Banking and Finance Basics
Complete Notes for SSC GD GK Preparation
1. What is a Bank?
Banking is one of the most important parts of the Indian economy. For SSC GD and all competitive exams, questions on RBI, banking types, money, financial institutions, digital payments, monetary tools are very common.
A bank is a financial institution that accepts deposits from the public and provides loans.
Simple Definition: A bank is a place where people keep money safely and borrow money when needed.
2. Types of Banks in India
India has several types of banks:
- Scheduled Banks
- Commercial Banks
- Cooperative Banks
- Regional Rural Banks (RRBs)
- Payments Banks
- Small Finance Banks
- Development Banks
3. Scheduled Banks
Banks listed under the Second Schedule of RBI Act, 1934.
Features:
- Follow RBI rules
- Eligible for RBI loans
- Maintain CRR and SLR
- Includes all major commercial banks
Examples:
- State Bank of India
- Punjab National Bank
- Canara Bank
- HDFC Bank
- ICICI Bank
4. Commercial Banks
These are banks that operate for profit.
Public Sector Banks
(majority govt-owned)
- SBI
- PNB
- Bank of Baroda
Private Sector Banks
- HDFC
- ICICI
- Axis Bank
Foreign Banks
- HSBC
- Citibank
5. Cooperative Banks
Features:
- Owned and operated by members
- Provide loans mainly to farmers and rural people
Examples:
- State Cooperative Banks
- District Cooperative Banks
- Primary Agricultural Credit Societies (PACS)
6. Regional Rural Banks (RRBs)
Established to serve rural areas.
Joint Ownership Structure:
- Government of India: 50%
- State Government: 15%
- Sponsor Bank: 35%
Examples:
- Prathama Bank
- Gramin Banks in various states
7. Payments Banks
Features:
- Provide small savings accounts and digital payments
- Cannot give loans
Examples:
- Airtel Payments Bank
- Paytm Payments Bank
- India Post Payments Bank
8. Small Finance Banks (SFBs)
Purpose:
Provide loans to small businesses, farmers, and low-income groups
Examples:
- Ujjivan Small Finance Bank
- Equitas Small Finance Bank
- AU Small Finance Bank
9. Reserve Bank of India (RBI)
RBI is the central bank of India. It controls and regulates all banks in India.
Key Details:
- Established: 1935
- Nationalised: 1949
- Headquarters: Mumbai
- Current Governor: (update as per year)
10. Functions of RBI
- Issues currency
- Controls credit and money supply
- Banker to Government
- Banker to Banks
- Regulates financial system
- Manages foreign exchange (under FEMA Act)
- Controls inflation through monetary policy
11. Monetary Policy
Monetary policy means controlling money supply and interest rates. RBI uses several tools for this:
Repo Rate
Rate at which RBI lends to banks.
Reverse Repo Rate
Rate at which banks deposit money with RBI.
Bank Rate
Long-term lending rate of RBI.
CRR (Cash Reserve Ratio)
Percentage of deposits banks must keep with RBI.
SLR (Statutory Liquidity Ratio)
Percentage of deposits banks must keep in gold, cash, or securities.
Open Market Operations (OMO)
Buying and selling of government securities.
12. Banking Terms Frequently Asked in SSC Exams
NPA (Non-Performing Asset)
Loans that are not repaid for more than 90 days.
CASA
Current Account and Savings Account.
RTGS
Real-time gross settlement.
NEFT
Electronic fund transfer in batches.
IMPS
Instant payment service.
UPI
Unified Payments Interface. Most used mobile payment system.
NPCI
National Payments Corporation of India. Develops digital payment systems like UPI, RuPay.
RuPay Card
India's domestic card payment network.
13. Types of Accounts
Savings Account
- For personal savings
- Interest is provided
Current Account
- For businesses
- No interest given
Fixed Deposit (FD)
- Money locked for a time
- Higher interest
Recurring Deposit (RD)
- Monthly deposit scheme
14. Digital Banking Systems
- UPI
- NEFT
- RTGS
- IMPS
- Net Banking
- Mobile Banking
- ATM
- Debit and Credit Cards
UPI is the fastest-growing digital platform.
15. Financial Inclusion
Financial inclusion means making banking services available to all people.
Jan Dhan Yojana
- Zero balance bank accounts
- RuPay card provided
Mudra Yojana
- Loans for small businesses
- Categories: Shishu, Kishore, Tarun
Stand-Up India
- Loans for SC/ST and women entrepreneurs
16. Insurance Sector Basics
IRDAI
Insurance Regulatory and Development Authority of India. Regulates all insurance companies.
Types of Insurance:
- Life Insurance
- Health Insurance
- Vehicle Insurance
- General Insurance
Major Companies:
- LIC
- New India Assurance
- ICICI Lombard
- HDFC Ergo
17. Financial Market Structure
Money Market
- Short-term funds
- Treasury bills, commercial paper
Capital Market
- Long-term funds
- Shares, bonds, debentures
Stock Market
- Platforms where shares are traded
- Examples: BSE, NSE
SEBI
Securities Exchange Board of India. Regulates stock market.
18. Important Banking Acts
- RBI Act, 1934
- Banking Regulation Act, 1949
- Negotiable Instruments Act, 1881
- Prevention of Money Laundering Act (PMLA), 2002
- FEMA Act, 1999
19. Quick Revision Table
| Topic | Key Points |
|---|---|
| RBI | Central Bank of India |
| Repo | RBI lends to banks |
| Reverse Repo | Banks deposit with RBI |
| CRR | Cash kept with RBI |
| SLR | Cash/gold/securities kept by banks |
| NEFT | Batch-based money transfer |
| IMPS | Instant money transfer |
| UPI | Mobile real-time payment |
| NPCI | UPI and RuPay creator |
| NPA | Bad loan not paid for 90 days |
| FD | Fixed deposit |
20. Memory Tricks for SSC GD
Repo and Reverse Repo:
- Repo = RBI gives
- Reverse Repo = RBI takes
CRR vs SLR:
- CRR = Only cash
- SLR = Cash + Gold + Securities
UPI:
- Real-time mobile payments
- Developed by NPCI
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