RBI (Reserve Bank of India) is India's central bank that controls monetary policy. Commercial Banks accept deposits and give loans. NBFCs (Non-Banking Financial Companies) provide financial services but cannot accept demand deposits
💡KEY RULES AND STRUCTURE
RBI acts as the banker's bank and government's banker. It issues currency, controls money supply, and regulates all banks. Commercial banks operate under RBI's supervision with minimum capital requirements. NBFCs need RBI registration but have different rules than banks.
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Formula Block
Memorise — at least one formula appears in every paper
Cash Reserve Ratio (CRR) = (Cash with RBI / Net Demand and Time Liabilities) × 100
Statutory Liquidity Ratio (SLR) = (Liquid Assets / Net Demand and Time Liabilities) × 100
Base Rate = Cost of Funds + Operating Costs + Minimum Return + Risk Premium
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Exam Patterns
What examiners ask — read before attempting PYQs
SSC CGL frequently asks about RBI governors, establishment dates, headquarters, and current rates. Questions on banking licenses, NBFC categories, and recent policy changes appear regularly. Numerical problems on CRR/SLR calculations are common.
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Shortcuts
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💡Remember 'CHIMES' for RBI functions
Currency issue, Holds government accounts, Issues licenses, Monetary policy, Exchange rate management, Supervision of banks
The #1 trap students fall into is confusing NBFC powers with bank powers
💡Remember
NBFCs CANNOT accept demand deposits (current/savings accounts), issue cheques, or be part of payment systems. They can only take term deposits above ₹1 lakh with minimum 12-month maturity. Many students incorrectly think NBFCs can do everything banks can do
⚡CURRENT RATES TRICK
For quick memorization, remember that CRR is usually lower than SLR. CRR affects immediate liquidity while SLR ensures long-term security. Repo rate is the rate at which RBI lends to banks, while reverse repo is when RBI borrows from banks.
What is the Cash Reserve Ratio (CRR) primarily used for by the RBI?
Practice 2easy
What is the Cash Reserve Ratio (CRR) that commercial banks must maintain with the RBI?
Practice 3easy
Which of the following is NOT a function of Non-Banking Financial Companies (NBFCs) in India?
Practice 4easy
Which of the following is the primary function of the Reserve Bank of India (RBI)?
Practice 5easy
Which of the following best describes the difference between a Bank and a Non-Banking Financial Company (NBFC)?
Practice 6easy
Which of the following is the primary function of the Reserve Bank of India (RBI)?
Practice 7easy
What is the Pradhan Mantri Jan Dhan Yojana (PMJDY) primarily designed to achieve?
Practice 8easy
What is the primary purpose of the Statutory Liquidity Ratio (SLR) requirement imposed by the RBI on banks?
Practice 9easy
Which of the following is the primary objective of the Pradhan Mantri Jan Dhan Yojana (PMJDY)?
Practice 10easy
Under which ministry is the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme implemented?
Practice 11easy
Under which ministry is the Pradhan Mantri MUDRA Yojana (PMMY) implemented?
Practice 12easy
Which ministry is responsible for the implementation of the Pradhan Mantri Kisan Samman Nidhi (PM-KISAN) scheme?
Practice 13easy
The Pradhan Mantri MUDRA Yojana was launched in which year?
Practice 14easy
Which of the following is the primary function of the Reverse Repo Rate set by the RBI?
Practice 15medium
In the context of RBI's monetary policy, the Reverse Repo Rate is best described as:
Practice 16medium
Which of the following is NOT a function of the Reserve Bank of India (RBI)?
Practice 17medium
Which of the following is the primary function of the Statutory Liquidity Ratio (SLR) as mandated by the Reserve Bank of India?
Practice 18medium
Which of the following is the primary objective of the Pradhan Mantri Jan Dhan Yojana (PMJDY)?
Practice 19medium
The Pradhan Mantri MUDRA Yojana was launched to provide collateral-free loans to which sector?
Practice 20medium
As per RBI guidelines, the Cash Reserve Ratio (CRR) is the percentage of deposits that commercial banks must maintain as reserves with the RBI. Which of the following best describes the purpose of CRR?
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