily to assess:
    (a) A customer's creditworthiness (b) A bank's profitability (c) The RBI's foreign reserves (d) Stock market volatility
14. The Pradhan Mantri Jan Dhan Yojana (PMJDY) primarily aims to:
    (a) Provide zero-balance bank accounts for financial inclusion (b) Fund large infrastructure projects (c) Regulate foreign exchange (d) Set the repo rate
15. UPI (Unified Payments Interface) was developed by:
    (a) RBI directly (b) The National Payments Corporation of India (NPCI) (c) SEBI (d) The Ministry of Finance directly
16. SLR (Statutory Liquidity Ratio) requires banks to maintain a fraction of deposits in:
    (a) Approved liquid assets (b) Foreign currency only (c) Gold reserves only (d) Cash in hand only
17. The Constitution of India came into effect on:
    (a) 15 August 1947 (b) 26 January 1950 (c) 26 November 1949 (d) 2 October 1950
18. As of August 2026, the President of India is:
    (a) Ram Nath Kovind (b) Droupadi Murmu (c) Pratibha Patil (d) A.P.J. Abdul Kalam
19. As of August 2026, the Prime Minister of India is:
    (a) Rahul Gandhi (b) Narendra Modi (c) Manmohan Singh (d) Amit Shah
20. The Reverse Repo Rate refers to:
    (a) The rate at which banks park surplus funds with the RBI (b) The rate the RBI charges on gold loans (c) The tax on foreign remittances (d) The minimum wage rate

Answer Key

1.(a)

2.(b)

3.(c)

4.(a)

5.(b)

6.(a)

7.(b)

8.(a)

9.(a)

10.(b)

11.(c)

12.(a)

13.(a)

14.(a)

15.(b)

16.(a)

17.(b)

18.(b)

19.(b) 20.(a)