Banking Awareness 2026: Essential Topics for IBPS, SBI and RBI Exams

Banking Awareness is one of the most scoring yet underestimated sections in competitive exams. Whether you are preparing for IBPS PO, SBI PO, RBI Grade B, LIC Assistant, or any banking recruitment, this section can give you 15 to 25 easy marks if you have prepared systematically. Unlike Quantitative Aptitude or Reasoning, banking awareness questions are fact-based -- you either know the answer or you do not. This guide compiles every essential banking topic you need for 2026 exams, organised by theme for efficient revision.

Reserve Bank of India -- The Foundation

The RBI is the most heavily tested topic in banking awareness. Every exam asks at least 5 to 10 questions directly or indirectly related to RBI.

Key Facts About RBI

• Established: 1st April 1935 under the RBI Act, 1934
• Nationalised: 1st January 1949
• Headquarters: Mumbai (originally Kolkata, moved to Mumbai in 1937)
• Current Governor: Sanjay Malhotra (as of 2025; verify for latest updates)
• Preamble: "To regulate the issue of Bank Notes and keeping of reserves with a view to securing monetary stability in India and generally to operate the currency and credit system of the country to its advantage."

Functions of RBI

1. Monetary Authority: Formulates and implements monetary policy through the Monetary Policy Committee (MPC). Key tools include Repo Rate, Reverse Repo Rate, Bank Rate, CRR, SLR, and Open Market Operations.
2. Regulator and Supervisor of Financial System: Regulates and supervises commercial banks, cooperative banks, NBFCs, and payment systems to maintain public confidence.
3. Issuer of Currency: RBI has the sole authority to issue banknotes in India (except Re. 1 note, which is issued by the Ministry of Finance). Notes are printed at four presses: Dewas, Nasik, Mysore, and Salboni.
4. Manager of Foreign Exchange: Manages forex reserves and regulates foreign exchange transactions under FEMA (Foreign Exchange Management Act, 1999).
5. Banker to the Government: Manages government securities, handles public debt, and acts as banker for both Central and State governments.
6. Banker's Bank: Acts as lender of last resort, maintains CRR deposits, and facilitates interbank settlements.
7. Developmental Role: Promotes financial inclusion, priority sector lending, microfinance, and rural credit through institutions like NABARD.

Monetary Policy Tools -- A Complete Reference

Quantitative (General) Tools

Tool	Definition	Current Rate (Verify Latest)
Repo Rate	Rate at which RBI lends short-term money to commercial banks against government securities	6.25% (as of Feb 2025)
Reverse Repo Rate	Rate at which RBI borrows money from commercial banks (now replaced largely by SDF)	3.35%
Standing Deposit Facility (SDF)	Rate at which RBI absorbs liquidity without collateral; now the floor of LAF corridor	6.00%
Marginal Standing Facility (MSF)	Rate at which banks can borrow overnight from RBI above the repo rate; ceiling of LAF corridor	6.50%
Bank Rate	Rate at which RBI provides long-term funds to banks; penal rate for shortfall in CRR/SLR	6.50%
CRR (Cash Reserve Ratio)	Percentage of NDTL that banks must maintain as cash with RBI. No interest earned.	4.00%
SLR (Statutory Liquidity Ratio)	Percentage of NDTL that banks must maintain in liquid assets (gold, government securities, cash)	18.00%

Important Note: The LAF (Liquidity Adjustment Facility) corridor now operates between SDF (floor) and MSF (ceiling), with Repo Rate in the middle. This replaced the earlier Reverse Repo to MSF corridor.

Qualitative (Selective) Tools

• Moral Suasion: RBI persuades banks through informal communication to follow certain lending practices.
• Direct Action: Penalties, licence cancellation, or restrictions imposed on non-compliant banks.
• Margin Requirements: RBI can change the margin that borrowers must maintain for secured loans to control speculative lending.
• Rationing of Credit: Setting ceiling on credit for specific sectors.

Banking Structure in India

Types of Banks

• Scheduled Commercial Banks: Listed in the Second Schedule of the RBI Act. Includes Public Sector Banks (12 after mergers), Private Sector Banks, Foreign Banks, Small Finance Banks, Payments Banks, and Regional Rural Banks.
• Cooperative Banks: State Cooperative Banks, District Central Cooperative Banks, Primary Agricultural Credit Societies (PACS), Urban Cooperative Banks.
• Development Banks: NABARD, SIDBI, NHB, EXIM Bank, MUDRA.

Important Post-Merger Banking Facts

After the 2020 merger wave, India has 12 public sector banks:

1. State Bank of India
2. Bank of Baroda (merged with Dena Bank and Vijaya Bank)
3. Punjab National Bank (merged with Oriental Bank of Commerce and United Bank of India)
4. Canara Bank (merged with Syndicate Bank)
5. Union Bank of India (merged with Andhra Bank and Corporation Bank)
6. Indian Bank (merged with Allahabad Bank)
7. Bank of India
8. Central Bank of India
9. Indian Overseas Bank
10. UCO Bank
11. Bank of Maharashtra
12. Punjab and Sind Bank

Types of Bank Accounts

Account Type	Key Features	Interest
Savings Account	For individuals, minimum balance varies, limited withdrawals	Yes (typically 2.7% to 4%)
Current Account	For businesses, no limit on transactions, no minimum balance in some variants	No interest
Fixed Deposit (FD)	Lump sum for a fixed tenure, premature withdrawal allowed with penalty	Yes (higher than savings)
Recurring Deposit (RD)	Monthly fixed deposits for a set tenure, builds savings discipline	Yes (similar to FD rates)

Payment and Settlement Systems

This is an increasingly important topic as digital payments grow rapidly in India.

• RTGS (Real Time Gross Settlement): For high-value transactions (minimum Rs. 2 lakh). Settled individually in real time. Available 24x7 since December 2020.
• NEFT (National Electronic Funds Transfer): No minimum or maximum limit. Settled in half-hourly batches. Available 24x7 since December 2019.
• IMPS (Immediate Payment Service): Operated by NPCI. Instant transfer up to Rs. 5 lakh. Available 24x7 through mobile and internet banking.
• UPI (Unified Payments Interface): Developed by NPCI. Allows instant fund transfer using Virtual Payment Address (VPA). Transaction limit: Rs. 1 lakh (Rs. 2 lakh for certain categories).
• NACH (National Automated Clearing House): For bulk and repetitive transactions like EMI, salary credits, pension, dividends.
• CTS (Cheque Truncation System): Electronic clearing of cheques using images instead of physical movement.

Financial Inclusion Schemes

• Pradhan Mantri Jan Dhan Yojana (PMJDY): Launched 28 August 2014. Zero balance accounts with RuPay debit card, Rs. 2 lakh accident insurance, Rs. 30,000 life insurance, overdraft facility up to Rs. 10,000.
• Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY): Life insurance of Rs. 2 lakh at Rs. 436 per year for age 18-50.
• Pradhan Mantri Suraksha Bima Yojana (PMSBY): Accident insurance of Rs. 2 lakh at Rs. 20 per year for age 18-70.
• Atal Pension Yojana (APY): Guaranteed pension of Rs. 1,000 to Rs. 5,000 per month after age 60 for unorganised sector workers.
• Stand-Up India: Loans from Rs. 10 lakh to Rs. 1 crore for SC/ST and women entrepreneurs for setting up greenfield enterprises.
• MUDRA Loans: Shishu (up to Rs. 50,000), Kishore (Rs. 50,000 to Rs. 5 lakh), Tarun (Rs. 5 lakh to Rs. 10 lakh) for micro enterprises.

NPA Classification and Recovery

Non-Performing Assets are a critical topic for all banking exams:

• Standard Asset: Loan performing normally, payments on time.
• Sub-Standard Asset: NPA for a period not exceeding 12 months.
• Doubtful Asset: Remained NPA for more than 12 months.
• Loss Asset: Identified as uncollectable by the bank or auditor.

Recovery Mechanisms: SARFAESI Act 2002 (allows banks to recover loans without court intervention for secured loans above Rs. 1 lakh), DRT (Debt Recovery Tribunal for loans above Rs. 20 lakh), Lok Adalat (for loans up to Rs. 20 lakh), IBC 2016 (corporate insolvency resolution through NCLT).

Basel Norms

Framework	Focus Area	Key Requirement
Basel I (1988)	Credit Risk	Minimum Capital Adequacy Ratio of 8%
Basel II (2004)	Three Pillars: Minimum Capital, Supervisory Review, Market Discipline	CAR of 8% with risk-weighted assets
Basel III (2010)	Stricter capital, liquidity, and leverage requirements	CAR of 10.5% (India: 11.5% for D-SIBs), LCR, NSFR, Leverage Ratio

Priority Sector Lending

Banks must lend 40% of Adjusted Net Bank Credit (ANBC) to priority sectors:

• Agriculture: 18% of ANBC
• Micro, Small and Medium Enterprises
• Education loans
• Housing loans (up to specified limits)
• Social infrastructure and renewable energy
• Weaker sections: 12% of ANBC

Practice MCQs: Banking Awareness

Q1. Which organisation manages the UPI platform in India?

1. RBI
2. NPCI
3. SEBI
4. Ministry of Finance

Answer: (b) The National Payments Corporation of India (NPCI) developed and manages UPI. NPCI was established in 2008 by RBI and IBA (Indian Banks' Association).

Q2. A loan becomes NPA if interest or instalment remains unpaid for more than how many days?

1. 30 days
2. 60 days
3. 90 days
4. 120 days

Answer: (c) A loan is classified as NPA if interest or principal payment remains overdue for more than 90 days. For agricultural loans, the period is based on crop seasons.

Q3. The minimum transaction amount for RTGS is:

1. Rs. 1 lakh
2. Rs. 2 lakh
3. Rs. 5 lakh
4. No minimum limit

Answer: (b) RTGS has a minimum threshold of Rs. 2 lakh. There is no upper limit. RTGS is available 24x7 since December 2020.

Q4. How many public sector banks are there in India after the 2020 mergers?

1. 10
2. 12
3. 14
4. 18

Answer: (b) After the mega-merger that came into effect on 1 April 2020, India has 12 public sector banks, down from 27 in 2017.

Q5. Under PMJDY, the accident insurance cover provided with the RuPay debit card is:

1. Rs. 1 lakh
2. Rs. 2 lakh
3. Rs. 5 lakh
4. Rs. 50,000

Answer: (b) PMJDY accounts come with a RuPay debit card that provides accidental insurance cover of Rs. 2 lakh (enhanced from Rs. 1 lakh for cards issued after 28 August 2018).

Your Banking Awareness Revision Strategy

Banking awareness is a high-return, low-effort section if you revise systematically. Bookmark this guide and revisit it every week during your exam preparation. Supplement this with monthly current affairs updates on banking policies, RBI circulars, and government scheme modifications. For daily banking awareness updates, exam notifications, and curated study resources, visit JobSafal at www.jobsafal.com and stay ahead in your competitive exam preparation.