Quick Reference Guide for

RBI Grade B Officers

Online exam 2014

by
Santosh Kumar Perali

www.Gr8AmbitionZ.com
your A to Z competitive exam guide

General Awareness Quick Reference Guide for RBI Grade B Officers Exam 2014

Santosh Kumar. P

riends this is Santosh, I hope my previous Action Plan BI Grade B Officers 2014 was
somewhat useful to you, and today I want to share with you some General awareness
topics which are considered to be important in the point of view of exam.

Prologue
First I want to say one thing, that reading completely alien topics at this moment is not good for
your preparation, because there is a chance to get demoralize if you cannot understand their
essence or unable to answer some mock questions related to those topics. So what you read up
to now should be revised and may write some important facts on a paper for last day
reference. In this article I am sharing with you some topics which I feel important (may/may
not be in real) in the context of exam. As I am compiling this article on the basis of previous
papers of RBI and may give benefit, if RBI follows the same trend this time also, and if it will be
inspired by UPSC and want to backstab us then no strategy will do anything. Some people may
think that reading this/that book will give them good results, but that is not correct!, we should
not complete books instead we should complete topics in the syllabus for the exam.
Anyway back to the topic; please follow the list of priorities for the section of General
awareness in the exam according to the following sequence.
1) First read the SBI Clerks Quick Reference Guide by Gr8AmbitionZ, with special
emphasis on most recent stuff, reports and committees which will account 6 or 7 marks
in the exam. Dont try to dig in too deep here, as most of this trivial information will
consume your memory power.
2) Try to read all posts of Banking Awareness from Gr8AmbitionZ, because I observed
most of those posts contains qualitative information that is likely to come in RBI exams,
such as venture capital, banking sector reforms, facts about Indian financial system,
types of Banks etc. At first I decided to write elaborately about everything I know and
feel important for the exam, but it is meaningless to write like that since we have
everything we want here in our blog itself.
3) Now read these topics given below, if you feel something is important then jot it down, I
have my own limitations such as time constraints, unable to get some thoughts while
writing, too apathetic towards some concepts etc. I have written some definitions in
simple terms so that avoiding tricky language. so if you find any such discrepancies
please let me know so that I can correct them.

Important terms and definitions

1. Balance of trade: the part of a nation's balance of payments (difference between foreign
entities with domestic entities) that deals with merchandise (or visible) imports or exports.
2. Inflation: Inflation is as an increase in the price of bunch of Goods and services that projects
the Indian economy. An increase in inflation figures occurs when there is more demand and
less supply of the goods.
3. Deflation: Deflation is the continuous decrease in prices of goods and services. Deflation
occurs when the inflation rate becomes negative (below zero) and stays there for a longer
period. In Inflation we have two types demand pull (due to increase in demand), and cost
push(due to increase in prices)
4. Equity: Equity is a one financial instrument by which company invite the public to invest their

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General Awareness Quick Reference Guide for RBI Grade B Officers Exam 2014

Santosh Kumar. P

money in the company and investor can become a partner of the company. Generally, when the
company have insufficient money to expand its business it comes with equity shares. Angel
investors are the persons who will give financial help to a novice company to develop leaps and
bounds.
5. Fiscal policy: Fiscal policy defines the use of government spending and revenue collection to
influence the economy.
6. Monetary policy: It is the process by which the central bank or monetary authority of a
country controls (i) the supply of money, (ii) availability of money, and (iii) cost of money or
rate of interest.
7. Foreign Direct Investment (FDI): Investment of foreign assets directly into a domestic
company's structures, equipment, and organizations. It does not include foreign investment
into the stock markets
8. GDP: GDP stands for Gross Domestic Product. It is a method of measuring the size of economy
of a country. We can define as the total market value of all the goods and services produced in a
given period of time in a country.
9. GNP: The total value in money of all finished goods and services produced in an economy in
one full year, and all net property income from abroad. The GNP growth rate is an important
economic indicator for countrys economic development.
10. Tax: A fee charged by a government on a product, income, or activity. If tax is levied directly on
personal or corporate income, then it is a direct tax. If tax is levied on the price of a good or
service, then it is called an indirect tax.
11. Excise Tax: Tax imposed on specific goods and services, such as cigarettes and gasoline.
Customs duty is levied on inter market boundaries, cess is defined as tax on tax.
12. Sales tax Taxes paid on the goods and services people buy, Tobin tax is a tax which will be
levied on spot conversion of currencies in between countries, used curtail the drain of market.
13. VAT (Value added tax): It is an indirect tax on the consumption of the goods, paid by its
original producers upon the change in goods or upon the transfer of the goods to its ultimate
consumers. It is based on the value of the goods, added by the transferor. It is the tax in relation
to the difference of the value added by the transferor and not just a profit. All over the world,
VAT is payable on the goods and services as they form a part of national GDP.
14. CGT (Capital gain tax): It is a direct tax that will be levied on sales and purchases of capital
assets such as Shares, stakes, even costlier items which wont have depreciation such as
monuments, paintings.
15. GAAR (General anti avoidance rules): These are the provisions by which govt. Can restrict tax
avoidance (some MNCs deliberately avoid tax by doing transactions in tax heavens such as
Mauritius, Luxembourg (Where Sahantha biotech fraud happened), Cayman Islands (where
Vodafone fraud happened). Govt. India wants to plan these rules from 2016.
16. DTC (Direct tax code): This is a provision that can replace age old Income tax act 1961.Since
this act have loop holes (such as IT dept. Will have no jurisdiction over the fraud happened
outside India even Indian company purchased or shares of Indian company sold), so by this
code Govt. Will have power to curtail the menace of tax avoidance, and AAR (Authority for
advanced ruling is a body by govt. Can act independently over these issues and grant
permission for MNCs that their transfer of shares, absorption/amalgamation is legitimate or
not.
17. Transfer pricing: This is one tactic played by some fraudulent MNCs which will have some
suitcase companies in tax heavens and purchase the share value of some reputed companies in
a country by its intermediary in that country so that pricing of transferred shares will not have
exact value.
18. UNCITRAL: United nations commission on International trade Law is an UN body looks after

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General Awareness Quick Reference Guide for RBI Grade B Officers Exam 2014

Santosh Kumar. P

the peaceful trade among countries without any legal problems and is denoted as the appellate
authority for legal violation of continental rules in trade and commerce.
19. WIPO: World intellectual property organization is a body looks after the issues of protection of
Intellectual property rights of a country of owner of patent, Marrakesh treaty for Blind rights
is associated with this organization.
20. Subprime crisis: The banks which have obligation to facilitate money flow may get struck
their revenue assets with insolvents and become toxic assets, the process is called subprime
crisis.
21. Quantitative easing: This is the process at which govt. Can ease the money flow in to the
system by buying the toxic assets of banks, this was happened in USA in past recession period
by the chairman of the then Fed reserve Ben Bernanke.
22. Monetized debt: The govt. Can restore the original situation before economic crisis period by
offering subsidies and royalties and different incentives to increase the total quality production
of the country in stipulated time, US govt. Did it in 2010-11.
23. Participatory note: It is the economic instrument at which the FIIs not enlisted with the
prime regulator of a country and use this tool to lift the money by means of forward
trading/pricing and crate financial chaos in a particular country and SEBI of our India amended
to stop this nonsense.
24. Fiscal consolidation: It is the process at which the govt. Undertake austerity measures to put
restrictions on its economy such as de licensing of industries, disinvestment from stack etc. Our
India is following under RBI, a perfect measure by FRBM act (fiscal responsibility and
budgetary management act) 2003.
25. Financial inclusion: The purpose of this plan is the fruits of development should be
distributed among the masses and the deprived classes of the society, so different actions were
taken up, such as BSBDA accounts (Basic savings bank deposit accounts, general purpose
accounts to provide for every citizen of country by 01-01-2016 as part of financial literacy, and
no frill accounts (no restriction loans will be given) to bail out economically backward
sections and alleviate them from poverty.

Important pacts of India with others

(Important because RBI is the guarantee for them at global arena)
1. India has committed 8.5 billion rupees to Bhutan for Small Development Project for the
countrys the 11th Five Year Plan.
2. Iran and Japan signed a Memorandum of Understanding (MoU) for bilateral cooperation on
environmental issues in Tokyo.
3. India, Azerbaijan: to explore opportunities in energy sector India and Canada have signed three
MoUs for cooperation in health sector, audiovisual coproduction and skill development.
4. India, Poland agrees to form Joint Working Group for cooperation in films sector.
5. India and Fiji have signed a Double Taxation Avoidance Agreement, DTAA for the avoidance of
double taxation and for the prevention of fiscal evasion with respect to taxes on income.
6. India and Saudi Arabia have decided to enhance their bilateral trade and economic
cooperation over next 5 years.
7. India and Bhutan have signed an agreement on development of hydropower projects.
8. India and Germany could sign an agreement for 1 billion for Greenfield projects
9. India and Macedonia have signed a new double taxation avoidance agreement (DTAA) that
provides for among other things exchange of banking information for tax administration
purposes.

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General Awareness Quick Reference Guide for RBI Grade B Officers Exam 2014

Santosh Kumar. P

RBI Stuff
1. RBI has decided that Indian companies will not be permitted to raise External Commercial
Borrowings from overseas branches or subsidiaries of Indian banks for refinance or repayment
of the Rupee loans raised from domestic banking system.
2. Raghuram Rajan, the Governor of the Reserve Bank of India (RBI) announced that plastic
currency notes will be launched in 2015 after field trials.
3. RBI panel headed by exChairman of Axis Bank, P. J. Nayak recommend for diluting govt stake
in public sector banks to below 50 %. The government should cut its holding in public sector
banks to under 50 per cent, a Reserve Bank of India (RBI) panel report on Tuesday said,
criticising the way in which the lenders are now being governed.
4. Reserve Bank of India granted banking licences to infrastructure financing firm IDFC and
microfinance institution Bandhan from among 25 applicants that included corporate
heavyweights ADAG Group, Aditya Birla Group and Bajaj Group.
5. Chandra Shekhar Ghosh: CMD of Bandhan financial services,Dr. Rajiv B. Lall: Chairman of IDFC
Infrastructure Finance Company.
6. Reserve Bank of India (RBI) issued the guidelines to allow the minors of age above 10 years to
independently open and operate savings bank accounts and use other facilities like ATM and
cheque books. RBI extends date of exchanging pre2005 notes to Jan 1, 2015
7. RBI extended the timeline for full implementation of Basel III norms 31 March 2019 instead of
31 March 2018.
8. Reserve Bank of India (RBI) hiked the trade related remittance limit from 2 lakh rupees to 5
lakh rupees per transaction with immediate effect. It also increased the number of transaction
handled by exchange houses.
9. KC Chakrabarty, Deputy Governor, Reserve Bank of India has quit three months ahead of
completion of his term.
10. RBI pegged 201415 GDP growth at a central estimate of 5.5 percent, economic growth for
201415 expected at 5.5 pc., CAD expected to come down to 2 pc of GDP in 201415.Retail
inflation to be 6pc.
11. RBI panel headed by RBI Deputy Governor Anand Sinha has recommended bringing a
benchmark floating interest rate, especially for home loans. Panel also suggested Indian Banks
Base Rate (IBBR).
12. The deadline for switching to new format bank cheques under the Cheque Truncation System
(CTS) ended on 30 April 2014.
13. RBI scraps 26% cap on interest rate for MFIs: (RBI) removed 26 per cent cap on the interest
rate that can be charged by a microfinance company to its borrowers. MFI is allowed to charge
interest rate equal to 2.75 times the average of the base rates of the top five commercial banks.
14. RBI permits 4 nonbank entities to set up white label ATMs: The Reserve Bank has issued
certificate of authorisation to four nonbank entities: Tata Communications Payment
Solutions
15. Muthoot Finance, Prizm Payment Services and Vakrangee Ltd. , to set up White Label ATMs
(WLAs) in the country.
16. RBI permits Srei to roll out white label ATMs: Srei Infrastructure Finance is planning to start
rollout of its while label ATMs (WLAs) between July and September starting with a pilot of
200 TierIII towns in Uttar Pradesh and Bihar.
17. The expert committee headed by Urjit R. Patel, Deputy Governor of the Reserve Bank of India
examine the current monetary policy framework of the Reserve Bank of India (RBI) has
suggested that the apex bank should adopt the new CPI (consumer price index) as the measure
of the nominal anchor for policy communication. The nominal anchor or the target for inflation

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General Awareness Quick Reference Guide for RBI Grade B Officers Exam 2014

Santosh Kumar. P

should be set at 4 per cent with a band of +/ 2 per cent around it.
18. Ex-Chairman of Axis Bank, P. J. Nayak is the head of the expert panel to review bank boards
governance. The panel will review the RBI's regulatory guidelines on ownership of banks and
representation in their boards, among other things.
19. The Reserve Bank of India has raised the Foreign Institutional Investors, FIIs investment limit
in the Power Grid Corporation to 30 per cent of its paid up capital, under the Portfolio
Investment Scheme.
20. RBI relaxes gold loan norms: The Reserve Bank of India has allowed NonBanking Financial
Companies, NBFCs to lend up to 75 per cent of the value of gold. It was 60 per cent earlier.
21. RBI panel (headed by banker Nachiket Mor) has suggested setting up of specialised banks to
cater to low income households to ensure that all citizens have bank accounts by 2016.
22. The RBIappointed committee on financial inclusion has recommended that the central bank
should set up specialised banks called Payments Bank to provide payment services and deposit
products to small businesses and lowincome households. The committee, headed by Nachiket
Mor, said that since the new bank will be dealing with poor customers, such a bank must be
allowed to accept a maximum deposit of not more than Rs 50,000.
23. The Reserve Bank of India (RBI) had set up a panel under executive director Deepak Mohanty
to review the current system of data collection, dissemination and data management processes
in the central bank and improve the existing mechanism.
24. RBI tightens norms for credit card holders: RBI advised banks to treat a credit card account as
a nonperforming asset if the customer fails to pay the minimum due amount within a
stipulated 90day period.

Epilogue
Friends these topics have greater possibility to come in exam but as I said I could not write
more than something here, it depends on you to revise the old materials and gather some stuff
related to RBI and its operations. But one thing is sure that this year the quality of paper will be
somewhat higher in terms of quality and inferior in terms of toughness.
So be prepared to combat giant RBI with your strong determination and dedication.

Thank you all

Santosh kumar Perali

Hyderabad

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