NISM Banking & SSC, Banking Awareness. Updated Jun 2026, 14-minute read.

Banking Awareness for IBPS PO/Clerk — Complete Topic Guide

Banking Awareness accounts for 40 marks in IBPS PO Mains. This is the most differentiating section — most candidates ignore it until 2 weeks before the exam. With 3 months of systematic preparation, you can score 35+ out of 40 consistently.

Key takeaways

RBI is India's central bank — established April 1, 1935, nationalised January 1, 1949, headquarters Mumbai
Repo Rate: rate at which RBI lends to banks (policy rate); as of 2025, RBI has cut repo rate to 6.25%
CRR (Cash Reserve Ratio): % of deposits banks must maintain as cash with RBI — currently 4%
SLR (Statutory Liquidity Ratio): % banks must maintain in G-Secs/gold — currently 18%
NABARD: National Bank for Agriculture and Rural Development — apex body for rural credit
SIDBI: Small Industries Development Bank of India — for MSME financing
Priority Sector Lending: banks must lend 40% of ANBC to priority sectors (agri, MSME, housing)

RBI — Structure and Functions

The Reserve Bank of India (RBI) was established on April 1, 1935 under the Reserve Bank of India Act, 1934. It was nationalised on January 1, 1949. Headquarters: Fort, Mumbai. The Governor is appointed by the Central Government for a 4-year term.

RBI's Key Functions

Monetary Authority: Formulates and implements monetary policy. Uses repo rate, reverse repo, CRR, SLR, and OMO as tools.
Currency Issuer: Issues all currency notes except ₹1 notes (issued by Ministry of Finance). Manages currency supply.
Banker to Banks: Maintains CRR deposits, provides liquidity through Repo, acts as lender of last resort.
Banker to Government: Manages government borrowing program (G-Sec issuance), maintains government accounts.
Regulator of Banks: Licenses, inspects, and regulates commercial banks, cooperative banks, RRBs, NBFCs, and payment banks.
Foreign Exchange Manager: Manages India's forex reserves, implements FEMA regulations, intervenes in INR markets.

Monetary Policy Tools

Tool	Definition	Current Rate (2025)	Effect of Increase
Repo Rate	Rate at which RBI lends overnight to banks (against G-Secs)	6.25%	Borrowing costly → credit shrinks → inflation controlled
Reverse Repo Rate	Rate at which RBI borrows from banks overnight	3.35% (fixed)	Banks park more with RBI → less money in system
CRR	% of NDTL (Net Demand and Time Liabilities) banks must keep as cash with RBI	4%	Less money with banks → credit contraction
SLR	% of NDTL banks must maintain in G-Secs, gold, or approved securities	18%	More forced G-Sec investment → less for credit
MSF (Marginal Standing Facility)	Emergency overnight borrowing by banks at Repo+0.25%	6.50%	Safety valve for sudden liquidity need
Bank Rate	Rate for longer-term borrowing; penal rate for CRR shortfall	6.75%	Signals long-term rate stance

Types of Banks

Commercial Banks: Public Sector (SBI, PNB, BOB...), Private Sector (HDFC, ICICI, Axis...), Foreign Banks (Citi, HSBC)
Regional Rural Banks (RRBs): 43 RRBs serving rural areas, jointly owned by Central Govt/State Govt/Sponsor Bank
Small Finance Banks (SFBs): AU, Equitas, ESAF, Fincare etc. — focus on underserved segments
Payment Banks: Airtel, Jio, India Post — can accept deposits up to ₹2 lakh but cannot lend
Cooperative Banks: Urban Cooperative Banks (UCBs) and State Cooperative Banks
Development Finance Institutions: NABARD (agriculture), SIDBI (MSME), NHB (housing), EXIM Bank (trade)

Financial Inclusion Schemes

PMJDY (PM Jan Dhan Yojana): Zero-balance savings account for unbanked. Launched Aug 28, 2014. 50 crore+ accounts opened. Includes RuPay debit card with ₹2 lakh accident insurance.
PMSBY (PM Suraksha Bima Yojana): ₹2 lakh accident insurance at ₹20/year premium.
PMJJBY (PM Jeevan Jyoti Bima Yojana): ₹2 lakh life insurance at ₹436/year.
Atal Pension Yojana: Government-co-contributed pension for unorganised sector workers.
Mudra Yojana: Loans up to ₹10 lakh for micro-entrepreneurs (Shishu/Kishor/Tarun tiers).
Stand Up India: Loans ₹10 lakh–₹1 crore for SC/ST/Women entrepreneurs.

Priority Sector Lending (PSL)

RBI mandates banks lend a minimum % of their Adjusted Net Bank Credit (ANBC) to priority sectors:

Total PSL: 40% of ANBC (domestic banks), 40% for foreign banks with 20+ branches
Agriculture: 18% of ANBC (of which 10% to small/marginal farmers)
Weaker Sections: 12% of ANBC
MSME: No specific sub-limit (part of overall 40%)

Frequently asked questions

What is the difference between CRR and SLR?

CRR (Cash Reserve Ratio) must be maintained as actual cash deposited with RBI — it earns no interest and cannot be used for lending. SLR (Statutory Liquidity Ratio) must be maintained in liquid assets like G-Secs, gold, or approved securities — banks can earn interest on these holdings.

Which banking schemes are most important for IBPS PO 2025?

Focus on: PMJDY (current stats — 50 crore accounts), RBI's recent rate changes (repo rate cuts in 2025), new digital payment systems (UPI One World, CBDC — Digital Rupee), and government schemes launched in Union Budget 2025. These are the most frequently tested in current affairs banking section.

Written by Arpan Das.

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