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
Use these to save 30–60 seconds per question
💡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.