RBI Grade B Formula Sheet
Ten formulas, what each one is for, and a worked example.
RBI Grade B Phase II is where the formulas get specific: Economic & Social Issues needs macroeconomic measures, and Finance & Management needs financial arithmetic. Phase I quant uses the usual bank-exam arithmetic.
These ten are the economics and finance formulas worth knowing for Phase II, with a worked GDP deflator example.
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The 10 Formulas
1
Formula
GDP (expenditure method)
Expression
GDP = C + I + G + (X − M)
Use it for
Components of national income.
2
Formula
GDP deflator
Expression
Nominal GDP ÷ Real GDP × 100
Use it for
Economy-wide price level.
3
Formula
Inflation rate
Expression
(CPIₜ − CPIₜ₋₁) ÷ CPIₜ₋₁ × 100
Use it for
Headline inflation from the CPI.
4
Formula
Real interest rate
Expression
(1 + Nominal) ÷ (1 + Inflation) − 1
Use it for
Return after inflation; approximately nominal − inflation.
5
Formula
Money multiplier (simple)
Expression
1 ÷ Reserve ratio
Use it for
How much money supply a unit of reserve money supports.
6
Formula
Fiscal deficit
Expression
Total expenditure − (Revenue receipts + Non-debt capital receipts)
Use it for
Government's borrowing requirement.
7
Formula
Primary deficit
Expression
Fiscal deficit − Interest payments
Use it for
Deficit excluding past debt costs.
8
Formula
NPV
Expression
Σ CFₜ ÷ (1 + r)ᵗ − Initial investment
Use it for
Project appraisal in Finance.
9
Formula
Capital adequacy ratio
Expression
Capital ÷ Risk-weighted assets × 100
Use it for
Basel III bank regulation.
10
Formula
Growth rate (CAGR)
Expression
(End value ÷ Start value)^(1/n) − 1
Use it for
Average yearly growth across several years in a DI table.
| # | Formula | Expression | Use it for |
|---|---|---|---|
| 1 | GDP (expenditure method) | GDP = C + I + G + (X − M) | Components of national income. |
| 2 | GDP deflator | Nominal GDP ÷ Real GDP × 100 | Economy-wide price level. |
| 3 | Inflation rate | (CPIₜ − CPIₜ₋₁) ÷ CPIₜ₋₁ × 100 | Headline inflation from the CPI. |
| 4 | Real interest rate | (1 + Nominal) ÷ (1 + Inflation) − 1 | Return after inflation; approximately nominal − inflation. |
| 5 | Money multiplier (simple) | 1 ÷ Reserve ratio | How much money supply a unit of reserve money supports. |
| 6 | Fiscal deficit | Total expenditure − (Revenue receipts + Non-debt capital receipts) | Government's borrowing requirement. |
| 7 | Primary deficit | Fiscal deficit − Interest payments | Deficit excluding past debt costs. |
| 8 | NPV | Σ CFₜ ÷ (1 + r)ᵗ − Initial investment | Project appraisal in Finance. |
| 9 | Capital adequacy ratio | Capital ÷ Risk-weighted assets × 100 | Basel III bank regulation. |
| 10 | Growth rate (CAGR) | (End value ÷ Start value)^(1/n) − 1 | Average yearly growth across several years in a DI table. |
Worked Example: GDP Deflator and Real Interest Rate
Nominal GDP is ₹300 lakh crore and real GDP is ₹250 lakh crore. A deposit pays 7% while inflation is 5%.
- 1
GDP deflator
300 ÷ 250 × 100 = 120: prices are 20% above the base year.
- 2
Exact real rate
1.07 ÷ 1.05 − 1 ≈ 1.90%.
- 3
Approximate real rate
7% − 5% = 2%, close enough for most options.
Real Phase 1 sections, scored like the exam. No signup.
Know the Definitions, Not Just the Formula
ESI questions often test which items count, such as whether disinvestment receipts are non-debt capital receipts (they are). Learn the components as carefully as the arithmetic.
FAQs
Is Phase I quant different from other bank exams?expand_more
Phase I has a quantitative aptitude section similar to bank PO exams, mainly DI and arithmetic.
Does the Finance paper need calculations?expand_more
Some. Expect NPV, ratios and basic valuation, though most questions are conceptual.
Is the money multiplier really 1 ÷ CRR?expand_more
That's the textbook simplification. The real multiplier also depends on currency held by the public and excess reserves.
Next steps
Take a full RBI Grade B mock testFull Phase 1 mocks on this exact syllabus, scored instantly.